The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)



STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL


Opinion No. 6664

October 31, 1990

ESCHEATS:

Distribution of funds escheated under the Nonprofit Health Care Corporation Act to the Senior Care Respite Fund

NONPROFIT HEALTH CARE CORPORATION ACT:

Distribution of escheated funds to the Senior Care Respite Fund

SENIOR CARE RESPITE FUND:

Distribution of funds escheated under the Nonprofit Health Care Corporation Reform Act

Unclaimed benefits paid by Blue Cross and Blue Shield of Michigan are subject, upon escheat, to distribution to the Senior Care Respite Fund, irrespective of whether those payments were made pursuant to an administrative services contract.

Honorable Justine Barns

State Representative

The Capitol

Lansing, Michigan 48909

You have requested my opinion regarding the escheat of funds pursuant to Public Acts 171, 172 and 173 of 1990. These laws created the Senior Care Respite Fund, MCL 400.589a; MSA 2.638(59a), and amended the Michigan Code of Escheats, MCL 567.11 et seq; MSA 26.1053(1) et seq, and the Nonprofit Health Care Corporation Reform Act, MCL 550.1101, et seq; MSA 24.660(101) et seq, to provide a source of revenue for the Fund.

As amended, section 52(2) of the Michigan Code of Escheats, MCL 567.62(2); MSA 26.1053(52)(2), provides:

"The department of treasury shall transfer property that descends to the state of Michigan as an escheat pursuant to section 403a of the nonprofit health care corporation reform act, Act No. 350 of the Public Acts of 1980, being section 550.1403a of the Michigan Compiled Laws, as follows:

(a) 10% to the general fund to be held for the benefit of persons entitled to redemption.

(b) 90% to the senior care respite fund created in the older Michiganians act, Act No. 180 of the Public Acts of 1981, being sections 400.581 to 400.594 of the Michigan Compiled Laws."

In turn, Section 403a of the Nonprofit Health Care Corporation Reform Act, MCL 550.1403a; MSA 24.660(403a), states:

"Benefits paid by a health care corporation to a subscriber or provider by way of a check or other similar written instrument for the transmission or payment of money, that is not cashed within the period of dormancy as defined in section 5 of the Michigan code of escheats, Act No. 329 of the Public Acts of 1947, being section 567.15 of the Michigan Compiled Laws, shall escheat to the state pursuant to Act No. 329 of the Public Acts of 1947, being sections 567.11 to 567.76 of the Michigan Compiled Laws."

Specifically, you raise the question whether benefits paid by Blue Cross and Blue Shield of Michigan are subject on escheat to the 90% distribution to the Senior Care Respite Fund if the benefits are paid pursuant to an administrative services contract. An administrative services contract is one in which Blue Cross and Blue Shield of Michigan administer another organization's health care plan.

Section 403a of the Nonprofit Health Care Corporation Reform Act applies by its terms, to all "[b]enefits paid by a health care corporation ... not cashed within the period of dormancy...." Section 105(1) of the Act, MCL 550.1105(1); MSA 24.660(105)(1), defines the term "health care benefit" as well in that Act:

" 'Health care benefit' means the right under a certificate to have payment made by a health care corporation for a specified health care service, regardless of whether or not the payment is made pursuant to an administrative services only or cost-plus arrangement." (Emphasis added.)

Similarly, "certificate" is defined in the same statute as:

"[A] contract between a health care corporation and a subscriber or a group of subscribers under which health care benefits are provided to members, including a contract containing an administrative services only or cost-plus arrangement. A certificate includes any approved riders amending the contract." MCL 550.1104(3); MSA 24.660(104)(3). (Emphasis added.)

Thus, it is clear that payments made by Blue Cross and Blue Shield of Michigan for health care benefits, regardless of whether those payments are made pursuant to an administrative services contract, are subject to the requirements of MCL 567.62(2); MSA 26.1053(52)(2), so that 90% of escheated monies are payable to the Senior Care Respite Fund.

It is my opinion, therefore, that unclaimed benefits paid by Blue Cross and Blue Shield of Michigan are subject, upon escheat, to the 90% distribution to the Senior Care Respite Fund, irrespective of whether those payments were made pursuant to an administrative services contract.

Frank J. Kelley

Attorney General