§ 3601 Purpose and scope.
(a) The purpose of this chapter shall be to provide reasonable standardization and simplification of terms and coverages of individual health insurance policies and subscriber contracts of health service corporations to facilitate public understanding and comparison, to eliminate provisions contained in individual health insurance policies and subscriber contracts of health service corporations which may be misleading or unreasonably confusing in connection either with the purchase of such coverages or with the settlement of claims, and to provide for full disclosure in the sale of health insurance coverages. Additionally, the purpose of this chapter is to promote the availability of health insurance coverage to recently uninsured individuals, regardless of their health status or claims experience, and to improve the overall fairness and efficiency of the individual health insurance market.
(b) This chapter notwithstanding, Medicare supplement coverage shall be governed by Chapter 34, Medicare Supplement Insurance Minimum Standards, of this title.
§ 3602 Definitions [For application of this section, see 79 Del. Laws, c. 99, § 19]
As used in this chapter:
(1) "Affiliation period" means a period of time not to exceed 2 months (3 months for late enrollees) during which a health maintenance organization does not collect premiums and coverage issued is not effective.
(2) "Bona fide association" means, with respect to health insurance coverage offered in Delaware, an association which:
a. Has been actively in existence for at least 5 years;
b. Has been formed and maintained in good faith for purposes other than obtaining insurance and does not condition membership on the purchase of association-sponsored insurance;
c. Does not condition membership in the association on any health status-related factor relating to an individual (including an employee of an employer or a dependent of an employee) and clearly so states in all membership and application materials;
d. Makes health insurance coverage offered through the association available to all members regardless of any health status-related factor relating to such members (or individuals eligible for coverage through a member) and clearly so states in all marketing and application materials;
e. Does not make health insurance coverage offered through the association available other than in connection with a member of the association and clearly so states in all marketing and application materials; and
f. Provides and annually updates information necessary for the Commissioner to determine whether or not an association meets the definition of a bona fide association before qualifying as a bona fide association for the purposes of this chapter.
(3) "Carrier" means an entity subject to the insurance laws and regulations of this State, or subject to the jurisdiction of the Commissioner, that contracts or offers to contract to provide, deliver, arrange for, pay for or reimburse any of the costs of health care services, including a sickness and accident insurance company, a health maintenance organization, a nonprofit hospital and health service corporation or any other entity providing a plan of health insurance, health benefits or health services. "Carrier" also includes any third-party administrator or other entity that adjusts, administers, or settles claims in connection with health benefit plans.
(4) "Church plan" has the meaning given such term under § 3(33) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. § 1002(33)].
(5) "Creditable coverage" means, with respect to an individual, health benefits or coverage provided under any of the following:
a. A group health benefit plan;
b. An individual health benefit plan or individual insurance coverage;
c. Part A or Part B of Title XVIII of the Social Security Act [42 U.S.C. § 1395 et seq. or 42 U.S.C. § 1395j et seq.];
d. Title XIX of the Social Security Act [42 U.S.C. § 1396 et seq.], other than coverage consisting solely of benefits under § 1928 [42 U.S.C. § 1396s];
e. Chapter 55 of Title 10, United States Code [10 U.S.C. § 1071 et seq.];
f. A medical care program of the Indian Health Service or of a tribal organization;
g. A state health benefits risk pool;
h. A health plan offered under Chapter 89 of Title 5, United States Code [5 U.S.C. § 8901 et seq.];
i. A public health plan as defined in federal regulations;
j. A health benefit plan under § 5(e) of the Peace Corps Act [22 U.S.C. § 2504(e)]. Such term does not include coverage consisting solely of coverage of excepted benefits as defined in subparagraph (10)b. of this section.
(6) "Dependent" means a spouse, an enrollee's child by blood or law who is less than 26 years of age and an unmarried child of any age who is medically certified as totally disabled and dependent upon the enrollee.
