II 

109TH CONGRESS 

2D SESSION S. 2244 

To provide funding and incentives for caregiver support and long-term care 

assistance. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 2, 2006 

Mr. MENENDEZ (for himself, Mr. LAUTENBERG, and Mr. DURBIN) introduced 

the following bill; which was read twice and referred to the Committee 

on Finance 

A BILL 

To provide funding and incentives for caregiver support and 

long-term care assistance. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Caregiver Assistance 

5 and Relief Effort Act of 2006’’ or as the ‘‘CARE Act of 

6 2006’’. 

7 SEC. 2. INCREASED FUNDING FOR NATIONAL FAMILY 

8 CAREGIVER SUPPORT PROGRAM. 

9 (a) IN GENERAL.—Section 303(e)(1) of the Older 

10 Americans Act of 1965 (42 U.S.C. 3023(e)(1)) is amend-
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1 ed by striking ‘‘$125,000,000 for fiscal year 2001’’ and 

2 inserting ‘‘$250,000,000 for fiscal year 2006’’. 

3 (b) NATIVE AMERICANS.—Section 643(2) of the 

4 Older Americans Act of 1965 (42 U.S.C. 3057n(2)) is 

5 amended by striking ‘‘$5,000,000 for fiscal year 2001’’ 

6 and inserting ‘‘$10,000,000 for fiscal year 2006’’. 

7 SEC. 3. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE 

8 NEEDS. 

9 (a) IN GENERAL.—Subpart C of part IV of sub10 chapter A of chapter 1 of the Internal Revenue Code of 

11 1986 (relating to refundable credits) is amended by redes12 ignating section 36 as section 37 and by inserting after 

13 section 35 the following new section: 

14 ‘‘SEC. 36. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE 

15 NEEDS. 

16 ‘‘(a) ALLOWANCE OF CREDIT.— 

17 ‘‘(1) IN GENERAL.—There shall be allowed as a 

18 credit against the tax imposed by this chapter for 

19 the taxable year an amount equal to the applicable 

20 amount multiplied by the number of applicable indi21 viduals with respect to whom the taxpayer is an eli22 gible caregiver for the taxable year. 

23 ‘‘(2) APPLICABLE AMOUNT.—For purposes of 

24 paragraph (1), the applicable amount shall be deter25 mined in accordance with the following table: 
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‘‘In the case of taxable years beginning in: 

The applicable 

amount 

is: 

2006 ................................................................................................ $2,500

2007 ................................................................................................ $2,750

2008 or thereafter .......................................................................... $3,000. 

1 ‘‘(b) LIMITATION BASED ON ADJUSTED GROSS IN2 COME.— 

3 ‘‘(1) IN GENERAL.—The amount of the credit 

4 allowable under subsection (a) shall be reduced (but 

5 not below zero) by $100 for each $1,000 (or fraction 

6 thereof) by which the taxpayer’s modified adjusted 

7 gross income exceeds the threshold amount. For 

8 purposes of the preceding sentence, the term ‘modi9 fied adjusted gross income’ means adjusted gross in10 come increased by any amount excluded from gross 

11 income under section 911, 931, or 933. 

12 ‘‘(2) THRESHOLD AMOUNT.—For purposes of 

13 paragraph (1), the term ‘threshold amount’ means 

14 $75,000 (twice such amount in the case of joint re15 turn). 

16 ‘‘(3) INDEXING.—In the case of any taxable 

17 year beginning in a calendar year after 2006, the 

18 $75,000 amount contained in paragraph (2) shall be 

19 increased by an amount equal to the product of— 

20 ‘‘(A) such dollar amount, and 
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1 ‘‘(B) the medical care cost adjustment de2 termined under section 213(d)(10)(B)(ii) for 

3 the calendar year in which the taxable year be4 gins, determined by substituting ‘2005’ for 

5 ‘1996’ in subclause (II) thereof. 

6 If any increase determined under the preceding sen7 tence is not a multiple of $50, such increase shall 

8 be rounded to the next lowest multiple of $50. 

