Guidelines on Standardization of Exclusions in Health Insurance Contracts

~u nfl4 itiu Pc1Pt41'1cfi afu: mffi ~ INSURANCE REGULATORY AND ir.iai DEVELOPMENT AUTHORITY OF INDIA Ref: IRDAI/HL T/REG/CIR/ llJ /09/2019 2ih Sept~mber, 2019 Guidelines on Standardization of Exclusions in Health Insurance Contracts / I Chapter I II 111 IV V VI INDEX Item Page No. Objective; Applicability; Legal and other provision, Definitions 2-4 Exclusions not allowed in Health Insurance Policies 5 Standard Wordings for some of the exclusions in Health Insurance 6-9 Policies Diseases allowed to be permanently excluded 10-,14 Modern Treatment Methods and Advancement in Technologies 15 Other guidelines related to exclusions 16-17 Page 1 of 17 ifcf ;t. 115/1, ~~ • .-ii,FHll-11:S I, ~-500 032, ~ Survey No. 115/1, Financial District, Nanakramguda, Hyderabad-500 032, India (5) : +91 -40-2020 4000,~ : +91-40-2020 4555 (5) : +91-40-2020 4000, Fax : +91-40-2020 4555 fflW : www.irdai.gov.in Website : www.irdai.gov.in GENERAL - Chapter - I 1. OBJECTIVE: The objective of these Guidelines are to rationalise and standardize the exclusions in health Insurance Contracts that every Insurer shall comply with. Health Insurance has undergone various changes and improvements over the years. The Insurance Regulatory and Development Authority of India (Health Insurance) Regulations as well as the TPA (Third Party Administrators) Regulations have brought in standardization of various definitions / formats in the health insurance industry to promote uniformity keeping the customer in focus. The health insurance industry is keeping pace with the advancements in technologies that are taking place in the healthcare industry. With the increase in number of health insurance companies as well as health insurance products in the market, it has been desired that the health insurance industry adopts a uniform approach while incorporating exclusions in the health insurance products. In order to have a holistic and structured approach in devising appropriate guidelines, IRDAI, constituted a Working Group vide order Ref: IRDAI/HLT/ORD/Misc/113/07/2018 dated 24th July, 2018 to review the extant practices and make appropriate recommendations to meet the above objective. Report of the Working Group was published in IRDAI website on 02/11/2018. 2. APPLICABILITY: These Guidelines are applicable to all General and Health Insurers offering indemnity based health insurance (excluding PA and Domestic/ Overseas Travel) policies offering hospitalisation, domiciliary hospitalisation and day care treatment. 3. LEGAL AND OTHER PROVISIONS: 3.1 These guidelines are issued under the provisions of Section 34 (1) of Insurance Act, 1938 and Section 14 (2) (e) of the IRDAI Act 1999. 3.2 In order to enhance the health insurance coverage that is granted at the time of issuing a policy it is considered important to rationalise the exclusions that were hitherto prevalent in the health insurance policy contracts issued by all Insurers. Certain exclusions are prohibited to be incorporated in the health insurance policy contracts. Standardization of wordings of certain exclusions that are incorporated in the Health Insurance Contracts is also considered important to ensure uniformity across the industry. In order to enable the individuals that are suffering with any existing diseases get the health insurance coverage excluding the coverage to such existing disease, it is considered essential to let the Insurers accept such risks, subject to underwriting policy of the respective insurers, by permanently excluding the coverage to such existing diseases or illnesses. ~ Page 2 of 17 3.3 Accordingly, these Guidelines are issued specifying (i) the exclusions that are not allowed in the Health Insurance Policies, (ii) Standard Wordings of some of the exclusions (iii) Existing Diseases that may be permanently excluded (iv) Modern Treatment Methods that shall be covered (v) Other Norms on Exclusions. 3.4 Exclusions not allowed in Health Insurance Policies are prescribed in Chapter II of these Guidelines. No Insurer shall incorporate any exclusion specified under this chapter as part of any of the Health Insurance Products. No exclusion that may potentially circumvent these exclusions is allowed in Health Insurance Products. 3.5 Standard Wordings of some of the exclusions that are prevalent in Health Insurance Policies are prescribed in Chapter Ill of these Guidelines. While every Insurer may endeavour to minimise the number of exclusions to enhance availability of health insurance coverage, where insurers prefer to incorporate these exclusions, they shall incorporate the same wordings in-verbatim in the policy contracts as prescribed in this chapter. 