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15.15 Long Term Care Policies

Ohio Regulations and Required Provisions​

Standards For Marketing​

An issuer is required to establish marketing procedures that ensure policy comparisons are fair, accurate, and not misleading, and that prevent the sale of excessive or unnecessary insurance coverage. Insurers must also make reasonable efforts to determine whether a prospective applicant or enrollee already has sickness and accident insurance coverage, including the type and amount of existing coverage.

Policies must prominently display the following notice on the first page: “Notice to Buyer: This policy may not cover all costs associated with long-term care incurred by the buyer during the coverage period. Buyers are advised to carefully review all policy limitations.”

Prohibited Marketing Practices​

The following acts and practices are prohibited: Twisting: Knowingly making misleading statements or presenting incomplete or fraudulent comparisons of policies or insurers for the purpose of inducing a person to lapse, forfeit, surrender, terminate, retain, assign, pledge, borrow against, convert, or replace an existing policy with coverage from another insurer.

**High-Pressure Tactics: **Using marketing or sales practices that attempt to influence the purchase of insurance through intimidation, fear, threats, coercion, or excessive pressure.

Cold Lead Advertising: Using a marketing or advertising method that does not clearly disclose that the purpose of the communication is to solicit insurance and that an insurance producer or insurance company may contact the individual.

Misrepresentation: Making false, misleading, or inaccurate statements regarding a material fact in connection with the sale or attempted sale of a long-term care insurance policy.

Advertising​

All long-term care (LTC) insurance advertisements must receive approval from the Superintendent and must be retained by the insurer for a minimum of 3 years from the date the advertisement was first used.

Every insurer, health care service plan, or other entity that markets long-term care insurance is required to train its agents on the proper use of the entity’s suitability standards. The insurer or entity must also maintain a copy of those suitability standards and make them available for inspection by the Superintendent.

An agent who recommends the purchase or replacement of a long-term care insurance policy must have reasonable grounds to believe that the recommendation is suitable for the applicant. This includes considering the applicant’s financial ability to pay the premiums and determining whether the policy is appropriate for the applicant’s insurance needs and financial objectives.

Before selling an individual long-term care insurance policy, an agent must make reasonable efforts to gather information regarding the applicant’s health status and financial situation.

The applicant must receive a copy of the Long-Term Care Personal Worksheet and the consumer guide titled Things You Should Know Before You Buy Long-Term Care Insurance. The completed personal worksheet must be returned to the insurer before the application can be reviewed or a policy can be issued.

Inflation Protection​

A long-term care insurance policy must include an inflation protection provision unless the policyholder signs a written rejection of inflation protection. The inflation protection offer must provide one or more of the following options:

  • Automatic increases in benefit levels that compound annually at a rate of no less than 5%
  • Protection that guarantees the insured the option to periodically increase benefit levels, compounded annually at a minimum rate of 5%, without requiring evidence of insurability or proof of health status, provided the insured did not decline the previous increase option
  • Coverage based on a specified percentage of actual charges incurred

The inflation protection benefit must continue regardless of the insured’s age, current claim status, prior claim history, or the length of time the insured has been covered under the policy.

Inflation protection provisions must be included in all long-term care insurance policies and certificates unless the insurer receives a written rejection of inflation protection signed by the prospective policyholder.

When a long-term care policy is issued on a group basis, this requirement applies either to the group policyholder or to each prospective certificate holder, depending on the type of group coverage involved.

This offer is not required for life insurance policies or riders that include accelerated long-term care benefits.

Replacement​

Waiting Periods​

When a long-term care insurance policy replaces an existing long-term care policy, the replacing insurer must waive any pre-existing condition waiting periods and probationary periods that were already satisfied under the original policy.

Application Forms​

Application forms must include questions designed to determine whether the applicant intends to replace an existing long-term care insurance policy or any other accident and sickness insurance currently in force. These questions may include:

  • “Do you currently have another long-term care insurance policy or certificate in force, including a health care service contract or health maintenance organization (HMO) contract?”
  • “Have you had another long-term care insurance policy or certificate in force during the past 12 months?” If yes:
  • “With which company was the coverage issued?”
  • “If the policy lapsed, when did the lapse occur?”
  • “Are you currently covered by Medicaid?”
  • “Do you intend to replace any existing medical or health insurance coverage with this policy?”

