Montana Code 33-22-508. Conversion on termination of eligibility
33-22-508. Conversion on termination of eligibility. (1) A group disability insurance policy or certificate of insurance must contain a provision that if the insurance or any portion of the insurance on a person or the person’s dependents or family members covered under the policy ceases because of termination of the person’s membership in a group eligible for coverage under the policy, because of termination of the person’s employment, as a result of a person’s employer discontinuing the employer’s business, or as a result of a person’s employer discontinuing the group disability insurance policy and not providing for any other group disability insurance or plan and if the person had been insured for a period of 3 months and is not insured under another major medical disability insurance policy or plan, the person is entitled to have issued to the person by the insurer, without evidence of insurability, group disability coverage or an individual disability policy or, in the absence of an individual disability policy issued by the insurer, a group disability policy issued by the insurer on the person or on the person’s dependents or family members if application for the individual policy is made and the first premium tendered to the insurer within 31 days after the termination of the group coverage.
Terms Used In Montana Code 33-22-508
- Contract: A legal written agreement that becomes binding when signed.
- Customary: means according to usage. See Montana Code 1-1-206
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Excepted benefits: means :
(a)coverage only for accident or disability income insurance, or both;
(b)coverage issued as a supplement to liability insurance;
(c)liability insurance, including general liability insurance and automobile liability insurance;
(d)workers' compensation or similar insurance;
(e)automobile medical payment insurance;
(f)credit-only insurance;
(g)coverage for onsite medical clinics;
(h)other similar insurance coverage under which benefits for medical care are secondary or incidental to other insurance benefits, as approved by the commissioner;
(i)if offered separately, any of the following:
(i)limited-scope dental or vision benefits;
(ii)benefits for long-term care, nursing home care, home health care, community-based care, or any combination of these types of care; or
(iii)other similar, limited benefits as approved by the commissioner;
(j)if offered as independent, noncoordinated benefits, any of the following:
(i)coverage only for a specified disease or illness; or
(ii)hospital indemnity or other fixed indemnity insurance;
(k)if offered as a separate insurance policy:
(i)medicare supplement coverage;
(ii)coverage supplemental to the coverage provided under Title 10, chapter 55, of the United States Code; and
(iii)similar supplemental coverage provided under a group health plan. See Montana Code 33-22-140
- Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
(2)A group insurer may meet the requirements of this section by contracting with another insurer to issue conversion policies as described in subsections (5) and (6). The conversion carrier must be authorized to act as an insurer in this state, and the commissioner shall approve the conversion policies pursuant to 33-1-501.
(3)The individual policy or group policy, at the option of the insured, may be on any form then customarily issued by the insurer to individual or group policyholders, with the exception of a policy the eligibility for which is determined by affiliation other than by employment with a common entity. In addition, the insurer or conversion carrier shall make available a conversion policy as required by subsection (6).
(4)The premium for the individual policy or group policy must be at no more than 200% of the insurer’s customary rate applicable to the group policy being terminated at the time of the conversion. If the person entitled to conversion under this section has been insured for more than 3 years, the premium may not be more than 150% of the customary rate of the policy being terminated at the time of the conversion. The customary rate is that rate that is normally issued for medically underwritten policies without discount for healthy lifestyles.
(5)A conversion carrier shall offer an individual or group conversion policy that provides the same schedule of benefits and covers the same eligible expenses as those being terminated. The premium for the policy must be calculated as described in subsection (4).
(6)The insurer or conversion carrier shall also make available a conversion policy, certificate, or membership contract that provides at least the level of benefits provided by the insurer’s lowest cost basic health benefit plan, as defined in 33-22-1803. The conversion rate may not exceed 150% of the highest rate charged for that plan. This subsection does not apply to disability plans that provide only excepted benefits as defined in 33-22-140.
(7)The effective date and time of the conversion policy must be established to ensure that there is no break in coverage between the termination of the group policy coverage and the inception of the conversion policy.