19–006 

112TH CONGRESS REPT. 112–342 " ! HOUSE OF REPRESENTATIVES 2d Session Part 2 

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 proVerDate Mar 15 2010 04:56 Jan 24, 2012 Jkt 019006 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\HR342P2.XXX HR342P2

rfrederick on DSK6VPTVN1PROD with HEARING
2 

1Secs. 3201–3210 of the Public Health Service Act, 42 U.S.C. 300ll et seq. 

2Title VIII of the Patient Protection and Affordable Care Act of 2010, Pub. L. No. 111–148 

(March 23, 2010). 3See H.R. Rep. No. 112–342, Part 1, for the bill as reported by the Committee on Energy and 

Commerce. 

gram,1 as enacted under the ‘‘Community Living Assistance Services and Supports Act,’’ also called the ‘‘CLASS Act.’’ 2

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

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. 


rfrederick on DSK6VPTVN1PROD with HEARING
3 

4Secs. 3201–3210 of the PHSA, 42 U.S.C. 300ll et seq. 

5Letter from HHS Secretary Kathleen Sebelius to Congress, October 14, 2011, available at 

www.hhs.gov/secretary/letter10142011.html. 6Sec. 7702B. Except as otherwise stated, all section references herein are to the Internal Revenue Code of 1986, as amended (the ‘‘Code’’). 7Secs. 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). 8Sec. 162(l). 

9Secs. 7702B(a)(1), (a)(2), and (d) and 104(a)(3). 

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 longterm 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. 

HHS has suspended work on establishment of the CLASS program because of the inability to develop a program meeting the applicable criteria.5

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. 

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

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 


rfrederick on DSK6VPTVN1PROD with HEARING
4 

10Sec. 7702B(a)(2). 11Secs. 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. 12Sec. 3210 of the PHSA, 42 U.S.C. 300ll–9. 

treated as reimbursement for expenses actually incurred for medical care.10

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

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

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 longterm 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 ........................... ........... ........... .............


rfrederick on DSK6VPTVN1PROD with HEARING
5 

Representative Yea Nay Present Representative Yea Nay Present 

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 


rfrederick on DSK6VPTVN1PROD with HEARING
6 

1Letter from Kathleen Sebelius, Secretary of the Department of Health and Human Services, 

to John A. Boehner, Speaker, House of Representatives, October 14, 2011. 

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). 

By fiscal year, in millions of dollars— 

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012– 

2017 

2012– 

2022 

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 

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. 

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. 


rfrederick on DSK6VPTVN1PROD with HEARING
7 

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 

By fiscal year, in millions of dollars— 

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012– 

2017 

2012– 

2022 

NET DECREASE (¥) IN THE DEFICIT 

Statutory PayAs-You-Go 

Impact .......... 0 ¥3 ¥3 ¥3 0 0 0 0 0 0 0 ¥9 ¥9 

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. 


rfrederick on DSK6VPTVN1PROD with HEARING
8 

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. 


rfrederick on DSK6VPTVN1PROD with HEARING
9 

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 

øTITLE XXXII—COMMUNITY LIVING 

ASSISTANCE SERVICES AND SUPPORTS 

øSEC. 3201. PURPOSE. 

øThe purpose of this title is to establish a national voluntary insurance program for purchasing community living assistance services and supports in order to— 

ø(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; 

ø(2) establish an infrastructure that will help address the 

Nation’s community living assistance services and supports 

needs; 

ø(3) alleviate burdens on family caregivers; and 

ø(4) address institutional bias by providing a financing 

mechanism that supports personal choice and independence to 

live in the community. 

øSEC. 3202. DEFINITIONS. 

øIn this title: 

ø(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. 

ø(2) ACTIVELY EMPLOYED.—The term ‘‘actively employed’’ 

means an individual who— 

ø(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 

ø(B) is able to perform all the usual and customary duties of the individual’s employment on the individual’s regular work schedule. 

ø(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: 

ø(A) Eating. 

ø(B) Toileting. 

ø(C) Transferring. 

ø(D) Bathing. 


rfrederick on DSK6VPTVN1PROD with HEARING
10 

ø(E) Dressing. 

ø(F) Continence. 

ø(4) CLASS PROGRAM.—The term ‘‘CLASS program’’ means 

the program established under this title. 

ø(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. 

ø(6) ELIGIBLE BENEFICIARY.— 

ø(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)— 

ø(i) has paid premiums for enrollment in such program for at least 60 months; 

ø(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 

ø(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. 

ø(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. 

ø(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. 

ø(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. 

ø(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. 

ø(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. 


rfrederick on DSK6VPTVN1PROD with HEARING
11 

ø(10) CLASS INDEPENDENCE FUND.—The term ‘‘CLASS Independence Fund’’ or ‘‘Fund’’ means the fund established under 

section 3206. 

ø(11) MEDICAID.—The term ‘‘Medicaid’’ means the program 

established under title XIX of the Social Security Act (42 

U.S.C. 1396 et seq.). 

ø(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)). 

ø(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). 

øSEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN. 

ø(a) PROCESS FOR DEVELOPMENT.— ø(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: 

ø(A) PREMIUMS.— ø(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. 

ø(ii) NOMINAL PREMIUM FOR POOREST INDIVIDUALS

AND FULL-TIME STUDENTS.— ø(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— 

ø(aa) any individual whose income does not 

exceed the poverty line; and 

ø(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). 

ø(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. 

ø(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 


rfrederick on DSK6VPTVN1PROD with HEARING
12 

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. 

ø(B) VESTING PERIOD.—A 5-year vesting period for eligibility for benefits. 

ø(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: 

ø(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. 

ø(ii) The individual requires substantial supervision 

to protect the individual from threats to health and 

safety due to substantial cognitive impairment. 

ø(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). 

ø(D) CASH BENEFIT.—Payment of a cash benefit that satisfies the following requirements: 

ø(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). 

ø(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. 

