II

106TH CONGRESS

2D SESSION S. 2218

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 members of the uniformed

services, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 8, 2000

Mr. CLELAND (for himself, Ms. MIKULSKI, Mr. GRASSLEY, Mr. AKAKA, Mr.

WARNER, Mr. SARBANES, and Mr. ROBB) 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 members of the uniformed services, 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 Employees and

5 Uniformed Services Group Long-Term Care Insurance

6 Act of 2000’’.
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1 SEC. 2. LONG-TERM CARE INSURANCE.

2 (a) IN GENERAL.—Subpart G of part III of title 5,

3 United States Code, is amended by adding at the end the

4 following:

5 ‘‘CHAPTER 90—LONG-TERM CARE

6 INSURANCE

‘‘Sec.

‘‘9001. Definitions.

‘‘9002. Eligibility to obtain coverage.

‘‘9003. Contracting authority.

‘‘9004. Long-term care benefits.

‘‘9005. Financing.

‘‘9006. Preemption.

‘‘9007. Studies, reports, and audits.

‘‘9008. Claims for benefits.

‘‘9009. Jurisdiction of courts.

‘‘9010. Regulations.

7 ‘‘§ 9001. Definitions

8 ‘‘For purposes of this chapter, the term—

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

10 ‘‘(A) eating;

11 ‘‘(B) toileting;

12 ‘‘(C) transferring;

13 ‘‘(D) bathing;

14 ‘‘(E) dressing; and

15 ‘‘(F) continence;

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

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

18 such paragraph, the term ‘employee’ were considered

19 to have the meaning under paragraph (5) of this

20 section;
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1 ‘‘(3) ‘appropriate Secretary’ means—

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

3 paragraph, the Secretary of Defense;

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

5 Coast Guard when it is not operating as a serv6 ice of the Navy, the Secretary of Transpor7 tation;

8 ‘‘(C) with respect to the commissioned

9 corps of the National Oceanic and Atmospheric

10 Administration, the Secretary of Commerce;

11 and

12 ‘‘(D) with respect to the commissioned

13 corps of the Public Health Service, the Sec14 retary of Health and Human Services;

15 ‘‘(4) ‘eligible individual’ means—

16 ‘‘(A) an annuitant, employee, member of

17 the uniformed services, or retired member of

18 the uniformed services; or

19 ‘‘(B) a qualified relative of an individual

20 described under subparagraph (A);

21 ‘‘(5) ‘employee’ means—

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

23 8901(1) (A) through (D) and (F) through (I),

24 but does not include an employee excluded by

25 regulation of the Office under section 9010; and
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1 ‘‘(B) an individual described under section

2 2105(e);

3 ‘‘(6) ‘member of the uniformed services’ means

4 a person who—

5 ‘‘(A)(i) is a member of the uniformed serv6 ices on active duty for a period of more than 30

7 days; or

8 ‘‘(ii) is a member of the Selected Reserve

9 as defined under section 10143 of title 10, in10 cluding members on—

11 ‘‘(I) full-time National Guard duty as

12 defined under section 101(d)(5) of title 10;

13 or

14 ‘‘(II) active Guard and Reserve duty

15 as defined under section 101(d)(6) of title

16 10; and

17 ‘‘(B) satisfies such eligibility requirements

18 as the Office prescribes under section 9010;

19 ‘‘(7) ‘Office’ means the Office of Personnel

20 Management;

21 ‘‘(8) ‘qualified carrier’ means a company or

22 consortium licensed and approved to issue group

23 long-term care insurance in all States and to do

24 business in each of the States;
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1 ‘‘(9) ‘qualified relative’, as used with respect to

2 an eligible individual described under paragraph

3 (4)(A), means—

4 ‘‘(A) the spouse of such individual;

5 ‘‘(B) a parent or parent-in-law of such in6 dividual; and

7 ‘‘(C) any other person bearing a relation8 ship to such individual specified by the Office in

9 regulations;

10 ‘‘(10) ‘retired member of the uniformed serv11 ices’ means a member of the uniformed services enti12 tled to retired or retainer pay (other than under

13 chapter 1223 of title 10) who satisfies such eligi14 bility requirements as the Office prescribes under

15 section 9010; and

16 ‘‘(11) ‘State’ means a State of the United

17 States, and includes the District of Columbia.

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) As a condition for obtaining long-term care in23 surance coverage under this chapter based on one’s status

24 as a qualified relative, an applicant shall provide docu-
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1 mentation to demonstrate the relationship as prescribed

2 by the Office.

