806
KAR 17:570. Minimum standards for Medicare supplement insurance policies and
certificates.
RELATES
TO: KRS 304.2-310, 304.2-320, 304.3-240, 304.12-020, 304.14-120, 304.14-500-304.14-550,
304.17-311, 304.17A-005, 304.18-034, 304.32-275, 304.33-030, 304.38-205, 45
C.F.R. 46, 42 C.F.R. 409.87, 74 F.R. 18808 (2009), 29 U.S.C. 1002, 42 U.S.C.
426, 42 U.S.C. 1320c-3 and d-2, 42 U.S.C. 1395-1395ggg, 42 U.S.C. 1396, Pub. L.
108-173
STATUTORY
AUTHORITY: KRS 304.2-110(1), 304.14-510, 304.32-250, 304.38-150, EO 2009-535
NECESSITY,
FUNCTION, AND CONFORMITY: KRS 304.2-110(1) authorizes the Executive Director of
Insurance to promulgate administrative regulations necessary for or as an aid
to the effectuation of any provision of the Kentucky Insurance Code, as defined
in KRS 304.1-010. KRS 304.14-510 authorizes the Executive Director of Insurance
to promulgate administrative regulations establishing minimum standards for
Medicare supplement insurance policies. KRS 304.32-250 authorizes the Executive
Director of Insurance to promulgate administrative regulations which he deems
necessary for the proper administration of KRS 304.32. KRS 304.38-150 authorizes
the Executive Director of Insurance to promulgate administrative regulations
which he deems necessary for the proper administration of KRS Chapter 304.38. EO
2009-535, effective June 12, 2009, established the Department of Insurance and
the Commissioner of Insurance as the head of the department. This administrative
regulation establishes minimum standards for Medicare supplement insurance
policies and certificates.
Section
1. Definitions. (1) "Applicant" is defined by KRS 304.14-500(1).
(2)
"Bankruptcy" means a petition for declaration of bankruptcy filed or
filed against a Medicare Advantage organization that is not an insurer and has
ceased doing business in the state.
(3)
"Certificate" is defined by KRS 304.14-500(2).
(4)
"Certificate form" means the form on which the certificate is delivered
or issued for delivery by the insurer.
(5)
"Commissioner" means Commissioner of Insurance.
(6)
"Compensation" means monetary or non-monetary remuneration of any
kind relating to the sale or renewal of the policy or certificate including
bonuses, gifts, prizes, awards, and finder’s fees.
(7)
"Complaint" means any dissatisfaction expressed by an individual
concerning a Medicare Select insurer or its network providers.
(8)
"Continuous period of creditable coverage" means the period during
which an individual was covered by creditable coverage, if during the period of
the coverage the individual had no breaks in coverage greater than sixty-three
(63) days.
(9)
"Creditable coverage" is defined by KRS 304.17A-005(8).
(10)
"Employee welfare benefit plan" means a plan, fund, or program of
employee benefits as defined in 29 U.S.C. Section 1002 of the Employee
Retirement Income Security Act.
(11)
"Family member" means, with respect to an individual, any other
individual who is a first-degree, second-degree, third-degree, or fourth-degree
relative of the individual.
(12)
"Genetic information" means except for information relating to the
sex or age:
(a)
With respect to any individual:
1.
Information about the individual’s genetic tests, the genetic tests of family
members of the individual, and the manifestation of a disease or disorder in
family members of the individual; or
2.
Any request for, or receipt of, genetic services, or participation in clinical
research which includes genetic services, by the individual or any family
member of the individual.
(b)
Any reference to genetic information concerning an individual or family member
of an individual who is a pregnant woman, including:
1.
Genetic information of any fetus carried by a pregnant woman; or
2.
With respect to an individual or family member utilizing reproductive
technology, genetic information of any embryo legally held by an individual or
family member.
(13)
"Genetic services" means a genetic test, genetic counseling (including
obtaining, interpreting, or assessing genetic information), or genetic
education.
(14)
"Genetic test":
(a)
Means an analysis of human DNA, RNA, chromosomes, proteins, or metabolites,
that detect genotypes, mutations, or chromosomal changes;
(b)
Except for an analysis of proteins or metabolites that does not detect
genotypes, mutations, or chromosomal changes; or an analysis of proteins or
metabolites that is directly related to a manifested disease, disorder, or
pathological condition that may reasonably be detected by a health care
professional with appropriate training and expertise in the field of medicine
involved.
(15)
"Grievance" means dissatisfaction expressed in writing by an
individual insured under a Medicare Select policy or certificate with the
administration, claims practices, or provision of services concerning a
Medicare Select insurer or its network providers.
(16)
"Health care expenses" shall be defined as expenses of health
maintenance organizations associated with the delivery of health care services,
which expenses are analogous to incurred losses of insurers.
(17)
"Insolvency" is defined by KRS 304.33-030(18).
(18)
"Insurer" includes insurance companies, fraternal benefit societies,
health care service plans, health maintenance organizations, and any other
entity delivering or issuing for delivery in this state Medicare supplement
policies or certificates.
(19)
"Insurer of a Medicare supplement policy or certificate" means an
insurer or third-party administrator, or other person acting for or on behalf
of the insurer.
(20)
"Medicare" is defined by KRS 304.14-500(4).
(21)
"Medicare Advantage plan" means a plan of coverage for health
benefits under Medicare Part C as defined in 42 U.S.C. 1395w-28(b)(1), including:
(a)
A coordinated care plan, which provides health care services, including the
following:
1.
A health maintenance organization plan, with or without a point-of-service
option;
2.
A plan offered by provider-sponsored organization; and
3.
A preferred provider organization plan;
(b)
A medical savings account plan coupled with a contribution into a Medicare
Advantage plan medical savings account; and
(c)
A Medicare Advantage private fee-for-service plan.
(22)
"Medicare Select insurer" means an insurer offering, or seeking to
offer, a Medicare Select policy or certificate.
(23)
"Medicare Select policy" or "Medicare Select certificate" means,
respectively, a Medicare supplement policy or certificate that contains
restricted network provisions.
(24)
"Medicare supplement policy" is defined by KRS 304.14-500(3).
(25)
"Network provider" means a provider of health care, or a group of
providers of health care, which has entered into a written agreement with the insurer
to provide benefits insured under a Medicare Select policy.
(26)
"Pre-Standardized Medicare supplement benefit plan," "Pre-Standardized
benefit plan" or "Pre-Standardized plan" means a group or
individual policy of Medicare supplement insurance issued prior to January 1, 1992.
(27)
"Policy form" means the form on which the policy is delivered or
issued for delivery by the insurer.
(28)
"Restricted network provision" means any provision which conditions
the payment of benefits, in whole or in part, on the use of network providers.
(29)
"Secretary" means the Secretary of the U.S. Department of Health and
Human Services.
(30)
"Service area" means the geographic area approved by the commissioner
within which an insurer is authorized to offer a Medicare Select policy.
(31)
"Structure, language, and format" means style, arrangement and
overall content of a benefit.
(32)
"Underwriting purposes" means:
(a)
Rules for, or determination of, eligibility, including enrollment and continued
eligibility, for benefits under the policy;
(b)
The computation of premium or contribution amounts under the policy;
(c)
The application of any pre-existing condition exclusion under the policy; and
(d)
Other activities related to the creation, renewal, or replacement of a contract
of health insurance or health benefits.
(33)
"1990 Standardized Medicare supplement benefit plan," "1990
Standardized benefit plan" or "1990 plan" means a group or
individual policy of Medicare supplement insurance issued on or after January
1, 1992, with an effective date for coverage prior to June 1, 2010 including
Medicare supplement insurance policies and certificates renewed on or after
that date which are not replaced by the insurer at the request of the insured.
(34)
"2010 Standardized Medicare supplement benefit plan," "2010
Standardized benefit plan" or "2010 plan" means a group or
individual policy of Medicare supplement insurance issued with an effective
date for coverage on or after June 1, 2010.
Section
2. Purpose. The purpose of this administrative regulation shall be to:
(1)
Provide for the reasonable standardization of coverage and simplification of
terms and benefits of Medicare supplement policies;
(2)
Facilitate public understanding and comparison of the policies;
(3)
Eliminate provisions contained in the policies which may be misleading or
confusing in connection with the purchase of the policies or with the settlement
of claims; and
(4)
Provide for full disclosures in the sale of accident and sickness insurance coverage
to persons eligible for Medicare.
Section
3. Applicability and Scope. (1) Except as provided in Sections 6, 14, 15, 18,
and 23, the requirements of this administrative regulation shall apply to:
(a)
All Medicare supplement policies delivered or issued for delivery in Kentucky
on or after the effective date of this administrative regulation; and
(b)
All certificates issued under group Medicare supplement policies, which
certificates have been delivered or issued for delivery in Kentucky.
(2)
This administrative regulation shall not apply to a policy or contract:
(a)
Of one (1) or more employers or labor organizations, or of the trustees of a
fund established by one or more employers or labor organizations, or
combination thereof;
(b)
For employees or former employees, or a combination thereof; or
(c)
For members or former members, or a combination thereof, of the labor
organizations.
Section
4. Policy Definitions and Terms. A policy or certificate shall not be
advertised, solicited, or issued for delivery in this state as a Medicare
supplement policy or certificate unless the policy or certificate contains
definitions or terms that conform to this section.
(1)
"Accident", "accidental injury", or "accidental means"
shall be defined to employ "result" language and shall not include
words that establish an accidental means test or use words including "external,
violent, visible wounds" or similar words of description or characterization.
(a)
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 result of an accident,
independent of disease or bodily infirmity or any other cause, and occurs while
insurance coverage is in force."
(b)
The definition may provide that injuries shall not include injuries for which
benefits are provided or available under any workers’ compensation, employer’s
liability or similar law, or motor vehicle no-fault plan, unless the definition
is prohibited by law.
(2)
"Activities of daily living" shall include bathing, dressing, personal
hygiene, transferring, eating, ambulating, assistance with drugs that are
normally self-administered, and changing bandages or other dressings.
(3)
"At-home recovery visit" shall mean the period of a visit required to
provide at home recovery care, without limit on the duration of the visit,
except each consecutive four (4) hours in a twenty-four-hour period of services
provided by a care provider shall be one visit.
(4)
"Benefit period" or "Medicare benefit period" shall not be
defined more restrictively than as defined in the Medicare program.
(5)
"Care provider" shall mean a duly qualified or licensed home health
aide or homemaker, personal care aide or nurse provided through a licensed home
health care agency or referred by a licensed referral agency or licensed nurses
registry.
(6)
"Convalescent nursing home", "extended care facility", or "skilled
nursing facility" shall not be defined more restrictively than as defined
in the Medicare program.
(7)
"Emergency care" shall mean care needed immediately because of an
injury or an illness of sudden and unexpected onset.
(8)
"Home" shall mean any place used by the insured as a place of
residence, if the place would qualify as a residence for home health care
services covered by Medicare. A hospital or skilled nursing facility shall not
be considered the insured’s place of residence.
(9)
"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, but shall not be defined more restrictively than as
defined in the Medicare program.
(10)
"Medicare" shall be defined in the policy and certificate. 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 Law 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.
(11)
"Medicare eligible expenses" shall mean expenses of the kinds covered
by Medicare Parts A and B, to the extent recognized as reasonable and medically
necessary by Medicare.
(12)
"Physician" shall not be defined more restrictively than as defined
in the Medicare program.
(13)
"Preexisting condition" shall not be defined more restrictively than
a condition for which medical advice was given or treatment was recommended by
or received from a physician within six (6) months before the effective date of
coverage.
(14)
"Sickness" shall not be defined to be more restrictive than the
following: "Sickness means illness or disease of an insured person which
first manifests itself after the effective date of insurance and while the
insurance is in force." The definition may be further modified to exclude
sicknesses or diseases for which benefits are provided under any workers’
compensation, occupational disease, employer’s liability, or similar law.
Section
5. Policy Provisions. (1) Except for permitted preexisting condition clauses as
described in Sections 6(2)(a), 7(1)(a), and 8(1)(a) of this administrative regulation,
a policy or certificate shall not be advertised, solicited, or issued for delivery
in this state as a Medicare supplement policy if the policy or certificate
contains limitations or exclusions on coverage that are more restrictive than
those of Medicare.
(2)
A Medicare supplement policy or certificate shall not:
(a)
Contain a probationary or elimination period; or
(b)
Use waivers to exclude, limit, or reduce coverage or benefits for specifically
named or described preexisting diseases or physical conditions.
(3)
A Medicare supplement policy or certificate in force in the state shall not
contain benefits that duplicate benefits provided by Medicare.
(4)(a)
Subject to Sections 6(2)(d), (e), and (g), and 7(1)(d) and (e) of this administrative
regulation, a Medicare supplement policy with benefits for outpatient
prescription drugs in existence prior to January 1, 2006, shall be renewed for
current policyholders who do not enroll in Part D at the option of the policyholder.
(b)
A Medicare supplement policy with benefits for outpatient prescription drugs
shall not be issued after December 31, 2005.
(c)
After December 31, 2005, a Medicare supplement policy with benefits for
outpatient prescription drugs may not be renewed after the policyholder enrolls
in Medicare Part D unless:
1.
The policy is modified to eliminate outpatient prescription coverage for expenses
of outpatient prescription drugs incurred after the effective date of the
individual’s coverage under a Part D plan; and
2.
