69O-157.104. Policy Practices and Provisions

(1) Renewability. The terms “guaranteed renewable” and “noncancellable” shall not be used in any individual long-term care insurance policy without further explanatory language in accordance with the disclosure requirements of Rule 69O-157.106, F.A.C.

(a) A policy issued to an individual shall not contain renewal provisions other than “guaranteed renewable” or “noncancellable.”

(b) The term “guaranteed renewable” shall 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.

(c) The term “noncancellable” shall 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.

(d) The term “level premium” shall only be used when the insurer does not have the right to change the premium.

(e) In addition to the other requirements of this subsection 69O-157.104(1), F.A.C., 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.

(2) 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:

(a) Preexisting conditions or diseases pursuant to Sections 627.9407(4)(a) and (b), F.S.;

(b) Mental or nervous disorders; however, this shall not permit exclusion or limitation of benefits on the basis of Alzheimer’s Disease;

(c) Alcoholism and drug addiction;

(d) Illness, treatment, or medical condition arising out of:

1. War or act of war (whether declared or undeclared);

2. Participation in a felony, riot, or insurrection;

3. Service in the armed forces or units auxiliary thereto;

4. Suicide (sane or insane), attempted suicide, or intentionally self-inflicted injury; or

5. Aviation (this exclusion applies only to non-fare-paying passengers).

(e) 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;

(f) Expenses for services or items available or paid under another long-term care insurance or health insurance policy;

(g) 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.

(h) This subsection is not intended to prohibit exclusions and limitations by type of provider or territorial limitations.

(3) Conditions of Eligibility. The provision of Section 627.9405(2), F.S., does not require the sponsoring policyholder of a group policy to contribute premiums; however, if the sponsoring policyholder does contribute any premium, all members of the group, or all of any class or classes thereof, shall be declared eligible and acceptable to the insurer at the time of issuance of the policy.

(4) Minimum Coverage.

(a) All long-term care policies shall provide coverage for at least 24 consecutive months for each covered person for care in a nursing home. This provision is not applicable to coverage issued or renewed after July 1, 2006.

(b) All long-term care policies shall provide coverage for at least one type of lower level of care, in addition to coverage for care in a nursing home.

(c)1.a. No long-term care policy shall provide significantly more coverage for care in a nursing home than coverage for lower levels of care. In furtherance of this requirement, benefits for all lower levels of care in the aggregate, as determined by the insured for each policy, shall provide a level of benefits equivalent to at least 50 percent of the benefits provided for nursing home coverage; i.e., if the nursing home benefit amount is $100 per day then the required lower level of care benefit amount shall be at least $50 per day.

b. For the purposes of applying this 50 percent equivalency requirement to a policy benefit period, the lower level of care shall be, in the aggregate, at least 50 percent of the benefit period provided for nursing home coverage.

c. If a long-term care policy provides nursing home coverage for an unlimited duration, the lower level of care shall be payable for at least 3 years in the aggregate.

2. A long-term care policy may use an overall lifetime benefit maximum, in lieu of the specific coverage identified by paragraph (c), above, which may be exhausted by any combination of benefits provided the overall lifetime benefit maximum is at least 150 percent of the minimum coverage required by paragraph 69O-157.104(4)(a), F.A.C., times the amount of daily nursing home benefit purchased.

(d) For the purposes of this rule, “lower level(s) of care” means the following:

1. Nursing service;

2. Assisted living facility;

3. Home health services;

4. Adult day care center;

5. Adult foster home;

6. Community care for the elderly; and

7. Personal care and social services.

(5) Group Coverage Certificate. A certificate issued pursuant to a group long-term care insurance policy, which policy is delivered or issued for delivery in this state, shall include:

(a) A description of the principal benefits and coverage provided in the policy;

(b) A statement of the principal exclusions, reductions, and limitations contained in the policy;

(c) A statement that the description of principal benefits is a summary of the policy and that the group master policy should be consulted to determine governing contractual provisions;

(d) Person insured;

(e) Person to whom benefits are payable;

(f) Group contract number;

(g) Certificate number;

(h) Effective date; and

(i) Time certificate is effective.

(6) Death Benefits. An individual long term care policy shall not include a policy benefit that is incurred upon the death of an insured in excess of $1,000 pursuant to Section 627.603, F.S. Such benefits may be provided as an option that the insured may purchase or not purchase for a separate premium from the base policy coverage.

