§4980C Requirements for Issuers of Qualified Long-term Care Insurance Contracts

Summary

Companies that issue qualified long-term care insurance must follow a set of consumer-protection rules, and any issuer that fails owes a tax of $100 per insured person for each day a requirement is not met. The IRS can waive some or all of the tax if the failure was due to reasonable cause, not willful neglect, and the tax would be excessive compared to the failure. The requirements come from the long-term care insurance model regulation and model Act, covering things like application forms, marketing standards, annual reporting of denied claims, outlines of coverage, a shopper's guide, and a right to return the policy with any refund paid within 30 days. Issuers must also deliver an approved policy within 30 days, and if a claim is denied, give a written explanation and the related information within 60 days of a written request. The policy must disclose that it is intended to be a qualified long-term care contract. If a state's rule is stricter than the federal one, meeting the state rule counts as meeting this one.