II 

109TH CONGRESS 

1ST SESSION S. 1951 

To amend the Public Health Service Act to help individuals with functional 

impairments and their families pay for services and supports that they 

need to maximize their functionality and independence and have choices 

about community participation, education, and employment, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 2, 2005 

Mr. KENNEDY (for himself and Mr. DEWINE) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Public Health Service Act to help individuals 

with functional impairments and their families pay for 

services and supports that they need to maximize their 

functionality and independence and have choices about 

community participation, education, and employment, 

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 ‘‘Community Living As5 sistance Services and Supports Act’’ or the ‘‘CLASS Act’’. 
2 

•S 1951 IS

1 SEC. 2. PURPOSES. 

2 The purposes of this Act are as follows: 

3 (1) To provide individuals with functional limi4 tations with tools that will allow them to maintain 

5 their independence and live in the community 

6 through a new financing strategy for community liv7 ing assistance services and supports. 

8 (2) To establish an infrastructure that will help 

9 address America’s community living assistance serv10 ices and supports needs. 

11 (3) To alleviate burdens on family caregivers. 

12 SEC. 3. TABLE OF CONTENTS. 

13 The table of contents for this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Findings and Purposes. 

Sec. 3. Table of contents. 

TITLE I—COMMUNITY LIVING ASSISTANCE SERVICES AND 

SUPPORTS 

Sec. 101. Establishment of national voluntary insurance program for purchasing community living assistance services and support. 

TITLE II—AMENDMENTS TO THE INTERNAL REVENUE CODE OF 

1986 

Sec. 201. Above-the-line deduction for premium costs. 

Sec. 202. Credit for premium costs of low-income class enrollees. 

Sec. 203. Credit for costs of employers who elect to automatically enroll employees and withhold class premiums from wages. 

Sec. 204. Long-term care insurance includible in cafeteria plans. 

TITLE III—EFFECTIVE DATE 

Sec. 301. Effective date. 
3 

•S 1951 IS

1 TITLE I—COMMUNITY LIVING 

2 ASSISTANCE SERVICES AND 

3 SUPPORTS 

4 SEC. 101. ESTABLISHMENT OF NATIONAL VOLUNTARY IN5 SURANCE PROGRAM FOR PURCHASING COM6 MUNITY LIVING ASSISTANCE SERVICES AND 

7 SUPPORT. 

8 (a) ESTABLISHMENT OF PROGRAM.— 

9 (1) IN GENERAL.—The Public Health Service 

10 Act (42 U.S.C. 201 et seq.) is amended by adding 

11 at the end the following: 

12 ‘‘TITLE XXIX—COMMUNITY LIV13 ING ASSISTANCE SERVICES 

14 AND SUPPORTS 

15 ‘‘SEC. 2901. DEFINITIONS. 

16 ‘‘In this title: 

17 ‘‘(1) ACTIVE ENROLLEE.—The term ‘active en18 rollee’ means an individual who is enrolled in the 

19 CLASS program in accordance with section 2902 

20 and who has paid any premiums due to maintain 

21 such enrollment in accordance with section 2903. 

22 ‘‘(2) ACTIVELY AT WORK.—The term ‘actively 

23 at work’ means an individual who— 

24 ‘‘(A) is reporting for work at the individ25 ual’s usual place of employment or at another 
4 

•S 1951 IS

1 location to which the individual’s employer re2 quires the individual to travel (or in the case of 

3 an individual who is a member of the uniformed 

4 services, is on active duty and is physically able 

5 to perform the duties of the individual’s posi6 tion); 

7 ‘‘(B) is able to perform all the usual and 

8 customary duties of the individual’s employment 

9 on the individual’s regular work schedule; and 

10 ‘‘(C) is not absent from work due to sick11 ness, injury, annual leave, sick leave or any 

12 other leave. 

13 ‘‘(3) ACTIVITIES OF DAILY LIVING.—The term 

14 ‘activities of daily living’ means each of the following 

15 activities specified in section 7702B(c)(2)(B) of the 

16 Internal Revenue Code of 1986: 

17 ‘‘(A) Eating. 

18 ‘‘(B) Toileting. 

19 ‘‘(C) Transferring. 

20 ‘‘(D) Bathing. 

21 ‘‘(E) Dressing. 

22 ‘‘(F) Continence. 

23 ‘‘(4) CLASS PROGRAM.—The term ‘CLASS 

24 program’ means the program established under this 

25 title. 
5 

•S 1951 IS

1 ‘‘(5) DISABILITY DETERMINATION SERVICE.— 

2 The term ‘Disability Determination Service’ means, 

3 with respect to each State, the entity that has an 

4 agreement with the Commissioner of Social Security 

5 to make disability determinations for purposes of 

6 title II or XVI of the Social Security Act (42 U.S.C. 

7 401 et seq., 1381 et seq.). 

8 ‘‘(6) ELIGIBLE TIER I BENEFICIARY.—The 

9 term ‘eligible tier I beneficiary’ means any individual 

10 who— 

11 ‘‘(A) is an active enrollee in the CLASS 

12 program; and 

13 ‘‘(B) as of the date the individual is deter14 mined to be unable to perform at least 2 activi15 ties of daily living or to require supervision, 

16 cueing, or hands-on assistance to plan or per17 form at least 2 such activities— 

18 ‘‘(i) has paid premiums for enrollment 

19 in such program for at least 60 months; 

20 and 

21 ‘‘(ii) except as provided in section 

22 2903(e)(2), has paid premiums for enroll23 ment in such program for at least 12 con24 secutive months if a lapse in premium pay25 ments of more than 3 months has occurred 
6 

•S 1951 IS

1 during the period that begins on the date 

2 of the individual’s enrollment and ends on 

3 the date of such determination. 

4 ‘‘(7) ELIGIBLE TIER II BENEFICIARY.—The 

5 term ‘eligible tier II beneficiary’ means any indi6 vidual who is an eligible tier I beneficiary who has 

7 been determined to be unable to perform at least 4 

8 activities of daily living or to require supervision, 

9 cueing, or hands-on assistance to plan or perform at 

10 least 4 such activities. 

11 ‘‘(8) HOSPITAL; NURSING FACILITY; INTER12 MEDIATE CARE FACILITY FOR THE MENTALLY RE13 TARDED; INSTITUTION FOR MENTAL DISEASES.— 

14 The terms ‘hospital’, ‘nursing facility’, ‘intermediate 

15 care facility for the mentally retarded’, and ‘institu16 tion for mental diseases’ have the meanings given 

17 such terms for purposes of Medicaid. 

18 ‘‘(9) INDEPENDENCE FUND.—The term ‘Inde19 pendence Fund’ or ‘Fund’ means the fund estab20 lished under section 2905. 

21 ‘‘(10) MEDICAID.—The term ‘Medicaid’ means 

22 the program established under title XIX of the So23 cial Security Act (42 U.S.C. 1396 et seq.). 

24 ‘‘(11) POVERTY LINE.—The term ‘poverty line’ 

25 has the meaning given that term in section 
7 

•S 1951 IS

1 2110(c)(5) of the Social Security Act (42 U.S.C. 

2 1397jj(c)(5)). 

3 ‘‘(12) PROTECTION AND ADVOCACY SYSTEM.— 

4 The term ‘Protection and Advocacy System’ means 

5 the system for each State established under section 

6 143 of the Developmental Disabilities Assistance 

7 and Bill of Rights Act of 2000 (42 U.S.C. 15043). 

8 ‘‘SEC. 2902. AUTOMATIC ENROLLMENT WITH OPT-OUT 

9 ELECTION. 

10 ‘‘(a) AUTOMATIC ENROLLMENT.— 

11 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

12 the Secretary shall establish procedures under which 

13 each individual described in subsection (c) shall be 

14 automatically enrolled in the CLASS program by an 

15 employer of such individual in the same manner as 

16 an employer may elect to automatically enroll em17 ployees in a plan under section 401(k), 403(b), or 

18 457 of the Internal Revenue Code of 1986. 

