3 CCR 702-4
DEPARTMENT OF REGULATORY AGENCIES LIFE, ACCIDENT AND HEALTH, Series 4-4 3 CCR 702-4 Series 4-4 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ Regulation 4-4-1 CONCERNING REQUIREMENTS FOR LONG-TERM CARE INSURANCE Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Policy Definitions Section 6 Policy Practices and Provisions Section 7 Unintentional Lapse Section 8 Required Disclosure Provisions Section 9 Required Disclosure of Rating Practices to Consumers Section 10 Initial Filing Requirements Section 11 Prohibition Against Post-Claims Underwriting Section 12 Minimum Standards for Home Health and Community Care Benefits in Long-Term Care Insurance Policies Section 13 Requirements for Application Forms and Replacement Coverage Section 14 Reporting Requirements Section 15 Licensing Section 16 Reserve Standards Section 17 Loss Ratio Section 18 Premium Rate Schedule Increases Section 19 Filing Requirement Section 20 Filing Requirements for Advertising Section 21 Standards for Marketing Section 22 Suitability Section 23 Prohibition Against Preexisting Conditions and Probationary Periods in Replacement Policies or Certificates Section 24 Standard Format Outline of Coverage Section 25 Requirement to Deliver Shopper’s Guide Section 26 Discretionary Powers of Commissioner Section 27 Availability of New Services or Providers Section 28 Right to Reduce Coverage and Lower Premiums Section 29 Nonforfeiture Benefit Requirement Section 30 Standards for Benefit Triggers Section 31 Additional Standards for Benefit Triggers for Qualified Long-Term Care Insurance Contracts Section 32 Filing of Long-Term Care Policy Forms and Rates Section 33 Severability Section 34 Enforcement Section 35 Effective Date Section 36 History Appendix A Rescission Reporting Form Appendix B Personal Worksheet Appendix C Things You Should Know Before You buy Long-Term Care Insurance Appendix D Long-Term Care Insurance Suitability Letter Appendix E Claims Denial Reporting Form Appendix F Potential Rate Increase Disclosure Form Appendix G Replacement and Lapse Reporting Form Appendix H Notice To Applicant Regarding Replacement of Individual Accident and Sickness or Long-Term Care Insurance Appendix I Notice To Applicant Regarding Replacement of Accident and Sickness or Long-Term Care Insurance Appendix J Outline of Coverage Section 1 Authority This regulation is promulgated under the authority of § §10-1-109(1), 10-7-113(3), 10-16-107(1), 10 19 106, 10-19-113.7 and 10-3-1110(1), Colorado Revised Statutes (C.R.S.). Section 2 Scope and Purpose The purpose of this regulation is to promote the public interest and the availability of long-term care insurance policies, to protect applicants for long-term care insurance, as defined, from unfair or deceptive sales or enrollment practices, to establish standards for long-term care insurance, 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 coverage. Section 3 Applicability The requirements of this regulation shall apply to long-term care policies delivered or issued for delivery in this state, on or after the effective date hereof. This regulation also applies to any acceleration of benefits provided by a life or annuity policy, unless otherwise specifically exempted in this regulation. Section 4 Definitions For the purposes of this regulation, the terms "long-term care insurance," "group long-term care insurance," "commissioner," "applicant," "policy" and "certificate" shall have the meanings set forth in § §10-1-102 and 10-19-103, C.R.S. In addition, the following definitions apply:
A. “Exceptional Increase”:
1. “Exceptional increase” means only those increases filed by an insurer as exceptional for which the commissioner determines the need for the premium rate increase is justified:
2. Except as provided in Section 18, exceptional increases are subject to the same requirements as other premium rate schedule increases.
3. 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.
4. The commissioner, in determining that the necessary basis for an exceptional increase exists, shall also determine any potential offsets to higher claims costs.
B. “Incidental,” as used in Section 18(J), means that the value of the long-term care benefits provided is less than ten percent (10%) 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.
C. “Qualified actuary” means a member in good standing of the American Academy of Actuaries.
D. “Qualified long-term care insurance” means an insurance policy that qualifies for favorable tax treatment.
E. “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 in §10-19-103(4)(a), C.R.S., 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, non-institutional long-term care benefits only, or comprehensive long-term care benefits.
Section 5 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:
A. “Activities of daily living” means at least bathing, continence, dressing, eating, toileting and transferring.
B. “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 his or her health status.
C. “Adult day care” means a program for six (6) 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.
D. “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.
E. “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.
F. “Company” or “Carrier” means an insurance company, non-profit hospital, medical-surgical and health service corporation, health maintenance organization or fraternal benefit society, which is authorized by the Commissioner to transact long term care insurance in Colorado.
G. “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).
H. “Dressing” means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs.
I. “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.
J. “Hands-on assistance” means physical assistance (minimal, moderate or maximal) without which the individual would not be able to perform the activity of daily living.
K. “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.
L. “Medicare” means “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.
M. “Mental or nervous disorder” shall not be defined to include more than neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder.
N. “Personal care” means the provision of hands-on services to assist an individual with activities of daily living.
O. “Skilled nursing care,” “personal care,” “home care” “specialized care” , “assisted living care” and other services shall be defined in relation to the level of skill required, the nature of the care and the setting in which care must be delivered.
P. “Toileting” means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.
Q. “Transferring” means moving into or out of a bed, chair or wheelchair.
R. All providers of services, including but not limited to “skilled nursing facility,” “extended care facility,” “convalescent nursing home,” “personal care facility,” “specialized care provider,” “assisted living facility,” and “home care agency”, shall be defined in relation to the services and facilities required to be available and the licensure, certification, registration or degree status of those providing or supervising the services. When the definition requires that the provider be appropriately licensed, certified or registered, it shall also state what requirements a provider must meet in lieu of licensure, certification or registration when the state in which the service is to be furnished does not require a provider of these services to be licensed, certified or registered, or when the state licenses, certifies or registers the provider of services under another name. Section 6 Policy Practices and Provisions A. Renewability. The terms “guaranteed renewable” and “noncancellable” shall not be used in any individual long-term care insurance policy without further explanatory language in accordance with the disclosure requirements of Section 9 of this regulation.
1. A policy issued to an individual shall not contain renewal provisions other than “guaranteed renewable” or “noncancellable.”
2. The term “guaranteed renewable” may be used only when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums and when the insurer has no unilateral right to make any change in any provision of the policy or rider while the insurance is in force, and cannot decline to renew, except that rates may be revised by the insurer on a class basis.
3. The term “noncancellable” may be used only when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums during which period the insurer has no right to unilaterally make any change in any provision of the insurance or in the premium rate.
4. The term “level premium” may only be used when the insurer does not have the right to change the premium.
5. In addition to the other requirements of this subsection, a qualified long-term care insurance contract shall be guaranteed renewable, within the meaning of Section 7702B(b)(1)(C) of the Internal Revenue Code of 1986, as amended.
B. Limitations and Exclusions. A policy may not be delivered or issued for delivery in this state as long-term care insurance if the policy limits or excludes coverage by type of illness, treatment, medical condition or accident, except as follows:
1. Preexisting conditions or diseases;
2. Mental or nervous disorders; however, this shall not permit exclusion or limitation of benefits on the basis of Alzheimer’s Disease, senile dementia, other organic brain syndromes or other types of senility;
3. Alcoholism and drug addiction;
4. Illness, treatment or medical condition arising out of:
5. Treatment provided in a government facility (unless otherwise required by law), services for which benefits are available under Medicare or other governmental programs (except Medicaid), any state or federal workers’ compensation, employer’s liability or occupational disease law, or any motor vehicle no-fault law, services provided by a member of the covered person’s immediate family and services for which no charge is normally made in the absence of insurance;
6. Expenses for services or items available or 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. Out of State Providers;
9. This subsection is not intended to prohibit territorial limitations.
C. Extension of Benefits. Termination of long-term care insurance shall be without prejudice to any benefits payable for institutionalization if the institutionalization began while the long-term care insurance was in force and continues without interruption after termination. The extension of benefits beyond the period the long-term care insurance was in force may be limited to the duration of the benefit period, if any, or to payment of the maximum benefits and may be subject to any policy waiting period, and all other applicable provisions of the policy.
D. Continuation or Conversion.
1. Group long-term care insurance issued in this state on or after the effective date of this section shall provide covered individuals with a basis for continuation or conversion of coverage.
2. For the purposes of this section, “a basis for continuation of coverage” means a policy provision that maintains coverage under the existing group policy when the coverage would otherwise terminate and which is subject only to the continued timely payment of premium when due. Group policies that restrict provision of benefits and services from, or contain incentives to use, certain providers or facilities may provide continuation benefits that are substantially equivalent to the benefits of the existing group policy. The commissioner shall make a determination as to the substantial equivalency of benefits, and in doing so, shall take into consideration the differences between managed care and non-managed care plans, including, but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity.
3. For the purposes of this section, “a basis for conversion of coverage” means a policy provision that an individual whose coverage under the group policy would otherwise terminate or has been terminated for any reason, including discontinuance of the group policy in its entirety or with respect to an insured class, and who has been continuously insured under the group policy (and any group policy which it replaced), for at least six months immediately prior to termination, shall be entitled to the issuance of a converted policy by the insurer under whose group policy he or she is covered, without evidence of insurability.
4. For the purposes of this section, “converted policy” means an individual policy of long- term care insurance providing benefits identical to or benefits determined by the commissioner to be substantially equivalent to or in excess of those provided under the group policy from which conversion is made. Where the group policy from which conversion is made restricts provision of benefits and services from, or contains incentives to use, certain providers or facilities, the commissioner, in making a determination as to the substantial equivalency of benefits, shall take into consideration the differences between managed care and non-managed care plans, including, but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity.
5. Written application for the converted policy shall be made and the first premium due, if any, shall be paid as directed by the insurer not later than thirty-one (31) days after termination of coverage under the group policy. The converted policy shall be issued effective on the day following the termination of coverage under the group policy, and shall be renewable annually.
6. Unless the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured’s age at inception of coverage under the group policy from which conversion is made. Where the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured’s age at inception of coverage under the group policy replaced.
7. Continuation of coverage or issuance of a converted policy shall be mandatory, except where:
8. Notwithstanding any other provision of this section, a converted policy issued to an individual who at the time of conversion is covered by another long-term care insurance policy that provides benefits on the basis of incurred expenses, may contain a provision that results in a reduction of benefits payable if the benefits provided under the additional coverage, together with the full benefits provided by the converted policy, would result in payment of more than 100 percent of incurred expenses. The provision shall only be included in the converted policy if the converted policy also provides for a premium decrease or refund which reflects the reduction in benefits payable.
9. The converted policy may provide that the benefits payable under the converted policy, together with the benefits payable under the group policy from which conversion is made, shall not exceed those that would have been payable had the individual’s coverage under the group policy remained in force and effect.
10. Notwithstanding any other provision of this section, an insured individual whose eligibility for group long-term care coverage is based upon his or her relationship to another person shall be entitled to continuation of coverage under the group policy upon termination of the qualifying relationship by death or dissolution of marriage.
11. For the purposes of this section a “managed-care plan” is a health care or assisted living arrangement designed to coordinate patient care or control costs through utilization review, case management or use of specific provider networks.
E. Discontinuance and Replacement If a group long-term care policy is replaced by another group long-term care policy issued to the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the previous group policy on its date of termination. Coverage provided or offered to individuals by the insurer and premiums charged to persons under the new group policy:
1. Shall not result in an exclusion for preexisting conditions that would have been covered under the group policy being replaced; and 2. Shall not vary or otherwise depend on the individual’s health or disability status, claim experience or use of long-term care services.
F. Rules Concerning Premium Rate Changes 1. The premium charged to an insured shall not increase due to either:
2. The purchase of additional coverage shall not be considered a premium rate increase, but for purposes of the calculation required under Section 29, 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 purposes of the calculation required under Section 29, the initial annual premium shall be based on the reduced benefits.
G. Electronic Enrollment for Group Policies 1. In the case of a group defined in §10-19-103(4)(a), C.R.S., any requirement that a signature of an insured be obtained by a producer or insurer shall be deemed satisfied if:
2. The insurer shall make available, upon request of the commissioner, records that will demonstrate the insurer’s ability to confirm enrollment and coverage amounts. Section 7 Unintentional Lapse Each insurer offering long-term care insurance shall, as a protection against unintentional lapse, comply with the following:
A. Any long term care policies issued or delivered in Colorado, shall comply with the following requirements for unintentional lapses or terminations.
1. Notice before lapse or termination. No individual long-term care policy or certificate shall be issued until the insurer has received from the applicant either a written designation of at least one person, in addition to the applicant, who is to receive notice of lapse or termination of the policy or certificate for nonpayment of premium, or a written waiver dated and signed by the applicant electing not to designate additional persons to receive notice. The applicant has the right to designate at least one person who is to receive the notice of termination, in addition to the insured. Designation shall not constitute acceptance of any liability on the third party for services provided to the insured. The form used for the written designation must provide space clearly designated for listing at least one person. The designation shall include each person’s full name and home address. In the case of an applicant who elects not to designate an additional person, the waiver shall state: “Protection against unintended lapse. I understand that I have the right to designate at least one person other than myself to receive notice of lapse or termination of this long-term care insurance policy for nonpayment of premium. I understand that notice will not be given until thirty (30) days after a premium is due and unpaid. I elect NOT to designate a person to receive this notice.” The insurer shall notify the insured of the right to change this written designation, no less often than once every two (2) years.
2. When the policyholder or certificateholder pays premium for a long-term care insurance policy or certificate through a payroll or pension deduction plan, the requirements contained in Subsection A(1) need not be met until sixty (60) days after the policyholder or certificateholder is no longer on such a payment plan. The application or enrollment form for such policies or certificates shall clearly indicate the payment plan selected by the applicant.
3. Lapse or termination for nonpayment of premium. No individual long-term care policy or certificate shall lapse or be terminated for nonpayment of premium unless the insurer, at least thirty (30) days before the effective date of the lapse or termination, has given notice to the insured and to those persons designated pursuant to Subsection A(1) of this section, at the address provided by the insured for purposes of receiving notice of lapse or termination. Notice shall be given by first class United States mail, postage prepaid; and notice may not be given until thirty (30) days after a premium is due and unpaid. Notice shall be deemed to have been given as of five (5) days after the date of mailing.
B. Reinstatement. In addition to the requirement in Subsection A of this section, a long-term care insurance policy or certificate shall include a provision that provides for reinstatement of coverage, in the event of lapse if the insurer is provided proof that the policyholder or certificateholder was cognitively impaired or had a loss of functional capacity before the grace period contained in the policy expired. This option shall be available to the insured if requested within five (5) months after termination and shall allow for the collection of past due premium, where appropriate. The standard of proof of cognitive impairment or loss of functional capacity shall not be more stringent than the benefit eligibility criteria on cognitive impairment or the loss of functional capacity contained in the policy and certificate. Section 8 Required Disclosure Provisions A. Renewability. Individual long-term care insurance policies shall contain a renewability provision.
