Chapter 632

632.7495 History History: 1997 a. 27, 237; 2009 a. 28.

632.7497 632.7497 Modifications at renewal.

632.7497(1) (1) In this section, “individual major medical or comprehensive health benefit plan” includes coverage under a group policy that is underwritten on an individual basis and issued to individuals or families.

632.7497(2) (2) An insurer that issues an individual major medical or comprehensive health benefit plan shall, at the time of a coverage renewal, at the request of an insured, permit the insured to do either of the following:

632.7497(2)(a) (a) Change his or her coverage to any of the following:

632.7497(2)(a)1. 1. A different but comparable individual major medical or comprehensive health benefit plan currently offered by the insurer.

632.7497(2)(a)2. 2. An individual major medical or comprehensive health benefit plan currently offered by the insurer with more limited benefits.

632.7497(2)(a)3. 3. An individual major medical or comprehensive health benefit plan currently offered by the insurer with higher deductibles.

632.7497(2)(b) (b) Modify his or her existing coverage by electing an optional higher deductible, if any, under the individual major medical or comprehensive health benefit plan.

632.7497(3) (3) 

632.7497(3)(a) (a) The insurer may not impose any new preexisting condition exclusion under the new or modified coverage under sub. (2) that did not apply to the insured’s original coverage and shall allow the insured credit under the new or modified coverage for the period of original coverage.

632.7497(3)(b) (b) For the new or modified coverage, the insurer may not rate for health status other than on the insured’s health status at the time the insured applied for the original coverage and as the insured disclosed on the original application.

632.7497(4) (4) 

632.7497(4)(a) (a) Annually, the insurer shall mail to each insured under an individual major medical or comprehensive health benefit plan issued by the insurer, a notice that includes all of the following information:

632.7497(4)(a)1. 1. That the insured has the right to elect alternative coverage as described in sub. (2).

632.7497(4)(a)2. 2. A description of the alternatives available to the insured.

632.7497(4)(a)3. 3. The procedure for making the election.

632.7497(4)(b) (b) The insurer shall mail the notice under par. (a) not more than 3 months nor less than 60 days before the renewal date of the insured’s plan.

632.7497(5) (5) 

632.7497(5)(a) (a) Nothing in this section requires an insurer to issue alternative coverage under sub. (2) if the insured’s coverage may be nonrenewed or discontinued under s. 632.7495 (2), (3) (b), or (4).

632.7497(5)(b) (b) Notwithstanding s. 600.01 (1) (b) 3. and 4., this section applies to a group health benefit plan described in s. 600.01 (1) (b) 3. or 4. if that group health benefit plan is an individual major medical or comprehensive health benefit plan as defined in sub. (1).

632.7497 History History: 2009 a. 28.

632.75 632.75 Prohibited provisions for disability insurance.

632.75(1) (1) Death presumed from extended absence. Section 813.22 (1) applies to any disability insurance policy providing a death benefit.

632.75(2) (2) Dividends conditioned on continuation of policy or payment of premiums. Except on the first or second anniversary, no dividend payable on a disability insurance policy may be made contingent on the continuation of the policy or on premium payments.

632.75(3) (3) Prohibition of exclusion from coverage of certain dependent children. No disability insurance policy issued or renewed on or after April 30, 1980, may exclude or terminate from coverage any dependent child of an insured person or group member solely because the child does not reside with the insured person or group member. This subsection does not apply to a group policy, as defined in s. 632.897 (1) (c), or an individual policy, as defined in s. 632.897 (1) (cm), that is subject to s. 632.897 (10).

632.75(4) (4) Out-of-state service providers. Except as provided in s. 628.36, no disability insurance policy may exclude or limit coverage of health care services provided outside this state, if the services are provided within 75 miles of the insured’s residence in a facility licensed or approved by the state where the facility is located.

632.75(5) (5) Payments for hospital services. No insurer may reimburse a hospital for patient health care costs at a rate exceeding the rate established under ch. 54, 1985 stats., or s. 146.60, 1983 stats., for care provided prior to July 1, 1987.

632.75 History History: 1975 c. 375; 1979 c. 221; 1981 c. 304; 1983 a. 27; 1985 a. 29 s. 3202 (27); 1987 a. 27; 1989 a. 31, 359.

632.755 632.755 Public assistance and early intervention services.

632.755(1g) (1g) 

632.755(1g)(a) (a) A disability insurance policy may not exclude a person or a person’s dependent from coverage because the person or the dependent is eligible for assistance under ch. 49 or because the dependent is eligible for early intervention services under s. 51.44.