19 ‘‘(2) ALTERNATIVE ENROLLMENT PROCE20 DURES.—The procedures established under para21 graph (1) shall provide for an alternative enrollment 

22 process for an individual described in subsection (c) 

23 in the case of such an individual— 

24 ‘‘(A) who is self-employed; 

25 ‘‘(B) who has more than 1 employer; 
8 

•S 1951 IS

1 ‘‘(C) whose employer does not elect to par2 ticipate in the automatic enrollment process es3 tablished by the Secretary; or 

4 ‘‘(D) who is a spouse described in para5 graph (2) of such subsection who is not subject 

6 to automatic enrollment. 

7 ‘‘(3) ADMINISTRATION.— 

8 ‘‘(A) IN GENERAL.—The Secretary shall, 

9 by regulation, establish procedures to— 

10 ‘‘(i) ensure that an individual is not 

11 automatically enrolled in the CLASS pro12 gram by more than 1 employer; and 

13 ‘‘(ii) allow for an individual’s em14 ployer to deduct a premium for a spouse 

15 described in subsection (c)(1)(B) who is 

16 not subject to automatic enrollment. 

17 ‘‘(B) FORM.—Enrollment in the CLASS 

18 program shall be made in such manner as the 

19 Secretary may prescribe in order to ensure ease 

20 of administration. 

21 ‘‘(b) ELECTION TO OPT-OUT.—An individual de22 scribed in subsection (c) may elect to waive enrollment 

23 under the CLASS program at any time in such form and 

24 manner as the Secretary shall prescribe. 
9 

•S 1951 IS

1 ‘‘(c) INDIVIDUAL DESCRIBED.—For purposes of en2 rolling in the CLASS program, an individual described in 

3 this subsection is— 

4 ‘‘(1) an individual— 

5 ‘‘(A) who has attained age 18; 

6 ‘‘(B) who— 

7 ‘‘(i) receives wages on which there is 

8 imposed a tax under section 3101(a) of the 

9 Internal Revenue Code of 1986; or 

10 ‘‘(ii) derives self-employment income 

11 on which there is imposed a tax under sec12 tion 1401(a) of the Internal Revenue Code 

13 of 1986; 

14 ‘‘(C) who is actively at work; and 

15 ‘‘(D) who is not— 

16 ‘‘(i) a patient in a hospital or nursing 

17 facility, an intermediate care facility for 

18 the mentally retarded, or an institution for 

19 mental diseases and receiving medical as20 sistance under Medicaid; or 

21 ‘‘(ii) confined in a jail, prison, other 

22 penal institution or correctional facility, or 

23 by court order pursuant to conviction of a 

24 criminal offense or in connection with a 

25 verdict or finding described in section 
10 

•S 1951 IS

1 202(x)(1)(A)(ii) of the Social Security Act 

2 (42 U.S.C. 402(x)(1)(A)(ii)); or 

3 ‘‘(2) the spouse of an individual described in 

4 paragraph (1) and who would be an individual so de5 scribed but for subparagraph (B) or (C) of that 

6 paragraph. 

7 ‘‘(d) RULE OF CONSTRUCTION.—Nothing in this title 

8 shall be construed as requiring an active enrollee to con9 tinue to satisfy subparagraph (B) or (C) of subsection 

10 (c)(1) in order to maintain enrollment in the CLASS pro11 gram. 

12 ‘‘SEC. 2903. PREMIUMS. 

13 ‘‘(a) MONTHLY PREMIUMS.—Except as provided in 

14 subsection (e), each individual who is enrolled in the 

15 CLASS program shall pay the Secretary a monthly pre16 mium to maintain enrollment in the program. 

17 ‘‘(b) AMOUNT OF PREMIUM.— 

18 ‘‘(1) $30 MONTHLY PREMIUM FOR ENROLL19 MENT IN THE FIRST YEAR OF THE PROGRAM.—Sub20 ject to the succeeding provisions of this subsection, 

21 the monthly premium for enrollment in the CLASS 

22 program of any individual who enrolls during the 

23 first year in which the program is in effect under 

24 this title shall be $30 for every such enrollee, re25 gardless of their age at enrollment. 
11 

•S 1951 IS

1 ‘‘(2) INFLATION ADJUSTED PREMIUM FOR EN2 ROLLMENT IN FIRST YEAR IN WHICH AN INDIVIDUAL

3 IS ELIGIBLE TO ENROLL AFTER FIRST YEAR OF THE

4 PROGRAM.—The monthly premium for enrollment in 

5 the CLASS program of any individual who enrolls 

6 during the first year in which the individual is eligi7 ble to enroll in the program but that occurs after the 

8 first year in which the program is in effect under 

9 this title, shall be $30, increased with respect to 

10 each year that the program is in effect under this 

11 title until the year of such enrollment, by the per12 centage increase in the consumer price index for all 

13 urban consumers (U.S. city average) over each such 

14 preceding year. 

15 ‘‘(3) AGE-ADJUSTED PREMIUMS FOR ENROLL16 MENT IN OTHER YEARS.— 

17 ‘‘(A) IN GENERAL.—The Secretary shall 

18 determine for each year that is not a year de19 scribed in paragraph (1) or (2), an annual 

20 monthly premium for enrollment in the CLASS 

21 program of an individual during the year that 

22 adjusts the monthly premium that would apply 

23 to the individual under paragraph (2) if the in24 dividual had enrolled during the first year in 
12 

•S 1951 IS

1 which the individual was eligible to enroll in the 

2 program based on the following: 

3 ‘‘(i) AGE AT ENROLLMENT.—Subject 

4 to paragraph (4), the age of an individual 

5 upon the individual’s initial enrollment in 

6 the program. 

7 ‘‘(ii) ADMINISTRATIVE EXPENSES.— 

8 The administrative expenses for the pro9 gram. 

10 ‘‘(B) LIMITATION ON ADMINISTRATIVE EX11 PENSES.— 

12 ‘‘(i) START-UP ADMINISTRATIVE EX13 PENSES.—The total amount of annual ex14 penditures incurred for administering the 

15 CLASS program during each of the first 5 

16 years in which the program is in effect 

17 under this title shall not exceed the sum of 

18 an amount equal to 3 percent of all pre19 miums paid during that year. 

20 ‘‘(ii) SUBSEQUENT ADMINISTRATIVE

21 EXPENSES.—With respect to any year 

22 after the first 5 years in which the CLASS 

23 program is in effect under this title, the 

24 total amount of annual expenditures in25 curred for administering the CLASS pro-
13 

•S 1951 IS

1 gram shall not exceed the lesser of an 

2 amount equal to— 

3 ‘‘(I) 5 percent of the total 

4 amount of all expenditures (including 

5 benefits paid) under this title with re6 spect to that year; or 

7 ‘‘(II) the percentage of expendi8 tures incurred under the medicare 

9 program under title XVIII of the So10 cial Security Act (42 U.S.C. 1395 et 

11 seq.) for that year that is attributable 

12 to administering that program. 

13 ‘‘(4) NOMINAL PREMIUM FOR INDIVIDUAL’S

14 WITH INCOME THAT DOES NOT EXCEED 150 PER15 CENT OF THE POVERTY LINE.— 

16 ‘‘(A) IN GENERAL.—In the case of an indi17 vidual whose income does not exceed 150 per18 cent of the poverty line, the monthly premium 

19 for enrollment in the CLASS program shall be 

20 the applicable amount under subparagraph (B). 

21 ‘‘(B) APPLICABLE AMOUNT.—The Sec22 retary shall establish premium amounts which 

23 shall apply to an individual described in sub24 paragraph (A) in lieu of the premium amount 

25 which would otherwise apply to the individual 
14 

•S 1951 IS

1 under paragraph (1), (2), or (3) (whichever is 

2 applicable). Such amounts shall be nominal 

3 and, in the case of an individual who, but for 

4 this paragraph, would be subject to the pre5 mium imposed under paragraph (3), may be ad6 justed in accordance with the factors described 

7 in that paragraph. 

