Code of Massachusetts Regulations
211 CMR - DIVISION OF INSURANCE
Title 211 CMR 40.00 - Marketing of insured health plans
Section 40.07 - Benefits Payable, Losses Covered or Premiums Payable

(a) It shall be considered misleading, and therefore prohibited to omit information or use words, phrases, statements, references or illustrations if such omission has the capacity, tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the nature or extent of any policy benefit payable, loss covered or premium payable. The fact that the policy offered is made available to a prospective insured for inspection prior to consummation of the sale or an offer is made to refund the premium if the purchaser is not satisfied, does not remedy misleading statements.

(b) It shall be considered misleading, and therefore prohibited, to solicit an offer to contract for a health insurance policy without a clear and conspicuous disclosure of the premium rate for such policy.

(c) It shall be considered misleading, and therefore prohibited, for a marketing method of a policy whose benefits are conditional upon confinement in a hospital or similar facility, to refer to the benefits or costs of the policy, or the risks against which the policy is intended to provide protection unless it shall also disclose both clearly and conspicuously in accordance with 211 CMR 40.05 as well as on the application for such policy whether benefits are based on actual costs incurred and/or the length of confinement.

(d) It shall be considered misleading, and therefore prohibited, for a marketing method to contain or use words or phrases such as "all"; "full"; "complete"; "comprehensive"; "unlimited"; "up to," "as high as"; "this policy will help pay your hospital and surgical bills"; "this policy will help fill some of the gaps that Medicare and your present insurance leaves out"; "this policy will help to replace your income" (when used to express loss-of-time benefits); or similar words and phrases, in a manner which exaggerates any benefits beyond the terms of the policy.

(e) It shall be considered misleading, and therefore prohibited, for a marketing method to present descriptions of a policy limitation, exception, or reduction, worded in a positive manner to imply that it is a benefit, such as, describing a waiting period as a "benefit builder," or stating "even preexisting conditions are covered after two years." Words and phrases used in a marketing method to describe such policy limitations, exceptions and reductions shall fairly and accurately describe the negative features of such limitations, exceptions and reductions of the policy offered.

(f) It shall be considered misleading, and therefore prohibited, for the marketing of a hospital or other similar facility confinement benefit to state that the amount of the benefit is payable on a monthly or weekly basis, when, in fact, the amount of the benefit payable is based on a daily prorata basis relating to the number of days of confinement. When the policy contains a limit on the number of days of coverage provided, such limit must be stated in the marketing method.

(g) It shall be considered misleading, and therefore prohibited, for a marketing method of a policy covering a list of specified diseases to imply coverage beyond the terms of the policy. Synonymous terms shall not be used to refer to any disease so as to imply broader coverage than is the fact.

(h) A marketing method for a policy providing benefits for specified illnesses only, or for specified accidents only, such as automobile accidents, shall be considered misleading and therefore prohibited unless it shall clearly and conspicuously state the limited nature of the policy. The statement shall be worded in language identical to, or substantially similar to the following: "THIS IS A LIMITED POLICY"; "THIS IS A SPECIFIED DISEASE ONLY POLICY"; "THIS IS AN AUTOMOBILE ACCIDENT ONLY POLICY."

(i) It shall be considered misleading, and therefore prohibited, for the marketing method of a direct response insurance product to imply that because "no insurance agent will call and no commissions will be paid to agents" that it is "a low cost plan" or use other similar words or phrases because the cost of advertising and servicing such policies is a substantial cost in the marketing of a direct response insurance product, unless such is the fact, and is clearly substantiated in such marketing method.

(j) It shall be considered misleading, and therefore prohibited, for a marketing method to use photographs, illustrations, depictions or fictionalized accounts of illness or illness-related subjects, or overemphasis of exceptional or catastrophic risk, or exaggeration of potential out-of-pocket costs of health care, or any other marketing method in such a way as to invite the purchase of an insured health plan for emotional rather than functional reasons.

(a) When a marketing method refers to either a dollar amount or a period of time for which any benefit is payable, or the cost of the policy, or specific policy benefit, or the loss for which such benefit is payable, it shall be considered misleading, and therefore prohibited, unless it also discloses those exceptions, reductions and limitations affecting the basic provisions of the policy without which the marketing method would have the capacity or tendency to mislead or deceive.

(b) When a policy contains a waiting, elimination, probationary or similar time period between the effective date of the policy and the effective date of coverage under the policy or a time period between the date benefits begin to accrue for such loss, a marketing method which is subject to the requirements of the preceding paragraph shall disclose the existence of such periods or be considered misleading and therefore prohibited.

(c) A marketing method shall not use the words "only"; "just"; "merely"; "minimum"; or similar words or phrases to describe the applicability to any exceptions and reductions such as: "This policy is subject to the following minimum exceptions and reductions" or it shall be considered to be misleading, and therefore prohibited.

(a) A marketing method shall, in negative terms, disclose the extent to which any loss is not covered if the cause of such loss is traceable to a condition existing prior to the effective date of the policy or it shall be considered misleading and therefore prohibited. The use of the term "pre-existing condition" without an appropriate definition or description shall not be used or it shall be considered misleading, and therefore prohibited.

(b) When a policy does not cover losses resulting from pre-existing conditions, no marketing of the policy shall state or imply that the applicant's physical condition or medical history will not affect the issuance of the policy or payment of a claim thereunder or it shall be considered misleading and therefore prohibited. 211 CMR 40.07(3)(b) prohibits the use of the phrase "no medical examination required" and phrases of similar import, but does not prohibit explaining "guaranteed issue." If a carrier requires a medical examination for a specified policy, the marketing material shall disclose that a medical examination is required or it shall be considered misleading, and therefore prohibited.