Iowa calls for LTCI alternate plan safeguards

“Insufficient explanations at the time of sale of such provisions may lead to confusion and uncertainty among policyholders,” Gerhart says. An insurer that sells a policy including the provision should make sure agents and brokers know how to describe the provision, according to Gerhart.

An insurer should document that any alternate plan of care actually covered is spelled out in writing, constitutes a qualified long-term care (LTC) expense under Internal Revenue Code rules, is subject to periodic review, and is not intended to pay for coverage the consumer could have elected when the consumer bought the coverage, the Iowa insurance commissioner says. 

Gerhart says insurers administering a request for an alternate plan of care should give the policyholder enough time to respond to any communications, answer any policyholder questions fully and quickly, and document any agreements about care in writing.