Premiums are adjusted to reflect the elimination of outpatient prescription
drug coverage at Medicare Part D enrollment, accounting for any claims paid, if
applicable.
Section
6. Minimum Benefit Standards for Pre-Standardized Medicare Supplement Benefit
Plan Policies or Certificates Issued for Delivery Prior to January 1, 1992.
(1)
A policy or certificate shall not be advertised, solicited, or issued for
delivery in Kentucky as a Medicare supplement policy or certificate unless it
meets or exceeds the following minimum standards, which shall not preclude the
inclusion of other provisions or benefits which are not inconsistent with these
standards.
(2)
General standards. The following standards shall apply to Medicare supplement
policies and certificates and are in addition to all other requirements of this
administrative regulation.
(a)
A Medicare supplement policy or certificate shall not exclude or limit benefits
for losses incurred more than six (6) months from the effective date of
coverage because it involved a preexisting condition and the policy or
certificate shall not define a preexisting condition more restrictively than Section
4(13) of this administrative regulation.
(b)
A Medicare supplement policy or certificate shall not indemnify against losses
resulting from sickness on a different basis than losses resulting from
accidents.
(c)
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 the changes.
(d)
A "noncancellable," "guaranteed renewable," or "noncancellable
and guaranteed renewable" Medicare supplement policy shall not:
1.
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; or
2.
Be cancelled or nonrenewed by the insurer solely on the grounds of
deterioration of health.
(e)1.
An insurer shall not cancel or nonrenew a Medicare supplement policy or
certificate for any reason other than nonpayment of premium or material
misrepresentation.
2.
If a group Medicare supplement insurance policy is terminated by the group
policyholder and not replaced as provided in paragraph (e)4 of this subsection,
the insurer shall offer certificate holders an individual Medicare supplement
policy with at least the following choices:
a.
An individual Medicare supplement policy currently offered by the insurer
having comparable benefits to those contained in the terminated group Medicare
supplement policy; and
b.
An individual Medicare supplement policy which provides the benefits as are
required to meet the minimum standards as defined in Section 8(2) of this administrative
regulation.
3.
If membership in a group is terminated, the insurer shall:
a.
Offer the certificate holder the conversion opportunities described in subparagraph
2 of this paragraph; or
b.
At the option of the group policyholder, offer the certificate holder
continuation of coverage under the group policy.
4.
If a group Medicare supplement policy is replaced by another group Medicare
supplement policy purchased by the same policyholder, the insurer of the
replacement policy shall offer coverage to all persons covered under the old group
policy on its date of termination, and coverage under the new group policy
shall not result in any exclusion for preexisting conditions that would have
been covered under the group policy being replaced.
(f)
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 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 shall not be considered
in determining a continuous loss.
(g)
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, Pub. L. 108-173, the modified
policy shall satisfy the guaranteed renewal requirements of this subsection.
(3)
Minimum benefit standards.
(a)
Coverage of Part A Medicare eligible expenses for hospitalization to the extent
not covered by Medicare from the 61st day through the 90th day in any Medicare
benefit period;
(b)
Coverage for either all or none of the Medicare Part A inpatient hospital
deductible amount;
(c)
Coverage of Part A Medicare eligible expenses incurred as daily hospital
charges during use of Medicare’s lifetime hospital inpatient reserve days;
(d)
Upon exhaustion of all Medicare hospital inpatient coverage including the
lifetime reserve days, coverage of ninety (90) percent of all Medicare Part A
eligible expenses for hospitalization not covered by Medicare subject to a
lifetime maximum benefit of an additional 365 days;
(e)
Coverage under Medicare Part A for the reasonable cost of the first three (3)
pints of blood, or equivalent quantities of packed red blood cells, pursuant to
42 C.F.R. 409.87(a)(2), unless replaced in accordance with 42 C.F.R.
409.87(c)(2) or already paid for under Part B;
(f)
Coverage for the coinsurance amount, or in the case of hospital outpatient
department services paid under a prospective payment system, the copayment
amount, of Medicare eligible expenses under Part B regardless of hospital
confinement, subject to a maximum calendar year out-of-pocket amount equal to
the Medicare Part B deductible;
(g)
Effective January 1, 1990, coverage under Medicare Part B for the reasonable
cost of the first three (3) pints of blood, or equivalent quantities of packed
red blood cells, pursuant to 42 C.F.R. 409.87(a)(2), unless replaced in
accordance with 42 C.F.R. 409.87(c)(2) or already paid for under Part A,
subject to the Medicare deductible amount.
Section
7. Benefit Standards for 1990 Standardized Medicare Supplement Benefit Plan and
Policies or Certificates Issued or Delivered on or After January 1, 1992, and With
an Effective Date for Coverage Prior to June 1, 2010. The following standards shall
apply to all Medicare supplement policies or certificates delivered or issued
for delivery in Kentucky on or after January 1, 1992, and with an effective
date for coverage prior to June 1, 2010. A policy or certificate shall not be
advertised, solicited, delivered or issued for delivery in this state as a
Medicare supplement policy or certificate unless it complies with these benefit
standards.
(1)
General Standards. The following standards shall apply to Medicare supplement
policies and certificates and are in addition to all other requirements of this
administrative regulation.
(a)
A Medicare supplement policy or certificate shall not exclude or limit benefits
for losses incurred more than six (6) months from the effective date of
coverage because it involved a preexisting condition and the policy or
certificate shall not define a preexisting condition more restrictively than
section 4(13).
(b)
A Medicare supplement policy or certificate shall not:
1.
Contain a probationary or elimination period; or
2.
Indemnify against losses resulting from sickness on a different basis than
losses resulting from accidents.
(c)
A Medicare supplement policy or certificate shall provide that benefits
designed to cover cost sharing amounts under Medicare shall be changed
automatically to coincide with any changes in the applicable Medicare
deductible, copayment, or coinsurance amounts. Premiums may be modified to
correspond with the changes.
(d)
A Medicare supplement policy or certificate shall 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.
(e)
Each Medicare supplement policy shall be guaranteed renewable.
1.
The insurer shall not cancel or nonrenew the policy solely on health status of
the individual.
2.
The insurer shall not cancel or nonrenew the policy for any reason other than
nonpayment of premium or material misrepresentation.
3.
If the Medicare supplement policy is terminated by the group policyholder and
is not replaced as provided under Section 7(1)(e)5 of this administrative
regulation, the insurer shall offer certificate holders an option to choose an
individual Medicare supplement policy which, at the option of the certificate
holder:
a.
Provides for continuation of the benefits contained in the group policy; or
b.
Provides for benefits that meet the requirements of this subsection.
4.
If an individual is a certificate holder in a group Medicare supplement policy
and the individual terminates membership in the group, the insurer shall:
a.
Offer the certificate holder the conversion opportunity described in Section
7(1)(e)3 of this administrative regulation; or
b.
At the option of the group policyholder, offer the certificate holder
continuation of coverage under the group policy.
5.
If a group Medicare supplement policy is replaced by another group Medicare
supplement policy purchased by the same policyholder, the insurer 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.
6.
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, Pub. L. 108-173, the modified policy
shall satisfy the guaranteed renewal requirements of this paragraph.
(f)
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.
(g)1.
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 certificate holder for the period, not to exceed
twenty-four (24) months, in which the policyholder or certificate holder has applied
for and is determined to be entitled to medical assistance under Title XIX of
the Social Security Act, 42 U.S.C. 1396 et seq., but only if the policyholder
or certificate holder notifies the insurer of the policy or certificate within
ninety (90) days after the date the individual becomes entitled to assistance.
2.
If suspension occurs and if the policyholder or certificate holder loses
entitlement to medical assistance, the policy or certificate shall be
automatically reinstituted, effective as of the date of termination of
entitlement, as of the termination of entitlement if the policyholder or
certificate holder provides notice of loss of entitlement within ninety (90)
days after the date of loss and pays the premium attributable to the period,
effective as of the date of termination of entitlement.
3.
Each Medicare supplement policy shall provide that benefits and premiums under
the policy shall be suspended, for any period that may be provided by 42 U.S.C.
1395ss(q)(5), 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. 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. 1395Y(b)(1)(A)(v). If
suspension occurs and if the policyholder or certificate holder 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 ninety (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.
4.
Reinstitution of coverages as described in subparagraphs 2 and 3 of this
paragraph:
a.
Shall not provide for any waiting period with respect to treatment of
preexisting conditions;
b.
Shall provide for resumption of coverage that is substantially equivalent to
coverage in effect before the date of 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 provide substantially
equivalent coverage to the coverage in effect before the date of suspension;
and
c.
Shall provide for classification of premiums on terms at least as favorable to
the policyholder or certificate holder as the premium classification terms that
would have applied to the policyholder or certificate holder had the coverage
not been suspended.
(h)
If an insurer makes a written offer to the Medicare Supplement policyholders or
certificate holders of one or more of its plans, to exchange during a specified
period from his or her 1990 Standardized plan, as described in Section 9 of
this administrative regulation, to a 2010 Standardized plan, as described in
Section 10 of this administrative regulation, the offer and subsequent exchange
shall comply with the following requirements:
1.
An insurer shall not be required to provide justification to the commissioner
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. If an insured’s policy or certificate to be replaced is priced on an
issue age rate schedule at 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 an insurer shall be filed with
the commissioner in accordance with KRS 304.14-120 and 806 KAR 14:007;
2.
The rating class of the new policy or certificate shall be the class closest to
the insured’s class of the replaced coverage.
3.
An insurer may not apply new pre-existing 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
pre-existing condition limitations of no more than six (6) months to any added
benefits contained in the new 2010 Standardized policy or certificate not contained
in the exchanged policy.
4.
The new policy or certificate shall be offered to all policyholders or
certificate holders within a given plan, except if the offer or issue would be
in violation of state or federal law.
5.
An insurer may offer its policyholders or certificate holders the following
exchange options:
a.
Selected existing plans; or
b.
Certain new plans for a particular existing plan.
(2)
Standards for basic (core) benefits common to benefit plans A to J. Every insurer
shall make available a policy or certificate including at a minimum the
following basic "core" package of benefits to each prospective
insured. An insurer may make available to prospective insureds any of the other
Medicare Supplement Insurance Benefit Plans in addition to the basic core package,
but not in lieu of it.
(a)
Coverage of Part A Medicare eligible expenses for hospitalization to the extent
not covered by Medicare from the 61st day through the 90th day in any Medicare
benefit period;
(b)
Coverage of Part A Medicare eligible expenses incurred for hospitalization to
the extent not covered by Medicare for each Medicare lifetime inpatient reserve
day used;
(c)
Upon exhaustion of the Medicare hospital inpatient coverage, including the
lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible
expenses for hospitalization paid at the applicable prospective payment system
(PPS) rate, or other appropriate Medicare standard of payment, subject to a
lifetime maximum benefit of an additional 365 days;
(d)
Coverage under Medicare Parts A and B for the reasonable cost of the first
three (3) pints of blood, or equivalent quantities of packed red blood cells, pursuant
to 42 C.F.R. 409.87(a)(2), unless replaced in accordance with 42 C.F.R.
409.87(c)(2); and
(e)
Coverage for the coinsurance amount or for hospital outpatient department
services paid under a prospective payment system, the copayment amount, of
Medicare eligible expenses under Part B regardless of hospital confinement, subject
to the Medicare Part B deductible;
(3)
Standards for Additional Benefits. The following additional benefits shall be
included in Medicare Supplement Benefit Plans "B" through "J"
only as provided by Section 9 of this administrative regulation:
(a)
Medicare Part A Deductible, which is coverage for all of the Medicare Part A
inpatient hospital deductible amount per benefit period.
(b)
Skilled Nursing Facility Care, which is coverage for the actual billed charges
up to the coinsurance amount from the 21st day through the 100th day in a
Medicare benefit period for posthospital skilled nursing facility care eligible
under Medicare Part A.
(c)
Medicare Part B Deductible, which is coverage for all of the Medicare Part B
deductible amount per calendar year regardless of hospital confinement.
(d)
Eighty (80) Percent of the Medicare Part B Excess Charges, which is coverage
for eighty (80) percent of the difference between the actual Medicare Part B
charge as billed, not to exceed any charge limitation established by the
Medicare program, and the Medicare-approved Part B charge.
(e)
100 Percent of the Medicare Part B Excess Charges, which is coverage for all of
the difference between the actual Medicare Part B charges as billed, not to
exceed any charge limitation established by the Medicare Program or state law,
and the Medicare-approved Part B charge.
(f)
Basic Outpatient Prescription Drug Benefit which is coverage for fifty (50) percent
of outpatient prescription drug charges, after a $250 calendar year deductible,
to a maximum of $1,250 in benefits received by the insured per calendar year,
to the extent not covered by Medicare. The outpatient prescription drug benefit
may be included for sale or issuance in a Medicare supplement policy until
January 1, 2006.
(g)
Extended Outpatient Prescription Drug Benefit, which is coverage for fifty (50)
percent of outpatient prescription drug charges, after a $250 calendar year
deductible to a maximum of $3,000 in benefits received by the insured per
calendar year, to the extent not covered by Medicare. The outpatient
prescription drug benefit may be included for sale or issuance in a Medicare
supplement policy until January 1, 2006.
(h)
Medically Necessary Emergency Care in a Foreign Country, which is coverage to
the extent not covered by Medicare for eighty (80) percent of the billed
charges for Medicare eligible expenses for medically necessary emergency
hospital, physician and medical care received in a foreign country, which care
would have been covered by Medicare if provided in the United States and which
care began during the first sixty (60) consecutive days of each trip outside
the United States, subject to a calendar year deductible of $250, and a
lifetime maximum benefit of $50,000.
