Medicare supplement required provisions and enrollment periods

What a Medicare supplement policy is

A Medicare supplement policy (often called Medigap) is private health insurance sold to people on Medicare to help pay the cost-sharing that Original Medicare leaves behind, such as deductibles and coinsurance. Because these buyers are often older or disabled, Florida regulates this product closely in Part VIII of Chapter 627 of the Florida Statutes.

The starting rule: an individual, group, blanket or franchise health policy may not be delivered or issued for delivery in Florida as a Medicare supplement policy unless it complies with that part. A policy also may not be advertised, solicited or issued as a Medicare supplement unless it meets the minimum standards adopted by rule. To be filed as a Medicare supplement, it must meet or exceed the federal Medicare supplement law or the most recent NAIC Medicare Supplement Insurance Minimum Standards Model Act.

Violations are punishable under the Insurance Code, and the Office of Insurance Regulation may order an insurer to stop marketing a Medicare supplement policy connected to the violation.

Enrollment periods: guaranteed access

An insurer that issues Medicare supplement policies in Florida must offer enrollment without conditioning issue or effectiveness on, and without charging a different price based on, the applicant's medical or health status or receipt of health care. That protection applies during two windows, to Florida residents who are enrolled in Medicare Part B and who are either 65 or older or under 65 and eligible for Medicare because of disability or end-stage renal disease:

1. The 6-month open enrollment period. It begins with the first month in which the person is 65 or older and enrolled in Part B, or, for a person under 65, is Medicare-eligible through disability or end-stage renal disease and enrolled in Part B. The person requests the policy during those 6 months.
2. The 2-month period after group coverage ends. A person who requests a policy during the 2 months following termination of coverage under a group health insurance policy gets the same guaranteed treatment.

Florida extends open enrollment to under-65 Medicare beneficiaries who qualify through disability or end-stage renal disease. For those who first enrolled in Part B before October 1, 2009, their 6-month period began on October 1, 2009.

Preexisting conditions and replacement

• If a Medicare supplement policy is not replacing another policy, it may not limit or exclude coverage for a preexisting condition for longer than 6 months.
• It may not define a preexisting condition more restrictively than a condition for which medical advice was given, or treatment was recommended by or received from a physician, within 6 months before the effective date.
• If the policy replaces another Medicare supplement policy or creditable coverage, the new insurer must waive preexisting-condition, waiting, elimination and probationary periods for similar benefits, to the extent that time was already served under the original policy.

Required policy provisions

A policy filed as a Medicare supplement must:

• define Medicare eligible expense no more restrictively than Medicare does;
• automatically change its cost-sharing benefits to match changes in Medicare's deductible and copayment amounts (premiums may be adjusted to match, with the Office's prior approval);
• be written in simplified language that purchasers can easily understand;
• carry a prominently displayed 30-day no-loss cancellation (free look) clause: the applicant may return the policy within 30 days of receiving it for a full premium refund, paid in a timely manner directly to whoever paid the premium;
• prominently disclose any coordination-of-benefits clause that could restrict payment; and
• be accompanied by the Medicare Supplement Buyer's Guide.

Group Medicare supplement coverage

• If the group policyholder terminates a group policy without replacing it, the insurer must offer certificateholders an individual policy: one continuing the group benefits, or one with only the minimum-standard benefits.
• If a person's membership in the group ends, the insurer offers those conversion choices or, at the group policyholder's option, continuation under the group policy.
• If the group policy is replaced by the same policyholder, the new insurer must cover everyone covered on the termination date, with no preexisting-condition exclusion for conditions the old policy would have covered.