Plan Changes

On June 1, 2024, The NPFBA Board of Trustees implemented new rates and Plan Amendments for applicants applying for long-term care coverage.  These changes were enacted based on the Society of Actuaries’ recommendations to remain financially and actuarially sound.

The changes are as follows:

• 150 Plan coverage
• Increased issue age rates
• No death benefit
• Payment term of 35 years or lifetime
• 90 elimination period
• $750,000 benefit cap

Effective September 1, 2016, the NPFBA Trustees have made changes to the Plan. Official notification of the changes has been mailed to all Plan Members. If you have not received your official notification, please use the link below to download the Notice of Plan Changes. Additional information regarding the Plan changes is provided below.

Download Notice of Plan Changes

Why did the Trustees amend the Plan?

The Plan is routinely reviewed by a professional actuary to maintain the sound status of the Plan and to protect the interests of the Plan Members. The actuary bases its recommendations for Plan adjustments on the funds necessary to provide for all future benefits. The 2015 actuarial projections were calculated through 2095. Based on the actuary’s projections and recommendations, the NPFBA Trustees were required to enact a rate increase and adjust the Compounded Inflation Benefit to ensure the continued financial and actuarial soundness of the Plan.

Definition of Actuary: A person who uses mathematical expertise, statistical knowledge, and economic and financial analyses to help benefit companies determine how much to charge members for coverage based on an analysis of potential claims for benefits. NPFBA’s actuaries are members of the American Academy of Actuaries.

How and why do the NPFBA Trustees make changes to the Plan?

In accordance with the terms established in the Plan Document, the Trustees may make any necessary changes to the Plan. Please refer to Section 17.3 of your Plan Document. The Trustees make changes to the Plan to maintain the actuarial soundness of the Plan. The changes the Trustees make are based on prudent, professional recommendations and comprehensive actuarial reviews.
The Trustees strive to continue providing excellent benefits to the Plan Members with the least impact on the Members while avoiding substantial rate increases.

Is the Plan financially stable and actuarially sound?

The NPFBA Plan currently has over $76 million in assets. Based on prior actuarial analysis, applicable actuarial standards, reasonable assumptions, and the data used, as of 6/30/2015, the funds held by the NPFBA LTC Plan are expected to satisfy adequately its contractual obligations.

How does this affect my payment amount?

Your payment will increase on July 1, 2017, by 12%, which will be reflected on your first billing cycle that includes July 2017. Please remember that depending on your billing cycle you may experience multiple billing cycles where different amounts are due.

Why is the Compounded Inflation Benefit being changed to 3% Compounded and earned Plan Years 2 to 26?

The Compounded Inflation Benefit has been changed to make the Plan actuarially sound without substantial rate increases. The extension of the Compounded Inflation to Plan Year 26 allows the Plan to provide Members with higher benefit amounts than the 5% Compounded for 15 years allowed. Your benefits will be increased by 6% at the cap – a substantial enhancement to your Plan.

How will the change in Compounded Inflation affect the benefits I have already earned?

You will keep all benefits earned at 5% Compounded before September 1, 2016. From September 1, 2016, on you will earn benefits at 3% Compounded until you reach $315 per day for nursing home care for the 150/70/50 Plan or $272 per day for nursing home care for the 130/70/50 and 130/50/50 Plans.

Can I upgrade my coverage?

No. The option to upgrade coverage is not available. In order to change coverage, you would need to cancel your existing Plan and reapply for a different Plan. This would mean that you would lose all previously earned compounded inflation increases and start at Plan Year 1 under your new Plan. Additionally, your application would be underwritten based on your current answers to the medical questions on the application, which could lead to the denial of coverage if your health has changed in the intervening years.

Can I cancel my Plan?

Yes, you may cancel your Plan by submitting a written request to the Plan Administrators. See the NPFBA Plan Document Section 9 for specifics. You are encouraged to analyze the availability, benefits, and rates of the other long-term care providers in California prior to canceling your Plan.

Question & Answer

Effective May 17, 2012, the NPFBA Trustees have made changes to the Plan. Official notification of the changes has been mail to all Plan Participants. If you have not received your official notification, please use the link below to download the Notice of Plan Changes. Additional information regarding the Plan changes is provided below.

Download Notice of Plan Changes

Why did the Trustees amend the Plan?

The Plan is routinely reviewed by a professional actuary to maintain the sound status of the Plan and to protect the interests of the Plan Participants. The actuary bases his recommendations for Plan adjustments on the funds necessary to provide for all future benefits. The 2011 actuarial projections were calculated through 2085. Based on the actuary’s projections and recommendations, the NPFBA Trustees were required to increase the payment term and limit the Compounded Inflation Benefit to ensure the continued financial soundness of the Plan.

How and why do the NPFBA Trustees make changes to the Plan?

In accordance with the terms established in the Plan Document, the Trustees may make any necessary changes to the Plan. Please refer to Section 17.3 of your Plan Document. The Trustees make changes to the Plan to maintain the actuarial soundness of the Plan. The changes the Trustees make are based on prudent, professional recommendations and from comprehensive actuarial reviews. The Trustees strive to continue providing excellent benefits to the Plan Participants with the least impact on the Participants while avoiding substantial rate increases.

Is the Plan financially stable and actuarially sound?

Yes, the NPFBA Plan currently has over $46 million in assets.

How does this affect my payment term?

Your payment term increases by 5 years. For example, if you are currently on a 20-year payment term it will extend to 25 years. In other words, if you had 7 years of payments left you will now have 12 years of payments. All new applications will join at a minimum of a 25-year payment term.

Why is the Compounded Inflation Benefit being limited to 15 years?

The Compounded Inflation Benefit has been currently limited to 15 years to make the Plan actuarially sound without further increases to the Participant Plan costs. Future positive results in investments and continued positive claims experience may result in extending the limit on the Compounded Inflation Benefit.

In the future, will the Trustees consider shortening the payment term extension or increasing the limit on the Compounded Inflation Benefit?

Yes. The NPFBA Trustees and Plan Actuary regularly analyze the Plan actuarial data to determine the soundness of the Plan and will make future adjustments as needed.

Can I upgrade my coverage?

No. The option to upgrade coverage is not currently available.

Can I pay off my policy early?

No. In May 2011, the Trustees eliminated the option to pay off your policy early as a lump sum. Existing Participants were notified via mail and email in June 2011 and given until August 15, 2011, to elect to pay off their policy.

Can I cancel my Plan?

Yes, you may cancel your Plan by submitting a written request to the Plan Administrators. You are encouraged to analyze the availability, benefits, and rates of the other long-term care providers available in California prior to canceling your Plan.

Can I get a copy of the NPFBA financial information?

Yes, you have the right to receive a copy of the full annual report, or any part thereof, upon request. You also have the right to obtain a copy of the Plan and Summary Plan Description. To obtain a copy of the full annual report, or any part thereof, or the Plan or Summary Plan Description, please write or call the office of California Administration Insurance Services, Inc. (“CASI”), who is the Plan Administrator. The mailing address for CASI is P.O. Box 31, Martell, CA 95654, and the phone number for CASI is 1-800-832-7333. You also have the right to examine the annual report at the offices of the NPFBA Plan Counsel, 400 Capitol Mall, Eleventh Floor, Sacramento, CA 95814, and at the U.S. Department of Labor in Washington, D.C., or to obtain a copy from the U.S. Department of Labor upon payment of copying costs. In the event of any inconsistency between this document and the Plan document, the terms of the Plan document will control.