Chapter Ins 3

Ins 3.38 History History: Cr. Register, February, 1977, No. 254, eff. 3-1-77; reprinted, Register, April, 1977, No. 256, to restore dropped text; corrections in (1) (intro.), (i) and (j), made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436; correction in (1) (f) made under s. 13.93 (2m) (b) 7., Stats., Register, June, 1994, No. 462.

Ins 3.39 Ins 3.39 Standards for disability insurance sold to the Medicare eligible.

Ins 3.39(1) (1) Purpose.

Ins 3.39(1)(a) (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.

Ins 3.39(1)(b) (b) This section seeks to reduce abuses and confusion associated with the sale of disability insurance to Medicare eligible persons by providing 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 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 “Medicare cost” unless it meets the requirements of this section.

Ins 3.39(1)(d) (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), Stats.

Ins 3.39(2) (2) Scope. This section applies to individual and group disability policies sold, delivered or issued for delivery in Wisconsin to Medicare eligible persons as follows:

Ins 3.39(2)(a) (a) Except as provided in pars. (d) and (e), this section applies to any group or individual Medicare supplement policy or certificate, or Medicare select policy or certificate as described in s. 600.03 (28r), Stats., or any Medicare cost policy as described in s. 600.03 (28p) (a) and (c), Stats., including all of the following:

Ins 3.39(2)(a)1. 1. Any Medicare supplement policy, Medicare select policy, or Medicare cost policy issued by a voluntary sickness care plan subject to ch. 185, Stats.

Ins 3.39(2)(a)2. 2. Any certificate issued under a group Medicare supplement policy or group Medicare select policy.

Ins 3.39(2)(a)3. 3. Any individual or group policy sold in Wisconsin predominantly to individuals or groups of individuals who are 65 years of age or older that offers hospital, medical, surgical, or other disability coverage, except for a policy that offers solely nursing home, hospital confinement indemnity, or specified disease coverage.

Ins 3.39(2)(a)5. 5. Any individual or group policy or certificate sold in Wisconsin to persons under 65 years of age and eligible for Medicare by reason of disability that offers hospital, medical, surgical or other disability coverage, except for a policy or certificate that offers solely nursing home, hospital confinement indemnity or specified disease coverage.

Ins 3.39(2)(b) (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 that is not a Medicare supplement, Medicare select, or a Medicare cost policy as described in par. (a).

Ins 3.39(2)(c) (c) Except as provided in par. (e), sub. (10) applies to any individual or group hospital or medical policy that continues with changed benefits after the insured becomes eligible for Medicare.

Ins 3.39(2)(d) (d) Except as provided in subs. (10) and (13), this section does not apply to any of the following:

Ins 3.39(2)(d)1. 1. A group policy issued to one or more employers or labor organizations, to the trustees of a fund established by one or more employers or labor organizations, or a combination of both, for employees or former employees or both, or for members or former members or both of the labor organizations;

Ins 3.39(2)(d)3. 3. Individual or group hospital, surgical, medical, major medical, or comprehensive medical expense coverage which continues after an insured becomes eligible for Medicare; or

Ins 3.39(2)(e) (e) This section does not apply to either of the following:

Ins 3.39(2)(e)1. 1. A policy providing solely accident, dental, vision, disability income, or credit disability income coverage.

Ins 3.39(2)(e)2. 2. A single premium, non-renewable policy.

Ins 3.39(2)(f) (f) This section may be enforced under ss. 601.41, 601.64, 601.65, Stats., or ch. 645, Stats., or any other enforcement provision of chs. 600 to 646, Stats., or Wisconsin Administrative Code Insurance chapters.

Ins 3.39(3) (3) Definitions. In this section and for use in policies or certificates:

Ins 3.39(3)(a) (a) “Accident,” “Accidental Injury,” or “Accidental Means” shall be defined to employ “result” language and shall not include words that establish an accidental means test or use words such as “external, violent, visible wounds” or similar words of description or characterization.

Ins 3.39(3)(a)1. 1. The definition shall not be more restrictive than the following: “Injury or injuries for which benefits are provided” means accidental bodily injury sustained by the insured person that is the direct result of an accident, independent of disease or bodily infirmity or any other cause, and occurs while insurance coverage is in force.”

