Chapter Ins 3

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:

Ins 3.46(4)(m)2.a. a. Treatment provided in a government facility, unless otherwise required by law.

Ins 3.46(4)(m)2.b. b. Services for which benefits are available under Medicare or other governmental programs, except Medicaid, or under a state or federal worker’s compensation, employer’s liability, occupational disease law, or any motor vehicle no-fault law.

Ins 3.46(4)(m)2.c. c. Services provided by a member of the insured’s immediate family or for which no charge is normally made in the absence of insurance.

Ins 3.46(4)(m)2.d. d. War or act of war, whether declared or undeclared.

Ins 3.46(4)(m)2.e. e. Participation in a felony, riot or insurrection.

Ins 3.46(4)(m)2.f. f. Service in the armed forces or its auxiliary units.

Ins 3.46(4)(m)2.g. g. Suicide, sane or insane, attempted suicide or intentionally self-inflicted injury.

Ins 3.46(4)(m)2.h. h. Aviation, however, this exclusion applies only to non-fare-paying passengers.

Ins 3.46(4)(m)3. 3. Mental or nervous disorders; however, this may not permit exclusion or limitation of benefits on the basis of Alzheimer’s Disease.

Ins 3.46(4)(m)4. 4. Alcoholism or drug addiction.

Ins 3.46(4)(m)5. 5. Expenses for services or items available or paid under another long-term care insurance or health insurance policy.

Ins 3.46(4)(m)6. 6. This paragraph is not intended to prohibit exclusions or limitation by type of provider. In this subdivision, “state of policy issue” means the state in which the individual policy or certificate was originally issued. However, no long-term care insurer may deny a claim because services are provided in a state other than the state of policy issue when either of the following conditions occurs:

Ins 3.46(4)(m)6.a. a. When a state other than the state of policy issue does not have the provider licensing, certification, or registration required in the policy, but where the provider satisfies the policy requirements outlined for providers in lieu of licensure, certification or registration.

Ins 3.46(4)(m)6.b. b. When a state other than the state of policy issue licenses, certifies or registers the provider under another name.

Ins 3.46(4)(m)7. 7. This paragraph is not intended to prohibit territorial limitations.

Ins 3.46(4)(m)8. 8. If payment of benefits is based on standards described as “usual and customary,” “reasonable and customary” or words of similar import shall include a definition of these terms and include an explanation of the terms in its accompanying outline of coverage and comply with s. Ins 3.60 (5).

Ins 3.46(4)(m)9. 9. 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 Medicare or would be so reimbursable but for the application of a deductible or coinsurance amount.

Ins 3.46(4)(m)10. 10. Subject to the policy provisions, any plan of care required under the policy shall be provided by a licensed health care practitioner and does not require insurer approval. The insurer may provide a predetermination of benefits payable pursuant to the plan of care. This does not prevent the insurer from having discussions with the licensed health care practitioner to amend the plan of care. The insurer may also retain the right to verify that the plan of care is appropriate and consistent with generally accepted standards.

Ins 3.46(4)(m)11. 11. A long-term care policy containing post-confinement, post-acute care, or recuperative benefits shall include in a separate policy provision entitled “Limitation or Conditions on Eligibility for Benefits,” the limitations or conditions applicable to these benefits, including any required number of days of confinement.

Ins 3.46(4)(n) (n) Not exclude or limit any coverage of care provided in a community-based setting, including, but not limited to, coverage of home health care, by any of the following:

Ins 3.46(4)(n)1. 1. Requiring that care be medically necessary.

Ins 3.46(4)(n)2. 2. Requiring that the insured or claimant first or simultaneously receive nursing or therapeutic services before community-based care is covered.

Ins 3.46(4)(n)3. 3. Limiting eligible services to services provided by registered nurses or licensed practical nurses.

Ins 3.46(4)(n)4. 4. Requiring that the insured have an acute condition before community-based care is covered.