§ 26-34-116 — Enrollment period, replacement coverage in the event of insolvency

(a) In the event of an insolvency of a health maintenance
organization, upon order of the commissioner 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 coverages 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 commissioner determines that the other health benefit plan
lacks 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, the commissioner shall allocate equitably the
insolvent health maintenance organization's group contracts for
those 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. Each health maintenance organization to which a
group is so allocated shall offer the group the health
maintenance organization's existing coverage which is most
similar to the group's coverage with the insolvent health
maintenance organization at rates determined in accordance with
the successor health maintenance organization's existing rating
methodology.
(c) The commissioner shall equitably allocate the
insolvent health maintenance organization's nongroup enrollees
who 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. Each health maintenance
organization to which nongroup enrollees are allocated shall
offer the nongroup enrollees the health maintenance
organization's existing coverage for individual or conversion
coverage as determined by the enrollee's type of coverage in the
insolvent health maintenance organization at rates determined in
accordance with the successor health maintenance organization's
existing rating methodology. Successor health maintenance
organizations which do not offer direct nongroup enrollment may
aggregate all of the allocated nongroup enrollees into one (1)
group for rating and coverage purposes.
(d) Any carrier providing replacement coverage with
respect to group hospital, medical or surgical expense or
service benefits within a period of sixty (60) days from the
date of discontinuance of a prior health maintenance
organization contract or policy providing the hospital, medical
or surgical expense or service benefits shall immediately cover
all enrollees who were validly covered under the previous health
maintenance organization contract or policy at the date of
discontinuance and who would otherwise be eligible for coverage
under the succeeding carrier's contract, regardless of any
provisions of the contract relating to active employment or
hospital confinement or pregnancy.
(e) Except to the extent benefits for the condition would
have been reduced or excluded under the prior carrier's contract
or policy, no provision in a succeeding carrier's contract of
replacement coverage which would operate to reduce or exclude
benefits on the basis that the condition giving rise to benefits
preexisted the effective date of the succeeding carrier's
contract shall be applied with respect to those enrollees
validly covered under the prior carrier's contract or policy on
the date of discontinuance.