HOUSE BILL No. 4687 April 24, 1997, Introduced by Reps. Green, Schauer, Voorhees, Kukuk, Lowe, Baade, McManus, Griffin, Goschka, Nye, Walberg, Rhead, Schermesser, Tesanovich, Anthony, DeHart, Scott, Frank, Leland, Harder and Owen and referred to the Committee on Health Policy. A bill to amend 1980 PA 350, entitled "The nonprofit health care corporation reform act," by amending section 301 (MCL 550.1301), as amended by 1988 PA 45. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 301. (1) The property and lawful business of a health 2 care corporation existing and authorized to do business under 3 this act shall be held and managed by a board of directors to 4 consist of not more than 35 members. The board shall exercise 5 the powers and authority necessary to carry out the lawful pur- 6 poses of the corporation, as limited by this act and the 7 CORPORATION'S articles of incorporation andthebylaws.of8the corporation.9 (2) Four voting members of the board shall be 10 representatives of the public appointed by the governor by and 02280'97 DKH 2 1 with the advice and consent of the senate. Two of those members 2 shall be retired individuals 62 years of age or older. The term 3 of office of each PUBLIC representativeof the publicshall be 4 2 years,and until a successor is appointed and qualified. If 5 a vacancy occurs before the conclusion of a 2-year term, the 6 appointment of a representative to complete the term shall be 7 made in the same manner as the original appointment. 8 (3) The board of directors shall consist of not more than 9 25% provider directors. In addition to physician and hospital 10 provider directors, not less than 1 provider director shall be a 11 registered professional nurse who shall be representative of 12 licensees under part 172 of the public health code,Act No. 36813of the Public Acts of 1978, as amended, being sections 333.1720114to 333.17242 of the Michigan Compiled Laws,1978 PA 368, MCL 15 333.17201 TO 333.17242, NOT LESS THAN 1 PROVIDER DIRECTOR SHALL 16 BE A LICENSED CHIROPRACTOR WHO SHALL BE REPRESENTATIVE OF LICENS- 17 EES UNDER PART 164 OF THE PUBLIC HEALTH CODE, 1978 PA 368, MCL 18 333.16401 TO 333.16431, and not less than 1 provider director 19 shall be representative of the provider whose services, in the 20 1984 calendar yearin the case ofFOR an existing health care 21 corporation, or, in the calendar year immediately following 22 incorporationin the case ofFOR a newly-formed health care 23 corporation, generated the largest number of benefit claims 24 received by the corporation from its subscribers. Other provider 25 directors shall be as broadly representative of provider classes 26 as possible. 02280'97 3 1 (4) The bylaws of a health care corporation may authorize 2 not more than 1 officer or employee of the corporation to serve 3 as a voting or nonvoting director. 4 (5) The remaining members of the board of directors shall 5 include representatives of large subscriber groups, medium sub- 6 scriber groups, small subscriber groups, and nongroup subscrib- 7 ers, in proportionswhichTHAT fairly represent the total sub- 8 scriber population of the health care corporation. However, at 9 least 3 directors shall represent nongroup subscribers, at least 10 1 of whom shall be a retired individual 62 years of age or older, 11 and at least 3 directors shall represent small subscriber 12 groups. Large and medium subscriber groups shall be represented, 13 to the greatest extent possible, by an equal number of labor and 14 management representatives and shall be categorized as labor sub- 15 scriber representatives or management subscriber 16 representatives. 17 (6) The method of selection of the directors, other than the 18 directors who are representatives of the public, and additional 19 provisions and requirements for further refinement or specifica- 20 tion regarding the number of directors comprising each component 21 shall be specified in the bylaws. The terms of office of direc- 22 tors, other than the directors who are representatives of the 23 public, and the method for filling vacancies in those offices 24 shall be provided in the bylaws. However, if a term of office of 25 more than 1 year is prescribed by the bylaws, at least 1/3 of the 26 members of the board shall be selected each year. 02280'97 4 1 (7) The method of selection of each category of subscribers 2 entitled to representation on the board under subsection (5) 3 shall maximize subscriber participation to the extent reasonably 4 practicable. This subsectionshall permit, but not require,5 PERMITS the statewide election of a director or member of the 6 corporate body. The method of selection shallneitherNOT 7 permitnorOR require nomination, endorsement, approval, or 8 confirmation of a candidate or director by the corporate body, 9 the board of directors, or the management of the health care cor- 10 poration, or any member or members of any of these. This subsec- 11 tionshallDOES not apply to the selection of an officer or 12 employee as a director pursuant to subsection (4). This subsec- 13 tionshallDOES not limit the rights of any director, member of 14 the corporate body, or employee or officer of the health care 15 corporation to participate in the selection process in his or her 16 capacity as a subscriber, to the same extent as any other sub- 17 scriber may participate. 18 (8)For the purposes ofAS USED IN this section: 19 (a) "Health care provider" or "provider" includes: 20 (i) A person defined as a health care provider or provider 21 in section 105(4); a person employed by a health care facility, 22 as defined in section 105(3); or a director, officer, or trustee 23 of a health care provider, as defined in section 105(4), unless 24 the person serves in that capacity as a representative selected 25 by the same subscriber group or collective bargaining representa- 26 tivewhichTHAT the person represents on the board of a health 27 care corporation. 02280'97 5 1 (ii) Except as provided in subdivision (b), a spouse, child, 2 or parent of a health care provider who resides in the same 3 household. 4 (iii) A person who receives more than 25% of his or her 5 annual income through the provision of goods or services to 6 health care providers, or who is an employee, officer, trustee, 7 or director of a firm or organizationwhichTHAT receives more 8 than 25% of its annual income through the provision of goods or 9 services to health care providers. 10 (b) For purposes of determining whether a director is a pro- 11 vider director, "health care provider" or "provider" does not 12 include a spouse, child, or parent of a health care provider who 13 resides in the same household if all of the following criteria 14 are met: 15 (i) Not more than 1/3 of the total annual household income 16 is earned by that health care provider. 17 (ii) The term of office of the director commences in the 18 1988 calendar year. 19 (iii) Not more than 2 directors qualify for the exemption 20 under this subdivision. 21 (9) A director shall not be an employee, agent, officer, or 22 director of an insurance company writing disability insurance 23 inside or outside this state. 02280'97 Final page. 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