125 South Webster St – 2nd Floor
Madison WI 53703-3474
Email address:
Julie E. Walsh
The proposed rule changes are:
Section 1.
Ins 3.13 (2) (j) (intro.) Except as provided in s. Ins 3.39 (7) (d), (dm), and (dt), the provision or notice regarding the right to return the policy required by s. 632.73, Stats., shall comply with all of the following: 3. Provide an unrestricted right to return the policy, within 10 days from the date it is received by the policyholder, to the issuer at its home or branch office, if any, or to the agent through whom it was purchased; except it shall provide an unrestricted right to return the policy within 30 days of the date it is received by the policyholder in the case of a Medicare supplement policy subject to s. Ins 3.39 (4), (4s) (4m), (4t), (5), (5m), (5t), and (6), issued pursuant to a direct response solicitation. Provision shall not be made to require the policyholder to set out in writing the reasons for returning the policy, to require the policyholder to first consult with an agent of the issuer regarding the policy, or to limit the reasons for return. Note: Paragraph (j) was adopted to assist in the application of s. 204.31 (2) (a), Stats., to the review of accident and sickness policy and other contract forms. Those statutory requirements are presently included in s. 632.73, Stats. The original statute required that the provision of notice regarding the right to return the policy must be appropriately captioned or titled. Since the important rights given the insured are to examine the policy and to return the policy, the rule requires that the caption or title must refer to at least one of these rights—examine or return. Without such reference, the caption or title is not considered appropriate. The original statute permitted the insured to return the policy for refund to the home office or branch office of the insurer or to the agency with whom it was purchased. In order to assure the refund is made promptly, some insurers prefer to instruct the insured to return the policy to a particular office or agent for a refund. Notices or provisions with such requirements will be approved on the basis that the insurer must recognize an insured’s right to receive a full refund if the policy is returned to any other office or agent mentioned in the statute.
Also, the statute permits the insured to return a policy for refund within 10 days from the date of receipt. Some insurers’ notices or provisions regarding such right, however, refer to delivery to the insured instead of receipt by the insured or do not specifically provide for the running of the 10 days from the date the insured receives the policy. Notices or provisions containing such wording will be approved on the basis that the insurer will not refuse refund if the insured returns the policy within 10 days from the date of receipt of the policy.
Sections 632.73 (2m) and 600.03 (35) (e), as created by Chapter 82, Laws of 1981, provide for the right of return provisions in certain certificates of group Medicare supplement policies. Therefore, for purposes of this subparagraph, the word policy includes a Medicare supplement certificate subject to s. Ins 3.39 (4), (4s) (4m), (4t), (5), (5m), (5t), and (6). Section 2.
Section 3.
(7) (b) The notice required by sub. (6) for a Medicare supplement policy subject to s. Ins 3.39 (4), (4s) (4m), (4t), (5), (5m), (5t), and (7), shall include an introductory statement in substantially the following form: Your new policy provides _______ days within which you may decide without cost whether you desire to keep the policy. Section 4.
Ins 3.39 (1) (a) This section establishes requirements for health and other disability insurance policies primarily sold to Medicare eligible persons. Disclosure provisions are required for other disability policies sold to Medicare eligible person because such policies frequently are represented to, and purchased by, the Medicare eligible as supplements to Medicare products including Medicare Advantage and Medicare Prescription Drug plans.
(b) This section seeks to reduce abuses and confusion associated with the sale of disability insurance to Medicare eligible persons by providing for reasonable standards. The disclosure requirements and established benefit standards are intended to provide to Medicare eligible persons guidelines that they can use to compare disability insurance policies and certificates as described in s. Ins 6.75 (1) (c), and to aid them in the purchase of policies and certificates intended to supplement Medicare and Medicare Advantage plans policies that are suitable for their needs. This section is designed not only to improve the ability of the Medicare eligible consumer to make an informed choice when purchasing disability insurance, but also to assure the Medicare eligible persons of this state that the commissioner will not approve a policy or certificate as “Medicare supplement” or as a “Medicare replacement cost” unless it meets the requirements of this section. SECTION 4. Ins 3.39 (1) (c) is repealed.
