Indiana Discount Medical Program Organization Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain an Indiana Discount Medical Program Organization bond

At a Glance:

• Lowest Cost: $350 per year or $35 per month, based on the applicant’s credit
• Bond Amount: $35,000
• Who Needs it: All discount medical program organizations operating in Indiana
• Purpose: To ensure the public will receive compensation for financial harm if the discount medical program organization violates registration law
• Who Regulates Medical Discount Program Organizations in Indiana: The Indiana Department of Insurance

Background

Indiana code 27-17-2-1 requires all discount medical program organizations (DMPOs) operating in the state to register with the Department of Insurance. The Indiana legislature enacted the registration laws and regulations to ensure that DMPOs engage in ethical business practices. To provide financial security for the enforcement of the registration law, DMPOS must purchase and maintain a $35,000 surety bond to be eligible for registration.

What is the Purpose of the Indiana Discount Medical Program Organization Bond?

Indiana requires DMPOs to purchase a surety bond as part of the application process to obtain a business registration. The bond ensures that the public will receive compensation for financial harm if the DMPO fails to abide by the regulations set forth in Indiana code 27-17-9-2. Specifically, the bond protects consumers if the DMPO engages in any acts of fraud or breaches any contracts. In short, the bond is a type of insurance that protects the public if the DMPO violates registration law.

How Can an Insurance Agent Obtain an Indiana Medical Discount Organization Surety Bond?

BondExchange makes obtaining an Indiana Medical Discount Organization bond easy. Simply log in to your account and use our keyword search to find the “care facility” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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Is a Credit Check Required for the Indiana Discount Medical Program Organization Bond?

Surety companies will run a credit check on the owners of the DMPO to determine eligibility and pricing for the Indiana Discount Medical Program Organization bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the Indiana Discount Medical Program Organization Bond Cost?

The Indiana Discount Medical Program Organization Bond can cost anywhere between $350 to $2,625 per year or $35 to $263 per month. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the bond cost on the $35,000 bond requirement.

$35,000 Discount Medical Program Organization Bond Cost

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

How Does Indiana Define “Discount Medical Program Organization?”

To paraphrase Indiana code 27-17-1-6, a discount medical program organization is a business entity that negotiates and enters into provider agreements and grants cardholding members of their organization access to discounted medical services.

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

How Do Indiana Discount Medical Program Organizations Apply for a Registration?

DMPOS in Indiana must navigate several steps to obtain a registration. Below are the general guidelines, but applicants should refer to the application form for details on the process.

Registration Period – All Indiana DMPO Registrations expire annually on the last day of the month they were issued and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

DMPOs must purchase and maintain a $35,000 surety bond

Step 2 – Complete the Application

All Indiana DMPO Registration applications can be submitted online here or mailed to the following address:

Indiana Department of Insurance
Attn:  DMPO Review Coordinator
311 West Washington Street, Ste. 300
Indianapolis, Indiana 46204-2787

DMPOs must complete the application in its entirety and submit the following items:

• • DMPO checklist consisting of the following documents:
    • Certificate of Authorization
    • Company formation documents
    • Biographical affidavits for company executives and officers
    • Statement describing the business, facility, personnel, and a description of the discount services
    • Copy of the contract used between the DMPO and key individuals
    • Name and address of the agent for service of process
    • Full list of Indiana program providers including addresses and phone numbers
    • Description of the company’s marketing methods and distribution system
    • Statement certifying that the DMPO reviews and approves all marketing materials
    • Toll-free number cardholders can use at least 40 hours a week
    • Copy of the complaint procedures used for providers and cardholders
    • Copy of the cancellation and refund policy used by providers and cardholders
  • Copy of the company’s most recent annual financial report certified by a company officer
  • Marketing forms checklist with all sample marketing materials attached

DMPOs must pay the following fees when submitting their registration application:

• • $500 application fee
  • $35 filing fee for the marketing forms checklist

How do Indiana Discount Medical Program Organizations Renew Their Registration?

DMPOs can submit their completed renewal application, including a $250 renewal fee, online here or mail it to the following address:

Indiana Department of Insurance
Attn:  DMPO Review Coordinator
311 West Washington Street, Ste. 300
Indianapolis, Indiana 46204-2787

All Indiana DMPO Registrations expire annually on the last day of the month they were issued and must be renewed before the expiration date

What are the Insurance Requirements for Discount Medical Program Organizations in Indiana?

Indiana does not require DMPOs to obtain any form of liability insurance as a prerequisite to obtaining a business registration. DMPOs must purchase and maintain a $35,000 surety bond.

How Do Indiana Discount Medical Program Organizations File Their Bond?

DMPOS should mail their completed bond form, including the power of attorney, to the following address:

Indiana Department of Insurance
Attn:  DMPO Review Coordinator
311 West Washington Street, Ste. 300
Indianapolis, Indiana 46204-2787

The surety bond requires signatures from both the surety company that issues the bond and from a representative of the DMPO. The surety company should include the following information on the bond form:

• Legal name of entity/individual(s) buying the bond
• Surety company’s name
• Date the bond is signed

What Can Indiana Discount Medical Program Organizations Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, DMPOs in Indiana must follow all registration regulations in the state, including some of the most important issues below that tend to cause claims:

• Do not engage in any acts of fraud
• Do not breach and consumer contracts
• Ensure consumers do not suffer financial harm if the company becomes insolvent

What Other Insurance Products Can Agents Offer Discount Medical Program Organizations in Indiana?

Indiana does not require discount medical program organizations to obtain any form of liability insurance as a prerequisite to obtaining a business registration. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Indiana Discount Medical Program Organization Customers?

Indiana conveniently provides a public database to search for active discount medical program organizations in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.