10232-10233.9
INSURANCE CODE
SECTION 10232-10233.9
10232. (a) No group long-term care insurance coverage may be
offered or sold to a resident of this state under a group policy
issued in another state to a group described in subdivision (d) of
Section 10231.6, unless the commissioner has determined that the
requirements imposed by subdivision (d) of Section 10231.6 have been
met. At least 30 days in advance of advertising, marketing, or
offering coverage within this state, an insurer issuing a policy to a
group described in subdivision (d) of Section 10231.6 shall
accomplish an informational filing with the commissioner which
consists of the following materials:
(1) A specimen master policy and certificate.
(2) The corresponding outline of coverage.
(3) Representative advertising materials to be used in this state.
(4) At the option of the insurer, any other documentation which
the insurer believes will provide information sufficient to allow the
commissioner to determine that the requirements of subdivision (d)
of Section 10231.6 have been met or which establishes that the
insurance regulatory authority of another state has made a
determination that the requirements have been met, or both.
(b) No group long-term care insurance coverage may be offered or
sold to a resident of this state under a group policy issued in
another state to a group described in subdivision (c) of Section
10231.6, unless, prior to advertising, marketing, or offering that
coverage within this state, the association or associations, or the
insurer of the association or associations, files evidence with the
commissioner that the association or associations have at the outset
a minimum of 100 persons, have been organized and maintained in good
faith for a primary purpose other than that of obtaining insurance,
have been in active existence for at least one year, have a
constitution and bylaws which provide all of the following, and
provide evidence that the following have been consistently
implemented:
(1) The association or associations hold regular meetings, not
less than annually, to further purposes of the members.
(2) Except for credit unions, the association or associations
collect dues or solicit contributions from members.
(3) The members have voting privileges and representation on the
governing board and committees.
Thirty days after that filing, the association or associations
shall be deemed to satisfy those organizational requirements, unless
the commissioner makes the finding that the association or
associations do not satisfy those organizational requirements.
The association or associations, or the insurer of the association
or associations, shall accompany this organizational filing with an
informational filing which consists of the following materials:
(1) A specimen master policy and certificate.
(2) The corresponding outline of coverage.
(3) Representative advertising materials to be used in this state.
(c) Compliance with the informational filings required to be made
by this section shall also constitute compliance with the filing
requirements of Section 10233.9.
(d) The materials required to be filed with the commissioner by
this section shall be filed with the commissioner for informational
purposes only, and not for approval purposes.
10232.1. (a) Every policy that is intended to be a qualified
long-term care insurance contract as provided by Public Law 104-191
shall be identified as such by prominently displaying and printing on
page one of the policy form and the outline of coverage and in the
application the following words: "This contract for long-term care
insurance is intended to be a federally qualified long-term care
insurance contract and may qualify you for federal and state tax
benefits." Every policy that is not intended to be a qualified
long-term care insurance contract as provided by Public Law 104-191
shall be identified as such by prominently displaying and printing on
page one of the policy form and the outline of coverage and in the
application the following words: "This contract for long-term care
insurance is not intended to be a federally qualified long-term care
insurance contract."
(b) Any policy or certificate in which benefits are limited to the
provision of institutional care shall be called a "nursing facility
and residential care facility only" policy or certificate and the
words "Nursing Facility and Residential Care Facility Only" shall be
prominently displayed on page one of the form and the outline of
coverage. The commissioner may approve alternative wording if it is
more descriptive of the benefits.
(c) Any policy or certificate in which benefits are limited to the
provision of home care services, including community-based services,
shall be called a "home care only" policy or certificate and the
words "Home Care Only" shall be prominently displayed on page one of
the form and the outline of coverage. The commissioner may approve
alternative wording if it is more descriptive of the benefits.
(d) Only those policies or certificates providing benefits for
both institutional care and home care may be called "comprehensive
long-term care" insurance.
10232.2. (a) Every insurer that offers policies or certificates
that are intended to be federally qualified long-term care insurance
contracts, including riders to life insurance policies providing
long-term care coverage, shall fairly and affirmatively concurrently
file, offer, and market long-term care insurance policies or
certificates not intended to be federally qualified, as described in
subdivision (a) of Section 10232.1.
(b) All long-term care insurance contracts, including riders to
life insurance contracts providing long-term care coverage, approved
after the effective date of this section shall meet all of the
requirements of this chapter.
