Health maintenance organizations must keep $3 million in capital and surplus, and the commissioner must manage liquidation payments and claim priorities.
§254. Protection against insolvency A. Repealed by Acts 2021, No. 159, §2, eff. July 1, 2021. B. Repealed by Acts 2021, No. 159, §2, eff. July 1, 2021. C. Each health maintenance organization shall establish prior to the issuance of any certificate of authority, and shall maintain as long as it does business in Louisiana as a health maintenance organization, capital and surplus in the amount of three million dollars. D. Repealed by Acts 2021, No. 159, §2, eff. July 1, 2021. E. Repealed by Acts 2021, No. 159, §2, eff. July 1, 2021. F. Repealed by Acts 2021, No. 159, §2, eff. July 1, 2021. G. In the liquidation or windup of the affairs of the health maintenance organization, notwithstanding any provision of law to the contrary, the commissioner shall assure any payments authorized by the Department of Insurance and issued prior to any order of liquidation are honored; thereafter, the following schedule of preferences shall be followed: (1) The commissioner's costs and expenses of administration, including unpaid federal and state employment withholding taxes. (2) Compensation actually owing to employees other than officers of a health maintenance organization for services rendered within three months prior to the commencement of a proceeding against the health maintenance organization under this Subpart, but not exceeding two thousand five hundred dollars for such employee, shall be paid prior to the payment of any other debt or claim and in the discretion of the commissioner may be paid as soon as practicable after the proceeding has commenced. However, at all times the commissioner shall reserve such funds as will in his opinion be sufficient for the payment of all claims in Paragraphs (1) through (3) of this Subsection. This priority shall be in lieu of any other similar priority which may be authorized by law as to wages or compensation of such employees. (3) Claims for covered benefits prior to cancellation that are filed within ninety days of an order of liquidation. The commissioner shall, within one hundred twenty days, present a plan for timely payment of such claims to the court for approval. The Department of Insurance shall not require refiling any claim received for covered benefits or provision of any proof of claim that would otherwise be applicable to non-benefit claims. The maximum amount paid shall not exceed the amount that would be paid under Title XVIII of the Social Security Act, 42 U.S.C. 301 et seq. The department shall establish reasonable amounts for any services or supplies covered under a health policy or contract for which an amount has not been determined under the federal Medicare program. (4) Claims for unearned premiums or other premium refunds. (5) All other claims, including claims for covered benefits provided prior to cancellation that are not filed within ninety days of an order of liquidation. H. Effective August 1, 2018, the liquidation or windup of affairs of a health maintenance organization shall be governed by the provisions of Chapter 9 of this Title, R.S. 22:2001 et seq. Acts 1986, No. 1065, §1; Acts 1995, No. 1231, §1, eff. Sept. 1, 1995; Acts 2003, No. 1106, §1, eff. Dec. 31, 2003; Redesignated from R.S. 22:2010 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 503, §1; Acts 2012, No. 54, §1; Acts 2018, No. 97, §1; Acts 2021, No. 159, §2, eff. July 1, 2021. NOTE: Former R.S. 22:254 redesignated as R.S. 22:144 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.