Q. I’m in a state where LTC partnership policies will be soon introduced. What information and advice can you provide about who should buy these policies, who needs to take the training and other important details?

A. If you have not been hearing about partnership policies being introduced in your state, you probably will soon. I heard a projection that about eight new states will be rolling out these plans every year. Provided below are some frequently asked questions about partnership-qualified policies.

Who should buy partnership policies?

1. First, determine what coverage the client needs. If the appropriate coverage fits PQ, then always sell it. There should not be a downside to selling that policy in this situation. If the coverage best suited for the client does not fit PQ requirements, then both should be presented to the client; and the client must decide which he wants. The agent needs to present the pluses and minuses of each. In any event, the agent should document what was explained to the client to minimize E&O exposure. (Ed Hutman, Agent, Rockville, Md.)

2. Not all clients are good candidates for a partnership policy, especially if they have a higher net worth or significant income expectations. Those clients are usually better off with an LTCI policy that has been designed to meet their unique needs and expectations, not those guidelines established by the state. (Scott Boyd, LTC Director at TNBC)

What are the agent training requirements?

In most states, agents are required to take eight hours of partnership training and four hours of renewal training every two years. Some states and carriers require anybody who sells LTCI to take this training, while others are requiring just those who sell partnership plans.

Who is required to take the training?

There are been a number of questions about this. But these are the answers I’m hearing the most — those who sell the policy and those whose names are on the application, even if just for commission splitting. Also, those who sell hybrid policies, such as an annuity or life insurance policy with a LTCI rider, need to take the training.

How will exchanges be handled?

There is no consistency regarding exchanges, making it very challenging for all parties. It would have been simpler for consumers, producers, regulators and insurers if there was a grandfathering provision for partnership plans, similar to what occurred with HIPAA. (Jodi Anatole, MetLife)

How do partnership plans differ from regular plans in terms of benefit requirements?

The primary difference pertains to inflation protection. The requirements are: (1) Individuals age 60 or younger must have “annual compound inflation protection.” (2) Individuals at least 61 but younger than 76 must have some type of inflation protection. Each state is setting its requirements in this area. (Also, under HIPAA, individuals age 76 or older must be offered an inflation protection option, but they are not required to purchase that option.)

How does the shared care benefit affect partnership plans?

It’s unclear, but this is the Genworth position. Under a shared plan, the asset protection works as follows: Each individual under a shared policy will receive asset protection equal to the amount of benefits he individually receives under the policy, on a dollar-for-dollar basis. To purchase a partnership-eligible shared policy, the age of the youngest insured determines the minimum inflation required for partnership coverage. Even though the DRA does not require benefit exhaustion when applying for Medicaid some states have placed that requirement in their partnership rules which complicates the issue for shared policyholders. We won’t have clarity on the shared pool until a state makes a ruling on a shared plan for Medicaid eligibility. (Beth Ludden, Genworth Financial)

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