3.6 Existing Diseases allowed to be permanently excluded are prescribed in Chapter IV of these Guidelines. Every insurer may endeavour to extend health insurance coverage to all the persons to be insured who disclosed pre-existing disease at the point of underwriting in accordance to Regulation (8) of IRDAI (Health Insurance) Regulations, 2016. Insurers while granting health insurance coverage to the persons with the existing diseases referred in Chapter IV may levy suitable health loading based on objective criteria as laid down in the board approved underwriting policy. Where underwriting policy of the Insurer does not enable the Insurer to offer the Health Insurance Coverage for the given existing disease disclosed even after levying the loading, Insurers are allowed to permanently exclude the Health Insurance coverage to the existing disease specified in the within referred Chapter. Other than the diseases listed in Table - 1 of Chapter - IV, any other pre-existing disease disclosed by the person to be insured shall be covered subject to the norms applicable for preexisting diseases. 3.7 In order to ensure that the policyholders of health insurance policies are not denied getting access to the technologically and medically advanced treatment procedures, Insurers shall not exclude the treatment procedures specified in Chapter V. 3.8 Other norms related to exclusions are prescribed in Chapter VI of these Guidelines. 4. Definitions: The words used herein and defined in the Insurance Act, 1938, Insurance Regulatory and Development Authority Act, 1999 and Regulations notified thereunder shall have the same meaning as assigned to them respectively. Page 3 of 17 5. EFFECTIVE DATE: The provisions of these Guidelines shall be applicable in respect of all health insurance products (Other than Personal Accident, Domestic and Overseas Travel Policies) (both Individual and Group) referred in Clause (2) above filed on or after 01 st October, 2019. All existing health insurance products that are not in compliance with these Guidelines shall not be offered and promoted from 01 st October, 2020 onwards. This has the approval of the competent authority. (D VS General Manager (Health) Page 4 of 17 CHAPTER II Exclusions not allowed in Health Insurance Policies: 1. On examining the extant wordings in the health insurance policy contracts and the prevailing exclusions, it is directed that the following exclusions shall not be allowed in health insurance (Other than PA & Travel) policies. No Health Insurance Policy shall incorporate the following exclusions in the terms and conditions of the policy contract. a. Diseases contracted after taking the health insurance policy, except for the conditions excluded for which standard wordings are prescribed in Chapter Ill. b. Injury or illness associated with hazardous activities. (Explanation: However, only treatment necessitated due to participation in adventure or hazardous sports is permitted as exclusion.) c. Impairment of Persons' intellectual faculties by usage of drugs, stimulants or depressants as prescribed by a medical practitioner. d. Artificial life maintenance, including life support machine use, where such treatment will not result in recovery or restoration of the previous state of health under any circumstances unless in a vegetative state as certified by the treating medical practitioner. (Explanation: Expenses up to the date of confirmation by the treating doctor that the patient is in vegetative state shall be covered as per the terms and conditions of the policy contract). e. Treatment of mental illness, stress or psychological disorders and neurodegenerative disorders. f. Puberty and Menopause related Disorders: Treatment for any symptoms, Illness, complications arising due to physiological conditions associated with Puberty, Menopause such as menopausal bleeding or flushing . g. Age Related Macular Degeneration (ARMD) h. Behavioural and Neuro developmental Disorders: i. Disorders of adult personality; ii. Disorders of speech and language including stammering, dyslexia; i. Expenses related to any admission primarily for enteral feedings. j. Internal congenital diseases, genetic diseases or disorders. k. If specified aetiology for the medical condition is not known. I. Failure to seek or follow medical advice or failure to follow treatment. Page 5 of 17 CHAPTER Ill Standard Wordings for some of the exclusions in Health Insurance Policies: 1. To make the wordings of exclusions uniform and specific across the Industry, the wordings of the following exclusions are standardized. Where these exclusions or exclusions similar to the ones specified hereunder are used, Insurers shall incorporate the same wordings in verbatim in the health insurance policy contracts. 