CHAPTER 20:06:56
MINIMUM BENEFIT STANDARDS
Section
20:06:56:01 Definitions.
20:06:56:02 Covering essential health benefits.
20:06:56:03 Essential health benefit packages.
20:06:56:04 Substantially equal benefits.
20:06:56:05 Substituted benefits.
20:06:56:06 Pediatric dental.
20:06:56:07 Prohibited benefits.
20:06:56:08 Prescription drug benefits.
20:06:56:09 Prohibited discriminatory benefit design.
20:06:56:10 Actuarial value calculator.
20:06:56:11 Levels of coverage.
20:06:56:12 Accreditation.
20:06:56:13 Accreditation timeline.
20:06:56:14 Provider credentialing.
20:06:56:15 Annual limitation on cost sharing.
20:06:56:16 Annual limitation on deductibles for plans in the small group market.
20:06:56:17 Network plan cost sharing.
20:06:56:18 Increase annual dollar limits in multiples of 50.
20:06:56:19 Catastrophic plan.
20:06:56:20 Applicability.
20:06:56:21 Exception for uniform modification of coverage.
20:06:56:01. Definitions.
(1) "Actuarial value," a measure of the percentage of expected health care costs a health plan will cover for a standard population and can be considered a general summary measure of health plan generosity;
(2) "Actuarial value calculator," used to determine the actuarial value of applicable plans. It is developed using a set of claims data weighted to reflect the standard population projected to enroll in the individual and small group markets for the identified year of enrollment;
(3) "Base-benchmark plan," the plan that is selected by the state from the options described in 45 CFR §156.100(a), or a default benchmark plan, as described in 45 CFR §156.100(c), prior to any adjustments made pursuant to the benchmark standards described in 45 CFR §156.110;
(4) "De minimis variation," is the allowable variation in the actuarial value of a health plan that does not result in a material difference in the true dollar value of the health plan is +/-2 percentage points;
(5) "Essential health benefits benchmark plan," is the standardized set of essential health benefits that must be met by a qualified health plan;
(6) "HHS," United States Department of Health and Human Services;
(7) "Premium adjustment percentage," the percentage by which the average per capita premium for health insurance coverage for the preceding calendar year exceeds such average per capita premium for health insurance.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87.
Law Implemented: SDCL 58-17-87.
20:06:56:02. Covering essential health benefits. Health insurance coverage in the individual and small group markets must cover essential health benefits for plan years beginning after December 31, 2013. Sections 20:06:56:01 through 20:06:56:10 apply to those plans offered inside an Exchange and those offered outside an Exchange.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:03. Essential health benefit packages. The essential health benefits package consists of the following categories of benefits:
(1) Ambulatory patient services;
(2) Emergency services;
(3) Hospitalization;
(4) Maternity and newborn care;
(5) Mental health and substance use disorder services, including behavioral health treatment;
(6) Prescription drugs;
(7) Rehabilitative and habilitative services and devices;
(8) Laboratory services;
(9) Preventive and wellness services and chronic disease management; and
(10) Pediatric services, including oral and vision care.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:04. Substantially equal benefits. Plans must provide for benefits that are substantially equal to the essential health benefits-benchmark plan including:
(1) Covered benefits listed in § 20:06:56:02;
(2) Limitations on coverage including coverage of benefit amount, duration, and scope; and
(3) Prescription drug benefits described in § 20:06:56:08.
Source: 39 SDR 203, effective June 10, 2013; 40 SDR 102, effective December 3, 2013
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:05. Substituted benefits. A plan may substitute benefits from the essential health benefits benchmark benefit plan if it meets the following conditions:
(1) The substitute benefit is actuarial equivalent to the essential health benefit;
(2) The substitute benefit is made only within the same essential benefit category; and
(3) The benefit is not a prescription drug benefit.
The plan must submit evidence of the actuarial equivalence of the substituted benefit to the director. The certification must be conducted by a member of the American Academy of Actuaries, be based on an analysis performed in accordance with generally accepted actuarial principles and methodologies, and use a standardized plan population. Actuarial equivalence of benefits is determined regardless of cost sharing.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:06. Pediatric dental. A stand-alone dental plan covering pediatric dental may be used to cover the pediatric dental component of essential health benefits required by § 20:06:56:02. A stand-alone dental plan covering the pediatric dental category under § 20:06:56:02 must demonstrate to the director that it has a reasonable annual limitation on cost-sharing. An issuer must demonstrate that the stand-alone dental plan offers the pediatric dental essential health benefit within a de minimis variation of +/-2 percentage points of the level of coverage in subsections (1) and (2) at either:
(1) A low level of coverage with an AV of 70 percent; or
(2) A high level of coverage with an AV of 85 percent.