(i)1.
Preventive Medical Care Benefit, which is coverage for the following preventive
health services not covered by Medicare:
a.
An annual clinical preventive medical history and physical examination that may
include tests and services from subparagraph 2 of this paragraph and patient
education to address preventive health care measures;
b.
Preventive screening tests or preventive services, the selection and frequency
of which are determined to be medically appropriate by the attending physician.
2.
Reimbursement shall be for the actual charges up to 100 percent of the Medicare
approved amount for each service, as if Medicare were to cover the service as
identified in American Medical Association Current Procedural Terminology (AMA
CPT) codes, to a maximum of $120 annually under this benefit. This benefit
shall not include payment for any procedure covered by Medicare.
(j)
At-Home Recovery Benefit, which is coverage for services to provide short term,
at-home assistance with activities of daily living for those recovering from an
illness, injury or surgery.
1.
Coverage requirements and limitations.
a.
At-home recovery services provided shall be primarily services which assist in
activities of daily living.
b.
The insured’s attending physician shall certify that the specific type and
frequency of at-home recovery services are necessary because of a condition for
which a home care plan of treatment was approved by Medicare.
c.
Coverage is limited to:
(i)
No more than the number and type of at-home recovery visits certified as
necessary by the insured’s attending physician. The total number of at-home
recovery visits shall not exceed the number of Medicare-approved home health
care visits under a Medicare-approved home care plan of treatment;
(ii)
The actual charges for each visit up to a maximum reimbursement of forty (40)
dollars per visit;
(iii)
$1,600 per calendar year;
(iv)
Seven (7) visits in any one (1) week;
(v)
Care furnished on a visiting basis in the insured’s home;
(vi)
Services provided by a care provider as described in Section 4(5) of this
administrative regulation;
(vii)
At-home recovery visits while the insured is covered under the policy or
certificate and not excluded;
(viii)
At-home recovery visits received during the period the insured is receiving
Medicare-approved home care services or no more than eight (8) weeks after the
service date of the last Medicare-approved home health care visit.
3.
Coverage is excluded for:
a.
Home care visits paid for by Medicare or other government programs; and
b.
Care provided by family members, unpaid volunteers, or providers who are not
care providers.
(4)
Standards for Plans K and L.
(a)
Standardized Medicare supplement benefit plan "K" shall consist of
the following:
1.
Coverage of 100 percent of the Part A hospital coinsurance amount for each day
used from the 61st through the 90th day in any Medicare benefit period;
2.
Coverage of 100 percent of the Part A hospital coinsurance amount for each
Medicare lifetime inpatient reserve day used from the 91st through the 150th
day in any Medicare benefit period;
3.
Upon exhaustion of the Medicare hospital inpatient coverage, including the
lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible
expenses for hospitalization paid at the applicable prospective payment system
(PPS) rate, or other appropriate Medicare standard of payment, subject to a
lifetime maximum benefit of an additional 365 days.
4.
Medicare Part A Deductible, which is coverage for fifty (50) percent of the
Medicare Part A inpatient hospital deductible amount per benefit period until
the out-of-pocket limitation is met as described in subparagraph 10 of this
paragraph;
5.
Skilled Nursing Facility Care, which is coverage for fifty (50) percent of the
coinsurance amount for each day used from the 21st day through the 100th day in
a Medicare benefit period for posthospital skilled nursing facility care
eligible under Medicare Part A until the out-of-pocket limitation is met as
described in subparagraph 10 of this paragraph;
6.
Hospice Care, which is coverage for fifty (50) percent of cost sharing for all
Part A Medicare eligible expenses and respite care until the out-of-pocket
limitation is met as described in Subparagraph 10 of this paragraph;
7.
Coverage for fifty (50) percent, under Medicare Part A or B, of the reasonable
cost of the first three (3) pints of blood (or equivalent quantities of packed
red blood cells, pursuant to 42 C.F.R. 409.87(a)(2), unless replaced in
accordance with 42 C.F.R. 409.87(c)(2), until the out-of-pocket limitation is
met as described in subparagraph 10 of this paragraph;
8.
Except for coverage provided in subparagraph 9 of this paragraph, coverage for
fifty (50) percent of the cost sharing applicable under Medicare Part B after
the policyholder pays the Part B deductible until the out-of-pocket limitation
is met as described in subparagraph 10 of this paragraph;
9.
Coverage of 100 percent of the cost sharing for Medicare Part B preventive
services after the policyholder pays the Part B deductible; and
10.
Coverage of 100 percent of all cost sharing under Medicare Parts A and B for
the balance of the calendar year after the individual has reached the
out-of-pocket limitation on annual expenditures under Medicare Parts A and B of
$4000 in 2006, indexed each year by the appropriate inflation adjustment specified
by the secretary.
(b)
Standardized Medicare supplement benefit plan "L" shall consist of
the following:
1.
The benefits described in paragraph (a)1, 2, 3, and 9 of this section;
2.
The benefit described in paragraph (a)4, 5, 6, 7, and 8 of this section, but substituting
seventy-five (75) percent for fifty (50) percent; and
3.
The benefit described in paragraph (a)10 of this section, but substituting
$2000 for $4000.
Section
8. Benefit Standards for 2010 Standardized Medicare Supplement Benefit Plan Policies
or Certificates Issued for Delivery with an Effective Date for Coverage on or
After June 1, 2010.
The
following standards are applicable to all Medicare supplement policies or
certificates delivered or issued for delivery in Kentucky with an effective
date for coverage on or after June 1, 2010. A policy or certificate shall not
be advertised, solicited, delivered, or issued for delivery in Kentucky as a
Medicare supplement policy or certificate unless it complies with these benefit
standards. An insurer shall not offer any 1990 Standardized Medicare supplement
benefit plan for sale on or after June 1, 2010. Benefit standards applicable to
Medicare supplement policies and certificates issued before June 1, 2010,
remain subject to the requirements of Sections 7 and 9 of this administrative
regulation.
(1)
General Standards. The following standards shall apply to Medicare supplement
policies and certificates and shall be in addition to all other requirements of
this regulation.
(a)
A Medicare supplement policy or certificate shall not exclude or limit benefits
for losses incurred more than six (6) months from the effective date of
coverage because it involved a preexisting condition.
(b)
A Medicare supplement policy or certificate shall not indemnify against losses
resulting from sickness on a different basis than losses resulting from
accidents.
(c)
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 changes.
(d)
A Medicare supplement policy or certificate shall not provide for termination
of coverage of a spouse solely because of the occurrence specified for
termination of coverage of the insured, other than the nonpayment of premium.
(e)
Each Medicare supplement policy shall be guaranteed renewable.
1.
The insurer shall not cancel or nonrenew the policy solely health status of the
individual.
2.
The insurer shall not cancel or nonrenew the policy for any reason other than
nonpayment of premium or material misrepresentation.
3.
If the Medicare supplement policy is terminated by the group policyholder and
is not replaced as provided under subsection (1)(e)5 of this section, the insurer
shall offer certificate holders an individual Medicare supplement policy which,
at the option of the certificate holder:
a.
Provides for continuation of the benefits contained in the group policy; or
b.
Provides for benefits that meet the requirements of this Subsection.
4.
If an individual is a certificate holder in a group Medicare supplement policy
and the individual terminates membership in the group, the insurer shall:
a.
Offer the certificate holder the conversion opportunity described in subsection
(1)(e)5 of this section; or
b.
At the option of the group policyholder, offer the certificate holder
continuation of coverage under the group policy.
5.
If a group Medicare supplement policy is replaced by another group Medicare
supplement policy purchased by the same policyholder, the insurer 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)
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 shall not be considered
in determining a continuous loss.
(g)
1. 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 certificate holder for the period, not to exceed
twenty-four (24) months, in which the policyholder or certificate holder has applied
for and is determined to be entitled to medical assistance under Title XIX of
the Social Security Act, 42 U.S.C. 1396 et seq., but only if the policyholder
or certificate holder notifies the insurer of the policy or certificate within
ninety (90) days after the date the individual becomes entitled to assistance.
2.
If suspension occurs and if the policyholder or certificate holder loses
entitlement to medical assistance, the policy or certificate shall be
automatically reinstituted, effective as of the date of termination of
entitlement, as of the termination of entitlement if the policyholder or
certificate holder provides notice of loss of entitlement within ninety (90)
days after the date of loss and pays the premium attributable to the period,
effective as of the date of termination of entitlement.
3.
Each Medicare supplement policy shall provide that benefits and premiums under
the policy shall be suspended, for any period that may be provided by 42 U.S.C.
1395ss(q)(5)(A), 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. 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. 1395Y(b)(1)(A)(v). If
suspension occurs and if the policyholder or certificate holder 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 ninety (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.
4.
Reinstitution of coverages as described in subparagraphs 2 and 3 of this
paragraph shall:
a.
Not provide for any waiting period with respect to treatment of preexisting
conditions;
b.
Provide for resumption of coverage that is substantially equivalent to coverage
in effect before the date of suspension; and
c.
Provide for classification of premiums on terms at least as favorable to the
policyholder or certificate holder as the premium classification terms that
would have applied to the policyholder or certificate holder had the coverage
not been suspended.
(2)
Standards for Basic (Core) Benefits Common to Medicare Supplement Insurance
Benefit Plans A, B, C, D, F, High Deductible F, G, M and N. Every insurer of
Medicare supplement insurance benefit plans shall make available a policy or
certificate including, at a minimum, the following basic "core"
package of benefits to each prospective insured. An insurer may make available
to prospective insureds any of the other Medicare Supplement Insurance Benefit
Plans in addition to the basic core package, but not in lieu of it.
(a)
Coverage of Part A Medicare eligible expenses for hospitalization to the extent
not covered by Medicare from the 61st day through the 90th day in any Medicare
benefit period;
(b)
Coverage of Part A Medicare eligible expenses incurred for hospitalization to
the extent not covered by Medicare for each Medicare lifetime inpatient reserve
day used;
(c)
Upon exhaustion of the Medicare hospital inpatient coverage, including the
lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible
expenses for hospitalization paid at the applicable prospective payment system
(PPS) rate, or other appropriate Medicare standard of payment, subject to a
lifetime maximum benefit of an additional 365 days;
(d)
Coverage under Medicare Parts A and B for the reasonable cost of the first
three (3) pints of blood, or equivalent quantities of packed red blood cells, pursuant
to 42 C.F.R. 409.87(a)(2), unless replaced in accordance with 42 C.F.R.
409.87(c)(2);
(e)
Coverage for the coinsurance amount, or for hospital outpatient department
services paid under a prospective payment system, the copayment amount, of
Medicare eligible expenses under Part B regardless of hospital confinement, subject
to the Medicare Part B deductible;
(f)
Hospice Care, which is coverage of cost sharing for all Part A Medicare eligible
hospice care and respite care expenses.
(3)
Standards for Additional Benefits. The following additional benefits shall be
included in Medicare supplement benefit Plans B, C, D, F, High Deductible F, G,
M, and N as provided by Section 10 of this administrative regulation.
(a)
Medicare Part A Deductible, which is coverage for 100 percent of the Medicare
Part A inpatient hospital deductible amount per benefit period.
(b)
Medicare Part A Deductible, which is coverage for fifty (50) percent of the
Medicare Part A inpatient hospital deductible amount per benefit period.
(c)
Skilled Nursing Facility Care, which is coverage for the actual billed charges
up to the coinsurance amount from the 21st day through the 100th day in a
Medicare benefit period for posthospital skilled nursing facility care eligible
under Medicare Part A.
(d)
Medicare Part B Deductible, which is coverage for 100 percent of the Medicare
Part B deductible amount per calendar year regardless of hospital confinement.
(e)
100 percent of the Medicare Part B Excess Charges, which is coverage for the
difference between the actual Medicare Part B charges as billed, not to exceed
any charge limitation established by the Medicare program, and the
Medicare-approved Part B charge.
(f)
Medically Necessary Emergency Care in a Foreign Country, which is coverage to
the extent not covered by Medicare for eighty (80) percent of the billed
charges for Medicare-eligible expenses for medically necessary emergency
hospital, physician and medical care received in a foreign country, which care
would have been covered by Medicare if provided in the United States and which
care began during the first sixty (60) consecutive days of each trip outside
the United States, subject to a calendar year deductible of $250, and a
lifetime maximum benefit of $50,000.
Section
9. Standard Medicare Supplement Benefit Plans for 1990 Standardized Medicare
Supplement Benefit Plan Policies or Certificates Issued for Delivery on or
After January 1, 1992, and with an Effective Date for Coverage Prior to June 1,
2010. (1) An insurer shall make available to each prospective policyholder and
certificate holder a policy form or certificate form containing only the basic
core benefits, as defined in Section 7(2) of this administrative regulation.
(2)
Groups, packages or combinations of Medicare supplement benefits other than
those listed in this section shall not be offered for sale in Kentucky, except
as may be permitted in Section 9(7) and 11 of this administrative regulation.
(3)
Benefit plans shall be uniform in structure, language, designation, and format
to the standard benefit plans "A" through "L" listed in
this section and conform to the definitions in Section 1 of this administrative
regulation. Each benefit shall be structured in accordance with the format
provided in Sections 7(2) and 7(3) or 7(4) and shall list the benefits in the
order shown in this section.
