Wyo. Code R. 044-0002-37
General Agency, Board or Commission Rules
Chapter 37: Long-Term Care Regulation
Effective Date: 03/11/2003 to Current
Rule Type: Current Rules & Regulations
Reference Number: 044.0002.37.03112003
LONG-TERM CARE REGULATION
The purpose of this regulation is to implement Chapter 38 of the Wyoming Insurance Code, to promote the public interest, to promote the availability of long-term care insurance coverage, to protect applicants for long-term care insurance, as defined, from unfair or deceptive sales or enrollment practices, to facilitate public understanding and comparison of long-term care insurance coverages, and to facilitate flexibility and innovation in the development of long-term care insurance.
This regulation is issued pursuant to the authority vested in the Wyoming Insurance Commissioner under W.S. 26-2-110 and W.S. 26-38-101 through W.S. 26-38-106 of the Wyoming Insurance Code and W.S. 16-3-101, et seq., of the Wyoming Administrative Procedure Act.
Except as otherwise specifically provided, this regulation applies to all long-term care insurance policies delivered or issued for delivery in this state on or after the effective date hereof, by insurers; fraternal benefit societies; nonprofit health, hospital and medical service corporations; prepaid health plans, health maintenance organizations and all similar organizations.
For 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 W.S. 26-38-103 of the Wyoming Insurance Code.
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 persons, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.
(f) '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).
(g) 'Dressing' means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs.
(h) '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.
(i) '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.
(j) '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.
(k) 'Medicare' shall be defined as 'The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as Then Constituted or Later Amended,' or 'Title I, Part I of Public Law 89-97, as Enacted by the Eighty-Ninth Congress of the United States of America and popularly known as the Health Insurance for the Aged Act, as then constituted and any later amendments or substitutes thereof,' or words of similar import.
(l) 'Mental or nervous disorder' shall not be defined to include more than neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder.
(m) 'Personal care' means the provision of hands-on services to assist an individual with activities of daily living.
(n) 'Skilled nursing care,' 'intermediate care,' 'personal care,' 'home 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.
(o) 'Toileting' means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.
(p) 'Transferring' means moving into or out of a bed or wheelchair.
(q) All providers of services, including but not limited to 'nursing care facility,' 'skilled nursing facility,' 'extended care facility,' 'intermediate care facility,' 'convalescent nursing home,' 'personal care facility,' and 'home care agency' shall be defined in relation to the services and facilities required to be available and the licensure or degree status of those providing or supervising the services. The definition may require that the provider be appropriately licensed or certified.
(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 7 of this regulation.
(i) No such policy issued to an individual shall contain renewal provisions less favorable to the insured than 'guaranteed renewable.' However, the Commissioner may authorize nonrenewal on a statewide basis, on terms and conditions deemed necessary by the Commissioner, to best protect the interests of the insureds, if the insurer demonstrates:
(A) That renewal will jeopardize the insurer's solvency; or
(B) That:
(I) The actual paid claims and expenses have substantially exceeded the premium and investment income associated with the policies; and
(II) The policies will continue to experience substantial and unexpected losses over their lifetime; and
(III) The projected loss experience of the policies cannot be significantly improved or mitigated through reasonable rate adjustments or other reasonable methods; and
(IV) The insurer has made repeated and good faith attempts to stabilize loss experience of the policies, including the timely filing for rate adjustments.
(ii) 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.
(iii) 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.
(b) Limitations and Exclusions. No policy may be delivered or issued for delivery in this state as long-term care insurance if such policy limits or excludes coverage by type of illness, treatment, medical condition or accident, except as follows:
(i) Preexisting conditions or diseases;
(ii) Mental or nervous disorders; however, this shall not permit exclusion or limitation of benefits on the basis of Alzheimer's Disease;
(iii) Alcoholism and drug addiction;
(iv) Illness, treatment or medical condition arising out of:
(A) War or act of war (whether declared or undeclared);
(B) Participation in a felony, riot or insurrection;
(C) Service in the armed forces or units auxiliary thereto;
(D) Suicide (sane or insane), attempted suicide or intentionally self-inflicted injury; or
(E) Aviation (this exclusion applies only to non-fare-paying passengers).
