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to last for a continuous period of more than 90 
days. 
‘‘(C) REGULATIONS.—The Secretary shall 
promulgate regulations specifying exceptions to 
the minimum earnings requirements under sub-
paragraph (A)(ii) for purposes of being consid-
ered an eligible beneficiary for certain popu-
lations. 
‘‘(7) HOSPITAL; 
NURSING
FACILITY; 
INTER-
MEDIATE
CARE
FACILITY
FOR
THE
MENTALLY
RE-
TARDED; INSTITUTION FOR MENTAL DISEASES.—The 
terms ‘hospital’, ‘nursing facility’, ‘intermediate care 
facility for the mentally retarded’, and ‘institution for 
mental diseases’ have the meanings given such terms 
for purposes of Medicaid. 
‘‘(8) CLASS INDEPENDENCE
ADVISORY
COUN-
CIL.—The term ‘CLASS Independence Advisory 
Council’ or ‘Council’ means the Advisory Council es-
tablished under section 3207 to advise the Secretary. 
‘‘(9) CLASS INDEPENDENCE BENEFIT PLAN.— 
The term ‘CLASS Independence Benefit Plan’ means 
the benefit plan developed and designated by the Sec-
retary in accordance with section 3203. 
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‘‘(10) CLASS INDEPENDENCE FUND.—The term 
‘CLASS Independence Fund’ or ‘Fund’ means the 
fund established under section 3206. 
‘‘(11) MEDICAID.—The term ‘Medicaid’ means 
the program established under title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.). 
‘‘(12) POVERTY LINE.—The term ‘poverty line’ 
has the meaning given that term in section 2110(c)(5) 
of the Social Security Act (42 U.S.C. 1397jj(c)(5)). 
‘‘(13) PROTECTION AND ADVOCACY SYSTEM.—The 
term ‘Protection and Advocacy System’ means the 
system for each State established under section 143 of 
the Developmental Disabilities Assistance and Bill of 
Rights Act of 2000 (42 U.S.C. 15043). 
‘‘SEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN. 
‘‘(a) PROCESS FOR DEVELOPMENT.— 
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with appropriate actuaries and other experts, 
shall develop at least 3 actuarially sound benefit 
plans as alternatives for consideration for designation 
by the Secretary as the CLASS Independence Benefit 
Plan under which eligible beneficiaries shall receive 
benefits under this title. Each of the plan alternatives 
developed shall be designed to provide eligible bene-
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ficiaries with the benefits described in section 3205 
consistent with the following requirements: 
‘‘(A) PREMIUMS.— 
‘‘(i) IN GENERAL.—Beginning with the 
first year of the CLASS program, and for 
each year thereafter, subject to clauses (ii) 
and (iii), the Secretary shall establish all 
premiums to be paid by enrollees for the 
year based on an actuarial analysis of the 
75-year costs of the program that ensures 
solvency throughout such 75-year period. 
‘‘(ii) NOMINAL PREMIUM FOR POOREST 
INDIVIDUALS AND FULL-TIME STUDENTS.— 
‘‘(I) IN GENERAL.—The monthly 
premium for enrollment in the CLASS 
program shall not exceed the applicable 
dollar amount per month determined 
under subclause (II) for— 
‘‘(aa) any individual whose 
income does not exceed the poverty 
line; and 
‘‘(bb) any individual who 
has not attained age 22, and is 
actively employed during any pe-
riod in which the individual is a 
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full-time student (as determined 
by the Secretary). 
‘‘(II) 
APPLICABLE
DOLLAR 
AMOUNT.—The 
applicable 
dollar 
amount described in this subclause is 
the amount equal to $5, increased by 
the percentage increase in the con-
sumer price index for all urban con-
sumers (U.S. city average) for each 
year occurring after 2009 and before 
such year. 
