Current through Rules and Regulations filed through March 20, 2024
(1) A group policy and any other group
insurance coverage by whatever name called delivered or issued for delivery in
this State or which covers Georgia residents through an out-of-state multiple
employer trust or arrangement, by an insurer, nonprofit health care corporation
or a Health Maintenance Organization (HMO) which provides hospital, surgical,
or major medical coverage, or any combination of these coverages, on an expense
incurred or service provided basis, but not a policy which provides benefits
for specific diseases or for accidental injuries only shall provide that an
insured employee, member, or enrollee whose insurance under the group policy
has been terminated for any reason, including discontinuance of the group
policy in its entirety or with respect to an insured class, and who has been
continuously insured under the group policy (and under any group policy
providing similar benefits which it replaces) for at least six (6) months
immediately prior to termination, shall be entitled to have issued by the
insurer an individual policy of health insurance (hereafter referred to as the
`converted policy'). An employee, member, or enrollee shall not be entitled to
have a converted policy issued if termination of the insurance under the group
policy occurred because (i) the employee, member, or enrollee failed to pay any
required contribution, (ii) any discontinued group coverage was immediately
replaced by similar group coverage unless such person was declined coverage
under the replacing group coverage, or (iii) an HMO enrollee's coverage was
terminated in accordance with Rule
120-2-33-.06 of the Rules and
Regulations of the Georgia Insurance Department. Issuance of a converted policy
shall be subject to the following conditions:
(a) Time Limit: Evidence of Insurability.
Written application for the converted policy shall be made and the first
premium paid to the insurer not later than thirty-one (31) days after such
termination. The converted policy shall be issued without evidence of
insurability.
(b) Effective Date of
Coverage: Scope of Coverage. The effective date of the converted policy shall
be the day following the termination of insurance under the group policy. The
converted policy shall cover the employee, member or enrollee and any
dependents who were covered by the group policy on the date of termination of
insurance.
(c) Optional Coverage.
The insurer shall not be required to issue a converted policy under the plans
specified herein to any person if such person is or could be covered by
Medicare of the United States Social Security Act as added by the Social
Security Amendments of 1965, or as later amended or superseded. Furthermore,
except as required under subparagraph (c)3. below, the insurer shall not be
required to issue a converted policy covering any person if:
1. such person is covered for similar
benefits by an insurer under another hospital, surgical, medical, or major
medical expense insurance policy or hospital or medical service subscriber
contract or medical practice or other prepayment plan or by any other plan or
program; or such person is eligible for similar benefits (whether or not
covered therefore) under any arrangement of coverage for individuals in a
group, whether on an insured or uninsured basis; or similar benefits are
provided for or available to such person, pursuant to or in accordance with the
requirements or any state or federal law; or
2. the benefits provided or available under
the sources referred to in subparagraph 1. above for such person, together with
the benefits provided by the converted policy, would result in overinsurance
according to the insurer's standards. The insurer's standards must bear some
reasonable relationship to actual health care costs in the area in which the
insured lives at the time of conversion and must be filed with the commissioner
prior to their use in denying coverage.
3. Notwithstanding subparagraphs 1. and 2.
above, overinsurance shall not exist, for the purpose of issuing a conversion
policy to any insured person, if no other coverage, including other group
insurances on the person, fully covers preexisting conditions. When full
coverage for preexisting conditions is provided under other similar coverage,
then the insurer may nonrenew the conversion policy or the coverage of any
person insured in accordance with subparagraph (14) of this Rule.
(2) Benefits Offered.
An insurer shall not be required to issue a converted policy which provides
benefits in excess of those provided under the group policy from which
conversion is made.
(3) Preexisting
Condition Provision.
(a) The converted policy
shall not exclude a preexisting condition not excluded by the group policy. The
converted policy shall not exclude disease or physical condition of a
particular employee, member, or enrollee by name or specific
description.
(b) The converted
policy may provide that any hospital, surgical or medical benefits payable
thereunder may be reduced by the amount of any such benefits payable under the
group policy after the termination of the individual's insurance
thereunder.
(c) The converted
policy during the first policy year, may provide that the benefits payable
under the converted policy, together with the benefits payable under the group
policy, shall not exceed those that would have been payable had the
individual's insurance under the group policy remained in force and
effect.
(d) Any period, not to
exceed one year, under the converted policy during which preexisting conditions
are excluded shall be reduced by the time period the employee, member or
enrollee was insured under the group policy from which conversion was
made.