ø(iii) DAILY OR WEEKLY.—The benefit is paid on a 

daily or weekly basis. 

ø(iv) NO LIFETIME OR AGGREGATE LIMIT.—The benefit is not subject to any lifetime or aggregate limit. 

ø(2) REVIEW AND RECOMMENDATION BY THE CLASS INDEPENDENCE ADVISORY COUNCIL.—The CLASS Independence Advisory 

Council shall— 

ø(A) evaluate the alternative benefit plans developed 

under paragraph (1); and 

ø(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. 


rfrederick on DSK6VPTVN1PROD with HEARING
13 

ø(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. 

ø(b) ADDITIONAL PREMIUM REQUIREMENTS.— ø(1) ADJUSTMENT OF PREMIUMS.— ø(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. 

ø(B) RECALCULATED PREMIUM IF REQUIRED FOR PROGRAM

SOLVENCY.— ø(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). 

ø(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— 

ø(I) has attained age 65; 

ø(II) has paid premiums for enrollment in the 

program for at least 20 years; and 

ø(III) is not actively employed. 

ø(C) RECALCULATED PREMIUM IF REENROLLMENT AFTER

MORE THAN A 3-MONTH LAPSE.— 

ø(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. 

ø(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 


rfrederick on DSK6VPTVN1PROD with HEARING
14 

month for which the individual failed to pay the 

monthly premium required to maintain the individual’s enrollment in the program shall be— 

ø(I) credited with any months of paid premiums 

that accrued prior to the individual’s lapse in enrollment; and 

ø(II) notwithstanding the total amount of any 

such credited months, required to satisfy section 

3202(6)(A)(ii) before being eligible to receive benefits. 

ø(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). 

ø(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— 

ø(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 

ø(ii) 1 percent of the applicable age-adjusted premium for each such month occurring in such period. 

ø(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. 

ø(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— 

ø(A) determine the monthly premium for enrollment in 

the CLASS program; or 

ø(B) prevent an individual from enrolling in the program. 

ø(c) SELF-ATTESTATION AND VERIFICATION OF INCOME.—The Secretary shall establish procedures to— 

ø(1) permit an individual who is eligible for the nominal premium required under subsection (a)(1)(A)(ii) to self-attest that 


rfrederick on DSK6VPTVN1PROD with HEARING
15 

their income does not exceed the poverty line or that their status as a full-time student who is actively employed; 

ø(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 

ø(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. 

øSEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIREMENTS. 

ø(a) AUTOMATIC ENROLLMENT.— 

ø(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. 

ø(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— 

ø(A) who is self-employed; 

ø(B) who has more than 1 employer; or 

ø(C) whose employer does not elect to participate in the 

automatic enrollment process established by the Secretary. 

ø(3) ADMINISTRATION.— 

ø(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. 

ø(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. 

ø(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. 

ø(c) INDIVIDUAL DESCRIBED.—For purposes of enrolling in the 

CLASS program, an individual described in this paragraph is an 

individual— 

ø(1) who has attained age 18; 

ø(2) who— 

ø(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 

ø(B) derives self-employment income on which there is 

imposed a tax under section 1401(a) of the Internal Revenue Code of 1986; 

ø(3) who is actively employed; and 

ø(4) who is not— 


rfrederick on DSK6VPTVN1PROD with HEARING
16 

ø(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 

ø(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)). 

ø(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. 

ø(e) PAYMENT.— ø(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. 

ø(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— 

ø(A) who does not have an employer who elects to deduct 

and withhold premiums in accordance with paragraph (1); 

or 

ø(B) who does not earn wages or derive self-employment 

income. 

ø(f) TRANSFER OF PREMIUMS COLLECTED.— ø(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. 

ø(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. 

ø(g) OTHER ENROLLMENT AND DISENROLLMENT OPPORTUNITIES.— 

The Secretary, in coordination with the Secretary of the Treasury, 

shall establish procedures under which— 

ø(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 


rfrederick on DSK6VPTVN1PROD with HEARING
17 

ø(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. 

øSEC. 3205. BENEFITS. 

ø(a) DETERMINATION OF ELIGIBILITY.— 

ø(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. 

ø(2) ELIGIBILITY ASSESSMENTS.— 

ø(A) IN GENERAL.—Not later than January 1, 2012, the 

Secretary shall— 

ø(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; 

ø(ii) enter into an agreement with the Protection 

and Advocacy System for each State to provide advocacy services in accordance with subsection (d); and 

ø(iii) enter into an agreement with public and private entities to provide advice and assistance counseling in accordance with subsection (e). 

ø(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). 

ø(C) PRESUMPTIVE ELIGIBILITY FOR CERTAIN INSTITUTIONALIZED ENROLLEES PLANNING TO DISCHARGE.—An active enrollee shall be deemed presumptively eligible if the 

enrollee— 

ø(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; 

ø(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 

ø(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. 

ø(D) APPEALS.—The Secretary shall establish procedures 

under which an applicant for benefits under the CLASS 


rfrederick on DSK6VPTVN1PROD with HEARING
18 

Independence Benefit Plan shall be guaranteed the right 

to appeal an adverse determination. 

ø(b) BENEFITS.—An eligible beneficiary shall receive the following 

benefits under the CLASS Independence Benefit Plan: 

ø(1) CASH BENEFIT.—A cash benefit established by the Secretary in accordance with the requirements of section 

3203(a)(1)(D) that— 

ø(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 

ø(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. 

ø(2) ADVOCACY SERVICES.—Advocacy services in accordance 

with subsection (d). 

ø(3) ADVICE AND ASSISTANCE COUNSELING.—Advice and assistance counseling in accordance with subsection (e). 

ø(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). 

ø(c) PAYMENT OF BENEFITS.— 

ø(1) LIFE INDEPENDENCE ACCOUNT.— 

ø(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. 

ø(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. 

