# COMAR Title 31 — Maryland Insurance Administration

## Subtitle 14 — Long-Term Care

### Chapter 03 — Long-Term Care Partnership

**Authority:** Health-General Article, §15-407; Insurance Article, §§18-102, 18-106, and 18-107; Annotated Code of Maryland

**Administrative History:** Effective date: December 15, 2008 (35:25 Md. R. 2152)

**Administrative History:** Regulation .04 amended effective March 22, 2010 (37:6 Md. R. 481)

**Administrative History:** Regulation .05B, C amended effective March 22, 2010 (37:6 Md. R. 481)

**Administrative History:** Regulation .05F amended effective June 6, 2016 (43:11 Md. R. 635)

**Administrative History:** Regulation .06B amended effective February 27, 2017 (44:4 Md. R. 256)

**Administrative History:** Regulation .07 repealed effective March 22, 2010 (37:6 Md. R. 481)

**Administrative History:** Regulation .09 amended effective March 22, 2010 (37:6 Md. R. 481)

**Administrative History:** Regulation .10 amended effective December 26, 2011 (38:26 Md. R. 1697)

#### Regulation .01 Scope.

*COMAR 31.14.03.01*

A. This chapter applies to carriers that issue or deliver partnership policies to Maryland residents.

B. The certification process described in this chapter is not a replacement for, and may not impact the form approval process set forth in, COMAR 31.04.17.

C. Nothing in this chapter exempts carriers from complying with the requirements found in COMAR 31.14.01 and .02.

D. Nothing in this chapter exempts insurance producers from complying with the training requirements found in COMAR 31.14.01.34.

#### Regulation .02 Definitions.

*COMAR 31.14.03.02*

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

  (1) “Applicant” means:

    (a) In the case of an individual long-term care insurance policy, the person who seeks to contract for benefits; and

    (b) In the case of a group long-term care insurance policy, the proposed certificate holder.

  (2) “Carrier” means an insurer or a nonprofit health service plan.

  (3) “Certificate” means any certificate issued under a group long-term care insurance policy, if the certificate is delivered or issued for delivery in Maryland.

  (4) “Commissioner” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

  (5) “Department” has the meaning stated in Health-General Article, §1-101, Annotated Code of Maryland.

  (6) “Insured” means an individual who is covered under a partnership policy.

  (7) “Insurer” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

  (8) Long-Term Care Insurance.

    (a) “Long-term care insurance” means any group or individual insurance policy, contract, certificate, or rider issued, delivered, or offered by a carrier that:

      (i) Is advertised, marketed, offered, or designed to provide coverage for not less than 24 consecutive months for covered persons on an expense incurred, indemnity, prepaid, or insured basis; and

      (ii) Provides one or more necessary or appropriate diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services furnished in a situation other than an acute care unit of a hospital.

    (b) “Long-term care insurance” includes any product that is advertised, marketed, or offered as long-term care insurance.

    (c) “Long-term care insurance” does not include any insurance policy, contract, certificate, or rider which is offered primarily to provide:

      (i) Basic Medicare supplement coverage;

      (ii) Hospital confinement indemnity coverage;

      (iii) Basic hospital expense or medical-surgical expense coverage;

      (iv) Disability income protection coverage;

      (v) Accident only coverage;

      (vi) Specified disease or specified accident coverage; or

      (vii) Skilled nursing care.

    (d) “Long-term care insurance” does not include a life insurance policy:

      (i) That accelerates the death benefit specifically for one or more of the qualifying events of terminal illness, a medical condition requiring extraordinary medical intervention, or permanent institutional confinement;

      (ii) That provides a lump sum payment for any of the events in §B(8)(d)(i) of this regulation; or

      (iii) In which neither benefits nor eligibility for benefits is conditioned on receipt of long-term care.

  (9) “Medicaid” means the Maryland Medical Assistance Program.

  (10) “Nonprofit health service plan” means an entity that holds a certificate of authority from the Commissioner to act as a nonprofit health service plan in Maryland.