Notice Of Replacement​

Applicants who are replacing an existing policy must receive a Notice of Replacement before the new policy is issued or delivered. The applicant must retain one copy of the notice and sign an additional copy, which must be kept by the insurer.

When replacement of an existing policy is intended, the replacing insurer must provide written notice to the current insurer within 5 working days after receiving the application or issuing the policy, whichever occurs first.

Life Insurance With Accelerated Benefits​

If a life insurance policy that includes accelerated long-term care benefits is replaced by another policy providing similar benefits, the replacing insurer must comply with both the long-term care insurance replacement requirements and the life insurance replacement regulations.

Unintentional Lapse​

Notice Before Lapse or Termination​

An individual long-term care insurance policy may not be issued until the insurer receives a written designation naming at least one additional person, besides the applicant, who will receive notice of policy lapse, termination, or nonpayment of premium. This requirement may be waived if the applicant signs a written statement declining to designate another person to receive such notices. The designation of an additional person does not create any legal or financial responsibility for that individual regarding services provided to the insured.

The waiver must contain the following statement: “Protection Against Unintended Lapse: I understand that I have the right to designate at least one person, other than myself, to receive notice of lapse or termination of this long-term care insurance policy due to nonpayment of premium. I understand that notice will not be provided until 30 days after a premium is due and remains unpaid. I elect not to designate a person to receive this notice.”

The insurer must notify the insured at least once every 2 years of the insured’s right to change the designated person who receives lapse or termination notices.

Lapse or Termination for Nonpayment of Premium​

A policy may not lapse or terminate for nonpayment of premium unless the insurer provides notice to the insured and any designated individuals at least 30 days before the effective date of the lapse or termination.

Notice may not be sent until a premium has remained due and unpaid for at least 30 days. The notice is considered delivered 5 days after the date it is mailed.

Reinstatement​

A long-term care insurance policy or certificate must contain a reinstatement of coverage provision for policyholders who were cognitively impaired or experienced a loss of functional capacity before the expiration of the policy’s grace period.

A request for reinstatement must be made within 5 months after the policy has terminated. The standard used to prove cognitive impairment or loss of functional capacity may not be more restrictive than the policy’s eligibility requirements for benefits.

Outline of Coverage​

An outline of coverage must be provided to every long-term care insurance applicant at the time of the initial solicitation.

  • In an agent solicitation, the agent must provide the outline of coverage before presenting the application to the applicant
  • In a direct response solicitation, the outline of coverage and the application may be provided at the same time

The applicant must provide written acknowledgment confirming receipt of the outline of coverage.

The outline of coverage may not contain advertising material. It must instead provide a concise explanation of the policy’s important features, including:

  • The policy’s major exclusions, reductions, and limitations
  • The terms governing renewal and cancellation, including any right of the insurer to increase premiums
  • The conditions under which the policy may be returned and premiums refunded
  • A brief explanation of the relationship between the cost of long-term care services and the policy benefits provided
  • Whether the policy qualifies as a federally tax-qualified long-term care insurance contract

The outline of coverage must be provided as a separate, standalone document and printed in at least 12-point type. The Superintendent may establish additional requirements regarding the content and format of the outline of coverage, including the style, size, color, and prominence of the text, as well as the organization and presentation of captions and information.

Shopper’s Guide​

A shopper’s guide must be provided to all prospective long-term care insurance applicants before an application or enrollment form is presented. In direct response solicitations, the shopper’s guide must be provided together with the application or enrollment form.

A shopper’s guide is not required for life insurance policies or riders that provide accelerated long-term care benefits.

Pre-existing Conditions​

Unless the long-term care insurance policy provides otherwise, coverage for pre-existing conditions is not required during the 6-month waiting period following the insured’s effective date of coverage.

However, long-term care insurance policies may not use exclusions, waivers, or riders to permanently exclude, limit, or reduce coverage or benefits for specifically identified pre-existing diseases or physical conditions after the 6-month waiting period has expired.

Long-term care insurance policies may not define a pre-existing condition more restrictively than the following: “Pre-existing condition” means a condition for which medical advice was given or treatment was recommended or received from a health care provider within the 6 months preceding the insured’s effective date of coverage.

This provision does not prevent an insurer from obtaining a complete medical history from an applicant. It also does not prohibit the insurer from conducting underwriting based on that health history, provided the underwriting is performed according to established underwriting standards.