ø(C) ELECTRONIC MANAGEMENT OF FUNDS.—The Secretary shall establish procedures for— 

ø(i) crediting an account established on behalf of a 

beneficiary with the beneficiary’s cash daily benefit; 


rfrederick on DSK6VPTVN1PROD with HEARING
19 

ø(ii) allowing the beneficiary to access such account 

through debit cards; and 

ø(iii) accounting for withdrawals by the beneficiary 

from such account. 

ø(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: 

ø(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. 

ø(ii) BENEFICIARIES RECEIVING HOME AND COMMU- NITY-BASED SERVICES.— ø(I) 50 PERCENT OF BENEFIT RETAINED BY BENE- FICIARY.—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. 

ø(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. 

ø(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 comVerDate Mar 15 2010 04:56 Jan 24, 2012 Jkt 019006 PO 00000 Frm 00019 Fmt 6659 Sfmt 6602 E:\HR\OC\HR342P2.XXX HR342P2

rfrederick on DSK6VPTVN1PROD with HEARING
20 

munity-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. 

ø(iii) BENEFICIARIES ENROLLED IN PROGRAMS OF ALLINCLUSIVE CARE FOR THE ELDERLY (PACE).— 

ø(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. 

ø(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). 

ø(2) AUTHORIZED REPRESENTATIVES.— 

ø(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. 

ø(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. 

ø(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. 

ø(4) ROLLOVER OPTION FOR LUMP-SUM PAYMENT.—An eligible 

beneficiary may elect to— 

ø(A) defer payment of their daily or weekly benefit and 

to rollover any such deferred benefits from month-tomonth, but not from year-to-year; and 

ø(B) receive a lump-sum payment of such deferred benefits in an amount that may not exceed the lesser of— 


rfrederick on DSK6VPTVN1PROD with HEARING
21 

ø(i) the total amount of the accrued deferred benefits; or 

ø(ii) the applicable annual benefit. 

ø(5) PERIOD FOR DETERMINATION OF ANNUAL BENEFITS.— 

ø(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. 

ø(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. 

ø(C) RECOUPMENT OF UNPAID, ACCRUED BENEFITS.— 

ø(i) IN GENERAL.—The Secretary, in coordination 

with the Secretary of the Treasury, shall recoup any 

accrued benefits in the event of— 

ø(I) the death of a beneficiary; or 

ø(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. 

ø(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. 

ø(6) REQUIREMENT TO RECERTIFY ELIGIBILITY FOR RECEIPT OF

BENEFITS.—An eligible beneficiary shall periodically, as determined by the Secretary— 

ø(A) recertify by submission of medical evidence the 

beneficiary’s continued eligibility for receipt of benefits; 

and 

ø(B) submit records of expenditures attributable to the 

aggregate cash benefit received by the beneficiary during 

the preceding year. 

ø(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. 

ø(d) ADVOCACY SERVICES.—An agreement entered into under 

subsection (a)(2)(A)(ii) shall require the Protection and Advocacy 

System for the State to— 

ø(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— 

ø(A) information regarding how to access the appeals 

process established for the program; 


rfrederick on DSK6VPTVN1PROD with HEARING
22 

ø(B) assistance with respect to the annual recertification 

and notification required under subsection (c)(6); and 

ø(C) such other assistance with obtaining services as the 

Secretary, by regulation, shall require; and 

ø(2) ensure that the System and such counselors comply with 

the requirements of subsection (h). 

ø(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— 

ø(1) accessing and coordinating long-term services and supports in the most integrated setting; 

ø(2) possible eligibility for other benefits and services; 

ø(3) development of a service and support plan; 

ø(4) information about programs established under the Assistive Technology Act of 1998 and the services offered under 

such programs; 

ø(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 

ø(6) such other services as the Secretary, by regulation, may 

require. 

ø(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.). 

ø(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. 

ø(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: 

ø(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. 


rfrederick on DSK6VPTVN1PROD with HEARING
23 

ø(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. 

ø(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. 

ø(4) The entity assists the active enrollee or beneficiary to 

access desired services, regardless of the provider. 

ø(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. 

ø(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. 

ø(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. 

øSEC. 3206. CLASS INDEPENDENCE FUND. 

ø(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— 

ø(1) to be held for investment on behalf of individuals enrolled in the CLASS program; 

ø(2) to pay the administrative expenses related to the Fund 

and to investment under subsection (b); and 

ø(3) to pay cash benefits to eligible beneficiaries under the 

CLASS Independence Benefit Plan. 

ø(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). 

ø(c) BOARD OF TRUSTEES.— 

ø(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 


rfrederick on DSK6VPTVN1PROD with HEARING
24 

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. 

ø(2) DUTIES.— 

ø(A) IN GENERAL.—It shall be the duty of the Board of 

Trustees to do the following: 

ø(i) Hold the CLASS Independence Fund. 

ø(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. 

ø(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). 

ø(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. 

ø(B) REPORT.—The report provided for in subparagraph 

(A)(ii) shall— 

ø(i) include— 

ø(I) a statement of the assets of, and the disbursements made from, the CLASS Independence 

Fund during the preceding fiscal year; 

ø(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; 

ø(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 

ø(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 


rfrederick on DSK6VPTVN1PROD with HEARING
25 

ø(ii) be printed as a House document of the session 

of the Congress to which the report is made. 

ø(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. 

øSEC. 3207. CLASS INDEPENDENCE ADVISORY COUNCIL. 

ø(a) ESTABLISHMENT.—There is hereby created an Advisory Committee to be known as the ‘‘CLASS Independence Advisory Council’’. 

ø(b) MEMBERSHIP.— 

ø(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— 

ø(A) who shall be appointed by the President without regard to the civil service laws and regulations; and 

ø(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. 

ø(2) TERMS.— 

ø(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). 

ø(B) LIMITATION.—A member shall not be eligible to 

serve for more than 2 consecutive terms. 

ø(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. 

