HB-4576, As Passed House, December 12, 2013

SUBSTITUTE FOR

HOUSE BILL NO. 4576

A bill to amend 1956 PA 218, entitled

"The insurance code of 1956,"

by amending section 102 (MCL 500.102), as amended by 2000 PA 252,

and by adding chapter 12A.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 102. (1) "Commissioner" as used in this act means the

~~commissioner of the office of financial and insurance~~

~~services.~~director.

(2) "Department" as used in this act means the ~~office of~~

~~financial and insurance services.~~department of insurance and

financial services.

(3) "Director" as used in this act, unless the context clearly

implies a different meaning, means the director of the department

of insurance and financial services.

CHAPTER 12A

Sec. 1261. As used in this chapter:

(a) "Affordable care act" means the patient protection and

affordable care act, Public Law 111-148, as amended by the health

care and education reconciliation act of 2010, Public Law 111-152.

(b) "Agent" means an insurance producer.

partnership, limited liability company, limited liability

partnership, or other legal entity.

(d) "Certificate" means a document issued by the director

authorizing a person to act as a navigator for the qualifications

specified in the document. The certificate itself does not create

any actual, apparent, or inherent authority in the holder to

represent or commit an insurer.

(e) "Exchange" means an American health benefits exchange

established or operating pursuant to the affordable care act.

(f) "Home state" means the District of Columbia or any state

or territory of the United States in which an insurance producer

maintains his or her principal place of residence or principal

place of business and is licensed to act as an insurance producer.

(g) "Insurance" means any of the lines of authority in chapter

(h) "Insurance producer" means a person required to be

licensed under the laws of this state to sell, solicit, or

negotiate insurance.

(i) "Navigator" means a person that receives any funding from

an exchange or the federal government and is designated or selected

by an exchange or the federal government to perform any of the

duties identified in 42 USC 18031(i)(3).

(j) "Negotiate" means the act of conferring directly with or

offering advice directly to a purchaser or prospective purchaser of

a particular contract of insurance concerning any of the

substantive benefits, terms, or conditions of the contract,

provided that the person engaged in that act either sells insurance

or obtains insurance from insurers for purchasers.

(k) "Sell" means to exchange a contract of insurance by any

means, for money or its equivalent, on behalf of an insurance

company.

(l) "Solicit" means attempting to sell insurance or asking or

urging a person to apply for a particular kind of insurance from a

particular company.

Sec. 1262. (1) An individual shall not act as a navigator as

described in 42 USC 18031(i)(3) unless he or she has filed an

application under section 1263 and is certified with this state as

a navigator.

(2) Unless certified as a navigator, an individual shall not

receive funding from an exchange.

(3) A navigator shall do all of the following:

(a) Conduct public education activities to raise awareness of

the availability of qualified health plans.

(b) Distribute fair and impartial information concerning

enrollment in all qualified health plans offered within the

exchange and the availability of the premium tax credits under

section 36B of the internal revenue code of 1986, 26 USC 36B, and

cost-sharing reduction under section 1402 of the affordable care

act.

(d) Provide referrals to appropriate state agencies for an

enrollee with a grievance, complaint, or question regarding the

enrollee's health plan, coverage, or a determination under such

plan coverage.

(e) Provide information in a manner that is culturally and

linguistically appropriate to the needs of the population served by

the exchange.

(4) A navigator shall not do any of the following:

(a) Sell, solicit, or negotiate health insurance.

(b) Endorse any particular health benefit plan or group of

health benefit plans.

benefit plans or other products not offered in the exchange.

(5) If an exchange is operational in this state, the director

shall determine whether a program to certify and train navigators,

other than a program established by this state, protects the

privacy and security of personally identifiable information of the

residents of this state under the laws of this state. If the

director determines that the program does not protect the residents

of this state under this subsection, the director shall do all of

the following:

(a) Establish a certification and training program for a

prospective navigator. The certification and training program shall

include, but is not limited to, all of the following:

(i) A criminal history check using the department of state

police's internet criminal history access tool (ICHAT).

(ii) Training on compliance with the health insurance

portability and accountability act of 1996, Public Law 104-191, or

regulations promulgated under that act, training on ethics,

training on provisions of the affordable care act relating to

navigators, and any necessary state-specific training as determined

by the director.