8 ‘‘(C) SELF-ATTESTATION AND

9 VERIFICATION OF INCOME.—The Secretary 

10 shall establish procedures to— 

11 ‘‘(i) permit an individual, as part of 

12 their automatic enrollment in the CLASS 

13 program, to self-attest that their income 

14 does not exceed 150 percent of the poverty 

15 line; and 

16 ‘‘(ii) verify the validity of such self-at17 testation. 

18 ‘‘(5) ADJUSTMENT OF PREMIUMS.— 

19 ‘‘(A) IN GENERAL.—Except as provided in 

20 subparagraphs (C) and (D), the amount of the 

21 monthly premium determined for an individual 

22 upon such individual’s enrollment in the 

23 CLASS program shall remain the same for as 

24 long as the individual is an active enrollee in 

25 the program. 
15 

•S 1951 IS

1 ‘‘(B) PROGRAM SOLVENCY PROJEC2 TIONS.—Beginning with 2010 and every year 

3 thereafter, the Secretary shall determine with 

4 respect to the 20-year period that begins with 

5 that year, the amount of funds held (or pro6 jected to be held) in the Independence Fund es7 tablished under section 2905 that are required 

8 to pay tier I and tier II benefits under section 

9 2904 during each year of that period. 

10 ‘‘(C) RECALCULATED PREMIUM IF RE11 QUIRED FOR PROGRAM SOLVENCY.— 

12 ‘‘(i) IN GENERAL.—Subject to clauses 

13 (ii) and (iii), beginning with 2015 and 

14 every year thereafter, if the Secretary de15 termines as a result of making the pro16 gram solvency projections required under 

17 subparagraph (B) that, with respect to the 

18 20-year period that begins with that year, 

19 more than 40 percent of the amount of 

20 funds held (or projected to be held) in the 

21 Independence Fund established under sec22 tion 2905 are required to pay tier I and 

23 tier II benefits under section 2904 during 

24 each year of that period, the Secretary 
16 

•S 1951 IS

1 shall adjust the monthly premiums for in2 dividuals enrolled in the CLASS program. 

3 ‘‘(ii) REQUIREMENTS.—In adjusting 

4 monthly premiums under clause (i), the 

5 Secretary shall increase the premiums by 

6 such an amount as will ensure that— 

7 ‘‘(I) the aggregate amount of 

8 such premiums collected will result in 

9 not more than 20 percent of the 

10 amounts held in the Independence 

11 Fund being required to pay tier I and 

12 tier II benefits for any one year occur13 ring during the applicable 20-year pe14 riod; 

15 ‘‘(II) with respect to any indi16 vidual enrolled in the program— 

17 ‘‘(aa) the amount of the in18 crease in the individual’s monthly 

19 premium does not exceed the 

20 amount equal to 50 percent of 

21 the premium prior to such in22 crease; and 

23 ‘‘(bb) the individual’s 

24 monthly premium does not ex25 ceed the amount equal to 200 
17 

•S 1951 IS

1 percent of the initial premium 

2 amount paid by the individual 

3 during their first year of enroll4 ment in the program; and 

5 ‘‘(III) the requirements of clause 

6 (iii) are met. 

7 The Secretary shall immediately notify 

8 Congress if the Secretary determines that 

9 the requirements of this clause cannot be 

10 satisfied and shall include in such notifica11 tion recommendations for such legislative 

12 action as the Secretary determines to be 

13 appropriate. 

14 ‘‘(iii) EXEMPTION FROM INCREASE.— 

15 Any increase in a monthly premium im16 posed as result of a determination de17 scribed in clause (i) shall not apply with 

18 respect to the monthly premium of any ac19 tive enrollee who— 

20 ‘‘(I) has attained age 65; 

21 ‘‘(II) has paid premiums for en22 rollment in the program for at least 

23 20 years; and 

24 ‘‘(III) is not actively at work. 
18 

•S 1951 IS

1 ‘‘(D) RECALCULATED PREMIUM IF RE2 ENROLLMENT AFTER MORE THAN A 3-MONTH

3 LAPSE.— 

4 ‘‘(i) IN GENERAL.—Except as pro5 vided in subsection (e)(2), the reenrollment 

6 of an individual after a 90-day period dur7 ing which the individual failed to pay the 

8 monthly premium required to maintain the 

9 individual’s enrollment in the CLASS pro10 gram shall be treated as an initial enroll11 ment for purposes of age-adjusting the 

12 premium for enrollment in the program. 

13 ‘‘(ii) CREDIT FOR PRIOR MONTHS.— 

14 An individual who reenrolls in the CLASS 

15 program after such a 90-day period shall 

16 be— 

17 ‘‘(I) credited with any months of 

18 paid premiums that accrued prior to 

19 the individual’s lapse in enrollment; 

20 and 

21 ‘‘(II) notwithstanding the total 

22 amount of any such credited months, 

23 required to satisfy section 

24 2901(6)(B)(ii) before being eligible to 

25 receive a tier I or tier II benefit. 
19 

•S 1951 IS

1 ‘‘(6) NO UNDERWRITING REQUIREMENTS.—No 

2 underwriting shall be used to— 

3 ‘‘(A) determine the monthly premium for 

4 enrollment in the CLASS program; or 

5 ‘‘(B) prevent an individual from enrolling 

6 in the program. 

7 ‘‘(c) PAYMENT.— 

8 ‘‘(1) PAYROLL DEDUCTION.—An amount equal 

9 to the monthly premium for the enrollment in the 

10 CLASS program of an individual shall be deducted 

11 from the wages or self-employment income of such 

12 individual in accordance with such procedures as the 

13 Secretary, in consultation with the Secretary of the 

14 Treasury, shall establish for employers who elect to 

15 deduct and withhold such premiums on behalf of en16 rolled employees. 

17 ‘‘(2) ALTERNATIVE PAYMENT MECHANISM.— 

18 The Secretary shall establish alternative procedures 

19 for the payment of monthly premiums by an indi20 vidual enrolled in the CLASS program— 

21 ‘‘(A) who does not have an employer who 

22 elects to deduct and withhold premiums in ac23 cordance with paragraph (1); or 

24 ‘‘(B) who does not earn wages or derive 

25 self-employment income. 
20 

•S 1951 IS

1 ‘‘(d) TRANSFER OF PREMIUMS COLLECTED.— 

2 ‘‘(1) IN GENERAL.—During each calendar year 

3 the Secretary of the Treasury shall deposit into the 

4 Independence Fund a total amount equal, in the ag5 gregate, to 100 percent of the premiums collected 

6 during that year. 

7 ‘‘(2) TRANSFERS BASED ON ESTIMATES.—The 

8 amount deposited pursuant to paragraph (1) shall be 

9 transferred in at least monthly payments to the 

10 Independence Fund on the basis of estimates by the 

11 Secretary and certified to the Secretary of the 

12 Treasury of the amounts collected in accordance 

13 with paragraphs (1) and (2) of subsection (c). Prop14 er adjustments shall be made in amounts subse15 quently transferred to the Fund to the extent prior 

16 estimates were in excess of, or were less than, actual 

17 amounts collected. 

18 ‘‘(e) CONTRIBUTION PERIOD.— 

19 ‘‘(1) IN GENERAL.—An individual shall not be 

20 required to pay a monthly premium to maintain the 

21 individual’s enrollment in the CLASS program dur22 ing the following periods: 

23 ‘‘(A) RECEIVING BENEFITS WHILE UNEM24 PLOYED.—Any period during which the indi25 vidual is— 
21 

•S 1951 IS

1 ‘‘(i) receiving tier I or tier II benefits; 

2 and 

3 ‘‘(ii) the individual does not have 

4 wages or income derived from self-employ5 ment. 

6 ‘‘(B) FULL-TIME STUDENT WHO IS AC7 TIVELY AT WORK.—Any period during which 

8 the individual is a full-time student (as deter9 mined by the Secretary) who has not attained 

10 age 22 and is actively at work. 

