§ 37-17-55 — Cancelation of membership; disclosures on initial contact; cancellation by customer.

(A) If the discount medical plan organization cancels a membership for any reason other than nonpayment of fees by the customer, the discount medical plan organization shall make prorated reimbursement of all periodic charges to the customer. (B) If the initial contact with the prospective customer is by telephone, disclosures must be made orally and included in the initial written materials that describe the benefits under the discount medical plan provided to the prospective or new customer and disclose that: (1) the plan is not insurance; (2) 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; (3) unless the discount medical plan organization has an active certificate of authority to act as a third party administrator, the plan does not make payments to providers for the medical or ancillary services received under the discount medical plan; (4) the customer is obligated to pay for all medical or ancillary services, but receives a discount from those providers that have contracted with the discount medical plan organization; and (5) there is a toll-free telephone number and Internet website address for the registered discount medical plan organization for prospective customers and customers 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, and that number and website address. (C) A discount medical plan issued for delivery in this State is returnable or cancelable, within thirty days of the date of delivery of the card or a longer period if provided in the purchase agreement, by the customer or user for any reason, and the customer must receive a full refund of all fees, except nominal fees associated with enrollment costs, that were part of the cost of the card. (1) A discount medical plan organization may not charge or collect a fee including a cancellation fee after a customer or user has given the organization notice of the customer's intention to return or cancel the plan. (2) A discount medical plan organization shall ensure that each customer or user receives with the card a notice stating the terms under which the discount medical plan may be returned or cancelled. A discount medical plan returned or cancelled in accordance with this section is void from the date of purchase.

Legislative History

HISTORY: 2006 Act No. 377, SECTION 1, eff January 1, 2007.