Loading
The Oregon Administrative Rules contain OARs filed through September 15, 2014
 
QUESTIONS ABOUT THE CONTENT OR MEANING OF THIS AGENCY'S RULES?
CLICK HERE TO ACCESS RULES COORDINATOR CONTACT INFORMATION

 

DEPARTMENT OF CONSUMER AND BUSINESS SERVICES,
INSURANCE DIVISION

 

DIVISION 52

INSURANCE POLICIES

Medicare Supplement Insurance

836-052-0103

Purpose

(1) OAR 836-052-0103 to 836-052-0194 are adopted in order to:

(a) Provide for the standardization of coverage and simplification of terms and benefits of Medicare supplement policies;

(b) Facilitate public understanding and comparison of such policies;

(c) Eliminate provisions contained in such policies that may be misleading or confusing in connection with the purchase of such policies or with the settlement of claims; and

(d) Provide for full disclosures in the sale of accident and sickness insurance coverage to persons eligible for Medicare.

(2) OAR 836-052-0138, 836-052-0145, and 836-052-0151 are amended pursuant to the authority of ORS 743.683, in order to carry out the legislative intent of:

(a) Extending the opportunity for open enrollment for Medicare supplement insurance under OAR 836-052-0138 to all persons who enroll in Medicare Part B, regardless of age; and

(b) Providing that for rating purposes the pool of persons qualifying for Medicare by reason of disability is combined with the pool of persons qualifying by reason of age, so that premiums will be affordable for persons qualifying by reason of disability.

Stat. Auth.: ORS 731.244 & ORS 743.680
Stats. Implemented: ORS 743.010 & ORS 743.683
Hist.: ID 1-1989(Temp), f. & cert. ef. 1-3-89; ID 5-1989, f. 6-30-89, cert. ef. 7-3-89; ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93; ID 9-1993, f. 9-28-93, cert. ef. 10-1-93; ID 5-1996, f. & cert. ef. 4-26-96

836-052-0107

Authority

OAR 836-052-0103 to 836-052-0194 are adopted pursuant to the general rulemaking authority of the Director under ORS 731.244 and the specific authority in ORS 742.009, 743.013, 743.680 to 743.689, and 746.240.

Stat. Auth.: ORS 731.244, ORS 743.010, ORS 743.013, ORS 743.680 - ORS 743.689 & ORS 746.240
Stats. Implemented: ORS 743.010(2) & ORS 743.683
Hist.: ID 1-1989(Temp), f. & cert. ef. 1-3-89; ID 5-1989, f. 6-30-89, cert. ef. 7-3-89; ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 9-1997, f. & cert. ef. 7-10-97

836-052-0114

Applicability and Scope

(1) Except as otherwise specifically provided in OAR 836-052-0134, 836-052-0140, 836-052-0145, 836-052-0160 and 836-052-0185, 836-052-0103 to 836-052-0194 apply to the following Medicare supplement policies and certificates issued under group Medicare supplement policies, as follows:

(a) All Medicare supplement policies delivered or issued for delivery in this state on or after July 1, 1992; and

(b) All certificates issued under group Medicare supplement policies and delivered or issued for delivery in this state on or after July 1, 1992.

(2) Except as otherwise specifically provided in OAR 836-052-0134, 836-052-0140, 836-052-0154, 836-052-0160, and 836-052-0185, on or after September 1, 1993, 836-052-0103 to 836-052-0194 apply to Medicare supplement policies and certificates issued under group Medicare supplement policies that are made subject to 836-052-0103 to 836-052-0194 because of amendments to the definition of "Medicare supplement policy" in ORS 743.680 and OAR 836-052-0119.

(3) A prepayment plan offered by a health maintenance organization under which the health maintenance organization and competitive medical plans provides Medicare services under the authority of Title XVIII Part C of the Social Security Act or Section 1876 of the federal Social Security Act (42 U.S.C. section 1395 et seq.) is not subject to OAR 836-052-0103 through 836-052-0194. The health maintenance organization and competitive medical plans must file with the Director, for information purposes, a copy of the Medicare contract forms and rates that the plan or health maintenance organization uses in this state, and the marketing and sales materials used therewith.

(4) OAR 836-052-0103 to 836-052-0194 do not apply to an issued policy under a demonstration project specified in 42 U.S.C. sec. 1395ss (g)(1).

(5) OAR 836-052-0103 to 836-052-0194 do not apply to a policy or contract of one or more employers or labor organizations; or of the trustees of a fund established by one or more employers or labor organizations, or combination thereof; for employees or former employees, or a combination thereof; or for members or former members, or a combination thereof, of the labor organizations.

(6) OAR 836-052-0103 to 836-052-0194 are effective on August 1, 2005. Insurers may continue using current forms, or may make changes to current forms if offering Plan K or L, as appropriate, through 2005. Insurers may offer any authorized plan upon approval by the Director of the Department of Consumer and Business Services.

(7) The changes to OAR 836-052-0145 and 836-052-0151 effective on February 17, 2011 apply to all new Medicare supplement policies or certificates issued on or after July 1, 2011. The changes to OAR 836-052-0145 and 836-052-0151 effective on February 17, 2011 apply to all existing 1990 Standardized Medicare supplement benefit plans and all 2010 Standardized Medicare supplement benefit plans policies or certificates renewed on or after January 1, 2012. The changes to the Exhibits to OAR 836-052-0160 effective on February 17, 2011 apply to all Medicare supplement policies or certificates issued on or after July 1, 2011.

Stat. Auth.: ORS 731.244 & 743.682
Stats. Implemented: ORS 743.010 & 743.683
Hist.: ID 1-1989(Temp), f. & cert. ef. 1-3-89; ID 5-1989, f. 6-30-89, cert. ef. 7-3-89; ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93; ID 9-1993, f. 9-28-93, cert. ef. 10-1-93; ID 5-1996, f. & cert. ef. 4-26-96; ID 9-1997, f. & cert. ef. 7-10-97; ID 10-2005, f. & cert. ef. 7-26-05; ID 7-2011, f. & cert. ef. 2-23-11; ID 15-2011, f. & cert. ef. 10-31-11

836-052-0119

Definitions

As used in OAR 836-052-0103 to 836-052-0194:

(1) "Applicant" means:

(a) In the case of an individual Medicare supplement policy, the person who seeks to contract for insurance benefits;

(b) In the case of a group Medicare supplement policy, the proposed certificate holder.

(2) "Bankruptcy" occurs when a Medicare Advantage organization that is not an issuer has filed, or has had filed against it, a petition for declaration of bankruptcy and has ceased doing business in the state.

(3) "Certificate" means any certificate delivered or issued for delivery under a group Medicare supplement policy.

(4) "Certificate Form" means the form on which the certificate is delivered or issued for delivery by the issuer.

(5) "Continuous period of creditable coverage" means the period during which an individual was covered by creditable coverage, if during the period of the coverage the individual had no break in coverage greater than 63 days.

(6)(a) "Creditable coverage" means, with respect to an individual, coverage of the individual provided under any of the following:

(A) A group health plan;

(B) Health insurance coverage;

(C) Part A or Part B of Title XVIII of the Social Security Act (Medicare);

(D) Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits under section 1928;

(E) Chapter 55 of Title 10 United States Code (CHAMPUS);

(F) A medical care program of the Indian Health Service or of a tribal organization;

(G) A state health benefits risk pool;

(H) A health plan offered under chapter 89 of Title 5 United States Code (Federal Employees Health Benefits Program);

(I) A public health plan as defined in federal regulation; and

(J) A health benefit plan under Section 5(e) of the Peace Corps Act (22 United States Code 2504(e)).

(b) "Creditable coverage" does not include one or more, or any combination of the following:

(A) Coverage only for accident or disability income insurance, or any combination thereof;

(B) Coverage issued as a supplement to liability insurance;

(C) Liability insurance, including general liability insurance and automobile liability insurance;

(D) Workers' compensation or similar insurance;

(E) Automobile medical payment insurance;

(F) Credit-only insurance;

(G) Coverage for on-site medical clinics; and

(H) Other similar insurance coverage, specified in federal regulations, under which benefits for medical care are secondary or incidental to other medical benefits.

(c) "Creditable coverage" does not include the following benefits if they are provided under a separate policy, certificate or contact of insurance or are otherwise not an integral part of the plan:

(A) Limited scope dental or vision benefits;

(B) Benefits for long-term care, nursing home care, home health care, community based care, or any combination thereof; and

(C) Such other similar, limited benefits as are specified in federal regulations.

(d) "Creditable coverage" does not include the following benefits if offered as independent noncoordinated benefits:

(A) Coverage only for a specified disease or illness; and

(B) Hospital indemnity or other fixed indemnity insurance.

(e) "Creditable coverage" shall not include the following if it is offered as a separate policy, certificate or contract of insurance:

(A) Medicare supplemental health insurance as defined under section 1882(g)(1) of the Social Security Act;

(B) Coverage supplemental to the coverage provided under chapter 55 of title 10, United States Code; and

(C) Similar supplemental coverage provided to coverage under a group health plan.

(7) "Employee welfare benefit plan" means a plan, fund or program of employee benefits as defined in 29 U.S.C. Section 1002 (Employee Retirement Income Security Act).

(8) "Insolvency" means when an issuer, licensed to transact the business of insurance in this state, has had a final order of liquidation entered against it with a finding of insolvency by a court of competent jurisdiction in the issuer's state of domicile.

(9) "Insurance Policy" includes a subscriber contract or a prepayment contract of a health care service contractor and a policy or contract of a fraternal benefit society.

(10) "Issuer" includes insurers, fraternal benefit societies, health care service plans, health maintenance organizations as that term is defined in ORS 750.005, health care service contractors as that term is defined in 750.005, and any other entity delivering or issuing for delivery in this state Medicare supplement policies or certificates.

(11) "Medicare" means the "Health Insurance for the Aged Act," Title XVIII of the Social Security Amendments of 1965, as then constituted or later amended.

(12) Medicare Advantage plan" means a plan of coverage for health benefits under Medicare Part C as defined in 42 U.S.C.1395w-28(b)(1), and includes:

(a) Coordinated care plans that provide health care services, including but not limited to health maintenance organization plans (with or without a point-of-service option), plans offered by provider-sponsored organizations, and preferred provider organization plans;

(b) Medical savings account plans coupled with a contribution into a Medicare Advantage medical savings account; and

(c) Medicare Advantage private fee-for-service plans.

(13) "Medicare Supplement Policy" means a group or individual insurance policy or a subscriber contract, other than a policy issued pursuant to a contract under Section 1876 of the federal Social Security Act (42 U.S.C. section 1395 et seq.) or an issued policy under a demonstration project specified in 42 U.S.C. section 1395ss(g)(1) that is advertised, marketed or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical or surgical expenses of persons eligible for Medicare. "Medicare Supplement policy" does not include Medicare Advantage plans established under Medicare Part C, Outpatient Prescription Drug plans established under Medicare Part D or any Health Care Prepayment Plan (HCPP) that provides benefits pursuant to an agreement under sec. 1833(a)(1)(A) of the Social Security Act.

(14) "Policy Form" means the form on which the policy is delivered or issued for delivery by the issuer.

(15) “Pre-Standardized Medicare supplement benefit plan,” means a group or individual policy of Medicare supplement insurance issued prior to July 1, 1992.

(16) "Secretary" means the Secretary of the United States Department of Health and Human Services.

(17) “1990 Standardized Medicare supplement benefit plan,” means a group or individual policy of Medicare supplement insurance issued on or after July 1, 1992 and with an effective date of coverage prior to June 1, 2010 and includes Medicare supplement insurance policies and certificates renewed on or after that date that are not replaced by the issuer at the request of the insured.

(18) “2010 Standardized Medicare supplement benefit plan,” means a group or individual policy of Medicare supplement insurance issued with an effective date of coverage on or after June 1, 2010.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 731.244 & 743.682
Stats. Implemented: ORS 743.010 & 743.683
Hist.: ID 1-1989(Temp), f. & cert. ef. 1-3-89; ID 5-1989, f. 6-30-89, cert. ef. 7-3-89; ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93; ID 9-1993, f. 9-28-93, cert. ef. 10-1-93; ID 5-1996, f. & cert. ef. 4-26-96; ID 21-1998(Temp), f. 12-8-98, cert. ef. 1-1-99 thru 6-25-99; ID 4-1999, f. & cert. ef. 4-29-99; ID 6-2001, f. & cert. ef. 5-22-01; ID 10-2005, f. & cert. ef. 7-26-05; ID 3-2009, f. 6-30-09, cert. ef. 7-1-09

836-052-0124

Policy Definitions and Terms

A policy or certificate may not be advertised, solicited or issued for delivering in this state as a Medicare supplement policy or certificate unless the policy or certificate contains definitions or terms that conform to the following requirements:

(1) "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. The following provisions also apply to definition of the terms under this section:

(a) 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 person 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";

(b) The definition may provide that injuries shall not include injuries for which benefits are provided or available under any worker's compensation, employer's liability or similar law or motor vehicle no-fault plan, unless prohibited by law.

(2) "Benefit period" or "Medicare benefit period" shall not be defined more restrictively than as defined in the Medicare program.

(3) "Convalescent nursing home," "extended care facility" or "skilled nursing facility" shall not be defined more restrictively than as defined in the Medicare program.

(4) "Health care expenses" means, for OAR 836-052-0145, expenses of health maintenance organizations associated with the delivery of health care services which expenses are analogous to incurred losses of insurers.

(5) "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 but not more restrictively than as defined in the Medicare program.

(6) "Medicare" shall be defined in the policy and certificate. "Medicare" may be substantially 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.

(7) "Medicare eligible expenses" shall mean expenses of the kinds covered by Medicare Parts A and B, to the extent recognized as reasonable and medically necessary by Medicare.

(8) "Physician" shall not be defined more restrictively than as defined in the Medicare program.

(9) "Sickness" shall not be defined to be more restrictive than the following: "Sickness means illness or disease of an insured person that manifests itself after the effective date of insurance and while the insurance is in force." The definition may be further modified to exclude sicknesses or diseases for which benefits are provided under any worker's compensation, occupational disease, employer's liability or similar law.

Stat. Auth.: ORS 743.683
Stats. Implemented: ORS 743.010 & 743.683
Hist.: ID 1-1989(Temp), f. & cert. ef. 1-3-89; ID 5-1989, f. 6-30-89, cert. ef. 7-3-89; ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93; ID 9-1993, f. 9-28-93, cert. ef. 10-1-93; ID 5-1996, f. & cert. ef. 4-26-96; ID 9-1997, f. & cert. ef. 7-10-97; ID 10-2005, f. & cert. ef. 7-26-05

836-052-0129

Policy Provisions

(1) Except for permitted preexisting condition clauses as described in OAR 836-052-0133(2)(a), 836-052-0134(2)(a) and 836-052-0132(1)(a), no policy or certificate may be advertised, solicited or issued for delivery in this state as a Medicare supplement policy if the policy or certificate contains limitations or exclusions on coverage that are more restrictive than those of Medicare.

(2) No Medicare supplement policy or certificate may use waivers to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions.

(3) No Medicare supplement policy or certificate in force in the state shall contain benefits that duplicate benefits provided by Medicare.

(4)(a) Subject to OAR 836-052-0133(2)(d) and (e), 836-052-0134(2)(d), (e) and (g) and 836-052-0133(1)(d) and (e), a Medicare supplement policy with benefits for outpatient prescription drugs in existence prior to January 1, 2006 may be renewed for current policyholders who do not enroll in Part D at the option of the policyholder.

(b) A Medicare supplement policy with benefits for outpatient prescription drugs may not be issued after December 31, 2005.

(c) After December 31, 2005, a Medicare supplement policy with benefits for outpatient prescription drugs may not be renewed after the policyholder enrolls in Medicare Part D unless:

(A) The policy is modified to eliminate outpatient prescription coverage for expenses of outpatient prescription drugs incurred after the effective date of the individual's coverage under a Part D plan; and

(B) Premiums are adjusted to reflect the elimination of outpatient prescription drug coverage at the time of Medicare Part D enrollment, accounting for any claims paid, if applicable.

Stat. Auth.: ORS 743.683
Stats. Implemented: ORS 743.010 & 743.683
Hist.: ID 1-1989(Temp), f. & cert. ef. 1-3-89; ID 5-1989, f. 6-30-89, cert. ef. 7-3-89; ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1996, f. & cert. ef. 4-26-96; ID 10-2005, f. & cert. ef. 7-26-05; ID 3-2009, f. 6-30-09, cert. ef. 7-1-09

836-052-0132

Benefit Standards for 2010 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery with an Effective Date of Coverage on or After June 1, 2010

The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state with an effective date of coverage on or after June 1, 2010. A policy or certificate may not be advertised, solicited, delivered, or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with or exceeds the benefit standards set forth in this rule. No issuer may offer a 1990 Standardized Medicare supplement benefit plan for sale on or after June 1, 2010. Benefit standards applicable to Medicare supplement policies and certificates issued with an effective date of coverage before June 1, 2010 remain subject to the requirements of OAR 836-052-0133, 836-052-0134 and 836-052-0136.

(1) The following standards apply to Medicare supplement policies and certificates and are in addition to all other requirements of OAR 836-052-0103 to 836-052-0194:

(a) Regarding preexisting conditions, a Medicare supplement policy or certificate shall not:

(A) Exclude or limit benefits for loss incurred more than six months after the effective date of coverage because the loss involved a preexisting condition; or

(B) Define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.

(b) A Medicare supplement policy or certificate shall not cover losses resulting from sickness on a different basis than losses resulting from accidents.

(c) A Medicare supplement policy or certificate shall provide that benefits designed to cover cost sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, copayment, or coinsurance amounts. Premiums may be modified to correspond with such changes.

(d) A Medicare supplement policy or certificate shall not provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium.

(e) Each Medicare supplement policy shall be guaranteed renewable. In addition:

(A) The insurer shall not cancel or nonrenew the policy solely on the ground of health status of the individual.

(B) The insurer shall not cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation.

(C) If the Medicare supplement policy is terminated by the group policyholder and is not replaced as provided under paragraph (E) of this subsection, the issuer shall offer certificate holders an individual Medicare supplement policy that, at the option of the certificate holder:

(i) Provides for continuation of the benefits contained in the group policy; or

(ii) Provides for benefits that otherwise meet the requirements of this subsection.

(D) If an individual is a certificate holder in a group Medicare supplement policy and the individual terminates membership in the group, the issuer shall:

(i) Offer the certificate holder the conversion opportunity described in paragraph (e)(C) of this subsection; or

(ii) At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.

(E) If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.

(f) Termination of a Medicare supplement policy or certificate shall be without prejudice to any continuous loss which commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be conditioned upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits. Receipt of Medicare Part D benefits will not be considered in determining a continuous loss.

(g)(A) A Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificate holder for the period, not to exceed 24 months, in which the policyholder or certificate holder has applied for and is determined to be entitled to medical assistance under Title XIX of the Social Security Act, but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to the assistance.

(B) If suspension occurs and if the insured loses entitlement to medical assistance, the policy or certificate shall be automatically reinstituted, effective as of the date of termination of entitlement, as of the termination of entitlement if the insured provides notice of loss of entitlement within 90 days after the date of loss and pays the premium attributable to the period, effective as of the date of termination of entitlement.

(C) Each Medicare supplement policy shall provide that benefits and premiums under the policy shall be suspended for any period that may be provided by federal regulation at the request of the policyholder if the policyholder is entitled to benefits under Section 226 (b) of the Social Security Act and is covered under a group health plan as defined in Section 1862 (b)(1)(A)(v) of the Social Security Act. If suspension occurs and if the policyholder or certificate holder loses coverage under the group health plan, the policy shall be automatically reinstituted effective as of the date of loss of coverage if the policyholder provides notice of loss of coverage within 90 days after the date of the loss.

(D) Reinstitution of coverages as described in paragraphs (B) and (C):

(i) Shall not provide for any waiting period with respect to treatment of preexisting conditions;

(ii) Shall provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of the suspension; and

(iii) Shall provide for classification of premiums on terms at least as favorable to the insured as the premium classification terms that would have applied to the insured had the coverage not been suspended.

(2) This section establishes standards for basic or core benefits common to Medicare Supplement Insurance Benefit Plans A, B, C, D, F, F with High Deductible, G, M and N. Each issuer of Medicare supplement insurance benefit plans shall make available each prospective insured a policy or certificate including only the basic core package of benefits established in this section. An issuer may make available to prospective insureds any of the other Medicare supplement insurance benefit plans in addition to the basic core package, but not in lieu of it. The basic core package includes the following:

(a) Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;

(b) Coverage of Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used;

(c) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider must accept the issuer’s payment as payment in full and may not bill the insured for any balance. Billing the insured for any such balance is an unfair practice in the transaction of insurance that is injurious to the insurance-buying public, and is a violation of ORS 746.240.

(d) Coverage under Medicare Parts A and B for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations;

(e) Coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, of Medicare eligible expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible;

(f) Coverage of cost sharing for all Part A Medicare eligible hospice care and respite care expenses.

(3) This section establishes standards for additional benefits. The following additional benefits shall be included in Medicare supplement benefit Plans B, C, D, F, F with High Deductible, G, M, and N as provided by OAR 836-052-0141.

(a) Medicare Part A deductible benefit, providing coverage for 100 percent of the Medicare Part A inpatient hospital deductible amount per benefit period.

(b) Medicare Part A deductible benefit, providing coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period.

(c) Skilled Nursing Facility Care benefit, providing coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A.

(d) Medicare Part B Deductible benefit, providing coverage for 100 percent of the Medicare Part B deductible amount per calendar year regardless of hospital confinement.

(e) 100 percent of the Medicare Part B Excess Charges benefit, providing coverage for 100 percent of the difference between the actual Medicare Part B charges as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge.

(f) Medically Necessary Emergency Care in a Foreign Country, providing coverage to the extent not covered by Medicare for 80 percent of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician and medical care received in a foreign country, when the care would have been covered by Medicare if provided in the United States and when the care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of $250, and a lifetime maximum benefit of $50,000. For purposes of this benefit, “emergency care” means care needed immediately because of an injury or an illness of sudden and unexpected onset.

Stat. Auth.: ORS 743.683
Stats. Implemented: ORS 743.010 & 743.683
Hist.: ID 3-2009, f. 6-30-09, cert. ef. 7-1-09

836-052-0133

Benefit Standards for 1990 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery on or After July 1, 1992 and with an Effective Date of Coverage Prior to June 1, 2010

(1) The following standards in this rule are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state on or after July 1, 1992 and with an effective date of coverage prior to June 1, 2010. A policy or certificate may not be advertised, solicited, delivered or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with or exceeds the benefit standards set forth in this rule.

(2) The following standards apply to Medicare supplement policies and certificates and are in addition to all other requirements of OAR 836-052-0103 to 836-052-0194.

(a) Regarding preexisting conditions, a Medicare supplement policy or certificate shall not:

(A) Exclude or limit benefits for a loss incurred more than six months after the effective date of coverage because the loss involved a preexisting condition. The benefits shall be available after the period of exclusion or limitation permitted under this subsection whether or not a claim concerning the condition was made during the period and whether or not a physician gave medical advice or recommended or gave treatment concerning the condition during the period;

(B) Define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.

(b) A Medicare supplement policy or certificate shall not cover losses resulting from sickness on a different basis than losses resulting from accidents;

(c) A Medicare supplement policy or certificate shall provide that benefits designed to cover cost sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, copayment or coinsurance amounts and copayment percentage factors. Premiums may be modified to correspond with such changes. An insurer must justify any premium modification actuarially and must obtain approval from the Director before implementing the modification;

(d) A Medicare supplement policy or certificate shall not provide for termination of coverage of a spouse because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium;

(e) Each Medicare supplement policy shall be guaranteed renewable for the life of the individual in the case of an individual policy and the life of the group in the case of a group policy. In addition:

(A) The insurer shall not cancel or nonrenew the policy on the ground of the health status of the individual;

(B) The insurer shall not cancel or nonrenew the policy for any reason other than nonpayment of premium or a material misrepresentation that is discovered within two years after the effective date of coverage;

(C) If the Medicare supplement policy is terminated by the group policyholder and is not replaced as provided under paragraph (E) of this subsection, the issuer shall offer certificate holders an individual Medicare supplement policy at standard rates and without any waiver, limitation or exclusion, that at the option of the certificate holder:

(i) Provides for continuation of the benefits contained in the group policy; or

(ii) Provides for benefits that otherwise meet the requirements of this section.

(D) If an individual is a certificate holder in a group Medicare supplement policy and the individual terminates membership in the group, the issuer shall:

(i) Offer the certificate holder the conversion opportunity described in paragraph (C) of this subsection; or

(ii) At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.

(E) If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy, whether the same or a different issuer, shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced;

(F) This subsection does not prohibit rate increases otherwise authorized by law.

(G) If a Medicare supplement policy eliminates an outpatient prescription drug benefit as a result of requirements imposed by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the modified policy shall be deemed to satisfy the guaranteed renewal requirements of this section.

(f) Termination of a Medicare supplement policy or certificate shall be without prejudice to any continuous loss that commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be conditioned upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or to payment of the maximum benefits. Receipt of Medicare Part D benefits will not be considered in determining a continuous loss.

(g)(A) A Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificate holder for the period, not to exceed 24 months, in which the policyholder or certificate holder has applied for and is determined to be entitled to medical assistance under Title XIX of the Social Security Act, but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date the policyholder or certificate holder becomes entitled to the assistance.

(B) If the suspension occurs and if the insured loses entitlement to the medical assistance, the policy or certificate shall be automatically reinstituted, effective as of the date of termination of such entitlement, if the insured provides notice of loss of the entitlement within 90 days after the date of the loss and pays the premium attributable to the period;

(C) Each Medicare supplement policy shall provide that benefits and premiums under the policy shall be suspended for the period provided by federal regulation at the request of the policyholder if the policyholder is entitled to benefits under section 226(b) of the Social Security Act and is covered under a group health plan as defined in section 1862(b)(1)(A)(v) of the Social Security Act. If the suspension occurs and if the policyholder or certificate holder loses coverage under the group health plan the policy shall be automatically reinstituted effective as of the date of loss of coverage if the policyholder provides notice of loss of coverage within 90 days after the date of such loss and pays the premium attributable to the period, effective as of the date of termination of entitlement.

(D) Reinstitution of the coverage:

(i) Shall not provide for any waiting period with respect to treatment of preexisting conditions;

(ii) Shall provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of such suspension. If the suspended Medicare supplement policy provided coverage for outpatient prescription drugs, reinstitution of the policy for Medicare Part D enrollees shall be without coverage for outpatient prescription drugs and shall otherwise provide substantially equivalent coverage to the coverage in effect before the date of suspension; and

(iii) Shall provide for classification of premiums on terms at least as favorable to the insured as the premium classification terms that would have applied to the insured had the coverage not been suspended.

(h) If an issuer makes a written offer to the Medicare supplement policyholders or certificate holders of one or more of its plans, to exchange during a specified period from the holder’s 1990 Standardized plan as described in OAR 836-052-0136 to a 2010 Standardized plan as described in 836-052-0141, the offer and subsequent exchange shall comply with the following requirements:

(A) An issuer need not provide justification to the Director if the insured replaces a 1990 Standardized policy or certificate with an issue age rated 2010 Standardized policy or certificate at the insured’s original issue age and duration. If an insured’s policy or certificate to be replaced is priced on an issue age rate schedule at the time of such offer, the rate charged to the insured for the new exchanged policy shall recognize the policy reserve buildup, due to the pre-funding inherent in the use of an issue age rate basis, for the benefit of the insured. The method proposed to be used by an issuer must be filed with the Director of the Department of Consumer and Business Services according to ORS 743.684.

(B) The rating class of the new policy or certificate shall be the class closest to the insured’s class of the replaced coverage.

(C) An issuer may not apply new pre-existing condition limitations or a new incontestability period to the new policy for those benefits contained in the exchanged 1990 Standardized policy or certificate of the insured, but may apply pre-existing condition limitations of no more than six months to any added benefits contained in the new 2010 Standardized policy or certificate not contained in the exchanged policy.

(D) The new policy or certificate shall be offered to all policyholders or certificate holders within a given plan, except where the offer or issue would be in violation of state or federal law.

(3) This section establishes standards for basic or core benefits common to benefit plans A to J. Each issuer shall make available to each prospective insured a policy or certificate including only the basic or core package of benefits established in this section. An issuer may make available to prospective insured any of the other Medicare supplement insurance benefit plans in addition to the basic core package, but not in lieu of it. The basic core package includes the following:

(a) Coverage of Part A Medicare Eligible Expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;

(b) Coverage of Part A Medicare Eligible Expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day use;

(c) Upon exhaustion of the Medicare hospital inpatient coverage including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider must accept the issuer's payment as payment in full and may not bill the insured for any balance. Billing the insured for any such balance is an unfair practice in the transaction of insurance that is injurious to the insurance-buying public, and is a violation of ORS 746.240;

(d) Coverage under Medicare Parts A and B for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations;

(e) Coverage for the coinsurance amount, or in the case of hospital outpatient department services under a prospective payment system, the copayment amount, of Medicare Eligible Expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible.

