CHAPTER 39LONG-TERM CARE INSURANCEDIVISION IGENERAL PROVISIONS19139.1(514G) Purpose. The purpose of this chapter is to implement Iowa Code chapter 514G, to promote the availability of long-term care insurance coverage, to protect applicants for long-term care insurance, as defined, from unfair or deceptive sales or enrollment practices, to facilitate public understanding and comparison of long-term care insurance coverages, and to facilitate flexibility and innovation in the development of long-term care insurance.19139.2(514G) Authority. This chapter is issued pursuant to the authority vested in the commissioner under Iowa Code section 514G.105 in accordance with the procedures set forth in Iowa Code chapter 17A.Related ARC(s): 5598C19139.3(514G) Applicability and scope. Except as otherwise specifically provided, this chapter applies to all long-term care insurance policies and long-term care coverage arrangements delivered or issued for delivery in this state on or after the effective date hereof, by insurers, fraternal benefit societies, nonprofit health, hospital and medical service corporations, prepaid health plans, health maintenance organizations and all similar organizations.19139.4(514G) Definitions. For the purpose of these rules, the terms “Group long-term care insurance,” “Commissioner,” “Applicant,” “Policy,” “Preexisting condition” and “Certificate” shall have the meanings set forth in Iowa Code chapter 514G, “Long-Term Care Insurance Act.”An aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship; If the gross premiums for certain age groups appear to be inconsistent with this requirement, the commissioner may request a demonstration under subrule 39.26(3) based on a standard age distribution; and (5) A statement that the premium rate schedule is not less than the premium rate schedule for existing similar policy forms also available from the insurer except for reasonable differences attributable to benefits; or a comparison of the premium schedules for similar policy forms that are currently available from the insurer with an explanation of the differences. 39.26(3) Demonstration on request. a. The commissioner may request an actuarial demonstration that benefits are reasonable in relation to premiums. The actuarial demonstration shall include either premium and claim experience on similar policy forms, adjusted for any premium or benefit differences, relevant and credible data from other studies, or both. b. In the event the commissioner asks for additional information under this provision, the period in subrule 39.26(2) does not include the period during which the insurer is preparing the requested information.19139.27(514G) Reporting requirements. 39.27(1) Every insurer shall maintain for each producer records of that producer’s amount of replacement sales as a percent of the producer’s total annual sales and the amount of lapses of long-term care insurance policies sold by the producer as a percent of the producer’s total annual sales. 39.27(2) Every insurer shall report annually by June 30 the 10 percent of its producers with the greatest percentages of lapses and replacements as measured by subrule 39.27(1) in the format prescribed in Appendix G. 39.27(3) Reported replacement and lapse rates do not alone constitute a violation of insurance laws or necessarily imply wrongdoing. The reports are for the purpose of reviewing more closely producer activities regarding the sale of long-term care insurance. 39.27(4) Every insurer shall report annually by June 30 the number of lapsed policies as a percent of its total annual sales and as a percent of its total number of policies in force as of the end of the preceding calendar year in the format prescribed in Appendix G. 39.27(5) Every insurer shall report annually by June 30 the number of replacement policies sold as a percent of its total annual sales and as a percent of its total number of policies in force as of the preceding calendar year in the format prescribed in Appendix G. 39.27(6) Every insurer shall report annually by June 30, for qualified long-term care insurance contracts, the number of claims denied for each class of business, expressed as a percentage of claims denied in the format prescribed in Appendix E. 39.27(7) For purposes of rule 191—39.27(514G): a. “Policy” means only long-term care insurance; b. Subject to paragraph “c” below, “claim” means a request for payment of benefits under an in-force policy regardless of whether the benefit claimed is covered under the policy or any terms or conditions of the policy have been met; c. “Denied” means the insurer refuses to pay a claim for any reason other than for claims not paid for failure to meet the waiting period or because of an applicable preexisting condition; and d. “Report” means on a statewide basis. 39.27(8) Reports required under this rule shall be filed with the commissioner. The first reports under this rule are due June 30, 2004.Related ARC(s): 8271B19139.28(514G) Premium rate schedule increases. 39.28(1) This rule applies to any long-term care policy or certificate issued in this state on or after February 1, 2003. For certificates issued under a group long-term care insurance policy which policy was in force on February 1, 2003, the provisions of this rule shall apply on the policy anniversary following July 1, 2003. 39.28(2) An insurer shall provide notice of a pending premium rate schedule increase, including an exceptional increase, to the commissioner at least 30 days prior to the notice to the policyholders and shall include: a. Information required by rule 191—39.25(514G); b. Certification by a qualified actuary that: (1) If the requested premium rate schedule increase is implemented and the underlying assumptions, which reflect moderately adverse conditions, are realized, no further premium rate schedule increases are anticipated; (2) The premium rate filing is in compliance with the provisions of this rule; c. An actuarial memorandum justifying the rate schedule change request that includes: (1) Lifetime projections of earned premiums and incurred claims based on the filed premium rate schedule increase; and the method and assumptions used in determining the projected values, including reflection of any assumptions that deviate from those used for pricing other forms currently available for sale;The projected experience should be limited to the increases in claims expenses attributable to the approved reasons for the exceptional increase; and In the event the commissioner determines that offsets may exist, the insurer shall use appropriate net projected experience; (2) Disclosure of how reserves have been incorporated in this rate increase whenever the rate increase will trigger contingent benefit upon lapse; (3) Disclosure of the analysis performed to determine why a rate adjustment is necessary, which pricing assumptions were not realized and why, and what other actions taken by the company have been relied on by the actuary; (4) A statement that policy design, underwriting and claims adjudication practices have been taken into consideration; and (5) In the event that it is necessary to maintain consistent premium rates for new certificates and certificates receiving a rate increase, the insurer will need to file composite rates reflecting projections of new certificates; d. A statement that renewal premium rate schedules are not greater than new business premium rate schedules except for differences attributable to benefits, unless sufficient justification is provided to the commissioner; and e. Sufficient information for review of the premium rate schedule increase by the commissioner. 39.28(3) All premium rate schedule increases shall be determined in accordance with the following requirements: a. Exceptional increases shall provide that 70 percent of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits; b. Premium rate schedule increases shall be calculated such that the sum of the accumulated value of incurred claims, without the inclusion of active life reserves, and the present value of future projected incurred claims, without the inclusion of active life reserves, will not be less than the sum of the following: (1) The accumulated value of the initial earned premium multiplied by 58 percent; (2) Eighty-five percent of the accumulated value of prior premium rate schedule increases on an earned basis; (3) The present value of future projected initial earned premiums multiplied by 58 percent; and (4) Eighty-five percent of the present value of future projected premiums not in subparagraph (3) above on an earned basis; c. In the event that a policy form has both exceptional and other increases, the values in subparagraphs 39.28(3)“b”(2) and (4) will also include 70 percent for exceptional rate increase amounts; and d. All present and accumulated values used to determine rate increases shall use the maximum valuation interest rate for contract reserves as recommended by the NAIC Financial Examiners Handbook. The actuary shall disclose as part of the actuarial memorandum the use of any appropriate averages. 39.28(4) For each rate increase that is implemented, the insurer shall file for review by the commissioner updated projections, as defined in subparagraph 39.28(2)“c”(1), annually for the next three years and include a comparison of actual results to projected values. The commissioner may extend the period to greater than three years if actual results are not consistent with projected values from prior projections. For group insurance policies that meet the conditions in subrule 39.28(11), the projections required by this subrule shall be provided to the policyholder in lieu of filing with the commissioner. 39.28(5) If any premium rate in the revised premium rate schedule is greater than 200 percent of the comparable rate in the initial premium schedule, lifetime projections, as defined in subparagraph 39.28(2)“c”(1), shall be filed for review by the commissioner every five years following the end of the required period in subrule 39.28(4). For group insurance policies that meet the conditions in subrule 39.28(11), the projections required by this paragraph shall be provided to the policyholder in lieu of filing with the commissioner. 39.28(6) If the commissioner has determined that the actual experience following a rate increase does not adequately match the projected experience and that the current projections under moderately adverse conditions demonstrate that incurred claims will not exceed proportions of premiums specified in subrule 39.28(3), the commissioner may require the insurer to implement any of the following: a. Premium rate schedule adjustments; or b. Other measures to reduce the difference between the projected and actual experience.In determining whether the actual experience adequately matches the projected experience, consideration should be given to subparagraph 39.28(2)“c”(5), if applicable. 