CalPERS LTC Policy $2.7B Class Action Settlement

UPDATE:

• The current settlement has been terminated due to a high percentage of opt-outs. Parties are working on an amended settlement or will go to trial May 2023.

Certain California residents who purchased a long-term care policy (LTC policy) from CalPERS between 1995 and 2004 may be eligible to benefit from a nearly $2.7 billion CalPERS class action lawsuit settlement.

The Class is made up of citizens living in California in 2013 who purchased an LTC policy from CalPERS — the California Public Employees’ Retirement System — between 1995 and 2004 that included automatic inflation protection benefits, and who were subjected to the 85 percent increase in premiums announced by CalPERS in 2013.

Those who held an LTC policy and converted it to an LTC3 policy before the increase was implemented are not included in the Class, even if that conversion happened after the CalPERS board approved the premium increase in October 2012.

The Class also does not include individuals who opted out of the Class certified by the Court on Jan. 28, 2016.

CalPERS has nearly 1.5 million members and is California’s largest public employer purchaser of health benefits, according to its website.

CalPERS Class Action Lawsuit Settlement Fund and CAF Fund

If no one requests to be excluded from the Class, CalPERS will pay $2.4 billion into a qualified settlement fund.

In addition, CalPERS will pay $282.5 million into a “CAF Fund.” This CAF Fund will cover contingency costs,  administration expenses, attorneys’ fees, and other costs.

One of the contingency costs the CAF Fund can be used to cover is if a greater-than-expected number of Class Members opt out of the settlement. If that happens, CalPERS may recover up to $150 million from the CAF Fund to cover any potential actuarial costs.

If money remains in the CAF Fund after the administration process is complete, it will be returned to Class Members proportionately, based on their settlement award.

Along with their notice, Class Members may have received a form identifying their Initial Settlement Category and the amount they are entitled to as long as their Initial Settlement Category doesn’t change before the final settlement date.

• Category A: Class Members in Category A will see an amount that reflects all premiums paid for their CalPERS LTC policy through Dec. 31, 2020. Those who remain in Category A as of the final settlement date also will receive all additional premiums paid after Dec. 31, 2020. Each Category A Class Member will receive a minimum payment of $10,000 and shall surrender their LTC policy upon payment. Alternatively, Category A Class Members are entitled to apply their premium return to any available replacement LTC policy. Category A Class Members must continue to make their premium payments to CalPERS until the settlement goes into effect in order to obtain a full return of all premiums paid or to obtain the new LTC policy, including either paying the upcoming premium increase CalPERS recently announced or reducing their benefits following the process CalPERS described in its premium increase notice.
• Category B: Class Members who paid any part of the challenged increase and are on claim both on the notice date and final settlement date shall receive a refund equivalent to all additional premiums paid before they went on claim, and will not be required to surrender their policy.
• Category C: Class Members who, on both the notice date and final settlement date, are on claim but reduced their benefits as a result of the challenged increase before going on claim, shall receive one additional year of benefits based on their Schedule of Benefits as of the final settlement date, and will not be required to surrender their policy.
• Category D: Class Members who let their CalPERS LTC policy lapse between Feb. 1, 2013, and Dec. 31, 2014, and submit a form stating, under penalty of perjury, that they allowed the policy lapse as a result of the challenged increase are eligible for a refund equivalent to one-half of the premiums they paid from the inception of their LTC policy through the date the policy lapsed, less any amounts paid in benefits under the policy.
• Category E: Those who let their LTC policy lapse between Jan. 1, 2015, and the final settlement date and submit a form stating, under penalty of perjury, that they allowed the policy lapse as a result of the challenged increase shall receive the greater of all additional premiums paid or $2,500.
• Category F: The estates of Class Members who died after Feb. 1, 2013, and before the final settlement date, were current policyholders or were on claim when they died, and who reduced their benefits as a result of the challenged increase will receive the greater of all additional premiums paid or $2,500.
• Category G: The estates of Class Members who died after Feb. 1, 2013, and before the final settlement date, were current policyholders or were on claim when they died, paid the challenged increase, and never reduced their benefits in response to that increase will be eligible to receive all additional premiums paid.
• Category H: Those who paid the challenged increase, who went on claim at any point before the final settlement date, and who exhausted their benefits before the final settlement date will receive all additional premiums paid.
• Category I: Class Members who are current policyholders and were not on claim as of the notice date but are on claim as of the final settlement date must submit an election choosing to either surrender their CalPERS LTC policy or keep their policy in place. If the Class Member elects to keep their policy in place or makes no election, they shall receive no relief under the terms of the settlement. They shall maintain their contractual rights and benefits under the policy, except the claims released under the settlement. If they elect to surrender their policy, the defendant shall pay into the settlement fund, and the Class Member shall receive, at least an amount equal to a refund of all premiums paid (minus any benefits received), with a $10,000 mandatory minimum.

