23 CAR pt. 86 | 23 CAR Part 86 — Minimum Standards for Accident and Health Insurance

Chapter I

Subchapter B

Subpart 1

23 CAR § 86-101 Purpose {#sec-23-car-86-101 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-101}

23 CAR § 86-101. Purpose.

The purpose of this part is to implement Arkansas Code §§ 23-85-105, 23-76-125, and § 23-74-401 et seq., so as to provide reasonable standardization and simplification of terms and coverages of individual accident and health insurance policies, individual subscriber contracts of hospital, medical, and dental service corporations and health maintenance organizations, and certificates of fraternal benefit societies in order to:

(1) Facilitate public understanding and comparison;

(2) Eliminate provisions contained in individual accident and health insurance policies, individual subscriber contracts of hospital, medical, and dental service corporations and health maintenance organizations, and certificates of fraternal benefit societies, all of which are hereinafter referred to as "policy" or "policies", that may be misleading or confusing in connection either with:

(A) The purchase of such coverages; or

(B) Settlement of claims; and

(3) Provide for full disclosure in the sale of such coverages.

23 CAR § 86-102 Applicability and scope {#sec-23-car-86-102 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-102}

23 CAR § 86-102. Applicability and scope.

This part shall apply to all policies delivered or issued for delivery in this state on or after the effective date hereof, except it shall not apply to:

(1) Individual policies or contracts issued pursuant to a conversion privilege under a policy or contract of group or individual insurance when such group or individual policy or contract includes provisions that are inconsistent with the requirements of this part;

(2) Policies being issued to employees or members as additions to franchise plans in existence on the effective date of this part;

(3) Individual credit accident and health policies; or

(4) Medicare supplement policies.

23 CAR § 86-103 Severability {#sec-23-car-86-103 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-103}

23 CAR § 86-103. Severability.

Any section or provision of this part held by a court to be invalid or unconstitutional will not affect the validity of any other section or provision.

23 CAR § 86-104 Definitions {#sec-23-car-86-104 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-104}

23 CAR § 86-104. Definitions.

Except as provided hereafter, no policy or policies delivered or issued for delivery to any person in this state shall contain definitions respecting the matters set forth below unless such definitions comply with the requirements of this section:

(1)(A) "Accident", "accidental injury", and "accidental means" may be defined to employ "result" language and shall not include words that establish an accidental means test or use words such as "external, violent, visible wounds" or similar words of description or characterization.

(B) The definition shall not be more restrictive than the following: Injury or injuries, for which benefits are provided, means accidental bodily injury sustained by the insured person that is the direct cause, independent of disease or bodily infirmity or any other cause, and occurs while the insurance is in force.

(i) Injuries for which benefits are provided under workers’ compensation, employer's liability, or similar law or a motor vehicle no-fault plan, unless prohibited by law; or

(ii) Injuries occurring while the insured person is engaged in any activity pertaining to any trade, business, employment, or occupation for wage or profit.

(D) Note. The first-party coverage that was prescribed for use in automobile liability policies issued in Arkansas effective July 1, 1974, is not a motor vehicle no-fault plan under which benefits may be excluded under this section;

(2)(A) "Convalescent nursing home", "extended care facility", "skilled nursing facility", or substantially similar terms may be defined in relation to its status, facilities, and available services.

(B) Rehabilitative facilities are licensed as hospitals in Arkansas but shall be included in the definition of convalescent nursing homes for the purposes of this part.

(i) Be operated pursuant to law;

(ii) Be approved for payment of Medicare benefits or be qualified to receive such approval, if so requested;

(iii) Be primarily engaged in providing, in addition to room and board accommodations, skilled nursing care under the supervision of a duly licensed physician;

(iv) Provide continuous twenty-four-hours-a-day nursing service by or under the supervision of a registered graduate professional nurse (RN) for at least eight (8) hours per day and a registered graduate professional nurse (RN) or licensed practical nurse (LPN) for the remaining sixteen (16) hours; and

(v) Maintains a daily medical record of each patient.

(D) The definition of such home or facility may provide that such term shall not be inclusive of:

(i) Any home, facility, or part thereof used primarily for rest;

(ii) A home or facility for the aged or for the care of drug addicts or alcoholics; or

(iii) A home or facility primarily used for:

(a) The care and treatment of mental diseases or disorders; or

(b) Custodial or educational care;

(3)(A) "Hospital" may be defined in relation to its status, facilities, and available services or to reflect its accreditations by The Joint Commission.

(B) The definition of the term "hospital" shall not be more restrictive than one requiring that the hospital:

(i) Be an institution operated pursuant to law;

(ii) Be primarily and continuously engaged in providing or operating, either on its premises or in facilities available to the hospital on a prearranged basis and under the supervision of a staff of duly licensed physicians, medical, diagnostic, and major surgical facilities for the medical care and treatment of sick or injured persons on an inpatient basis for which a charge is made; and

(iii) Provide twenty-four-hour nursing service by or under the supervision of registered graduate professional nurses (RNs).

(i) Convalescent homes or convalescent, rest, or nursing facilities;

(ii) Facilities primarily affording custodial, educational, or rehabilitative care;

(iii) Facilities for:

(a) The aged;

(b) Drug addicts; or

(iv) Any military or veterans hospital or soldiers home or any hospital contracted for or operated by any national government or agency thereof for the treatment of members or ex-members of the armed forces, except for services rendered on an emergency basis where a legal liability exists for charges made to the individual for such services; or

(v) Any facility, contracted for or operated by any state, county, or local government or any agency thereof in which the insured is furnished services for which, in the absence of insurance, he or she would not be required to pay;

(4) "Medicare" may be substantially defined as "The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as Then Constituted or Later Amended" or "Title I, Part I of Public Laws 89-97, as Enacted by the Eighty-Ninth Congress of the United States of America and popularly known as the Health Insurance for the Aged Act" as then constituted and any later amendments or substitutes thereof or words of similar import;

(5) "Mental or nervous disorders" shall not be defined more restrictively than a definition including:

(A) Neurosis;

(B) Psychoneurosis;

(D) Psychosis; or

(E) Mental or emotional disease or disorder of any kind;

(6)(A) "Nurses" may be defined so that the description of nurse is restricted to a type of nurse, such as a:

(i) Registered graduate professional nurse (RN);

(ii) Licensed practical nurse (LPN); or

(iii) Licensed psychiatric technician nurse (LPTN).

(B) If the words "nurse", "trained nurse", or “registered nurse" are used without specific instruction, then the use of such terms requires the insurer to recognize the services of any individual who qualifies under such terminology in accordance with the applicable statutes or administrative rules of the licensing or registry board of the state;

(7) "One (1) period of confinement" means:

(A) Consecutive days of in-hospital service received as an inpatient; or

(B) Successive confinements when discharge from and readmission to the hospital occurs within a period of time not more than ninety (90) days;

(8)(A) "Partial disability" may be:

(i) Defined in relation to the individual's inability to perform one (1) or more but not all of the "major", "important", or "essential" duties of employment or occupation; or

(ii) Related to:

(a) A percentage of the time worked;

(b) A specified number of hours; or

(B) Where a policy provides total disability benefits and partial disability benefits, only one (1) elimination period may be required;

(9)(A) "Physician" may be defined by including such words as "duly qualified physician" or "duly licensed physician".

(B) The use of such terms requires an insurer to recognize and to accept, to the extent of its obligation under the contract, all providers of medical care and treatment when such services are:

(i) Within the scope of the provider's licensed authority; and

(ii) Provided pursuant to applicable laws;

(10)(A) "Preexisting condition" shall not be defined to be more restrictive than the following.

