1. (a) Guaranteed Issue.

   1. (1) Eligible persons are those individuals described in subsection (b) of this section who, subject to subsection (d) of this section, apply to enroll under the policy not later than 63 days after the date of the termination of enrollment described in subsection (b) of this section, and who submit evidence of the date of termination or disenrollment with the application for a Medicare supplement policy.
   2. (2) With respect to eligible persons, an issuer shall not deny or condition the issuance or effectiveness of a Medicare supplement policy described in subsection (c) of this section that is offered and is available for issuance to newly enrolled individuals by the issuer, and shall not discriminate in the pricing of such a Medicare supplement policy because of health status, claims experience, receipt of health care, or medical condition, and shall not impose an exclusion of benefits based on a preexisting condition under such a Medicare supplement policy.

2. (b) Eligible Persons. An eligible person is an individual described in any of the following paragraphs:

   1. (1) The individual is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare, and the plan terminates, or the plan ceases to provide all such supplemental health benefits to the individual; or the individual is enrolled under an employee welfare benefit plan that is primary to Medicare and the plan terminates or the plan ceases to provide all health benefits to the individual because the individual leaves the plan.

   2. (2) The individual is enrolled with a Medicare+Choice organization under a Medicare+Choice plan under Part C of Medicare, and any of the following circumstances apply, or the individual is 65 years of age or older and is enrolled with a Program of All-Inclusive Care for the Elderly (PACE) provider under Section 1894 of the Social Security Act, and there are circumstances similar to the following that would permit discontinuance of the individual's enrollment with such provider if such individual were enrolled in a Medicare+Choice plan:

      1. (A) The certification of the organization or plan has been terminated, or the organization or plan has notified the individual of an impending termination of such certification; or
      2. (B) The organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides, or has notified the individual of an impending termination or discontinuance of such plan;
      3. (C) The individual is no longer eligible to elect the plan because of a change in the individual's place of residence or other change in circumstances specified by the Secretary, but not including termination of the individual's enrollment on the basis described in section 1851(g)(3)(B) of the Social Security Act (where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under section 1856), or the plan is terminated for all individuals within a residence area;

      4. (D) The individual demonstrates, in accordance with guidelines established by the Secretary, that:

         1. (i) The organization offering the plan substantially violated a material provision of the organization's contract under U.S.C. Title 42, Chapter 7, Subchapter XVIII, Part D in relation to the individual, including the failure to provide an individual on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide such covered care in accordance with applicable quality standards; or
         2. (ii) The organization, or agent or other entity acting on the organization's behalf, materially misrepresented the plan's provisions in marketing the plan to the individual; or
      5. (E) The individual meets such other exceptional conditions as the Secretary may provide.

   3. (3) The individual is enrolled with an entity listed in subparagraphs (A) - (D) of this paragraph and enrollment ceases under the same circumstances that would permit discontinuance of an individual's election of coverage under paragraph (2) of this subsection:

      1. (A) An eligible organization under a contract under Section 1876 (Medicare risk or cost);
      2. (B) A similar organization operating under demonstration project authority, effective for periods before April 1, 1999;
      3. (C) An organization under an agreement under Section 1833(a)(1)(A) (health care prepayment plan); or
      4. (D) An organization under a Medicare Select policy; and

   4. (4) The individual is enrolled under a Medicare supplement policy and the enrollment ceases because:

      1. (A) Of the insolvency of the issuer or bankruptcy of the nonissuer organization; or of other involuntary termination of coverage or enrollment under the policy;
      2. (B) The issuer of the policy substantially violated a material provision of the policy; or
      3. (C) The issuer, or an agent or other entity acting on the issuer's behalf, materially misrepresented the policy's provisions in marketing the policy to the individual;
   5. (5) The individual was enrolled under a Medicare supplement policy and terminates enrollment and subsequently enrolls, for the first time, with any Medicare+Choice organization under a Medicare+Choice plan under part C of Medicare, any eligible organization under a contract under section 1876 (Medicare risk or cost), any similar organization operating under demonstration project authority, any PACE program under section 1894 of the Social Security Act, an organization under an agreement under section 1833(a)(1)(A) (health care prepayment plan), or a Medicare Select policy; and the subsequent enrollment is terminated by the individual during any period within the first 12 months of such subsequent enrollment (during which the individual is permitted to terminate such subsequent enrollment under section 1851(e) of the Social Security Act); or
   6. (6) The individual, upon first becoming enrolled in Medicare part B for benefits at age 65 or older, enrolls in a Medicare+Choice plan under part C of Medicare, or in a PACE program under section 1894 of the Social Security Act, and disenrolls from the plan or program no later than 12 months after the effective date of enrollment.

3. (c) Products to Which Eligible Persons are Entitled. The Medicare supplement policy to which eligible persons are entitled under:

   1. (1) Subsection (b)(1), (2), (3) and (4) of this section is a Medicare supplement policy which has a benefit package classified as Plan A, B, C, or F offered by any issuer.
   2. (2) Subsection (b)(5) of this section is the same Medicare supplement policy in which the individual was most recently previously enrolled, if available from the same issuer, or, if not so available, a policy described in paragraph (1) of this subsection.
   3. (3) Subsection (b)(6) of this section shall include any Medicare supplement policy offered by any issuer.
4. (d) Alternate Date for Termination of Enrollment. An individual described in paragraph (b)(2) of this section may elect to apply subsection (a) by substituting, for the date of termination of enrollment, the date on the letter which the individual was notified by the Medicare+Choice organization or PACE program of the impending termination or discontinuance of such plan or program it offers in the area in which the individual resides, but only if the individual disenrolls from the plan or program as a result of such notification. In the case of an individual making such an election, the issuer involved shall accept the application of the individual submitted before the date of termination of enrollment, but the coverage under subsection (a) of this section shall only become effective upon termination of enrollment under the plan or program involved.

Source Note:The provisions of this §3.3312 adopted to be effective April 14, 1999, 24 TexReg 3353; amended to be effective February 19, 2001 26 TexReg 1544.