Title of Regulation: 14VAC5-170. Rules Governing Minimum Standards for Medicare Supplement Policies (amending 14VAC5-170-75, 14VAC5-170-85, 14VAC5-170-95, 14VAC5-170-100, 14VAC5-170-130).

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

Public Hearing Information: A public hearing will be held upon request.

Public Comment Deadline: January 19, 2024.

Agency Contact: Julie Blauvelt, Deputy Commissioner, Bureau of Insurance, State Corporation Commission, P.O. Box 1157, Richmond, VA 23218, telephone (804) 371-9865, or email julie.blauvelt@scc.virginia.gov.

Summary:

Pursuant to Chapters 371 and 372 of the 2023 Acts of Assembly, the proposed amendments (i) expand the definition of a disability as a reason for eligibility for Medicare; (ii) establish a six-month period to enroll in a Medicare supplement policy for an individual who is younger than 65 years of age and is eligible for Medicare by reason of disability under 42 USC § 426-1; and (iii) place a limitation on premium rates that issuers may charge for plans for eligible persons

AT RICHMOND, NOVEMBER 28, 2023

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. INS-2023-00096

Ex Parte: In the matter of Amending

Rules Governing Minimum Standards

for Medicare Supplement Policies

ORDER TO TAKE NOTICE

Section 12.1-13 of the Code of Virginia ("Code") provides that "[i]n the administration and enforcement of all laws within its jurisdiction, the [State Corporation Commission ("Commission")] shall have the power to promulgate rules and regulations[.]" Section 38.2-223 of the Code provides that after notice and opportunity for all interested parties to be heard, the Commission may issue any rules and regulations necessary or appropriate for the administration and enforcement of Title 38.2 of the Code. Section 38.2-3608 of the Code specifically provides that the Commission may issue regulations to establish minimum standards for certain matters concerning Medicare supplement policies.

The rules and regulations issued by the Commission pursuant to §§ 38.2-223 and 38.2-3608 of the Code are set forth in Title 14 of the Virginia Administrative Code. A copy may be found at: law.lis.virginia.gov/admincode/title14/agency5/.

The Bureau of Insurance ("Bureau") has undertaken a review of Chapter 170 of Title 14 of the Virginia Administrative Code, entitled "Rules Governing Minimum Standards for Medicare Supplement Policies," 14 VAC 5-170-10 et seq. ("Rules"), to address legislation enacted by the General Assembly during its 2023 regular session amending § 38.2-3610 of the Code.¹ This section addresses the offer of Medicare supplement policies to individuals under age 65 who are eligible for Medicare by reason of disability. The amendments to the section expand the definition of a disability as a reason for eligibility for Medicare, establish a six-month period to enroll in a Medicare supplement policy for an individual who is under 65 years of age and is eligible for Medicare by reason of disability under 42 U.S.C. § 426-1, and place a limitation on premium rates that issuers may charge for plans for persons under this section.

As a result of its review, the Bureau has submitted to the Commission a proposal to amend the following sections of the Rules: 14 VAC 5-170-75, 14 VAC 5-170-85, 14 VAC 5-170-95, 14 VAC 5-170-100 and 14 VAC 5-170-130. The Bureau asserts that these amendments are necessary to align the Rules more closely with the above-referenced legislative changes to § 38.2-3610 of the Code. The Bureau asserts that the proposed amendments to the regulations identify the specific requirements for offering policies to individuals under age 65 who are eligible for Medicare by reason of disability, clarify enrollment periods, and establish requirements for premium rates that may be charged for policies issued to such individuals.

NOW THE COMMISSION, having considered the applicable law, is of the opinion and finds that reasonable notice of the proposal to amend the Rules as described herein should be given, interested parties should be afforded an opportunity to be heard in accordance with the Commission's Rules of Practice and Procedure, 5 VAC 5-20-10 et seq., and the proposal to amend the Rules should be considered for adoption with a proposed effective date of April 1, 2024.

