Section 65.09 - Requirements for DisclosureAll individual and group policies of long-term care insurance must adequately disclose all policy provisions, including but not limited to the following provisions.
(1)The first page of the policy must disclose the following: (a) If the policy does not provide coverage for care in a nursing home, a notation of the fact shall be prominently attached to the first page of the policy in not less than 18-point type or in some other manner that distinguishes it from the print otherwise appearing in the policy.(b) The following statement: "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) A section in boldface type highlighted on the first page of the policy shall either list all preexisting condition exclusions or limitations or refer the individual to the section within the policy that lists all pre-existing condition exclusions or limitations.(d) A renewability section notice shall clearly identify whether the policy is noncancelable or guaranteed renewable, and whether it is being issued on other than an individual basis (policies providing conversion privileges must specify the benefits to be provided or must state that the converted coverage shall be on the policy form then being issued by the carrier for this purpose).(e)Qualification for Federal Income Tax Exemptions and Certain Massachusetts Mass Health (Medicaid) Exemptions.1. All individual, group and employment-based group policies that are intended to qualify for certain federal income tax exemptions must comply with standards set forth in the federal Internal Revenue Code and related regulations.2. All individual, group and employment-based policies issued on or after March 15, 1999 that are intended to qualify for exemptions from certain Massachusetts Mass Health (Medicaid) provisions including the financial eligibility exemption in M.G.L. c. 118E, §25 and the liability exemption in M.G.L. c. 118E, § 33, must comply with the individual policy requirements of 211 CMR 65.05 and the minimum coverage requirements of 130 CMR 515.014. All such policies issued prior to March 15, 1999, need only comply with the minimum standards of 211 CMR 65.05, and the limitations and exclusions provisions of 211 CMR 65.06 that were effective from April 1, 1989 through September 2, 1999. The provisions of 211 CMR 65.09(1)(e)2. shall apply regardless of whether the policy is issued within or outside Massachusetts.3. There shall be on the face of the policy or certificate, or a sticker attached to the first page of the policy or certificate, a notice that includes the following in substantially the same language and format: FEDERAL INCOME TAX EXEMPTIONS: This policy ( IS)(IS NOT) intended to be a federally qualified long-term care insurance contract under section 7702B(b) of the Internal Revenue Code of 1986, as amended.
STATE MASS HEALTH (MEDICAID) EXEMPTIONS: This policy (IS) (IS NOT) intended to satisfy Massachusetts' minimum long-term care insurance coverage requirements as of the policy's effective date for certain as set and liability exemptions under the Massachusetts Mass Health (Medicaid) Program. Please note that there may be other Mass Health (Medicaid) requirements to qualify for these exemptions.
Please read Your Options for Financing Long-Term Care: A Massachusetts Guide for important information about the federal and state exemptions. PLEASE NOTE THAT STATE AND FEDERAL LAWS ARE SUBJECT TO CHANGE AND THAT FEDERAL AND STATE EXEMPTIONS MAY NOT APPLY TO THIS POLICY AT A FUTURE DATE.
(2)Policy Language. (a) All terms used in the policy must be fully explained so that the insured understands their relationship to the benefits covered. No misleading policy names may be used ( 211 CMR 65.102 includes samples of acceptable language). The policy, riders and all amendments, as well as the application, outline of coverage and other required disclosure materials distributed to any potential applicant must be presented in no less than 12-point type and must satisfy the readability standards of M.G.L. c. 175, § 2B.(b) Riders or endorsements that provide a benefit for which a specific premium is charged must show the premium on the application, rider, or elsewhere in the policy. Any rider that reduces benefits requires a signed acceptance by the policyholder or certificate holder.(3)Separate Disclosure Forms. (a) No long-term care insurance policy may be delivered or issued for delivery in Massachusetts unless the potential insured receives Your Options for Financing Long-Term Care: A Massachusetts Guide, including any inserts, as prescribed by the commissioner, regarding changes to state or federal laws, no later than the first face-to-face contact between the potential insured and the agent, or in cases of direct response sales, at the time that the application or enrollment form is sent to the potential insured.(b) No long-term care insurance policy may be delivered or issued for delivery in Massachusetts unless the applicant receives a policy illustration in a form that is substantially similar to the one set forth in 211 CMR 65.100. The carrier or its agents must deliver the policy illustration no later than the time of each policy proposal or quote. In the case of direct response sales, the carrier must deliver the form at the time that the application or enrollment form is sent to the potential insured.(c) No long-term care insurance policy may be delivered or issued for delivery in Massachusetts unless the applicant receives an outline of coverage substantially similar to the one set forth in 211 CMR 65.101. The carrier or its agent must deliver the outline of coverage prior to the presentation of the application or enrollment form. In the case of direct response sales, the carrier must deliver the outline of coverage at the time that the application or enrollment form is sent to the potential insured. The carrier must also make an outline of coverage available at any time at the potential insured's request. The outline of coverage must be a document separate from the policy. Text that is capitalized or underscored in the standard format of the outline of coverage may be emphasized by other means that provide prominence equivalent to such capitalization or underscoring.(4)Special Disclosure Forms. (a)Other Than Requested. If the policy is issued on a basis other than that applied for, a disclosure statement properly describing the actual policy terms must accompany the policy when it is delivered and must contain a statement substantially similar to the following: "NOTICE: Read this disclosure statement carefully. The coverage you originally applied for has not been issued. This policy is therefore not identical to the coverage you requested, but it differs in the following respects: [list]."(b)Required Disclosure Regarding Suitability Standards. If the carrier uses a worksheet or other marketing material to examine a potential applicant's financial situation, or uses any other marketing material that purport to provide guidance as to whether the applicant is suitable for long-term care insurance and subsequently notifies the applicant that the carrier finds the applicant to be suitable for long-term care insurance, the carrier shall provide the following disclosure notice: "Although [the carrier] may have determined that you meet [its] internal standards of suitability, there are other considerations that might influence your decision about whether this product is appropriate for you. [The company] uses the following standards to determine suitability for its long-term care insurance policies: [list]
Please note that you should not rely upon this statement alone in making this purchase. You may want to contact a financial advisor for additional information."
(c)Required Disclosure Regarding Changes to Mass Health (Medicaid) Eligibility and Recovery Exemptions Under 130 CMR 515.014. If the carrier issued a policy that met the standards of 130 CMR 515.014 and said standards are subsequently changed, the carrier shall notify all insureds whose policies will no longer satisfy the Mass Health (Medicaid) standards and shall offer all such insureds on a guaranteed issue basis the opportunity to purchase needed benefits to meet the Mass Health (Medicaid) policy criteria. The rates for any change in benefits shall be based upon the rate characteristics for the insured at the time of policy change.(5)Required Disclosure for Medicare-Eligible Applicants. Carriers shall provide the Guide to Health Insurance for People with Medicare and disclosure notice as required by 211 CMR 42.09(4).