§ 4181 - Purpose; creation of association; coverage
§ 4181. Purpose; creation of association; coverage
(a) The purpose of this subchapter is to protect members of health care plans who reside in this state, and their beneficiaries, payees and assignees against failure in the performance of contractual obligations due to the impairment or insolvency of the health maintenance organization operating such health care plans. Nonresident members of such health care plans shall be protected by this association if:
(1) they reside in states which have associations similar to the association created by this subchapter;
(2) they are not eligible for coverage by such association;
(3) the organization which operated such health care plan never held a license or certificate of authority in such states; and
(4) such organization was domiciled in this state.
(b) In order to provide the protection intended by this subchapter:
(1) an association of health maintenance organizations is created to enable the guaranty of payment of benefits and of continuation of coverages;
(2) members of the association are subject to assessment to provide funds to carry out the purpose of this subchapter; and
(3) the association is authorized to assist the commissioner, in the prescribed manner, in the detection and prevention of health maintenance organization impairments and insolvencies.
(c) This subchapter shall provide coverage to the persons specified in subsection (a) of this section for direct individual contract, group contracts and certificates issued under such contracts, or any other evidence of coverage, each of which provides coverage under a health care plan, and has been issued by any organization holding a certificate of authority under chapter 139 of this title, but not for any business of such organization not transacted under its certificate of authority as a health maintenance organization. (Added 1993, No. 30, § 15, eff. May 21, 1993.)