Wisconsin Mandated Benefits: Who Must Be Covered
A mandated benefit is coverage that state law requires a health policy to include. Some Wisconsin mandates say who a policy must cover: newborns, adopted children, grandchildren, children with disabilities and adult children. This lesson covers those, including when the coverage starts, how long it lasts and what can end it.
Most of these rules apply to a “disability insurance policy” as s. 632.895 (1) (a), Wis. Stat., defines it: surgical, medical, hospital, major medical or other health service coverage. The definition leaves out hospital indemnity policies and ancillary coverage such as income continuation, loss of time or accident benefits.
Newborn Children (s. 632.895 (5))
Every disability insurance policy must cover a newly born child of the insured from the moment of birth (s. 632.895 (5) (a)). There is no waiting period.
The coverage treats congenital defects and birth abnormalities as an injury or sickness under the policy. It covers functional repair or restoration of any body part when needed for normal body functioning, but not cosmetic surgery performed only to improve appearance (s. 632.895 (5) (b)). The rule on newborn coverage adds that when a physician certifies as medically necessary a hospital stay longer than a healthy baby would need, the extra days count as sickness (s. Ins 3.38 (2) (d), Wis. Adm. Code).
The mandate applies whenever the policy covers another family member besides the insured and states that the insured’s children are eligible. This rule uses its own, broader scope: it reaches every type of disability policy that meets that test, including accident-only and short-term policies (s. Ins 3.38 (2) (a), (b)), even though the s. 632.895 definition above leaves accident benefits out.
Notice and premium for a newborn
What the parents must do depends on whether adding the child costs more:
- An added premium is required. The policy may require notice of the birth and payment of the premium within 60 days after the date of birth. If the insured misses that deadline, the insurer may refuse to continue the coverage past the 60 days, unless within one year after the birth the insured pays all past-due premiums plus interest at 5 1/2 percent per year (s. 632.895 (5) (c)).
- No added premium is required, as on a family policy that already covers all children. The policy may ask to be notified of the birth, but it may not deny or end the child’s coverage because no notice was given (s. 632.895 (5) (d)).
Either way, the insurer may not refuse initial coverage for the newborn if any required premium is paid on time (s. Ins 3.38 (2) (f)).
Adopted Children (s. 632.896)
A policy that covers the insured’s dependent children must cover adopted children, and children placed for adoption with the insured, on the same terms and conditions as other dependent children, including the same exclusions, deductibles and copayments (s. 632.896 (2)).
When coverage begins. Coverage begins on the date a court makes a final order granting the adoption or on the date the child is placed for adoption with the insured, whichever comes first (s. 632.896 (3) (a) 1.).
When it can end. Coverage of a placed child is required whether or not the adoption is ever finalized. If the adoption falls through, the insurer may end the child’s coverage when the adoptive placement ends (s. 632.896 (3) (b)).
No pre-existing condition exclusion. The policy may not exclude or limit coverage of the child’s disease or physical condition because it existed before the child’s coverage had to begin (s. 632.896 (4)).
Notice. The policy may require the insured to notify the insurer and pay any required premium within 60 days after coverage begins. If the insured misses that deadline, the insurer must treat the child no less favorably than it treats other dependents (other than newborns) who apply after first becoming eligible (s. 632.896 (6)). The child becomes a late enrollee, not an excluded one.
Grandchildren (s. 632.895 (5m))
A disability insurance policy that covers any child of the insured must give the same coverage to all children of that child until that child is 18 years of age (s. 632.895 (5m)).
Read the age carefully. The 18 refers to the grandchild’s parent, the insured’s own covered child, not to the grandchild. Suppose Maria’s family policy covers her 16-year-old daughter, Ana, and Ana has a baby. The baby is covered under Maria’s policy. When Ana turns 18, the policy no longer has to cover the baby, even though Ana herself may stay on the policy as a dependent under age 26.
Children with Disabilities (s. 632.88; s. 632.755)
Most policies end a child’s dependent coverage at a limiting age. A hospital or medical expense policy with a limiting age must also provide that the age limit does not end coverage of a dependent child while the child is, and continues to be, both:
- incapable of self-sustaining employment because of intellectual disability or physical handicap, and
- chiefly dependent on the insured for support and maintenance (s. 632.88 (1)).