3 ‘‘(c) An individual shall not be eligible for coverage

4 under this chapter if the individual would be immediately

5 eligible to receive benefits upon obtaining coverage.

6 ‘‘§ 9003. Contracting authority

7 ‘‘(a)(1) Without regard to section 3709 of the Re8 vised Statutes (41 U.S.C. 5) or any other statute requiring

9 competitive bidding, the Office may contract with qualified

10 carriers for a policy or policies of group long-term care

11 insurance to provide benefits as specified by this chapter.

12 ‘‘(2) The Office shall—

13 ‘‘(A) contract with—

14 ‘‘(i) a primary carrier with respect to as15 sumption of risk;

16 ‘‘(ii) no less than 2 qualified carriers to act

17 as reinsurers; and

18 ‘‘(iii) as many qualified carriers as nec19 essary to administer this chapter, which shall

20 also act as reinsurers; and

21 ‘‘(B) ensure that each resulting contract is

22 awarded on the basis of contractor qualifications,

23 price, and reasonable competition to the maximum

24 extent practicable.
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1 ‘‘(b) The Office may design a benefits package or

2 packages and negotiate final offerings with qualified car3 riers.

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

5 a detailed statement of the benefits offered (including any

6 maximums, limitations, exclusions, and other definitions

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

8 or other conditions on any subsequent adjustment), and

9 such other terms and conditions as may be mutually

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

11 with the requirements of this chapter.

12 ‘‘(d) Premium rates charged under a contract entered

13 into under this section shall reasonably reflect the cost of

14 the benefits provided under that contract as determined

15 by the Office.

16 ‘‘(e) The coverage and benefits made available to in17 dividuals under a contract entered into under this section

18 shall be guaranteed to be renewable and may not be can19 celed by the carrier except for nonpayment of premium.

20 ‘‘(f) The Office may withdraw an offering under this

21 section based on open season participation rates, the com22 position of the risk pool, or both.

23 ‘‘(g)(1) Each contract under this section shall require

24 the carrier to provide insurance, payments, or benefits in

25 an individual case if the Office (or a duly designated third-
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1 party) finds that the individual involved is entitled to such

2 payment or benefit under the contract.

3 ‘‘(2) Each contract with a carrier described under

4 subsection (a)(2)(A)(ii) shall require the carrier to partici5 pate in administrative procedures designed to bring about

6 the expeditious resolution of disputes arising under such

7 contract, including, in appropriate circumstances, 1 or

8 more alternative means of dispute resolution, as pre9 scribed by the Office.

10 ‘‘(h)(1)(A) Subject to subparagraph (B), each con11 tract under this section shall be for a term of 5 years,

12 unless terminated earlier by the Office.

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

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

15 third-party) under any such contract shall continue until

16 the termination of coverage of the enrolled individual.

17 ‘‘(2) Group long-term care insurance coverage ob18 tained by an individual under this chapter shall terminate

19 only upon the occurrence of—

20 ‘‘(A) the death of the insured;

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

22 under the contract; or

23 ‘‘(C) any event justifying a cancellation under

24 subsection (e).
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1 ‘‘(3) Subject to paragraph (2), each contract under

2 this section shall include such provisions as may be nec3 essary and consistent with regulations of the Office under

4 section 9010, to—

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

6 responsibilities under such contract notwithstanding

7 the termination of such contract (whether due to

8 nonrenewal under paragraph (1)(A) or otherwise);

9 and

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

11 duly enrolled, long-term care insurance coverage ob12 tained by such individual under that enrollment shall

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

14 described under section 9001(4)), such as separation

15 from Government service or the uniformed services,

16 or ceasing to meet the requirements for being con17 sidered a qualified relative (whether due to divorce

18 or otherwise).

19 ‘‘(i) Nothing in this chapter may be construed to

20 grant authority for the Office or a third party to change

21 the rules under which the contract operates for disputed

22 claims purposes.

