CHAPTER 71 - ACCIDENT AND HEALTH INSURANCE
Title 38 - Insurance
CHAPTER 71.
ACCIDENT AND HEALTH INSURANCE
ARTICLE 1.
GENERAL PROVISIONS
SECTION 38-71-10. Coverages which may be written by licensed accident and health insurers.
All licensed accident and health insurers are entitled to:
(a) Issue and deliver service benefit contracts to provide for prepayment of any health care service and to make payment directly to the provider of the services, in whole or in part, including, but not limited to, professional services, any institutional care, personal services, and supplies.
(b) Issue and deliver contracts of indemnity or contracts providing for payment of money directly to the insureds or for them for health care services.
SECTION 38-71-20. Insurers may act as administering agency for government-sponsored health, hospital, and medical service programs.
Insurers licensed to do business in this State have the corporate power to contract to act as agent in the administration of programs of health, hospital, and medical insurance sponsored or financed by an agency of the United States Government or any political subdivision.
SECTION 38-71-30. Whole contract, including application, must appear in policy; oral applications.
Every insurer doing accident or health insurance business in the State shall deliver with each policy of insurance issued by it a copy of the application made by the insured so that the whole contract appears in the application and policy of insurance. If the insurer violates this requirement, no defense is allowed to the policy on account of anything contained in or omitted from the application. If the insurance policy is issued upon an oral application, no defense is allowed to the policy on account of anything contained in or omitted from the oral application.
SECTION 38-71-40. Effect of false statement in application.
The falsity of any statement in the application for any policy covered by this chapter does not bar the right to recovery thereunder unless the false statement was made with actual intent to deceive or unless it materially affected either the acceptance of the risk or the hazard assumed by the insurer.
SECTION 38-71-46. Diabetes Mellitus coverage in health insurance policies; diabetes education.
(A) On or after January 1, 2000, every health maintenance organization, individual and group health insurance policy, or contract issued or renewed in this State must provide coverage for the equipment, supplies, Food and Drug Administration-approved medication indicated for the treatment of diabetes, and outpatient self-management training and education for the treatment of people with diabetes mellitus, if medically necessary, and prescribed by a health care professional who is legally authorized to prescribe such items and who demonstrates adherence to minimum standards of care for diabetes mellitus as adopted and published by the Diabetes Initiative of South Carolina. This subsection does not prohibit a health maintenance organization or an individual or a group health insurance policy from providing coverage for medication according to formulary or using network providers. Coverage must not be denied unless the health care professional demonstrates a persistent pattern of failure to adhere to the minimal standards of care and unless the health maintenance organization or insurer has first provided written notice to the health care professional that coverage will be denied if the health care professional fails to adhere to the minimal standards of care.
(B) Services and payment for diabetes education programs shall conform to regulations of the Health Care Financing Administration, US Department of Health and Human Services, pursuant to Section 4105 of the Balanced Budget Act of 1997. Diabetes outpatient self-management training and education shall be provided by a registered or licensed health care professional with certification in diabetes by the National Certification Board of Diabetes Educators, or other accredited program approved by the Diabetes Initiative of South Carolina, or by the Diabetes Control Program of the SC Department of Health and Environmental Control in order to meet the needs of rural communities wherein certified health care professionals providing this service are not available.
(C) Nothing contained in this section may be construed to affect in any way the ability of a managed care plan to credential or re-credential a provider.
(D) For purposes of this section: "Health insurance policy" means a health benefit plan, contract, or evidence of coverage providing health insurance coverage as defined in Section 38-71-670(6) and Section 38-71-840(14).
SECTION 38-71-50. Alteration of application.
No alteration of any written application for insurance by erasure, insertion, or otherwise may be made by any person other than the applicant without his written consent, and the making of any such alteration without the consent of the applicant is a misdemeanor. However, insertions may be made by the insurer, for administrative purposes only, in a manner that clearly indicates that the insertions are not to be ascribed to the applicant.
SECTION 38-71-60. Certain acts do not constitute a waiver by insurer.
The acknowledgment of any insurer of the receipt of notice given under any policy covered by this chapter, the furnishing of forms for filing proofs of loss, the acceptance of proofs of loss, or the investigation of any claim thereunder does not operate as a waiver of any of the rights of the insurer in defense of any claim arising under the policy.
SECTION 38-71-70. Certain policies may conform to laws of other states.
Any foreign insurer authorized to do business in this State may, with the approval of the director or his designee, insert in any policy covered by this chapter so issued or delivered any provision required by the laws of any state or country in which the insurer is licensed, if the provision is not substantially in conflict with any law of this State. A domestic insurer may insert in any policy covered by this chapter issued for delivery in another state or foreign country and governed by the laws thereof any provision required by the laws of the other state or country applicable to the policy.
SECTION 38-71-80. Construction of policy issued in violation of chapter.
A policy issued in violation of this chapter is held valid but must be construed as provided in this chapter, and, when any provision in the policy is in conflict with any provision of this chapter, the rights, duties, and obligations of the insurer, the policyholder, and the beneficiary are governed by the provisions of this chapter.
SECTION 38-71-90. Penalty for violation of chapter.
An insurer or its officer or agent that issues or delivers to any person in this State any policy in wilful violation of any of the provisions of this chapter is subject to the provisions of Section 38-2-10 for each offense.
SECTION 38-71-100. Policies exempt from chapter.
Nothing in this chapter applies to or affects:
(1) any policy of workers' compensation insurance or any policy of liability insurance with or without supplementary coverage therein;
(2) any policy or contract of reinsurance;
(3) any blanket or group policy of insurance, except as specifically required in this chapter; or
(4) life insurance, endowment, or annuity contracts or contracts supplemental thereto which contain only such provisions relating to accident and health insurance as (a) provide additional benefits in case of death or dismemberment or loss of sight by accident or (b) operate to safeguard the contracts against lapse or to give a special surrender value or special benefit or an annuity in the event that the insured or annuitant becomes totally and permanently disabled, as defined by the contract or supplemental contract.