39.28(7) If the majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse, the insurer shall file: a. A plan, subject to commissioner approval, for improved administration or claims processing designed to eliminate the potential for further deterioration of the policy form requiring further premium rate schedule increases, or both, or to demonstrate that appropriate administration and claims processing have been implemented or are in effect; otherwise, the commissioner may impose the condition in subrule 39.28(8); and b. The original anticipated lifetime loss ratio, and the premium rate schedule increase that would have been calculated according to subrule 39.28(3) had the greater of the original anticipated lifetime loss ratio or 58 percent been used in the calculations described in subparagraphs 39.28(3)“b”(1) and (3). 39.28(8) Review of lapse rates. a. For a rate increase filing that meets the following criteria, the commissioner shall review, for all policies included in the filing, the projected lapse rates and past lapse rates during the 12 months following each increase to determine if significant adverse lapsation has occurred or is anticipated: (1) The rate increase is not the first rate increase requested for the specific policy form or forms; (2) The rate increase is not an exceptional increase; and (3) The majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse. b. In the event significant adverse lapsation has occurred, is anticipated in the filing or is evidenced in the actual results as presented in the updated projections provided by the insurer following the requested rate increase, the commissioner may determine that a rate spiral exists. Following the determination that a rate spiral exists, the commissioner may require the insurer to offer, without underwriting, to all in-force insureds subject to the rate increase the option to replace existing coverage with one or more reasonably comparable products being offered by the insurer or its affiliates. (1) The offer shall:A long-term care insurance policy may pay most of the costs for your care in a nursing home. Many policies also pay for care at home or other community settings. Since policies can vary in coverage, you should read this policy and make sure you understand what it covers before you buy it. [You should not buy this insurance policy unless you can afford to pay the premiums every year.] [Remember that the company can increase premiums in the future.] Drafting Note: For single premium policies, delete this bullet; for noncancellable policies, delete the second sentence only.The personal worksheet includes questions designed to help you and the company determine whether this policy is suitable for your needs. MedicareMedicare does not pay for most long-term care. MedicaidMedicaid will generally pay for long-term care if you have very little income and few assets. You probably should not buy this policy if you are now eligible for Medicaid. Many people become eligible for Medicaid after they have used up their own financial resources by paying for long-term care services. When Medicaid pays your spouse’s nursing home bills, you are allowed to keep your house and furniture, a living allowance, and some of your joint assets. Your choice of long-term care services may be limited if you are receiving Medicaid. To learn more about Medicaid, contact your local or state Medicaid agency. Shopper’sGuideMake sure the insurance company or producer gives you a copy of a booklet called the National Association of Insurance Commissioners’ “Shopper’s Guide to Long-Term Care Insurance.” Read it carefully. If you have decided to apply for long-term care insurance, you have the right to return the policy within 30 days and get back any premium you have paid if you are dissatisfied for any reason or choose not to purchase the policy. CounselingFree counseling and additional information about long-term care insurance are available through your state’s insurance counseling program. Contact your state insurance department or department on aging for more information about the senior health insurance counseling program in your state. APPENDIX DLong-Term Care Insurance Suitability LetterDear [Applicant]:Your recent application for long-term care insurance included a “personal worksheet,” which asked questions about your finances and your reasons for buying long-term care insurance. For your protection, state law requires us to consider this information when we review your application, to avoid selling a policy to those who may not need coverage.[Your answers indicate that long-term care insurance may not meet your financial needs. We suggest that you review the information provided along with your application, including the booklet “Shopper’s Guide to Long-Term Care Insurance” and the page titled “Things You Should Know Before Buying Long-Term Care Insurance.” Your state insurance department also has information about long-term care insurance and may be able to refer you to a counselor free of charge who can help you decide whether to buy this policy.][You chose not to provide any financial information for us to review.]Drafting Note: Choose the paragraph that applies.We have suspended our final review of your application. If, after careful consideration, you still believe this policy is what you want, check the appropriate box below and return this letter to us within the next 60 days. We will then continue reviewing your application and issue a policy if you meet our medical standards.If we do not hear from you within the next 60 days, we will close your file and not issue you a policy. You should understand that you will not have any coverage until we hear back from you, approve your application and issue you a policy.Please check one box and return in the enclosed envelope.□Yes, [although my worksheet indicates that long-term care insurance may not be a suitable purchase,] I wish to purchase this coverage. Please resume review of my application.Drafting Note: Delete the phrase in brackets if the applicant did not answer the questions about income.□No. I have decided not to buy a policy at this time.APPLICANT’S SIGNATUREDATE Please return to [issuer] at [address] by [date].APPENDIX EClaims Denial Reporting FormLong-Term Care InsuranceFor the State of IowaFor the Reporting Year of_______________________Company Name: Due: June 30 annuallyCompany Address: Company NAIC Number: Contact Person: __________________________________ Phone Number: Line of Business: IndividualGroupInstructionsThe purpose of this form is to report all long-term care claim denials under in-force long-term care insurance policies. “Denied” means a claim that is not paid for any reason other than for claims not paid for failure to meet the waiting period or because of an applicable preexisting condition.State DataNationwide Data11Total Number of Long-Term Care Claims Reported2Total Number of Long-Term Care Claims Denied/Not Paid3Number of Claims Not Paid due to Preexisting Condition Exclusion4Number of Claims Not Paid due to Waiting (Elimination) Period Not Met5Net Number of Long-Term Care Claims Denied for Reporting Purposes (Line 2 Minus Line 3 Minus Line 4)6Percentage of Long-Term Care Claims Denied of Those Reported (Line 5 Divided By Line 1)7Number of Long-Term Care Claims Denied due to:8Long-Term Care Services Not Covered under the Policy2 9Provider/Facility Not Qualified under the Policy3 10Benefit Eligibility Criteria Not Met4 11Other 1The nationwide data may be viewed as a more representative and credible indicator where the data for claims reported and denied for your state are small in number.2 Example—home health care claim filed under a nursing home only policy.3Example—a facility that does not meet the minimum level of care requirements or the licensing requirements as outlined in the policy.4 Examples—a benefit trigger not met, certification by a licensed health care practitioner not provided, no plan of care.APPENDIX FInstructions:This form provides information to the applicant regarding premium rate schedules, rate schedule adjustments, potential rate revisions, and policyholder options in the event of a rate increase.Insurers shall provide all of the following information to the applicant:Long-Term Care InsurancePotential Rate Increase Disclosure Form1. [Premium Rate] [Premium Rate Schedules]: [Premium rate] [Premium rate schedules] that [is][are] applicable to you and that will be in effect until a request is made and [filed][approved] for an increase [is][are] [on the application][$_____].Drafting Note: Use “approved” in states requiring prior approval of rates.2. The [premium] [premium rate schedule] for this policy [will be shown on the schedule page of] [will be attached to] your policy.3. Rate Schedule Adjustments: The company will provide a description of when premium rate or rate schedule adjustments will be effective (e.g., next anniversary date, next billing date, etc.) (fill in the blank): __________________.4. Potential Rate Revisions: This policy is Guaranteed Renewable. This means that the rates for this product may be increased in the future. Your rates can NOT be increased due to your increasing age or declining health, but your rates may go up based on the experience of all policyholders with a policy similar to yours. If you receive a premium rate or premium rate schedule increase in the future, you will be notified of the new premium amount and you will be able to exercise at least one of the following options:Pay the increased premium and continue your policy in force as is. Reduce your policy benefits to a level such that your premiums will not increase. (Subject to state law minimum standards.) Exercise your nonforfeiture option if purchased. (This option is available for purchase for an additional premium.) Exercise your contingent nonforfeiture rights.* (This option may be available if you do not purchase a separate nonforfeiture option.) Turn the Page*Contingent NonforfeitureIf the premium rate for your policy goes up in the future and you didn’t buy a nonforfeiture option, you may be eligible for contingent nonforfeiture. Here’s how to tell if you are eligible:You will keep some long-term care insurance coverage, if:Your premium after the increase exceeds your original premium by the percentage shown (or more) in the following table; and You lapse (not pay more premiums) within 120 days of the increase. The amount of coverage (i.e., new lifetime maximum benefit amount) you will keep will equal the total amount of premiums you’ve paid since your policy was first issued. If you have already received benefits under the policy, so that the remaining maximum benefit amount is less than the total amount of premiums you’ve paid, the amount of coverage will be that remaining amount.Except for this reduced lifetime maximum benefit amount, all other policy benefits will remain at the levels attained at the time of the lapse and will not increase thereafter.Should you choose this Contingent Nonforfeiture option, your policy, with this reduced maximum benefit amount, will be considered “paid-up” with no further premiums due.Example:You bought the policy at age 65 and paid the $1,000 annual premium for 10 years, so you have paid a total of $10,000 in premiums. In the eleventh year, you receive a rate increase of 50%, or $500 for a new annual premium of $1,500, and you decide to lapse the policy (not pay any more premiums). Your “paid-up” policy benefits are $10,000 (provided you have at least $10,000 of benefits remaining under your policy). Turn the PageContingent NonforfeitureCumulative Premium Increase Over Initial PremiumThat Qualifies for Contingent Nonforfeiture(Percentage increase is cumulative from date of original issue. It does