11 ‘‘(2) APPLICATION OF PREMIUM AMOUNT PRIOR

12 TO START OF PERIOD.—Upon the conclusion of a pe13 riod described in paragraph (1) for an individual, 

14 the individual shall resume paying the monthly pre15 mium amount that applied to the individual imme16 diately prior to the start of such period in order to 

17 maintain enrollment in the program. 

18 ‘‘SEC. 2904. BENEFITS. 

19 ‘‘(a) DETERMINATION OF ELIGIBILITY.— 

20 ‘‘(1) APPLICATION FOR RECEIPT OF BENE21 FITS.—The Secretary shall establish procedures 

22 under which an active enrollee shall apply for receipt 

23 of tier I or tier II benefits. 

24 ‘‘(2) ELIGIBILITY ASSESSMENTS.— 
22 

•S 1951 IS

1 ‘‘(A) IN GENERAL.—Not later than Octo2 ber 1, 2008, the Secretary shall enter into 

3 agreements with— 

4 ‘‘(i) the Disability Determination 

5 Service for each State to provide for eligi6 bility assessments of active enrollees who 

7 apply for receipt of benefits; 

8 ‘‘(ii) the Protection and Advocacy 

9 System for each State to provide advocacy 

10 services in accordance with subsection (e); 

11 and 

12 ‘‘(iii) public and private entities to 

13 provide advice and assistance counseling in 

14 accordance with subsection (f). 

15 ‘‘(B) 30-DAY PERIOD FOR APPROVAL OR

16 DISAPPROVAL.—An agreement under subpara17 graph (A) shall require that a Disability Deter18 mination Service determine within 30 days of 

19 the receipt of an application for benefits under 

20 the CLASS program whether an applicant is an 

21 eligible tier I beneficiary or an eligible tier II 

22 beneficiary. An application that is pending after 

23 45 days shall be deemed approved. 

24 ‘‘(C) PRESUMPTIVE ELIGIBILITY FOR CER25 TAIN INSTITUTIONALIZED ENROLLEES PLAN-
23 

•S 1951 IS

1 NING TO DISCHARGE.—An active enrollee shall 

2 be deemed presumptively eligible if the en3 rollee— 

4 ‘‘(i) has applied for receipt of tier II 

5 benefits; 

6 ‘‘(ii) is a patient in a hospital, nursing 

7 facility, intermediate care facility for the 

8 mentally retarded, or an institution for 

9 mental diseases; and 

10 ‘‘(iii) is in the process of, or about to 

11 begin the process of, planning to discharge 

12 from the hospital, facility, or institution. 

13 ‘‘(D) APPEALS.—The Secretary shall es14 tablish procedures under which an applicant for 

15 benefits under the CLASS program shall be 

16 guaranteed the right to appeal an adverse de17 termination. 

18 ‘‘(b) TIER I BENEFITS.—An eligible tier I beneficiary 

19 shall receive the following tier I benefits: 

20 ‘‘(1) DAILY CASH BENEFIT.—A daily cash ben21 efit in the amount of $50 per day. 

22 ‘‘(2) ANNUAL BENEFIT.—An annual benefit in 

23 an amount not to exceed the amount equal to the 

24 daily benefit applicable under paragraph (1) (after 

25 the application of subsection (g)) multiplied by 365. 
24 

•S 1951 IS

1 ‘‘(3) ADVOCACY SERVICES.—Advocacy services 

2 in accordance with subsection (e). 

3 ‘‘(4) ADVICE AND ASSISTANCE COUNSELING.— 

4 Advice and assistance counseling in accordance with 

5 subsection (f). 

6 ‘‘(5) NO LIFETIME LIMIT.—There shall be no 

7 lifetime limit on the aggregate tier I benefits that an 

8 eligible tier I beneficiary may receive. 

9 ‘‘(c) TIER II BENEFITS.—An eligible tier II bene10 ficiary shall receive the following tier II benefits: 

11 ‘‘(1) DAILY CASH BENEFIT.—A daily cash ben12 efit in the amount of $100 per day. 

13 ‘‘(2) ANNUAL BENEFIT.—An annual benefit in 

14 an amount not to exceed the amount equal to the 

15 daily benefit applicable under paragraph (1) (after 

16 the application of subsection (g)) multiplied by 365. 

17 ‘‘(3) ADVOCACY SERVICES.—Advocacy services 

18 in accordance with subsection (e). 

19 ‘‘(4) ADVICE AND ASSISTANCE COUNSELING.— 

20 Advice and assistance counseling in accordance with 

21 subsection (f). 

22 ‘‘(5) NO LIFETIME LIMIT.—There shall be no 

23 lifetime limit on the aggregate tier II benefits that 

24 an eligible tier II beneficiary may receive. 

25 ‘‘(d) PAYMENT OF BENEFITS.— 
25 

•S 1951 IS

1 ‘‘(1) LIFE INDEPENDENCE ACCOUNTS.— 

2 ‘‘(A) IN GENERAL.—The Secretary shall 

3 establish procedures under which tier I daily 

4 cash benefits and tier II daily cash benefits 

5 shall be paid on a monthly basis into a Life 

6 Independence Account established by the Sec7 retary on behalf of each eligible tier I bene8 ficiary or eligible tier II beneficiary. 

9 ‘‘(B) USE OF CASH BENEFITS.—Daily cash 

10 benefits paid into a Life Independence Account 

11 of an eligible tier I beneficiary or an eligible tier 

12 II beneficiary shall be used to purchase non13 medical services and supports that the bene14 ficiary needs to maintain his or her independ15 ence at home or in another residential setting 

16 in the community, such as home modifications, 

17 adaptive technology, accessible transportation, 

18 homemaker services, respite care, personal as19 sistance services, and home care aides. 

20 ‘‘(C) ELECTRONIC MANAGEMENT OF

21 FUNDS.—The procedures established in accord22 ance with subparagraph (A) shall provide for— 

23 ‘‘(i) crediting an account established 

24 on behalf of a beneficiary with the bene25 ficiary’s cash daily benefit; 
26 

•S 1951 IS

1 ‘‘(ii) accessing such account through 

2 debit cards; and 

3 ‘‘(iii) accounting for withdrawals by 

4 the beneficiary from such account. 

5 ‘‘(D) PRIMARY PAYOR RULES FOR BENE6 FICIARIES WHO ARE ENROLLED IN MEDICAID.— 

7 In the case of an eligible tier I beneficiary or 

8 an eligible tier II beneficiary who is enrolled in 

9 Medicaid, the following payment rules shall 

10 apply: 

11 ‘‘(i) INSTITUTIONALIZED BENE12 FICIARY.—If the beneficiary is a patient in 

13 a hospital, nursing facility, intermediate 

14 care facility for the mentally retarded, or 

15 an institution for mental diseases, the ben16 eficiary shall retain an amount equal to 5 

17 percent of the beneficiary’s daily cash ben18 efit (which shall be in addition to the 

19 amount of the beneficiary’s personal needs 

20 allowance provided under Medicaid), and 

21 the remainder of such benefit shall be ap22 plied toward the facility’s cost of providing 

23 the beneficiary’s care, and Medicaid shall 

24 provide secondary coverage for such care. 
27 

•S 1951 IS

1 ‘‘(ii) BENEFICIARIES RECEIVING

2 HOME AND COMMUNITY-BASED SERV3 ICES.— 

4 ‘‘(I) 50 PERCENT OF DAILY BEN5 EFIT RETAINED BY BENEFICIARY.—If 

6 a beneficiary is receiving medical as7 sistance under Medicaid for home and 

8 community based services, the bene9 ficiary shall retain an amount equal to 

10 50 percent of the beneficiary’s daily 

11 cash benefit, subject to subclause (II), 

12 and the remainder of the daily cash 

13 benefit shall be applied toward the 

14 cost to the State of providing such as15 sistance (and shall not be used to 

16 claim Federal matching funds under 

17 Medicaid), and Medicaid shall provide 

18 secondary coverage for the remainder 

19 of any costs incurred in providing 

20 such assistance. 

