I 

111TH CONGRESS 

1ST SESSION H. R. 897 

To amend the Internal Revenue Code of 1986 to allow individuals a deduction 

for qualified long-term care insurance premiums, use of such insurance 

under cafeteria plans and flexible spending arrangements, and a credit 

for individuals with long-term care needs. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 4, 2009 

Mr. PUTNAM (for himself, Mr. COURTNEY, Mr. PAUL, Mr. SESSIONS, Mr. 

BURTON of Indiana, Mr. GRIJALVA, Ms. GRANGER, Mr. BOUSTANY, Mr. 

KENNEDY, and Mrs. BACHMANN) introduced the following bill; which was 

referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to allow individuals a deduction for qualified long-term care insurance 

premiums, use of such insurance under cafeteria plans 

and flexible spending arrangements, and a credit for 

individuals with long-term care needs. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Long-Term Care and 

5 Retirement Security Act of 2009’’. 


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

3 (a) IN GENERAL.—Part VII of subchapter B of chap4 ter 1 of the Internal Revenue Code of 1986 (relating to 

5 additional itemized deductions) is amended by redesig6 nating section 224 as section 225 and by inserting after 

7 section 223 the following new section: 

8 ‘‘SEC. 224. PREMIUMS ON QUALIFIED LONG-TERM CARE IN9 SURANCE CONTRACTS. 

10 ‘‘(a) IN GENERAL.—In the case of an individual, 

11 there shall be allowed as a deduction an amount equal to 

12 the applicable percentage of eligible long-term care pre13 miums (as defined in section 213(d)(10)) paid during the 

14 taxable year for coverage for the taxpayer and the tax15 payer’s spouse and dependents under a qualified long-term 

16 care insurance contract (as defined in section 7702B(b)). 

17 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 

18 subsection (a), the applicable percentage shall be deter19 mined in accordance with the following table: 

‘‘For taxable years beginning The applicable 

in calendar year— percentage is— 

2010 or 2011 ............................................................................... 25

2012 ............................................................................................. 35

2013 ............................................................................................. 65

2014 or thereafter ....................................................................... 100. 

20 ‘‘(c) COORDINATION WITH OTHER DEDUCTIONS.— 

21 Any amount paid by a taxpayer for any qualified long22 term care insurance contract to which subsection (a) apVerDate Nov 24 2008 00:44 Feb 08, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H897.IH H897

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1 plies shall not be taken into account in computing the 

2 amount allowable to the taxpayer as a deduction under 

3 section 162(l) or 213(a).’’. 

4 (b) LONG-TERM CARE INSURANCE PERMITTED TO

5 BE OFFERED UNDER CAFETERIA PLANS AND FLEXIBLE

6 SPENDING ARRANGEMENTS.— 

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

8 section 125(f) of such Code (defining qualified bene9 fits) is amended by inserting before the period at the 

10 end ‘‘; except that such term shall include the pay11 ment of premiums for any qualified long-term care 

12 insurance contract (as defined in section 7702B) to 

13 the extent the amount of such payment does not ex14 ceed the eligible long-term care premiums (as de15 fined in section 213(d)(10)) for such contract’’. 

16 (2) FLEXIBLE SPENDING ARRANGEMENTS.— 

17 Section 106 of such Code (relating to contributions 

18 by an employer to accident and health plans) is 

19 amended by striking subsection (c) and redesig20 nating subsections (d) and (e) as subsections (c) and 

21 (d), respectively. 

22 (c) CONFORMING AMENDMENTS.— 

23 (1) Section 62(a) of such Code is amended by 

24 inserting before the last sentence at the end the fol25 lowing new paragraph: 


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1 ‘‘(22) PREMIUMS ON QUALIFIED LONG-TERM

2 CARE INSURANCE CONTRACTS.—The deduction al3 lowed by section 224.’’. 

4 (2) Sections 223(b)(4)(B), 223(d)(4)(C), 

5 223(f)(3)(B), 3231(e)(11), 3306(b)(18), 

6 3401(a)(22), 4973(g)(1), and 4973(g)(2)(B)(i) of 

7 such Code are each amended by striking ‘‘section 

8 106(d)’’ and inserting ‘‘section 106(c)’’. 