NOT represent a one-time increase.)Issue AgePercent Increase Over Initial Premium29 and under200%30-34190%35-39170%40-44150%45-49130%50-54110%55-5990%6070%6166%6262%6358%6454%6550%6648%6746%6844%6942%7040%7138%7236%7334%7432%7530%7628%7726%7824%7922%8020%8119%8218%8317%8416%8515%8614%8713%8812%8911%90 and over10%APPENDIX GLong-Term Care InsuranceReplacement and Lapse Reporting FormFor the State ofFor the Reporting Year ofCompany Name:Due: June 30 annuallyCompany Address:Company NAIC Number:Contact Person:Phone Number: (______) InstructionsThe purpose of this form is to report on a statewide basis information regarding long-term care insurance policy replacements and lapses. Specifically, every insurer shall maintain records for each producer on that producer’s amount of long-term care insurance replacement sales as a percent of the producer’s total annual sales and the amount of lapses of long-term care insurance policies sold by the producer as a percent of the producer’s total annual sales. The tables below should be used to report the ten percent (10%) of the insurer’s producers with the greatest percentages of replacements and lapses.Listing of the 10% of Producers with the Greatest Percentage of ReplacementsProducer’s NameNumber of PoliciesSold By This ProducerNumber of PoliciesReplaced By This ProducerNumber of ReplacementsAs % of Number Sold By This ProducerListing of the 10% of Producers with the Greatest Percentage of LapsesProducer’s NameNumber of PoliciesSold By This ProducerNumber of PoliciesLapsed By This ProducerNumber of LapsesAs % of Number Sold By This ProducerCompany TotalsPercentage of Replacement Policies Sold to Total Annual Sales ____%Percentage of Replacement Policies Sold to Policies In Force (as of the end of the preceding calendar year) ____%Percentage of Lapsed Policies to Total Annual Sales _____%Percentage of Lapsed Policies to Policies In Force (as of the end of the preceding calendar year) _____%APPENDIX HPartnership Program NoticeImportant Consumer Information Regarding theIowa Long-Term Care Partnership ProgramSome long-term care insurance policies or certificates sold in Iowa may qualify for the Iowa Long-Term Care Partnership Program (the Partnership Program). The Partnership Program is a partnership between state government and private insurance companies to assist individuals in planning their long-term care needs. Insurance companies voluntarily agree to participate in the Partnership Program by offering long-term care insurance coverage that meets certain state and federal requirements. Long-term care insurance policies or certificates that qualify as partnership policies or certificates may protect the policyholder’s or certificate holder’s assets through a feature known as “Asset Disregard” under Iowa’s Medicaid program.Asset Disregard means that an amount of the policyholder’s or certificate holder’s assets equal to the amount of long-term care insurance benefits received under a qualified partnership policy or certificate will be disregarded for the purpose of determining the insured’s eligibility for Medicaid. This generally allows a person to keep assets equal to the insurance benefits received under a qualified partnership policy or certificate without affecting the person’s eligibility for Medicaid.All other Medicaid eligibility criteria will apply, and special rules may apply to persons whose home equity exceeds $500,000. Asset Disregard is not available under a long-term care insurance policy or certificate that is not a partnership policy or certificate. Therefore, you should consider if Asset Disregard is important to you and whether a partnership policy or certificate meets your needs. The purchase of a partnership policy or certificate does not automatically qualify you for Medicaid. There are other eligibility requirements you must meet, including resource and income requirements.What Are the Requirements for a Partnership Policy or Certificate?In order for a policy or certificate to qualify as a partnership policy or certificate, it must, among other requirements:Be issued to an individual on or after January 1, 2010; Be issued to an individual who is an Iowa resident when coverage first becomes effective under the policy; Be a tax-qualified policy under Section 7702B(b) of the Internal Revenue Code of 1986; Meet the following inflation protection requirements:→ For a person less than 61 years of age – provides compound annual inflation protection→ For a person at least 61 but less than 76 years of age – provides 3 percent inflation protection→ For a person at least 76 years of age – inflation protection may be offered but is not required If you apply and are approved for long-term care insurance coverage, [carrier name] will provide you with written documentation as to whether or not your policy or certificate qualifies as a partnership policy or certificate.What Could Disqualify a Policy or Certificate as a Partnership Policy or Certificate?Certain types of changes to a partnership policy or certificate could affect whether or not such policy or certificate continues to be a partnership policy or certificate. If you purchase a partnership policy or certificate and later decide to make any changes, you should first consult with your insurance producer or insurance company to determine the effect of a proposed change. If you move to a state that does not have a Partnership Program or does not recognize your policy or certificate as a partnership policy or certificate, you would not receive beneficial treatment of your policy or certificate under the Medicaid program of that state. The information contained in this disclosure is based on current Iowa and federal laws. These laws may be subject to change. Any change in law could reduce or eliminate the beneficial treatment of your policy or certificate under Iowa’s Medicaid program.Additional InformationIf you have questions regarding the long-term care insurance policies or certificates, please contact [carrier name]. If you have questions regarding current laws governing Medicaid eligibility, you should contact the Iowa Department of Human Services (Sally Oudekerk, Medicaid Policy Specialist, Bureau of Medical Support, telephone number (515)281-3709, email address soudeke@dhs.state.ia.us).APPENDIX IPartnership Status Disclosure NoticeImportant Information Regarding Your Policy’s or Certificate’sLong-Term Care Partnership StatusThis disclosure notice is issued in conjunction with your long-term care policy.Some long-term care insurance policies or certificates sold in Iowa qualify for the Iowa Long-Term Care Partnership Program. Long-term care insurance policies or certificates that qualify as partnership policies or certificates may be entitled to special treatment, in particular as “Asset Disregard” under Iowa’s Medicaid program.Asset Disregard means that an amount of the policyholder’s or certificate holder’s assets equal to the amount of long-term care insurance benefits received under a qualified partnership policy or certificate will be disregarded for the purpose of determining the insured’s eligibility for Medicaid. This generally allows a person to keep assets equal to the insurance benefits received under a qualified partnership policy or certificate without affecting the person’s eligibility for Medicaid. All other Medicaid eligibility criteria will apply, and special rules may apply to persons whose home equity exceeds $500,000. Asset Disregard is not available under a long-term care insurance policy or certificate that is not a partnership policy or certificate. The purchase of a partnership policy or certificate does not automatically qualify you for Medicaid. There are other eligibility requirements you must meet, including resource and income requirements.Partnership Policy or Certificate StatusYour long-term care insurance policy or certificate is intended to qualify as a partnership policy or certificate under the Iowa Long-Term Care Partnership Program as of your policy’s or certificate’s effective date.What Could Disqualify a Policy or Certificate as a Partnership Policy or Certificate?Certain types of changes to a partnership policy or certificate could affect whether or not such policy or certificate continues to be a partnership policy or certificate. If you purchase a partnership policy or certificate and later decide to make any changes, you should first consult with your insurance producer or your insurance company to determine the effect of a proposed change. If you move to a state that does not maintain a Partnership Program or does not recognize your policy or certificate as a partnership policy or certificate, you would not receive beneficial treatment of your policy or certificate under the Medicaid program of that state. The information contained in this disclosure is based on current Iowa and federal laws. These laws may be subject to change. Any change on law could reduce or eliminate the beneficial treatment of your policy or certificate under Iowa’s Medicaid program.Additional InformationIf you have questions regarding the long-term care insurance policies or certificates, please contact [carrier name]. If you have questions regarding current laws governing Medicaid eligibility, you should contact the Iowa Department of Human Services (Allison Scott, Medicaid Program Manager, telephone number (515)418-3497, email address ascott@dhs.state.ia.us).APPENDIX JLong-Time Care Partnership Program Policy Summary
"Long-term care insurance" means an insurance policy, insurance contract, insurance certificate, or rider, which is advertised, marketed, offered, or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense-incurred, indemnity, prepaid, or other basis; for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care service provided in a setting other than an acute care unit of a hospital. This definition also encompasses group and individual annuities and life insurance policies or riders that provide directly for or supplement long-term care insurance as well as a policy or rider providing for payment of benefits based upon cognitive impairment or the loss of functional capacity.Long-term care insurance may be issued by insurers, fraternal benefit societies, nonprofit health, hospital, and medical service corporations, prepaid health plans, health maintenance organizations or any similar organizations to the extent they are otherwise authorized to issue life or health insurance.Long-term care insurance shall not include any insurance policy which is offered primarily to provide basic Medicare Supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, disability income or related asset-protection coverage, or accident-only coverage, specific disease or specified accident coverage, or limited benefit health coverage. The definition does not include life insurance policies which accelerate the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention, or permanent institutional confinement, and which provide the option of a lump-sum payment for those benefits and in which neither the benefits nor eligibility for those benefits is conditional upon the receipt of long-term care. Notwithstanding any other provision contained herein, any product advertised, marketed, or offered as long-term care insurance shall be subject to the provisions of 191—Chapter 39.
