Current through Rules and Regulations filed through March 20, 2024
(1) Definitions.
For the purpose of this Rule, the following definitions shall apply:
(a) "Continuation Coverage" shall mean any
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986
(COBRA) or continuation benefits under O.C.G.A. §
33-24-21.1 or §
33-24-21.2.
(b) "Eligible Dependent" shall mean a
dependent of a qualifying eligible individual, including a spouse, covered
under the qualifying eligible individual's most recent group health insurance
policy or contract, or continuation coverage thereof, who meets the
requirements of paragraphs (g) 1. through 5. Eligible dependents shall include
any dependents who would otherwise not qualify for coverage because they have
less than 18 months previous creditable coverage, provided:
1. They were born, adopted, or placed for
adoption during coverage under the most recent group policy or continuation
coverage of the qualifying eligible individual: and
2. They were enrolled under such coverage
within thirty-one (31) days of birth, adoption, or placement for
adoption.
(c) "Group
Pool Rate" shall mean the average base rate for employees, members, and
enrollees, or dependents of such individuals, for all groups in the insurer's
group pool in this state, determined over a period of twelve months and
adjusted for benefit design but unadjusted for any demographic and experience
factors relating to qualified eligible individuals in the enhanced conversion
pool. In determining pool rates, the insurer must take into account all actual
and anticipated experience data of the entire group pool itself (excluding the
enhanced conversion pool) as well as other experience data of the insurer or
data available generally, and must apply recognized actuarial practices as to
credibility, trend factors, expense factors, and margins. Insurers shall use
pool rates to determine premiums for all qualifying eligible individuals
enrolling in enhanced conversion coverage.
(d) "Managed Care Organization" shall mean an
insurer which is a health maintenance organization or a provider-sponsored
health care corporation.
(e) "Model
Low Option" shall mean a minimum benefit option for use by insurers or managed
care organizations for the purpose of offering a choice of coverage that is
more limited in nature than the model standard option, but which constitutes
creditable coverage. The model low option shall be associated with the policy
form template prescribed in Form GHBAS-1 for managed care
organizations, Form GHIAS-2 for coverage under a preferred
provider arrangement, or Form GHIAS-1 for all other types of
coverage, and with a schedule of benefits prescribed by Plan C in Form
GHBAS-S for managed care organizations or by Plan A in Form
GHIAS-S for all other types of coverage.
(f) "Model Standard Option" shall mean a
minimum benefit option for use by insurers or managed care organizations for
the purpose of offering comprehensive coverage comparable to a standard option
of coverage in the individual health insurance market in this state. The model
standard option shall be associated with the policy form template prescribed in
Form GHBAS-1 for managed care organizations, Form
GHIAS-2 for coverage under a preferred provider arrangement,
or Form GHIAS-1 for all other types of coverage, and with a
schedule of benefits prescribed by Plan D in Form GHBAS-S for
managed care organizations or by Plan B in Form GHIAS-S for
all other types of coverage.
(g)
"Qualifying Eligible Individual" shall mean any Georgia domiciliary who meets
all of the following:
1. As of the date on
which the individual seeks coverage under this section, the aggregate period of
previous creditable coverage is 18 months or more;
2. The individual's most recent coverage was
under a group plan, or continuation coverage thereof;
3. The individual's insurance under the group
plan has been terminated for any reason, including discontinuance of the group
plan in its entirety or with respect to an insured class, except for nonpayment
of premium contribution pertaining to the qualifying eligible
individual;
4. With regard to such
an individual's coverage under a group plan or continuation thereof, a
qualifying event has occurred on or after October 30, 1997;
5. The individual is not eligible for, nor
has declined, any of the following:
(i)
Coverage under a group health insurance policy or contract, or other employer
sponsored health benefit arrangement, including continuation coverage under
COBRA or O.C.G.A. §§
33-24-21.1 or
33-24-21.2;
(ii) Medicare; or
(iii) The state plan under Medicaid or any
successor program;
6.
