SubTitle38a-528a-1_38a-528a-16. Group Short-Term Care Insurance, Title38a Insurance Department, Regulations of Connecticut State Agencies

Regulations of Connecticut State Agencies (Last Updated: June 14,2023)

SubTitle38a-528a-1_38a-528a-16. Group Short-Term Care Insurance

Sec. 38a-528a-1. Applicability and scope

Latest version.

Except as otherwise specifically provided, Sections 38a-528a-1 to 38a-528a-16, inclusive, of the Regulations of Connecticut State Agencies apply to all group short-term care policies or certificates delivered or issued for delivery in this state on or after the effective date of said sections by any insurer.

(Effective August 24, 2018)

Sec. 38a-528a-2. Definitions

Latest version.

As used in Sections 38a-528a-1 to 38a-528a-16, inclusive, of the Regulations of Connecticut State Agencies:

(1) “Applicant” means the proposed certificate holder.

(2) “Insurer” means an insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center.

(3) “Short-term care policy” means any group health insurance policy or certificate delivered or issued for delivery to any resident of this state that is designed to provide, within the terms and conditions of the policy or certificate, benefits 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, for a period not exceeding three hundred days. “Short-term care policy” does not include any such policy or certificate that is offered primarily to provide basic Medicare supplement coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income protection coverage, accident only coverage, specified accident coverage or limited benefit health coverage.

(Effective August 24, 2018)

Sec. 38a-528a-3. Policy definitions and terms

Latest version.

No insurance policy or certificate may be advertised, solicited or issued for delivery to any resident of this state as a short-term care policy unless the terms used in such policy or certificate conform to the meanings given in this section.

(a) “Accident,” “accidental injury,” or “accidental means” shall be defined to employ “result” language and shall not include words that establish an “accidental” means test or use words such as “external, violent, visible wounds” or similar words of description or characterization.

(1) The definition shall not be more restrictive than the following: “Injury or injuries for which benefits are provided means accidental bodily injury sustained by the insured that is the direct result of an accident, independent of disease or bodily infirmity or any other cause, and occurs while insurance coverage is in force.”

(2) Such definition may be further modified to exclude injuries for which benefits are provided under any workers’ compensation, employers’ liability or similar law, or the basic reparations benefits of a no-fault motor vehicle insurance plan.

(b) "Activities of daily living” means activities including: Bathing, dressing, eating, toileting and transferring from bed to chair.

(c) “Acute condition” means that the individual is medically unstable. Such an individual requires frequent monitoring by medical professionals, such as physicians and registered nurses, in order to maintain his or her health status.

(d) “Adult day care” shall not be defined more restrictively than a program of services prescribed by a physician and provided by an organization that provides a program of adult day care outside the home that: (1) Is licensed in accordance with applicable state laws; (2) has a full-time director; (3) has one or more registered nurses or licensed practical nurses in attendance during operating hours for at least four (4) hours a day; (4) operates at least five (5) days a week for a minimum of six (6) hours a day; (5) maintains a written record of medical services given to each client; and (6) has established procedures for obtaining appropriate aid in the event of a medical emergency.

(e) “Convalescent nursing home,” “extended care facility,” or “skilled nursing facility” shall be defined in relation to its status, facilities and available services. A definition of such home or facility shall not be more restrictive than one requiring that it: (1) Be operated pursuant to law; (2) be approved for payment of Medicare benefits or be qualified to receive such approval, if so requested; (3) be primarily engaged in providing, in addition to room and board accommodations, skilled nursing care under the supervision of a duly licensed physician; (4) provide continuous twenty-four (24) hours a day nursing service by or under the supervision of a registered nurse; and (5) maintains a daily medical record of each patient. The definition of such home or facility may provide that such term shall not be inclusive of any home, facility or part thereof used primarily for a rest home or facility for the aged or for the care of drug addicts or alcoholics or a home or facility primarily used for the care and treatment of mental disease or disorders, or custodial or educational care.

(f) “Custodial care” shall not be defined more restrictively than care that: (1) Is provided primarily to assist the insured in the activities of daily living; (2) can be provided without professional skills or training; and (3) could not be omitted without adversely affecting the insured’s physical or mental condition.

(g) A “custodial or intermediate nursing home” is an institution that: (1) Is licensed as a nursing home or operated under the law as a nursing home or a hospice; (2) operates primarily to provide nursing care for which a charge is made for three or more persons; (3) provides continuous nursing care under the supervision of a registered nurse, a licensed practical nurse or a licensed physician; (4) is not a hospital or clinic; (5) is not a home for the aged or mentally ill, a rest home, a community living center, or a place that provides domiciliary, residency or retirement care; and (6) is not a facility that operates primarily for the treatment of alcoholics or drug addicts, even if it is a section of a nursing home.

(h) “Home health care services” shall not be defined more restrictively than medical and nonmedical services provided to ill, disabled or infirm persons who reside at home. Such services may include, for example, homemaker or home health aide services, personal care services, adult day care, respite care services and hospice care services.