‘‘(iii) CLASS INDEPENDENCE FUND RE-
SERVES.—At such time as the CLASS pro-
gram has been in operation for 10 years, 
the Secretary shall establish all premiums 
to be paid by enrollees for the year based on 
an actuarial analysis that accumulated re-
serves in the CLASS Independence Fund 
would not decrease in that year. At such 
time as the Secretary determines the 
CLASS program demonstrates a sustained 
ability to finance expected yearly expenses 
with expected yearly premiums and interest 
credited to the CLASS Independence Fund, 
the Secretary may decrease the required 
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amount of CLASS Independence Fund re-
serves. 
‘‘(B) VESTING PERIOD.—A 5-year vesting 
period for eligibility for benefits. 
‘‘(C) BENEFIT TRIGGERS.—A benefit trigger 
for provision of benefits that requires a deter-
mination that an individual has a functional 
limitation, as certified by a licensed health care 
practitioner, described in any of the following 
clauses that is expected to last for a continuous 
period of more than 90 days: 
‘‘(i) The individual is determined to be 
unable to perform at least the minimum 
number (which may be 2 or 3) of activities 
of daily living as are required under the 
plan for the provision of benefits without 
substantial assistance (as defined by the 
Secretary) from another individual. 
‘‘(ii) The individual requires substan-
tial supervision to protect the individual 
from threats to health and safety due to sub-
stantial cognitive impairment. 
‘‘(iii) The individual has a level of 
functional limitation similar (as deter-
mined under regulations prescribed by the 
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Secretary) to the level of functional limita-
tion described in clause (i) or (ii). 
‘‘(D) CASH BENEFIT.—Payment of a cash 
benefit that satisfies the following requirements: 
‘‘(i) MINIMUM
REQUIRED
AMOUNT.— 
The benefit amount provides an eligible ben-
eficiary with not less than an average of 
$50 per day (as determined based on the 
reasonably expected distribution of bene-
ficiaries receiving benefits at various benefit 
levels). 
‘‘(ii) AMOUNT SCALED TO FUNCTIONAL 
ABILITY.—The benefit amount is varied 
based on a scale of functional ability, with 
not less than 2, and not more than 6, ben-
efit level amounts. 
‘‘(iii) DAILY OR WEEKLY.—The benefit 
is paid on a daily or weekly basis. 
‘‘(iv) NO
LIFETIME
OR
AGGREGATE 
LIMIT.—The benefit is not subject to any 
lifetime or aggregate limit. 
‘‘(E) COORDINATION WITH SUPPLEMENTAL 
COVERAGE
OBTAINED
THROUGH
THE
EX-
CHANGE.—The benefits allow for coordination 
with any supplemental coverage purchased 
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through an Exchange established under section 
1311 of the Patient Protection and Affordable 
Care Act. 
‘‘(2) REVIEW
AND
RECOMMENDATION
BY
THE 
CLASS
INDEPENDENCE
ADVISORY
COUNCIL.—The 
CLASS Independence Advisory Council shall— 
‘‘(A) evaluate the alternative benefit plans 
developed under paragraph (1); and 
‘‘(B) recommend for designation as the 
CLASS Independence Benefit Plan for offering 
to the public the plan that the Council deter-
mines best balances price and benefits to meet 
enrollees’ needs in an actuarially sound manner, 
while optimizing the probability of the long-term 
sustainability of the CLASS program. 
‘‘(3) DESIGNATION
BY
THE
SECRETARY.—Not 
later than October 1, 2012, the Secretary, taking into 
consideration the recommendation of the CLASS 
Independence Advisory Council under paragraph 
(2)(B), shall designate a benefit plan as the CLASS 
Independence Benefit Plan. The Secretary shall pub-
lish such designation, along with details of the plan 
and the reasons for the selection by the Secretary, in 
a final rule that allows for a period of public com-
ment. 
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‘‘(b) ADDITIONAL PREMIUM REQUIREMENTS.— 
‘‘(1) ADJUSTMENT OF PREMIUMS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraphs (B), (C), (D), and (E), the 
amount of the monthly premium determined for 
an individual upon such individual’s enrollment 
in the CLASS program shall remain the same 
for as long as the individual is an active enrollee 
in the program. 
