By Mr. Moore, a petition (accompanied by bill, Senate,
No. 613) of Richard T. Moore for legislation to promote
access to high quality, affordable long term care for
Massachusetts citizens. Financial Services.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. The General Laws are hereby amended by inserting after chapter 111M the following chapter:—
INDIVIDUAL LONG TERM CARE COVERAGE
Section 1. As used in this chapter, the following words shall, unless the context clearly requires otherwise, have the following meanings:—
“Applicant”, in the case of an individual long-term care insurance policy, the person who seeks to contract for benefits; or, in the case of a group long-term care insurance policy, the proposed certificate holder.
“Certificate”, a certificate issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery within the commonwealth.
“Commissioner”, the commissioner of insurance.
“Creditable coverage”, long term care insurance coverage of an individual under any of the following plans or as a named beneficiary receiving coverage on another’s plan with no lapse of coverage for more than 63 days and which provides for the equivalent value of 30 or more consecutive months of nursing home costs at the private duty rate with inflation adjustments: (a) an individual or group long term care insurance plan; (b) an individual or group annuities and life insurance policy or rider that provides directly, or supplements, long term care insurance coverage; (c) a savings or investment plan such as an IRA or a 401K; (d) a plan provided under the commonwealth long term care insurance program; (e) 10 U.S.C. 55; (f) a medical care program of the Indian Health Service or of a tribal organization; (g) a health plan offered under 5 U.S.C. 89; (h) an individual or group policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity; (i) qualified long term care insurance contract.
“Group long-term care insurance”, a long-term care insurance policy that is delivered or issued for delivery within the commonwealth and issued to:
(1) one or more employers or labor organizations, or to a trust or to the trustees of a fund established by 1 or more employers or labor organizations, or a 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; or
(2) any professional, trade or occupational association for its members or former or retired members, or combination thereof, if the association:
(i) is composed of individuals all of whom are, or were, actively engaged in the same profession, trade or occupation; and
(ii) has been maintained in good faith for purposes other than obtaining insurance; or
(3) an association, or a trust, or the trustees of a fund established, created or maintained for the benefit of members of one or more associations; but, before advertising, marketing or offering the policy within the commonwealth, the association, or the insurer of the association, shall file evidence with the commissioner that the association has at the outset a minimum of 100 persons and has been organized and maintained in good faith for purposes other than that of obtaining insurance; has been in active existence for at least 1 year; and have a constitution and bylaws that provide that:
(i) the association holds regular meetings not less than annually to further purposes of the members;
(ii) except for credit unions, the association collects dues or solicits contributions from members; and
(iii) the members have voting privileges and representation on the governing board and committees.
Thirty days after the filing, the association shall be considered to have satisfied the organizational requirements, unless the commissioner makes a finding that the association does not satisfy those organizational requirements.
(4) A group other than those described in paragraphs (1), (2) and (3), subject to a finding by the commissioner that:
(i) the issuance of the group policy is not contrary to the best interest of the public;
(ii) the issuance of the group policy would result in economies of acquisition or administration; and
(iii) the benefits are reasonable in relation to the premiums charged.
“Long-term care insurance”, any insurance policy or rider: (1) advertised, marketed, offered or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense incurred, indemnity, prepaid or other basis; (2) for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services; and (3) provided in a setting other than an acute care unit of a hospital including, but not limited to, an assisted living facility, a residential care facility or home health care. The term includes group and individual annuities and life insurance policies or riders that provide directly, or supplement, long-term care insurance. The term also includes a policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity. The term shall also include qualified long-term care insurance contracts. Long-term care insurance shall not include any insurance policy that is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income or related asset-protection coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage. With regard to life insurance, this term shall not include life insurance policies that accelerate the death benefit specifically for 1 or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention or permanent institutional confinement, and that provide the option of a lump-sum payment for those benefits and where neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long-term care. Notwithstanding any other provision of this chapter, any product advertised, marketed or offered as long-term care insurance shall be subject to this chapter.
