Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 3 - LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES › Subchapter Y - STANDARDS FOR LONG-TERM CARE INSURANCE, NON-PARTNERSHIP AND PARTNERSHIP LONG-TERM CARE INSURANCE COVERAGE UNDER INDIVIDUAL AND GROUP POLICIES AND ANNUITY CONTRACTS, AND LIFE INSURANCE POLICIES THAT PROVIDE LONG-TERM CARE BENEFITS WITHIN THE POLICY › Division 2 - NON-PARTNERSHIP AND PARTNERSHIP LONG-TERM CARE INSURANCE › Section 3.3828 - Continuation or Conversion; Discontinuance and Replacement

Current through Reg. 49, No. 28; July 12, 2024
(a) Continuation or conversion. In
					 conjunction with the provisions of §
											3.3807
					 of this title (relating to Policy or Certificate Standards for Guaranteed
					 Renewability) and §
											3.3810
					 of this title (relating to Policy or Certificate Standards for
					 Noncancellability), an insurer or other entity providing group long-term care
					 insurance coverage shall provide a basis for continuation or conversion of
					 coverage.
(1) For the purposes of this
					 section, the term "a basis for continuation of coverage" means a policy
					 provision which maintains coverage under the existing group policy when such
					 coverage would otherwise terminate and which is subject only to the continued
					 timely payment of premium when due. Group policies which restrict provision of
					 benefits and services to, or contain incentives to use, certain providers
					 and/or facilities may provide continuation benefits which are substantially
					 equivalent to the benefits of the existing group policy. The commissioner shall
					 make a determination as to the substantial equivalency of benefits and, in
					 doing so, shall take into consideration the differences between managed care
					 and nonmanaged care plans, including, but not limited to, provider system
					 arrangements, service availability, benefit levels, and administrative
					 complexity.
(2) For the purposes of
					 this section, the term "a basis for conversion of coverage" means a policy
					 provision that an individual whose coverage under the group policy would
					 otherwise terminate or has been terminated for any reason, including
					 discontinuance of the group policy in its entirety or with respect to an
					 insured class, and who has been continuously insured under the group policy
					 (and any group policy which it replaced), for at least six months immediately
					 prior to termination, shall be entitled to the issuance of a converted policy
					 by the insurer under whose group policy he or she is covered, without evidence
					 of insurability.
(3) For the
					 purposes of this section, the term "converted policy" means an individual
					 policy of long-term care insurance providing benefits identical to or benefits
					 determined by the commissioner to be substantially equivalent to, or greater
					 than, those provided under the group policy from which conversion is made.
					 Where the group policy from which conversion is made restricts provision of
					 benefits and services to, or contains incentives to use, certain providers
					 and/or facilities, the commissioner, in making a determination as to the
					 substantial equivalency of benefits, shall take into consideration the
					 differences between managed care and non-managed care plans, including, but not
					 limited to, provider system arrangements, service availability, benefit levels,
					 and administrative complexity.
(4)
					 Written application for the converted policy shall be made, and the first
					 premium due, if any, shall be paid as directed by the insurer not later than 31
					 days after termination of coverage under the group policy. The converted policy
					 shall be issued effective on the day following the termination of coverage
					 under the group policy and shall be renewable annually.
(5) Unless the group policy from which
					 conversion is made replaced previous group coverage, the premium for the
					 converted policy shall be calculated on the basis of the insured's age at
					 inception of coverage under the group policy from which conversion is made.
					 Where the group policy from which conversion is made replaced previous group
					 coverage, the premium for the converted policy shall be calculated on the basis
					 of the insured's age at the inception of coverage under the group policy
					 replaced.
(6) Continuation of
					 coverage or issuance of a converted policy shall be mandatory, except where:
(A) termination of group coverage resulted
					 from an individual's failure to make any required payment of premium or
					 contribution when due; or
(B) the
					 terminating coverage is replaced, not later than 31 days after termination, by
					 group coverage effective on the day following the termination of coverage:
(i) providing benefits identical to or
					 benefits determined by the commissioner to be substantially equivalent to, or
					 greater than, those provided by the terminating coverage; and
(ii) the premium for which is calculated in a
					 manner consistent with the requirements of paragraph (5) of this
					 section.
(7)
					 Notwithstanding any other provision of this section, a converted policy, issued
					 to an individual who at the time of conversion is covered by another long-term
					 care insurance policy which provides benefits on the basis of incurred
					 expenses, may contain a provision which results in a reduction of benefits
					 payable if the benefits provided under the additional coverage, together with
					 the full benefits provided by the converted policy, would result in payment of
					 more than 100% of incurred expenses. Such provision shall only be included in
					 the converted policy if the converted policy also provides for a premium
					 decrease or refund which reflects the reduction in benefits payable.
(8) The converted policy may provide that the
					 benefits payable under the converted policy, together with the benefits payable
					 under the group policy from which conversion is made, shall not exceed those
					 that would have been payable had the individual's coverage under the group
					 policy remained in force and effect.
(9) Notwithstanding any other provision of
					 this section, any insured individual, whose eligibility for group long-term
					 care coverage is based upon his or her relationship to another person, shall be
					 entitled to continuation of coverage under the group policy upon termination of
					 the qualifying relationship by death or dissolution of marriage.
(10) For the purpose of this section, the
					 term "managed care arrangement plan" is a health care arrangement or assisted
					 living arrangement designed to coordinate patient care or control costs through
					 utilization review, case management, or use of specific provider
					 networks.