HS 351 Ch. 13
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The type of long-term care insurance contracts that meet certain standards of the Health Insurance Portability and Accountability Act (HIPAA) for favorable tax treatment. Compare non-tax-qualified.
A type of long-term care insurance contract that fails to meet certain standards of the Health Insurance Portability and Accountability Act for favored tax treatment. Compare tax-qualified.
Long-term care insurance
Any insurance policy or rider that is advertised, marketed, offered, or designed to provide coverage for not less than 12 consecutive months for each covered person in a setting other than an acute care unit of a hospital for one or more of the following: necessary or medically necessary diagnostic, preventative, therapeutic, rehabilitative, maintenance, or personal care services.
A renewal provision in an insurance contract whereby the insurance company cannot make any unilateral changes in any coverage provision or refuse to renew the coverage. The insured has the right to continue the coverage in force by the timely payment of premium rates that are established in advance and cannot be changed. Compare guaranteed renewable.
An insurer practice or rescinding a policy or denying a claim based on medical information obtained at the time the claim is filed that could have been obtained and included in the underwriting process at the time the insured completed the application for the insurance. State regulations attempt to minimize this practice.
Qualified long-term care insurance contract
Any long-term care insurance contract that meets the requirements of (HIPAA) for favorable tax treatment or any LTCi contract issued before 1-1-1997, that remains materially unchanged and met the long-term care requirements in the state where the policy was issued even if it does not meet other HIPAA requirements. Also known as tax-qualified policy.
Qualified long-term care services
Services that must be covered for a long-term care insurance policy to be a tax-qualified insurance contract under (HIPAA). Required services are necessary diagnostic, preventive, therapeutic, curing, treating, and rehabilitative services, as well as maintenance or personal care required by a chronically ill individual and called for by a plan of care prescribed by a licensed health care practitioner.
Chronically ill individual
Someone who meets the criterion for benefit eligibility, known as a benefit trigger, due either to a loss of functional capacity or a need for substantial supervision to protect the individual from threats to health and safety because of a severe cognitive impairment. Tax-qualified policies require a licensed health care practitioner to certify the individual as chronically ill and that the loss of funtional capacity invovles the need for substantial assistance for a period of at least 90 days to perform at least 2 of the 5 or 6 ADLs specified in HIPAA. The assistance may be hands-on and/or standby assistance
Licensed health care practitioner
A physician, RN, licensed social worker, or other person who meets any requirements prescribed by the Secretary of the Treasury
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