“Policy”, any policy, contract, subscriber agreement, rider or endorsement delivered or issued for delivery within the commonwealth by an insurer authorized to issue policies upon the lives of persons in the commonwealth or to provide accident and health insurance under chapter 175; a fraternal benefit society authorized under chapter 176; a nonprofit hospital service corporation authorized under chapter 176A, a nonprofit medical service corporation authorized under chapter 176B or a health maintenance organization authorized under chapter 176G.
(1) “Qualified long-term care insurance contract” or “federally tax-qualified long-term care insurance contract” an individual or group insurance contract that meets the requirements of Section 7702B(b) of the Internal Revenue Code of 1986, as amended, as follows:
(a) The only insurance protection provided under the contract is coverage of qualified long-term care services. A contract shall not fail to satisfy the requirements of this subparagraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate;
(b) The contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act, as amended, or would be so reimbursable but for the application of a deductible or coinsurance amount. The requirements of this subparagraph do not apply to expenses that are reimbursable under Title XVIII of the Social Security Act only as a secondary payor. A contract shall not fail to satisfy the requirements of this subparagraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate;
(c) The contract is guaranteed renewable, within the meaning of section 7702B(b)(1)(C) of the Internal Revenue Code of 1986, as amended;
(d) The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed except as provided in paragraph (e);
(e) All refunds of premiums, and all policyholder dividends or similar amounts, under the contract are to be applied as a reduction in future premiums or to increase future benefits, except that a refund on the event of death of the insured or a complete surrender or cancellation of the contract cannot exceed the aggregate premiums paid under the contract; and
(f) The contract meets the consumer protection provisions set forth in Section 7702B(g) of the Internal Revenue Code of 1986, as amended.
(2) “Qualified long-term care insurance contract” or “federally tax-qualified long term care insurance contract” also means the portion of a life insurance contract that provides long-term care insurance coverage by rider or as part of the contract and that satisfies the requirements of Sections 7702B(b) and (e) of the Internal Revenue Code of 1986, as amended.
“Resident”, a person who has:—
(1) obtained an exemption under clause Seventeenth, Seventeenth C, Seventeenth C ½, Seventeenth D, Eighteenth, Twenty-second, Twenty-second A, Twenty-second B, Twenty-second C, Twenty-second D, Twenty-second E, Thirty- seventh, Thirty-seventh A, Forty-first, Forty-first A, Forty-first B, Forty- first C, Forty-second or Forty-third of section 5 of chapter 59;
(2) obtained an exemption under section 5C of said chapter 59;
(3) filed a Massachusetts resident income tax return under chapter 62;
(4) obtained a rental deduction under subparagraph (9) of paragraph (a) of Part B of section 3 of chapter 62;
(5) declared in a home mortgage settlement document that the mortgaged property located in the commonwealth would be occupied as his principal residence;
(6) obtained homeowner's liability insurance coverage on property that was declared to be occupied as a principal residence;
(7) filed a certificate of residency and identified his place of residence in a city or town in the commonwealth in order to comply with a residency ordinance as a prerequisite for employment with a governmental entity;
(8) paid on his own behalf or on behalf of a child or dependent of whom the person has custody, resident in-state tuition rates to attend a state-sponsored college, community college or university;
(9) applied for and received public assistance from the commonwealth for himself or his child or dependent of whom he has custody;
(10) has a child or dependent, of whom he has custody, who is enrolled in a public school in a city or town in the commonwealth, unless the cost of such education is paid for by him, such child or dependent, or by another education jurisdiction;
(11) is registered to vote in the commonwealth;
(12) obtained any benefit, exemption, deduction, entitlement, license, permit or privilege by claiming principal residence in the commonwealth; or
(13) is a resident under any other written criteria under which the commissioner of revenue may determine residency in the commonwealth.
Section 2. (a) As of July 1, 2009, the following individuals age 35 and over shall obtain and maintain creditable coverage so long as it is deemed affordable under the schedule set by the board of the connector, established by chapter 176Q: (1) residents of the commonwealth; or (2) individuals who become residents of the commonwealth within 63 days, in the aggregate. Residents who within 63 days have terminated any prior creditable coverage, shall obtain and maintain creditable coverage within 63 days of such termination. If, at any time, because of retirement or disability, such individuals can no longer afford the premium, the connector shall establish a sliding scale reimbursement based on earned income only.
