Report Title:

Assisted Living Facility; Disclosures

Description:

Requires operator of an assisted living facility to disclose to prospective tenants the full terms of any agreement for a right-to-use plan for the use of the facility.

THE SENATE

S.B. NO.

1550

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to disclosures by assisted living facilities.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The department of health defines "assisted living facility" in section 321-15.1, Hawaii Revised Statutes, as a combination of housing, health care services, and personalized supportive services designed to respond to individual needs, to promote choice, responsibility, independence, privacy, dignity, and individuality. The state health planning and development agency uses a more extensive definition in section 323D-2, Hawaii Revised Statutes, by adding: "In this context, "health care services" means the provision of services in an assisted living facility that assists the resident in achieving and maintaining the highest state of positive well-being (i.e., psychological, social, physical, and spiritual) and functional status. This may include nursing assessment and monitoring, and the delegation of nursing tasks by registered nurses pursuant to chapter 457, care management, monitoring, records management, arranging for, and/or coordinating health and social services."

Normally, a resident in an assisted living facility signs an agreement typically known as a right-to-use plan in which the resident pays for a package that includes private living quarters, often similar to a condominium apartment, use of existing facilities that may include common rooms, recreational facilities, and various health and medical services such as those listed in the two definitions above.

The legislature finds, however, that the financial and administrative operation of assisted living facilities is not regulated in the State insofar as protection of residents is concerned. The purpose of this Act is to require operators of assisted living facilities to fully disclose the terms and conditions of their resident right-to-use plan agreements and any other relevant financial and administrative requirements, regardless of whether the requirements are imposed by law.

SECTION 2. Chapter 481B, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§481B-   Assisted living facilities; disclosures; filing. (a) Before any right-to-use plan may be agreed to by a prospective resident, any person engaged in the business of operating an assisted living facility, as defined in section 323D-2, shall first and affirmatively make full disclosure to the prospective resident the full terms and conditions of the right-to-use plan. A right-to-use plan is a plan under which a resident agrees to pay the operator of the assisted living facility for the right to use and live in the facility, and to use its ancillary facilities and health services. The operator of the facility shall also make the same disclosures to existing residents who have already agreed to any right-to-use plan before the effective date of this Act.

(b) The disclosures shall be made in written form in a clear and coherent manner, using words with common and everyday meanings, and appropriately divided and captioned in various sections. The size of the print shall be sufficiently large such that any person who has reasonable eyesight is able to read the text without difficulty. If a prospective resident is unable to read the text, either because of the size of the print or if the prospective resident does not adequately understand the English language, the facility shall make available in audio form, or translated into the appropriate language, or both, the contents of the disclosure.

(c) The contents of the disclosure shall include at least:

(1) Any requirement for the operator of the assisted living facility to obtain a bond or surety to protect its operation and the interests of the residents;

(2) The amount and terms of any bond or surety held by the operator of the assisted living facility, regardless of whether required by law or rule;

(3) The existence of any unpaid debts or obligations, except for payments for a mortgage or mortgages on the facility buildings or land or for financing for the construction of the facility;

(4) Any prior history of financial default, bankruptcy filing, or placement in receivership in this State or outside the State on the part of the operator, owner, or any member of any board of directors or trustees of the assisted living facility within the five years prior to the disclosure;

(5) Any prior convictions for fraud or unfair or deceptive trade practices in this State or outside the State on the part of the operator, owner, or any member of any board of directors or trustees of the assisted living facility within the five years prior to the disclosure;

(6) The existence of any escrow requirements for incoming residents and the full terms of any such requirements;

(7) The existence of any right to cancel or withdraw from the agreement by either the resident or the operator of the facility, and the full terms of any such right, including a maximum grace period after the signing of an agreement of a right-to-use plan, and any other conditions necessary for either party to exercise the right to cancel or withdraw from the agreement;

(8) The consequences of any late payments by the resident, including penalties or interest, grace periods for delinquent payments, if any, and whether late payments may or may not constitute grounds for termination of a right-to-use agreement on the part of the operator; and

(9) Upon the resident's death, the disposition of the resident's living quarters and any remaining balance paid by the resident to the operator.

(d) The operator of an assisted living facility shall update the disclosure annually no later than January 31 each year and shall file the annual disclosure with the director of the office of consumer protection."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________