Section Ins 6205.03 - Minimum Standards for Benefits for All Disability Income Policies(a) A disability income policy shall provide a benefit for at least total disability. Disability income policies providing benefits only for partial, residual, catastrophic, or any disabilities less than total disability shall not be permitted. At the company's option, a disability income policy shall be permitted to provide coverage for disabilities in addition to a required benefit for total disability.(b) The benefits for total or partial disability income policies shall be permitted to be triggered by any of the following: (1) The insured is terminally ill with a life expectancy of 12 months or less, as certified by a physician; (2) The insured is unable to perform a specified number of ADLs. The insurance company shall not require the inability to perform more than two ADLs to trigger benefits;(3) The insured is cognitively impaired, suffering significant and irreversible deterioration or loss of intellectual capacity, as measured by clinical evidence and standardized tests commonly accepted for use in the medical community;(4) The insured is confined as an inpatient in a skilled nursing home or rehabilitation facility where a daily room and board charge is made;(5) The insured is receiving home health care or hospice care; or(6) The insured is a risk for transmitting a contagious disease, and the ability to perform the substantial and material duties of the insured's occupation is restricted by a state licensing board or by another appropriate government authority because of the risk of transmission of a contagious disease to others with whom the insured may be in contact. (c) For a contagious disease trigger, if all contagious diseases are not covered in a disability income policy, the policy shall specify which contagious diseases are covered. (d) The trigger for the start of any elimination period shall be the commencement of disability for the insured as defined in the policy.(e) A policy that is guaranteed renewable or conditionally renewable shall describe the conditions for renewability in the policy. For conditionally renewable policies, a company shall be permitted to decline to renew on the basis of class, geographic area, or for stated reasons other than the deterioration of the insured's health.(f) All policies shall contain a provision on earnings which identifies the various income sources or components that are considered earnings and those that are not. The provision on earnings shall exclude benefits such as formal sick pay plans, individual and group disability income insurance plans, and retirement plans.(g) In the calculation of pre-disability earnings: (1) Earnings just before disability began shall be permitted to be considered on a periodic basis so long as the periodic basis is consistent with the treatment of other terms referring to an insured's earnings used in the policy and used to arrive at certain disability policy benefit payment amounts for a claim;(2) For earnings of an insured which occurred in excess of one year but no more than 5 years just prior to the disability for which the claim is made, the provision shall include policy language which allows for use of the highest level of earnings during a calendar year or consecutive 12-month basis of an insured occurring during the period in excess of one year but no more than 5 years just prior to the disability for which claim is made; and(3) The company shall not consider earnings of an insured which occurred in excess of 5 years just prior to the disability for which claim is made in determining prior earnings.(h) A policy shall be permitted to exclude coverage due to sickness, treatment, or medical condition arising out of incarceration.(i) A policy shall be permitted to exclude disability that results from normal pregnancy or childbirth. Such limitation or exclusion shall not apply to complications of pregnancy as diagnosed by a physician.(j) A policy shall be permitted to contain a "return of premium" or "cash value benefit" so long as the return of premium or cash value benefit is not reduced by an amount greater than the aggregate of claims paid under the policy and the insurer demonstrates that the reserve basis for the policies is adequate.(k) A policy shall be permitted to contain a provision relating to recurrent disabilities, but a provision relating to recurrent disabilities shall not specify that a recurrent disability be separated by a period greater than 6 months, for a policy with a benefit period of 5 years or less, or up to one year, for a policy with a benefit period greater than 5 years.(l) If a policy provides for catastrophic disability: (1) Benefits shall: a. Pay a monthly periodic income benefit amount in addition to any other disability benefit amounts, and: 1. The minimum benefit shall be one year of monthly periodic income and shall exclude any time devoted to satisfaction of elimination periods; or2. Instead of a monthly periodic benefit, a single lump sum benefit of no less than $1,000 shall be permitted;b. Only be directly related to income losses of the insured on account of catastrophic disability due to injury or sickness; andc. Not directly or indirectly provide any coverage for long-term care services and shall contain a prominent disclosure of this fact;(2) Elimination periods for catastrophic disability coverage shall not be longer than one year if the insured meets the benefit triggers for 2 or more types of disability, one of which is catastrophic disability; and(3) Required benefit triggers include: a. Inability of the insured to perform, due to injury or sickness, a maximum of 2 ADLs; orb. The cognitive impairment of the insured; and(4) Other triggers shall be permitted, such as the loss of 2 arms or 2 legs, as long as they are described in the policy.(m) If a policy provides for concurrent disability, benefits shall be paid as if the concurrent disability was caused by one injury or one sickness. In no event shall an insured be considered to have more than one continuous period of disability at the same time.