(b) Every person, age 35 and over, who files an individual income tax return as a resident of the commonwealth, either separately or jointly with a spouse, shall indicate on the return, in a manner prescribed by the commissioner of revenue, whether such person (i) had creditable coverage in force for each of the 12 months of the taxable year for which the return is filed as required under paragraph (a) whether covered as an individual or as a named beneficiary of a policy covering multiple individuals, (ii) claims an exemption under section 3, or (iii) had a certificate issued under section 3 of chapter 176Q. If the person fails to indicate or indicates that he did not have such coverage in force, then a penalty shall be assessed on the return. If the person indicates that he had such coverage in force but the commissioner determines, based on the information available to him, that such requirement of paragraph (a) was not met, then the commissioner shall assess the penalty. If in any taxable year, in whole or in part, a taxpayer does not comply with the requirement of paragraph (a), the commissioner shall retain any amount overpaid by the taxpayer for purposes of making payments described in paragraph (c); provided, however, that the amount retained shall not exceed 50 per cent of the minimum insurance premium for creditable coverage for which the individual would have qualified during the previous year. The penalty shall be assessed for each of the months the individual did not meet the requirement of paragraph (a); provided, that any lapse in coverage of 63 days or less shall not be counted in calculating the penalty; and, provided further, that nothing in this paragraph shall be considered to authorize the commissioner to retain any amount for such purposes that otherwise would be paid to a claimant agency or agencies as debts described in clauses (i) to (vii), inclusive, of section 13 of chapter 62D. If the amount retained is insufficient to meet the penalty assessed, the commissioner shall notify the taxpayer of the balance due on the penalty and related interest. The commonwealth shall have all enforcement and collection procedures available under chapter 62C to collect any penalties assessed under this section.
(c) The commissioner shall deposit all penalties collected into the Commonwealth Long Term Care Trust Fund, established by section 32A of chapter 118E.
Section 3. An individual shall be exempt from section 2(a) if he files a sworn affidavit with his income tax return stating that he did not have creditable coverage and that his sincerely held religious beliefs are the basis of his refusal to obtain and maintain creditable coverage during the 12 months of the taxable year for which the return was filed. Any individual who claimed an exemption but received long term care during the taxable year for which the return is filed shall be liable for providing or arranging for full payment for the medical health care and be subject to the penalties in subsection (b) of section 2.
Section 4. An individual subject to section 2(a), who disputes the determination of applicability or affordability, as enforced by the department of revenue, may seek a review of this determination through an appeal established by the board of the commonwealth health insurance connector, under chapter 176Q; provided, however, that no additional penalties shall be enforced against an individual seeking review until the review is complete and any subsequent appeals are exhausted.
Section 5. No group long-term care insurance policy may be offered to a resident of the commonwealth under a group policy issued in another state to a group described in clause (4) of the definition of "Group long-term care insurance", unless the commonwealth or another state having statutory and regulatory long-term care insurance requirements substantially similar to those adopted in the commonwealth has made a determination that the requirements set forth in said clause (4) have been met.
Section 6. (a) The commissioner shall promulgate regulations that include standards for full and fair disclosure setting forth the manner, content and required disclosures for the sale of long-term care insurance policies and certificates, terms of renewability, initial and subsequent conditions of eligibility, non-duplication of coverage provisions, coverage of dependents, preexisting conditions, termination of insurance, continuation or conversion, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, offer of inflation protection, recurrent conditions and definitions of terms.
(b) A long-term care insurance policy shall not:
(1) be cancelled, non-renewed or otherwise terminated on the grounds of the age or the deterioration of the mental or physical health of the insured individual or certificate holder;
(2) contain a provision establishing a new waiting period in the event existing coverage is converted to, or replaced by, a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder; or
(3) provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care.