‘‘(B) RECALCULATED
PREMIUM
IF
RE-
QUIRED FOR PROGRAM SOLVENCY.— 
‘‘(i) IN
GENERAL.—Subject to clause 
(ii), if the Secretary determines, based on 
the most recent report of the Board of 
Trustees of the CLASS Independence Fund, 
the advice of the CLASS Independence Ad-
visory Council, and the annual report of the 
Inspector General of the Department of 
Health and Human Services, and waste, 
fraud, and abuse, or such other information 
as the Secretary determines appropriate, 
that the monthly premiums and income to 
the CLASS Independence Fund for a year 
are projected to be insufficient with respect 
to the 20-year period that begins with that 
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year, the Secretary shall adjust the monthly 
premiums for individuals enrolled in the 
CLASS program as necessary (but main-
taining a nominal premium for enrollees 
whose income is below the poverty line or 
who are full-time students actively em-
ployed). 
‘‘(ii) EXEMPTION
FROM
INCREASE.— 
Any increase in a monthly premium im-
posed as result of a determination described 
in clause (i) shall not apply with respect to 
the monthly premium of any active enrollee 
who— 
‘‘(I) has attained age 65; 
‘‘(II) has paid premiums for en-
rollment in the program for at least 20 
years; and 
‘‘(III) is not actively employed. 
‘‘(C) RECALCULATED
PREMIUM
IF
RE-
ENROLLMENT
AFTER
MORE
THAN
A
3-MONTH 
LAPSE.— 
‘‘(i) IN GENERAL.—The reenrollment of 
an individual after a 90-day period during 
which the individual failed to pay the 
monthly premium required to maintain the 
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individual’s enrollment in the CLASS pro-
gram shall be treated as an initial enroll-
ment for purposes of age-adjusting the pre-
mium for enrollment in the program. 
‘‘(ii) CREDIT FOR PRIOR MONTHS IF 
REENROLLED WITHIN 5 YEARS.—An indi-
vidual who reenrolls in the CLASS program 
after such a 90-day period and before the 
end of the 5-year period that begins with 
the first month for which the individual 
failed to pay the monthly premium required 
to maintain the individual’s enrollment in 
the program shall be— 
‘‘(I) credited with any months of 
paid premiums that accrued prior to 
the individual’s lapse in enrollment; 
and 
‘‘(II) notwithstanding the total 
amount of any such credited months, 
required 
to 
satisfy 
section 
3202(6)(A)(ii) before being eligible to 
receive benefits. 
‘‘(D) NO LONGER STATUS AS A FULL-TIME 
STUDENT.—An individual subject to a nominal 
premium on the basis of being described in sub-
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section (a)(1)(A)(ii)(I)(bb) who ceases to be de-
scribed in that subsection, beginning with the 
first month following the month in which the in-
dividual ceases to be so described, shall be subject 
to the same monthly premium as the monthly 
premium that applies to an individual of the 
same age who first enrolls in the program under 
the most similar circumstances as the individual 
(such as the first year of eligibility for enroll-
ment in the program or in a subsequent year). 
‘‘(E) PENALTY FOR REENOLLMENT AFTER 5- 
YEAR LAPSE.—In the case of an individual who 
reenrolls in the CLASS program after the end of 
the 5-year period described in subparagraph 
(C)(ii), the monthly premium required for the 
individual shall be the age-adjusted premium 
that would be applicable to an initially enrolling 
individual who is the same age as the reenrolling 
individual, increased by the greater of— 
‘‘(i) an amount that the Secretary de-
termines is actuarially sound for each 
month that occurs during the period that 
begins with the first month for which the 
individual failed to pay the monthly pre-
mium required to maintain the individual’s 
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enrollment in the CLASS program and 
ends with the month preceding the month in 
which the reenollment is effective; or 
‘‘(ii) 1 percent of the applicable age- 
adjusted premium for each such month oc-
curring in such period. 