9 ‘‘(c) DEFINITIONS.—For purposes of this section— 

10 ‘‘(1) APPLICABLE INDIVIDUAL.— 

11 ‘‘(A) IN GENERAL.—The term ‘applicable 

12 individual’ means, with respect to any taxable 

13 year, any individual who has been certified, be14 fore the due date for filing the return of tax for 

15 the taxable year (without extensions), by a phy16 sician (as defined in section 1861(r)(1) of the 

17 Social Security Act) as being an individual with 

18 long-term care needs described in subparagraph 

19 (B) for a period— 

20 ‘‘(i) which is at least 180 consecutive 

21 days, and 

22 ‘‘(ii) a portion of which occurs within 

23 the taxable year. 

24 Such term shall not include any individual oth25 erwise meeting the requirements of the pre-
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•S 2244 IS 

ceding sentence unless within the 391 1 ⁄2 month 

2 period ending on such due date (or such other 

3 period as the Secretary prescribes) a physician 

4 (as so defined) has certified that such indi5 vidual meets such requirements. 

6 ‘‘(B) INDIVIDUALS WITH LONG-TERM CARE

7 NEEDS.—An individual is described in this sub8 paragraph if the individual meets any of the fol9 lowing requirements: 

10 ‘‘(i) The individual is at least 18 years 

11 of age and— 

12 ‘‘(I) is unable to perform (with13 out substantial assistance from an14 other individual) at least 3 activities 

15 of daily living (as defined in section 

16 7702B(c)(2)(B)) due to a loss of 

17 functional capacity, or 

18 ‘‘(II) requires substantial super19 vision to protect such individual from 

20 threats to health and safety due to se21 vere cognitive impairment and is un22 able to perform at least 1 activity of 

23 daily living (as so defined) or to the 

24 extent provided in regulations pre25 scribed by the Secretary (in consulta-
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1 tion with the Secretary of Health and 

2 Human Services), is unable to engage 

3 in age appropriate activities. 

4 ‘‘(ii) The individual is at least 6 but 

5 not 18 years of age and— 

6 ‘‘(I) is unable to perform (with7 out substantial assistance from an8 other individual) at least 3 activities 

9 of daily living (as defined in section 

10 7702B(c)(2)(B)) due to a loss of 

11 functional capacity, 

12 ‘‘(II) requires substantial super13 vision to protect such individual from 

14 threats to health and safety due to se15 vere cognitive impairment and is un16 able to perform at least 1 activity of 

17 daily living (as so defined) or to the 

18 extent provided in regulations pre19 scribed by the Secretary (in consulta20 tion with the Secretary of Health and 

21 Human Services), is unable to engage 

22 in age appropriate activities, 

23 ‘‘(III) has a level of disability 

24 similar to the level of disability de25 scribed in subclause (I) (as deter-
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1 mined under regulations promulgated 

2 by the Secretary), or 

3 ‘‘(IV) has a complex medical con4 dition (as defined by the Secretary) 

5 that requires medical management 

6 and coordination of care. 

7 ‘‘(iii) The individual is at least 2 but 

8 not 6 years of age and— 

9 ‘‘(I) is unable due to a loss of 

10 functional capacity to perform (with11 out substantial assistance from an12 other individual) at least 2 of the fol13 lowing activities: eating, transferring, 

14 or mobility, 

15 ‘‘(II) has a level of disability 

16 similar to the level of disability de17 scribed in subclause (I) (as deter18 mined under regulations promulgated 

19 by the Secretary), or 

20 ‘‘(III) has a complex medical con21 dition (as defined by the Secretary) 

22 that requires medical management 

23 and coordination of care. 

24 ‘‘(iv) The individual is under 2 years 

25 of age and— 
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1 ‘‘(I) requires specific durable 

2 medical equipment by reason of a se3 vere health condition or requires a 

4 skilled practitioner trained to address 

5 the individual’s condition to be avail6 able if the individual’s parents or 

7 guardians are absent, 

8 ‘‘(II) has a level of disability 

9 similar to the level of disability de10 scribed in subclause (I) (as deter11 mined under regulations promulgated 

12 by the Secretary), or 

13 ‘‘(III) has a complex medical con14 dition (as defined by the Secretary) 

15 that requires medical management 

16 and coordination of care. 

