CHAPTER 20:06:58
\r\n\r\n\r\n\r\n
MENTAL HEALTH\r\nPARITY
\r\n\r\n\r\n\r\n
\r\n\r\n
Section
\r\n\r\n20:06:58:01 Definitions.
\r\n\r\n20:06:58:02 Parity requirements with respect to\r\naggregate lifetime and annual dollar limits.
\r\n\r\n20:06:58:03 Plan\r\nwith no limit or limits on less than one-third of all medical or surgical\r\nbenefits.
\r\n\r\n20:06:58:04 Plan with a limit on at least two-thirds\r\nof all medical or surgical benefits.
\r\n\r\n20:06:58:05 Determining one-third and two-thirds of\r\nall medical or surgical benefits.
\r\n\r\n20:06:58:06 Plan not described in sections\r\n20:06:58:03 or 20:06:58:04 of this chapter.
\r\n\r\n20:06:58:07 Parity\r\nrequirements with respect to financial requirements and treatment limitations\r\n-- Clarification of classification of benefits.
\r\n\r\n20:06:58:08 Parity\r\nrequirements with respect to financial requirements and treatment limitations\r\n-- Clarification of type of financial requirement or treatment limitation.
\r\n\r\n20:06:58:09 Parity\r\nrequirements with respect to financial requirements and treatment limitations\r\n-- Clarification of level of a type of financial requirement or treatment\r\nlimitation.
\r\n\r\n20:06:58:10 Parity\r\nrequirements with respect to financial requirements and treatment limitations\r\n-- Clarification of coverage unit.
\r\n\r\n20:06:58:11 General parity requirement.
\r\n\r\n20:06:58:12 Classifications of benefits used for\r\napplying rules.
\r\n\r\n20:06:58:13 Application to out-of-network providers.
\r\n\r\n20:06:58:14 Financial\r\nrequirements and quantitative treatment limitations -- Determining\r\nsubstantially all.
\r\n\r\n20:06:58:15 Financial\r\nrequirements and quantitative treatment limitations -- Determining predominant.
\r\n\r\n20:06:58:16 Financial\r\nrequirements and quantitative treatment limitations -- Determining portion\r\nbased on plan payments.
\r\n\r\n20:06:58:17 Financial\r\nrequirements and quantitative treatment limitations -- Determining\r\nclarifications for certain threshold requirements and dollar amount of plan\r\npayments.
\r\n\r\n20:06:58:18 Application\r\nto different coverage units.
\r\n\r\n20:06:58:19 Special rule for multi-tiered\r\nprescription drug benefits.
\r\n\r\n20:06:58:20 Special rule for multiple network tiers.
\r\n\r\n20:06:58:21 Special\r\nrule for sub-classifications permitted for office visits, separate from other\r\noutpatient services.
\r\n\r\n20:06:58:22 No\r\nseparate cumulative financial requirements or cumulative quantitative treatment\r\nlimitations.
\r\n\r\n20:06:58:23 Nonquantitative treatment limitations.
\r\n\r\n20:06:58:24 Illustrative list of nonquantitative\r\ntreatment limitations.
\r\n\r\n20:06:58:25 Exemptions.
\r\n\r\n20:06:58:26 Availability of plan information --\r\nCriteria for medical necessity determinations.
\r\n\r\n20:06:58:27 Availability of plan information --\r\nReasons for denial.
\r\n\r\n20:06:58:28 Applicability and effective dates --\r\nGroup health plans.
\r\n\r\n20:06:58:29 Applicability and effective dates --\r\nHealth insurance issuers.
\r\n\r\n20:06:58:30 Scope.
\r\n\r\n20:06:58:31 Coordination with EHB requirements.
\r\n\r\n20:06:58:32 Small employer exemption.
\r\n\r\n20:06:58:33 Determining employer size.
\r\n\r\n20:06:58:34 Increased cost exemption.
\r\n\r\n20:06:58:35 Applicable percentage.
\r\n\r\n20:06:58:36 Determinations by actuaries.
\r\n\r\n20:06:58:37 Formula.
\r\n\r\n20:06:58:38 Six month determination.
\r\n\r\n20:06:58:39 Notification.
\r\n\r\n20:06:58:40 Participants and beneficiaries -- Content\r\nof notice.
\r\n\r\n20:06:58:41 Use of summary of material reductions in\r\ncovered services or benefits.
\r\n\r\n20:06:58:42 Delivery.
\r\n\r\n20:06:58:43 Availability of documentation.
\r\n\r\n20:06:58:44 Sale of nonparity health insurance\r\ncoverage.
\r\n\r\n20:06:58:45 Special effective date for certain\r\ncollective-bargained plans.
