20:06:55:14. Rescissions. A
policy, certificate, or contract of insurance may not be rescinded unless the
individual performs an act, practice, or omission that constitutes fraud or
unless the individual makes an intentional misrepresentation of a material
fact. A rescission is any cancellation or discontinuance of coverage under any
individual or group health insurance policy or certificate, other than a plan
of excepted benefits, that has a retroactive effect. Rescission does not
include a cancellation or discontinuance of coverage under a health policy or
certificate if:
(1) The
cancellation or discontinuance of coverage has only a prospective effect;
(2) The
cancellation or discontinuance of coverage is effective retroactively to the
extent it is attributable to a failure to timely pay required premiums or
contributions towards the cost of coverage; or
(3) The
health benefit plan covers only active employees and, if applicable, dependents
and those covered under continuation coverage provisions, the employee pays no
premiums for coverage after termination of employment and the cancellation or
discontinuance of coverage is effective retroactively back to the date of
termination of employment due to a delay in administrative record-keeping.
A
health carrier shall provide at least thirty days advance notice to each plan
enrollee or covered person who would be affected by the proposed rescission of
coverage before coverage under the plan may be rescinded. If the proposed
rescission is with respect to a group plan, the notice is required regardless
of whether the rescission applies only to an individual within the group or to
the entire group.
Except
for those coverages that are excepted benefits pursuant to SDCL subdivision 58-17-69(13), this section applies to any plan of individual or group health insurance coverage and to any health benefit plan subject to the provisions of SDCL 58-17-66 to 58-17-87, inclusive, and also applies to any employer based health plan, including health benefit plans subject to the provisions of SDCL 58-18-42.
Source: 37 SDR 63, effective September
23, 2010; 37 SDR 111, effective December 7, 2010.
General Authority: SDCL 58-17-87, 58-18-79.
Law Implemented: SDCL 58-17-87, 58-18-51.1, 58-18-79.
