Chapter 3901-8 Health Insurance

3901-8-01 Coordination of benefits.

(A) Authority

This rule is promulgated pursuant to section 3901.041 of the Revised Code, providing that the superintendent of insurance shall adopt, amend and rescind rules and make adjudications necessary to discharge his duties and exercise his powers under Title 39 of the Revised Code; and section 3902.14 of the Revised Code, providing that the superintendent may adopt rules to carry out the purposes of sections 3902.11 to 3902.14 of the Revised Code.

(B) Purpose

The purpose of this rule is to:

(1) Permit plans to include a coordination of benefits "(COB)" provision;

(2) Provide the authority for the orderly transfer of information needed to pay claims promptly;

(3) Eliminate duplication of benefits by permitting a plan to reduce benefits paid when, pursuant to this rule, it is not required to pay its benefits first;

(4) Reduce claim payment delays; and

(5) Further define the "COB" statute.

(C) Definitions

As used in this rule:

(1)

(a) "Allowable expense" means, except as set forth below or otherwise defined by statute, any health care expense, including coinsurance or co-payments and without reduction for any applicable deductible, that is covered in full or in part by any of the plans covering the person.

(b) If a plan is advised by the covered person that all plans covering the person are high-deductible health plans and the person intends to contribute to a health savings account established in accordance with Section 223 of the Internal Revenue Code of 1986, the primary high-deductible health plan's deductible is not an allowable expense, except for any health care expense incurred that may not be subject to the deductible as described in Section 223(c)(2)(C) of the Internal Revenue Code of 1986.

(c) An expense or a portion of an expense that is not covered by any of the plans is not an allowable expense.

(d) Any expense that a provider by law or in accordance with a contractual agreement is prohibited from charging a covered person is not an allowable expense.

(e) The definition of "allowable expense" may exclude certain types of coverage or benefits such as dental care, vision care, prescription drug or hearing aids. A plan that limits the application of "COB" to certain coverages or benefits may limit the definition of allowable expenses in its contract to expenses that are similar to the expenses that it provides. When "COB" is restricted to specific coverages or benefits in a contract, the definition of allowable expense shall include similar expenses to which "COB" applies.

(f) When a plan provides benefits in the form of services, the reasonable cash value of each service will be considered an allowable expense and a benefit paid.

(g) The amount of the reduction may be excluded from allowable expense when a covered person's benefits are reduced under a primary plan:

(i) Because the covered person does not comply with the plan provisions concerning second surgical opinions or precertification of admissions for services; or

(ii) Because the covered person has a lower benefit because the covered person did not use a preferred provider.

(2) "Birthday" means the month and day in a calendar year and does not include the year in which an individual is born.

(3) "Claim" means a request that plan benefits be provided or paid. This term includes a request for:

(a) Services, including supplies;

(b) Payment for all or a portion of expenses incurred;

(c) A combination of paragraphs (C)(3)(a) and (C)(3)(b) of this rule; or

(d) Indemnification.

(4) "Closed panel plan" means a plan that provides health benefits to covered persons primarily in the form of services through a panel of providers that have contracted with or are employed by the plan, and that excludes benefits for services provided by other providers, except in cases of emergency or referral by a panel member.

(5) "Consolidated Omnibus Budget Reconciliation Act of 1985" or "COBRA" means coverage provided under a right of continuation pursuant to federal law.

(6) "Coordination of benefits" or "COB" means a procedure establishing the order in which plans shall pay their claims, and permitting secondary plans to reduce their benefits so that the combined benefits of all plans do not exceed total allowable expenses.

(7) "Custodial parent" means:

(a) The parent awarded custody of a child by a court decree; or

(b) In the absence of a court decree, the parent with whom the child resides more than one half of the calendar year without regard to any temporary visitation.

(8) "Group-type contract" means a contract not available to the general public which is obtained and maintained only because of membership in, or in connection with, a particular organization or group, including blanket coverage. This term shall not include an individually underwritten and issued, guaranteed renewable policy even if purchased through payroll deduction at a premium savings to the insured since the insured would have a right to maintain or renew the policy independently of continued employment with the employer.

(9) "High-deductible health plan" has the meaning given the term under Section 223 of the Internal Revenue Code of 1986, as amended by the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

(10) "Hospital indemnity benefits" means benefits which are not related to actual expenses incurred. The term does not include reimbursement-type benefits even if they are designed or administered to give the insured the right to elect indemnity-type benefits at the time of claim.

(11)

(a) "Plan" means a form of coverage with which coordination is allowed. Separate parts of a plan for members of a group that are provided through alternative contracts that are intended to be part of a coordinated package of benefits are considered one plan and there is no "COB" among the separate parts of the plan.

(b) The definition of plan in a contract shall state the types of coverage which will be considered in applying the "COB" provision of that contract. Whether the contract uses the term "plan" or some other term such as "program", the contractual definition may be no broader than the definition of "plan" in paragraph (C)(11) of this rule.

(c) Plan includes:

(i) Group and non-group insurance and subscriber contracts;

(ii) An uninsured arrangement of group or group-type coverage;

(iii) Group or group-type and non-group coverage through a health insuring corporation, closed panel plan or other prepayment, group practice or individual practice plan;

(iv) Group-type contracts;

(v) The medical care components of long term care contracts, such as skilled nursing care;

(vi) Medical benefits coverage under automobile "no fault" and traditional "fault" type contract; and

(vii) Medicare or other governmental benefits, as permitted by law, except as provided in paragraph (C)(11)(d)(x) of this rule. That part of the definition of plan may be limited to the hospital, medical, and surgical benefits of the governmental program.

(d) The term "plan" shall not include:

(i) Hospital indemnity benefits or other fixed indemnity coverage;

(ii) Accident only coverage or specified accident coverage;

(iii) A supplemental sickness and accident policy excluded from coordination of benefits pursuant to sections 3923.37 and/or 1751.56 of the Revised Code;

(iv) School accident-type coverage;

(v) Benefits provided in long term care insurance policies for non-medical services, for example, personal care, adult day care, homemaker services, assistance with activities of daily living, respite care and custodial care or for contracts that pay a fixed daily benefit without regard to expenses incurred or the receipt of services;

(vi) Medicare supplement policies; or

(vii) A state plan under medicaid, or other governmental plan when, by law, its benefits are in excess of those of any private insurance plan or other non-governmental plan.

(12) "Primary plan" means a plan whose benefits for a person's health care coverage shall be determined without taking the existence of any other plan into consideration. A plan is a primary plan if either of the following conditions is true:

(a) A plan either does not contain order of benefit rules, or it has rules which differ from those permitted by this rule; or

(b) All plans which cover the person use the order of benefits determination required by this rule, and under this rule that plan determines its benefits first.

(13) "School accident-type coverage" means a contract covering elementary, junior high, high school and or college students for accidents only, including athletic injuries, on a twenty-four hour basis or on a "to and from school" basis.

(14) "Secondary plan" means any plan which is not a primary plan. If a person is covered by more than one secondary plan, the order of benefit determination rules of this rule shall determine the order in which their benefits are determined in relationship to each other.

(15) "This plan" means, in a "COB" provision, the part of a contract providing health care benefits to which the "COB" provision applies and which may be reduced because of the benefits of other plans.

(D) Solicitation, certificate and contract provisions

(1) The following language shall be included as a separate and distinct paragraph on the first page in at least one solicitation, marketing, advertising or enrollment document which shall be provided to potential subscribers of a plan subject to this rule and shall be printed in twelve point type:

"WARNING: IF YOU OR YOUR FAMILY MEMBERS ARE COVERED BY MORE THAN ONE HEALTH CARE PLAN, YOU MAY NOT BE ABLE TO COLLECT BENEFITS FROM BOTH PLANS. EACH PLAN MAY REQUIRE YOU TO FOLLOW ITS RULES OR USE SPECIFIC DOCTORS AND HOSPITALS, AND IT MAY BE IMPOSSIBLE TO COMPLY WITH BOTH PLANS AT THE SAME TIME. BEFORE YOU ENROLL IN THIS PLAN, READ ALL OF THE RULES VERY CAREFULLY AND COMPARE THEM WITH THE RULES OF ANY OTHER PLAN THAT COVERS YOU OR YOUR FAMILY."

(2) The following language shall be included as a separate and distinct paragraph on the first page in every contract, policy, certificate/evidence of coverage and summary plan description issued to a beneficiary under a plan subject to this rule, and shall be printed in twelve-point type:

"NOTICE: IF YOU OR YOUR FAMILY MEMBERS ARE COVERED BY MORE THAN ONE HEALTH CARE PLAN, YOU MAY NOT BE ABLE TO COLLECT BENEFITS FROM BOTH PLANS. EACH PLAN MAY REQUIRE YOU TO FOLLOW ITS RULES OR USE SPECIFIC DOCTORS AND HOSPITALS, AND IT MAY BE IMPOSSIBLE TO COMPLY WITH BOTH PLANS AT THE SAME TIME. READ ALL OF THE RULES VERY CAREFULLY, INCLUDING THE COORDINATION OF BENEFITS SECTION, AND COMPARE THEM WITH THE RULES OF ANY OTHER PLAN THAT COVERS YOU OR YOUR FAMILY."

(3) A contract which utilizes "COB" shall contain the "COB" provisions set forth in appendix A to this rule. Changes in words and format may be made to fit the language and style of the rest of the contract or to reflect the difference among plans which provide services, which pay benefits for expenses incurred, and which indemnify. No substantive changes are permitted.

(4) Each certificate issued under a group contract which utilizes "COB" shall contain the "COB" provisions set forth in appendix A to this rule. Changes in words and format may be made to fit the language and style of the rest of the group certificate or to reflect the difference among plans which provide services, which pay benefits for expenses incurred and which indemnify. No substantive changes are permitted.

If a group policyholder or contractholder distributes its own solicitation, marketing, advertising or enrollment documents to its members who are potential subscribers of a plan subject to this rule, then the plan shall make the foregoing language available for use by the group.

(E) Prohibited coordination and benefit design

(1) A contract shall not reduce benefits on the basis that:

(a) Another plan exists and the covered person did not enroll in that plan;

(b) A person is or could have been covered under another plan, except with respect to part B of medicare; or

(c) A person has elected an option under another plan providing a lower level of benefits than another option which could have been elected.

(2) No contract, certificate or policy shall contain a provision that its benefits are "always excess" or "always secondary" to any other plan, except as otherwise provided in this rule.

(3) Under the terms of a closed panel plan, benefits are not payable if the covered person does not use the services of a closed panel plan provider. In most instances, "COB" does not occur if a covered person is enrolled in two or more closed panel plans and obtains services from a provider in one of the closed panel plans because the other closed panel plan (the one whose providers were not used) has no liability. However, "COB" may occur during the plan year when the covered person receives emergency services that would have been covered by both plans. Then the secondary plan shall use the provisions of paragraph (H) of this rule to determine the amount it should pay for the benefit.

(4) No plan may use a "COB" provision, or any other provision that allows it to reduce its benefits with respect to any other coverage its insured may have that does not meet the definition of plan under paragraph (C)(11) of this rule.

(F) Requirements

(1) Allowable expense

(a) When plans have differing allowable expenses, the larger allowable expense shall be used for the purpose of division (C) of section 3902.13 of the Revised Code. When benefits paid by a primary plan are less than the allowable expenses, the secondary plan shall pay or provide its benefits toward any remaining balance otherwise payable by the insured or the certificate holder. A secondary plan shall not be required to make a payment of an amount which exceeds the amount it would have paid if it were the primary plan, but in no event, when combined with the amount paid by the primary plan, shall payments by the secondary plan exceed one hundred per cent of the larger of the expenses allowable under the provisions of the applicable policies and contracts.

(b) When a plan provides benefits in the form of services, the reasonable cash value of each service shall be both an allowable expense and a benefit paid.

(c) When a contract restricts "COB" to specific coverage, allowable expense shall include the expenses or services to which "COB" applies under the contract.

(2) A secondary plan shall not be required to pay for services unless such services are received in accordance with the rules and provisions outlined in its policy, contract or certificate.

(3) A primary plan shall pay or provide its benefits as if the secondary plan does not exist. A plan that does not contain a coordination of benefits provision shall not take into account benefits of other plans. However, a contract holder's coverage which is designed to supplement a part of a basic package of benefits may provide that the supplementary coverage shall be excess to any other parts of the plan provided by that contract holder. Examples of these types of situations are major medical coverages that are superimposed over base plan hospital and surgical benefits, and insurance type coverages that are written in connection with a closed panel plan to provide out-of-network benefits. A plan that does not contain order of benefit determination provisions that are consistent with this rule is always the primary plan unless the provisions of both plans, regardless of the provisions of paragraph (F)(3) of this rule, state that the complying plan is primary.

(4) If the primary plan is a closed panel plan and the secondary plan is not a closed panel plan, the secondary plan shall pay or provide benefits as if it were the primary plan when a covered person uses a non-panel provider, except for emergency services or authorized referrals that are paid or provided by the primary plan.

(5) When multiple contracts providing coordinated coverage are treated as a single plan under this rule, this paragraph applies only to the plan as a whole, and coordination among the component contracts is governed by the terms of the contracts. If more than one carrier pays or provides benefits under the plan, the carrier designated as primary within the plan shall be responsible for the plan's compliance with this rule.

(6) A secondary plan may take the benefits of another plan into account when, under this rule, it is secondary to the other plan.

(7) Nothing in this rule shall be construed to prevent a third party payer and a provider from entering into an agreement under which the provider agrees to accept, as payment in full from any or all plans providing benefits to a beneficiary, an amount which is less than the provider's regular charges.

(G) Order of benefit determination

Order of benefits shall be determined by the first applicable provision set forth in this paragraph:

(1) Non-dependent or dependent. The benefits of a plan covering the person as an employee, member, insured, subscriber or retiree, other than as a dependent, shall be determined before those of a plan which covers the person as a dependent. However, the benefits of a plan covering the person as a dependent shall be determined before the benefits of a plan covering the person as other than a dependent if the person is a medicare beneficiary, and as a result of Title XVIII of the Social Security Act and its implementing regulations:

(a) Medicare is secondary to the plan covering the person as a dependent; and

(b) Medicare is primary to the plan covering the person as other than a dependent (e.g. a retired employee).

(2) Dependent child covered under more than one plan. Unless there is a court decree stating otherwise, plans covering a dependent child shall determine the order of benefits as follows:

(a) For a dependent child whose parents are married (not separated or divorced) or are living together, whether or not they have ever been married:

(i) The plan of the parent whose birthday falls earlier in the calendar year is the primary plan;

(ii) If both parents have the same birthday, the plan which has covered the parent for a longer period of time is the primary plan;

(iii) If one plan does not have the rule described in paragraphs (G)(2)(a)(i) and (G)(2)(a)(ii) of this rule because that plan is not subject to the "COB" statutes, but instead has a rule based upon the gender of the parent; and if, as a result, the plans do not agree on the order of benefits, the plan containing the rule based upon the gender of the parent shall determine the order of benefits.

(b) For a dependent child whose parents are divorced or separated or are not living together, whether or not they have ever been married:

(i) If the specific terms of the court decree state that one of the parents is responsible for the health care expenses or health care coverage of the child, and the plan of that parent has actual knowledge of those terms, that plan is primary. If the parent with responsibility has no health care coverage for the dependent child's health care expenses, but that parent's spouse does, that parent's spouse's plan is the primary plan. This item shall not apply with respect to any plan year during which benefits are paid or provided before the entity has actual knowledge of the court decree provision.

(ii) If a court decree states that both parents are responsible for the dependent child's health care expenses or health care coverage, the provisions of paragraph (G)(2)(a) of this rule shall determine the order of benefits.

(iii) If the specific terms of the court decree state that the parents shall share joint custody, without stating that one of the parents is responsible for the health care expenses or health care coverage of the child, the plans covering the child shall be subject to the order of benefit determination contained in paragraph (G)(2)(a) of this rule.

(iv) If there is no court decree allocating responsibility for the child's health care expenses or health care coverage, the order of benefits for the child are as follows:

(a) The plan covering the custodial parent;

(b) The plan covering the custodial parent's spouse;

(c) The plan covering the non-custodial parent; and then

(d) The plan covering the non-custodial parent's spouse.

(c) For a dependent child covered under more than one plan of individuals who are not the parents of the child, the order of benefits shall be determined, as applicable, under paragraph (G)(2)(a) or (G)(2)(b) of this rule as if those individuals were the parents of the child.

(3) Active employee or retired or laid-off employee. The benefits of a plan which covers a person as an active employee who is neither laid off nor retired, or as that active employee's dependent, is the primary plan. If the other plan does not have this provision, and if, as a result, the plans do not agree on the order of benefits, this provision shall be ignored.

This paragraph does not supersede paragraph (G) (1) of this rule. Coverage provided an individual as a retired worker and as a dependent of that individual's spouse as an active worker will be determined under paragraph (G)(1) of this rule. Paragraph (G)(3) of this rule covers the situation where one individual is covered under one policy as an active worker and under another policy as a retired worker. It would also apply to an individual covered as a dependent under both of those policies.

(4) "COBRA" or state continuation coverage. If a person whose coverage is provided under a right of continuation pursuant to federal or state law also is covered under another plan, the following shall be the order of benefit determination:

(a) The plan covering the person as an employee, member, subscriber or retiree (or as that person's dependent) is the primary plan;

(b) The continuation coverage provided pursuant to federal or state law is the secondary plan. If the other plan does not have the rule described above, and if, as a result, the plans do not agree on the order of benefits, this rule is ignored. This provision does not apply if the order of benefits can be determined under paragraph (G)(1) of this rule.

(5) Longer or shorter length of coverage. If none of the preceding provisions determines the order of benefits, the plan which has covered the person for the longer period of time is the primary plan and the plan which covered that person for the shorter period of time is the secondary plan. For the purposes of this provision:

(a) The time covered under a plan is measured from the claimant's first date of coverage under that plan, or, if that date is not readily available for a group plan, the date the claimant first became a member of the group covered by that plan shall be used as the date from which to determine the length of time the person's coverage under the present plan has been in force;

(b) Two successive plans shall be treated as one if the covered person was eligible under the second plan within twenty-four hours after coverage under the first plan ended;

(c) The start of a new plan does not include:

(i) A change in the amount or scope of a plan's benefits;

(ii) A change in the entity that pays, provides or administers the plan's benefits; or

(iii) A change from one type of plan to another, such as, from a single plan to a multiple employer plan.

(6) If none of the preceding rules determines the order of benefits, the allowable expenses shall be shared equally between the plans.

(H) Procedure to be followed by secondary plan to calculate benefits and pay a claim.

In determining the amount to be paid by the secondary plan on a claim, should the plan wish to coordinate benefits, the secondary plan shall calculate the benefits it would have paid on the claim in the absence of other health care coverage and apply that calculated amount to any allowable expense under its plan that is unpaid by the primary plan. The secondary plan may reduce its payment by the amount so that, when combined with the amount paid by the primary plan, the total benefits paid or provided by all plans for the claim do not exceed one hundred per cent of the total allowable expense for that claim. In addition, the secondary plan shall credit to its plan deductible any amounts it would have credited to its deductible in the absence of other health care coverage.

(I) Miscellaneous provisions

(1) A secondary plan which provides benefits in the form of services may recover the reasonable cash value of the services from a primary plan, to the extent that benefits for the services are covered by, and have not already been paid or provided by the primary plan. Nothing in this paragraph shall be interpreted to require a plan to reimburse a covered person in cash for value of services provided by a plan that provides benefits in the form of services.

(2) A plan with order of benefit determination rules which comply with this rule

(complying plan) may coordinate its benefits with a plan which is "excess" or "always secondary" or which uses order of benefit determination rules which are inconsistent with this rule (non-complying plan) as follows:

(a) If the complying plan is the primary plan, it shall pay or provide its benefits first;

(b) If the complying plan is the secondary plan, it shall pay or provide its benefits first, but the amount of the benefits payable shall be determined as if the complying plan were the secondary plan. Such payment shall be the limit of the complying plan's liability;

(c) If a non-complying plan does not provide the information needed by a complying plan to determine its benefits within a reasonable time after it is requested to do so, the complying plan shall assume that the benefits of the non-complying plan are identical to its own, and shall pay its benefits accordingly. However, if the complying plan receives information within two years of payment as to the actual benefits of the non-complying plan, it shall adjust payments accordingly.

(d) If a non-complying plan which paid or provided benefits as a primary plan reduces its benefits so that a claimant receives less in benefits than he would have received had the complying plan paid or provided its benefits as the secondary plan, the complying plan shall advance to, or on behalf of, the claimant an amount equal to such difference. The amount advanced, combined with other amounts previously paid by the complying plan, shall not exceed the liability of the complying plan as calculated as if the complying plan were the primary plan.

In consideration of the advance, the complying plan shall be subrogated to all rights of the claimant against the non-complying plan. The advance by the complying plan shall be without prejudice to any claim it may have against the non-complying plan in the absence of subrogation.

(3) A term such as "medical care" or "dental care" may be substituted for the term "health care" in describing the coverages to which the "COB" provisions of a contract apply.

(4) Provisions regarding either "COB" or subrogation may be included in a health care benefits contract without compelling the inclusion or exclusion of the other in that contract.

(5) If the plans cannot agree on the order of benefits within thirty calendar days after the plans have received all of the information needed to pay the claim, the plans shall immediately pay the claim in equal shares and determine their relative liabilities following payment, except that no plan shall be required to pay more than it would have paid had it been the primary plan.

(J) This rule is applicable to every contract which provides health care benefits and which was issued on or after the effective date of this rule. A contract which provides health care benefits and was issued before the effective date of this rule shall comply with this rule by:

(1) The later of:

(a) The next anniversary date or renewal date of the contract, whichever is sooner; or

(b) Three hundred sixty-five days following the effective date of the rule; or

(2) The expiration of any applicable collectively bargained contract pursuant to which the contract was written. For the transition period between the adoption of this rule and the timeframe for which plans are to be in compliance pursuant to paragraph (K)(1) of this rule, a plan that is subject to the prior "COB" requirements shall not be considered a non-complying plan by a plan subject to the new "COB" requirements and if there is a conflict between the prior "COB" requirements under the prior rule and the new "COB" requirements under the new rule, the prior "COB" requirements shall apply.

(K) Penalties

Whoever violates this rule or any paragraph thereof shall be deemed to have engaged in an unfair and deceptive insurance act or practice under sections 3901.19 to 3901.26 of the Revised Code, and is subject to proceedings pursuant to those sections.

(L) Severability

If any section, term or provision of this rule is adjudged invalid for any reason, the judgment shall not affect, impair or invalidate any other section, term or provision of this rule, but the remaining sections, terms and provisions shall be and continue in full force and effect.

APPENDIX A

COORDINATION OF THIS CONTRACT'S BENEFITS WITH OTHER BENEFITS

The Coordination of Benefits ("COB") provision applies when a person has health care coverage under more than one Plan. Plan is defined below.

The order of benefit determination rules govern the order in which each Plan will pay a claim for benefits. The Plan that pays first is called the Primary plan. The Primary plan must pay benefits in accordance with its policy terms without regard to the possibility that another Plan may cover some expenses. The Plan that pays after the Primary plan is the Secondary plan. The Secondary plan may reduce the benefits it pays so that payments from all Plans does not exceed 100% of the total Allowable expense.

DEFINITIONS

A. A Plan is any of the following that provides benefits or services for medical or dental care or treatment. If separate contracts are used to provide coordinated coverage for members of a group, the separate contracts are considered parts of the same plan and there is no COB among those separate contracts.

(1) Plan includes: group and nongroup insurance contracts, health insuring corporation ("HIC") contracts, closed panel plans or other forms of group or group-type coverage (whether insured or uninsured); medical care components of long-term care contracts, such as skilled nursing care; medical benefits under group or individual automobile contracts; and Medicare or any other federal governmental plan, as permitted by law.

(2) Plan does not include: hospital indemnity coverage or other fixed indemnity coverage; accident only coverage; specified disease or specified accident coverage; supplemental coverage as described in Revised Code sections 3923.37 and 1751.56 ; school accident type coverage; benefits for non-medical components of long-term care policies; Medicare supplement policies; Medicaid policies; or coverage under other federal governmental plans, unless permitted by law.

Each contract for coverage under (1) or (2) is a separate Plan. If a Plan has two parts and COB rules apply only to one of the two, each of the parts is treated as a separate Plan.

B. This plan means, in a COB provision, the part of the contract providing the health care benefits to which the COB provision applies and which may be reduced because of the benefits of other plans. Any other part of the contract providing health care benefits is separate from this plan. A contract may apply one COB provision to certain benefits, such as dental benefits, coordinating only with similar benefits, and may apply another COB provision to coordinate other benefits.

C. The order of benefit determination rules determine whether This plan is a Primary plan or Secondary plan when the person has health care coverage under more than one Plan.

When This plan is primary, it determines payment for its benefits first before those of any other Plan without considering any other Plan's benefits. When This plan is secondary, it determines its benefits after those of another Plan and may reduce the benefits it pays so that all Plan benefits do not exceed 100% of the total Allowable expense.

D. Allowable expense is a health care expense, including deductibles, coinsurance and copayments, that is covered at least in part by any Plan covering the person. When a Plan provides benefits in the form of services, the reasonable cash value of each service will be considered an Allowable expense and a benefit paid. An expense that is not covered by any Plan covering the person is not an Allowable expense. In addition, any expense that a provider by law or in accordance with a contractual agreement is prohibited from charging a covered person is not an Allowable expense.

The following are examples of expenses that are not Allowable expenses:

(1) The difference between the cost of a semi-private hospital room and a private hospital room is not an Allowable expense, unless one of the Plans provides coverage for private hospital room expenses.

(2) If a person is covered by 2 or more Plans that compute their benefit payments on the basis of usual and customary fees or relative value schedule reimbursement methodology or other similar reimbursement methodology, any amount in excess of the highest reimbursement amount for a specific benefit is not an Allowable expense.

(3) If a person is covered by 2 or more Plans that provide benefits or services on the basis of negotiated fees, an amount in excess of the highest of the negotiated fees is not an Allowable expense.

(4) If a person is covered by one Plan that calculates its benefits or services on the basis of usual and customary fees or relative value schedule reimbursement methodology or other similar reimbursement methodology and another Plan that provides its benefits or services on the basis of negotiated fees, the Primary plan's payment arrangement shall be the Allowable expense for all Plans. However, if the provider has contracted with the Secondary plan to provide the benefit or service for a specific negotiated fee or payment amount that is different than the Primary plan's payment arrangement and if the provider's contract permits, the negotiated fee or payment shall be the Allowable expense used by the Secondary plan to determine its benefits.

(5) The amount of any benefit reduction by the Primary plan because a covered person has failed to comply with the Plan provisions is not an Allowable expense. Examples of these types of plan provisions include second surgical opinions, precertification of admissions, and preferred provider arrangements.

E. Closed panel plan is a Plan that provides health care benefits to covered persons primarily in the form of services through a panel of providers that have contracted with or are employed by the Plan, and that excludes coverage for services provided by other providers, except in cases of emergency or referral by a panel member.

F. Custodial parent is the parent awarded custody by a court decree or, in the absence of a court decree, is the parent with whom the child resides more than one half of the calendar year excluding any temporary visitation.

ORDER OF BENEFIT DETERMINATION RULES

When a person is covered by two or more Plans, the rules for determining the order of benefit payments are as follows:

A. The Primary plan pays or provides its benefits according to its terms of coverage and without regard to the benefits of under any other Plan.

B.

(1) Except as provided in Paragraph (2), a Plan that does not contain a coordination of benefits provision that is consistent with this regulation is always primary unless the provisions of both Plans state that the complying plan is primary.

(2) Coverage that is obtained by virtue of membership in a group that is designed to supplement a part of a basic package of benefits and provides that this supplementary coverage shall be excess to any other parts of the Plan provided by the contract holder. Examples of these types of situations are major medical coverages that are superimposed over base plan hospital and surgical benefits, and insurance type coverages that are written in connection with a Closed panel plan to provide out-of-network benefits.

