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CHAPTER 58-40

NONPROFIT HOSPITAL SERVICE PLANS

58-40-1      Incorporators, number required--Purpose of incorporation.
58-40-2      Articles of incorporation and amendments--Approval by director--Filing with secretary of state.
58-40-3      Members and directors.
58-40-4      Board of directors--Minimum number--Qualifications--Selection--Term of office.
58-40-5      License to issue contracts required--Violation as misdemeanor.
58-40-6      Application for license--Form and contents--Documents accompanying.
58-40-7      Issuance of license--Matters considered by director.
58-40-8      Contracts with subscribers.
58-40-9      Hospital service defined--Unauthorized practice of healing or practice of medicine.
58-40-10      Contracts with subscribers--Required provisions.
58-40-10.1      Coverage for inpatient treatment of alcoholism to be offered in individual or group plans.
58-40-10.2      Benefits provided under alcoholism coverage--Maximum treatment periods permitted.
58-40-10.3      Plans not within alcoholism coverage requirement.
58-40-10.4      Individual policy required for covered spouse of insured--Eligibility--Coverage--Waiting periods.
58-40-10.5      Conversion privileges of insured's spouse upon divorce.
58-40-10.6      Coordination, integration, or lessening of benefits restricted.
58-40-10.7 to 58-40-10.9.      Repealed.
58-40-10.10      Exclusion of benefits for injury while under the influence of alcohol or drugs prohibited--Exception for sickness or injury caused in commission of felony.
58-40-11      Care provided by noncontracting hospitals--Contracting hospital unavailable.
58-40-12      Rates charged for services--Approval by director.
58-40-12.1      Notice required for rate increase by hospital service plan corporation.
58-40-13      Expenses of acquisition and administration--Control by director.
58-40-14      Permitted investments.
58-40-15      Foreign corporation--Transaction of business in state.
58-40-16      Annual statement of financial condition--Filing--Verification--Form and contents.
58-40-17      Investigation and examination by director--Cost borne by corporation.
58-40-18      Exemption from other insurance laws--Exceptions.
58-40-19      Citation of chapter.
58-40-20      Grandfathered service and indemnity-type contracts required to cover low-dose mammography--Extent of coverage.
58-40-20.1      Service and indemnity-type contracts required to cover occult breast cancer screening.
58-40-22      Formation of voluntary health insurance purchasing organizations.
58-40-23      Membership of voluntary health insurance purchasing organizations.
58-40-24      Purchasing organization's responsibility for negotiating terms and conditions.
58-40-25      Purchasing organization's notice of premium charge.


58-40-26      Additional chapters applicable to purchasing organization.
58-40-27      Approval of purchasing organization by Division of Insurance.
58-40-28      Premiums held in trust by purchasing organization.
58-40-29      Rates for group health insurance issued to purchasing organizations.
58-40-30      Reasonable participation requirements for group members of purchasing organizations.
58-40-31      Purchasing organizations exempt from antitrust provisions.
58-40-32      Promulgation of rules for purchasing organizations.
58-40-33      Minimum loss ratio for small employer health benefit plans.
58-40-34      Minimum inpatient care coverage following delivery.
58-40-35      Shorter hospital stay permitted--Follow-up visit within forty-eight hours required.
58-40-36      Notice to subscribers--Disclosure.
58-40-37      Health insurance policies to provide coverage for biologically-based mental illnesses.
58-40-38      Application--Exemptions.
58-40-39      Policies to provide coverage for diabetes supplies, equipment, and education--Exceptions--Conditions and limitations.
58-40-40      Diabetes coverage not required of certain plans and policies.
58-40-41      Contracts to provide coverage for prostate cancer screening.


