The State Worker

April 30, 2014

Members file rebuttal to CalPERS' argument that long-term care lawsuit should be thrown out

A small band of CalPERS long-term care policyholders have again blasted the system and its leadership in court documents that allege dishonestly and mismanagement of the private insurance program have led to soaring rate hikes planned for next year.

The State Worker

Jon Ortiz chronicles civil-service life for California state workers

A small band of CalPERS long-term care policyholders have again blasted the system and its leadership in court documents that allege dishonestly and mismanagement of the private insurance program have led to soaring rate hikes planned for next year.

Aside from reinforcing charges made in an earlier court filing that CalPERS has since rebutted, the new documents filed last week in Los Angeles County Superior Court toss in some new arguments for the court to intervene.

Among them: The “evidence of coverage” document given to policyholders is a contract that allows for rate changes, not rate increases. And when CalPERS says that it is raising rates to compensate for higher-than-expected costs for plans that increase maximum coverage by a compounded 5 percent annually, the fund is violating a provision of the contract that says “Your premium will not increase as a result of these annual benefit increases.”

In a separate court filing, the plaintiffs allege that Towers Watson, the outside underwriter for the long-term care policies, negligently advised CalPERS to misprice premiums.

The lawsuit was triggered by CalPERS’ decision last year to increase the rates of its lifetime and inflation-adjusted long-term care policies by 85 percent in 2015 and 2016. The plaintiffs want the court to grant class-action status to their complaint and prevent CalPERS from raising rates.

Points and Authorities in Opposition to CalPERS Demurrer

Memorandum of Points and Authorities in Opposition to the Towers Watson Demurrer

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