The individual is not enrolled in or covered under any other creditable health
insurance coverage, including individual health insurance policies or blanket
accident and sickness insurance pertaining to student health coverage;
and
7. The individual is one of the
following:
(i) A current or former employee,
member, or enrollee covered under the group health policy or contract and
continuation thereof, if applicable;
(ii) The surviving spouse, if any, of a
deceased covered employee, member, or enrollee, with or without
dependents;
(iii) The spouse, or a
former spouse, with or without dependents, of a covered employee, member, or
enrollee upon a qualifying event of the spouse while the employee, member, or
enrollee remains insured under the group policy or continuation thereof, by
ceasing to be a qualified family member under the group policy, such as a
result of a valid decree of divorce; or
(iv) An otherwise eligible dependent upon
reaching limiting age or otherwise losing dependent status under the group
policy or continuation thereof, or under the enhanced conversion policy of
another qualifying eligible individual.
(h) "Qualifying Event" shall mean loss of
creditable coverage resulting from either:
(i)
Exhaustion of continuation coverage to the maximum extent eligible under
federal or state law; or
(ii)
Termination of coverage under a group health insurance policy or contract, in
the event such a qualifying eligible individual is not eligible for any
continuation coverage.
(I) "Schedule of
Benefits" shall mean the outline of benefit levels for a policy, including but
not limited to the types of benefits covered and associated cost-sharing
provisions.
(2) Conversion Privilege. A group policy or
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 (including a
managed care organization) which provides creditable coverage for hospital,
surgical or major medical benefits, or any combination of these benefits, on an
expense incurred or service provided basis, but not a policy which provides
limited benefits as defined in O.C.G.A. §
33-24-21.1(i),
shall provide that all qualifying eligible individuals and eligible dependents
are entitled to have issued by the insurer a policy of health insurance
(hereafter referred to as the "enhanced conversion policy").
(3) Notification and Application.
(a) Time Limit for Exercising Privilege. A
substantially completed application for the converted policy shall be filed
with, and the first premium paid to, the insurer not later than sixty-three
(63) consecutive days after a qualifying event, or the date of notice of rights
from the insurer following a qualifying event, whichever is later. An insurer
is required to issue, either directly or through an administrator or group
policyholder entrusted with the distribution of notices, a notice of conversion
privileges under this Rule:
(i) With regard to
qualifying eligible individuals or dependents exhausting continuation coverage,
as soon as the insurer, administrator, or group policyholder receive payment
for the final period of continuation coverage prior to exhaustion, but in no
event later than fourteen (14) days after exhaustion of coverage;
(ii) With regard to dependents covered under
an enhanced conversion option and reaching limiting age, no later than fourteen
(14) days after the last day of the month in which the dependent no longer
becomes eligible for dependent coverage;
(iii) With regard to qualifying eligible
individuals or dependents not eligible for continuation, no later than fourteen
(14) days from the date the insurer, administrator, or group policyholder
obtains information as to the termination of coverage under the group
policy;
(iv) By first class mail to
the last known address of the qualifying eligible individual, available in
records held by the insurer, administrator, or group policyholder;
and
(v) With an application for
coverage, information on the amount of the first premium payment required to
effectuate coverage, as well as an explanation of the insured's enhanced
conversion privilege.
(b) Notification of Individuals at Same
Address. Issuance of notice to the last known address of a qualifying eligible
individual shall satisfy the notice requirement for all qualifying eligible
individuals and qualifying dependents last known to have resided at that
address.
(c) Responsibility for
Notification. In all cases, the insurer is responsible for the timely offer of
enhanced conversion policies, and compliance with the notification requirements
of this Rule, whether or not there is a written agreement whereby a group
policyholder or other administrator or third party assumes such responsibility.
Nothing in this paragraph shall prevent an insurer from making a written
agreement with a group policyholder or other administrator or third party for
the administration or delivery of such notices. For the purposes of eliminating
duplication of notices and assuring notification of qualifying eligible
individuals, delivery of notice by either the insurer, an administrator, or the
group policyholder in accordance with this Rule shall satisfy the requirement
of this Rule paragraph.