(4) Basic
Hospitalization or Surgical Expense Coverage. Subject to the provisions and
conditions of this Rule, if the group insurance policy from which conversion is
made insured the employee, member, or enrollee for only basic hospitalization
or surgical expense insurance, the employee, member, or enrollee shall have the
option of obtaining a converted policy providing coverage on an expense
incurred basis under any one of the plans meeting the following requirements:
(a) Plan A - Semiprivate hospital daily room
and board charges for a maximum duration of seventy (70) days; miscellaneous
hospital expense benefits of a maximum amount of ten (10) times the semiprivate
hospital daily room and board charges; and surgical operation expenses benefits
according to a surgical schedule consistent with those customarily offered by
the insurer under group or individual health insurance policy and providing a
maximum benefit of Eight Hundred Dollars ($800); or
(b) Plan B - seventy-five percent (75%) of
the semiprivate hospital daily room and board charges for a maximum duration of
seventy (70) days; miscellaneous hospital expense benefits of a maximum amount
of ten (10) times the semiprivate hospital daily room and board charges
payable; and surgical operation expense benefits according to a surgical
schedule consistent with those customarily offered by the insurer under group
or individual health insurance policies and providing a maximum benefit of Six
Hundred Dollars ($600); or
(c) Plan
C - fifty percent (50%) of the semiprivate hospital daily room and board
charges for a maximum duration of seventy (70) days; miscellaneous hospital
benefits for a maximum amount of ten (10) times the semiprivate hospital daily
room and board charges payable; and surgical operation expense benefits
according to a surgical schedule consistent with those customarily offered by
the insurer under group or individual health insurance policies and providing a
maximum benefit of Four Hundred Dollars ($400).
(5) Major Medical Insurance Other Than HMO
Contracts. Subject to the provisions and conditions of this Rule, if the group
insurance policy from which conversion is made insures the employee, member or
enrollee for major medical expense insurance, the employee, member, or enrollee
shall be entitled to obtain a converted policy providing catastrophic or major
medical coverage under a plan meeting all of the following minimum
requirements:
(a) A maximum benefit at least
equal to either, at the option of the insurer, the benefits contained in
subparagraphs 1. or 2. below:
1. The smaller
of the following amounts:
(i) The maximum
benefit provided under the group policy.
(ii) A maximum payment of Two Hundred Fifty
Thousand ($25,000) for each unrelated injury or sickness.
(b) Payment of benefits at the
rate of eight percent (80%) of covered medical expenses which are in excess of
the deductible. Payment of benefits for outpatient treatment of mental illness,
if provided in the converted policy, may be at a lesser rate but not less than
fifty percent (50%).
(c) A cash
deductible for each benefit period shall be not less than the corresponding
deductible in the group policy. If the maximum benefit is determined by
subparagraph 2. above, the insurer may require that the deductible be satisfied
during a period of not less than three (3) months if the deductible is Two
Hundred Dollars ($200) or less, and not less than six (6) months if the
deductible exceeds Two Hundred dollars ($200).
(d) The benefit period shall be each calendar
year when the maximum benefit is determined by subparagraph (a)1. above or
twenty-four (24) months when the maximum benefit is determined by subparagraph
(a)2. above.
(e) The term "covered
medical expenses," as used above, shall include the semiprivate room and board
rate for the hospital in which the individual is confined and twice such amount
for charges in an intensive care unit. Any surgical schedule shall be
consistent with those customarily offered by the insurer under group or
individual major medical health insurance policies.
(6) The conversion privilege required by this
Rule shall, if the group insurance policy insures the employee, member or
enrollee for basic hospital or surgical expense insurance as well as major
medical expense insurance, make available the plans of benefits as set forth in
paragraphs (4) and (5) hereof under one policy.
The insurer may also, in addition to plans of benefits set
forth in paragraphs (4) and (5) above, offer a policy of Comprehensive Medical
Expense Benefits without first dollar coverage. Said policy shall conform to
the requirements of paragraph (5) provided, however, that insurer electing to
provide such a policy shall offer to all potential policyholders a low
deductible option not to exceed One Hundred Dollars ($100), a high deductible
option not to exceed Five Thousand Dollars ($5,000), and other deductible
options between the high and low deductible options.
(7) HMO contracts. Subject to the provisions
and conditions of this rule, a terminated employee who was an enrollee under a
group HMO contract shall have the option of obtaining an individual HMO
contract with all of the same benefits as were provided in the group HMO
contract or any lower option contract then being issued by the HMO as a
conversion contract.
(8) Alternate
Plans. The insurer may, at its option, offer alternate plans for group health
conversion in addition to those required by this Rule.
(9) Retirement Coverage. In the event
coverage would be continued under the group policy on an employee following
retirement prior to the time the employee is or could be covered by medicare,
the employee may elect, in lieu of such continuation of group insurance, to
have the same conversion rights as would apply had the insurance terminated at
retirement by reason of termination of employment or membership.
(10) Reduction of Coverage.
(a) Any converted policy may provide for a
reduction of coverage on any person upon eligibility for coverage under
Medicare of the United States Social Security Act as added by the Social
Security Amendments of 1965 or as later amended or superseded or under any
other state or federal law.
(b) No
converted policy may provide for a reduction of coverage on any person upon
that person's eligibility for coverage under the Medicaid program of the State
of Georgia.
(c) the benefits under
the conversion policy shall be secondary to any group or blanket accident and
sickness contract covering any person insured under the conversion
contract.