(c) Until October 1, 2001, or 90 days after approval of contracts
submitted for approval pursuant to subdivision (b), whichever comes
first, insurers may continue to offer and market previously approved
long-term care insurance contracts.
(d) Group policies issued prior to January 1, 1997, shall be
allowed to remain in force and not be required to meet the
requirements of this chapter, as amended during the 1997 portion of
the 1997-98 Regular Session, unless those policies cease to be
treated as federally qualified long-term care insurance contracts. If
a policy or certificate issued on a group policy of that type ceases
to be a federally qualified long-term care insurance contract under
the grandfather rules issued by the United States Department of the
Treasury pursuant to Section 7702B(f) of the Internal Revenue Code,
the insurer shall offer the policy and certificate holders the option
to convert, on a guaranteed-issue basis, to a policy or certificate
that is federally tax qualified if the insurer sells tax-qualified
policies.
(e) It is the intent of the Legislature that the commissioner
approve by July 1, 2001, all accurate and complete contracts
submitted for approval pursuant to subdivision (b). It is the further
intent of the Legislature that insurers submit contracts for
approval and resolve further outstanding issues pursuant to
subdivision (b) in a timely manner in order for the commissioner to
approve the contracts by July 1, 2001.
10232.3. (a) All applications for long-term care insurance except
that which is guaranteed issue, shall contain clear, unambiguous,
short, simple questions designed to ascertain the health condition of
the applicant. Each question shall contain only one health status
inquiry and shall require only a "yes" or "no" answer, except that
the application may include a request for the name of any prescribed
medication and the name of a prescribing physician. If the
application requests the name of any prescribed medication or
prescribing physician, then any mistake or omission shall not be used
as a basis for the denial of a claim or the rescission of a policy
or certificate.
(b) The following warning shall be printed conspicuously and in
close conjunction with the applicant's signature block:
"Caution: If your answers on this application are misstated or
untrue, the insurer may have the right to deny benefits or rescind
your coverage."
(c) Every application for long-term care insurance shall include a
checklist that enumerates each of the specific documents that this
chapter requires be given to the applicant at the time of
solicitation. The documents and notices to be listed in the checklist
include, but are not limited to, the following:
(1) The "Important Notice Regarding Policies Available" pursuant
to Section 10232.25.
(2) The outline of coverage pursuant to Section 10233.5.
(3) The HICAP notice pursuant to paragraph (8) of subdivision (a)
of Section 10234.93.
(4) The long-term care insurance shoppers guide pursuant to
paragraph (9) of subdivision (a) of Section 10234.93.
(5) The "Long-Term Care Insurance Personal Worksheet" pursuant to
subdivision (c) of Section 10234.95.
(6) The "Notice to Applicant Regarding Replacement of Accident and
Sickness or Long-Term Care Insurance" pursuant to Section 10235.16
if replacement is not made by direct response solicitation or Section
10235.18 if replacement is made by direct response solicitation.
Unless the solicitation was made by a direct response method, the
agent and applicant shall both sign at the bottom of the checklist to
indicate the required documents were delivered and received.
(d) If an insurer does not complete medical underwriting and
resolve all reasonable questions arising from information submitted
on or with an application before issuing the policy or certificate,
then the insurer may only rescind the policy or certificate or deny
an otherwise valid claim, upon clear and convincing evidence of fraud
or material misrepresentation of the risk by the applicant. The
evidence shall:
(1) Pertain to the condition for which benefits are sought.
(2) Involve a chronic condition or involve dates of treatment
before the date of application.
(3) Be material to the acceptance for coverage.
(e) No long-term care policy or certificate may be field issued.
(f) The contestability period as defined in Section 10350.2 for
long-term care insurance shall be two years.
(g) A copy of the completed application shall be delivered to the
insured at the time of delivery of the policy or certificate.
(h) Every insurer shall maintain a record, in accordance with
Section 10508, of all policy or certificate rescissions, both state
and countrywide, and shall annually furnish this information to the
commissioner, which shall include the reason for rescission, the
length of time the policy or certificate was in force, and the age
and gender of the insured person, in a format prescribed by the
commissioner.
(i) The commissioner may, in his or her discretion, make public
the aggregate data collected under subdivision (h), upon request.
