02-031 C.M.R. ch. 425, § 6 - Meaning of "Guaranteed Renewable" and "Noncancelable"; Allowed Limitations and Exclusions

Current through 2022-14, April 6, 2022

A. Renewability. The terms "guaranteed renewable" or "noncancelable" shall be used in any long-term care insurance policy along with a disclosure, as required by Section 8, defining or explaining the terms.
(1) No policy shall contain any renewal provision other than "guaranteed renewable" or "noncancelable."
(2) The term "guaranteed renewable" may be used only if the insured has the right to continue the insurance in force by the timely payment of premiums and if the insurer (a) has no unilateral contractual right to change any policy provision while the insurance is in force or (b) has no right to decline renewal, except on prior approval from the superintendent to a rate change on a class basis that applies statewide. The definition of "class" may not be based on health status or claims experience.
(3) The term "noncancelable" may be used only if the insured has the right to continue the policy in force by the timely payment of premiums and the insurer has no unilateral right to change any policy provision or the premium rate.
(4) The term "level premium" may be used only when the insurer does not have the right to change the premium.
B. Limitations and Exclusions. A policy may not be issued as long-term care insurance if the policy excludes or limits coverage by the type of illness, medical condition or accident or the kind of treatment, except as follows:
(1) A preexisting condition or disease, which shall be defined and covered as required under 24-A M.R.S.A. §5075(2);
(2) Mental or nervous disorders; however, there shall be no exclusion or limitation for any disorder or disease, such as Alzheimer's Disease, which demonstrably is the result of an organic cause;
(3) Alcoholism and drug addiction;
(4) Illness, medical condition or treatment arising from:
(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, attempted suicide or any intentionally self-inflicted injury; or
(e) Aviation(this exclusion applies only to non-fare paying passengers).
(5) Treatment in a government facility (unless otherwise required by law); services for which benefits are available under Medicare or other governmental program (except Medicaid); any federal or state workers compensation, employer liability or occupational disease law; any vehicle no-fault law; services provided to the insured by a person in the insured's immediate family; and services for which usually no charge is made in the absence of insurance coverage.
(6) Expenses for services or items paid under another long-term care insurance or health insurance policy;
(7) 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.
(8)
(a) This Section is not intended to prevent any exclusion or limitation based on the 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.
(b) For purposes of this section, "state of policy issue" means the state in which the individual policy or certificate was originally issued.
(9) This subsection is not intended to prohibit territorial limitations.
C. Extension of Benefits. Termination of insurance shall be without prejudice to any benefit payable for institutionalization if the institutionalization began while the insurance was in force and continues without interruption after termination. The extension of benefits beyond the date of termination may be limited to the duration of the benefit period, if any, or to payment of the maximum benefits, and also may be made subject to any waiting period or other applicable policy provision.
D. Continuation and Conversion of Group Coverage
(1) Every group long-term care insurance policy or rider shall contain a provision for continuation or conversion of the group coverage to individual coverage.
(2) "Continuation of coverage" means a provision that maintains coverage under the group policy that would otherwise terminate and under which maintenance of coverage is subject only to the timely payment of premiums. Group policies that restrict payment of benefits or services, or that contain incentives for the insured to use certain health care providers or facilities, may provide continuation of coverage with benefits substantially equivalent to benefits under the group policy. The superintendent may make a determination as to the substantial equivalency of benefits, taking into consideration any difference between managed care and non-managed care plans, including such factors as provider system arrangements, availability of services, benefit levels and administrative complexity.
(3) "Conversion of coverage" means a policy provision entitling an insured, without establishing insurability, to have the group insurer issue a converted (i.e., an individual) policy upon termination of the group coverage for any reason, including discontinuance of the policy in its entirety or with respect to an insured class. The right to conversion may be subject to the condition that the insured be covered under the group policy (or in combination with a group policy it replaced) continuously for at least six months prior to the termination.