9 (3) Section 223(c)(1)(B)(iii)(II) of such Code is 

10 amended by striking ‘‘106(e)’’ and inserting 

11 ‘‘106(d)’’. 

12 (4) Section 6041 of such Code is amended— 

13 (A) in subsection (f)(1) by striking ‘‘(as 

14 defined in section 106(c)(2))’’, and 

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

16 subsection: 

17 ‘‘(h) FLEXIBLE SPENDING ARRANGEMENT DE18 FINED.—For purposes of this section, a flexible spending 

19 arrangement is a benefit program which provides employ20 ees with coverage under which— 

21 ‘‘(1) specified incurred expenses may be reim22 bursed (subject to reimbursement maximums and 

23 other reasonable conditions), and 

24 ‘‘(2) the maximum amount of reimbursement 

25 which is reasonably available to a participant for 


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1 such coverage is less than 500 percent of the value 

2 of such coverage. 

3 In the case of an insured plan, the maximum amount rea4 sonably available shall be determined on the basis of the 

5 underlying coverage.’’. 

6 (5) The table of sections for part VII of sub7 chapter B of chapter 1 of such Code is amended by 

8 striking the last item and inserting the following 

9 new items: 

‘‘Sec. 224. Premiums on qualified long-term care insurance contracts. 

‘‘Sec. 225. Cross reference.’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2009. 

13 SEC. 3. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE 

14 NEEDS. 

15 (a) IN GENERAL.—Subpart A of part IV of sub16 chapter A of chapter 1 of the Internal Revenue Code of 

17 1986 (relating to nonrefundable personal credits) is 

18 amended by inserting after section 25D the following new 

19 section: 

20 ‘‘SEC. 25E. CREDIT FOR TAXPAYERS WITH LONG-TERM 

21 CARE NEEDS. 

22 ‘‘(a) ALLOWANCE OF CREDIT.— 

23 ‘‘(1) IN GENERAL.—There shall be allowed as a 

24 credit against the tax imposed by this chapter for 


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1 the taxable year an amount equal to the applicable 

2 credit amount multiplied by the number of applica3 ble individuals with respect to whom the taxpayer is 

4 an eligible caregiver for the taxable year. 

5 ‘‘(2) APPLICABLE CREDIT AMOUNT.—For pur6 poses of paragraph (1), the applicable credit amount 

7 shall be determined in accordance with the following 

8 table: 

‘‘For taxable years beginning The applicable 

in calendar year— credit amount is— 

2010 ............................................................................................. 1,500

2011 ............................................................................................. 2,000

2012 ............................................................................................. 2,500

2013 or thereafter ....................................................................... 3,000. 

9 ‘‘(b) LIMITATION BASED ON ADJUSTED GROSS IN10 COME.— 

11 ‘‘(1) IN GENERAL.—The amount of the credit 

12 allowable under subsection (a) shall be reduced (but 

13 not below zero) by $100 for each $1,000 (or fraction 

14 thereof) by which the taxpayer’s modified adjusted 

15 gross income exceeds the threshold amount. For 

16 purposes of the preceding sentence, the term ‘modi17 fied adjusted gross income’ means adjusted gross in18 come increased by any amount excluded from gross 

19 income under section 911, 931, or 933. 

20 ‘‘(2) THRESHOLD AMOUNT.—For purposes of 

21 paragraph (1), the term ‘threshold amount’ means— 


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1 ‘‘(A) $150,000 in the case of a joint re2 turn, and 

3 ‘‘(B) $75,000 in any other case. 