C. A Plan may consider the benefits paid or provided by another Plan in calculating payment of its benefits only when it is secondary to that other Plan.

D. Each Plan determines its order of benefits using the first of the following rules that apply:

(1) Non-Dependent or Dependent. The Plan that covers the person other than as a dependent, for example as an employee, member, policyholder, subscriber or retiree is the Primary plan and the Plan that covers the person as a dependent is the Secondary plan. However, if the person is a Medicare beneficiary and, as a result of federal law, Medicare is secondary to the Plan covering the person as a dependent, and primary to the Plan covering the person as other than a dependent (e.g. a retired employee), then the order of benefits between the two Plans is reversed so that the Plan covering the person as an employee, member, policyholder, subscriber or retiree is the Secondary plan and the other Plan is the Primary plan.

(2) Dependent child covered under more than one plan. Unless there is a court decree stating otherwise, when a dependent child is covered by more than one Plan the order of benefits is determined as follows:

(a) For a dependent child whose parents are married or are living together, whether or not they have ever been married:

- The Plan of the parent whose birthday falls earlier in the calendar year is the Primary plan; or

- If both parents have the same birthday, the Plan that has covered the parent the longest is the Primary plan.

- However, if one spouse's plan has some other coordination rule (for example, a "gender rule" which says the father's plan is always primary), we will follow the rules of that plan.

(b) For a dependent child whose parents are divorced or separated or not living together, whether or not they have ever been married:

(i) If a court decree states that one of the parents is responsible for the dependent child's health care expenses or health care coverage and the Plan of that parent has actual knowledge of those terms, that Plan is primary. This rule applies to plan years commencing after the Plan is given notice of the court decree;

(ii) If a court decree states that both parents are responsible for the dependent child's health care expenses or health care coverage, the provisions of Subparagraph (a) above shall determine the order of benefits;

(iii) If a court decree states that the parents have joint custody without specifying that one parent has responsibility for the health care expenses or health care coverage of the dependent child, the provisions of Subparagraph (a) above shall determine the order of benefits; or

(iv) If there is no court decree allocating responsibility for the dependent child's health care expenses or health care coverage, the order of benefits for the child are as follows:

- The Plan covering the Custodial parent;

- The Plan covering the spouse of the Custodial parent;

- The Plan covering the non-custodial parent; and then

- The Plan covering the spouse of the non-custodial parent.

(c) For a dependent child covered under more than one Plan of individuals who are not the parents of the child, the provisions of Subparagraph (a) or (b) above shall determine the order of benefits as if those individuals were the parents of the child.

(3) Active employee or retired or laid-off employee. The Plan that covers a person as an active employee, that is, an employee who is neither laid off nor retired, is the Primary plan. The Plan covering that same person as a retired or laid-off employee is the Secondary plan. The same would hold true if a person is a dependent of an active employee and that same person is a dependent of a retired or laid-off employee. If the other Plan does not have this rule, and as a result, the Plans do not agree on the order of benefits, this rule is ignored. This rule does not apply if the rule labeled D(1) can determine the order of benefits.

(4) COBRA or state continuation coverage. If a person whose coverage is provided pursuant to COBRA or under a right of continuation provided by state or other federal law is covered under another Plan, the Plan covering the person as an employee, member, subscriber or retiree or covering the person as a dependent of an employee, member, subscriber or retiree is the Primary plan and the COBRA or state or other federal continuation coverage is the Secondary plan. If the other Plan does not have this rule, and as a result, the Plans do not agree on the order of benefits, this rule is ignored. This rule does not apply if the rule labeled D(1) can determine the order of benefits.

(5) Longer or shorter length of coverage. The Plan that covered the person as an employee, member, policyholder, subscriber or retiree longer is the Primary plan and the Plan that covered the person the shorter period of time is the Secondary plan.

(6) If the preceding rules do not determine the order of benefits, the Allowable expenses shall be shared equally between the Plans meeting the definition of Plan. In addition, This plan will not pay more than it would have paid had it been the Primary plan.

EFFECT ON THE BENEFITS OF THIS PLAN

A. When This plan is secondary, it may reduce its benefits so that the total benefits paid or provided by all Plans during a plan year are not more than the total Allowable expenses. In determining the amount to be paid for any claim, the Secondary plan will calculate the benefits it would have paid in the absence of other health care coverage and apply that calculated amount to any Allowable expense under its Plan that is unpaid by the Primary plan. The Secondary plan may then reduce its payment by the amount so that, when combined with the amount paid by the Primary plan, the total benefits paid or provided by all Plans for the claim do not exceed the total Allowable expense for that claim. In addition, the Secondary plan shall credit to its plan deductible any amounts it would have credited to its deductible in the absence of other health care coverage.

B. If a covered person is enrolled in two or more Closed panel plans and if, for any reason, including the provision of service by a non-panel provider, benefits are not payable by one Closed panel plan, COB shall not apply between that Plan and other Closed panel plans.

RIGHT TO RECEIVE AND RELEASE NEEDED INFORMATION

Certain facts about health care coverage and services are needed to apply these COB rules and to determine benefits payable under This plan and other Plans. [Organization responsible for COB administration] may get the facts it needs from or give them to other organizations or persons for the purpose of applying these rules and determining benefits payable under This plan and other Plans covering the person claiming benefits. [Organization responsible for COB administration] need not tell, or get the consent of, any person to do this. Each person claiming benefits under This plan must give [Organization responsible for COB administration] any facts it needs to apply those rules and determine benefits payable.

FACILITY OF PAYMENT

A payment made under another Plan may include an amount that should have been paid under This plan. If it does, [Organization responsible for COB administration] may pay that amount to the organization that made that payment. That amount will then be treated as though it were a benefit paid under This plan. [Organization responsible for COB administration] will not have to pay that amount again. The term "payment made" includes providing benefits in the form of services, in which case "payment made" means the reasonable cash value of the benefits provided in the form of services.

RIGHT OF RECOVERY

If the amount of the payments made by [Organization responsible for COB administration] is more than it should have paid under this COB provision, it may recover the excess from one or more of the persons it has paid or for whom it has paid, or any other person or organization that may be responsible for the benefits or services provided for the covered person. The "amount of the payments made" includes the reasonable cash value of any benefits provided in the form of services.

COORDINATION DISPUTES

If you believe that we have not paid a claim properly, you should first attempt to resolve the problem by contacting us. [Insert plan's phone number and website] (For health insuring corporations, reference evidence of coverage's description of appeal procedures). If you are still not satisfied, you may call the Ohio Department of Insurance for instructions on filing a consumer complaint. Call 1-800-686-1526, or visit the Department's website at http://insurance.ohio.gov.

Replaces: 3901-1-56

R.C. 119.032 review dates: 01/08/2014 and 08/31/2018
Promulgated Under: 119.03
Statutory Authority: 3901.041 , 3902.14
Rule Amplifies: 3902.11 to 3902.14
Prior Effective Dates: 1/1/1993, 3/28/2004, 11/14/2008

3901-8-02 Provider discounts.

(A) Purpose

This rule sets the requirements that third party payers shall follow if the third party payer receives any discount from billed charges from a health care provider.

(B) Authority

This rule is issued pursuant to the authority vested in the superintendent of insurance under section 3901.041 of the Revised Code, general rule making authority; and sections 3901.19 to 3901.22 of the Revised Code, the unfair and deceptive acts statute.

(C) Definitions

(1) "Discount" means any negotiated reduction or variation from the schedule of billed charges (including capitation) that a health care provider otherwise would require a patient and/or the patient's third party payer to pay to that health care provider.

(2) "Billed charges" means the non-discounted schedule of charges for services that the health care provider would use to invoice a patient for services rendered.

(3) "Third party payer" means any of the following:

(a) An insurance company;

(b) A preferred provider organization;

(c) A labor organization;

(d) An employer;

(e) An administrator subject to sections 3959.01 to 3959.16 of the Revised Code;

(f) A multiple employer welfare arrangement subject to sections 1739.01 to 1739.99 of the Revised Code.

(g) Any other person that is obligated pursuant to a benefits contract to reimburse for covered health care services to beneficiaries under such contract, except that "third party payer" does not include a health insuring corporation licensed pursuant to Chapter 1751. of the Revised Code.

(4) "Reasonable cash value" means the amount the third party payer would reimburse the patient or health care provider in the absence of a capitation agreement.

(D) Prohibited activity

No third party payer that has a negotiated discount with a health care provider, shall do the following:

(1) Fail to disclose the existence of such discount to any policy holder, certificate holder, subscriber or enrollee who has purchased health care coverage from the third party payer. Such disclosure shall be contained in the body of the insurance contract, and the certificate if the contract is a group insurance program. Only disclosure of the existence of such discount is required, disclosure of the extent of the discount is not required.

(2) Fail to calculate any annual or lifetime maximums only on the basis of actual payments made to non-capitated health care providers. For capitated health care providers the reasonable cash value of the services provided shall be used to calculate annual or lifetime maximums.

(3) Fail to maintain adequate records of the compliance with this rule.

(E) Penalties

Failure to comply with the requirements of paragraph (D) of this rule is an unfair and deceptive practice within the meaning of section 3901.21 of the Revised Code.

(F) Severability

If any section, term or provision of this rule is judged invalid for any reason, such judgment shall not affect, impair or invalidate any other section, term or provision of this rule, but the remaining sections, terms and provisions shall be and continue in full force and effect.

Replaces: 3901-1-04

R.C. 119.032 review dates: 01/08/2014 and 08/31/2018
Promulgated Under: 119.03
Statutory Authority: 3901.041 , 3901.21
Rule Amplifies: 3901.19 to 3901.22
Prior Effective Dates: 3/1/1999, 11/14/2008

3901-8-03 Standardized health claim form rule.

(A) Purpose

The purpose of this rule is to standardize the forms used in the billing and reimbursement of health care, reduce the number of forms utilized, increase efficiency in the reimbursement of health care through standardization and encourage the use of electronic data interchange of health care expenses and reimbursement.

(B) Authority

This rule is promulgated pursuant to the authority vested in the superintendent under sections 3901.041 , 3902.22 , and 3901.19 to 3901.22 of the Revised Code.

(C) Definitions

As used in this rule

(1) "CDT codes" means the most current dental terminology and codes prescribed by the American dental association.

(2) "Claim" means any request submitted to a third-party payer for benefits or proceeds under a benefit plan or contract on a standardized health claim form as described in paragraph (E)(3) or (E)(4) of this rule.

(3) "CPT codes" means the most current procedural terminology and codes as published by the American medical association.

(4) "CMS" means the centers for medicare and medicaid services of the U.S.department of health and human services formerly known as the federal health care financing administration of the U.S. department of health and human services (HCFA).

(5) "CMS Form 1450" means the health insurance claim form published by CMS for use by institutional care practitioners. For purposes of this rule, the CMS form 1450 includes the UB-04 form and its successors.

(6) "CMS Form 1500" means the health insurance claim form published by CMS for use by health care practitioners. For purposes of this rule, the CMS Form 1500 will include successor forms as approved by CMS.

(7) "HCPCS" means CMS's common procedure coding system which is based upon the AMA's most current CPT publication.

(a) "HCPCS Level 1 codes" means the AMA's CPT codes with the exception of anesthesiology services;

(b) "HCPCS Level 2 codes" means the codes for physician and non-physician services which are not included in the most current CPT publication;

(c) "HCPCS Level 3 codes" means the codes for services needed by individual contractors or state agencies to process claims. They are used for items and services not having the frequency of use, geographic distribution, or general applicability needed to justify a code assignment at a higher level.

(8) "Health care practitioner" means:

(a) A chiropractor licensed under Chapter 4734. of the Revised Code;

(b) A corporation or partnership of health care practitioners defined in this rule;

(c) A dentist licensed under Chapter 4715. of the Revised Code;

(d) A dietitian licensed under Chapter 4759. of the Revised Code;

(e) A nurse licensed under Chapter 4723. of the Revised Code;

(f) An optometrist licensed under Chapter 4725. of the Revised Code;

(g) A physician as defined under section 4730.01 of the Revised Code;

(h) A podiatrist licensed under Chapter 4731. of the Revised Code;

(i) A psychologist licensed under Chapter 4732. of the Revised Code;

(j) A therapist, including speech, physical, respiratory and occupational therapists licensed under Chapter 4753., 4755. or 4761. of the Revised Code.

(9) "ICD-9-CM codes" means the disease codes in the most current international classification of diseases, clinical modifications published by the U.S. department of health and human services. Effective October 1, 2013, ICD-9-CM codes are scheduled to be displaced by ICD-10-CM codes. At that time, or other date by which the change is made effective, references to ICD-9-CM will be changed to ICD-10-CM.

(10) "Institutional care practitioner" means:

(a) A hospice licensed under Chapter 3712. of the Revised Code;

(b) A hospital as defined under section 3727.01 of the Revised Code;

(c) A skilled nursing facility, extended care facility, intermediate care facility, convalescent nursing home, or adult care facility licensed under Chapters 3721. and 3722. of the Revised Code.

(11) "J400 form" means the uniform dental claim form approved by the American dental association for use by dentists. For purposes of this rule, the J400 form shall include its successors.

(12) "Medicare" means Title XVIII of the federal Social Security Act ( 42 U.S.C. 1395 ).

(13) "NCPDP universal claim form" means the form adopted for use by the national council for prescription drug programs, including numbers PUCFCC and PUCF2PT and its successors.

(14) "Other provider" means a supplier of health care services or supplies not meeting the definition of health care practitioner or institutional care practitioner, including but not limited to a pharmacist, physician assistant, nurse aide, or supplier of durable medical equipment.

(15) "Third-party payer" is as defined in section 3901.38 of the Revised Code.

(D) Applicability and scope

Except as otherwise specifically provided, the requirements of this rule apply to all issuers of policies or contracts of insurance, administrators of self-funded employee benefit plans, and other forms of coverage involved in the reimbursement of health care expenses, and all health care and institutional care practitioners licensed by this state. It is not to cover claims involving medicare, parts A or B; medicaid, the tricare program or workers' compensation insurance. Nothing herein shall be construed to create or imply a private cause of action for violation of this rule.

(E) General provisions

(1) A health care practitioner, institutional care practitioner, or other provider that submits a paper claim shall use the CMS 1500, UB-04/CMS-1450, NCPDP universal claim form or the J400 claim forms (and their successor forms) which, for the purpose of this rule, are deemed approved for use in this state.

(2) A health care practitioner, institutional care practitioner, or other provider that submits an electronic claim shall do so as provided in federal regulations for electronic transactions, codified at 45 CFR Parts 160 and 162.

(3) Third-party payers transacting business in this state shall accept paper claims submitted on the CMS 1500, UB-40/CMS-1450, NCPDP universal claim form or the J400 claim forms (and their successor forms) which, for the purpose of this rule, are deemed approved for use in this state.

(4) Third-party payers transacting business in this state shall also accept electronic claims submitted as provided in federal regulations for electronic transactions, codified at 45 CFR Parts 160 and 162.

(5) Nothing in this regulation shall prohibit a third-party payer and an institutional care practitioner, health care practitioner or other provider from entering into a mutual agreement regarding the submission of claims to the third-party payer.

(6) All health care practitioners and institutional care practitioners shall:

(a) Use the most current editions of the CMS form 1500, CMS form 1450 or J400 and most current instructions for these forms in filing paper claims with third-party payers.

(b) Modify their billing practices to encompass the coding changes for all billing and claim filing by the effective date of the changes set forth by the developers of the forms, codes and procedures required under this rule;

(7) Nothing in this regulation shall prevent a third-party payer from requesting supporting documentation as described in section 3901.381 of the Revised Code.

(F) Requirements for use of CMS form 1500

(1) Health care practitioners, other than dentists, shall use the CMS form 1500 and instructions provided by CMS for use of the CMS form 1500 when filing paper claims with third-party payers for professional services.

(2) A third-party payer may not require a health care practitioner to use any coding system for the filing of claims for health care services other than the following:

(a) HCPCS Codes (and their successors);

(b) ICD-9-CM Codes (and their successors);

(c) CPT Codes (and their successors).

(d) Other codes as accepted by the national uniform claim committee.

(3) For anesthesia services use HCPCS level 1 codes for anesthesia.

(4) Third party payers may accept the American society of anesthesiologists relative value guide codes for anesthesia services if mutually agreed to with the provider.

(5) A third-party payer may not require a health care practitioner to use any other descriptor with a code or to furnish additional information with the initial submission of a CMS form 1500 except under the following circumstances:

(a) When the procedure code used describes a treatment or service which is not otherwise classified; or

(b) When the procedure code is followed by the CPT modifier 22, 52 or 99. A health care practitioner may use item 19 of the CMS form 1500 to explain the multiple modifiers.

(6) A health care practitioner may use box 19 of the CMS form 1500 to indicate the form is an amended version of a form previously submitted to the third-party payer by inserting the word "amended" in the space provided. If the CMS form 1500 is submitted electronically, adjustments or amendments can be accepted electronically.

(7) A health care practitioner billing for services based on the amount of time involved shall indicate the number of units in item 24 g of the CMS form 1500 if it is not used to specify the number of days of treatment.

(8) Third-party payers shall provide reimbursement to health care practitioners and other providers using the first that applies:

(a) National provider identifier (NPI);

(b) Federal tax identification number;

(c) Social security number.

(G) Requirements for use of CMS form 1450/UB-04

(1) Institutional care practitioners shall use the CMS form 1450 and instructions provided by CMS for use of the CMS form 1450 when filing paper claims with third-party payers for professional services.

(2) A third-party payer may not require an institutional care practitioner to use any coding system for the filing of claims for health care services other than the following:

(a) ICD-9-CM codes (and their successors);

(b) HCPCS level 1 codes (and their successors);

(c) HCPCS level 2 codes (and their successors);

(d) HCPCS level 3 codes (and their successors); and

(e) Other codes as accepted by the national uniform billing committee;

(f) If charges include direct service of a health care practitioner, the information outlined in paragraph (E) of this rule.

(3) Institutional care practitioners shall specify the license number of physical therapists and other health care professionals rendering services designated as physical therapy in block 83 of CMS form 1450.

(H) Requirements for use of J400 form:

(1) A dentist shall use the J400 form and instructions, or its successors, provided by the American dental association for billing patients or their representatives directly and filing paper claims with third-party payers for professional services;

(2) A third-party payer may not require a dentist to use any code other than the CDT codes, or their successors, for the filing of claims for dental care services.

(I) Requirements for use of NCPDP universal claim form

A pharmacist shall use the NCPDP universal claim form, or its successors, to submit paper claims with third party payers.

(J) Penalties

Failure to comply with any requirements of paragraphs (E) to (I) of this rule is an unfair and deceptive practice within the meaning of section 3901.21 of the Revised Code.

(K) Severability

If any paragraph, term or provision of this rule is adjudged invalid for any reason, the judgment shall not affect, impair or invalidate any other paragraph, term or provision of this rule, but the remaining paragraphs, terms and provisions shall be and continue in full force and effect.

Replaces: 3901-1-59

Effective: 07/01/2012
R.C. 119.032 review dates: 08/31/2016
Promulgated Under: 119.03
Statutory Authority: 3901.041 , 3901.21 , 3902.22
Rule Amplifies: 3901.21 , 3901.38 to 3901.3813 , 3902.22 , 3902.23
Prior Effective Dates: 1/8/1994, 1/1/1996, 10/28/2002, 4/5/2007

3901-8-04 Accreditation of independent review organizations.

(A) Purpose

The purpose of this rule is to govern the accreditation and operation of independent review organizations.

(B) Authority

This rule is issued pursuant to the authority vested in the superintendent under sections 3901.011 , 3901.04 , 3901.041 , 3901.19 to 3901.26 and 3922.22 of the Revised Code.

(C) Applicability and scope

Except as otherwise provided, this rule shall apply to:

(1) Health plan issuers as defined in section 3922.01 of the Revised Code; and

(2) Independent review organizations as defined in section 3922.01 of the Revised Code seeking accreditation or accredited by the superintendent to conduct external reviews on behalf of health plan issuers on or after January 1, 2012.

(D) Definitions

For purposes of this rule, the terms have the same meanings as those in Chapter 3922. of the Revised Code.

(E) General information

(1) Each applicant for accreditation shall submit to the superintendent current verification of their accreditation by a national organization that accredits organizations providing expert reviews and related services, and shall certify compliance with relevant Ohio law on a form prescribed by the superintendent.

(2) If there are no acceptable nationally recognized private accrediting entities providing independent review organization accreditation, each applicant for accreditation by the superintendent shall apply on a form prescribed by the superintendent and provide the information set forth in paragraphs (E)(3) and (E)(4) of this rule.

(3) The independent review organization shall provide to the superintendent a certified statement from an officer of the independent review organization that the independent review organization is in compliance with divisions (B) and (C)(1) of section 3922.14 of the Revised Code concerning prohibited affiliations.

(4) The independent review organization shall provide to the superintendent:

(a) A description of the areas of expertise available from the independent review organization and the number of clinical reviewers with expertise in each area, including subspecialties;

(b) A description of the methods of recruiting and selecting impartial clinical reviewers and matching the clinical reviewers to specific cases;

(c) A description of the policies and procedures for orientation and training of the clinical reviewers who perform external reviews;

(d) A description of the procedures employed to ensure that clinical reviewers conducting external reviews meet all of the requirements in section 3922.15 of the Revised Code;

(e) A description of the policies and procedures employed to protect the confidentiality of individual medical and treatment records, personal information, and protected health information in accordance with state and federal laws;

(f) A description of the procedures to ensure that the independent review organization, clinical reviewer(s) or health care provider(s) do not have any prohibited affiliations as outlined in divisions (B) and (C)(1) of section 3922.14 of the Revised Code;

(g) A description of the procedures to ensure that no conflict of interest exists in accordance with paragraph (G) of this rule;

(h) A description of the quality assurance program as outlined in section 3922.14 of the Revised Code and including the requirements of paragraph (H)(2) of this rule;

(i) A description of the procedures for compliance with division (A)(2) of section 3922.14 of the Revised Code ensuring that appropriate personnel and systems are accessible and available twenty-four hours per day, seven days per week to receive and respond to a notice of selection for an external review and provide appropriate instructions;

(j) Any other information the superintendent believes necessary to ensure that the independent review organization meets all of the requirements stated in Chapter 3922. of the Revised Code.

(k) All policies and procedures described in paragraph (E) of this rule shall be documented and available for inspection upon request of the superintendent.

(F) Confidentiality requirements

(1) An independent review organization shall preserve the confidentiality of individual medical and treatment records, personal information, and protected health information as defined in division (U) of section 3922.01 of the Revised Code. This includes but is not limited to:

(a) Name;

(b) Address;

(c) Telephone number;

(d) Social security number;

(e) Medical history, diagnosis, prognosis, or medical condition; and

(f) Financial information.

(2) An independent review organization may not disclose or publish individual medical and treatment records, personal information, protected health information, or other confidential information about a covered person without the prior written consent of the covered person or as otherwise required by law. An independent review organization may provide confidential information to a third party under contract or affiliated with the independent review organization for the sole purpose of performing the external review. Information provided to such third parties shall remain confidential.

(3) The independent review organization shall maintain policies and procedures to protect the confidentiality of individual medical and treatment records, personal information, and protected health information in accordance with state and federal laws.

(4) An independent review organization shall preserve the confidentiality of proprietary information of the health plan issuer and shall not disclose such information without the prior written consent of the company or as otherwise required by law.

(5) All policies and procedures described in paragraph (F) of this rule shall be documented and available for inspection upon request of the superintendent.

(G) Conflicts of interest

(1) The independent review organization shall maintain policies and procedures ensuring that:

(a) No clinical reviewer or health care provider with which the clinical reviewer is affiliated shall have any prohibited affiliation as outlined in divisions (B) and (C)(1) of section 3922.14 of the Revised Code; and

(b) No conflict of interest exists among:

(i) The independent review organization and its clinical reviewers;

(ii) The independent review organization and the health plan issuer or any officer, director, or managerial employee of the health plan issuer; and

(iii) The independent review organization and the parties involved in the case under review.

(2) All policies and procedures described in paragraph (G) of this rule shall be documented and available for inspection upon request of the superintendent.

(H) Administrative and operational policies and procedures

(1) The independent review organization shall retain the services of a physician currently licensed and in good standing to practice medicine by a state licensing agency in the United States to provide medical oversight of the external review process.

(2) The independent review organization shall develop and maintain written policies and procedures that govern all aspects of both the standard external review process and the expedited external review process set forth in Chapter 3922. of the Revised Code, including a quality assurance mechanism that does all of the following:

(a) Ensures that external reviews are conducted within the time frames prescribed under Chapter 3922. of the Revised Code and that the required notices are provided in a timely manner;

(b) Ensures the selection of qualified and impartial clinical reviewers to conduct external reviews on behalf of the independent review organization;

(c) Ensures that chosen clinical reviewers are suitably matched according to their area of expertise to specific cases and that the independent review organization employs or contracts with an adequate number of clinical reviewers to meet this requirement;

(d) Ensures the confidentiality of medical and treatment records and clinical review criteria;

(e) Ensures that any person employed by, or who is under contract with, the independent review organization adheres to the requirements of Chapter 3922. of the Revised Code;

(f) Ensures that the external reviews and recommendations provided by the clinical reviewers are based on sound clinical evidence and take into consideration the information identified in Chapter 3922. of the Revised Code; and

(g) Ensures that external reviews and recommendations are clear and monitored by the independent review organization for quality on an ongoing basis.

(3) All administrative and operational policies and procedures described in paragraph (H) of this rule shall be documented and available for inspection upon request of the superintendent.

(I) Application examinations

The superintendent or designee may conduct onsite or offsite qualifying examinations of independent review organizations pursuant to sections 3901.011 and 3901.04 of the Revised Code at the expense of the independent review organization. All documents shall be available for inspection at the time of any qualifying examination at the administrative offices of the independent review organization.

(J) Amendments

(1) The independent review organization shall report to the superintendent any material changes in the information in the application or renewal, not later than the thirtieth day before the date on which the change takes effect. This would include but not be limited to notifying the superintendent immediately upon the occurrence of any change to the independent review organization's accreditation to perform external reviews and related services by a national accrediting organization.

(2) Each accredited independent review organization shall notify the superintendent of a change of significant information, including but not limited to, contact information and available areas of expertise, including subspecialties, as soon as possible, but no later than thirty days after a change.

(K) Renewal and examinations

(1) Each accredited independent review organization shall annually apply for renewal of its accreditation in the form prescribed by the superintendent not later than sixty days before the anniversary date of the issuance of the accreditation. Each accredited independent review organization shall include a certification that no material changes exist that have not already been filed with the superintendent. This would include but not be limited to the occurrence of any change to the independent review organization's accreditation to perform external reviews and related services by a national accrediting organization.

(2) The superintendent or designee may conduct periodic examinations and random audits pursuant to sections 3901.011 and 3901.04 of the Revised Code once an independent review organization has been accredited, to verify compliance with the standards specified in this rule and the Revised Code. These examinations and audits shall be at the expense of the independent review organization. All documents shall be available for inspection at the time of any examination or audit at the administrative offices of the independent review organization. Independent review organizations shall maintain all records concerning external reviews for at least three years after conclusion of each external review.

(3) The superintendent or designee shall have authority to investigate complaints made regarding independent review organizations by covered persons, any authorized representatives, health plan issuers, and health care providers.

(L) Experts

The superintendent may retain third parties, at the expense of the independent review organization, to execute the powers granted to the superintendent including, but not limited to, periodic examinations and random audits.

(M) Termination

(1) An accredited independent review organization may request termination of its accreditation by written or electronic notice to the superintendent at least thirty days prior to the effective date of the termination. No termination of an independent review organization under paragraph (M)(1) of this rule shall be effective until all pending external reviews assigned to that independent review organization have been completed.

