Illinois Administrative Code
Title 50 - INSURANCE
Part 2013 - GROUP COVERAGE DISCONTINUANCE AND REPLACEMENT
Section 2013.70 - Continuance of Coverage in Situations Involving Replacement of One Group Contract by Another
Universal Citation: 50 IL Admin Code ยง 2013.70
Current through Register Vol. 48, No. 12, March 22, 2024
This Section sets standards for determining liability when one group contract replaces another group contract.
a) Liability of prior carrier.
1) The prior carrier remains liable only to
the extent of its accrued liabilities and extensions of benefits. The position
of the prior carrier shall be the same whether the group contract holder or
other entity secures replacement coverage from a new carrier, the same carrier,
self-insures, or foregoes the provision of coverage.
2) Employees and dependents who are totally
disabled on the date of discontinuance of the group policy of the prior carrier
shall be provided an extension of benefits for a disabling illness, injury or
condition as described in Section
2013.60.
3) The prior carrier, if an HMO, may limit
the extension of benefits for a totally disabling illness, injury or condition
to services provided by or through their participating providers, unless
services are rendered on an emergency basis.
4) No prior carrier may terminate the
required extension of benefits because the totally disabled person becomes
covered under the succeeding carrier's contract.
5) The prior carrier must provide the
extension of benefits without cost to the totally disabled person except for
copayments, coinsurance and deductibles in effect at the time of discontinuance
and following the discontinuance of coverage.
b) Liability of Succeeding Carrier.
1) Each person who is eligible for coverage
in accordance with the succeeding carrier's plan of benefits in respect to
classes eligible and actively at work and non-confinement rules, shall be
covered by the succeeding carrier's plan of benefits. For purposes of this
subsection, the succeeding carrier shall not individually underwrite when
determining eligibility except for purposes of accepting or rejecting the group
as a whole.
2) Each person not
covered under the succeeding carrier's plan of benefits in accordance with
subsection (b)(1) because he or she does not satisfy the actively at work or
non-confinement requirement, must nevertheless be covered by the succeeding
carrier in accordance with the following standards if such individual was
validly covered, including by extension of benefits, under the prior plan on
the date of discontinuance and such individual is a member of the class or
classes of individuals eligible for coverage. Any reference in the following
standards to an individual who was or was not totally disabled is a reference
to the individual's status immediately prior to the date the succeeding
carrier's coverage becomes effective.
A) The
minimum level of benefits to be provided by the succeeding carrier shall be the
applicable level of benefits of the prior carrier's plan reduced by any
benefits payable by the prior plan.
B) When the succeeding carrier is an HMO, the
benefits must be the HMO's own level of benefits, reduced by benefits provided
or payable by the prior plan.
C)
Benefits under this subsection must be provided by the succeeding carrier until
at least the earliest of the following dates:
i) the date the individual becomes eligible
under the succeeding carrier's group contract according to subsection (b)(1)
above.
ii) the date the
individual's benefits would terminate in accordance with the succeeding
carrier's plan provisions applicable to individual termination of coverage
(e.g., at termination of employment or ceasing to be an eligible
dependent).
iii) in the case of an
individual who was totally disabled and in the case of a type of coverage for
which Section
2013.60
requires an extension of benefits or accrued liability, the end of any period
of extension or accrued liability, which is required of the prior carrier by
Section
2013.60 or,
if the prior carrier's policy is not subject to that Section, would have been
required of that carrier had its policy been subject to Section
2013.60.
3)
The conversion privilege shall be available to those individuals whose benefits
cease, if the individual has not become eligible under the succeeding carrier's
plan described in subsection (b)(1) above.
4) In the case of a pre-existing conditions
limitation included in the succeeding carrier's plan, the level of benefits
applicable to pre-existing conditions of persons covered by the succeeding
carrier during the period of time this limitation applies, shall be the lesser
of:
A) the benefits of the new plan
determined without application of the pre-existing conditions limitation;
or
B) the benefits of the prior
plan.
5) The succeeding
carrier, in applying any deductibles, coinsurance, copayments or waiting period
in its plan, shall give credit for the satisfaction or partial satisfaction of
the same or similar provisions under a prior plan providing similar benefits.
In the case of deductible provisions, the credit shall apply for the same or
overlapping benefit periods and shall be given for expenses actually incurred
and applied against the deductible provision of the prior carrier's plan during
the 90 days preceding the effective date of the succeeding carrier's plan, but
only to the extent these expenses are recognized under the terms of the
succeeding carrier's plan and are subject to similar deductible
provisions.
6) In any situation
where a determination of the prior carrier's benefits is required by the
succeeding carrier, at the succeeding carrier's request the prior carrier shall
furnish a statement of the benefits available or pertinent information,
sufficient to permit verification of the benefit determination or the
determination itself by the succeeding carrier. For purposes of this Section,
benefits of the prior plan will be determined in accordance with all of the
definitions, conditions, and covered expenses provisions of the prior plan
rather than those of the succeeding plan. The benefit determination will be
made as if coverage had not been replaced by the succeeding carrier.
c) Liability of Succeeding Carrier as an HMO
1) So long as federally qualified
HMOs are not permitted to require actively at work, hospital non-confinement
rules, medical evidence of insurability, or pre-existing condition limitations,
subsections (b)(2)(A) and (b)(4) above do not apply to federally qualified
HMOs.
2) In situations where
services for the totally disabled person are provided by the succeeding HMO,
the succeeding HMO may bill the prior carrier for the reasonable cash value of
services provided when the prior carrier has an obligation under its required
extension of benefits. The prior carrier shall make direct payment to the
succeeding HMO for the cost of the services provided.
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