21 ‘‘(II) REQUIREMENT FOR STATE

22 OFFSET.—A State shall be paid the 

23 remainder of a beneficiary’s daily cash 

24 benefit under subclause (I) only if the 

25 State home and community-based 
28 

•S 1951 IS

1 waiver under section 1115 of the So2 cial Security Act (42 U.S.C. 1315) or 

3 subsection (c) or (d) of section 1915 

4 of such Act (42 U.S.C. 1396n) does 

5 not include a waiver of the require6 ments of section 1902(a)(1) of the So7 cial Security Act (relating to 

8 statewideness) or of section 

9 1902(a)(10)(B) of such Act (relating 

10 to comparability) and the State offers 

11 at a minimum case management serv12 ices, personal care services, habili13 tation services, and respite care under 

14 such a waiver. 

15 ‘‘(III) DEFINITION OF HOME AND

16 COMMUNITY-BASED SERVICES.—In 

17 this clause, the term ‘home and com18 munity-based services’ means any 

19 services which may be offered under a 

20 home and community-based waiver 

21 authorized for a State under section 

22 1115 of the Social Security Act (42 

23 U.S.C. 1315) or subsection (c) or (d) 

24 of section 1915 of such Act (42 

25 U.S.C. 1396n). 
29 

•S 1951 IS

1 ‘‘(2) AUTHORIZED REPRESENTATIVES.— 

2 ‘‘(A) IN GENERAL.—The procedures estab3 lished under paragraph (1)(A) shall allow for 

4 access to tier I daily benefits or tier II daily 

5 benefits by an authorized representative of the 

6 eligible tier I beneficiary or eligible tier II bene7 ficiary on whose behalf such benefits are paid. 

8 ‘‘(B) QUALITY ASSURANCE AND PROTEC9 TION AGAINST FRAUD AND ABUSE.—The Sec10 retary shall include in the procedures estab11 lished under paragraph (1) standards of con12 duct for authorized representatives of eligible 

13 tier I beneficiaries and eligible tier II bene14 ficiaries to ensure that authorized representa15 tives provide quality services on behalf of such 

16 beneficiaries, do not have conflicts of interest, 

17 and do not misuse benefits paid on behalf of 

18 such beneficiaries or otherwise engage in fraud 

19 or abuse. 

20 ‘‘(3) COMMENCEMENT OF BENEFITS.—Tier I 

21 benefits or tier II benefits, as applicable, shall be 

22 paid to, or on behalf of, an eligible tier I beneficiary 

23 or an eligible tier II beneficiary, respectively, begin24 ning with the first month in which an application for 

25 such benefits is approved. 
30 

•S 1951 IS

1 ‘‘(4) ROLLOVER OPTION FOR LUMP-SUM PAY2 MENT.—An eligible tier I beneficiary or an eligible 

3 tier II beneficiary may elect to— 

4 ‘‘(A) defer payment of their daily benefit 

5 and to rollover any such deferred benefits from 

6 month-to-month, but not from year-to-year; and 

7 ‘‘(B) receive a lump-sum payment of such 

8 deferred benefits in an amount that may not 

9 exceed the lesser of— 

10 ‘‘(i) the total amount of the accrued 

11 deferred benefits; or 

12 ‘‘(ii) the applicable annual benefit. 

13 ‘‘(5) PERIOD FOR DETERMINATION OF ANNUAL

14 BENEFITS.— 

15 ‘‘(A) IN GENERAL.—The applicable period 

16 for determining with respect to an eligible tier 

17 I beneficiary or an eligible tier II beneficiary 

18 the applicable annual benefit and the amount of 

19 any accrued deferred benefits is the 12-month 

20 period that commences with the first month in 

21 which the beneficiary began to receive such ben22 efits, and each 12-month period thereafter. 

23 ‘‘(B) INCLUSION OF TIER I BENEFITS.— 

24 The Secretary shall establish procedures under 

25 which benefits paid to an eligible tier I bene-
31 

•S 1951 IS

1 ficiary who becomes an eligible tier II bene2 ficiary before the end of a 12-month benefit pe3 riod shall be included in the determination of 

4 the applicable annual benefit paid to the eligible 

5 tier II beneficiary. 

6 ‘‘(C) RECOUPMENT OF UNPAID, ACCRUED

7 BENEFITS.— 

8 ‘‘(i) IN GENERAL.—The Secretary 

9 shall recoup any accrued benefits in the 

10 event of— 

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

12 ‘‘(II) the failure of a beneficiary 

13 to elect under paragraph (4)(B) to re14 ceive such benefits as a lump-sum 

15 payment before the end of the 12- 

16 month period in which such benefits 

17 accrued. 

18 ‘‘(ii) PAYMENT INTO INDEPENDENCE

19 FUND.—Any benefits recouped in accord20 ance with clause (i) shall be paid into the 

21 Independence Fund and used in accord22 ance with section 2905. 

23 ‘‘(6) REQUIREMENT TO RECERTIFY ELIGIBILITY

24 FOR RECEIPT OF BENEFITS AND TO NOTIFY THE

25 SECRETARY IF NOT EARNING WAGES OR INCOME.— 
32 

•S 1951 IS

1 The procedures established under paragraph (1)(A) 

2 shall provide for an eligible tier I beneficiary or an 

3 eligible tier II beneficiary to— 

4 ‘‘(A) annually— 

5 ‘‘(i) recertify by submission of medical 

6 evidence the beneficiary’s continued eligi7 bility for receipt of tier I or tier II benefits 

8 (as applicable); and 

9 ‘‘(ii) submit records of expenditures 

10 attributable to the aggregate daily cash 

11 benefit received by the beneficiary during 

12 the preceding year; and 

13 ‘‘(B) notify the Secretary if the beneficiary 

14 is not earning wages or deriving self-employ15 ment income and should not have to pay a 

16 monthly premium to maintain enrollment in the 

17 CLASS program in accordance with section 

18 2903(e)(2). 

19 ‘‘(7) SUPPLEMENT, NOT SUPPLANT OTHER

20 HEALTH CARE BENEFITS.—Subject to the Medicaid 

21 payment rules under paragraph (1)(C), benefits re22 ceived by an eligible tier I beneficiary or an eligible 

23 tier II beneficiary shall supplement, but not sup24 plant, other health care benefits for which the bene25 ficiary is eligible under Medicaid or any other Feder-
33 

•S 1951 IS

1 ally funded program that provides health care bene2 fits or assistance. 

3 ‘‘(e) ADVOCACY SERVICES.—An agreement entered 

4 into under subsection (a)(2)(A)(ii) shall require the Pro5 tection and Advocacy System for the State to— 

6 ‘‘(1) assign, as needed, an advocacy counselor 

7 to each eligible tier I beneficiary or eligible tier II 

8 beneficiary that is covered by such agreement and 

9 who provides an eligible tier I beneficiary or an eligi10 ble tier II beneficiary with— 

11 ‘‘(A) information regarding how to access 

12 the appeals process established for the program; 

13 ‘‘(B) assistance with respect to the annual 

14 recertification and notification required under 

15 subsection (d)(6); and 

16 ‘‘(C) such other services as the Secretary, 

17 by regulation, shall require; and 

18 ‘‘(2) ensure that the System and such coun19 selors comply with the requirements of subsection 

20 (i). 

21 ‘‘(f) ADVICE AND ASSISTANCE COUNSELING.—An 

22 agreement entered into under subsection (a)(2)(A)(iii) 

23 shall require the entity to assign, as requested by an eligi24 ble tier I beneficiary or an eligible tier II beneficiary that 

25 is covered by such agreement, an advice and assistance 
34 

•S 1951 IS

1 counselor who provides an eligible tier I beneficiary or an 

2 eligible tier II beneficiary with information regarding— 

3 ‘‘(1) accessing and coordinating long-term serv4 ices and supports in the most integrated setting; 

5 ‘‘(2) possible eligibility for other benefits and 

6 services; 

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

8 and 

9 ‘‘(4) such other services as the Secretary, by 

10 regulation, may require. 

