Alabama § 16-25A-7 - Authorization and Execution of Contracts; Evidence of Coverage; Denial of Claims.

§ 16-25A-7. Authorization and Execution of Contracts; Evidence of Coverage; Denial of Claims.

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

(b)(1) Before entering into any contract or contracts authorized by subsection (a), the board shall invite competitive bids from all qualified entities who may wish to administer or offer plans for the health insurance coverage or the administrative services desired. The board shall award the contract or contracts on a competitive basis as determined by the benefits afforded, administrative costs, the costs to be incurred by employee, retiree, 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.

(2) The board shall reevaluate the contract or contracts yearly, and renegotiate all contracts, except for contracts for Medicare retiree health care, on a competitive basis at least every three years. Contracts for Medicare retiree health care shall be renegotiated on a competitive basis at least every five years.

(c) The board may authorize the carrier with whom the primary contracts are executed to reinsure portions of the contract with other 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 article shall receive evidence of the 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 or her dependents are entitled, to whom the 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 or her 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 the 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 after the date of denial, setting forth the specific reasons for review. The claims administrator shall provide in writing, within 60 days after 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, at the end of any contract period, may discontinue any contract or contracts the board has executed with any carrier and replace same with a contract or contracts with any other carrier or carriers meeting the requirements of this article.

(g) The Public Education Employees’ Health Insurance Board may enter into contracts of the State Employees’ Insurance Board which were awarded through a competitive bid process, upon the mutual consent of the State Employees’ Insurance Board and the contractor.