I 

111TH CONGRESS 

2D SESSION H. R. 5853 

To amend title XXXII of the Public Health Service Act to require review 

and approval by law prior to collection of premiums under the CLASS 

program, to require notice to individuals prior to enrollment, and to 

require termination of the program in the event of actuarial unsoundness, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 26, 2010 

Mr. BOUSTANY introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on 

Rules, 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 XXXII of the Public Health Service Act 

to require review and approval by law prior to collection 

of premiums under the CLASS program, to require notice to individuals prior to enrollment, and to require 

termination of the program in the event of actuarial 

unsoundness, 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Fiscal Responsibility 

3 and Retirement Security Act’’. 

4 SEC. 2. REVIEW AND APPROVAL BY LAW OF DESIGNATION 

5 OF CLASS INDEPENDENCE BENEFIT PLAN. 

6 Title XXXII of the Public Health Service Act, as 

7 added by section 8002(a) of the Patient Protection and 

8 Affordable Care Act (Public Law 111–148), is amended— 

9 (1) in section 3203(a)— 

10 (A) in paragraph (3), in the second sen11 tence, by inserting ‘‘and shall submit to Con12 gress a report containing such designation, de13 tails, and reasons’’ after ‘‘public comment’’; and 

14 (B) by adding at the end the following new 

15 paragraph: 

16 ‘‘(4) APPROVAL BY LAW OF DESIGNATION.—No 

17 premiums may be deducted from an individual’s 

18 wages or otherwise collected under section 3204(e) 

19 unless there is enacted into law, in accordance with 

20 section 3211(a), a joint resolution approving the 

21 designation of the CLASS Independence Benefit 

22 Plan by the Secretary under paragraph (3).’’; and 

23 (2) by adding at the end the following new sec24 tion: 


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1 ‘‘SEC. 3211. PROCEDURAL REQUIREMENTS FOR APPROVAL 

2 BY LAW OF DESIGNATION OF CLASS INDE3 PENDENCE BENEFIT PLAN. 

4 ‘‘(a) IN GENERAL.—For purposes of paragraph (4) 

5 of section 3203(a), the following shall apply: 

6 ‘‘(1) RECEIPT OF REPORTS.—It shall not be in 

7 order in the Senate or in the House of Representa8 tives to consider a joint resolution described in such 

9 paragraph unless the Senate or the House of Rep10 resentatives, respectively, has received, not fewer 

11 than 60 days prior to such consideration— 

12 ‘‘(A) the report of the Secretary described 

13 in section 3203(a)(3); and 

14 ‘‘(B) the report of the Chief Actuary of the 

15 Centers for Medicare & Medicaid Services de16 scribed in paragraph (2). 

17 ‘‘(2) REPORT OF CMS CHIEF ACTUARY.—Not 

18 later than 60 days after the Secretary designates the 

19 CLASS Independence Benefit Plan under section 

20 3203(a)(3), the Chief Actuary of the Centers for 

21 Medicare & Medicaid Services shall submit to Con22 gress a report on the long-term actuarial soundness 

23 of the CLASS Independence Benefit Plan. Such re24 port shall include— 

25 ‘‘(A) an estimate of the average premium 

26 per enrollee per year that will be required to enVerDate Mar 15 2010 04:29 Jul 27, 2010 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5853.IH H5853

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1 sure that the CLASS Independence Fund will 

2 be actuarially sound over the 75-year period be3 ginning with the fiscal year in which such re4 port is submitted; and 

5 ‘‘(B) an estimate of the average amount of 

6 benefits that will be paid per enrollee per year 

7 over such period. 

8 ‘‘(3) JOINT RESOLUTION DEFINED.—The term 

9 ‘joint resolution’ means only a joint resolution, the 

10 matter after the resolving clause of which is as fol11 lows: ‘That Congress approves of the CLASS Inde12 pendence Benefit Plan designated by the Secretary 

13 of Health and Human Services under section 

14 3203(a)(3) of the Public Health Service Act.’. Such 

15 term does not include a resolution that specifies 

16 more than one action. 

