Chapter Ins 3

Ins 3.39(14m)(c)4. 4. Furnishing, at the time of enrollment, each insured with a card listing the policy or certificate name, number and a central mailing address to which notices from a Medicare issuer may be sent.

Ins 3.39(14m)(c)5. 5. Paying user fees for claim notices that are transmitted electronically or otherwise.

Ins 3.39(14m)(c)6. 6. Providing to the secretary, at least annually, a central mailing address to which all claims may be sent by Medicare issuers.

Ins 3.39(14m)(c)7. 7. Certifying compliance with the requirements set forth in this subsection on the Medicare supplement insurance experience reporting form.

Ins 3.39(14m)(d) (d)

Ins 3.39(14m)(d)1. 1. Except as provided in subd. 2., an issuer shall continue to make available for purchase any policy or certificate form issued to persons first eligible for Medicare after May 31, 2010, and prior to January 1, 2020, that has been approved by the commissioner. A policy or certificate form shall not be considered to be available for purchase unless the issuer has actively offered it for sale in the previous 12 months.

Ins 3.39(14m)(d)2. 2. An issuer may discontinue the availability of a policy form or certificate form if the issuer provides to the commissioner in writing its decision at least 30 days prior to discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the commissioner, the issuer shall no longer offer for sale the policy form or certificate form in this state.

Ins 3.39(14m)(d)3. 3. An issuer that discontinues the availability of a policy or certificate form pursuant to subd. 2., shall not file for approval a new policy form or certificate form of the same type, as defined at sub. (3) (zar), as the discontinued form for a period of 5 years after the issuer provides notice to the commissioner of the discontinuance. The period of discontinuance may be reduced if the commissioner determines that a shorter period is appropriate.

Ins 3.39(14m)(d)4. 4. This subsection shall not apply to the riders permitted in sub. (5m) (e).

Ins 3.39(14m)(e) (e) The sale or other transfer of Medicare supplement business to another issuer shall be considered a discontinuance for the purposes of this subsection.

Ins 3.39(14m)(f) (f) A change in the rating structure or methodology shall be considered a discontinuance under par. (d) 1. unless the issuer complies with the following requirements:

Ins 3.39(14m)(f)1. 1. The issuer provides an actuarial memorandum, in a form and manner prescribed by the commissioner, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and resultant rates.

Ins 3.39(14m)(f)2. 2. 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 commissioner may approve a change to the differential that is in the public interest.

Ins 3.39(14m)(g) (g) Except as provided in par. (h) 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 sub. (31).

Ins 3.39(14m)(h) (h) 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.

Ins 3.39(14m)(i) (i) No issuer may issue a Medicare supplement policy or certificate, a Medicare select policy or certificate, or a Medicare cost policy to an applicant 75 years of age or older, unless the applicant is subject to sub. (3r) or, prior to issuing coverage, the issuer either agrees not to rescind or void the policy or certificate except for intentional fraud in the application, or obtains one of the following:

Ins 3.39(14m)(i)1. 1. A copy of a physical examination.

Ins 3.39(14m)(i)2. 2. An assessment of functional capacity.

Ins 3.39(14m)(i)3. 3. An attending physician’s statement.

Ins 3.39(14m)(i)4. 4. Copies of medical records.

Ins 3.39(14m)(j) (j) Notwithstanding par. (a), an issuer may file and use only one individual Medicare select policy or certificate form and one group Medicare select policy or certificate form. These policy or certificate forms shall not be aggregated with non-Medicare select forms in calculating premium rates, loss ratios and premium refunds.

Ins 3.39(14m)(k) (k) If an issuer nonrenews an insured who has a nonguaranteed renewable Medicare supplement policy or certificate with the issuer, the issuer shall, at the time any notice of nonrenewal is sent to the insured, offer a currently available individual replacement Medicare supplement policy or certificate and those currently available riders resulting in coverage substantially similar to coverage provided by the replaced policy or certificate without underwriting. This replacement shall comply with sub. (27).

Ins 3.39(14m)(L) (L) For policies or certificates issued with an effective date on or after June 1, 2010, issuers shall combine the Wisconsin experience of all policy or certificate forms of the same type (individual or group) for the purposes of calculating the loss ratio under sub. (16) (c) and rates. The rates for all such policies or certificates of the same type shall be adjusted by the same percentage. If the Wisconsin experience is not credible, then national experience can be considered.

Ins 3.39(14m)(m) (m) If Medicare determines the eligibility of a covered service, then the issuer shall use Medicare’s determination in processing claims.

