§ 58-68-60. Guaranteed availability of individual health insurance coverage to certain individuals with prior group coverage.
Part B. Individual MarketReforms.
§ 58‑68‑60. Guaranteed availability of individual health insurance coverage to certainindividuals with prior group coverage.
(a) GuaranteedAvailability.
(1) In general. Subjectto the succeeding subsections of this section, each health insurer that offershealth insurance coverage in the individual market in this State shall not,with respect to an eligible individual desiring to enroll in individual healthinsurance coverage:
a. Decline to offer thecoverage to, or deny enrollment of, the individual; or
b. Impose anypreexisting condition exclusion with respect to the coverage.
(2) Reserved.
(b) Eligible IndividualDefined. In this Part, "eligible individual" means an individual:
(1) (i)For whom, as of the date on which the individual seeks coverage under thissection, the aggregate of the periods of creditable coverage is 18 or moremonths and (ii) whose most recent prior creditable coverage was under a grouphealth plan, governmental plan, or church plan (or health insurance coverageoffered in connection with any such plan);
(2) Who is not eligiblefor coverage under (i) a group health plan, (ii) part A or part B of titleXVIII of the Social Security Act, or (iii) a State plan under title XIX of theAct (or any successor program), and does not have other health insurancecoverage;
(3) With respect to whomthe most recent coverage within the coverage period described in subdivision(1)(i) was not terminated based on a factor described in G.S. 58‑68‑45(b)(1)or (b)(2);
(4) If the individualhad been offered the option of continuation coverage under a COBRA continuationprovision or under Article 53 of this Chapter, who elected the coverage; and
(5) Who, if theindividual elected the continuation coverage, has exhausted the continuationcoverage under the provision or program.
(c) AlternativeCoverage Permitted.
(1) In general. In thecase of health insurance coverage offered in this State, a health insurer mayelect to limit the coverage offered under subsection (a) of this section aslong as it offers at least two different policy forms of health insurancecoverage both of which:
a. Are designed for,made generally available to, and actively marketed to, and enroll both eligibleand other individuals by the health insurer; and
b. Meet the requirementof subdivision (2) or (3) of this subsection, as elected by the health insurer.
For thepurposes of this subsection, policy forms that have different cost‑sharingarrangements or different riders shall be considered to be different policyforms.
(2) Choice of mostpopular policy forms. The requirement of this subdivision is met, for healthinsurance coverage policy forms offered by a health insurer in the individualmarket, if the health insurer offers the policy forms for individual healthinsurance coverage with the largest, and next to largest, premium volume of allthe policy forms offered by the health insurer in this State or applicablemarketing or service area (as may be prescribed by rules or regulations) by thehealth insurer in the individual market in the period involved.
(3) Choice of two policyforms with representative coverage.
a. In general. Therequirement of this subdivision is met, for health insurance coverage policyforms offered by a health insurer in the individual market, if the healthinsurer offers a lower‑level coverage policy form (as described in sub‑subdivisionb. of this subdivision) and a higher‑level coverage policy form (asdescribed in sub‑subdivision c. of this subdivision) each of whichincludes benefits substantially similar to other individual health insurancecoverage offered by the health insurer in this State.
b. Lower‑level ofcoverage described. A policy form is described in this sub‑subdivisionif the actuarial value of the benefits under the coverage is at least eighty‑fivepercent (85%) but not greater than one hundred percent (100%) of a weightedaverage (described in sub‑subdivision d. of this subdivision).
c. Higher‑levelof coverage described. A policy form is described in this sub‑subdivisionif: (i) the actuarial value of the benefits under the coverage is at leastfifteen percent (15%) greater than the actuarial value of the coveragedescribed in sub‑subdivision b. of this subdivision offered by the healthinsurer in the area involved; and (ii) the actuarial value of the benefitsunder the coverage is at least one hundred percent (100%) but not greater thanone hundred twenty percent (120%) of a weighted average (described in sub‑subdivisiond. of this subdivision).
d. Weighted average. Forthe purposes of this subdivision, the weighted average described in this sub‑subdivisionis the average actuarial value of the benefits provided by all the healthinsurance coverage issued, as elected by the health insurer, either by thathealth insurer or by all health insurers in this State in the individual marketduring the previous year, not including coverage issued under this section,weighted by enrollment for the different coverage.
(4) Election. Thehealth insurer elections under this subsection shall apply uniformly to alleligible individuals in this State for that health insurer. The election shallbe effective for policies offered during a period of not less than two years.
