A. Each health maintenance organization shall deposit and maintain acceptablesecurities with the State Treasurer in amounts prescribed by § 38.2-4310.1.The deposit shall be held as a special fund in trust, as a guarantee that theobligations to the enrollees who are residents of this Commonwealth will beperformed. The securities shall be deposited pursuant to a system ofbook-entry evidencing ownership interests of the securities with transfers ofownership interests effected on the records of a depository and itsparticipants pursuant to rules and procedures established by the depository.Upon a determination of insolvency or action by the Commission pursuant to §38.2-4317, the deposit shall be used to protect the interests of the healthmaintenance organization's enrollees and to assure continuation of coveredservices to enrollees. If a health maintenance organization is placed inreceivership, the deposit shall be an asset subject to the provisions ofChapter 15 (§ 38.2-1500 et seq.) of this title.
B. The Commission may require that each health maintenance organization havea plan for handling insolvency which allows for continuation of benefits forthe duration of the contract period for which premiums have been paid andcontinuation of benefits to members who are confined on the date ofinsolvency in an inpatient facility until their discharge or expiration ofbenefits. In considering such a plan, the Commission may require:
1. Insurance satisfactory in form and content to the Commission to cover theexpenses to be paid for continued benefits after an insolvency;
2. Provisions in provider contracts that obligate the provider to provideservices for the duration of the period after the health maintenanceorganization's insolvency for which premium payment has been made and untilthe enrollees' discharge from inpatient facilities;
3. Acceptable letters of credit; or
4. Any other arrangements to assure that benefits are continued as specifiedabove.
C. 1. In the event of an insolvency of a health maintenance organization, allother carriers that participated in the enrollment process with the insolventhealth maintenance organization at a group's last regular enrollment periodshall offer such group's enrollees of the insolvent health maintenanceorganization a thirty-day enrollment period commencing upon a date to beprescribed by the Commission. Each carrier shall offer such enrollees of theinsolvent health maintenance organization the same coverages and rates thenin effect for its enrollees in such group.
2. If no other carrier had been offered to some groups enrolled in theinsolvent health maintenance organization, or if the Commission determinesthat the other health benefit plan lacks sufficient health care deliveryresources to assure that health care services shall be available andaccessible to all of the group enrollees of the insolvent health maintenanceorganization, then the Commission may allocate equitably the insolvent healthmaintenance organization's group contracts for such groups among all healthmaintenance organizations which operate within a portion of the insolventhealth maintenance organization's service area, taking into consideration thehealth care delivery resources of each health maintenance organization. Eachhealth maintenance organization to which a group or groups are so allocatedshall offer such group or groups the health maintenance organization'sexisting coverage which is most similar to each group's coverage with theinsolvent health maintenance organization at rates determined in accordancewith the successor health maintenance organization's existing ratingmethodology.
3. The Commission may also allocate equitably the insolvent healthmaintenance organization's nongroup enrollees which are unable to obtainother coverage among all health maintenance organizations which operatewithin a portion of the insolvent health maintenance organization's servicearea, taking into consideration the health care delivery resources of eachsuch health maintenance organization. Each health maintenance organization towhich nongroup enrollees are allocated shall offer such nongroup enrolleesthe health maintenance organization's existing coverage for individual orconversion coverage as determined by his type of coverage in the insolventhealth maintenance organization at rates determined in accordance with thesuccessor health maintenance organization's existing rating methodology.Successor health maintenance organizations which do not offer direct nongroupenrollment may aggregate all of the allocated nongroup enrollees into onegroup for rating and coverage purposes.
D. 1. Any carrier providing replacement coverage with respect to grouphospital, medical or surgical expense or service benefits within a period ofsixty days from the date of discontinuance of a prior health maintenanceorganization contract or policy providing such hospital, medical or surgicalexpense or service benefits shall immediately cover all employees anddependents who were validly covered under the previous health maintenanceorganization contract or policy at the date of discontinuance and who wouldotherwise be eligible for coverage under the succeeding carrier's contract,regardless of any provisions of the contract relating to active employment orhospital confinement or pregnancy.
2. Except to the extent benefits for the condition would have been reduced orexcluded under the prior carrier's contract or policy, no provision in asucceeding carrier's contract of replacement coverage which would operate toreduce or exclude benefits on the basis that the condition giving rise tobenefits preexisted the effective date of the succeeding carrier's contractshall be applied with respect to those employees and dependents validlycovered under the prior carrier's contract or policy on the date ofdiscontinuance.
E. [Repealed.]
(1980, c. 720, § 38.1-874; 1986, c. 562; 1989, c. 216; 1990, c. 224; 1992,cc. 14, 20; 2000, c. 503.)