(4) This section establishes standards for additional benefits. The following additional benefits shall be included in Medicare Supplement Benefit Plans "B" through "J" only as provided by OAR 836-052-0136:

(a) Medicare Part A Deductible benefit, providing coverage for all of the Medicare Part A inpatient hospital deductible amount per benefit period;

(b) Skilled Nursing Facility Care benefit, providing coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A;

(c) Medicare Part B Deductible benefit, providing coverage for all of the Medicare Part B deductible amount per calendar year regardless of hospital confinement;

(d) 80 percent of the Medicare Part B Excess Charges benefit, providing coverage for 80 percent of the difference between the actual Medicare Part B charge as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge;

(e) 100 percent of the Medicare Part B Excess charges benefit, providing coverage for all of the difference between the actual Medicare Part B charge as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge;

(f) Basic Outpatient Prescription Drug benefit, providing coverage for 50 percent of outpatient prescription drug charges, after a $250 calendar year deductible, to a maximum of $1,250 in benefit received by the insured per calendar year, to the extent not covered by Medicare. The outpatient prescription drug benefit may be included for sale or issuance in a Medicare supplement policy until January 1, 2006;

(g) Extended Outpatient Prescription Drug benefit, providing coverage for 50 percent of outpatient prescription drug charges, after a $250 calendar year deductible to a maximum of $3,000 in benefits received by the insured per calendar year, to the extent not covered by Medicare. The outpatient prescription drug benefit may be included for sale or issuance in a Medicare supplement policy until January 1, 2006.

(h) Medically Necessary Emergency Care in a Foreign Country, providing coverage to the extent not covered by Medicare for 80 percent of the billed charges for Medicare eligible expenses for medically necessary emergency hospital, physician and medical care received in a foreign country, when the care would have been covered by Medicare if provided in the United States and when the care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of $250, and a lifetime maximum benefit of $50,000. For purposes of this benefit, "emergency care" means care needed immediately because of an injury or an illness of sudden or unexpected onset;

(i) Preventive Medical Care benefit, providing coverage for the preventive health services set forth in this subsection that are not covered by Medicare. Reimbursement shall be for the actual charges up to 100 percent of the Medicare-approved amount for each service, as if Medicare were to cover the service as identified in American Medical Association Current Procedural Terminology (AMA CPT) codes, to a maximum of $120 annually under this benefit. This benefit shall not include payment for any procedure covered by Medicare. The preventive health services are:

(A) An annual clinical preventive medical history and physical examination that may include tests and services from paragraph (B) of this subsection and patient education to address preventive health care measures;

(B) Preventive screening tests or preventive services, the selection and frequency of which is determined to be medically appropriate by the attending physician.

(j) At-home recovery benefit, providing coverage for services to furnish short term, at-home assistance with activities of daily living for those recovering from an illness, injury or surgery. The following provisions apply to the at-home recovery benefit:

(A) For purposes of the benefit, the following definitions apply:

(i) "Activities of Daily Living" include but are not limited to bathing, dressing, personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally self administered, and changing bandages or other dressings;

(ii) "Care Provider" means a duly qualified or licensed home health aide or homemaker, personal care aide or nurse provided through a licensed home health care agency or referred by a licensed referral agency or licensed nurses registry;

(iii) "Home" means any place used by the insured as a place of residence, if the place would qualify as a residence for home health care services covered by Medicare. A hospital or skilled nursing facility shall not be considered the insured's place of residence;

(iv) "At-Home Recovery Visit" means the period of a visit required to provide at-home recovery care, without limit on the duration of the visit, except that each consecutive four hours in a 24-hour period of services provided by a care provider is one visit.

(B) Coverage requirements and limitations are as follows:

(i) At-home recovery services provided must be primarily services that assist in activities of daily living;

(ii) The insured's attending physician must certify that the specific type and frequency of at-home recovery services are necessary because of a condition for which a home care plan of treatment was approved by Medicare;

(iii) Coverage is limited to:

(I) No more than the number and type of at-home recovery visits certified as necessary by the insured's attending physician. The total number of at-home recovery visits shall not exceed the number of Medicare approved home health care visits under a Medicare approved home care plan of treatment;

(II) The actual charges for each visit up to a maximum reimbursement of $40 per visit;

(III) $1,600 per calendar year;

(IV) Seven visits in any one week;

(V) Care furnished on a visiting basis in the insured's home;

(VI) Services provided by a care provider as defined in subparagraph (A)(ii) of this subsection;

(VII) At-home recovery visits while the insured is covered under the policy or certificate and not otherwise excluded;

(VIII) At-home recovery visits received during the period the insured is receiving Medicare approved home care services or no more than eight weeks after the service date of the last Medicare approved home health care visit.

(C) Coverage is excluded for:

(i) Home care visits paid for by Medicare or other government programs; and

(ii) Care provided by family members, unpaid volunteers, or providers who are not care providers.

(5) Standards for Plans K and L:

(a) Standardized Medicare supplement benefit plan "K" shall consist of the following:

(A) Coverage of 100 percent of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;

(B) Coverage of 100 percent of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;

(C) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer's payment as payment in full and may not bill the insured for any balance;

(D) Medicare Part A Deductible: Coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(E) Skilled Nursing Facility Care: Coverage for 50 percent of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(F) Hospice Care: Coverage for 50 percent of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(G) Coverage for 50 percent, under Medicare Part A or B, of the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(H) Except for coverage provided in paragraph (I) of this subsection, coverage for 50 percent of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(I) Coverage of 100 percent of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible; and

(J) Coverage of 100 percent of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $4000 in 2006, indexed each year by the appropriate inflation adjustment specified by the Secretary of the U.S. Department of Health and Human Services.

(b) Standardized Medicare supplement benefit plan "L" shall consist of the following:

(A) The benefits described in subsection (a)(A), (B), (C), and (I) of this section;

(B) The benefit described in subsection (a)(D), (E), (F), (G), and (H) of this section, but substituting 75 percent for 50 percent; and

(C) The benefit described in subsection (a)(J) of this section, but substituting $2000 for $4000.

Stat. Auth.: ORS 743.683
Stats. Implemented: ORS 743.010 & 743.683
Hist.: ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93; ID 9-1993, f. 9-28-93, cert. ef. 10-1-93; ID 5-1996, f. & cert. ef. 4-26-96; ID 9-1997, f. & cert. ef. 7-10-97; ID 4-1999, f. & cert. ef. 4-29-99; ID 6-2001, f. & cert. ef. 5-22-01; ID 10-2005, f. & cert. ef. 7-26-05; ID 3-2009, f. 6-30-09, cert. ef. 7-1-09

836-052-0134

Minimum Benefit Standards for Policies or Certificates Issued for Delivery Prior to July 1, 1992

(1) A policy or certificate may not be advertised, solicited or issued for delivery in this state as a Medicare supplement policy or certificate unless it meets or exceeds the standards described in this rule. The standards described in this rule are minimum standards and do not preclude the inclusion of other provisions or benefits that are not inconsistent with the standards.

(2) The following standards apply to Medicare supplement policies and certificates and are in addition to all other requirements of OAR 836-052-0103 to 836-052-0194:

(a) A Medicare supplement policy or certificate shall not exclude or limit benefits for losses insured more than six months from the effective date of coverage because it involved a preexisting condition. The policy or certificate shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage;

(b) A Medicare supplement policy or certificate shall not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents;

(c) A Medicare supplement policy or certificate shall provide that benefits designed to cover cost sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, copayment or coinsurance amounts and copayment percentage factors. Premiums may be modified to correspond with such changes. An insurer must justify any premium modification actuarially and must obtain approval from the Director before implementing the modification;

(d) A "noncancelable," "guaranteed renewable" or "noncancelable and guaranteed renewable" Medicare supplement policy shall not:

(A) Provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium; or

(B) Be canceled or nonrenewed by the issuer on the grounds of deterioration of health.

(e)(A) Except as authorized by the Director, an issuer shall neither cancel nor nonrenew a Medicare supplement policy or certificate for any reason other than nonpayment of premium or a material misrepresentation;

(B) If a group Medicare supplement insurance policy is terminated by the group policyholder and not replaced as provided in paragraph (D) of this subsection, the issuer shall offer certificate holders an individual Medicare supplement policy. The issuer shall offer the certificate holder at least the following choices:

(i) An individual Medicare supplement policy currently offered by the issuer having comparable benefits to those contained in the terminated group Medicare supplement policy; and

(ii) An individual Medicare supplement policy that provides only such benefits as are required to meet the minimum standards as defined in OAR 836-052-0133(3).

(C) If membership in a group is terminated, the issuer shall:

(i) Offer the certificate holder the conversion opportunities described in paragraph (B) of this subsection; or

(ii) At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.

(D) If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new group policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced;

(E) This subsection does not prohibit rate increases otherwise authorized by law.

(f) Termination of a Medicare supplement policy or certificate shall be without prejudice to any continuous loss that commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be predicated upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits. Receipt of Medicare Part D benefits will not be considered in determining a continuous loss.

(g) If a Medicare supplement policy eliminates an outpatient prescription drug benefit as a result of requirements imposed by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the modified policy shall be deemed to satisfy the guaranteed renewal requirements of this section.

(3) The following minimum benefit standards apply:

(a) Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;

(b) Coverage for either all or none of the Medicare Part A inpatient hospital deductible amount;

(c) Coverage of Part A Medicare eligible expenses incurred as daily hospital charges during use of Medicare's lifetime hospital inpatient reserve days;

(d) Upon exhaustion of all Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of ninety percent of all Medicare Part A eligible expenses for hospitalization not covered by Medicare, subject to a lifetime maximum benefit of an additional 365 days;

(e) Coverage under Medicare Part A for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations or already paid for under Part B;

(f) Coverage for the co-insurance amount of Medicare eligible expenses under Part B regardless of hospital confinement, subject to a maximum calendar year out-of-pocket amount equal to the Medicare Part B deductible ($100);

(g) Effective January 1, 1990, coverage under Medicare Part B for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations), unless replaced in accordance with federal regulations or already paid for under Part A, subject to the Medicare deductible amount; and

(h) Effective January 1, 1990, coverage for the coinsurance amount of Medicare eligible expenses for outpatient drugs used in immunosuppressive therapy, subject to the Medicare outpatient prescription drug deductible, if applicable.

Stat. Auth.: ORS 743.010 & 743.683
Stats. Implemented: ORS 743.010 & 743.683
Hist.: ID 1-1989(Temp), f. & cert. ef. 1-3-89; ID 5-1989, f. 6-30-89, cert. ef. 7-3-89; ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1996, f. & cert. ef. 4-26-96; ID 9-1997, f. & cert. ef. 7-10-97; ID 10-2005, f. & cert. ef. 7-26-05; ID 3-2009, f. 6-30-09, cert. ef. 7-1-09

836-052-0136

Standard Medicare Supplement Benefit Plans for 1990 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery on or After July 1, 1992 and with an Effective Date of Coverage Prior to June 1, 2010

(1) An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic core benefits, as defined in OAR 836-052-0133(3).

(2) No groups, packages or combinations of Medicare supplement benefits other than those listed in this rule shall be offered for sale in this state except as may be permitted in section (6) of this rule and in OAR 836-052-0139.

(3) Benefit plans must be uniform in structure, language, designation and format to the standard benefit plans "A" through "L" listed in this rule and conform to the definitions in OAR 836-052-0119. Each standard benefit plan must be designated by the letter assigned to it under this rule. Each benefit must be structured in accordance with the format provided in 836-052-0133(3) and (4) or (5) and list the benefits in the order shown in this rule. For purposes of this rule, "structure, language, and format" means style, arrangement, and overall content of a benefit.

(4) In addition to the benefit plan designations required in section (3) of this rule, an issuer may use other designations to the extent permitted by law.

(5) The content of benefit plans must be as follows:

(a) Standardized Medicare supplement benefit plan "A" shall be limited to the basic core benefits common to all benefit plans, as defined in OAR 836-052-0133(3);

(b) Standardized Medicare supplement benefit plan "B" shall include only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible as defined in 836-052-0133(4)(a);

(c) Standardized Medicare supplement benefit plan "C" shall include only the following: the core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medicare Part B Deductible and Medically Necessary Emergency Care in a Foreign Country, each as defined in 836-052-0133(4);

(d) Standardized Medicare supplement benefit plan "D" shall include only the following: The core benefit, as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medically Necessary Emergency Care in a Foreign Country and the At-Home Recovery Benefit, each as defined in 836-052-0133(4);

(e) Standardized Medicare supplement benefit plan "E" shall include only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medically Necessary Emergency Care in a Foreign Country and Preventive Medical Care, each as defined in 836-052-0133(4);

(f) Standardized Medicare supplement benefit plan "F" shall include only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, the Skilled Nursing Facility Care, the Part B Deductible, 100 percent of the Medicare Part B excess Charges and Medically Necessary Emergency Care in a Foreign Country, each as defined in 836-052-0133(4);

(g) Standardized Medicare supplement benefit high deductible plan "F" shall include only the following: 100 percent of covered expenses following the payment of the annual high deductible plan "F" deductible. The covered expenses include the core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, skilled nursing facility care, the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges and medically necessary emergency care in a foreign country, each as defined in 836-052-0133(4). The annual high deductible plan "F" deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan "F" policy, and shall be in addition to any other specific benefit deductibles. The annual high deductible Plan "F" deductible shall be $1500 for 1998 and 1999, and shall be based on the calendar year. The deductible shall be adjusted annually thereafter according to the method prescribed in 42 U.S.C. 1395ss(p)(11)(C) to reflect the change in the Consumer Price Index for all urban consumers for the twelve-month period ending with August of the preceding year, and rounded to the nearest multiple of $10.

(h) Standardized Medicare supplement benefit plan "G" shall include only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, 80 percent of the Medicare Part B Excess Charges, Medically Necessary Emergency Care in a Foreign Country, and the At-Home Recovery Benefit, each as defined in 836-052-0133(4).

(i) Standardized Medicare supplement benefit plan "H" shall consist of only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Basic Prescription Drug Benefit and Medically Necessary Emergency Care in a Foreign Country, each as defined in 836-052-0133(4). The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005;

(j) Standardized Medicare supplement benefit plan "I" shall consist of only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, 100 percent of the Medicare Part B Excess Charges, Basic Prescription Drug Benefit, Medically Necessary Emergency Care in a Foreign Country and At-Home Recovery Benefit, each as defined in 836-052-0133(4). The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005;

(k) Standardized Medicare supplement benefit plan "J" shall consist of only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medicare Part B Deductible, 100 percent of the Medicare Part B Excess Charges, Extended Prescription Drug Benefit, Medically Necessary Emergency Care in a Foreign Country, Preventive Medical Care and At-Home Recovery Benefit, each as defined in 836-052-0133(4). The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005.

(l) Standardized Medicare supplement benefit high deductible plan "J" shall consist of only the following: 100 percent of covered expenses following the payment of the annual high deductible plan "J" deductible. The covered expenses include the core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, extended outpatient prescription drug benefit, medically necessary emergency care in a foreign country, preventive medical care benefit and at home recovery benefit, each as defined in 836-052-0133(4). The annual high deductible plan "J" deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan "J" policy, and shall be in addition to any other specific benefit deductibles. The annual deductible shall be $1500 for 1998 and 1999, and shall be based on a calendar year. The deductible shall be adjusted annually thereafter according to the method prescribed in 42 U.S.C. 1395ss(p)(11)(C) to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of $10. The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005.

(6) Make-up of two additional Medicare supplement plans mandated by The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA);

(a) Standardized Medicare supplement benefit plan "K" shall consist of only those benefits described in OAR 836-052-0133(5).

(b) Standardized Medicare supplement benefit plan "L" shall consist of only those benefits described in OAR 836-052-0133(5).

(7) New or innovative benefits. With the prior approval of the Director, an issuer may offer policies or certificates with new or innovative benefits in addition to the benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits may include benefits that are appropriate to Medicare supplement insurance, new or innovative, not otherwise available, cost-effective and offered in a manner consistent with the goal of simplification of Medicare supplement policies. After December 31, 2005, the innovative benefit shall not include an outpatient prescription drug benefit.

Stat. Auth.: ORS 743.683
Stats. Implemented: ORS 743.010(1)(a), (2) & 743.683(2)
Hist.: ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93; ID 9-1993, f. 9-28-93, cert. ef. 10-1-93; ID 2-1995, f. & cert. ef. 4-26-95; ID 9-1997, f. & cert. ef. 7-10-97; ID 21-1998(Temp), f. 12-8-98, cert. ef. 1-1-99 thru 6-25-99; ID 4-1999, f. & cert. ef. 4-29-99; ID 6-2001, f. & cert. ef. 5-22-01; ID 10-2005, f. & cert. ef. 7-26-05

836-052-0138

Open Enrollment

(1)(a) An issuer may not deny or condition the issuance or effectiveness of any Medicare supplement policy or certificate available for sale in this state, nor discriminate in the pricing of a policy or certificate because of the health status, claims experience, receipt of health care, or medical condition of an applicant in the case of an application for a Medicare supplement policy or certificate that is submitted to the issuer prior to or during the six month period beginning with the first day of the first month in which an individual is enrolled for benefits under Medicare Part B. Each Medicare supplement policy and certificate currently available from an issuer shall be made available on a guaranteed issue basis to all applicants who qualify under this section without regard to age.

(b) If a person under the age of 65 applies for enrollment under Medicare Part B due to disability and is initially denied as ineligible, but upon conclusion of the person’s appeals process the person is awarded retroactive enrollment, the six month period described in this section begins on the first day of the first month after the person receives written notice of retroactive enrollment.

(2)(a) If an applicant qualifies under section (1) of this rule and submits an application during the time period referenced in section (1) of this rule and, as of the date of application, has had a continuous period of creditable coverage of at least six months, the issuer shall not exclude benefits based on a preexisting condition;

(b) If the applicant qualifies under section (1) of this rule and submits an application during the time period referenced in section (1) of this rule and, as of the date of application, has had a continuous period of creditable coverage that is less than six months, the issuer shall reduce the period of any preexisting condition exclusion by the aggregate of the period of creditable coverage applicable to the applicant as of the enrollment date. The manner of the reduction under this subsection shall be the manner prescribed in 42 USC 300gg(a)(3) as of the effective date of this rule.

(3) Except as provided in section 2 of this rule and OAR 836-052-0142 and 836-052-0190, section (1) of this rule shall not be construed as preventing the exclusion of benefits under a policy, during the first six months, based on a preexisting condition for which the policyholder or certificate holder received treatment or was otherwise diagnosed during the six months before the coverage became effective.

(4) This section applies to a person who qualifies for Medicare by reason of disability and who obtains a Medicare supplement policy during the six month period described in section (1) of this rule. For the period that a person to whom this section applies is 65 years of age or less, the premium charged the person by the issuer shall not be greater than the premium charged by the issuer for persons who are 65 years of age. Following that period, for issuers who charge rates on policies on the basis of attained age, the rating plan shall not differentiate on the basis of the reason for eligibility for Medicare Part B.

(5) An issuer must comply with section (1) of this rule with respect to a person:

(a) Who qualifies for Medicare by reason of disability, who first enrolls for benefits under Medicare Part B on or after September 1, 1993, and who applies for a Medicare supplement policy or certificate during the period of eligibility described in section (1) of this rule; or

(b) Who enrolled in Medicare Part B before attaining 65 years of age, who applies for a Medicare supplement policy or certificate upon attaining 65 years of age, during the period of eligibility described in section (1) of this rule that would apply if the person first enrolled in Medicare Part B upon attaining 65 years of age.

Stat. Auth.: ORS 743.683
Stats. Implemented: ORS 743.010 & 743.683
Hist.: ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93; ID 9-1993, f. 9-28-93, cert. ef. 10-1-93; ID 5-1996, f. & cert. ef. 4-26-96; ID 21-1998(Temp), f. 12-8-98, cert. ef. 1-1-99 thru 6-25-99; ID 4-1999, f. & cert. ef. 4-29-99; ID 6-2001, f. & cert. ef. 5-22-01; ID 10-2005, f. & cert. ef. 7-26-05; ID 4-2012, f. 2-16-12, cert. ef. 1-1-13

836-052-0139

Medicare Select Policies and Certificates

(1) This section applies to Medicare Select policies and certificates, as defined in this rule.

(2) No policy or certificate may be advertised as a Medicare Select policy or certificate unless it meets the requirements of this rule.

(3) For the purposes of this rule:

(a) "Complaint" means any dissatisfaction expressed by an individual concerning a Medicare Select issuer or its network providers;

(b) "Grievance" means dissatisfaction expressed in writing by an individual insured under a Medicare Select policy or certificate with the administration, claims practices, or provision of services concerning a Medicare Select issuer or its network providers;

(c) "Medicare Select issuer" means an issuer offering, or seeking to offer, a Medicare Select policy or certificate;

(d) "Medicare Select policy" or "Medicare Select certificate" means respectively a Medicare supplement policy or certificate that contains restricted network provisions;

(e) "Network provider" means a provider of health care, or a group of providers of health care, that has entered into a written agreement with the issuer to provide benefits insured under a Medicare Select policy;

(f) "Restricted network provision" means any provision that conditions the payment of benefits, in whole or in part, on the use of network providers; and

(g) "Service area" means the geographic area approved by the Director of the Department of Consumer and Business Services within which an issuer is authorized to offer a Medicare Select policy.

(4) The Director may authorize an issuer to offer a Medicare Select policy or certificate, pursuant to this section and Section 4358 of the Omnibus Budget Reconciliation Act (OBRA) of 1990 if the Director finds that the issuer has satisfied all of the requirements of OAR 836-052-0103 to 836-052-0194.

(5) A Medicare Select issuer shall not issue a Medicare Select policy or certificate in this state until its plan of operation has been approved by the Director.

(6) A Medicare Select issuer shall file a proposed plan of operation with the Director in a format prescribed by the Director. The plan of operation shall contain at least the following information:

(a) Evidence that all covered services that are subject to restricted network provisions are available and accessible through network providers, including a demonstration that:

(A) Services can be provided by network providers with reasonable promptness with respect to geographic location, hours of operation and after-hour care. The hours of operation and availability of after-hour care shall reflect usual practice in the local area. Geographic availability shall reflect the usual travel times within the community;

(B) The number of network providers in the service area is sufficient, with respect to current and expected policyholders, either:

(i) To deliver adequately all services that are subject to a restricted network provision; or

(ii) To make appropriate referrals.

(C) There are written agreements with network providers describing specific responsibilities;

(D) Emergency care is available 24 hours per day and seven days per week; and

(E) In the case of covered services that are subject to a restricted network provision and are provided on a prepaid basis, there are written agreements with network providers prohibiting the providers from billing or otherwise seeking reimbursement from or recourse against any individual insured under a Medicare Select policy or certificate. This subparagraph shall not apply to supplemental charges or coinsurance amounts as stated in the Medicare Select policy or certificate.

(b) A statement or map providing a clear description of the service area;

(c) A description of the grievance procedure to be utilized;

(d) A description of the quality assurance program, including:

(A) The formal organizational structure;

(B) The written criteria for selection, retention and removal of network providers; and

(C) The procedures for evaluating quality of care provided by network providers, and the process to initiate corrective action when warranted.

(e) A list and description, by specialty, of the network providers;

(f) Copies of the written information proposed to be used by the issuer to comply with section (10) of this rule; and

(g) Any other information requested by the Director.

(7) A Medicare Select issuer:

(a) Shall file any proposed changes to the plan of operation, except for changes to the list of network providers, with the Director prior to implementing the changes. Changes shall be considered approved by the Director after 30 days unless specifically disapproved; and

(b) Shall file with the Director at least quarterly, an updated list of network providers.

(8) A Medicare Select policy or certificate shall not restrict payment for covered services provided by non-network providers if:

(a) The services are for symptoms requiring emergency care or are immediately required for an unforeseen illness, injury or a condition; and

(b) It is not reasonable to obtain services through a network provider.

(9) A Medicare Select policy or certificate shall provide payment for full coverage under the policy for covered services that are not available through network providers.

(10) A Medicare Select issuer shall make full and fair disclosure in writing of the provisions, restrictions and limitations of the Medicare Select policy or certificate to each applicant. This disclosure shall include at least the following:

(a) An outline of coverage sufficient to permit the applicant to compare the coverage and premiums of the Medicare Select policy or certificate with:

(A) Other Medicare supplement policies or certificates offered by the issuer; and

(B) Other Medicare Select policies or certificates.

(b) A description (including address, phone number and hours of operation) of the network providers, including primary care physicians, specialty physicians, hospitals and other providers;

(c) A description of the restricted network provisions, including payments for coinsurance and deductibles when providers other than network providers are utilized. Except to the extent specified in the policy or certificate, expenses incurred when using out-of-network providers do not count toward the out-of-pocket annual limit contained in plans K and L;

(d) A description of coverage for emergency and urgently needed care and other out-of-service area coverage;

(e) A description of limitations on referrals to restricted network providers and to other providers;

(f) A description of the policyholder's rights to purchase any other Medicare supplement policy or certificate otherwise offered by the issuer; and

(g) A description of the Medicare Select issuer's quality assurance program and grievance procedure.

(11) Prior to the sale of a Medicare Select policy or certificate, a Medicare Select issuer shall obtain from the applicant a signed and dated form stating that the applicant has received the information provided pursuant to section (10) of this rule and that the applicant understands the restrictions of the Medicare Select policy or certificate.

(12) A Medicare Select issuer shall have and use procedures for hearing complaints and resolving written grievances from the subscribers. The procedures shall be aimed at mutual agreement for settlement and may include arbitration procedures. The following apply to grievance procedures:

(a) The grievance procedure shall be described in the policy and certificates and in the outline of coverage;

(b) At the time the policy or certificate is issued, the issuer shall provide detailed information to the policyholder describing how a grievance may be registered with the issuer.

(c) Grievances shall be considered in a timely manner and shall be transmitted to appropriate decision-makers who have authority to fully investigate the issue and take corrective action.

(d) If a grievance is found to be valid, corrective action shall be taken promptly.

(e) All concerned parties shall be notified about the results of a grievance.

(f) The issuer shall report no later than each March 31st to the Director regarding its grievance procedure. The report shall be in a format prescribed by the Director and shall contain the number of grievances filed in the past year and a summary of the subject, nature and resolution of such grievances.

(13) At the time of initial purchase, a Medicare Select issuer shall make available to each applicant for a Medicare Select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate otherwise offered by the issuer.

(14)(a) At the request of an individual insured under a Medicare Select policy or certificate, a Medicare Select issuer shall make available to the individual insured the opportunity to purchase a Medicare supplement policy or certificate offered by the issuer that has comparable or lesser benefits and that does not contain a restricted network provision. The issuer shall make the policies or certificates available without requiring evidence of insurability after the Medicare Select policy or certificate has been in force for six months.

(b) For the purposes of this section, a Medicare supplement policy or certificate is considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select policy or certificate being replaced. For the purposes of this subparagraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services or coverage for Part B excess charges.

(15) Medicare Select policies and certificates shall provide for continuation of coverage in the event the Secretary of Health and Human Services determines that Medicare Select policies and certificates issued pursuant to this rule should be discontinued due to either the failure of the Medicare Select Program to be reauthorized under law or its substantial amendment.

(a) Each Medicare Select issuer shall make available to each individual insurer under a Medicare Select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate offered by the issuer that has comparable or lesser benefits and that does not contain a restricted network provision. The issuer shall make the policies and certificates available without requiring evidence of insurability.

(b) For the purposes of this subsection, a Medicare supplement policy or certificate is considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select policy or certificate being replaced. For the purposes of this subparagraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services or coverage for Part B excess charges.

(16) A Medicare Select issuer shall comply with reasonable requests for data made by state or federal agencies, including the United States Department of Health and Human Services, for the purpose of evaluating the Medicare Select Program.