23 ‘‘§ 9004. Long-term care benefits

24 ‘‘(a) Benefits under this chapter shall be—
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1 ‘‘(1) provided under qualified long-term care in2 surance contracts, within the meaning of section

3 7702B of the Internal Revenue Code of 1986; and

4 ‘‘(2) to the extent determined appropriate by

5 the Office, consistent with the more stringent of—

6 ‘‘(A) the most recent standards rec7 ommended by the National Association of In8 surance Commissioners; or

9 ‘‘(B) such standards as recommended in

10 calendar year 1993.

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

12 to any matter otherwise required under this chapter, shall

13 provide for—

14 ‘‘(1) adequate consumer protections (including

15 through establishment of sufficient reserves or rein16 surance);

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

18 bankruptcy (or other similar event);

19 ‘‘(3) availability of benefits upon appropriate

20 certification as to an individual’s—

21 ‘‘(A) inability (without substantial assist22 ance from another individual) to perform at

23 least 2 activities of daily living for a period of

24 at least 90 days due to a loss of functional ca25 pacity; or
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1 ‘‘(B) requiring substantial supervision to

2 protect such individual from threats to health

3 and safety due to severe cognitive impairment

4 as defined in the contract;

5 ‘‘(4) choice of service benefits (such as the ex6 pense-incurred method or the indemnity method);

7 ‘‘(5) the availability of inflation protection;

8 ‘‘(6) portability of benefits (consistent with sec9 tion 9003 (e) and (h));

10 ‘‘(7) length-of-benefit options;

11 ‘‘(8) options relating to long-term care benefits

12 designed to provide maximum flexibility regarding

13 care modalities, including nursing home care, as14 sisted living care, home care, and care by family

15 members;

16 ‘‘(9) options relating to elimination periods; and

17 ‘‘(10) options relating to nonforfeiture benefits.

18 ‘‘§ 9005. Financing

19 ‘‘(a) Each individual having long-term care insurance

20 coverage under this chapter shall be responsible for 100

21 percent of the charges for such coverage.

22 ‘‘(b) The amount necessary to pay the premium for

23 enrollment shall—

24 ‘‘(1) in the case of an employee, be withheld

25 from the pay of such employee;
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1 ‘‘(2) in the case of an annuitant, be withheld

2 from the annuity of such annuitant;

3 ‘‘(3) in the case of a member of the uniformed

4 services described under section 9001(6), be with5 held from the basic pay of such member; and

6 ‘‘(4) in the case of a retired member of the uni7 formed services described in section 9001(10), be

8 withheld from the retired pay or retainer pay pay9 able to such member.

10 ‘‘(c) Withholdings to pay the charges for enrollment

11 of a qualified relative may, upon election of the eligible

12 individual related to the qualified relative, be withheld

13 under subsection (b) in the same manner as if enrollment

14 were for such eligible individual.

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

16 retainer pay (as referred to in subsection (b)) is insuffi17 cient to cover the withholding required for enrollment (or

18 who is not receiving any regular amounts from the Gov19 ernment, as referred to in subsection (b), from which any

20 such withholdings may be made) shall pay the full amount

21 of those charges directly to the carrier.

22 ‘‘(e) Each carrier participating under this chapter

23 shall account for all funds received under this chapter sep24 arate and apart from all other funds relating to contracts

25 or matters that are unrelated to this chapter.
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1 ‘‘(f)(1) A contract under this chapter shall include

2 appropriate provisions under which the carrier shall reim3 burse the Office or other administering Federal agency for

4 the administrative costs incurred by the Office or such

5 agency under this chapter (such as for dispute resolution),

6 and including the costs of the initial implementation of

7 this chapter, which are allocable to such carrier.

8 ‘‘(2) Reimbursements required under this subsection,

9 except those relating to the costs of the initial implementa10 tion of this chapter, shall be deposited in the Employees

11 Health Benefits Fund established under section 8909, and

12 held in a separate Long-Term Care Insurance Account.

13 This account shall be available to the Office without limi14 tation for the purposes of this chapter.

15 ‘‘§ 9006. Preemption

16 ‘‘Except with regard to any financial requirement im17 posed by a State or the District of Columbia which is more

18 stringent than the analogous requirement imposed by sec19 tion 9004(b)(1), this chapter shall supersede and preempt

20 any State or local law, or law of a territory or possession,

21 which is determined by the Office to be inconsistent

22 with—

23 ‘‘(1) the provisions of this chapter; or

24 ‘‘(2) after consultation with appropriate State

25 Insurance Commissioners, the efficient provision of a
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1 nationwide long-term care insurance program for

2 Federal employees.

3 ‘‘§ 9007. Studies, reports, and audits

4 ‘‘(a) Each qualified carrier entering into a contract

5 under this chapter shall—

6 ‘‘(1) furnish such reasonable reports as the Of7 fice determines to be necessary to enable the Office

8 to carry out its functions under this chapter; and

9 ‘‘(2) permit the Office and representatives of

10 the General Accounting Office to examine such

11 records of the carrier as may be necessary to carry

12 out the purposes of this chapter.