SECTION 38-71-110. Notice of failure of employer to remit deducted premium required before forfeiture.
No insurer doing business in this State and issuing health or accident insurance policies, other than contracts of group insurance of disability, accidental death, or disability and accidental death benefits in connection with policies of life insurance, the premium for which is to be collected in weekly, monthly, or other periodic installments by authority of a payroll deduction order executed by the insured and delivered to the insurer or the insured's employer authorizing the deduction of premium installments from the insured's salary or wages, may, during the period for which the policy is issued and while the insured remains employed by the authorized employer, declare forfeited or lapsed the policy until and unless a written or printed notice of the failure of the employer to remit the premium or installment thereof, stating the amount or portion thereof due on the policy and to whom it must be paid, has been duly addressed and mailed to the person who is insured under the policy at least fifteen days before the policy is terminated or lapsed.
SECTION 38-71-120. Repealed by 2006 Act No. 332, Section 31, eff June 1, 2006.
SECTION 38-71-125. Mastectomies; hospitalization requirements; early release provisions.
All individual and group health insurance policies and health maintenance organizations providing coverage for the hospitalization for mastectomies must provide benefits for hospitalization for at least forty-eight hours following a mastectomy. Nothing in this section shall be construed to prohibit an attending physician from releasing the patient prior to the expiration of the time provided herein. In the case of an early release, coverage shall include at least one home care visit if ordered by the attending physician.
SECTION 38-71-130. Breast reconstruction and prosthetic devices; coverage following mastectomy surgery.
All individual and group health insurance policies and health maintenance organizations providing coverage for mastectomy surgery must provide coverage for prosthetic devices and reconstruction of the breast on which surgery for breast cancer has been performed and surgery and reconstruction of the non-diseased breast, if determined medically necessary by the patient's attending physician with the approval of the insurer or HMO. The provisions of this section shall not require supplemental health insurance policies to provide coverage for reconstruction of the non-diseased breast.
SECTION 38-71-135. Minimum postpartum hospitalization and attendant services for mothers and newborns.
All individual and group health insurance and health maintenance organization policies providing coverage for the hospitalization and attendant professional services of a mother and her newborn child or children must provide for the mother and her newborn child or children to remain in the hospital for at least forty-eight hours after a vaginal delivery, not including the day of delivery, and at least ninety-six hours following a Cesarean Section, not including the day of surgery. Nothing in this section shall be construed to prohibit the attending physician, in consultation with the mother, from requesting additional time for hospitalization or from releasing the mother or her newborn child or children prior to the expiration of time provided herein.
SECTION 38-71-140. Coverage of newborn children.
(A) All individual and group health insurance policies providing coverage on an expense-incurred basis and individual and group service or indemnity-type contracts issued by a nonprofit corporation which provide coverage for a family member of the insured or subscriber, as to the family member's coverage, also must provide that the health insurance benefits applicable for children are payable with respect to a newly born child of the insured or subscriber from the moment of birth.
(B) The coverage for a newly born child consists of coverage of injury or sickness including the necessary care and treatment of medically diagnosed congenital defects and birth abnormalities.
(C) If payment of a specific premium or subscription fee is required to provide coverage for a child, the policy or contract may require that notification of birth of a newly born child and payment of the required premium or fees must be furnished to the insurer or nonprofit service or indemnity corporation within thirty-one days after the date of birth in order to have the coverage continue beyond the thirty-one-day period.
(D)(1) The provisions of this section apply to a child with respect to whom a decree of adoption by the insured or subscriber has been entered within thirty-one days after the date of his birth and to a child with respect to whom:
(a) Adoption proceedings have been instituted by the insured or subscriber within thirty-one days after the date of his birth and the insured or subscriber has temporary custody pursuant to Section 63-9-510;
(b) The adoption proceedings have been completed and a decree of adoption entered within one year from the institution of proceedings, unless extended by order of the court by reason of the special needs of the child pursuant to Section 63-9-750.
(2) Coverage must be provided as long as the insured or subscriber has custody of the child pursuant to decree of the court and the required premiums or fees are furnished to the insurer or nonprofit service or indemnity corporation.
SECTION 38-71-143. Health plans must provide same coverage for children placed for adoption.
(A) If an individual or group health plan provides coverage for dependent children of participants or beneficiaries, the plan shall provide benefits to dependent children placed with participants or beneficiaries for adoption under the same terms and conditions as apply to the natural, dependent children of the participants and beneficiaries, irrespective of whether the adoption has become final.
(B) A group health plan may not restrict coverage under the plan of a dependent child adopted by a participant or beneficiary or placed with a participant or beneficiary for adoption solely on the basis of a preexisting condition of the child at the time that the child would otherwise become eligible for coverage under the plan, if the adoption or placement for adoption occurs while the participant or beneficiary is eligible for coverage under the plan.
(C) For the purposes of this section:
(1) "child" means, in connection with an adoption or placement for adoption of the child, an individual who has not attained age eighteen as of the date of the adoption or placement for adoption;
(2) "placement for adoption" means the assumption and retention by a person of a legal obligation for total or partial support of a child in anticipation of the adoption of the child. The child's placement with a person terminates upon the termination of the legal obligations.
SECTION 38-71-145. Required coverage for mammograms, pap smears, and prostate cancer examinations; limitations.
(A) All individual and group health insurance and health maintenance organization policies in this State shall include coverage in the policy for:
(1) mammograms;
(2) annual pap smears;
(3) prostate cancer examinations, screenings, and laboratory work for diagnostic purposes in accordance with the most recent published guidelines of the American Cancer Society.
(B) The coverage required to be offered under subsection (A) may not contain any exclusions, reductions, or other limitations as to coverages, deductibles, or coinsurance provisions which apply to that coverage unless these provisions apply generally to other similar benefits provided and paid for under the health insurance policy.
(C) Nothing in this section prohibits a health insurance policy from providing benefits greater than those required to be offered by subsections (A) and (B) or more favorable to the enrollee than those required to be offered by subsections (A) and (B).
