```

[House Report 112-342]
[From the U.S. Government Publishing Office]

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 
program,\1\ as enacted under the ``Community Living Assistance 
Services and Supports Act,'' also called the ``CLASS Act.''\2\
---------------------------------------------------------------------------
    \1\Secs. 3201-3210 of the Public Health Service Act, 42 U.S.C. 
300ll et seq.
    \2\Title VIII of the Patient Protection and Affordable Care Act of 
2010, Pub. L. No. 111-148 (March 23, 2010).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \3\See H.R. Rep. No. 112-342, Part 1, for the bill as reported by 
the Committee on Energy and Commerce.
---------------------------------------------------------------------------

Committee action

    With the Committee on Ways and Means' referral on the bill 
scheduled to expire on February 1, 2012, the Committee marked 
up the bill on January 18, 2012, and ordered the bill favorably 
reported without an amendment.

Committee hearings

    The Committee has held numerous hearings on various aspects 
of the 2010 health care law during the 112th Congress. Four of 
those hearings--including one held on January 26, 2011; one 
held on February 10, 2011; and two held on February 16, 2011--
featured testimony or extensive Member discussion raising 
significant concerns about the CLASS program.

          II. Explanation of the Revenue Provision of the Bill

           A. REPEAL OF CLASS PROGRAM (SEC. 2(A) OF THE BILL)

Present Law

            CLASS program
    The CLASS Act amended the Public Health Service Act (the 
``PHSA'') to provide for the establishment of the CLASS program 
by HHS.\4\ The CLASS program would be a national voluntary 
long-term care insurance program allowing individuals to 
purchase long-term care insurance to provide benefits in the 
case of functional limitations, e.g., the inability to perform 
activities of daily living (such as bathing and dressing) or 
the need for supervision because of a cognitive impairment. The 
CLASS Act provides general criteria for premiums, vesting, 
benefits and other elements of the CLASS program, including 
that the program be actuarially sound and solvent throughout a 
75-year period.
---------------------------------------------------------------------------
    \4\Secs. 3201-3210 of the PHSA, 42 U.S.C. 300ll et seq.
---------------------------------------------------------------------------
    HHS has suspended work on establishment of the CLASS 
program because of the inability to develop a program meeting 
the applicable criteria.\5\
---------------------------------------------------------------------------
    \5\Letter from HHS Secretary Kathleen Sebelius to Congress, October 
14, 2011, available at www.hhs.gov/secretary/letter10142011.html.
---------------------------------------------------------------------------
            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.
---------------------------------------------------------------------------
    \6\Sec. 7702B. Except as otherwise stated, all section references 
herein are to the Internal Revenue Code of 1986, as amended (the 
``Code'').
---------------------------------------------------------------------------
    Premiums paid for a qualified long-term care insurance 
contract generally are deductible as medical expenses, subject 
to a dollar limit on the deductible amount of the premium per 
year based on the insured person's age (e.g., between ages 40 
and 50) at the end of the taxable year.\7\ Subject to the same 
dollar limit, premiums paid for qualified long-term care 
insurance by a self-employed individual generally are 
deductible.\8\
---------------------------------------------------------------------------
    \7\Secs. 7702B(a)(4) and 213(d)(10). Under section 213, medical 
expenses are generally allowed as a deduction only to the extent they 
exceed 7.5 percent of adjusted gross income (10 percent of adjusted 
gross income as of 2013).
    \8\Sec. 162(l).
---------------------------------------------------------------------------
    A qualified long-term care insurance contract is treated as 
an accident and health insurance contract, and amounts received 
under the contract are excludable from income as amounts 
received for personal injuries or sickness, subject to per-day 
dollar limits in certain cases.\9\ Amounts received under a 
qualified long-term care insurance contract (regardless of 
whether the contract reimburses expenses or pays benefits on a 
per diem or other periodic basis) are treated as reimbursement 
for expenses actually incurred for medical care.\10\
---------------------------------------------------------------------------
    \9\Secs. 7702B(a)(1), (a)(2), and (d) and 104(a)(3).
    \10\Sec. 7702B(a)(2).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \11\Secs. 7702B(a)(3), 105 and 106. However, the exclusion does not 
apply to qualified long-term care insurance provided through a flexible 
spending arrangement within the meaning of section 106(c). Further, 
under section 125(f), long-term care insurance is not permitted to be 
offered under a cafeteria plan.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \12\Sec. 3210 of the PHSA, 42 U.S.C. 300ll-9.
---------------------------------------------------------------------------

Reasons for Change

    The Committee believes that the CLASS program as enacted is 
not fiscally sustainable and should be repealed. As part of 
this repeal, the Committee believes that the provision treating 
the CLASS Program for tax purposes in the same manner as a 
qualified long-term care insurance contract should be repealed.

Explanation of Provision

    The provision repeals the statutory provisions relating to 
the CLASS program. Thus, the provision treating the CLASS 
program for Code purposes in the same manner as a qualified 
long-term care insurance contract for qualified long-term care 
services is repealed.

Effective Date

    The provision is effective on the date of enactment.

                      III. Votes of the Committee

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the vote of the Committee on Ways and Means in its 
consideration of H.R. 1173, the ``Fiscal Responsibility and 
Retirement Security Act of 2011.''
    The bill, H.R. 1173, was ordered favorably reported without 
amendment by a roll call vote of 23 yeas to 13 nays (with a 
quorum being present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Camp.......................        X   ........  .........  Mr. Levin........  ........        X   .........
Mr. Herger.....................        X   ........  .........  Mr. Rangel.......  ........        X   .........
Mr. Johnson....................        X   ........  .........  Mr. Stark........  ........        X   .........
Mr. Brady......................        X   ........  .........  Mr. McDermott....  ........        X   .........
Mr. Ryan.......................        X   ........  .........  Mr. Lewis........  ........        X   .........
Mr. Nunes......................        X   ........  .........  Mr. Neal.........  ........        X   .........
Mr. Tiberi.....................        X   ........  .........  Mr. Becerra......  ........        X   .........
Mr. Davis......................        X   ........  .........  Mr. Doggett......  ........        X   .........
Mr. Reichert...................        X   ........  .........  Mr. Thompson.....  ........        X   .........
Mr. Boustany...................        X   ........  .........  Mr. Larson.......  ........        X   .........
Mr. Roskam.....................        X   ........  .........  Mr. Blumenauer...  ........        X   .........
Mr. Gerlach....................        X   ........  .........  Mr. Kind.........        X   ........  .........
Mr. Price......................        X   ........  .........  Mr. Pascrell.....  ........        X   .........
Mr. Buchanan...................        X   ........  .........  Ms. Berkley......  ........  ........  .........
Mr. Smith......................        X   ........  .........  Mr. Crowley......  ........        X   .........
Mr. Schock.....................        X   ........  .........  .................  ........  ........  .........
Ms. Jenkins....................        X   ........  .........  .................  ........  ........  .........
Mr. Paulsen....................        X   ........  .........  .................  ........  ........  .........
Mr. Marchant...................        X   ........  .........  .................  ........  ........  .........
Mr. Berg.......................        X   ........  .........  .................  ........  ........  .........
Ms. Black......................        X   ........  .........  .................  ........  ........  .........
Mr. Reed.......................        X   ........  .........  .................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

                     IV. Budget Effects of the Bill

               A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS

    In compliance with clause 3(d) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of the revenue provision 
of the bill, H.R. 1173, as reported.
    The revenue provision of the bill, as reported, is 
estimated to have no effects on budget receipts for fiscal 
years 2012-2022.

B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX EXPENDITURES BUDGET 
                               AUTHORITY

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no new or increased budget authority. The 
Committee states further that the bill involves no new or 
increased tax expenditures.

      C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET OFFICE

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the CBO, the following statement by CBO is 
provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, January 19, 2012.
Hon. Dave Camp,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1173, the Fiscal 
Responsibility and Retirement Security Act of 2011.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Julia 
Mitchell.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 1173--Fiscal Responsibility and Retirement Security Act of 2011

    Summary: H.R. 1173 would repeal title VIII of the Patient 
Protection and Affordable Care Act (PPACA). That title of PPACA 
established the Community Living Assistance Services and 
Supports (CLASS) Program--a national, voluntary long-term care 
insurance program for purchasing community living assistance 
services and supports. Title VIII also authorized and 
appropriated funding through 2015 for the National 
Clearinghouse for Long-Term Care Information (clearinghouse). 
H.R. 1173 would rescind any unobligated balances appropriated 
to the National Clearinghouse for Long-Term Care Information.
    CBO estimates that enacting H.R. 1173 would reduce direct 
spending by $9 million over the 2012-2017 and 2012-2022 
periods. Pay-as-you-go procedures apply because enacting the 
legislation would affect direct spending. Enacting H.R. 1173 
would have no impact on federal revenues.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1173 is shown in the following table. 
The effects of this legislation fall within budget function 550 
(health).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    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.
---------------------------------------------------------------------------
    \1\Letter from Kathleen Sebelius, Secretary of the Department of 
Health and Human Services, to John A. Boehner, Speaker, House of 
Representatives, October 14, 2011.
---------------------------------------------------------------------------
    However, the Secretary's announcement does not affect use 
of the funds authorized and appropriated for the clearinghouse. 
Therefore, the rescission of unobligated funds for the 
clearinghouse for 2013 through 2015 would have a budgetary 
effect of reducing direct spending by $9 million over the 2012-
2022 period.
    Pay-as-you-go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table. 
Enacting H.R. 1173 would have no impact on federal revenues.

          CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 1173, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON JANUARY 18, 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  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 Pay-As-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.

        B. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill contains no measure that authorizes funding, so no 
statement of general performance goals and objectives for which 
any measure authorizing funding is required.

              C. INFORMATION RELATING TO UNFUNDED MANDATES

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the revenue provision of 
the bill does not contain Federal mandates on the private 
sector. The Committee has determined that the revenue provision 
of the bill does not impose a Federal intergovernmental mandate 
on State, local, or tribal governments.

                D. APPLICABILITY OF HOUSE RULE XXI 5(B)

    Rule XXI 5(b) of the Rules of the House of Representatives 
provides, in part, that ``A bill or joint resolution, 
amendment, or conference report carrying a Federal income tax 
rate increase may not be considered as passed or agreed to 
unless so determined by a vote of not less than three-fifths of 
the Members voting, a quorum being present.'' The Committee has 
carefully reviewed the provisions of the bill, and states that 
the provisions of the bill do not involve any Federal income 
tax rate increases within the meaning of the rule.

                       E. TAX COMPLEXITY ANALYSIS

    Section 4022(b) of the Internal Revenue Service Reform and 
Restructuring Act of 1998 (the ``IRS Reform Act'') requires the 
staff of the Joint Committee on Taxation (in consultation with 
the Internal Revenue Service and the Treasury Department) to 
provide a tax complexity analysis. The complexity analysis is 
required for all legislation reported by the Senate Committee 
on Finance, the House Committee on Ways and Means, or any 
committee of conference if the legislation includes a provision 
that directly or indirectly amends the Internal Revenue Code 
and has widespread applicability to individuals or small 
businesses.
    Pursuant to clause 3(h)(1) of rule XIII of the Rules of the 
House of Representatives, the staff of the Joint Committee on 
Taxation has determined that a complexity analysis is not 
required under section 4022(b) of the IRS Reform Act because 
the bill contains no provisions that amend the Code and that 
have ``widespread applicability'' to individuals or small 
businesses, within the meaning of the rule.

  F. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND LIMITED TARIFF 
                                BENEFITS

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill, and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

       VI. Changes in Existing Law Made by the Bill, As Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

              TITLE XXXII OF THE PUBLIC HEALTH SERVICE ACT

    [TITLE XXXII--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS

[SEC. 3201. PURPOSE.

  [The purpose of this title is to establish a national 
voluntary insurance program for purchasing community living 
assistance services and supports in order to--
          [(1) provide individuals with functional limitations 
        with tools that will allow them to maintain their 
        personal and financial independence and live in the 
        community through a new financing strategy for 
        community living assistance services and supports;
          [(2) establish an infrastructure that will help 
        address the Nation's community living assistance 
        services and supports needs;
          [(3) alleviate burdens on family caregivers; and
          [(4) address institutional bias by providing a 
        financing mechanism that supports personal choice and 
        independence to live in the community.

[SEC. 3202. DEFINITIONS.

  [In this title:
          [(1) Active enrollee.--The term ``active enrollee'' 
        means an individual who is enrolled in the CLASS 
        program in accordance with section 3204 and who has 
        paid any premiums due to maintain such enrollment.
          [(2) Actively employed.--The term ``actively 
        employed'' means an individual who--
                  [(A) is reporting for work at the 
                individual's usual place of employment or at 
                another location to which the individual is 
                required to travel because of the individual's 
                employment (or in the case of an individual who 
                is a member of the uniformed services, is on 
                active duty and is physically able to perform 
                the duties of the individual's position); and
                  [(B) is able to perform all the usual and 
                customary duties of the individual's employment 
                on the individual's regular work schedule.
          [(3) Activities of daily living.--The term 
        ``activities of daily living'' means each of the 
        following activities specified in section 
        7702B(c)(2)(B) of the Internal Revenue Code of 1986:
                  [(A) Eating.
                  [(B) Toileting.
                  [(C) Transferring.
                  [(D) Bathing.
                  [(E) Dressing.
                  [(F) Continence.
          [(4) CLASS program.--The term ``CLASS program'' means 
        the program established under this title.
          [(5) Eligibility assessment system.--The term 
        ``Eligibility Assessment System'' means the entity 
        established by the Secretary under section 3205(a)(2) 
        to make functional eligibility determinations for the 
        CLASS program.
          [(6) Eligible beneficiary.--
                  [(A) In general.--The term ``eligible 
                beneficiary'' means any individual who is an 
                active enrollee in the CLASS program and, as of 
                the date described in subparagraph (B)--
                          [(i) has paid premiums for enrollment 
                        in such program for at least 60 months;
                          [(ii) has earned, with respect to at 
                        least 3 calendar years that occur 
                        during the first 60 months for which 
                        the individual has paid premiums for 
                        enrollment in the program, at least an 
                        amount equal to the amount of wages and 
                        self-employment income which an 
                        individual must have in order to be 
                        credited with a quarter of coverage 
                        under section 213(d) of the Social 
                        Security Act for the year; and
                          [(iii) has paid premiums for 
                        enrollment in such program for at least 
                        24 consecutive months, if a lapse in 
                        premium payments of more than 3 months 
                        has occurred during the period that 
                        begins on the date of the individual's 
                        enrollment and ends on the date of such 
                        determination.
