[House Report 112-342]
[From the U.S. Government Publishing Office]
112th Congress Rept. 112-342
HOUSE OF REPRESENTATIVES
2d Session Part 2
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FISCAL RESPONSIBILITY AND RETIREMENT SECURITY ACT OF 2011
_______
January 23, 2012.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Camp, from the Committee on Ways and Means,
submitted the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 1173]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 1173) to repeal the CLASS program, having considered
the same, report favorably thereon and recommend that the bill
do pass.
CONTENTS
Page
I. Summary and Background...........................................1
II. Explanation of the Revenue Provision of the Bill.................3
A. Repeal of CLASS Program (sec. 2(a) of the bill)...............3
III. Votes of the Committee...........................................4
IV. Budget Effects of the Bill.......................................5
V. Other Matters To Be Discussed Under the Rules of the House.......7
VI. Changes in Existing Law Made by the Bill, as Reported............9
VII. Dissenting Views................................................50
I. Summary and Background
A. PURPOSE AND SUMMARY
The bill, H.R. 1173, reported by the Committee on Ways and
Means, repeals the statutory provisions relating to the CLASS
program,\1\ as enacted under the ``Community Living Assistance
Services and Supports Act,'' also called the ``CLASS Act.''\2\
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\1\Secs. 3201-3210 of the Public Health Service Act, 42 U.S.C.
300ll et seq.
\2\Title VIII of the Patient Protection and Affordable Care Act of
2010, Pub. L. No. 111-148 (March 23, 2010).
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Specifically, as part of repealing the statutory provisions
relating to the CLASS program, the bill repeals the Federal
income tax provision under which the CLASS program is treated
for purposes of the Internal Revenue Code of 1986 in the same
manner as a qualified long-term insurance care contract for
qualified long-term care services.
B. BACKGROUND AND NEED FOR LEGISLATION
The CLASS Act directs the U.S. Department of Health and
Human Services (``HHS'') to establish the CLASS program, a new
Federal long-term care insurance entitlement established under
the 2010 health care law. The CLASS program must meet certain
general criteria set forth in the CLASS Act, including that the
program be solvent throughout a 75-year period. Both prior to
and after the enactment of the CLASS program, significant
concerns have been raised by Members of both parties--as well
as by the Administration's own actuaries--concerning the fiscal
unsustainability of the CLASS program. On October 14, 2011, HHS
Secretary Kathleen Sebelius announced that HHS was suspending
implementation of the CLASS program because of HHS's
recognition that there is ``no viable path forward'' for
developing a program meeting the applicable criteria. The bill
repeals the statutory provisions relating to the CLASS program,
including the provision dealing with the Federal tax treatment
of the CLASS program.
C. LEGISLATIVE HISTORY
Background
H.R. 1173 was introduced on March 17, 2011, and was
referred to the Committee on Energy and Commerce and to the
Committee on Ways and Means.
The Committee on Energy and Commerce marked up the bill on
November 29 and 30, 2011, and ordered the bill, as amended,
favorably reported.\3\
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\3\See H.R. Rep. No. 112-342, Part 1, for the bill as reported by
the Committee on Energy and Commerce.
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Committee action
With the Committee on Ways and Means' referral on the bill
scheduled to expire on February 1, 2012, the Committee marked
up the bill on January 18, 2012, and ordered the bill favorably
reported without an amendment.
Committee hearings
The Committee has held numerous hearings on various aspects
of the 2010 health care law during the 112th Congress. Four of
those hearings--including one held on January 26, 2011; one
held on February 10, 2011; and two held on February 16, 2011--
featured testimony or extensive Member discussion raising
significant concerns about the CLASS program.
II. Explanation of the Revenue Provision of the Bill
A. REPEAL OF CLASS PROGRAM (SEC. 2(A) OF THE BILL)
Present Law
CLASS program
The CLASS Act amended the Public Health Service Act (the
``PHSA'') to provide for the establishment of the CLASS program
by HHS.\4\ The CLASS program would be a national voluntary
long-term care insurance program allowing individuals to
purchase long-term care insurance to provide benefits in the
case of functional limitations, e.g., the inability to perform
activities of daily living (such as bathing and dressing) or
the need for supervision because of a cognitive impairment. The
CLASS Act provides general criteria for premiums, vesting,
benefits and other elements of the CLASS program, including
that the program be actuarially sound and solvent throughout a
75-year period.
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\4\Secs. 3201-3210 of the PHSA, 42 U.S.C. 300ll et seq.
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HHS has suspended work on establishment of the CLASS
program because of the inability to develop a program meeting
the applicable criteria.\5\
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\5\Letter from HHS Secretary Kathleen Sebelius to Congress, October
14, 2011, available at www.hhs.gov/secretary/letter10142011.html.
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Tax treatment of qualified long-term care insurance
Favorable tax treatment applies with respect to premiums
paid for and benefits under a qualified long-term care
insurance contract providing coverage of qualified long-term
care services.\6\ Qualified long-term care services are
necessary diagnostic, preventive, therapeutic, curing,
treating, mitigating and rehabilitative services, and
maintenance or personal care services that are required by a
chronically ill individual and that are provided pursuant to a
plan of care prescribed by a licensed health care practitioner.
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\6\Sec. 7702B. Except as otherwise stated, all section references
herein are to the Internal Revenue Code of 1986, as amended (the
``Code'').
---------------------------------------------------------------------------
Premiums paid for a qualified long-term care insurance
contract generally are deductible as medical expenses, subject
to a dollar limit on the deductible amount of the premium per
year based on the insured person's age (e.g., between ages 40
and 50) at the end of the taxable year.\7\ Subject to the same
dollar limit, premiums paid for qualified long-term care
insurance by a self-employed individual generally are
deductible.\8\
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\7\Secs. 7702B(a)(4) and 213(d)(10). Under section 213, medical
expenses are generally allowed as a deduction only to the extent they
exceed 7.5 percent of adjusted gross income (10 percent of adjusted
gross income as of 2013).
\8\Sec. 162(l).
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A qualified long-term care insurance contract is treated as
an accident and health insurance contract, and amounts received
under the contract are excludable from income as amounts
received for personal injuries or sickness, subject to per-day
dollar limits in certain cases.\9\ Amounts received under a
qualified long-term care insurance contract (regardless of
whether the contract reimburses expenses or pays benefits on a
per diem or other periodic basis) are treated as reimbursement
for expenses actually incurred for medical care.\10\
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\9\Secs. 7702B(a)(1), (a)(2), and (d) and 104(a)(3).
\10\Sec. 7702B(a)(2).
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A plan of an employer providing coverage under a long-term
care insurance contract generally is treated as an accident and
health plan, and employer-provided coverage and benefits under
the contract generally are excludable from income.\11\
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\11\Secs. 7702B(a)(3), 105 and 106. However, the exclusion does not
apply to qualified long-term care insurance provided through a flexible
spending arrangement within the meaning of section 106(c). Further,
under section 125(f), long-term care insurance is not permitted to be
offered under a cafeteria plan.
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Under the CLASS Act, the CLASS program is treated for
purposes of the Code in the same manner as a qualified long-
term insurance care contract for qualified long-term care
services.\12\
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\12\Sec. 3210 of the PHSA, 42 U.S.C. 300ll-9.
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Reasons for Change
The Committee believes that the CLASS program as enacted is
not fiscally sustainable and should be repealed. As part of
this repeal, the Committee believes that the provision treating
the CLASS Program for tax purposes in the same manner as a
qualified long-term care insurance contract should be repealed.
Explanation of Provision
The provision repeals the statutory provisions relating to
the CLASS program. Thus, the provision treating the CLASS
program for Code purposes in the same manner as a qualified
long-term care insurance contract for qualified long-term care
services is repealed.
Effective Date
The provision is effective on the date of enactment.
III. Votes of the Committee
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 1173, the ``Fiscal Responsibility and
Retirement Security Act of 2011.''
The bill, H.R. 1173, was ordered favorably reported without
amendment by a roll call vote of 23 yeas to 13 nays (with a
quorum being present). The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Camp....................... X ........ ......... Mr. Levin........ ........ X .........
Mr. Herger..................... X ........ ......... Mr. Rangel....... ........ X .........
Mr. Johnson.................... X ........ ......... Mr. Stark........ ........ X .........
Mr. Brady...................... X ........ ......... Mr. McDermott.... ........ X .........
Mr. Ryan....................... X ........ ......... Mr. Lewis........ ........ X .........
Mr. Nunes...................... X ........ ......... Mr. Neal......... ........ X .........
Mr. Tiberi..................... X ........ ......... Mr. Becerra...... ........ X .........
Mr. Davis...................... X ........ ......... Mr. Doggett...... ........ X .........
Mr. Reichert................... X ........ ......... Mr. Thompson..... ........ X .........
Mr. Boustany................... X ........ ......... Mr. Larson....... ........ X .........
Mr. Roskam..................... X ........ ......... Mr. Blumenauer... ........ X .........
Mr. Gerlach.................... X ........ ......... Mr. Kind......... X ........ .........
Mr. Price...................... X ........ ......... Mr. Pascrell..... ........ X .........
Mr. Buchanan................... X ........ ......... Ms. Berkley...... ........ ........ .........
Mr. Smith...................... X ........ ......... Mr. Crowley...... ........ X .........
Mr. Schock..................... X ........ ......... ................. ........ ........ .........
Ms. Jenkins.................... X ........ ......... ................. ........ ........ .........
Mr. Paulsen.................... X ........ ......... ................. ........ ........ .........
Mr. Marchant................... X ........ ......... ................. ........ ........ .........
Mr. Berg....................... X ........ ......... ................. ........ ........ .........
Ms. Black...................... X ........ ......... ................. ........ ........ .........
Mr. Reed....................... X ........ ......... ................. ........ ........ .........
----------------------------------------------------------------------------------------------------------------
IV. Budget Effects of the Bill
A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the revenue provision
of the bill, H.R. 1173, as reported.
The revenue provision of the bill, as reported, is
estimated to have no effects on budget receipts for fiscal
years 2012-2022.
B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX EXPENDITURES BUDGET
AUTHORITY
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee states further that the bill involves no new or
increased tax expenditures.
C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET OFFICE
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, January 19, 2012.
Hon. Dave Camp,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1173, the Fiscal
Responsibility and Retirement Security Act of 2011.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Julia
Mitchell.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
H.R. 1173--Fiscal Responsibility and Retirement Security Act of 2011
Summary: H.R. 1173 would repeal title VIII of the Patient
Protection and Affordable Care Act (PPACA). That title of PPACA
established the Community Living Assistance Services and
Supports (CLASS) Program--a national, voluntary long-term care
insurance program for purchasing community living assistance
services and supports. Title VIII also authorized and
appropriated funding through 2015 for the National
Clearinghouse for Long-Term Care Information (clearinghouse).
H.R. 1173 would rescind any unobligated balances appropriated
to the National Clearinghouse for Long-Term Care Information.
CBO estimates that enacting H.R. 1173 would reduce direct
spending by $9 million over the 2012-2017 and 2012-2022
periods. Pay-as-you-go procedures apply because enacting the
legislation would affect direct spending. Enacting H.R. 1173
would have no impact on federal revenues.
The bill contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 1173 is shown in the following table.
The effects of this legislation fall within budget function 550
(health).
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By fiscal year, in millions of dollars--
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2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012-2017 2012-2022
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CHANGES IN DIRECT SPENDING
Estimated Budget Authority........................... 0 -3 -3 -3 0 0 0 0 0 0 0 -9 -9
Estimated Outlays.................................... 0 -3 -3 -3 0 0 0 0 0 0 0 -9 -9
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Basis of estimate: In its March 2011 baseline projections,
CBO anticipated that the CLASS program would begin collecting
premiums in fiscal year 2012 and that net receipts of the
program over the 2012-2021 period would amount to $81 billion,
not including estimated Medicaid savings of $2 billion. On
October 14, 2011, the Secretary of the Department of Health and
Human Services announced that she did not ``see a viable path
forward for CLASS implementation at this time.''\1\ CBO
considers that announcement to be definitive new information
and as a result, in its next baseline projections (which will
be issued later this month), CBO will assume that CLASS will
not be implemented unless there are changes in law or other
actions by the Administration that would supersede the
Secretary's announcement. Further, legislation to repeal the
provisions of law establishing the CLASS program are now
estimated as having no budgetary effect relative to current
law.
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\1\Letter from Kathleen Sebelius, Secretary of the Department of
Health and Human Services, to John A. Boehner, Speaker, House of
Representatives, October 14, 2011.
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However, the Secretary's announcement does not affect use
of the funds authorized and appropriated for the clearinghouse.
Therefore, the rescission of unobligated funds for the
clearinghouse for 2013 through 2015 would have a budgetary
effect of reducing direct spending by $9 million over the 2012-
2022 period.
Pay-as-you-go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
Enacting H.R. 1173 would have no impact on federal revenues.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 1173, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON JANUARY 18, 2012
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By fiscal year, in millions of dollars--
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2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012-2017 2012-2022
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NET DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact.................... 0 -3 -3 -3 0 0 0 0 0 0 0 -9 -9
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Intergovernmental and private-sector impact: H.R. 1173
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Previous CBO estimate: On December 2, 2011, CBO transmitted
a cost estimate for H.R. 1173, as ordered reported by the House
Committee on Energy and Commerce on November 30, 2011. The two
versions of H.R. 1173 are similar. Both versions of the bill
would have no budgetary effect over the 2012-2022 period for
provisions repealing the CLASS program and both would reduce
direct spending by $9 million over the 2012-2022 period as a
result of rescinding appropriated funding for the National
Clearinghouse for Long-Term Care Information. However, H.R.
