Chapter Ins 3

Ins 3.46(14)(c)1.d. d. If that policy lapsed, when did it lapse?

Ins 3.46(14)(c)1.e. e. Are you covered by Medicaid?

Ins 3.46(14)(c)1.f. f. Do you intend to replace any of your medical or health insurance coverage with this policy [certificate]?

Ins 3.46(14)(c)2. 2. Agents shall list any other health insurance policies they have sold to the applicant, including all of the following:

Ins 3.46(14)(c)2.a. a. List policies sold that are still in force.

Ins 3.46(14)(c)2.b. b. List policies sold in the past 5 years that are no longer in force.

Ins 3.46(14)(c)3. 3. Upon determining that a sale will involve replacement, an insurer; other than an insurer using direct response solicitation methods, or its intermediaries; 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 the 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 compliance with Appendix 6.

Ins 3.46(14)(c)4. 4. 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 compliance with Appendix 7.

Ins 3.46(14)(c)5. 5. Where replacement is intended, the replacing insurer shall notify, in writing, the existing insurer of the proposed replacement. The existing policy shall be identified by the insurer, name of the insured and policy number or address including zip code. Notice shall be made within 5 working days from the date the application is received by the insurer or the date the policy is issued, whichever is sooner.

Ins 3.46(14)(c)6. 6. Life insurance policies that accelerate benefits for long-term care shall comply with this section if the policy being replaced is a long-term care insurance policy. If the policy being replaced is a life insurance policy, the insurer shall comply with the replacement requirements of s. Ins 2.07. If a life insurance policy that accelerates benefits for long-term care is replaced by another such policy, the replacing insurer shall comply with both the long-term care and the life insurance replacement requirements.

Ins 3.46(14)(d) (d) An intermediary taking an application for a long-term care policy or certificate shall do all of the following:

Ins 3.46(14)(d)1. 1. List any other health insurance policies or certificates the intermediary has sold to the applicant.

Ins 3.46(14)(d)2. 2. List separately the policies or certificates that are still in force.

Ins 3.46(14)(d)3. 3. List policies or certificates sold in the past which are no longer in force.

Ins 3.46(14)(d)4. 4. Submit the lists to the insurer with the application.

Ins 3.46(14)(e) (e) Every insurer and person marketing long-term care insurance coverage in this state, directly or through its intermediaries, shall do all of the following:

Ins 3.46(14)(e)1. 1. Establish marketing procedures to assure that any comparison of policies by its intermediaries or other producers will be fair and accurate.

Ins 3.46(14)(e)2. 2. Establish marketing procedures to assure excessive insurance is not sold or issued.

Ins 3.46(14)(e)3. 3. Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for a long-term care policy or certificate already has an accident and sickness or a long-term care policy or certificate and the types and amounts of any such insurance, except that in the case of qualified long-term care insurance contract, an inquiry into whether a prospective applicant or enrollee for long-term care insurance has accident and sickness insurance is not required.

Ins 3.46(14)(e)4. 4. Establish auditable procedures for verifying compliance with this paragraph.

Ins 3.46(14)(f) (f) In recommending the purchase or replacement of any long-term care policy or certificate an intermediary shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement.

Ins 3.46(14)(g) (g) Replacement of long-term care, nursing home and home health care policies and certificates issued prior to June 1, 1991 is also subject to this subsection.

Ins 3.46(15) (15) Unintentional lapse; long-term care, nursing home and home health care policies.

Ins 3.46(15)(a) (a) As part of the application process, an insurer shall obtain from the applicant either a written designation of at least one person, in addition to the applicant, who is to receive a notice of lapse or termination of the policy or certificate for nonpayment of premium or a written waiver dated and signed by the applicant electing not to designate additional persons to receive notice. Designation may not constitute acceptance of any liability by the third party for services provided to the insured. The written designation shall include the following:

Ins 3.46(15)(a)1. 1. Space for clearly listing at least one person.

Ins 3.46(15)(a)2. 2. The person’s name and address.

Ins 3.46(15)(a)3. 3. In the case of an applicant who elects not to designate an additional person, the waiver shall state, “Protection against unintentional lapse. I understand that I have a right to designate at least one person, other than myself, to receive notice of lapse or termination of this policy for nonpayment of premium. I understand that notice will not be given until 30 days after a premium is due and unpaid. I elect NOT to designate any person to receive such notice.”

Ins 3.46(15)(b) (b) For those insureds who designate another person as provided in par. (a), the insurer, after the policy or certificate is issued shall send a letter to the designated person indicating that the insured has designated the person to receive notice of lapse or termination of the insured’s long-term care, nursing home or home health care policy or certificate. The letter shall ask the person to correct any information concerning the name or address of the person. It shall also explain the rights and duties of the designated person.