(4)
An insurer may use, in addition to the benefit plan designations required in
Subsection (3) of this section, other designations to the extent permitted by
law.
(5)
Make-up of benefit plans:
(a)
Standardized Medicare supplement benefit Plan "A" shall be limited to
the basic (core) benefits common to all benefit plans, as described in Section 7(2)
of this administrative regulation.
(b)
Standardized Medicare supplement benefit Plan "B" shall include only
the following: The core benefit as described in Section 7(2) of this
administrative regulation, plus the Medicare Part A deductible as described in
Section 7(3)(a).
(c)
Standardized Medicare supplement benefit Plan "C" shall include only
the following: The core benefit as described in Section 7(2) of this administrative
regulation, plus the Medicare Part A deductible, skilled nursing facility care,
Medicare Part B deductible and medically necessary emergency care in a foreign
country as described in Sections 7(3)(a), (b), (c), and (h) respectively.
(d)
Standardized Medicare supplement benefit Plan "D" shall include only
the following: The core benefit, as described in Section 7(2) of this administrative
regulation, plus the Medicare Part A deductible, skilled nursing facility care,
medically necessary emergency care in an foreign country and the at-home
recovery benefit as described in Sections 7(3)(a), (b), (h), and (j) respectively.
(e)
Standardized Medicare supplement benefit Plan "E" shall include only
the following: The core benefit as described in Section 7(2) of this administrative
regulation, plus the Medicare Part A deductible, skilled nursing facility care,
medically necessary emergency care in a foreign country and preventive medical
care as described in Sections 7(3)(a), (b), (h), and (i) respectively.
(f)
Standardized Medicare supplement benefit Plan "F" shall include only
the following: The core benefit as described in Section 7(2) of this administrative
regulation, plus the Medicare Part A deductible, the skilled nursing facility
care, the Medicare Part B deductible, 100 percent of the Medicare Part B excess
charges, and medically necessary emergency care in a foreign country as described
in Section 7(3)(a), (b), (c), (e), and (h) respectively.
(g)
Standardized Medicare supplement benefit high deductible Plan "F"
shall include only the following: 100 percent of covered expenses following the
payment of the annual high deductible Plan "F" deductible. The
covered expenses include the core benefits as described in Section 7(2) of this
administrative regulation, plus the Medicare Part A deductible, skilled nursing
facility care, the Medicare Part B deductible, 100 percent of the Medicare Part
B excess charges, and medically necessary emergency care in a foreign country
as described in Section 7(3)(a), (b), (c), (e), and (h) respectively. The
annual high deductible Plan "F" deductible shall consist of
out-of-pocket expenses, other than premiums, for services covered by the
Medicare supplement Plan "F" policy, and shall be in addition to any
other specific benefit deductibles. The annual high deductible Plan "F"
deductible shall be $1,500 for 1998 and 1999, and shall be based on the
calendar year. It shall be adjusted annually thereafter by the secretary to
reflect the change in the Consumer Price Index for all urban consumers for the
twelve-month period ending with August of the preceding year, and rounded to
the nearest multiple of ten (10) dollars.
(h)
Standardized Medicare supplement benefit Plan "G" shall include only
the following: The core benefit as described in Section 7(2) of this administrative
regulation, plus the Medicare Part A deductible, skilled nursing facility care,
eighty (80) percent of the Medicare Part B excess charges, medically necessary
emergency care in a foreign country, and the at-home recovery benefit as described
in Section 7(3)(a), (b), (d), (h), and (j) respectively.
(i)
Standardized Medicare supplement benefit Plan "H" shall consist of
only the following: The core benefit as described in Section 7(2) of this
administrative regulation, plus the Medicare Part A deductible, skilled nursing
facility care, basic prescription drug benefit and medically necessary
emergency care in a foreign country as described in Section 7(3)(a), (b), (f),
and (h) respectively. The outpatient prescription drug benefit shall not be
included in a Medicare supplement policy sold after December 31, 2005.
(j)
Standardized Medicare supplement benefit Plan "I" shall consist of
only the following: The core benefit as described in Section 7(2) of this
administrative regulation, plus the Medicare Part A deductible, skilled nursing
facility care, 100 percent of the Medicare Part B excess charges, basic
prescription drug benefit, medically necessary emergency care in a foreign
country and at-home recovery benefit as described in Section 7(3)(a), (b), (e),
(f), (h), and (j) respectively. The outpatient prescription drug benefit shall
not be included in a Medicare supplement policy sold after December 31, 2005.
(k)
Standardized Medicare supplement benefit Plan "J" shall consist of
only the following: The core benefit as described in Section 7(2) of this
administrative regulation, plus the Medicare Part A deductible, skilled nursing
facility care, Medicare Part B deductible, 100 percent of the Medicare Part B
excess charges, extended prescription drug benefit, medically necessary
emergency care in a foreign country, preventive medical care and at-home
recovery benefit as described in Section 7(3)(a), (b), (c), (e), (g), (h), (i),
and (j) respectively. The outpatient prescription drug benefit shall not be included
in a Medicare supplement policy sold after December 31, 2005.
(l)
Standardized Medicare supplement benefit high deductible Plan "J"
shall consist of only the following: 100 percent of covered expenses following
the payment of the annual high deductible Plan "J" deductible. The
covered expenses include the core benefits as described in Section 7(2) of this
administrative regulation, plus the Medicare Part A deductible, skilled nursing
facility care, Medicare Part B deductible, 100 percent of the Medicare Part B
excess charges, extended outpatient prescription drug benefit, medically
necessary emergency care in a foreign country, preventive medical care benefit
and at-home recovery benefit as described in Section 7(3)(a), (b), (c), (e), (g),
(h), (i) and (j) respectively. The annual high deductible Plan "J"
deductible shall consist of out-of-pocket expenses, other than premiums, for
services covered by the Medicare supplement Plan "J" policy, and
shall be in addition to any other specific benefit deductibles. The annual
deductible shall be $1500 for 1998 and 1999, and shall be based on a calendar
year. It shall be adjusted annually thereafter by the secretary to reflect the
change in the Consumer Price Index for all urban consumers for the twelve-month
period ending with August of the preceding year, and rounded to the nearest
multiple of ten (10) dollars. The outpatient prescription drug benefit shall
not be included in a Medicare supplement policy sold after December 31, 2005.
(6)
Design of two (2) Medicare supplement plans mandated by The Medicare
Prescription Drug, Improvement and Modernization Act of 2003 (MMA), Pub. L.
108-173;
(a)
Standardized Medicare supplement benefit plan "K" shall consist of
only those benefits described in Section 7(4)(a).
(b)
Standardized Medicare supplement benefit plan "L" shall consist of only
those benefits described in Section 7(4)(a).
(7)
New or Innovative Benefits: An insurer may, with the prior approval of the
commissioner, offer policies or certificates with new or innovative benefits in
addition to the benefits provided in a policy or certificate that complies with
the applicable standards. The new or innovative benefits may include benefits
that are appropriate to Medicare supplement insurance, new or innovative, not
available, cost-effective, and offered in a manner that is consistent with the
goal of simplification of Medicare supplement policies. After December 31,
2005, the innovative benefit shall not include an outpatient prescription drug
benefit.
Section
10. Standard Medicare Supplement Benefit Plans for 2010 Standardized Medicare
Supplement Benefit Plan Policies or Certificates with an Effective Date for
Coverage on or After June 1, 2010. The following standards are applicable to
all Medicare supplement policies or certificates with an effective date for
coverage in this state on or after June 1, 2010. A policy or certificate shall
not be advertised, solicited, delivered or issued for delivery in Kentucky as a
Medicare supplement policy or certificate unless it complies with these benefit
plan standards. Benefit plan standards applicable to Medicare supplement
policies and certificates issued before June 1, 2010, remain subject to the requirements
of Section 7 and 9 of this administrative regulation.
(1)(a)
An insurer shall make available to each prospective policyholder and
certificate holder a policy form or certificate form containing only the basic
(core) benefits, as described in Section 8(2) of this administrative
regulation.
(b)
If an insurer makes available any of the additional benefits described in
Section 8(3), or offers standardized benefit Plans K or L, as described in
Sections 10(5)(h) and (i) of this administrative regulation, then the insurer shall
make available to each prospective policyholder and certificate holder, in
addition to a policy form or certificate form with only the basic (core)
benefits as described in subsection (1) of this section, a policy form or
certificate form containing either standardized benefit Plan C, as described in
Section 10(5)(c) of this administrative regulation, or standardized benefit
Plan F, as described in 10(5)(e) of this administrative regulation.
(2)
Groups, packages or combinations of Medicare supplement benefits other than
those listed in this Section shall not be offered for sale in this state,
except as may be permitted in Section 10(6) and in Section 11 of this
administrative regulation.
(3)
Benefit plans shall be uniform in structure, language, designation and format
to the standard benefit plans listed in this Subsection and conform to the
definitions in Section 1 of this administrative regulation. Each benefit shall
be structured in accordance with the format provided in Sections 8(2) and 8(3)
of this administrative regulation; or, in the case of plans K or L, in Sections
10(5)(h) or (i) of this administrative regulation and list the benefits in the
order shown.
(4)
In addition to the benefit plan designations required in Subsection (3) of this
section, an insurer may use other designations if approved by the commissioner
in accordance with Subsection (6) of this Section.
(5)
2010 Standardized Benefit Plans:
(a)
Standardized Medicare supplement benefit Plan A shall include only the
following: The basic (core) benefits as described in Section 8(2) of this
administrative regulation.
(b) Standardized Medicare
supplement benefit Plan B shall include only the following: The basic (core)
benefit as described in Section 8(2) of this administrative regulation, plus 100
percent of the Medicare Part A deductible as described in section 8(3)(a) of
this administrative regulation.
(c)
Standardized Medicare supplement benefit Plan C shall include only the
following: The basic (core) benefit as described in Section 8(2) of this
administrative regulation, plus 100 percent of the Medicare Part A deductible,
skilled nursing facility care, 100 percent of the Medicare Part B deductible,
and medically necessary emergency care in a foreign country as described in section
8(3)(a), (c), (d), and (f) of this administrative regulation, respectively.
(d)
Standardized Medicare supplement benefit Plan D shall include only the
following: The basic (core) benefit, as described in Section 8(2) of this
administrative regulation, plus 100 percent of the Medicare Part A deductible,
skilled nursing facility care, and medically necessary emergency care in an
foreign country as described in Sections 8(3)(a), (c), and (f) of this administrative
regulation, respectively.
(e)
Standardized Medicare supplement Plan F shall include only the following: The
basic (core) benefit as described in Section 8(2) of this administrative regulation,
plus 100 percent of the Medicare Part A deductible, the skilled nursing
facility care, 100 percent of the Medicare Part B deductible, 100 percent of
the Medicare Part B excess charges, and medically necessary emergency care in a
foreign country as described in Sections 8(3)(a), (c), (d), (e), and (f),
respectively.
(f)
Standardized Medicare supplement Plan High Deductible F shall include only the
following: 100 percent of covered expenses following the payment of the annual deductible
set forth in Paragraph (f)2 of this subsection.
1.
The basic (core) benefit as described in Section 8(2) of this administrative regulation,
plus 100 percent of the Medicare Part A deductible, skilled nursing facility
care, 100 percent of the Medicare Part B deductible, 100 percent of the
Medicare Part B excess charges, and medically necessary emergency care in a
foreign country as described in Sections 8(3)(a), (c), (d), (e), and (f) of
this administrative regulation, respectively.
2.
The annual deductible in High Deductible Plan F shall consist of out-of-pocket
expenses, other than premiums, for services covered by Plan F, and shall be in
addition to any other specific benefit deductibles. The basis for the
deductible shall be $1,500 and shall be adjusted annually from 1999 by the
Secretary of the U.S. Department of Health and Human Services to reflect the
change in the Consumer Price Index for all urban consumers for the twelve (12) month
period ending with August of the preceding year, and rounded to the nearest
multiple of ten (10) dollars.
(g)
Standardized Medicare supplement benefit Plan G shall include only the
following: The basic (core) benefit as described in Section 8(2) of this
administrative regulation, plus 100 percent of the Medicare Part A deductible,
skilled nursing facility care, 100 percent of the Medicare Part B excess
charges, and medically necessary emergency care in a foreign country as described
in Sections 8(3)(a), (c), (e), and (f), respectively.
(h)
Standardized Medicare supplement Plan K is mandated by The Medicare
Prescription Drug, Improvement and Modernization Act of 2003, Pub. L. 108-173, and
shall include only the following:
1.
Part A Hospital Coinsurance 61st through 90th days: Coverage of 100 percent of
the Part A hospital coinsurance amount for each day used from the 61st through
the 90th day in any Medicare benefit period;
2.
Part A Hospital Coinsurance, 91st through 150th days: Coverage of 100 percent of
the Part A hospital coinsurance amount for each Medicare lifetime inpatient
reserve day used from the 91st through the 150th day in any Medicare benefit
period;
3.
Part A Hospitalization After 150 Days: Upon exhaustion of the Medicare hospital
inpatient coverage, including the lifetime reserve days, coverage of 100
percent of the Medicare Part A eligible expenses for hospitalization paid at
the applicable prospective payment system (PPS) rate, or other appropriate
Medicare standard of payment, subject to a lifetime maximum benefit of an
additional 365 days;
4.
Medicare Part A Deductible: Coverage for fifty (50) percent of the Medicare
Part A inpatient hospital deductible amount per benefit period until the
out-of-pocket limitation is met as described in subparagraph 10 of this
paragraph;
5.
