Article 19c.--NONPROFIT MEDICAL AND HOSPITAL SERVICE CORPORATIONS
40-19c06.Subscription agreements; contents;continuation of subscription agreements; converted subscriptionagreements.(a) No subscription agreement, except as provided in subsection (d), between acorporation organized under the nonprofit medical and hospital servicecorporation act and asubscriber, shall entitle more than one person to benefits, except that a"family subscriptionagreement" may be issued, at an established subscription charge, to a husbandand wife, or husband,wife, and their dependent child or children and any other person dependent uponthe subscriber. Only the subscriber must be named in the subscriptionagreement.
(b) Every subscription agreement entered into by any such corporation withany subscribershall be in writing and a certificate stating the terms and conditions shall befurnished to the subscriber to be kept by the subscriber. No such certificateform shall be made, issued or delivered in this state unless it contains thefollowing provisions: (1) A statement of the nature of the benefits to befurnished and the period during which they will be furnished, and if there areany benefits to be excepted, a detailed statement of such exceptions printed ashereinafter specified; (2) a statement of the terms and conditions, if any,upon which the subscription agreement may be canceled or otherwise terminatedat the option of either party; (3) a statement that the subscription agreementincludes the endorsements and attached papers, if any, and contains the entirecontract; (4) a statement that no statement by the subscriber in theapplication for a subscription agreement shall avoid the subscription agreementor be used in any legal proceeding, unless such application or an exact copy isincluded in or attached to such subscription agreement, and that no agent orrepresentative of such corporation, other than an officer or officersdesignated therein, is authorized to change the subscription agreement or waiveany of its provisions; (5) a statement that if the subscriber defaults inmaking any payments under the subscription agreement, the subsequentacceptance of a payment by the corporation or by one of its duly authorizedagents shall reinstate the subscription agreement but with respect to sicknessand injury, only to cover such sickness as may be first manifested more than 10days after the date of such acceptance; (6) a statement of the period of gracewhich will be allowed the subscriber for making any payment due under thesubscription agreement. Such period shall not be less than 10 days; and (7) ifapplicable, a statement of the kind of hospital in which the subscriber mayreceive benefits and the types of benefits to which the subscriber may beentitled to in such kinds of hospitals. The subscriber shall be entitled tobenefits in any nonparticipating hospital in Kansas which is licensed by thesecretary of health and environment and in which the average length of stay ofpatient is similar to the average length of stay in participating hospitals.The agreements issued by any corporation currently or previously organizedunder this act may include provisions allowing for direct payment of benefitsonly to contracting health care providers.
(c) In every such subscription agreement made, issued or delivered in thisstate: (1) All printed portions shall be plainly printed; (2) the exceptions ofthe subscription agreement shall appear with the same prominence as thebenefits to which they apply; (3) if the subscription agreement contains anyprovisions purporting to make any portion of the articles of incorporation orbylaws of the corporation a part of the subscription agreement, such portionshall be set forth in full; and (4) there shall be a brief description of thesubscription agreement on the first page and on its filing back.
(d) Any such corporations may issue a group or blanket subscriptionagreement, provided the group of persons insured conforms to the requirementsof law applicable to other companies writing group or blanket sickness andaccident insurance policies and provided such subscription agreement and theindividual certificates issued to members of the group shall comply insubstance with this section. Any such subscription agreement may provide forthe adjustment of the premiums based upon the experience at the end of thefirst year or of any subsequent year of insurance, and such readjustment may bemade retroactive in the form of a rate credit or a cash refund.
(e) (1) Any group subscription agreement issued pursuant to subsection (d)shall provide that an employee or member or such employee's or member's covereddependents whose insurance under the group subscription agreement has beenterminated for any reason, including discontinuance of the group in itsentirety or with respect to an insured class, and who has been continuouslyinsured under the group subscription agreement or under any group policy orsubscription agreement providing similar benefits which it replaces for atleast three months immediately prior to termination, shall be entitled to havesuch coverage nonetheless continued under the group policy for a period of 18months and at the end of such eighteen-month period of continuation, suchemployee or member or such employee's or member's covered dependents shall beentitled to obtain, at the employee's, member's or dependent's option either:
(A) A converted subscription agreement providing coverage equal to 80% ofthat afforded under the group subscription agreement for basic hospital,surgical and medical benefits. Persons selecting this option shall also beentitled to obtain major medical expense coverage which will provide hospital,medical and surgical expense benefits to an aggregate maximum of not less than$50,000. The major medical expense coverage may be subject to a copayment bythe covered person of not more than 20% of covered charges and a deductiblestated on a per person, per family, per illness, per benefit period, or peryear basis or a combination of such bases of not more than $500 per personsubject to a maximum annual deductible of $750 per family; or
(B) a subscription agreement which imposes a deductible of not less than$1,000 per subscriber and not less than $2,000 per family and subjects thecovered person to a copayment of not more than 20% of covered charges with a$1,000 maximum copayment per subscriber and $2,000 maximum copayment per familyper contract year and providing a lifetime maximum benefit of not less than$1,000,000.