‘‘(2) ADMINISTRATIVE
EXPENSES.—In deter-
mining the monthly premiums for the CLASS pro-
gram the Secretary may factor in costs for admin-
istering the program, not to exceed for any year in 
which the program is in effect under this title, an 
amount equal to 3 percent of all premiums paid dur-
ing the year. 
‘‘(3) NO
UNDERWRITING
REQUIREMENTS.—No 
underwriting (other than on the basis of age in ac-
cordance with subparagraphs (D) and (E) of para-
graph (1)) shall be used to— 
‘‘(A) determine the monthly premium for 
enrollment in the CLASS program; or 
‘‘(B) prevent an individual from enrolling 
in the program. 
‘‘(c) SELF-ATTESTATION AND VERIFICATION OF IN-
COME.—The Secretary shall establish procedures to— 
‘‘(1) permit an individual who is eligible for the 
nominal 
premium 
required 
under 
subsection 
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(a)(1)(A)(ii), as part of their automatic enrollment in 
the CLASS program, to self-attest that their income 
does not exceed the poverty line or that their status 
as a full-time student who is actively employed; 
‘‘(2) verify, using procedures similar to the pro-
cedures used by the Commissioner of Social Security 
under section 1631(e)(1)(B)(ii) of the Social Security 
Act and consistent with the requirements applicable 
to the conveyance of data and information under sec-
tion 1942 of such Act, the validity of such self-attesta-
tion; and 
‘‘(3) require an individual to confirm, on at 
least an annual basis, that their income does not ex-
ceed the poverty line or that they continue to main-
tain such status. 
‘‘SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIRE-
MENTS. 
‘‘(a) AUTOMATIC ENROLLMENT.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), the 
Secretary, in coordination with the Secretary of the 
Treasury, shall establish procedures under which each 
individual described in subsection (c) may be auto-
matically enrolled in the CLASS program by an em-
ployer of such individual in the same manner as an 
employer may elect to automatically enroll employees 
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in a plan under section 401(k), 403(b), or 457 of the 
Internal Revenue Code of 1986. 
‘‘(2) 
ALTERNATIVE
ENROLLMENT
PROCE-
DURES.—The procedures established under paragraph 
(1) shall provide for an alternative enrollment process 
for an individual described in subsection (c) in the 
case of such an individual— 
‘‘(A) who is self-employed; 
‘‘(B) who has more than 1 employer; or 
‘‘(C) whose employer does not elect to par-
ticipate in the automatic enrollment process es-
tablished by the Secretary. 
‘‘(3) ADMINISTRATION.— 
‘‘(A) IN GENERAL.—The Secretary and the 
Secretary of the Treasury shall, by regulation, 
establish procedures to ensure that an individual 
is not automatically enrolled in the CLASS pro-
gram by more than 1 employer. 
‘‘(B) FORM.—Enrollment in the CLASS 
program shall be made in such manner as the 
Secretary may prescribe in order to ensure ease 
of administration. 
‘‘(b) ELECTION
TO OPT-OUT.—An individual de-
scribed in subsection (c) may elect to waive enrollment in 
the CLASS program at any time in such form and manner 
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as the Secretary and the Secretary of the Treasury shall 
prescribe. 
‘‘(c) INDIVIDUAL DESCRIBED.—For purposes of enroll-
ing in the CLASS program, an individual described in this 
paragraph is an individual— 
‘‘(1) who has attained age 18; 
‘‘(2) who— 
‘‘(A) receives wages on which there is im-
posed a tax under section 3201(a) of the Internal 
Revenue Code of 1986; or 
‘‘(B) derives self-employment income on 
which there is imposed a tax under section 
1401(a) of the Internal Revenue Code of 1986; 
‘‘(3) who is actively employed; and 
‘‘(4) who is not— 
‘‘(A) a patient in a hospital or nursing fa-
cility, an intermediate care facility for the men-
tally retarded, or an institution for mental dis-
eases and receiving medical assistance under 
Medicaid; or 
‘‘(B) confined in a jail, prison, other penal 
institution or correctional facility, or by court 
order pursuant to conviction of a criminal of-
fense or in connection with a verdict or finding 
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described in section 202(x)(1)(A)(ii) of the Social 
Security Act (42 U.S.C. 402(x)(1)(A)(ii)). 
