BILL ANALYSIS �
AB 373
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Date of Hearing: April 17, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 373 (Mullin) - As Amended: March 19, 2013
Policy Committee: PERSSVote:5-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the Board of Administration of the California
Public Employees' Retirement System's (CalPERS) to expand
eligibility for the Long-Term Care (LTC) program. Specifically,
this bill:
1)Allows the adult child, aged 18 or older, of any California
public employee or retiree eligible to participate in the
CalPERS LTC program.
2)Allows same-sex spouses and domestic partners, if permitted
under the Internal Revenue Code and applicable law, to
participate in the CalPERS LTC program.
3)Allows the CalPERS board to expand eligibility to any other
person permitted under applicable law governing federally
qualified state long-term care plans.
FISCAL EFFECT
Negligible fiscal impact to CalPERS.
COMMENTS
1)Purpose . According to the author, expanding eligibility
requirements to adult children and other qualified persons
provide the following benefits for the CalPERS LTC Program:
a) Better aligns the CalPERS LTC Program eligibility
requirements with the Internal Revenue Code provisions
applicable to state-maintained long-term care plans.
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b) Demonstrates the sustainability of the LTC Program and
CalPERS' commitment to provide a viable voluntary insurance
benefit for eligible policyholders.
c) Potentially increases the solvency and sustainability of
the LTC Program by bringing in more premium dollars in and
lowering the risk to the pool by adding new and younger
policyholders into the program.
2)Support . CalPERS, the sponsor, states this bill adds adult
children to the list of those eligible for the CalPERS LTC
Program and also expands eligibility to other individuals who
may be permitted to participate in federally qualified
state-maintained long-term care plans in the future, such as
same-sex spouses and registered domestic partners. After
recent board actions to stabilize the CalPERS Long-Term Care
Program and reopen enrollment to new participants, CalPERS
argues expanding eligibility to add additional, and possibly
younger policy holders to the risk pool, will help improve the
sustainability of this program.
3)Background . CalPERS administers a program that offers
long-term care insurance coverage to all California public
employees, their spouses, parents, parents-in-law and
siblings. AB 44 (Connelly), Chapter 9, Statutes of 1991,
enacted the CalPERS LTC Program. The legislation authorized
CalPERS to make plans available to active and retired members,
their spouses, and parents by January 1, 1992, and specified
that the enrollee must pay the entire cost to enroll in the
plan.
CalPERS has been forced to undertake a number of actions to
maintain the solvency of the program. The CalPERS Board of
Administration approved a Long-Term Care premium increase of
79% beginning in 2015, or at the policyholder's election, 85%
levied over a two-year period beginning in 2015.
4)Previous legislation.
a) AB 824 (Cohn), Chapter 185, Statutes of 2001, allowed
siblings, at least 18 year of age, of eligible active and
retire public employees to enroll in the CalPERS LTC
Program.
b) SB 860 (Alquist), Chapter 850, Statutes of 1995,
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extended eligibility in the CalPERS LTC Program to active
and retired members of the Legislators' Retirement System,
the Judges' Retirement System and members of the Assembly
and the Senate.
c) SB 857 (Hughes), Chapter 1144, Statutes of 1993,
extended enrollment eligibility in the CalPERS LTC Program
to members and retirees of the California State Teachers'
Retirement System, their spouses and their parents.
1)There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081