26:2J-15. Prohibited practices for health maintenance organization

15. a. No health maintenance organization, or representative thereof, may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. For purpose of this act:

(1) a statement or item of information shall be deemed to be untrue if it does not conform to fact in any respect which is or may be significant to an enrollee of, or person considering enrollment in, a health care plan;

(2) a statement or item of information shall be deemed to be misleading, whether or not it may be literally untrue, if, in the total context in which such statement is made or such item of information is communicated, such statement or item of information may be reasonably understood by a reasonable person, not possessing special knowledge regarding health care coverage, as indicating any benefit or advantage or the absence of any exclusion, limitation, or disadvantage of possible significance to an enrollee of, or person considering enrollment in, a health care plan, if such benefit or advantage or absence of limitation, exclusion or disadvantage does not in fact exist;

(3) an evidence of coverage shall be deemed to be deceptive if the evidence of coverage taken as a whole, and with consideration given to typography and format, as well as language, shall be such as to cause a reasonable person, not possessing special knowledge regarding health care plans and evidences of coverage therefore, to expect benefits, services, charges, or other advantages which the evidence of coverage does not provide or which the health care plan issuing such evidence of coverage does not regularly make available for enrollees covered under such evidence of coverage.

b. The unfair trade practice provisions of the New Jersey insurance law (N.J.S.17B:30-1 through 22) shall be construed to apply to health maintenance organizations, health care plans and evidences of coverage except to the extent that the commissioner determines that the nature of health maintenance organizations, health care plans and evidence of coverage render such sections clearly inappropriate.

c. An enrollee may not be canceled or nonrenewed except for the failure to pay the charge for such coverage, or for such other reasons as may be promulgated by the commissioner.

d. No health maintenance organization, unless licensed as an insurer, may use in its name, evidence of coverage, or literature any of the words "insurance," "assurance," "casualty," "surety," "mutual," or any other words descriptive of the insurance, casualty, or surety business or deceptively similar to the name or description of any insurance, or surety corporation doing business in this State.

e. A health maintenance organization shall not consider a person's eligibility for medical assistance pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.), or the equivalent statute in another state, when determining the person's eligibility for enrollment in, or the provision of health care services under, a contract or certificate for health care services.

The provisions of this section shall be enforced by the State Director of the Division of Consumer Affairs and, where applicable, the commissioner or the Commissioner of Insurance. Nothing in this act shall limit the powers of the Attorney General and the procedures with respect to consumer fraud in P.L.1960, c.39 (C.56:8-1 et seq.).

L.1973,c.337,s.15; amended 1995,c.291,s.9.