New York State
Insurance Department

(11 NYCRR 52)
TWENTY-THIRD AMENDMENT TO REGULATION NO. 62

MINIMUM STANDARDS FOR FORM, CONTENT AND SALE OF HEALTH INSURANCE, INCLUDING STANDARDS OF FULL AND FAIR DISCLOSURE


          I, NEIL D. LEVIN, Superintendent of Insurance of the State of New York, pursuant to the authority granted by Sections 201, 301, 3201, 3216, 3217, 3221, 3232, 4235, 4237 and Article 43 of the Insurance Law, Chapter 501 of the Laws of 1992 and Chapter 661 of the Laws of 1997, do hereby promulgate the following Twenty-third amendment to Part 52 of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York (Regulation 62), to take effect upon publication in the State Register to read as follows:

(MATERIAL UNDERLINED IS NEW; MATERIAL IN BRACKETS IS DELETED)

          Section 52.2(u) is hereby amended to read as follows:

          (u) Preexisting condition means, except as to insurance defined in sections 52.11, 52.12, [and] 52.13 and 52.14 of this Part, and except as to policies which are subject to sections 52.18(a)(5) and 52.20 of this Part, the existence of symptoms which would ordinarily cause a prudent person to seek diagnosis, care or treatment within a two-year period preceding the effective date of the coverage of the insured person, or a condition for which medical advice or treatment was recommended by a physician or received from a physician within a two-year period preceding the effective date of coverage of the insured person.

          Section 52.16(c)(1) is hereby amended to read as follows:

          (1) preexisting conditions or diseases, as defined in section 52.2(u) of this Part[,] or section 3232 or 4318 of the Insurance Law, except for congenital anomalies of a covered dependent child; subject to limitations set forth in subdivision (f) of this section, sections 52.17(a)(27)-(28), [and] 52.18(a)(5) and 52.20 of this Part;

          Section 52.16(c)(3) is hereby amended to read as follows:

          (3) pregnancy, except to the extent coverage is required pursuant to sections [162-a, 164-a and 253] 3216, 3221, 3232, 4303, and 4318 of the Insurance Law, and except for complications of pregnancy as defined in section 52.2(e) of this Part, other than for policies defined in section 52.8 of this Part;

          Section 52.17(a)(25) is hereby repealed and a new paragraph (25) is added to read as follows:

          (25) (i) Unilateral modifications by an insurer to existing accident and health coverage shall be made in accordance with applicable laws upon at least 30 days prior written notice to the policyholder.

                    (ii) An insurer may unilaterally modify the coverage for a policy of hospital, surgical or medical expense insurance only at the time of coverage renewal.

                    (iii) Where a policyholder is contractually required to provide prior written notice to terminate coverage, the notice referred to in subparagraph (i) above must be provided to such policyholder no less than 14 days prior to the date by which the policyholder is required to provide notice to terminate coverage.

          Section 52.18(a)(5) is hereby amended to read as follows:

          (5) [No policy shall] Policies which provide benefits as described in 42 U.S.C. section 300gg-91(c), except for policies defined in sections 52.11, 52.12, 52.13 and 52.14 of this Part and policies subject to the requirements of section 52.20 of this Part, may not exclude, limit or reduce coverage for a loss due to a preexisting condition for a period greater than 12 months following the effective date of an insured’s coverage[, where the]. Where a policy providing such benefits is delivered or issued for delivery to a group [qualifying under section 4235(c)(1)(K),(L) or (M) of the Insurance Law. Policies issued to any such group that] which includes persons aged 65 or older, such policy shall not contain any provision which excludes, limits or reduces coverage for a loss due to a preexisting condition for those aged 65 or older for a period greater than six months following the effective date of an insured’s coverage. For purposes of this paragraph, a preexisting condition is one for which medical advice was given, treatment was recommended by or received from a physician, within [12] six months[(six months for persons aged 65 or older)] before the effective date of an insured’s coverage.

          Section 52.18(a) is hereby amended by adding a new paragraph (8) to read as follows:

          (8) (i) Unilateral modifications by an insurer to existing accident and health coverage shall be made in accordance with applicable laws upon at least 30 days prior written notice to the policyholder.

                    (ii) An insurer may unilaterally modify the coverage for a policy of hospital, surgical or medical expense insurance only at the time of coverage renewal.

                    (iii) Where a policyholder is contractually required to provide prior written notice to terminate coverage, the notice referred to in subparagraph (i) above must be provided to such policyholder no less than 14 days prior to the date by which the policyholder is required to provide notice to terminate coverage.