(2) The superintendent may immediately revoke accreditation upon receipt of information, including, but not limited to, information filed under paragraph (K) of this rule, if the information is such that the superintendent would not have accredited the independent review organization if that information had been part of the initial application.

(N) Prohibited practices

(1) An independent review organization shall not, with respect to external review activities, permit or provide compensation or anything of value to its employees, agents, or contractors that, directly or indirectly, encourages the affirmation or reversal of an adverse determination.

(2) An independent review organization shall not, with respect to external review activities, accept compensation, other than payment for the cost of the review, or anything of value from any party.

(3) No agreement or contract between an independent review organization and a health plan issuer shall contain any provisions that violate this rule or the Revised Code.

(4) An independent review organization shall not, with respect to external review activities, permit or provide compensation or anything of value to a health plan issuer.

(5) Failure of an independent review organization or health plan issuer to comply with any provision of this rule or the Revised Code shall be an unfair and deceptive trade practice under sections 3901.19 to 3901.26 of the Revised Code.

(O) Payment

The cost of an external review shall be borne by the health plan issuer. No covered person shall be required to pay for any part of the cost of the review.

(P) Severability

If any paragraph, term or provision of this rule is adjudged invalid for any reason, the judgment shall not affect, impair, or invalidate any other paragraph, term or provision of this rule, but the remaining paragraphs, terms and provisions shall continue in full force and effect.

Replaces: 3901-8-04

R.C. 119.032 review dates: 08/26/2014 and 08/26/2019
Promulgated Under: 119.03
Statutory Authority: 3901.011 , 3901.04 , 3901.041 , 3901.19 to 3901.26 , 3922.22
Rule Amplifies: 3901.19 to 3901.22 , Chapter 3922., 3922.13 to 3922.15
Prior Effective Dates: 2/17/2000, 12/31/2008, 1/1/2012

3901-8-05 Regulation of third party administrators.

(A) Authority and purpose

Authority. Section 3901.041 of the Revised Code provides that the superintendent of insurance shall adopt, amend, and rescind rules and make adjudications necessary to discharge his duties and exercise his powers under Title XXXIX of the Revised Code. This rule is promulgated under authority to provide for the regulation of third party administrators authorized by sections 3959.01 to 3959.16 , and 3959.99 of the Revised Code.

Purpose. Sections 3959.01 to 3959.16 and 3959.99 of the Revised Code establish regulatory standards for third party administrators. The purpose of this rule is to define the additional standards and procedures the superintendent of insurance has adopted.

(B) Definitions. As used in this rule:

(1) "Third party administrator" means any person that adjusts or settles claims in connection with life, dental, vision, health or disability insurance plans, self-insurance programs or other benefit plans for a sponsor of a plan if either the sponsor or the plan is domiciled in this state or has its principal headquarters or principal administrative offices in this state.

"Third party administrator" does not include any of the following:

(a) An insurance agent or solicitor licensed in this state whose activities are limited exclusively to the sale of insurance and who does not provide any administrative services;

(b) Any person who administers or operates exclusively the workers' compensation program of an employer who has been granted self-insurance status pursuant to section 4123.35 of the Revised Code;

(c) Any person who administers pension plans for the benefit of its own members or employees or administers pension plans for the benefit of the members or employees of any other person;

(d) Any person that administers an insured plan, a self-insurance program, or other benefit plans in connection with life, vision, dental, health, or disability benefits exclusively for the person's own members or employees; and

(e) Any health insuring corporation organized under Chapter 1751. of the Revised Code, or an insurance company that is authorized to write life or sickness and accident insurance in this state.

(2) "Administrative services" means services to adjust or settle claims.

(3) "Adjusts or settles claims" means the investigation, adjustment, denial, settlement or payment of claims in connection with life, dental, vision, health or disability insurance plans, self-insurance programs or other benefit plans. For the purpose of this rule, self-insurance programs and benefit plans shall include those plans established under Section 125 of the Internal Revenue Code.

(4) "Alien corporation" means any corporation whose place of origin is in any country other than the United States and its territories.

(5) "Benefit plan" or "plan" means any arrangement in written form for the payment of life, dental, vision, health or disability benefits to covered persons as defined by the summary plan description. Government entities, excluding federal government, are considered sponsors of plans and government employee benefit plans are "plans" for the purposes of this rule.

(6) "Plan participant" means any individual who is eligible to receive benefits through a plan or trust established by a plan sponsor.

(7) "Person" includes, without limitation, a natural person, a corporation (whether nonprofit or for profit), a partnership, a limited liability company, a sole proprietor, an unincorporated society or association, and two or more third party administrators having a joint or common interest.

(8) "Self-insurance Program" or "self-insured plan" means a program whereby an employer provides a plan of benefits for its employees without involving an intermediate insurance carrier to assume risk or pay claims. "Self-insurance program" and "self-insured plan" includes, but is not limited to, employer programs that pay claims up to a prearranged limited beyond which they purchase insurance coverage to protect the plan against unpredictable or catastrophic losses.

(9) Other terms used herein shall have the same meanings prescribed in section 3959.01 of the Revised Code.

(C) Standards for licensing

For the protection of the people of this state, the superintendent shall not issue, nor permit to exist, any third party administrator's license unless the following standards are met to the satisfaction of the superintendent:

(1) In lieu of testing, the applicant has satisfactorily completed all questions contained in the application for a third party administrator's license;

(2) If a natural person, the applicant has attained the age of eighteen;

(3) Neither the applicant nor any of its officers, directors, or partners has been convicted of a financially related felony;

(4) Neither the applicant nor any of its officers, directors, or partners has had any license or application suspended, revoked, or denied for cause by this or any other state's insurance department;

(5) The applicant has paid the fees prescribed in sections 3959.06 and 3959.10 of the Revised Code.

(D) Licensing requirements

(1) No person, or domestic, foreign or alien corporation shall be, act as, or hold itself out to be a third party administrator in this state unless licensed as such by the superintendent. Only alien corporations that have established a domicile within the United States and its territories may be issued an Ohio third party administrator license.

(2) If a foreign or alien corporation's or foreign person's United States state of domicile provides for licensing of third party administrators under statutes similar to Chapter 3959. of the Revised Code, such person must be licensed as such in its state of domicile and must satisfy the licensing requirements and all applicable Ohio statutes and regulations in order to receive a license in Ohio.

(3) If a foreign or alien corporation's or foreign person's United States state of domicile does not provide for licensing of third party administrators, such person must provide proof from the domicile state that third party administrators are not required to be licensed in that state, and must satisfy the licensing requirements and all applicable Ohio statutes and regulations in order to receive a license in Ohio.

(4) Any person in which a health insuring corporation or insurer holds an ownership interest or which is under common control with the health insuring corporation or insurer as defined in division (B) of section 3901.32 of the Revised Code, any joint venture relationship, or any other arrangement through which the person provides administrative services on behalf of the health insuring corporation or insurer to residents of this state, or to a sponsor or plan that is domiciled in, or has its principal administrative offices within this state, shall not operate in this state as a third party administrator unless licensed as such by the superintendent.

(5) All third party administrators shall demonstrate, to the satisfaction of the superintendent, that they have procured and maintained insurance and bonds in compliance with the requirements of division (C) of section 3959.11 of the Revised Code. All third party administrators shall notify the superintendent of each renewal of required insurance policies and bonds and shall provide to the superintendent satisfactory proof that all required coverage is in force.

(6) Any change of officers, directors, partners, members, or trustees, and any change of shareholders or other owners or members holding five per cent or more of ownership of a third party administrator, or any change of the business address of any third party administrator shall be reported on a form provided by the department of insurance and filed with the department of insurance within fifteen days after the end of the month in which the change occurs.

(7) Requisition forms for all third party administrator licenses shall be available upon request from the department of insurance.

(8) The effective date of a third party administrator's license is that date on which the third party administrator is issued a license by the department.

(E) Application for license The application for a third party administrator's license shall be accompanied by the following:

(1) A certificate of good standing from the Ohio secretary of state if a domestic corporation;

(2) A certificate of good standing from the secretary of state of the state of domicile, if a foreign or alien corporation;

(3) A statement that the third party administrator and its officers shall be responsible for the supervision of the actions of any and all personnel and subcontractors who adjust or settle claims on behalf of the third party administrator;

(4) A nonrefundable filing fee as described in section 3959.06 of the Revised Code; and

(5) Such other information as the superintendent may request.

(F) License renewal

In support of the application for license renewal, the third party administrator shall submit:

(1) Proof that all insurance and bonds required by division (C) of section 3959.11 have been procured and are maintained continuously in force.

(2) A nonrefundable fee as described in section 3959.10 of the Revised Code.

(3) If a foreign or alien corporation or foreign person, a copy of the current home state certification or its equivalent, dated within ninety days of the application, or a copy of the current license issued in the third party administrator's United States state of domicile;

(4) If a foreign or alien corporation or a foreign person's United States state of domicile does not provide for licensing of third party administrators, such person must provide with each renewal application proof from the domicile state that third party administrators are not required to be licensed in that state. Renewal applicants with no home state license requirements must satisfy the licensing requirements and all applicable Ohio statutes and regulations in order to receive a license in Ohio.

(5) If any change of officers, directors, partners, members, or trustees, or any change of shareholders or other owners or members holding five per cent or more of ownership of a third party administrator, or any change of the business address of any third party administrator has occurred and has not been previously reported to the department as set forth in paragraph (D)(5) of this rule, the third party administrator shall include the completed form provided by the superintendent.

(G) Service of legal process

Foreign or alien third party administrators are deemed to have irrevocably appointed the Ohio secretary of state as agent for the acceptance of service of process issued in Ohio in any action or proceeding against the nonresident third party administrator arising out of such licensing or out of such transactions under the license.

(H) Prohibited activities

In addition to the prohibitions found in section 3959.14 of the Revised Code, the following will apply:

(1) No third party administrator shall commingle among its personal assets, or draw against for its own purposes, any monies or contributions of a plan sponsor or plan participant. All monies of plan sponsors held by the third party administrator must be held in a separate trust account.

(2) No third party administrator shall fail to remit insurance company premiums collected from the plan sponsor within the required policy period agreed to in writing between the insurance company or plan sponsor and the third party administrator;

(3) No third party administrator shall place any insurance or reinsurance coverage on behalf of a plan sponsor with an insurer that is not licensed or an approved surplus lines carrier in Ohio; and

(4) No third party administrator shall advertise any of its insured business underwritten by an insurer unless approved in writing by such insurer in advance of its use.

(5) No third party administrator shall withhold from a plan sponsor any claim data, information or statistics pertaining to the plan sponsor, or refuse to provide such claim information for any reason within a reasonable period of time not to exceed fourteen days from the date of request.

(I) Solicitation and proposal documents

(1) In addition to requirements found in division (B) of section 3959.14 of the Revised Code, any written proposal material provided to a prospective or existing plan sponsor shall include, but not be limited to, the following information:

(a) In relation to any specific excess insurance or aggregate excess insurance, identification of all key terms of the policy, including but not limited to:

(i) The name of the insurer.

(ii) The amount of specific stop loss deductible and maximum benefit.

(iii) The projected annual aggregate stop loss deductible, including monthly deductible factors per employee.

(iv) The type of contract covering claims, including all provisions relevant to the period during which covered claims are to be incurred by the plan participants and the period during which covered claims must be paid by the plan claims administrator.

(v) Any special contract provisions relevant to specified covered persons.

(vi) Conditions under which the claims of any plan participants would not be covered by the contract at the date of issue or at some future date.

(b) Identification by name, and description of the relationship and rate of compensation to be paid by the third party administrator to any outside individual or organization for services to be provided as a result of the third party administrator's relationship with the plan sponsor; and

(c) Disclosure of any ownership interest or material business relationship that the third party administrator or any of its corporate officers, directors, shareholders, partners or trustees have in any insurance, reinsurance, ultimate risk bearer, or any other business entity with which the third party administrator proposes to contract as a result of the third party administrator's relationship with the plan sponsor.

(2) The information outlined in paragraph (I)(1) of this rule must be provided in advance of each plan year that the third party administrator provides administrative services for a plan sponsor.

(J) Written agreements

(1) In addition to the requirements of section 3959.11 of the Revised Code, all written agreements must also contain, at a minimum, the following information:

(a) The types of books and records the third party administrator will keep on behalf of the plan sponsor;

(b) A statement to the effect that all records and files belong to the plan sponsor;

(c) A representation of the existence of the required fidelity bond as noted in paragraph (D)(5) of this rule;

(d) Disclosure of the existence of any stop loss insurance and the party responsible for procuring such insurance;

(e) Disclosure of any ownership interest or material business relationship between the third party administrator or its officers, directors, shareholders, partners, or trustees, and any insurance, reinsurance, other ultimate risk bearer, or any other business entity with which the third party administrator proposes to contract as a result of the third party administrator's relationship with the plan sponsor; and

(f) The method of collecting and holding any plan sponsor funds.

(2) Where a policy or contract is issued to a trust, trustee or trustees of a benefit plan, a copy of the trust agreement and any amendments thereto shall be furnished to the plan sponsor by the third party administrator and shall be retained as part of the official records of the third party administrator for the duration of the contract and at least five years thereafter.

(K) Written notice to plan participants when third party administrator's services are utilized

When the services of a third party administrator are utilized, the third party administrator shall provide a written notice to plan participants advising them of the identity of and the relationship between the third party administrator, the plan sponsor, plan participant and any direct insurer.

(L) Books and records maintained by third party administrator

(1) Every third party administrator shall maintain within its principal office or branch office, the customary books and records of all transactions and information relative to covered persons or beneficiaries as prescribed in section 3959.15 of the Revised Code.

(2) The superintendent shall have access to the general business books, records and other information of the third party administrator, but not of the plan sponsor unless the plan sponsor is itself subject to the superintendent's jurisdiction for the purpose of examination, audit and inspection.

(3) An insurer or plan sponsor who enters into a written agreement with a third party administrator shall have access to such books and records of the third party administrator as is reasonably necessary to permit the insurer or plan sponsor to fulfill all of its contractual obligations to insureds or plan participants.

(M) Annual reporting by third party administrator to plan sponsor; disclosures

(1) All third party administrators shall prepare an annual report to be filed with the plan sponsor within ninety days following the end of the fiscal year of the plan. Annual reports must include:

(a) All information required in division (B) of section 3959.14 and division (I) of section 3959.15 of the Revised Code;

(b) Any additional information required by the written agreement; and

(c) The names of all insurance carriers providing any type of insurance coverage to the plan sponsor.

(2) The third party administrator must list in such report any income received from any insurance, reinsurance or ultimate risk bearer, or any other business entity with which the third party administrator proposes to contract as a result of the third party administrator's relationship with the plan sponsor.

(3) A copy of the annual report shall be retained as part of the official records of the third party administrator for at least five years.

(N) Audit by superintendent

(1) A third party administrator shall, at the request of the superintendent, respond in writing within fifteen working days to any complaint received by the superintendent concerning the third party administrator. Such complaint shall include those pertaining to improper adjudication of claims. If the superintendent determines, within the superintendent's discretion, that the frequency or severity of such complaints or infractions justify an examination of the third party administrator's practices and procedures, any such examination by the superintendent, or any persons designated by him, shall be at the expense of the third party administrator. In addition to any other remedy available to the superintendent, failure by the third party administrator to willingly and fully cooperate with this paragraph of the rule may result in either suspension, revocation or refusal to renew a license by the superintendent.

(2) Nothing in this paragraph shall limit or abridge any other investigatory powers of the superintendent vested in him by Title XXXIX of the Revised Code.

(O) Defined unfair practices

(1) No third party administrator, officer, director, partner, trustee, agent or employee shall engage in any trade practice which is defined in sections 3901.19 to 3901.22 of the Revised Code as, or determined pursuant to these sections to be an unfair or deceptive act or practice. All relevant provisions of sections 3901.19 to 3901.22 of the Revised Code apply to third party administrators and their officers, directors, partners, trustees, agents or employees.

(2) In addition to the practices deemed unfair and deceptive in sections 3901.19 to 3901.22 of the Revised Code, it shall be deemed an unfair or deceptive practice for any agent, broker, or third party administrator to commit or perform any of the following:

(a) Misrepresenting or withholding any data or information that has been provided by the plan sponsor, or obtained by the third party administrator for the plan sponsor pursuant to its contract, or that is pertinent to underwriting conditions for a contract of insurance between the plan sponsor and any insurer, reinsurer or ultimate risk bearer;

(b) Misrepresenting the existence or the terms of any actual or proposed insurance or reinsurance policy;

(c) Failing to make an appropriate reply within fifteen working days to any inquiries of the department of insurance as they pertain to this rule or sections 3959.01 to 3959.16 and 3959.99 of the Revised Code; and

(d) Failing to submit requested documentation to the department of insurance as it applies to any complaints or inquiries regarding the business practices of a third party administrator.

(P) Violations

(1) If any third party administrator violates section 3959.05 of the Revised Code, such third party administrator is subject to penalties described within section 3959.99 of the Revised Code.

(2) Nothing in this paragraph shall limit the power of the superintendent to impose any other penalties on a third party administrator who violates this rule pursuant to the authority vested in him by the Title XXXIX of the Revised Code.

(Q) Severability

Each paragraph of this rule and every part of each paragraph is an independent paragraph and part of a paragraph, and the holding of any paragraph or a part thereof to be unconstitutional, void, or ineffective for any cause does not affect the validity or constitutionality of any other paragraph or part thereof. The provisions of this rule do not apply to an employer's self-insurance plan to the extent that federal law supersedes, preempts, prohibits or otherwise precludes the application of any provision of those sections to such plan.

Replaces: 3901-1-51

R.C. 119.032 review dates: 01/08/2014 and 08/31/2018
Promulgated Under: 119.03
Statutory Authority: 3901.041 , 3959.04
Rule Amplifies: 3959.01 , 3959.04 to 3959.16 and 3959.99
Prior Effective Dates: 7/11/1991, 3/25/1993, 10/1/1997, 3/28/2004, 11/14/2008

3901-8-06 HIV model consent form.

(A) Purpose. The purpose of this rule is to establish the form and content of the written consent form an insurer must use in order to obtain an applicant's consent to an HIV test.

(B) Authority. This rule is issued pursuant to the authority vested in the superintendent under section 3901.041 of the Revised Code.

(C) Applicability. This rule applies to all insurers permitted by Chapter 3901. of the Revised Code to require applicants for life or sickness and accident insurance coverage to submit to an HIV test.

(D) Definitions.

(1) "AIDS" means the illness designated as acquired immune deficiency syndrome.

(2) "HIV" means the human immunodeficiency virus identified as the causative agent of AIDS.

(3) "HIV test" means any test for the antibody or antigen to HIV that has been approved by the director of health under division (B) of section 3701.241 of the Revised Code.

(4) "Insurer" means any person authorized to engage in the business of life or sickness and accident insurance under Title XXXIX of the Revised Code or any person or governmental entity providing health services coverage for individuals on a self-insurance basis.

(E) Written consent to HIV test. Division (B)(1) of section 3901.46 of the Revised Code, provides that an insurer that requests an applicant to take an HIV test shall obtain the applicant's written consent for the test and shall inform the applicant of the purpose of the test.

In obtaining the applicant's written consent to an HIV test, the insurer must use the exact form set forth in appendix I to this rule.

(F) Severability. If any section, term or provision of this rule be adjudged invalid for any reason, such judgment shall not affect, impair or invalidate any other section, term or provision of this rule, but the remaining sections, terms and provisions shall be and continue in full force and effect.

Appendix I HIV test informed consent form

INSURER: (Name and Address)

In order for us to evaluate your eligibility for insurance coverage, we request that you provide a blood or other bodily fluid sample for HIV testing and analysis. The test that will be performed will determine the presence of antibodies to the HIV virus. By signing and dating this form, you agree that the HIV antibody test may be performed on your blood or other bodily fluid sample and that underwriting decisions may be based on the test results. A positive test result will adversely affect your insurance application. It also may result in uninsurability for life, health, or disability insurance for which you may apply in the future.

Human Immunodeficiency Virus (HIV)

The HIV virus causes a life-threatening disorder of the immune system called Acquired Immune Deficiency Syndrome (AIDS). Antibodies to HIV are found in the blood and other bodily fluids of people who have been exposed to the virus. You do not have to have AIDS to have antibodies against HIV. The virus is spread by sexual contact with an infected person, by exposure to infected blood (as in needle sharing during intravenous drug use or, rarely, as a result of a blood transfusion), or from an infected mother to her new-born infant.

The HIV antibody test is actually a series of tests performed upon your blood or other bodily fluid sample by a medically accepted procedure which is extremely reliable. The testing will be performed by a licensed laboratory.

PRE-TESTING CONSIDERATION:

Many public health organizations have recommended that before taking an HIV virus antibody test a person seek counseling to become informed about the implications of such tests. You may wish to consider counseling, at your expense, prior to being tested.

DISCLOSURE OF TEST RESULTS:

All test results are confidential, except as provided by law. State law requires that the laboratory notify the Ohio Department of Health of positive test results.

The results of the test will be reported to the insurance company named on your application for insurance. The insurer may not by law, release positive test results except as provided below:

If your HIV antibody test result is normal (negative), you will not be notified. You will be notified of an abnormal (positive) test result if you indicate that you desire a positive result be made known to you. You may also identify another person to whom you want the positive results released.

If you want a physician or other health care provider to be notified of an abnormal HIV antibody test result, you must indicate the name and address of that physician or provider. Abnormal test results may be disclosed to persons hired by the insurer who participate in medical underwriting decisions of the insurer. Abnormal test results may also be disclosed to affiliates of the insurer who require the result for medical underwriting purposes.

In addition, if your HIV antibody test is abnormal, a generic code signifying a nonspecific blood, oral fluid (saliva) or urine abnormality may be made known to the Medical Information Bureau, Inc. (MIB). The MIB is an organization of life and health insurance companies which operates as an information exchange on behalf of its members. There will be no record with the MIB that you had a positive HIV antibody test; however, there will be a record at the MIB that you have some blood, oral fluid or urine abnormality. If you apply to another MIB member company for life or health insurance coverage, the MIB, upon request, will supply the information on you in its file to that member.

TEST RESULTS:

While a positive test result does not necessarily mean that you have AIDS, it does mean that you are at a greater risk of developing AIDS or AIDS-related conditions if you do not take appropriate medications. If you are infected with HIV, you are infectious to others. You should seek medical follow-up care with your personal health care provider. HIV test results are highly reliable but not 100% accurate. If the test gives a positive result you should consider retesting in order to confirm the result. If the test gives a negative result, there is still a small possibility you may be infected with HIV. This is most likely to happen in recently infected persons. It takes at least 4 to 12 weeks for a positive test result to develop after a person is infected, and may take as long as 6 to 12 months.

OTHER SOURCES OF INFORMATION:

For more information about HIV or AIDS you may ask a doctor, a nurse, a counselor, or call the Ohio AIDS Hotline at 1-800-332-AIDS (2437). The hotline is a free call.

CONSENT FOR HIV TESTING:

I have read and I understand this HIV test informed consent form. I voluntarily consent to the withdrawal of blood or to the providing of another bodily fluid sample, the testing of my blood or other bodily fluid for HIV antibodies, and the disclosure of the test results as described above. I will be given a copy of this form. This consent is valid for ninety (90) days from the day of my signature below. Insurer agrees to complete testing and provide the authorized notifications, as appropriate, within 90 (ninety) day period.

In the event of a positive test result:

_____ Send the result to me at:

Address: ________________________________________________________________

_____ I authorize (name of insurer) to send the result to another person:

Name: __________________________________________________________________

Addess: _________________________________________________________________

_____ I authorize (name of insurer) to send the result to the following physician or health care provider:

Physician's Name: ________________________________________________________

Address: ________________________________________________________________

Authorization ____________________________________________________________

Name of applicant ________________________________________________________

Signature of applicant date

Signature of legal guardian, if any date

Signature of person obtaining consent date

Replaces: 3901-1-49

R.C. 119.032 review dates: 01/08/2014 and 08/31/2018
Promulgated Under: 119.03
Statutory Authority: 3901.041 , 3901.46
Rule Amplifies: 3901.46
Prior Effective Dates: 2/19/1990, 7/18/1997, 11/14/2008

3901-8-07 Advertisement of sickness and accident insurance.

(A) Purpose

Section 3923.16 of the Revised Code prohibits the use of any advertising copy, advertising plan, or plan of solicitation in connection with the solicitation of sickness or accident insurance which is materially misleading or deceptive. The purpose of this rule is to assure truthful and adequate disclosure of all material and relevant information in the advertising of sickness and accident insurance. This purpose is intended to be accomplished by the establishment of, and adherence to, certain minimum standards and guidelines of conduct in the advertising of sickness and accident insurance in a manner which prevents unfair competition among insurers and is conducive to the accurate presentation and description for the insurance buying public of a policy of such insurance offered through various advertising media.

(B) Applicability

(1) This rule shall apply to any sickness and accident insurance "advertisement," as that term is hereinafter defined, intended for presentation, distribution or dissemination in this state when such presentation, distribution or dissemination is made either directly or indirectly by or on behalf of an insurer, agent, broker or solicitor as those terms are defined in the Revised Code and this rule.

(2) Every insurer shall establish and at all times maintain a system of control over the content, form and method of dissemination of all advertisements of its policies. All such advertisements, regardless of by whom written, created, designed or presented, shall be the responsibility of the insurer whose policies are so advertised.

(3) Advertisements that are reproduced in quantity shall be identified by form numbers or other identifying means. The identification shall be sufficient to distinguish an advertisement from any other advertising materials, policies, applications or other materials used by the insurer.

(C) Definitions

(1) An advertisement for the purpose of this rule shall include:

(a) Printed and published material, audio-visual material, and descriptive literature of an insurer used in direct mail, newspapers, magazines, radio scripts, TV scripts, web sites and other internet displays or communications, other forms of electronic communications, billboards and similar displays; and

(b) Descriptive literature and sales aids of all kinds issued by an insurer, agent or broker for presentation to members of the insurance buying public, including but not limited to circulars, leaflets, booklets, depictions, illustrations, and form letters and lead-generating devices of all kinds;

(c) Prepared sales talks, presentations and material for use by agents;

(d) Advertising material included with a policy when the policy is delivered and material used in the solicitations of renewals and reinstatements;

(e) The definition of advertisement extends to the use of all media for communications to the general public, to the use of all media for communication to specific members of the general public, and to the use of all media for communications by agents;

(f) The definition of advertisement does not include:

(i) Material used solely for the training and education of an insurer's employees or agents;

(ii) Material used in-house by insurers;

(iii) Communications within an insurer's own organization not intended for dissemination to the public; or

(iv) Individual communication of a personal nature with current policyholders other than material urging the policyholders to increase or expand coverages.

(2) "Policy" for the purpose of this rule shall include any policy, plan, certificate, contract, agreement, statement of coverage, rider or endorsement which provides sickness or accident benefits, or medical, surgical or hospital expense benefits, whether on an indemnity, reimbursement, service or prepaid basis, except when issued in connection with another kind of insurance other than life, and except disability, waiver of premium and multiple indemnity benefits included in life insurance and annuity contracts.

(3) "Insurer" for the purpose of this rule shall include any individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyds, fraternal benefit society, health insuring corporation, and any other legal entity which is defined as an "insurer" in the Revised Code and is engaged in the advertisement of itself or a policy as "policy" is herein defined.

(4) "Exception" for the purpose of this rule shall mean any provision in a policy whereby coverage for a specified hazard is entirely eliminated; it is a statement of a risk not assumed under the policy.

(5) "Reduction" for the purpose of this rule shall mean any provision which reduces the amount of the benefit; a risk of loss is assumed but payment upon the occurrence of such loss is limited to some amount or period less than would be otherwise payable had such reduction not been used.

