Current through Register Vol. 63, No. 9, September 1, 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 OAR
836-052-0556. In addition:
(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 and
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 be used only
when the insurer does not have the right to change the premium.
(e) 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)(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 as
allowed in OAR 836-052-0546(4);
(b) Alcoholism and drug addiction;
(c) 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).
(d) 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;
(e) Expenses for services or items available
or paid under another long-term care insurance or health insurance
policy;
(f) 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.
(g)
(A) This
subsection does not 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 when 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.
(B) For the purpose of this subsection,
"state of policy issue" means the state in which the individual policy or
certificate was originally issued.
(h) This section does not prohibit
territorial limitations.
(3) Extension of Benefits. Termination of
long-term care insurance shall be without prejudice to any benefits payable for
institutionalization if the 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 of coverage is
governed as follows:
(a) Group long-term care
insurance issued in this state on or after September 1, 2005 shall provide
covered individuals with a basis for continuation or conversion of
coverage.
(b) For the purposes of
this section, "a basis for continuation of coverage" means a policy provision
that maintains coverage under the existing group policy when the coverage would
otherwise terminate and that 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 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.
(c) 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 that 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.
(d) 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. When 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 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.
(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 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. When the group policy from which conversion is made
replaces 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 when:
(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) That provides benefits identical to or
benefits determined by the Director to be substantially equivalent 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 (f) of this
section.
(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 that provides benefits on the basis of incurred expenses
may contain a provision that 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 be included in the
converted policy only if the converted policy also provides for a premium
decrease or refund that 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 the individual's 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 insurance policy is replaced by another group long-term
care insurance 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:
(A) The increasing age of the insured at ages
beyond 65; or
(B) 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, 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, the initial annual premium shall be based on the
reduced benefits.
(7)
Electronic enrollment for group policies is governed by the following
provisions:
(a) In the case of a group
defined in ORS 743.652(3)(a),
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" as
defined by ORS 746.600, is
maintained.
(b) The
insurer shall make available, upon request of the Director, records that will
demonstrate the insurer's ability to confirm enrollment and coverage
amounts.
(8) Request for
termination of coverage. When the policyholder, insured or beneficiary requests
termination of coverage, any unearned premiums for that insured shall be
promptly refunded to the payee or beneficiary.
(9) This section applies to rate increases
approved by the Director on or after January 1, 2008 for policies that were
delivered or issued for delivery in this state before March 1, 2006. An insurer
may offer to policyholders affected by a rate increase a contingent benefit on
lapse under the terms of OAR
836-052-0746, the right to
reduce coverage and lower premiums under the terms of
836-052-0740 or an alternative
method approved by the Director for mitigating the rate increase. If the
insurer does not offer one or the other option to policyholders:
(a) The Director may not approve the rate
increase if the increase is greater than a cumulative total of 40 percent
during any three-year period submitted; and
(b) The total amount of any approved rate
increase must be spread equally over each of the three years. The Director may
waive this restriction if the insurer demonstrates to the Director's
satisfaction that the solvency of the plan or insurer is threatened.
Stat. Auth.: ORS
731.244,
742.023,
743.013,
743.655,
743.656 &
746.240
Stats. Implemented: ORS
731.244,
742.003,
742.005,
742.009,
743.010(3),
743.013(3),
743.650,
743.653,
743.655,
743.656 &
746.240