(i) “Hospice care” shall not be defined more restrictively than a program that: (1) Provides support and care to an insured who is terminally ill, with no reasonable prospect of cure, and who has a life expectancy of six (6) months or less as estimated by a physician; (2) is prescribed by and under the direction of a physician; and (3) is provided by an organization that meets applicable federal or state requirements for certification or licensing as a hospice care organization. “Hospice Care” may be defined to exclude services provided to someone other than the insured.

(j) “Hospital” may be defined in relation to its status, facilities and available services or to reflect its accreditation by the Joint Commission on Accreditation of Hospitals.

(1) The definition of the term “hospital” shall not be more restrictive than one requiring that the hospital: (A) Be an institution operated pursuant to law; (B) be primarily and continuously engaged in providing or operating, either on its premises or in facilities available to the hospital on a prearranged basis and under the supervision of a staff of duly licensed physicians, medical, diagnostic and major surgical facilities for the medical care and treatment of sick or injured persons on an inpatient basis for which a charge is made; and (C) provide twenty-four (24) hour nursing service by or under the supervision of registered nurses.

(2) The definition of the term “hospital” may state that such term shall not be inclusive of: (A) Convalescent homes, or convalescent, rest or nursing facilities; (B) facilities primarily affording custodial, educational or rehabilitative care; (C) facilities for the aged, drug addicts or alcoholics; or (D) any military, veterans’, soldiers’ home or any hospital contracted or operated by any national government or agency thereof for the treatment of members or former members of the armed forces, except for services rendered on an emergency basis where a legal liability exists for charges made to the individual for such services.

(k) “Loss of functional capacity” shall mean that the insured requires care to assist in meeting day-to-day living requirements such as, but not limited to, eating, bathing and dressing.

(l) “Medicare” shall be defined as “The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as Then Constituted or Later Amended,” or “Title I, Part I of Public Law 89-97, as Enacted by the Eighty-Ninth Congress of the United States of America and popularly known as the Health Insurance for the Aged Act, as then constituted and any later amendments or substitutes thereof,” or words of similar import.

(m) “Mental or nervous disorders” shall not be defined more restrictively than to include neuroses, psychoneurosis, psychopathy, psychosis or mental or emotional disease or disorder of any kind, except that Alzheimer’s disease shall not be considered a mental or nervous disorder.

(n) “Necessary care for confinement in the insured’s own home” shall not be defined more restrictively than home health care services provided to an insured who has suffered a loss of functional capacity.

(o) “Necessary care for confinement in a nursing home” shall mean care provided upon admission recommended by a physician, other than the proprietor or an employee of the skilled nursing care facility, for care that is medically necessary and that is not at first custodial or intermediate in nature but may, after admission, be reduced to a level that is primarily custodial or intermediate.

(p) “One period of confinement” means consecutive days of confinement; it shall be deemed to include successive periods of confinement that are due to the same or related cause and are not separated by at least ninety (90) days during which the covered person is not confined whether at home or in an institution for either skilled nursing care, intermediate or custodial care.

(q) “Personal care” means the provision of hands-on services to assist an individual with activities of daily living.

(r) “Physician” shall be defined as a person who is licensed by the state in which he or she practices to give treatment for which benefits are provided under the short-term care policy and who is acting within the scope of his or her license.

(s) “Sickness or illness” shall not be defined more restrictively than the following: Sickness or illness means disease of an insured that first manifests itself after the effective date of insurance and while the insurance is in force. The definition may be further modified to exclude diseases for which benefits are provided under any workers’ compensation, employers’ liability or similar law.

(Effective August 24, 2018)

Sec. 38a-528a-4. Minimum standards

Latest version.

No group insurance policy or certificate shall be advertised, solicited or issued for delivery in this state as a group short-term care policy or certificate that does not meet the minimum standards set forth in this section. The standards set forth in this section are minimum standards and do not preclude the inclusion of other provisions or benefits that are not inconsistent with these standards.

(a) Continuation.

(1) All group short-term care policies and certificates shall include a provision which allows the certificate holder to continue coverage or convert to an individual short-term care policy in the event of the cancellation, nonrenewal or termination of the group policy. Conversion is to be made without evidence of insurability and without pre-existing conditions limitations or waiting periods, with an effective date that coincides with the date coverage ceased under the group short-term care policy.

(2) Any insured individual whose eligibility for group short-term care coverage is based upon his or her relationship to another person shall be entitled to continue coverage under the group short-term care policy or convert to an individual short-term care policy upon termination of the relationship by death or dissolution of marriage. Conversion is to be made without evidence of insurability, without pre-existing conditions limitations or waiting periods, and with an effective date that coincides with the date coverage ceased under the group short-term care policy.

