230 R.I. Code R. 230-RICR-20-30-1.8

Current through December 3, 2024

Section 230-RICR-20-30-1.8 - Group and Blanket Health Benefit Contract Standard Provisions

1.8.1General Provisions

A. No group or blanket health benefit contract shall be delivered or issued for delivery in the state unless it contains in substance the following provisions, or provisions which in the opinion of the Director are more favorable to the persons covered; or at least as favorable to the persons covered and more favorable to the master contractholder. PROVIDED; HOWEVER, that:

1. the standard provisions required for individual health benefit contracts shall not apply to group health benefit contracts;

2. if any provision of this section is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of contract, the insurer, with the approval of the Director, shall omit from such contract any inapplicable provision or part of a provision, and shall modify any inconsistent provision or part of a provision in such a manner as to make the provision as contained in the contract consistent with the coverage provided by the contract;

3. §1.8.1(A)(6)(g) of this Part, below, shall be optional with respect to blanket contracts;

4. if the group contract (but not a blanket contract) provides hospital, surgical, or major medical benefits or any combination of these coverages for other than specified diseases or accidental injuries only, it shall also contain a conversion privilege conforming to the requirements of §1.8.2 of this Part;

5. if a contract subject to this section shall contain other benefits in addition to health benefits, some or all of the provisions required in this section may be restricted so as to apply to health benefits only, and other appropriate provisions may be included which apply to non-health benefit portions of the contract.

6. The text of all master contract, certificate and subscriber contract forms, including any riders or endorsements to be attached to such forms shall be plainly printed in light-face type of a style in general use, the size of which shall be uniform and not less than ten (10) point with a lower-case unspaced alphabet length not less than one hundred and twenty (120) point (the "text" shall include all printed matter except the name and address of the insurer, any specific information required by law or regulation to be in some other type, the name or title of the contract, certificate, etc., and captions and subcaptions). The effective date of this § 1.8 of this Part shall be the same as that generally provided in § 1.11 of this Part for filing of forms.

a. A provision that the master contractholder is entitled to a grace period of thirty-one (31) days or, at the option of the insurer, one month for the payment of any premium due except the first, during which grace period the contract shall continue in force, unless the master contractholder shall have given the insurer written notice of discontinuance of the coverage in advance of the date of discontinuance and in accordance with the terms of the contract. The contract may provide that the master contractholder shall be liable to the insurer for the payment of a pro rata premium for the time the coverage was in force during such grace period.

b. A provision that validity of the contract shall not be contested, except for non-payment of premiums, after it has been in force for two years from its date of issue; and that no statement made for the purpose of effecting insurance coverage under the contract with respect to a person shall be used to avoid the insurance with respect to which such statement was made or to reduce benefits thereunder after such insurance has been in force for a period of two (2) years during such person's lifetime, nor unless such statement is contained in a written instrument signed by the person making such statement and a copy of that instrument is or has been furnished to him.

c. A provision that a copy of the application, if any, of the master contractholder shall be attached to the master contract when issued, and that all statements made by the master contractholder or by the persons covered shall be deemed representations and not warranties.

d. A provision that no agent has authority to change the contract or waive any of its provisions and that no change in the contract shall be valid unless approved by an officer of the insurer and evidenced by an endorsement on the contract, or by rider or amendment to the contract signed by the insurer, provided that any such amendment which reduces or eliminates coverage was either requested in writing by the master contractholder or signed by the master contractholder.

e. A provision specifying the additional exclusions or limitations, if any, applicable under the contract with respect to a disease or physical condition of a person, not otherwise excluded from the person's coverage by name or specific description effective on the date of the person's loss, which existed prior to the effective date of the person's coverage under the contract. Any such exclusion or limitation may only apply to a disease or physical condition for which medical advice or treatment was received by the person during the twelve (12) months prior to the effective date of his coverage. In no event shall such exclusion or limitation apply to loss incurred after the earlier of (a) the end of a continuous period of twelve (12) months commencing on or after the effective date of the person's coverage during all of which the person has received no medical advice or treatment in connection with such disease or physical condition and (b) the end of the two (2) year period commencing on the effective date of the person's coverage.