\r\n\r\n\r\n\r\n20:06:58:01. Definitions. Unless\r\notherwise provided, terms used in this chapter mean:
\r\n\r\n\r\n\r\n
(1) "Aggregate lifetime dollar\r\nlimit," a dollar limitation on the total amount of specified benefits that\r\nmay be paid under a group health plan, or health insurance coverage offered in\r\nconnection with such a plan, for any coverage unit;
\r\n\r\n\r\n\r\n
(2) "Annual dollar limit," a\r\ndollar limitation on the total amount of specified benefits that may be paid in\r\na 12-month period under a group health plan, or health insurance coverage\r\noffered in connection with such a plan, for any coverage unit;
\r\n\r\n\r\n\r\n
(3) "Cumulative financial\r\nrequirements," financial requirements that determine whether or to what\r\nextent benefits are provided based on accumulated amounts and include\r\ndeductibles and out-of-pocket maximums. The term does not include aggregate\r\nlifetime or annual dollar limits because these two terms are excluded from the\r\nmeaning of financial requirements;
\r\n\r\n\r\n\r\n
(4) "Cumulative quantitative\r\ntreatment limitations," treatment limitations that determine whether or to\r\nwhat extent benefits are provided based on accumulated amounts, such as annual\r\nor lifetime day or visit limits;
\r\n\r\n\r\n\r\n
(5) "Financial requirements,"\r\ninclude deductibles, co-payments, coinsurance, or out-of-pocket maximums. The\r\nterm does not include aggregate lifetime or annual dollar limits;
\r\n\r\n\r\n\r\n
(6) "Medical or surgical\r\nbenefits," benefits with respect to items or services for medical\r\nconditions or surgical procedures, as defined under the terms of the plan, or\r\nhealth insurance coverage and in accordance with applicable federal and state\r\nlaw, but does not include mental health or substance use disorder benefits. Any\r\ncondition defined by the plan as being or as not being a medical or surgical\r\ncondition must be defined to be consistent with generally recognized\r\nindependent standards of current medical practice;
\r\n\r\n\r\n\r\n
(7) "Mental health benefits,"\r\nbenefits with respect to services for mental health conditions, as defined\r\nunder the terms of the plan and in accordance with applicable federal and state\r\nlaw. Any condition defined by the plan as being or as not being a mental health\r\ncondition must be defined to be consistent with generally recognized\r\nindependent standards of current medical practice;
\r\n\r\n\r\n\r\n
(8) "Substance use disorder\r\nbenefits," benefits with respect to items or services for substance use\r\ndisorders, as defined under the terms of the plan and in accordance with\r\napplicable federal and state law. Any disorder defined by the plan as being or\r\nas not being a substance use disorder must be defined to be consistent with\r\ngenerally recognized independent standards of current medical practice;
\r\n\r\n\r\n\r\n
(9) "Treatment limitations,"\r\ninclude limits on benefits based on the frequency of treatment, number of\r\nvisits, days of coverage, days in a waiting period, or other similar limits on\r\nthe scope or duration of treatment. Treatment limitations include both\r\nquantitative treatment limitations, which are expressed numerically, such as 50\r\noutpatient visits per year, and nonquantitative treatment limitations, which\r\notherwise limit the scope or duration for treatment under a plan. A permanent\r\nexclusion of all benefits for a particular condition or disorder is not a\r\ntreatment limitation for purposes of this definition.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79.
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-79(1), 58-18-79(15), 58-18-80.
\r\n\r\n\r\n\r\n
Cross-Reference: Illustrative list of\r\nnonquantitative limitations, § 20:06:58:24.
\r\n\r\n\r\n\r\n
20:06:58:02. Parity requirements\r\nwith respect to aggregate lifetime and annual dollar limits. A group health\r\nplan, or heath insurance coverage offered by an issuer in connection with a\r\ngroup health plan, that provides medical or surgical benefits and mental health\r\nor substance use disorder benefits must comply with § 20:06:58:03,\r\n20:06:58:04, or 20:06:58:06. However, §§ 20:06:58:01 to 20:06:58:45,\r\ninclusive, do not apply if a plan, or health insurance coverage, satisfies the\r\nrequirements of § 20:06:58:32 or § 20:06:58:34, relative to\r\nexemptions for small employers and for increased costs.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:03. Plan with no limit or\r\nlimits on less than one-third of all medical or surgical benefits. If a\r\nplan, or health insurance coverage, does not include an aggregate lifetime or\r\nannual dollar limit on any medical or surgical benefits or includes an\r\naggregate lifetime or annual dollar limit that applies to less than one-third\r\nof all medical or surgical benefits, it may not impose an aggregate lifetime or\r\nannual dollar limit, respectively, on mental health or substance use disorder\r\nbenefits.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:04. Plan with a limit on at\r\nleast two-thirds of all medical or surgical benefits. If a plan, or health\r\ninsurance coverage, includes an aggregate lifetime or annual dollar limit on at\r\nleast two-thirds of all medical or surgical benefits, it must either:
\r\n\r\n\r\n\r\n
(1) Apply the aggregate lifetime or\r\nannual dollar limit both to the medical or surgical benefits to which the limit\r\nwould otherwise apply and to mental health or substance use disorder benefits\r\nin a manner that does not distinguish between the medical or surgical benefits\r\nand mental health or substance use disorder benefits; or
\r\n\r\n\r\n\r\n
(2) Not include an aggregate lifetime\r\nor annual dollar limit on mental health or substance use disorder benefits that\r\nis less than the aggregate lifetime or annual dollar limit, respectively, on\r\nmedical or surgical benefits;
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
Cross-Reference: No separate cumulative\r\nfinancial requirements or cumulative quantitative treatment limitations,\r\n§ 20:06:58:22.
\r\n\r\n\r\n\r\n
20:06:58:05. Determining one-third\r\nand two-thirds of all medical or surgical benefits. For purposes of\r\n§§ 20:06:58:01 to 20:06:58:45, inclusive, the determination of whether the\r\nportion of medical or surgical benefits subject to an aggregate lifetime or annual\r\ndollar limit represents one-third or two-thirds of all medical or surgical\r\nbenefits, is based on the dollar amount of all plan payments for medical or\r\nsurgical benefits expected to be paid under the plan for the plan year, or for\r\nthe portion of the plan year after a change in plan benefits that affects the\r\napplicability of the aggregate lifetime or annual dollar limits. Any reasonable\r\nmethod may be used to determine whether the dollar amount expected to be paid\r\nunder the plan will constitute one-third or two-thirds of the dollar amount of\r\nall plan payments for medical or surgical benefits.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:06. Plan not described in\r\nsections 20:06:58:03 or 20:06:58:04 of this chapter. A group health plan,\r\nor health insurance coverage, that is not described in § 20:06:58:03 or\r\n20:06:58:04 with respect to aggregate lifetime or annual dollar limits on\r\nmedical or surgical benefits must either:
\r\n\r\n\r\n\r\n
(1) Impose no aggregate lifetime or\r\nannual dollar limit, as appropriate, on mental health or substance use disorder\r\nbenefits; or
\r\n\r\n\r\n\r\n
(2) Impose an aggregate lifetime or\r\nannual dollar limit on mental health or substance use disorder benefits that is\r\nno less than an average limit calculated for medical or surgical benefits in\r\nthe following manner. The average limit is calculated by taking into account\r\nthe weighted average of the aggregate lifetime or annual dollar limits, as\r\nappropriate, that are applicable to the categories of medical or surgical\r\nbenefits. Limits based on delivery systems, such as inpatient, outpatient\r\ntreatment or normal treatment of common, low-cost conditions such as treatment\r\nof normal births, do not constitute categories for purposes of subdivision\r\n20:06:58:06(2). In addition, for purposes of determining weighted averages, any\r\nbenefits that are not within a category that is subject to a\r\nseparately-designated dollar limit under the plan are taken into account as a\r\nsingle separate category by using an estimate of the upper limit on the dollar\r\namount that a plan may reasonably expect to incur with respect to such\r\nbenefits, taking into account any other applicable restrictions under the plan.
