LTCi Carrier Secures Dismissal of Class Action Case Alleging ERISA Violations Stemming from LTC Insurance Premium Rate Increases

A federal judge has dismissed a putative class action case brought by a plaintiff asserting ERISA violations against The Prudential Company of America (“Prudential”) and Tufts University (“Tufts”), stemming from premium rate increases to an ERISA group long-term care insurance plan sponsored by plaintiff’s employer, Tufts, and issued by Prudential.

On July 12, 2022, United States District Judge Richard Stearns granted Tufts and Prudential’s respective motions to dismiss the action, Parmenter v. Prudential Insurance Company of America, et al., No. 1:22-CV-10079, Dkt. No. 43 (D. Mass. July 12, 2022), which was originally filed on January 20, 2022 in the United States District Court for the District of Massachusetts.

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ThinkAdvisor Catches Up With New York Life’s Jeff Beligotti

ThinkAdvisor recently talked to New York Life’s Jeff Beligotti, Vice President and Head of Long-Term Care Solutions, about his views on the state of long-term care insurance and the long-term care sector generally.

In the interview, Jeff notes that “this is an exciting time to be in the long-term care space,” and offers perspectives on how financial professionals can support long-term care planning as well as how standalone LTCi can complement emerging federal and state-level LTCi programs.

Read the full ThinkAdvisor article.

Senate Finance Committee Advances EARN Act in Effort to Expand Retirement

On Wednesday, June 22, the Senate Finance Committee advanced the Enhancing American Retirement Now (EARN) Act, including an amendment containing retiring Sen. Pat Toomey’s Long-Term Care Affordability Act. The Amendment would allow people to use up to $2,000 per year in 401(k) assets to pay for their LTCi premiums. The Amendment aims to promote a more viable LTCi marketplace by increasing participation, as the use of 401(k) funds would expand the asset pool available to pay premiums. The bill would apply to “eligible retirement plans,” defined as a qualified retirement plan that is a defined contribution plan, a section 403(a) annuity plan, a section 403(b) plan, a governmental section 457(b) plan, or an IRA. The qualifying coverage may be for the individual or the individual’s spouse or dependent. Distributions for the purpose of LTCi premiums would be exempt from the additional 10% tax on the amount of the distribution.

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Possible $2.5 billion CalPERS Settlement Agreement Falls Through

A possible settlement agreement has fallen through in a suit between CalPERS and a group of policyholders over a 2013 proposed 85 percent rate hike. The agreement would have covered approximately 60,000 policyholders.

The suit was filed by California policyholders that elected to pay for inflation protection benefits in their long-term care insurance (LTCi) policies, ranging from policies purchased in the 1990s through 2004. The Plaintiffs alleged that CalPERS proposed rate hike violated their policy agreements. They contended that CalPERS marketing materials promised that the policies’ optional benefit would not increase their premiums, while CalPERS asserted that it had the authority to raise rates to keep plans funded.

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The Amount and Novelty of Wellness Programs in LTC Continues to Proliferate

As aging in place continues to be a focal point in the long-term care (LTC) industry, providers and insurers are exploring and developing cutting-edge wellness programs aimed at helping improve the health of insureds, keeping insureds home longer, and hopefully reducing the number, severity and duration of LTC insurance (LTCi) claims.

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2022 ILTCI Conference

Faegre Drinker is proud to sponsor The Intercompany Long-Term Care Insurance Conference to be held March 20-23 at the Raleigh Convention Center. The conference is the largest multidisciplinary long-term care conference in the U.S. and will include dozens of educational sessions featuring industry thought leaders and LTCI community insiders.

Here is a brief look at the panels that will include members of our Team, with topics ranging from litigation, to aging in place, to rate increase innovations:

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Long Term Care Discussion Group Meeting Highlights Retirement Risk Surveys

In a recent presentation hosted by the Long Term Care Discussion Group, retirement policy consultant Anna Rappaport and Barbara Hogg of Aon’s Retirement Practice discussed two recent surveys focusing on different aspects of retirement planning: the 2021 Retirement Risk Survey (focused on the different perceived retirement planning challenges between retirees and pre-retirees age 45 or older), and the Generations Survey (comparing financial management across generations across a broad range of financial issues, including financial fragility).

A common theme in both surveys was the COVID-19 pandemic’s dramatic effect on circumstances and perceptions about planning for and thriving in retirement. For example, the Retirement Risk Survey showed that 1 in 10 pre-retirees plan to retire later because of the pandemic, and more than 3 in 10 pre-retirees who experienced negative financial impacts from COVID-19 plan to retire either somewhat later or much later than they previously planned. Pre-retirees were also more likely than retirees to consider changing their lifestyle, working longer, and changing care arrangements for family. For those with a higher degree of financial fragility, the survey showed those individuals feel less financially secure as a result of the pandemic, prioritizing short-term goals over retirement planning. Fifty-eight percent of financially fragile individuals responded that the pandemic has created “major financial challenges” for them, compared to only 11% of low fragility individuals.

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Cost of Care Survey Shows Uptick in Homecare Services and LTC Costs

The cost of long-term care services increased across all provider types in 2021, according to a recently published 18th annual Cost of Care Survey* from Genworth. Specifically, the 2021 Cost of Care data shows the highest year-over-year increase in homecare services since Genworth began tracking the cost of care in 2004. Homecare services include homemaker services and home health aides. Individuals that provide homemaker services assist with “hands off” everyday tasks, such as cooking and cleaning. Home health aides assist with “hands on” tasks, such as bathing and dressing.

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