BILL NUMBER: SB 1384 CHAPTERED
BILL TEXT
CHAPTER 487
FILED WITH SECRETARY OF STATE SEPTEMBER 22, 2016
APPROVED BY GOVERNOR SEPTEMBER 22, 2016
PASSED THE SENATE AUGUST 29, 2016
PASSED THE ASSEMBLY AUGUST 24, 2016
AMENDED IN ASSEMBLY AUGUST 18, 2016
AMENDED IN ASSEMBLY AUGUST 1, 2016
AMENDED IN ASSEMBLY JUNE 14, 2016
AMENDED IN SENATE APRIL 26, 2016
AMENDED IN SENATE MARCH 29, 2016
INTRODUCED BY Senator Liu
FEBRUARY 19, 2016
An act to amend Section 10232.1 of, and to add Section 10232.81
to, the Insurance Code, and to amend Sections 22002, 22003, 22004,
22005, 22005.1, 22006, 22009, and 22010 of, to amend, repeal, and add
Section 22005.2 of, to add Section 22005.3 to, and to add and repeal
Section 22011 of, the Welfare and Institutions Code, relating to
long-term care.
LEGISLATIVE COUNSEL'S DIGEST
SB 1384, Liu. California Partnership for Long-Term Care Program.
Existing law establishes the California Partnership for Long-Term
Care Program administered by the State Department of Health Care
Services. The purpose of the program is to link private long-term
care insurance and health care service plan contracts that cover
long-term care with the In-Home Supportive Services program and the
Medi-Cal program and to provide Medi-Cal program benefits to certain
individuals who have income and resources above the eligibility
levels for receipt of medical assistance, but who have purchased
certified private long-term care insurance policies. Existing law
provides criteria for certification of a long-term care insurance
policy, including a requirement that it provide protection against
loss of benefits due to inflation. Existing law requires each
organization issuing certified policies to contribute a specified
amount to a fund to be used for common educational and marketing
expenses, as specified.
This bill would require the department to adopt regulations
requiring that a long-term care insurance policy or health care
service plan contract that includes long-term care services include
nursing and residential care facility coverage only, home care and
community-based care coverage only, or comprehensive coverage. The
bill would also require that a health care service plan contract or
long-term care insurance policy, as a condition of certification,
include specified protections against loss of benefits due to
inflation. The bill would also, until January 1, 2019, require the
formation of an executive and legislative task force to provide
advice and assistance in implementing reforms to the California
Partnership for Long-Term Care Program and to consider other means to
assist consumers in paying for long-term care services and supports,
as specified. The task force would be composed of representatives of
various state agencies and departments, including the State
Department of Health Care Services, the State Department of Social
Services, and the California Department of Aging. The bill would,
until January 1, 2019, authorize the department, under specified
conditions, to use moneys in the fund described above to administer
the task force, implement recommendations made by the task force, and
facilitate review of policy forms for certification by the program
and the Department of Insurance.
Existing law requires long-term care insurance policies or
certificates to provide certain coverage and to make certain
disclosures, as specified.
This bill would require an insurance policy, certificate, or rider
that is offered under the California Partnership for Long-Term Care
Program to be called a home and community-based services policy,
certificate, or rider and for it to prominently display that it is
for home and community-based services only, as specified. The bill
would require those policies, certificates, or riders to provide
specified coverage.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 10232.1 of the Insurance Code is amended to
read:
10232.1. (a) Every policy that is intended to be a qualified
long-term care insurance contract as provided by Public Law 104-191
shall be identified as such by prominently displaying and printing on
page one of the policy form and the outline of coverage and in the
application the following words: "This contract for long-term care
insurance is intended to be a federally qualified long-term care
insurance contract and may qualify you for federal and state tax
benefits." Every policy that is not intended to be a qualified
long-term care insurance contract as provided by Public Law 104-191
shall be identified as such by prominently displaying and printing on
page one of the policy form and the outline of coverage and in the
application the following words: "This contract for long-term care
insurance is not intended to be a federally qualified long-term care
insurance contract."
(b) Any policy or certificate in which benefits are limited to the
provision of institutional care shall be called a "nursing facility
and residential care facility only" policy or certificate and the
words "Nursing Facility and Residential Care Facility Only" shall be
prominently displayed on page one of the form and the outline of
coverage. The commissioner may approve alternative wording if it is
more descriptive of the benefits.
(c) Any policy or certificate in which benefits are limited to the
provision of home care services, including community-based services,
shall be called a "home care only" policy or certificate and the
words "Home Care Only" shall be prominently displayed on page one of
the form and the outline of coverage. The commissioner may approve
alternative wording if it is more descriptive of the benefits.