(6) "Limitation" for the purpose of this rule shall mean any provision which restricts coverage under the policy other than an exception or a reduction.

(7) "Institutional advertisement" for the purpose of this rule shall mean an advertisement having as its sole purpose the promotion of the reader's, viewer's or listener's interest in the concept of sickness and accident insurance, or the promotion of the insurer as a seller of sickness and accident insurance.

(8) "Invitation to inquire" for the purpose of this rule shall mean an advertisement having as its objective the creation of a desire to inquire further about sickness and accident insurance and which is limited to a brief description of the loss for which benefits are payable, but may contain:

(a) The dollar amount of benefit payable, and

(b) The period of time during which the benefit is payable, provided the advertisement does not refer to cost. An invitation to inquire shall contain a provision in the following or substantially similar form: "This policy has (exclusions) (limitations) (reduction of benefits) (terms under which the policy may be continued in force or discontinued). For costs and complete details of the coverage, call (or write) your insurance agent or the company (whichever is applicable)."

(9) "Invitation to contract" for the purpose of this rule shall mean an advertisement which is neither an invitation to inquire nor an institutional advertisement.

(10) "Lead-generating device" for the purpose of this rule shall mean any communication directed to the public that, regardless of form, content, or stated purpose, is intended to result in the compilation or qualification of a list containing names and other personal information to be used to solicit residents of this state for the purchase of sickness and accident insurance.

(11) "Prominently" or "conspicuously" for the purpose of this rule shall mean that the information to be disclosed prominently or conspicuously will be presented in such a manner that is noticeably set apart from other information or images in the advertisement.

(D) Method of disclosure of required information

All information required to be disclosed by this rule shall be set out conspicuously and in close conjunction with the statements to which such information relates or under appropriate captions of such prominence that it shall not be minimized, rendered obscure or presented in an ambiguous fashion or intermingled with the contents of the advertisement so as to be confusing or misleading.

(E) Form and content of advertisements

(1) The format and content of an advertisement of a sickness or accident insurance policy shall be sufficiently complete and clear to avoid deception or the capacity or tendency to mislead or deceive. Format means the arrangement of the text and the captions.

(2) Where an advertisement consists of more than one piece of material, each piece of material must, independent of all other pieces of material, conform to the disclosure requirements of this rule.

(3) Advertisements shall be truthful and not misleading in fact or in implication. Words or phrases, the meaning of which is clear only by implication or by familiarity with insurance terminology, shall not be used.

(4) An insurer, agent, or other person shall not solicit residents of this state for the purchase of sickness and accident insurance through the use of a true or fictitious name that is deceptive or misleading with regard to the status, character or proprietary or representative capacity of the person or the true purpose of the advertisement.

(5) Whether an advertisement has a capacity or tendency to mislead or deceive shall be determined by the superintendent of insurance from the overall impression that the advertisement may be reasonably expected to create upon a person of average education or intelligence, within the segment of the public to which it is directed.

(6) An insurer shall clearly identify its sickness and accident policy as an insurance policy. A policy trade name shall be followed by the words "insurance policy" or similar words clearly identifying the fact that an insurance policy or health benefits product (in the case of health insuring corporations, prepaid health plans and other direct service organizations) is being offered.

(7) An insurer, agent, or other person shall not solicit a resident of this state for the purchase of sickness and accident insurance in connection with or as a result of the use of advertisement by the person or any other persons, where the advertisement:

(a) Contains any misleading representations or misrepresentations, or is otherwise untrue, deceptive, or misleading with regard to the information imparted, the status, character or representative capacity of the person or the true purpose of the advertisement; or

(b) Otherwise violates the provisions of this rule.

(F) Advertisement of benefits payable, losses covered or premiums payable

(1) The use of deceptive words, phrases or illustrations in advertisements of sickness and accident insurance is prohibited.

(a) An advertisement that fails to state clearly the type of insurance coverage that is being offered is prohibited.

(b) No advertisement shall omit information or use words, phrases, statements, references or illustrations if the omission of such information or use of such words, phrases, statements, references or illustrations has the capacity, tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the nature or extent of any policy benefit payable, loss covered or premium payable. The fact that the policy offered is made available to a prospective insured for inspection prior to consummation of the sale or an offer is made to refund the premium if the purchaser is not satisfied does not remedy misleading statements.

(c) No advertisement shall contain or use words or phrases such as, "all," "full," "complete," "comprehensive," "unlimited," "up to," "as high as," "this policy will help pay your hospital and surgical bills," "this policy will help fill some of the gaps that medicare and your present insurance leave out," "this policy will help to replace your income" when used to express loss of time benefits, or similar words and phrases, in a manner which exaggerates any benefits beyond the terms of the policy.

(d) An advertisement shall not contain descriptions of a policy limitation, exception, or reduction worded in a positive manner to imply that it is a benefit, such as describing a waiting period as a "benefit builder" or stating "even pre-existing conditions are covered after two years." Words and phrases used in an advertisement to describe such policy limitations, exceptions and reductions shall fairly and accurately describe the negative features of such limitations, exceptions and reductions of the policy offered.

(e) No advertisement of a benefit for which payment is conditional upon confinement in a hospital or similar facility shall use words or phrases such as "tax free," "extra cash," "extra income," "extra pay," or substantially similar words or phrases in a manner which has the capacity, tendency or effect of misleading the public into believing that the policy advertised will, in some way, enable them to make a profit from being hospitalized.

(f) No advertisement of a hospital or other similar facility confinement benefit shall advertise that the amount of the benefit is payable on a monthly or weekly basis when, in fact, the amount of the benefit payable is based upon a daily pro rata basis relating to the number of days of confinement unless such statements of such monthly or weekly benefit amounts are preceded immediately by equally prominent statements of the benefit payable on a daily basis; for example, the following statement is acceptable: "$ 33.33 a day ($1, 000.00 a month)." When the policy contains a limit on the number of days of coverage provided, such limit must appear in the advertisement.

(g) No advertisement of a policy covering only one disease or a list of specified diseases shall imply coverage beyond the terms of the policy. Synonymous terms shall not be used to refer to any disease so as to imply broader coverage than is the fact.

(h) An advertisement for a policy providing benefits for specified illnesses only, such as cancer, or for specified accidents only, such as automobile accidents, shall clearly and conspicuously in prominent type state the limited nature of the policy. The statement shall be worded in language identical to or substantially similar to the following: "THIS IS A LIMITED POLICY," "THIS POLICY PROVIDES LIMITED BENEFITS," "THIS IS A CANCER ONLY POLICY," "THIS IS AN AUTOMOBILE ACCIDENT ONLY POLICY."

(i) An advertisement of a direct response insurance product shall not imply that because "no insurance agent will call and no commissions will be paid to agents" that it is "a low cost plan," or use other similar words or phrases because the cost of advertising and servicing such policies is a substantial cost in the marketing of a direct response insurance product.

(2) Exceptions, reductions and limitations

(a) When an advertisement which is an invitation to contract refers to either a dollar amount, or a period of time for which any benefit is payable, or the cost of the policy, or specific policy benefit, or the loss for which such benefit is payable, it shall also disclose those exceptions, reductions and limitations affecting the basic provisions of the policy without which the advertisement would have the capacity or tendency to mislead or deceive.

(b) When a policy contains a waiting, elimination, probationary or similar time period between the effective date of the policy and the effective date of coverage under the policy or a time period between the date a loss occurs and the date benefits begin to accrue for such loss, an advertisement which is subject to the requirements of the preceding paragraph shall disclose the existence of such periods.

(c) An advertisement shall not use the words "only," "just," "merely," "minimum," or similar words or phrases to describe the applicability of any exceptions and reductions, such as: "This policy is subject to the following minimum exceptions and reductions."

(3) Pre-existing conditions

(a) An advertisement which is subject to the requirements of paragraph (F)(2) of this rule shall, in negative terms, disclose the extent to which any loss is not covered if the cause of such loss is traceable to a condition existing prior to the effective date of the policy. The use of the term "pre-existing condition" without an appropriate definition or description is not permissible.

(b) When a policy does not cover losses resulting from pre-existing conditions, no advertisement of the policy shall state or imply that the applicant's physical condition or medical history will not affect issuance of the policy or the payment of a claim thereunder. This prohibits the use of the phrase "no medical examination required" and phrases of similar import, but does not prohibit explaining "automatic issue." If an insurer requires a medical examination for a specified policy, the advertisement, if it is an invitation to contract, shall disclose that a medical examination is required.

(c) When an advertisement contains an application form to be completed by the applicant and returned by mail for a direct-response insurance product, such application form shall contain a question which reflects the pre-existing condition provisions of the policy immediately preceding the blank space for the applicant's signature. For example, such an application form shall contain a question substantially as follows: "Do you understand that this policy will not pay benefits during the first ____ year(s) after the issue date for a disease or physical conditions which you now have or have had in the past?" _____ YES. Or substantially the following statement: "I understand that the policy applied for will not pay benefits for any loss incurred during the first ____ year(s) after the issue date on account of disease or physical conditions which I now have or have had in the past."

(G) Necessity for disclosing policy provisions relating to renewability, cancellability and termination

When an advertisement which is an invitation to contract refers to either a dollar amount or a period of time for which any benefit is payable, or the cost of the policy, or specific policy benefit, or the loss for which such benefit is payable, it shall disclose the provisions relating to renewability, cancellability and termination and any modification of benefits, losses covered or premiums because of age or for other reasons in a manner which shall not minimize or render obscure the qualifying conditions.

(H) Standards for marketing

(1) An insurer, directly or through its agents, shall:

(a) Establish marketing procedures to assure that any comparison of policies by its agents will be fair and accurate;

(b) Establish marketing procedures assuring excessive insurance is not sold or issued.

(c) Establish auditable procedures for verifying compliance with this subparagraph.

(2) In addition to the practices prohibited in sections 3901.19 to 3901.21 of the Revised Code, the following acts and practices are prohibited:

(a) Twisting, knowingly making any misleading representation or incomplete or fraudulent comparison of insurance policies or insurers for the purpose of inducing, or tending to induce, a person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert an insurance policy, or take out a policy of insurance with another insurer;

(b) High pressure tactics. Employing a method of marketing that has the effect of inducing the purchase of insurance, or tends 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; and

(c) Cold lead advertising. Making use directly or indirectly of any method of marketing that 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 insurer.

(I) Testimonials or endorsements by third parties

(1) Testimonials used in advertisements must be genuine, represent the current opinion of the author, be applicable to the policy advertised and be accurately reproduced. The insurer, in using a testimonial, makes as its own all of the statements contained therein, and the advertisement, including such statement, is subject to all the provisions of this rule. When a testimonial or endorsement is used more than one year after it was originally given, a confirmation must be obtained.

(2) If the person making a testimonial, an endorsement or an appraisal has a financial interest in the insurer or a related entity as a stockholder, director, officer, employee, or otherwise, such fact shall be disclosed in the advertisement. If a person is compensated for making a testimonial, endorsement or appraisal, such fact shall be disclosed in the advertisement by language substantially as follows: "Paid Endorsement." This disclosure shall be in a type style and size at least equal to that used for the person's name or the body of the testimonial or endorsement, whichever is larger. In the case of television or radio advertising, the required disclosure shall be accomplished in the introductory portion of the advertisement and shall be given prominence. This rule does not require disclosure of union "scale" wages required by union rules if the payment is actually for such "scale" for TV or radio performances. The payment of substantial amounts, directly or indirectly, for "travel and entertainment" for filming or recording of TV or radio advertisements removes the filming or recording from the category of an unsolicited testimonial and requires disclosure of such compensation.

(3) An advertisement shall not state or imply that an insurer or a policy has been approved or endorsed by any individual, group of individuals, society, association or other organizations, unless such is the fact, and unless any proprietary relationship between an organization and the insurer is disclosed. If the entity making the endorsement or testimonial has been formed by the insurer or is owned or controlled by the insurer or the person or persons who own or control the insurer, such fact shall be disclosed in the advertisement. If the insurer or an officer of the insurer formed or controls or holds any policy-making position in the entity making the endorsement or testimonial, that fact must be disclosed.

(4) When a testimonial refers to benefits received under a policy, the specific claim data, including claim number, date of loss, and other pertinent information shall be retained by the insurer for inspection for a period of four years or until the filing of the next regular report of examination of the insurer, whichever is the longer period of time.

(5) The use of testimonials that do not correctly reflect the present practices of the insurer or that are not applicable to the policy or benefit being advertised is not permissible.

(J) Use of statistics

(1) An advertisement relating to the dollar amounts of claims paid, the number of persons insured, or similar statistical information relating to any insurer or policy shall not use irrelevant facts, and shall not be used unless it accurately reflects all of the current and relevant facts. Such an advertisement shall not imply that such statistics are derived from the policy advertised unless such is the fact, and when applicable to other policies or plans shall specifically so state. Where statistics are given that are applicable to a different policy, it shall be stated clearly that the data do not relate to the policy being advertised.

(2) An advertisement shall not represent or imply that claim settlements by the insurer are "liberal" or "generous," or use words of similar import, or that claim settlements are or will be beyond the actual terms of the contract. An amount paid for a unique claim for the policy advertised is misleading and shall not be used.

(3) The source of any statistics used in an advertisement shall be identified in such advertisement.

(K) Identification of plan or number of policies

(1) When a choice of the amount of benefits is referred to, an advertisement which is an invitation to contract shall disclose that the amount of benefits provided depends upon the plan selected and that the premium will vary with the amount of the benefits selected.

(2) When an advertisement which is an invitation to contract refers to various benefits which may be contained in two or more policies, other than group master policies, the advertisement shall disclose that such benefits are provided only through a combination of such policies.

(L) Disparaging comparisons and statements

(1) An advertisement shall not directly or indirectly make unfair or incomplete comparisons of policies or benefits or comparisons of non-comparable policies of other insurers, and shall not disparage competitors, their policies, services or business methods, and shall not disparage or unfairly minimize competing methods of marketing insurance.

(2) An advertisement shall not contain statements such as "no red tape" or "here is all you have to do to receive benefits."

(3) Advertisements that state or imply that competing insurance coverages customarily contain certain exceptions, reductions or limitations not contained in the advertised policies are prohibited unless the exceptions, reductions or limitations are contained in a substantial majority of the competing coverages.

(4) Advertisements that state or imply that an insurer's premiums are lower or that its loss ratios are higher because its organizational structure differs from that of competing insurers are prohibited.

(M) Jurisdictional licensing and status of insurer

(1) An advertisement which is intended to be seen or heard beyond the limits of the jurisdiction in which the insurer is licensed shall not imply licensing beyond those limits.

(2) An advertisement shall not create the impression directly or indirectly that the insurer, its financial condition or status, or the payment of its claims, or the merits, desirability, or advisability of its policy forms or kinds or plans of insurance are approved, endorsed, or accredited by any division or agency of this state or the federal government.

(N) Identity of insurer

(1) The name of the actual insurer shall be stated in all of its advertisements. The form number or numbers of the policy advertised shall be stated in an advertisement which is an invitation to contract. An advertisement shall not use a trade name, an insurance group designation, name of the parent company of the insurer, name of a particular division of the insurer, service mark, slogan, symbol or other device which without disclosing the name of the actual insurer would have the capacity and tendency to mislead or deceive as to the true identity of the insurer.

(2) No advertisement shall use any combination of words, symbols or physical materials which by its content, phraseology, shape, color or other characteristics is so similar to combination of words, symbols or physical materials used by agencies of the federal government or of this state, or otherwise appear to be of such a nature that it tends to confuse or mislead prospective insureds into believing that the solicitation is in some manner connected with an agency of the municipal, state, or federal government.

(3) An advertisement shall not use the name of a state or political subdivision of a state in a policy name or description.

(O) Group or quasi-group implications

(1) An advertisement of a particular policy shall not state or imply that prospective insureds become group or quasi-group members covered under a group policy and as such enjoy special rates or underwriting privileges, unless such is the fact.

(2) An advertisement to join an association, trust or discretionary group that is also an invitation to contract for insurance coverage shall clearly disclose that the applicant will be purchasing both membership in the association, trust or discretionary group and insurance coverage. The insurer shall solicit insurance coverage on a separate and distinct application that requires a separate signature. The separate and distinct applications required need not be on separate documents or contained in separate mailing. The insurance program shall be presented so as not to conceal the fact that the prospective members are purchasing insurance as well as applying for membership, if that is the case. Similarly, it is prohibited to use terms such as "enroll" or "join" to imply group or blanket insurance coverage when that is not the fact.

(P) Introductory, initial or special offers

(1)

(a) An advertisement of an individual policy shall not directly or by implication represent that a contract or combination of contracts is an introductory, initial or special offer, or that applicants will receive substantial advantages not available at a later date, or that the offer is available only to a specified group of individuals, unless such is the fact. An advertisement shall not contain phrases describing an enrollment period as "special," "limited," or in similar words or phrases when the insurer uses such enrollment periods as the usual method of advertising sickness and accident insurance.

(b) An enrollment period during which a particular insurance product may be purchased on an individual basis shall not be offered within this state unless there has been a lapse of not less than six months between the close of the immediately preceding enrollment period for the same product and the opening of the new enrollment period. The advertisement shall indicate the date by which the applicant must mail the application which shall be not less than ten days and not more than forty days from the date that such enrollment period is advertised for the first time. This rule applies to all advertising media, i.e., mail, newspapers, radio, television, website and other internet displays or communications, other forms of electronic communications, billboards and similar displays, magazines and periodicals, by any one insurer. It is inapplicable to solicitations of employees or members of a particular group or association which otherwise would be eligible under specific provisions of the Revised Code for group, blanket or franchise insurance. The phrase "any one insurer" includes all the affiliated companies of a group of insurance companies under common management or control.

(c) This rule prohibits any statement or implication to the effect that only a specific number of policies will be sold, or that a time is fixed for the discontinuance of the sale of the particular policy advertised because of special advantages available in the policy, unless such is the fact.

(d) The phrase "a particular insurance product" in paragraph (P)(1)(b) of this rule encompasses insurance policies which provide substantially different benefits than those contained in any other policy. Different terms of renewability, an increase or decrease in the dollar amounts of benefits, or an increase or decrease in any elimination period or waiting period from those available during an enrollment period for another policy shall not be sufficient to constitute the product being offered as a different product eligible for concurrent or overlapping enrollment periods.

(2) An advertisement shall not offer a policy which utilizes a reduced initial premium rate in a manner which over-emphasizes the availability and the amount of the initial reduced premium. When an insurer charges an initial premium that differs in amount from the amount of the renewal premium payable on the same mode, the advertisement shall not display the amount of the reduced initial premium either more frequently or more prominently than the renewal premium, and both the initial reduced premium and the renewal premium must be stated in juxtaposition in each portion of the advertisement where the initial reduced premium appears.

(3) Special awards, such as a "safe driver's award" shall not be used in connection with advertisements of accident or sickness and accident insurance.

(Q) Statements about an insurer

An advertisement shall not contain statements which are untrue in fact, or by implication misleading, with respect to the assets, corporate structure, financial standing, age or relative position of the insurer in the insurance business. An advertisement shall not contain a recommendation by any commercial rating system unless it clearly indicates the purpose of the recommendation and the limitations of the scope and extent of the recommendation.

(R) Enforcement procedures

(1) Advertising file

Each insurer shall maintain at its home or principal office a complete file containing every printed, published or prepared advertisement of its individual policies and typical printed, published or prepared advertisements of its blanket, franchise and group policies hereafter disseminated in this or any other state whether or not licensed in such other state, with a notation attached to each such advertisement which shall indicate the manner and extent of distribution and the form number of any policy advertised. Such file shall be subject to regular and periodical inspection by this department. All such advertisements shall be maintained in said file for a period of either four years or until the filing of the next regular report on examination of the insurer, whichever is the longer period of time.

(2) Certificate of compliance

Each insurer required to file an annual statement which is now or which hereafter becomes subject to the provisions of this rule must file with this department with its annual statement a certificate of compliance executed by an authorized officer of the insurer wherein it is stated that to the best of the officer's knowledge, information and belief, the advertisements which were disseminated by the insurer during the preceding statement year complied or were made to comply in all respects with the provisions of this rule and the insurance laws of this state as implemented and interpreted by this rule.

(S) Severability

If any paragraph or portion of a paragraph of this rule, or the applicability thereof to any person or circumstance is held invalid by a court, the remainder of the rule, or the applicability of such provision to other persons or circumstances, shall not be affected thereby.

Replaces: 3901-1-16

R.C. 119.032 review dates: 01/08/2014 and 08/31/2018
Promulgated Under: 119.03
Statutory Authority: 3901.041
Rule Amplifies: 3923.16
Prior Effective Dates: 10/1/1974, 7/27/1986, 3/28/2004, 10/1/2009

3901-8-08 Medicare supplement.

(A) Purpose

The purpose of this rule is to provide for the reasonable standardization of coverage and simplification of terms and benefits of medicare supplement policies; to facilitate public understanding and comparison of such policies; to eliminate provisions contained in such policies which may be misleading or confusing in connection with the purchase of such policies or with the settlement of claims; and to provide for full disclosures in the sale of sickness and accident insurance coverage to persons eligible for medicare.

(B) Authority

This rule is promulgated pursuant to the authority vested in the superintendent under sections 3901.041 , 3923.33 and 3923.331 to 3923.339 of the Revised Code.

(C) Applicability and scope

(1) Except as otherwise specifically provided in paragraphs (G), (O), (P), (S), and (X) of this rule, this rule shall apply to:

(a) All medicare supplement policies, delivered or issued for delivery in this state on or after the effective date of this rule; and

(b) All certificates issued under group medicare supplement policies which certificates have been delivered or issued for delivery in this state on or after the effective date of this rule.

(2) This rule shall not apply to a policy or contract of one 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, for employees or former employees, or a combination thereof, or for members or former members, or a combination thereof, of the labor organizations.

(D) Definitions

For purposes of this rule, the following terms are defined as follows:

(1) "Applicant" means, in the case of an individual medicare supplement policy, the person who seeks to contract for insurance benefits, and in the case of a group medicare supplement policy, the proposed certificate holder.

(2) "Bankruptcy" means when a "Medicare Advantage" organization that is not an issuer has filed, or has had filed against it, a petition for declaration of bankruptcy and has ceased doing business in the state.

(3) "Certificate" means any certificate delivered or issued for delivery in this state under a group medicare supplement policy.

(4) "Certificate form" means the form on which the certificate is delivered or issued for delivery by the issuer.

(5) "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 days.

(6)

(a) "Creditable coverage" means, with respect to an individual, coverage of the individual provided under any of the following:

(i) A group health plan;

(ii) Health insurance coverage;

(iii) "Part A" or "Part B" of "Title XVIII of the Social Security Act" (medicare);

(iv) "Title XIX of the Social Security Act" (medicaid), other than coverage consisting solely of benefits under section 1928;

(v) "Chapter 55 of Title 10 United States Code (CHAMPUS)";

(vi) A medical care program of the Indian health service or of a tribal organization;

(vii) A state health benefits risk pool;

(viii) A health plan offered under chapter 89 of "Title 5 United States Code" (federal employees health benefits program);

(ix) A public health plan as defined in federal regulation; and

(x) A health benefit plan under section 5(e) of the "Peace Corps Act (22 United States Code" 2504(e)).

(b) "Creditable coverage" shall not include one or more, or any combination of, the following:

(i) Coverage only for accident or disability income insurance, or any combination thereof;

(ii) Coverage issued as a supplement to liability insurance;

(iii) Liability insurance, including general liability insurance and automobile liability insurance;

(iv) Workers' compensation or similar insurance;

(v) Automobile medical payment insurance;

(vi) Credit-only insurance;

(vii) Coverage for on-site medical clinics; and

(viii) Other similar insurance coverage, specified in federal regulations, under which benefits for medical care are secondary or incidental to other insurance benefits.

(c) "Creditable coverage" shall not include the following benefits if they are provided under a separate policy, certificate or contract of insurance or are otherwise not an integral part of the plan;

(i) Limited scope dental or vision benefits;

(ii) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; and

(iii) Such other similar, limited benefits as are specified in federal regulations.

(d) "Creditable coverage" shall not include the following benefits if offered as independent, noncoordinated benefits:

(i) Coverage only for a specified disease or illness; and

(ii) Hospital indemnity or other fixed indemnity insurance.

(e) "Creditable coverage" shall not include the following if it is offered as a separate policy, certificate or contract of insurance:

(i) Medicare supplemental health insurance as defined under section 1882(g)(1) of the "Social Security Act";

(ii) Coverage supplemental to the coverage provided under chapter 55 of "Title 10, United States Code"; and

(iii) Similar supplemental coverage provided to coverage under a group health plan.

(7) "Employee welfare benefit plan" means a plan, fund or program of employee benefits as defined in 29 U.S.C. section 1002 ("Employee Retirement Income Security Act").

(8) "Insolvency" or "Insolvent" means:

(a) For any issuer, that it is unable to pay its obligations when they are due, or when its admitted assets do not exceed its liabilities plus the greater of either of the following:

(i) Any capital and surplus required by law for its organization;

(ii) The total par or stated value of its authorized and issued capital stock.

(b) As to any issuer licensed to do business in this state as of the effective date of sections 3903.01 to 3903.59 of the Revised Code that does not meet the standard established under paragraph (D)(8)(a) of this rule, the term "insolvency" or "insolvent" means, for a period not to exceed three years from the effective date of sections 3903.01 to 3903.59 of the Revised Code, that it is unable to pay its obligations when they are due or that its admitted assets do not exceed its liabilities plus any required capital contribution ordered by the superintendent under provisions of "Title XXXIX" of the Revised Code.

(c) For purposes of paragraph (D)(8) of this rule, "liabilities" includes, but is not limited to, reserves required by statute or by rules of the superintendent or specific requirements imposed by the superintendent upon a subject issuer at the time of admission or subsequent thereto.

(9) "Direct response issuer" means an issuer who markets medicare supplement policies or certificates without the direct involvement of an insurance agent.

(10) "Issuer" includes insurance companies, fraternal benefit societies, health insuring corporations, and any other entities delivering or issuing for delivery in this state medicare supplement policies or certificates.

(11) "Medicare" means the "Health Insurance for the Aged Act," "Title XVIII of the Social Security Amendments" of 1965, as then constituted or later amended.

(12) "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), and includes:

(a) Coordinated care plans which provide health care services, including but not limited to health insuring corporation plans (with or without a point-of-service option), plans offered by provider-sponsored organizations, and preferred provider organization plans;

(b) Medical savings account plans coupled with a contribution into a "Medicare Advantage" medical savings account; and

(c) "Medicare Advantage" private fee-for-service plans.

(13) "Medicare supplement policy" means a group or individual policy of sickness and accident insurance or a subscriber contract of health insuring corporations, other than a policy issued pursuant to a contract under section 1876 of the federal "Social Security Act" (42 U.S.C. section 1395 et. seq.) or an issued policy under a demonstration project specified in 42 U.S.C. 1395 ss (g)(1), which is advertised, marketed or designed primarily as a supplement to reimbursements under medicare for the hospital, medical or surgical expenses of persons eligible for medicare. "Medicare supplement policy" does not include "Medicare Advantage" plans established under medicare "Part C", "Outpatient Prescription Drug" plans established under medicare "Part D", or any "Health Care Prepayment Plan (HCPP)" that provides benefits pursuant to an agreement under section 1833(a)(1)(A) of the "Social Security Act".

(14) "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 May 1, 1992.

(15) "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 May 1, 1992 and with an effective date for coverage prior to June 1, 2010 and includes medicare supplement insurance policies and certificates renewed on or after that date which are not replaced by the issuer at the request of the insured.

(16) "2010 Standardized Medicare supplement benefit plan," "2010 Standardized benefit plan" or "2010 plan" means a group or individual policy of medicare supplement insurance with an effective date for coverage on or after June 1, 2010.