11 ‘‘(g) NO EFFECT ON ELIGIBILITY FOR OTHER BENE12 FITS.—Benefits paid to an eligible tier I beneficiary or an 

13 eligible tier II beneficiary under the CLASS program shall 

14 be disregarded for purposes of determining or continuing 

15 the beneficiary’s eligibility for receipt of benefits under 

16 any other Federal, State, or locally funded assistance pro17 gram, including benefits paid under titles II, XVI, XVIII, 

18 XIX, or XXI of the Social Security Act (42 U.S.C. 401 

19 et seq., 1381 et seq., 1395 et seq., 1396 et seq., 1397aa 

20 et seq.), under the laws administered by the Secretary of 

21 Veterans Affairs, under low-income housing assistance 

22 programs, or under the food stamp program established 

23 under the Food Stamp Act of 1977 (7 U.S.C. 2011). 

24 ‘‘(h) COST-OF-LIVING AND OTHER ADJUSTMENTS.— 
35 

•S 1951 IS

1 ‘‘(1) IN GENERAL.—Beginning with 2007, the 

2 dollar amounts specified in subsections (b)(1) and 

3 (c)(1) shall be annually increased by the percentage 

4 increase in the consumer price index for all urban 

5 consumers (U.S. city average) over the previous 

6 year. 

7 ‘‘(2) ADDITIONAL ADJUSTMENT.—With respect 

8 to any year for which the Secretary has determined 

9 under section 2903(b)(4)(C) that an adjustment to 

10 the monthly premium amounts is necessary to en11 sure program solvency, the Secretary shall decrease 

12 the increase in the dollar amounts specified in sub13 sections (b)(1) and (c)(1) that would otherwise be 

14 applicable under paragraph (1) for that year, by 

15 such amount as the Secretary determines is appro16 priate for that year (but shall ensure that there is 

17 an increase in such dollar amounts for that year) . 

18 ‘‘(i) RULE OF CONSTRUCTION.—Nothing in this title 

19 shall be construed as prohibiting tier I or tier II benefits 

20 paid under the CLASS program from being used to com21 pensate a family caregiver for providing community living 

22 assistance services and supports to an eligible tier I bene23 ficiary or an eligible tier II beneficiary. 

24 ‘‘(j) PROTECTION AGAINST CONFLICT OF INTER25 ESTS.—The Secretary shall establish procedures to ensure 
36 

•S 1951 IS

1 that the Disability Determination Service and Protection 

2 and Advocacy System for a State, advocacy counselors for 

3 eligible tier I or eligible tier II beneficiaries, and any other 

4 entities that provide services to active enrollees and eligi5 ble tier I or eligible tier II beneficiaries under the CLASS 

6 program comply with the following: 

7 ‘‘(1) If the entity provides counseling or plan8 ning services, such services are provided in a manner 

9 that fosters the best interests of the active enrollee 

10 or beneficiary. 

11 ‘‘(2) The entity has established operating proce12 dures that are designed to avoid or minimize con13 flicts of interest between the entity and an active en14 rollee or beneficiary. 

15 ‘‘(3) The entity provides information about all 

16 services and options available to the active enrollee 

17 or beneficiary, to the best of its knowledge, including 

18 services available through other entities or providers. 

19 ‘‘(4) The entity assists the active enrollee or 

20 beneficiary to access desired services, regardless of 

21 the provider. 

22 ‘‘(5) The entity reports the number of active 

23 enrollees and beneficiaries provided with assistance 

24 by age, disability, and whether such enrollees and 
37 

•S 1951 IS

1 beneficiaries received services from the entity or an2 other entity. 

3 ‘‘(6) If the entity provides counseling or plan4 ning services, the entity ensures that an active en5 rollee or beneficiary is informed of any financial in6 terest that the entity has in a service provider. 

7 ‘‘(7) The entity provides an active enrollee or 

8 beneficiary with a list of available service providers 

9 that can meet the needs of the active enrollee or 

10 beneficiary. 

11 ‘‘SEC. 2905. INDEPENDENCE FUND. 

12 ‘‘(a) ESTABLISHMENT OF INDEPENDENCE FUND.— 

13 There is established in the Treasury of the United States 

14 a trust fund to be known as the ‘Independence Fund’. The 

15 Secretary shall serve as Managing Trustee of such Fund. 

16 The Fund shall consist of all amounts derived from pay17 ments into the Fund under sections 2903(d) and 

18 2904(d)(5)(C)(ii), and remaining after investment of such 

19 amounts under subsection (b), including additional 

20 amounts derived as income from such investments. The 

21 amounts held in the Fund are appropriated and shall re22 main available without fiscal year limitation— 

23 ‘‘(1) to be held for investment on behalf of indi24 viduals enrolled in the CLASS program; 
38 

•S 1951 IS

1 ‘‘(2) to pay the administrative expenses related 

2 to the Fund and to investment under subsection (b); 

3 and 

4 ‘‘(3) to pay tier I and tier II benefits under sec5 tion 2904. 

6 ‘‘(b) INVESTMENT OF FUND BALANCE.—The Sec7 retary, through the Secretary of the Treasury, shall invest 

8 the Independence Fund in the same manner, and to the 

9 same extent, as the Federal Old-Age and Survivors Trust 

10 Fund and the Federal Disability Insurance Trust Fund 

11 may be invested under section 201(d) of the Social Secu12 rity Act (42 U.S.C. 401(d)). 

13 ‘‘(c) OFF-BUDGET STATUS; LOCK-BOX PROTEC14 TION.— 

15 ‘‘(1) EXCLUSION OF TRUST FUNDS FROM ALL

16 BUDGETS.—Notwithstanding any other provision of 

17 law, the amounts derived from payments into the 

18 Fund and amounts paid from the Fund shall not be 

19 counted as new budget authority, outlays, receipts, 

20 or deficit or surplus for purposes of— 

21 ‘‘(A) the budget of the United States Gov22 ernment, as submitted by the President; 

23 ‘‘(B) the congressional budget; or 

24 ‘‘(C) the Balanced Budget and Emergency 

25 Deficit Control Act of 1985. 
39 

•S 1951 IS

1 ‘‘(2) LOCK-BOX PROTECTION.— 

2 ‘‘(A) IN GENERAL.—Notwithstanding any 

3 other provision of law, it shall not be in order 

4 in the Senate or the House of Representatives 

5 to consider any measure that would authorize 

6 the payment or use of amounts in the Fund for 

7 any purpose other than a purpose authorized 

8 under this title. 

9 ‘‘(B) 60-VOTE WAIVER REQUIRED IN THE

10 SENATE.— 

11 ‘‘(i) IN GENERAL.—Subparagraph (A) 

12 may be waived or suspended in the Senate 

only by the affirmative vote of 3 13 ⁄5 of the 

14 Members, duly chosen and sworn. 

15 ‘‘(ii) APPEALS.— 

16 ‘‘(I) PROCEDURE.—Appeals in 

17 the Senate from the decisions of the 

18 Chair relating to clause (i) shall be 

19 limited to 1 hour, to be equally di20 vided between, and controlled by, the 

21 mover and the manager of the meas22 ure that would authorize the payment 

23 or use of amounts in the Fund for a 

24 purpose other than a purpose author25 ized under this title. 
40 

•S 1951 IS

1 ‘‘(II) 60-VOTES REQUIRED.—An 

affirmative vote of 3 2 ⁄5 of the Members, 

3 duly chosen and sworn, shall be re4 quired in the Senate to sustain an ap5 peal of the ruling of the Chair on a 

6 point of order raised in relation to 

7 clause (i). 

