The California Department of Insurance wants insurers to take care when writing the health history questions on health insurance coverage applications.
The California department has included health history questionnaire rules and other rules in new anti-rescission regulations that are set to take effect Aug. 18.
The department developed the regulations in an effort to reduce the likelihood that health insurers will rescind policies.
The new health history provisions require, for example, that insurers use a “reasonable layperson standard” when asking about an applicant’s health.
“Whenever possible, information from a [personal health record] shall be requested and, if available, relied upon during medical underwriting in addition to self-reported information on health history questionnaires,” officials say in the new regulations.
The California department has told insurers to make the period of time covered by a question “as short as possible.”
The period “must be limited to time periods required by sound actuarial underwriting standards used by the insurer,” officials say. “Offer the applicant an opportunity to indicate the applicant’s inability to recall or remember the information requested. To the extent that such response choices impede the insurer’s ability to apply its medical underwriting guidelines, the insurer shall pursue alternative methods of obtaining such information, including but not limited to telephone interviews, medical records or other sources of information.”
Insurers should not “include questions that are unlimited in time and scope unless the insurer’s medical underwriting guidelines based on sound actuarial principles reasonably require an unlimited time and scope,” officials say.
Once an insurer learns that an insured might have left out material information or misrepresented it, the insurer must start an investigation within 15 days and complete the investigation within 90 days, officials say.
The insurer must send the insured a notice about the investigation every 30 days and send a written notice about the final determination within 7 days of concluding the investigation.
The written notice must tell the insured affected by a rescission how to have the matter reviewed by the insurance department.