§ 36-6915. Insolvency - Replacement coverage - Reduction or exclusion of benefits.

A.  1.  In the event of an insolvency of a commercial health maintenance organization, upon order of the Insurance Commissioner, all other carriers that participated in the enrollment process with the insolvent health maintenance organization at a group’s last regular enrollment period shall offer the group’s enrollees of the insolvent health maintenance organization a thirty-day enrollment period commencing upon the date of insolvency.  Each carrier shall offer the enrollees of the insolvent health maintenance organization the same coverages and rates offered to the enrollees of the group at its last regular enrollment period.

2.  If no other carrier had been offered to some groups enrolled in the insolvent health maintenance organization, or if the Insurance Commissioner determines that the other health benefit plans lack sufficient health care delivery resources to ensure that health care services will be available and accessible to all of the group enrollees of the insolvent health maintenance organization, the Insurance Commissioner shall equitably allocate the insolvent health maintenance organization’s group contracts for these groups among all health maintenance organizations that operate within a portion of the insolvent health maintenance organization’s service area, taking into consideration the health care delivery resources of each health maintenance organization.  Each health maintenance organization to which a group or groups are so allocated shall offer the group or groups the health maintenance organization’s existing coverage that is most similar to each group’s coverage with the insolvent health maintenance organization, at rates determined in accordance with the successor health maintenance organization’s existing rating methodology.

B.  1.  “Discontinuance” means the termination of the contract between the group contract holder and a health maintenance organization due to the insolvency of the health maintenance organization, and does not refer to the termination of any agreement between any individual enrollee and the health maintenance organization.

2.  Any carrier providing replacement coverage with respect to group hospital, medical or surgical expense or service benefits within a period of sixty-three (63) days from the date of discontinuance of a prior health maintenance organization contract or policy providing hospital, medical or surgical expense or service benefits shall, as of the effective date of the replacement coverage, cover all enrollees who were validly covered under the previous health maintenance organization contract or policy at the date of discontinuance and who would otherwise be eligible for coverage under the succeeding carrier’s contract, regardless of any provisions of the contract relating to active employment, hospital confinement or pregnancy.

3.  Except to the extent benefits for the condition would have been reduced or excluded under the prior carrier’s contract or policy, no provision in a succeeding carrier’s contract of replacement coverage that would operate to reduce or exclude benefits on the basis that the condition giving rise to benefits preexisted the effective date of the succeeding carrier’s contract shall be applied with respect to those enrollees validly covered under the prior carrier’s contract or policy on the date of discontinuance.

4.a.              Upon being declared insolvent, a health maintenance organization shall provide to the Insurance Commissioner:

(1)              the names of all known enrollees who were validly enrolled under the insolvent HMO’s contract, or

(2)              policy information on validly enrolled enrollees who are hospitalized or whose health conditions require continuity of care.

b.              The insolvent HMO shall continue to provide such information to the Insurance Commissioner throughout the period of time required to provide replacement coverage to the validly covered enrollees of the insolvent HMO.

Added by Laws 2003, c. 197, § 15, eff. Nov. 1, 2003.