632.755(1g)(b) (b) A disability insurance policy may not terminate its coverage of a person or a person’s dependent because the person or the dependent is eligible for assistance under ch. 49 or because the dependent is eligible for early intervention services under s. 51.44.

632.755(1g)(c) (c) A disability insurance policy may not provide different benefits of coverage to a person or the person’s dependent because the person or the dependent is eligible for assistance under ch. 49 or because the dependent is eligible for early intervention services under s. 51.44 than it provides to persons and their dependents who are not eligible for assistance under ch. 49 or for early intervention services under s. 51.44.

632.755(2) (2) Benefits provided by a disability insurance policy shall be primary to those benefits provided under ch. 49 or under s. 51.44 or 253.05.

632.755 History History: 1985 a. 29; 1989 a. 173; 1991 a. 178, 214; 1995 a. 407; 1997 a. 27.

632.76 632.76 Incontestability for disability insurance.

632.76(1) (1) Avoidance for misrepresentations. No statement made by an applicant in the application for individual disability insurance coverage and no statement made respecting the person’s insurability by a person insured under a group policy, except fraudulent misrepresentation, is a basis for avoidance of the policy or denial of a claim for loss incurred or disability commencing after the coverage has been in effect for 2 years. The policy may provide for incontestability even with respect to fraudulent misstatements.

632.76(2) (2) Preexisting diseases.

632.76(2)(a) (a) No claim for loss incurred or disability commencing after 2 years from the date of issue of the policy may be reduced or denied on the ground that a disease or physical condition existed prior to the effective date of coverage, unless the condition was excluded from coverage by name or specific description by a provision effective on the date of loss. This paragraph does not apply to a group health benefit plan, as defined in s. 632.745 (9), which is subject to s. 632.746.

632.76(2)(ac) (ac)

632.76(2)(ac)1. 1. Notwithstanding par. (a), no claim or loss incurred or disability commencing after 12 months from the date of issue of an individual disability insurance policy, as defined in s. 632.895 (1) (a), may be reduced or denied on the ground that a disease or physical condition existed prior to the effective date of coverage, unless the condition was excluded from coverage by name or specific description by a provision effective on the date of the loss.

632.76(2)(ac)2. 2. Except as provided in subd. 3., an individual disability insurance policy, as defined in s. 632.895 (1) (a), other than a short-term policy subject to s. 632.7495 (4) and (5), may not define a preexisting condition more restrictively than a condition, whether physical or mental, regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended or received within 12 months before the effective date of coverage.

632.76(2)(ac)3. 3. Except as the commissioner provides by rule under s. 632.7495 (5), all of the following apply to an individual disability insurance policy that is a short-term policy subject to s. 632.7495 (4) and (5):

632.76(2)(ac)3.a. a. The policy may not define a preexisting condition more restrictively than a condition, whether physical or mental, regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended or received before the effective date of coverage.

632.76(2)(ac)3.b. b. The policy shall reduce the length of time during which a preexisting condition exclusion may be imposed by the aggregate of the insured’s consecutive periods of coverage under the insurer’s individual disability insurance policies that are short-term policies subject to s. 632.7495 (4) and (5). For purposes of this subd. 3. b., coverage periods are consecutive if there are no more than 63 days between the coverage periods.

632.76(2)(b) (b) Notwithstanding par. (a), no claim for loss incurred or disability commencing after 6 months from the date of issue of a medicare supplement policy, medicare replacement policy or long-term care insurance policy may be reduced or denied on the ground that a disease or physical condition existed prior to the effective date of coverage. Notwithstanding par. (ac) 2., a medicare supplement policy, medicare replacement policy, or long-term care insurance policy 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 6 months before the effective date of coverage. Notwithstanding par. (a), if on the basis of information contained in an application for insurance a medicare supplement policy, medicare replacement policy, or long-term care insurance policy excludes from coverage a condition by name or specific description, the exclusion must terminate no later than 6 months after the date of issue of the medicare supplement policy, medicare replacement policy, or long-term care insurance policy. The commissioner may by rule exempt from this paragraph certain classes of medicare supplement policies, medicare replacement policies, and long-term care insurance policies, if the commissioner finds the exemption is not adverse to the interests of policyholders and certificate holders.

