II

106TH CONGRESS

1ST SESSION S. 894

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 SENATE OF THE UNITED STATES

APRIL 28, 1999

Mr. CLELAND introduced the following bill; which was read twice and referred

to the Committee on Governmental Affairs

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’’.
2

•S 894 IS

1 SEC. 2. LONG-TERM CARE INSURANCE.

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

3 is amended by adding after chapter 89 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, the term—

7 ‘‘(1) ‘activities of daily living’ includes—

8 ‘‘(A) eating;

9 ‘‘(B) toileting;

10 ‘‘(C) transferring;

11 ‘‘(D) bathing;

12 ‘‘(E) dressing; and

13 ‘‘(F) continence;

14 ‘‘(2) ‘annuitant’ has the meaning such term

15 would have under section 8901(3) if, for purposes of

16 such paragraph, the term ‘employee’ were considered

17 to have the meaning under paragraph (7) of this

18 section;

19 ‘‘(3) ‘appropriate Secretary’ means—

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

21 paragraph, the Secretary of Defense;
3

•S 894 IS

1 ‘‘(B) with respect to the United States

2 Coast Guard when it is not operating as a serv3 ice of the Navy, the Secretary of Transpor4 tation;

5 ‘‘(C) with respect to the commissioned

6 corps of the National Oceanic and Atmospheric

7 Administration, the Secretary of Commerce;

8 ‘‘(D) with respect to the commissioned

9 corps of the Public Health Service, the Sec10 retary of Health and Human Services; and

11 ‘‘(E) with respect to members of the For12 eign Service, the Secretary of State;

13 ‘‘(4) ‘assisted living facility’ has the meaning

14 given such term under section 232 of the National

15 Housing Act (12 U.S.C. 1715w);

16 ‘‘(5) ‘carrier’ means a voluntary association,

17 corporation, partnership, or other nongovernmental

18 organization that is lawfully engaged in providing,

19 paying for, or reimbursing the cost of, qualified

20 long-term care services under group insurance poli21 cies or contracts, or similar group arrangements, in

22 consideration of premiums or other periodic charges

23 payable to the carrier;

24 ‘‘(6) ‘eligible individual’ means—
4

•S 894 IS

1 ‘‘(A) an employee who has completed 6

2 months of continuous service as an employee

3 under other than a temporary appointment lim4 ited to 6 months or less;

5 ‘‘(B) an annuitant;

6 ‘‘(C) a member of the uniformed services

7 on active duty for a period of more than 30

8 days or full-time National Guard duty (as de9 fined under section 101(d)(5) of title 10) who

10 satisfies such eligibility requirements as the Of11 fice prescribes under section 9006(c);

12 ‘‘(D) a member of the uniformed services

13 entitled to retired or retainer pay (other than

14 under chapter 1223 of title 10) who satisfies

15 such eligibility requirements as the Office pre16 scribes under section 9006(c);

17 ‘‘(E) a member of the Foreign Service

18 who—

19 ‘‘(i) is described under section 103(1),

20 (2), (3), (4), or (5) of the Foreign Service

21 Act of 1980 (22 U.S.C. 3903(1), (2), (3),

22 (4), or (5); and

23 ‘‘(ii) satisfies such eligibility require24 ments as the Office prescribes under sanc25 tion 9006(c);
5

•S 894 IS

1 ‘‘(F) a member of the Foreign Service en2 titled to an annuity under the Foreign Service

3 Retirement and Disability System or the For4 eign Service Pension System who satisfies such

5 eligibility requirements as the Office prescribes

6 under section 9006(c); or

7 ‘‘(G) a qualified relative of a sponsoring

8 individual;

9 ‘‘(7) ‘employee’ means—

10 ‘‘(A) an employee as defined under section

11 8901(1) (A) through (H); and

12 ‘‘(B) an individual described under section

13 2105(e);

14 ‘‘(8) ‘home and community care’ has the mean15 ing given such term under section 1929 of the Social