‘‘(d) RULE OF CONSTRUCTION.—Nothing in this title 
shall be construed as requiring an active enrollee to con-
tinue to satisfy subparagraph (B) or (C) of subsection (c)(1) 
in order to maintain enrollment in the CLASS program. 
‘‘(e) PAYMENT.— 
‘‘(1) PAYROLL DEDUCTION.—An amount equal to 
the monthly premium for the enrollment in the 
CLASS program of an individual shall be deducted 
from the wages or self-employment income of such in-
dividual in accordance with such procedures as the 
Secretary, in coordination with the Secretary of the 
Treasury, shall establish for employers who elect to 
deduct and withhold such premiums on behalf of en-
rolled employees. 
‘‘(2) ALTERNATIVE PAYMENT MECHANISM.—The 
Secretary, in coordination with the Secretary of the 
Treasury, shall establish alternative procedures for the 
payment of monthly premiums by an individual en-
rolled in the CLASS program— 
‘‘(A) who does not have an employer who 
elects to deduct and withhold premiums in ac-
cordance with subparagraph (A); or 
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‘‘(B) who does not earn wages or derive self- 
employment income. 
‘‘(f) TRANSFER OF PREMIUMS COLLECTED.— 
‘‘(1) IN GENERAL.—During each calendar year 
the Secretary of the Treasury shall deposit into the 
CLASS Independence Fund a total amount equal, in 
the aggregate, to 100 percent of the premiums col-
lected during that year. 
‘‘(2) TRANSFERS
BASED
ON
ESTIMATES.—The 
amount deposited pursuant to paragraph (1) shall be 
transferred in at least monthly payments to the 
CLASS Independence Fund on the basis of estimates 
by the Secretary and certified to the Secretary of the 
Treasury of the amounts collected in accordance with 
subparagraphs (A) and (B) of paragraph (5). Proper 
adjustments shall be made in amounts subsequently 
transferred to the Fund to the extent prior estimates 
were in excess of, or were less than, actual amounts 
collected. 
‘‘(g) OTHER ENROLLMENT AND DISENROLLMENT OP-
PORTUNITIES.—The Secretary, in coordination with the 
Secretary of the Treasury, shall establish procedures under 
which— 
‘‘(1) an individual who, in the year of the indi-
vidual’s initial eligibility to enroll in the CLASS 
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program, has elected to waive enrollment in the pro-
gram, is eligible to elect to enroll in the program, in 
such form and manner as the Secretaries shall estab-
lish, only during an open enrollment period estab-
lished by the Secretaries that is specific to the indi-
vidual and that may not occur more frequently than 
biennially after the date on which the individual first 
elected to waive enrollment in the program; and 
‘‘(2) an individual shall only be permitted to 
disenroll from the program (other than for non-
payment 
of 
premiums) 
during 
an 
annual 
disenrollment period established by the Secretaries 
and in such form and manner as the Secretaries shall 
establish. 
‘‘SEC. 3205. BENEFITS. 
‘‘(a) DETERMINATION OF ELIGIBILITY.— 
‘‘(1) APPLICATION FOR RECEIPT OF BENEFITS.— 
The Secretary shall establish procedures under which 
an active enrollee shall apply for receipt of benefits 
under the CLASS Independence Benefit Plan. 