     58-40-1.   Incorporators, number required--Purpose of incorporation. Five or more natural persons of full age and of either sex, all of whom are residents of this state and citizens of the United States, may form, under the provisions of the laws of this state relating to benevolent corporations, so far as those provisions are applicable and are not inconsistent with the provisions of this chapter, a nonprofit hospital service plan corporation for the purpose of establishing and operating a nonprofit hospital service plan, whereby hospital service may be provided by one or more hospitals with which such corporation has a contract for such purpose, to such of the public as become subscribers to said corporation under a contract which entitles each subscriber to certain hospital care.
     Such corporation shall be governed by this chapter and shall be subject to regulation and supervision by the director as hereinafter provided.

Source: SL 1966, ch 111, ch 21, § 14.


     58-40-2.   Articles of incorporation and amendments--Approval by director--Filing with secretary of state. The articles of incorporation of every hospital service plan corporation, and amendments thereto, shall be submitted to the director, whose approval thereof shall be endorsed thereon before the same are filed with the secretary of state; provided, however, that if the articles of incorporation of any such corporation shall have been filed with the secretary of state prior to July 1, 1966, the approval thereof by the director shall be evidenced by a separate instrument in writing filed with the secretary of state.

Source: SL 1966, ch 111, ch 21, § 15.


     58-40-3.   Members and directors. A hospital plan corporation shall consist of a board of directors and of such members, grouped in such classes, as the bylaws of the corporation shall provide.

Source: SL 1966, ch 111, ch 21, § 16.


     58-40-4.   Board of directors--Minimum number--Qualifications--Selection--Term of office. The business of a hospital service plan corporation shall be managed by a board of directors of at least five persons possessing the same general qualifications as the incorporators and they shall be selected, and their number fixed, in the manner set out in the bylaws for three-year terms. The directors of such corporation must at all times include representatives of the following groups: administrators, directors, trustees, or members of the clinical staff of hospitals which have contracted or may contract with such corporation to render to its subscribers hospital service; physicians and surgeons regularly licensed to practice in this state; and the general public exclusive of hospital representatives and physicians.

Source: SL 1966, ch 111, ch 21, § 16.


     58-40-5.   License to issue contracts required--Violation as misdemeanor. A corporation subject to the provisions of this chapter may issue contracts only when the director has by formal certificate or license authorized it to do so. Violation of this section is a Class 2 misdemeanor.

Source: SL 1966, ch 111, ch 21, § 18; SL 1978, ch 359, § 2.


     58-40-6.   Application for license--Form and contents--Documents accompanying. Application for the certificate of authority or license required by § 58-40-5 shall be made on forms to be approved by the director, containing such information as he shall deem necessary. Each application for such certificate or license shall be accompanied by copies of the following documents:
             (1)      Certified copy of its charter or certificate of incorporation;
             (2)      Bylaws;
             (3)      Proposed contracts between the corporation and participating hospitals showing terms under which hospital service is to be furnished to subscribers;
             (4)      Contracts to be issued to subscribers showing the benefits to which they are entitled;
             (5)      A table of the rates to be charged to the subscribers;
             (6)      Financial statement of the corporation including the amounts of contribution paid or agreed to be paid to the corporation for working capital and the names of each contributor and the terms of each contribution.

Source: SL 1966, ch 111, ch 21, § 18.


     58-40-7.   Issuance of license--Matters considered by director. The director shall issue a certificate of authority or license upon being satisfied on the following points:
             (1)      That the applicant is established as a bona fide nonprofit hospital service corporation;
             (2)      That the contracts between the applicant and the participating hospitals obligate each hospital to render service to which each subscriber may be entitled under the contract issued to the subscribers;
             (3)      That the rates to be charged and benefits to be provided are fair and reasonable;
             (4)      That amounts provided as working capital of the corporation are repayable only out of earned income over and above operating expenses, hospital expenses, and such reserve as the director may deem adequate;
             (5)      That the amount of money actually available for working capital be sufficient to carry all acquisition costs and operating expenses for a reasonable period of time from the date of the issuance of the certificate.

Source: SL 1966, ch 111, ch 21, § 18.


     58-40-8.   Contracts with subscribers. Any hospital service plan corporation organized under the provisions of this chapter may enter into contracts for the rendering of hospital service to any of its subscribers with licensed hospitals maintained and operated by any corporation, association, individual or any political subdivision of this state.