(n) If a policy provides for partial disability: (1) The benefit trigger shall be permitted to be described in terms of a reasonable reduction in the insured's time worked expressed as hours per week or otherwise due to disability as follows: a. In order to trigger benefits, an insured shall be working at least 20 percent but no more than 80 percent of the time worked just before a disability began;b. The benefit shall be permitted to be stated in terms of paying a stated percentage of the total disability periodic income benefit amount, and the stated percentage of the total disability periodic income benefit amount shall be no less than 20 percent and no greater than 80 percent;c. An insured working greater than 80 percent of time worked just before a disability began shall be permitted to be deemed ineligible for partial disability benefits; or d. An insured working less than 20 percent of time worked just before a disability began or earning less than 20 percent of prior earnings shall be considered working 0 percent or a 100 percent reduction in average prior earnings for the claim time period, subject to satisfaction of all policy terms and conditions by the insured; or (2) Alternatively, the benefit trigger shall be permitted to be described in terms of a reasonable reduction in the insured's earnings due to disability as follows: a. An insured shall be earning at least 20 percent but no more than 80 percent of prior earnings, and: 1. The benefit shall be permitted to be stated in terms of paying a stated percentage of the total disability periodic income benefit amounts, and the stated percentage of the total disability periodic income benefit amount shall be no less than 20 percent and no greater than 80 percent;2. If the reduction in earnings of an insured for a claim time period equals or exceeds 80 percent of average prior earnings, calculated for a comparable time period, then the insured's reduction of average prior earnings shall be considered a 100 percent reduction in average prior earnings for the claim time period subject to satisfaction of all policy terms and conditions by the insured; or 3. If the reduction in earnings of an insured for a claim time period is less than 20 percent of average prior earnings, calculated for a comparable time period, it shall be permitted to result in no benefits being paid; orb. The reduction in earnings of an insured shall be measured by comparing earnings for a claim time period to average prior earnings, calculated for a comparable time period, and: 1. The percentage of the total disability periodic income benefit amounts paid shall be calculated by subtracting current earnings for a claim time period from average prior earnings, calculated for a comparable period of time, and placing this difference as the numerator over average prior earnings, calculated for a comparable time period, as the denominator. This fraction shall be converted to a percentage, and the percentage multiplied by the total disability periodic income benefit amounts to arrive at the partial or residual disability benefit paid for a claim time period; or2. Alternatively, this shall be permitted to be expressed as a formula, such as the difference between prior earnings and current earnings divided by prior earnings, multiplied by the total disability periodic income benefit amounts; and(3) Partial or residual disability benefits shall be permitted to be predicated upon a qualification period during which the insured shall be totally disabled before partial or residual disability benefits are paid, and: a. The qualification period shall be permitted to be in lieu of the elimination period or in addition to the elimination period, but the combined elimination period and qualification period, if any, for partial or residual disability benefits shall not exceed that for total disability; andb. An insurer shall be permitted to require care by a physician other than the insured or a member of the insured's immediate family.(o) If a policy provides for both total disability benefits and partial disability benefits, only one elimination period shall be required.(p) If a policy provides for presumptive disability: (1) Benefits shall consist of any one of the following: a. Payment of additional monthly periodic income benefits or lump sum benefit amounts related to income losses of the insured, always additional to other disability benefits paid under the policy, subject to satisfaction of all policy terms and conditions by the insured;b. Waiver of any elimination period under the policy;c. Waiver of any requirement of care by a physician under the policy;d. Waiver of any time periods to access waiver of premium benefits under the policy; ore. Waiver of usual benefit triggers to access benefits for total disability, partial disability, or residual disability under the policy; and(2) A policy shall be permitted to provide more than one of the 5 benefits listed in (1) above based upon the presumptive disability of the insured, so long as the other benefits: a. Are in addition to all other disability benefits of the policy;b. Do not replace other disability benefits of the policy; andc. Are always more favorable to an insured than just providing other disability benefits under the policy.(q) If a policy provides benefits for which a beneficiary may be designated, the policy shall contain a beneficiary provision. The provision shall state that, unless the owner designates an irrevocable beneficiary, the right to change the beneficiary is reserved to the owner, and the consent of the beneficiary shall not be required to: (1) Terminate or assign the policy;(2) Change the beneficiary; or(3) Make any other changes in the policy.(r) If a cost of living index is included in a policy, the index shall be specified, and the company shall notify the insured in advance of any changes, such as discontinuance, substantial changes to the index, or a substitute index. If the index is temporarily delayed, the company shall be permitted to compute the value of any benefits due during the period the index is unavailable using any method that takes into consideration the most recently available information with respect to the index. Once the index becomes available, the company shall adjust any future benefits payable to reflect any benefit overpayments or underpayments made while the index was unavailable.(s) In all circumstances in which an insurer does not request information about an applicant's health history or medical treatment in the application process, the policy shall cover the loss consistent with RSA 415-A:5(I). A disability income protection policy or certificate shall be permitted to exclude coverage for a loss due to a preexisting condition for a period up to 24 months following the issuance of the policy or certificate, where the policy or certificate is issued on a guaranteed issue basis.(t) Termination of the policy or certificate shall be without prejudice to a continuous loss that commenced while the policy or certificate was in force, pursuant to Ins 6101. The continuous total disability of the insured shall be a condition for the extension of benefits beyond the period the policy was in force, limited to the earlier of either the duration of the benefit period, if any, or payment of the maximum benefits. N.H. Admin. Code § Ins 6205.03
Derived from Volume XLI Number 49, Filed December 9, 2021, Proposed by #13297, Effective 11/24/2021, Expires 11/24/2031