The purpose of this memorandum is to summarize the changes to ss. Ins 3.27 and 3.39, Wis. Adm. Code, which will become effective for all policies issued on or after February 1, 1999.
INSURERS SHOULD CAREFULLY REVIEW THE MEMORANDUM AND THE RULE CHANGES AS BOTH POLICY FORMS AND OUTLINES OF COVERAGE ARE AFFECTED.
Advertising
Section Ins 3.27 (5) (a) 1
The definition of advertisement for accident and health insurance has been revised to specifically include electronic communications, including the Internet, web pages and computer presentations.
Creditable Coverage
New definitions have been added in s. Ins 3.39 (3) (akm), (aks), (akv), (cm) and (il) to facilitate when an insurer must reduce a preexisting condition waiting period because the insured had prior creditable coverage.
Section Ins 3.39 (3) (akm)
"Continuous period of creditable coverage" means the period during which an individual was covered by creditable coverage, if during the period of the coverage the individual had no breaks in coverage greater than 63 days.
Section Ins 3.39 (3) (aks)
"Creditable coverage" means coverage of an individual provided by any of the following:
- A group health plan;
- Health insurance coverage;
- Part A or Part B of Title XVIII of the Social Security Act (Medicare);
- Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits under section 1928;
- Chapter 55 of Title 10 United States Code (CHAMPUS);
- A medical care program of the Indian Health Service or of a tribal organization;
- A state health benefits risk pool;
- A health plan offered under chapter 89 of the Title 5 United States Code (Federal Employes Health Benefits Program);
- A public health plan as defined in federal regulation;
- A health benefit plan under Section 5(e) of the Peace Corps Act;
The rule specifies the types of coverage and plans that do not qualify as creditable coverage.
Section Ins 3.39 (3) (akv)
"Employee welfare benefit plan" means a plan, fund or program of employee benefits as defined in the Employee Retirement Income Security Act (ERISA).
Section Ins 3.39 (3) (cm)
"Medicare+Choice" plan means a plan of coverage for health benefits under Medicare Part C, including coordinated care plans, provider-sponsored organizations and preferred provider organization plans, medical savings accounts coupled with a contribution into a Medicare+Choice medical savings account, and Medicare+Choice private fee-for-service plans.
Section Ins 3.39 (3) (il)
"Secretary" means the Secretary of the United States Department of Health and Human Services.
Open Enrollment
Section Ins 3.39 (4m) (a)
This section has been changed to also prohibit insurers from underwriting applications for Medicare supplement or Medicare Select policies which are taken prior to the 6-month open enrollment period.
Section Ins 3.39 (4m) (c) and (d)
If an applicant qualifies for open enrollment and has had a continuous period of creditable coverage of at least 6 months, an insurer may not exclude benefits based on a pre-existing condition. If an individual has had a period of creditable coverage of less than 6 months, an insurer must reduce any preexisting condition exclusion by the period of time the individual had a continuous period of creditable coverage.
Mandated Benefits
Section Ins 3.39 (5) (c) 16 and 17
These sections require insurers to provide payment in full for all usual and customary expenses of hospital and ambulatory surgery center charges and anesthetics for dental care required by s. 632.895 (12), Wis. Stat., as well as for breast reconstruction required by s. 632.895 (13), Wis. Stat. Insurers are not required to duplicate benefits paid by Medicare.
High Deductible Plans
Section Ins 3.39 (5) (k)
This section allows insurers to offer two new plans with high deductibles ($1500 for 1999). One of the plans offers the prescription drug rider. The annual high deductible shall consist of out-of-pocket expenses, other than premiums, and will be in addition to other deductibles. The deductible will be based on a calendar year and will be adjusted annually by the secretary to reflect changes in the Consumer Price Index.
Disclosure Statements
Section Ins 3.39 (9) (b)
Insurers may choose from alternate disclosure statements in Appendix 8, provided the issuer uses the same disclosure statement for all policies of the type covered by the disclosure.
Commissions and Limitations
Section Ins 3.39 (21) (f)
This section removes commission limitations for full-time, salaried employees of insurers selling Medicare+Choice policies.
Section Ins 3.39 (25) (d)
This section prohibits an issuer from accepting and an agent from taking an application for a Medicare supplement policy more than 3 months prior to the insured becoming eligible for coverage.
Guaranteed Issue for Eligible Persons
Section Ins 3.39 (34)
Certain individuals, defined as eligible persons, may apply to enroll under a Medicare supplement policy not later than 63 days after the date of termination of enrollment from a defined employee welfare benefit plan that provides health benefits that is primary to or supplements the benefits under Medicare. Under certain instances, an eligible person is also a person whose coverage is discontinued under a Medicare+Choice plan, or a Medicare risk or cost contract; or a person whose coverage under a Medicare supplement policy ceases because of the insolvency of the issuer or nonissuer organization, other involuntary termination of coverage, or a misrepresentation of policy provisions by the issuer or agent. An eligible individual is also a person who was enrolled in a Medicare supplement policy and terminates coverage to enroll, for the first time, in a Medicare+Choice plan or a Medicare select policy, and drops coverage within the first 12 months of enrollment, or a person who enrolls in a Medicare+Choice plan when first becoming eligible for Medicare, and drops coverage within the first 12 months of enrollment.
Section Ins 3.39 (34) (c) 1.
Except as defined in s. Ins 3.39 (34) (c) 2., an eligible person is entitled to enroll in a Medicare supplement policy along with any riders available or a Medicare select policy, except the outpatient prescription drug rider.
Section Ins 3.39 (34) (c) 2.
An eligible person who was enrolled in a Medicare supplement policy and terminates coverage to enroll, for the first time, in a Medicare+Choice plan or a Medicare select policy, and drops coverage within the first 12 months of enrollment is entitled to enroll in the same Medicare supplement policy in which the individual was most recently previously enrolled, if available from the same issuer.
Section Ins 3.39 (34) (d)
At the same time an individual receives notice of termination of coverage or benefits due to the termination of a contract or plan, the issuer or administrator of the plan must notify the person of his or her rights to enroll in other coverage and the obligations of issuers of Medicare supplement policies. If the individual ceases coverage, regardless of the reason, the issuer or administrator of the plan must notify the person of his or her rights to enroll in other coverage and the obligations of issuers of Medicare supplement policies, within 10 working days of the issuer receiving notification of disenrollment.
Changes to Appendixes
Insurers are reminded that changes will need to be made to the outline of coverage and other disclosure forms.
Appendix 1, Outline of Coverage
On the top of the Part A and Part B charts, text in bold or contrasting color must be added if the plan is a High Deductible Plan. Under services in the Part A chart, the Skilled Nursing Facility language has been changed. In the Part B chart, the Immunosuppressive drug language should be removed from the chart. Clinical laboratory services-blood tests for diagnostic services should be added to the Part B chart.
Appendix 4, Notice Of Changes In Medicare And Your Medicare Supplement Coverage
The information referring to unlimited number of hospital days after the deductible, and the language referring to immunosuppressive drugs should be deleted.
Appendix 8, Disclosure Statements
Disclosure statements (al),(bl),(cl) and (gl) have been added, while the requirements for disclosure statements related to Long Term Care policies are eliminated.
For copies of the amended rule, contact OCI's Central Files Section at (608) 266-0110. Questions concerning this bulletin may be addressed to Jerry Zimmer, Health and Life Section, Market Regulation Bureau at jerry.zimmer@oci.state.wi.us.