1173 as ordered reported by the House Committee on Energy and
Commerce would replace those funds with funding subject to
future appropriation actions thus increasing spending subject
to future appropriation by $9 million over the 2012-2022
period.
Estimate prepared by: Federal Costs: Julia Mitchell; Impact
on State, Local, and Tribal Governments: Lisa Ramirez-Branum;
Impact on the Private Sector: Michael Levine.
Estimate approved by: Holly Harvey, Deputy Assistant
Director for Budget Analysis.
D. MACROECONOMIC IMPACT ANALYSIS
In compliance with clause 3(h)(2) of rule XIII of the Rules
of the House of Representatives, the following statement is
made by the Joint Committee on Taxation with respect to the
provisions of the bill amending the Internal Revenue Code of
1986: the effects of the bill on economic activity are so small
as to be incalculable within the context of a model of the
aggregate economy.
V. Other Matters To Be Discussed Under the Rules of the House
A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that it was as a result of the
Committee's review of the provisions of H.R. 1173 that the
Committee concluded that it is appropriate to report the bill
favorably to the House of Representatives with the
recommendation that the bill do pass.
B. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizing funding is required.
C. INFORMATION RELATING TO UNFUNDED MANDATES
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the revenue provision of
the bill does not contain Federal mandates on the private
sector. The Committee has determined that the revenue provision
of the bill does not impose a Federal intergovernmental mandate
on State, local, or tribal governments.
D. APPLICABILITY OF HOUSE RULE XXI 5(B)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the provisions of the bill, and states that
the provisions of the bill do not involve any Federal income
tax rate increases within the meaning of the rule.
E. TAX COMPLEXITY ANALYSIS
Section 4022(b) of the Internal Revenue Service Reform and
Restructuring Act of 1998 (the ``IRS Reform Act'') requires the
staff of the Joint Committee on Taxation (in consultation with
the Internal Revenue Service and the Treasury Department) to
provide a tax complexity analysis. The complexity analysis is
required for all legislation reported by the Senate Committee
on Finance, the House Committee on Ways and Means, or any
committee of conference if the legislation includes a provision
that directly or indirectly amends the Internal Revenue Code
and has widespread applicability to individuals or small
businesses.
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
House of Representatives, the staff of the Joint Committee on
Taxation has determined that a complexity analysis is not
required under section 4022(b) of the IRS Reform Act because
the bill contains no provisions that amend the Code and that
have ``widespread applicability'' to individuals or small
businesses, within the meaning of the rule.
F. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND LIMITED TARIFF
BENEFITS
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill, and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
VI. Changes in Existing Law Made by the Bill, As Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
TITLE XXXII OF THE PUBLIC HEALTH SERVICE ACT
[TITLE XXXII--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS
[SEC. 3201. PURPOSE.
[The purpose of this title is to establish a national
voluntary insurance program for purchasing community living
assistance services and supports in order to--
[(1) provide individuals with functional limitations
with tools that will allow them to maintain their
personal and financial independence and live in the
community through a new financing strategy for
community living assistance services and supports;
[(2) establish an infrastructure that will help
address the Nation's community living assistance
services and supports needs;
[(3) alleviate burdens on family caregivers; and
[(4) address institutional bias by providing a
financing mechanism that supports personal choice and
independence to live in the community.
[SEC. 3202. DEFINITIONS.
[In this title:
[(1) Active enrollee.--The term ``active enrollee''
means an individual who is enrolled in the CLASS
program in accordance with section 3204 and who has
paid any premiums due to maintain such enrollment.
[(2) Actively employed.--The term ``actively
employed'' means an individual who--
[(A) is reporting for work at the
individual's usual place of employment or at
another location to which the individual is
required to travel because of the individual's
employment (or in the case of an individual who
is a member of the uniformed services, is on
active duty and is physically able to perform
the duties of the individual's position); and
[(B) is able to perform all the usual and
customary duties of the individual's employment
on the individual's regular work schedule.
[(3) Activities of daily living.--The term
``activities of daily living'' means each of the
following activities specified in section
7702B(c)(2)(B) of the Internal Revenue Code of 1986:
[(A) Eating.
[(B) Toileting.
[(C) Transferring.
[(D) Bathing.
[(E) Dressing.
[(F) Continence.
[(4) CLASS program.--The term ``CLASS program'' means
the program established under this title.
[(5) Eligibility assessment system.--The term
``Eligibility Assessment System'' means the entity
established by the Secretary under section 3205(a)(2)
to make functional eligibility determinations for the
CLASS program.
[(6) Eligible beneficiary.--
[(A) In general.--The term ``eligible
beneficiary'' means any individual who is an
active enrollee in the CLASS program and, as of
the date described in subparagraph (B)--
[(i) has paid premiums for enrollment
in such program for at least 60 months;
[(ii) has earned, with respect to at
least 3 calendar years that occur
during the first 60 months for which
the individual has paid premiums for
enrollment in the program, at least an
amount equal to the amount of wages and
self-employment income which an
individual must have in order to be
credited with a quarter of coverage
under section 213(d) of the Social
Security Act for the year; and
[(iii) has paid premiums for
enrollment in such program for at least
24 consecutive months, if a lapse in
premium payments of more than 3 months
has occurred during the period that
begins on the date of the individual's
enrollment and ends on the date of such
determination.
[(B) Date described.--For purposes of
subparagraph (A), the date described in this
subparagraph is the date on which the
individual is determined to have a functional
limitation described in section 3203(a)(1)(C)
that is expected to last for a continuous
period of more than 90 days.
[(C) Regulations.--The Secretary shall
promulgate regulations specifying exceptions to
the minimum earnings requirements under
subparagraph (A)(ii) for purposes of being
considered an eligible beneficiary for certain
populations.
[(7) Hospital; nursing facility; intermediate care
facility for the mentally retarded; institution for
mental diseases.--The terms ``hospital'', ``nursing
facility'', ``intermediate care facility for the
mentally retarded'', and ``institution for mental
diseases'' have the meanings given such terms for
purposes of Medicaid.
[(8) CLASS independence advisory council.--The term
``CLASS Independence Advisory Council'' or ``Council''
means the Advisory Council established under section
3207 to advise the Secretary.
[(9) CLASS independence benefit plan.--The term
``CLASS Independence Benefit Plan'' means the benefit
plan developed and designated by the Secretary in
accordance with section 3203.
[(10) CLASS independence fund.--The term ``CLASS
Independence Fund'' or ``Fund'' means the fund
established under section 3206.
[(11) Medicaid.--The term ``Medicaid'' means the
program established under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.).
[(12) Poverty line.--The term ``poverty line'' has
the meaning given that term in section 2110(c)(5) of
the Social Security Act (42 U.S.C. 1397jj(c)(5)).
[(13) Protection and advocacy system.--The term
``Protection and Advocacy System'' means the system for
each State established under section 143 of the
Developmental Disabilities Assistance and Bill of
Rights Act of 2000 (42 U.S.C. 15043).
[SEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN.
[(a) Process for Development.--
[(1) In general.--The Secretary, in consultation with
appropriate actuaries and other experts, shall develop
at least 3 actuarially sound benefit plans as
alternatives for consideration for designation by the
Secretary as the CLASS Independence Benefit Plan under
which eligible beneficiaries shall receive benefits
under this title. Each of the plan alternatives
developed shall be designed to provide eligible
beneficiaries with the benefits described in section
3205 consistent with the following requirements:
[(A) Premiums.--
[(i) In general.--Beginning with the
first year of the CLASS program, and
for each year thereafter, subject to
clauses (ii) and (iii), the Secretary
shall establish all premiums to be paid
by enrollees for the year based on an
actuarial analysis of the 75-year costs
of the program that ensures solvency
throughout such 75-year period.
[(ii) Nominal premium for poorest
individuals and full-time students.--
[(I) In general.--The monthly
premium for enrollment in the
CLASS program shall not exceed
the applicable dollar amount
per month determined under
subclause (II) for--
[(aa) any individual
whose income does not
exceed the poverty
line; and
[(bb) any individual
who has not attained
age 22, and is actively
employed during any
period in which the
individual is a full-
time student (as
determined by the
Secretary).
[(II) Applicable dollar
amount.--The applicable dollar
amount described in this
subclause is the amount equal
to $5, increased by the
percentage increase in the
consumer price index for all
urban consumers (U.S. city
average) for each year
occurring after 2009 and before
such year.
[(iii) Class independence fund
reserves.--At such time as the CLASS
program has been in operation for 10
years, the Secretary shall establish
all premiums to be paid by enrollees
for the year based on an actuarial
analysis that accumulated reserves in
the CLASS Independence Fund would not
decrease in that year. At such time as
the Secretary determines the CLASS
program demonstrates a sustained
ability to finance expected yearly
expenses with expected yearly premiums
and interest credited to the CLASS
Independence Fund, the Secretary may
decrease the required amount of CLASS
Independence Fund reserves.
[(B) Vesting period.--A 5-year vesting period
for eligibility for benefits.
[(C) Benefit triggers.--A benefit trigger for
provision of benefits that requires a
determination that an individual has a
functional limitation, as certified by a
licensed health care practitioner, described in
any of the following clauses that is expected
to last for a continuous period of more than 90
days:
[(i) The individual is determined to
be unable to perform at least the
minimum number (which may be 2 or 3) of
activities of daily living as are
required under the plan for the
provision of benefits without
substantial assistance (as defined by
the Secretary) from another individual.
[(ii) The individual requires
substantial supervision to protect the
individual from threats to health and
safety due to substantial cognitive
impairment.
[(iii) The individual has a level of
functional limitation similar (as
determined under regulations prescribed
by the Secretary) to the level of
functional limitation described in
clause (i) or (ii).
[(D) Cash benefit.--Payment of a cash benefit
that satisfies the following requirements:
[(i) Minimum required amount.--The
benefit amount provides an eligible
beneficiary with not less than an
average of $50 per day (as determined
based on the reasonably expected
distribution of beneficiaries receiving
benefits at various benefit levels).
[(ii) Amount scaled to functional
ability.--The benefit amount is varied
based on a scale of functional ability,
with not less than 2, and not more than
6, benefit level amounts.
[(iii) Daily or weekly.--The benefit
is paid on a daily or weekly basis.
[(iv) No lifetime or aggregate
limit.--The benefit is not subject to
any lifetime or aggregate limit.
[(2) Review and recommendation by the class
independence advisory council.--The CLASS Independence
Advisory Council shall--
[(A) evaluate the alternative benefit plans
developed under paragraph (1); and
[(B) recommend for designation as the CLASS
Independence Benefit Plan for offering to the
public the plan that the Council determines
best balances price and benefits to meet
enrollees' needs in an actuarially sound
manner, while optimizing the probability of the
long-term sustainability of the CLASS program.
[(3) Designation by the secretary.--Not later than
October 1, 2012, the Secretary, taking into
consideration the recommendation of the CLASS
Independence Advisory Council under paragraph (2)(B),
shall designate a benefit plan as the CLASS
Independence Benefit Plan. The Secretary shall publish
such designation, along with details of the plan and
the reasons for the selection by the Secretary, in a
final rule that allows for a period of public comment.
[(b) Additional Premium Requirements.--
[(1) Adjustment of premiums.--
[(A) In general.--Except as provided in
subparagraphs (B), (C), (D), and (E), the
amount of the monthly premium determined for an
individual upon such individual's enrollment in
the CLASS program shall remain the same for as
long as the individual is an active enrollee in
the program.
[(B) Recalculated premium if required for
program solvency.--
[(i) In general.--Subject to clause
(ii), if the Secretary determines,
based on the most recent report of the
Board of Trustees of the CLASS
Independence Fund, the advice of the
CLASS Independence Advisory Council,
and the annual report of the Inspector
General of the Department of Health and
Human Services, and waste, fraud, and
abuse, or such other information as the
Secretary determines appropriate, that
the monthly premiums and income to the
CLASS Independence Fund for a year are
projected to be insufficient with
respect to the 20-year period that
begins with that year, the Secretary
shall adjust the monthly premiums for
individuals enrolled in the CLASS
program as necessary (but maintaining a
nominal premium for enrollees whose
income is below the poverty line or who
are full-time students actively
employed).
[(ii) Exemption from increase.--Any
increase in a monthly premium imposed
as result of a determination described
in clause (i) shall not apply with
respect to the monthly premium of any
active enrollee who--
[(I) has attained age 65;
[(II) has paid premiums for
enrollment in the program for
at least 20 years; and
[(III) is not actively
employed.
[(C) Recalculated premium if reenrollment
after more than a 3-month lapse.--
[(i) In general.--The reenrollment of
an individual after a 90-day period
during which the individual failed to
pay the monthly premium required to
maintain the individual's enrollment in
the CLASS program shall be treated as
an initial enrollment for purposes of
age-adjusting the premium for
reenrollment in the program.
[(ii) Credit for prior months if
reenrolled within 5 years.--An
individual who reenrolls in the CLASS
program after such a 90-day period and
before the end of the 5-year period
that begins with the first month for
which the individual failed to pay the
monthly premium required to maintain
the individual's enrollment in the
program shall be--
[(I) credited with any months
of paid premiums that accrued
prior to the individual's lapse
in enrollment; and
[(II) notwithstanding the
total amount of any such
credited months, required to
satisfy section 3202(6)(A)(ii)
before being eligible to
receive benefits.