                  [(B) Date described.--For purposes of 
                subparagraph (A), the date described in this 
                subparagraph is the date on which the 
                individual is determined to have a functional 
                limitation described in section 3203(a)(1)(C) 
                that is expected to last for a continuous 
                period of more than 90 days.
                  [(C) Regulations.--The Secretary shall 
                promulgate regulations specifying exceptions to 
                the minimum earnings requirements under 
                subparagraph (A)(ii) for purposes of being 
                considered an eligible beneficiary for certain 
                populations.
          [(7) Hospital; nursing facility; intermediate care 
        facility for the mentally retarded; institution for 
        mental diseases.--The terms ``hospital'', ``nursing 
        facility'', ``intermediate care facility for the 
        mentally retarded'', and ``institution for mental 
        diseases'' have the meanings given such terms for 
        purposes of Medicaid.
          [(8) CLASS independence advisory council.--The term 
        ``CLASS Independence Advisory Council'' or ``Council'' 
        means the Advisory Council established under section 
        3207 to advise the Secretary.
          [(9) CLASS independence benefit plan.--The term 
        ``CLASS Independence Benefit Plan'' means the benefit 
        plan developed and designated by the Secretary in 
        accordance with section 3203.
          [(10) CLASS independence fund.--The term ``CLASS 
        Independence Fund'' or ``Fund'' means the fund 
        established under section 3206.
          [(11) Medicaid.--The term ``Medicaid'' means the 
        program established under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.).
          [(12) Poverty line.--The term ``poverty line'' has 
        the meaning given that term in section 2110(c)(5) of 
        the Social Security Act (42 U.S.C. 1397jj(c)(5)).
          [(13) Protection and advocacy system.--The term 
        ``Protection and Advocacy System'' means the system for 
        each State established under section 143 of the 
        Developmental Disabilities Assistance and Bill of 
        Rights Act of 2000 (42 U.S.C. 15043).

[SEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN.

  [(a) Process for Development.--
          [(1) In general.--The Secretary, in consultation with 
        appropriate actuaries and other experts, shall develop 
        at least 3 actuarially sound benefit plans as 
        alternatives for consideration for designation by the 
        Secretary as the CLASS Independence Benefit Plan under 
        which eligible beneficiaries shall receive benefits 
        under this title. Each of the plan alternatives 
        developed shall be designed to provide eligible 
        beneficiaries with the benefits described in section 
        3205 consistent with the following requirements:
                  [(A) Premiums.--
                          [(i) In general.--Beginning with the 
                        first year of the CLASS program, and 
                        for each year thereafter, subject to 
                        clauses (ii) and (iii), the Secretary 
                        shall establish all premiums to be paid 
                        by enrollees for the year based on an 
                        actuarial analysis of the 75-year costs 
                        of the program that ensures solvency 
                        throughout such 75-year period.
                          [(ii) Nominal premium for poorest 
                        individuals and full-time students.--
                                  [(I) In general.--The monthly 
                                premium for enrollment in the 
                                CLASS program shall not exceed 
                                the applicable dollar amount 
                                per month determined under 
                                subclause (II) for--
                                          [(aa) any individual 
                                        whose income does not 
                                        exceed the poverty 
                                        line; and
                                          [(bb) any individual 
                                        who has not attained 
                                        age 22, and is actively 
                                        employed during any 
                                        period in which the 
                                        individual is a full-
                                        time student (as 
                                        determined by the 
                                        Secretary).
                                  [(II) Applicable dollar 
                                amount.--The applicable dollar 
                                amount described in this 
                                subclause is the amount equal 
                                to $5, increased by the 
                                percentage increase in the 
                                consumer price index for all 
                                urban consumers (U.S. city 
                                average) for each year 
                                occurring after 2009 and before 
                                such year.
                          [(iii) Class independence fund 
                        reserves.--At such time as the CLASS 
                        program has been in operation for 10 
                        years, the Secretary shall establish 
                        all premiums to be paid by enrollees 
                        for the year based on an actuarial 
                        analysis that accumulated reserves in 
                        the CLASS Independence Fund would not 
                        decrease in that year. At such time as 
                        the Secretary determines the CLASS 
                        program demonstrates a sustained 
                        ability to finance expected yearly 
                        expenses with expected yearly premiums 
                        and interest credited to the CLASS 
                        Independence Fund, the Secretary may 
                        decrease the required amount of CLASS 
                        Independence Fund reserves.
                  [(B) Vesting period.--A 5-year vesting period 
                for eligibility for benefits.
                  [(C) Benefit triggers.--A benefit trigger for 
                provision of benefits that requires a 
                determination that an individual has a 
                functional limitation, as certified by a 
                licensed health care practitioner, described in 
                any of the following clauses that is expected 
                to last for a continuous period of more than 90 
                days:
                          [(i) The individual is determined to 
                        be unable to perform at least the 
                        minimum number (which may be 2 or 3) of 
                        activities of daily living as are 
                        required under the plan for the 
                        provision of benefits without 
                        substantial assistance (as defined by 
                        the Secretary) from another individual.
                          [(ii) The individual requires 
                        substantial supervision to protect the 
                        individual from threats to health and 
                        safety due to substantial cognitive 
                        impairment.
                          [(iii) The individual has a level of 
                        functional limitation similar (as 
                        determined under regulations prescribed 
                        by the Secretary) to the level of 
                        functional limitation described in 
                        clause (i) or (ii).
                  [(D) Cash benefit.--Payment of a cash benefit 
                that satisfies the following requirements:
                          [(i) Minimum required amount.--The 
                        benefit amount provides an eligible 
                        beneficiary with not less than an 
                        average of $50 per day (as determined 
                        based on the reasonably expected 
                        distribution of beneficiaries receiving 
                        benefits at various benefit levels).
                          [(ii) Amount scaled to functional 
                        ability.--The benefit amount is varied 
                        based on a scale of functional ability, 
                        with not less than 2, and not more than 
                        6, benefit level amounts.
                          [(iii) Daily or weekly.--The benefit 
                        is paid on a daily or weekly basis.
                          [(iv) No lifetime or aggregate 
                        limit.--The benefit is not subject to 
                        any lifetime or aggregate limit.
          [(2) Review and recommendation by the class 
        independence advisory council.--The CLASS Independence 
        Advisory Council shall--
                  [(A) evaluate the alternative benefit plans 
                developed under paragraph (1); and
                  [(B) recommend for designation as the CLASS 
                Independence Benefit Plan for offering to the 
                public the plan that the Council determines 
                best balances price and benefits to meet 
                enrollees' needs in an actuarially sound 
                manner, while optimizing the probability of the 
                long-term sustainability of the CLASS program.
          [(3) Designation by the secretary.--Not later than 
        October 1, 2012, the Secretary, taking into 
        consideration the recommendation of the CLASS 
        Independence Advisory Council under paragraph (2)(B), 
        shall designate a benefit plan as the CLASS 
        Independence Benefit Plan. The Secretary shall publish 
        such designation, along with details of the plan and 
        the reasons for the selection by the Secretary, in a 
        final rule that allows for a period of public comment.
  [(b) Additional Premium Requirements.--
          [(1) Adjustment of premiums.--
                  [(A) In general.--Except as provided in 
                subparagraphs (B), (C), (D), and (E), the 
                amount of the monthly premium determined for an 
                individual upon such individual's enrollment in 
                the CLASS program shall remain the same for as 
                long as the individual is an active enrollee in 
                the program.
                  [(B) Recalculated premium if required for 
                program solvency.--
                          [(i) In general.--Subject to clause 
                        (ii), if the Secretary determines, 
                        based on the most recent report of the 
                        Board of Trustees of the CLASS 
                        Independence Fund, the advice of the 
                        CLASS Independence Advisory Council, 
                        and the annual report of the Inspector 
                        General of the Department of Health and 
                        Human Services, and waste, fraud, and 
                        abuse, or such other information as the 
                        Secretary determines appropriate, that 
                        the monthly premiums and income to the 
                        CLASS Independence Fund for a year are 
                        projected to be insufficient with 
                        respect to the 20-year period that 
                        begins with that year, the Secretary 
                        shall adjust the monthly premiums for 
                        individuals enrolled in the CLASS 
                        program as necessary (but maintaining a 
                        nominal premium for enrollees whose 
                        income is below the poverty line or who 
                        are full-time students actively 
                        employed).
                          [(ii) Exemption from increase.--Any 
                        increase in a monthly premium imposed 
                        as result of a determination described 
                        in clause (i) shall not apply with 
                        respect to the monthly premium of any 
                        active enrollee who--
                                  [(I) has attained age 65;
                                  [(II) has paid premiums for 
                                enrollment in the program for 
                                at least 20 years; and
                                  [(III) is not actively 
                                employed.
                  [(C) Recalculated premium if reenrollment 
                after more than a 3-month lapse.--
                          [(i) In general.--The reenrollment of 
                        an individual after a 90-day period 
                        during which the individual failed to 
                        pay the monthly premium required to 
                        maintain the individual's enrollment in 
                        the CLASS program shall be treated as 
                        an initial enrollment for purposes of 
                        age-adjusting the premium for 
                        reenrollment in the program.
                          [(ii) Credit for prior months if 
                        reenrolled within 5 years.--An 
                        individual who reenrolls in the CLASS 
                        program after such a 90-day period and 
                        before the end of the 5-year period 
                        that begins with the first month for 
                        which the individual failed to pay the 
                        monthly premium required to maintain 
                        the individual's enrollment in the 
                        program shall be--
                                  [(I) credited with any months 
                                of paid premiums that accrued 
                                prior to the individual's lapse 
                                in enrollment; and
                                  [(II) notwithstanding the 
                                total amount of any such 
                                credited months, required to 
                                satisfy section 3202(6)(A)(ii) 
                                before being eligible to 
                                receive benefits.
                  [(D) No longer status as a full-time 
                student.--An individual subject to a nominal 
                premium on the basis of being described in 
                subsection (a)(1)(A)(ii)(I)(bb) who ceases to 
                be described in that subsection, beginning with 
                the first month following the month in which 
                the individual ceases to be so described, shall 
                be subject to the same monthly premium as the 
                monthly premium that applies to an individual 
                of the same age who first enrolls in the 
                program under the most similar circumstances as 
                the individual (such as the first year of 
                eligibility for enrollment in the program or in 
                a subsequent year).
                  [(E) Penalty for reenollment after 5-year 
                lapse.--In the case of an individual who 
                reenrolls in the CLASS program after the end of 
                the 5-year period described in subparagraph 
                (C)(ii), the monthly premium required for the 
                individual shall be the age-adjusted premium 
                that would be applicable to an initially 
                enrolling individual who is the same age as the 
                reenrolling individual, increased by the 
                greater of--
                          [(i) an amount that the Secretary 
                        determines is actuarially sound for 
                        each month that occurs during the 
                        period that begins with the first month 
                        for which the individual failed to pay 
                        the monthly premium required to 
                        maintain the individual's enrollment in 
                        the CLASS program and ends with the 
                        month preceding the month in which the 
                        reenollment is effective; or
                          [(ii) 1 percent of the applicable 
                        age-adjusted premium for each such 
                        month occurring in such period.
          [(2) Administrative expenses.--In determining the 
        monthly premiums for the CLASS program the Secretary 
        may factor in costs for administering the program, not 
        to exceed for any year in which the program is in 
        effect under this title, an amount equal to 3 percent 
        of all premiums paid during the year.
          [(3) No underwriting requirements.--No underwriting 
        (other than on the basis of age in accordance with 
        subparagraphs (D) and (E) of paragraph (1)) shall be 
        used to--
                  [(A) determine the monthly premium for 
                enrollment in the CLASS program; or
                  [(B) prevent an individual from enrolling in 
                the program.
  [(c) Self-attestation and Verification of Income.--The 
Secretary shall establish procedures to--
          [(1) permit an individual who is eligible for the 
        nominal premium required under subsection (a)(1)(A)(ii) 
        to self-attest that their income does not exceed the 
        poverty line or that their status as a full-time 
        student who is actively employed;
          [(2) verify, using procedures similar to the 
        procedures used by the Commissioner of Social Security 
        under section 1631(e)(1)(B)(ii) of the Social Security 
        Act and consistent with the requirements applicable to 
        the conveyance of data and information under section 
        1942 of such Act, the validity of such self-
        attestation; and
          [(3) require an individual to confirm, on at least an 
        annual basis, that their income does not exceed the 
        poverty line or that they continue to maintain such 
        status.

[SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIREMENTS.

  [(a) Automatic Enrollment.--
          [(1) In general.--Subject to paragraph (2), the 
        Secretary, in coordination with the Secretary of the 
        Treasury, shall establish procedures under which each 
        individual described in subsection (c) may be 
        automatically enrolled in the CLASS program by an 
        employer of such individual in the same manner as an 
        employer may elect to automatically enroll employees in 
        a plan under section 401(k), 403(b), or 457 of the 
        Internal Revenue Code of 1986.
          [(2) Alternative enrollment procedures.--The 
        procedures established under paragraph (1) shall 
        provide for an alternative enrollment process for an 
        individual described in subsection (c) in the case of 
        such an individual--
                  [(A) who is self-employed;
                  [(B) who has more than 1 employer; or
                  [(C) whose employer does not elect to 
                participate in the automatic enrollment process 
                established by the Secretary.
          [(3) Administration.--
                  [(A) In general.--The Secretary and the 
                Secretary of the Treasury shall, by regulation, 
                establish procedures to ensure that an 
                individual is not automatically enrolled in the 
                CLASS program by more than 1 employer.
                  [(B) Form.--Enrollment in the CLASS program 
                shall be made in such manner as the Secretary 
                may prescribe in order to ensure ease of 
                administration.
  [(b) Election to Opt-Out.--An individual described in 
subsection (c) may elect to waive enrollment in the CLASS 
program at any time in such form and manner as the Secretary 
and the Secretary of the Treasury shall prescribe.
  [(c) Individual Described.--For purposes of enrolling in the 
CLASS program, an individual described in this paragraph is an 
individual--
          [(1) who has attained age 18;
          [(2) who--
                  [(A) receives wages or income on which there 
                is imposed a tax under section 3101(a) or 
                3201(a) of the Internal Revenue Code of 1986; 
                or
                  [(B) derives self-employment income on which 
                there is imposed a tax under section 1401(a) of 
                the Internal Revenue Code of 1986;
          [(3) who is actively employed; and
          [(4) who is not--
                  [(A) a patient in a hospital or nursing 
                facility, an intermediate care facility for the 
                mentally retarded, or an institution for mental 
                diseases and receiving medical assistance under 
                Medicaid; or
                  [(B) confined in a jail, prison, other penal 
                institution or correctional facility, or by 
                court order pursuant to conviction of a 
                criminal offense or in connection with a 
                verdict or finding described in section 
                202(x)(1)(A)(ii) of the Social Security Act (42 
                U.S.C. 402(x)(1)(A)(ii)).