4 ‘‘(3) INDEXING.—In the case of any taxable 

5 year beginning in a calendar year after 2010, each 

6 dollar amount contained in paragraph (2) shall be 

7 increased by an amount equal to the product of— 

8 ‘‘(A) such dollar amount, and 

9 ‘‘(B) the medical care cost adjustment de10 termined under section 213(d)(10)(B)(ii) for 

11 the calendar year in which the taxable year be12 gins, determined by substituting ‘August 2009’ 

13 for ‘August 1996’ in subclause (II) thereof. 

14 If any increase determined under the preceding sen15 tence is not a multiple of $50, such increase shall 

16 be rounded to the next lowest multiple of $50. 

17 ‘‘(c) DEFINITIONS.—For purposes of this section— 

18 ‘‘(1) APPLICABLE INDIVIDUAL.— 

19 ‘‘(A) IN GENERAL.—The term ‘applicable 

20 individual’ means, with respect to any taxable 

21 year, any individual who has been certified, be22 fore the due date for filing the return of tax for 

23 the taxable year (without extensions), by a phy24 sician (as defined in section 1861(r)(1) of the 

25 Social Security Act) as being an individual with 


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1 long-term care needs described in subparagraph 

2 (B) for a period— 

3 ‘‘(i) which is at least 180 consecutive 

4 days, and 

5 ‘‘(ii) a portion of which occurs within 

6 the taxable year. 

7 Notwithstanding the preceding sentence, a cer8 tification shall not be treated as valid unless it 

is made within the 391 9 ⁄2 month period ending 

10 on such due date (or such other period as the 

11 Secretary prescribes). 

12 ‘‘(B) INDIVIDUALS WITH LONG-TERM CARE

13 NEEDS.—An individual is described in this sub14 paragraph if the individual meets any of the fol15 lowing requirements: 

16 ‘‘(i) The individual is at least 6 years 

17 of age and— 

18 ‘‘(I) is unable to perform (with19 out substantial assistance from an20 other individual) at least 3 activities 

21 of daily living (as defined in section 

22 7702B(c)(2)(B)) due to a loss of 

23 functional capacity, or 

24 ‘‘(II) requires substantial super25 vision to protect such individual from 


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1 threats to health and safety due to se2 vere cognitive impairment and is un3 able to perform, without reminding or 

4 cuing assistance, at least 1 activity of 

5 daily living (as so defined) or to the 

6 extent provided in regulations pre7 scribed by the Secretary (in consulta8 tion with the Secretary of Health and 

9 Human Services), is unable to engage 

10 in age appropriate activities. 

11 ‘‘(ii) The individual is at least 2 but 

12 not 6 years of age and is unable due to a 

13 loss of functional capacity to perform 

14 (without substantial assistance from an15 other individual) at least 2 of the following 

16 activities: eating, transferring, or mobility. 

17 ‘‘(iii) The individual is under 2 years 

18 of age and requires specific durable med19 ical equipment by reason of a severe health 

20 condition or requires a skilled practitioner 

21 trained to address the individual’s condi22 tion to be available if the individual’s par23 ents or guardians are absent. 

24 ‘‘(2) ELIGIBLE CAREGIVER.— 


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1 ‘‘(A) IN GENERAL.—A taxpayer shall be 

2 treated as an eligible caregiver for any taxable 

3 year with respect to the following individuals: 

4 ‘‘(i) The taxpayer. 

5 ‘‘(ii) The taxpayer’s spouse. 

6 ‘‘(iii) An individual with respect to 

7 whom the taxpayer is allowed a deduction 

8 under section 151(c) for the taxable year. 

9 ‘‘(iv) An individual who would be de10 scribed in clause (iii) for the taxable year 

11 if section 151(c) were applied by sub12 stituting for the exemption amount an 

13 amount equal to the sum of the exemption 

14 amount, the standard deduction under sec15 tion 63(c)(2)(C), and any additional stand16 ard deduction under section 63(c)(3) which 

17 would be applicable to the individual if 

18 clause (iii) applied. 

