Long-Term Care Legislation
The California Long-Term Care Insurance Task Force met on Monday, December 18, 2023, to present the final Actuarial Report for a statewide long-term care insurance product in California. The state of Washington became the first state to enact legislation for long-term care. The WA Cares Fund, signed into law in 2019, created a publicly funded insurance program that will provide working residents of Washington an opportunity to vest into a basic level of LTC benefits.
Worried about LTC Legislation?
Learn how to offer a company-sponsored or company-paid long-term care plan to enable employees to obtain private coverage and potentially protect against negative new legislation.
We help companies proactively evaluate the potential financial risks and tax impacts of a state mandated long-term care program.
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California Legislative Update
The California Long-Term Care Insurance Task Force met on Monday, December 18, 2023, to present the final Actuarial Report for a statewide long-term care insurance product in California. You can find quick links below to the relevant information from the meeting.
Our firm is monitoring this closely to help our high-income and corporate clients manage potential opportunities to opt-out of likely new taxes depending on legislative action.
December 2022: The CA LTCI Task Force submitted 5 proposed plan designs to the Governor, Insurance Commissioner, and Legislature after the December 15, 2022 meeting. The Task Force now moves on to develop the actuarial study. Oliver Wyman was retained and is expected to complete this study by 01/01/2024.
AB 567 Task Force Next Steps (Nov. 2022)
If legislation is signed, it may be beneficial to get coverage sooner rather than later:
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To allow for a Full opt-out, if available. And if so:
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To avoid the inevitable rush to obtain coverage as a future TBD deadline approaches
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To select the product of preference before (and if) a carrier stops accepting new applications (what happened in Washington state)
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California Potential Plan Designs (Aug. 2022)
Notes to California Potential Long-Term Care Plan Designs:
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Portability
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Both employer AND employee funding
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Opt-Out with private insurance coverage both Before (in full) and After (partial reduction)
Lower Cost + Higher Benefit
Acquiring your own private insurance policy may be at a lower unit cost and provide higher LTC benefit amounts.
Protect Retirement
Private coverage allows you to guarantee your costs and receive benefits anywhere in the world.
Potentially Eliminate Tax
Securing private coverage may allow you to opt-out and potentially eliminate a new payroll tax (Washington is $0.58 per $100 in wages payroll tax).
State Program (WA) vs. Private Insurance
The WA state program adds a new payroll tax that will continue to increase as your wages grow ($0.58 per $100 of wages), yet benefits remain minimal compared to the cost and benefits of private long-term care insurance.
Be Proactive, not Reactive
Does a Long-Term Care Plan make sense for your company?
Census
Gather a census of your management / executive group or a company-wide plan.
Analysis
Evaluate the premium costs and benefits of various plan designs and long-term care benefit amounts.
Offers & Enroll
Negotiate offers based on the plan census of eligible employees, and use our 100% digital enrollment to issue policies.
Solution
Acquire a hybrid long-term care life insurance policy. Depending on age and income, employees can enjoy the following benefits:
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Significantly lower costs per unit of coverage
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All premiums returned via a long-term care (LTC) claim or death benefit
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Markedly higher quality benefits including indemnity definition for benefits versus what is outlined for example in the WA Cares Fund reimbursement provisions