Accordingly, IT IS ORDERED THAT:

(1) The proposed amendments to the Rules, as set out at 14 VAC 5-170-75, 14 VAC 5-170-85, 14 VAC 5-170-95, 14 VAC 5-170-100 and 14 VAC 5-170-130 of the Virginia Administrative Code, are attached hereto and made a part hereof.

(2) All interested persons who desire to comment in support of or in opposition to, or request a hearing to consider, the proposed amendments to the Rules described herein, shall file such comments and/or hearing requests on or before January 19, 2024, with the Clerk of the Commission, State Corporation Commission, c/o Document Control Center, P.O. Box 2118, Richmond, Virginia 23218. Requests for a hearing shall state why a hearing is necessary and why the issues cannot be adequately addressed in written comments. Interested persons desiring to submit comments electronically may do so by following the instructions at the Commission's website: scc.virginia.gov/pages/Case-Information. All comments shall refer to Case No. INS-2023-00096.

(3) The Bureau shall file its response to any comments filed pursuant to Ordering Paragraph (2) on or before February 16, 2024.

(4) If no written request for a hearing on the adoption of the proposed amendments to the Rules outlined in this Order is received on or before January 19, 2024, the Commission, upon consideration of any comments submitted in support of or in opposition to the proposal, may adopt the amendments to the Rules as submitted by the Bureau.

(5) The Bureau shall provide notice electronically or via postcard of the proposal to all carriers licensed in Virginia to issue Medicare supplement policies or certificates and to all Life & Health interested persons.

(6) The Commission's Office of General Counsel shall cause a copy of this Order, together with the proposal to amend the Rules, to be forwarded to the Virginia Registrar of Regulations for appropriate publication in the Virginia Register of Regulations.

(7) The Commission's Division of Information Resources shall make available this Order and the attached proposal on the Commission's website: scc.virginia.gov/pages/Case-information.

(8) The Bureau shall file with the Clerk of the Commission a certificate of compliance with the notice requirements of Ordering Paragraph (5) above.

Commissioner James C. Dimitri participated in this matter.

A COPY hereof shall be sent electronically by the Clerk of the Commission to:

C. Meade Browder, Jr., Senior Assistant Attorney General, Office of the Attorney General, Division of Consumer Counsel, 202 North 9th Street, 8th Floor, Richmond, Virginia 23219-3424, at MBrowder@oag.state.va.us; and a copy hereof shall be delivered to the Commission's Office of General Counsel and the Bureau of Insurance in care of Deputy Commissioner Julie S. Blauvelt.

___________________________________

14VAC5-170-75. Benefit standards for 2010 Medicare supplement policies delivered on or after June 1, 2010.

A. The following standards are applicable to all Medicare supplement benefit plan policies or certificates delivered or issued for delivery in this Commonwealth with an effective date for coverage on or after June 1, 2010. No policy or certificate may be advertised, solicited, delivered, or issued for delivery in this Commonwealth as a Medicare supplement policy or certificate unless it complies with these benefit standards. No issuer may offer any 1990 standardized Medicare supplement benefit plan for sale on or after June 1, 2010. Benefit standards applicable to Medicare supplement policies and certificates issued with an effective date for coverage prior to June 1, 2010, remain subject to the requirements of 14VAC5-170-70.

B. The following standards apply to Medicare supplement policies and certificates and are in addition to all other requirements of this chapter.

1. A Medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six months from the effective date of coverage because it involved a preexisting condition. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.

2. A Medicare supplement policy or certificate shall not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents.

3. A Medicare supplement policy or certificate shall provide that benefits designed to cover cost-sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, copayment, or coinsurance amounts. Premiums may be modified to correspond with such changes.

4. No Medicare supplement policy or certificate shall provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium.

5. Each Medicare supplement policy shall be guaranteed renewable.

a. The issuer shall not cancel or nonrenew the policy solely on the ground of health status of the individual.

b. The issuer shall not cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation.

c. If the Medicare supplement policy is terminated by the group policyholder and is not replaced as provided in subdivision 5 e of this subsection, the issuer shall offer certificateholders an individual Medicare supplement policy which that, at the option of the certificateholder:

(1) Provides for continuation of the benefits contained in the group policy; or

(2) Provides for benefits that otherwise meet the requirements of this subsection.

d. If an individual is a certificateholder in a group Medicare supplement policy and the individual terminates membership in the group, the issuer shall:

(1) Offer the certificateholder the conversion opportunity described in subdivision 5 c of this subsection; or

(2) At the option of the group policyholder, offer the certificateholder continuation of coverage under the group policy.

e. If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.