SECTION 5. Ins 3.39 (1) (d) is amended to read:
Ins 3.39 (1) (d) Wisconsin statutes interpreted and implemented by this rule are ss. 185.983 (1m), 600.03, 601.01 (2), 601.42, 609.01 (1g) (b), 625.16, 628.34 (12), 628.38, 631.20 (2), 632.73 (2m), 632.76 (2) (b), 632.81, 632.895 (2), (3), (4) and (6) and (9), Stats. SECTION 6. Ins 3.39 (2) (a) (intro.), 1. to 3. are amended to read:
Ins 3.39 (2) (a) Except as provided in pars. (d) and (e), this section applies to any group or individual Medicare supplement policy as defined in s. 600.03 (28r), Stats., or any Medicare replacement cost policy as defined in s. 600.03 (28p) (a) and (c), Stats., including all of the following: 1. Any Medicare supplement policy or Medicare replacement cost policy issued by a voluntary sickness care plan subject to ch. 185, Stats.; 2. Any certificate issued under a group Medicare supplement policy or group Medicare replacement cost policy;.
3. Any individual or group policy sold in Wisconsin predominantly to individuals or groups of individuals who are 65 years of age or older which that offers hospital, medical, surgical, or other disability coverage, except for a policy which that offers solely nursing home, hospital confinement indemnity, or specified disease coverage; and.
SECTION 7. Ins 3.39 (2) (a) 4. is repealed.
SECTION 8. Ins 3.39 (2) (a) 5. and (b) are amended to read:
Ins 3.39 (2) (a) 5. Any individual or group policy or certificate sold in Wisconsin to persons under 65 years of age and eligible for medicare Medicare by reason of disability which that offers hospital, medical, surgical or other disability coverage, except for a policy or certificate which that offers solely nursing home, hospital confinement indemnity or specified disease coverage.
(b) Except as provided in pars. (d) and (e), subs. (9) and (11) apply to any individual disability policy sold to a person eligible for Medicare which that is not a Medicare supplement or a Medicare replacement cost policy as described in par. (a).
SECTION 9. Ins 3.39 (2) (c) (intro.) and 2. are consolidated and renumbered (2) (c) and, as renumbered, are amended to read:
Ins 3.39 (2) (c) Except as provided in par. (e), sub. (10) applies to:
1. Any conversion policy which is offered to a person eligible for Medicare as a replacement for prior individual or group hospital or medical coverage, other than a Medicare supplement or a Medicare cost policy described in par. (a); and
2. Any any individual or group hospital or medical policy which that continues with changed benefits after the insured becomes eligible for Medicare.
SECTION 10. Ins 3.39 (2) (c) 1. is repealed.
SECTION 11. Ins 3.39 (2) (d) (intro.) is amended to read:
Ins 3.39 (2) (d) (intro.) Except as provided in subs. (10) and (13), this section does not apply to any of the following:
SECTION 12. Ins 3.39 (2) (d) 4. is repealed.
SECTION 13. Ins 3.39 (2) (e) (intro.) and 1., are amended to read:
Ins 3.39 (2) (e) (intro.) This section does not apply to either of the following:
1. A policy providing solely accident, dental, vision, disability income, or credit disability income coverage; or.
SECTION 14. Ins 3.39 (3) (c) (intro.) and 1., (ce), and (e) are amended to read:
Ins 3.39 (3) (c) “Applicant" means either of the following:
1. In the case of an individual Medicare supplement or Medicare replacement cost policy, the person who seeks to contract for insurance benefits.
(ce) “Balance bill" means seeking: to bill, charge, or collect a deposit, remuneration or compensation from; to file or threaten to file with a credit reporting agency; or to have any recourse against an enrollee insured or any person acting on the enrollee’s insured’s behalf for health care costs for which the enrollee insured is not liable. The prohibition on recovery does not affect the liability of an enrollee insured for any deductibles, coinsurance or copayments, or for premiums owed under the policy or certificate.
(e) “CMS” means the Centers for Medicare & Medicaid Services within the department of health and human services.
SECTION 15. Ins 3.39 (3) (gm), (jm), and (pm) are created to read:
Ins 3.39 (3) (gm) “Complaint" means any dissatisfaction expressed by an individual concerning a Medicare select issuer or its network providers.
(jm) “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.