(17) "Policy form" means the form on which the policy is delivered or issued for delivery by the issuer.

(18) "Secretary" means the secretary of the "United States" department of health and human services.

(E) Policy definitions and terms

No policy or certificate may be advertised, solicited or issued for delivery in this state as a medicare supplement policy or certificate unless such policy or certificate contains definitions or terms which conform to the requirements of paragraph (E) of this rule.

(1) "Accident," "accidental injury," or "accidental means" shall be defined to employ "result" language and shall not include words which would establish an accidental means test or use words such as "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 the 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 prohibited by law.

(2) "Benefit period" or "medicare benefit period" shall not be defined more restrictively than as defined in the medicare program.

(3) "Convalescent nursing home," "extended care facility," or "skilled nursing facility" shall not be defined more restrictively than as defined in the medicare program.

(4) "Health care expenses" means, for purposes of paragraph (P) of this rule, expenses of health insuring corporations associated with the delivery of health care services, which expenses are analogous to incurred losses of insurers.

(5) "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 not more restrictively than as defined in the medicare program.

(6) "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.

(7) "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.

(8) "Physician" shall not be defined more restrictively than as defined in the medicare program.

(9) "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.

(F) Policy provisions

(1) Except for permitted preexisting condition clauses as described in paragraphs (G)(1)(a), (H)(1)(a), and (I)(1)(a) of this rule, no policy or certificate may 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) No medicare supplement policy or certificate may use waivers to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions.

(3) No medicare supplement policy or certificate in force in the state shall contain benefits which duplicate benefits provided by medicare.

(4)

(a) Subject to paragraphs (G)(1)(d), (G)(1)(e), (G)(1)(g), (H)(1)(d) and (H)(1)(e) of this rule, 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:

(i) 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;

(ii) Premiums are adjusted to reflect the elimination of outpatient prescription drug coverage at the time of medicare "Part D" enrollment, accounting for any claims paid, if applicable.

(G) Minimum benefit standards for pre-standardized medicare supplement benefit plan policies or certificates issued for delivery prior to May 1, 1992.

No policy or certificate may be advertised, solicited or issued for delivery in this state prior to the effective date of this rule as a medicare supplement policy or certificate unless it meets or exceeds the following minimum standards. These are minimum standards and do not preclude the inclusion of other provisions or benefits which are not inconsistent with these standards.

(1) General standards.

The following standards apply to medicare supplement policies and certificates and are in addition to all other requirements of this rule.

(a) A medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six months from the effective date of coverage because they involved a preexisting condition. The policy or certificate shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.

(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 such changes.

(d) A "noncancellable," "guaranteed renewable," or "noncancellable and guaranteed renewable" medicare supplement policy shall not:

(i) 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

(ii) Be cancelled or nonrenewed by the issuer solely on the grounds of deterioration of health.

(e)

(i) Except as authorized by the superintendent, an issuer shall neither cancel nor nonrenew a medicare supplement policy or certificate for any reason other than nonpayment of premium or material misrepresentation.

(ii) If a group medicare supplement insurance policy is terminated by the group policyholder and not replaced as provided in paragraph (G)(1)(e)(iv) of this rule, the issuer shall offer certificate holders an individual medicare supplement policy. The issuer shall offer the certificate holder at least the following choices:

(a) An individual medicare supplement policy currently offered by the issuer having comparable benefits to those contained in the terminated group medicare supplement policy; and

(b) An individual medicare supplement policy which provides only such benefits as are required to meet the minimum standards as defined in paragraph (I)(2) of this rule.

(iii) If membership in a group is terminated, the issuer shall:

(a) Offer the certificate holder the conversion opportunities described in paragraph (G)(1)(e)(ii) of this rule; or

(b) At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.

(iv) If a group medicare supplement policy is replaced by another group medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy, such coverage to be effective the date the preceding policy terminates. 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 will 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", the modified policy shall be deemed to satisfy the guaranteed renewal requirements of this paragraph.

(2) Minimum benefit standards.

(a) Coverage of "Part A" medicare-eligible expenses for hospitalization to the extent not covered by medicare from the sixty-first day through the ninetieth 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 at least ninety per cent of all medicare "Part A" eligible expenses for hospitalization not covered by medicare subject to a lifetime maximum benefit of an additional three hundred sixty-five days.

(e) Coverage under medicare "Part A" for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations 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 [one hundred ten dollars].

(g) Effective January 1, 1990, coverage under medicare "Part B" for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations), unless replaced in accordance with federal regulations or already paid for under "Part A", subject to the medicare deductible amount.

(H) Benefit standards for 1990 standardized medicare supplement benefit plan policies or certificates issued or delivered on or after May 1, 1992 and with an effective date for coverage prior to June 1, 2010.

The following standards are applicable to all medicare supplement policies or certificates delivered or issued for delivery in this state on or after May 1, 1992 and with an effective date for coverage prior to June 1, 2010. No policy or certificate may be advertised, solicited, delivered or issued for delivery in this state as a medicare supplement policy or certificate unless it complies with these benefit standards.

(1) General standards. The following standards apply to medicare supplement policies and certificates and are in addition to all other requirements of this rule.

(a) A medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six months from the effective date of coverage because it involved a preexisting condition. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.

(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 such changes, in accordance with paragraph (Q)(3)(b) of this rule.

(d) No medicare supplement policy or certificate shall provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium.

(e) Each medicare supplement policy shall be guaranteed renewable.

(i) The issuer shall not cancel or nonrenew the policy solely on the ground of health status of the individual; and

(ii) The issuer shall not cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation.

(iii) If the medicare supplement policy is terminated by the group policyholder and is not replaced as provided under paragraph (H)(1)(e)(v) of this rule, the issuer shall offer each certificate holder 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 otherwise meet the requirements of this subsection.

(iv) If an individual is a certificate holder in a group medicare supplement policy and the individual terminates membership in the group, the issuer shall

(a) Offer the certificate holder the conversion opportunity described in paragraph (H)(1)(e)(iii) of this rule, or

(b) At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.

(v) If a group medicare supplement policy is replaced by another group medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.

(vi) If a medicare supplement policy eliminates an outpatient prescription drug benefit as a result of requirements imposed by the "Medicare Prescription Drug, Improvement and Modernization Act of 2003," the modified policy shall be deemed to 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)

(i) 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 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," but only if the policyholder or certificate holder notifies the issuer of such policy or certificate within ninety days after the date the individual becomes entitled to assistance.

(ii) If suspension occurs and if the policyholder or certificate holder loses entitlement to such medical assistance, the policy or certificate shall be automatically reinstituted effective as of the date of termination of such entitlement if the policyholder or certificate holder provides notice of loss of such entitlement within ninety days after the date of loss and pays the premium attributable to the period.

(iii) Each medicare supplement policy shall provide that benefits and premiums under the policy shall be suspended (for any period that may be provided by federal regulation) at the request of the policyholder if the policyholder is entitled to benefits under section 226(b) of the "Social Security Act" and is covered under a group health plan (as defined in section 1862 (b)(1)(A)(v) of the "Social Security Act"). If suspension occurs and if the policyholder or certificateholder loses coverage under the group health plan, the policy shall be automatically reinstituted (effective as of the date of loss of coverage) if the policyholder provides notice of loss of the coverage within ninety days after the date of loss.

(iv) Reinstitution of such coverages:

(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 such suspension. If the suspended medicare supplement policy provided coverage for outpatient prescription drugs, reinstitution of the policy for medicare "Part D" enrollees shall be without coverage for outpatient prescription drugs and shall otherwise provide substantially equivalent coverage to the coverage in effect before the date of suspension; and

(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 issuer 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 paragraph (J) of this rule) to a 2010 standardized plan (as described in paragraph (K) of this rule), the offer and subsequent exchange shall comply with the following requirements:

(i) An issuer need not provide justification to the superintendent if the insured replaces a 1990 standardized policy or certificate with an issue age rated 2010 standardized policy or certificate at the insured's original issue age and duration. If an insured's policy or certificate to be replaced is priced on an issue age rate schedule at the time of such offer, the rate charged to the insured for the new exchanged policy shall recognize the policy reserve buildup, due to the prefunding inherent in the use of an issue age rate basis, for the benefit of the insured. The method proposed to be used by an issuer must be filed with the superintendent in accordance with paragraph (Q) of this rule.

(ii) The rating class of the new policy or certificate shall be the class closest to the insured's class of the replaced coverage.

(iii) An issuer 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 months to any added benefits contained in the new 2010 standardized policy or certificate not contained in the exchanged policy.

(iv) The new policy or certificate shall be offered to all policyholders or certificate holders within a given plan, except where the offer or issue would be in violation of state or federal law.

(2) Standards for basic ("core") benefits common to benefit plans "A" - "J"

Every issuer shall make available to each prospective insured a policy or certificate including only the following basic "core" package of benefits. An issuer 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 sixty-first day through the ninetieth 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 one hundred per cent 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 three hundred sixty-five days. The provider shall accept the issuer's payment as payment in full and may not bill the insured for any balance;

(d) Coverage under medicare "Parts A" and "B" for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations;

(e) 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 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 paragraph (J) of this rule.

(a) Medicare "Part A" deductible: coverage for all of the medicare "Part A" inpatient hospital deductible amount per benefit period.

(b) Skilled nursing facility care: coverage for the actual billed charges up to the coinsurance amount from the twenty-first day through the one hundredth day in a medicare benefit period for post-hospital skilled nursing facility care eligible under medicare "Part A";

(c) Medicare "Part B" deductible: coverage for all of the medicare "Part B" deductible amount per calendar year regardless of hospital confinement.

(d) Eighty per cent of the medicare "Part B" excess charges: coverage for eighty per cent of the difference between the actual medicare "Part B" charge as billed, not to exceed any charge limitation established by the medicare program or state law, and the medicare-approved "Part B" charge.

(e) One hundred per cent of the medicare "Part B" excess charges: coverage for all of the difference between the actual medicare "Part B" charge 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: coverage for fifty per cent of outpatient prescription drug charges, after a two hundred fifty dollar calendar year deductible, to a maximum of one thousand two hundred fifty dollars 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: coverage for fifty per cent of outpatient prescription drug charges, after a two hundred fifty dollar calendar year deductible to a maximum of three thousand dollars 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: coverage to the extent not covered by medicare for eighty 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 consecutive days of each trip outside the "United States", subject to a calendar year deductible of two hundred fifty dollars, and a lifetime maximum benefit of fifty thousand dollars. For purposes of this benefit, "emergency care" shall mean care needed immediately because of an injury or an illness of sudden and unexpected onset.

(i) Preventive medical care benefit: coverage for the following preventive health services not covered by medicare:

(i) An annual clinical preventive medical history and physical examination that may include tests and services from paragraph (H)(3)(i)(ii) of this rule and patient education to address preventive health care measures:

(ii) Preventive screening tests or preventive services, the selection and frequency of which is determined to be medically appropriate by the attending physician.

Reimbursement shall be for the actual charge up to one hundred per cent 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 one hundred twenty dollars annually under this benefit. This benefit shall not include payment for any procedure covered by medicare.

(j) At-home recovery benefit: coverage for services to provide short term, at-home assistance with activities of daily living for those recovering from an illness, injury or surgery.

(i) For purposes of this benefit, the following definitions shall apply:

(a) "Activities of daily living" include, but are not limited to bathing, dressing, personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally self-administered, and changing bandages or other dressings.

(b) "Care provider" means 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.

(c) "Home" shall mean any place used by the insured as a place of residence, provided that such 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.

(d) "At-home recovery visit" means the period of a visit required to provide at home recovery care, without limit on the duration of the visit, except each consecutive four hours in a twenty-four hour period of services provided by a care provider is one visit.

(ii) Coverage requirements and limitations

(a) At-home recovery services provided must be primarily services which assist in activities of daily living.

(b) The insured's attending physician must 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 dollars per visit.

(iii) One thousand six hundred dollars per calendar year.

(iv) Seven visits in any one week.

(v) Care furnished on a visiting basis in the insured's home.

(vi) Services provided by a care provider as defined in paragraph (H)(3)(j) of this rule.

(vii) At-home recovery visits while the insured is covered under the policy or certificate and not otherwise excluded.

(viii) At-home recovery visits received during the period the insured is receiving medicare approved home care services or no more than eight weeks after the service date of the last medicare approved home health care visit.

(iii) 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:

(i) Coverage of one hundred per cent of the "Part A" hospital coinsurance amount for each day used from the sixty-first through the ninetieth day in any medicare benefit period;

(ii) Coverage of one hundred per cent of the "Part A" hospital coinsurance amount for each medicare lifetime inpatient reserve day used from the ninety-first through the one hundred fiftieth day in any medicare benefit period;

(iii) Upon exhaustion of the medicare hospital inpatient coverage, including the lifetime reserve days, coverage of one hundred per cent 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 three hundred sixty-five days. The provider shall accept the issuer's payment as payment in full and may not bill the insured for any balance;

(iv) Medicare "Plan A" deductible: coverage for fifty per cent of the medicare "Part A" inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in paragraph (H)(4)(a)(x) of this rule;

(v) Skilled nursing facility care coverage for fifty per cent of the coinsurance amount for each day used from the twenty-first day through the one hundredth day in a medicare benefit period for post-hospital skilled nursing facility care eligible under medicare "Part A" until the out-of-pocket limitation is met as described in paragraph (H)(4)(a)(x) of this rule;

(vi) Hospice care coverage for fifty per cent of cost sharing for all "Part A" medicare-eligible expenses and respite care until the out-of-pocket limitation is met as described in paragraph (H)(4)(a)(x) of this rule;

(vii) Coverage for fifty per cent under medicare "Parts A" or "B", of the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in paragraph (H)(4)(a)(x) of this rule;

(viii) Except for coverage provided in paragraph (H)(4)(a)(ix) of this rule, coverage for fifty per cent of the cost sharing otherwise applicable under medicare "Part B" after the policyholder pays the "Part B" deductible until the out-of-pocket limitation is met as described in paragraph (H)(4)(a)(x) of this rule:

(ix) Coverage of one hundred per cent of the cost sharing for medicare "Part B" preventive services after the policyholder pays the "Part B" deductible; and

(x) Coverage of one hundred per cent 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 four thousand dollars in 2006, indexed each year by the appropriate inflation adjustment specified by the secretary of the "United States" department of health and human services.

(b) Standardized medicare supplement benefit plan "L" shall consist of the following:

(i) The benefits described in paragraphs (H)(4)(a)(i), (H)(4)(a)(ii), (H)(4)(a)(iii), and (H)(4)(a)(ix) of this rule;

(ii) The benefit described in paragraphs (H)(4)(a)(iv), (H)(4)(a)(v), (H)(4)(a)(vi), (H)(4)(a)(vii), and (H)(4)(a)(viii) of this rule, but substituting seventy-five per cent for fifty per cent; and

(iii) The benefit described in paragraph (H)(4)(a)(x) of this rule, but substituting two thousand dollars for four thousand dollars.

(I) Benefit standards for 2010 standardized medicare supplement benefit plan policies or certificates issued or delivered 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 this state with an effective date for coverage on or after June 1, 2010. No policy or certificate may 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. No issuer may offer any 1990 standardized medicare supplement benefit plan for sale on or after the June 1, 2010 effective date of these 2010 standardized medicare supplement benefit plan standards in this state. Benefit standards applicable to medicare supplement policies and certificates issued with an effective date for coverage prior to June 1, 2010 remain subject to the requirements of paragraph (H) of this rule.

(1) General standards. The following standards apply to medicare supplement policies and certificates and are in addition to all other requirements of this rule.

(a) A medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six months from the effective date of coverage because it involved a preexisting condition. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended or received from a physician within six months before the effective date of coverage.

(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 such changes.

(d) No medicare supplement policy or certificate shall provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium.

(e) Each medicare supplement policy shall be guaranteed renewable.

(i) The issuer shall not cancel or nonrenew the policy solely on the ground of health status of the individual.

(ii) The issuer shall not cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation.

(iii) If the medicare supplement policy is terminated by the group policyholder and is not replaced as provided under paragraph (I)(1)(e)(5) of this rule, the issuer shall offer certificate holders an individual medicare supplement policy which (at the option of the certificate holder):

(a) Provides for the continuation of the benefits contained in the group policy; or

(b) Provides for benefits that otherwise meet the requirements of this paragraph.

(iv) If an individual is a certificate holder in a group medicare supplement policy and the individual terminates membership in the group, the issuer shall:

(a) Offer the certificate holder the conversion opportunity described in paragraph (I)(1)(e)(3) of this rule; or

(b) At the option of the group policyholder, offer the certificate holder continuation coverage under the group policy.

(v) If a group medicare supplement policy is replaced by another group medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.

(f) 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)

(i) 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 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," but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within ninety days after the date the individual becomes entitled to assistance.

(ii) 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 days after the date of loss and pays the premium attributable to the period, effective as of the date of termination of entitlement.

(iii) Each medicare supplement policy shall provide that benefits and premiums under the policy shall be suspended (for any period that may be provided by federal regulation) at the request of the policyholder if the policyholder is entitled to benefits under section 226(b) of the "Social Security Act" and is covered under a group health plan as defined in section 1862 (b)(1)(A)(v) of the "Social Security Act." 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 days after the date of the loss.

(iv) Reinstitution of coverages as described in paragraphs (I)(2) and (I)(3) of this rule:

(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; 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.

(2) Standards for basic (core) benefits common to medicare supplement insurance benefit plans "A," "B," "C," "D," "F," "F With High Deductible," "G," "M," and "N". Every issuer of medicare supplement insurance benefit plans shall make available a policy or certificate including only the following basic "core" package of benefits to each prospective insured. An issuer 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 sixty-first day through the ninetieth 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 one hundred per cent 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 three hundred sixty-five days. The provider shall accept the issuer's payment as payment in full and may not bill the insured for any balance;

(d) Coverage under medicare "Parts A" and "B" for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations;

(e) 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 the medicare "Part B" deductible;

(f) Hospice care: 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," "F With High Deductible," "G," "M," and "N" as provided by paragraph (K) of this rule.

(a) Medicare "Part A" deductible: coverage for one hundred per cent of the medicare "Part A" inpatient hospital deductible amount per benefit period.

(b) Medicare "Part A" deductible: coverage for fifty per cent of the medicare "Part A" inpatient hospital deductible amount per benefit period.

(c) Skilled nursing facility care: coverage for the actual billed charges up to the coinsurance amount from the twenty-first day through the one hundredth day in a medicare benefit period for post-hospital skilled nursing facility care eligible under medicare "Part A."

(d) Medicare "Part B" deductible: coverage for one hundred per cent of the medicare "Part B" deductible amount per calendar year regardless of hospital confinement.

(e) One hundred per cent of the medicare "Part B" excess charges: 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) Medically necessary emergency care in a foreign country: coverage to the extent not covered by medicare for eighty per cent 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 consecutive days of each trip outside the "United States," subject to a calendar year deductible of two hundred fifty dollars, and a lifetime maximum benefit of fifty thousand dollars. For purposes of this benefit, "emergency care" shall mean care needed immediately because of an injury or an illness of sudden and unexpected onset.

(J) Standard medicare supplement benefit plans for 1990 standardized medicare supplement benefit plan policies or certificates issued for delivery on or after May 1, 1992 and with an effective date for coverage prior to June 1, 2010.

(1) An issuer 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 paragraph (H)(2) of this rule.

(2) No groups, packages or combinations of medicare supplement benefits other than those listed in this paragraph shall be offered for sale in this state, except as may be permitted in paragraphs (J) (7) and (L) of this rule.

(3) Benefit plans shall be uniform in structure, language, designation and format to the standard benefit plans "A" through "L" listed in paragraph (J)(5) of this rule and conform to the definitions in paragraph (D) of this rule. Each benefit shall be structured in accordance with the format provided in paragraphs (H)(2) and (H)(3), or (H)(4) of this rule and list the benefits in the order shown in paragraph (J)(5) of this rule. For purposes of this paragraph, "structure, language, and format" means style, arrangement and overall content of a benefit.

(4) An issuer may use, in addition to the benefit plan designations required in paragraph (J)(3) of this rule, 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 defined in paragraph (H)(2) of this rule.

(b) Standardized medicare supplement benefit plan "B" shall include only the following: the core benefit as defined in paragraph (H)(2) of this rule, plus the medicare "Part A" deductible as defined in paragraph (H)(3)(a) of this rule.

(c) Standardized medicare supplement benefit plan "C" shall include only the following: the core benefit as defined in paragraph (H)(2) of this rule, plus the medicare "Part A" deductible, skilled nursing facility care, medicare "Part B" deductible and medically necessary emergency care in a foreign country as defined in paragraphs (H)(3)(a), (H)(3)(b), (H)(3)(c), and (H)(3)(h) of this rule, respectively.

(d) Standardized medicare supplement benefit plan "D" shall include only the following: the core benefit as defined in paragraph (H)(2) of this rule, plus the medicare "Part A" deductible, skilled nursing facility care, medically necessary emergency care in a foreign country and the at-home recovery benefit as defined in paragraphs (H)(3)(a), (H)(3)(b), (H)(3)(h), and (H)(3)(j) of this rule, respectively.

(e) Standardized medicare supplement benefit [regular] plan "E" shall include only the following: the core benefit as defined in paragraph (H)(2) of this rule, plus the medicare "Part A" deductible, skilled nursing facility care, medically necessary emergency care in a foreign country and preventive medical care as defined in paragraphs (H)(3)(a), (H)(3)(b), (H)(3)(h), and (H)(3)(i) of this rule, respectively.

(f) Standardized medicare supplement benefit plan "F" shall include only the following: the core benefit as defined in paragraph (H)(2) of this rule, plus the medicare "Part A" deductible, the skilled nursing facility care, the "Part B" deductible, one hundred per cent of the medicare "Part B" excess charges, and medically necessary emergency care in a foreign country as defined in paragraphs (H)(3)(a), (H)(3)(b), (H)(3)(c), (H)(3)(e), and (H)(3)(h) of this rule, respectively.

(g) Standardized medicare supplement benefit high deductible plan "F" shall include only the following: one hundred per cent of covered expenses following the payment of the annual high deductible plan "F" deductible. The covered expenses include the core benefit as defined in paragraph (H)(2) of this rule, plus the medicare "Part A" deductible, skilled nursing facility care, the medicare "Part B" deductible, one hundred per cent of the medicare "Part B" excess charges, and medically necessary emergency care in a foreign country as defined in paragraphs (H)(3)(a), (H)(3)(b), (H)(3)(c), (H)(3)(e) and (H)(3)(h) of this rule, 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 fifteen hundred dollars 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 dollars.

(h) Standardized medicare supplement benefit plan "G" shall include only the following: the core benefit as defined in paragraph (H)(2) of this rule, plus the medicare "Part A" deductible, skilled nursing facility care, eighty per cent of the medicare "Part B" excess charges, medically necessary emergency care in a foreign country, and the at-home recovery benefit as defined in paragraphs (H)(3)(a), (H)(3)(b), (H)(3)(d), (H)(3)(h), and (H)(3)(j) of this rule, respectively.

(i) Standardized medicare supplement benefit plan "H" shall consist of only the following: the core benefit as defined in paragraph (H)(2) of this rule, plus the medicare "Part A" deductible, skilled nursing facility care, basic prescription drug benefit and medically necessary emergency care in a foreign country as defined in paragraphs (H)(3)(a), (H)(3)(b), (H)(3)(f), and (H)(3)(h) of this rule, 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 defined in paragraph (H)(2) of this rule, plus the medicare "Part A" deductible, skilled nursing facility care, one hundred per cent 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 defined in paragraphs (H)(3)(a), (H)(3)(b), (H)(3)(e), (H)(3)(f), (H)(3)(h), and (H)(3)(j) of this rule, 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 defined in paragraph (H)(2) of this rule, plus the medicare "Part A" deductible, skilled nursing facility care, medicare "Part B" deductible, one hundred per cent 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 defined in paragraphs (H)(3)(a), (H)(3)(b), (H)(3)(c), (H)(3)(e), (H)(3)(g), (H)(3)(h), (H)(3)(i), and (H)(3)(j) of this rule, 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: one hundred per cent of covered expenses following the payment of the annual high deductible plan "J" deductible. The covered expenses include the core benefit as defined in paragraph (H)(2) of this rule, plus the medicare "Part A" deductible, skilled nursing facility care, medicare "Part B" deductible, one hundred per cent 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 defined in paragraphs (H)(3)(a), (H)(3)(b), (H)(3)(c), (H)(3)(e), (H)(3)(g), (H)(3)(h), (H)(3)(i), and (H)(3)(j) of this rule, 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 fifteen hundred dollars 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 dollars. The outpatient prescription drug benefit shall not be included in a medicare supplement policy sold after December 31, 2005.

(6) Make-up of two medicare supplement plans mandated by "The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA)";

(a) Standardized medicare supplement benefit plan "K" shall consist of only those benefits described in paragraph (H)(4)(a) of this rule:

(b) Standardized medicare supplement benefit plan "L" shall consist of only those benefits described in paragraph (H)(4)(b) of this rule.

(7) New or innovative benefits: an issuer may, with the prior approval of the superintendent, offer policies or certificates with new or innovative benefits in addition to the benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits may include benefits that are appropriate to medicare supplement insurance, new or innovative, not otherwise available, cost-effective, and offered in a manner which 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.

(K) Standard medicare supplement benefit plans 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 this state with an effective date for coverage on or after June 1, 2010. No policy or certificate may be advertised, solicited, delivered or issued for delivery in this state 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 with an effective date for coverage before June 1, 2010 remain subject to the requirements of paragraph (J) of this rule.

(1) An issuer shall make available to each prospective policyholder and certificate holder a policy form containing only the basic (core) benefits, as defined in paragraph (I)(2) of this rule.

(2) If an issuer makes available any of the additional benefits described in paragraph (I)(3) of this rule, or offers standardized benefit plans "K" or "L" as described in paragraphs (K)(5)(h) and (K)(5)(i) of this rule, then the issuer 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 the first sentence of paragraph (K) of this rule, a policy form or certificate form containing either standardized benefit plan "C" as described in paragraph (K)(5)(c) of this rule or standardized benefit plan "F" as described in paragraph (K)(5)(e) of this rule.

(3) No groups, packages or combinations of medicare supplement benefits other than those listed in this paragraph (K) of this rule shall be offered for sale in this state, except as may be provided in paragraphs (K)(7) and (L) of this rule.

(4) Benefit plans shall be uniform in structure, language, designation and format to the standard benefit plans listed in this paragraph and conform to the definitions in paragraph (D) of this rule. Each benefit shall be structured in accordance with the format provided in paragraphs (I)(2) and (I)(3) of this rule; or, in the case of plans "K" or "L," in paragraph (K)(6)(h) or (K)(6)(i) of this rule and list the benefits in the order shown. For purposes of this paragraph, "structure, language, and format" means style, arrangement and overall content of a benefit.

(5) In addition to the benefit plan designations required in paragraph (K)(4) of this rule, an issuer may use other designations to the extent permitted by law.

(6) Make-up of 2010 standardized benefit plans.

(a) Standardized medicare supplement benefit plan "A" shall include only the following: the basic (core) benefits as defined in paragraph (I)(2) of this rule.

(b) Standardized medicare supplement benefit plan "B" shall include only the following: the basic (core) benefit as defined in paragraph (I)(2) of this rule, plus one hundred per cent of the medicare "Part A" deductible as defined in paragraph (I)(3)(a) of this rule.

(c) Standardized medicare supplement benefit plan "C" shall include only the following: the basic (core) benefit as defined in paragraph (I)(2) of this rule, plus one hundred per cent of the medicare "Part A" deductible, skilled nursing facility care, one hundred per cent of the medicare "Part B" deductible, and medically necessary emergency care in a foreign country as defined in paragraphs (I)(3)(a), (I)(3)(c), (I)(3)(d) and (I)(3)(f) of this rule, respectively.