Stat. Auth.: ORS 743.683
Stats. Implemented: ORS 743.010 & 743.683
Hist.: ID 9-1997, f. & cert. ef. 7-10-97; ID 10-2005, f. & cert. ef. 7-26-05

836-052-0140

Standards for Claims Payment

(1) An issuer must comply with Section 1882(c)(3) of the Social Security Act, as enacted by Section 4081(b)(2)(C) of the Omnibus Budget Reconciliation Act of 1987 (OBRA) 1987, Public Law No. 100-203, by:

(a) Accepting a notice from a Medicare carrier on dually assigned claims submitted by participating physicians and suppliers as a claim for benefits in place of any other claim form otherwise required and making a payment determination on the basis of the information contained in that notice;

(b) Notifying the participating physician or supplier and the beneficiary of the payment determination;

(c) Paying the participating physician or supplier directly;

(d) Furnishing each enrollee, at the time of enrollment, with a card listing the policy name, number and a central mailing address to which notices from a Medicare carrier may be sent;

(e) Paying user fees for claim notices that are transmitted electronically or otherwise; and

(f) Providing to the Secretary of Health and Human Services, at least annually, a central mailing address to which all claims may be sent by Medicare carriers.

(2) Each insurer providing Medicare supplement coverage in this state shall, concurrent with the filing of the Accident and Health Policy Experience Exhibit, file a Medicare Supplement Insurance Experience Exhibit. The exhibit shall be in a format prescribed by the Director. The Director may prescribe the format adopted by the National Association of Insurance Commissioners. The following provisions also apply:

(a) Every insurer providing Medicare supplement coverage in this state shall file with the Medicare Supplement Insurance Experience Exhibit a list of its Medicare supplement policies or certificates offered or issued and outstanding in this state as of the end of the previous calendar year;

(b) The list under subsection (a) of this section shall identify the filing insurer by name and address, shall identify each policy or certificate by name and form number, and shall differentiate between policies and certificates filed with and approved by the Director in years prior to the previous calendar year and those filed and approved in the previous calendar year;

(c) Policies and certificates that are issued and outstanding in this state but are no longer offered for sale shall be specifically identified, as shall any policies or certificates that for any reason were not filed with and approved by the Director;

(d) The list shall include identification of any policy or certificate for which the Director's approval was withdrawn within the previous calendar year;

(e) On or before the first day of September of each year, commencing September 1, 1989, the Director shall provide the Secretary of Health and Human Services with a list containing the information required to be submitted by this section and identifying each insurer by name and address.

(3) Compliance with the requirements set forth in this rule must be certified by the insurer on the Medicare supplement insurance experience reporting form.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 731.244, 743.010, 743.013, 743.680 - 743.689 & 746.240
Stats. Implemented: ORS 743.683(2) & 743.683(6)
Hist.: ID 1-1989(Temp), f. & cert. ef. 1-3-89; ID 5-1989, f. 6-30-89, cert. ef. 7-3-89; ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92

836-052-0141

Standard Medicare Supplement Benefit Plans for 2010 Standardized Medicare Supplement Benefit Plan Policies or Certificates with an Effective Date of Coverage on or After June 1, 2010

The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state with an effective date for coverage on or after June 1, 2010. No policy or certificate may be advertised, solicited, delivere3d, or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with these benefit standards. No issuer may offer any 1990 Standardized Medicare supplement benefit plan for sale with an effective date for coverage on or after June 1, 2010. Benefit standards applicable to Medicare supplement policies and certificates with an effective date for coverage before June 1, 2010 remain subject to the requirements of OAR 836-052-0133.

(1)(a) An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic core benefits, as defined in OAR 836-052-0132(2).

(b) If an issuer makes available any of the additional benefits described in OAR 836-052-0132(3) or offers standardized benefit Plans K or L as described subsections (5)(h) and (i) of this rule, then the issuer shall make available to each prospective policyholder and certificate holder, in addition to a policy form or certificate form with only the basic core benefits as described in subsection (a) of this section, a policy form or certificate form containing either standardized benefit Plan C as described in subsection (5)(c) of this rule or standardized benefit Plan F as described in subsection (5)(e) of this.

(2) No groups, packages or combinations of Medicare supplement benefits other than those listed in this rule shall be offered for sale in this state, except as may be permitted in subsection (6) of this rule and OAR 836-052-0139.

(3) Benefit plans shall be uniform in structure, language, designation and format to the standard benefit plans listed in this rule and conform to the definitions in OAR 836-052-0119. Each benefit plan must be structured in accordance with the format provided in 836-052-0132(2) and (3); or, in the case of plans K or L, in subsections (5)(h) and (i) of this rule and list the benefits in the order shown. For purposes of this rule, “structure, language, and format” means style, arrangement and overall content of a benefit.

(4) In addition to the benefit plan designations required in section (3) of this rule, an issuer may use other designations to the extent permitted by law.

(5) The content of the 2010 Standardized Medicare supplement benefit plans must be as follows:

(a) Standardized Medicare supplement benefit Plan A shall include only the basic core benefits as defined in OAR 836-052-0132 (2).

(b) Standardized Medicare supplement benefit Plan B shall include only the following: The basic core benefit as defined in OAR 836-052-0132(2); plus 100 percent of the Medicare Part A deductible as defined in 836-052-0132(3)(a).

(c) Standardized Medicare supplement benefit Plan C shall include only the following: The basic (core) benefit as defined OAR 836-052-0132(2); plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B deductible, and Medically necessary emergency care in a foreign country, each as defined in OAR 836-052-0132(3)(a), (c), (d) and (f).

(d) Standardized Medicare supplement benefit Plan D shall include only the following: The basic core benefit as defined in OAR 836-052-0142(2), plus 100 percent of the Medicare Part A deductible skilled nursing facility care, and medically necessary emergency care in an foreign country each as defined in 836-052-0132(3)(a)(c) and (f).

(e) Standardized Medicare supplement regular Plan F shall include only the following: The basic core benefit as defined in OAR 836-052-0132(2), plus 100 percent of the Medicare Part A deductible, the skilled nursing facility care, 100 percent of the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country each as defined in 836-052-132(3)(a), (c), (d), (e) and (f).

(f) Standardized Medicare supplement Plan F with high deductible shall include only the following: 100 percent of covered expenses following the payment of the annual deductible set forth in paragraph (B) of this subsection.

(A) The basic core benefit as defined in OAR 836-052-0132(2), plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country each as defined in 836-052-0132(3)(a), (c), (d), (e) and (f).

(B) The annual deductible in Plan F with high deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the standardized Medicare supplement regular Plan F, and shall be in addition to any other specific benefit deductibles. The basis for the deductible shall be $1,500 and shall be adjusted annually from 1999 according to the method prescribed by the Secretary of the U.S. Department of Health and Human Services to reflect the change in the Consumer Price Index for all urban consumers for the twelve-month period ending with August of the preceding year, and rounded to the nearest multiple of $10.

(g) Standardized Medicare supplement benefit Plan G shall include only the following: The basic core benefit as defined in OAR 836-052-0132(2) of this regulation, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country each as defined in 836-052-0132(3)(a), (c), (e) and (f).

(h) Standardized Medicare supplement Plan K is mandated by The Medicare Prescription Drug, Improvement and Modernization Act of 2003, and shall include only the following:

(A) Coverage of 100 percent of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;

(B) Coverage of 100 percent of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;

(C) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment as payment in full and may not bill the insured for any balance;

(D) Medicare Part A Deductible: Coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(E) Skilled Nursing Facility Care: Coverage for fifty percent (50%) of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(F) Hospice Care: Coverage for 50 percent of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(G) Blood: Coverage for 50 percent under Medicare Part A or B, of the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(H) Except for coverage provided in paragraph (I) of this subsection, coverage for 50 percent of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(I) Coverage of 100 percent of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible; and

(J) Coverage of 100 percent of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $4000 in 2006, indexed each year by the appropriate inflation adjustment specified by the Secretary of the U.S. Department of Health and Human Services.

(i) Standardized Medicare supplement Plan L is mandated by The Medicare Prescription Drug, Improvement and Modernization Act of 2003, and shall include only the following:

(A) The benefits described in section (5)(h)(A)(B)(C) and (I) of this rule;

(B) The benefit described in section (5) (h)(D)(E)(F)(G) and (H) of this rule, but substituting 75 percent for 50 percent; and

(C) The benefit described in section (5)(h)(J) of this rule, but substituting $2000 for $4000.

(j) Standardized Medicare supplement Plan M shall include only the following: The basic core benefit as defined in OAR 836-052-0132(2), plus 50 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country each as defined in OAR 836-052-0132(3)(b), (c) and (f).

(k) Standardized Medicare supplement Plan N shall include only the following: The basic core benefit as defined in OAR 836-052-0132(2), plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country each as defined in 836-052-0132(3)(a), (c) and (f), with copayments in the following amounts:

(A) The lesser of $20 or the Medicare Part B coinsurance or copayment for each covered health care provider office visit including visits to medical specialists; and

(B) The lesser of $50 or the Medicare Part B coinsurance or copayment for each covered emergency room visit; however, this copayment shall be waived if the insured is admitted to any hospital and the emergency visit is subsequently covered as a Medicare Part A expense.

(6). With the prior approval of the Director of the Department of Consumer and Business Services, an issuer may offer policies or certificates with new or innovative benefits, in addition to the standardized benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits shall include only benefits that are appropriate to Medicare supplement insurance, are new or innovative, are not otherwise available, and are cost-effective. Approval of new or innovative benefits must not adversely impact the goal of Medicare supplement simplification. New or innovative benefits shall not include an outpatient prescription drug benefit. New or innovative benefits shall not be used to change or reduce benefits, including a change of any cost-sharing provision, in any standardized plan.

Stat. Auth.: ORS 743.683
Stats. Implemented: ORS 743.010 & 743.683
Hist.: ID 3-2009, f. 6-30-09, cert. ef. 7-1-09

836-052-0142

Guaranteed Issue for Eligible Persons

(1) Guaranteed issue:

(a) Eligible persons are those individuals described in section (2) of this rule who seek to enroll under the policy during the period specified in section (3) of this rule and who submit evidence of the date of termination, disenrollment or Medicare Part D enrollment with the application for a Medicare supplement policy.

(b) With respect to eligible persons, an issuer shall not deny or condition the issuance or effectiveness of a Medicare supplement policy described in section (5) of this rule that is offered and is available for issuance to new enrollees by the issuer, shall not discriminate in the pricing of such a Medicare supplement policy because of health status, claims experience, receipt of health care or medical condition, and shall not impose an exclusion of benefits based on a preexisting condition under such a Medicare supplement policy.

(2) Eligible persons. An eligible person is an individual described in any of the following paragraphs:

(a) The individual is enrolled under an employee welfare benefit plan, an individual, conversion or portability health benefit plan, or a state Medicaid plan as described in Title XIX of the Social Security Act that provides health benefits that supplement the benefits under Medicare, and the plan terminates or the plan ceases to provide all such supplemental health benefits to the individual; or the individual is enrolled under an employee welfare benefit plan that is primary to Medicare and the plan terminates or the plan ceases to provide all health benefits to the individual.

(b) The individual is enrolled with a Medicare Advantage organization under a Medicare Advantage plan under part C of Medicare, and any of the following circumstances apply, or the individual is 65 years of age or older and is enrolled with a Program of All Inclusive Care for the Elderly (PACE) provider under section 1894 of the Social Security Act, and there are circumstances similar to those described in this subsection that would permit discontinuance of the individual's enrollment with the provider if the individual were enrolled in a Medicare Advantage plan:

(A) The certification of the organization or plan has been terminated;

(B) The organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides;

(C) The individual is no longer eligible to elect the plan because of a change in the individual's place of residence or other change in circumstances specified by the Secretary, but not including termination of the individual's enrollment on the basis described in section 1851(g)(3)(B) of the federal Social Security Act (where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under section 1856), or the plan is terminated for all individuals within a residence area;

(D) The individual demonstrates, in accordance with guidelines established by the Secretary, that:

(i) The organization offering the plan substantially violated a material provision of the organization's contract under this part in relation to the individual, including the failure to provide an enrollee on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide such covered care in accordance with applicable quality standards; or

(ii) The organization, or agent or other entity acting on the organization's behalf, materially misrepresented the plan's provisions in marketing the plan to the individual; or

(E) The individual meets such other exceptional conditions as the Secretary may provide.

(c)(A) The individual is enrolled with:

(i) An eligible organization under a contract under Section 1876 of the Social Security Act (Medicare cost);

(ii) A similar organization operating under demonstration project authority, effective for periods before April 1, 1999;

(iii) An organization under an agreement under Section 1833(a)(1)(A) of the Social Security Act (health care prepayment plan); or

(iv) An organization under a Medicare Select policy; and

(B) The enrollment ceases under the same circumstances that would permit discontinuance of an individual's election of coverage under section (2)(b) of this rule.

(d) The individual is enrolled under a Medicare supplement policy and the enrollment ceases because:

(A)(i) Of the insolvency of the issuer or bankruptcy of the non-issuer organization; or

(ii) Of other involuntary termination of coverage or enrollment under the policy.

(B) The issuer of the policy substantially violated a material provision of the policy; or

(C) The issuer, or an agent or other entity acting on the issuer's behalf, materially misrepresented the policy's provisions in marketing the policy to the individual.

(e)(A) The individual was enrolled under a Medicare supplement policy and terminates enrollment and subsequently enrolls, for the first time, with any Medicare Advantage organization under a Medicare Advantage plan under part C of Medicare, any eligible organization under a contract under Section 1876 of the Social Security Act (Medicare cost), any similar organization operating under demonstration project authority, any PACE provider under Section 1894 of the Social Security Act or a Medicare Select policy; and

(B) The subsequent enrollment under paragraph (A) of this subsection is terminated by the enrollee during any period within the first 12 months of such subsequent enrollment (during which the enrollee is permitted to terminate such subsequent enrollment under section 1851 (e) of the federal Social Security Act); or

(f) The individual, upon first becoming enrolled for benefits under Medicare part A, enrolls in a Medicare Advantage plan under part C of Medicare, or with a PACE provider under Section 1894 of the Social Security Act, and dis-enrolls from the plan or program by not later than 12 months after the effective date of enrollment.

(g) The individual enrolls in a Medicare Part D plan during the initial enrollment period and, at the time of enrollment in Part D, was enrolled under a Medicare supplement policy that covers outpatient prescription drugs and the individual terminates enrollment in the Medicare supplement policy and submits evidence of enrollment in Medicare Part D along with the application for a policy described in section (5)(d) of this rule.

(3) Guaranteed Issue Time Periods.

(a) In the case of an individual described in section (2)(a) of this rule, the guaranteed issue period begins on the later of:

(A) The date the individual receives a notice of termination or cessation of all supplemental health benefits (or, if a notice is not received, notice that a claim has been denied because of a termination or cessation); or

(B) The date that the applicable coverage terminates or ceases; and ends 63 days thereafter.

(b) In the case of an individual described in section (2)(b), (c), (e) or (f) of this rule whose enrollment is terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends 63 days after the date the applicable coverage is terminated;

(c) In the case of an individual described in section (2)(d)(A), the guaranteed issue period begins on the earlier of:

(A) The date that the individual receives a notice of termination, a notice of the issuer's bankruptcy or insolvency, or other such similar notice if any; and

(B) The date that the applicable coverage is terminated, and ends on the date that is 63 days after the date the coverage is terminated.

(d) In the case of an individual described in section (2)(b), (d)(B), (d)(C), (e) or (f) of this rule, who disenrolls voluntarily, the guaranteed issue period begins on the date that is 60 days before the effective date of the disenrollment and ends on the date that is 63 days after the effective date; and

(e) In the case of an individual described in section (2)(g) of this rule, the guaranteed issue period begins on the date the individual receives notice pursuant to Section 1882(v)(2)(B) of the Social Security Act from the Medicare supplement issuer during the 60-day period immediately preceding the initial Part D enrollment period and ends on the date that is 63 days after the effective date of the individual's coverage under Medicare Part D; and

(f) In the case of an individual described in section (2) of this rule but not described in the preceding provisions of this subsection, the guaranteed issue period begins on the effective date of disenrollment and ends on the date that is 63 days after the effective date.

(4) Extended Medigap access for interrupted trial periods.

(a) In the case of an individual described in section (2)(e) of this rule (or deemed to be so described, pursuant to this paragraph) whose enrollment with an organization or provider described in section (2)(e)(A) is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment enrolls with another such organization or provider, the subsequent enrollment shall be deemed to be an initial enrollment described in section (2)(e) of this rule.

(b) In the case of an individual described in section (2)(f) of this section (or deemed to be so described, pursuant to this paragraph) whose enrollment with a plan or in a program described in section (2)(f) of this rule is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls in another such plan or program, the subsequent enrollment shall be deemed to be an initial enrollment described in section (2)(f) of this rule; and

(c) For purposes of sections (2)(e) and (f) of this rule, no enrollment of an individual with an organization or provider described in section (2)(e)(A) of this rule, or with a plan or in a program described in section (2)(f) of this rule, may be deemed to be an initial enrollment under this paragraph after the two year period beginning on the date on which the individual first enrolled with such an organization provider, plan or program.

(5) Products to which eligible persons are entitled. The Medicare supplement policy to which eligible persons are entitled under:

(a) Section (2)(a), (b), (c) (except for coverage described in (c)(A)(iv) and (d) of this rule is a Medicare supplement policy that has a benefit package classified as Plan A, B, C, F (including F with a high deductible), K or L offered by any issuer;

(b) Section (2)(c)(A)(iv) and (f) of this rule is any Medicare supplement policy described in OAR 836-052-0136 offered by any issuer;

(c)(A) Subject to paragraph (B) of this subsection, section (2)(e) of this rule is the same Medicare supplement policy in which the individual was most recently previously enrolled, if available from the same issuer, or, if not so available, a policy described in subsection (a) of this section.

(B) After December 31, 2005, if the individual was most recently enrolled in a Medicare supplement policy with an outpatient prescription drug benefit, a Medicare supplement policy described in this paragraph is:

(i) The policy available from the same issuer but modified to remove prescription drug coverage; or

(ii) At the election of the policyholder, an A, B, C, F (including F with a high deductible), K or L policy that is offered by any issuer.

(d) Section (2)(g) of this rule is a Medicare supplement policy that has a benefit package classified as Plan A, B, C, D, F (including F with a high deductible),G, K, or L, M & N and that is offered and is available for issuance to new enrollees by the same issuer that issued the individual's Medicare supplement policy with outpatient prescription drug coverage.

(6) Notification provisions:

(a) At the time of an event described in section (2) of this rule because of which an individual loses coverage or benefits due to the termination of a contract or agreement, policy or plan, the organization that terminates the contract or agreement, the issuer terminating the policy, or the administrator of the plan being terminated, respectively, shall notify the individual of the individual's rights under this rule, and of the obligations of issuers of Medicare supplement policies under section (1) of this rule. Such notice shall be communicated contemporaneously with the notification of termination.

(b) At the time of an event described in section (2) of this rule because of which an individual ceases enrollment under a contract or agreement, policy or plan, the organization that offers the contract or agreement, regardless of the basis for the cessation of enrollment, the issuer offering the policy, or the administrator of the plan, respectively, shall notify the individual of the individual's rights under this rule, and of the obligations of issuers of Medicare supplement policies under section (1) of this rule. Such notice shall be communicated within ten working days of the issuer's receiving notification of disenrollment.

Stat. Auth.: ORS 743.684
Stats. Implemented: ORS 743.010 & 743.684
Hist.: ID 21-1998(Temp), f. 12-8-98, cert. ef. 1-1-99 thru 6-25-99; ID 4-1999, f. & cert. ef. 4-29-99; ID 6-2001, f. & cert. ef. 5-22-01; ID 24-2002, f. & cert. ef. 12-13-02; ID 10-2005, f. & cert. ef. 7-26-05; ID 3-2009, f. 6-30-09, cert. ef. 7-1-09; ID 6-2013(Temp), f. & cert. ef. 12-5-13 thru 5-20-14; ID 9-2014, f. & cert. ef. 5-19-14

836-052-0143

Annual Opportunity to Select Another Medicare Supplement Policy or Certificate

(1) For the purposes of this rule, for 1990 and 2010 Medicare Supplement Plans, “same or lesser benefits” means a policy or certificate of the same or lower benefit level as indicated on a chart available on the website of the Insurance Division of the Department of Consumer and Business Services.

(2) Beginning on a person’s birthday and for 30 days after the person’s birthday, a person enrolled in a Medicare supplement policy may cancel the person’s existing Medicare supplement policy or certificate and purchase or select another Medicare supplement policy or certificate with the same or lesser benefits to replace the existing Medicare supplement policy or certificate. An issuer may not deny or condition the issuance or effectiveness, nor discriminate in the pricing of the replacement policy or certificate on the basis of health status, claims experience, receipt of health care or medical condition of the applicant.

(3) This rule does not apply to Medicare supplement policies or certificates issued or delivered before January 1, 1990.

Stat. Auth.: ORS 731.244, 743.010, 743.680 - 743.689
Stats. Implemented: ORS 743.010, 743.683, 743.684
Hist.: ID 4-2012, f. 2-16-12, cert. ef. 1-1-13

836-052-0145

Loss Ratio Standards and Refund or Credit of Premium

(1) The following provisions of this section establish loss ratio standards:

(a) A Medicare supplement policy form or certificate form shall not be delivered or issued for delivery unless the policy form or certificate form can be expected, as estimated for the entire period for which rates are computed to provide coverage, to return the applicable percentage specified in this section to the policyholder and certificate holder in the form of aggregate benefits, not including anticipated refunds or credits, provided under the policy form or certificate form:

(A) At least 75 percent of the aggregate amount of premiums earned, in the case of group policies; or

(B) At least 65 percent of the aggregate amount of premiums earned, in the case of individual policies.

(b) A percentage under subsection (a) of this subsection shall be calculated on the basis of incurred claims experience or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis and earned premiums for the period and in accordance with accepted actuarial principles and practices. Incurred health care expenses where coverage is provided by a health maintenance organization shall not include:

(A) Home office and overhead costs;

(B) Advertising costs;

(C) Commissions and other acquisition costs;

(D) Taxes;

(E) Capital costs;

(F) Administrative costs; and

(G) Claims processing costs.

(c) All filings of rates and rating schedules shall demonstrate that expected claims in relation to premiums comply with the requirements of this rule 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 appropriate loss ratio standards;

(d) For purposes of applying section (1)(a) of this rule and section (3)(c) of OAR 836-052-0151 only, policies issued as a result of solicitations of individuals through the mails or by mass media advertising (including both print and broadcast advertising) shall be deemed to be individual policies;

(e) For policies issued prior to September 1, 1993, expected claims in relation to premiums shall meet:

(A) The originally filed anticipated loss ratio when combined with the actual experience since inception;

(B) The appropriate loss ratio requirement from section (1)(a)(A) and (B) of this rule when combined with actual experience beginning with April 28, 1996, to date; and

(C) The appropriate loss ratio requirement from section (1)(a)(A) and (B) of this rule over the entire future period for which the rates are computed to provide coverage.

(2) The following provisions of this section apply to refund and credit calculations:

(a) An issuer shall collect and file with the Director by May 31 of each year the data contained in the applicable reporting form contained in Exhibit 1 to this rule for each type in a standard Medicare supplement benefit plan;

(b) If on the basis of the experience as reported, the benchmark ratio since inception (ratio 1) exceeds the adjusted experience ratio since inception (ratio 3), then a refund or credit calculation is required. The refund calculation shall be done on a statewide basis for each type in a standard Medicare supplement benefit plan. For purposes of the refund or credit calculation, experience on policies issued within the reporting year shall be excluded;

(c) For the purpose of this rule, policies or certificates issued prior to September 1, 1993, the issuer shall make the refund or credit calculation separately for all individual policies, including all group policies subject to an individual loss ratio standard when issued, combined and all other group policies combined for experience after April 28, 1996. The first such report shall be due by May 31, 1998.

(d) A refund or credit shall be made only when the benchmark loss ratio exceeds the adjusted experience loss ratio and the amount to be refunded or credited exceeds a negligible level. The refund must include interest from the end of the calendar year to the date of the refund or credit at a rate specified by the Secretary of Health and Human services, but in no event shall it be less than the average rate of interest for 13-week Treasury notes. A refund or credit against premiums due shall be made by September 30 following the experience year upon which the refund or credit is based.

(3) An issuer of Medicare supplement policies and certificates issued before, on or after July 1, 1992, in this state shall file annually its rates, rating schedule and supporting documentation, including ratios of incurred losses to earned premiums by policy duration for approval by the Director in accordance with the filing requirements and procedures prescribed by the Director. The supporting documentation shall also demonstrate in accordance with actuarial standards of practice using reasonable assumptions that the appropriate loss ratio standards can be expected to be met over the entire period for which rates are computed. The demonstration shall exclude active life reserves. An expected third year loss ratio that is greater than or equal to the applicable percentage shall be demonstrated for policies or certificates in force less than three years. As soon as practicable, but prior to the effective date of enhancements in Medicare benefits, every issuer of Medicare supplement policies or certificates in this state shall file with the Director for approval, in accordance with the applicable filing procedures of this state the following:

(a)(A) Appropriate premium adjustments necessary to produce loss ratios as anticipated for the current premium for the applicable policies or certificates. Supporting documents necessary to justify the adjustment shall accompany the filing.

(B) An issuer shall make premium adjustments necessary to produce an expected loss ratio under the policy or certificate to conform to minimum loss ratio standards for Medicare supplement policies and to be expected to result in a loss ratio at least as great as that originally anticipated in the rates used to produce current premiums by the issuer for the Medicare supplement policies or certificates. No premium adjustment that would modify the loss ratio experience under the policy other than the adjustments described herein shall be made with respect to a policy at any time other than upon its renewal date or anniversary date. Except as provided in OAR 836-052-0138, an insurer may not increase the rates for a Medicare supplement policy or certificate issued in this state more than once in a 12-month period. If an issuer intends to exercise the right to adjust a premium for age attainment under OAR 836-052-0138, and such adjustment results in more than one increase in a 12-month period, the issuer must provide written disclosure to the consumer prior to the issuance of the policy or certificate. The limitation on premium adjustments under this paragraph does not apply to a premium adjustment that results from a change in the policy or premium payment terms requested by an insured including but not limited to changes in the method of payment such as discontinuing payment by a preauthorized electronic funds transfer.

(C) If an issuer fails to make premium adjustments acceptable to the Director, the Director may order premium adjustments, refunds or premium credits that the Director considers necessary to achieve the loss ratio required by this rule.

(b) Any appropriate riders, endorsements or policy forms needed to accomplish the Medicare supplement policy or certificate modifications necessary to eliminate benefit duplications with Medicare. The riders, endorsements or policy forms shall provide a clear description of the Medicare supplement benefits provided by the policy or certificate.

(4) For purposes of this rule, experience of insureds who qualify for Medicare by reason of disability shall be combined with experience of insureds who qualify for Medicare by reason of age.

(5) The Director may conduct a public hearing to gather information concerning a request by an issuer for an increase in a rate for a policy form or certificate form issued before, on or after July 1, 1992, if the experience of the form for the previous reporting period is not in compliance with the applicable loss ratio standard. The determination of compliance may be made without consideration of any refund or credit for the reporting period. Public notice of the hearing shall be furnished as the Director determines to be appropriate.

[ED. NOTE: Exhibits referenced are available from the agency.]

Stat. Auth.: ORS 743.684
Stats. Implemented: ORS 743.010 & 743.684
Hist.: ID 1-1989(Temp), f. & cert. ef. 1-3-89; ID 5-1989, f. 6-30-89, cert. ef. 7-3-89; ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93; ID 9-1993, f. 9-28-93, cert. ef. 10-1-93; ID 5-1996, f. & cert. ef. 4-26-96; ID 9-1997, f. & cert. ef. 7-10-97; ID 8-2001(Temp), 6-15-01, cert. ef. 6-18-01 thru 12-10-01; ID 11-2001, f. & cert. ef. 9-24-01; ID 10-2005, f. & cert. ef. 7-26-05; ID 7-2011, f. & cert. ef. 2-23-11; ID 15-2011, f. & cert. ef. 10-31-11

836-052-0151

Filing and Approval of Policies and Certificates and Premium Rates

(1) An issuer shall not deliver or issue for delivery a policy or certificate to a resident of this state unless the policy form or certificate form has been filed with and approved by the Director in accordance with filing requirements and procedures prescribed by the Director.

(2) An issuer shall file any riders or amendments to policy or certificate forms to delete outpatient prescription drug benefits as required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 only with the Insurance Commissioner in the state in which the policy or certificate was issued.

(3)(a) An issuer shall not use or change premium rates for a Medicare supplement policy or certificate unless the rates, rating schedule and supporting documentation have been filed with and approved by the Director in accordance with filing requirements and procedures prescribed by the Director.

(b) Except for an adjustment of premium on the basis of attained age under OAR 836-052-0138, an issuer may not increase the rates for a Medicare supplement policy or certificate issued in this state more than once in a 12-month period. Annual rate increases shall be effective on the policy or certificate anniversary date or renewal date. If an issuer intends to exercise the right to adjust a premium for age attainment under OAR 836-052-0138, and such adjustment results in more than one increase in a 12-month period, the issuer must provide written disclosure to the consumer prior to the issuance of the policy or certificate. The limitation on premium adjustments under this subsection does not apply to a premium adjustment that results from a change in the policy or premium payment terms requested by an insured including but not limited to changes in the method of payment such as discontinuing payment by a preauthorized electronic funds transfer.

