1.1                          A bill for an act
  1.2             relating to insurance; long-term care; permitting the 
  1.3             sale of policies with longer waiting periods with 
  1.4             disclosure to the purchaser; amending Minnesota 
  1.5             Statutes 1994, sections 62A.48, subdivision 1; and 
  1.6             62A.50, subdivision 3. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1994, section 62A.48, 
  1.9   subdivision 1, is amended to read: 
  1.10     Subdivision 1.  [POLICY REQUIREMENTS.] No individual or 
  1.11  group policy, certificate, subscriber contract, or other 
  1.12  evidence of coverage of nursing home care or other long-term 
  1.13  care services shall be offered, issued, delivered, or renewed in 
  1.14  this state, whether or not the policy is issued in this state, 
  1.15  unless the policy is offered, issued, delivered, or renewed by a 
  1.16  qualified insurer and the policy satisfies the requirements of 
  1.17  sections 62A.46 to 62A.56.  A long-term care policy must cover 
  1.18  prescribed long-term care in nursing facilities and at least the 
  1.19  prescribed long-term home care services in section 62A.46, 
  1.20  subdivision 4, clauses (1) to (5), provided by a home health 
  1.21  agency.  Coverage under a long-term care policy AA must 
  1.22  include:  a maximum lifetime benefit limit of at least $100,000 
  1.23  for services, and nursing facility and home care coverages must 
  1.24  not be subject to separate lifetime maximums.  Coverage under a 
  1.25  long-term care policy A must include:  a maximum lifetime 
  1.26  benefit limit of at least $50,000 for services, and nursing 
  2.1   facility and home care coverages must not be subject to separate 
  2.2   lifetime maximums.  Prior hospitalization may not be required 
  2.3   under a long-term care policy. 
  2.4      Coverage under either policy designation must cover 
  2.5   preexisting conditions during the first six months of coverage 
  2.6   if the insured was not diagnosed or treated for the particular 
  2.7   condition during the 90 days immediately preceding the effective 
  2.8   date of coverage.  Coverage under either policy designation may 
  2.9   include a waiting period of up to 90 180 days before benefits 
  2.10  are paid, but there must be no more than one waiting period per 
  2.11  benefit period; for purposes of this sentence, "days" means 
  2.12  calendar days.  No policy may exclude coverage for mental or 
  2.13  nervous disorders which have a demonstrable organic cause, such 
  2.14  as Alzheimer's and related dementias.  No policy may require the 
  2.15  insured to be homebound or house confined to receive home care 
  2.16  services.  The policy must include a provision that the plan 
  2.17  will not be canceled or renewal refused except on the grounds of 
  2.18  nonpayment of the premium, provided that the insurer may change 
  2.19  the premium rate on a class basis on any policy anniversary 
  2.20  date.  A provision that the policyholder may elect to have the 
  2.21  premium paid in full at age 65 by payment of a higher premium up 
  2.22  to age 65 may be offered.  A provision that the premium would be 
  2.23  waived during any period in which benefits are being paid to the 
  2.24  insured during confinement in a nursing facility must be 
  2.25  included.  A nongroup policyholder may return a policy within 30 
  2.26  days of its delivery and have the premium refunded in full, less 
  2.27  any benefits paid under the policy, if the policyholder is not 
  2.28  satisfied for any reason. 
  2.29     No individual long-term care policy shall be offered or 
  2.30  delivered in this state until the insurer has received from the 
  2.31  insured a written designation of at least one person, in 
  2.32  addition to the insured, who is to receive notice of 
  2.33  cancellation of the policy for nonpayment of premium.  The 
  2.34  insured has the right to designate up to a total of three 
  2.35  persons who are to receive the notice of cancellation, in 
  2.36  addition to the insured.  The form used for the written 
  3.1   designation must inform the insured that designation of one 
  3.2   person is required and that designation of up to two additional 
  3.3   persons is optional and must provide space clearly designated 
  3.4   for listing between one and three persons.  The designation 
  3.5   shall include each person's full name, home address, and 
  3.6   telephone number.  Each time an individual policy is renewed or 
  3.7   continued, the insurer shall notify the insured of the right to 
  3.8   change this written designation. 
