Section 70. Specified disease minimum benefit standards

No specified disease policy shall be delivered or issued for delivery in this Commonwealth which does not meet the following minimum benefit standards. If the policy does not meet the required minimum standards, it shall not be offered for sale. These are minimum benefit standards and do not preclude the inclusion of other benefits which are not inconsistent with these standards.

1. Minimum benefit standards applicable to non-cancer coverage:

a. A policy must provide coverage for each person insured under the policy on an expense incurred basis for a specifically named disease(s). This coverage must be in amounts not in excess of the usual and customary charges, with a deductible amount not in excess of $250, an overall aggregate benefit limit of not less than $5,000, a uniform percentage of covered expenses that the insurer will pay of not less than 20% in increments of 10%, no inside benefit limits and a benefit period of not less than two years for at least the following:

(1) Hospital room and board and any other hospital furnished medical services or supplies;

(2) Treatment by a legally qualified physician or surgeon;

(3) Private duty services of a registered nurse (R.N.);

(4) X-ray, radium and other therapy procedures used in diagnosis and treatment;

(5) Professional ambulance for local service to or from a local hospital;

(6) Blood transfusions, including expense incurred for blood donors;

(7) Drugs and medicines prescribed by a physician;

(8) The rental of an iron lung or similar mechanical apparatus;

(9) Braces, crutches and wheel chairs as are deemed necessary by the attending physician for the treatment of the disease;

(10) Emergency transportation if in the opinion of the attending physician it is necessary to transport the insured to another locality for treatment of the disease; and

(11) May include coverage of any other expenses necessarily incurred in the treatment of the disease; or

b. A policy must provide coverage for each person insured under the policy for a specifically named disease(s) with no deductible amount, and an overall aggregate benefit limit of not less than $25,000 payable at the rate of not less than $50 a day while confined in a hospital and a benefit period of not less than 500 days; or

c. A policy must provide lump-sum indemnity coverage of at least $1,000. It must provide benefits which are payable as a fixed, one-time payment made within 30 days of submission to the insurer of proof of diagnosis of the specified disease(s). Dollar benefits shall be offered for sale only in even increments of $100 (i.e. $1,100, $1,200, $1,300 . . .).

Where coverage is advertised or otherwise represented to offer generic coverage of a disease(s) (e.g., "heart disease insurance"), the same dollar amounts must be payable regardless of the particular subtype of the disease. However, in the case of clearly identifiable subtypes with significantly lower treatment costs, lesser amounts may be payable so long as the policy clearly differentiates that subtype and its benefits.

2. Minimum benefit standards applicable to cancer only or cancer combination coverage:

a. A policy must provide coverage for each person ensured under the policy for cancer-only coverage or in combination with one or more other specified diseases on an expense incurred basis for services, supplies, care and treatment that are ordered or are prescribed by a physician as necessary for the treatment of cancer. This coverage must be in amounts not in excess of the usual and customary charges, with a deductible amount not in excess of $250, an overall aggregate benefit limit of not less than $10,000, a uniform percentage of covered expenses that the insurer will pay of not less than 20% in increments of 10%, no inside benefit limits and a benefit period of not less than three years for at least the following:

(1) Treatment by, or under the direction of, a legally qualified physician or surgeon;

(2) X-ray, radium, chemotherapy and other therapy procedures used in diagnosis and treatment;

(3) Hospital room and board and any other hospital furnished medical services or supplies;

(4) Blood transfusions, and the administration thereof, including expense incurred for blood donors;

(5) Drugs and medicines prescribed by a physician;

(6) Professional ambulance for local service to or from a local hospital;

(7) Private duty services of a registered nurse (R.N.) provided in a hospital; and

(8) May include coverage of any other expenses necessarily incurred in the treatment of the disease; or

b. A policy must provide benefits for each person insured under the policy for the following:

(1) Hospital confinement in an amount of at least $100 per day for at least 500 days;

(2) Surgical expenses not to exceed an overall lifetime maximum of $3,500; and

(3) Radium, cobalt, chemotherapy, or X-ray therapy expenses as an outpatient to at least $1,000. Such therapy benefit shall be restored after an insured is treatment or hospitalization free for at least 12 months; or

c. A policy must provide per diem indemnity coverage.

(1) Such coverage must provide covered persons:

(a) A fixed-sum payment of at least $100 for each day of hospital confinement for at least 365 days; and

(b) A fixed-sum payment equal to at least ½ the hospital inpatient benefit for each day of hospital or non-hospital outpatient surgery, chemotherapy and radiation therapy for at least 365 days of treatment.

(2) Benefits tied to confinement in a skilled nursing home or to receipt of home health care are optional. If a policy offers these benefits, they must equal the following:

(a) A fixed-sum payment equal to at least ¼ the hospital inpatient benefit for each day of skilled nursing home confinement for at least 100 days;

(b) A fixed-sum payment equal to at least ¼ the hospital inpatient benefit for each day of home health care for at least 100 days;

(c) Notwithstanding any other provision of this chapter, any restriction or limitation applied to the benefits in subdivisions 2c(2)(a) and 2c(2)(b) above, whether by definition or otherwise, shall be no more restrictive than those under Medicare; or

d. A policy must provide lump-sum indemnity coverage of at least $1,000. It must provide benefits which are payable as a fixed, one-time payment made within 30 days of submission to the insurer of proof of diagnosis of the specified disease(s). Dollar benefits shall be offered for sale only in even increments of $100 (i.e., $1,100, $1,200, $1,300 . . .).

Where coverage is advertised or otherwise represented to offer generic coverage of a disease(s) (e.g., "cancer insurance"), the same dollar amounts must be payable regardless of the particular subtype of the disease (e.g., lung or bone cancer). However, in the case of clearly identifiable subtypes with significantly lower treatment costs (e.g., skin cancer), lesser amounts may be payable so long as the policy clearly differentiates that subtype and its benefits.

Historical Notes

Derived from Regulation 21, Case No. INS810010, § 8, eff. June 1, 1981.

Statutory Authority

§§ 38.2-514, 38.2-3516 through 38.2-3520 of the Code of Virginia.