California 8-Hour LTC
Table of Contents
|
Chapter 1: Long-Term Care |
1 |
||||||||||
|
|
California 8-Hour LTC Introduction |
1 |
|
||||||||
|
|
Defining Long-Term Care 10231.2 |
1 |
|
||||||||
|
|
The Cost is High |
3 |
|
||||||||
|
|
Carve-In Legislation |
4 |
|
||||||||
|
|
Long-Term Care Insurance (LTCi) |
4 |
|
||||||||
|
|
Individuals Likely to Need LTC |
5 |
|
||||||||
|
|
Risk Factors Associated with Needing Long-Term Care |
5 |
|
||||||||
|
|
Gender/Age and Longevity Risk |
5 |
|
||||||||
|
|
Medical History/Lifestyle/Partner Status |
6 |
|
||||||||
|
|
Family and Friends as Caregivers/Financial Factors |
7 |
|
||||||||
|
|
Activities of Daily Living (ADL) |
8 |
|
||||||||
|
|
Bathing/Dressing/Transferring/Toileting/Continence |
8 |
|
||||||||
|
|
Eating |
9 |
|
||||||||
|
|
CA Insurance Code 10232.8 |
9 |
|
||||||||
|
|
Long-Term Care Services: Home and Community-Based Services |
13 |
|
||||||||
|
|
Family Members as Caregivers/Personal Care/Homemaker Services |
13 |
|
||||||||
|
|
Home Care Versus Home Health Care 10232.9 (a)(c) |
14 |
|
||||||||
|
|
Adult Day Care and Adult Medical Daycare/Hospice Services |
15 |
|
||||||||
|
|
Respite Care |
16 |
|
||||||||
|
|
Facilities Providing Care |
16 |
|
||||||||
|
|
Residential Care Facilities for the Elderly (RCFE) 10235.2(b) |
16 |
|
||||||||
|
|
Assisted Living |
17 |
|
||||||||
|
|
Public Programs |
18 |
|
||||||||
|
|
PACE/IHSS |
18 |
|
||||||||
|
|
MSSP |
19 |
|
||||||||
|
|
Appropriate Care Settings |
19 |
|
||||||||
|
|
Formal Care/Nursing Homes and State Licensed Facilities |
19 |
|
||||||||
|
|
Memory Care |
20 |
|
||||||||
|
|
Continuing Care Retirement communities and Life Care Communities |
21 |
|
||||||||
|
|
Continuing Care Contracts Bureau |
22 |
|
||||||||
|
|
Affiliated and Membership Living Arrangements |
22 |
|
||||||||
|
|
Fraternal Living/Independent Living Services |
22 |
|
||||||||
|
|
Union Sponsored/Fraternal, Religious, & Union Sponsored Living Arrangements |
23 |
|
||||||||
|
|
Locating Information on Services and Facilities for LTC |
23 |
|
||||||||
|
|
Geriatric Care Managers |
24 |
|
||||||||
|
|
Department of Veterans Affairs/ |
25 |
|
||||||||
|
|
California Veterans Affairs (CalVet) |
25 |
|
||||||||
|
|
Administration on Aging (AOA) |
26 |
|
||||||||
|
|
National Aging Network |
26 |
|
||||||||
|
|
CA Partnership for LTC |
26 |
|
||||||||
|
|
CA Health & Human Services |
26 |
|
||||||||
|
|
Cost of Long-Term Care |
26 |
|
||||||||
|
|
|
|
|
||||||||
|
|
Chapter 2: Financing Long-Term Care |
29 |
|
|||||||||
|
|
LTC Funding Mechanisms |
29 |
|
||||||||
|
|
Personal Savings |
29 |
|
||||||||
|
|
Home Equity/ HUD)/Reverse Mortgages |
30 |
|
||||||||
|
|
Home Equity Conversion Mortgages (HECM) |
31 |
|||||||||
|
|
Products Containing Long-Term Care Benefits |
32 |
|||||||||
|
|
Stand Alone Long-Term Care Policies |
