New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 2 - INSURANCE GROUP
Subchapter 13 - GROUP COVERAGE DISCONTINUANCE AND REPLACEMENT
Section 11:2-13.6 - Replacement carrier coverage
Universal Citation: NJ Admin Code 11:2-13.6
Current through Register Vol. 56, No. 24, December 18, 2024
(a) This section shall determine carrier liability where one carrier's policy or contract replaces another carrier's plan providing similar types of coverage.
(b) 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 policyholder, contractholder or other entity secures replacement coverage from a new carrier, self-funds, or foregoes the provision of coverage.
(c) Liability of succeeding carriers is governed by the following:
1. Each person who
is eligible for coverage in accordance with the succeeding carrier's plan of
benefits (in respect of classes eligible and actively at work to the extent
permitted by State and Federal law) shall be covered by that carrier's plan of
benefits.
2. Each person not
covered under the succeeding carrier's plan of benefits in accordance with (c)1
above shall be covered by the succeeding carrier in accordance with the
following rules if such individual was validly covered (including benefit
extension) under the prior plan on the date of discontinuance and if such
individual is a member of the class or classes of individuals eligible for
coverage under the succeeding carrier's plan. Any reference in the following
rules 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:
i. The minimum
level of benefits or services or supplies 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 or services or supplies provided by the prior
plan;
ii. Coverage shall be
provided by the succeeding carrier until at least the earliest of the
following:
(1) The date the individual
becomes eligible under the succeeding carrier's plan as described in paragraph
1 above;
(2) For each type of
coverage, the date the individual's coverage would terminate in accordance with
the succeeding carrier's plan provisions applicable to individual termination
of coverage (for example, at termination of employment or ceasing to be an
eligible dependent, as the case may be);
(3) In the case of an individual who was
totally disabled, and in the case of a type of coverage for which
N.J.A.C. 11:2-13.5 requires an extension or
accrued liability, the end of any period of extension or accrued liability
which is required of the prior carrier by N.J.A.C. 11:2-13.5, or if the prior
carrier's policy or contract is not subject to that section, would have been
required of that carrier had its policy or contract been subject to
N.J.A.C. 11:2-13.5 at the time the prior
plan was discontinued and replaced by the succeeding carrier's plan.
3. Except with respect
to policies and contracts providing group medical insurance, in the case of a
preexisting conditions limitation included in the succeeding carrier's plan,
the level of benefits or coverage applicable to preexisting conditions of
persons becoming covered by the succeeding carrier's plan in accordance with
this subsection during the period of time this limitation applies under the new
plan shall be the lesser of:
i. The benefits
or coverage of the new plan determined without application of the preexisting
conditions limitation; and
ii. The
benefits or coverage of the prior plan.
4. With respect to group medical insurance,
any preexisting condition limitation or exclusion in the succeeding carrier's
plan applicable to persons becoming covered by the succeeding carrier's plan
shall be reduced or eliminated for each person separately on the basis of each
person's creditable coverage pursuant to
N.J.S.A. 17B:27A-54 et seq.
5. The succeeding carrier, in applying any
deductibles or waiting periods 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. Except as it relates to HMOs, the
definition of waiting period includes, but is not limited to, the period of
time required to be satisfied before maternity benefits or coverage becomes
available. The aggregate period of time to be applied may be the greater of
that required by either the prior plan or the succeeding plan. But in any
event, the aggregate period of time will be satisfied by taking into
consideration the full portion of the waiting period satisfied under the prior
plan. 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 provisions 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 a similar deductible
provision.
6. Notwithstanding (c)
above, policies and contracts providing group medical insurance shall not
contain a separate waiting period for maternity benefits, and pregnancy shall
not be treated as a preexisting condition.
7. In any situation where a determination of
the prior carrier's benefit or coverage is required by the succeeding carrier,
at the succeeding carrier's request the prior carrier shall furnish a statement
of the benefits or coverage available or pertinent information sufficient to
permit verification of the benefit or coverage or the determination itself by
the succeeding carrier. For the purpose of this section, benefits or coverage
of the prior plan shall be determined in accordance with all the definitions,
conditions, covered expenses and services and supplies provisions of the prior
plan rather than those of the succeeding plan. The benefit or coverage
determination shall be made as if coverage had not been replaced by the
succeeding carrier.
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