19 ‘‘(v) An individual who would be de20 scribed in clause (iii) for the taxable year 

21 if— 

22 ‘‘(I) the requirements of clause 

23 (iv) are met with respect to the indi24 vidual, and 


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1 ‘‘(II) the requirements of sub2 paragraph (B) are met with respect to 

3 the individual in lieu of the support 

4 test under subsection (c)(1)(D) or 

5 (d)(1)(C) of section 152. 

6 ‘‘(B) RESIDENCY TEST.—The require7 ments of this subparagraph are met if an indi8 vidual has as his principal place of abode the 

9 home of the taxpayer and— 

10 ‘‘(i) in the case of an individual who 

11 is an ancestor or descendant of the tax12 payer or the taxpayer’s spouse, is a mem13 ber of the taxpayer’s household for over 

14 half the taxable year, or 

15 ‘‘(ii) in the case of any other indi16 vidual, is a member of the taxpayer’s 

17 household for the entire taxable year. 

18 ‘‘(C) SPECIAL RULES WHERE MORE THAN

19 1 ELIGIBLE CAREGIVER.— 

20 ‘‘(i) IN GENERAL.—If more than 1 in21 dividual is an eligible caregiver with re22 spect to the same applicable individual for 

23 taxable years ending with or within the 

24 same calendar year, a taxpayer shall be 

25 treated as the eligible caregiver if each 


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1 such individual (other than the taxpayer) 

2 files a written declaration (in such form 

3 and manner as the Secretary may pre4 scribe) that such individual will not claim 

5 such applicable individual for the credit 

6 under this section. 

7 ‘‘(ii) NO AGREEMENT.—If each indi8 vidual required under clause (i) to file a 

9 written declaration under clause (i) does 

10 not do so, the individual with the highest 

11 adjusted gross income shall be treated as 

12 the eligible caregiver. 

13 ‘‘(iii) MARRIED INDIVIDUALS FILING

14 SEPARATELY.—In the case of married indi15 viduals filing separately, the determination 

16 under this subparagraph as to whether the 

17 husband or wife is the eligible caregiver 

18 shall be made under the rules of clause (ii) 

19 (whether or not one of them has filed a 

20 written declaration under clause (i)). 

21 ‘‘(d) IDENTIFICATION REQUIREMENT.—No credit 

22 shall be allowed under this section to a taxpayer with re23 spect to any applicable individual unless the taxpayer in24 cludes the name and taxpayer identification number of 

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1 sician certifying such individual, on the return of tax for 

2 the taxable year. 

3 ‘‘(e) TAXABLE YEAR MUST BE FULL TAXABLE

4 YEAR.—Except in the case of a taxable year closed by rea5 son of the death of the taxpayer, no credit shall be allow6 able under this section in the case of a taxable year cov7 ering a period of less than 12 months.’’. 

8 (b) CONFORMING AMENDMENTS.— 

9 (1) Section 6213(g)(2) of such Code is amend10 ed by striking ‘‘and’’ at the end of subparagraph 

11 (L), by striking the period at the end of subpara12 graph (M) and inserting ‘‘, and’’, and by inserting 

13 after subparagraph (M) the following new subpara14 graph: 

15 ‘‘(N) an omission of a correct TIN or phy16 sician identification required under section 

17 25E(d) (relating to credit for taxpayers with 

18 long-term care needs) to be included on a re19 turn.’’. 

20 (2) The table of sections for subpart A of part 

21 IV of subchapter A of chapter 1 of such Code is 

22 amended by inserting after the item relating to sec23 tion 25D the following new item: 

‘‘Sec. 25E. Credit for taxpayers with long-term care needs.’’. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2009. 

4 SEC. 4. ADDITIONAL CONSUMER PROTECTIONS FOR LONG5 TERM CARE INSURANCE. 

6 (a) ADDITIONAL PROTECTIONS APPLICABLE TO

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

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

9 of 1986 (relating to requirements of model regulation and 

10 Act) are amended to read as follows: 

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

12 this paragraph are met with respect to any con13 tract if such contract meets— 

14 ‘‘(i) MODEL REGULATION.—The fol15 lowing requirements of the model regula16 tion: 

17 ‘‘(I) Section 6A (relating to guar18 anteed renewal or noncancellability), 

19 other than paragraph (5) thereof, and 

20 the requirements of section 6B of the 

21 model Act relating to such section 6A. 

