Sec. 38a-194. Enrollment period. Replacement coverage in the event of insolvency.
Sec. 38a-194. Enrollment period. Replacement coverage in the event of insolvency. (a) Enrollment period. In the event of an insolvency of a health care center,
upon order of the commissioner, all other carriers that participated in the enrollment
process with the insolvent health care center at a group's last regular enrollment period
shall offer such group's subscribers of the insolvent health care center a thirty-day enrollment period commencing upon the date of insolvency. Each carrier shall offer such
subscribers of the insolvent health care center the same coverages and rates that such
carrier had offered to the subscribers of the group at its last regular enrollment period
for the remainder of the term of the original group contract. An open enrollment shall
not be required where the group contract holder participates in a self-insured, self-funded
or other health plan exempt from the regulation of the commissioner, unless the plan
administrator and group contract holder voluntarily agree to offer a simultaneous open
enrollment and extend coverage under the same enrollment terms and conditions as are
applicable to carriers under sections 38a-175 to 38a-178, inclusive, subsection (a) of
section 38a-179, sections 38a-182 to 38a-185, inclusive, 38a-187, 38a-188 and 38a-192
to 38a-194, inclusive, and the regulations adopted hereunder.
(b) Replacement coverage allocated among centers within service area. If no
other carrier has been offered to one or more groups enrolled in the insolvent health
care center, or if the commissioner determines that the other carrier or carriers lack
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 care center,
then the commissioner shall allocate equitably the insolvent health care center's group
contracts for such groups among all health care centers which operate within a portion
of the insolvent health care center's service area, taking into consideration the health
care delivery resources of each health care center. Each health care center, to which a
group or groups are so allocated, shall offer such group or groups the health care center's
existing coverage which is most similar to the group's coverage with the insolvent health
care center at rates determined in accordance with the successor health care center's
existing rating methodology. No offering by a carrier shall be required where the group
contract holder participates in a self-insured, self-funded or other health plan exempt
from regulation by the commissioner. The commissioner shall also allocate equitably
the insolvent health care center's nongroup enrollees who are unable to obtain other
coverage among all health care centers which operate within a portion of the insolvent
health care center's service area, taking into consideration the health care delivery resources of each such health care center. Each health care center to which nongroup
enrollees are allocated, shall offer each such nongroup enrollee, the health care center's
existing coverage for individual or conversion coverage as determined by his type of
coverage in the insolvent health care center at rates determined in accordance with
the successor health care center's existing rating methodology. Successor health care
centers which do not offer direct nongroup enrollment may aggregate all of the allocated
nongroup enrollees into one group for rating and coverage purposes.
(c) Replacement coverage extended to all subscribers. Exception. (1) "Discontinuance" shall mean the termination of the contract between the group contract holder
and a health care center due to the insolvency of the health care center, and does not
refer to the termination of any agreement between any individual enrollee and the health
care center.
(2) Any carrier providing replacement coverage with respect to group hospital, medical or surgical expense or service benefits within a period of sixty days from the date
of discontinuance of a prior health care center contract or policy providing such hospital,
medical or surgical expense or service benefits shall immediately cover all subscribers
and subscribers' beneficiaries who were validly covered under the previous health care
center 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.
(3) 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 subscribers and
subscribers' beneficiaries validly covered under the prior carrier's contract or policy on
the date of discontinuance.
(d) Insolvency. Priority of distribution. In the event of the insolvency of a health
care center, for purposes of determining the priority of distribution of the general assets
of the health care center, claims of enrollees, enrollees' beneficiaries, subscribers and
subscribers' beneficiaries shall have the same priority as established by section 38a-944 for policyholders and beneficiaries of insureds of insurance companies described
in subdivision (3) of subsection (a) of section 38a-944. If an enrollee or subscriber is
liable to any provider for services provided pursuant to and covered by the health care
center, that liability shall have the status of an enrollee or subscriber claim for distribution
of assets. Any provider who is obligated by statute or agreement to hold enrollees or
subscribers harmless from liability for services provided pursuant to and covered by a
health care center shall have a priority of distribution of the general assets immediately
following that of enrollees, enrollees' beneficiaries, subscribers and subscribers' beneficiaries as described in this subsection, and immediately preceding the priority of distribution described in subdivision (4) of subsection (a) of section 38a-944.
(P.A. 90-68, S. 14, 16; P.A. 99-9, S. 5, 6.)
History: P.A. 99-9 substituted "subscribers" for "enrollees" in Subsec. (a), substituted "subscribers and subscribers'
beneficiaries" for "enrollees" in Subsec. (c) and added new Subsec. (d) re priority of distribution in the event of insolvency,
effective May 12, 1999.