§ 89a.105. Policy practices and provisions.
(a) Renewability. The terms guaranteed renewable and noncancellable may not be used in an individual long-term care insurance policy without further explanatory language in accordance with the disclosure requirements of § 89a.108 (relating to required disclosure of rating practices to consumers).
(1) A policy issued to an individual may not contain renewal provisions other than guaranteed renewable or noncancellable.
(2) The term guaranteed renewable may be used only when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums and when the insurer has no unilateral right to make a change in a provision of the policy or rider while the insurance is in force, and cannot decline to renew, except that rates may be revised by the insurer on a class basis.
(3) The term noncancellable may be used only when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums during which period the insurer has no right to unilaterally make a change in a provision of the insurance or in the premium rate.
(4) The term level premium may only be used when the insurer does not have the right to change the premium.
(5) In addition to the requirements of this subsection, a qualified long-term care insurance contract shall be guaranteed renewable, within the meaning of section 7702B(b)(1)(C) of the Internal Revenue Code of 1986 (26 U.S.C.A. § 7702B(b)(1)(C)).
(b) Limitations and exclusions.
(1) A policy may not be delivered or issued for delivery in this Commonwealth as long-term care insurance if the policy limits or excludes coverage by type of illness, treatment, medical condition or accident, except as follows:
(i) Preexisting conditions or diseases.
(ii) Mental or nervous disorders; however, this may not permit exclusion or limitation of benefits on the basis of clinically daignosed Alzheimers Disease or related degenerative or dementing illnesses.
(iii) Alcoholism and drug addiction.
(iv) Illness, treatment or medical condition arising out of any of the following:
(A) War or act of war (whether declared or undeclared).
(B) Participation in a felony, riot or insurrection.
(C) Service in the armed forces or units auxiliary thereto.
(D) Suicide (sane or insane), attempted suicide or intentionally self-inflicted injury.
(E) Aviation (this exclusion applies only to nonfare-paying passengers).
(v) Treatment provided in a government facility (unless a charge is made and the insured is legally obligated to pay), services for which benefits are available under Medicare or other governmental program except Medicaid, a state or Federal workers compensation, employers liability or occupational disease law or services provided by a member of the covered persons immediate family and services for which no charge is normally made in the absence of insurance.
(vi) Expenses for services or items available or paid under another long-term care insurance or health insurance policy.
(vii) In the case of a qualified long-term care insurance contract, expenses for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act (Medicare) (42 U.S.C.A. § § 13951395ggg) or would be so reimbursable but for the application of a deductible or coinsurance amount.
(2) This subsection is not intended to prohibit exclusions and limitations by type of provider or territorial limitations.
(3) Benefits otherwise payable under a long-term care policy shall be payable in excess of and not in duplication of valid and collectable first party benefits under a state motor vehicle responsibility law. See 75 Pa.C.S. § § 17011798 (relating to Motor Vehicle Financial Responsibility Law).
(c) Extension of benefits. Termination of long-term care insurance shall be without prejudice to benefits payable for institutionalization if the institutionalization began while the long-term care insurance was in force and continues without interruption after termination. The extension of benefits beyond the period the long-term care insurance was in force may be limited to the duration of the benefit period or to payment of the maximum benefits and may be subject to a policy waiting period and other applicable provisions of the policy.
(d) Continuation or conversion.
(1) Group long-term care insurance issued in this Commonwealth on or after March 16, 2002, shall provide covered individuals with a basis for continuation or conversion of coverage.
(2) For the purposes of this section, a basis for continuation of coverage means a policy provision that maintains coverage under the existing group policy when the coverage would otherwise terminate and which is subject only to the continued timely payment of premium when due. Group policies that restrict provision of benefits and services to, or contain incentives to use certain providers or facilities may provide continuation benefits that are substantially equivalent to the benefits of the existing group policy. The Commissioner will make a determination as to the substantial equivalency of benefits, and in doing so, will take into consideration the differences between managed care and nonmanaged care plans, including, but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity.
(3) For the purposes of this section, a basis for conversion of coverage means a policy provision that an individual whose coverage under the group policy would otherwise terminate or has been terminated for a reason, including discontinuance of the group policy in its entirety or with respect to an insured class, and who has been continuously insured under the group policy (and a group policy which it replaced), for at least 6 months immediately prior to termination, will be entitled to the issuance of a converted policy by the insurer under whose group policy the individual is covered, without evidence of insurability.