(D) This section applies to individual and group health insurance policies issued by a fraternal benefit society, an insurer, a health maintenance organization, or any similar entity, except as exempted by ERISA.
(E) For purposes of this section:
(1) "Mammogram" means a radiological examination of the breast for purposes of detecting breast cancer when performed as a result of a physician referral or by a health testing service which utilizes radiological equipment approved by the Department of Health and Environmental Control, which examination may be made with the following minimum frequency:
(a) once as a base-line mammogram for a female who is at least thirty-five years of age but less than forty years of age;
(b) once every two years for a female who is at least forty years of age but less than fifty years of age;
(c) once a year for a female who is at least fifty years of age; or
(d) in accordance with the most recent published guidelines of the American Cancer Society.
(2) "Pap smear" means an examination of the tissues of the cervix of the uterus for the purpose of detecting cancer when performed upon the recommendation of a medical doctor, which examination may be made once a year or more often if recommended by a medical doctor.
(3) "Health insurance policy" means a health benefit plan, contract, or evidence of coverage providing health insurance coverage as defined in Section 38-71-670(6) and Section 38-71-840(14).
SECTION 38-71-147. Freedom of selection and participation in individual or group accident and health or health insurance policy or health maintenance organization plan.
An individual or group accident and health or health insurance policy or a health maintenance organization plan may not:
(1) prohibit or limit a person who is a participant or beneficiary of the policy or plan from selecting a pharmacy or pharmacist of the person's choice who has agreed to participate in the plan according to the terms offered by the insurer; or
(2) deny a pharmacy or pharmacist the right to participate as a contract provider under the policy or plan if the pharmacy or pharmacist agrees to provide pharmacy services including, but not limited to, prescription drugs that meet the terms and requirements set forth by the insurer under the policy or plan and agrees to the terms of reimbursement set forth by the insurer.
SECTION 38-71-150. Required provision in policies as to examination and surrender of policy for return of premium.
Every individual or family accident and health or hospitalization policy, certificate, contract, or plan, except trip or travel ticket policies, issued for delivery in this State shall have printed thereon or attached thereto a notice to the insured that ten days are allowed, from the date of the receipt of the policy to examine its provisions and that the insured may for any reason surrender the policy to the insurer. In addition, if the policy was solicited by a direct response insurer, rather than through a licensed insurance agent, the policy, certificate, contract, or plan shall have printed thereon or attached thereto a notice to the insured that thirty days are allowed from the date of the receipt of the policy to examine its provisions and that the insured may for any reason surrender the policy to the insurer. Any premium advanced by the insured, upon appropriate surrender as provided herein, must be immediately returned in full by the insurer to the insured.
SECTION 38-71-160. When policy sold on direct response basis considered to be returned.
For purposes of Section 38-71-150, the insured is considered to have returned a policy sold on a direct response basis as of the date shown on the postmark or the date the insured notifies the insurer or an agent of the insurer, in writing or in person, that the insured does not want the policy, whichever is the earlier.
SECTION 38-71-170. Required provision in policies for conversion privileges for former spouses.
No policy or certificate of accident, health, or accident and health insurance issued or delivered in this State which in addition to covering the insured also provides coverage to the spouse of the insured may contain a provision for termination of coverage for a spouse covered under the policy solely as a result of a break in the marital relationship except by reason of an entry of a valid decree of divorce between the parties.
Every policy which contains a provision for termination of coverage of the spouse upon divorce shall contain a provision to the effect that upon the entry of a valid decree of divorce between the insured parties the divorced spouse is entitled to have issued to him or her, without evidence of insurability, upon application made to the insurer within sixty days following the entry of the decree, and upon payment of the appropriate premium, an individual policy of accident and health insurance. The policy shall provide the coverage then being issued by the insurer which is most nearly similar to, but not greater than, the terminated coverages. Any probationary or waiting periods set forth in the policy are considered as being met to the extent coverage was in force under the prior policy.
SECTION 38-71-190. Subrogation of insurer to insured's rights against third party.
Any policy or contract of accident and health insurance issued in this State may include provision for subrogation by the insurer to the insured's right of recovery against a liable third party for not more than the amount of insurance benefits that the insurer has paid previously in relation to the insured's injury by the liable third party. If the director or his designee, upon being petitioned by the insured, determines that the exercise of subrogation by an insurer is inequitable and commits an injustice to the insured, subrogation is not allowed. Attorneys' fees and costs must be paid by the insurer from the amounts recovered. This determination by the director or his designee may be appealed to the Administrative Law Judge Division as provided by law in accordance with Section 38-3-210.
SECTION 38-71-200. Discrimination forbidden; benefits for services of podiatrist, oral surgeon, or optometrist.
Discrimination between individuals of the same class in the amount of premiums or rates charged for a policy of insurance covered by this chapter, in the benefits payable on the policy, in terms or conditions of the policy, or in another manner is prohibited except as provided in Sections 38-57-140 and 38-71-1110. If a policy of insurance governed by this chapter provides for payment or reimbursement for a service which is within the scope of practice of a licensed podiatrist, licensed oral surgeon, licensed optometrist, or licensed doctoral psychologist, the insured or other person entitled to benefits under the policy is entitled to payment or reimbursement in accordance with the usual and customary fee for the services whether the services are performed by a licensed physician or a licensed podiatrist, a licensed oral surgeon, a licensed optometrist, or a licensed doctoral psychologist, notwithstanding a provision in the policy, and the policyholder, insured, or beneficiary may choose the provider of the services.
SECTION 38-71-210. Health insurance policies to include chiropractic services.
If an insurer offers a policy containing a provision for medical expense benefits that does not provide payment for chiropractic services, it shall offer as a part thereof an optional rider or endorsement, if specifically requested by the insured or subscriber under an individual policy or a certificate holder or subscriber under a master policy, which defines such benefits as including payment to a chiropractor for procedures specified in the policy which are within the scope of the practice of chiropractic. Any additional cost to the insured or certificate holder must be reasonably related to benefits provided.