  3.9      The insurer may file a policy form that utilizes a plan of 
  3.10  care prepared as provided under section 62A.46, subdivision 5, 
  3.11  clause (1) or (2). 
  3.12     Sec. 2.  Minnesota Statutes 1994, section 62A.50, 
  3.13  subdivision 3, is amended to read: 
  3.14     Subd. 3.  [DISCLOSURES.] No long-term care policy shall be 
  3.15  offered or delivered in this state, whether or not the policy is 
  3.16  issued in this state, and no certificate of coverage under a 
  3.17  group long-term care policy shall be offered or delivered in 
  3.18  this state, unless a statement containing at least the following 
  3.19  information is delivered to the applicant at the time the 
  3.20  application is made: 
  3.21     (1) a description of the benefits and coverage provided by 
  3.22  the policy and the differences between this policy, a 
  3.23  supplemental Medicare policy and the benefits to which an 
  3.24  individual is entitled under parts A and B of Medicare and the 
  3.25  differences between policy designations A and AA; 
  3.26     (2) a statement of the exceptions and limitations in the 
  3.27  policy including the following language, as applicable, in bold 
  3.28  print:  "THIS POLICY DOES NOT COVER ALL NURSING CARE FACILITIES 
  3.29  OR NURSING HOME, HOME CARE, OR ADULT DAY CARE EXPENSES AND DOES 
  3.30  NOT COVER RESIDENTIAL CARE.  READ YOUR POLICY CAREFULLY TO 
  3.31  DETERMINE WHICH FACILITIES AND EXPENSES ARE COVERED BY YOUR 
  3.32  POLICY."; 
  3.33     (3) a statement of the renewal provisions including any 
  3.34  reservation by the insurer of the right to change premiums; 
  3.35     (4) a statement that the outline of coverage is a summary 
  3.36  of the policy issued or applied for and that the policy should 
  4.1   be consulted to determine governing contractual provisions; 
  4.2      (5) an explanation of the policy's loss ratio including at 
  4.3   least the following language:  "This means that, on the average, 
  4.4   policyholders may expect that $........ of every $100 in premium 
  4.5   will be returned as benefits to policyholders over the life of 
  4.6   the contract."; 
  4.7      (6) a statement of the out-of-pocket expenses, including 
  4.8   deductibles and copayments for which the insured is responsible, 
  4.9   and an explanation of the specific out-of-pocket expenses that 
  4.10  may be accumulated toward any out-of-pocket maximum as specified 
  4.11  in the policy; 
  4.12     (7) the following language, in bold print:  "YOUR PREMIUMS 
  4.13  CAN BE INCREASED IN THE FUTURE.  THE RATE SCHEDULE THAT LISTS 
  4.14  YOUR PREMIUM NOW CAN CHANGE."; 
  4.15     (8) the following language, if applicable, in bold print:  
  4.16  "IF YOU ARE NOT HOSPITALIZED PRIOR TO ENTERING A NURSING HOME OR 
  4.17  NEEDING HOME CARE, YOU WILL NOT BE ABLE TO COLLECT ANY BENEFITS 
  4.18  UNDER THIS PARTICULAR POLICY."; and 
  4.19     (9) a statement of the waiting period for benefits, 
  4.20  including at least the following language, in bold print:  "THIS 
  4.21  POLICY HAS A WAITING PERIOD OF ..... DAYS.  THIS MEANS THAT THIS 
  4.22  POLICY WILL NOT PAY ANYTHING FOR YOUR CARE DURING THE FIRST 
  4.23  ..... DAYS AFTER YOU ENTER A NURSING HOME, OR BEGIN TO USE HOME 
  4.24  HEALTH CARE.  YOU WOULD NEED TO PAY FOR YOUR CARE FROM OTHER 
  4.25  SOURCES DURING THAT WAITING PERIOD."; and 
  4.26     (10) a signed and completed copy of the application for 
  4.27  insurance is left with the applicant at the time the application 
  4.28  is made. 
  4.29     Sec. 3.  [EFFECTIVE DATE AND APPLICATION.] 
  4.30     Sections 1 and 2 are effective January 1, 1996, and apply 
  4.31  to policies issued on or after that date.