Authority: IC 27-8-12-7

Affected: IC 27-8-12

Sec. 4. (a) Group long term care insurance policies, certificates, or subscriber agreements issued in Indiana on or after the effective date of this article shall provide covered individuals with a basis for continuation or conversion of coverage.

(b) As used in this article, "basis for continuation of coverage" means a policy provision that maintains coverage under the existing group policy when such coverage would otherwise terminate and that is subject only to the continued timely payment of premium. Group policies that contain incentives to use certain providers or facilities, or both, and group policies that provide a restricted list of providers or facilities, or both, shall provide continuation of 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. The commissioner shall consider the differences between managed care and nonmanaged care plans, including, but not limited to, the following:

1. (1) Provider system arrangements.
2. (2) Service availability.
3. (3) Benefit levels.
4. (4) Administrative complexity.

(c) As used in this article, "basis for conversion of coverage" means a policy provision that requires that an individual:

1. (1) 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
2. (2) 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.

(d) As used in this article, "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 to, or contains incentives to use certain providers or facilities, or both, the commissioner, in making a determination as to the substantial equivalency of benefits, shall take into consideration the differences between managed care and nonmanaged care plans, including, but not limited to, the following:

1. (1) Provider system arrangements.
2. (2) Service availability.
3. (3) Benefit levels.
4. (4) Administrative complexity.

(e) In order to maintain uninterrupted coverage, written application for the converted policy must be made and the first premium due, if any, must be paid as directed by the insurer not later than thirty-one (31) days after:

1. (1) termination of coverage under the group policy; or
2. (2) the date notification of conversion rights is mailed to the certificate holder;

whichever is later. The converted policy shall be issued effective on the day following the termination of coverage under the group policy and shall be renewable annually.

(f) If the group policy from which conversion is made:

1. (1) did not replace 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; or
2. (2) 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.

(g) Continuation of coverage or issuance of a converted policy shall be mandatory, except where:

1. (1) termination of the individual's group coverage resulted from the individual's failure to make any required payment of premium or contribution when due; or

2. (2) 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:

   1. (A) providing benefits identical to those provided by the terminating coverage or providing benefits that the commissioner determines to be substantially equivalent to or in excess of the benefits provided by the terminating coverage;
   2. (B) the premium is calculated in a manner consistent with the requirements of subsection (f); and
   3. (C) the new policy provides coverage to all individuals previously covered under the replaced policy.

(h) Notwithstanding any other provision of this rule, a converted policy issued to an individual may provide for a reduction of benefits payable to an individual only if:

1. (1) at the time of conversion, the individual is covered by another long term care insurance policy that provides benefits on the basis of incurred expenses;
2. (2) the benefits provided by the other long term care policy together with the full benefits provided by the converted policy would result in payment of more than one hundred percent (100%) of the incurred expenses; and
3. (3) the reduction in benefits may only be included in the converted policy if the converted policy also provides for a premium decrease or refund that reflects the reduction in benefits payable.

(i) The converted policy may provide that the benefits payable under the converted policy, together with the benefits payable under the group policy from which conversion is made, shall not exceed those that would have been payable had the individual's coverage under the group policy remained in force and effect.

(j) Notwithstanding any other provision of this rule, any 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.

(Department of Insurance; 760 IAC 2-3-4; filed Oct 30, 1992, 12:00 p.m.: 16 IR 858; readopted filed Sep 14, 2001, 12:22 p.m.: 25 IR 531; filed Oct 7, 2004, 1:00 p.m.: 28 IR 566; readopted filed Nov 27, 2007, 4:01 p.m.: 20071226-IR-760070717RFA; readopted filed Nov 26, 2013, 3:43 p.m.: 20131225-IR-760130479RFA; readopted filed Nov 19, 2019, 9:18 a.m.: 20191218-IR-760190497RFA; readopted filed Nov 30, 2022, 11:39 a.m.: 20221228-IR-760220302RFA)