ø(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— 

ø(1) the development of the CLASS Independence Benefit 

Plan under section 3203; 

ø(2) the determination of monthly premiums under such 

plan; and 

ø(3) the financial solvency of the program. 


rfrederick on DSK6VPTVN1PROD with HEARING
26 

ø(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. 

ø(e) AUTHORIZATION OF APPROPRIATIONS.— 

ø(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. 

ø(2) AVAILABILITY.—Any sums appropriated under the authorization contained in this section shall remain available, 

without fiscal year limitation, until expended. 

øSEC. 3208. SOLVENCY AND FISCAL INDEPENDENCE; REGULATIONS; 

ANNUAL REPORT. 

ø(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. 

ø(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. 

ø(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. 

ø(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: 

ø(1) The total number of enrollees in the program. 

ø(2) The total number of eligible beneficiaries during the fiscal year. 

ø(3) The total amount of cash benefits provided during the 

fiscal year. 

ø(4) A description of instances of fraud or abuse identified 

during the fiscal year. 

ø(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. 

øSEC. 3209. INSPECTOR GENERAL’S REPORT. 

øThe 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: 

ø(1) The eligibility determination process. 

ø(2) The provision of cash benefits. 


rfrederick on DSK6VPTVN1PROD with HEARING
27 

ø(3) Quality assurance and protection against waste, fraud, 

and abuse. 

ø(4) Recouping of unpaid and accrued benefits. 

øSEC. 3210. TAX TREATMENT OF PROGRAM. 

øThe CLASS program shall be treated for purposes of the Internal Revenue Code of 1986 in the same manner as a qualified longterm care insurance contract for qualified long-term care services.¿ 

PATIENT PROTECTION AND AFFORDABLE CARE ACT 

* * * * * * * 

øTITLE VIII—CLASS ACT 

øSEC. 8001. SHORT TITLE OF TITLE. 

øThis title may be cited as the ‘‘Community Living Assistance 

Services and Supports Act’’ or the ‘‘CLASS Act’’. 

øSEC. 8002. ESTABLISHMENT OF NATIONAL VOLUNTARY INSURANCE 

PROGRAM FOR PURCHASING COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORT. 

ø(a) ESTABLISHMENT OF CLASS PROGRAM.— ø(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: 

ø‘‘TITLE XXXII—COMMUNITY LIVING ASSISTANCE 

SERVICES AND SUPPORTS 

ø‘‘SEC. 3201. PURPOSE. 

øThe purpose of this title is to establish a national voluntary insurance program for purchasing community living assistance services and supports in order to— 

ø‘‘(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; 

ø‘‘(2) establish an infrastructure that will help address the 

Nation’s community living assistance services and supports 

needs; 

ø‘‘(3) alleviate burdens on family caregivers; and 

ø‘‘(4) address institutional bias by providing a financing 

mechanism that supports personal choice and independence to 

live in the community. 

ø‘‘SEC. 3202. DEFINITIONS. 

øIn this title: 

ø‘‘(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. 

ø‘‘(2) ACTIVELY EMPLOYED.—The term ‘actively employed’ 

means an individual who— 

ø‘‘(A) is reporting for work at the individual’s usual place 

of employment or at another location to which the indiVerDate Mar 15 2010 04:56 Jan 24, 2012 Jkt 019006 PO 00000 Frm 00027 Fmt 6659 Sfmt 6601 E:\HR\OC\HR342P2.XXX HR342P2

rfrederick on DSK6VPTVN1PROD with HEARING
28 

vidual 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 

ø‘‘(B) is able to perform all the usual and customary duties of the individual’s employment on the individual’s regular work schedule. 

ø‘‘(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: 

ø‘‘(A) Eating. 

ø‘‘(B) Toileting. 

ø‘‘(C) Transferring. 

ø‘‘(D) Bathing. 

ø‘‘(E) Dressing. 

ø‘‘(F) Continence. 

ø‘‘(4) CLASS PROGRAM.—The term ‘CLASS program’ means 

the program established under this title. 

ø‘‘(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. 

ø‘‘(6) ELIGIBLE BENEFICIARY.— 

ø‘‘(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)— 

ø‘‘(i) has paid premiums for enrollment in such program for at least 60 months; 

ø‘‘(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 

ø‘‘(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. 

ø‘‘(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. 

ø‘‘(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. 


rfrederick on DSK6VPTVN1PROD with HEARING
29 

ø‘‘(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. 

ø‘‘(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. 

ø‘‘(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. 

ø‘‘(10) CLASS INDEPENDENCE FUND.—The term ‘CLASS 

Independence Fund’ or ‘Fund’ means the fund established 

under section 3206. 

ø‘‘(11) MEDICAID.—The term ‘Medicaid’ means the program 

established under title XIX of the Social Security Act (42 

U.S.C. 1396 et seq.). 

ø‘‘(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)). 

ø‘‘(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). 

ø‘‘SEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN. 

ø‘‘(a) PROCESS FOR DEVELOPMENT.— 

ø‘‘(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: 

ø‘‘(A) PREMIUMS.— 

ø‘‘(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. 

ø‘‘(ii) NOMINAL PREMIUM FOR POOREST INDIVIDUALS

AND FULL-TIME STUDENTS.— 

ø‘‘(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— 

ø‘‘(aa) any individual whose income does not 

exceed the poverty line; and 


rfrederick on DSK6VPTVN1PROD with HEARING
30 

ø‘‘(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). 

ø‘‘(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. 

ø‘‘(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. 

ø‘‘(B) VESTING PERIOD.—A 5-year vesting period for eligibility for benefits. 

ø‘‘(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: 

ø‘‘(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. 

ø‘‘(ii) The individual requires substantial supervision 

to protect the individual from threats to health and 

safety due to substantial cognitive impairment. 

ø‘‘(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). 

ø‘‘(D) CASH BENEFIT.—Payment of a cash benefit that 

satisfies the following requirements: 

ø‘‘(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). 