16 Security Act (42 U.S.C. 1396t(a));

17 ‘‘(9) ‘long-term care benefits plan’ means a

18 group insurance policy or contract, or similar group

19 arrangement, provided by a carrier for the purpose

20 of providing, paying for, or reimbursing expenses for

21 qualified long-term care services;

22 ‘‘(10) ‘nursing home’ has the meaning given

23 such term under section 1908 of the Social Security

24 Act (42 U.S.C. 1396g(e)(1));
6

•S 894 IS

1 ‘‘(11) ‘Office’ means the Office of Personnel

2 Management;

3 ‘‘(12) ‘qualified long-term care services’ has the

4 meaning given such term under section 7702B of

5 the Internal Revenue Code of 1986;

6 ‘‘(13) ‘qualified relative’, as used with respect

7 to a sponsoring individual, means—

8 ‘‘(A) the spouse of such sponsoring indi9 vidual;

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

11 sponsoring individual; and

12 ‘‘(C) any other person bearing a relation13 ship to such sponsoring individual specified by

14 the Office in regulations; and

15 ‘‘(14) ‘sponsoring individual’ refers to an indi16 vidual described under paragraph (6)(A), (B), (C),

17 or (D).

18 ‘‘§ 9002. Eligibility to obtain coverage

19 ‘‘(a) Any eligible individual may obtain long-term

20 care insurance coverage under this chapter for such indi21 vidual.

22 ‘‘(b)(1) As a condition for obtaining long-term care

23 insurance coverage under this chapter based on an individ24 ual’s status as a qualified relative, certification from the

25 applicant’s sponsoring individual shall be required as to—
7

•S 894 IS

1 ‘‘(A) such sponsoring individual’s status, as de2 scribed under section 9001(6)(A), (B), (C), or (D)

3 (as applicable), as of the time of the qualified rel4 ative’s application for coverage; and

5 ‘‘(B) the existence of the claimed relationship

6 as of that time.

7 ‘‘(2) Any certification under paragraph (1) shall be

8 submitted at such time and in such form and manner as

9 the Office shall by regulation prescribe.

10 ‘‘(c) Nothing in this chapter shall be considered to

11 require that long-term care insurance coverage be made

12 available in the case of any individual who would be imme13 diately benefit eligible.

14 ‘‘§ 9003. Contracting authority

15 ‘‘(a) Without regard to section 3709 of the Revised

16 Statutes or other statute requiring competitive bidding,

17 the Office may contract with qualified carriers to provide

18 group long-term care insurance under this chapter, except

19 that the Office may not have contracts in effect under this

20 section with more than 3 qualified carriers.

21 ‘‘(b) To be considered a qualified carrier under this

22 chapter, a company shall be licensed to issue group long23 term care insurance in all the States and the District of

24 Columbia.
8

•S 894 IS

1 ‘‘(c)(1) Each contract under this section shall contain

2 a detailed statement of the benefits offered (including any

3 maximums, limitations, exclusions, and other definitions

4 of benefits), the rates charged (including any limitations

5 or other conditions on any subsequent adjustment), and

6 such other terms and conditions as may be mutually

7 agreed to by the Office and the carrier involved, consistent

8 with the requirements of this chapter.

9 ‘‘(2) The rates charged under any contract under this

10 section shall reasonably reflect the cost of the benefits pro11 vided under such contract.

12 ‘‘(d) The benefits and coverage made available to in13 dividuals under any contract under this section shall be

14 guaranteed to be renewable and may not be canceled by

15 the carrier except for nonpayment of charges.

16 ‘‘(e) Each contract under this section shall require

17 the carrier to agree to—

18 ‘‘(1) pay or provide benefits in an individual

19 case if the Office (or a duly designated third-party

20 administrator) finds that the individual involved is

21 entitled to such payment or benefit under the con22 tract; and

23 ‘‘(2) participate in administrative procedures

24 designed to bring about the expeditious resolution of

25 disputes arising under such contract, including, in
9

•S 894 IS

1 appropriate circumstances, 1 or more alternative

2 means of dispute resolution.

3 ‘‘(f)(1)(A) Subject to subparagraph (B), each con4 tract under this section shall be for a term of 5 years,

5 but may be made automatically renewable from term to

6 term in the absence of notice of termination by either

7 party.

8 ‘‘(B) The rights and responsibilities of the enrolled

9 individual, the insurer, and the Office (or duly designated

10 third-party administrator) under any such contract shall

11 continue until the termination of coverage of the enrolled

12 individual.

13 ‘‘(2) Group long-term care insurance coverage ob14 tained by an individual under this chapter shall terminate

15 only upon the occurrence of—

16 ‘‘(A) the death of the insured;

17 ‘‘(B) exhaustion of benefits, as determined

18 under the contract;

19 ‘‘(C) insolvency of the insurer, as determined

20 under the contract; or

21 ‘‘(D) any event justifying a cancellation under

22 subsection (d).

23 ‘‘(3) Subject to paragraph (2), each contract under

24 this section shall include such provisions as may be nec25 essary to—
10

•S 894 IS

1 ‘‘(A) effectively preserve all parties’ rights and

2 responsibilities under such contract notwithstanding

3 the termination of such contract (whether due to

4 nonrenewal under paragraph (1) or otherwise); and

5 ‘‘(B) ensure that, once an individual becomes

6 duly enrolled, long-term care insurance coverage ob7 tained by such individual under that enrollment shall

8 not be terminated due to any change in status (as

9 described under section 9001(6)), such as separation

10 from Government service or the uniformed services,

11 or ceasing to meet the requirements for being con12 sidered a qualified relative (whether due to divorce

13 or otherwise).

14 ‘‘§ 9004. Long-term care benefits

15 ‘‘(a) Benefits under this chapter shall be provided

16 under qualified long-term care insurance contracts, within

17 the meaning of section 7702B of the Internal Revenue

18 Code of 1986.

19 ‘‘(b) Each contract under section 9003, in addition

20 to any matter otherwise required under this chapter, shall

21 provide for—

22 ‘‘(1) adequate consumer protections (including

23 through establishment of sufficient reserves or rein24 surance);
11

•S 894 IS

1 ‘‘(2) adequate protections in the event of carrier

2 bankruptcy (or other similar event);

3 ‘‘(3) availability of benefits upon appropriate

4 certification as to an individual’s—

5 ‘‘(A) inability (without substantial assist6 ance from another individual) to perform at

7 least 2 activities of daily living for a period of

8 at least 90 days due to a loss of functional ca9 pacity;

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

11 determined under regulations prescribed by the

12 Secretary of the Treasury in consultation with

13 the Secretary of Health and Human Services)

14 to the level of disability described in subpara15 graph (A); or

16 ‘‘(C) requiring substantial supervision to

17 protect such individual from threats to health

18 and safety due to severe cognitive impairment;

19 ‘‘(4) choice of cash or service benefits (such as

20 the expense-incurred method or the indemnity meth21 od);

22 ‘‘(5) inflation protection (whether through sim23 ple or compounded adjustment of benefits); and

24 ‘‘(6) portability of benefits (consistent with sec25 tion 9003 (d) and (f)).
12

•S 894 IS

1 ‘‘(c) To the maximum extent practicable, at least 1

2 of the policies being offered under this chapter shall, in

3 addition to any matter otherwise required under this chap4 ter, provide for—

5 ‘‘(1) length-of-benefit options;

6 ‘‘(2) options relating to the provision of cov7 erage in a variety of settings, including nursing

8 homes, assisted living facilities, and home and com9 munity care;

10 ‘‘(3) options relating to elimination periods;

11 ‘‘(4) options relating to nonforfeiture benefits;

12 and

13 ‘‘(5) availability of benefits upon appropriate

14 certification of medical necessity (as defined by the

15 Office in consultation with the Secretary of Health

16 and Human Services) not satisfying the require17 ments of subsection (b)(3).

18 ‘‘(d)(1) The Office shall take all practicable measures

19 to ensure that, at least 1 of the long-term care benefits

20 plans available under this chapter shall be a Government21 wide long-term care benefits plan.