(7) "Federally eligible individual" means an individual:
a. For whom, as of the date on which the individual seeks coverage under this chapter, the aggregate of the periods of creditable coverage, as defined in this section, is 18 or more months;
b. Whose most recent prior creditable coverage was under a group health plan, governmental plan, church plan or health insurance coverage offered in connection with any such plan;
c. Who is not eligible for coverage under a group health plan, Part A or Part B of Title XVIII of the Social Security Act or a state plan under Title XIX of such act or any successor program, and who does not have other health insurance coverage;
d. With respect to whom the most recent coverage within the period of aggregate creditable coverage was not terminated based on a factor relating to nonpayment of premiums or fraud;
e. Who, if offered the option of continuation coverage under a COBRA continuation provision or under a similar state program, elected such coverage; and
f. Who has exhausted such continuation coverage under such provision or program, if the individual elected the continuation coverage described in subparagraph e. of this paragraph.
(8) "Form" means policies, contracts, riders, endorsements and applications required to be filed with the Commissioner pursuant to §§ 2712 and 6306 of this title.
(9) "Governmental plan" has the meaning given such term under § 3(32) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. § 1002(32) et seq.] and any federal governmental plan.
(10)a. "Health benefit plan" means any hospital or medical expense policy or certificate, major medical expense insurance policy or certificate, any hospital or medical service plan contract, health maintenance organization or health service corporation subscriber contract or any other similar health contract subject to the jurisdiction of the Commissioner.
b. "Health benefit plan" does not include: accident only; credit; dental; vision; Medicare supplement; benefits for long-term care, home health care, community-based care or any combination thereof; disability income insurance; liability insurance including general liability insurance and automobile liability insurance; coverage for on-site medical clinics; coverage issued as a supplement to liability insurance, worker's compensation or similar insurance; or automobile medical payment insurance. The term also excludes specified disease, hospital confinement indemnity or limited benefit health insurance if such types of coverage do not provide coordination of benefits and are provided under separate policies or certificates; provided, that the carrier offering such policies or certificates complies with the following:
1. The carrier files, on or before March 1 of each year, a certification with the Commissioner that contains the statement and information described in sub-subparagraph 2. of this subparagraph.
2. The certification shall contain the following:
A. A statement from the carrier certifying that policies or certificates described in this subparagraph are being offered and marketed as supplemental health insurance and not as a substitute for hospital or medical expense insurance or major medical expense insurance.
B. A summary description of each policy or certificate described in this paragraph, including the average annual premium rates (or range of premium rates in cases where premiums vary by age or other factors) charged for these policies and certificates in this State.
3. In the case of a policy or certificate that is described in this paragraph and that is offered for the first time in this State on or after July 1, 1997, the carrier files with the Commissioner the information and statement required in sub-subparagraph 2. of this subparagraph at least 30 days prior to the date the policy or certificate is issued or delivered in this State.
(11) "Health insurance" means insurance permitted to be written in accordance with § 903 of this title, other than credit health insurance, and coverages written under Chapter 63 of this title, Health Service Corporations. For purposes of this chapter, health service corporations shall be deemed to be engaged in the business of insurance.
(12) "Health status-related factor" means any of the following factors:
a. Health status;
b. Medical condition, including both physical and mental illnesses;
c. Claims experience;
d. Receipt of health care;
e. Medical history;
f. Genetic information, as defined in § 2317 of this title;
g. Evidence of insurability, including conditions arising out of acts of domestic violence;
(13) "Medical care" means amounts paid for:
a. The diagnosis, cure, mitigation, treatment or prevention of disease or amounts paid for the purpose of affecting any structure or function of the body;
b. Transportation primarily for and essential to medical care referred to in subparagraph a. of this paragraph; and
c. Insurance covering medical care referred to in subparagraphs a. and b. of this paragraph.
(14) "Network plan" means health insurance coverage offered by a health carrier under which the financing and delivery of medical care including items and services paid for as medical care are provided, in whole or in part, through a defined set of providers under contract with the carrier.
(15) "Policy" means the entire contract between the insurer and the insured, including the policy riders, endorsements and the application, if attached, and also includes subscriber contracts issued by health service corporations.
(16) "Waiting period" means, with respect to an individual who is a potential participant or beneficiary in the plan, the period that must pass with respect to the individual before the individual is eligible for benefits under the terms of the plan. For purposes of calculating periods of creditable coverage, a waiting period shall not be considered a gap in coverage.
§ 3603 Standards for policy provisions.
