Insurance and Real Estate Committee
AN ACT CONCERNING SHORT-TERM CARE INSURANCE
SUMMARY: This act establishes “short-term care” insurance as a new type of insurance policy that may be offered in Connecticut. These policies provide certain health benefits for 300 days or less. The act requires short-term care insurance policies to be filed with and approved by the insurance commissioner before they are issued or delivered. It also requires the commissioner to adopt regulations establishing, among other things, a short-term care insurance policy review process and permissible loss ratios.
The act establishes disclosure requirements for insurers and other entities (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. Upon an insured's written request, these issuing entities must also (1) disclose to an insured's managed care community the insured's 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.
EFFECTIVE DATE: October 1, 2016
SHORT-TERM CARE INSURANCE FILING REQUIREMENTS
Short-Term Care Insurance Policies
Under the act, short-term care insurance policies are individual health insurance policies that provide coverage for 300 days or less, 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. They do not include policies primarily providing (1) supplemental Medicare coverage (i. e. , Medigap coverage) or (2) coverage for basic medical-surgical expenses, hospital confinement indemnities, major medical expenses, disability income protection, accidents only, specified accidents, or limited benefits.
Submission
The act requires (1) 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 and (2) the commissioner to adopt regulations establishing review procedures for these policies. (“Form” is a term of art that includes policies, riders, and endorsements. )
Commissioner Approval of Rate Filings
Under the act, the commissioner must adopt regulations ensuring rates are not excessive, inadequate, or unfairly discriminatory. Rates are not effective until she approves them in accordance with these regulations, and the act authorizes her to disapprove rates failing to meet the standards in the regulations.
Commissioner Disapproval of Forms
The commissioner must reject any forms that (1) do not comply with the law, (2) contain unfair or deceptive provisions, or (3) contain provisions that misrepresent the policy. 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.
Required Disclosure
The act prohibits insurers and other issuing entities from issuing or delivering a short-term care policy without first providing, at the time of solicitation or application, a full and fair written disclosure of the policy's benefits and limitations. For short-term care policies with 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 the policyholder's subsequent options; and
4. the premium rate or rate schedule applicable to the applicant until the issuer files a request with the commissioner for a premium rate or rate schedule revision.
Applicants must sign an acknowledgment, at the time of the application, that the insurer or other issuing entity has disclosed this information. If the application method does not allow for a signature (e. g. , an electronic application), the applicant must sign an acknowledgement before the policy is delivered.
Regulations
The act requires the commissioner to adopt implementing regulations for short-term care insurance policies, including:
1. permissible loss ratios and exclusionary periods,
2. circumstances when a policy is renewable, and
3. the benefits payable in relation to an insured's other insurance coverage.
OLR Tracking: AR; LH; VR; cmg