17 ‘‘(v) The individual has 5 or more 

18 chronic conditions (as defined in subpara19 graph (C)) and is unable to perform (with20 out substantial assistance from another in21 dividual) at least 1 activity of daily living 

22 (as so defined) due to a loss of functional 

23 capacity. 

24 ‘‘(C) CHRONIC CONDITION.—For purposes 

25 of this paragraph, the term ‘chronic condition’ 
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1 means a condition that lasts for at least 6 con2 secutive months and requires ongoing medical 

3 care. 

4 ‘‘(2) ELIGIBLE CAREGIVER.—A taxpayer shall 

5 be treated as an eligible caregiver for any taxable 

6 year with respect to the taxpayer and the taxpayer’s 

7 spouse and dependents. A taxpayer shall not be 

8 treated as an eligible caregiver with respect to him9 self for any taxable year beginning in any calendar 

10 year if any other person is an eligible caregiver with 

11 respect to the taxpayer for a taxable year which be12 gins in such calendar year. 

13 ‘‘(d) IDENTIFICATION REQUIREMENT.—No credit 

14 shall be allowed under this section to a taxpayer with re15 spect to any applicable individual unless the taxpayer in16 cludes the name and taxpayer identification number of 

17 such individual, and the identification number of the phy18 sician certifying such individual, on the return of tax for 

19 the taxable year. 

20 ‘‘(e) TAXABLE YEAR MUST BE FULL TAXABLE

21 YEAR.—Except in the case of a taxable year closed by rea22 son of the death of the taxpayer, no credit shall be allow23 able under this section in the case of a taxable year cov24 ering a period of less than 12 months.’’. 

25 (b) CONFORMING AMENDMENTS.— 
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1 (1) Section 6213(g)(2) of the Internal Revenue 

2 Code of 1986 is amended by striking ‘‘and’’ at the 

3 end of subparagraph (L), by striking the period at 

4 the end of subparagraph (M) and inserting ‘‘, and’’, 

5 and by inserting after subparagraph (M) the fol6 lowing new subparagraph: 

7 ‘‘(N) an omission of a correct TIN or phy8 sician identification required under section 

9 36(d) (relating to credit for taxpayers with 

10 long-term care needs) to be included on a re11 turn.’’. 

12 (2) The table of sections for subpart C of part 

13 IV of subchapter A of chapter 1 of such Code is 

14 amended by redesignating the item relating to sec15 tion 36 as an item relating to section 37 and by in16 serting before such item the following new item: 

‘‘Sec. 36. Credit for taxpayers with long-term care needs.’’. 

17 (3) Section 1324(b)(2) of title 31, United 

18 States Code, is amended by inserting ‘‘or 36’’ after 

19 ‘‘section 35’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to taxable years beginning after 

22 December 31, 2005. 
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1 SEC. 4. TREATMENT OF PREMIUMS ON QUALIFIED LONG2 TERM CARE INSURANCE CONTRACTS. 

3 (a) IN GENERAL.—Part VII of subchapter B of chap4 ter 1 of the Internal Revenue Code of 1986 (relating to 

5 additional itemized deductions) is amended by redesig6 nating section 224 as section 225 and by inserting after 

7 section 223 the following new section: 

8 ‘‘SEC. 224. PREMIUMS ON QUALIFIED LONG-TERM CARE IN9 SURANCE CONTRACTS. 

10 ‘‘(a) IN GENERAL.—In the case of an individual, 

11 there shall be allowed as a deduction an amount equal to 

12 the applicable percentage of the amount of eligible long13 term care premiums (as defined in section 213(d)(10)) 

14 paid during the taxable year for coverage for the taxpayer 

15 and the taxpayer’s spouse and dependents under a quali16 fied long-term care insurance contract (as defined in sec17 tion 7702B(b)). 

18 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 

19 subsection (a)— 

20 ‘‘(1) IN GENERAL.—Except as otherwise pro21 vided in this subsection, the applicable percentage 

22 shall be determined in accordance with the following 

23 table based on the number of years of continuous 

24 coverage (as of the close of the taxable year) of the 

25 individual under any qualified long-term care insur26 ance contracts (as defined in section 7702B(b)): 
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‘‘If the number of years of The applicable 

continuous coverage is— percentage is—

Less than 1 .................................................................. 60

At least 1 but less than 2 ............................................. 70

At least 2 but less than 3 ............................................. 80

At least 3 but less than 4 ............................................. 90

At least 4 ...................................................................... 100.

