Alabama Administrative Code › Title 482 - ALABAMA DEPARTMENT OF INSURANCE › Chapter 482-1-071 - MEDICARE SUPPLEMENT INSURANCE MINIMUM STANDARDS REGULATION › Section 482-1-071-.07 - Minimum Benefit Standards For Pre-Standardized Medicare Supplement Benefit Plan Policies Or Certificates Issued For Delivery Prior To March 25, 1996

Current through Register Vol. 42, No. 9, June 28, 2024
No policy or certificate may be advertised, solicited or issued
				for delivery in this State as a Medicare supplement policy or certificate
				unless it meets or exceeds the following minimum standards. These are minimum
				standards and do not preclude the inclusion of other provisions or benefits
				which are not inconsistent with these 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
			 shall 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, copayment or coinsurance amounts. Premiums
			 may be modified to correspond with such changes.
(4) A "noncancellable," "guaranteed
			 renewable," or "noncancellable and guaranteed renewable" Medicare supplement
			 policy shall not:
(a) 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; or
(b) Be cancelled or
			 nonrenewed by the issuer solely on the grounds of deterioration of
			 health.
(5)
(a) Except as authorized by the commissioner
			 of this state, an issuer shall neither cancel nor nonrenew a Medicare
			 supplement policy or certificate for any reason other than nonpayment of
			 premium or material misrepresentation.
(b) If a group Medicare supplement insurance
			 policy is terminated by the group policyholder and not replaced as provided in
			 Paragraph (5)(d), the issuer shall offer certificateholders an individual
			 Medicare supplement policy. The issuer shall offer the certificateholder at
			 least the following choices:
(i) An individual
			 Medicare supplement policy currently offered by the issuer having comparable
			 benefits to those contained in the terminated group Medicare supplement policy;
			 and
(ii) An individual Medicare
			 supplement policy which provides only such benefits as are required to meet the
			 minimum standards as defined in
			 482-1-071-.08 -1B.
(c) If membership in a group is
			 terminated, the issuer shall:
(i) Offer the
			 certificateholder the conversion opportunities described in Subparagraph (b);
			 or
(ii) At the option of the group
			 policyholder, offer the certificateholder continuation of coverage under the
			 group policy.
(d) 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 group policy
			 shall not result in any exclusion for preexisting conditions that would have
			 been covered under the group policy being replaced.
(e) 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 predicated 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) 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 subsection.