§ 38-71-850 — Preexisting condition exclusion; limitations; creditable coverage; certification; enrollment for coverage.

(A) Subject to subsection (C), a health insurance issuer offering group health insurance coverage, may, with respect to a participant or beneficiary, impose a preexisting condition exclusion only if the: (1) exclusion relates to a condition, whether physical or mental, regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended or received within the six-month period ending on the enrollment date; (2) exclusion extends for not more than twelve months without medical care, treatment, or supplies ending after the effective date of coverage or twelve months after the enrollment date, whichever occurs first, or eighteen months after the enrollment date in the case of a late enrollee; and (3) period of any preexisting condition exclusion is reduced by the aggregate of the periods of creditable coverage if any, as defined in subsection (B)(1), applicable to the participant or beneficiary as of the enrollment date. (B)(1) For purposes of this subarticle, "creditable coverage" means, with respect to an individual, coverage of the individual under: (a) a group health plan; (b) health insurance coverage; (c) Part A or Part B, Title XVIII of the Social Security Act; (d) Title XIX of the Social Security Act, other than coverage consisting solely of benefits under Section 1928; (e) Chapter 55, Title 10 of the United States Code; (f) a medical care program of the Indian Health Service or of a tribal organization; (g) a state health benefits risk pool, including the South Carolina Health Insurance Pool; (h) a health plan offered under Chapter 89 of Title 5, United States Code; (i) a public health plan as defined in regulations; (j) a health benefit plan under Section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)); or (k) Title XXI of the Social Security Act (State Children's Health Insurance Program). The term does not include coverage consisting only of those benefits excepted from the definition of health insurance coverage. (2)(a) A period of creditable coverage shall not be counted, with respect to enrollment of an individual under a group health plan, if, after the period and before the enrollment date, there was a sixty-three-day period during all of which the individual was not covered under any creditable coverage. (b) For purposes of item (2)(a) and subsection (C)(4), any period that an individual is in a waiting period for any coverage under a group health plan or for group health insurance coverage or is in an affiliation period, as defined in Section 38-71-840, shall not be taken into account in determining the continuous period under subitem (a). (3)(a) Except as otherwise provided under subitem (b), for purposes of applying subsection (A)(3), a health insurance issuer offering group health insurance coverage, shall count a period of creditable coverage without regard to the specific benefits covered during the period. (b) A health insurance issuer offering group health insurance, may elect to apply subsection (A)(3) based on coverage of benefits within each of several classes or categories of benefits specified in regulations rather than as provided under subitem (a). The election must be made on a uniform basis for all participants and beneficiaries. Under the election an issuer shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within the class or category. (c) In the case of an election under subitem (b) with respect to health insurance coverage offered by an issuer in the small or large group market, the issuer: (i) shall prominently state in any disclosure statements concerning the coverage, and to each employer at the time of the offer or sale of the coverage, that the issuer has made such election; and (ii) shall include in the statements a description of the effect of the election. (4) Periods of creditable coverage with respect to an individual shall be established through presentation of certifications described in subsection (D) or in such other manner as may be specified in regulations. (C)(1) Subject to item (4), a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion in the case of an individual who, as of the last day of the thirty-one-day period beginning with the date of birth, is covered under creditable coverage. (2) Subject to item (4), a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion in the case of a child who is adopted or placed for adoption before attaining eighteen years of age and who, as of the last day of the thirty-one-day period beginning on the date of the adoption or placement for adoption, is covered under creditable coverage. This item does not apply to coverage before the date of such adoption or placement for adoption. (3) A health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion relating to pregnancy as a preexisting condition. (4) Items (1) and (2) no longer apply to an individual after the end of the first sixty-three-day period during all of which the individual was not covered under any creditable coverage. (D)(1)(a) A health insurance issuer offering group health insurance coverage, shall provide the certification described in subitem (b): (i) at the time an individual ceases to be covered under the plan or otherwise becomes covered under a COBRA continuation provision; (ii) in the case of an individual becoming covered under such a provision, at the time the individual ceases to be covered under such provision; and (iii) on the request on behalf of an individual made not later than twenty-four months after the date of cessation of the coverage described in subitem (a)(i) or (ii), whichever is later. The certification under subsubitem (i) may be provided, to the extent practicable, at a time consistent with notices required under any applicable COBRA continuation provision. (b) The certification described in this subitem is a written certification of: (i) the period of creditable coverage of the individual under the plan and the coverage, if any, under the COBRA continuation provision; and (ii) the waiting period, if any, and affiliation period, if applicable, imposed with respect to the individual for any coverage under the plan. (2) In the case of an election described in subsection (B)(3)(b) by a group health plan or health insurance issuer, if the plan or issuer enrolls an individual for coverage under the plan and the individual provides a certification of coverage of the individual under item (1): (a) upon request of the plan or issuer, the issuer which issued the certification provided by the individual shall promptly disclose to the requesting plan or issuer information on coverage of classes and categories of health benefits available under the entity's plan or coverage; and (b) the issuer may charge the requesting plan or issuer for the reasonable cost of disclosing the information. (3) The Director of Insurance shall establish rules to prevent an issuer's failure to provide information under item (1) or (2) with respect to previous coverage of an individual from adversely affecting any subsequent coverage of the individual under another group health plan or health insurance coverage. (E)(1) A health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan, or a dependent of the employee if the dependent is eligible, but