(v) Treatment provided in a government facility (unless otherwise required by law), services for which benefits are available under Medicare or other governmental program (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.
(vi) Payment for services provided outside the United States.
(c) Extension of Benefits. Termination of long-term care insurance shall be without prejudice to any benefits payable for institutionalization if such institutionalization began while the long-term care insurance was in force and continues without interruption after termination. Such 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.
(a) Renewability. Individual long-term care insurance policies shall contain a renewability provision. Such provision shall be appropriately captioned, shall appear on the first page of the policy, and shall clearly state the duration, where limited, of renewability and the duration of the term of coverage for which the policy is issued and for which it may be renewed.
(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 which 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, such premium charge shall be set forth in the policy, rider or endorsement.
(c) Payment of benefits. A long-term care insurance policy which 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 such terms and an explanation of such 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, such 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 containing any limitations or conditions for eligibility shall set forth a description of such 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 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 as contained in section 19(e) 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 as contained in section 19(e) that the policy is not intended to be a qualified long-term care insurance contract.
(a) All applications for long-term care insurance policies or certificates except those which are guaranteed issue shall contain clear and unambiguous questions designed to ascertain the health condition of the applicant.
(b) (i) If an application for long-term care insurance contains a question which 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.
(ii) If the medications listed in such 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:
(i) 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:
Caution: If your answers on this application are incorrect or untrue, [company] has the right to deny benefits or rescind your policy.
(ii) 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]
(iii) 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 which 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.
(a) A long-term care insurance policy or certificate may not, if it provides benefits for home health care services, limit or exclude benefits:
(i) By requiring that the insured/claimant would need skilled care in a skilled nursing facility if home health care services were not provided;
(ii) By requiring that the insured/claimant first or simultaneously receive nursing and/or therapeutic services in a home or community setting before home health care services are covered;
(iii) By limiting eligible services to services provided by registered nurses or licensed practical nurses;
(iv) 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.
(v) By requiring that the insured/claimant have an acute condition before home health care services are covered.
(vi) By limiting benefits to services provided by Medicare-certified agencies or providers.
(b) 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.
(a) No insurer may offer a long-term care insurance policy unless the insurer also offers to the policyholder the option to purchase a policy that provides for benefit levels to increase with benefit maximums or reasonable durations which are meaningful to account for reasonably anticipated increases in the costs of long-term care services covered by the policy. Insurers must offer to each policyholder, at the time of purchase, the option to purchase a policy with an inflation protection feature no less favorable than one of the following:
(i) Increases benefit levels annually [in a manner so that the increases are compounded annually];
(ii) Guarantees the insured individual the right to periodically increase benefit levels without providing evidence of insurability or health status so long as the option for the previous period has not been declined; or
(iii) Covers a specified percentage of actual or reasonable charges.
(b) Where the policy is issued to a group, the required offer in subsection (a) above shall be made to the group policyholder; except, if the policy is issued to a group defined in W.S. 26-38-103(D) other than to a continuing care retirement community, the offering shall be made to each proposed certificate holder.
(c) The offer in subsection (a) above shall not be required of expense incurred long-term care insurance policies.
(d) Insurers shall include the following information in or with the outline of coverage:
(i) A graphic comparison of the benefit levels of a policy that increases benefits over the policy period with a policy that does not increase benefits. The graphic comparison shall show benefit levels over at least a twenty (20) year period.
(ii) Any expected premium increases or additional premiums to pay for automatic or optional benefit increases. If premium increases or additional premiums will be based on the attained age of the applicant at the time of the increase, the insurer shall also disclose the magnitude of the potential premiums the applicant would need to pay at ages 75 and 85 for benefit increases.
An insurer may use a reasonable hypothetical, or a graphic demonstration, for the purposes of this disclosure.