(3) If a group short-term care policy is replaced by another policy or contract issued to the same policyholder, the succeeding carrier shall offer coverage to all persons covered under the previous policy or contract on the date of its termination. Coverage shall be made available without evidence of insurability or pre-existing conditions limitations or waiting periods and with an effective date that coincides with the termination of coverage under the preceding policy.

(b) A group short-term care policy or certificate shall not deny a claim for loss that occurs or confinement that begins more than six (6) months after the effective date of the policy for a pre-existing condition. The group policy or certificate shall not define a pre-existing condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six (6) months immediately preceding the effective date of coverage.

(c) A group short-term care policy or certificate shall not indemnify against losses resulting from sickness on a different basis from losses resulting from accidents.

(d) Limitations and Exclusions. A group short-term care policy or certificate shall not include limitations or exclusions that are more restrictive than the following:

(1) PRE-EXISTING CONDITIONS LIMITATION - This policy or certificate does not pay benefits for a loss that occurs or confinement that begins within six (6) months after the effective date of the policy or certificate as a result of a pre-existing condition.

(2) OTHER EXCLUSIONS - This policy or certificate does not cover:

(A) Loss that is caused by declared or undeclared war or any act thereof;

(B) Loss that is caused by mental disease or disorder without demonstrable organic disease;

(C) Loss that is caused by suicide or any attempt thereof (while sane or insane), or intentionally self-inflicted injury;

(D) Confinement in a government institution unless a charge is made that the insured is obligated to pay;

(E) Confinement due to alcoholism or drug addiction;

(F) Confinement in a hospital;

(G) Confinement or care received outside of the United States;

(H) Loss that is caused by participation in a felony, riot or insurrection;

(I) Services for which benefits are payable under any state or federal workers’ compensation, employers liability or occupational disease law, or any motor vehicle no-fault law;

(J) Services provided by the insured’s immediate family, unless a benefit specifically states that a member of the insured’s immediate family can provide covered care;

(K) Services for which no charge is normally made in the absence of insurance;

(L) Medications, whether prescription or non-prescription; or

(M) Loss that occurs while this policy or certificate is not in force.

(3) A policy or certificate may provide that its benefits shall not duplicate benefits payable by Medicare or that would be payable by Medicare but for the application of a deductible or coinsurance amount.

(e) No group short-term care policy or certificate shall use waivers to exclude, limit or reduce coverage or benefits for specifically named or described pre-existing diseases or physical conditions.

(f) Group short-term care policies or certificates shall make reasonable provision for waiver of premium. As to benefits for institutional confinement, this requirement is met if the policy or certificate provides for a waiver of premium after benefits have been paid for a period not to exceed thirty (30) consecutive days inclusive of any elimination period, and thereafter during the continuance of the consecutive days for which benefits are paid.

(g) Group short-term care certificates, other than those issued pursuant to direct response solicitation, shall have a notice prominently printed on the first page of the certificate or attached thereto stating in substance that the certificate holder shall have the right to return the certificate to the insurer or its agent within thirty (30) days of its delivery and to have the premium refunded if, after examination of the certificate, the certificate holder is not satisfied for any reason. Group short-term care certificates issued pursuant to a direct response solicitation shall have a notice prominently printed on the first page or attached thereto stating in substance that the certificate holder shall have the right to return the certificate to the insurer within thirty (30) days of its delivery and to have the premium refunded if, after examination of the certificate, the certificate holder is not satisfied for any reason.

(h) Group short-term care policies or certificates shall not condition benefits upon prior hospitalization or institutionalization.

(i) Short-term care policies and certificates shall include a provision that states that upon notification to the insurer of an insured’s death, the insurer will refund on a pro-rata basis any part of a periodic premium paid by such insured that applies to the period after death.

(j) Short-term care policies and certificates shall not have an elimination period greater than thirty (30) days of confinement.

(k) Group short-term care policies and certificates shall include a provision that the policy shall be incontestable, except for nonpayment of premium, after it has been in force for two (2) years from its date of issue.

(l) Extension of Benefits. Termination of group short-term care insurance shall be without prejudice to any benefits payable for institutionalization if such institutionalization began while the group short-term care insurance was in force and continues without interruption after termination. Such extension of benefits beyond the period the group short-term care insurance was in force may be limited to the duration of the benefit period or to payment of the maximum benefits, and may be subject to any policy waiting period and all other applicable provisions of the policy or certificate.

(m) The premiums charged to an insured for group short-term care insurance shall not increase due solely to either the increasing age of the insured at ages beyond sixty-five (65) or the duration the insured has been covered under the policy.

(n) Payment of Benefits. A group short-term care policy or certificate that provides for the payment of benefits based on standards described as ‘‘usual and customary,’’ ‘‘reasonable and customary’’ or words of similar import shall include a definition of such terms and an explanation of such terms in its accompanying outline of coverage.

(o) A group short-term care policy or certificate that only provides benefits for confinement in the insured’s own home shall include a statement to that effect on the first page of the certificate in bold print.

