Methods of crediting coverage

1. Any health carrier offering health insurance in this state must reduce any time period applicable to a preexisting condition exclusion or limitation period by the aggregate of periods the individual was covered by qualifying previous coverage, if any, if the qualifying previous coverage was continuous until at least sixty-three days prior to the effective date of the new coverage. The health carrier must credit coverage by either a standard or alternative method. 2. A health carrier electing to credit coverage by the standard method shall determine the amount of qualifying previous coverage without regard to the specific benefits covered during the period of qualifying previous coverage. 3. For purposes of reducing the preexisting condition exclusion period under the standard method, a health carrier determines the amount of qualifying previous coverage by counting all the days that the individual has under one or more types of qualifying previous coverage. If an individual is covered by more than one source of qualifying previous coverage on any given day, all the qualifying previous coverage on that day is counted as one day. Days spent in a waiting period for a plan or policy are not days of qualifying previous coverage. 4. Days of qualifying previous coverage occurring before a significant break in coverage are not required to be counted by the plan or issuer in reducing the preexisting condition exclusion. A significant break in coverage means a period of sixty-three consecutive days during all of which the individual was not covered by any qualifying previous coverage. Waiting periods are not taken into account in determining a significant break in coverage. 5. A health carrier offering health insurance in this state may elect to use an alternative method of crediting coverage. In applying the alternative method, coverage may be credited based on coverage of benefits within the following five categories of benefits: a. Mental health; b. Substance abuse treatment; c. Prescription drugs; d. Dental care; or e. Vision care. Any health carrier offering health insurance in this state may use the alternative method for any or all of the five categories and may apply a different preexisting condition exclusion with respect to each category. The qualifying previous coverage determined for a category of benefits applies only for purposes of reducing the preexisting condition exclusion period with respect to that category. For coverage that is not within the above categories, qualifying previous coverage is determined by using the standard method. A health carrier using the alternative method is required to apply it in a uniform manner. 6. Under the alternative method, the health carrier counts qualifying previous coverage within a category if any level of benefits is provided within a category. The health carrier first determines the amount of the individual's qualifying previous coverage that may be counted under the standard method, up to a total of three hundred sixty-five days of the most recent qualifying previous coverage. The period over which this qualifying previous coverage is determined is referred to as the determination period. Then, for the category specified under the alternative method, the health carrier counts within the category all days of coverage that occurred during the determination period, whether or not a significant break in coverage for that category occurs, and reduces the individual's preexisting condition exclusion period for that category by that number of days. 7. A health carrier electing to credit coverage using the alternative method is required to: a. State prominently that the health carrier is using the alternative method of counting qualifying previous coverage in disclosure statements concerning the health insurance coverage, and state this to each enrollee at the time of enrollment under the coverage; and b. Include in these statements a description of the effect of using the alternative method, including an identification of the categories used. 8. A health carrier may determine the amount of qualifying previous coverage in any other reasonable manner that is at least as favorable to the individual as long as the issuer applies the method uniformly.