The coverage levels described above must be certified by a member of the American Academy of Actuaries using generally accepted actuarial principles and provided to the division.
A health benefit plan offered in the small group or individual market, which does not include minimum essential pediatric dental benefits, offers the minimum essential health benefits required under law only, if:
(1) There is at least one dental benefits carrier offering the federally-required minimum pediatric dental benefits in the state;
(2) The health benefit plan makes prominent disclosure at the time that it offers the plan, in a form approved by the director, that the health benefit plan does not provide the essential pediatric dental benefits; and
(3) That the dental benefits carriers providing the federally required minimum pediatric dental benefits and other dental benefits are licensed to offer dental benefits in the state.
For health benefit plans offered outside an exchange, pediatric dental coverage may only be excluded when an issuer is reasonably assured an individual has obtained such coverage through an exchange certified stand-alone dental plan being offered outside the exchange. A carrier may use any reasonable method for obtaining reasonable assurance including an attestation on an insurance application or other documentation from the applicant or the applicant's dental insurer.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:07. Prohibited benefits. An issuer of a plan offering essential health benefits may not include routine non-pediatric dental services, routine non-pediatric eye exam services, or long-term/custodial nursing home care benefits, or not medically necessary orthodontia as essential health benefits.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:08. Prescription drug benefits. A health plan does not provide essential health benefits unless it covers at least the greater of:
(1) One drug in every United States Pharmacopeia (USP) category and class; or
(2) The same number of prescription drugs in each category and class as the essential health benefits benchmark.
The plan is required to submit its drug list to the director. A health plan does not fail to provide essential health benefits for prescription drug solely because it does not offer drugs for services prohibited under SDCL 58-17-147. A health plan providing essential health benefits as defined in § 20:06:56:03 must have procedures in place that allow an enrollee to request clinically appropriate drugs not covered by the health plan. Such procedures must include a process for an enrollee, the enrollee's designee, or the enrollee's prescribing physician or other prescriber to request an expedited review based on exigent circumstances.
Exigent circumstances exist when an enrollee is suffering from a health condition that may seriously jeopardize the enrollee's life, health, or ability to regain maximum function or when an enrollee is undergoing a current course of treatment using a non-formulary drug.
A health plan must make its coverage determination on an expedited review request based on exigent circumstances and notify the enrollee or the enrollee's designee and the prescribing physician or other prescriber, as appropriate of its coverage determination no later than 24 hours after it receives the request.
A health plan that grants an exception based on exigent circumstances must provide coverage of the non-formulary drug for the duration of the exigency.
Source: 39 SDR 203, effective June 10, 2013; 41 SDR 93, effective December 3, 2014.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
Reference: United States Pharmacopeia (USP).
20:06:56:09. Prohibited discriminatory benefit design. A health insurance issuer does not provide essential health benefits if its benefit design, or the implementation of its benefit design, discriminates based on an individual's age, expected length of life, present or predicted disability, degree of medical dependency, quality of life, or other health conditions. An issuer must not employ discriminatory marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs in nongrandfathered health plans. Issuers may continue to use reasonable medical management techniques that are evidence based.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:10. Actuarial value calculator. A health insurance issuer may use the actuarial value calculator to determine the actuarial value of a health plan made available by Health and Human Services. Actuarial Value within a de minimis variation determines whether a health plan offers a bronze, silver, gold, or platinum level of coverage.
If a health plan's design is not compatible with the actuarial value calculator, the issuer must meet the following:
(1) Submit the actuarial certification from an actuary, who is a member of the American Academy of Actuaries, on the chosen methodology identified in subdivisions (2) and (3) of this section;
(2) Calculate the plan's actuarial value by estimating a fit of its plan design into the parameters of the actuarial value calculator and having an actuary, who is a member of the American Academy of Actuaries, certify that the plan design was fit appropriately in accordance with generally accepted actuarial principles and methodologies; or
(3) Use the actuarial value calculator to determine the actuarial value for the plan provisions that fit within the calculator parameters and have an actuary, who is a member of the American Academy of Actuaries, calculate and certify, in accordance with generally accepted actuarial principles and methodologies, appropriate adjustments to the actuarial value identified by the calculator, for plan design features that deviate substantially from the parameters of the actuarial value calculator.
