211 CMR, § 71.13

Current through Register 1531, September 27, 2024

Section 71.13 - Required Disclosure Provisions

(1)General Rules.

(a) Each Medicare Supplement Insurance Policy covered by 211 CMR 71.00 shall have an outline of coverage. The outline of coverage is prescribed in 211 CMR 71.13(2). This outline of coverage shall not be part of a Policy.

(b) Issuers shall provide an outline of coverage to all Applicants at the time the application is presented to the prospective Applicant and, except for direct response Policies, shall obtain an acknowledgment of receipt of the outline of coverage from the Applicant.

(c) If the Policy issued is different from the Policy for which an application was made and for which an outline of coverage was previously issued, a revised outline of coverage, properly describing the Policy, shall be attached to the Policy. Such revised outline of coverage shall contain the following statement in no less than 12-point type, immediately above the company name:

"NOTICE: Read this outline of coverage summary carefully. It is not identical to the summary provided upon application and the coverage originally applied for has not been issued."

(d) Except for riders or endorsements by which the Issuer effectuates a request made in writing by the Insured, exercises a specifically reserved right under a Medicare Supplement Insurance Policy, or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits, all riders or endorsements added to a Medicare Supplement Insurance Policy after date of issue or at reinstatement or renewal which reduce or eliminate benefits or coverage in the Policy shall require a signed acceptance by the Insured. After the date of Policy issue, any rider or endorsement that increases benefits or coverage with a concomitant increase in premium during the Policy term shall be agreed to in writing signed by the Insured, unless the benefits are required by the minimum standards for Medicare Supplement Insurance Policies, or if the increased benefits or coverage is required by law. Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the Policy.

(e) Each Policy shall have a notice prominently printed on the first page of the Policy or attached thereto stating in substance that the Policyholder shall have the right to return the Policy within 30 days of its delivery and to have the premium refunded if, after examination of the Policy, the insured person is not satisfied for any reason.

(f) Each Policy shall not provide for the payment of benefits based on standards described as usual and customary", "reasonable and customary", or words of similar import.

(g) Each Policy shall have a specification page and shall provide the following information:

1. The Policy number;

2. The name of the Insured;

3. The effective date, assuming the premium for the Policy has been paid on or before that date; and

4. A listing of the premium or premiums payable and the periods to which they apply.

(h) No misleading Policy names shall be used. A carrier's Policy name shall not misrepresent the extent of benefits actually provided. Carriers shall not use the name "Medicare Supplement", "Medigap" or similar terms except to describe a Policy that complies with 211 CMR 71.00.

(i) All outlines of coverage for Medicare Supplement Insurance must be filed with the Division of Insurance pursuant to 211 CMR 71.12(8)(l).

(2)Disclosure Standards.

(a) Applicants and Insureds are to be clearly informed of the basic nature and provisions of Medicare Supplement Insurance Policies through an outline of coverage for each Policy which summarizes its contents. The outline of coverage shall simply and accurately describe benefits provided by Medicare. The outline of coverage shall also accurately describe the Medicare Supplement Insurance Policy benefits along with benefit limitations.

(b) The outline of coverage consists of three parts as determined by the Commissioner: a cover page (211 CMR 71.13(2)(c)1); text of outline of coverage, including premium information, disclosures and Massachusetts Summary (211 CMR 71.13(2)(c)2.); and charts (211 CMR 71.13(2)(c)3). The premium information, disclosures and Massachusetts Summary portions of the outline of coverage shall be in the language and format prescribed below in no less than 12-point type. Consistent with federal law, as of January 1, 2006, all Medicare Supplement Core and Medicare Supplement 1 plans prescribed pursuant to 211 CMR 71.00 shall be shown on the cover page, and the plan(s) that are offered by the insurer shall be prominently identified. Premium information for plans that are offered shall be shown on the cover page and shall be prominently displayed. The premium and mode shall be stated for all plans that are offered to the prospective Applicant. All possible premiums for the prospective Applicant shall be illustrated. The outline of coverage, including the precise format and language to be used, is set out below in 211 CMR 71.13(2)(c).

(c)Outline of Coverage. The following items shall be included in the outline of coverage in the order prescribed below:

1.Cover Page. [The cover page shall be in the precise format and language as determined by the Commissioner]

2.Text of Outline of Coverage:

MASSACHUSETTS MEDICARE SUPPLEMENT INSURANCE OUTLINE OF COVERAGE

(ISSUER'S NAME)

(Issuer's Policy Name and Number)

Policy Category: MEDICARE SUPPLEMENT INSURANCE

"NOTICE TO BUYER: This Policy may not cover all of the costs associated with medical care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all Policy limitations."