SECTION 38-71-215. Dermatology referrals.
(A) If a primary care physician makes a referral to a dermatologist, the enrollee in a managed care plan may see the in-network dermatologist to whom the enrollee is referred, without further referral, for a minimum of six months or four visits, whichever first occurs, for diagnosis, medical treatment, or surgical procedures for the referral problem or related complications.
(B) Written communication from the dermatologist should be sent to the primary care physician after each visit.
(C) An enrollee with a documented past history of malignant melanoma may be referred by his or her primary care physician to an in-network dermatologist for an annual evaluation and, as necessary, biopsy or surgery, or both.
(D) All services provided pursuant to this section are subject to contractual provisions regarding medical necessity and benefit coverage.
(E) Nothing in this section may be construed to extend benefits to an enrollee past the contract period.
SECTION 38-71-220. Misrepresentations to induce termination or conversion of disability insurance policies.
No insurer, or its employee or agent, may make any misleading representations or incomplete or fraudulent comparisons of any disability insurance policies or insurers for the purpose of inducing, or which may tend to induce, any person to lapse, forfeit, surrender, terminate, return, or convert any disability insurance policy.
SECTION 38-71-230. Written notice of health insurance claim policies and procedures; adoption of standardized claim forms; addition of logo to form.
(A) All licensed health care providers are required to provide written notice of the policies and procedures with regard to health insurance claims. The notice may take the form of a patient information card or notice clearly posted in all patient waiting areas of the providers' place of business.
(B) An organization providing payment or reimbursement for diagnosis and treatment of a condition or a complaint by a licensed physician in South Carolina must accept the standardized CMS 1500 claim form, or its successor as it may be amended from time to time. An organization providing payment or reimbursement for diagnosis and treatment of a condition or a complaint by a hospital licensed in South Carolina shall accept the standardized UB 04 claim form, or its successor as it may be amended from time to time.
(C) The CMS 1500 or the UB 04 claim form or the successor of each or as either may be amended from time to time may be altered only with a customized logo which must appear in the top portion of the claim form one inch vertical from the top.
SECTION 38-71-240. Coverage required for cleft lip and palate; certain policies exempt.
(A) As used in this section:
(1) "Cleft lip and palate" means a congenital cleft in the lip or palate, or both.
(2) "Medically necessary care and treatment" shall include, but not be limited to:
(a) oral and facial surgery, surgical management, and follow-up care made necessary because of a cleft lip and palate;
(b) prosthetic treatment such as obdurators, speech appliances, and feeding appliances;
(c) medically necessary orthodontic treatment and management;
(d) medically necessary prosthodontic treatment and management;
(e) otolaryngology treatment and management;
(f) audiological assessment, treatment, and management performed by or under the supervision of a licensed doctor of medicine, including surgically implanted amplification devices; and
(g) medically necessary physical therapy assessment and treatment.
(B)(1) Any individual or group accident and health policy which provides dependent coverage shall provide coverage for the medically necessary care and treatment of cleft lip and palate and any condition or illness which is related to or developed as a result of a cleft lip and palate. Such a policy may contain the same copayment provisions for the coverage of cleft lip and palate as apply to other conditions or procedures covered by the policy.
(2) Any individual or group dental policy which provides dependent coverage shall provide coverage for teeth capping, prosthodontics, and orthodontics necessary for the care and treatment of cleft lip and palate. Such a policy may contain the same copayment provisions for the coverage of cleft lip and palate as apply to other conditions or procedures covered by the policy.
(C) If a person with a cleft lip and palate is covered by an accident and health policy described in subsection (B)(1) and is also covered by a dental policy described in subsection (B)(2), teeth capping, prosthodontics, and orthodontics shall be covered by the dental policy to the limit of coverage provided and any excess thereafter shall be provided by the individual or group accident and health policy.
(D) The provisions of this section do not apply to a policy which provides disability or income protection coverage, hospital confinement indemnity coverage, accident only coverage, specified disease or specified accident coverage, long-term care coverage, vision only coverage, or coverage issued as a supplement to Medicare.
SECTION 38-71-241. Percentage copayment and deductible must be applied to negotiated rate or lesser charge of that provider.
An insurer that negotiates rates with providers for covered health care services under an individual or group accident and health insurance policy must provide that percentage copayments and deductibles paid by the insured are applied to the negotiated rates or lesser charge of that provider. Nothing in this section precludes an insurer from issuing a policy which contains fixed dollar copayments and deductibles.
SECTION 38-71-242. Specified disease insurance policies; payment of claims and benefits.
(A)(1) When used in any individual or group specified disease insurance policy in connection with the benefits payable for goods or services provided by any health care provider or other designated person or entity, the terms "actual charge", "actual charges", "actual fee", or "actual fees" shall mean the amount that the health care provider or other designated person or entity:
(a) agreed to accept, pursuant to a network or other agreement with a health insurer, third-party administrator, or other third-party payor, as payment in full for the goods or services provided to the insured;
(b) agreed or is obligated by operation of law to accept as payment in full for the goods or services provided to the insured pursuant to a provider, participation agreement, or supplier agreement under Medicare, Medicaid, or any other government administered health care program, where the insured is covered or reimbursed by such program; or
(c) if both subitems (a) and (b) of this subsection apply, the lowest amount determined under these two subitems; and
(2) must include any applicable deductibles, coinsurance requirements, or co-pay requirements applicable to the insured under any government administered health care program or any private primary health insurance coverage for the health care provider's goods or services provided to the insured.
(B) This section applies to any individual or group specified disease insurance policy issued to any resident of this State that contains the terms "actual charge", "actual charges", "actual fee", or "actual fees" and does not contain an express definition for the terms "actual charge", "actual charges", "actual fee", or "actual fees".