8 ‘‘(C) RULES OF THE SENATE AND HOUSE

9 OF REPRESENTATIVES.—This section is enacted 

10 by Congress— 

11 ‘‘(i) as an exercise of the rulemaking 

12 power of the Senate and House of Rep13 resentatives, respectively, and is deemed to 

14 be part of the rules of each House, respec15 tively, but applicable only with respect to 

16 the procedure to be followed in that House 

17 in the case of a measure described in sub18 paragraph (A), and it supersedes other 

19 rules only to the extent that it is incon20 sistent with such rules; and 

21 ‘‘(ii) with full recognition of the con22 stitutional right of either House to change 

23 the rules (so far as they relate to the pro24 cedure of that House) at any time, in the 
41 

•S 1951 IS

1 same manner, and to the same extent as in 

2 the case of any other rule of that House. 

3 ‘‘(d) ADDITIONAL APPROPRIATIONS TO ENSURE SOL4 VENCY DURING INITIAL BENEFIT YEARS.—In addition to 

5 the amounts appropriated to the Fund under subsection 

6 (a), out of any money in the Treasury of the United States 

7 not otherwise appropriated, there are appropriated to the 

8 Fund, for each of fiscal years 2011 through 2015, such 

9 sums as are necessary for each such fiscal year (and 

10 which, in the case of each of fiscal years 2012 through 

11 2015, shall be less than the amount appropriated for the 

12 preceding fiscal year) to ensure the solvency of the Fund 

13 during the first 5 years in which tier I or tier II benefits 

14 are paid from the Fund. Amounts appropriated under this 

15 subsection shall remain available without fiscal year limi16 tation for the purposes specified in paragraphs (1), (2), 

17 and (3) of subsection (a). 

18 ‘‘SEC. 2906. REGULATIONS; ANNUAL REPORT. 

19 ‘‘(a) REGULATIONS.—The Secretary shall promulgate 

20 such regulations as are necessary to carry out the CLASS 

21 program in accordance with this title. Such regulations 

22 shall include provisions to prevent fraud and abuse under 

23 the program. 

24 ‘‘(b) ANNUAL REPORT.—Beginning with fiscal year 

25 2011, the Secretary shall submit an annual report to Con-
42 

•S 1951 IS

1 gress on the CLASS program. Each report shall include 

2 the following: 

3 ‘‘(1) The total amount of enrollees in the pro4 gram. 

5 ‘‘(2) The total number of eligible tier I bene6 ficiaries and eligible tier II beneficiaries during the 

7 fiscal year. 

8 ‘‘(3) The total amount of tier I and tier II ben9 efits provided during the fiscal year. 

10 ‘‘(4) A description of instances of fraud or 

11 abuse identified during the fiscal year. 

12 ‘‘(5) Recommendations for such administrative 

13 or legislative action as the Secretary determines is 

14 necessary to improve the program or to prevent the 

15 occurrence of fraud or abuse. 

16 ‘‘SEC. 2907. TAX TREATMENT OF PROGRAM. 

17 ‘‘The CLASS program shall be treated for purposes 

18 of the Internal Revenue Code of 1986 in the same manner 

19 as a qualified long-term care insurance contract for quali20 fied long-term care services.’’. 

21 (2) CONFORMING AMENDMENTS TO MED22 ICAID.—Section 1902(a) of the Social Security Act 

23 (42 U.S.C. 1396a(a)) is amended— 

24 (A) in paragraph (66), by striking ‘‘and’’ 

25 at the end; 
43 

•S 1951 IS

1 (B) in paragraph (67), by striking the pe2 riod and inserting ‘‘; and’’; and 

3 (C) by inserting after paragraph (67) the 

4 following: 

5 ‘‘(68) provide that the State will comply with 

6 such regulations regarding the application of pri7 mary and secondary payor rules with respect to indi8 viduals who are eligible for medical assistance under 

9 this title and are eligible tier I beneficiaries or eligi10 ble tier II beneficiaries under the CLASS program 

11 established under title XXIX of the Public Health 

12 Service Act as the Secretary shall establish.’’. 

13 (b) ASSURANCE OF ADEQUATE INFRASTRUCTURE

14 FOR THE PROVISION OF PERSONAL CARE ATTENDANT

15 WORKERS.—Section 1902(a) of the Social Security Act 

16 (42 U.S.C. 1396a(a)), as amended by subsection (a)(2), 

17 is amended— 

18 (1) in paragraph (67), by striking ‘‘and’’ at the 

19 end; 

20 (2) in paragraph (68), by striking the period at 

21 the end and inserting ‘‘; and’’; and 

22 (3) by inserting after paragraph (68), the fol23 lowing: 

24 ‘‘(69) provide that, not later than 2 years after 

25 the date of enactment of the Community Living As-
44 

•S 1951 IS

1 sistance Services and Supports Act, each State 

2 shall— 

3 ‘‘(A) assess the extent to which entities 

4 such as providers of home care, home health 

5 services, home and community service providers, 

6 public authorities created to provide personal 

7 care services to individuals eligible for medical 

8 assistance under the State plan, and nonprofit 

9 organizations, are serving or have the capacity 

10 to serve as fiscal agents for, employers of, and 

11 providers of employment-related benefits for, 

12 personal care attendant workers who provide 

13 personal care services to individuals receiving 

14 benefits under the CLASS program established 

15 under title XXIX of the Public Health Service 

16 Act, including in rural and underserved areas; 

17 ‘‘(B) designate or create such entities to 

18 serve as fiscal agents for, employers of, and 

19 providers of employment-related benefits for, 

20 such workers to ensure an adequate supply of 

21 the workers for individuals receiving benefits 

22 under the CLASS program, including in rural 

23 and underserved areas; and 

24 ‘‘(C) ensure that the designation or cre25 ation of such entities will not impede the ability 
45 

•S 1951 IS

1 of such individuals to retain, manage, or dis2 miss such workers or inhibit such individuals 

3 from relying on family members for the provi4 sion of personal care services.’’. 

5 (c) PERSONAL CARE ATTENDANTS WORKFORCE AD6 VISORY PANEL.— 

7 (1) ESTABLISHMENT.—Not later than 90 days 

8 after the date of enactment of this Act, the Sec9 retary of Health and Human Services shall establish 

10 a Personal Care Attendants Workforce Advisory 

11 Panel for the purpose of examining and advising the 

12 Secretary and Congress on workforce issues related 

13 to personal care attendant workers, including with 

14 respect to the adequacy of the number of such work15 ers, the salaries, wages, and benefits of such work16 ers, and access to the services provided by such 

17 workers. 

18 (2) MEMBERSHIP.—In appointing members to 

19 the Personal Care Attendants Workforce Advisory 

20 Panel, the Secretary shall ensure that such members 

21 include the following: 

22 (A) Individuals with disabilities of all ages. 

23 (B) Senior individuals. 

24 (C) Representatives of individuals with dis25 abilities. 
46 

•S 1951 IS

1 (D) Representatives of senior individuals. 

2 (E) Representatives of workforce and labor 

3 organizations. 

4 (F) Representatives of home and commu5 nity-based service providers. 

6 (G) Representatives of assisted living pro7 viders. 

8 TITLE II—AMENDMENTS TO THE 

9 INTERNAL REVENUE CODE 

10 OF 1986 

11 SEC. 201. ABOVE-THE-LINE DEDUCTION FOR PREMIUM 

12 COSTS. 

13 (a) IN GENERAL.—Section 62(a) of the Internal Rev14 enue Code of 1986 (defining adjusted gross income) is 

15 amended by redesignating paragraph (19), as added by 

16 section 703(a) of the American Jobs Creation Act of 2004, 

17 as paragraph (20), and by inserting after paragraph (20) 

18 (as so redesignated) the following new paragraph: 

19 ‘‘(21) CLASS PROGRAM PREMIUMS.—The deduc20 tion allowed by section 213 (determined without re21 gard to any adjusted gross income limitation) which 

22 consists of amounts paid by the taxpayer for enroll23 ment in the CLASS program (as defined in section 

24 36(d)) for eligible enrollment months (as defined in 

25 section 36(b)) beginning in the taxable year.’’. 
47 

•S 1951 IS

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

2 this section shall apply to taxable years beginning after 

3 December 31, 2005. 

4 SEC. 202. CREDIT FOR PREMIUM COSTS OF LOW-INCOME 

5 CLASS ENROLLEES. 

6 (a) IN GENERAL.—Subpart C of part IV of sub7 chapter A of chapter 1 of the Internal Revenue Code of 

8 1986 (relating to refundable credits) is amended by redes9 ignating section 36 as section 37 and inserting after sec10 tion 35 the following new section: 

11 ‘‘SEC. 36. PREMIUM COSTS OF LOW-INCOME CLASS ENROLL12 EES. 

