632.897 Hospital and medical coverage for persons insured under individual and group policies.
(1) In this section:
(ac) “Custodial parent" means the parent of a child who has been awarded physical placement with the child for more than 50 percent of the time.
(am) “Dependent" means a person who is or would be covered as a dependent of a group member under the terms of the group policy including, but not limited to, age limits, if the group member continues or had continued as a member of the group.
(b) “Employer" means the policyholder in the case of a group policy as defined in par. (c) 1. or 1m. and the sponsor in the case of a group policy as defined in par. (c) 2. or 3.
(c) “Group policy" means:
1. An insurance policy issued by an insurer to a policyholder on behalf of a group whose members thereby receive hospital or medical coverage on either an expense incurred or service basis, other than for specified diseases or for accidental injuries;
1m. A long-term care insurance policy issued by an insurer to a policyholder on behalf of a group;
2. An uninsured plan or program whereby a health maintenance organization, limited service health organization, preferred provider plan, labor union, religious community or other sponsor contracts to provide hospital or medical coverage to members of a group on either an expense incurred or service basis, other than for specified diseases or for accidental injuries; or
3. A plan or program whereby a sponsor arranges for the mass marketing of franchise insurance to members of a group related to one another through their relationship with the sponsor.
(cm) “Individual policy" means an insurance policy whereby an insured receives hospital or medical coverage on either an expense incurred or service basis, other than for specified diseases or for accidental injuries, and a long-term care insurance policy.
(d) “Insurer" means the insurer in the case of a group policy as defined in par. (c) 1., 1m. or 3. and the sponsor in the case of a group policy as defined in par. (c) 2.
(e) “Medicare" means coverage under both part A and part B of Title XVIII of the federal social security act, 42 USC 1395 et seq., as amended.
(em) “Physical placement" has the meaning given in s. 767.001 (5).
(f) “Terminated insured" means a person entitled to elect continued or conversion coverage under sub. (2) (b) or (9).
(1m) Except as provided in sub. (10), this section applies to any group policy which would otherwise be exempt under s. 600.01 (1) (b) 3. if at least 150 of the certificate holders or insureds are residents of this state.
(2)
(a) No group policy which provides coverage to the spouse of the group member may contain a provision for termination of coverage for the spouse solely as a result of a break in their marital relationship except by reason of the entry of a judgment of divorce or annulment of their marriage.
(b) An insurer issuing or renewing a group policy on or after May 14, 1980 and every insurer on and after the date which is 2 years after May 14, 1980 shall permit the following persons who have been continuously covered under a group policy for at least 3 months to elect to continue group policy coverage under sub. (3) or to convert to individual coverage under sub. (4):
1. The former spouse of a group member who otherwise would terminate coverage because of divorce or annulment.
2. A group member who would otherwise terminate eligibility for coverage under the group policy other than a group member who terminates eligibility for coverage due to discharge for misconduct shown in connection with his or her employment.
3. The spouse or dependent of a group member if the group member dies while covered by the group policy and the spouse or dependent was also covered.
(c) Group policy coverage of a terminated insured who is entitled under par. (b) to elect continued group policy coverage or conversion to individual coverage and coverage of the spouse and dependents of the terminated insured provided for in the group policy continues until the terminated insured is notified under par. (d) of the right to elect continued or conversion coverage if the premium for the coverage continues to be paid.
(d) If the employer is notified to terminate the coverage for any of the reasons provided under par. (b), the employer shall provide the terminated insured written notification of the right to continue group coverage or convert to individual coverage and the payment amounts required for either continued or converted coverage including the manner, place and time in which the payments shall be made. This notice shall be given not more than 5 days after the employer receives notice to terminate coverage. The payment amount for continued group coverage may not exceed the group rate in effect for a group member, including an employer's contribution, if any, for a group policy as defined in sub. (1) (c) 1. or 1m. or the equivalent value of the monthly contribution of a group member to a group policy as defined in sub. (1) (c) 2. or the equivalent value of the monthly premium for franchise insurance as defined in sub. (1) (c) 3. The premium for converted coverage shall be determined in accordance with the insurer's table of premium rates applicable to the age and class of risks of each person to be covered under that policy and to the type and amount of coverage provided. The notice may be sent to the terminated insured's home address as shown on the records of the employer.
(3)
(a) If the terminated insured or, with respect to a minor, the parent or guardian of the terminated insured, elects to continue group coverage and tenders to the employer the amount required within 30 days after receiving notice under sub. (2) (d), coverage of the terminated insured and, if the terminated insured is eligible for continued coverage under sub. (2) (b) 2., coverage of the covered spouse and dependents of the terminated insured shall continue without interruption and may not terminate unless one of the following occurs:
1. The terminated insured establishes residence outside this state.
2. The terminated insured fails to make timely payment of a required premium amount.
3. The terminated insured is eligible for continued coverage under sub. (2) (b) 1. and the group member through whom the former spouse originally obtained coverage is no longer eligible for coverage by the group policy.