ø‘‘(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. 


rfrederick on DSK6VPTVN1PROD with HEARING
31 

ø‘‘(iii) DAILY OR WEEKLY.—The benefit is paid on a 

daily or weekly basis. 

ø‘‘(iv) NO LIFETIME OR AGGREGATE LIMIT.—The benefit is not subject to any lifetime or aggregate limit. 

ø‘‘(2) REVIEW AND RECOMMENDATION BY THE CLASS INDE- PENDENCE ADVISORY COUNCIL.—The CLASS Independence Advisory Council shall— 

ø‘‘(A) evaluate the alternative benefit plans developed 

under paragraph (1); and 

ø‘‘(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. 

ø‘‘(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. 

ø‘‘(b) ADDITIONAL PREMIUM REQUIREMENTS.— ø‘‘(1) ADJUSTMENT OF PREMIUMS.— ø‘‘(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. 

ø‘‘(B) RECALCULATED PREMIUM IF REQUIRED FOR PRO- GRAM SOLVENCY.— ø‘‘(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). 

ø‘‘(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— 

ø‘‘(I) has attained age 65; 


rfrederick on DSK6VPTVN1PROD with HEARING
32 

ø‘‘(II) has paid premiums for enrollment in the 

program for at least 20 years; and 

ø‘‘(III) is not actively employed. 

ø‘‘(C) RECALCULATED PREMIUM IF REENROLLMENT AFTER

MORE THAN A 3-MONTH LAPSE.— 

ø‘‘(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. 

ø‘‘(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— 

ø‘‘(I) credited with any months of paid premiums that accrued prior to the individual’s lapse 

in enrollment; and 

ø‘‘(II) notwithstanding the total amount of any 

such credited months, required to satisfy section 

3202(6)(A)(ii) before being eligible to receive benefits. 

ø‘‘(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). 

ø‘‘(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— 

ø‘‘(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 

ø‘‘(ii) 1 percent of the applicable age-adjusted premium for each such month occurring in such period. 


rfrederick on DSK6VPTVN1PROD with HEARING
33 

ø‘‘(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. 

ø‘‘(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— 

ø‘‘(A) determine the monthly premium for enrollment in 

the CLASS program; or 

ø‘‘(B) prevent an individual from enrolling in the program. 

ø‘‘(c) SELF-ATTESTATION AND VERIFICATION OF INCOME.—The Secretary shall establish procedures to— 

ø‘‘(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; 

ø‘‘(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 

ø‘‘(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. 

ø‘‘SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIREMENTS. 

ø‘‘(a) AUTOMATIC ENROLLMENT.— 

ø‘‘(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. 

ø‘‘(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— 

ø‘‘(A) who is self-employed; 

ø‘‘(B) who has more than 1 employer; or 

ø‘‘(C) whose employer does not elect to participate in the 

automatic enrollment process established by the Secretary. 

ø‘‘(3) ADMINISTRATION.— 

ø‘‘(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. 

ø‘‘(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. 


rfrederick on DSK6VPTVN1PROD with HEARING
34 

ø‘‘(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. 

ø‘‘(c) INDIVIDUAL DESCRIBED.—For purposes of enrolling in the 

CLASS program, an individual described in this paragraph is an 

individual— 

ø‘‘(1) who has attained age 18; 

ø‘‘(2) who— 

ø‘‘(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 

ø‘‘(B) derives self-employment income on which there is 

imposed a tax under section 1401(a) of the Internal Revenue Code of 1986; 

ø‘‘(3) who is actively employed; and 

ø‘‘(4) who is not— 

ø‘‘(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 

ø‘‘(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)). 

ø‘‘(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. 

ø‘‘(e) PAYMENT.— ø‘‘(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. 

ø‘‘(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— 

ø‘‘(A) who does not have an employer who elects to deduct and withhold premiums in accordance with paragraph 

(1); or 

ø‘‘(B) who does not earn wages or derive self-employment income. 

ø‘‘(f) TRANSFER OF PREMIUMS COLLECTED.— 

ø‘‘(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. 

ø‘‘(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 


rfrederick on DSK6VPTVN1PROD with HEARING
35 

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. 

ø‘‘(g) OTHER ENROLLMENT AND DISENROLLMENT OPPORTUNITIES.— The Secretary, in coordination with the Secretary of the Treasury, 

shall establish procedures under which— 

ø‘‘(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 

ø‘‘(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. 

ø‘‘SEC. 3205. BENEFITS. 

ø‘‘(a) DETERMINATION OF ELIGIBILITY.— ø‘‘(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. 

ø‘‘(2) ELIGIBILITY ASSESSMENTS.— ø‘‘(A) IN GENERAL.—Not later than January 1, 2012, the 

Secretary shall— 

ø‘‘(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; 

ø‘‘(ii) enter into an agreement with the Protection 

and Advocacy System for each State to provide advocacy services in accordance with subsection (d); and 

ø‘‘(iii) enter into an agreement with public and private entities to provide advice and assistance counseling in accordance with subsection (e). 

ø‘‘(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). 

ø‘‘(C) PRESUMPTIVE ELIGIBILITY FOR CERTAIN INSTITUTIONALIZED ENROLLEES PLANNING TO DISCHARGE.—An acVerDate Mar 15 2010 04:56 Jan 24, 2012 Jkt 019006 PO 00000 Frm 00035 Fmt 6659 Sfmt 6601 E:\HR\OC\HR342P2.XXX HR342P2

rfrederick on DSK6VPTVN1PROD with HEARING
36 

tive enrollee shall be deemed presumptively eligible if the 

enrollee— 

ø‘‘(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; 

ø‘‘(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 

ø‘‘(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. 

ø‘‘(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. 

ø‘‘(b) BENEFITS.—An eligible beneficiary shall receive the following benefits under the CLASS Independence Benefit Plan: 

ø‘‘(1) CASH BENEFIT.—A cash benefit established by the Secretary in accordance with the requirements of section 

3203(a)(1)(D) that— 

ø‘‘(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 

ø‘‘(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. 

