17B:32B-9 Assessment of member organizations.

9. a. For the purpose of providing the funds necessary to carry out the powers and duties of the association, the board of directors shall assess the member organizations an aggregate amount not to exceed $50,000,000, to be payable in installments, in a manner determined by the commissioner, and after notification to the board, over a period not to exceed three years, in amounts as may be sufficient to meet the periodic disbursements of the association as provided for in subsection b. of this section; provided, however, that the amount of the assessment for the twelve calendar months following the effective date of this act shall not be more than one-third of the aggregate assessment required to be paid pursuant to this subsection. Assessments shall be due not less than 30 days after prior written notice to the member organizations and shall accrue interest on and after the due date at the percentage of interest prescribed in the Rules Governing the Courts of the State of New Jersey for judgments, awards and orders for the payment of money.

b. Fund moneys as set forth in subsection b. of section 6 of this act shall be deposited in an account in the name of the fund in the State of New Jersey Cash Management Fund established pursuant to section 1 of P.L.1977, c.281 (C.52:18A-90.4) and shall be disbursed by the State Treasurer from time to time as needed to pay eligible claims of the insolvent organizations, upon request of the commissioner, after notification to the commissioner by the board of the amount of the disbursement needed by the association to carry out its functions under this act. The funds so disbursed from the State of New Jersey Cash Management Fund shall be deposited in an account or accounts which are in the name of, and shall remain in the custody of, the association, and which account or accounts may be drawn upon as needed by a person designated to disburse funds of the association to covered individuals and providers to pay the eligible claims of the insolvent organizations. Accounts shall be maintained in accordance with the "Governmental Unit Deposit Protection Act," P.L.1970, c.236 (C.17:9-41 et seq.). Disbursements shall be made in the name of the association by a person authorized to disburse association funds to pay eligible claims, which disbursements shall be made in accordance with the plan of operation. The commissioner may direct the association to make an interim partial payment or payments on a pro rata basis to eligible providers or covered individuals of a portion of the aggregate eligible claims payable pursuant to this act, pending any future claims audit or other verification of the eligibility of a claim. The person authorized to disburse association funds to providers shall, in the case of such partial payment, notify the provider that the claim may be subject to retrospective verification or audit and all or part of the disbursement may be reclaimed as a result of the findings. The commissioner may also direct the association to make payment, interim or otherwise, for loss adjustment expenses, including claims adjudication.

c. Assessments against member organizations shall be made in the proportion that the net written premiums received on health maintenance organization business in this State by each assessed member organization for the most recent calendar year for which premium information is available preceding the year in which the assessment is made bears to such premiums received on total health maintenance organization business in this State for that calendar year by all assessed member organizations. The net written premium paid to enroll Medicaid recipients in a Medicaid-contracting health maintenance organization, New Jersey Kid Care and similar State-sponsored programs, and Medicare Plus Choice plans shall not be used to calculate any assessment under this subsection.

d. The amount of each member organization's assessment necessary to meet the requirements of the association with respect to the insolvent organizations under this act shall be determined annually as necessary to implement the purposes of this act, and shall be payable in accordance with subsection a. of this section. Computations of assessments under this section shall be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible.

e. The association shall exempt, abate or defer, in whole or in part, the assessment of a member organization if, in the opinion of the commissioner, payment of the assessment would endanger the ability of the member organization to fulfill its contractual obligations or place the member organization in an unsafe or unsound financial condition. If an assessment against a member organization is exempted, abated or deferred, in whole or in part, the amount by which that assessment is exempted, abated or deferred shall be assessed against the other member organizations in a manner consistent with the basis for assessments set forth in subsection c. of this section.

f. The board may provide in the plan of operation for a method of allocating funds among claims, whether relating to one or more insolvent organizations, when the funds available under this act as provided in subsection b. of section 6 of this act will be insufficient to cover anticipated eligible claims. If payment of an eligible claim or portion of a claim is delayed due to the insufficiency of funds available, the association shall not be required to pay, and shall have no liability to, any person for any interest or late charge for the period that the payment of that claim is delayed.

g. The board may, by an equitable method established in the plan of operation, refund to member organizations and the State in proportion to the contribution of each organization, the amount by which the assets of the fund exceed the amount the board, in accordance with subsection e. of section 10 of this act, with the concurrence of the commissioner, finds necessary to carry out the obligations of the association, including assets accruing from assignment, subrogation, net realized gains and income from investments.

h. In determining its schedule of charges or rates filed with the commissioner pursuant to subsection b. of section 8 of P.L.1973, c.337 (C.26:2J-8), or filed in accordance with any other law requiring such filing, no member organization shall include the amount paid or to be paid as assessments under this act, or any portion of that amount, unless the commissioner specifically determines after a separate filing by a member that exclusion of those assessments in determining its schedule of charges or rates will significantly and adversely affect the organization. Each member organization shall annually file a certification to the commissioner that demonstrates compliance with this subsection.

i. The association shall issue to each organization paying an assessment pursuant to this act a certificate of contribution, in a form and manner prescribed by the commissioner, for the amount of the assessment so paid. All outstanding certificates shall be of equal dignity and priority without reference to amount or date of issue. A certificate of contribution may be shown by the organization in its financial statement as an asset in that form and manner and for the amount and period of time as the commissioner may approve.

L.2000,c.12,s.9.