(2) The requirements imposed by this subsection (e) shall not apply to agroup subscription agreement which provides benefits for specific diseases orfor accidental injuries only or any group subscription agreement issued to anemployer subject to the continuation and conversion obligations set forth attitle I, subtitle B, part 6 of the employee retirement income security act of1974 or at title XXII of the public health service act, as each act was ineffect on January 1, 1987, to the extent federal law provides the employee ormember or such employee's or member's covered dependents with equal or greatercontinuation or conversion rights, or any employee or member or such employee'sor member's covered dependents whose termination of insurance under the groupsubscription agreement occurred because:
(A) Such person failed to pay any required contribution after receivingreasonable notice of such required contribution from the insurer in accordancewith rules and regulations adopted by the commissioner of insurance;
(B) any discontinued group coverage was replaced by similar group coveragewithin 31 days; or the employee or member is or could be covered by medicare(title XVIII of the United States social security act as added by the socialsecurity amendments of 1965 or as later amended or superseded);
(C) coverage for the employee or member, or any covered dependent thereof,was terminated for cause as permitted by the group policy or certificate ofcoverage approved by the commissioner; or
(D) the employee or member is or could be covered to the same extent by anyother insured or lawful self-insured arrangement which provides expenseincurred hospital, surgical or medical coverage and benefits for individuals ina group under which the person was not covered prior to such termination. Inthe event the group policy is terminated and not replaced the insurer may issuean individual policy or certificate in lieu of a conversion policy or thecontinuation of group coverage required herein if the individual policy orcertificate provides substantially similar coverage for the same or lesspremium as the group subscription agreement. In any event, the employee ormember shall have the option to be issued a conversion policy which meets therequirements set forth in this subsection (e) in lieu of the right to continuegroup coverage.
(3) Written application for the converted subscription agreement shall bemade and the first premium paid to the insurer not later than 31 days aftertermination of the group coverage and shall become effective the day followingthe termination of insurance under the group subscription agreement. Inaddition, the converted subscription agreement shall be subject to theprovisions contained in paragraphs (2), (3), (4), (5), (6), (7), (8), (9),(10), (13), (14), (15), (16), (17), (18), (19), and (20) of subsection (j) ofK.S.A. 40-2209, and amendments thereto.
Article 19c.--NONPROFIT MEDICAL AND HOSPITAL SERVICE CORPORATIONS
40-19c06.Subscription agreements; contents;continuation of subscription agreements; converted subscriptionagreements.(a) No subscription agreement, except as provided in subsection (d), between acorporation organized under the nonprofit medical and hospital servicecorporation act and asubscriber, shall entitle more than one person to benefits, except that a"family subscriptionagreement" may be issued, at an established subscription charge, to a husbandand wife, or husband,wife, and their dependent child or children and any other person dependent uponthe subscriber. Only the subscriber must be named in the subscriptionagreement.