f. A provision specifying the ages, if any, to which the insurance provided shall be limited; and the ages, if any, for which additional restrictions are placed on benefits, and the additional restrictions placed on the benefits at such ages. If the premiums or benefits vary by age, there shall also be a provision specifying an equitable adjustment of premiums or of benefits, or both, to be made in the event the age of a covered person has been misstated, such provision to contain a clear statement of the method of adjustment to be used. In no event, however, shall coverage be required for any person during any period when, according to his correct age, coverage would otherwise not be provided for him under the contract.

g. (Optional with respect to blanket contracts) A provision that the insurer will issue to the master contractholder for delivery to each person insured, a certificate or subscriber contract, which may be in summary form, setting forth the essential features of the coverage and to whom the benefits are payable. If family members or dependents are included in the coverage, only one certificate or subscriber contract need be issued for each family unit.

h. A provision that written notice of claim must be given to the insurer within twenty (20) days after the occurrence or commencement of any loss covered by the contract. Failure to give notice within such time shall not invalidate nor reduce any claim if it shall be shown not to have been reasonably possible to give such notice and that notice was given as soon as was reasonably possible.

i. A provision that the insurer will furnish to the person making the claim, or to the master contractholder for delivery to such person, such forms as are usually furnished by it for filing proof of loss. If such forms are not furnished before the expiration of fifteen (15) days after the insurer received notice of any claim under the contract, the person making such claim shall be deemed to have complied with the requirements of the contract as to proof of loss, upon submitting within the time fixed in the contract for filing proof of loss, written proof covering the occurrence, character and extent of the loss for which claim is made.

j. A provision that, in the case of claim for loss, written proof of such loss must be furnished to the insurer within ninety (90) days after the date of such loss. Failure to furnish such proof within such time shall not invalidate nor reduce any claim if it was not reasonably possible to furnish such proof within such time, provided such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity of the claimant, later than one (1) year from the time proof is otherwise required.

k. A provision that all benefits payable under the contract will be payable not more than sixty (60) days after receipt of such proof.

l. A provision that all indemnities of the contract are payable to the insured, except that the master contract may provide that all or any portion of any benefits on account of hospital, medical, surgical or other services may, at the insurer's option, be paid directly to the hospital or person rendering such services. Any payment made by the insurer in good faith pursuant to the foregoing provisions shall discharge an insurer's obligation with respect to the extent of such payment.

m. A provision that the insurer shall have the right and opportunity to examine the person of the individual for whom claim is made when and so often as it may reasonably require during the pendency of claim under the contract.

n. A provision that no action at law or in equity shall be brought to recover on the contract prior to the expiration of sixty (60) days after proof of loss has been filed in accordance with the requirements of the contract and that no such action shall be brought at all unless brought within three (3) years from the expiration of the time within which proof of loss is required by the contract.

1.8.2Conversion Privilege

A. A group health benefit contract delivered or issued for delivery in the state which provides hospital, surgical, or major medical expense benefits, or any combination of these coverages, but not a contract which provides benefits for specified disease or for accidental injuries only, shall provide that an employee or member whose insurance under the group contract has been terminated for any reason other than discontinuance of the group contract in its entirety or with respect to an insured class, and who has been continuously covered under the group contract (and under any group contract providing similar benefits which it replaces) for at least three months immediately prior to termination, shall be entitled to have issued to him by the insurer a health benefit contract (hereafter referred to as the converted contract).

B. An employee or member shall not be entitled to have a converted contract issued to him if termination of his insurance under the group contract occurred because:

1. he failed to pay any required contribution, or

2. any discontinued group coverage was replaced by similar group coverage within thirty-one days.

C. Issuance of a converted contract shall be subject to the following conditions:

1. Written application for the converted contract shall be made and the first premium therefor paid to the insurer not later than thirty-one (31) days after such termination.

2. The converted contract shall be issued without evidence of insurability.

3. The premium for the converted contract shall be determined in accordance with the insurer's table of premium rates applicable to the age and class of risk of each person to be covered under the converted contract and to the type and amount of insurance provided.

4. The effective date of the converted contract shall be the day following the termination of coverage under the group contract.

5. The converted contract shall cover the employee or member and his dependents who were covered by the group contract on the date of termination of coverage. At the option of the insurer, a separate converted contract may be issued to cover any dependent.

