Sec 20-1069. Contingency for insolvency; plan; contents; definition

A. A health care services organization shall have a plan for the risk of insolvency that is continuously acceptable to the director and that provides for funding of all of the following:

1. Continuation of benefits for the duration of the contract period under the enrollee's health care plan or for sixty days from the date insolvency is declared, whichever is longer.

2. Continuation of benefits to enrollees who are confined on the date of insolvency in an inpatient facility until their discharge.

B. Entitlement to continuation of benefits under subsection A is contingent on timely payment of the premium by the enrollee or by the enrollee's representative to the health care services organization or its agent, administrator, conservator or receiver.

C. Each plan for the risk of insolvency shall include both:

1. An actuarial memorandum describing the basis on which the actuary concludes that the plan for the risk of insolvency will meet the requirements of subsection A.

2. A certification of a qualified actuary that to the best of the actuary's knowledge and judgment the rates charged will support the benefits outlined under the evidence of coverage and that the plan for the risk of insolvency satisfies the requirements of subsection A.

D. Unless preempted under federal law or unless federal law imposes greater requirements than this section, this section applies to a provider sponsored health care services organization.

E. As soon as practicable after commencement of a delinquency proceeding, the receiver shall submit a report to the court concerning the adequacy of the plan for the risk of insolvency, including an analysis of the amount of funds available under the plan and the costs of continuation of benefits as required under subsection A. The receiver shall update the report with reasonable frequency as directed by the court.

F. If at any time the receiver determines that the plan for the risk of insolvency is inadequate to pay the cost of continuation of benefits as required under subsection A, the receiver shall immediately notify the court and contract providers.

G. For purposes of this section, "continuation of benefits" includes benefits provided by contract providers, noncontract providers and employee providers on staff with the health care services organization, subject to any authorization procedures applicable before the declaration of insolvency.