Skilled Nursing Facility Care: Coverage for fifty (50) percent of the
coinsurance amount for each day used from the 21st day through the 100th day in
a Medicare benefit period for posthospital skilled nursing facility care
eligible under Medicare Part A until the out-of-pocket limitation is met as described
in subparagraph 10 of this paragraph;
6.
Hospice Care: Coverage for fifty (50) percent of cost sharing for all Part A
Medicare eligible expenses and respite care until the out-of-pocket limitation
is met as described in subparagraph 10 of this paragraph;
7.
Blood: Coverage for fifty (50) percent, under Medicare Part A or B, of the
reasonable cost of the first three (3) pints of blood, or equivalent quantities
of packed red blood cells, as described under 42 C.F.R. 409.87(a)(2) unless
replaced in accordance with 42 C.F.R. 409.87(c)(2) until the out-of-pocket
limitation is met as described in subparagraph 10 of this paragraph;
8.
Part B Cost Sharing: Except for coverage provided in subparagraph 9 of this
paragraph, coverage for fifty (50) percent of the cost sharing applicable under
Medicare Part B after the policyholder pays the Part B deductible until the
out-of-pocket limitation is met as described in subparagraph 10 of this
paragraph;
9.
Part B Preventive Services: Coverage of 100 percent of the cost sharing for
Medicare Part B preventive services after the policyholder pays the Part B
deductible; and
10.
Cost Sharing After Out-of-Pocket Limits: Coverage of 100 percent of all cost
sharing under Medicare Parts A and B for the balance of the calendar year after
the individual has reached the out-of-pocket limitation on annual expenditures
under Medicare Parts A and B of $4000 in 2006, indexed each year by the appropriate
inflation adjustment specified by the Secretary of the U.S. Department of
Health and Human Services.
(i)
Standardized Medicare supplement Plan L is mandated by The Medicare
Prescription Drug, Improvement and Modernization Act of 2003, Pub. L. 108-173, and
shall include only the following:
1.
The benefits described in subparagraphs 10(5)(h)1, 2, 3, and 9;
2.
The benefit described in subparagraphs 10(5)(h)4, 5, 6, 7, and 8, but
substituting seventy-five (75) percent for fifty (50) percent; and
3.
The benefit described in subparagraph 10(5)(h)10, but substituting $2000 for
$4000.
(j)
Standardized Medicare supplement Plan M shall include only the following: The
basic core benefit as described in Section 8(2) of this administrative regulation,
plus fifty (50) percent of the Medicare Part A deductible, skilled nursing
facility care, and medically necessary emergency care in a foreign country as described
in Sections 8(3)(a), (c) and (f) of this administrative regulation, respectively.
(k)
Standardized Medicare supplement Plan N shall include only the following: The
basic core benefit as described in Section 8(2) of this administrative regulation,
plus 100 percent of the Medicare Part A deductible, skilled nursing facility
care, and medically necessary emergency care in a foreign country as described in
Sections 8(3)(a), (c) and (f) of this administrative regulation, respectively, with
copayments in the following amounts:
1.
The lesser of twenty (20) dollars or the Medicare Part B coinsurance or copayment
for each covered health care provider office visit, including visits to medical
specialists; and
2.
The lesser of fifty (50) dollars or the Medicare Part B coinsurance or copayment
for each covered emergency room visit; however, this copayment shall be waived
if the insured is admitted to any hospital and the emergency visit is
subsequently covered as a Medicare Part A expense.
(6)
New or Innovative Benefits: An insurer may, with the prior approval of the
commissioner, offer policies or certificates with new or innovative benefits,
in addition to the standardized benefits provided in a policy or certificate
that complies with the applicable standards of this section. The new or
innovative benefits shall include only benefits that are appropriate to
Medicare supplement insurance, are new or innovative, are not available, and are
cost-effective. Approval of new or innovative benefits shall not adversely
impact the goal of Medicare supplement simplification. New or innovative
benefits shall not include an outpatient prescription drug benefit. New or
innovative benefits shall not be used to change or reduce benefits, including a
change of any cost-sharing provision, in any standardized plan.
Section
11. Medicare Select Policies and Certificates. (1)(a) This section shall apply
to Medicare Select policies and certificates, as described in this section.
(b)
A policy or certificate shall not be advertised as a Medicare Select policy or
certificate unless it meets the requirements of this section.
(2)
The commissioner may authorize an insurer to offer a Medicare Select policy or
certificate, pursuant to this section and Section 4358 of the Omnibus Budget
Reconciliation Act (OBRA) of 1990, 42 U.S.C. 1395ss and 42 U.S.C. 1320c-3, if
the commissioner finds that the insurer has satisfied all of the requirements
of this regulation.
(3)
A Medicare Select insurer shall not issue a Medicare Select policy or
certificate in this state until its plan of operation has been approved by the
commissioner pursuant to this section and KRS 304.14-120.
(4)
A Medicare Select insurer shall file a proposed plan of operation with the
commissioner. The plan of operation shall contain at least the following
information:
(a)
Evidence that all covered services that are subject to restricted network
provisions are available and accessible through network providers, including a
demonstration that:
1.
Covered services may be provided by network providers with reasonable
promptness with respect to geographic location, hours of operation and
after-hour care. The hours of operation and availability of after-hour care
shall reflect usual practice in the local area. Geographic availability shall
not be more than sixty (60) miles from the insured’s place of residence.
2.
The number of network providers in the service area is sufficient, with respect
to current and expected policyholders, either:
a.
To deliver adequately all services that are subject to a restricted network
provision; or
b.
To make appropriate referrals.
3.
There are written agreements with network providers describing specific responsibilities.
4.
Emergency care is available twenty-four (24) hours per day and seven (7) days
per week.
5.
If covered services are subject to a restricted network provision and are
provided on a prepaid basis, there are written agreements with network providers
prohibiting the providers from billing or seeking reimbursement from or
recourse against any individual insured under a Medicare Select policy or
certificate. This subparagraph shall not apply to supplemental charges or
coinsurance amounts as stated in the Medicare Select policy or certificate.
(b)
A statement or map providing a clear description of the service area.
(c)
A description of the grievance procedure to be utilized.
(d)
A description of the quality assurance program, including:
1.
The formal organizational structure;
2.
The written criteria for selection, retention and removal of network providers;
and
3.
The procedures for evaluating quality of care provided by network providers,
and the process to initiate corrective action if warranted.
(e)
A list and description, by specialty, of the network providers.
(f)
Copies of the written information proposed to be used by the insurer to comply
with subsection (8) of this section.
(g)
Any other information requested by the commissioner in accordance with this section,
KRS 304.14-120, and 304.14-130.
(5)(a)
A Medicare Select insurer shall file any proposed changes to the plan of
operation, except for changes to the list of network providers, with the
commissioner prior to implementing the changes. Changes shall be considered
approved by the commissioner after sixty (60) days unless specifically
disapproved.
(b)
An updated list of network providers shall be filed with the commissioner at
least quarterly.
(6)
A Medicare Select policy or certificate shall not restrict payment for covered
services provided by nonnetwork providers if:
(a)
The services are for symptoms requiring emergency care or are immediately
required for an unforeseen illness, injury, or a condition;
(b)
It is not reasonable to obtain services through a network provider; or
(c)
There are no network providers available within sixty (60) miles of the
insured’s place of residence.
(7)
A Medicare Select policy or certificate shall provide payment for full coverage
under the policy for covered services that are not available through network
providers.
(8)
A Medicare Select insurer shall make full and fair disclosure in writing of the
provisions, restrictions and limitations of the Medicare Select policy or
certificate to each applicant. This disclosure shall include at least the
following:
(a)
An outline of coverage sufficient to permit the applicant to compare the
coverage and premiums of the Medicare Select policy or certificate with:
1.
Other Medicare supplement policies or certificates offered by the insurer; and
2.
Other Medicare Select policies or certificates.
(b)
A description, which shall include address, phone number and hours of operation
of the network providers, including primary care physicians, specialty physicians,
hospitals and other providers.
(c)
A description of the restricted network provisions, including payments for
coinsurance and deductibles when providers other than network providers are
utilized. Except to the extent specified in the policy or certificate, expenses
incurred when using out-of-network providers shall not count toward the
out-of-pocket annual limit contained in plans K and L.
(d)
A description of coverage for emergency and urgently needed care and other
out-of-service area coverage.
(e)
A description of limitations on referrals to restricted network providers and
to other providers.
(f)
A description of the policyholder’s rights to purchase any other Medicare
supplement policy or certificate offered by the insurer.
(g)
A description of the Medicare Select insurer’s quality assurance program and
grievance procedure.
(9)
Prior to the sale of a Medicare Select policy or certificate, a Medicare Select
insurer shall obtain from the applicant a signed and dated form stating that
the applicant has received the information provided pursuant to subsection (8)
of this section and that the applicant understands the restrictions of the
Medicare Select policy or certificate.
(10)
A Medicare Select insurer shall have and use procedures for hearing complaints
and resolving written grievances from the subscribers. The procedures shall be
aimed at mutual agreement for settlement and may include arbitration procedures.
(a)
The grievance procedure shall be described in the policy and certificates and
in the outline of coverage.
(b)
Upon issuance of the policy or certificate, the insurer shall provide detailed
information to the policyholder describing how a grievance may be registered
with the insurer.
(c)
A grievance shall be considered in a timely manner and shall be transmitted to
appropriate decision makers who have authority to fully investigate the issue
and take corrective action.
(d)
If a grievance is found to be valid, corrective action shall be taken promptly.
(e)
All concerned parties shall be notified about the results of a grievance.
(f)
The insurer shall report no later than each March 31st to the commissioner
regarding its grievance procedure, including the number of grievances filed in
the past year and a summary of the subject, nature and resolution of
grievances.
(11)
Upon initial purchase, a Medicare Select insurer shall make available to each
applicant for a Medicare Select policy or certificate the opportunity to
purchase any Medicare supplement policy or certificate offered by the insurer.
(12)(a)
At the request of an individual insured under a Medicare Select policy or certificate,
a Medicare Select insurer shall make available to the individual insured the
opportunity to purchase a Medicare supplement policy or certificate offered by
the insurer which has comparable or lesser benefits and which does not contain
a restricted network provision. The insurer shall make the policies or
certificates available without requiring evidence of insurability after the
Medicare Select policy or certificate has been in force for six (6) months.
(b)
For the purposes of this subsection, a Medicare supplement policy or
certificate shall be considered to have comparable or lesser benefits unless it
contains one (1) or more of the following significant benefits not included in
the Medicare Select policy or certificate being replaced, coverage for:
1.
The Medicare Part A deductible;
2.
At-home recovery services; or
3.
Part B excess charges.
(13)
Medicare Select policies and certificates shall provide for continuation of
coverage if the secretary determines that Medicare Select policies and
certificates issued pursuant to this section shall be discontinued due to
either the failure of the Medicare Select Program to be reauthorized under law
or its substantial amendment.
(a)
Each Medicare Select insurer shall make available to each individual insured
under a Medicare Select policy or certificate the opportunity to purchase any
Medicare supplement policy or certificate offered by the insurer which has
comparable or lesser benefits and which does not contain a restricted network
provision. The insurer shall make these policies and certificates available
without requiring evidence of insurability.
(b)
For the purposes of this subsection, a Medicare supplement policy or
certificate shall be considered to have comparable or lesser benefits unless it
contains one (1) or more of the following significant benefits not included in
the Medicare Select policy or certificate being replaced, coverage for:
1.
The Medicare Part A deductible;
2.
At-home recovery services; or
3.
Part B excess charges.
(14)
A Medicare Select insurer shall comply with reasonable requests for data made
by state or federal agencies, including the United States Department of Health
and Human Services, for the purpose of evaluating the Medicare Select Program.
Section
12. Open Enrollment. (1)(a) An insurer shall not deny or condition the issuance
or effectiveness of any Medicare supplement policy or certificate available for
sale in Kentucky, nor discriminate in the pricing of a policy or certificate
because of the health status, claims experience, receipt of health care, or
medical condition of an applicant if:
1.
An application for a policy or certificate is submitted prior to or during the
six (6) month period beginning with the first day of the first month in which
an individual is sixty-five (65) years of age or older; and
2.
The applicant is enrolled for benefits under Medicare Part B.
(b)
Each Medicare supplement policy and certificate currently available from an
insurer shall be made available to all applicants who qualify under this
subsection without regard to age.
(2)(a)
If an applicant qualifies under subsection (1) of this section and submits an
application during the time period referenced in subsection (1) of this section
and, as of the date of application, has had a continuous period of creditable
coverage of at least six (6) months, the insurer shall not exclude benefits
based on a preexisting condition.
(b)
If the applicant qualifies under subsection (1) of this section and submits an
application during the time period referenced in subsection (1) of this section
and, as of the date of application, has had a continuous period of creditable
coverage that is less than six (6) months, the insurer shall reduce the period
of any preexisting condition exclusion by the aggregate of the period of
creditable coverage applicable to the applicant as of the enrollment date. The
Secretary shall specify the manner of the reduction under this subsection.
(3)
Except as provided in Subsection (2) and Sections 13 and 24 of this
administrative regulation, subsection (1) of this section shall not be
construed as preventing the exclusion of benefits under a policy, during the
first six (6) months, based on a preexisting condition for which the
policyholder or certificate holder received treatment or was diagnosed during
the six (6) months before the coverage became effective.