(C) Notwithstanding any other provision of law, after the effective date of this section, an insurer or issuer of any individual or group specified disease insurance policy shall not pay any claim or benefits based upon an actual charge, actual charges, actual fee, or actual fees under the applicable policy in an amount in excess of the "actual charge", "actual charges", "actual fee", or "actual fees" as defined in this section.
SECTION 38-71-245. Prohibited grounds for denial of enrollment to child of health plan participant.
No health insurer, including a group health plan, as defined in Section 607(1) of the Employee Retirement Income Security Act of 1974 or health maintenance organization as defined in Section 38-33-20, may deny enrollment of a child under the health plan of the child's parent on the grounds that the child:
(1) was born out of wedlock;
(2) is not claimed as a dependent on the parent's federal tax return; or
(3) does not reside with the parent or in the insurer's service area.
SECTION 38-71-250. Duties of insurer as to court-ordered health care coverage for child of eligible parent.
If, pursuant to a court order which meets the specifications of Section 63-17-2110, a parent is required to provide health coverage for a child and the parent is eligible for family health coverage through a health insurer, including a group health plan as defined in Section 607(1) of the Employee Retirement Income Security Act of 1974 or health maintenance organization as defined in Section 38-33-20, the insurer shall:
(1) permit the parent to enroll, under the family coverage, a child who is otherwise eligible for the coverage without regard to any enrollment season restrictions;
(2) if the parent is enrolled but fails to make application to obtain coverage for the child, enroll the child under family coverage upon application of:
(a) the child's other parent;
(b) the state agency administering the Medicaid program; or
(c) the state agency administering 42 U.S.C. Sections 651 to 669, the child support enforcement program; and
(3) continue coverage of the child unless the insurer is provided satisfactory written evidence that the:
(a) court order is no longer in effect;
(b) child is or will be enrolled in comparable health coverage through another insurer which will take effect not later than the effective date of disenrollment; or
(c) employer has eliminated family health coverage for all of its employees.
SECTION 38-71-255. Health insurer may not impose different requirements on state agency.
A health insurer, including a group health plan as defined in Section 607(1) of the Employee Retirement Income Security Act of 1974 or health maintenance organization as defined in Section 38-33-20, may not impose requirements on a state agency, which has been assigned the rights of an individual eligible for medical assistance under Medicaid who is also covered under a plan issued by the health insurer, that are different from requirements applicable to an agent or assignee of any other individual so covered.
SECTION 38-71-260. Duties of health insurer of child to custodial parent.
If a child has health coverage through the health insurer including a group health plan, as defined in Section 607(1) of the Employee Retirement Income Security Act of 1974 or health maintenance organization as defined in Section 38-33-20, of a noncustodial parent, the insurer shall:
(1) provide information to the custodial parent as may be necessary for the child to obtain benefits through that coverage;
(2) permit the custodial parent or the health care provider, with the custodial parent's approval, to submit claims for covered services without the approval of the noncustodial parent; and
(3) make payments on claims submitted in accordance with item (2) directly to the custodial parent, the provider, or the state Medicaid agency.
SECTION 38-71-265. Health insurer not to consider State medical assistance; subrogation of state to right to insurance payment for health care.
(A) In enrolling a person or in making any payments for benefits to a person or on behalf of a person, no health insurer, including a group health plan as defined in Section 607(1) of the Employee Retirement Income Security Act of 1974 or health maintenance organization as defined in Section 38-33-20, may take into account that the person is eligible for or is provided medical assistance under a State Plan for Medical Assistance pursuant to Title XIX of the Social Security Act.
(B) In a case where a health insurer, including a group health plan as defined in Section 607(1) of the Employee Retirement Income Security Act of 1974 or health maintenance organization as defined in Section 38-33-20, has a legal liability to make payments for medical assistance to or on behalf of a person, to the extent that payment has been made under a State Plan for Medical Assistance pursuant to Title XIX of the Social Security Act for health care items or services furnished to the person, the State is considered to have acquired the rights of the person to the payment for the health care items or services.
SECTION 38-71-275. Insurance coverage for certain drugs not to be excluded from policy definitions.
(A) No insurance policy which provides coverage for drugs shall exclude coverage of any such drug used for the treatment of cancer on the grounds that the drug has not been approved by the Federal Food and Drug Administration for the treatment of the specific type of cancer for which the drug has been prescribed; provided, that such drug is recognized for treatment of that specific type of cancer in one of the standard reference compendia or in the medical literature.
(B) This section shall not be construed to:
(1) alter existing law with regard to provisions limiting the coverage of drugs that have not been approved by the Federal Food and Drug Administration;
(2) require coverage for any drug when the Federal Food and Drug Administration has determined its use to be contraindicated;
(3) require coverage for experimental drugs not otherwise approved for any indication by the Federal Food and Drug Administration;
(4) create, impair, alter, limit, modify, enlarge, abrogate, or prohibit reimbursement for drugs used in the treatment of any other disease or condition.
(C) For purposes of this section:
(1) "Insurance policy" means an individual, group, or blanket policy written by a medical expense indemnity corporation, a hospital service corporation, a health care service plan contract, or a private insurance plan issued, amended, delivered, or renewed in this State or which provides insurance for residents of this State.
(2) "Standard reference compendia" means:
(a) the United States Pharmacopoeia Drug Information;
(b) the American Medical Association Drug Evaluations; or
(c) the American Hospital Formulary Service Drug Information.
(3) "Medical literature" means two articles from major peer-reviewed professional medical journals that have recognized, based on scientific or medical criteria, the drug's safety and effectiveness for treatment of the indication for which it has been prescribed unless one article from major peer-reviewed professional medical journals has concluded, based on scientific or medical criteria, that the drug is unsafe or ineffective or that the drug's safety and effectiveness cannot be determined for the treatment of the indication for which it has been prescribed.
SECTION 38-71-280. Autism spectrum disorder; coverage; eligibility for benefits.
(A) As used in this section:
(1) "Autism spectrum disorder" means one of the three following disorders as defined in the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders of the American Psychiatric Association:
(a) Autistic Disorder;
(b) Asperger's Syndrome;
(c) Pervasive Developmental Disorder--Not Otherwise Specified.