(p) A group short-term care policy or certificate that provides benefits for home health care shall not limit or exclude such benefits by:

(1) Requiring that the insured receive skilled care in a skilled nursing facility rather than in the home, if home care services were not provided or available;

(2) Requiring that the insured first or simultaneously receive nursing or therapeutic services, or both, in a home, community or institutional setting before home health care services are covered;

(3) Limiting eligible services to services provided by registered nurses or licensed practical nurses;

(4) Requiring that a nurse or therapist provide services covered by the policy that can be provided by a home health aide or other home care worker acting within the scope of his or her licensure or certification;

(5) Excluding coverage for personal care services provided by a home health aide;

(6) Requiring that the provision of home health care services be at a level of certification or licensure greater than that required by the eligible service;

(7) Requiring that the insured have an acute condition before home health care services are covered;

(8) Limiting benefits to services provided by Medicare-certified agencies or providers; or

(9) Excluding coverage for adult day care, hospice care, skilled nursing care, or physical, occupational, respiratory or speech therapy.

(q) The application for every group short-term care certificate shall include a section inviting the applicant to give the name of an individual who is to receive notice of lapse concurrently with any such notice sent to the certificate holder. Along with space for the name and address of such individual, this section shall include a notice to the applicant as follows (or in substantially similar language): YOU WILL RECEIVE NOTICE IF YOUR COVERAGE IS ABOUT TO LAPSE (TERMINATE) BECAUSE YOU HAVE NOT PAID PREMIUMS. WE WILL BE GLAD TO SEND A COPY OF THIS NOTICE TO ANOTHER PERSON, IF YOU WOULD LIKE. THAT PERSON WILL NOT BE RESPONSIBLE FOR PAYMENT OF THE PREMIUM, AND YOU WILL ALWAYS RECEIVE YOUR OWN COPY OF THE NOTICE. IF YOU WANT AN EXTRA COPY SENT TO ANOTHER PERSON, PLEASE GIVE US THAT PERSON’S NAME AND ADDRESS.

(r) No group short-term care certificate shall contain a coordination of benefits provision unless such policy is issued on a non-contributory basis.

(Effective August 24, 2018)

Sec. 38a-528a-5. Prohibition against pre-existing conditions and probationary periods in replacement policies

Latest version.

If a group short-term care certificate replaces another group or individual short-term care or long-term care policy or certificate the replacing insurer shall waive any time periods applicable to pre-existing conditions and probationary periods in the new group short-term care certificate for similar benefits to the extent that similar exclusions have been satisfied under the original policy or certificate.

(Effective August 24, 2018)

Sec. 38a-528a-6. Required disclosure provisions

Latest version.

(a) Continuation. Group short-term care certificates shall contain a provision, appropriately captioned, which describes how the coverage may be continued or converted.

(b) Riders and Endorsements. Except for riders or endorsements by which the insurer effectuates a request made in writing by the insured or exercises a specifically reserved right under a group short-term care certificate, all riders or endorsements added to a group short-term care certificate after date of issue or at reinstatement or renewal shall require a signed acceptance by the insured. After date of certificate issue, any rider or endorsement that increases benefits or coverage with a concomitant increase in premium during the certificate term shall be agreed to in writing signed by the insured, except if the increased benefits or coverage is required by law. Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, such premium charge shall be set forth in the certificate, rider or endorsement.

(c) Limitations. If a group short-term care certificate contains any limitation with respect to pre-existing conditions, such limitation shall appear as a separate paragraph of the certificate and shall be labeled “PRE-EXISTING CONDITIONS LIMITATION.”

(d) Other Limitations or Conditions on Eligibility for Benefits. A group short-term care certificate shall set forth a description of any limitations or conditions for eligibility, including any required number of days of confinement, in a separate paragraph of the certificate and shall label such paragraph “Limitations or Conditions on Eligibility for Benefits.”

(Effective August 24, 2018)

Sec. 38a-528a-7. Prohibition against post claims underwriting

Latest version.

(a) All applications for group short-term care certificates except those that are guaranteed issue shall contain clear and unambiguous questions designed to ascertain the health condition of the applicant.

(b) If an application for group short-term care insurance contains a question that asks whether the applicant has had medication prescribed, it shall also ask the applicant to list the medication that has been prescribed. If the medications listed in such application were known by the insurer or should have been known at the time of application to be directly related to a medical condition for which coverage would otherwise be denied, then the certificate shall not be rescinded for that condition.

(1) The following language shall be set out conspicuously and in close conjunction with the applicant’s signature block on an application for group short-term care insurance:

Caution: If your answers on this application are incorrect or untrue, (insurer) has the right to deny benefits or rescind your coverage.

(2) The following language or language substantially similar to the following, shall be set out conspicuously on the group short-term care certificate at the time of delivery:

Caution: The issuance of this group short-term care insurance certificate is based upon your responses to the questions on your application. A copy of your application (is enclosed) (was retained by you when you applied). If your answers are incorrect or untrue, the insurer has the right to deny benefits or rescind your coverage. 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 insurer at this address: (Insert address).

