Extension of benefits.

(1) Each group, blanket, or franchise policy or contract renewed, delivered, or issued for delivery in this state shall contain a reasonable provision for extension of benefits in the event of the total disability of a certificateholder at the date of discontinuance of the policy or contract. The extension is required regardless of whether the group policyholder or other entity secures replacement coverage from a new insurer or foregoes the provision of coverage.

(2) Each disability income or indemnity-type group, blanket, or franchise plan must contain a reasonable extension of benefits or accrued liability provision that provides for continuation of policy benefits in connection with the disability.

(3)(a) In the case of hospital, medical, or surgical expense coverage other than for dental or maternity expense, a reasonable extension-of-benefits or accrued liability provision is required. The required provision must provide for continuation of policy benefits in connection with the treatment of a specific accident or illness incurred while the policy was in effect. The required provision is reasonable if it provides an extension of at least 12 months under “major medical” type of coverage and, under other types of hospital, medical, or surgical coverage, provides an extension of at least 90 days or an accrued liability for expenses incurred during a period of disability.

(b)1. An extension of benefits is required in a group, blanket, or franchise policy or contract that provides coverage for dental procedures either in the form of reimbursed expenses or services performed.

2. The extension required by subparagraph 1. applies if all of the following apply:

a. The course of treatment or dental procedures were recommended in writing and commenced, in connection with a specific accident or illness incurred while the policy was in effect, by the attending physician or dentist to the patient while the patient was covered by the policy or contract.

b. The dental procedures were procedures for other than routine examinations, prophylaxis, X rays, sealants, or orthodontic services.

c. The dental procedures were performed within 90 days after the patient’s coverage ceased under the policy or contract and the termination of coverage did not occur as a result of the patient’s, or, in the case of a dependent child, the child’s parent’s, voluntary termination of coverage.

3. The extension of benefits terminates upon the earlier of:

a. The end of the 90-day period specified in sub-subparagraph 2.c.

b. The date the patient becomes covered under the succeeding policy or contract providing coverage or services for similar dental procedures.

4. If coverage or services for the dental procedures referred to in sub-subparagraph 2.a. are excluded by the succeeding policy or contract through the use of an elimination period, the patient is not covered by the succeeding policy or contract and the extension of benefits does not terminate.

5. All policy or contractual limitations, exclusions, or reductions that would have applied to the specific dental procedures had the coverage on the patient not terminated apply during the extension of benefits.

(c) In the case of maternity expense coverage, a reasonable extension of benefits or accrued liability provision is required. The required provision must provide for continuation of policy benefits in connection with maternity expenses for a pregnancy which commenced while the policy was in effect. The extension shall be for the period of that pregnancy and may not be based upon total disability.

(4) Any applicable extension of benefits or accrued liability provision shall be described in both the policy or contract involved and the group insurance certificates.

(5) The benefits payable during any period of extension or accrued liability may be subject to the regular benefit limits of the policy or contract, but may not provide benefit limits lower than the limits provided in the policy or contract.

(6) This section also applies to holders of group certificates which are renewed, delivered, or issued for delivery to residents of this state under group policies effectuated or delivered outside this state, unless a succeeding carrier under a group policy has agreed to assume liability for the benefits.