SB 0977 Imposes Conditions On Restructuring of Nonprofit Hlth. Plans
LR Number:S3542.01I Fiscal Note:3542-01
Committee:Public Health and Welfare
Last Action:04/04/96 - SCS Voted Do Pass S Public Health & Welfare Committee
Effective Date:August 28, 1996
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Current Bill Summary

SCS/SB 977 - Any nonprofit health care service plan transferring a substantial amount of its assets to a for-profit business shall obtain approval from the Director of the Department of Insurance before the restructuring. The Department shall determine what is substantial.

APPROVAL PROCEDURE - Before gaining approval, the health plan must submit a report to the Director summarizing its charitable activities, its procedures for avoiding conflicts, and its future charitable activities. Every applicant for restructuring shall submit for approval a public benefit program identifying activities to meet its nonprofit public benefit obligations.

CHARITABLE SET-ASIDE - The restructuring may only be approved if the fair market value of that part of the health plan is set aside for charitable purposes. The set-aside shall be transferred to tax-exempt charitable organizations dedicated to health care services. At least 80% of annual disbursements shall be spent for the uninsured and underinsured.

Each organization receiving a set-aside shall be independent of influence or control by the health care plan. They shall provide the Director of Insurance and the Attorney General with an annual report which includes a description of charitable activities.

FEES - Applicants for restructuring or conversion shall pay a filing fee equal to the cost of processing the application, including overhead costs, the cost of drafting regulations and the cost of notices and hearings. Contract costs for experts and consultants shall be paid by the applicants promptly.

PUBLIC NOTICE, RECORDS - The Director shall publish notice of an application to restructure or convert in newspapers of general circulation in the plan's service area. A public hearing shall be held. Applications, reports and plans shall be public records.

ANNUAL REPORT - The Director of Revenue shall prepare an annual report describing nonprofit organizations in Missouri. The report shall compare the cost to the public of charitable services performed by nonprofit organizations compared to lost taxation.

EXISTING PLANS - Any plan whose for profit subsidiaries receive more premiums and gross income than the plan itself shall comply with the set-aside provisions, the report and the public benefit program under this act.