Virginia Administrative Code › Title 14 - INSURANCE › Agency 5 - STATE CORPORATION COMMISSION, BUREAU OF INSURANCE › Chapter 170 - RULES GOVERNING MINIMUM STANDARDS FOR MEDICARE SUPPLEMENT POLICIES › Section 14VAC5-170-70 - Benefit standards for 1990 Medicare supplement policies delivered on or after July 30, 1992, and prior to June 1, 2010

Current through Register Vol. 40, No. 24, July 15, 2024
A. The following standards are applicable to
				all Medicare supplement benefit plan policies or certificates delivered or
				issued for delivery in this Commonwealth on or after July 30, 1992, and with an
				effective date for coverage prior to June 1, 2010. No policy or certificate may
				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.
B. The following
				standards apply to Medicare supplement policies and certificates and are in
				addition to all other requirements of this chapter.
1. A Medicare supplement policy or
				certificate shall not exclude or limit benefits for a loss incurred more than
				six 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 six
				months before the effective date of coverage.
2. A Medicare supplement policy or
				certificate shall not indemnify against losses resulting from sickness on a
				different basis than losses resulting from accidents.
3. 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 any changes in
				the applicable Medicare deductible, copayment or coinsurance amounts. Premiums
				may be modified to correspond with such changes provided that loss ratios are
				being met.
4. No Medicare
				supplement policy or certificate shall 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.
5. Each Medicare supplement policy shall be
				guaranteed renewable.
a. The issuer shall not
				cancel or nonrenew the policy solely on the ground of health status of the
				individual.
b. The issuer shall not
				cancel or nonrenew the policy for any 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 subdivision 5 e of this subsection, the
				issuer shall offer certificateholders an individual Medicare supplement policy
				which (at the option of the certificateholder):
(1) Provides for continuation of the benefits
				contained in the group policy; or
(2) Provides for benefits that otherwise meet
				the requirements of this subsection.
d. If an individual is a certificateholder in
				a group Medicare supplement policy and the individual terminates membership in
				the group, the issuer shall:
(1) Offer the
				certificateholder the conversion opportunity described in subdivision 5 c of
				this subsection; or
(2) 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 all
				persons covered under the old group policy on its date of termination. Coverage
				under the new policy shall not result in any exclusion for preexisting
				conditions that would have been covered under the group policy being
				replaced.
f. If a Medicare
				supplement policy is modified to eliminate an outpatient prescription drug
				benefit as a result of requirements imposed by the Medicare Prescription Drug,
				Improvement, and Modernization Act of 2003 ( 42 USC § 1395w-101 ), the
				modified policy shall be deemed to satisfy the guaranteed renewal requirements
				of this subdivision 5.
6. Termination of a Medicare supplement
				policy or certificate shall be without prejudice to any 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, if any, or payment of the maximum benefits. Receipt of
				Medicare Part D benefits will not be considered in determining a continuous
				loss.
7.
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 of
				1935 ( 42 USC § 1396 et seq.), but only if the policyholder or
				certificateholder notifies the issuer of such policy or certificate within 90
				days after the date the individual becomes entitled to such
				assistance.
b. If 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 such entitlement) if the
				policyholder or certificateholder provides notice of loss of entitlement within
				90 days after the date of loss and pays the premium attributable to the
				period.
c. Each Medicare supplement
				policy or certificate shall provide that benefits and premiums under the policy
				shall be suspended (for any period that may be provided by federal regulation)
				at the request of the policyholder if the policyholder or certificateholder is
				entitled to benefits under § 226 (b) of the Social Security Act ( 42 USC
				§ 426 ) and is covered under a group health plan (as defined in §
				1862(b)(1)(A)(v) of the Social Security Act ( 42 USC § 1395y )). 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 or
				certificateholder provides notice of loss of coverage within 90 days after the
				date of the loss.
d. Reinstitution
				of coverages as described in subdivisions 7 b and c of this subsection:
(1) Shall not provide for any waiting period
				with respect to treatment of preexisting conditions;
(2) Shall provide for reinstituted coverage
				that is substantially equivalent to coverage in effect before the date of such
				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; and
(3) 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 had the coverage not been
				suspended.
8.
				If an issuer makes a written offer to the Medicare supplement policyholders or
				certificateholders of one or more of its plans, to exchange during a specified
				period from his 1990 standardized plan (as described in
				14VAC5-170-80 ) to a 2010
				standardized plan (as described in
				14VAC5-170-85 ), the offer and
				subsequent exchange shall comply with the following requirements:
a. An issuer need not provide justification
				to the commission if the insured replaces a 1990 standardized policy or
				certificate with an issue age rated 2010 standardized 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 such offer, the rate charged to the insured for the new exchanged policy
				shall recognize the policy reserve buildup, due to the prefunding inherent in
				the use of an issue age rate basis, for the benefit of the insured. The method
				proposed to be used by an issuer shall be filed with the commission in
				accordance with § 38.2-316 of the Code of Virginia.
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. An 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
				policy or certificate of the insured, but may apply preexisting condition
				limitations of no more than six months to any added benefits contained in the
				new 2010 standardized 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 where the offer of issue would be in violation of state or
				federal law.