(c) (1) A long-term care insurance policy, or certificate other than a policy or certificate thereunder, issued to a group as defined in clause (1) of the definition of "Group long-term care" shall not use a definition of “preexisting condition” that is more restrictive than the following: Preexisting condition means a condition for which medical advice or treatment was recommended by, or received from a provider of health care services, within 24 months preceding the effective date of coverage of an insured person.
(2) A long-term care insurance policy or certificate other than a policy or certificate thereunder issued to a group as defined in clause (1) of the definition of "Group long-term care" shall not exclude coverage for a loss or confinement that is the result of a preexisting condition unless the loss or confinement begins within 6 months following the effective date of coverage of an insured person.
(3) Notwithstanding this subsection (c), an insurer may use an application form designed to elicit the complete health history of an applicant, and, on the basis of the answers on that application, underwrite in accordance with that insurer’s established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application need not be covered until the waiting period described in subsection (2) expires. No long-term care insurance policy or certificate may exclude or use waivers or riders of any kind to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in subsection (2).
(d) A long-term care insurance policy shall not be delivered or issued for delivery in this state if the policy:
(1) conditions eligibility for any benefits on a prior hospitalization requirement;
(2) conditions eligibility for benefits provided in an institutional care setting on the receipt of a higher level of institutional care; or
(3) conditions eligibility for any benefits other than waiver of premium, post-confinement, post-acute care or recuperative benefits on a prior institutionalization requirement.
(e) The commissioner may adopt regulations establishing loss ratio standards for long-term care insurance policies provided that a specific reference to long-term care insurance policies is contained in the regulation.
(f) Long-term care insurance applicants shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Long-term care insurance policies and certificates shall have a notice prominently printed on the first page or attached thereto stating in substance that the applicant shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, other than a certificate issued pursuant to a policy issued to a group defined in clause (1) of the definition of "Group long-term care" of section (4), the applicant is not satisfied for any reason. This subsection shall also apply to denials of applications and any refund must be made within 30 days of the return or denial.
(g) (1) An outline of coverage shall be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation through means that prominently direct the attention of the recipient to the document and its purpose. In the case of producer solicitations, an insurance producer shall deliver the outline of coverage prior to the presentation of an application or enrollment form. In the case of direct response solicitations, the outline of coverage shall be presented in conjunction with any application or enrollment form. In the case of a policy issued to a group defined in clause (1) of the definition of "Group long-term care", an outline of coverage shall not be required to be delivered, provided that the information described in clauses (i) to (vi), inclusive, of paragraph (2) is contained in other materials relating to enrollment. Upon request, these other materials shall be made available to the commissioner.
(2) The commissioner shall prescribe a standard format, including style, arrangement and overall appearance, and the content of an outline of coverage. The outline of coverage shall include:
(i) a description of the principal benefits and coverage provided in the policy or certificate;
(ii) a statement of the principal exclusions, reductions and limitations contained in the policy or certificate;
(iii) a statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation in the policy of a right to change premium; continuation or conversion provisions of group coverage shall be specifically described;
(iv) a statement that the outline of coverage is a summary only, not a contract of insurance, and that the policy or group master policy contains governing contractual provisions;
(v) a description of the terms under which the policy or certificate may be returned and premium refunded;
(vi) a brief description of the relationship of cost of care and benefits; and
(vii) a statement that discloses to the policyholder or certificate holder whether the policy is intended to be a federally tax-qualified long-term care insurance contract under 7702B(b) of the Internal Revenue Code of 1986, as amended.
(h) A certificate issued pursuant to a group long-term care insurance policy that is delivered or issued for delivery in this state shall include:
(1) a description of the principal benefits and coverage provided in the policy;
(2) a statement of the principal exclusions, reductions and limitations contained in the policy; and
(3) a statement that the group master policy determines governing contractual provisions and that the policy is available for viewing in the offices of the policyholder and will be copied for the certificate holder upon request at no cost.
(i) If an application for a long-term care insurance contract or certificate is approved, the issuer shall deliver the contract or certificate of insurance to the applicant no later than 30 days after the date of approval.