‘‘(2) ELIGIBILITY ASSESSMENTS.— 
‘‘(A) IN GENERAL.—Not later than January 
1, 2012, the Secretary shall— 
‘‘(i) establish an Eligibility Assessment 
System (other than a service with which the 
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Commissioner of Social Security has en-
tered into an agreement, with respect to any 
State, to make disability determinations for 
purposes of title II or XVI of the Social Se-
curity Act) to provide for eligibility assess-
ments of active enrollees who apply for re-
ceipt of benefits; 
‘‘(ii) enter into an agreement with the 
Protection and Advocacy System for each 
State to provide advocacy services in ac-
cordance with subsection (d); and 
‘‘(iii) enter into an agreement with 
public and private entities to provide advice 
and assistance counseling in accordance 
with subsection (e). 
‘‘(B) REGULATIONS.—The Secretary shall 
promulgate regulations to develop an expedited 
nationally equitable eligibility determination 
process, as certified by a licensed health care 
practitioner, an appeals process, and a redeter-
mination process, as certified by a licensed 
health care practitioner, including whether an 
active enrollee is eligible for a cash benefit under 
the program and if so, the amount of the cash 
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benefit (in accordance the sliding scale estab-
lished under the plan). 
‘‘(C) PRESUMPTIVE ELIGIBILITY FOR CER-
TAIN INSTITUTIONALIZED ENROLLEES PLANNING 
TO
DISCHARGE.—An active enrollee shall be 
deemed presumptively eligible if the enrollee— 
‘‘(i) has applied for, and attests is eli-
gible for, the maximum cash benefit avail-
able under the sliding scale established 
under the CLASS Independence Benefit 
Plan; 
‘‘(ii) is a patient in a hospital (but 
only if the hospitalization is for long-term 
care), nursing facility, intermediate care fa-
cility for the mentally retarded, or an insti-
tution for mental diseases; and 
‘‘(iii) is in the process of, or about to 
begin the process of, planning to discharge 
from the hospital, facility, or institution, or 
within 60 days from the date of discharge 
from the hospital, facility, or institution. 
‘‘(D) APPEALS.—The Secretary shall estab-
lish procedures under which an applicant for 
benefits under the CLASS Independence Benefit 
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Plan shall be guaranteed the right to appeal an 
adverse determination. 
‘‘(b) BENEFITS.—An eligible beneficiary shall receive 
the following benefits under the CLASS Independence Ben-
efit Plan: 
‘‘(1) CASH BENEFIT.—A cash benefit established 
by the Secretary in accordance with the requirements 
of section 3203(a)(1)(D) that— 
‘‘(A) the first year in which beneficiaries re-
ceive the benefits under the plan, is not less than 
the average dollar amount specified in clause (i) 
of such section; and 
‘‘(B) for any subsequent year, is not less 
than the average per day dollar limit applicable 
under this subparagraph for the preceding year, 
increased by the percentage increase in the con-
sumer price index for all urban consumers (U.S. 
city average) over the previous year. 
‘‘(2) ADVOCACY SERVICES.—Advocacy services in 
accordance with subsection (d). 
‘‘(3) ADVICE
AND
ASSISTANCE
COUNSELING.— 
Advice and assistance counseling in accordance with 
subsection (e). 
‘‘(4) 
ADMINISTRATIVE
EXPENSES.—Advocacy 
services and advise and assistance counseling services 
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under paragraphs (2) and (3) of this subsection shall 
be included as administrative expenses under section 
3203(b)(3). 
‘‘(c) PAYMENT OF BENEFITS.— 
‘‘(1) LIFE INDEPENDENCE ACCOUNT.— 
‘‘(A) IN GENERAL.—The Secretary shall es-
tablish procedures for administering the provi-
sion of benefits to eligible beneficiaries under the 
CLASS Independence Benefit Plan, including 
the payment of the cash benefit for the bene-
ficiary into a Life Independence Account estab-
lished by the Secretary on behalf of each eligible 
beneficiary. 
