Section 45-06-15-03 - Policy practices and provisions1. Guaranteed renewable for life - Limitation on preexisting conditions. Any short-term care insurance policy or group certificate must be guaranteed renewable for life. For purposes of this section, "guaranteed renewable for life" means the insured has the right to continue the policy or group certificate for life subject to the policy's terms by the timely payment of premiums during which the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force. The insurer may, however, in accordance with the provisions of the policy, make changes in premium rates as to all insureds who are placed in the same class for purposes of rate determination in the process of issuance of the policy or group certificate. A policy or certificate of insurance, providing benefits for short-term care, which is sold to a consumer to replace a policy may not contain any provision limiting payment of benefits due to preexisting conditions of the insured except if there is any time period remaining relating to the exclusion of coverage for preexisting conditions as specified in the underlying policy that the remaining waiting period for coverage of preexisting conditions shall apply to the new policy unless the policy otherwise provides.
2.Preexisting conditions.a. No short-term care insurance policy or group certificate may define "preexisting condition" as more restrictive than meaning a condition for which medical advice or treatment was recommended by, or received from a provider of health care services, within six months preceding the effective date of coverage of an insured person.b. No short-term care insurance policy or certificate issued on a group short-term care insurance policy may exclude coverage for a loss or confinement that is the result of a preexisting condition unless the loss or confinement begins within six months following the effective date of coverage of an insured person.c. The limitation on defining a preexisting condition does not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant, and, on the basis of the answers on that application, from underwriting in accordance with that insurer's established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in subdivision b expires. No short-term care insurance policy or certificate may exclude or use waivers or riders of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in subdivision b.3.Required information and disclosure provisions.a. Limitations. If a short-term nursing home insurance policy or group certificate contains any limitations with respect to preexisting conditions, the limitations shall appear as a separate paragraph of the policy or certificate and shall be labeled as "preexisting condition limitations".b. Other limitations or conditions on eligibility for benefits. A short-term nursing home insurance policy or group certificate containing any limitations or conditions for eligibility, including any elimination period shall be clearly defined in the policy or certificate and shall be labeled as "limitations or conditions on eligibility for benefits".c. Insurers shall disclose whether or not inflation protection is offered with any short-term nursing home policy or group certificate.d. An elimination period shall be calculated based upon consecutive calendar days, beginning the first day eligible services are received by the individual and ending the first day benefits are payable.4.Incontestability and rescission of short-term care insurance policy or certificate.a. If a policy or certificate has been in force for less than six months, an insurer may not rescind a short-term care insurance policy or certificate or deny an otherwise valid short-term care insurance claim except upon a showing of misrepresentation that is material to the acceptance for coverage.b. If a policy or certificate has been in force for at least six months but less than two years, an insurer may not rescind a short-term care insurance policy or certificate or deny an otherwise valid short-term care insurance claim except upon a showing of misrepresentation that is both material to the acceptance for coverage and that pertains to the condition for which benefits are sought.c. If a policy or certificate has been in force for two years, the policy or certificate may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health. The policy or certificate may not be contested based upon misrepresentation alone.d. A short-term care insurance policy or certificate may not be field-issued based on medical or health status. For purposes of this section, "field-issued" means a policy or certificate issued by an agent or a third-party administrator pursuant to the underwriting authority granted to the agent or third-party administrator by an insurer.e. If an insurer has paid benefits under the short-term care insurance policy or certificate, the benefit payments may not be recovered by the insurer in the event that the policy or certificate is rescinded.5.Prior institutionalization requirement prohibited.a. No short-term care insurance policy or certificate may be delivered or issued for delivery in this state if the policy: (1) Conditions eligibility for any benefits on a prior hospitalization requirement.(2) Conditions eligibility for benefits provided in an institutional care setting on the receipt of a higher level of such institutional care.b. A short-term care insurance policy containing postconfinement, postacute care, or recuperative benefits must clearly label in a separate paragraph of the policy or certificate entitled "limitations or conditions on eligibility for benefits" the limitations or conditions, including any required number of days of confinement.6.Right to return policy. Short-term care insurance applicants have the right to return the policy or certificate within thirty days of the date of its delivery or within thirty days of its effective date, whichever occurs later, and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Short-term care insurance policies and certificates must have a notice prominently printed on the first page or attached thereto stating in substance that the applicant has the right to return the policy or certificate within thirty days of the date of its delivery or within thirty days of its effective date, whichever occurs later, and to have the premium refunded if, after examination of the policy or certificate the applicant is not satisfied for any reason.7.Limitations and exclusions. A policy may not be delivered or issued for delivery in this state as short-term care insurance if the policy limits or excludes coverage by type of illness, treatment, medical condition, or accident, except as follows: a. Preexisting conditions or diseases;b. Mental or nervous disorders; however, this shall not permit exclusion or limitation of benefits on the basis of Alzheimer's disease;c. Alcoholism and drug addiction;d. Illness, treatment, or medical condition arising out of: (1) War or act of war, whether declared or undeclared;(2) Participation in a felony, riot, or insurrection;(3) Service in the armed forces or units auxiliary thereto;(4) Suicide (sane or insane), attempted suicide, or intentionally self-inflicted injury; or(5) Aviation (this exclusion applies only to non-fare-paying passengers).e. Treatment provided in a government facility, unless otherwise required by law, services for which benefits are available under medicare or other governmental program, except medicaid, any state or federal workers compensation, employer's liability or occupational disease law, or any motor vehicle no-fault law, services provided by a member of the covered person's immediate family, and services for which no charge is normally made in the absence of insurance. This subsection is not intended to prohibit exclusions limitations by type of provider or territorial limitations.
8.Extension of benefits. Termination of short-term care insurance shall be without prejudice to any benefits payable for institutionalization if the institutionalization began while the short-term care insurance was in force and continues without interruption after termination. The extension of benefits beyond the period the short-term care insurance was in force may be limited to the duration of the benefit period, if any, or to payment of the maximum benefits and may be subject to any policy waiting period, and all other applicable provisions of the policy.9.Continuation or conversion.a. Group short-term nursing home insurance issued in this state on or after the effective date of this administrative regulation shall provide: (1) A covered individual with a basis for continuation or conversion of coverage without underwriting upon termination of coverage; and(2) A converted policy or continued coverage, including benefits identical to or benefits determined by the executive director to be substantially similar to or in excess of those provided under the group policy from which conversion or continued coverage is made.b. Written application for the converted policy or continued coverage shall be made and the first premium due, if any, shall be paid as directed by the insurer not later than thirty-one days following notice of continuation or conversion rights under the group policy.c. The premium charged to an insured for short-term nursing home insurance shall not increase due to either: (1) The increasing age of the insured at ages beyond sixty-five; or(2) The duration the insured has been covered under the policy.10.Discontinuance and replacement. If a group short-term care policy is replaced by another group short-term care policy issued to the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the previous group policy on its date of termination. Coverage provided or offered to individuals by the insurer and premiums charged to persons under the new group policy: a. Shall not result in an exclusion for preexisting conditions that would have been covered under the group policy being replaced;b. Shall not vary or otherwise depend on the individual's health or disability status, claim experience, or use of short-term care services; and c The premium charged to an insured shall not increase due to either:
(1) The increasing age of the insured at ages beyond sixty-five; or(2) The duration the insured has been covered under the policy.N.D. Admin Code 45-06-15-03
Amended by Administrative Rules Supplement 2014-352, April 2014, effective April 1, 2014. .General Authority: NDCC 28-32-02
Law Implemented: NDCC 26.1-36-48