CHAPTER 1651. LONG-TERM CARE BENEFIT PLANS
INSURANCE CODE
TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES
SUBTITLE I. SPECIALIZED COVERAGES
CHAPTER 1651. LONG-TERM CARE BENEFIT PLANS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1651.001. APPLICABILITY OF CHAPTER. (a) Notwithstanding
Section 101.053(b)(5) and subject to Subsection (b), this chapter
applies only to:
(1) an individual long-term care benefit plan that is delivered
or issued for delivery in this state;
(2) a group long-term care benefit plan that is:
(A) delivered or issued for delivery in this state; and
(B) issued to an eligible group as described by Subchapter B,
Chapter 1251;
(3) a certificate issued under a group long-term care benefit
plan issued to an eligible group as described by Subchapter B,
Chapter 1251, if the certificate is delivered or issued for
delivery in this state, regardless of the place where the plan is
delivered or issued for delivery; and
(4) an evidence of coverage delivered or issued for delivery in
this state for long-term care.
(b) This chapter applies only to a policy, certificate, or
evidence of coverage that is issued by:
(1) a capital stock insurance company, including a life, health
and accident, or general casualty insurance company;
(2) a mutual life insurance company;
(3) a mutual assessment life insurance company, including a
statewide mutual assessment corporation, local mutual aid
association, and burial association;
(4) a mutual or mutual assessment association, including an
association subject to Section 887.101;
(5) a mutual insurance company other than a life insurance
company;
(6) a mutual or natural premium life or casualty insurance
company;
(7) a fraternal benefit society;
(8) a Lloyd's plan insurer;
(9) a reciprocal or interinsurance exchange;
(10) a nonprofit medical, hospital, or dental service
corporation, including a company subject to Chapter 842;
(11) a stipulated premium company;
(12) a health maintenance organization under Chapter 843; or
(13) another insurer required to be licensed by the department.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1651.002. EXEMPTIONS. This chapter does not apply to:
(1) a certificate that is delivered or issued for delivery in
this state under a single employer or labor union group policy
that is delivered or issued for delivery outside this state; or
(2) a benefit plan that is not advertised, marketed, or offered
as a long-term care benefit plan or nursing home benefit plan.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1651.003. LONG-TERM CARE BENEFIT PLAN DEFINED. (a) In
this chapter, "long-term care benefit plan" means an insurance
policy or group certificate, or rider to the policy or
certificate, or evidence of coverage issued by a health
maintenance organization subject to Chapter 843, that is
advertised or marketed as providing, or offered or designed to
provide, coverage for not less than 12 consecutive months for
each covered individual on an expense-incurred, indemnity,
prepaid, or other basis for one or more necessary or medically
necessary diagnostic, preventive, therapeutic, rehabilitative,
maintenance, or personal care services provided in a setting
other than an acute care unit of a hospital.
(b) The term includes a plan or rider, other than a group or
individual annuity or life insurance policy, that provides for
payment of benefits based on cognitive impairment or the loss of
functional capacity.
(c) The term does not include an insurance policy, group
certificate, or evidence of coverage that is offered primarily to
provide:
(1) basic Medicare supplement coverage, basic hospital expense
coverage, basic medical-surgical expense coverage, hospital
confinement indemnity coverage, major medical expense coverage,
disability income protection coverage, accident-only coverage,
specified disease or specified accident coverage, or limited
benefit health coverage; or
(2) basic or single health care services.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1651.004. RULES. (a) In addition to other rules required
or authorized by this chapter, the department may adopt
reasonable rules that are necessary and proper to carry out this
chapter.
(b) Rules adopted under this section must include requirements
no less favorable than the minimum standards for long-term care
benefit plans adopted in any model laws or regulations relating
to minimum standards for benefits for long-term care benefit
plans and in accordance with all applicable federal law.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1651.005. CONSTRUCTION OF CHAPTER. This chapter may not be
construed to enlarge the powers of an entity listed in Section
1651.001.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1651.006. CONFLICTS WITH OTHER PROVISIONS. This chapter
prevails to the extent of any conflict with another provision of
this code.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
SUBCHAPTER B. BENEFIT PLAN STANDARDS
Sec. 1651.051. MINIMUM STANDARDS. (a) The commissioner by rule
shall establish:
(1) specific standards for provisions of long-term care benefit
plans; and
(2) standards for full and fair disclosure setting forth the
manner, content, and required disclosures for the marketing and
sale of those benefit plans.
(b) The standards are in addition to and must be in accordance
with:
(1) applicable laws of this state, including Chapter 1201;
(2) applicable federal law; and
(3) any rules, regulations, and standards required by federal
law.
