Illinois Administrative Code › Title 50 - INSURANCE › Part 2008 - MINIMUM STANDARDS FOR INDIVIDUAL AND GROUP MEDICARE SUPPLEMENT INSURANCE › Subpart B - COVERAGE, POLICY & BENEFIT PROVISIONS › Section 2008.71 - Benefit Standards for 1990 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery after February 11, 1992 and Prior to June 1, 2010

Current through Register Vol. 48, No. 28, July 12, 2024
The following standards are applicable to all Medicare
				  supplement policies or certificates delivered or issued for delivery in this
				  State on or after February 11, 1992 and with an effective date for coverage
				  prior to June 1, 2010. 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
				  Part.
1) A Medicare supplement policy
				or certificate shall not exclude or limit benefits for losses incurred more
				than 6 months from the effective date of coverage because the losses involved a
				preexisting condition. The policy or certificate may not define a preexisting
				condition more restrictively than as a condition for which medical advice was
				given or treatment was recommended by or received from a physician within 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) 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 and:
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 subsection (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 such benefits as 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 subsection (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
				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; and
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 subsection (a)(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 Medicare supplement
				policy or certificate shall provide:
A) 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
				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 ( 42 USC 1901 - 1941 ), but only if the policyholder or
				certificateholder notifies the issuer of such policy or certificate within 90
				days after the date the individual becomes entitled to such
				assistance.
B) If such suspension
				occurs and if the policyholder or certificateholder loses entitlement to such
				medical assistance, such policy or certificate shall be automatically
				reinstituted (effective as of the date of termination of such entitlement) as
				of the termination of such entitlement if the policyholder or certificateholder
				provides notice of loss of such entitlement within 90 days after the date of
				such loss and pays the premium attributable to the period, effective as of the
				date of termination of such entitlement.
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 (
				42 USC
				426(b) ) and is covered
				under a group health plan as defined in section 1862(b)(1)(A)(v) of the Social
				Security Act (
				42 USC
				1395 y(b)(1)(A)(v) ). If suspension occurs
				and if the policyholder or certificateholder loses coverage under the group
				health plan, the policy shall be automatically reinstituted (effective as of
				the date of loss of such coverage) if the policyholder provides notice of loss
				of coverage within 90 days after the date of such loss.
D) Reinstitution of such coverages as
				described in subsections (a)(7)(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 the
				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.
8)
				If, after June 1, 2010, an issuer makes a written offer to the Medicare
				Supplement policyholders or certificateholders of one or more of its plans, to
				exchange during a specified period from his or her 1990 Standardized plan (as
				described in Section
				2008.72
				of this Part) to a 2010 Standardized plan (as described in Section
				2008.67
				of this Part), the offer and subsequent exchange shall comply with the
				following requirements:
A) An issuer need not
				provide justification to the Director if the insured replaces a 1990
				Standardized policy or certificate with an issue age rated 2010 Standardized
				policy or certificate at the insured's original issue age and duration. If an
				insured's policy or certificate to be replaced is priced on an issue age rate
				schedule at the time of such offer, the rate charged to the insured for the new
				exchanged policy shall recognize the policy reserve buildup, due to the
				pre-funding inherent in the use of an issue age rate basis, for the benefit of
				the insured. The method proposed to be used by an issuer must be filed with the
				Director.
B) The rating class of
				the new policy or certificate shall be the class closest to the insured's class
				of the replaced coverage.
C) An
				issuer may not apply new pre-existing condition limitations or a new
				incontestability period to the new policy for those benefits contained in the
				exchanged 1990 Standardized policy or certificate of the insured, but may apply
				pre-existing condition limitations of no more than 6 months to any added
				benefits contained in the new 2010 Standardized policy or certificate not
				contained in the exchanged policy.
D) The new policy or certificate shall be
				offered to all policyholders or certificateholders within a given plan, except
				where the offer or issue would be in violation of state or federal
				law.