I

106TH CONGRESS

1ST SESSION H. R. 1111

To amend title 5, United States Code, to provide for the establishment

of a program under which long-term care insurance is made available

to Federal employees and annuitants, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 16, 1999

Mrs. MORELLA introduced the following bill; which was referred to the Committee on Government Reform, and in addition to the Committee on

Armed Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend title 5, United States Code, to provide for the

establishment of a program under which long-term care

insurance is made available to Federal employees and

annuitants, and for other purposes.

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 ‘‘Federal Civilian and

5 Uniformed Services Long-Term Care Insurance Act of

6 1999’’.
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1 SEC. 2. LONG-TERM CARE INSURANCE.

2 Subpart G of part III of title 5, United States Code,

3 is amended by adding at the end the following:

4 ‘‘Chapter 90—Long-Term Care Insurance

‘‘Sec.

‘‘9001. Definitions.

‘‘9002. Eligibility to obtain coverage.

‘‘9003. Contracting authority.

‘‘9004. Long-term care benefits.

‘‘9005. Financing.

‘‘9006. Regulations.

5 ‘‘§ 9001. Definitions

6 ‘‘For purposes of this chapter:

7 ‘‘(1) EMPLOYEE.—The term ‘employee’

8 means—

9 ‘‘(A) an employee as defined by section

10 8901(1)(A)–(H); and

11 ‘‘(B) an individual described in section

12 2105(e).

13 ‘‘(2) ANNUITANT.—The term ‘annuitant’ has

14 the meaning such term would have under paragraph

15 (3) of section 8901 if, for purposes of such para16 graph, the term ‘employee’ were considered to have

17 the meaning given to it under paragraph (1) of this

18 subsection.

19 ‘‘(3) QUALIFIED RELATIVE.—The term ‘quali20 fied relative’, as used with respect to a sponsoring

21 individual, means—
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1 ‘‘(A) the spouse of such sponsoring indi2 vidual;

3 ‘‘(B) a parent or parent-in-law of such

4 sponsoring individual; and

5 ‘‘(C) any other person bearing a relation6 ship to such sponsoring individual specified by

7 the Office in regulations.

8 ‘‘(4) SPONSORING INDIVIDUAL.—The term

9 ‘sponsoring individual’ refers to an individual de10 scribed in paragraph (1), (2), (3), or (4) of section

11 9002(b).

12 ‘‘(5) CARRIER.—The term ‘carrier’ means a vol13 untary association, corporation, partnership, or

14 other nongovernmental organization which is law15 fully engaged in providing, paying for, or reimburs16 ing the cost of, qualified long-term care services

17 under group insurance policies or contracts, or simi18 lar group arrangements, in consideration of pre19 miums or other periodic charges payable to the car20 rier.

21 ‘‘(6) QUALIFIED LONG-TERM CARE SERVICES.—

22 The term ‘qualified long-term care services’ has the

23 meaning given such term by section 7702B of the

24 Internal Revenue Code of 1986.
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1 ‘‘(7) OFFICE.—The term ‘Office’ means the Of2 fice of Personnel Management.

3 ‘‘(8) APPROPRIATE SECRETARY.—The term ‘ap4 propriate Secretary’ means—

5 ‘‘(A) except as otherwise provided in this

6 paragraph, the Secretary of Defense;

7 ‘‘(B) with respect to the Coast Guard when

8 it is not operating as a service of the Navy, the

9 Secretary of Transportation;

10 ‘‘(C) with respect to the commissioned

11 corps of the National Oceanic and Atmospheric

12 Administration, the Secretary of Commerce;

13 and

14 ‘‘(D) with respect to the commissioned

15 corps of the Public Health Service, the Sec16 retary of Health and Human Services.

17 ‘‘§ 9002. Eligibility to obtain coverage

18 ‘‘(a) IN GENERAL.—Any eligible individual may ob19 tain long-term care insurance coverage under this chapter

20 for himself or herself, in accordance with applicable provi21 sions of this chapter.

22 ‘‘(b) ELIGIBLE INDIVIDUAL DEFINED.—For pur23 poses of this section, the term ‘eligible individual’ means

24 each of the following:
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1 ‘‘(1) EMPLOYEE.—An employee who has com2 pleted 6 months of continuous service as an em3 ployee under other than a temporary appointment

4 limited to 6 months or less.

5 ‘‘(2) ANNUITANT.—An annuitant.

6 ‘‘(3) MEMBER OF THE UNIFORMED SERV7 ICES.—A member of the uniformed services on ac8 tive duty for a period of more than 30 days or full9 time National Guard duty (as defined in section

10 101(d)(5) of title 10) who satisfies such eligibility

11 requirements as the Office prescribes under section

12 9006(c).

