NAC: CHAPTER 689A - INDIVIDUAL HEALTH INSURANCE

[Rev. 5/25/2022 11:36:46 AM]

[NAC-689A Revised Date: 12-17]

CHAPTER 689A - INDIVIDUAL HEALTH INSURANCE

GENERAL PROVISIONS

689A.0005 “Commissioner” defined.

689A.001 “Division” defined.

ADVERTISING

689A.010 Definitions.

689A.020 “Advertisement” defined.

689A.030 “Exception” defined.

689A.040 “Insurer” defined.

689A.050 “Limitation” defined.

689A.060 “Policy” defined.

689A.070 “Reduction” defined.

689A.110 Advertisements to be truthful and not misleading.

689A.120 Benefits, losses and premiums.

689A.130 Renewability, cancellation and termination.

689A.140 Manner of disclosure.

689A.150 Testimonials.

689A.160 Statistics.

689A.170 Effect of inspection or offer of refund.

689A.180 Disclosure of variance in premiums; combination of policies.

689A.190 Comparisons and disparagement.

689A.200 Advertising outside jurisdiction.

689A.210 Identity of insurer.

689A.220 Group insurance.

689A.230 Introductory, initial or special offers.

689A.240 Examination by governmental agency; endorsements.

689A.250 Settlement of claims.

689A.260 Statements regarding insurer.

689A.270 File of advertisements.

FORMS

689A.310 Acceptance of forms approved by Division.

689A.320 Unused portions.

689A.330 Permitted changes.

689A.340 Statements completed by claimants or policyholders.

689A.360 Amendments.

MISCELLANEOUS PROVISIONS

689A.411 Summary of coverage: Filing, contents and delivery of disclosure.

689A.421 Programs of health insurance using preferred providers of health care.

689A.425 Coverage for prescription drugs: Removal from approved formulary prohibited; exception; movement to different tier in formulary; addition of drug to formulary.

689A.433 Carrier prohibited from requiring purchase of other insurance as prerequisite to purchase or renewal of health benefit plan.

PORTABILITY AND ACCOUNTABILITY

689A.434 “Short-term health insurance policy” interpreted.

689A.475 Evidence of creditable coverage.

SYSTEM FOR RESOLVING COMPLAINTS OF INSUREDS

689A.605 Requirements for approval.

GENERAL PROVISIONS

NAC 689A.0005 “Commissioner” defined. As used in this chapter, unless the context otherwise requires, “Commissioner” means the Commissioner of Insurance.

(Supplied in codification)

NAC 689A.001 “Division” defined. (NRS 679B.130) As used in this chapter, unless the context otherwise requires, “Division” means the Division of Insurance of the Department of Business and Industry.

(Added to NAC by Comm’r of Insurance, eff. 5-27-92)

ADVERTISING

NAC 689A.010 Definitions. As used in NAC 689A.010 to 689A.270, inclusive, unless the context otherwise requires, the words and terms defined in NAC 689A.020 to 689A.070, inclusive, have the meanings ascribed to them in those sections.

(Supplied in codification)

NAC 689A.020 “Advertisement” defined. (NRS 679B.130) “Advertisement” means:

1. Printed and published material and descriptive literature used in newspapers, magazines, radio and television scripts, billboards and similar displays;

2. Descriptive literature and sales aids of all kinds issued by an insurer for presentation to members of the public, including, but not limited to, circulars, leaflets, booklets, depictions, illustrations and form letters; and

3. Prepared sales talks, presentations and material for use by agents and brokers, and representations made by the agents and brokers in accordance with them.

[Comm’r of Insurance, LH-1 § 1 subsec. A, eff. 5-13-72]

NAC 689A.030 “Exception” defined. (NRS 679B.130) “Exception” means:

1. A provision in a policy which entirely eliminates coverage for a specified hazard; or

2. A statement of a risk not assumed by the insurer under the policy.

[Comm’r of Insurance, LH-1 § 3, eff. 5-13-72]

NAC 689A.040 “Insurer” defined. (NRS 679B.130) “Insurer” means a natural person, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyds, fraternal benefit society or any other entity engaged in the advertisement of a policy.

[Comm’r of Insurance, LH-1 § 1 subsec. C, eff. 5-13-72]

NAC 689A.050 “Limitation” defined. (NRS 679B.130) “Limitation” means any provision, other than an exception or a reduction, which restricts coverage under the policy.