"Long-term care coverage arrangement" is a promise that long-term care will be delivered to a person upon need and the meeting of certain contractual requirements. The arrangement is offered to the general public or a sector of the general public at a cost determined by the use of sound actuarial principles based upon the probability of use. This definition does not include self-insurance.
"Qualified long-term care insurance contract" "federally tax-qualified long-term care insurance contract" means an individual or group insurance contract that meets the requirements of Section 7702B(b) of the Internal Revenue Code of 1986, as follows:
19139.5(514G) Policy definitions. No long-term care insurance policy delivered or issued for delivery in this state shall use the terms set forth below, unless the terms are defined in the policy and the definitions satisfy the following requirements: 39.5(1) “Medicare” shall be defined as “The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as Then Constituted or Later Amended,” or “Title I, Part I of Public Law 89-97, as Enacted by the Eighty-ninth Congress of the United States of America and popularly known as the Health Insurance for the Aged Act, as then constituted and any later amendments or substitutes thereof,” or words of similar import. 39.5(2) “Mental or nervous disorder” shall not be defined to include more than neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder. 39.5(3) Nursing care. a. “Skilled nursing care” shall not be defined more restrictively than one or more professional services performed for the benefit of the insured on a daily basis, by or under the supervision of a registered nurse, prescribed by a physician, appropriate and consistent with the diagnosis and conditions requiring care. b. “Intermediate nursing care” shall not be defined more restrictively than care which meets all of the above when professional nursing services are delivered on a regular basis but less often than daily. c. “Custodial nursing care” shall not be defined more restrictively than that level of care required to assist an individual in activities of daily living when, due to age complicated by sickness or injury, such care is required. This level of care can be performed by persons without professional skills or training. 39.5(4) “Nursing facility” shall be defined in relation to its status, facilities, and available services. a. A definition of such home or facility shall not be more restrictive than one requiring that it: (1) Be operated pursuant to law; be appropriately licensed or certified; (2) Be primarily engaged in providing, in addition to room and board accommodations, skilled or intermediate nursing care under the supervision of a duly licensed physician; (3) Provide nursing service by or under the supervision of a registered nurse (R.N.); and (4) Maintain a daily medical record of each patient. b. The definition of such home or facility may provide that the term shall not include: (1) Any home, facility or part thereof used primarily for rest; (2) A home or facility for the aged or for the care of drug addicts or alcoholics; or (3) A home or facility primarily used for the care and treatment of mental diseases, or disorders, or custodial or educational care. 39.5(5) “Acute condition” means that the individual is medically unstable. Such an individual requires frequent monitoring by medical professionals, such as physicians and registered nurses, in order to maintain the individual’s health status. 39.5(6) “Home health care services” means medical and nonmedical services, provided to ill, disabled or infirm persons in their residences. Such services may include homemaker services, assistance with activities of daily living and respite care services. 39.5(7) “Activities of daily living” means at least bathing, continence, dressing, eating, toileting and transferring. 39.5(8) “Adult day care” means a program for six or more individuals of social and health-related services provided during the day in a community group setting for the purpose of supporting frail, impaired elderly or other disabled adults who can benefit from care in a group setting outside the home. 39.5(9) “Bathing” means washing oneself by sponge bath or in either a tub or shower, including the task of getting into or out of the tub or shower. 39.5(10) “Cognitive impairment” means a deficiency in a person’s short- or long-term memory, orientation as to person, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness. 39.5(11) “Continence” means the ability to maintain control of bowel and bladder function or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene (including caring for catheter or colostomy bag). 39.5(12) “Dressing” means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs. 39.5(13) “Eating” means feeding oneself by getting food into the body from a receptacle (such as a plate, cup or table) or by a feeding tube or intravenously. 39.5(14) “Exceptional increase” means only those increases filed by an insurer as exceptional for which the commissioner determines that the need for the premium rate increase is justified due to changes in laws or regulations applicable to long-term care coverage in this state or due to increased and unexpected utilization that affects the majority of insurers of similar products. Except as provided in rule 191—39.28(514G), exceptional increases are subject to the same requirements as other premium rate schedule increases.The commissioner may request a review by an independent actuary or a professional actuarial body of the basis for a request that an increase be considered an exceptional increase. The commissioner, in determining that the necessary basis for an exceptional increase exists, shall also determine any potential offsets to higher claims costs. 39.5(15) “Hands-on assistance” means physical assistance (minimal, moderate or maximal) without which the individual would not be able to perform the activities of daily living. 39.5(16) “Incidental,” as used in subrule 39.28(10), means that the value of the long-term care benefits provided is less than 10 percent of the total value of the benefits provided over the life of the policy. These values shall be measured as of the date of issue. 39.5(17) “Personal care” means the provision of hands-on services to assist an individual with activities of daily living. 39.5(18) “Qualified actuary” means a member in good standing of the American Academy of Actuaries. 39.5(19) “Similar policy forms” means all of the long-term care insurance policies and certificates issued by an insurer in the same long-term care benefit classification as the policy form being considered. Certificates of groups that meet the definition of group long-term care insurance in Iowa Code section 514G.103 are not considered similar to certificates or policies otherwise issued as long-term care insurance, but are similar to other comparable certificates with the same long-term care benefit classifications. For purposes of determining similar policy forms, long-term care benefit classifications are defined as follows: institutional long-term care benefits only, noninstitutional long-term care benefits only, or comprehensive long-term care benefits. 39.5(20) “Toileting” means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene. 39.5(21) “Transferring” means moving into or out of a bed, chair or wheelchair.Related ARC(s): 5598C19139.6(514G) Policy practices and provisions. 39.6(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 this chapter. No such policy issued to an individual shall contain renewal provisions other than “guaranteed renewable” or “noncancellable.” a. 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. Rates may be revised by the insurer on a class basis. b. 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. c. Notwithstanding the provisions in 191—subrule 36.5(4), long-term care insurance policies may contain a return of premium or cash value benefit so long as: (1) The return of premium or cash value benefit is not reduced by an amount greater than the aggregate of any claims paid under the policy; and (2) The insurer demonstrates in its filings that the reserve basis for the policies is adequate.Any advertisement or sales presentation of a long-term care insurance policy with a return of premium or cash value benefit provision shall include a side-by-side comparison of premiums for the same policy with and without the return of premium or cash value benefit provision. 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 subrule, 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. 39.6(2) Limitations and exclusions. a. No policy may be delivered or issued for delivery in this state as long-term care insurance if such policy limits or excludes coverage by type of illness, treatment, medical condition or accident, except as follows: (1) Preexisting conditions or disease; (2) Mental or nervous disorders (however, this shall not permit exclusion or limitation of benefits on the basis of Alzheimer’s disease or similar forms of irreversible dementia nor limit coverage for Alzheimer’s disease to the skilled or intermediate level of care); (3) Alcoholism and drug addiction; (4) Illness, treatment or medical condition arising out of:- The only insurance protection provided under the contract is coverage of qualified long-term care services. A contract shall not fail to satisfy the requirements of this paragraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate;
- The contract does not pay or reimburse expenses incurred 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. The requirements of this paragraph do not apply to expenses that are reimbursable under Title XVIII of the Social Security Act only as a secondary payor. A contract shall not fail to satisfy the requirements of this paragraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate;
- The contract is guaranteed renewable, within the meaning of Section 7702B(b)(1)(C) of the Internal Revenue Code of 1986;
- The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed;
- All refunds of premiums, and all policyholder dividends or similar amounts, under the contract are to be applied as a reduction in future premiums or to increase future benefits, except that a refund on the event of death of the insured or a complete surrender or cancellation of the contract cannot exceed the aggregate premiums paid under the contract; and
- The contract meets the consumer protection provisions set forth in Section 7702B(g) of the Internal Revenue Code of 1986.