(7) Extension of Benefits.

(a) 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.

(b) 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.

(8) Continuation or Conversion.

(a) Group long-term care insurance issued in this state shall provide covered individuals with a basis for continuation or conversion of coverage.

(b) For the purposes of this rule, “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.

(c) For the purposes of this rule, “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 6 months immediately prior to termination, shall be entitled to the issuance of a converted policy by the insurer under whose group policy the individual is covered, without evidence of insurability.

(d)1. For the purposes of this rule, “converted policy” means an individual policy of long-term care insurance providing benefits identical to, or benefits determined by the Office to be substantially equivalent to or in excess of, those provided under the group policy from which conversion is made.

2. The policy and rate schedule for the converted policy shall be a policy that is available, at the time of conversion, for general sales by the insurer.

3. 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, the Office, 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.

(e) 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 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.

(f)1. 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 and risk class at inception of coverage under the group policy from which conversion is made.

2. 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 and risk class used in determining the coverage issued 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. Termination of group coverage resulted from a certificateholder’s failure to make any required payment of premium or contribution when due. This does not include such situations as the individual’s authorizing and making payment which is not ultimately paid to the insurer due to bank, employer, or policyholder error; or

2. The terminating coverage is replaced not later than 31 days after termination by group coverage effective on the day following the termination of coverage:

a. Providing benefits identical to or benefits determined by the Office to be substantially equivalent to or in excess of those provided by the terminating coverage; and

b. The premium for which is calculated in a manner consistent with the requirements of paragraph 69O-157.104(8)(f), F.A.C.

(h)1. Notwithstanding any other provision of this subsection 69O-157.104(8), F.A.C., 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.

2. The provision shall 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 subsection 69O-157.104(8), F.A.C., an insured individual whose eligibility for group long-term care coverage is based upon the individual’s relationship to another person shall be entitled to continuation of coverage under the group policy upon termination of the qualifying relationship.

(k) 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.

(9) 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:

(a) Shall not result in an exclusion for preexisting conditions that would have been covered under the group policy being replaced; and

(b) Shall not vary or otherwise depend on the individual’s health or disability status, claim experience, or use of long-term care services.

(10) Premium Restrictions.

(a) Except for premium rate increases pursuant to Rule 69O-157.113, F.A.C., or due to benefit changes elected by the insured, the premium rate schedule shall be based on the issue age of the insured. Pursuant to Section 627.410(6)(d), F.S., a company is prohibited from using any rate schedule or rating practice which use select and ultimate rating or where the rate varies based on an insured’s year of issue or duration that the coverage has been in effect based on the benefits contracted at the issuance of the coverage. Except for differences in rates attributed to differences in modal payment, any discount provided at issue may not be removed once issued.

(b)1. The purchase of additional coverage shall not be considered a premium rate increase, but for purposes of the calculation required under paragraph 69O-157.118(3)(c), F.A.C., the portion of the premium attributable to the additional coverage shall be added to and considered part of the initial annual premium.

2. A reduction in benefits shall not be considered a premium change, but for purpose of the calculation required under paragraph 69O-157.118(3)(c), F.A.C., the initial annual premium shall be based on the reduced benefits.

(11) Electronic Enrollment for Group Policies.

(a) In the case of a group defined in Section 627.9405(1)(a), F.S., any requirement that a signature of an insured be obtained by an agent or insurer shall be deemed satisfied if:

1. The consent is obtained by telephonic or electronic enrollment by the group policyholder or insurer. A verification of enrollment information shall be provided to the enrollee;

2. The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure the accuracy, retention, and prompt retrieval of records; and

3. The insurer is responsible that the telephonic or electronic enrollment process provides necessary and reasonable safeguards to assure that the confidentiality of personal and privileged information is maintained.

(b) The insurer shall make available, upon request of the Office, records that will demonstrate the insurer’s ability to confirm enrollment and coverage amounts.

Specific Authority 624.308(1), 627.9407(1), (6), 627.9408 FS. Law Implemented 624.307(1), 627.410(6), 627.603, 627.646, 627.9402, 627.9405(2), 627.9407 FS. History–New 1-13-03, Formerly 4-157.104, 9-16-08.