4. The terminated insured becomes eligible for similar coverage under another group policy.
(b) If the coverage of the terminated insured is terminated under par. (a) 3. and the group member through whom the terminated insured originally obtained coverage becomes eligible for coverage by a replacement group policy providing coverage to the same group, the former spouse shall have the right to coverage by the replacement group policy as provided in this subsection.
(c) If the right of the terminated insured to continue group policy coverage is terminated under par. (a) 3. and the group member does not become eligible for coverage by a replacement group policy, the terminated insured has the right to convert to individual coverage under sub. (4), unless sub. (4) (d) applies.
(d) If the right of the terminated insured to continue group policy coverage is terminated under par. (a) 1. the terminated insured, and a spouse or dependent of the terminated insured, if the terminated insured was eligible for continued group coverage under sub. (2) (b) 2. and the spouse or dependent was covered under the group policy, have the right to convert to individual coverage under sub. (4), unless sub. (4) (d) applies.
(e) This subsection does not require coverage of expenses which are covered by medicare.
(4)
(a) A terminated insured who elects conversion coverage under sub. (2) (b) or (3) (c) or (d), the spouse or dependent of such a terminated insured, if the terminated insured is eligible under sub. (2) (b) 2. and the spouse or dependent was covered under the group policy, and a terminated insured eligible under sub. (9) and his or her dependents are entitled to have the insurer issue to them, without evidence of insurability, individual coverage reasonably similar to the terminated coverage under the group policy or individual policy. Any probationary or waiting periods required by such individual coverage shall be considered as being met to the extent such limitations have been met under the prior group policy or individual policy.
(b) The commissioner shall promulgate, by rule, 3 plans of individual coverage varying in degree of covered benefits to be offered as individual conversion policies. The insurer provides reasonably similar individual coverage if a person is offered his or her choice of the plans promulgated by the commissioner or is offered a high limit comprehensive plan of benefits regularly provided by the insurer for conversions and approved for this purpose by the commissioner. This paragraph does not apply if the policy being converted is a long-term care insurance policy.
(bm) The commissioner shall specify, by rule, the minimum standards that an individual conversion policy must satisfy if the policy being converted is a long-term care insurance policy. An insurer provides reasonably similar individual coverage to a person converting a long-term care insurance policy if the person is offered an individual conversion policy that complies with the rules promulgated under this paragraph.
(c) If the first premium for conversion coverage is tendered to the insurer within 30 days after the notice of termination of group coverage, the individual conversion policy shall be issued with an effective date of the day following the termination of group or individual coverage.
(d) This subsection does not require individual coverage to be offered by an insurer offering group policies only. This subsection does not require an insurer to issue an individual conversion policy covering a terminated insured or his or her spouse or dependent if benefits provided or available to the covered person under subds. 1. to 3., together with the converted policy's benefits, would result in overinsurance according to the insurer's standards for overinsurance, and these standards have been filed with and approved by the commissioner prior to use:
1. Similar benefits under another individual policy for which the terminated insured, spouse or dependent is eligible.
2. Similar benefits under a group policy for which the terminated insured, spouse or dependent is eligible.
3. Similar benefits for which the terminated insured, spouse or dependent is eligible by reason of any state or federal law.
(5) A notification of the group continuation and individual conversion privileges shall be included in each certificate of coverage for a group policy as defined in sub. (1) (c) 1., 1m. or 3. and in any evidence of coverage provided by a group policy as defined in sub. (1) (c) 2.
(6) If the terminated insured elects to continue group coverage as provided in this section, the insurer may require conversion to individual coverage by the terminated insured and his or her spouse and dependents 18 months after the terminated insured elects the group coverage except as provided in ss. 103.10 (9) (d) and 103.11 (9) (d). The conditions, rights and procedures governing conversion under sub. (4) (a) apply to this conversion.
(8) Premium payments for continued group coverage required under this section shall be paid to the employer. The employer shall collect, and the insurer shall bill the employer for, those premiums. The insurer shall charge the claims experience of individuals covered under continued group coverage against the claims experience of the employer. An insurer is not required to issue a new certificate of insurance to an individual obtaining continued group coverage under this section.
(9)
(a) No individual policy which provides coverage to the spouse of the insured may contain a provision for termination of coverage for the spouse solely as a result of a break in their marital relationship except by reason of the entry of a judgment of divorce or annulment of their marriage.
(b) Every individual policy which contains a provision for the termination of coverage of the spouse of the insured upon divorce or annulment shall contain a provision to the effect that upon divorce or annulment the former spouse has the right to obtain individual coverage under sub. (4) and that coverage of the former spouse shall continue until he or she is notified of that right in accordance with par. (c) if the premium for the coverage continues to be paid by or on behalf of the former spouse. This individual coverage shall provide to the former spouse the option to include dependent children previously covered.