(d) A copy of the completed application shall be delivered to the insured no later than at the time of delivery of the certificate unless it was retained by the applicant at the time of application.

(e) Every insurer selling or issuing group short-term care insurance coverage shall maintain a record of all certificate or subscriber agreement rescissions, both statewide and nationally, except those that the insured voluntarily effectuated.

(Effective August 24, 2018)

Sec. 38a-528a-8. Filing requirements

Latest version.

(a) All filings of rates and rating schedules shall be accompanied by an actuarial certification demonstrating that expected claims in relation to premiums comply with a loss ratio of not less than sixty percent (60%) when combined with actual experience to date. Filings of rate revisions shall also demonstrate that the anticipated loss ratio over the entire future period for which the revised rates are computed to provide coverage can be expected to meet the required loss ratio standard.

(b) Insurers shall submit with each group policy or certificate form that they file for approval a description of the method used to determine the standard for the payment of group policy or certificate benefits, including ‘‘usual and customary,’’ ‘‘reasonable and customary’’ or other standards.

(c) Every insurer providing group short-term care insurance in this state shall provide a copy of any group short-term care insurance advertisement intended for use in this state whether through written, radio or television medium to the Insurance Commissioner for review or approval to the extent this may be required in accordance with regulations adopted pursuant to Section 38a-819 of the Connecticut General Statutes. All such advertisements shall be retained as provided in Section 38a-819-18 of the Regulations of Connecticut State Agencies.

(Effective August 24, 2018)

Sec. 38a-528a-9. Standards for marketing

Latest version.

(a) Every insurer marketing group short-term care insurance coverage in this state, directly or through producers, shall:

(1) Establish marketing procedures to assure that any comparison of policies or certificates by its agents or other producers will be fair and accurate.

(2) Establish marketing procedures to assure excessive insurance is not sold or issued.

(3) Display prominently by type, stamp or other appropriate means on the first page of the outline of coverage and policy or certificate the following: “Notice to buyer: This policy or certificate may not cover all of the costs associated with short-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy or certificate limitations.”

(4) Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or insured for group short-term care insurance already has accident and sickness, group or individual short-term care or long-term care insurance and the types and amounts of any such insurance.

(5) Establish auditable procedures for verifying compliance with this subsection.

(6) Provide, at solicitation, written notice to the prospective certificate holder of the availability of any insurance counseling program that may be provided or approved by any state agency for this purpose, together with the name, address and telephone number of such program.

(b) In addition to the practices prohibited under Sections 38a-815 to 38a-830, inclusive, of the Connecticut General Statutes the following acts and practices are prohibited:

(1) Twisting. Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies, certificates or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on or convert any insurance policy or certificate or to take out a policy or certificate of insurance with another insurer.

(2) High pressure tactics. Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance.

(3) Cold lead advertising. Making use directly or indirectly of any method of marketing that fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by a producer or insurer.

(Effective August 24, 2018)

Sec. 38a-528a-10. Suitability of recommended purchase

Latest version.

(a) A producer who recommends the purchase or replacement of a group or individual short-term care policy or certificate shall have reasonable grounds for believing that the recommendation is suitable for the applicant upon the basis of the facts, if any, disclosed by the applicant concerning his or her health and financial circumstances.

(b) Before selling any group short-term care certificate, a producer shall make reasonable efforts to obtain information concerning the applicant’s health and financial circumstances.

(c) Before issuing any group short-term care certificate, a direct response insurer shall have reasonable grounds for believing that the purchase of such certificate, whether or not it involves the replacement of existing coverage, is suitable for the applicant upon the basis of the facts, if any, disclosed by the applicant concerning his or her health and financial circumstances.

(d) Every direct response insurer shall include questions on its applications for group short-term care insurance that are reasonably designed to obtain information concerning the applicant’s health and financial circumstances.

(Effective August 24, 2018)

Sec. 38a-528a-11. Non-forfeiture of benefits

Latest version.

An insurer may offer the option to purchase a certificate that provides a non-forfeiture benefit in the form of a return of premium, full benefits for a reduced benefit period, reduced benefits for the full benefit period, or another benefit that is acceptable to the Commissioner. A certificate that provides a non-forfeiture benefit shall include a schedule of this benefit.

(Effective August 24, 2018)

Sec. 38a-528a-12. Inflation protection

Latest version.

(a) An insurer shall offer the option to purchase a certificate that provides for meaningful periodic benefit level increases to account for reasonably anticipated increases in the costs of short-term care. Inflation protection includes:

(1) Increases in benefit levels annually in a manner so that the increases are compounded annually at a stated interest rate;

(2) The right to periodically increase benefit levels without providing evidence of insurability or health status so long as the option for the previous period has not been declined. The amount of the additional benefit shall be no less than the difference between the existing certificate benefit and that benefit compounded annually at a stated interest rate for the period beginning with the purchase of the existing benefit and extending until the year in which the offer is made; or

(3) A specified percentage of actual or reasonable charges, not including a maximum specified indemnity amount or limit.

