2014 Louisiana Laws
Revised Statutes
TITLE 22 - Insurance
RS 22:988 - Policies, group health and accident; conversion

§988. Policies, group health and accident; conversion

NOTE: §988 repealed by Acts 2013, No. 325, §2, eff. December 31, 2014.

A. Effective January 1, 1998, health coverage subject to fees assessed under R.S. 22:1210(A)(2) shall be exempted from mandatory issuance of a converted policy. Conversion policies issued prior to January 1, 1998, shall continue to be subject to the provisions of this Section.

B.(1) A group policy or group certificate delivered or issued for delivery in this state by: an insurer; a nonprofit mutual association which is engaged exclusively in the furnishing of hospital services and medical or surgical benefits; a health maintenance organization; a self-insured plan that provides, on an expense-incurred basis, hospital, surgical, or major medical expense insurance; or any combination thereof, shall provide that an employee or member whose insurance under the group policy has been terminated for any reason and who has been continuously insured under the group policy and under any group policy providing similar benefits that the terminated group policy replaced, for at least three months immediately prior to termination, shall be entitled to have issued to him by the insurer a policy or certificate of health and accident insurance, hereafter referred to in this Section as a "converted policy".

(2) An employee or member shall be denied a converted policy if termination of the prior insurance under the group policy occurred because of fraud or discontinuance of the prior group policy by replacement of similar group coverage within thirty-one days after discontinuance.

C. The written application for the converted policy shall be completed, and the first premium shall be paid to the insurer not later than thirty-one days after notice to the insured of the termination of the prior group coverage.

D. The converted policy shall be issued without evidence of insurability.

E.(1) The premium for the converted policy shall be determined in accordance with premium rates applicable to the age, class of risk, and type and amount of insurance coverage provided in the converted policy of the person to be covered. However, the premium for the converted policy may not exceed the premium charged by the Louisiana Health Plan at the time of conversion, adjusted for differences between benefit levels for the converted policy and the policy offered by the Louisiana Health Plan.

(2) The actual or expected experience under converted policies may be combined with the experience under group policies for the purposes of the determination of premium and loss experience by the insurer and the establishment of adequate premium rate levels for group coverage.

(3) For purposes of this Section, a conversion policy shall not be denied because a person is or may be eligible for benefits pursuant to R.S. 22:1213. In the event that the Louisiana Health Plan does not issue policies, or has not done so by the effective date of this Section,1 benefit and premium levels for conversion policies under this Section shall be based upon those proposed by the Louisiana Health Plan, if any, or determined in accordance with the mechanisms established by R.S. 22:1213.

F. The effective date of the converted policy shall be the day following the termination of insurance under the group policy.

G. The converted policy shall provide insurance coverage for the employee or member and the dependents of the employee or member who were covered by the group policy for at least three months prior to the date of termination of insurance. At the option of the insurer, a separate converted policy may be issued to cover any dependent.

H. The insurer shall not be required to issue, maintain, or renew a converted policy for an employee or member if any of the following apply to the employee or member:

(1) The person is covered for similar benefits by another hospital, surgical, medical, or major medical insurance policy; hospital or medical service subscriber contract; medical practice or other prepayment plan; or any other plan or program.

(2) The person is eligible for similar benefits, whether or not actually provided coverage, under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis.

(3) Similar benefits are provided for or are available to the person under any state or federal law.

(4) The person legally resides outside the health maintenance organization service area.

I.(1) A converted policy may include a provision under which the insurer may request information, in advance of any premium due date, of any person covered under the policy as to whether:

(a) The person is covered for similar benefits by another hospital, or major medical expense insurance policy, hospital or medical service subscriber contract, medical practice or other prepayment plan, or any other plan or program.

(b) The person is covered for similar benefits under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis.

(c) Similar benefits are provided for or are available to the person under any state or federal law.

(2) The converted policy may provide that the insurer may refuse to renew the policy of any person only for one of the following reasons:

(a) The converted policyholder fails to provide the information requested pursuant to Paragraph (1) of this Subsection.

(b) Fraud or material misrepresentation by the member or employee in applying for any benefits under the converted policy.

(c) Eligibility of the insured person for coverage under Medicare, Title XVIII of the Social Security Act, as added by the Social Security Amendments of 1965, or as later amended or superseded, or under any other state or federal law providing for those benefits provided by the converted policy.

(d) Any other reason approved by the commissioner of insurance.

J. An insurer under this Section shall not be required to issue a converted policy that provides benefits in excess of those provided under the preceding group policy.

K. In determining whether any preexisting condition precludes coverage for a specific benefit in the converted policy, credit shall be given for the time the person was covered under the group policy.

L.(1) Subject to any provision and condition of this Section, the employee or member shall be entitled to obtain a converted policy providing major medical coverage under a plan providing substantially similar benefits to those offered in R.S. 22:1213(A) through (E). If the benefit levels required in R.S. 22:1213(A) through (E) exceed the benefit levels provided under the prior group insurance policy, the converted policy may offer benefits which are substantially similar to those provided under the prior group policy.

(2) The converted policy shall include coverage from birth for a newborn if the converted policy includes dependent coverage. The converted policyholder may add coverage for a newborn from birth to a policy without dependent coverage by paying the additional premium and notifying the insurer within thirty-one days of the birth of the newborn. This Paragraph shall only apply to the biological child of the policyholder.

M. An insurer may, at its option, also offer alternative plans for group health and accident conversion in addition to the converted policy required by this Section.

N. The conversion privilege provided in this Section shall also be available to any of the following:

(1) To the surviving spouse, if any, at the death of the employee or member, with respect to the spouse and the children whose coverage under the group policy terminates by reason of such death, otherwise to each surviving child whose coverage under the group policy terminates by reason of such death, or, if the group policy provides for continuation of coverage for the dependent following the death of the employee or member.

(2) To the spouse of the employee or member upon termination of coverage of the spouse, if the employee or member remains insured under the group policy, by reason of ceasing to be a qualified family member under the group policy, with respect to the spouse and the children whose coverages under the group policy terminate at the same time.

(3) To a minor solely with respect to himself upon termination of coverage by reason of ceasing to be a qualified family member under the group policy, if the conversion privilege is not otherwise provided in this Subsection with respect to such termination.

O. If the benefit levels required in this Section exceed the benefit levels provided under the prior group policy, the converted policy may offer benefits which are substantially similar to those provided under the prior group policy.

P. Any insurer of health and accident insurance may elect to provide group health and accident insurance coverage instead of issuing an individual converted policy.

Q. A notification of the right to a converted policy shall be included in each certificate of coverage for health and accident insurance.

R. This Section may not require conversion on termination of eligibility for a policy or contract that provides benefits for specified diseases or for accidental injuries only, or to disability income, Medicare supplement, hospital indemnity, limited benefit, nonconventional, or excess insurance policies.

Acts 1992, No. 342, §1; Acts 1992, No. 534, §1; Acts 1997, No. 1154, §1, eff. Jan. 1, 1998; Acts 1999, No. 445, §1, eff. June 18, 1999; Redesignated from R.S. 22:230.2 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2010, No. 919, §1, eff. Jan. 1, 2011; Acts 2013, No. 325, §2, eff. Dec. 31. 2014.

1As appears in enrolled bill. (Subsection enacted in 1992)

NOTE: Former R.S. 22:988 redesignated as R.S. 22:338 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.