[(D) No longer status as a full-time
student.--An individual subject to a nominal
premium on the basis of being described in
subsection (a)(1)(A)(ii)(I)(bb) who ceases to
be described in that subsection, beginning with
the first month following the month in which
the individual ceases to be so described, shall
be subject to the same monthly premium as the
monthly premium that applies to an individual
of the same age who first enrolls in the
program under the most similar circumstances as
the individual (such as the first year of
eligibility for enrollment in the program or in
a subsequent year).
[(E) Penalty for reenollment after 5-year
lapse.--In the case of an individual who
reenrolls in the CLASS program after the end of
the 5-year period described in subparagraph
(C)(ii), the monthly premium required for the
individual shall be the age-adjusted premium
that would be applicable to an initially
enrolling individual who is the same age as the
reenrolling individual, increased by the
greater of--
[(i) an amount that the Secretary
determines is actuarially sound for
each month that occurs during the
period that begins with the first month
for which the individual failed to pay
the monthly premium required to
maintain the individual's enrollment in
the CLASS program and ends with the
month preceding the month in which the
reenollment is effective; or
[(ii) 1 percent of the applicable
age-adjusted premium for each such
month occurring in such period.
[(2) Administrative expenses.--In determining the
monthly premiums for the CLASS program the Secretary
may factor in costs for administering the program, not
to exceed for any year in which the program is in
effect under this title, an amount equal to 3 percent
of all premiums paid during the year.
[(3) No underwriting requirements.--No underwriting
(other than on the basis of age in accordance with
subparagraphs (D) and (E) of paragraph (1)) shall be
used to--
[(A) determine the monthly premium for
enrollment in the CLASS program; or
[(B) prevent an individual from enrolling in
the program.
[(c) Self-attestation and Verification of Income.--The
Secretary shall establish procedures to--
[(1) permit an individual who is eligible for the
nominal premium required under subsection (a)(1)(A)(ii)
to self-attest that their income does not exceed the
poverty line or that their status as a full-time
student who is actively employed;
[(2) verify, using procedures similar to the
procedures used by the Commissioner of Social Security
under section 1631(e)(1)(B)(ii) of the Social Security
Act and consistent with the requirements applicable to
the conveyance of data and information under section
1942 of such Act, the validity of such self-
attestation; and
[(3) require an individual to confirm, on at least an
annual basis, that their income does not exceed the
poverty line or that they continue to maintain such
status.
[SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIREMENTS.
[(a) Automatic Enrollment.--
[(1) In general.--Subject to paragraph (2), the
Secretary, in coordination with the Secretary of the
Treasury, shall establish procedures under which each
individual described in subsection (c) may be
automatically enrolled in the CLASS program by an
employer of such individual in the same manner as an
employer may elect to automatically enroll employees in
a plan under section 401(k), 403(b), or 457 of the
Internal Revenue Code of 1986.
[(2) Alternative enrollment procedures.--The
procedures established under paragraph (1) shall
provide for an alternative enrollment process for an
individual described in subsection (c) in the case of
such an individual--
[(A) who is self-employed;
[(B) who has more than 1 employer; or
[(C) whose employer does not elect to
participate in the automatic enrollment process
established by the Secretary.
[(3) Administration.--
[(A) In general.--The Secretary and the
Secretary of the Treasury shall, by regulation,
establish procedures to ensure that an
individual is not automatically enrolled in the
CLASS program by more than 1 employer.
[(B) Form.--Enrollment in the CLASS program
shall be made in such manner as the Secretary
may prescribe in order to ensure ease of
administration.
[(b) Election to Opt-Out.--An individual described in
subsection (c) may elect to waive enrollment in the CLASS
program at any time in such form and manner as the Secretary
and the Secretary of the Treasury shall prescribe.
[(c) Individual Described.--For purposes of enrolling in the
CLASS program, an individual described in this paragraph is an
individual--
[(1) who has attained age 18;
[(2) who--
[(A) receives wages or income on which there
is imposed a tax under section 3101(a) or
3201(a) of the Internal Revenue Code of 1986;
or
[(B) derives self-employment income on which
there is imposed a tax under section 1401(a) of
the Internal Revenue Code of 1986;
[(3) who is actively employed; and
[(4) who is not--
[(A) a patient in a hospital or nursing
facility, an intermediate care facility for the
mentally retarded, or an institution for mental
diseases and receiving medical assistance under
Medicaid; or
[(B) confined in a jail, prison, other penal
institution or correctional facility, or by
court order pursuant to conviction of a
criminal offense or in connection with a
verdict or finding described in section
202(x)(1)(A)(ii) of the Social Security Act (42
U.S.C. 402(x)(1)(A)(ii)).
[(d) Rule of Construction.--Nothing in this title shall be
construed as requiring an active enrollee to continue to
satisfy subparagraph (A) or (B) of subsection (c)(2) in order
to maintain enrollment in the CLASS program.
[(e) Payment.--
[(1) Payroll deduction.--An amount equal to the
monthly premium for the enrollment in the CLASS program
of an individual shall be deducted from the wages or
self-employment income of such individual in accordance
with such procedures as the Secretary, in coordination
with the Secretary of the Treasury, shall establish for
employers who elect to deduct and withhold such
premiums on behalf of enrolled employees.
[(2) Alternative payment mechanism.--The Secretary,
in coordination with the Secretary of the Treasury,
shall establish alternative procedures for the payment
of monthly premiums by an individual enrolled in the
CLASS program--
[(A) who does not have an employer who elects
to deduct and withhold premiums in accordance
with paragraph (1); or
[(B) who does not earn wages or derive self-
employment income.
[(f) Transfer of Premiums Collected.--
[(1) In general.--During each calendar year the
Secretary of the Treasury shall deposit into the CLASS
Independence Fund a total amount equal, in the
aggregate, to 100 percent of the premiums collected
during that year.
[(2) Transfers based on estimates.--The amount
deposited pursuant to paragraph (1) shall be
transferred in at least monthly payments to the CLASS
Independence Fund on the basis of estimates by the
Secretary and certified to the Secretary of the
Treasury of the amounts collected in accordance with
subparagraphs (A) and (B) of paragraph (5). Proper
adjustments shall be made in amounts subsequently
transferred to the Fund to the extent prior estimates
were in excess of, or were less than, actual amounts
collected.
[(g) Other Enrollment and Disenrollment Opportunities.--The
Secretary, in coordination with the Secretary of the Treasury,
shall establish procedures under which--
[(1) an individual who, in the year of the
individual's initial eligibility to enroll in the CLASS
program, has not enrolled in the program, is eligible
to elect to enroll in the program, in such form and
manner as the Secretaries shall establish, only during
an open enrollment period established by the
Secretaries that is specific to the individual and that
may not occur more frequently than biennially after the
date on which the individual first elected to waive
enrollment in the program; and
[(2) an individual shall only be permitted to
disenroll from the program (other than for nonpayment
of premiums) during an annual disenrollment period
established by the Secretaries and in such form and
manner as the Secretaries shall establish.
[SEC. 3205. BENEFITS.
[(a) Determination of Eligibility.--
[(1) Application for receipt of benefits.--The
Secretary shall establish procedures under which an
active enrollee shall apply for receipt of benefits
under the CLASS Independence Benefit Plan.
[(2) Eligibility assessments.--
[(A) In general.--Not later than January 1,
2012, the Secretary shall--
[(i) establish an Eligibility
Assessment System (other than a service
with which the Commissioner of Social
Security has entered into an agreement,
with respect to any State, to make
disability determinations for purposes
of title II or XVI of the Social
Security Act) to provide for
eligibility assessments of active
enrollees who apply for receipt of
benefits;
[(ii) enter into an agreement with
the Protection and Advocacy System for
each State to provide advocacy services
in accordance with subsection (d); and
[(iii) enter into an agreement with
public and private entities to provide
advice and assistance counseling in
accordance with subsection (e).
[(B) Regulations.--The Secretary shall
promulgate regulations to develop an expedited
nationally equitable eligibility determination
process, as certified by a licensed health care
practitioner, an appeals process, and a
redetermination process, as certified by a
licensed health care practitioner, including
whether an active enrollee is eligible for a
cash benefit under the program and if so, the
amount of the cash benefit (in accordance the
sliding scale established under the plan).
[(C) Presumptive eligibility for certain
institutionalized enrollees planning to
discharge.--An active enrollee shall be deemed
presumptively eligible if the enrollee--
[(i) has applied for, and attests is
eligible for, the maximum cash benefit
available under the sliding scale
established under the CLASS
Independence Benefit Plan;
[(ii) is a patient in a hospital (but
only if the hospitalization is for
long-term care), nursing facility,
intermediate care facility for the
mentally retarded, or an institution
for mental diseases; and
[(iii) is in the process of, or about
to begin the process of, planning to
discharge from the hospital, facility,
or institution, or within 60 days from
the date of discharge from the
hospital, facility, or institution.
[(D) Appeals.--The Secretary shall establish
procedures under which an applicant for
benefits under the CLASS Independence Benefit
Plan shall be guaranteed the right to appeal an
adverse determination.
[(b) Benefits.--An eligible beneficiary shall receive the
following benefits under the CLASS Independence Benefit Plan:
[(1) Cash benefit.--A cash benefit established by the
Secretary in accordance with the requirements of
section 3203(a)(1)(D) that--
[(A) the first year in which beneficiaries
receive the benefits under the plan, is not
less than the average dollar amount specified
in clause (i) of such section; and
[(B) for any subsequent year, is not less
than the average per day dollar limit
applicable under this subparagraph for the
preceding year, increased by the percentage
increase in the consumer price index for all
urban consumers (U.S. city average) over the
previous year.
[(2) Advocacy services.--Advocacy services in
accordance with subsection (d).
[(3) Advice and assistance counseling.--Advice and
assistance counseling in accordance with subsection
(e).
[(4) Administrative expenses.--Advocacy services and
advise and assistance counseling services under
paragraphs (2) and (3) of this subsection shall be
included as administrative expenses under section
3203(b)(3).
[(c) Payment of Benefits.--
[(1) Life independence account.--
[(A) In general.--The Secretary shall
establish procedures for administering the
provision of benefits to eligible beneficiaries
under the CLASS Independence Benefit Plan,
including the payment of the cash benefit for
the beneficiary into a Life Independence
Account established by the Secretary on behalf
of each eligible beneficiary.
[(B) Use of cash benefits.--Cash benefits
paid into a Life Independence Account of an
eligible beneficiary shall be used to purchase
nonmedical services and supports that the
beneficiary needs to maintain his or her
independence at home or in another residential
setting of their choice in the community,
including (but not limited to) home
modifications, assistive technology, accessible
transportation, homemaker services, respite
care, personal assistance services, home care
aides, and nursing support. Nothing in the
preceding sentence shall prevent an eligible
beneficiary from using cash benefits paid into
a Life Independence Account for obtaining
assistance with decision making concerning
medical care, including the right to accept or
refuse medical or surgical treatment and the
right to formulate advance directives or other
written instructions recognized under State
law, such as a living will or durable power of
attorney for health care, in the case that an
injury or illness causes the individual to be
unable to make health care decisions.
[(C) Electronic management of funds.--The
Secretary shall establish procedures for--
[(i) crediting an account established
on behalf of a beneficiary with the
beneficiary's cash daily benefit;
[(ii) allowing the beneficiary to
access such account through debit
cards; and
[(iii) accounting for withdrawals by
the beneficiary from such account.
[(D) Primary payor rules for beneficiaries
who are enrolled in medicaid.--In the case of
an eligible beneficiary who is enrolled in
Medicaid, the following payment rules shall
apply:
[(i) Institutionalized beneficiary.--
If the beneficiary is a patient in a
hospital, nursing facility,
intermediate care facility for the
mentally retarded, or an institution
for mental diseases, the beneficiary
shall retain an amount equal to 5
percent of the beneficiary's daily or
weekly cash benefit (as applicable)
(which shall be in addition to the
amount of the beneficiary's personal
needs allowance provided under
Medicaid), and the remainder of such
benefit shall be applied toward the
facility's cost of providing the
beneficiary's care, and Medicaid shall
provide secondary coverage for such
care.
[(ii) Beneficiaries receiving home
and community-based services.--
[(I) 50 percent of benefit
retained by beneficiary.--
Subject to subclause (II), if a
beneficiary is receiving
medical assistance under
Medicaid for home and community
based services, the beneficiary
shall retain an amount equal to
50 percent of the beneficiary's
daily or weekly cash benefit
(as applicable), and the
remainder of the daily or
weekly cash benefit shall be
applied toward the cost to the
State of providing such
assistance (and shall not be
used to claim Federal matching
funds under Medicaid), and
Medicaid shall provide
secondary coverage for the
remainder of any costs incurred
in providing such assistance.
[(II) Requirement for state
offset.--A State shall be paid
the remainder of a
beneficiary's daily or weekly
cash benefit under subclause
(I) only if the State home and
community-based waiver under
section 1115 of the Social
Security Act (42 U.S.C. 1315)
or subsection (c) or (d) of
section 1915 of such Act (42
U.S.C. 1396n), or the State
plan amendment under subsection
(i) of such section does not
include a waiver of the
requirements of section
1902(a)(1) of the Social
Security Act (relating to
statewideness) or of section
1902(a)(10)(B) of such Act
(relating to comparability) and
the State offers at a minimum
case management services,
personal care services,
habilitation services, and
respite care under such a
waiver or State plan amendment.
