A public announcement of a second settlement agreement was announced in the class action lawsuit against CalPERS long-term care insurance program. Letters from the court have gone out to approximately 79,500 current class members. If you didn’t formally opt out of the lawsuit, you are still a class member. If you weren’t a class member from the beginning of the lawsuit, you aren’t a class member now and will not have received a notice from the court. You cannot join the lawsuit or benefit from this second settlement if you are not a current class member. If you are uncertain about whether you are a class member or not, please contact the administrator for class members. Their contact information is at the end of this notice.
You must file a claim form or a lapse form as a result of this notice no later than June 6, 2023. You can find those forms on the Settlement website. If you do nothing, you will receive the award based on your category on the date the court approves this second settlement agreement. If you want to keep your policy, you must continue to pay your premium until the date this second settlement is approved by the court, unless you are on claim and your premium is being waived.
The basic outline of this second settlement gives class members certain options similar to those that were in the first settlement offer.
Those class members in Category A must continue to pay premiums until the court finalizes this second settlement. Those policyholders who continue to pay their premium and are not on claim on the date the settlement is approved by the court can surrender their policy in return for 80% of the total premiums paid up to that date. Or, they can keep their policy and receive $1,000 cash payment on the date this second settlement is approved by the court. Their premium will be frozen until November 1, 2024. There is no need to opt out of this second settlement in order to keep your current policy. Class members in this category who do nothing will automatically receive the cash payment and premium guaranty.
Those class members who are on claim (Categories B and C) and request a premium refund can retain their policy and receive a cash payment of $1,000. They can, if they choose, give up their policy and receive 80% of premiums paid minus any benefits received, although it is difficult to think anyone on claim would choose to do this. There is no need to opt out of the settlement in order to keep your current policy and continue with your claim.
Those class members who lapsed their policy (Categories D and E) and who file an attestation that they lapsed their policy because of the premium increase, can receive up to 40% of all premiums paid, minus any benefits paid; or 80% of additional premiums paid since the date of the lawsuit but no less than $2,000, depending on the date of the lapse.
The estates of those class members who died since February 2013 (Categories F and G) who had reduced their benefits as a result of the premium increase can receive either 80% of all additional premiums paid; or 80% of any additional premiums paid but no less than $2,000, whichever amount is larger.
Class members who die or go on claim before the final settlement date may fall into a different category. Actuaries predict that approximately 2,100 class members die annually and could be moved to a different settlement category based on whether a policyholder was on claim before the final settlement date, or on the date of their death.
CalPERS has the right to withdraw from this settlement if more than 1% of the class members opt out of the lawsuit giving up any options they might have, something that will not be known until all of the class members have made their choices and final figures have been presented to the court. Since policyholders can keep their policy and still receive a cash award from the settlement, it makes it less likely that class members will withdraw from the lawsuit and the settlement.
If the lawsuit were to go to trial, the actuarial facts of the case would be difficult for jurors to understand. In the event that a jury decided in favor of the class, CalPERS would have multiple rights to appeal an unfavorable decision. The cost of a jury trial and the cost of any appeals would inflate the costs to the plaintiffs’ law firms and be well beyond their current estimated cost of approximately $5 million. In addition, more legal actions would add years to the final determination of the lawsuit.
The court will have a final fairness hearing to approve the Settlement on July 26, 2023. Details can be found on the Settlement website.
California Health Advocates will publish updates as we become aware of new information about this lawsuit and settlement actions. See our previous updates listed below for more information.
Policyholders needing help with understanding the documents they receive can get help from the Settlement Administrator or from their local Health Insurance Counseling and Advocacy Program (HICAP). See the Settlement website and the Settlement Administrator contact info below.
Lawsuit homepage: https://www.calpersltcclassaction.com/
Settlement Administrator Contact Information
If you have any questions regarding this Settlement, you may contact the Settlement Administrator. Please ensure that you include your name and your return address on all correspondence.
Call Center Hours: 6 a.m. – 6 p.m. PT
Monday – Friday except Holidays
Wedding v. CalPERS
P.O. Box 6790
Portland, OR 97228-6790
Previous CalPERS Updates
- CalPERS Update #11: CalPERS to Offer 2nd Settlement in Class Action Lawsuit
- CalPERS Update #10: Next Steps & Who Oversees CalPERS Anyway?
- CalPERS Update #9: Did You Receive a Letter About Past Due Premiums?
- CalPERS Update #8 – Background & Next Steps
- CalPERS Update #7: Investigation into CalPERS Long-Term Care Insurance Program
- CalPERS Update #6: CalPERS Opts Out of Settlement
- CalPERS Update #5: Settlement Decision Deadline is January 28, 2022
- CalPERS Update #4: Replacement Coverage Deadline Extended
- CalPERS Update #3 (Oct 2021)
- CalPERS Update #2 on Settlement & Premium Increase
- CalPERS Update: Premium Increases & Class Action Settlement Are Not Related