(5) Assumptions. Forthe purposes of subdivision (3) of this subsection, the actuarial value ofbenefits provided under individual health insurance coverage shall becalculated based on a standardized population and a set of standardizedutilization and cost factors.
(d) Special Rules for NetworkPlans.
(1) In general. In thecase of a health insurer that offers health insurance coverage in theindividual market through a network plan, the health insurer may:
a. Limit theindividuals who may be enrolled under the coverage to those who live, reside,or work within the service area for the network plan; and
b. Within the servicearea of the plan, deny the coverage to the individuals if the health insurerhas demonstrated to the Commissioner that: (i) it will not have the capacity todeliver services adequately to additional individual enrollees because of itsobligations to existing group contract holders and enrollees and individualenrollees, and (ii) it is applying this subdivision uniformly to individualswithout regard to any health status‑related factor of the individuals andwithout regard to whether the individuals are eligible individuals.
(2) 180‑daysuspension upon denial of coverage. A health insurer, upon denying healthinsurance coverage in any service area in accordance with sub‑subdivision(1)b. of this subdivision, shall not offer coverage in the individual marketwithin the service area for a period of 180 days after the coverage is denied.
(e) Application ofFinancial Capacity Limits.
(1) In general. Ahealth insurer may deny health insurance coverage in the individual market toan eligible individual if the health insurer has demonstrated to theCommissioner that:
a. It does not have thefinancial reserves necessary to underwrite additional coverage; and
b. It is applying thissubdivision uniformly to all individuals in the individual market in this Stateconsistent with this Chapter and without regard to any health status‑relatedfactor of the individuals and without regard to whether the individuals areeligible individuals.
(2) 180‑daysuspension upon denial of coverage. A health insurer, upon denying individualhealth insurance coverage in any service area in accordance with subdivision(1) of this subsection, shall not offer the coverage in the individual market withinthe service area for a period of 180 days after the date the coverage is deniedor until the health insurer has demonstrated to the Commissioner that thehealth insurer has sufficient financial reserves to underwrite additionalcoverage, whichever is later.
(f) MarketRequirements.
(1) In general. Subsection(a) of this section does not require that a health insurer offering healthinsurance coverage only in connection with ERISA group health plans or throughone or more bona fide associations, or both, offer the health insurancecoverage in the individual market.
(2) Conversion policies. A health insurer offering health insurance coverage in connection with grouphealth plans under title XXVII of the federal Public Health Service Act shallnot be deemed to be a health insurer offering individual health insurancecoverage solely because the health insurer offers a conversion policy.
(g) Construction. Nothingin this section shall be construed:
(1) To restrict theamount of the premium rates that a health insurer may charge an individual forhealth insurance coverage provided in the individual market under this Chapter;or
(2) To prevent a healthinsurer offering health insurance coverage in the individual market fromestablishing premium discounts or rebates or modifying otherwise applicablecopayments or deductibles in return for adherence to programs of healthpromotion and disease prevention.
(h) Other Definitions. As used in this section:
(1) "Churchplan". The meaning given the term under section 3(33) of the EmployeeRetirement Income Security Act of 1974.
(2) "Governmentalplan".
a. The meaning giventhe term under section 3(32) of the Employee Retirement Income Security Act of1974 and any federal governmental plan.
b. Federal governmentalplan. A governmental plan established or maintained for its employees by thegovernment of the United States or by any agency or instrumentality of thegovernment.
c. Nonfederalgovernmental plan. A governmental plan that is not a federal governmentalplan.
(i) Rights ofReplacement Coverage Upon Termination. Subsection (a) of this section shallapply to an eligible individual whose coverage issued under this section isterminated by a health insurer under G.S. 58‑68‑65(c)(2) theapplication for the replacement coverage is dated not more than 63 daysfollowing the termination date.
(j) Waiting Period. Indetermining the length of any break in coverage for an individual as prescribedin G.S. 58‑68‑60(b)(1)(i), a significant break in coverage does notoccur during the waiting period. The "waiting period" is defined asthe period that begins on the date the individual submits a substantiallycomplete application for coverage and ends on:
(1) The date coveragebegins, if the application results in coverage, or
(2) The date on whichthe application is denied by the issuer or the date on which the offer forcoverage lapses, if the application does not result in coverage. (1997‑259, s. 1(c);1999‑132, s. 4.7; 2005‑224, s. 3; 2009‑382, s. 5.)