Alabama Administrative Code › Title 482 - ALABAMA DEPARTMENT OF INSURANCE › Chapter 482-1-091 - LONG TERM CARE INSURANCE › Section 482-1-091-.17 - Standard Format Outline Of Coverage

Current through Register Vol. 42, No. 9, June 28, 2024
This rule implements, interprets and makes specific, the
				provisions of Subsection (g) of Section
				27-19-105,
Code of
				Ala. 1975
, in prescribing a standard format and the content of an
				outline of coverage.
(a) The outline
			 of coverage shall be a free-standing document, using no smaller than ten point
			 type.
(b) The outline of coverage
			 shall contain no material of an advertising nature.
(c) Text that is capitalized or underscored
			 in the standard format outline of coverage may be emphasized by other means
			 which provide prominence equivalent to such capitalization or
			 underscoring.
(d) Use of the text
			 and sequence of text of the standard format outline of coverage is mandatory,
			 unless otherwise specifically indicated.
(e) Format for outline of coverage:
[COMPANY NAME]
[ADDRESS -- CITY & STATE]
[TELEPHONE NUMBER]
LONG-TERM CARE INSURANCE
OUTLINE OF COVERAGE
[Policy Number or Group Master Policy and Certificate
				Number]
[Except for policies or certificates which are guaranteed
				issue, the following caution statement, or language substantially similar, must
				appear as follows in the outline of coverage.]
Caution: The issuance of this long-term care insurance [policy]
				[certificate] is based upon your responses to the questions on your
				application. A copy of your [application] [enrollment form] [is enclosed] [was
				retained by you when you applied]. If your answers are incorrect or untrue, the
				company has the right to deny benefits or rescind your policy. The best time to
				clear up any questions is now, before a claim arises! If, for any reason, any
				of your answers are incorrect, contact the company at this address: [insert
				address]
1. This policy is [an
			 individual policy of insurance] ([a group policy] which was issued in the
			 [indicate jurisdiction in which group policy was issued]).
2. PURPOSE OF OUTLINE OF COVERAGE. This
			 outline of coverage provides a very brief description of the important features
			 of the policy. You should compare this outline of coverage to outlines of
			 coverage for other policies available to you. This is not an insurance
			 contract, but only a summary of coverage. Only the individual or group policy
			 contains governing contractual provisions. This means that the policy or group
			 policy sets forth in detail the rights and obligations of both you and the
			 insurance company. Therefore, if you purchase this coverage, or any other
			 coverage, it is important that you READ YOUR POLICY (OR CERTIFICATE)
			 CAREFULLY!
3. FEDERAL TAX
			 CONSEQUENCES.
This [POLICY] [CERTIFICATE] is intended to be a federally
				tax-qualified long-term care insurance contract under Section 7702B(b) of the
				Internal Revenue Code of 1986, as amended.
OR
Federal Tax Implications of this [POLICY] [CERTIFICATE]. This
				[POLICY] [CERTIFICATE] is not intended to be a federally tax-qualified
				long-term care insurance contract under Section 7702B(b) of the Internal
				Revenue Code of 1986 as amended. Benefits received under the [POLICY]
				[CERTIFICATE] may be taxable as income.
4. TERMS UNDER WHICH THE POLICY OR
			 CERTIFICATE MAY BE CONTINUED IN FORCE OR DISCONTINUED.
(a) [For long-term care health insurance
			 policies or certificates describe one of the following permissible policy
			 renewability provisions:
(1) Policies and
			 certificates that are guaranteed renewable shall contain the following
			 statement:] RENEWABILITY: THIS POLICY [CERTIFICATE] IS GUARANTEED RENEWABLE.
			 This means you have the right, subject to the terms of your policy,
			 [certificate] to continue this policy as long as you pay your premiums on time.
			 [Company Name] cannot change any of the terms of your policy on its own, except
			 that, in the future, IT MAY INCREASE THE PREMIUM YOU PAY.
(2) [Policies and certificates that are
			 noncancellable shall contain the following statement:] RENEWABILITY: THIS
			 POLICY [CERTIFICATE] IS NONCANCELLABLE. This means that you have the right,
			 subject to the terms of your policy, to continue this policy as long as you pay
			 your premiums on time. [Company Name] cannot change any of the terms of your
			 policy on its own and cannot change the premium you currently pay. However, if
			 your policy contains an inflation protection feature where you choose to
			 increase your benefits, [Company Name] may increase your premium at that time
			 for those additional benefits.
(b) [For group coverage, specifically
			 describe continuation/conversion provisions applicable to the certificate and
			 group policy;]
(c) [Describe waiver
			 of premium provisions or state that there are not such provisions;]
(d) [State whether or not the company has a
			 right to change premium, and if such right exists, describe clearly and
			 concisely each circumstance under which premium may change.]