Source: SL 1966, ch 111, ch 21, § 17.


     58-40-9.   Hospital service determined--Unauthorized practice of healing or practice of medicine. Hospital service is meant to include the usual and customary service furnished by hospitals but nothing in this chapter shall authorize any person, association or corporation to engage, in any manner, in the practice of healing, or the practice of medicine, as defined by law.

Source: SL 1966, ch 111, ch 21, § 17.


     58-40-10.   Contracts with subscribers--Required provisions. A hospital service plan corporation may enter into contracts for the rendering of hospital service to the subscribers only with hospitals duly conforming with the laws of the State of South Dakota, and approved for participation by the director; provided that the hospital service plan operated by such corporation shall also provide for hospital service to subscribers in the hospital chosen by the patient without regard to whether such hospital is a contracting hospital, and subject to the approval of the director, and at the same rate as provided in the contract of the corporation for care in other than contracting hospitals in case of emergency or expediency, and subject to the approval of the director.

Source: SL 1966, ch 111, ch 21, § 17.


     58-40-10.1.   Coverage for inpatient treatment of alcoholism to be offered in individual or group plans. Any nonprofit hospital service plan that delivers or issues for delivery in this state service or indemnity type contracts to any individual subscriber or group shall offer, in writing, to include in such contracts issued or renewed on or after July 1, 1979, coverage for the inpatient treatment of alcoholism in licensed hospitals and residential primary treatment facilities approved by the State of South Dakota which are carrying out an approved program pursuant to diagnosis and recommendation of a doctor of medicine. When coverage for inpatient treatment of alcoholism is included in any policy or contract, such coverage shall include treatment at any South Dakota approved inpatient alcoholism treatment facility.

Source: SL 1979, ch 344, § 9.


     58-40-10.2.   Benefits provided under alcoholism coverage--Maximum treatment periods permitted. The alcoholism coverage to be offered in writing shall provide benefits on the same basis as benefits provided for the treatment of other sicknesses covered under the contract; provided, however, that the coverage by the service corporation need not exceed thirty days' care in any six-month period, and further provided that the total days' care per recipient need not exceed ninety days during the life of the contract.

Source: SL 1979, ch 344, § 10.


     58-40-10.3.   Plans not within alcoholism coverage requirement. Sections 58-40-10.1 and 58-40-10.2 shall not apply to group major-medical service plans or accident only, or limited or specified disease plans.

Source: SL 1979, ch 344, § 11.


     58-40-10.4.   Individual policy required for covered spouse of insured--Eligibility--Coverage--Waiting periods. No accident or health insurance policy providing coverage of hospital or medical expense which in addition to covering the insured also provides coverage to the spouse of the insured shall be issued without a provision that provides that upon eligibility for medicare or social security disability benefits by one spouse the other spouse shall be entitled to have issued to him or her, without evidence of insurability, upon application to the company within sixty days following the eligibility, and upon payment of the appropriate premium, an individual policy of accident or health insurance. Such policy shall provide the coverage then being issued by the insurer which is most nearly similar to the existing coverages. This obligation can be met by continuation of coverage for spouse under existing policy at the appropriate premium. Any and all probationary or waiting periods set forth in such policy shall be considered as being met to the extent coverage was in force under the prior policy.

Source: SL 1979, ch 343.


     58-40-10.5.   Conversion privileges of insured's spouse upon divorce. No accident or health insurance policy providing coverage of hospital or medical expense which in addition to covering the insured also provides coverage to the spouse of the insured shall be issued without a provision that provides that upon divorce of the insured and the insured's spouse, the spouse is entitled to have issued to him or her, without evidence of insurability, upon application to the company within thirty days following the eligibility, and upon payment of the appropriate premium, an individual policy of accident or health insurance. Such policy shall provide the coverage then being issued by the insurer which is most nearly similar to the existing coverages. This obligation can be met by continuation of coverage for spouse under existing policy at the appropriate premium. Any and all probationary or waiting periods set forth in such policy shall be considered as being met to the extent coverage was in force under the prior policy.