(2) "Insurer" means an insurance company, a health maintenance organization, and any other entity providing health insurance coverage, as defined in Section 38-71-670(6), which is licensed to engage in the business of insurance in this State and which is subject to state insurance regulation.
(3) "Health maintenance organization" means an organization as defined in Section 38-33-20(8).
(4) "Health insurance plan" means a group health insurance policy or group health benefit plan offered by an insurer. It includes the State Health Plan, but does not otherwise include any health insurance plan offered in the individual market as defined in Section 38-71-670(11), any health insurance plan that is individually underwritten, or any health insurance plan provided to a small employer, as defined by Section 38-71-1330(17) of the 1976 Code.
(5) "State Health Plan" means the employee and retiree insurance program provided for in Article 5, Chapter 11, Title 1.
(B) A health insurance plan as defined in this section must provide coverage for the treatment of autism spectrum disorder. Coverage provided under this section is limited to treatment that is prescribed by the insured's treating medical doctor in accordance with a treatment plan. With regards to a health insurance plan as defined in this section an insurer may not deny or refuse to issue coverage on, refuse to contract with, or refuse to renew or refuse to reissue or otherwise terminate or restrict coverage on an individual solely because the individual is diagnosed with autism spectrum disorder.
(C) The coverage required pursuant to subsection (B) must not be subject to dollar limits, deductibles, or coinsurance provisions that are less favorable to an insured than the dollar limits, deductibles, or coinsurance provisions that apply to physical illness generally under the health insurance plan, except as otherwise provided for in subsection (E). However, the coverage required pursuant to subsection (B) may be subject to other general exclusions and limitations of the health insurance plan, including, but not limited to, coordination of benefits, participating provider requirements, restrictions on services provided by family or household members, utilization review of health care services including review of medical necessity, case management, and other managed care provisions.
(D) The treatment plan required pursuant to subsection (B) must include all elements necessary for the health insurance plan to appropriately pay claims. These elements include, but are not limited to, a diagnosis, proposed treatment by type, frequency, and duration of treatment, the anticipated outcomes stated as goals, the frequency by which the treatment plan will be updated, and the treating medical doctor's signature. The health insurance plan may only request an updated treatment plan once every six months from the treating medical doctor to review medical necessity, unless the health insurance plan and the treating medical doctor agree that a more frequent review is necessary due to emerging clinical circumstances.
(E) To be eligible for benefits and coverage under this section, an individual must be diagnosed with autistic spectrum disorder at age eight or younger. The benefits and coverage provided pursuant to this section must be provided to any eligible person under sixteen years of age. Coverage for behavioral therapy is subject to a fifty thousand dollar maximum benefit per year. Beginning one year after the effective date of this act, this maximum benefit shall be adjusted annually on January 1 of each calendar year to reflect any change from the previous year in the current Consumer Price Index, All Urban Consumers, as published by the United States Department of Labor's Bureau of Labor Statistics.
SECTION 38-71-285. Repealed by 2002 Act No. 338, Section 2, eff June 30, 2007.
SECTION 38-71-290. Mental health coverage; definitions; treatment requirements; exceptions
(A) As used in this section:
(1) "Health insurance plan" means a health insurance policy or health benefit plan offered by an insurance issuer, including a qualified health benefit plan offered or administered by the State, or a subdivision or instrumentality of the State, that provides group health insurance coverage as defined by Section 38-71-840(12).
(2) "Mental health condition" means the following psychiatric illnesses as defined by the "Diagnostic and Statistical Manual of Mental Disorders-Fourth Edition (DSM-IV)", and subsequent editions published by the American Psychiatric Association:
(a) Bipolar Disorder;
(b) Major Depressive Disorder;
(c) Obsessive Compulsive Disorder;
(d) Paranoid and Other Psychotic Disorder;
(e) Schizoaffective Disorder;
(f) Schizophrenia;
(g) Anxiety Disorder;
(h) Post-traumatic Stress Disorder; and
(i) Depression in childhood and adolescence.
(3) "Rate, term, or condition" means lifetime or annual payment limits, deductibles, copayments, coinsurance and other cost-sharing requirements, out-of-pocket limits, visit limits, and any other financial component of health insurance coverage that affects the insured.
(4) "Settings" means either emergency, outpatient, or inpatient care.
(5) "Modalities" means therapeutic methods or agents including, without limitation, surgery or pharmaceuticals.
(B) A health insurance plan must provide coverage for treatment of a mental health condition and may not establish a rate, term, or condition that places a greater financial burden on an insured for access to treatment for a mental health condition than for access to treatment for a physical health condition in similar settings and treatment modalities. Any deductible or out-of-pocket limits required under a health insurance plan must be comprehensive for coverage of both mental health and physical health conditions.
(C) A health insurance plan that does not otherwise provide for management of care under the plan, or that does not provide for the same degree of management of care for all health conditions, may provide coverage for treatment of mental health conditions through a managed care organization if the managed care organization is in compliance with regulations promulgated by the director. The regulations promulgated by the director must ensure that timely and appropriate access to care is available, that the quantity, location, and specialty distribution of health care providers is adequate, and that administrative or clinical protocols do not prevent access to medically necessary treatment for the insured.
(D) A health insurance plan complies with this section if at least one choice for treatment of mental health conditions provided to the insured within the plan has rates, terms, and conditions that place no greater financial burden on the insured than for access to treatment of physical conditions in similar settings and treatment modalities. The director may disapprove a plan that the director determines to be inconsistent with the purposes of this section.
(E) To be eligible for coverage under this section for the treatment of mental illness, the treatment must be rendered by a licensed physician, licensed mental health professional, or certified mental health professional in a mental health facility that provides a program for the treatment of a mental health condition pursuant to a written treatment plan. A health insurance plan may require a mental health facility, licensed physician, or licensed or certified mental health professional to enter into a contract as a condition of providing benefits.