(d) Model
Notice. Insurers may use the following model notice for an explanation of
conversion privileges:
OFFICIAL NOTICE OF ENHANCED CONVERSION
RIGHTS
"Under Georgia law, you, and any qualifying dependents, are
entitled to elect one of at least two benefit options provided by us. Enclosed
with this notice you will find information on the benefit options available to
you, as well as premium information. Upon exhaustion of continuation coverage
(whether through COBRA or other extension of benefits under state law), loss of
group coverage if ineligible for continuation, or loss of enhanced conversion
policy coverage by reason of losing dependent status, you are eligible for
these benefits. However, we must receive a completed application and an initial
premium payment no later than sixty-three (63) consecutive days after the date
of exhaustion or the date of this notice, whichever is later. You may enroll
any dependent who was covered under continuation with you.
If we do not receive a completed application from you within
sixtythree (63) days of the date of this notice, or the date you lost coverage,
whichever is later, you will have forfeited your privileges to this enhanced
conversion product, and subsequently to any portability rights offered by state
law.
Upon submission of the completed application with premium
payment, your coverage will become effective on the date continuation coverage
was exhausted, or, if ineligible for continuation, the date group coverage was
terminated.
Your rights to an enhanced conversion policy guarantee you
and any qualified dependents you may have comprehensive coverage without any
pre-existing condition exclusions. Although you also have the right to seek
individual health insurance coverage elsewhere, with this or another insurer,
Georgia law does not guarantee you the same protections offered through this
enhanced conversion product."
(e) Exception to Use of Model Notice and
Application. An insurer may use a different notice, provided that the document
is substantially similar to the model notice and is filed for approval by the
Commissioner with the conversion policy form.
(f) Notice After Extention of Continuation.
Upon exhaustion of extension, the provisions of this Rule shall apply with
regard to timely notice and application.
(4) Extension Coverage in Lieu of Approved
Enhanced Conversion Policies.
(a) In General.
In the event an insurer has not filed enhanced conversion policy forms for
approval as required by this Rule, or has not obtained approval by the
Commissioner for such filed policy forms, the insurer must provide all
qualifying eligible individuals the opportunity for an extension of group or
continuation coverage up until the last day of the month following the date
enhanced conversion policies are approved by the Commissioner. All benefit and
rating requirements under COBRA or state extension of benefits shall apply to
such extension coverage.
(b)
Notification. The insurer must provide notice to all qualifying eligible
individuals regarding the group plan or continuation extension in accordance
with guidelines for notice of conversion privileges of this Rule. However,
notice of extension privileges as permitted in this paragraph is not, in any
case, required to be issued prior to January 1, 1998. Such notice must include
the following information:
1. Eligibility
criteria for both extension and enhanced conversion policies;
2. Premium requirements;
3. Assurances that benefits are continued as
of January 1, 1998, or on the date of a qualifying event, whichever is later;
and
4. Transition procedures
between extension and enhanced conversion policies.
(c) Model Notice. Notice must include
language that is identical or substantially similar to the disclosure below:
"Georgia law allows you to convert to other health insurance
coverage offered by us when you exhaust continuation coverage to the maximum
extent, or when you terminate employment and are ineligible for continuation
benefits. Due to timing issues associated with recently enacted legislation, as
of the date we issue this notice to you our enhanced conversion products are
unavailable. However, we are providing you with an automatic extension of your
group or continuation benefits, subject to timely payment of premium for
upcoming benefit months and any past periods of coverage. If you should choose
to renew your coverage through this extension, your extension will terminate on
the last day of the month our enhanced conversion products are available. At
that time, you will have the opportunity, within sixty-three (63) days of the
notice of termination, to enroll yourself and any eligible dependents in an
enhanced conversion product. You must renew coverage for any eligible
dependents under this extension of continuation in order for them to be
eligible for such enhanced conversion products.
"The enclosed billing reflects extension coverage available
to you, if you should choose to elect it. You will forfeit your rights to any
extension of coverage described in this notice and any opportunity to purchase
enhanced conversion policies later if you fail to elect and pay for this
extension of group or continuation benefits within sixty-three (63) days of the
date of this notice. If you have additional questions, you may call us at
__________ or contact the Office of Commissioner of Insurance, John W.
Oxendine, Consumer Services Division, at (404) 656-2070 or
1-800-656-2298."