(d) Any policy, certificate, or rider in which benefits are
limited to the provision of all care settings, except nursing
facility care, and that is offered under the California Partnership
for Long-Term Care Program established by Section 22000 of the
Welfare and Institutions Code shall be called a home and
community-based services policy, certificate, or rider and the words
"Home and Community-Based Services Only" shall be prominently
displayed on the first page of the form and the outline of coverage.
The commissioner may approve an alternative version of those words if
the alternative version is more descriptive of the benefits
provided.
(e) Only those policies or certificates providing benefits for
both institutional care and home care may be called "comprehensive
long-term care" insurance.
SEC. 2. Section 10232.81 is added to the Insurance Code, to read:
10232.81. (a) Every long-term care policy, certificate, or rider
that purports to provide benefits of home and community-based
services under the California Partnership for Long-Term Care Program
established by Section 22000 of the Welfare and Institutions Code
shall provide at least the following:
(1) Residential care facility.
(2) Assisted living facility.
(3) Home health care.
(4) Adult day care.
(5) Personal care.
(6) Homemaker services.
(7) Hospice services.
(8) Respite care.
(b) For purposes of this section, policy definitions of the
benefits described in subdivision (a) may be no more restrictive than
the following:
(1) "Residential care facility" means a facility that is licensed
as a residential care facility for the elderly or a residential care
facility as defined in the Health and Safety Code. Outside
California, an eligible provider is a facility that meets licensure
standards applicable to the facility, if any, and is engaged
primarily in providing ongoing care and related services sufficient
to support needs resulting from impairment in activities of daily
living or impairment in cognitive ability and which also provides
care and services on a 24-hour basis, has a trained and
ready-to-respond employee on duty in the facility at all times to
provide care and services, provides three meals per day and
accommodates special dietary needs, has agreements to ensure that
residents receive the medical care services of a physician or nurse
in case of emergency, and has appropriate methods and procedures to
provide necessary assistance to residents in the management of
prescribed medications.
(2) "Assisted living facility" means a facility licensed as an
assisted living facility as defined in the Health and Safety Code.
Outside California, an eligible provider is a facility that meets
licensure standards applicable to the facility, if any, and is
engaged primarily in providing food and shelter and providing
personal care services, or in administering medication by a person
licensed or otherwise authorized to administer the medication.
SEC. 3. Section 22002 of the Welfare and Institutions Code is
amended to read:
22002. The State Department of Health Care Services shall seek
any federal waivers and approvals necessary to accomplish the
purposes of this division.
SEC. 4. Section 22003 of the Welfare and Institutions Code is
amended to read:
22003. (a) Individuals who participate in the program and have
resources above the eligibility levels for receipt of medical
assistance under Title XIX of the Social Security Act (Subchapter XIX
(commencing with Section 1396) of Chapter 7 of Title 42 of the
United States Code) shall be eligible to receive those in-home
supportive services benefits specified by the State Department of
Social Services, and those Medi-Cal benefits specified by the State
Department of Health Care Services, for which they would otherwise be
eligible, if, prior to becoming eligible for benefits, they have
purchased a long-term care insurance policy or a health care service
plan contract covering long-term care that has been certified by the
State Department of Health Care Services pursuant to this division.
(b) Individuals may purchase approved and certified long-term care
insurance policies or health care service plan contracts which cover
long-term care services in amounts equal to the resources they wish
to protect, so long as the amount of insurance purchased exceeds the
minimum level set by the State Department of Health Care Services
pursuant to Section 22009.
(c) The resource protection provided by this division shall be
effective only for long-term care policies, and health care service
plan contracts that cover long-term care services, when the policy or
contract is delivered, issued for delivery, or renewed on July 1,
1993, and thereafter.
SEC. 5. Section 22004 of the Welfare and Institutions Code is
amended to read:
22004. Notwithstanding other provisions of law, the resources, to
the extent described in subdivision (c), of an individual who
purchases an approved and certified long-term care insurance policy
or health care service plan contract which covers long-term care
services shall not be considered by:
(a) The State Department of Health Care Services in determining:
(1) Medi-Cal eligibility.
(2) The amount of any Medi-Cal payment.
(3) The amount of any subsequent recovery by the state of payments
made for medical services.
(b) The State Department of Social Services in determining:
(1) Eligibility for in-home supportive services provided pursuant
to Article 7 (commencing with Section 12300) of Chapter 3 of Division
9.
(2) The amount of any payment for in-home supportive services.
(c) The resources not to be considered as provided by this section
shall be equal to, or in some proportion set by the State Department
of Health Care Services or State Department of Social Services that
is less than equal to, the amount of long-term care insurance
payments or benefits made as described in Section 22006.
