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Virginia Administrative Code
11/23/2024

Chapter 150. Rules to Implement Transitional Requirements for the Conversion of Medicare Supplement Insurance Benefits and Premiums to Conform to Medicare Program Revisions

14VAC5-150-10. Purpose.

This chapter (14VAC5-150-10 et seq.) is designed to:

1. Ensure the orderly implementation and conversion of Medicare supplement insurance benefits and premiums due to changes in the federal Medicare program;

2. Provide for the reasonable standardization of the coverage, terms and benefits of Medicare supplement policies or contracts;

3. Facilitate public understanding of such policies or contracts;

4. Eliminate provisions contained in such policies or contracts which may be misleading or confusing in connection with the purchase of such policies or contracts;

5. Modify or eliminate policy or contract provisions which may duplicate medicare benefits;

6. Provide full disclosure of policy or contract benefits and benefit changes; and

7. Provide for refunds of premiums associated with benefits duplicating medicare program benefits.

Statutory Authority

§§ 38.2-223, 38.2-3516 through 38.2-3520, 38.2-3600 through 38.2-3607 and 38.2-514 of the Code of Virginia.

Historical Notes

Derived from Regulation 32, Case No. INS870293, § 2, eff. August 31, 1988.

14VAC5-150-20. [Reserved]. (Reserved)

14VAC5-150-30. Applicability and scope.

This chapter (14VAC5-150-10 et seq.) shall take precedence over other rules and requirements relating to medicare supplement policies or contracts only to the extent necessary to assure that benefits are not duplicated, that applicants receive adequate notice and disclosure of changes in medicare supplement policies and contracts, that appropriate premium adjustments are made in a timely manner, and that premiums are reasonable in relation to benefits.

This chapter shall apply to:

1. All Medicare supplement policies and contracts delivered, or issued for delivery within this Commonwealth, or which are otherwise subject to the jurisdiction of this Commonwealth, and

2. All certificates issued under group medicare supplement policies as provided in 1 above.

This chapter applies to all Medicare supplement policies, contracts, and certificates as described in 1 and 2, above, delivered, or issued for delivery on or after the effective date hereof. In addition, 14VAC5-150-50 applies to all medicare supplement policies, contracts and certificates as described in 1 and 2, above, in effect on August 31, 1988.

Statutory Authority

§§ 38.2-223, 38.2-3516 through 38.2-3520, 38.2-3600 through 38.2-3607 and 38.2-514 of the Code of Virginia.

Historical Notes

Derived from Regulation 32, Case No. INS870293, § 4, eff. August 31, 1988.

14VAC5-150-40. Definitions.

For purposes of this chapter (14VAC5-150-10 et seq.):

"Applicant" means:

1. In the case of an individual Medicare supplement policy or contract, the person who seeks to contract for insurance benefits, and

2. In the case of a group Medicare supplement policy or contract, the proposed certificateholder.

"Certificate" means any certificate issued under a group Medicare supplement policy.

"Medicare supplement policy" means an individual or group policy of accident and sickness insurance or an individual or group subscriber contract of a health services plan, or health maintenance organization or a certificate issued under a group policy or group subscriber contract, offered to individuals who are entitled to have payment made under Medicare, which is designed primarily to supplement Medicare by providing benefits for payment of hospital, medical or surgical expenses, or is advertised, marketed or otherwise purported to be a supplement to Medicare. Such term shall not include:

1. A policy or contract of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or combination thereof, for employees or former employees, or combination thereof, or for members or former members, or combination thereof, of the labor organizations; or

2. A policy or contract of any professional, trade or occupational association for its members or former or retired members, or combination thereof, if such association:

a. Is composed of individuals all of whom are actively engaged in the same profession, trade or occupation;

b. Has been maintained in good faith for purposes other than obtaining insurance; and

c. Has been in existence for at least two years prior to the date of its initial offering of such policy or plan to its members.

Statutory Authority

§§ 38.2-223, 38.2-3516 through 38.2-3520, 38.2-3600 through 38.2-3607 and 38.2-514 of the Code of Virginia.

Historical Notes

Derived from Regulation 32, Case No. INS870293, § 5, eff. August 31, 1988.

14VAC5-150-50. Benefit conversion requirements.

A. Effective 60 days after enactment of federal law mandating Medicare benefit changes, no Medicare supplement insurance policy, contract, or certificate subject to this chapter, in effect on the effective date of this chapter (14VAC5-150-10 et seq.) shall contain benefits which duplicate benefits provided by Medicare.

B. General requirements.

1. On the later of:

a. Thirty days prior to the effective date of Medicare benefit changes, or

b. Sixty days after enactment of federal law mandating Medicare benefit changes,

every insurer, health services plan, health maintenance organization or other entity providing Medicare supplement insurance or benefits shall notify its policyholders, contract holders, and certificate holders of modifications it has made to Medicare supplement insurance policies or contracts. Such notice shall be in a format prescribed in Exhibit A and be written in outline form in clear and simple terms so as to facilitate comprehension. Such notice shall not contain or be accompanied by any solicitation.

