Chapter Ins 3

Ins 3.455(9m)(g)3. 3. The offer described in subd. 2. shall be subject to the approval of the commissioner, be based on actuarially sound principles, but not be based on attained age, and shall provide that maximum benefits under any new policy accepted by an insured shall be reduced by comparable benefits already paid under the existing policy.

Ins 3.455(9m)(g)4. 4. The insurer shall maintain the experience of all the replacement insureds separate from the experience of insureds originally issued the policy forms. If a rate increase on the policy form, the rate increase shall be limited to the maximum rate increase determined based on the combined experience or the maximum rate increase determined based only on the experience of the insureds originally issued the form plus 10%, whichever is less.

Ins 3.455(9m)(h) (h) If the commissioner determines that the insurer has exhibited a persistent practice of filing inadequate initial premium rates for long-term care, nursing home, and home health care insurance, the commissioner may, in addition to the provisions of par. (g), either prohibit the insurer from filing and marketing comparable coverage for a period of up to 5 years, or prohibit the insurer from offering all other similar coverages and require the insurer to limit marketing of new applications to the products subject to recent premium rate schedule increases.

Ins 3.455(9m)(i) (i) Paragraphs (a) through (h) shall not apply to policies for which the benefits provided by the policy are incidental.

Ins 3.455(9m)(j) (j) Except as provided in pars. (k) and (L) the provisions of this subsection apply to any long-term care, nursing home or home health care policy or certificate issued in this state on or after January 1, 2002.

Ins 3.455(9m)(k) (k) For group long-term care insurance certificates issued to employer-sponsored groups or labor organizations in this state and in force on or after January 1, 2002 the provisions of this subsection shall apply on the first policy anniversary occurring at least 12 months after January 1, 2002.

Ins 3.455(9m)(L) (L) In lieu of filing the projections required by pars. (c) and (d) with the commissioner, an insurer may file projections with the employer if that employer has at least 5,000 eligible employees of whom at least 250 are covered under the policy or the employer pays at least 20% of the annual group premium in the year preceding the increase.

Ins 3.455(10) (10) Initial filing requirements.

Ins 3.455(10)(a) (a) This subsection applies to any long-term care, nursing home and home health care policy issued in this state on or after January 1, 2002.

Ins 3.455(10)(b) (b) An insurer shall file all of the following with the commissioner at least 30 days before making a long-term care insurance policy available for sale:

Ins 3.455(10)(b)1. 1. A copy of the disclosure documents as required by s. Ins 3.46 (9).

Ins 3.455(10)(b)2. 2. An actuarial certification consisting of all the following:

Ins 3.455(10)(b)2.a. a. A statement that the initial premium rate schedule is sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated.

Ins 3.455(10)(b)2.b. b. A statement that the policy design and coverage provided have been reviewed and taken into consideration.

Ins 3.455(10)(b)2.c. c. A statement that the underwriting and claims adjudication processes have been reviewed and taken into consideration.

Ins 3.455(10)(b)2.d. d. A complete description of the basis for contract reserves that are anticipated to be held under the form.

Ins 3.455(10)(b)2.e. e. Sufficient detail or sample calculations provided so as to have a complete depiction of the reserve amounts to be held.

Ins 3.455(10)(b)2.f. f. A statement that the assumptions used for reserves contain reasonable margins for adverse experience.

Ins 3.455(10)(b)2.g. g. A statement that the net valuation premium for renewal years does not increase except for attained-age rating where permitted.

Ins 3.455(10)(b)2.h. h. A statement that the difference between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses; or if such a statement cannot be made, a complete description of the situations where this does not occur. An aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship. If the gross premiums for certain age groups appear to be inconsistent with this requirement, the commissioner may request a demonstration under subd. 3. based on a standard age distribution.

Ins 3.455(10)(b)2.i. i. A statement that the premium rate schedule is not less than the premium rate schedule for existing similar policy forms also available from the insurer except for reasonable differences attributable to benefit or a comparison of the premium schedules for similar policy forms that are currently available from the insurer with an explanation of the differences.

Ins 3.455(10)(b)3. 3. The commissioner may request an actuarial demonstration that benefits are reasonable in relation to premiums. The actuarial demonstration shall include either premium and claim experience on similar policy forms, adjusted for any premium or benefit differences, relevant and credible data from other studies, or both.

Ins 3.455(10)(b)4. 4. If the commissioner asks for additional information under this provision, the period in par. (b) does not include the period during which the insurer is preparing the requested information.