ø‘‘(2) ADVOCACY SERVICES.—Advocacy services in accordance 

with subsection (d). 

ø‘‘(3) ADVICE AND ASSISTANCE COUNSELING.—Advice and assistance counseling in accordance with subsection (e). 

ø‘‘(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). 

ø‘‘(c) PAYMENT OF BENEFITS.— 

ø‘‘(1) LIFE INDEPENDENCE ACCOUNT.— 

ø‘‘(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. 

ø‘‘(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 


rfrederick on DSK6VPTVN1PROD with HEARING
37 

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. 

ø‘‘(C) ELECTRONIC MANAGEMENT OF FUNDS.—The Secretary shall establish procedures for— 

ø‘‘(i) crediting an account established on behalf of a 

beneficiary with the beneficiary’s cash daily benefit; 

ø‘‘(ii) allowing the beneficiary to access such account 

through debit cards; and 

ø‘‘(iii) accounting for withdrawals by the beneficiary 

from such account. 

ø‘‘(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: 

ø‘‘(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. 

ø‘‘(ii) BENEFICIARIES RECEIVING HOME AND COMMU- NITY-BASED SERVICES.— ø‘‘(I) 50 PERCENT OF BENEFIT RETAINED BY BENE- FICIARY.—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. 

ø‘‘(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 communitybased waiver under section 1115 of the Social SeVerDate Mar 15 2010 04:56 Jan 24, 2012 Jkt 019006 PO 00000 Frm 00037 Fmt 6659 Sfmt 6601 E:\HR\OC\HR342P2.XXX HR342P2

rfrederick on DSK6VPTVN1PROD with HEARING
38 

curity 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. 

ø‘‘(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. 

ø‘‘(iii) BENEFICIARIES ENROLLED IN PROGRAMS OF

ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE).— 

ø‘‘(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. 

ø‘‘(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). 

ø‘‘(2) AUTHORIZED REPRESENTATIVES.— 

ø‘‘(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. 

ø‘‘(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 


rfrederick on DSK6VPTVN1PROD with HEARING
39 

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. 

ø‘‘(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. 

ø‘‘(4) ROLLOVER OPTION FOR LUMP-SUM PAYMENT.—An eligible beneficiary may elect to— 

ø‘‘(A) defer payment of their daily or weekly benefit and 

to rollover any such deferred benefits from month-tomonth, but not from year-to-year; and 

ø‘‘(B) receive a lump-sum payment of such deferred benefits in an amount that may not exceed the lesser of— 

ø‘‘(i) the total amount of the accrued deferred benefits; or 

ø‘‘(ii) the applicable annual benefit. 

ø‘‘(5) PERIOD FOR DETERMINATION OF ANNUAL BENEFITS.— ø‘‘(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. 

ø‘‘(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. 

ø‘‘(C) RECOUPMENT OF UNPAID, ACCRUED BENEFITS.— 

ø‘‘(i) IN GENERAL.—The Secretary, in coordination 

with the Secretary of the Treasury, shall recoup any 

accrued benefits in the event of— 

ø‘‘(I) the death of a beneficiary; or 

ø‘‘(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. 

ø‘‘(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. 

ø‘‘(6) REQUIREMENT TO RECERTIFY ELIGIBILITY FOR RECEIPT

OF BENEFITS.—An eligible beneficiary shall periodically, as determined by the Secretary— 

ø‘‘(A) recertify by submission of medical evidence the 

beneficiary’s continued eligibility for receipt of benefits; 

and 

ø‘‘(B) submit records of expenditures attributable to the 

aggregate cash benefit received by the beneficiary during 

the preceding year. 

ø‘‘(7) SUPPLEMENT, NOT SUPPLANT OTHER HEALTH CARE BENEFITS.—Subject to the Medicaid payment rules under paragraph 


rfrederick on DSK6VPTVN1PROD with HEARING
40 

(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. 

ø‘‘(d) ADVOCACY SERVICES.—An agreement entered into under 

subsection (a)(2)(A)(ii) shall require the Protection and Advocacy 

System for the State to— 

ø‘‘(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— 

ø‘‘(A) information regarding how to access the appeals 

process established for the program; 

ø‘‘(B) assistance with respect to the annual recertification and notification required under subsection (c)(6); 

and 

ø‘‘(C) such other assistance with obtaining services as 

the Secretary, by regulation, shall require; and 

ø‘‘(2) ensure that the System and such counselors comply 

with the requirements of subsection (h). 

ø‘‘(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— 

ø‘‘(1) accessing and coordinating long-term services and supports in the most integrated setting; 

ø‘‘(2) possible eligibility for other benefits and services; 

ø‘‘(3) development of a service and support plan; 

ø‘‘(4) information about programs established under the Assistive Technology Act of 1998 and the services offered under 

such programs; 

ø‘‘(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 

ø‘‘(6) such other services as the Secretary, by regulation, may 

require. 

ø‘‘(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.). 

ø‘‘(g) RULE OF CONSTRUCTION.—Nothing in this title shall be construed as prohibiting benefits paid under the CLASS Independence 


rfrederick on DSK6VPTVN1PROD with HEARING
41 

Benefit Plan from being used to compensate a family caregiver for 

providing community living assistance services and supports to an 

eligible beneficiary. 

ø‘‘(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: 

ø‘‘(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. 

ø‘‘(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. 

ø‘‘(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. 

ø‘‘(4) The entity assists the active enrollee or beneficiary to 

access desired services, regardless of the provider. 

ø‘‘(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. 

ø‘‘(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. 

ø‘‘(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. 

ø‘‘SEC. 3206. CLASS INDEPENDENCE FUND. 

