(a)General rules.
(1)Medicare supplement policies and certificates must
[shall] include a renewal or continuation provision.
The language or specifications of the renewal or continuation [
such] provision must be consistent with the type of contract
issued. The provision must [provisions shall]
be appropriately captioned, [and shall] appear on the first
page of the policy, and [shall] include any reservation
by the issuer of the right to change premiums and any automatic renewal
premium increases based on the age of the policyholder.
(2)Except for riders or endorsements by which the
issuer effectuates a request made in writing by the policyholder,
or by which the issuer exercises a specifically reserved right under
a Medicare supplement policy, or by which the issuer is required to
reduce or eliminate benefits to avoid duplication of Medicare benefits,
all riders or endorsements added to a Medicare supplement policy after
the date of issue or at reinstatement or renewal that [which
] reduce or eliminate benefits or coverage in the policy must [
shall] require signed acceptance by the policyholder. After
the date of issue of the policy or certificate, any rider or endorsement
that [which] increases benefits or coverage with
concomitant increase in premium during the policy term must [
shall] be agreed to in writing and signed by the
policyholder[,] unless the benefits are required by the
minimum standards for Medicare supplement insurance policies, or unless
the increased benefits or coverage is required by law. Where a separate
additional premium is charged for benefits provided in connection
with riders or endorsements, the additional premium charge must [
shall] be set forth in the policy.
(3)Medicare supplement policies may [shall
] not provide for the payment of benefits based on standards
described as "usual and customary," "reasonable and customary," or similar
words and phrases [of similar import].
(4)If a Medicare supplement policy or certificate
contains any limitations with respect to preexisting conditions:
(A)the limitations must [shall]
appear as a separate paragraph of the policy or certificate and be
labeled as "Preexisting Condition Limitations;"
(B)the policy or certificate must [shall]
define the term "preexisting condition" and must [shall]
provide an explanation of the term in its accompanying outline of
coverage; and
(C)the policy or certificate must [shall]
include a provision explaining the reduction of the preexisting condition
limitation for individuals who [that] qualify
under §3.3306(b)(1)(A) of this title (relating to
Minimum Benefit Standards), §3.3312(a)(2) of this title (relating
to Guaranteed Issue for [to] Eligible Persons),
or §3.3324(c) and (d) of this title (relating to Open Enrollment).
(5)Medicare supplement policies and certificates must
[shall] have a notice prominently printed on the
first page or attached to the first page [thereto]
stating in substance that the policyholder or certificate holder has
[shall have] the right to return the policy or certificate
within 30 days of its delivery and to have the premium refunded if, after
examination, the insured person is not satisfied for any
reason.
(6)Issuers of accident and sickness policies, certificates,
or subscriber contracts that [which] provide
hospital or medical-expense [medical expense]
coverage on an expense-incurred [expense incurred]
or indemnity basis, to persons [a person(s)]
eligible for Medicare must [shall] provide to
those applicants a Guide to Health Insurance
for People with Medicare(Guide) in the form developed
jointly by the National Association of Insurance Commissioners and
the Centers for Medicare and Medicaid Services of the United States
Department of Health and Human Services in no smaller than 12-point
type.
(A)For purposes of this section, "form" means the
language, format, style, type size, type proportional spacing, bold
character, and line spacing.
(B)If a Guide [
Guide] incorporating the latest statutory changes is not available
from a government agency, companies may comply with this provision
by modifying the latest available Guide [
Guide] to the extent required by applicable law.
(C)Except as provided in this section, delivery of
the Guide must [Guide
shall] be made whether or not any [such]
policies, certificates, subscriber contracts, or evidences of coverage
are advertised, solicited, or issued as Medicare supplement policies
or certificates as defined in this regulation.
(D)Except in the case of direct response issuers,
delivery of the Guide must [
Guide shall] be made to the applicant at the time of application
, and acknowledgment of receipt of the Guide must [Guide shall]
be obtained from the applicant by the issuer. Issuers
must [Provided, however, issuers shall] deliver the Guide [Guide] to the
applicant for a direct response Medicare supplement policy on [
upon] request, but not later than at the time the policy is
delivered.
(7)Except as otherwise provided in this section, the
terms "Medicare Supplement," "Medigap," "Medicare Wrap-Around" and similar
words or phrases [of similar import]
may not be used unless the policy is issued in compliance with §3.3306
of this title.
(b)Outline of coverage requirements for Medicare supplement
policies.
(1)Issuers of Medicare supplement coverage in this
state must [shall] provide an outline of coverage
to all applicants, including certificate holders under group policies,
at the time application is presented to the prospective applicant[,]
and, except for direct-response [direct response]
policies, must [shall] obtain an acknowledgment
of receipt of the [such] outline from the applicant.