The calculation methods described in subdivisions (2) and (3) of this section may include only in-network cost-sharing, including multi-tier networks.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:11. Levels of coverage. The levels of coverage are calculated as follows:
(1) A bronze health plan is a health plan that has an actuarial value of 60 percent;
(2) A silver health plan is a health plan that has an actuarial value of 70 percent;
(3) A gold health plan is a health plan that has an actuarial value of 80 percent; and
(4) A platinum health plan is a health plan that has an actuarial value of 90 percent.
Actuarial value within a de minimis variation determines whether a health plan offers a bronze, silver, gold, or platinum level of coverage.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:12. Accreditation. A qualified health plan must be accredited in the following categories by an accrediting entity recognized by HHS prior to certification:
(1) Clinical quality measures, such as the healthcare effectiveness Data and Information Set;
(2) Patient experience ratings on a standardized Consumer Assessment of Healthcare Providers and Systems survey;
(3) Consumer access;
(4) Utilization management;
(5) Quality assurance;
(6) Provider credentialing;
(7) Complaints and appeals;
(8) Network adequacy and access; and
(9) Patient information programs.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:13. Accreditation timeline. During certification for an issuer's initial year of qualified health plan certification a qualified health plan issuer without existing commercial, Medicaid, or Exchange health plan accreditation granted by a recognized accrediting entity for the same state in which the issuer is applying to offer coverage must have scheduled or plan to schedule a review of qualified health plan policies and procedures of the applying qualified health plan issuer with a recognized accrediting entity.
Prior to a qualified health plan issuer's second year and third year of qualified health plan certification, a qualified health plan issuer must be accredited by a recognized accrediting entity on the policies and procedures that are applicable to their Exchange products, or a qualified health plan issuer must have commercial or Medicaid health plan accreditation granted by a recognized accrediting entity for the same state in which the issuer is offering Exchange coverage and the administrative policies and procedures underlying that accreditation must be the same or similar to the administrative policies and procedures used in connection with the qualified health plan.
Prior to the qualified health plan issuer's fourth year of qualified health plan certification and in every subsequent year of certification, a qualified health plan issuer must be accredited in accordance with § 20:06:56:12.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:14. Provider credentialing. A health insurance issuer's selection standards for participating providers shall be developed for primary care professionals and each health care professional specialty. The standards shall be used in determining the selection of health care professionals by the health insurance issuer, its intermediaries, and any provider networks with which it contracts. The standards shall meet the requirements of the National Association of Insurance Commissioners Health Care Professional Credentialing Verification Model Act.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
Reference: National Association of Insurance Commissioners Health Care Professional Credentialing Verification Model Act.
20:06:56:15. Annual limitation on cost sharing. For a plan year beginning in calendar year 2014, cost sharing may not exceed the following:
(1) For self-only coverage--the annual dollar limit as described in 26 U.S.C. § 223(c)(2)(A)(ii)(I) of the Internal Revenue Code of 1986 as amended, for self-only coverage that is in effect for 2014; or
(2) For other than self-only coverage--the annual dollar limit in 26 U.S.C § 223(c)(2)(A)(ii)(II) of the Internal Revenue Code of 1986 as amended, for non-self-only coverage that is in effect for 2014.
For a plan year beginning in a calendar year after December 31, 2014, cost sharing may not exceed the following:
(1) For self-only coverage--the dollar amount limit for calendar year 2014 increased by an amount equal to the product of that amount and the premium adjustment percentage;
(2) For other than self-only coverage--twice the dollar limit for self-only coverage described in subsection 1.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:16. Annual limitation on deductibles for plans in the small group market. For a plan year beginning in calendar year 2014, the annual deductible for a health plan in the small group market may not exceed the following
(1) For self-only coverage--$2,000; or
(2) For coverage other than self-only--$4,000.
For a plan year beginning in a calendar year after 2014, the annual deductible for a health plan in the small group market may not exceed the following:
(1) For self-only coverage--the annual limitation on deductibles for calendar year 2014 increased by an amount equal to the product of that amount and the premium adjustment percentage; and
(2) For other than self-only coverage--twice the annual deductible limit for self-only coverage.