Section
13. Guaranteed Issue for Eligible Persons. (1) Guaranteed Issue:
(a)
Eligible persons are those individuals described in subsection (2) of this
section who seek to enroll under the policy during the period specified in subsection
(3) of this section, and who submit evidence of the date of termination, disenrollment,
or Medicare Part D enrollment with the application for a Medicare supplement
policy.
(b)
With respect to eligible persons, an insurer shall not:
1.
Deny or condition the issuance or effectiveness of a Medicare supplement policy
described in subsection (5) of this section that is offered and is available
for issuance to new enrollees by the insurer;
2.
Discriminate in the pricing of a Medicare supplement policy because of health
status, claims experience, receipt of health care, or medical condition; and
3.
Impose an exclusion of benefits based on a preexisting condition under a
Medicare supplement policy.
(2)
An eligible person shall include the following:
(a)
An individual that is enrolled under an employee welfare benefit plan that
provides health benefits that supplement the benefits under Medicare; and the
plan terminates, or the plan ceases to provide all the supplemental health
benefits to the individual;
(b)
An individual is enrolled with a Medicare Advantage organization under a
Medicare Advantage plan under part C of Medicare, and:
1.
The individual is sixty (65) years of age or older and is enrolled with a
Program of All-Inclusive Care for the Elderly (PACE) provider under Section
1894 of the Social Security Act, 42 U.S.C 1395eee, and there are circumstances
similar to those described in subparagraph 2 that would permit discontinuance
of the individual’s enrollment with the provider if the individual were
enrolled in a Medicare Advantage plan; or
2.
Any of the following circumstances apply:
a.
The certification of the organization or plan has been terminated;
b.
The organization has terminated or discontinued providing the plan in the area
in which the individual resides;
c.
The individual is no longer eligible to elect the plan because of a change in
the individual’s place of residence or other change in circumstances specified
by the secretary, but not including termination of the individual’s enrollment
on the basis described in Section 1851(g)(3)(B) of the federal Social Security
Act, 42 U.S.C 1395w-21(g)(3)(B), if the individual has not paid premiums on a
timely basis or has engaged in disruptive behavior as specified in standards under
Section 1856, 42 U.S.C. 1395w-26, or the plan is terminated for all individuals
within a residence area;
d.
The individual demonstrates, in accordance with guidelines established by the secretary,
that:
(i)
The organization offering the plan substantially violated a material provision
of the organization’s contract under this part in relation to the individual,
including the failure to provide an enrollee on a timely basis medically
necessary care for which benefits are available under the plan or the failure
to provide the covered care in accordance with applicable quality standards; or
(ii)
The organization, or agent or other entity acting on the organization’s behalf,
materially misrepresented the plan’s provisions in marketing the plan to the
individual; or
(iii)
The individual meets the other exceptional conditions as the secretary may
provide.
(c)
1. An individual is enrolled with:
a.
An eligible organization under a contract under Section 1876 of the Social
Security Act, 42 U.S.C. 1395mm regarding Medicare cost;
b.
A similar organization operating under demonstration project authority, effective
for periods before April 1, 1999;
c.
An organization under an agreement under Section 1833(a)(1)(A) of the Social
Security Act, 42 U.S.C. 1395l(a)(1)(A), regarding health care prepayment plan;
or
d.
An organization under a Medicare Select policy; and
2.
The enrollment ceases under the same circumstances that would permit
discontinuance of an individual’s election of coverage under subsection (2)(b)
of this section.
(d)
The individual is enrolled under a Medicare supplement policy and the enrollment
ceases due to any of the following reasons:
1.a.
The insolvency of the insurer or bankruptcy of the non-insurer organization; or
b.
The involuntary termination of coverage or enrollment under the policy;
2.
The insurer of the policy substantially violated a material provision of the
policy; or
3.
The insurer, or an agent or other entity acting on the insurer's behalf,
materially misrepresented the policy’s provisions in marketing the policy to
the individual;
(e)1.
An individual that was enrolled under a Medicare supplement policy and
terminates enrollment and subsequently enrolls, for the first time, with any of
the following:
a.
A Medicare Advantage organization under a Medicare Advantage plan under part C
of Medicare;
b.
An eligible organization under a contract under Section 1876 of the Social
Security Act, 42 U.S.C. 1395mm regarding Medicare cost;
c.
A similar organization operating under demonstration project authority;
d.
A PACE provider under Section 1894 of the Social Security Act, 42 U.S.C.
1395eee; or
e.
A Medicare Select policy; and
2.
The subsequent enrollment under subparagraph (e)1 of this subsection is
terminated by the enrollee during any period within the first twelve (12)
months of subsequent enrollment during which the enrollee is permitted to
terminate the subsequent enrollment under Section 1851(e) of the federal Social
Security Act, 42 U.S.C. 1395w-21(e); or
(f)
An individual who, upon first becoming eligible for benefits under part A of
Medicare at age 65, enrolls in:
1.
A Medicare Advantage plan under part C of Medicare, or with a PACE provider
under Section 1894 of the Social Security Act, 42 U.S.C. 1395eee; and
2.
Disenrolls from the plan or program by not later than twelve (12) months after
the effective date of enrollment; or
(g)
An individual that:
1.
Enrolls in a Medicare Part D plan during the initial enrollment period;
2.
Upon enrollment in Part D, was enrolled under a Medicare supplement policy that
covers outpatient prescription drugs; and
3.
Terminates enrollment in the Medicare supplement policy and submits evidence of
enrollment in Medicare Part D along with the application for a policy described
in subsection (5)(d) of this section.
(3)
Guaranteed Issue Time Periods.
(a)
For an individual described in subsection (2)(a) of this section, the
guaranteed issue period shall:
1.
Begin on the later of the date:
a.
The individual receives a notice of termination or cessation of all
supplemental health benefits, or, if a notice is not received, notice that a claim
has been denied because of a termination or cessation; or
b.
That the applicable coverage terminates or ceases; and
2.
End sixty-three (63) days thereafter;
(b)
For an individual described in subsection (2)(b), (c), (e), or (f) of this
section whose enrollment is terminated involuntarily, the guaranteed issue
period begins on the date that the individual receives a notice of termination
and ends sixty-three (63) days after the date the applicable coverage is
terminated;
(c)
For an individual described in subsection (2)(d)1 of this section, the
guaranteed issue period shall end on the date that is sixty-three (63) days
after the date the coverage is terminated and shall begin on the earlier of the
date that:
1.
The individual receives a notice of termination, a notice of the insurer’s
bankruptcy or insolvency, or other the similar notice if any; or
2.
The applicable coverage is terminated;
(d)
For an individual described in subsection (2)(b), (d)2, (d)3, (e) or (f) of
this section who disenrolls voluntarily, the guaranteed issue period shall begin
on the date that is sixty (60) days before the effective date of the
disenrollment and shall end on the date that is sixty-three (63) days after the
effective date;
(e)
For an individual described in subsection (2)(g) of this section, the
guaranteed issue period shall begin on the date the individual receives notice
pursuant to Section 1882(v)(2)(B) of the Social Security Act, 42 U.S.C.
1395ss(v)(2)(B), from the Medicare supplement insurer during the sixty (60) day
period immediately preceding the initial Part D enrollment period and shall end
on the date that is sixty-three (63) days after the effective date of the
individual’s coverage under Medicare Part D; and
(f)
For an individual described in subsection (2) of this section but not described
in the preceding provisions of this subsection, the guaranteed issue period shall
begin on the effective date of disenrollment and shall end on the date that is
sixty-three (63) days after the effective date.
(4)
Extended Medigap Access for Interrupted Trial Periods.
(a)
For an individual described in subsection (2)(e) of this section whose
enrollment with an organization or provider described in Subsection (2)(e)1 of
this section is involuntarily terminated within the first twelve (12) months of
enrollment, and who, without an intervening enrollment, enrolls with another organization
or provider, the subsequent enrollment shall be deemed to be an initial
enrollment described in subsection(2)(e)of this section;
(b)
For an individual described in subsection (2)(f) of this section whose
enrollment with a plan or in a program described in Subsection (2)(f) of this
section is involuntarily terminated within the first twelve (12) months of
enrollment, and who, without an intervening enrollment, enrolls in another plan
or program, the subsequent enrollment shall be deemed to be an initial
enrollment described in subsection (2)(f) of this section; and
(c)
For purposes of subsection (2)(e) and (f) of this section, enrollment of an
individual with an organization or provider described in subsection (2)(e)1 of
this section, or with a plan or in a program described in subsection (2)(f) of
this section, shall not be deemed to be an initial enrollment under this
paragraph after the two (2) year period beginning on the date on which the
individual first enrolled with an organization, provider, plan, or program.
(5)
Products to Which Eligible Persons are Entitled. The Medicare supplement policy
to which eligible persons are entitled under:
(a)
Section 13(2)(a), (b), (c) and (d) of this administrative regulation is a
Medicare supplement policy which has a benefit package classified as Plan A, B,
C, F, high deductible F, K, or L offered by any insurer.
(b)1.
Subject to subparagraph 2 of this paragraph, a person eligible pursuant to Section
13(2)(e) of this administrative regulation is the same Medicare supplement
policy in which the individual was most recently previously enrolled, if
available from the same insurer, or, if not so available, a policy described in
paragraph (a) of this subsection;
2.
After December 31, 2005, if the individual was most recently enrolled in a
Medicare supplement policy with an outpatient prescription drug benefit, a
Medicare supplement policy described in this subparagraph is:
a.
The policy available from the same insurer but modified to remove outpatient
prescription drug coverage; or
b.
At the election of the policyholder, an A, B, C, F, high deductible F, K, or L
policy that is offered by any insurer;
(c)
Section 13(2)(f) of this administrative regulation shall include any Medicare
supplement policy offered by any insurer;
(d)
Section 13(2)(g) of this administrative regulation is a Medicare supplement
policy that:
1.
Has a benefit package classified as Plan A, B, C, F, high deductible F, K, or L;
and
2.
Is offered and available for issuance to new enrollees by the same insurer that
issued the individual’s Medicare supplement policy with outpatient prescription
drug coverage.
(6)
Notification provisions.
(a)
Upon an event described in subsection (2) of this section resulting in a loss
of coverage or benefits due to the termination of a contract or agreement,
policy, or plan, the organization that terminates the contract or agreement,
the insurer terminating the policy, or the administrator of the plan being terminated,
respectively, shall notify the individual of the individual’s rights under this
section, and of the obligations of insurers of Medicare supplement policies
under subsection (1) of this section. This notice shall be communicated simultaneously
with the notification of termination.
(b)
Upon an event described in subsection (2) of this section resulting in an
individual ceasing enrollment under a contract or agreement, policy, or plan,
the organization that offers the contract or agreement, regardless of the basis
for the cessation of enrollment, the insurer offering the policy, or the administrator
of the plan, respectively, shall notify the individual of the individual’s
rights under this section, and of the obligations of insurer of Medicare supplement
policies under Section 13(1) of this administrative regulation. The notice
shall be communicated within ten (10) working days of the insurer receiving
notification of disenrollment.
Section
14. Standards for Claims Payment.
(1)
An insurer shall comply with 42 U.S.C 1395ss, section 1882(c)(3) of the Social
Security Act, by:
(a)
Accepting a notice from a Medicare carrier on dually assigned claims submitted
by participating physicians and suppliers as a claim for benefits in place of
any other claim form required and making a payment determination on the basis
of the information contained in that notice;
(b)
Notifying the participating physician or supplier and the beneficiary of the payment
determination;
(c)
Paying the participating physician or supplier;
(d)
Upon enrollment, furnishing each enrollee with a card listing the policy name,
number and a central mailing address to which notices from a Medicare carrier
may be sent;
(e)
Paying user fees for claim notices that are transmitted electronically or in
another manner; and
(f)
Providing to the Secretary of, at least annually, a central mailing address to
which all claims may be sent by Medicare carriers.
(2)
Compliance with the requirements established in subsection (1) of this section
shall be certified to the commissioner as part of the insurer’s annual filing
pursuant to KRS 304.3-240.
Section
15. Loss Ratio Standards and Refund or Credit of Premium.
(1)
Loss Ratio Standards.
(a)1.
Pursuant to KRS 304.14-530, a Medicare Supplement policy form or certificate
form shall not be delivered or issued for delivery in Kentucky unless it is
expected to return to policyholders and certificate holders in the form of
aggregate benefits, not including anticipated refunds or credits, provided
under the policy form or certificate form which total:
a.
At least seventy-five (75) percent of the aggregate amount of premiums earned
in the case of group policies; or
b.
At least sixty-five (65) percent of the aggregate amount of premiums earned in
the case of individual policies;
2.
The calculation shall be in accordance with accepted actuarial principles and
practices; and
a.
Based on:
(i)
Incurred claims experience or incurred health care expenses if coverage is
provided by a health maintenance organization on a service rather than
reimbursement basis; and
(ii)
Earned premiums for the period; and
b.
Incurred health care expenses if coverage is provided by a health maintenance
organization shall not include:
(i)
Home office and overhead costs;
(ii)
Advertising costs;
(iii)
Commissions and other acquisition costs;
(iv)
Taxes;
(v)
Capital costs;
(vi)
Administrative costs; and
(vii)
Claims processing costs.
(b)
A filing of rates and rating schedules shall demonstrate that expected claims
in relation to premiums comply with the requirements of this section when
combined with actual experience to date. Filings of rate revisions shall also
demonstrate that the anticipated loss ratio over the entire future period for
which the revised rates are computed to provide coverage can be expected to
meet the appropriate loss ratio standards.