\r\n\r\n\r\n\r\n
For purposes of this section, the weighting\r\napplicable to any category of medical or surgical benefits is determined in the\r\nmanner set forth in § 20:06:58:05 for determining one-third or two-thirds\r\nof all medical or surgical benefits.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:07. Parity requirements\r\nwith respect to financial requirements and treatment limitations --\r\nClarification of classification of benefits. For purposes of\r\n§§ 20:06:58:07 to 20:06:58:25, inclusive, when referring to a\r\nclassification of benefits, the term "classification" means a\r\nclassification as described in §§ 20:06:58:12 and 20:06:58:13.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(1), 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:08. Parity requirements\r\nwith respect to financial requirements and treatment limitations --\r\nClarification of type of financial requirement or treatment limitation. For\r\npurposes of §§ 20:06:58:07 to 20:06:58:25, inclusive, when referring to a\r\ntype of financial requirement or treatment limitation, the type means its\r\nnature. Types of financial requirements include deductibles, co-payments,\r\ncoinsurance, and out-of-pocket maximums. Types of quantitative treatment\r\nlimitations include annual, episode, and lifetime day and visit limits.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(1), 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
Cross-Reference: Illustrative list of\r\nnonquantitative treatment limitations, § 20:06:58:24.
\r\n\r\n\r\n\r\n
20:06:58:09. Parity requirements\r\nwith respect to financial requirements and treatment limitations --\r\nClarification of level of a type of financial requirement or treatment\r\nlimitation. For purposes of §§ 20:06:58:07 to 20:06:58:25, inclusive,\r\nwhen referring to a level of a type of financial requirement or treatment\r\nlimitation, level is the magnitude of the type of financial requirement of\r\ntreatment limitation. For example, different levels of coinsurance include 20\r\npercent and 30 percent; different levels of a co-payment include $15 and $20;\r\ndifferent levels of a deductible include $250 and $500; and different levels of\r\nan episode limit include 21 inpatient days per episode and 30 inpatient days\r\nper episode.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79.
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79(1), 58-18-79(15), 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:10. Parity requirements\r\nwith respect to financial requirements and treatment limitations --\r\nClarification of coverage unit. For purposes of §§ 20:06:58:01 to\r\n20:06:58:45, inclusive, a coverage unit means the way in which a plan, or\r\nhealth insurance coverage, groups individuals for purposes of determining\r\nbenefits, premiums, or contributions. For example, different coverage units\r\ninclude self-only, family, and employee-plus-spouse.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79.
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79(1), 58-18-79(15), 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:11. General parity\r\nrequirement. A group health plan, or health insurance coverage offered by\r\nan issuer in connection with a group health plan, that provides both medical or\r\nsurgical benefits and mental health or substance use disorder benefits may not\r\napply any financial requirement or treatment limitation to mental health or\r\nsubstance use disorder benefits in any classification this is more restrictive\r\nthan the predominant financial requirement or treatment limitation of that type\r\napplied to substantially all, medical or surgical benefits, in the same\r\nclassification. Whether a financial requirement or treatment limitation is a\r\npredominant financial requirement or treatment limitation that applies to\r\nsubstantially all medical surgical benefits in a classification is determined\r\nseparately for each type of financial requirement or treatment limitation. The\r\napplication of the rules found in §§ 20:06:58:11 to 20:06:58:13,\r\ninclusive, to financial requirements and quantitative treatment limitation is\r\naddressed in §§ 20:06:58:14 to 20:06:58:22, inclusive; the application of\r\nthe rules of §§ 20:06:58:11 to 20:06:58:13, inclusive, to nonquantitative\r\ntreatment limitations is addressed in §§ 20:06:58:24 and 20:06:58:25.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:12. Classifications of\r\nbenefits used for applying rules. If a plan, or health insurance coverage,\r\nprovides mental health or substance use disorder benefits in any classification\r\nof benefits described in §§ 20:06:58:12 and 20:06:58:13, mental health or\r\nsubstance use disorder benefits must be provided in every classification in\r\nwhich medical or surgical benefits are provided. In determining the\r\nclassification in which a particular benefit belongs, a plan, or health\r\ninsurance issuer, must apply the same standards to medical or surgical benefits\r\nand to mental health or substance use disorder benefits. To the extent that a\r\nplan, or health insurance coverage, provides benefits in a classification and\r\nimposes any separate financial requirement or treatment limitation, or separate\r\nlevel of a financial requirement or treatment limitation, for benefits in the\r\nclassification, the rules of §§ 20:06:58:07 to 20:06:58:25, inclusive,\r\napply separately with respect to that classification for all financial requirement\r\nor treatment limitations.