10232.4. (a) No long-term care insurance policy or certificate
other than a group policy or certificate, as described in subdivision
(a) of Section 10231.6, shall use a definition of preexisting
condition which is more restrictive than a condition for which
medical advice or treatment was recommended by, or received from a
provider of health care services, within six months preceding the
effective date of coverage of an insured person.
(b) Every long-term care insurance policy or certificate shall
cover preexisting conditions that are disclosed on the application no
later than six months following the effective date of the coverage
of an insured, regardless of the date the loss or confinement begins.
(c) The definition of preexisting condition does not prohibit an
insurer from using an application form designed to elicit the
complete health history of an applicant, and on the basis of the
answers on that application, from underwriting in accordance with
that insurer's established underwriting standards. Unless otherwise
provided in the policy or certificate a preexisting condition,
regardless of whether it is disclosed on the application, need not be
covered until the waiting period described in subdivision (b)
expires. Unless a waiver or rider has been specifically approved by
the commissioner, no long-term care insurance policy or certificate
may exclude or use waivers or riders of any kind to exclude, limit,
or reduce coverage or benefits for specifically named or described
preexisting diseases or physical conditions beyond the waiting period
described in subdivision (b).
10232.5. On or after January 1, 1990, no long-term care insurance
policy may be delivered or issued for delivery in this state which
does any of the following:
(a) Preconditions the availability of benefits on prior
hospitalization.
(b) Conditions eligibility for benefits provided in an
institutional care setting on the receipt of a higher level of
institutional care.
(c) Preconditions the availability of benefits for community-based
care, home health care, or home care on prior institutionalization.
(d) Conditions eligibility for noninstitutional benefits, other
than those in subdivision (c), on a prior institutional stay of more
than 30 days.
10232.6. The commissioner may adopt regulations establishing loss
ratio standards for long-term care insurance policies provided that a
specific reference to long-term care insurance policies is contained
in the regulation. Any regulations adopted by the commissioner shall
substantially reflect the loss ratio standards contained in Section
10 of the National Association of Insurance Commissioners Long-Term
Care Insurance Model Regulations, as most recently revised.
10232.65. In addition to any other requirements of law, the
following shall apply to a long-term care insurance policy:
(a) The insurer shall not require an amount greater than one month'
s premium to be submitted with an application for the policy of
insurance if interim coverage is not provided. If interim coverage is
provided, the insurer shall not require an amount greater than two
months' premium for that purpose. No further premiums may be
collected until the policy is delivered to the applicant.
(b) The insurer shall notify the applicant within 60 days from the
date the insurer or insurer's authorized representative or producer
receives the application and the amount as to whether or not the
applicant will be issued a policy of insurance. If the applicant is
not so notified, the insurer or insurer's authorized representative
or producer shall pay interest to the applicant on the funds that the
applicant submitted with the application, at the legal rate of
interest on judgments as provided in Section 685.010 of the Code of
Civil Procedure, from the date the insurer or insurer's authorized
representative or producer received those funds until they are
refunded to the applicant or are applied toward the premium.
10232.7. (a) An applicant for a long-term care insurance policy or
a certificate, other than an applicant for a certificate issued under
a group long-term care insurance policy issued to a group as
described in subdivisions (a) and (b) of Section 10231.6, shall have
the right to return the policy or certificate by first-class United
States mail within 30 days of its delivery and to have the premium
refunded if, after examination of the policy or certificate, the
applicant is not satisfied for any reason.
(b) The return of a policy or certificate shall void the policy or
certificate from the beginning and the parties shall be in the same
position as if no policy, certificate, or contract had been issued.
All premiums paid and any policy fee paid for the policy shall be
fully refunded directly to the applicant by the insurer within 30
days after the policy or certificate is returned.
(c) Notwithstanding Section 10276 or any other law, long-term care
insurance policies or certificates to which this section applies
shall have a notice prominently printed on the first page of the
policy or certificate, or attached thereto, stating in substance the
conditions described in subdivisions (a) and (b).
10232.8. (a) In every long-term care policy or certificate that is
not intended to be a federally qualified long-term care insurance
contract and provides home care benefits, the threshold establishing
eligibility for home care benefits shall be at least as permissive as
a provision that the insured will qualify if either one of two
criteria are met:
(1) Impairment in two out of seven activities of daily living.
(2) Impairment of cognitive ability.