  [(d) Rule of Construction.--Nothing in this title shall be 
construed as requiring an active enrollee to continue to 
satisfy subparagraph (A) or (B) of subsection (c)(2) in order 
to maintain enrollment in the CLASS program.
  [(e) Payment.--
          [(1) Payroll deduction.--An amount equal to the 
        monthly premium for the enrollment in the CLASS program 
        of an individual shall be deducted from the wages or 
        self-employment income of such individual in accordance 
        with such procedures as the Secretary, in coordination 
        with the Secretary of the Treasury, shall establish for 
        employers who elect to deduct and withhold such 
        premiums on behalf of enrolled employees.
          [(2) Alternative payment mechanism.--The Secretary, 
        in coordination with the Secretary of the Treasury, 
        shall establish alternative procedures for the payment 
        of monthly premiums by an individual enrolled in the 
        CLASS program--
                  [(A) who does not have an employer who elects 
                to deduct and withhold premiums in accordance 
                with paragraph (1); or
                  [(B) who does not earn wages or derive self-
                employment income.
  [(f) Transfer of Premiums Collected.--
          [(1) In general.--During each calendar year the 
        Secretary of the Treasury shall deposit into the CLASS 
        Independence Fund a total amount equal, in the 
        aggregate, to 100 percent of the premiums collected 
        during that year.
          [(2) Transfers based on estimates.--The amount 
        deposited pursuant to paragraph (1) shall be 
        transferred in at least monthly payments to the CLASS 
        Independence Fund on the basis of estimates by the 
        Secretary and certified to the Secretary of the 
        Treasury of the amounts collected in accordance with 
        subparagraphs (A) and (B) of paragraph (5). Proper 
        adjustments shall be made in amounts subsequently 
        transferred to the Fund to the extent prior estimates 
        were in excess of, or were less than, actual amounts 
        collected.
  [(g) Other Enrollment and Disenrollment Opportunities.--The 
Secretary, in coordination with the Secretary of the Treasury, 
shall establish procedures under which--
          [(1) an individual who, in the year of the 
        individual's initial eligibility to enroll in the CLASS 
        program, has not enrolled in the program, is eligible 
        to elect to enroll in the program, in such form and 
        manner as the Secretaries shall establish, only during 
        an open enrollment period established by the 
        Secretaries that is specific to the individual and that 
        may not occur more frequently than biennially after the 
        date on which the individual first elected to waive 
        enrollment in the program; and
          [(2) an individual shall only be permitted to 
        disenroll from the program (other than for nonpayment 
        of premiums) during an annual disenrollment period 
        established by the Secretaries and in such form and 
        manner as the Secretaries shall establish.

[SEC. 3205. BENEFITS.

  [(a) Determination of Eligibility.--
          [(1) Application for receipt of benefits.--The 
        Secretary shall establish procedures under which an 
        active enrollee shall apply for receipt of benefits 
        under the CLASS Independence Benefit Plan.
          [(2) Eligibility assessments.--
                  [(A) In general.--Not later than January 1, 
                2012, the Secretary shall--
                          [(i) establish an Eligibility 
                        Assessment System (other than a service 
                        with which the Commissioner of Social 
                        Security has entered into an agreement, 
                        with respect to any State, to make 
                        disability determinations for purposes 
                        of title II or XVI of the Social 
                        Security Act) to provide for 
                        eligibility assessments of active 
                        enrollees who apply for receipt of 
                        benefits;
                          [(ii) enter into an agreement with 
                        the Protection and Advocacy System for 
                        each State to provide advocacy services 
                        in accordance with subsection (d); and
                          [(iii) enter into an agreement with 
                        public and private entities to provide 
                        advice and assistance counseling in 
                        accordance with subsection (e).
                  [(B) Regulations.--The Secretary shall 
                promulgate regulations to develop an expedited 
                nationally equitable eligibility determination 
                process, as certified by a licensed health care 
                practitioner, an appeals process, and a 
                redetermination process, as certified by a 
                licensed health care practitioner, including 
                whether an active enrollee is eligible for a 
                cash benefit under the program and if so, the 
                amount of the cash benefit (in accordance the 
                sliding scale established under the plan).
                  [(C) Presumptive eligibility for certain 
                institutionalized enrollees planning to 
                discharge.--An active enrollee shall be deemed 
                presumptively eligible if the enrollee--
                          [(i) has applied for, and attests is 
                        eligible for, the maximum cash benefit 
                        available under the sliding scale 
                        established under the CLASS 
                        Independence Benefit Plan;
                          [(ii) is a patient in a hospital (but 
                        only if the hospitalization is for 
                        long-term care), nursing facility, 
                        intermediate care facility for the 
                        mentally retarded, or an institution 
                        for mental diseases; and
                          [(iii) is in the process of, or about 
                        to begin the process of, planning to 
                        discharge from the hospital, facility, 
                        or institution, or within 60 days from 
                        the date of discharge from the 
                        hospital, facility, or institution.
                  [(D) Appeals.--The Secretary shall establish 
                procedures under which an applicant for 
                benefits under the CLASS Independence Benefit 
                Plan shall be guaranteed the right to appeal an 
                adverse determination.
  [(b) Benefits.--An eligible beneficiary shall receive the 
following benefits under the CLASS Independence Benefit Plan:
          [(1) Cash benefit.--A cash benefit established by the 
        Secretary in accordance with the requirements of 
        section 3203(a)(1)(D) that--
                  [(A) the first year in which beneficiaries 
                receive the benefits under the plan, is not 
                less than the average dollar amount specified 
                in clause (i) of such section; and
                  [(B) for any subsequent year, is not less 
                than the average per day dollar limit 
                applicable under this subparagraph for the 
                preceding year, increased by the percentage 
                increase in the consumer price index for all 
                urban consumers (U.S. city average) over the 
                previous year.
          [(2) Advocacy services.--Advocacy services in 
        accordance with subsection (d).
          [(3) Advice and assistance counseling.--Advice and 
        assistance counseling in accordance with subsection 
        (e).
          [(4) Administrative expenses.--Advocacy services and 
        advise and assistance counseling services under 
        paragraphs (2) and (3) of this subsection shall be 
        included as administrative expenses under section 
        3203(b)(3).
  [(c) Payment of Benefits.--
          [(1) Life independence account.--
                  [(A) In general.--The Secretary shall 
                establish procedures for administering the 
                provision of benefits to eligible beneficiaries 
                under the CLASS Independence Benefit Plan, 
                including the payment of the cash benefit for 
                the beneficiary into a Life Independence 
                Account established by the Secretary on behalf 
                of each eligible beneficiary.
                  [(B) Use of cash benefits.--Cash benefits 
                paid into a Life Independence Account of an 
                eligible beneficiary shall be used to purchase 
                nonmedical services and supports that the 
                beneficiary needs to maintain his or her 
                independence at home or in another residential 
                setting of their choice in the community, 
                including (but not limited to) home 
                modifications, assistive technology, accessible 
                transportation, homemaker services, respite 
                care, personal assistance services, home care 
                aides, and nursing support. Nothing in the 
                preceding sentence shall prevent an eligible 
                beneficiary from using cash benefits paid into 
                a Life Independence Account for obtaining 
                assistance with decision making concerning 
                medical care, including the right to accept or 
                refuse medical or surgical treatment and the 
                right to formulate advance directives or other 
                written instructions recognized under State 
                law, such as a living will or durable power of 
                attorney for health care, in the case that an 
                injury or illness causes the individual to be 
                unable to make health care decisions.
                  [(C) Electronic management of funds.--The 
                Secretary shall establish procedures for--
                          [(i) crediting an account established 
                        on behalf of a beneficiary with the 
                        beneficiary's cash daily benefit;
                          [(ii) allowing the beneficiary to 
                        access such account through debit 
                        cards; and
                          [(iii) accounting for withdrawals by 
                        the beneficiary from such account.
                  [(D) Primary payor rules for beneficiaries 
                who are enrolled in medicaid.--In the case of 
                an eligible beneficiary who is enrolled in 
                Medicaid, the following payment rules shall 
                apply:
                          [(i) Institutionalized beneficiary.--
                        If the beneficiary is a patient in a 
                        hospital, nursing facility, 
                        intermediate care facility for the 
                        mentally retarded, or an institution 
                        for mental diseases, the beneficiary 
                        shall retain an amount equal to 5 
                        percent of the beneficiary's daily or 
                        weekly cash benefit (as applicable) 
                        (which shall be in addition to the 
                        amount of the beneficiary's personal 
                        needs allowance provided under 
                        Medicaid), and the remainder of such 
                        benefit shall be applied toward the 
                        facility's cost of providing the 
                        beneficiary's care, and Medicaid shall 
                        provide secondary coverage for such 
                        care.
                          [(ii) Beneficiaries receiving home 
                        and community-based services.--
                                  [(I) 50 percent of benefit 
                                retained by beneficiary.--
                                Subject to subclause (II), if a 
                                beneficiary is receiving 
                                medical assistance under 
                                Medicaid for home and community 
                                based services, the beneficiary 
                                shall retain an amount equal to 
                                50 percent of the beneficiary's 
                                daily or weekly cash benefit 
                                (as applicable), and the 
                                remainder of the daily or 
                                weekly cash benefit shall be 
                                applied toward the cost to the 
                                State of providing such 
                                assistance (and shall not be 
                                used to claim Federal matching 
                                funds under Medicaid), and 
                                Medicaid shall provide 
                                secondary coverage for the 
                                remainder of any costs incurred 
                                in providing such assistance.
                                  [(II) Requirement for state 
                                offset.--A State shall be paid 
                                the remainder of a 
                                beneficiary's daily or weekly 
                                cash benefit under subclause 
                                (I) only if the State home and 
                                community-based waiver under 
                                section 1115 of the Social 
                                Security Act (42 U.S.C. 1315) 
                                or subsection (c) or (d) of 
                                section 1915 of such Act (42 
                                U.S.C. 1396n), or the State 
                                plan amendment under subsection 
                                (i) of such section does not 
                                include a waiver of the 
                                requirements of section 
                                1902(a)(1) of the Social 
                                Security Act (relating to 
                                statewideness) or of section 
                                1902(a)(10)(B) of such Act 
                                (relating to comparability) and 
                                the State offers at a minimum 
                                case management services, 
                                personal care services, 
                                habilitation services, and 
                                respite care under such a 
                                waiver or State plan amendment.
                                  [(III) Definition of home and 
                                community-based services.--In 
                                this clause, the term ``home 
                                and community-based services'' 
                                means any services which may be 
                                offered under a home and 
                                community-based waiver 
                                authorized for a State under 
                                section 1115 of the Social 
                                Security Act (42 U.S.C. 1315) 
                                or subsection (c) or (d) of 
                                section 1915 of such Act (42 
                                U.S.C. 1396n) or under a State 
                                plan amendment under subsection 
                                (i) of such section.
                          [(iii) Beneficiaries enrolled in 
                        programs of all-inclusive care for the 
                        elderly (pace).--
                                  [(I) In general.--Subject to 
                                subclause (II), if a 
                                beneficiary is receiving 
                                medical assistance under 
                                Medicaid for PACE program 
                                services under section 1934 of 
                                the Social Security Act (42 
                                U.S.C. 1396u-4), the 
                                beneficiary shall retain an 
                                amount equal to 50 percent of 
                                the beneficiary's daily or 
                                weekly cash benefit (as 
                                applicable), and the remainder 
                                of the daily or weekly cash 
                                benefit shall be applied toward 
                                the cost to the State of 
                                providing such assistance (and 
                                shall not be used to claim 
                                Federal matching funds under 
                                Medicaid), and Medicaid shall 
                                provide secondary coverage for 
                                the remainder of any costs 
                                incurred in providing such 
                                assistance.
                                  [(II) Institutionalized 
                                recipients of pace program 
                                services.--If a beneficiary 
                                receiving assistance under 
                                Medicaid for PACE program 
                                services is a patient in a 
                                hospital, nursing facility, 
                                intermediate care facility for 
                                the mentally retarded, or an 
                                institution for mental 
                                diseases, the beneficiary shall 
                                be treated as in 
                                institutionalized beneficiary 
                                under clause (i).
          [(2) Authorized representatives.--
                  [(A) In general.--The Secretary shall 
                establish procedures to allow access to a 
                beneficiary's cash benefits by an authorized 
                representative of the eligible beneficiary on 
                whose behalf such benefits are paid.
                  [(B) Quality assurance and protection against 
                fraud and abuse.--The procedures established 
                under subparagraph (A) shall ensure that 
                authorized representatives of eligible 
                beneficiaries comply with standards of conduct 
                established by the Secretary, including 
                standards requiring that such representatives 
                provide quality services on behalf of such 
                beneficiaries, do not have conflicts of 
                interest, and do not misuse benefits paid on 
                behalf of such beneficiaries or otherwise 
                engage in fraud or abuse.
          [(3) Commencement of benefits.--Benefits shall be 
        paid to, or on behalf of, an eligible beneficiary 
        beginning with the first month in which an application 
        for such benefits is approved.
          [(4) Rollover option for lump-sum payment.--An 
        eligible beneficiary may elect to--
                  [(A) defer payment of their daily or weekly 
                benefit and to rollover any such deferred 
                benefits from month-to-month, but not from 
                year-to-year; and
                  [(B) receive a lump-sum payment of such 
                deferred benefits in an amount that may not 
                exceed the lesser of--
                          [(i) the total amount of the accrued 
                        deferred benefits; or
                          [(ii) the applicable annual benefit.
          [(5) Period for determination of annual benefits.--
                  [(A) In general.--The applicable period for 
                determining with respect to an eligible 
                beneficiary the applicable annual benefit and 
                the amount of any accrued deferred benefits is 
                the 12-month period that commences with the 
                first month in which the beneficiary began to 
                receive such benefits, and each 12-month period 
                thereafter.
                  [(B) Inclusion of increased benefits.--The 
                Secretary shall establish procedures under 
                which cash benefits paid to an eligible 
                beneficiary that increase or decrease as a 
                result of a change in the functional status of 
                the beneficiary before the end of a 12-month 
                benefit period shall be included in the 
                determination of the applicable annual benefit 
                paid to the eligible beneficiary.
