KANSAS INSURANCE DEPARTMENT
Proposed Revisions
to K.A.R. 40-4-35
K.A.R. 40-4-35. Medicare supplement policies; minimum
standards; requirements. (a) Sections 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20,
21, 22, 23, and 24 and appendices A, B, and C of the national association of
insurance commissioners’ “model regulation The Kansas
insurance department’s “policy and procedure to
implement the national association of insurance commissioners’ medicare
supplement insurance minimum standards model act ,” July
1998 edition including the appendices, dated May 17, 2005, are
is hereby adopted by reference, subject to the following additions or
exceptions:
(1) Section 3 (B) is hereby not adopted by
reference and is replaced with the following language: “This regulation shall not apply to:
“(1) Individual
policies or contracts issued pursuant to a conversion privilege under a policy
or contract of group or individual insurance when the group or individual policy
or contract includes provisions which are inconsistent with the requirements of
this regulation.”
(2) Section 3 is hereby amended by the
addition of subsection C, which shall read as follows: “This regulation shall
supersede any other
(3) Section 4(H) is not adopted by reference
and is replaced with the following language:
“‘Insolvency’ means that an insurer licensed to transact the business of
insurance in this state is unable to pay its obligations when they are due, or
when its admitted assets do not exceed its liabilities plus the greater of:
“(1) any capital and surplus required by law for its organization; or
“(2) the total par of stated value of its authorized and issued
capital stock.
“For the
purposes of this subsection ‘liabilities’ shall include, but not be limited to,
reserves required by statute or by insurance department general regulations or
by specific requirement imposed by the commissioner upon a subject company at
the time of admission or subsequent thereto.”
(4) Section 4(K) is amended by replacing the
phrase “Section 1859 found in Title IV, Subtitle A, Chapter 1 of P.L. 105-33”
with the phrase “42 U.S.C. 1395w-28(b)(1).”
(5) Section 7(A)(3) is hereby amended by
replacing the last sentence of this paragraph with the following language:
“Premiums may be modified to correspond with such changes, subject to the requirements
of Section 15(B) of this regulation or any applicable statutory requirements.”
(6) Section 7(B)(2) is not adopted by reference
and shall be replaced with the following language: “Coverage for all of the medicare part A
inpatient hospital deductible amount.”
(7) Section 8(A)(3) is hereby amended by
replacing the last sentence of this paragraph with the following language: “Premiums may be modified to correspond with
such changes, subject to the requirements of Section 15(B) of this regulation
or any applicable statutory requirements.”
(8) Section
8 (A)(7)(c) is moved to become new Section 8(A)(7)(d).
(9) Section
8(A)(7)(c) is new and reads as follows: “Each medicare supplement policy shall
provide that benefits and premiums under the policy shall be suspended (for the
period provided by federal regulation) at the request of the policyholder if
the policyholder 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 certificate holder loses coverage under the group health plan,
the policy shall be automatically reinstituted (effective as of the date of
loss of coverage) if the policyholder 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 entitlement.”
(10) Section
8(B)(5) is not adopted by reference and is replaced with the following
language: “Coverage for the coinsurance
amount (or in the case of hospital outpatient department services under a
prospective payment system, the copayment amount) of medicare eligible expenses
under part B regardless of hospital confinement, subject to the medicare part B
deductible.”
(11) Section 8(C)(9)(b) is not adopted by reference and is replaced
with the following language: “Any one or combination of the following
preventive screening tests or preventive services, the frequency of which is
considered medically appropriate:
“(1) Digital rectal examination;
“(2) dipstick urinalysis for hematuria,
bacteriuria and proteinuria;
“(3) pure tone (air only) hearing screening
test, administered or ordered by a physician;
“(4) serum cholesterol screening (every five (5)
years);
“(5) thyroid function test;
“(6) diabetes screening.”