The policy or certificate may provide for lesser but not greater
eligibility criteria. The commissioner, at his or her discretion, may
approve other criteria or combinations of criteria to be
substituted, if the insurer demonstrates that the interest of the
insured is better served.
"Activities of daily living" in every policy or certificate that
is not intended to be a federally qualified long-term care insurance
contract and provides home care benefits shall include eating,
bathing, dressing, ambulating, transferring, toileting, and
continence; "impairment" means that the insured needs human
assistance, or needs continual substantial supervision; and
"impairment of cognitive ability" means deterioration or loss of
intellectual capacity due to organic mental disease, including
Alzheimer's disease or related illnesses, that requires continual
supervision to protect oneself or others.
(b) In every long-term care policy approved or certificate issued
after the effective date of the act adding this section, that is
intended to be a federally qualified long-term care insurance
contract as described in subdivision (a) of Section 10232.1, the
threshold establishing eligibility for home care benefits shall
provide that a chronically ill insured will qualify if either one of
two criteria are met or if a third criterion, as provided by this
subdivision, is met:
(1) Impairment in two out of six activities of daily living.
(2) Impairment of cognitive ability.
Other criteria shall be used in establishing eligibility for
benefits if federal law or regulations allow other types of
disability to be used applicable to eligibility for benefits under a
long-term care insurance policy. If federal law or regulations allow
other types of disability to be used, the commissioner shall
promulgate emergency regulations to add those other criteria as a
third threshold to establish eligibility for benefits. Insurers shall
submit policies for approval within 60 days of the effective date of
the regulations. With respect to policies previously approved, the
department is authorized to review only the changes made to the
policy. All new policies approved and certificates issued after the
effective date of the regulation shall include the third criterion.
No policy shall be sold that does not include the third criterion
after one year beyond the effective date of the regulations. An
insured meeting this third criterion shall be eligible for benefits
regardless of whether the individual meets the impairment
requirements in paragraph (1) or (2) regarding activities of daily
living and cognitive ability.
(c) A licensed health care practitioner, independent of the
insurer, shall certify that the insured meets the definition of
"chronically ill individual" as defined under Public Law 104-191. If
a health care practitioner makes a determination, pursuant to this
section, that an insured does not meet the definition of "chronically
ill individual," the insurer shall notify the insured that the
insured shall be entitled to a second assessment by a licensed health
care practitioner, upon request, who shall personally examine the
insured. The requirement for a second assessment shall not apply if
the initial assessment was performed by a practitioner who otherwise
meets the requirements of this section and who personally examined
the insured. The assessments conducted pursuant to this section shall
be performed promptly with the certification completed as quickly as
possible to ensure that an insured's benefits are not delayed. The
written certification shall be renewed every 12 months. A licensed
health care practitioner shall develop a written plan of care after
personally examining the insured. The costs to have a licensed health
care practitioner certify that an insured meets, or continues to
meet, the definition of "chronically ill individual," or to prepare
written plans of care shall not count against the lifetime maximum of
the policy or certificate. In order to be considered "independent of
the insurer," a licensed health care practitioner shall not be an
employee of the insurer and shall not be compensated in any manner
that is linked to the outcome of the certification. It is the intent
of this subdivision that the practitioner's assessments be unhindered
by financial considerations. This subdivision shall apply only to a
policy or certificate intended to be a federally qualified long-term
care insurance contract.
(d) "Activities of daily living" in every policy or certificate
intended to be a federally qualified long-term care insurance
contract as provided by Public Law 104-191 shall include eating,
bathing, dressing, transferring, toileting, and continence;
"impairment in activities of daily living" means the insured needs
"substantial assistance" either in the form of "hands-on assistance"
or "standby assistance," due to a loss of functional capacity to
perform the activity; "impairment of cognitive ability" means the
insured needs substantial supervision due to severe cognitive
impairment; "licensed health care practitioner" means a physician,
registered nurse, licensed social worker, or other individual whom
the United States Secretary of the Treasury may prescribe by
regulation; and "plan of care" means a written description of the
insured's needs and a specification of the type, frequency, and
providers of all formal and informal long-term care services required
by the insured, and the cost, if any.