632.76 History History: 1975 c. 375, 421; 1981 c. 82; 1985 a. 29; 1989 a. 31; 1995 a. 289; 1997 a. 27; 2009 a. 28.

632.76 Cross-reference Cross-reference: See also s. Ins 3.39, Wis. adm. code.

632.76 Annotation A generic exclusion of all diseases or conditions diagnosed or treated before issuance of the policy does not constitute exclusion by “name or specific description” under sub. (2). Peterson v. Equitable Life Assurance Society of the United States, 57 F. Supp. 2d 692 (1999).

632.77 632.77 Permitted provisions for disability insurance policies. If any provisions are contained in a disability insurance policy dealing with the following subjects, they shall conform to the requirements specified:

632.77(1) (1) Change of occupation. Any provision respecting change of occupation may provide only for a lower maximum payment and for reduction of loss payments proportionate to the change in appropriate premium rates if the change is to a higher rated occupation, and must provide for retroactive reduction of premium rates from the date of change of occupation or the last policy anniversary date, whichever is the more recent, if the change is to a lower rated occupation.

632.77(2) (2) Misstatement of age. Any provision respecting misstatement of age may only provide for reduction of the loss payable to the amount that the premium paid would have purchased at the correct age.

632.77(3) (3) Limitations on payments. Any limitation on payments because of other insurance or because of the income of the insured must be in accordance with provisions approved by the commissioner by rule or explicitly approved in approving the policy form, but the commissioner may not promulgate a rule that conflicts with s. 632.755 nor approve a policy form that does not comply with s. 632.755.

632.77(4) (4) Facility of payment. Reasonable facility of payment clauses may be inserted. Payment in accordance with such clauses shall discharge the insurer’s obligation to pay claims.

632.77 History History: 1975 c. 375; 1979 c. 102; 1985 a. 29.

632.775 632.775 Effect of power of attorney for health care.

632.775(1) (1) Insurer may not require. An insurer may not require an individual to execute a power of attorney for health care under ch. 155 as a condition of coverage under a disability insurance policy.

632.775(2) (2) Effect on disability policies. Executing a power of attorney for health care under ch. 155 may not be used to impair in any manner the procurement of a disability insurance policy or to modify the terms of an existing disability insurance policy. A disability insurance policy may not be impaired or invalidated in any manner by the exercise of a health care decision by a health care agent on behalf of a person who is insured under the policy and who has authorized the health care agent under ch. 155.

632.775 History History: 1989 a. 200.

632.78 632.78 Required grace period for disability insurance policies. Every disability insurance policy shall contain clauses providing for a grace period of at least 7 days for weekly premium policies, 10 days for monthly premium policies and 31 days for all other policies, for each premium after the first, during which the policy shall continue in force. In group and blanket policies the policy must provide for a grace period of at least 31 days unless the policyholder gives written notice of discontinuance prior to the date of discontinuance and in accordance with the policy terms. In group or blanket policies, the policy may provide for payment of a proportional premium for the period the policy is in effect during the grace period under this section.

632.78 History History: 1975 c. 375; 1977 c. 371; 1979 c. 75; 1979 c. 110 s. 60 (11); 1979 c. 221; 1981 c. 39.

632.79 632.79 Notice of termination of group hospital, surgical or medical expense insurance coverage due to cessation of business or default in payment of premiums.

632.79(1) (1) Scope. This section shall apply to every group hospital, surgical or medical expense insurance policy or service plan purchased by or on behalf of an employer to provide coverage for employees and issued under s. 185.981 or by any insurer authorized under chs. 600 to 646 which has been delivered, renewed or is otherwise in force on or after June 12, 1976.

632.79(2) (2) Notice to policyholder or party responsible for payment of premiums.

632.79(2)(a) (a) Prior to termination of any group policy, plan or coverage subject to this section due to a cessation of business or default in payment of premiums by the policyholder, trust, association or other party responsible for such payment, the insurer or organization issuing the policy, contract, booklet or other evidence of insurance shall notify in writing the policyholder, trust, association or other party responsible for payment of premiums of the date as of which the policy or plan will be terminated or discontinued. At such time, the insurer or organization shall additionally furnish to the policyholder, trust, association or other party a notice form in sufficient number to be distributed to covered employees or members indicating what rights, if any, are available to them upon termination.

632.79(2)(b) (b) For purpose of notice and distribution to covered employees and members under par. (a), the administrator responsible for determining the persons covered and the premiums payable to the insurer or organization under any group policy or plan of disability insurance is responsible for providing such notices.

