Sec. 52.25. Rules relating to the content and sale of forms for long term care insurance, nursing home insurance only, home care insurance only, and nursing home and home care insurance

The following shall be applicable to long term care insurance, nursing home insurance only, home care insurance only, and nursing home and home care insurance and shall be in addition to other requirements of this Part.

(a) Definitions.

(1) For purposes of this section, custodial care services means help in transferring, eating, dressing, bathing, toileting and other such related activities.

(2) For purposes of this section, home care services shall have the same meaning as defined in subsection 1 of section 3602 of the Public Health Law.

(3) For purposes of this section, nursing home shall have the same meaning as defined in subsection 2 of section 2801 of the Public Health Law.

(b) Policy practices and provisions.

(1) An individual long term care insurance policy, a nursing home insurance only, home care insurance only, or nursing home and home care insurance policy must be “guaranteed renewable”. The term guaranteed renewable as used in this section means that the insured has the right to continue the long term care insurance or nursing home insurance only, home care insurance only, or nursing home and home care insurance in force by the timely payment of premiums and the insurer has no unilateral right to make any change in any provision of the policy while the insurance is in force except, however, the premium rates may be revised by the insurer on a class basis.

(2) Limitations and exclusions. No policy or certificate may be delivered or issued for delivery in this State as long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance if such policy or certificate limits or excludes coverage by type of illness, treatment, medical condition or accident, except as follows:

(i) Preexisting conditions or diseases. Notwithstanding section 52.16(c) of this Part, the only permissible preexisting condition limitations applicable to long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance are ones which exclude coverage, for no more than six months after the effective date of coverage under the policy or certificate, for a condition for which medical advice was given or treatment was recommended by, or received from, a licensed health care provider within six months before the effective date of the coverage.

(ii) Mental or nervous disorders; however, this shall not permit exclusion or limitation of benefits on the basis of Alzheimer's disease or demonstrable organic brain disease.

(iii) Alcoholism and drug addiction.

(iv) Illness, treatment or medical condition arising out of:

(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, attempted suicide or intentionally self-inflicted injury; or

(e) aviation (this exclusion applies only to nonfare paying passengers).

(v) Treatment provided in a government facility (unless otherwise required by law), services for which benefits are provided under Medicare or other governmental program (except Medicaid), any state or Federal workers' compensation, employer's liability or occupational disease law, or any mandatory motor vehicle no-fault law, services provided by a member of the covered person's immediate family and services for which no charge is normally made in the absence of insurance.

(vi) Coverage while the insured is outside the United States and its possessions.

(3) Extension of benefits. Termination of long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance shall be without prejudice to any benefits payable under the policy, rider or certificate if eligibility for such benefits or total disability began while the long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance was in force and continues without interruption after termination. Such extension of benefits beyond the period the long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance was in force may be limited to the duration of the benefit period, if any, or to payment of the maximum benefits and may be subject to any policy or certificate waiting period, and all other applicable provisions of the policy or certificate, and in the case of home care benefits, may be limited to 12 months.

(4) Conversion and/or continuation.

(i) Every policy or certificate of long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance which provides coverage for dependents, however defined, of the named insured shall entitle those dependents, without evidence of insurability, to a conversion policy or certificate upon application therefore and payment of the first premium within 45 days after coverage under the prior policy or certificate shall have terminated.

(ii) Termination under the following circumstances shall give rise to the right to elect conversion:

(a) divorce or annulment;

(b) upon the attainment of the limiting age, if any, at which a covered insured's dependent status shall cease; and

(c) in addition to clause (a) and (b) of this subparagraph, for insureds covered under policies or certificates issued on a group basis the following circumstances shall give rise to the right to elect conversion:

(1) Termination of employment or membership in the group.

(2) Termination of the group policy or certificate.

(iii) Such conversion policy or certificate will be subject to the following conditions:

(a) The premium shall be that applicable to the class of risk to which such person belongs, to the age of such person and to the form and amount of insurance.

(b) Such policy or certificate shall provide the same or substantially the same benefits and at least as favorable renewal conditions as those contained in the policy or certificate from which conversion is sought.

(c) The benefits provided under such policy or certificate shall become effective upon the date that such person was no longer eligible under the previous policy or certificate.

