HF 954

as introduced - 89th Legislature (2015 - 2016) Posted on 04/23/2015 11:31am

A bill for an act
relating to insurance; long-term care; reducing the minimum permitted inflation
protection for a long-term care insurance partnership policy; continuing to permit
other types of inflation protection; amending Minnesota Statutes 2014, section
62S.23, subdivision 1.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, section 62S.23, subdivision 1, is amended to read:

Subdivision 1.

Inflation protection feature.

(a) No insurer may offer a long-term
care insurance policy unless the insurer also offers to the policyholder, in addition to any
other inflation protection, the option to purchase a policy that provides for benefit levels to
increase with benefit maximums or reasonable durations which are meaningful to account
for reasonably anticipated increases in the costs of long-term care services covered by
the policy. In addition to other options that may be offered, insurers must offer to each
policyholder, at the time of purchase, the option to purchase a policy with an inflation
protection feature no less favorable than one of the following:

(1) increases benefit levels annually in a manner so that the increases are
compounded annually at a rate not less than five percent;

(2) guarantees the insured individual the right to periodically increase benefit levels
without providing evidence of insurability or health status so long as the option for the
previous period has not been declined. The amount of the additional benefit shall be no
less than the difference between the existing policy benefit and that benefit compounded
annually at a rate of at least five percent for the period beginning with the purchase of the
existing benefit and extending until the year in which the offer is made; or

(3) covers a specified percentage of actual or reasonable charges and does not
include a maximum specified indemnity amount or limit.

(b) A long-term care partnership policy must provide the inflation protection
described in this subdivision. If the policy is sold to an individual who:

(1) has not attained age 61 as of the date of purchase, the policy must provide
compound annual inflation protection;

(2) has attained age 61, but has not attained age 76 as of such date, the policy must
provide some level of inflation protection; and

(3) has attained the age of 76 as of such date, the policy may, but is not required to,
provide some level of inflation protection.

Inflation protection for a long-term care partnership policy may not be less than
deleted text begin three deleted text end new text begin one new text end percent per year or a rate based on changes in the Consumer Price Index. The
commissioner, however, may approve other types of inflation protection that comply with
this section and further the goals of the partnership program.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015, and applies to coverage
sold on or after that date.
new text end