(4) Except as provided in this section, an issuer shall not file for approval more than one form of a policy or certificate of each type for each standard Medicare supplement benefit plan. For the purposes of this section, a "type" means an individual policy or a group policy. An issuer may offer, with the approval of the Director, not more than four additional policy forms or certificate forms of the same type for the same standard Medicare supplement benefit plan, one for each of the following cases:

(a) The inclusion of new or innovative benefits;

(b) The addition of either direct response or agent marketing methods;

(c) The addition of either guaranteed issue or underwritten coverage.

(5) The following applies to continuance and discontinuance of Medicare supplement policies and certificates:

(a) Except as provided in this subsection, an issuer shall continue to make available for purchase any policy form or certificate form issued after July 1, 1992, that has been approved by the Director. A policy form or certificate form shall not be considered to be available for purchase unless the issuer has actively offered it for sale in the previous twelve months. The following applies to discontinuance of a policy form or certificate form to which this subsection applies:

(A) An issuer may discontinue the availability of a policy form or certificate form for new issues if the issuer provides to the Director in writing its decision at least 30 days prior to discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the Director, the issuer shall no longer offer for sale the policy form or certificate form in this state. The issuer must continue to renew outstanding policies and certificates;

(B) An issuer that discontinues the availability of a policy form or certificate form pursuant to paragraph (A) of this subsection shall not file for approval a new policy form or certificate form of the same type for the same standard Medicare supplement benefit plan as the discontinued form for a period of five years after the issuer provides notice to the Director of the discontinuance. The period of discontinuance may be reduced if the Director determines that a shorter period is appropriate.

(b) The sale or other transfer of Medicare supplement business to another issuer shall be considered a discontinuance for the purposes of this subsection;

(c) A change in the rating structure or methodology shall be considered a discontinuance under subsection (a) of this section unless the issuer complies with the following requirements:

(A) The issuer provides an actuarial memorandum satisfactory to the Director, in a form and manner prescribed by the Director, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and existing rates;

(B) The issuer does not subsequently put into effect a change of rates or rating factors that would cause the percentage differential between the discontinued and subsequent rates as described in the actuarial memorandum to change. The Director may approve a change to the differential that is in the public interest.

(6) Except as provided in this section, the experience of all policy forms or certificate forms of the same type in a standard Medicare supplement benefit plan shall be combined for purposes of the refund or credit calculation prescribed in OAR 836-052-0145. Forms assumed under an assumption reinsurance agreement shall not be combined with the experience of other forms for purposes of the refund or credit calculation.

Stat. Auth.: ORS 743.683
Stats. Implemented: ORS 743.010, 743.684(1)–(2) & 743.683(2)
Hist.: ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93; ID 9-1993, f. 9-28-93, cert. ef. 10-1-93; ID 2-1995, f. & cert. ef. 4-26-95; ID 10-2005, f. & cert. ef. 7-26-05; ID 7-2011, f. & cert. ef. 2-23-11; ID 15-2011, f. & cert. ef. 10-31-11

836-052-0156

Permitted Compensation Arrangements

(1) An issuer or other entity may provide commission or other compensation to an insurance producer or other representative for the sale of a Medicare supplement policy or certificate only if the first year commission or other first year compensation, including overrides and other sales-connected remuneration to field supervisory personnel, does not exceed 200 percent of the commission or the compensation paid for selling or servicing the policy or certificate in the second year or period.

(2) The commission or other compensation provided in subsequent renewal years must be the same as that provided in the second year or period and must be provided for a reasonable number of renewal years. The total number of renewal years shall not be fewer than five renewal years.

(3) An issuer or entity shall not provide compensation to its insurance producers and an insurance producer shall not receive compensation greater than the renewal compensation payable by the replacing issuer if an existing policy or certificate is replaced.

(4) For purposes of this rule, "compensation" includes pecuniary or non-pecuniary remuneration of any kind relating to the sale or renewal of the policy or certificate, including but not limited to bonuses, gifts, prizes, awards and finder's fees.

(5) Violation of this rule is an unfair trade practice under ORS 746.240.

Stat. Auth.: ORS 731.244, 743.010, 743.013, 743.680 - 743.689 & 746.240
Stats. Implemented: ORS 743.684(3)
Hist.: ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 8-2005, f. 5-18-05, cert. ef. 8-1-05

836-052-0160

Required Disclosure Provisions

(1) The following provisions apply to all Medicare supplement policies and certificates:

(a) Each Medicare supplement policy and certificate shall include a renewal or continuation provision. The language or specifications of the provision must be consistent with the type of contract issued. The provision shall be appropriately captioned, shall appear on the first page of the policy and shall include any reservation by the issuer of the right to change premiums and any automatic renewal premium increases based on the policyholder's or certificate holder's age;

(b) Each rider or endorsement added to a Medicare supplement policy after the date that the policy is issued or at reinstatement or renewal, that reduces or eliminates benefits or coverage in the policy, shall require a signed acceptance by the insured, except for riders or endorsements by which the issuer effectuates a request made in writing by the insured, exercises a specifically reserved right under a Medicare supplement policy or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits. After the date of issuance of the policy or certificate, any rider or endorsement that increases benefits or coverage with a concomitant increase in premium during the policy term shall be agreed to in writing signed by the insured, unless the benefits are required by the minimum standards for Medicare supplement policies, or if the increased benefits or coverage is required by law. When a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy;

(c) Medicare supplement policies or certificates shall not provide for the payment of benefits based on standards described as "usual and customary," "reasonable and customary" or words of similar import;

(d) If a Medicare supplement policy or certificate contains any limitations with respect to preexisting conditions, such limitations must appear as a separate paragraph of the policy and be labeled as "Preexisting Condition Limitations";

(e) Medicare supplement policies and certificates shall have a notice prominently printed on the first page of the policy or certificate or attached thereto stating in substance that the policyholder or certificate holder may return the policy or certificate within 30 days of its delivery and may have the premium refunded if, after examination of the policy or certificate, the insured person is not satisfied for any reason;

(f)(A) An issuer of health policies or certificates that provide hospital or medical expense coverage on an expense incurred or indemnity basis to a person eligible for Medicare shall provide to those applicants a Guide to Health Insurance for People with Medicare in the form developed jointly by the National Association of Insurance Commissioners and CMS and in a type size no smaller than 12 point type. Delivery of the Guide shall be made whether or not such policies or certificates are advertised, solicited or issued as Medicare supplement policies or certificates as defined in OAR 836-052-0119. Except in the case of direct response issuers, delivery of the Guide shall be made to the applicant at the time of application, and acknowledgment of receipt of the Guide shall be obtained by the issuer. Direct response issuers shall deliver the Guide to the applicant upon request but not later than at the time the policy is delivered.

(B) For the purposes of this rule, "form" means the language, format, type size, type proportional spacing, bold character and line spacing.

(2) The following notice requirements apply to all insurers providing Medicare supplement insurance:

(a) As soon as practicable, but no later than 30 days prior to the annual effective date of any Medicare benefit change, an issuer shall notify its policyholders and certificate holders of modification it has made to Medicare supplement insurance policies or certificates. The notice must be made in a format acceptable to the Director. The notice shall:

(A) Include a description of revisions to the Medicare program and a description of each modification made to the coverage provided under the Medicare supplement policy or certificate; and

(B) Inform each policyholder or certificate holder as to when any premium adjustment is to be made due to changes in Medicare.

(b) The notice of benefit modifications and any premium adjustments shall be in outline form and in clear and simple terms so as to facilitate comprehension;

(c) Notices under this rule shall not contain or be accompanied by any solicitation.

(3) MMA Notice Requirements. Issuers shall comply with any notice requirements of the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

(4) Each issuer shall provide an outline of coverage for Medicare supplement policies as follows:

(a) An issuer shall provide an outline of coverage to each applicant at the time the sales presentation is made to the prospective applicant and, except for direct response policies, shall obtain an acknowledgment of receipt of the outline of coverage from the applicant;

(b) If an outline of coverage provided at the time of the sales presentation and the Medicare supplement policy or certificate is issued on a basis that would require revision of the outline of coverage, a substitute outline of coverage properly describing the policy or certificate must accompany the policy or certificate when it is delivered. The revised outline of coverage shall contain the following statement, or similar language approved by the Director, in not less than twelve point type, immediately above the insurer's name: "Notice: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application and the coverage originally applied for has not been issued";

(c) The outline of coverage provided to applicants pursuant to this section consists of four parts; a cover page, premium information, disclosure pages and charts displaying the features of each benefit plan offered by the issuer. The outline of coverage shall be in the language and format prescribed in Exhibit 1;

(d) The outline of coverage may be designated by the insurer either as an outline of coverage or as a fact sheet.

(5) An issuer shall give notice regarding policies or certificates that are not Medicare supplement policies, as follows:

(a) Any health insurance policy, other than a Medicare supplement policy, a policy issued pursuant to a contract under Section 1876 of the federal Social Security Act (42 U.S.C. Section 1395 et seq.); any disability income policy or other policy identified in OAR 836-052-0114(4), issued for delivery in this state to persons eligible for Medicare shall notify insureds under the policy that the policy is not a Medicare supplement policy or certificate;

(b) The notice under subsection (a) of this section shall be printed on or attached to the first page of the outline of coverage delivered to insureds under the policy, or if no outline of coverage is delivered, to the first page of the policy or certificate delivered to insureds. The notice shall be in no less than 12 point type and shall contain the following language: "THIS (POLICY OR CERTIFICATE) IS NOT A MEDICARE SUPPLEMENT (POLICY OR CONTRACT). If you are eligible for Medicare, review the Guide to Health Insurance for People with Medicare available from the company";

(c) Applications provided to persons eligible for Medicare for the health insurance policies or certificates described in section (4)(a) of this rule shall disclose, using the applicable standard statement in Appendix C, the extent to which the policy duplicates Medicare. The disclosure statement shall be provided as part of, or together with, the application for the policy or certificate.

[ED. NOTE: Appendices and Exhibits referenced are not included in rule text. Click here for PDF copy of appendicies.]
[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 731.244, 743.683 & 743.685
Stats. Implemented: ORS 743.683, 743.685 & 743.686
Hist.: ID 1-1989(Temp), f. & cert. ef. 1-3-89; ID 5-1989, f. 6-30-89, cert. ef. 7-3-89; ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93; ID 9-1993, f. 9-28-93, cert. ef. 10-1-93; ID 5-1996, f. & cert. ef. 4-26-96; ID 9-1997, f. & cert. ef. 7-10-97; ID 21-1998(Temp), f. 12-8-98, cert. ef. 1-1-99 thru 6-25-99; ID 4-1999, f. & cert. ef. 4-29-99; ID 6-2001, f. & cert. ef. 5-22-01; ID 8-2001(Temp), f. 6-15-01, cert. ef. 6-18-01 thru 12-10-01; ID 11-2001, f. & cert. ef. 9-24-01; ID 10-2005, f. & cert. ef. 7-26-05; ID 7-2011, f. & cert. ef. 2-23-11

836-052-0165

Requirements for Application Forms, Replacement Coverage

(1) Application forms shall include the statements and questions set forth in this section designed to elicit information as to whether, as of the date of the application, the applicant currently has Medicare supplement, Medicare Advantage, Medicaid coverage or another health insurance policy or certificate in force or whether a Medicare supplement policy or certificate is intended to replace any other health insurance policy or certificate currently in force. A supplementary application or other form to be signed by the applicant and agent containing such statements and questions may be used. The statements and questions are as follows:

(a) Statements:

(A) You do not need more than one Medicare supplement policy.

(B) If you purchase this policy, you may want to evaluate your existing health coverage and decide if you need multiple coverages.

(C) You may be eligible for benefits under Medicaid and may not need a Medicare supplement policy.

(D) If, after purchasing this policy, you become eligible for Medicaid, the benefits and premiums under your Medicare supplement policy can be suspended, if requested, during your entitlement to benefits under Medicaid for 24 months. You must request this suspension within 90 days of becoming eligible for Medicaid. If you are no longer entitled to Medicaid, your suspended Medicare supplement policy (or, if that is no longer available, a substantially equivalent policy) will be reinstituted if requested within 90 days of losing Medicaid eligibility. If the Medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension.

(E) If you are eligible for, and have enrolled in a Medicare supplement policy by reason of disability and you later become covered by an employer or union-based group health plan, the benefits and premiums under your Medicare supplement policy can be suspended, if requested, while you are covered under the employer or union-based group health plan. If you suspend your Medicare supplement policy under these circumstances, and later lose your employer or union-based group health plan, your suspended Medicare supplement policy (or, if that is no longer available, a substantially equivalent policy) will be reinstituted, if requested within 90 days of losing your employer or union-based group health plan. If the Medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension.

(F) Counseling services may be available in your state to provide advice concerning your purchase of Medicare supplement insurance and concerning medical assistance through the state Medicaid program, including benefits as a qualified Medicare beneficiary (QMB) and a specified low income Medicare beneficiary (SLMB).

(b) Questions.

If you lost or are losing other health insurance coverage and received a notice from your prior insurer saying you were eligible for guaranteed issue of a Medicare supplement insurance policy, or that you had certain rights to buy such a policy, you may be guaranteed acceptance in ore or more of our Medicare supplement plans. Please include a copy of the notice from your prior insurer with your application. PLEASE ANSWER ALL QUESTIONS.

 

Please mark Yes or No below with an "X"

To the best of your knowledge,

(1)(a) Did you turn age 65 in the last six months?

Yes______ No__________

(b) Did you enroll in Medicare Part B in the last six months?

Yes______ No__________

(c) If yes, what is the effective date? _______________________

(2) Are you covered for medical assistance through the state Medicaid program?

(NOTE TO APPLICANT: If you are participating in a "Spend-Down Program" and have not met your "Share of Cost," please answer NO to this question.)

Yes______ No___________

If yes,

(a) Will Medicaid pay your premiums for this Medicare supplement policy?

Yes______ No__________

(b) Do you receive any benefits from Medicaid OTHER THAN payments toward your Medicare Part B premium?

Yes______ No__________

(3)(a) If you had coverage from any Medicare plan other than original Medicare within the past 63 days (for example, a Medicare Advantage plan, or a Medicare HMO or PPO), fill in your start and end dates below. If you are still covered under this plan, leave "END" blank.

START ___/___/___ END ___/___/___

(b) If you are still covered under the Medicare plan, do you intend to replace your current coverage with this new Medicare supplement policy?

Yes______ No__________

(c) Was this your first time in this type of Medicare plan?

Yes______ No__________

(d) Did you drop a Medicare supplement policy to enroll in the Medicare plan?

Yes______ No__________

(4)(a) Do you have another Medicare supplement policy in force?

Yes______ No__________

(b) If so, with what company, and what plan do you have (optional for Direct Mailers)?__________________________________________

(c) If so, do you intend to replace your current Medicare supplement policy with this policy?

Yes______ No__________

(5) Have you had coverage under any other health insurance within the past 63 days? (For example, an employer, union, or individual plan)

Yes______ No__________

(a) If so, with what company and what kind of policy?

___________________________________________

___________________________________________

___________________________________________

___________________________________________

(b) What are your dates of coverage under the other policy?

START ___/___/___ END ___/___/___

(If you are still covered under the other policy, leave "END" blank.)

(2) An agent shall list any other health insurance policies that the agent has sold to the applicant, and:

(a) List such policies sold that are still in force;

(b) List such policies sold in the past five years that are no longer in force.

(3) In the case of a direct response issuer, a copy of the application or supplemental form, signed by the applicant and acknowledged by the issuer, shall be returned to the applicant by the issuer upon delivery of the policy.

(4) Upon determining that a sale will involve replacement of Medicare supplement coverage, any issuer, other than a direct response issuer, or its agent, shall furnish the applicant, prior to issuance or delivery of the Medicare supplement policy or certificate, a notice regarding replacement of Medicare supplement coverage. One copy of the notice signed by the applicant and the agent, except when the coverage is sold without an agent, shall be provided to the applicant and an additional signed copy shall be retained by the issuer. A direct response issuer shall deliver to the applicant at the time of the issuance of the policy the notice regarding replacement of Medicare supplement coverage.

(5) The notice required by section (4) of this rule for an issuer, shall be provided in substantially the form shown in Exhibit 1 to this rule in no less than 12 point type.

(6) Paragraphs 1 and 2 of the replacement notice (applicable to preexisting conditions) may be deleted by an issuer if the replacement does not involve application of a new preexisting condition limitation.

[ED. NOTE: Exhibits referenced are available from the agency.]

Stat. Auth.: ORS 743.010 & 743.685
Stats. Implemented: ORS 743.010, 743.683 & 743.685
Hist.: ID 1-1989(Temp), f. & cert. ef. 1-3-89; ID 5-1989, f. 6-30-89, cert. ef. 7-3-89; ID 1-1990, f. 1-10-90, cert. ef. 4-1-90; ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1996, f. & cert. ef. 4-26-96; ID 9-1997, f. & cert. ef. 7-10-97; ID 8-2001(Temp), f. 6-15-01, cert. ef. 6-18-01 thru 12-10-01; ID 11-2001, f. & cert. ef. 9-24-01; ID 8-2005, f. 5-18-05, cert. ef. 8-1-05; ID 10-2005, f. & cert. ef. 7-26-05

836-052-0170

Filing Requirements for Advertising

An issuer shall provide to the Director a copy of any Medicare supplement advertisement intended for use in this state, whether through the written, radio or television medium, for review or approval by the Director to the extent it may be required under ORS 742.009 and other state law. Each advertisement shall comply with all applicable laws and rules of this state.

Stat. Auth.: ORS 731.244, ORS 743.010, ORS 743.013, ORS 743.680 - ORS 743.689 & ORS 746.240
Stats. Implemented: ORS 743.687
Hist.: ID 1-1989(Temp), f. & cert. ef. 1-3-89; ID 5-1989, f. 6-30-89, cert. ef. 7-3-89; ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92

836-052-0175

Standards for Marketing

(1) An issuer, directly or through its producers, shall:

(a) Establish marketing procedures to assure that any comparison of policies by its insurance producers will be fair and accurate;

(b) Establish marketing procedures to assure excessive insurance is not sold or issued;

(c) Display prominently by type, stamp or other appropriate means, on the first page of the policy, the following: "Notice to Buyer: This policy may not cover all of your medical expenses";

(d) Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for Medicare supplement insurance already has health insurance and the types and amounts of any such insurance;

(e) Establish auditable procedures for verifying compliance with this section.

(2) In addition to the practices prohibited under ORS Chapter 746, the following acts and practices are prohibited:

(a) Twisting, which includes knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies 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 to take out a policy of insurance with another insurer;

(b) High pressure tactics, which include the employing of any method of marketing having the effect of inducing or tending to induce the purchase of insurance through force, fright or threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance;

(c) Cold lead advertising, which is 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 an insurance producer or insurance company.

(3) Violation of any provision of section (2) of this rule is an unfair trade practice under ORS 746.240.

(4) The terms "Medicare Supplement," "Medigap," "Medicare Wrap-Around" and words of similar import shall not be used unless the policy is issued in compliance with OAR 836-052-0103 to 836-052-0194.

Stat. Auth.: ORS 731.244, 743.010, 743.013, 743.680 - 743.689 & 746.240
Stats. Implemented: ORS 743.010(1)(c), 743.010(2), 743.685(8) & 746.240
Hist.: ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 9-1997, f. & cert. ef. 7-10-97; ID 8-2005, f. 5-18-05, cert. ef. 8-1-05

836-052-0180

Appropriateness of Recommended Purchase and Excessive Insurance

(1) In recommending the purchase or replacement of any Medicare supplement policy or certificate, an agent shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement.

(2) Any sale of Medicare supplement coverage that will provide an individual more than one Medicare supplement policy or certificate is prohibited.

(3) An issuer shall not issue a Medicare supplement policy or certificate to an individual enrolled in Medicare Part C unless the effective date of the coverage is after the termination date of the individual's Part C coverage.

Stat. Auth.: ORS 731.244, 743.010, 743.013, 743.680 - 743.689 & 746.240
Stats. Implemented: ORS 743.010(1)(c), 743.010(2), 743.683(2) & 743.685(8)
Hist.: ID 1-1990, f. 1-10-90, cert. ef. 4-1-90, ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 8-2005, f. 5-18-05, cert. ef. 8-1-05; ID 10-2005, f. & cert. ef. 7-26-05

836-052-0185

Reporting of Multiple Policies

(1) On or before March 1 of each year, each issuer shall report to the Director the following information for every individual resident of this state for which the issuer has in force more than one Medicare supplement insurance policy or certificate:

(a) Policy and certificate number; and

(b) Date of issuance.

(2) The information required under section (1) of this rule must be grouped by individual policyholder.

(3) Each issuer shall report the information required under this rule on the reporting form prescribed in Exhibit 1 to this rule.

[ED. NOTE: Exhibits referenced in this rule are available from the agency.]

Stat. Auth.: ORS 731.244, ORS 743.010, ORS 743.013, ORS 743.680 - ORS 743.689 & ORS 746.240
Stats. Implemented: ORS 743.010(1)(c), ORS 743.010(2)
Hist.: ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 8-2001(Temp), f. 6-15-01, cert. ef. 6-18-01 thru 12-10-01; ID 11-2001, f. & cert. ef. 9-24-01

836-052-0190

Prohibition Against Preexisting Conditions, Waiting Periods, Elimination Periods and Probationary Periods in Replacement Policies and Certificates

(1) If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate, the replacing issuer shall waive any time periods applicable to preexisting conditions, waiting periods, elimination periods and probationary periods in the new Medicare supplement policy to the extent such a time period was spent under the original policy.

(2) If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate that has been in effect for at least six months, the replacing policy shall not provide any time period applicable to preexisting conditions, waiting periods, elimination periods and probationary periods.

Stat. Auth.: ORS 731.244, ORS 743.010, ORS 743.013, ORS 743.680 - ORS 743.689 & ORS 746.240
Stats. Implemented: ORS 743.010(1)(c), ORS 743.010(2), ORS 743.683(2) & ORS 743.685(8)
Hist.: ID 11-1990, f. 5-11-90, cert. ef. 9-1-90; ID 7-1992, f. & cert. ef. 5-8-92; ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93; ID 9-1993, f. 9-28-93, cert. ef. 10-1-93

836-052-0192

Prohibition Against Use of Genetic Information and Requests for Genetic Testing

(1) This section applies to all policies with policy years beginning on or after May 21, 2009.

(2) An issuer of a Medicare supplement policy or certificate shall not:

(a) Deny or condition the issuance or effectiveness of the policy or certificate including the imposition of any exclusion of benefits under the policy based on a pre-existing condition on the basis of the genetic information with respect to the individual; or

(b) Discriminate in the pricing of the policy or certificate including the adjustment of premium rates of an individual on the basis of the genetic information with respect to the individual.

(3) Nothing in section (2) of this rule shall be construed to limit the ability of an issuer, to the extent otherwise permitted by law, from

(a) Denying or conditioning the issuance or effectiveness of the policy or certificate or increasing the premium for a group based on the manifestation of a disease or disorder of an insured or applicant; or

(b) Increasing the premium for any policy issued to an individual based on the manifestation of a disease or disorder of an individual who is covered under the policy. In such case, the manifestation of a disease or disorder in one individual may not also be used as genetic information about other group members and to further increase the premium for the group.

(4) An issuer of a Medicare supplement policy or certificate shall not request or require an individual or a family member of the individual to undergo a genetic test.

(5) Section (4) of this rule shall not be construed to preclude an issuer of a Medicare supplement policy or certificate from obtaining and using the results of a genetic test in making a determination regarding payment as defined for the purposes of applying the regulations promulgated under part C of title XI and section 264 of the Health Insurance Portability and Accountability Act of 1996, as may be revised from time to time and consistent with section (2) of this rule.

(6) For purposes of carrying out section (5) of this rule, an issuer of a Medicare supplement policy or certificate may request only the minimum amount of information necessary to accomplish the intended purpose.

(7) Notwithstanding section (4) of this rule, an issuer of a Medicare supplement policy may request, but not require, that an individual or a family member of the individual undergo a genetic test if each of the following conditions is met:

(a) The request is made pursuant to research that complies with part 46 of title 45, Code of Federal Regulations, or equivalent Federal regulations, and any applicable state or local law or regulation for the protection of human subjects in research.

(b) The issuer clearly indicates to each individual, or in the case of a minor child, to the legal guardian of the child, to whom the request is made that:

(A) Compliance with the request is voluntary; and

(B) Non-compliance will have no effect on enrollment status or premium or contribution amounts.

(c) No genetic information collected or acquired under this section may be used for underwriting, determination of eligibility to enroll or maintain enrollment status, premium rates, or the issuance, renewal, or replacement of a policy or certificate.

(d) The issuer notifies the Secretary of Health and Human Services in writing that the issuer is conducting activities pursuant to the exception provided for under this section, including a description of the activities conducted.

(e) The issuer complies with such other conditions as the Secretary of Health and Human Services may by regulation require for activities conducted under this section.

(8) An issuer of a Medicare supplement policy or certificate shall not request, require, or purchase genetic information for underwriting purposes.

(9) An issuer of a Medicare supplement policy or certificate shall not request, require, or purchase genetic information with respect to any individual prior to such individual’s enrollment under the policy in connection with the enrollment.

(10) If an issuer of a Medicare supplement policy or certificate obtains genetic information incidental to the requesting, requiring, or purchasing of other information concerning any individual, such request, requirement, or purchase shall not be considered a violation of section (9) of this rule if such request, requirement, or purchase is not in violation of section (8) of this rule.

(11) As used in this rule:

(a) “Issuer of a Medicare supplement policy or certificate” includes third-party administrator, or other person acting for or on behalf of such issuer.

(b) “Family member” means, with respect to an individual, any other individual who is a first-degree, second-degree, third-degree, or fourth-degree relative of such individual.

(c)(A) “Genetic information” means, with respect to any individual, information about such individual’s genetic tests, the genetic tests of family members of such individual, and the manifestation of a disease or disorder in family members of such individual. “Genetic information” includes, with respect to any individual, any request for, or receipt of, genetic services, or participation in clinical research which includes genetic services, by such individual or any family member of such individual. Any reference to genetic information concerning an individual or family member of an individual who is a pregnant woman, includes genetic information of any fetus carried by such pregnant woman, or with respect to an individual or family member utilizing reproductive technology, includes genetic information of any embryo legally held by an individual or family member.

(B) “Genetic information” does not include information about the sex or age of any individual.

(d) “Genetic services” means a genetic test, genetic counseling (including obtaining, interpreting, or assessing genetic information), or genetic education.

(e) “Genetic test” means an analysis of human DNA, RNA, chromosomes, proteins, or metabolites, that detect genotypes, mutations, or chromosomal changes. “Genetic test” does not mean an analysis of proteins or metabolites that does not detect genotypes, mutations, or chromosomal changes; or an analysis of proteins or metabolites that is directly related to a manifested disease, disorder, or pathological condition that could reasonably be detected by a health care professional with appropriate training and expertise in the field of medicine involved.

(f) “Underwriting purposes” means,

(A) Rules for, or determination of, eligibility including enrollment and continued eligibility for benefits under the policy;

(B) The computation of premium or contribution amounts under the policy;

(C) The application of any pre-existing condition exclusion under the policy; and

(D) Other activities related to the creation, renewal, or replacement of a contract of health insurance or health benefits.

Stat. Auth.: ORS 743.683
Stats. Implemented: ORS 743.010 & 743.683
Hist.: ID 3-2009, f. 6-30-09, cert. ef. 7-1-09

836-052-0194

Separability

If any provision of OAR 836-052-0103 to 836-052-0194 or the application thereof to any person or circumstance is held to be invalid for any reason, the remainder of 836-052-0103 to 836-052-0194 shall not be affected thereby.

Stat. Auth.: ORS 731.244, 743.010, 743.013, 743.680 - 743.689 & 746.240
Stats. Implemented: ORS 174.040 & 731.244
Hist.: ID 7-1992, f. & cert. ef. 5-8-92

Long Term Care Insurance General Terms

836-052-0500

Statutory Authority; Applicability

(1) OAR 836-052-0500 to 836-052-0786 are adopted pursuant to the requirements and authority of ORS 731.244,742.003, 742.005, 742.023, 743.013, 743.655, 743.656 and 746.240.

(2) Except as otherwise specifically provided, OAR 836-052-0500 to 836-052-0786 apply to all long term care insurance policies, including qualified long term care contracts and life insurance policies that accelerate benefits for long term care delivered or issued for delivery in this state by insurers, fraternal benefit societies, nonprofit health, hospital and medical service corporations, prepaid health plans, health maintenance organizations and all similar organizations.