(d) The policy or certificate may exclude any condition excluded under the policy or certificate from which conversion is sought but no new exclusions may be imposed.

(e) No insurer shall be required to issue a conversion policy or certificate if, at the time the person is applying for such coverage, the person is actually covered by other group or individual long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance such that issuance of such conversion policy or certificate would provide benefits in excess of the insurer's published overinsurance guidelines.

(iv) In place of conversion, an insurer may offer to insureds covered under a group policy or certificate the right to elect to continue coverage under the group policy or certificate. An insured shall have 45 days from the date coverage under the group policy or certificate ends in which to elect continuation. Conversion must be available in the event of termination of the group policy providing continuation benefits unless subparagraph (vii) of this paragraph applies.

(v) The events which give rise to the right to elect to continue shall be the same as those contained in subparagraph (ii) of this paragraph.

(vi) The right to convert or continue shall not arise where the group policyholder replaces one policy or certificate of long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance with another group policy or certificate providing the same or substantially the same benefits.

(vii) In the event that the right to continue arises due to termination of the group policy, said policy shall be deemed delivered to a trustee and all the terms and conditions contained in said policy shall be applicable to certificate holders who have elected to continue coverage thereunder.

(5) Only benefits that are reasonably related to long term care coverage may be added by rider or endorsement to policies or certificates providing at least the minimum level of benefits required by sections 52.12(a), 52.13(a) or (b) of this Part.

(c) Specific requirements for long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance.

(1) A long term care insurance, nursing home insurance only, home care insurance only and nursing home and home care insurance policy or certificate may not limit or exclude benefits:

(i) by requiring that the insured/claimant have a prior hospitalization or a prior specified level of care in order for another level of care in a nursing home or home care benefits to be covered;

(ii) by requiring that the insured/claimant first or simultaneously receive nursing and/or therapeutic services in a home or community setting before home care services are covered;

(iii) by limiting eligible services to services provided by registered nurses or licensed practical nurses;

(iv) by requiring that a nurse or therapist provide services covered by the policy or certificate that can be provided by a home health aide, or other licensed or certified home care worker acting within the scope of his or her license or certification;

(v) by requiring that the insured/claimant have an acute condition before services covered under a long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance policy or certificate are covered;

(vi) by limiting benefits to services provided by Medicare-certified agencies or providers.

(2) Home care benefits may be substituted on a reasonable basis for other benefits provided in the policy or certificate tn determining maximum coverage under the terms of the policy or certificate.

(3) No insurer may offer a long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance policy or certificate unless the insurer also offers to the policyholder or certificateholder the option to purchase a policy or certificate that provides for benefit levels (daily and lifetime maximums) to increase, without regard to claim status, to account for reasonably anticipated increases in the costs of services covered by the long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance policy or certificate. Insurers must offer to each policyholder or certificateholder, at the time of purchase, the option to purchase a policy or certificate with an inflation protection feature no less favorable than one of the following:

(i) increases benefit levels annually five percent or in proportion to the increase in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics or its successor, in a manner so that increases are compounded annually;

(ii) guarantees the insured individual the right to periodically increase benefit levels without providing evidence of insurability or health status so long as the option has not been declined for three consecutive times (accumulation of declined options is not required) and whenever the definition of the dollar amounts of sections 52.12 or 52.13 is increased for the amount of that increase only; or

(iii) covers a specified percentage of actual or reasonable charges.

(4) Where the policy is issued to a group, the required offer in paragraph (3) of this subdivision shall be made to the group policyholder if the group is an employer, union or professional association; for all other groups the offering shall be made to each proposed certificateholder.

(5) The offer in paragraph (3) of this subdivision shall not be required of expense incurred long term care insurance, nursing home insurance only, home care insurance only or nursing home and home care insurance policies or certificates without dollar maximums.

(6) Insurers shall include the following information in or with the disclosure statement:

(i) A graphic comparison of the benefit levels of a policy or certificate that increases benefits over the policy or certificate period with a policy or certificate that does not increase benefits. The graphic comparison shall show benefit levels over at least a 20 year period.

