Chapter Ins 3

Ins 3.39(3)(s) (s) “Medicare eligible expenses” means health care expenses that are covered by Medicare Parts A and B, recognized as medically necessary and reasonable by Medicare, and that may or may not be fully reimbursed by Medicare.

Ins 3.39(3)(t) (t) “Medicare eligible person” mean a person who qualifies for Medicare.

Ins 3.39(3)(v) (v) “Medicare replacement policy” or “Medicare replacement insurance policy” means a policy that is described in s. 600.03 (28p) (a) or (c), Stats., as interpreted by sub. (2) (a), and that provides coverage that conforms to subs. (4), (4m), (4t), and (7). “Medicare replacement policy” includes Medicare cost policies.

Ins 3.39(3)(ve) (ve) “Medicare select certificate” means a policy that is issued to a group that provides Medicare supplement coverage to the group’s members when services are obtained through network medical providers selected by the issuer. Individuals that receive coverage through the group Medicare select policy receive a Medicare select certificate that demonstrates participation in the group coverage.

Ins 3.39(3)(vm) (vm) “Medicare select policy” means a policy that is issued to an individual or policyholder that provides Medicare supplement coverage when services are obtained by the policyholder through a network of medical providers selected by the issuer.

Ins 3.39(3)(vs) (vs) “Medicare supplement certificate” means a policy that is issued to a group that provides Medicare supplement coverage to the group’s members. Individuals that receive coverage through the group Medicare supplement policy receive a Medicare supplement certificate that demonstrates participation in the group coverage.

Ins 3.39(3)(w) (w) “Medicare supplement coverage” or “Medicare supplement insurance” 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), (4t), (5), (5m), (5t), (6), (30), (30m), and (30t). “Medicare supplement coverage” is advertised, marketed or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical or surgical expense of persons eligible for Medicare. “Medicare supplement coverage” includes group and individual Medicare supplement and group and individual Medicare select policies and certificates but does not include coverage under Medicare Advantage plans established under Medicare Part C or Outpatient Prescription Drug plans established under Medicare Part D.

Ins 3.39(3)(we) (we) “Medicare supplement policy” means a policy that is issued to an individual or policyholder that provides Medicare supplement coverage.

Ins 3.39(3)(wg) (wg) “MMA” means the Medicare Prescription Drugs, Improvement and Modernization Act of 2003, Public Law 108-173, signed into law on December 8, 2003.

Ins 3.39(3)(wm) (wm) “Network provider,” means a provider of health care, or a group of providers of health care, that have entered into a written agreement with the issuer to provide health care benefits to an insured under a Medicare select policy or Medicare select certificate.

Ins 3.39(3)(ws) (ws) “Newly eligible” means a person who meets one of the following criteria:

Ins 3.39(3)(ws)1. 1. The person has attained age 65 on or after January 1, 2020.

Ins 3.39(3)(ws)2. 2. The person is entitled to benefits under Medicare Part A pursuant to section 226 (b) or 226A of the social security act, or is deemed to be eligible for benefits under section 226 (a) of the social security act on or after January 1, 2020.

Ins 3.39(3)(x) (x) “Nursing home coverage” means coverage for care that is convalescent or custodial care or care for a chronic condition or terminal illness and provided in an institutional or community-based setting.

Ins 3.39(3)(y) (y) “Outline of coverage” means a printed statement as defined by s. Ins 3.27 (5) (L), that meets the requirements of sub. (4) (b), (4m) (b), or (4t) (b), as applicable.

Ins 3.39(3)(z) (z) “Policy form” means the form on which the policy is delivered or issued for delivery by the issuer.

Ins 3.39(3)(za) (za) “PACE” means Program of All–Inclusive Care for the Elderly (PACE) under section 1894 of the social security act 42 USC 1302 and 1395.

Ins 3.39(3)(zag) (zag) “Policyholder” has the meaning provided at s. 600.03 (37), Stat.

Ins 3.39(3)(zar) (zar) “Policy or certificate forms of the same type” means, for purposes of calculating loss ratios, rates, refunds or premium credits, each type of form filed with the commissioner including individual Medicare supplement policy forms, individual Medicare select policy forms, individual Medicare cost policy forms, group Medicare select certificate forms, and group Medicare supplement certificate forms.

Ins 3.39(3)(zb) (zb) “Replacement” means any transaction, other than when used to refer to an authorized Medicare Advantage policy, where new individual or group Medicare supplement or individual 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 are substantially reduced. “Replacement” includes transactions replacing a Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy within the same insurer or affiliates of the insurer.

Ins 3.39(3)(zbm) (zbm) “Restricted network provision,” means any provision that conditions the payment of benefits, in whole or in part, on the use of network providers.

Ins 3.39(3)(zc) (zc) “Secretary” means the secretary of the United States department of health and human services.