(4) For the purposes of this section, converted policy means an individual policy of long-term care insurance providing benefits identical to or benefits determined by the Commissioner to be substantially equivalent to or in excess of those provided under the group policy from which conversion is made. When the group policy from which conversion is made restricts provision of benefits and services to, or contains incentives to use certain providers or facilities, the Commissioner, in making a determination as to the substantial equivalency of benefits, will take into consideration the differences between managed care and nonmanaged care plans, including, but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity.
(5) Written application for the converted policy shall be made and the first premium due, if applicable, shall be paid as directed by the insurer not later than 31 days after termination of coverage under the group policy. The converted policy shall be issued effective on the day following the termination of coverage under the group policy, and shall be renewable annually.
(6) When an insured converts from a group policy with rates based on the issue age of the insured to a conversion policy, the premium for the conversion policy shall be calculated on the basis of the insureds age at inception of continuous coverage on the original group policy and any other group policy which replaced the original group policy. When an insured converts from a group policy with rates based on the attained age of the insured, the premium for the conversion policy shall be calculated on the insureds age as of the date of conversion.
(7) Continuation of coverage or issuance of a converted policy shall be mandatory, except when:
(i) Termination of group coverage resulted from an individuals failure to make the required payment of premium or contribution when due.
(ii) The terminating coverage is replaced not later than 31 days after termination, by group coverage effective on the day following the termination of coverage. Both of the following provisions apply:
(A) Providing benefits identical to or benefits determined by the Commissioner to be substantially equivalent to or in excess of those provided by the terminating coverage.
(B) The premium for which is calculated in a manner consistent with paragraph (6).
(8) Notwithstanding this section, a converted policy issued to an individual who at the time of conversion is covered by another long-term care insurance policy that provides benefits on the basis of incurred expenses, may contain a provision that results in a reduction of benefits payable if the benefits provided under the additional coverage, together with the full benefits provided by the converted policy, would result in payment of more than 100% of incurred expenses. The provision shall only be included in the converted policy if the converted policy also provides for a premium decrease or refund which reflects the reduction in benefits payable.
(9) The converted policy may provide that the benefits payable under the converted policy, together with the benefits payable under the group policy from which conversion is made, may not exceed those that would have been payable had the individuals coverage under the group policy remained in force and effect.
(10) Notwithstanding this section, an insured individual whose eligibility for group long-term care coverage is based upon the individuals relationship to another person shall be entitled to continuation of coverage under the group policy upon termination of the qualifying relationship by death or dissolution of marriage.
(11) For the purposes of this section a managed-care plan is a health care or assisted living arrangement designed to coordinate patient care or control costs through utilization review, case management or use of specific provider networks.
(e) Discontinuance and replacement. If a group long-term care policy is replaced by another group long-term care policy issued to the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the previous group policy on its date of termination. Coverage provided or offered to individuals by the insurer and premiums charged to persons under the new group policy may not result in an exclusion for preexisting conditions that would have been covered under the group policy being replaced and may not vary or otherwise depend on the individuals health or disability status, claim experience or use of long-term care services.
(f) Premium rate increase.
(1) The premium charged to an insured may not increase due to either of the following:
(i) The increasing age of the insured at ages beyond 65.
(ii) The duration the insured has been covered under the policy.
(2) The purchase of additional coverage may not be considered a premium rate increase, but for purposes of the calculation required under § 89a.123 (relating to nonforfeiture benefit requirement), the portion of the premium attributable to the additional coverage shall be added to and considered part of the initial annual premium.
(3) A reduction in benefits may not be considered a premium change, but for purpose of the calculation required under § 89a.123, the initial annual premium shall be based on the reduced benefits.
(g) Electronic enrollment for group policies.
(1) In the case of a group defined in section 1103 of the act (40 P. S. § 991.1103), a requirement that a signature of an insured be obtained by a producer or insurer shall be deemed satisfied if the following conditions are met:
(i) The consent is obtained by telephonic or electronic enrollment by the group policyholder or insurer. A verification of enrollment information shall be provided to the enrollee.
(ii) The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure the accuracy, retention and prompt retrieval of records.
(iii) The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure that the confidentiality of individually identifiable information is maintained.
(2) The insurer shall make available, upon request of the Commissioner, records that will demonstrate the insurers ability to confirm enrollment and coverage amounts.
This section cited in 31 Pa. Code § 89a.120 (relating to standards for marketing).
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