(e) Until the time that these definitions may be superseded by
federal law or regulation, the terms "substantial assistance,"
"hands-on assistance," "standby assistance," "severe cognitive
impairment," and "substantial supervision" shall be defined according
to the safe-harbor definitions contained in Internal Revenue Service
Notice 97-31, issued May 6, 1997.
(f) The definitions of "activities of daily living" to be used in
policies and certificates that are intended to be federally qualified
long-term care insurance shall be the following until the time that
these definitions may be superseded by federal law or regulations:
(1) Eating, which shall mean feeding oneself by getting food in
the body from a receptacle (such as a plate, cup, or table) or by a
feeding tube or intravenously.
(2) Bathing, which shall mean washing oneself by sponge bath or in
either a tub or shower, including the act of getting into or out of
a tub or shower.
(3) Continence, which shall mean 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 a catheter or colostomy bag).
(4) Dressing, which shall mean putting on and taking off all items
of clothing and any necessary braces, fasteners, or artificial
limbs.
(5) Toileting, which shall mean getting to and from the toilet,
getting on or off the toilet, and performing associated personal
hygiene.
(6) Transferring, which shall mean the ability to move into or out
of bed, a chair or wheelchair.
The commissioner may approve the use of definitions of "activities
of daily living" that differ from the verbatim definitions of this
subdivision if these definitions would result in more policy or
certificate holders qualifying for long-term care benefits than would
occur by the use of the verbatim definitions of this subdivision. In
addition, the following definitions may be used without the approval
of the commissioner: (1) the verbatim definitions of eating,
bathing, dressing, toileting, transferring, and continence in
subdivision (g); or (2) the verbatim definitions of eating, bathing,
dressing, toileting, and continence in this subdivision and a
substitute, verbatim definition of "transferring" as follows:
"transferring," which shall mean the ability to move into and out of
a bed, a chair, or wheelchair, or ability to walk or move around
inside or outside the home, regardless of the use of a cane,
crutches, or braces.
The definitions to be used in policies and certificates for
impairment in activities of daily living, "impairment in cognitive
ability," and any third eligibility criterion adopted by regulation
pursuant to subdivision (b) shall be the verbatim definitions of
these benefit eligibility triggers allowed by federal regulations. In
addition to the verbatim definitions, the commissioner may approve
additional descriptive language to be added to the definitions, if
the additional language is (1) warranted based on federal or state
laws, federal or state regulations, or other relevant federal
decision, and (2) strictly limited to that language which is
necessary to ensure that the definitions required by this section are
not misleading to the insured.
(g) The definitions of "activities of daily living" to be used
verbatim in policies and certificates that are not intended to
qualify for favorable tax treatment under Public Law 104-191 shall be
the following:
(1) Eating, which shall mean reaching for, picking up, and
grasping a utensil and cup; getting food on a utensil, and bringing
food, utensil, and cup to mouth; manipulating food on plate; and
cleaning face and hands as necessary following meals.
(2) Bathing, which shall mean cleaning the body using a tub,
shower, or sponge bath, including getting a basin of water, managing
faucets, getting in and out of tub or shower, and reaching head and
body parts for soaping, rinsing, and drying.
(3) Dressing, which shall mean putting on, taking off, fastening,
and unfastening garments and undergarments and special devices such
as back or leg braces, corsets, elastic stockings or garments, and
artificial limbs or splints.
(4) Toileting, which shall mean getting on and off a toilet or
commode and emptying a commode, managing clothing and wiping and
cleaning the body after toileting, and using and emptying a bedpan
and urinal.
(5) Transferring, which shall mean moving from one sitting or
lying position to another sitting or lying position; for example,
from bed to or from a wheelchair or sofa, coming to a standing
position, or repositioning to promote circulation and prevent skin
breakdown.
(6) Continence, which shall mean the ability to control bowel and
bladder as well as use ostomy or catheter receptacles, and apply
diapers and disposable barrier pads.
(7) Ambulating, which shall mean walking or moving around inside
or outside the home regardless of the use of a cane, crutches, or
braces.
10232.9. (a) Every long-term care policy or certificate that
purports to provide benefits of home care or community-based
services, shall provide at least the following:
(1) Home health care.
(2) Adult day care.
(3) Personal care.
(4) Homemaker services.
(5) Hospice services.
(6) Respite care.