Ins 3.39(3)(zcm) (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.

Ins 3.39(3)(zd) (zd)

Ins 3.39(3)(zd)1. 1. “Sickness” shall not be defined to be more restrictive than illness or disease of an insured person that first manifests itself after the effective date of insurance and while the insurance is in force.

Ins 3.39(3)(zd)2. 2. The definition of “sickness” may be further modified to exclude any illness or disease for which benefits are provided under any workers’ compensation, occupational disease, employer’s liability or similar law.

Ins 3.39(3)(ze) (ze) “Specified disease coverage” means coverage that is limited to named or defined sickness conditions. The term does not include dental or vision care coverage.

Ins 3.39(3g) (3g) Medicare eligible person.

Ins 3.39(3g)(a) (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:

Ins 3.39(3g)(a)1. 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.

Ins 3.39(3g)(a)2. 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.

Ins 3.39(3g)(a)3. 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 them from a 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.

Ins 3.39(3g)(b) (b) Medicare supplement policies and certificates and Medicare select policies and certificates 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 may not require the Medicare eligible person to replace existing coverage with coverage reflecting recent changes, including changes due to MACRA. This means insurers may no longer actively market the Medicare Part B medical deductible rider to persons who are newly eligible for Medicare on or after January 1, 2020. A Medicare eligible person who is first eligible for Medicare prior to January 1, 2020, may elect the Medicare Part B medical deductible rider coverage at any time, provided an insurer is offering that coverage. If an insured was eligible for Medicare prior to January 1, 2020 and elected the Medicare Part B medical deductible rider coverage, upon renewal of the policy or certificate that person shall be eligible to continue to receive benefits provided by the Medicare Part B medical deductible rider in accordance with the terms of the Medicare supplement policy or certificate or Medicare select policy or certificate.

Ins 3.39(3r) (3r) Open enrollment.

Ins 3.39(3r)(a) (a) An issuer may not deny nor condition the issuance or effectiveness of, or discriminate in the pricing of, basic Medicare supplement policies or certificates, Medicare cost policy, or Medicare select policies or certificates permitted, as applicable, under subs. (5), (5m), (5t), (7), (30), (30m), and (30t), or riders permitted under sub. (5) (i), (5m) (e), or (5t) (e), for which an application is submitted prior to or during the 6-month period beginning with the first month that an individual first enrolled for benefits under Medicare Part B or the month that an individual turns age 65 for any individual who was first enrolled in Medicare Part B when under the age of 65 on any of the following grounds:

Ins 3.39(3r)(a)1. 1. Health status.

Ins 3.39(3r)(a)2. 2. Claims experience.

Ins 3.39(3r)(a)3. 3. Receipt of health care.

Ins 3.39(3r)(a)4. 4. Medical condition.

Ins 3.39(3r)(b) (b) Except as provided in pars. (c) and (d), and sub. (34), this section shall not prevent the application of any preexisting condition limitation that is in compliance with sub. (4) (a) 2.

Ins 3.39(3r)(c) (c) If an applicant qualifies under par. (a) and submits an application during the time period referenced in par. (a) and, as of the date of application, has had a continuous period of creditable coverage of at least 6 months, the issuer may not exclude benefits based on a preexisting condition.

Ins 3.39(3r)(d) (d) If the applicant qualifies under par. (a) and submits an application during the time period referenced in par. (a) and, as of the date of application, has had a continuous period of creditable coverage that is less than 6 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.

Ins 3.39(4) (4) Medicare supplement policy and certificate, Medicare select policy and certificate and Medicare cost policy requirements for policies and certificates offered to persons first eligible for Medicare 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 issued to persons who were first eligible for Medicare prior to June 1, 2010, as a Medicare supplement policy or certificate, as a Medicare select policy or certificate, or as a Medicare cost policy unless the policy or certificate complies, as applicable, with all of the following:

Ins 3.39(4)(a) (a) The Medicare supplement policy and certificate, Medicare select policy or certificate, or the Medicare cost policy complies, as applicable, with all the following requirements:

Ins 3.39(4)(a)1. 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, Medicare supplement policy or certificate, or Medicare select policy or certificate without prior approval from the commissioner and compliance with subs. (5), (7) and (30), respectively.

Ins 3.39(4)(a)2. 2. Discloses on the first page any applicable preexisting conditions limitation, contains no preexisting condition waiting period longer than 6 months and does 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 6 months before the effective date of coverage.

Ins 3.39(4)(a)3. 3. Contains no definitions of terms such as “Medicare eligible expenses.” “accident,” “sickness,” “mental or nervous disorders,” “skilled nursing facility,” “hospital,” “nurse,” “physician,” “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).

Ins 3.39(4)(a)4. 4. Does not indemnify against losses resulting from sickness on a different basis from losses resulting from accident.

