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Section: Classification and arrangement; effect on construction

Statute: 26:2J-5

a. The powers of a health maintenance organization include the following: (1) the purchase, lease, construction, renovation, operation, or maintenance of health care facilities, and their ancillary equipment, and such property as may reasonably be required for its principal office or for such other purposes as may be necessary in the transaction of the business of the organization; (2) the receiving of funds by loan or otherwise; (3) the making of loans to a medical group under contract with it in furtherance of its program or the making of loans to a corporation or corporations under its control for the purpose of acquiring or constructing health care facilities or in furtherance of a program providing health care services to enrollees; (4) the assumption of responsibility for the furnishing of health care services through providers which are under contract with or employed by the health maintenance organization to persons including but not limited to enrollees; (5) the contracting with any person for the performance on its behalf of certain functions such as marketing, enrollment and administration; (6) the contracting with an insurance company licensed in this State, or with a hospital or medical service corporation authorized to do business in this State, for the provision of insurance, indemnity, or reimbursement against the cost of health care services provided by the health maintenance organization which may include provisions for reasonable classifications for the purpose of establishing rates and reasonable restrictions based on underwriting consideration; and (7) the offering, in addition to basic health care services, of: (a) additional health care services; (b) indemnity benefits covering out-of-area or emergency services; and (c) indemnity benefits, in addition to those relating to out-of-area and emergency services, provided through insurers or hospital or medical service corporations. b. (1) A health maintenance organization shall file notice, with adequate supporting information, with the commissioner prior to the exercise of any power granted in subsection a. (1) or (2) of this section. The commissioner shall disapprove such exercise of power if in his opinion it would substantially and adversely affect the financial soundness of the health maintenance organization and endanger its ability to meet its obligations. If the commissioner does not disapprove within 30 days of filing, it shall be deemed approved. (2) The commissioner may promulgate rules and regulations exempting from the filing requirements of paragraph (1) of this subsection those activities having a de minimis effect. L.1973, c. 337, s. 5, eff. Dec. 27, 1973.

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