                  [(C) Recoupment of unpaid, accrued 
                benefits.--
                          [(i) In general.--The Secretary, in 
                        coordination with the Secretary of the 
                        Treasury, shall recoup any accrued 
                        benefits in the event of--
                                  [(I) the death of a 
                                beneficiary; or
                                  [(II) the failure of a 
                                beneficiary to elect under 
                                paragraph (4)(B) to receive 
                                such benefits as a lump-sum 
                                payment before the end of the 
                                12-month period in which such 
                                benefits accrued.
                          [(ii) Payment into class independence 
                        fund.--Any benefits recouped in 
                        accordance with clause (i) shall be 
                        paid into the CLASS Independence Fund 
                        and used in accordance with section 
                        3206.
          [(6) Requirement to recertify eligibility for receipt 
        of benefits.--An eligible beneficiary shall 
        periodically, as determined by the Secretary--
                  [(A) recertify by submission of medical 
                evidence the beneficiary's continued 
                eligibility for receipt of benefits; and
                  [(B) submit records of expenditures 
                attributable to the aggregate cash benefit 
                received by the beneficiary during the 
                preceding year.
          [(7) Supplement, not supplant other health care 
        benefits.--Subject to the Medicaid payment rules under 
        paragraph (1)(D), benefits received by an eligible 
        beneficiary shall supplement, but not supplant, other 
        health care benefits for which the beneficiary is 
        eligible under Medicaid or any other Federally funded 
        program that provides health care benefits or 
        assistance.
  [(d) Advocacy Services.--An agreement entered into under 
subsection (a)(2)(A)(ii) shall require the Protection and 
Advocacy System for the State to--
          [(1) assign, as needed, an advocacy counselor to each 
        eligible beneficiary that is covered by such agreement 
        and who shall provide an eligible beneficiary with--
                  [(A) information regarding how to access the 
                appeals process established for the program;
                  [(B) assistance with respect to the annual 
                recertification and notification required under 
                subsection (c)(6); and
                  [(C) such other assistance with obtaining 
                services as the Secretary, by regulation, shall 
                require; and
          [(2) ensure that the System and such counselors 
        comply with the requirements of subsection (h).
  [(e) Advice and Assistance Counseling.--An agreement entered 
into under subsection (a)(2)(A)(iii) shall require the entity 
to assign, as requested by an eligible beneficiary that is 
covered by such agreement, an advice and assistance counselor 
who shall provide an eligible beneficiary with information 
regarding--
          [(1) accessing and coordinating long-term services 
        and supports in the most integrated setting;
          [(2) possible eligibility for other benefits and 
        services;
          [(3) development of a service and support plan;
          [(4) information about programs established under the 
        Assistive Technology Act of 1998 and the services 
        offered under such programs;
          [(5) available assistance with decision making 
        concerning medical care, including the right to accept 
        or refuse medical or surgical treatment and the right 
        to formulate advance directives or other written 
        instructions recognized under State law, such as a 
        living will or durable power of attorney for health 
        care, in the case that an injury or illness causes the 
        individual to be unable to make health care decisions; 
        and
          [(6) such other services as the Secretary, by 
        regulation, may require.
  [(f) No Effect on Eligibility for Other Benefits.--Benefits 
paid to an eligible beneficiary under the CLASS program shall 
be disregarded for purposes of determining or continuing the 
beneficiary's eligibility for receipt of benefits under any 
other Federal, State, or locally funded assistance program, 
including benefits paid under titles II, XVI, XVIII, XIX, or 
XXI of the Social Security Act (42 U.S.C. 401 et seq., 1381 et 
seq., 1395 et seq., 1396 et seq., 1397aa et seq.), under the 
laws administered by the Secretary of Veterans Affairs, under 
low-income housing assistance programs, or under the 
supplemental nutrition assistance program established under the 
Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.).
  [(g) Rule of Construction.--Nothing in this title shall be 
construed as prohibiting benefits paid under the CLASS 
Independence Benefit Plan from being used to compensate a 
family caregiver for providing community living assistance 
services and supports to an eligible beneficiary.
  [(h) Protection Against Conflict of Interests.--The Secretary 
shall establish procedures to ensure that the Eligibility 
Assessment System, the Protection and Advocacy System for a 
State, advocacy counselors for eligible beneficiaries, and any 
other entities that provide services to active enrollees and 
eligible beneficiaries under the CLASS program comply with the 
following:
          [(1) If the entity provides counseling or planning 
        services, such services are provided in a manner that 
        fosters the best interests of the active enrollee or 
        beneficiary.
          [(2) The entity has established operating procedures 
        that are designed to avoid or minimize conflicts of 
        interest between the entity and an active enrollee or 
        beneficiary.
          [(3) The entity provides information about all 
        services and options available to the active enrollee 
        or beneficiary, to the best of its knowledge, including 
        services available through other entities or providers.
          [(4) The entity assists the active enrollee or 
        beneficiary to access desired services, regardless of 
        the provider.
          [(5) The entity reports the number of active 
        enrollees and beneficiaries provided with assistance by 
        age, disability, and whether such enrollees and 
        beneficiaries received services from the entity or 
        another entity.
          [(6) If the entity provides counseling or planning 
        services, the entity ensures that an active enrollee or 
        beneficiary is informed of any financial interest that 
        the entity has in a service provider.
          [(7) The entity provides an active enrollee or 
        beneficiary with a list of available service providers 
        that can meet the needs of the active enrollee or 
        beneficiary.

[SEC. 3206. CLASS INDEPENDENCE FUND.

  [(a) Establishment of CLASS Independence Fund.--There is 
established in the Treasury of the United States a trust fund 
to be known as the ``CLASS Independence Fund''. The Secretary 
of the Treasury shall serve as Managing Trustee of such Fund. 
The Fund shall consist of all amounts derived from payments 
into the Fund under sections 3204(f) and 3205(c)(5)(C)(ii), and 
remaining after investment of such amounts under subsection 
(b), including additional amounts derived as income from such 
investments. The amounts held in the Fund are appropriated and 
shall remain available without fiscal year limitation--
          [(1) to be held for investment on behalf of 
        individuals enrolled in the CLASS program;
          [(2) to pay the administrative expenses related to 
        the Fund and to investment under subsection (b); and
          [(3) to pay cash benefits to eligible beneficiaries 
        under the CLASS Independence Benefit Plan.
  [(b) Investment of Fund Balance.--The Secretary of the 
Treasury shall invest and manage the CLASS Independence Fund in 
the same manner, and to the same extent, as the Federal 
Supplementary Medical Insurance Trust Fund may be invested and 
managed under subsections (c), (d), and (e) of section 1841(d) 
of the Social Security Act (42 U.S.C. 1395t).
  [(c) Board of Trustees.--
          [(1) In general.--With respect to the CLASS 
        Independence Fund, there is hereby created a body to be 
        known as the Board of Trustees of the CLASS 
        Independence Fund (hereinafter in this section referred 
        to as the ``Board of Trustees'') composed of the 
        Secretary of the Treasury, the Secretary of Labor, and 
        the Secretary of Health and Human Services, all ex 
        officio, and of two members of the public (both of whom 
        may not be from the same political party), who shall be 
        nominated by the President for a term of 4 years and 
        subject to confirmation by the Senate. A member of the 
        Board of Trustees serving as a member of the public and 
        nominated and confirmed to fill a vacancy occurring 
        during a term shall be nominated and confirmed only for 
        the remainder of such term. An individual nominated and 
        confirmed as a member of the public may serve in such 
        position after the expiration of such member's term 
        until the earlier of the time at which the member's 
        successor takes office or the time at which a report of 
        the Board is first issued under paragraph (2) after the 
        expiration of the member's term. The Secretary of the 
        Treasury shall be the Managing Trustee of the Board of 
        Trustees. The Board of Trustees shall meet not less 
        frequently than once each calendar year. A person 
        serving on the Board of Trustees shall not be 
        considered to be a fiduciary and shall not be 
        personally liable for actions taken in such capacity 
        with respect to the Trust Fund.
          [(2) Duties.--
                  [(A) In general.--It shall be the duty of the 
                Board of Trustees to do the following:
                          [(i) Hold the CLASS Independence 
                        Fund.
                          [(ii) Report to the Congress not 
                        later than the first day of April of 
                        each year on the operation and status 
                        of the CLASS Independence Fund during 
                        the preceding fiscal year and on its 
                        expected operation and status during 
                        the current fiscal year and the next 2 
                        fiscal years.
                          [(iii) Report immediately to the 
                        Congress whenever the Board is of the 
                        opinion that the amount of the CLASS 
                        Independence Fund is not actuarially 
                        sound in regards to the projection 
                        under section 3203(b)(1)(B)(i).
                          [(iv) Review the general policies 
                        followed in managing the CLASS 
                        Independence Fund, and recommend 
                        changes in such policies, including 
                        necessary changes in the provisions of 
                        law which govern the way in which the 
                        CLASS Independence Fund is to be 
                        managed.
                  [(B) Report.--The report provided for in 
                subparagraph (A)(ii) shall--
                          [(i) include--
                                  [(I) a statement of the 
                                assets of, and the 
                                disbursements made from, the 
                                CLASS Independence Fund during 
                                the preceding fiscal year;
                                  [(II) an estimate of the 
                                expected income to, and 
                                disbursements to be made from, 
                                the CLASS Independence Fund 
                                during the current fiscal year 
                                and each of the next 2 fiscal 
                                years;
                                  [(III) a statement of the 
                                actuarial status of the CLASS 
                                Independence Fund for the 
                                current fiscal year, each of 
                                the next 2 fiscal years, and as 
                                projected over the 75-year 
                                period beginning with the 
                                current fiscal year; and
                                  [(IV) an actuarial opinion by 
                                the Chief Actuary of the 
                                Centers for Medicare & Medicaid 
                                Services certifying that the 
                                techniques and methodologies 
                                used are generally accepted 
                                within the actuarial profession 
                                and that the assumptions and 
                                cost estimates used are 
                                reasonable; and
                          [(ii) be printed as a House document 
                        of the session of the Congress to which 
                        the report is made.
                  [(C) Recommendations.--If the Board of 
                Trustees determines that enrollment trends and 
                expected future benefit claims on the CLASS 
                Independence Fund are not actuarially sound in 
                regards to the projection under section 
                3203(b)(1)(B)(i) and are unlikely to be 
                resolved with reasonable premium increases or 
                through other means, the Board of Trustees 
                shall include in the report provided for in 
                subparagraph (A)(ii) recommendations for such 
                legislative action as the Board of Trustees 
                determine to be appropriate, including whether 
                to adjust monthly premiums or impose a 
                temporary moratorium on new enrollments.

[SEC. 3207. CLASS INDEPENDENCE ADVISORY COUNCIL.

  [(a) Establishment.--There is hereby created an Advisory 
Committee to be known as the ``CLASS Independence Advisory 
Council''.
  [(b) Membership.--
          [(1) In general.--The CLASS Independence Advisory 
        Council shall be composed of not more than 15 
        individuals, not otherwise in the employ of the United 
        States--
                  [(A) who shall be appointed by the President 
                without regard to the civil service laws and 
                regulations; and
                  [(B) a majority of whom shall be 
                representatives of individuals who participate 
                or are likely to participate in the CLASS 
                program, and shall include representatives of 
                older and younger workers, individuals with 
                disabilities, family caregivers of individuals 
                who require services and supports to maintain 
                their independence at home or in another 
                residential setting of their choice in the 
                community, individuals with expertise in long-
                term care or disability insurance, actuarial 
                science, economics, and other relevant 
                disciplines, as determined by the Secretary.
          [(2) Terms.--
                  [(A) In general.--The members of the CLASS 
                Independence Advisory Council shall serve 
                overlapping terms of 3 years (unless appointed 
                to fill a vacancy occurring prior to the 
                expiration of a term, in which case the 
                individual shall serve for the remainder of the 
                term).
                  [(B) Limitation.--A member shall not be 
                eligible to serve for more than 2 consecutive 
                terms.
          [(3) Chair.--The President shall, from time to time, 
        appoint one of the members of the CLASS Independence 
        Advisory Council to serve as the Chair.
  [(c) Duties.--The CLASS Independence Advisory Council shall 
advise the Secretary on matters of general policy in the 
administration of the CLASS program established under this 
title and in the formulation of regulations under this title 
including with respect to--
          [(1) the development of the CLASS Independence 
        Benefit Plan under section 3203;
          [(2) the determination of monthly premiums under such 
        plan; and
          [(3) the financial solvency of the program.
  [(d) Application of FACA.--The Federal Advisory Committee Act 
(5 U.S.C. App.), other than section 14 of that Act, shall apply 
to the CLASS Independence Advisory Council.
  [(e) Authorization of Appropriations.--
          [(1) In general.--There are authorized to be 
        appropriated to the CLASS Independence Advisory Council 
        to carry out its duties under this section, such sums 
        as may be necessary for fiscal year 2011 and for each 
        fiscal year thereafter.
          [(2) Availability.--Any sums appropriated under the 
        authorization contained in this section shall remain 
        available, without fiscal year limitation, until 
        expended.

[SEC. 3208. SOLVENCY AND FISCAL INDEPENDENCE; REGULATIONS; ANNUAL 
                    REPORT.

  [(a) Solvency.--The Secretary shall regularly consult with 
the Board of Trustees of the CLASS Independence Fund and the 
CLASS Independence Advisory Council, for purposes of ensuring 
that enrollees premiums are adequate to ensure the financial 
solvency of the CLASS program, both with respect to fiscal 
years occurring in the near-term and fiscal years occurring 
over 20- and 75-year periods, taking into account the 
projections required for such periods under subsections 
(a)(1)(A)(i) and (b)(1)(B)(i) of section 3202.
  [(b) No Taxpayer Funds Used To Pay Benefits.--No taxpayer 
funds shall be used for payment of benefits under a CLASS 
Independent Benefit Plan. For purposes of this subsection, the 
term ``taxpayer funds'' means any Federal funds from a source 
other than premiums deposited by CLASS program participants in 
the CLASS Independence Fund and any associated interest 
earnings.
  [(c) Regulations.--The Secretary shall promulgate such 
regulations as are necessary to carry out the CLASS program in 
accordance with this title. Such regulations shall include 
provisions to prevent fraud and abuse under the program.
  [(d) Annual Report.--Beginning January 1, 2014, the Secretary 
shall submit an annual report to Congress on the CLASS program. 
Each report shall include the following:
          [(1) The total number of enrollees in the program.
          [(2) The total number of eligible beneficiaries 
        during the fiscal year.
          [(3) The total amount of cash benefits provided 
        during the fiscal year.
          [(4) A description of instances of fraud or abuse 
        identified during the fiscal year.