(3) OAR 836-052-0500 to 836-052-0786 do not apply to a provision in a life insurance policy, rider or endorsement that provides accelerated death benefits in a single lump-sum upon the occurrence of a single qualifying event as defined in ORS 743.154.

(4) OAR 836-052-0500 to 836-052-0786 apply to policies having indemnity benefits that are triggered by activities of daily living and sold as disability income insurance if:

(a) The benefits of the disability income policy are dependent upon or vary in amount based on the receipt of long-term care services;

(b) The disability income policy is advertised, marketed or offered as insurance for long-term care services; or

(c) Benefits under the policy may commence after the policyholder has reached normal retirement age for Social Security unless benefits are designed to replace lost income or pay for specific expenses other than long-term care services.

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.685 & 746.240
Stats. Implemented: ORS 742.003, 742.005, 743.650, 743.655 & 743.656
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; ID 1-1996, f. & cert. ef. 1-12-96; ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0508

Definitions

For the purpose of OAR 836-052-0500 to 836-052-0790:

(1) The following have the meanings given those terms in ORS 743.652:

(a) “Applicant;”

(b) “Benefit trigger;”

(c) “Certificate;”

(d) “Group long term care insurance;”

(e) “Long term care insurance;”

(f) “Policy;” and

(g) “Qualified long term care insurance.”

(2) The following definitions apply:

(a) “Independent review organization” means an organization qualified under OAR 836-052-0768(5) that conducts independent reviews of long term care benefit trigger decisions.

(b) “Licensed health care professional” means an individual qualified by education and experience in an appropriate field, to determine, by record review, an insured’s actual functional or cognitive impairment.

(c) "Qualified actuary" means a member in good standing of the American Academy of Actuaries.

(d) "Similar policy forms" means all of the long term care insurance policies and certificates issued by an insurer in the same long term care benefit classification as the policy form being considered. Certificates of groups that meet the definition of ORS 743.652(3)(a) are not considered similar to certificates or policies otherwise issued as long term care insurance, but are similar to other comparable certificates with the same long term care benefit classifications.

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.685 & 746.240, OL 2007 Ch. 9, 9a
Stats. Implemented: ORS 742.003, 742.005, 743.650, 743.655 & 743.656
Hist.: ID 10-2007, f. 12-3-07, cert. ef. 1-1-08; ID 3-2012, f. & cert. ef. 2-14-12

Long Term Care Insurance Policy Terms

836-052-0516

Policy Definitions

A long-term care insurance policy delivered or issued for delivery in this state shall not use the terms set forth in this rule unless the terms are defined in the policy according to the definitions in this rule and satisfy the requirements in OAR 836-052-0596:

(1) "Activities of daily living" means at least bathing, continence, dressing, eating, toileting and transferring.

(2) "Acute condition" means that the individual is medically unstable and requires frequent monitoring by medical professionals, such as physicians and registered nurses, in order to maintain the individual's health status.

(3) "Adult day care" means a program for six or more individuals, of social and health-related services provided during the day in a community group setting for the purpose of supporting frail, impaired elderly or other disabled adults who can benefit from care in a group setting outside the home.

(4) "Adult foster care" means any family home or facility in which residential care is provided in a homelike environment for five or fewer adults who are not related to the provider by blood or marriage.

(5) "Assisted living" services means services to persons with unique needs, such as, but not limited to, dementia or traumatic brain injury.

(6) "Bathing" means washing oneself by sponge bath; or in either a tub or shower, including the task of getting into or out of the tub or shower.

(7) "Cognitive impairment" means a deficiency in a person's short or long-term memory, orientation as to person, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.

(8) "Continence" means the ability to maintain control of bowel and bladder function or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene (including caring for catheter or colostomy bag).

(9) "Dressing" means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs.

(10) "Eating" means feeding oneself by getting food into the body from a receptacle (such as a plate, cup or table) or by a feeding tube or intravenously.

(11) "Hands-on assistance" means physical assistance (minimal, moderate or maximal) without which the individual would not be able to perform the activity of daily living.

(12) "Home care" services means medical and nonmedical services provided to ill, disabled or infirm persons in their residences. Such services may include homemaker services, assistance with activities of daily living and respite care services.

(13) "Medicare" means "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.

(14) "Mental or nervous disorder" shall not be defined to include more than neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder.

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

(16) "Residential care" means the provision of room and board and services that assist the resident in activities of daily living, such as assistance with bathing, dressing, grooming, eating, medication management, money management or recreation.

(17) "Skilled nursing care," "personal care," "home care," "specialized care," "assisted living care" and other services shall be defined in relation to the level of skill required, the nature of the care and the setting in which care must be delivered.

(18) "Toileting" means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.

(19) "Transferring" means moving into or out of a bed, chair or wheelchair.

(20) All providers of services, including but not limited to "skilled nursing facility," "extended care facility," "convalescent nursing home," "personal care facility," "specialized care provider," "assisted living facility" and "home care agency," shall be defined in relation to the services and facilities required to be available and the licensure, certification, registration or degree status of those providing or supervising the services. When the definition requires that the provider be appropriately licensed, certified or registered, it shall also state what requirements a provider must meet in lieu of licensure, certification or registration when the state in which the service is to be furnished does not require a provider of these services to be licensed, certified or registered, or when the state licenses, certifies or registers the provider of services under another name.

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
Hist.: ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0526

Policy Practices and Provisions

(1) Renewability. The terms "guaranteed renewable" and "noncancellable" shall not be used in any individual long-term care insurance policy without further explanatory language in accordance with the disclosure requirements of OAR 836-052-0556. In addition:

(a) A policy issued to an individual shall not contain renewal provisions other than "guaranteed renewable" or "noncancellable."

(b) The term "guaranteed renewable" may be used only when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums and when the insurer has no unilateral right to make any change in any provision of the policy or rider while the insurance is in force, and cannot decline to renew, except that rates may be revised by the insurer on a class basis.

(c) The term "noncancellable" may be used only when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums and during which period the insurer has no right to unilaterally make any change in any provision of the insurance or in the premium rate.

(d) The term "level premium" may be used only when the insurer does not have the right to change the premium.

(e) In addition to the other requirements of this subsection, a qualified long-term care insurance contract shall be guaranteed renewable, within the meaning of Section 7702B(b)(1)(C) of the Internal Revenue Code of 1986, as amended.

(2) Limitations and Exclusions. A policy may not be delivered or issued for delivery in this state as long-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 as allowed in OAR 836-052-0546(4);

(b) Alcoholism and drug addiction;

(c) Illness, treatment or medical condition arising out of:

(A) War or act of war (whether declared or undeclared);

(B) Participation in a felony, riot or insurrection;

(C) Service in the armed forces or units auxiliary thereto;

(D) Suicide (sane or insane), attempted suicide or intentionally self-inflicted injury; or

(E) Aviation (this exclusion applies only to non-fare-paying passengers).

(d) 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;

(e) Expenses for services or items available or paid under another long-term care insurance or health insurance policy;

(f) In the case of a qualified long-term care insurance contract, expenses for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act or would be so reimbursable but for the application of a deductible or coinsurance amount.

(g)(A) This subsection does not prohibit exclusions and limitations by type of provider. However, no long term care issuer may deny a claim because services are provided in a state other than the state of policy issued under the following conditions:

(i) When the state other than the state of policy issue does not have the provider licensing, certification or registration required in the policy, but when the provider satisfies the policy requirements outlined for providers in lieu of licensure, certification or registration; or

(ii) When the state other than the state of policy issue licenses, certifies or registers the provider under another name.

(B) For the purpose of this subsection, "state of policy issue" means the state in which the individual policy or certificate was originally issued.

(h) This section does not prohibit territorial limitations.

(3) Extension of Benefits. Termination of long-term care insurance shall be without prejudice to any benefits payable for institutionalization if the institutionalization began while the long-term care insurance was in force and continues without interruption after termination. The extension of benefits beyond the period the long-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.

(4) Continuation or conversion of coverage is governed as follows:

(a) Group long-term care insurance issued in this state on or after September 1, 2005 shall provide covered individuals with a basis for continuation or conversion of coverage.

(b) For the purposes of this section, "a basis for continuation of coverage" means a policy provision that maintains coverage under the existing group policy when the coverage would otherwise terminate and that is subject only to the continued timely payment of premium when due. Group policies that restrict provision of benefits and services to, or contain incentives to use certain providers or facilities may provide continuation benefits that are substantially equivalent to the benefits of the existing group policy. The Director shall make a determination as to the substantial equivalency of benefits, and in doing so, shall take into consideration the differences between managed care and non-managed care plans, including, but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity.

(c) For the purposes of this section, "a basis for conversion of coverage" means a policy provision that an individual whose coverage under the group policy would otherwise terminate or has been terminated for any reason, including discontinuance of the group policy in its entirety or with respect to an insured class, and who has been continuously insured under the group policy (and any group policy that it replaced), for at least six months immediately prior to termination, shall be entitled to the issuance of a converted policy by the insurer under whose group policy the individual is covered, without evidence of insurability.

(d) For the purposes of this section, "converted policy" means an individual policy of long-term care insurance providing benefits identical to or benefits determined by the Director to be substantially equivalent to or in excess of those provided under the group policy from which conversion is made. When the group policy from which conversion is made restricts provision of benefits and services to, or contains incentives to use certain providers or facilities, the Director, in making a determination as to the substantial equivalency of benefits, shall take into consideration the differences between managed care and non-managed care plans, including, but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity.

(e) Written application for the converted policy shall be made and the first premium due, if any, shall be paid as directed by the insurer not later than 31 days after termination of coverage under the group policy. The converted policy shall be issued effective on the day following the termination of coverage under the group policy, and shall be renewable annually.

(f) Unless the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured's age at inception of coverage under the group policy from which conversion is made. When the group policy from which conversion is made replaces previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured's age at inception of coverage under the group policy replaced.

(g) Continuation of coverage or issuance of a converted policy shall be mandatory, except when:

(A) Termination of group coverage resulted from an individual's failure to make any required payment of premium or contribution when due; or

(B) The terminating coverage is replaced not later than 31 days after termination by group coverage effective on the day following the termination of coverage:

(i) That provides benefits identical to or benefits determined by the Director to be substantially equivalent to or in excess of those provided by the terminating coverage; and

(ii) The premium for which is calculated in a manner consistent with the requirements of subsection (f) of this section.

(h) Notwithstanding any other provision of this rule, a converted policy issued to an individual who at the time of conversion is covered by another long-term care insurance policy that provides benefits on the basis of incurred expenses may contain a provision that results in a reduction of benefits payable if the benefits provided under the additional coverage, together with the full benefits provided by the converted policy, would result in payment of more than 100 percent of incurred expenses. The provision shall be included in the converted policy only if the converted policy also provides for a premium decrease or refund that reflects the reduction in benefits payable.

(i) The converted policy may provide that the benefits payable under the converted policy, together with the benefits payable under the group policy from which conversion is made, shall not exceed those that would have been payable had the individual's coverage under the group policy remained in force and effect.

(j) Notwithstanding any other provision of this rule, an insured individual whose eligibility for group long-term care coverage is based upon the individual's relationship to another person shall be entitled to continuation of coverage under the group policy upon termination of the qualifying relationship by death or dissolution of marriage.

(k) For the purposes of this rule, a "managed-care plan" is a health care or assisted living arrangement designed to coordinate patient care or control costs through utilization review, case management or use of specific provider networks.

(5) Discontinuance and Replacement. If a group long-term care insurance policy is replaced by another group long-term care insurance 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; and

(b) Shall not vary or otherwise depend on the individual's health or disability status, claim experience or use of long-term care services.

(6)(a) The premium charged to an insured shall not increase due to either:

(A) The increasing age of the insured at ages beyond 65; or

(B) The duration the insured has been covered under the policy.

(b) The purchase of additional coverage shall not be considered a premium rate increase, but for purposes of the calculation required under, the portion of the premium attributable to the additional coverage shall be added to and considered part of the initial annual premium.

(c) A reduction in benefits shall not be considered a premium change, but for purpose of the calculation required under, the initial annual premium shall be based on the reduced benefits.

(7) Electronic enrollment for group policies is governed by the following provisions:

(a) In the case of a group defined in ORS 743.652 (3)(a), any requirement that a signature of an insured be obtained by an insurance producer or insurer shall be deemed satisfied if:

(A) The consent is obtained by telephonic or electronic enrollment by the group policyholder or insurer. A verification of enrollment information shall be provided to the enrollee;

(B) The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure the accuracy, retention and prompt retrieval of records; and

(C) The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure that the confidentiality of individually identifiable information and "privileged information" as defined by ORS 746.600, is maintained.

(b) The insurer shall make available, upon request of the Director, records that will demonstrate the insurer's ability to confirm enrollment and coverage amounts.

(8) Request for termination of coverage. When the policyholder, insured or beneficiary requests termination of coverage, any unearned premiums for that insured shall be promptly refunded to the payee or beneficiary.

(9) This section applies to rate increases approved by the Director on or after January 1, 2008 for policies that were delivered or issued for delivery in this state before March 1, 2006. An insurer may offer to policyholders affected by a rate increase a contingent benefit on lapse under the terms of OAR 836-052-0746, the right to reduce coverage and lower premiums under the terms of 836-052-0740 or an alternative method approved by the Director for mitigating the rate increase. If the insurer does not offer one or the other option to policyholders:

(a) The Director may not approve the rate increase if the increase is greater than a cumulative total of 40 percent during any three-year period submitted; and

(b) The total amount of any approved rate increase must be spread equally over each of the three years. The Director may waive this restriction if the insurer demonstrates to the Director's satisfaction that the solvency of the plan or insurer is threatened.

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
Hist.: ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0530 [Renumbered to 836-052-0666]

836-052-0531

Long Term Care Insurance Partnership Program

(1) As used in this rule, "qualified long term care insurance partnership policy" or "partnership policy" means a long term care insurance policy that meets all of the following requirements:

(a) The policy was issued on or after January 1, 2008 or exchanged as provided in section (8) of this rule on or after January 1, 2008, and covers an insured who was a resident of this state or of another state that has entered into a reciprocal agreement with this state when coverage first became effective under the policy.

(b) The policy is a qualified long term care insurance policy.

(c) The policy meets all of the applicable requirements of ORS 743.650 to 743.656 and OAR 836-052-500 to 836-052-0786 and the requirements of the National Association of Insurance Commissioners long term care insurance model act and model regulation as those requirements are set forth in sec. 1917(b)(5)(A) of the Social Security Act (42 USC sec. 1396p(b)(5)(A)).

(d) The policy provides the following inflation protections:

(A) If the policy is sold to an individual who has not attained age 61 as of the date of purchase, the policy shall provide a compound annual inflation protection that is at least equivalent to the option for inflation protection in OAR 836-052-0616(1)(a).

(B) If the policy is sold to an individual who has attained age 61 but has not attained age 76 as of the date of purchase, the policy shall provide an inflation protection that is at least equivalent to an option for inflation protection in OAR 836-052-0616.

(C) If the policy is sold to an individual who has attained age 76 as of the date of purchase, the policy may provide inflation protection, but must at least comply with the provisions for inflation protections in OAR 836-052-0616.

(2) An insurer may use as one means of providing inflation protection under section (1)(d) of this rule a guarantee of automatic benefit increases of not less than an annual percentage change in the Consumer Price Index or an alternative index approved by the Director. If this inflation protection is included in a policy sold to a person who has not attained age 61, the index adjustments must be made on a compounding basis.

(3) An insurer or insurance producer soliciting or offering to sell a policy that is intended to qualify as a partnership policy shall provide to each prospective applicant the notice prescribed in Exhibit 1 to this rule, indicating the requirements and benefits of a partnership policy. The notice shall be provided with the required Outline of Coverage.

(4) A partnership policy or certificate delivered or issued for delivery in this state shall include a Partnership Disclosure Notice prescribed in Exhibit 2 or 3 to this rule as appropriate, explaining the benefits associated with a partnership policy or certificate and indicating that, at the time issued, the policy or certificate is a qualified state long term care insurance partnership policy or certificate.

(5) When an insurer is made aware that a policyholder has initiated action that will result in the loss of partnership status, the insurer shall provide an explanation of how such action impacts the insured in writing. The policyholder shall also be advised how to retain partnership status, if retention is possible. If a partnership policy subsequently loses partnership status, the insurer shall explain to the policyholder in writing the reason for the loss of status.

(6) Each insurer offering a partnership policy shall provide regular reports to the United States Secretary of Health and Human Services in accordance with regulations of the Secretary that include notification of the date benefits were paid, the amount paid, the date the policy terminates, and such other information as the Secretary determines may be appropriate to the administration of partnership policies.

(7) An insurer must file a long term care insurance policy for approval for use as a partnership policy.

(8) A long term care insurance policy that is not a qualified partnership policy may be exchanged for a qualified partnership policy, subject to underwriting criteria and any increased premium, as provided in this section. The qualified policy so exchanged is treated as newly issued and as such is eligible for partnership status. A rider, endorsement or change in schedule page that is made to a policy issued prior to January 1, 2008, but after February 8, 2006 for the purpose of meeting the requirements of this rule may be treated as giving rise to an exchange.

(9) At the request of the insured or an authorized representative of the insured, an insurer shall provide to the insured or representative a copy of the Approved Long Term Care Partnership Program Policy Summary prescribed in Exhibit 4 to this rule.

[ED. NOTE: Exhibits referenced are available from the agency.]

Stat. Auth.: ORS 731.244, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 731.244, 743.650, 743.653, 743.655, 743.656, 746.240
Hist.: ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0535 [Renumbered to 836-052-0586]

836-052-0536

Unintentional Lapse

Each insurer offering long-term care insurance shall, as a protection against unintentional lapse, comply with the following:

(1)(a) Notice before lapse or termination. An individual long-term care insurance policy or certificate shall not be issued until the insurer has received from the applicant either a written designation of at least one person, in addition to the applicant, who is to receive notice of lapse or termination of the policy or certificate for nonpayment of premium, or a written waiver dated and signed by the applicant electing not to designate one or more additional persons to receive notice. The applicant has the right to designate at least one person who is to receive the notice of termination, in addition to the insured. Designation shall not constitute acceptance of any liability on the third party for services provided to the insured. The form used for the written designation must provide space clearly designated for listing at least one person. The designation shall include each person's full name and home address. In the case of an applicant who elects not to designate an additional person, the waiver shall state: "Protection against unintended lapse. I understand that I have the right to designate at least one person other than myself to receive notice of lapse or termination of this long-term care insurance policy for nonpayment of premium. I understand that notice will not be given until thirty (30) days after a premium is due and unpaid. I elect NOT to designate a person to receive this notice." The insurer shall notify the insured of the right to change this written designation no less often than once every two years.

(b) When the policyholder or certificate holder pays premium for a long-term care insurance policy or certificate through a payroll or pension deduction plan, the requirements contained in subsection (a) of this section need not be met until 60 days after the policyholder or certificate holder is no longer on such a payment plan. The application or enrollment form for such policies or certificates shall clearly indicate the payment plan selected by the applicant.

(c) Lapse or termination for nonpayment of premium. An individual long-term care insurance policy or certificate shall not lapse or be terminated for nonpayment of premium unless the insurer, at least 30 days before the effective date of the lapse or termination, has given notice to the insured and to those persons designated pursuant to subsection (a) of this section, at the address provided by the insured for purposes of receiving notice of lapse or termination. Notice shall be given by first class United States mail, postage prepaid. Notice may not be given until 30 days after a premium is due and unpaid. Notice shall be deemed to have been given as of five days after the date of mailing.

(2) Reinstatement. In addition to the requirement in section (1)(a) of this rule, a long-term care insurance policy or certificate shall include a provision that provides for reinstatement of coverage in the event of lapse if the insurer is provided proof that the policyholder or certificate holder was cognitively impaired or had a loss of functional capacity before the grace period contained in the policy expired. This option shall be available to the insured if requested within five months after termination and shall allow for the collection of past due premium, when appropriate. The standard of proof of cognitive impairment or loss of functional capacity shall not be more stringent than the benefit eligibility criteria on cognitive impairment or the loss of functional capacity contained in the policy and certificate.

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 731.244,742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655 & 743.656, 746.240
Hist.: ID 3-2005, f. & cert. ef. 3-1-05

836-052-0545 [Renumbered to 836-052-0656]

836-052-0546

Required Policy Provisions

(1) Renewability. Each individual long-term care insurance policy shall contain a renewability provision. The following requirements apply to such a provision:

(a) The provision shall be appropriately captioned, shall appear on the first page of the policy and shall clearly state that the coverage is guaranteed renewable or noncancellable. This provision does not apply to a policy that does not contain a renewability provision, and under which the right to nonrenew is reserved solely to the policyholder.

(b) A long-term care insurance policy or certificate, other than one in which the insurer does not have the right to change the premium, shall include a statement that premium rates may change.

(2) Riders and Endorsements. Except for riders or endorsements by which the insurer effectuates a request made in writing by the insured under an individual long-term care insurance policy, all riders or endorsements added to an individual long-term care insurance policy after date of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the policy shall require signed acceptance by the individual insured. After the date of policy issue, any rider or endorsement that increases benefits or coverage with a concomitant increase in premium during the policy term must be agreed to in a writing that is signed by the insured, unless the increased benefits or coverage is required by law. When a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy, rider or endorsement.

(3) Payment of Benefits. A long-term care insurance policy 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 these terms and an explanation of the terms in its accompanying outline of coverage.

(4) Limitations. If a long-term care insurance policy or certificate contains any limitations with respect to preexisting conditions, the limitations of preexisting condition shall appear as a separate paragraph of the policy or certificate and shall be labeled as "Preexisting Condition Limitations."

(5) Other limitations or conditions on eligibility for benefits. A long-term care insurance policy or certificate containing any limitations or conditions for eligibility other than those prohibited in ORS 743.655(5) shall set forth a description of the limitations or conditions, including any required number of days of confinement, in a separate paragraph of the policy or certificate and shall label the paragraph "Limitations or Conditions on Eligibility for Benefits."

(6) Disclosure of Tax Consequences. With regard to life insurance policies that provide an accelerated benefit for long-term care, a disclosure statement is required at the time of application for the policy or rider and at the time the accelerated benefit payment request is submitted that receipt of these accelerated benefits may be taxable and that assistance should be sought from a personal tax advisor. The disclosure statement shall be prominently displayed on the first page of the policy or rider and any other related documents. This section does not apply to qualified long-term care insurance contracts.

(7) Benefit Triggers. Activities of daily living and cognitive impairment shall be used to measure an insured's need for long term care, shall be described in the policy or certificate in a separate paragraph and shall be labeled "Eligibility for the Payment of Benefits." Any additional benefit triggers shall also be explained in the same paragraph. If these triggers differ for different benefits, explanation of the trigger shall accompany each benefit description. If an attending physician or other specified person must certify a certain level of functional dependency in order to be eligible for benefits, this requirement too shall be specified.

(8) A qualified long-term care insurance contract shall include a statement in the policy and in the outline of coverage as contained in OAR 836-052-0776 that the policy is intended to be a qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended.

(9) A nonqualified long-term care insurance contract shall include a statement in the policy and in the outline of coverage as contained in OAR 836-052-0776 that the policy is not intended to be a qualified long-term care insurance contract.

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
Hist.: ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0550 [Renumbered to 836-052-0686]

836-052-0556

Required Disclosure of Rating Practices to Consumers

(1) This rule applies as follows:

(a) Except as provided in subsection (b) of this section, this rule applies to any long term care policy or certificate issued in this state on or after March 1, 2006.

(b) For certificates issued on or after March 1, 2005 under a group long-term care insurance policy as defined in ORS 743.652 (3)(a), which policy was in force on March 1, 2005, the provisions of this rule shall apply on the policy anniversary following March 1, 2006.

(2) Other than policies for which no applicable premium rate or rate schedule increases can be made, an insurer shall provide all of the information listed in this section to the applicant at the time of application or enrollment, unless the method of application does not allow for delivery at that time. In such a case, the insurer shall provide all of the information listed in this rule to the applicant not later than at the time of delivery of the policy or certificate. The information is as follows:

(a) A statement that the policy may be subject to rate increases in the future;

(b) An explanation of potential future premium rate revisions and the policyholder's or certificate holder's option in the event of a premium rate revision.

(c) The premium rate or rate schedules applicable to the applicant that will be in effect until a request is made for an increase.

(d) A general explanation for applying premium rate or rate schedule adjustments, which shall include:

(A) A description of when premium rate or rate schedule adjustments will be effective (e.g. next anniversary date, next billing date, etc.); and

(B) The right to a revised premium rate or rate schedule as provided in subsection (c) of this section if the premium rate or rate schedule is changed.

(e)(A) Information regarding each premium rate increase on this policy form or similar policy forms over the past ten years for this state or any other state that at a minimum identifies

(i) The policy forms for which premium rates have been increased.

(ii) The calendar years when the form was available for purchase; and

(iii) The amount or percent of each increase. The percentage may be expressed as a percentage of the premium rate prior to the increase and may also be expressed as minimum and maximum percentages if the rate increase is variable by rating characteristics.

(B) The insurer may provide additional explanatory information related to the rate increases.

(C) An insurer shall have the right to exclude from the disclosure premium rate increases that apply only to blocks of business acquired from other nonaffiliated insurers or the long term care policies acquired from other nonaffiliated insurers when those increases occurred prior to the acquisition.

(D) If an acquiring insurer files for a rate increase on a long term care insurance policy form acquired from a nonaffiliated insurer or a block of policy forms acquired from a nonaffiliated insurer on or before the later of the effective date of this rule or the end of a 24-month period following the acquisition of the block or policies, the acquiring insurer may exclude that rate increase from the disclosure. The nonaffiliated selling insurer shall include the disclosure of that rate increase in accordance with paragraph (A) of this subsection.

(E) If the acquiring insurer in paragraph (D) of this subsection files for a subsequent rate increase whether within the 24-month period or later, the acquiring insurer must make all disclosures required by this section, on the same policy form acquired from nonaffiliated insurer or block of policy forms acquired from nonaffiliated insurers referenced in paragraph (D) of this subsection, including disclosure of the earlier rate increase referenced in paragraph (A) of this subsection.

(3) An applicant shall sign an acknowledgement at the time of application, unless the method of application does not allow for signature at that time, that the insurer made the disclosure required under subsection (2)(a) and (e) of this section. If owing to the method of application the applicant cannot sign an acknowledgement at the time of application, the applicant shall sign an acknowledgement no later than at the time of delivery of the policy or certificate.

(4) An insurer shall use the forms in Exhibits 1 and 2 to comply with sections (2) and (3) of this rule.

(5) An insurer shall provide notice of an upcoming premium rate schedule increase to all policyholders or certificate holders, if applicable, at least 45 days prior to the implementation of the premium rate schedule increase by the insurer. The notice shall include the information required by section (2) of this rule when the rate increase is implemented.

[ED. NOTE: Exhibits referenced are available from the agency.]

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
Hist.: ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

Long Term Care Insurance Practices

836-052-0566

Initial Rate Filing Requirements

(1) This rule applies to any long-term care insurance policy issued in this state on or after March 1, 2006.

(2) An insurer shall provide the following information to the Director for prior approval before making a long-term care insurance form available for sale:

(a) A copy of the disclosure documents required in OAR 836-052-0556; and

(b) An actuarial certification consisting of at least the following:

(A) A statement that the initial premium rate schedule is sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated;

(B) A statement that the policy design and coverage provided have been reviewed and taken into consideration;

(C) A statement that the underwriting and claims adjudication processes have been reviewed and taken into consideration;

(D) A complete description of the basis for contract reserves that are anticipated to be held under the form, to include:

(i) Sufficient detail or sample calculations provided so as to have a complete depiction of the reserve amounts to be held;

(ii) A statement that the assumptions used for reserves contain reasonable margins for adverse experience;

(iii) A statement that the net valuation premium for renewal years does not increase except for attained-age rating when permitted; and

(iv) A statement that the differences between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses; or if such a statement cannot be made, a complete description of the situations in which this does not occur, as follows:

(I) An aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship;

(II) If the gross premiums for certain age groups appear to be inconsistent with this requirement, the Director may request a demonstration under section (3) of this rule, based on a standard age distribution; and

(E)(i) A statement that the premium rate schedule is not less than the premium rate schedule for existing similar policy forms also available from the insurer except for reasonable differences attributable to benefits; or

(ii) A comparison of the premium schedules for similar policy forms that are currently available from the insurer with an explanation of the differences.

(3) An insurer shall provide an actuarial demonstration showing that benefits are reasonable in relation to premiums. The actuarial demonstration shall include either premium and claims experience on similar policy forms adjusted for any premium and benefit differences, or relevant and credible data from other studies, or both.

