Current through Register Vol. 42, No. 5, February 29, 2024
(1) Renewability. The terms "guaranteed
renewable" and "noncancellable" shall not be used in any individual long-term
care insurance policy without further explanatory language in accordance with
the disclosure requirements of Rule
482-1-091-.08.
(a) A policy issued to an individual shall
not contain renewal provisions other than "guaranteed renewable" or
"noncancellable."
(b) The term
"guaranteed renewable" may be used only when the insured has the right to
continue the long-term care insurance in force by the timely payment of
premiums and when the insurer has no unilateral right to make any change in any
provision of the policy or rider while the insurance is in force, and cannot
decline to renew, except that rates may be revised by the insurer on a class
basis.
(c) The term
"noncancellable" may be used only when the insured has the right to continue
the long-term care insurance in force by the timely payment of premiums during
which period the insurer has no right to unilaterally make any change in any
provision of the insurance or in the premium rate.
(d) The term "level premium" may only be used
when the insurer does not have the right to change the premium.
(e) In addition to the other requirements of
this Paragraph (1), a qualified long-term care insurance contract shall be
guaranteed renewable, within the meaning of Section 7702B(b)(1)(C) of the
Internal Revenue Code of 1986, as amended.
(2) Limitations and Exclusions. A policy may
not be delivered or issued for delivery in this state as long-term care
insurance if the policy limits or excludes coverage by type of illness,
treatment, medical condition or accident, except as follows:
(a) Preexisting conditions or
diseases.
(b) Mental or nervous
disorders; however, this shall not permit exclusion or limitation of benefits
on the basis of Alzheimer's Disease.
(c) Alcoholism and drug addiction.
(d) Illness, treatment or medical condition
arising out of any of the following:
1. War
or act of war (whether declared or undeclared).
2. Participation in a felony, riot or
insurrection.
3. Service in the
armed forces or units auxiliary thereto.
4. Suicide (sane or insane), attempted
suicide or intentionally self-inflicted injury.
5. Aviation (this exclusion applies only to
non-fare-paying passengers).
(e) Treatment provided in a government
facility (unless otherwise required by law), services for which benefits are
available under Medicare or other governmental program (except Medicaid), any
state or federal workers' compensation, employer's liability or occupational
disease law, or any motor vehicle no-fault law, services provided by a member
of the covered person's immediate family and services for which no charge is
normally made in the absence of insurance.
(f) Expenses for services or items available
or paid under another long-term care insurance or health insurance
policy.
(g) In the case of a
qualified long-term care insurance contract, expenses for services or items to
the extent that the expenses are reimbursable under Title XVIII of the Social
Security Act or would be so reimbursable but for the application of a
deductible or coinsurance amount.
(h)
1. This
Paragraph (2) is not intended to prohibit exclusions and limitations by type of
provider. However, no long term care issuer may deny a claim because services
are provided in a state other than the state of policy issued under the
following conditions:
i. When the state other
than the state of policy issue does not have the provider licensing,
certification or registration required in the policy, but where the provider
satisfies the policy requirements outlined for providers in lieu of licensure,
certification or registration: or
ii. When the state other than the state of
policy issue licenses, certifies or registers the provider under another
name.
2. For purposes of
this paragraph, "state of policy issue" means the state in which the individual
policy or certificate was originally issued.
(i) This paragraph is not intended to
prohibit territorial limitations.
(3) Extension of Benefits. Termination of
long-care insurance shall be without prejudice to any benefits payable for
institutionalization if such institutionalization began while the long-term
care insurance was in force and continues without interruption after
termination. The extension of benefits beyond the period the long-term care
insurance was in force may be limited to the duration of the benefit period, if
any, or to payment of the maximum benefits and may be subject to any policy
waiting period, and all other applicable provisions of the policy.
(4) Continuation or Conversion.
(a) Group long-term care insurance issued in
this state on or after the effective date of this chapter shall provide covered
individuals with a basis for continuation or conversion of coverage.
(b) For the purposes of this rule, "a basis
for continuation of coverage" means a policy provision which maintains coverage
under the existing group policy when the coverage would otherwise terminate and
which is subject only to the continued timely payment of premium when due.
Group policies that restrict provision of benefits and services to, or contain
incentives to use certain providers or facilities may provide continuation
benefits that are substantially equivalent to the benefits of the existing
group policy. The Commissioner shall make a determination as to the substantial
equivalency of benefits, and in doing so, shall take into consideration the
differences between managed care and non-managed care plans, including, but not
limited to, provider system arrangements, service availability, benefit levels
and administrative complexity.
(c)
For the purposes of this rule, "a basis for conversion of coverage" means a
policy provision that an individual whose coverage under the group policy would
otherwise terminate or has been terminated for any reason, including
discontinuance of the group policy in its entirety or with respect to an
insured class, and who has been continuously insured under the group policy
(and any group policy which it replaced), for at least six months immediately
prior to termination, shall be entitled to the issuance of a converted policy
by the insurer under whose group policy he or she is covered, without evidence
of insurability.
