Long-Term Care Insurance

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  2. Illinois Compiled Statutes
  3. INSURANCE
  4. Illinois Insurance Code.
  5. Long-Term Care Insurance

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(215 ILCS 5/Art. XIXA heading)

ARTICLE XIXA.
LONG-TERM CARE INSURANCE

 

(215 ILCS 5/351A-1) (from Ch. 73, par. 963A-1)

Sec. 351A-1. Definitions. Unless the context requires otherwise, in this Article:

(a) "Long-term care insurance" means any accident and health insurance policy or rider advertised, marketed, offered or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense incurred, indemnity, prepaid or other basis, for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital. Such term includes group and individual annuities and life insurance policies or riders which provide directly or which supplement long-term care insurance. The term also includes a policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity. The term shall also include qualified long-term care insurance contracts. Long-term care insurance may be issued by insurers, fraternal benefit societies, nonprofit health, hospital, and medical service corporations, prepaid health plans, health maintenance organizations or any similar organization to the extent they are otherwise authorized to issue life or health insurance. Long-term care insurance shall not include any insurance policy which is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income protection coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage. Long-term care insurance may include benefits for care and treatment in accordance with the tenets and practices of any established church or religious denomination which teaches reliance on spiritual treatment through prayer for healing.

(b) "Applicant" means:

  • (1) In the case of an individual long-term care insurance policy, the person who seeks to contract for benefits.
  • (2) In the case of a group long-term care insurance policy, the proposed certificate holder.

(c) "Certificate" means, for the purposes of this Article, any certificate issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery in this State.

(d) "Director" means the Director of Insurance of this State.

(e) "Group long-term care insurance" means a long-term care insurance policy which is delivered or issued for delivery in this State and issued to one of the following:

  • (1) One or more employers or labor organizations, or to a trust or to the trustee or trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees, or a combination thereof, or for members or former members, or a combination thereof, of the labor organizations.
  • (2) Any professional, trade or occupational association for its members or former or retired members, or combination thereof, if such association:
    • (A) is composed of individuals all of whom are or were actively engaged in the same profession, trade or occupation; and
    • (B) has been maintained in good faith for purposes other than obtaining insurance.
  • (3) An association or a trust or the trustee or trustees of a fund established, created or maintained for the benefit of members of one or more associations. Prior to advertising, marketing or offering such policy within this State, the association or associations, or the insurer of the association or associations, shall file evidence with the Director that the association or associations have at the outset a minimum of 100 members and have been organized and maintained in good faith for purposes other than that of obtaining insurance, have been in active existence for at least one year, and have a constitution and by-laws which provide that:
    • (A) the association or associations hold regular meetings not less than annually to further the purposes of the members;
    • (B) except for credit unions, the association or associations collect dues or solicit contributions from members; and
    • (C) the members have voting privileges and representation on the governing board and committees.
  • Thirty days after such filing the association or associations will be deemed to satisfy such organizational requirements, unless the Director makes a finding that the association or associations do not satisfy those organizational requirements.
  • (4) A group other than as described in paragraph (1), (2) or (3) of this subsection (e), subject to a finding by the Director that:
    • (A) the issuance of the group policy is not contrary to the best interest of the public;
    • (B) the issuance of the group policy would result in economies of acquisition or administration; and
    • (C) the benefits are reasonable in relation to the premiums charged.

(f) "Policy" means, for the purposes of this Article, any policy, contract, subscriber agreement, rider or endorsement delivered or issued for delivery in this State by an insurer, fraternal benefit society, nonprofit health, hospital, or medical service corporation, prepaid health plan, health maintenance organization or any similar organization.