          [(5) Recommendations for such administrative or 
        legislative action as the Secretary determines is 
        necessary to improve the program, ensure the solvency 
        of the program, or to prevent the occurrence of fraud 
        or abuse.

[SEC. 3209. INSPECTOR GENERAL'S REPORT.

  [The Inspector General of the Department of Health and Human 
Services shall submit an annual report to the Secretary and 
Congress relating to the overall progress of the CLASS program 
and of the existence of waste, fraud, and abuse in the CLASS 
program. Each such report shall include findings in the 
following areas:
          [(1) The eligibility determination process.
          [(2) The provision of cash benefits.
          [(3) Quality assurance and protection against waste, 
        fraud, and abuse.
          [(4) Recouping of unpaid and accrued benefits.

[SEC. 3210. TAX TREATMENT OF PROGRAM.

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

               PATIENT PROTECTION AND AFFORDABLE CARE ACT

           *       *       *       *       *       *       *
                         [TITLE VIII--CLASS ACT

[SEC. 8001. SHORT TITLE OF TITLE.

  [This title may be cited as the ``Community Living Assistance 
Services and Supports Act'' or the ``CLASS Act''.

[SEC. 8002. ESTABLISHMENT OF NATIONAL VOLUNTARY INSURANCE PROGRAM FOR 
                    PURCHASING COMMUNITY LIVING ASSISTANCE SERVICES AND 
                    SUPPORT.

  [(a) Establishment of CLASS program.--
          [(1) In general.--The Public Health Service Act (42 
        U.S.C. 201 et seq.), as amended by section 4302(a), is 
        amended by adding at the end the following:

   [``TITLE XXXII--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS

[``SEC. 3201. PURPOSE.

  [The purpose of this title is to establish a national 
voluntary insurance program for purchasing community living 
assistance services and supports in order to--
          [``(1) provide individuals with functional 
        limitations with tools that will allow them to maintain 
        their personal and financial independence and live in 
        the community through a new financing strategy for 
        community living assistance services and supports;
          [``(2) establish an infrastructure that will help 
        address the Nation's community living assistance 
        services and supports needs;
          [``(3) alleviate burdens on family caregivers; and
          [``(4) address institutional bias by providing a 
        financing mechanism that supports personal choice and 
        independence to live in the community.

[``SEC. 3202. DEFINITIONS.

  [In this title:
          [``(1) Active enrollee.--The term `active enrollee' 
        means an individual who is enrolled in the CLASS 
        program in accordance with section 3204 and who has 
        paid any premiums due to maintain such enrollment.
          [``(2) Actively employed.--The term `actively 
        employed' means an individual who--
                  [``(A) is reporting for work at the 
                individual's usual place of employment or at 
                another location to which the individual is 
                required to travel because of the individual's 
                employment (or in the case of an individual who 
                is a member of the uniformed services, is on 
                active duty and is physically able to perform 
                the duties of the individual's position); and
                  [``(B) is able to perform all the usual and 
                customary duties of the individual's employment 
                on the individual's regular work schedule.
          [``(3) Activities of daily living.--The term 
        `activities of daily living' means each of the 
        following activities specified in section 
        7702B(c)(2)(B) of the Internal Revenue Code of 1986:
                  [``(A) Eating.
                  [``(B) Toileting.
                  [``(C) Transferring.
                  [``(D) Bathing.
                  [``(E) Dressing.
                  [``(F) Continence.
          [``(4) CLASS program.--The term `CLASS program' means 
        the program established under this title.
          [``(5) Eligibility Assessment System.--The term 
        `Eligibility Assessment System' means the entity 
        established by the Secretary under section 3205(a)(2) 
        to make functional eligibility determinations for the 
        CLASS program.
          [``(6) Eligible beneficiary.--
                  [``(A) In general.--The term `eligible 
                beneficiary' means any individual who is an 
                active enrollee in the CLASS program and, as of 
                the date described in subparagraph (B)--
                          [``(i) has paid premiums for 
                        enrollment in such program for at least 
                        60 months;
                          [``(ii) has earned, with respect to 
                        at least 3 calendar years that occur 
                        during the first 60 months for which 
                        the individual has paid premiums for 
                        enrollment in the program, at least an 
                        amount equal to the amount of wages and 
                        self-employment income which an 
                        individual must have in order to be 
                        credited with a quarter of coverage 
                        under section 213(d) of the Social 
                        Security Act for the year; and
                          [``(iii) has paid premiums for 
                        enrollment in such program for at least 
                        24 consecutive months, if a lapse in 
                        premium payments of more than 3 months 
                        has occurred during the period that 
                        begins on the date of the individual's 
                        enrollment and ends on the date of such 
                        determination.
                  [``(B) Date described.--For purposes of 
                subparagraph (A), the date described in this 
                subparagraph is the date on which the 
                individual is determined to have a functional 
                limitation described in section 3203(a)(1)(C) 
                that is expected to last for a continuous 
                period of more than 90 days.
                  [``(C) Regulations.--The Secretary shall 
                promulgate regulations specifying exceptions to 
                the minimum earnings requirements under 
                subparagraph (A)(ii) for purposes of being 
                considered an eligible beneficiary for certain 
                populations.
          [``(7) Hospital; nursing facility; intermediate care 
        facility for the mentally retarded; institution for 
        mental diseases.--The terms `hospital', `nursing 
        facility', `intermediate care facility for the mentally 
        retarded', and `institution for mental diseases' have 
        the meanings given such terms for purposes of Medicaid.
          [``(8) CLASS Independence Advisory Council.--The term 
        `CLASS Independence Advisory Council' or `Council' 
        means the Advisory Council established under section 
        3207 to advise the Secretary.
          [``(9) CLASS Independence Benefit Plan.--The term 
        `CLASS Independence Benefit Plan' means the benefit 
        plan developed and designated by the Secretary in 
        accordance with section 3203.
          [``(10) CLASS Independence Fund.--The term `CLASS 
        Independence Fund' or `Fund' means the fund established 
        under section 3206.
          [``(11) Medicaid.--The term `Medicaid' means the 
        program established under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.).
          [``(12) Poverty line.--The term `poverty line' has 
        the meaning given that term in section 2110(c)(5) of 
        the Social Security Act (42 U.S.C. 1397jj(c)(5)).
          [``(13) Protection and advocacy system.--The term 
        `Protection and Advocacy System' means the system for 
        each State established under section 143 of the 
        Developmental Disabilities Assistance and Bill of 
        Rights Act of 2000 (42 U.S.C. 15043).

[``SEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN.

  [``(a) Process for development.--
          [``(1) In general.--The Secretary, in consultation 
        with appropriate actuaries and other experts, shall 
        develop at least 3 actuarially sound benefit plans as 
        alternatives for consideration for designation by the 
        Secretary as the CLASS Independence Benefit Plan under 
        which eligible beneficiaries shall receive benefits 
        under this title. Each of the plan alternatives 
        developed shall be designed to provide eligible 
        beneficiaries with the benefits described in section 
        3205 consistent with the following requirements:
                  [``(A) Premiums.--
                          [``(i) In general.--Beginning with 
                        the first year of the CLASS program, 
                        and for each year thereafter, subject 
                        to clauses (ii) and (iii), the 
                        Secretary shall establish all premiums 
                        to be paid by enrollees for the year 
                        based on an actuarial analysis of the 
                        75-year costs of the program that 
                        ensures solvency throughout such 75-
                        year period.
                          [``(ii) Nominal premium for poorest 
                        individuals and full-time students.--
                                  [``(I) In general.--The 
                                monthly premium for enrollment 
                                in the CLASS program shall not 
                                exceed the applicable dollar 
                                amount per month determined 
                                under subclause (II) for--
                                          [``(aa) any 
                                        individual whose income 
                                        does not exceed the 
                                        poverty line; and
                                          [``(bb) any 
                                        individual who has not 
                                        attained age 22, and is 
                                        actively employed 
                                        during any period in 
                                        which the individual is 
                                        a full-time student (as 
                                        determined by the 
                                        Secretary).
                                  [``(II) Applicable dollar 
                                amount.--The applicable dollar 
                                amount described in this 
                                subclause is the amount equal 
                                to $5, increased by the 
                                percentage increase in the 
                                consumer price index for all 
                                urban consumers (U.S. city 
                                average) for each year 
                                occurring after 2009 and before 
                                such year.
                          [``(iii) Class Independence Fund 
                        reserves.--At such time as the CLASS 
                        program has been in operation for 10 
                        years, the Secretary shall establish 
                        all premiums to be paid by enrollees 
                        for the year based on an actuarial 
                        analysis that accumulated reserves in 
                        the CLASS Independence Fund would not 
                        decrease in that year. At such time as 
                        the Secretary determines the CLASS 
                        program demonstrates a sustained 
                        ability to finance expected yearly 
                        expenses with expected yearly premiums 
                        and interest credited to the CLASS 
                        Independence Fund, the Secretary may 
                        decrease the required amount of CLASS 
                        Independence Fund reserves.
                  [``(B) Vesting period.--A 5-year vesting 
                period for eligibility for benefits.
                  [``(C) Benefit triggers.--A benefit trigger 
                for provision of benefits that requires a 
                determination that an individual has a 
                functional limitation, as certified by a 
                licensed health care practitioner, described in 
                any of the following clauses that is expected 
                to last for a continuous period of more than 90 
                days:
                          [``(i) The individual is determined 
                        to be unable to perform at least the 
                        minimum number (which may be 2 or 3) of 
                        activities of daily living as are 
                        required under the plan for the 
                        provision of benefits without 
                        substantial assistance (as defined by 
                        the Secretary) from another individual.
                          [``(ii) The individual requires 
                        substantial supervision to protect the 
                        individual from threats to health and 
                        safety due to substantial cognitive 
                        impairment.
                          [``(iii) The individual has a level 
                        of functional limitation similar (as 
                        determined under regulations prescribed 
                        by the Secretary) to the level of 
                        functional limitation described in 
                        clause (i) or (ii).
                  [``(D) Cash benefit.--Payment of a cash 
                benefit that satisfies the following 
                requirements:
                          [``(i) Minimum required amount.--The 
                        benefit amount provides an eligible 
                        beneficiary with not less than an 
                        average of $50 per day (as determined 
                        based on the reasonably expected 
                        distribution of beneficiaries receiving 
                        benefits at various benefit levels).
                          [``(ii) Amount scaled to functional 
                        ability.--The benefit amount is varied 
                        based on a scale of functional ability, 
                        with not less than 2, and not more than 
                        6, benefit level amounts.
                          [``(iii) Daily or weekly.--The 
                        benefit is paid on a daily or weekly 
                        basis.
                          [``(iv) No lifetime or aggregate 
                        limit.--The benefit is not subject to 
                        any lifetime or aggregate limit.
          [``(2) Review and recommendation by the CLASS 
        Independence Advisory Council.--The CLASS Independence 
        Advisory Council shall--
                  [``(A) evaluate the alternative benefit plans 
                developed under paragraph (1); and
                  [``(B) recommend for designation as the CLASS 
                Independence Benefit Plan for offering to the 
                public the plan that the Council determines 
                best balances price and benefits to meet 
                enrollees' needs in an actuarially sound 
                manner, while optimizing the probability of the 
                long-term sustainability of the CLASS program.
          [``(3) Designation by the Secretary.--Not later than 
        October 1, 2012, the Secretary, taking into 
        consideration the recommendation of the CLASS 
        Independence Advisory Council under paragraph (2)(B), 
        shall designate a benefit plan as the CLASS 
        Independence Benefit Plan. The Secretary shall publish 
        such designation, along with details of the plan and 
        the reasons for the selection by the Secretary, in a 
        final rule that allows for a period of public comment.
  [``(b) Additional premium requirements.--
          [``(1) Adjustment of premiums.--
                  [``(A) In general.--Except as provided in 
                subparagraphs (B), (C), (D), and (E), the 
                amount of the monthly premium determined for an 
                individual upon such individual's enrollment in 
                the CLASS program shall remain the same for as 
                long as the individual is an active enrollee in 
                the program.
                  [``(B) Recalculated premium if required for 
                program solvency.--
                          [``(i) In general.--Subject to clause 
                        (ii), if the Secretary determines, 
                        based on the most recent report of the 
                        Board of Trustees of the CLASS 
                        Independence Fund, the advice of the 
                        CLASS Independence Advisory Council, 
                        and the annual report of the Inspector 
                        General of the Department of Health and 
                        Human Services, and waste, fraud, and 
                        abuse, or such other information as the 
                        Secretary determines appropriate, that 
                        the monthly premiums and income to the 
                        CLASS Independence Fund for a year are 
                        projected to be insufficient with 
                        respect to the 20-year period that 
                        begins with that year, the Secretary 
                        shall adjust the monthly premiums for 
                        individuals enrolled in the CLASS 
                        program as necessary (but maintaining a 
                        nominal premium for enrollees whose 
                        income is below the poverty line or who 
                        are full-time students actively 
                        employed).
                          [``(ii) Exemption from increase.--Any 
                        increase in a monthly premium imposed 
                        as result of a determination described 
                        in clause (i) shall not apply with 
                        respect to the monthly premium of any 
                        active enrollee who--
                                  [``(I) has attained age 65;
                                  [``(II) has paid premiums for 
                                enrollment in the program for 
                                at least 20 years; and
                                  [``(III) is not actively 
                                employed.
                  [``(C) Recalculated premium if reenrollment 
                after more than a 3-month lapse.--
                          [``(i) In general.--The reenrollment 
                        of an individual after a 90-day period 
                        during which the individual failed to 
                        pay the monthly premium required to 
                        maintain the individual's enrollment in 
                        the CLASS program shall be treated as 
                        an initial enrollment for purposes of 
                        age-adjusting the premium for 
                        reenrollment in the program.
                          [``(ii) Credit for prior months if 
                        reenrolled within 5 years.--An 
                        individual who reenrolls in the CLASS 
                        program after such a 90-day period and 
                        before the end of the 5-year period 
                        that begins with the first month for 
                        which the individual failed to pay the 
                        monthly premium required to maintain 
                        the individual's enrollment in the 
                        program shall be--
                                  [``(I) credited with any 
                                months of paid premiums that 
                                accrued prior to the 
                                individual's lapse in 
                                enrollment; and
                                  [``(II) notwithstanding the 
                                total amount of any such 
                                credited months, required to 
                                satisfy section 3202(6)(A)(ii) 
                                before being eligible to 
                                receive benefits.