2. Against each exclusion a code number is specified. Insurers are directed to put in place operational and system procedures to capture exclusion code specific claim repudiations for the purpose of deriving data/information relating to exclusion wise repudiation of health insurance claims. A. Exclusion Name: Pre-Existing Diseases - Code- Excl01 a) Expenses related to the treatment of a pre-existing Disease (PED) and its direct complications shall be excluded until the expiry of #### months of continuous coverage after the date of inception of the first policy with insurer. b) In case of enhancement of sum insured the exclusion shall apply afresh to the extent of sum insured increase. c) If the Insured Person is continuously covered without any break as defined under the portability norms of the extant IRDAI (Health Insurance) Regulations, then waiting period for the same would be reduced to the extent of prior coverage. d) Coverage under the policy after the expiry of .tll-!l!f!!/ months for any pre-existing disease is subject to the same being declared at the time of application and accepted by Insurer. (Explanation: Subject to product design the number of months, not exceeding 48 months, shall be specified or a reference may be given to the policy schedule) B. Exclusion Name: Specified disease/procedure waiting period- Code- Excl02 a) Expenses related to the treatment of the listed Conditions, surgeries/treatments shall be excluded until the expiry of <####> months of continuous coverage after the date of inception of the first policy with us. This exclusion shall not be applicable for claims arising due to an accident. (Explanation: Subject to product design the number of months, not exceeding 48 months, shall be specified) b) In case of enhancement of sum insured the exclusion shall apply afresh to the extent of sum insured increase. c) If any of the specified disease/procedure falls under the waiting period specified for pre-Existing diseases, then the longer of the two waiting periods shall apply. d) The waiting period for listed conditions shall apply even if contracted after the policy or declared and accepted without a specific exclusion. e) If the Insured Person is continuously covered without any break as defined under the applicable norms on portability stipulated by IRDAI, then waiting period for the same would be reduced to the extent of prior coverage. Page 6 of 17 f) List of specific diseases/procedures (Explanation: "List of specific diseases / Procedures in respect of which waiting period is imposed shall be specified here or reference to be furnished".) C. 30-day waiting period- Code- Excl03 a) Expenses related to the treatment of any illness within 30 days from the first policy commencement date shall be excluded except claims arising due to an accident, provided the same are covered. b) This exclusion shall not, however, apply if the Insured Person has Continuous Coverage for more than twelve months. c) The within referred waiting period is made applicable to the enhanced sum insured in the event of granting higher sum insured subsequently. D. Investigation & Evaluation- Code- Excl04 a) Expenses related to any admission primarily for diagnostics and evaluation purposes only are excluded. b) Any diagnostic expenses which are not related or not incidental to the current diagnosis and treatment are excluded. E. Exclusion Name: Rest Cure, rehabilitation and respite care- Code- Excl05 a) Expenses related to any admission primarily for enforced bed rest and not for receiving treatment. This also includes: 1. Custodial care either at home or in a nursing facility for personal care such as help with activities of daily living such as bathing, dressing, moving around either by skilled nurses or assistant or non-skilled persons. ii. Any services for people who are terminally ill to address physical, social, emotional and spiritual needs. (Note: However, Insurers may endeavour to develop add-on riders to offer respite care and home care, especially, the coverage that kicks in at age 65 onwards, provided the coverage under base policy is continued without break.) F. Obesity/ Weight Control: Code- Excl06 Expenses related to the surgical treatment of obesity that does not fulfil all the below conditions: 1) Surgery to be conducted is upon the advice of the Doctor 2) The surgery/Procedure conducted should be supported by clinical protocols 3) The member has to be 18 years of age or older and 4) Body Mass Index (BMI); a) greater than or equal to 40 or b) greater than or equal to 35 in conjunction with any of the following severe co-morbidities following failure of less invasive methods of weight loss: i. Obesity-related cardiomyopathy ii. Coronary heart disease Page 7 of 17