[(III) Definition of home and
community-based services.--In
this clause, the term ``home
and community-based services''
means any services which may be
offered under a home and
community-based waiver
authorized for a State under
section 1115 of the Social
Security Act (42 U.S.C. 1315)
or subsection (c) or (d) of
section 1915 of such Act (42
U.S.C. 1396n) or under a State
plan amendment under subsection
(i) of such section.
[(iii) Beneficiaries enrolled in
programs of all-inclusive care for the
elderly (pace).--
[(I) In general.--Subject to
subclause (II), if a
beneficiary is receiving
medical assistance under
Medicaid for PACE program
services under section 1934 of
the Social Security Act (42
U.S.C. 1396u-4), the
beneficiary shall retain an
amount equal to 50 percent of
the beneficiary's daily or
weekly cash benefit (as
applicable), and the remainder
of the daily or weekly cash
benefit shall be applied toward
the cost to the State of
providing such assistance (and
shall not be used to claim
Federal matching funds under
Medicaid), and Medicaid shall
provide secondary coverage for
the remainder of any costs
incurred in providing such
assistance.
[(II) Institutionalized
recipients of pace program
services.--If a beneficiary
receiving assistance under
Medicaid for PACE program
services is a patient in a
hospital, nursing facility,
intermediate care facility for
the mentally retarded, or an
institution for mental
diseases, the beneficiary shall
be treated as in
institutionalized beneficiary
under clause (i).
[(2) Authorized representatives.--
[(A) In general.--The Secretary shall
establish procedures to allow access to a
beneficiary's cash benefits by an authorized
representative of the eligible beneficiary on
whose behalf such benefits are paid.
[(B) Quality assurance and protection against
fraud and abuse.--The procedures established
under subparagraph (A) shall ensure that
authorized representatives of eligible
beneficiaries comply with standards of conduct
established by the Secretary, including
standards requiring that such representatives
provide quality services on behalf of such
beneficiaries, do not have conflicts of
interest, and do not misuse benefits paid on
behalf of such beneficiaries or otherwise
engage in fraud or abuse.
[(3) Commencement of benefits.--Benefits shall be
paid to, or on behalf of, an eligible beneficiary
beginning with the first month in which an application
for such benefits is approved.
[(4) Rollover option for lump-sum payment.--An
eligible beneficiary may elect to--
[(A) defer payment of their daily or weekly
benefit and to rollover any such deferred
benefits from month-to-month, but not from
year-to-year; and
[(B) receive a lump-sum payment of such
deferred benefits in an amount that may not
exceed the lesser of--
[(i) the total amount of the accrued
deferred benefits; or
[(ii) the applicable annual benefit.
[(5) Period for determination of annual benefits.--
[(A) In general.--The applicable period for
determining with respect to an eligible
beneficiary the applicable annual benefit and
the amount of any accrued deferred benefits is
the 12-month period that commences with the
first month in which the beneficiary began to
receive such benefits, and each 12-month period
thereafter.
[(B) Inclusion of increased benefits.--The
Secretary shall establish procedures under
which cash benefits paid to an eligible
beneficiary that increase or decrease as a
result of a change in the functional status of
the beneficiary before the end of a 12-month
benefit period shall be included in the
determination of the applicable annual benefit
paid to the eligible beneficiary.
[(C) Recoupment of unpaid, accrued
benefits.--
[(i) In general.--The Secretary, in
coordination with the Secretary of the
Treasury, shall recoup any accrued
benefits in the event of--
[(I) the death of a
beneficiary; or
[(II) the failure of a
beneficiary to elect under
paragraph (4)(B) to receive
such benefits as a lump-sum
payment before the end of the
12-month period in which such
benefits accrued.
[(ii) Payment into class independence
fund.--Any benefits recouped in
accordance with clause (i) shall be
paid into the CLASS Independence Fund
and used in accordance with section
3206.
[(6) Requirement to recertify eligibility for receipt
of benefits.--An eligible beneficiary shall
periodically, as determined by the Secretary--
[(A) recertify by submission of medical
evidence the beneficiary's continued
eligibility for receipt of benefits; and
[(B) submit records of expenditures
attributable to the aggregate cash benefit
received by the beneficiary during the
preceding year.
[(7) Supplement, not supplant other health care
benefits.--Subject to the Medicaid payment rules under
paragraph (1)(D), benefits received by an eligible
beneficiary shall supplement, but not supplant, other
health care benefits for which the beneficiary is
eligible under Medicaid or any other Federally funded
program that provides health care benefits or
assistance.
[(d) Advocacy Services.--An agreement entered into under
subsection (a)(2)(A)(ii) shall require the Protection and
Advocacy System for the State to--
[(1) assign, as needed, an advocacy counselor to each
eligible beneficiary that is covered by such agreement
and who shall provide an eligible beneficiary with--
[(A) information regarding how to access the
appeals process established for the program;
[(B) assistance with respect to the annual
recertification and notification required under
subsection (c)(6); and
[(C) such other assistance with obtaining
services as the Secretary, by regulation, shall
require; and
[(2) ensure that the System and such counselors
comply with the requirements of subsection (h).
[(e) Advice and Assistance Counseling.--An agreement entered
into under subsection (a)(2)(A)(iii) shall require the entity
to assign, as requested by an eligible beneficiary that is
covered by such agreement, an advice and assistance counselor
who shall provide an eligible beneficiary with information
regarding--
[(1) accessing and coordinating long-term services
and supports in the most integrated setting;
[(2) possible eligibility for other benefits and
services;
[(3) development of a service and support plan;
[(4) information about programs established under the
Assistive Technology Act of 1998 and the services
offered under such programs;
[(5) available assistance with decision making
concerning medical care, including the right to accept
or refuse medical or surgical treatment and the right
to formulate advance directives or other written
instructions recognized under State law, such as a
living will or durable power of attorney for health
care, in the case that an injury or illness causes the
individual to be unable to make health care decisions;
and
[(6) such other services as the Secretary, by
regulation, may require.
[(f) No Effect on Eligibility for Other Benefits.--Benefits
paid to an eligible beneficiary under the CLASS program shall
be disregarded for purposes of determining or continuing the
beneficiary's eligibility for receipt of benefits under any
other Federal, State, or locally funded assistance program,
including benefits paid under titles II, XVI, XVIII, XIX, or
XXI of the Social Security Act (42 U.S.C. 401 et seq., 1381 et
seq., 1395 et seq., 1396 et seq., 1397aa et seq.), under the
laws administered by the Secretary of Veterans Affairs, under
low-income housing assistance programs, or under the
supplemental nutrition assistance program established under the
Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.).
[(g) Rule of Construction.--Nothing in this title shall be
construed as prohibiting benefits paid under the CLASS
Independence Benefit Plan from being used to compensate a
family caregiver for providing community living assistance
services and supports to an eligible beneficiary.
[(h) Protection Against Conflict of Interests.--The Secretary
shall establish procedures to ensure that the Eligibility
Assessment System, the Protection and Advocacy System for a
State, advocacy counselors for eligible beneficiaries, and any
other entities that provide services to active enrollees and
eligible beneficiaries under the CLASS program comply with the
following:
[(1) If the entity provides counseling or planning
services, such services are provided in a manner that
fosters the best interests of the active enrollee or
beneficiary.
[(2) The entity has established operating procedures
that are designed to avoid or minimize conflicts of
interest between the entity and an active enrollee or
beneficiary.
[(3) The entity provides information about all
services and options available to the active enrollee
or beneficiary, to the best of its knowledge, including
services available through other entities or providers.
[(4) The entity assists the active enrollee or
beneficiary to access desired services, regardless of
the provider.
[(5) The entity reports the number of active
enrollees and beneficiaries provided with assistance by
age, disability, and whether such enrollees and
beneficiaries received services from the entity or
another entity.
[(6) If the entity provides counseling or planning
services, the entity ensures that an active enrollee or
beneficiary is informed of any financial interest that
the entity has in a service provider.
[(7) The entity provides an active enrollee or
beneficiary with a list of available service providers
that can meet the needs of the active enrollee or
beneficiary.
[SEC. 3206. CLASS INDEPENDENCE FUND.
[(a) Establishment of CLASS Independence Fund.--There is
established in the Treasury of the United States a trust fund
to be known as the ``CLASS Independence Fund''. The Secretary
of the Treasury shall serve as Managing Trustee of such Fund.
The Fund shall consist of all amounts derived from payments
into the Fund under sections 3204(f) and 3205(c)(5)(C)(ii), and
remaining after investment of such amounts under subsection
(b), including additional amounts derived as income from such
investments. The amounts held in the Fund are appropriated and
shall remain available without fiscal year limitation--
[(1) to be held for investment on behalf of
individuals enrolled in the CLASS program;
[(2) to pay the administrative expenses related to
the Fund and to investment under subsection (b); and
[(3) to pay cash benefits to eligible beneficiaries
under the CLASS Independence Benefit Plan.
[(b) Investment of Fund Balance.--The Secretary of the
Treasury shall invest and manage the CLASS Independence Fund in
the same manner, and to the same extent, as the Federal
Supplementary Medical Insurance Trust Fund may be invested and
managed under subsections (c), (d), and (e) of section 1841(d)
of the Social Security Act (42 U.S.C. 1395t).
[(c) Board of Trustees.--
[(1) In general.--With respect to the CLASS
Independence Fund, there is hereby created a body to be
known as the Board of Trustees of the CLASS
Independence Fund (hereinafter in this section referred
to as the ``Board of Trustees'') composed of the
Secretary of the Treasury, the Secretary of Labor, and
the Secretary of Health and Human Services, all ex
officio, and of two members of the public (both of whom
may not be from the same political party), who shall be
nominated by the President for a term of 4 years and
subject to confirmation by the Senate. A member of the
Board of Trustees serving as a member of the public and
nominated and confirmed to fill a vacancy occurring
during a term shall be nominated and confirmed only for
the remainder of such term. An individual nominated and
confirmed as a member of the public may serve in such
position after the expiration of such member's term
until the earlier of the time at which the member's
successor takes office or the time at which a report of
the Board is first issued under paragraph (2) after the
expiration of the member's term. The Secretary of the
Treasury shall be the Managing Trustee of the Board of
Trustees. The Board of Trustees shall meet not less
frequently than once each calendar year. A person
serving on the Board of Trustees shall not be
considered to be a fiduciary and shall not be
personally liable for actions taken in such capacity
with respect to the Trust Fund.
[(2) Duties.--
[(A) In general.--It shall be the duty of the
Board of Trustees to do the following:
[(i) Hold the CLASS Independence
Fund.
[(ii) Report to the Congress not
later than the first day of April of
each year on the operation and status
of the CLASS Independence Fund during
the preceding fiscal year and on its
expected operation and status during
the current fiscal year and the next 2
fiscal years.
[(iii) Report immediately to the
Congress whenever the Board is of the
opinion that the amount of the CLASS
Independence Fund is not actuarially
sound in regards to the projection
under section 3203(b)(1)(B)(i).
[(iv) Review the general policies
followed in managing the CLASS
Independence Fund, and recommend
changes in such policies, including
necessary changes in the provisions of
law which govern the way in which the
CLASS Independence Fund is to be
managed.
[(B) Report.--The report provided for in
subparagraph (A)(ii) shall--
[(i) include--
[(I) a statement of the
assets of, and the
disbursements made from, the
CLASS Independence Fund during
the preceding fiscal year;
[(II) an estimate of the
expected income to, and
disbursements to be made from,
the CLASS Independence Fund
during the current fiscal year
and each of the next 2 fiscal
years;
[(III) a statement of the
actuarial status of the CLASS
Independence Fund for the
current fiscal year, each of
the next 2 fiscal years, and as
projected over the 75-year
period beginning with the
current fiscal year; and
[(IV) an actuarial opinion by
the Chief Actuary of the
Centers for Medicare & Medicaid
Services certifying that the
techniques and methodologies
used are generally accepted
within the actuarial profession
and that the assumptions and
cost estimates used are
reasonable; and
[(ii) be printed as a House document
of the session of the Congress to which
the report is made.
[(C) Recommendations.--If the Board of
Trustees determines that enrollment trends and
expected future benefit claims on the CLASS
Independence Fund are not actuarially sound in
regards to the projection under section
3203(b)(1)(B)(i) and are unlikely to be
resolved with reasonable premium increases or
through other means, the Board of Trustees
shall include in the report provided for in
subparagraph (A)(ii) recommendations for such
legislative action as the Board of Trustees
determine to be appropriate, including whether
to adjust monthly premiums or impose a
temporary moratorium on new enrollments.
[SEC. 3207. CLASS INDEPENDENCE ADVISORY COUNCIL.
[(a) Establishment.--There is hereby created an Advisory
Committee to be known as the ``CLASS Independence Advisory
Council''.
[(b) Membership.--
[(1) In general.--The CLASS Independence Advisory
Council shall be composed of not more than 15
individuals, not otherwise in the employ of the United
States--
[(A) who shall be appointed by the President
without regard to the civil service laws and
regulations; and
[(B) a majority of whom shall be
representatives of individuals who participate
or are likely to participate in the CLASS
program, and shall include representatives of
older and younger workers, individuals with
disabilities, family caregivers of individuals
who require services and supports to maintain
their independence at home or in another
residential setting of their choice in the
community, individuals with expertise in long-
term care or disability insurance, actuarial
science, economics, and other relevant
disciplines, as determined by the Secretary.