1. The provision shall be appropriately captioned, shall appear on the first page of the policy, and shall clearly state that the coverage is guaranteed renewable or noncancellable. This provision shall not apply to policies that do not contain a renewability provision, and under which the right to nonrenew is reserved solely to the policyholder.
2. A long-term care insurance policy or certificate, other than one where the insurer does not have the right to change the premium, shall include a statement that premium rates may change.
B. Riders and Endorsements. Except for riders or endorsements by which the insurer effectuates a request made in writing by the insured under an individual long-term care insurance policy, all riders or endorsements added to an individual long-term care insurance policy after date of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the policy shall require signed acceptance by the individual insured. After the date of policy issue, any rider or endorsement which increases benefits or coverage with a concomitant increase in premium during the policy term must be agreed to in writing signed by the insured, except if the increased benefits or coverage are required by law. Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy, rider or endorsement.
C. Payment of Benefits. A long-term care insurance policy that provides for the payment of benefits based on standards described as “usual and customary,” “reasonable and customary” or words of similar import shall include a definition of these terms and an explanation of the terms in its accompanying Outline of Coverage.
D. Limitations. If a long-term care insurance policy or certificate contains any limitations with respect to preexisting conditions, the limitations shall appear as a separate paragraph of the policy or certificate and shall be labeled as “Preexisting Condition Limitations.” E. Other Limitations or Conditions on Eligibility for Benefits. A long-term care insurance policy or certificate shall set forth a description of the limitations or conditions, including any required number of days of confinement, in a separate paragraph of the policy or certificate and shall label such paragraph “Limitations or Conditions on Eligibility for Benefits.” F. Disclosure of Tax Consequences. With regard to life insurance policies that provide an accelerated benefit for long-term care, a disclosure statement is required at the time of application for the policy or rider and at the time the accelerated benefit payment request is submitted that receipt of these accelerated benefits may be taxable, and that assistance should be sought from a personal tax advisor. The disclosure statement shall be prominently displayed on the first page of the policy or rider and any other related documents. This subsection shall not apply to qualified long-term care insurance contracts.
G. Benefit Triggers. Activities of daily living and cognitive impairment shall be used to measure an insured’s need for long-term care and shall be described in the policy or certificate in a separate paragraph and shall be labeled “Eligibility for the Payment of Benefits.” Any additional benefit triggers shall also be explained in this section. If these triggers differ for different benefits, explanation of the trigger shall accompany each benefit description. If an attending physician or other specified person must certify a certain level of functional dependency in order to be eligible for benefits, this too shall be specified.
H. A qualified long-term care insurance contract shall include a disclosure statement in the policy and in the Outline of Coverage that the policy is intended to be a qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended.
I. A nonqualified long-term care insurance contract shall include a disclosure statement in the policy and in the Outline of Coverage that the policy is not intended to be a qualified long-term care insurance contract.
J. At the time of policy delivery, a policy summary shall be delivered for an individual life insurance policy that provides long-term care benefits within the policy or by rider. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant’s request, but regardless of request shall make delivery no later than at the time of policy delivery. In addition to complying with all applicable requirements, the summary shall also include:
1. An explanation of how the long-term care benefit interacts with other components of the policy, including deductions from death benefits;
2. An illustration of the amount of benefits, the length of benefit, and the guaranteed lifetime benefits if any, for each covered person;
3. Any exclusions, reductions and limitations on benefits of long-term care;
4. If applicable to the policy type, the summary shall also include:
5. The provisions of the policy summary listed above may be incorporated into a basic illustration required to be delivered in accordance with Colorado Regulation 4-1-8.
K. Any time a long-term care benefit, funded through a life insurance vehicle by the acceleration of the death benefit, is in the benefit payment status, a monthly report shall be provided to the policyholder. The report shall include:
1. Any long-term care benefits paid out during the month;
2. 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 3. The amount of long-term care benefits existing or remaining.
L. If a claim under a long-term care insurance contract is denied, the issuer, shall, within sixty (60) days of the date of a written request by the policyholder or certificateholder, or a representative thereof:
1. Provide a written explanation of the reasons for the denial; and 2. Make available all information directly related to the denial.
M. A certificate issued pursuant to a group long-term care insurance policy that is delivered or issued for delivery in this state shall include:
1. A description of the principal benefits and coverage provided in the policy;
2. A statement of the principal exclusions, reductions and limitations contained in the policy; and 3. A statement that the group master policy determines contractual provisions.
N. If an application for a long-term care insurance contract or certificate is approved, the issuer shall deliver the contract or certificate of insurance to the applicant no later than thirty (30) days after the date of approval.
Section 9 Required Disclosure of Rating Practices to Consumers A. This section shall apply as follows:
1. Except as provided in Paragraph 2, this section applies to any long-term care policy or certificate issued in this state on or after July 1, 2007.
2. For certificates issued on or after the effective date of this amended regulation under a group long-term care insurance policy as defined in §10-19-103(4)(a), C.R.S., which policy was in force at the time this amended regulation became effective, the provisions of this section shall apply on the policy anniversary following January 1, 2008.
B. Other than policies for which no applicable premium rate or rate schedule increases can be made, insurers shall provide all of the information listed in this subsection to the applicant at the time of application or enrollment, unless the method of application does not allow for delivery at that time. In such a case, an insurer shall provide all of the information listed in this subsection to the applicant no later than at the time of delivery of the policy or certificate.
1. A statement that the policy may be subject to rate increases in the future;
2. An explanation of potential future premium rate revisions, and the policyholder’s or certificateholder’s option in the event of a premium rate revision;
3. The premium rate or rate schedules applicable to the applicant that will be in effect until a request is made for an increase;
4. A general explanation for applying premium rate or rate schedule adjustments that shall include:
5. Required disclosure for premium rate increases:
C. An applicant shall sign an acknowledgement at the time of application, unless the method of application does not allow for signature at that time, that the insurer made the disclosure required under Subsection B (1) through (5). If due to the method of application the applicant cannot sign an acknowledgement at the time of application, the applicant shall sign no later than at the time of delivery of the policy or certificate.
D. An insurer shall use the forms in Appendices B and F to comply with the requirements of Subsections B and C of this section.
E. An insurer shall provide notice of an upcoming premium rate schedule increase to all policyholders or certificateholders, if applicable, at least forty-five (45) days prior to the implementation of the premium rate schedule increase by the insurer. The notice shall include the information required by Subsection B when the rate increase is implemented. Section 10 Initial Filing Requirements A. This section applies to any long-term care policy issued in this state on or after June 30, 2007.
B. An insurer shall provide the information listed in this subsection to the commissioner at least sixty (60) days prior to making a long-term care insurance form available for sale. Long-term care insurance rates are prior approval for rate increases effective on or after January 1, 2009 (see §10-16-107(1), C.R.S.).
1. A copy of the disclosure documents required in Section 9; and 2. An actuarial certification consisting of at least the following:
C. Insurers shall provide information on request, pursuant to the following:
1. 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.
2. In the event the commissioner asks for additional information under this provision, the period in Subsection B does not include the period during which the insurer is preparing the requested information.
D. Benefits under long-term care insurance policies shall be deemed reasonable in relation to premiums provided the expected lifetime loss ratio is at least sixty percent (60%). Section 11 Prohibition Against Post-Claims Underwriting A. All applications for long-term care insurance policies or certificates except those that are guaranteed issue shall contain clear and unambiguous questions designed to ascertain the health condition of the applicant.
B. In asking questions concerning preexisting conditions, questions must comply with the following requirements:
1. If an application for long-term care insurance contains a question that asks whether the applicant has had medication prescribed by a physician, it must also ask the applicant to list the medication that has been prescribed.
2. If the medications listed in the application were known by the insurer, or should have been known at the time of application, to be directly related to a medical condition for which coverage would otherwise be denied, then the policy or certificate shall not be rescinded for that condition.
C. Except for policies or certificates, which are guaranteed issue:
1. The following language shall be set out conspicuously and in close conjunction with the applicant’s signature block on an application for a long-term care insurance policy or certificate:
2. The following language, or language substantially similar to the following, shall be set out conspicuously on the long-term care insurance policy or certificate at the time of delivery: Caution: The issuance of this long-term care insurance [policy] [certificate] is based upon your responses to the questions on your application. A copy of your [application] [enrollment form] [is enclosed] [was retained by you when you applied]. If your answers are incorrect or untrue, the company has the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact the company at this address: [insert address] 3. Prior to issuance of a long-term care policy or certificate to an applicant age eighty (80) or older, the insurer shall obtain one of the following:
D. A copy of the completed application or enrollment form (whichever is applicable) shall be delivered to the insured no later than at the time of delivery of the policy or certificate unless it was retained by the applicant at the time of application.
E. Every insurer or other entity selling or issuing long-term care insurance benefits shall maintain a record of all policy or certificate rescissions, both state and countrywide, except those that the insured voluntarily effectuated and shall annually furnish this information to the insurance commissioner in the format prescribed by the National Association of Insurance Commissioners in Appendix A.
Section 12 Minimum Standards for Home Health and Community Care Benefits in Long-Term Care Insurance Policies A. A long-term care insurance policy or certificate shall not, if it provides benefits for home health care or community care services, limit or exclude benefits:
1. By requiring that the insured or claimant would need care in a skilled nursing facility if home health care services were not provided;
2. By requiring that the insured or claimant first or simultaneously receive nursing or therapeutic services, or both, in a home, community or institutional setting before home health care services are covered;
3. By limiting eligible services to services provided by registered nurses or licensed practical nurses;
4. By requiring that a nurse or therapist provide services covered by the policy that can be provided by a home health aide, or other licensed or certified home care worker acting within the scope of his or her licensure or certification;
5. By excluding coverage for personal care services provided by a home health aide;
6. By requiring that the provision of home health care services be at a level of certification or licensure greater than that required by the eligible service;
7. By requiring that the insured or claimant have an acute condition before home health care services are covered;
8. By limiting benefits to services provided by Medicare-certified agencies or providers; or 9. By excluding coverage for adult day care services.
B. A long-term care insurance policy or certificate, if it provides for home health or community care services, shall provide total home health or community care coverage that is a dollar amount equivalent to at least one-half of one year’s coverage available for nursing home benefits under the policy or certificate, at the time covered home health or community care services are being received. This requirement shall not apply to policies or certificates issued to residents of continuing care retirement communities.
C. Home health care coverage may be applied to the non-home health care benefits provided in the policy or certificate when determining maximum coverage under the terms of the policy or certificate.
Section 13 Requirements for Application Forms and Replacement Coverage A. Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant has another long-term care insurance policy or certificate in force or whether a long-term care policy or certificate is intended to replace any other accident and sickness or long-term care policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and producer, except where the coverage is sold without a producer, containing the questions may be used. With regard to a replacement policy issued to a group defined by §10-19-103 (4)(a), C.R.S., the following questions may be modified only to the extent necessary to elicit information about health or long-term care insurance policies other than the group policy being replaced, provided that the certificateholder has been notified of the replacement.
1. Do you have another long-term care insurance policy or certificate in force (including health care service contract, health maintenance organization contract)? 2. Did you have another long-term care insurance policy or certificate in force during the last twelve (12) months?
3. Are you covered by Medicaid? 4. Do you intend to replace any of your medical or health insurance coverage with this policy [certificate]? B. Producers shall list any other health insurance policies they have sold to the applicant.
1. List policies sold that are still in force.
2. List policies sold in the past five (5) years that are no longer in force.
C. Solicitations Other than Direct Response. Upon determining that a sale will involve replacement, an insurer, other than an insurer using direct response solicitation methods, or its producer, shall furnish the applicant, prior to issuance or delivery of the individual long-term care insurance policy, a notice regarding replacement of accident and sickness or long-term care coverage. One copy of the notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer. The required notice shall be provided in the manner set forth in Appendix H D. Direct Response Solicitations. Insurers using direct response solicitation methods shall deliver a notice regarding replacement of accident and sickness or long-term care coverage to the applicant upon issuance of the policy. The required notice shall be provided in the manner set forth in Appendix I.
E. Where replacement is intended, the replacing insurer shall notify, in writing, the existing insurer of the proposed replacement. The existing policy shall be identified by the insurer, name of the insured and policy number or address including zip code. Notice shall be made within five (5) working days from the date the application is received by the insurer or the date the policy is issued, whichever is sooner.
F. Life Insurance policies that accelerate benefits for long-term care shall comply with this section if the policy being replaced is a long-term care insurance policy. If the policy being replaced is a life insurance policy, the insurer shall comply with the replacement requirements of Colorado Insurance Regulation 4-1-4. If a life insurance policy that accelerates benefits for long-term care is replaced by another such policy, the replacing insurer shall comply with both the long-term care and the life insurance replacement requirements.
Section 14 Reporting Requirements A. Every insurer shall maintain records for each producer 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.
B. Every insurer shall report annually by June 30 the ten percent (10%) of its producer with the greatest percentages of lapses and replacements as measured by Subsection A above. (Appendix G)
C. 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.
D. 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. (Appendix G)
E. 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. (Appendix G)
F. 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. (Appendix E)
G. For purposes of this section:
1. “Policy” means only long-term care insurance;;
2. “Claim” (Subject to Paragraph 3), 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;
3. “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 4. “Report” means on a statewide basis.
H. Reports required under this section shall be filed with the commissioner. Section 15 Licensing A producer is not authorized to sell, solicit or negotiate with respect to long-term care insurance except as authorized by §10-2-103(6), C.R.S. However, a life producer is not required to be a licensed health producer in order to sell a life product that contains an acceleration of benefit rider that complies with §10- 7-113, C.R.S.
Section 16 Reserve Standards A. When long-term care benefits are provided through the acceleration of benefits under group or individual life policies or riders to such policies, policy reserves for the benefits shall be determined in accordance with Part 3 of Article 7 of Title 10, C.R.S. Claim reserves shall also be established in the case when the policy or rider is in claim status. Reserves for policies and riders subject to this subsection should be based on the multiple decrement models utilizing all relevant decrements except for voluntary termination rates. Single decrement approximations are acceptable if the calculation produces essentially similar reserves, if the reserve is clearly more conservative, or if the reserve is immaterial. The calculations may take into account the reduction in life insurance benefits due to the payment of long-term care benefits. However, in no event shall the reserves for the long-term care benefit and the life insurance benefit be less than the reserves for the life insurance benefit assuming no long-term care benefit.
In the development and calculation of reserves for policies and riders subject to this subsection, due regard shall be given to the applicable policy provisions, marketing methods, administrative procedures and all other considerations which have an impact on projected claim costs, including, but not limited to, the following:
1. Definition of insured events;
2. Covered long-term care facilities;
3. Existence of home convalescence care coverage;
4. Definition of facilities;
5. Existence or absence of barriers to eligibility;
6. Premium waiver provision;
7. Renewability;
8. Ability to raise premiums;
9. Marketing method;
10. Underwriting procedures;
11. Claims adjustment procedures;
12. Waiting period;
13. Maximum benefit;
14. Availability of eligible facilities;
15. Margins in claim costs;
16. Optional nature of benefit;
17. Delay in eligibility for benefit;
18. Inflation protection provisions; and 19. Guaranteed insurability option.
Any applicable valuation morbidity table shall be certified as appropriate as a statutory valuation table by a member of the American Academy of Actuaries.