‘‘(B) USE OF CASH BENEFITS.—Cash bene-
fits paid into a Life Independence Account of an 
eligible beneficiary shall be used to purchase 
nonmedical services and supports that the bene-
ficiary needs to maintain his or her independ-
ence at home or in another residential setting of 
their choice in the community, including (but 
not limited to) home modifications, assistive 
technology, accessible transportation, homemaker 
services, respite care, personal assistance services, 
home care aides, and nursing support. Nothing 
in the preceding sentence shall prevent an eligi-
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ble beneficiary from using cash benefits paid into 
a Life Independence Account for obtaining as-
sistance with decision making concerning med-
ical care, including the right to accept or refuse 
medical or surgical treatment and the right to 
formulate advance directives or other written in-
structions recognized under State law, such as a 
living will or durable power of attorney for 
health care, in the case that an injury or illness 
causes the individual to be unable to make health 
care decisions. 
‘‘(C) 
ELECTRONIC
MANAGEMENT
OF 
FUNDS.—The Secretary shall establish procedures 
for— 
‘‘(i) crediting an account established 
on behalf of a beneficiary with the bene-
ficiary’s cash daily benefit; 
‘‘(ii) allowing the beneficiary to access 
such account through debit cards; and 
‘‘(iii) accounting for withdrawals by 
the beneficiary from such account. 
‘‘(D) PRIMARY
PAYOR
RULES
FOR
BENE-
FICIARIES WHO ARE ENROLLED IN MEDICAID.— 
In the case of an eligible beneficiary who is en-
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rolled in Medicaid, the following payment rules 
shall apply: 
‘‘(i) 
INSTITUTIONALIZED
BENE-
FICIARY.—If the beneficiary is a patient in 
a hospital, nursing facility, intermediate 
care facility for the mentally retarded, or 
an institution for mental diseases, the bene-
ficiary shall retain an amount equal to 5 
percent of the beneficiary’s daily or weekly 
cash benefit (as applicable) (which shall be 
in addition to the amount of the bene-
ficiary’s personal needs allowance provided 
under Medicaid), and the remainder of such 
benefit shall be applied toward the facility’s 
cost of providing the beneficiary’s care, and 
Medicaid shall provide secondary coverage 
for such care. 
‘‘(ii) BENEFICIARIES RECEIVING HOME 
AND COMMUNITY-BASED SERVICES.— 
‘‘(I) 50 PERCENT OF BENEFIT RE-
TAINED BY BENEFICIARY.—Subject to 
subclause (II), if a beneficiary is re-
ceiving medical assistance under Med-
icaid for home and community based 
services, the beneficiary shall retain an 
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amount equal to 50 percent of the bene-
ficiary’s daily or weekly cash benefit 
(as applicable), and the remainder of 
the daily or weekly cash benefit shall 
be applied toward the cost to the State 
of providing such assistance (and shall 
not be used to claim Federal matching 
funds under Medicaid), and Medicaid 
shall provide secondary coverage for 
the remainder of any costs incurred in 
providing such assistance. 
‘‘(II) REQUIREMENT
FOR
STATE 
OFFSET.—A State shall be paid the re-
mainder of a beneficiary’s daily or 
weekly cash benefit under subclause (I) 
only if the State home and community- 
based waiver under section 1115 of the 
Social Security Act (42 U.S.C. 1315) 
or subsection (c) or (d) of section 1915 
of such Act (42 U.S.C. 1396n), or the 
State plan amendment under sub-
section (i) of such section does not in-
clude a waiver of the requirements of 
section 1902(a)(1) of the Social Secu-
rity Act (relating to statewideness) or 
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of section 1902(a)(10)(B) of such Act 
(relating to comparability) and the 
State offers at a minimum case man-
agement services, personal care serv-
ices, habilitation services, and respite 
care under such a waiver or State plan 
amendment. 
‘‘(III) DEFINITION OF HOME AND 
COMMUNITY-BASED SERVICES.—In this 
clause, the term ‘home and community- 
based services’ means any services 
which may be offered under a home 
and community-based waiver author-
ized for a State under section 1115 of 
the Social Security Act (42 U.S.C. 
1315) or subsection (c) or (d) of section 
1915 of such Act (42 U.S.C. 1396n) or 
under a State plan amendment under 
subsection (i) of such section. 
