Section 42.05 - Policy Types(1)General Standards.(a) A policy paying benefits based on standards described as "usual and customary," "reasonable and customary" or words of similar import must define and explain the terms in its outline of coverage;(b) All pre-existing condition provisions must be labeled as "Pre-existing Condition Provision" and appear as a separate paragraph on the first page of the policy;(c) In the event of cancellation or refusal to renew by the carrier, policies providing pregnancy benefits must provide benefits for pregnancy commencing while the policy is in force.(d) A policy provision relating to recurrent confinements or recurrent disabilities will be considered to be in compliance with the provisions of M.G.L. c. 176D if does not specify that such confinements or such disabilities be separated by a period greater than six months.(e) A policy's "free-look" section or right of examination will be considered to be in compliance with the provisions of M.G.L. c. 176D if it is for at least a ten-day period from the date of policy delivery.(2)Minimum Benefits for Specific Types of Policies. (a)Basic Hospital Expense Insurance. Basic hospital expense provides coverage for services rendered while confined in a hospital.(b)Basic Medical-surgical Expense Insurance. Basic medical-surgical insurance provides coverage for in-hospital or surgical health services rendered by a physician or other covered health care provider(c)Hospital Confinement Indemnity Insurance. Hospital confinement indemnity insurance provides coverage on other than an expense-incurred basis while the covered person is confined as a hospital inpatient.(d)Major Medical Expense Insurance. Major medical expense insurance provides coverage for inpatient and outpatient health care services.(e)Specified Disease or Specified Accident Insurance. 1.Specified Disease Coverage. Specified disease coverage provides coverage as described in 211 CMR 146.00. Any policy covering specified diseases may not be sold as Restricted Health Insurance as defined in 211 CMR 42.05(2)(i).2. Specified Accident Insurance provides coverage which is limited to a delineated or defined type of accident, such as an automobile accident or one occurring during a trip.(f)Accident Only Health Insurance. Accident only coverage provides coverage, singly or in combination, for death, dismemberment, disability, or hospital and medical care caused by accident and must comply with the following: 1. Waiting periods are prohibited in accident policies.2. All accident policies shall display prominently in letters at least ¼" high on the first page of the policy the following: "This is an accident only policy and it does not pay benefits in event of sickness."3. Allaccident policies shall be non-cancelable for the life of the insured without any right of the carrier to increase the premium rate.(g)Disability Income Insurance. Disability income insurance provides weekly or monthly benefits to replace income that is lost due to disability resulting from accident and/or sickness. It also includes business expense insurance and business buy-out insurance policies that condition receipt of benefits upon the disability of the insured. To promote clarity and readability, total disability must be defined to make clear the time, if any, for which an insured must be disabled, whether by being unable to engage in his or her own occupation, or in others, for which he or she is qualified by education, training, and experience, or otherwise. Definitions should avoid hard-to-understand expressions like inability to perform "each and every" or "any and every" duty of an insured's occupation. To promote clarity and readability, partial disability, if included, shall be defined in relation to the insured person's inability to perform some part or all of the "major," "important" or "essential" duties of employment or occupation. If a policy covers both total and partialdisability, the partial disability benefit will be considered to be in compliance with the provisions of M.G.L. c. 176D, if it is not contingent upon prior payments for total disability benefits.
The policy must clearly explain all limitations and elimination periods, including elimination period saffecting different levels of benefits. In addition, no benefits can be reduced incoordination with any increased benefits that the insured may receive from the Social Security System after the effective date of the benefit period.
(h)Long-term Care Insurance. Long-term care insurance provides coverage for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services in a setting other than an acute care unit of a hospital as described in 211 CMR 65.00.(i)Restricted Benefit Health Insurance. Any accident or sickness insurance policy not defined under 211 CMR 42.05(1)(a) through (g) must be labeled "Restricted Benefit Health Insurance." 211 CMR 42.05(2)(i) may not be used to issue a policy that is defined in 211 CMR 42.00 or any other statute or regulation and that does not meet the requirements set forth therein.