[(2) Terms.--
[(A) In general.--The members of the CLASS
Independence Advisory Council shall serve
overlapping terms of 3 years (unless appointed
to fill a vacancy occurring prior to the
expiration of a term, in which case the
individual shall serve for the remainder of the
term).
[(B) Limitation.--A member shall not be
eligible to serve for more than 2 consecutive
terms.
[(3) Chair.--The President shall, from time to time,
appoint one of the members of the CLASS Independence
Advisory Council to serve as the Chair.
[(c) Duties.--The CLASS Independence Advisory Council shall
advise the Secretary on matters of general policy in the
administration of the CLASS program established under this
title and in the formulation of regulations under this title
including with respect to--
[(1) the development of the CLASS Independence
Benefit Plan under section 3203;
[(2) the determination of monthly premiums under such
plan; and
[(3) the financial solvency of the program.
[(d) Application of FACA.--The Federal Advisory Committee Act
(5 U.S.C. App.), other than section 14 of that Act, shall apply
to the CLASS Independence Advisory Council.
[(e) Authorization of Appropriations.--
[(1) In general.--There are authorized to be
appropriated to the CLASS Independence Advisory Council
to carry out its duties under this section, such sums
as may be necessary for fiscal year 2011 and for each
fiscal year thereafter.
[(2) Availability.--Any sums appropriated under the
authorization contained in this section shall remain
available, without fiscal year limitation, until
expended.
[SEC. 3208. SOLVENCY AND FISCAL INDEPENDENCE; REGULATIONS; ANNUAL
REPORT.
[(a) Solvency.--The Secretary shall regularly consult with
the Board of Trustees of the CLASS Independence Fund and the
CLASS Independence Advisory Council, for purposes of ensuring
that enrollees premiums are adequate to ensure the financial
solvency of the CLASS program, both with respect to fiscal
years occurring in the near-term and fiscal years occurring
over 20- and 75-year periods, taking into account the
projections required for such periods under subsections
(a)(1)(A)(i) and (b)(1)(B)(i) of section 3202.
[(b) No Taxpayer Funds Used To Pay Benefits.--No taxpayer
funds shall be used for payment of benefits under a CLASS
Independent Benefit Plan. For purposes of this subsection, the
term ``taxpayer funds'' means any Federal funds from a source
other than premiums deposited by CLASS program participants in
the CLASS Independence Fund and any associated interest
earnings.
[(c) Regulations.--The Secretary shall promulgate such
regulations as are necessary to carry out the CLASS program in
accordance with this title. Such regulations shall include
provisions to prevent fraud and abuse under the program.
[(d) Annual Report.--Beginning January 1, 2014, the Secretary
shall submit an annual report to Congress on the CLASS program.
Each report shall include the following:
[(1) The total number of enrollees in the program.
[(2) The total number of eligible beneficiaries
during the fiscal year.
[(3) The total amount of cash benefits provided
during the fiscal year.
[(4) A description of instances of fraud or abuse
identified during the fiscal year.
[(5) Recommendations for such administrative or
legislative action as the Secretary determines is
necessary to improve the program, ensure the solvency
of the program, or to prevent the occurrence of fraud
or abuse.
[SEC. 3209. INSPECTOR GENERAL'S REPORT.
[The Inspector General of the Department of Health and Human
Services shall submit an annual report to the Secretary and
Congress relating to the overall progress of the CLASS program
and of the existence of waste, fraud, and abuse in the CLASS
program. Each such report shall include findings in the
following areas:
[(1) The eligibility determination process.
[(2) The provision of cash benefits.
[(3) Quality assurance and protection against waste,
fraud, and abuse.
[(4) Recouping of unpaid and accrued benefits.
[SEC. 3210. TAX TREATMENT OF PROGRAM.
[The CLASS program shall be treated for purposes of the
Internal Revenue Code of 1986 in the same manner as a qualified
long-term care insurance contract for qualified long-term care
services.]
----------
PATIENT PROTECTION AND AFFORDABLE CARE ACT
* * * * * * *
[TITLE VIII--CLASS ACT
[SEC. 8001. SHORT TITLE OF TITLE.
[This title may be cited as the ``Community Living Assistance
Services and Supports Act'' or the ``CLASS Act''.
[SEC. 8002. ESTABLISHMENT OF NATIONAL VOLUNTARY INSURANCE PROGRAM FOR
PURCHASING COMMUNITY LIVING ASSISTANCE SERVICES AND
SUPPORT.
[(a) Establishment of CLASS program.--
[(1) In general.--The Public Health Service Act (42
U.S.C. 201 et seq.), as amended by section 4302(a), is
amended by adding at the end the following:
[``TITLE XXXII--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS
[``SEC. 3201. PURPOSE.
[The purpose of this title is to establish a national
voluntary insurance program for purchasing community living
assistance services and supports in order to--
[``(1) provide individuals with functional
limitations with tools that will allow them to maintain
their personal and financial independence and live in
the community through a new financing strategy for
community living assistance services and supports;
[``(2) establish an infrastructure that will help
address the Nation's community living assistance
services and supports needs;
[``(3) alleviate burdens on family caregivers; and
[``(4) address institutional bias by providing a
financing mechanism that supports personal choice and
independence to live in the community.
[``SEC. 3202. DEFINITIONS.
[In this title:
[``(1) Active enrollee.--The term `active enrollee'
means an individual who is enrolled in the CLASS
program in accordance with section 3204 and who has
paid any premiums due to maintain such enrollment.
[``(2) Actively employed.--The term `actively
employed' means an individual who--
[``(A) is reporting for work at the
individual's usual place of employment or at
another location to which the individual is
required to travel because of the individual's
employment (or in the case of an individual who
is a member of the uniformed services, is on
active duty and is physically able to perform
the duties of the individual's position); and
[``(B) is able to perform all the usual and
customary duties of the individual's employment
on the individual's regular work schedule.
[``(3) Activities of daily living.--The term
`activities of daily living' means each of the
following activities specified in section
7702B(c)(2)(B) of the Internal Revenue Code of 1986:
[``(A) Eating.
[``(B) Toileting.
[``(C) Transferring.
[``(D) Bathing.
[``(E) Dressing.
[``(F) Continence.
[``(4) CLASS program.--The term `CLASS program' means
the program established under this title.
[``(5) Eligibility Assessment System.--The term
`Eligibility Assessment System' means the entity
established by the Secretary under section 3205(a)(2)
to make functional eligibility determinations for the
CLASS program.
[``(6) Eligible beneficiary.--
[``(A) In general.--The term `eligible
beneficiary' means any individual who is an
active enrollee in the CLASS program and, as of
the date described in subparagraph (B)--
[``(i) has paid premiums for
enrollment in such program for at least
60 months;
[``(ii) has earned, with respect to
at least 3 calendar years that occur
during the first 60 months for which
the individual has paid premiums for
enrollment in the program, at least an
amount equal to the amount of wages and
self-employment income which an
individual must have in order to be
credited with a quarter of coverage
under section 213(d) of the Social
Security Act for the year; and
[``(iii) has paid premiums for
enrollment in such program for at least
24 consecutive months, if a lapse in
premium payments of more than 3 months
has occurred during the period that
begins on the date of the individual's
enrollment and ends on the date of such
determination.
[``(B) Date described.--For purposes of
subparagraph (A), the date described in this
subparagraph is the date on which the
individual is determined to have a functional
limitation described in section 3203(a)(1)(C)
that is expected to last for a continuous
period of more than 90 days.
[``(C) Regulations.--The Secretary shall
promulgate regulations specifying exceptions to
the minimum earnings requirements under
subparagraph (A)(ii) for purposes of being
considered an eligible beneficiary for certain
populations.
[``(7) Hospital; nursing facility; intermediate care
facility for the mentally retarded; institution for
mental diseases.--The terms `hospital', `nursing
facility', `intermediate care facility for the mentally
retarded', and `institution for mental diseases' have
the meanings given such terms for purposes of Medicaid.
[``(8) CLASS Independence Advisory Council.--The term
`CLASS Independence Advisory Council' or `Council'
means the Advisory Council established under section
3207 to advise the Secretary.
[``(9) CLASS Independence Benefit Plan.--The term
`CLASS Independence Benefit Plan' means the benefit
plan developed and designated by the Secretary in
accordance with section 3203.
[``(10) CLASS Independence Fund.--The term `CLASS
Independence Fund' or `Fund' means the fund established
under section 3206.
[``(11) Medicaid.--The term `Medicaid' means the
program established under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.).
[``(12) Poverty line.--The term `poverty line' has
the meaning given that term in section 2110(c)(5) of
the Social Security Act (42 U.S.C. 1397jj(c)(5)).
[``(13) Protection and advocacy system.--The term
`Protection and Advocacy System' means the system for
each State established under section 143 of the
Developmental Disabilities Assistance and Bill of
Rights Act of 2000 (42 U.S.C. 15043).
[``SEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN.
[``(a) Process for development.--
[``(1) In general.--The Secretary, in consultation
with appropriate actuaries and other experts, shall
develop at least 3 actuarially sound benefit plans as
alternatives for consideration for designation by the
Secretary as the CLASS Independence Benefit Plan under
which eligible beneficiaries shall receive benefits
under this title. Each of the plan alternatives
developed shall be designed to provide eligible
beneficiaries with the benefits described in section
3205 consistent with the following requirements:
[``(A) Premiums.--
[``(i) In general.--Beginning with
the first year of the CLASS program,
and for each year thereafter, subject
to clauses (ii) and (iii), the
Secretary shall establish all premiums
to be paid by enrollees for the year
based on an actuarial analysis of the
75-year costs of the program that
ensures solvency throughout such 75-
year period.
[``(ii) Nominal premium for poorest
individuals and full-time students.--
[``(I) In general.--The
monthly premium for enrollment
in the CLASS program shall not
exceed the applicable dollar
amount per month determined
under subclause (II) for--
[``(aa) any
individual whose income
does not exceed the
poverty line; and
[``(bb) any
individual who has not
attained age 22, and is
actively employed
during any period in
which the individual is
a full-time student (as
determined by the
Secretary).
[``(II) Applicable dollar
amount.--The applicable dollar
amount described in this
subclause is the amount equal
to $5, increased by the
percentage increase in the
consumer price index for all
urban consumers (U.S. city
average) for each year
occurring after 2009 and before
such year.
[``(iii) Class Independence Fund
reserves.--At such time as the CLASS
program has been in operation for 10
years, the Secretary shall establish
all premiums to be paid by enrollees
for the year based on an actuarial
analysis that accumulated reserves in
the CLASS Independence Fund would not
decrease in that year. At such time as
the Secretary determines the CLASS
program demonstrates a sustained
ability to finance expected yearly
expenses with expected yearly premiums
and interest credited to the CLASS
Independence Fund, the Secretary may
decrease the required amount of CLASS
Independence Fund reserves.
[``(B) Vesting period.--A 5-year vesting
period for eligibility for benefits.
[``(C) Benefit triggers.--A benefit trigger
for provision of benefits that requires a
determination that an individual has a
functional limitation, as certified by a
licensed health care practitioner, described in
any of the following clauses that is expected
to last for a continuous period of more than 90
days:
[``(i) The individual is determined
to be unable to perform at least the
minimum number (which may be 2 or 3) of
activities of daily living as are
required under the plan for the
provision of benefits without
substantial assistance (as defined by
the Secretary) from another individual.
[``(ii) The individual requires
substantial supervision to protect the
individual from threats to health and
safety due to substantial cognitive
impairment.
[``(iii) The individual has a level
of functional limitation similar (as
determined under regulations prescribed
by the Secretary) to the level of
functional limitation described in
clause (i) or (ii).
[``(D) Cash benefit.--Payment of a cash
benefit that satisfies the following
requirements:
[``(i) Minimum required amount.--The
benefit amount provides an eligible
beneficiary with not less than an
average of $50 per day (as determined
based on the reasonably expected
distribution of beneficiaries receiving
benefits at various benefit levels).
[``(ii) Amount scaled to functional
ability.--The benefit amount is varied
based on a scale of functional ability,
with not less than 2, and not more than
6, benefit level amounts.
[``(iii) Daily or weekly.--The
benefit is paid on a daily or weekly
basis.
[``(iv) No lifetime or aggregate
limit.--The benefit is not subject to
any lifetime or aggregate limit.
[``(2) Review and recommendation by the CLASS
Independence Advisory Council.--The CLASS Independence
Advisory Council shall--
[``(A) evaluate the alternative benefit plans
developed under paragraph (1); and
[``(B) recommend for designation as the CLASS
Independence Benefit Plan for offering to the
public the plan that the Council determines
best balances price and benefits to meet
enrollees' needs in an actuarially sound
manner, while optimizing the probability of the
long-term sustainability of the CLASS program.
[``(3) Designation by the Secretary.--Not later than
October 1, 2012, the Secretary, taking into
consideration the recommendation of the CLASS
Independence Advisory Council under paragraph (2)(B),
shall designate a benefit plan as the CLASS
Independence Benefit Plan. The Secretary shall publish
such designation, along with details of the plan and
the reasons for the selection by the Secretary, in a
final rule that allows for a period of public comment.
[``(b) Additional premium requirements.--
[``(1) Adjustment of premiums.--
[``(A) In general.--Except as provided in
subparagraphs (B), (C), (D), and (E), the
amount of the monthly premium determined for an
individual upon such individual's enrollment in
the CLASS program shall remain the same for as
long as the individual is an active enrollee in
the program.
