Amended in Assembly August 18, 2016

Amended in Assembly August 1, 2016

Amended in Assembly June 14, 2016

Amended in Senate April 26, 2016

Amended in Senate March 29, 2016

Senate BillNo. 1384


Introduced by Senator Liu

February 19, 2016


An act to amend Section 10232.1 of, and to add Section 10232.81 to, the Insurance Code, and to amend Sections 22002, 22003, 22004, 22005, 22005.1, 22006, 22009, and 22010 of, to amend, repeal, and add Section 22005.2 of, to add Section 22005.3 to, and to add and repeal Section 22011 of, the Welfare and Institutions Code, relating to long-term care.

LEGISLATIVE COUNSEL’S DIGEST

SB 1384, as amended, Liu. California Partnership for Long-Term Care Program.

Existing law establishes the California Partnership for Long-Term Care Program administered by the State Department of Health Care Services. The purpose of the program is to link private long-term care insurance and health care service plan contracts that cover long-term care with the In-Home Supportive Services program and Medi-Cal and to provide Medi-Cal benefits to certain individuals who have income and resources above the eligibility levels for receipt of medical assistance, but who have purchased certified private long-term care insurance policies. Existing law provides criteria for certification of a long-term care insurance policy, including a requirement that it provide protection against loss of benefits due to inflation. Existing law requires each organization issuing certified policies to contribute a specified amount to a fund to be used for common educational and marketing expenses, as specified.

This bill would require the department to adopt regulations requiring that a long-term care insurance policy or health care service plan contract that includes long-term care services include nursing and residential care facility coverage only, home care and community-based care coverage only, or comprehensive coverage. The bill would also require that a health care service plan contract or long-term care insurance policy, as a condition of certification, include specified protections against loss of benefits due to inflation. The bill would also, until January 1, 2019, require the formation of an executive and legislative task force to provide advice and assistance in implementing reforms to the California Partnership for Long-Term Care Program and to consider other means to assist consumers in paying for long-term care services and supports, as specified. The task force would be composed of representatives of various state agencies and departments, including the State Department of Health Care Services, the State Department of Social Services, and the California Department of Aging. The bill would, until January 1, 2019, authorize thebegin delete departmentend deletebegin insert department, under specified conditions,end insert to use moneys in the fund described above to administer the task force, implement recommendations made by the task force, and facilitate review of policy forms for certification by the program and the Department of Insurance.

Existing law requires long-term care insurance policies or certificates to provide certain coverage and to make certain disclosures, as specified.

This bill would require an insurance policy, certificate, or rider that is offered under the California Partnership for Long-Term Care Program to be called a home and community-based servicesbegin delete policy andend deletebegin insert policy, certificate, or rider and for itend insert to prominently display that it is for home and community-based services only, as specified. The bill would require those policies, certificates, or riders to provide specified coverage.

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

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

P3    1

SECTION 1.  

Section 10232.1 of the Insurance Code is
2amended to read:

3

10232.1.  

(a) Every policy that is intended to be a qualified
4long-term care insurance contract as provided by Public Law
5104-191 shall be identified as such by prominently displaying and
6printing on page one of the policy form and the outline of coverage
7and in the application the following words: “This contract for
8long-term care insurance is intended to be a federally qualified
9long-term care insurance contract and may qualify you for federal
10and state tax benefits.” Every policy that is not intended to be a
11qualified long-term care insurance contract as provided by Public
12Law 104-191 shall be identified as such by prominently displaying
13and printing on page one of the policy form and the outline of
14coverage and in the application the following words: “This contract
15for long-term care insurance is not intended to be a federally
16qualified long-term care insurance contract.”

17(b) Any policy or certificate in which benefits are limited to the
18provision of institutional care shall be called a “nursing facility
19and residential care facility only” policy or certificate and the
20words “Nursing Facility and Residential Care Facility Only” shall
21be prominently displayed on page one of the form and the outline
22of coverage. The commissioner may approve alternative wording
23if it is more descriptive of the benefits.