Ins 3.455 History History: Cr. Register, April, 1991, No. 424, eff. 6-1-91; cr. (9), Register, July, 1996, No. 487, eff. 8-1-96; CR 00-188: cr. (3) (c) to (g), (5) (b) 10. to 13., (d), (9m) and (10), am. (9) (e), r. and recr. (9) (f), Register July 2001, No. 547 eff. 1-1-02; EmR0817: emerg. r. and recr. (3), am. (7) (b) to (d), cr. (7) (e) to (j), eff. 6-3-08; CR 08-032: r. and recr. (3), am. (7) (b) to (d), cr. (7) (e) to (j) Register October 2008 No. 634, eff. 11-1-08; correction in (2) (b) 3. made under s. 13.92 (4) (b) 7., Stats., Register October 2008 No. 634.

Ins 3.455 Note Note: CR 08-032 first applies to policies or certificates issued on or after January 1, 2009 or on the first renewal date on or after January 1, 2009, but no later than January 1, 2010 for collectively bargained policies or certificates.

Ins 3.46 Ins 3.46 Standards for long-term care, nursing home and home health care insurance and life insurance-long-term care coverage.

Ins 3.46(1) (1) Findings. The findings under s. Ins 3.455 (1) are incorporated by reference. The commissioner finds that the adoption of minimum standards, compensation restrictions and disclosure requirements for long-term care and life insurance-long-term care coverage will reduce marketing abuses and will assist consumers in their attempts to understand the benefits offered and to compare different products. The commissioner finds that failure to comply with this section is misleading and deceptive under s. 628.34 (12), Stats., and constitutes an unfair trade practice.

Ins 3.46(2) (2) Applicability.

Ins 3.46(2)(b) (b) This section, except for sub. (10) (b) to (e), does not apply to an individual long-term care policy or life insurance-long-term care coverage, to a group long-term care policy or life insurance-long-term care coverage or a certificate under the group policy, or to a renewal policy or coverage or certificate, if:

Ins 3.46(2)(b)1. 1. The individual long-term care policy or life insurance-long-term care coverage was issued prior to June 1, 1991; or

Ins 3.46(2)(b)2. 2. The group policy is issued prior to June 1, 1991 and all certificates under the policy are issued prior to June 1, 1991.

Ins 3.46(2)(c) (c) Section Ins 3.46 in effect prior to June 1, 1991 and sub. (10) (b) to (e) apply to those policies, coverages or certificates which qualify for exemption under par. (b).

Ins 3.46(2)(d) (d) This section does not apply to an accelerated benefit coverage of a life insurance policy, rider or endorsement that:

Ins 3.46(2)(d)1. 1. Provides payments on the occurrence of a severe illness or injury without regard to the incurral of expenses for services relating to the illness or injury; and

Ins 3.46(2)(d)2. 2. Is not sold primarily for the purpose of providing coverage of nursing home or home health care, or both.

Ins 3.46(3) (3) Definitions. In this section:

Ins 3.46(3)(a) (a) “Assisted living facility” or “assisted living care facility” means a living arrangement in which people with special needs reside in a facility that provides supportive services to persons unable to live independently and requires supportive services, including, but not limited to, personal care and assistance taking medications, and that is in compliance with ch. DHS 89.

Ins 3.46(3)(b) (b) “Cognitive impairment” means a deficiency in a person’s short-term or long-term memory, orientation as to person, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.

Ins 3.46(3)(c) (c) “Compensation” means remuneration of any kind, including, but not limited to, pecuniary or non-pecuniary remuneration, commissions, bonuses, gifts, prizes, awards, finder’s fees, and policy fees.

Ins 3.46(3)(d) (d) “Department” means the Wisconsin department of health services.

Ins 3.46(3)(e) (e) “Group long-term care insurance” means a long-term care insurance policy that is delivered or issued for delivery in this state and issued to one or more employers or labor organizations or to a trust or to the trustees of a fund established by one or more employers or labor organizations, or both, for employees or former employees, or both, or for members or former members, or both, of the labor organizations; or a professional, trade or occupational association for its members or former or retired members, or both, if the association is composed of individuals all of whom are or were actively engaged in the same profession, trade or occupation and has been maintained in good faith for purposes other than obtaining insurance or an association or a trust or the trustees of a fund established, created or maintained for the benefit of members of one or more associations. Prior to advertising, marketing or offering the policy within this state the association or the insurer of the association shall demonstrate that at least 25% of its members are residents of this state.

Ins 3.46(3)(f) (f) “Guaranteed renewable for life” means an individual policy renewal provision that continues the insurance in force unless the premium is not paid on time, that prohibits the insurer from changing any provision of the policy, endorsement or rider while the insurance is in force without the express consent of the insured, and that requires the insurer to renew the policy, endorsement or rider for the life of the insured and to maintain the rates in effect for the policy, endorsement or rider at time of issuance, except the provision may permit the insurer to revise rates but on a class basis only.