(d) For the
purposes of this rule, "converted policy" means an individual policy of
long-term care insurance providing benefits identical to or benefits determined
by the Commissioner to be substantially equivalent to or in excess of those
provided under the group policy from which conversion is made. Where the group
policy from which conversion is made restricts provision of benefits and
services to, or contains incentives to use certain providers or facilities, the
Commissioner, in making a determination as to the substantial equivalency of
benefits, shall take into consideration the differences between managed care
and non-managed care plans, including, but not limited to, provider system
arrangements, service availability, benefit levels and administrative
complexity.
(e) Written application
for the converted policy shall be made and the first premium due, if any, shall
be paid as directed by the insurer not later than thirty-one (31) days after
termination of coverage under the group policy. The converted policy shall be
issued effective on the day following the termination of coverage under the
group policy, and shall be renewable annually.
(f) Unless the group policy from which
conversion is made replaced previous group coverage, the premium for the
converted policy shall be calculated on the basis of the insured's age at
inception of coverage under the group policy from which conversion is made.
Where the group policy from which conversion is made replaced previous group
coverage, the premium for the converted policy shall be calculated on the basis
of the insured's age at inception of coverage under the group policy
replaced.
(g) Continuation of
coverage or issuance of a converted policy shall be mandatory, except in either
of the following cases:
1. Termination of
group coverage resulted from an individual's failure to make any required
payment of premium or contribution when due.
2. The terminating coverage is replaced not
later than thirty-one (31) days after termination, by group coverage effective
on the day following the termination of coverage:
(i) Providing benefits identical to or
benefits determined by the Commissioner to be substantially equivalent to or in
excess of those provided by terminating coverage; and
(ii) The premium for which is calculated in a
manner consistent with the requirements of Subparagraph (f) of this Paragraph
(4).
(h)
Notwithstanding any other provision of this rule, a converted policy issued to
an individual who at the time of conversion is covered by another long-term
care insurance policy which provides benefits on the basis of incurred
expenses, may contain a provision which results in a reduction of benefits
payable if the benefits provided under the additional coverage, together with
the full benefits provided by the converted policy, would result in payment of
more than 100 percent of incurred expenses. The provision shall only be
included in the converted policy if the converted policy also provides for a
premium decrease or refund which reflects the reduction in benefits
payable.
(i) The converted policy
may provide that the benefits payable under the converted policy, together with
the benefits payable under the group policy from which conversion is made,
shall not exceed those that would have been payable had the individual's
coverage under the group policy remained in force and effect.
(j) Notwithstanding any other provision of
this rule, an insured individual whose eligibility for group long-term care
coverage is based upon his or her relationship to another person shall be
entitled to continuation of coverage under the group policy upon termination of
the qualifying relationship by death or dissolution of marriage.
(k) For the purposes of this rule a
"Managed-Care Plan" is a health care or assisted living arrangement designed to
coordinate patient care or control costs through utilization review, case
management or use of specific provider networks.
(5) Discontinuance and Replacement. If a
group long-term care policy is replaced by another group long-term care policy
issued to the same policyholder, the succeeding insurer shall offer coverage to
all persons covered under the previous group policy on its date of termination.
Coverage provided or offered to individuals by the insurer and premiums charged
to persons under the new group policy:
(a)
Shall not result in an exclusion for preexisting conditions that would have
been covered under the group policy being replaced; and
(b) Shall not vary or otherwise depend on the
individual's health or disability status, claim experience, or use of long-term
care services.
(6)
(a) The premium charged to an insured shall
not increase due to either of the following:
1. The increasing age of the insured at ages
beyond sixty-five (65).
2. The
duration the insured has been covered under the policy.
(b) The purchase of additional coverage shall
not be considered a premium rate increase, but for purposes of the calculation
required under Rule
482-1-091-.25,
the portion of the premium attributable to the additional coverage shall be
added to and considered part of the initial annual premium.
(c) A reduction in benefits shall not be
considered a premium change, but for purpose of the calculation required under
Rule
482-1-091-.25,
the initial annual premium shall be based on the reduced benefits.
(7) Electronic Enrollment for
Group Policies.
(a) In the case of a group
defined in Paragraph a. of Subdivision (4) of Section
27-19-103,
Code of Ala. 1975, any requirement that a signature of
an insured be obtained by an agent or insurer shall be deemed satisfied if all
of the following are done:
1. The consent is
obtained by telephonic or electronic enrollment by the group policyholder or
insurer. A verification of enrollment information shall be provided to the
enrollee.
2. The telephonic or
electronic enrollment provides necessary and reasonable safeguards to assure
the accuracy, retention and prompt retrieval of records.
3. The telephonic or electronic enrollment
provides necessary and reasonable safeguards to assure that the confidentiality
of individually identifiable information and privileged information is
maintained.
(b) he
insurer shall make available, upon request of the Commissioner, records that
will demonstrate the insurer's ability to confirm enrollment and coverage
amounts.
Author: Reyn Norman, Associate
Counsel
Statutory Authority:
Code of Ala.
1975, §§
27-2-17,
27-19-100,
et
seq.