Section 376.441

Title XXIV BUSINESS AND FINANCIAL INSTITUTIONS

Chapter 376

Effective - 28 Aug 1999   

  376.441.  Carrier contract replaced by similar benefit plan of another carrier — liability of prior carrier — succeeding carrier coverage requirements. — When one carrier's contract replaces a plan of similar benefits of another carrier, the prior carrier remains liable only to the extent of its accrued liabilities and extensions of benefits.  The position of the prior carrier shall be the same whether the group policyholder or other entity secures replacement coverage from a new carrier, self-insurer, or foregoes the provision of coverage.  Each person who is eligible for coverage in accordance with the succeeding carrier's plan of benefits in respect of classes eligible and activity at work and nonconfinement rules shall be covered by that carrier's plan of benefits.  Each person not so covered under the succeeding carrier's plan of benefits must nevertheless be covered by the succeeding carrier in accordance with the following provisions if such individual was validly covered, including benefit extension, under the prior plan on the date of discontinuance and if such individual is a member of the class or classes of individuals eligible for coverage under the succeeding carrier's plan.  Any reference in the following provisions to an individual who was or was not totally disabled is a reference to the individual's status immediately prior to the date the succeeding carrier's coverage becomes effective:

  (1)  The minimum level of benefits to be provided by the succeeding carrier shall be the applicable level of benefits of the prior carrier's plan reduced by any benefits payable by the prior plan;

  (2)  Coverage must be provided by the succeeding carrier until at least the earliest of the following dates:

  (a)  The date the individual becomes eligible under the succeeding carrier's plan;

  (b)  For each type of coverage, the date the individual's coverage would terminate in accordance with the succeeding carrier's plan provisions applicable to individual termination of coverage, such as at the termination of employment or ceasing to be eligible dependent, as the case may be; or

  (c)  In the case of an individual who was totally disabled, and in the case of a type of coverage for which section 376.438 requires an extension of accrued liability, the end of any period of extension or accrued liability which is required of the prior carrier by section 376.438 or, if the prior carrier's policy or contract is not subject to that section, would have been required of that carrier had its policy or contract been subject to section 376.438 at the time the prior plan was discontinued and replaced by the succeeding carrier's plan;

  (3)  In the case of a preexisting conditions limitation included in the succeeding carrier's plan, the level of benefits applicable to preexisting conditions of persons becoming covered by the succeeding carrier's plan during the period of time this limitation applies under the new plan shall be the lesser of:

  (a)  The benefits of the new plan determined without application of the preexisting conditions limitation; and

  (b)  The benefits of the prior plan;

  (4)  The succeeding carrier, in applying any deductibles or waiting periods in its plan, shall give credit for the satisfaction or partial satisfaction of the same or similar provisions under a prior plan providing similar benefits.  In the case of deductible provisions, the credit shall apply for the same or overlapping benefit periods and shall be given for expenses actually incurred and applied against the deductible provisions of the prior carrier's plan during the ninety days preceding the effective date of the succeeding carrier's plan but only to the extent these expenses are recognized under the terms of the succeeding carrier's plan and are subject to a similar deductible provision.  For purposes of this subdivision, the deductible provisions in insurance policies and health services corporation contracts are deemed to be similar to co-payment provisions in health maintenance organization contracts;

  (5)  In any situation where a determination of the prior carrier's benefit is required by the succeeding carrier, at the succeeding carrier's request the prior carrier shall furnish a statement of the benefits available or pertinent information, sufficient to permit verification of the benefit determination or the determination itself by the succeeding carrier.  For the purposes of this section, benefits of the prior plan will be determined in accordance with all of the definitions, conditions and covered expense provisions of the prior plan rather than those of the succeeding plan.  The benefit determination will be made as if coverage had not been replaced by the succeeding carrier.

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(L. 1985 H.B. 623 § 376.440, A.L. 1999 H.B. 903)