New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 2 - INSURANCE GROUP › Subchapter 13 - GROUP COVERAGE DISCONTINUANCE AND REPLACEMENT › Section 11:2-13.6 - Replacement carrier coverage

Current through Register Vol. 56, No. 14, July 15, 2024
(a) This section shall determine carrier liability where one carrier's policy or contract replaces another carrier's plan providing similar types of coverage.
(b) The prior carrier remains liable only to the extent of its accrued liabilities and extensions of benefits. The position of the prior carrier shall be the same whether the group policyholder, contractholder or other entity secures replacement coverage from a new carrier, self-funds, or foregoes the provision of coverage.
(c) Liability of succeeding carriers is governed by the following:
1. Each person who is eligible for coverage in accordance with the succeeding carrier's plan of benefits (in respect of classes eligible and actively at work to the extent permitted by State and Federal law) shall be covered by that carrier's plan of benefits.
2. Each person not covered under the succeeding carrier's plan of benefits in accordance with (c)1 above shall be covered by the succeeding carrier in accordance with the following rules if such individual was validly covered (including benefit extension) under the prior plan on the date of discontinuance and if such individual is a member of the class or classes of individuals eligible for coverage under the succeeding carrier's plan. Any reference in the following rules to an individual who was or was not totally disabled is a reference to the individual's status immediately prior to the date the succeeding carrier's coverage becomes effective:
i. The minimum level of benefits or services or supplies to be provided by the succeeding carrier shall be the applicable level of benefits of the prior carrier's plan reduced by any benefits payable or services or supplies provided by the prior plan;
ii. Coverage shall be provided by the succeeding carrier until at least the earliest of the following:
(1) The date the individual becomes eligible under the succeeding carrier's plan as described in paragraph 1 above;
(2) For each type of coverage, the date the individual's coverage would terminate in accordance with the succeeding carrier's plan provisions applicable to individual termination of coverage (for example, at termination of employment or ceasing to be an eligible dependent, as the case may be);
(3) In the case of an individual who was totally disabled, and in the case of a type of coverage for which 11:2-13.5 requires an extension or accrued liability, the end of any period of extension or accrued liability which is required of the prior carrier by N.J.A.C. 11:2-13.5, or if the prior carrier's policy or contract is not subject to that section, would have been required of that carrier had its policy or contract been subject to 11:2-13.5 at the time the prior plan was discontinued and replaced by the succeeding carrier's plan.
3. Except with respect to policies and contracts providing group medical insurance, in the case of a preexisting conditions limitation included in the succeeding carrier's plan, the level of benefits or coverage applicable to preexisting conditions of persons becoming covered by the succeeding carrier's plan in accordance with this subsection during the period of time this limitation applies under the new plan shall be the lesser of:
i. The benefits or coverage of the new plan determined without application of the preexisting conditions limitation; and
ii. The benefits or coverage of the prior plan.
4. With respect to group medical insurance, any preexisting condition limitation or exclusion in the succeeding carrier's plan applicable to persons becoming covered by the succeeding carrier's plan shall be reduced or eliminated for each person separately on the basis of each person's creditable coverage pursuant to 17B:27A-54 et seq.
5. The succeeding carrier, in applying any deductibles or waiting periods in its plan, shall give credit for the satisfaction or partial satisfaction of the same or similar provisions under a prior plan providing similar benefits. Except as it relates to HMOs, the definition of waiting period includes, but is not limited to, the period of time required to be satisfied before maternity benefits or coverage becomes available. The aggregate period of time to be applied may be the greater of that required by either the prior plan or the succeeding plan. But in any event, the aggregate period of time will be satisfied by taking into consideration the full portion of the waiting period satisfied under the prior plan. In the case of deductible provisions, the credit shall apply for the same or overlapping benefit periods and shall be given for expenses actually incurred and applied against the deductible provisions of the prior carrier's plan during the 90 days preceding the effective date of the succeeding carrier's plan, but only to the extent these expenses are recognized under the terms of the succeeding carrier's plan and are subject to a similar deductible provision.
6. Notwithstanding (c) above, policies and contracts providing group medical insurance shall not contain a separate waiting period for maternity benefits, and pregnancy shall not be treated as a preexisting condition.
7. In any situation where a determination of the prior carrier's benefit or coverage is required by the succeeding carrier, at the succeeding carrier's request the prior carrier shall furnish a statement of the benefits or coverage available or pertinent information sufficient to permit verification of the benefit or coverage or the determination itself by the succeeding carrier. For the purpose of this section, benefits or coverage of the prior plan shall be determined in accordance with all the definitions, conditions, covered expenses and services and supplies provisions of the prior plan rather than those of the succeeding plan. The benefit or coverage determination shall be made as if coverage had not been replaced by the succeeding carrier.