B. When long-term care benefits are provided other than as in Subsection A above, reserves shall be determined in accordance with Colorado Insurance Regulation 3-1-9. Section 17 Loss Ratio A. This section shall apply to all long-term care insurance policies or certificates except those covered under Sections 10 and 18.
B. Benefits under long-term care insurance policies shall be deemed reasonable in relation to premiums provided the expected loss ratio is at least sixty percent (60%), calculated in a manner which provides for adequate reserving of the long-term care insurance risk. In evaluating the expected loss ratio, due consideration shall be given to all relevant factors, including:
1. Statistical credibility of incurred claims experience and earned premiums;
2. The period for which rates are computed to provide coverage;
3. Experienced and projected trends;
4. Concentration of experience within early policy duration;
5. Expected claim fluctuation;
6. Experience refunds, adjustments or dividends;
7. Renewability features;
8. All appropriate expense factors;
9. Interest;
10. Experimental nature of the coverage;
11. Policy reserves;
12. Mix of business by risk classification; and 13. Product features such as long elimination periods, high deductibles and high maximum limits.
C. Subsection B shall not apply to life insurance policies that accelerate benefits for long-term care. A life insurance policy that funds long-term care benefits entirely by accelerating the death benefit is considered to provide reasonable benefits in relation to premiums paid, if the policy complies with all of the following provisions:
1. The interest credited internally to determine cash value accumulations, including long- term care, if any, are guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long-term care set forth in the policy;
2. The portion of the policy that provides life insurance benefits meets the nonforfeiture requirements of Part 3 of Article 7 of Title 10, C.R.S.;
3. The policy meets the disclosure requirements of Sections 8 of this regulation;
4. Any policy illustration that meets the applicable requirements of Colorado Insurance Regulation 4-1-8, Concerning the Disclosure Requirements for Life Illustrations; and 5. An actuarial memorandum is filed with the insurance department that includes:
A. This section shall apply as follows:
1. Except as provided in Paragraph 2 of this subsection, this section applies to any long- term care policy or certificate issued in this state on or after July 1, 2007.
2. For certificates issued on or after the effective date of this amended regulation under a group long-term care insurance policy as defined in §10-19-103 (4)(a), C.R.S., which policy was in force at the time this amended regulation became effective, the provisions of this section shall apply on the policy anniversary following January 1, 2008.
B. An insurer shall request approval of a premium rate schedule increase, including an exceptional increase, to the commissioner at least sixty (60) days prior to the proposed implementation of a rate increase and shall include:
1. Information required by Section 9;
2. Certification by a qualified actuary that:
3. An actuarial memorandum justifying the rate schedule change request that includes:
4. 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 5. Sufficient information for review of the premium rate schedule increase by the commissioner.
C. All premium rate schedule increases shall be determined in accordance with the following requirements:
1. Exceptional increases shall provide that seventy percent (70%) of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits;
2. 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:
3. In the event that a policy form has both exceptional and other increases, the values in Paragraph 2(b) and (d) will also include seventy percent (70%) for exceptional rate increase amounts; and 4. All present and accumulated values used to determine rate increases shall use the maximum valuation interest rate for contract reserves as specified Colorado Insurance Regulation 3-1-9. The actuary shall disclose as part of the actuarial memorandum the use of any appropriate averages.
D. For each rate increase that is implemented, the insurer shall file for review by the commissioner updated projections, as defined in Subsection B(3)(a), annually for the next three (3) years and include a comparison of actual results to projected values. The commissioner may extend the period to greater than three (3) years if actual results are not consistent with projected values from prior projections. For group insurance policies that meet the conditions in Subsection K, the projections required by this subsection shall be provided to the policyholder in lieu of filing with the commissioner.
E. 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 Subsection B(3)(a), shall be filed for review by the commissioner every five (5) years following the end of the required period in Subsection D. For group insurance policies that meet the conditions in Subsection K, the projections required by this subsection shall be provided to the policyholder in lieu of filing with the commissioner.
F. If actual experience differs from projected experience and projections, the Commissioner has a number of options available:
1. 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 Subsection C, the commissioner may require the insurer to implement any of the following:
2. In determining whether the actual experience adequately matches the projected experience, consideration should be given to Subsection B(3)(e), if applicable.
G. 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:
1. 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 Subsection H of this section; and 2. The original anticipated lifetime loss ratio, and the premium rate schedule increase that would have been calculated according to Subsection C had the greater of the original anticipated lifetime loss ratio or fifty-eight percent (58%) been used in the calculations described in Subsection C(2)(a) and (c).
H. Rate increases that reflect the following will involve a more in-depth review to determine if a significant adverse lapsation has occurred or is anticipated:
1. 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 twelve (12) months following each increase to determine if significant adverse lapsation has occurred or is anticipated:
2. 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.
I. If the commissioner determines that the insurer has exhibited a persistent practice of filing inadequate initial premium rates for long-term care insurance, the commissioner may, in addition to the provisions of Subsection H of this section, prohibit the insurer from either of the following:
1. Filing and marketing comparable coverage for a period of up to five (5) years; or 2. Offering all other similar coverages and limiting marketing of new applications to the products subject to recent premium rate schedule increases.
J. Subsections A through I, shall not apply to policies for which the long-term care benefits provided by the policy are incidental, as defined in Section 4(B), if the policy complies with all of the following provisions:
1. The interest credited internally to determine cash value accumulations, including long- term care, if any, are guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long-term care set forth in the policy;
2. The portion of the policy that provides insurance benefits other than long-term care coverage meets the nonforfeiture requirements as applicable in any of the following:
3. The policy meets the disclosure requirements of Section 8 of this regulation.
4. The portion of the policy that provides insurance benefits other than long-term care coverage meets the requirements as applicable in the following:
5. An actuarial memorandum is filed with the insurance department that includes:
K. Subsections F and H, shall not apply to group insurance policies as defined in §10-19-103 (4)(a), C.R.S. where:
1. The policies insure 250 or more persons and the policyholder has 5,000 or more eligible employees of a single employer; or 2. The policyholder, and not the certificateholders, pays a material portion of the premium, which shall not be less than twenty percent (20%) of the total premium for the group in the calendar year prior to the year a rate increase is filed. Section 19 Filing Requirement Prior to an insurer or similar organization offering group long-term care insurance to a resident of this state, pursuant to CRS 10-19-105, it shall file with the commissioner evidence that the group policy or certificate thereunder has been approved by a state having statutory or regulatory long-term care insurance requirements substantially similar to those adopted in this state. Section 20 Filing Requirements for Advertising A. Every insurer, health care service plan or other entity providing long-term care insurance or benefits in this state shall provide a copy of any long-term care insurance advertisement intended for use in this state whether through written, radio or television medium to the Commissioner of Insurance of this state for review or approval by the commissioner to the extent it may be required under state law. In addition, all advertisements shall be retained by the insurer, health care service plan or other entity for at least three (3) years from the date the advertisement was first used.
B. This section does not apply to acceleration of benefit riders sold in connection with a life or annuity policy. In addition, the commissioner may exempt from these requirements any advertising form or material when, in the commissioner’s opinion, this requirement may not be reasonably applied.
Section 21 Standards for Marketing A. Every insurer, health care service plan or other entity marketing long-term care insurance coverage in this state, directly or through its producers, shall:
1. Establish marketing procedures and producer training requirements to assure that:
2. Display prominently by type, stamp or other appropriate means, on the first page of the Outline of Coverage and policy the following:
3. Provide copies of the disclosure forms required in Section 9(C), (Appendices B and F), to the applicant.
4. Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for long-term care insurance already has accident and sickness or long-term care insurance and the types and amounts of any such insurance, except that in the case of qualified long-term care insurance contracts, an inquiry into whether a prospective applicant or enrollee for long-term care insurance has accident and sickness insurance is not required.
5. Every insurer or entity marketing long-term care insurance shall establish auditable procedures for verifying compliance with this Subsection A.
6. If the state in which the policy or certificate is to be delivered or issued for delivery has a senior insurance counseling program approved by the commissioner, the insurer shall, at solicitation, provide written notice to the prospective policyholder and certificateholder that the program is available and the name, address and telephone number of the program.
7. For long-term care health insurance policies and certificates, use the terms “noncancellable” or “level premium” only when the policy or certificate conforms to Section 6(A)(3) of this regulation.
B. In addition to the practices prohibited in §10-3-1104, C.R.S., the following acts and practices are prohibited:
1. Twisting. Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on or convert any insurance policy or to take out a policy of insurance with another insurer.
2. High pressure tactics. Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance.
3. Cold lead advertising. Making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance producer or insurance company.
4. Misrepresentation. Misrepresenting a material fact in selling or offering to sell a long-term care insurance policy.
C. Association plans, involved with long-term care insurance, shall also meet the following additional requirements:
1. With respect to the obligations set forth in this subsection, the primary responsibility of an association, as defined in §10-19-103 (4)(b), C.R.S., when endorsing or selling long-term care insurance shall be to educate its members concerning long-term care issues in general so that its members can make informed decisions. Associations shall provide objective information regarding long-term care insurance policies or certificates endorsed or sold by such associations to ensure that members of such associations receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold.
2. The insurer shall file with the insurance department the following material:
3. The association shall disclose in any long-term care insurance solicitation:
4. If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.
5. The board of directors of associations selling or endorsing long-term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the insurer.
6. The association shall also:
7. No group long-term care insurance policy or certificate may be issued to an association unless the insurer files with the state insurance department the information required in this subsection.
8. The insurer shall not issue a long term care policy or certificate to an association or continue to market such a policy or certificate unless the insurer certifies annually that the association has complied with the requirements set forth in this subsection.
9. Failure to comply with the filing and certification requirements of this section constitutes an unfair trade practice in violation of §10-3-1104, C.R.S. Section 22 Suitability A. This section shall not apply to life insurance policies that accelerate benefits for long-term care.
B. Every insurer, health care service plan or other entity marketing long-term care insurance (the “issuer”) shall:
1. Develop and use suitability standards to determine whether the purchase or replacement of long-term care insurance is appropriate for the needs of the applicant;
2. Train its producers in the use of its suitability standards; and 3. Maintain a copy of its suitability standards and make them available for inspection upon request by the commissioner.
C. Insurers shall develop suitability stands for prospective applicants.
1. To determine whether the applicant meets the standards developed by the issuer, the producer and issuer shall develop procedures that take the following into consideration:
2. The issuer, and where a producer is involved, the producer shall make reasonable efforts to obtain the information set out in Paragraph 1 above. The efforts shall include presentation to the applicant, at or prior to application, the “Long-Term Care Insurance Personal Worksheet.” The personal worksheet used by the issuer shall contain, at a minimum, the information in the format contained in Appendix B, in not less than twelve
3. A completed personal worksheet shall be returned to the issuer prior to the issuer’s consideration of the applicant for coverage, except the personal worksheet need not be returned for sales of employer group long-term care insurance to employees and their spouses.
4. The sale or dissemination outside the company or agency by the issuer or producer of information obtained through the personal worksheet in Appendix B is prohibited.
D. The issuer shall use the suitability standards it has developed pursuant to this section in determining whether issuing long-term care insurance coverage to an applicant is appropriate.
E. Producers shall use the suitability standards developed by the issuer in marketing long-term care insurance.
F. At the same time as the personal worksheet is provided to the applicant, the disclosure form entitled “Things You Should Know Before You Buy Long-Term Care Insurance” shall be provided. The form shall be in the format contained in Appendix C, in not less than twelve (12) point type.
G. If the issuer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the issuer may reject the application. In the alternative, the issuer shall send the applicant a letter similar to Appendix D. However, if the applicant has declined to provide financial information, the issuer may use some other method to verify the applicant’s intent. Either the applicant’s returned letter or a record of the alternative method of verification shall be made part of the applicant’s file.
H. The issuer shall report annually to the commissioner the total number of applications received from residents of this state, the number of those who declined to provide information on the personal worksheet, the number of applicants who did not meet the suitability standards, and the number of those who chose to confirm after receiving a suitability letter. Section 23 Prohibition Against Preexisting Conditions and Probationary Periods in Replacement Policies or Certificates If a long-term care insurance policy or certificate replaces another long-term care policy or certificate, the replacing insurer shall waive any time periods applicable to preexisting conditions and probationary periods in the new long-term care policy for similar benefits to the extent that similar exclusions have been satisfied under the original policy.
Section 24 Standard Format Outline of Coverage This section of the regulation implements, interprets and makes specific, the provisions of §10-19-112, C.R.S. in prescribing a standard format and the content of an Outline of Coverage.
A. The Outline of Coverage shall be a freestanding document, using no smaller than ten-point type.
B. The Outline of Coverage shall contain no material of an advertising nature.
C. Text that is capitalized or underscored in the standard format Outline of Coverage may be emphasized by other means that provide prominence equivalent to the capitalization or underscoring.
D. Use of the text and sequence of text of the standard format Outline of Coverage is mandatory, unless otherwise specifically indicated.
E. The Outline of Coverage shall be formatted as demonstrated in Appendix J. Section 25 Requirement to Deliver Shopper’s Guide A. A long-term care insurance shopper’s guide in the format developed by the National Association of Insurance Commissioners, or a guide developed or approved by the commissioner, shall be provided to all prospective applicants of a long-term care insurance policy or certificate.
1. In the case of producer solicitations, an producer must deliver the shopper’s guide prior to the presentation of an application or enrollment form.
2. In the case of direct response solicitations, the shopper’s guide must be presented in conjunction with any application or enrollment form.
B. Life insurance policies or riders containing accelerated long-term care benefits are not required to furnish the above-referenced guide, but shall furnish the policy summary required under Section 8 of this Regulation.
Section 26 Discretionary Powers of the Commissioner The commissioner may upon written request and after an administrative hearing, issue an order to modify or suspend a specific provision or provisions of this regulation with respect to a specific long-term care insurance policy or certificate upon a written finding that:
A. The modification or suspension would be in the best interest of the insureds;
B. The purposes to be achieved could not be effectively or efficiently achieved without the modification or suspension; and C. In determining if it is reasonable to order a modification or suspension of a specific provision(s) of this regulation, the Commissioner will consider if:
1. The modification or suspension is necessary to the development of an innovative and reasonable approach for insuring long-term care; or 2. The policy or certificate is to be issued to residents of a life care or continuing care retirement community or some other residential community for the elderly and the modification or suspension is reasonably related to the special needs or nature of such a community; or 3. The modification or suspension is necessary to permit long-term care insurance to be sold as part of, or in conjunction with, another insurance product. Section 27 Availability of New Services or Providers A. An insurer shall notify policyholders of the availability of a new long-term care policy series that provides coverage for new long-term care services or providers material in nature and not previously available through the insurer to the general public. The notice shall be provided within twelve (12) months of the date the new policy series is made available for sale in this state.