(a) The Commissioner shall issue reasonable regulations to establish specific standards, including standards of full and fair disclosure, that set forth the manner, content and required disclosure for the sale of individual policies of health insurance and subscriber contracts of health service corporations, other than conversion policies issued pursuant to a contractual conversion privilege under a group or individual policy of health insurance, when such group or individual contract contains provisions which are inconsistent with the requirements of this chapter or any regulation issued pursuant to this chapter, or to policies being issued to employees or members being added to franchise plans in existence on January 12, 1984 or any regulation issued pursuant to this chapter which shall be in addition to and in accordance with applicable laws of this State including the applicable statutory provisions set forth in §§ 3303-3336 of this title which may cover but shall not be limited to:
(1) Terms of renewability;
(2) Initial and subsequent conditions of eligibility;
(3) Nonduplication of coverage provisions;
(4) Coverage of dependents;
(5) Preexisting conditions;
(6) Termination of insurance;
(7) Probationary periods;
(11) Elimination periods;
(12) Requirements for replacement;
(13) Recurrent conditions; and
(14) The definition of terms including but not limited to the following: Hospital, accident, sickness, injury, physician, accidental means, total disability, partial disability, nervous disorder, guaranteed renewable and noncancellable.
(b) Subsection (a) of this section authorizes the Commissioner to establish specific standards for policy provisions which will facilitate public understanding of such provisions. The subsection does not alter the requirements of §§ 3303-3336 (Uniform Health Policy Provisions Law), or other specifically applicable state laws dealing with individual policy provisions. Regulations adopted under the subsection should be consistent with §§ 3303-3336, and other applicable state laws relating to the subject matter.
(c) The Commissioner may issue reasonable regulations that specify prohibited policies or policy provisions not otherwise specifically authorized by statute which in the opinion of the Commissioner, are unjust, unfair or unfairly discriminatory to the policyholder, any person insured under the policy or beneficiary.
§ 3604 Minimum standards for benefits.
(a) The Commissioner may issue regulations to establish minimum standards for benefits under each of the following categories of coverage in individual policies, other than conversion policies issued pursuant to a contractual conversion privilege under group or individual policy, when such group or individual contract contains provisions which are inconsistent with the requirements of this chapter or any regulation issued pursuant to this chapter or to policies being issued to employees or members being added to franchise plans in existence on January 12, 1984 or any regulation issued pursuant to this chapter, of health insurance and subscriber contracts of health service corporations:
(1) Basic hospital expense coverage;
(2) Basic medical-surgical expense coverage;
(3) Hospital confinement indemnity coverage;
(4) Major medical expense coverage;
(5) Disability income protection coverage;
(6) Accident only coverage;
(7) Specified disease or specified accident coverage; and
(8) Limited benefit health coverage.
(b) Nothing in this section shall preclude the issuance of any policy or contract which combines 2 or more of the categories of coverage enumerated in paragraphs (1)-(6) of subsection (a) of this section.
(c) No policy or contract shall be delivered or issued for delivery in this State which does not meet the prescribed minimum standards for the categories of coverage listed in paragraphs (1)-(8) of subsection (a) of this section, or which does not meet the other applicable requirements for such coverages as prescribed by this title.
(d) The Commissioner shall prescribe the method of identification of policies and contracts based upon coverages provided.
§ 3605 Disclosure requirements.
(a) In order to provide for full and fair disclosure in the sale of individual health insurance policies or subscriber contracts of a health service corporation, no such policy or contract shall be delivered or issued for delivery in this State unless the outline of coverage described in subsection (b) of this section either accompanies the policy or is delivered to the applicant at the time the application is made and an acknowledgement of receipt or certificate of delivery of such outlines is provided the insurer. In the event the policy is issued on a basis other than that applied for, the outline of coverage properly describing the policy or contract must accompany the policy or contract when it is not the policy or contract for which application was made.
(b) The Commissioner shall prescribe by regulation the format and content of the outline of coverage required by subsection (a) of this section. "Format" means style, arrangement and overall appearance, including such items as the size, color and prominence of type and the arrangement of text and captions. Such outline of coverage shall include:
(1) A statement identifying the applicable category or categories of coverage provided by the policy or contract as prescribed in § 3604 of this title;
(2) A description of the principal benefits and coverage provided in the policy or contract;
(3) A statement of the exceptions, reductions and limitations contained in the policy or contract;
(4) A statement of the renewal provisions including any reservation by the insurer or health service corporation of a right to change premiums;
(5) A statement that the outline is a summary of the policy or contract issued or applied for and that the policy or contract should be consulted to determine governing contractual provisions.