[Comm’r of Insurance, LH-1 § 3 subsec. B par. 3, eff. 5-13-72]

NAC 689A.060 “Policy” defined. (NRS 679B.130) “Policy” means any policy, plan, certificate, contract, statement of coverage, rider or endorsement which provides accident or sickness benefits or medical, surgical or hospital expense benefits, whether on a cash indemnity, reimbursement or service basis, except when issued in connection with another kind of insurance other than life or as disability and double indemnity benefits included in life insurance and annuity contracts.

[Comm’r of Insurance, LH-1 § 1 subsec. B, eff. 5-13-72]

NAC 689A.070 “Reduction” defined. (NRS 679B.130) “Reduction” means any provision which reduces the amount of a benefit and by which payment upon the occurrence of a loss is less than would be otherwise payable if the reduction clause had not been in effect.

[Comm’r of Insurance, LH-1 § 3 subsec. B par. 2, eff. 5-13-72]

NAC 689A.110 Advertisements to be truthful and not misleading. (NRS 679B.130) Advertisements must be truthful and not misleading in fact or by implication. A word or phrase may not be used if its meaning is clear only by implication or by familiarity with insurance terminology.

[Comm’r of Insurance, LH-1 § 2, eff. 5-13-72]

NAC 689A.120 Benefits, losses and premiums. (NRS 679B.130)

1. Words, phrases or illustrations may not be used in a manner which has the capacity or tendency to deceive as to the extent of any policy benefit payable, loss covered or premium payable.

2. The terms “all,” “full,” “complete,” “comprehensive,” “unlimited,” “up to,” “as high as,” “this policy will pay your hospital and surgical bills” or “this policy will replace your income,” or similar terms, may not be used to exaggerate any benefit beyond the terms of the policy, but may be used only in a manner which fairly describes the benefit.

3. A policy covering only one disease or a list of specified diseases may not be advertised in a manner which implies coverage beyond the terms of the policy. Synonymous terms may not be used to refer to any disease so as to imply broader coverage than is the fact.

4. The benefits of a policy which provide for payments in varying amounts for the same loss occurring under different conditions, or which provide benefits only when a loss occurs under certain conditions, may not be advertised without disclosing the limited conditions under which benefits are provided by the policy.

5. Phrases such as “this policy pays $1,800 for hospital room and board expenses” may not be used unless the advertisement indicates the maximum daily benefit and the maximum time limit for hospital room and board expenses.

6. When an advertisement refers to any amount of money, period of time for which any benefit is payable, cost of policy, specific benefit or the loss for which a benefit is payable, it must also disclose those exceptions, reductions and limitations affecting the basic provisions of the policy without which the advertisement would have the capacity and tendency to mislead or deceive.

7. When a policy contains a time period between the effective date of the policy and the effective date of coverage under the policy or a time period between the date a loss occurs and the date benefits begin to accrue for such loss, an advertisement of the policy must disclose the existence of such periods.

8. An advertisement must disclose the extent to which any loss is not covered if the cause of such loss is traceable to a condition existing prior to the effective date of the policy.

9. When a policy does not cover losses traceable to preexisting conditions, no advertisement of the policy may state or imply that the applicant’s physical condition or medical history will not affect the issuance of the policy or payment of a claim thereunder. This limits the use of the phrase “no medical examination required” and phrases of similar import.

[Comm’r of Insurance, LH-1 part § 3, eff. 5-13-72]

NAC 689A.130 Renewability, cancellation and termination. (NRS 679B.130) An advertisement which:

1. Refers to renewability, cancellation or termination of a policy;

2. Refers to a policy benefit; or

3. States or illustrates time or age in connection with eligibility of applicants or continuation of the policy,

Ê must disclose the provisions relating to renewability, cancellation and termination and any modification of benefits, losses covered or premiums because of age or for other reasons in a manner which does not minimize or render obscure the qualifying conditions.

[Comm’r of Insurance, LH-1 § 4, eff. 5-13-72]

NAC 689A.140 Manner of disclosure. (NRS 679B.130) All information required to be disclosed by NAC 689A.010 to 689A.270, inclusive, must be set out conspicuously and in close conjunction with the statements to which the information relates or under appropriate captions of such prominence that the information is not minimized, rendered obscure, presented in an ambiguous fashion or intermingled with the context of the advertisement so as to be confusing or misleading.

[Comm’r of Insurance, LH-1 § 5, eff. 5-13-72]

NAC 689A.150 Testimonials. (NRS 679B.130) Testimonials used in advertisements must be genuine, represent the current opinion of the author, be applicable to the policy advertised and be accurately reproduced. The insurer, in using a testimonial, makes as its own all of the statements contained therein, and the advertisement including such statements is subject to all of the provisions of this chapter.

