South Carolina Code of Regulations › Chapter 69 - DEPARTMENT OF INSURANCE › Section 69-34 - Individual Accident and Health Insurance Minimum Standards

Current through Register Vol. 48, No. 6, June 28, 2024
A. Table of Contents:
B
Purpose
C
Applicability and Scope
D
Effective Date
E
Policy Definitions
F
Prohibited Policy Provisions
G
Accident and Health Minimum Standards for
						  Benefits
H
Required Disclosure Provisions
I
Severability
B. Purpose: The
		  purpose of this regulation is to implement Section
		  38-71-510,
		  et seq., so as to provide reasonable standardization and simplification of
		  terms and coverages of individual accident and health insurance policies and
		  individual subscriber contracts of hospital, medical and dental service
		  corporations in order to facilitate public understanding and comparison and to
		  eliminate provisions contained in individual accident and health insurance
		  policies and individual subscriber contracts of hospital, medical, and dental
		  service corporations which may be misleading or confusing in connection either
		  with the purchase of such coverages or with the settlement of claims and to
		  provide for full disclosure in the sale of such coverages.
C. Applicability and Scope: This Regulation
		  shall apply to all individual accident and health insurance policies and
		  individual subscriber contracts of hospital and medical and dental service
		  corporations delivered or issued for delivery in this State, except that it
		  shall not apply to individual policies or contracts issued pursuant to a
		  conversion privilege under a policy or contract of group or individual
		  insurance when such group or individual policy or contract includes provisions
		  which are inconsistent with this Regulation, nor shall it apply to Medicare
		  Supplement policies issued in accordance with Regulation Regulation
		  69-46.
		  The requirements contained in this Regulation shall be in addition to any other
		  applicable regulations promulgated by the Commissioner.
D. Effective Date: This Regulation shall
		  become effective July 13, 1981.
E.
		  Policy Definitions: Except as provided hereafter, no individual accident or
		  health insurance policy or hospital, medical, or dental service corporation
		  subscriber contract delivered or issued for delivery to any person in this
		  state shall contain definitions respecting the matters set forth below unless
		  such definitions comply with the requirements of this section.
(1) "One period of confinement" means
		  consecutive days of in-hospital service received as an in-patient, or
		  successive confinements when discharge from and re-admission for the same or
		  related causes to the hospital occurs within a period of time not more than the
		  greater of 90 days or three times the maximum number of days of in-hospital
		  coverage provided by the policy to a maximum of 180 days.
(2) "Hospital" may be defined in relation to
		  its status, facilities and available services or to reflect its accreditation
		  by the Joint Commission on Accreditation of Hospitals.
(a) The definition of the term "hospital"
		  shall not be more restrictive than one requiring that the hospital:
1. be an institution operated pursuant to
		  law; and
2. be primarily and
		  continuously engaged in providing or operating, either on its premises or in
		  facilities available to the hospital on a prearranged basis and under the
		  supervision of a staff of duly licensed physicians, medical, diagnostic and
		  major surgical facilities for the medical care and treatment of sick or injured
		  persons on an in-patient basis for which a charge is made; and
3. provide 24 hour nursing service by or
		  under the supervision of registered graduate professional nurses
		  (R.N.'s).
(b) The
		  definition of the term "hospital" may state that such term shall not be
		  inclusive of:
1. convalescent homes,
		  convalescent, rest, or nursing facilities; or
2. facilities primarily affording custodial,
		  educational or rehabilitory care; or
3. facilities for the aged, drug addicts or
		  alcoholics; or
4. any military or
		  veterans hospital or soldiers home or any hospital contracted for or operated
		  by any national government or agency thereof for the treatment of members or
		  ex-members of the armed forces, except for services rendered where a legal
		  liability exists for charges made to the individual for such services.
(3)
		  "Convalescent Nursing Home," "Extended Care Facility," or "Skilled Nursing
		  Facility" shall be defined in relation to its status, facilities, and available
		  services.
(a) A definition of such home or
		  facility shall not be more restrictive than one requiring that it:
1. be operated pursuant to law;
2. be approved for payment of Medicare
		  benefits or be qualified to receive such approval, if so requested;
3. be primarily engaged in providing, in
		  addition to room and board accommodations, skilled nursing care under the
		  supervision of a duly licensed physician;
4. provide continuous 24 hours a day nursing
		  service by or under the supervision of a registered graduate professional nurse
		  (R.N.); and
5. maintain a daily
		  medical record of each patient.
(b) The definition of such home or facility
		  may provide that such term shall not be inclusive of:
1. any home, facility or part thereof used
		  primarily for rest;
2. a home or
		  facility for the aged or for the care of drug addicts or alcoholics;
		  or
3. a home or facility primarily
		  used for the care and treatment of mental diseases, or disorders, or custodial
		  or educational care.
(4)
		  "Accident," "Accidental Injury," "Accidental Means;" shall be defined to employ
		  "result" language and shall not include words which establish an accidental
		  means test or use words such as "external, violent, visible wounds" or similar
		  words of description or characterization.
The definition shall not be more restrictive than the following:
			 Injury or injuries, for which benefits are provided, means accidental bodily
			 injury sustained by the insured person which is the direct cause of the loss,
			 independent of disease or bodily infirmity or any other cause and which occurs
			 while the insurance is in force.