(j) At the time of policy delivery, a policy summary shall be delivered for an individual life insurance policy that provides long-term care benefits within the policy or by rider. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant’s request, but regardless of request shall make delivery no later than at the time of policy delivery. In addition to complying with all applicable requirements, the summary shall also include:
(1) an explanation of how the long-term care benefit interacts with other components of the policy, including deductions from death benefits;
(2) an illustration of the amount of benefits, the length of benefit, and the guaranteed lifetime benefits if any, for each covered person;
(3) any exclusions, reductions and limitations on benefits of long-term care;
(4) a statement indicating whether any long term care inflation protection option required by law is available under this policy;
(5) if applicable to the policy type, the summary shall also include:
(i) a disclosure of the effects of exercising other rights under the policy;
(ii) a disclosure of guarantees related to long-term care costs of insurance charges; and
(iii) current and projected maximum lifetime benefits; and
(6) the policy summary listed above may be incorporated into a basic illustration or into the life insurance policy summary which is required to be delivered in accordance with applicable regulation.
(k) Any time a long-term care benefit, funded through a life insurance vehicle by the acceleration of the death benefit, is in benefit payment status, a monthly report shall be provided to the policyholder. The report shall include:
(1) any long-term care benefits paid out during the month;
(2) an explanation of any changes in the policy, e.g. death benefits or cash values, due to long-term care benefits being paid out; and
(3) the amount of long-term care benefits existing or remaining.
(l) If a claim under a long-term care insurance contract is denied, the issuer shall, within 60 days of the date of a written request by the policyholder or certificate holder, or a representative thereof:
(1) provide a written explanation of the reasons for the denial; and
(2) make available all information directly related to the denial.
(m) Any policy or rider advertised, marketed or offered as long-term care or nursing home insurance shall comply with the provisions of this chapter.
Section 7. (a) For a policy or certificate that has been in force for less than 6 months an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is material to the acceptance for coverage.
(b) For a policy or certificate that has been in force for at least 6 months but less than 2 years an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is both material to the acceptance for coverage and which pertains to the condition for which benefits are sought.
(c) After a policy or certificate has been in force for 2 years it is not contestable upon the grounds of misrepresentation alone; the policy or certificate may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured’s health.
(d) A long-term care insurance policy or certificate shall not be field issued based on medical or health status. For purposes of this subsection the term “field issued” means a policy or certificate issued by an agent or a third-party administrator pursuant to the underwriting authority granted to the agent or third party administrator by an insurer.
(e) If an insurer has paid benefits under the long-term care insurance policy or certificate, the insurer may not recover the benefit payments if the policy or certificate is rescinded.
(f) In the event of the death of the insured, this section shall not apply to the remaining death benefit of a life insurance policy that accelerates benefits for long-term care. In this situation, the remaining death benefits under these policies shall be governed by section 132 of chapter 175 of the General Laws. In all other situations, this section shall apply to life insurance policies that accelerate benefits for long-term care.
Section 8. (a) Except as provided in subsection (b), a long-term care insurance policy shall not be delivered or issued for delivery in this state unless the policyholder or certificate holder has been offered the option of purchasing a policy or certificate that includes a non-forfeiture benefit. The offer of a non-forfeiture benefit may be in the form of a rider that is attached to the policy. In the event the policyholder or certificate holder declines the non-forfeiture benefit, the insurer shall provide a contingent benefit upon lapse that shall be available for a specified period of time following a substantial increase in premium rates.
(b) When a group long-term care insurance policy is issued, the offer required in subsection (a) shall be made to the group policyholder. However, if the policy is issued as group long-term care insurance to a group defined in clause (4) the definition of "Group long-term care" of section 4, other than to a continuing care retirement community or other similar entity, the offering shall be made to each proposed certificate holder.
(c) The commissioner shall promulgate regulations specifying the type or types of non-forfeiture benefits to be offered as part of long-term care insurance policies and certificates, the standards for non-forfeiture benefits, and the rules regarding contingent benefit upon lapse, including a determination of the specified period of time during which a contingent benefit upon lapse will be available and the substantial premium rate increase that triggers a contingent benefit upon lapse as described in subsection a.
