Class Action Frequently Asked Questions
On August 6, 2013, a class action lawsuit was filed by the law firms listed below in an effort to obtain relief for approximately 150,000 individuals who purchased certain Long Term Care Insurance policies through CalPERS. This website is designed to answer many of the questions that have been raised by members of the class.
What is this case about?
This is a class action lawsuit that seeks relief for individuals who purchased certain Long Term Care (“LTC”) insurance policies through CalPERS and have been subjected to recent premium hikes of approximately 85%. The complaint alleges that CalPERS promised its policy holders that the premiums for its LTC policies were fixed for life and would never rise. The complaint further alleges that at the time CalPERS made these promises, it had underpriced its policies and knew, or should have known, that premiums were certain to rise in the future. The complaint asserts causes of action for Breach of Contract, Breach of the Implied Covenant of Good Faith and Fair Dealing, Rescission, and Declaratory and Injunctive Relief. A copy of the complaint can be viewed by clicking here.
Do I need to do anything to be part of this lawsuit?
No. In a class action, one or more individuals files a lawsuit on behalf of many other individuals (the “Class”). If the court certifies the class, then the lawsuit proceeds on behalf of everyone who is included in the class. Once the court certifies the class, all class members will receive notice and will automatically be included in the case unless they affirmatively decide to “opt out” of the lawsuit.
In this case, the class we will be seeking to certify is defined as follows:
“All individuals who purchased LTC1 and LTC2 policies issued from 1995-2004 with lifetime coverage and built-in inflation protection, lifetime policies without inflation protection, as well as 3-year and 6-year policies with inflation protection from CalPERS at any time.”
If you purchased a policy with three years or six years of benefits without built-in inflation protection, or a California partnership policy or a CalPERS long term care policy in 2005 or later, CalPERS has represented that you are not subject to the premium increases that are at issue in the lawsuit.
A decision on class certification should be made within the next 6 months to a year.
What are you trying to get from this lawsuit?
In our lawsuit, we seek various forms of relief including damages, a return of all premiums paid by Class Members, and an order from the court to prevent CalPERS from increasing premiums. If we prevail, we may be entitled to some or all of these forms of relief.
How long is this lawsuit likely to take?
Unfortunately, litigation such as this often takes years to resolve. Although there are no guarantees, a typical class action lawsuit usually takes from 2 ½ to 3 years to resolve.
What should I do about my policy choices now?
As you know, CalPERS has provided class members with various options concerning the continuation of their LTC policies. Your decisions going forward (whether to drop the policy, take reduced benefits, or pay higher premiums) are entirely up to you and are dependent on your individual circumstances. What we can tell you is that our lawsuit seeks a remedy for all class members no matter what decision they make concerning their policies going forward.
How can I get more information about this case as it progresses?
As this case move forward we will regularly update this website with important developments and news in the litigation.