Sec. 13. (a) A health maintenance organization must include in each contract a written statement that if the contract is terminated by the health maintenance organization, an enrollee who is hospitalized for a medical or surgical condition on the date of termination will have continuation of coverage for inpatient covered services.

(b) The continuation of coverage referred to in subsection (a) is not required after one (1) of the following occurs:

(1) The discharge of the enrollee from the hospital.

(2) Sixty (60) days pass after the contract is terminated by the health maintenance organization.

(3) The hospitalized enrollee obtains from another carrier coverage that includes the coverage provided by the terminating health maintenance organization.

(4) A contract holder terminates the contract with the health maintenance organization, as determined by:

(A) the effective date specified in written communication sent by the contract holder to the health maintenance organization, which effective date shall be at least fifteen (15) days after the date the written communication is placed in the United States mail or sent by facsimile transmission; or

(B) the failure to pay a premium within the grace period permitted under the contract.

(5) Termination of an enrollee by a health maintenance organization due to:

(A) the enrollee knowingly providing false information to the health maintenance organization;

(B) the enrollee's failure to comply with the rules of the health maintenance organization stated in the contract; or

(C) the enrollee's failure to pay a premium within the grace period permitted under contract.

(c) In order to satisfy the requirements of subsection (a), a health maintenance organization may provide benefits that exceed the continuation of coverage required by this section, either in the types or time period of health care services covered, or both.

(d) If an enrollee terminates the enrollee's coverage, the health maintenance organization is not required to provide continuation of coverage to that enrollee under this section after the termination.

(e) This section does not apply to a termination of coverage as the result of the receivership of a health maintenance organization.

As added by P.L.26-1994, SEC.25.