Ins 3.39(14t) (14t) Other requirements for Medicare supplement policies or certificates, Medicare select policies or certificates, or Medicare cost policies to persons newly eligible for Medicare on or after January 1, 2020.

Ins 3.39(14t)(a) (a) Each issuer issuing policies or certificates to persons newly eligible for Medicare on or after January 1, 2020, may file and utilize only one individual Medicare supplement policy form, one individual Medicare select policy form, one individual Medicare cost policy form, one group Medicare select certificate form, and one group Medicare supplement certificate form with any of the accompanying riders permitted in sub. (5t) (e), unless the commissioner approves the use of additional forms and the issuer agrees to aggregate experience for the various forms in calculating rates and loss ratios.

Ins 3.39(14t)(b) (b) An issuer shall mail any refund or return of premium directly to the insured and may not require or permit delivery by an agent or other representative.

Ins 3.39(14t)(c) (c) An issuer shall comply with section 1882 (c) (3) of the social security act, 42 USC 1395ss, by complying with all of the following:

Ins 3.39(14t)(c)1. 1. Accepting a notice from a Medicare issuer 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.

Ins 3.39(14t)(c)2. 2. Notifying the participating physician or supplier and the beneficiary of the payment determination.

Ins 3.39(14t)(c)3. 3. Paying the participating physician or supplier directly.

Ins 3.39(14t)(c)4. 4. Furnishing, at the time of enrollment, each insured with a card listing the policy or certificate name, number and a central mailing address to which notices from a Medicare issuer may be sent.

Ins 3.39(14t)(c)5. 5. Paying user fees for claim notices that are transmitted electronically or otherwise.

Ins 3.39(14t)(c)6. 6. Providing to the secretary, at least annually, a central mailing address to which all claims may be sent by Medicare issuers.

Ins 3.39(14t)(c)7. 7. Certifying compliance with the requirements set forth in this subsection on the Medicare supplement insurance experience reporting form.

Ins 3.39(14t)(d) (d)

Ins 3.39(14t)(d)1. 1. Except as provided in subd. 2., an issuer shall continue to make available for purchase any policy or certificate form issued after December 31, 2019, that has been approved by the commissioner. A policy or certificate form shall not be considered to be available for purchase unless the issuer has actively offered it for sale in the previous 12 months.

Ins 3.39(14t)(d)2. 2. An issuer may discontinue the availability of a policy or certificate form if the issuer provides to the commissioner in writing its decision at least 30 days prior to discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the commissioner, the issuer shall no longer offer for sale the policy or certificate form in this state.

Ins 3.39(14t)(d)3. 3. An issuer that discontinues the availability of a policy or certificate form pursuant to subd. 2., shall not file for approval a new policy or certificate form of the same type, as defined at sub. (3) (zar), as the discontinued form for a period of 5 years after the issuer provides notice to the commissioner of the discontinuance. The period of discontinuance may be reduced if the commissioner determines that a shorter period is appropriate.

Ins 3.39(14t)(d)4. 4. This subsection shall not apply to the riders permitted in sub. (5t) (e).

Ins 3.39(14t)(e) (e) The sale or other transfer of Medicare supplement business to another issuer shall be considered a discontinuance for the purposes of this subsection.

Ins 3.39(14t)(f) (f) A change in the rating structure or methodology shall be considered a discontinuance under par. (d) 1., unless the issuer complies with the following requirements:

Ins 3.39(14t)(f)1. 1. The issuer provides an actuarial memorandum, in a form and manner prescribed by the commissioner, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and resultant rates.

Ins 3.39(14t)(f)2. 2. 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 commissioner may approve a change to the differential that is in the public interest.

Ins 3.39(14t)(g) (g) Except as provided in par. (h), the experience of all policy or certificate forms of the same type, as defined in sub. (3) (zar), in a standard Medicare supplement benefit plan shall be combined for purposes of the refund or credit calculation prescribed in sub. (31).

Ins 3.39(14t)(h) (h) 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.

Ins 3.39(14t)(i) (i) No issuer may issue a Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy to an applicant 75 years of age or older, unless the applicant is subject to sub. (3r) or, prior to issuing coverage, the issuer either agrees not to rescind or void the policy or certificate except for intentional fraud in the application, or obtains one of the following:

Ins 3.39(14t)(i)1. 1. A copy of a physical examination.

Ins 3.39(14t)(i)2. 2. An assessment of functional capacity.