(d)
Alternate Extension Coverage. Nothing in this Rule shall prevent an insurer
from offering any less comprehensive group plan, in addition to the group
coverage which was terminated or continued, as a low option extension. However,
in no case may an insurer refuse to extend a qualifying eligible individual's
previous continuation or group coverage until approved enhanced conversion
policies become available pursuant to this Rule. Election of low option
extension coverage by an individual shall not preclude conversion
privileges.
(e) Effective Date of
Coverage. Coverage under an extension or continuation of group coverage as
required by this paragraph must become effective on the date of a qualifying
event. However, insurers are not required to issue coverage under such
extension for periods prior to January 1, 1998. Nothing in this paragraph shall
prevent an insurer from offering extension coverage for periods prior to
January 1, 1998.
(f) Transition
into Enhanced Coversion Coverage. Upon termination of extension coverage as
permitted in this Rule, the insurer shall provide notice of enhanced conversion
privileges to each qualified eligible individual covered under such extension.
Such individuals shall have sixty-three (63) consecutive days from the date of
such notice, or the date extension coverage is terminated, whichever is later,
to elect an enhanced conversion option in accordance with this Rule.
(5) Effective Date of Coverage;
Scope of Coverage. Coverage under an enhanced conversion policy upon
application and payment of premium must become effective on the date of a
qualifying event, or, if applicable, on the date extension coverage is lost due
to termination by the insurer. An insurer may require payment for any
retroactive periods of coverage in order to effectuate coverage. The converted
policy shall cover the employee, member or enrollee and any dependents who were
covered by the group plan or continuation coverage on the date of termination
of insurance.
(6) Eligibility for
Benefits.
(a) Family Coverage. A qualifying
eligible individual or a spouse or former spouse who is an eligible dependent
shall have a choice of individual coverage or family coverage to include any or
all eligible dependents.
(b)
Dependents not Eligible for Coverage. Qualifying eligible individuals may
enroll dependents who are not eligible dependents for enhanced conversion
options at the discretion of the insurer, or may enroll such dependents for
coverage under any other coverage offered by the insurer pursuant to the terms
of state law. Insurers must at least offer for such dependent coverage under
all basic conversion options if the dependent would otherwise be eligible for
such basic conversion options under the terms of state law, but may instead
allow such dependents to be enrolled under the qualifying eligible individual's
enhanced conversion coverage. Insurers are not required to comply with
paragraph (6)(f)1. pertaining to coverage limitations on preexisting conditions
with regard to such dependents enrolled in enhanced conversion policies;
however, pre-existing condition exclusion limitations applicable to basic
conversion coverage shall apply with regard to such dependents. The offer to
cover such dependents under enhanced conversion coverage must be made
consistently to all qualifying eligible individuals with such
dependents.
(c) Election on Behalf
of Dependents. An election of conversion coverage by a qualifying eligible
individual shall be deemed to be an election on behalf of any eligible
dependents covered under the qualifying eligible individual's continuation
coverage, unless the application indicates an election of the qualifying
eligible individual otherwise, or this Rule provides otherwise. Election shall
not be contingent on identical election of any other family member with regard
to individual or family coverage.
(d) Eligibility Determinations. An insurer,
or an administrator or group policyholder under written agreement with an
insurer, is responsible for promptly determining the eligibility of individuals
for enhanced conversion policies in accordance with state law and this Rule.
The insurer may at any time request additional information from the individual,
and must act promptly to make its determination after receipt of the requested
information. The qualifying eligible individual must comply with an insurer's
request for additional information and verification of eligibility to the
fullest extent possible. However, the initial application date shall toll the
sixty-three (63) day election period for the qualifying eligible individual and
all other eligible individuals or dependents for whom coverage is elected,
provided that eligibility is ultimatley confirmed and premium is paid. The
insurer is subject to the provisions of the Rules and Regulations of the Office
of Commissioner of Insurance Rule
120-2-67-.12 with regard to
accepting attestations and other evidence of coverage if a certification of
creditable coverage is not available.
