Amended in Senate April 19, 2016

Amended in Senate April 4, 2016

Senate BillNo. 1091


Introduced by Senator Liu

February 17, 2016


An act to add Sections 10231.3, 10233.8, and 10235.9a to the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

SB 1091, as amended, Liu. Long-term care insurance.

Under existing law, the Department of Insurance, headed by the Insurance Commissioner, licenses and regulates insurers. Existing law divides insurance into various classes, including long-term care insurance, which includes an insurance policy, certificate, or rider advertised, marketed, offered, solicited, or designed to provide coverage for diagnostic,begin delete preventative,end deletebegin insert preventive,end insert therapeutic, rehabilitative, maintenance, or personal care services that are provided in a setting other than an acute care unit of a hospital. Existing law defines “policy” for these purposes.

This bill would, among other things, define “alternate plan of care” as abegin insert plan of care authorized by a provision in aend insert policy, rider, endorsement, or amendmentbegin delete containing a provisionend delete that allows benefits for long-term care services that are not specifically defined as a covered service under the policy. The bill would prohibit an insurer from designating, advertising, marketing, offering, or soliciting a policy as “family-friendly,” “catastrophic,”begin delete “deferred,”end delete “short-term,” or “standardized,” unless the respective policy contains specified provisions.

Existing law requires an insurer to report annually by June 30 to the department the total number of claims denied by each class of business in the state, as specified, and to provide a policyholder or certificate holder whose claim is denied written notice of the reasons for denial, as specified. Existing law requires the department to provide that information to the public upon request.

This bill would require an insurer to report information to the department regarding denial of requests for treatment under an alternate plan of care, and to provide a policyholder or certificate holder written notice of denial of a request for treatment under an alternate plan of care. The bill would require the department to provide that information to the public upon request.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

The Legislature finds and declares both of the
2following:

3(a) Long-term care insurance is a vital lifeline for many of
4California’s aging population.

5(b) Ensuring that the insurance available to consumers is fair
6and accessible is essential to our aging community’s quality of
7life.

8

SEC. 2.  

It is the intent of the Legislature to ensure that
9insurance products provide appropriate benefits that fit consumers’
10needs.

11

SEC. 3.  

Section 10231.3 is added to the Insurance Code, to
12read:

13

10231.3.  

An “alternate plan of care” meansbegin insert a plan of care
14authorized by a provision inend insert
a policy, rider, endorsement, or
15amendmentbegin delete containing a provisionend delete that allows benefits for
16long-term care services that are not specifically defined as a
17covered service under the policy.

18

SEC. 4.  

Section 10233.8 is added to the Insurance Code, to
19read:

20

10233.8.  

(a) An insurer shall not designate, advertise, market,
21offer, or solicit a policy as “family-friendly” unless the policy
22provides both of the following:

P3    1(1) A coordination benefit as described in paragraph (1) of
2subdivision (b) of Section 22005.1 of the Welfare and Institutions
3Code.

4(2) One or both of the following benefits:

5(A) Permits family members to provide the care covered under
6the policy and provides caregiver training.

7(B) Provides one or both of the following benefits:

8(i) Credit for unused benefits granted to another insured in the
9same family.

10(ii) An annuity or death benefit assignable to the caregiver or
11that covers legal services related to the care of a person, including
12the preparation of a power of attorney, a health care power of
13attorney or advance directive, or legal representation in a
14conservatorship proceeding involving the person.

15(b) An insurer shall not designate, advertise, market, offer, or
16solicit a policy as a “catastrophic policy” unless the insured retains
17substantial risk before the insured becomes eligible to receive
18benefits.

begin delete

19(c) An insurer shall not designate, advertise, market, offer, or
20solicit a policy as a “deferred policy” unless the policy provides
21coverage only after the insured reaches an age specified in the
22policy.

end delete
begin delete

23 23(d)

end delete

24begin insert(c)end insert An insurer shall not designate, advertise, market, offer, or
25solicit a policy as a “short-term policy” unless the policy provides
26benefits designed to last for a time period of less than one year.

begin delete

26 27(e)

end delete

28begin insert(d)end insert An insurer shall not designate, advertise, market, offer, or
29solicit a policy as a “standardized policy” unless the policy meets
30standardized benefit levels and other criteria as determined by the
31commissioner.

32

SEC. 5.  

Section 10235.9a is added to the Insurance Code, 33immediately following Section 10235.9, to read:

34

10235.9a.  

(a) An insurer shall provide a policyholder or
35certificate holder, whose request for treatment under an alternate
36plan of care has been denied, a written notice within 40 days of
37the date of the denial, including the reasons for the denial and all
38information directly related to the denial.

39(b) An insurer shall report to the department by June 30 of each
40year, together with the information required pursuant to Section
P4    110235.9, the number of requests from insureds for treatment to be
2provided under an alternate plan of care, any reason used by the
3insurer to deny those requests, and the number of requests denied
4for each of those reasons.

5(c) The department shall make available to the public, upon
6request, the information obtained pursuant to subdivision (b).



O

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