Bill 777

                    Current Status

Bill Number:               777
Ratification Number:       375
Act Number                 318
Introducing Body:          Senate
Subject:                   Relating to the requirements for issuing
                           group accident and health insurance policies
                           in this state

(A318, R375, S777)

AN ACT TO AMEND SECTION 38-35-940, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE REQUIREMENTS FOR ISSUING GROUP ACCIDENT AND HEALTH INSURANCE POLICIES IN THIS STATE, SO AS TO REQUIRE THAT GROUP MEDICARE SUPPLEMENT INSURANCE MEETS FEDERAL MINIMUM STANDARDS, INCLUDING A SEVENTY-FIVE PERCENT LOSS RATIO.

Be it enacted by the General Assembly of the State of South Carolina:

Group accident and health insurance policies-requirements

Section 1. Section 38-35-940 of the 1976 Code, as last amended by Act 732 of 1976, is further amended by adding:

"(6) A group policy or subscriber contract of accident and health insurance which is advertised, marketed, or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical, or surgical expenses of persons eligible for Medicare by reason of age must equal, and may exceed, the minimum standards for Medicare supplement policies as contained in the National Association of Insurance Commissioners Model Regulation to Implement the Individual Accident and Sickness Insurance Minimum Standards Act, adopted by the National Association of Insurance Commissioners on June 6, 1979, and must include, but shall not be restricted to, the following minimum standards:

(a) Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the sixty-first day through the ninetieth day in any Medicare benefit period;

(b) Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare during use of Medicare's lifetime hospital inpatient reserve days;

(c) Upon exhaustion of all Medicare hospital inpatient coverage including the lifetime reserve days, coverage of ninety percent of all Part A Medicare eligible expenses for hospitalization not covered by Medicare, subject to a lifetime maximum benefit of an additional three hundred sixty-five days;

(d) Coverage of twenty percent of the amount of Medicare eligible expenses under Part B regardless of hospital confinement, subject to a maximum calendar year out-of-pocket deductible of two hundred dollars of such expenses and a maximum benefit of at least five thousand dollars per calendar year;

(e) A pre-existing condition shall not be defined more restrictively than a condition for which medical advice was given or for which treatment was recommended by or received from a physician within six months before the effective date of an insured person's coverage. A claim for losses incurred more than six months from the effective date of an insured person's coverage shall not be denied for a pre-existing condition;

(f) The return to insured persons in the form of aggregate benefits, as estimated for the entire period for which rates are computed to provide coverage, on the basis of incurred claims experience and earned premiums for that period and in accordance with accepted actuarial principles and practices, of:

(1) at least seventy-five percent of aggregate premiums collected; and

(2) for coverage issued as a result of solicitations of individuals through the mail or mass media advertising, including both print and broadcast advertising, at least sixty percent of aggregate premiums collected.

For the purposes of this item (6), the term `group policy or contract of accident and health insurance' does not include:

(i) A policy or contract of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or a combination thereof for employees or former employees, or a combination of employees and former employees, or for members or former members, or a combination of members and former members, of the labor organizations, or

(ii) A policy or contract of any professional, trade, or occupational association for its members or its former or retired members, or a combination of members and former or retired members, if the association:

a. is composed of individuals all of whom are actively engaged in the same profession, trade, or occupation;

b. has been maintained in good faith for purposes other than obtaining insurance; and

c. has been in existence for at least two years prior to the date of its initial offering of the policy or plan to its members."

Time effective

Section 2. This act shall take effect upon the approval by the Governor.