6. Termination of a Medicare supplement policy or certificate shall be without prejudice to any continuous loss that commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be conditioned upon the continuous total disability of the insured, limited to the duration of the policy benefit period if any, or payment of the maximum benefits. Receipt of Medicare Part D benefits will not be considered in determining a continuous loss.

7. a. A Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificateholder for the period not to exceed 24 months in which the policyholder or certificateholder has applied for and is determined to be entitled to medical assistance under Title XIX of the Social Security Act, but only if the policyholder or certificateholder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to assistance.

b. If suspension occurs and if the policyholder or certificateholder loses entitlement to medical assistance, the policy or certificate shall be automatically reinstituted (effective as of the date of termination of entitlement) as of the termination of entitlement if the policyholder or certificateholder provides notice of loss of entitlement within 90 days after the date of loss and pays the premium attributable to the period, effective as of the date of termination of entitlement.

c. Each Medicare supplement policy shall provide that benefits and premiums under the policy shall be suspended (for any period that may be provided by federal regulation) at the request of the policyholder if the policyholder is entitled to benefits under § 226 (b) of the Social Security Act and is covered under a group health plan as defined in § 1862 (b)(1)(A)(v) of the Social Security Act. If suspension occurs and if the policyholder or certificateholder loses coverage under the group health plan, the policy shall be automatically reinstituted (effective as of the date of loss of coverage) if the policyholder provides notice of loss of coverage within 90 days after the date of the loss and pays the premium attributable to the period, effective as of the date of termination of enrollment in the group health plan.

d. Reinstitution of coverages as described in subdivisions 7 b and c of this subsection:

(1) Shall not provide for any waiting period with respect to treatment of preexisting conditions;

(2) Shall provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of suspension; and

(3) Shall provide for classification of premiums on terms at least as favorable to the policyholder or certificateholder as the premium classification terms that would have been applied to the policyholder or certificateholder had the coverage not been suspended.

C. Standards for basic (core) benefits common to Medicare supplement insurance benefit plans A, B, C, D, F, F with High Deductible, G, M, and N. Every issuer of Medicare supplement insurance benefit plans shall make available to any eligible individual age 65 years or older a policy or certificate including only the following basic "core" package of benefits to each prospective insured. An issuer may make available to prospective eligible insureds age 65 years or older any of the other Medicare supplement insurance benefit plans in addition to the basic core package, but not in lieu of it.

1. Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;

2. Coverage of Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used;

3. Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer's payment as payment in full and may not bill the insured for any balance;

4. Coverage under Medicare Parts A and B for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations;

5. Coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, of Medicare eligible expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible; and

6. Coverage of cost sharing for all Part A Medicare eligible hospice care and respite care expenses.

D. Standards for additional benefits. The following additional benefits shall be included in Medicare supplement benefit Plans B, C, D, F, F with High Deductible, G, M, and N as provided by 14VAC5-170-85.

1. Medicare Part A deductible: Coverage for 100% of the Medicare Part A inpatient hospital deductible amount per benefit period.

2. Medicare Part A deductible: Coverage for 50% of the Medicare Part A inpatient hospital deductible amount per benefit period.

3. Skilled nursing facility care: Coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for posthospital skilled nursing facility care eligible under Medicare Part A.

4. Medicare Part B deductible: Coverage for 100% of the Medicare Part B deductible amount per calendar year regardless of hospital confinement.

5. 100% of the Medicare Part B excess charges: Coverage for all of the difference between the actual Medicare Part B charges as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge.

6. Medically necessary emergency care in a foreign country: Coverage to the extent not covered by Medicare for 80% of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician, and medical care received in a foreign country, which care would have been covered by Medicare if provided in the United States and which care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of $250, and a lifetime maximum benefit of $50,000. For purposes of this benefit, "emergency care" shall mean care needed immediately because of an injury or an illness of sudden and unexpected onset.

