Pennsylvania Code › Title 31 - INSURANCE › Part IV - Life Insurance › Chapter 88 - INDIVIDUAL ACCIDENT AND SICKNESS INSURANCE MINIMUM STANDARDS › MINIMUM STANDARDS FOR BENEFITS › Section 88.165 - Major medical expense coverage

Current through Register Vol. 54, No. 28, July 13, 2024
A policy of "Major Medical Expense Coverage" provides
					 hospital, medical, and surgical coverage as follows:
(1)  The aggregate maximum is not less than
				  $10,000 per covered person.
(2) The
				  copayment by a covered person is not more than 25% of covered charges except
				  that the copayment percentage applicable to paragraph (7) of §
										88.166 of this title (relating to
				  coverage of each covered person) may not be more than 50%.
(3) The deductible shall be stated on a per
				  person, per family, per illness, per benefit period, or per year basis, or a
				  combination of such bases. The deductible shall be not more than 5% of the
				  maximum limit under the coverage unless the policy is written to complement
				  underlying hospital and medical insurance in which case such deductible may be
				  increased by the amount of the benefits provided by such underlying insurance.
				  If the deductible includes benefits provided by underlying hospital and medical
				  insurance, it shall be known as a variable deductible and shall be subject to
				  the following requirements:
(i) The sales
				  material and policy forms for this type of coverage shall clearly and fully
				  describe the variable deductible provision.
(ii)
				   Sales material describing the variable deductible shall be left
				  with the applicant at the time the application is executed.
(iii) The policy shall contain a provision
				  which will permit the insured to increase or decrease his basic deductible to
				  reflect his changing needs and changes in his other medical coverage. Such
				  change will be permitted on any policy whenever subject to an appropriate
				  adjustment of premiums. No evidence of insurability shall be required in
				  connection with a decrease in the basic deductible.
(iv) The minimum basic dollar deductible
				  shall be $750.
(v) Policies shall
				  provide for claim payments on a pro rata basis in the event that other policies
				  of the insured contain similar deductible provisions.
(vi)  The insurance company shall remind the
				  insured of his right to adjust the deductible with each renewal notice. This
				  may be accomplished by a question or questions on the renewal notice. These
				  questions would concern themselves with any changes in the basic benefits of
				  the policyholder.
(vii) An
				  explanation of the variable deductible provision shall be included in the
				  outline of coverage and shall be worded substantially similar to the following:
Your Major Medical Expense Policy is designed to
					 coordinate its coverage with benefits provided under other medical expense
					 coverage. This is done by a deductible amount' which is the flat amount of the
					 Basic Deductible shown on page _____________ of your policy or the amount of
					 benefits paid under other medical expense coverage if that is greater.
If this feature of your policy is not understood contact your
					 agent
or the company immediately.
In the application attached to your policy, you were asked
					 to furnish details of any other medical expense coverage applicable to Covered
					 Persons under your policy so that your choice of the flat amount Basic
					 Deductible could be an appropriate one under the circumstances. If the extent
					 of such other coverage changes in the future, it may be that you should
					 consider a change in the Basic Deductible amount in accordance with the
					 provision of your policy entitled Privilege of Changing Basic Deductible.' In
					 such event, we suggest that you get in touch with your agent or company, who
					 will be glad to assist you.