(a) Question concerning replacement. Individual and direct response solicited long-term care insurance application forms shall include a question designed to elicit information as to whether the proposed insurance policy is intended to replace any other accident and sickness or long-term care insurance policy presently in force. A supplementary application or other form to be signed by the applicant containing such a question may be used.
(b) 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 agent; 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 such 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 following manner:
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.
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. You may wish to secure the advice of your present insurer or its agent 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.
3. If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical health history. Failure to include all material medical information on an application may provide a basis for the company to deny any future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, reread it carefully to be certain that all information has been properly recorded.
The above "Notice to Applicant" was delivered to me on:
(Date)
(Applicant's Signature)
(c) 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 following manner.
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 which may affect the insurance protection available to you under the new policy.
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. You may wish to secure the advice of your present insurer or its agent 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.
3. [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)
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; and
(b) The purposes to be achieved could not be effectively or efficiently achieved without the modification or suspension; and
(c) (i) The modification or suspension is necessary to the development of an innovative and reasonable approach for insuring long-term care; or
(ii) 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 (iii) 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.
Benefits under individual long-term care insurance policies shall be deemed reasonable in relation to premiums provided the expected loss ratio is at least sixty percent, 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:
Prior to an insurer or similar organization offering group long-term care insurance to a resident of this state pursuant to W.S. 26-38-104, 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.
(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, television or Internet medium to the Commissioner of Insurance for review and approval by the Commissioner. 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) 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.
(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 W.S. 26-38-109:
(i) 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
(ii) 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 required to be made under W.S. 26-38-109 is rejected, the insurer shall provide the contingent benefit upon lapse as described in this section.
(d) (i) After rejection of the offer required under W.S. 26-38-109, 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.
(ii) 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.
(iii) The contingent benefit upon lapse shall be triggered every time an insurer increases the premium rate 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 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.
| Issue Age | Percent Increase Over Initial Premium |
|---|---|
| 29 an under | 200% |
| 30-34 | 190% |
| 35-39 | 170% |
| 40-44 | 150% |
| 45-49 | 130% |
| 50-54 | 110% |
| 55-59 | 90% |
| 60 | 70% |
| 61 | 66% |
| 62 | 62% |
| 63 | 58% |
| 64 | 54% |
| 65 | 50% |
| 66 | 48% |
| 67 | 46% |
| 68 | 44% |
| 69 | 42% |
| 70 | 40% |
| 71 | 38% |
| 72 | 36% |
| 73 | 34% |
| 74 | 32% |
| 75 | 30% |
| 76 | 28% |
| 77 | 26% |
| 78 | 24% |
| 79 | 22% |
| 80 | 20% |
|---|---|
| 81 | 19% |
| 82 | 18% |
| 83 | 17% |
| 84 | 16% |
| 85 | 15% |
| 86 | 14% |
| 87 | 13% |
| 88 | 12% |
| 89 | 11% |
| 90 and over | 10% |
(iv) On or before the effective date of a substantial premium increase as defined in paragraph (iii) above, the insurer shall:
(A) Offer to reduce policy benefits provided by the current coverage without the requirement of additional underwriting so that required premium payments are not increased;
(B) Offer to convert the coverage to a paid-up status with a shortened benefit period in accordance with the terms of subsection (e). This option may be elected at any time during the 120-day period referenced in subsection (d)(iii); and
(C) Notify the policyholder or certificateholder that a default or lapse at any time during the 120-day period referenced in subsection (d)(iii) shall be deemed to be the election of the offer to convert in subparagraph (B) above.
(e) Benefits continued as nonforfeiture benefits, including contingent benefits upon lapse, are described in this subsection:
(i) For purposes of this subsection, attained age rating is defined as a schedule of premiums starting from the issue date which increases age at least one percent per year prior to age fifty (50), and at least three percent (3%) per year beyond age fifty (50).
(ii) 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 (iii) below.
(iii) The standard nonforfeiture credit will be equal to 100 percent 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 equal or exceed 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 in subsection (f).
