Rhode Island § 27-74-11 - Discount Medical Plan Organization Act

§ 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 this title.

(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) 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-point (12) 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-point (12) 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-day (30) 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.