[``(B) Recalculated premium if required for
program solvency.--
[``(i) In general.--Subject to clause
(ii), if the Secretary determines,
based on the most recent report of the
Board of Trustees of the CLASS
Independence Fund, the advice of the
CLASS Independence Advisory Council,
and the annual report of the Inspector
General of the Department of Health and
Human Services, and waste, fraud, and
abuse, or such other information as the
Secretary determines appropriate, that
the monthly premiums and income to the
CLASS Independence Fund for a year are
projected to be insufficient with
respect to the 20-year period that
begins with that year, the Secretary
shall adjust the monthly premiums for
individuals enrolled in the CLASS
program as necessary (but maintaining a
nominal premium for enrollees whose
income is below the poverty line or who
are full-time students actively
employed).
[``(ii) Exemption from increase.--Any
increase in a monthly premium imposed
as result of a determination described
in clause (i) shall not apply with
respect to the monthly premium of any
active enrollee who--
[``(I) has attained age 65;
[``(II) has paid premiums for
enrollment in the program for
at least 20 years; and
[``(III) is not actively
employed.
[``(C) Recalculated premium if reenrollment
after more than a 3-month lapse.--
[``(i) In general.--The reenrollment
of an individual after a 90-day period
during which the individual failed to
pay the monthly premium required to
maintain the individual's enrollment in
the CLASS program shall be treated as
an initial enrollment for purposes of
age-adjusting the premium for
reenrollment in the program.
[``(ii) Credit for prior months if
reenrolled within 5 years.--An
individual who reenrolls in the CLASS
program after such a 90-day period and
before the end of the 5-year period
that begins with the first month for
which the individual failed to pay the
monthly premium required to maintain
the individual's enrollment in the
program shall be--
[``(I) credited with any
months of paid premiums that
accrued prior to the
individual's lapse in
enrollment; and
[``(II) notwithstanding the
total amount of any such
credited months, required to
satisfy section 3202(6)(A)(ii)
before being eligible to
receive benefits.
[``(D) No longer status as a full-time
student.--An individual subject to a nominal
premium on the basis of being described in
subsection (a)(1)(A)(ii)(I)(bb) who ceases to
be described in that subsection, beginning with
the first month following the month in which
the individual ceases to be so described, shall
be subject to the same monthly premium as the
monthly premium that applies to an individual
of the same age who first enrolls in the
program under the most similar circumstances as
the individual (such as the first year of
eligibility for enrollment in the program or in
a subsequent year).
[``(E) Penalty for reenollment after 5-year
lapse.--In the case of an individual who
reenrolls in the CLASS program after the end of
the 5-year period described in subparagraph
(C)(ii), the monthly premium required for the
individual shall be the age-adjusted premium
that would be applicable to an initially
enrolling individual who is the same age as the
reenrolling individual, increased by the
greater of--
[``(i) an amount that the Secretary
determines is actuarially sound for
each month that occurs during the
period that begins with the first month
for which the individual failed to pay
the monthly premium required to
maintain the individual's enrollment in
the CLASS program and ends with the
month preceding the month in which the
reenollment is effective; or
[``(ii) 1 percent of the applicable
age-adjusted premium for each such
month occurring in such period.
[``(2) Administrative expenses.--In determining the
monthly premiums for the CLASS program the Secretary
may factor in costs for administering the program, not
to exceed for any year in which the program is in
effect under this title, an amount equal to 3 percent
of all premiums paid during the year.
[``(3) No underwriting requirements.--No underwriting
(other than on the basis of age in accordance with
subparagraphs (D) and (E) of paragraph (1)) shall be
used to--
[``(A) determine the monthly premium for
enrollment in the CLASS program; or
[``(B) prevent an individual from enrolling
in the program.
[``(c) Self-attestation and verification of income.--The
Secretary shall establish procedures to--
[``(1) permit an individual who is eligible for the
nominal premium required under subsection (a)(1)(A)(ii)
to self-attest that their income does not exceed the
poverty line or that their status as a full-time
student who is actively employed;
[``(2) verify, using procedures similar to the
procedures used by the Commissioner of Social Security
under section 1631(e)(1)(B)(ii) of the Social Security
Act and consistent with the requirements applicable to
the conveyance of data and information under section
1942 of such Act, the validity of such self-
attestation; and
[``(3) require an individual to confirm, on at least
an annual basis, that their income does not exceed the
poverty line or that they continue to maintain such
status.
[``SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIREMENTS.
[``(a) Automatic enrollment.--
[``(1) In general.--Subject to paragraph (2), the
Secretary, in coordination with the Secretary of the
Treasury, shall establish procedures under which each
individual described in subsection (c) may be
automatically enrolled in the CLASS program by an
employer of such individual in the same manner as an
employer may elect to automatically enroll employees in
a plan under section 401(k), 403(b), or 457 of the
Internal Revenue Code of 1986.
[``(2) Alternative enrollment procedures.--The
procedures established under paragraph (1) shall
provide for an alternative enrollment process for an
individual described in subsection (c) in the case of
such an individual--
[``(A) who is self-employed;
[``(B) who has more than 1 employer; or
[``(C) whose employer does not elect to
participate in the automatic enrollment process
established by the Secretary.
[``(3) Administration.--
[``(A) In general.--The Secretary and the
Secretary of the Treasury shall, by regulation,
establish procedures to ensure that an
individual is not automatically enrolled in the
CLASS program by more than 1 employer.
[``(B) Form.--Enrollment in the CLASS program
shall be made in such manner as the Secretary
may prescribe in order to ensure ease of
administration.
[``(b) Election to opt-Out.--An individual described in
subsection (c) may elect to waive enrollment in the CLASS
program at any time in such form and manner as the Secretary
and the Secretary of the Treasury shall prescribe.
[``(c) Individual described.--For purposes of enrolling in
the CLASS program, an individual described in this paragraph is
an individual--
[``(1) who has attained age 18;
[``(2) who--
[``(A) receives wages or income on which
there is imposed a tax under section 3101(a) or
3201(a) of the Internal Revenue Code of 1986;
or
[``(B) derives self-employment income on
which there is imposed a tax under section
1401(a) of the Internal Revenue Code of 1986;
[``(3) who is actively employed; and
[``(4) who is not--
[``(A) a patient in a hospital or nursing
facility, an intermediate care facility for the
mentally retarded, or an institution for mental
diseases and receiving medical assistance under
Medicaid; or
[``(B) confined in a jail, prison, other
penal institution or correctional facility, or
by court order pursuant to conviction of a
criminal offense or in connection with a
verdict or finding described in section
202(x)(1)(A)(ii) of the Social Security Act (42
U.S.C. 402(x)(1)(A)(ii)).
[``(d) Rule of construction.--Nothing in this title shall be
construed as requiring an active enrollee to continue to
satisfy subparagraph (A) or (B) of subsection (c)(2) in order
to maintain enrollment in the CLASS program.
[``(e) Payment.--
[``(1) Payroll deduction.--An amount equal to the
monthly premium for the enrollment in the CLASS program
of an individual shall be deducted from the wages or
self-employment income of such individual in accordance
with such procedures as the Secretary, in coordination
with the Secretary of the Treasury, shall establish for
employers who elect to deduct and withhold such
premiums on behalf of enrolled employees.
[``(2) Alternative payment mechanism.--The Secretary,
in coordination with the Secretary of the Treasury,
shall establish alternative procedures for the payment
of monthly premiums by an individual enrolled in the
CLASS program--
[``(A) who does not have an employer who
elects to deduct and withhold premiums in
accordance with paragraph (1); or
[``(B) who does not earn wages or derive
self-employment income.
[``(f) Transfer of premiums collected.--
[``(1) In general.--During each calendar year the
Secretary of the Treasury shall deposit into the CLASS
Independence Fund a total amount equal, in the
aggregate, to 100 percent of the premiums collected
during that year.
[``(2) Transfers based on estimates.--The amount
deposited pursuant to paragraph (1) shall be
transferred in at least monthly payments to the CLASS
Independence Fund on the basis of estimates by the
Secretary and certified to the Secretary of the
Treasury of the amounts collected in accordance with
subparagraphs (A) and (B) of paragraph (5). Proper
adjustments shall be made in amounts subsequently
transferred to the Fund to the extent prior estimates
were in excess of, or were less than, actual amounts
collected.
[``(g) Other enrollment and disenrollment opportunities.--The
Secretary, in coordination with the Secretary of the Treasury,
shall establish procedures under which--
[``(1) an individual who, in the year of the
individual's initial eligibility to enroll in the CLASS
program, has not enrolled in the program, is eligible
to elect to enroll in the program, in such form and
manner as the Secretaries shall establish, only during
an open enrollment period established by the
Secretaries that is specific to the individual and that
may not occur more frequently than biennially after the
date on which the individual first elected to waive
enrollment in the program; and
[``(2) an individual shall only be permitted to
disenroll from the program (other than for nonpayment
of premiums) during an annual disenrollment period
established by the Secretaries and in such form and
manner as the Secretaries shall establish.
[``SEC. 3205. BENEFITS.
[``(a) Determination of eligibility.--
[``(1) Application for receipt of benefits.--The
Secretary shall establish procedures under which an
active enrollee shall apply for receipt of benefits
under the CLASS Independence Benefit Plan.
[``(2) Eligibility assessments.--
[``(A) In general.--Not later than January 1,
2012, the Secretary shall--
[``(i) establish an Eligibility
Assessment System (other than a service
with which the Commissioner of Social
Security has entered into an agreement,
with respect to any State, to make
disability determinations for purposes
of title II or XVI of the Social
Security Act) to provide for
eligibility assessments of active
enrollees who apply for receipt of
benefits;
[``(ii) enter into an agreement with
the Protection and Advocacy System for
each State to provide advocacy services
in accordance with subsection (d); and
[``(iii) enter into an agreement with
public and private entities to provide
advice and assistance counseling in
accordance with subsection (e).
[``(B) Regulations.--The Secretary shall
promulgate regulations to develop an expedited
nationally equitable eligibility determination
process, as certified by a licensed health care
practitioner, an appeals process, and a
redetermination process, as certified by a
licensed health care practitioner, including
whether an active enrollee is eligible for a
cash benefit under the program and if so, the
amount of the cash benefit (in accordance the
sliding scale established under the plan).
[``(C) Presumptive eligibility for certain
institutionalized enrollees planning to
discharge.--An active enrollee shall be deemed
presumptively eligible if the enrollee--
[``(i) has applied for, and attests
is eligible for, the maximum cash
benefit available under the sliding
scale established under the CLASS
Independence Benefit Plan;
[``(ii) is a patient in a hospital
(but only if the hospitalization is for
long-term care), nursing facility,
intermediate care facility for the
mentally retarded, or an institution
for mental diseases; and
[``(iii) is in the process of, or
about to begin the process of, planning
to discharge from the hospital,
facility, or institution, or within 60
days from the date of discharge from
the hospital, facility, or institution.
[``(D) Appeals.--The Secretary shall
establish procedures under which an applicant
for benefits under the CLASS Independence
Benefit Plan shall be guaranteed the right to
appeal an adverse determination.
[``(b) Benefits.--An eligible beneficiary shall receive the
following benefits under the CLASS Independence Benefit Plan:
[``(1) Cash benefit.--A cash benefit established by
the Secretary in accordance with the requirements of
section 3203(a)(1)(D) that--
[``(A) the first year in which beneficiaries
receive the benefits under the plan, is not
less than the average dollar amount specified
in clause (i) of such section; and
[``(B) for any subsequent year, is not less
than the average per day dollar limit
applicable under this subparagraph for the
preceding year, increased by the percentage
increase in the consumer price index for all
urban consumers (U.S. city average) over the
previous year.
[``(2) Advocacy services.--Advocacy services in
accordance with subsection (d).
[``(3) Advice and assistance counseling.--Advice and
assistance counseling in accordance with subsection
(e).
[``(4) Administrative expenses.--Advocacy services
and advise and assistance counseling services under
paragraphs (2) and (3) of this subsection shall be
included as administrative expenses under section
3203(b)(3).
[``(c) Payment of benefits.--
[``(1) Life independence account.--
[``(A) In general.--The Secretary shall
establish procedures for administering the
provision of benefits to eligible beneficiaries
under the CLASS Independence Benefit Plan,
including the payment of the cash benefit for
the beneficiary into a Life Independence
Account established by the Secretary on behalf
of each eligible beneficiary.
[``(B) Use of cash benefits.--Cash benefits
paid into a Life Independence Account of an
eligible beneficiary shall be used to purchase
nonmedical services and supports that the
beneficiary needs to maintain his or her
independence at home or in another residential
setting of their choice in the community,
including (but not limited to) home
modifications, assistive technology, accessible
transportation, homemaker services, respite
care, personal assistance services, home care
aides, and nursing support. Nothing in the
preceding sentence shall prevent an eligible
beneficiary from using cash benefits paid into
a Life Independence Account for obtaining
assistance with decision making concerning
medical care, including the right to accept or
refuse medical or surgical treatment and the
right to formulate advance directives or other
written instructions recognized under State
law, such as a living will or durable power of
attorney for health care, in the case that an
injury or illness causes the individual to be
unable to make health care decisions.
[``(C) Electronic management of funds.--The
Secretary shall establish procedures for--
[``(i) crediting an account
established on behalf of a beneficiary
with the beneficiary's cash daily
benefit;
[``(ii) allowing the beneficiary to
access such account through debit
cards; and
[``(iii) accounting for withdrawals
by the beneficiary from such account.
