HB4664 100TH GENERAL ASSEMBLY

LRB100 20398 MJP 35719 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4664

Introduced , by Rep. Kathleen Willis

SYNOPSIS AS INTRODUCED:

See Index

Amends the Life Care Facilities Act. Adds provisions concerning required disclosures and life care contract requirements for providers under the Act. Provides that at the time of or before the execution of a life care contract, or at the time of or before to the transfer of any money or other property to a provider by or on behalf of a prospective resident, whichever shall first occur, a provider shall deliver a disclosure statement to the person with whom the life care contract is to be entered into that contains specified information. Provides that residents may receive, upon request, specified information from providers and may submit comments. Provides that providers shall, to the maximum extent practicable, offer specified explanations, inform residents of certain matters, and make use of specified standards and practices. Provides that a violation of these provisions by a provider of a facility is an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act. Provides that the Department of Financial and Professional Regulation shall take specified enforcement actions if he or she receives notice from an escrow agent that specified provisions of the Act have not been complied with. Provides that the Secretary of Professional and Financial Regulation may conduct audits of providers. Provides that a provider shall provide all residents of a facility and the Department of Public Health with a printed report that contains certain information. Provides that the Department of Public Health shall provide the public with online access to the annual reports, inspection reports, and other specified information. Provides that an increase in a regular periodic charge not outlined in a life care contract must be approved by the Secretary of Financial and Professional Regulation. Makes other changes.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. This Act may be referred to as the Senior Independent Living Bill of Rights Act.

Section 5. Purpose. This Act is intended to establish new and strengthen existing rights for Illinois seniors residing in independent living arrangements, often found as one service component of continuing care retirement communities. Given that the Department on Aging estimates a 57% increase in State residents ages 60 and over from the years 2000 to 2030, the General Assembly recognizes the need to proactively pass a Senior Independent Living Bill of Rights to ensure adequate protections for Illinois seniors. The General Assembly finds the adoption of a Senior Independent Living Bill of Rights necessary to increase standards to safeguard seniors from potentially harmful, ambiguous, or unfair agreements associated with independent living and continuing care retirement communities. The proposed reforms will further demonstrate the State of Illinois' commitment to protecting seniors in their homes, communities, and applicable long-term care establishments and facilities.

Section 10. The Life Care Facilities Act is amended by changing Sections 5, 6, 9, and 10 and by adding Sections 4.1, 10.2, 10.3, and 10.4 as follows:

(210 ILCS 40/4.1 new)

Sec. 4.1. Required disclosures; life care contract requirements. An existing or future provider must meet the following requirements to obtain or retain a permit under this Act:

(1) At the time of or before the execution of a life care contract, or at the time of or before the transfer of any money or other property to a provider by or on behalf of a prospective resident, whichever shall first occur, the provider shall deliver a disclosure statement to the person with whom the life care contract is to be entered into, the text of which shall contain, to the extent not clearly and completely set forth in the life care contract attached as an exhibit thereto, at least the following information:

(A) The name and business address of the provider and a statement of whether the provider is a partnership, corporation, or other type of legal entity.

(B) The names of the officers, directors, trustees, or managing or general partners of the provider and a description of each named person's occupation with the provider.

(C) A description of the business experience of the provider in the operation or management of similar facilities and of the manager of the facility if the facility will be managed on a day-to-day basis by an organization other than the provider. The description shall include information on any matter in which the manager or provider (i) has been convicted of a felony or pleaded nolo contendere to a felony charge, or been held liable or enjoined in a civil action by final judgment, if the felony or civil action involved fraud, embezzlement, fraudulent conversion, or misappropriation of property; or (ii) is subject to a currently effective injunctive or restrictive court order or, within the last 5 years, had any State or federal license or permit suspended or revoked as a result of an action brought by a governmental agency or department, if the order or action arose out of or related to business activity of health care, including actions affecting a license to operate a long-term care facility, retirement home, home for the aged, or assisted living establishment subject to this Act or a similar law in Illinois or another state.

