Alabama Administrative Code › Title 482 - ALABAMA DEPARTMENT OF INSURANCE › Chapter 482-1-071 - MEDICARE SUPPLEMENT INSURANCE MINIMUM STANDARDS REGULATION › Section 482-1-071-.08 - Benefit Standards For Policies Or Certificates Issued Or Delivered On Or After March 25, 1996

Current through Register Vol. 42, No. 9, June 28, 2024
The following standards are applicable to all Medicare
				supplement policies or certificates delivered or issued for delivery in this
				state on or after March 25, 1996. No policy or certificate may be advertised,
				solicited, delivered or issued for delivery in this state as a Medicare
				supplement policy or certificate unless it complies with these benefit
				standards.
A. General Standards. The
			 following standards apply to Medicare supplement policies and certificates and
			 are in addition to all other requirements of this chapter.
(1) A Medicare supplement policy or
			 certificate shall not exclude or limit benefits for losses incurred more than
			 six (6) months from the effective date of coverage because it involved a
			 preexisting condition. The policy or certificate may not define a preexisting
			 condition more restrictively than a condition for which medical advice was
			 given or treatment was recommended by or received from a physician within six
			 (6) months before the effective date of coverage.
(2) A Medicare supplement policy or
			 certificate shall not indemnify against losses resulting from sickness on a
			 different basis than losses resulting from accidents.
(3) A Medicare supplement policy or
			 certificate shall provide that benefits designed to cover cost sharing amounts
			 under Medicare will be changed automatically to coincide with any changes in
			 the applicable Medicare deductible amount and copayment percentage factors.
			 Premiums may be modified to correspond with such changes.
(4) No Medicare supplement policy or
			 certificate shall provide for termination of coverage of a spouse solely
			 because of the occurrence of an event specified for termination of coverage of
			 the insured, other than the nonpayment of premium.
(5) Each Medicare supplement policy shall be
			 guaranteed renewable.
(a) The issuer shall not
			 cancel or nonrenew the policy solely on the ground of health status of the
			 individual.
(b) The issuer shall
			 not cancel or nonrenew the policy for any reason other than nonpayment of
			 premium or material misrepresentation.
(c) If the Medicare supplement policy is
			 terminated by the group policyholder and is not replaced as provided under Rule
			 482-1-071-.08 A(5)(e), the issuer
			 shall offer certificateholders an individual Medicare supplement policy which
			 (at the option of the certificateholder)
(i)
			 Provides for continuation of the benefits contained in the group policy,
			 or
(ii) Provides for benefits that
			 otherwise meet the requirements of this subsection.
(d) If an individual is a certificateholder
			 in a group Medicare supplement policy and the individual terminates membership
			 in the group, the issuer shall
(i) Offer the
			 certificateholder the conversion opportunity described in Rule
			 482-1-071-.08 A(5)(c),
			 or
(ii) At the option of the group
			 policyholder, offer the certificateholder continuation of coverage under the
			 group policy.
(e) If a
			 group Medicare supplement policy is replaced by another group Medicare
			 supplement policy purchased by the same policyholder, the issuer of the
			 replacement policy shall offer coverage to all persons covered under the old
			 group policy on its date of termination. Coverage under the new policy shall
			 not result in any exclusion for preexisting conditions that would have been
			 covered under the group policy being replaced.
(f) If a Medicare supplement policy
			 eliminates an outpatient prescription drug benefit as a result of requirements
			 imposed by the Medicare Prescription Drug, Improvement and Modernization Act of
			 2003, the modified policy shall be deemed to satisfy the guaranteed renewal
			 requirements of this paragraph.
(g)
			 Rate increases otherwise authorized by law are not prohibited by this Paragraph
			 (5).
(6) Termination of
			 a Medicare supplement policy or certificate shall be without prejudice to any
			 continuous loss which commenced while the policy was in force, but the
			 extension of benefits beyond the period during which the policy was in force
			 may be conditioned upon the continuous total disability of the insured, limited
			 to the duration of the policy benefit period, if any, or payment of the maximum
			 benefits. Receipt of Medicare Part D benefits will not be considered in
			 determining a continuous loss.
(7)
(a) A Medicare supplement policy or
			 certificate shall provide that benefits and premiums under the policy or
			 certificate shall be suspended at the request of the policyholder or
			 certificateholder for the period (not to exceed twenty-four (24) months) in
			 which the policyholder or certificateholder has applied for and is determined
			 to be entitled to medical assistance under Title XIX of the Social Security
			 Act, but only if the policyholder or certificateholder notifies the issuer of
			 the policy or certificate within ninety (90) days after the date the individual
			 becomes entitled to assistance.
(b)
			 If suspension occurs and if the policyholder or certificateholder loses
			 entitlement to medical assistance, the policy or certificate shall be
			 automatically reinstituted effective as of the date of termination of
			 entitlement if the policyholder or certificateholder provides notice of loss of
			 entitlement within ninety (90) days after the date of loss and pays the premium
			 attributable to the period.
(c)
			 Each Medicare supplement policy shall provide that benefits and premiums under
			 the policy shall be suspended (for any period that may be provided by federal
			 regulation) at the request of the policyholder if the policyholder is entitled
			 to benefits under Section 226 (b) of the Social Security Act and is covered
			 under a group health plan (as defined in Section 1862 (b)(1)(A)(v) of the
			 Social Security Act). If suspension occurs and if the policyholder or
			 certificate holder loses coverage under the group health plan, the policy shall
			 be automatically reinstituted (effective as of the date of loss of coverage) if
			 the policyholder provides notice of loss of coverage within ninety (90) days
			 after the date of the loss and pays the premium attributable to the period
			 effective as of the date of termination of enrollment in the group health
			 plan.
(d) Reinstitution of
			 coverages as described in Subparagraphs (b) and (c):
(i) Shall not provide for any waiting period
			 with respect to treatment of preexisting conditions;
(ii) Shall provide for resumption of coverage
			 that is substantially equivalent to coverage in effect before the date of
			 suspension. If the suspended Medicare supplement policy provided coverage for
			 outpatient prescription drugs, reinstitution of the policy for Medicare Part D
			 enrollees shall be without coverage for outpatient prescription drugs and shall
			 otherwise provide substantially equivalent coverage to the coverage in effect
			 before the date of suspension; and
(iii) Shall provide for classification of
			 premiums on terms at least as favorable to the policyholder or
			 certificateholder as the premium classification terms that would have applied
			 to the policyholder or certificateholder had the coverage not been
			 suspended.