CalPERS long-term care letter to members

7/30/2019 CalPERS long-term care letter to members

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April 26, 2013

FIRST NAME M.I. LAST NAMEADDRESS LINE 1ADDRESS LINE 2CITY STATE ZIP CODE

RE: Your CalPERS Long-Term Care ProgramCoverage ID #NUMBER

Dear First Name M.I. Last Name:

Thank you for being among the nearly 150,000 members of the CalPERS Long-Term

Care (LTC) Program. We know that you are counting on this Program for support in thefuture, and we are committed to ensuring that it remains secure and financially solvent. Toachieve this goal, the Board of Administration (Board) voted in December 2009 to raisepremium rates. This included an increase in 2010 and annual 5 percent increasesstarting in 2011.

In October 2012, the Board determined that all members with Lifetime Coverage andBuilt-in Inflation Protection issued from 1995 through 2004 would continue to receive anadditional premium increase. With your current coverage, you will receive the 5 percentannual increases in 2013 and 2014. In 2015, you will see an additional premiumincrease of approximately 85 percent, spread over two years.

This letter, in accordance with your Evidence of Coverage, is your formalnotification of the 5 percent premium increase for 2013.

In March, you received a letter describing choices you would have available. Younow need to make choices regarding your coverage.

You may choose to keep your current coverage and accept these increases. You mayalso select among several options to adjust your coverage and avoid these increases.We encourage you to select the option that best meets your long-term care needs.Please find the detailed options in the enclosed Summary of Your Current Benefits and

Available Options.

Here are the steps to consider, as you review your opt ions:

1. Review your Evidence of Coverage and Schedule of Benefits. To obtain a copyof either of these documents, please call our customer service representatives atthe toll-free number listed below.


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2. Evaluate your benefit needs. When making your decision, you may want toconsult with a qualified financial planner, family member, or other trusted advisor.You may also call our customer service representatives at the toll-free numberlisted below to discuss the available options or the cost of care in your area.

3. Review the Summary of Your Current Benefits and Available Options, enclosed.

4. Select the option that best meets your needs and follow the instructions on thecorresponding Option Election Form.

5. If you wish to accept Option 1 and keep your current coverage, no further actionis necessary on your part. By selecting Option 1, you are accepting the 2013premium increase of 5 percent with no change to any of your benefits. Yourpolicy will also be subject to the 2014 premium increase of 5 percent, as well asthe 2015 premium increase of approximately 85 percent spread over two years.Prior to the 2014 premium increase, you will be provided anotheropportunity to change your coverage and avoid the 2014 and 2015 premiumincreases.

You have until to let us know which option you would like toselect. The option you select will become effective Month Day, Year. If you wouldlike to change your policy, please sign and date one of the enclosed OptionElection Forms and return the form in the postage paid envelope provided by. In the event we do not receive a signed election form, youwill automatically receive the 2013 premium increase of 5 percent, with no changeto your benefits. Upon receipt of your Option Election Form, your new schedule ofbenefits will be sent to you.

If you pay premiums through payroll deduction, pension deduction, or electronic fundstransfer, your premiums will automatically adjust to reflect the new amount as of MonthDay, Year. If you pay premiums through direct billing, your new premium amount willbe reflected on your invoice for premiums due Month Day, Year.

We know this is an important decision. If you have any questions, please call ourcustomer service representatives at 1-888-877-4934 (Monday through Friday, 8 am to 5pm PST) or email us at [email protected]. You may also write us at P.O. Box 64902,St. Paul MN 55164-0902.

Sincerely,

CalPERS Long-Term Care Program

Enclosure(s)


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Summary of Your Current Benefits and Available Options

TotalCoverageAmount /

BenefitPeriod

CurrentDaily

BenefitAmount

InflationProtection

Premium

FuturePremium

Increase(s)

Your Current BenefitsLifetime $250 Built-in $1,000.00

Available Options

Option 1: Accept the 2013(5%) premium increase with nochange to any of your benefits.

Lifetime $250 Keep $1,050.002014 (5%)

and2015 (85%)

Option 2: Avoid the 2013 (5%)premium increase bydecreasing your current DailyBenefit Amount by 5% andkeeping your current premiumthe same.

Lifetime $238 Keep $1,000.002014 (5%)

and2015 (85%)

Option 3: Avoid the 2013 (5%)premium increase by reducingyour Lifetime Coverage to a 6-

Year Benefit Period andkeeping Built-in InflationProtection.

$547,500*(6-Year)

$250 Keep $750.00 2015 (85%)

Option 4: Avoid the 2013 (5%)premium increase by reducingyour Lifetime Coverage to a 3-

Year Benefit Period andkeeping Built-in InflationProtection.

$273,750*(3-Year)

$250 Keep $500.00 2015 (85%)

Option 5: Avoid the 2013 (5%)premium increase by reducingyour Lifetime Coverage to anew 10-Year Benefit Periodand dropping your Built-inInflation Protection, whileretaining your current DailyBenefit Amount.

$912,500*(10-Year)

$250

Drop**(But retain

currentDaily

BenefitAmount)

$900.00

Nopremium

increase for2014 or2015

Option 6: Avoid the 2013 (5%)premium increase by reducingyour Lifetime Coverage to anew 6-Year Benefit Period anddropping your Built-in InflationProtection, while retaining yourcurrent Daily Benefit Amount.

$547,500*(6-Year)

$250

Drop**(But retain

currentDaily

BenefitAmount)

$800.00

Nopremium


Option 7: Avoid the 2013 (5%)premium increase by reducingyour Lifetime Coverage to anew 3-Year Benefit Period anddropping your Built-in InflationProtection, while retaining yourcurrent Daily Benefit Amount.

