A deductible for each benefit period of at least $250 and not more than $500 except that the deductible shall be at least $250 and not more than $1,000 for each benefit period for a policy insuring members of a family. All covered expenses of any insured family member may be applied to satisfy the deductible.
A “benefit period" shall be defined as a calendar year.
Payment for all services covered under the contract by any licensed health care professional qualified to provide the services; except payment for psychologists' services may be conditioned upon referral or supervision by a physician.
Payment of benefits for maternity, subject to the limitations in pars. (a)
, and (c)
, if maternity was covered under the prior policy.
Benefits for outpatient treatment of mental illness, if provided by the policy, may be limited to either of the following coverages at the option of the insurer:
At least 50% of usual, customary and reasonable expenses which are in excess of the policy deductible, subject to the policy lifetime maximum.
The filing procedures of s. Ins 6.05
, shall apply to policy forms filed as individual conversion policies.
Ins 3.43 History
Cr. Register, April, 1981, No. 304
, eff. 5-1-81; am. (1) (b) and (e), cr. (1) (f) and (g), Register, October, 1982, No. 322
, eff. 11-1-82; correction in (2) made under s. 13.93 (2m) (b) 7., Stats., Register, January, 1999, No. 517
Effective date of s. 632.897, Stats. Ins 3.44(1)(1)
, Stats., applies to group policies issued or renewed on or after May 14, 1980, or if a policy is not renewed within 2 years after the effective date of the act, s. 632.897
, Stats., is effective at the end of 2 years from May 14, 1980.
A group policy as defined in s. 632.897 (1) (c) 1.
, Stats., shall be considered to have been renewed on any date specified in the policy as a renewal date or on any date on which the insurer or the insured changed the rate of premium for the group policy.
A group policy as defined in s. 632.897 (1) (c) 2.
, Stats., shall be considered to have been renewed on any date on which an underlying collective bargaining agreement or other underlying contract is renewed, or on which a significant change is made in benefits.
, Stats., applies to individual policies issued or renewed after May 14, 1980, except that it shall not apply to any individual policy in force on May 13, 1980, in which the insurer does not have the option of changing premiums.
Ins 3.44 History
Cr. Register, April, 1981, No. 304
, eff. 5-1-81.
Conversion policies by insurers offering group policies only.
Section 632.897 (4) (d)
, Stats., (first sentence), establishes that an insurer offering group policies only is not required to offer individual coverage. Since the insurer has no individual conversion policies which it may offer, it may not require a terminated insured who elected to continue coverage under s. 632.897 (2)
, Stats., to convert to individual coverage under s. 632.897 (6)
, Stats., after 12 months. The terminated person may continue group coverage except as provided in s. 632.897 (3) (a)
Ins 3.45 History
Cr. Register, April, 1981, No. 304
, eff. 5-1-81.
Long-term care, nursing home and home health care policies; loss ratios; rating practices; continuation and conversion, reserves. Ins 3.455(1)(a)(a)
The commissioner finds that long-term care policies and life insurance-long-term care coverage are offered and marketed to a population which is particularly susceptible to pressure sales tactics and misleading or fraudulent sales activities. These products are also complex and difficult for most purchasers to analyze and understand.
The purchase of any of these products is an important and significant decision because of the cost and the significance of these insurance products in planning and providing for long-term care. This section and s. Ins 3.46
are adopted to provide adequate protection for Wisconsin insureds and the public.
This section does not apply to an accelerated benefit coverage of a life insurance policy, endorsement or rider as described under s. Ins 3.46 (2)
This section, except for subs. (6)
, does not apply to individual long-term care policy or life insurance-long-term care coverage, to a group long-term care policy or life insurance-long-term care coverage or a certificate under the group policy, or to a renewal policy or coverage or certificate, if:
The individual long-term care policy or life insurance-long-term care coverage was issued prior to June 1, 1991;
The group policy is issued prior to June 1, 1991 and all certificates under the policy are issued prior to June 1, 1991; or
Section Ins 3.46
in effect prior to June 1, 1991 and subs. (6)
apply to those policies, coverages or certificates which qualify for exemption under par. (b)
“Basis for continuation of coverage" means a policy provision that maintains coverage under the existing group policy when the coverage would otherwise terminate and that is subject only to the continued timely payment of premium when due. Group policies that restrict provision of benefits and services to, or contain incentives to use certain providers or facilities may provide continuation benefits that 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 non-managed care plan, including but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity.
“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 that it replaced, for at least 3 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.
“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 in excess of those provided under the group policy from which conversion is made. Where the group policy form which conversion is made restricts provision of benefits and services to or contains incentives to use certain providers or facilities, the commissioner, in making a determination as to the substantial equivalency of the 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. The converted policy offered shall be on a form generally available in the state.
