2605 POLICY PRACTICES AND PROVISIONS: CONTINUATION OR CONVERSION

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2605.1 Group long-term care insurance issued in the District of Columbia on or after December 16, 2005, shall provide covered individuals with a basis for continuation or conversion of coverage.

2605.2 Written application for a 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.

2605.3 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. If 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 that was replaced.

2605.4 Continuation of coverage or issuance of a converted policy shall be mandatory, except if:

(a) Termination of group coverage resulted from an individual's failure to make a required payment of premium or contribution when due; or

(b) The terminating coverage is replaced, not later than thirty-one (31) days after termination, by group coverage effective on the day following the termination of coverage if:

(1) The replacement group coverage provides benefits identical to or benefits determined by the Commissioner to be substantially equivalent to or in excess of those provided by the terminating coverage; and

(2) The premium for the replacement group coverage is calculated in a manner consistent with the requirements of subsection

2605.3.

2605.5 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 one hundred percent (100%) of incurred expenses. The provision may be included in the converted policy only if the converted policy also provides for a premium decrease or refund which reflects the reduction in benefits payable.

2605.6 A 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.

2605.7 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.

2605.8 For the purposes of this section, the phrase:

(a) "Basis for continuation of coverage" means a policy provision that maintains coverage under the existing group policy when the coverage would otherwise terminate and that is subject only to the continued timely payment of premium when due. Group policies that restrict provision of benefits and services 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 provider system arrangements, service availability, benefit levels, and administrative complexity;

(b) "Basis for conversion of coverage" means a policy provision under which an individual whose coverage under the group policy would otherwise terminate or has been terminated for any reason, including discontinuance of the group policy in its entirety or with respect to an insured class, and who has been continuously insured under the group policy (and any group policy that it replaced) for at least six (6)

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;

(c) “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. If the group policy from which conversion is made restricts provision of benefits and services to, or contains incentives to use certain providers or facilities, the 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 provider system arrangements, service availability, benefit levels, and administrative complexity; and

(d) “Managed-care plan” means 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.

SOURCE: Final Rulemaking published at 52 DCR 10902 (December 16, 2005); as amended by Final Rulemaking published at 55 DCR 3759 (April 11, 2008).