Ins 3.39(14t)(i)3. 3. An attending physician’s statement.

Ins 3.39(14t)(i)4. 4. Copies of medical records.

Ins 3.39(14t)(j) (j) Notwithstanding par. (a), an issuer may file and use only one individual Medicare select policy form and one group Medicare select certificate form. These policy or certificate forms shall not be aggregated with non-Medicare select forms in calculating premium rates, loss ratios and premium refunds.

Ins 3.39(14t)(k) (k) If an issuer nonrenews an insured who has a nonguaranteed renewable Medicare supplement policy or certificate with the issuer, the issuer shall at the time any notice of nonrenewal is sent to the insured, offer a currently available individual replacement Medicare supplement policy or certificate and those currently available riders resulting in coverage substantially similar to coverage provided by the replaced policy or certificate without underwriting. This replacement shall comply with sub. (27).

Ins 3.39(14t)(L) (L) For policies or certificates issued to persons newly eligible for Medicare on or after January 1, 2020, issuers shall combine the Wisconsin experience of all policy or certificate forms of the same type, as defined at sub. (3) (zar), for the purpose of calculating the loss ratio under sub. (16) (d), and rates. The rates for all policies or certificates of the same type shall be adjusted by the same percentage. If the Wisconsin experience is not credible, then national experience can be considered.

Ins 3.39(14t)(m) (m) If Medicare determines the eligibility of a covered service, then the issuer shall use Medicare’s determination in processing claims.

Ins 3.39(15) (15) Filing requirements for advertising. Prior to use in this state, every issuer shall file with the commissioner a copy of any advertisement used in connection with the sale of Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policies issued with an effective date after December 31, 1989. If the advertisement does not reference a particular issuer or Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy, each agent utilizing the advertisement shall file the advertisement with the commissioner in the manner compliant with the commissioner’s instructions. The advertisements shall comply with all applicable laws and rules of this state, including s. Ins 3.27 (9).

Ins 3.39(16) (16) Loss ratio requirements and rates for existing policies.

Ins 3.39(16)(a) (a) Every issuer providing Medicare supplement or Medicare select coverage on a group or individual basis on policies or certificates in this state shall file annually its rates, rating schedule and supporting documentation including ratios of incurred losses or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis to earned premiums by policy duration for approval by the commissioner in accordance with the filing requirements and procedures prescribed by the commissioner. All filings of rates and rating schedules shall demonstrate that expected claims in relation to premiums comply with the requirements of par. (d) 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.

Ins 3.39(16)(b) (b) The supporting documentation shall also demonstrate in accordance with the 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 3rd year loss ratio which is greater than or equal to the applicable percentage shall be demonstrated for policies or certificates in force less than 3 years.

Ins 3.39(16)(c) (c) As soon as practicable, but prior to the effective date of enhancements in Medicare benefits, every issuer providing Medicare supplement or Medicare select policies or certificates in this state shall file with the commissioner in accordance with the applicable filing procedures of this state appropriate premium adjustments necessary to produce loss ratios as originally anticipated for the current premium for the applicable policies or certificates. Supporting documents as necessary to justify the adjustment shall accompany the filing.

Ins 3.39(16)(c)1. 1. Every issuer shall make such premium adjustments as are necessary to produce an expected loss ratio under such policy or certificate as will conform with minimum loss ratio standards for Medicare supplement or Medicare cost 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 such Medicare supplement or Medicare cost insurance policies or certificates. No premium adjustment 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.

Ins 3.39(16)(c)2. 2. If an issuer fails to make premium adjustments acceptable to the commissioner, the commissioner may order premium adjustments, refunds or premium credits deemed necessary to achieve the loss ratio required by this subsection.

Ins 3.39(16)(c)3. 3. An issuer shall file any appropriate riders, endorsements or policy forms needed to accomplish the Medicare supplement or Medicare cost policy or certificate modifications necessary to eliminate benefit duplications with Medicare. Such riders, endorsements or policy forms shall provide a clear description of the Medicare supplement or Medicare cost benefits provided by the policy or certificate.

Ins 3.39(16)(d) (d) For purposes of subs. (4) (e), (4m) (e), (4t) (e), (14) (L), (14m) (L), (14t) (L) and this subsection, the loss ratio standards shall be:

Ins 3.39(16)(d)1. 1. At least 65% in the case of individual policies;

Ins 3.39(16)(d)2. 2. At least 75% in the case of group policies, and

Ins 3.39(16)(d)3. 3. For existing policies subject to this subsection, the loss ratio shall be calculated on the basis of incurred claims experience or incurred health care expenses where coverage is provided by a health maintenance organization 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 when coverage is provided by a health maintenance organization may not include any of the following:

Ins 3.39(16)(d)3.a. a. Home office and overhead costs.