SEC. 6. Section 22005 of the Welfare and Institutions Code is
amended to read:
22005. The State Department of Health Care Services shall only
certify a long-term care insurance policy or a health care service
plan contract that meets the Medi-Cal asset protection requirements.
SEC. 7. Section 22005.1 of the Welfare and Institutions Code is
amended to read:
22005.1. (a) The State Department of Health Care Services shall
only certify a long-term care insurance policy that substantially
meets the requirements of Chapter 2.6 (commencing with Section 10230)
of Part 2 of Division 2 of the Insurance Code, except the
requirements of Sections 10232.1, 10232.2, 10232.8, 10232.9, and
10232.92 of the Insurance Code, and that provides all of the items
specified in subdivision (b). The State Department of Health Care
Services shall only certify a health care service plan contract that
has been approved by the Department of Managed Health Care pursuant
to Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code as providing substantially equivalent coverage
to that required by Chapter 2.6 (commencing with Section 10230) of
Part 2 of Division 2 of the Insurance Code, and that provides all of
the items specified in subdivision (b). Policies issued by
organizations subject to the Insurance Code and regulated by the
Department of Insurance shall also be approved by the Department of
Insurance.
(b) Only policies and contracts that provide all of the following
items shall be certified by the department:
(1) Individual assessment and case management by a coordinating
entity designated and approved by the department.
(2) Levels and durations of benefits that meet minimum standards
set by the State Department of Health Care Services pursuant to
Section 22009.
(3) Protection against loss of benefits due to inflation. An
applicant shall be offered, at the time of purchase, the following
options:
(A) One option that provides, at a minimum, protection against
inflation that automatically increases benefit levels by 5 percent
each year over the previous year, up to an age specified by the
program.
(B) At least one lower cost option.
(4) A periodic record issued to the insured including an
explanation of insurance payments or benefits paid that count toward
Medi-Cal asset protection under this division.
(5) Compliance with any other requirements imposed by regulations
adopted by the State Department of Health Care Services or the State
Department of Social Services and consistent with the purposes of
this division.
SEC. 8. Section 22005.2 of the Welfare and Institutions Code is
amended to read:
22005.2. (a) Each organization issuing policies certified by the
State Department of Health Care Services under this division shall
each year contribute to a fund to be used for common educational and
marketing expenses for reaching the target population designated by
the California Partnership for Long-Term Care Program. The amount of
each participating issuer's required annual contribution shall be
determined by the department and shall not be less than twenty
thousand dollars ($20,000).
(b) Only to the extent that all activities identified in
subdivision (a) and additional activities identified in Section 58051
of Title 22 of the California Code of Regulations have been fully
funded for the fiscal year in which contributions are received, the
fund may also be used to administer the task force established by
Section 22011, implement recommendations made by the task force, and
facilitate review of policy forms for certification by the program
and approval by the Department of Insurance. Use of these funds shall
be consistent with the purpose of the program as established by
Section 22001.
(c) This section shall remain in effect only until January 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.
SEC. 9. Section 22005.2 is added to the Welfare and Institutions
Code, to read:
22005.2. (a) Each organization issuing policies certified by the
State Department of Health Care Services under this division shall
each year contribute to a fund to be used for common educational and
marketing expenses for reaching the target population designated by
the California Partnership for Long-Term Care Program. The amount of
each participating issuer's required annual contribution shall be
determined by the department and shall not be less than twenty
thousand dollars ($20,000).
(b) This section shall become operative on January 1, 2019.
SEC. 10. Section 22005.3 is added to the Welfare and Institutions
Code, to read:
22005.3. The insurer or producer shall, at the time of
application, provide to the individual a graph that illustrates the
difference in premium rates and policy benefits payable in accordance
with the inflation protection provisions described in Section
22005.1.
SEC. 11. Section 22006 of the Welfare and Institutions Code is
amended to read:
22006. The State Department of Health Care Services, in
determining eligibility for Medi-Cal, and the State Department of
Social Services, in determining eligibility for in-home supportive
services, shall exclude resources up to, or equal to, the amount of
insurance payments or benefits paid by approved and certified
long-term care insurance policies or health care service plan
contracts which cover long-term care services to the extent that the
benefits paid are for all of the following:
(a) In-home supportive services benefits specified in regulations
adopted by the State Department of Social Services pursuant to
Section 22009, or those services that Medi-Cal approves or benefits
that Medi-Cal provides as specified in regulations adopted by the
State Department of Health Care Services pursuant to Section 22009.
(b) Services delivered to insured individuals at home or in a
community setting as part of an individual assessment and case
management program provided by coordinating entities designated and
approved by the State Department of Health Care Services.
(c) Services the insured individual receives after meeting the
disability criteria for eligibility for long-term care benefits
established by the State Department of Health Care Services.