- War or act of war (whether declared or undeclared);
- Participation in a felony, riot or insurrection;
- Service in the armed forces or units auxiliary thereto;
- Attempted suicide (sane or insane) or intentional self-inflicted injury;
- Aviation (this exclusion applies only to non-fare-paying passengers).
- Health conditions which you may presently have (preexisting conditions) may not be immediately or fully covered under the new policy. This could result in denial or delay in payment of benefits under the new policy, whereas a similar claim might have been payable under your present policy.
- State law provides that your replacement policy or certificate may not contain new preexisting conditions or probationary periods. The insurer will waive any time periods applicable to preexisting conditions or probationary periods in the new policy (or coverage) for similar benefits to the extent such time was spent (depleted) under the original policy.
- If you are replacing existing long-term care insurance coverage, you may wish to secure the advice of your present insurer or its producer regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interest to make sure you understand all the relevant factors involved in replacing your present coverage.
- If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical health history. Failure to include all material medical information on an application may provide a basis for the company to deny any future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, reread it carefully to be certain that all information has been properly recorded.
- Health conditions which you may presently have (preexisting conditions) may not be immediately or fully covered under the new policy. This could result in denial or delay in payment of benefits under the new policy, whereas a similar claim might have been payable under your present policy.
- State law provides that your replacement policy or certificate may not contain new preexisting conditions or probationary periods. Your insurer will waive any time periods applicable to preexisting conditions or probationary periods in the new policy (or coverage) for similar benefits to the extent such time was spent (depleted) under the original policy.
- If you are replacing existing long-term care insurance coverage, you may wish to secure the advice of your present insurer or its producer regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interest to make sure you understand all the relevant factors involved in replacing your present coverage.
- [To be included only if the application is attached to the policy.] If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, read the copy of the application attached to your new policy and be sure that all questions are answered fully and correctly. Omissions or misstatements in the application could cause an otherwise valid claim to be denied. Carefully check the application and write to [company name and address] within 30 days if any information is not correct and complete, or if any past medical history has been left out of the application.
- The policy and certificate;
- A corresponding outline of coverage; and
- All advertisements requested by the insurance division.
- At the time of the association’s decision to endorse, engage the services of a person with expertise in long-term care insurance who is not affiliated with the insurer to conduct an examination of the policies, including its benefits, features, and rates and update the examination thereafter in the event of material change;
- Actively monitor the marketing efforts of the insurer and its producers; and
- Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies or certificates.
- State and federal regulations and requirements and the relationship between qualified state long-term care insurance partnership programs and other public and private coverage of long-term care services, including Medicaid requirements;
- Available long-term care services and providers;
- Changes or improvements in long-term care services or providers;
- Alternatives to the purchase of private long-term care insurance or long-term care partnership insurance;
- The effect of inflation on benefits and the importance of inflation protection;
- Consumer suitability standards and guidelines;
- The Deficit Reduction Act;
- Iowa’s laws regarding the long-term care partnership program;
- The Iowa Medicaid program;
- Miller trusts;
- Spousal protection;
- Transfer of assets;
- Estate recovery; and
- Eligibility.
- This policy is [an individual policy of insurance] [[a group policy] which was issued in the [indicate jurisdiction in which group policy was issued]].
- PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides a very brief description of the important features of the policy. You should compare this outline of coverage to outlines of coverage for other policies available to you. This is not an insurance contract, but only a summary of coverage. Only the individual or group policy contains governing contractual provisions. This means that the policy or group policy sets forth in detail the rights and obligations of both you and the insurance company. Therefore, if you purchase this coverage, or any other coverage, it is important that you READ YOUR POLICY (OR CERTIFICATE) CAREFULLY!
- FEDERAL TAX CONSEQUENCES.
- TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE CONTINUED IN FORCE OR DISCONTINUED.
- [Policies and certificates that are guaranteed renewable shall contain the following statement:] RENEWABILITY: THIS [POLICY] [CERTIFICATE] IS GUARANTEED RENEWABLE. This means you have the right, subject to the terms of your [policy] [certificate], to continue this policy as long as you pay your premiums on time. [Company Name] cannot change any of the terms of your policy on its own, except that, in the future, IT MAY INCREASE THE PREMIUM YOU PAY.
- [Policies and certificates that are noncancellable shall contain the following statement:] RENEWABILITY: THIS [POLICY] [CERTIFICATE] IS NONCANCELLABLE. This means that you have the right, subject to the terms of your policy, to continue this policy as long as you pay your premiums on time. [Company Name] cannot change any of the terms of your policy on its own and cannot change the premium you currently pay. However, if your policy contains an inflation protection feature where you choose to increase your benefits, [Company Name] may increase your premium at that time for those additional benefits.
- TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS.
- TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE RETURNED AND PREMIUM REFUNDED.
- THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are eligible for Medicare, review the Medicare Supplement Buyer’s Guide available from the insurance company.
- LONG-TERM CARE COVERAGE. Policies of this category are designed to provide coverage for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital, such as in a nursing home, in the community or in the home.
- BENEFITS PROVIDED BY THIS POLICY.
- LIMITATIONS AND EXCLUSIONS.
- RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs of long-term care services will likely increase over time, you should consider whether and how the benefits of this plan may be adjusted. [As applicable, indicate the following:
- ALZHEIMER’S DISEASE AND OTHER ORGANIC BRAIN DISORDERS.
- PREMIUM.
- ADDITIONAL FEATURES.
- CONTACT THE STATE SENIOR HEALTH INSURANCE INFORMATION PROGRAM (800-351-4664) IF YOU HAVE GENERAL QUESTIONS REGARDING LONG-TERM CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF YOU HAVE SPECIFIC QUESTIONS REGARDING YOUR LONG-TERM CARE INSURANCE POLICY OR CERTIFICATE.
- Any long-term care benefits paid out during the month;
- An explanation of any changes in the policy, e.g., death benefits or cash values, due to long-term care benefits being paid out; and
- The amount of long-term care benefits existing or remaining.