(B) “Preexisting condition” means:

(i) The existence of symptoms that would cause an ordinarily prudent person to seek diagnosis, care, or treatment within a five-year period preceding the effective date of the coverage of the insured person; or

(ii) A condition for which medical advice or treatment was recommended by a physician or received from a physician within a five-year period preceding the effective date of the coverage of the insured person;

(11)(A) "Residual disability" may be:

(i) Defined in relation to the individual's reduction in earnings; and

(ii) Related either to the:

(a) Inability to perform some part of the "major", "important", or "essential duties" of employment or occupation; or

(b) Inability to perform all usual business duties for as long as is usually required.

(B) A policy that provides for residual disability benefits may require a qualification period during which the insured must be continuously totally disabled before residual disability benefits are payable.

(D) In lieu of the term "residual disability", the insurer may use:

(i) "Proportionate disability"; or

(ii) Other terms of similar import that, in the opinion of the Insurance Commissioner, adequately and fairly describe the benefit;

(12)(A) "Sickness" shall not be defined to be more restrictive than the following: “Sickness” means sickness or disease of an insured person that first manifests itself after the effective date of insurance and while the insurance is in force.

(B) A definition of sickness may provide for a probationary period that will not exceed thirty (30) days from the effective date of the coverage of the insured person.

(C) The definition may be further modified to exclude sickness or disease for which benefits are provided under any workers’ compensation, occupational disease, employer's liability, or similar law; and

(13) "Total disability":

(A) A general definition of “total disability” shall not be more restrictive than one requiring the individual to be:

(i) Totally disabled from engaging in any employment or occupation for which he or she is or becomes qualified by reason of education, training, or experience; and

(ii) Not in fact engaged in any employment or occupation for wage or profit;

(B) Total disability may be defined in relation to the inability of the person to perform duties but shall not be based solely upon an individual's inability to:

(i) Perform "any occupation whatsoever", “any occupational duty", or "any and every duty of his occupation"; or

(ii) Engage in any training or rehabilitation program; and

(C)(i) An insurer may specify the requirement of the complete inability of the person to perform all of the substantial and material duties of one’s regular occupation or words of similar import.

(ii) An insurer may require care by a physician (other than the insured or a member of the insured's immediate family).

Subpart 2

23 CAR § 86-201 Prohibited policy provisions {#sec-23-car-86-201 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-201}

23 CAR § 86-201. Prohibited policy provisions.

(a)(1) Except as provided in 23 CAR § 86-104(12), no policy shall contain provisions establishing a probationary or waiting period during which no coverage is provided under the policy subject to the further exception that a policy may specify a probationary or waiting period not to exceed six (6) months for specified diseases or conditions and losses resulting therefrom for:

(A) Hernia;

(B) Disorder of reproduction organs;

(D) Adenoids;

(E) Appendix; and

(F) Tonsils.

(2) However, the permissible six-month exception shall not be applicable where such specified diseases or conditions are treated on an emergency basis.

(3) Accident policies shall not contain probationary or waiting periods.

(b)(1)(A) No policy or rider for additional coverage may be issued as a dividend unless an equivalent cash payment is offered to the policyholder as an alternative to such dividend policy or rider.

(B) No such dividend policy or rider shall be issued for an initial term of less than six (6) months.

(2) The initial renewal subsequent to the issuance of any policy or rider as a dividend shall clearly disclose that:

(A) The policyholder is renewing the coverage that was provided as a dividend for the previous term; and

(B) Such renewal is optional with the policyholder.

(c) No policy shall exclude coverage for a loss due to a preexisting condition for a period greater than twelve (12) months following policy issue where:

(1) The application for such insurance does not seek disclosure of prior:

(A) Illness;

(B) Disease;

(D) Medical care and treatment; and

(2) Such preexisting condition is not specifically excluded by the terms of the policy.

(d)(1) A disability income policy may contain a "return of premium" or "cash value benefit" so long as:

(A) Such return of premium or cash value benefit is not reduced by an amount greater than the aggregate of any claims paid under the policy;

(B) The insurer demonstrates that the reserve basis for such policies is adequate; and

(2) Insurers may also issue a return of premium on cancer, specified disease, and long-term care policies.

(3) No other policy shall provide a return of premium or cash value benefit, except:

(A) Return of unearned premium upon termination or suspension of coverage;

(B) Retroactive waiver of premium paid during disability;

(D) Experience rating refunds.

(e) Policies providing hospital confinement indemnity coverage shall not contain provisions excluding or reducing coverage because of confinement in a hospital contracted for or operated by the federal, state, county, or local government.

(f) No policy shall limit or exclude coverage by type of illness, accident, treatment, or medical condition, except as follows:

(1) Preexisting conditions or diseases, except for congenital anomalies of a covered dependent child;

(2) Mental or emotional disorders, alcoholism, and drug addiction;

(3) Pregnancy, except for complications of pregnancy, other than for policies defined in 23 CAR § 86-306;

(4) Illness, treatment, or medical condition arising out of:

(A) War or act of war (whether declared or undeclared);

(B) Participation in a felony, riot, or insurrection;

(D) Suicide (sane or insane), attempted suicide, or intentionally self-inflicted injury;

(E) Aviation, except as a fare-paying passenger on a scheduled aircraft; and

(F) Interscholastic sports, with respect to short-term nonrenewable policies;

(5) Cosmetic surgery, except that "cosmetic surgery" shall not include:

(A) Reconstructive surgery when such service is incidental to trauma, infection, or other diseases of the involved part; and

(B) Reconstructive surgery because of congenital disease or anomaly of a covered dependent child that has resulted in a functional defect;

(6)(A) Treatment provided in a government hospital, except as provided in 23 CAR § 86-104(3)(C)(iv) and (v).

(B) Benefits provided under:

(i) Medicare or other government program (except Medicaid);

(ii) Any state or federal workers’ compensation, employer's liability, or occupational disease law; or

(iii) Any motor vehicle no-fault law.

(i) Hospitals;

(ii) Laboratories; or

(iii) Other institutions.

(D) Services performed by a member of the covered person's immediate family and any other services for which no charge is normally made in the absence of insurance.

(E) Note. The first-party coverage that was prescribed for use in automobile liability policies issued in Arkansas effective July 1, 1974, is not a motor vehicle no-fault plan under which benefits may be excluded under this section.

(F) Note. Hospital confinement indemnity coverage shall be controlled by subsection (e) of this section and not subsection (f) of this section;

(7) Dental care or treatment, except that "dental care” or "treatment" shall not include reconstructive surgery when such service is incidental to trauma;

(8) Eyeglasses, hearing aids, and examination for the prescription or fitting thereof;

(9) Rest cures, custodial care, transportation, and routine physical examinations; and

(10) Territorial limitations.

(g)(1) Provisions of this part shall not impair or limit the use of waivers to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases, physical condition, or extra-hazardous activity.

(2) Where waivers are required as a condition of issuance, renewal, or reinstatement, signed acceptance by the insured is required, unless on the initial issuance of the policy the full text of the waiver is contained or referred to either on the first page or specification page.

Subpart 3

23 CAR § 86-301 Minimum standards — Generally {#sec-23-car-86-301 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-301}

23 CAR § 86-301. Minimum standards — Generally.

(a)(1) The following minimum standards for benefits are prescribed for the categories of coverage noted in the following subsections.

(2) No individual policy shall be delivered or issued for delivery in this state that does not meet the required minimum standards for the specified categories unless the Insurance Commissioner finds that such policies or contracts are approvable as limited benefit health insurance and the outline of coverage complies with the appropriate outline in 23 CAR § 86-410.

(3) Nothing in this section shall preclude the issuance of any policy or contract combining two (2) or more categories of coverage.

(b) General rules.

(1) Each policy shall contain on its face page the actual title or titles reflecting the categories contained in this subpart.

(2)(A) A "noncancellable", "guaranteed renewable", or "noncancellable and guaranteed renewable" policy shall not provide for termination of coverage of the spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than nonpayment of premium.

