Author: Steven H. Brogan

Steven Brogan represents insurers and third-party administrators in litigation, regulatory compliance, premium rate increases, claims administration, compliance training and audits, and fraud prevention, with particular focus on long-term care insurance matters. In litigation, he represents long-term care insurers in class action and individual litigation related to a wide range of matters, including complex coverage issues, bad faith claims and premium rate increase litigation. Visit Steve's full bio on the Faegre Drinker website.

NAIC Privacy Protections Working Group Meets to Discuss New Model Privacy Law

On June 5-6, 2023, the NAIC Privacy Protections (H) Working Group (“PPWG”) held an in-person interim meeting (“session”) to continue its work on drafting a new model privacy law, the Insurance Consumer Privacy Protection Model Law #674 (“Model Law”). Model Law #674 is intended to replace the current Models #670 and #672. The session was intended to be a drafting session focused on certain provisions of the current exposure draft not yet covered during the three preceding PPWG open drafting calls.

During the session, the working group covered third-party service providers, definitions of “insurance transactions” and “additional permitted transactions,” marketing (and joint-marketing agreements), consent to marketing (opt-in versus opt-out), and consumer privacy notices. The PPWG announced it intends to release a new exposure draft (version 1.0) of the Model Law by the end of June to address many of the comments the working group has received and discussed to date. There will be no 60-day comment period for this draft and instead, open calls to discuss drafting will restart once the new exposure draft is released.

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HIPAA Regulation of Online Tracking Technologies

In a December 2022 bulletin published by the Office for Civil Rights at the U.S. Department of Health and Human Services (HHS), HHS made clear that the use of third-party tracking technologies by covered entities and business associates is subject to HIPAA privacy and security rules. The use of tracking technologies developed by third-party vendors is increasingly common, and much of the LTCi industry is subject to HIPAA privacy and security rules as either covered entities or business associates. HHS noted in the bulletin that covered entities and business associates “are not permitted to use tracking technologies in a manner that would result in impermissible disclosures of [protected health information (“PHI”)] to tracking technology vendors or any other violations of the HIPAA Rules.” And, as applied to the use of tracking technologies, HHS’s view of what constitutes PHI may be broader than expected.

What Are Tracking Technologies?

Tracking technologies (including cookies, pixels, and other similar technologies) collect information about individuals who interact with an entity’s website or mobile application (“mobile app”). Businesses use a variety of tracking technologies on websites and mobile apps to improve functionality and learn more about users’ activities. Tracking technologies developed by third parties generally involve the sharing of data back to that third party, so when a HIPAA-covered entity or business associate uses these tracking technologies, they must be cognizant of what data is being shared, to who, and for what purpose.

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The NAIC LTCi Reduced Benefit Options Subgroup Reports on Potential Issues Related to LTC Wellness Benefits

On July 22, 2021, the NAIC Long-Term Care Insurance Reduced Benefit Options (EX) Subgroup, led by Commissioner Altman (PA), posted its first draft of a discussion paper Issues Related to LTC Wellness Benefits online. Comments are due September 5, 2021.

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New Hampshire Supreme Court Strikes Down Long-Term Care Insurance Premium Rate Increase Caps

The New Hampshire Supreme Court recently ruled that New Hampshire’s regulation that places certain caps on long-term care insurance premium rate increases exceeds the Insurance Commissioner’s rulemaking authority and, therefore, is invalid. See Genworth Life Ins. Co. v. New Hampshire Dep’t of Ins., No. 2019-0727, 2021 WL 621005 (N.H. Feb. 17, 2021).

Some states, either by regulation or administrative practice, place caps on long-term care insurance premium rate increases. In 2015, New Hampshire promulgated amended long-term care insurance regulations that capped premium rate increases based on an insured’s attained age and applied the new caps retroactively to all long-term care insurance policies issued in the state (Amended Regulations). See generally N.H. Code Admin. R. § 19. As drafted, the regulation did not afford the Commissioner discretion to approve increases that exceed the caps. The rate caps were implemented on a sliding scale from 50 percent for all policyholders with attained ages 70 and below down to 10% for policyholders with attained ages over 90. As with caps implemented by other states, the caps adopted by New Hampshire had no actuarial basis.

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Alaska Orders Long-Term Care Insurers to Temporarily Suspend Enforcement of Family Member Exclusions

The Alaska Division of Insurance recently ordered long-term care insurers to suspend enforcement of family member exclusions until December 15, 2020, or until such time that Governor Mike Dunleavy determines that the declared public health disaster emergency resulting from COVID-19 no longer exists. See Order R20-10 (November 16, 2020). In the Order, the Division expresses its determination that insureds be able to access their benefits notwithstanding family member policy exclusions due to the increased risk of exposure attendant to home health care providers traveling between households. The Division has extended similar orders during the pandemic, so this Order may be extended beyond December 15. Although the industry has become accustomed to COVID-19-related accommodations pursuant to orders from state regulators, the Division’s decision to suspend family member exclusions is a first during the COVID-19 pandemic and may present administrative and compliance challenges.

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Recent Developments in LTC Rate Increase Litigation

A relatively consistent flow of premium rate increase litigation has been filed against long-term care (LTC) carriers over the past several years. Following the plaintiffs’ bar having early success in a limited number of LTC rate increase class actions in the early 2000s, the tide turned definitively in favor of carriers in what we think of as the first generation of such litigation, where the plaintiffs’ bar focused primarily on an alleged duty to disclose possible rate increases and challenging the language of the contract itself. Despite the industry’s overall success, premium rate increase litigation has attracted an increased level of sophistication from the plaintiffs’ bar, which shifted to more creative theories based on extra-contractual representations (e.g., marketing materials) in what we view as the second generation of premium rate increase litigation. While the industry remains mostly successful in warding off rate increase litigation, a new trend may be developing as recent cases focus on more nuanced contractual limitations and rate increase implementation issues.

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Responding and Managing the Impact of COVID-19

Assured Allies and Faegre Drinker have partnered to develop a playbook for the long-term care insurance industry. Responding and Managing the Impact of COVID-19 offers insights, guidance and ideas to manage the short- and medium-term impacts of the COVID-19 global pandemic and provides potential avenues for long-term care insurers to explore in the post-COVID-19 world that could change long-term care insurance forever.