§ 10 — Group hospital service plan; approval or disapproval of contracts and rates; filing

Section 10. Any plan whereby such a corporation agrees with a group of two or more persons or with the employer, employers or representatives of a group of two or more persons to furnish hospital benefits and reimbursement for other health services to said persons alone or to their dependents also and where the enrollment in such group is on a basis precluding individual selection, shall be considered a group hospital service plan. The contracts and rates under such plan shall be subject to subsequent disapproval by the commissioner if he or she finds that the basis fails to preclude individual selection. It shall not be considered a group hospital service plan if less than twenty-five per cent of those eligible in a group of fifty or more or seventy-five per cent in a group of less than fifty agree to become subscribers; provided, that, for the purposes of computing the percentage participation under this paragraph, eligible persons in a group who are enrollees under a group health maintenance contract, as defined in section one of chapter one hundred and seventy-six G, shall be deemed to be subscribers under such a group hospital plan. If at any time the number enrolled as subscribers drops below the prescribed per cent of the total eligible members of that group the commissioner may require the corporation to cancel all contracts in that group without any liability for hospital admissions and reimbursement for other health services of any of the subscribers in that group after date of cancellation. Group contracts may be issued without written representation relative to physical condition. Group contracts shall be filed with the commissioner of insurance within thirty days after the effective date and shall be subject to his subsequent disapproval after notice and hearing if said contracts do not meet the requirements of this section. Notwithstanding the provisions of this section, group plan contracts issued and rates charged by a nonprofit hospital service corporation to its subscribers providing supplemental coverage to medicare shall be subject to the provisions of chapter one hundred and seventy-six K if the subscribers, and not their employer, employers or representatives, are billed directly for such contracts.The open enrollment period and coverage effective date for any group hospital service plan contract providing supplemental coverage to medicare shall be the same as the open enrollment period of all other group health plan options offered by the employer, representative or group sponsor to the group's members who are eligible for medicare supplemental coverage.[ Third paragraph effective until April 8, 2025. For text effective April 8, 2025, see below.]No such contracts shall be approved if the benefits provided therein are unreasonable in relation to the rate charged, nor if the rates are excessive, inadequate or unfairly discriminatory. Classifications shall be fair and reasonable. In determining whether any rate under this section shall be disapproved, the commissioner shall make a finding on the basis of information submitted by a nonprofit hospital service corporation, as to whether such corporation employs a utilization review program and other techniques acceptable to him which have had or are expected to have a demonstrated impact on the prevention of reimbursement by such corporation for services which are not medically necessary.[ Third paragraph as amended by 2024, 343, Sec. 75 effective April 8, 2025. For text effective until April 8, 2025, see above.]No such contracts shall be approved if the benefits provided therein are unreasonable in relation to the rate charged, nor if the rates are excessive, inadequate or unfairly discriminatory. For the purposes of the review of rates of payment under this section, whether a contract is not excessive shall include considerations of affordability for consumers and purchasers of health insurance products; provided, however, that such review shall adhere to principles of solvency and actuarial soundness. Classifications shall be fair and reasonable. In determining whether any rate under this section shall be disapproved, the commissioner shall make a finding on the basis of information submitted by a nonprofit hospital service corporation, as to whether such corporation employs a utilization review program and other techniques acceptable to him which have had or are expected to have a demonstrated impact on the prevention of reimbursement by such corporation for services which are not medically necessary.The commissioner may make and, at any time, alter or amend reasonable rules or regulations to facilitate the operation and enforcement of this section and to govern hearings and investigations thereunder. He may issue such orders as he finds proper, expedient or necessary to enforce and administer the provisions of this section and to secure compliance with any rules and regulations made thereunder.Nothing in this section shall be taken to prohibit as unreasonably or unfairly discriminatory the establishment of classifications or modifications of classifications or risks based upon size, expense, management, individual expense, purpose, location or dispersion of hazard or any other reasonable considerations, or to prohibit retrospective refunds, providing such classifications, modifications and provisions for refunds apply to all risks under the same or substantially similar circumstances or conditions.