B. Notwithstanding Subsection A above, notification is not required for any policy issued prior to the effective date of this section or to any policyholder or certificateholder who is currently eligible for benefits, within an elimination period or on claim, or who previously has been in claim status, or who would not be eligible to apply for coverage due to issue age limitations under the new policy. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium to add such new services or providers.
C. The insurer shall make the new coverage available in one of the following ways:
1. By adding a rider to the existing policy and charging a separate premium for the new rider based on the insured’s attained age;
2. By exchanging the existing policy or certificate for one with an issue age based on the present age of the insured and recognizing past insured status by granting premium credits toward the premiums for the new policy or certificate. The premium credits shall be based on premiums paid or reserves held for the prior policy or certificate;
3. By exchanging the existing policy or certificate for a new policy or certificate in which consideration for past insured status shall be recognized by setting the premium for the new policy or certificate at the issue age of the policy or certificate being exchanged. The cost for the new policy or certificate may recognize the difference in reserves between the new policy or certificate and the original policy or certificate; or 4. By an alternative program developed by the insurer that meets the intent of this section if the program is filed with and approved by the Commissioner.
D. An insurer is not required to notify policyholders of a new proprietary policy series created and filed for use in a limited distribution channel. For purposes of this subsection, “limited distribution channel” means through a discrete entity, such as a financial institution or brokerage, for which specialized products are available that are not available for sale to the general public. Policyholders that purchased such a proprietary policy shall be notified when a new long-term care policy series that provides coverage for new long-term care services or providers material in nature is made available to that limited distribution channel.
E. Policies issued pursuant to this section shall be considered exchanges and not replacements. These exchanges shall not be subject to Sections 13 and 22, and the reporting requirements of Section 14A to E of this regulation.
F. Where the policy is offered through an employer, labor organization, professional, trade or occupational association, the required notification in Subsection A above shall be made to the offering entity. However, if the policy is issued to a group defined in §10-19-103(4)(d), C.R.S., the notification shall be made to each certificateholder.
G. Nothing in this section shall prohibit an insurer from offering any policy, rider, certificate or coverage change to any policyholder or certificateholder. However, upon request any policyholder may apply for currently available coverage that includes the new services or providers. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium to add such new services or providers.
H. This section does not apply to life insurance policies or riders containing accelerated long-term care benefits.
I. This section shall become effective on or after July 1, 2008. Section 28 Right to Reduce Coverage and Lower Premiums A. Insurers shall allow policyholders/certificateholders to reduce coverage and therefore reduce premiums.
1. Every long-term care insurance policy and certificate shall include a provision that allows the policyholder or certificateholder to reduce coverage and lower the policy or certificate premium in at least one of the following ways:
2. The insurer may also offer other reduction options that are consistent with the policy or certificate design or the carrier’s administrative processes.
B. The provision shall include a description of the ways in which coverage may be reduced and the process for requesting and implementing a reduction in coverage.
C. The age to determine the premium for the reduced coverage shall be based on the age used to determine the premiums for the coverage currently in force.
D. The insurer may limit any reduction in coverage to plans or options available for that policy form and to those for which benefits will be available after consideration of claims paid or payable.
E. If a policy or certificate is about to lapse, the insurer shall provide a written reminder to the policyholder or certificateholder of his or her right to reduce coverage and premiums in the notice required by Section 7A(3) of this regulation.
F. This section does not apply to life insurance policies or riders containing accelerated long-term care benefits.
G. The requirements of this section shall apply to any long-term care policy issued in this state on or after July 1, 2008.
Section 29 Nonforfeiture Benefit Requirement A. This section does not apply to life insurance policies or riders containing accelerated long-term care benefits.
B. To comply with the requirement to offer a nonforfeiture benefit pursuant to the provisions of §10 19-113.4, C.R.S.:
1. A policy or certificate offered with nonforfeiture benefits shall have coverage elements, eligibility, benefit triggers and benefit length that are the same as coverage to be issued without nonforfeiture benefits. The nonforfeiture benefit included in the offer shall be the benefit described in Subsection E; and 2. The offer shall be in writing if the nonforfeiture benefit is not otherwise described in the Outline of Coverage or other materials given to the prospective policyholder.
C. If the offer is rejected, the insurer shall provide the contingent benefit upon lapse described in this section. Even if this offer is accepted for a policy with a fixed or limited premium paying period, the contingent benefit on lapse in Subsection D(4) shall still apply.
D. Contingent Benefit Upon Lapse shall comply with the following:
1. After rejection of an offer of non-forfeiture benefits, for individual and group policies without nonforfeiture benefits issued after the effective date of this section, the insurer shall provide a contingent benefit upon lapse.
2. In the event a group policyholder elects to make the nonforfeiture benefit an option to the certificateholder, a certificate shall provide either the nonforfeiture benefit or the contingent benefit upon lapse.
3. A contingent benefit on lapse shall be triggered every time an insurer increases the premium rates to a level which results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured’s initial annual premium set forth below based on the insured’s issue age, and the policy or certificate lapses within 120 days of the due date of the premium so increased. Unless otherwise required, policyholders shall be notified at least thirty (30) days prior to the due date of the premium reflecting the rate increase.
4. A contingent benefit on lapse shall also be triggered for policies with a fixed or limited premium paying period every time an insurer increases the premium rates to a level that results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured’s initial annual premium set forth below based on the insured’s issue age, the policy or certificate lapses within 120 days of the due date of the premium so increased, and the ratio in Paragraph 6(b) is forty percent (40%) or more. Unless otherwise required, policyholders shall be notified at least thirty (30) days prior to the due date of the premium reflecting the rate increase.
5. On or before the effective date of a substantial premium increase as defined in Paragraph 3 above, the insurer shall:
6. On or before the effective date of a substantial premium increase as defined in Paragraph 4 above, the insurer shall:
E. Benefits continued as nonforfeiture benefits, including contingent benefits upon lapse in accordance with Subsection D(3) but not Subsection D(4), are described in this subsection:
1. For purposes of this subsection, attained age rating is defined as a schedule of premiums starting from the issue date which increases by age at least one percent per year prior to age fifty (50), and at least three percent (3%) per year beyond age fifty (50).
2. For purposes of this subsection, the nonforfeiture benefit shall be of a shortened benefit period providing paid-up long-term care insurance coverage after lapse. The same benefits (amounts and frequency in effect at the time of lapse but not increased thereafter) will be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits shall be determined as specified in Paragraph 3.
3. The standard nonforfeiture credit will be equal to 100% of the sum of all premiums paid, including the premiums paid prior to any changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equals or exceeds the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit shall not be less than thirty (30) times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit is subject to the limitation of Subsection F.
4. Nonforfeiture benefits shall comply with the following:
5. Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.
F. All benefits paid by the insurer while the policy or certificate is in premium paying status and in the paid up status will not exceed the maximum benefits that would be payable if the policy or certificate had remained in premium paying status.
G. There shall be no difference in the minimum nonforfeiture benefits as required under this section for group and individual policies.
H. The requirements set forth in this section shall become effective January 1, 2009, and shall apply as follows:
1. Except as provided in Paragraph 2 below, the provisions of this section apply to any long- term care policy issued in this state on or after the effective date of this section.
2. For certificates issued on or after the effective date of this section, under a group long- term care insurance policy as defined in §10-19-103 (4)(a), C.R.S., which policy was in force at the time this amended regulation became effective, the provisions of this section shall not apply.
I. Premiums charged for a policy or certificate containing nonforfeiture benefits or a contingent benefit on lapse shall be subject to the loss ratio requirements of Sections 10, 17 or 18, whichever is applicable, treating the policy as a whole.
J. To determine whether contingent nonforfeiture upon lapse provisions are triggered under Subsection D(3) or D(4), a replacing insurer that purchased or otherwise assumed a block or blocks of long-term care insurance policies from another insurer shall calculate the percentage increase based on the initial annual premium paid by the insured when the policy was first purchased from the original insurer.
K. A nonforfeiture benefit for qualified long-term care insurance contracts that are level premium contracts shall be offered that meets the following requirements:
1. The nonforfeiture provision shall be appropriately captioned;
2. The nonforfeiture provision shall provide a benefit available in the event of a default in the payment of any premiums and shall state that the amount of the benefit may be adjusted subsequent to being initially granted only as necessary to reflect changes in claims, persistency and interest as reflected in changes in rates for premium paying contracts approved by the commissioner for the same contract form; and 3. The nonforfeiture provision shall provide at least one of the following:
A. A long-term care insurance policy shall condition the payment of benefits on a determination of the insured’s ability to perform activities of daily living and on cognitive impairment. Eligibility for the payment of benefits shall not be more restrictive than requiring either a deficiency in the ability to perform not more than three (3) of the activities of daily living or the presence of cognitive impairment.
B. Activities of daily living shall comply with the following:
1. Activities of daily living shall include at least the following as defined in Section 5 and in the policy:
2. Insurers may use activities of daily living to trigger covered benefits in addition to those contained in Paragraph 1 as long as they are defined in the policy.
C. An insurer may use additional provisions for the determination of when benefits are payable under a policy or certificate; however the provisions shall not restrict, and are not in lieu of, the requirements contained in Subsections A and B.
D. For purposes of this section the determination of a deficiency shall not be more restrictive than:
1. Requiring the hands-on assistance of another person to perform the prescribed activities of daily living; or 2. If the deficiency is due to the presence of a cognitive impairment, supervision or verbal cueing by another person is needed in order to protect the insured or others.
E. Assessments of activities of daily living and cognitive impairment shall be performed by licensed or certified professionals, such as physicians, nurses or social workers.
F. Long-term care insurance policies shall include a clear description of the process for appealing and resolving benefit determinations.
G. The requirements set forth in this section shall be effective January 1, 2008, and shall apply as follows:
1. Except as provided in Paragraph 2 below, the provisions of this section apply to any long term care policy issued in this state on or after the effective date of this section.
2. For certificates issued on or after the effective date of this section, under a group long- term care insurance policy as defined in §10-19-103 (4)(a), C.R.S., that was in force at the time this amended regulation became effective, the provisions of this section shall not apply.
Section 31 Additional Standards for Benefit Triggers for Qualified Long-Term Care Insurance Contracts A. For purposes of this section the following definitions apply:
1. “Qualified long-term care services” means services that meet the requirements of Section 7702(c)(1) of the Internal Revenue Code of 1986, as amended, 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.
2. Chronically ill individual definition shall comply with the following:
3. “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.
4. “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).
B. 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.
C. 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 ninety (90) days due to a loss of functional capacity or to severe cognitive impairment.
D. Certifications regarding activities of daily living and cognitive impairment required pursuant to Subsection C 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.
E. Certifications required pursuant to Subsection C 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 ninety (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 ninety-day period.
F. Qualified long-term care insurance contracts shall include a clear description of the process for appealing and resolving disputes with respect to benefit determinations. Section 32 Filing of Long-Term Care Policy Forms and Rates A. Policy forms for long-term care insurance must be submitted for certification in accordance with §10-16-107.2, C.R.S. However, long-term care policy forms (application, Long-term Care Insurance Potential Rate Increase Disclosure Form, Outline of Coverage, policy summary, Long- Term Care Insurance Personal Worksheet, Things You Should Know Before You Buy Long-Term Care Insurance disclosure, any riders/endorsements and Colorado Long-Term Care Partnership Notice) must be filed with the Division of Insurance for Colorado Long-Term Care Partnership Certification pursuant to the Deficit Reduction Act of 2005, Pub. L. No. 109-171 (“DRA”), which requires the Insurance Commissioner to ensure policies identified as Qualified Partnership Policies meet certain consumer requirements set forth in the DRA.
B. Long-term care insurance rate increases are prior approval for rate increases effective on or after January 1, 2009, pursuant to § 10-16-107(1), C.R.S.
C. Premium rates for any individual long-term care insurance policy shall not vary due to the gender of the individual policyholder, enrollee, subscriber, or member for rates effective on or after January 1, 2011, pursuant to § 10-16-107(1.5)(b), C.R.S. This subsection shall not apply to life insurance policies or riders that provide an accelerated benefit for long-term care and in which neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long-term care.
Section 33 Severability If any provision of this regulation or application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 34 Enforcement Noncompliance with this regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocations of licenses. Among others, the penalties provided for in § 10-3-1108, C.R.S. may be applied. Section 35 Effective Date This regulation shall be effective January 1, 2011.
Section 36 History New Colorado Regulation 85-6.
Colorado Regulation 90-15, effective January 1, 1991.
Colorado Regulation 4-4-1, effective January 1, 1997.
Repealed and Repromulgated regulation 4-4-1 effective January 1, 2007. Amended, effective January 1, 2008.
Amended, effective October 1, 2008.
Amended effective February 1, 2009.
Amended Regulation 4-4-1, effective September 1, 2010 Amended Regulation 4-4-1, effective January 1, 2011 APPENDIX A RESCISSION REPORTING FORM FOR LONG-TERM CARE POLICIES For the State of _________________________________ For the Reporting Year of ________________________ Company Name: _______________________________________________________________ Address: ______________________________________________________________________ ______________________________________________________________________ Phone Number: ______________________________________________________________________ Due: June 30 Annually Instructions:
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.
Date of Date/s Policy Policy and Name of Policy Claim/s Date of Form # Certificate # Insured Issuance Submitted Rescission Detailed reason for rescission: ______________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ___________________________________ Signature ___________________________________ Name and Title (please type)
Under $10,000 $[10-20,000] $[20-30,000] $[30-50,000] Over $50,000 Drafting 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 Decrease If 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 No If 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 pay The 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 pay Questions Related to Your Savings and Investments Not 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 $50,000 How do you expect your assets to change over the next ten years? (check one) Stay about the same Increase Decrease If 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.
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 C Things You Should Know Before You Buy Long-Term Care Insurance Long-Term • A long-term care insurance policy may pay most of the costs for your care in a Care nursing home. Many policies also pay for care at home or other community settings. Insurance Since policies can vary in coverage, you should read this policy and make sure you understand what it covers before you buy it.
Counseling • Free 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.
Facilities • Some long-term care insurance contracts provide for benefit payments in certain facilities only if they are licensed or certified, such as in assisted living centers. However, not all states regulate these facilities in the same way. Also, many people move to a different state from where they purchased their long-term care insurance policy. Read the policy carefully to determine what types of facilities qualify for benefit payments, and to determine that payment for a covered service will be made if you move to a state that has a different licensing scheme for facilities than the one in which you purchased the policy.
APPENDIX D Long-Term Care Insurance Suitability Letter Dear [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 then return this letter 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 SIGNATURE DATE Please return to [issuer] at [address] by [date].
