SB 1091, as introduced, Liu. Long-term care insurance.
Under existing law, the Department of Insurance, headed by the Insurance Commissioner, licenses and regulates insurers. Existing law divides insurance into various classes, including long-term care insurance, which includes an insurance policy, certificate, or rider advertised, marketed, offered, solicited, or designed to provide coverage for diagnostic, preventative, therapeutic, rehabilitative, maintenance, or personal care services that are provided in a setting other than an acute care unit of a hospital.
This bill would, among other things, provide that long-term care insurance also includes disability income coverage that provides benefits that may commence after the insured has reached Social Security’s normal retirement age and family expense disability insurance policies, riders, endorsements, or amendments that provide coverage for disabled persons during periods of institutional care, as specified. The bill would provide that long-term care insurance does not include a policy, rider, endorsement, or amendment that provides benefits triggered by activities of daily living, and that complies with specified requirements, including that it not be advertised, marketed, offered, or designed as long-term care insurance or as providing coverage for long-term care services.
Existing law requires an insurer to report annually by June 30 the total number of claims denied by each class of business in the state, as specified, and to provide a policyholder or certificate holder whose claim is denied written notice of the reasons for denial, as specified.
This bill would require an insurer to adopt and implement reasonable standards for the prompt investigation and processing of claims. The bill would require an insurer to report information regarding denial of requests for treatment under an alternate plan of care, and to provide a policyholder or certificate holder written notice of denial of those requests, as described above regarding denial of insurance claims.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
The Legislature finds and declares both of the
2following:
3(a) Long-term care insurance is a vital lifeline for many of
4California’s aging population.
5(b) Ensuring that the insurance available to consumers is fair
6and accessible is important to values and quality of life.
It is the intent of the Legislature to ensure that
8insurance products provide appropriate benefits that fit consumers’
9needs.
Section 10231.2 of the Insurance Code is amended to
11read:
begin insert(a)end insertbegin insert end insert “Long-term care insurance” includes any
13insurance policy, certificate, or rider advertised, marketed, offered,
14solicited, or designed to provide coverage for diagnostic,
15preventive, therapeutic, rehabilitative, maintenance, or personal
16care services that are provided in a setting other than an acute care
17unit of a hospital. Long-term care insurance includes all products
18containing any of the following benefit types:begin delete coverageend delete
19begin insert(1)end insertbegin insert end insertbegin insertCoverageend insert for institutionalbegin delete careend deletebegin insert care,end insert including care in a
20nursing home, convalescent facility, extended care facility,
21custodial care facility, skilled nursing facility, or personal care
22begin delete home; homeend deletebegin insert home.end insert
23begin insert(2)end insertbegin insert end insertbegin insertHomeend insert
carebegin delete coverageend deletebegin insert coverage,end insert including home health care,
24personal care, homemaker services, hospice, or respitebegin delete care; or begin insert care.end insert
25community-based coverageend delete
26begin insert(3)end insertbegin insert end insertbegin insertCommunity-based coverage,end insert including adult day care,
27hospice, or respite care.begin delete Long-termend delete
P3 1(4) Disability income coverage that provides benefits that may
2commence after the insured has reached Social Security’s normal
3retirement age.
4(5) Family expense disability insurance policies, riders,
5endorsements, or amendments that provide coverage for disabled
6persons during periods of institutional care, unless the benefits
7are designed to cover expenses not related to the institutional care.
8begin insert(b)end insertbegin insert end insertbegin insert(1)end insertbegin insert end insertbegin insertLong-termend insert care insurance includes disability based
9long-term carebegin delete policiesend deletebegin insert
policies,end insert but does not include insurance
10designed primarily to provide Medicare supplement or major
11medical expense coverage.
12(2) Long-term care insurance does not include an insurance
13policy rider, endorsement, or amendment that provides benefits
14triggered by activities of daily living, as defined in paragraph (2)
15of subdivision (a) of Section 10232.8, and that complies with both
16of the following:
17(A) The benefits are not dependent on, or vary in amount based
18on, the receipt of long-term care services.
19(B) The coverage is not advertised, marketed, offered, or
20designed as long-term care
insurance or as providing coverage
21for long-term care services.
22Long-term
end delete
23begin insert(c)end insertbegin insert end insertbegin insertLong-termend insert care policies, certificates, and riders shall be
24regulated under this chapter. The commissioner shall review and
25approve individual and group policies, certificates, riders, and
26outlines of coverage. Other applicable laws and regulations shall
27also apply to long-term care insurance insofar as they do not
28conflict with the provisions in this chapter. Long-term care benefits
29designed to provide coverage of 12 months or more that are
30contained in or amended to Medicare supplement or other
disability
31policies and certificates shall be regulated under this chapter.
Section 10235.9 of the Insurance Code is amended to
33read:
(a) An insurer shall adopt and implement reasonable
35standards for promptly investigating and processing claims.
36(a)
end delete
37begin insert(b)end insert Every insurer shall reportbegin delete annuallyend deletebegin insert to the departmentend insert
by
38June 30begin delete theend deletebegin insert
of each year all of the following information:end insert
39begin insert(1)end insertbegin insert end insertbegin insertTheend insert total number of claims denied by each class of business
40in the state and the number of these claims denied for failure to
P4 1meet the waiting period or because of a preexisting condition as
2of the end of the preceding calendar year.
3(2) The number of requests from insureds for treatment to be
4provided under an alternate plan of care, any reason used by the
5insurer to deny those requests, and the number of requests denied
6for each reason.
7(b)
end delete
8begin insert(c)end insert The insurer shall provide every policyholder or certificate
9holder whose claim isbegin delete deniedend deletebegin insert denied, or whose request for
10treatment under an alternate plan of care has been denied,end insert a
11written notice within 40 days of the date of denial of the reasons
12for the denial and all information directly related to the denial.
13Insurers shall annually report to the department the number of
14denied claims.
15(c)
end delete
16begin insert(d)end insert The department shall make available to the public, upon
17request, the denial rate of claims bybegin delete insurer.end deletebegin insert insurer pursuant to
18subdivision (b).end insert
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