(B) The policy shall provide that in the event of the insured's death, the spouse of the insured, if covered under the policy, shall become the insured.

(3)(A) The terms "noncancellable", "guaranteed renewable", or "noncancellable and guaranteed renewable" shall not be used without further explanatory language in accordance with the disclosure requirements of 23 CAR § 86-401(a).

(B)(i) The terms "noncancellable" or "noncancellable and guaranteed renewable" may be used only in a policy that the insured has the right to continue in force by the timely payment of premiums set forth in the policy until the age of sixty-five (65) or to eligibility for Medicare, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force.

(ii) Provided, however, any accident and health policy that provides for periodic payments, weekly or monthly, for a specified period during the continuance of disability resulting from accident or sickness may provide that the insured has the right to continue the policy only to age sixty (60) if, at age sixty (60), the insured has the right to continue the policy in force at least to age sixty-five (65) while actively or regularly employed.

(C)(i) Except as provided above, the term "guaranteed renewable" may be used only in a policy which the insured has the right to continue in force by the timely payment of premiums until the age of sixty-five (65) or to eligibility for Medicare, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force, except that the insurer may make changes in premium rates by classes.

(4)(A) In a family policy covering both husband and wife, the age of the younger spouse must be used as the basis for meeting the age and durational requirements of the definitions of “noncancellable” or "guaranteed renewable".

(B) However, this requirement shall not prevent termination of coverage of the older spouse upon attainment of the stated age limit (e.g., age sixty-five (65)) so long as the policy may be continued in force as to the younger spouse to the age or for the durational period as specified in said contract.

(5) When accidental death and dismemberment is part of the insurance coverage offered under the contract, the insured shall have the option to include all insureds under such coverage and not just the principal insured.

(6) If a policy contains a status-type military service exclusion or a provision that suspends coverage during military service, the policy shall provide, upon receipt of written request, for refund of premiums as applicable to such person on a pro-rata basis.

(7) In the event the insurer cancels or refuses to renew, policies providing pregnancy benefits shall provide for an extension of benefits as to pregnancy commencing while the policy is in force and for which benefits would have been payable had the policy remained in force.

(8) Policies providing convalescent or extended-care benefits following hospitalization shall not condition such benefits upon admission to the convalescent or extended-care facility within a period of less than fourteen (14) days after discharge from the hospital.

(9)(A) Family coverage shall continue for any unmarried dependent child who is incapable of self-sustaining employment due to an intellectual disability or physical handicap and who is chiefly dependent on the insured for support and maintenance on the date that such child's coverage would otherwise terminate under the policy due to the attainment of a specified age limit (prior to the attainment of nineteen (19)) for children.

(B) The coverage shall continue so long as the:

(i) Contract remains in force; and

(ii) Dependent remains in such condition.

(C) Notice of such incapacity or dependency must be furnished to the insurer by the policyholder, except in no event shall this notice requirement preclude eligible dependents under this part regardless of age.

(10) Any policy coverage for the recipient in a transplant operation shall also provide reimbursement of any medical expenses of a live donor to the extent that benefits remain and are available under the recipient's policy after benefits for the recipient's own expenses have been paid.

(11)(A) A policy may contain a provision relating to recurrent disabilities.

(B) Provided, however, that no such provision shall specify that a recurrent disability be separated by a period greater than six (6) months.

(12)(A) Accidental death and dismemberment benefits shall be payable if the loss occurs within ninety (90) days from the date of the accident, irrespective of total disability.

(B) However, no claim shall be denied wherein the insured with the use of extraordinary life support systems delays the loss for more than ninety (90) days from the date of the accident.

(C) Disability income benefits, if provided, shall not require the loss to commence less than thirty (30) days after the date of accident, nor shall any policy that the insurer cancels or refuses to renew require that it be in force at the time disability commences if the accident occurred while the policy was in force.

(13) Specific dismemberment benefits shall not be in lieu of other benefits unless the specific benefit equals or exceeds the other benefits.

(14) Any accident-only policy providing benefits that vary according to the type of accidental cause shall prominently set forth in the outline of coverage the circumstances under which benefits are payable that are lesser than the maximum amount payable under the policy.

(15) Termination of the policy shall be without prejudice to any continuous loss that commenced while the policy was in force, but the extension of benefits beyond the period the policy was in force may be predicated upon the continuous total disability of the insured, limited to:

(A) The duration of the policy benefit period, if any; or

(B) Payment of the maximum benefits.

(16)(A) If, to prevent overinsurance, benefits are reduced due to the presence of Medicare, then benefits may be reduced for those insureds actually covered by Medicare.

(B) Benefits may not be reduced based solely on eligibility for Medicare.

23 CAR § 86-302 Basic hospital expense coverage {#sec-23-car-86-302 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-302}

23 CAR § 86-302. Basic hospital expense coverage.

(a) "Basic hospital expense coverage" is a policy of accident and health insurance that provides coverage for a period of not less than thirty-one (31) days during any continuous hospital confinement for each person insured under the policy for expense incurred for necessary treatment and services rendered as a result of accident or sickness for at least the following:

(1) Daily hospital room and board in an amount not less than the lesser of:

(A) Eighty percent (80%) of the charges for semiprivate room accommodations; or

(B) Eighty dollars ($80.00) per day;

(2) Miscellaneous hospital services for expenses incurred for the charges made by the hospital for services and supplies which are customarily rendered by the hospital and provided for use only during any one (1) period of confinement in an amount not less than eighty percent (80%) of the charges incurred up to a maximum of at least five thousand dollars ($5,000) or thirty-one (31) times the daily hospital room and board benefits, whichever is the lesser; and

(3) Hospital outpatient services consisting of hospital services on the day surgery is performed and hospital services rendered within seventy-two (72) hours after accidental injury, in an amount not less than eighty dollars ($80.00), and X-ray and laboratory tests to the extent that benefits for such services would have been provided if rendered to an inpatient of the hospital.

(b) Benefits provided under subdivisions (a)(1) and (2) of this section may be provided subject to a combined deductible amount not in excess of two hundred fifty dollars ($250).

23 CAR § 86-303 Basic medical-surgical expense coverage {#sec-23-car-86-303 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-303}

23 CAR § 86-303. Basic medical-surgical expense coverage.

"Basic medical-surgical expense coverage" is a policy of accident and health insurance that provides coverage for each person insured under the policy for the expenses incurred for the necessary services rendered by a physician for treatment of an injury or sickness for at least the following:

(1) Surgical services, in amounts not less than:

(A) Those provided on a fee schedule based on the relative values contained in the State of New York Certified Surgical Fee Schedule, the 1964 California Relative Value Schedule, or other acceptable relative value scale of surgical procedures up to a maximum of at least one thousand six hundred dollars ($1,600) for any one (1) procedure; or

(B) Eighty percent (80%) of the reasonable charges;

(2) Anesthesia services, consisting of administration of necessary general anesthesia and related procedures in connection with covered surgical service rendered by a physician other than the physician (or his or her assistant) performing the surgical services, in an amount not less than:

(A) Eighty percent (80%) of the reasonable charges; or

(B) Fifteen percent (15%) of the surgical service benefit; and

(3) In-hospital medical services, consisting of physician services rendered to a person who is a bed patient in a hospital for treatment of sickness or injury other than that for which surgical care is required, in an amount not less than:

(A) Eighty percent (80%) of the reasonable charges; or

(B) Twenty-five dollars ($25.00) per day for not less than thirty-one (31) days during one (1) period of confinement.