22 ‘‘(2) Neither subsection (c)(5) nor the exception

23 under subsection (e) shall apply with respect to any Gov24 ernmentwide plan under this subsection.
13

•S 894 IS

1 ‘‘(e) Nothing in this chapter shall be considered to

2 permit or require the inclusion, in any contract, of provi3 sions inconsistent with section 7702B of the Internal Rev4 enue Code of 1986 or any other provision of such Code

5 (except to the extent necessary to carry out subsection

6 (c)(5)).

7 ‘‘(f) If a State (or the District of Columbia) imposes

8 any requirement which is more stringent than the require9 ment imposed by subsection (b)(1), the requirement im10 posed by subsection (b)(1) shall be treated as met if the

11 more stringent requirement of the State (or the District

12 of Columbia) is met.

13 ‘‘§ 9005. Financing

14 ‘‘(a) Except as provided in subsection (b)(2), each in15 dividual having long-term care insurance coverage under

16 this chapter shall be responsible for 100 percent of the

17 charges for such coverage.

18 ‘‘(b)(1) The amount necessary to pay the charges for

19 enrollment shall—

20 ‘‘(A) in the case of an employee, be withheld

21 from the pay of such employee;

22 ‘‘(B) in the case of an annuitant, be withheld

23 from the annuity of such annuitant;
14

•S 894 IS

1 ‘‘(C) in the case of a member of the uniformed

2 services described under section 9001(6)(C), be

3 withheld from the basic pay of such member; and

4 ‘‘(D) in the case of a member of the uniformed

5 services described in section 9001(6)(D), be withheld

6 from the retired pay or retainer pay payable to such

7 member.

8 ‘‘(2) Withholdings to pay the charges for enrollment

9 of a qualified relative may, upon election of the sponsoring

10 individual involved, be withheld under paragraph (1) in

11 the same manner as if enrollment were for such spon12 soring individual.

13 ‘‘(3) All amounts withheld under paragraph (1) or

14 (2) shall be paid directly to the carrier.

15 ‘‘(c)(1) Any enrollee whose pay, annuity, or retired

16 or retainer pay (as referred to in subsection (b)(1)) is in17 sufficient to cover the withholding required for enrollment

18 (or who is not receiving any regular amounts from the

19 Government, as referred to in subsection (b)(1), from

20 which any such withholdings may be made) shall pay an

21 amount described under paragraph (2) (or, in the case of

22 an enrollee not receiving any regular amounts, the full

23 amount of those charges) directly to the carrier.

24 ‘‘(2) The amount referred to under paragraph (1) is

25 the amount equal to the difference between the amount
15

•S 894 IS

1 of withholding required for the enrollment and the amount

2 actually withheld.

3 ‘‘(d) Each carrier participating under this chapter

4 shall maintain all amounts received under this chapter

5 separate from all other funds.

6 ‘‘(e) Contracts under this chapter shall include appro7 priate provisions under which each carrier shall reimburse

8 the Office or other administering entity for the adminis9 trative costs incurred by the Office or such entity under

10 this chapter (such as for dispute resolution) which are al11 locable to such carrier.

12 ‘‘§ 9006. Regulations

13 ‘‘(a) The Office shall prescribe regulations necessary

14 to carry out this chapter.

15 ‘‘(b)(1) Subject to paragraph (2), the regulations of

16 the Office shall prescribe the time at which and the man17 ner and conditions under which an individual may obtain

18 long-term care insurance under this chapter.

19 ‘‘(2) The regulations prescribed under this section

20 shall provide for an open enrollment period at least once

21 each year (similar to the open enrollment period provided

22 under section 8905(f)).

23 ‘‘(c) Any regulations necessary to effect the applica24 tion and operation of this chapter with respect to an eligi25 ble individual or a qualified relative of such individual
16

•S 894 IS

1 shall be prescribed by the Office in consultation with the

2 appropriate Secretary.’’.

3 SEC. 3. EFFECTIVE DATE.

4 The amendments made by this Act shall take effect

5 on the date of enactment of this Act, except that no cov6 erage may become effective before the first calendar year

7 beginning after the expiration of the 18-month period be8 ginning on the date of enactment of this Act.

Æ