24(c) Any policy or certificate in which benefits are limited to the
25provision of home care services, including community-based
26services, shall be called a “home care only” policy or certificate
27and the words “Home Care Only” shall be prominently displayed
28on page one of the form and the outline of coverage. The
29commissioner may approve alternative wording if it is more
30descriptive of the benefits.

31(d) Any policy, certificate, or rider in which benefits are limited
32to the provision of all care settings, except nursing facility care,
33and that is offered under the California Partnership for Long-Term
34Care Program established by Section 22000 of the Welfare and
35Institutions Code shall be called a home and community-based
36services policy, certificate, or rider and the words “Home and
37Community-Based Services Only” shall be prominently displayed
38on the first page of the form and the outline of coverage. The
P4    1commissioner may approve an alternative version of those words
2if the alternative version is more descriptive of the benefits
3provided.

4(e) Only those policies or certificates providing benefits for both
5institutional care and home care may be called “comprehensive
6long-term care” insurance.

7

SEC. 2.  

Section 10232.81 is added to the Insurance Code, to
8read:

9

10232.81.  

(a) Every long-term care policy, certificate, or rider
10that purports to provide benefits of home and community-based
11services under the California Partnership for Long-Term Care
12Program established by Section 22000 of the Welfare and
13Institutions Code shall provide at least the following:

14(1) Residential care facility.

15(2) Assisted living facility.

16(3) Home health care.

17(4) Adult day care.

18(5) Personal care.

19(6) Homemaker services.

20(7) Hospice services.

21(8) Respite care.

22(b) For purposes of this section, policy definitions of the benefits
23described in subdivision (a) may be no more restrictive than the
24following:

25(1) “Residential care facility” means a facility that is licensed
26as a residential care facility for the elderly or a residential care
27facility as defined in the Health and Safety Code. Outside
28California, an eligible provider is a facility that meets licensure
29standards applicable to the facility, if any, and is engaged primarily
30in providing ongoing care and related services sufficient to support
31needs resulting from impairment in activities of daily living or
32impairment in cognitive ability and which also provides care and
33services on a 24-hour basis, has a trained and ready-to-respond
34employee on duty in the facility at all times to provide care and
35services, provides three meals per day and accommodates special
36dietary needs, has agreements to ensure that residents receive the
37medical care services of a physician or nurse in case of emergency,
38and has appropriate methods and procedures to provide necessary
39assistance to residents in the management of prescribed
40medications.

P5    1(2) “Assisted living facility” means a facility licensed as an
2assisted living facility as defined in the Health and Safety Code.
3Outside California, an eligible provider is a facility that meets
4licensure standards applicable to the facility, if any, and is engaged
5primarily in providing food and shelter and providing personal
6care services, or in administering medication by a person licensed
7or otherwise authorized to administer the medication.

8

SEC. 3.  

Section 22002 of the Welfare and Institutions Code is
9amended to read:

10

22002.  

The State Department of Health Care Services shall
11seek any federal waivers and approvals necessary to accomplish
12the purposes of this division.

13

SEC. 4.  

Section 22003 of the Welfare and Institutions Code is
14amended to read:

15

22003.  

(a) Individuals who participate in the program and
16have resources above the eligibility levels for receipt of medical
17assistance under Title XIX of the Social Security Act (Subchapter
18XIX (commencing with Section 1396) of Chapter 7 of Title 42 of
19the United States Code) shall be eligible to receive those in-home
20supportive services benefits specified by the State Department of
21Social Services, and those Medi-Cal benefits specified by the State
22Department of Health Care Services, for which they would
23otherwise be eligible, if, prior to becoming eligible for benefits,
24they have purchased a long-term care insurance policy or a health
25care service plan contract covering long-term care that has been
26certified by the State Department of Health Care Services pursuant
27to this division.

28(b) Individuals may purchase approved and certified long-term
29care insurance policies or health care service plan contracts which
30cover long-term care services in amounts equal to the resources
31they wish to protect, so long as the amount of insurance purchased
32exceeds the minimum level set by the State Department of Health
33Care Services pursuant to Section 22009.