32 |
|||||||||
|
|
Life Insurance and Annuities with Long-Term Care Benefits |
33 |
|||||||||
|
|
Accelerated Death Benefits |
33 |
|||||||||
|
|
Life Settlements |
34 |
|||||||||
|
|
Viatical Settlements/Catastrophic Benefits |
35 |
|||||||||
|
|
Traditional Medicare and Medicare Supplemental Policies |
37 |
|||||||||
|
|
When to Apply for Medi-Cal |
38 |
|||||||||
|
|
Medi-Cal Medical Property & Asset Limitations |
38 |
|||||||||
|
|
Medi-Cal Share of Cost |
39 |
|||||||||
|
|
Medi-Cal Eligibility |
40 |
|||||||||
|
|
Look Back Period |
41 |
|||||||||
|
|
Estate Recovery in California |
42 |
|||||||||
|
|
Exemptions or Waivers |
43 |
|||||||||
|
|
Original Medicare, Parts A and B |
43 |
|||||||||
|
|
Medicare Supplemental Policies/ Plans A Through N |
44 |
|||||||||
|
|
Original Medicare Versus Advantage Part C Plans |
44 |
|||||||||
|
|
Dual Eligible/ Medicare Advantage Plans, Medicare Part C |
45 |
|||||||||
|
|
Range of Supportive MA Services |
45 |
|||||||||
|
Chapter 3: Federal Legislation and Long-Term Care Insurance |
47 |
||||||||||
|
|
Tax Treatment of LTC Premiums and Expenses |
47 |
|||||||||
|
|
ATTACHMENT II: Tax Treatment of LTC Insurance & Expenses |
48 |
|||||||||
|
|
Introduction |
48 |
|||||||||
|
|
HIPPA Definitions and Requirements that Apply to LTC Expenses |
48 |
|||||||||
|
|
Qualified Long-Term Care Services/Chronically Ill Individuals |
48 |
|||||||||
|
|
Licensed Health Care Practitioner (LHP) |
49 |
|||||||||
|
|
90-Day Certification for Activities of Daily Living |
49 |
|||||||||
|
|
Substantial Assistance (Hands-on assistance/Stand-by assistance) |
49 |
|||||||||
|
|
Severe Cognitive Impairment and Substantial Supervision |
50 |
|||||||||
|
|
Benefits/Required Consumer Protection/IRS Reporting Mechanism |
50 |
|||||||||
|
|
Grandfathered Policies Sold Prior to 1997 |
50 |
|||||||||
|
|
Definition of “Material Change” |
51 |
|||||||||
|
|
New Trends: LTC Insurance, Life Insurance, Annuities, and Benefit Riders |
51 |
|||||||||
|
|
Conclusion |
52 |
|||||||||
|
|
Tax Qualified Versus Non-Tax Qualified |
53 |
|||||||||
|
|
Qualified LTC Expenses/Chronically Ill Individuals |
53 |
|||||||||
|
|
Licensed Health Care Practitioner |
53 |
|||||||||
|
|
90-Day Certification for Activities of Daily Living |
54 |
|||||||||
|
|
Substantial Assistance/Hands-on Assistance/Stand-by Assistance |
54 |
|||||||||
|
|
Severe Cognitive Impairment and Substantial Supervision (Notice 97-31) |
54 |
|||||||||
|
|
Advantages and Disadvantages of Non-Tax Qualified LTC Insurance |
55 |
|||||||||
|
|
Benefits/Required Consumer Protection/Health Savings |
56 |
|||||||||
|
|
Medicare Savings Accounts |
57 |
|||||||||
|
Chapter 4: Long-Term Care Insurance (LTCi) |
58 |
||||||||||
|
|
Types of LTC Products |
58 |
|||||||||
|
|
Stand-Alone Products 10232.1 |
58 |
|||||||||
|
|
