Section 28: Insurance Plan Denial And Cancellation
Establishes circumstances under which an insurance carrier may deny enrollment or cancel a health benefit plan even though individuals or small groups remain eligible for the plan. Once a carrier has closed the health benefit plan to new individuals and small groups, the carrier may cancel and discontinue benefits of the health benefit plan to all members. The cancellation, however, is not effective until the enrolled individual’s or small group’s next enrollment anniversary.
In general, a carrier may discontinue a health benefit plan for an eligible individual or small business if a member repeatedly fails to pay premiums, has committed fraud or misrepresented eligibility status, has failed to comply with specific plan provisions, has voluntary ceased coverage, or has failed to comply with carrier’s requests for information that the carrier deems necessary to verify the application for coverage under a plan.
The Commissioner of the Division of Insurance will oversee and regulate insurance carrier denials and cancellations.