22 ‘‘(II) Section 6B (relating to pro23 hibitions on limitations and exclu24 sions) other than paragraph (7) there25 of. 


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1 ‘‘(III) Section 6C (relating to ex2 tension of benefits). 

3 ‘‘(IV) Section 6D (relating to 

4 continuation or conversion of cov5 erage). 

6 ‘‘(V) Section 6E (relating to dis7 continuance and replacement of poli8 cies). 

9 ‘‘(VI) Section 7 (relating to unin10 tentional lapse). 

11 ‘‘(VII) Section 8 (relating to dis12 closure), other than sections 8F, 8G, 

13 8H, and 8I thereof. 

14 ‘‘(VIII) Section 11 (relating to 

15 prohibitions against post-claims un16 derwriting). 

17 ‘‘(IX) Section 12 (relating to 

18 minimum standards). 

19 ‘‘(X) Section 13 (relating to re20 quirement to offer inflation protec21 tion). 

22 ‘‘(XI) Section 25 (relating to pro23 hibition against preexisting conditions 

24 and probationary periods in replace25 ment policies or certificates). 


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1 ‘‘(XII) The provisions of section 

2 26 relating to contingent nonforfeiture 

3 benefits, if the policyholder declines 

4 the offer of a nonforfeiture provision 

5 described in paragraph (4). 

6 ‘‘(ii) MODEL ACT.—The following re7 quirements of the model Act: 

8 ‘‘(I) Section 6C (relating to pre9 existing conditions). 

10 ‘‘(II) Section 6D (relating to 

11 prior hospitalization). 

12 ‘‘(III) The provisions of section 8 

13 relating to contingent nonforfeiture 

14 benefits, if the policyholder declines 

15 the offer of a nonforfeiture provision 

16 described in paragraph (4). 

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

18 paragraph— 

19 ‘‘(i) MODEL PROVISIONS.—The terms 

20 ‘model regulation’ and ‘model Act’ mean 

21 the long-term care insurance model regula22 tion, and the long-term care insurance 

23 model Act, respectively, promulgated by 

24 the National Association of Insurance 


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1 Commissioners (as adopted as of December 

2 31, 2008). 

3 ‘‘(ii) COORDINATION.—Any provision 

4 of the model regulation or model Act listed 

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

6 (A) shall be treated as including any other 

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

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

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

13 Act has been met shall be made by the 

14 Secretary.’’. 

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

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

17 to requirements of model provisions) is amended to read 

18 as follows: 

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

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

21 requirements of the model regulation must be 

22 met: 

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

24 disclosure of rating practices to consumer). 


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

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

4 requirements). 

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

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

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

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

11 23C. 

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

14 ‘‘(vii) Section 29 (relating to standard 

15 format outline of coverage). 

16 ‘‘(viii) Section 30 (relating to require17 ment to deliver shopper’s guide). 

18 The requirements referred to in clause (vi) shall 

19 not include those portions of the personal work20 sheet described in Appendix B relating to con21 sumer protection requirements not imposed by 

22 section 4980C or 7702B. 

23 ‘‘(B) MODEL ACT.—The following require24 ments of the model Act must be met: 


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

2 return). 

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

4 coverage). 

5 ‘‘(iii) Section 6H (relating to require6 ments for certificates under group plans). 

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

8 summary). 

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

10 reports on accelerated death benefits). 

11 ‘‘(vi) Section 7 (relating to incontest12 ability period). 

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

14 paragraph, the terms ‘model regulation’ and 

15 ‘model Act’ have the meanings given such terms 

16 by section 7702B(g)(2)(B).’’. 

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

18 this section shall apply to policies issued after December 

19 31, 2009. 

Æ 


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