(D) A statement as to whether or not the provider is, or is affiliated with, a religious, charitable or other nonprofit organization; the extent of the affiliation, if any; the extent to which the affiliate organization will be responsible for the financial and contract obligations of the provider; and the provision of the federal Internal Revenue Code, if any, under which the provider or affiliate is exempt from the payment of income tax.

(E) The location and description of the physical property or properties of the facility, existing or proposed and, to the extent proposed, the estimated completion date or dates, whether or not construction has begun and the contingencies subject to which construction may be deferred.

(F) Certified financial statements of the provider, including a balance sheet as of the end of the most recent fiscal year and income statements for the 3 most recent fiscal years of the provider or such shorter period of time as the provider shall have been in existence. If the provider's fiscal year ended more than 90 days prior to the date the application is filed, interim financial statements as of a date not more than 90 days before the filing shall be included, but need not be certified.

(G) If the operation of the facility has not yet commenced, a statement of the anticipated source and application of the funds used or to be used in the purchase or construction of the facility, including: (i) an estimate of the cost of purchasing or constructing and equipping the facility, including related costs such as financing expense, legal expense, land costs, occupancy development costs, and all other similar costs that the provider expects to incur or become obligated for before the commencement of operations; (ii) a description of any mortgage loan or other long-term financing intended to be used for the financing of the facility, including the anticipated terms and costs of the financing; (iii) an estimate of the total entrance fees to be received from residents at or before commencement of operation of the facility; (iv) an estimate of the funds, if any, that are anticipated to be necessary to fund start-up losses and provide reserve funds to assure full performance of the obligations of the provider under a life care contract; (v) a projection of estimated income from fees and charges other than entrance fees, showing individual rates presently anticipated to be charged and including a description of the assumptions used for calculating the estimated occupancy rate of the facility and the effect on the income of the facility of government subsidies for health care services, if any, to be provided pursuant to a life care contract; and (vi) such other material information concerning the facility or the provider as the provider wishes to include.

(H) An actuarial report that is no more than 2 years old and the summary of a report of an actuary that estimates the capacity of the provider to meet its contractual obligations to the residents.

(I) Forecasted financial statements for the provider of the next 5 years, including a balance sheet, a statement of operations, a statement of cash flows, and a statement detailing all significant assumptions, compiled by an independent certified public accountant. Reporting routine, categories, and structure may be further defined by rules or forms adopted by the Department of Financial and Professional Regulation.

(J) The estimated number of residents of the facility to be provided services by the provider pursuant to a life care contract.

(K) Any other material information concerning the facility or the provider that, if omitted, would lead a reasonable person not to enter into the life care contract.

The cover page of the disclosure statement shall state, in a prominent location and in boldface type, the date of the disclosure statement, the last date through which that disclosure statement may be delivered if not earlier revised, and that the delivery of the disclosure statement to a contracting party before the execution of a life care contract is required by this Section but that the disclosure statement has not been reviewed or approved by any government agency or representative to ensure accuracy or completeness of the information set out. A copy of the standard form of a life care contract used by the provider shall be attached to each disclosure statement. The Department of Financial and Professional Regulation may prescribe a standardized format for the disclosure statement required by this paragraph. The disclosure statement shall be in plain English and in language understandable by a layperson and combine simplicity and accuracy to fully advise residents of the items required by this paragraph. The Department of Financial and Professional Regulation may require a provider to alter or amend its disclosure statement in order to provide full and fair disclosure to prospective residents. The Department of Financial and Professional Regulation may also require the revision of a disclosure statement that it finds to be unnecessarily complex, confusing, or illegible.

(2) A life care contract for a facility used by a provider shall provide all of the following:

(A) The party contracting with the provider may rescind the life care contract at any time before occupying a living unit in the facility, in which event the party shall, within a reasonable period, receive a refund of all money or property transferred to the provider, less (i) those costs specifically incurred by the provider or facility at the request of the party and described in the life care contract or an addendum thereto signed by the party; and (ii) a reasonable service charge, if set out in the life care contract, not to exceed 1% of the entrance fee. If the unit is available for occupancy on the occupancy date agreed upon in the life care contract, and the party failed to occupy the unit, the party shall be deemed to have rescinded the life care contract, unless the party and the provider agree in writing to extend the occupancy date.