A health plan's annual deductible may exceed the annual deductible limit if that plan may not reasonably reach the actuarial value of a given level of coverage without exceeding the annual deductible limit.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:17. Network plan cost sharing. In the case of a plan using a network of providers, cost-sharing paid by, or on behalf of, an enrollee for benefits provided outside of such network shall not count towards the annual limitation on cost-sharing or the annual limitation on deductibles.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:18. Increase annual dollar limits in multiples of 50. For a plan year beginning in a calendar year after December 31, 2014, any increase in the annual dollar limits that do not result in a multiple of 50 dollars must be rounded to the next lowest multiple of 50 dollars.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:19. Catastrophic plan. A health plan not providing a bronze, silver, gold, or platinum level of coverage shall be treated as meeting the requirements of subsection (d) with respect to any plan year if:
(1) The only individuals who are eligible to enroll in the plan are individuals described in 1302 (e); and
(2) The plan provides except as provided in clause 1302 (e), the essential health benefits determined under section 1302 of the ACA, except that the plan provides no benefits for any plan year until the individual has incurred cost-sharing expenses in an amount equal to the annual limitation in effect under subsection (c)(1) of section 1302 for the plan year except as provided for in section 2713; and coverage for at least three primary care visits. An individual is described in this paragraph for any plan year if the individual has not attained the age of 30 before the beginning of the plan year; or has a certification in effect for any plan year under this title that the individual is exempt from the requirement under section 5000A of the Internal Revenue Code of 1986 by reason of section 5000A(e)(1) of such Code relating to individuals without affordable coverage; or section 5000A(e)(5) of such Code relating to individuals with hardships.
If a health insurance issuer offers a health plan described in this section, the issuer may only offer the plan in the individual market.
The cost-sharing incurred under a health plan described in this section with respect to self-only coverage or coverage other than self-only coverage for a plan year beginning in 2014 shall not exceed the dollar amounts in effect under section 223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 for self-only and family coverage, respectively, for taxable years beginning in 2014.
In the case of any plan year beginning in a calendar year after December 31, 2014, the limitation under this section shall in the case of self-only coverage, be equal to the dollar amount under described above for self-only coverage for plan years beginning in 2014, increased by an amount equal to the product of that amount and the premium adjustment percentage for the calendar year; and in the case of other coverage, twice the amount in effect. If the amount of any increase is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:20. Applicability. The provisions of §§ 20:06:56:01 to 20:06:56:19, inclusive, only apply to non-grandfathered plans effective January 1, 2014, and does not apply to an excepted benefit as defined in § 20:06:55:27.
Source: 39 SDR 203, effective June 10, 2013.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
20:06:56:21. Exception for uniform modification of coverage. Only at the time of coverage renewal may issuers modify the health insurance coverage for a product offered to a group health plan or an individual, as applicable, in the large group market, the individual market, and the small group market if, for coverage available in this market, other than only through one or more bona fide associations.
Modifications made uniformly and solely pursuant to applicable federal or state requirements are considered a uniform modification of coverage in the small group and individual market if:
(1) The modification is made within a reasonable time period after the imposition or modification of the federal or state requirement;
(2) The modification is directly related to the imposition or modification of the federal or state requirement;
(3) Other types of modifications made uniformly are considered a uniform modification of coverage if the health insurance coverage for the product in the individual or small group market meets all of the following criteria:
(i) The product is offered by the same health insurance issuer;
(ii) The product is offered as the same product network type;
(iii) The product continues to cover at least a majority of the same service area;
(iv) Within the product, each plan has the same cost-sharing structure as before the modification, except for any variation in cost sharing solely related to changes in cost and utilization of medical care, or to maintain the same metal tier level described in sections 1302(d) and (e) of the Affordable Care Act (December 3, 2014); and
(v) The product provides the same covered benefits, except for any changes in benefits that cumulatively impact the plan-adjusted index rate for any plan within the product within an allowable variation of +/- two percentage points.
The director may broaden the standards in subsection 3(iii) and (iv) of this section after consideration of the impact on the insurance-buying public.
If an issuer in the individual market is renewing non-grandfathered coverage or uniformly modifying non-grandfathered coverage the issuer must provide to each individual written notice of the renewal before the date of the first day of the next annual open enrollment period.
If an issuer in the small group market is renewing coverage or uniformly modifying coverage the issuer must provide to each plan sponsor or individual written notice of the renewal at least 60 calendar days before the date of the coverage will be renewed.
Source: 41 SDR 93, effective December 3, 2014.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