(b) Every subscription agreement entered into by any such corporation withany subscribershall be in writing and a certificate stating the terms and conditions shall befurnished to the subscriber to be kept by the subscriber. No such certificateform shall be made, issued or delivered in this state unless it contains thefollowing provisions: (1) A statement of the nature of the benefits to befurnished and the period during which they will be furnished, and if there areany benefits to be excepted, a detailed statement of such exceptions printed ashereinafter specified; (2) a statement of the terms and conditions, if any,upon which the subscription agreement may be canceled or otherwise terminatedat the option of either party; (3) a statement that the subscription agreementincludes the endorsements and attached papers, if any, and contains the entirecontract; (4) a statement that no statement by the subscriber in theapplication for a subscription agreement shall avoid the subscription agreementor be used in any legal proceeding, unless such application or an exact copy isincluded in or attached to such subscription agreement, and that no agent orrepresentative of such corporation, other than an officer or officersdesignated therein, is authorized to change the subscription agreement or waiveany of its provisions; (5) a statement that if the subscriber defaults inmaking any payments under the subscription agreement, the subsequentacceptance of a payment by the corporation or by one of its duly authorizedagents shall reinstate the subscription agreement but with respect to sicknessand injury, only to cover such sickness as may be first manifested more than 10days after the date of such acceptance; (6) a statement of the period of gracewhich will be allowed the subscriber for making any payment due under thesubscription agreement. Such period shall not be less than 10 days; and (7) ifapplicable, a statement of the kind of hospital in which the subscriber mayreceive benefits and the types of benefits to which the subscriber may beentitled to in such kinds of hospitals. The subscriber shall be entitled tobenefits in any nonparticipating hospital in Kansas which is licensed by thesecretary of health and environment and in which the average length of stay ofpatient is similar to the average length of stay in participating hospitals.The agreements issued by any corporation currently or previously organizedunder this act may include provisions allowing for direct payment of benefitsonly to contracting health care providers.
(c) In every such subscription agreement made, issued or delivered in thisstate: (1) All printed portions shall be plainly printed; (2) the exceptions ofthe subscription agreement shall appear with the same prominence as thebenefits to which they apply; (3) if the subscription agreement contains anyprovisions purporting to make any portion of the articles of incorporation orbylaws of the corporation a part of the subscription agreement, such portionshall be set forth in full; and (4) there shall be a brief description of thesubscription agreement on the first page and on its filing back.
(d) Any such corporations may issue a group or blanket subscriptionagreement, provided the group of persons insured conforms to the requirementsof law applicable to other companies writing group or blanket sickness andaccident insurance policies and provided such subscription agreement and theindividual certificates issued to members of the group shall comply insubstance with this section. Any such subscription agreement may provide forthe adjustment of the premiums based upon the experience at the end of thefirst year or of any subsequent year of insurance, and such readjustment may bemade retroactive in the form of a rate credit or a cash refund.
(e) (1) Any group subscription agreement issued pursuant to subsection (d)shall provide that an employee or member or such employee's or member's covereddependents whose insurance under the group subscription agreement has beenterminated for any reason, including discontinuance of the group in itsentirety or with respect to an insured class, and who has been continuouslyinsured under the group subscription agreement or under any group policy orsubscription agreement providing similar benefits which it replaces for atleast three months immediately prior to termination, shall be entitled to havesuch coverage nonetheless continued under the group policy for a period of 18months and at the end of such eighteen-month period of continuation, suchemployee or member or such employee's or member's covered dependents shall beentitled to obtain, at the employee's, member's or dependent's option either:
(A) A converted subscription agreement providing coverage equal to 80% ofthat afforded under the group subscription agreement for basic hospital,surgical and medical benefits. Persons selecting this option shall also beentitled to obtain major medical expense coverage which will provide hospital,medical and surgical expense benefits to an aggregate maximum of not less than$50,000. The major medical expense coverage may be subject to a copayment bythe covered person of not more than 20% of covered charges and a deductiblestated on a per person, per family, per illness, per benefit period, or peryear basis or a combination of such bases of not more than $500 per personsubject to a maximum annual deductible of $750 per family; or
(B) a subscription agreement which imposes a deductible of not less than$1,000 per subscriber and not less than $2,000 per family and subjects thecovered person to a copayment of not more than 20% of covered charges with a$1,000 maximum copayment per subscriber and $2,000 maximum copayment per familyper contract year and providing a lifetime maximum benefit of not less than$1,000,000.
