Short-Term Limited Duration Insurance—Guidance for Compliance Filings; Notice 2018-08—Revised
[48 Pa.B. 7284]
[Saturday, November 17, 2018]
On August 3, 2018, the Internal Revenue Service, Department of the Treasury; Employee Benefits Security Administration, United States Department of Labor; and Centers for Medicare & Medicaid Services, United States Department of Health and Human Services issued a final rule ''amend[ing] the definition of short-term, limited-duration insurance for purposes of its exclusion from the definition of individual health insurance coverage.''1
The 2018 STLDI Rule became effective October 2, 2018, and requires that any short-term limited-duration insurance (STLDI) policy issued on or after that date display specified notice language. Under the act of December 22, 2011 (P.L. 614, No. 134) (Act 134)2 , policy forms issued in this Commonwealth are required to be filed with the Insurance Department (Department) prior to use, unless exempted from form filing by the Commissioner.3 Because no form for STLDI currently approved and in use prior to October 2, 2018, contained the notice language required by the 2018 STLDI Rule, all STLDI forms intended for use on or after October 2, 2018, must be filed with the Department, ''no less than 45 days, or a shorter period of time as the Department may establish, prior to their effective dates.''4
Therefore, in Notice 2018-08, published at 48 Pa.B. 5580 (September 1, 2018), the Department provides guidance for STLDI forms that have been previously approved by the Department and are compliant with the pre-October 2, 2018, Federal definition of STLDI, for which there is no change to the form other than the addition of the requisite notice language. The pre-October 2, 2018, Federal definition of STLDI specifies that the policy ''has an expiration date specified in the contract (taking into account any extensions that may be elected by the policyholder with or without the issuer's consent) that is less than 3 months after the original effective date of the contract.''5 Thus, a ''pre-October 2, 2018 compliant STLDI form'' is a previously approved policy form that has a maximum duration of less than 3 months and is nonrenewable.
If an insurance entity (insurer) seeks to continue marketing and issuing, on or after October 2, 2018, a pre-October 2, 2018, compliant STLDI form, and is not making any changes other than as necessary to add the notice language required by the 2018 STLDI Rule, the policy form will be exempt from the 45-day prior approval filing requirement of Act 134 if the insurer files with the Department the policy form with a Certification executed by an authorized representative of the insurer substantially identical to the Certification form as follows as Attachment A. Attachment A is also available on the Department's web site at www.insurance.pa.gov.
This notice is revised to specifically include group STLDI forms. The Department is aware that certain insurers may seek to market and issue insurance in this Commonwealth, including STLDI, directly to in-state groups or through out-of-state association health plans and may consider that coverage as large group coverage not currently subject to form filing with the Department. By separate notice, the Department has laid out current and prospective form filing requirements for STLDI. By this notice, the Department confirms that the safe harbor previously set forth for pre-October 2, 2018, compliant STLDI forms is applicable to group STLDI forms just as it is for individual STLDI forms.
Policy forms, whether for individual or group coverage, that are not pre-October 2, 2018, compliant STLDI forms, or that are currently in use but may not have been previously approved or for which the insurer is making changes beyond merely those necessary to add the notice language required by the 2018 STLDI Rule, must comply with the filing requirements of Act 134 and the form filing requirements set forth in Notice 2018-10.
Finally, although the pre-October 2, 2018, compliant STLDI forms subject to this notice may have been previously approved by the Department for use on or after October 2, 2018, those forms, like all STLDI forms used in this Commonwealth, remain subject to, and must comply in all respects with, the Commonwealth's insurance laws and regulations, and the Department retains its ability to take enforcement actions and seek any available remedy for noncompliant forms.
Questions regarding this notice may be directed to Tracie Gray, Director, Bureau of Accident and Health, Insurance Department, 1311 Strawberry Square, Harrisburg, PA 17120, RAfirstname.lastname@example.org.
JESSICA K. ALTMAN,
PENNSYLVANIA ISSUER SHORT-TERM LIMITED-DURATION INSURANCE CERTIFICATION FORM
Name of Insurer:
Policy Form #:
I hereby certify that the Short-Term Limited-Duration Insurance (STLDI) policy form referenced above and attached hereto:
(1) Was approved by the Pennsylvania Insurance Department on ______ [date];
(2) Complies with the federal definition of STLDI in effect prior to October 2, 2018, being a form that ''has an expiration date specified in the contract (taking into account any extensions that may be elected by the policyholder with or without the issuer's consent) that is less than 3 months after the original effective date of the contract'' (45 Fed. Reg. § 144.103, as promulgated at 81 Fed. Reg. 75316 et seq., October 31, 2016) that is, has a maximum duration of less than 3 months and is non-renewable;
(2) For which no change is being made to the form other than as necessary to add the notice language required by the 2018 STLDI Rule effective October 2, 2018, 83 Fed. Reg. 38212 et seq. (August 3, 2018).
The information set forth in this Certification, to the best of my knowledge, information and belief, is true, correct, and complete.
______ _________________ Date Name of Authorized Representative of the Insurer _________________
Signature of Authorized Representative of the Insurer
[Pa.B. Doc. No. 18-1808. Filed for public inspection November 16, 2018, 9:00 a.m.]
1 Short-Term Limited-Duration Insurance Final Rule, 83 FR 38212 (August 3, 2018) (2018 STLDI Rule).
2 40 P.S. §§ 3801.301 et seq.
3 40 P.S. § 3801.303(a) and (b); see also Notice 2016-01—Revised 46 Pa.B. 2744 (May 28, 2016).
4 40 P.S. § 3801.303(a).
5 45 CFR § 144.103 (as promulgated at 81 FR 75316 (October 31, 2016).
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