[Comm’r of Insurance, LH-1 § 6, eff. 5-13-72]

NAC 689A.160 Statistics. (NRS 679B.130) An advertisement which includes the amounts of claims paid, the number of persons insured or similar statistical information relating to any insurer or policy must not be used unless it accurately reflects all relevant facts. The advertisement must not imply that statistics are derived from the policy advertised unless that is the fact.

[Comm’r of Insurance, LH-1 § 7, eff. 5-13-72]

NAC 689A.170 Effect of inspection or offer of refund. (NRS 679B.130) An offer in an advertisement to permit a prospective buyer to inspect the policy or an offer of a refund of premiums paid is not a cure for misleading or deceptive statements contained in the advertisement.

[Comm’r of Insurance, LH-1 § 8, eff. 5-13-72]

NAC 689A.180 Disclosure of variance in premiums; combination of policies. (NRS 679B.130)

1. When a choice of the amount of benefits is referred to, an advertisement must disclose that the amount of benefits provided depends upon the plan selected and that the premium will vary with the amount of benefits.

2. When an advertisement refers to various benefits which may be contained in two or more policies, other than group master policies, the advertisement must disclose that the benefits are provided only through a combination of policies.

[Comm’r of Insurance, LH-1 § 9, eff. 5-13-72]

NAC 689A.190 Comparisons and disparagement. (NRS 679B.130) An advertisement must not directly or indirectly make unfair or incomplete comparisons of policies or benefits, or otherwise falsely disparage competitors or their policies, services or business methods.

[Comm’r of Insurance, LH-1 § 10, eff. 5-13-72]

NAC 689A.200 Advertising outside jurisdiction. (NRS 679B.130)

1. An advertisement which is intended to be seen or heard beyond the limits of the jurisdiction in which the insurer is licensed must not imply that the insurer is licensed beyond those limits.

2. Such advertisements by direct mail insurers must state that the insurer is not licensed in a specified state or states, by use of some language such as “This Company is not licensed in State B.”

[Comm’r of Insurance, LH-1 § 11, eff. 5-13-72]

NAC 689A.210 Identity of insurer. (NRS 679B.130) The identity of the insurer must be made clear in all of its advertisements. An advertisement must not include a trade name, service mark, slogan, symbol or other device which has the capacity and tendency to mislead or deceive as to the true identity of the insurer.

[Comm’r of Insurance, LH-1 § 12, eff. 5-13-72]

NAC 689A.220 Group insurance. (NRS 679B.130) Unless a policyholder becomes a member of a group by purchasing insurance, an advertisement of a particular policy must not state or imply that prospective policyholders become members of a group and as such enjoy special rates or underwriting privileges.

[Comm’r of Insurance, LH-1 § 13, eff. 5-13-72]

NAC 689A.230 Introductory, initial or special offers. (NRS 679B.130) An advertisement must not state or imply that a particular policy or combination of policies is an introductory, initial or special offer and that the applicant will receive advantages by accepting the offer unless the statement or implication is true.

[Comm’r of Insurance, LH-1 § 14, eff. 5-13-72]

NAC 689A.240 Examination by governmental agency; endorsements. (NRS 679B.130)

1. An advertisement must not state or imply that an insurer or a policy has been approved or an insurer’s financial condition has been examined and found to be satisfactory by a governmental agency unless the statement or implication is true.

2. An advertisement must not state or imply that an insurer or a policy has been approved or endorsed by any person, group of persons, society, association or other organization unless the statement or implication is true.

[Comm’r of Insurance, LH-1 § 15, eff. 5-13-72]

NAC 689A.250 Settlement of claims. (NRS 679B.130) An advertisement must not contain any untrue statements with respect to the time within which claims are paid or any statements which imply that claim settlements will be liberal or generous beyond the terms of the policy.

[Comm’r of Insurance, LH-1 § 16, eff. 5-13-72]

NAC 689A.260 Statements regarding insurer. (NRS 679B.130) An advertisement may not contain statements which are untrue in fact or misleading with respect to the insurer’s assets, corporate structure, financial standing, age or relative position in the insurance business.

[Comm’r of Insurance, LH-1 § 17, eff. 5-13-72]

NAC 689A.270 File of advertisements. (NRS 679B.130) Each accident and health insurer shall maintain at its home or principal office a complete file containing every printed, published or prepared advertisement of individual policies and typical printed, published or prepared advertisements of blanket, franchise and group policies disseminated in this or any other state whether or not licensed in the other state, with a notation attached to each advertisement which indicates the manner and extent of distribution and the form number of any policy advertised. The file is subject to inspection by the Division. All advertisements must be retained for at least 3 years.