                  [``(D) No longer status as a full-time 
                student.--An individual subject to a nominal 
                premium on the basis of being described in 
                subsection (a)(1)(A)(ii)(I)(bb) who ceases to 
                be described in that subsection, beginning with 
                the first month following the month in which 
                the individual ceases to be so described, shall 
                be subject to the same monthly premium as the 
                monthly premium that applies to an individual 
                of the same age who first enrolls in the 
                program under the most similar circumstances as 
                the individual (such as the first year of 
                eligibility for enrollment in the program or in 
                a subsequent year).
                  [``(E) Penalty for reenollment after 5-year 
                lapse.--In the case of an individual who 
                reenrolls in the CLASS program after the end of 
                the 5-year period described in subparagraph 
                (C)(ii), the monthly premium required for the 
                individual shall be the age-adjusted premium 
                that would be applicable to an initially 
                enrolling individual who is the same age as the 
                reenrolling individual, increased by the 
                greater of--
                          [``(i) an amount that the Secretary 
                        determines is actuarially sound for 
                        each month that occurs during the 
                        period that begins with the first month 
                        for which the individual failed to pay 
                        the monthly premium required to 
                        maintain the individual's enrollment in 
                        the CLASS program and ends with the 
                        month preceding the month in which the 
                        reenollment is effective; or
                          [``(ii) 1 percent of the applicable 
                        age-adjusted premium for each such 
                        month occurring in such period.
          [``(2) Administrative expenses.--In determining the 
        monthly premiums for the CLASS program the Secretary 
        may factor in costs for administering the program, not 
        to exceed for any year in which the program is in 
        effect under this title, an amount equal to 3 percent 
        of all premiums paid during the year.
          [``(3) No underwriting requirements.--No underwriting 
        (other than on the basis of age in accordance with 
        subparagraphs (D) and (E) of paragraph (1)) shall be 
        used to--
                  [``(A) determine the monthly premium for 
                enrollment in the CLASS program; or
                  [``(B) prevent an individual from enrolling 
                in the program.
  [``(c) Self-attestation and verification of income.--The 
Secretary shall establish procedures to--
          [``(1) permit an individual who is eligible for the 
        nominal premium required under subsection (a)(1)(A)(ii) 
        to self-attest that their income does not exceed the 
        poverty line or that their status as a full-time 
        student who is actively employed;
          [``(2) verify, using procedures similar to the 
        procedures used by the Commissioner of Social Security 
        under section 1631(e)(1)(B)(ii) of the Social Security 
        Act and consistent with the requirements applicable to 
        the conveyance of data and information under section 
        1942 of such Act, the validity of such self-
        attestation; and
          [``(3) require an individual to confirm, on at least 
        an annual basis, that their income does not exceed the 
        poverty line or that they continue to maintain such 
        status.

[``SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIREMENTS.

  [``(a) Automatic enrollment.--
          [``(1) In general.--Subject to paragraph (2), the 
        Secretary, in coordination with the Secretary of the 
        Treasury, shall establish procedures under which each 
        individual described in subsection (c) may be 
        automatically enrolled in the CLASS program by an 
        employer of such individual in the same manner as an 
        employer may elect to automatically enroll employees in 
        a plan under section 401(k), 403(b), or 457 of the 
        Internal Revenue Code of 1986.
          [``(2) Alternative enrollment procedures.--The 
        procedures established under paragraph (1) shall 
        provide for an alternative enrollment process for an 
        individual described in subsection (c) in the case of 
        such an individual--
                  [``(A) who is self-employed;
                  [``(B) who has more than 1 employer; or
                  [``(C) whose employer does not elect to 
                participate in the automatic enrollment process 
                established by the Secretary.
          [``(3) Administration.--
                  [``(A) In general.--The Secretary and the 
                Secretary of the Treasury shall, by regulation, 
                establish procedures to ensure that an 
                individual is not automatically enrolled in the 
                CLASS program by more than 1 employer.
                  [``(B) Form.--Enrollment in the CLASS program 
                shall be made in such manner as the Secretary 
                may prescribe in order to ensure ease of 
                administration.
  [``(b) Election to opt-Out.--An individual described in 
subsection (c) may elect to waive enrollment in the CLASS 
program at any time in such form and manner as the Secretary 
and the Secretary of the Treasury shall prescribe.
  [``(c) Individual described.--For purposes of enrolling in 
the CLASS program, an individual described in this paragraph is 
an individual--
          [``(1) who has attained age 18;
          [``(2) who--
                  [``(A) receives wages or income on which 
                there is imposed a tax under section 3101(a) or 
                3201(a) of the Internal Revenue Code of 1986; 
                or
                  [``(B) derives self-employment income on 
                which there is imposed a tax under section 
                1401(a) of the Internal Revenue Code of 1986;
          [``(3) who is actively employed; and
          [``(4) who is not--
                  [``(A) a patient in a hospital or nursing 
                facility, an intermediate care facility for the 
                mentally retarded, or an institution for mental 
                diseases and receiving medical assistance under 
                Medicaid; or
                  [``(B) confined in a jail, prison, other 
                penal institution or correctional facility, or 
                by court order pursuant to conviction of a 
                criminal offense or in connection with a 
                verdict or finding described in section 
                202(x)(1)(A)(ii) of the Social Security Act (42 
                U.S.C. 402(x)(1)(A)(ii)).
  [``(d) Rule of construction.--Nothing in this title shall be 
construed as requiring an active enrollee to continue to 
satisfy subparagraph (A) or (B) of subsection (c)(2) in order 
to maintain enrollment in the CLASS program.
  [``(e) Payment.--
          [``(1) Payroll deduction.--An amount equal to the 
        monthly premium for the enrollment in the CLASS program 
        of an individual shall be deducted from the wages or 
        self-employment income of such individual in accordance 
        with such procedures as the Secretary, in coordination 
        with the Secretary of the Treasury, shall establish for 
        employers who elect to deduct and withhold such 
        premiums on behalf of enrolled employees.
          [``(2) Alternative payment mechanism.--The Secretary, 
        in coordination with the Secretary of the Treasury, 
        shall establish alternative procedures for the payment 
        of monthly premiums by an individual enrolled in the 
        CLASS program--
                  [``(A) who does not have an employer who 
                elects to deduct and withhold premiums in 
                accordance with paragraph (1); or
                  [``(B) who does not earn wages or derive 
                self-employment income.
  [``(f) Transfer of premiums collected.--
          [``(1) In general.--During each calendar year the 
        Secretary of the Treasury shall deposit into the CLASS 
        Independence Fund a total amount equal, in the 
        aggregate, to 100 percent of the premiums collected 
        during that year.
          [``(2) Transfers based on estimates.--The amount 
        deposited pursuant to paragraph (1) shall be 
        transferred in at least monthly payments to the CLASS 
        Independence Fund on the basis of estimates by the 
        Secretary and certified to the Secretary of the 
        Treasury of the amounts collected in accordance with 
        subparagraphs (A) and (B) of paragraph (5). Proper 
        adjustments shall be made in amounts subsequently 
        transferred to the Fund to the extent prior estimates 
        were in excess of, or were less than, actual amounts 
        collected.
  [``(g) Other enrollment and disenrollment opportunities.--The 
Secretary, in coordination with the Secretary of the Treasury, 
shall establish procedures under which--
          [``(1) an individual who, in the year of the 
        individual's initial eligibility to enroll in the CLASS 
        program, has not enrolled in the program, is eligible 
        to elect to enroll in the program, in such form and 
        manner as the Secretaries shall establish, only during 
        an open enrollment period established by the 
        Secretaries that is specific to the individual and that 
        may not occur more frequently than biennially after the 
        date on which the individual first elected to waive 
        enrollment in the program; and
          [``(2) an individual shall only be permitted to 
        disenroll from the program (other than for nonpayment 
        of premiums) during an annual disenrollment period 
        established by the Secretaries and in such form and 
        manner as the Secretaries shall establish.

[``SEC. 3205. BENEFITS.

  [``(a) Determination of eligibility.--
          [``(1) Application for receipt of benefits.--The 
        Secretary shall establish procedures under which an 
        active enrollee shall apply for receipt of benefits 
        under the CLASS Independence Benefit Plan.
          [``(2) Eligibility assessments.--
                  [``(A) In general.--Not later than January 1, 
                2012, the Secretary shall--
                          [``(i) establish an Eligibility 
                        Assessment System (other than a service 
                        with which the Commissioner of Social 
                        Security has entered into an agreement, 
                        with respect to any State, to make 
                        disability determinations for purposes 
                        of title II or XVI of the Social 
                        Security Act) to provide for 
                        eligibility assessments of active 
                        enrollees who apply for receipt of 
                        benefits;
                          [``(ii) enter into an agreement with 
                        the Protection and Advocacy System for 
                        each State to provide advocacy services 
                        in accordance with subsection (d); and
                          [``(iii) enter into an agreement with 
                        public and private entities to provide 
                        advice and assistance counseling in 
                        accordance with subsection (e).
                  [``(B) Regulations.--The Secretary shall 
                promulgate regulations to develop an expedited 
                nationally equitable eligibility determination 
                process, as certified by a licensed health care 
                practitioner, an appeals process, and a 
                redetermination process, as certified by a 
                licensed health care practitioner, including 
                whether an active enrollee is eligible for a 
                cash benefit under the program and if so, the 
                amount of the cash benefit (in accordance the 
                sliding scale established under the plan).
                  [``(C) Presumptive eligibility for certain 
                institutionalized enrollees planning to 
                discharge.--An active enrollee shall be deemed 
                presumptively eligible if the enrollee--
                          [``(i) has applied for, and attests 
                        is eligible for, the maximum cash 
                        benefit available under the sliding 
                        scale established under the CLASS 
                        Independence Benefit Plan;
                          [``(ii) is a patient in a hospital 
                        (but only if the hospitalization is for 
                        long-term care), nursing facility, 
                        intermediate care facility for the 
                        mentally retarded, or an institution 
                        for mental diseases; and
                          [``(iii) is in the process of, or 
                        about to begin the process of, planning 
                        to discharge from the hospital, 
                        facility, or institution, or within 60 
                        days from the date of discharge from 
                        the hospital, facility, or institution.
                  [``(D) Appeals.--The Secretary shall 
                establish procedures under which an applicant 
                for benefits under the CLASS Independence 
                Benefit Plan shall be guaranteed the right to 
                appeal an adverse determination.
  [``(b) Benefits.--An eligible beneficiary shall receive the 
following benefits under the CLASS Independence Benefit Plan:
          [``(1) Cash benefit.--A cash benefit established by 
        the Secretary in accordance with the requirements of 
        section 3203(a)(1)(D) that--
                  [``(A) the first year in which beneficiaries 
                receive the benefits under the plan, is not 
                less than the average dollar amount specified 
                in clause (i) of such section; and
                  [``(B) for any subsequent year, is not less 
                than the average per day dollar limit 
                applicable under this subparagraph for the 
                preceding year, increased by the percentage 
                increase in the consumer price index for all 
                urban consumers (U.S. city average) over the 
                previous year.
          [``(2) Advocacy services.--Advocacy services in 
        accordance with subsection (d).
          [``(3) Advice and assistance counseling.--Advice and 
        assistance counseling in accordance with subsection 
        (e).
          [``(4) Administrative expenses.--Advocacy services 
        and advise and assistance counseling services under 
        paragraphs (2) and (3) of this subsection shall be 
        included as administrative expenses under section 
        3203(b)(3).
  [``(c) Payment of benefits.--
          [``(1) Life independence account.--
                  [``(A) In general.--The Secretary shall 
                establish procedures for administering the 
                provision of benefits to eligible beneficiaries 
                under the CLASS Independence Benefit Plan, 
                including the payment of the cash benefit for 
                the beneficiary into a Life Independence 
                Account established by the Secretary on behalf 
                of each eligible beneficiary.
                  [``(B) Use of cash benefits.--Cash benefits 
                paid into a Life Independence Account of an 
                eligible beneficiary shall be used to purchase 
                nonmedical services and supports that the 
                beneficiary needs to maintain his or her 
                independence at home or in another residential 
                setting of their choice in the community, 
                including (but not limited to) home 
                modifications, assistive technology, accessible 
                transportation, homemaker services, respite 
                care, personal assistance services, home care 
                aides, and nursing support. Nothing in the 
                preceding sentence shall prevent an eligible 
                beneficiary from using cash benefits paid into 
                a Life Independence Account for obtaining 
                assistance with decision making concerning 
                medical care, including the right to accept or 
                refuse medical or surgical treatment and the 
                right to formulate advance directives or other 
                written instructions recognized under State 
                law, such as a living will or durable power of 
                attorney for health care, in the case that an 
                injury or illness causes the individual to be 
                unable to make health care decisions.
                  [``(C) Electronic management of funds.--The 
                Secretary shall establish procedures for--
                          [``(i) crediting an account 
                        established on behalf of a beneficiary 
                        with the beneficiary's cash daily 
                        benefit;
                          [``(ii) allowing the beneficiary to 
                        access such account through debit 
                        cards; and
                          [``(iii) accounting for withdrawals 
                        by the beneficiary from such account.
                  [``(D) Primary payor rules for beneficiaries 
                who are enrolled in medicaid.--In the case of 
                an eligible beneficiary who is enrolled in 
                Medicaid, the following payment rules shall 
                apply:
                          [``(i) Institutionalized 
                        beneficiary.--If the beneficiary is a 
                        patient in a hospital, nursing 
                        facility, intermediate care facility 
                        for the mentally retarded, or an 
                        institution for mental diseases, the 
                        beneficiary shall retain an amount 
                        equal to 5 percent of the beneficiary's 
                        daily or weekly cash benefit (as 
                        applicable) (which shall be in addition 
                        to the amount of the beneficiary's 
                        personal needs allowance provided under 
                        Medicaid), and the remainder of such 
                        benefit shall be applied toward the 
                        facility's cost of providing the 
                        beneficiary's care, and Medicaid shall 
                        provide secondary coverage for such 
                        care.
                          [``(ii) Beneficiaries receiving home 
                        and community-based services.--
                                  [``(I) 50 percent of benefit 
                                retained by beneficiary.--
                                Subject to subclause (II), if a 
                                beneficiary is receiving 
                                medical assistance under 
                                Medicaid for home and community 
                                based services, the beneficiary 
                                shall retain an amount equal to 
                                50 percent of the beneficiary's 
                                daily or weekly cash benefit 
                                (as applicable), and the 
                                remainder of the daily or 
                                weekly cash benefit shall be 
                                applied toward the cost to the 
                                State of providing such 
                                assistance (and shall not be 
                                used to claim Federal matching 
                                funds under Medicaid), and 
                                Medicaid shall provide 
                                secondary coverage for the 
                                remainder of any costs incurred 
                                in providing such assistance.