Source: SL 1980, ch 354.


     58-40-10.6.   Coordination, integration, or lessening of benefits restricted. No group health insurance policy or group subscriber contract issued by a nonprofit corporation delivered or issued for delivery in this state may contain a provision requiring coordination of benefits, integration of benefits, or lessening of policy benefits because of the existence or availability of coverage under an individual health insurance policy or individual subscriber contract issued by a nonprofit corporation.
     An individual health insurance policy or individual subscriber contract issued by a nonprofit corporation may be rescinded within its contestable period for material misrepresentation if the full premium is refunded.
     This section applies to policies issued or renewed after July 1, 1981.

Source: SL 1981, ch 362, §§ 1, 2.


     58-40-10.7 to 58-40-10.9.   Repealed by SL 2001, ch 274, §§ 7 to 9


     58-40-10.10.   Exclusion of benefits for injury while under the influence of alcohol or drugs prohibited--Exception for sickness or injury caused in commission of felony. A service or indemnity-type contract issued by a nonprofit hospital service plan or organization that is delivered, issued for delivery, or renewed in this state may not exclude the payment of benefits for injuries sustained by an insured person because the insured was under the influence of alcohol or drugs, as defined by § 32-23-1.
     Nothing in this section precludes a hospital or medical service plan from excluding coverage for an insured for any sickness or injury caused in the commission of a felony.

Source: SL 1997, ch 290, §§ 5, 7.


     58-40-11.   Care provided by noncontracting hospitals--Contracting hospital unavailable. All contracts issued by a hospital service plan corporation to the subscribers shall constitute direct obligations of the corporation and of the hospitals with which such corporation has contracted for hospital service. If at any time that the certificate holder is entitled to hospitalization no hospital care is available, said corporation shall provide care outside of hospitals to such extent as the certificate holder is entitled to under the certificate and at the same rate per day as is provided for care in nonmember hospitals, but not to exceed the limits of the certificate.

Source: SL 1966, ch 111, ch 21, § 17.


     58-40-12.   Rates charged for services--Approval by director. The rates charged to the subscribers for hospital service and the rates of payment by a hospital service plan corporation to the contracting hospitals at all times shall be subject to the approval of the director.

Source: SL 1966, ch 111, ch 21, § 17.


     58-40-12.1.   Notice required for rate increase by hospital service plan corporation. Forty-five days before a contract rate increase is effective, the hospital service plan corporation shall notify the group employer or association in writing that the contract rate for the hospital service plan operated by the corporation will be increased.

Source: SL 1989, ch 434, § 3.


     58-40-13.   Expenses of acquisition and administration--Control by director. All acquisition and administrative expenses in connection with such hospital service corporation shall at all times be subject to control by the director.

Source: SL 1966, ch 111, ch 21, § 21.


     58-40-14.   Permitted investments. The funds of any corporation subject to the provisions of this chapter shall be invested only in securities permitted by the laws of this state for the investment of assets of life insurers.

Source: SL 1966, ch 111, ch 21, § 22.


     58-40-15.   Foreign corporation--Transaction of business in state. A nonprofit hospital service plan corporation organized under the laws of another state or any territory may with the approval of the director and under the rules as may be promulgated, consistent with the provisions of this chapter, transact and carry on its business in this state; provided it shall first file with the director:
             (1)      A duly certified copy of its charter or articles of incorporation;
             (2)      A verified statement of the condition of its affairs for the next preceding calendar year;
             (3)      A duly certified and authenticated appointment in writing of the director as its true and lawful agent in and for this state, upon whom all lawful process in any action or proceeding against the insurer may be served with the same effect as if a domestic insurer served in this state, such appointment to stipulate that any lawful process against such insurer served on such agent shall be of the same legal force and validity as if served on the insurer, and that the authority shall continue in force as long as any liability remains outstanding against such insurer in this state. Such service may be made on the director in the manner provided by statute for service of process, or may be made by filing a copy of such process in the office of the director. Whenever any such process is served upon the director, he shall forthwith forward a copy thereof by mail, postpaid, directed to the secretary of the insurer; or in case of insurers in foreign countries to the resident manager thereof, in this country, and to its general agent in this state; and
             (4)      Evidence satisfactory to the director that such corporation has existing contracts for the rendering of hospital service to the subscribers with at least twenty hospitals located within the State of South Dakota, approved for participation by the director.
     Any such foreign corporation shall be subject to the laws of this state pertaining to reciprocal relations imposed on foreign insurers transacting or doing business in this state.