1 ‘‘(2) SPECIAL RULES FOR INDIVIDUALS WHO

2 HAVE ATTAINED AGE 55.—In the case of an indi3 vidual who has attained age 55 as of the close of the 

4 taxable year, the following table shall be substituted 

5 for the table in paragraph (1): 

‘‘If the number of years of The applicable 

continuous coverage is— percentage is—

Less than 1 .................................................................. 70

At least 1 but less than 2 ............................................. 85

At least 2 ...................................................................... 100.

6 ‘‘(3) ONLY COVERAGE AFTER 2005 TAKEN INTO

7 ACCOUNT.—Only coverage for periods after Decem8 ber 31, 2005, shall be taken into account under this 

9 subsection. 

10 ‘‘(4) CONTINUOUS COVERAGE.—An individual 

11 shall not fail to be treated as having continuous cov12 erage if the aggregate breaks in coverage during any 

13 1-year period are less than 60 days. 

14 ‘‘(c) COORDINATION WITH OTHER DEDUCTIONS.— 

15 Any amount paid by a taxpayer for any qualified long16 term care insurance contract to which subsection (a) ap17 plies shall not be taken into account in computing the 

18 amount allowable to the taxpayer as a deduction under 

19 section 162(l) or 213(a).’’. 
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1 (b) CONFORMING AMENDMENTS.— 

2 (1) Section 62(a) of the Internal Revenue Code 

3 of 1986 is amended by inserting before the last sen4 tence the following new paragraph: 

5 ‘‘(21) PREMIUMS ON QUALIFIED LONG-TERM

6 CARE INSURANCE CONTRACTS.—The deduction al7 lowed by section 224.’’. 

8 (2) The table of sections for part VII of sub9 chapter B of chapter 1 of such Code is amended by 

10 redesignating the item relating to section 224 as an 

11 item relating to section 225 and by inserting before 

12 such item the following new item: 

‘‘Sec. 224. Premiums on qualified long-term care insurance contracts.’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to taxable years beginning after 

15 December 31, 2005. 

16 SEC. 5. ADDITIONAL CONSUMER PROTECTIONS FOR LONG17 TERM CARE INSURANCE. 

18 (a) ADDITIONAL PROTECTIONS APPLICABLE TO

19 LONG-TERM CARE INSURANCE.—Subparagraphs (A) and 

20 (B) of section 7702B(g)(2) of the Internal Revenue Code 

21 of 1986 (relating to requirements of model regulation and 

22 Act) are amended to read as follows: 

23 ‘‘(A) IN GENERAL.—The requirements of 

24 this paragraph are met with respect to any con25 tract if such contract meets— 
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•S 2244 IS 

1 ‘‘(i) MODEL REGULATION.—The fol2 lowing requirements of the model regula3 tion: 

4 ‘‘(I) Section 6A (relating to guar5 anteed renewal or noncancellability), 

6 other than paragraph (5) thereof, and 

7 the requirements of section 6B of the 

8 model Act relating to such section 6A. 

9 ‘‘(II) Section 6B (relating to pro10 hibitions on limitations and exclu11 sions) other than paragraph (7) there12 of. 

13 ‘‘(III) Section 6C (relating to ex14 tension of benefits). 

15 ‘‘(IV) Section 6D (relating to 

16 continuation or conversion of cov17 erage). 

18 ‘‘(V) Section 6E (relating to dis19 continuance and replacement of poli20 cies). 

21 ‘‘(VI) Section 7 (relating to unin22 tentional lapse). 

23 ‘‘(VII) Section 8 (relating to dis24 closure), other than sections 8F, 8G, 

25 8H, and 8I thereof. 
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1 ‘‘(VIII) Section 11 (relating to 

2 prohibitions against post-claims un3 derwriting). 

4 ‘‘(IX) Section 12 (relating to 

5 minimum standards). 

6 ‘‘(X) Section 13 (relating to re7 quirement to offer inflation protec8 tion). 