6. The insurer shall not be required to issue a converted contract covering any person if such person is or could be covered by Medicare (Title XVIII of the United States Social Security Act as added by the Social Security Amendments of 1965 or as later amended or superseded).

a. Furthermore, the insurer shall not be required to issue a converted contract covering any person if

(1) such person is covered for similar benefits by another hospital, surgical, medical or major medical expense contract; or

(2) such person is eligible for similar benefits (whether or not covered therefor) under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis, or

(3) similar benefits are provided for or available to such person, pursuant to or in accordance with the requirement of any state or federal law (benefits under R.I. Gen. Laws §42-62-6 shall not be deemed "similar benefits" for purposes of this subsection), and

b. The benefits provided under the sources referred to in §1.8.2(C)(6)(a)(1) of this Part for such person or benefits provided or available under the sources referred to in §1.8.2(A)(6)(a)(2) and (3) of this Part for such person, together with the benefits provided by the converted contract would result in overinsurance according to the insurer's standards. The insurer's standards must bear some relationship to actual health care costs in the area in which the insured lives at the time of conversion and must be filed with the Director of Business Regulation prior to their use in denying coverage.

7. A converted contract may include a provision whereby the insurer may request information in advance of any premium due date of such contract of any person covered thereunder as to whether:

a. he is covered for similar benefits by another health benefit contract,

b. he is covered for similar benefits under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis or

c. similar benefits are provided for or available to such person, pursuant to or in accordance with the requirements of any state or federal law.

d. The converted contract may provide that the insurer may refuse to renew the contract or the coverage of any person insured thereunder for the following reasons only:

(1) either the benefits provided under the sources referred to in §§1.8.2(C)(7)(a) and (b) of this Part above for such person or benefits provided or available under the sources referred to in 1.8.2(C)(7)(c) of this Part above for such person, together with the benefits provided by the converted contract, would result in overinsurance according to the insurer's standards on file with the Director of Business Regulation, or the converted contractholder fails to provide the requested information.

(2) fraud or material misrepresentation in applying for any benefits under the converted contract;

(3) eligibility of the insured person for coverage under Medicare (Title XVIII of the United States Social Security Act as amended by the Social Security Amendments of 1965 or as later amended or superseded) or under any other state or federal law providing for benefits similar to those provided by the converted contract;

(4) other reasons approved by the Director of Business Regulation.

8. An insurer shall not be required to issue a converted contract which provides benefits in excess of those provided under the group contract form which conversion is made.

9. The converted contract shall not exclude a pre-existing condition not excluded by the group contract. However, the converted contract may provide that any hospital, surgical or medical benefits payable thereunder may be reduced by the amount of any such benefits payable under the group contract after termination of the individual's insurance thereunder. The converted contract may also include provisions so that during the first contract year the benefits payable under the converted contract, together with the benefits payable under the group contract, shall not exceed those that would have been payable had the individual's insurance under the group contract remained in force and effect.

10. Subject to the provisions and conditions of § 1.8 of this Part, if the group health benefit contract from which conversion is made insured the employee or member for basic hospital or surgical expense insurance, the employee or member shall be entitled to obtain a converted contract providing, at his option, coverage on an expense incurred basis or equivalent service benefits under any one of the plans meeting the following requirements:

a. Plan A

(1) hospital room and board daily expense benefits in a maximum dollar amount approximately the average semi-private rate charged in this state, for a maximum duration of at least seventy days,

(2) miscellaneous hospital expense benefits of a maximum amount of ten times the hospital room and board daily expense benefits, or, at the insurer's option, full benefits for ancillary services for the period covered §1.8.2(C)(10)(a)(1) of this Part, and,

(3) surgical operation expense benefits according to a surgical schedule consistent with those customarily offered by the insurer under group or individual health benefit contracts and providing a maximum benefit of nine hundred dollars, or, at the insurer's option, full coverage of the usual and customary fee for surgical operations, or

b. Plan B

(1) hospital room and board daily expense benefits in a maximum amount equal to seventy five percent (75%) of the maximum dollar amount determined for Plan A, for a maximum duration of at least seventy (70) days,

(2) miscellaneous hospital expense benefits of a maximum amount of ten times the hospital room and board daily expense benefits, or, at the insurer's option, benefits covering seventy five percent (75%) of the ancillary services for the period covered by §1.8.2(C)(10)(b)(1) of this Part, and