(d) Standardized medicare supplement benefit plan "D" shall include only the following: the basic (core) benefit (as defined in paragraph (I)(2) of this rule), plus one hundred per cent of the medicare "Part A" deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country as defined in paragraphs (I)(3)(a), (I)(3)(c) and (I)(3)(f) of this rule, respectively.

(e) Standardized medicare supplement benefit [regular] plan "F" shall include only the following: the basic (core) benefit as defined in paragraph (I)(2) of this rule, plus one hundred per cent of the medicare "Part A" deductible, the skilled nursing facility care, one hundred per cent of the medicare "Part B" deductible, one hundred per cent of the medicare "Part B" excess charges, and medically necessary emergency care in a foreign country as defined in paragraphs (I)(3)(a), (I)(3)(c), (I)(3)(d), (I)(3)(e) and (I)(3)(f) of this rule, respectively.

(f) Standardized medicare supplement plan "F With High Deductible" shall include only the following: one hundred per cent of covered expenses following the payment of the annual deductible set forth in paragraph (K)(6)(f)(ii) of this rule.

(i) The basic (core) benefit as defined in paragraph (I)(2) of this rule, plus one hundred per cent of the medicare "Part A" deductible, skilled nursing facility care, one hundred per cent of the medicare "Part B" deductible, one hundred per cent of the medicare "Part B" excess charges, and medically necessary emergency care in a foreign country as defined in paragraphs (I)(3)(a), (I)(3)(c), (I)(3)(d), (I)(3)(e) and (I)(3)(f) of this rule, respectively.

(ii) The annual deductible in plan "F With High Deductible" shall consist of out-of-pocket expenses, other than premiums, for services covered by [regular] plan "F," and shall be in addition to any other specific benefit deductibles. The basis for the deductible shall be one thousand five hundred dollars, and shall be adjusted annually from 1999 by the secretary of the "United States" department of health and human services to reflect the changes 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 dollars.

(g) Standardized medicare supplement benefit plan "G" shall include only the following: the basic (core) benefit as defined in paragraph (I)(2) of this rule, plus one hundred per cent of the medicare "Part A" deductible, skilled nursing facility care, one hundred per cent of the medicare "Part B" excess charges, and medically necessary emergency care in a foreign country as defined in paragraphs (I)(3)(a), (I)(3)(c), (I)(3)(e) and (I)(3)(f) of this rule, respectively.

(h) Standardized medicare supplement plan "K" is mandated by the "Medicare Prescription Drug, Improvement and Modernization Act of 2003," and shall include only the following:

(i) "Part A" hospital coinsurance, sixty-first through ninetieth days: coverage of one hundred per cent of the "Part A" hospital coinsurance amount for each day used from the sixty-first through the ninetieth day in any medicare benefit period;

(ii) "Part A" hospital coinsurance, ninety-first through one hundred fiftieth days: coverage of one hundred per cent of the "Part A" hospital coinsurance amount for each medicare lifetime inpatient reserve day used from the ninety-first through the one hundred fiftieth day in any medicare benefit period;

(iii) "Part A" hospitalization after lifetime reserve days are exhausted: Upon exhaustion of the medicare hospital inpatient coverage, including the lifetime reserve days, coverage of one hundred per cent 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 three hundred sixty-five days. The provider shall accept the issuer's payment as payment in full and may not bill the insured for any balance;

(iv) Medicare "Part A" deductible: coverage for fifty per cent of the medicare "Part A" inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in paragraph (K)(6)(h)(x) of this rule.

(v) Skilled nursing facility care: coverage for fifty per cent of the coinsurance amount for each day used from the twenty-first day through the one hundredth day in a medicare benefit period for post-hospital skilled nursing facility care eligible under medicare "Part A" until the out-of-pocket limitation is met as described in paragraph (K)(6)(h)(x) of this rule.

(vi) Hospice care: coverage for fifty per cent of cost sharing for all "Part A" medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in paragraph (K)(6)(h)(x) of this rule.

(vii) Blood: coverage for fifty per cent, under medicare "Part A" or "B," of the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described paragraph (K)(6)(h)(x) of this rule.

(viii) "Part B" cost sharing: except for coverage provided in paragraph (K)(6)(h)(ix) of this rule, coverage for fifty per cent of the cost sharing otherwise applicable under medicare "Part B" after the policyholder pays the deductible until the out-of-pocket limitation is met as described in paragraph (K)(6)(h)(x) of this rule.

(ix) "Part B" preventive services: coverage of one hundred per cent of the cost sharing for medicare "Part B" preventive services after the policyholder pays the "Part B" deductible; and

(x) Cost sharing after out-of-pocket limits: coverage of one hundred per cent 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 four thousand dollars in 2006, indexed each year by the appropriate inflation adjustment specified by the secretary of the "United States" 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," and shall include only the following:

(i) The benefits described in paragraphs (K)(6)(h)(i), (K)(6)(h)(ii), (K)(6)(h)(iii) and (K)(6)(h)(ix) of this rule;

(ii) The benefit described in paragraphs (K)(6)(h)(iv), (K)(6)(h)(v), (K)(6)(h)(vi), (K)(6)(h)(vii) and (K)(6)(h)(viii) of this rule, but substituting seventy-five per cent for fifty per cent; and

(iii) The benefit described in paragraph (K)(6)(h)(x) of this rule, but substituting two thousand dollars for four thousand dollars.

(j) Standardized medicare supplement plan "M" shall include only the following: the basic (core) benefit as defined in paragraph (I)(2) of this rule, plus fifty per cent of the medicare "Part A" deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country as defined in paragraphs (I)(3)(b), (I)(3)(c) and (I)(3)(f) of this rule, respectively.

(k) Standardized medicare supplement plan "N" shall include only the following: the basic (core) benefit as defined in paragraph (I)(2) of this rule, plus one hundred per cent of the medicare "Part A" deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country as defined in paragraphs (I)(3)(a), (I)(3)(c) and (I)(3)(f) of this rule, respectively, with copayments in the following amounts:

(i) The lesser of twenty dollars or the medicare "Part B" coinsurance or copayment for each covered health care provider office visit (including visits to medical specialists); and

(ii) The lesser of fifty 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.

(7) New or innovative benefits: an issuer may, with the prior approval of the superintendent, offer policies or certificates with new or innovative benefits, in addition to the standardized benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits shall include only benefits that are appropriate to medicare supplement insurance, are new or innovative, are not otherwise available, and are cost effective. Approval of new or innovative benefits must 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.

(L) Medicare select policies and certificates, as defined in this paragraph.

(1)

(a) This paragraph shall apply to medicare select policies and certificates, as defined in this paragraph.

(b) No policy or certificate may be advertised as a medicare select policy or certificate unless it meets the requirements of this paragraph.

(2) For the purposes of this paragraph:

(a) "Complaint" means any dissatisfaction expressed by an individual concerning a medicare select issuer or its network providers.

(b) "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 issuer or its network providers.

(c) "Medicare select issuer" means an issuer offering, or seeking to offer, a medicare select policy or certificate.

(d) "Medicare select policy" or "medicare select certificate" mean respectively a medicare supplement policy or certificate that contains restricted network provisions.

(e) "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 issuer to provide benefits insured under a medicare select policy.

(f) "Restricted network provision" means any provision which conditions the payment of benefits, in whole or in part, on the use of network providers.

(g) "Service area" means the geographic area approved by the superintendent within which an issuer is authorized to offer a medicare select policy.

(3) The superintendent may authorize an issuer to offer a medicare select policy or certificate, pursuant to this paragraph and section 4358 of the "Omnibus Budget Reconciliation Act (OBRA)" of 1990 if the superintendent finds that the issuer has satisfied all of the requirements of this rule.

(4) A medicare select issuer shall not issue a medicare select policy or certificate in this state until its plan of operation has been approved by the superintendent.

(5) A medicare select issuer shall file a proposed plan of operation with the superintendent in a format prescribed by the superintendent. 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:

(i) Services can 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 reflect the usual travel times within the community.

(ii) 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.

(iii) There are written agreements with network providers describing specific responsibilities.

(iv) Emergency care is available twenty-four hours per day and seven days per week.

(v) In the case of covered services that 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 otherwise seeking reimbursement from or recourse against any individual insured under a medicare select policy or certificate. This paragraph 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:

(i) The formal organizational structure;

(ii) The written criteria for selection, retention and removal of network providers; and

(iii) The procedures for evaluating quality of care provided by network providers, and the process to initiate corrective action when warranted.

(e) A list and description, by specialty, of the network providers.

(f) Copies of the written information proposed to be used by the issuer to comply with paragraph (L)(9) of this rule.

(g) Any other information requested by the superintendent.

(6)

(a) A medicare select issuer shall file any proposed changes to the plan of operation, except for changes to the list of network providers, with the superintendent prior to implementing such changes. Such changes shall be considered approved by the superintendent after thirty days unless specifically disapproved.

(b) An updated list of network providers shall be filed with the superintendent at least quarterly.

(7) A medicare select policy or certificate shall not restrict payment for covered services provided by non-network providers if:

(a) The services are for symptoms requiring emergency care or are immediately required for an unforeseen illness, injury or a condition; and

(b) It is not reasonable to obtain such services through a network provider.

(8) 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.

(9) A medicare select issuer 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 as required by paragraph (S)(4)(c) of this rule, in the form prescribed in appendix C to this rule sufficient to permit the applicant to compare coverage and premiums of the medicare select policy or certificate with:

(i) Other medicare supplement policies or certificates offered by the issurer; and

(ii) Other medicare select policies or certificates.

(b) A description (including 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 do 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 right to purchase any other medicare supplement policy or certificate otherwise offered by the issuer.

(g) A description of the medicare select issuer's quality assurance program and grievance procedure.

(10) Prior to the sale of a medicare select policy or certificate, a medicare select issuer shall obtain from the applicant a signed and dated form stating that the applicant has received the information provided pursuant to paragraph (L)(9) of this rule and that the applicant understands the restrictions of the medicare select policy or certificate.

(11) A medicare select issuer shall have and use procedures for hearing complaints and resolving written grievances from the subscribers. Such 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) At the time the policy or certificate is issued, the issuer shall provide detailed information to the policyholder describing how a grievance may be registered with the issuer.

(c) Grievances 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 issuer shall report no later than each March thirty-first to the superintendent regarding its grievance procedure. The report shall be in a format prescribed by the superintendent and shall contain the number of grievances filed in the past year and a summary of the subject, nature and resolution of such grievances.

(12) At the time of initial purchase, a medicare select issuer shall make available to each applicant for a medicare select policy or certificate the opportunity to purchase any medicare supplement policy or certificate otherwise offered by the issuer.

(13)

(a) At the request of an individual insured under a medicare select policy or certificate, a medicare select issuer shall make available to the individual insured the opportunity to purchase a medicare supplement policy or certificate offered by the issuer which has comparable or lesser benefits and which does not contain a restricted network provision. The issuer shall make such policies or certificates available without requiring evidence of insurability after the medicare select policy or certificate has been in force for six months.

(b) For the purposes of paragraph (L)(13) of this rule, a medicare supplement policy or certificate will be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the medicare select policy or certificate being replaced. For the purposes of this paragraph, a significant benefit means coverage for the medicare "Part A" deductible, coverage for at-home recovery services or coverage for "Part B" excess charges.

(14) Medicare select policies and certificates shall provide for continuation of coverage in the event the secretary of health and human services determines that medicare select policies and certificates issued pursuant to this paragraph should 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 issuer 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 issuer which has comparable or lesser benefits and which does not contain a restricted network provision. The issuer shall make such policies and certificates available without requiring evidence of insurability.

(b) For the purposes of paragraph (L)(14) of this rule, a medicare supplement policy or certificate will be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the medicare select policy or certificate being replaced. For the purposes of this paragraph, a significant benefit means coverage for the medicare "Part A" deductible, coverage for at-home recovery services or coverage for "Part B" excess charges.

(15) A medicare select issuer 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.

(M) Open enrollment

(1) An issuer shall not deny or condition the issuance or effectiveness of any medicare supplement policy or certificate available for sale in this state, 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 in the case of an application for a policy or certificate that is submitted prior to or during the six month period beginning with the first day of the first month in which an individual is both sixty-five years of age or older and is enrolled for benefits under medicare "Part B". Each medicare supplement policy and certificate currently available from an issuer shall be made available to all applicants who qualify under paragraph (M)(1) of this rule without regard to age.

(2)

(a) If an applicant qualifies under paragraph (M)(1) of this rule and submits an application during the time period referenced in paragraph (M)(1) of this rule and, as of the date of application, has had a continuous period of creditable coverage of at least six months, the issuer shall not exclude benefits based on a preexisting condition.

(b) If the applicant qualifies under paragraph (M)(1) of this rule and submits an application during the time period referenced in paragraph (M)(1) of this rule and, as of the date of application, has had a continuous period of creditable coverage that is less than six months, the issuer 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 paragraph.

(3) Except as provided in paragraphs (M)(2), (N) and (Y) of this rule, paragraph (M)(1) of this rule shall not be construed as preventing the exclusion of benefits under a policy, during the first six months, based on a preexisting condition for which the policyholder or certificate holder received treatment or was otherwise diagnosed during the six months before the coverage became effective.

(4) In connection with the solicitation or sale of a medicare supplement policy or certificate to persons who qualify under paragraph (M)(1) of this rule, no issuer shall:

(a) Engage in any act or practice with the intent or effect of restricting the sale to or discouraging the purchase by persons eligible for open enrollment of any medicare supplement policy or certificate available in this state. Such acts or practices include but are not limited to the following:

(i) Creating a disincentive for producers to sell medicare supplement policies or certificates during the open enrollment period through compensation arrangements that reduce or eliminate compensation for sales made to persons eligible for open enrollment;

(ii) Applying waiting periods for coverage of pre-existing conditions as described in paragraph (M)(2) of this rule only to policies or certificates issued to persons eligible for open enrollment;

(iii) Engaging in premium rating practices which result in premiums which are higher for persons eligible for open enrollment than premiums for persons not eligible for open enrollment;

(iv) Failing to offer to persons eligible for open enrollment any medicare supplement policy or certificate which is available for purchase from the issuer in this state.

(N) Guaranteed issue for eligible persons

(1) Guaranteed issue

(a) Eligible persons are those individuals described in paragraph (N)(2) of this rule who seek to enroll under the policy during the period specified in paragraph (N)(3) of this rule 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 issuer shall not deny or condition the issuance or effectiveness of a medicare supplement policy described in paragraph (N)(5) of this rule that is offered and is available for issuance to new enrollees by the issuer, shall not discriminate in the pricing of such a medicare supplement policy because of health status, claims experience, receipt of health care, or medical condition, and shall not impose an exclusion of benefits based on a preexisting condition under such a medicare supplement policy.

(2) Eligible persons

An eligible person is an individual described in any of the following paragraphs:

(a) The individual 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 such supplemental health benefits to the individual; or the individual is enrolled under an employee welfare benefit plan that is primary to medicare and the plan terminates or the plan ceases to provide all health benefits to the individual because the individual leaves the plan;

(b)

(i) The individual is enrolled with a "Medicare Advantage" organization under a "Medicare Advantage" plan under "Part C" of medicare, and any of the following circumstances apply, or the individual is sixty-five 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", and there are circumstances similar to those described below that would permit discontinuance of the individual's enrollment with such provider if such individual were enrolled in a "Medicare Advantage" plan:

(a) The certification of the organization or plan under this part has been terminated; or

(b) The organization has terminated or otherwise 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" (where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under section 1856), 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 such 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

(e) The individual meets such other exceptional conditions as the secretary may provide.

(c)

(i) The individual is enrolled with:

(a) An eligible organization under a contract under section 1876 of the "Social Security Act" (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" (health care prepayment plan); or

(d) An organization under a medicare select policy; and

(ii) The enrollment ceases under the same circumstances that would permit discontinuance of an individual's election of coverage under paragraph (N)(2)(b) of this rule.

(d) The individual is enrolled under a medicare supplement policy and the enrollment ceases because:

(i)

(a) Of the insolvency of the issuer or bankruptcy of the nonissuer organization; or

(b) Of other involuntary termination of coverage or enrollment under the policy;

(ii) The issuer of the policy substantially violated a material provision of the policy; or

(iii) The issuer, or an agent or other entity acting on the issuer's behalf, materially misrepresented the policy's provisions in marketing the policy to the individual;

(e)

(i) The individual was enrolled under a medicare supplement policy and terminates enrollment and subsequently enrolls, for the first time, with any "Medicare Advantage" organization under a "Medicare Advantage" plan under "Part C" of medicare, any eligible organization under a contract under section 1876 (medicare risk or cost), any similar organization operating under demonstration project authority, any "PACE" program under section 1894 of the "Social Security Act", or a medicare select policy; and

(ii) The subsequent enrollment under paragraph (N)(2)(e)(i) of this rule is terminated by the enrollee during any period within the first twelve months of such subsequent enrollment (during which the enrollee is permitted to terminate such subsequent enrollment under section 1851(e) of the federal "Social Security Act"); or

(f) The individual, upon first becoming eligible for medicare "Part A" for benefits at age sixty-five or older, enrolls in a "Medicare Advantage" plan under "Part C" of medicare, or with a "PACE" provider under section 1894 of the "Social Security Act," and disenrolls from the plan or program by not later than twelve months after the effective date of enrollment.

(g) The individual enrolls in a medicare "Part D" plan during the initial enrollment period and, at the time of enrollment in "Part D", was enrolled under a medicare supplement policy that covers outpatient prescription drugs and the individual 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 paragraph (N)(5)(d) of this rule.

(3) Guaranteed issue time periods

(a) In the case of an individual described in paragraph (N)(2)(a) of this rule, the guaranteed issue period begins on the later of:

(i) The date 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

(ii) The date that the applicable coverage terminates or ceases; and ends sixty-three days thereafter;

(b) In the case of an individual described in paragraph (N)(2)(b), (N)(2)(c), (N)(2)(e), or (N)(2)(f) of this rule whose enrollment terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends sixty-three days after the date the applicable coverage is terminated;

(c) In the case of an individual described in paragraph (N)(2)(d)(i) of this rule, the guaranteed issue period begins on the earlier of:

(i) The date that the individual receives a notice of termination, a notice of the issuer's bankruptcy or insolvency, or other such similar notice if any, and

(ii) The date that the applicable coverage is terminated, and ends on the date that is sixty-three days after the date the coverage is terminated;

(d) In the case of an individual described in paragraph (N)(2)(b), (N)(2)(d)(ii), (N)(2)(d)(iii), (N)(2)(e) or (N)(2)(f) of this rule, who disenrolls voluntarily, the guaranteed issue period begins on the date that is sixty days before the effective date of the disenrollment and ends on the date that is sixty-three days after the effective date;

(e) In the case of an individual described in paragraph (N)(2)(g) of this rule, the guaranteed issue period begins on the date the individual receives notice pursuant to section 1882(v)(2)(B) of the "Social Security Act" from the medicare supplement issuer during the sixty-day period immediately preceding the initial "Part D" enrollment period and ends on the date that is sixty-three days after the effective date of the individual's coverage under medicare "Part D"; and

(f) In the case of an individual described in paragraph (N)(2) of this rule but not described in the preceding provisions of this paragraph, the guaranteed issue period begins on the effective date of disenrollment and ends on the date that is sixty-three days after the effective date.

(4) Extended medigap access for interrupted trial periods

(a) In the case of an individual described in paragraph (N)(2)(e) of this rule (or deemed to be so described, pursuant to this paragraph) whose enrollment with an organization or provider described in paragraph (N)(2)(e)(i) of this rule is involuntarily terminated within the first twelve months of enrollment, and who, without an intervening enrollment, enrolls with another such organization or provider, the subsequent enrollment shall be deemed to be an initial enrollment described in paragraph (N)(2)(e) of this rule;

(b) In the case of an individual described in paragraph (N)(2)(f) of this rule, (or deemed to be so described, pursuant to this paragraph) whose enrollment with a plan or in a program described in paragraph (N)(2)(f) of this rule is involuntarily terminated within the first twelve months of enrollment, and who, without an intervening enrollment, enrolls in another such plan or program, the subsequent enrollment shall be deemed to be an initial enrollment described in paragraph (N)(2)(f) of this rule; and

(c) For the purposes of paragraphs (N)(2)(e) and (N)(2)(f) of this rule, no enrollment of an individual with an organization or provider described in paragraph (N)(2)(e)(i) of this rule, or with a plan or in a program described in paragraph (N)(2)(f) of this rule, may be deemed to be an initial enrollment under this paragraph after the two-year period beginning on the date on which the individual first enrolled with such 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) Paragraphs (N)(2)(a), (N)(2)(b), (N)(2)(c) and (N)(2)(d) of this rule is a medicare supplement policy which has a benefit package classified as plan "A," "B," "C," "F" (including "F" with a high deductible), "K" or "L" offered by any issuer.

(b)

(i) Subject to paragraph (N)(5)(b)(ii) of this rule, paragraph (N)(2)(e) of this rule is the same medicare supplement policy in which the individual was most recently previously enrolled, if available from the same issuer, or, if not so available, a policy described in paragraph (N)(5)(a) of this rule;

(ii) 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 paragraph is:

(a) The policy available from the same issue but modified to remove outpatient prescription drug coverage; or

(b) At the election of the policyholder, an "A," "B," "C," "F" (including "F" with a high deductible), "K" or "L" policy that is offered by any issuer;

(c) Paragraph (N)(2)(f) of this rule shall include any medicare supplement policy offered by any issuer;

(d) Paragraph (N)(2)(g) of this rule is a medicare supplement policy that has a benefit package classified as Plan "A," "B," "C," "F" (including "F" with a high deductible), "K" or "L", and that is offered and is available for issuance to new enrollees by the same issuer that issued the individual's medicare supplement policy with outpatient prescription drug coverage.

(6) Notification provisions

(a) At the time of an event described in paragraph (N)(2) of this rule because of which an individual loses coverage or benefits due to the termination of a contract or agreement, policy, or plan, the organization that terminates the contract or agreement, the issuer terminating the policy, or the administrator of the plan being terminated, respectively, shall notify the individual of his or her rights under paragraph (N) of this rule, and of the obligations of issuers of medicare supplement policies under paragraph (N)(1) of this rule. Such notice shall be communicated contemporaneously with the notification of termination.

(b) At the time of an event described in paragraph (N)(2) of this rule because of which an individual ceases 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 issuer offering the policy, or the administrator of the plan, respectively, shall notify the individual of his or her rights under paragraph (N) of this rule, and of the obligations of issuers of medicare supplement policies under paragraph (N)(1) of this rule. Such notice shall be communicated within ten working days of the issuer receiving notification of disenrollment.

(O) Standards for claims payment

(1) An issuer shall comply with section 1882(C)(3) of the "Social Security Act" (as enacted by section 4081 (B)(2)(C) of the "Omnibus Budget Reconciliation Act of 1987" (OBRA '87), Pub. L. No. 100-203 ) 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 otherwise 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 directly;

(d) Furnishing, at the time of enrollment, 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 otherwise; and

(f) Providing to the secretary of health and human services, at least annually, a central mailing address to which all claims may be sent by medicare carriers.

(2) Compliance with the requirements set forth in paragraph (O)(1) of this rule shall be certified on the medicare supplement insurance experience reporting form.

(P) Loss ratio standards and refund or credit of premium

(1) Loss ratio standards

(a)

(i) A medicare supplement policy form or certificate form shall not be delivered or issued for delivery unless the policy form or certificate form can be expected, as estimated for the entire period for which rates are computed to provide coverage, 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:

(a) At least seventy-five per cent of the aggregate amount of premiums earned in the case of group policies; or

(b) At least sixty-five per cent of the aggregate amount of premiums earned in the case of individual policies;

(ii) Calculated on the basis of incurred claims experience or incurred health care expenses where coverage is provided by a health insuring corporation on a service rather than reimbursement basis and earned premiums for such period and in accordance with accepted actuarial principles and practices. Incurred health care expenses where coverage is provided by a health insuring corporation shall not include:

(a) Home office and overhead costs;

(b) Advertising costs;

(c) Commissions and other acquisition costs;

(d) Taxes;

(e) Capital costs;

(f) Administrative costs; and

(g) Claims processing costs.

(b) All filings of rates and rating schedules shall demonstrate that expected claims in relation to premiums comply with the requirements of paragraph (P) of this rule 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 May 1, 1992, expected claims in relation to premiums shall meet:

(i) The originally filed anticipated loss ratio when combined with the actual experience since inception;

(ii) The appropriate loss ratio requirement from paragraphs (P)(1)(a)(i)(a) and (P)(1)(a)(i)(b) of this rule when combined with actual experience beginning with the effective date of this rule revision to date; and

(iii) The appropriate loss ratio requirement from paragraphs (P)(1)(a)(i)(a) and (P)(1)(a)(i)(b) of this rule over the entire future period for which the rates are computed to provide coverage.

(d) In meeting the tests in paragraphs (P)(1)(c)(i), (P)(1)(c)(ii) and (P)(1)(c)(iii) of this rule and for purposes of attaining credibility, an issuer may combine experience under policy forms which provide substantially similar coverage. Once a combined form is adopted, the issuer may not separate the experience except with the approval of the superintendent.

(2) Refund or credit calculation

(a) An issuer shall collect and file with the superintendent by May thirty-first of each year the data contained in the applicable reporting form contained in appendix A to this rule 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 one) exceeds the adjusted experience ratio since inception (ratio three), then a refund or credit calculation is 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 the purposes of this paragraph, policies or certificates issued prior to May 1, 1992, the issuer 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 the effective date of this amendment. The first such report shall be due by May 31, 1998.

(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 a de minimis level. 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 in no event shall it be less than the average rate of interest for thirteen-week treasury notes. A refund or credit against premiums due shall be made by September thirtieth following the experience year upon which the refund or credit is based.

(3) Annual filing of premium rates

(a) An issuer of medicare supplement policies and certificates issued before or after the effective date of this rule in this state shall file annually its rates, rating schedule and supporting documentation including ratios of incurred losses to earned premiums by policy duration for approval by the superintendent in accordance with the filing requirements and procedures prescribed by the superintendent. 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. Such demonstration shall exclude active life reserves. 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 years.

(b) As soon as practicable, but prior to the effective date of enhancements in medicare benefits, every issuer of medicare supplement policies or certificates in this state shall file with the superintendent in accordance with the applicable filing procedures of this state:

(i) Appropriate premium adjustments necessary to produce loss ratios as anticipated for the current premium for the applicable policies or certificates. The supporting documents as necessary to justify the adjustment shall accompany the filing.

(ii) An issuer shall make 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 issuer for the medicare supplement policies or certificates. No premium adjustments which would modify the loss ratio experience under the policy other than the adjustments described herein should be made with respect to a policy at any time other than upon its renewal date or anniversary date.

(iii) If an issuer fails to make premium adjustments acceptable to the superintendent, the superintendent may order premium adjustments, refunds or premium credits deemed necessary to achieve the loss ratio required by this paragraph.

(c) 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 superintendent may conduct a public hearing to gather information concerning a request by an issuer for an increase in a rate for a policy form or certificate form issued before or after the effective date of this rule 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 is made without consideration of any refund or credit for such reporting period. Public notice of such hearing shall be furnished in a manner deemed appropriate by the superintendent.

(Q) Filing and approval of policies and certificates and premium rates

(1) An issuer shall not deliver or issue for delivery a policy or certificate to a resident of this state unless the policy form or certificate form has been filed with and approved by the superintendent in accordance with filing requirements and procedures prescribed by the superintendent.

(2) An issuer shall file any riders or amendments to policy or certificate forms to delete outpatient prescription drug benefits as required by the "Medicare Prescription Drug, Improvement, and Modernization Act of 2003" only with the superintendent in the state in which the policy or certificate was issued.

