Title: Section 901.2 - Life care contract

901.2 Life care contract. (a) The life care contract shall be written in plain language and printed in no less than twelve point type. In addition, the following statement shall be printed in bold twelve point type on the cover or top of the first page: "This matter involves a substantial financial investment and a legally binding contract. In evaluating the disclosure statement and the contract prior to any commitment, it is recommended that you consult with an attorney and financial advisor of your choice, if you so elect, who can review these documents with you."

(b) The life care contract shall include, but not be limited to, all of the following information:

(1) the amount of all money transferred or to be transferred, including, but not limited to, donations, subscriptions, deposits, fees, and any other amounts paid or payable by, or on behalf of, the resident or residents;

(2) a description of all services which are to be provided to the resident. The contract must clearly identify those services which are provided as part of the entrance fee and those services which are provided as part of the monthly care fee and those which are not included in such fees and in the case of a Long Term Care Security Program for Long Term Care model community, those services which are paid in whole or in part through a long term care insurance policy and medical assistance payments;

(3) a description of the entrance fee, monthly care fee and any other fees provided for in the contract and the conditions under which any of the fees may be adjusted, provided that an operator shall not charge a non-refundable application fee to a prospective resident who has already paid a non-refundable priority reservation agreement application fee;

(4) a description of any late penalties which will be imposed and the grace period, if any, during which no penalties will be imposed, due to late payment of monthly care fees, and the community's policies and procedures regarding non-payment of the monthly care fees;

(5) the community's policies and procedures, including dollar amounts and terms, regarding the subsequent entry of a spouse into the community and the consequences of the spouse's failure to meet the entrance criteria;

(6) the terms and conditions under which the contract may be cancelled by the operator or by the resident;

(7) the entrance fee refund policy which must be consistent with the provisions set forth in section 901.4 of this Part;

(8) the conditions under which an independent living unit will be determined to be vacant either due to the resident's permanent transfer to the community's nursing home, adult care facility or other specialized facility within the community or due to the permanent transfer of the resident to a hospital or other facility outside of the community, provided that nothing therein shall relieve the community of its obligations to provide or to insure provision of lifetime care;

(9) a statement of the community's liability in the event that a resident's chronic condition requires placement in a more specialized chronic care facility that provides services beyond those provided by the community's nursing home. The liability of the community shall be equal to the excess of the community's nursing home private pay per diem over the resident's monthly care fee on a per diem basis. In the event that the community's nursing home is no longer serving the outside community, a reasonable cost based per diem shall be established for the community's nursing home for the purpose of establishing the community's liability;

(10) a statement indicating that in the event that a resident dies prior to occupancy in the community, or due to illness, injury or incapacity is no longer eligible for occupancy in the community under the terms of the contract, the contract is automatically rescinded upon written notice to the sponsor by the prospective resident or his or her legal representative and the resident or his or her legal representative shall receive a full refund of all moneys paid to the community, except for those costs specifically incurred by the community at the request of the resident and set forth in writing in a separate addendum, signed by the parties to the contract. In the event of a multiple party contract, the contract may remain in effect at the option of the remaining prospective residents subject to the terms of of the contract;

(11) a statement of the community's policy regarding advance notice to be provided to the resident of any changes in fees or charges or scope of care or services. Such notice must be made at least sixty days in advance of such change;

(12) a statement that no act, agreement or statement of any resident, or of an individual purchasing care for a resident under any agreement to furnish care to the resident, shall constitute a valid waiver of any provision of Article 46 of the Public Health Law or of any rules and regulations enacted pursuant thereto intended for the benefit or protection of the resident or the individual purchasing care for the resident; (13) a description of the community's reinstatement policy in the event that the contract is cancelled by the community or the resident;

(14) a statement indicating that internal procedures have been established to address and resolve disputes and grievances of the residents and that a copy of such procedures shall be provided to each resident;

(15) a statement of Medicare Parts A and B and supplement coverage requirements which shall specify that:

(i) the resident shall, if eligible, enroll in and continue to maintain Medicare Parts A and B coverage or the equivalent and Medicare supplement coverage as defined by the New York State Insurance Department pursuant to sections 52.11 and 52.22 of Part 52 of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York;

(ii) the community shall maintain a system to monitor residents' coverage and if the resident fails to maintain or is ineligible for Medicare Parts A and B and supplement coverage, and the resident fails to purchase the equivalent of such coverage, the community shall purchase such coverage on behalf of and at the expense of the resident and shall have the authority to require appropriate adjustment to the resident's monthly care fee;

(iii) if the community cannot purchase such coverage, the community shall have the authority to require an adjustment to the resident's monthly care fee, subject to the approval of the Superintendent of Insurance, to fund the additional risk to the community; and

(iv) the community shall be responsible for any expense incurred which would have been covered by Medicare Parts A and B and Medicare supplement or equivalent coverage during a lapse in coverage due to failure or inability of the resident and the community to secure coverage. The community may add the amount of such expenses to the resident's monthly care fee if the community has not funded this additional risk pursuant to subparagraph (iii) of this paragraph;

(16) If the community is operated as a Long Term Care Security Program for Long Term Care model, a statement of the community's policies regarding that program which must include the following:

(i) with regard to any nursing home or home health care services provided pursuant to the life care contract, any elimination or waiting periods and any deductibles, co-payments or other amounts not paid for through a long term care insurance policy or medical assistance payment shall be the responsibility of the community, and the resident shall not be liable for such amounts;

(ii) the operator shall not require that the long term care insurance policy be purchased from a specific insurer or group of insurers and shall not require a minimum benefit level in excess of that required pursuant to Section 367(f) of the Social Services Law and Section 3229 of the Insurance Law; and

(iii) the community shall maintain a system to monitor residents' coverage and if the resident fails to maintain the minimum required coverage, the operator shall purchase, if possible, such coverage on behalf and at the expense of the resident and may require an appropriate adjustment to the resident's monthly fees to reflect the cost of the coverage.

(a) If the operator cannot purchase such coverage, the operator may require an adjustment of the resident's monthly fees to fund the additional risk to the community, subject to the Superintendent's approval.

(b) If the resident fails to maintain the required coverage and the operator has not purchased such coverage, the operator shall be responsible for any expenses which would have otherwise been covered under such a policy. The operator may add the amount of actual expenses incurred to the resident's monthly fees.

(17) a statement that any amendment to the contract and any change in entrance and/or monthly care fees other than those within the guidelines of a previously approved rating system or which do not exceed the change in the consumer price index, or other index as determined by the Superintendent of Insurance, must be approved by the Superintendent;

(18) a statement that property may not be substituted as payment for either the entrance fee or the monthly care fee; and

(19) a statement of the conditions under which a resident will be admitted to or discharged from the various components of the community.