Continuation of benefits
(a) If group or individual contracts are terminated by the HMO, provision shall be made for continuation of benefits to enrollees who, on the date of termination, are confined in an inpatient facility until their discharge or expiration of benefits according to the group or individual contract, and provision shall be made for pregnant enrollees through delivery and discharge. An HMO is not required to continue further benefits for an enrollee or group terminated for cause.
(b) Each HMO shall have a plan for handling insolvency that allows for continuation of benefits for the duration of the contract period for which premiums have been paid, continuation of benefits for enrollees who are confined on the date of insolvency in an inpatient facility until their discharge or expiration of benefits, and continuation of benefits for pregnant enrollees through delivery and discharge. The Department shall require the plan to include one or more of the following:
(1) Insurance to cover the expenses to be paid for continued benefits after the HMO’s insolvency;
(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 enrollees’ discharge from inpatient facilities;
(3) Insolvency reserves;
(4) Acceptable letters of credit; and
(5) Any other arrangements to assure that benefits are continued as specified above.