Nursing Home and Residential Care Facility Only Policies |
59 |
|||||||||
|
|
Home Care Only Policies/Comprehensive Policies |
59 |
|||||||||
|
|
Products with Long-Term Care Riders |
59 |
|||||||||
|
|
Life Insurance – Linked Benefits |
59 |
|||||||||
|
|
Annuity Products with Long-Term Care Provisions/Disability Products |
60 |
|||||||||
|
|
Critical Illness Insurance/Accelerated Death Benefits |
62 |
|||||||||
|
|
Other Products as They Become Available |
64 |
|||||||||
|
|
Hybrid Products |
64 |
|||||||||
|
|
Annuity and Life Products with LTC |
64 |
|||||||||
|
|
Hybrids as They Become Available |
66 |
|||||||||
|
|
Group Coverage 10231.6 |
67 |
|||||||||
|
|
Employer-Sponsored Plans |
68 |
|||||||||
|
|
True Group and Multi-Life |
68 |
|||||||||
|
|
Trade/Association/Discretionary Sponsored Plans |
69 |
|||||||||
|
|
Group Policies Issued outside of CA 10232 |
70 |
|||||||||
|
|
Common Policy Benefits |
72 |
|||||||||
|
|
Coverage for Care in a Nursing Facility 10232.95 |
72 |
|||||||||
|
|
Coverage in a Residential Care Facility for the Elderly (RCFE) 10232.92 (a)-(d)) |
72 |
|||||||||
|
|
Coverage for Home and Community Care 10232.9 (a) through (c) |
73 |
|||||||||
|
|
Benefit Eligibility Triggers (Qualified and Non-Qualified) |
74 |
|||||||||
|
|
Tax-Qualified: Two Out of Six, or Cognitive Ability 10232.8(b) |
74 |
|||||||||
|
|
Home Care Benefits 10232.9(c) |
75 |
|||||||||
|
|
Licensed Health Care Practitioner & Chronically Ill Individual 10232.8© |
76 |
|||||||||
|
|
Non-TQ Benefit Triggers 10232.8(a) |
76 |
|||||||||
|
|
Flexible Benefit Mandated |
77 |
|||||||||
|
|
Policy Lifetime Maximum 10232.93 |
77 |
|||||||||
|
|
Prohibited Practices |
77 |
|||||||||
|
|
“Usual and Customary” 10233.2(d) |
77 |
|||||||||
|
|
Medical Necessity 10232.9 (c)(7) |
77 |
|||||||||
|
|
Prior Hospitalization 10232.5 |
78 |
|||||||||
|
|
Verifying Medical Necessity 10233 |
78 |
|||||||||
|
|
Contractual Methods of Payment |
78 |
|||||||||
|
|
Reimbursement |
78 |
|||||||||
|
|
Indemnity: Cash or Per Diem |
79 |
|||||||||
|
|
Disability Payment Method |
79 |
|||||||||
|
|
Provider Definitions 10232.9 |
79 |
|||||||||
|
|
Adult day care/Home health care/Homemaker services |
79 |
|||||||||
|
|
Hospice services/Personal care/Respite care |
80 |
|||||||||
|
|
Inflation Protection Benefits 10237 |
80 |
|||||||||
|
|
Inflation Protection Rejection Form 10237.5 |
82 |
|||||||||
|
|
Inflation Protection Information Contained in the OOC |
82 |
|||||||||
|
|
Waiver of Premium |
82 |
|||||||||
|
|
Benefit Period |
83 |
|||||||||
|
|
Home Modification 10233.2(f) |
83 |
|||||||||
|
|
Survivor Benefits |
83 |
|||||||||
|
|
Return of Premium |
84 |
|||||||||
|
|
Restoration of Benefits |
84 |
|||||||||
|
|
Nonforfeiture 10235.30 |
84 |
|||||||||
|
Chapter 5: California Statutory Policy Provisions, Requirements & Terminology |
