TITLE 27
Insurance

CHAPTER 27-41
Health Maintenance Organizations

SECTION 27-41-35


§ 27-41-35 Enrollment period in the event of insolvency.

(a) In the event of an insolvency of a health maintenance organization, upon order of the director, 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 (30) day enrollment period commencing upon the date of insolvency. Each carrier shall offer the enrollees of the insolvent health maintenance organization the same coverage and rates that it had offered to the enrollees of the group at its last regular enrollment period;

(b) If no other carrier had been offered to some groups enrolled in the insolvent health maintenance organization, or if the director determines that the other health benefit plan(s) lack(s) sufficient health care delivery resources to assure that health care services will be available and accessible to all of the group enrollees of the insolvent health maintenance organization, then the director shall allocate equitably the insolvent health maintenance organization's group contracts for the groups among all health maintenance organizations which 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. If the director determines that no health maintenance organization has sufficient resources to assure that health care services will be available and accessible to some groups enrolled in the insolvent health maintenance organization, then the director shall allocate equitably the insolvent health maintenance organization's contracts for the groups among the other carriers as he or she deems appropriate. Each health maintenance organization, or other carrier, to which a group or groups are so allocated shall offer the group or groups the health maintenance organization's or other carrier's existing coverage which 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 or other carrier's existing rating methodology;

(c) The director shall also allocate equitably the insolvent health maintenance organization's nongroup enrollees that are unable to obtain other coverage among all health maintenance organizations which 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. If the director determines that no health maintenance organization has sufficient resources to assure that health care services will be available and accessible to some nongroup enrollees of the insolvent health maintenance organization, then the director shall allocate equitably the insolvent health maintenance organization's contracts for the nongroup enrollees among the other carriers as he or she deems appropriate. Each health maintenance organization or other carrier to which nongroup enrollees are allocated shall offer the nongroup enrollees the health maintenance organization's or other carrier's existing coverage for individual or conversion coverage as determined by his or her type of coverage in the insolvent health maintenance organization at rates determined in accordance with the successor health maintenance organization's or other carrier's existing rating methodology. Successor health maintenance organizations or other carriers that do not offer direct nongroup enrollment may aggregate all of the allocated nongroup enrollees into one group for rating and coverage purposes.

History of Section.
(P.L. 1990, ch. 161, § 2.)