\r\n\r\n\r\n\r\n
The following classifications of benefits are the\r\nonly classifications used in applying the rules of §§ 20:06:58:07 to\r\n20:06:58:25, inclusive:
\r\n\r\n\r\n\r\n
(1) "Inpatient, in-network,"\r\nbenefits furnished on an inpatient basis and within a network of providers\r\nestablished or recognized under a plan or health insurance coverage;
\r\n\r\n\r\n\r\n
(2) "Inpatient,\r\nout-of-network," benefits furnished on an inpatient basis and outside any\r\nnetwork of providers established or recognized under a plan or health insurance\r\ncoverage. This classification includes inpatient benefits under a plan, or\r\nhealth insurance coverage, that has no network or providers;
\r\n\r\n\r\n\r\n
(3) "Outpatient, in-network,"\r\nbenefits furnished on an outpatient basis and within a network of providers established\r\nor recognized under a plan or health insurance coverage;
\r\n\r\n\r\n\r\n
(4) "Outpatient,\r\nout-of-network," benefits furnished on an outpatient basis and outside any\r\nnetwork of providers established or recognized under a plan or health insurance\r\ncoverage. This classification includes outpatient benefits under a plan, or\r\nhealth insurance coverage, that has no network of providers;
\r\n\r\n\r\n\r\n
(5) "Emergency care,"\r\nbenefits for emergency care;
\r\n\r\n\r\n\r\n
(6) "Prescription drugs,"\r\nbenefits for prescription drugs.
\r\n\r\n\r\n\r\n
If a plan, or health insurance coverage, provides\r\nbenefits only to the extent required under the PHS Act, 29 CFR 2713 (December\r\n3, 2014), this section is not intended to require the plan, or health insurance\r\ncoverage, to provide additional mental health or substance use disorder\r\nbenefits in any classification.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
Cross-Reference: Special rule for\r\nmulti-tiered prescription drug benefits, § 20:06:58:19.
\r\n\r\n\r\n\r\n
20:06:58:13. Application to\r\nout-of-network providers. A plan, or health insurance coverage, that\r\nprovides mental health or substance use disorder benefits in any classification\r\nof benefits must provide mental health or substance use disorder benefits in every\r\nclassification in which medical or surgical benefits are provided, including\r\nout-of-network classifications.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:14. Financial requirements\r\nand quantitative treatment limitations -- Determining substantially all.\r\nFor purposes of §§ 20:06:58:07 to 20:06:58:25, inclusive, a type of\r\nfinancial requirement or quantitative treatment limitation is considered to apply\r\nto substantially all medical or surgical benefits in a classification of\r\nbenefits if it applies to at least two-thirds of all medical or surgical\r\nbenefits in that classification. Benefits expressed as subject to a zero level\r\nof a type of financial requirement are treated as benefits not subject to that\r\ntype of financial requirement, and benefits expressed as subject to a\r\nquantitative treatment limitation that is unlimited are treated as benefits not\r\nsubject to that type of quantitative treatment limitation. If a type of\r\nfinancial requirement or quantitative treatment limitation does not apply to at\r\nleast two-thirds of all medical or surgical benefits in a classification, then\r\nthat type cannot be applied to mental health or substance use disorder benefits\r\nin that classification.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:15. Financial requirements\r\nand quantitative treatment limitations -- Determining predominant. If a\r\ntype of financial requirement or quantitative treatment limitation applies to\r\nat least two-thirds of all medical or surgical benefits in a classification as\r\ndetermined under § 20:06:58:17, the level of the financial requirement or\r\nquantitative treatment limitation that is considered the predominant level of\r\nthat type in a classification of benefits is the level that applies to more\r\nthan one-half of medical or surgical benefits in that classification subject to\r\nthe financial requirement or quantitative treatment limitation.
\r\n\r\n\r\n\r\n
If, with respect to a type of financial\r\nrequirement or quantitative treatment limitation that applies to at least\r\ntwo-thirds of all medical or surgical benefits in a classification, there is no\r\nsingle level that applies to more than one-half of medical or surgical benefits\r\nin the classification subject to the financial requirement or quantitative\r\ntreatment limitation, the plan, or health insurance issuer, may combine levels\r\nuntil the combination of levels applies to more than one-half of medical or\r\nsurgical benefits subject to the financial requirement or quantitative\r\ntreatment limitation in the classification. The least restrictive level within\r\nthe combination is considered the predominate level of that type in the\r\nclassification. A plan may combine the most restrictive levels first, with each\r\nless restrictive level added to the combination until the combination applies\r\nto more than one-half of the benefits subject to the financial requirement or\r\ntreatment limitation.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:16. Financial requirements\r\nand quantitative treatment limitations -- Determining portion based on plan\r\npayments. For purposes of §§ 20:06:58:07 to 20:06:58:25, inclusive,\r\nthe determination of the portion of medical or surgical benefits in a classification\r\nof benefits subject to a financial requirement or quantitative treatment\r\nlimitation, or subject to any level of a financial requirement or quantitative\r\ntreatment limitation, is based on the dollar amount of all plan payments for\r\nmedical or surgical benefits in the classification expected to be paid under\r\nthe plan for the plan year or for the portion of the plan year after a change\r\nin plan benefits that affects the applicability of the financial requirement or\r\nquantitative treatment limitation.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:17. Financial requirements\r\nand quantitative treatment limitations -- Determining clarifications for\r\ncertain threshold requirements and dollar amount of plan payments. For any\r\ndeductible, the dollar amount of plan payments includes all plan payments with\r\nrespect to claims that would be subject to the deductible if it had not been\r\nsatisfied. For any out-of-pocket maximum, the dollar amount of plan payments\r\nincludes all plan payments associated with out-of-pocket payments that are\r\ntaken into account towards the out-of-pocket maximum as well as all plan\r\npayments associated with out-of-pocket payments that would have been made\r\ntowards the out-of-pocket maximum if it had not been satisfied.