(iv) (A) The nonforfeiture benefit shall begin not later than the end of the third year following the policy or certificate issue date. The contingent benefit upon lapse shall be effective during the first three (3) years as well as thereafter.
(B) Notwithstanding subparagraph (A), for a policy or certificate with attained age rating, the nonforfeiture benefit shall begin on the earlier of:
(I) The end of the tenth year following the policy or certificate issue date; or
(II) The end of the second year following the date the policy or certificate is no longer subject to the attained age rating.
(v) 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 which 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 twelve (12) months after adoption of this provision and shall apply as follows:
(i) Except as provided in paragraph (ii) 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 amended regulation.
(ii) For certificates issued on or after the effective date of this section, under a group long-term care insurance policy as defined in W.S. 26-38-103(a)(v), which policy was in force at the time this amended regulation became effective, the provisions of this section shall not apply.
(i) Premium charged for a policy or certificate containing nonforfeiture benefits or a contingent benefit upon lapse shall be subject to the loss ratio requirements of Section 13, treating the policy as a whole.
(j) To determine whether contingent nonforfeiture upon lapse provisions are triggered under subsection (d)(iii), 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 upon 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 meet the following requirements:
(i) The nonforfeiture provisions shall be appropriately captioned;
(ii) The nonforfeiture provision shall provide a benefit available in the event of default in the payment of any premiums and shall state that the amount of the benefit may be adjusted 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
(iii) The nonforfeiture provision shall provide at least one of the following:
(A) Reduced paid-up insurance;
(B) Extended term insurance;
(C) Shortened benefit period; or
(D) Other similar offerings approved by the Commissioner.
(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) (i) Activities of daily living shall include at least the following as defined in Section 5 and in the policy:
(A) Bathing;
(B) Continence;
(C) Dressing;
(E) Toileting; and
(ii) Insurers may use activities of daily living to trigger covered benefits in addition to those contained in paragraph (i) 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:
(i) Requiring the hands-on assistance of another person to perform the prescribed activities of daily living; or
(ii) 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 twelve (12) months after adoption of this provision and shall apply as follows:
(i) Except as provided in paragraph (ii) below, the provisions of this section apply to a long-term care policy issued in this state on or after the effective date of the amended regulation.
(ii) For certificates issued on or after the effective date of this section, under a group long-term care insurance policy as defined in W.S. 26-38-103(a)(v), that was in force at the time this amended regulation became effective, the provisions of this section shall not apply.
(a) For purposes of this section the following definitions apply:
(i) “Qualified long-term care services” are as defined under W.S. 26-38-103(a)(ix).
(ii) (A) “Chronically ill individual” has the meaning prescribed for this term by Section 7702B(c)(2) of the Internal Revenue Code of 1986, as amended. Under this provision, a chronically ill individual means any individual who has been certified by a licensed health care practitioner as:
(I) 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
(II) Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment.
(B) The term “chronically ill individual” shall not include an individual otherwise meeting these requirements unless within the preceding twelve-month period a licensed health care practitioner has certified that the individual meets these requirements.
(iii) “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 the requirements prescribed by the Secretary of the Treasury.
(iv) “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 a 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 insurer 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.
This section of the regulation implements, interprets and makes specific, the provisions of W.S. 26-38-105(k) in prescribing a standard format and the content of an outline of coverage.
(a) The outline of coverage shall be a free-standing document, using no smaller than ten point type.
(b) The outline of coverage shall contain no material of an advertising nature.
(c) Text which is capitalized or underscored in the standard format outline of coverage may be emphasized by other means which provide prominence equivalent to such 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) Format for outline of coverage:
[COMPANY NAME] [ADDRESS - CITY & STATE] [TELEPHONE NUMBER] LONG-TERM CARE INSURANCE OUTLINE OF COVERAGE
[Policy Number of 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.]
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. 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. 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. 3. TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE RETURNED AND PREMIUM REFUNDED.