  (11) “Partnership policy” or “partnership coverage” means a long-term care insurance policy that is:

    (a) Certified by the Commissioner to meet the requirements under §1917(b) of the Social Security Act; and

    (b) Issued on or after the effective date of the State plan amendment.

  (12) Policy.

    (a) “Policy” means any policy, contract, individual certificate, subscriber agreement, rider, or endorsement delivered or issued for delivery in this State by a carrier.

    (b) “Policy” does not include a life insurance policy that contains an optional provision for acceleration of payment of all or a portion of the face amount under stated conditions relating to the medical condition, the disability, or the need for long-term care of the insured.

  (13) “Qualified long-term care insurance” has the meaning stated in COMAR 31.14.01.02C.

  (14) “State plan amendment” means an amendment filed by the Department with the Centers for Medicare and Medicaid Services under Title 42, U.S.C., which provides for the disregard of any assets or resources by the Department in an amount equal to the insurance benefit payments that are made to, or on behalf of, the individual who is covered under a partnership policy.

#### Regulation .03 Commissioner Certification.

*COMAR 31.14.03.03*

A. A carrier may not solicit a partnership policy in Maryland until the Commissioner has notified the carrier in writing that the Commissioner has certified the policy to be a partnership policy.

B. The Commissioner shall notify the Department in writing within 30 days after the date the Commissioner certifies a new partnership policy.

#### Regulation .04 Filing Requirements for Certification.

*COMAR 31.14.03.04*

A carrier seeking certification of a long-term care insurance policy to a partnership policy status shall file the following with the Commissioner:

A. Proof of prior approval of the long-term care insurance policy in accordance with COMAR 31.04.17, provided in the following manner:

  (1) If the long-term care insurance policy that the carrier intends to use or market as a partnership policy in Maryland was approved by the Commissioner within 3 years before the date the carrier files for its certification as a partnership policy, the carrier shall provide the form number and date of approval of the previously approved long-term care insurance policy; or

  (2) If the long-term care insurance policy that the carrier intends to use or market as a partnership policy was approved by the Commissioner more than 3 years before the date the carrier files for its certification as a partnership policy, the carrier shall provide a copy of the previously approved long-term care insurance policy, including the date of its approval;

B. A copy of the previously approved long-term care insurance policy schedule page or certificate schedule page with the disclosure notice required by Regulation .05B of this chapter;

C. The form number and date of approval of the application that the carrier intends to use with the partnership policy in Maryland, which meets the requirements of Regulation .06 of this chapter;

D. A copy of the disclosure notice that the carrier intends to use to satisfy the requirements of Regulation .05C of this chapter; and

E. A copy of the policy summary that the carrier intends to use to satisfy the requirements of Regulation .08 of this chapter.

#### Regulation .05 Long-Term Care Insurance Policy Requirements for Partnership Policies.

*COMAR 31.14.03.05*

A. The partnership policy shall comply with the requirements for long-term care insurance under Insurance Article, Title 18, Subtitle 1, Annotated Code of Maryland.

B. Schedule Page Disclosure.

  (1) Each long-term care insurance policy that is designed or marketed as a partnership policy shall prominently disclose in at least 12-point type, on the individual long-term care insurance policy schedule page or group certificate schedule page, the notice set forth in §B(2) of this regulation.

  (2) The notice required by §B(1) of this regulation shall read as follows: “This {long-term care insurance policy, certificate, or contract} is intended to meet the standards for the Qualified State Long-Term Care Insurance Partnership program in Maryland. Nothing in this {long-term care insurance policy, certificate, or contract} is a guarantee of Medicaid eligibility nor is it a guarantee of any ability to disregard assets for purposes of Medicaid eligibility.”

  (3) If the only change to a previously approved schedule page is the addition of the disclosure notice required by §B(1) and (2) of this regulation, the previously approved schedule page revised to comply with §B(1) and (2) of this regulation is not required to be refiled for approval by the Commissioner.

C. Disclosure Requirement Regarding Partnership Coverage.

  (1) A carrier issuing or marketing long-term care insurance policies that qualify as partnership policies in Maryland, shall provide a disclosure notice, on the carrier's letterhead, indicating that at the time of its issuance, the long-term care insurance policy is intended to qualify as a long-term care insurance partnership policy.