[``(D) Primary payor rules for beneficiaries
who are enrolled in medicaid.--In the case of
an eligible beneficiary who is enrolled in
Medicaid, the following payment rules shall
apply:
[``(i) Institutionalized
beneficiary.--If the beneficiary is a
patient in a hospital, nursing
facility, intermediate care facility
for the mentally retarded, or an
institution for mental diseases, the
beneficiary shall retain an amount
equal to 5 percent of the beneficiary's
daily or weekly cash benefit (as
applicable) (which shall be in addition
to the amount of the beneficiary's
personal needs allowance provided under
Medicaid), and the remainder of such
benefit shall be applied toward the
facility's cost of providing the
beneficiary's care, and Medicaid shall
provide secondary coverage for such
care.
[``(ii) Beneficiaries receiving home
and community-based services.--
[``(I) 50 percent of benefit
retained by beneficiary.--
Subject to subclause (II), if a
beneficiary is receiving
medical assistance under
Medicaid for home and community
based services, the beneficiary
shall retain an amount equal to
50 percent of the beneficiary's
daily or weekly cash benefit
(as applicable), and the
remainder of the daily or
weekly cash benefit shall be
applied toward the cost to the
State of providing such
assistance (and shall not be
used to claim Federal matching
funds under Medicaid), and
Medicaid shall provide
secondary coverage for the
remainder of any costs incurred
in providing such assistance.
[``(II) Requirement for state
offset.--A State shall be paid
the remainder of a
beneficiary's daily or weekly
cash benefit under subclause
(I) only if the State home and
community-based waiver under
section 1115 of the Social
Security Act (42 U.S.C. 1315)
or subsection (c) or (d) of
section 1915 of such Act (42
U.S.C. 1396n), or the State
plan amendment under subsection
(i) of such section does not
include a waiver of the
requirements of section
1902(a)(1) of the Social
Security Act (relating to
statewideness) or of section
1902(a)(10)(B) of such Act
(relating to comparability) and
the State offers at a minimum
case management services,
personal care services,
habilitation services, and
respite care under such a
waiver or State plan amendment.
[``(III) Definition of home
and community-based services.--
In this clause, the term `home
and community-based services'
means any services which may be
offered under a home and
community-based waiver
authorized for a State under
section 1115 of the Social
Security Act (42 U.S.C. 1315)
or subsection (c) or (d) of
section 1915 of such Act (42
U.S.C. 1396n) or under a State
plan amendment under subsection
(i) of such section.
[``(iii) Beneficiaries enrolled in
programs of all-inclusive care for the
elderly (pace).--
[``(I) In general.--Subject
to subclause (II), if a
beneficiary is receiving
medical assistance under
Medicaid for PACE program
services under section 1934 of
the Social Security Act (42
U.S.C. 1396u-4), the
beneficiary shall retain an
amount equal to 50 percent of
the beneficiary's daily or
weekly cash benefit (as
applicable), and the remainder
of the daily or weekly cash
benefit shall be applied toward
the cost to the State of
providing such assistance (and
shall not be used to claim
Federal matching funds under
Medicaid), and Medicaid shall
provide secondary coverage for
the remainder of any costs
incurred in providing such
assistance.
[``(II) Institutionalized
recipients of pace program
services.--If a beneficiary
receiving assistance under
Medicaid for PACE program
services is a patient in a
hospital, nursing facility,
intermediate care facility for
the mentally retarded, or an
institution for mental
diseases, the beneficiary shall
be treated as in
institutionalized beneficiary
under clause (i).
[``(2) Authorized representatives.--
[``(A) In general.--The Secretary shall
establish procedures to allow access to a
beneficiary's cash benefits by an authorized
representative of the eligible beneficiary on
whose behalf such benefits are paid.
[``(B) Quality assurance and protection
against fraud and abuse.--The procedures
established under subparagraph (A) shall ensure
that authorized representatives of eligible
beneficiaries comply with standards of conduct
established by the Secretary, including
standards requiring that such representatives
provide quality services on behalf of such
beneficiaries, do not have conflicts of
interest, and do not misuse benefits paid on
behalf of such beneficiaries or otherwise
engage in fraud or abuse.
[``(3) Commencement of benefits.--Benefits shall be
paid to, or on behalf of, an eligible beneficiary
beginning with the first month in which an application
for such benefits is approved.
[``(4) Rollover option for lump-sum payment.--An
eligible beneficiary may elect to--
[``(A) defer payment of their daily or weekly
benefit and to rollover any such deferred
benefits from month-to-month, but not from
year-to-year; and
[``(B) receive a lump-sum payment of such
deferred benefits in an amount that may not
exceed the lesser of--
[``(i) the total amount of the
accrued deferred benefits; or
[``(ii) the applicable annual
benefit.
[``(5) Period for determination of annual benefits.--
[``(A) In general.--The applicable period for
determining with respect to an eligible
beneficiary the applicable annual benefit and
the amount of any accrued deferred benefits is
the 12-month period that commences with the
first month in which the beneficiary began to
receive such benefits, and each 12-month period
thereafter.
[``(B) Inclusion of increased benefits.--The
Secretary shall establish procedures under
which cash benefits paid to an eligible
beneficiary that increase or decrease as a
result of a change in the functional status of
the beneficiary before the end of a 12-month
benefit period shall be included in the
determination of the applicable annual benefit
paid to the eligible beneficiary.
[``(C) Recoupment of unpaid, accrued
benefits.--
[``(i) In general.--The Secretary, in
coordination with the Secretary of the
Treasury, shall recoup any accrued
benefits in the event of--
[``(I) the death of a
beneficiary; or
[``(II) the failure of a
beneficiary to elect under
paragraph (4)(B) to receive
such benefits as a lump-sum
payment before the end of the
12-month period in which such
benefits accrued.
[``(ii) Payment into class
independence fund.--Any benefits
recouped in accordance with clause (i)
shall be paid into the CLASS
Independence Fund and used in
accordance with section 3206.
[``(6) Requirement to recertify eligibility for
receipt of benefits.--An eligible beneficiary shall
periodically, as determined by the Secretary--
[``(A) recertify by submission of medical
evidence the beneficiary's continued
eligibility for receipt of benefits; and
[``(B) submit records of expenditures
attributable to the aggregate cash benefit
received by the beneficiary during the
preceding year.
[``(7) Supplement, not supplant other health care
benefits.--Subject to the Medicaid payment rules under
paragraph (1)(D), benefits received by an eligible
beneficiary shall supplement, but not supplant, other
health care benefits for which the beneficiary is
eligible under Medicaid or any other Federally funded
program that provides health care benefits or
assistance.
[``(d) Advocacy services.--An agreement entered into under
subsection (a)(2)(A)(ii) shall require the Protection and
Advocacy System for the State to--
[``(1) assign, as needed, an advocacy counselor to
each eligible beneficiary that is covered by such
agreement and who shall provide an eligible beneficiary
with--
[``(A) information regarding how to access
the appeals process established for the
program;
[``(B) assistance with respect to the annual
recertification and notification required under
subsection (c)(6); and
[``(C) such other assistance with obtaining
services as the Secretary, by regulation, shall
require; and
[``(2) ensure that the System and such counselors
comply with the requirements of subsection (h).
[``(e) Advice and assistance counseling.--An agreement
entered into under subsection (a)(2)(A)(iii) shall require the
entity to assign, as requested by an eligible beneficiary that
is covered by such agreement, an advice and assistance
counselor who shall provide an eligible beneficiary with
information regarding--
[``(1) accessing and coordinating long-term services
and supports in the most integrated setting;
[``(2) possible eligibility for other benefits and
services;
[``(3) development of a service and support plan;
[``(4) information about programs established under
the Assistive Technology Act of 1998 and the services
offered under such programs;
[``(5) available assistance with decision making
concerning medical care, including the right to accept
or refuse medical or surgical treatment and the right
to formulate advance directives or other written
instructions recognized under State law, such as a
living will or durable power of attorney for health
care, in the case that an injury or illness causes the
individual to be unable to make health care decisions;
and
[``(6) such other services as the Secretary, by
regulation, may require.
[``(f) No effect on eligibility for other benefits.--Benefits
paid to an eligible beneficiary under the CLASS program shall
be disregarded for purposes of determining or continuing the
beneficiary's eligibility for receipt of benefits under any
other Federal, State, or locally funded assistance program,
including benefits paid under titles II, XVI, XVIII, XIX, or
XXI of the Social Security Act (42 U.S.C. 401 et seq., 1381 et
seq., 1395 et seq., 1396 et seq., 1397aa et seq.), under the
laws administered by the Secretary of Veterans Affairs, under
low-income housing assistance programs, or under the
supplemental nutrition assistance program established under the
Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.).
[``(g) Rule of construction.--Nothing in this title shall be
construed as prohibiting benefits paid under the CLASS
Independence Benefit Plan from being used to compensate a
family caregiver for providing community living assistance
services and supports to an eligible beneficiary.
[``(h) Protection against conflict of interests.--The
Secretary shall establish procedures to ensure that the
Eligibility Assessment System, the Protection and Advocacy
System for a State, advocacy counselors for eligible
beneficiaries, and any other entities that provide services to
active enrollees and eligible beneficiaries under the CLASS
program comply with the following:
[``(1) If the entity provides counseling or planning
services, such services are provided in a manner that
fosters the best interests of the active enrollee or
beneficiary.
[``(2) The entity has established operating
procedures that are designed to avoid or minimize
conflicts of interest between the entity and an active
enrollee or beneficiary.
[``(3) The entity provides information about all
services and options available to the active enrollee
or beneficiary, to the best of its knowledge, including
services available through other entities or providers.
[``(4) The entity assists the active enrollee or
beneficiary to access desired services, regardless of
the provider.
[``(5) The entity reports the number of active
enrollees and beneficiaries provided with assistance by
age, disability, and whether such enrollees and
beneficiaries received services from the entity or
another entity.
[``(6) If the entity provides counseling or planning
services, the entity ensures that an active enrollee or
beneficiary is informed of any financial interest that
the entity has in a service provider.
[``(7) The entity provides an active enrollee or
beneficiary with a list of available service providers
that can meet the needs of the active enrollee or
beneficiary.
[``SEC. 3206. CLASS INDEPENDENCE FUND.
[``(a) Establishment of CLASS Independence Fund.--There is
established in the Treasury of the United States a trust fund
to be known as the `CLASS Independence Fund'. The Secretary of
the Treasury shall serve as Managing Trustee of such Fund. The
Fund shall consist of all amounts derived from payments into
the Fund under sections 3204(f) and 3205(c)(5)(C)(ii), and
remaining after investment of such amounts under subsection
(b), including additional amounts derived as income from such
investments. The amounts held in the Fund are appropriated and
shall remain available without fiscal year limitation--
[``(1) to be held for investment on behalf of
individuals enrolled in the CLASS program;
[``(2) to pay the administrative expenses related to
the Fund and to investment under subsection (b); and
[``(3) to pay cash benefits to eligible beneficiaries
under the CLASS Independence Benefit Plan.
[``(b) Investment of fund balance.--The Secretary of the
Treasury shall invest and manage the CLASS Independence Fund in
the same manner, and to the same extent, as the Federal
Supplementary Medical Insurance Trust Fund may be invested and
managed under subsections (c), (d), and (e) of section 1841(d)
of the Social Security Act (42 U.S.C. 1395t).
[``(c) Board of Trustees.--
[``(1) In general.--With respect to the CLASS
Independence Fund, there is hereby created a body to be
known as the Board of Trustees of the CLASS
Independence Fund (hereinafter in this section referred
to as the `Board of Trustees') composed of the
Secretary of the Treasury, the Secretary of Labor, and
the Secretary of Health and Human Services, all ex
officio, and of two members of the public (both of whom
may not be from the same political party), who shall be
nominated by the President for a term of 4 years and
subject to confirmation by the Senate. A member of the
Board of Trustees serving as a member of the public and
nominated and confirmed to fill a vacancy occurring
during a term shall be nominated and confirmed only for
the remainder of such term. An individual nominated and
confirmed as a member of the public may serve in such
position after the expiration of such member's term
until the earlier of the time at which the member's
successor takes office or the time at which a report of
the Board is first issued under paragraph (2) after the
expiration of the member's term. The Secretary of the
Treasury shall be the Managing Trustee of the Board of
Trustees. The Board of Trustees shall meet not less
frequently than once each calendar year. A person
serving on the Board of Trustees shall not be
considered to be a fiduciary and shall not be
personally liable for actions taken in such capacity
with respect to the Trust Fund.
[``(2) Duties.--
[``(A) In general.--It shall be the duty of
the Board of Trustees to do the following:
[``(i) Hold the CLASS Independence
Fund.
[``(ii) Report to the Congress not
later than the first day of April of
each year on the operation and status
of the CLASS Independence Fund during
the preceding fiscal year and on its
expected operation and status during
the current fiscal year and the next 2
fiscal years.
[``(iii) Report immediately to the
Congress whenever the Board is of the
opinion that the amount of the CLASS
Independence Fund is not actuarially
sound in regards to the projection
under section 3203(b)(1)(B)(i).
[``(iv) Review the general policies
followed in managing the CLASS
Independence Fund, and recommend
changes in such policies, including
necessary changes in the provisions of
law which govern the way in which the
CLASS Independence Fund is to be
managed.
