§ 27-74-11. Marketing restrictions and disclosure requirements.
(a) All advertisements, marketing materials, brochures, discount medical plan cards, and
any other communications of a discount medical plan organization provided to prospective
members and members shall be truthful and not misleading in fact or in implication.
An advertisement, any marketing material, brochure, discount medical plan card, or
other communication is misleading in fact or in implication if it has a capacity or
tendency to mislead or deceive based on the overall impression that it is reasonably
expected to create within the segment of the public to which it is directed.
(b) A discount medical plan organization shall not:
(1) Except as otherwise provided in this chapter or as a disclaimer of any relationship
between discount medical plan benefits and insurance, or as a description of an insurance
product connected with a discount medical plan, use in its advertisements, marketing
material, brochures, and discount medical plan cards the term "insurance�;
(2) Except as otherwise provided in state law, describe or characterize the discount medical
plan as being insurance whenever a discount medical plan is bundled with an insured
product and the insurance benefits are incidental to the discount medical plan benefits;
(3) Use in its advertisements, marketing material, brochures, and discount medical plan
cards the terms "health plan,� "coverage,� "copay,� "copayments,� "deductible,� "preexisting
conditions,� "guaranteed issue,� "premium,� "PPO,� "preferred provider organization,�
or other terms in a manner that could reasonably mislead an individual into believing
that the discount medical plan is health insurance;
(4) Use language in its advertisements, marketing material, brochures, and discount medical
plan cards with respect to being "registered� by the health insurance commissioner
in a manner that could reasonably mislead an individual into believing that the discount
medical plan is insurance or has been endorsed by the state;
(5) Make misleading, deceptive, or fraudulent representations regarding the discount or
range of discounts offered by the discount medical plan card or the access to any
range of discounts offered by the discount medical plan card;
(6) Have restrictions on access to discount medical plan providers, including, except
for hospital services, waiting periods and notification periods; or
(7) Pay providers any fees for medical or ancillary services or collect or accept money
from a member to pay a provider for medical or ancillary services provided under the
discount medical plan, unless the discount medical plan organization has an active
certificate of authority to act as a third-party administrator in accordance with
chapter 20.7 of this title.
(c) Each discount medical plan organization shall make the following general disclosures:
(1) In writing in not less than twelve-point font and in a manner that is clear and conspicuous
and achieves a grade level score of no higher than eighth (8th) grade on the Flesch-Kincaid
readability test;
(2) On the first content page of any advertisements, marketing materials, or brochures
made available to the public relating to a discount medical plan; and
(3) Along with any enrollment forms given to a prospective member:
(i) That the plan is a discount plan and is not insurance coverage;
(ii) That the range of discounts for medical or ancillary services provided under the plan
will vary depending on the type of provider and medical or ancillary service received;
(iii) Unless the discount medical plan organization has an active certificate of authority
to act as a third-party administrator, that the plan does not make payments to providers
for the medical or ancillary services received under the discount medical plan;
(iv) That the plan member is obligated to pay for all medical or ancillary services, but
will receive a discount from those providers that have contracted with the discount
medical plan organization; and
(v) The toll-free telephone number and internet website address for the registered discount
medical plan organization for prospective members and members to obtain additional
information about and assistance on the discount medical plan and up-to-date lists
of providers participating in the discount medical plan.
(d) If the initial contact with a prospective member is by telephone, the disclosures
required under subsection (c) shall be made orally and shall be included in the initial
written materials that describe the benefits under the discount medical plan provided
to the prospective or new member.
(e) In addition to the general disclosures required under this section, each discount
medical plan organization shall provide to:
(1) Each prospective member, at the time of enrollment, information in writing in not
less than twelve-point (12) font and in a manner that is clear and conspicuous and
achieves a grade level score of no higher than eighth (8th) grade on the Flesch-Kincaid
readability test that describes the terms and conditions of the discount medical plan,
including any limitations or restrictions on the refund of any processing fees or
periodic charges associated with the discount medical plan;
(2) Each new member a document in writing in not less than twelve-point (12) font and
written in a manner that is clear and conspicuous and achieves a grade level score
of no higher than eighth (8th) grade on the Flesch-Kincaid readability test that contains
the terms and conditions of the discount medical plan and includes information on:
(i) The name of the member;
(ii) The benefits to be provided under the discount medical plan;
(iii) Any processing fees and periodic charges associated with the discount medical plan,
including any limitations or restrictions on the refund of any processing fees and
periodic charges;
(iv) The mode of payment of any processing fees and periodic charges, such as monthly,
quarterly, etc., and procedures for changing the mode of payment;
(v) Any limitations, exclusions, or exceptions regarding the receipt of discount medical
plan benefits;
(vi) Any waiting periods for certain medical or ancillary services under the discount medical
plan;
(vii) Procedures for obtaining discounts under the discount medical plan, such as requiring
members to contact the discount medical plan organization to make an appointment with
a provider on the member's behalf;
(viii) Cancellation procedures, including information on the member's thirty-day (30) cancellation
rights and refund requirements and procedures for obtaining refunds;
(ix) Renewal, termination, and cancellation terms and conditions;
(x) Procedures for adding new members to a family discount medical plan, if applicable;
(xi) Procedures for filing complaints under the discount medical plan organization's complaint
system and information that, if the member remains dissatisfied after completing the
organization's complaint system, the plan member may contact his or her local state
insurance department; and
(xii) The name and mailing address of the registered discount medical plan organization
or other entity where the member can make inquiries about the plan, send cancellation
notices, and file complaints.