86 |
||||||||||
|
|
Company Responsibilities and Prohibitions |
86 |
|||||||||
|
|
Application and Warning 10232.3 (a)(b) |
86 |
|||||||||
|
|
Use of and Application of Suitability Standards 10234.95(f) to (h) |
86 |
|||||||||
|
|
Application Checklist 10232.3 (c) |
87 |
|||||||||
|
|
Resolving Underwriting Issues 10232.(d) |
87 |
|||||||||
|
|
Preexisting Condition Definition 10232.4(a) |
87 |
|||||||||
|
|
Replacement Notice 10235.18(a)(1) |
87 |
|||||||||
|
|
Contestability Period 10232.3(f) |
88 |
|||||||||
|
Completed Application Delivery 10232.3(g) Unintentional Lapse Protection 10235.40 Inflation Protection Waiver and Illustration 10237.5 and 10237.6 Reporting Requirements |
88 88 89 90 |
||||||||||
|
|
Filing Rescissions 10232.3(h) and (i) |
90 |
|||||||||
|
|
Replacement Sales and Lapses 10234.86 |
90 |
|||||||||
|
|
Applicants Refusing to Disclose Information 10234.95(i) |
90 |
|||||||||
|
|
Personal Worksheet 10234.95 (c)(4) |
91 |
|||||||||
|
|
Commission Structure on Replacement Long-Term Care Policies 10234.97 (c) |
91 |
|||||||||
|
|
Reporting of all Agents 10234.93(a)(3) |
91 |
|||||||||
|
|
Filing Requirements |
92 |
|||||||||
|
|
Premium Rate Filings 10236.11 Required Policy Definitions 10235.2(a)(b) Medicare/Skilled Nursing Care/Intermediate Care/Home Health Care Consumer Protection |
92 92 92 92 |
|||||||||
|
|
Shortened Benefit Period 10235.30 |
92 |
|||||||||
|
|
Difference Between Group and Individual Coverage |
93 |
|||||||||
|
|
30-Day Free Look 10232.7 |
93 |
|||||||||
|
|
Right to Reduce Coverage 10235.50 |
94 |
|||||||||
|
|
Increasing LTC Coverage 10235.51 |
94 |
|||||||||
|
|
Right to Reduce, Add, or Purchase New Benefits 10235.52 |
95 |
|||||||||
|
|
Contingent Benefit Lapse 10235.35 |
95 |
|||||||||
|
|
Premium Increases 10236.13(e)(3) Right to Appeal Contract Language 10235.94 Unnecessary LTC Policy Replacement 10234.85 Agent Retention of Records 10508.5 |
96 96 96 97 |
|||||||||
|
|
Policy Replacement |
97 |
|||||||||
|
|
Premium Credits 10234.87 |
97 |
|||||||||
|
|
Replacement Coverage 10234.97 |
97 |
|||||||||
|
|
Replacement Policy Conversions 10236.5 |
98 |
|||||||||
|
|
Continuation coverage/Conversion coverage |
98 |
|||||||||
|
|
Exchanging Group Non-Tax Qualified for Group Tax Qualified 10232.2(d) |
99 |
|||||||||
|
|
Option to Increase Coverage |
99 |
|||||||||
|
|
Life Insurance with Accelerated Benefits Exempt 10237.3 Age, Claim Status and History Will Not Affect Inflation Protection 10237.4 Rejection Statement 10237.5(a)(b) 20-Year Graph on Inflation Protection and Expected Premium 10237.6 |
100 100 100 101 |
|||||||||
|
|
Other Optional Forms of Inflation Protection |
101 |
|||||||||
|
|
Simple Versus Compound Interest |
101 |
|||||||||
|
|
Future Purchase Option |
103 |
|||||||||
|
|
Consumer Price Index (CPI) |
103 |
|||||||||
|