Ins 3.39(3)(a)2. 2. The definition may provide that injuries shall not include injuries for which benefits are provided or available under any workers’ compensation, employer’s liability or similar law or motor vehicle no-fault plan, unless prohibited by law.

Ins 3.39(3)(b) (b) “Advertisement” has the meaning set forth in s. Ins 3.27 (5) (a).

Ins 3.39(3)(c) (c) “Applicant” means either of the following:

Ins 3.39(3)(c)1. 1. In the case of an individual Medicare supplement, Medicare select, or Medicare cost policy, the person who seeks to contract for insurance benefits.

Ins 3.39(3)(c)2. 2. In the case of a group Medicare supplement policy, the proposed certificateholder.

Ins 3.39(3)(ce) (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 insured or any person acting on the insured’s behalf for health care costs for which the insured is not liable. The prohibition on recovery does not affect the liability of an insured for any deductibles, coinsurance or copayments, or for premiums owed under the policy or certificate.

Ins 3.39(3)(cs) (cs) “Bankruptcy” means when a Medicare Advantage organization that is not an issuer has filed, or has had filed against it, a petition for declaration of bankruptcy and has ceased doing business in the state.

Ins 3.39(3)(d) (d) “Benefit period,” or “Medicare benefit period” shall not be defined more restrictively than as defined in the Medicare program.

Ins 3.39(3)(e) (e) “CMS” means the Centers for Medicare & Medicaid Services within the U.S. department of health and human services.

Ins 3.39(3)(f) (f) “Certificate” means a certificate delivered or issued for delivery in this state under a Medicare supplement policy or under a Medicare select policy that is issued on a group basis, i.e. employer retiree group.

Ins 3.39(3)(g) (g) “Certificate form” means the form on which the certificate is delivered or issued for delivery by the issuer to a group that receives insurance coverage through a group Medicare supplement policy, or a group Medicare select policy.

Ins 3.39(3)(gg) (gg) “Certificateholder” means an individual member of a group that is receives a certificate that identifies the individual as a participant in the group Medicare supplement policy or the group Medicare select policy issued in this state.

Ins 3.39(3)(gr) (gr) “Complaint” means any dissatisfaction expressed by an individual concerning a Medicare select issuer or its network providers.

Ins 3.39(3)(h) (h) “Continuous period of creditable coverage” means the period during which an individual was covered by creditable coverage, if during the period of the coverage the individual had no breaks in coverage greater than 63 days.

Ins 3.39(3)(i) (i)

Ins 3.39(3)(i)1. 1. “Creditable coverage” means with respect to an individual, coverage of the individual provided under any of the following:

Ins 3.39(3)(i)1.a. a. A group health plan;

Ins 3.39(3)(i)1.b. b. Health insurance coverage;

Ins 3.39(3)(i)1.c. c. Part A or Part B of Title XVIII of the social security act (Medicare);

Ins 3.39(3)(i)1.d. d. Title XIX of the social security act (Medicaid), other than coverage consisting solely of benefits under section 1928;

Ins 3.39(3)(i)1.e. e. Chapter 55 of Title 10 United States Code, commonly referred to as TRICARE (formerly known as CHAMPUS);

Ins 3.39(3)(i)1.f. f. A medical care program of the Indian Health Service or of a tribal organization;

Ins 3.39(3)(i)1.g. g. A state health benefits risk pool;

Ins 3.39(3)(i)1.h. h. A health plan offered under chapter 89 of Title 5 United States Code commonly referred to as the Federal Employees Health Benefits Program;

Ins 3.39(3)(i)1.i. i. A public health plan as defined in federal regulation; and

Ins 3.39(3)(i)1.j. j. A health benefit plan under Section 5 (e) of the Peace Corps Act (22 United States Code 2504 (e)).

Ins 3.39(3)(i)2. 2. “Creditable coverage” does not include any of the following:

Ins 3.39(3)(i)2.a. a. Coverage only for accident or disability income insurance, or any combination thereof;

Ins 3.39(3)(i)2.b. b. Coverage issued as a supplement to liability insurance;

Ins 3.39(3)(i)2.c. c. Liability insurance, including general liability insurance and automobile liability insurance;

Ins 3.39(3)(i)2.d. d. Worker’s compensation or similar insurance;

Ins 3.39(3)(i)2.e. e. Automobile medical payment insurance;

Ins 3.39(3)(i)2.f. f. Credit-only insurance;

Ins 3.39(3)(i)2.g. g. Coverage for on-site medical clinics; and

Ins 3.39(3)(i)2.h. h. Other similar insurance coverage, specified in federal regulations, under which benefits for medical care are secondary or incidental to other insurance benefits.