(ii) Any expected premium increases or additional premiums to pay for automatic or optional benefit increases. If premium increases or additional premiums will be based on the attained age of the applicant at the time of the increase, the insurer shall also disclose the magnitude of the potential premiums the applicant would need to pay at ages 75 and 85 for benefit increases. An insurer may use a reasonable hypothetical, or a graphic demonstration, for the purposes of this disclosure.

(7) No insurer may offer a long term care insurance policy or certificate unless that policy or certificate, at the option of the insured or policyholder, provides some type of nonforfeiture value, such as reduced paid-up insurance. The reduced paid-up percentages may apply to the nursing home benefits only or to all benefits in the policy or certificate. These percentages must appear in the policy or certificate, and may change based on experience, provided the policy or certificate states that such change will only be made in conjunction with an increase in premium.

(8) Where the policy is issued to a group, the required offer in paragraph (7) of this subdivision shall be made to the group policyholder if the group is an employer, union or professional association; for all other groups the offering shall be made to each proposed certificateholder.

(9) A period of care must be separated by at least 30 days of nonpayment of benefits to be considered two separate periods of care.

(d) Prohibition against post-claims underwriting.

(1) Insurers, whether or not they have obtained information concerning the applicant's health condition prior to issuance of the policy or certificate, shall be prohibited from post-claims underwriting.

(2) If an insurer requests information on an application concerning medications being taken by the applicant and the medications listed in such application were known by the insurer, or should have been known at the time of application to be directly related to a medical condition for which coverage would otherwise be denied, then the policy or certificate shall not be rescinded for that condition.

(3) Except for policies or certificates which are guaranteed issue:

(i) The following language shall be set out conspicuously and in close conjunction with the applicant's signature block on an application for a long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance policy or certificate:

Caution: If your answers on this application fail to include all material medical information requested, (company) has the right to deny benefits or rescind your policy.

(ii) The following language, or language substantially similar to the following, shall be set out conspicuously on the long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance policy or certificate at the time of delivery:

Caution: The issuance of this (long term care insurance) (nursing home insurance only, home care insurance only, or nursing home and home care insurance) (policy) (certificate) is based upon your responses to the questions on your application. A copy of your (application) (enrollment form) (is enclosed) (was retained by you when you applied). If your answers fail to include all material medical information requested, the company has the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact the company at this address: (insert address).

(4) In the case of a group long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance policy or certificate, a copy of the completed application or enrollment form (whichever is applicable) shall be delivered to the insured no later than at the time of delivery of the policy or certificate unless it was retained by the applicant at the time of application.

(5) In the case of an individual long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance policy, the provisions of section 3204 of the Insurance Law are applicable.

(6) Every insurer or other entity selling or issuing long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance benefits shall maintain a record of all policy or certificate rescissions, both state and countrywide, except those which the insured voluntarily effectuated and shall annually furnish this information to the superintendent in the format prescribed by the National Association of Insurance Commissioners.

(e) Permitted compensation arrangements.

(1) An insurer may provide commissions or other compensation to an agent or other representative for the sale of a long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance policy or certificate at a higher level or amount during the first year the policy or certificate is in effect than is paid for selling or servicing the policy or certificate during the second year. However, all proposed first year commissions or compensation as well as renewal commissions or compensation shall be subject to review and approval to ensure that they are reasonable, not excessive, and not inconsistent with expected loss ratio requirements.

(2) The commission or other compensation provided in subsequent (renewal) years must be the same as that provided in the second year or period and must be provided for a reasonable number of renewal years.

(3) In a replacement situation no insurer shall provide compensation to its agents or other producers and no agent or producer shall receive compensation greater than the renewal compensation payable by the replacing insurer on renewal policies.

(4) For purposes of this section, compensation includes pecuniary or nonpecuniary remuneration of any kind relating to the sale or renewal of the policy or certificate including but not limited to bonuses, gifts, prizes, awards and finders fees.

(f) Internal appeal.

(1) General requirement.

(i) This subdivision establishes minimum standards for internal appeal benefits found in long term care insurance, nursing home and home care insurance, nursing home insurance only, and home care insurance only policies and certificates.

(ii) No policy or certificate shall be delivered or issued for delivery in this State as long term care insurance, nursing home insurance only, home care insurance only, or nursing home and home care insurance unless the policy or certificate contains provisions setting forth an internal appeal benefit that, at a minimum, complies with the requirements of this subdivision.