- The policy forms for which premium rates have been increased;
- The calendar years when the form was available for purchase; and
- The amount or percent of each increase. The percentage may be expressed as a percentage of the premium rate prior to the increase, and may also be expressed as minimum and maximum percentages if the rate increase is variable by rating characteristics.
- Sufficient detail or sample calculations provided so as to have a complete depiction of the reserve amounts to be held;
- A statement that the assumptions used for reserves contain reasonable margins for adverse experience;
- A statement that the net valuation premium for renewal years does not increase (except for attained-age rating where permitted); and
- A statement that the difference between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses; or if such a statement cannot be made, a complete description of the situations where this does not occur;
- Annual values for the five years preceding and the three years following the valuation date shall be provided separately;
- The projections shall include the development of the lifetime loss ratio, unless the rate increase is an exceptional increase;
- The projections shall demonstrate compliance with subrule 39.28(3); and
- For exceptional increases,
- Be subject to the approval of the commissioner;
- Be based on actuarially sound principles, but not be based on attained age; and
- Provide that maximum benefits under any new policy accepted by an insured shall be reduced by comparable benefits already paid under the existing policy.
- The maximum rate increase determined based on the combined experience; and
- The maximum rate increase determined based only on the experience of the insureds originally issued the form plus 10 percent.
- The end of the tenth year following the policy or certificate issue date; or
- The end of the second year following the date the policy or certificate is no longer subject to attained age rating.
"Chronically ill individual" has the meaning prescribed for this term by Section 7702B(c)(2) of the Internal Revenue Code of 1986. Under this provision, a chronically ill individual means any individual who has been certified by a licensed health care practitioner as:
- Being unable to perform (without substantial assistance from another individual) at least two activities of daily living for a period of at least 90 days due to a loss of functional capacity; or
- Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment.
"Licensed health care practitioner" means a physician, as defined in Section 1861(r)(1) of the Social Security Act, a registered professional nurse, licensed social worker or other individual who meets requirements prescribed by the Secretary of the Treasury.
"Maintenance or personal care services" means any care the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of which the individual is a chronically ill individual (including the protection from threats to health and safety due to severe cognitive impairment).
"Qualified long-term care services" means services that meet the requirements of Section 7702(c)(1) of the Internal Revenue Code of 1986, as follows: necessary diagnostic, preventive, therapeutic, curative, treatment, mitigation and rehabilitative services, and maintenance or personal care services which are required by a chronically ill individual, and are provided pursuant to a plan of care prescribed by a licensed health care practitioner.
39.31(2) A qualified long-term care insurance contract shall pay only for qualified long-term care services received by a chronically ill individual provided pursuant to a plan of care prescribed by a licensed health care practitioner. 39.31(3) A qualified long-term care insurance contract shall condition the payment of benefits on a determination of the insured’s inability to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity or to severe cognitive impairment. 39.31(4) Certifications regarding activities of daily living and cognitive impairment required pursuant to subrule 39.31(3) shall be performed by the following licensed or certified professionals: physicians, registered professional nurses, licensed social workers, or other individuals who meet requirements prescribed by the Secretary of the Treasury. 39.31(5) Certifications required pursuant to subrule 39.31(3) may be performed by a licensed health care professional at the direction of the carrier as is reasonably necessary with respect to a specific claim, except that when a licensed health care practitioner has certified that an insured is unable to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity and the insured is in claim status, the certification may not be rescinded and additional certifications may not be performed until after the expiration of the 90-day period. 39.31(6) Qualified long-term care insurance contracts shall include a clear description of the process for appealing and resolving disputes with respect to benefit determinations.19139.32(514G) Penalties. Violations of this chapter shall be subject to the penalties imposed under Iowa Code chapter 507B.19139.33(514G) Notice of cancellation, nonrenewal or termination of long-term care insurance. 39.33(1) Purpose and definitions. a. Purpose. The purpose of this rule is to clarify the authorized methods of delivery for notices of cancellation, nonrenewal or termination by an insurer, so as to implement the various policyholder protections intended by Iowa Code section 514G.111 and rule 191—39.22(514G). b. Definitions. As used in Iowa Code section 505B.1 and this rule:"Commissioner" means the Iowa insurance commissioner or insurance division.
"Notice of cancellation, nonrenewal or termination" means:
39.33(2) Scope. This rule shall apply to all insurance companies holding a certificate of authority to transact the business of insurance under the provisions of Iowa Code chapter 508 or 515. 39.33(3) Delivery. For any notice of cancellation, nonrenewal or termination by an insurer under Iowa Code section 514G.111 and rule 191—39.22(514G) to be effective, an insurer must, within the time frame established by law, deliver the notice to the person to whom notice is required to be provided either in person or by mail through the U.S. Postal Service to the last-known address of the person to whom notice is required to be provided. The use of U.S. Postal Service Intelligent Mail® fulfills any requirement in Iowa Code section 514G.111 and rule 191—39.22(514G) for certified mail or certificate of mailing as proof of mailing. 39.33(4) Electronic transmissions. Notwithstanding the requirements of subrule 39.33(3), if an insurer receives, pursuant to 191—subrule 4.24(2), approval from the commissioner of a manner of electronic delivery of a notice of cancellation, nonrenewal or termination of a policy, the approved manner shall satisfy the notice requirements of Iowa Code section 514G.111 and rule 191—39.22(514G).This rule is intended to implement Iowa Code chapter 505B.Related ARC(s): 1999C, 2415C19139.34 Reserved.19139.35 Reserved.19139.36 Reserved.19139.37 Reserved.19139.38 Reserved.19139.39 Reserved.19139.40 Reserved.DIVISION IIINDEPENDENT REVIEW OF BENEFIT TRIGGER DETERMINATIONS19139.41(514G) Purpose. This division is intended to implement Iowa Code chapter 514G to provide a uniform process for insureds covered under long-term care insurance to request an independent review of a denial of coverage based on a benefit trigger determination.Related ARC(s): 5598C19139.42(514G) Effective date. The rules contained in this division shall apply to all requests for benefit trigger determinations made on or after January 1, 2009.19139.43(514G) Definitions. For purposes of this division, the definitions found in Iowa Code section 514G.103 shall apply.Related ARC(s): 5598C19139.44(514G) Notice of benefit trigger determination and content. The notice required by Iowa Code section 514G.109 shall contain the following information:- Notice of an insurance company’s termination of an insurance policy at the end of a term or before the termination date;
- Notice of an insurance company’s decision or intention not to renew a policy; and
- For purposes of notices required by Iowa Code section 514G.111 and rule 191—39.22(514G), at a minimum, an insurance company’s notice of lapse or termination of a long-term care insurance policy.
- The reason that the insurer determined that the policy benefit trigger has not been met by the insured.
- A description of the internal appeal mechanism provided under the long-term care policy.
- A description of how the insured, after exhausting the insurer’s internal appeal process, has the right to have the benefit trigger determination reviewed under the independent review process required by Iowa Code section 514G.110.
"Asset disregard" means, with regard to the state’s Medicaid program, disregarding assets in an amount equal to the insurance benefit payments that are made to or on behalf of an individual who is a beneficiary under a qualified long-term care partnership policy.
"Division" means the Iowa insurance division.
"Iowa long-term care partnership policy" "partnership policy" means an insurance policy that meets the following requirements:
- The policy covers an insured who, when coverage first became effective under the policy, was a resident of Iowa or was an individual eligible under subrule 39.78(2).
- The policy is a qualified long-term care insurance policy as defined in Section 7702B(b) of the Internal Revenue Code of 1986 and was issued no earlier than January 1, 2010.
- The policy meets all of the applicable requirements of this chapter and Iowa Code chapter 514H.
- The division has certified the policy as meeting the requirements of the following: Section 1917(b) of the Social Security Act, 42 U.S.C. 1396p; Section 6021 of the federal Deficit Reduction Act of 2005, Public Law 109-171; and any applicable federal regulations or guidelines.
- The policy provides the following inflation protections:
- For a person who is less than 61 years of age as of the date of purchase of the policy or date of issuance of the certificate, the policy provides either annual compounded inflation protection of not less than 3 percent or annual compounded inflation protection of not less than a rate based on changes in the consumer price index. “Consumer price index” means consumer price index for all urban consumers, U.S. city average, all items, as determined by the Bureau of Labor Statistics of the United States Department of Labor.