Ins 3.39(16)(d)3.b. b. Advertising costs.

Ins 3.39(16)(d)3.c. c. Commissions and other acquisition costs.

Ins 3.39(16)(d)3.d. d. Taxes.

Ins 3.39(16)(d)3.e. e. Capital costs.

Ins 3.39(16)(d)3.f. f. Administrative costs.

Ins 3.39(16)(d)3.g. g. Claims processing costs.

Ins 3.39(16)(e) (e) An issuer may not use or change any premium rates for an individual or group Medicare supplement policy or certificate unless the rates, rating schedule, and supporting documentation have been filed with and not disapproved by the commissioner in accordance with the filing requirements and procedures prescribed by the commissioner and in accordance with subs. (4) (g), (4m) (f), and (4t) (f) as applicable.

Ins 3.39(17) (17) New or Innovative Benefits. An issuer may 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 and is filed and approved by the commissioner. The new or innovative benefits may include only benefits that are appropriate to Medicare supplement insurance, are new or innovative, are not otherwise available and are cost-effective. New or innovative benefits may not include an outpatient prescription drug benefit. New or innovative benefits may not be used to change or reduce benefits, including a change of any cost-sharing provision. Approval of new or innovative benefits must not adversely impact the goal of Medicare supplement simplification.

Ins 3.39(18) (18) Electronic enrollment.

Ins 3.39(18)(a) (a) Any requirement that a signature of an insured be obtained by an agent or issuer offering any Medicare supplement or replacement plans shall be satisfied if all of the following are met:

Ins 3.39(18)(a)1. 1. The consent of the insured is obtained by telephonic or electronic enrollment by the issuer or group policyholder or certificateholder. A verification of the enrollment information shall be provided in writing to the applicant with the delivery of the policy or certificate.

Ins 3.39(18)(a)2. 2. The telephonic or electronic enrollment provides necessary and reasonable safeguards to ensure the accuracy, retention and prompt retrieval of records as required pursuant to ch. 137, subch. II, Stats.

Ins 3.39(18)(a)3. 3. The telephonic or electronic enrollment provides necessary and reasonable safeguards to ensure that the confidentiality of personal financial and health information as defined in s. 610.70, Stats., and ch. Ins 25 is maintained.

Ins 3.39(18)(b) (b) The issuer shall make available, upon request of the commissioner, records that demonstrate the issuer’s ability to confirm enrollment and coverage.

Ins 3.39(21) (21) Commission limitations.

Ins 3.39(21)(a) (a) An issuer may provide and an agent or other representative may accept commission or other compensation for the sale of a Medicare supplement policy or certificate, or Medicare select policy or certificate only if the first year commission or other first year compensation is no more than 200% of the commission or other compensation paid for selling or servicing the policy or certificate in the 2nd year.

Ins 3.39(21)(b) (b) The commission or other compensation provided in subsequent renewal years shall be the same as that provided in the 2nd year or period and shall be provided for at least 5 renewal years.

Ins 3.39(21)(c) (c) If an existing policy or certificate is replaced, no entity may provide compensation to its producers and no agent or producer may receive compensation greater than the renewal compensation payable by the replacing issuer on the policy or certificate.

Ins 3.39(21)(d) (d) For purposes of this section, “compensation” includes pecuniary or nonpecuniary remuneration of any kind relating to the sale or renewal of the policy or certificate including but not limited to bonuses, gifts, prizes, awards, finder’s fees, and policy fees.

Ins 3.39(21)(e) (e) No issuer may provide an agent or other representative commission or compensation for the sale of a Medicare supplement or Medicare cost policy or certificate to an individual who is under age 66 which is either calculated on a different basis or is less than the average of the commissions paid for the sale of a Medicare supplement or Medicare cost policy or certificate to an individual who is age 65 to age 69.

Ins 3.39(21)(f) (f) No issuer may provide an agent or other representative commission or compensation for the sale of any other Medicare supplement policy or certificate, or Medicare select policy or certificate to an individual who is eligible for guaranteed issue under sub. (34), calculated on a different basis of the commissions paid for the sale of a Medicare supplement policy or certificate, or Medicare select policy or certificate to an individual who is eligible for open enrollment under sub. (3r).