University Health University Health Alliance has filed with the state Insurance Division a crucial plan that the division will use to determine whether the financially strapped health insurer can remain in business.
Alliance files
rehab plan
Fate of troubled insurer rests
with state Insurance DivisionBy Lyn Danninger
ldanninger@starbulletin.comNeither UHA officials nor state Insurance Commissioner Wayne Metcalf will discuss details of the company's plan for rehabilitation.
Under a previous agreement reached with the state, UHA was placed under state supervision and given until June 30 to come up with a plan to restore its financial health.
Any financial transactions now conducted by the company require approval from the Insurance Division. If given the go-ahead to remain in business, it's likely some form of state oversight would continue. The division could seek to either rehabilitate the company or liquidate it.
Problems for UHA began last year when the company failed to meet state-required minimum cash reserves.
In its December 2000 filing with the division, the company reported it was $1.23 million below the minimum required by law. For the quarter ended March 31 this year, that amount had dropped to around $740,000.
Although UHA improved its financial picture from December to March, because it was still behind in its reserves, it entered into a supervisory agreement with the Insurance Division.
Metcalf gave the company until June 30 to file a plan with the division showing how it would comply with the state's minimum reserve requirement.
Thursday, two days before the plan was due to be filed, UHA Executive Vice President and Chief Operating Officer Frank Appel said the company was continuing to refine its plan but was optimistic it would be allowed to remain in business. Appel has not returned telephone calls this week.
UHA is a nonprofit mutual benefit society that provides health insurance for around 29,000 members.
From the last quarter of 2000 through the first quarter of 2001, UHA picked up 14,000 members when Queen's Health Plans decided to exit the insurance business.