\r\n\r\n\r\n\r\n
Any reasonable method may be used to determine the\r\ndollar amount expected to be paid under a plan for medical or surgical benefits\r\nsubject to a financial requirement or quantitative treatment limitation or\r\nsubject to any level of a financial requirement or quantitative treatment\r\nlimitation.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:18. Application to\r\ndifferent coverage units. If a plan, or health insurance coverage, applies\r\ndifferent levels of a financial requirement or quantitative treatment\r\nlimitation to different coverage units in a classification of medical or\r\nsurgical benefits, the predominant level that applies to substantially all\r\nmedical or surgical benefits in the classification is determined separately for\r\neach coverage unit.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:19. Special rule for\r\nmulti-tiered prescription drug benefits. If a plan, or health insurance\r\ncoverage, applies different levels of financial requirements to different tiers\r\nof prescription drug benefits based on reasonable factors determined in accordance\r\nwith § 20:06:58:23, relating to requirements for nonquantitative treatment\r\nlimitations, and without regard to whether a drug is generally prescribed with\r\nrespect to medical or surgical benefits or with respect to mental health or\r\nsubstance use disorder benefits, the plan, or health insurance coverage,\r\nsatisfies the parity requirements of §§ 20:06:58:07 to 20:06:58:25,\r\ninclusive, with respect to prescription drug benefits. Reasonable factors\r\ninclude cost, efficacy, generic versus brand name, and mail order versus\r\npharmacy pick-up.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:20. Special rule for\r\nmultiple network tiers. If a plan, or health insurance coverage, provides\r\nbenefits through multiple tiers of in-network providers, such as an in-network\r\ntier of preferred providers with more generous cost-sharing to participants\r\nthan a separate in-network tier of participating providers, the plan may divide\r\nits benefits furnished on an in-network basis into sub-classifications that\r\nreflect network tiers, if the tiering is based on reasonable factors determined\r\nin accordance with § 20:06:58:23 and without regard to whether a provider\r\nprovides services with respect to medical or surgical benefits or mental health\r\nor substance use disorder benefits. After the sub-classifications are\r\nestablished, the plan or issuer may not impose any financial requirement or\r\ntreatment limitation on mental health or substance use disorder benefits in any\r\nsub-classification that is more restrictive than the predominant financial\r\nrequirement or treatment limitation that applies to substantially all medical\r\nor surgical benefits in the sub-classification using the methodology set forth\r\nin §§ 20:06:58:14 to 20:06:58:17, inclusive.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:21. Special rule for\r\nsub-classifications permitted for office visits, separate from other outpatient\r\nservices. For purposes of applying the financial requirement and treatment\r\nlimitation rules of §§ 20:06:58:07 to 20:06:58:25, inclusive, a plan or\r\nissuer may divide its benefits furnished on an outpatient basis into the two\r\nsub-classifications described in this section. After the sub-classifications\r\nare established, the plan or issuer may not impose any financial requirement or\r\nquantitative treatment limitation on mental health or substance use disorder\r\nbenefits in any sub-classification that is more restrictive than the\r\npredominant financial requirement or quantitative treatment limitation that\r\napplies to substantially all medical or surgical benefits in the\r\nsub-classification using the methodology set forth in paragraphs\r\n§§ 20:06:58:14 to 20:06:58:17, inclusive. Sub-classifications other than\r\nthese special rules, such as separate sub-classifications for generalists and\r\nspecialists, are not permitted. The two sub-classifications permitted under\r\nthis section are:
\r\n\r\n\r\n\r\n
(1) Office visits, such as physician\r\nvisits; and
\r\n\r\n(2) All other outpatient items and\r\nservices, such as outpatient surgery, facility charges for day treatment\r\ncenters, laboratory charges, or other medical items.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:22. No separate cumulative\r\nfinancial requirements or cumulative quantitative treatment limitations. A\r\ngroup health plan, or health insurance coverage, offered in connection with a\r\ngroup health plan, may not apply any cumulative financial requirement or\r\ncumulative quantitative treatment limitation for mental health or substance use\r\ndisorder benefits in a classification that accumulates separately from any\r\nestablished for medical or surgical benefits in the same classification.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:23. Nonquantitative\r\ntreatment limitations. A group health plan, or health insurance coverage,\r\nmay not impose a nonquantitative treatment limitation with respect to mental\r\nhealth or substance use disorder benefits in any classification unless, under\r\nthe terms of the plan, or health insurance coverage, any processes, strategies,\r\nevidentiary standards, or other factors used in applying the nonquantitative\r\ntreatment limitation to mental health or substance use disorder benefits in the\r\nclassification are comparable to, and are applied no more stringently than, the\r\nprocesses, strategies, evidentiary standards, or other factors used in applying\r\nthe limitation with respect to medical or surgical benefits in the\r\nclassification.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:24. Illustrative list of\r\nnonquantitative treatment limitations. Nonquantitative treatment\r\nlimitations include:
\r\n\r\n\r\n\r\n
(1) Medical management standards\r\nlimiting or excluding benefits based on medical necessity or medical\r\nappropriateness, or based on whether the treatment is experimental or\r\ninvestigative;
\r\n\r\n\r\n\r\n
(2) Formulary design for prescription\r\ndrugs;
\r\n\r\n\r\n\r\n
(3) Standards for provider admission to\r\nparticipate in a network, including reimbursement rates;
\r\n\r\n\r\n\r\n
(4) Plan methods for determining usual,\r\ncustomary, and reasonable charges;