(3) An issuer 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 superintendent in accordance with the filing requirements and procedures prescribed by the superintendent. The superintendent shall use the following process for approving or disapproving proposed premium increases:

(a) As used in this paragraph, "benefits provided are not unreasonable in relation to the premium charged" means that the rates were calculated in accordance with sound actuarial principles.

(b) With respect to any filing of any premium rates for any individual or group medicare supplement policy, or for any endorsement or rider pertaining thereto, the superintendent of insurance may, within thirty days after filing:

(i) Disapprove such filing if he finds that the benefits provided are unreasonable in relation to the premium charged. Such disapproval shall be effected by written order of the superintendent, a copy of which shall be mailed to the issuer that has made the filing. In the order, the superintendent shall specify the reasons for his disapproval and state that a hearing will be held within fifteen days after requested in writing by the issuer. If a hearing is so requested, the superintendent shall also give such public notice as he considers appropriate. The superintendent, within fifteen days after the commencement of any hearing, shall issue a written order, a copy of which shall be mailed to the issuer that has made the filing, either affirming his prior disapproval or approving such filing if he finds that the benefits provided are not unreasonable in relation to the premium charged.

(ii) Set a date for a public hearing to commence no later than forty days after the filing. The superintendent shall give the issuer making the filing twenty days' written notice of the hearing and shall give such public notice as he considers appropriate. The superintendent, within twenty days after the commencement of a hearing, shall issue a written order, a copy of which shall be mailed to the issuer that has made the filing, either approving such filing if he finds that the benefits provided are not unreasonable in relation to the premium charged, or disapproving such filing if he finds that the benefits provided are unreasonable in relation to the premium charged.

(iii) Take no action, in which case such filing shall be deemed to be approved and shall become effective upon the thirty-first day after such filing, unless the superintendent has previously given to the issuer his written approval.

(c) At any time any filing has been approved pursuant to this section, the superintendent may, after a hearing of which at least twenty days' written notice has been given to the issuer that has made such filing and for which such public notice as he considers appropriate has been given, withdraw approval of such filing if he finds that the benefits provided are unreasonable in relation to the premium charged. Such withdrawal of approval shall be effected by written order of the superintendent, a copy of which shall be mailed to the issuer that has made the filing, which shall state the ground for such withdrawal and the date, not less than forty days after the date of such order, when the withdrawal or approval shall become effective.

(d) The superintendent may retain at the issuer's expense such attorneys, actuaries, accountants, and other experts not otherwise a part of the superintendent's staff as shall be reasonably necessary to assist in the preparation for and conduct of any public hearing under this section. The expense for retaining such experts and the expenses of the department of insurance incurred in connection with such public hearing shall be assessed against the issuer in an amount not to exceed one one-hundredth of one per cent of the sum of premiums earned plus net realized investments gain or loss of such issuer as reflected in the most current annual statement on file with the superintendent. Any person retained shall be under the direction and control of the superintendent and shall act in a purely advisory capacity.

(4)

(a) Except as provided in paragraph (Q)(4)(b) of this rule, an issuer shall not file for approval more than one form of a policy or certificate of each type for each standard medicare supplement benefit plan.

(b) An issuer may offer, with the approval of the superintendent, up to four additional policy forms or certificate forms of the same type for the same standard medicare supplement benefit plan, one for each of the following cases:

(i) The inclusion of new or innovative benefits;

(ii) The addition of either direct response or agent marketing methods;

(iii) The addition of either guaranteed issue or underwritten coverage;

(iv) The offering of coverage to individuals eligible for medicare by reason of disability.

(c) For the purposes of this paragraph, a "type" means an individual policy, a group policy, an individual medicare select policy, or a group medicare select policy.

(5)

(a) Except as provided in paragraph (Q)(5)(a)(i) of this rule, an issuer shall continue to make available for purchase any policy form or certificate form issued after the effective date of this rule that has been approved by the superintendent. A policy form or certificate form shall not be considered to be available for purchase unless the issuer has actively offered it for sale in the previous twelve months.

(i) An issuer may discontinue the availability of a policy form or certificate form if the issuer provides to the superintendent in writing its decision at least thirty days prior to discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the superintendent, the issuer shall no longer offer for sale the policy form or certificate form in this state.

(ii) An issuer that discontinues the availability of a policy form or certificate form pursuant to paragraph (Q)(5)(a)(i) of this rule 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 years after the issuer provides notice to the superintendent of the discontinuance. The period of discontinuance may be reduced if the superintendent determines that a shorter period is appropriate.

(b) The sale or other transfer of medicare supplement business to another issuer shall be considered a discontinuance for the purposes of paragraph (Q)(5) of this rule.

(c) A change in the rating structure or methodology shall be considered a discontinuance under paragraph (Q)(5)(a) of this rule unless the issuer complies with the following requirements:

(i) The issuer provides an actuarial memorandum, in a form and manner prescribed by the superintendent, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and existing rates.

(ii) The issuer 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 superintendent may approve a change to the differential which is in the public interest.

(6)

(a) Except as provided in paragraph (Q)(6)(b) of this rule, 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 paragraph (P) of this rule.

(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.

(R) Permitted compensation arrangements

(1) An issuer 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 two hundred per cent 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 must be the same as that provided in the second year or period and must be provided for no fewer than five renewal years.

(3) No issuer or other entity shall provide compensation to its agents or other producers and no agent or producer shall receive compensation greater than the renewal compensation payable by the replacing issuer on renewal policies or certificates if an existing policy or certificate is replaced.

(4) For purposes of paragraphs (M) and (R) of this rule, "compensation" includes pecuniary or non-pecuniary remuneration of any kind relating to the sale or renewal of the policy or certificate including but not limited to bonuses, gifts, prizes, awards and finders fees.

(5) No issuer or other entity shall violate the provisions of paragraph (M)(4) of this rule.

(S) Required disclosure provisions

(1) General rules.

(a) Medicare supplement policies and certificates shall include a renewal or continuation provision. The language or specifications of such provision shall be consistent with the type of contract issued. The provision shall be appropriately captioned and shall appear on the first page of the policy and shall include any reservation by the issuer of the right to change premiums and any automatic renewal premium increases based on the age of the policyholder or certificate holder.

(b) All riders or endorsements 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 riders or endorsements by which the issuer effectuates a request made in writing by the insured, exercises a specifically reserved right under a medicare supplement policy other than the right to reduce or eliminate benefits or coverage, or is required to reduce or eliminate benefits to avoid duplication of medicare benefits. 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 the benefits are required by the minimum standards for medicare supplement policies, or if the increased benefits or coverage is required by law. Where 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, such 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 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)

(i) Issuers of accident and sickness policies or certificates which provide hospital or medical expense coverage on an expense incurred or indemnity basis to a person(s) eligible for medicare shall provide to those applicants a "Guide to Health Insurance for People with Medicare" in the form developed jointly by the "National Association of Insurance Commissioners" and the "Centers for Medicare and Medicaid Services" ("CMS") and in a type size no smaller than twelve point type. Delivery of the guide shall be made whether or not such policies or certificates are advertised, solicited or issued as medicare supplement policies or certificates as defined in this rule. Except in the case of direct response issuers, delivery of the guide shall be made to the applicant at the time of application and acknowledgement of receipt of the guide shall be obtained by the issuer. Direct response issuers shall deliver the guide to the applicant upon request but not later than at the time the policy is delivered.

(ii) For the purposes of paragraph (S)(1)(f) of this rule, "form" means the language, format, type size, type proportional spacing, bold character, and line spacing.

(2) Notice requirements.

(a) As soon as practicable, but no later than thirty days prior to the annual effective date of any medicare benefit changes, an issuer shall notify its policyholders and certificate holders of modifications it has made to medicare supplement policies or certificates in a format acceptable to the superintendent. The requirements of this paragraph apply to medicare supplement policies and certificates delivered or issued for delivery in this state before or after the effective date of this rule. The notice shall be in twelve point type in a format acceptable to the superintendent. The notice shall:

(i) 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

(ii) Inform each policyholder or certificate holder as to when 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) Such notices shall not contain or be accompanied by any solicitation.

(3) "MMA" notice requirements.

Issuers shall comply with any notice requirements of the "Medicare Prescription Drug, Improvement, and Modernization Act of 2003."

(4) Outline of coverage requirements for medicare supplement policies.

(a) Issuers shall provide an outline of coverage to all applicants at the time 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 the time of 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 such policy or certificate when it is delivered and contain the following statement, in no less than twelve-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 paragraph (S) of this rule shall be in the form prescribed in appendix C to this rule, and consists of four parts: a cover page, premium information, disclosure pages, and charts displaying the features of each benefit plan offered by the issuer. The outline of coverage shall be in the language, format and order prescribed in appendix C to this rule in no less than twelve point type. All plans shall be shown on the cover page, and the plan(s) that are offered by the issuer 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.

(Include for each plan prominently identified in the cover page, a chart showing the services, medicare payments, plan payments and insured payments for each plan, using the same language, in the same order, layout, and format as shown in the charts in appendix C to this rule. No more than four plans may be shown on one chart. For purposes of illustration, charts for each plan are included in appendix C to this rule. An issuer may use additional benefit plan designations on these charts pursuant to paragraphs (J)(4) and (K)(5) of this rule as applicable.)

(Include an explanation of any innovative benefits on the cover page and in the chart, in a manner approved by the superintendent.)

(5) Notice regarding policies or certificates which are not medicare supplement policies.

(a) Any sickness and accident insurance policy or certificate, other than a medicare supplement policy or a policy issued pursuant to a contract under section 1876 of the federal "Social Security Act" (42 U.S.C. section 1395, et seq.); disability income policy; or other policy identified in paragraph (C)(2) of this rule, issued for delivery in this state to persons eligible for medicare shall notify insureds under the policy that the policy is not a medicare supplement policy or certificate. 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. The notice shall be in no less than twelve-point type and shall contain the following language:

"This (policy or certificate) is not a medicare supplement (policy or certificate). 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 paragraph (S)(4)(a) of this rule shall disclose, using the applicable statement in appendix F to this rule, 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.

(T) Requirements for application forms and replacement coverage

(1) Application forms shall include the statements and questions in appendix D to this rule designed to elicit information as to whether, as of the date of the application, the applicant currently has medicare supplement, "Medicare Advantage", medicaid coverage, or another health insurance policy or certificate in force or whether a medicare supplement policy or certificate is intended to replace any other sickness and accident policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and agent, containing such statements and questions may be used.

(2) In the case of a direct response issuer, a copy of the application or supplemental form, signed by the applicant, and acknowledged by the issuer, shall be returned to the applicant by the issuer upon delivery of the policy.

(3) Upon determining that a sale will involve replacement of medicare supplement coverage, any issuer, other than a direct response issuer, 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 copy of such notice signed by the applicant and the agent, except where the coverage is sold without an agent, shall be provided to the applicant and an additional signed copy shall be retained by the issuer. A direct response issuer shall deliver to the applicant at the time of the issuance of the policy the notice regarding replacement of medicare supplement coverage.

(4) The notice required by paragraph (T)(3) of this rule, for an issuer shall be as provided in appendix E to this rule in substantially the same form and in no less than twelve point type.

(U) Filing requirements for advertising

(1) Each issuer of medicare supplement policies or certificates in this state shall provide to the superintendent, prior to its use, a copy of any medicare supplement advertisement intended for use in this state, whether through written or electronic media. No such advertisement shall be used unless approved in writing by the superintendent. Any advertisement not disapproved within thirty days after filing shall be deemed approved.

(2) If the image or voice of a celebrity is used in the advertisement, any medicare supplement advertisement shall disclose that the celebrity has been paid to endorse or advertise the policy.

In radio and television advertising, the disclosure shall be spoken by the celebrity. In print advertising, the disclosure shall appear in at least twelve-point type, surrounded by a black line box. There shall be at least one-eighth inch blank space between the black line box and the text of the disclosure. The box shall surround no other text or graphic image.

An issuer may determine the precise language in which it makes this disclosure, provided the language is clear and unambiguous.

(V) Standards for marketing

(1) An issuer, directly or through its producers, shall:

(a) Establish marketing procedures to assure that any comparison of policies by its agents or other producers 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:

"Notice to buyer: This policy may not cover all of your medical expenses."

(d) Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for medicare supplement insurance already has sickness and accident insurance and the types and amounts of any such insurance.

(e) Establish auditable procedures for verifying compliance with paragraph (V)(1) of this rule.

(2) In addition to the practices prohibited in sections 3901.19 to 3901.221 of the Revised Code, paragraph (C) of rule 3901-1-07 of the Administrative Code, and paragraph (D) of rule 3901-8-09 of the Administrative Code, the following acts and practices are prohibited:

(a) Twisting. Knowingly making any misleading 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 any 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 directly or indirectly 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 words of similar import shall not be used unless the policy is issued in compliance with this rule.

(W) 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 is prohibited.

(3) An issuer 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.

(X) Reporting of multiple policies

(1) On or before March first of each year, an issuer shall report the following information for every individual resident of this state for which the issuer 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 above must be grouped by individual policyholder.

(3) Attached as appendix B to this rule is a reporting form for compliance with paragraph (X) of this rule.

(Y) 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 issuer 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 such 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 months, the replacing policy shall not provide any time period applicable to preexisting conditions, waiting periods, elimination periods and probationary periods.

(Z) Prohibition against use of genetic information and requests for genetic testing for policy years beginning on or after May 21, 2009.

(1) An issuer of a medicare supplement policy or certificate shall not 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 preexisting condition) and shall not 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 such individual.

(2) Nothing in paragraph (Z)(1) of this rule shall be construed to limit the ability of an issuer, to the extent otherwise permitted by law, from:

(a) Denying or conditioning the issuance or effectiveness of the policy or certificate or increasing the premium for an employer 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 (in such case, 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 issuer of a medicare supplement policy or certificate shall not request or require an individual or a family member of such individual to undergo a genetic test.

(4) Paragraph (Z)(3) of this rule shall not be construed to preclude an issuer of a medicare supplement policy or certificate from obtaining and using the results of a genetic test in making a determination regarding payment (as defined for the purposes of applying the regulations promulgated under part "C" of "Title XI" and section 264 of the "Health Insurance Portability and Accountability Act of 1996," as may be revised from time to time) and consistent with paragraph (Z)(1) of this rule.

(5) For purposes of carrying out paragraph (Z)(4) of this rule, an issuer of a medicare supplement policy or certificate may request only the minimum amount of information necessary to accomplish the intended purpose.

(6) Notwithstanding paragraph (Z)(3) of this rule, an issuer of a medicare supplement policy may request, but not require, that an individual or a family member of such an individual undergo a genetic test if each of the following conditions is met:

(a) The request is made pursuant to research that complies with part 46 of Title 45, Code of Federal Regulations, or equivalent federal regulations, and any applicable state or local law or regulations for the protection of human subjects in research.

(b) The issuer clearly indicates to each individual, or in the case of a minor child, to the legal guardian of such child, to whom the request is made, that:

(i) Compliance with the test is voluntary; and

(ii) Non-compliance will have no effect on enrollment status or premium or contribution amounts.

(c) No genetic information collected or acquired under paragraph (Z)(6) of this rule shall 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 issuer notifies the secretary in writing that the issuer is conducting activities pursuant to the exception provided for under paragraph (Z)(6) of this rule, including a description of the activities conducted.

(e) The issuer complies with such other conditions as the secretary may by regulation require for activities conducted under paragraph (Z)(6) of this rule.

(7) An issuer of a medicare supplement policy or certificate shall not request, require, or purchase genetic information for underwriting purposes.

(8) An issuer of a medicare supplement policy or certificate shall not request, require, or purchase genetic information with respect to any individual prior to such individual's enrollment under the policy in connection with such enrollment.

(9) If an issuer of a medicare supplement policy or certificate obtains genetic information incidental to the requesting, requiring, or purchasing of other information concerning any individual, such request, requirement, or purchase shall not be considered a violation of paragraph (Z)(8) of this rule if such request, requirement, or purchase is not in violation of paragraph (Z)(7) of this rule.

(10) For the purposes of paragraph (Z) of this rule:

(a) "Issuer of a medicare supplement policy or certificate" includes a third-party administrator, or other person acting for or on behalf of such issuer.

(b) "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 such individual.

(c) "Genetic information" means, with respect to any individual, information about such individual's genetic tests, the genetic tests of family members of such individual, and the manifestation of a disease or disorder in family members of such individual. Such term includes, with respect to any individual, any request for, or receipt of, genetic services, or participation in clinical research which includes genetic services, by such individual or any family member of such individual. Any reference to genetic information concerning an individual or family member of an individual who is a pregnant woman, includes genetic information of any fetus carried by such pregnant woman, or with respect to an individual or family member utilizing reproductive technology, includes genetic information of any embryo legally held by an individual or family member. The term "genetic information" does not include information about the sex or age of any individual.

(d) "Genetic services" means a genetic test, genetic counseling (including obtaining, interpreting, or assessing genetic information), or genetic education.

(e) "Genetic test" means an analysis of human "DNA," "RNA," chromosomes, proteins, or metabolites, that detect genotypes, mutations, or chromosomal changes. The term "genetic test" does not mean 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 could reasonably be detected by a health care professional with appropriate training and expertise in the field of medicine involved.

(f) "Underwriting purposes" means:

(i) Rules for, or determination of, eligibility (including enrollment and continued eligibility) for benefits under the policy;

(ii) The computation of premium or contribution amounts under the policy;

(iii) The application of any preexisting condition exclusion under the policy;

(iv) Other activities related to the creation, renewal, or replacement of a contract of health insurance or health benefits.

(AA) Severability

If any paragraph, term or provision of this rule is adjudged invalid for any reason, the judgment shall not affect, impair or invalidate any other paragraph, term or provision of this rule, but the remaining paragraphs, terms or provisions shall be and continue in full force and effect.

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Effective: 03/27/2014
R.C. 119.032 review dates: 01/08/2014 and 08/31/2018
Promulgated Under: 119.03
Statutory Authority: 3901.041 , 3923.33 , 3923.331 to 3923.339
Rule Amplifies: 3923.33 , 3923.331 to 3923.339
Prior Effective Dates: 6/4/1982, 2/10/1989 (Emer), 7/24/1989 (Emer), 11/10/1989, 12/28/1989 (Emer), 10/19/1990, 5/1/1992, 4/26/1996, 11/19/1998 (Emer), 1/14/1999, 8/1/2001, 11/14/2002, 8/4/2005, 7/1/2009

3901-8-09 Solicitation and sale of medicare supplemental accident and health policies.

(A) Purpose

The purpose of this rule is to safeguard the interests of medicare-eligible persons in the solicitation and sale of any type of medicare supplemental sickness and accident health insurance policies by providing for the regulation of the solicitation and sale of medicare supplemental accident and health insurance policies; and to assure that medicare-eligible persons are not subjected to unfair or deceptive acts or practices in the solicitation and sale of medicare supplemental accident and health insurance policies by defining additional unfair or deceptive acts or practices in this rule.

(B) Authority

This rule is promulgated pursuant to the authority vested in the superintendent under section 3901.041 of the Revised Code, providing that the superintendent of insurance shall adopt, amend and rescind rules and make adjudications necessary to discharge the superintendent's duties and exercise the superintendent's powers under Title 39 of the Revised Code; section 3923.332 of the Revised Code, providing that the superintendent shall adopt reasonable rules to establish minimum standards for advertising and marketing practices for medicare supplement policies and certificates; and section 3901.21 of the Revised Code, providing that the enumeration in sections 3901.19 to 3901.26 of the Revised Code, of specific unfair or deceptive acts or practices in the business of insurance is not exclusive or restrictive or intended to limit the powers of the superintendent of insurance to adopt rules to implement said section, or to take action under other sections of the Revised Code.

(C) Definitions

(1) "Medicare-eligible person" means any person eligible for either medicare part A or medicare part B, pursuant to Title XVIII, U.S. Code.

(2) "Medicare program" refers to the benefits available to medicare-eligible persons, pursuant to Title XVIII of the Social Security Act, codified in 42 U.S.C. 1395 ff.

(D) Unfair or deceptive acts or practices defined

It shall be deemed an unfair or deceptive act or practice to commit or perform any of the following:

(1) Any implication, either verbal or written, which conveys the impression that any medicare supplemental insurance program being offered by a company, agent or broker is affiliated with or sponsored by the federal government, the social security administration, the centers for medicare and medicaid services, or the department of health and human services. No solicitation, advertisement, or marketing material shall be used in the state that fails to include the following or a substantially similar disclaimer: "Not connected with or endorsed by the U.S. government or the federal medicare program."

(2) Any of the following unsolicited contacts with a medicare-eligible person:

(a) Door-to-door solicitation including leaving information such as a leaflet, flyer, or door hanger at a residence, or leaving information such as a leaflet or flyer on someone's car;

(b) Approaching individual prospective applicants in common areas (e.g., parking lots, hallways, lobbies, sidewalks, etc.);

(c) Telephonic solicitation including leaving electronic voicemail messages;

(d) These prohibitions on marketing through unsolicited contacts do not extend to mail and other media (e.g., advertisements, direct mail), or unsolicited contacts with prospective applicants with whom the entity or insurance agent has a business relationship.

(3) Any representation by an agent or broker to the effect that such person is a "counselor", "advisor" or similar designation, for any association or group of medicare-eligible persons, which obscures the actual role of such agent or broker with respect to the solicitation or sale of such insurance.

(4) Any act for the purpose of inducing an applicant or prospective applicant to sign any form, application or document in blank.

(5) Failure by the agent or broker to state affirmatively, verbally and in writing, the following:

(a) That the person making the solicitation or sale is, in fact, an insurance agent or broker;

(b) That the agent or broker is making the solicitation or sale on behalf of an insurance company or insurance companies, which company or companies must be identified to the senior citizens;

(c) That the medicare-eligible person may verify the information required to be stated in paragraphs (D)(5)(a) and (D)(5)(b) of this rule by contacting the Ohio department of insurance;

(d) That the medicare-eligible person may contact the agent or broker making the solicitation or sale at both an address and telephone number provided by the agent or broker;

(e) That the medicare-eligible person may contact the insurance company or insurance companies on behalf of which the solicitation or sale was made at an address and telephone number provided by the agent or broker;

(f) That the agent or broker, and the insurance company, have no connection or affiliation with, and are not in any way sponsored by, the federal or state government, the social security administration, the centers for medicare and medicaid services, or the department of health and human services;

(g) That the medicare-eligible person has the option, if he or she purchases a medicare supplemental insurance policy, of paying his or her premium(s) directly to the insurance company.

(6) Any inaccurate or misleading description of the benefits provided by either the medicare program or the medicare supplemental policy being offered for sale.

(7) Any attempt by an insurance company, agent or broker to arrange a solicitation or sales interview with an applicant or prospective applicant by implying or conveying in any way the impression that such insurance company, agent or broker has been authorized by the federal government, the medicare program or the social security administration to contact said applicant or prospective applicant for the purpose of reviewing, modifying or discussing his or her existing insurance program. Such prohibition is also extended to any statement or act which implies or conveys in any way the impression that such insurance company, agent or broker has access to official records of the federal government, medicare program or social security administration, pertaining to the applicant's or prospective applicant's insurance program.

(8) Use of any title or initials by the agent or broker which implies or conveys the impression that such agent or broker is affiliated with or sponsored by the federal government, medicare program or social security administration. Such prohibition also applies to the use of trade names by individual agents or brokers.

(9) The making of any misrepresentation or incomplete comparison by the insurance company, agent or broker, by commission or omission, for the purpose of inducing or tending to induce a medicare-eligible person to purchase, amend, lapse, forfeit, change or surrender insurance.

(E) Severability

If any paragraph, term or provision of this rule is adjudged invalid for any reason, the judgment shall not affect, impair or invalidate any other paragraph, term or provision of this rule, but the remaining paragraphs, terms and provisions shall be and continue in full force and effect.

Effective: 06/22/2012
R.C. 119.032 review dates: 08/26/2016
Promulgated Under: 119.03
Statutory Authority: 3901.041 , 3901.21 , 3923.332
Rule Amplifies: 3901.19 to 3901.26 , 3923.332
Prior Effective Dates: 5/14/1979; 4/5/2007, 11/11/2011

3901-8-10 Notice of public hearing on rates for individual sickness and accident insurance.

(A) Purpose

The purpose of this rule is to provide specific requirements for the dissemination of information concerning a public hearing scheduled by the superintendent of insurance pursuant to section 3923.021 of the Revised Code.

(B) Authority

This rule is promulgated pursuant to the authority vested in the superintendent under section 3901.041 of the Revised Code.

(C) Definitions

(1) "Notice" means a statement which sets forth at least the following:

(a) The name and address of the insurer;

(b) The date, time and place of the scheduled hearing;

(c) The purpose of the hearing;

(d) A statement that identifies the policies, endorsements, and/or riders affected by the filing and hearing;

(e) A statement that members of the public are entitled to testify at the public hearing.

(2) "State-wide publication" means publication in a newspaper of general circulation in Cuyahoga, Franklin, Hamilton, Lucas, and Athens counties.

(3) "Regional publication" means publication in a newspaper of general circulation in each geographical area of the state which has a sufficient number of affected resident policyholders to warrant publication in that area, as agreed to by the insurer and the department of insurance.

(4) "Legal advertisement" means an advertisement in a form prescribed by the superintendent of insurance published in a newspaper of general circulation.

(5) "Display advertisement" means an advertisement of at least nine square inches published in a newspaper of general circulation.

(D) Required notice

When an insurer receives notice from the department of insurance that a public hearing will be held, pursuant to section 3923.021 of the Revised Code to consider an adjustment of the premium rates for a policy, endorsement and/or rider which is subject to this rule, the insurer shall give notice of such public hearing to its policyholders, then shown by its records to be residents of Ohio and who, on the date that the insurer receives notice of the hearing, would be affected by the proposed rate adjustment. Notice need not be given if fewer than one hundred Ohio policyholders would be affected by the proposed adjustment. The department of insurance will reschedule a public hearing upon the request of the insurer if there would be insufficient time before the original hearing date for the insurer to provide notice to its policyholders by the method of providing notice selected by the insurer.

(E) Method of furnishing notice

The insurer shall provide notice to its Ohio policyholders in the following manner:

(1) The insurer shall mail notice of the public hearing to the last known address of each policyholder affected by the hearing. Such notice may either be included with other materials sent by the insurer to the policyholder, or by a separate mailing. Such notice shall be mailed not less than five days prior to the scheduled hearing date. Alternatively, the insurer may mail a brief notification to the last known address of each policyholder affected by the hearing, stating that the policyholder may access information via the insurer's website about an imminent rate hearing that may affect their policy. Such brief notification must include the name and address of the insurer and the date of the scheduled hearing and include the internet website address. The notification must also provide a toll free number and state that the number is where the policyholder can request a paper mailing of the notice information described in paragraph (C)(1) of this rule. The notification must be mailed not less than ten days prior to the scheduled hearing date.

(2) As an alternative to providing direct mail notice to each affected policyholder, the insurer may elect to furnish notice of the hearing by the following method:

(a) The insurer shall create and maintain a mailing list of policyholders, who have indicated a desire to receive notice of a public hearing. The insurer shall notify each of its Ohio policyholders at least once each year of their right to have their name and address placed on such a mailing list. When a hearing is scheduled which will affect the premium rates of a policyholder who has had his name placed on the mailing list, the insurer shall furnish that policyholder with notice of the public hearing in the same manner that notice is provided in paragraph (E)(1) of this rule.

(b) In addition to providing notice to those policyholders on its mailing list each insurer shall provide notice of the hearing to its other affected policyholders through publication of appropriate legal advertisements where the total number of such affected policyholders is less than fifteen thousand. If the hearing will affect policyholders throughout the state of Ohio, the insurer shall make statewide publication of the legal advertisements. If the hearing will only affect policyholders residing in some limited geographical area within the state, the insurer shall make regional publication of the legal advertisement instead of statewide publication. The legal advertisement shall be published at least twice prior to the scheduled hearing date. The second such publication must be made no more than five days prior to the scheduled hearing date.

