01-01: MO's Group Discontinuance & Replacement Law and HIPAA

To:           All Insurance Companies, Health Services Corporations And Health Maintenance Organizations                 Providing Health Coverage To Employee Benefit Plans

From:      Keith A. Wenzel, Director of Insurance, State of Missouri

Re:          The Interaction Between The Provisions Of Missouri's Group Discontinuance And Replacement                 Law And The Provisions Of The Health Insurance Portability And Accountability Act

Date:       March 13, 2001

The Missouri Department of Insurance has been receiving numerous complaints concerning the relative obligations of prior carriers and succeeding carriers for claims of disabled individuals when an employer changes health carriers for its employee benefit plan. In 1985, the Missouri legislature enacted the NAIC "Group Coverage Discontinuance and Replacement Model" as Sections 376.431 to 376.442. These sections have governed the relative obligations of the prior carrier and the succeeding carrier to a disabled individual in a discontinuance and replacement situation since that time. With the passage of the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), however, these relative obligations have changed. To illustrate this change, it might be best to compare the situation before HIPAA and after HIPAA.

How Sections 376.438 and 376.441 worked before HIPAA

How Sections 376.438 and 376.441 work since HIPAA

We hope that the above discussion has helped clarify the interaction between the provisions of Missouri's discontinuance and replacement law and the provisions of HIPAA. Should you have any additional questions, however, please feel free to contact the Department.