(g) "Qualified long-term care insurance contract" or "federally tax-qualified long-term care insurance contract" means an individual or group insurance contract that meets the requirements of Section 7702B(b) of the Internal Revenue Code of 1986, as amended, as follows:

  • (1) The only insurance protection provided under the contract is coverage of qualified long-term care services. A contract shall not fail to satisfy the requirements of this subparagraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate.
  • (2) The contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act, as amended, or would be so reimbursable but for the application of a deductible or coinsurance amount. The requirements of this subparagraph do not apply to expenses that are reimbursable under Title XVIII of the Social Security Act only as a secondary payor. A contract shall not fail to satisfy the requirements of this subparagraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate.
  • (3) The contract is guaranteed renewable within the meaning of Section 7702(B)(b)(1)(C) of the Internal Revenue Code of 1986, as amended.
  • (4) The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed except as provided in subparagraph (5).
  • (5) All refunds of premiums and all policyholder dividends or similar amounts under the contract are to be applied as a reduction in future premiums or to increase future benefits, except that a refund on the event of death of the insured or a complete surrender or cancellation of the contract cannot exceed the aggregate premiums paid under the contract.
  • (6) The contract meets the consumer protection provisions set forth in Section 7702B(g) of the Internal Revenue Code of 1986, as amended.

"Qualified long-term care insurance contract" or "federally tax-qualified long-term care insurance contract" also means the portion of a life insurance contract that provides long-term care insurance coverage by rider or as part of the contract and that satisfies the requirements of Sections 7702B(b) and 7702B(e) of the Internal Revenue Code of 1986, as amended.

(Source: P.A. 92-148, eff. 7-24-01.)

 

(215 ILCS 5/351A-2) (from Ch. 73, par. 963A-2)

Sec. 351A-2. Group policy issued in another state. No group long-term care insurance coverage may be offered to a resident of this State under a group policy issued in another state to a group described in paragraph (4) of subsection (e) of Section 351A-1, unless the Director determines that this State or another state having statutory and regulatory long-term care insurance requirements substantially similar to those adopted in this State has made a determination that such requirements have been met.

(Source: P.A. 85-1172; 85-1174; 85-1440.)

 

(215 ILCS 5/351A-3) (from Ch. 73, par. 963A-3)

Sec. 351A-3. Disclosures. The Director may adopt rules that include standards for full and fair disclosure setting forth the manner, content, and required disclosures for the sale of long-term care insurance policies, terms of renewability, initial and subsequent conditions of eligibility, nonduplication of coverage provisions, coverage of dependents, preexisting conditions, termination of insurance, continuation or conversion, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions, and definitions of terms.

(Source: P.A. 85-1172; 85-1174; 85-1440.)

 

(215 ILCS 5/351A-4) (from Ch. 73, par. 963A-4)

Sec. 351A-4. Limitation. No long-term care insurance policy may:

  • (1) Be cancelled, nonrenewed or otherwise terminated on grounds of the age or the deterioration of the mental or physical health of the insured individual or certificate holder.
  • (2) Contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder.
  • (3) Provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care.

(Source: P.A. 92-148, eff. 7-24-01.)

 

(215 ILCS 5/351A-4.5)

Sec. 351A-4.5. Long-term care; coverages. Nothing in this Code prohibits an insurance company from offering a long-term care insurance policy that provides for (1) reimbursement of paid premiums in the event of cancellation or (2) reduced benefits in the event the policyholder discontinues premium payments.

(Source: P.A. 88-290.)

 

(215 ILCS 5/351A-5) (from Ch. 73, par. 963A-5)

Sec. 351A-5. Preexisting condition. (a) No long-term care insurance policy or certificate other than a policy or certificate thereunder issued to a group as defined in paragraph (1) of subsection (e) of Section 351A-1 shall use a definition of "preexisting condition" which is more restrictive than the following: Preexisting condition means the existence of symptoms which would cause an ordinarily prudent person to seek diagnosis, care or treatment, or a condition for which medical advice or treatment was recommended by, or received from a provider of health care services, within 6 months preceding the effective date of coverage for an insured person.

