Conversion on termination of eligibility.

A group health maintenance contract delivered or issued for delivery in this state by a health maintenance organization shall provide that a subscriber or covered dependent whose coverage under the group health maintenance contract has been terminated for any reason, including discontinuance of the group health maintenance contract in its entirety or with respect to a covered class, and who has been continuously covered under the group health maintenance contract, and under any group health maintenance contract providing similar benefits which it replaces, for at least 3 months immediately prior to termination, shall be entitled to have issued to him or her by the health maintenance organization a health maintenance contract, hereafter referred to as a “converted contract.” A subscriber or covered dependent shall not be entitled to have a converted contract issued to him or her if termination of his or her coverage under the group health maintenance contract occurred for any of the following reasons:

(1) Failure to pay any required premium or contribution unless such nonpayment of premium was due to acts of an employer or person other than the individual;

(2) Replacement of any discontinued group coverage by similar group coverage within 31 days;

(3) Fraud or material misrepresentation in applying for any benefits under the health maintenance contract;

(4) Disenrollment for cause. When the requirements of paragraphs (a), (b), and (c) have been met, a health maintenance organization may disenroll a subscriber for cause if the subscriber’s behavior is disruptive, unruly, abusive, or uncooperative to the extent that his or her continuing membership in the organization seriously impairs the organization’s ability to furnish services to either the subscriber or other subscribers.

(a) Effort to resolve the problem. The organization must make a serious effort to resolve the problem presented by the subscriber, including the use or attempted use of subscriber grievance procedures.

(b) Consideration of extenuating circumstances. The organization must ascertain that the subscriber’s behavior does not directly result from an existing medical condition.

(c) Documentation. The organization must document the problems, efforts, and medical conditions as described in this subsection;

(5) Willful and knowing misuse of the health maintenance organization identification membership card by the subscriber;

(6) Willful and knowing furnishing to the organization by the subscriber of incorrect or incomplete information for the purpose of fraudulently obtaining coverage or benefits from the organization; or

(7) The subscriber has left the geographic area of the health maintenance organization with the intent to relocate or establish a new residence outside the organization’s geographic area.