Most Common Reasons for Delay and Disapprovals

Most Common Reasons for Delay and Disapprovals:

  • Red-line Copy: If a form filing includes a replacement form, i.e. a form that replaces a previously approved form, each replacement form must include a red-lined copy of the form highlighting the difference between the new form and the form that is being replaced.
  • Statement of Variability: Any form that includes substantive variable text must clearly identify said text (by bracketing it) and also include a statement of variability (SOV) explaining or describing, in detail, the alternative text the insurer anticipates using in lieu of the text shown as variable in the filed version of the forms.  The SOV must describe or explain the range, scope and intent of the variability, and include any minimum and/or maximum ranges for benefit specific text such as dollar amounts, percentages, age limits, etc.  In addition, benefit-specific text such as dollar amounts, benefit percentages etc, that is filed as variable cannot be shown as “[$______]” or “[$XX.XX]” or “[XX%]”.  Actual dollar amounts, percentages (etc.) must be included in the forms being filed that are typical for the product and representative of the risk class being illustrated (e.g., male, age 35, non-smoker, standard risk).
  • Civil Unions:  All insurers must provide dependent coverage for parties to a civil union that is equivalent to the dependent coverage provided to married insured’s.  An individual or group health insurance policy providing coverage for a spouse or family member of the insured, must also provide the equivalent coverage to any party to a civil union.  See the Department’s model endorsement for compliance with 8 VSA § 4063a, Regulation IH-2000-01 and Bulletin HCA-110,
  • Mental Health Parity:  Vermont will not approve any A&H products that discriminate against mental health conditions by imposing greater burdens on treatment  See 8 VSA § 4089b.  Any health insurance plan or health benefit plan offered by a health insurer, must provide coverage for treatment of a mental health condition; and in so doing, cannot establish any rate, term or condition that places a greater burden on the covered individual for access to treatment for a mental health condition than for access to treatment for other health conditions.  In Vermont, a “mental health condition” is any condition or disorder involving mental illness or alcohol or substance abuse that falls under any of the diagnostic categories listed in the mental health section of the international classification of disease, as periodically revised.  Please also see Bulletin HCA –127 regarding mental health parity and disability income replacement products.
  • Vermont Filing/State Tracking Numbers: All form filings that modify, amend or otherwise affect any previously approved forms must include the Vermont Filing Numbers (VFN’s), approval dates and in some cases, copies of such previously approved forms.
  • Readability Score: All form filings must include a certification that the filing company has tested the forms and related materials, using the Flesch Readability Formula and that the forms and related materials have a readability score of at least 40 on the Flesch scale for Non-LTC forms and at least 50 on the Flesch scale for LTC forms.
  • Types of Insurance (TOI) and Sub-TOI’s: All form filings must include the correct and appropriate NAIC TOI and Sub-TOI product codes applicable to the product being filed.  If incorrect TOI codes are provided, the filing must be withdrawn and re-submitted, since the TOI codes cannot be changed or corrected once the filing is entered into SERFF.
  • Eligible Group Certification: For group insurance form filings (whether traditional small or large group as well as blanket insurance) the filing must (a) identify, by statutory cite, the types of eligible groups to which the product will be sold (for example 8 VSA § 4079(1), employer-employee groups, or 8 VSA § 4081(4), volunteer fire departments) and (b) certify, with respect to each such group, compliance with all of the 8 VSA § 4079 or 8 VSA § 4081 requirements applicable to that group.  Note that trusts and association groups are - by definition – “small groups” as defined by 8 VSA § 4080a and are subject to all small group requirements under 8 VSA § 4080a.
  • 100% Variability: The Department will not approve forms that are filed as 100% variable, no matter how extensive or detailed the Statement of Variability (SOV) is.  Substantive text variability should be kept to the minimum needed to give the insurers the necessary degree of benefit-design flexibility.  The Department will not approve “blank” forms , for example, “amendment” forms that the insurer can use to change policy provisions but are filed without actually identifying the policy provisions that will be changed.
  • Dual Filing Requirements: Forms that include both life insurance and accident and health (A&H) insurance features must be dual-filed.  That is, filed for review and approved by both the Insurance Division and the Health Care Administration Division.  Dual filings must cross reference one another in their submission letters by the Vermont Filing Number (VFN) and/or the SERFF Tracking ID number.
  • Corresponding Rate Filings: All Accident and Health filings (A&H) must consist  of two separate filings, - one for forms, and one for the rates that correspond to the forms.  Rate filings are not to be submitted for review and approval until the product forms have been approved.  The rate filing should cross reference the approved form filing in it’s submission letter by Vermont Filing Number (VFN) and/or the SERFF Tracking ID number.  If an A&H form filing does not require rates or has no impact on previously approved rates, the form filing submission letter should clearly state that fact.