Minnesota Session Laws - 1996, Regular Session

  
    
KEY: stricken = old language to be removed
     underscored = new language to be added
    
                            CHAPTER 389-H.F.No. 697 
                  An act relating to insurance; long-term care; 
                  permitting the sale of policies with longer waiting 
                  periods with disclosure to the purchaser; amending 
                  Minnesota Statutes 1995 Supplement, sections 62A.48, 
                  subdivision 1; and 62A.50, subdivision 3. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        62A.48, subdivision 1, is amended to read: 
           Subdivision 1.  [POLICY REQUIREMENTS.] No individual or 
        group policy, certificate, subscriber contract, or other 
        evidence of coverage of nursing home care or other long-term 
        care services shall be offered, issued, delivered, or renewed in 
        this state, whether or not the policy is issued in this state, 
        unless the policy is offered, issued, delivered, or renewed by a 
        qualified insurer and the policy satisfies the requirements of 
        sections 62A.46 to 62A.56.  A long-term care policy must cover 
        prescribed long-term care in nursing facilities and at least the 
        prescribed long-term home care services in section 62A.46, 
        subdivision 4, clauses (1) to (5), provided by a home health 
        agency.  Coverage under a long-term care policy must include:  a 
        minimum lifetime benefit limit of at least $25,000 for services, 
        and nursing facility and home care coverages must not be subject 
        to separate lifetime maximums.  Prior hospitalization may not be 
        required under a long-term care policy. 
           The policy must cover preexisting conditions during the 
        first six months of coverage if the insured was not diagnosed or 
        treated for the particular condition during the 90 days 
        immediately preceding the effective date of coverage.  Coverage 
        under the policy may include a waiting period of up to 90 180 
        days before benefits are paid, but there must be no more than 
        one waiting period per benefit period; for purposes of this 
        sentence, "days" can mean calendar or benefit days.  If benefit 
        days are used, an appropriate premium reduction and disclosure 
        must be made.  If benefit days are used in connection with 
        coverage for home care services, the waiting period for home 
        care services must not be longer than 90 benefit days.  No 
        policy may exclude coverage for mental or nervous disorders 
        which have a demonstrable organic cause, such as Alzheimer's and 
        related dementias.  No policy may require the insured to be 
        homebound or house confined to receive home care services.  The 
        policy must include a provision that the plan will not be 
        canceled or renewal refused except on the grounds of nonpayment 
        of the premium, provided that the insurer may change the premium 
        rate on a class basis on any policy anniversary date.  A 
        provision that the policyholder may elect to have the premium 
        paid in full at age 65 by payment of a higher premium up to age 
        65 may be offered.  A provision that the premium would be waived 
        during any period in which benefits are being paid to the 
        insured during confinement in a nursing facility must be 
        included.  A nongroup policyholder may return a policy within 30 
        days of its delivery and have the premium refunded in full, less 
        any benefits paid under the policy, if the policyholder is not 
        satisfied for any reason. 
           No individual long-term care policy shall be offered or 
        delivered in this state until the insurer has received from the 
        insured a written designation of at least one person, in 
        addition to the insured, who is to receive notice of 
        cancellation of the policy for nonpayment of premium.  The 
        insured has the right to designate up to a total of three 
        persons who are to receive the notice of cancellation, in 
        addition to the insured.  The form used for the written 
        designation must inform the insured that designation of one 
        person is required and that designation of up to two additional 
        persons is optional and must provide space clearly designated 
        for listing between one and three persons.  The designation 
        shall include each person's full name, home address, and 
        telephone number.  Each time an individual policy is renewed or 
        continued, the insurer shall notify the insured of the right to 
        change this written designation. 
           The insurer may file a policy form that utilizes a plan of 
        care prepared as provided under section 62A.46, subdivision 5, 
        clause (1) or (2). 
           Sec. 2.  Minnesota Statutes 1995 Supplement, section 
        62A.50, subdivision 3, is amended to read: 
           Subd. 3.  [DISCLOSURES.] No long-term care policy shall be 
        offered or delivered in this state, whether or not the policy is 
        issued in this state, and no certificate of coverage under a 
        group long-term care policy shall be offered or delivered in 
        this state, unless a statement containing at least the following 
        information is delivered to the applicant at the time the 
        application is made: 
           (1) a description of the benefits and coverage provided by 
        the policy and the differences between this policy, a 
        supplemental Medicare policy and the benefits to which an 
        individual is entitled under parts A and B of Medicare; 
           (2) a statement of the exceptions and limitations in the 
        policy including the following language, as applicable, in bold 
        print:  "THIS POLICY DOES NOT COVER ALL NURSING CARE FACILITIES 
        OR NURSING HOME, HOME CARE, OR ADULT DAY CARE EXPENSES AND DOES 
        NOT COVER RESIDENTIAL CARE.  READ YOUR POLICY CAREFULLY TO 
        DETERMINE WHICH FACILITIES AND EXPENSES ARE COVERED BY YOUR 
        POLICY."; 
           (3) a statement of the renewal provisions including any 
        reservation by the insurer of the right to change premiums; 
           (4) a statement that the outline of coverage is a summary 
        of the policy issued or applied for and that the policy should 
        be consulted to determine governing contractual provisions; 
           (5) an explanation of the policy's loss ratio including at 
        least the following language:  "This means that, on the average, 
        policyholders may expect that $........ of every $100 in premium 
        will be returned as benefits to policyholders over the life of 
        the contract."; 
           (6) a statement of the out-of-pocket expenses, including 
        deductibles and copayments for which the insured is responsible, 
        and an explanation of the specific out-of-pocket expenses that 
        may be accumulated toward any out-of-pocket maximum as specified 
        in the policy; 
           (7) the following language, in bold print:  "YOUR PREMIUMS 
        CAN BE INCREASED IN THE FUTURE.  THE RATE SCHEDULE THAT LISTS 
        YOUR PREMIUM NOW CAN CHANGE."; 
           (8) the following language, if applicable, in bold print:  
        "IF YOU ARE NOT HOSPITALIZED PRIOR TO ENTERING A NURSING HOME OR 
        NEEDING HOME CARE, YOU WILL NOT BE ABLE TO COLLECT ANY BENEFITS 
        UNDER THIS PARTICULAR POLICY."; and 
           (9) the following language in bold print, with any 
        provisions that are inapplicable to the particular policy 
        omitted or crossed out:  "THIS POLICY HAS A WAITING PERIOD OF 
        ..... (CALENDAR OR BENEFIT) DAYS FOR NURSING CARE SERVICES AND A 
        WAITING PERIOD OF ..... (CALENDAR OR BENEFIT) DAYS FOR HOME CARE 
        SERVICES.  THIS MEANS THAT THIS POLICY WILL NOT COVER YOUR CARE 
        FOR THE FIRST ..... (CALENDAR OR BENEFIT) DAYS AFTER YOU ENTER A 
        NURSING HOME, OR THE FIRST ..... (CALENDAR OR BENEFIT) DAYS 
        AFTER YOU BEGIN TO USE HOME CARE SERVICES.  YOU WOULD NEED TO 
        PAY FOR YOUR CARE FROM OTHER SOURCES FOR THOSE WAITING 
        PERIODS."; and 
           (10) a signed and completed copy of the application for 
        insurance is left with the applicant at the time the application 
        is made. 
           Sec. 3.  [EFFECTIVE DATE AND APPLICATION.] 
           Sections 1 and 2 are effective January 1, 1997, and apply 
        to policies issued on or after that date. 
           Presented to the governor March 26, 1996 
           Signed by the governor March 28, 1996, 10:06 a.m.