(b) No long-term care insurance policy or certificate other than a policy or certificate thereunder issued to a group as defined in paragraph (1) subsection (e) of Section 351A-1 may exclude coverage for a loss or confinement which is the result of a preexisting condition unless such loss or confinement begins within 6 months following the effective date of coverage of an insured person.

(c) The Director may extend the limitation periods set forth in subsections (a) and (b) of this Section as to specific age group categories in specific policy forms upon finding that the extension is in the best interest of the public.

(d) The definition of "preexisting condition" does not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant, and, on the basis of the answers on that application, from underwriting in accordance with that insurer's established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in subsection (b) of this Section expires. No long-term care insurance policy or certificate may exclude or use waivers or riders of any kind to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in subsection (b) of this Section.

(Source: P.A. 85-1172; 85-1174; 85-1440.)

 

(215 ILCS 5/351A-6) (from Ch. 73, par. 963A-6)

Sec. 351A-6. Prior hospitalization; institutionalizations.

(a) On and after the effective date of this amendatory Act of 1989, no long-term care insurance policy may be delivered or issued for delivery in this State if such policy:

  • (1) conditions eligibility for any benefits on a prior hospitalization requirement; or
  • (2) conditions eligibility for benefits provided in an institutional care setting on the receipt of a higher level of institutional care.

(b) Beginning one year after the effective date of this amendatory Act of 1989, a long-term care insurance policy containing any limitations or conditions for eligibility other than those prohibited above in subsection (a) shall clearly label in a separate paragraph of the policy or certificate entitled "Limitations or Conditions on Eligibility for Benefits" such limitations or conditions, including any required number of days of confinement.

  • (1) A long-term care insurance policy containing a benefit advertised, marketed or offered as a home health care or home care benefit may not condition receipt of benefits on a prior institutionalization requirement.
  • (2) A long-term care insurance policy which conditions eligibility of non-institutional benefits on the prior receipt of institutional care shall not require a prior institutional stay of more than 30 days for which benefits are paid.

(Source: P.A. 85-1440; 86-384.)

 

(215 ILCS 5/351A-7) (from Ch. 73, par. 963A-7)

Sec. 351A-7. Right to return.

(a) An individual long-term care insurance policyholder shall have the right to return the policy within 30 days of its delivery and to have the premium refunded directly to him or her if, after examination of the policy, the policyholder is not satisfied for any reason. Long-term care insurance policies shall have a notice prominently printed on the first page of the policy or attached thereto stating in substance that the policyholder shall have the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason.

(b) A person insured under a long-term care insurance policy or certificate issued pursuant to a direct response solicitation shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded directly to him or her if, after examination, the insured person is not satisfied for any reason. Long-term care insurance policies or certificates issued pursuant to a direct response solicitation shall have a notice prominently printed on the first page of the policy or certificate attached thereto stating in substance that the insured person shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the insured person is not satisfied for any reason. This subsection also applies to denials of applications, and any refund must be made within 30 days of the return or denial.

(Source: P.A. 92-148, eff. 7-24-01.)

 

(215 ILCS 5/351A-8) (from Ch. 73, par. 963A-8)

Sec. 351A-8. Outline of coverage.

(a) An outline of coverage shall be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation through means which prominently direct the attention of the recipient to the document and its purpose.

  • (1) The Director shall prescribe a standard format including style, arrangement and overall appearance and the content of an outline of coverage.
  • (2) In the case of agent solicitations, an agent must deliver the outline of coverage prior to the presentation of an application or enrollment form.
  • (3) In the case of direct response solicitations, the outline of coverage must be presented in conjunction with any application or enrollment form.

(b) The outline of coverage shall include:

  • (1) A description of the principal benefits and coverage provided in the policy.
  • (2) A statement of the principal exclusions, reductions and limitations contained in the policy.
  • (3) A statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation in the policy of a right to change premium. Continuation or conversion provisions of group coverage shall be specifically described.
  • (4) A statement that the outline of coverage is a summary only, not a contract of insurance, and that the policy or group master policy contain governing contractual provisions.
  • (5) A description of the terms under which the policy or certificate may be returned and premium refunded.
  • (6) A brief description of the relationship of cost of care and benefits.
  • (7) A statement that discloses to the policyholder or certificate holder whether the policy is intended to be a federally tax-qualified long-term care insurance contract under 7702B(b) of the Internal Revenue Code of 1986, as amended.