          Section 52.18(c)(1) is hereby amended to read as follows:

          (1) Notices of nonrenewal or termination shall provide for at least 30 days’ prior notice except where otherwise specifically prescribed by statute. Any other conditions for nonrenewal or termination shall be fully set forth in the policy.

          A new section 52.20 is added to read as follows:

          52.20 Rules relating to preexisting condition provisions and crediting requirements in policies which provide hospital, surgical or medical expense coverage.

          (a) General rules. (1) Individual health insurance policies and group and blanket accident and health insurance policies which provide hospital, surgical or medical expense coverage may include preexisting condition provisions which are at least as favorable to the covered person as those set forth in this section.

                    (2) The requirements of this section shall not be applicable to any individual, group or blanket insurance policy in relation to its provision of "excepted benefits" as defined in section 2791(c) of the federal Public Health Service Act (42 U.S.C. section 300gg-91(c)) and meeting the requirements for exception as set forth in sections 2721(c)or(d) of the federal Public Health Service Act(42 U.S.C. sections 300gg-21(c) and (d)) or sections 2763(a) or (b) of the federal Public Health Service Act (42 U.S.C. sections 300gg-63(a) and (b)). However, this exemption shall not be applicable to any policy providing hospital or surgical indemnity benefits with specific dollar amounts that exceed the amounts required to meet the definitions of basic hospital and basic medical insurance in sections 52.5 and 52.6 of this Part.

          (b) Preexisting condition provisions. (1) No preexisting condition provision shall exclude coverage for a period in excess of 12 months following the enrollment date for a covered person and may only relate to a condition (whether physical or mental), regardless of the cause of the condition, for which medical advice, diagnosis, care or treatment was recommended or received within the six month period ending on the enrollment date.

                    (2) For purposes of this section, "enrollment date" has the meaning prescribed in sections 3232 and 4318 of the Insurance Law.

                    (3) For purposes of this section, genetic information shall not be treated as a pre-existing condition in the absence of a diagnosis of the condition related to such information.

                    (4) No pre-existing condition provision shall exclude coverage in the case of:

                              (i) an individual who, as of the last day of the 30 day period beginning with the date of birth, is covered under creditable coverage as defined in sections 3232 and 4318 of the Insurance Law;

                              (ii) a child who is adopted or placed for adoption before attaining eighteen years of age and who, as of the last day of the 30 day period beginning on the date of the adoption or placement for adoption, is covered under creditable coverage as defined in sections 3232 and 4318 of the Insurance Law; or

                              (iii) pregnancy (except in an individual health insurance policy or a student blanket accident and health insurance policy in which coverage may be excluded, subject to a credit for previous creditable coverage, for a period not to exceed ten months for a pregnancy existing on the enrollment date).

          Subparagraphs (i) and (ii) of this paragraph will not apply to an individual after the first 63 day period during all of which the individual was not covered under any creditable coverage as defined in subdivision (c) of this section.

                    (5) With respect to an "eligible individual" as defined in section 2741(b) of the federal Public Health Service Act, 42 U.S.C. section 300gg-41(b), an insurer shall not impose any preexisting condition exclusion in an individual health insurance policy.

                    (6) (i) With respect to the issuance of policies to groups of 50 or fewer employees or members, exclusive of spouses and dependents, health maintenance organizations may elect to use a specified affiliation period as an alternative to the use of a pre-existing condition provision. Subject to the crediting requirements of subdivision (c), the health maintenance organization may require that coverage shall not become effective until after a specified affiliation period of not more than 60 days after the enrollment date.

                              (ii) For purposes of this paragraph, the term "affiliation period" means a period which must expire before coverage becomes effective. The health maintenance organization is not required to provide health care services or benefits during such period and no premium shall be charged for any coverage during the period. An affiliation period shall run concurrently with any waiting period under the policy.

                    (7) Individual direct payment policies issued pursuant to sections 4321 and 4322 of the Insurance Law must include a preexisting condition provision that complies with this section.

          (c) Creditable coverage. (1) In applying a pre-existing condition provision to a covered person, the policy shall credit the time the covered person was previously covered under creditable coverage if the previous creditable coverage was continuous to a date not more than 63 days prior to the enrollment date of the new coverage. For purposes of this section, "creditable coverage" has the meaning prescribed in sections 3232 and 4318 of the Insurance Law.

                    (2) Crediting shall not be required when the previous coverage was for insurance as described in paragraph (2) of subdivision (a) of this section.

                    (3) In applying the credit an insurer shall count a period of creditable coverage without regard to the specific benefits covered during the period of creditable coverage.

                    (4) As an alternative to the method described in paragraph (3) above, an insurer may elect to count the period of creditable coverage based on coverage of benefits within each of several classes or categories of benefits.