(B) If the unit is not available for occupancy on the date agreed upon in the life care contract, and the party has not rescinded the life care contract, the life care contract shall be automatically canceled, unless the party and the provider agree in writing to extend the occupancy date. If the life care contract is automatically canceled the party shall, within a reasonable period, receive a refund of all money or property transferred to the provider plus a reasonable inconvenience fee, if set out in the life care contract, not to exceed 1% of the amount of the entrance fee.

(C) If a resident dies before occupying a living unit in the facility, the life care contract is automatically canceled and the legal representative of the resident shall receive a refund of all money or property transferred to the provider, less (i) those costs specifically incurred by the provider or facility at the request of the party and described in the life care contract or an addendum thereto signed by the party; and (ii) a reasonable service charge, if set out in the life care contract, not to exceed 1% of the entrance fee.

(D) The entrance fee minus no more than 1% for each month of occupancy shall be refunded to the resident when the resident leaves the facility or to the legal representative of a resident if the resident dies.

(E) The services provided or proposed to be provided under a life care contract, including the extent to which medical care is furnished, and specifying those services that are included in the basic life care contract and those made available at or by the facility at extra charge.

(F) A description of all fees required of residents, including the entrance fee and periodic charges, if any. The description shall include: (i) a statement of the fees that will be charged if the resident marries while at the facility and a statement of the terms concerning the entry of a spouse to the facility and the consequences if the spouse does not meet the requirements for entry, (ii) the circumstances under which the resident will be permitted to remain in the facility in the event of possible financial difficulties for a resident, (iii) the conditions under which a living unit occupied by a resident may be made available by the facility to a different or new resident other than on the death of the original resident, (iv) the manner by which the provider may adjust periodic charges or other recurring fees and the limitations on such adjustments, if any, and (v) how many non-residents the facility allows to occupy bed space and what the facility will do if there are no available nursing beds at the facility should a current resident require such care. If the facility is already in operation, or if the provider or manager operates one or more similar facilities within the State, there shall be included tables showing the frequency and average dollar amount of each increase in periodic rates at each facility for the previous 5 years or such shorter period as the facility may have been operated by the provider or manager.

(G) The health and financial conditions required for an individual to be accepted as a resident and to continue as a resident once accepted, including the effect of any change in the health or financial condition of a person between the date of entering a life care contract and the date of initial occupancy of a living unit by that person.

(H) The provisions that have been made or will be made, if any, to provide reserve funding or security to enable the provider to fully perform its obligations under a life care contract, including the establishment of escrow accounts, trusts, or reserve funds, together with the manner in which the funds will be invested and the names and experience of persons who will make the investment decisions.

A life care contract drawn in violation of this paragraph may be rescinded by the resident, and the resident shall be entitled to a full refund of the entrance fee.

(3) As used in this paragraph, "market" includes, but is not limited to, establishment of a waiting list, acceptance of money, property, or other consideration, or distribution of marketing brochures by the provider.

A provider intending to market or develop a facility pursuant to a life care contract that would require prepayment for some or all of a facility's services or intending to market or develop additional units of a facility shall forward a copy of the following information to the Department of Financial and Professional Regulation within 30 days following the implementation of marketing of the facility:

(A) the disclosure statement required under paragraph (1) to be delivered to a person with whom a life care contract for the facility is to be entered;

(B) the life care contract for the facility to be entered into by the provider under paragraph (2) with a person who will occupy a living unit in the facility; and

(C) any available advertising or promotional material to be used in conjunction with the marketing effort.

A provider shall forward a copy of any changes in the information required to be provided within 30 days after the provider's utilization of the changed materials with prospective residents or residents of the facility. A provider intending to market or develop additional units of a facility who has filed such information with the Department of Financial and Professional Regulation pursuant to a previous marketing effort on the same units shall not be required to refile unless there has been a change in the information submitted. The Department shall make the information available to the public in a manner that allows residents and prospective residents to make informed choices regarding the selection of a provider, packages of services and coverage, and care alternatives.

A provider shall forward a copy of the building permit for a facility to the Department of Financial and Professional Regulation within 30 days after its issuance by the city or town where the facility shall be located.