Source: SL 1966, ch 111, ch 21, § 23; SL 1986, ch 22, § 42.


     58-40-16.   Annual statement of financial condition--Filing--Verification--Form and contents. Every hospital service plan corporation shall annually on or before the first day of March file with the director a statement verified by at least two of the principal officers of said corporation showing its condition on the thirty-first day of the preceding December; the statement shall be in such form and shall contain such matters as the director shall prescribe.

Source: SL 1966, ch 111, ch 21, § 19.


     58-40-17.   Investigation and examination by director--Cost borne by corporation. The director may investigate and examine the books and records of any hospital service plan corporation, and may summon and examine under oath its officers, representatives, insurance producers, employees, or other persons in relation to the affairs, transactions, and conditions of the corporation.
     The director shall conduct an examination of each corporation at least every five years pursuant to chapter 58-3, and the cost of the regular or other special examinations shall be borne by the corporation.

Source: SL 1966, ch 111, ch 21, § 20; SL 1994, ch 389, § 3; SL 2001, ch 286, § 224.


     58-40-18.   Exemption from other insurance laws--Exceptions. A hospital service plan corporation is exempt from all provisions of the insurance laws of this state other than in this chapter. However, the corporation is subject to the provisions of this title on matters of hearings, appeals, mergers, dissolutions, licensure of insurance producers, and procedures on such matters. The corporation is also subject to §§ 58-4-39 to 58-4-42, inclusive; 58-6-75; 58-17-17 and 58-17-19, for nongroup policies only; §§ 58-30-124 to 58-30-139, inclusive; to the fees and taxation as insurers covered by this title; and to chapters 58-3, 58-5A, 58-14, 58-18B, 58-26, 58-27, 58-29B, 58-29D, 58-33, 58-43, and 58-44.

Source: SL 1966, ch 111, ch 21, § 14; SL 1981, ch 367, § 2; SL 1982, ch 367, § 2; SL 1991, ch 408, § 3; SL 1994, ch 386, § 3; SL 2001, ch 286, § 225.


     58-40-19.   Citation of chapter. This chapter may be cited as the Hospital Service Plan Law.

Source: SL 1966, ch 111, ch 21, § 13.


     58-40-20.   Grandfathered service and indemnity-type contracts required to cover low-dose mammography--Extent of coverage. Each service or indemnity-type contract issued by a nonprofit hospital service plan corporation that covers a female and that is delivered, issued for delivery, or renewed in this state, except for a contract that provides coverage for specified disease or other limited benefit coverage, shall provide coverage for screening by low-dose mammography for the presence of occult breast cancer that is subject to the same dollar limits, deductibles, and coinsurance factors as for other radiological examinations. Coverage for the screening shall be provided as follows: ages thirty-five to thirty-nine, one baseline mammography; ages forty to forty-nine, a mammography every other year; and age fifty and older, a mammography every year.
     As used in this section, "low-dose mammography" means the X ray examination of the breast using equipment dedicated specifically for mammography, including the X ray tube, filter, compression device, screens, films, and cassettes, with an average radiation exposure delivery of less than one rad midbreast, with two views for each breast and with interpretation by a qualified radiologist.
     The provisions of this section apply only to grandfathered plans pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. §§ 54 and 602, 29 C.F.R. § 2590, and 45 C.F.R. § 147. (SL 2011, ch 216, § 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.")

Source: SL 1990, ch 397, §§ 1, 6; SL 1991, ch 400, § 6; SL 2011, ch 216, § 11.