APPENDIX E Claims Denial Reporting Form Long-Term Care Insurance For the State of __________________________ For the Reporting Year of _______________ Company Name: __________________________________________________ Due: June 30 annually Company Address: ___________________________________________________________________ ___________________________________________________________________________________ Company NAIC Number: ______________________________________________________________ Contact Person: ________________________________Phone Number: ________________________ Line of Business: Individual Group Instructions The 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 Data Nationwide Data1 1 Total Number of Long-Term Care Claims Reported 2 Total Number of Long-Term Care Claims Denied/Not Paid 3 Number of Claims Not Paid due to Preexisting Condition Exclusion 4 Number of Claims Not Paid due to Waiting (Elimination) Period Not Met 5 Net Number of Long-Term Care Claims Denied for Reporting Purposes (Line 2 Minus Line 3 Minus Line 4)
6 Percentage of Long-Term Care Claims Denied of Those Reported (Line 5 Divided By Line 1)
7 Number of Long-Term Care Claim Denied due to:
8 • Long-Term Care Services Not Covered under the Policy2 9 • Provider/Facility Not Qualified under the Policy3 10 • Benefit Eligibility Criteria Not Met4 11 • Other 1. The 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.
3. Example—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 F Instructions:
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 Insurance Potential Rate Increase Disclosure Form 1. [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 for an increase [is][are] [on the application][$_____])
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:
▪ 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.)
• 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 premium.
• 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.)
You are eligible for the reduced “paid up” contingent nonforfeiture benefit when all three conditions shown below are met:
1. The premium you are required to pay after the increase exceeds your original premium by the same percentage or more shown in the chart below;
2. You stop paying your premiums within 120 days of when the premium increase took effect; AND 3. The ratio of the number of months you already paid premiums is 40% or more than the number of months you originally agreed to pay.
If you exercise this option your coverage will be converted to reduced “paid-up” status. That means there will be no additional premiums required. Your benefits will change in the following ways:
a. The total lifetime amount of benefits your reduced paid up policy will provide can be determined by multiplying 90% of the lifetime benefit amount at the time the policy becomes paid up by the ratio of the number of months you already paid premiums to the number of months you agreed to pay them.
b. The daily benefit amounts you purchased will also be adjusted by the same ratio. If you purchased lifetime benefits, only the daily benefit amounts you purchased will be adjusted by the applicable ratio.
Example:
• You bought the policy at age 65 with an annual premium payable for 10 years. • In the sixth year, you receive a rate increase of 35% and you decide to stop paying premiums. • Because you have already paid 50% of your total premium payments and that is more than the 40% ratio, your “paid-up” policy benefits are .45 (.90 times .50) times the total benefit amount that was in effect when you stopped paying your premiums. If you purchased inflation protection, it will not continue to apply to the benefits in the reduced “paid-up” policy. Appendix G Long-Term Care Insurance Replacement and Lapse Reporting Form For the State of _________________________ For the Reporting Year of ________________ Company Name: _______________________________ Due: June 30 annually Company Address: _______________________________ Company NAIC Number: __________ Contact Person: _______________________________ Phone Number: (____)___________ Instructions The 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 Agents with the Greatest Percentage of Replacements Number of Producer’s Name Number of Policies Number of Policies Replacements As % Sold By This Replaced By This of Number Sold By Producer Producer This Producer Listing of the 10% of Agents with the Greatest Percentage of Lapses Number of Policies Number of Policies Number of Lapses As Producer’s Name Sold By This Lapsed By This % of Number Sold By Producer Producer This Producer Company Totals Percentage 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 H NOTICE TO APPLICANT REGARDING REPLACEMENT OF INDIVIDUAL ACCIDENT AND SICKNESS OR LONG-TERM CARE INSURANCE [Insurance company’s name and address] SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE. According to [your application] [information you have furnished], you intend to lapse or otherwise terminate existing accident and sickness or long-term care insurance and replace it with an individual long-term care insurance policy to be issued by [company name] Insurance Company. Your new policy provides thirty (30) days within which you may decide, without cost, whether you desire to keep the policy. For your own information and protection, you should be aware of, and seriously consider, certain factors, which may affect the insurance protection available to you under the new policy. You should review this new coverage carefully, comparing it with all accident and sickness or long-term care insurance coverage you now have, and terminate your present policy only if, after due consideration, you find that purchase of this long-term care coverage is a wise decision. STATEMENT TO APPLICANT BY PRODUCER [BROKER OR OTHER REPRESENTATIVE]: (Use additional sheets, as necessary.)
I have reviewed your current medical or health insurance coverage. I believe the replacement of insurance involved in this transaction materially improves your position. My conclusion has taken into account the following considerations, which I call to your attention:
1. Health conditions that 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.
2. 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.
3. 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.
4. 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 your sign it, reread it carefully to be certain that all information has been properly recorded.
____________________________________________________________________ (Signature of Producer, Broker or Other Representative) [Typed Name and Address of Producer or Broker] The above “Notice to Applicant” was delivered to me on: ________________________________ __________________________ (Applicant’s Signature) (Date)
APPENDIX I NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT AND SICKNESS OR LONG-TERM CARE INSURANCE [Insurance company’s name and address] SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE. According to [your application] [information you have furnished], you intend to lapse or otherwise terminate existing accident and sickness or long-term care insurance and replace it with the long-term care insurance policy delivered herewith issued by [company name] Insurance Company. Your new policy provides thirty (30) days within which you may decide, without cost, whether you desire to keep the policy. For your own information and protection, you should be aware of, and seriously consider, certain factors that may affect the insurance protection available to you under the new policy. You should review this new coverage carefully, comparing it with all accident and sickness or long-term care insurance coverage you now have, and terminate your present policy only if, after due consideration, you find that purchase of this long-term care coverage is a wise decision.
1. 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.
2. 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.
3. 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.
4. [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 thirty (30) days if any information is not correct and complete, or if any past medical history has been left out of the application.
______________________________________ [Company Name] APPENDIX J [COMPANY NAME] [ADDRESS - CITY & STATE] [TELEPHONE NUMBER] LONG-TERM CARE INSURANCE OUTLINE OF COVERAGE [Policy Number or Group Master Policy and Certificate Number] [Except for policies or certificates which are guaranteed issue, the following caution statement, or language substantially similar, must appear as follows in the Outline of Coverage.] “Notice to buyer” This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all the policy limits.” Caution: The issuance of this long-term care insurance [policy] [certificate] is based upon your responses to the questions on your application. A copy of your [application] [enrollment form] [is enclosed] [was retained by you when you applied]. If your answers are incorrect or untrue, the company has the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact the company at this address: [insert address] 1. This policy is [an individual policy of insurance] [a group policy] which was issued in the [indicate jurisdiction in which group policy was issued].
2. 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! 3. FEDERAL TAX CONSEQUENCES.
This [POLICY] [CERTIFICATE] is intended to be a federally tax-qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended and will be endorsed to conform to changes in that definition. You should consult with your attorney, accountant, or tax advisor regarding the tax implications of purchasing this long-term care insurance.
OR Federal Tax Implications of this [POLICY] [CERTIFICATE]. This [POLICY] [CERTIFICATE] is not intended to be a federally tax-qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986 as amended. Benefits received under the [POLICY] [CERTIFICATE] may be taxable as income.
4. Terms Under Which the Policy OR Certificate May Be Continued in Force or Discontinued.
(a) [For long-term care health insurance policies or certificates describe one of the following permissible policy renewability provisions:
(b) [For group coverage, specifically describe continuation/conversion provisions applicable to the certificate and group policy;] (c) [Describe waiver of premium provisions or state that there are not such provisions.] 5. TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS.
[In bold type larger than the maximum type required to be used for the other provisions of the Outline of Coverage, state whether or not the company has a right to change the premium, and if a right exists, describe clearly and concisely each circumstance under which the premium may change.] 6. TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE RETURNED AND PREMIUM REFUNDED.
(a) [Provide a brief description of the right to return–“free look” provision of the policy.] (b) [Include a statement that the policy either does or does not contain provisions providing for a refund or partial refund of premium upon the death of an insured or surrender of the policy or certificate. If the policy contains such provisions, include a description of them.] 7. THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are eligible for Medicare, review the Medicare Supplement Buyer’s Guide available from the insurance company.
(a) [For producer] Neither]] [insert company name] nor its producers represent Medicare, the federal government or any state government.
(b) [For direct response] [insert company name] is not representing Medicare, the federal government or any state government.
8. 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. This policy provides coverage in the form of a fixed dollar indemnity benefit for covered long-term care expenses, subject to policy [limitations] [waiting periods] and [coinsurance] requirements. [Modify this paragraph if the policy is not an indemnity policy.] 9. BENEFITS PROVIDED BY THIS POLICY.
(a) [Covered services, related deductibles, waiting periods, elimination periods and benefit maximums.] (b) [Institutional benefits, by skill level.] (c) [Non-institutional benefits, by skill level.] (d) Eligibility for Payment of Benefits [Activities of daily living and cognitive impairment shall be used to measure an insured’s need for long-term care and must be defined and described as part of the Outline of Coverage.] [Any additional benefit triggers must also be explained. If these triggers differ for different benefits, explanation of the triggers should accompany each benefit description. If an attending physician or other specified person must certify a certain level of functional dependency in order to be eligible for benefits, this too must be specified.] 10. LIMITATIONS AND EXCLUSIONS.
[Describe:
(a) Preexisting conditions;
(b) Non-eligible facilities and provider;
(c) Non-eligible levels of care (e.g., unlicensed providers, care or treatment provided by a family member, etc.);
(d) Exclusions and exceptions;
(e) Limitations.] [This section should provide a brief specific description of any policy provisions which limit, exclude, restrict, reduce, delay, or in any other manner operate to qualify payment of the benefits described in Number 6 above.] THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH YOUR LONG- TERM CARE NEEDS.
11. 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:
(a) That the benefit level will not increase over time;
(b) Any automatic benefit adjustment provisions;
(c) Whether the insured will be guaranteed the option to buy additional benefits and the basis upon which benefits will be increased over time if not by a specified amount or percentage;
(d) If there is such a guarantee, include whether additional underwriting or health screening will be required, the frequency and amounts of the upgrade options, and any significant restrictions or limitations;
(e) And finally, describe whether there will be any additional premium charge imposed, and how that is to be calculated.] 12. ALZHEIMER’S DISEASE AND OTHER ORGANIC BRAIN DISORDERS. [State that the policy provides coverage for insureds clinically diagnosed as having Alzheimer’s disease or related degenerative and dementing illnesses. Specifically describe each benefit screen or other policy provision which provides preconditions to the availability of policy benefits for such an insured.] 13. PREMIUM.
[(a) State the total annual premium for the policy;
(b) If the premium varies with an applicant’s choice among benefit options, indicate the portion of annual premium which corresponds to each benefit option.] 14. ADDITIONAL FEATURES.
[(a) Indicate if medical underwriting is used;
(b) Describe other important features.] 15. CONTACT THE STATE SENIOR HEALTH INSURANCE ASSISTANCE PROGRAM 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.
Regulation 4-4-2 [Repealed eff. 08/30/05] [Repealed eff. 08/30/2005] Regulation 4-4-3 [Repealed eff. 01/01/2007] [Repealed eff. 01/01/2007. Replaced, in part, by Reg. 4-4-1] Regulation 4-4-4 CONCERNING LONG-TERM CARE PARTNERSHIP PROGRAM Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Policy Requirements Section 6 Exchange Requirements Section 7 Producer Requirements Section 8 Insurer Requirements Section 9 Incorporation by Reference Section 10 Severability Section 11 Enforcement Section 12 Effective Date Section 13 History Appendix A Important Notice Regarding Long-Term Care Partnership Status Appendix B QP Checklist (Long-Term Care Partnership) and Certification Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § 10-1-109(1), C.R.S. and Department of Health Care Policy and Financing under the authority of § 25.5-1- 303, C.R.S.
Section 2 Scope and Purpose The purpose of this regulation is to implement rules and assist in the development of the Colorado Long- Term Care Partnership (LTCP) Program in Colorado.
Section 3 Applicability This regulation applies to the Colorado LTCP Program including certificates issued under a group insurance contract; all producers soliciting such policies in Colorado; and to all insurers issuing Colorado LTCP policies. Compliance with this regulation for such policies and parties is in addition to compliance with § § 10-19-101, et seq., C.R.S., and Colorado Insurance Regulations 4-4-1 and 4-2-3. Section 4 Definitions A. "Long-Term Care Partnership Policy" (LTCP Policy) means a long-term care insurance policy that meets all of the requirements of Section 5 of this regulation.
B. "Inflation protection benefit" means a feature that increases benefits annually, and which meets or exceeds the following criteria:
1. For individuals under the age of 61, the policy must provide annual compound inflation protection. Annual compound inflation protection includes: annual inflation protection based upon a fixed percentage; or a policy that covers at least 80% of actual or reasonable charges and does not include a maximum specified daily indemnity amount or limit; or inflation protection based upon changes in the Consumer Price Index (CPI). Guaranteed/future purchase option is not acceptable.
2. For individuals ages 61 through 75, some level of inflation protection. Policies with an annual inflation protection benefit that meets or exceeds the requirements of B1 above or which contain simple inflation protection based on a fixed percentage are acceptable. Guaranteed/future purchase option is not acceptable.
3. For individuals ages 76 and older, inflation protection is optional.
4. A policy that qualified as a LTCP Policy at time of issue will not lose that status solely because of changes to its inflation protection benefit that occur on or after the effective date of this regulation, provided that the inflation protection benefit meets the minimum requirements established for certain ages, as described in this regulation.
C. "Consumer Price Index" (CPI) means the consumer price index for all urban customers, U.S. city average, and all items, as determined by the Bureau of Labor Statistics of the United States Department of Labor.
D. "Federal Long-Term Care Partnership (LTCP) Program" means the LTCP Program as authorized under the Deficit Reduction Act of 2005, (Section 6021), which amended Section 1917(b) of the Federal Social Security Act to provide for Long-Term Care Insurance Partnership Programs.
E. "Secretary" means the Secretary of the United States Department of Health and Human Services.
F. "Commissioner" means the Colorado Commissioner of Insurance. Section 5 Policy Requirements Any LTCP Policy shall meet or exceed all of the following:
A. The policy meets all the applicable requirements of this regulation, Colorado Insurance Regulation 4-4-1 and § § 10-19-101, et seq., C.R.S.;
B. The policy includes an inflation protection benefit as defined in Section 4 of this regulation;
C. The insured was a resident of Colorado when coverage first became effective under this policy; and D. The policy is a qualified LTCP policy as defined in § 7702B (b) of the Internal Revenue Code (IRS) of 1986 and was issued no earlier than January 1, 2008. Section 6 Exchange Requirements A. A non-partnership long-term care policy may be exchanged for a LTCP Policy. The LTCP Policy is treated as a newly issued policy and thus is eligible for partnership status. The consumer must be advised that if an exchange occurs, the new LTCP Policy may be subject to underwriting criteria, and the premium for the policy may be higher than the previously issued long-term care policy. Additionally, it is the insurer’s decision whether an exchange is possible.