(4) "Converted policy" means an individual policy containing benefits identical to (or benefits the superintendent determines to be substantially equivalent to), or in excess of, the group policy from which conversion occurs. If the converted policy restricts benefits or services, or contains incentives for the insured to use certain health care providers or facilities, the superintendent may consider, in determining substantial equivalency, any difference between managed care and non-managed care plans, including such factors as provider system arrangements, availability of services, benefit levels and administrative complexity. There shall be credit for that portion of the waiting period satisfied, except with respect to an increase in benefits the insured voluntarily selects.
(5) The insured shall apply in writing for conversion in a manner the insurer directs and shall pay the first premium, if it becomes due, no later than 31 days after termination of 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.
(6) The premium for the individual policy shall be calculated based on the insurer's age at the time of inception of coverage under the group policy unless the group policy from which conversion is made replaced previous group coverage. When the terminated group coverage replaced other group coverage, the premium for the individual policy shall be calculated on the basis of the insured's age at the inception of coverage under the first group policy.
(7) Continued or converted coverage is mandatory for the insurer, except when:
(a) Termination of the group coverage was the result of failure to timely pay the premium or contribution; or
(b) The terminated coverage is replaced no later than 31 days after the termination by new group insurance, which begins no later than the day after the date of termination; the new group policy provides benefits identical (or substantially equivalent, as the superintendent may determine) to the terminated coverage; and the premium is calculated as described in Section 6.
(8) Notwithstanding any contrary provision in Section 6, an individual policy issued pursuant to conversion may contain a reduction of benefits provision if the insured has another long-term care policy which pays benefits based on incurred expenses. The reduction of benefits may occur if the additional coverage, when combined with the benefits under the converted policy, exceeds 100% of incurred expenses. The insurer may enforce a reduction of benefits provision only if the converted policy requires a reduction or refund of premium reflecting the reduced benefits.
(9) The converted policy may provide that its benefits together with the benefits under the terminated group policy shall not exceed benefits payable under the group coverage, had it remained in force.
(10) Notwithstanding any provision of Section 6, an insured whose eligibility for group coverage is based on his/her relationship to another person, shall be entitled to a continuation of the group policy if the qualifying relationship ended because of death or dissolution of marriage.
(11) For the purposes of Section 6, a managed-care plan is a health care or assisted living plan designed to coordinate patient care or to control costs through utilization review, case management or use of provider networks.
E. Discontinuance and Replacement. If a group policy is replaced by another group policy issued to the same policyholder, the successor insurer shall offer long-term care coverage to all persons insured, as of the termination date, under the previous policy. Coverage and premiums under the successor policy:
(1) Shall not result in an exclusion for any preexisting condition for which there would be coverage under the replaced policy; and
(2) Shall not vary or depend on the insured's health or disability status, claim experience or prior use of long-term care services.
F. Premiums
(1) The premium charged to an insured shall not increase because of either:
(a) The increasing age of the insured at ages beyond 65; or
(b) The duration the insured has been covered under the policy.
(2) The purchase of additional coverage shall not be considered a premium rate increase for the purpose of the calculation required by Section 26, the portion of the premium attributable to the additional coverage shall be added to and considered part of the initial annual premium.
(3) A reduction in benefits shall not be considered a premium change, but, for the purpose of the calculation under Section 26, the initial annual premium shall be based on the reduced benefits.
G. Electronic Signatures
(1) In the case of an employee group as defined in 24-A M.R.S.A. §2804, a labor union groups as defined in 24-A M.R.S.A. §2805, or a trustee groups as defined in 24-A M.R.S.A. §2806, any requirement that an insurer or producer obtain the insured's signature shall be deemed satisfied if:
(a) The insurer, producer or policyholder receives the insured's consent by telephonic or electronic enrollment. 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) Such enrollment contains reasonable and necessary safeguards to protect the confidentiality of information which 24-A M.R.S.A. §§2201 - 2220 define as privileged information.
(2) On request, the insurer shall make available to the superintendent records that demonstrate the insurer's ability to confirm enrollments and the amounts of coverage.
H. Certificate holder's Right to Copy of Group Policy. Every group long-term care insurance policyholder shall inform the certificate holder of the right, at his/her request to the insurer and at no charge to the certificate holder, to receive a copy of the group policy from the insurer or the policyholder. Every certificate also shall disclose that if there is any inconsistency between the policy and the certificate, the policy shall control.

Notes

02-031 C.M.R. ch. 425, § 6

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