Amended in Assembly August 18, 2016

Amended in Assembly June 15, 2016

Amended in Senate April 19, 2016

Amended in Senate April 4, 2016

Senate Bill No. 1091

Introduced by Senator Liu

February 17, 2016

An act to add Sections 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 begin delete authorized by a provision in a policy, rider, endorsement, or amendment that allows benefits for long-term care services end delete begin insert developed by a licensed health care practitioner that includes a specification of long-term care services required by an insured end insert that are not specifically defined as a covered service under the policy. begin insert The bill would also define “alternate-plan-of-care provision” to mean a provision in a policy, rider, endorsement, or amendment that allows benefits for services specified in an alternate plan of care. end insert

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 begin insert also end insert 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 begin delete any approved alternate plan of care costs. end delete begin insert the amount of any benefits paid under an alternate plan of care. The bill would also require coverage for services under an alternate plan of care to be in addition to, not in lieu of, coverage for services specifically defined as covered services under the policy. end insert The bill would also require an begin delete insurer end delete begin insert insurer, within 60 days, end insert 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: no. State-mandated local program: no.

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

SECTION 1.  

The Legislature finds and declares begin delete both end delete begin insert all end insert 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.

begin insert

(c) Because long-term care insurance is often purchased many
years before a claim is anticipated, it is necessary to give insurers
and insureds the flexibility needed to adapt policy coverage to
meet contemporary needs.

end insert begin insert

(d) An alternate plan of care may provide insureds access to
benefits for services not available at the time the policy was
purchased and insurers a way to offer cost-effective alternatives
to the benefits explicitly covered under the policy.

end insert

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
begin delete terms end delete begin insert definitions end insert apply:

(1) An “alternate plan of care” means a plan of care begin delete authorized
by a provision in a policy, rider, endorsement, or amendment that
allows benefits for long-term care services end delete begin insert developed by a licensed
health care practitioner that includes a specification of long-term
care services required by an insured end insert that are not specifically
defined as begin delete a covered service end delete begin insert covered services end insert under the policy.

begin insert

(2) An “alternate-plan-of-care provision” means a provision
in a policy, rider, endorsement, or amendment that allows benefits
for services specified in an alternate plan of care.

end insert begin delete

(2)

end delete

begin insert (3) end insert  “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.

begin delete

(3)

end delete

begin insert (4) end insert  “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.

begin insert

(b) An alternate-plan-of-care provision shall provide for all of
the following:

end insert begin delete

(b)

end delete

begin insert (1) end insert  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 begin delete practitioner. end delete begin insert practitioner that is independent
of the insurer. end insert Consent or agreement to an alternate plan of care
shall be free and mutual.

begin delete

(c)

end delete

begin insert (2) end insert  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 begin delete 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. end delete begin insert the amount of any benefits paid under an alternate
plan of care. end insert

begin insert

(3) Coverage for services under an alternate plan of care shall
be in addition to, not in lieu of, coverage for services that are
specifically defined as covered services under the policy. The
insured may switch between services that are specifically defined
as covered services under the policy and services under the
alternate plan of care and back if there is agreement from the
licensed health care practitioner and the insurer.

end insert begin delete

(d)

end delete

begin insert (c) end insert  Nothing in this section shall be construed to require an
insurer to include a provision authorizing an alternate plan of care.

begin delete

(e)

end delete

begin insert (d) end insert  This section shall apply to policies issued on or after January
1, 2017.

SEC. 4.  

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

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.

begin insert The insurer shall provide the written explanation within 60 days
of the insurer’s determination that an agreement cannot be
reached. end insert