(F) The provisions of this section do not:
(1) limit the provision of specialized medical services for individuals with mental health disorders;
(2) supersede the provisions of federal law, federal or state Medicaid policy, or the terms and conditions imposed on a Medicaid waiver granted to the State for the provision of services to individuals with mental health disorders;
(3) require a health insurance plan to provide rates, terms, or conditions for access to treatment for mental illness that are identical to rates, terms, or conditions for access to treatment for a physical condition;
(4) apply to a health insurance plan that is individually underwritten; or
(5) apply to a health insurance plan provided to a small employer, as defined in Section 38-71-1330(18).
(G) The provisions of this section apply where required regardless of the applicability of Section 38-71-880 regarding parity in the application of certain limits to mental health and substance use disorder benefits.
ARTICLE 3.
INDIVIDUAL ACCIDENT AND HEALTH POLICIES
SUBARTICLE 1.
POLICY FORMS AND RATES
SECTION 38-71-310. Filing of forms and rates; approval or disapproval; withdrawal of approval; exceptions; loss ratio guarantee.
(A) A policy or certificate of accident, health, or accident and health insurance may not be issued or delivered in this State, nor may any application, endorsement, or rider which becomes a part of the policy be used, until a copy of its form has been filed with and approved by the director or his designee, except as exempted by the director or his designee as permitted by Section 38-61-20. The director or his designee may disapprove the form if the form:
(1) does not meet the requirements of law;
(2) contains provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory; or
(3) is solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading.
The director or his designee shall notify in writing, as soon as is practicable, the insurer that has filed the form of his approval or disapproval. If the form is disapproved, the notice must contain the reasons for disapproval, and the insurer is entitled to a public hearing on that decision. If action is not taken to approve or disapprove a policy or certificate, application, endorsement, or rider after the document has been filed for thirty days, it is deemed to be approved.
The director or his designee, in his discretion, may extend for up to an additional sixty days the period for approval or disapproval of the form. An organization may not use a form deemed approved pursuant to the default provision of this section until the organization has filed with the director or his designee a written notice of its intent to use the form. The notice must be filed in the office of the director at least ten days before the organization uses the form.
(B) No premium rates applicable to accident policies, health policies, or combined accident and health policies or certificates for individual or family protection may be used unless they have been filed with the department and approved by the director or his designee. The director or his designee may disapprove premium rates if he determines that the benefits provided in the policies or certificates are unreasonable in relation to the premiums charged. The director or his designee shall notify in writing the insurer, as soon as is practicable, which has filed the premium rates of his approval or disapproval with the department. In the event of disapproval, the notice must contain the reasons for disapproval, and the insurer is entitled to appeal the decision or determination of disapproval before the Administrative Law Judge Division as provided by law. If no action has been taken to approve or disapprove the premium rates after they have been filed for ninety days, they are deemed to be approved.
(C) At any time the director or his designee, after a public hearing of which at least thirty days' written notice has been given, may withdraw approval of forms or rates previously approved under subsections (A) and (B) if he determines that the forms or rates no longer meet the standards for approval specified in subsections (A) and (B).
(D) The provisions of this section do not apply to policies issued in connection with loans made under the Small Loan Act of 1966.
(E) For major medical expense coverage individual accident and health insurance policies, as defined by regulation of the department, the benefits are deemed reasonable in relation to the premium charged if the insurer has filed a loss ratio guarantee with the department. This guaranteed loss ratio must be equivalent to, or greater than, the most recent loss ratios detailed within the National Association of Insurance Commissioners' "Guidelines for Filing of Rates for Individual Health Insurance Forms." This loss ratio guarantee must be in writing and must contain at least the following:
(1) A recitation of the anticipated (target) loss ratio standards contained in the original actuarial memorandum filed with the policy form when it was originally approved.
(2) A guarantee that the actual South Carolina loss ratios for the calendar year in which the new rates take effect, and for each year thereafter until new rates are filed will meet or exceed the loss ratio standards referred to in item (1) above.
(3) A guarantee that the actual South Carolina loss ratio results for the year at issue will be independently audited at the insurer's expense. This audit must be done in the second quarter of the next year and the audited results must be reported to the department not later than the date for filing the applicable Accident and Health Policy Experience Exhibit.
(4) A guarantee that affected South Carolina policyholders will be issued a proportional refund (based on premium paid) of the amount necessary to bring the actual aggregate loss ratio up to the anticipated loss ratio standards referred to in item (1) above. The refund must be made to all South Carolina policyholders insured under the applicable policy form as of the last day of the year at issue if the refund would equal five dollars or more. The refund must include statutory interest from the end of the year at issue until the date of payment. Payments must be made during the third quarter of the next year.
(5) As used herein, the term "loss ratio" means the ratio of incurred losses to earned premium by number of years of policy duration, for all combined durations.
(6) The reference in item (1) of this subsection to the "anticipated (target) loss ratio standards contained in the original actuarial memorandum filed with the policy form when it was originally approved" may not be considered or construed as evidence of legislative intent that the use of, or adherence to, such "anticipated (target) loss ratio standards" is approved or disapproved in any application for a rate increase for any policy form approved prior to the effective date of these amendments to Section 38-71-310.
(F) Nothing in this chapter precludes the issuance of an individual accident, health, or accident and health insurance policy that includes an optional life insurance rider. However, the optional life insurance rider must be filed with and approved by the director or his designee pursuant to Section 38-61-20 and comply with all applicable sections of Chapter 63 and, in addition, in the case of a life insurance rider with accelerated long term care benefits, Chapter 72 of this title.
SECTION 38-71-315. Decrease of premium charges.
Any insurer of individual accident and health insurance may at any time, except when required by law or order of the director or his designee, voluntarily decrease its premium charge for any approved policy form without the prior approval of the director or his designee. However, the insurer must notify the director or his designee and the consumer advocate for information thirty days prior to the use of the revised premium charge. Notwithstanding any other provision of law, any time within one year after using such revised premium charge, the insurer may return its premium charge back to the previously approved level by informing the director or his designee and the consumer advocate of the revision thirty days prior to the effective date. The director or his designee may not disapprove such revision.