(c) The standards must address:
(1) terms of renewability;
(2) initial and subsequent conditions of eligibility;
(3) nonduplication of coverage;
(4) coverage of dependents;
(5) coverage of parents of the insured or enrollee and parents
of the spouse of the insured or enrollee;
(6) preexisting conditions;
(7) termination of insurance;
(8) continuation or conversion;
(9) probationary periods;
(10) benefit limitations, exceptions, and reductions;
(11) elimination periods;
(12) requirements for replacement;
(13) recurrent conditions;
(14) definitions of terms; and
(15) inflation protection.
(d) The standards may:
(1) establish standard claim forms;
(2) establish standard benefits for:
(A) skilled nursing care;
(B) intermediate nursing care;
(C) custodial care; and
(D) home health care;
(3) require coverage for skilled nursing care, intermediate
nursing care, and custodial care to facilitate comparison among
long-term care products;
(4) require long-term care benefit plan issuers to offer
coverage for home health care benefits;
(5) require that rates may not be increased for a covered
individual unless:
(A) the covered individual requests and receives a change of
benefits; or
(B) the increase applies to all members of the class to which
the individual has been assigned by the benefit plan issuer; or
(6) require a benefit plan issuer to pay for a service covered
by the benefit plan that is provided by an institution licensed
to provide that service under Chapter 242, Health and Safety
Code.
(e) Rules adopted under this section must include requirements
no less favorable than the minimum standards of benefits for
long-term care benefit plans adopted in any model laws or
regulations relating to minimum standards for benefits for
long-term care benefit plans and required by federal law.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1651.052. PREEXISTING CONDITIONS. (a) A long-term care
benefit plan may not contain a provision that denies coverage for
a claim for losses incurred more than six months after the
effective date of coverage for a preexisting condition.
(b) A long-term care benefit plan may not define a preexisting
condition more restrictively than as 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.
(c) The commissioner by rule may:
(1) establish additional reasonable regulation of preexisting
conditions consistent with this section and Section 1651.051; and
(2) extend a limitation period specified in this section as to a
specific age group category in a specific benefit plan form if
the commissioner finds that the extension is in the best interest
of the public.
(d) Rules adopted under this section must comply with Section
1651.051(e).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1651.053. LOSS RATIO STANDARDS. (a) A long-term care
benefit plan must provide a benefit plan holder with benefits
that are reasonable in relation to the rates charged.
(b) The commissioner shall adopt reasonable rules to establish
minimum standards for loss ratios of long-term care benefit plans
on the basis of:
(1) incurred claims experience;
(2) earned premiums;
(3) the period for which rates are computed to provide coverage;
(4) experienced and projected trends;
(5) concentration of experience within early benefit plan
duration;
(6) expected claim fluctuations;
(7) experience refunds;
(8) adjustments;
(9) dividends;
(10) renewability features;
(11) all relevant expense factors;
(12) interest;
(13) reserves;
(14) mix of business by risk classification; and
(15) product features otherwise affecting claims experience.
(c) Annually, each entity providing a long-term care benefit
plan in this state shall:
(1) file its rates, rating schedule, and supporting
documentation to demonstrate compliance with the applicable loss
ratio standards of this state; and
(2) comply with any other filing requirement adopted by the
commissioner relating to loss ratios.
(d) Rules adopted under this section shall be no less favorable
to the holders of long-term care benefit plans than any model
laws, rules, and regulations adopted in connection with minimum
standards for benefits for long-term care benefit plans.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1651.054. NOTICE OF RIGHT TO REFUND. (a) In this section,
"applicant" means:
(1) in the case of an individual long-term care benefit plan,
the individual who seeks to contract for insurance or other
health benefits; and
(2) in the case of a group long-term care benefit plan, the
proposed certificate holder.
(b) A long-term care benefit plan must have a notice prominently
printed on the first page of or attached to the benefit plan
document.
(c) The notice must state in substance that, if the applicant is
not satisfied for any reason after examining the benefit plan
document, the applicant is entitled to:
(1) return the document not later than the 30th day after the
date of its delivery; and
(2) have any premium refunded.
(d) The long-term care benefit plan issuer shall pay in a timely
manner the refund directly to the individual or entity that paid
the premium.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1651.055. RATE STABILIZATION. (a) The commissioner shall
adopt rules to stabilize long-term care premium rates by:
(1) ensuring that:
(A) initial rates for long-term care benefit plan forms are
adequate; and
(B) any rate schedule increases for long-term care benefit plans
made after issuance of the plans are justified, adequate, and
reasonable in relation to benefits provided to plan holders;
(2) requiring any appropriate plan terms;
(3) imposing penalties on insurers or other entities subject to
this chapter that violate a rule adopted under this section; and
(4) protecting plan holders affected by a rate schedule
increase.