14VAC5-170-85. Standard plans for 2010 standardized Medicare supplement policies delivered on or after June 1, 2010.

A. The following standard plans are applicable to all Medicare supplement benefit plan policies or certificates delivered or issued for delivery in this Commonwealth with an effective date for coverage on or after June 1, 2010. No policy or certificate may be advertised, solicited, delivered, or issued for delivery in this Commonwealth as a Medicare supplement policy or certificate unless it complies with these benefit plan standards. Benefit plan standards applicable to Medicare supplement policies and certificates issued with an effective date for coverage before June 1, 2010, remain subject to the requirements of 14VAC5-170-80.

B. For persons age 65 years or older:

1. An issuer shall make available to each prospective policyholder and certificateholder a policy form or certificate form containing only the basic (core) benefits, as defined in 14VAC5-170-75 C.

2. If an issuer makes available any of the additional benefits described in 14VAC5-170-75 D, or offers standardized benefit Plans Plan K or L (as described in subdivisions F 8 and F 9 of this section), then the issuer shall make available to each prospective policyholder and certificateholder, in addition to a policy form or certificate form with only the basic (core) benefits as described in subdivision 1 of this subsection, a policy form or certificate form containing either standardized benefit Plan C (as described in subdivision F 3 of this section) or standardized benefit Plan F (as described in subdivision F 5 of this section).

C. No groups, packages, or combinations of Medicare supplement benefits other than those listed in this section shall be offered for sale in this Commonwealth, except as may be permitted in subsection G of this section and 14VAC5-170-90.

D. Benefit plans shall be uniform in structure, language, designation, and format to the standard benefit plans listed in this subsection and conform to the definitions in 14VAC5-170-30. Each benefit shall be structured in accordance with the format provided in 14VAC5-170-75 C and D; or, in the case of plans Plan K or L, in subdivision F 8 or F 9 of this section and list the benefits in the order shown. For purposes of this section, the term "structure, language, and format" means style, arrangement, and overall content of a benefit.

E. In addition to the benefit plan designations required in subsection D of this section, an issuer may use other designations to the extent permitted by law.

F. Make-up of 2010 standardized benefit plans:

1. Standardized Medicare supplement benefit Plan A shall include only the basic (core) benefits as defined in 14VAC5-170-75 C.

2. Standardized Medicare supplement benefit Plan B shall include only the basic (core) benefit as defined in 14VAC5-170-75 C, plus 100% of the Medicare Part A deductible as defined in 14VAC5-170-75 D 1.

3. Standardized Medicare supplement benefit Plan C shall include only the basic (core) benefit as defined in 14VAC5-170-75 C, plus 100% of the Medicare Part A deductible, skilled nursing facility care, 100% of the Medicare Part B deductible, and medically necessary emergency care in a foreign country as defined in 14VAC5-170-75 D 1, 3, 4, and 6, respectively.

4. Standardized Medicare supplement benefit Plan D shall include only the basic (core) benefit as defined in 14VAC5-170-75 C, plus 100% of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country as defined in 14VAC5-170-75 D 1, 3, and 6, respectively.

5. Standardized Medicare supplement benefit Plan F shall include only the basic (core) benefit as defined in 14VAC5-170-75 C, plus 100% of the Medicare Part A deductible, skilled nursing facility care, 100% of the Medicare Part B deductible, 100% of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in 14VAC5-170-75 D 1, 3, 4, 5, and 6, respectively.

6. Standardized Medicare supplement benefit Plan F With with High Deductible shall include only 100% of covered expenses following the payment of the annual deductible as defined in subdivision 6 b of this subsection.

a. The basic (core) benefit as defined in 14VAC5-170-75 C, plus 100% of the Medicare Part A deductible, skilled nursing facility care, 100% of the Medicare Part B deductible, 100% of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in 14VAC5-170-75 D 1, 3, 4, 5, and 6, respectively.

b. The annual deductible in Plan F With with High Deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by Plan F, and shall be in addition to any other specific benefit deductibles. The basis for the deductible shall be $1,500 and shall be adjusted annually from 1999 by the Secretary of the U.S. Department of Health and Human Services to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of $10.