(c)
For policies issued prior to October 14, 1990, expected claims in relation to
premiums shall meet:
1.
The originally filed anticipated loss ratio when combined with the actual
experience since inception;
2.
The appropriate loss ratio requirement from subsection (1)(a)1a and b of this
section when combined with actual experience beginning with July 5, 1996, to
date; and
3.
The appropriate loss ratio requirement from subsection (1)(a)1a and b of this
section over the entire future period for which the rates are computed to
provide coverage.
(2)
Refund or Credit Calculation.
(a)
An insurer shall collect and file with the commissioner by May 31 of each year
the data contained in the applicable reporting form contained in HL-MS-1 for
each type in a standard Medicare supplement benefit plan:
(b)
If on the basis of the experience as reported the benchmark ratio since
inception (ratio 1) exceeds the adjusted experience ratio since inception
(ratio 3), then a refund or credit calculation shall be required. The refund
calculation shall be done on a statewide basis for each type in a standard
Medicare supplement benefit plan. For purposes of the refund or credit calculation,
experience on policies issued within the reporting year shall be excluded.
(c)
For policies or certificates issued prior to October 14, 1990, the insurer shall
make the refund or credit calculation separately for all individual policies, including
all group policies subject to an individual loss ratio standard when issued,
combined and all other group policies combined for experience after July 5,
1996.
(d)
A refund or credit shall be made only when the benchmark loss ratio exceeds the
adjusted experience loss ratio and the amount to be refunded or credited
exceeds the level as identified on the annual refund calculation form HL-MS-1.
The refund shall include interest from the end of the calendar year to the date
of the refund or credit at a rate specified by the Secretary of Health and
Human Services, but it shall not be less than the average rate of interest for
thirteen (13) week Treasury notes. A refund or credit against premiums due
shall be made by September 30 following the experience year upon which the
refund or credit is based.
(3)
Annual filing of Premium Rates.
(a)
An insurer of Medicare supplement policies and certificates issued before or
after January 14, 1992, in this state shall file annually for approval by the
commissioner in accordance with the filing requirements and procedures
prescribed by the commissioner in KRS 304-14-120:
1.
Rates;
2.
Rating schedule; and
3.
Supporting documentation, including ratios of incurred losses to earned
premiums by policy duration.
(b)
The supporting documentation shall also demonstrate in accordance with
actuarial standards of practice using reasonable assumptions that the
appropriate loss ratio standards can be expected to be met over the entire
period for which rates are computed. The demonstration shall exclude active
life reserves.
(c)
An expected third-year loss ratio which is greater than or equal to the
applicable percentage shall be demonstrated for policies or certificates in
force less than three (3) years.
(d)
As soon as practicable, but prior to the effective date of enhancements in
Medicare benefits, every insurer of Medicare supplement policies or
certificates in this state shall file with the commissioner, in accordance with
KRS 304-14.120:
1.a.
Appropriate premium adjustments necessary to produce loss ratios as anticipated
for the current premium for the applicable policies or certificates. The
supporting documents necessary to justify the adjustment shall accompany the
filing.
b.
Appropriate premium adjustments necessary to produce an expected loss ratio
under the policy or certificate to conform to minimum loss ratio standards for
Medicare supplement policies and which are expected to result in a loss ratio
at least as great as that originally anticipated in the rates used to produce
current premiums by the insurer for the Medicare supplement policies or
certificates. A premium adjustment which would modify the loss ratio experience
under the policy other than the adjustments described in this subsection shall
not be made with respect to a policy at any time other than upon its renewal
date or anniversary date.
c.
If an insurer fails to make premium adjustments acceptable to the commissioner
in accordance with this section, the commissioner may order premium
adjustments, refunds or premium credits necessary to achieve the loss ratio
required by this section.
2.
Any appropriate riders, endorsements, or policy forms needed to accomplish the
Medicare supplement policy or certificate modifications necessary to eliminate
benefit duplications with Medicare. The riders, endorsements, or policy forms
shall provide a clear description of the Medicare supplement benefits provided
by the policy or certificate.
(4)
Public Hearings. The commissioner may conduct a public hearing pursuant to KRS
304.2-310, to gather information concerning a request by an insurer for an
increase in a rate for a policy form or certificate form issued before or after
January 1, 1992, if the experience of the form for the previous reporting
period is not in compliance with the applicable loss ratio standard. The
determination of compliance shall be made without consideration of any refund
or credit for the reporting period. Public notice of the hearing shall be furnished
in accordance with KRS 304.2-320.
Section
16. Filing and Approval of Policies and Certificates and Premium Rates.
(1)
An insurer shall not deliver or issue for delivery a policy or certificate to a
resident of Kentucky unless the policy form or certificate form has been filed
with and approved by the commissioner in accordance with filing requirements
and procedures in KRS 304.14-120.
(2)
An insurer shall file, with the commissioner, any riders or amendments to
policy or certificate forms, issued in Kentucky, to delete outpatient
prescription drug benefits as required by the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003, Pub. L. 108-173.
(3)
An insurer shall not use or change premium rates for a Medicare supplement
policy or certificate unless the rates, rating schedule and supporting
documentation have been filed with and approved by the commissioner in
accordance with KRS 304.14-120.
(4)(a)
Except as provided in Paragraph (b) of this subsection, an insurer shall not file
for approval more than one (1) form of a policy or certificate of each type for
each standard Medicare supplement benefit plan.
(b)
An insurer may offer, with the approval of the commissioner, up to four (4)
additional policy forms or certificate forms of the same type for the same
standard Medicare supplement benefit plan, one (1) for each of the following
cases:
1.
The inclusion of new or innovative benefits;
2.
The addition of either direct response or agent marketing methods;
3.
The addition of either guaranteed issue or underwritten coverage;
4.
The offering of coverage to individuals eligible for Medicare by reason of
disability.
(c)
A type of a policy or certificate form shall include:
1.
An individual policy;
2.
A group policy;
3.
An individual Medicare Select policy; or
4.
A group Medicare Select policy.
(5)(a)
Except as provided in subparagraph 1 of this paragraph, an insurer shall
continue to make available for purchase any policy form or certificate form
issued after January 1, 1992, that has been approved by the commissioner. A
policy form or certificate form shall not be considered to be available for purchase
unless the insurer has actively offered it for sale in the previous twelve (12)
months.
1.
An insurer may discontinue the availability of a policy form or certificate
form if the insurer provides to the commissioner in writing its decision at
least thirty (30) days prior to discontinuing the availability of the form of
the policy or certificate. After receipt of the notice by the commissioner, the
insurer shall not offer for sale the policy form or certificate form in Kentucky.
2.
An insurer that discontinues the availability of a policy form or certificate
form pursuant to Subparagraph 1 of this paragraph shall not file for approval a
new policy form or certificate form of the same type for the same standard
Medicare supplement benefit plan as the discontinued form for a period of five
(5) years after the insurer provides notice to the commissioner of the
discontinuance. The period of discontinuance may be reduced if the commissioner
determines that a shorter period is appropriate.
(b)
The sale or other transfer of Medicare supplement business to another insurer shall
be considered a discontinuance for the purposes of this subsection.
(c)
A change in the rating structure or methodology shall be considered a
discontinuance under paragraph (a) of this subsection unless the insurer
complies with the following requirements:
1.
The insurer provides an actuarial memorandum, describing the manner in which
the revised rating methodology and resultant rates differ from the existing
rating methodology and existing rates; and
2.
The insurer does not subsequently put into effect a change of rates or rating
factors that would cause the percentage differential between the discontinued
and subsequent rates as described in the actuarial memorandum to change. The
commissioner may approve a change to the differential that is in the public
interest.
(6)(a)
Except as provided in paragraph (b) of this subsection, the experience of all
policy forms or certificate forms of the same type in a standard Medicare
supplement benefit plan shall be combined for purposes of the refund or credit
calculation prescribed in Section 15 of this administrative regulation.
(b)
Forms assumed under an assumption reinsurance agreement shall not be combined
with the experience of other forms for purposes of the refund or credit
calculation.
(7)
An insurer shall not present for filing or approval a rate structure for its
Medicare supplement policies or certificates issued after October 4, 2005,
based upon a structure or methodology with any groupings of attained ages
greater than one (1) year. The ratio between rates for successive ages shall
increase smoothly as age increases.
Section
17. Permitted Compensation Arrangements. (1) An insurer or other entity may
provide commission or other compensation to an agent or other representative
for the sale of a Medicare supplement policy or certificate only if the first
year commission or other first year compensation is no more than 200 percent of
the commission or other compensation paid for selling or servicing the policy
or certificate in the second year or period.
(2)
The commission or other compensation provided in subsequent (renewal) years shall
be the same as that provided in the second year or period and shall be provided
for no fewer than five (5) renewal years.
(3)
An insurer or other entity shall not provide compensation to its agents or
other producers and an agent or producer shall not receive compensation greater
than the renewal compensation payable by the replacing insurer on renewal
policies or certificates if an existing policy or certificate is replaced.
Section
18. Required Disclosure Provisions.
(1)
General Rules.
(a)1.
Medicare supplement policies and certificates shall include a renewal or
continuation provision.
2.
The language or specifications of a renewal or continuation provision shall be
consistent with the type of contract issued.
3.
The renewal or continuation provision shall:
a.
Be appropriately captioned;
b.
Appear on the first page of the policy; and
c.
Include any reservation by the insurer of the right to change premiums and any
automatic renewal premium increases based on the policyholder’s age.
(b)1.
A rider or endorsement added to a Medicare supplement policy after date of
issue or at reinstatement or renewal which reduce or eliminate benefits or
coverage in the policy shall require a signed acceptance by the insured, except
for a rider or endorsement by which an insurer:
a.
Effectuates a request made in writing by the insured;
b.
Exercises a specifically reserved right under a Medicare supplement policy; or
c.
Is required to reduce or eliminate benefits to avoid duplication of Medicare
benefits.
2.
After the date of policy or certificate issue, any rider or endorsement which
increases benefits or coverage with a concomitant increase in premium during
the policy term shall be agreed to in writing signed by the insured, unless:
a.
The benefits are required by the minimum standards for Medicare supplement
policies; or
b.
If the increased benefits or coverage is required by law.
3.
If a separate additional premium is charged for benefits provided in connection
with riders or endorsements, the premium charge shall be set forth in the
policy.
(c)
Medicare supplement policies or certificates shall not provide for the payment
of benefits based on standards described as "usual and customary," "reasonable
and customary" or words of similar import.
(d)
If a Medicare supplement policy or certificate contains any limitations with
respect to preexisting conditions, these limitations shall appear as a separate
paragraph of the policy and be labeled as "Preexisting Condition
Limitations."
(e)
Medicare supplement policies and certificates shall have a notice prominently
printed on the first page of the policy or certificate, or attached thereto,
stating in substance that the policyholder or certificate holder shall have the
right to return the policy or certificate within thirty (30) days of its
delivery and to have the premium refunded if, after examination of the policy
or certificate, the insured person is not satisfied for any reason.
(f)1.
Insurers of accident and sickness policies or certificates which provide
hospital or medical expense coverage on an expense incurred or indemnity basis
to persons eligible for Medicare shall provide to those applicants a Guide to
Health Insurance for People with Medicare in the language, format, type size,
type proportional spacing, bold character, and line spacing developed jointly
by the National Association of Insurance Commissioners and Centers for Medicare
and Medicaid Services and in a type size no smaller than twelve (12) point
type.
2.
Delivery of the guide described in subparagraph 1 of this paragraph shall be
made:
a.
Whether or not the policies or certificates are advertised, solicited or issued
as Medicare supplement policies or certificates as described in this
administrative regulation.
b.
To the applicant upon application and acknowledgement of receipt of the guide
shall be obtained by the insurer, except that direct response insurer shall
deliver the guide to the applicant upon request but not later than at policy delivery.
(2)
Notice requirements.
(a)
As soon as practicable, but no later than thirty (30) days prior to the annual
effective date of any Medicare benefit changes, an insurer shall notify its
policyholders and certificate holders of modifications it has made to Medicare
supplement insurance policies or certificates. The notice shall:
1.
Include a description of revisions to the Medicare program and a description of
each modification made to the coverage provided under the Medicare supplement
policy or certificate; and
2.
Inform each policyholder or certificate holder as to if any premium adjustment
is to be made due to changes in Medicare.
(b)
The notice of benefit modifications and any premium adjustments shall be in
outline form and in clear and simple terms so as to facilitate comprehension.
(c)
The notices shall not contain or be accompanied by any solicitation.
(3)
Insurers shall comply with any notice requirements of the Medicare Prescription
Drug, Improvement and Modernization Act of 2003, Pub.L. 108-173.
(4)
Outline of Coverage Requirements for Medicare Supplement Policies.
(a)
An insurer shall provide an outline of coverage to all applicants when an application
is presented to the prospective applicant and, except for direct response
policies, shall obtain an acknowledgement of receipt of the outline from the
applicant; and
(b)
If an outline of coverage is provided at application and the Medicare
supplement policy or certificate is issued on a basis which would require
revision of the outline, a substitute outline of coverage properly describing
the policy or certificate shall accompany the policy or certificate when it is
delivered and contain the following statement, in no less than twelve (12)
point type, immediately above the company name:
"NOTICE:
READ THIS OUTLINE OF COVERAGE CAREFULLY. IT IS NOT IDENTICAL TO THE OUTLINE OF
COVERAGE PROVIDED UPON APPLICATION AND THE COVERAGE ORIGINALLY APPLIED FOR HAS
NOT BEEN ISSUED."