(e) Network Provisions. With regard to
coverage under a managed care plan issued by a managed care organization, if a
qualifying eligible individual moves out of state prior to electing an enhanced
conversion option, and the individual becomes eligible for coverage under
another state alternative mechanism or the individual health insurance
guaranteed availability provisions of the federal Health Insurance Portability
and Accountability Act of 1996 as enforced in another state, the managed care
organization may refuse to offer coverage under an enhanced conversion policy.
If a qualifying eligible individual moves to a location outside the service
area within this state, the managed care organization may require the qualified
eligible individual to agree in writing to return to the service area to
receive covered benefits as a condition of issuing the enhanced conversion
policy.
(f) Preexisting Conditions
and Health Status.
1. The converted policy
shall not exclude any preexisting condition or maintain any preexisting
condition limitation.
2. The
converted policy may not take into account health status related factors,
claims experience, or evidence of insurability with regard to eligibility for
coverage or benefit choices.
(7) Benefit Options.
(a) Standard and Low Options.
1. In General. Subject to the provisions and
conditions of this Rule, a qualifying eligible individual and any eligible
dependents shall be entitled to obtain an enhanced conversion policy providing
health insurance coverage under a plan meeting all of the minimum requirements
of the model standard option, or, at the option of the qualifying eligible
individual, a less comprehensive plan meeting all of the minimum requirements
of the model low option. Both standard and low options shall constitute
creditable coverage.
2. Filing
Requirements. An insurer using a model standard and low option as enhanced
conversion policies may comply with filing requirements by either:
(i) An insurer may file the forms for the
model standard and low options using the appropriate policy form template
specified in Form GHBAS-1 and schedule of benefits specified
in Form GHBAS-S for managed care organizations, or Form
GHIAS-1 and Form GHIAS-S, respectively, for
all other insurers. Upon an insurer filing such templates and schedule of
benefits with the Commissioner, the policy forms shall be deemed approved as of
the date the filing is received provided they conform to the above mentioned
form templates.
(ii) An insurer may
file a form with contractual language substantially similar to the model policy
form templates for approval, and may provide benefits, benefit levels and
cost-sharing schedules that are at least as comprehensive as those indicated in
the model policy form templates and under Plans C and D in Form GHBAS-S
for managed care organizations, or under Plans A and B in Form
GHIAS-S for other insurers. Such filings must include a
description which specifically outlines the variances in language between the
model policy form template and the submitted form, and must demonstrate to the
satisfaction of the Commissioner that the schedule of benefits is at least as
comprehensive as that required by the appropriate standardized plan. Nothing in
this Rule shall prevent an insurer from offering the same benefits and benefit
levels provided by the insurer to groups under one or more group health
insurance policies or contracts, provided that such benefit levels meet or
exceed the schedule of benefits outlined in Plans A, B, or D, as
appropriate.
3. Special
Rules for Preferred Provider Arrangements.
(i)
An insurer offering a group health insurance plan with a preferred provider
arrangement may offer a standard and low option with preferred provider
arrangements. The out-of-network benefit levels must be at least as
comprehensive as the schedule of benefits prescribed in Form
GHIAS-S, and the policy form must be substantially similar to
Form GHIAS-2. Such policies may be filed as prescribed in
subparagraph (2)(b) for insurers other than managed care
organizations.
(ii) Insurers may
offer preferred provider arrangements with gatekeeper provisions only to
qualifying eligible individuals who were subject to gatekeeper provisions under
the prior group health insurance coverage or continuation thereof.
(iii) Insurers are not required to offer a
standard and low option that does not contain preferred provider arrangements
to qualifying eligible individuals who were subject to preferred provider
arrangements under the prior group health insurance coverage or continuation
thereof; however, an insurer may offer such options with preferred provider
arrangements in addition to the standard and low options without preferred
provider arrangements to individuals who were not subject to preferred provider
arrangements under the prior group health insurance coverage or continuation
thereof.
