SB1522

Which arrangements are covered? The new definition pairs a living unit and related services with an agreement for priority, guaranteed or discounted access to higher levels of health care as needed. Care can come from another provider, including assisted living, nursing or home-care services. It also covers qualifying services that let someone remain at home. The facility definition now includes an individual’s residence, while “living unit” excludes accommodation within a nursing or assisted-living facility. The new continuing-care definition applies only to providers certified on or after January 1, 2026; earlier certificates retain the former definition. Final law, §§1–2,19; Prior §246.0025.

An entrance-fee community’s admission or residence agreement is exempt from Chapter 246 only if available assisted-living and nursing care is fee-for-service, prospective and current residents face the same fees for that care, and the agreement conspicuously states that it is not a continuing-care contract and the community is not certified as a continuing-care facility. This is a conditional exemption, not an automatic exemption for all retirement communities. Final law, §4.

Resident information and refunds. The law updates nursing/assisted-living rights terminology, bars contract or reservation-agreement bans on residents assembling, and requires the latest revised disclosure statement on request by residents, prospective residents or their designated agents. Only certificate holders may advertise as a “continuing care facility” or “continuing care retirement community.” Final law, §§3,6.

The existing cancellation window remains at least seven days after the later of signing or receiving the disclosure statement, with written notice. The refund due within 30 days is narrowed from transferred assets, less applicable occupancy charges, to the entrance fee. Entrance fee now excludes optional unit modifications bought under a separate agreement. For death before occupancy, or illness, injury or incapacity that prevents occupancy under the contract, the law also adds those separate-agreement modification payments to allowable deductions; it retains the existing contracted nonstandard-cost deduction and reasonable service-charge cap of the greater of $1,000 or 2% of the entrance fee. These provisions do not decide every refund right under another contract or law. Final law, §§1,7–8; Prior §246.056; Prior §246.057.

When entrance-fee money is held or released. The escrow-account requirement now addresses reservation deposits or entrance fees accepted before the prospective resident may occupy a unit. A terminated pre-occupancy reservation deposit must be returned on written request. The general release rule lets the provider choose payment to itself or a loan-reserve escrow unless the specified return request is received; special construction rules still apply where required. Waitlist or similar fees of $1,000 or less need not be escrowed. The existing exemption for a clearly designated nonrefundable portion no greater than 2% of the entrance fee remains. Final law, §§9–10,15.

The special construction release rules now apply only to new facilities or expansions increasing existing living units by at least 50%. Before initial release:

• At least half the units must be reserved by uncanceled contracts or reservation agreements, with escrowed deposits of at least 10% of each reserved unit’s entrance fee.
• Specified entrance fees, financing and other funds must cover at least 90% of construction/purchase and furnishing costs, 90% of estimated initial losses and 90% of the required loan reserve.
• Financing commitments must substantially satisfy their pre-disbursement conditions except completion or purchase closing. If construction is unfinished, additional permit, maximum-price contract, bond and financing requirements apply, including at least 10% construction-loan disbursement for physical work/site preparation and firm orders for at least half the equipment/furnishing value. The particular unit must have an occupancy permit and be available.

The existing limit protecting the initial loan reserve remains. After initial release and before construction finishes, continued releases require monthly marketing reports and immediate reporting of marketing problems. After completion, all necessary occupancy permits and all units’ availability, the general release rule governs. Final law, §§11–13; Prior §246.073.

Fees still held, rather than released to the provider or loan reserve, must be returned after 36 months or a longer period disclosed in the contract materials. The law adds return as soon as practicable after pre-occupancy death, an indefinite construction halt at a facility not yet operating, or statutory contract cancellation. It does not promise recovery of every fee already spent. The loan-reserve calculation may exclude debt attributable to licensed assisted-living space as well as nursing space. Final law, §§14,16.

Financial oversight. The insurance commissioner may reject a certificate application if the applicant does not own the facility’s land. Facilities subject to the existing actuarial-review requirement—contracts whose future long-term nursing-care guarantees create current actuarial liabilities, meaning obligations valued using financial and longevity assumptions—must file a review at least every five years. Earlier reviews may be required for leased grounds/buildings or financial instability. The bill removes the former date-based review timetable, not the review requirement itself. Final law, §§5,17–18; Prior §246.114.

How the text changed. Introduced, Senate committee and Senate-passed operative provisions match. The House substitute added inclusion of an individual’s residence in the facility definition; its operative text matches the enacted law. No floor amendments are indexed. Introduced; Senate committee; Senate-passed; House substitute; Text index; Amendment index.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

Residents gain specified disclosure and assembly protections, but the narrower cancellation refund and separate-modification deductions deserve attention before signing. Providers gain clearer exceptions and some flexibility in releasing funds, while facing advertising, reporting and financial-review conditions. These are legal changes, not proof that fees will fall or every community will become financially safer. Final law.

Both the March 31 introduced-version and May 18 House-substitute fiscal notes anticipate no significant state fiscal impact and no local-government fiscal impact. They do not estimate residents’ private losses, provider compliance expenses or future prices. The act makes no appropriation. Original fiscal note; House fiscal note; Final law.