13 ‘‘(4) RETIRED MEMBER OF THE UNIFORMED

14 SERVICES.—A member of the uniformed services en15 titled to retired or retainer pay (other than under

16 chapter 1223 of title 10) who satisfies such eligi17 bility requirements as the Office prescribes under

18 section 9006(c).

19 ‘‘(5) QUALIFIED RELATIVE.—A qualified rel20 ative of a sponsoring individual.

21 ‘‘(c) CERTIFICATION REQUIREMENT.—As a condition

22 for obtaining long-term care insurance coverage under this

23 chapter based on one’s status as a qualified relative, cer24 tification from the applicant’s sponsoring individual shall

25 be required as to—
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1 ‘‘(1) such sponsoring individual’s status, as de2 scribed in paragraph (1), (2), (3), or (4) of sub3 section (b) (as applicable), as of the time of the

4 qualified relative’s application for coverage; and

5 ‘‘(2) the existence of the claimed relationship as

6 of that time.

7 Any such certification shall be submitted at such time and

8 in such form and manner as the Office shall by regulation

9 prescribe.

10 ‘‘(d) DISQUALIFYING CONDITION.—Nothing in this

11 chapter shall be considered to require that long-term care

12 insurance coverage be made available in the case of any

13 individual who would be immediately benefit eligible.

14 ‘‘§ 9003. Contracting authority

15 ‘‘(a) IN GENERAL.—The Office may, without regard

16 to section 3709 of the Revised Statutes or other statute

17 requiring competitive bidding, contract with qualified car18 riers to provide group long-term care insurance under this

19 chapter, except that the Office may not have contracts in

20 effect under this section with more than 3 qualified car21 riers as of any given time.

22 ‘‘(b) QUALIFIED CARRIERS.—To be considered a

23 qualified carrier under this chapter, a company must be

24 licensed to issue group long-term care insurance in all the

25 States and the District of Columbia.
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1 ‘‘(c) TERMS AND CONDITIONS.—

2 ‘‘(1) IN GENERAL.—Each contract under this

3 section shall contain a detailed statement of the ben4 efits offered (including any maximums, limitations,

5 exclusions, and other definitions of benefits), the

6 rates charged (including any limitations or other

7 conditions on their subsequent adjustment), and

8 such other terms and conditions as may be mutually

9 agreed to by the Office and the carrier involved, con10 sistent with the requirements of this chapter.

11 ‘‘(2) RATES.—The rates charged under any

12 contract under this section shall reasonably reflect

13 the cost of the benefits provided under such con14 tract.

15 ‘‘(d) NONCANCELABILITY.—The benefits and cov16 erage made available to individuals under any contract

17 under this section shall be guaranteed to be renewable and

18 may not be canceled by the carrier except for nonpayment

19 of charges.

20 ‘‘(e) PAYMENT OF REQUIRED BENEFITS; DISPUTE

21 RESOLUTION.—Each contract under this section shall re22 quire the carrier to agree—

23 ‘‘(1) to pay or provide benefits in an individual

24 case if the Office (or a duly designated third-party
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1 administrator) finds that the individual involved is

2 entitled thereto under the terms of the contract; and

3 ‘‘(2) to participate in administrative procedures

4 designed to bring about the expeditious resolution of

5 disputes arising under such contract, including, in

6 appropriate circumstances, one or more alternative

7 means of dispute resolution.

8 ‘‘(f) DURATION.—

9 ‘‘(1) IN GENERAL.—Each contract under this

10 section shall be for a term of 5 years, but may be

11 made automatically renewable from term to term in

12 the absence of notice of termination by either party.

13 However, the rights and responsibilities of the en14 rolled individual, the insurer, and the Office (or duly

15 designated third-party administrator) under any

16 such contract shall continue until the termination of

17 coverage of the enrolled individual.

18 ‘‘(2) TERMINATION OF INDIVIDUAL COV19 ERAGE.—Group long-term care insurance coverage

20 obtained by an individual under this chapter shall

21 terminate only upon the occurrence of any of the fol22 lowing:

23 ‘‘(A) DEATH.—The death of the insured.
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1 ‘‘(B) EXHAUSTION OF BENEFITS.—Ex2 haustion of benefits, as determined under the

3 contract.

4 ‘‘(C) INSOLVENCY.—Insolvency of the in5 surer, as determined under the contract.

6 ‘‘(D) CANCELLATION.—Any event justi7 fying a cancellation under subsection (d).

