Health Maintenance Organizations

SECTION 27-41-75

§ 27-41-75. Prohibition on rescission of coverage.

(a)(1) Coverage under a health plan subject to the jurisdiction of the commissioner under this chapter with respect to an individual, including a group to which the individual belongs or family coverage in which the individual is included, shall not be rescinded after the individual is covered under the plan, unless:

(A) The individual or a person seeking coverage on behalf of the individual, performs an act, practice or omission that constitutes fraud; or

(B) The individual makes an intentional misrepresentation of material fact, as prohibited by the terms of the plan or coverage.

(2) For purposes of paragraph (1)(A), a person seeking coverage on behalf of an individual does not include an insurance producer or employee or authorized representative of the health maintenance organization.

(b) At least thirty (30) days advance written notice shall be provided to each plan enrollee or, for individual health insurance coverage, primary subscriber, who would be affected by the proposed rescission of coverage before coverage under the plan may be rescinded in accordance with subsection (a) regardless of, in the case of group health insurance coverage, whether the rescission applies to the entire group or only to an individual within the group.

(c) For purposes of this section, "to rescind" means to cancel or to discontinue coverage with retroactive effect for reasons unrelated to timely payment of required premiums or contribution to costs of coverage.

(d) This section applies to grandfathered health plans.

History of Section.
(P.L. 2012, ch. 256, § 10; P.L. 2012, ch. 262, § 10.)