                                  [``(II) Requirement for state 
                                offset.--A State shall be paid 
                                the remainder of a 
                                beneficiary's daily or weekly 
                                cash benefit under subclause 
                                (I) only if the State home and 
                                community-based waiver under 
                                section 1115 of the Social 
                                Security Act (42 U.S.C. 1315) 
                                or subsection (c) or (d) of 
                                section 1915 of such Act (42 
                                U.S.C. 1396n), or the State 
                                plan amendment under subsection 
                                (i) of such section does not 
                                include a waiver of the 
                                requirements of section 
                                1902(a)(1) of the Social 
                                Security Act (relating to 
                                statewideness) or of section 
                                1902(a)(10)(B) of such Act 
                                (relating to comparability) and 
                                the State offers at a minimum 
                                case management services, 
                                personal care services, 
                                habilitation services, and 
                                respite care under such a 
                                waiver or State plan amendment.
                                  [``(III) Definition of home 
                                and community-based services.--
                                In this clause, the term `home 
                                and community-based services' 
                                means any services which may be 
                                offered under a home and 
                                community-based waiver 
                                authorized for a State under 
                                section 1115 of the Social 
                                Security Act (42 U.S.C. 1315) 
                                or subsection (c) or (d) of 
                                section 1915 of such Act (42 
                                U.S.C. 1396n) or under a State 
                                plan amendment under subsection 
                                (i) of such section.
                          [``(iii) Beneficiaries enrolled in 
                        programs of all-inclusive care for the 
                        elderly (pace).--
                                  [``(I) In general.--Subject 
                                to subclause (II), if a 
                                beneficiary is receiving 
                                medical assistance under 
                                Medicaid for PACE program 
                                services under section 1934 of 
                                the Social Security Act (42 
                                U.S.C. 1396u-4), the 
                                beneficiary shall retain an 
                                amount equal to 50 percent of 
                                the beneficiary's daily or 
                                weekly cash benefit (as 
                                applicable), and the remainder 
                                of the daily or weekly cash 
                                benefit shall be applied toward 
                                the cost to the State of 
                                providing such assistance (and 
                                shall not be used to claim 
                                Federal matching funds under 
                                Medicaid), and Medicaid shall 
                                provide secondary coverage for 
                                the remainder of any costs 
                                incurred in providing such 
                                assistance.
                                  [``(II) Institutionalized 
                                recipients of pace program 
                                services.--If a beneficiary 
                                receiving assistance under 
                                Medicaid for PACE program 
                                services is a patient in a 
                                hospital, nursing facility, 
                                intermediate care facility for 
                                the mentally retarded, or an 
                                institution for mental 
                                diseases, the beneficiary shall 
                                be treated as in 
                                institutionalized beneficiary 
                                under clause (i).
          [``(2) Authorized representatives.--
                  [``(A) In general.--The Secretary shall 
                establish procedures to allow access to a 
                beneficiary's cash benefits by an authorized 
                representative of the eligible beneficiary on 
                whose behalf such benefits are paid.
                  [``(B) Quality assurance and protection 
                against fraud and abuse.--The procedures 
                established under subparagraph (A) shall ensure 
                that authorized representatives of eligible 
                beneficiaries comply with standards of conduct 
                established by the Secretary, including 
                standards requiring that such representatives 
                provide quality services on behalf of such 
                beneficiaries, do not have conflicts of 
                interest, and do not misuse benefits paid on 
                behalf of such beneficiaries or otherwise 
                engage in fraud or abuse.
          [``(3) Commencement of benefits.--Benefits shall be 
        paid to, or on behalf of, an eligible beneficiary 
        beginning with the first month in which an application 
        for such benefits is approved.
          [``(4) Rollover option for lump-sum payment.--An 
        eligible beneficiary may elect to--
                  [``(A) defer payment of their daily or weekly 
                benefit and to rollover any such deferred 
                benefits from month-to-month, but not from 
                year-to-year; and
                  [``(B) receive a lump-sum payment of such 
                deferred benefits in an amount that may not 
                exceed the lesser of--
                          [``(i) the total amount of the 
                        accrued deferred benefits; or
                          [``(ii) the applicable annual 
                        benefit.
          [``(5) Period for determination of annual benefits.--
                  [``(A) In general.--The applicable period for 
                determining with respect to an eligible 
                beneficiary the applicable annual benefit and 
                the amount of any accrued deferred benefits is 
                the 12-month period that commences with the 
                first month in which the beneficiary began to 
                receive such benefits, and each 12-month period 
                thereafter.
                  [``(B) Inclusion of increased benefits.--The 
                Secretary shall establish procedures under 
                which cash benefits paid to an eligible 
                beneficiary that increase or decrease as a 
                result of a change in the functional status of 
                the beneficiary before the end of a 12-month 
                benefit period shall be included in the 
                determination of the applicable annual benefit 
                paid to the eligible beneficiary.
                  [``(C) Recoupment of unpaid, accrued 
                benefits.--
                          [``(i) In general.--The Secretary, in 
                        coordination with the Secretary of the 
                        Treasury, shall recoup any accrued 
                        benefits in the event of--
                                  [``(I) the death of a 
                                beneficiary; or
                                  [``(II) the failure of a 
                                beneficiary to elect under 
                                paragraph (4)(B) to receive 
                                such benefits as a lump-sum 
                                payment before the end of the 
                                12-month period in which such 
                                benefits accrued.
                          [``(ii) Payment into class 
                        independence fund.--Any benefits 
                        recouped in accordance with clause (i) 
                        shall be paid into the CLASS 
                        Independence Fund and used in 
                        accordance with section 3206.
          [``(6) Requirement to recertify eligibility for 
        receipt of benefits.--An eligible beneficiary shall 
        periodically, as determined by the Secretary--
                  [``(A) recertify by submission of medical 
                evidence the beneficiary's continued 
                eligibility for receipt of benefits; and
                  [``(B) submit records of expenditures 
                attributable to the aggregate cash benefit 
                received by the beneficiary during the 
                preceding year.
          [``(7) Supplement, not supplant other health care 
        benefits.--Subject to the Medicaid payment rules under 
        paragraph (1)(D), benefits received by an eligible 
        beneficiary shall supplement, but not supplant, other 
        health care benefits for which the beneficiary is 
        eligible under Medicaid or any other Federally funded 
        program that provides health care benefits or 
        assistance.
  [``(d) Advocacy services.--An agreement entered into under 
subsection (a)(2)(A)(ii) shall require the Protection and 
Advocacy System for the State to--
          [``(1) assign, as needed, an advocacy counselor to 
        each eligible beneficiary that is covered by such 
        agreement and who shall provide an eligible beneficiary 
        with--
                  [``(A) information regarding how to access 
                the appeals process established for the 
                program;
                  [``(B) assistance with respect to the annual 
                recertification and notification required under 
                subsection (c)(6); and
                  [``(C) such other assistance with obtaining 
                services as the Secretary, by regulation, shall 
                require; and
          [``(2) ensure that the System and such counselors 
        comply with the requirements of subsection (h).
  [``(e) Advice and assistance counseling.--An agreement 
entered into under subsection (a)(2)(A)(iii) shall require the 
entity to assign, as requested by an eligible beneficiary that 
is covered by such agreement, an advice and assistance 
counselor who shall provide an eligible beneficiary with 
information regarding--
          [``(1) accessing and coordinating long-term services 
        and supports in the most integrated setting;
          [``(2) possible eligibility for other benefits and 
        services;
          [``(3) development of a service and support plan;
          [``(4) information about programs established under 
        the Assistive Technology Act of 1998 and the services 
        offered under such programs;
          [``(5) available assistance with decision making 
        concerning medical care, including the right to accept 
        or refuse medical or surgical treatment and the right 
        to formulate advance directives or other written 
        instructions recognized under State law, such as a 
        living will or durable power of attorney for health 
        care, in the case that an injury or illness causes the 
        individual to be unable to make health care decisions; 
        and
          [``(6) such other services as the Secretary, by 
        regulation, may require.
  [``(f) No effect on eligibility for other benefits.--Benefits 
paid to an eligible beneficiary under the CLASS program shall 
be disregarded for purposes of determining or continuing the 
beneficiary's eligibility for receipt of benefits under any 
other Federal, State, or locally funded assistance program, 
including benefits paid under titles II, XVI, XVIII, XIX, or 
XXI of the Social Security Act (42 U.S.C. 401 et seq., 1381 et 
seq., 1395 et seq., 1396 et seq., 1397aa et seq.), under the 
laws administered by the Secretary of Veterans Affairs, under 
low-income housing assistance programs, or under the 
supplemental nutrition assistance program established under the 
Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.).
  [``(g) Rule of construction.--Nothing in this title shall be 
construed as prohibiting benefits paid under the CLASS 
Independence Benefit Plan from being used to compensate a 
family caregiver for providing community living assistance 
services and supports to an eligible beneficiary.
  [``(h) Protection against conflict of interests.--The 
Secretary shall establish procedures to ensure that the 
Eligibility Assessment System, the Protection and Advocacy 
System for a State, advocacy counselors for eligible 
beneficiaries, and any other entities that provide services to 
active enrollees and eligible beneficiaries under the CLASS 
program comply with the following:
          [``(1) If the entity provides counseling or planning 
        services, such services are provided in a manner that 
        fosters the best interests of the active enrollee or 
        beneficiary.
          [``(2) The entity has established operating 
        procedures that are designed to avoid or minimize 
        conflicts of interest between the entity and an active 
        enrollee or beneficiary.
          [``(3) The entity provides information about all 
        services and options available to the active enrollee 
        or beneficiary, to the best of its knowledge, including 
        services available through other entities or providers.
          [``(4) The entity assists the active enrollee or 
        beneficiary to access desired services, regardless of 
        the provider.
          [``(5) The entity reports the number of active 
        enrollees and beneficiaries provided with assistance by 
        age, disability, and whether such enrollees and 
        beneficiaries received services from the entity or 
        another entity.
          [``(6) If the entity provides counseling or planning 
        services, the entity ensures that an active enrollee or 
        beneficiary is informed of any financial interest that 
        the entity has in a service provider.
          [``(7) The entity provides an active enrollee or 
        beneficiary with a list of available service providers 
        that can meet the needs of the active enrollee or 
        beneficiary.

[``SEC. 3206. CLASS INDEPENDENCE FUND.

  [``(a) Establishment of CLASS Independence Fund.--There is 
established in the Treasury of the United States a trust fund 
to be known as the `CLASS Independence Fund'. The Secretary of 
the Treasury shall serve as Managing Trustee of such Fund. The 
Fund shall consist of all amounts derived from payments into 
the Fund under sections 3204(f) and 3205(c)(5)(C)(ii), and 
remaining after investment of such amounts under subsection 
(b), including additional amounts derived as income from such 
investments. The amounts held in the Fund are appropriated and 
shall remain available without fiscal year limitation--
          [``(1) to be held for investment on behalf of 
        individuals enrolled in the CLASS program;
          [``(2) to pay the administrative expenses related to 
        the Fund and to investment under subsection (b); and
          [``(3) to pay cash benefits to eligible beneficiaries 
        under the CLASS Independence Benefit Plan.
  [``(b) Investment of fund balance.--The Secretary of the 
Treasury shall invest and manage the CLASS Independence Fund in 
the same manner, and to the same extent, as the Federal 
Supplementary Medical Insurance Trust Fund may be invested and 
managed under subsections (c), (d), and (e) of section 1841(d) 
of the Social Security Act (42 U.S.C. 1395t).
  [``(c) Board of Trustees.--
          [``(1) In general.--With respect to the CLASS 
        Independence Fund, there is hereby created a body to be 
        known as the Board of Trustees of the CLASS 
        Independence Fund (hereinafter in this section referred 
        to as the `Board of Trustees') composed of the 
        Secretary of the Treasury, the Secretary of Labor, and 
        the Secretary of Health and Human Services, all ex 
        officio, and of two members of the public (both of whom 
        may not be from the same political party), who shall be 
        nominated by the President for a term of 4 years and 
        subject to confirmation by the Senate. A member of the 
        Board of Trustees serving as a member of the public and 
        nominated and confirmed to fill a vacancy occurring 
        during a term shall be nominated and confirmed only for 
        the remainder of such term. An individual nominated and 
        confirmed as a member of the public may serve in such 
        position after the expiration of such member's term 
        until the earlier of the time at which the member's 
        successor takes office or the time at which a report of 
        the Board is first issued under paragraph (2) after the 
        expiration of the member's term. The Secretary of the 
        Treasury shall be the Managing Trustee of the Board of 
        Trustees. The Board of Trustees shall meet not less 
        frequently than once each calendar year. A person 
        serving on the Board of Trustees shall not be 
        considered to be a fiduciary and shall not be 
        personally liable for actions taken in such capacity 
        with respect to the Trust Fund.
          [``(2) Duties.--
                  [``(A) In general.--It shall be the duty of 
                the Board of Trustees to do the following:
                          [``(i) Hold the CLASS Independence 
                        Fund.
                          [``(ii) Report to the Congress not 
                        later than the first day of April of 
                        each year on the operation and status 
                        of the CLASS Independence Fund during 
                        the preceding fiscal year and on its 
                        expected operation and status during 
                        the current fiscal year and the next 2 
                        fiscal years.
                          [``(iii) Report immediately to the 
                        Congress whenever the Board is of the 
                        opinion that the amount of the CLASS 
                        Independence Fund is not actuarially 
                        sound in regards to the projection 
                        under section 3203(b)(1)(B)(i).
                          [``(iv) Review the general policies 
                        followed in managing the CLASS 
                        Independence Fund, and recommend 
                        changes in such policies, including 
                        necessary changes in the provisions of 
                        law which govern the way in which the 
                        CLASS Independence Fund is to be 
                        managed.
                  [``(B) Report.--The report provided for in 
                subparagraph (A)(ii) shall--
                          [``(i) include--
                                  [``(I) a statement of the 
                                assets of, and the 
                                disbursements made from, the 
                                CLASS Independence Fund during 
                                the preceding fiscal year;
                                  [``(II) an estimate of the 
                                expected income to, and 
                                disbursements to be made from, 
                                the CLASS Independence Fund 
                                during the current fiscal year 
                                and each of the next 2 fiscal 
                                years;
                                  [``(III) a statement of the 
                                actuarial status of the CLASS 
                                Independence Fund for the 
                                current fiscal year, each of 
                                the next 2 fiscal years, and as 
                                projected over the 75-year 
                                period beginning with the 
                                current fiscal year; and
                                  [``(IV) an actuarial opinion 
                                by the Chief Actuary of the 
                                Centers for Medicare & Medicaid 
                                Services certifying that the 
                                techniques and methodologies 
                                used are generally accepted 
                                within the actuarial profession 
                                and that the assumptions and 
                                cost estimates used are 
                                reasonable; and
                          [``(ii) be printed as a House 
                        document of the session of the Congress 
                        to which the report is made.