(c) The outline of coverage shall not be considered to be part of the policy or subscriber contract for insurance.
(d) Every insurer or health service corporation electing to refuse coverage of an applicant or decline coverage of an insured who is not included within the coverage of Chapter 23 of Title 19 shall disclose to such applicant or insured in writing the fact of such noncoverage or declination of coverage. Any insurer or health insurer failing to disclose in writing such noncoverage or declination of coverage shall be deemed to cover the applicant or insured under the health insurance policy then in effect.
§ 3606 Preexisting conditions [For application of this section, see 79 Del. Laws, c. 99, § 19]
(a) Notwithstanding § 3306 of this title, if an insurer or health service corporation elects to use a simplified application form, with or without a question as to the applicant's health at the time of the application, but without any questions concerning the insured's health history or medical treatment history, the policy must cover any loss from any preexisting condition, and the policy or contract shall not include wording that would permit a defense based upon preexisting conditions.
(b) Notwithstanding subsection (a) of this section and § 3306 of this title, an insurer or a health service corporation which issues a specified disease policy, regardless of whether such policy is issued on the basis of a detailed application form, a simplified application for or an enrollment form, may not deny a claim for any covered loss that begins after the policy has been in force. Except for rescission for misrepresentation, no other defenses based upon preexisting conditions are permitted.
§ 3607 Guaranteed availability of coverage [For application of this section, see 79 Del. Laws, c. 99, § 19]
(a) Guaranteed availability of coverage in the individual market. — Subject to subsections (b)-(d) of this section, a carrier that offers health insurance coverage in the individual market in this State must offer to any individual in this State all products that are approved for sale in the individual market, and must accept any individual that applies for any of those products.
(b) Enrollment periods. — A carrier may restrict enrollment in health insurance coverage to open or special enrollment periods.
(1) Open enrollment periods in the individual market. — A carrier in the individual market must permit an individual to purchase health insurance coverage during the initial and annual open enrollment periods described in 45 CFR § 155.410(b) and (e), with such coverage becoming effective consistent with the dates described in 45 CFR § 155.410(c) and (f).
(2) Special enrollment periods. — A carrier in the individual market shall establish special enrollment periods for qualifying events as defined under § 603 of the Employee Retirement Income Security Act of 1974, as amended [29 USC § 1163]. Enrollees shall be provided 30 calendar days after the date of the qualifying event to elect coverage, with such coverage becoming effective consistent with the dates described in 45 CFR § 155.420(b). These special enrollment periods are in addition to any other special enrollment periods that are required under federal and state law.
(c) Special rules for network plans. —
(1) In the case of a carrier that offers health insurance coverage in the individual market through a network plan, the carrier may do the following:
a. Limit the individuals who may apply for the coverage in the individual market to those who live or reside in the service area for the network plan.
b. Within the service area of the plan, deny coverage to individuals if the carrier has demonstrated to the Commissioner the following:
1. It will not have the capacity to deliver services adequately to enrollees of any additional individuals because of its obligations to existing contract holders and enrollees.
2. It is applying paragraph (c)(1) of this section uniformly to all individuals without regard to the claims experience of those individuals (and their dependents) or any health-status related factor relating to such individuals and dependents.
(2) A carrier that denies health insurance coverage to an individual in any service area, in accordance with paragraph (c)(1)b. of this section, may not offer coverage in the individual market within the service area to any individual for a period of 180 calendar days after the date the coverage is denied. This paragraph (c)(2) does not limit the carrier's ability to renew coverage already in force or relieve the carrier of the responsibility to renew that coverage.
(3) Coverage offered within a service area after the 180-day period specified in paragraph (c)(2) of this section is subject to the requirements of this section.