Section 9. The commissioner shall promulgate reasonable regulations in accordance with chapter 30A to promote premium adequacy and to protect the policyholder in the event of substantial rate increases, and to establish minimum standards for marketing practices, agent compensation, agent testing, penalties and reporting practices for long term care insurance.
Section 10. In addition to the penalties provided in chapters 175 and 176D, any insurer and any insurance producer found to have violated any requirement of this chapter or any regulations promulgated hereunder, relating to the regulation of long-term care insurance or the marketing of such insurance, shall be subject to a fine of up to 3 times the amount of any commissions paid for each policy involved in the violation or up to $10,000, whichever is greater.
Section 11. The commissioner of revenue, in consultation with the board of the commonwealth health insurance connector, established by chapter 176Q, shall promulgate such rules and regulations, as necessary, to carry out this chapter.
SECTION 2. Chapter 118E of the General Laws is hereby amended by replacing section 32A with following section:—
Commonwealth Long Term Care Trust Fund
Section 32A. There is hereby established and set up on the books of the commonwealth a separate fund to be known as the Commonwealth Long Term Care Trust Fund, in this section called the trust fund. There shall be credited to the trust fund: (a) any transfers from the Health Safety Net Trust Fund, established by section 57 of chapter 118E, and (b) revenue deposited pursuant to penalties collected under chapter 111N. The Secretary of Health and Human Services shall develop and seek a demonstration grant from CMS to determine the cost savings to the Medicaid program resulting from the long term care insurance coverage mandate, and those savings shall also be credited to the fund.
Amounts credited to the trust fund shall be expended without further appropriation for programs designed to increase health coverage, including a program of subsidized long term care insurance provided to low-income residents of the commonwealth under chapter 118H and rate increases to certain Medicaid providers and supplemental payments to certain publicly operated or public-service hospital entities, as determined by law. Not later than January 1, the comptroller shall report an update of revenues for the current fiscal year and prepare estimates of revenues to be credited to the trust fund in the subsequent fiscal year. The comptroller shall file this report with the secretary of administration and finance, the office of Medicaid, the joint committee on health care financing, and the house and senate committees on ways and means. If revenues credited to the trust fund are less than the amounts estimated to be credited to the trust fund, the comptroller shall duly notify the secretary, office and committees that this revenue deficiency shall require proportionate reductions in expenditures from the revenues available to support programs appropriated from the trust fund.
SECTION 3. Chapter 32A of the General Laws is hereby amended by inserting after section 10E, as appearing in the 2004 Official Edition, the following section:-
Section 10F. The commission shall establish a plan of long term care insurance on the terms and conditions it considers to be in the best interest of the commonwealth and its employees. With respect to any long term care insurance which is in effect for an employee there shall be withheld from the salary or wages of the employee the premium for the insurance and the commonwealth shall make no contribution to the premium. The commission shall use its best efforts to ensure that all premium payments by employees are eligible for favorable tax treatment available under federal or state law.
SECTION 4. Paragraph (b) of Part B of section 3 of chapter 62 of the General Laws, as so appearing, is hereby amended by adding the following subparagraph:-
(6) In the case of an individual who purchases a qualified long-term care insurance policy, as defined by chapter 111N , including both nursing facility and home health benefits, an amount equal to 100 per cent of the individual’s cost of any annual premium of the insurance policy not to exceed $5,000; if the policy has been approved for sale in the commonwealth by the division of insurance. Married individuals filing jointly or separately are each entitled to an exemption from taxable income equal 100 per cent of the couple’s cost of the annual premium but not more than $5,000.
SECTION 5. The General Laws are hereby amended by inserting after chapter 118H the following chapter:-
COMMONWEALTH LONG TERM CARE INSURANCE PROGRAM
Section 1. This chapter shall apply to policies delivered, or issued for delivery, in the commonwealth on or after January 1, 2007. This chapter is not intended to supersede the obligations of entities subject to this chapter to comply with applicable insurance laws insofar as they do not conflict with this chapter, except that laws and regulations designed and intended to apply to Medicare supplement insurance policies shall apply to long-term care insurance.
