Current through Register Vol. 48, No. 12, March 22, 2024
a) Renewability. The terms "guaranteed
renewable" and "noncancellable" shall not be used in any individual long-term
care insurance policy or certificate without explanatory language in accordance
with the disclosure requirements of Section
2012.62.
1) A policy issued to an individual shall not
contain renewal provisions other than "guaranteed renewable" or
"noncancellable".
2) 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.
3) 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.
4) The term "level premium" may only be used
when the insurer does not have the right to change the premium.
5) In addition to the other requirements of
subsection (a), 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.
b) 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:
1) Preexisting conditions or
diseases;
2) Mental or nervous
disorders; however, this shall not permit exclusion or limitation of benefits
on the basis of Alzheimer's Disease or senile dementia;
3) Alcoholism and drug addiction;
4) Illness, treatment or medical condition
arising out of:
A) war or act of war (whether
declared or undeclared);
B)
participation in a felony, riot or insurrection;
C) service in the armed forces or units
auxiliary thereto;
D) suicide (sane
or insane), attempted suicide or intentionally self-inflicted injury;
or
E) aviation (this exclusion
applies only to non-fare paying passengers);
5) 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;
6) Expenses for services or items available
or paid under another traditional long-term care insurance or health insurance
policy;
7) In the case of a tax
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;
8) This subsection (b) 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 in the state in which the policy was issued under the following
conditions:
A) When the state other than the
state in which the policy was issued does not have the provider licensing,
certification or registration required in the policy, but when the provider
satisfies the policy requirements outlined for providers in lieu of licensure,
certification or registration; or
B) When the state other than the state in
which the policy was issued licenses, certifies or registers the provider under
another name.
9) This
subsection (b) is not intended to prohibit territorial limitations.
c) Extension of Benefits.
Termination of long-term 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. Such 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.
d) Continuation or
Conversion
1) Group long-term care insurance
issued in this State on or after February 1, 1994 shall provide covered
individuals with a basis for continuation or conversion of coverage.
2) For the purposes of this Section, "a basis
for continuation of coverage" means a policy provision which maintains coverage
under the existing group policy when such coverage would otherwise terminate
and which is subject only to the continued timely payment of premium when due.
Group policies which restrict provision of benefits and services to, or contain
incentives to use certain providers or facilities may provide continuation
benefits which are substantially equivalent to the benefits of the existing
group policy. The Director 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.
3)
For the purposes of this Section, "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 the individual is covered, without
evidence of insurability.
4) For
the purposes of this Section, "converted policy" means an individual policy of
long-term care insurance providing benefits identical to or benefits determined
by the Director 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 the provision of benefits and
services, or contains incentives to use certain providers and/or facilities,
the Director, 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. The converted policy offered shall be on a form that is available
for general sale in this State.
5)
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 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 guaranteed
renewable.
6) 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.
7)
Continuation of coverage or issuance of a converted policy shall be mandatory,
except where:
A) Termination of group
coverage resulted from an individual's failure to make any required payment of
premium or contribution when due; or
B) The terminating coverage is replaced not
later than 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 Director to be
substantially similar to, or in excess of, those provided by the terminating
coverage; and
ii) The premium for
which is calculated in a manner consistent with the requirements of subsection
(d)(6).
8)
Notwithstanding any other provision of this Section, a converted policy issued
to an individual who at the time of conversion is covered by another long-term
care insurance policy that 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% of incurred expenses. This 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.
9) 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.
10) Notwithstanding any other provision of
this Section, any 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.
11) For the purposes of this Section, 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.
e) 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:
1) Shall not result in any exclusion for
preexisting conditions that would have been covered under the group policy
being replaced; and
2) Shall not
vary or otherwise depend on the individual's health or disability status, claim
experience or use of long-term care services.
f) The premiums charged to an insured shall
not increase due to either:
1) The increasing
age of the insured at ages beyond 65; or
2) The duration the insured has been covered
under the policy.
g) No
long-term care insurance policy shall provide coverage for skilled nursing care
only or provide significantly more coverage for skilled care in a facility than
coverage for lower levels of care.
h) Electronic Enrollment for Group Policies
1) In the case of a group defined in Section
351A-1(e) of the Code, any requirement that a signature of an insured be
obtained by an insurance producer or insurer shall be deemed satisfied if:
A) 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;
B) The telephonic or electronic enrollment
provides necessary and reasonable safeguards to assure the accuracy, retention
and prompt retrieval of records; and
C) The telephonic or electronic enrollment
provides necessary and reasonable safeguards to assure that the confidentiality
of individually identifiable information and privileged information is
maintained.
2) Upon
request of the Director the insurer shall make available records that will
demonstrate the insurer's ability to confirm enrollment and coverage
amounts.
i) Except for
subsections (a)(1), (b)(8) and (9) and (g), which become effective January 1,
2009, subsections (a) through (h) become effective July 1, 2008.
j) For policies issued from July 1, 2008
through January 1, 2009, the following requirements taken from subsections
(a)(1), (b)(8) and (g) apply:
1) For purposes
of subsection (a), no individual long-term care insurance policy or certificate
issued to an individual shall contain renewal provisions less favorable to the
insured than "guaranteed renewable".
2) Subsection (b) is not intended to prohibit
exclusions and limitations for payment of services provided outside the United
States.
3) For purposes of
subsection (g), no traditional long-term care insurance policy shall:
A) be cancelled, nonrenewed or otherwise
terminated on grounds of the age or deterioration of the mental or physical
health of the insured individual or certificateholder;
B) contain a provision establishing a new
waiting period in the event existing coverage is converted to or replaced by
new or other coverage, except with respect to an increase in benefits
voluntarily selected by the insured individual or group policyholder;
C) provide coverage for skilled nursing care
only or provide significantly more coverage for skilled care in a facility than
coverage for lower levels of care.
4) There is no requirement for subsection
(b)(9) prior to January 1, 2009.