NAC687B.075. Outline of coverage: Format; delivery; contents.

     1. An outline of coverage must be delivered to a prospective applicant for a long-term care insurance contract or certificate 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 direct-response solicitations, the insurer shall deliver the outline of coverage upon the prospective applicant’s request, or not later than at the time the long-term care insurance contract is delivered.

     2. The Commissioner will prescribe a standard format, including style, arrangement and overall appearance, and the content of an outline of coverage.

     3. Notwithstanding the provisions of subsection 1, for a long-term care insurance contract issued to a group described in subsection 1 of NAC 687B.025, an outline of coverage need not be delivered if all the information otherwise required to be included in an outline of coverage by subsection 4 is contained in other materials relating to enrollment. These other materials must be made available to the Commissioner upon request.

     4. The outline of coverage must include:

     (a) A description of the principal benefits and coverage provided in the long-term care insurance contract;

     (b) A statement of the principal exclusions, reductions and limitations contained in the long-term care insurance contract;

     (c) A statement of the renewal provisions, including any reservation in the long-term care insurance contract of a right to change premiums and, for group coverage, specific descriptions of provisions for continuation or conversion;

     (d) A statement that the outline of coverage is a summary of the long-term care insurance contract issued or applied for, and that the long-term care insurance contract should be examined to determine governing contractual provisions;

     (e) A description of the terms under which the long-term care insurance contract or certificate may be returned and the premium refunded;

     (f) A brief description of the relationship of the cost of care and benefits; and

     (g) A statement that discloses to the policyholder or certificate holder whether the long-term care insurance contract is intended to be a federally tax-qualified long-term care insurance contract.

     5. The outline of coverage must:

     (a) Be a separate and complete document;

     (b) Be printed in type no smaller than 10-point;

     (c) Not include any material of an advertising nature; and

     (d) Contain a statement in substantially the following form, set out conspicuously in the following format:

[COMPANY NAME]

[ADDRESS-CITY & STATE]

[TELEPHONE NUMBER]

LONG-TERM CARE INSURANCE

OUTLINE OF COVERAGE

[Contract Number or Group Master Contract and Certificate Number]

[Except for a contract or certificate that is guaranteed issue, the following statement of caution, or a substantially similar statement, must appear in the outline of coverage.]

Caution: The issuance of this [contract] [certificate] of long-term care insurance is based upon your responses to the questions on your application. A copy of your [application] [enrollment form] [is enclosed] [was retained by you when you applied] [will be attached to any issued contract] [will be enclosed with any issued contract]. If your answers are incorrect or untrue, the company has the right to deny benefits or rescind your [contract] [certificate]. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers is incorrect, contact the company at this address: [Insert address].

Notice to buyer: This contract may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all limitations in the contract.

     1. This contract is [an individual contract of insurance] [a group contract] which was issued in the [indicate jurisdiction in which contract was issued].

     2. PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides a very brief description of the important features of the contract. You should compare this outline of coverage to outlines of coverage for other contracts available to you. This is not a contract of insurance, but only a summary of coverage. Only the individual or group contract contains governing contractual provisions. This means that the contract or group contract sets forth in detail the rights and obligations of both you and the insurance company. Therefore, if you purchase this coverage, or any other coverage, it is important that you READ YOUR [CONTRACT] [CERTIFICATE] CAREFULLY!

     3. FEDERAL TAX CONSEQUENCES.

This [CONTRACT] [CERTIFICATE] is intended to be a federally tax-qualified long-term care insurance contract under 26 U.S.C. § 7702B(b).

OR

This [CONTRACT] [CERTIFICATE] is not intended to be a federally tax-qualified long-term care insurance contract under 26 U.S.C. § 7702B(b). Benefits received under the [CONTRACT] [CERTIFICATE] may be taxable as income.

     4. TERMS UNDER WHICH THE [CONTRACT] [CERTIFICATE] MAY BE CONTINUED IN FORCE OR DISCONTINUED.

     (a) [For a long-term care insurance contract or certificate, describe one of the following permissible provisions regarding renewability of the contract or certificate:

          (1) Contracts and certificates that are guaranteed renewable must contain the following statement:] RENEWABILITY: THIS [CONTRACT] [CERTIFICATE] IS GUARANTEED RENEWABLE. This means you have the right, subject to the terms of your [contract] [certificate], to continue this [contract] [certificate] as long as you pay your premiums on time. [Company Name] cannot change any of the terms of your [contract] [certificate] on its own, except that, in the future, IT MAY INCREASE THE PREMIUM YOU PAY.

          (2) [Contracts and certificates that are noncancellable must contain the following statement:] RENEWABILITY: THIS [CONTRACT] [CERTIFICATE] IS NONCANCELLABLE. This means that you have the right, subject to the terms of your [contract] [certificate], to continue this [contract] [certificate] as long as you pay your premiums on time. [Company Name] cannot change any of the terms of your [contract] [certificate] on its own and cannot change the premium you currently pay. However, if your [contract] [certificate] contains a feature to protect against inflation where you choose to increase your benefits, [Company Name] may increase your premium at that time for those additional benefits.

     (b) [For group coverage, specifically describe the basis for continuation of coverage and basis for conversion of coverage applicable to the certificate and group contract.]

