(a) Notwithstanding sections 431:10-226.5 and 431:10A-106 to the contrary, a health maintenance organization shall not rescind coverage under a health benefit plan with respect to an individual, including a group to which the individual belongs or family coverage in which the individual is included, after the individual is covered under the plan, unless:

Terms Used In Hawaii Revised Statutes 432D-29

  • Fraud: Intentional deception resulting in injury to another.
  • Rescission: The cancellation of budget authority previously provided by Congress. The Impoundment Control Act of 1974 specifies that the President may propose to Congress that funds be rescinded. If both Houses have not approved a rescission proposal (by passing legislation) within 45 days of continuous session, any funds being withheld must be made available for obligation.
(1) The individual or a person seeking coverage on behalf of the individual performs an act, practice, or omission that constitutes fraud;
(2) The individual makes an intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage; or
(3) The individual fails to timely pay required premiums or contributions toward the cost of coverage; provided that the rescission is in compliance with federal regulations.

As used in this subsection, “a person seeking coverage on behalf of the individual” shall not include an insurance producer or employee or authorized representative of the health carrier.

(b) A health maintenance organization shall provide at least thirty days advance written notice to each plan enrollee or, for individual health insurance coverage, to each primary subscriber, who would be affected by the proposed rescission of coverage before coverage under the plan may be rescinded in accordance with subsection (a) regardless of whether, in the case of group health insurance coverage, the rescission applies to the entire group or only to an individual within the group.
(c) This section applies regardless of any applicable contestability period.

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