Ins 3.46(15)(c) (c) Not less than once every 2 years an insurer shall notify its policyholders of their right to designate a person to receive the notices contained in par. (a). The notification shall allow policyholders to change, add to or, in the case of those policyholders who elected not to designate a person, designate a person to receive the notices provided in par. (a).

Ins 3.46(15)(d) (d) When an insured pays premium through a payroll deduction plan, the requirements contained in par. (a) need not be met until 60 days after the insured is no longer on a payroll deduction plan. The application or enrollment form for such policies or certificates shall clearly indicate the payment plan selected by the applicant.

Ins 3.46(15)(e) (e) No long-term care, nursing home, or home health care policy or certificate shall lapse or be terminated for nonpayment of premium unless the insurer, at least 30 days before the effective date of the lapse or termination, has given notice to the insured and to those designated by the insured pursuant to par. (a) at the address provided by the insured for purposes of receiving notices of lapse or termination. Notice may not be given until 30 days after a premium is due and unpaid.

Ins 3.46(16) (16) Suitability; long-term care, nursing home and home health care policies.

Ins 3.46(16)(a) (a) This subsection may not apply to life insurance policies that accelerate benefits for long-term care.

Ins 3.46(16)(b) (b) Every insurer marketing long-term care insurance policies shall do all of the following:

Ins 3.46(16)(b)1. 1. Develop and use suitability standards to determine whether the purchase or replacement of long-term care insurance is appropriate for the needs of the applicant.

Ins 3.46(16)(b)2. 2. Train its agents in the use of its suitability standards.

Ins 3.46(16)(b)3. 3. Maintain a copy of its suitability standards.

Ins 3.46(16)(b)4. 4. Report annually to the commissioner all of the following:

Ins 3.46(16)(b)4.a. a. The total number of applications received from residents of this state.

Ins 3.46(16)(b)4.b. b. The number of those who declined to provide information on the personal worksheet.

Ins 3.46(16)(b)4.c. c. The number of applicants who did not meet the suitability standards.

Ins 3.46(16)(b)4.d. d. The number of applicants who chose to confirm after receiving a suitability letter.

Ins 3.46(16)(c) (c)

Ins 3.46(16)(c)1. 1. To determine whether the applicant meets the standards developed by the insurer, the agent and insurer shall develop procedures that take the following into consideration:

Ins 3.46(16)(c)1.a. a. The ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage.

Ins 3.46(16)(c)1.b. 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.

Ins 3.46(16)(c)1.c. 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.

Ins 3.46(16)(c)2. 2. The insurer, and where an agent is involved, the agent shall make reasonable efforts to obtain the information set out in subd. 1. 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 insurer shall contain, at a minimum, the information in the format contained in Appendix 2, in not less than 12 point type. The insurer may request the applicant to provide additional information to comply with its suitability standards. A copy of the insurer’s personal worksheet shall be filed with the commissioner.

Ins 3.46(16)(c)3. 3. A completed personal worksheet shall be returned to the insurer prior to the insurer’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.

Ins 3.46(16)(c)4. 4. The sale or dissemination outside the company or agency by the insurer or agent of information obtained through the personal worksheet in Appendix 2 is prohibited.

Ins 3.46(16)(d) (d) The insurer 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.

Ins 3.46(16)(e) (e) Agents shall use the suitability standards developed by the insurer in marketing long-term care insurance.

Ins 3.46(16)(f) (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 3, in not less than 12 point type.

Ins 3.46(16)(g) (g) If the insurer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the insurer may reject the application. In the alternative, the insurer shall send the applicant a letter similar to the sample letter in Appendix 4. However, if the applicant has declined to provide financial information, the insurer 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.

Ins 3.46(16)(h) (h) The insurer shall maintain and have available for review by 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, after receiving a suitability letter, indicated that the insurer should resume processing the application.

Ins 3.46(17) (17) Standards for benefit triggers; long-term care, nursing home and home health care policies.

Ins 3.46(17)(a) (a) The following definitions apply to this subsection:

Ins 3.46(17)(a)1. 1. “Activities of daily living” includes at least bathing, continence, dressing, eating, toileting, and transferring.

Ins 3.46(17)(a)2. 2. “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.

Ins 3.46(17)(a)3. 3. “Cognitive impairment” means a deficiency in a person’s short- 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(17)(a)4. 4. “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.

Ins 3.46(17)(a)5. 5. “Dressing” means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs.

Ins 3.46(17)(a)6. 6. “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.

Ins 3.46(17)(a)7. 7. “Hands-on assistance” means physical assistance, either minimal, moderate or maximal, without which the individual would not be able to perform the activity of daily living.