PREMIUM INFORMATION

We [insert Issuer' s name] can only raise your premium if we raise the premium for all Policies like yours in Massachusetts, and if approved by the Commissioner of Insurance. If you choose to pay your premium on a quarterly, semiannual, or annual basis, upon your death, we will refund the unearned portion of the premium paid. If you choose to pay your premium on a quarterly, semiannual, or annual basis and you cancel your Policy, we [insert either will or will not] refund the unearned portion of the premium paid. In the case of death [insert if the unearned portion of the premium will be refunded if coverage is canceled: or your cancellation of the Policy] the unearned portion of the premium will be refunded [insert on a pro rata basis or insert methodology which has been submitted to and approved by the Commissioner].

DISCLOSURES

Use this outline to compare benefits and premiums among Policies.

READ YOUR POLICY VERY CAREFULLY

This is only an outline describing your Policy's most important features. The Policy is your insurance contract. You must read the Policy itself to understand all of the rights and duties of both you and your insurance company.

RIGHT TO RETURN POLICY

If you find that you are not satisfied with your Policy, you may return it to [insert Issuer's address]. If you send the Policy back to us within 30 days after you receive it, we will treat the Policy as if it had never been issued and return all of your payments.

POLICY REPLACEMENT

If you are replacing another health insurance Policy, do NOT cancel it until you have actually received your new Policy and are sure you want to keep it. If you cancel your present Policy and then decide that you do not want to keep your new Policy, it may not be possible to get back the coverage of the present Policy.

If you newly enroll in a Medicare Supplement 1 plan and you became Medicare Eligible before January 1, 2020, you will not be able to switch into the same company's Medicare Supplement 1A plan until you have been covered under the Medicare Supplement 1 plan for a period of at least 12 months.

NOTICE

This Policy may not fully cover all of your medical costs.

[for agents:]

Neither [insert company's name] nor its agents are connected with Medicare.

[for direct response:]

[insert company' s name] is not connected with Medicare.

This outline of coverage does not give all the details of Medicare coverage. Contact your local Social Security Office or consult Medicare & You for more details.

COMPLETE ANSWERS ARE VERY IMPORTANT

When you fill out the application for the new Policy, be sure to answer truthfully and completely all questions. The company may cancel your Policy and refuse to pay any claims if you leave out or falsify important information.

Review the application carefully before you sign it. Be certain that all information has been properly recorded.

[The term "Certificate" should be substituted for the word "Policy" throughout the outline of coverage where appropriate.]

[The Medicare Supplement outline of coverage shall include the following statement, entitled Massachusetts Summary. The provision concerning "Complaints" must be set forth in a separate paragraph.]

MASSACHUSETTS SUMMARY

The Commissioner of Insurance has set standards for the sale of Medicare Supplement Insurance Policies. Such Policies help you pay hospital and doctor bills, and some other bills, that are not covered in full by Medicare. Please note that the benefits provided by Medicare and this Medicare Supplement Insurance Policy may not cover all of the costs associated with your treatment. It is important that you become familiar with the benefits provided by Medicare and your Medicare Supplement Insurance Policy. This Policy summary outlines the different coverages you have if, in addition to this Policy, you are also covered by Part A (hospital bills, mainly) and Part B (doctors' bills, mainly) of Medicare.

Under M.G.L. c. 112, § 2, no physician who agrees to treat a Medicare beneficiary may charge to or collect from that beneficiary any amount in excess of the reasonable charge for that service as determined by the United States Secretary of Health and Human Services. This prohibition is commonly referred to as the ban on balance billing. A physician is allowed to charge you or collect from your insurer a copayment or coinsurance for Medicare-covered services. However, if your physician charges you or attempts to collect from you an amount which together with your copayment or coinsurance is greater than the Medicare-approved amount, please contact the Board of Registration in Medicine at [insert the telephone number for the Massachusetts Board of Registration in Medicine regarding licensing].

We cannot explain everything here. Massachusetts law requires that personal insurance Policies be written in easy-to-read language. So, if you have questions about your coverage not answered here, read your Policy. If you still have questions, ask your agent or company. You may also wish to get a copy of Medicare & You, a small book put out by Medicare that describes Medicare benefits.

THE BENEFITS TO PREMIUM RATIO FOR EACH POLICY SOLD is ___%.

[Insert here the lifetime aggregate anticipated loss ratio from 211 CMR 71.12(10)(a). If the ratio is different for different Policy forms, then separately specify the ratio for each Policy form. Heading should be in Boldface type.]

This means that during the anticipated life of your Policy and others just like it, the company expects to pay out $ _______ in claims made by you and all other Policyholders for every $100 it collects in premiums. The minimum ratio allowed for Policies of this type is ___%. A higher ratio is to your advantage as long as it allows the company a reasonable return so that the product remains available.

[If the ratio is different for different Policy forms, then provide a separate paragraph for each Policy form.]

COMPLAINTS

If you have a complaint, call us at [area code and telephone number] or your agent. If you are not satisfied, you may write or call the Massachusetts Division of Insurance, [insert the address of the Massachusetts Division of Insurance] or call [insert the telephone number of the consumer helpline at the Massachusetts Division of Insurance].