- For a person who is at least 61 years of age but less than 76 years of age as of the date of purchase of the policy or date of issuance of the certificate, the policy provides either an inflation feature that meets the requirements of this definition, paragraph “5,” first bulleted paragraph, or an automatic inflation feature that provides annual simple inflation increases at a rate of not less than 3 percent.
- For a person who is at least 76 years of age as of the date of purchase of the policy or date of issuance of the certificate, an inflation protection feature may be included in the policy but is not required.
"Long-term care partnership program" means a qualified state long-term care insurance partnership as defined in Section 1917(b) of the Social Security Act, 42 U.S.C. 1396p; Section 6021 of the federal Deficit Reduction Act of 2005, Public Law 109-171; and Iowa Code chapter 514H as amended by 2009 Iowa Acts, House File 723.
"Medicaid" means the program of medical assistance operated by the Iowa department of human services under Title XIX of the federal Social Security Act, 42 U.S.C. 1396 et seq., and amendments thereto.
Related ARC(s): 8271B, 5598C19139.78(514H) Eligibility. 39.78(1) An individual who is a beneficiary of an Iowa long-term care partnership policy or certificate may be eligible for assistance under the state’s Medicaid program using the asset disregard as provided under Iowa Code chapter 514H as amended by 2009 Iowa Acts, House File 723. 39.78(2) An individual who is a beneficiary of a long-term care partnership policy or certificate issued in another state which grants reciprocity to an Iowan who moves to that state is eligible for benefits under Iowa’s Medicaid program using the asset disregard as provided in Iowa Code chapter 514H as amended by 2009 Iowa Acts, House File 723. For purposes of this subrule, “reciprocity” means the granting of all the benefits by one state to an individual who becomes a resident of that state but who purchased a long-term care partnership policy while residing in another state.Related ARC(s): 8271B, 5598C19139.79(514H) Discontinuance of partnership program. If the Iowa long-term care partnership program established by this division and Iowa Code chapter 514H as amended by 2009 Iowa Acts, House File 723, is discontinued, any individual who purchased an Iowa long-term care partnership policy or certificate before the date the program was discontinued shall be eligible to receive asset disregard if allowed as provided by Title VI, Section 6021 of the federal Deficit Reduction Act of 2005, Public Law 109-171.Related ARC(s): 8271B, 5598C19139.80(514H) Required disclosures. 39.80(1) An insurer or a producer soliciting or offering to sell a partnership policy shall provide to each prospective applicant a Partnership Program Notice. The notice must be substantially similar to Appendix H of this chapter. The Partnership Program Notice shall be provided with the required outline of coverage. 39.80(2) An insurer or a producer soliciting or offering to sell a partnership policy shall provide to each prospective applicant a copy of the Iowa Long-Term Care Partnership Program Consumer Guide. The Iowa Long-Term Care Partnership Program Consumer Guide may be found at shiip.iowa.gov. 39.80(3) A partnership policy or certificate issued or issued for delivery in Iowa shall be accompanied by a Partnership Status Disclosure Notice (Appendix I). A similar notice may be used if filed with and approved by the division.Related ARC(s): 8271B, 5598C19139.81(514H) Form filings. 39.81(1) A partnership policy shall not be issued or issued for delivery in Iowa unless filed with and approved by the division. Any policy submitted for certification as a partnership policy shall be accompanied by a Partnership Issuer Certification. The Partnership Issuer Certification form may be found on the division’s website, www.iid.state.ia.us. Insurance companies required to file rates or forms with the division shall submit required rate and form filings and any fees required for the filings electronically using the System for Electronic Rate and Form Filing (SERFF). Insurance companies must comply with the division’s requirements, including both the Iowa general instructions and the specific submission requirements for the type of insurance for which the companies are submitting forms or rates, as set forth on the SERFF website at www.serff.org. 39.81(2) Insurers may request to make use of a previously approved policy form as a qualified state long-term care partnership policy. Requests shall be filed electronically via SERFF and according to instructions on the SERFF website.Related ARC(s): 8271B, 5598C19139.82(514H) Exchanges. 39.82(1) An insurer must offer, on a one-time basis, in writing, to all existing policyholders that were issued long-term care policies between February 1, 2003, and January 1, 2010, the option to exchange their existing long-term care policies for an Iowa long-term care partnership policy. The insurer must make this offer within 18 months of the date the insurer begins the first marketing efforts for any long-term care partnership insurance product. 39.82(2) Under an exchange program, an insurer must comply with all of the following: a. The mandatory offer of an exchange shall apply only to products issued by the insurer that are comparable to the type of policy, such as group policies and individual policies, and to the policy series that the company has certified as partnership-qualified. b. An insurer must provide the insured a minimum of 90 days from the date of mailing of the offer by the insurer to accept or reject the offer. c. An insurer must make the offer on a nondiscriminatory basis without regard to the age or health status of the insured. However, the insurer may underwrite if the policy is amended to provide additional benefits or if the exchange would require the issuance of a new policy, except as described in paragraph 39.82(2)“d” below. Any portion of the policy that was issued prior to the exchange date shall be priced based on the policyholder’s age when the policy was originally issued. Any portion of the policy that is added as a result of the exchange may be priced based on the policyholder’s age at the time of the exchange. d. If there is no change in coverage that is material to the risk, policies exchanged under this rule shall not be subject to any medical underwriting. e. Coverage under the new policy shall not result in any exclusion for preexisting conditions that would have been covered under the policy or certificate being replaced. f. Any portion of the policy that was issued prior to the exchange date shall maintain the policy’s original price based on the policyholder’s age when the policy was originally issued. Any portion of the policy that is added as a result of the exchange may be priced based on the policyholder’s age at the time of the exchange. g. When the policy is issued to a group, the offer required in subrule 39.82(1) shall be made to the group policyholder. h. Notwithstanding paragraphs 39.82(2)“a” and “c,” an insurer is not required to offer an exchange to an individual who is eligible for benefits within an elimination period, who is or who has been in claim status, or who would not be eligible to apply for coverage due to issue age or plan design limitations under the new policy. The insurer may require that policyholders meet all eligibility requirements, including plan design, underwriting, if applicable, and payment of the required premium. 39.82(3) Policies issued pursuant to this rule shall be considered exchanges and not replacements and are not subject to rule 191—39.11(514D,514G). 39.82(4) A policy received in an exchange after January 1, 2010, is treated as newly issued and is eligible for long-term care partnership policy status. For purposes of applying the Medicaid rules relating to Iowa’s long-term care partnership program, the addition of a rider, endorsement or change in schedule page for a policy may be treated as giving rise to an exchange. 39.82(5) An insurer or a producer offering an exchange shall provide to each prospective applicant a Partnership Program Notice, as required by subrule 39.80(1), and a copy of the Iowa Long-Term Care Partnership Program Consumer Guide, as required by subrule 39.80(2). An insurer issuing or issuing for delivery in Iowa an exchange shall provide the policyholder or certificate holder a Partnership Status Disclosure Notice, as required by subrule 39.80(3).Related ARC(s): 8271B, 5598C19139.83(514H) Required policy terms and disclosures. 39.83(1) A policy or certificate designed or marketed as a long-term care insurance policy or certificate must prominently disclose on the schedule page the following statements:“Some long-term care insurance [policies or certificates] may qualify under the state’s Long-Term Care Partnership Program. Under this Program the [policyholder or certificate holder] may be able to protect some of the [policyholder’s or certificate holder’s] assets from Medicaid spend-down requirements through a feature known as ‘Asset Disregard.’ Nothing in this [policy or certificate] is a guarantee of Medicaid eligibility nor is it a guarantee of any ability to disregard assets for purposes of Medicaid eligibility. If you have questions about whether or not your policy currently qualifies under the Long-Term Care Partnership Program, please contact [the insurer at ###-###-####] and request a long-term care partnership program policy summary.” 