17:48A-5 Subscription contracts.

5. Every individual contract made by any corporation subject to the provisions of this chapter to provide payment for medical services shall provide for the payment of medical services for a period of 12 months from the date of issue of the subscription certificate. Any such contract may provide that it shall be automatically renewed from year to year unless there shall have been 1 month's prior written notice of termination by either the subscriber or the corporation. In the absence of fraud or material misrepresentation in the application for contract or for reinstatement, no contract with an individual subscriber shall be terminated by the corporation unless all contracts of the same type, in the same group or covering the same classification of persons are terminated under the same conditions. No contract between such corporation and subscriber shall allow for the payment for medical services for more than one person, except that a family contract may provide that payment will be made for medical services rendered to a subscriber and any of those dependents defined in section 1 of this act.

Whenever, pursuant to the provisions of a subscription certificate or group contract issued by a corporation, the former spouse of a named subscriber under such a certificate or contract is no longer entitled to coverage as an eligible dependent by reason of divorce, separate coverage for such former spouse shall be made available by the corporation on an individual nongroup basis under the following conditions:

(a) Application for such nongroup coverage shall be made to the corporation by or on behalf of such former spouse no later than 31 days following the date his or her coverage under the prior certificate or contract terminated.

(b) No new evidence of insurability shall be required in connection with the application for such nongroup coverage but any health exception, limitation or exclusion applicable to said former spouse under the prior coverage may, at the option of the corporation, be carried over to the new nongroup coverage.

(c) The effective date of the new coverage shall be the day following the date on which such former spouse's coverage under the prior certificate or contract terminated.

(d) The benefits provided under the nongroup coverage issued to such former spouse shall be at least equal to the basic benefits provided in contracts then being issued by the corporation to new nongroup applicants of the same age and family status.

Family type contracts shall provide that the services applicable for children shall be payable with respect to a newly-born child of the subscriber, or his or her spouse from the moment of birth. The services for newly-born children shall consist of coverage of injury or sickness including the necessary care and treatment of medically diagnosed congenital defects and abnormalities. If a subscription payment is required to provide services for a child, the contract may require that notification of birth of a newly-born child and the required payment shall be furnished to the service corporation within 60 days after the date of birth in order to have the coverage continue beyond such 60-day period.

Nonfamily type contracts which provide for services to the subscriber but not to family members or dependents of that subscriber, shall also provide services to newly-born children of the subscriber which shall commence with the moment of birth of each child and shall consist of coverage of injury or sickness including the necessary care and treatment of medically diagnosed congenital defects and abnormalities, provided that application therefor and payment of the required subscription amount are made to include in said contract the coverage described in the preceding paragraph of this section within 60 days from the date of birth of a newborn child.

A contract under which coverage of a dependent of a subscriber terminates at a specified age shall, with respect to an unmarried child, covered by the contract prior to attainment of age 19, who is incapable of self-sustaining employment by reason of intellectual disability or physical handicap and who became so incapable prior to attainment of age 19 and who is chiefly dependent upon such subscriber for support and maintenance, not so terminate while the contract remains in force and the dependent remains in such condition, if the subscriber has within 31 days of such dependent's attainment of the termination age submitted proof of such dependent's incapacity as described herein. The foregoing provisions of this paragraph shall not apply retrospectively or prospectively to require a medical service corporation to insure as a covered dependent any child with an intellectual disability or physical handicap of the applicant where the contract is underwritten on evidence of insurability based on health factors, required to be set forth in the application. In such cases any contract heretofore or hereafter issued may specifically exclude such child with an intellectual disability or physical handicap from coverage.

L.1940, c.74, s.5; amended 1944, c.102, s.3; 1966, c.237, s.1; 1970, c.113; 1975, c.110, s.1; 1980, c.113, s.4; 1981, c.511, s.9; 2010, c.50, s.5; 2017, c.361, s.3.