Section 16-25A-7

Board to contract for benefits or administration; competitive basis; reinsurance; evidence and information of coverage; notice upon denial of claim.

(a) The board is hereby authorized to execute a contract or contracts to provide for the benefits or the administration of benefits under the plan of health insurance coverage determined upon in accordance with the provisions of this chapter. Such contract or contracts may be executed with one or more agencies or corporations licensed to transact group health insurance business in this state. All of the benefits to be provided under this chapter may be included in one or more similar contracts issued by the same or different companies. The board is further authorized to develop a plan whereby it may become self-insured upon its finding that such arrangement would be financially advantageous to the state and plan participants;

(b) Before entering into any contract authorized by subsection (a) of this section, said board shall invite competitive bids from all qualified insurers who may wish to offer plans for the health insurance coverage or the administrative services desired. The board shall award such contract on a competitive basis as determined by the benefits afforded, the costs to be incurred by both employee and employer, the experience of the offering company or agency in the group health insurance field and its facilities for the handling of claims. In evaluating these factors the board may employ the services of impartial professional insurance analysts or actuaries. The board shall reevaluate the contract yearly, and renegotiate on a competitive basis at least every three years.

(c) The board may authorize the carrier with whom the primary contracts are executed to reinsure portions of such contract with other such carriers which elect to be a reinsurer and who are legally qualified to enter into reinsurance agreement under the laws of this state;

(d) Each employee or retired employee who is covered by the plan provided pursuant to this chapter shall receive evidence of such coverage. In addition, each employee or retired employee shall receive upon request information setting forth the benefits to which the employee or retired employee and his dependents are entitled, to whom such benefits shall be payable, to whom claims shall be submitted, and a summary of the provisions of the plan as they affect the employee and his dependents;

(e) The plan shall require adequate notice in writing to any participant whose claim for benefits under the plan has been denied, setting forth the specific reasons for such denial and shall afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the claims administrator upon the written request of the participant, within 60 days of the date of denial, setting forth the specific reasons for review. The claims administrator shall provide in writing, within 60 days of the request for review, a final determination of the claim provided that an extension of 60 days may be obtained upon written notification to the participant. Review of a final decision by the claims administrator shall be by the Circuit Court of Montgomery County as provided for the review of contested cases under the Alabama Administrative Procedure Act, Section 41-22-20;

(f) The board may at the end of any contract period discontinue any contract or contracts it has executed with any carrier and replace same with a contract or contracts with any other carrier or carriers meeting the requirements of this chapter.

(Acts 1983, No. 83-455, p. 640, §7.)