9 ‘‘(XI) Section 25 (relating to pro10 hibition against preexisting conditions 

11 and probationary periods in replace12 ment policies or certificates). 

13 ‘‘(XII) The provisions of section 

14 26 relating to contingent nonforfeiture 

15 benefits, if the policyholder declines 

16 the offer of a nonforfeiture provision 

17 described in paragraph (4). 

18 ‘‘(ii) MODEL ACT.—The following re19 quirements of the model Act: 

20 ‘‘(I) Section 6C (relating to pre21 existing conditions). 

22 ‘‘(II) Section 6D (relating to 

23 prior hospitalization). 

24 ‘‘(III) The provisions of section 8 

25 relating to contingent nonforfeiture 
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1 benefits, if the policyholder declines 

2 the offer of a nonforfeiture provision 

3 described in paragraph (4). 

4 ‘‘(B) DEFINITIONS.—For purposes of this 

5 paragraph— 

6 ‘‘(i) MODEL PROVISIONS.—The terms 

7 ‘model regulation’ and ‘model Act’ mean 

8 the long-term care insurance model regula9 tion, and the long-term care insurance 

10 model Act, respectively, promulgated by 

11 the National Association of Insurance 

12 Commissioners (as adopted as of October 

13 2000). 

14 ‘‘(ii) COORDINATION.—Any provision 

15 of the model regulation or model Act listed 

16 under clause (i) or (ii) of subparagraph 

17 (A) shall be treated as including any other 

18 provision of such regulation or Act nec19 essary to implement the provision. 

20 ‘‘(iii) DETERMINATION.—For pur21 poses of this section and section 4980C, 

22 the determination of whether any require23 ment of a model regulation or the model 

24 Act has been met shall be made by the 

25 Secretary.’’. 
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1 (b) EXCISE TAX.—Paragraph (1) of section 

2 4980C(c) of the Internal Revenue Code of 1986 (relating 

3 to requirements of model provisions) is amended to read 

4 as follows: 

5 ‘‘(1) REQUIREMENTS OF MODEL PROVISIONS.— 

6 ‘‘(A) MODEL REGULATION.—The following 

7 requirements of the model regulation must be 

8 met: 

9 ‘‘(i) Section 9 (relating to required 

10 disclosure of rating practices to consumer). 

11 ‘‘(ii) Section 14 (relating to applica12 tion forms and replacement coverage). 

13 ‘‘(iii) Section 15 (relating to reporting 

14 requirements). 

15 ‘‘(iv) Section 22 (relating to filing re16 quirements for marketing). 

17 ‘‘(v) Section 23 (relating to standards 

18 for marketing), including inaccurate com19 pletion of medical histories, other than 

20 paragraphs (1), (6), and (9) of section 

21 23C. 

22 ‘‘(vi) Section 24 (relating to suit23 ability). 

24 ‘‘(vii) Section 29 (relating to standard 

25 format outline of coverage). 
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1 ‘‘(viii) Section 30 (relating to require2 ment to deliver shopper’s guide). 

3 The requirements referred to in clause (vi) shall 

4 not include those portions of the personal work5 sheet described in Appendix B relating to con6 sumer protection requirements not imposed by 

7 section 4980C or 7702B. 

8 ‘‘(B) MODEL ACT.—The following require9 ments of the model Act must be met: 

10 ‘‘(i) Section 6F (relating to right to 

11 return). 

12 ‘‘(ii) Section 6G (relating to outline of 

13 coverage). 

14 ‘‘(iii) Section 6H (relating to require15 ments for certificates under group plans). 

16 ‘‘(iv) Section 6J (relating to policy 

17 summary). 

18 ‘‘(v) Section 6K (relating to monthly 

19 reports on accelerated death benefits). 

20 ‘‘(vi) Section 7 (relating to incontest21 ability period). 

22 ‘‘(C) DEFINITIONS.—For purposes of this 

23 paragraph, the terms ‘model regulation’ and 

24 ‘model Act’ have the meanings given such terms 

25 by section 7702B(g)(2)(B).’’. 
19 

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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to policies issued more than 1 year 

3 after the date of the enactment of this Act. 

Æ