3.Charts

[Insert here a comparison of the benefits available under Medicare A and B, and the three Medicare Supplement Insurance Policies in the form prescribed by the Commissioner.]

(d)Notice Requirements.

1.Notice of Changes. As soon as practicable, but no later than 30 days prior to the annual effective date of any Medicare benefit changes, every Issuer providing Medicare Supplement Insurance or benefits to a resident of Massachusetts shall notify its Insureds of modifications it has made to its Medicare Supplement Insurance Policies as a result of any changes to the Medicare program or to 211 CMR 71.00. The notice shall be in a format prescribed by the Commissioner. The notice shall:

a. Include a separate description of revisions to the Medicare program, if any, and a description of each modification made to the coverage provided under the Medicare Supplement Insurance Policy, as well as how those changes affect the premium, if at all. If there is no change in the premium, the notice must explain why not.

b. Inform each Insured as to when a premium adjustment, if any, will be made due to changes in Medicare benefits or the Medicare Supplement Insurance Policy.

c. Be in outline form and in clear and simple terms so as to be easy to read.

d. Be clearly labeled and shall not contain or be accompanied in the same mailing by any solicitation or other notices.

2.Revised Policy Form. No later than 90 days after the date of approval of Medicare Supplement Insurance rates, every Issuer providing Medicare Supplement Insurance, upon satisfying the filing and approval requirements of 211 CMR 71.00, et seq. and applicable regulations specifying the procedures for rate hearings on such rate filings, shall provide each Insured with any rider, endorsement or revised Policy form necessary to eliminate any benefit duplication under the Policy with benefits provided by Medicare. Such revision shall not be made by rider or endorsement, unless approved by the Commissioner.

3.Revised Policy Outline of Coverage. No later than 90 days after the date of approval of Medicare Supplement Insurance rates and in addition to the notice of changes prescribed by 211 CMR 71.13(2)(d)1., every Insured covered by a Medicare Supplement Insurance Policy shall be provided with a revised outline of coverage which reflects any changes made to the Medicare program or to their Medicare Supplement Insurance Policy. Such outline of coverage shall comply with the provisions of 211 CMR 71.13(2)(a), (b) and (c).

4.Guide to Health Insurance for People with Medicare.

a. Issuers of accident and sickness Policies which provide hospital or medical expense coverage on an expense incurred or indemnity basis to a person(s) eligible for Medicare shall provide to those Applicants a Guide to Health Insurance for People with Medicare in the form developed jointly by the National Association of Insurance Commissioners and the Health Care Financing Administration and in a type size no smaller than 12-point type. The Guide shall also include an attachment concerning the Massachusetts Medicare Supplement Insurance Program in a form prescribed by the Commissioner in no smaller than 12-point type. Delivery of the Guide shall be made whether or not such Policies are advertised, solicited or issued as Medicare Supplement Insurance Policies as defined in 211 CMR 71.00. Except in the case of direct response carriers, delivery of the Guide shall be made to the Applicant at the time of application and acknowledgment of receipt of the Guide shall be obtained by the insurer. Direct response carriers shall deliver the Guide to the Applicant upon request, but not later than at the time the Policy is delivered.

b. For the purposes of 211 CMR 71.13(2)(d)4.a., "form" means the language, format, type size, type proportional spacing, bold character and line spacing.

5.Required Notice for Non-medicare Supplement Policies.

a. Any accident and sickness insurance or long-term care insurance policy, other than a Medicare Supplement Insurance Policy, a policy issued pursuant to a contract under the Social Security Act § 1876 (42 U.S.C. § 1395, et seq.); disability income policy or other policy identified in 211 CMR 71.02(2), issued for delivery in Massachusetts to persons eligible for Medicare shall notify Insureds under the policy that the policy is not a Medicare Supplement Insurance Policy. The notice shall either be printed or attached to the first page of the outline of coverage delivered to Insureds under the policy, or if no outline of coverage is delivered, to the first page of the policy delivered to Insureds. The notice shall be in no less than 12-point type and shall contain the following language:

"THIS [POLICY OR CERTIFICATE ] IS NOT A MEDICARE SUPPLEMENT [POLICY OR CONTRACT]. If you are eligible for Medicare, review the Guide to Health Insurance for People with Medicare available from the company."

b. Applications provided to persons eligible for Medicare for the health insurance or long-term care insurance policies described in 211 CMR 71.13(2)(d)5.a. shall disclose, using the applicable statement determined by the Commissioner, the extent to which the policy duplicates Medicare. The disclosure statement shall be provided as a part of, or together with, the application for the policy.

(3)MMA Notice Requirement. Issuers shall comply with any notice requirements of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

211 CMR, § 71.13

Amended by Mass Register Issue 1397, eff. 8/9/2019.