(b) Insurers shall include the following information in or with the outline of coverage:

(1) A graphic comparison of the benefit levels of a certificate that increases benefits over the certificate period with a certificate that does not increase benefits. The graphic comparison shall show benefit levels over at least a twenty (20) year period.

(2) Any expected premium increases or additional premiums to pay for automatic or optional benefit increases. An insurer may use a reasonable graphic demonstration for the purposes of this disclosure.

(c) Inflation protection benefit increases under a certificate that contains such benefits shall continue without regard to an insured’s age, claim status or claim history, or the length of time the person has been insured under the certificate.

(d) Inflation protection that provides for automatic benefit increases shall be offered at a premium that the insurer expects to remain constant. Such offer shall disclose in a conspicuous manner the fact that the premium may change in the future unless the premium is guaranteed to remain constant.

(Effective August 24, 2018)

Sec. 38a-528a-13. Standard format outline of coverage

Latest version.

(a) No group short-term care certificate shall be delivered or issued for delivery to any resident of this state unless an appropriate outline of coverage, in the format prescribed in this section, is completed as to such certificate or subscriber agreement and is delivered to the applicant at the time application or solicitation is made, and acknowledgement of receipt or certification of delivery of such outline of coverage is provided to the insurer. In the case of direct response solicitations, the insurer shall deliver the outline of coverage upon the applicant’s request, but regardless of such request, shall make such delivery no later than at the time of policy or certificate delivery.

(b) The outline of coverage shall be a free standing document, using no smaller than twelve point type.

(d) Text that is capitalized or underscored in the standard format outline of coverage may be emphasized by other means that provide prominence equivalent to such capitalization or underscoring.

(e) Use of the text and sequence of text of the standard format outline of coverage is mandatory, unless otherwise specifically indicated.

(f) Format for outline of coverage:

(INSURER NAME)

(ADDRESS - CITY & STATE)

(TELEPHONE NUMBER)

GROUP SHORT-TERM CARE INSURANCE

OUTLINE OF COVERAGE

(Policy or Certificate Number)

(Except for certificates that are guaranteed issue, the following caution statement, or language substantially similar, shall appear as follows in the outline of coverage.)

Caution: The issuance of this group short-term care insurance certificate is based upon your responses to the questions on your application. A copy of your application (is enclosed) (was retained by you when you applied). If your answers are incorrect or untrue, the insurer has the right to deny benefits or rescind your coverage. 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 insurer at this address: (Insert address).

(1) This certificate that was delivered in Connecticut evidences coverage under a group policy of insurance.

(2) PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides a very brief description of the important features of your coverage. You should compare this outline of coverage to outlines of coverage for other policies or certificates available to you. This is not an insurance contract, but only a summary of coverage. Only the policy or certificate contains governing contractual provisions. This means that the policy and certificate set forth in detail the rights and obligations of both you and the insurer. Therefore, if you purchase this coverage, or any other coverage, it is important that you READ YOUR CERTIFICATE CAREFULLY!

(3) TERMS UNDER WHICH THE CERTIFICATE MAY BE RETURNED AND PREMIUM REFUNDED.

(A) (Provide a brief description of the right to return— "Free look" provision of the certificate.)

(B) (Include a statement that the policy or certificate contains provisions providing for a refund or partial refund of premium upon the death of an insured and does or does not contain provisions providing for such a refund upon surrender of the policy or certificate. Include a description of all such refund provisions.)

(4) THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are eligible for Medicare, review the “Guide to Health Insurance For People With Medicare” available from the insurer.

(A) (For producers) Neither (insert insurer name) nor its agents represent Medicare, the federal government or any state government.

(B) (For direct response) (insert insurer name) is not representing Medicare, the federal government or any state government.

(5) THIS IS NOT A LONG-TERM CARE POLICY OR CERTIFICATE . IT IS NOT TAX QUALIFIED AND DOES NOT PROVIDE ASSET PROTECTION.

(6) SHORT-TERM CARE COVERAGE. Policies or certificates 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 for a limited time.

This policy provides coverage in the form of a fixed dollar indemnity benefit for covered short-term care expenses, subject to policy (limitations) (waiting periods) and (coinsurance) requirements.

(Modify this paragraph if the policy is not an indemnity policy.)

(7) BENEFITS PROVIDED BY THIS (choose one: POLICY, or CERTIFICATE).

(A) (Covered services, related deductible(s), waiting periods, elimination periods and benefit maximums.)

(B) (Institutional benefits, by level of care provided.)

(An explanation of any qualifying criteria used to determine an insured’s eligibility for benefits shall accompany each benefit description. If an attending physician or other specified person must certify to a loss of functional capacity in order for the insured to be eligible for benefits, this shall be specified. If activities of daily living are used to determine an insured’s eligibility for benefits then these shall be explained.)

