TITLE 27
Insurance

CHAPTER 27-41
Health Maintenance Organizations

SECTION 27-41-27


§ 27-41-27 Offer of health maintenance organization alternative to employees.

(a)(1) In accordance with regulations promulgated by the director of the department of business regulation: (i) each employer which during any calendar quarter employed an average number of employees of not less than twenty-five (25), and (ii) the state and each political subdivision of the state which during any calendar quarter employed an average number of employees of not less than twenty-five (25), shall include in any benefits plan, offered to their employees in the calendar year beginning after that calendar quarter, the option of membership in licensed health maintenance organizations (HMOs) which are qualified under the provisions of § 42-62-9 and which are engaged in the provision of basic health services in health maintenance organization (HMO) service areas in which at least twenty-five (25) of those employees reside;

(2) If any of the employees of an employer or the state or political subdivision of the state described in subdivision (1) of this subsection are represented by a collective bargaining representative or other employee representative designated or selected under the law, the offer of a membership in a licensed health maintenance organization (HMO), required by subdivision (1) of this subsection to be made in a health benefits plan offered to those employees:

(i) Shall be first made to that collective bargaining representative or other employee representative; and

(ii) If that offer is accepted by that representative, it shall then be made to each employee.

(b) If there is more than one licensed and qualified health maintenance organization which is engaged in the provision of health services in the area in which the employees of an employer reside and if: (1) one or more of those organizations provides health services through professionals who are employed members of the staff of the organization or through an organized medical group or groups on a contractual basis; and

(2) one or more of those organizations provides those services through an individual practice association or associations; then of the licensed and qualified health maintenance organizations included in a health benefits plan of that employer pursuant to subsection (a) of this section at least one shall be an organization which provides health services as described in subdivision (1) of this subsection and at least one shall be an organization which provides health services as described in subdivision (2) of this subsection.

(c) An employer shall offer the option of membership in additional licensed and qualified health maintenance organizations if the additional licensed and qualified health maintenance organizations demonstrate that their service areas include the residence areas of employees:

(1) Who do not reside in the service area of licensed health maintenance organizations already included in the employer's health benefits plans; or

(2) To whom membership in licensed and qualified health maintenance organizations already included in the health benefits plans is not available because those organizations have closed their enrollment of eligible employees of that employer.

(d) An employer is not required to include in the health benefits plan offered to eligible employees the option of membership in the specific licensed and qualified health maintenance organization which initiated the request for inclusion in the health benefits plan; provided, that the employer selects, in a manner consistent with this section, one or more other licensed and qualified health maintenance organizations that may not have made a request but are willing to be included; provided, that these latter health maintenance organizations are of the same type, i.e., the type described in subdivision (b)(1) of this section or the type described in subdivision (b)(2) of this section, and serve, or will serve at a minimum, the same area in which the employer's or public entity's employees reside individually or collectively as the health maintenance organization which submitted the timely request.

(e) No employer shall be required to pay more for health benefits as a result of the application of this section than would otherwise be required by any prevailing collective bargaining agreement or legally enforceable contract for the provision of health benefits between the employer and its employees; provided, that the annual per employee absolute dollar contribution by the employer for any alternative health maintenance organization coverage shall in no event be required by this section to exceed the employer's per employee absolute dollar contribution to any other health benefits plan offered by the employer. Each employer which provides payroll deductions as a means of paying employees' contributions for health benefits or which provides a health benefits plan, and which is required by subsection (a) to offer his or her employees the option of membership in a licensed and qualified health maintenance organization (HMO), shall, with the consent of an employee who exercises that option, arrange for the employee's contribution for that membership to be paid through payroll deductions.

History of Section.
(P.L. 1983, ch. 225, § 2; P.L. 1985, ch. 406, § 1.)