1. (a) [Provide a brief description of the right to return -- 'free look' provision of the policy.]
2. (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.]
4. 4. THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are eligible for Medicare, review the Medicare Supplement Buyer's Guide available from the insurance company.
1. (a) [For agents] Neither [insert company name] nor its agents represent Medicare, the federal government or any state government.
2. (b) [For direct response] [insert company name] is not representing Medicare, the federal government or any state government.
5. 5. 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.]
(a) [Covered services, related deductible(s), waiting periods, elimination periods and benefit maximums.]
(b) [Institutional benefits, by skill level.]
(c) [Non-institutional benefits, by skill level.]
[Any benefit screens must be explained in this section. If these screens differ for different benefits, explanation of the screen 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. If activities of daily living (ADLs) are used to measure an insured's need for long-term care, then these qualifying criteria or screens must be explained.]
[Describe:
(a) Preexisting conditions;
(b) Non-eligible facilities/provider;
(c) Non-eligible levels of care (e.g., unlicensed providers, care or treatment provided by a family member, etc.);
(d) Exclusions/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 (6) above.]
THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH YOUR LONG-TERM CARE NEEDS.
8. 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.]
9. TERMS UNDER WHICH THE POLICY (OR CERTIFICATE) MAY BE CONTINUED IN FORCE OR DISCONTINUED.
[(a) Describe the 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;
(d) State whether or not the company has a right to change premium, and if such a right exists, describe clearly and concisely each circumstance under which premium may change.]
10. 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.]
11. 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.]
[(a) Indicate if medical underwriting is used;
(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.
(i) In the case of agent solicitations, an agent must deliver the shopper's guide prior to the presentation of an application or enrollment form.
(ii) In the case of direct response solicitations, the shopper's guide must be presented in conjunction with any application or enrollment form.
(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 shall:
(i) Develop and use suitability standards to determine whether the purchase or replacement of long-term care insurance is appropriate for the need of the applicant;
(ii) Train its agents in the use of its suitability standards; and
(iii) Maintain a copy of its suitability standards and make them available for inspection upon request by the Commissioner.
(c) (i) To determine whether the applicant meets the standards developed by the issuer, the agent and issuer shall develop procedures that take the following into consideration:
(A) The ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage;
(B) The applicant's goals or needs with respect to long-term care and the advantages and disadvantages of insurance to meet these goals or needs; and
(C) The values, benefits and costs of the applicant's existing insurance, if any, when compared to the values, benefits and costs of the recommended purchase or replacement.
(ii) The issuer, and where an agent is involved, the agent shall make reasonable efforts to obtain the information set out in paragraph (i) 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 contained in Appendix B, in not less than twelve (12) point type. The issuer may request the applicant to provide additional information to comply with its suitability standards. A copy of the issuer's personal worksheet shall be filed with the Commissioner.
(iii) 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.
(iv) The sale or dissemination outside the company or agency by the issuer or agent 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) Agents 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.
If any provision of this regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected thereby.
This regulation shall be effective upon filing with the Secretary of State.
LONG-TERM CARE POLICIES FOR THE STATE OF WYOMING FOR THE REPORTING YEAR 20[ ]
Company Name: _________
Address: _____________
Phone Number: _________ Due: March 1 annually
Instructions:
The purpose of this form is to report all recissions 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 recission.
| Policy Form # | Policy and Certificate # | Name of Insured | Date of Policy Issuance | Date/s Claim/s Submitted | Date of Rescission |
|---|---|---|---|---|---|
Detailed reason for rescission: ______
Signature
Name and Title (please type)
Date
People buy long-term care insurance for many reasons. Some do not want to use their own assets to pay for long-term care. Some buy insurance to make sure they can choose the type of care they get. Others do not want their family to have to pay for care or do not want to go on Medicaid. But long-term care insurance may be expensive, and may not be right for everyone.
By state law, the insurance company must fill out part of the information on this worksheet and ask you to fill out the rest to help you and the company decide if you should buy this policy.