\r\n\r\n\r\n\r\n
(5) Refusal to pay for higher-cost\r\ntherapies until it can be shown that a lower-cost therapy is not effective,\r\nalso known as fail-first policies or step therapy protocols;
\r\n\r\n\r\n\r\n
(6) Exclusions based on failure to\r\ncomplete a course of treatment;
\r\n\r\n\r\n\r\n
(7) For plans with multiple network\r\ntiers, such as preferred providers and participating providers, network tier\r\ndesign; and
\r\n\r\n\r\n\r\n
(8) Restrictions based on geographic\r\nlocation, facility type, provider specialty, and other criteria that limit the\r\nscope or duration of benefits for services provided under the plan or coverage.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:25. Exemptions. The\r\nrules in §§ 20:06:58:07 to 20:06:58:25, inclusive, do not apply if a group\r\nhealth plan, or health insurance coverage, satisfies the requirements of\r\n§§ 20:06:58:32 and 20:06:58:33 or §§ 20:06:58:34 to 20:06:58:43,\r\ninclusive.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:26. Availability of plan\r\ninformation -- Criteria for medical necessity determinations. The criteria\r\nfor medical necessity determinations made under a group health plan with\r\nrespect to mental health or substance use disorder benefits, or health insurance\r\ncoverage offered in connection with the plan with respect to such benefits,\r\nmust be made available by the plan administrator, or health insurance issuer\r\noffering such coverage, to any current or potential participant, beneficiary,\r\nor contracting provider upon request.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:27. Availability of plan\r\ninformation -- Reasons for denial. The reason for any denial under a group\r\nhealth plan, or health insurance coverage offered in connection with such plan,\r\nof reimbursement or payment for services with respect to mental health or\r\nsubstance use disorder benefits in the case of any participant or beneficiary\r\nmust be made available by the plan administrator, or the health insurance\r\nissuer offering such coverage, to the participant or beneficiary, in accordance\r\nwith this section.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:28. Applicability and\r\neffective dates -- Group health plans. The requirements of\r\n§§ 20:06:58:01 to 20:06:58:45, inclusive, apply to a group health plan\r\noffering, medical or surgical benefits, and mental health or substance use\r\ndisorder benefits. If, under an arrangement or arrangements to provide health\r\ncare benefits by an employer or employee organization including for this\r\npurpose a joint board of trustees of a multiemployer trust affiliated with one\r\nor more multiemployer plans, any participant or beneficiary can simultaneously\r\nreceive coverage for medical or surgical benefits and coverage for mental\r\nhealth or substance use disorder benefits, then the requirements of\r\n§§ 20:06:58:01 to 20:06:58:45, inclusive, apply separately with respect to\r\neach combination of medical or surgical benefits and of mental health or\r\nsubstance use disorder benefits, that any participant or beneficiary can\r\nsimultaneously receive from that employer's or employee organization's\r\narrangement or arrangements to provide medical care benefits, and all such\r\ncombinations are considered for purposes of §§ 20:06:58:01 to 20:06:58:45,\r\ninclusive, to be a single group health plan.
\r\n\r\n\r\n\r\n
This chapter applies to group health plans in\r\naccordance with 45 C.F.R. § 146.136(i)(1) (December 3, 2014).
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:29. Applicability and\r\neffective dates -- Health insurance issuers. The requirements of\r\n§§ 20:06:58:01 to 20:06:58:45, inclusive, apply to a health insurance\r\nissuer offering health insurance coverage for mental health or substance use\r\ndisorder benefits in connection with a group health plan subject to\r\n§ 20:06:58:28. This chapter applies to health insurance issuers offering\r\ngroup health insurance coverage in accordance with 45 C.F.R.\r\n§ 146.136(i)(1) (December 3, 2014).
\r\n\r\n\r\n\r\n
The requirements of §§ 20:06:58:01 to\r\n20:06:58:45, inclusive, apply to health insurance coverage offered by health\r\ninsurance issuer in the individual market in the same manner and to the same\r\nextent as such requirements apply to health insurance coverage offered by a\r\nhealth insurance issuer in connection with a group health plan in the large\r\ngroup market. This chapter applies to health insurance issuers in the\r\nindividual market in accordance with 45 C.F.R. § 147.160 (December 3,\r\n2014). This chapter applies to non-grandfathered and grandfathered health\r\nplans.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:30. Scope. Sections\r\n20:06:58:01 to 20:06:58:45, inclusive, do not:
\r\n\r\n\r\n\r\n
(1) Require a group health plan, or\r\nhealth insurance issuer offering coverage in connection with a group health\r\nplan, to provide any mental health benefits or substance use disorder benefits,\r\nand the provision of benefits by a plan, or health insurance coverage, for one\r\nor more mental health conditions or substance use disorders does not require\r\nthe plan, or health insurance coverage under §§ 20:06:58:01 to\r\n20:06:58:45, inclusive, to provide benefits for any other mental health\r\ncondition or substance use disorder;
\r\n\r\n\r\n\r\n
(2) Require a group health plan, or\r\nhealth insurance issuer offering coverage in connection with a group health\r\nplan, that provides coverage for mental health or substance use disorder\r\nbenefits only to the extent required under 29 C.F.R. § 2713 (December 3,\r\n2014) to provide additional mental health or substance use disorder benefits in\r\nany classification in accordance with §§ 20:06:58:01 to 20:06:58:45, inclusive;\r\nor
\r\n\r\n\r\n\r\n
