HealthPlus of Michigan – An Overview

Key Facts:

• HealthPlus of Michigan is a licensed not-for-profit Health Maintenance Organization providing health care coverage to more than 200,000 members from Oakland County north through Bay County along the I-75 corridor. HealthPlus arranges for the delivery of health care through a variety of commercial products and government programs: Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Point of Service (POS), Medicare Advantage and Medicaid programs. HealthPlus Options and HealthPlus Insurance Company are wholly-owned subsidiaries of HealthPlus of Michigan. As a licensed third-party administrator, HealthPlus Options handles the processing of claims and administration of benefits for employers who choose to self-fund. HealthPlus Insurance Company provides insured PPO benefits to area employer groups.

• HealthPlus’ HMO network is comprised of more than 900 primary care physicians, 1,800 specialists and 29 hospitals, including nearly 625 ancillary providers such as nursing homes, mental health facilities, laboratories, durable medical equipment providers and ambulance services. For its PPO, HealthPlus provides medical services through direct contracts with numerous providers and partnership agreements with large regional and national networks to offer members access to more than 24,000 physicians state-wide and more than 1.6 million locations of care.

• HealthPlus also offers products for Medicaid and Medicare beneficiaries. HealthPlus Partners, a wholly-owned subsidiary of HealthPlus of Michigan, currently serves more than 61,000 Medicaid beneficiaries in Genesee, Saginaw, Lapeer, Shiawassee, Tuscola and Bay Counties. Our Medicare products cover approximately 14,000 members.

• HealthPlus is a third-party administrator for County Health Plans in Bay, Genesee and Saginaw Counties. Combined, these plans provide basic health care coverage to more than 32,000 individuals who are otherwise uninsured.

• All three of HealthPlus of Michigan’s product lines – Commercial, Medicare Advantage and Medicaid – received Excellent Accreditation status from the National Committee on Quality Assurance (NCQA) in 2006, demonstrating HealthPlus’ commitment to clinical and service quality. HealthPlus is one of the few HMOs in the country with this distinction.

• U.S. News and World Report and NCQA named HealthPlus of Michigan one of the top 50 health plans in the nation for the third consecutive year in 2007. The same organizations also named HealthPlus a top 25 Medicare plan and a top 25 Medicaid plan nationally.

• HealthPlus employs more than 400 employees in full- and part-time positions in three offices, located in Flint, Saginaw and Troy.

 Plan origins

• HealthPlus of Michigan (HPM) was originally incorporated as “Tri-County HMO” in 1977 and state-licensed on September 1, 1979. HPM was developed from the initial efforts of a broadly-based community task force to become the first Flint-area health maintenance organization (HMO). HPM was developed with the aid of federal grant funds used both for a feasibility study as well as the planning and initial development of the operational HMO.

• The name of the corporation was changed in January 1978 to Genesee Health Care, Inc., and on March 22, 1979, the Internal Revenue Service granted Genesee Health Care tax exempt status under Section 501(c)(4) of the Internal Revenue Code. Federal qualification as an HMO was granted on October 1, 1979, and a federal operating assistance loan to cover initial operating deficits was obtained.

• On October 15, 1979, Genesee Health Care began operation as a state-licensed, federally-qualified, health maintenance organization operating in Genesee, Lapeer, and Shiawassee counties and signed its first employer group on October 20 of that year. The addition of several counties to our service area in the early 1980s indicated that Genesee Health Care needed another name change, and in 1986, Genesee Health Care officially became HealthPlus of Michigan, Inc. In the mid-1980s, HealthPlus expanded northward into Saginaw and Bay counties. In 2006, HealthPlus widened its HMO area to include Oakland, Midland, Clare, Gladwin, Gratiot, Isabella Counties and portions of Sanilac County.

Commitment to Community

We owe our success to the people in the communities we serve. We believe it’s important to give back to the communities we serve and to do whatever we can to share our resources, including:

• volunteering in community initiatives and participating in a variety of efforts to improve the health and well-being of our neighbors.
• investing in our communities through corporate sponsorships, underwriting health-related events and making grants.

Current Corporate Structure

HealthPlus provides products to purchasers and services to members through three certified licensed entities. HealthPlus owns three subsidiaries.

HealthPlus of Michigan, Inc.

HealthPlus of Michigan, Inc. is a Michigan-based, non-profit corporation. As such, it is regulated pursuant to the Nonprofit Business Corporation Act of 1982. HealthPlus of Michigan’s corporate functioning must then conform to the requirements of the Nonprofit Business Corporation Act in order to maintain its proper corporate status and for the corporation to be recognized as a separate legal entity.

HealthPlus of Michigan is also a membership-based corporation. While most corporations are stock-based and shareholders (or stockholders) have both an economic and voting interest in the corporation, HealthPlus of Michigan has only members - as established by contract status. The contract holders have no economic interest in the organization, but do have voting interests recognized principally through the election of the Board of Directors. In addition, significant corporate actions also require the voting of the membership. Currently, Commercial and Medicare products are administered through HealthPlus of Michigan.

For Internal Revenue Services purposes, HealthPlus of Michigan is a tax-exempt corporation. Its tax exemption is as a social welfare organization pursuant to 501(c)(4) of the Internal Revenue Code. This classification makes HealthPlus of Michigan exempt from income and certain other taxes. HealthPlus, however, is not a charitable or benevolent organization, and has not enjoyed the benefit of having contributors being able to take a charitable tax contribution. As a tax exempt corporation pursuant to Section 501(c)(4), HealthPlus is nonetheless prohibited from engaging in many types of conduct, most notably allowing surplus or profit to inure to any individual or undertaking any political venture.

The main regulatory arm of the federal government providing oversight to HealthPlus is the Centers for Medicaid Services (CMS). In that regard, HealthPlus also has been granted a contract through CMS to provide health care coverage to Medicare beneficiaries. The contract is called a “Medicare+Choice” contract, and the HealthPlus program is called “HealthPlus Senior."

HealthPlus of Michigan is also a state-certified HMO. Certification takes place pursuant to a specific chapter of the Michigan Insurance Code. Regulatory oversight is provided by the Office of Financial and Insurance Services (OFIS). In order to conduct its core business, HealthPlus must stay in compliance with the pertinent provisions of the Insurance Code and any regulations or directives issued by OFIS.

HealthPlus also maintains private accreditation. The National Committee for Quality Assurance (NCQA) reviews health organizations on areas of clinical quality. Organizations are assessed based upon NCQA’s rigorous standards within six areas: quality improvement, utilization management, provider credentialing, member rights & responsibilities, medical records, and preventive health. Health plans choose to participate in the review process, and since 1992, HealthPlus has undergone four reviews. In May of 1997 HealthPlus was granted Full Accreditation, the highest rating available to a health organization. Our most recent NCQA accreditation review in late 2001 resulted in HealthPlus receiving Full Accreditation in the Commercial product line for a third time, and also Full Accreditation for the Medicaid and Medicare product lines.