Ins 3.46(3)(g) (g) “Guide to long-term care” means the booklet prescribed by the commissioner which provides information on long-term care, including insurance, and advice to consumers on the purchase of long-term care insurance.

Ins 3.46(3)(h) (h) “Home health care services” means medical and non-medical 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.

Ins 3.46(3)(i) (i) “Irreversible dementia” means deterioration or loss of intellectual faculties, reasoning power, memory, and will due to organic brain disease characterized by confusion, disorientation, apathy or stupor of varying degrees that is not capable of being reversed and from which recovery is impossible. Irreversible dementia includes, but is not limited to, Alzheimer’s disease.

Ins 3.46(3)(j) (j) “Life insurance-long-term care coverage” means coverage that includes all of the following:

Ins 3.46(3)(j)1. 1. Provides coverage for convalescent or custodial care or care for a chronic condition or terminal illness.

Ins 3.46(3)(j)2. 2. Is included in a life insurance policy or an endorsement or rider to a life insurance policy.

Ins 3.46(3)(k) (k) “Long-term care insurance” means any insurance policy or rider advertised, marketed, offered or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense incurred, indemnity, prepaid or other basis; 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. The term includes group and individual annuities and life insurance policies or riders that provide directly or supplement long-term care insurance. The term also includes a policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity. The term includes qualifying partnership policies. Long-term care insurance may be issued by insurers; fraternal benefit societies; nonprofit health, hospital, and medical service corporations; prepaid health plans; health maintenance organizations or any similar organization to the extent they are otherwise authorized to issue life or health insurance. Long-term care insurance does not include an insurance policy that is offered primarily to provide basic Medicare supplement coverage. With regard to life insurance, this term does not include life insurance policies that accelerate the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention or permanent institutional confinement, and that provide the option of a lump-sum payment for those benefits and where neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long-term care. Notwithstanding any other provision of this section, any product advertised, marketed or offered as long-term care insurance shall be subject to the provisions of this section.

Ins 3.46(3)(L) (L) “Long-term care insurance policy qualifying for the Wisconsin Long-Term Care Insurance Partnership Program” or “qualifying partnership policy” means a long-term care insurance policy that is intended to qualify an insured under the Wisconsin Long-Term Care Insurance Partnership Program, as defined at s. 49.45 (31) (a), Stats.

Ins 3.46(3)(m) (m) “Long-term care policy” means a disability insurance policy, or an endorsement or rider to a disability insurance policy, designed or intended primarily to be marketed to provide coverage for care that is convalescent or custodial care or care for a chronic condition or terminal illness. Long-term care policy includes, but is not limited to, a nursing home policy, endorsement or rider and a home health care policy, endorsement or rider. The term does not include any of the following:

Ins 3.46(3)(m)1. 1. A Medicare supplement policy, Medicare replacement policy, or an endorsement or rider to such a policy.

Ins 3.46(3)(m)2. 2. A continuing care contract, as defined in s. 647.01 (2), Stats.

Ins 3.46(3)(m)3. 3. A rider designed specifically to meet the requirements for coverage of skilled nursing care under s. 632.895 (3), Stats.

Ins 3.46(3)(m)4. 4. Life insurance-long-term care coverage.

Ins 3.46(3)(n) (n) “Medicaid” means the federal and state entitlement program that pays for medical assistance for certain individuals and families with low incomes and resources established by Title XIX, 42 U.S.C. 1396 to 1396r-3. The federal government provides matching funds to the state Medicaid programs.

Ins 3.46(3)(o) (o) “Medicare” means the hospital and medical insurance program established by Title XVIII, 42 U.S.C. 1395 to 1395ss, as amended.

Ins 3.46(3)(p) (p) “Medicare eligible persons” means persons who qualify for Medicare.

Ins 3.46(3)(q) (q) “Mental or nervous disorder” may not be defined to include more than neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder.

Ins 3.46(3)(r) (r) “Noncancellable” means an individual policy in which the insured has the right to continue the 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.

Ins 3.46(3)(s) (s) “Outline of coverage” means a document that gives a brief description of benefits in the format prescribed in Appendix 1 to this section and which complies with sub. (8).

Ins 3.46(3)(t) (t) “Personal care” means the provision of hands-on services to assist an individual with activities of daily living.

Ins 3.46(3)(u) (u) “Qualified long-term care services” means services that meet the requirements of section 7702(c)(1) of the Internal Revenue Code of 1986, as amended, including the following:

Ins 3.46(3)(u)1. 1. Necessary diagnostic, preventive, therapeutic, curative, treatment, mitigation and rehabilitative services.

Ins 3.46(3)(u)2. 2. Maintenance or personal care services that are required by a chronically ill individual.

Ins 3.46(3)(u)3. 3. Services that are provided pursuant to a plan of care prescribed by a licensed health care practitioner.