Ins 3.46(17)(a)8. 8. “Toileting” means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.

Ins 3.46(17)(a)9. 9. “Transferring” means moving into or out of a bed, chair or wheelchair.

Ins 3.46(17)(b) (b) A long-term care, nursing home only and home health care only policy or certificate 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 may not be more restrictive than requiring either a deficiency in the ability to perform not more than 3 of the activities of daily living or the presence of cognitive impairment.

Ins 3.46(17)(c) (c)

Ins 3.46(17)(c)1. 1. Activities of daily living shall include at least those contained in the definition in par. (a).

Ins 3.46(17)(c)2. 2. Insurers may use deficiencies to perform activities of daily living to determine when covered benefits are payable in addition to those contained in par. (a) as long as they are defined in the policy.

Ins 3.46(17)(d) (d) An insurer may use additional provisions for the determination of when benefits are payable under a policy or certificate; however, the provisions may not restrict, and are not in lieu of, the requirements contained in pars. (b) and (c).

Ins 3.46(17)(e) (e) For purposes of this section, the determination of a deficiency may not be more restrictive than any of the following:

Ins 3.46(17)(e)1. 1. Requiring hands-on assistance of another person to perform the prescribed activities of daily living.

Ins 3.46(17)(e)2. 2. If the deficiency is due to the presence of cognitive impairment, supervision or verbal cueing by another person is needed in order to protect the insured and others.

Ins 3.46(17)(f) (f) Assessments of activities of daily living and cognitive impairment shall be performed by licensed or certified professionals, such as physicians, nurses or social workers.

Ins 3.46(17)(g) (g) Long-term care, nursing home only and home health care only policies shall include a clear description of the process for appealing and resolving benefit determinations.

Ins 3.46 Note Note: The rule revision effective August 1, 1996 applies to any policy solicited, delivered or issued after September 1, 1996. After August 1, 1996 but before September 1, 1996, the insurer may market policies under either the current rule or the revised rule, if a policy form conforming to this section has been approved.

Ins 3.46(18) (18) Tax qualified long term care, nursing home and home health care policies. This subsection applies to long term care, nursing home or home health care policies which are intended to be tax qualified under and comply with the requirements of section 7702B of the Internal Revenue Code of 1986, as amended, and any regulations and administrative pronouncements issued under the Code.

Ins 3.46(18)(a) (a) In order to qualify for certain tax treatment, long term care, nursing home only and home health care only policy provisions may contain the following conditions as defined in section 7702B of the Internal Revenue Code of 1986 as amended and any regulations and administrative pronouncements issued thereunder notwithstanding sub. (17):

Ins 3.46(18)(a)1. 1. The terms “severe cognitive impairment” and “substantial supervision” may be used in lieu of the term “cognitive impairment” and its accompanying supervision requirement may be used as a benefit trigger in sub. (17) (a) 3. and (e) 2.

Ins 3.46(18)(a)2. 2. The term “substantial assistance” may be used in lieu of the term “hands-on-assistance” in sub. (17) (c) 1.

Ins 3.46(18)(a)3. 3. The requirement that the claimant obtain a certification from a licensed health care practitioner, as defined in section 7702B of the Internal Revenue Code of 1986, as amended, and any regulations and administrative pronouncements issued under the Code, as a condition for claim payment that the functional incapacity or inability to perform at least 2 activities of daily living triggering benefits under the policy is expected to last at least 90 days, may be imposed by the insurer.

Ins 3.46(18)(a)4. 4. Except as noted in subds. 1., 2. and 3., the definitions and provisions in sub. (17) apply to this subsection.

Ins 3.46(18)(b) (b) The policy shall contain a clear disclosure that the policy is intended to be a tax qualified long term care policy.

Ins 3.46(18)(c) (c) The outline of coverage shall prominently disclose that, in order to meet the requirements of a tax qualified policy, the functional incapacity or inability to perform activities of daily living triggering benefits under the policy must be expected to last for at least 90 days.

Ins 3.46(18)(d) (d) All other applicable provisions in this section or s. Ins 3.455 shall continue to apply to tax qualified long term care, nursing home and home health care policies.

Ins 3.46(19) (19) Nonforfeiture benefit requirements for long-term care.

Ins 3.46(19)(a) (a) No insurer may advertise, market or offer a long–term care, nursing home only or home health care only policy or certificate unless the insurer offers, at the time of sale, a shortened benefit period nonforfeiture benefit.

Ins 3.46(19)(b) (b) If the offer required to be made under par. (a) is rejected, the insurer shall provide the contingent benefit upon lapse described in this section.