ø‘‘(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— 

ø‘‘(1) to be held for investment on behalf of individuals enrolled in the CLASS program; 

ø‘‘(2) to pay the administrative expenses related to the Fund 

and to investment under subsection (b); and 

ø‘‘(3) to pay cash benefits to eligible beneficiaries under the 

CLASS Independence Benefit Plan. 

ø‘‘(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). 


rfrederick on DSK6VPTVN1PROD with HEARING
42 

ø‘‘(c) BOARD OF TRUSTEES.— ø‘‘(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. 

ø‘‘(2) DUTIES.— ø‘‘(A) IN GENERAL.—It shall be the duty of the Board of 

Trustees to do the following: 

ø‘‘(i) Hold the CLASS Independence Fund. 

ø‘‘(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. 

ø‘‘(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). 

ø‘‘(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. 

ø‘‘(B) REPORT.—The report provided for in subparagraph 

(A)(ii) shall— 

ø‘‘(i) include— 

ø‘‘(I) a statement of the assets of, and the disbursements made from, the CLASS Independence 

Fund during the preceding fiscal year; 

ø‘‘(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; 


rfrederick on DSK6VPTVN1PROD with HEARING
43 

ø‘‘(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 

ø‘‘(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 

ø‘‘(ii) be printed as a House document of the session 

of the Congress to which the report is made. 

ø‘‘(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. 

ø‘‘SEC. 3207. CLASS INDEPENDENCE ADVISORY COUNCIL. 

ø‘‘(a) ESTABLISHMENT.—There is hereby created an Advisory 

Committee to be known as the ‘CLASS Independence Advisory 

Council’. 

ø‘‘(b) MEMBERSHIP.— ø‘‘(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— 

ø‘‘(A) who shall be appointed by the President without 

regard to the civil service laws and regulations; and 

ø‘‘(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. 

ø‘‘(2) TERMS.— 

ø‘‘(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). 

ø‘‘(B) LIMITATION.—A member shall not be eligible to 

serve for more than 2 consecutive terms. 

ø‘‘(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. 


rfrederick on DSK6VPTVN1PROD with HEARING
44 

ø‘‘(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— 

ø‘‘(1) the development of the CLASS Independence Benefit 

Plan under section 3203; 

ø‘‘(2) the determination of monthly premiums under such 

plan; and 

ø‘‘(3) the financial solvency of the program. 

ø‘‘(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. 

ø‘‘(e) AUTHORIZATION OF APPROPRIATIONS.— 

ø‘‘(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. 

ø‘‘(2) AVAILABILITY.—Any sums appropriated under the authorization contained in this section shall remain available, 

without fiscal year limitation, until expended. 

ø‘‘SEC. 3208. SOLVENCY AND FISCAL INDEPENDENCE; REGULATIONS; 

ANNUAL REPORT. 

ø‘‘(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. 

ø‘‘(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. 

ø‘‘(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. 

ø‘‘(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: 

ø‘‘(1) The total number of enrollees in the program. 

ø‘‘(2) The total number of eligible beneficiaries during the fiscal year. 

ø‘‘(3) The total amount of cash benefits provided during the 

fiscal year. 

ø‘‘(4) A description of instances of fraud or abuse identified 

during the fiscal year. 

ø‘‘(5) Recommendations for such administrative or legislative 

action as the Secretary determines is necessary to improve the 


rfrederick on DSK6VPTVN1PROD with HEARING
45 

program, ensure the solvency of the program, or to prevent the 

occurrence of fraud or abuse. 

ø‘‘SEC. 3209. INSPECTOR GENERAL’S REPORT. 

øThe 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: 

ø‘‘(1) The eligibility determination process. 

ø‘‘(2) The provision of cash benefits. 

ø‘‘(3) Quality assurance and protection against waste, fraud, 

and abuse. 

ø‘‘(4) Recouping of unpaid and accrued benefits. 

ø‘‘SEC. 3210. TAX TREATMENT OF PROGRAM. 

ø‘‘The CLASS program shall be treated for purposes of the Internal Revenue Code of 1986 in the same manner as a qualified longterm care insurance contract for qualified long-term care services.’’. 

ø(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: 

ø‘‘(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’’. 

ø(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: 

ø‘‘(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— 

ø‘‘(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; 

ø‘‘(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 


rfrederick on DSK6VPTVN1PROD with HEARING
46 

ø‘‘(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.’’. 

ø(c) PERSONAL CARE ATTENDANTS WORKFORCE ADVISORY PANEL.— 

ø(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. 

ø(2) MEMBERSHIP.—In appointing members to the Personal 

Care Attendants Workforce Advisory Panel, the Secretary shall 

ensure that such members include the following: 

ø(A) Individuals with disabilities of all ages. 

ø(B) Senior individuals. 

ø(C) Representatives of individuals with disabilities. 

ø(D) Representatives of senior individuals. 

ø(E) Representatives of workforce and labor organizations. 

ø(F) Representatives of home and community-based 

service providers. 

ø(G) Representatives of assisted living providers. 

ø(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— 

ø(1) in paragraph (2)(A)— 

ø(A) in clause (ii), by striking ‘‘and’’ at the end; 

ø(B) in clause (iii), by striking the period at the end and 

inserting ‘‘; and’’; and 

ø(C) by adding at the end the following: 

ø‘‘(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 

ø(2) in paragraph (3), by striking ‘‘2010’’ and inserting 

‘‘2015’’. 

ø(e) EFFECTIVE DATE.—The amendments made by subsections (a), 

(b), and (d) take effect on January 1, 2011. 

ø(f) RULE OF CONSTRUCTION.—Nothing in this title or the amendments made by this title are intended to replace or displace public 


rfrederick on DSK6VPTVN1PROD with HEARING
47 

or private disability insurance benefits, including such benefits that 

are for income replacement.¿ 

* * * * * * * 

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 

ø(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; 

ø(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— 

ø(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; 

ø(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 

ø(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 conVerDate Mar 15 2010 04:56 Jan 24, 2012 Jkt 019006 PO 00000 Frm 00047 Fmt 6659 Sfmt 6601 E:\HR\OC\HR342P2.XXX HR342P2

rfrederick on DSK6VPTVN1PROD with HEARING
48 

trol 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¿ 

ø(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. 