A. Each health maintenance organization shall deposit and maintain acceptablesecurities with the State Treasurer in amounts prescribed by § 38.2-4310.1.The deposit shall be held as a special fund in trust, as a guarantee that theobligations to the enrollees who are residents of this Commonwealth will beperformed. The securities shall be deposited pursuant to a system ofbook-entry evidencing ownership interests of the securities with transfers ofownership interests effected on the records of a depository and itsparticipants pursuant to rules and procedures established by the depository.Upon a determination of insolvency or action by the Commission pursuant to §38.2-4317, the deposit shall be used to protect the interests of the healthmaintenance organization's enrollees and to assure continuation of coveredservices to enrollees. If a health maintenance organization is placed inreceivership, the deposit shall be an asset subject to the provisions ofChapter 15 (§ 38.2-1500 et seq.) of this title.
B. The Commission may require that each health maintenance organization havea plan for handling insolvency which allows for continuation of benefits forthe duration of the contract period for which premiums have been paid andcontinuation of benefits to members who are confined on the date ofinsolvency in an inpatient facility until their discharge or expiration ofbenefits. In considering such a plan, the Commission may require:
1. Insurance satisfactory in form and content to the Commission to cover theexpenses to be paid for continued benefits after an insolvency;
2. Provisions in provider contracts that obligate the provider to provideservices for the duration of the period after the health maintenanceorganization's insolvency for which premium payment has been made and untilthe enrollees' discharge from inpatient facilities;
3. Acceptable letters of credit; or
4. Any other arrangements to assure that benefits are continued as specifiedabove.
C. 1. In the event of an insolvency of a health maintenance organization, allother carriers that participated in the enrollment process with the insolventhealth maintenance organization at a group's last regular enrollment periodshall offer such group's enrollees of the insolvent health maintenanceorganization a thirty-day enrollment period commencing upon a date to beprescribed by the Commission. Each carrier shall offer such enrollees of theinsolvent health maintenance organization the same coverages and rates thenin effect for its enrollees in such group.
2. If no other carrier had been offered to some groups enrolled in theinsolvent health maintenance organization, or if the Commission determinesthat the other health benefit plan lacks sufficient health care deliveryresources to assure that health care services shall be available andaccessible to all of the group enrollees of the insolvent health maintenanceorganization, then the Commission may allocate equitably the insolvent healthmaintenance organization's group contracts for such groups among all healthmaintenance organizations which operate within a portion of the insolventhealth maintenance organization's service area, taking into consideration thehealth care delivery resources of each health maintenance organization. Eachhealth maintenance organization to which a group or groups are so allocatedshall offer such group or groups the health maintenance organization'sexisting coverage which is most similar to each group's coverage with theinsolvent health maintenance organization at rates determined in accordancewith the successor health maintenance organization's existing ratingmethodology.
3. The Commission may also allocate equitably the insolvent healthmaintenance organization's nongroup enrollees which are unable to obtainother coverage among all health maintenance organizations which operatewithin a portion of the insolvent health maintenance organization's servicearea, taking into consideration the health care delivery resources of eachsuch health maintenance organization. Each health maintenance organization towhich nongroup enrollees are allocated shall offer such nongroup enrolleesthe health maintenance organization's existing coverage for individual orconversion coverage as determined by his type of coverage in the insolventhealth maintenance organization at rates determined in accordance with thesuccessor health maintenance organization's existing rating methodology.Successor health maintenance organizations which do not offer direct nongroupenrollment may aggregate all of the allocated nongroup enrollees into onegroup for rating and coverage purposes.
D. 1. Any carrier providing replacement coverage with respect to grouphospital, medical or surgical expense or service benefits within a period ofsixty days from the date of discontinuance of a prior health maintenanceorganization contract or policy providing such hospital, medical or surgicalexpense or service benefits shall immediately cover all employees anddependents who were validly covered under the previous health maintenanceorganization contract or policy at the date of discontinuance and who wouldotherwise be eligible for coverage under the succeeding carrier's contract,regardless of any provisions of the contract relating to active employment orhospital confinement or pregnancy.
2. Except to the extent benefits for the condition would have been reduced orexcluded under the prior carrier's contract or policy, no provision in asucceeding carrier's contract of replacement coverage which would operate toreduce or exclude benefits on the basis that the condition giving rise tobenefits preexisted the effective date of the succeeding carrier's contractshall be applied with respect to those employees and dependents validlycovered under the prior carrier's contract or policy on the date ofdiscontinuance.
E. [Repealed.]
(1980, c. 720, § 38.1-874; 1986, c. 562; 1989, c. 216; 1990, c. 224; 1992,cc. 14, 20; 2000, c. 503.)
