BILL NUMBER: SB 1091 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 26, 2016
PASSED THE ASSEMBLY AUGUST 24, 2016
AMENDED IN ASSEMBLY AUGUST 18, 2016
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 and 10235.9a to the Insurance Code,
relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
SB 1091, 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 developed by a licensed health care
practitioner that includes a specification of long-term care services
required by an insured that are not specifically defined as a
covered service under the policy. 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.
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 also 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 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. The bill would also require an insurer, within 60 days, 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.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all 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.
(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.
(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.
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
definitions apply:
(1) An "alternate plan of care" means a plan of care developed by
a licensed health care practitioner that includes a specification of
long-term care services required by an insured that are not
specifically defined as covered services under the policy.
(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.
(3) "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.
(4) "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 provision shall provide for all of
the following:
(1) 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 that is independent of the insurer.
Consent or agreement to an alternate plan of care shall be free and
mutual.
(2) 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 the amount of any benefits paid under
an alternate plan of care.
(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.
(c) Nothing in this section shall be construed to require an
insurer to include a provision authorizing an alternate plan of care.
(d) 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.
The insurer shall provide the written explanation within 60 days of
the insurer's determination that an agreement cannot be reached.