* * * * * * * 

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 INFORMA- TION.— 

(1) * * * 

(2) DUTIES.— 

(A) IN GENERAL.—The National Clearinghouse for LongTerm 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 

partnershipsø; and¿. 


rfrederick on DSK6VPTVN1PROD with HEARING
49 

ø(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 

ø2015¿ 2010. 

* * * * * * * 


rfrederick on DSK6VPTVN1PROD with HEARING
(50) 

1See Dissenting Views, House Report 112–342, Part 1. 

VII. DISSENTING VIEWS

DISSENTING VIEWS ON H.R. 1173, FISCAL RESPONSIBILITY 

AND RETIREMENT SECURITY ACT OF 2011 

We are opposed to H.R. 1173, the so-called Fiscal Responsibility 

and Retirement Security Act of 2011. This bill would repeal the 

Community Living Assistance Services and Supports (CLASS) Act 

that was enacted as part of the Affordable Care Act in 2010. In 

considering H.R. 1173, precious Committee time has been used on 

the repeal of something that will not be implemented. H.R. 1173 

does nothing to advance the nation’s economic recovery, and it does 

nothing to address the long-term care needs of the nation. It serves 

only to divide and distract. 

There is clearly a need for a national effort to address the growing costs of and demand for long-term care. This pressing concern 

must be addressed responsibly. The national average cost of a private room in a nursing home is $70,000 per year, and the average 

rate for a home health aide is $25 per hour. These are costs that 

are well beyond the means of average middle-class families, senior 

citizens, and individuals with disabilities. There are presently tax 

incentives for qualified long-term care insurance policies. However, 

private insurance is not the answer for all, or even most, American 

families. Many families simply cannot afford the high cost of these 

policies, which become significantly more expensive as individuals 

grow older. Presently, private insurance pays for only about seven 

percent of all spending on long-term care, with approximately 

seven million policies in force. The typical purchaser of such private insurance has income of more than $75,000 per year and 

three-fourths of the policyholders have liquid assets in excess of 

$100,000. In contrast, one-half of all spending on long-term care 

is paid for by the federal government and the states through 

Medicaid—a program that is only available to low-income individuals and families. Long-term care services makes up approximately 

one-third of federal and state Medicaid spending—$111 billion in 

2009. The CLASS Act should remain on the books, even in its dormant form, as a reminder of the need to address the long-term 

care needs of the nation and to serve as a guide in fulfilling this 

endeavor. 

We agree with many of the policy issues raised by our colleagues 

in the Committee on Energy and Commerce during their mark-up 

of H.R. 1173.1 We also rebut two claims that were made during the 

Ways and Means mark-up of H.R. 1173. 

First, it was claimed during the mark-up that repeal of the 

CLASS Act was necessary in order to prevent a court ordering the 

Administration to implement the CLASS program. This claim is 

highly dubious. No such case has yet been filed in court. Furthermore, the Congressional Research Services analysis that was cited 

in making this claim does not suggest that such an outcome would 

be likely. The analysis, when read in its entirety, notes that there 


rfrederick on DSK6VPTVN1PROD with HEARING
51 

are a range of outcomes—one of which could be ordering the Administration to implement the program, but another of which could 

be agreeing with the Administration that the program cannot be 

implemented. 

Second, it was claimed during the mark-up that the CLASS program was added to the Affordable Care Act so that the Act would 

reduce the federal deficit. This is wrong. In a letter dated February 

18, 2011, to Speaker Boehner, the Congressional Budget Office and 

the Joint Committee on Taxation estimated that repeal of the Affordable Care Act would increase the federal deficit by $210 billion 

during 2011–2021. Of the deficit reduction achieved by the Affordable Care Act, approximately $86 billion was due to premiums collected under the CLASS program. Therefore, even if the $86 billion 

in deficit reduction that is attributed to the CLASS program is subtracted from the total amount, the Affordable Care Act still reduces 

the federal deficit by $124 billion during the window. It is important to note that the Congressional Budget Office has also said that 

the Affordable Care Act’s deficit reduction actually increases in the 

second 10 years of its existence. And it does so while also ensuring 

affordable, quality health coverage for all uninsured and under-insured Americans, eliminating job lock, and creating a functional 

private marketplace where hardworking individuals and families 

can shop for coverage options that meet their needs. 

The mark-up of H.R. 1173 is all the more striking because it occurs almost one year after the majority passed H.R. 2, a bill that 

would repeal the Affordable Care Act—including the CLASS Act. In 

that bill, the majority pledged to repeal and replace the health reform law. However, to date, there has been no replacement offered 

at all. Nothing has been offered by the majority that would allow 

adult children to remain on their parents’ health insurance policies, 

ban pre-existing condition limitations with respect to children, assist small businesses in the purchase of health insurance, or help 

senior citizens and people with disabilities fill the ‘‘donut hole’’ gap 

that exists with Medicare prescription drug coverage. Certainly, 

nothing has been offered that would help control health care costs 

or guarantee affordable, quality health coverage for all. These and 

other valuable benefits are all presently being provided pursuant 

to the Affordable Care Act. Assistance that the majority would repeal, but as of yet, not replace. 

SANDER M. LEVIN. 

CHARLES B. RANGEL. 

FORTNEY PETE STARK. 

JIM MCDERMOTT. 

JOHN LEWIS. 

RICHARD E. NEAL. 

XAVIER BECERRA. 

MIKE THOMPSON. 

JOHN B. LARSON. 

EARL BLUMENAUER. 

BILL PASCRELL, Jr. 

JOSEPH CROWLEY. 

Æ 


rfrederick on DSK6VPTVN1PROD with HEARING