(8) LIMITATIONS AND EXCLUSIONS

Describe:

(A) Any pre-existing conditions provision;

(B) Non-eligible facilities or providers (e.g., unlicensed providers, care or treatment provided by a family member);

(D) Exclusions and exceptions; and

(E) Other limitations.

(This section should provide a brief specific description of any policy or certificate provisions that limit, exclude, restrict, reduce, delay or in any other manner operate to qualify payment of the benefits described in (7) above.)

THIS CERTIFICATE MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH YOUR SHORT TERM CARE NEEDS.

(9) RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs of short-term care services will likely increase over time, you should consider whether and how the benefits of this group short-term care policy may be adjusted. (As applicable, indicate the following:

(A) That the benefit level will not increase over time;

(B) Any automatic benefit adjustment provision;

(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, whether additional underwriting or health screening will be required, the frequency and amounts of the upgrade options and any significant restrictions or limitations; and

(E) Whether there will be any additional premium charge imposed, and describe how that is to be calculated.)

(10) TERMS UNDER WHICH THE CERTIFICATE MAY BE CONTINUED IN FORCE OR DISCONTINUED.

(A) (Describe certificate provisions for continuation of coverage);

(B) (Describe waiver of premium provisions, including whether the insured is entitled to a refund of unearned premium in the event of a waiver);

(C) (State whether or not the insurer has a right to change premium and, if such a right exists, describe clearly and concisely each circumstance under which premium may change.)

(11) ALZHEIMER’S DISEASE AND OTHER ORGANIC BRAIN DISORDERS (State that the certificate provides coverage for insureds clinically diagnosed as having Alzheimer’s disease or related degenerative and dementing illnesses. Specifically describe any qualifying criteria that determines such an insured’s eligibility for benefits.)

(12) PREMIUM

(A) “State the total annual premium for the certificate or subscriber agreement”;

(B) (If the premium varies with an applicant’s choice among benefit options, indicate the portion of annual premium that corresponds to each benefit option.)

(13) ADDITIONAL FEATURES

(A) “Indicate whether medical underwriting is used”;

(B) (Describe other important features of the certificate.)

(Effective August 24, 2018)

Sec. 38a-528a-14. Replacement

Latest version.

(a) Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant has another group or individual short-term care or long-term care policy or certificate in force or whether a group short-term care certificate is intended to replace any other group or individual accident and sickness policy or certificate, group or individual short-term care or long-term care policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and producer, except where the coverage is sold without a producer, containing such questions may be used.

(1) Do you have a group or individual long-term care or another group or individual short-term care insurance policy or certificate in force (including a health care service contract or health maintenance organization contract)?

(2) Did you have a group or individual long-term care or another group or individual short-term care insurance policy or certificate in force during the last twelve (12) months? If so, with which company? If that policy or certificate lapsed, when did it lapse?

(3) Are you covered by Medicaid?

(4) Do you intend to replace any of your medical or health insurance coverage with this insurance?

(b) Agents shall list any other health insurance policies they have sold to the applicant.

(1) List policies or certificates sold that are still in force.

(2) List policies or certificates sold in the past five (5) years that are no longer in force.

(c) Solicitations Other than Direct Response. Upon determining that a sale will involve replacement, an insurer, other than an insurer using direct response solicitation methods, or its agent shall furnish the applicant, prior to issuance or delivery of the group short-term care certificate, a notice regarding replacement of group or individual accident and sickness coverage or certificates or group or individual short-term care or long-term care coverage. One copy of such notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer. The required notice shall be provided in the following manner:

NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT AND SICKNESS, SHORT-TERM CARE OR LONG-TERM CARE INSURANCE

(Insurer's name and address)

SAVE THIS NOTICE!

IT MAY BE IMPORTANT TO YOU IN THE FUTURE.

According to (your application) (information you have furnished), you intend to lapse or otherwise terminate existing accident and sickness, short-term care or long-term care insurance and replace it with a group short-term care insurance policy evidenced by a certificate delivered herewith and issued by (insurer name) Insurance Company. Your new certificate provides thirty (30) days within which you may decide, without cost, whether you desire to keep the certificate. For your own information and protection you should be aware of and seriously consider certain factors that may affect the insurance protection available to you under the new certificate or subscriber agreement.

You should review this new coverage carefully, comparing it with all group or individual accident and sickness policies or certificates and group or individual short-term care or long-term care insurance coverage you now have, and terminate your present coverage only if, after due consideration, you find that purchase of this group short-term care certificate is a wise decision.

STATEMENT TO APPLICANT BY AGENT (PRODUCER OR OTHER REPRESENTATIVE)

(Use additional sheets, as necessary.)

I have reviewed your current medical or health insurance coverage. I believe the replacement of insurance involved in this transaction materially improves your position. My conclusion has taken into account the following considerations that I call to your attention:

(1) Health conditions that you may presently have (pre-existing conditions) may not be immediately or fully covered under the new certificate. This could result in denial or delay in payment of benefits under the new certificate, whereas a similar claim might have been payable under your present coverage.

