Ga. Comp. R. & Regs. R. 120-2-10-.10 - Group Coverage Discontinuance and Replacement
(1) This Rule is
applicable to all insurance policies, subscriber contracts, and any other
insurance coverage by whatever name called issued in this State or provided
through an out-of-state multiple employer trust or arrangement by an insurer on
a group or group-type basis covering persons as employees of employers or as
members of unions (or associations).
(2) The term "group type basis" means a
benefit plan, other than "salary budget" plans utilizing individual insurance
policies or subscriber contracts, which meets the following conditions:
(a) Coverage is provided through insurance
policies or subscriber contracts to classes of employees or members defined in
terms of conditions pertaining to employment or membership.
(b) The coverage is not available to the
general public and can be obtained and maintained only because of the covered
person's membership in or in connection with the particular organization or
group.
(c) There are arrangements
for bulk payment of premiums or subscription charges to the insurer or
non-profit service corporation.
(d)
There is sponsorship of the plan by the employer, union (or
association).
(3) The
effective date of discontinuance for non-payment of premium or subscription
charges:
(a) If a policy or contract subject
to these rules and regulations provides for automatic discontinuance of the
policy or contract after a premium or subscription charge has remained unpaid
through the grace period allowance for such payment, the carrier shall be
liable for valid claims for covered losses incurred prior to the end of the
grace period.
(b) If the actions of
the carrier after the end of the grace period indicate that it considers the
policy or contract as continuing in force beyond the end of the grace period
(such as, by continuing to recognize claims subsequently incurred), the carrier
shall be liable for valid claims for losses beginning prior to the effective
date of written notice of discontinuance to the policyholder or other entity
responsible for making payments or submitting subscription charges to the
carrier. The effective date of discontinuance shall not be prior to midnight at
the end of the third scheduled work day after the date upon which the notice is
delivered.
(4)
Requirements for notice of discontinuance for other than nonpayment of
premiums: Any notice of discontinuance by the insurer shall be mailed or
delivered not less than sixty (60) days prior to the effective date of
cancellation. Such written notice of discontinuance given by the insurer may
also advise, in any instance in which the plan involves employee contributions,
that if the policyholder or other entity continues to collect contributions for
the coverage beyond the date of discontinuance, the policyholder or other
entity may be held solely liable for the benefits with respect to which the
contributions have been collected. The notice of discontinuance required by
this paragraph shall not be required where a policy is cancelled due to
nonpayment of premium or subscription charges following the end of any required
grace period.
(5) Extension of
Benefits.
(a) Every group or other contract
subject to these rules and regulations hereafter issued, or under which the
level of benefits is hereafter altered, modified, or amended, must provide a
reasonable provision for extension of benefits in the event of total disability
at the date of discontinuance of the group policy or contract as required by
the following paragraphs of this section.
(b) In the case of a group life plan which
contains a disability benefit extension of any type (e.g., premium waiver
extension, extended death benefit in the event of total disability, or payment
of income for a specified period during total disability) the discontinuance of
the group policy shall not operate to terminate such extension.
(c) In the case of a group plan providing
benefits for loss of time from work or specific indemnity during hospital
confinement, discontinuance of the policy during a disability shall have no
effect on benefits payable for the disability or confinement.
(d) In the case of hospital or medical
expense coverages, a reasonable extension of benefits or accrued liability
provision is required. Such a provision will be considered "reasonable" if it
provides an extension of at least twelve months under "major medical" and
"comprehensive medical" type coverages, and under other types of hospital or
medical expense coverages provides either an extension of at least ninety days
or an accrued liability for expenses incurred during a period of disability or
during a period of at least ninety days starting with a specific event which
occurred while coverage was in force (e.g., an accident).
(e) Any applicable extension of benefits or
accrued liability shall be described in any policy or contract involved as well
as in group insurance certificates. The benefits payable during any period of
extension or accrued liability may be subject to the policy's or contract's
regular benefit limits (e.g., benefits ceasing at exhaustion of a benefit
period or of maximum benefits).
(6) The continuance of coverage in situations
involving replacement of one carrier by another:
(a) This section shall indicate the carrier
responsible for liability in those instances in which one carrier's contract
replaces a plan of similar benefits of another.
(b) Liability of prior carrier. 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 policyholders or other entity secures replacement coverage
from a new carrier, self insures, or foregoes the provision of
coverage.
(c) The liability of
succeeding carrier:
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 and
non-confinement rules) 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
paragraph 1. above must nevertheless 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 to he
provided by a succeeding carrier shall be the applicable level of benefits of
the prior carrier's plan reduced by any benefits payable by the prior
plan.
(ii) Coverage 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 plan as described in paragraph 1.
above.
(II) 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 (e.g., at termination of employment or ceasing to be an eligible
dependent, as the case may be).
(III) in the case of an individual who was
totally disabled, and in the case of a type of coverage for which paragraph 5.
of this Rule requires an extension of accrued liability, the end of any period
of extension of accrued liability which is required of the prior carrier by
paragraph (5) of this Rule or, if the prior carrier's policy or contract is not
subject to that paragraph, would have been required of that carrier had its
policy or contract been subject to paragraph 5. at the time the prior plan was
discontinued and replaced by the succeeding carrier's plan.
3. In the case of a
preexisting conditions limitation included in the succeeding carrier's plan,
the level of benefits applicable to preexisting conditions or persons becoming
covered by the succeeding carrier's plan in accordance with this subparagraph
during the period of time this limitation applies under the new plan shall be
the lesser of:
(i) the benefits of the new
plan determined without application of the preexisting conditions limitation;
and
(ii) the benefits of the prior
plan.
4. 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. 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 ninety
(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
provision.
5. 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 the purpose of this
section, benefits of the prior plan will be determined in accordance with all
of the definitions, conditions, and covered expense 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.
(d)
Replacement, for the purposes of this Rule for groups or subgroups of fifty-one
(51) or more insured employees, members or enrollees (not including
dependents), includes, but is not limited to, any group or group-type
replacement coverage which becomes effective within ninety (90) days of the
date of discontinuance of a group policy or contract or within ninety (90) days
of the date of discontinuance of an employer group insured under a group policy
or contract covering multiple employer groups. Replacement, for the purposes of
this Rule for groups or subgroups of fifty (50) or less insured employees,
members or enrollees (not including dependents), shall be defined in Rule
120-2-10-.(1)(k).
1. The succeeding carrier's
plan may be effective on the date agreed upon by the policyholder and insurer
for the period for which a premium is paid.
2. The succeeding carrier shall not be liable
for new conditions arising during the period of no coverage. Such conditions
may be subject to the succeeding carrier's preexisting conditions
limitation.
Notes
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