(b) Develop an application and disclosure form by which a

navigator shall disclose any potential conflicts of interest, as

well as any other information required by the director.

Sec. 1263. (1) An individual applying for a navigator

certificate shall file with the director the uniform application

required by the director and shall declare under penalty of

refusal, suspension, or revocation of the certificate that the

statements made in the application are true, correct, and complete

to the best of the individual's knowledge and belief. An

application for a navigator's certificate shall not be approved

unless the director finds that the individual meets all of the

following:

(a) Is at least 18 years of age.

(b) Has not committed any act listed that would be a ground

for denial, suspension, or revocation of an insurance producer's

license in section 1239(1).

1262.

(d) Has paid the fees required by the director.

(e) Has successfully passed any required examination.

(f) Has successfully completed a criminal history check under

section 1262.

(2) A business entity acting as a navigator shall obtain a

navigator certificate. A business entity applying for a navigator

certificate shall file with the director the uniform business

entity application required by the director. An application for a

navigator certificate under this subsection shall not be approved

unless the director finds that the business meets all of the

following:

(a) The business entity has paid the fees required by the

director.

(b) The business entity has designated an individual certified

navigator responsible for the business entity's compliance with

this state's insurance laws, rules, and regulations.

section 1239(1).

(2) The director may require the production of any documents

reasonably necessary to verify the information contained in an

application.

Sec. 1264. (1) In addition to any other powers under this act,

the director may place on probation, suspend, or revoke a

navigator's certificate or may levy a civil fine under section 1270

or any combination of actions, and the director shall refuse to

issue a navigator certificate under section 1263, for any 1 or more

causes that would be a ground for refusal, suspension, or

revocation of an insurance producer's license under section 1239.

Beginning October 1, 2013, the director shall revoke a navigator

certificate of any person or refuse to issue a navigator

certificate for a person that receives financial compensation,

including monetary and in-kind compensation, gifts, or any

compensation related to enrollment from an insurer offering

qualified health benefits through an exchange operating in this

state. The director may deny, suspend, approve, renew, or revoke

the certificate of a navigator if the director considers it

necessary to protect insureds and the public.

(2) The navigator certificate of a business entity may be

suspended, revoked, or refused if the director finds, after

hearing, that an individual navigator's violation was known or

should have been known by 1 or more of the partners, officers, or

managers acting on behalf of the business entity and the violation

was neither reported to the director nor corrective action taken.

(3) The director may examine the books and records of a

navigator to determine whether the navigator is conducting its

business in accordance with this chapter. For the purpose of

facilitating the examination, the navigator shall allow the

director free access, at reasonable times, to all of the

navigator's books and records relating to transactions to which

this chapter applies.

Sec. 1265. A business entity certified as a navigator shall,

in a manner prescribed by the director, make available a list of

all individual navigators that the business entity employs or

supervises or with which the business entity is otherwise

affiliated.

Sec. 1266. A business entity that terminates the employment,

engagement, affiliation, or other relationship with an individual

navigator shall notify the director using a format prescribed by

the director of the termination within 30 days following the

effective date of the termination if the reason for termination is

1 of the reasons listed in section 1239 or the business entity has

knowledge the individual navigator was found by a court or

government body to have engaged in any of the activities listed in

section 1239.

Sec. 1268. (1) When applying for a certificate to act as a

navigator, the applicant shall report his or her mailing and

electronic mail address to the director. A navigator shall notify

the director of any change in his or her mailing or electronic mail

address within 30 days after the change. The director shall

maintain the mailing and electronic mail address of each navigator

on file.

(2) A notice of hearing or service of process may be served

upon a navigator in any action or proceeding for a violation of

this act by mailing the notice or process by first-class mail to

the navigator's mailing address reported to the director under

subsection (1).

Sec. 1269. (1) The director shall refuse to grant a

certificate to act as a navigator to an applicant who fails to meet

the requirements of this chapter. Notice of the refusal shall be in

writing and shall set forth the basis for the refusal. If the

applicant submits a written request within 30 days after mailing of

the notice of refusal, the director shall promptly conduct a

hearing in which the applicant shall be given an opportunity to

show compliance with the requirements of this chapter.

(2) The director, after notice of and opportunity for a

hearing, may suspend or revoke the certificate of a navigator who

fails to maintain the standards required for initial certification

or who violates any provision of this act.

