Health insurance sales—protections for seniors moving between a Medicare supplement policy and a Medicare Part C policy, 15.5
Notice of Intended Action
Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."
Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.
Pursuant to the authority of Iowa Code section 505.8 and chapter 507B, the Iowa Insurance Division (the Division) hereby gives Notice of Intended Action to amend Chapter 15, "Unfair Trade Practices," Iowa Administrative Code.
Chapter 15 establishes standards and conduct that have been identified as unfair methods of competition and unfair or deceptive acts or practices in business. The purpose of this amendment is to protect Iowa consumers by providing reciprocal protections for seniors who move between Medicare supplement insurance and Medicare Part C insurance (also known as Medicare Advantage) as well as providing for a refund of unearned premiums. While the law currently prevents the possibility of consumers' having more than one Medicare supplement policy, no such protection exists for consumers who change from a Medicare supplement policy to a Medicare Part C policy. Once a consumer has a Medicare Part C policy, no claims can be paid by the issuer of the consumer's Medicare supplement policy, negating the possibility of the Medicare supplement issuer providing any benefits concurrently on the Medicare Part C policy.
Any interested party may make written suggestions or comments on the proposed amendment on or before October 4, 2017, at 4:30 p.m. Such written materials should be directed to Angel Robinson, Iowa Insurance Division, 601 Locust Street, Fourth Floor, Des Moines, Iowa 50309. Comments may also be submitted by fax at (515)281-3059 or by e-mail at firstname.lastname@example.org.
A public hearing regarding the proposed amendment will be held on October 4, 2017, at 10:30 a.m. at the Iowa Insurance Division office located at 601 Locust Street, Fourth Floor, Des Moines, Iowa. Individuals intending to attend the hearing who require assistive services or devices to observe or participate should contact Angel Robinson at (515)281-4038.
The proposed amendment is subject to the general waiver provisions of the Division in rule 191—4.24(17A).
The Division intends that the amended rule shall become effective December 13, 2017. Compliance with the amended rule will begin on January 1, 2018.
This amendment is intended to implement Iowa Code section 505.8 and chapter 507B.
The following amendment is proposed.
Amend rule 191—15.5(507B) as follows:
191—15.5(507B) Health insurance sales to individuals 65 years of age or older.
15.5(1) The sale of duplicate Medicare supplement insurance is prohibited.
15.5(2) In recommending the purchase or replacement of any Medicare supplement policy, certificate, or a Medicare Part C policy, an agent shall make reasonable efforts to determine the appropriateness of the recommended purchase. Upon a sale, an agent shall require the signing of a notice which states that a Medicare Part C policy replaces a Medicare supplement policy, the Medicare supplement policy will not pay a claim so long as the client has a Medicare Part C policy, and that the client must contact the client's Medicare supplement insurer if the client wishes to cancel the Medicare supplement policy.
15.5(3) Upon notice, an issuer of a Medicare supplement policy shall terminate a policyholder's or certificate holder's Medicare supplement policy with that issuer on the earliest effective date of the same policyholder's or certificate holder's Medicare Part C policy, when the two types of policies coincide. The policyholder or certificate holder may provide notice to the issuer that the policyholder or certificate holder desires to terminate the policy or certificate. Upon receiving supportive documentation, the Medicare supplement issuer shall refund any premium to the policyholder or certificate holder for the months of concurrent Medicare supplement and Medicare Part C policy coverage. This subrule shall not be construed to require a refund of premium for any period of time in excess of two years prior to the date that written notice is provided to an issuer.