17 ‘‘(b) EXERCISE OF THE RULEMAKING POWER OF

18 EACH HOUSE.—Subsection (a) is enacted by Congress— 

19 ‘‘(1) as an exercise of the rulemaking power of 

20 the Senate and the House of Representatives, re21 spectively, and is deemed to be part of the rules of 

22 each House, respectively, but applicable only with re23 spect to the procedure to be followed in that House 

24 in the case of a joint resolution under such subVerDate Mar 15 2010 04:29 Jul 27, 2010 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5853.IH H5853

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1 section, and it supersedes other rules only to the ex2 tent that it is inconsistent with such rules; and 

3 ‘‘(2) with full recognition of the constitutional 

4 right of either House to change the rules (so far as 

5 they relate to the procedure of that House) at any 

6 time, in the same manner, and to the same extent 

7 as in the case of any other rule of that House.’’. 

8 SEC. 3. REQUIRED NOTICE PRIOR TO ENROLLMENT. 

9 Section 3204(a) of the Public Health Service Act, as 

10 added by section 8002(a) of the Patient Protection and 

11 Affordable Care Act (Public Law 111–148), is amended 

12 by adding at the end the following new paragraph: 

13 ‘‘(4) REQUIRED NOTICE PRIOR TO ENROLL14 MENT.— 

15 ‘‘(A) IN GENERAL.—An employer may not 

16 enroll an employee in the CLASS program 

17 under paragraph (1) unless, prior to enrolling 

18 the employee, the employer— 

19 ‘‘(i) has provided to the employee the 

20 exact statements described in subpara21 graph (C) in a single written notice that 

22 displays such statements in the order in 

23 which they are set forth in such subpara24 graph; and 


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1 ‘‘(ii) certifies to the Secretary that the 

2 individual has received such notice. 

3 ‘‘(B) ENROLLMENT OTHER THAN BY EM4 PLOYER.—In the case of an individual seeking 

5 to enroll in the CLASS program other than 

6 through enrollment by the individual’s employer 

7 under paragraph (1), the Secretary shall not 

8 permit the individual to enroll unless, prior to 

9 the individual’s enrollment, the Secretary has 

10 provided to the individual the exact statements 

11 described in subparagraph (C) in a single writ12 ten notice that displays such statements in the 

13 order in which they are set forth in such sub14 paragraph and the individual has acknowledged 

15 in writing the receipt of such notice. 

16 ‘‘(C) STATEMENTS DESCRIBED.—The 

17 statements described in this subparagraph are 

18 the following: 

19 ‘‘(i) The Chief Actuary of the Centers 

20 for Medicare & Medicaid Services made the 

21 following assessment in April 2010 regard22 ing the CLASS program: ‘In general, vol23 untary, unsubsidized, and non-under24 written insurance programs such as 

25 CLASS face a significant risk of failure as 


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1 a result of adverse selection by partici2 pants. Individuals with health problems or 

3 who anticipate a greater risk of functional 

4 limitation would be more likely to partici5 pate than those in better-than-average 

6 health. . . . [T]here is a very serious risk 

7 that the problem of adverse selection will 

8 make the CLASS program unsustainable.’. 

9 ‘‘(ii) The Chief Actuary estimated in 

10 April 2010 that the CLASS program will 

11 likely begin to run deficits in 2025 and 

12 continue to run deficits thereafter. 

13 ‘‘(iii) The Chief Actuary further esti14 mated in April 2010 that an initial average 

15 premium level of about $240 per month 

16 would be required to adequately fund 

17 CLASS program costs. 

18 ‘‘(iv) The Federal Government will 

19 collect more than $70 billion in CLASS 

20 program premiums from 2012 through 

21 2019, according to an estimate of the Con22 gressional Budget Office in March 2010. 

23 Although these premiums are credited as 

24 IOUs or United States Government securi25 ties in a ‘CLASS Independence Fund,’ the 


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1 money, itself, is used to pay for other Gov2 ernment expenses, including other pro3 grams under the health care law enacted in 

4 March 2010 that are unrelated to the 

5 CLASS program. There is no separate pool 

6 of money set aside to pay CLASS program 

7 benefits, and workers and retirees could be 

8 required to repay these IOUs in the form 

9 of higher taxes. 