(3) Without prior hearing, the director may order summary

suspension of a certificate if he or she finds that protection of

the public requires emergency action and incorporates this finding

in his or her order. The suspension shall be effective on the date

specified in the order or upon service of a certified copy of the

order on the certificate holder, whichever is later. If requested,

the director shall conduct a hearing on the suspension within a

reasonable time but not later than 20 days after the effective date

of the summary suspension unless the person whose certificate is

suspended requests a later date. At the hearing, the director shall

determine if the suspension should be continued or if the

suspension should be withdrawn, and, if proper notice is given, may

determine if the certificate should be revoked. The director shall

announce his or her decision within 30 days after conclusion of the

hearing. The suspension shall continue until the decision is

announced.

(4) The director, or his or her designated deputy, may issue

subpoenas to require the attendance and testimony of witnesses and

the production of documents necessary to the conduct of the hearing

and may designate a department employee to make service. The

subpoenas issued by the director, or his or her designated deputy,

may be enforced upon petition to the circuit court of Ingham county

to show cause why a contempt order should not be issued, as

provided by law.

Sec. 1270. (1) If the director finds that a person has

violated this chapter, after an opportunity for a hearing pursuant

to the administrative procedures act of 1969, 1969 PA 306, MCL

24.201 to 24.328, the director shall reduce the findings and

decision to writing and shall issue and cause to be served upon the

person charged with the violation a copy of the findings and an

order requiring the person to cease and desist from the violation.

In addition, the director may order any of the following:

(a) Payment of a civil fine of not more than $500.00 for each

violation. However, if the person knew or reasonably should have

known that he or she was in violation of this chapter, the director

may order the payment of a civil fine of not more than $2,500.00

for each violation. An order of the director under this subsection

shall not require the payment of civil fines exceeding $25,000.00.

A fine collected under this subdivision shall be turned over to the

state treasurer and credited to the general fund of the state.

(b) The suspension or revocation of the person's navigator

certificate.

(2) The director may by order, after notice and opportunity

for hearing, reopen and alter, modify, or set aside, in whole or in

part, an order issued under this section, if in the opinion of the

director conditions of fact or of law have changed to require that

action, or if the public interest requires that action.

(3) If a person knowingly violates a cease and desist order

under this chapter and has been given notice and an opportunity for

a hearing held pursuant to the administrative procedures act of

1969, 1969 PA 306, MCL 24.201 to 24.328, the director may order a

civil fine of not more than $10,000.00 for each violation, or a

suspension or revocation of the person's navigator certificate, or

both. An order issued by the director pursuant to this subsection

shall not require the payment of civil fines exceeding $50,000.00.

A fine collected under this subsection shall be turned over to the

state treasurer and credited to the general fund of the state.

(4) The director may apply to the circuit court of Ingham

county for an order of the court enjoining a violation of this

chapter.

Sec. 1271. This chapter does not authorize or shall not be

construed to authorize the establishment or operation of an

American health benefit exchange in this state pursuant to the

patient protection and affordable care act, Public Law 111-148, as

amended by the health care and education reconciliation act of

2010, Public Law 111-152.

Enacting section 1. (1) This amendatory act shall not be

construed to do any of the following:

(a) Authorize the establishment or operation of an American

health benefit exchange in this state pursuant to the patient

protection and affordable care act, Public Law 111-148, as amended

by the health care and education reconciliation act of 2010, Public

Law 111-152.

(b) Authorize this state or an agency of this state to conduct

or oversee state-level governmental consumer assistance functions

for an American health benefit exchange established or operating in

this state pursuant to the patient protection and affordable care

act, Public Law 111-148, as amended by the health care and

education reconciliation act of 2010, Public Law 111-152.

other power to this state or an agency of this state to authorize,

establish, or operate an American health benefit exchange in this

state that did not exist before the effective date of this

amendatory act.

(2) It is the intent of this legislature that any consumer

assistance functions by or overseen by this state or an agency of

this state with regard to an American health benefit exchange shall

be conducted in a manner that utilizes and highlights Michigan-

based resources, including insurance producers, in order to best

serve the residents of this state and to ensure appropriate health

care decisions.

Enacting section 2. This amendatory act applies to policies,

certificates, or contracts delivered, issued for delivery, or

renewed in this state on and after the effective date of this

amendatory act.