ORDER
Regulation 41, Medicare Supplement Insurance Minimum Standards
On January 1, 1992, the Department of Insurance promulgated Regulation 41 relating to Medicare Supplement Insurance Minimum Standards. That regulation has been amended four times in the intervening years. On December 21, 2000, Congress enacted the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (“BIPA”). That legislation directly affected state Medicare supplement insurance (Medigap) rules and regulations. As a result, the National Association of Insurance Commissioners (“NAIC”) Medicare Supplement Working Group reviewed the law and recommended changes to the NAIC model regulation (which forms the basis for Regulation 41) to comply with the changes contained in BIPA. Because BIPA required issuers of Medicare Supplement Insurance to comply with the new federal changes, the individual states were required to make those necessary changes to their existing regulatory programs to reflect those new provisions. Accordingly, the purpose of this order is to amend Regulation 41 to bring it into compliance with existing federal law.
Summary Of The Evidence And Information Submitted
Under the provisions 29 Del. C. § 10113 (b) (4) and (5) and 18 Del. C. § 311, I have concluded that the changes proposed in amended Regulation 41, the black lined copy of which is attached as Exhibit “A” and a clean final copy of which is attached as Exhibit “B,” can be adopted without the necessity of a public hearing since the proposed changes reflect non-substantive style and form changes and textual amendments to conform the regulation to existing law but which do not otherwise alter the substance of the regulation.
Findings Of Fact
Under BIPA, the states are required to amend the guaranteed issue provisions of their capital Medigap rules or regulations to bring them into compliance with the changes in federal law. There are eight (8) major changes that can be summarized as follows:
1. Under circumstances where an employee welfare benefit plan terminates or ceases to provide benefits that supplement Medicare, the amendments to the regulation clarify the triggering event and the viable time periods in which to notify a beneficiary of the termination or cessation of benefits.
2. The amendments establish guaranteed issue periods and provide that a beneficiary has a continuous issue period from the receipt of notice until sixty-three (63) days after the effective date of disenrollment from the Medicare+Choice Organization, a Medicare Cost HMO, a demonstration project, a Health Care Prepayment Plan or Medicare Select Plan.
3. The amendments establish guaranteed issue periods for persons who are sixty-five (65) years of age and enrolled in a PACE provider when there is a voluntary disenrollment.
4. Guaranteed issue is provided for eligible beneficiaries who lose coverage because of a substantial violation or material representation by a Medicare+Choice Organization, a Medicare Cost HMO, a demonstration project, a Health Care Prepayment Plan or Medicare Select Plan.
5. Guaranteed periods are provided for eligible beneficiaries enrolled in a Medigap policy when the issuer becomes bankrupt or insolvent.
6. A guaranteed issue period is provided for eligible beneficiaries enrolled in a Medigap policy where the issuer substantially violates a material provision or materially misrepresents the provisions of the coverage period.
7. A beneficiary who is involuntarily terminated and enrolls in a second similar organization without any intervening coverage is provided guaranteed coverage within two years of the date in which the beneficiary enrolls with the first such organization or provider. Secondly, if the beneficiary is involuntarily terminated the guaranteed issue period begins sixty days prior to the effective date of disenrollment and ends sixty-three days after termination.
8. BIPA makes provisions similar to those identified in paragraph 6 above for persons who first become sixty-five (65) years of age and enroll in a Medicare Part B program.
From the time Regulation 41 was first enacted through this current amendment, the Department of Insurance had been using an alpha numeric numbering system to delineate the various sections of the regulation. All of the paragraphs in the proposed amendment adopted hereby are renumbered to conform to the numbering system approved by Registrar of Regulations. Such numbering does not affect or alter the substance of the regulation. Similarly text references to specifically identify portions of the regulation are changed to reflect the revised numbering system.
I find that the changes described above affect the wording primarily in Sections 8 and 12 but do not materially or substantively alter the provisions of Regulation 41. I further find that without adopting the proposed amendments to Regulation 41, Delaware’s Regulations would not be in compliance with applicable federal law that governs Medicare supplement coverage.
Decision And Effective Date
I hereby adopt Regulation 41as modified by the changes herein to be effective on September 15,2002.
Text And Citation
Since a public hearing is not required for the adoption of non-substantive technical changes that conform the regulation to existing law but which do not otherwise alter the substance of the regulation, there is no preexisting text or citation for purposes of reference. The final text of the proposed amendments to Regulation 41 are designated to appear in the Register of Regulations, Volume 6, Issue 3, for publication on September 1, 2002.
Donna Lee H. Williams, Insurance Commissioner
August 15, 2002
* Please Note: Due to the length of the Final Insurance Regulation the full-text is not being printed. Full-text copies of the regulation are available from the Registrar or may be viewed on the Register of Regulation website.
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