$273,750*(3-Year)

$250

Drop**(But retain

currentDaily

BenefitAmount)

$700.00

Nopremium


*See important information about reducing your Comprehensive Lifetime Policy Coverage.**See important information about dropping Built-in Inflation Protection.


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*Reducing Your Comprehensive Lifetime Policy Coverage

Reducing your Lifetime Coverage amount to a 10-Year, 6-Year, or 3-Year Benefit Periodwill provide you with a total coverage amount equal to ten years, six years, or three years x365 days x your current Daily Benefit Amount. For example, a $257 Daily Benefit Amountwill provide coverage up to $938,050 when you reduce to a Ten-Year Benefit Period (365days x $257 x 10 years = $938,050). The 6-Year Benefit Period will provide up to $562,830in total coverage, and the 3-Year Benefit Period will provide up to $281,415.

**Dropping Built-in Inflation Protection and Retaining Current Daily Benefit AmountOptions 5, 6 and 7 incorporate the concept of retained inflationthe ability to keep yourDaily Benefit Amount that you have already accrued and paid for over the years. Previously,when a policyholder dropped their inflation protection outside of the premium increaseperiod, their Daily Benefit Amount reverted to the minimum Daily Benefit Amount for theirplan.

You can avoid the premium increases by dropping Built-In Inflation Protection and still retainyour current Daily and Monthly Benefit Amounts. For example, if you originally purchased a$130 Daily Benefit and over time it has increased to $257, you will be able to maintain the$257 Daily Benefit and reduce your premium by dropping inflation protection.

While you will no longer receive automatic coverage increases each year, we will offer theopportunity to increase your coverage every three years. These periodic increase offers willallow you to keep pace with the rising costs of long-term care. This offer is made under theBenefit Increase Option (BIO). If you accept the offers, you will pay an increased premiumonly for the additional coverage you purchase. The cost of these increases is determined bythe amount of the additional coverage offered, the current premium rates, and your age atthe time of the offer. These offers will stop once you have declined two prior offers. The nextBenefit Increase Offer will take place in December 2013. No offers are made to you whileyou are receiving benefits.


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CalPERS LONG-TERM CARE PROGRAM

OPTION 2 ELECTION FORM

To select Option 2 (decrease your current Daily Benefit Amount and all relatedcoverage amounts by 5 percent and keep your current premium the same), you mustsign and date this form in the box below and return it in the enclosed postage-paidenvelope within 30 days from the date of this letter. If you select Option 2, you will besubject to the 5 percent premium increase in 2014, as well as the 2015 premium

increase of approximately 85 percent spread over two years. You will be providedanother opportunity in 2014 to change your coverage and avoid the 2014 and 2015premium increases.

Benefit Amounts/Premium Current New

Nursing Home Daily Maximum FIELD_17 FIELD_35

Assisted Living Facility Daily Maximum FIELD_18 FIELD_36

Home & Community Care MonthlyMaximum

FIELD_19 FIELD_37

Total Coverage Amount Lifetime Lifetime

Built-in Inflation Protection YES YES

Benefit Increase Option NO NO

FIELD_22 Premium FIELD_23 FIELD_34

Enrollee: FIELD_2 FIELD_3 FIELD_4

Coverage ID Number FIELD_13

My signature below affirms my selection of Option 2, which changes my coverageas shown above.

I understand my decreased benefit amounts will be effective FIELD_16.

_______________________________________ ______________

Your Signature Date

PLEASE RETURN THIS FORM WITHIN 30 DAYS FROM THE DATE OF THIS LETTER.

r_policy_barcode

SUB000000019

RESOL00001

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To select Option 3 (reduce your Lifetime Coverage to a 6-Year Benefit Period and keepBuilt-in Inflation Protection), you must sign and date this form in the box below andreturn it in the enclosed postage-paid envelope within 30 days from the date of thisletter. If you select Option 3, you will be subject to the 2015 premium increase ofapproximately 85 percent spread over two years. You will be provided another

opportunity in 2015 to change your coverage and avoid the 2015 premium increase.





FIELD_19 FIELD_37

Total Coverage Amount FIELD_21 FIELD_38







I understand my plan change will be effective FIELD_16.

_______________________________________ ______________

Your Signature Date


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RESOL00001





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To select Option 4 (reduce your Lifetime Coverage to a 3-Year Benefit Period and keepBuilt-in Inflation Protection), you must sign and date this form in the box below andreturn it in the enclosed postage-paid envelope within 30 days from the date of thisletter. If you select Option 4, you will be subject to the 2015 premium increase ofapproximately 85 percent spread over two years. You will be provided another

opportunity in 2015 to change your coverage and avoid the 2015 premium increase.





FIELD_19 FIELD_32









_______________________________________ ______________

Your Signature Date


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SUB000000019

RESOL00001





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To select Option 5 (reduce your Lifetime Coverage to a new 10-Year Benefit Period anddrop your Built-in Inflation Protection, while retaining your current Daily Benefit Amount),you must sign and date this form in the box below and return it in the enclosed postage-paid envelope within 30 days from the date of this letter. If you select Option 5, you willnot be subject to the 5 percent premium increase in 2013 and 2014, nor the 2015

premium increase of approximately 85 percent.





FIELD_19 FIELD_37


Built-in Inflation Protection YES NO

Benefit Increase Option NO YES






_______________________________________ ______________

Your Signature Date


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SUB000000019

RESOL00001





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FIELD_19 FIELD_37

Total Coverage Amount* FIELD_21 FIELD_38








_______________________________________ ______________

Your Signature Date


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RESOL00001





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FIELD_19 FIELD_37









_______________________________________ ______________

Your Signature Date


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CalPERS long-term care letter to members

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