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
Hist.: ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0575 [Renumbered to 836-052-0736]

836-052-0576

Prohibition Against Post-Claims Underwriting, Applications

(1) Each application for a long-term care insurance policy, rider or certificate, except those that are guaranteed issue, shall contain clear and unambiguous questions designed to ascertain the health condition of the applicant.

(2) If an application for long-term care insurance contains a question asking whether the applicant has had medication prescribed by a physician, it must also ask the applicant to list the medication that has been prescribed;

(3) If the medications listed in the application were known by the insurer, or should have been known by the insurer at the time of application, to be directly related to a medical condition for which coverage would otherwise be denied, the policy, rider or certificate shall not be rescinded for that condition.

(4) Except for policies or certificates that are guaranteed issue:

(a) The following language shall be set out conspicuously and in close conjunction with the applicant's signature block on an application for a long-term care insurance policy, rider or certificate: Caution: If your answers on this application are incorrect or untrue, (insurer) has the right to deny benefits or rescind your policy.

(b) The following language, or language substantially similar to the following, shall be set out conspicuously on the long-term care insurance policy, rider or certificate at the time of delivery: Caution: The issuance of this long-term care insurance (policy) (rider) (certificate) is based upon your responses to the questions on your application. A copy of your (application) (enrollment form) (is enclosed) (was retained by you when your applied). If your answers are incorrect or untrue, the insurer has the right to deny benefits or rescind your policy. 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).

(5) Prior to issuance of a long-term care policy, rider or certificate to an applicant age 80 or older, the insurer shall obtain one or more of the following:

(a) A report of physical examination;

(b) An assessment of functional capacity;

(c) An attending physician's statement;

(d) Copies of medical records.

(6) A copy of the completed application or enrollment form, whichever is applicable, shall be delivered to the insured not later than the time of delivery of the policy, rider or certificate unless it was retained by the applicant at the time of application.

(7) Every insurer or other entity selling long-term care insurance benefits shall maintain a record of all rescissions of policies, riders and certificates, both state- and country-wide, except those that the insured voluntarily effectuated, and shall annually furnish this information to the Director in the format prescribed in Exhibit 1 or similar form approved by the Director.

[ED. NOTE: Exhibits referenced are available from the agency.]

Stat. Auth.: ORS 731, 742 & 743
Stats. Implemented: ORS 743.655(10)(a)
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; Renumbered from 836-052-0645, ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0580 [Renumbered to 836-052-0606]

836-052-0583 [Renumbered to 836-052-0596]

Long Term Care Insurance
Benefits and Service Standards

836-052-0586

Minimum Standards for Home Health and Community Care Benefits in Long-Term Care Insurance Policies

(1) A long-term care insurance policy, certificate or rider that provides benefits for home care services or community care services may not limit or exclude those benefits:

(a) By requiring that the insured or claimant would need care in a skilled nursing facility if home care services were not provided;

(b) By requiring that the insured or claimant first or simultaneously receive nursing or therapeutic services, or either service or simultaneously receive both services, in a home, community, or institutional setting before home care services are covered;

(c) By limiting eligible services to services provided by registered nurses or licensed practical nurses;

(d) By requiring that a nurse or therapist provide services covered by the policy when the services can be provided by a home care aide or other licensed or certified home care worker acting within the scope of the licensure or certification;

(e) By requiring that the insured or claimant have an acute condition before home care services are covered;

(f) By excluding coverage for personal care services provided by a home care aide;

(g) By requiring that the provision of home care services be at a level of certification or licensure greater than that required by the eligible service;

(h) By limiting benefits to services provided by Medicare-certified agencies or providers; or

(i) By excluding coverage for adult day care services.

(2) A provision in a long-term care insurance policy, certificate or rider for home care or community care services shall provide total home care or community care coverage that is a dollar amount equivalent to at least one-half of one year's coverage available for nursing home benefits under the policy, certificate or rider, at the time covered home care or community care services are being received. This requirement does not apply to policies, certificates or riders issued to residents of continuing care retirement communities.

(3) Home care coverage may be applied to the nonhome care benefits provided in the policy, certificate or rider when determining maximum coverage under the terms of the policy, certificate or rider.

Stat. Auth.: ORS 731, 742 & 743
Stats. Implemented: ORS 743.655(1)(a) & 743.656
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; Renumbered from 836-052-0535, ID 3-2005, f. & cert. ef. 3-1-05

836-052-0588 [Renumbered to 836-052-0646]

836-052-0596

Standards for Covered Services

This rule establishes standards for covered services for the purpose of payment of benefits pursuant to ORS 743.656. An insurer shall not define the covered services more restrictively than the following minimum standards, or similar standards found by the Director to be substantially as favorable to the consumer:

(1) Nursing home services, when provided to the insured in this state, include services provided in or by a nursing home licensed under ORS 678.710 to 678.840. When provided to the insured outside this state, nursing home services include services provided in or by a nursing home in the other state. The nursing home must be licensed by the other state if so required by a similar licensing or other regulatory program;

(2) Assisted living services, when provided to the insured in this state, include those services provided in a facility or by a person licensed or otherwise regulated by this state to provide assisted living services as that term is defined in OAR 411-056-0005. When the services are provided to the insured outside this state, the provider or providing facility must be licensed by the other state if so required by a similar licensing or other regulatory program;

(3) Home care services, regardless of the state in which they are provided, include service provided in the insured's own home rather than a facility such as an assisted living facility or adult foster care facility;

(4) Adult foster care services, when provided to the insured in this state, include those services that are provided in an adult foster home pursuant to a license issued under ORS 443.705 to 443.825. When the services are provided to the insured outside this state, the provider or providing facility must be licensed by the other state if so required by a similar licensing or other regulatory program; and

(5) Services through a residential care facility, when provided to the insured in this state, include those services provided in a facility or by a person licensed or otherwise regulated by this state to provide services through a residential care facility as that term is defined in ORS 443.400. When the services are provided to the insured outside this state, the provider or providing facility must be licensed by the other state if so required by a similar licensing or other regulatory program.

Stat. Auth.: ORS 731.244 & 743.656
Stats. Implemented: ORS 743.656
Hist.: ID 9-1991, f. 12-24-91, cert. ef. 1-1-92; Renumbered from 836-052-0583, ID 3-2005, f. & cert. ef. 3-1-05

836-052-0600 [Renumbered to 836-052-0776]

836-052-0605 [Renumbered to 836-052-0716]

836-052-0606

Use and Definition of "Home" or Similar Wording

A long-term care insurance policy that defines "home" or uses similar wording to refer to the residence of the insured shall define or use wording that means or refers to the principal place of residence for the insured, whether a private home, a foster home, congregate care or assisted living facility or other place in a community setting, other than a licensed nursing facility.

Stat. Auth.: ORS 731, 742 & 743
Stats. Implemented: ORS 743.655(1)(a) & 743.656
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; Renumbered from 836-052-0580, ID 3-2005, f. & cert. ef. 3-1-05

836-052-0610 [Renumbered to 836-052-0786]

836-052-0615 [Renumbered to 836-052-0626]

836-052-0616

Requirement to Offer Inflation Protection

(1) An insurer may not offer a long-term care insurance policy unless the insurer also offers to the policyholder, in addition to any other inflation protection offered by the insurer, the option to purchase a policy that provides for benefit levels to increase with benefit maximums or reasonable durations that are meaningful to account for reasonably anticipated increases in the costs of long-term care services covered by the policy. An insurer must offer to each policyholder, at the time of purchase, the option to purchase a policy with an inflation protection feature no less favorable than a feature that does one of the following:

(a) Increases benefit levels annually in a manner so that the increases are compounded annually at a rate not less than three percent.

(b) Guarantees the insured individual periodically increased benefit levels without having to provide evidence of insurability or health status, unless the policyholder declines a periodic increase. The amount of the additional benefit shall be no less than the difference between the existing policy benefit and that benefit compounded annually at a rate of at least three percent for the period beginning with the purchase of the existing benefit and extending until the year in which the offer is made. The insurer shall notify the policyholder, at each periodic increase, that declining an inflation increase under this subsection will imperil the policy's partnership status.

(c) Covers a specified percentage of actual or reasonable charges and does not include a maximum specified indemnity amount or limit.

(2) When the policy is issued to a group, the required offer in section (1) of this rule shall be made to the group policyholder, except that if the policy is issued to a group defined in ORS 743.652 (3)(d) other than to a continuing care retirement community, the offering shall be made to each proposed certificate holder.

(3) The offer in section (1) of this section shall not be required of life insurance policies or riders containing accelerated long-term care benefits.

(4)(a) An insurer shall include the following information in or with the outline of coverage:

(A) A graphic comparison of the benefit levels of a policy that increases benefits by three percent compounded over the policy period with a policy that does not increase benefits. The graphic comparison shall show benefit levels over at least a 20-year period.

(B) Any expected premium increases or additional premiums to pay for automatic or optional benefit increases.

(b) An insurer may use a reasonable hypothetical, or a graphic demonstration, for the purposes of this disclosure.

(5) Inflation protection benefit increases under a policy that contains these 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 policy.

(6) An offer of inflation protection that provides for automatic benefit increases shall include an offer of a premium that the insurer expects to remain constant. The offer shall disclose in a conspicuous manner that the premium may change in the future unless the premium is guaranteed to remain constant.

(7)(a) Inflation protection as provided in section (1)(a) of this rule shall be included in a long-term care insurance policy unless an insurer obtains a rejection of inflation protection signed by the policyholder as required in this section. The rejection may be either in the application or on a separate form.

(b) The rejection shall be considered a part of the application and shall state:

I have reviewed the outline of coverage and the graphs that compare the benefits and premiums of this policy with and without inflation protection. Specifically, I have reviewed Plans_____________, and I reject inflation protection.

(8) The following requirements apply to the inflation protection option described in section (1)(b) of this rule:

(a) The insurer must provide that benefit increases occur automatically unless the insured specifically rejects the option to increase.

(b) The option to increase must be offered every year through at least the insured's attained age 76, and the policy or certificate must guarantee the insured the opportunity to increase benefit levels on an annual basis without providing evidence of insurability or health status.

(c) The policy or certificate must be structured so that benefit levels increase annually and must otherwise satisfy the requirements of the Deficit Reduction Act of 2005. For example, compound inflation protection must be provided under policies purchased when the insured has not yet attained age 61. Benefit increases include, but are not limited to increases at a fixed interest rate or at a rate determined by an index-based formula.

(d) The additional premium for increased benefits may not be higher than the rate based on the insured's attained age at the time of each offer.

(e) All options through age 76 must be accepted to retain partnership policy status. Declination of an option may not operate to prevent the insured from accepting a later option.

(f) An insurer will continue to make offers regardless of the insured's age while the insured is in claim if the claim begins at or before age 76.

(g) The insurer or insurance producer must furnish an applicant a personalized illustration at the point of sale that shows the expected pattern of future premiums and benefits under the option compared to the premiums and benefits for a policy or certificate with automatic inflation protection that qualifies for partnership status.

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
Hist.: ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0620 [Renumbered to 836-052-0696]

836-052-0626

Requirements for Application Forms and Replacement Coverage

(1) An application form for long-term care insurance shall include the questions set forth in this section designed to elicit information as to whether, as of the date of the application, the applicant has another long-term care insurance policy, rider or certificate in force or whether a long-term care insurance policy, rider or certificate is intended to replace any other health or long term care insurance policy, rider or certificate currently in force. A supplementary application or other form to be signed by the applicant and insurance producer, except when the coverage is sold without an insurance producer, containing the questions may be used. With regard to a replacement policy issued to a group defined by ORS 743.652(3)(a), the following questions may be modified only to the extent necessary to elicit information about health or long-term care insurance policies other than the group policy being replaced, but only if the certificate holder has been notified of the replacement. The questions are as follows:

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

(b) Did you have another long-term care insurance policy, rider or certificate in force during the last 12 months?

(A) If so, with which insurer?

(B) If that policy lapsed, when did it lapse?

(C) Are you covered by a state assistance program (Medicaid)?

(d) Do you intend to replace any of your medical or health insurance coverage with this policy, rider or certificate?

(2) An insurance producer shall list any other health insurance policies that the insurance producer has sold to the applicant:

(a) List such policies sold that are still in force, and;

(b) List such policies sold in the past five years that are no longer in force.

(3) Solicitations other than direct response. Upon determining that a sale will involve replacement of long-term care insurance coverage, the insurer, other than an insurer using direct response solicitation methods, or its producer, shall furnish the applicant, prior to issuance or delivery of the individual long-term care insurance policy, a notice regarding replacement of accident and sickness or long-term care coverage. One copy of the 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 form shown in Exhibit 1 to this rule.

(4) Direct Response Solicitations. An insurer using direct response solicitation methods shall deliver a notice regarding replacement of accident and sickness or long-term care coverage to the applicant upon issuance of the policy. The required notice shall be provided in the form shown in Exhibit 2 to this rule.

(5) When 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 insurer, name of the insured and policy number or address including zip code. Notice shall be sent within five working days from the date the application is received by the insurer or the date the policy is issued, whichever is sooner.

(6) Life insurance policies that accelerate benefits for long-term care shall comply with this section if the policy being replaced is a long-term care insurance policy. If the policy being replaced is a life insurance policy, the insurer shall comply with the replacement requirements of OAR 836-080-0001 to 836-080-0043. If a life insurance policy that accelerates benefits for long-term care is replaced by another such policy, the replacing insurer shall comply with both the long-term care and the life insurance replacement requirements.

(7) Sections (1) through (6) do not apply when the application is to the existing insurer that issued the existing policy, certificate or rider when the transaction meets the following:

(a) A contractual change or a conversion privilege is being exercised, or

(b) When the existing policy, certificate or rider is being replaced by the same insurer and unearned premium is credited toward the new coverage.

[ED. NOTE: Exhibits referenced are available from the agency.]

Stat. Auth.: ORS 731, 742 & 743
Stats. Implemented: ORS 743.010(1), 743.013(3) & 743.655(1)(a)
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; Renumbered from 836-052-0615, ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0636

Reporting Requirements

(1) Every insurer shall maintain records for each insurance producer of that insurance producer's amount of replacement sales as a percent of the insurance producer's total annual sales and the amount of lapses of long-term care insurance policies sold by the insurance producer as a percent of the insurance producer's total annual sales.

(2) Reported replacement and lapse rates do not alone constitute a violation of insurance laws or necessarily imply wrongdoing. The reports are for the purpose of reviewing more closely agent activities regarding the sale of long-term care insurance.

(3) Every insurer shall report to the Director annually by June 30 the ten percent of its insurance producers with the greatest percentages of lapses and replacements as measured by section (1) of this rule using the form provided by the director on the Insurance Division website or a similar form and shall also include the following information in the annual report:

(a) The number of lapsed policies as a percent of its total annual sales and as a percent of its total number of policies in force as of the end of the preceding calendar year.

(b) The number of replacement policies sold as a percent of its total annual sales and as a percent of its total number of policies in force as of the preceding calendar year.

(4) Every insurer shall report to the Director annually by June 30, for qualified long-term care insurance contracts, the number of claims denied for each class of business, expressed as a percentage of claims denied using the form provided by the director on the Insurance Division website or a similar form.

(5) As used in this rule:

(a) "Claim" means, subject to subsection (b) of this section, a request for payment of benefits under an in force policy regardless of whether the benefit claimed is covered under the policy or any terms or conditions of the policy have been met;

(b) "Denied" means the insurer refuses to pay a claim for any reason other than for claims not paid for failure to meet the waiting period or because of an applicable preexisting condition;

(c) "Policy" means only long term care insurance; and

(d) "Report" means on a statewide basis.

[ED. NOTE: Exhibits referenced are available from the agency.]

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
Hist.: ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08; ID 4-2011, f. & cert. ef. 2-10-11

836-052-0639

Training for Insurance Producers

(1) When the provider of a training course notifies an insurance producer that the insurance producer has successfully completed the training course and passed the examination, the insurance producer shall send the notice of completion as verification of the training to each insurer for which the insurance producer transacts or will transact long term care insurance in this state. The insurer shall approve or disapprove the verification as meeting the requirements of section 9, chapter 486, Oregon Laws 2007 and return the verification to the insurance producer.

(2) An insurance producer shall submit the notice of completion of required training to the Director as approved by each insurer under section (2) of this rule when the insurance producer reports to the Director at license renewal regarding compliance with continuing education requirements.

(3) A training course taken online or through self-study in satisfaction of the requirements of section 9, chapter 486, Oregon Laws 2007 (Enrolled SB 191) must include an examination indicating understanding of the topics covered in the course. An insurance producer does not satisfy the training requirement of section 9, chapter 486, Oregon Laws 2007 unless the individual passes the examination for the online or self-study training course with a score of not less than 70 percent.

Stat. Auth.: ORS 731.244
Stats. Implemented: Sec. 9, Ch. 486, OL 2007 (Enrolled SB 191)
Hist.: ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0640 [Renumbered to 836-052-0706]

836-052-0645 [Renumbered to 836-052-0576]

836-052-0646

Benefits Provided Through Advancement of Life Insurance Proceeds

(1) When long term care benefits are provided through early payment of a portion of a life insurance policy death benefit, the insurer may make no more than a pro rata reduction in the life insurance policy cash value, based on the percentage of death benefits advanced. When the cash value is reduced in this manner, the insurer may apply no more of the payment to the reduction of any outstanding policy loans than this same pro rata percentage.

(2) For each month in which a long term care benefit has been provided through early payment of a portion of a life insurance death benefit, the insurer shall provide a report to the policyholder showing the benefits paid during the month, the change in the life insurance policy cash value, loan balance and death benefit, and the amount of benefits remaining.

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 742.003, 742.005, 743.650, 743.655 & 743.656
Hist.: ID 1-1996, f. & cert. ef. 1-12-96; Renumbered from 836-052-0588, ID 3-2005, f. & cert. ef. 3-1-05

836-052-0656

Reserve Standards

(1)(a) Each insurer shall use the following standards for determining policy reserves for long-term care insurance: When long-term care benefits are provided through the acceleration of benefits under a group or individual life insurance policy or a rider to such a policy, policy reserves for the benefits shall be determined in accordance with ORS 733.322. Claim reserves shall also be established in the case when the policy or rider is in claim status.

(b) Reserves for policies and riders subject to this section shall be based on the multiple decrement model using all relevant decrements except for voluntary termination rates. Single decrement approximations are acceptable if the calculation produces essentially similar reserves, if the reserve is clearly more conservative or if the reserve is immaterial. The calculations may take into account the reduction in life insurance benefits due to the payment of long-term care benefits. However, in no event shall the reserves for the long-term care benefit and the life insurance benefit be less than the reserves for the life insurance benefit assuming no long-term care benefit.

(c) In the development and calculation of reserves for long-term care insurance policies and riders subject to this section, an insurer shall consider the applicable policy and rider provisions, marketing methods, administrative procedures and all other considerations that affect projected claim costs, including but not limited to the following:

(A) Definition of insured events;

(B) Covered long-term care facilities;

(C) Existence of home care and home care coverage. For purposes of this paragraph, "home" has the meaning provided in OAR 836-052-0606;

(D) Definition of facilities;

(E) Existence or absence of barriers to eligibility;

(F) Premium waiver provisions;

(G) Renewability;

(H) Ability to raise premiums;

(I) Marketing methods;

(J) Underwriting procedures;

(K) Claims adjustment procedures;

(L) Waiting periods;

(M) Maximum benefits;

(N) Availability of eligible facilities;

(O) Margins in claim costs;

(P) Optional nature of benefit;

(Q) Delay in eligibility for benefit;

(R) Inflation protection provisions; and

(S) Guaranteed insurability option.

(2) For purposes of section (1) of this rule, an applicable valuation morbidity table shall be certified as appropriate as a statutory valuation table by a qualified actuary.

(3) When long term care benefits are provided other than as in section (1) of this rule, reserves shall be determined in accordance with OAR 836-031-0200 to 836-031-0300.

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 742.003, 742.005, 743.650, 743.655 & 743.656
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; ID 1-1996, f. & cert. ef. 1-12-96; Renumbered from 836-052-0545, ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

Long Term Care Insurance
Loss Ratio, Rate Filings

836-052-0666

Loss Ratio

(1) This rule applies to all long-term care insurance policies, certificates and riders except those that are subject to OAR 836-052-0566 and 836-052-0676.

(2) Benefits under long-term care insurance policies and riders shall be deemed reasonable in relation to premiums only if the expected loss ratio is at least 60 percent and is calculated in a manner providing for adequate reserving of the long-term care insurance risk.

(3) In evaluating the expected loss ratio under section (2) of this rule, an insurer shall consider all relevant factors, including:

(a) Statistical credibility of incurred claims experience and earned premiums;

(b) The period for which rates are computed to provide coverage;

(c) Experienced and projected trends;

(d) Concentration of experience within early policy duration;

(e) Expected claim fluctuation;

(f) Experience refunds, adjustments or dividends;

(g) Renewability features;

(h) All appropriate expense factors;

(i) Interest;

(j) Experimental nature of the coverage;

(k) Policy reserves;

(L) The mix of business by risk classification;

(m) Product features, such as long elimination periods, high deductibles and high maximum limits.

(4) The loss ratio requirements under this rule apply with respect to Oregon policyholders. Subject to the approval of the Director, an insurer may use national or regional loss ratio experience to modify the Oregon experience when the experience for Oregon policyholders is small and statistically unreliable. Oregon experience and national or regional experience must be submitted in separate tables and the modification approved by the Director.

(5) The experience under all policy and rider forms insuring a class of insureds with similar benefits and underwriting requirements shall be combined when demonstrating compliance with the requirements of this section.

(6) The effect on loss ratios of all requirements necessary to qualify for benefits shall be included in the calculations required under this rule.

(7) Sections (1) to (6) of this rule do not apply to life insurance policies that accelerate benefits for long-term care. A life insurance policy that funds long-term care benefits entirely by accelerating the death benefit is considered to provide reasonable benefits in relation to premiums paid if the policy complies with all of the following provisions:

(a) The interest credited internally to determine cash value accumulations, including long-term care, if any, is guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long-term care set forth in the policy;

(b) The portion of the policy that provides life insurance benefits meets the nonforfeiture requirements of ORS 743.204 or 743.275;

(c) The policy or rider meets the disclosure requirements of ORS 743.655(9) to (11);

(d) Any life policy illustration meets the applicable requirements of OAR 836-051-0500 to 836-051-0600; and

(e) An actuarial memorandum filed with the Director must be submitted by a qualified actuary in good standing with the American Academy of Actuaries. The memorandum must include:

(A) A description of the basis on which the long-term care rates were determined;

(B) A description of the basis for the reserves;

(C) A summary of the type of policy, benefits, renewability, general marketing method and limits on ages of issuance;

(D) A description and a table of each actuarial assumption used. For expenses, an insurer must include percent of premium dollars per policy and dollars per unit of benefits, if any;

(E) A description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives;

(F) The estimated average annual premium per policy and the average issue age;

(G) A statement as to whether underwriting is performed at the time of application. The statement shall indicate whether underwriting is used and, if used, the statement shall include a description of the type or types of underwriting used, such as medical underwriting or functional assessment underwriting. Concerning a group policy, the statement shall indicate whether the enrollee or any dependent will be underwritten and when underwriting occurs; and

(H) A description of the effect of the long-term care policy provision on the required premiums, nonforfeiture values and reserves on the underlying life insurance policy, both for active lives and those in long-term care claim status.

Stat. Auth.: ORS 731, 742 & 743
Stats. Implemented: ORS 742.005 & 743.655(1)(a)
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; Renumbered from 836-052-0530, ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0676

Premium Rate Schedule Increases

(1) This rule applies as follows:

(a) Except as provided in subsection (b) of this section, this rule applies to any long-term care insurance policy or certificate issued in this state on or after March 1, 2006.

(b) For certificates issued on or after March 1, 2005 under a group long-term care insurance policy as defined in ORS 743.652(3)(a) that was in force on March 1, 2005, this rule applies on the policy anniversary following March 1, 2006.

(2) An insurer shall obtain approval of a premium rate schedule increase from the Director of the Department of Consumer and Business Services, including an exceptional increase as defined in section (3) of this rule, prior to the notice to the policyholders and shall include the following in the submission to the director:

(a) Information required by OAR 836-052-0556;

(b) Certification by a qualified actuary that:

(A) If the requested premium rate schedule increase is implemented and the underlying assumptions that reflect moderately adverse conditions are realized, no further premium rate schedule increases are anticipated; and

(B) The premium rate filing is in compliance with this rule.

(c) An actuarial memorandum justifying the rate schedule change request that includes:

(A) Lifetime projections of earned premiums and incurred claims based on the filed premium rate schedule increase; and the method and assumptions used in determining the projected values, including reflection of any assumptions that deviate from those used for pricing other forms currently available for sale, as follows:

(i) Annual values for the five years preceding and the three years following the valuation date shall be provided separately;

(ii) The projections shall include the development of the lifetime loss ratio according to OAR 836-052-0666, unless the rate increase is an exceptional increase;

(iii) The projections shall demonstrate compliance with section (3) of this rule; and

(iv) For exceptional increases:

(I) The projected experience must be limited to the increases in claims expenses attributable to the approved reasons for the exceptional increase; and

(II) In the event the director determines as provided in OAR 836-052-0508(1)(d) that offsets may exist, the insurer shall use appropriate net projected experience.

(B) Disclosure of how reserves have been incorporated in this rate increase whenever the rate increase will trigger contingent benefit upon lapse;

(C) Disclosure of the analysis performed to determine why a rate adjustment is necessary, which pricing assumptions were not realized and why, and what other actions taken by the insurer have been relied on by the actuary;

(D) A statement that policy design, underwriting and claims adjudication practices have been taken into consideration; and

(E) Composite rates reflecting projections of new certificates, in the event that it is necessary to maintain consistent premium rates for new certificates and certificates receiving a rate increase.

(d) A statement that renewal premium rate schedules are not greater than new business premium rate schedules except for differences attributable to benefits, unless sufficient justification is provided to the director; and

(e) Sufficient information for review and approval of the premium rate schedule increase by the director.

(3) As used in this rule, "exceptional increase" means only those increases filed by an insurer as exceptional for which the director determines the need for the premium rate increase is justified, owing to changes in statutes or rules applicable to long-term care insurance in this state or owing to increased and unexpected utilization that affects the majority of insurers of similar products. An exceptional increase is subject to the following provisions:

(a) Except as provided in this rule, an exceptional increase is subject to the same requirements as other premium rate schedule increases.

(b) The director may request a review by an independent actuary or a professional actuarial body of the basis for a request that an increase be considered an exceptional increase.

(c) The director, in determining that the necessary basis for an exceptional increase exists, shall also determine any potential offsets to higher claims costs.

(4) All premium rate schedule increases shall be determined in accordance with the following requirements:

(a) Each exceptional increase shall provide that 70 percent of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits;

(b) Each premium rate schedule increase shall be calculated such that the sum of the accumulated value of incurred claims, without the inclusion of active life reserves, and the present value of future projected incurred claims, without the inclusion of active life reserves, will not be less than the sum of the following:

(A) The accumulated value of the initial earned premium times 58 percent;

(B) 85 percent of the accumulated value of prior premium rate schedule increases on an earned basis;

(C) The present value of future projected initial earned premiums times 58 percent; and

(D) 85 percent of the present value of future projected premiums not in paragraph (C) of this subsection on an earned basis.

(c) In the event that a policy form has both exceptional and other increases, the values in subsection (b)(B) and (D) of this section will also include 70 percent for exceptional rate increase amounts; and

(d) All present and accumulated values used to determine rate increases shall use the maximum valuation interest rate specified in ORS 733.310 for the valuation of life insurance issued on the same date as the long-term care insurance. The actuary shall disclose as part of the actuarial memorandum the use of any appropriate averages.

(5) For each rate increase that is implemented, the insurer shall file for review and approval by the director updated projections, as defined in section (2)(c)(A) of this rule, annually for the next three years and include a comparison of actual results to projected values. The director may extend the period to greater than three years if actual results are not consistent with projections values from prior projections. For group insurance policies that meet the conditions in section (12) of this rule, the projections required by this section shall be provided to the policyholder in lieu of filing with the director.

(6) If any premium rate in the revised premium rate schedule is greater than 200 percent of the comparable rate in the initial premium schedule, lifetime projections, as defined in section (2)(c)(A) of this rule, shall be filed for review and approval by the director every five years following the end of the required period in section (5) of this rule. For group insurance policies that meet the conditions in section (12) of this rule, the projections required by this section shall be provided to the policyholder in lieu of filing with the director.