10 ‘‘(v) Under section 3212 of the Public 

11 Health Service Act, the CLASS program 

12 will terminate immediately if an annual re13 port of the Board of Trustees of the Class 

14 Independence Fund indicates that the 

15 CLASS program will not be actuarially 

16 sound over the 75-year period beginning 

17 with the fiscal year in which the report is 

18 submitted.’’. 

19 SEC. 4. NO COLLECTION OF PREMIUMS PENDING PROMUL20 GATION OF FINAL REGULATIONS. 

21 Section 3208(c) of the Public Health Service Act, as 

22 added by section 8002(a) of the Patient Protection and 

23 Affordable Care Act (Public Law 111–148), is amended— 

24 (1) by striking ‘‘The Secretary’’ and inserting 

25 the following: 


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1 ‘‘(1) IN GENERAL.—The Secretary’’; and 

2 (2) by adding at the end the following new 

3 paragraph: 

4 ‘‘(2) NO COLLECTION OF PREMIUMS PENDING

5 PROMULGATION OF FINAL REGULATIONS.—No pre6 miums may be deducted from an individual’s wages 

7 or otherwise collected under section 3204(e) before 

8 the Secretary has promulgated, in final form— 

9 ‘‘(A) the regulations described in section 

10 3202(6)(C); 

11 ‘‘(B) the rule described in section 

12 3203(a)(3); and 

13 ‘‘(C) the regulations described in para14 graph (1).’’. 

15 SEC. 5. TERMINATION OF PROGRAM IF CLASS INDEPEND16 ENCE FUND ACTUARIALLY UNSOUND. 

17 Title XXXII of the Public Health Service Act, as 

18 amended by section 2, is further amended by adding at 

19 the end the following new section: 

20 ‘‘SEC. 3212. TERMINATION OF PROGRAM IF CLASS INDE21 PENDENCE FUND ACTUARIALLY UNSOUND. 

22 ‘‘(a) IN GENERAL.—If the Board of Trustees of the 

23 CLASS Independence Fund submits to Congress the re24 port described in subsection (b) (relating to the actuarial 

25 unsoundness of the CLASS Independence Fund)— 


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1 ‘‘(1) no individual shall be enrolled under sec2 tion 3204(a) in the CLASS program after the date 

3 of the submission of the report; 

4 ‘‘(2) no premiums shall be deducted from an in5 dividual’s wages or otherwise collected under section 

6 3204(e) after such date; 

7 ‘‘(3) no benefits shall be provided under section 

8 3205(c) after such date; 

9 ‘‘(4) the Secretary shall refund any amount re10 maining in the CLASS Independence Fund (estab11 lished under section 3206(a)) on such date, accord12 ing to the process described in subsection (c), and 

13 send notification to the Secretary of the Treasury 

14 when the refund is complete; 

15 ‘‘(5) in the case of notification under paragraph 

16 (4), the CLASS Independence Fund and the Board 

17 of Trustees of the CLASS Independence Fund (es18 tablished under section 3206(c)(1)) shall be abol19 ished as of the date of such notification; 

20 ‘‘(6) the CLASS Independence Advisory Council 

21 (established under section 3207(a)) is abolished as 

22 of the date of the submission of the report; 

23 ‘‘(7) the Secretary shall take such other steps 

24 as the Secretary considers necessary to terminate 

25 the CLASS program; 


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1 ‘‘(8) in lieu of the annual report required by 

2 section 3208(d), the Secretary shall submit to Con3 gress a quarterly report on the status of the termi4 nation of the CLASS program in accordance with 

5 this section, until such time as the Secretary indi6 cates in such a report that the program has been 

7 completely terminated; and 

8 ‘‘(9) in lieu of the annual report required by 

9 section 3209, the Inspector General of the Depart10 ment of Health and Human Services shall submit to 

11 Congress a quarterly report on the Secretary’s 

12 progress in terminating the CLASS program in ac13 cordance with this section, including the existence of 

14 any waste, fraud, or abuse in connection with the 

15 termination activities, until such time as the Inspec16 tor General indicates in such a report that the pro17 gram has been completely terminated. 