(pm) “MACRA” means the Medicare Access and CHIP Reauthorization Act of 2015, PL 114-10, signed April 16, 2015. SECTION 16. Ins 3.39 (3) (r) (intro.) is renumbered (3) (r) and amended to read:
Ins 3.39 (3) (r) “Medicare Advantage plan" means a plan of coverage for health benefits under Medicare Part C as defined in 42 USC 1395w-28 (b) (1), as amended, and includes any of the following:. SECTION 17. Ins 3.39 (3) (r) 1. to 3. are repealed.
SECTION 18. Ins 3.39 (3) (v) is amended to read:
Ins 3.39 (3) (v) “Medicare replacement coverage" means coverage that meets the definition in s. 600.03 (28p), Stats., as interpreted by sub. (2) (a), and that conforms to subs. (4), (4m), (4s) (4t), and (7) “Medicare replacement coverage" includes Medicare cost and Medicare Advantage plans policies. SECTION 19. Ins 3.39 (3) (ve), (vm), and (vs) are created to read:
Ins 3.39 (3) (ve) “Medicare cost policy” means insurance that is offered by an issuer that has a contract with CMS to provide coverage when services are provided within the issuer’s geographic service area and through network medical providers selected by the issuer that is issued to as an individual policy.
(vm) “Medicare select certificate" means a Medicare supplement policy that provides coverage when services are obtained through network medical providers selected by the issuer that is issued to a group and individuals in the group receive a certificate.
(vs) “Medicare select policy" means a Medicare supplement policy that provides coverage when services are obtained through network medical providers selected by the issuer that is issued to an individual as a policy.
SECTION 20. Ins 3.39 (3) (w) is amended to read:
Ins 3.39 (3) (w) “Medicare supplement coverage" means coverage that meets the definition in s. 600.03 (28r), Stats., as interpreted by sub. (2) (a), and that conforms to subs. (4), (4m), (4s)(4t), (5), (5m), (5t), (6), (30), and (30m), and (30t). “Medicare supplement coverage" includes Medicare supplement and Medicare select plans policies but does not include coverage under Medicare Advantage plans established under Medicare Part C or Outpatient Prescription Drug plans established under Medicare Part D. SECTION 21. Ins 3.39 (3) (wg), and (wr) are created to read:
Ins 3.39 (3) (wg) “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 or certificate.
(wr) “Newly eligible” means a Medicare eligible person who attains age 65 on or after January 1, 2020, who has not participated in Medicare Part B prior to attaining age 65, or by reason of entitlement to benefits under part A pursuant to Section 226(b) or 226A of the Social Security Act, or who is deemed to be eligible for benefits under Section 226(a) of the Social Security Act on or after January 1, 2020.
SECTION 22. Ins 3.39 (3) (zb) is amended to read:
Ins 3.39 (3) (zb) “Replacement” means any transaction, other than when used to refer to an authorized Medicare Advantage policy, wherein where new Medicare supplement or Medicare cost insurance is to be purchased, and it is known to the agent or issuer at the time of application that, as part of the transaction, existing accident and sickness insurance has been or is to be lapsed, cancelled or terminated or the benefits thereof are substantially reduced. “Replacement” includes transactions replacing a Medicare supplemental policy within the same insurer or affiliates of the insurer.
SECTION 23. Ins 3.39 (3) (zbm), (zcm), (zf) and (3g) are created to read:
Ins 3.39 (3) (zbm) “Restricted network provision," means any provision that conditions the payment of benefits, in whole or in part, on the use of network providers.
(zcm) “Service area" means the geographic area approved by the commissioner within which an issuer is authorized to offer a Medicare select policy or certificate.
(zf) “Type” means, when used in reference to a plan, certificate or policy, is a Medicare supplement individual policy and group certificate, a Medicare cost individual policy, and a Medicare select individual policy and group certificate.
(3g) Medicare eligible person. (a) Generally, an individual who attains age 65 or older, an individual under the age of 65 with certain disabilities, or an individual with end-stage renal disease is eligible to enroll in Medicare. The date a person is first eligible for Medicare Part B or first elected Medicare Part A establishes the benefits available regardless of the date of election provided the benefit is offered in the market. In addition to the provisions that apply to all Medicare supplement and Medicare cost policies, the following identify the benefits and coverage subsections that have provisions tied to the date and year when a person is first eligible for Medicare Parts A and B:
1. For persons first eligible for Medicare Part A and B before June 1, 2010, subs. (4), (5), (7) (a), and (30) describe benefits and coverage available as contained in Appendix 1, and are applicable in addition to any provision in this section that generally pertains to Medicare eligible persons.