[``(B) Report.--The report provided for in
subparagraph (A)(ii) shall--
[``(i) include--
[``(I) a statement of the
assets of, and the
disbursements made from, the
CLASS Independence Fund during
the preceding fiscal year;
[``(II) an estimate of the
expected income to, and
disbursements to be made from,
the CLASS Independence Fund
during the current fiscal year
and each of the next 2 fiscal
years;
[``(III) a statement of the
actuarial status of the CLASS
Independence Fund for the
current fiscal year, each of
the next 2 fiscal years, and as
projected over the 75-year
period beginning with the
current fiscal year; and
[``(IV) an actuarial opinion
by the Chief Actuary of the
Centers for Medicare & Medicaid
Services certifying that the
techniques and methodologies
used are generally accepted
within the actuarial profession
and that the assumptions and
cost estimates used are
reasonable; and
[``(ii) be printed as a House
document of the session of the Congress
to which the report is made.
[``(C) Recommendations.--If the Board of
Trustees determines that enrollment trends and
expected future benefit claims on the CLASS
Independence Fund are not actuarially sound in
regards to the projection under section
3203(b)(1)(B)(i) and are unlikely to be
resolved with reasonable premium increases or
through other means, the Board of Trustees
shall include in the report provided for in
subparagraph (A)(ii) recommendations for such
legislative action as the Board of Trustees
determine to be appropriate, including whether
to adjust monthly premiums or impose a
temporary moratorium on new enrollments.
[``SEC. 3207. CLASS INDEPENDENCE ADVISORY COUNCIL.
[``(a) Establishment.--There is hereby created an Advisory
Committee to be known as the `CLASS Independence Advisory
Council'.
[``(b) Membership.--
[``(1) In general.--The CLASS Independence Advisory
Council shall be composed of not more than 15
individuals, not otherwise in the employ of the United
States--
[``(A) who shall be appointed by the
President without regard to the civil service
laws and regulations; and
[``(B) a majority of whom shall be
representatives of individuals who participate
or are likely to participate in the CLASS
program, and shall include representatives of
older and younger workers, individuals with
disabilities, family caregivers of individuals
who require services and supports to maintain
their independence at home or in another
residential setting of their choice in the
community, individuals with expertise in long-
term care or disability insurance, actuarial
science, economics, and other relevant
disciplines, as determined by the Secretary.
[``(2) Terms.--
[``(A) In general.--The members of the CLASS
Independence Advisory Council shall serve
overlapping terms of 3 years (unless appointed
to fill a vacancy occurring prior to the
expiration of a term, in which case the
individual shall serve for the remainder of the
term).
[``(B) Limitation.--A member shall not be
eligible to serve for more than 2 consecutive
terms.
[``(3) Chair.--The President shall, from time to
time, appoint one of the members of the CLASS
Independence Advisory Council to serve as the Chair.
[``(c) Duties.--The CLASS Independence Advisory Council shall
advise the Secretary on matters of general policy in the
administration of the CLASS program established under this
title and in the formulation of regulations under this title
including with respect to--
[``(1) the development of the CLASS Independence
Benefit Plan under section 3203;
[``(2) the determination of monthly premiums under
such plan; and
[``(3) the financial solvency of the program.
[``(d) Application of FACA.--The Federal Advisory Committee
Act (5 U.S.C. App.), other than section 14 of that Act, shall
apply to the CLASS Independence Advisory Council.
[``(e) Authorization of appropriations.--
[``(1) In general.--There are authorized to be
appropriated to the CLASS Independence Advisory Council
to carry out its duties under this section, such sums
as may be necessary for fiscal year 2011 and for each
fiscal year thereafter.
[``(2) Availability.--Any sums appropriated under the
authorization contained in this section shall remain
available, without fiscal year limitation, until
expended.
[``SEC. 3208. SOLVENCY AND FISCAL INDEPENDENCE; REGULATIONS; ANNUAL
REPORT.
[``(a) Solvency.--The Secretary shall regularly consult with
the Board of Trustees of the CLASS Independence Fund and the
CLASS Independence Advisory Council, for purposes of ensuring
that enrollees premiums are adequate to ensure the financial
solvency of the CLASS program, both with respect to fiscal
years occurring in the near-term and fiscal years occurring
over 20- and 75-year periods, taking into account the
projections required for such periods under subsections
(a)(1)(A)(i) and (b)(1)(B)(i) of section 3202.
[``(b) No taxpayer funds used To pay benefits.--No taxpayer
funds shall be used for payment of benefits under a CLASS
Independent Benefit Plan. For purposes of this subsection, the
term `taxpayer funds' means any Federal funds from a source
other than premiums deposited by CLASS program participants in
the CLASS Independence Fund and any associated interest
earnings.
[``(c) Regulations.--The Secretary shall promulgate such
regulations as are necessary to carry out the CLASS program in
accordance with this title. Such regulations shall include
provisions to prevent fraud and abuse under the program.
[``(d) Annual report.--Beginning January 1, 2014, the
Secretary shall submit an annual report to Congress on the
CLASS program. Each report shall include the following:
[``(1) The total number of enrollees in the program.
[``(2) The total number of eligible beneficiaries
during the fiscal year.
[``(3) The total amount of cash benefits provided
during the fiscal year.
[``(4) A description of instances of fraud or abuse
identified during the fiscal year.
[``(5) Recommendations for such administrative or
legislative action as the Secretary determines is
necessary to improve the program, ensure the solvency
of the program, or to prevent the occurrence of fraud
or abuse.
[``SEC. 3209. INSPECTOR GENERAL'S REPORT.
[The Inspector General of the Department of Health and Human
Services shall submit an annual report to the Secretary and
Congress relating to the overall progress of the CLASS program
and of the existence of waste, fraud, and abuse in the CLASS
program. Each such report shall include findings in the
following areas:
[``(1) The eligibility determination process.
[``(2) The provision of cash benefits.
[``(3) Quality assurance and protection against
waste, fraud, and abuse.
[``(4) Recouping of unpaid and accrued benefits.
[``SEC. 3210. TAX TREATMENT OF PROGRAM.
[``The CLASS program shall be treated for purposes of the
Internal Revenue Code of 1986 in the same manner as a qualified
long-term care insurance contract for qualified long-term care
services.''.
[(2) Conforming amendments to medicaid.--Section
1902(a) of the Social Security Act (42 U.S.C.
1396a(a)), as amended by section 6505, is amended by
inserting after paragraph (80) the following:
[``(81) provide that the State will comply with such
regulations regarding the application of primary and
secondary payor rules with respect to individuals who
are eligible for medical assistance under this title
and are eligible beneficiaries under the CLASS program
established under title XXXII of the Public Health
Service Act as the Secretary shall establish; and''.
[(b) Assurance of adequate infrastructure for the provision
of personal care attendant workers.--Section 1902(a) of the
Social Security Act (42 U.S.C. 1396a(a)), as amended by
subsection (a)(2), is amended by inserting after paragraph (81)
the following:
[``(82) provide that, not later than 2 years after
the date of enactment of the Community Living
Assistance Services and Supports Act, each State
shall--
[``(A) assess the extent to which entities
such as providers of home care, home health
services, home and community service providers,
public authorities created to provide personal
care services to individuals eligible for
medical assistance under the State plan, and
nonprofit organizations, are serving or have
the capacity to serve as fiscal agents for,
employers of, and providers of employment-
related benefits for, personal care attendant
workers who provide personal care services to
individuals receiving benefits under the CLASS
program established under title XXXII of the
Public Health Service Act, including in rural
and underserved areas;
[``(B) designate or create such entities to
serve as fiscal agents for, employers of, and
providers of employment-related benefits for,
such workers to ensure an adequate supply of
the workers for individuals receiving benefits
under the CLASS program, including in rural and
underserved areas; and
[``(C) ensure that the designation or
creation of such entities will not negatively
alter or impede existing programs, models,
methods, or administration of service delivery
that provide for consumer controlled or self-
directed home and community services and
further ensure that such entities will not
impede the ability of individuals to direct and
control their home and community services,
including the ability to select, manage,
dismiss, co-employ, or employ such workers or
inhibit such individuals from relying on family
members for the provision of personal care
services.''.
[(c) Personal care attendants workforce advisory panel.--
[(1) Establishment.--Not later than 90 days after the
date of enactment of this Act, the Secretary of Health
and Human Services shall establish a Personal Care
Attendants Workforce Advisory Panel for the purpose of
examining and advising the Secretary and Congress on
workforce issues related to personal care attendant
workers, including with respect to the adequacy of the
number of such workers, the salaries, wages, and
benefits of such workers, and access to the services
provided by such workers.
[(2) Membership.--In appointing members to the
Personal Care Attendants Workforce Advisory Panel, the
Secretary shall ensure that such members include the
following:
[(A) Individuals with disabilities of all
ages.
[(B) Senior individuals.
[(C) Representatives of individuals with
disabilities.
[(D) Representatives of senior individuals.
[(E) Representatives of workforce and labor
organizations.
[(F) Representatives of home and community-
based service providers.
[(G) Representatives of assisted living
providers.
[(d) Inclusion of CLASS Program Information in the national
clearinghouse for long-term care information; extension of
funding.--Section 6021(d) of the Deficit Reduction Act of 2005
(42 U.S.C. 1396p note) is amended--
[(1) in paragraph (2)(A)--
[(A) in clause (ii), by striking ``and'' at
the end;
[(B) in clause (iii), by striking the period
at the end and inserting ``; and''; and
[(C) by adding at the end the following:
[``(iv) include information regarding
the CLASS program established under
title XXXII of the Public Health
Service Act and information regarding
how benefits provided under a CLASS
Independence Benefit Plan differ from
disability insurance benefits.''; and
[(2) in paragraph (3), by striking ``2010'' and
inserting ``2015''.
[(e) Effective date.--The amendments made by subsections (a),
(b), and (d) take effect on January 1, 2011.
[(f) Rule of construction.--Nothing in this title or the
amendments made by this title are intended to replace or
displace public or private disability insurance benefits,
including such benefits that are for income replacement.]
* * * * * * *
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SOCIAL SECURITY ACT
* * * * * * *
TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS
* * * * * * *
STATE PLANS FOR MEDICAL ASSISTANCE
Sec. 1902. (a) A State plan for medical assistance must--
(1) * * *
* * * * * * *
(80) provide that the State shall not provide any
payments for items or services provided under the State
plan or under a waiver to any financial institution or
entity located outside of the United States; and
[(81) provide that the State will comply with such
regulations regarding the application of primary and
secondary payor rules with respect to individuals who
are eligible for medical assistance under this title
and are eligible beneficiaries under the CLASS program
established under title XXXII of the Public Health
Service Act as the Secretary shall establish;
[(82) provide that, not later than 2 years after the
date of enactment of the Community Living Assistance
Services and Supports Act, each State shall--
[(A) assess the extent to which entities such
as providers of home care, home health
services, home and community service providers,
public authorities created to provide personal
care services to individuals eligible for
medical assistance under the State plan, and
nonprofit organizations, are serving or have
the capacity to serve as fiscal agents for,
employers of, and providers of employment-
related benefits for, personal care attendant
workers who provide personal care services to
individuals receiving benefits under the CLASS
program established under title XXXII of the
Public Health Service Act, including in rural
and underserved areas;
[(B) designate or create such entities to
serve as fiscal agents for, employers of, and
providers of employment-related benefits for,
such workers to ensure an adequate supply of
the workers for individuals receiving benefits
under the CLASS program, including in rural and
underserved areas; and
[(C) ensure that the designation or creation
of such entities will not negatively alter or
impede existing programs, models, methods, or
administration of service delivery that provide
for consumer controlled or self-directed home
and community services and further ensure that
such entities will not impede the ability of
individuals to direct and control their home
and community services, including the ability
to select, manage, dismiss, co-employ, or
employ such workers or inhibit such individuals
from relying on family members for the
provision of personal care services; and]
[(83)] (81) provide for implementation of the payment
models specified by the Secretary under section
1115A(c) for implementation on a nationwide basis
unless the State demonstrates to the satisfaction of
the Secretary that implementation would not be
administratively feasible or appropriate to the health
care delivery system of the State.
* * * * * * *
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DEFICIT REDUCTION ACT OF 2005
* * * * * * *
TITLE VI--MEDICAID AND SCHIP
Subtitle A--Medicaid
* * * * * * *
CHAPTER 2--LONG-TERM CARE UNDER MEDICAID
* * * * * * *
Subchapter B--Expanded Access to Certain Benefits
SEC. 6021. EXPANSION OF STATE LONG-TERM CARE PARTNERSHIP PROGRAM.
(a) * * *
* * * * * * *
(d) National Clearinghouse for Long-Term Care Information.--
(1) * * *
(2) Duties.--
(A) In general.--The National Clearinghouse
for Long-Term Care Information shall--
(i) * * *
(ii) provide objective information to
assist consumers with the
decisionmaking process for determining
whether to purchase long-term care
insurance or to pursue other private
market alternatives for purchasing
long-term care and provide contact
information for additional objective
resources on planning for long-term
care needs; and
(iii) maintain a list of States with
State long-term care insurance
partnerships under the Medicaid program
that provide reciprocal recognition of
long-term care insurance policies
issued under such partnerships[; and].
[(iv) include information regarding
the CLASS program established under
title XXXII of the Public Health
Service Act and information regarding
how benefits provided under a CLASS
Independence Benefit Plan differ from
disability insurance benefits.]
* * * * * * *
(3) Appropriation.--Out of any funds in the Treasury
not otherwise appropriated, there is appropriated to
carry out this subsection, $3,000,000 for each of
fiscal years 2006 through [2015] 2010.
* * * * * * *