(b) Except as provided by this subsection, the commissioner
shall adopt rules under this section that are consistent with
nationally recognized models relating to the stabilization of
long-term care premium rates that existed on January 1, 2001. The
commissioner may adopt rules consistent with any of those models
as they are amended after January 1, 2001. The commissioner shall
adopt rules under this subsection that:
(1) to the extent possible, contribute to the uniformity of
state laws; and
(2) protect consumers.
(c) In adopting rules under this section, the commissioner may
exempt long-term care benefit plans from the requirements of
Sections 1651.053(a), (b), and (d).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1651.056. REVIEW; APPROVAL OR DISAPPROVAL OF PREMIUM RATES.
(a) A long-term care premium rate may not be used until the
rate has been filed with the department and approved by the
commissioner.
(b) The commissioner may disapprove a long-term care premium
rate that is not actuarially justified or does not comply with
standards established under this chapter or adopted by rule by
the commissioner.
(c) An insurer who obtains the commissioner's approval of an
increase of a long-term care premium rate under Subsection (a)
shall:
(1) notify policyholders of the scheduled rate increase at least
45 days prior to the date that the policyholder is required to
make a premium payment at the increased rate; and
(2) provide contingent nonforfeiture benefits consistent with
nationally recognized models and rules adopted by the
commissioner.
Added by Acts 2009, 81st Leg., R.S., Ch.
1374, Sec. 1, eff. September 1, 2009.
SUBCHAPTER C. PARTNERSHIP FOR LONG-TERM CARE PROGRAM
Sec. 1651.101. DEFINITIONS. In this subchapter:
(1) "Approved plan" means a long-term care benefit plan that is
approved by the department under this subchapter.
(2) "Dollar-for-dollar asset disregard" and "asset protection"
have the meanings assigned by Section 32.251, Human Resources
Code.
(3) "Medical assistance program" means the medical assistance
program established under Chapter 32, Human Resources Code.
(4) "Partnership for long-term care program" means the program
established under Subchapter F, Chapter 32, Human Resources Code,
and this subchapter.
Added by Acts 2007, 80th Leg., R.S., Ch.
795, Sec. 3, eff. March 1, 2008.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
87, Sec. 27.002(13), eff. September 1, 2009.
Sec. 1651.102. APPLICABILITY. Except to the extent of a
conflict, Subchapters A and B apply to a plan issued in
accordance with this subchapter.
Added by Acts 2007, 80th Leg., R.S., Ch.
795, Sec. 3, eff. March 1, 2008.
Sec. 1651.103. ASSISTANCE OF DEPARTMENT. The department shall
assist the Health and Human Services Commission as necessary for
the commission to perform its duties and functions with respect
to the administration of the partnership for long-term care
program.
Added by Acts 2007, 80th Leg., R.S., Ch.
795, Sec. 3, eff. March 1, 2008.
Sec. 1651.104. LONG-TERM CARE INSURANCE POLICY FOR PARTNERSHIP
FOR LONG-TERM CARE PROGRAM. The commissioner, in consultation
with the Health and Human Services Commission, shall adopt
minimum standards for a long-term care benefit plan that may
qualify as an approved plan under the partnership for long-term
care program. The standards must be consistent with provisions
governing the expansion of a state long-term care partnership
program established under the federal Deficit Reduction Act of
2005 (Pub. L. No. 109-171).
Added by Acts 2007, 80th Leg., R.S., Ch.
795, Sec. 3, eff. March 1, 2008.
Sec. 1651.105. REQUIRED TRAINING. (a) Each individual who
sells a long-term care benefit plan under the partnership for
long-term care program must complete training and demonstrate
evidence of an understanding of these plans and how the plans
relate to other public and private coverage of long-term care.
(b) Each long-term care benefit plan issuer that offers a plan
under the partnership for long-term care program shall certify to
the commissioner, in the form required by the commissioner, that
each individual who sells the plan on behalf of the issuer
complies with the requirements of this section.
Added by Acts 2007, 80th Leg., R.S., Ch.
795, Sec. 3, eff. March 1, 2008.
Sec. 1651.106. EFFECT OF DISCONTINUATION OF PROGRAM ON POLICY.
If the partnership for long-term care program is discontinued, an
individual who purchased an approved plan before the date the
program is discontinued remains eligible to receive
dollar-for-dollar asset disregard and asset protection under the
medical assistance program.
Added by Acts 2007, 80th Leg., R.S., Ch.
795, Sec. 3, eff. March 1, 2008.
Sec. 1651.107. RULES. The commissioner may adopt rules as
necessary to implement this subchapter.
Added by Acts 2007, 80th Leg., R.S., Ch.
795, Sec. 3, eff. March 1, 2008.