  (2) The disclosure notice required by §C(1) of this regulation shall:

    (a) Explain the benefits associated with a partnership policy; and

    (b) Disclose that the partnership policy status may be lost if:

      (i) The insured moves to a different state;

      (ii) The coverage is modified after issue; or

      (iii) Changes in federal or state laws occur.

  (3) The carrier may use the Partnership Policy Status Disclosure Notice set forth in Regulation .09 of this chapter to satisfy the disclosure notice requirement found in §C(1) of this regulation.

  (4) If the carrier uses the Partnership Policy Status Disclosure Notice set forth in Regulation .09 of this chapter, without modification, the carrier is not required to file the form for approval with the Commissioner.

  (5) If the carrier chooses to modify the Partnership Policy Status Disclosure Notice set forth in Regulation .09 of this chapter, the carrier may not use the modified Partnership Policy Status Disclosure Notice in Maryland until the Commissioner approves the modified Partnership Policy Status Disclosure Notice.

  (6) The disclosure notice required by §C(1) of this regulation shall be provided to the insured not later than:

    (a) The time of partnership policy delivery, for individual partnership policies; and

    (b) The time of certificate delivery, for certificates issued under group partnership policies.

D. The partnership policy shall comply with all the requirements for a qualified long-term care insurance policy found in COMAR 31.14.01.

E. The premiums and reserves for a partnership policy shall be developed in compliance with the requirements found in COMAR 31.14.02.

F. Inflation Protection.

  (1) Each partnership policy issued to an individual who is younger than 76 years old shall contain the following minimum inflation protection benefit:

    (a) If the applicant, at the time the partnership policy is issued, is younger than 61 years old, the partnership policy shall provide, at a minimum, one of the following:

      (i) A 1 percent compound annual inflation protection benefit; or

      (ii) A compound annual inflation protection benefit at an interest rate equal to the annual increase in the Consumer Price Index — All Urban Consumers, U.S. City Average, All Items; and

    (b) If the applicant, at the time the partnership policy is issued, is at least 61 years old, but younger than 76 years old, the partnership policy is required to provide inflation protection, but the applicant is permitted to reject the level of inflation protection required by COMAR 31.14.01.12A.

  (2) Subject to Regulation .06B(4) of this chapter, if the applicant, at the time the partnership policy is issued, is 76 years old or older, the partnership policy is not required to provide inflation protection.

  (3) The inflation protection benefit required by §F(1) of this regulation may not be the alternative inflation protection option permitted under COMAR 31.14.01.12B.

  (4) The provisions of §F(1)(b) and (2) of this regulation do not eliminate the requirement found in COMAR 31.14.01.12A that each applicant be offered a minimum inflation protection benefit.

  (5) Inflation Protection Based on Changes in the Consumer Price Index.

    (a) If the Consumer Price Index described in §F(1)(a)(ii) of this regulation is discontinued, or if the calculation of the Consumer Price Index described in §F(1)(a)(ii) of this regulation is changed substantially, the carrier may substitute a comparable index, subject to prior approval by the Commissioner.

    (b) If the inflation protection benefit selected is based on increases in the Consumer Price Index as described in §F(1)(a)(ii) of this regulation, the carrier shall:

      (i) Increase the benefit payable under the partnership policy each policy anniversary; and

      (ii) Calculate the increased benefit based on the percentage change in the Consumer Price Index described in §F(1)(a)(ii) of this regulation on the date 3 months before the anniversary date of the individual's partnership policy as compared to the same month's Consumer Price Index 1 year earlier.

    (c) If the change in the Consumer Price Index described in §F(1)(a)(ii) of this regulation is a negative number for the time period in question, the carrier may not apply the change in the index to reduce the benefit payable under the partnership policy.

#### Regulation .06 Applications.

*COMAR 31.14.03.06*

A. Identification of Partnership Policy Application.

  (1) Except as provided in §A(2) and (3) of this regulation, the first page of each application for a partnership policy shall clearly indicate that the application is for a partnership policy.