Ins 3.46(3)(v) (v) “Skilled nursing care,” “personal care,” “home care,” “specialized care,” “assisted living 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 shall be delivered.

Ins 3.46(3)(x) (x) “Wisconsin Long-Term Care Insurance Partnership Program” or “state partnership program” means the program developed by the department to meet the requirements of s. 49.45 (31), Stats.

Ins 3.46(4) (4) General form requirements for long-term care, nursing home and home health care policies and life insurance-long-term care coverage. Forms for a long-term care policy, life insurance-long-term care coverage and certificates shall:

Ins 3.46(4)(a) (a) Provide coverage for each person insured for convalescent and custodial care and care for chronic conditions and terminal illness.

Ins 3.46(4)(b) (b) Establish fixed daily benefit limits only if the highest limit is not less than $60 per day. This fixed daily benefit applies to the total long-term care insurance in force for any one insured.

Ins 3.46(4)(c) (c) Establish a fixed daily benefit limit based on the level of the covered care only if the lowest limit of daily benefits provided for under the policy or coverage is not less than 50% of the highest limit of daily benefits and the following when applicable:

Ins 3.46(4)(c)1. 1. If the policy provides for home health or community care services, it shall provide total home health or community care coverage that is a dollar amount equivalent to at least one-half of one year’s coverage available for nursing home benefits under the policy or certificate, at the time covered home health or community care services are being received. This requirement may not apply to policies or certificates issued to residents of continuing care retirement communities.

Ins 3.46(4)(c)2. 2. 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.

Ins 3.46(4)(d) (d) Provide for an elimination period only if:

Ins 3.46(4)(d)1. 1. It is expressed in a number of days per lifetime or per period of confinement;

Ins 3.46(4)(d)2. 2. It is clearly disclosed;

Ins 3.46(4)(d)3. 3. Days for which Medicare provides coverage are counted for the purpose of determining expiration of the elimination period; and

Ins 3.46(4)(d)4. 4. It does not exceed 365 days.

Ins 3.46(4)(e) (e) Provide for a lifetime maximum limit only if the limit provides not less than 365 days of coverage. Only days of coverage under the policy, coverage or certificate may be applied against a lifetime maximum limit. Coverage by Medicare may not be applied against a lifetime maximum limit.

Ins 3.46(4)(f) (f) Clearly disclose that it does not cover duplicate payments by Medicare for nursing home care or home health care if it has either exclusion.

Ins 3.46(4)(g) (g) Provide coverage regardless of whether care is medically necessary. Coverage shall be triggered in conformance with the provisions contained in subs. (17) and (18).

Ins 3.46(4)(h) (h) Not limit or condition coverage or benefits by requiring prior hospitalization or prior receipt of care, or benefits for care, in an institutional setting.

Ins 3.46(4)(i) (i) Cover irreversible dementia. Coverage may not be excluded or limited on the basis of irreversible dementia.

Ins 3.46(4)(j) (j) Define terms used to describe covered services, including, but not limited to, “skilled nursing care,” extended care facility,” “convalescent nursing home,” “personal care,” or “home care” services, if those terms are used, in relation to the services and facilities required to be available and the licensure, certification, registration or degree status of those providing or supervising the services. When the definition requires that the provider be appropriately licensed, certified or registered, it shall also state what requirements a provider shall meet in lieu of licensure, certification or registration when the state in which the service is to be furnished does not require a provider of these services to be licensed, certified or registered, or when the state licenses, certifies or registers the providers of services under another name.

Ins 3.46(4)(k) (k) All providers of services, including, but not limited to, “skilled nursing facility,” “extended care facility,” “convalescent nursing home,” “personal care facility,” “specialized care providers,” “assisted living,” and “home care agency,” shall be defined in relation to the services and facilities required to be available and the licensure, certification, registration or degree status of those providing or supervising the services in the state where the policy was issued. When the definition requires that a provider be appropriately licensed, certified or registered, it shall also state what requirements a provider shall meet in lieu of licensure, certification or registration when the state in which the service is to be furnished does not require a provider of such services to be licensed, certified or registered, or if the state licenses, certifies or registers the provider of services under another name.

Ins 3.46(4)(m) (m) Not exclude or limit coverage by type of illness, treatment, medical condition or accident, except it may include exclusions or limits for any of the following:

Ins 3.46(4)(m)1. 1. Preexisting conditions or diseases. If a long-term care insurance policy or certificate contains any limitations with respect to preexisting conditions, the limitations shall appear as a separate paragraph of the policy and shall be labeled as “Preexisting Condition Limitations.”

Ins 3.46(4)(m)2. 2. Illness, treatment or medical condition arising out of any one or more of the following: