I 

111TH CONGRESS 

1ST SESSION H. R. 2096 

To amend the Internal Revenue Code of 1986 to allow long-term care insurance to be offered under cafeteria plans and flexible spending arrangements and to provide additional consumer protections for long-term care 

insurance. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 23, 2009 

Mr. POMEROY (for himself, Mr. BOUSTANY, Ms. SCHWARTZ, and Ms. GINNY

BROWN-WAITE of Florida) introduced the following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to allow longterm care insurance to be offered under cafeteria plans 

and flexible spending arrangements and to provide additional consumer protections for long-term care insurance. 

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 ‘‘Long-Term Care Af5 fordability and Security Act of 2009’’. 


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1 SEC. 2. TREATMENT OF PREMIUMS ON QUALIFIED LONG2 TERM CARE INSURANCE CONTRACTS. 

3 (a) IN GENERAL.— 

4 (1) CAFETERIA PLANS.—The last sentence of 

5 section 125(f) of the Internal Revenue Code of 1986 

6 (defining qualified benefits) is amended by inserting 

7 before the period at the end ‘‘; except that such term 

8 shall include the payment of premiums for any quali9 fied long-term care insurance contract (as defined in 

10 section 7702B) to the extent the amount of such 

11 payment does not exceed the eligible long-term care 

12 premiums (as defined in section 213(d)(10)) for 

13 such contract’’. 

14 (2) FLEXIBLE SPENDING ARRANGEMENTS.— 

15 Section 106 of such Code (relating to contributions 

16 by an employer to accident and health plans) is 

17 amended by striking subsection (c) and redesig18 nating subsection (d) as subsection (c). 

19 (b) CONFORMING AMENDMENTS.— 

20 (1) Section 6041 of such Code is amended by 

21 adding at the end the following new subsection: 

22 ‘‘(h) FLEXIBLE SPENDING ARRANGEMENT DE23 FINED.—For purposes of this section, a flexible spending 

24 arrangement is a benefit program which provides employ25 ees with coverage under which— 


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1 ‘‘(1) specified incurred expenses may be reim2 bursed (subject to reimbursement maximums and 

3 other reasonable conditions), and 

4 ‘‘(2) the maximum amount of reimbursement 

5 which is reasonably available to a participant for 

6 such coverage is less than 500 percent of the value 

7 of such coverage. 

8 In the case of an insured plan, the maximum amount rea9 sonably available shall be determined on the basis of the 

10 underlying coverage.’’. 

11 (2) The following sections of such Code are 

12 each amended by striking ‘‘section 106(d)’’ and in13 serting ‘‘section 106(c)’’: sections 223(b)(4)(B), 

14 223(d)(4)(C), 223(f)(3)(B), 3231(e)(11), 

15 3306(b)(18), 3401(a)(22), 4973(g)(1), and 

16 4973(g)(2)(B)(i). 

17 (3) Section 6041(f)(1) of such Code is amended 

18 by striking ‘‘(as defined in section 106(c)(2))’’. 

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

20 this section shall apply to taxable years beginning after 

21 December 31, 2008. 

22 SEC. 3. ADDITIONAL CONSUMER PROTECTIONS FOR LONG23 TERM CARE INSURANCE. 

24 (a) ADDITIONAL PROTECTIONS APPLICABLE TO

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


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

2 of 1986 (relating to requirements of model regulation and 

3 Act) are amended to read as follows: 

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

5 this paragraph are met with respect to any con6 tract if such contract meets— 

7 ‘‘(i) MODEL REGULATION.—The fol8 lowing requirements of the model regula9 tion: 

10 ‘‘(I) Section 6A (relating to guar11 anteed renewal or noncancellability), 

12 other than paragraph (5) thereof, and 

13 the requirements of section 6B of the 

14 model Act relating to such section 6A. 

15 ‘‘(II) Section 6B (relating to pro16 hibitions on limitations and exclu17 sions) other than paragraph (7) there18 of. 

19 ‘‘(III) Section 6C (relating to ex20 tension of benefits). 

21 ‘‘(IV) Section 6D (relating to 

22 continuation or conversion of cov23 erage). 


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1 ‘‘(V) Section 6E (relating to dis2 continuance and replacement of poli3 cies). 

4 ‘‘(VI) Section 7 (relating to unin5 tentional lapse). 

6 ‘‘(VII) Section 8 (relating to dis7 closure), other than sections 8F, 8G, 

8 8H, and 8I thereof. 

9 ‘‘(VIII) Section 11 (relating to 

10 prohibitions against post-claims un11 derwriting). 

12 ‘‘(IX) Section 12 (relating to 

13 minimum standards). 

14 ‘‘(X) Section 13 (relating to re15 quirement to offer inflation protec16 tion). 

17 ‘‘(XI) Section 25 (relating to pro18 hibition against preexisting conditions 

19 and probationary periods in replace20 ment policies or certificates). 

21 ‘‘(XII) The provisions of section 

22 28 relating to contingent nonforfeiture 

23 benefits, if the policyholder declines 

24 the offer of a nonforfeiture provision 


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1 described in paragraph (4) of this 

2 subsection. 

3 ‘‘(ii) MODEL ACT.—The following re4 quirements of the model Act: 

5 ‘‘(I) Section 6C (relating to pre6 existing conditions). 

7 ‘‘(II) Section 6D (relating to 

8 prior hospitalization). 

9 ‘‘(III) The provisions of section 8 

10 relating to contingent nonforfeiture 

11 benefits, if the policyholder declines 

12 the offer of a nonforfeiture provision 

13 described in paragraph (4) of this 

14 subsection. 

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

16 paragraph— 

17 ‘‘(i) MODEL REGULATION.—The term 

18 ‘model regulation’ means the long-term 

19 care insurance model regulation promul20 gated by the National Association of Insur21 ance Commissioners (as adopted as of De22 cember 2006). 

23 ‘‘(ii) MODEL ACT.—The term ‘model 

24 Act’ means the long-term care insurance 

25 model Act promulgated by the National 


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1 Association of Insurance Commissioners 

2 (as adopted as of December 2006). 

3 ‘‘(iii) COORDINATION.—Any provision 

4 of the model regulation or model Act listed 

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

6 (A) shall be treated as including any other 

7 provision of such regulation or Act nec8 essary to implement the provision. 

9 ‘‘(iv) DETERMINATION.—For pur10 poses of this section and section 4980C, 

11 the determination of whether any require12 ment of a model regulation or the model 

13 Act has been met shall be made by the 

14 Secretary.’’. 

15 (b) EXCISE TAX.—Paragraph (1) of section 

16 4980C(c) of the Internal Revenue Code of 1986 (relating 

17 to requirements of model provisions) is amended to read 

18 as follows: 

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

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

21 requirements of the model regulation must be 

22 met: 

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

24 disclosure of rating practices to consumer). 


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1 ‘‘(ii) Section 14 (relating to applica2 tion forms and replacement coverage). 

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

4 requirements). 

5 ‘‘(iv) Section 22 (relating to filing re6 quirements for marketing). 

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

8 for marketing), including inaccurate com9 pletion of medical histories, other than 

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

11 23C. 

12 ‘‘(vi) Section 24 (relating to suit13 ability). 

14 ‘‘(vii) Section 27 (relating to the right 

15 to reduce coverage and lower premiums). 

16 ‘‘(viii) Section 31 (relating to stand17 ard format outline of coverage). 

18 ‘‘(ix) Section 32 (relating to require19 ment to deliver shopper’s guide). 

20 The requirements referred to in clause (vi) shall 

21 not include those portions of the personal work22 sheet described in Appendix B relating to con23 sumer protection requirements not imposed by 

24 section 4980C or 7702B. 


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1 ‘‘(B) MODEL ACT.—The following require2 ments of the model Act must be met: 

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

4 return). 

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

6 coverage). 

7 ‘‘(iii) Section 6H (relating to require8 ments for certificates under group plans). 

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

10 summary). 

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

12 reports on accelerated death benefits). 

13 ‘‘(vi) Section 7 (relating to incontest14 ability period). 

15 ‘‘(vii) Section 9 (relating to producer 

16 training requirements). 

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

18 paragraph, the terms ‘model regulation’ and 

19 ‘model Act’ have the meanings given such terms 

20 by section 7702B(g)(2)(B).’’. 

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

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

23 after the date of the enactment of this Act. 

Æ 


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