(d) Application of financial capacity limits. —
(1) A carrier may deny health insurance coverage in the individual market if the carrier has demonstrated to the Commissioner the following:
a. It does not have the financial reserves necessary to underwrite additional coverage.
b. It is applying this paragraph (d)(1) uniformly to all individuals in the individual market in this State consistent with applicable state law and without regard to the claims experience of those individuals (and their dependents) or any health status-related factor relating to such individuals and dependents.
(2) A carrier that denies health insurance coverage to any individual in this State under paragraph (d)(1) of this section may not offer coverage in the individual market in this State before the later of either of the following dates:
a. The one hundred and eighty-first day after the date the carrier denies coverage
b. The date the carrier demonstrates to the Commissioner that the carrier has sufficient reserves to underwrite additional coverage.
(3) Paragraph (d)(2) of this section does not limit the carrier's ability to renew coverage already in force or relieve the carrier of the responsibility to renew that coverage.
(4) Coverage offered after the 180-day period specified in paragraph (d)(2) of this section is subject to the requirements of this section.
(5) The Commissioner may provide for the application of this subsection (d) on service-area-specific basis.
(e) Marketing. — A carrier and its officials, employees, agents and representatives must comply with any applicable state laws and regulations regarding marketing by carriers and cannot employ marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs in health insurance coverage.
(f) Grandfathered health plans. — This section does not apply to grandfathered health plans. For purposes of this section, "grandfathered health plans" means plans provided by a health insurer in which an individual was enrolled on March 23, 2010, for as long as it maintains that status in accordance with federal regulations.
§ 3608 Renewability of coverage.
(a) An individual health benefit plan shall be renewable with respect to an enrollee or dependents at the option of the enrollee, except in any of the following cases:
(1) The individual has failed to pay premiums or contributions in accordance with the terms of the health benefit plan or the health carrier has not received timely premium payments;
(2) The individual has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage;
(3) A decision by the individual carrier to discontinue offering a particular type of health benefit plan in the state's individual insurance market. A type of health benefit plan may be discontinued by the carrier in the individual market only if the carrier:
a. Provides notice of the decision not to renew coverage to all affected individuals and to the Commissioner in each state in which an affected insured individual is known to reside at least 90 days prior to the nonrenewal of any health benefit plans by the carrier. Notice to the Commissioner under this subparagraph shall be provided at least 3 working days prior to the notice to the affected individuals;
b. Offers to each individual provided the particular type of health benefit plan the option to purchase all other health benefit plans currently being offered by the carrier to individuals in the state; and
c. In exercising the option to discontinue the particular type of health benefit plan and, in offering the option of coverage under paragraph (3) of this subsection, the carrier acts uniformly without regard to the claims experience of any affected individual or any health status-related factor relating to any covered individuals or beneficiaries who may become eligible for the coverage;
(4) The carrier elects to discontinue offering and to nonrenew all its individual health benefit plans delivered or issued for delivery in the state. In that case, the carrier shall provide notice of its decision not to renew coverage to all enrollees and to the Commissioner in each state in which an enrollee is known to reside at least 180 days prior to the nonrenewal of the health benefit plan by the carrier. Notice to the Commissioner under this paragraph shall be provided at least 3 working days prior to the notice of the enrollees;
(5) The Commissioner finds that the continuation of the coverage would not be in the best interests of the enrollees, the plan is obsolete or would impair the carrier's ability to meet its contractual obligations. Once the Commissioner has made such a finding, the carrier shall provide notice to each affected covered individual provided coverage of this type of such discontinuation and shall provide each affected covered individual the opportunity to purchase any other individual health insurance coverage being offered by the carrier. In exercising this option, the carrier shall act uniformly without regard for any health status-related factor of enrolled individuals or individuals who may become eligible for such coverage;
(6) The Commissioner finds that the product form is being uniformly modified and is being replaced with comparable coverage.
(b) An individual carrier that elects not to renew all its health benefit plans under subsection (a)(4) of this section shall be prohibited from writing new business in the individual market in this State for a period of 5 years from the date of the discontinuation of the last health benefit plan not so renewed.
(c) In the case of an individual carrier doing business in 1 established geographic service area of the state, the rules set forth in this section shall apply only to the carrier's operations in that service area.
