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HMO”s Must Say If Coverage Lapses

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California´s HMO regulators will be ordering health plans to notify enrollees if employers let their health coverage lapse.

The regulations will be aimed at so-called phantom coverage, which occurs when an employer delays paying health care premiums and the HMO eventually cancels the policy.

After the policy is canceled, employees often get billed for medical care they received during the grace period when the employer wasn´t paying the premiums but before the HMO cut off the coverage.

Governor Davis directed the Department of Managed Health Care today to develop new rules to ensure that patients are notified if employers have stopped paying premiums.