IMPORTANT REMINDER: If you are eligible to receive a refund of all or part of your CalPERS LTC Program proposed settlement, and you plan to accept or are considering accepting the refund DO NOT STOP PAYING YOUR PREMIUMS.
The following letter was sent by financial planner Lawrence Grossman to the CalPERS Board:
The long-term care policyrate increase letter that CalPERS has sent out fails to mention the class action lawsuit settlement.
The settlement benefits that policyholders may receive may be affected by the choices that policyholders make in response to the rate increase letter.
Meanwhile, the details of the settlement have not been clearly communicated to these policyholders. Many policyholders have received the rate increase letter but not the settlement details.
For example, a policyholder deciding not to continue because of the rate increase would be excluded from any settlement benefits. If, however, the policyholder understood the settlement details and wanted to terminate, they would understand that they should continue their policy until the suit was finally settled; in that case, they would get a refund of all premiums paid, including the premiums to be paid between now and the settlement.
The failure to disclose such material information is a grave error that will certainly cause great damage to potentially tens of thousands of policyholders who have already been gravely damaged by CalPERS.
I believe that CalPERS needs to remedy this situation immediately, as the rate increase letters need to be responded to by August 26. Otherwise, certainly there will be yet another lawsuit.
I would appreciate your reply.
The bottom line: If you plan to, or are considering, acceptance of a refund under the proposed settlement, continue to pay your premiums until the settlement is approved!