SECTION 38-71-320. Policies issued for delivery in another state.
If a policy is issued by an insurer domiciled in this State for delivery to a person residing in another state and if the official having responsibility for the administration of the insurance laws of the other state has advised the director or his designee that the policy is not subject to approval or disapproval by the official, the director or his designee may by ruling require that the policy meet the standards set forth in Sections 38-71-330, 38-71-340, and 38-71-370.
SECTION 38-71-325. Requirements for approval of new individual major medical expense coverage policies.
On January 1, 1992, in addition to any other requirements of law, no new individual major medical expense coverage policy, as defined in regulations promulgated by the department, may be approved unless:
(1) Premium rates, after appropriate allowance for the actuarial value of the difference in benefits, for any such policy form first approved for use by the insurer in South Carolina within the two-year period immediately prior to the effective date of this section and any such policy form first approved for use after the effective date of this section do not exceed the premium rates for any other such policy form first approved for use during this period by more than thirty percent.
(2) The actuarial value of the difference in benefits set out in such policy forms of the insurer, as specified in an opinion by a qualified actuary or other qualified person acceptable to the director or his designee,is reported not less often than once a year to the director or his designee and used in demonstrating compliance with item (1) above.
(3) The anticipated (target) loss ratio for the combined experience for all the policy forms specified in item (1) must be equivalent to or greater than the most recent loss ratios detailed within the National Association of Insurance Commissioner's 'Guidelines for Filing of Rates for Individual Health Insurance Forms' or successor publications. The anticipated (target) loss ratio for the combined experience is defined as the average anticipated (target) loss ratio for all these policy forms included in the combined experience weighted by premium volume. With respect to the policy form, the insurer shall have the right to file a loss ratio guarantee in accordance with the procedures specified in Section 38-71-310(E) or to request approval of any rate change before the use thereof, but the anticipated loss ratios of each policy form whether or not a loss ratio guarantee has been filed must be combined as provided in the preceding item (3).
The initial policy form proposed to be used by a domestic insurer after its organization under the laws of this State and the initial policy form proposed to be used by a foreign insurer after authorization by the director or his designee to do business in this State may be disapproved by the director or his designee if he determines that the rates proposed to be used with the policy form are set at a level substantially less than rates charged by other insurers in this State offering comparable coverage.
Nothing contained in this section may be construed to prevent the use of age, sex, area, industry, occupational, and avocational factors or to prevent the use of different rates for smokers and nonsmokers or for any other habit or habits of an insured person which have a statistically proven effect on the health of the person and are approved by the director or his designee. Also, nothing contained in this section shall preclude the establishment of a substandard classification based upon the health condition of the insured, but the initial classification may not be changed adversely to the applicant after initial issue.
The director or his designee has the right, upon application by any insurer, to grant relief, for good cause shown, from any requirement of this section.
SECTION 38-71-330. Form of policies.
No policy of accident and health insurance may be delivered or issued for delivery to any person in this State unless:
(1) The entire money and other considerations therefor are expressed therein.
(2) The time at which the insurance takes effect and terminates is expressed therein.
(3) It purports to insure only one individual, except that a policy may insure, originally or by subsequent amendment, upon the application of an adult member of a family who is considered the policyholder, any two or more eligible members of that family, including husband, wife, dependent children, or any children under a specified age which may not exceed nineteen years, and any other individual dependent upon the policyholder.
(4) The style, arrangement, and overall appearance of the policy give no undue prominence to any portion of the text and every printed portion of the text of the policy and of any endorsements or attached papers is plainly printed in light-faced type of a style in general use, the size of which must be uniform and not less than ten-point with a lower-case unspaced alphabet length not less than one-hundred-and-twenty-point (the "text" includes all printed matter except the name and address of the insurer, name or title of the policy, the brief description, if any, and captions and subcaptions).
(5) The exceptions and reductions of indemnity are set forth in the policy and, except those which are set forth in Sections 38-71-340 and 38-71-370, are printed, at the insurer's option, either included with the benefit provision to which they apply or under an appropriate caption such as "EXCEPTIONS" or "EXCEPTIONS AND REDUCTIONS". However, if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of the exception or reduction must be included with the benefit provision to which it applies.
(6) Each form, including riders and endorsements, is identified by a form number in the lower left-hand corner of the first page thereof.
(7) It contains no provision purporting to make any portion of the charter, rules, constitution, or bylaws of the insurer a part of the policy unless that portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks or short-rate table filed with the department.
SECTION 38-71-335. Accident and/or health insurance cancellation provision prohibited; optionally renewable policies prohibited; notice of nonrenewal.
(A) No individual or family accident, health, or accident and health insurance policy may contain a provision which gives the insurer the right to cancel the policy. "To cancel" means to terminate a policy at a date other than the policy anniversary date or the premium due date.
(B) For individual or family accident, health, or accident and health insurance policies, excluding individual health insurance coverage as defined in Section 38-71-670, individual or family accident, health, or accident and health insurance policies may not be written on an optionally renewable basis. "Optionally renewable" means a contract of insurance in which the insurer reserves the right to terminate the coverage at the policy anniversary date. Optionally renewable does not include the following categories of policies as defined by the department by regulation: (1) "nonrenewable for stated reasons only" and (2) "conditionally renewable". Term insurance is not considered insurance written on an optionally renewable basis. For individual health insurance coverage as defined in Section 38-71-670, Section 38-71-675 relating to guaranteed renewability of individual health insurance coverage shall apply.
(C) An individual or family accident, health, or accident and health insurance policy which may be nonrenewed, may be nonrenewed at the policy anniversary date or premium due date. The insurer shall give the insured at least thirty-one days' written notice of nonrenewal. Nonrenewal by the insurer is without prejudice to any claims originating before the effective date of nonrenewal. No written notice shall be required for failure to pay prem