(c) As an alternative to providing notice by publication of legal advertisements, the insurer may provide notice to affected policyholders by publication of appropriate display advertisements. Such display advertisement must be used instead of a legal advertisement if more than fifteen thousand of the insurer's policyholders will be affected by the public hearing. If the hearing will affect policyholders throughout the state of Ohio, the insurer shall make state-wide publication of the display advertisements. If the hearing will only affect policyholders residing in some limited geographical area within the state, the insurer shall make regional publication of the display advertisements instead of state-wide publication. The display advertisements shall be published at least twice prior to the scheduled hearing date. The second such publication must be made no more than five days prior to the scheduled hearing date.

(3) As an alternative to providing notice in the manner described in paragraph (E)(1) or (E)(2) of this rule, the insurer may elect to furnish notice of the hearing by the following method:

(a) The insurer shall email notice of the public hearing to the last known email address of each policyholder affected by the hearing. Such notice may either be included with other materials sent by the insurer to the policyholder, or by a separate email. Such notice shall be emailed not less than five days prior to the scheduled hearing date. The notification must also provide a toll free number and state that the number is where the policyholder can request a paper mailing of the notice information described in paragraph (C)(1) of this rule.

(b) In addition to providing email notice to policyholders each insurer shall provide notice of the hearing to its affected policyholders through publication of appropriate legal advertisements where the total number of such affected policyholders is less than fifteen thousand. If the hearing will affect policyholders throughout the state of Ohio, the insurer shall make statewide publication of the legal advertisements. If the hearing will only affect policyholders residing in some limited geographical area within the state, the insurer shall make regional publication of the legal advertisement instead of statewide publication. The legal advertisement shall be published at least twice prior to the scheduled hearing date. The second such publication must be made no more than five days prior to the scheduled hearing date.

(c) As an alternative to providing notice by publication of legal advertisements, the insurer may provide notice to affected policyholders by publication of appropriate display advertisements. Such display advertisement must be used instead of a legal advertisement if more than fifteen thousand of the insurer's policyholders will be affected by the public hearing. If the hearing will affect policyholders throughout the state of Ohio, the insurer shall make state-wide publication of the display advertisements. If the hearing will only affect policyholders residing in some limited geographical area within the state, the insurer shall make regional publication of the display advertisements instead of state-wide publication. The display advertisements shall be published at least twice prior to the scheduled hearing date. The second such publication must be made no more than five days prior to the scheduled hearing date.

(F) Severability

If any paragraph, term or provision of this rule is adjudged invalid for any reason, the judgment shall not affect, impair or invalidate any other paragraph, term or provision of this rule, but the remaining paragraphs, terms and provisions shall be and continue in full force and effect.

Effective: 11/10/2014
Five Year Review (FYR) Dates: 08/26/2014 and 08/26/2019
Promulgated Under: 119.03
Statutory Authority: 3901.041
Rule Amplifies: 3923.021
Prior Effective Dates: 12/30/1979, 3/21/2005, 11/15/2009

3901-8-11 Unfair health claim practices.

(A) Purpose

The purpose of this rule is to define certain additional unfair trade practices and to set forth minimum standards in connection with the investigation and disposition of health claims arising under policies, certificates or contracts issued pursuant to Ohio's insurance statutes, rules and regulations under Titles XVII and XXXIX of the Revised Code. Nothing herein shall be construed to create or imply a private cause of action for violation of this rule.

(B) Authority

This rule is promulgated pursuant to the authority vested in the superintendent under section 3901.041 of the Revised Code.

Sections 3901.20 and 3901.21 of the Revised Code, respectively, prohibit unfair or deceptive practices in the business of insurance and define certain acts or practices as unfair or deceptive. Section 3901.21 of the Revised Code also provides that the enumeration of specific unfair or deceptive acts or practices in the business of insurance is not exclusive or restrictive or intended to limit the powers of the superintendent of insurance to adopt rules to implement that section.

Section 3901.3813 of the Revised Code permits the superintendent to adopt rules as the superintendent considers necessary to carry out the purposes of section 3901.38 and sections 3901.381 to 3901.3812 of the Revised Code.

(C) Definitions

(1) "Claim" means any request submitted to a third-party payer for benefits or proceeds under a benefit plan or contract on a standardized health claim form as described in rule 3901-8-03 of the Administrative Code.

(2) "Coordinated Care" means the management of health care services by a third-party payer for a beneficiary. Examples include, but are not limited to, provider selection or referral, preadmission certification, length of stay determination and second surgical opinions.

(3) "Day" means calendar day. However, when the last day of a time limit stated in this rule falls on a Saturday, Sunday or state or federal holiday, the time limit is extended to the next immediate following day that is not a Saturday, Sunday or holiday.

(4) "Deny or Denial" means a refusal to pay any portion of a claim. The application of contractual co-pays and deductibles are not considered a denial of a claim.

(5) "Documentation" includes, but is not limited to, all supporting documentation as defined in division (B)(2) of section 3901.381 of the Revised Code and any records of communications or activities, notes, work papers, claim forms, bills and explanation of benefit forms relative to a claim, including the electronic transmission of the data contained in such items.

(D) General claim practices

(1) A third-party payer shall notify the beneficiary and the provider of the denial of any claim. The notification shall include the specific reasons for the denial and the contract provision, condition, limitation or exclusion of the benefit plan or contract that is the basis for the denial of payment for the claim. The information must be provided in such a way that a reasonable person would understand the reasons and basis for the denial.

(2) No third-party payer shall indicate to a beneficiary or provider on an electronic payment or transmittal, payment draft, check, or in any communication that the payment is "final" or a "release of claim" unless the third-party payer has paid the benefit plan or contract's limit or the provider or beneficiary has agreed to a compromise settlement.

(3) When a third-party payer administers more than one benefit plan under which a beneficiary may make a claim for benefits and has been notified by the beneficiary or provider that more than one claim may be filed for benefits, the third-party payer shall establish procedures to eliminate duplicate processing procedures and to encourage concurrent processing of the claims.

(4) The third-party payer shall inform the beneficiary or provider with specificity what supporting documentation is required to determine whether additional benefits would be payable.

(E) Coordinated care practices

(1) Every third-party payer with coordinated care provisions in a benefit plan or contract shall:

(a) Fully explain in the policy and certificate the procedures required for compliance with coordinated care provisions, including all penalties for failure to comply with those procedures.

(b) Process claims for any services or procedures which the third-party payer has authorized pursuant to the beneficiary's or provider's compliance with coordinated care procedures subject to non-coordinated care provisions.

(c) Provide the beneficiary or provider with timely written notification of the confirmation or denial of coverage pursuant to coordinated care requirements of the beneficiary's benefit plan or contract. Unless the third-party payer has determined that all claims will be paid in full or denied, the notification shall include the following statement at the top of the notice, in twelve point bold face type, before any other textual information:

This is not an approval for claim payment

Confirmation of (particular coordinated care provision) only

We have not yet reviewed the patient's health care plan. Depending on the limitations of the health care plan, we may pay all, part, or none of the claims.

(F) Reporting insurance fraud

If a third-party payer reasonably believes, based upon information obtained and documented, that a beneficiary or provider has fraudulently caused or contributed to the claim as represented by a properly executed and documented claim form or billing, such information shall be presented to the fraud and enforcement division of the Ohio department of insurance within sixty days of when the fraud becomes evident. Any person making such report shall be afforded such immunity and the information submitted shall be confidential as provided by sections 3901.44 and 3999.31 of the Revised Code.

(G) File and record documentation

Each third-party payer shall maintain complete documentation of every claim for a period of three years. The documentation shall be sufficient to permit complete reconstruction of the third-party payer's activities and communications with respect to each claim. Documentation shall include the date of each activity or communication. All documentation shall be reproducible to paper.

(H) Complaint procedure

Every third-party payer shall:

(1) Establish and maintain a procedure for the expeditious resolution of electronic, written, and oral complaints initiated by beneficiaries and providers.

(2) Include the third party payer's complaint procedure in every benefit plan, contract or certificate.

(3) Keep records of written complaints from and responses to beneficiaries and providers for three years.

(4) Include the following statement or a substantially similar statement on all notification of claim denials:

"If you wish to dispute the company's decision on this claim, you may register a complaint by (insert third-party payer's procedure): (insert address of office). In reviewing your complaint, the company will follow the complaint procedure described in your benefits plan."

(5) Include the following statement on the written notice to the beneficiary and the provider of the company's final adjudication of a complaint:

"If your claim has been denied on the basis that the service is not medically necessary, or you have been diagnosed with a terminal condition and the service has been denied on the basis that it is experimental or investigational, you may have a right to request an independent review by an outside medical practitioner. Submit your request in writing to (insert address of third-party payer).

If your claim has been denied on the basis that it is not a covered service you have the right to file a complaint with the "Ohio Department of Insurance, Consumer Services Division, 50 West Town Street, Third Floor - Suite 300, Columbus, Ohio 43215, (614)-644-2673, toll free in Ohio 1-800-686-1526." Complaints may also be filed via the internet at http://insurance.ohio.gov."

(I) Penalties

The superintendent may impose sanctions according to section 3901.3812 of the Revised Code for violations of paragraph (D)(1) or (D)(4) of this rule. All other violations of this rule are unfair and deceptive practices within the meaning of section 3901.21 of the Revised Code and are subject to the penalties set forth in section 3901.22 of the Revised Code. Any agreement consented to pursuant to division (G) of section 3901.22 of the Revised Code may include the recovery of the costs of the investigation in addition to the penalty so agreed.

(J) Severability

If any paragraph, term, or provision of this rule is adjudged invalid for any reason, the judgment shall not affect, impair, or invalidate any other paragraph, term, or provision of this rule, but the remaining paragraphs, terms, and provisions shall be and continue in full force and effect.

Effective: 06/19/2014
R.C. 119.032 review dates: 04/04/2014 and 08/31/2018
Promulgated Under: 119.03
Statutory Authority: 3901.041 , 3901.20 , 3901.21 , 3901.38 to 3901.3813
Rule Amplifies: 3901.20 , 3901.21 , 3901.22 , 3901.38 to 3901.3813
Prior Effective Dates: 10/1/1994, 10/28/2002, 4/5/2007, 4/30/2010

3901-8-12 Open enrollment.

(A) Purpose The purpose of this rule is to implement the open enrollment statute, sections 3923.58 and 3923.581 of the Revised Code, as recently amended on October 16, 2009, for open enrollment years starting January 1, 2010. This rule requires carriers to provide information to consumers, insurance agents and to the superintendent, pursuant to section 3923.582 of the Revised Code. The open enrollment requirements in this rule apply to any carrier that is in the business of issuing health benefit plans to individuals and/or non-employer groups.

(B) Authority

This rule is promulgated pursuant to the authority stated in sections 3901.041 and 3923.582 of the Revised Code. Pursuant to section 3 of Substitute Senate Bill 9 of the 130th General Assembly, during the period beginning on January 1, 2014, and expiring January 1, 2018, the operation of sections 3923.58 , 3923.581 and 3923.582 , of the Revised Code are suspended. As a result, carriers shall not be required to offer open enrollment coverage under the "Ohio Open Enrollment Program" on or after January 1, 2014. Therefore, during the period beginning on January 1, 2014, and expiring January 1, 2018, the operation of this rule also is suspended. If the amendments made by 42 U.S.C. 300gg-1 and 300gg-6 , regarding the requirements related to health insurance coverage, do not take effect January 1, 2014, or become ineffective prior to the expiration of the suspension of January 1, 2018, then sections 3923.58 , 3923.581 and 3923.582 of the Revised Code and this rule, in either their present form or as they are later amended, again become operational.

(C) Advertisement of open enrollment coverage

Carriers subject to the requirement to provide open enrollment coverage under sections 3923.58 and 3923.581 of the Revised Code shall comply with the following steps by the dates specified.

(1) Each carrier shall provide to the superintendent by November 1, 2009, a toll free number that will be used to accept public inquiries on open enrollment coverage. The carrier shall make this number available to the public, beginning December 1, 2009.

(2) The toll free number will be answered during the carrier's normal business hours.

(3) Each carrier shall develop a web page, by January 1, 2010, providing notice of the availability of the open enrollment coverage being offered pursuant to the terms of this rule. The open enrollment web page must be easily accessible to visitors to the home page of the carrier's web site.

(4) The web page shall include a table of premium rates to enable a consumer to calculate the maximum premium that would be charged to a person of the same age, gender, geographic location and plan selection.

(5) The web page shall be available at all times and kept as current as possible.

(6) A carrier shall inform an applicant that has been denied other health coverage by that carrier of the availability of open enrollment coverage with that carrier.

(7) Each carrier shall make coverage applications available online for consumers or insurance agents to fill out or print and mail to the company. Carriers shall also provide an online contact person who shall answer queries within two business days.

Carriers must notify applicants, or their agents of record, of the acceptance or rejection of their application within five business days of receipt of a completed application. Carriers may adjust the terms of coverage as necessary in the event subsequent receipt of relevant documents requires. If the carrier offers coverage subject to a waiting period under section 3923.581 of the Revised Code, the first day of the waiting period shall be the date of receipt of the completed application. No carrier may require enrollment to be made in person. Carriers may accept applications for coverage online, by phone or by mail. A representative of the carrier may contact an agent or applicant who has submitted an application in order to explain the operations of the carrier and to answer any questions the agent or applicant may have. Every carrier shall make open enrollment applications and solicitation documents readily available to any potential agent or applicant who requests such material.

(8) The following information shall be made available on the carrier's web page:

(a) Open enrollment will begin on January first of each year and will remain open until the carrier has reached its statutory limit;

(b) A clear explanation of "Federally Eligible Individuals" ("FEI") and non-"FEI" individuals including the eligibility requirements for each open enrollment product offered by the carrier; the differences between the "Basic" and "Standard Plan" and any other open enrollment coverage offered. A carrier may use appendix "A" to this rule to satisfy this requirement;

(c) Under what circumstances an eligible applicant or the applicant's dependents may be subject to a preexisting condition limitation;

(d) The address and web site where a person may obtain an application, if different from the open enrollment web site;

(e) The telephone number that a customer may call and hours of operation and an e-mail address in order to request an application or to ask questions;

(f) The date the first payment will be due;

(g) A rate calculator or a page that would allow a consumer to calculate the actual or maximum premium that would be charged to a person of the same age, gender, geographic location and plan selection; if the rate provided is the maximum rate, the web page shall explain in what circumstances the actual rate will vary;

(h) Information regarding the carrier's waiting list, if the carrier maintains one; the process of getting on the waiting list; and the process by which the carrier shall notify applicants of enrollment decisions.

(9) Information regarding open enrollment must be easily accessible to callers of the toll free telephone number. Persons answering the toll free telephone number must be adequately trained and informed about the open enrollment process. In addition to the information required in paragraph (D)(8) of this rule, persons answering the toll free number must be able to answer customer questions and provide the actual rate, or the maximum rate, that will be applicable to the eligible applicant for all open enrollment products offered by the carrier.

(10) No carrier may employ any scheme, plan, or device that restricts the ability of any person to enroll during open enrollment.

(11) The carrier shall electronically certify on a form prescribed by the superintendent if and when it has met the enrollment limit. In addition, the carrier shall provide a status update to the superintendent with regard to any waiting list, if the carrier maintains a waiting list, on the fifth business day of the month for the previous month. The status update must also report when the carrier reopens enrollment in order to maintain its enrollment limit. A carrier that does not maintain a waiting list must explain to the superintendent how it will maintain its enrollment limit as current enrollees drop off.

(12) The superintendent will provide on the department of insurance web site a common access point for open enrollment information. The following information may be included:

(a) Carriers' toll free numbers;

(b) Links to carriers' open enrollment web page;

(c) Whether a carrier's open enrollment program is open or closed;

(d) Other information as the superintendent deems appropriate.

(D) Reporting and data collection requirements for open enrollment

(1) Carriers subject to the requirement to provide open enrollment coverage under sections 3923.58 and 3923.581 of the Revised Code shall provide data to the superintendent as requested.

(2) Carriers are requested to file the data that is enumerated in divisions (C)(1)(a) to (C)(1) (c) and (C)(1)(e) of section 3923.022 of the Revised Code. It should be separately reported for the carrier's non-open enrollment policies and the open enrollment policies. This data should include:

(a) The amount of premiums earned by the carrier both before and after any costs related to the carrier's purchase of reinsurance coverage;

(b) The total amount of claims for losses paid by the carrier both before and after any reimbursement from reinsurance coverage;

(c) The amount of any losses incurred by the carrier but not reported by the carrier in the current or prior year; and

(d) The amount of costs incurred by the carrier for reinsurance coverage.

(3) Carriers are to report this data electronically for calendar year 2009 and every year thereafter. The non-open enrollment policies include coverage sold to individual insureds or enrollees and non-employer group insureds or enrollees in this state. The open enrollment data should be reported separately for "Federally Eligible Individual" policies and non-"Federally Eligible Individual" policies. "Federally Eligible Individual" has the same meaning as in section 3923.581 of the Revised Code.

(4) Carriers shall file this data electronically by April first of each year, starting with April 1, 2010.

(E) Severability

If any paragraph, term or provision of this rule is adjudged invalid for any reason, the judgment shall not affect, impair or invalidate any other paragraph, term or provision of this rule, but the remaining paragraphs, terms and provisions shall be and continue in full force and effect.

Effective: 11/10/2014
Five Year Review (FYR) Dates: 08/26/2014 and 08/26/2019
Promulgated Under: 119.03
Statutory Authority: 3901.041 , 3923.582
Rule Amplifies: 3923.58 , 3923.581
Prior Effective Dates: 10/20/2009 (Emer.), 1/8/2010

3901-8-13 Notice of older age child to age twenty-eight coverage extension.

(A) Authority

This rule is promulgated pursuant to section 3901.041 of the Revised Code to implement sections 1751.14 , 3923.24 , and 3923.241 of the Revised Code concerning extending the age of health coverage for an employee's unmarried child to age twenty-eight.

(B) Purpose

The purpose of this rule is to establish requirements for notice to be given to insurance policy and certificate holders, "HIC" subscribers and public employee benefit plan members of the opportunity for enrolling eligible children up to age twenty-eight under the parent's health coverage.

(C) Notice of older age child enrollment opportunity

A subscriber, insured, or plan member must be given notice and information regarding the opportunity to continue coverage for or enroll an eligible child up to age twenty-eight in the parent's health coverage as described in the above statutes in the following circumstances:

(1) During the employer's annual enrollment period.

For plan or policy years beginning on or after July 1, 2010, if the subscriber, insured or employee has an annual period during which it is permitted to change coverage and add dependents, he or she must receive written notice of the opportunity to enroll older age children at this time. If there is no annual enrollment period, all subscribers, insureds or employees must receive written notice of the opportunity to enroll older age children within thirty days prior to the time that the coverage renews. Notice of the older age coverage opportunity must be provided to all subscribers, insureds or employees receiving coverage under policies or plans that provide dependent coverage subject to the statutes listed above. After September 23, 2010, notice may be provided pursuant to this paragraph (C)(1) of this rule or may be provided pursuant to the federal special enrollment opportunity rules described in paragraph (C)(2) of this rule.

(2) A special enrollment opportunity.

For plan or policy years beginning on or after September 23, 2010, plans and issuers must give children who qualify an opportunity to enroll that continues for at least thirty days regardless of whether the plan or coverage offers an open enrollment period. This enrollment opportunity and a written notice must be provided not later than the first day of the first plan or policy year beginning on or after September 23, 2010. Coverage under special enrollment is effective the first day of the first plan year on or after September 23, 2010.

(3) When the child reaches the limiting age.

For a child currently covered by a parent's contract, policy, or plan, the notice informing the subscriber, insured, or plan member that the child is about to reach the terminating age under the health coverage must inform the subscriber, insured, or plan member about the option to request the extension of coverage. The notice must include the cost, or the steps to follow to obtain the cost information, as well as the steps to take in order to enroll for the extension of coverage. The subscriber, insured, or plan member must be given the option of enrolling the older age child for continuous coverage within the time frames established under the health contract, policy, or plan.

(4) When a child experiences a change in circumstances.

Notice of the opportunity to elect coverage must be provided upon the request of a subscriber, insured or plan member when an older age child experiences a change in circumstances and thereby becomes eligible for extended coverage. A change in circumstances can include moving back to Ohio or the child losing employer-sponsored coverage. Upon receiving the request from the subscriber, insured or plan member, the eligible older age dependent must be offered the opportunity to enroll within thirty days. Coverage must be effective within thirty days of the health insuring corporation, insurer, plan or administrator receiving both the notice of the election and the premium payment

(D) Severability

If any paragraph, subparagraph, term, or provision of this rule be adjudged invalid for any reason, such judgment shall not affect, impair, or invalidate any other paragraph, subparagraph, term, or provision of this rule, but the remaining paragraphs, subparagraphs, terms, and provisions shall be and continue in full force and effect.

R.C. 119.032 review dates: 01/08/2014 and 08/31/2018
Promulgated Under: 119.03
Statutory Authority: 3901.041
Rule Amplifies: 3923.24 , 3923.241 ; 1751.14
Prior Effective Dates: 6/7/2010 (Emer.), 8/26/2010

3901-8-14 Open enrollment for children under nineteen in the individual and non-employer group markets.

(A) Purpose

The purpose of this rule is to establish uniform open enrollment periods during which carriers in the individual health insurance market may offer coverage to children under nineteen years of age on a guaranteed issue basis without any limitations or restrictions based on the health status of the child. For the purpose of this rule, "carrier" has the same meaning as defined in division (D) of section 3924.01 of the Revised Code.

(B) Authority

This rule is promulgated pursuant to the authority vested in the superintendent under sections 3901.041 and 3901.044 of the Revised Code.

(C) Application of this rule to basic and standard coverage sold in the individual market

This rule does not apply to the requirements imposed on carriers or coverage issued pursuant to section 3923.58 or 3923.581 of the Revised Code. For purposes of this rule, the term "non-grandfathered coverage" means coverage offered by a carrier in the individual market to an applicant under the age of nineteen which is not the basic or standard plans offered pursuant to section 3923.58 or 3923.58 1 of the Revised Code.

(D) Qualifying event

Carriers offering non-grandfathered coverage in the individual market to children under age nineteen who become newly eligible as a result of a qualifying event, shall make such coverage available on a guaranteed issue basis, without any limitations or restrictions based on the health status of the child for a period of thirty days following the qualifying event. For purposes of this rule, a qualifying event shall include birth, adoption, marriage or involuntary loss of other coverage for any reason other than fraud, misrepresentation or failure to pay the premium.

(E) Annual open enrollment for new applicants

(1) Beginning March 2011, carriers offering non-grandfathered coverage in the individual market shall hold an annual open enrollment period each March, for the entire month, at which time coverage will be available for new applicants under age nineteen on a guaranteed issue basis, without any limitations or restrictions based on the health status of the child.

(2) Notice of the open enrollment opportunity for new applicants, as well as the opportunity to enroll due to a qualifying event, must be displayed prominently on the carrier's web site throughout the year.

(F) Enrollment opportunity at renewal for children eligible as dependents

(1) With respect to family policies being renewed, carriers must provide non-grandfathered policyholders in the individual market an opportunity to enroll eligible children for guaranteed issue coverage, without limitations or restrictions based on the health status of the child, beginning no later than the first day of the first policy year on or after the effective date of this rule. This enrollment opportunity must continue for at least thirty days and be offered each year at the same time.

(2) Written notice of the annual open enrollment opportunity, as well as the opportunity to enroll due to a qualifying event, must be provided to policyholders in a timely manner and may be included in other enrollment materials distributed to policyholders, provided the statement is prominent.

(3) Coverage under paragraphs (D), (E) and (F) of this rule shall become effective on the first day of the month following the receipt of the completed application, or a date mutually agreed upon by the applicant and the carrier, but no later than forty-five days after the last day of the month of the open enrollment period in which the application was received.

(G) Carriers may guarantee issue coverage to children under nineteen throughout the year

Carriers that issue non-grandfathered coverage in the individual market on a guaranteed issue basis without limitations or restrictions based on the health status of the child throughout the year need not follow the requirements of paragraph (E) of this rule with respect to such coverage. In applying this paragraph, a carrier that chooses to offer non-grandfathered family coverage that includes coverage of dependent children under the age of nineteen throughout the year may also decide to offer child-only policies during the enrollment periods set forth in this rule.

(H) Underwriting practices to remain the same outside of open enrollment

To the extent permitted by federal law, carriers may continue with current underwriting practices in the non-grandfathered individual market with respect to children outside of the open enrollment periods established in this rule.

(I) Notice of withdrawal from the child-only market

(1) With respect to carriers that offer non-grandfathered coverage in the individual market to applicants under the age of nineteen after the effective date of this rule, in order for such a carrier to discontinue offering such coverage to such applicants, the carrier must first deliver written notice to the superintendent at least forty-five days in advance of the date that such discontinuance will occur. The notice shall identify the carrier, state the carrier's intent to discontinue offering such coverage to such applicants, identify the date on which the discontinuance will occur, and include the name, address and telephone number of contact person for the carrier.

(2) Upon receipt of such notice from a carrier, the superintendent shall notify other carriers writing coverage in Ohio's individual market that the superintendent has received such notice.

(3) Notwithstanding paragraph (I)(1) of this rule, if one carrier delivers notice in accordance with paragraph (I)(1) of this rule, another carrier may discontinue offering non-grandfathered coverage in the individual market to applicants under the age of nineteen as of the date of discontinuance for the initial carrier, if such other carrier delivers written notice to the superintendent no more than fifteen days after the superintendent notifies carriers of receipt of the initial notice in accordance with paragraph (I)(2) of this rule. Written notice under this paragraph shall contain the same information as applicable to a notice provided under paragraph (I)(1) of this rule.

(J) Surcharge for lapse in coverage

A carrier writing non-grandfathered coverage in the individual market to applicants under the age of nineteen may apply a surcharge to any applicant with a gap in coverage of more than sixty-three days immediately prior to the applicant's purchase of coverage, provided that the surcharge is reflected in the rates filed with the department and is actuarially justified.

(K) Ensuring enrollment is limited to open enrollment periods

A carrier writing family coverage in the individual market that includes coverage of dependents may cancel coverage for a dependent if the parent subscriber drops coverage and the coverage was purchased subsequent to the last open enrollment period held by the carrier in accordance with this rule. If such coverage for a dependent is cancelled, the carrier must allow the dependent to enroll in any available child-only policy during the next open enrollment period without assessing a surcharge for a lapse in coverage.

(L) Eligibility rules related to other coverage

With respect to non-grandfathered coverage offered in the individual market to applicants under the age of nineteen, carriers may limit enrollment to applicants not covered by or eligible for "Medicaid", the "Children's Health Insurance Program" (CHIP), "Medicare", or an employer-sponsored group health plan unless the applicant is without coverage at the time of enrollment because of an employer-sponsored group plan's mandatory initial waiting period.

(M) Monitoring coverage provided to children in Ohio

The superintendent shall collect information from carriers in Ohio's individual market as to the number of policies sold to applicants under the age of nineteen. This information shall be collected pursuant to the superintendent's authority under section 3901.48 of the Revised Code on an annual basis and shall be made available publicly on an aggregate basis.

(N) Severability

If any paragraph, term, or provision of this rule is adjudged invalid for any reason, the judgment shall not affect, impair, or invalidate any other paragraph, term, or provision of this rule, but the remaining paragraphs, terms, and provisions shall be and continue in full force and effect.

Replaces: 3901-8-14

R.C. 119.032 review dates: 01/08/2014 and 08/31/2018
Promulgated Under: 119.03
Statutory Authority: 3901.041 , 3901.044
Rule Amplifies: 3901.044
Prior Effective Dates: 9/27/2010 (Emer.), 12/26/2010