(b) For purposes of this section, policy definitions of these
benefits may be no more restrictive than the following:
(1) "Home health care" is skilled nursing or other professional
services in the residence, including, but not limited to, part-time
and intermittent skilled nursing services, home health aid services,
physical therapy, occupational therapy, or speech therapy and
audiology services, and medical social services by a social worker.
(2) "Adult day care" is medical or nonmedical care on a less than
24-hour basis, provided in a licensed facility outside the residence,
for persons in need of personal services, supervision, protection,
or assistance in sustaining daily needs, including eating, bathing,
dressing, ambulating, transferring, toileting, and taking
medications.
(3) "Personal care" is assistance with the activities of daily
living, including the instrumental activities of daily living,
provided by a skilled or unskilled person under a plan of care
developed by a physician or a multidisciplinary team under medical
direction. "Instrumental activities of daily living" include using
the telephone, managing medications, moving about outside, shopping
for essentials, preparing meals, laundry, and light housekeeping.
(4) "Homemaker services" is assistance with activities necessary
to or consistent with the insured's ability to remain in his or her
residence, that is provided by a skilled or unskilled person under a
plan of care developed by a physician or a multidisciplinary team
under medical direction.
(5) "Hospice services" are outpatient services not paid by
Medicare, that are designed to provide palliative care, alleviate the
physical, emotional, social, and spiritual discomforts of an
individual who is experiencing the last phases of life due to the
existence of a terminal disease, and to provide supportive care to
the primary care giver and the family. Care may be provided by a
skilled or unskilled person under a plan of care developed by a
physician or a multidisciplinary team under medical direction.
(6) "Respite care" is short-term care provided in an institution,
in the home, or in a community-based program, that is designed to
relieve a primary care giver in the home. This is a separate benefit
with its own conditions for eligibility and maximum benefit levels.
(c) Home care benefits shall not be limited or excluded by any of
the following:
(1) Requiring a need for care in a nursing home if home care
services are not provided.
(2) Requiring that skilled nursing or therapeutic services be used
before or with unskilled services.
(3) Requiring the existence of an acute condition.
(4) Limiting benefits to services provided by Medicare-certified
providers or agencies.
(5) Limiting benefits to those provided by licensed or skilled
personnel when other providers could provide the service, except
where prior certification or licensure is required by state law.
(6) Defining an eligible provider in a manner that is more
restrictive than that used to license that provider by the state
where the service is provided.
(7) Requiring "medical necessity" or similar standard as a
criteria for benefits.
(d) Every comprehensive long-term care policy or certificate that
provides for both institutional care and home care and that sets a
daily, weekly, or monthly benefit payment maximum, shall pay a
maximum benefit payment for home care that is at least 50 percent of
the maximum benefit payment for institutional care, and in no event
shall home care benefits be paid at a rate less than fifty dollars
($50) per day. Insurance products approved for residents in
continuing care retirement communities are exempt from this
provision.
Every such comprehensive long-term care policy or certificate that
sets a durational maximum for institutional care, limiting the
length of time that benefits may be received during the life of the
policy or certificate, shall allow a similar durational maximum for
home care that is at least one-half of the length of time allowed for
institutional care.
10232.92. Every long-term care policy or certificate covering
confinement in a nursing facility shall also include a provision with
the following features:
(a) Care in a residential care facility must be covered.
"Residential care facility" means a facility licensed as a
residential care facility for the elderly or a residential care
facility as defined in the Health and Safety Code. Outside
California, eligible providers are facilities that meet applicable
licensure standards, if any, and are engaged primarily in providing
ongoing care and related services sufficient to support needs
resulting from impairment in activities of daily living or impairment
in cognitive ability and which also provide care and services on a
24-hour basis, have a trained and ready-to-respond employee on duty
in the facility at all times to provide care and services, provide
three meals a day and accommodate special dietary needs, have
agreements to ensure that residents receive the medical care services
of a physician or nurse in case of emergency, and, have appropriate
methods and procedures to provide necessary assistance to residents
in the management of prescribed medications.
(b) The benefit amount payable for care in a residential care
facility shall be no less than 70 percent of the benefit amount
payable for institutional confinement.