18 ‘‘(b) REPORT OF UNSOUNDNESS.—The report de19 scribed in this subsection is a report under subparagraph 

20 (A)(ii) of section 3206(c)(2) that contains a statement de21 scribed in subparagraph (B)(i)(III) of such section that 

22 indicates that the CLASS Independence Fund is projected 

23 to be actuarially unsound over the 75-year period begin24 ning with the fiscal year in which such report is submitted. 


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1 ‘‘(c) REFUND OF AMOUNT IN CLASS INDEPEND2 ENCE FUND.—The refund process described in this sub3 section is the following: 

4 ‘‘(1) IN GENERAL.—Not later than 180 days 

5 after the date of the submission of the report de6 scribed in subsection (b), subject to paragraph (2), 

7 the Secretary shall pay to each individual enrolled in 

8 the CLASS program on the date of the submission 

9 of such report an amount from the CLASS Inde10 pendence Fund equal to the difference of— 

11 ‘‘(A) the total amount such respective indi12 vidual paid in premiums as of such date under 

13 the CLASS program; and 

14 ‘‘(B) the lesser of— 

15 ‘‘(i) the total amount of benefits de16 scribed in section 3205(b) received as of 

17 such date by such individual under the 

18 program; or 

19 ‘‘(ii) the amount described in subpara20 graph (A). 

21 ‘‘(2) INSUFFICIENT OR EXCESS FUNDS.— 

22 ‘‘(A) INSUFFICIENT FUNDS.—If the 

23 amount remaining in the CLASS Independence 

24 Fund on the date of the submission of the re25 port described in subsection (b) is insufficient 


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1 to make the refund described in paragraph (1), 

2 the Secretary shall pay to each individual en3 rolled in the CLASS program on such date an 

4 amount that bears the same ratio to the 

5 amount remaining in the CLASS Independence 

6 Fund on such date as the amount determined 

7 under such paragraph for such respective indi8 vidual bears to the sum obtained by adding 

9 each amount obtained by applying such para10 graph to each such individual. 

11 ‘‘(B) EXCESS FUNDS.—If an amount re12 mains in the CLASS Independence Fund after 

13 the Secretary makes the refund described in 

14 paragraph (1), such amount shall be trans15 ferred to the general fund of the Treasury. 

16 ‘‘(d) FUNDS IN LIFE INDEPENDENCE ACCOUNTS RE17 TAINED BY ENROLLEES.—Notwithstanding the termi18 nation of the CLASS program under subsection (a), an 

19 individual who has funds remaining in a Life Independ20 ence Account established by the Secretary for such indi21 vidual under subparagraph (A) of section 3205(c)(1) may 

22 continue to use such funds for the purposes described in 

23 subparagraph (B) of such section.’’. 


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1 SEC. 6. CONFORMING AMENDMENTS. 

2 Title XXXII of the Public Health Service Act, as 

3 amended by sections 2 and 5, is further amended— 

4 (1) in section 3204— 

5 (A) in subsection (a)(1), by striking ‘‘para6 graph (2)’’ and inserting ‘‘paragraphs (2) and 

7 (4)’’; and 

8 (B) in subsection (e)— 

9 (i) in paragraph (1), by striking ‘‘An 

10 amount’’ and inserting ‘‘Subject to sections 

11 3203(a)(4), 3208(c)(2), and 3212(a)(2), 

12 an amount’’; and 

13 (ii) in paragraph (2), by striking ‘‘The 

14 Secretary’’ and inserting ‘‘Subject to sec15 tions 3203(a)(4), 3208(c)(2), and 

16 3212(a)(2), the Secretary’’; 

17 (2) in section 3208(d), in the first sentence, by 

18 striking ‘‘Beginning January 1’’ and inserting ‘‘Sub19 ject to section 3212(a)(8), beginning January 1’’; 

20 and 

21 (3) in section 3209, in the first sentence, by 

22 striking ‘‘The Inspector General’’ and inserting 

23 ‘‘Subject to section 3212(a)(9), the Inspector Gen24 eral’’. 

Æ 


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