B. The addition of a rider or endorsement, for the purpose of meeting LTCP requirements, for a policy issued prior to the effective date of the LTCP Program, may be treated as giving rise to an exchange.
Section 7 Producer Requirements Every producer shall have completed the training required by § 10-19-113.6, C.R.S., prior to soliciting LTCP Policies. Proof of such training and demonstration of evidence of an understanding of such policies and how they relate to other public and private coverage of long-term care must be provided to each insurer for which the producer solicits LTCP Policies.
Section 8 Insurer Requirements A. Each insurer shall establish and maintain procedures that assure that producers soliciting the insurer’s LTCP Policies are in compliance with § 10-19-113.6, C.R.S., Section 7 of this regulation and the training required by Colorado Insurance Regulation 4-4-1. The procedures and records of the insurer shall be made available to the Commissioner upon request.
B. Each insurer shall establish and maintain procedures assuring that each LTCP Policy issued or issued for delivery in Colorado shall be accompanied by the "Important Notice Regarding Your Policy’s Long-Term Care Partnership Status" (Notice), attached as Appendix A to this regulation, which explains the benefits associated with a LTCP Policy and indicates that, at the time the policy is issued, the policy is intended to be a LTCP Policy. In the case of a group insurance contract, such Notice must be provided to the insured under a certificate upon the issuance of the certificate. In determining whether to provide this Notice with respect to a policy, the issuer of the policy may rely upon a statement by the policyholder, certificate holder or insured that the insured is a resident of Colorado.
C. Each insurer shall submit a "QP Checklist," attached as Appendix B to this regulation, a Certification Form (Form Health) and a Listing of Forms, identifying each policy form intended for use as an LTCP Policy and certifying such form’s compliance with Colorado law and this regulation. An insurer may submit supplemental issuer certification forms to identify and certify additional policy forms that are intended for use as an LTCP Policy. If there is a change made by the Secretary, pursuant to Section 1917(b)(5)(C) of the Social Security Act (42 U.S.C. 1396p(b)(5)(C)), Colorado Insurance Regulation 4-4-1 or this regulation, then appropriate modifications will be made to the issuer certification forms to reflect the new requirements.
D. Pursuant to Section 1917(b)(1)(C)(iii)(VI) and (v) of the Social Security Act (42 U.S.C. 1396p(b)(1)(C)(iii)(VI) and (v), respectively), issuers of LTCP Policies must provide regular reports to the Secretary in accordance with regulations of the Secretary. As described above, LTCP Policies that cover more than one insured are treated as separate LTCP Policies, each of which covers a single insured. Thus, the reporting requirements described herein shall apply with respect to each such separate LTCP Policy.
E. The following forms, found in Regulation 4-4-1, shall also be submitted for each LTCP Policy:
1. Long-Term Care Insurance Personal Worksheet, 2. Things You Should Know Before You Buy Long-Term Care Insurance (brochure), 3. Long-Term Care Insurance Suitability Letter, 4. Long-Term Care Insurance Potential Rate Increase Disclosure Form, 5. Notice(s) to Applicant Regarding Replacement, and 6. Long-Term Care Insurance Outline of Coverage.
Section 9 Incorporation by Reference The relevant portions of the Deficit Reduction Act (DRA) of 2005, (Section 6021), § 7702B(b) of the Internal Revenue Code (IRS) of 1986, and Section 1917(b)(5)(A)(B)(iii)(C) of the Social Security Act (42 U.S.C. 1396p(b)(5) (A)(B)(iii)(C)) are incorporated by reference. This rule does not cover amendments to the Deficit Reduction Act (DRA) of 2005, (Section 6021), § 7702B(b) of the Internal Revenue Code (IRS) of 1986, and Section 1917(b)(5)(A)(B)(iii)(C) of the Social Security Act (42 U.S.C. 1396p(b)(5) (A)(B)(iii)(C)) that were promulgated later than the effective date of this rule. A copy of the relevant portions of the Deficit Reduction Act (DRA) of 2005, (Section 6021), § 7702B(b) of the Internal Revenue Code (IRS) of 1986, and Section 1917(b)(5)(A)(B)(iii)(C) of the Social Security Act (42 U.S.C. 1396p(b)(5) (A)(B)(iii)(C)) may be examined at any state publications depository library. For additional information regarding how relevant portions of the DRA can be obtained or examined contact the Rates and Forms Supervisor, Colorado Division of Insurance, 1560 Broadway, Suite 850, Denver, CO 80202. Colorado Insurance Regulation 4-4-1, 3 CCR 702-4 published by the Colorado Division of Insurance shall mean Colorado Insurance Regulation 4-4-1, 3 CCR 702-4 as published on the effective date of this regulation and does not include later amendments to or editions of Colorado Insurance Regulation 4-4-1, 3 CCR 702-4.7 Colorado Insurance Regulation 4-4-1, 3 CCR 702-4 may be examined during regular business hours at the Colorado Division of Insurance, 1560 Broadway, Suite 850, Denver, Colorado 80202 or by visiting the Colorado Division of Insurance Website at www.dora.state.co.us/insurance/. Certified copies of Colorado Insurance Regulation 4-4-1, 3 CCR 702-4 are available from the Division of Insurance for a fee.
Section 10 Severability If any provision of this regulation or application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 11 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 12 Effective Date This regulation shall be effective February 1, 2013.
Section 13 History New regulation effective January 1, 2010.
Amended regulation effective July 1, 2012.
Amended regulation effective February 1, 2013.
Appendix A IMPORTANT NOTICE REGARDING YOUR POLICY'S LONG-TERM CARE PARTNERSHIP STATUS (Please keep this Notice with Your Policy or Certificate) The Colorado Long-Term Care Partnership (LTCP) Program is a partnership between Colorado and private insurers of long-term care insurance policies. The LTCP Program became effective on January 1, 2008 and is provided in accordance with the Deficit Reduction Act of 2005 (P.L. 109-171). Notice of Partnership Policy Status. Your long-term care insurance policy is intended to qualify as a Partnership Policy under the Colorado LTCP Program as of your policy's effective date. Medicaid Asset Protection and Estate Recovery Provided. Long-term care insurance is an important tool that helps individuals prepare for future long-term care needs. Partnership Policies provide an additional level of protection. In particular, such policies permit individuals to protect assets from spend- down requirements under the state's Medicaid program if assistance under this program is ever needed and they otherwise qualify for Medicaid.
Specifically, the asset eligibility and recovery provisions of the Medicaid program of Colorado are applied by disregarding an amount of assets which is equal to the amount of insurance benefits you have received from your Partnership Policy. For example, if you receive $200,000 in insurance benefits from your Partnership Policy, you generally would be able to retain $200,000 of assets above and beyond the amount of assets normally permitted for Medicaid eligibility. Likewise, Medicaid would disregard up to $200,000 of the same assets in your estate at the time of your death which can then be passed on to your chosen beneficiaries.
Other Medicaid eligibility requirements regarding disability determination, assets and income must be met. Medicaid eligibility requirements may vary from one state to another and may change over time. Additional Consumer Protections. In addition to providing Medicaid asset protection, your Partnership Policy has other important features. Under the rules governing The Colorado LTCP Program, your Partnership Policy must be a qualified long-term care insurance contract under federal tax law, and as such the insurance benefits you receive from the policy generally will be subject to beneficial income tax treatment. (Please note that a policy can be a qualified long-term care insurance contract under federal tax law, with the same beneficial income tax treatment, even if it is not a Partnership Policy.) In order to qualify for the Partnership Program, Colorado requires a minimum purchase of inflation protection, which varies by age of purchase:
• For individuals under the age of 61, the policy must provide compound annual inflation protection. Annual compound inflation protection includes: annual compound inflation protection based upon a fixed percentage; or a policy that covers at least 80% of actual or reasonable charges and does not include a maximum specified daily indemnity amount or limit; or annual compound inflation protection based upon changes in the Consumer Price Index (CPI). Guaranteed/future purchase option is not acceptable.
• For individuals ages 61 through 75, the policy must include some level of inflation protection. Policies with an annual inflation protection benefit that meets or exceeds the requirements of under the age of 61 above or which contain simple inflation protection based on a fixed percentage are acceptable. Guaranteed/future purchase option is not acceptable. • For individuals ages 76 and older, inflation protection is optional. • Include the following bracketed text only if step-down inflation option is available: [A policy that qualified as a partnership policy at time of issue will not lose that status solely because of changes to its inflation protection benefit which occur on or after July 1, 2012, provided that the inflation protection benefit meets the minimum requirements established for certain ages.] What Could Disqualify Your Policy as a Partnership Policy? If you make any changes to your policy or certificate, such changes could affect whether your policy or certificate continues to qualify as a Partnership Policy. Before you make any changes, you should consult with the issuer of your policy to determine the effect of a proposed change. In addition, if you move to a state that does not maintain a Partnership Program or does not recognize your policy as a Partnership Policy, you would not receive Medicaid asset protection in that state. Also, changes in federal or state law could affect the Medicaid asset protection available with respect to your Partnership Policy. Additional Information. Should you have questions regarding the Colorado Long-Term Care Insurance Partnership Program policy you are considering purchasing or have purchased or questions about long- term care insurance in general, please contact the Colorado Division of Insurance at 303-894-7499 or 1- 800-930-3745.
If you have general questions about Colorado's LTCP Program and how it works with Colorado’s Medicaid laws, please contact the Colorado Department of Health Care Policy and Financing which administers the Medicaid program at 303-866-3513 or 800-221-3943 or your local county department of health/social services.
This form and all benefit statements received should be kept with your policy. Appendix B QP CHECKLIST (LONG-TERM CARE PARTNERSHIP PROGRAM)
Under Section 1917(b)(5)(B)(iii) of the Social Security Act (42 U.S.C. 1396p(b)(5)(B)(iii)), the Insurance Commissioner of a state implementing a Long-Term Care Partnership (LTCP) Program may certify that long-term care insurance policies (including certificates issued under a group insurance contract) covered under the LTCP Program meet certain consumer protection requirements, and policies so certified are deemed to satisfy such requirements. These consumer protection requirements are set forth in Section 1917(b)(5)(A) of the Social Security Act (42 U.S.C. 1396p(b)(5)(A)) In order to provide the Colorado Insurance Commissioner with information necessary to provide a certification for policies, the QP Checklist will need to be submitted with respect to policy forms that may be covered under the Colorado LTCP Program. The actual policy forms will need to be submitted with the QP checklist.
An insurance company may request certification of policies from time to time and, accordingly, may submit this QP checklist with the policy forms, e.g., as it introduces new LTCP insurance policy forms for issuance.
I. GENERAL INFORMATION A. Name of Issuer Telephone Number Address City State Zip Code B. Name of an Employee of Issuer Who Will be the Contact Person for Information Relating to this Form Telephone Number Address City State Zip Code Email Address (if available)
Policy Form Number(s) (or other identifying information such as certificate series) and edition date for policies covered by this QP checklist:
Policy Information Date Specimen copies of each of the above policy forms, including any riders and endorsements, shall be provided with the checklist.
II. APPLICABLE PROVISIONS OF THE 2000 MODEL REGULATION AND 2000 MODEL ACT Please answer each of the questions below with respect to the policy forms identified in Section I above. For purposes of answering the questions below, any provision of the 2000 Model Regulation or 2000 Model Act listed below shall be treated as including any other provision of the 2000 Model Regulation or 2000 Model Act necessary to implement the provision.
Are the following requirements of the 2000 Model Regulation met with respect to all policies (including certificates issued under a group insurance contract) intended to be covered under the Qualified Partnership Program plan, policy or certificate that are issued on each of the policy forms identified in Section I above? Yes No NA A. CO Ins Reg 4-4-1 Section 6A (relating to guaranteed renewal or noncancellability).
B. CO Ins Reg 4-4-1, Section 6B (relating to prohibitions on limitations and exclusions) other than paragraph CO Ins Reg 4-4-1, Section 6B.7 thereof.
C. CO Ins Reg 4-4-1, Section 6C (relating to extension of benefits).
D. CO Ins Reg 4-4-1, Section 6D (relating to continuation or conversion of coverage).
E. CO Ins Reg 4-4-1, Section 6E (relating to discontinuance and replacement of policies).
F. CO Ins Reg 4-4-1, Section 7 (relating to unintentional lapse).
G. CO Ins Reg 4-4-1, Section 8 (relating to required disclosure provisions), H. CO Ins Reg 4-4-1, Section 9 (relating to required disclosure of rating practices to consumer).
I. CO Ins Reg 4-4-1, Section 11 (relating to prohibitions against post-claims underwriting).
J. CO Ins Reg 4-4-1, Section 12 (relating to minimum standards for home health and community care benefits).
K. CO Ins Reg 4-4-1, Section 13 (relating to application forms and replacement coverage).
L. CO Ins Reg 4-4-1, Section 14 (relating to reporting requirements).
M. CO Ins Reg 4-4-1, Section 20 (relating to filing requirements for advertising).
N. CO Ins Reg 4-4-1, Section 21 (relating to standards for marketing).
O. CO Ins Reg 4-4-1, Section 22 (relating to suitability).
P. CO Ins Reg 4-4-1, Section 23 (relating to prohibition against preexisting conditions and probationary periods in replacement policies or certificates).
Q. CO Ins Reg 4-4-1, Subsection 29.C relating to contingent nonforfeiture benefits, if the policyholder declines the offer of nonforfeiture provision described in section 7702B(g)(4) of the Internal Revenue Code of 1986 (26 U.S.C. 7702B(g)(4)).
R. CO Ins Reg 4-4-1, Section 24 (relating to standard format outline of coverage).
S. CO Ins Reg 4-4-1, Section 25 (relating to requirement to deliver shopper’s guide).
T. CO Ins Reg 4-4-1, Subsection 8M (relating to requirements for certificates under group plans).
U. CO Ins Reg 4-4-4, Inflation protection meets the requirements in Subsection 4B.
Are the following requirements of the 2000 Model Act met with respect to all policies (including certificates issued under a group insurance contract) intended to be covered under the Qualified Partnership Program plan, policy or certificate that are issued on each of the policy forms identified in section I. above? Yes No NA A. CRS 10-19-108 (relating to preexisting conditions).
B. CRS 10-19-109 (relating to prior hospitalization).
C. CRS 10-19-113.4(3) (relating to contingent nonforfeiture benefits).
D. CRS 10-19-111 (relating to right to return policy).
E. CRS 10-19-112(1) (relating to outline of coverage).
F. CRS 10-19-112(7) (relating to policy summary).
G. CRS 10-19-112(8) (relating to monthly reports on accelerated death benefits).
H. CRS 10-19-113.3 (relating to incontestability period). In order for a policy to be covered under the Colorado LTCP Program, the answers to all questions above should be "yes" (or "N/A" where all requirements with respect to a provision above are not applicable). If answers differ between policy forms (e.g., a requirement would be answered "Yes" for one form and "N/A" for another), you should use separate issuer certification forms for such policies.