  (2) If the application is designed to be used with both partnership policies and nonpartnership long-term care insurance policies, the application shall contain a separate section that identifies the inflation protection options required for a partnership policy.

  (3) If the partnership policy is provided by means of a rider or endorsement to a life insurance policy, the application shall contain a separate section that clearly identifies that the long-term care insurance coverage provided by the listed rider or endorsement qualifies as partnership coverage.

B. Inflation Protection Option.

  (1) Unless the application requires all applicants, regardless of age, to purchase an inflation protection benefit of at least 5 percent compounded annually, the application shall have separate inflation protection options for applicants to elect, depending on the age of the applicant.

  (2) The application shall indicate that for applicants who are younger than 61 years of age, the applicant is required to purchase an inflation protection benefit:

    (a) Of at least 1 percent compounded annually; or

    (b) That is a compound annual inflation protection benefit at an interest rate equal to the annual increase in the Consumer Price Index—All Urban Consumers, U.S. City Average, All Items.

  (3) The application shall indicate that for applicants who are at least 61 years old, but who are younger than 76 years old, the applicant is required to purchase an inflation protection option.

  (4) The application for each applicant shall include the option to purchase the inflation protection benefit of 5 percent compounded annually as required by COMAR 31.14.01.12A.

#### Regulation .07 Repealed.

*COMAR 31.14.03.07*

#### Regulation .08 Required Provision of Information Regarding A Partnership Policy.

*COMAR 31.14.03.08*

A. Except as provided in §C of this regulation, at the request of the insured or a representative of the Department on behalf of an insured, a carrier shall provide a completed Long-Term Care Partnership Program Policy Summary in the form set forth in §D of this regulation.

B. The completed Long-Term Care Partnership Program Policy Summary required by §A of this regulation shall be:

  (1) Provided within 14 days after the date the carrier receives the request from the insured or the representative of the Department on behalf of the insured; and

  (2) Given to:

    (a) The insured, if the request for the Long-Term Care Partnership Program Policy Summary was received from the insured; or

    (b) The insured and the representative of the Department, if the request for the Long-Term Care Partnership Program Policy Summary was received from a representative of the Department on behalf of the insured.

C. A carrier may develop its own partnership policy summary to provide the information found in the Long-Term Care Partnership Program Policy Summary form in §D of this regulation, if the carrier's policy summary includes all of the information and content found in the Long-Term Care Partnership Program Policy Summary form in §D of this regulation.

D. The format and required text of the Long-Term Care Partnership Program Policy Summary referred to in §A of this regulation shall read as follows:

  1. Name of insured __________________________

  2. Insured's Social Security # ______________

  3. Insured's Date of Birth __________________

  4. Policy/certificate number _______________

  5. Effective date of coverage ______________

  6. The policy/certificate was issued in the state of: _______________

  7. Issue age of the insured at the time the coverage was issued _______________

  8. The policy/certificate was issued ? With ? Without inflation coverage

  9. The inflation coverage is:

  10. The inflation coverage is currently in effect [ ] Yes  [ ] No

  11. If the answer to item 10 is no, the date inflation coverage ceased:__________

  12. The policy meets the standards of a tax qualified long-term care insurance policy [ ] Yes  [ ] No

  13. The cumulative dollar amount of long-term care insurance benefits paid: $__________

  14. The total dollar amount of long-term care insurance benefits remaining available under the policy $ __________ as of the date this form was completed __________.

  15. The name, phone number, and email address of the person completing this form

E. A carrier shall provide to the Department within 45 days after issuance of a partnership policy, the following information:

  (1) Name of the insured;

  (2) Insured's Social Security number;

  (3) Insured's date of birth; and

  (4) Policy or certificate number.

F. A carrier shall provide reports to the Centers for Medicare and Medicaid Services in accordance with federal regulations developed, including any information that is deemed appropriate according to federal requirements.