(c)
The outline of coverage provided to applicants pursuant to this section shall consist
of four (4) parts: a cover page, premium information, disclosure pages, and
charts displaying the features of each benefit plan offered by the insurer. The
outline of coverage shall be in the language and format prescribed in the HL-MS-4
in no less than twelve (12) point type. All plans shall be shown on the cover
page, and the plans that are offered by the insurer shall be prominently
identified. Premium information for plans that are offered shall be shown on
the cover page or immediately following the cover page and shall be prominently
displayed. The premium and mode shall be stated for all plans that are offered
to the prospective applicant. All possible premiums for the prospective
applicant shall be illustrated.
(5)
Notice Regarding Policies or Certificates Which Are Not Medicare Supplement
Policies.
(a)1.
Any accident and sickness insurance policy or certificate, other than a
Medicare supplement policy, a policy issued pursuant to a contract under
Section 1876 of the Federal Social Security Act, 42 U.S.C. 1395 et seq.,
disability income policy, or other policy identified in Section 3(2) of this administrative
regulation, issued for delivery in Kentucky to persons eligible for Medicare
shall notify insureds under the policy that the policy is not a Medicare
supplement policy or certificate.
2.
The notice shall either be printed or attached to the first page of the outline
of coverage delivered to insureds under the policy, or if no outline of
coverage is delivered, to the first page of the policy, or certificate
delivered to insureds.
3.
The notice shall be in no less than twelve (12) point type and shall contain
the following language:
"THIS
(POLICY OR CERTIFICATE) IS NOT A MEDICARE SUPPLEMENT (POLICY OR CONTRACT). If
you are eligible for Medicare, review the Guide to Health Insurance for People
with Medicare available from the company."
(b)
Applications provided to persons eligible for Medicare for the health insurance
policies or certificates described in subsection (5)(a) of this section shall
disclose, using the applicable statement in HL-MS-3 the extent to which the
policy duplicates Medicare. The disclosure statement shall be provided as a
part of, or together with, the application for the policy or certificate.
Section
19. Requirements for Application Forms and Replacement Coverage.
(1)
Comparison statement.
(a)
If a Medicare Advantage or Medicare supplement policy or certificate is to
replace another Medicare supplement or Medicare Advantage policy or
certificate, there shall be presented to the applicant, no later than the
application date, HL-MS-5.
(b)
Direct response insurers shall present the comparison statement to the
applicant not later than when the policy is delivered.
(c)
Agents shall:
1.
Obtain the signature of the applicant on the comparison statement;
2.
Sign the comparison statement; and
3.
Send the comparison statement to the insurer and attach a copy of the
comparison statement to the replacement policy.
(2)(a)
Application forms shall include the questions on HL-MS-6 designed to elicit
information as to whether, as of the date of the application:
1.
The applicant currently has Medicare supplement, Medicare Advantage, Medicaid
coverage, or another health insurance policy or certificate in force; or
2.
A Medicare supplement policy or certificate is intended to replace any other
accident and sickness policy or certificate presently in force.
(b)
An agent shall provide the HL-MS-07 to the applicant.
(c)
A supplementary application or other form to be signed by the applicant and
agent containing the questions as found on the HL-MS-06 and statements on
HL-MS-07 may be used.
(3)
Agents shall list, on HL-MS-06 or on the supplementary form as identified in
subsection (2)(c), any other health insurance policies they have sold to the
applicant including:
(a)
Policies sold which are still in force; and
(b)
Policies sold in the past five (5) years that are no longer in force.
(4)
For an insurer that uses direct response, a copy of the application or
supplemental form, signed by the applicant, and acknowledged by the insurer,
shall be returned to the applicant by the insurer upon delivery of the policy.
(5)
Upon determining that a sale will involve replacement of Medicare supplement
coverage, any insurer, other than an insurer that uses direct response, or its
agent, shall furnish the applicant, prior to issuance or delivery of the
Medicare supplement policy or certificate, a notice regarding replacement of
Medicare supplement coverage. One (1) copy of the notice signed by the applicant
and the agent, except if the coverage is sold without an agent, shall be provided
to the applicant and an additional signed copy shall be retained by the insurer.
An insurer that uses direct response shall deliver to the applicant at issuance
of the policy, the notice regarding replacement of Medicare supplement
coverage.
(6)
The notice required by Subsection (5) of this section for an insurer shall be
provided as specified HL-MS-08, in no less than twelve (12) point type or in a
form developed by the insurer, which shall:
(a)
Meet the requirements of this section;
(b)
Be filed with and approved by the commissioner prior to use.
Section
20. Filing Requirements for Advertising and Policy Delivery. (1) An insurer shall
provide a copy of any Medicare supplement advertisement intended for use in Kentucky
whether through written, electronic, radio, or television, or any other medium
to the commissioner for review prior to use. Advertisements shall not require
approval prior to use, but an advertisement shall not be used if it has been
disapproved by the commissioner and notice of the disapproval has been given to
the insurer.
(2)
Insurers and agents shall not use the names and addresses of persons purchased
as "leads" unless the solicitation material used to obtain the names
and addresses of the "leads" are filed as advertisement as required
by this section. Insurers and agents shall not use "leads" if the
solicitation materials have been disapproved by the commissioner.
(3)
If a Medicare supplement policy is not delivered by mail, the agent or insurer
shall obtain a signed and dated delivery receipt from the insured. If the
delivery receipt is obtained by an agent, the agent shall forward the delivery
receipts to the insurer.
Section
21. Standards for Marketing. (1) An insurer, directly or through its agents or
other representatives, shall:
(a)
Establish marketing procedures to assure that any comparison of policies by its
agents or other representatives will be fair and accurate.
(b)
Establish marketing procedures to assure excessive insurance is not sold or
issued.
(c)
Display prominently by type, stamp or other appropriate means, on the first
page of the policy the following disclosure:
"Notice
to buyer: This policy may not cover all of your medical expenses."
(d)
Inquire and make every reasonable effort to identify if a prospective applicant
or enrollee for Medicare supplement insurance already has accident and sickness
insurance and the types and amounts of any insurance.
(e)
Establish auditable procedures for verifying compliance with subsection (1) of
this section.
(2)
In addition to the practices prohibited in KRS 304.12 and 806 KAR 12:092, the
following acts and practices shall be prohibited:
(a)
Twisting. Making any unfair or deceptive representation or incomplete or
fraudulent comparison of any insurance policies or insurers for the purpose of
inducing, or tending to induce, any person to lapse, forfeit, surrender,
terminate, retain, pledge, assign, borrow on, or convert an insurance policy or
to take out a policy of insurance with another insurer.
(b)
High pressure tactics. Employing any method of marketing having the effect of
or tending to induce the purchase of insurance through force, fright, threat,
whether explicit or implied, or undue pressure to purchase or recommend the purchase
of insurance.
(c)
Cold lead advertising. Making use of any method of marketing which fails to
disclose in a conspicuous manner that a purpose of the method of marketing is
solicitation of insurance and that contact will be made by an insurance agent
or insurance company.
(3)
The terms "Medicare Supplement," "Medigap," "Medicare
Wrap-Around" and similar words shall not be used unless the policy is
issued in compliance with this administrative regulation.
Section
22. Appropriateness of Recommended Purchase and Excessive Insurance.
(1)
In recommending the purchase or replacement of any Medicare supplement policy
or certificate an agent shall make reasonable efforts to determine the
appropriateness of a recommended purchase or replacement.
(2)
Any sale of a Medicare supplement policy or certificate that will provide an
individual more than one Medicare supplement policy or certificate shall be prohibited.
(3)
An insurer shall not issue a Medicare supplement policy or certificate to an
individual enrolled in Medicare Part C unless the effective date of the
coverage is after the termination date of the individual’s Part C coverage.
Section
23. Reporting of Multiple Policies. (1) On or before March 1 of each year, an insurer
shall report to the commissioner the following information, using HL-MS-2, for
every individual resident of Kentucky for which the insurer has in force more
than one Medicare supplement policy or certificate:
(a)
Policy and certificate number; and
(b)
Date of issuance.
(2)
The items set forth in subsection (1) of this section shall be grouped by
individual policyholder.
Section
24. Prohibition Against Preexisting Conditions, Waiting Periods, Elimination
Periods and Probationary Periods in Replacement Policies or Certificates.
(1)
If a Medicare supplement policy or certificate replaces another Medicare
supplement policy or certificate, the replacing insurer shall waive any time
periods applicable to preexisting conditions, waiting periods, elimination
periods and probationary periods in the new Medicare supplement policy or certificate
to the extent time was spent under the original policy.
(2)
If a Medicare supplement policy or certificate replaces another Medicare
supplement policy or certificate which has been in effect for at least six (6)
months, the replacing policy shall not provide any time period applicable to
preexisting conditions, waiting periods, elimination periods and probationary
periods.
Section
25. Prohibition Against Use of Genetic Information and Requests for Genetic
Testing. This Section shall apply to all policies with policy years beginning
on or after the effective date of this administrative regulation.
(1)
An insurer of a Medicare supplement policy or certificate shall not:
(a)
Deny or condition the issuance or effectiveness of the policy or certificate, including
the imposition of any exclusion of benefits under the policy based on a
pre-existing condition, on the basis of the genetic information with respect to
any individual; and
(b)
Discriminate in the pricing of the policy or certificate, including the
adjustment of premium rates, of an individual on the basis of the genetic
information with respect to any individual.
(2)
Nothing in subsection (1) of this section shall be construed to limit the
ability of an insurer, to the extent permitted by law, from:
(a)
Denying or conditioning the issuance or effectiveness of the policy or
certificate or increasing the premium for a group based on the manifestation of
a disease or disorder of an insured or applicant; or
(b)
Increasing the premium for any policy issued to an individual based on the
manifestation of a disease or disorder of an individual who is covered under
the policy, and the manifestation of a disease or disorder in one individual
cannot also be used as genetic information about other group members and to
further increase the premium for the group.
(3)
An insurer of a Medicare supplement policy or certificate shall not request or
require an individual or a family member of an individual to undergo a genetic
test.
(4)
Subsection (3) of this section shall not be construed to prohibit an insurer of
a Medicare supplement policy or certificate from obtaining and using the
results of a genetic test in making a determination regarding payment, as described
for the purposes of applying the regulations promulgated under part C of title
XI of the Social Security Act, 42 U.S.C.A.
1320d et seq., and section 264 of the Health Insurance Portability and
Accountability Act of 1996, 42 U.S.C. 1320d-2 and consistent with subsection (1)
of this section.
(5)
For purposes of carrying out subsection (4) of this section, an insurer of a
Medicare supplement policy or certificate may request only the minimum amount
of information necessary to accomplish the intended purpose.
(6)
Notwithstanding subsection (3) of this section, an insurer of a Medicare
supplement policy may request, but not require, that an individual or a family
member of the individual undergo a genetic test if each of the following
conditions is met:
(a)
The request shall be made pursuant to research that complies with 45 C.F.R.
part 46, or equivalent Federal regulations, and any applicable state or local
law, or administrative regulations, for the protection of human subjects in research.
(b)
The insurer clearly indicates to each individual, or if a minor child, to the
legal guardian of the child, to whom the request is made that:
1.
Compliance with the request shall be voluntary; and
2.
Noncompliance shall have no effect on enrollment status or premium or
contribution amounts;
(c)
Genetic information collected or acquired under this Subsection shall not be
used for underwriting, determination of eligibility to enroll or maintain
enrollment status, premium rates, or the issuance, renewal, or replacement of a
policy or certificate.
(d)
The insurer notifies the secretary in writing that the insurer is conducting
activities pursuant to the exception provided for under this Subsection,
including a description of the activities conducted.
(e)
The insurer complies with other conditions as the secretary may by federal
regulation require for activities conducted under this subsection.
(7)
An insurer of a Medicare supplement policy or certificate shall not request,
require, or purchase genetic information for underwriting purposes.
(8)
An insurer of a Medicare supplement policy or certificate shall not request,
require, or purchase genetic information with respect to any individual prior
to an individual’s enrollment under the policy in connection with enrollment.
(9)
If an insurer of a Medicare supplement policy or certificate obtains genetic
information incidental to the requesting, requiring, or purchasing of other
information concerning any individual, the request, requirement, or purchase
shall not be considered a violation of subsection (8) of this section if the request,
requirement, or purchase is not in violation of subsection (7) of this section.
Section
26. Incorporated by Reference. (1) The following material is corporate by
reference:
(a)
"HL-MS-1", July 2009 edition;
(b)
"HL-MS-2", July 2009 edition;
(c)
"HL-MS-3", July 2009 edition;
(d)
"HL-MS-4", October 2009 edition;
(e)
"HL-MS-5", July 2009 edition;
(f)
"HL-MS-06", July 2009 edition;
(g)
"HL-MS-07", July 2009 edition; and
(h)
"HL-MS-08", October 2009 edition.
(2)
This material may be inspected, copied, or obtained, subject to applicable
copyright law, at the Kentucky Department of Insurance, 215 West Main Street,
Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.
(3)
Forms may also be obtained on the department’s Web site at http://insurance.ky.gov.
(36 Ky.R. 499; Am. 1064; eff. 1-4-2010.)