23 CAR § 86-304 Hospital confinement indemnity coverage {#sec-23-car-86-304 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-304}

23 CAR § 86-304. Hospital confinement indemnity coverage.

(a) "Hospital confinement indemnity coverage" is a policy of accident and health insurance that provides daily benefits for hospital confinement on an indemnity basis in an amount not less than eighty dollars ($80.00) per day and not less than thirty-one (31) days during any one (1) period of confinement for each person insured under the policy.

(b)(1) No elimination period shall be allowed greater than one (1) day.

(2) However, coverage issued as a rider to an existing policy may be written in an amount not less than fifteen dollars ($15.00) per day with the same benefit period and elimination period provided in the existing policy.

23 CAR § 86-305 Major medical expense coverage or comprehensive health expense coverage {#sec-23-car-86-305 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-305}

23 CAR § 86-305. Major medical expense coverage or comprehensive health expense coverage.

“Major medical expense coverage" or "comprehensive health expense coverage" is a policy of accident and health insurance that provides hospital, medical, and surgical expense coverage to an aggregate maximum of not less than thirty-five thousand dollars ($35,000), copayment by the covered person not to exceed twenty-five percent (25%) of covered charges, a deductible stated on a per-person, per-family, per-illness, per-benefit period, or per-year basis or a combination of such bases not to exceed five percent (5%) of the aggregate maximum limit under the policy, unless the policy is written to compliment underlying hospital and medical insurance, in which case such deductible may be increased by the amount of the benefits provided by such underlying insurance that is then in force or thereafter issued for each covered person for at least:

(1) Daily hospital room and board expenses, prior to application of the copayment percentage, for not less than one hundred twenty-five dollars ($125) daily or the actual semiprivate room rate, whichever is less, for a period of not less than thirty-one (31) days during continuous hospital confinement;

(2) Miscellaneous hospital services, prior to application of the copayment percentage, for an aggregate maximum not less than five thousand dollars ($5,000) or thirty-one (31) times the daily room and board rate if specified in dollar amounts;

(3) Surgical services, prior to application of copayment percentage, to a maximum of not less than one thousand six hundred dollars ($1,600) for the most severe operation with the amounts provided for other operations reasonably related to such maximum amount;

(4) Anesthesia services, prior to application of the copayment percentage, for a maximum of:

(A) Not less than fifteen percent (15%) of the covered surgical fees; or

(B) Alternatively, if the surgical schedule is based on relative values, not less than the amount provided therein for anesthesia services at the same unit value as used for the surgical schedule;

(5) In-hospital medical services, prior to application of the copayment percentage, as defined in 23 CAR § 86-303(3);

(6) Out-of-hospital care, prior to application of the copayment percentage, consisting of:

(A) Physicians’ services rendered on an ambulatory basis where coverage is not provided elsewhere in the policy for diagnosis and treatment of sickness or injury; and

(B) Diagnostic X-ray, laboratory services, radiation therapy, and hemodialysis ordered by a physician; and

(7) Not fewer than three (3) of the following additional benefits, prior to application of the copayment percentage, for an aggregate maximum of such covered charges of not less than three thousand two hundred dollars ($3,200):

(A) In-hospital private-duty graduate registered nurse services;

(B) Convalescent nursing home care;

(D) Rental of special medical equipment, as defined by the insurer in the policy;

(E) Artificial limbs or eyes, casts, splints, trusses, or braces;

(F) Treatment for functional nervous disorders and mental and emotional disorders; and

(G) Out-of-hospital prescription drugs and medications.

23 CAR § 86-306 Disability income protection coverage {#sec-23-car-86-306 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-306}

23 CAR § 86-306. Disability income protection coverage.

(a) "Disability income protection coverage" is a policy that provides for periodic payments, weekly or monthly, for a specified period during the continuance of disability resulting from either sickness or injury or a combination thereof that:

(1) Provides that periodic payments that are payable at ages after sixty-two (62) and reduced solely on the basis of age are at least fifty percent (50%) of the amounts payable immediately prior to sixty-two (62);

(2) Contains an elimination period no greater than:

(A) Ninety (90) days in the case of a coverage providing a benefit of one (1) year or less;

(B) One hundred eighty (180) days in the case of coverage providing a benefit of more than one (1) year but not greater than two (2) years; or

(C) Three hundred sixty-five (365) days in all other cases during the continuance of disability resulting from sickness or injury; and

(3) Has a maximum period of time for which it is payable during disability of at least six (6) months, except in the case of a policy covering disability arising out of normal pregnancy or childbirth in which case the period for such disability may be one (1) month.

(b)(1) No reduction in benefits shall be put into effect because of an increase in Social Security or similar benefits during a benefit period.

(2) This section does not apply to those policies providing business buyout coverage.

23 CAR § 86-307 Accident-only coverage and specified accident coverage {#sec-23-car-86-307 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-307}

23 CAR § 86-307. Accident-only coverage and specified accident coverage.

(a)(1) "Accident-only coverage" is a policy of accident and health insurance that provides coverage, singly or in combination, for death, dismemberment, disability, or hospital and medical care caused by accident.

(2) Accidental death and double dismemberment amounts under such a policy shall be at least one thousand dollars ($1,000), and a single dismemberment amount shall be at least five hundred dollars ($500).

(b) "Specified accident coverage" is an accident insurance policy that provides coverage for a specifically identified kind of accident (or accidents) for each person insured under the policy for accidental death or accidental death and dismemberment, combined with a benefit amount of not less than:

(1) One thousand dollars ($1,000) for accidental death;

(2) One thousand dollars ($1,000) for double dismemberment; and

(3) Five hundred dollars ($500) for a single dismemberment.

23 CAR § 86-308 Specified disease coverage {#sec-23-car-86-308 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-308}

23 CAR § 86-308. Specified disease coverage.

(a)(1) "Specified disease coverage" pays benefits for the diagnosis and treatment of a specifically named disease or diseases.

(2)(A) Any such policy must meet the following general rules and one (1) of the following sets of minimum standards for benefits.

(B) Such insurance covering cancer, whether cancer only or in conjunction with other condition or conditions or disease or diseases, must meet the standards of subsection (d) or (e) of this section.

(C) Insurance covering a specific disease or diseases other than cancer must meet the standards of subsection (c) of this section.

(b) General rules.

(1) The following rules shall apply to specified disease coverages in addition to all other rules imposed by this part.

(2) In cases of conflict between the following and other rules, the following ones shall govern:

(A) Policies covering a single specified disease or combination of specified diseases may not be sold or offered for sale other than as specified disease coverage under this section;

(B) Any policy issued pursuant to this section that conditions payment upon pathological diagnosis of a covered disease shall also provide that if such a pathological diagnosis is medically inappropriate, a clinical diagnosis will be accepted in lieu thereof;

(C) Notwithstanding any other provision of this part, specified disease policies shall provide benefits to any covered person not only for the specified disease or diseases but also for any other condition or conditions or disease or diseases, directly caused or aggravated by the specified disease or diseases or the treatment of the specified disease or diseases;

(D) Policies containing specified disease coverage shall be at least guaranteed renewable;

(E) No policy issued pursuant to this section shall contain a waiting or probationary period greater than thirty (30) days;

(F)(i) Any application for specified disease coverage shall contain a statement above the signature of the applicant that no person to be covered for specified disease is also covered by any Title XIX program (Medicaid or any similar name).

(ii) Such statement may be combined with any other statement for which the insurer may require the applicant's signature;

(G) Payments may be conditioned upon a covered person's receiving medically necessary care, given in a medically appropriate location, under a medically accepted course of diagnosis or treatment;

(H) Except for the uniform provision regarding other insurance with this insurer, benefits for specified disease coverage shall be paid regardless of other coverage available through individual health insurance; and

(I)(i) After the effective date of the coverage (or applicable waiting period, if any) benefits shall begin with the first day of care or confinement if such care or confinement is for a covered disease even though the diagnosis is made at some later date.

