On April 2, 2015, Commissioner of Insurance Kipper issued Bulletin 15-001, replacing Bulletins 13-011 and 13-012. The new bulletin advises insurers regarding hospital and other fixed indemnity insurance policies. According to the bulletin, Nevada has implemented new procedures and enforcement to align with federal requirements for such policies. As background, in May 2014, CMS issued final regulations related to indemnity insurance products. Under those regulations, an individual indemnity policy is exempt from PPACA’s coverage mandates (regarding, for example, essential health benefits, annual dollar limits and maximum out-of-pocket limits) if it qualifies as a HIPAA-excepted benefit.
To qualify as an excepted benefit:
The policy must only cover individuals who have other coverage considered MEC.There is no coordination of benefits with another health plan.The benefits are paid as a fixed-dollar amount per day or service regardless of the amount incurred.The participant is provided with a written notice explaining that the policy would not qualify as MEC for individual mandate purposes.
For indemnity policies issued with an effective date on or after May 1, 2015, the Department requires that the insurer provide the above notice in the initial insurance application and the participant must certify that they have other coverage that qualifies as MEC. The insurer is not required to confirm continuous MEC by the purchaser.
The Department recommends that the following attestation clause be placed above the signature line of initial indemnity insurance applications:
I hereby attest that I have major medical health insurance or Medicare that meets the requirements of minimum essential coverage as defined by the Affordable Care Act.
For indemnity policies issued with an effective date before May 1, 2015, the same notice and attestation requirement applies to the first renewal application with an effective date on or after Oct. 1, 2016. The carrier has the option of providing the notice and gathering the attestation at any earlier date.
For indemnity policies issued with an effective date before May 1, 2015, that do not require an application as a condition of renewal, the notice and attestation is not required. However, the requirement would apply to these policies if the insured is required to fill out a new application form for any reason.
Bulletin No. 15-001 »