     (c) [Describe the provisions regarding waiver of premium or state that there are no such provisions.]

     5. TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS.

[In bold type larger than the minimum type required to be used for the other provisions of the outline of coverage, state whether or not the company has a right to change the premium and, if this right exists, describe clearly and concisely each circumstance under which the premium may change.]

     6. TERMS UNDER WHICH THE [CONTRACT] [CERTIFICATE] MAY BE RETURNED AND PREMIUM REFUNDED.

     (a) [Provide a brief description of the right to return—the “free look” provision of the contract or certificate.]

     (b) [Include a statement whether the contract or certificate contains provisions for a refund or partial refund of the premium upon the death of an insured or surrender of the contract or certificate. If the contract or certificate contains such provisions, include a description of them.]

     7. THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are eligible for Medicare, review the Guide to Health Insurance for People with Medicare available from the insurance company.

     (a) [For agents] Neither [Company Name] nor its agents represent Medicare, the Federal Government or any state government.

     (b) [For direct-response] [Company Name] is not representing Medicare, the Federal Government or any state government.

     8. LONG-TERM CARE COVERAGE.

     (a) Contracts of this category are designed to provide coverage for one or more necessary or medically necessary services related to diagnostic, preventative, therapeutic, rehabilitative, maintenance or personal care, provided in a setting other than an acute care unit of a hospital, such as in a nursing home, in the community or in the home.

     (b) This contract provides coverage in the form of a fixed dollar indemnity benefit for covered long-term care expenses, subject to [limitations] [waiting periods] and [requirements regarding coinsurance] set forth in the [contract] [certificate]. [Modify this paragraph if the contract or certificate is not a contract or certificate of indemnity.]

     9. BENEFITS PROVIDED BY THIS [CONTRACT] [CERTIFICATE].

     (a) [Describe covered services, related deductible(s), waiting periods, elimination periods and maximums of benefits.]

     (b) [Describe institutional benefits, by skill level.]

     (c) [Describe noninstitutional benefits, by skill level.]

     (d) Eligibility for Payment of Benefits.

[Activities of daily living and cognitive impairment must be used to measure an insured’s need for long-term care and must be defined and described as part of the outline of coverage. Any additional benefit triggers must also be explained. If these triggers differ for different benefits, explanations of the triggers should accompany each benefit description. If an attending physician or other specified person must certify a certain level of functional dependency in order for an insured to be eligible for benefits, this too must be specified.]

     10. LIMITATIONS AND EXCLUSIONS.

     [Describe:

     (a) Preexisting conditions;

     (b) Noneligible facility or provider;

     (c) Noneligible levels of care (for example, unlicensed providers, care or treatment provided by a family member);

     (d) Exclusions or exceptions; and

     (e) Limitations.]

[This section should provide a brief, specific description of any provision in the contract or certificate which limits, excludes, restricts, reduces, delays or in any other manner operates to qualify payment of benefits for one or more necessary or medically necessary services related to diagnostic, preventative, therapeutic, rehabilitative, maintenance or personal care.]

THIS [CONTRACT] [CERTIFICATE] MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH YOUR NEEDS FOR LONG-TERM CARE.

     11. RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs of services related to long-term care will likely increase over time, you should consider whether and how the benefits of this plan may be adjusted. [As applicable, indicate the following:

     (a) That the level of benefits will not increase over time;

     (b) Any provisions regarding automatic adjustment of benefits;

     (c) Whether the insured will be guaranteed the option to buy additional benefits and the basis upon which benefits will be increased over time if not by a specified amount or percentage;

     (d) If there is such a guarantee, include whether additional underwriting or screening of health will be required, the frequency and amounts of the options for upgrading and any significant restrictions or limitations; and

     (e) Describe whether there will be any additional charge in premiums imposed and, if so, how the additional charge will be calculated.]

     12. ALZHEIMER’S DISEASE AND OTHER ORGANIC BRAIN DISORDERS. [State that the contract or certificate provides coverage for an insured clinically diagnosed as having Alzheimer’s disease or a related degenerative and dementing illness. Specifically describe each screening of benefits or other provision in the contract or certificate that provides preconditions to the availability of benefits for such an insured.]

     13. PREMIUM.

     [(a) State the total annual premium for the contract.

     (b) If the premium varies with an applicant’s choice among options of benefits, indicate the portion of annual premium which corresponds to each option of benefits.]

     14. ADDITIONAL FEATURES.

     [(a) Indicate if medical underwriting is used.

     (b) Describe other important features.]

     15. CONTACT THE NEVADA STATE HEALTH INSURANCE ADVISORY PROGRAM OF THE AGING AND DISABILITY SERVICES DIVISION OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES IF YOU HAVE GENERAL QUESTIONS REGARDING LONG-TERM CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF YOU HAVE SPECIFIC QUESTIONS REGARDING YOUR CONTRACT OR CERTIFICATE.

     6. Text of the outline of coverage which is capitalized in the format set out in paragraph (d) of subsection 5 may be emphasized in the outline of coverage by other means which provide prominence equivalent to capitalization.

     (Added to NAC by Comm’r of Insurance, eff. 11-21-88; A 12-15-94; 5-13-96; R121-07, 9-18-2008, eff. 10-1-2008; R028-10, 12-16-2010, eff. 10-1-2011)