S.D. Admin. R. 20:06:55:14

Current through Register Vol. 51, page 67, December 16, 2024

Section 20:06:55:14 - Rescissions

A policy, certificate, or contract of insurance may not be rescinded unless the individual performs an act, practice, or omission that constitutes fraud or unless the individual makes an intentional misrepresentation of a material fact. A rescission is any cancellation or discontinuance of coverage under any individual or group health insurance policy or certificate, other than a plan of excepted benefits, that has a retroactive effect. Rescission does not include a cancellation or discontinuance of coverage under a health policy or certificate if:

(1) The cancellation or discontinuance of coverage has only a prospective effect;

(2) 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; or

(3) The health benefit plan covers only active employees and, if applicable, dependents and those covered under continuation coverage provisions, the employee pays no premiums for coverage after termination of employment and the cancellation or discontinuance of coverage is effective retroactively back to the date of termination of employment due to a delay in administrative record-keeping.

A health carrier shall provide at least thirty days advance notice to each plan enrollee or covered person who would be affected by the proposed rescission of coverage before coverage under the plan may be rescinded. If the proposed rescission is with respect to a group plan, the notice is required regardless of whether the rescission applies only to an individual within the group or to the entire group.

Except for those coverages that are excepted benefits pursuant to SDCL subdivision 58-17-69(13), this section applies to any plan of individual or group health insurance coverage and to any health benefit plan subject to the provisions of SDCL 58-17-66 to 58-17-87, inclusive, and also applies to any employer based health plan, including health benefit plans subject to the provisions of SDCL 58-18-42.

S.D. Admin. R. 20:06:55:14

37 SDR 63, effective 9/23/2010; 37 SDR 111, effective 12/7/2010.

General Authority: SDCL 58-17-87, 58-18-79.

Law Implemented: SDCL 58-17-87, 58-18-51.1, 58-18-79.