(3) Affect the terms and conditions\r\nrelating to the amount, duration, or scope of mental health or substance use\r\ndisorder benefits under the plan, or health insurance coverage, except as\r\nspecifically provided in §§ 20:06:58:02 to 20:06:58:25, inclusive.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:31. Coordination with EHB\r\nrequirements. Nothing in §§ 20:06:58:32 to 20:06:58:43, inclusive,\r\nchanges the requirements of 45 CFR 147.150 and 45 CFR 156.115 (December 3,\r\n2014), providing that a health insurance issuer offering non-grandfathered health\r\ninsurance coverage in the individual or small group market providing mental\r\nhealth and substance use disorder services, including behavioral health\r\ntreatment services, as part of essential health benefits required under 45 CFR\r\n156.110(a)(5) and 156.115(a) (December 3, 2014), must comply with the\r\nprovisions of 45 CFR 146.136 (December 3, 2014) to satisfy the requirement to\r\nprovide essential health benefits.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:32. Small employer\r\nexemption. The requirements of §§ 20:06:58:01 to 20:06:58:45,\r\ninclusive, do not apply to a group health plan, or health insurance issuer\r\noffering coverage in connection with a group health plan, for a plan year of a\r\nsmall employer. For purposes of §§ 20:06:58:32 and 20:06:58:33, the term,\r\nsmall employer, means, in connection with a group health plan with respect to a\r\ncalendar year and a plan year, an employer who employed at least a single\r\nindividual, but not more than 50 employees on business days during the\r\npreceding calendar year and who employs at least a single individual on the\r\nfirst day of the plan year.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:33. Determining employer\r\nsize. For purposes of § 20:06:58:32:
\r\n\r\n\r\n\r\n
(1) All persons treated as a single\r\nemployer under subsections (b), (c), (m), and (o) of the Internal Revenue Code\r\nof 1986, codified at 26 U.S.C. 414, are treated as one employer;
\r\n\r\n\r\n\r\n
(2) If an employer was not in existence\r\nthroughout the preceding calendar year, whether it is a small employer is\r\ndetermined based on the average number of employees the employer reasonably\r\nexpects to employ on business days during the current calendar year; and
\r\n\r\n\r\n\r\n
(3) Any reference to an employer for\r\npurposes of the small employer exemption includes a reference to a predecessor\r\nof the employer.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:34. Increased cost\r\nexemption. If the application of §§ 20:06:58:01 to 20:06:58:45,\r\ninclusive, to a group health plan, or health insurance coverage offered in\r\nconnection with such plans, results in an increase for the plan year involved\r\nof the actual total cost of coverage with respect to medical or surgical\r\nbenefits and mental health and substance use disorder benefits as determined\r\nand certified under § 20:06:58:36 by an amount that exceeds the applicable\r\npercentage described in § 20:06:58:36 of the actual total plan costs, the\r\nprovisions of this section shall not apply to such plan, or coverage, during\r\nthe following plan year, and such exemption shall apply to the plan, or\r\ncoverage, for one plan year. An employer or issuer may elect to continue to\r\nprovide mental health and substance use disorder benefits in compliance with\r\nthis section with respect to the plan or coverage involved regardless of any\r\nincrease in total costs.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:35. Applicable percentage.\r\nWith respect to a plan or coverage, the applicable percentage described in\r\n§§ 20:06:58:34 to 20:06:58:43, inclusive, is:
\r\n\r\n\r\n\r\n
(1) Two percent in the case of the\r\nfirst plan year in which this section is applied to the plan or coverage; and
\r\n\r\n(2) One percent in the case of each\r\nsubsequent plan year.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:36. Determinations by\r\nactuaries. Determinations as to increases in actual costs under a plan or\r\ncoverage that are attributable to implementation of the requirements of\r\n§§ 20:06:58:01 to 20:06:58:45, inclusive, shall be made and certified by a\r\nqualified and licensed actuary who is a member in good standing of the American\r\nAcademy of Actuaries. All such determinations must be based on the formula\r\nspecified in paragraph § 20:06:58:37 and shall be in a written report\r\nprepared by the actuary.
\r\n\r\n\r\n\r\n
The group health plan or health insurance issuer\r\nshall maintain the written report described in this section, along with all\r\nsupporting documentation relied upon by the actuary, for a period of six years\r\nfollowing the notification made under § 20:06:58:39.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:37. Formula. The\r\nformula to be used to make the determination under § 20:06:58:36 is\r\nexpressed mathematically as [(E1 -- E0)/T0]\r\n-- D>k. The components mean:
\r\n\r\n\r\n\r\n
(1) E1 is the actual total\r\ncost of coverage with respect to mental health and substance use disorder\r\nbenefits for the base period, including claims paid by the plan or issuer with\r\nrespect to mental health and substance use disorder benefits and administrative\r\ncosts, amortized over time, attributable to providing these benefits consistent\r\nwith the requirements of §§ 20:06:58:01 to 20:06:58:45, inclusive;
\r\n\r\n\r\n\r\n
(2) E0 is the actual total\r\ncost of coverage with respect to mental health and substance use disorder\r\nbenefits for the length of time immediately before the base period and that is\r\nequal in length to the base period, including claims paid by the plan or issuer\r\nwith respect to mental health and substance use disorder benefits and\r\nadministrative costs, amortized over time, attributable to providing these\r\nbenefits;
\r\n\r\n\r\n\r\n
(3) T0 is the actual total\r\ncost of coverage with respect to all benefits during the base period;
\r\n\r\n\r\n\r\n
(4) k is the applicable percentage of\r\nincreased cost specified in paragraph § 20:06:58:35 that is expressed as a\r\nfraction for purposes of this formula; and
\r\n\r\n\r\n\r\n