Ins 3.39(4)(a)5. 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 Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy shall not be cancelled or nonrenewed by the insurer on the grounds of deterioration of health. The Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy may be cancelled only for nonpayment of premium or material misrepresentation. If the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy is issued by a health maintenance organization, as defined by s. 609.01 (2), Stats., the policy or certificate may, in addition to the above reasons, be cancelled or nonrenewed by the issuer if the insured moves out of the service area.

Ins 3.39(4)(a)6. 6. Provides that termination of a Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy 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 policyholder, 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.

Ins 3.39(4)(a)7. 7. Contains statements on the first page and elsewhere in the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy that satisfy the requirements of s. Ins 3.13 (2) (c), (d) or (e), and clearly states on the first page or schedule page the duration of the term of coverage for which the policy or certificate is issued and for which it may be renewed. The renewal period cannot be less than the greatest of the following: 3 months, the period the insured has paid the premium, or the period specified in the policy or certificate.

Ins 3.39(4)(a)8. 8. Changes benefits automatically to coincide with any changes in the applicable Medicare deductible amount, coinsurance, and copayment percentage factors, although there may be a corresponding modification of premiums in accordance with the policy or certificate provisions and ch. 625, Stats.

Ins 3.39(4)(a)9. 9. Prominently discloses any limitations on the choice of providers or geographical area of service.

Ins 3.39(4)(a)10. 10. Contains on the first page the designation, printed in 18-point type, and in close conjunction the caption printed in 12-point type, prescribed in sub. (5), (7), or (30).

Ins 3.39(4)(a)11. 11. Contains text that is plainly printed in black or blue ink and has a font size that is uniform and not less than 10-point with a lower-case unspaced alphabet length not less than 120-point.

Ins 3.39(4)(a)12. 12. Contains a provision describing any grievance rights as required by s. 632.83, Stats., applicable to Medicare supplement policy and certificate, Medicare select policy and certificate, and Medicare cost policies.

Ins 3.39(4)(a)13. 13. Is approved by the commissioner.

Ins 3.39(4)(a)14. 14. Contains no exclusion, limitation, or reduction of coverage for a specifically named or described condition after the policy effective date.

Ins 3.39(4)(a)15. 15. Provides for midterm cancellation at the request of the insured and that, if an insured cancels a policy midterm or the policy terminates midterm because of the insured’s death, the issuer shall issue a pro rata refund to the insured or the insured’s estate.

Ins 3.39(4)(a)16. 16. Except for permitted preexisting condition clauses as described in subd. 2., no Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy or certificate may be advertised, solicited or issued for delivery in this state as a Medicare supplement policy or certificate, Medicare select policy or certificate or Medicare cost policy if such policy or certificate contains limitations or exclusions on coverage that are more restrictive than those of Medicare.

Ins 3.39(4)(a)17. 17. No Medicare supplement policy or certificate in force in this state shall contain benefits that duplicate benefits provided by Medicare.

Ins 3.39(4)(a)18. 18. A Medicare supplement policy or certificate, Medicare select policy or certificate or Medicare cost policy shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificateholder for the period not to exceed 24 months in which the policyholder or certificateholder 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 certificateholder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to the assistance.

Ins 3.39(4)(a)18m. 18m. If the suspension in subd. 18. occurs and if the policyholder or certificateholder loses entitlement to medical assistance, the policy or certificate shall be automatically reinstituted (effective as of the date of termination of the entitlement) as of the termination of the entitlement if the policyholder or certificateholder provides notice of loss of the entitlement within 90 days after the date of the loss and pays the premium attributable to the period, effective as of the date of termination of the entitlement.

Ins 3.39(4)(a)18p. 18p. Each Medicare supplement policy or certificate, Medicare select policy or certificate or Medicare cost policy shall provide, and contain within the policy, that benefits and premiums under the policy or certificate shall be suspended for any period that may be provided by federal regulation, at the request of the policyholder or certificateholder if the policyholder or certificateholder 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 or certificate shall be automatically reinstituted, effective as of the date of loss of coverage, if the policyholder or certificateholder provides notice of loss of coverage within 90 days after the date of such loss and pays the premium attributable to the period, effective as of the date of termination of enrollment in the group health plan.

Ins 3.39(4)(a)18s. 18s. No Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy may provide for any waiting period for resumption of coverage that was in effect before the date of suspension under subd. 18. with respect to treatment of preexisting conditions.

Ins 3.39(4)(a)18u. 18u. Each Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy shall provide for resumption of coverage that was in effect before the date of suspension in subd. 18. If the suspended Medicare supplement policy or certificate, Medicare select policy or certificate or Medicare cost policy provided coverage for outpatient prescription drugs, resumption of the policy 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. If the suspended Medicare supplement policy or certificate, Medicare select policy or certificate or Medicare cost policy provided coverage of Medicare Part B medical deductible coverage or if the insured was enrolled or Medicare eligible prior to January 1, 2020, and the insurer offers a plan with Medicare Part B medical deductible coverage, then the policyholder or certificateholder may elect or renew coverage with the Medicare Part B medical deductible coverage. If the insurer no longer offers a plan with the Medicare Part B medical deductible coverage, then the insurer shall provide the policyholder or certificateholder with substantially equivalent coverage to the coverage in effect prior to the date of suspension.