(12) Section
8(C)(9)(c) is not adopted by reference and is replaced with the following
language: “Tetanus and diphtheria booster (every ten (10) years).”
(13) Section
11(A) is not adopted by reference and is replaced with the following
language: “An issuer shall not deny or
condition the issuance or effectiveness of any medicare supplement policy or certificate
available for sale in this state, nor discriminate in the pricing of a policy
or certificate because of health status, claims experience, receipt of health
care, or medical condition of an applicant in the case of an application for a
policy or certificate that is submitted prior to or during the six-month period
beginning with the first day of the first month in which an individual is both
65 years of age or older and enrolled for benefits under medicare part B, or
becomes enrolled for benefits under medicare part B without regard to age. Each medicare supplement policy and
certificate currently available from an issuer shall be made available to all
applicants who qualify under this subsection without regard to age.”
(14) Section
12(A)(1) is not adopted by reference and is replaced with the following
language: “Eligible persons are those
individuals described in Subsection B who, subject to Subsection B(2)(b), apply
to enroll under the policy not later than sixty-three (63) days after the date
of termination of enrollment described in subsection B, and who submit evidence
of the date of termination or disenrollment with the application for a medicare
supplement policy.”
(15) Section
12(B)(1), (2), and (3) are not adopted by reference and shall be replaced with
the following language: “Eligible
persons. An eligible person is an
individual described in any of the following paragraphs:
“(1) The individual is enrolled as an employee,
retiree or dependent under an employee welfare benefit plan including federal
or state that provides health benefits that supplement the benefits under
medicare and the plan terminates or the plan ceases to provide some or all such
supplemental health benefits to the individual; or the individual is enrolled as
an employee, retiree or dependent under an employee welfare benefit plan
including federal or state plans that is primary to medicare and the plan
terminates or the plan ceases to provide some or all health benefits to the
individual because the individual leaves the plan.
“(2) The
individual is enrolled with a Medicare+Choice organization under a
Medicare+Choice plan under part C of medicare, or the individual is 65 years of
age or older and is enrolled with a “Program of All-inclusive Care For the
Elderly” (PACE) provider under Section 1894 of the Social Security Act, and
there are circumstances similar to those described below that would permit
discontinuance of the individual’s enrollment with such provider if such
individual were enrolled in a Medicare+Choice Plan and any of the following
circumstances apply:
“(A) The
organization’s or plan’s certification has been terminated or the organization
has terminated or has notified the individual of an impending termination of
such certification or otherwise discontinued providing the plan in the area in
which the individual resides;
“(B) The
certification of the organization or plan under this part has been terminated,
or the organization or plan has notified the individual of an impending
termination of such certification;
“ (C) The
individual is no longer eligible to elect the plan because of a change in the
individual’s place of residence or other change in circumstances specified by
the secretary, but not including termination of the individual’s enrollment on
the basis described in section 1851(g)(3)(B) of the federal Social Security Act
(where the individual has not paid premiums on a timely basis or has engaged in
disruptive behavior as specified in standards under section 1856), or the plan
is terminated for all individuals within a residence area;
“ (D) The
individual demonstrates, in accordance with guidelines established by the
secretary that:
“(i) The organization offering the plan
substantially violated a material provision of the organization’s contract
under this part in relation to the individual, including the failure to provide
an enrollee on a timely basis medically necessary care for which benefits are
available under the plan or the failure to provide such covered care in
accordance with applicable quality standards; or
“(ii) The organization, or agent or other entity
acting on the organization’s behalf, materially misrepresented the plan’s
provisions in marketing the plan to the individual; or
“(E) The individual meets such other exceptional
conditions as the secretary may provide; or
“(F)(i) An
individual described in Subsection A may elect to apply Subsection A by
substituting, for the date of termination of enrollment, the date on which the
individual was notified by the Medicare+Choice organization of the impending
termination or discontinuance of the Medicare+Choice plan it offers in the area
in which the individual resides, but only if the individual disenrolls from the
plan as a result of such notification.