Policy Form Numbers ___
The premium for the coverage you are considering will be [$ __ per month, or $ _ per year.] [a one-time single premium of $ ___]
Type of Policy (noncancellable/guaranteed renewable): ___
The Company’s Right to Increase Premiums: ___
[The company cannot raise your rates on this policy.] [The company has a right to increase premiums on this policy form in the future, provided it raises rates for all policies in the same class in this state.] [Insurers shall use appropriate bracketed statement. Rate guarantees shall not be shown on this form.]
The company has sold long-term care insurance since [year] and has sold this policy since [year]. [The company has never raised its rates for any long-term care policy it has sold in this state or any other state.] [The company has not raised its rates for this policy form or similar policy forms in this state or any other state in the last 10 years.] [The company has raised its premium rates on this policy form or similar policy forms in the last 10 years. Following is a summary of the rate increases.]
Drafting Note: A company may use the first bracketed sentence above only if it has never increased rates under any prior policy forms in this state or any other state. The issuer shall list each premium increase it has instituted on this or similar policy forms in this state or any other state during the last 10 years. The list shall provide the policy form, the calendar years the form was available for sale, and the calendar year and the amount (percentage) of each increase. The insurer shall provide minimum and maximum percentages if the rate increase is variable by rating characteristics. The insurer may provide, in a fair manner, additional explanatory information as appropriate.
How will you pay each year’s premium?
From my Income
From my Savings/Investments
My Family will Pay
[G] Have you considered whether you could afford to keep this policy if the premiums went up, for example, by 20%?]
Drafting Note: The issuer is not required to use the bracketed sentence if the policy is fully paid up or is noncancellable policy.
What is your annual income? (check one) ☐ 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
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.
G The answers to the questions above describe my financial situation.
Or
G I choose not to complete this information.
(Check one.)
G I acknowledge that the carrier and/or its agent (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)
[G I explained to the applicant the importance of completing this information.
Signed: __ __ (Agent) (Date)
Agent'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 agent 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 agent 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.
Long-Term Care Insurance - A long-term care insurance policy may pay most of the costs for your care in a nursing home. Many policies also pay for care at home or other community settings. Since policies can vary in coverage, you should read this policy and make sure you understand what it covers before you buy it. - [You should not buy this insurance policy unless you can afford to pay the premiums every year.] [Remember that the company can increase premiums in the future.]
Drafting Note: For single premium policies, delete this bullet; for noncancellable policies, delete the second sentence only.
Medicare Medicaid - The personal worksheet includes questions designed to help you and the company determine whether this policy is suitable for your needs. - Medicare does not pay for most long-term care. - Medicaid will generally pay for long-term care if you have very little income and few assets. You probably should not buy this policy if you are now eligible for Medicaid. - Many people become eligible for Medicaid after they have used up their own financial resources by paying for long-term care services. - When Medicaid pays your spouse's nursing home bills, you are allowed to keep your house and furniture, a living allowance, and some of your joint assets. - Your choice of long-term care services may be limited if you are receiving Medicaid. To learn more about Medicaid, contact your local or state Medicaid agency. Shopper's Guide - Make sure the insurance company or agent gives you a copy of a book called the National Association of Insurance Commissioners' "Shopper's Guide to Long-Term Care Insurance." Read it carefully. If you have decided to apply for long-term care insurance, you have the right to return the policy within 30 days and get back any premium you have paid if you are dissatisfied for any reason or choose not to purchase the policy.
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 of health, aging division for more information about the senior health insurance counseling program in your state.
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 you application, including the booklet “Shoppers 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 a policy.
Please check one box and return in the enclosed envelope.
☐ Yes, [although my worksheet indicates that long-term care insurance may not be a suitable purchase.] I wish to purchase this coverage. Please resume review of my application.
Drafting Note: Delete the phrase in brackets if the applicant did not answer the questions about income.
☐ No. I have decided not to buy a policy at this time.
APPLICANT'S SIGNATURE
DATE
Please return to [issuer] at [address] by [date].