34(c) The resource protection provided by this division shall be
35effective only for long-term care policies, and health care service
36plan contracts that cover long-term care services, when the policy
37or contract is delivered, issued for delivery, or renewed on July 1,
381993, and thereafter.

39

SEC. 5.  

Section 22004 of the Welfare and Institutions Code is
40amended to read:

P6    1

22004.  

Notwithstanding other provisions of law, the resources,
2to the extent described in subdivision (c), of an individual who
3purchases an approved and certified long-term care insurance
4policy or health care service plan contract which covers long-term
5care services shall not be considered by:

6(a) The State Department of Health Care Services in
7determining:

8(1) Medi-Cal eligibility.

9(2) The amount of any Medi-Cal payment.

10(3) The amount of any subsequent recovery by the state of
11payments made for medical services.

12(b) The State Department of Social Services in determining:

13(1) Eligibility for in-home supportive services provided pursuant
14to Article 7 (commencing with Section 12300) of Chapter 3 of
15Division 9.

16(2) The amount of any payment for in-home supportive services.

17(c) The resources not to be considered as provided by this
18section shall be equal to, or in some proportion set by the State
19Department of Health Care Services or State Department of Social
20Services that is less than equal to, the amount of long-term care
21insurance payments or benefits made as described in Section 22006.

22

SEC. 6.  

Section 22005 of the Welfare and Institutions Code is
23amended to read:

24

22005.  

The State Department of Health Care Services shall
25only certify a long-term care insurance policy or a health care
26service plan contract that meets the Medi-Cal asset protection
27requirements.

28

SEC. 7.  

Section 22005.1 of the Welfare and Institutions Code
29 is amended to read:

30

22005.1.  

(a) The State Department of Health Care Services
31shall only certify a long-term care insurance policy that
32substantially meets the requirements of Chapter 2.6 (commencing
33with Section 10230) of Part 2 of Division 2 of the Insurance Code,
34except the requirements of Sections 10232.1, 10232.2, 10232.8,
3510232.9, and 10232.92 of the Insurance Code, and that provides
36all of the items specified in subdivision (b). The State Department
37of Health Care Services shall only certify a health care service
38plan contract that has been approved by the Department of
39Managed Health Care pursuant to Chapter 2.2 (commencing with
40Section 1340) of Division 2 of the Health and Safety Code as
P7    1providing substantially equivalent coverage to that required by
2Chapter 2.6 (commencing with Section 10230) of Part 2 of Division
32 of the Insurance Code, and that provides all of the items specified
4in subdivision (b). Policies issued by organizations subject to the
5Insurance Code and regulated by the Department of Insurance
6shall also be approved by the Department of Insurance.

7(b) Only policies and contracts that provide all of the following
8items shall be certified by the department:

9(1) Individual assessment and case management by a
10coordinating entity designated and approved by the department.

11(2) Levels and durations of benefits that meet minimum
12standards set by the State Department of Health Care Services
13pursuant to Section 22009.

14(3) Protection against loss of benefits due to inflation. An
15applicant shall be offered, at the time of purchase, the following
16options:

17(A) One option that provides, at a minimum, protection against
18begin delete an inflation rate of 5 percent or more,end deletebegin insert end insertbegin insertinflation that automatically
19increases benefit levels by 5 percent each year over the previous
20year,end insert
up to an age specified by the program.

21(B) At least one lower cost option.

22(4) A periodic record issued to the insured including an
23explanation of insurance payments or benefits paid that count
24toward Medi-Cal asset protection under this division.

25(5) Compliance with any other requirements imposed by
26regulations adopted by the State Department of Health Care
27 Services or the State Department of Social Services and consistent
28with the purposes of this division.

29

SEC. 8.  

Section 22005.2 of the Welfare and Institutions Code
30 is amended to read:

31

22005.2.  

(a) Each organization issuing policies certified by
32the State Department of Health Care Services under this division
33shall each year contribute to a fund to be used for common
34educational and marketing expenses for reaching the target
35population designated by the California Partnership for Long-Term
36Care Program. The amount of each participating issuer’s required
37annual contribution shall be determined by the department and
38shall not be less than twenty thousand dollars ($20,000).

