BILL NUMBER: SB 1091 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 15, 2016
AMENDED IN SENATE APRIL 19, 2016
AMENDED IN SENATE APRIL 4, 2016
INTRODUCED BY Senator Liu
FEBRUARY 17, 2016
An act to add Sections 10231.3, 10233.8, and
10231.3 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, preventive, 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 a plan of care authorized by a provision in a policy, rider,
endorsement, or amendment 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," "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.
The bill would authorize, for policies issued on or after January
1, 2017, the insured or an insurer to propose an alternate plan of
care. The bill would prohibit the maximum benefit available under the
contract from being changed based on an insured utilizing an
alternate plan of care but would authorize the maximum benefit to be
reduced by any approved alternate plan of care costs. The bill would
also require an insurer to provide a written explanation to the
policyholder or certificate holder as to the specific reason an
agreement cannot be reached for policies or certificates that contain
an alternate plan of care provision, as specified.
Vote: majority. Appropriation: no. Fiscal committee: yes
no . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares both of the
following:
(a) Long-term care insurance is a vital lifeline for many of
California's aging population.
(b) Ensuring that the insurance available to consumers is fair and
accessible is essential to our aging community's quality of life.
SEC. 2. It is the intent of the Legislature to ensure that
insurance products provide appropriate benefits that fit consumers'
needs.
SEC. 3. Section 10231.3 is added to the Insurance Code, to read:
10231.3. (a) For the purposes of this section, the following
terms apply:
(1) An "alternate plan of care" means a plan
of care authorized by a provision in a policy, rider, endorsement,
or amendment that allows benefits for long-term care services that
are not specifically defined as a covered service under the policy.
(2) "Licensed health care practitioner" means a physician,
registered nurse, licensed social worker, or other individual whom
the United States Secretary of the Treasury may prescribe by
regulation.
(3) "Plan of care" means a written description of the insured's
needs and a specification of the type, frequency, and providers of
all formal and informal long-term care services required by the
insured and the cost, if any.
(b) An alternate plan of care may be proposed by the insured or
the insurer. Adoption, amendment, or replacement of an alternate plan
of care shall be agreed to by the insured, the insurer, and a
licensed health care practitioner. Consent or agreement to an
alternate plan of care shall be free and mutual.
(c) The maximum benefit available under the contract shall not
change based on an insured utilizing an alternate plan of care, but
that benefit will be reduced by any alternate plan of care costs that
are approved. Nothing in this section shall prohibit an insurer from
requiring that an alternate plan of care be a cost-effective
alternative.
(d) Nothing in this section shall be construed to require an
insurer to include a provision authorizing an alternate plan of care.
(e) This section shall apply to policies issued on or after
January 1, 2017.
SEC. 4. Section 10233.8 is added to the
Insurance Code, to read:
10233.8. (a) An insurer shall not designate, advertise, market,
offer, or solicit a policy as "family-friendly" unless the policy
provides both of the following:
(1) A coordination benefit as described in paragraph (1) of
subdivision (b) of Section 22005.1 of the Welfare and Institutions
Code.
(2) One or both of the following benefits:
(A) Permits family members to provide the care covered under the
policy and provides caregiver training.
(B) Provides one or both of the following benefits:
(i) Credit for unused benefits granted to another insured in the
same family.
(ii) An annuity or death benefit assignable to the caregiver or
that covers legal services related to the care of a person, including
the preparation of a power of attorney, a health care power of
attorney or advance directive, or legal representation in a
conservatorship proceeding involving the person.
(b) An insurer shall not designate, advertise, market, offer, or
solicit a policy as a "catastrophic policy" unless the insured
retains substantial risk before the insured becomes eligible to
receive benefits.
(c) An insurer shall not designate, advertise, market, offer, or
solicit a policy as a "short-term policy" unless the policy provides
benefits designed to last for a time period of less than one year.
(d) An insurer shall not designate, advertise, market, offer, or
solicit a policy as a "standardized policy" unless the policy meets
standardized benefit levels and other criteria as determined by the
commissioner.
SEC. 5. SEC. 4. Section 10235.9a is
added to the Insurance Code, immediately following Section 10235.9,
to read:
10235.9a. (a) An insurer shall provide a policyholder or
certificate holder, whose request for treatment under an alternate
plan of care has been denied, a written notice within 40 days of the
date of the denial, including the reasons for the denial and all
information directly related to the denial.
(b) An insurer shall report to the department by June 30 of each
year, together with the information required pursuant to Section
10235.9, the number of requests from insureds for treatment to be
provided under an alternate plan of care, any reason used by the
insurer to deny those requests, and the number of requests denied for
each of those reasons.
(c) The department shall make available to the public, upon
request, the information obtained pursuant to subdivision (b).
10235.9a. For policies or certificates issued on or after January
1, 2017, that contain an alternate plan of care provision pursuant
to Section 10231.3, if an insurer and insured cannot agree on the
terms of an alternate plan of care, the insurer shall provide a
written explanation to the policyholder or certificate holder as to
the specific reason or reasons why the agreement cannot be reached.