AB 3088 (Chu) was recently amended to include provisions relating to continuing care retirement community actuarial study requirements. The bill also now includes provisions dealing with maintenance and repair planning. The CALCRA-sponsored bill would require that each provider submit to DSS once every three years (as opposed to the current five years), an actuary's opinion on the provider's financial condition. It would require all CCRCs, not just "Type A" (Life Care) as currently required by law. The opinion would be required 45 days following the due date for the provider’s annual report for the fiscal year. The proposal requires that the actuary's opinion be posted "in a central and conspicuous location at the facility and in a conspicuous location on the provider's Internet Web site."
The bill also includes provisions on a maintenance and replacement study. The bill would propose that once every three years, each CCRC conduct "a reasonable, competent and diligent maintenance and replacement study" and requires review by the Board of Directors for potential "necessary adjustments to its reserve account requirements." The components of the study must include: Identification of the major components that the provider is obligated to repair, replace, restore, or maintain that, as of the date of the study, have a remaining useful life of less than 20 years; identification of the probable remaining useful life of the components identified above as of the date of the study; an estimate of the cost of repair, replacement, restoration, or maintenance of the components identified above; an estimate of the total annual contribution necessary to defray the cost to repair, replace, restore, or maintain the components identified above during, and at the end of, the components' useful life. And a funding plan that indicates how the provider plans to fund its obligation to repair and replace the major components that have an expected remaining useful life of 20 years or less, with the exception of those components that the board has determined it will not replace or repair.
LeadingAge California is currently evaluating the impact of the proposal on its members and has not taken an official position on the bill. If you have any thoughts about the bill contact Eric Dowdy, Executive Vice President or Jedd Hampton, Director of Policy - Health Services.