Section 2. For the purpose of promoting equal choice of long term care pursuant to the provision of chapter 211 of the Acts of 2006, there shall be a commonwealth long term care insurance program within the commonwealth health insurance connector, established by chapter 176Q. The program shall be administered by the board of the connector, in consultation with the office of Medicaid and the department of elder affairs. The program shall provide subsidies to assist eligible individuals in purchasing long term care insurance, provided that subsidies shall only be paid on behalf of an eligible individual who is enrolled in a long term care plan that has been procured by the commonwealth health insurance connector under said chapter 176Q, and shall be made under a sliding-scale premium contribution payment schedule for enrollees, as determined by the board of the connector. Eligibility for premium assistance payments under this section shall be determined in coordination with and using the procedures of the office of Medicaid. After consultation with the director of the office of Medicaid, representatives of any carrier eligible to receive premium subsidy payments under this chapter, representatives of long term care providers, and representatives of senior citizen advocacy organizations, the board shall develop a plan for outreach and education that is designed to reach low-income uninsured residents and maximize their enrollment in the program.
Section 3. (a) An individual shall be eligible to participate in the program if:—
(1) an individual’s or family’s household income does not exceed 400 per cent of the federal poverty level;
(2) the individual has been a resident of the commonwealth for the previous 6 months;
(3) the individual is not eligible for any MassHealth program or for Medicare;
(4) has attained the age of thirty-five;
Section 4. All residents shall have the right to apply for the program established by this chapter, the right to receive written determination detailing denial of eligibility, and the right to appeal any eligibility decision, provided such appeal is conducted pursuant to the process established by the board of the commonwealth health insurance connector, established by chapter 176Q. Applicants for said program shall be eligible for subsequent appeals subject to chapter 30A. Notwithstanding any general or special law to the contrary, all eligible individuals on whose behalf premium assistance payments are made under this section shall be entitled to consumer protections as described in chapter 176O.
Section 5. Premium assistance payments shall be made under a schedule set annually by the board, in consultation with the office of Medicaid and the department of elder affairs; provided that this schedule shall be published on or before September 30, starting in 2009. Premium assistance payments shall not be subject to appropriation from the fund, established by section 2SSS of chapter 29, and shall be made directly by the connector to eligible long term care insurance plans, under chapter 176Q. If the director determines that amounts in the fund are insufficient to meet the projected costs of enrolling new eligible individuals, the director shall impose a cap on enrollment in the program.
Section 6. (a) There shall be established a program for any resident with a household income that does not exceed 100 percent of the federal poverty level, in which the board of the connector shall procure long term care insurance plans that include, but are not limited to: (1) skilled nursing facility services; (2) assisted living services; (3) home care services (4) outpatient services and preventative care by participating providers; (5) prescription drugs as provided under the Prescription Advantage formulary; (6) medically necessary inpatient and outpatient mental health services and substance abuse services; and (7) medically necessary dental services, including preventative and restorative procedures.
(b) Enrollees with a household income that does not exceed 100 percent of the federal poverty level shall only be responsible for a co-payment toward the purchase of each pharmaceutical product and for use of emergency room services in acute care hospitals for non-emergency conditions equal to that required of enrollees in the MassHealth program, as described in clause (5) of section 25 of chapter 118E. The board may waive co-payments upon a finding of substantial financial or medical hardship. No other premium, deductible, or other cost sharing shall apply to enrollees under this program.
SECTION 6. The General Laws are hereby amended by inserting after section 17 in chapter 175 the following section:-
Section 17A. The commissioner shall each year compute the reserve required of long term care insurance companies for outstanding losses under long term care insurance in accordance with accounting practices and procedures prescribed or allowed by the commissioner. The commissioner shall require that value of the reserves be computed in accordance with the Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners, unless modified by the commissioner as the commissioner considers appropriate.
SECTION 39. The provisions of sections 2-3 of this act shall take effect on January 1, 2010
SECTION 41. The remaining sections shall be effective on July 1, 2008.