III. CERTIFICATION I hereby certify that the answers, accompanying documents, and other information set forth herein are, to the best of my knowledge and belief, true, correct, and complete. Name of Officer of the Issuer Title Signature Date Regulation 4-4-5 PROMPT INVESTIGATION OF LONG-TERM CARE INSURANCE CLAIMS INVOLVING UTILIZATION REVIEW AND DENIAL OF BENEFITS AND RULES RELATED TO INTERNAL CLAIMS AND APPEALS PROCESSES Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Compliance Requirements Section 6 Form and Manner of Notices Section 7 Standard Utilization Review Section 8 Expedited Utilization Review Section 9 Peer-to-Peer Conversation Section 10 First Level Review Section 11 General Requirements for First Level and Voluntary Second Level Review Meetings Section 12 Expedited Review of an Adverse Determination Section 13 Severability Section 14 Enforcement Section 15 Effective Date Section 16 History Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of §§ 10-1-109, 10-3-1110, 10-16-109, and 10-16-113(2) and (10), C.R.S. Section 2 Scope and Purpose The purpose of this regulation is to set forth guidelines for insurer compliance with the provisions of §§ 10-3-1104(1)(h) and 10-16-113, C.R.S., in situations involving utilization review and certain denials of long-term care insurance benefits as described herein. Among other things, § 10-3-1104(1)(h), C.R.S., requires insurers to adopt and implement reasonable standards for the prompt investigation of claims arising from long-term care policies; promptly provide a reasonable explanation of the basis in the long- term care policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement; and refrain from denying a claim without conducting a reasonable investigation based upon all available information.
This regulation is designed to provide minimum standards for handling appeals and grievances involving utilization review determinations, certain denials of benefits for treatments excluded by long-term care policies, and as otherwise required by § 10-16-113, C.R.S. Section 3 Applicability The provisions of this regulation shall apply to all long-term care insurance policies marketed and issued in Colorado. Where a decision concerning a claim is not based on utilization review, an insurer is not required to use the specific procedures outlined in this regulation. However, this regulation shall apply to an insurer’s denial of a benefit because the treatment is excluded by the long-term care policy if the covered person presents evidence from a medical professional that there is a reasonable medical basis that the contractual exclusion does not apply. Nothing in this regulation shall be construed to supplant any appeal or due process rights that a person may have under federal or state law. Section 4 Definitions A. “Activities of daily living” mean, for the purposes of this regulation, bathing, continence, dressing, eating, toileting, and transferring.
B. “Adverse determination” means, for the purposes of this regulation:
1. A determination by an insurer or its designee that a request for a pre-service or post- service benefit has been reviewed and, based upon the information provided, does not meet the insurer’s requirement for medical necessity, or that the benefit is not appropriate, effective, efficient, is not provided in or at the appropriate health care setting or level of care, and is therefore denied, reduced, or terminated;
2. A denial for a benefit excluded by a long-term care policy for which the covered person is able to present evidence from a medical professional that there is a reasonable medical basis that the contractual exclusion does not apply to the denied benefit; and/or 3. A determination that the covered person has not met the necessary benefit trigger criteria.
C. “Ambulatory review” means, for the purposes of this regulation, a utilization review of health care services performed or provided in an outpatient setting.
D. “Applicable non-English language” means, for the purposes of this regulation, with respect to an address in any Colorado county to which a notice is sent, a non-English language that ten percent (10%) or more of the population residing in the county is only literate in as determined by the Secretary of the United States Department of Health and Human Services.
E. “Benefit trigger” means, for the purposes of this regulation, a contractual provision in the covered person’s long-term care insurance policy conditioning the payment of benefits on a determination of the covered person’s ability to perform activities of daily living; on cognitive impairment; or, for tax-qualified long-term care policies, that the covered person is a chronically ill individual.
F. “Case management” means, for the purposes of this regulation, a coordinated set of activities conducted for individual patient management of serious, complicated, protracted, or other health conditions.
G. “Chronically ill individual” means, for the purposes of this regulation, any individual who has been certified by a licensed health care professional as:
1. Being unable to perform, without substantial assistance from another individual, at least two (2) activities of daily living for a period of at least ninety (90) days due to a loss of functional capacity; or 2. Requiring substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment.
H. “Clinical peer” means, for the purposes of this regulation, a physician or other health care professional who holds a non-restricted license in a state of the United States and in the same or similar specialty as typically manages the medical condition or treatment under review.
I. “Complaint” means, for the purposes of this regulation, a written communication primarily expressing a grievance.
J. “Covered person” shall have the same meaning as found at § 10-16-102(15), C.R.S.
K. “Date of receipt of a notice” means, for the purposes of this regulation, the date that shall be calculated to be no less than three (3) calendar days after the date the notice is postmarked by the insurer.
L. “Designated representative” means, for the purposes of this regulation:
1. A person, including the treating health care professional or a person authorized by section 4.L.2., to whom a covered person has given express written consent to represent the covered person;
2. A person authorized by law to provide substituted consent for a covered person, including but not limited to a guardian, agent under a power of attorney, a proxy, or a designee of the Colorado Department of Health Care Policy and Financing;
3. In the case of an urgent care request, a health care professional with knowledge of the covered person’s medical condition; and/or 4. A family member of the covered person or the covered person’s treating health care professional only when the covered person is unable to provide consent.
M. “Discharge planning” means, for the purposes of this regulation, the formal process for determining, prior to discharge from a facility or service, the coordination and management of the care that a covered person receives following discharge from a facility.
N. “Facility” means, for the purposes of this regulation, a facility licensed or otherwise authorized to furnish health or long-term care services.
O. “Grievance” means, for the purposes of this regulation, a circumstance regarded as a cause for protest, including the protest of an adverse determination.
P. “Health care professional” means, for the purposes of this regulation, a physician or other health care practitioner licensed, accredited, or certified to perform specified health care services consistent with state law.
Q. “Health care services” shall have the same meaning as found at § 10-16-102(33), C.R.S.
R. “Insurer’s receipt” means, for the purposes of this regulation, the receipt date as date-stamped by the insurer in a legible manner; an electronically-formatted receipt date; a facsimile transmission date; or a receipt date imprinted on the document in some type of permanent manner. The earliest receipt date on the document will be considered the insurer’s receipt date.
S. “Long-term care insurance” shall have the same meaning as found at § 10-19-103(5), C.R.S. For the purposes of this regulation, it includes the term “long-term care policy”.
T. “Medical professional” means, for the purposes of this regulation, an individual licensed pursuant to the “Colorado Medical Practice Act”, article 36 of title 12, C.R.S.
U. “Prospective review” means, for the purposes of this regulation, a utilization review conducted prior to an admission or course of treatment. Also known as a “pre-service review”.
V. “Retrospective review” means, for the purposes of this regulation, utilization review conducted after services have been provided to a covered person, but does not include the review of a claim that is limited to an evaluation of reimbursement levels, veracity of documentation, accuracy of coding, or adjudication for payment. Also known as a “post-service review”.
W. “Voluntary second level review” means, for the purposes of this regulation, a request for a review of an adverse determination from a first-level appeal which is only available to persons covered under a group long-term care policy.
X. “Urgent care request” means, for the purposes of this regulation:
1. A request for a health care service or course of treatment with respect to which the time periods for making a non-urgent care request determination that could seriously jeopardize the life or health of the covered person or the ability of the covered person to regain maximum function; or for a covered person with a physical or mental disability, creates an imminent and substantial limitation on this or her existing ability to live independently.
2. Except as provided in section 4.X.3., in determining whether a request is to be treated as an urgent care request, a person acting on behalf of the insurer shall apply the judgment of a prudent layperson who possesses an average knowledge of health and medicine.
3. Any request that a physician with knowledge of the covered person’s medical condition determines and states is an urgent care request within the meaning of section 4.X.1. shall be treated as an urgent care request.
Y. “Utilization review” means, for the purposes of this regulation, a set of formal techniques designed to monitor the use of, or evaluate the medical necessity, appropriateness, efficacy, or efficiency of, health care services or settings. Techniques include ambulatory review, prospective review, second opinion, certification, concurrent review, case management, discharge planning, and retrospective review. It also includes reviews of a covered person's medical circumstances when necessary to determine if a policy exclusion applies in a given situation. Section 5 Compliance Requirements A. Pursuant to § 10-3-1104(1)(h)(IV), C.R.S., an insurer that does not use a procedure for investigating claims involving utilization review consistent with this regulation shall be deemed to be in violation of the requirement under the unfair competition and deceptive practice insurance statutes of Colorado that an insurer refrain from denying a claim without conducting a reasonable investigation based upon all available information.
B. Pursuant to § 10-3-1104(1)(h)(III), C.R.S., an insurer using standards in the review of claims involving utilization review that are not in compliance with the rules contained in this regulation shall be deemed to be in violation of the requirement under the unfair competition and deceptive practice insurance statutes of Colorado that an insurer use reasonable standards for the prompt investigation of claims.
C. Pursuant to § 10-3-1104(1)(h)(II), C.R.S., an insurer that does not investigate claims involving utilization review within the time frames set out in this regulation shall be deemed to be in violation of the requirement under the unfair competition and deceptive practice insurance statutes of Colorado that an insurer promptly investigate claims.
D. Pursuant to § 10-3-1104(1)(h)(XIV), C.R.S., an insurer that does not follow the procedures for explaining the basis of a utilization review decision set forth in this regulation shall be deemed to be in violation of the requirement under the unfair competition and deceptive practice insurance statutes of Colorado that an insurer promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim.
E. Pursuant to § 10-3-1104(1)(h)(IV), C.R.S., an insurer that does not allow an appeal, consistent with the procedures set forth in this regulation, of a benefit denial for a treatment excluded by the long-term care policy when the covered person presents evidence from a medical professional that there is a reasonable medical basis that a contractual exclusion does not apply shall be deemed to be in violation of the requirement under the unfair competition and deceptive practice insurance statutes of Colorado that an insurer refrain from denying a claim without conducting a reasonable investigation based upon all available information.
E. Insurers shall avoid conflicts of interest to ensure all benefit reviews and appeals are adjudicated in a manner designed to guarantee the independence and impartiality of the persons involved in making the decision. With respect to any person involved in the review of benefit requests and/or the review of appeals, decisions regarding hiring, compensation, termination, or promotion shall not be made based upon the likelihood that the person will support the denial of benefits. Section 6 Form and Manner of Notices A. Insurers shall provide all relevant notices in a culturally and linguistically appropriate manner as follows:
1. In the English versions of all notices, a statement prominently displayed in any applicable non-English language clearly indicating how to access the language services provided by the insurer; and 2. Shall provide, upon request, a notice in any applicable non-English language and shall allow the covered person the option of electing to receive all subsequent notices in the requested applicable non-English language.
B. Insurers shall provide oral language services in any applicable non-English language, providing assistance with answering questions about the filing of benefit requests and appeals. Section 7 Standard Utilization Review A. An insurer shall maintain written procedures pursuant to this section for making utilization review decisions and for notifying covered persons of its decisions. For purposes of this section, "covered person" includes the designated representative of a covered person.
B. Prospective review determinations.
1. Time period for determination and notification.
2. Failure to meet the insurer’s filing procedures.
3. For an adverse determination regarding a prospective review decision that occurs during a covered person’s facility stay or course of treatment, also known as concurrent review, the health care service that is the subject of an adverse determination shall continue to be covered according to the provisions of the long-term care policy until the covered person has been notified of the determination by the insurer.
4. The requirements of section 7.B. apply to all written requests involving utilization review received by the insurer which are submitted by a covered person or a facility and/or health care professional requesting a determination of coverage for a specific health care service for the covered person.
C. Retrospective review determinations.
1. For retrospective review determinations, an insurer shall make the determination and notify the covered person and the covered person’s facility and/or health care professional of the determination within a reasonable period of time, but in no event later than thirty (30) calendar days after the insurer’s receipt of the benefit request. Whenever the determination is an adverse determination, the insurer shall provide notice of the adverse determination to the covered person in accordance with section 7.E.
2. Time period for determination and notification.
D. Calculation of time periods.
1. For purposes of calculating the time periods within which a determination is required to be made under sections 7.B. and 7.C., the time period shall begin on the date of the insurer’s receipt of the request in accordance with the insurer’s procedures for filing a request without regard to whether all of the information necessary to make the determination accompanies the request.
2. Extensions.
E. Requirements for adverse determination notifications.
1. Except for the adverse determinations described section 7.E.2., a notification of an adverse determination under this section shall, in a manner calculated to be understood by the covered person, set forth:
2. For denials based on a contractual exclusion, the adverse determination notice shall include the long-term care policy’s specific exclusion language and shall advise the covered person of the right to appeal the applicability of the exclusion by providing evidence from a medical professional that there is a reasonable medical basis that the contractual exclusion does not apply.
3. An insurer shall provide the notice required under this section in writing, either on paper or electronically.
4. All written adverse determinations subject to the requirements of this regulation shall be reviewed and signed by a licensed physician familiar with standards of care in Colorado.
5. The notice of the initial adverse determination shall include information concerning the covered person's ability to request an internal and external expedited review on a concurrent basis. This information may be included in the letter or other notice advising the covered person of the finding of an adverse determination, or it may be included as a separate document within the same mailing.
F. The requirements of section 7 apply to all written requests involving standard utilization review received by the insurer which are submitted by a covered person or a facility and/or health care professional requesting a determination of coverage for a specific health care service for the covered person.
Section 8 Expedited Utilization Review A. Procedures.
1. An insurer shall establish written procedures in accordance with this section for receiving benefit requests from covered persons and for making and notifying covered persons of expedited utilization review with respect to urgent care requests. For purposes of this section, "covered person" includes the designated representative of a covered person.
2. Notification requirements.
B. Urgent care requests.
1. Notification requirements for insurer determinations.
2. Notification requirements for insufficient information.
C. Concurrent urgent care review requests.
1. For concurrent urgent care review requests involving a request by the covered person to extend the course of treatment beyond the initial period of time or the number of treatments authorized, if the request is made at least twenty-four (24) hours prior to the expiration of the authorized period of time or authorized number of treatments, the insurer shall make a determination with respect to the request and notify the covered person and the covered person’s facility and/or health care professional of the determination, whether it is an adverse determination or not, as soon as possible, taking into account the covered person’s medical condition, but in no event more than twenty-four (24) hours after the insurer’s receipt of the request.
2. If the insurer’s determination is an adverse determination, the insurer shall provide notice of the adverse determination in accordance with section 8.E. The health care service that is the subject of an adverse determination shall continue to be covered according to the provisions of the long-term care policy until the covered person has been notified of the determination by the insurer.
D. For purposes of calculating the time periods within which a determination is required to be made under sections 8.B. or 8.C., the time period shall begin on the date of the insurer’s receipt of the request in accordance with the insurer’s procedures established for filing a request without regard to whether all of the information necessary to make the determination accompanies the request.