7. Standardized Medicare supplement benefit Plan G shall include only the basic (core) benefit as defined in 14VAC5-170-75 C, plus 100% of the Medicare Part A deductible, skilled nursing facility care, 100% of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in 14VAC5-170-75 D 1, 3, 5, and 6, respectively. Effective January 1, 2020, the standardized benefit plans described in 14VAC5-170-87 D 3 (Plan G with High Deductible) may be offered to any individual who was eligible for Medicare prior to January 1, 2020.

8. Standardized Medicare supplement benefit Plan K is mandated by the Medicare Prescription Drug, Improvement and Modernization Act of 2003, and shall include only the following:

a. Part A hospital coinsurance 61st through 90th days: Coverage of 100% of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;

b. Part A hospital coinsurance, 91st through 150th days: Coverage of 100% of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;

c. Part A hospitalization after 150 days: Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer's payment as payment in full and may not bill the insured for any balance;

d. Medicare Part A deductible: Coverage for 50% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in subdivision 8 j of this subsection;

e. Skilled nursing facility care: Coverage for 50% of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for posthospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in subdivision 8 j of this subsection;

f. Hospice care: Coverage for 50% of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in subdivision 8 j of this subsection;

g. Blood: Coverage for 50%, under Medicare Part A or B, of the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in subdivision 8 j of this subsection;

h. Part B cost sharing: Except for coverage provided in subdivision 8 i of this subsection, coverage for 50% of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as described in subdivision 8 j of this subsection;

i. Part B preventive services: Coverage of 100% of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible; and

j. Cost sharing after out-of-pocket limits: Coverage of 100% of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $4,000 in 2006, indexed each year by the appropriate inflation adjustment specified by the Secretary of the U.S. Department of Health and Human Services.

9. Standardized Medicare supplement benefit Plan L is mandated by the Medicare Prescription Drug, Improvement and Modernization Act of 2003, and shall include only the following:

a. The benefits described in subdivisions 8 a, b, c, and i of this subsection;

b. The benefit described in subdivisions 8 d, e, f, g, and h of this subsection, but substituting 75% for 50%; and

c. The benefit described in subdivision 8 j of this subsection, but substituting $2,000 for $4,000.

10. Standardized Medicare supplement benefit Plan M shall include only the basic (core) benefit as defined in 14VAC5-170-75 C, plus 50% of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country as defined in 14VAC5-170-75 D 2, 3, and 6, respectively.

11. Standardized Medicare supplement benefit Plan N shall include only the basic (core) benefit as defined in 14VAC5-170-75 C, plus 100% of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country as defined in 14VAC5-170-75 D 1, 3, and 6, respectively, with copayments in the following amounts:

a. The lesser of $20 or the Medicare Part B coinsurance or copayment for each covered health care provider office visit (including visits to medical specialists); and

b. The lesser of $50 or the Medicare Part B coinsurance or copayment for each covered emergency room visit; however, this copayment shall be waived if the insured is admitted to any hospital and the emergency visit is subsequently covered as a Medicare Part A expense.

G. New or innovative benefits. An issuer may, with the prior approval of the commission, offer policies or certificates with new or innovative benefits, in addition to the standardized benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits shall include only benefits that are appropriate to Medicare supplement insurance, are new or innovative, are not otherwise available, and are cost-effective. Approval of new or innovative benefits must not adversely impact the goal of Medicare supplement simplification. New or innovative benefits shall not include an outpatient prescription drug benefit. New or innovative benefits shall not be used to change or reduce benefits, including a change of any cost-sharing provision, in any standardized plan.

14VAC5-170-95. Persons eligible by reason of disability.