#### Regulation .09 Partnership Policy Status Disclosure Notice.

*COMAR 31.14.03.09*

The format and required text of the Partnership Policy Status Disclosure Notice referred to in Regulation .05C(3) of this chapter shall read as follows:

[Carrier letterhead]

Important Notice Regarding Your Policy's Long-Term Care Insurance Partnership Policy Status

(Please keep this Notice with Your Policy or Certificate)

Qualified State Long-Term Care Insurance Partnership. The Qualified State Long-Term Care Insurance Partnership is an innovative partnership between Maryland and private insurers of long-term care insurance policies. The Qualified State Long-Term Care Insurance Partnership is established in accordance with the Deficit Reduction Act of 2005 (P.L. 109—171).

Notice of Partnership Policy Status. Your long-term care insurance {policy} {certificate} is intended to qualify as a Partnership {policy} {certificate} under the {insert state} Long-Term Care Partnership Program as of your {policy's} {certificate's} effective date.

Medicaid Asset Protection Provided. Long-term care insurance is an important tool that helps individuals prepare for future long-term care needs. Partnership Policies provide an additional level of protection. In particular, such policies permit individuals to protect additional assets from spend-down requirements under a Medicaid program if assistance under this program is ever needed and you otherwise qualify for Medicaid.

Specifically, the asset eligibility and recovery provisions of the Medicaid program of Maryland are applied by disregarding an additional amount of assets which is equal to the amount of long-term care insurance benefits you have received from your Partnership Policy. For example, if you receive $200,000 of insurance benefits from your Partnership Policy, you generally would be able to retain $200,000 of assets above and beyond the amount of assets normally permitted for Medicaid eligibility.

Other Medicaid eligibility requirements apart from permissible assets must be met, including special rules that may apply if the equity in your home exceeds $500,000. This equity value limit may change over time based on Federal standards. In addition, you must meet the Medicaid program's income requirements and may be required to contribute some of your income to the costs of your care once you become eligible for Medicaid.

Additional Consumer Protections. In addition to providing Medicaid asset protection, your Partnership Policy has other important features. Under the rules governing the Qualified State Long-Term Care Insurance Partnership, your Partnership Policy must be a qualified long-term care insurance contract under Federal tax law, and as such the insurance benefits you receive from the policy generally will be subject to beneficial income tax treatment. (Please note that a policy can be a qualified long-term care insurance contract under Federal tax law, with the same beneficial income tax treatment, even if it is not a Partnership Policy.) In addition, if you were under age 76 when you purchased your Partnership Policy, it must provide inflation protection to help protect against potential future increases in the cost of long-term care. (For older purchasers, an offer of inflation protection is required.)

What Could Disqualify Your Policy as a Partnership Policy. If you make any changes to your Partnership Policy or certificate, such changes could affect whether your policy or certificate continues to qualify as a Partnership Policy. Before you make any changes, you should consult with the issuer of your Partnership Policy to determine the effect of a proposed change. In addition, if you move to a state that does not maintain a Qualified Partnership or does not recognize your policy as a Partnership Policy, you would not receive Medicaid asset protection in that state. Also, changes in Federal or State law could affect the Medicaid asset protection available with respect to your Partnership Policy.

#### Regulation .10 Reporting Requirements.

*COMAR 31.14.03.10*

A. Beginning October 1, 2009, and on or before October 1 of each year after October 1, 2009, each carrier that is certified to issue partnership policies in Maryland shall file a report with the Commissioner that includes the information required by §B of this regulation.

B. The report required by §A of this regulation shall include the following information:

  (1) The number of insureds the carrier covers under partnership policies issued or delivered in Maryland, as of the July 1 immediately preceding the date of the report;

  (2) The number of partnership policies the carrier has issued or delivered in Maryland for the 12 month period ending on the July 1 immediately preceding the date of the report;

  (3) A list, by form number and date of approval, of the partnership policies that the carrier made available in Maryland as of the July 1 immediately preceding the date of the report; and

  (4) The number of licensed insurance producers who were appointed by the carrier in Maryland and who met the training requirements found in COMAR 31.14.01.34 for any portion of the 12 month period ending on the July 1 immediately preceding the date of the report.