A. Each health maintenance organization shall deposit and maintain acceptablesecurities with the State Treasurer in amounts prescribed by § 38.2-4310.1.The deposit shall be held as a special fund in trust, as a guarantee that theobligations to the enrollees who are residents of this Commonwealth will beperformed. The securities shall be deposited pursuant to a system ofbook-entry evidencing ownership interests of the securities with transfers ofownership interests effected on the records of a depository and itsparticipants pursuant to rules and procedures established by the depository.Upon a determination of insolvency or action by the Commission pursuant to §38.2-4317, the deposit shall be used to protect the interests of the healthmaintenance organization's enrollees and to assure continuation of coveredservices to enrollees. If a health maintenance organization is placed inreceivership, the deposit shall be an asset subject to the provisions ofChapter 15 (§ 38.2-1500 et seq.) of this title.
B. The Commission may require that each health maintenance organization havea plan for handling insolvency which allows for continuation of benefits forthe duration of the contract period for which premiums have been paid andcontinuation of benefits to members who are confined on the date ofinsolvency in an inpatient facility until their discharge or expiration ofbenefits. In considering such a plan, the Commission may require:
1. Insurance satisfactory in form and content to the Commission to cover theexpenses to be paid for continued benefits after an insolvency;
2. Provisions in provider contracts that obligate the provider to provideservices for the duration of the period after the health maintenanceorganization's insolvency for which premium payment has been made and untilthe enrollees' discharge from inpatient facilities;
3. Acceptable letters of credit; or
4. Any other arrangements to assure that benefits are continued as specifiedabove.
C. 1. In the event of an insolvency of a health maintenance organization, allother carriers that participated in the enrollment process with the insolventhealth maintenance organization at a group's last regular enrollment periodshall offer such group's enrollees of the insolvent health maintenanceorganization a thirty-day enrollment period commencing upon a date to beprescribed by the Commission. Each carrier shall offer such enrollees of theinsolvent health maintenance organization the same coverages and rates thenin effect for its enrollees in such group.
2. If no other carrier had been offered to some groups enrolled in theinsolvent health maintenance organization, or if the Commission determinesthat the other health benefit plan lacks sufficient health care deliveryresources to assure that health care services shall be available andaccessible to all of the group enrollees of the insolvent health maintenanceorganization, then the Commission may allocate equitably the insolvent healthmaintenance organization's group contracts for such groups among all healthmaintenance organizations which operate within a portion of the insolventhealth maintenance organization's service area, taking into consideration thehealth care delivery resources of each health maintenance organization. Eachhealth maintenance organization to which a group or groups are so allocatedshall offer such group or groups the health maintenance organization'sexisting coverage which is most similar to each group's coverage with theinsolvent health maintenance organization at rates determined in accordancewith the successor health maintenance organization's existing ratingmethodology.
3. The Commission may also allocate equitably the insolvent healthmaintenance organization's nongroup enrollees which are unable to obtainother coverage among all health maintenance organizations which operatewithin a portion of the insolvent health maintenance organization's servicearea, taking into consideration the health care delivery resources of eachsuch health maintenance organization. Each health maintenance organization towhich nongroup enrollees are allocated shall offer such nongroup enrolleesthe health maintenance organization's existing coverage for individual orconversion coverage as determined by his type of coverage in the insolventhealth maintenance organization at rates determined in accordance with thesuccessor health maintenance organization's existing rating methodology.Successor health maintenance organizations which do not offer direct nongroupenrollment may aggregate all of the allocated nongroup enrollees into onegroup for rating and coverage purposes.
D. 1. Any carrier providing replacement coverage with respect to grouphospital, medical or surgical expense or service benefits within a period ofsixty days from the date of discontinuance of a prior health maintenanceorganization contract or policy providing such hospital, medical or surgicalexpense or service benefits shall immediately cover all employees anddependents who were validly covered under the previous health maintenanceorganization contract or policy at the date of discontinuance and who wouldotherwise be eligible for coverage under the succeeding carrier's contract,regardless of any provisions of the contract relating to active employment orhospital confinement or pregnancy.
2. Except to the extent benefits for the condition would have been reduced orexcluded under the prior carrier's contract or policy, no provision in asucceeding carrier's contract of replacement coverage which would operate toreduce or exclude benefits on the basis that the condition giving rise tobenefits preexisted the effective date of the succeeding carrier's contractshall be applied with respect to those employees and dependents validlycovered under the prior carrier's contract or policy on the date ofdiscontinuance.
E. [Repealed.]
(1980, c. 720, § 38.1-874; 1986, c. 562; 1989, c. 216; 1990, c. 224; 1992,cc. 14, 20; 2000, c. 503.)