(Source: P.A. 92-148, eff. 7-24-01.)

 

(215 ILCS 5/351A-9) (from Ch. 73, par. 963A-9)

Sec. 351A-9. Disclosure in certificate. A certificate issued pursuant to a group long-term care insurance policy, which policy is delivered or issued for delivery in this State, shall include each of the following:

(1) A description of the principal benefits and coverage provided in the policy.

(2) A statement of the principal exclusions, reductions and limitations contained in the policy.

(3) A statement that the group master policy determines governing contractual provisions.

(Source: P.A. 85-1172; 85-1174; 85-1440.)

 

(215 ILCS 5/351A-9.1) (from Ch. 73, par. 963A-9.1)

Sec. 351A-9.1. Policy summary and benefit reports.

(a) At the time of policy delivery, a policy summary shall be delivered for an individual life insurance policy which provides long-term care benefits within the policy or by rider. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant's request, but regardless of request shall make such delivery no later than at the time of policy delivery. In addition to complying with all applicable requirements, the summary shall also include:

  • (1) an explanation of how the long-term care benefit interacts with other components of the policy, including deductions from death benefits;
  • (2) an illustration of the amount of benefits, the length of benefit, and the guaranteed lifetime benefits if any, for each covered person;
  • (3) any exclusions, reductions and limitations on benefits of long-term care; and
  • (4) if applicable to the policy type, the summary shall also include:
    • (A) disclosure of the effects of exercising other rights under the policy;
    • (B) disclosure of guarantees related to long-term care costs of insurance charges; and
    • (C) current and projected maximum lifetime benefits.

(b) Any time a long-term care benefit, funded through a life insurance vehicle by the acceleration of the death benefit, is in benefit payment status, a monthly report shall be provided to the policyholder. Such report shall include:

  • (1) any long-term care benefits paid during the month;
  • (2) an explanation of any changes in the policy, including changes in death benefits or cash values, due to long-term care benefits being paid out; and
  • (3) the amount of long-term care benefits existing or remaining.

(Source: P.A. 86-384.)

 

(215 ILCS 5/351A-9.2)

Sec. 351A-9.2. Delivery of policy. If an applicant for a long-term care insurance contract or certificate is approved, the issuer shall deliver the contract or certificate of insurance to the applicant no later than 30 days after the date of approval.

(Source: P.A. 92-148, eff. 7-24-01.)

 

(215 ILCS 5/351A-9.3)

Sec. 351A-9.3. Claim denial; explanation. If a claim under a long-term care insurance contract is denied, the issuer, within 60 days after receipt of a written request by a policyholder or certificate holder or a policyholder's or certificate holder's representative shall:

  • (1) provide a written explanation of the reasons for the denial; and
  • (2) make available all information directly related to the denial.

(Source: P.A. 92-148, eff. 7-24-01.)

 

(215 ILCS 5/351A-10) (from Ch. 73, par. 963A-10)

Sec. 351A-10. Any policy or rider advertised, marketed or offered as long-term care or nursing home insurance shall comply with the provisions of this Article.

(Source: P.A. 85-1440; 86-384.)

 

(215 ILCS 5/351A-11) (from Ch. 73, par. 963A-11)

Sec. 351A-11. Rules and regulations. The Director may adopt rules and regulations establishing minimum standards for marketing practices and reporting practices, penalties for violating those standards, and loss ratio standards for long-term care insurance policies, provided that a specific reference to long-term care insurance policies is contained in the regulation. Rules adopted pursuant to this Article shall be in accordance with the provisions of the Illinois Administrative Procedure Act.

(Source: P.A. 87-601.)


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