(5) D is the average change in spending\r\nthat is calculated by applying the formula (E1 -- E0)/T0\r\nto mental health and substance use disorder spending in each of the five years\r\nand then calculating the average change in spending.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:38. Six month\r\ndetermination. If a group health plan or health insurance issuer seeks an\r\nexemption under §§ 20:06:58:34 to 20:06:58:43, inclusive, determinations\r\nunder § 20:06:58:36 may only be made after such plan or coverage has\r\ncomplied with §§ 20:06:58:01 to 20:06:58:45, inclusive, for at least the\r\nfirst six months of the plan year involved.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:39. Notification. A\r\ngroup health plan or health insurance issuer that, based on the certification\r\ndescribed under § 20:06:58:36, qualifies for an exemption under\r\n§§ 20:06:58:34 to 20:06:58:43, inclusive, and elects to implement the\r\nexemption, must notify participants and beneficiaries covered under the plan,\r\nthe director, and the appropriate state agencies of such election.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:40. Participants and\r\nbeneficiaries -- Content of notice. The notice to participants and\r\nbeneficiaries required pursuant to § 20:06:58:39 must include the\r\nfollowing information:
\r\n\r\n\r\n\r\n
(1) A statement that the plan or issuer\r\nis exempt from the requirements of this section and a description of the basis\r\nfor the exemption;
\r\n\r\n\r\n\r\n
(2) The name and telephone number of\r\nthe individual to contact for further information;
\r\n\r\n\r\n\r\n
(3) The plan or issuer name and plan\r\nnumber (PN);
\r\n\r\n\r\n\r\n
(4) The plan administrator's name, address,\r\nand telephone number;
\r\n\r\n\r\n\r\n
(5) For single-employer plans, the plan\r\nsponsor's name, address, and telephone number, if different from subdivision 3\r\nof this section, and the plan sponsor's employer identification number (EIN);
\r\n\r\n\r\n\r\n
(6) The effective date of such\r\nexemption;
\r\n\r\n\r\n\r\n
(7) A statement regarding the ability\r\nof participants and beneficiaries to contact the plan administrator or health\r\ninsurance issuer to see how benefits may be affected as a result of the plan's\r\nor issuer's election of the exemption; and
\r\n\r\n\r\n\r\n
(8) A statement regarding the\r\navailability, upon request and free of charge, of a summary of the information\r\non which the exemption is based, as required under § 20:06:58:43.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:41. Use of summary of\r\nmaterial reductions in covered services or benefits. A plan or issuer may\r\nsatisfy the requirements of § 20:06:58:40 by providing participants and\r\nbeneficiaries, in accordance with § 20:06:58:42, with a summary of\r\nmaterial reductions in covered services or benefits consistent with 29 CFR\r\n2520.104b-3(d) (December 3, 2014) that also includes the information specified\r\nin § 20:06:58:40. However, in all cases, the exemption under\r\n§§ 20:06:58:34 to 20:06:58:43, inclusive, is not effective until 30 days\r\nafter notice required pursuant to § 20:06:58:39 has been sent.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:42. Delivery. The plan\r\nor issuer is required to provide the notice described in §§ 20:06:58:40 to\r\n20:06:58:43, inclusive, to all participants and beneficiaries. The plan or\r\nissuer may furnish the notice by any method of delivery that satisfies the\r\nrequirements of section 104(b)(1) of ERISA (29 U.S.C. 1024(b)(1)) (December 3,\r\n2014) and its implementing regulations. If the notice is provided to the\r\nparticipant and any beneficiaries at the participant's last known address, then\r\nthe requirements of §§ 20:06:58:40 to 20:06:58:43, inclusive, are\r\nsatisfied with respect to the participant and all beneficiaries residing at\r\nthat address. If a beneficiary's last known address is different from the\r\nparticipant's last known address, a separate notice is required to be provided\r\nto the beneficiary at the beneficiary's last known address.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:43. Availability\r\nof documentation. The plan or issuer must make available to participants\r\nand beneficiaries, or their representatives, on request and at no charge, a\r\nsummary of the information on which the exemption was based. For purposes of §§ 20:06:58:34\r\nto 20:06:58:43, inclusive, an individual who is not a participant or\r\nbeneficiary and who presents a notice described in §§ 20:06:58:40 to\r\n20:06:58:43, inclusive, is considered to be a representative. A representative\r\nmay request the summary of information by providing the plan a copy of the\r\nnotice provided to the participant under §§ 20:06:58:40 to 20:06:58:43,\r\ninclusive, with any personally identifiable information redacted. The summary\r\nof information must include the incurred expenditures, the base period, the\r\ndollar amount of claims incurred during the base period that would have been\r\ndenied under the terms of the plan or coverage absent amendments required to\r\ncomply with §§ 20:06:58:02 to 20:06:58:25, inclusive, the administration\r\ncosts related to those claims, and other administrative costs attributable to\r\ncomplying with the requirements of this section. In no event may the summary of\r\ninformation include any personally identifiable information.
\r\n\r\n\r\n\r\n
Source:\r\n41 SDR 93, effective December 3, 2014.
\r\n\r\nGeneral\r\nAuthority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw\r\nImplemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:44. Sale of nonparity\r\nhealth insurance coverage. A health insurance issuer may not sell a policy,\r\ncertificate, or contract of insurance that fails to comply with\r\n§§ 20:06:58:02 to 20:06:58:25, inclusive, except to a plan for a year for\r\nwhich the plan is exempt from requirements of §§ 20:06:58:01 to\r\n20:06:58:45, inclusive, because the plan meets requirements under\r\n§§ 20:06:58:32 and 20:06:58:33 or §§ 20:06:58:34 to 20:06:58:43,\r\ninclusive.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n
20:06:58:45. Special effective date\r\nfor certain collective-bargained plans. For a group health plan maintained\r\npursuant to one or more collective bargaining agreements ratified before\r\nOctober 3, 2008, the requirements of §§ 20:06:58:01 to 20:06:58:45, inclusive,\r\ndo not apply to the plan, or health insurance coverage offered in connection\r\nwith the plan, for plan years beginning before the date on which the last of\r\nthe collective bargaining agreements terminates, determined without regard to\r\nany extension agreed to after October 3, 2008.
\r\n\r\n\r\n\r\n
Source: 41 SDR 93, effective December 3,\r\n2014.
\r\n\r\nGeneral Authority: SDCL 58-17-87, 58-18-79, 58-18-79(15).
\r\n\r\nLaw Implemented: SDCL 58-17-87, 58-18-79, 58-18-80.
\r\n\r\n\r\n\r\n