(7)(a) If the director has determined that the actual experience following a rate increase does not adequately match the projected experience and that the current projection under moderately adverse conditions demonstrates that incurred claims will not exceed proportions of premiums specified in section (4) of this rule, the director may require the insurer to implement any of the following:

(A) Premium rate schedule adjustments; or

(B) Other methods to reduce the difference between the projected and actual experience.

(b) In determining whether the actual experience adequately matches the projected experience, consideration shall be given to section (2)(c)(E) of this rule, if applicable.

(8) If the majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse, the insurer shall file:

(a) A plan, subject to director approval, for improved administration or claims processing designed to eliminate the potential for further deterioration of the policy form requiring further premium rate schedule increase, or both, or to demonstrate that appropriate administration and claims processing have been implemented or are in effect, otherwise the director may impose the condition in section (9) of this rule; and

(b) The original anticipated lifetime loss ratio and the premium rate schedule increase that would have been calculated according to section (4) of this rule had the greater of the original anticipated lifetime loss ratio or 58 percent been used in the calculations described in section (4)(a)(A) and (C) of this rule.

(9)(a) For a rate increase filing that meets the following criteria, the director shall review, for all policies included in the filing, the projected lapse rates and past lapse rates during the 12 months following each increase to determine if a significant adverse lapse has occurred or is anticipated:

(A) The rate increase is not the first rate increase requested for the specific policy form or forms;

(B) The rate increase is not an exceptional increase; and

(C) The majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse.

(b) In the event significant adverse lapse has occurred, is anticipated in the filing or is evidenced in the actual results as presented in the updated projections provided by the insurer following the requested rate increase, the director may determine that a rate spiral exists. Following the determination that a rate spiral exists:

(A) The director may require the insurer to offer, without underwriting, to all in force insureds subjected to the rate increase the option to replace existing coverage with one or more reasonably comparable products being offered by the insurer or its affiliates.

(B) An offer under paragraph (A) of this subsection shall:

(i) Be subject to the approval of the director;

(ii) Be based on actuarially sound principles, but not be based on attained age;

(iii) Provide that maximum benefits under any new policy accepted by an insured shall be reduced by comparable benefits already paid under the existing policy; and

(iv) Shall credit any unearned premium to the new coverage.

(C) The insurer shall maintain the experience of all the replacement insureds separate from the experience of insureds originally issued the policy forms. In the event of a request for a rate increase on the policy form, the rate increase shall be limited to the lesser of:

(i) The maximum rate increase determined based on the combined experience; and

(ii) The maximum rate increase determined based only on the experience of the insureds originally issued the form plus ten percent.

(10) If the director determines that the insurer has exhibited a persistent practice of filing inadequate initial premium rates for long-term care insurance, the director may, in addition to the provisions of section (9) of this rule, prohibit the insurer from doing either of the following:

(a) Filing and marketing comparable coverage for a period of up to five years; or

(b) Offering all other similar coverages and limiting marketing of new applications to the products subject to recent premium rate schedule increases.

(11) Sections (1) to (10) of this rule do not apply to policies for which long-term care benefits provided by the policy are incidental if the policy complies with all of the provisions of this section. For the purpose of this section, "incidental" means that the value of the long-term care benefits provided is less than ten percent of the total value of the benefits provided over the life of the policy. These values shall be measured as of the date of issue. The provisions are as follows:

(a) The interest credited internally to determine cash value accumulations, including long-term care, if any, must be guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long-term care set forth in the policy.

(b) The portion of the policy that provides insurance benefits other than long-term care coverage must meet the nonforfeiture requirements for those benefits.

(c) The policy must meet the disclosure requirements under OAR 836-052-0706 for long-term care insurance policies.

(d) The portion of the policy that provides insurance benefits other than long term care coverage must meet the requirements as applicable for life and annuity policies.

(e) An actuarial memorandum that includes the following items must be filed with the director:

(A) A description of the basis on which the long term care rates were determined.

(B) A description of the basis for the reserves.

(C) A summary of the type of policy, benefits, renewability, general marketing method and limits on ages of issuance.

(D) A description and a table of each actuarial assumption used. For expenses, an insurer must include percent of premium dollars per policy and dollars per unit of benefits, if any.

(E) A description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives.

(F) The estimated average annual premium per policy and the average issue age.

(G) A statement as to whether underwriting is performed at the time of application. The statement must indicate whether underwriting is used and, if used, the statement must include a description of the type or types of underwriting used, such as medical underwriting or functional assessment underwriting. Concerning a group policy, the statement shall indicate whether the enrollee or any dependent will be underwritten and when underwriting occurs.

(H) A description of the effect of the long term care policy provision on the required premiums, nonforfeiture values and reserves on the underlying insurance policy, both for active lives and those in long term care claim status.

(12) Sections (6) and (8) of this rule do not apply to group insurance policies as defined in ORS 743.652(3)(a) when:

(a) The policies insure 250 or more persons and the policyholder has 5,000 or more eligible employees of a single employer; or

(b) The policyholder and not the certificate holders pays a material portion of the premium, which shall not be less than 20 percent of the total premium for the group in the calendar year prior to the year a rate increase is filed.

Stat. Auth.: ORS 731.244
Stats. Implemented: ORS 742.005, 743.018, 743.650 & 743.652
Hist.: ID 3-2005, f. & cert. ef. 3-1-05; ID 12-2005(Temp), f. & cert. ef. 10-3-05 thru 3-20-06; ID 5-2006, f. 3-15-06, cert. ef. 3-20-06; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08; ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

836-052-0686

Filing Requirements for Out-of-State Group Policies

Each insurer providing group long-term care insurance benefits to a resident of this state under an exempt master group policy pursuant to ORS 731.486 issued outside of this state shall file, for informational purposes, a copy of the policy form filed for approval with the state of domicile of the insurer and any rider or certificate used in this state in accordance with the filing requirements and procedures applicable to group entities filing in this state.

Stat. Auth.: ORS 731, 742 & 743
Stats. Implemented: ORS 731.244 & 743.653
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; Renumbered from 836-052-0550, ID 3-2005, f. & cert. ef. 3-1-05

Long Term Care Insurance Sales

836-052-0696

Filing Requirements for Advertising

At the request of the Director, every insurer, health care service plan or other entity providing long-term care insurance or benefits in this state shall provide to the Director a copy of any long-term care insurance advertisement intended for use in this state, whether through the written, radio or television medium, for review or approval by the Director as authorized under ORS 742.009 and other state law. In addition, all advertisements shall be retained by the insurer, health care service plan or other entity for at least three years from the date the advertisement was first used. Each advertisement shall comply with all applicable laws and rules of this state.

Stat. Auth.: ORS 731.244 & 742.009
Stats. Implemented: ORS 742.009 & 743.655(1)(a)
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; Renumbered from 836-052-0620, ID 3-2005, f. & cert. ef. 3-1-05; ID 12-2005(Temp), f. & cert. ef. 10-3-05 thru 3-20-06; ID 5-2006, f. 3-15-06, cert. ef. 3-20-06; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0706

Standards for Marketing

(1) Every insurer, health care service plan or other entity marketing long-term care insurance coverage in this state, directly or through its insurance producers, shall:

(a) Establish marketing procedures and insurance producer training requirements to assure that:

(A) Any marketing activities, including any comparison of policies by its insurance producers, will be fair and accurate; and

(B) Excessive insurance is not sold or issued.

(b) Display prominently by type, stamp or other appropriate means, on the first page of the outline of coverage and policy, or certificate if a group, the following:

"Notice to buyer: This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations."

(c) Provide copies of the disclosure forms required in OAR 836-052-0556(4) (Exhibits 1 and 2) to the applicant.

(d) Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for long-term care insurance already has health or long-term care insurance and the types and amounts of any such insurance, except that in the case of qualified long-term care insurance contracts, an inquiry into whether a prospective applicant or enrollee for long-term care insurance has health insurance is not required.

(e) Establish auditable procedures for verifying compliance with this section.

(f) At solicitation, provide written notice to the prospective policyholder and certificate holder that a senior insurance counseling program approved by the Director is available and the name, address and telephone number of the program.

(g) For long-term care insurance policies, certificates and riders, use the terms "noncancellable" or "level premium" only when the policy, certificate or rider conforms to OAR 836-052-0526(1)(c).

(h) Provide an explanation of contingent benefit upon lapse provided for in OAR 836-052-0746(4)(c) and, if applicable, the additional contingent benefit upon lapse provided to policies with fixed or limited premium paying periods in 836-052-0746(4)(d).

(2) In addition to the practices prohibited under ORS Chapter 746, the following acts and practices are prohibited:

(a) Twisting, which includes knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies 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 to take out a policy of insurance with another insure.

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

(c) Cold lead advertising, which is 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 an insurer or insurance producer.

(d) Misrepresentation of a material fact in selling or offering to sell a long-term care insurance policy.

(3) An association, as defined in ORS 743.652(3)(b), and the insurer endorsing or selling long-term care insurance are subject to the following requirements and obligations:

(a) The primary responsibility of an association, when endorsing or selling long term care insurance, shall be to educate its members concerning long-term care issues in general so that its members can make informed decisions. An association shall provide objective information regarding long term care insurance policies or certificates endorsed or sold by the association to ensure that its members receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold.

(b) The insurer shall file with the Director the following material:

(A) The policy, certificate, and riders;

(B) A corresponding outline of coverage; and

(C) All advertisements requested by the Director.

(c) The association shall disclose in any long-term care insurance solicitation:

(A) The specific nature and amount of the compensation arrangements (including all fees, commissions, administrative fees and other forms of financial support) that the association receives from endorsement or sale of the policy or certificate to its members; and

(B) A brief description of the process under which the policies and the insurer issuing the policies were selected.

(d) If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.

(e) The board of directors of an association selling or endorsing long-term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the insurer.

(f) The association shall also:

(A) At the time of the association's decision to endorse, engage the services of a person with expertise in long-term care insurance not affiliated with the insurer to conduct an examination of the policies, including its benefits, features, and rates and update the examination thereafter in the event of material change;

(B) Actively monitor the marketing efforts of the insurer and its producers; and

(C) Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies, certificates, or riders.

(g) Subsection (f) of this section does not apply to qualified long-term care insurance contracts.

(h) A group long term care insurance policy, certificate or rider may not be issued to an association unless the insurer files with the director the information required in this section.

(i) The insurer may not issue a long term care insurance policy or certificate to an association or continue to market the policy or certificate or certificate unless the insurer certifies annually that the association has complied with the requirements of this section.

(j) Failure to comply with the filing and certification requirements of this rule is an unfair trade practice in violation of ORS 746.240.

[ED. NOTE.: Exhibits referenced are available from the agency.]

Stat. Auth.: ORS 731, 742 & 743
Stats. Implemented: ORS 743.655(1)(a) & 746.240
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; Renumbered from 836-052-0640, ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0716

Disclosure Statement

(1) An insurer offering long-term care insurance coverage in this state shall deliver a disclosure statement as provided in this rule to the insured under a long-term care insurance policy, rider or certificate or separately but at the same time as delivery of the policy, rider or certificate.

(2) The disclosure statement must include the following matters:

(a) A statement of the premium. The statement must give the total annual premium for the policy, rider or certificate and, if the premium varies with an applicant's choice among benefits options, must indicate the portion of annual premium corresponding to each benefit option;

(b) The terms of renewability. The terms used to describe renewability must be used in accordance with OAR 836-052-0526. The terms must be stated on the first page of the policy and must be one of the following, defined as follows:

(A) A policy is "guaranteed renewable" when renewal cannot be declined by the insurer for any reason, but the insurer can revise rates on a class basis;

(B) A policy is "noncancellable" if the insurer cannot decline renewal and cannot revise rates.

(c) Initial and subsequent conditions of eligibility;

(d) A statement of nonduplication of coverage provisions;

(e) Coverage of dependents;

(f) Preexisting conditions;

(g) Termination of insurance;

(h) Continuation or conversion of coverage;

(i) Any probationary periods;

(j) Limitations, exceptions and reductions;

(k) Elimination periods;

(l) Requirements for replacement;

(m) Recurrent conditions;

(n) Definitions of terms;

(o) Option to apply for new benefits

(3) The disclosure statement:

(a) Must be printed in not less than twelve point type;

(b) May not contain material of an advertising nature.

(4) The disclosure statement must include the following statement: CAUTION: Issuance of this long-term care insurance (policy) (rider) (certificate) is based upon your answers to the questions on your application. (A copy of your (application) (enrollment form) is enclosed.) -OR- (You retained a copy of your (application) (enrollment form) when you applied.) If your answers are incorrect or untrue, the company may deny benefits or rescind your policy.

(5) When long term care benefits are provided through early payment of a portion of a life insurance policy death benefit, the disclosure statement must include the following statements:

(a) "NOTICE: The long term care benefits described here are provided as part of a life insurance policy. Your premiums pay for life insurance. Whenever long term care benefits are paid from this policy, the payments will reduce the available cash value and death benefit under the life insurance policy";

(b) A statement of disclosure regarding tax consequences, as described in OAR 836-052-0546(6).

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 742.003, 742.005, 743.650, 743.655 & 743.656
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; ID 1-1996, f. & cert. ef. 1-12-96; Renumbered from 836-052-0605, ID 3-2005, f. & cert. ef. 3-1-05

836-052-0726

Suitability

(1) This rule does not apply to life insurance policies that accelerate benefits for long-term care.

(2) Each insurer, health care service plan or other entity shall:

(a) Develop and use suitability standards to determine whether the purchase or replacement of long-term care insurance is appropriate for the needs of the applicant;

(b) Train its insurance producers in the use of its suitability standards; and

(c) Maintain a copy of its suitability standards and make them available for inspection upon request by the Director.

(3)(a) To determine whether an applicant meets the standards developed by the insurer, an insurance producer and insurer shall develop procedures that take the following into consideration:

(A) The ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage;

(B) The applicant's goals or needs with respect to long-term care and the advantages and disadvantages of insurance to meet these goals or needs; and

(C) The values, benefits and costs of the applicant's existing insurance, if any, when compared to the values, benefits and costs of the recommended purchase or replacement.

(b) The insurer, and when an insurance producer is involved, the insurance producer, shall make reasonable efforts to obtain the information set out in subsection (a) of this section. The efforts shall include presentation to the applicant, at or prior to application, the "Long-Term Care Insurance Personal Worksheet." The personal worksheet used by the insurer shall contain, at a minimum, the information in the format contained in OAR 836-052-0556(4), Exhibit 1, in not less than 12 point type. The insurer may request the applicant to provide additional information to comply with its suitability standards. A copy of the insurer's personal worksheet shall be filed with the Director.

(c) A completed personal worksheet shall be returned to the insurer prior to the insurer's consideration of the applicant for coverage, except that the personal worksheet need not be returned for sales of employer group long-term care insurance to employees and their spouses.

(d) An insurer or insurance producer shall not sell or disseminate information obtained through the personal worksheet outside the insurer or agency.

(4) An insurer shall use the suitability standards it has developed pursuant to this rule in determining whether issuing long-term care insurance coverage to an applicant is appropriate.

(5) An insurance producer shall use the suitability standards developed by the insurer in marketing long-term care insurance.

(6) At the same time that the personal worksheet is provided to the applicant, the disclosure form entitled "Things You Should Know Before You Buy Long-Term Care Insurance" shall also be provided to the applicant. The form shall be in the format contained in Exhibit 1, in not less than 12 point type.

(7) If the insurer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the insurer may reject the application. In the alternative, the insurer shall send the applicant a letter similar to Exhibit 2. However, if the applicant has declined to provide financial information, the insurer may use some other method to verify the applicant's intent. The insurer shall make either the applicant's returned letter or a record of the alternative method of verification a part of the applicant's file.

(8) The insurer shall report annually by May 1 to the Director the total number of applications received from residents of this state, the number of those who declined to provide information on the personal worksheet, the number of applicants who did not meet the suitability standards, and the number of those who chose to confirm after receiving a suitability letter.

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
Hist.: ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0736

Prohibition Against Preexisting Conditions, Waiting Periods and Probationary Periods in Replacement Policies and Certificates

(1) If a long-term care insurance policy replaces another long-term care insurance policy, the replacing insurer shall waive any time periods applicable to preexisting conditions, waiting periods and probationary periods in the new long-term care insurance policy for similar benefits to the extent that similar exclusions have been satisfied under the original policy.

(2) If a group long-term care policy is replaced by another group long-term care policy purchased by the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the old group policy on its date of termination.

Stat. Auth.: ORS 731, 742 & 743
Stats. Implemented: ORS 743.655(1)(a)
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; Renumbered from 836-052-0575, ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0738

Availability of New Services or Providers

(1) An insurer shall notify policyholders of the availability of a new long term policy series that provides coverage for new long term care services or providers that are material in nature and not previously available through the insurer to the general public. The notice shall be provided within 12 months of the date that the new policy series is made available for sale in this state.

(2) Notwithstanding section (1) of this rule, notification is not required for any policy issued prior to the effective date of this rule or to any policyholder or certificate holder who is currently eligible for benefits, within an elimination period or on a claim, or who previously had been in claim status, or who would not be eligible to apply for coverage due to issue age limitations under the new policy. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium, to add such new services or providers.

(3) An insurer shall make the new coverage available in one of the following ways:

(a) By adding a rider to the existing policy and charging a separate premium for the new rider based on the insured's attained age;

(b) By exchanging the existing policy or certificate for one with an issue age based on the present age of the insured and recognizing past insured status by granting premium credits toward the premiums for the new policy or certificate. The premium credits shall be based on premiums paid or reserves held for the prior policy or certificate.

(c) By exchanging the existing policy or certificate for a new policy or certificate in which consideration for past insured status shall be recognized by setting the premium for the new policy or certificate at the issue age of the policy or certificate being exchanged. The cost for the new policy or certificate may recognize the difference in reserves between the new policy or certificate and the original policy or certificate.

(d) By an alternative program developed by the insurer that meets the intent of this rule if the program is filed with and approved by the Director.

(4) An insurer is not required to notify policyholders of a new proprietary policy series created and filed for use in a limited distribution channel. For the purpose of this section, "limited distribution channel" means through a discrete entity, such as a financial institution or brokerage, for which specialized products are available that are not available for sale to the general public. Policyholders that purchased such a new proprietary policy shall be notified when a new long term care policy series that provides coverage for new long term care services or providers material in nature is made available to that limited distribution channel.

(5) A policy issued pursuant to this rule shall be considered an exchange and not a replacement. An exchange is not subject to OAR 836-052-0626 and 836-052-0726, and the reporting requirements of 836-052-0636(1) to (3).

(6) When a policy is offered through an employer, labor organization, professional, trade or occupational association, the required notification in section (1) of this rule must be made to the offering entity. However, if the policy is issued to a group defined in ORS 743. 650(3)(d), the notification shall be made to each certificate holder.

(7) Nothing in this rule prohibits an insurer from offering any policy, rider, certificate or coverage change to any policyholder or certificate holder. However, upon request, any policy holder may apply for currently available coverage that includes the new services or providers. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium to add the new services or providers.

(8) This rule does not apply to life insurance policies or riders containing accelerated long term care benefits.

Stat. Auth.: ORS 731.244
Stats. Implemented: Sec. 9, Ch. 486, OL 2007 (Enrolled SB 191)
Hist.: ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0740

Right to Reduce Coverage and Lower Premiums

(1) Every long term care insurance policy and certificate must include a provision that allows the policyholder or certificate holder to reduce coverage and lower the policy or certificate premium in at least one of the following ways:

(a) Reducing the maximum benefit; or

(b) Reducing the daily, weekly or monthly benefit amount.

(2) An insurer may offer other reduction options that are consistent with the policy or certificate design or the insurer's administrative processes, in addition to the provision required in section (1) of this rule.

(3) The provision required in section (1) of this rule must include a description of the ways in which coverage may be reduced and the process for requesting and implementing a reduction in coverage.

(4) The age to determine the premium for the reduced coverage must be based on the age used to determine the premiums for the coverage currently in force.

(5) The insurer may limit any reduction in coverage to plans or options available for that policy form and to those for which benefits will be available after consideration of claims paid or payable.

(6) If a policy or certificate is about to lapse, the insurer shall provide a written reminder to the policyholder or certificate holder of the right of the policyholder or certificate holder to reduce coverage and premiums in the notice required by OAR 836-052-0536(1)(c).

(7) This rule does not apply to life insurance policies or riders containing accelerated long term care benefits.

(8) This rule applies to any long term care policy issued in this state on or after December 1, 2008.

Stat. Auth.: ORS 731.244
Stats. Implemented: Sec. 9, Ch. 486, OL 2007 (Enrolled SB 191)
Hist.: ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

Long Term Care Insurance Nonforfeiture Benefit; Benefit Triggers

836-052-0746

Nonforfeiture Benefit Requirement

(1) This rule does not apply to life insurance policies or riders containing accelerated long-term care benefits.

(2) To comply with the requirement to offer a nonforfeiture benefit pursuant to the provisions of section 7, ch. 486, Oregon Laws 2007 (Enrolled Senate Bill 191):

(a) A long-term care policy, certificate or rider offered with nonforfeiture benefits must have coverage elements, eligibility, benefit triggers and benefit length that are the same as coverage to be issued without nonforfeiture benefits. The nonforfeiture benefit included in the offer must be the benefit described in section (6) of this rule.

(b) The offer must be in writing if the nonforfeiture benefit is not otherwise described in the Outline of Coverage or other materials given to the prospective policyholder.

(3) If the offer required to be made under section 7, ch. 486, Oregon Laws 2007 is rejected, the insurer shall provide the contingent benefit upon lapse described in this rule. Even if this offer is accepted for a policy with a fixed or limited premium paying period, the contingent benefit on lapse in section (4)(d) of this rule shall still apply.

(4)(a) After rejection of an offer required under section 7, ch. 486, Oregon Laws 2007, for an individual or group policy without nonforfeiture benefits issued after the effective date of this section, the insurer shall provide a contingent benefit upon lapse.

(b) In the event a group policyholder elects to make the nonforfeiture benefit an option to the certificate holder, a certificate shall provide either the nonforfeiture benefit or the contingent benefit upon lapse.

(c) The contingent benefit on lapse shall be triggered every time an insurer increases the premium rates to a level that results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set forth in this subsection based on the insured's issue age, and the policy or certificate lapses within 120 days of the due date of the premium so increased. Unless otherwise required, a policyholder shall be notified at least 30 days prior to the due date of the premium reflecting the rate increase. [Table not included. See ED. NOTE.]

(d) A contingent benefit on lapse shall also be triggered for policies with a fixed or limited premium paying period every time an insurer increases the premium rates to a level that results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set forth in this paragraph based on the insured's issue age, the policy or certificate lapses within 120 days of the due date of the premium so increased, and the ratio in subsection (e)(B) of this section is 40 percent or more. Unless otherwise required, policyholders shall be notified at least 30 days prior to the due date of the premium reflecting the rate increase. This provision is in addition to the contingent benefit provided by subsection (c) of this section, and when both are triggered, the benefit provider shall be at the option of the insured. [Table not included. See ED. NOTE.]

(e) On or before the effective date of a substantial premium increase as defined in subsection (c) of this section, the insurer shall:

(A) Offer to reduce policy benefits provided by the current coverage without the requirement of additional underwriting so that required premium payments are not increased;

(B) Offer to convert the coverage to a paid-up status with a shortened benefit period in accordance with the provisions of section (6) of this rule. This option may be elected at any time during the 120-day period referenced in subsection (c) of this section; and

(C) Notify the policyholder or certificate holder that a default or lapse at any time during the 120-day period referenced in subsection (c) of this section shall be deemed to be the election of the offer to convert in paragraph (B) of this subsection unless the automatic option in subsection (f)(C) applies.

(f) On or before the effective date of a substantial premium increase as defined in subsection (d) of this section, the insurer shall:

(A) Offer to reduce policy benefits provided by the current coverage without the requirement of additional underwriting so that required premium payments are not increased;

(B) Offer to convert the coverage to a paid up status when the amount payable for each benefit is 90 percent of the amount payable in effect immediately prior to lapse times the ratio of the number of completed months of paid premiums divided by the number of months in the premium paying period. This option may be elected at any time during the 120-day period referenced in subsection (d) of this section; and

(C) Notify the policyholder or certificate holder that a default or lapse at any time during the 120-day period referenced in subsection (d) of this section shall be deemed to be the election of the offer to convert in paragraph (B) of this subsection if the ration is 40 percent or more.

(6) Benefits that must be continued as nonforfeiture benefits, including contingent benefits upon lapse in accordance with section (4)(c) of this rule but not section (4)(d) of this rule, are described in this section as follows:

(a) For purposes of this section, attained age rating is defined as a schedule of premiums starting from the issue date that increases age at least one percent per year prior to age 50, and at least three percent per year beyond age 50.

(b) For purposes of this section, the nonforfeiture benefit shall be of a shortened benefit period providing paid-up long-term care insurance coverage after lapse. The same benefits (amounts and frequency in effect at the time of lapse but not increased thereafter) must be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits shall be determined as specified in subsection (c) of this section.

(c) The standard nonforfeiture credit must be equal to 100% of the sum of all premiums paid, including the premiums paid prior to any changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit shall not be less than 30 times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit is subject to the limitation of section (7) of this rule.

(d)(A) The nonforfeiture benefit shall begin not later than the end of the third year following the policy or certificate issue date. The contingent benefit upon lapse shall be effective during the first three years as well as thereafter.

(B) Notwithstanding paragraph (a) of this subsection, for a policy or certificate with attained age rating, the nonforfeiture benefit shall begin on the earlier of:

(i) The end of the tenth year following the policy or certificate issue date; or

(ii) The end of the second year following the date the policy or certificate is no longer subject to attained age rating.

(e) Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.

(7) All benefits paid by the insurer while the policy or certificate is in premium paying status and in the paid up status may not exceed the maximum benefits that would be payable if the policy or certificate had remained in premium paying status.

(8) There shall be no difference in the minimum nonforfeiture benefits as required under this rule for group and individual long term care insurance policies.

(9) The requirements set forth in this rule become effective March 1, 2006, after adoption of this provision and shall apply as follows:

(a) Except as provided in paragraphs (b) and (c) of this subsection, the provisions of this rule apply to any long-term care policy issued in this state on or after March 1, 2005.

(b) For certificates issued on or after March 1, 2006 under a group long-term care insurance policy as defined in ORS 743.652(3)(a), which policy was in force March 1, 2005, the provisions of this rule do not apply.

(c) The last sentence in section (3) and section (4)(d) and (f) of this rule apply to any long term care insurance policy or certificate issued in this state after May 31, 2008, except new certificates on a group policy as defined in ORS 743.652(3)(a) after December 1, 2008.

(10) Premiums charged for a policy or certificate containing nonforfeiture benefits or a contingent benefit on lapse shall be subject to the loss ratio requirements of OAR 836-052-0666 or 836-052-0676, whichever is applicable, treating the policy as a whole.

(11) To determine whether contingent nonforfeiture upon lapse provisions are triggered under section (4)(c) or (d) of this rule, a replacing insurer that purchased or otherwise assumed a block or blocks of long-term care insurance policies from another insurer shall calculate the percentage increase based on the initial annual premium paid by the insured when the policy was first purchased from the original insurer.

(12) A nonforfeiture benefit for qualified long-term care insurance contracts that are level premium contracts shall be offered that meets the following requirements:

(a) The nonforfeiture provision shall be appropriately captioned;

(b) The nonforfeiture provision shall provide a benefit available in the event of a default in the payment of any premiums and shall state that the amount of the benefit may be adjusted subsequent to being initially granted only as necessary to reflect changes in claims, persistency and interest as reflected in changes in rates for premium paying contracts approved by the Director for the same contract form; and

(c) The nonforfeiture provision shall provide at least one of the following:

(A) Reduced paid-up insurance;

(B) Extended term insurance;

(C) Shortened benefit period; or

(D) Other similar offerings approved by the Director.

[ED. NOTE: Tables referenced are available from the agency.]

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
Hist.: ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0756

Standards for Benefit Triggers

(1) A long-term care insurance policy shall condition the payment of benefits on a determination of the insured's ability to perform activities of daily living and on cognitive impairment. Eligibility for the payment of benefits shall not be more restrictive than requiring either a deficiency in the ability to perform not more than three of the activities of daily living or the presence of cognitive impairment.

(2)(a) Activities of daily living shall include at least the following as defined in OAR 836-052-0516 and in the policy:

(A) Bathing;

(B) Continence;

(C) Dressing;

(D) Eating;

(E) Toileting; and

(F) Transferring;

(b) An insurer may use activities of daily living to trigger covered benefits in addition to those contained in subsection (a) of this section as long as they are defined in the policy.

