You’ve researched several senior living communities, visited their campuses, spoken to the staff and residents—maybe even attended a few of their social events. Now you feel good and are ready to make a big move—literally and figuratively. But before you sign on the dotted line, it’s important to understand exactly what you’re signing. Here’s a guide to the most common retirement community agreements and what they include.
The ABCs of Senior Living Contracts
You may have come across an alphabet of residential agreement contracts during your search—Contract A, Modified B, Pay-As-You-Go C and even Type D. The bottom line is—there are different senior living contract types, and unless you ask exactly what’s included and what’s not, you may not know until it’s too late.
We put together a simple breakdown of each option, but keep in mind that even though their titles may be the same, the details could vary between communities. That’s why it’s important to get everything in writing and have a lawyer or someone versed in contracts review it before signing.
Type A Contract – This type of contract is by far the most comprehensive and predictable. Although it requires a relatively high entry fee, the monthly fees remain fairly consistent and may increase slightly based on normal bumps in operating costs and inflation. Typically included in this type of plan are unlimited access to care, living accommodations, residential services and amenities. This type of contract appeals to anyone who wants to protect their assets and ensure their long-term needs are met within a single community.
Type B Contract – You may hear this type of contract referred to as a Modified Life Plan. Communities that offer this plan usually require a lower entry fee and a monthly fee that is subject to change based on each resident’s changing needs. Unlike the Type A Contract, this does not offer unlimited health services and is therefore not as predictable. For Type B, services are only offered for a predefined period and not all services are covered. Under this plan, there’s also no guarantee you’ll have a bed at the time you need to move to a higher level of care.
Type C Contract – This contract is often referred to as a Fee-for-Service. True to its name, residents pay for services as needed. And even though the entry fee for this contract may be the lowest available, once you add on needed services, it could very well end up being the most expensive option because you’ll have to pay the full market rate for assisted living or skilled nursing care if needed.
Contract D – Also known as a rental contract, this type of agreement is limited to providing residents with a place to live and community amenities included in the monthly fee. There is no entry fee required. However, residents who sign up for this type of contract are also not guaranteed healthcare services they may need in the future.
Type A Contract. Type A+ Quality of Care.
At John Knox Village of Central Florida, we’re always upfront about our costs and inclusions. Our Type A Contract structure, which we also refer to as our Premium Plan, is set up to benefit our families, not our business.
Here’s how it works: Independent Living residents pay an entry fee and monthly fee based on the number of people in the residence, type of residence and living expenses. Then if they need to transition to our Majestic Oaks Skilled Nursing neighborhood, they are guaranteed a bed and unlimited stay for a nominal add-on fee. This fee is drastically reduced from the one paid by those who enter the community directly into Skilled Nursing. This plan can save residents thousands of dollars—and even more for couples.
It’s all part of our mission to help residents age in place, helping them to stay in their Independent Living residence for as long as possible—in many cases forever—and even bring in home health, hospice and other extra services as needed.
How Payments Work
Our Life Plan entry fee is a one-time payment that provides lifetime access to a continuum of care should your needs evolve. You pay 10% when you sign the contract and the balance when moving in—or within six months if you’re using funds from the sale of your home to pay the fee.
We offer a standard senior living refund policy that provides a prorated refund of the entry fee for up to four years. Beyond four years, there is no refund. As with many of the details of the contract, refund policies can vary across communities. Before signing any contract, ask whether the community offers a refund and the specific terms.
Comparing Life Plan Contracts
Keep in mind that while many Life Plan Communities may refer to their agreements as Type A Contracts, they’re not always created equal. Some Type A Contracts may be set up in a way that residents go from Independent Living to Assisted Living, rather than Independent Living to Skilled Nursing like at John Knox Village. That means residents would be required to make an additional move to Skilled Nursing if needed—most likely with additional fees. If you’re thinking of moving to a senior living community, be sure to think ahead to any possible scenarios and understand how it works with the contract you sign.
Another thing to be cognizant of is any community that claims that its Type A Contract is all-inclusive. Although most of the fees of daily living are covered under this type of contract, there are always ancillary things that may not be included. At John Knox Village, we will go over all of that with you when you sign the contract.
The Bottom Line
ABCs aren’t always as easy as 1, 2, 3—at least when it comes to senior living contracts. If you’re not sure what something means, ask. If you’re still not sure, have someone who is trained to understand contractual language look at it for you.
At John Knox Village, we’re here to help you understand your options and answer any questions you may have about our Life Plan contracts and our mission to ensure everyone has an opportunity to gracefully age in place.
To learn more about life in our community or to schedule a tour of our beautiful 200-acre campus, call (386) 775-0788.