8 ‘‘(3) PRESERVATION OF RIGHTS AND RESPON9 SIBILITIES.—Each contract under this section shall

10 include such provisions as may be necessary so as,

11 except as provided in paragraph (2)—

12 ‘‘(A) to effectively preserve all parties’

13 rights and responsibilities under such contract

14 notwithstanding the termination of such con15 tract (whether due to its nonrenewal under the

16 first sentence of paragraph (1) or otherwise);

17 and

18 ‘‘(B) to ensure that, once an individual be19 comes duly enrolled, long-term care insurance

20 coverage obtained by such individual pursuant

21 to that enrollment shall not be terminated due

22 to any change in status (as described in section

23 9002(b)), such as separation from Government

24 service or the uniformed services, or ceasing to

25 meet the requirements for being considered a
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1 qualified relative (whether due to divorce or

2 otherwise).

3 ‘‘§ 9004. Long-term care benefits

4 ‘‘(a) IN GENERAL.—Benefits under this chapter shall

5 be provided under qualified long-term care insurance con6 tracts, within the meaning of section 7702B of the Inter7 nal Revenue Code of 1986.

8 ‘‘(b) SPECIFIC MATTERS TO BE INCLUDED IN ALL

9 CONTRACTS.—Each contract under section 9003 shall, in

10 addition to any matter otherwise required under this chap11 ter, provide for the following:

12 ‘‘(1) Adequate consumer protections (including

13 through establishment of sufficient reserves or rein14 surance).

15 ‘‘(2) Adequate protections in the event of car16 rier bankruptcy (or other similar event).

17 ‘‘(3) Availability of benefits upon appropriate

18 certification as to an individual’s—

19 ‘‘(A) inability (without substantial assist20 ance from another individual) to perform at

21 least 2 activities of daily living for a period of

22 at least 90 days due to a loss of functional ca23 pacity;

24 ‘‘(B) having a level of disability similar (as

25 determined under regulations prescribed by the
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1 Secretary of the Treasury in consultation with

2 the Secretary of Health and Human Services)

3 to the level of disability described in subpara4 graph (A); or

5 ‘‘(C) requiring substantial supervision to

6 protect such individual from threats to health

7 and safety due to severe cognitive impairment.

8 ‘‘(4) Choice of cash or service benefits (such as

9 the expense-incurred method or the indemnity meth10 od).

11 ‘‘(5) Inflation protection (whether through sim12 ple or compounded adjustment of benefits).

13 ‘‘(6) Portability of benefits (consistent with

14 subsections (d) and (f) of section 9003).

15 ‘‘(c) ADDITIONAL SPECIFIC MATTERS TO BE IN16 CLUDED IN AT LEAST ONE CONTRACT.—To the maximum

17 extent practicable, as of any given time, at least 1 of the

18 policies being offered under this chapter shall, in addition

19 to any matter otherwise required under this chapter, pro20 vide for the following:

21 ‘‘(1) Length-of-benefit options.

22 ‘‘(2) Options relating to the provision of cov23 erage in a variety of settings, including nursing

24 homes, assisted living facilities, and home and com25 munity care.
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1 ‘‘(3) Options relating to elimination periods.

2 ‘‘(4) Options relating to nonforfeiture benefits.

3 ‘‘(5) Availability of benefits upon appropriate

4 certification of medical necessity (as defined by the

5 Office in consultation with the Secretary of Health

6 and Human Services) not satisfying the require7 ments of subsection (b)(3).

8 ‘‘(d) GOVERNMENTWIDE PLAN.—

9 ‘‘(1) IN GENERAL.—The Office shall take all

10 practicable measures to ensure that, of the long11 term care benefits plans available under this chapter

12 as of any given time, at least one of them shall be

13 a Governmentwide long-term care benefits plan.

14 ‘‘(2) DEFINITION.—For purposes of this sub15 section, the term ‘long-term care benefits plan’

16 means a group insurance policy or contract, or simi17 lar group arrangement, provided by a carrier for the

18 purpose of providing, paying for, or reimbursing ex19 penses for qualified long-term care services.

20 ‘‘(3) CLARIFICATION.—Neither subsection

21 (c)(5) nor the exception set forth in the parenthet22 ical matter under subsection (e) shall apply with re23 spect to any Governmentwide plan under this sub24 section.
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1 ‘‘(e) COORDINATION WITH INTERNAL REVENUE

2 CODE OF 1986.—Nothing in this chapter shall be consid3 ered to permit or require the inclusion, in any contract,

4 of provisions inconsistent with section 7702B or any other

5 provision of the Internal Revenue Code of 1986 (except

6 to the extent necessary to carry out subsection (c)(5)).

7 ‘‘(f) COORDINATION WITH STATE REQUIREMENTS.—

8 If a State (or the District of Columbia) imposes any re9 quirement which is more stringent than the analogous re10 quirement imposed by subsection (b)(1), the requirement

11 imposed by subsection (b)(1) shall be treated as met if

12 the more stringent requirement of the State (or the Dis13 trict of Columbia) is met.