(ii) The retroactive application of such coverage may not be less than ninety (90) days prior to such diagnosis.

(c) The following minimum benefit standards apply to noncancer coverages, and one (1) of the following standards must be met:

(1) A policy that provides coverage for each person insured under the policy for a specifically named disease or diseases with a deductible amount not in excess of two hundred fifty dollars ($250), an overall aggregate benefit limit of no less than ten thousand dollars ($10,000), and a benefit period of not less than three (3) years for at least the following incurred expenses:

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

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

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

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

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

(G) Drugs and medicines prescribed by a physician;

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

(I) Braces, crutches, and wheelchairs as are deemed necessary by the attending physician for the treatment of the disease;

(J) 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

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

(2) A policy that provides coverage for each person insured under the policy for a specifically named disease or diseases with:

(A) No deductible amount;

(B) An overall aggregate benefit limit of not less than fifty thousand dollars ($50,000) payable at the rate of not less than one hundred dollars ($100) a day while confined in a hospital; and

(d) A policy that provides coverage for each person insured under the policy for cancer-only coverage or in combination with one (1) or more other specified diseases on an expense-incurred basis for services, supplies, care, and treatment that are ordered or prescribed by a physician as necessary for the treatment of cancer, in amounts not in excess of the usual and customary charges, with a deductible amount not in excess of two hundred fifty dollars ($250), an overall aggregate benefit limit of not less than ten thousand dollars ($10,000), and a benefit period of not less than three (3) 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 (RN) provided in a hospital;

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

(B) Provided, however, if such other expenses are covered, that the items listed in subdivisions (d)(1), (2), (4), (5), and (7) of this section plus at least the following shall be included, but may be subject to copayment by the covered person not to exceed twenty percent (20%) of covered charges, when rendered on an outpatient basis:

(i) Braces, crutches, and wheelchairs as are deemed necessary by the attending physician for the treatment of the disease;

(ii) 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;

(iii)(a) Home health care that is necessary care and treatment provided at the covered person's residence by a home healthcare agency or by others under arrangements made with a home healthcare agency.

(b) The program of treatment must be prescribed in writing by the covered person's attending physician, who must approve the program prior to its start.

(d) For definition of “home healthcare agency”, see subsection (f) of this section;

(iv) Physical, speech, hearing, and occupational therapy;

(v) Special equipment, including:

(a) Hospital bed toilette;

(b) Pulleys;

(d) Aspirator;

(e) Chux;

(f) Oxygen;

(g) Surgical dressings;

(h) Rubber shields; and

(i) Colostomy and ileostomy appliances;

(vi) Prosthetic devices, including wigs and artificial breasts; and

(vii) Nursing home care for noncustodial services; and

(9) May include coverage of any other expenses necessarily incurred in the treatment of the disease.

(e)(1) The following minimum benefit standards apply to cancer coverages written on a per diem indemnity basis, which must offer covered persons:

(A) A fixed-sum payment of at least one hundred fifty dollars ($150) for each day of hospital confinement for at least three hundred sixty-five (365) days; and

(B) A fixed-sum payment equal to one-half (1/2) the hospital inpatient benefit for each day of hospital or nonhospital outpatient surgery, chemotherapy, and radiation therapy, for at least three hundred sixty-five (365) days of treatment.

(2)(A) Benefits tied to confinement in a skilled nursing home or to receipt of home health care are optional.

(B) If a policy offers these benefits, they must equal the following:

(i) A fixed-sum payment equal to one-fourth (1/4) of the hospital inpatient benefit for each day of skilled nursing home confinement for at least one hundred (100) days;

(ii) A fixed-sum payment equal to one-fourth (1/4) of the hospital inpatient benefit for each day of home health care for at least one hundred (100) days; and

(iii) Notwithstanding any other provision of this part, any restriction or limitation applied to the benefits in subdivisions (e)(2)(B)(i) and (e)(2)(B)(ii) of this section, whether by definition or otherwise, shall be no more restrictive than those under Medicare.

(f) Home healthcare agency.

(1) A home healthcare agency is one that:

(A) Is an agency approved under Title XVIII of the Social Security Act (Medicare);

(B) Is licensed to provide home health care under applicable state law; or

(i) It is primarily engaged in providing home healthcare services;

(ii) Its policies are established by a group of professional personnel, including at least:

(a) One (1) physician; and

(b) One (1) registered nurse (RN);

(iii) Supervision of home healthcare services is provided by a physician or a registered nurse (RN);

(iv) It maintains clinical records on all patients; and

(v) It has a full-time administrator.

(2) Home health care includes, but is not limited to:

(A) Part-time or intermittent skilled nursing services provided by a registered nurse (RN) or a licensed practical nurse (LPN);

(B) Part-time or intermittent home health aide services that provide supportive services in the home under the supervision of a:

(i) Registered nurse; or

(ii) Physical, speech, or hearing occupational therapist;

(D) Medical supplies, drugs, and medicines prescribed by a physician and related pharmaceutical services, and laboratory services to the extent such charges or costs would have been covered under the policy if the insured person had remained in the hospital.

History

Codification Notes: Title XVIII of the Social Security Act (Medicare) is codified at 42 U.S.C. § 1001 et seq. Authorities: Arkansas Code § 23-61-108; Arkansas Code § 23-76-125

23 CAR § 86-309 Nursing home confinement indemnity coverage {#sec-23-car-86-309 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-309}

23 CAR § 86-309. Nursing home confinement indemnity coverage.

(a) "Nursing home confinement indemnity coverage" is a policy of accident and health insurance that provides benefits for confinement in facilities as defined in 23 CAR § 86-104(2) on a daily indemnity basis.

(b) Benefits may not be more restrictive than the following:

(1) Forty-five dollars ($45.00) per day from the first day;

(2) Benefit period not less than three hundred sixty-five (365) days; and

(3) Requirement that insured:

(A) Be hospitalized for at least three (3) days; and

(B) Enter the facility within fourteen (14) days following hospital discharge.

23 CAR § 86-310 Intensive care unit indemnity coverage {#sec-23-car-86-310 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-310}

23 CAR § 86-310. Intensive care unit indemnity coverage.

(a)(1) "Intensive care unit indemnity coverage" is a policy of accident and health insurance that provides daily benefits for hospital confinement in an intensive care unit on an indemnity basis in an amount not less than one hundred fifty dollars ($150) per day and not less than fifteen (15) days during any one (1) period of confinement for each person insured under the policy.

(2) No elimination period shall be allowed.

(b) A definition of “hospital intensive care unit” shall not be more restrictive than the following:

(1) Specifically designated facility of the hospital that:

(A) Provides the highest level of medical care; and

(B) Is restricted to those patients who are physically, critically ill or injured;

(2) Such facilities must be separate and apart from:

(A) The surgical recovery room; and

(B) Rooms, beds, and wards customarily used for patient confinement; and

(3) They must be:

(A) Permanently equipped with special equipment for the care of the critically ill or injured; and

(B) Under close observation by trained and qualified personnel assigned on a full-time basis exclusively to that unit.

23 CAR § 86-311 Limited benefit health insurance coverage {#sec-23-car-86-311 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-311}

23 CAR § 86-311. Limited benefit health insurance coverage.

(a) "Limited benefit health insurance coverage" is any policy or contract that provides benefits that are less than the minimum standards for benefits required under 23 CAR §§ 86-302 – 86-311.

(b)(1) Such policies or contracts may be delivered or issued for delivery in this state only if the outline of coverage required by 23 CAR § 86-410 is completed and delivered by 23 CAR § 86-402.

(2) The policy title required by 23 CAR § 86-301(b)(1) shall include "Limited Benefit Health Insurance Coverage" as well as the appropriate categories of coverage.