“Exceptional increase" means an increase in premium by an insurer that the commissioner determines is justified under any of the following circumstances:
Changes in laws or rules applicable to long-term care coverage in this state.
Increased and unexpected utilization that affects the majority of insurers of similar products.
“Incidental" means that the value of the long-term care benefits provided is less than 10% of the total value of the benefits provided over the life of the policy measured as of the date of issue.
“Managed-care plan" is a health care or assisted living arrangement designed to coordinate patient care or control costs through utilization review, case management or use of specific provider networks.
“Qualified actuary" means a member in good standing of the American academy of actuaries.
“Similar policy forms" means all of the long-term care, nursing home and home health care insurance policies and certificates offered by an insurer that fall within one of the following categories:
Non-institutional long-term care, home health care benefits only.
Comprehensive long-term care, nursing home and home health care benefits.
(4) Application of the insurance code to long-term care, nursing home and home health care group policies.
A group or blanket long-term care policy or certificate may be exempt, under s. 600.01 (1) (b) 3.
, Stats., from chs. 600
, Stats., and rules adopted under those statutes only if:
The policy is issued for delivery and delivered in another state;
The policy is subject to regulatory requirements substantially similar to those provided under chs. 600
, Stats., and the rules;
The policy and sufficient information to enable the office to determine compliance with pars. (a)
is filed with the office; and
The office makes a written determination that the policy complies with pars. (a)
and that the policy is not contrary to the public interest, before the policy or certificates under the policy are marketed or solicited in this state.
Insurers shall set and maintain rates and benefits for long-term care policies so that the loss ratio is at least:
65%, for group policies which issue coverage as the result of solicitation of individuals through the mail or the mass media, including, but not limited to, print or broadcast advertising.
For the purpose of this subsection a loss ratio shall be calculated on the basis of the ratio of the present value of the expected benefits to the present value of the expected premium over the entire period of coverage. An insurer shall consider and evaluate the following:
Statistical credibility of incurred claims experience and earned premium over the entire period of coverage;
The entire period for which rates have been computed to provide coverage;
Product features such as elimination periods, deductibles and maximum limits.
An insurer shall submit its calculations of the loss ratio for a long-term care policy at the same time it submits a long-term care policy form and at any time that it makes a filing for rates under a long-term care policy.
The provisions of this subsection apply only to policies issued prior to January 1, 2002.
(6) Annual loss ratio report.
An insurer shall annually, not later than April 1, file a report with the office in the form prescribed by the commissioner regarding its loss ratios and loss experience under long-term care policies. The report shall be certified to by a qualified actuary.
(7) Long-term care, nursing home and home health care policies, continuation and conversion requirements. Ins 3.455(7)(a)(a)
A group policy, as defined by s. 632.897 (1) (c)
, Stats., which is a long-term care policy shall provide terminated insureds the right to continue under the group policy as required under s. 632.897
An individual long-term care policy that provides coverage for a spouse shall permit the spouse to obtain individual coverage as required under s. 632.897 (9)
, Stats., upon divorce or annulment.
For the purpose of s. 632.897
, Stats., an insurer provides reasonably similar individual coverage to a person converting from a long-term care policy only if the insurer offers an individual policy that is identical to or in excess of the benefits provided under the terminated coverage.
In addition to offering the individual conversion policy as required under par. (c)
, an insurer may also offer the person the alternative of an individual conversion policy that complies with all of the following:
Provides coverage of care in an institutional setting, if the original policy provided coverage in an institutional setting.
Provides coverage of care in a community-based setting, if the original policy provided coverage in a community-based setting.
Written application for the converted policy shall be made and the first premium due, if any, shall be paid as directed to the insurer within 30 days after notice of termination of group coverage. The converted policy shall be issued effective on the day following the termination of coverage under the group policy, and shall be guaranteed renewable annually.
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 inception of coverage under the group policy replaced except when the premium was a composite premium. If the premium for the policy from which conversion is made was a composite premium then at conversion the premium shall be based upon attained age at the time of conversion.
The offer of continuation of coverage or issuance of a converted policy shall comply with s. 632.897
, Stats., except when either of the following occurs:
Termination of group coverage resulted from an individual's failure to make any required payment of premium or contribution when due.
The terminating coverage is replaced not later than 31 days after termination by group coverage effective on the day following the termination of coverage providing benefits identical to or in excess of those provided by the terminating coverage and the premium for which is calculated in a manner consistent with the requirements of par. (f)
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 that provides benefits on the basis of incurred expenses, may contain a provision that 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. The provision shall only be included in the converted policy if the converted policy also provides for a premium decrease or refund that reflects the reduction in benefits payable.