Current through Register 1531, September 27, 2024
All individual and group policies of long-term care insurance
must adequately disclose all policy provisions, including but not limited to
the following provisions.
(1)
The first page of the policy must disclose the
following:
(a) If the policy
does not provide coverage for care in a nursing home, a notation of the fact
shall be prominently attached to the first page of the policy in not less than
18-point type or in some other manner that distinguishes it from the print
otherwise appearing in the policy.
(b) The following statement: "Notice to
buyer: This policy may not cover all of the costs associated with long-term
care incurred by the buyer during the period of coverage. The buyer is advised
to review carefully all policy limitations."
(c) A section in boldface type highlighted on
the first page of the policy shall either list all preexisting condition
exclusions or limitations or refer the individual to the section within the
policy that lists all pre-existing condition exclusions or
limitations.
(d) A renewability
section notice shall clearly identify whether the policy is noncancelable or
guaranteed renewable, and whether it is being issued on other than an
individual basis (policies providing conversion privileges must specify the
benefits to be provided or must state that the converted coverage shall be on
the policy form then being issued by the carrier for this purpose).
(e)
Qualification for Federal
Income Tax Exemptions and Certain Massachusetts Mass Health (Medicaid)
Exemptions.
1. All individual,
group and employment-based group policies that are intended to qualify for
certain federal income tax exemptions must comply with standards set forth in
the federal Internal Revenue Code and related regulations.
2. All individual, group and employment-based
policies issued on or after March 15, 1999 that are intended to qualify for
exemptions from certain Massachusetts Mass Health (Medicaid) provisions
including the financial eligibility exemption in M.G.L. c. 118E, §25 and
the liability exemption in M.G.L. c. 118E, § 33, must comply with the
individual policy requirements of
211 CMR
65.05 and the minimum coverage requirements
of
130
CMR 515.014. All such policies issued prior
to March 15, 1999, need only comply with the minimum standards of
211 CMR
65.05, and the limitations and exclusions
provisions of
211 CMR
65.06 that were effective from April 1, 1989
through September 2, 1999. The provisions of 211 CMR 65.09(1)(e)2. shall apply
regardless of whether the policy is issued within or outside
Massachusetts.
3. There shall be on
the face of the policy or certificate, or a sticker attached to the first page
of the policy or certificate, a notice that includes the following in
substantially the same language and format:
FEDERAL INCOME TAX EXEMPTIONS: This policy (
IS)(IS NOT) intended to be a federally qualified
long-term care insurance contract under section 7702B(b) of the Internal
Revenue Code of 1986, as amended.
STATE MASS HEALTH (MEDICAID) EXEMPTIONS: This
policy (IS) (IS NOT) intended to satisfy Massachusetts' minimum
long-term care insurance coverage requirements as of the policy's effective
date for certain as set and liability exemptions under the Massachusetts Mass
Health (Medicaid) Program. Please note that there may be other Mass Health
(Medicaid) requirements to qualify for these exemptions.
Please read Your Options for Financing Long-Term Care:
A Massachusetts Guide for important information about the federal and
state exemptions. PLEASE NOTE THAT STATE AND FEDERAL LAWS ARE SUBJECT TO CHANGE
AND THAT FEDERAL AND STATE EXEMPTIONS MAY NOT APPLY TO THIS POLICY AT A FUTURE
DATE.
(2)
Policy Language.
(a) All terms used in the policy must be
fully explained so that the insured understands their relationship to the
benefits covered. No misleading policy names may be used (
211 CMR
65.102 includes samples of acceptable
language). The policy, riders and all amendments, as well as the application,
outline of coverage and other required disclosure materials distributed to any
potential applicant must be presented in no less than 12-point type and must
satisfy the readability standards of M.G.L. c. 175, § 2B.
(b) Riders or endorsements that provide a
benefit for which a specific premium is charged must show the premium on the
application, rider, or elsewhere in the policy. Any rider that reduces benefits
requires a signed acceptance by the policyholder or certificate
holder.
(3)
Separate Disclosure Forms.
(a) No long-term care insurance policy may be
delivered or issued for delivery in Massachusetts unless the potential insured
receives Your Options for Financing Long-Term Care: A Massachusetts
Guide, including any inserts, as prescribed by the commissioner,
regarding changes to state or federal laws, no later than the first
face-to-face contact between the potential insured and the agent, or in cases
of direct response sales, at the time that the application or enrollment form
is sent to the potential insured.
(b) No long-term care insurance policy may be
delivered or issued for delivery in Massachusetts unless the applicant receives
a policy illustration in a form that is substantially similar to the one set
forth in
211 CMR
65.100. The carrier or its agents must
deliver the policy illustration no later than the time of each policy proposal
or quote. In the case of direct response sales, the carrier must deliver the
form at the time that the application or enrollment form is sent to the
potential insured.
(c) No long-term
care insurance policy may be delivered or issued for delivery in Massachusetts
unless the applicant receives an outline of coverage substantially similar to
the one set forth in
211 CMR
65.101. The carrier or its agent must deliver
the outline of coverage prior to the presentation of the application or
enrollment form. In the case of direct response sales, the carrier must deliver
the outline of coverage at the time that the application or enrollment form is
sent to the potential insured. The carrier must also make an outline of
coverage available at any time at the potential insured's request. The outline
of coverage must be a document separate from the policy. Text that is
capitalized or underscored in the standard format of the outline of coverage
may be emphasized by other means that provide prominence equivalent to such
capitalization or underscoring.
(4)
Special Disclosure
Forms.
(a)
Other
Than Requested. If the policy is issued on a basis other than that
applied for, a disclosure statement properly describing the actual policy terms
must accompany the policy when it is delivered and must contain a statement
substantially similar to the following: "NOTICE: Read this disclosure statement
carefully. The coverage you originally applied for has not been issued. This
policy is therefore not identical to the coverage you requested, but it differs
in the following respects: [list]."
(b)
Required Disclosure Regarding
Suitability Standards. If the carrier uses a worksheet or other
marketing material to examine a potential applicant's financial situation, or
uses any other marketing material that purport to provide guidance as to
whether the applicant is suitable for long-term care insurance and subsequently
notifies the applicant that the carrier finds the applicant to be suitable for
long-term care insurance, the carrier shall provide the following disclosure
notice:
"Although [the carrier] may have determined that you meet [its]
internal standards of suitability, there are other considerations that might
influence your decision about whether this product is appropriate for you. [The
company] uses the following standards to determine suitability for its
long-term care insurance policies: [list]
Please note that you should not rely upon this statement alone
in making this purchase. You may want to contact a financial advisor for
additional information."
(c)
Required Disclosure Regarding
Changes to Mass Health (Medicaid) Eligibility and Recovery Exemptions Under
130
CMR 515.014
. If the carrier
issued a policy that met the standards of
130
CMR 515.014 and said standards are
subsequently changed, the carrier shall notify all insureds whose policies will
no longer satisfy the Mass Health (Medicaid) standards and shall offer all such
insureds on a guaranteed issue basis the opportunity to purchase needed
benefits to meet the Mass Health (Medicaid) policy criteria. The rates for any
change in benefits shall be based upon the rate characteristics for the insured
at the time of policy change.
(5)
Required Disclosure for
Medicare-Eligible Applicants. Carriers shall provide the
Guide to Health Insurance for People with Medicare and
disclosure notice as required by
211 CMR
42.09(4).