2. No modifications to an existing Medicare supplement contract or policy shall be made at the time of or in connection with the notice requirements of this chapter except to the extent necessary to eliminate duplication of Medicare benefits and any modifications necessary under the policy or contract to provide indexed benefit adjustment.

3. As soon as practicable, but no longer than 60 days after the effective date of the Medicare benefit changes, every insurer, health services plan, health maintenance organization or other entity providing Medicare supplement insurance or contracts in this Commonwealth shall file with the Commission, in accordance with the applicable filing procedures of this Commonwealth:

a. Appropriate premium adjustments necessary to produce loss ratios as originally anticipated for the applicable policies or contracts. Such supporting documents as necessary to justify the adjustment shall accompany the filing.

b. Any appropriate riders, endorsements, or policy forms needed to accomplish the Medicare supplement insurance modifications necessary to eliminate benefit duplications with Medicare. Any such riders, endorsements, or policy forms shall provide a clear description of the medicare supplement benefits provided by the policy or contract.

4. Upon satisfying the filing and approval requirements of this Commonwealth, every insurer, health services plan, health maintenance organization or other entity providing Medicare supplement insurance shall provide each covered person with any rider, endorsement or policy form necessary to eliminate any benefit duplications under the policy or contract with benefits provided by Medicare.

5. No insurer, health services plan, health maintenance organization or other entity shall require any person covered under a Medicare supplement policy or contract which was in effect on August 31, 1988, to purchase additional coverage under such policy or contract unless such additional coverage was provided for in the policy contract.

6. Every insurer, health services plan, health maintenance organization or other entity providing Medicare supplement insurance shall make such premium adjustments as are necessary to produce an expected loss ratio under such policy or contract as will conform with minimum loss ratio standards for Medicare supplement policies and which is expected to result in a loss ratio at least as great as that originally anticipated by the insurer, health services plan, health maintenance organization or other entity for such medicare supplement insurance policies or contracts. 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. Premium adjustments shall be in the form of refunds or premium credits and shall be made no later than upon renewal if credit is given, or within 60 days of the renewal date if a refund is provided to the premium payor.

Statutory Authority

§§ 38.2-223, 38.2-3516 through 38.2-3520, 38.2-3600 through 38.2-3607 and 38.2-514 of the Code of Virginia.

Historical Notes

Derived from Regulation 32, Case No. INS870293, § 6, eff. August 31, 1988.

14VAC5-150-60. Requirements for new policies and certificates.

A. Effective 60 days after enactment of federal law mandating Medicare benefit changes no medicare supplement insurance policy, contract, or certificate shall be issued or issued for delivery in this Commonwealth which provides benefits which duplicate benefits provided by Medicare. No such policy, contract or certificate shall provide less benefits than those required under Chapter 36 (§ 38.2-3600 et seq.) of Title 38.2, or existing, Rules Governing the Implementation of the Individual Accident and Sickness Insurance Minimum Standards Act (Chapter 140, 14VAC5-140-10 et seq. of this title) with respect to medicare supplement policies except where duplication of Medicare benefits would result.

B. General requirements.

1. Within 90 days of August 31, 1988, every insurer, health services plan, health maintenance organization or other entity required to file its policies or contracts with the Commission shall file new medicare supplement insurance policies or contracts which eliminate any duplication of medicare supplement benefits with benefits provided by Medicare and which provide a clear description of the policy or contract benefit.

2. The filing required under subdivision 1 above shall provide for loss ratios which are in compliance with all statutory or regulatory requirements.

3. Every applicant for a Medicare supplement insurance policy, contract, or certificate shall be provided with an outline of coverage which in simple accurate terms describes benefits provided by Medicare and the medicare supplement policy or contract along with benefit limitations.

Statutory Authority

§§ 38.2-223, 38.2-3516 through 38.2-3520, 38.2-3600 through 38.2-3607 and 38.2-514 of the Code of Virginia.

Historical Notes

Derived from Regulation 32, Case No. INS870293, § 7, eff. August 31, 1988.

14VAC5-150-70. Buyer's guide.

No insurer, health services plan, health maintenance organization or other entity shall make use of or otherwise disseminate any buyer's guide or informational brochure which does not accurately outline current Medicare benefits.

Statutory Authority

§§ 38.2-223, 38.2-3516 through 38.2-3520, 38.2-3600 through 38.2-3607 and 38.2-514 of the Code of Virginia.

Historical Notes

Derived from Regulation 32, Case No. INS870293, § 8, eff. August 31, 1988.

14VAC5-150-80. Severability.

If any provision of this chapter (14VAC5-150-10 et seq.), or the application thereof to any person or circumstances is for any reason held to be invalid, the remainder of the chapter and the application of such provision to other persons or circumstances shall not be affected thereby.

Statutory Authority

§§ 38.2-223, 38.2-3516 through 38.2-3520, 38.2-3600 through 38.2-3607 and 38.2-514 of the Code of Virginia.

Historical Notes

Derived from Regulation 32, Case No. INS870293, § 9, eff. August 31, 1988.

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