(d) An individual carrier offering coverage through a network plan shall not be required to renew, offer coverage or accept applications pursuant to subsection (a) of this section to an eligible person who no longer resides, lives or works in the service area or in an area for which the carrier is not authorized to do business, but only if coverage is terminated under this paragraph uniformly without regard to any health status-related factor of covered individuals.
(e) In applying this section in the case of a health benefit plan that is made available in the individual market to individuals only through 1 or more bona fide associations, a reference to an "individual" is deemed to include a reference to such an association (of which the individual is a member).
§ 3609 Nondiscrimination in health care [For application of this section, see 79 Del. Laws, c. 99, § 19]
(a) Providers. — A health insurer offering individual health insurance coverage shall not discriminate with respect to participation under the coverage against any health care provider who is acting within the scope of that provider's license or certification under applicable state law. This section shall not require that a health insurer contract with any health care provider willing to abide by the terms and conditions for participation established by the insurer. Nothing in this section shall be construed as preventing a health insurer or the Commissioner from establishing varying reimbursement rates based on quality or performance measures.
(b) Individuals. — The provisions of § 1557 of the Patient Protection and Affordable Care Act (relating to nondiscrimination) [42 U.S.C. § 18116] shall apply with respect to a health insurer offering individual health insurance coverage.
§ 3610 Comprehensive health insurance coverage [For application of this section, see 79 Del. Laws, c. 99, § 19]
(a) Coverage for essential health benefits package. — A health insurer that offers health insurance coverage in the individual market shall ensure that such coverage includes the essential health benefits package in conformity with § 1302 of the Patient Protection and Affordable Care Act [42 U.S.C. § 18022] and state law. The Commissioner shall issue a regulation setting forth what constitutes "essential health benefits" for purposes of this section.
(b) Cost-sharing under individual health insurance policies. — An individual health insurance policy shall ensure that any annual cost-sharing imposed under the plan does not exceed the limitations provided for under § 1302(c)(1) of the Patient Protection and Affordable Care Act [42 U.S.C. § 18022(c)(1)] and state law.
(c) Child-only plans. — If a health insurer offers health insurance coverage in any level of coverage specified under § 1302(d) of the Patient Protection and Affordable Care Act [42 U.S.C. § 18022(d)] or state law, the health insurer shall also offer such coverage in that level as a plan in which the only enrollees are individuals who, as of the beginning of the plan year, have not attained the age of 21.
(d) Dental only. — This section shall not apply to a plan described in § 1302(d)(2)(B)(ii)(I) of the Patient Protection and Affordable Care Act.
§ 3611 Prohibiting discrimination against individual participants and beneficiaries based on health status [For application of this section, see 79 Del. Laws, c. 99, § 19]
In general. — A health insurer offering individual health insurance coverage may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the terms of the coverage based on any of the following health status-related factors in relation to the individual or a dependent of the individual:
(1) Health status.
(2) Medical condition (including both physical and mental illnesses).
(3) Claims experience.
(4) Receipt of health care.
(5) Medical history.
(6) Genetic information.
(7) Evidence of insurability (including conditions arising out of acts of domestic violence).
(9) Any other health status-related factor determined appropriate by the Commissioner.
§ 3612 Insurance offered through the state health insurance exchange [For application of this section, see 79 Del. Laws, c. 99, § 19]
(a) A health insurer that offers health insurance coverage in the individual market through the state health insurance exchange program established pursuant to the Patient Protection and Affordable Care Act [P.L. 111-148] shall first satisfy all certification standards required by federal and state law, and the health insurer shall offer only those policies that are "qualified health plans" as required by federal and state law.
(b) The Commissioner shall adopt regulations, in accordance with the Administrative Procedures Act [Chapter 101 of Title 29], that set forth the certification and compliance standards and requirements for health insurers operating within the state health exchange.
§ 3613 Rating factors [For application of this section, see 79 Del. Laws, c. 99, § 19]
In establishing rates for health insurance coverage offered in the individual market, health insurers shall comply with the rating requirements established under the Patient Protection and Affordable Care Act [P.L. 111-148] and 45 CFR § 147.102. The Commissioner shall adopt regulations, in accordance with the Administrative Procedures Act [Chapter 101 of Title 29], that are consistent with Chapter 25 of this title and set forth more specifically the rating standards and requirements for health insurers operating within this State.