Ins 3.39(4)(a)18x. 18x. Each Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy shall provide that, upon the resumption of coverage that was in effect before the date of suspension in subd. 18., classification of premiums shall be on terms at least as favorable to the policyholder or certificateholder as the premium classification terms that would have applied to the policyholder or certificateholder had the coverage not been suspended.

Ins 3.39(4)(a)19. 19. Shall not use an underwriting standard for under age 65 that is more restrictive than that used for age 65 and above.

Ins 3.39(4)(a)20. 20.

Ins 3.39(4)(a)20.a. a. A 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 Medicare Part D at the option of the policyholder.

Ins 3.39(4)(a)20.b. b. A policy with benefits for outpatient prescription drugs shall not be issued after December 31, 2005.

Ins 3.39(4)(a)20.c. c. After December 31, 2005, a policy with benefits for outpatient prescription drugs may not be renewed after the policyholder enrolls in Medicare Part D unless the policy is modified to eliminate outpatient prescription drug coverage for expenses of outpatient prescription drugs incurred after the effective date of the individual’s coverage under a Medicare Part D plan and the premiums are adjusted appropriately to reflect elimination of that coverage.

Ins 3.39(4)(a)21. 21. If a policy that provides Medicare supplement or Medicare cost coverage eliminates an outpatient prescription drug benefit as a result of requirements imposed by the MMA, the modified policy shall be deemed to satisfy the guaranteed renewal requirements of subd. 5.

Ins 3.39(4)(b) (b) The outline of coverage for the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy or certificate shall comply with all of the following:

Ins 3.39(4)(b)1. 1. Is provided to all applicants at the time application is made and, except in the case of direct response insurance, the issuer obtains written acknowledgement from the applicant that the outline was received.

Ins 3.39(4)(b)2. 2. Complies with s. Ins 3.27, including s. Ins 3.27 (5) (L) and (9).

Ins 3.39(4)(b)3. 3. Is substituted to properly describe the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy or certificate as issued, if the outline provided at the time of application did not properly describe the coverage which was issued. The substituted outline shall accompany the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy or certificate when it is delivered and shall contain the following statement in no less than 12-point type and 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.”

Ins 3.39(4)(b)4. 4. Contains in close conjunction on its first page the designation, printed in a distinctly contrasting color in 24-point type, and the caption, printed in a distinctly contrasting color in 18-point type prescribed in sub. (5), (7) or (30).

Ins 3.39(4)(b)5. 5. Is substantially in the format prescribed in Appendix 1 for the appropriate category and printed in no less than 12-point type.

Ins 3.39(4)(b)6. 6. Summarizes or refers to the coverage set out in applicable statutes.

Ins 3.39(4)(b)7. 7. Contains a listing of the required coverage as set out in sub. (5) (c) and the optional coverages as set out in sub. (5) (i), and the annual premiums for each selected coverage, substantially in the format of sub. (11) of Appendix 1.

Ins 3.39(4)(b)8. 8. Is approved by the commissioner along with the policy or certificate form.

Ins 3.39(4)(c) (c) Any rider or endorsement added to the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy or certificate shall comply with all of the following:

Ins 3.39(4)(c)1. 1. Shall be contained in the policy or certificate and, if a separate, additional premium is charged in connection with the rider or endorsement, the premium charge shall be stated in the policy or certificate.

Ins 3.39(4)(c)2. 2. Shall be agreed to in writing signed by the insured if, after the date of the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy or certificate issue, the rider or endorsement increases benefits or coverage and there is an accompanying increase in premium during the term of the policy or certificate, unless the increase in benefits or coverage is required by law.

Ins 3.39(4)(c)3. 3. Shall only provide coverage as described in sub. (5) (i) or provide coverage to meet Wisconsin mandated provisions.

Ins 3.39(4)(d) (d) The schedule of benefits page or the first page of the policy or certificate contains a listing giving the coverages and both the annual premium in the format shown in sub. (11) of Appendix 1 and modal premium selected by the applicant.

Ins 3.39(4)(e) (e) The anticipated loss ratio for any new Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy form, or the expected percentage of the aggregate amount of premiums earned that will be returned to insureds in the form of aggregate benefits, not including anticipated refunds or credits, that is provided under the policy or certificate form:

Ins 3.39(4)(e)1. 1. Is computed on the basis of anticipated incurred claims 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 the entire period for which the policy form provides coverage, in accordance with accepted actuarial principles and practices; and