Section 45-08-02-07 - Continuance of coverage in situations involving replacement of one carrier by another1. This section shall indicate the carrier responsible for liability in those instances in which one carrier's (succeeding carrier) contract replaces a plan of similar benefits of another (prior contract). 2. 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 is the same whether the group policyholder or other entity secures replacement coverage from a new carrier, self-insures, or foregoes the provision of coverage. 3. Liability of succeeding carrier. a.(1) If the individual was validly covered under the prior plan on the date of discontinuance, each individual who is eligible for coverage in accordance with the succeeding carrier's plan of benefits with respect to the class or classes of individuals eligible for coverage under the succeeding carrier's plan and any actively-at-work and nonconfinement rules and requests enrollment shall be enrolled and covered by the succeeding carrier's plan of benefits. (2) In the case of health insurance coverage: (a) A succeeding carrier shall not have any nonconfinement rules in its plan of benefits; and (b) Any actively-at-work rules provided in the succeeding carrier's plan of benefits shall provide that absence from work due to any health status-related factor be treated as being actively at work. (3) For purposes of this paragraph, "health status-related factor" means any of the following factors: (b) Medical condition, including both physical and mental illnesses; (d) Receipt of health care; (g) Evidence of insurability, including conditions arising out of acts of domestic violence; or b. Each person not covered under the succeeding carrier's plan of benefits in accordance with subdivision a 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. 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. (1) The minimum level of benefits 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 by the prior plan. (2) Coverage must be provided by the succeeding carrier until at least the earliest of the following dates: (a) The date the individual becomes eligible under the succeeding carrier's plan as described in subdivision a. (b) 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 eligible dependent, as the case may be). (c) In the case of an individual who was totally disabled, and in the case of a type of coverage for which section 45-08-02-06 requires an extension of accrued liability, the end of any period of extension or accrued liability which is required of the prior carrier by section 45-08-02-06 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 section 45-08-02-06 at the time the prior plan was discontinued and replaced by the succeeding carrier's plan. c. For health insurance coverage, in the case of an individual who was totally disabled at the time the prior carrier's plan was discontinued and replaced by the succeeding carrier's plan, and in the case in which section 45-08-02-06 requires an extension of benefits or accrued liability, the minimum level of benefits to be provided by the succeeding carrier shall be the applicable level of benefits of the prior carrier's plan reduced by any benefits paid by the prior plan. d. In the case of a preexisting conditions limitation included in the succeeding carrier's plan, the level of benefits 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 lessor of: (1) The benefits of the new plan determined without application of the preexisting conditions limitation; and (2) The benefits of the prior plan. e. The succeeding carrier, in applying any deductibles or coinsurance amounts applicable to the out-of-pocket maximums 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 or coinsurance amounts applicable to the out-of-pocket maximums, the credit shall apply for the same or overlapping benefits periods and must be given for expenses actually incurred and applied against the deductible or coinsurance provisions of the prior carrier's plan during the ninety 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 or coinsurance provision. f. In any situation where a determination of the prior carrier's benefit 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 purposes 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. N.D. Admin Code 45-08-02-07
Effective March 1, 1988; amended effective March 1, 2004.General Authority: NDCC 26.1-04-08, 28-32-02
Law Implemented: NDCC 26.1-04-03(7), 26.1-30-19, 26.1-33-11, 26.1-33-12, 26.1-36-22, 26.1-36-23, 26.1-36-23.1