     58-40-20.1.   Service and indemnity-type contracts required to cover occult breast cancer screening. Each service or indemnity-type contract issued by a nonprofit hospital service plan corporation that covers a female and that is delivered, issued for delivery, or renewed in this state, except for a contract that provides coverage for specified disease or other limited benefit coverage, shall provide coverage for screening for the presence of occult breast cancer.
     The provisions of this section apply only to plans that are not grandfathered pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. §§ 54 and 602, 29 C.F.R. § 2590, and 45 C.F.R. § 147. (SL 2011, ch 216, § 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.")

Source: SL 2011, ch 216, § 16.


     58-40-21.   Coverage for phenylketonuria. Every service or indemnity-type contract issued by a nonprofit hospital service plan corporation that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall offer coverage for testing, diagnosis, and treatment of phenylketonuria including dietary management, formulas, case management, intake and screening, assessment, comprehensive care planning, and service referral.

Source: SL 1992, ch 348, § 5.


     58-40-22.   Formation of voluntary health insurance purchasing organizations. Notwithstanding the provisions of chapter 47-34, §§ 47-15-2, 47-22-4, and 47-14-2, any organization may form for the purposes of purchasing group health insurance on a voluntary basis. For purposes of §§ 58-40-22 to 58-40-32, inclusive, an organization means any nonprofit organization or nonprofit corporation formed under South Dakota law.

Source: SL 1994, ch 382, § 1.


     58-40-23.   Membership of voluntary health insurance purchasing organizations. Any organization may have a group health insurance policy issued to that organization on behalf of its members who would be insured under such policy. Members may join the organization, for the purpose of obtaining group health insurance, as individuals, employers, labor unions, associations, or substantially similar groups.

Source: SL 1994, ch 382, § 2.


     58-40-24.   Purchasing organization's responsibility for negotiating terms and conditions. The organization shall be responsible for negotiating the terms and conditions of insurance contracts, collection of premiums, and providing notice to members.

Source: SL 1994, ch 382, § 3.


     58-40-25.   Purchasing organization's notice of premium charge. The organization may provide not less than forty-five days advance notice of any benefit or premium change to its members.

Source: SL 1994, ch 382, § 4.


     58-40-26.   Additional chapters applicable to purchasing organization. Any organization is subject to all applicable provisions of chapter 58-3 and chapter 58-33.

Source: SL 1994, ch 382, § 5.


     58-40-27.   Approval of purchasing organization by Division of Insurance. Any organization shall, prior to its engaging in the business of insurance, obtain approval from the Division of Insurance. The division may deny approval or withdraw approval of an organization to engage in the business of insurance for any of the following reasons:
             (1)      Any of the grounds specified in § 58-6-8;
             (2)      Insufficient membership control of the organization;
             (3)      Unreasonable compensation to officers, directors, or employees of the organization;
             (4)      Misuse of premiums; or
             (5)      Refusal to be examined or to cooperate in an examination.

Source: SL 1994, ch 382, § 6.


     58-40-28.   Premiums held in trust by purchasing organization. The organization shall hold all premiums received in trust and promptly remit premiums to the person entitled thereto.

Source: SL 1994, ch 382, § 7.


     58-40-29.   Rates for group health insurance issued to purchasing organizations. Any insurer issuing group health insurance pursuant to §§ 58-40-22 to 58-40-32, inclusive, is subject to all of the provisions of chapter 58-18B relating to rates.

Source: SL 1994, ch 382, § 8.


     58-40-30.   Reasonable participation requirements for group members of purchasing organizations. An insurer may as a condition of offering coverage or continuing coverage require reasonable participation requirements of groups who become members of an organization.

Source: SL 1994, ch 382, § 9.


     58-40-31.   Purchasing organizations exempt from antitrust provisions. Any organization formed pursuant to §§ 58-40-22 to 58-40-32, inclusive, is exempt from the antitrust provisions under chapter 37-1.

Source: SL 1994, ch 382, § 10.


