TITLE 27
Insurance
CHAPTER 27-74
Discount Medical Plan Organization Act
SECTION 27-74-11
§ 27-74-11 Marketing restrictions and
disclosure requirements.
(a) All advertisements, marketing materials, brochures, discount medical plan
cards and any other communications of a discount medical plan organization
provided to prospective members and members shall be truthful and not
misleading in fact or in implication. An advertisement, any marketing material,
brochure, discount medical plan card or other communication is misleading in
fact or in implication if it has a capacity or tendency to mislead or deceive
based on the overall impression that it is reasonably expected to create within
the segment of the public to which it is directed.
(b) A discount medical plan organization shall not:
(1) Except as otherwise provided in this chapter or as a
disclaimer of any relationship between discount medical plan benefits and
insurance, or as a description of an insurance product connected with a
discount medical plan, use in its advertisements, marketing material, brochures
and discount medical plan cards the term "insurance";
(2) Except as otherwise provided in state law, describe or
characterize the discount medical plan as being insurance whenever a discount
medical plan is bundled with an insured product and the insurance benefits are
incidental to the discount medical plan benefits;
(3) Use in its advertisements, marketing material, brochures
and discount medical plan cards the terms "health plan," "coverage," "copay,"
"copayments," "deductible," "preexisting conditions," "guaranteed issue,"
"premium," "PPO," "preferred provider organization," or other terms in a manner
that could reasonably mislead an individual into believing that the discount
medical plan is health insurance;
(4) Use language in its advertisements, marketing material,
brochures and discount medical plan cards with respect to being "registered" by
the health insurance commissioner in a manner that could reasonably mislead an
individual into believing that the discount medical plan is insurance or has
been endorsed by the state;
(5) Make misleading, deceptive or fraudulent representations
regarding the discount or range of discounts offered by the discount medical
plan card or the access to any range of discounts offered by the discount
medical plan card;
(6) Have restrictions on access to discount medical plan
providers, including, except for hospital services, waiting periods and
notification periods; or
(7) Pay providers any fees for medical or ancillary services
or collect or accept money from a member to pay a provider for medical or
ancillary services provided under the discount medical plan, unless the
discount medical plan organization has an active certificate of authority to
act as a third party administrator in accordance with chapter 20.7 of title 27
of the general laws.
(c) Each discount medical plan organization shall make the
following general disclosures:
(1) In writing in not less than twelve-point font and in a
manner that is clear and conspicuous and achieves a grade level score of no
higher than eighth (8th) grade on the Flesch-Kincaid readability test;
(2) On the first content page of any advertisements,
marketing materials or brochures made available to the public relating to a
discount medical plan; and
(3) Along with any enrollment forms given to a prospective
member:
(i) That the plan is a discount plan and is not insurance
coverage;
(ii) That the range of discounts for medical or ancillary
services provided under the plan will vary depending on the type of provider
and medical or ancillary service received;
(iii) Unless the discount medical plan organization has an
active certificate of authority to act as a third party administrator, that the
plan does not make payments to providers for the medical or ancillary services
received under the discount medical plan;
(iv) That the plan member is obligated to pay for all medical
or ancillary services, but will receive a discount from those providers that
have contracted with the discount medical plan organization; and
(v) The toll-free telephone number and Internet website
address for the registered discount medical plan organization for prospective
members and members to obtain additional information about and assistance on
the discount medical plan and up-to-date lists of providers participating in
the discount medical plan.
(d) If the initial contact with a prospective member is by
telephone, the disclosures required under subsection (c) of this section shall
be made orally and shall be included in the initial written materials that
describe the benefits under the discount medical plan provided to the
prospective or new member.
(e) In addition to the general disclosures required under
this section, each discount medical plan organization shall provide to:
(1) Each prospective member, at the time of enrollment,
information in writing in not less than twelve (12) point font and in a manner
that is clear and conspicuous and achieves a grade level score of no higher
than eighth (8th) grade on the Flesch-Kincaid readability test that describes
the terms and conditions of the discount medical plan, including any
limitations or restrictions on the refund of any processing fees or periodic
charges associated with the discount medical plan;
(2) Each new member a document in writing in not less than
twelve (12) point font and written in a manner that is clear and conspicuous
and achieves a grade level score of no higher than eighth (8th) grade on the
Flesch-Kincaid readability test that contains the terms and conditions of the
discount medical plan and includes information on:
(i) The name of the member;
(ii) The benefits to be provided under the discount medical
plan;
(iii) Any processing fees and periodic charges associated
with the discount medical plan, including any limitations or restrictions on
the refund of any processing fees and periodic charges;
(iv) The mode of payment of any processing fees and periodic
charges, such as monthly, quarterly, etc., and procedures for changing the mode
of payment;
(v) Any limitations, exclusions or exceptions regarding the
receipt of discount medical plan benefits;
(vi) Any waiting periods for certain medical or ancillary
services under the discount medical plan;
(vii) Procedures for obtaining discounts under the discount
medical plan, such as requiring members to contact the discount medical plan
organization to make an appointment with a provider on the member's behalf;
(viii) Cancellation procedures, including information on the
member's thirty (30) day cancellation rights and refund requirements and
procedures for obtaining refunds;
(ix) Renewal, termination and cancellation terms and
conditions;
(x) Procedures for adding new members to a family discount
medical plan, if applicable;
(xi) Procedures for filing complaints under the discount
medical plan organization's complaint system and information that, if the
member remains dissatisfied after completing the organization's complaint
system, the plan member may contact his or her local state insurance
department; and
(xii) The name and mailing address of the registered discount
medical plan organization or other entity where the member can make inquiries
about the plan, send cancellation notices and file complaints.
History of Section.
(P.L. 2010, ch. 156, § 1; P.L. 2010, ch. 158, § 1.)