(3) surgical operation expense benefits according to a surgical schedule consistent with those customarily offered by the insurer under group or individual health benefit contracts and providing a maximum benefit of six hundred seventy-five dollars, or, at the insurer's option, benefits equivalent to 75% of the usual and customary fee for surgical operations, or

c. Plan C

(1) hospital room and board daily expense benefits in a maximum dollar amount equal to fifty percent (50%) of the maximum dollar amount determined for Plan A, for a maximum duration of at least seventy days,

(2) miscellaneous hospital benefits of a maximum amount of ten times the hospital room and board daily expense benefits, or, at the insurer's option, benefits covering fifty percent (50%) of the ancillary services for the period covered by §1.8.2(C)(10)(c)(1) of this Part, and

(3) surgical operation expense benefits according to a surgical schedule consistent with those customarily offered by the insurer under group or individual health benefit contracts and providing a maximum benefit of four hundred fifty dollars, or at the insurer's option, benefits equivalent to seventy five percent (75%) of the usual and customary fee for surgical operations.

d. The maximum dollar amount in Plan A shall be determined by the Director of Business Regulation and may be redetermined by him from time to time as to converted contracts issued subsequent to such redetermination. Such redetermination shall not be made more often than once in three (3) years. The maximum dollar amounts in Plans A, B and C shall be rounded to the nearest multiple of ten dollars ($10).

(1) Note: As of December 14, 1978, it has been determined that the maximum dollar amounts, rounded as required, are as follows:

(AA) Plan A $130.00

(BB) Plan B $100.00

(CC) Plan C $70.00

(2) This determination shall be effective until October 9, 1981, and it shall remain in effect thereafter until a redetermination shall be made by the Director.

11. Subject to the provisions and conditions of § 1.8 of this Part, if the group health benefit contract from which conversion is made insures the employee or member for major medical expense insurance, the employee or member shall be entitled to obtain a converted contract providing catastrophic or major medical coverage under a plan meeting the following requirements:

a. A maximum benefit at least equal to either, at the option of the insurer, §1.8.2(C)(11)(a)(1) or (2) of this Part below:

(1) The smaller of the following amounts:

(AA) The maximum benefit provided under the group contract.

(BB) A maximum payment of ten thousand dollars ($10,000) per covered person for all covered medical expenses incurred during the covered person's lifetime.

(2) The smaller of the following amounts:

(AA) The maximum benefit provided under the group contract.

(BB) A maximum payment of ten thousand dollars ($10,000) for each unrelated injury or sickness.

b. Payment of benefits at the rate of eighty percent (80%) of covered medical expenses which are in excess of the deductible. Payment of benefits for outpatient treatment of mental illness, if provided in the converted contract, may be at a lesser rate but not less than fifty percent (50%) and may be subject to a maximum of no more than one thousand dollars ($1,000) in any one benefit period.

c. A deductible for each benefit period which, at the option of the insurer, shall be:

(1) the sum of the benefits deductible and one hundred dollars ($100), or

(2) the corresponding deductible in the group contract. The term "benefits deductible," as used herein, means the value of any benefits provided on an expense incurred or a service benefit basis which are provided with respect to covered medical expenses by any other health benefit contract, or any other plan or program whether on an insured or uninsured basis, or in accordance with the requirements of any state or federal law except that benefits provided under R.I. Gen. Laws §42-62-6 shall not be included in the "benefits deductible", and, if pursuant to §1.8.2(C)(12) of this Part, the converted contract provides both basic hospital or surgical coverage and major medical coverage, the value of such basic benefits. If the maximum benefit is determined by §1.8.2(C)(11)(a)(2) of this Part, the insurer may require that the deductible be satisfied during a period of not less than three months if the deductible is one hundred dollars ($100) or less, and not less than six months if the deductible exceeds one hundred dollars ($100).

d. The benefit period shall be each calendar year when the maximum benefit is determined by §1.8.2(C)(11)(a)(1) of this Part or twenty-four months when the maximum benefit is determined §1.8.2(C)(11)(a)(2) of this Part.

e. The term "covered medical expenses," as used above, shall include at least, in the case of hospital room and board charges, the lesser of the dollar amount in Plan A and the average semi-private room and board rate for the hospital in which the individual is confined and twice such amount for charges in an intensive care unit. Any surgical schedule shall be consistent with those customarily offered by the insurer under group or individual health insurance contracts and must provide at least a one thousand two hundred dollar ($1,200) maximum benefit.