(iv) Special Waiver from
Use of Model Standard and Low Options. In the event an insurer's group health
insurance policies or contracts, including any and all benefit riders typically
offered to groups, contain benefit provisions that are, overall, substantially
less comprehensive than the model standard option, the insurer may provide, as
a standard option, the same benefits offered under the group health insurance
policy or contract or continuation thereof. The insurer may then elect to use a
low option with higher cost-sharing provisions than that included in the
standard option, but not to exceed the highest cost-sharing provisions made
available by the insurer to groups. If no higher cost-sharing provisions or
lower benefit levels than what is part of the standard option are available to
groups, then the insurer may submit for approval a low option with higher
cost-sharing options than the standard option. The insurer must submit the
policy forms and schedule of benefits for approval, and must demonstrate, to
the satisfaction of the Commissioner, that the group health insurance policy or
contract from which qualifying eligible individuals will convert is indeed
substantially less comprehensive than the schedule of benefits for the model
standard option. Examples include higher deductibles, coinsurance, or
copayments, and a schedule of benefits less generous than the schedule included
as part of the model standard option. An insurer obtaining such a waiver may
offer standard and low options which are identical except for cost-sharing
provisions.
(b) Additional Options. Nothing in this Rule
shall prohibit an insurer from offering additional options based on either
group policies or contracts currently being issued or made available to groups,
policies based on the model policy forms with different cost-sharing
requirements or benefit levels, or individual policies or contracts actively
marketed and issued by an insurer, provided that such additional options:
1. Are offered consistently to all qualified
eligible individuals without regard to any health status related
factor;
2. Are filed for approval;
and
3. Are otherwise subject to all
the requirements of this Rule, including rating, eligibility, notice, and
prohibitions on preexisting condition limitations.
(c) Special Rule for Managed Care
Organizations and Preferred Provider Arrangements. A managed care organization
or insurer with a preferred provider arrangement must use the same network of
providers for the conversion policies that it uses for group policies issued in
Georgia. If such insurer offers different provider networks for different group
policyholders, the conversion policies issued must include the specific network
to which the qualified eligible individual had access under group or
continuation coverage, or a choice of networks including the one to which the
qualified eligible individual previously had access.
(d) Choice After Election of Conversion
Privilege. Any qualifying eligible individual covered under a converted policy
shall have the option of switching from a standard option to a low option
policy or any other additional option offered by the insurer under paragraph
(7)(b) of this Rule after exercising the conversion privilege. The insurer
shall also permit the privilege to switch from a low option policy to any other
additional option offered by the insurer under paragraph (7)(b) of this Rule
after an individual exercises the conversion privilege. The insurer may limit
such choice to the following events:
1. Once a
year within 31 days of the policy anniversary date, with coverage becoming
effective on the policy anniversary date;
2. Upon notification of premium increase,
with coverage becoming effective on the effective date of the premium increase;
and
3. Within 31 days of divorce or
marriage, with coverage becoming effective on the first day of the following
calendar month.
(8) Reduction of Coverage.
(a) Any converted policy may provide for a
reduction or coordination of coverage on any person upon eligibility for
coverage under Medicare.
(b) No
converted policy may provide for a reduction or coordination of coverage based
upon a 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 that constitutes creditable coverage and covers any
person insured under the conversion contract. The converted policy shall not
provide benefits in excess of the maximum benefit levels specified therein,
when combined with any benefits payable or rendered through any such creditable
coverage.
(d) 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 continuation
coverage after the termination of the individual's insurance
thereunder.
(e) An insurer may
request information in advance of any premium due date of the converted policy
of any person covered thereunder only as to whether:
1. 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
2. Similar benefits are provided for or
available to such person, pursuant to or in accordance with the requirements of
Medicare.
(9)
Conversion Premium.
(a) Rate Guarantee and
Modes. All premium rates must provide for the payment of monthly premiums.
Optional modes of premium payment may be offered to the converting employee,
member, or enrollee. In any case, rates shall be developed for a one-year
guaranteed rate for all enhanced conversion policy issues and
renewals.
