State of California

          MEMORANDUM


          DATE: January 25, 1995

          TO:      PERSONNEL MANAGEMENT LIAISONSREFERENCE CODE:   95-04

                   THIS MEMORANDUM SHOULD BE DISTRIBUTED TO:

                         Labor Relations Officers
                         Personnel Officers
                         Benefits Officers


          FROM:    Department of Personnel Administration Policy Development Office


          SUBJECT: Long-Term Care Insurance


                    Long-Term Care (LTC) insurance is designed to provide cash
                    benefits to assist people who have chronic long-term physical
                    and/or mental conditions requiring physical assistance in
                    performing the activities of daily living.  It is not part of the
                    State's health care program nor is it designed to be income
                    replacement for extended disabilities.

                    In 1990, the Legislature and the Governor approved legislation to
                    authorize the development and establishment of LTC insurance plans
                    for State employees.  The law was amended in 1992 and requires the
                    Public Employees' Retirement System (PERS) to offer LTC plans to
                    active and retired members of PERS, their spouses, and parents. It
                    also required the Department of Personnel Administration (DPA) to
                    offer a LTC program to excluded employees and to represented
                    employees through the bargaining process.  The law also provides
                    that DPA may enter into contracts with PERS to allow active State
                    employees and eligible family members to enroll in any LTC
                    insurance plan offered by PERS.

                    PERS has announced the implementation of its LTC program effective
                    January 1995.  DPA and PERS have signed an interagency agreement
                    to allow all active State employees to participate in any LTC
                    program offered by PERS under the same conditions as other PERS
                    members.  Insurance premiums will be fully paid by the enrollee.

                    PERS has chosen the firm of United HealthCare (UHC) to administer
                    the LTC plans offered by PERS.  UHC responsibilities include
                    marketing the products, enrollment, benefits administration, care
                    advice, and provider selection services.  The Administrator will
                    be conducting marketing programs on a geographic basis over the
                    next 18 months to explain and define the cost and benefits of the
                    plans.  However, active State employees and their eligible family
                    members may obtain and submit enrollment applications immediately,
                    regardless of their work location.

                    PERS will be sending out employer information packets to the
                    headquarters of all State departments within the next few weeks.
                    This package will provide information that will allow your staff
                    to answer some very basic questions your employees may ask.
                    However, most questions should be referred to PERS and UHC.  PERS
                    will provide you additional employer information packets if you
                    wish to distribute to regional or separate facilities in your
                    department.  We urge you to do this.  DPA has authorized the
                    Office of the State Controller to provide payroll deductions for
                    premiums paid by active State employees.  Your staff will not be asked
                    to process enrollment or payroll deduction documents.  We do ask each
                    department to notify its employees of the implementation of the LTC
                    program and how to obtain the enrollment material.

                    *  Employees may call UHC representatives on (800) 338-2244 to obtain
                                 plan descriptions and enrollment materials.

                    *  Department representatives may call PERS staff on (916) 326- 3904,
                                 CALNET 475-3904 to obtain additional employer packets and
                                 other LTC information, such as articles that may be
                                 included in your newsletters.

                    DPA urges all departments to provide PERS and UHC with all possible
                    assistance and cooperation in disseminating plan and enrollment
                    information to your employees.  If you have questions regarding State
                    employer responsibilities, please call Bruce Crain of my staff on (916)
                    324-0530, CALNET 454-0530.




                    Wendell M. Coon
                    Chief