SEC. 12. Section 22009 of the Welfare and Institutions Code is
amended to read:
22009. (a) The State Department of Health Care Services shall
adopt regulations to implement this division, including, but not
limited to, regulations that establish:
(1) The population and age groups that are eligible to participate
in the program.
(2) The minimum level of long-term care insurance or long-term
care coverage included in health care service plan contracts that
must be purchased to meet the requirement of subdivision (b) of
Section 22003.
(3) (A) The amount and types of services that a long-term care
insurance policy or health care service plan contract that includes
long-term care services must cover to meet the requirements of this
division. The types of policies or plans shall include nursing and
residential care facility coverage only, home care and
community-based care coverage only, and comprehensive coverage.
(B) Policies that provide only home care benefits shall include
coverage for electronic or other devices intended to assist in
monitoring the health and safety of an insured.
(4) Which coordinating entities are designated and approved to
deliver individual assessment and case management services to
individuals at home or in a community setting, as required by
subdivision (b) of Section 22006.
(b) The State Department of Health Care Services shall also adopt
regulations to implement this division, including, but not limited
to, regulations that establish:
(1) The disability criteria for eligibility for long-term care
benefits as required by subdivision (c) of Section 22006.
(2) The specific eligibility requirements for receipt of the
Medi-Cal benefits provided for by the program, and those Medi-Cal
benefits for which participants in the program shall be eligible.
(c) The State Department of Social Services shall also adopt
regulations to implement this division, including, but not limited
to, regulations that establish:
(1) The specific eligibility requirements for in-home supportive
services benefits.
(2) Those in-home supportive services benefits for which
participants in the program shall be eligible.
(d) The State Department of Health Care Services and the State
Department of Social Services shall also jointly adopt regulations
that provide for the following:
(1) Continuation of benefits pursuant to Section 22008.5.
(2) The protection of a participant's resources pursuant to
Section 22004, and the ratio of resources to long-term care benefit
payments as described in subdivision (c) of Section 22004.
(e) (1) The departments shall adopt emergency regulations pursuant
to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division
3 of Title 2 of the Government Code to implement this division. The
adoption of regulations pursuant to this section in order to
implement this division shall be deemed to be an emergency and
necessary for the immediate preservation of the public peace, health,
or safety.
(2) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, emergency
regulations adopted pursuant to this section shall not be subject to
the review and approval of the Office of Administrative Law. The
regulations shall become effective immediately upon filing with the
Secretary of State. The regulations shall not remain in effect more
than 120 days unless the adopting agency complies with all of the
provisions of Chapter 3.5 (commencing with Section 11340) as required
by subdivision (c) of Section 11346.1 of the Government Code.
SEC. 13. Section 22010 of the Welfare and Institutions Code is
amended to read:
22010. (a) In implementing this division, the State Department of
Health Care Services may contract, on a bid or nonbid basis, with
any qualified individual, organization, or entity for services needed
to implement the project, and may negotiate contracts, on a nonbid
basis, with long-term care insurers, health care service plans, or
both, for the provision of coverage for long-term care services that
will meet the certification requirements set forth in Section 22005.1
and the other requirements of this division.
(b) In order to achieve maximum cost savings, the Legislature
declares that an expedited process for issuing contracts pursuant to
this division is necessary. Therefore, contracts entered into on a
nonbid basis pursuant to this section shall be exempt from the
requirements of Chapter 1 (commencing with Section 10100) and Chapter
2 (commencing with Section 10290) of Part 2 of Division 2 of the
Public Contract Code.
SEC. 14. Section 22011 is added to the Welfare and Institutions
Code, to read:
22011. (a) An executive and legislative task force shall be
formed to provide advice and assistance in implementing reforms to
the California Partnership for Long-Term Care Program and to consider
other means to assist consumers in paying for long-term care
services and supports.
(b) The task force formed pursuant to subdivision (a) shall be
composed of representatives designated by each of the following:
(1) The State Department of Health Care Services.
(2) The State Department of Social Services.
(3) The California Department of Aging.
(4) The Department of Insurance.
(5) The Department of Managed Health Care.
(6) The Senate Committee on Rules.
(7) The Speaker of the Assembly.
(c) The task force shall consult with persons knowledgeable of and
concerned with long-term care, including, but not limited to, the
following:
(1) Consumer representatives.
(2) Long-term care providers.
(3) Representatives of long-term care insurance companies and
administrators of health care service plans which cover long-term
care.
(4) Private employers.
(5) Academic specialists in long-term care and aging.
(6) Representatives of the Public Employees' Retirement System and
the State Teachers' Retirement System.
(d) This section shall remain in effect only until January 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.