                  [``(C) Recommendations.--If the Board of 
                Trustees determines that enrollment trends and 
                expected future benefit claims on the CLASS 
                Independence Fund are not actuarially sound in 
                regards to the projection under section 
                3203(b)(1)(B)(i) and are unlikely to be 
                resolved with reasonable premium increases or 
                through other means, the Board of Trustees 
                shall include in the report provided for in 
                subparagraph (A)(ii) recommendations for such 
                legislative action as the Board of Trustees 
                determine to be appropriate, including whether 
                to adjust monthly premiums or impose a 
                temporary moratorium on new enrollments.

[``SEC. 3207. CLASS INDEPENDENCE ADVISORY COUNCIL.

  [``(a) Establishment.--There is hereby created an Advisory 
Committee to be known as the `CLASS Independence Advisory 
Council'.
  [``(b) Membership.--
          [``(1) In general.--The CLASS Independence Advisory 
        Council shall be composed of not more than 15 
        individuals, not otherwise in the employ of the United 
        States--
                  [``(A) who shall be appointed by the 
                President without regard to the civil service 
                laws and regulations; and
                  [``(B) a majority of whom shall be 
                representatives of individuals who participate 
                or are likely to participate in the CLASS 
                program, and shall include representatives of 
                older and younger workers, individuals with 
                disabilities, family caregivers of individuals 
                who require services and supports to maintain 
                their independence at home or in another 
                residential setting of their choice in the 
                community, individuals with expertise in long-
                term care or disability insurance, actuarial 
                science, economics, and other relevant 
                disciplines, as determined by the Secretary.
          [``(2) Terms.--
                  [``(A) In general.--The members of the CLASS 
                Independence Advisory Council shall serve 
                overlapping terms of 3 years (unless appointed 
                to fill a vacancy occurring prior to the 
                expiration of a term, in which case the 
                individual shall serve for the remainder of the 
                term).
                  [``(B) Limitation.--A member shall not be 
                eligible to serve for more than 2 consecutive 
                terms.
          [``(3) Chair.--The President shall, from time to 
        time, appoint one of the members of the CLASS 
        Independence Advisory Council to serve as the Chair.
  [``(c) Duties.--The CLASS Independence Advisory Council shall 
advise the Secretary on matters of general policy in the 
administration of the CLASS program established under this 
title and in the formulation of regulations under this title 
including with respect to--
          [``(1) the development of the CLASS Independence 
        Benefit Plan under section 3203;
          [``(2) the determination of monthly premiums under 
        such plan; and
          [``(3) the financial solvency of the program.
  [``(d) Application of FACA.--The Federal Advisory Committee 
Act (5 U.S.C. App.), other than section 14 of that Act, shall 
apply to the CLASS Independence Advisory Council.
  [``(e) Authorization of appropriations.--
          [``(1) In general.--There are authorized to be 
        appropriated to the CLASS Independence Advisory Council 
        to carry out its duties under this section, such sums 
        as may be necessary for fiscal year 2011 and for each 
        fiscal year thereafter.
          [``(2) Availability.--Any sums appropriated under the 
        authorization contained in this section shall remain 
        available, without fiscal year limitation, until 
        expended.

[``SEC. 3208. SOLVENCY AND FISCAL INDEPENDENCE; REGULATIONS; ANNUAL 
                    REPORT.

  [``(a) Solvency.--The Secretary shall regularly consult with 
the Board of Trustees of the CLASS Independence Fund and the 
CLASS Independence Advisory Council, for purposes of ensuring 
that enrollees premiums are adequate to ensure the financial 
solvency of the CLASS program, both with respect to fiscal 
years occurring in the near-term and fiscal years occurring 
over 20- and 75-year periods, taking into account the 
projections required for such periods under subsections 
(a)(1)(A)(i) and (b)(1)(B)(i) of section 3202.
  [``(b) No taxpayer funds used To pay benefits.--No taxpayer 
funds shall be used for payment of benefits under a CLASS 
Independent Benefit Plan. For purposes of this subsection, the 
term `taxpayer funds' means any Federal funds from a source 
other than premiums deposited by CLASS program participants in 
the CLASS Independence Fund and any associated interest 
earnings.
  [``(c) Regulations.--The Secretary shall promulgate such 
regulations as are necessary to carry out the CLASS program in 
accordance with this title. Such regulations shall include 
provisions to prevent fraud and abuse under the program.
  [``(d) Annual report.--Beginning January 1, 2014, the 
Secretary shall submit an annual report to Congress on the 
CLASS program. Each report shall include the following:
          [``(1) The total number of enrollees in the program.
          [``(2) The total number of eligible beneficiaries 
        during the fiscal year.
          [``(3) The total amount of cash benefits provided 
        during the fiscal year.
          [``(4) A description of instances of fraud or abuse 
        identified during the fiscal year.
          [``(5) Recommendations for such administrative or 
        legislative action as the Secretary determines is 
        necessary to improve the program, ensure the solvency 
        of the program, or to prevent the occurrence of fraud 
        or abuse.

[``SEC. 3209. INSPECTOR GENERAL'S REPORT.

  [The Inspector General of the Department of Health and Human 
Services shall submit an annual report to the Secretary and 
Congress relating to the overall progress of the CLASS program 
and of the existence of waste, fraud, and abuse in the CLASS 
program. Each such report shall include findings in the 
following areas:
          [``(1) The eligibility determination process.
          [``(2) The provision of cash benefits.
          [``(3) Quality assurance and protection against 
        waste, fraud, and abuse.
          [``(4) Recouping of unpaid and accrued benefits.

[``SEC. 3210. TAX TREATMENT OF PROGRAM.

  [``The CLASS program shall be treated for purposes of the 
Internal Revenue Code of 1986 in the same manner as a qualified 
long-term care insurance contract for qualified long-term care 
services.''.
          [(2) Conforming amendments to medicaid.--Section 
        1902(a) of the Social Security Act (42 U.S.C. 
        1396a(a)), as amended by section 6505, is amended by 
        inserting after paragraph (80) the following:
          [``(81) provide that the State will comply with such 
        regulations regarding the application of primary and 
        secondary payor rules with respect to individuals who 
        are eligible for medical assistance under this title 
        and are eligible beneficiaries under the CLASS program 
        established under title XXXII of the Public Health 
        Service Act as the Secretary shall establish; and''.
  [(b) Assurance of adequate infrastructure for the provision 
of personal care attendant workers.--Section 1902(a) of the 
Social Security Act (42 U.S.C. 1396a(a)), as amended by 
subsection (a)(2), is amended by inserting after paragraph (81) 
the following:
          [``(82) provide that, not later than 2 years after 
        the date of enactment of the Community Living 
        Assistance Services and Supports Act, each State 
        shall--
                  [``(A) assess the extent to which entities 
                such as providers of home care, home health 
                services, home and community service providers, 
                public authorities created to provide personal 
                care services to individuals eligible for 
                medical assistance under the State plan, and 
                nonprofit organizations, are serving or have 
                the capacity to serve as fiscal agents for, 
                employers of, and providers of employment-
                related benefits for, personal care attendant 
                workers who provide personal care services to 
                individuals receiving benefits under the CLASS 
                program established under title XXXII of the 
                Public Health Service Act, including in rural 
                and underserved areas;
                  [``(B) designate or create such entities to 
                serve as fiscal agents for, employers of, and 
                providers of employment-related benefits for, 
                such workers to ensure an adequate supply of 
                the workers for individuals receiving benefits 
                under the CLASS program, including in rural and 
                underserved areas; and
                  [``(C) ensure that the designation or 
                creation of such entities will not negatively 
                alter or impede existing programs, models, 
                methods, or administration of service delivery 
                that provide for consumer controlled or self-
                directed home and community services and 
                further ensure that such entities will not 
                impede the ability of individuals to direct and 
                control their home and community services, 
                including the ability to select, manage, 
                dismiss, co-employ, or employ such workers or 
                inhibit such individuals from relying on family 
                members for the provision of personal care 
                services.''.
  [(c) Personal care attendants workforce advisory panel.--
          [(1) Establishment.--Not later than 90 days after the 
        date of enactment of this Act, the Secretary of Health 
        and Human Services shall establish a Personal Care 
        Attendants Workforce Advisory Panel for the purpose of 
        examining and advising the Secretary and Congress on 
        workforce issues related to personal care attendant 
        workers, including with respect to the adequacy of the 
        number of such workers, the salaries, wages, and 
        benefits of such workers, and access to the services 
        provided by such workers.
          [(2) Membership.--In appointing members to the 
        Personal Care Attendants Workforce Advisory Panel, the 
        Secretary shall ensure that such members include the 
        following:
                  [(A) Individuals with disabilities of all 
                ages.
                  [(B) Senior individuals.
                  [(C) Representatives of individuals with 
                disabilities.
                  [(D) Representatives of senior individuals.
                  [(E) Representatives of workforce and labor 
                organizations.
                  [(F) Representatives of home and community-
                based service providers.
                  [(G) Representatives of assisted living 
                providers.
  [(d) Inclusion of CLASS Program Information in the national 
clearinghouse for long-term care information; extension of 
funding.--Section 6021(d) of the Deficit Reduction Act of 2005 
(42 U.S.C. 1396p note) is amended--
          [(1) in paragraph (2)(A)--
                  [(A) in clause (ii), by striking ``and'' at 
                the end;
                  [(B) in clause (iii), by striking the period 
                at the end and inserting ``; and''; and
                  [(C) by adding at the end the following:
                          [``(iv) include information regarding 
                        the CLASS program established under 
                        title XXXII of the Public Health 
                        Service Act and information regarding 
                        how benefits provided under a CLASS 
                        Independence Benefit Plan differ from 
                        disability insurance benefits.''; and
          [(2) in paragraph (3), by striking ``2010'' and 
        inserting ``2015''.
  [(e) Effective date.--The amendments made by subsections (a), 
(b), and (d) take effect on January 1, 2011.
  [(f) Rule of construction.--Nothing in this title or the 
amendments made by this title are intended to replace or 
displace public or private disability insurance benefits, 
including such benefits that are for income replacement.]

           *       *       *       *       *       *       *

                              ----------                              

                          SOCIAL SECURITY ACT

           *       *       *       *       *       *       *
TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS

           *       *       *       *       *       *       *

                   STATE PLANS FOR MEDICAL ASSISTANCE

  Sec. 1902. (a) A State plan for medical assistance must--
          (1) * * *

           *       *       *       *       *       *       *

          (80) provide that the State shall not provide any 
        payments for items or services provided under the State 
        plan or under a waiver to any financial institution or 
        entity located outside of the United States; and
          [(81) provide that the State will comply with such 
        regulations regarding the application of primary and 
        secondary payor rules with respect to individuals who 
        are eligible for medical assistance under this title 
        and are eligible beneficiaries under the CLASS program 
        established under title XXXII of the Public Health 
        Service Act as the Secretary shall establish;
          [(82) provide that, not later than 2 years after the 
        date of enactment of the Community Living Assistance 
        Services and Supports Act, each State shall--
                  [(A) assess the extent to which entities such 
                as providers of home care, home health 
                services, home and community service providers, 
                public authorities created to provide personal 
                care services to individuals eligible for 
                medical assistance under the State plan, and 
                nonprofit organizations, are serving or have 
                the capacity to serve as fiscal agents for, 
                employers of, and providers of employment-
                related benefits for, personal care attendant 
                workers who provide personal care services to 
                individuals receiving benefits under the CLASS 
                program established under title XXXII of the 
                Public Health Service Act, including in rural 
                and underserved areas;
                  [(B) designate or create such entities to 
                serve as fiscal agents for, employers of, and 
                providers of employment-related benefits for, 
                such workers to ensure an adequate supply of 
                the workers for individuals receiving benefits 
                under the CLASS program, including in rural and 
                underserved areas; and
                  [(C) ensure that the designation or creation 
                of such entities will not negatively alter or 
                impede existing programs, models, methods, or 
                administration of service delivery that provide 
                for consumer controlled or self-directed home 
                and community services and further ensure that 
                such entities will not impede the ability of 
                individuals to direct and control their home 
                and community services, including the ability 
                to select, manage, dismiss, co-employ, or 
                employ such workers or inhibit such individuals 
                from relying on family members for the 
                provision of personal care services; and]
          [(83)] (81) provide for implementation of the payment 
        models specified by the Secretary under section 
        1115A(c) for implementation on a nationwide basis 
        unless the State demonstrates to the satisfaction of 
        the Secretary that implementation would not be 
        administratively feasible or appropriate to the health 
        care delivery system of the State.

           *       *       *       *       *       *       *

                              ----------                              

                     DEFICIT REDUCTION ACT OF 2005

           *       *       *       *       *       *       *
                      TITLE VI--MEDICAID AND SCHIP

Subtitle A--Medicaid

           *       *       *       *       *       *       *

CHAPTER 2--LONG-TERM CARE UNDER MEDICAID

           *       *       *       *       *       *       *

           Subchapter B--Expanded Access to Certain Benefits

SEC. 6021. EXPANSION OF STATE LONG-TERM CARE PARTNERSHIP PROGRAM.

  (a) * * *

           *       *       *       *       *       *       *

  (d) National Clearinghouse for Long-Term Care Information.--
          (1) * * *
          (2) Duties.--
                  (A) In general.--The National Clearinghouse 
                for Long-Term Care Information shall--
                          (i) * * *
                          (ii) provide objective information to 
                        assist consumers with the 
                        decisionmaking process for determining 
                        whether to purchase long-term care 
                        insurance or to pursue other private 
                        market alternatives for purchasing 
                        long-term care and provide contact 
                        information for additional objective 
                        resources on planning for long-term 
                        care needs; and
                          (iii) maintain a list of States with 
                        State long-term care insurance 
                        partnerships under the Medicaid program 
                        that provide reciprocal recognition of 
                        long-term care insurance policies 
                        issued under such partnerships[; and].
                          [(iv) include information regarding 
                        the CLASS program established under 
                        title XXXII of the Public Health 
                        Service Act and information regarding 
                        how benefits provided under a CLASS 
                        Independence Benefit Plan differ from 
                        disability insurance benefits.]

           *       *       *       *       *       *       *

          (3) Appropriation.--Out of any funds in the Treasury 
        not otherwise appropriated, there is appropriated to 
        carry out this subsection, $3,000,000 for each of 
        fiscal years 2006 through [2015] 2010.

           *       *       *       *       *       *       *

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