                              (i) In the case of individual policies, the permissible classes or categories of benefits are coverage for hospital care, medical care, out-of-network care, mental health care, substance abuse treatment, prescription drug coverage, dental care and vision care.

                              (ii) In the case of group or blanket policies, the permissible classes or categories of benefits are coverage for mental health care, substance abuse treatment, prescription drug coverage, dental care and vision care.

                              (iii) In addition to the classes and categories of benefits set forth in subparagraphs (i) and (ii) of this paragraph, the superintendent may authorize such other classes or categories as may be recognized under federal regulations.

                    (5) The election of an alternative method of counting the period of creditable coverage shall be made on a uniform basis for all insureds, subscribers, participants and beneficiaries. When such election is made, an insurer shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within such class or category.

                    (6) An insurer making an election to credit by alternative method shall prominently so state in a disclosure statement, and shall set forth in any policy or certificate issued in connection with the coverage, that the insurer has made such election. Details of the alternative method of counting creditable coverage shall be set forth in the policy and certificate. The disclosure statement shall include a description of the effect of the alternative method election with regard to the application of creditable coverage.

                    (7) In the case of previous health maintenance organization coverage, any specified affiliation period prior to such previous coverage becoming effective shall also be credited provided that the previous health maintenance organization coverage was continuous to a date not more than 63 days prior to the enrollment date of the new coverage.

                    (8) If a health maintenance organization elects to use a specified affiliation period pursuant to paragraph (6) of subdivision (b) of this section, such affiliation period shall be reduced by the time the covered person was previously covered under creditable coverage which was continuous to a date not more than 63 days prior to the enrollment date.

          Section 52.70(d)(1) is hereby amended to read as follows:

          (1) Blanket accident and blanket accident and health insurance may be written for groups conforming to the requirements of section [222(1)(a) through (f)] 4237(a)(3)(A) through (F) of the Insurance Law. Blanket accident and health insurance policies which provide hospital, surgical or medical expense coverage shall insure all persons without evidence of insurability provided that coverage is elected during an initial period of eligibility of at least 30 days. Rules may be established limiting future enrollment to specified time periods; however, such specified open enrollment time period for such future enrollment must be provided at least once every twelve months for a period of not less than 30 days. No enrollment limitation shall apply to enrollees who apply for coverage under the conditions described in sections 3221(q)(5) and 4305(k)(5) of the Insurance Law.

          Section 52.70(e)(2) is hereby amended to read as follows:

          (2) Except for dental insurance, insurance written under section [221(2)(h)] 4235(c)(1)(H) of the Insurance Law (unless such insurance is as described in paragraph (3) of this subdivision), and to the extent that insurance written under section [221(2)(b)and(d)] 4235(c)(1)(B) and (D) of the Insurance Law insures employees of an employer with less than 300 employees (unless such insurance is as described in paragraph (3) of this subdivision), any group policy insuring 300 or more persons, excluding dependents, shall insure all persons without evidence of individual insurability, provided that coverage is elected during an initial period of eligibility of at least 30 days.

          Section 52.70(e) is hereby amended to add new paragraphs (3) and (4) to read as follows:

          (3) Any group hospital, surgical or medical expense insurance policy shall insure all persons without evidence of insurability, provided that coverage is elected during an initial period of eligibility of at least 30 days. Rules may be established limiting future enrollment to specified time periods; however, such specified open enrollment time period for such future enrollment must be provided at least once every twelve months for a period of not less than 30 days. No enrollment limitation shall apply to enrollees who apply for coverage under the conditions described in sections 3221(q)(5) and 4305(k)(5) of the Insurance Law.

          (4) Where a group offers more than one health care plan to its employees or members, rules may be established controlling the transfer between the health care plans so long as transfer is permitted no less than once each calendar year.



     I, Neil D. Levin, Superintendent of Insurance of the State of New York, do hereby certify that the foregoing Twenty-third Amendment to Regulation No. 62 (11 NYCRR 52) was duly adopted by me on this day pursuant to the authority granted by Sections 201, 301, 3201, 3216, 3217, 3221, 3232, 4235, 4237 and Article 43 of the Insurance Law, Chapter 501 of the Laws of 1992 and Chapter 661 of the Laws of 1997, to be effective upon publication in the State Register.

     Pursuant to the provisions of the State Administrative Procedure Act, this Twenty-third Amendment to Regulation No. 62 was previously adopted as an emergency measure on February 10, 1998 and on May 11, 1998. This regulation amendment supercedes the emergency measure without substantive change. The Notice of Proposed Rulemaking for this Amendment was published in the State Register on May 27, 1998. No other publication or prior notice is required by Statute.

_____________________________

Neil D. Levin
Superintendent of Insurance

July 14, 1998