(2) The requirements imposed by this subsection (e) shall not apply to agroup subscription agreement which provides benefits for specific diseases orfor accidental injuries only or any group subscription agreement issued to anemployer subject to the continuation and conversion obligations set forth attitle I, subtitle B, part 6 of the employee retirement income security act of1974 or at title XXII of the public health service act, as each act was ineffect on January 1, 1987, to the extent federal law provides the employee ormember or such employee's or member's covered dependents with equal or greatercontinuation or conversion rights, or any employee or member or such employee'sor member's covered dependents whose termination of insurance under the groupsubscription agreement occurred because:
(A) Such person failed to pay any required contribution after receivingreasonable notice of such required contribution from the insurer in accordancewith rules and regulations adopted by the commissioner of insurance;
(B) any discontinued group coverage was replaced by similar group coveragewithin 31 days; or the employee or member is or could be covered by medicare(title XVIII of the United States social security act as added by the socialsecurity amendments of 1965 or as later amended or superseded);
(C) coverage for the employee or member, or any covered dependent thereof,was terminated for cause as permitted by the group policy or certificate ofcoverage approved by the commissioner; or
(D) the employee or member is or could be covered to the same extent by anyother insured or lawful self-insured arrangement which provides expenseincurred hospital, surgical or medical coverage and benefits for individuals ina group under which the person was not covered prior to such termination. Inthe event the group policy is terminated and not replaced the insurer may issuean individual policy or certificate in lieu of a conversion policy or thecontinuation of group coverage required herein if the individual policy orcertificate provides substantially similar coverage for the same or lesspremium as the group subscription agreement. In any event, the employee ormember shall have the option to be issued a conversion policy which meets therequirements set forth in this subsection (e) in lieu of the right to continuegroup coverage.
(3) Written application for the converted subscription agreement shall bemade and the first premium paid to the insurer not later than 31 days aftertermination of the group coverage and shall become effective the day followingthe termination of insurance under the group subscription agreement. Inaddition, the converted subscription agreement shall be subject to theprovisions contained in paragraphs (2), (3), (4), (5), (6), (7), (8), (9),(10), (13), (14), (15), (16), (17), (18), (19), and (20) of subsection (j) ofK.S.A. 40-2209, and amendments thereto.
Article 19c.--NONPROFIT MEDICAL AND HOSPITAL SERVICE CORPORATIONS
40-19c06.Subscription agreements; contents;continuation of subscription agreements; converted subscriptionagreements.(a) No subscription agreement, except as provided in subsection (d), between acorporation organized under the nonprofit medical and hospital servicecorporation act and asubscriber, shall entitle more than one person to benefits, except that a"family subscriptionagreement" may be issued, at an established subscription charge, to a husbandand wife, or husband,wife, and their dependent child or children and any other person dependent uponthe subscriber. Only the subscriber must be named in the subscriptionagreement.
(b) Every subscription agreement entered into by any such corporation withany subscribershall be in writing and a certificate stating the terms and conditions shall befurnished to the subscriber to be kept by the subscriber. No such certificateform shall be made, issued or delivered in this state unless it contains thefollowing provisions: (1) A statement of the nature of the benefits to befurnished and the period during which they will be furnished, and if there areany benefits to be excepted, a detailed statement of such exceptions printed ashereinafter specified; (2) a statement of the terms and conditions, if any,upon which the subscription agreement may be canceled or otherwise terminatedat the option of either party; (3) a statement that the subscription agreementincludes the endorsements and attached papers, if any, and contains the entirecontract; (4) a statement that no statement by the subscriber in theapplication for a subscription agreement shall avoid the subscription agreementor be used in any legal proceeding, unless such application or an exact copy isincluded in or attached to such subscription agreement, and that no agent orrepresentative of such corporation, other than an officer or officersdesignated therein, is authorized to change the subscription agreement or waiveany of its provisions; (5) a statement that if the subscriber defaults inmaking any payments under the subscription agreement, the subsequentacceptance of a payment by the corporation or by one of its duly authorizedagents shall reinstate the subscription agreement but with respect to sicknessand injury, only to cover such sickness as may be first manifested more than 10days after the date of such acceptance; (6) a statement of the period of gracewhich will be allowed the subscriber for making any payment due under thesubscription agreement. Such period shall not be less than 10 days; and (7) ifapplicable, a statement of the kind of hospital in which the subscriber mayreceive benefits and the types of benefits to which the subscriber may beentitled to in such kinds of hospitals. The subscriber shall be entitled tobenefits in any nonparticipating hospital in Kansas which is licensed by thesecretary of health and environment and in which the average length of stay ofpatient is similar to the average length of stay in participating hospitals.The agreements issued by any corporation currently or previously organizedunder this act may include provisions allowing for direct payment of benefitsonly to contracting health care providers.
(c) In every such subscription agreement made, issued or delivered in thisstate: (1) All printed portions shall be plainly printed; (2) the exceptions ofthe subscription agreement shall appear with the same prominence as thebenefits to which they apply; (3) if the subscription agreement contains anyprovisions purporting to make any portion of the articles of incorporation orbylaws of the corporation a part of the subscription agreement, such portionshall be set forth in full; and (4) there shall be a brief description of thesubscription agreement on the first page and on its filing back.