39(b) begin deleteThe end deletebegin insertOnly to the extent that all activities identified in
40subdivision (a) and additional activities identified in Section 58051
P8    1of Title 22 of the California Code of Regulations have been fully
2funded for the fiscal year in which contributions are received, the end insert

3fund may also be used to administer the task force established by
4Section 22011, implement recommendations made by the task
5force, and facilitate review of policy forms for certification by the
6program and approval by the Department of Insurance. Use of
7these funds shall be consistent with the purpose of the program as
8established by Sectionbegin delete 22011.end deletebegin insert 22001.end insert

9(c) This section shall remain in effect only until January 1, 2019,
10and as of that date is repealed, unless a later enacted statute, that
11is enacted before January 1, 2019, deletes or extends that date.

12

SEC. 9.  

Section 22005.2 is added to the Welfare and
13Institutions Code
, to read:

14

22005.2.  

(a) Each organization issuing policies certified by
15the State Department of Health Care Services under this division
16shall each year contribute to a fund to be used for common
17educational and marketing expenses for reaching the target
18population designated by the California Partnership for Long-Term
19Care Program. The amount of each participating issuer’s required
20annual contribution shall be determined by the department and
21shall not be less than twenty thousand dollars ($20,000).

22(b) This section shall become operative on January 1, 2019.

23

SEC. 10.  

Section 22005.3 is added to the Welfare and
24Institutions Code
, to read:

25

22005.3.  

The insurer or producer shall, at the time of
26application, provide to the individual a graph that illustrates the
27difference in premium rates and policy benefits payable in
28accordance with the inflation protection provisions described in
29Section 22005.1.

30

SEC. 11.  

Section 22006 of the Welfare and Institutions Code
31 is amended to read:

32

22006.  

The State Department of Health Care Services, in
33determining eligibility for Medi-Cal, and the State Department of
34Social Services, in determining eligibility for in-home supportive
35services, shall exclude resources up to, or equal to, the amount of
36insurance payments or benefits paid by approved and certified
37long-term care insurance policies or health care service plan
38contracts which cover long-term care services to the extent that
39the benefits paid are for all of the following:

P9    1(a) In-home supportive services benefits specified in regulations
2adopted by the State Department of Social Services pursuant to
3Section 22009, or those services that Medi-Cal approves or benefits
4that Medi-Cal provides as specified in regulations adopted by the
5State Department of Health Care Services pursuant to Section
622009.

7(b) Services delivered to insured individuals at home or in a
8community setting as part of an individual assessment and case
9management program provided by coordinating entities designated
10and approved by the State Department of Health Care Services.

11(c) Services the insured individual receives after meeting the
12disability criteria for eligibility for long-term care benefits
13established by the State Department of Health Care Services.

14

SEC. 12.  

Section 22009 of the Welfare and Institutions Code
15 is amended to read:

16

22009.  

(a) The State Department of Health Care Services shall
17adopt regulations to implement this division, including, but not
18limited to, regulations that establish:

19(1) The population and age groups that are eligible to participate
20in the program.

21(2) The minimum level of long-term care insurance or long-term
22care coverage included in health care service plan contracts that
23must be purchased to meet the requirement of subdivision (b) of
24Section 22003.

25(3) (A) The amount and types of services that a long-term care
26 insurance policy or health care service plan contract that includes
27long-term care services must cover to meet the requirements of
28this division. The types of policies or plans shall include nursing
29and residential care facility coverage only, home care and
30community-based care coverage only, and comprehensive
31coverage.

32(B) Policies that provide only home care benefits shall include
33coverage for electronic or other devices intended to assist in
34monitoring the health and safety of an insured.

35(4) Which coordinating entities are designated and approved to
36deliver individual assessment and case management services to
37individuals at home or in a community setting, as required by
38subdivision (b) of Section 22006.

P10   1(b) The State Department of Health Care Services shall also
2adopt regulations to implement this division, including, but not
3limited to, regulations that establish:

4(1) The disability criteria for eligibility for long-term care
5benefits as required by subdivision (c) of Section 22006.