5. TERMSUNDERWHICHTHECOMPANYMAY
			 CHANGEPREMIUMS.
(a) [In bold type larger than
			 the maximum type required to be used for the other provisions of the outline of
			 coverage, state whether or not the company has a right to change the premium,
			 and if a right exists, describe clearly and concisely each circumstance under
			 which the premium may change.]
6. TERMS UNDER WHICH THE POLICY OR
			 CERTIFICATE MAY BE RETURNED AND PREMIUM REFUNDED.
(a) [Provide a brief description of the right
			 to return -- "free look" provision of the policy.]
(b) [Include a statement that the policy
			 either does or does not contain provisions providing for a refund or partial
			 refund of premium upon the death of an insured or surrender of the policy or
			 certificate. If the policy contains such provisions, include a description of
			 them.]
7. THIS IS NOT
			 MEDICARE SUPPLEMENT COVERAGE. If you are eligible for Medicare, review the
			 Medicare Supplement Buyer's Guide available from the insurance company.
(a) [For agents] Neither [insert company
			 name] nor its agents represent Medicare, the federal government or any state
			 government.
(b) [For direct
			 response] [insert company name] is not representing Medicare, the federal
			 government or any state government.
8. LONG-TERM CARE COVERAGE. Policies of this
			 category are designed to provide coverage 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 as in a nursing home, in the community or
			 in the home.
This policy provides coverage in the form of a fixed dollar
				indemnity benefit for covered long-term care expenses, subject to policy
				[limitations] [waiting periods] and [coinsurance] requirements. [Modify this
				paragraph if the policy is not an indemnity policy.]
9. BENEFITS PROVIDED BY THIS POLICY.
(a) [Covered services, related deductible(s),
			 waiting periods, elimination periods and benefit maximums.]
(b) [Institutional benefits, by skill
			 level.]
(c) [Non-institutional
			 benefits, by skill level.]
(d)
			 Eligibility for Payment of Benefits
[Activities of daily living and cognitive impairment shall be
				used to measure an insured's need for long-term care and must be defined and
				described as part of the outline of coverage.]
[Any additional benefit triggers must also be explained. If
				these triggers differ for different benefits, explanation of the triggers
				should accompany each benefit description. If an attending physician or other
				specified person must certify a certain level of functional dependency in order
				to be eligible for benefits, this too must be specified.]
10. LIMITATIONS AND EXCLUSIONS.
[Describe:
(a)
			 Preexisting conditions.
(b)
			 Non-eligible facilities and provider.
(c) Non-eligible levels of care (e.g.,
			 unlicensed providers, care or treatment provided by a family member,
			 etc.).
(d) Exclusions and
			 exceptions.
(e) Limitations.]
[This section should provide a brief specific description of
				any policy provisions which limit, exclude, restrict, reduce, delay, or in any
				other manner operate to qualify payment of the benefits described in Number 8
				above.]
THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH YOUR
				LONG-TERM CARE NEEDS.
11. RELATIONSHIP OF COST OF CARE AND
			 BENEFITS. Because the costs of long-term care services will likely increase
			 over time, you should consider whether and how the benefits of this plan may be
			 adjusted. [As applicable, indicate the following:
(a) That the benefit level will not increase
			 over time.
(b) Any automatic
			 benefit adjustment provisions.
(c)
			 Whether the insured will be guaranteed the option to buy additional benefits
			 and the basis upon which benefits will be increased over time if not by a
			 specified amount or percentage.
(d)
			 If there is such a guarantee, include whether additional underwriting or health
			 screening will be required, the frequency and amounts of the upgrade options,
			 and any significant restrictions or limitations.
(e) And finally, describe whether there will
			 be any additional premium charge imposed, and how that is to be
			 calculated.]
12.
			 ALZHEIMER'S DISEASE AND OTHER ORGANIC BRAIN DISORDERS.
[State that the policy provides coverage for insureds
				clinically diagnosed as having Alzheimer's disease or related degenerative and
				dementing illnesses. Specifically describe each benefit screen or other policy
				provision which provides preconditions to the availability of policy benefits
				for such an insured.]
13.
			 PREMIUM.
[(a) State the total annual premium
			 for the policy.
(b) If the premium
			 varies with an applicant's choice among benefit options, indicate the portion
			 of annual premium which corresponds to each benefit option.]
14. ADDITIONAL FEATURES.
[(a) Indicate of medical underwriting is
			 used.
(b) Describe other important
			 features.]
15. CONTACT
			 THE STATE SENIOR HEALTH INSURANCE ASSISTANCE PROGRAM IF YOU HAVE GENERAL
			 QUESTIONS REGARDING LONG-TERM CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF
			 YOU HAVE SPECIFIC QUESTIONS REGARDING YOUR LONG-TERM CARE INSURANCE POLICY OR
			 CERTIFICATE.
Author:
Reyn Norman, Associate
				Counsel