N.Y. Insurance Law § 1117: Health insurance plans for long term care

§ 1117. Health insurance plans for long term care. (a) An authorized

insurer subject to the provisions of this chapter and organized to write

the kind of insurance specified in paragraph three of subsection (a) of

section one thousand one hundred thirteen of this article, a corporation

or health maintenance organization authorized pursuant to article

forty-three of this chapter or article forty-four of the public health

law, and a fraternal benefit society organized under article forty-five

of this chapter, may be authorized by the superintendent to issue

contracts in connection with plans providing benefits for long term

care, provided such plans satisfy the criteria set forth in subsection

(b) of this section and the superintendent has made the determinations

set forth in subsection (f) of this section.

(b) The superintendent may authorize such contracts in connection with

a plan for long term care pursuant to the following criteria:

(1) the plan's provisions are not misleading or confusing;

(2) the plan's provisions are not inconsistent with the needs of the

public;

(3) the plan's benefit structure provides options for use of long term

care services;

(4) the plan, the contract and other materials describing the plan

fully and clearly state the benefits and limitations of such plan;

(5) the authorized insurer, health maintenance organization, or

fraternal benefit society agrees to provide such reports of the

experience of the plan as may be requested by the superintendent. The

superintendent may prepare abstracts and summaries of such reports at

the request of other government agencies for purposes of research and

studies related to long term care financing, provided however that the

insurer, health maintenance organization, or fraternal benefit society

may request that specified information included in the report be

considered confidential; and

(6) prior to the earlier of the execution of a policy or certificate

in connection with a plan providing a home care benefit and/or a nursing

home benefit, or the payment of any premium or fee related to such a

policy or certificate, the authorized insurer, corporation, health

maintenance organization or fraternal benefit society shall provide the

prospective insured or his or her representative with a disclosure

statement, which contains the following:

(A) The maximum daily and lifetime benefit levels, if applicable,

provided by the policy or certificate for home care services and nursing

home services;

(B) The percentage of coverage provided for home care services and

nursing home services, if applicable, and an explanation of the

methodology on which the reasonable charge used in conjunction with such

percentage amount is based;

(C) A description of any inflation protection feature included in or

available for purchase under the policy or certificate and the

additional premium required to purchase such option or options;

(D) (i) If available and accessible by the insurer or other entity

from the department of health, the most recently-published average,

statewide rate for care in a nursing home, as well as the average rates

for care in nursing homes for both the New York city-metropolitan and

upstate regions of the state; or

(ii) If available and accessible by the insurer or other entity from

the department of health, the most recently-published map of the

estimated average regional rates in New York state for nursing home

care;

(E) A graphic demonstration of the maximum daily nursing home benefit

level provided by the policy or certificate, and the impact that the

selection of any inflation protection options would have on such maximum

daily nursing home benefit level;

(F) The right of the prospective insured, upon attaining the age of

sixty-five years, to designate a third party who will receive a copy of

any notices of nonpayment of premiums due or notice of cancellation for

nonpayment of premiums that is sent to the prospective insured;

(G) (i) A written statement indicating that such policy or certificate

may be subject to future premium rate increases and that such rate

increases shall be subject to the approval or modification of the

superintendent; and

(ii) A list of past premium rate increases for such policy or

certificate over the previous ten years, or if such policy or

certificate was not offered over the previous ten years, past premium

rate increased for policies or certificates that offer similar benefits

over the previous ten years;

(H) Directions on how to obtain information about the department's

review of any rate filing or application, contact information for the

department, and information on how to contact the authorized insurer,

corporation, health maintenance organization or fraternal benefit

society for more information;

(I) Whether or not there is a period in which rates will not change,

and if so, when that time period expires;

(J) A description of whether or not the premium may change, and if so,

the circumstances under which any such premium changes could occur,

including whether the department must approve such changes;

(K) Whether the policy contains provisions providing for a refund or

partial refund of premium upon the cancellation of the policy, and if

such provisions exist, provide a description of their terms;

(L) A description of the options policyholders will have to mitigate

any premium increases;

(M) A description of the options policyholders will have should the

premiums increase, and the policyholder deems it in their best interest

to cancel the policy;

(N) A statement that the policyholder will be given at least ninety

days notice before any premium change takes effect;

(O) A statement that if the authorized insurer, corporation, health

maintenance organization or fraternal benefit society seeks to increase

the premium rate, the department will post notice of the rate filing on

its website prior to any determination by the department; and

(P) The right of the prospective insured to submit public comments on

any rate filing or application regarding premium rates on the

department's website.

For the purpose of this paragraph, "home care services" shall have the

same meaning as defined in subdivision one of section thirty-six hundred

two of the public health law. The prospective insured, or his or her

representative, shall acknowledge that the required disclosure has been

made by signing the disclosure statement prior to or contemporaneously

with the effective date of the policy or certificate.

Failure to provide information required by subparagraph (D) of this

paragraph shall not be construed as a violation of this section if such

information has not been made available by the department of health.

(c) The duration of such contracts and the extent of exposure

thereunder by insurers, health maintenance organizations or fraternal

benefit societies shall be in the discretion of the superintendent.

(d) Contracts issued pursuant to the provisions of this section shall

be subject to all other provisions of this chapter and the regulations

promulgated thereunder applicable to the insurer, health maintenance

organization, or fraternal benefit society which issues the contract,

provided however that in order to permit the development of long term

care plans, the superintendent may modify or suspend any such provision

or regulation upon making the determinations set forth in subsection (f)

of this section.

