DE| The Delaware Department of Insurance combined Bulletin, Domestic & Foreign Insurers No. 164 and Producer & Adjusters No. 40, explains new consumer protections and carrier obligations under Delaware Senate Bill 71 for Medicare Supplement (Medigap) policyholders, including a birthday-based special enrollment right, guaranteed issue rights when moving from Medicare Advantage to Original Medicare, and detailed rules on notification, rating, compliance, and enforcement.
Key Changes:
- SB 71 Key Provisions (including Birthday Rule): Establishes an annual Special Enrollment Period starting 30 days before and lasting at least 30 days after a Medigap policyholder’s birthday. During this period, policyholders have Guaranteed Issue rights to switch to a same-or-lesser-benefit Medigap plan with any carrier, without medical underwriting and ignoring “innovative” benefits when comparing benefits.
- Guaranteed Issue for MA to Original Medicare Transitions: Individuals moving from Medicare Advantage to Original Medicare during federal open enrollment periods may buy any Medigap policy available in Delaware on a Guaranteed Issue basis. Carriers may medically underwrite and apply pre-existing condition limitations, but they may not deny coverage during these transitions.
- Carrier Requirements (Notice and Applicability): Beginning January 1, carriers must notify eligible policyholders of their SB 71 rights at least 30 days but not more than 60 days before the Special Enrollment Period begins. Rules apply to current Delaware residents with Delaware-issued Medigap policies and to new Delaware residents with out-of-state policies once residency is known, but not to policyholders who moved out of Delaware or to certain State of Delaware Medicare-eligible retirees.
- Carrier Prohibitions Under Guaranteed Issue Rights: Carriers may not add new substandard rate-ups beyond those already approved, may not refuse to issue coverage for eligible transitions, and must use existing rates for new policyholders with changes only at renewal. Carriers are prohibited from creating separate books of business solely for Birthday Rule or Medicare Advantage transition enrollees.
- Permissible Carrier Actions: Carriers may medically underwrite and charge appropriate premiums for those moving from Medicare Advantage to Original Medicare with Medigap coverage, including asking medical questions. Even when underwriting and pricing, carriers must still provide coverage and cannot deny applications under the Guaranteed Issue protections.
- Rating Practices: Tobacco rating is allowed under both the Birthday Rule and Medicare Advantage transitions. New substandard ratings are not permitted, and all rating must comply with non‑discrimination standards.
- Compliance Expectations: Carriers must ensure marketing and sales materials clearly explain the new enrollment rights and reflect the Guaranteed Issue protections in rate filings and underwriting guidelines. Producers must be trained to advise clients correctly on SB 71 rights, and carriers must also follow existing unfair trade practice guidance in Bulletin Nos. 162 and 39.
- Enforcement: The Department will monitor market conduct and may take action for non‑compliance under, including suspension or revocation of licenses. Aministrative penalties, including fines under may be imposed; the bulletin is effective immediately and remains in force until changed.