12. The conversion privilege required by § 1.8 of this Part shall, if the group health benefit contract insures the employee or member for basic hospital or surgical expense insurance as well as major medical expense insurance, make available the plans of benefits set forth in conditions 10 and 11 hereof. At the option of the insurer, such plans of benefits may be provided under one contract. Instead of the plans of benefits set forth in §1.8.2(C)(10) and (11) of this Part the insurer may provide a contract of comprehensive benefits without first-dollar coverage. Such a contract shall conform to the requirements of §1.8.2(C)(11), except that the maximum payment shall be two hundred fifty thousand dollars ($250,000), where ten thousand dollars ($10,000) is established in §1.8.2(C)(11) of this Part.

13. The insurer may, at its option, also offer alternative plans for group health conversion in addition to those required by § 1.8 of this Part.

14. In the event coverage would be continued under the group contract on an employee following his retirement prior to the time he is or could be covered by Medicare, he may elect, in lieu of such continuation of group insurance, to have the same conversion rights as would apply had his insurance terminated by reason of termination of employment or membership.

15. The converted contract may provide for reduction of coverage on any person upon his eligibility for coverage under Medicare (Title XVIII of the United States Social Security Act as added by the Social Security Amendments of 1965 or as later amended or superseded) or under any other state or federal law providing for benefits similar to those provided by the converted contract, except that benefits provided under R.I. Gen. Laws §42-62-6 shall not be considered to be "similar" for purposes of such reduction.

16. Subject to the conditions set forth above, the conversion privilege shall also be available:

a. to the surviving spouse, if any, at the death of the employee or member, with respect to the spouse and such children whose coverage under the group contract terminates by reason of such death, otherwise to each surviving child whose coverage under the group contract terminates by reason of such death, or, if the group contract provides for continuation of dependents coverage following the employee's or members' death, at the end of such continuation,

b. to the spouse of the employee or member upon termination of coverage of the spouse, while the employee or member remains covered under the group contract, by reason of ceasing to be a qualified family member under the group contract, with respect to the spouse and such children whose coverage under the group contract terminates at the same time, or

c. to a child solely with respect to himself upon termination of his coverage by reason of ceasing to be a qualified family member under the group contract, if a conversion privilege is not otherwise provided above with respect to such termination.

17. If the benefit levels required in §1.8.2(C)(10) of this Part above exceed the benefit levels provided under the group contract, the conversion may offer benefits which are substantially similar to those provided under the group contract in lieu of those required in §1.8.2(C)(10) of this Part.

18. The insurer may elect to provide group insurance coverage in lieu of the issuance of a converted individual contract.

19. A notification of the conversion privilege shall be included in each certificate of coverage or group subscriber contract.

20. The insurer may elect to issue a converted contract itself, or it may arrange with another appropriately licensed insurer for such other insurer to issue the converted contract required by § 1.8 this Part.

21. A converted contract which is delivered outside this state must be on a form which could be delivered in such other jurisdiction as a converted contract had the group contract been issued in that jurisdiction. Except for this requirement, converted contracts issued outside this state shall not be required to be in accordance with §1.8.2 of this Part.

1.8.3Notice of Group Health Conversion

A. An employee or member who is entitled to make application for a converted health benefit contract in accordance with the provision of §1.8.2 of this Part shall be given written notice of the existence of the conversion privilege at least fifteen (15) days prior to the expiration of the thirty-one (31) day conversion period established by the group contract. If the employee or member is not given notice of his conversion rights as provided above, the employee or member shall have an additional period within which to exercise such conversion privilege. This additional period shall expire fifteen (15) days after the employee or member has been given such notice, or ninety (90) days after termination of his coverage under the group contract, whichever comes earlier.

B. Written notice presented to the employee or member by his employer, the master contractholder or insurer or mailed by his employer, the master contractholder or insurer to the last known address of the employee or member, as furnished by the master contractholder, shall constitute the giving of notice for the purpose of this provision. If an employee or member is permitted an additional period for conversion, as provided herein, and if written application for the converted contract, accompanied by the initial premium, is made within the additional period, the effective date of the converted contract shall be the day following his termination of insurance under the group contract.

230 R.I. Code R. 230-RICR-20-30-1.8