     58-40-32.   Promulgation of rules for purchasing organizations. The director may promulgate rules pursuant to chapter 1-26 to further the provisions of §§ 58-40-22 to 58-40-32, inclusive, and for purposes of carrying out the provisions of §§ 58-18-1 to 58-18-6, inclusive, and to ensure that group health insurance coverage is issued to eligible groups and that organizations are formed and operated to further the purpose of providing economical group health insurance for its members. The rules may include:
             (1)      Definition of terms;
             (2)      Criteria for determining groups, associations, organizations, and trusts and their eligibility for coverage;
             (3)      Criteria for determining substantially similar groups or for determining related industries;
             (4)      Application requirements and procedures;
             (5)      Reasonable compensation; and
             (6)      Organizational structure.

Source: SL 1994, ch 382, § 11.


     58-40-33.   Minimum loss ratio for small employer health benefit plans. Premium rates for individual health benefit plans shall produce a minimum lifetime loss ratio of not less than seventy-five percent. The director may promulgate rules pursuant to chapter 1-26 which modify the minimum loss ratio required based on the specific design of the product or other objective and pertinent criteria.

Source: SL 1994, ch 381, § 1.


     58-40-34.   Minimum inpatient care coverage following delivery. If a service or indemnity-type contract issued or renewed on or after July 1, 1996, by a nonprofit hospital service plan corporation provides maternity coverage, the contract shall provide coverage for a minimum of forty-eight hours of inpatient care following a vaginal delivery and a minimum of ninety-six hours of inpatient care following delivery by cesarean section for a mother and her newborn child in a health care facility licensed pursuant to chapter 34-12, except as otherwise provided in § 58-40-35. Any individual policy and any policy issued to employers with less than fifteen employees that provides coverage for complications of pregnancy, and does not provide other maternity benefits, is not required to comply with this section.

Source: SL 1996, ch 292, § 13; SL 1998, ch 290, § 5.


     58-40-35.   Shorter hospital stay permitted--Follow-up visit within forty-eight hours required. If the treating physician determines that the mother and the newborn meet medical criteria contained in Guidelines for Perinatal Care, Third Edition, of the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists as in effect on January 1, 1996, a service or indemnity-type contract issued by a nonprofit hospital service plan corporation may provide coverage for a shorter length of hospital inpatient stay for services related to maternity and newborn care than is required in § 58-40-34 if the coverage includes one follow-up visit in the first forty-eight hours after discharge to verify the condition of the mother and newborn.

Source: SL 1996, ch 292, § 14.


     58-40-36.   Notice to subscribers--Disclosure. The nonprofit hospital service plan corporation shall provide notice to subscribers regarding the coverage required by § 58-40-34 in accordance with rules adopted by the director of the Division of Insurance pursuant to chapter 1-26. The notice shall be in writing and prominently positioned in any literature or correspondence. The notice shall be transmitted to subscribers in the next mailing to subscribers, in the yearly informational packet sent to subscribers, or by January 1, 1997, whichever is earliest.

Source: SL 1996, ch 292, § 15.


     58-40-37.   Health insurance policies to provide coverage for biologically-based mental illnesses. Every service or indemnity-type contract issued by a nonprofit hospital service plan corporation that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide, in writing, coverage for the treatment and diagnosis of biologically-based mental illnesses with the same dollar limits, deductibles, coinsurance factors, and restrictions as for other covered illnesses.
     The term, biologically-based mental illness, means schizophrenia and other psychotic disorders, bipolar disorder, major depression, and obsessive-compulsive disorder.

Source: SL 1998, ch 291, § 5; SL 1999, ch 251, § 5.


     58-40-38.   Application--Exemptions. The provisions of § 58-40-37 do not apply to any plan, policy, or contract that provides coverage only for:
             (1)      Specified disease;
             (2)      Hospital indemnity;
             (3)      Fixed indemnity;
             (4)      Accident-only;
             (5)      Credit;
             (6)      Dental;
             (7)      Vision;
             (8)      Prescription drug;
             (9)      Medicare supplement;
             (10)      Long-term care;
             (11)      Disability income insurance;
             (12)      Coverage issued as a supplement to liability insurance;
             (13)      Workers' compensation or similar insurance;
             (14)      Automobile medical payment insurance; or
             (15)      Individual health benefit plans of six-months duration or less that are not renewable.

