Requirement to renew coverage at option of individual; exceptions; discontinuation of form of product of health benefit plan; discontinuation of health benefit plan available through bona fide association.
1. Except as otherwise provided in this section, coverage under an individual health benefit plan must be renewed by the individual carrier that issued the plan, at the option of the individual, unless:
(a) The individual has failed to pay premiums or contributions in accordance with the terms of the health benefit plan or the individual carrier has not received timely premium payments.
(b) The individual has performed an act or a practice that constitutes fraud or has made an intentional misrepresentation of material fact under the terms of the coverage.
(c) The individual carrier decides to discontinue offering and renewing all health benefit plans delivered or issued for delivery in this state. If the individual carrier decides to discontinue offering and renewing such plans, the individual carrier shall:
(1) Provide notice of its intention to the Commissioner and the chief regulatory officer for insurance in each state in which the individual carrier is licensed to transact insurance at least 60 days before the date on which notice of cancellation or nonrenewal is delivered or mailed to the persons covered by the insurance to be discontinued pursuant to subparagraph (2).
(2) Provide notice of its intention to all persons covered by the discontinued insurance and to the Commissioner and the chief regulatory officer for insurance in each state in which such a person is known to reside. The notice must be made at least 180 days before the nonrenewal of any health benefit plan by the individual carrier.
(3) Discontinue all health insurance issued or delivered for issuance for individuals in this state and not renew coverage under any health benefit plan issued to such individuals.
(d) The Commissioner finds that the continuation of the coverage in this state by the individual carrier would not be in the best interests of the policyholders or certificate holders of the individual carrier or would impair the ability of the individual carrier to meet its contractual obligations. If the Commissioner makes such a finding, the Commissioner shall assist the persons covered by the discontinued insurance in this state in finding replacement coverage.
2. An individual carrier may discontinue the issuance and renewal of a form of a product of a health benefit plan if the Commissioner finds that the form of the product offered by the individual carrier is obsolete and is being replaced with comparable coverage. A form of a product of a health benefit plan may be discontinued by the individual carrier pursuant to this subsection only if:
(a) The individual carrier notifies the Commissioner and the chief regulatory officer for insurance in each state in which it is licensed of its decision pursuant to this subsection to discontinue the issuance and renewal of the form of the product at least 60 days before the individual carrier notifies the persons covered by the discontinued insurance pursuant to paragraph (b).
(b) The individual carrier notifies each person covered by the discontinued insurance, the Commissioner and the chief regulatory officer for insurance in each state in which a person covered by the discontinued insurance is known to reside of the decision of the individual carrier to discontinue offering the form of the product. The notice must be made to persons covered by the discontinued insurance at least 180 days before the date on which the individual carrier will discontinue offering the form of the product.
(c) The individual carrier offers to each person covered by the discontinued insurance the option to purchase any other health benefit plan currently offered by the individual carrier to individuals in this state.
(d) In exercising the option to discontinue the form of the product and in offering the option to purchase other coverage pursuant to paragraph (c), the individual carrier acts uniformly without regard to the claim experience of the persons covered by the discontinued insurance or any health status-related factor relating to those persons or beneficiaries covered by the discontinued form of the product or any persons or beneficiaries who may become eligible for such coverage.
3. An individual carrier may discontinue the issuance and renewal of a health benefit plan that is made available to individuals pursuant to this chapter only through a bona fide association if:
(a) The membership of the individual in the association was the basis for the provision of coverage;
(b) The membership of the individual in the association ceases; and
(c) The coverage is terminated pursuant to this subsection uniformly without regard to any health status-related factor relating to the covered individual.
4. An individual carrier that elects not to renew a health benefit plan pursuant to paragraph (c) of subsection 1 shall not write new business for individuals pursuant to this chapter for 5 years after the date on which notice is provided to the Commissioner pursuant to subparagraph (2) of paragraph (c) of subsection 1.
5. If an individual carrier does business in only one established geographic service area of this state, the provisions of this section apply only to the operations of the individual carrier in that service area.
Last modified: February 27, 2006