(c) All expenses incurred by the insured while confined in a
residential care facility, for long-term care services that are
necessary diagnostic, preventative, therapeutic, curing, treating,
mitigating, and rehabilitative services, and maintenance or personal
care services, needed to assist the insured with the disabling
conditions that cause the insured to be a chronically ill individual
as authorized by Public Law 104-191 and regulations adopted pursuant
thereto, shall be covered and payable, up to but not to exceed the
maximum daily residential care facility benefit of the policy or
certificate. There shall be no restriction on who may provide the
service or the requirement that services be provided by the
residential care facility, as long as the expenses are incurred while
the insured is confined in a residential care facility, the
reimbursement does not exceed the maximum daily residential care
facility benefit of the policy or certificate, and the services do
not conflict with federal law or regulation for purposes of
qualifying for favorable tax consideration provided by Public Law
104-191.
(d) In policies or certificates that are not intended to be
federally qualified, the threshold establishing eligibility for care
in a residential care facility shall be no more restrictive than that
for home care benefits, as defined in subdivision (a) of Section
10232.8, and the definitions of impairment in activities of daily
living and impairment of cognitive ability shall be the same as for
home care benefits, as defined in subdivisions (a) and (g) of Section
10232.8. In policies or certificates that are intended to be
federally qualified, the threshold establishing eligibility for care
in a residential care facility shall be no more restrictive than that
for home care benefits, as defined in subdivision (b) of Section
10232.8, and the definitions of impairment in activities of daily
living and impairment in cognitive ability shall be the same as those
for home care benefits as defined in subdivisions (b), (c), (d),
(e), and (f) of Section 10232.8.
10232.93. Every long-term care policy or certificate shall define
the maximum lifetime benefit as a single dollar amount that may be
used interchangeably for any home- and community-based services
defined in Section 10232.9, assisted living benefit defined in
Section 10232.92, or institutional care covered by the policy or
certificate. There shall be no limit on any specific covered benefit
except for a daily, weekly, or monthly limit set for home- and
community-based care and for assisted living care, and for the limits
for institutional care. Nothing in this section shall be construed
as prohibiting limitations for reimbursement of actual expenses and
incurred expenses up to daily, weekly, and monthly limits.
10232.95. Every long-term care policy or certificate that provides
reimbursement for care in a nursing facility shall cover and
reimburse for per diem expenses, as well as the costs of ancillary
supplies and services, up to but not to exceed the maximum lifetime
daily facility benefit of the policy or certificate.
10232.96. When a policy or certificate holder of an insurance
contract issued prior to December 31, 1996, requests a material
modification to the contract as defined by federal law or
regulations, the insurer, prior to approving such a request, shall
provide written notice to the policy or certificate holder that the
contract change requested may constitute a material modification that
jeopardizes the federal tax status of the contract and appropriate
tax advice should therefore be sought.
10232.97. In every long-term care policy or certificate that covers
care in a nursing facility, the threshold establishing eligibility
for nursing facility care shall be no more restrictive than a
provision that the insured will qualify if either one of two criteria
are met:
(a) Impairment in two activities of daily living.
(b) Impairment in cognitive ability.
10233. Precedent to the payment of benefits for any care covered by
the terms of the policy, any insurer offering long-term care
insurance as described in Section 10231.2 may obtain a written
declaration by a physician, independent needs assessment agency, or
any other source of independent judgment suitable to the insurer that
services are necessary.
10233.2. Long-term care insurance may not:
(a) Be canceled, nonrenewed, or otherwise terminated on the
grounds of the age or the deterioration of the mental or physical
health of the insured individual or certificate holder.
(b) Contain a provision establishing a new waiting period in the
event existing coverage is converted to, or replaced by, a new or
other form within the same insurer, except with respect to an
increase in benefits voluntarily selected by the insured individual
or group policyholder.
(c) Provide coverage for skilled nursing care only or provide
significantly more coverage for skilled care in a facility than
coverage for lower levels of care.
(d) Provide for payment of benefits based on a standard described
as "usual and customary," "reasonable and customary," or words of
similar import.
(e) Terminate a policy, certificate, or rider, or contain a
provision that allows the premium for an in-force policy,
certificate, or rider, to be increased due to the divorce of a
policyholder or certificate holder.
(f) Include an additional benefit for a service with a known
market value other than the statutorily required home- and
community-based service benefits in Section 10232.9, the assisted
living benefit in Section 10232.92, or a nursing facility benefit,
unless the additional benefit provides for the payment of at least
five times the daily benefit and the dollar value of the additional
benefit is disclosed in the schedule page of the policy.
