§ 301.125. Replacement coverage.
If an impairment or insolvency of an HMO exists the following requirements shall be met:
(1) Other carriers who participated in the enrollment process with the impaired or insolvent HMO at a group’s last regular enrollment period, and which currently provide coverage to one or more employes of that group, shall offer the enrollees of the impaired or insolvent HMO a 15 business day enrollment period commencing upon the date of the mailing of the notification to subscribers of the impairment or insolvency.
(2) A carrier shall offer the enrollees of the impaired or insolvent HMO the same coverage and rates which the carrier currently offers to the enrollees for the group. The carrier shall immediately cover the employes and dependents who were validly covered under the previous HMO contract or policy as of the date of discontinuance and who would otherwise be eligible for coverage under the succeeding carrier’s contract, regardless of provisions in the contract relating to active employment, hospital confinement or other pre-existing health conditions.
(3) The receiving HMO may not become primary for expenditures which should be covered under the impaired or insolvent HMO’s continuation of benefits coverage.
(4) An open enrollment period will be preceded by at least 30 days notice from the Commissioner to each affected plan.
(5) An HMO shall provide the Department with evidence of a contractual arrangement with an insurer or hospital service corporation to provide conversion coverage in the event of the HMO’s impairment or insolvency.
Cross References This section cited in 31 Pa Code § 301.123 (relating to continuation of benefits).
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