A. On or after January 1, 2021, an An issuer that offers individual Medicare supplement policies or certificates shall offer at least one of its Medicare supplement plans that it actively markets to any individual who resides in this Commonwealth, is younger than 65 years of age, is eligible for Medicare by reason of disability as defined by 42 USC § 426(b) or 42 USC § 426-1, and is enrolled in Medicare Part A and B, or will be so enrolled by the effective date of coverage in accordance with the provisions of § 38.2-3610 of the Code of Virginia, at least one of its Medicare supplement plans that it actively markets to individuals. An issuer that offers Medicare supplement policies on a group basis shall offer to issue a Medicare supplement certificate, for at least one of the Medicare supplement plans issued to the group, to any individual who resides in this Commonwealth, is younger than 65 years of age, is eligible for Medicare by reason of disability as defined by 42 USC § 426(b) or 42 USC § 426-1, is eligible for enrollment in the group policy, and is enrolled in Medicare Part A and B, or will be so enrolled by the effective date of coverage in accordance with the provisions of § 38.2-3610 of the Code of Virginia. The Medicare supplement policy or certificate offered shall be guaranteed renewable. Such Medicare supplement policy or certificate shall be offered and issued during the following enrollment periods:

1. Upon the request of the individual during the six-month period beginning with the first month in which the individual is eligible for Medicare by reason of a disability. For those persons who are retroactively enrolled in Medicare Part B due to a retroactive eligibility decision made by the Social Security Administration, the application must be submitted within a six-month period beginning with the month in which the person receives notification of the retroactive eligibility decision; or

2. Upon the request of the individual during the 63-day period following voluntary or involuntary termination of coverage under a group health plan.

B. An individual who met the eligibility requirements outlined in subsection A of this section prior to January 1, 2021, shall begin a six-month period to enroll in a Medicare supplement policy or certificate on January 1, 2021. For an individual eligible for Medicare by reason of disability under 42 USC § 426-1, the initial enrollment period shall be in accordance with § 38.2-3610 of the Code of Virginia.

C. A Medicare supplement policy or certificate issued to an individual under subsection A of this section shall not exclude benefits based on a preexisting condition if the individual has a continuous period of creditable coverage of at least six months as of the effective date of coverage.

D. An issuer may develop premium rates specific to the class of individuals described in subsection A of this section shall not charge an individual who is younger than 65 years of age and eligible for Medicare by reason of disability as defined by 42 USC § 426(b) or 42 USC § 426-1 a premium rate for any Medicare supplement policy or certificate offered by the issuer that exceeds the premium rate charged for such plan to an individual who is 65 years of age. This requirement applies to any Medicare supplement policy or certificate issued or renewed on or after January 1, 2024.

14VAC5-170-100. Open enrollment ages 65 years and older.

A. An issuer shall not neither (i) deny or condition the issuance or effectiveness of any Medicare supplement policy or certificate available for sale in this Commonwealth, nor (ii) discriminate in the pricing of such a policy or certificate because of the health status, claims experience, receipt of health care, or medical condition of an applicant in the case of an application for a policy or certificate that is submitted prior to or during the six month six-month period beginning with the first day of the first month in which an individual is both 65 years of age or older and is enrolled for benefits under Medicare Part B. Each Medicare supplement policy and certificate currently available from an issuer shall be made available to all applicants who qualify under this subsection without regard to age.

B. 1. If an applicant qualifies under subsection A of this section and submits an application during the time period referenced in subsection A and, as of the date of application, has had a continuous period of creditable coverage of at least six months, the issuer shall not exclude benefits based on a preexisting condition.

2. If the applicant qualifies under subsection A of this section and submits an application during the time period referenced in subsection A and, as of the date of application, has had a continuous period of creditable coverage that is less than six months, the issuer shall reduce the period of any preexisting condition exclusion by the aggregate of the period of creditable coverage applicable to the applicant as of the enrollment date. The Secretary shall specify the manner of the reduction under this subsection.

C. Except as provided in subsection B of this section, 14VAC5-170-105, and 14VAC5-170-210, subsection A of this section shall not be construed as preventing the exclusion of benefits under a policy, during the first six months, based on a preexisting condition for which the policyholder or certificateholder received treatment or was otherwise diagnosed during the six months before the coverage became effective.

14VAC5-170-130. Filing and approval of policies and certificates and premium rates.