not enrolled, for coverage under such terms, to enroll for coverage under the terms of the plan if each of the following conditions is met: (a) The employee or dependent was covered under a group health plan or had health insurance coverage at the time coverage was previously offered to the employee or dependent. (b) The employee stated in writing at the time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or issuer, if applicable, required such a statement at the time and provided the employee with notice of the requirement and the consequences of the requirement at the time. (c) The employee's or dependent's coverage described in subitem (a): (i) was under a COBRA continuation provision and the coverage under the provision was exhausted; or (ii) was not under such a provision and either the coverage was terminated as a result of loss of eligibility for the coverage, including as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment, or employer contributions toward the coverage were terminated; (iii) was one of multiple health insurance plans offered by an employer and the employee elects a different plan during an open enrollment period. (d) Under the terms of the plan, the employee requests the enrollment not later than thirty days after the date of exhaustion of coverage described in subitem (c)(i) or termination of coverage or employer contribution described in subitem (c)(ii). (2)(a) If: (i) a group health plan makes coverage available with respect to a dependent of an individual; (ii) the individual is a participant under the plan, or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period; and (iii) a person becomes a dependent of the individual through marriage, birth, or adoption or placement for adoption, the health insurance issuer offering health insurance coverage in connection with the group health plan shall provide for a dependent special enrollment period described in subitem (b) during which the person or, if not otherwise enrolled, the individual may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a dependent of the individual if such spouse is otherwise eligible for coverage. (b) A dependent special enrollment period under this subitem must be not less than thirty-one days and begins on the later of: (i) the date dependent coverage is made available; or (ii) the date of the marriage, birth, or adoption or placement for adoption as the case may be described in subitem (a)(iii). (c) If an individual seeks to enroll a dependent during the first thirty-one days of a dependent special enrollment period, the coverage of the dependent shall become effective: (i) in the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is received; (ii) in the case of a dependent's birth or a dependent's adoption or placement for adoption within thirty-one days of birth, as of the date of the birth; or (iii) in the case of a dependent's adoption or placement for adoption beyond thirty-one days from the date of birth, the date of the adoption or placement for adoption. (3) A health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit a dependent, spouse, or minor or dependent child, of an employee, if the dependent is eligible, but not enrolled for coverage, to enroll for coverage under the terms of the plan if a court has ordered that coverage be provided for the dependent under a covered employee's health insurance plan and a request for enrollment is made within thirty days after the issuance of the court order. (4) A health insurance issuer offering group health insurance coverage in connection with a group health plan shall permit an employee who is eligible, but not enrolled for coverage, or a dependent of the employee if the dependent is eligible, but not enrolled for coverage, to enroll for coverage under the terms of the plan if one of the following conditions is met: (a) the employee or dependent was covered under a Medicaid plan pursuant to Title XIX of the Social Security Act or under a State Children's Health Insurance Program pursuant to Title XXI of the Social Security Act and coverage of the employee or dependent under the plan or program is terminated as a result of loss of eligibility for the coverage and the employee requests enrollment not later than sixty days after the date of termination of the coverage; or (b) the employee or dependent becomes eligible for assistance with respect to coverage under the group health plan under a Medicaid plan or State Children's Health Insurance Program, including under any waiver or demonstration project conducted under or in relation to the plan or program, if the employee requests enrollment not later than sixty days after the date the employee or dependent is determined to be eligible for assistance. An individual who requests enrollment as specified in this item must be enrolled, even if there is otherwise no open enrollment period, without any penalties for late enrollment. (F)(1) A health maintenance organization which offers health insurance coverage in connection with a group health plan and which does not impose any preexisting condition exclusion allowed under subsection (A) with respect to any particular coverage option may impose an affiliation period for such coverage option, but only if: (a) the period is applied uniformly without regard to any health status-related factors; and (b) the period does not exceed two months, or three months in the case of a late enrollee. (2) A health maintenance organization described in item (1) may use alternative methods from those described in item (1) to address adverse selection as approved by the Director of Insurance or his designee. (G)(1)(a)(i) Subject to subitem (a)(ii), no period before July 1, 1996, shall be taken into account in determining creditable coverage. (ii) The Director of Insurance shall provide for a process either by bulletin or by order whereby individuals who need to establish creditable coverage for periods before July 1, 1996, and who would have the coverage credited but for subitem (a)(i) may be given credit for creditable coverage for the periods through the presentation of documents or other means. (b)(i) Subject to subsubitems (b)(ii) and (iii), subsection (D) applies to events occurring after June 30, 1996. (ii) In no case is a certification required to be provided under subsection (D) before June 1, 1997. (iii) In the case of an event occurring after June 30, 1996, and before October 1, 1996, a certification is not required to be provided under subsection (D) unless an individual, with respect to whom the certification is otherwise required to be made, requests the certification in writing. (c) In the case of an individual who seeks to establish creditable coverage for any period for which certification is not required because it relates to an event occurring before June 30, 1996: (i) the individual may present other credible evidence of the coverage in order to establish the period of creditable coverage; and (ii) a health insurance issuer shall not be subject to any penalty or enforcement action with respect to the issuer's crediting or not crediting the coverage if the issuer has sought to comply in good faith with the applicable requirements under this section.

Legislative History

HISTORY: 1997 Act No. 5, SECTION 3; 2010 Act No. 217, SECTIONS 4, 5, eff June 7, 2010.