Page:United States Statutes at Large Volume 104 Part 2.djvu/540

 104 STAT. 1388-132 PUBLIC LAW 101-508—NOV. 5, 1990 XIX, the sale of such a policy shall be considered to be a violation of subparagraph (A). "(ID Subclause (I) shall not apply in the case of an individual who has another policy, if the individual indicates in writing, as part of the application for purchase, that the policy being purchased replaces such other policy and indicates an intent to terminate the policy being replaced when the new policy becomes effective and the issuer or seller certifies in writing that such policy will not, to the best of the issuer or seller's knowledge, duplicate coverage (taking into account any such replacement). "(Ill) Subclause (I) also shall not apply if a State medicaid plan under title XIX pays the premiums for the policy, or pays less than an individual's (who is described in section 1905(p)(l)) full liability for medicare cost sharing as defined in section 1905(p)(3)(A). "(iv) Whoever issues or sells a medicare supplemental policy in violation of this subparagraph shall be fiijed under title 18, United States Code, or imprisoned not more than 5 years, or both, and, in addition to or in lieu of such a criminal penalty, is subject to a civil money penalty of not to exceed $25,000 (or $15,000 in the case of a seller who is not the issuer of a policy) for each such violation.". (b) SUSPENSION OF POLICY DURING MEDICAID ENTITLEMENT.— Section 1882(q), as added by section 4352, is amended by adding at the end the following new paragraph: "(5)(A) Each medicare supplemental policy shall provide that benefits and premiums under the policy shall be suspended at the request of the policyholder for the period (not to exceed 24 months) in which the policyholder has applied for and is determined to be entitled to medical assistance under title XIX of the Social Security Act, but only if the policyholder notifies the issuer of such policy within 90 days after the date the individual becomes entitled to such assistance. If such suspension occurs and if the policyholder or certificate holder loses entitlement to such medical assistance, such policy shall be automatically reinstituted (effective as of the date of termination of such entitlement) under terms described in subsection (n)(6)(A)(ii) as of the termination of such entitlement if the policyholder provides notice of loss of such entitlement within 90 days after the date of such loss. "(B) Nothing in this section shall be construed as affecting the authority of a State, under title XIX of the Social Security Act, to purchase a medicare supplemental policy for an individual otherwise entitled to assistance under such title. "(C) Any person who issues a medicare supplemental policy and fails to comply with the requirements of this paragraph is subject to a civil money penalty of not to exceed $25,000 for each such violation. The provisions of section 1128A (other than the first sentence of subsection (a) and other than subsection (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).". 42 USC 1395s8 (c) EFFECTIVE DATE.— The amendments made by this section shall note. apply to policies issued or sold more than 1 year after the date of the enactment of this Act. SEC. 4355. LOSS RATIOS AND REFUND OF PREMIUMS. (a) IN GENERAL.— Section 1882 (42 U.S.C. 1395ss) is further amended—

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