A. An issuer shall not deliver or issue for delivery a policy or certificate to a resident of this Commonwealth unless the policy form or certificate form has been filed with and approved by the State Corporation Commission in accordance with filing requirements and procedures prescribed by the State Corporation Commission.

In addition, no rider, endorsement, or amendment, including any rider, endorsement, or amendment designed to delete outpatient prescription drug benefits as required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (42 USC § 1395w-101), shall be attached to or printed or stamped upon a policy or certificate form delivered or issued for delivery in this Commonwealth unless the form of the rider, endorsement, or amendment has been filed with and approved by the State Corporation Commission.

B. An issuer shall not use or change premium rates for a Medicare supplement policy or certificate unless the rates, rating schedule, and supporting documentation have been filed with and approved by the State Corporation Commission in accordance with the filing requirements and procedures prescribed by the State Corporation Commission.

The filing shall also include a certification by a qualified actuary that to the best of the actuary's knowledge and judgment, the following items are true with respect to the filing:

1. The assumptions present the actuary's best judgment as to the reasonable value for each assumption and are consistent with the issuer's business plan at the time of the filing;

2. The anticipated lifetime loss ratio, future loss ratios, and except for policies issued prior to July 30, 1992, third-year loss ratio all exceed the applicable ratio;

3. The filing was prepared based on the current standards or practices as promulgated by the Actuarial Standards Board including the data quality standard of practice as described at www.actuary.org;

4. The filing is in compliance with applicable laws and regulations in this Commonwealth; and

5. The premiums are reasonable in relation to the benefits provided.

C. 1. Except as provided in subdivision 2 of this subsection, an issuer shall not file for approval more than one form of a policy or certificate of each type for each standard Medicare supplement benefit plan.

2. An issuer may offer, with the approval of the State Corporation Commission, up to four three additional policy forms or certificate forms of the same type for the same standard Medicare supplement benefit plan, one for each of the following cases:

a. The inclusion of new or innovative benefits;

b. The addition of either direct response or agent marketing methods;

c. The addition of either guaranteed issue or underwritten coverage;

d. The offering of coverage to individuals eligible for Medicare by reason of disability.

3. For the purposes of this section, a "type" means an individual policy, a group policy, an individual Medicare Select policy, or a group Medicare Select policy.

D. 1. Except as provided in subdivision 1 a of this subsection, an issuer shall continue to make available for purchase any policy form or certificate form issued after July 30, 1992, that has been approved by the State Corporation Commission. A policy form or certificate form shall not be considered to be available for purchase unless the issuer has actively offered it for sale in the previous 12 months.

a. An issuer may discontinue the availability of a policy form or certificate form if the issuer provides to the State Corporation Commission in writing its decision at least 30 days prior to discontinuing the availability of the form of the policy or certificate.

b. An issuer that discontinues the availability of a policy form or certificate form pursuant to subdivision 1 a of this subsection shall not file for approval a new policy form or certificate form of the same type for the same standard Medicare supplement benefit plan as the discontinued form for a period of five years after the issuer provides notice to the State Corporation Commission of the discontinuance. The period of discontinuance may be reduced if the State Corporation Commission determines that a shorter period is appropriate.

2. The sale or other transfer of Medicare supplement business to another issuer shall be considered a discontinuance for the purposes of this subsection.

3. A change in the rating structure or methodology shall be considered a discontinuance under subdivision 1 of this subsection unless the issuer complies with the following requirements:

a. The issuer provides an actuarial memorandum, in a form and manner prescribed by the State Corporation Commission, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and existing rates.

b. The issuer does not subsequently put into effect a change of rates or rating factors that would cause the percentage differential between the discontinued and subsequent rates as described in the actuarial memorandum to change. The State Corporation Commission may approve a change to the differential which that is in the public interest.

E. 1. Except as provided in subdivision 2 of this subsection, the experience of all policy forms or certificate forms of the same type in a standard Medicare supplement benefit plan shall be combined for purposes of the refund or credit calculation prescribed in 14VAC5-170-120.

2. Forms assumed under an assumption reinsurance agreement shall not be combined with the experience of other forms for purposes of the refund or credit calculation.