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 89.775 - Minimum benefit standards for policies or certificates issued for delivery prior to July 30, 1992

Current through Register Vol. 54, No. 28, July 13, 2024
The following standards apply to Prestandardized Medicare
					 supplement benefit plans. A policy or certificate may not be advertised,
					 solicited or issued for delivery in this Commonwealth 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 consistent with this subchapter.
(1)
General standards
. The
				  following standards apply to Medicare supplement policies and certificates and
				  are in addition to the other requirements of this subchapter:
(i)
Exclusion/limitation of
				  benefits
. 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 amount, copayment, and coinsurance percentage
				  factors. Premiums may be modified to correspond with these changes.
(iv)
Termination of coverage
. A noncancellable, guaranteed renewable or noncancellable and guaranteed
				  renewable Medicare supplement policy may 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.
(B) Be cancelled or nonrenewed by the issuer
				  solely on the grounds of deterioration of health.
(v)
Restrictions on termination of
				  policies and certificates
.
(A) Except
				  as authorized by the Commissioner, an issuer may 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
				  clause (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.
(II) An individual Medicare supplement policy
				  which provides only benefits that are required to meet the minimum standards as
				  defined in §
													89.776a(2)
				  (relating to benefit standards for policies or certificates issued or delivered
				  on or after June 1, 2010).
(C) If membership in a group is terminated,
				  the issuer shall do one of the following:
(I)
				  Offer the certificateholder conversion opportunities that are described in
				  clause (B).
(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 will not result in an exclusion for preexisting
				  conditions that would have been covered under the group policy being
				  replaced.
(vi)
				  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 predicated upon the continuous total disability of the insured,
				  limited to the duration of the policy benefit period, if any, or to payment of
				  the maximum benefits. Receipt of Medicare Part D benefits will not be
				  considered in determining a continuous loss.
(vii) 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
				  requirement of this subsection.
(viii) If a hospital plan corporation or a
				  professional health services plan corporation issues a subscriber contract
				  which does not include the required benefits, the contract shall be issued in
				  conjunction with another contract, including at least the remainder of the
				  benefits in this subchapter, to qualify as Medicare supplement insurance. In
				  the alternative, two or more corporations may act jointly and issue a single
				  contract which contains the required benefits.