State of California

M E M O R A N D U M


To:       PERSONNEL MANAGEMENT LIAISONS                    Date:  May 5, 1993
                                                           Reference Code:  93-31

          THIS MEMORANDUM SHOULD BE DISTRIBUTED TO:

               Personnel Officers
               Labor Relations Officers


From:     Department of Personnel Administration
          Office of the Director


Subject:  Status of Long-term Care Insurance Program


          Over the last few months, the Department of Personnel Administration (DPA)
          has received a number of inquiries concerning the State's pending
          Long-term Care (LTC) Insurance program.

          Government Code Section 19867, Statutes of 1991, authorized the State to
          develop and implement a LTC program for both active represented and
          nonrepresented employees.  This legislation also mandated the Board of
          Administration of the Public Employees' Retirement System (PERS) to
          develop and implement a LTC program for non-State members of PERS and for
          retired employees and annuitants.  Implementation of the State plan was
          originally targeted for January of 1993.  Amendments to this statute
          enacted in 1992 delayed implementation until a more complete study of
          program availability and cost could be completed by LTC consultants
          retained by PERS.  It also allows DPA to include State employees in the
          PERS plan if it is a more cost-effective plan than is available in the
          market place.

          DPA is now obligated to implement a LTC program no later than one year
          following implementation of a program by PERS.  In order to assure that
          active State employees have a comprehensive LTC insurance program, at the
          lowest possible premiums, it is necessary to determine if the LTC program
          implemented by PERS includes plan benefits and premium levels that are
          equal to or more competitive than plans offered by independent insurance
          carriers.  If this occurs, the State will opt in to the PERS program as
          soon as possible following its implementation.

          Currently the PERS LTC consultants are gathering the data necessary to
          develop and issue a Request For Proposal (RFP) early this next fiscal
          year.  PERS representatives expect a decision on the plan will be made in
          December of 1993 and a plan implemented sometime in the summer or fall of
          1994.  In the meantime please call Bruce Crain of our Policy Office if you
          have questions or comments.  He may be reached on (916) 324-0530 or CALNET
          454-0530.




          Lillian Rowett
          Chief Deputy Director