(e) The superintendent may permit an authorized insurer, health

maintenance organization, or fraternal benefit society subject to the

provisions of this chapter to reinsure the risk of any long term care

services plan, provided such plan satisfies the requirements of this

section. Such reinsurance agreements shall provide for the payment of a

reasonable premium.

(f) The superintendent may take the actions set forth in subsections

(a), (d) and (e) of this section only if the superintendent determines

that:

(1) the plan is a legitimate approach to expand the availability of

insurance coverage for long term care services;

(2) any proposed modification or suspension of a provision of this

chapter or a regulation promulgated thereunder is essential to the

development of long term care plans pursuant to this section, and is

directly related to the essential features of such plans;

(3) the premium rates for the long term care plan are reasonably

related to the benefits provided, and are self-supporting; and

(4) the plan proposed by the insurer, health maintenance organization,

or fraternal benefit society, and any proposed modification or

suspension pursuant to subsection (d) of this section, will not cause or

constitute an impairment of the insurer's, health maintenance

organization's, or fraternal benefit society's ability to satisfy its

existing and anticipated contracts and other obligations, including such

standards as the superintendent shall prescribe concerning adequate

capital and financial requirements.

(g) (1) Except for certain group contracts described in paragraph four

of this subsection, in order for premium payments for long-term care

insurance to qualify for purposes of section one hundred ninety,

subdivision twenty-five-a of section two hundred ten, subsection (aa) of

section six hundred six, subsection (k) of section one thousand four

hundred fifty-six and subsection (m) of section one thousand five

hundred eleven of the tax law, the long-term care insurance must be

approved by the superintendent pursuant to this subsection. Prior to

approving any such insurance, the superintendent shall conclude that it

meets minimum standards, including minimum loss ratio standards under

this section or section three thousand two hundred twenty-nine of this

chapter and is a qualified long-term care insurance contract as defined

in section 7702B of the internal revenue code.

(2) (A) No insurer, agent, broker, person, business or corporation

doing business in or into this state shall in any manner state,

advertise or claim that a long-term care insurance policy qualifies for

purposes of the above-referenced provisions of the tax law unless

either: (i) the superintendent has issued a letter or other written

instrument to the insurer stating that the policy has been determined to

qualify under this subsection, or (ii) the policy qualifies under

paragraph four of this subsection without the need for approval by the

superintendent.

(B) Any policy which is held out or purported to be a long-term care

insurance policy by any insurer, agent, broker, person, business or

corporation doing business in or into this state which has not been

determined by the superintendent to qualify and which does not qualify

under paragraph four of this subsection for purposes of the above

referenced provisions of the tax law shall so state clearly, legibly and

in close physical proximity to any description of the policy as a

long-term care insurance policy that it does not so qualify. This

subsection shall also be deemed to cover any statement, advertisement or

claim concerning such policy by any insurer, agent, broker, person,

business or corporation doing business in or into this state.

(C) Violation of this paragraph shall be considered a

misrepresentation under section twenty-one hundred twenty-three of this

chapter.

(3) The superintendent shall maintain an ongoing list of those

policies requiring approval of the superintendent that are found

eligible for purposes of the above-referenced provisions of the tax law.

(4) Group contracts delivered or issued for delivery outside of the

state, but which are qualified long-term care insurance contracts as

defined in section 7702B of the internal revenue code shall be deemed to

qualify for purposes of the provisions of the tax law specified in

paragraph one of this subsection without the need to seek the approval

of the superintendent pursuant to this subsection. Provided that they

otherwise meet the requirements of this paragraph, such group contracts

include, but are not limited to, those offered: (a) by professional

associations and societies, membership organizations and not-for-profit

groups, or by a subsidiary or affiliated entity of any of the foregoing,

to the members of the association, society, organization or group, and

(b) by employers to their employees.

(h) The department shall post on its website information describing

the process that it uses in reviewing and approving premium rates for

policies or contracts of long term care insurance.

(i) Whenever an authorized insurer, corporation, health maintenance

organization or fraternal benefit society submits a rate filing or

application to the superintendent to increase or decrease premium rates

for any policy or certificate subject to this section, the

superintendent shall post a public notice of the rate filing or

application on the department's website within fourteen days. The

superintendent shall provide for a process for the public to provide

comments on such rate filing or application electronically or in writing

for a period of thirty days after such public notice is posted on the

department's website.

(j) The superintendent, upon rendering a decision regarding approval,

disapproval or modification of a rate filing or application, shall issue

a public notice of such decision. Such written decision and notice shall

be made publicly available on the department's website no later than the

date on which the rate filing or application is approved, disapproved,

or modified. Such notification shall include:

(1) a summary of the determinations made and considerations used by

the department regarding the approval, disapproval or modification of

such rate filing or application, and

(2) a statement with relevant detail as to why the approval,

disapproval or modification of the proposal is consistent with paragraph

three of subsection (f) of this section.

(k) Upon receipt by an authorized insurer, corporation, health

maintenance organization or fraternal benefit society covered by the

provisions of this section of an approval or modification decision by

the superintendent with respect to a rate filing application with the

department, such authorized insurer, corporation, health maintenance

organization or fraternal benefit society shall notify policyholders and

certificate holders of such decision no later than ninety days prior to

the effective date of the premium rate increase. Such notification shall

include:

(1) a description of such decision; and

(2) a written statement conforming to the requirements set forth in

subparagraph (G) of paragraph six of subsection (b) of this section.

(l) The provisions set forth in subparagraphs (G), (H), (I), (J), (K),

(L), (M), (N), (O), and (P) of paragraph six of subsection (b) of this

section shall not apply to policies or certificates that are exempt from

premium rate increases.