SC STATE STRATEGY TEAM – UPDATE
Bulletin on Short-Term Limited-Duration Policies
The South Carolina Department of Insurance has issued a bulletin (#2018-08) outlining the state and federal requirements applicable to Short-Term, Limited-Duration Insurance (STLDI) policies sold in the individual market in South Carolina. The bulletin notes the final federal rule provisions permitting the sale and renewal and STLDI policies for a period of less than 12 months, with a maximum renewal duration of no longer than 36 months, and the notice requirements in the contracts to ensure consumers understand the coverage purchased.
Notice Requirements – For individual market STLDI policies issued in South Carolina, the notice to consumers in the contracts and application materials differ from the federal requirements. The specific South Carolina notice language for policies issued in 2018, and for policies issued in 2019 or thereafter is provided in the bulletin.
Duration of Coverage – In order to assist consumers in differentiating STLDI and Affordable Care Act (ACA) major medical coverage, the Department is requiring STLDI policies to be 11 months or less, and limits renewals to a total duration of 33 months or less of coverage. Additionally, the Department recommends adding an attestation clause on applications to ensure that applicants understand STLDI policies do not meet the minimum essential coverage under the ACA.
Rate and Form Filings – All STLDI forms and rates are subject to prior approval by the Department, and are to be submitted via SERFF. Beginning October 2, 2018, previously filed STLDI products must be resubmitted for approval, and must comply with the new notice requirements outlined in the bulletin.
The South Carolina Department of Insurance has issued Bulletin #2018-02 regarding the implementation of the recently passed South Carolina Insurance Data Security Act (Act 171, H.4655). The Bulletin specifies the licensees of the DOI that are subject to the Act’s requirements, as well as exceptions, and provides an outline of the statutory provisions and effective dates contained in the Act. Please note that the Bulletin indicates that there will be subsequent bulletins and training to provide insurers and agents with guidance on implementation and compliance.
The DOI is working with the National Association of Insurance Commissioners to ensure consistency among states, and has begun preparing guidance, including the process for reporting cybersecurity events.
SCDOI Memorandum re: Issuers of Individual and Small Group Health Insurance Coverage, including Student Health Plans Issuers of Exchange-certified Stand-Alone Dental Coverage Fling Deadlines
The South Carolina Department of Insurance recently issued a Memorandum to inform insurers of the deadlines and filing requirements for 2019 QHP forms and rates. The Department retains responsibility for the review and approval of forms and rates for the 2019-compliant plans sold on and off the Federally-Facilitated Marketplace, and thus has established the following filing deadlines:
- June 25, 2018– Rates, Forms and Binders for individual and small group QHPs for sale in the FFM
- July 2, 2018– Rates, Forms and Binders for Stand-Alone Dental Plans inside and outside the FFM
- July 16, 2018– Rates, Forms and Binders for individual and small group plans sold only outside the FFM
This guidance does not apply to non-grandfathered health insurance coverage that does not comply with the 2014 Market Reforms, commonly referred to as “grandmothered” plans, that may be renewed under the transitional policy outlined in our April 23rd SST memo. The Department will publish additional guidance, including a chart of filing/binder submission requirements, on its ACA Resources webpage: http://www.doi.sc.gov/lah.
Additionally, the memorandum reminds Student Health Plan issuers that they should submit their filings no later than 90 days in advance of the proposed effective date of coverage, in order to provide this agency with sufficient time to review and approve the forms and rates associated with student health insurance coverage.
“SC DOI Bulletin 2018-01 on Transitional Policies”
The South Carolina Department of Insurance has posted Bulletin 2018-01, regarding the extension of transitional policies. The purpose of the bulletin is to advise health insurance issuers of the Department’s intent to continue to permit the renewal of coverage pursuant to the latest Center for Consumer Information and Insurance Oversight (CCIIO) guidance and to advise that the requirements outlined in the prior bulletins on this matter continue to remain in effect, as applicable. This bulletin applies to health insurance issuers offering non-grandfathered health insurance coverage in the individual or small group markets for which coverage has continuously been in effect since December 31, 2013. Importantly, South Carolina declines to enforce the 2014 market reforms that the federal government will not enforce for these specific policies. South Carolina will instead enforce its own laws during this transitional period extension.
The transitional policy permits issuers in the individual and small group markets to renew non-grandfathered policies that had plan or policy years beginning on or before December 31, 2013. Such coverage may now be renewed for plan or policy years beginning on or before October 1, 2019, so long as all policies end byDecember 31, 2019. Accordingly, health insurance issuers may early renew or amend the coverage term in order to permit consumers and small employers to maintain such coverage until December 31, 2019.
Except as they relate to the ACA’s expansion of the small group market, which was subsequently repealed by the PACE Act (as outlined in Bulletin 2015-08, issued October 30, 2015) the standards set forth in Bulletin 2013-12, Addendum A to Bulletin 2013-12, Bulletin 2014-05, Bulletin 2016-01, and Bulletin 2017-02 continue to remain in effect as applicable. Health insurance issuers electing to renew coverage pursuant to this bulletin are reminded to review these prior bulletins in their entirety in order to ensure compliance with the relevant transitional relief guidelines outlined therein.