(October 2013)

INTRODUCTION

Choosing day care for children is difficult and many individuals now face an even more difficult job of choosing day care for their parents and/or their spouses. People are concerned about both the adults and children in their lives. They want to know that their loved ones are as independent as possible and thriving in stimulating situations. Facilities are available to provide the necessary care but they have to be classified correctly so that an adequate premium charge is made and the coverage is structured appropriately.

ADULT DAY CARE

The adult day care industry is a relatively new phenomenon that has been enthusiastically received. Many older people are physically able to live independently for the most part but need some supervision or assistance during the day. Some older adults live in areas where their opportunities for outside contact are limited and adult day care is an attractive alternative to staying home alone all day and watching television.

The types of adult day care arrangements, facilities, and costs vary greatly. Some facilities provide minimal supervision and are more of an activity center, where older adults gather for conversation, to play games, and to take part in various group activities. They also provide meals and occasionally arrange outside excursions. The adults at these facilities must be relatively independent, ambulatory, and able to handle their own basic hygiene needs.

Other facilities involve Alzheimer's patients or individuals affected by varying degrees of dementia. These individuals are usually in reasonably good physical condition but have diminished mental capacity that requires monitoring and assistance in some functions. Milder and less advanced cases need less supervision but exit doors from the facility premises must be kept closed and outside activities monitored closely due to concerns about patients "wandering off." The degree of supervision increases and the activity options decreases as the severity of the disease progresses and the symptoms increase. Nurses' aides may be on site to provide medical assistance.

The Insurance Services Office (ISO) provides two classifications for adult day care facilities:

• Class Code 40005: Adult Day Care–Not-For-Profit Only
• Class Code 40006: Adult Day Care–Other Than Not-For-Profit

The notes explain that these facilities provide supervision, medical care, and social activities for senior citizens and adults who live at home but either cannot be left alone during the day or prefer to be with others. Services provided include food service, monitoring health, and administering medications. It is anticipated that the facilities have primarily non-professional staff but that nurses and other home health care professionals are also employed or on call.

The note that accompanies both classifications states that CG 22 87–Exclusion–Adult Day Care Centers must be used. This endorsement excludes coverage for all professional activities, including those related to health care and skin or beauty care. It also excludes medical payments coverage to persons who receive services from the facility.

Note: Medical payments coverage still applies to other visitors to the facility.

The premium basis for this classification is "each person."

CHILDREN'S DAY CARE

Children's day care operations have many of the same characteristics of adult day care facilities and function similarly. Children attend the facility because they cannot be left alone at home and unattended during the day. The center provides age appropriate activities they take part in before they return home at the end of the day. Younger children require more supervision than older children. Each state establishes minimum standards and ratios for children-to-adults based on the children's ages. Day care facilities must comply with these minimum standards and some exceed them by having additional staff to provide more personal attention and activities.

Many day care facilities go to extremes to respond to customer needs. Some are open 24 hours a day and respond to the needs of third-shift workers. Others do not take infants because of staffing requirements. Some emphasize preschool children more and offer numerous different learning activities. Many provide both before and after school activities for older children. All provide meals and a safe environment for children.

ISO provides two classifications for children's day care facilities.

• Class Code 41716: Day Care Centers–Not-For-Profit Only
• Class Code 41715: Day Care Centers–Other Than Not-For-Profit

The note that accompanies both classifications requires attaching CG 22 40–Exclusion–Medical Payments to Children–Day Care Centers. It excludes medical payments coverage for injuries to children while at the center but coverage still applies to other visitors.

The premium basis for this classification is "each person" and is based on the average daily attendance at the center.

COMBINED ADULT AND CHILDREN'S DAY CARE

Because both of the major classifications outlined above involve day care facilities for dependent individuals, the issue of how to handle a combined operation that involves both adults and children under one roof is likely to arise. ISO does not give any instructions or clear guidance on the subject. However, because none of the Day Care Centers classifications have age restrictions, it suggests that they can apply to all ages, keeping in mind that the accompanying note indicates that the premium basis is each person, not each child. To summarize, use the appropriate Day Care Centers code when different age groups are present in a single day care setting, not either of the Adult Day Care codes.

One important point or concern when codes 41715 and 41716 are used for a combined operation is that CG 22 40–Exclusion–Medical Payments to Children–Day Care Centers applies to only children. If either of these codes is used and the accompanying notes and instructions are followed, adults who receive care have broader coverage than if codes 40005 and 40006 are used and the accompanying notes and instructions followed. This is because there is no professional activities exclusion and the medical payments exclusion does not apply to adults.