(4) A provider providing continuing care at a facility on the effective date of this amendatory Act of the 100th General Assembly under a life care contract that requires prepayment for some or all of the covered services shall, within 30 days after the effective date of this amendatory Act of the 100th General Assembly, forward a copy of the following to the Department of Financial and Professional Regulation:

(A) the disclosure statement required under paragraph (2) to be delivered to a person with whom a life care contract shall be entered;

(B) the life care contract to be entered into by the provider under paragraph (2) with a person who will occupy a living unit in a facility;

(C) any available advertising or promotional material to be used in conjunction with such marketing effort; and

(D) a copy of the building permit for the facility.

A provider shall forward a copy of any changes in the information required to be provided within 30 days after the provider's utilization of the materials with prospective residents or residents of the facility. A provider intending to market or develop additional units of a facility who has filed the information within the Department of Financial and Professional Regulation pursuant to a previous marketing effort on the same units shall not be required to refile unless there has been a change in the information submitted. The Department Financial and Professional Regulation shall make the information available to the public in a manner that shall allow residents and prospective residents to make informed choices regarding the selection of a provider, packages of services and coverage, and care alternatives.

(5) Residents may:

(A) establish a residents association and elect the officers of the residents association;

(B) receive, upon request, a current copy of a facility's disclosure statement as described in paragraph (1), and providers shall, upon request, make a reasonable effort to explain the terms and information contained within the disclosure document; however, nothing in this subparagraph shall be construed to modify the contractual rights of residents or providers and providers may make reasonable provisions for the form and manner in which the requests shall be submitted;

(C) submit comments to providers on matters that may affect the health and welfare of residents and affect the future of the facility, including, but not limited to, the facility's size and ownership and the provider's financial health; providers may make reasonable provisions for the form and manner in which the comments shall be submitted and, to the maximum extent feasible, shall seek comment from residents when designing or adopting policies that significantly affect the future of the facility;

(D) receive, upon request, information regarding any major construction, modification, expansion, or renovation of the facility, including information on cost estimates, funding, financing, projected income, schedule, and impacts on the existing facility; providers may make reasonable provisions for the form and manner in which the requests shall be submitted; and

(E) receive, upon request, information regarding the purpose and intended funding of all financial reserves kept by a provider; providers may make reasonable provisions for the form and manner in which the requests may be submitted.

(6) A provider shall, to the maximum extent practicable:

(A) offer a reasonable explanation of any adjustment in monthly fees and other major fees paid by residents;

(B) inform residents of matters that may affect the health and welfare of residents and affecting the future of the facility, including, but not limited to, the facility's size and ownership and the provider's financial health; on these matters, the providers shall facilitate communications between residents and management and between residents and boards or owners, which may include residents' representation on the provider's managing body, but need not depend solely on board representation; and

(C) make use of applicable standards and practices to maintain and project each facility's operational and financial viability and, upon request, give that information regarding the standards and practices used by providers to the residents; the provider may make reasonable provisions for the form and manner in which the requests shall be submitted.

(7) Notwithstanding the remedy set forth in paragraph (2), a violation of this Section by a provider for a facility shall constitute an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act.

A facility must comply with the provisions of this Section within one year after the effective date of this amendatory Act of the 100th General Assembly.

(210 ILCS 40/5) (from Ch. 111 1/2, par. 4160-5)

Sec. 5. (a) At the time of or prior to the execution of a life care contract and the transfer of any money or other property to a provider or escrow agent, the provider shall deliver to the resident a copy of a financial disclosure statement reflecting the provider's financial condition. This statement shall include, but not be limited to, disclosure of short-term and long-term short term assets and liabilities.

(b) The life care contract shall provide that any person entering into the contract shall have a period of 14 days beginning with the first full calendar day following the execution of the contract, or the payment of an initial sum of money as a deposit or application fee, or receipt of the financial disclosure statement, whichever occurs last, within which to rescind the life care contract without penalty or further obligation. In the event of such rescission, all money or property paid or transferred by such person shall be fully refunded. No person shall be required to move into a facility until after the expiration of the 14 day rescission period. No permit shall be issued under this Act if the form of life care contract attached as an exhibit in support of the application for permit as provided in Section 4 does not contain the provisions required by this paragraph (b).

