ASOP 3
(CONTINUING CARE RETIREMENT COMMUNITIES AND AT HOME PROGRAMS)
SECTION 2
(DEFINITIONS)

Section 2
Definitions

ASOP 3 | §2.0 | INTRO TO SECTION 2

The terms below are defined for use in this actuarial standard of practice and appear in bold throughout the ASOP.

ASOP 3 | §2.1 | ACTUARIAL BALANCE SHEET

A measure of the assets and liabilities, as of the valuation date, associated with current contractual residents or current members.

ASOP 3 | §2.2 | ACTUARIAL PRESENT VALUE

The value of an amount or series of amounts payable or receivable at various times, determined as of a given date by the application of a particular set of actuarial assumptions with regard to future events, observations of market or other valuation data, or a combination of assumptions and observations.

ASOP 3 | §2.3 | ADDITIONAL FEE

An amount that may be payable by a contractual resident or member, in accordance with a residency agreement or membership agreement, for services made available but not covered by the advance fee and the periodic fees. Examples of additional fees include fees for guest meals, additional meals, barber/beauty shop, use of a carport, and non-covered health care services.

ASOP 3 | §2.4 | ADVANCE FEE

An amount payable by a contractual resident at the inception of a residency agreement or by a member at the inception of a membership agreement. The advance fee is usually specified in the residency agreement or membership agreement and is usually payable prior to occupancy of the residence or receipt of benefits.

ASOP 3 | §2.5 | AT HOME PROGRAM

An organization that provides social and health care services in return for some combination of an advance fee, periodic fees, and additional fees. At Home Programs differ from CCRCs in that they do not provide a direct independent living unit for members.

ASOP 3 | §2.6 | CASH AND INVESTMENT BALANCE

The value of cash, cash equivalents, and marketable securities (historically referred to as “cash balance” by industry organizations). This excludes the value of the physical property assets.

ASOP 3 | §2.7 | COHORT OF NEW CONTRACTUAL RESIDENTS OR NEW MEMBERS

A hypothetical group of new contractual residents or members assumed to enter a CCRC or At Home Program over a specified period of time and assumed to have certain demographic characteristics.

ASOP 3 | §2.8 | CONTINUING CARE RETIREMENT COMMUNITY (CCRC)

An organization that provides contractual residential housing and stated housekeeping, social, and health care services in return for some combination of an advance fee, periodic fees, and additional fees. CCRCs are also known as Life Plan Communities (LPCs).

ASOP 3 | §2.9 | CONTRACTUAL RESIDENT

A person who has signed a residency agreement.

ASOP 3 | §2.10 | FEE STRUCTURE

A combination of fees that includes advance fees and periodic fees, and that may include additional fees.

ASOP 3 | §2.11 | HEALTH CARE GUARANTEE

A clause in a residency agreement or membership agreement guaranteeing access to health care and defining the type of health care services to be provided to the contractual resident or member. These health care services may be offered with or without adjustments to the periodic fees.

ASOP 3 | §2.12 | HEALTH CENTER

A facility associated with a CCRC or At Home Program where health care is provided to contractual residents or members in accordance with the residency agreement or membership agreement. The facility typically includes some combination of assisted living, memory care, and nursing care units. Non-contractual residents may also live in the facility.

ASOP 3 | §2.13 | INDEPENDENT LIVING UNIT

Living quarters designed for contractual residents capable of living independently. A contractual resident could receive home health care in the independent living unit, but a contractual resident who needs full-time health care on either a temporary or permanent basis is normally transferred to the health center.

ASOP 3 | §2.14 | LEVEL(S) OF CARE

Varying degrees of care based on a contractual resident’s or member’s health status. Typical levels of care include independent living, assisted living, nursing care, and memory care. The levels of care may be dictated by state licensure.

ASOP 3 | §2.15 | LIVING UNIT

The various living quarters of a CCRC, including independent living units and health center units.

ASOP 3 | §2.16 | MEMBER

A person who has signed a membership agreement with an At Home Program.

ASOP 3 | §2.17 | MEMBERSHIP AGREEMENT

A contract between one or more members and an At Home Program that describes the services to be provided, the obligations of the parties, the health care guarantee, and any refund guarantee. The contract is usually of long duration and may be for the life of each member.

ASOP 3 | §2.18 | MORBIDITY

The incurral of an illness or disability requiring the transfer to a different level of care. The permanent transfer rates and the temporary transfer rates together comprise the rate of morbidity.

ASOP 3 | §2.19 | NON-CONTRACTUAL RESIDENT

A person living in the CCRC without a health care guarantee and without a refund guarantee. Non-contractual residents normally pay for all health care services received on a fee for service basis. Examples of non-contractual residents are rental or lease residents, and direct admissions to the health center.

ASOP 3 | §2.20 | OCCUPANCY RATE

The number of occupied units at each level of care by contractual and non-contractual residents, relative to available units.

ASOP 3 | §2.21 | PERIODIC FEE

Amounts payable periodically (usually monthly) by a contractual resident or member. The amounts are typically adjusted from time to time to reflect changes in operating costs.

ASOP 3 | §2.22 | PERMANENT TRANSFER

A move from one level of care to another level of care without expectation of returning to the former level of care.

ASOP 3 | §2.23 | PHYSICAL PROPERTY

Physical assets, such as land, building, furniture, fixtures, or equipment. These assets, excluding land, are assumed to depreciate over their respective lifetimes. These assets are also referred to as the fixed assets.

ASOP 3 | §2.24 | POPULATION PROJECTION

An estimate of the expected number of contractual residents or members at various future times.

ASOP 3 | §2.25 | REFUND GUARANTEE

A clause in a residency agreement or membership agreement that provides for a refund of any portion of the advance fee upon termination of the agreement.

ASOP 3 | §2.26 | RESIDENCY AGREEMENT

A contract between one or more residents and a CCRC that includes a health care guarantee or a refund guarantee, and describes the services to be provided and the obligations of the parties. The contract is usually of long duration and may be for the life of each contractual resident.

ASOP 3 | §2.27 | TEMPORARY TRANSFER

A move from one level of care to another level of care with the expectation of returning to the former level of care.

ASOP 3 | §2.28 | TREND

Measure of rates of change, over time, that affects revenues, costs, or actuarial assumptions.

ASOP 3 | §2.29 | VALUATION DATE

The date as of which the assets and liabilities of the CCRC or At Home Program are estimated.

ASOP 3 | §2.30 | WITHDRAWAL

The termination of a residency agreement or membership agreement by the contractual resident or member for reasons other than death.