(c) For purposes of this rule, a cognitive impairment must be a result of a clinically diagnosed organic dementia, including but not limited to Alzheimer's disease or a related progressive degenerative dementia of an organic origin such as the following, by way of example only:

(A) Parkinson's Disease;

(B) Huntington's Disease;

(C) Creutzfeldt-Jakob Disease;

(D) Picks Disease;

(E) Multi-infarct dementia;

(F) Normal pressure hydrocephalus;

(G) Multiple sclerosis;

(H) Inoperable tumors of the brain.

(3) An insurer may use additional provisions for determining when benefits are payable under a policy, certificate or rider, but the provisions shall not restrict, and are not in lieu of, the requirements contained in sections (1) and (2) of this rule.

(4) For purposes of this rule, the determination of a deficiency shall not be more restrictive than:

(a) Requiring the hands-on assistance of another person to perform the prescribed activities of daily living; or

(b) Requiring that if the deficiency is due to the presence of a cognitive impairment, supervision or verbal cueing by another person is needed in order to protect the insured or others.

(5) Assessments of activities of daily living and cognitive impairment shall be performed by licensed or certified professionals, such as physicians, nurses or social workers.

(6) A long term care insurance policy shall include a clear description of the process for appealing and resolving benefit determinations.

(7) If an insurer denies payment of benefits under a long term care policy, the insurer shall include in its denial letter information about how the insured may contact the Insurance Division of the Department of Consumer and Business Services for assistance either by contacting the Insurance Division Consumer Advocacy Unit at its toll free telephone number or visiting the Division’s website at the website address currently provided by the Division as may be updated from time to time on the Division website.

(8) The requirements set forth in this rule are effective March 1, 2006, except for the following:

(a) The requirements of this rule apply to a long-term care policy or rider issued in this state on or after March 1, 2005.

(b) This rule does not apply to a certificate issued on or after March 1, 2006, under a group long-term care insurance policy as defined in ORS 743.652(3)(a) that was in force on March 1, 2005.

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
Hist.: ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08; ID 4-2011, f. & cert. ef. 2-10-11

836-052-0766

Additional Standards for Benefit Triggers for Qualified Long-Term Care Insurance Contracts

(1) For purposes of this rule, the following definitions apply:

(a) "Qualified long-term care services" means services that meet the requirements of Section 7702(c)(1) of the Internal Revenue Code of 1986, as amended, as follows: necessary diagnostic, preventive, therapeutic, curative, treatment, mitigation and rehabilitative services, and maintenance or personal care services which are required by a chronically ill individual, and are provided pursuant to a plan of care prescribed by a licensed health care practitioner.

(b)(A) "Chronically ill individual" has the meaning prescribed for this term by section 7702B(c)(2) of the Internal Revenue Code of 1986, as amended. Under this provision, a chronically ill individual means any individual who has been certified by a licensed health care practitioner as:

(i) Being unable to perform (without substantial assistance from another individual) at least two activities of daily living for a period of at least 90 days due to a loss of functional capacity; or

(ii) Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment.

(B) The term "chronically ill individual" shall not include an individual otherwise meeting these requirements unless within the preceding twelve-month period a licensed health care practitioner has certified that the individual meets these requirements.

(c) "Licensed health care practitioner" means a physician, as defined in Section 1861(r)(1) of the Social Security Act, a registered professional nurse, licensed social worker or other individual who meets requirements prescribed by the Secretary of the Treasury.

(d) "Maintenance or personal care services" means any care the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of which the individual is a chronically ill individual (including the protection from threats to health and safety due to severe cognitive impairment).

(2) A qualified long term care insurance contract shall pay only for qualified long term care services received by a chronically ill individual provided pursuant to a plan of care prescribed by a licensed health care practitioner.

(3) A qualified long-term care insurance contract shall condition the payment of benefits on a determination of the insured's inability to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity or to severe cognitive impairment.

(4) Certifications regarding activities of daily living and cognitive impairment required pursuant to section (3) of this rule shall be performed by the following licensed or certified professionals: physicians, registered professional nurses, licensed social workers, or other individuals who meet requirements prescribed by the Secretary of the Treasury.

(5) Certifications required pursuant to section (3) of this rule may be performed by a licensed health care professional at the direction of the insurer as is reasonably necessary with respect to a specific claim, except that when a licensed health care practitioner has certified that an insured is unable to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity and the insured is in claim status, the certification may not be rescinded and additional certifications may not be performed until after the expiration of the 90-day period.

(6) A qualified long-term care insurance contract shall include a clear description of the process for appealing and resolving disputes with respect to benefit determinations.

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
Hist.: ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0768

Appealing An Insurer’s Determination That The Benefit Trigger Is Not Met

(1) For purposes of this rule, “authorized representative” means a person who is authorized to act as the covered person’s personal representative within the meaning of 45 CFR 164.502(g) promulgated by the Secretary of the Department of Health and Human Services under the administrative simplification provisions of the Health Insurance Portability and Accountability Act. “Authorized representative” includes the following:

(a) A person to whom a covered person has given express written consent to represent the covered person in an external review;

(b) A person authorized by law to provide substituted consent for a covered person; or

(c) A family member of the covered person or the covered person’s treating health care professional only when the covered person is unable to provide consent.

(2) If an insurer determines that the benefit trigger of a long term care insurance policy has not been met, the insurer shall provide a clear, written notice to the insured and the insured’s authorized representative, if applicable, of all of the following:

(a) The reason that the insurer determined that the insured’s benefit trigger has not been met;

(b) The insured’s right to internal appeal in accordance with section (3) of this rule, and the right to submit new or additional information relating to the benefit trigger denial with the appeal request; and

(c) The insured’s right, after exhaustion of the insurer’s internal appeal process, to have the benefit trigger determination reviewed under the independent review process in accordance with section (4) of this rule.

(3) The insured or the insured’s authorized representative may appeal the insurer’s adverse benefit trigger determination by sending a written request to the insurer, along with any additional supporting information, within 120 calendar days after the insured and the insured’s authorized representative, if applicable, receives the insurer’s benefit determination notice. The internal appeal shall be considered by an individual or group of individuals designated by the insurer, but the individual or individuals making the internal appeal decision may not be the same individual or group of individuals who made the initial benefit determination. The internal appeal shall be completed and written notice of the internal appeal decision shall be sent to the insured and the insured’s authorized representative, if applicable, within 30 calendar days after the insurer receives all necessary information upon which a final determination can be made.

(a) If the insurer’s original determination is upheld upon internal appeal, the notice of the internal appeal decision shall describe any additional internal appeal rights offered by the insurer. Nothing in this rule shall require the insurer to offer any internal appeal rights other than those described in this subsection.

(b) If the insurer’s original determination is upheld after the internal appeal process has been exhausted, and new or additional information has not been provided to the insurer, the insurer shall provide a written description of the insured’s right to request an independent review of the benefit determination as described in section (4) of this rule to the insured and the insured’s authorized representative, if applicable.

(c) As part of the written description of the insured’s right to request an independent review, an insurer shall include the following, or substantially equivalent, language: “We have determined that the benefit eligibility criteria (“benefit trigger”) of your [policy] [certificate] has not been met. You may have the right to an independent review of our decision conducted by long term care professionals who are not associated with us. Please send a written request for independent review to us at [address]. You must inform us, in writing, of your election to have this decision reviewed within 120 days after you receive this letter. Listed below are the names and contact information of the independent review organizations approved or certified by the Department of Consumer and Business Services to conduct long term care insurance benefit eligibility reviews. If you wish to request an independent review, please choose one of the listed organizations and include its name with your request for independent review. If you elect independent review, but do not choose an independent review organization with your request, we will choose one of the independent review organizations for you and refer the request for independent review to it.”

(d) If the insurer does not believe the benefit trigger decision is eligible for independent review, the insurer shall inform the insured and the insured’s authorized representative, if applicable, and the director of the Department of Consumer and Business Services in writing and include in the notice the reasons for its determination of independent review ineligibility.

(e) The appeal process described in section (3) of this rule is not deemed to be a ‘new service or provider’ as referenced in OAR 836-052-0738, and therefore does not trigger the notice requirements of that rule.

(4)(a) The insured or the insured’s authorized representative may request an independent review of the insurer’s benefit trigger determination after the internal appeal process outlined in section (3) of this rule is exhausted. A written request for independent review may be made by the insured or the insured’s authorized representative to the insurer within 120 calendar days after the insurer’s written notice of the final internal appeal decision is received by the insured and the insured’s authorized representative, if applicable.

(b) The cost of the independent review shall be borne by the insurer.

(c) An independent review process shall comply with all of these procedures:

(A) Within five business days after receiving a written request for independent review, the insurer shall refer the request to the independent review organization that the insured or the insured’s authorized representative has chosen from the list of certified or approved organizations the insurer has provided to the insured. If the insured or the insured’s authorized representative does not choose an approved independent review organization to perform the review, the insurer shall choose an independent review organization approved or certified by the state. The insurer shall vary its selection of authorized independent review organizations on a rotating basis.

(B) The insurer shall refer the request for independent review of a benefit trigger determination to an independent review organization, subject to the following:

(i) The independent review organization shall be on a list of certified or approved independent review organizations that satisfy the requirements of a qualified long term care insurance independent review organization contained in this section;

(ii) The independent review organization may not have any conflicts of interest with the insured, the insured’s authorized representative, if applicable, or the insurer; and

(iii) The independent review shall be limited to the information or documentation provided to and considered by the insurer in making its determination, including any information or documentation considered as part of the internal appeal process.

(C) If the insured or the insured’s authorized representative has new or additional information not previously provided to the insurer, whether submitted to the insurer or the independent review organization, the information shall first be considered in the internal review process, as set forth in section (3) of this rule.

(i) While the insurer is reviewing the new or additional information, the independent review organization shall suspend its review and the time period for review is suspended until the insurer completes its review.

(ii) The insurer must complete its review of the information and provide written notice of the results of the review to the insured and the insured’s authorized representative, if applicable, and the independent review organization within five business days of the insurer’s receipt of such new or additional information.

(iii) If the insurer maintains its denial after the review of the new or additional information not previously provided to the insurer, the independent review organization shall continue its review, and render its decision within the time period specified in paragraph (I) of this subsection. If the insurer overturns its decision following its review, the independent review request shall be considered withdrawn.

(D) The insurer shall acknowledge in writing to the insured and the insured’s authorized representative, if applicable, and the director that the request for independent review has been received, accepted and forwarded to an independent review organization for review. The notice must include the name and address of the independent review organization.

(E) Within five business days after receipt of the request for independent review, the independent review organization assigned under this subsection shall notify the insured and the insured’s authorized representative, if applicable, the insurer and the director that it has accepted the independent review request and identify the type of licensed health care professional assigned to the review. The assigned independent review organization shall include in the notice a statement that the insured or the insured’s authorized representative may submit in writing to the independent review organization within seven days following the date of receipt of the notice additional information and supporting documentation that the independent review organization should consider when conducting its review.

(F) The independent review organization shall review all of the information and documents received pursuant to paragraph (E) of this subsection that has been provided to the independent review organization. The independent review organization shall provide copies of any documentation or information provided by the insured or the insured’s authorized representative to the insurer for its review, if it is not part of the information or documentation submitted by the insurer to the independent review organization. The insurer shall review the information and provide its analysis of the new information in accordance with subparagraph (H) of this paragraph.

(G) The insured or the insured’s authorized representative may submit, at any time, new or additional information not previously provided to the insurer but pertinent to the benefit trigger denial. The insurer shall consider such information and affirm or overturn its benefit trigger determination. If the insurer affirms its benefit trigger determination, the insurer shall promptly provide such new or additional information to the independent review organization for its review, along with the insurer’s analysis of such information.

(H) If the insurer overturns its benefit trigger determination:

(i) The insurer shall provide notice to the independent review organization and the insured and the insured’s authorized representative, if applicable, and the director of its decision; and

(ii) The independent review process shall immediately cease.

(I) The independent review organization shall provide the insured and the insured’s authorized representative, if applicable, the insurer and the director a written notice of its decision, within 30 calendar days after the independent review organization receives the referral referenced in subsection (c)(B)of this section.

If the independent review organization overturns the insurer’s decision, it shall:

(i) Establish the precise date within the specific period of time under review that the benefit trigger was deemed to have been met;

(ii) Specify the specific period of time under review for which the insurer declined eligibility, but during which the independent review organization deemed the benefit trigger to have been met; and

(iii) For tax-qualified long term care insurance contracts, provide a certification (made only by a licensed health care practitioner as defined in section 7702B(c)(4) of the Internal Revenue Code) that the insured is a chronically ill individual.

(J) The decision of the independent review organization with respect to whether the insured met the benefit trigger will be final and binding on the insurer.

(K) The independent review organization’s determination shall be used solely to establish liability for benefit trigger decisions, and is intended to be admissible in any proceeding only to the extent it establishes the eligibility of benefits payable.

(L) Nothing in this section shall restrict the insured’s right to submit a new request for benefit trigger determination after the independent review decision, should the independent review organization uphold the insurer’s decision.

(M) The independent review organization must satisfy the criteria set forth in Exhibit 1, Guidelines for Long term Care Independent Review Entities, in order to be certified or approved by the department to review long term care insurance benefit trigger decisions.

(N) The director shall maintain and periodically update a list of approved independent review organizations.

(5) Certification of Long term Care Insurance Independent Review Organizations. The director may certify or approve a qualified long term care insurance independent review organization, if the independent review organization demonstrates to the satisfaction of the director that it is unbiased and meets the following qualifications:

(a) Have on staff, or contract with, a qualified and licensed health care professional in an appropriate field for determining an insured’s functional or cognitive impairment (e.g. physical therapy, occupational therapy, neurology, physical medicine and rehabilitation) to conduct the review.

(b) Neither the organization nor any of its licensed health care professionals may, in any manner, be related to or affiliated with an entity that previously provided medical care to the insured.

(c) Utilize a licensed health care professional who is not an employee of the insurer or related in any manner to the insured.

(d) Neither it nor its licensed health care professional who conducts the reviews may receive compensation of any type that is dependent on the outcome of the review.

(e) Be state approved or certified to conduct such reviews if the state requires such approvals or certifications.

(f) Provide a description of the fees to be charged by it for independent reviews of a long term care insurance benefit trigger decision. Such fees shall be reasonable and customary for the type of long term care insurance benefit trigger decision under review.

(g) Provide the name of the medical director or health care professional responsible for the supervision and oversight of the independent review procedure.

(h) Have on staff or contract with a licensed health care practitioner, as defined by section 7702B(c)(4) of the Internal Revenue Code of 1986, as amended, who is qualified to certify that an individual is chronically ill for purposes of a qualified long term care insurance contract.

(6) Each certified independent review organization shall comply with the following:

(a) Maintain written documentation establishing the date it receives a request for independent review, the date each review is conducted, the resolution, the date such resolution was communicated to the insurer and the insured, the name and professional status of the reviewer conducting such review in an easily accessible and retrievable format for the year in which it received the information, plus two calendar years.

(b) Be able to document measures taken to appropriately safeguard the confidentiality of such records and prevent unauthorized use and disclosures in accordance with applicable federal and state law.

(c) Report annually to the director, by June 1, in the aggregate and for each long term care insurer all of the following:

(A) The total number of requests received for independent review of long term care benefit trigger decisions;

(B) The total number of reviews conducted and the resolution of such reviews (i.e., the number of reviews which upheld or overturned the long term care insurer’s determination that the benefit trigger was not met);

(C) The number of reviews withdrawn prior to review;

(D) The percentage of reviews conducted within the prescribed timeframe set forth in subsection (4)(c)(I) of this rule; and

(E) Such other information the director may require.

(d) Report immediately to the director any change in its status which would cause it to cease meeting any of the qualifications required of an independent review organization performing independent reviews of long term care benefit trigger decisions.

(7) Nothing contained in this rule shall limit the ability of an insurer to assert any rights an insurer may have under the policy related to:

(a) An insured’s misrepresentation;

(b) Changes in the insured’s benefit eligibility; and

(c) Terms, conditions, and exclusions of the policy, other than failure to meet the benefit trigger.

(8) The requirements of this rule apply to a benefit trigger request made on or after July 1, 2012 under a long term care insurance policy issued or renewed after July 1, 2012.

(9) The provisions of this rule supersede any other external review requirements found in ORS 743.857, 743.858, 743.859, 743.861, 743.862, 743.863 and 743.864.

Stat. Auth.: ORS 731.244, 743.655 & 2011 OL Ch. 69, Sec. 5 (Enrolled SB 88)
Stats. Implemented: ORS 743.655 & 2011 OL Ch. 69, Sec. 5 (Enrolled SB 88)
Hist.: ID 10-2007, f. 12-3-07, cert. ef. 1-1-08; ID 3-2012, f. & cert. ef. 2-14-12

836-052-0770

Prompt Payment of Clean Claims

(1) For purposes of this rule:

(a) “Claim” means a request for payment of benefits under an in-force policy, regardless of whether the benefit claimed is covered under the policy or any terms or conditions of the policy have been met.

(b) “Clean claim” means a claim that has no defect or impropriety, including any lack of required substantiating documentation, such as satisfactory evidence of expenses incurred, or particular circumstance requiring special treatment that prevents timely payment from being made on the claim.

(2) Within 30 business days after receipt of a claim for benefits under a long term care insurance policy or certificate, an insurer shall pay the claim if it is a clean claim, or send a written notice acknowledging the date of receipt of the claim and one of the following:

(a) The insurer is declining to pay all or part of the claim and the specific reason for denial; or

(b) That additional information is necessary to determine if all or any part of the claim is payable and the specific additional information that is necessary.

(3) Within 30 business days after receipt of all the requested additional information, an insurer shall pay a claim for benefits under a long term care insurance policy or certificate if it is a clean claim, or send a written notice that the insurer is declining to pay all or part of the claim, and the specific reason for denial.

(4) If an insurer fails to comply with section (2) or (3) of this rule, such insurer shall pay interest at the rate of 1% per month on the amount of the claim that should have been paid but that remains unpaid 45 business days after the receipt of the claim with respect to section (2) of this rule or all requested additional information with respect to section (3) of this rule. The interest payable under this section shall be included in any late reimbursement without requiring the person who filed the original claim to make any additional claim for the interest.

(5) The provisions of this rule shall not apply where the insurer has a reasonable basis supported by specific information that a claim was fraudulently submitted.

(6) Any violation of this rule by an insurer if committed flagrantly and in conscious disregard of the provisions of this rule or with such frequency as to constitute a general business practice shall be considered a violation of the ORS 746.230.

(7) The requirements of this rule apply to a long term care insurance policy issued or renewed after July 1, 2012.

(8) The provisions of this rule supersede any other claim payment requirement found in ORS 746.230.

Stat. Auth.: ORS 731.244, 743.655 & 2011 OL Ch. 69, Sec. 2 (Enrolled SB 88)
Stats. Implemented: ORS 743.655 & 2011 OL Ch. 69, Sec. 2 (Enrolled SB 88)
Hist.: ID 10-2007, f. 12-3-07, cert. ef. 1-1-08; ID 3-2012, f. & cert. ef. 2-14-12

Long Term Care Insurance
Outline of Coverage and Shopper's Guide

836-052-0776

Standard Format Outline of Coverage

(1) This rule implements, interprets and makes specific the provisions of ORS 743.655(7) in prescribing a standard format and the content of an outline of coverage. The format for the outline of coverage shall be as provided by the Department of Consumer and Business Services and displayed on the department’s website.

(2) The following requirements apply to the outline:

(a) The outline must be presented in the format prescribed on the department’s website and must be a free-standing document;

(b) The outline must be printed in no smaller than ten-point type;

(c) The outline may not contain material of an advertising nature;

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

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

[ED. NOTE: Exhibits referenced are available from the agency.]

Stat. Auth.: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 742.003, 742.005, 743.650, 743.655 & 743.656
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; ID 1-1996, f. & cert. ef. 1-12-96; Renumbered from 836-052-0600, ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08; ID 4-2011, f. & cert. ef. 2-10-11

836-052-0786

Requirement to Deliver Shopper's Guide

(1) A long-term care insurance Shopper's Guide in a form approved by the Director shall be provided to all prospective applicants of a long term care insurance policy, certificate or rider as provided in this rule.

(2) For the purpose of approving the form of a guide under this rule, the Director may consider the Shopper's Guide developed by the National Association of Insurance Commissioners, or any other guide, as a comparative standard.

(3) The Shopper's Guide shall be provided as follows:

(a) In the case of insurance producer solicitations, an insurance producer must deliver the Shopper's Guide prior to the presentation of an application or enrollment form.

(b) In the case of direct response solicitations, the Shopper's Guide must be presented in conjunction with any application or enrollment form.

(4) The requirement of a Shopper's Guide under this rule does not apply with respect to a life insurance policy or a rider containing accelerated long-term care benefits, but the insurer or producer shall furnish the policy summary required under OAR 836-052-0716.

Stat. Auth.: ORS 731, 742 & 743
Stats. Implemented: ORS 743.655(1)(a)
Hist.: ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; Renumbered from 836-052-0610, ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

836-052-0790

Disclosure of Benefits Paid

(1) Each insurer shall provide at a minimum the following information at least quarterly to each insured, or a designee of the insured, who is currently receiving, or has received during that quarter, any benefits under a qualified long term care partnership insurance policy:

(a) The total benefits paid by the insurer for services rendered during the quarter;

(b) The total amount of benefits paid to date under the policy; and

(c) A general disclosure statement that informs the policyholder or the designee of the policyholder:

(A) The benefits paid are pursuant to a long term care partnership policy; and

(B) To determine if the benefits paid would qualify for asset protection, the policyholder should contact their local Medicaid office.

(2) An insurer shall provide the information required under section (1) of this rule each quarter until the claim is no longer active. The insurer may include the information required in section (1) of this rule either in a separate report to the insured or as part of the explanation of benefits provided to the insured when the insurer pays benefits under the long term care partnership policy.

Stat. Auth.: ORS 731.244, 743.655, 743.656 & 746.240
Stats. Implemented: ORS 743.650, 743.655 & 743.656
Hist.: ID 4-2011, f. & cert. ef. 2-10-11

Notice of Termination of Group Health Insurance

836-052-0800

Purpose; Applicability

OAR 836-052-0800 to 836-052-0860 are adopted for the purpose of carrying out ORS 743.526, 743.560, 743.562 and 743.565.

Stat. Auth.: ORS 731.244, 743.526, 743.560 & 743.562
Stats. Implemented: ORS 743.526, 743.560 & 743.562
Hist.: ID 9-1992, f. 5-26-92, cert. ef. 7-1-92; ID 5-2002, f. & cert. ef. 2-6-02; ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

836-052-0810

Replacement Upon Termination

For purposes of the notice requirement under ORS 743.560, replacement of the terminated group health insurance coverage occurs when all classes of persons covered by the terminated policy are eligible for coverage:

(1) Under a group health insurance policy of the group policyholder that takes effect on the day after the end of the period through which coverage is paid up; or

(2) Under one or more group health insurance policies of the group policyholder in existence at the termination of the terminated policy.

Stat. Auth.: ORS 731.244, ORS 743.526, ORS 743.560 & ORS 743.562
Stats. Implemented: ORS 743.560
Hist.: ID 9-1992, f. 5-26-92, cert. ef. 7-1-92; ID 5-2002, f. & cert. ef. 2-6-02

836-052-0840

Termination of Coverage

For purposes of ORS 743.560 and 743.562, termination of coverage under a group health insurance policy includes the amendment or reissuance of a policy to delete one or more classes of certificate holders from coverage.

Stat. Auth.: ORS 731.244, ORS 743.526, ORS 743.560 & ORS 743.562
Stats. Implemented: ORS 743.560
Hist.: ID 9-1992, f. 5-26-92, cert. ef. 7-1-92; ID 5-2002, f. & cert. ef. 2-6-02

836-052-0850

Multiple Employer Trusts

(1) For purposes of ORS 743.560 and 743.562, a multiple employer trust is a trust to which a group health insurance policy has been issued, that is established and controlled by the insurer issuing the group health insurance policy.

(2) Termination of a group health insurance policy includes termination of an employer's participation in a group health insurance policy issued to a multiple employer trust described in this rule, whether or not the group policy itself terminates.

(3) OAR 836-052-0840(1) does not apply to a multiple employer trust described in this rule. Instead, termination by an employer of the employer's participation in a group health insurance policy issued to a multiple employer trust commences on the effective date of the employer's termination of participation, unless participation is terminated because the policy is terminated.

Stat. Auth.: ORS 731.244, ORS 743.526, ORS 743.560 & ORS 743.562
Stats. Implemented: ORS 743.526, ORS 743.560 & ORS 743.562
Hist.: ID 9-1992, f. 5-26-92, cert. ef. 7-1-92

836-052-0860

Form of Notice to Group Policyholder

(1) The form of the notice required by ORS 743.560 shall be as established in this rule. The form shall be printed in 12 point type, one point leaded, and shall provide at least the following:

(a) The date of the notice;

(b) A statement to the effect that the group coverage provided through the group policyholder by the insurer has terminated or will terminate, and the effective date of termination. If termination will occur because of nonpayment of premium, the statement must also provide that the premium was not received, that the policy will be terminated as of the premium due date if the premium is not received by the end of the grace period applicable to the policy and that the insurer will furnish no further notice as to termination, and must include the date of termination. The effective date of a termination for a reason other than nonpayment of premium shall be the date preceding the first day that a group policyholder is effectively without coverage under the group health insurance policy;

(c) The number of the group health insurance policy;

(d) The name of the employer;

(e) An explanation of the rights of the certificate holders under federal law and state law regarding the continuation of coverage.

(2) In the notice to a group policyholder under this rule, the insurer need include only the information that applies to the group policyholder and certificate holder,

(3) An insurer may satisfy the notice requirements of ORS 743.560(2) and (3) in a single notice that is mailed by first class mail to the last known address of the policyholder at least 10 days prior to the end of the grace period under the policy. The notice must also satisfy the requirements of ORS 743.565.

(4) An insurer may give the notice required by ORS 743.560(3) electronically if, at the time of application or renewal, the insurer allows an applicant or enrollee the opportunity to receive such notices by regular mail, and the enrollee fails to exercise that opportunity.

Stat. Auth.: ORS 731.244, 743.526, 743.560 & 743.562
Stats. Implemented: ORS 743.560 & 743.777
Hist.: ID 9-1992, f. 5-26-92, cert. ef. 7-1-92; ID 5-2002, f. & cert. ef. 2-6-02; ID 19-2006, f. & cert. ef. 9-26-06; ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Mandated Benefits

836-052-1000

Prosthetic and Orthotic Devices

(1) This rule is adopted under the authority of ORS 731.244 and 743A.144, for the purpose of implementing 743A.144.

(2) The list of prosthetic and orthotic devices and supplies in the Medicare fee schedule for Durable Medical Equipment, Prosthetics, Orthotics and Supplies is adopted for the purpose of listing the prosthetic and orthotic devices and supplies for which coverage is required by ORS 743A.144, insofar as the list is consistent with 743A.144. The list is limited to those rigid or semi rigid devices used for supporting a weak or deformed leg, foot, arm, hand, back or neck, or restricting or eliminating motion in a diseased or injured leg, foot, arm, hand, back or neck or an artificial limb device or appliance designed to replace in whole or in part an arm or a leg that the Centers for Medicare and Medicaid Services (CMS) has designated in the 4-digit L Codes of Healthcare Common Procedure Coding System (HCPC) Level II, which is accessible by selecting the link for the 2012 Alpha-Numeric HCPCS File at: https://www.cms.hhs.gov/HCPCSReleaseCodeSets/ANHCPCS/list.asp.

(3) Under ORS 743A.144(4), benefits payable under a policy may not be subject to internal or separate limits or caps other than the policy lifetime maximum benefits as they apply to the coverage for prosthetic and orthotic devices required by ORS 743A.144.

(4) A managed care plan to which ORS 743A.144(6) applies is a health insurance policy that requires an enrollee to use a closed network of providers managed, owned, under contract with or employed by the insurer in order to receive benefits under the plan.

Stat. Auth: ORS 731.244 & 743A.144
Stats. Implemented: ORS 743A.144
Hist.: ID 12-2007, f. 12-18-07, cert. ef. 1-1-08; ID 12-2009, f. & cert. ef. 12-18-09; ID 8-2011, f. & cert. ef. 2-23-11; ID 8-2012, f. & cert. ef. 4-5-12

The official copy of an Oregon Administrative Rule is contained in the Administrative Order filed at the Archives Division, 800 Summer St. NE, Salem, Oregon 97310. Any discrepancies with the published version are satisfied in favor of the Administrative Order. The Oregon Administrative Rules and the Oregon Bulletin are copyrighted by the Oregon Secretary of State. Terms and Conditions of Use

Oregon Secretary of State • 136 State Capitol • Salem, OR 97310-0722
Phone: (503) 986-1523 • Fax: (503) 986-1616 • oregon.sos@state.or.us

© 2013 State of Oregon All Rights Reserved​