39.83(2) If a policyholder or certificate holder or that person’s representative requests a long-term care partnership program policy summary, as provided in subrule 39.83(1), the information the insurer shall provide and the format of the long-term care partnership program policy summary shall be as set forth in Appendix J. An insurer may submit a form substantially similar to Appendix J to the commissioner for approval to use as a substitute for Appendix J.Related ARC(s): 8271B, 5598C19139.84(514H) Standards for marketing and suitability. The standards for marketing found in rule 191—39.15(514D,514G) and the suitability requirements of rule 191—39.16(514D,514G) shall apply to the marketing and sale of long-term care partnership policies.Related ARC(s): 8271B, 5598C19139.85(514H) Required reports. 39.85(1) Each issuer of partnership-qualified long-term care insurance in this state shall provide regular reports to the Secretary of the United States Department of Health and Human Services in accordance with federal law and regulations and to the Iowa department of human services and the division as provided in Section 6021 of the federal Deficit Reduction Act of 2005, Public Law 109-171. The report shall include information as required by the United States Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation. Submission of the report to the Iowa department of human services or the division is not required if the issuer files the report through the Centers for Medicare and Medicaid Services filing system. 39.85(2) When a policyholder or certificate holder begins receiving any benefits under a policy, the issuer shall begin providing to the policyholder or certificate holder statements of benefits either monthly or within a reasonable time after benefits have been paid. The statements of benefits shall include, at a minimum, detailed information regarding benefits paid and dates of service.Related ARC(s): 8271B, 5598CThese rules are intended to implement Iowa Code section 514D.9 and chapters 514G and 514H.APPENDIX ARESCISSION REPORTING FORM FORLONG-TERM CARE POLICIESFOR THE STATE OF IOWAFOR THE REPORTING YEAR 20[ ]Company Name:Address:Phone Number:Due: March 1 annuallyInstructions:The purpose of this form is to report all rescissions of long-term care insurance policies or certificates. Those rescissions voluntarily effectuated by an insured are not required to be included in this report. Please furnish one form per rescission.PolicyForm #Policy andCertificate #Name ofInsuredDate ofPolicyIssuanceDate/sClaim/sSubmittedDate ofRescissionDetailed reason for rescission: SignatureName and Title (please type)DateAPPENDIX BLong-Term Care InsurancePersonal WorksheetPeople buy long-term care insurance for many reasons. Some don’t want to use their own assets to pay for long-term care. Some buy insurance to make sure they can choose the type of care they get. Others don’t want their family to have to pay for care or don’t want to go on Medicaid. But long-term care insurance may be expensive, and may not be right for everyone.By state law, the insurance company must fill out part of the information on this worksheet and ask you to fill out the rest to help you and the company decide if you should buy this policy.Premium InformationPolicy Form Numbers _____________________The premium for the coverage you are considering will be [$___________ per month, or $_________ per year] [a one-time single premium of $____________].Type of Policy (noncancellable/guaranteed renewable):The Company’s Right to Increase Premiums:[The company cannot raise your rates on this policy.] [The company has a right to increase premiums on this policy form in the future, provided it raises rates for all policies in the same class in this state.] [Insurers shall use appropriate bracketed statement. Rate guarantees shall not be shown on this form.]Rate Increase HistoryThe company has sold long-term care insurance since [year] and has sold this policy since [year]. [The company has never raised its rates for any long-term care policy it has sold in this state or any other state.] [The company has not raised its rates for this policy form or similar policy forms in this state or any other state in the last 10 years.] [The company has raised its premium rates on this policy form or similar policy forms in the last 10 years. Following is a summary of the rate increases.]Drafting Note: A company may use the first bracketed sentence above only if it has never increased rates under any prior policy forms in this state or any other state. The issuer shall list each premium increase it has instituted on this or similar policy forms in this state or any other state during the last 10 years. The list shall provide the policy form, the calendar years the form was available for sale, and the calendar year and the amount (percentage) of each increase. The insurer shall provide minimum and maximum percentages if the rate increase is variable by rating characteristics. The insurer may provide, in a fair manner, additional explanatory information as appropriate.Questions Related to Your IncomeHow will you pay each year’s premium?□ From my Income □ From my Savings/Investments □ My Family will Pay[□ Have you considered whether you could afford to keep this policy if the premiums went up, for example, by 20%?]Drafting Note: The issuer is not required to use the bracketed sentence if the policy is fully paid up or is a noncancellable policy.What is your annual income? (check one) □ Under $10,000 □ $[10-20,000] □ $[20-30,000]□ $[30-50,000] □ Over $50,000Drafting Note: The issuer may choose the numbers to put in the brackets to fit its suitability standards.How do you expect your income to change over the next 10 years? (check one)□ No change □ Increase □ DecreaseIf you will be paying premiums with money received only from your own income, a rule of thumb is that you may not be able to afford this policy if the premiums will be more than 7% of your income.Will you buy inflation protection? (check one) □ Yes □ NoIf not, have you considered how you will pay for the difference between future costs and your daily benefit amount?□ From my Income □ From my Savings/Investments □ My Family will PayThe national average annual cost of care in [insert year] was [insert $ amount], but this figure varies across the country. In ten years the national average annual cost would be about [insert $ amount] if costs increase 5% annually.Drafting Note: The projected cost can be based on federal estimates in a current year. In the above statement, the second figure equals 163% of the first figure.What elimination period are you considering? Number of days ____________ Approximate cost $____________for that period of care.How are you planning to pay for your care during the elimination period? (check one)□ From my Income □ From my Savings/Investments □ My Family will PayQuestions Related to Your Savings and InvestmentsNot counting your home, about how much are all of your assets (your savings and investments) worth? (check one)□ Under $20,000 □ $20,000-$30,000 □ $30,000-$50,000 □ Over $50,000How do you expect your assets to change over the next ten years? (check one)□ Stay about the same □ Increase □ DecreaseIf you are buying this policy to protect your assets and your assets are less than $30,000, you may wish to consider other options for financing your long-term care.Disclosure Statement□The answers to the questions above describe my financial situation.Or□I choose not to complete this information.(Check one.)□I acknowledge that the carrier and/or its producer (below) has reviewed this form with me including the premium, premium rate increase history and potential for premium increases in the future. [For direct mail situations, use the following: I acknowledge that I have reviewed this form including the premium, premium rate increase history and potential for premium increases in the future.] I understand the above disclosures. I understand that the rates for this policy may increase in the future. (This box must be checked.)Signed: (Applicant)(Date)[□ I explained to the applicant the importance of completing this information.]Signed: (Producer)(Date)Producer’s Printed Name: ][In order for us to process your application, please return this signed statement to [name of company], along with your application.][My producer has advised me that this policy does not seem to be suitable for me. However, I still want the company to consider my application.Signed: (Applicant)(Date)Drafting Note: Choose the appropriate sentences depending on whether this is a direct mail or producer sale.The company may contact you to verify your answers.Drafting Note: When the Long-Term Care Insurance Personal Worksheet is furnished to employees and their spouses under employer group policies, the text from the heading “Disclosure Statement” to the end of the page may be removed.APPENDIX CThings You Should Know Before You BuyLong-Term Care InsuranceLong-TermCareInsurance- Name of insured __________________________________
- Policy/certificate number ___________________________
- Effective date of coverage __________________________
- The policy/certificate was issued in the state of ___________
- Issue age of the insured at the time the coverage was issued _______________
- The policy/certificate was issued □ With inflation protection coverage□ Without inflation protection coverage
- The inflation protection coverage is □ Simple Inflation □ Compound Inflation □ None
- The inflation protection coverage is currently in effect on the coverage □ Yes □ NoIf no, the date inflation protection coverage ceased ____________________
- The policy is intended to meet the standards of a tax-qualified long-term care policy□ Yes □ No
- The cumulative dollar amount of insurance benefits paid $__________(NOTE:The indicated amount does not include any payments for cash surrender, return ofpremium death benefits, or waiver of premium, and if joint coverage, the amount is for theindicated insured only.)
- The total dollar amount of insurance benefits remaining available under the policy $_______
- This information is correct as of the date this form was completed, which datewas ________________
- The name, telephone number and email address of the person completing this form