(11)
Conversion Privilege Allowed.
(a) Subject to
the conditions set forth above, the conversion privilege shall be exercised at
the insured's option at the time coverage terminates or at the end of any
required period of continuation of coverage under the group policy and shall be
available.
1. to the surviving spouse, if any,
of the employee, member, or enrollee with respect to the spouse and such
children whose coverage under the group policy terminates by reason of such
death otherwise to each surviving child whose coverage under the group policy
terminates by reason of such death, or
2. to the spouse of the employee, member, or
enrollee upon termination of coverage of the spouse, while the employee,
member, or enrollee remains insured under the group policy, by ceasing to be a
qualified family member under the group policy, with respect to the spouse and
such children whose coverage under the group policy terminates at the same
time, or
3. to a child solely upon
termination of the coverage by reason of ceasing to be a qualified family
member under the group policy, or
4. to the former spouse whose coverage under
the group policy terminates by reason of an entry of a valid decree of divorce
between the insured and spouse.
(b) If the circumstances as related above in
subparagraphs (a)1. or 4. occur, the spouse is entitled to have issued, in
addition to the plans specified in this Rule without evidence of insurability,
an individual or family policy then being issued by the insurer. Such
individual or family policy must provide coverage most nearly similar to the
coverage contained in the group policy or any other similar individual or
family policy then being issued by the insurer but may contain lesser coverage
if selected by the spouse.
(12) Benefit Levels. This rule shall not
require that benefits exceed those provided under the converting group plan or
group contract.
(13) Conversion
Premium.
(a) All premium rates and amended
rates must be filed with the Commissioner of Insurance, and must provide for
the payment of monthly premiums. Optional modes of premium payment maybe
offered to the converting employee, member, or enrollee.
(b) The initial premium for the converted
policy for the first twelve (12) months and subsequent renewal premiums shall
be determined in accordance with premium rates applicable to individually
underwritten standard risks, to the age and class of risk of each person to be
covered under the converted policy and to the type and amount of insurance
provided. The experience under converted policies shall not be an acceptable
basis for establishing rates for converted policies.
(c) If an insurer experiences incurred losses
for a period of two (2) years on conversion policies which have been in force
for at least one (1) year, which exceed earned premiums by more than twenty
percent (20%), the insurer may determine and file with the Commissioner of
Insurance amended renewal rates for the subsequent year so that the amended
rates shall produce a future projected loss ratio of not less than one hundred
twenty percent (120%). This subparagraph shall not affect the initial twelve
(12) month premium required under subparagraph (13)(b) above.
(d) Conditions pertaining to health shall not
be an acceptable basis for classification for the purposes of this
Rule.
(14) Information
Requested by Insurer.
(a) A converted policy
may include a provision to allow the insurer to request information in advance
of any premium due date of such policy of any person covered thereunder as to
whether:
1. The insured is covered for similar
benefits by another hospital, surgical, medical or major medical expense
insurance policy or hospital or medical service subscriber contract or medical
practice or other prepayment plan or by any other plan or program;
2. The insured is covered for similar
benefits under any arrangement of coverage for individuals in a group, whether
on an insured or uninsured basis; or
3. Similar benefits are provided for or
available to such person, pursuant to or in accordance with the requirements of
any state or federal law.
(b) The converted policy may provide that the
insurer can refuse to renew the policy or the coverage of any person insured
thereunder for the following reasons only:
1.
Either the benefits provided under the sources referred to in subparagraphs
(a)1. and 2. above for such person, or benefits provided or available under the
sources referred to in subparagraph (a)3. above for such person, together with
the benefits provided by the converted policy, would result in overinsurance
according to the insurer's standards on file with the Georgia Insurance
Department, or the converted policy-holder fails to provide the requested
information;
2. Eligibility of the
insured person for coverage under Medicare (Title XVIII of the United States
Social Security Act as added by the Social Security Amendements of 1965 or as
later amended or superseded) or under any other state or federal law providing
for benefits similar to those provided by the converted policy except that the
conversion policy may not contain any provision purporting to exclude or reduce
coverage provided an otherwise insurable person, solely for the reason that the
person is eligible for or receiving medical assistance, as defined in the
Georgia Medical Assistance Act of 1977.
(c) Any refusal to renew shall be without
prejudice to any valid claim commending while the policy is in force.
(15) Individual Conversion
Policies. Insurers must provide for the issuance of individual conversion
policies. Group conversion policies shall not be issued in lieu of individual
conversion policies. The individual conversion policy is not exempt under
Chapter 120-2-25 of the Rules and Regulations of the Georgia Insurance
Department entitled "Exemption From Filing Certain Life and Health Forms." All
individual conversion policies must be filed for approval in accordance with
O.C.G.A. Section
33-24-9.
(16) Notification. A notification of the
conversion privilege shall be included in each certificate of
coverage.
O.C.G.A. Secs.
33-2-9,
33-24-21.1(Ga. L. 1986, p. 688,
Act 1455).