Subpart 4

23 CAR § 86-401 General rules {#sec-23-car-86-401 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-401}

23 CAR § 86-401. General rules.

(a)(1) Each policy shall include a renewal, continuation, or nonrenewal provision.

(2) The language or specification of such provision must be consistent with the type of contract to be issued.

(3) Such provision shall be appropriately captioned and clearly state the:

(A) Duration, where limited, of renewability; and

(B) Duration of the term of coverage for which the policy is issued and for which it may be renewed.

(b)(1) Except for riders or endorsements by which the insurer effectuates a request made in writing by the policyholder or exercises a specifically reserved right under the policy, all riders or endorsements added to a policy after the date of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the policy shall require signed acceptance by the policyholder.

(2) After date of policy issue, any rider or endorsement that increases benefits or coverage with a concomitant increase in premium during the policy term must be agreed to in writing signed by the insured, except if the increased benefits or coverage is required by law.

(c) Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, such premium charge shall be set forth in the policy.

(d) A policy that provides for the payment of benefits based on standards described as "usual and customary", "reasonable and customary", or words of similar import shall include a definition of such terms and an explanation of such terms in its accompanying outline of coverage.

(e) If a policy contains any limitations with respect to preexisting conditions, such limitations must appear as a separate paragraph of the policy and be labeled as "Preexisting Condition Limitations".

(f) All accident-only polices, specified disease policies, and specified accident policies shall contain on the first page of the policy or attached thereto in either contrasting color or in boldface type at least equal to the size of type used for policy captions a prominent statement as follows:

“This is an (include appropriate policy title) only policy and it does not pay benefits for loss from any other cause.”

(g)(1) All policies, except single premium nonrenewable policies and as otherwise provided in this subsection, shall have a notice prominently printed on the first page of the policy or attached thereto stating in substance that the policyholder shall have the right to return the policy within ten (10) days of its delivery, unless the policy provides for a greater period, and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason.

(2) With respect to policies issued pursuant to a direct-response solicitation to persons eligible for Medicare by reason of age, the policy shall have a notice prominently printed on the first page of the policy or attached thereto stating in substance that the policyholder shall have the right to return the policy within thirty (30) days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason.

(h) If age is to be used as a determining factor for reducing the maximum aggregate benefits made available in the policy as originally issued, such fact must be prominently set forth in the outline of coverage.

(i) If a policy contains a conversion privilege, it shall comply in substance with the following:

(1) The caption of the provision shall be "Conversion Privilege" or words of similar import;

(2) The provision shall indicate the:

(A) Persons eligible for conversion;

(B) Circumstances applicable to the conversion privilege, including any limitations on the conversion; and

(3) The provision shall specify the benefits to be provided on conversion or may state that the converted coverage will be as provided on a policy form then being used by the insurer for that purpose.

(j)(1) Insurers issuing policies that provide hospital or medical expense coverage on an expense-incurred or indemnity basis other than incidentally to a person or persons eligible for Medicare by reason of age shall provide to the policyholder a Medicare supplement buyer's guide as described in Minimum Standards for Medicare Supplement Policies, 23 CAR pt. 89.

(2) Delivery of the buyer's guide shall be made whether or not such individual policy qualifies as a Medicare supplement policy as defined in Minimum Standards for Medicare Supplement Policies.

(3) Except in the case of direct-response insurers, delivery of the buyer's guide shall be made at the time of application, and acknowledgment of receipt of certification of delivery of the buyer's guide shall be provided to the insurer.

(4) Direct-response insurers shall deliver the buyer's guide:

(A) Not later than the time the policy is delivered; or

(B) Sooner upon request.

(5) The phrase "other than incidentally" is intended to exempt policies such as those:

(A) That provide accidental death benefits for travel or other accidents; and

(B) Where the medical expense or indemnity, if any, only accompanies such other benefits.

(k) Outlines of coverage delivered in connection with policies defined in this part as "hospital confinement indemnity", "specified disease", "nursing home confinement indemnity coverage", "intensive care unit indemnity coverage", or "limited benefit health insurance coverage" to persons eligible for Medicare by reason of age shall contain, in addition to the requirements of 23 CAR § 86-304, 23 CAR § 86-307, and Minimum Standards for Medicare Supplement Policies, the following language, which shall be printed on or attached to the first page of the outline of coverage:

“This policy IS NOT A MEDICARE SUPPLEMENT POLICY.”

(l) All specified disease and cancer policies shall contain on the first page of the policy or attached thereto in either contrasting color or in boldface type at least equal to the size of type for policy captions a prominent statement as follows:

“CAUTION: This is a limited policy. Read it carefully with the outline of coverage.”

23 CAR § 86-402 Outline of coverage requirements for individual coverages {#sec-23-car-86-402 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-402}

23 CAR § 86-402. Outline of coverage requirements for individual coverages.

(a) No policies subject to this part shall be delivered or issued for delivery in this state unless:

(1) An appropriate outline of coverage, as prescribed in 23 CAR §§ 86-403 – 86-410, is completed as to policy or contract;

(2) The outline is either delivered with the policy or delivered to the applicant at the time the application is made; and

(3) Acknowledgment of receipt or certification of delivery of such outline of coverage is provided to the insurer.

(b) If an outline of coverage was delivered at the time of application and the policy or contract is issued on a basis which would require revision of the outline, a substitute outline of coverage properly describing the policy or contract must accompany the policy or contract when it is delivered and contain the following statement, in no less than 10-point type, immediately above the company name:

"NOTICE: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application, and the coverage originally applied for has not been issued."

(c)(1) The appropriate outline of coverage for policies or contracts providing hospital coverage that only meets the standards of 23 CAR § 86-302 shall be the statement contained in 23 CAR § 86-403.

(2) The appropriate outline of coverage for policies or contracts providing coverage that meet the standards of:

(A) Both 23 CAR §§ 86-302 and 86-303 shall be the statement contained in 23 CAR § 86-405;

(B) Both 23 CAR §§ 86-302 and 86-305 or 23 CAR §§ 86-303 and 86-305 or 23 CAR §§ 86-302, 86-303, and 86-305 shall be the statement contained in 23 CAR § 86-407;

(D) 23 CAR § 86-307 or § 86-308 shall be the statement contained in 23 CAR § 86-409;

(E) 23 CAR § 86-306 shall be the statement contained in 23 CAR § 86-408; and

(F) 23 CAR § 86-311 shall be the statement contained in 23 CAR § 86-410.

(d)(1) Appropriate changes in terminology may be made in the outline of coverage in the case of a policy or policies.

(2) In any other case where the prescribed outline of coverage is inappropriate for the coverage provided by the policy or contract, an alternate outline of coverage shall be submitted to the Insurance Commissioner for prior approval.

23 CAR § 86-403 Basic hospital expense coverage — Outline of coverage {#sec-23-car-86-403 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-403}

23 CAR § 86-403. Basic hospital expense coverage — Outline of coverage.

(a) An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of 23 CAR § 86-302.

(b) The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME) BASIC HOSPITAL EXPENSE COVERAGE OUTLINE OF COVERAGE (1) Read Your Policy Carefully - This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract, and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY

CAREFULLY. (2) Basic Hospital Expense Coverage - Policies of this category are designed to provide to persons insured coverage for hospital expenses incurred as a result of a covered accident or sickness. Coverage is provided for daily hospital room and board, miscellaneous hospital services, and hospital outpatient services, subject to any limitations, deductibles, and copayment requirements set forth in the policy. Coverage is not provided for physicians’ or surgeons’ fees or unlimited hospital expenses. (3) (A brief, specific description of the benefits, including dollar amounts and number of days duration where applicable, contained in this policy, in the following order: (A) Daily hospital room and board; (B) Miscellaneous hospital services; (C) Hospital outpatient services; and (D) Other benefits, if any.) (Note: The above description of benefits shall be stated clearly and concisely and shall include a description of any deductible or copayment provision applicable to the benefits described.) (4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.) (5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

23 CAR § 86-404 Basic medical-surgical expense coverage — Outline of coverage {#sec-23-car-86-404 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-404}

23 CAR § 86-404. Basic medical-surgical expense coverage — Outline of coverage.

(a) An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of 23 CAR § 86-303.

