When do Insurers have to sell me an individual insurance policy?

In South Dakota, your ability to buy individual health insurance may depend on your health status.

• In general, companies that sell individual health insurance in South Dakota are free to turn you down because of your health status and other factors. When applying for individual health insurance, you may be asked questions about health conditions you have now or have had in the past. Depending on your health status, insurers might refuse to sell you coverage or offer to sell you a policy that has special limitations on what it covers.
• If you have 12 months of prior creditable coverage and meet other eligibility requirements, you may be eligible for SDRP.
• In South Dakota, newborns, and adopted children are automatically covered under the parents’ fully insured health plan for the first 31 days, if the plan covers dependents. The plan may require that the parent enroll the child within the 31 days in order to continue coverage beyond the 31 days.
• If you have a disabled child, that child may remain covered under your individual health insurance policy after he or she reaches the age at which dependent coverage is usually terminated. To qualify, your adult son or daughter must be incapable of self-support because of mental retardation or physical disability and must be chiefly dependent on the policyholder for support. Proof of incapacity must be furnished within 31 days of reaching the time limit and may be required periodically thereafter.

What will my individual health Insurance policy cover?

• It depends on what you buy. South Dakota does not require health insurers in the individual market to sell standardized policies. Health plans can design different policies and you will have to read and compare them carefully. However, South Dakota does require all health insurers to cover certain benefits - for example, diabetes treatment and prostate cancer screening. Check with the South Dakota Division of Insurance for more information about mandated benefits.

What about coverage for my pre-existing condition?

• Individual health insurance can impose elimination riders. This is an amendment to your health insurance policy that permanently excludes coverage for a health condition or even an entire body part of system. Elimination riders can be applied even if you have prior creditable coverage.

South Dakota insurers can also impose pre-existing condition exclusion period. Pre-existing condition exclusion periods cannot exceed 1 year.

The definition of pre-existing condition is different under individual insurance than under group health plans. Individual health insurance can count as pre-existing any condition as determined by the plan, which existed anytime before the individual’s date of enrollment. This is called the prudent person rule. In South Dakota, pregnancy can count as a pre-existing condition, but not genetic information.

• If you make a claim during the first two years of coverage, the insurer can look back to see if the claim is for a condition that would have been considered a pre-existing condition. If the insurer determines that the condition is a pre-existing condition, it can refuse to pay for expenses for that condition.

• You will get credit towards your pre-existing condition exclusion period for any prior credible coverage you have, provided no more than 63 days lapse between your old and new coverage. However, this rule does not apply to preexisting conditions that are not covered by your individual policy as a result of an elimination rider.

What can I be charged for an individual health Insurance Policy?

• If you have a very expensive health condition, you can be charged more, within limits based on your health status. In addition, South Dakota law permits insurers to impose higher premiums, within limits, based on your age, gender, your lifestyle choices (smoking and weight), and where you live.
• When you renew your individual coverage, your premiums can increase as your age increases.

Can my individual health insurance policy be canceled?

• Your coverage cannot be canceled because you get sick. This is called guaranteed renewability. You have this protection provided that you pay the premiums, do not defraud the company, and, in some cases of managed care plans, continue to live in the plan service area.
• Some insurance companies sell temporary health insurance policies. Temporary policies are not guaranteed renewable. They will only cover you for a limited time, such as 6 months. If you want to renew coverage under a temporary policy after it expires, you will have to apply for a new contract. There is no guarantee that coverage will be re-issued at all or at the same price.