(iii) The requirements of this subdivision are in addition to any external appeal benefits afforded to insureds as required by the New York State Partnership for Long Term Care program established under section 367-f of the Social Services Law.

(2) Reasonable opportunity to appeal an adverse claim determination.

(i) Every insurer issuing a policy or certificate subject to this section shall establish, and describe in the policy or certificate, a procedure providing the insured, subscriber or an authorized representative thereof with reasonable opportunity to appeal to the insurer an initial adverse claim determination. The insurer shall allow an internal appeal for an adverse claim determination involving expense incurred coverage where the insured, subscriber or the estate thereof has been billed a valid charge for long term care services. For coverage provided without regard to expenses incurred as permitted under the Internal Revenue Code, the insurer shall allow an internal appeal for an adverse claim determination where a plan of care has been prescribed by a licensed health care practitioner for the insured.

(ii) Every insurer shall provide an initial adverse claim determination in writing, which contains the information provided in subparagraph (iii) of this paragraph.

(iii) The policy or certificate shall state that the initial adverse claim determination shall be in writing and include:

(a) the specific reason for the initial adverse claim determination, including a specific reference to policy or certificate language that supports the denial, if applicable;

(b) instructions to the insured, subscriber or an authorized representative thereof on how and when to initiate and facilitate the insurer's effective handling of an internal appeal, which shall:

(1) include the mailing address and other contact information where the written appeal must be sent and the time frame available for initiating such internal appeal;

(2) specify that the insurer will consider any new or modified information or explanations the insured, subscriber or an authorized representative thereof sends to the insurer; and

(3) state the insurer will accept the names, addresses and phone numbers of persons who may facilitate the insurer's effective handling of the internal appeal; and

(c) a notification that the insured, subscriber or an authorized representative thereof is entitled to all documents, records and other information relevant to the claim.

(3) Request to appeal. The insurer shall permit the insured, subscriber or an authorized representative thereof at least 60 days from receipt of the initial adverse claim determination to appeal the denial to the insurer. The insurer shall require that the appeal of the initial adverse claim determination must be in writing; however, the insurer shall not require the insured, subscriber or an authorized representative thereof to use a special form to appeal the initial adverse claim determination.

(4) Internal appeal procedures.

(i) Every insurer shall issue a determination with regard to an internal appeal within 60 days of the insurer's receipt of the appeal.

(ii) If the insurer reasonably needs additional information from the insured, subscriber or an authorized representative thereof to issue a determination on the internal appeal, the insurer shall request in writing the additional information from the insured, subscriber or authorized representative thereof within 15 business days of receipt of the internal appeal. The insurer shall allow the insured, subscriber or the authorized representative thereof at least 45 days from receipt of the insurer's written request to provide the additional information to the insurer.

(iii) If the insurer cannot reasonably decide the internal appeal within the 60-day timeframe because the insurer is awaiting additional information from the insured, subscriber or an authorized representative thereof, then the insurer shall provide the insured, subscriber or authorized representative thereof with written notice of an extension to decide the internal appeal prior to the expiration of the initial 60-day period. The written notice of an extension shall describe the need to await further information and indicate the date by which the insurer expects to issue the determination. In no event shall the extension afforded the insurer exceed 120 days from receipt of the internal appeal by the insurer.

(iv) If the additional information is not received within 120 days from receipt of the internal appeal by the insurer, the insurer shall immediately issue an internal appeal determination based on the information available to the insurer at that time.

(v) The internal appeal determination shall be made by a person not involved in the initial adverse claim determination by the insurer, and the person shall have the ability and expertise to reasonably evaluate and decide the internal appeal.

(5) Internal appeal determination. The internal appeal determination shall be made in writing to the insured, subscriber or an authorized representative thereof and include:

(i) a statement as to whether the initial adverse claim determination is upheld or reversed in whole or in part;

(ii) a detailed explanation, with references to specific policy or certificate language if applicable, of the reason(s) why the initial adverse claim determination is being upheld in whole or in part;

(iii) if the denial is reversed in whole or in part, a detailed description of the benefits that will be paid; and

(iv) a notification that the insured, subscriber or an authorized representative thereof is entitled to copies of all documents, records or other relevant information regarding the claim and the internal appeal.