Section 105. Guaranteed issue for eligible persons

A. Guaranteed issue provisions follow:

1. Eligible persons are those individuals described in subsection B of this section who seek to enroll under the policy during the period specified in subsection C of this section, and who submit evidence of the date of termination, disenrollment, or Medicare Part D enrollment with the application for a Medicare supplement policy.

2. With respect to eligible persons, an issuer shall not deny or condition the issuance or effectiveness of a Medicare supplement policy described in subsection E of this section that is offered and is available for issuance to new enrollees by the issuer, shall not discriminate in the pricing of such a Medicare supplement policy because of health status, claims experience, receipt of health care or medical condition, and shall not impose an exclusion of benefits based on a preexisting condition under such a Medicare supplement policy.

B. An eligible person is an individual described in any of the following subdivisions:

1. The individual is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare, and the plan terminates, or the plan ceases to provide substantially all such supplemental health benefits to the individual;

2. The individual is enrolled with a Medicare Advantage organization under a Medicare Advantage plan under Part C of Medicare, and any of the following circumstances apply, or the individual is 65 years of age or older and is enrolled with a Program of All Inclusive Care for the Elderly (PACE) provider under § 1894 of the Social Security Act (42 USC § 1395eee), and there are circumstances similar to those described below that would permit discontinuance of the individual's enrollment with such provider if such individual were enrolled in a Medicare Advantage plan:

a. The certification of the organization or plan has been terminated;

b. The organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides;

c. The individual is no longer eligible to elect the plan because of a change in the individual's place of residence or other change in circumstances specified by the Secretary, but not including termination of the individual's enrollment on the basis described in § 1851(g)(3)(B) of the federal Social Security Act (42 USC § 1395w-21) (where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under § 1856 of the Social Security Act (42 USC § 1395w-26)), or the plan is terminated for all individuals within a residence area;

d. The individual demonstrates, in accordance with guidelines established by the Secretary, that:

(1) The organization offering the plan substantially violated a material provision of the organization's contract under § 1859 of the Social Security Act (42 USC §§ 1395w-21 et seq.) in relation to the individual, including the failure to provide an enrollee on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide such covered care in accordance with applicable quality standards; or

(2) The organization, or agent or other entity acting on the organization's behalf, materially misrepresented the plan's provisions in marketing the plan to the individual; or

e. The individual meets such other exceptional conditions as the Secretary may provide.

3. a. The individual is enrolled with:

(1) An eligible organization under a contract under § 1876 of the Social Security Act (Medicare cost);

(2) A similar organization operating under demonstration project authority, effective for periods before April 1, 1999;

(3) An organization under an agreement under § 1833(a)(1)(A) of the Social Security Act (health care prepayment plan); or

(4) An organization under a Medicare Select policy; and

b. The enrollment ceases under the same circumstances that would permit discontinuance of an individual's election of coverage under subdivision B 2 of this section.

4. The individual is enrolled under a Medicare supplement policy and the enrollment ceases because:

a. (1) Of the insolvency of the issuer or bankruptcy of the nonissuer organization; or

(2) Of other involuntary termination of coverage or enrollment under the policy;

b. The issuer of the policy substantially violated a material provision of the policy; or

c. The issuer, or an agent or other entity acting on the issuer's behalf, materially misrepresented the policy's provisions in marketing the policy to the individual.

5. a. The individual was enrolled under a Medicare supplement policy and terminates enrollment and subsequently enrolls, for the first time, with any Medicare Advantage organization under a Medicare Advantage plan under Part C of Medicare, any eligible organization under a contract under § 1876 of the Social Security Act (Medicare cost), any similar organization operating under demonstration project authority, any PACE provider under § 1894 of the Social Security Act (42 USC § 1395 eee), or a Medicare Select policy; and

b. The subsequent enrollment under subdivision 5 a of this subsection is terminated by the enrollee during any period within the first 12 months of such subsequent enrollment (during which the enrollee is permitted to terminate such subsequent enrollment under § 1851(e) of the federal Social Security Act) (42 USC § 1395w-21);

6. The individual, upon first becoming eligible for benefits under Part A of Medicare at age 65, enrolls in a Medicare Advantage plan under Part C of Medicare, or with a PACE provider under § 1894 of the Social Security Act (42 USC § 1395eee) and disenrolls from the plan or program by not later than 12 months after the effective date of enrollment; or

7. The individual enrolls in a Medicare Part D plan during the initial enrollment period and, at the time of enrollment in Part D, was enrolled under a Medicare supplement policy that covers outpatient prescription drugs; the individual terminates enrollment in the Medicare supplement policy and submits evidence of enrollment in Medicare Part D along with the application for a policy described in subdivision E 4 of this section.

C. Guaranteed issue time periods.

1. In the case of an individual described in subdivision B 1 of this section, the guaranteed issue period begins on the later of (i) the date the individual receives a notice of termination or cessation of all supplemental health benefits (or, if a notice is not received, notice that a claim has been denied because of a termination or cessation); or (ii) the date that the applicable coverage terminates or ceases and ends 63 days thereafter.