E. Adverse determination notification requirements.
1. A notification of an adverse determination under this section shall, in a manner calculated to be understood by the covered person, set forth:
2. Additional notification requirements.
3. All written adverse determinations shall be reviewed and signed by a licensed physician familiar with standards of care in Colorado.
4. The notice of the initial adverse determination shall include information concerning the covered person's ability to request an internal and external expedited review on a concurrent basis. This information may be included in the letter or other notice advising the covered person of the finding of an adverse determination, or it may be included as a separate document within the same mailing.
F. The requirements of section 8 apply to all written requests involving expedited utilization review received by the insurer which are submitted by a covered person or a facility and/or health care professional requesting a determination of coverage for a specific health care service for the covered person.
Section 9 Peer-to-Peer Conversation A. In a case involving a prospective review determination, an insurer shall give the facility and/or health care professional rendering the service an opportunity to request, on behalf of the covered person, a peer-to-peer conversation regarding an adverse determination by the reviewer making the adverse determination. Such a request may be made either orally or in writing.
B. The peer-to-peer conversation shall occur within five (5) calendar days of the insurer’s receipt of the request and shall be conducted between the facility and/or health care professional rendering the health care service and the reviewer who made the adverse determination or a clinical peer designated by the reviewer if the reviewer who made the adverse determination cannot be available within five (5) calendar days.
C. If the peer-to-peer conversation does not resolve the difference of opinion, the adverse determination may be appealed by the covered person. A peer-to-peer conversation is not a prerequisite to a first level review or an expedited review of an adverse determination.
D. For the purposes of § 10-3-1104(1)(i), C.R.S., a request for a peer-to-peer conversation shall not be considered a complaint.
Section 10 First Level Review A. General requirements.
1. An insurer shall establish written procedures for the review of an adverse determination that does not involve an urgent care request in compliance with § 10-16-113, C.R.S., and this regulation. The procedures shall specify whether a first level review request must be in writing or may be submitted orally. The procedures shall also allow the covered person to identify the facility and/or health care professionals to whom the insurer shall send a copy of the review decision.
2. A first level review shall be available to, and may be initiated by, the covered person. For purposes of this section, “covered person” includes the designated representative of a covered person.
3. Pursuant to § 10-3-1104(1)(i), C.R.S., all written requests for a first level review shall be entered into the insurer’s complaint record.
4. Within 180 calendar days after the date of receipt of a notice of an adverse determination sent pursuant to sections 7 or 8 or after the date of receipt of notification of a benefit denied due to a contractual exclusion, a covered person may file a grievance with the insurer requesting a first level review of the adverse determination. In order to secure a first level review after the receipt of the notification of a benefit denied due to a contractual exclusion, the covered person must be able to provide evidence from a medical professional that there is a reasonable medical basis that the exclusion does not apply. If the deadline for filing a request ends on a weekend or holiday, the deadline shall be extended to the next business day.
5. Full and fair review.
B. Individual long-term care policies.
1. Covered persons shall be provided a choice between a written appeal review or a review meeting for their first level appeal.
2. Written appeal reviews shall comply with the requirements of section 10.C.
3. Review meetings shall comply with the requirements of section 11. The covered person’s right to a fair review shall not be made conditional on the covered person’s appearance at the review meeting.
4. The covered person is entitled to a single internal appeal review.
C. Conduct of first level written appeal reviews.
1. First level reviews shall be evaluated by a physician who shall consult with an appropriate clinical peer(s), unless the reviewing physician is a clinical peer. The physician and clinical peer(s) shall not have been involved in the initial adverse determination. However, a person that was previously involved with the denial may answer questions.
2. In conducting a review under this section, the reviewer(s) shall take into consideration all comments, documents, records, and other information regarding the request for services or benefits submitted by the covered person without regard to whether the information was submitted or considered in making the initial adverse determination. If the appeal is pursuant to § 10-16-113(1)(c), C.R.S., regarding the applicability of a contractual exclusion, the determination shall be made on the basis of whether the contractual exclusion applies to the denied benefit.
D. Covered person’s rights for first level written appeal review for individual and group long-term care policies. A covered person is entitled to:
1. Submit written comments, documents, records, and other material relating to the request for benefits for the reviewer(s) to consider when conducting the review. For review of a benefit denial due to a contractual exclusion, the covered person shall provide evidence from a medical professional that there is a reasonable medical basis that the exclusion does not apply; and 2. Receive from the insurer, upon request and free of charge, reasonable access to, and copies of all documents, records, and other information relevant to the covered person’s request for benefits. A document, record, or other information shall be considered “relevant” to a covered person’s request for benefits if the document, record, or other information:
3. A covered person does not have the right to be present for the written appeal review.
E. Notification requirements.
1. An insurer shall notify and issue a decision in writing or electronically to the covered person within the time frames provided in section 10.E.2.
2. With respect to a request for a first level review of an adverse determination involving a prospective review request, the insurer shall notify and issue a decision within a reasonable period of time that is appropriate given the covered person’s medical condition, but no later than thirty (30) calendar days after the date of the insurer’s receipt of the grievance containing a request for the first level review.
3. With respect to a request for a first level review of an adverse determination involving a retrospective review request, the insurer shall notify and issue a decision within a reasonable period of time, but no later than sixty (60) calendar days after the date of the insurer’s receipt of a request for the first level review.
F. For purposes of calculating the time periods within which a determination is required to be made and notice provided under section 10.E.3., the time period shall begin on the date of the insurer’s receipt of the grievance requesting the review provided in accordance with the insurer’s procedures for filing a request without regard to whether all of the information necessary to make the determination accompanies the request.
G. The decision issued pursuant to section 10.E. shall set forth in a manner calculated to be understood by the covered person:
1. The name, title and qualifying credentials of the physician evaluating the appeal, and the qualifying credentials of the clinical peer(s) with whom the physician consulted. For the purposes of section 10, the physician and consulting clinical peers shall be called “the reviewers”;
2. A statement of the reviewers’ understanding of the covered person’s request for a review of an adverse determination;
3. The reviewers’ decision in clear terms; and 4. A reference to the evidence or documentation used as the basis for the decision.
H. A first level review decision involving an adverse determination issued pursuant to section 10.E. shall include, in addition to the requirements of section 10.G.:
1. The specific reason or reasons for the adverse determination, including the specific policy provisions and medical rationale;
2. A statement that the covered person is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant, as the term “relevant” is defined in section 10.D.2., to the covered person’s benefit request;
3. If the reviewers relied upon an internal rule, guideline, protocol or other similar criterion to make the adverse determination, either the specific rule, guideline, protocol, or other similar criterion or a statement that a specific rule, guideline, protocol, or other similar criterion was relied upon to make the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided free of charge to the covered person upon request;
4. If the adverse determination is based on a medical necessity or similar exclusion or limitation, either an explanation of the scientific or clinical judgment for making the determination, applying the terms of the long-term care policy to the covered person’s medical circumstances or a statement that an explanation will be provided to the covered person free of charge upon request;
5. Information sufficient for the covered person to be able to identify the claim involved and a statement describing the availability, upon request, of the diagnosis code and its corresponding meaning, and the treatment code and its corresponding meaning;
6. If applicable, instructions for requesting:
7. A description of the procedures for obtaining an independent external review of the adverse determination pursuant to section 5 of Colorado Insurance Regulation 4-2-21.
8. For group long-term care policies, a description of the process to obtain a voluntary second level review including:
Section 11 General Requirements for First Level and Voluntary Second Level Review Meetings A. An insurer shall establish procedures for a review process in which the covered person has the right to appear in person or by telephone conference at the review meeting before a health care professional (reviewer) or, if offered by the insurer, a review panel of health care professionals, selected by the insurer. The procedures shall allow the covered person to identify the facility and/or health care professional(s) to whom the insurer shall send a copy of the review decision. The purpose of the review meeting process is to give the covered person the opportunity to explain his or her grievance and to provide any relevant evidence in support of his or her claim for benefits.
B. For purposes of this section, "covered person" includes the designated representative of a covered person.
C. A complaint record entry shall be made for all reviews meeting requests, pursuant to § 10-3- 1104(1)(i), C.R.S.
D. Covered person’s review request filing requirements.
1. For individual long-term care policies, the requirements of section 10.A.4. apply.
2. For group long-term care policies, within sixty (60) calendar days after the date of receipt of a notice of a first level review adverse determination, the covered person may file a request with the insurer requesting a voluntary second level review of the adverse determination. If the deadline for filing a request ends on a weekend or holiday, the deadline shall be extended to the next business day.
E. The covered person’s right to a fair review shall not be made conditional on the covered person’s appearance at the review meeting.
F. Insurer’s requirements.
1. The adverse determination or, with respect to a voluntary second level review of a first level review decision, the denial shall be reviewed by a health care professional (reviewer) or, if offered by the insurer, a review panel of health care professionals, who have appropriate expertise in relation to the case presented by the covered person.
2. The reviewer or each review panel member, shall meet the following criteria:
3. The reviewer or the review panel shall have the legal authority to bind the insurer to the reviewer’s or review panel’s decision.
G. The insurer's procedures for conducting a review meeting shall include the following:
1. The reviewer or review panel shall schedule and hold a review meeting within sixty (60) calendar days of the insurer’s receipt of a request from a covered person for a review meeting. The covered person shall be notified in writing at least twenty (20) calendar days in advance of the review meeting date. The insurer shall not unreasonably deny a request for postponement of the review meeting made by a covered person even if the postponement causes the review meeting to occur beyond the sixty (60) calendar day requirement.
2. Notice requirements. The notice to the covered person of the review meeting date shall include:
3. Insurers shall in no way discourage a covered person from requesting a face-to-face review meeting. Whenever a covered person has requested the opportunity to appear in person, the review meeting shall be held during regular business hours at a location reasonably accessible to the covered person, including accommodation for disabilities. In cases where a face-to-face meeting is not practical for geographic reasons, an insurer shall offer the covered person the opportunity to communicate, at the insurer's expense, by telephone conference call. An insurer may also offer video conferencing or other appropriate technology.
4. In conducting the review meeting, if applicable, the reviewer or review panel shall take into consideration all comments, documents, records, and other information regarding the request for benefits submitted by the covered person without regard to whether the information was submitted or considered in reaching the first level review decision. If the appeal is pursuant to § 10-16-113(1)(c), C.R.S., regarding the applicability of a contractual exclusion, the determination shall be made on the basis of whether the contractual exclusion applies to the denied benefit.
5. Full and fair review.
6. The reviewer or review panel shall issue a written decision, as provided in section 11.H., to the covered person within seven (7) calendar days of completing the review meeting.
7. For purposes of calculating the time periods within which a review meeting is required to be scheduled, the time period shall begin on the date of the insurer’s receipt of the request for a review meeting provided in accordance with the insurer’s procedures for filing a request without regard to whether all of the information necessary to make the determination accompanies the request.
H. A decision issued pursuant to section 11.G. shall include:
1. The name(s), title(s), and qualifying credentials of the reviewer or the members of the review panel;
2. A statement of the reviewer’s or the review panel’s understanding of the covered person’s request for review of an adverse determination;
3. The reviewer’s or the review panel’s decision in clear terms;
4. A reference to the evidence or documentation used as the basis for the decision;
5. For a decision issued involving an adverse determination:
Section 12 Expedited Review of an Adverse Determination A. An insurer shall establish written procedures for the expedited review of urgent care requests for grievances involving an adverse determination. The procedures shall allow a covered person to request an expedited review under this section orally or in writing. The procedures shall also allow the covered person to identify a facility and/or health care professional(s) to whom the insurer shall send a copy of the review decision. Pursuant to § 10-16-113.5(7), C.R.S., a covered person requesting an expedited external review may request such review concurrently with a request for an expedited internal review.
B. An expedited review shall be available to, and may be initiated by, the covered person or the facility and/or health care professional acting on behalf of the covered person. For purposes of this section, "covered person" includes the designated representative of a covered person.
C. Pursuant to § 10-3-1104(1)(i), C.R.S., all written requests for an expedited review shall be entered into the insurer’s complaint record.
D. Expedited appeal evaluations.
1. Expedited appeals shall be evaluated by an appropriate clinical peer(s) in the same or similar specialty as would typically manage the case under review. For the purposes of this section, the clinical peer(s) shall be called “the reviewer(s)”. The clinical peer(s) shall not have been involved in the initial adverse determination.
2. In conducting a review under this section, the reviewer(s) shall take into consideration all comments, documents, records, and other information regarding the request for services submitted by, or on behalf of, the covered person without regard to whether the information was submitted or considered in making the initial adverse determination.
E. Covered person’s rights. A covered person does not have the right to attend or to have a representative in attendance at the expedited review, but the covered person is entitled to:
1. Submit written comments, documents, records, and other materials relating to the request for benefits for the reviewer(s) to consider when conducting the review; and 2. Receive from the insurer, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the covered person’s request for benefits, as described in section 10.D.2.
F. In an expedited review, all necessary information, including the insurer's decision, shall be transmitted between the insurer and the covered person or the facility and/or health care professional acting on behalf of the covered person by telephone, facsimile or similar expeditious method available.
G. In an expedited review, an insurer shall make a decision and notify the covered person or the facility and/or health care professional acting on the covered person's behalf as expeditiously as the covered person's medical condition requires, but in no event more than seventy-two (72) hours after the insurer’s receipt of the request. If the expedited review is a concurrent review and an adverse determination is made, the health care service shall continue to be covered according to the provisions of the long-term care policy until the covered person has been notified of the determination by the insurer.
H. An insurer shall provide a written confirmation of its decision concerning an expedited review within three (3) calendar days of providing notification of that decision, if the initial notification was not in writing.
I. In the case of an adverse determination, the written decision shall comply with the requirements specified in sections 10.G. and 10.H. of this regulation.
J. For purposes of calculating the time periods within which a decision is required to be made under section 12.G., the time period within which the decision is required to be made shall begin on the date of the insurer’s receipt of the request in accordance with the insurer’s procedures for filing a request without regard to whether all of the information necessary to make the determination accompanies the request.
K. In any case where the expedited review process does not resolve a difference of opinion between the insurer and the covered person or the facility and/or health care professional acting on behalf of the covered person, the covered person or the facility and/or health care professional acting on behalf of the covered person may request an independent external review.
L. Retrospective adverse determinations are not eligible for the expedited review process. Section 13 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of the regulation shall not be affected. Section 14 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 15 Effective Date This regulation is effective on June 1, 2019.
Section 16 History New regulation effective June 1, 2019.
_________________________________________________________________________ Editor’s Notes 3 CCR 702-4 has been divided into smaller sections for ease of use. Versions prior to 09/01/2011 and rule history are located in the first section, 3 CCR 702-4. Prior versions can be accessed from the History link that appears above the text in 3 CCR 702-4. To view versions effective after 09/01/2011, select the desired part of the rule, for example 3 CCR 702-4 Series 4-1, or 3 CCR 702-4 Series 4-6. History [For history of this section, see Editor’s Notes in the first section, 3 CCR 702-4]