(2)If a Medicare supplement policy or certificate
is issued on a basis that [which] would require
revision of the outline of coverage delivered at the time of application,
a substitute outline of coverage properly describing the policy or
certificate actually issued must [shall] accompany
the [such] policy or certificate when it is delivered
. The outline of coverage must [and] contain the
following statement in no less than 12-point type, immediately above
the company name: "Notice: Read this outline of coverage carefully.
It is not identical to the outline of coverage provided upon application
and the coverage originally applied for has not been issued."
(c)Form for outline of coverage. In providing outlines
of coverage to applicants under [pursuant to]
the requirements of subsection (b)(1) of this section, insurers must
[shall] use a form that [which]
complies with the requirements of this subsection. The outline of
coverage must contain each of the following four parts in the following
order: a cover page, premium information, disclosure pages, and charts
displaying the features of each benefit plan offered by the issuer.
The outline of coverage must [shall] be in the
language and format prescribed in paragraphs (1) and (2) of this subsection
in no less than 12-point type.
(1)All plans must [shall] be
shown on the cover page, and the plans [plan(s)]
that are offered by the issuer must [shall]
be prominently identified. Premium information for plans that are
offered must [shall] be shown on the cover page
or immediately following the cover page and must [shall]
be prominently displayed. The premium and mode must [shall
] be stated for all plans that are offered to the prospective
applicant. All possible premiums for the prospective applicant must [
shall] be illustrated.
(2)The items in subparagraphs (A) - (C) of this paragraph
must [shall] be included in the outline of coverage
in addition to the items specified in the plan-specific outline-of-coverage
forms.
(A)Dollar amounts that [which]
are shown in parentheses for each of the plan-specific charts on the
following pages are for the calendar year in which the charts were
published. Issuers must [shall], for each plan
offered, appropriately complete outline-of-coverage-chart statements
about amounts to be paid by Medicare, the plan, and the covered person
by replacing the amount in parentheses with the dollar amount corresponding
to each covered service for the applicable calendar year benefit period.
(B)The outline of coverage must include an explanation
of any limitations and exclusions. Those limitations and exclusions
resulting from Medicare program provisions may be disclosed [as
such] by reference and need not be explained in their entirety.
All limitations and exclusions related to preexisting conditions [,]
and all other limitations and exclusions not resulting from Medicare
regulations must be fully explained in the outline of coverage.
(C)The outline of coverage must include a statement
that the policy either does or does not contain provisions providing
for a refund or partial refund of premium on [upon]
the death of an insured or on the surrender of the policy
or certificate. If the policy contains these [such]
provisions, a description of the provisions [them]
must be included.
(D)The outline of coverage for Medicare Select policies
or certificates must [shall] include information
regarding grievance procedures that [which]
meet the requirements of §3.3325(m) of this title [subchapter
] (relating to Medicare Select Policies, Certificates, and
Plans of Operation).
(E)The commissioner adopts [by reference]
the Outline of Coverage form, [Form No.] LHL 050 Rev. 12/17.
This form [06/09, which] contains a chart of benefits
for each of the standard Medicare supplement plans and required disclosures
applicable to policies sold with an effective date for coverage of
June 1, 2010, or later. Issuers must begin using form
LHL 050 Rev. 12/17 no later than July 1, 2018. [The form
is available at www.tdi.state.tx.us/forms/form10other.html.]
Attached Graphic
[(F)The commissioner adopts by reference
the Outline of Coverage form, Form No. LHL 050 Rev. 12/04, which contains
a chart of benefits for each of the standard Medicare supplement plans
and required disclosures applicable to policies sold with an effective
date for coverage prior to June 1, 2010, and on or after March 1,
1992. The form is available at www.tdi.state.tx.us/forms/form10other.html.]
(d)Notice requirements.
(1)As soon as practicable, but no later than 30 days
before [prior to] the annual effective date of any
Medicare benefit changes, every issuer providing Medicare supplement
coverage to a resident of this state must [shall]
notify its policyholders, contract holders, and certificate holders
of modifications it has made to Medicare supplement insurance policies,
contracts, or certificates. The notice must [shall]:
(A)include a description of revisions to the Medicare
program and a description of each modification made to the coverage
provided under the Medicare supplement insurance policy, contract,
or certificate; and
(B)inform each covered person as to when any premium
adjustment is to be made due to changes in Medicare.
(2)The notice of benefit modifications and any premium
adjustments must [shall] be in outline form
and in clear and simple terms so as to facilitate comprehension.
(3)The notice may [shall] not
contain or be accompanied by any solicitation.
(4)Issuers must [shall] comply
with any notice requirements of the MMA.
The agency certifies that legal counsel has reviewed
the proposal and found it to be within the state agency's legal authority
to adopt.
Filed with the Office
of the Secretary of State on December 6, 2017
TRD-201704987 Norma Garcia
General Counsel
Texas Department of
Insurance
Earliest possible date of adoption: January 21, 2018
For further information, please call: (512) 676-6584
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