Current through Register Vol. 56, No. 6, March 18,
2024
(a) 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
11:4-34.6 and 34.7.
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 carrier has no unilateral right to make any change in any
provision of the policy while the insurance is in force, and cannot decline to
renew, except that rates may be revised by the carrier 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
carrier has no right to unilaterally make any change in any provision of the
policy or in the premium rate.
4.
The term "level premium" may only be used when the carrier does not have the
right to change the premium.
5. In
addition to the other requirements of this subsection, a qualified long-term
care insurance contract shall be guaranteed renewable, within the meaning of
Section 7702B(b)(l)(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 for long-term care services by type of illness, treatment,
medical condition or accident, except as follows:
1. Preexisting conditions or diseases: The
policy or certificate shall not exclude coverage for a loss or confinement
which is the result of a preexisting condition if that loss or confinement
begins later than six months following the effective date of coverage of an
insured person.
2. Mental or
nervous disorders; however, this shall not permit exclusion or limitation of
benefits on the basis of Alzheimer's Disease;
3. Alcoholism and drug addiction;
4. Illness, treatment or medical condition
arising out of:
i. War or act of war (whether
declared or undeclared) as permitted by N.J.A.C. 11:22-6;
ii. Participation in a riot or insurrection,
or the commission of or attempt to commit a felony;
iii. Service in the armed forces or units
auxiliary thereto as referenced in N.J.A.C. 11:22-6;
iv. Suicide (sane or insane), attempted
suicide or intentionally self- inflicted injury; or
v. 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. 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; and
7. This subsection is
not intended to prohibit exclusions and limitations for services provided
outside of the United States.
(c) Extension of Benefits: Termination of
long-term care insurance shall be without prejudice to any benefits payable for
continuous loss which began while the long-term care insurance was in force and
continues without interruption after termination of the long-term care
insurance. Such extension of benefits beyond the period the long-term care
insurance was in force may be predicated upon the insured's continuous
inability to perform activities of daily living or cognitive impairment, and
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: Group
long-term care insurance issued in this State on or after December 19, 2005
shall provide covered individuals with a basis for continuation or conversion
of coverage.
1. For the purposes of this
section, "a basis for continuation of coverage" means a policy provision that
maintains coverage under the existing in force group policy when the coverage
would otherwise terminate and which is subject only to the continued timely
payment of premiums and/or contributions when due.
2. For the purposes of this section, "a basis
for conversion of coverage" means a policy provision that states that an
individual whose coverage under the in force 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 conversion policy by the carrier under
whose group policy he or she is or was covered, without evidence of
insurability.
3. For the purposes
of this section, "conversion 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.
4. Written application for the conversion
policy shall be made and the first premium due, if any, shall be paid as
directed by the carrier not later than 31 days after termination of coverage
under the group policy. The conversion policy shall be issued effective on the
day following the termination of coverage under the group policy, and shall be
renewable annually.
5. Unless the
group policy from which conversion is made replaced previous group coverage,
the premium for the conversion 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 conversion policy shall
be calculated on the basis of the insured's age at inception of coverage under
the prior group policy.
6.
Continuation of coverage or issuance of a conversion policy shall be mandatory,
except where:
i. Termination of group
coverage resulted from an individual's failure to make any required payment of
premium or contribution when due; or
ii. The terminating coverage is replaced, not
later than 31 days after termination, by group coverage effective on the day
following the termination of coverage:
(1)
Providing benefits identical to or benefits determined by the Commissioner to
be substantially equivalent to or in excess of those provided by the
terminating coverage; and
(2) The
premium for which is calculated in a manner consistent with the requirements of
(d)5 above.
7. The conversion policy may provide that the
benefits payable under the conversion 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 in effect.
8. Notwithstanding any other provision of
this section, 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.
(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 carrier
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
carrier and premiums charged to persons under the new group policy shall not:
1. Result in an exclusion for preexisting
conditions that would have been covered under the group policy being replaced;
and
2. Vary or otherwise depend on
the individual's health or disability status, claim experience or use of
long-term care services.
(f) The purchase of additional coverage shall
not be considered a premium rate increase, but for purposes of the calculation
required under 11:4-34.24
,
the portion of the premium attributable to the additional coverage shall be
added to and considered part of the initial annual premium. A reduction in
benefits shall not be considered a premium change, but for purposes of the
calculation required under N.J.A.C. 11:4-34.24, the initial
annual premium shall be based on the reduced benefits. The premium 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) A policy that provides coverage in
addition to long-term care coverage shall separately identify the premium, rate
or charge for the long-term care coverage. Where flexible premiums or charges
can be applied to purchase long-term care or other coverage, the form must
disclose how premiums will be applied, including any options the policyholder
has for the application of these premiums and provisions for protection against
unintentional lapse of one or the other coverage.
(h) Any long-term care benefit that is
provided other than through acceleration of an annuity or life insurance
benefit shall contain the required provisions described at N.J.S.A 17B:26-3.
17B:26-16 will also apply to
provisions respecting the matters set forth therein that are contained in
individual long-term care policies. Group long-term care insurance policies
shall contain the standard provisions required by
17B:27-33. Group and individual
annuities and life insurance policies or riders which provide directly or which
supplement long-term care insurance shall apply the above cited provision only
to the long-term care benefit.
(i)
No long-term care policy or certificate shall:
1. Be cancelled, nonrenewed or otherwise
terminated on the grounds of the age or the deterioration of the mental or
physical health of the insured;
2.
Require, for purposes of a restoration of benefits provision, that the period
between confinements be more than six months; or
3. Contain a mandatory case management
provision.
(j) Annuity
contracts and life insurance policies that provide directly or which supplement
long-term care insurance shall comply with the statutes and regulations
governing individual life insurance, group life insurance, variable contracts
and annuities, as applicable.