2. In the case of an individual described in subdivisions B 2, 3, 5 or 6 of this section whose enrollment is terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends 63 days after the date the applicable coverage is terminated.

3. In the case of an individual described in subdivision B 4 a of this section, the guaranteed issue period begins on the earlier of (i) the date that the individual receives a notice of termination, a notice of the issuer's bankruptcy or insolvency, or other such similar notice if any, or (ii) the date that the applicable coverage is terminated, and ends on the date that is 63 days after the date the coverage is terminated.

4. In the case of an individual described in subdivisions B 2, B 4 b, B 4 c, B 5 or B 6 of this section who disenrolls voluntarily, the guaranteed issue period begins on the date that is 60 days before the effective date of disenrollment and ends on the date that is 63 days after the effective date of the disenrollment.

5. In the case of an individual described in subdivision B 7 of this section, the guaranteed issue period begins on the date the individual receives notice pursuant to § 1882(v) (2) (B) of the Social Security Act from the Medicare supplement issuer during the 60-day period immediately preceding the initial Part D enrollment period and ends on the date that is 63 days after the effective date of the individual's coverage under Medicare Part D.

6. In the case of an individual described in subsection B of this section but not described in subdivisions 1 through 4 of this subsection, the guaranteed issue period begins on the effective date of disenrollment and ends on the date that is 63 days after the effective date of disenrollment.

D. Extended medigap access for interrupted trial periods.

1. In the case of an individual described in subdivision B 5 of this section (or deemed to be so described pursuant to this subdivision) whose enrollment with an organization or provider described in subdivision B 5 a of this section is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls with another such organization or provider, the subsequent enrollment shall be deemed to be an initial enrollment described in subdivision B 5 of this section.

2. In the case of an individual described in subdivision B 6 of this section (or deemed to be so described pursuant to this subdivision) whose enrollment with a plan or in a program described in subdivision B 6 of this section is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls in another plan or program, the subsequent enrollment shall be deemed to be an initial enrollment described in subdivision B 6 of this section.

3. For purposes of subdivisions B 5 and 6 of this section, no enrollment of an individual with an organization or provider described in subdivision B 5 a of this section, or with a plan or in a program described in subdivision B 6 of this section, may be deemed to be an initial enrollment under this subdivision after the two-year period beginning on the date on which the individual first enrolled with such an organization provider, plan or program.

E. The Medicare supplement policy to which eligible persons are entitled under:

1. Subdivisions B 1, 2, 3, and 4 of this section is a Medicare supplement policy which has a benefit package classified as Plan A, B, C, F, F with a high deductible, K, or L offered by any issuer.

2. a. Subject to subdivision 2 b of this subsection, subdivision B 5 of this section is the same Medicare supplement policy in which the individual was most recently previously enrolled, if available from the same issuer, or if not so available, a policy described in subdivision 1 of this subsection.

b. After December 31, 2005, if the individual was most recently enrolled in a Medicare supplement policy with an outpatient prescription drug benefit, a Medicare supplement policy described in this subdivision is:

(1) The policy available from the same issuer but modified to remove outpatient prescription drug coverage; or

(2) At the election of the policyholder, an A, B, C, F, F with a high deductible, K or L policy that is offered by any issuer.

3. Subdivision B 6 of this section shall include any Medicare supplement policy offered by any issuer.

4. Subdivision B 7 of this section is a Medicare supplement policy that has a benefit package classified as Plan A, B, C, F, F with a high deductible, K or L, and that is offered and is available for issuance to new enrollees by the same issuer that issued the individual's Medicare supplement policy with outpatient prescription drug coverage.

F. Notification provisions are:

1. At the time of an event described in subsection B of this section because of which an individual loses coverage or benefits due to the termination of a contract or agreement, policy or plan, the organization that terminates the contract or agreement, the issuer terminating the policy, or the administrator of the plan being terminated, respectively, shall notify the individual of his rights under this section, and of the obligations of issuers of Medicare supplement policies under subsection A of this section. Such notice shall be communicated in writing contemporaneously with the notification of termination.

2. At the time of an event described in subsection B of this section because of which an individual ceases enrollment under a contract or agreement, policy or plan, the organization that offers the contract or agreement, regardless of the basis for the cessation of enrollment, the issuer offering the policy, or the administrator of the plan, respectively, shall notify the individual of his rights under this section, and of the obligations of issuers of Medicare supplement policies under subsection A of this section. Such notice shall be communicated in writing within 10 working days of the issuer receiving notification of disenrollment.

Historical Notes

Derived from Volume 15, Issue 15, eff. April 26, 1999; amended, Virginia Register Volume 17, Issue 24, eff. September 1, 2001; Volume 19, Issue 04, eff. October 24, 2002; Volume 21, Issue 25, eff. August 15, 2005.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.