632.79(3) (3) Liability of insurer or service organization for payment of claims. Under any group policy or plan subject to this section, the insurer or organization shall be liable for all valid claims for covered losses prior to the expiration of any grace period specified in the group policy or plan.

632.79(5) (5) Notice exception. The notice requirements of this section shall not apply if a group policy or plan providing coverage to employees or members is terminated and immediately replaced by another policy or plan providing similar coverage to such employees or members.

632.79 History History: 1975 c. 352; Stats. 1975 s. 204.324; 1975 c. 422 s. 106; Stats. 1975 s. 632.79; 1979 c. 32, 221.

632.79 Cross-reference Cross-reference: See also s. Ins 6.51, Wis. adm. code.

632.793 632.793 Notice of loss of primary insurance coverage due to age.

632.793(1) (1) Notice to insured and employer. If an individual who is covered under a group disability insurance policy, as defined in s. 632.895 (1) (a), that is purchased by or on behalf of an employer to provide coverage for employees will lose primary coverage under the policy upon reaching age 65, the insurer issuing the policy shall provide written notice of the change in coverage status by regular mail to the individual and shall send a copy of the notice by regular mail to the employer. The insurer shall provide the notice not less than 30 nor more than 60 days before the individual becomes 65 years of age. The notice shall specify the date on which the insurance coverage will no longer be primary and shall inform the individual that he or she will be eligible for coverage under the federal medicare program at age 65.

632.793(2) (2) Applicability. Subsection (1) does not apply if the employer has at least 20 employees for each working day in at least 20 calendar weeks in the current year or the preceding year.

632.793 History History: 1993 a. 108.

632.795 632.795 Open enrollment upon liquidation.

632.795(1) (1) Definition. In this section, “liquidated insurer” means an insurer ordered liquidated under ch. 645 or under similar laws of another jurisdiction.

632.795(2) (2) Coverage for group members. Except as provided in sub. (5) and unless otherwise provided by rule or order of the commissioner, an insurer described in sub. (3) shall permit insureds or enrolled participants of a liquidated insurer’s group health care policy or plan to obtain coverage under a comprehensive group health care policy or plan offered by the insurer in the manner and under the terms required by sub. (4).

632.795(3) (3) Participating insurers. Subsection (2) applies to an insurer that participated in the most recent enrollment period in which the group members were able to choose among coverage offered by the liquidated insurer and coverage offered by one or more other insurers, if all of the following are satisfied:

632.795(3)(a) (a) Coverage under a comprehensive group health care policy or plan offered by the insurer was selected by one or more members of the group in the most recent enrollment period.

632.795(3)(b) (b) The most recent enrollment period occurred on or after July 1, 1989.

632.795(4) (4) Terms and offering of coverage.

632.795(4)(a) (a) An insurer subject to sub. (2) shall provide coverage under the same policy form and for the same premium as it originally offered in the most recent enrollment period, subject only to the medical underwriting used in that enrollment period. Unless otherwise prescribed by rule, the insurer may apply deductibles, preexisting condition limitations, waiting periods or other limits only to the extent that they would have been applicable had coverage been extended at the time of the most recent enrollment period and with credit for the satisfaction or partial satisfaction of similar provisions under the liquidated insurer’s policy or plan. The insurer may exclude coverage of claims that are payable by a solvent insurer under insolvency coverage required by the commissioner or by the insurance regulator of another jurisdiction. Coverage shall be effective on the date that the liquidated insurer’s coverage terminates.

632.795(4)(b) (b) An insurer subject to sub. (2) shall offer coverage to the group members, and the policyholder shall provide group members with the opportunity to obtain coverage, in the manner and within the time limits required by the commissioner by rule or order.

632.795(5) (5) Medical assistance enrollees. This section does not apply to persons enrolled in a health care plan offered by a liquidated insurer if the persons are enrolled in that plan under a contract between the department of health services and the liquidated insurer under s. 49.45 (2) (b) 2.

632.795 History History: 1989 a. 23; 1995 a. 27 s. 9126 (19); 2007 a. 20 s. 9121 (6) (a).

632.797 632.797 Disclosure of group health claims experience.

632.797(1) (1) 

632.797(1)(a) (a) Except as provided in subs. (2) and (3), an insurer shall provide the policyholder of a group or blanket disability insurance policy, or an employer that provides health care coverage to its employees through a multiple-employer trust, with the policyholder’s or the employer’s aggregate group health claims experience for the current policy period, and for up to 2 policy periods immediately preceding the current policy period if the insurer provided coverage during those periods, upon request from the policyholder or employer.