(2) State law provides that your replacement coverage may not contain new pre-existing conditions or probationary periods. The insurer will waive any time periods applicable to pre-existing conditions or probationary periods in the new coverage for similar benefits to the extent such time was spent (depleted) under the original policy or certificate.

(3) If you are replacing existing group or individual short-term care or long-term care insurance coverage, you may wish to secure the advice of your present insurer or its agent regarding the proposed replacement of your present policy or certificate. This is not only your right, but it is also in your best interest to make sure you understand all the relevant factors involved in replacing your present coverage.

(4) If, after due consideration, you still wish to terminate your present coverage and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical health history. Failure to include all material medical information on an application may provide a basis for the insurer to deny any future claims and to refund your premium as though your certificate had never been in force. After the application has been completed and before you sign it, reread it carefully to be certain that all information has been properly recorded.

(Signature of Agent, Producer or Other Representative)

(Typed Name and Address of Agent, Producer or Other Representative)

The above “Notice to Applicant” was delivered to me on:

(Date) ______________

(Applicant’s Signature) ___________

(d) Direct Response Solicitations. Insurers using direct response solicitation methods shall deliver a notice regarding replacement of accident and sickness, short-term care or long-term care coverage to the applicant upon issuance of the certificate. The required notice shall be provided in the following manner:

NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT AND SICKNESS, SHORT-TERM CARE OR LONG-TERM CARE INSURANCE

(Insurer's name and address)

SAVE THIS NOTICE!

IT MAY BE IMPORTANT TO YOU IN THE FUTURE.

According to (your application) (information you have furnished), you intend to lapse or otherwise terminate existing accident and sickness, short-term care or long-term care insurance and replace it with the group short-term care insurance evidenced by a certificate delivered herewith issued by (insurer name) Insurance Company. Your new certificate provides thirty (30) days within which you may decide, without cost, whether you desire to keep the certificate. For your own information and protection, you should be aware of and seriously consider certain factors that may affect the insurance protection available to you under the new policy or certificate.

You should review this new coverage carefully, comparing it with all individual or group accident and sickness coverage and any individual or group short-term care or long-term care insurance coverage you now have, and terminate your present coverage only if, after due consideration, you find that purchase of this short-term care coverage is a wise decision.

(1) Health conditions that you may presently have (pre-existing conditions) may not be immediately or fully covered under the new certificate. This could result in denial or delay in payment of benefits under the new coverage, whereas a similar claim might have been payable under your present coverage.

(3) If you are replacing existing group or individual short-term care or long-term care insurance coverage, you may wish to secure the advice of your present insurer or its agent regarding the proposed replacement of your present policy, certificate, or subscriber agreement. This is not only your right but it is also in your best interest to make sure you understand all the relevant factors involved in replacing your present coverage.

(4) (To be included only if the application is attached to the certificate.) If, after due consideration, you still wish to terminate your present coverage and replace it with new coverage, read the copy of the application attached to your new certificate and be sure that all questions are answered fully and correctly. Omissions or misstatements in the application could cause an otherwise valid claim to be denied. Carefully check the application and write to (insurer name and address) within thirty (30) days of receiving the certificate if any information is not correct and complete, or if any past medical history has been left out of the application.

(Insurer Name)____________________________________________

(5) Where replacement is intended, the replacing insurer shall notify, in writing, the existing insurer of the proposed replacement. The existing policy shall be identified by the name of the existing insurer, name of the insured and policy number or address including zip code. Such notice shall be made not later than five (5) working days after the date the application is received by the insurer or the date the certificate is issued, whichever is sooner.

(Effective August 24, 2018)

Sec. 38a-528a-15. Reporting requirements

Latest version.

(a) Every insurer shall report annually by June 30 the number of certificates lapsed in the previous calendar year, the average total number of certificates in force during the preceding calendar year, and the resulting ratio.

(b) Every insurer shall report annually by June 30 the number of replacement certificates sold in the previous calendar year, the total number of certificates sold during the preceding calendar year, and the resulting ratio.

(c) Every insurer shall report annually by June 30 the number of replacement certificates sold in the previous calendar year, the average total number of certificates in force during the preceding calendar year, and the resulting ratio.

(d) Every insurer shall report annually by June 30 the number of rescissions of certificates, except those voluntarily effectuated by an insured, in the previous calendar year.

(e) For purposes of this section, “certificate” means certificate evidencing coverage under group short-term care policies and “report” means a report on a statewide and national basis.

(Effective August 24, 2018)

Sec. 38a-528a-16. Separability

Latest version.

If any provision of sections 38a-528a-1 to 38a-528a-16 of the Regulations of Connecticut State Agencies or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of said regulations and the application of such provision to other persons or circumstances shall not be affected thereby.

(Effective August 24, 2018)