OLR Bill Analysis
AN ACT CONCERNING SHORT-TERM CARE INSURANCE.
This bill establishes “short-term care insurance” as a new type of insurance providing certain health benefits for 300 or fewer days and prohibits such policies from being issued or delivered unless they have been filed and approved by the insurance commissioner. The bill also requires the commissioner to adopt regulations determining, among other things, a short-term care insurance policy review process and permissible loss ratio.
The bill establishes disclosure requirements for insurers, fraternal benefit societies, hospital service corporations, medical service corporations, and health care centers issuing or delivering short-term care insurance policies in Connecticut. It also prohibits these entities from refusing to accept or reimburse claims submitted by, or prepared with the help of, a managed residential community solely because the community submits or prepares the claim. Such issuing entities must, upon an insured's written request, also (1) disclose to an insured's managed care community his or her coverage eligibility and (2) provide the community with a copy of an initial claim acceptance or declination at the same time they provide one to the insured.
The bill also makes a conforming change.
EFFECTIVE DATE: October 1, 2016
SHORT-TERM CARE INSURANCE FILING REQUIREMENTS
Short-Term Care Insurance Policies
Under the bill, short-term care insurance policies are individual health insurance policies that provide 300 or fewer days of coverage, on an expense-incurred, indemnity, or prepaid basis, for necessary care or treatment of an injury, illness, or loss of functional capacity provided by a certified or licensed health care provider in a setting other than an acute care hospital. Short-term care policies exclude policies primarily covering Medicare supplements, basic medical-surgical expenses, hospital confinement indemnities, major medical expenses, disability income protection, accidents only, specified accidents, or limited benefits.
The bill requires insurers to file copies of short-term care insurance policy forms, risk classifications, and premium rates with the insurance commissioner before delivering or issuing them to Connecticut residents. Under the bill, the commissioner must adopt regulations that establish a short-term care policy review procedure.
Commissioner Approval of Rate Filings
The commissioner must approve rates before they take effect. Under the bill, she (1) must adopt regulations ensuring rates are not excessive, inadequate, or unfairly discriminatory and (2) may disapprove rates that fail to meet these standards.
Commissioner Disapproval of Forms
The commissioner must reject any forms which (1) do not comply with law, (2) contain unfair or deceptive provisions, or (3) contain provisions that misrepresent the policy. (“Form” is a term of art that include policies, riders, and endorsements.) In such cases, the commissioner must notify the insurer in writing, specifying the reasons for her disapproval and ordering that no short-term care insurer deliver or issue a Connecticut policy on or containing the disapproved form.
Any insurer disagreeing with the commissioner may request a hearing under existing insurance provisions.
The bill requires insurers and certain other issuing entities to provide, at the time an individual is solicited or applies to purchase a policy, a full and fair written disclosure of the policy's benefits and limitations. The bill prohibits these entities from issuing or delivering a short-term care policy without first providing this disclosure.
Except for short-term care policies without premium rate revisions or rate schedule increases, the disclosure must include:
1. a statement, in at least 12-point bold face type, that the policy does not provide long-term care insurance coverage and is not a long-term care insurance policy or a Connecticut Partnership for Long-Term Care insurance policy;
2. a statement that the policy may be subject to future rate increases;
3. an explanation of potential future premium rate revisions and what the policyholder's options are in such an event; and
4. the premium rate or rate schedule applicable to the applicant, until a request is filed with the commissioner for a premium rate or rate schedule revision.
Applicants must sign an acknowledgment, at the time of application, that the insurer or other issuing entity has disclosed this information. If the application method does not allow for a signature, the applicant must sign an acknowledgement before the policy is delivered.
The commissioner is required to adopt regulations for short-term care insurance policies, including:
1. permissible loss ratios;
2. permissible exclusionary periods;
3. circumstances when a policy is renewable; and
4. the benefits payable in relation to an insured's other insurance coverage.
Insurance and Real Estate Committee