Source: SL 1998, ch 291, § 7.


     58-40-39.   Policies to provide coverage for diabetes supplies, equipment, and education--Exceptions--Conditions and limitations. Every service or indemnity-type contract issued by a nonprofit hospital service plan corporation delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide, in writing, coverage for equipment, supplies, and self-management training and education, including medical nutrition therapy, for treatment of persons diagnosed with diabetes if prescribed by a physician or other licensed health care provider legally authorized to prescribe such treatment. Medical nutrition therapy does not include any food items or nonprescription drugs.
     Coverage for medically necessary equipment and supplies shall include blood glucose monitors, blood glucose monitors for the legally blind, test strips for glucose monitors, urine testing strips, insulin, injection aids, lancets, lancet devices, syringes, insulin pumps and all supplies for the pump, insulin infusion devices, prescribed oral agents for controlling blood sugars, glucose agents, glucagon kits, insulin measurement and administration aids for the visually impaired, and other medical devices for treatment of diabetes.
     Diabetes self-management training and education shall be covered if: (a) the service is provided by a physician, nurse, dietitian, pharmacist, or other licensed health care provider who satisfies the current academic eligibility requirements of the National Certification Board for Diabetic Educators and has completed a course in diabetes education and training or has been certified as a diabetes educator; and (b) the training and education is based upon a diabetes program recognized by the American Diabetes Association or a diabetes program with a curriculum approved by the American Diabetes Association or the South Dakota Department of Health.
     Coverage of diabetes self-management training is limited to (a) persons who are newly diagnosed with diabetes or have received no prior diabetes education; (b) persons who require a change in current therapy; (c) persons who have a co-morbid condition such as heart disease or renal failure; or (d) persons whose diabetes condition is unstable. Under these circumstances, no more than two comprehensive education programs per lifetime and up to eight follow-up visits per year need be covered. Coverage is limited to the closest available qualified education program that provides the necessary management training to accomplish the prescribed treatment.
     The benefits provided in this section are subject to the same dollar limits, deductibles, coinsurance, and other restrictions established for all other benefits covered in the contract.

Source: SL 1999, ch 252, § 9.


     58-40-40.   Diabetes coverage not required of certain plans and policies. The provisions of § 58-40-39 do not apply to any plan, policy, or contract that provides coverage only for:
             (1)      Specified disease;
             (2)      Hospital indemnity;
             (3)      Fixed indemnity;
             (4)      Accident-only;
             (5)      Credit;
             (6)      Dental;
             (7)      Vision;
             (8)      Prescription drug;
             (9)      Medicare supplement;
             (10)      Long-term care;
             (11)      Disability income insurance;
             (12)      Coverage issued as a supplement to liability insurance;
             (13)      Workers' compensation or similar insurance;
             (14)      Automobile medical payment insurance;
             (15)      Individual health benefit plans of six-months duration or less that are not renewable; or
             (16)      Individual nonmajor medical insurance.

Source: SL 1999, ch 252, § 10.


     58-40-41.   Contracts to provide coverage for prostate cancer screening. Every service or indemnity-type contract issued by a nonprofit hospital service plan or organization that covers a male and that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide the following coverage for diagnostic screening for prostate cancer:
             (1)      An annual medically recognized diagnostic examination, including a digital rectal examination and a prostate-specific antigen test, as follows:
             (a)      For asymptomatic men aged fifty and over; and
             (b)      For men aged forty-five and over at high risk for prostate cancer; and
             (2)      For males of any age who have a prior history of prostate cancer, medically indicated diagnostic testing at intervals recommended by a physician, including the digital rectal examination, prostate-specific antigen test, and bone scan.

Source: SL 2001, ch 277, § 5.


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