Medicare, the standardized Medigap plans, Medicaid and LTC design are covered in the national Senior and Special Needs guide. This guide covers North Dakota's Medicare supplement law (N.D.C.C. chapter 26.1-36.1; N.D. Admin. Code 45-06-01.1) and long-term care law (chapter 26.1-45; 45-06-05.1). It also covers North Dakota's senior suitability rule.

Senior suitability (N.D. Admin. Code 45-02-02-14)

• The suitability rule covers sales of accident and health, life, annuity and nursing home coverage to consumers over 65. It covers Medicare supplement sales to consumers of any age.
• Excessive coverage. Selling coverage that duplicates existing coverage is presumed excessive unless the insured is told, and understands, that it's a replacement, noted in writing or on the application.
• Advisory committee. When a sale is questioned, the rule calls for an industry advisory committee of insurance professionals to review it and make recommendations.

Medicare supplement

Before the sale

• Outline of coverage at the time of application (26.1-36.1-05). The Guide to Health Insurance for People with Medicare is also given at application, with a signed acknowledgment.
• Application (45-06-01.1-15):
  • The producer lists other health policies in force and those sold in the past five years that are no longer in force.
  • The application explains that Medigap can be suspended for up to 24 months while the insured is on Medicaid, if requested within 90 days.
• Replacement notice. It's signed by the applicant and agent. The applicant gets one copy, and the insurer keeps another.

Policy rules

• Free look. 30 days from delivery (26.1-36.1-06).
• Preexisting conditions. Excluded for no more than six months, with a six-month look-back (26.1-36.1-02).
• Open enrollment. For six months after the person is 65 and in Part B, an issuer can't deny or rate based on health. With at least six months of creditable coverage, no preexisting exclusion applies (45-06-01.1-09).
• Replacing a policy. No new waiting periods for similar benefits (45-06-01.1-20).
• Benefits can't be based on "usual and customary" charges. A rider that reduces benefits needs the insured's signed acceptance.
• Medicare changes. Insureds get notice at least 30 days before Medicare benefit changes take effect.

Prohibited sales (45-06-01.1-18)

• Any sale that gives someone more than one Medigap policy.
• A policy for a Medicare Advantage (Part C) enrollee unless it takes effect after the Part C coverage ends.

Marketing (45-06-01.1-17)

• The policy must carry the notice: "This policy may not cover all of your medical expenses."
• Selling through force, fright, threat or undue pressure is prohibited.
• Cold lead advertising is prohibited: ads that hide their insurance purpose or that an agent will make contact.
• Only qualifying policies may be called "Medicare supplement" or "Medigap."
• Advertisements go to the commissioner within 10 days after first use (26.1-36.1-07).

Compensation and loss ratio

• Commissions must be level for the first year and at least five renewal years. Replacement commissions are capped at the replacing issuer's renewal rate (45-06-01.1-13).
• The minimum loss ratio for individual Medigap is 65% (26.1-36.1-04).

Long-term care insurance

Benefit triggers

• North Dakota lists six ADLs: bathing, continence, dressing, eating, toileting and transferring (26.1-45-07.1).
• A trigger can't require more than three ADLs, or cognitive impairment. Assessments must be done by licensed or certified professionals (45-06-05.1-25).
• Tax-qualified policies follow federal law: at least two ADLs expected to last 90 days, or severe cognitive impairment (45-06-05.1-26).

Selling the policy

• The outline of coverage and the shopper's guide are delivered before an application is presented (26.1-45-09; 45-06-05.1-28).
• The personal worksheet and the "Things You Should Know Before You Buy" form must be completed and returned before the issuer considers the application. Worksheet information can't be sold or shared outside the company (45-06-05.1-22).
• Free look. 30 days from delivery or the effective date, whichever is later.
• Training. 8 hours of LTC training first, then 4 hours every two years.

Policy rules

• Renewal. Individual policies are guaranteed renewable for life. They can't be canceled for age or declining health (26.1-45-05, 26.1-45-05.2).
• No skilled-care-only policies (26.1-45-05(3)).
• No field issue based on health (26.1-45-05.1(4)).
• Preexisting conditions. Six-month look-back and six-month exclusion (26.1-45-06).
• Prior stays. No prior hospitalization may be required. Any prior institutional stay requirement is capped at 30 days (26.1-45-07).
• Home health care (45-06-05.1-10):
  • Benefits must equal at least half of one year's nursing home benefit.
  • A policy can't require that the insured would otherwise need skilled nursing facility care.
  • It can't exclude adult day care.
• Inflation protection. 5% compound protection is included unless the buyer signs a rejection. Comparisons show benefits over 20 years (45-06-05.1-11).
• Contests and rescission. After two years, a policy can be contested only for knowing and intentional misrepresentation of health. Benefits already paid can't be recovered after a rescission (26.1-45-05.1).

Lapse and reinstatement

• Lapse protection.
  • The buyer names a third party to receive lapse notices, or signs a waiver.
  • The lapse notice goes out at least 30 days before lapse, and not until the premium is 30 days overdue.
  • The insured is reminded of the designation right at least every two years.
• Reinstatement is available within five months for an insured with cognitive impairment or loss of functional capacity (45-06-05.1-05).
• Nonforfeiture. A contingent benefit upon lapse applies after a substantial premium increase (26.1-45-14).

Common exam traps

• Medigap and LTC free looks are 30 days. For LTC, the 30 days run from delivery or the effective date, whichever is later.
• North Dakota's senior suitability rule covers buyers over 65, and all Medigap buyers.
• LTC: no more than 3 ADLs, no prior hospitalization, and home care worth at least half a year of nursing home benefits.
• The individual Medigap loss ratio is 65%.