2. For persons first eligible for Medicare Part A and B on or after June 1, 2010 and prior to January 1, 2020, subs. (4m), (5m), (7) (dm), (14m), and (30m) describe benefits and coverage available as contained in Appendices 2m, 3m, 4m, 5m and 6m and are applicable in addition to any provision in this section that generally pertains to Medicare eligible persons.
3. For persons first eligible for Medicare Part A and B on or after January 1, 2020, MACRA designated Medicare eligible persons as “newly eligible” to distinguish from person eligible prior to January 1, 2020. For these newly eligible persons, subs. (4t), (5t), (7) (dt), (14t), and (30t) describe benefits and coverage available as contained in Appendices 2t, 3t, 4t, 5t, and 6t and are applicable in addition to any provision in this section that generally pertains to Medicare eligible persons.
(b) Medicare supplement and Medicare select policies are guaranteed renewable for life. Therefore, a Medicare eligible person can, at his or her choice, elect to receive benefits and coverage under a policy that may have fewer riders available. An insurer cannot require the Medicare eligible person to replace existing coverage with coverage reflecting recent changes, including changes due to MACRA. This means that if a Medicare eligible person who is eligible for Medicare prior to January 1, 2020, and elects the Medicare Part B medical deductible rider prior to January 1, 2020, upon renewal of the policy that person shall be eligible to continue to receive benefits from the Medicare Part B medical deductible rider in accordance with the terms of the policy even though the insurer can no longer actively market that rider.
SECTION 24. Ins 3.39 (4) (title) and (intro.), (a) (intro.) 1. to 7., 9. to 12., and 16. are amended to read:
Ins 3.39 (4) (title) Medicare supplement and Medicare replacement cost policy and certificate requirements for policies and certificates with effective dates prior to June 1, 2010. Except as explicitly allowed by subs. (5), (7), and (30), no disability insurance policy or certificate shall relate its coverage to Medicare or be structured, advertised, solicited, delivered or issued for delivery in this state after December 31, 1990, for policies or certificates with effective dates prior to June 1, 2010, as a Medicare supplement policy or certificate or as a Medicare replacement cost policy or certificate, as defined in s. 600.03 (28p) (a) and (c), Stats., unless it the policy or certificate complies, as applicable, with all of the following : (a) The policy or certificate complies with all of the following requirements:
1. Provides only the coverage set out in sub. (5), (7), or (30) and applicable statutes and contains no exclusions or limitations other than those permitted by sub. (8). No issuer may issue a Medicare cost policy or Medicare select policy or certificate without prior approval from the commissioner and compliance with subs. (7) and (30), respectively.
2. Discloses on the first page any applicable pre-existing preexisting conditions limitation, contains no pre-existing preexisting condition waiting period longer than 6 months and shall does not define a pre-existing preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within 6 months before the effective date of coverage.
3. Contains no definitions of terms such as “Medicare eligible expenses.” “accident,” “sickness,” “mental or nervous disorders,” “skilled nursing facility,” “hospital,” “nurse,” “physician,” “Medicare approved expenses,” “benefit period,” “convalescent nursing home,” or “outpatient prescription drugs” that are worded less favorably to the insured person than the corresponding Medicare definition or the definitions contained in sub. (3), and defines “Medicare” as in accordance with sub. (3) (q).
4. Does not indemnify against losses resulting from sickness on a different basis from losses resulting from accident;.
5. Is “guaranteed renewable" and does not provide for termination of coverage of a spouse solely because of an event specified for termination of coverage of the insured, other than the nonpayment of premium. The policy shall not be cancelled or nonrenewed by the insurer on the grounds of deterioration of health. The policy may be cancelled only for nonpayment of premium or material misrepresentation. If the policy is issued by a health maintenance organization as defined by s. 609.01 (2), Stats., the policy may, in addition to the above reasons, be cancelled or nonrenewed by the issuer if the insured moves out of the service area;. 6. Provides that termination of a Medicare supplement policy or certificate or Medicare cost policy or certificate shall be without prejudice to a continuous loss that commenced while the policy or certificate was in force, although the extension of benefits may be predicated upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits. Receipt of Medicare Part D benefits shall not be considered in determining a continuous loss.