[Comm’r of Insurance, LH-1, eff. 5-13-72]—(NAC A 5-27-92; R179-03, 12-16-2003; R039-14, 4-4-2016)

FORMS

NAC 689A.310 Acceptance of forms approved by Division. (NRS 679B.130) All insurers which provide accident and health insurance, medical and dental service corporations, health maintenance organizations, and other organizations which accept prepayment for health services must accept forms approved by the Division for the administration of benefit payments.

[Comm’r of Insurance, LH-5 § 2, eff. 7-1-76]—(NAC A 5-27-92)

NAC 689A.320 Unused portions. (NRS 679B.130) When it prints a form approved by the Division, an insurer may screen out any portion of the form which it does not require to be completed.

[Comm’r of Insurance, LH-5 § 3, eff. 7-1-76]—(NAC A 5-27-92)

NAC 689A.330 Permitted changes. (NRS 679B.130) An insurer may add to a form approved by the Division its own identification and information to facilitate the use of that form. An insurer, service corporation or prepayment organization may request amplification of information from a provider of health care when the information is necessary for proper administration and determination of benefit payments. If an insurer or prepayment organization needs a form which differs from its approved form, the differing form must be submitted to the Division for approval. The insurer or organization must state the reasons for the deviation on its request.

[Comm’r of Insurance, LH-5 § 4, eff. 7-1-76]—(NAC A 5-27-92)

NAC 689A.340 Statements completed by claimants or policyholders. (NRS 679B.130) Statements, instructions or reports which are normally completed by claimants and policyholders, and which are required for administration of benefit payments, but which do not require information from providers of health care, may be included on the reverse side of any of the approved forms when printed by an insurer or prepayment organization for submission to their policyholders or contract holders.

[Comm’r of Insurance, LH-5 § 5, eff. 7-1-76]

NAC 689A.360 Amendments. (NRS 679B.130) New editions of reporting forms may be used only after they have been filed with and approved by the Commissioner. Minor changes negotiated with agencies of the Federal Government must be submitted to the Commissioner for approval.

[Comm’r of Insurance, LH-5 § 7, eff. 7-1-76]

MISCELLANEOUS PROVISIONS

NAC 689A.411 Summary of coverage: Filing, contents and delivery of disclosure. (NRS 679B.130, 689A.390)

1. Each insurer shall file with the Commissioner, for his or her approval, a disclosure summarizing the coverage provided by a policy of health insurance offered by the insurer.

2. The disclosure must:

(a) Be in at least 10-point type;

(b) Include the name, address and telephone number of the insurance company;

(d) Include a statement describing the principal benefits and the type of coverage being provided;

(e) Include a description of any provision of the policy which significantly excludes, eliminates, reduces or in any other manner operates to limit the payment of the benefits;

(f) Include a statement concerning the renewal provisions of the policy; and

(g) Define the term “usual and customary” or any similar term used in the policy.

3. The agent for the insurer, the insurer after a response to a direct-response solicitation or the broker representing the insured shall deliver the approved disclosure summary to the insured as provided in NRS 689A.400.

4. The provisions of this section do not apply to policies supplementing Medicare which are governed by the provisions of NAC 687B.200 to 687B.330, inclusive.

(Added to NAC by Comm’r of Insurance, eff. 2-21-90; A 7-16-92, eff. 7-30-92)

NAC 689A.421 Programs of health insurance using preferred providers of health care. (NRS 679B.130) An insurer may file with the Division a program of health insurance using preferred providers of health care for any individual policy offered pursuant to chapter 689A of NRS if it complies with the requirements set forth in NAC 689B.120 to 689B.160, inclusive.

(Added to NAC by Comm’r of Insurance, 7-19-90, eff. 10-1-90; 5-27-92)

NAC 689A.425 Coverage for prescription drugs: Removal from approved formulary prohibited; exception; movement to different tier in formulary; addition of drug to formulary. (NRS 679B.130, 687B.120, 689A.710)

1. Except as otherwise provided in this section, an individual carrier that offers a health benefit plan which provides coverage for prescription drugs and uses a formulary that has been approved by the Commissioner pursuant to NRS 687B.120 shall not:

(a) Remove a prescription drug from the formulary; or

(b) If the formulary includes two or more tiers of benefits providing for different deductibles, copayments or coinsurance applicable to the prescription drugs in each tier, move a drug to a tier with a larger deductible, copayment or coinsurance,

Ê during the plan year for which the formulary was approved by the Commissioner.