13 ‘‘(b) Each Federal agency shall keep such records,

14 make such certifications, and furnish the Office, the car15 rier, or both, with such information and reports as the

16 Office may require.

17 ‘‘§ 9008. Claims for benefits

18 ‘‘(a) A claim for benefits under this chapter shall be

19 filed within 4 years after the date on which the reimburs20 able cost was incurred or the service was provided.

21 ‘‘(b)(1) Except as provided under paragraph (2), ben22 efits payable under this chapter for any reimbursable cost

23 incurred or service provided are secondary to any other

24 benefit payable for such cost or service. No payment may
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1 be made where there is no legal obligation for such pay2 ment.

3 ‘‘(2)(A) Benefits payable under the programs de4 scribed under subparagraph (B) shall be secondary to ben5 efits payable under this chapter.

6 ‘‘(B) The programs referred to under subparagraph

7 (A) are—

8 ‘‘(i) the program of medical assistance under

9 title XIX of the Social Security Act (42 U.S.C. 1396

10 et seq.); and

11 ‘‘(ii) any other Federal or State programs that

12 the Office may specify in regulations that provide

13 health benefit coverage designed to be secondary to

14 other insurance coverage.

15 ‘‘§ 9009. Jurisdiction of courts

16 ‘‘A claimant under this chapter may file suit against

17 the carrier of the long-term care insurance policy covering

18 such claimant in the district courts of the United States,

19 after exhausting all available administrative remedies.

20 ‘‘§ 9010. Regulations

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

22 to carry out this chapter.

23 ‘‘(b) The regulations of the Office shall—

24 ‘‘(1) prescribe the time at which and the man25 ner and conditions under which an individual may
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1 obtain or continue long-term care insurance under

2 this chapter, including—

3 ‘‘(A) the length of time constituting the

4 first opportunity to enroll; and

5 ‘‘(B) the minimum period of coverage re6 quired for portability; and

7 ‘‘(2) provide for periodic coordinated enrollment

8 promotion and education efforts.

9 ‘‘(c) The regulations of the Office may not exclude—

10 ‘‘(1) an employee or group of employees solely

11 on the basis of the hazardous nature of employment;

12 or

13 ‘‘(2) an employee who is occupying a position

14 on a part-time career employment basis, as defined

15 under section 3401(2).

16 ‘‘(d) Any regulations necessary to effect the applica17 tion and operation of this chapter with respect to an eligi18 ble individual or a qualified relative of such individual

19 shall be prescribed by the Office in consultation with the

20 appropriate Secretary.’’.

21 (b) TECHNICAL AND CONFORMING AMENDMENT.—

22 The table of chapters for part III of title 5, United States

23 Code, is amended by inserting after the item relating to

24 chapter 89 the following:

‘‘90. Long-Term Care Insurance ................................................... 9001’’.
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1 SEC. 3. AUTHORIZATION OF APPROPRIATIONS FOR IMPLE2 MENTATION.

3 There are authorized to be appropriated such sums

4 as may be necessary to pay costs incurred by the Office

5 of Personnel Management for implementation of chapter

6 90 of title 5, United States Code, during the period be7 tween the date of enactment of this Act and the date on

8 which long-term care insurance coverage first becomes ef9 fective under that chapter. Any reimbursement of such

10 costs by a carrier under section 9005(f) of title 5, United

11 States Code (as added by this Act) shall be deposited in

12 the General Fund.

13 SEC. 4. EFFECTIVE DATE.

14 (a) IN GENERAL.—The amendments made by this

15 Act shall take effect on the date of enactment of this Act.

16 (b) COVERAGE.—Coverage under this Act shall be17 come effective as specified by the Office of Personnel Man18 agement, except that such coverage shall be effective not

19 later than the first day of the first fiscal year beginning

20 more than 2 years after the date of enactment of this Act.

Æ