a)
Prohibition on Rescissions
1) A group health
plan, or a health insurance issuer offering group or individual health
insurance coverage, must not rescind coverage under the plan, or under the
policy, certificate, or contract of insurance, with respect to an individual
(including a group to which the individual belongs or family coverage in which
the individual is included) once the individual is covered under the plan or
coverage, unless the individual (or a person seeking coverage on behalf of the
individual) performs an act, practice or omission that constitutes fraud, or
unless the individual makes an intentional misrepresentation of material fact,
as prohibited by the terms of the plan or coverage. A group health plan, or a
health insurance issuer offering group or individual health insurance coverage,
must provide at least 30 days advance written notice to each participant (in
the individual market, primary subscriber) who would be affected before
coverage may be rescinded under this subsection (a)(1), regardless of, in the
case of group coverage, whether the coverage is insured or self-insured, or
whether the rescission applies to an entire group or only to an individual
within the group. (This subsection (a)(1) applies regardless of any
contestability period that may otherwise apply.)
2) For purposes of this Section, a rescission
is a cancellation or discontinuance of coverage that has retroactive effect.
For example, a cancellation that treats a policy as void from the time of the
individual's or group's enrollment is a rescission. As another example, a
cancellation that voids benefits paid up to a year before the cancellation is
also a rescission for this purpose. A cancellation or discontinuance of
coverage is not a rescission if:
A) The
cancellation or discontinuance of coverage has only a prospective effect;
or
B) The cancellation or
discontinuance of coverage is effective retroactively to the extent it is
attributable to a failure to timely pay required premiums or contributions
towards the cost of coverage. (
45 CFR
147.128 )
3) This subsection (a) is illustrated by the
examples appearing in
45 CFR
147.128.
b) Compliance with Other Requirements
Other requirements of federal or Illinois law may apply in
connection with a rescission of coverage. (
45 CFR
147.128 )
c) Applicability Date
This Section applies for plan years (in the individual
market, for policy years) beginning on or after September 23, 2010. See
45 CFR
147.140 for determining the application of
this Section to grandfathered health plans (providing that the rules regarding
rescissions and advance notice apply to all grandfathered health plans). (
45 CFR
147.128 )