Such definition may provide that injuries shall not include
			 injuries for which benefits are provided under workmen's compensation,
			 employer's liability or similar laws, motor vehicle no-fault plans, unless
			 prohibited by law, or injuries occurring while the insured person is engaged in
			 any activity pertaining to any trade, business, employment, or occupation for
			 wage or profit.
(5) Except
		  as provided in F(1), "Sickness" shall not be defined to be more restrictive
		  than the following: Sickness means sickness or disease of an insured person
		  which first manifests itself after the effective date of insurance and while
		  the insurance is in force. A definition of sickness may provide for a
		  probationary period which will not exceed thirty (30) days from the effective
		  date of the coverage of the insured person. The definition may be further
		  modified to exclude sickness or disease for which benefits are provided under
		  any workman's compensation, occupational disease, employer's liability or
		  similar law.
(6) "Pre-existing
		  condition" shall not be defined to be more restrictive than (a) or (b) as
		  stated below. (a) shall apply where the insurer uses an application form
		  designed to elicit the complete health history of a prospective insured and, on
		  the basis of the answers on that application, underwrites in accordance with
		  the insurer's established standards. (b) shall apply where the insurer elects
		  to use a simplified application, with or without a question as to the
		  applicant's health at the time of application, or elects not to use any
		  application.
(a) A condition misrepresented or
		  not revealed in the application and for which symptoms existed prior to the
		  effective date of coverage that would cause an ordinarily prudent person to
		  seek diagnosis, care or treatment or for which medical advice or treatment was
		  recommended by or received from a physician.
(b) A condition for which symptoms existed
		  which would cause an ordinarily prudent person to seek diagnosis, care or
		  treatment within a one (1) year period preceding the effective date of the
		  coverage of the insured person or a condition for which medical advice or
		  treatment was recommended by a physician or received from a physician within a
		  five (5) year period preceding the effective date of the coverage of the
		  insured person.
(7)
		  "Physician" may be defined by including words such as "duly qualified
		  physician" or "duly licensed physician." However, the use of such terms may not
		  exclude payment or reimbursement otherwise provided by the policy which is
		  performed by a duly licensed podiatrist, chiropractor or oral surgeon when he
		  is acting within his legal scope of practice.
(8) "Nurse" may be defined so that the
		  description of nurse is restricted to a type of nurse, such as registered
		  graduate professional nurse (R.N.), a licensed practical nurse (L.P.N.), or a
		  licensed vocational nurse (L.V.N.). If the words "nurse," "trained nurse" or
		  "registered nurse" are used without specific instruction, then the use of such
		  terms requires the insurer to recognize the services of any individual who
		  qualifies under such terminology in accordance with the applicable statutes or
		  administrative rules of the licensing or registry board of the state.
(9) Total Disability:
(a) "Total Disability" shall not be defined
		  more restrictively than the inability of the insured to engage in his own
		  occupation during the first year of disability or for the length of the benefit
		  period if less than one year. After the first year of disability, total
		  disability may be defined as the complete inability of the insured to engage in
		  any employment or occupation for which the insured is qualified by reason of
		  education, training or experience. The definition of such word may allow the
		  insurer to require reasonable conditions that the insured not be in fact
		  engaged in any occupation for wage or profit.
(b) Total disability may be defined in
		  relation to the inability of the person to perform duties but may not be based
		  solely upon an individual's inability to: (a) Perform "any occupation
		  whatsoever," "any occupational duty," or "any and every duty of his
		  occupation," or (b) Engage in any training or rehabilitation program.
(c) An insurer may specify the requirement of
		  the complete inability of the person to perform all of the substantial and
		  material duties of his regular occupation or words of similar import. An
		  insurer may require care by a physician (other than the insured or a member of
		  the insured's immediate family).
(10) "Partial Disability" shall be defined in
		  relation to the individual's inability to perform one or more but not all of
		  the "major," "important," or "essential" duties of employment or occupation or
		  may be related to a "percentage" of time worked or to a "specified number of
		  hours" or to "compensation." Where a policy provides total disability benefits
		  and partial disability benefits, only one elimination period may be
		  required.
(11) "Residual
		  Disability" shall be defined in relation to the individual's reduction in
		  earnings and may be related either to the inability to perform some part of the
		  "major," "important," or "essential duties" of employment or occupation, or to
		  the inability to perform all usual business duties for as long as is usually
		  required. A policy which provides for residual disability benefits may require
		  a qualification period, during which the insured must be continuously totally
		  disabled before residual disability benefits are payable. The qualification
		  period for residual benefits may be longer than the elimination period for
		  total disability. In lieu of the term "residual disability," the insurer may
		  use "proportionate disability" or other term of similar import which in the
		  opinion of the Commissioner adequately and fairly describes the
		  benefit.
(12) "Medicare" shall be
		  defined in any hospital, surgical or medical expense policy which relates its
		  coverage to eligibility for Medicare or Medicare benefits. Medicare may be
		  substantially defined as "The Health Insurance for the Aged Act, Title XVIII of
		  the Social Security Amendments of 1965 as Then Constituted or Later Amended,"
		  or "Title I, Part I of Public Laws 89-97, as Enacted by the Eighty-Ninth
		  Congress of the United States of America and popularly known as the Health
		  Insurance for the Aged Act," as then constituted and any later amendments or
		  substitutes thereof" or words of similar import.
(13) "Mental or Nervous Disorders" shall not
		  be defined more restrictively than a definition including neurosis,
		  psychoneurosis, psychopathy, psychosis, or mental or emotional disease or
		  disorder of any kind.