14 ‘‘(g) DEFINITIONS.—For purposes of this section:

15 ‘‘(1) ACTIVITIES OF DAILY LIVING.—Each of

16 the following is an activity of daily living:

17 ‘‘(A) Eating.

18 ‘‘(B) Toileting.

19 ‘‘(C) Transferring.

20 ‘‘(D) Bathing.

21 ‘‘(E) Dressing.

22 ‘‘(F) Continence.

23 ‘‘(2) NURSING HOME.—The term ‘nursing

24 home’ has the meaning given such term by section

25 1908 of the Social Security Act.
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1 ‘‘(3) ASSISTED LIVING FACILITY.—The term

2 ‘assisted living facility’ has the meaning given such

3 term by section 232 of the National Housing Act.

4 ‘‘(4) HOME AND COMMUNITY CARE.—The term

5 ‘home and community care’ has the meaning given

6 such term by section 1929 of the Social Security

7 Act.

8 ‘‘§ 9005. Financing

9 ‘‘(a) NO GOVERNMENT CONTRIBUTION.—Except as

10 provided in subsection (b)(2), each individual having long11 term care insurance coverage under this chapter shall be

12 responsible for 100 percent of the charges for such cov13 erage.

14 ‘‘(b) WITHHOLDINGS.—

15 ‘‘(1) IN GENERAL.—The amount necessary to

16 pay the charges for enrollment shall—

17 ‘‘(A) in the case of an employee, be with18 held from the pay of such employee;

19 ‘‘(B) in the case of an annuitant, be with20 held from the annuity of such annuitant;

21 ‘‘(C) in the case of a member of the uni22 formed services described in section 9002(b)(3),

23 be withheld from the basic pay of such member;

24 and
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1 ‘‘(D) in the case of a member of the uni2 formed services described in section 9002(b)(4),

3 be withheld from the retired pay or retainer pay

4 payable to such member.

5 ‘‘(2) VOLUNTARY WITHHOLDINGS FOR QUALI6 FIED RELATIVES.—Withholdings to pay the charges

7 for enrollment of a qualified relative may, upon elec8 tion of the sponsoring individual involved, be with9 held under paragraph (1) in the same manner as if

10 enrollment were for such sponsoring individual.

11 ‘‘(3) DIRECT PAYMENTS.—All amounts with12 held under paragraph (1) or (2) shall be paid di13 rectly to the carrier.

14 ‘‘(c) OTHER FORMS OF PAYMENT.—Any enrollee

15 whose pay, annuity, or retired or retainer pay (as referred

16 to in subsection (b)(1)) is insufficient to cover the with17 holding required for enrollment (or who is not receiving

18 any regular amounts from the Government, as referred to

19 in subsection (b)(1), from which any such withholdings

20 may be made) shall pay an amount equal to the shortfall

21 (or, in the case of an enrollee not receiving any regular

22 amounts, the full amount of those charges) directly to the

23 carrier.

24 ‘‘(d) SEPARATE FUND REQUIREMENT.—Each carrier

25 participating under this chapter shall maintain all
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1 amounts received under this chapter separate and apart

2 from all other funds.

3 ‘‘(e) REIMBURSEMENTS.—Contracts under this chap4 ter shall include appropriate provisions under which each

5 carrier shall reimburse the Office or other administering

6 entity for the administrative costs incurred by such entity

7 under this chapter (such as for dispute resolution) which

8 are allocable to such carrier.

9 ‘‘§ 9006. Regulations

10 ‘‘(a) IN GENERAL.—The Office shall prescribe regu11 lations necessary to carry out this chapter.

12 ‘‘(b) ENROLLMENT.—The regulations of the Office

13 shall prescribe the time at which and the manner and con14 ditions under which an individual may obtain long-term

15 care insurance under this chapter, except that, under the

16 regulations, an open enrollment period shall be afforded

17 at least once each year (similar to that afforded under sec18 tion 8905(f)).

19 ‘‘(c) CONSULTATION.—Any regulations necessary to

20 effect the application and operation of this chapter with

21 respect to an eligible individual described in paragraph (3)

22 or (4) of section 9002(b), or a qualified relative thereof,

23 shall be prescribed by the Office in consultation with the

24 appropriate Secretary.’’.
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1 SEC. 3. EFFECTIVE DATE.

2 The amendments made by this Act shall take effect

3 on the date of enactment of this Act, except that no cov4 erage may become effective before the first calendar year

5 beginning after the expiration of the 18-month period be6 ginning on the date of enactment of this Act.

Æ