2023 Illinois Compiled Statutes › Chapter 215 - INSURANCE › 215 ILCS 5/ - Illinois Insurance Code. › Article XIXA - Long-Term Care Insurance

(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.)