CalPERS and attorneys representing plaintiffs today announced that a judge has granted preliminary approval to a new, second settlement of the class action lawsuit involving the CalPERS Long-Term Care (LTC) Program, known as Wedding, et al. v. CalPERS.
This second settlement offers the nearly 80,000 policyholder class members the opportunity to keep in place their existing long-term care policy and receive a cash payment and a moratorium on premium increases through the end of October 2024, or to receive a premium refund of 80% of all premiums paid (less benefits received) in exchange for surrendering their LTC policy.
Each settlement class member’s recovery will be based on the status of their policy, whether they used policy benefits, and how they responded to the 85% premium increase. Money to fund the settlement will come from the CalPERS’ Long-Term Care Fund.
Ensuring the future viability of the Long-Term Care insurance program was an important goal of both CalPERS and the plaintiff class. No part of the settlement will be paid by the CalPERS Pension Fund.
“We are pleased the settlement allows class members who want to leave the LTC program to obtain substantial refunds that would otherwise be unavailable,” said Stuart C. Talley, of Kershaw Talley Barlow PC, one of the attorneys representing the class. “And for those class members who want to keep their LTC policies, the settlement provides cash payments and a moratorium on premium increases while ensuring that the program remains viable going forward.”
“The new settlement reflects the parties’ work to provide policyholders who are counting on their policies to provide critical care with a choice to keep their policies,” said Matthew Jacobs, General Counsel for CalPERS. "We believe this new settlement resolves what are very complex issues in a fair and equitable manner.”
The settlement was reviewed and granted preliminary approval on Friday, March 10, by Judge William Highberger in Los Angeles County Superior Court.
The settlement was reached after a bench trial in which some of the major issues in the case were decided, and with the remaining issues set to be decided in a jury trial that was scheduled for June.
It’s expected that a formal notice explaining the settlement, why it’s in the best interests of the class, and class members’ options, will go out to class members beginning April 7. That will begin a 60-day notice period, with a hearing for final approval set for July 26.
The notice packets will explain in detail all the terms of the new settlement and class members’ options under the settlement. Additionally, there will be a website with a list of Frequently Asked Questions to help answer any questions they may have about the new settlement. However, if class members have questions regarding the settlement that can’t wait until after they receive their notice packets, they can call 1 (866) 217-8056.