13 ‘‘(a) IN GENERAL.—In the case of a low-income 

14 CLASS enrollee, there shall be allowed as a credit against 

15 the tax imposed by subtitle A an amount equal to 50 per16 cent of the amount paid by the taxpayer for enrollment 

17 of the taxpayer and the taxpayer’s spouse in the CLASS 

18 program for eligible enrollment months beginning in the 

19 taxable year. 

20 ‘‘(b) ELIGIBLE ENROLLMENT MONTH.—For pur21 poses of this section— 

22 ‘‘(1) IN GENERAL.—The term ‘eligible enroll23 ment month’ means any month if, as of the first day 

24 of such month, the taxpayer is a low-income CLASS 
48 

•S 1951 IS

1 enrollee enrolled in the CLASS program, the pre2 mium for which is paid by the taxpayer. 

3 ‘‘(2) JOINT RETURNS.—In the case of a joint 

4 return, the requirements of paragraph (1) shall be 

5 treated as met with respect to any month if at least 

6 1 spouse satisfies such requirements. 

7 ‘‘(c) LOW-INCOME CLASS ENROLLEE.—For purposes 

8 of this section, the term ‘low-income CLASS enrollee’ 

9 means an individual— 

10 ‘‘(1) who is an active enrollee in the CLASS 

11 program (as defined in section 2901(1) of the Public 

12 Health Service Act); and 

13 ‘‘(2) whose gross income does not exceed 250 

14 percent of the poverty line. 

15 ‘‘(d) CLASS PROGRAM.—For purposes of this section, 

16 the term ‘CLASS program’ means the program for com17 munity living assistance services and supports established 

18 under title XXIX of the Public Health Service Act. 

19 ‘‘(e) SPECIAL RULES.— 

20 ‘‘(1) COORDINATION WITH OTHER DEDUC21 TIONS.—Amounts taken into account under sub22 section (a) shall not be taken into account in deter23 mining any deduction allowed under section 

24 62(a)(21), 162(l), or 213. 
49 

•S 1951 IS

1 ‘‘(2) MSA DISTRIBUTIONS.—Amounts distrib2 uted from an Archer MSA (as defined in section 

3 220(d)) shall not be taken into account under sub4 section (a). 

5 ‘‘(3) DENIAL OF CREDIT TO DEPENDENTS.—No 

6 credit shall be allowed under this section to any indi7 vidual with respect to whom a deduction under sec8 tion 151 is allowable to another taxpayer for a tax9 able year beginning in the calendar year in which 

10 such individual’s taxable year begins. 

11 ‘‘(4) BOTH SPOUSES ELIGIBLE INDIVIDUALS.— 

12 For purposes of subsection (a), the amount paid for 

13 enrollment of the taxpayer’s spouse shall be dis14 regarded if— 

15 ‘‘(A) the taxpayer is married at the close 

16 of the taxable year, 

17 ‘‘(B) the taxpayer and the taxpayer’s 

18 spouse are both low-income CLASS enrollees 

19 during the taxable year, and 

20 ‘‘(C) the taxpayer files a separate return 

21 for the taxable year. 

22 ‘‘(5) MARITAL STATUS; CERTAIN MARRIED IN23 DIVIDUALS LIVING APART.—Rules similar to the 

24 rules of paragraph (3) and (4) of section 21(e) shall 

25 apply for purposes of this section. 
50 

•S 1951 IS

1 ‘‘(f) REGULATIONS.—The Secretary may prescribe 

2 such regulations and guidance as may be necessary or ap3 propriate to carry out this section.’’. 

4 (b) CONFORMING AMENDMENTS.— 

5 (1) Paragraph (2) of section 1324(b) of title 

6 31, United States Code, is amended by inserting ‘‘or 

7 36’’ after ‘‘35’’. 

8 (2) The table of section for subpart C of part 

9 IV of chapter 1 of the Internal Revenue Code of 

10 1986 is amended by striking the last item and in11 serting the following new items: 

‘‘Sec. 36. Premiums costs of low-income CLASS enrollees. 

‘‘Sec. 37. Overpayments of tax.’’. 

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

13 this section shall apply to taxable years beginning after 

14 December 31, 2005. 

15 SEC. 203. CREDIT FOR COSTS OF EMPLOYERS WHO ELECT 

16 TO AUTOMATICALLY ENROLL EMPLOYEES 

17 AND WITHHOLD CLASS PREMIUMS FROM 

18 WAGES. 

19 (a) IN GENERAL.—Subpart D of part IV of sub20 chapter A of chapter 1 of the Internal Revenue Code of 

21 1986 (relating to business credits) is amended by inserting 

22 after section 45M the following: 
51 

•S 1951 IS

1 ‘‘SEC. 45N. CREDIT FOR COSTS OF AUTOMATICALLY EN2 ROLLING EMPLOYEES AND WITHHOLDING 

3 CLASS PREMIUMS FROM WAGES. 

4 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

5 the CLASS automatic enrollment and premium with6 holding credit determined under this section for the tax7 able year is an amount equal to 25 percent of the total 

8 amount paid or incurred by the taxpayer during the tax9 able year to— 

10 ‘‘(1) automatically enroll employees in the 

11 CLASS program established under title XXIX of the 

12 Public Health Service Act, and 

13 ‘‘(2) withhold monthly CLASS premiums on be14 half of an employee who is enrolled in that program. 

15 ‘‘(b) DENIAL OF DOUBLE BENEFIT.—No deduction 

16 shall be allowed under this chapter for any amount taken 

17 into account in determining the credit under this section. 

18 ‘‘(c) ELECTION NOT TO CLAIM CREDIT.—This sec19 tion shall not apply to a taxpayer for any taxable year 

20 if such taxpayer elects to have this section not apply for 

21 such taxable year.’’. 

22 (b) CREDIT MADE PART OF GENERAL BUSINESS

23 CREDIT.—Subsection (b) of section 38 of the Internal 

24 Revenue Code of 1986 (relating to general business credit) 

25 is amended by striking ‘‘plus’’ at the end of paragraph 

26 (23), by striking the period at the end of paragraph (24) 
52 

•S 1951 IS

1 and inserting ‘‘, plus’’, and by inserting after paragraph 

2 (24) the following new paragraph: 

3 ‘‘(25) the CLASS automatic enrollment and 

4 premium withholding credit.’’. 

5 (c) CLERICAL AMENDMENT.—The table of sections 

6 for subpart D of part IV of subchapter A of chapter 1 

7 of the Internal Revenue Code of 1986 is amended by in8 serting after the item relating to section 45M the following 

9 new item: 

‘‘Sec. 45N. Credit for costs of automatically enrolling employees and withholding CLASS premiums from wages.’’. 

10 (d) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to expenses paid or incurred after 

12 December 31, 2005, in taxable years ending after such 

13 date. 

14 SEC. 204. LONG-TERM CARE INSURANCE INCLUDIBLE IN 

15 CAFETERIA PLANS. 

16 (a) IN GENERAL.—Section 125(f) of the Internal 

17 Revenue Code of 1986 is amended by striking the last sen18 tence. 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 subsection (a) shall apply to taxable years beginning after 

21 December 31, 2005. 
53 

•S 1951 IS

1 TITLE III—EFFECTIVE DATE 

2 SEC. 301. EFFECTIVE DATE. 

3 Except as provided in sections 201(b), 202(c), and 

4 203(b), this Act and the amendments made by this Act 

5 take effect on January 1, 2006. 

Æ