“(ii) In
the case of an individual making the election in Subparagraph (F)(i) above, the
issuer involved shall accept the application of the individual submitted before
the date of termination of enrollment, but the coverage under Subsection A
shall only become effective upon termination of coverage under the
Medicare+Choice plan involved.
“(3)(a) The
individual is enrolled with:
“(1) An eligible organization under a contract
under section 1876 (medicare risk or cost);
“(2) A similar organization operating under
demonstration project authority, effective for periods before April 1, 1999;
“(3) An
organization under an agreement under section 1833(a)(1)(A) (health care
prepayment plan); or
“(4) An organization under a medicare select
policy; and
“(b) The enrollment ceases under the same
circumstances that would permit discontinuance of an individual’s election of
coverage under section 12(B)(2), as amended by paragraph (a)(15) of K.A.R.
40-4-35.”
(16) Section 12(B)(5)(a)
is not adopted by reference and is replaced with the following language: “The
individual was enrolled under a Medicare supplement policy, or a Medicare
select policy and terminates enrollment and subsequently enrolls, for the first
time, with any Medicare+Choice organization under a Medicare+Choice plan under
Part C, any eligible organization under a contract under Section 1876 (Medicare
risk or cost), any similar organization operating under demonstration project
authority, any PACE program under Section 1894 of the Social Security Act, an
organization under an agreement under Section 1833 (a)(1) (A) (health care
prepayment plan), or Medicare Select policy; and.”
(17) Section 12(B)(6) is not adopted by reference and is replaced with
the following language: “The individual
upon first becoming enrolled in medicare part B for benefits, enrolls in a
Medicare+Choice plan under part C of medicare, or in a PACE program
under Section 1894 of the Social Security Act, and disenrolls from the plan or
program by not later than twelve (12) months after the effective date of
enrollment.”
(18) Section
12(B)(7) is new and reads as follows:
“An individual who loses eligibility for health benefits under Title XIX
of the Social Security Act (Medicaid).”
(19) Section
12 (C) is not adopted by reference and is replaced with the following
language: “The Medicare supplement
policy or medicare select policy to which eligible persons are entitled under
are:
“(1) Section 12B(1), (2), (3) and (4) is
Medicare supplement policy or Medicare select policy which has a benefit
package classified as Plan, A, B, C, or F offered by any issuer;
“(2) Section 12B(5) is the same as Medicare
supplement policy or medicare select policy in which the individual was most
recently previously enrolled, if available from the same issuer, or, if not so
available, a policy described in Subsection (C)(1);
“(3) Section 12B(6) and (7) shall include any
Medicare supplement policy or medicare select policy offered by any issuer.”
(20)
Section 14(A)(1)(a)(i) is amended with
the following additional language:
“Including group policies that are issued as a result of solicitations
of individuals through the mail or by mass media (including both print and
broadcast advertising).”
(21) Section
14(C) is amended with the following additional language: “An issuer of medicare supplement policies
and certificates shall combine their prestandardized medicare supplement policy
forms for rating purposes. However, an
issuer shall not combine group prestandardized policy forms and individual
prestandardized policy forms.”
(22) Section
15(B) is hereby amended by the addition of the following language: “An issuer shall not charge individuals who
become eligible for medicare by reason of disability or End Stage Renal Disease
(ESRD) after April 28, 1996, who were enrolled in any medicare supplement plan
and who are under age 65, premium rates for any medicare supplement insurance
benefit plan offered by the issuer that exceed the issuer's premium rates
charged for such plan to individuals who are age 65. Individuals under age 65 who become eligible
for medicare by reason of disability or End Stage Renal Disease (ESRD) prior to
April 28, 1996 and who enrolled in any medicare supplement plan prior to October
28, 1996, shall be charged premium rates for any medicare supplement insurance
benefit plan as follows:
“(1) On the insured's first policy anniversary date on or after April
29, 1999, premium rates which do not exceed the rate charged for such plan to
medicare supplement insureds who are age 80.
