§4980C Requirements for issuers of qualified long-term care insurance contracts

Summary

Insurance companies that sell qualified long-term care policies must follow certain rules or pay a tax. The tax is $100 for each insured person for every day a rule is broken. If the company has a good reason and the failure was not from careless or willful neglect, the Secretary can reduce or cancel the tax when it would be too large for the problem. Companies must follow parts of a national model regulation and model law about things like application forms and replacements, reporting (including an annual percent of denied claims), marketing filings and standards, making sure a purchase is appropriate, a standard outline of coverage, and giving a shopper’s guide. They must also follow rules about the right to return (refunds must be made within 30 days of return or denial), outlines of coverage, group plan certificates, policy summaries, monthly reports on accelerated death benefits, and incontestability. If an application is approved, the company must deliver the policy or certificate within 30 days. If a claim is denied, the company must, within 60 days of a written request, give a written reason and share all related information. Saying the policy is meant to be a “qualified long-term care insurance contract” under section 7702B in the policy and outline also meets the rules. If a State rule is stricter, meeting the State rule counts as meeting these federal rules.