The insurer may require proof of the incapacity and dependency within 31 days after the child reaches the limiting age. After that, it may ask again from time to time, but no more often than annually once the first 2 years after the limiting age have passed (s. 632.88 (2)). Coverage lasts as long as both conditions do.
A second rule protects children who receive public help. A disability insurance policy may not exclude a person or dependent, end their coverage or give them different benefits because they are eligible for Medicaid and other assistance under ch. 49 or for early intervention services for infants and toddlers with disabilities under s. 51.44. The private policy’s benefits are primary: the policy pays first, before those programs (s. 632.755).
Adult Children and Other Dependents
Under 26. An insurer that offers dependent coverage of children must cover any child of the applicant or insured who is under the age of 26 (s. 632.885 (2) (a)). The insurer may define “dependent” only by the child’s relationship to the insured (s. 632.885 (3m) (a)). Marriage, residence and financial independence do not matter. The insurer must accept an eligible adult child as a new entrant when the insured asks to enroll the child no later than 30 days after the child first becomes eligible (s. Ins 3.34 (5) (a)).
Students called to active duty. The rule also covers an adult child, regardless of age, who is a full-time student, was called to federal active duty in the National Guard or a reserve component while attending school full time, and was under the age of 27 years when called (s. 632.885 (2) (b)). To stay eligible, the child must apply as a full-time student within 12 months after finishing the active duty obligation (s. Ins 3.34 (6) (a) 2. a.).
Children who live elsewhere. No disability insurance policy may exclude or end coverage of a dependent child solely because the child does not live with the insured (s. 632.75 (3)). A child who lives with the other parent after a divorce stays covered.
Students on medical leave. A policy that covers someone as a dependent because they are a full-time student must continue that coverage if a physician-certified, medically necessary leave of absence ends their full-time status. It may end on listed events, such as full-time employment or other coverage, and ends when one year has elapsed without a return to school full time (s. 632.895 (15)).
Declined Risks: When an Insurer May Say No
Today the rules on declining an applicant for health reasons mostly forbid it:
- Major medical coverage. An insurer offering individual or group health insurance coverage must accept every employer and individual in the state who applies, though it may limit enrollment to open and special enrollment periods (42 U.S.C. 300gg-1).
- Group plans. A group insurer may not base anyone’s eligibility to enroll or stay enrolled on health status, medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising from domestic violence) or disability. It also may not charge one member more than a similarly situated member because of a health factor (s. 632.748).
- New employees. A group insurer must cover an employee who becomes eligible after the employer’s coverage starts, and that employee’s dependents, regardless of health condition or claims experience, once any waiting period is met and the employer agrees to pay the premium (s. 632.747 (1)).
- Pregnant applicants. For a family policy providing hospital or medical expense benefits that still underwrites individually, an insurer that receives an application from a pregnant applicant, or one whose spouse is pregnant, may not issue the policy with an exclusion or limit on the expected child. It must issue the policy without the exclusion or decline or postpone the application (s. Ins 3.38 (2) (g)).
Lesson summary
- A newborn is covered from the moment of birth, including congenital defects; if added premium is due, the policy may require notice and payment within 60 days (s. 632.895 (5)).
- An adopted child is covered from placement or the final order, whichever is first, with no pre-existing condition exclusion; notice may be required within 60 days (s. 632.896).
- Grandchildren are covered while their parent, the insured’s covered child, is under 18 (s. 632.895 (5m)).
- A child who cannot support themselves because of an intellectual disability or physical handicap, and who depends chiefly on the insured, stays covered past the limiting age (s. 632.88).
- A policy cannot exclude a child for being eligible for Medicaid or early intervention services, and it pays before those programs (s. 632.755).
- Children of the insured are covered as dependents to age 26, with an extension for full-time students called to active duty (s. 632.885).
- Health status cannot be used to decline major medical applicants or to set group eligibility (42 U.S.C. 300gg-1; s. 632.748).