|
Retaining Auditable Procedures for Compliance 10234.93(a)(7) |
103 |
|||||||||
|
|
Making Specimen Policies Available for Review 10234.93(a)(7) |
103 |
|||||||||
|
|
Additional Insurer Obligations 10232.65 |
103 |
|||||||||
|
|
Collected Premium Notification Within 60 days CA Dept of Insurance 8-Hour Mandatory LTC Course CA Life & Health Insurance Guarantee Association (CLHIGA) 1067.02 |
103 104 104 105 |
|||||||||
|
|
Agent Responsibilities and Prohibitions |
110 |
|||||||||
|
|
Duty of Honesty, Good Fair, and Fair Dealings 10234.8 |
110 |
|||||||||
|
|
LTC Agent Training 10234.93 |
110 |
|||||||||
|
|
Policy Suitability 10234.95 |
111 |
|||||||||
|
|
Personal Worksheet |
111 |
|||||||||
|
|
When Applicants Refuse to Provide Information 10234.95(h) |
112 |
|||||||||
|
|
Policy Replacement 10234.97 |
112 |
|||||||||
|
|
Notice Regarding Replacement 10235.16 |
113 |
|||||||||
|
|
Consumer Protection |
114 |
|||||||||
|
|
Statutory Rate Stabilization Requirements |
114 |
|||||||||
|
|
|
|
|||||||||
|
Chapter 6: Administration & Enforcement |
119 |
||||||||||
|
|
Actions and Penalties 10234 |
119 |
|||||||||
|
|
Applicable Laws & Penalties |
119 |
|||||||||
|
|
General Provisions- Code section 781 |
120 |
|||||||||
|
|
Unfair Practices Sections, CA Ins. Code sections 790-790.15 |
121 |
|||||||||
|
|
Medicare Supplement Insurance, CA Ins. Code sections 10192.1-10192.24 |
122 |
|||||||||
|
|
Other Relevant Insurance Code Sections |
122 |
|||||||||
|
|
Welfare and Institutions Code section 15610.30 |
123 |
|||||||||
|
|
Final Elder Abuse, CA Penal Code section 368(d) |
124 |
|||||||||
|
|
Burglary, CA Penal Code section 459 |
124 |
|||||||||
|
|
Forgery, CA Penal Code section 470 |
124 |
|||||||||
|
|
Grand Theft, CA Penal Code section 487 |
124 |
|||||||||
|
|
Computer Access Fraud, CA Penal Code section 502(c) |
125 |
|||||||||
|
|
Identity Theft, CA Penal Code section 530 |
126 |
|||||||||
|
|
Theft by False Pretenses, CA Penal Code section 532 |
126 |
|||||||||
|
|
Notice and Hearing CA Code section 10234.5 |
126 |
|||||||||
|
|
|
|
|||||||||
|
Chapter 7: Advertising Guidelines and Marketing Practices |
128 |
||||||||||
|
|
Advertising Guidelines |
128 |
|||||||||
|
|
Filing Advertisements 10234.9 |
129 |
|||||||||
|
|
Internet Advertising Section 1726 of the CIC |
129 |
|||||||||
|
|
Marketing Practices 10234.93 |
129 |
|||||||||
|
|
|
|
|||||||||
|
Chapter 8: California Partnership for Long-Term Care |
132 |
||||||||||
|
|
CA Dept of Insurance Eight-Hour Mandatory LTC Course |
132 |
|||||||||
|
|
CA Insurance Code Section 58056(a) |
134 |
|||||||||
|
|
RUReadyCA.org |
134 |
|||||||||
|
|
Help for Consumers |
134 |
|||||||||
|
|
Provisions Unique to Partnership Products |
135 |
|||||||||
United Insurance Educators, Inc.
PO Box 1030
Eatonville, WA 98328
(253) 846-1155
Email: mail@uiece.com