(d) Any such corporations may issue a group or blanket subscriptionagreement, provided the group of persons insured conforms to the requirementsof law applicable to other companies writing group or blanket sickness andaccident insurance policies and provided such subscription agreement and theindividual certificates issued to members of the group shall comply insubstance with this section. Any such subscription agreement may provide forthe adjustment of the premiums based upon the experience at the end of thefirst year or of any subsequent year of insurance, and such readjustment may bemade retroactive in the form of a rate credit or a cash refund.
(e) (1) Any group subscription agreement issued pursuant to subsection (d)shall provide that an employee or member or such employee's or member's covereddependents whose insurance under the group subscription agreement has beenterminated for any reason, including discontinuance of the group in itsentirety or with respect to an insured class, and who has been continuouslyinsured under the group subscription agreement or under any group policy orsubscription agreement providing similar benefits which it replaces for atleast three months immediately prior to termination, shall be entitled to havesuch coverage nonetheless continued under the group policy for a period of 18months and at the end of such eighteen-month period of continuation, suchemployee or member or such employee's or member's covered dependents shall beentitled to obtain, at the employee's, member's or dependent's option either:
(A) A converted subscription agreement providing coverage equal to 80% ofthat afforded under the group subscription agreement for basic hospital,surgical and medical benefits. Persons selecting this option shall also beentitled to obtain major medical expense coverage which will provide hospital,medical and surgical expense benefits to an aggregate maximum of not less than$50,000. The major medical expense coverage may be subject to a copayment bythe covered person of not more than 20% of covered charges and a deductiblestated on a per person, per family, per illness, per benefit period, or peryear basis or a combination of such bases of not more than $500 per personsubject to a maximum annual deductible of $750 per family; or
(B) a subscription agreement which imposes a deductible of not less than$1,000 per subscriber and not less than $2,000 per family and subjects thecovered person to a copayment of not more than 20% of covered charges with a$1,000 maximum copayment per subscriber and $2,000 maximum copayment per familyper contract year and providing a lifetime maximum benefit of not less than$1,000,000.
(2) The requirements imposed by this subsection (e) shall not apply to agroup subscription agreement which provides benefits for specific diseases orfor accidental injuries only or any group subscription agreement issued to anemployer subject to the continuation and conversion obligations set forth attitle I, subtitle B, part 6 of the employee retirement income security act of1974 or at title XXII of the public health service act, as each act was ineffect on January 1, 1987, to the extent federal law provides the employee ormember or such employee's or member's covered dependents with equal or greatercontinuation or conversion rights, or any employee or member or such employee'sor member's covered dependents whose termination of insurance under the groupsubscription agreement occurred because:
(A) Such person failed to pay any required contribution after receivingreasonable notice of such required contribution from the insurer in accordancewith rules and regulations adopted by the commissioner of insurance;
(B) any discontinued group coverage was replaced by similar group coveragewithin 31 days; or the employee or member is or could be covered by medicare(title XVIII of the United States social security act as added by the socialsecurity amendments of 1965 or as later amended or superseded);
(C) coverage for the employee or member, or any covered dependent thereof,was terminated for cause as permitted by the group policy or certificate ofcoverage approved by the commissioner; or
(D) the employee or member is or could be covered to the same extent by anyother insured or lawful self-insured arrangement which provides expenseincurred hospital, surgical or medical coverage and benefits for individuals ina group under which the person was not covered prior to such termination. Inthe event the group policy is terminated and not replaced the insurer may issuean individual policy or certificate in lieu of a conversion policy or thecontinuation of group coverage required herein if the individual policy orcertificate provides substantially similar coverage for the same or lesspremium as the group subscription agreement. In any event, the employee ormember shall have the option to be issued a conversion policy which meets therequirements set forth in this subsection (e) in lieu of the right to continuegroup coverage.
(3) Written application for the converted subscription agreement shall bemade and the first premium paid to the insurer not later than 31 days aftertermination of the group coverage and shall become effective the day followingthe termination of insurance under the group subscription agreement. Inaddition, the converted subscription agreement shall be subject to theprovisions contained in paragraphs (2), (3), (4), (5), (6), (7), (8), (9),(10), (13), (14), (15), (16), (17), (18), (19), and (20) of subsection (j) ofK.S.A. 40-2209, and amendments thereto.