(c) When the insurer is notified that the coverage of a spouse may be terminated because of a divorce or annulment, the insurer shall provide the former spouse written notification of the right to obtain individual coverage under sub. (4), the premium amounts required and the manner, place and time in which premiums may be paid. This notice shall be given not less than 30 days before the former spouse's coverage would otherwise terminate. The premium shall be determined in accordance with the insurer's table of premium rates applicable to the age and class of risk of every person to be covered and to the type and amount of coverage provided. If the former spouse tenders the first monthly premium to the insurer within 30 days after the notice provided by this paragraph, sub. (4) shall apply and the former spouse shall receive individual coverage commencing immediately upon termination of his or her coverage under the insured's policy.
(10)
(a) No group policy or individual policy which provides coverage to dependent children of the group member or insured may deny eligibility for coverage to any child, or set a premium for any child which is different from that which is set for other dependent children, based solely on any of the following:
1. The fact that the child does not reside with the group member or insured or is dependent on another parent rather than the group member or insured.
2. The proportion of the child's support provided by the group member or insured.
3. The fact that the group member or insured does not claim the child as an exemption for federal income tax purposes under 26 USC 151 (c), or as an exemption for state income tax purposes under s. 71.07 (8) (b) or under the laws of another state, if a court order under s. 767.513 or the laws of another state assigns responsibility for the child's health care expenses to the group member or insured.
4. The fact that the child is a nonmarital child.
5. The fact that the child resides outside the insurer's geographical service area.
(am) If a court orders an individual to provide coverage for health care expenses for a child of the individual and the individual is eligible for family coverage under a group policy or individual policy, the insurer shall do all of the following:
1. Provide family coverage under the group policy or individual policy for the individual's child, if eligible for coverage, without regard to any enrollment period restrictions that may apply under the policy.
2. Provide family coverage under the group policy or individual policy for the individual's child, if eligible for coverage, upon application by the individual, the child's other parent, the department of children and families or the county child support agency under s. 59.53 (5).
3. After the child is covered under the group policy or individual policy, and as long as the individual is eligible for family coverage under the policy, continue to provide coverage for the child unless the insurer receives satisfactory written evidence that the court order is no longer in effect or that the child has coverage under another group policy or individual policy that provides comparable health care coverage.
(b) Paragraphs (a) and (am) do not prohibit an insurer from determining the eligibility of a group member's or insured's child for coverage under the group policy or individual policy, or the premium for that coverage, based on factors that are not prohibited by par. (a) 1. to 5. and that the insurer applies generally to determine the eligibility of children for coverage, and the premium for coverage, under the group policy or individual policy.
(bf) If an insurer provides coverage under a group policy or an individual policy for a child of a group member or an insured who is not the custodial parent of the child, the insurer shall do all of the following:
1. Provide to the custodial parent of the child information related to the child's enrollment.
2. Permit the custodial parent of the child, a health care provider that provides services to the child or the department of health services to submit claims for covered services without the approval of the parent who is the group member or insured.
3. Pay claims directly to the health care provider, the custodial parent of the child or the department of health services, as appropriate.
(c) This subsection applies to any group policy that would otherwise be exempt under s. 600.01 (1) (b) 3. if at least 25 of the certificate holders or insureds are residents of this state.
(11)
(a) Notwithstanding subs. (2) to (10), the commissioner may promulgate rules establishing standards requiring insurers to provide continuation of coverage for any individual covered at any time under a group policy who is a terminated insured or an eligible individual under any federal program that provides for a federal premium subsidy for individuals covered under continuation of coverage under a group policy, including rules governing election or extension of election periods, notice, rates, premiums, premium payment, application of preexisting condition exclusions, election of alternative coverage, and status as an eligible individual, as defined in s. 149.10 (2t), 2011 stats.
(b) The commissioner may promulgate the rules under par. (a) as emergency rules under s. 227.24. Notwithstanding s. 227.24 (1) (c), emergency rules promulgated under this paragraph may remain in effect for one year and may be extended under s. 227.24 (2). Notwithstanding s. 227.24 (1) (a) and (3), the commissioner is not required to provide evidence that promulgating a rule under this paragraph as an emergency rule is necessary for the preservation of the public peace, health, safety, or welfare and is not required to provide a finding of emergency for a rule promulgated under this paragraph.
History: 1979 c. 285, 355; 1981 c. 41; 1983 a. 27, 274; 1985 a. 29; 1987 a. 287, 413; 1989 a. 31; 1993 a. 481; 1995 a. 27 s. 9126 (19); 1995 a. 201; 1997 a. 27, 191, 237; 1999 a. 9; 2005 a. 443 s. 265; 2007 a. 20 ss. 3689, 9121 (6) (a); 2009 a. 342; 2013 a. 20; 2015 a. 345; 2017 a. 366.
Cross-reference: See s. 49.45 (20) concerning exemption from continuation of group coverage.
The federal employee retirement income security act (ERISA) preempts any state law that relates to employee benefit plans. General Split Corp. v. Mitchell, 523 F. Supp. 427 (1981).
Wisconsin health insurance continuation/conversion law. Michal, WBB February 1982.