(b) The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME) BASIC MEDICAL-SURGICAL EXPENSE COVERAGE OUTLINE OF COVERAGE (1) Read Your Policy Carefully - This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract, and only the actual policy provisions will control your policy. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY. (2) Basic Medical-Surgical Expense Coverage - Policies of this category are designed to provide to persons insured coverage for medical-surgical expenses incurred as a result of a covered accident or sickness. Coverage is provided for surgical services, anesthesia services, and in-hospital medical services, subject to any limitations, deductibles, and copayment requirements set forth in the policy. Coverage is not provided for hospital expenses or unlimited medical- surgical expenses. (3) (A brief, specific description of the benefits, including dollar amounts and number of days duration where applicable, contained in this policy, in the following order: (A) Surgical services; (B) Anesthesia services; (C) In-hospital medical services; and (D) Other benefits, if any.) (Note: The above description of benefits shall be stated clearly and concisely and shall include a description of any deductible or copayment provision applicable to the benefits described.) (4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.) (5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

23 CAR § 86-405 Basic hospital and medical-surgical expense coverage — Outline of coverage {#sec-23-car-86-405 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-405}

23 CAR § 86-405. Basic hospital and medical-surgical expense coverage — Outline of coverage.

(a) An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of 23 CAR §§ 86-302 and 86-303.

(b) The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME) BASIC HOSPITAL AND MEDICAL-SURGICAL EXPENSE COVERAGE OUTLINE OF COVERAGE (1) Read Your Policy Carefully - This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract, and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY. (2) Basic Hospital and Medical-Surgical Expense Coverage - Policies of this category are designed to provide, to persons insured, coverage for hospital and medical-surgical expenses incurred as a result of a covered accident or sickness. Coverage is provided for daily hospital room and board, miscellaneous hospital services, hospital outpatient services, surgical services, anesthesia services, and in-hospital medical services, subject to any limitations, deductibles, and copayment requirements set forth in the policy. Coverage is not provided for unlimited hospital or medical-surgical expenses. (3) (A brief, specific description of the benefits, including dollar amounts and number of days duration where applicable, contained in this policy, in the following order: (A) Daily hospital room and board; (B) Miscellaneous hospital services; (C) Hospital outpatient services; (D) Surgical services; (E) Anesthesia services; (F) In-hospital medical services; and (G) Other benefits, if any.) (Note: The above description of benefits shall be stated clearly and concisely and shall include a description of any deductible or copayment provision applicable to the benefits described.) (4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.) (5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

23 CAR § 86-406 Hospital confinement indemnity coverage, nursing home confinement indemnity coverage, or intensive care unit indemnity coverage — Outline of coverage {#sec-23-car-86-406 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-406}

23 CAR § 86-406. Hospital confinement indemnity coverage, nursing home confinement indemnity coverage, or intensive care unit indemnity coverage — Outline of coverage.

(a) An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of 23 CAR § 86-304, § 86-309, or § 86-310.

(b) The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME) [HOSPITAL CONFINEMENT INDEMNITY], [NURSING HOME CONFINEMENT INDEMNITY], OR [INTENSIVE CARE UNIT INDEMNITY] COVERAGE OUTLINE OF COVERAGE (1) Read Your Policy Carefully - This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract, and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY. (2) Hospital Confinement Indemnity Coverage or Nursing Home Confinement Indemnity or Intensive Care Unit Indemnity Coverage - Policies of this category are designed to provide, to persons insured, coverage in the form of a fixed daily benefit during periods of hospitalization (nursing home confinement or intensive care) resulting from a covered accident or sickness, subject to any limitations set forth in the policy. Such policies do not provide any benefits other than the fixed daily indemnity for hospital confinement (nursing home confinement or intensive care) and any additional benefit described below. (3) (A brief, specific description of the benefits contained in this policy, in the following order: (A) Daily benefit payable during (hospital, nursing, or intensive care unit) confinement; and (B) Duration of benefit described in (A).) (Note: The above description of benefits shall be stated clearly and concisely.) (4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefit described in (3) above.) (5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.) (6) (Any benefits provided in addition to the daily [hospital, nursing home, or intensive care unit] benefit.)

23 CAR § 86-407 Major medical expense coverage or comprehensive health expense coverage — Outline of coverage {#sec-23-car-86-407 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-407}

23 CAR § 86-407. Major medical expense coverage or comprehensive health expense coverage — Outline of coverage.

(a) An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of 23 CAR § 86-305.

(b) The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME) MAJOR MEDICAL EXPENSE COVERAGE OR [COMPREHENSIVE HEALTH EXPENSE COVERAGE] OUTLINE OF COVERAGE (1) Read Your Policy Carefully - This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract, and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY. (2) Major Medical Expense Coverage or [Comprehensive Health Expense Coverage] - Policies of this category are designed to provide, to persons insured, coverage for major hospital, medical, and surgical expenses incurred as a result of a covered accident or sickness. Coverage is provided for daily hospital room and board, miscellaneous hospital services, surgical services, anesthesia services, in-hospital medical services, and out-of-hospital care, subject to any deductibles, copayment provisions, or other limitations which may be set forth in the policy. Basic hospital or basic medical insurance coverage is not provided. (3) (A brief, specific description of the benefits, including dollar amounts, contained in this policy in the following order: (A) Daily hospital room and board; (B) Miscellaneous hospital services; (C) Surgical services; (D) Anesthesia services; (E) In-hospital medical services; (F) Out-of-hospital care; (G) Maximum dollar amount for covered charges; and (H) Other benefits, if any.) (Note: The above description of benefits shall be stated clearly and concisely and shall include a description of any deductible or copayment provision applicable to the benefits described.) (4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.) (5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

23 CAR § 86-408 Disability income protection coverage — Outline of coverage {#sec-23-car-86-408 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-408}

23 CAR § 86-408. Disability income protection coverage — Outline of coverage.

(a) An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of 23 CAR § 86-306.

(b) The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME) DISABILITY INCOME PROTECTION COVERAGE OUTLINE OF COVERAGE (1) Read Your Policy Carefully - This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract, and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY. (2) Disability Income Protection Coverage - Policies of this category are designed to provide, to persons insured, coverage for disabilities resulting from a covered accident or sickness, subject to any limitations set forth in the policy. Coverage is not provided for basic hospital, basic medical-surgical, or major medical expenses. (3) (A brief, specific description of the benefit contained in this policy.) (Note: The above description of benefits shall be stated clearly and concisely.) (4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.) (5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

23 CAR § 86-409 Accident-only coverage, specified accident coverage, or specified disease coverage — Outline of coverage {#sec-23-car-86-409 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-409}

23 CAR § 86-409. Accident-only coverage, specified accident coverage, or specified disease coverage — Outline of coverage.

(a) An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of 23 CAR § 86-307.

