§ 301.123. Continuation of benefits.
(a) An HMO shall have a plan for handling insolvency which allows for continuation of benefits for the duration of the contract period for which premiums have been paid and continuation of benefits to members who are confined on the date of insolvency in an inpatient facility until either their discharge or expiration of benefits—limited to services directly related to the condition which occasioned the admission—whichever comes later. This plan may limit the continuation of benefits to the expiration of the member’s benefits if the member or the contractholder, for example, employer, has an opportunity to obtain replacement coverage under § 301.125 (relating to replacement coverage), and fails to obtain replacement coverage.
(b) The Commissioner may require one or more of the following which provides for continuation of benefits:
(1) Insurance to cover the expenses for continued benefits after an insolvency, including conversion contracts. The HMO shall provide evidence of an agreement by the insurer to notify the Commissioner within 10 days of the insurer’s intent to terminate for any reason, including failure to pay the premium.
(2) Provisions in provider contracts that obligate the provider to provide services for the duration of the period after the HMO’s insolvency for which premium payment has been made and until the enrollee’s discharge from the inpatient facility. The provisions may limit the continuation of benefits to the expiration of the member’s benefits if the member or the contractholder, for example, employer, has an opportunity to obtain replacement coverage under § 301.125, and fails to obtain replacement coverage.
(3) Acceptable letters of credit.
(4) Dedicated parental guaranty in a form and amount approved by the Commissioner.
(5) Other arrangements approved by the Commissioner to assure that benefits are continued as specified in this section.
Source The provisions of this § 301.123 adopted March 13, 1992, effective March 14, 1992, 22 Pa.B. 1178; corrected April 24, 1992, effective March 14, 1992, 22 Pa.B. 2242.
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