(Source: P.A. 82-547.)

(210 ILCS 40/6) (from Ch. 111 1/2, par. 4160-6)

Sec. 6. Upon receipt of the completed application and exhibits and payment of the fee by the applicant, and proof of compliance by the applicant with the provisions of Section 7, the Director shall issue a permit to the provider, subject to the conditions imposed pursuant to Section 7, allowing the provider to enter into life care contracts with respect to the number of living units and facility described in the application.

A permit issued pursuant to this Act shall remain in full force, subject to the provisions of this Act, and shall be publicly displayed contain in a prominent location a statement that the issuance of such permit neither constitutes approval, recommendation or endorsement by the Department or Director nor evidences the accuracy or completeness of the information furnished to the Department. A permit may be revoked by the Department if the facility fails to provide to the Department an accurate disclosure document in accordance with the Alzheimer's Disease and Related Dementias Special Care Disclosure Act.

All permits shall be nontransferable.

(Source: P.A. 96-990, eff. 7-2-10.)

(210 ILCS 40/9) (from Ch. 111 1/2, par. 4160-9)

Sec. 9. At any time the Director or the Secretary of Financial and Professional Regulation receives notice from the escrow agent that the provisions of Section 7 have not been complied with, or at any other time when the Director or the Secretary of Financial and Professional Regulation has reason to believe that the provider is insolvent, is in imminent danger of becoming insolvent or that its condition is such that it may be financially unable to fully perform its obligations pursuant to life care contracts, the Director or the Secretary of Financial and Professional Regulation shall, through the Attorney General, file an appropriate action on behalf of the State of Illinois and any or all residents in any court of competent jurisdiction, including the federal bankruptcy court or any other federal court.

(Source: P.A. 82-547.)

(210 ILCS 40/10) (from Ch. 111 1/2, par. 4160-10)

Sec. 10. The Director or his or her authorized designee, or the Secretary of Financial and Professional Regulation or his or her designee, may conduct an audit or other examination of the financial affairs of any provider as often as he deems it necessary for the protection of the interests of the residents and the people of this State, and for this purpose shall have access to the books, records, financial data and other documents maintained by the facility.

(Source: P.A. 82-547.)

(210 ILCS 40/10.2 new)

Sec. 10.2. Annual report. A printed report compiled by the provider of a facility shall be provided to all residents of the facility on an annual basis and submitted to the Department on an annual basis. The report shall be updated with the information for the preceding year as well as future projections, where specified. The report shall be in 12-point bold type and provide, at minimum, the following:

(1) a statement detailing the facility's financial condition;

(2) audited balance sheets;

(3) a statement of income and expenses;

(4) a statement of cash flow changes;

(5) a list of reserve assets;

(6) a summary of recent State inspections;

(7) a copy of the current contract;

(8) the policy if financial difficulties arise;

(9) the rules and regulations of the facility;

(10) the life changes policy; and

(11) anticipated fee increases for the upcoming year.

(210 ILCS 40/10.3 new)

Sec. 10.3. Online consumer database. The Department shall provide the public with online access to the annual reports required under Section 10.2, facility inspection reports, and any other documentation that the Department determines may be useful for a member of the public who is determining whether he or she would like to live at a facility.

(210 ILCS 40/10.4 new)

Sec. 10.4. Regular periodic charges. An increase in a regular periodic charge not outlined in a life care contract must be approved by the Secretary of Financial and Professional Regulation before the provider or facility may charge a resident with the increase. A request to increase a regular periodic charge must be accompanied by a detailed outline and description justifying the increase.

Section 15. The Consumer Fraud and Deceptive Business Practices Act is amended by adding Section 2VVV as follows:

(815 ILCS 505/2VVV new)

Sec. 2VVV. Violations of the Life Care Facilities Act. A provider for a facility under the Life Care Facilities Act who violates Section 4.1 of the Life Care Facilities Act commits an unlawful practice within the meaning of this Act.