(b) The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME) [ACCIDENT ONLY], [SPECIFIED ACCIDENT], OR [SPECIFIED DISEASE] COVERAGE OUTLINE OF COVERAGE (1) Read Your Policy Carefully - This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract, and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY. (2) (Accident Only), (Specified Accident), or (Specified Disease) Coverage -Policies of this category are designed to provide, to persons insured, restricted coverage paying benefits ONLY when certain losses occur as a result of (accident only), (specified accident), or (specified disease). Coverage is not provided for basic hospital, basic medical-surgical, or major medical or comprehensive expenses. (3) (A brief, specific description of the benefits, including dollar amounts, contained in this policy.) (Note: The above description of benefits shall be stated clearly and concisely and shall include a description of any deductible or copayment provisions applicable to the benefits described. Proper disclosure of benefits which vary according to accidental cause shall be made in accordance with 23 CAR § 86- 301(b)(13) of this rule.) (4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.) (5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

23 CAR § 86-410 Limited-benefit health insurance coverage — Outline of coverage {#sec-23-car-86-410 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-410}

23 CAR § 86-410. Limited-benefit health insurance coverage — Outline of coverage.

(a) An outline of coverage, in the form prescribed below, shall be issued in connection with policies that do not meet the minimum standards of 23 CAR §§ 86-302 – 86-305 and 86-307 – 86-310.

(b) The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME) LIMITED BENEFIT HEALTH COVERAGE (APPROPRIATE CATEGORY OF COVERAGE) OUTLINE OF COVERAGE (1) Read Your Policy Carefully - This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract, and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY. (2) Limited Benefit Health Coverage - Policies of this category are designed to provide, to persons insured, limited or supplemental coverage. (3) (A brief, specific description of the benefits, including dollar amounts, contained in this policy.) (Note: The above description of benefits shall be stated clearly and concisely and shall include a description of any deductible or copayment provision applicable to the benefits described. Proper disclosure of benefits that vary according to accidental cause shall be made in accordance with 23 CAR § 86- 301(b)(13).) (4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.) (5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

Subpart 5

23 CAR § 86-501 Notice and form {#sec-23-car-86-501 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-501}

23 CAR § 86-501. Notice and form.

(a)(1) Application forms shall include a question designed to elicit information as to whether the insurance to be issued is intended to replace any other disability insurance presently in force.

(2) A supplementary application or other form to be signed by the applicant containing such a question may be used.

(b)(1) Upon determining that a sale will involve replacement, an insurer, other than a direct-response insurer, or its agent shall furnish the applicant, prior to issuance or delivery of the policy, the notice described in subsection (c) of this section.

(2) One (1) copy of such notice shall be retained by the applicant, and an additional copy signed by the applicant shall be retained by the insurer.

(3)(A) A direct-response insurer shall deliver to the applicant, upon issuance of the policy, the notice described in subsection (d) of this section.

(B) In no event, however, will such a notice be required in the solicitation of the following types of policies:

(i) Accident-only policies; and

(ii) Single-premium nonrenewable policies.

(c) The notice required by subsection (b) of this section for an insurer, other than a direct-response insurer, shall provide, in substantially the following form:

NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT AND HEALTH INSURANCE

According to (your application) (information you have furnished), you intend to lapse or otherwise terminate existing accident and health insurance and replace it with a policy to be issued by (insert company name) Insurance Company. For your own information and protection, you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy. (1) Health conditions which you may presently have, (pre-existing conditions) may not be immediately or fully covered under the new policy. This could result in denial or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under your present policy. (2) You may wish to secure the advice of your present insurer or its agent regarding the proposed replacement of your present policy. This is not only your right but it is also in your best interest to make sure you understand all the relevant factors involved in replacing your present coverage. (3) If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical/health history. Failure to include all material medical information on an application may provide a basis for the company to deny any future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, reread it carefully to be certain that all information has been properly recorded. The above “Notice to Applicant” was delivered to me on:

(Date)

(Applicant’s Signature)

(d) The notice required by subsection (b) of this section for a direct-response insurer shall be as follows:

NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT AND HEALTH INSURANCE

According to (your application) (information you have furnished), you intend to lapse or otherwise terminate existing accident and health insurance and replace it with the policy delivered herewith issued by (insert company name) Insurance Company. Your new policy provides ten (10) days within which you may decide without cost whether you desire to keep the policy. For your own information and protection, you should be aware of and seriously consider factors which may affect the insurance protection available to you under the new policy. (1) Health conditions which you may presently have, (pre-existing conditions) may not be immediately or fully covered under the new policy. This could result in denial or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under your present policy. (2) You may wish to secure the advice of your present insurer or its agent regarding the proposed replacement of your present policy. This is not only your right but it is also in your best interest to make sure you understand all the relevant factors involved in replacing your present coverage. (3) (To be included only if the application is attached to the Policy.) If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, read the copy of the application attached to your new policy and be sure that all questions are answered fully and correctly. Omissions or misstatements in the application could cause an otherwise valid claim to be denied. Carefully check the application and write to (insert company name and address) within ten (10) days if any information is not correct and complete or if any past medical history has been left out of the application.

23 CAR Part 86 — Minimum Standards for Accident and Health Insurance

Chapter I

Subchapter B

Subpart 1

23 CAR § 86-101 Purpose {#sec-23-car-86-101 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-101}

23 CAR § 86-102 Applicability and scope {#sec-23-car-86-102 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-102}

23 CAR § 86-103 Severability {#sec-23-car-86-103 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-103}

23 CAR § 86-104 Definitions {#sec-23-car-86-104 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-104}

Subpart 2

23 CAR § 86-201 Prohibited policy provisions {#sec-23-car-86-201 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-201}

Subpart 3

23 CAR § 86-301 Minimum standards — Generally {#sec-23-car-86-301 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-301}

23 CAR § 86-302 Basic hospital expense coverage {#sec-23-car-86-302 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-302}

23 CAR § 86-303 Basic medical-surgical expense coverage {#sec-23-car-86-303 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-303}

23 CAR § 86-304 Hospital confinement indemnity coverage {#sec-23-car-86-304 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-304}

23 CAR § 86-305 Major medical expense coverage or comprehensive health expense coverage {#sec-23-car-86-305 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-305}

23 CAR § 86-306 Disability income protection coverage {#sec-23-car-86-306 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-306}

23 CAR § 86-307 Accident-only coverage and specified accident coverage {#sec-23-car-86-307 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-307}

23 CAR § 86-308 Specified disease coverage {#sec-23-car-86-308 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-308}

23 CAR § 86-309 Nursing home confinement indemnity coverage {#sec-23-car-86-309 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-309}

23 CAR § 86-310 Intensive care unit indemnity coverage {#sec-23-car-86-310 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-310}

23 CAR § 86-311 Limited benefit health insurance coverage {#sec-23-car-86-311 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-311}

Subpart 4

23 CAR § 86-401 General rules {#sec-23-car-86-401 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-401}

23 CAR § 86-402 Outline of coverage requirements for individual coverages {#sec-23-car-86-402 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-402}

23 CAR § 86-403 Basic hospital expense coverage — Outline of coverage {#sec-23-car-86-403 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-403}

23 CAR § 86-404 Basic medical-surgical expense coverage — Outline of coverage {#sec-23-car-86-404 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-404}

23 CAR § 86-405 Basic hospital and medical-surgical expense coverage — Outline of coverage {#sec-23-car-86-405 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-405}

23 CAR § 86-406 Hospital confinement indemnity coverage, nursing home confinement indemnity coverage, or intensive care unit indemnity coverage — Outline of coverage {#sec-23-car-86-406 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-406}

23 CAR § 86-407 Major medical expense coverage or comprehensive health expense coverage — Outline of coverage {#sec-23-car-86-407 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-407}

23 CAR § 86-408 Disability income protection coverage — Outline of coverage {#sec-23-car-86-408 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-408}

23 CAR § 86-409 Accident-only coverage, specified accident coverage, or specified disease coverage — Outline of coverage {#sec-23-car-86-409 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-409}

23 CAR § 86-410 Limited-benefit health insurance coverage — Outline of coverage {#sec-23-car-86-410 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-410}

Subpart 5

23 CAR § 86-501 Notice and form {#sec-23-car-86-501 omnilex-key=us-ar-regs-official--title-23-part-86--23 CAR § 86-501}

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