6(2) The specific eligibility requirements for receipt of the
7Medi-Cal benefits provided for by the program, and those Medi-Cal
8benefits for which participants in the program shall be eligible.

9(c) The State Department of Social Services shall also adopt
10regulations to implement this division, including, but not limited
11to, regulations that establish:

12(1) The specific eligibility requirements for in-home supportive
13services benefits.

14(2) Those in-home supportive services benefits for which
15participants in the program shall be eligible.

16(d) The State Department of Health Care Services and the State
17Department of Social Services shall also jointly adopt regulations
18that provide for the following:

19(1) Continuation of benefits pursuant to Section 22008.5.

20(2) The protection of a participant’s resources pursuant to
21Section 22004, and the ratio of resources to long-term care benefit
22payments as described in subdivision (c) of Section 22004.

23(e) (1) The departments shall adopt emergency regulations
24pursuant to Chapter 3.5 (commencing with Section 11340) of Part
251 of Division 3 of Title 2 of the Government Code to implement
26this division. The adoption of regulations pursuant to this section
27in order to implement this division shall be deemed to be an
28emergency and necessary for the immediate preservation of the
29public peace, health, or safety.

30(2) Notwithstanding Chapter 3.5 (commencing with Section
3111340) of Part 1 of Division 3 of Title 2 of the Government Code,
32emergency regulations adopted pursuant to this section shall not
33be subject to the review and approval of the Office of
34Administrative Law. The regulations shall become effective
35immediately upon filing with the Secretary of State. The regulations
36shall not remain in effect more than 120 days unless the adopting
37 agency complies with all of the provisions of Chapter 3.5
38(commencing with Section 11340) as required by subdivision (c)
39of Section 11346.1 of the Government Code.

P11   1

SEC. 13.  

Section 22010 of the Welfare and Institutions Code
2 is amended to read:

3

22010.  

(a) In implementing this division, the State Department
4of Health Care Services may contract, on a bid or nonbid basis,
5with any qualified individual, organization, or entity for services
6needed to implement the project, and may negotiate contracts, on
7a nonbid basis, with long-term care insurers, health care service
8plans, or both, for the provision of coverage for long-term care
9services that will meet the certification requirements set forth in
10Section 22005.1 and the other requirements of this division.

11(b) In order to achieve maximum cost savings, the Legislature
12declares that an expedited process for issuing contracts pursuant
13to this division is necessary. Therefore, contracts entered into on
14a nonbid basis pursuant to this section shall be exempt from the
15requirements of Chapter 1 (commencing with Section 10100) and
16Chapter 2 (commencing with Section 10290) of Part 2 of Division
172 of the Public Contract Code.

18

SEC. 14.  

Section 22011 is added to the Welfare and Institutions
19 Code
, to read:

20

22011.  

(a) An executive and legislative task force shall be
21formed to provide advice and assistance in implementing reforms
22to the California Partnership for Long-Term Care Program and to
23consider other means to assist consumers in paying for long-term
24care services and supports.

25(b) The task force formed pursuant to subdivision (a) shall be
26composed of representatives designated by each of the following:

27(1) The State Department of Health Care Services.

28(2) The State Department of Social Services.

29(3) The California Department of Aging.

30(4) The Department of Insurance.

31(5) The Department of Managed Health Care.

32(6) The Senate Committee on Rules.

33(7) The Speaker of the Assembly.

34(c) The task force shall consult with persons knowledgeable of
35and concerned with long-term care, including, but not limited to,
36the following:

37(1) Consumer representatives.

38(2) Long-term care providers.

P12   1(3) Representatives of long-term care insurance companies and
2administrators of health care service plans which cover long-term
3care.

4(4) Private employers.

5(5) Academic specialists in long-term care and aging.

6(6) Representatives of the Public Employees’ Retirement System
7and the State Teachers’ Retirement System.

8(d) This section shall remain in effect only until January 1, 2019,
9and as of that date is repealed, unless a later enacted statute, that
10is enacted before January 1, 2019, deletes or extends that date.



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