“(2) On the insured's first policy anniversary
date on or after April 29, 2000, premium rates for any medicare supplement
insurance benefit plan that do not exceed the rate charged for such plan to
medicare supplement insureds who are age 65.”
(23) Section 15(C)(2) is not adopted by reference
and is replaced with the following language:
“With the approval of the commissioner, any issuer may offer up to three
(3) additional policy forms or certificate forms of the same type for the same
standard medicare supplement benefit plan.
One additional form may be offered for each of the following cases:
“(a) The inclusion of new or innovative benefits;
“(b) The addition of either direct response or agent marketing
methods; or
“(c) The addition of either guaranteed issue or
underwritten coverage.”
(24) Section
17(A)(5) is amended with the following language added: “Any refund made pursuant to this section
shall be paid directly to the applicant by the insurer in a timely manner. The notice shall be printed in not less than
10-point type and shall be printed in boldface type or in some other manner
that distinguishes it from the print otherwise appearing in the policy.”
(25) Section
17(C)(4) is amended with the following
language:
(A) Adding to the existing phrase “Medical
Expenses: Part B coinsurance (generally 20% of medicare-approved expenses)” the
following language: “or, in the case of hospital outpatient department services
under a prospective payment system, applicable copayments.”
(B) substituting “[$1530]” for “[$1500]” in the outline of the
coverage;
(C) replacing the phrase “The Medicare Handbook” with “Medicare and
You”;
(D) substituting “$250” for “$2500”;
(E) changing the following amounts of annual
deductible in high deductible plans as follows:
(i) “$764” to “$776”;
(ii) “$191” to “$194”;
(iii) “$382” to “$388”.
(F) substituting “$2500” for “$2,50” in “Plan H Other Benefits--Not
Covered by Medicare” in the phrase “Next $250 each calendar year”; and
(G) substituting “$1250” for “$2,50” in “Plan
I Other Benefits--Not Covered by Medicare” in the phrase “Next $250 each
calendar year.”
(26) Section 17(C) is hereby amended by the addition of the following:
“(5) Issuers shall provide a description of
policy provisions relating to renewability, cancellation, or continuation of
coverage, including any reservation of rights to change premium.
“(6) The amount of premium for this policy. The premiums for the policy or certificate
shall be shown separately from the premiums for any optional or supplemental
riders.
“(7) The name and address of the insurance agent, or the employee of
the insurer who assumes responsibility for completing the outline.”
(27) Section
18(E) is hereby amended by the deletion of paragraphs (1) and (2) relating to
preexisting conditions, in their entirety.
(b) An issuer shall
not apply more stringent underwriting standards to individuals under the age of
65 who are applying for medicare supplement coverage outside of their open
enrollment period than would be applied to individuals over the age of 65 who
are applying for coverage outside of their open enrollment period. This regulation shall supersede any other
(c) If
any provision of the document adopted in subsection (a) or the application of
any provision of this document to any person or circumstance is for any reason
deemed invalid, the remainder of this regulation and the application of the
provision to other persons or circumstances shall not be affected. (Authorized
by K.S.A. 40-103, K.S.A. 40-2404a, and K.S.A. 40-2221; implementing
K.S.A. 40-2215, K.S.A. 40-2221, and K.S.A. 40-2403; effective May
1, 1982; amended May 1, 1984; amended May 1, 1986; effective, T-40-12-16-88,
Dec. 16, 1988; amended, T-40-3-31-89, March 31, 1989; amended June 5, 1989;
amended Oct. 15, 1990; amended April 1, 1992; amended May 24, 1996; amended,
T-40-3-18-99, April 29, 1999; amended Aug. 20, 1999; amended Jan. 1, 2001;
amended Sept. 7, 2001; amended, T-_____________, _______________; amended
P-______________.)