10233.25. No long-term care policy or certificate that is issued,
amended, renewed, or delivered on and after January 1, 2002, shall
contain a provision that prohibits or restricts any health facilities'
compliance with the requirements of Section 1262.5 of the Health and
Safety Code.
10233.3. If a 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
to the extent that similar exclusions have been satisfied under the
original policy or certificate.
10233.4. No long-term care insurance benefits may be reduced
because of out-of-pocket expenditures by the insured or on behalf of
the insured by a family member of the insured or by any other
individual.
10233.5. (a) An outline of coverage shall be delivered to a
prospective applicant for long-term care insurance at the time of
initial solicitation through means which prominently direct the
attention of the recipient to the document and its purpose.
(b) In the case of agent solicitations, an agent shall deliver the
outline of coverage prior to the presentation of an application or
enrollment form.
(c) In the case of direct response solicitations, the outline of
coverage shall be presented in conjunction with any application or
enrollment form.
(d) The outline of coverage shall be a freestanding document,
using no smaller than 10-point type.
(e) The outline of coverage shall contain no material of an
advertising nature.
(f) Use of the text and sequence of the text of the outline of
coverage set forth in this section is mandatory, unless otherwise
specifically indicated.
(g) Text which is capitalized or underscored in the outline of
coverage may be emphasized by other means which provide prominence
equivalent to capitalization or underscoring.
(h) The outline of coverage shall be in the following form:
"(COMPANY NAME)
(ADDRESS--CITY AND STATE)
(TELEPHONE NUMBER)
LONG-TERM CARE INSURANCE
OUTLINE OF COVERAGE
(Policy Number or Group Master Policy and Certificate Number)
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. 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 those provisions, include a
description of them.
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.
(a) (For agents) Neither (insert company name) nor its agents
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.
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.)
6. BENEFITS PROVIDED BY THIS POLICY.
(a) (Covered services, related deductible(s), waiting periods,
elimination periods, and benefit maximums.)
(b) (Institutional benefits, by skill level.)
(c) (Noninstitutional 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.)
7. LIMITATIONS AND EXCLUSIONS.
(Describe:
(a) Preexisting conditions.
(b) Noneligible facilities/provider.
(c) Noneligible levels of care (e.g., unlicensed providers, care
or treatments 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 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
no waiver of premium provisions.
(d) State whether or not the company has a right to change
premium, and if that right exists, describe clearly and concisely
each circumstance under which the premium may change.
10. ALZHEIMER'S DISEASE, ORGANIC DISORDERS, AND RELATED MENTAL
DISEASES.
(State that the policy provides coverage for insureds clinically
diagnosed as having Alzheimer's Disease, organic disorders, or
related degenerative and dementing illnesses. Specifically describe
each benefit screen or other policy provision that provides
preconditions to the availability of policy benefits for that
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.
12. ADDITIONAL FEATURES.
(a) Indicate if medical underwriting is used.
(b) Describe other important features.
13. INFORMATION AND COUNSELING. The California Department of
Insurance has prepared a Consumer Guide to Long-Term Care Insurance.
This guide can be obtained by calling the Department of Insurance
toll-free telephone number. This number is 1-800-927-HELP.
Additionally, the Health Insurance Counseling and Advocacy Program
(HICAP) administered by the California Department of Aging, provides
long-term care insurance counseling to California senior citizens.
Call the HICAP toll-free telephone number 1-800-434-0222 for a
referral to your local HICAP office."
10233.6. 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 all of the following:
(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 of the terms under which the policy or
certificate, or both, may be continued in force or discontinued,
including any reservation in the policy of a right to change
premiums.
(d) A statement that the group master policy determines governing
contractual provisions.
(e) An explanation of the insured's rights regarding continuation,
conversion, and replacement.
10233.7. No policy may be advertised, marketed, or offered as
long-term care or nursing home insurance unless it complies with this
chapter.
10233.9. Any insurer offering long-term care insurance under this
chapter shall provide to the Department of Insurance, for the
commissioner's conveyance to the Department of Aging, a copy of the
following materials for all long-term care insurance coverage
advertised, marketed, or offered by that insurer in this state:
(a) Specimen individual policy form or group master policy and
certificate forms.
(b) Corresponding outline of coverage.
(c) Representative advertising materials to be used in this state.