More information on the requirements for each category can be found on the settlement notice.

Anyone who did not receive a notice but believes they should be part of the Class should contact the CalPERS class action lawsuit settlement administrator at 1-866-217-8056.

The attorneys in this case are planning to hold webinars for Class Members who have questions. These will be held Aug. 20 and 25, and Sept. 3 and 10, 2021. To attend, register here. 

A final hearing in the CalPERS long-term care policy settlement will take place June 8, 2022.

The deadline to object to or opt out of the CalPERS class action lawsuit settlement is Dec. 13, 2021.

The deadline to complete an Award Acknowledgement and Election Form for a Potential Replacement LTC Policy (Category A) is Sept. 22, 2021.

The deadline to complete a Lapse Claim Form (categories D and E) is Dec. 13, 2021.

Who’s Eligible

The Class is made up of citizens living in California in 2013 who purchased an LTC policy from CalPERS between 1995 and 2004 that included automatic inflation protection benefits, and who were subjected to the 85 percent increase in premiums announced by CalPERS in 2013.

Potential Award

Varies.

Awards will vary depending on which category the Class Member falls into. See categories above for more information. Further details about each category can be found on the settlement notice.

Proof of Purchase

No proof of purchase is necessary. However, if you disagree with any part of your form, you are required submit documentation proving your claims. Documents must clear, readable copies and be less than 20 MB per file and in one of the following formats: jpg, jpeg, png, gif, tif, tiff, doc, docx, xls, xlsx, pdf, txt, rtf, or zip.

Claim Form

To file for benefits online, you must log in with the Unique ID and PIN found on the email notice you received. After you login, you will be taken to the correct form to fill out based on your credentials.

NOTE: If you do not qualify for this settlement do NOT file a claim.

Remember: you are submitting your claim under penalty of perjury. You are also harming other eligible Class Members by submitting a fraudulent claim. If you’re unsure if you qualify, please read the FAQ section of the Settlement Administrator’s website to ensure you meet all standards (Top Class Actions is not a Settlement Administrator). If you don’t qualify for this settlement, check out our database of other open class action settlements you may be eligible for.

Claim Form Deadline

12/13/2021

Case Name

Wedding, et al. v. California Public Employees Retirement System, et al., Case No. BC517444, in the Superior Court for the State of California for the County of Los Angeles

Final Hearing

06/08/2022

Settlement Website

CalPERSITCClassaction.com

Claims Administrator

Wedding v. CalPERS
P.O. Box 6790
Portland, OR 97228-6790
info@CalpersLTCClassAction.com
866-217-8056

Class Counsel

Michael J. Bidart
SHERNOFF BIDART ECHEVERRIA LLP

Gregory L. Bentley
BENTLEY & MORE LLP

Gretchen M. Nelson, Esq.
NELSON & FRAENKEL LLP

Stuart C. Talley
KERSHAW, COOK & TALLEY PC

Defense Counsel

Ragesh K. Tangri
DURIE TANGRI LLP

Matthew G. Jacobs
CalPERS