Ins 3.39(3)(i)3. 3. “Creditable coverage” shall not include the following benefits if they are provided under a separate policy, certificate or contract of insurance or are otherwise not an integral part of the plan:

Ins 3.39(3)(i)3.a. a. Limited scope dental or vision benefits;

Ins 3.39(3)(i)3.b. b. Benefits for long-term care, nursing home care, home health care, community-based care, or any combination; and

Ins 3.39(3)(i)3.c. c. Such other similar, limited benefits as are specified in federal regulations.

Ins 3.39(3)(i)4. 4. “Creditable coverage” shall not include the following benefits if offered as independent, non-coordinated benefits:

Ins 3.39(3)(i)4.a. a. Coverage only for a specified disease or illness; and

Ins 3.39(3)(i)4.b. b. Hospital indemnity or other fixed indemnity insurance.

Ins 3.39(3)(i)5. 5. “Creditable coverage” shall not include the following if it is offered as a separate policy, certificate or contract of insurance:

Ins 3.39(3)(i)5.a. a. Medicare supplemental health insurance as defined under section 1882 (g) (1) of the social security act;

Ins 3.39(3)(i)5.b. b. Coverage supplemental to the coverage provided under chapter 55 of title 10, United States Code; and

Ins 3.39(3)(i)5.c. c. Similar supplemental coverage provided to coverage under a group health plan.

Ins 3.39(3)(j) (j) “Employee welfare benefit plan” means a plan, fund or program of employee benefits as defined in 29 USC 1002 (Employee Retirement Income Security Act).

Ins 3.39(3)(jm) (jm) “Grievance” means dissatisfaction with the administration, claims practices or provision of services concerning a Medicare select issuer or its network providers that is expressed in writing by a policyholder or certificateholder under a Medicare select policy or certificate.

Ins 3.39(3)(k) (k) “Health care expense” means, for purposes of sub. (16), expense of health maintenance organizations associated with the delivery of health care services that are analogous to incurred losses of insurers.

Ins 3.39(3)(L) (L) “Health maintenance organization (HMO)” means an insurer as defined in s. 609.01 (2), Stats.

Ins 3.39(3)(m) (m) “Hospital” may be defined in relation to its status, facilities and available services or to reflect its accreditation by the Joint Commission on Accreditation of Hospitals, but not more restrictively than as defined in the Medicare program.

Ins 3.39(3)(n) (n) “Hospital confinement indemnity coverage” means coverage as defined in s. Ins 3.27 (4) (b) 6.

Ins 3.39(3)(o) (o) “Insolvency” is defined in s. 600.03 (24), Stats., and means when an issuer, licensed to transact the business of insurance in this state, has had a final order of liquidation entered against it by a court of competent jurisdiction in the issuer’s state of domicile.

Ins 3.39(3)(p) (p) “Issuer” includes insurance companies, fraternal benefit societies, health care service plans, health maintenance organizations and any other entity delivering or issuing for delivery in this state Medicare supplement policies or certificates.

Ins 3.39(3)(pm) (pm) “MACRA” means the Medicare Access and CHIP Reauthorization Act of 2015, PL 114-10, signed April 16, 2015.

Ins 3.39(3)(q) (q) “Medicare” shall be defined in the policy or certificate. “Medicare” may be substantially defined as “The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as Then Constituted or Later Amended,” or “Title I, Part I of Public Law 89-97, as Enacted by the Eighty-Ninth congress of the United States of America and popularly known as the Health Insurance for the Aged Act, as then constituted and any later amendments or substitutes thereof, or words of similar import.

Ins 3.39(3)(r) (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.

Ins 3.39(3)(rm) (rm) “Medicare cost policy” means a Medicare replacement policy 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. A “Medicare cost policy” is issued to an individual who is the policyholder.

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.