(b) Prohibition. The
enhanced conversion pool shall include the claims experience produced by all
individuals insured by enhanced conversion policies. Experience in the enhanced
conversion pool, whether actual or anticipated or both, shall be separate from
the insurer's group pool and shall not be considered in the group pool rate or
in the development of the base rate for enhanced conversion options.
(c) Rate Development. Insurers shall develop
a base rate for the enhanced conversion policies based on the cost of providing
such policies to a group comprised of standard risks in the insurer's group
pool. Such rate may be derived by adjusting the group pool rate in accordance
with the following steps to determine a base rate for the product:
1. An age and sex distribution factor which
represents the demographic mix of the group pool and accounts for variances in
cost because of such distribution;
2. A benefit adjustment factor, determined by
developing a composite benefit factor for each group health insurance benefit
option or all group health insurance benefits offered by the insurer in this
state to compare the benefit values of the enhanced conversion policies to the
average type of coverage issued by the insurer in the group market;
3. A trend adjustment which reflects the
anticipated cost of each option without taking into consideration the health
status of individuals in the enhanced conversion pool; and
4. Determination of a lowest possible base
rate normalized in accordance with the age and sex factors provided in Form
CONV-1.
(d) Experience
and Demographic Factors. The base rate may be further adjusted by:
1. An experience adjustment factor determined
for the enhanced conversion pool, not to exceed 150 percent of the group pool
rate, and applied uniformly, consistently, and equitably to all enhanced
conversion policies issued, and
2.
Demographic factors for particular individuals or families based on age, sex,
and family tiers provided in Form CONV-1 or as permitted in paragraph (9)(e),
and area factors typically used by the insurer for group health insurance
policies or contracts and disclosed to the Commissioner for approval.
(e) Exception from Use of
Standardized Factors. Only an insurer electing a special waiver as permitted in
subparagraph (7)(a) 4. of this Rule may use the set of age and sex factors
applied to all groups covered by the insurer for use with the approved
converted policies. Such an insurer must use the base rate of the product as it
is marketed and issued in the group market, and disclose such rate. If an
insurer is using a model policy form or a derivative of one, it must use the
factors specified in Form CONV-1.
(f) Disclosure.
1. Insurers must file premium rates and modes
to be used for all enhanced conversion policies with the Commissioner for
approval prior to use. Rating documentation must demonstrate the development of
the group pool rate and each of the factors and adjustments in a step-by-step
approach. Insurers must also submit a rate filing for approval by the
Commissioner prior to any renewal rate change, change in methodology, or change
in factor schedule.
2. The insurer
must disclose area factors, or all demographic factors if excepted under
paragraph (9)(e), as part of its rate filing for approval and in every
subsequent rate filing.
3. An
insurer must include in each rate filing an actuarial certification completed
by a qualified actuary, attesting to the fact that:
(i) The rates are developed using reasonable
assumptions and in accordance with generally accepted actuarial principles and
are not excessive nor unfair; and
(ii) The filing is in compliance with state
law and Regulations.
(10) Renewability.
(a) In General. The converted policy may
provide that the insurer may refuse to renew the policy or the coverage of any
person insured thereunder only as permitted in the Rules and Regulations of the
Office of Commissioner of Insurance Rule
120-2-67-.10(b)(1),(2),(3), and
(5), with regard to renewability of
individual health insurance policies or contracts.
(b) Continuation of Benefits. Any refusal to
renew shall be without prejudice to any valid claim commencing while the policy
is in force.
(11)
Notification in Group Certificate of Coverage. A notification of the enhanced
conversion privilege for qualifying eligible individuals, including all
eligibility and application requirements, shall be included in each certificate
of coverage under any group health insurance policy or contract.
(12) Substitution for Basic Conversion
Option. An insurer may substitute coverage under this Rule for coverage under a
basic conversion option as required by O.C.G.A. §
33-24-21.1 and Rule
120-2-10-.11 for group members who
terminate group coverage but are not qualifying eligible
individuals.
O.C.G.A. Secs.
33-2-9,
33-24-21.1.