2. An individual carrier described in subsection 1 may:

(a) Remove a prescription drug from a formulary at any time if:

(1) The drug is not approved by the United States Food and Drug Administration;

(2) The United States Food and Drug Administration issues a notice, guidance, warning, announcement or any other statement about the drug which calls into question the clinical safety of the drug; or

(3) The prescription drug is approved by the United States Food and Drug Administration for use without a prescription.

(b) If the individual carrier’s formulary includes two or more tiers of benefits providing for different deductibles, copayments or coinsurance applicable to the prescription drugs in each tier, move a brand name prescription drug to a tier with a larger deductible, copayment or coinsurance if the individual carrier adds to the formulary a generic prescription drug that is approved by the United States Food and Drug Administration for use as an alternative to the brand name prescription drug at:

(1) The benefit tier from which the brand name prescription drug is being moved; or

(2) A benefit tier that has a smaller deductible, copayment or coinsurance than the benefit tier from which the brand name prescription drug is being moved.

3. This section does not prohibit an individual carrier from adding a prescription drug to a formulary at any time.

4. This section does not apply to a grandfathered plan.

5. As used in this section:

(a) “Health benefit plan” has the meaning ascribed to it in NRS 687B.470.

(b) “Individual carrier” has the meaning ascribed to it in NRS 689A.550.

(Added to NAC by Comm’r of Insurance by R074-14, 12-21-2015, eff. 1-1-2016)

NAC 689A.433 Carrier prohibited from requiring purchase of other insurance as prerequisite to purchase or renewal of health benefit plan. (NRS 679B.130, 689A.740) An individual carrier shall not require a person to purchase a life insurance policy or any other form of insurance as a prerequisite to the purchase or renewal of a basic health benefit plan or a standard health benefit plan.

(Added to NAC by Comm’r of Insurance by R193-99, eff. 1-27-2000)

PORTABILITY AND ACCOUNTABILITY

NAC 689A.434 “Short-term health insurance policy” interpreted. (NRS 679B.130, 689A.540, 689A.740) The Commissioner will interpret the term “short-term health insurance policy” as it is used in NRS 689A.540 to exclude an individual health insurance policy that is:

1. Issued to provide coverage for not more than 185 days or is extended to provide coverage until the end of a period of hospitalization for a condition for which the person covered by the policy is hospitalized on the day the coverage would have otherwise ended; and

2. Nonrenewable or is extended to provide coverage for the period of hospitalization described in subsection 1,

Ê if the total period of coverage is not more than 185 consecutive days within a 365-day period plus any additional days for which coverage is provided because of that hospitalization.

(Added to NAC by Comm’r of Insurance by R100-97, eff. 11-14-97)—(Substituted in revision for NAC 689A.007)

NAC 689A.475 Evidence of creditable coverage. (NRS 679B.130, 689A.710, 689A.740) If a person is unable to obtain a certificate of creditable coverage pursuant to NRS 689A.720, an individual carrier shall accept from the person other evidence of creditable coverage if it determines that the evidence reasonably establishes prior continuous creditable coverage. Such evidence may include, without limitation, a copy of:

1. A policy of health insurance or evidence of coverage;

2. A billing statement for the payment of premiums;

3. A cancelled check evidencing payment for health insurance coverage;

4. A proof of insurance card issued by an insurer;

5. An explanation of benefits relating to a specific claim for medical services that were provided to the person by an insurer;

6. A letter notifying the person that he or she is eligible for coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, Public Law 99-272;

7. A letter written by the liquidator of an insurer that verifies the dates that the person was covered by the insurer under a policy of health insurance;

8. A statement written by the person that includes the name and telephone number of any insurer under which he or she previously received health insurance coverage;

9. Evidence of a payroll deduction from the person’s salary for health insurance coverage;

10. Any record from a provider of medical care that indicates that the person had health insurance coverage; or

11. Any combination thereof.

(Added to NAC by Comm’r of Insurance by R224-97, eff. 11-16-98)

SYSTEM FOR RESOLVING COMPLAINTS OF INSUREDS

NAC 689A.605 Requirements for approval. (NRS 679B.130, 689A.745) To obtain approval of a system for resolving complaints of insureds concerning health care services covered by an insurer from the Commissioner as required pursuant to NRS 689A.745, an insurer must:

1. Demonstrate that the system will resolve oral and written complaints concerning:

(a) Payment or reimbursement for covered health care services;

(b) The availability, delivery or quality of covered health care services, including, without limitation, adverse determinations made pursuant to utilization review; and

2. Submit to the Division:

(a) The name and title of the employee responsible for the system;

(b) A description of the procedure used to notify an insured of the decision regarding his or her complaint; and

(Added to NAC by Comm’r of Insurance by R132-98, eff. 3-30-99)