230 R.I. Code R. 230-RICR-20-35-1.34

Current through December 3, 2024

Section 230-RICR-20-35-1.34 - Rhode Island Long-Term Care Partnership Program

A. In order to provide for the offering and sale of policies (including certificates) under the Rhode Island State Long-term Care Insurance Partnership Program, in accordance with Section 1917(b)(1)(C) of the Social Security Act [ 42 U.S.C. 1396p(b)(1)(C), as amended by Pub. L. No. 109-171, Sec. 6021], and R.I. Gen. Laws § 40-8-22, the following provisions in § 1.34(B) of this Part shall apply:

B. A "qualified state long-term care partnership policy" or "partnership policy" must meet the following conditions:

1. The person insured under the policy is Rhode Island resident at the time the coverage becomes effective.

2. The policy is a qualified long-term care insurance policy as defined in Sec. 7702B(b) of the Internal Revenue Code of 1986, as amended. (26 U.S.C. 7702B(b)).

3. The policy provides the following inflation protection:

a. If the person insured has not attained the age of 61 as of the date of purchase, the policy provides:

(1) automatic annual compounded inflation increases at a rate not less than be no less favorable than three percent (3%) compound annual inflation protection; or

(2) automatic annual compounded inflation increases at a rate based on changes in the consumer price index. "Consumer price index" means consumer price index for all urban consumers, U.S. city average, all items, as determined by the Bureau of Labor Statistics of the United States Department of Labor; or

(3) annual compounded inflation increases at a rate not less than three percent which meets all of the following requirements:

(4) the benefit increases occur automatically, unless the insured specifically rejects an increase;

(5) the increases must be provided until the insured has at least attained age 76 and each increase up to and including the increase that takes effect at age 76 must not be rejected in order to retain partnership policy status - the insurer must notify the insured that rejection of an increase will cause the policy's partnership status to end;

(6) increases may end when the insured has attained age 76 or if the insured becomes eligible for benefits on or after age 76;

(7) the additional premium for each increase under this feature may be based on the premium rates that apply to the insured's attained age at the time of the increase; and rejection of an increase may not operate to prevent the insured from receiving future increases.

b. If the person insured has attained age 61 but has not attained age 76 as of the date of purchase, the policy provides some level of inflation protection

c. If the person insured has attained age 76 as of the date of purchase, the policy may, but is not required to, provide some level of inflation protection.

4. An issuer may offer the exchange of one policy for a qualified partnership policy, in accordance with the rules for exchange applicable to new services or providers contained in § 1.26 of this Part. In making an offer to exchange policies that were in effect prior to the effective date of the 2008 amendments to this Part, the issuer shall determine conditions of the offer in a uniform and nondiscriminatory manner. For purposes of applying the Medicaid rules relating to the Partnership program, the addition of a rider, endorsement, or change in schedule page for a policy may be treated as giving rise to an exchange." When the addition of a rider, endorsement, or change in the schedule page for a policy is used to give the coverage a new effective date to qualify for Partnership (and no other coverage changes are made), the policyholder shall not lose any benefits built up from the original effective date of the coverage.

C. Certification of Qualified Long-term Care Insurance Policies

1. In keeping with 42 U.S.C. § 1396p(b)(5)(B)(iii), the Director shall certify policies to be in compliance with §§ 1.34(A) and (B) of this Part. An issuer may apply for certification of a policy that has been previously approved, or it may request certification when the form is filed for approval.

a. The director's certification shall be based on certification on the form in Appendix H provided in a Bulletin issued for the purpose of designating the forms required to be used by this Part by an officer of the issuer that;

(1) The policy is designed and intended to be a qualified long-term care policy, as described in § 1.34(B)(2) of this Part, and

(2) The policy complies with all sections of this Part [Required for Partnership].

b. The Director may also consider such other information pertaining to the policy's certification, as he may deem appropriate.

c. The issuer shall notify the Director within ten (10) business days following any time that it should become aware that a certified policy shall have its status as a tax qualified long-term care policy challenged by the United States Department of the Treasury.

D. An insurer or its agent, soliciting or offering to sell a policy that is intended to qualify as a partnership policy, shall provide to each prospective applicant a Partnership Program Notice (Appendix I provided in a Bulletin issued for the purpose of designating the forms required to be used by this Part), outlining the requirements and benefits of a partnership policy. A similar notice may be used for this purpose if filed and approved by the commissioner. The Partnership Program Notice shall be provided with the required Outline of Coverage.

E. A partnership policy issued or issued for delivery in Rhode Island shall be accompanied by a Partnership Disclosure Notice (Appendix J provided in a Bulletin issued for the purpose of designating the forms required to be used by this Part) explaining the benefits associated with a partnership policy and indicating that at the time issued, the policy is a qualified state long-term care insurance partnership policy. A similar notice may be used if filed and approved by the commission. The Partnership Disclosure Notice shall also include a statement indicating that by purchasing this partnership policy, the insured does not automatically qualify for Medicaid.

230 R.I. Code R. 230-RICR-20-35-1.34

Adopted effective 5/26/2019