Pennsylvania Code › Title 31 - INSURANCE › Part IV - Life Insurance › Chapter 89 - APPROVAL OF LIFE, ACCIDENT AND HEALTH INSURANCE › Subchapter K - MEDICARE SUPPLEMENT INSURANCE MINIMUM STANDARDS › Section 89.776 - Benefits standards for policies or certificates issued or delivered on or after July 30, 1992, and prior to June 1, 2010

Current through Register Vol. 54, No. 28, July 13, 2024
The following standards apply to 1990 Standardized Medicare
					 supplement benefit plans. A policy or certificate may not be advertised,
					 solicited, delivered or issued for delivery in this Commonwealth as a Medicare
					 supplement policy or certificate unless it complies with these benefit
					 standards.
(1)
General
				  standards
. The following standards apply to Medicare supplement
				  policies and certificates and are in addition to other requirements of this
				  subchapter:
(i)
Exclusions and
				  limitations
. A Medicare supplement policy or certificate may not
				  exclude or limit benefits for losses incurred more than 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 6 months before the
				  effective date of coverage.
(ii)
Indemnification of sickness and accidents
. A Medicare
				  supplement policy or certificate may not indemnify against losses resulting
				  from sickness on a different basis than losses resulting from
				  accidents.
(iii)
Cost
				  sharing amounts under Medicare
. 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 changes in the
				  applicable Medicare deductible, copayment or coinsurance percentage factors.
				  Premiums may be modified to correspond with these changes.
(iv)
Termination of coverage
. A Medicare supplement policy or certificate may not 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.
(v)
Cancellation
				  or nonrenewal of policy
. Each Medicare supplement policy shall be
				  guaranteed renewable.
(A) The issuer may not
				  cancel or nonrenew the policy solely on the ground of health status of the
				  individual.
(B) The issuer may not
				  cancel or nonrenew the policy for a 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 clause (E), the issuer shall offer
				  certificateholders an individual Medicare supplement policy which, at the
				  option of the certificateholder, does one of the following:
(I) Provides for continuation of the benefits
				  contained in the group policy.
(II)
				  Provides for benefits that otherwise meet the requirements of this
				  section.
(D) If an
				  individual is a certificateholder in a group Medicare supplement policy and the
				  individual terminates membership in the group, the issuer shall do one of the
				  following:
(I) Offer the certificateholder the
				  conversion opportunity described in clause (C).
(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 persons covered under the old group policy on its date
				  of termination. Coverage under the new policy may not result in an 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 act of December 8, 2003 (Pub. L. No.
				  108-173, 117 Stat. 2066), the modified policy
				  shall be deemed to satisfy the guaranteed renewal requirements of this
				  paragraph.
(vi)
Extension of benefits
. Termination of a Medicare supplement
				  policy or certificate shall be without prejudice to a 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, or payment of the maximum benefits. Receipt of Medicare
				  Part D benefits will not be considered in determining a continuous
				  loss.
(vii)
Suspension by
				  policyholder
.
(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 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 U.S.C.A. §§
													1396-1396u), but only if the
				  policyholder or certificateholder notifies the issuer of the policy or
				  certificate within 90 days after the date the individual becomes entitled to
				  this assistance.
(B) If a
				  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 the
				  entitlement) as of the termination of the entitlement if the policyholder or
				  certificateholder provides notice of loss of the entitlement within 90 days
				  after the date of the loss and pays the premium attributable to the period,
				  effective as of the date of termination of the entitlement.
(C) Each Medicare supplement policy shall
				  provide that benefits and premiums under the policy shall be suspended at the
				  request of the policyholder if the policyholder is entitled to benefits under
				  section 226(b) of the Social Security Act (42 U.S.C.A. §
													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 U.S.C.A.
				  §
													1395y(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 coverage) if the policyholder
				  provides notice of loss of coverage within 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 these coverages as
				  described in clauses (B) and (C):
(I) May not
				  provide for a 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.
(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 if the coverage had not been
				  suspended.
(viii) If an issuer makes a written offer to
				  a Medicare supplement policyholder or certificateholder of one or more of its
				  plans to exchange, during a specified period, a 1990 Standardized Medicare
				  supplement benefit plan with a 2010 Standardized Medicare supplement benefit
				  plan, the offer and subsequent exchange shall comply with the following
				  requirements:
(A) The issuer need not provide
				  justification to the Commissioner if the insured replaces the 1990 Standardized
				  Medicare supplement benefit plan policy or certificate with an issue age rated
				  2010 Standardized Medicare supplement benefit plan 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 the 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 the issuer must be filed with and approved by the
				  Commissioner in accordance with the filing requirements and procedures required
				  by the Commissioner.
(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) The issuer may not apply new preexisting
				  condition limitations or a new incontestability period to the new policy for
				  those benefits contained in the exchanged 1990 Standardized Medicare supplement
				  benefit plan 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 Medicare supplement benefit plan 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
				  if the offer or issue would be in violation of State or Federal law.