‘‘(iii) BENEFICIARIES
ENROLLED
IN 
PROGRAMS
OF
ALL-INCLUSIVE
CARE
FOR 
THE ELDERLY (PACE).— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (II), if a beneficiary is re-
ceiving medical assistance under Med-
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icaid for PACE program services 
under section 1934 of the Social Secu-
rity Act (42 U.S.C. 1396u–4), the ben-
eficiary shall retain an amount equal 
to 50 percent of the beneficiary’s daily 
or weekly cash benefit (as applicable), 
and the remainder of the daily or 
weekly cash benefit shall be applied to-
ward the cost to the State of providing 
such assistance (and shall not be used 
to claim Federal matching funds under 
Medicaid), and Medicaid shall provide 
secondary coverage for the remainder 
of any costs incurred in providing such 
assistance. 
‘‘(II) INSTITUTIONALIZED RECIPI-
ENTS OF PACE PROGRAM SERVICES.—If 
a 
beneficiary 
receiving 
assistance 
under Medicaid for PACE program 
services is a patient in a hospital, 
nursing facility, intermediate care fa-
cility for the mentally retarded, or an 
institution for mental diseases, the ben-
eficiary shall be treated as in institu-
tionalized beneficiary under clause (i). 
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‘‘(2) AUTHORIZED REPRESENTATIVES.— 
‘‘(A) IN GENERAL.—The Secretary shall es-
tablish procedures to allow access to a bene-
ficiary’s cash benefits by an authorized rep-
resentative of the eligible beneficiary on whose 
behalf such benefits are paid. 
‘‘(B) QUALITY ASSURANCE AND PROTECTION 
AGAINST FRAUD AND ABUSE.—The procedures es-
tablished under subparagraph (A) shall ensure 
that authorized representatives of eligible bene-
ficiaries comply with standards of conduct estab-
lished by the Secretary, including standards re-
quiring that such representatives provide quality 
services on behalf of such beneficiaries, do not 
have conflicts of interest, and do not misuse ben-
efits paid on behalf of such beneficiaries or other-
wise engage in fraud or abuse. 
‘‘(3) COMMENCEMENT
OF
BENEFITS.—Benefits 
shall be paid to, or on behalf of, an eligible bene-
ficiary beginning with the first month in which an 
application for such benefits is approved. 
‘‘(4) ROLLOVER
OPTION
FOR
LUMP-SUM
PAY-
MENT.—An eligible beneficiary may elect to— 
‘‘(A) defer payment of their daily or weekly 
benefit and to rollover any such deferred benefits 
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from month-to-month, but not from year-to-year; 
and 
‘‘(B) receive a lump-sum payment of such 
deferred benefits in an amount that may not ex-
ceed the lesser of— 
‘‘(i) the total amount of the accrued de-
ferred benefits; or 
‘‘(ii) the applicable annual benefit. 
‘‘(5) PERIOD FOR DETERMINATION OF ANNUAL 
BENEFITS.— 
‘‘(A) IN GENERAL.—The applicable period 
for determining with respect to an eligible bene-
ficiary the applicable annual benefit and the 
amount of any accrued deferred benefits is the 
12-month period that commences with the first 
month in which the beneficiary began to receive 
such benefits, and each 12-month period there-
after. 
‘‘(B) INCLUSION
OF
INCREASED
BENE-
FITS.—The Secretary shall establish procedures 
under which cash benefits paid to an eligible 
beneficiary that increase or decrease as a result 
of a change in the functional status of the bene-
ficiary before the end of a 12-month benefit pe-
riod shall be included in the determination of the 
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applicable annual benefit paid to the eligible 
beneficiary. 
‘‘(C) RECOUPMENT
OF
UNPAID, ACCRUED 
BENEFITS.— 
‘‘(i) IN GENERAL.—The Secretary, in 
coordination with the Secretary of the 
Treasury, shall recoup any accrued benefits 
in the event of— 
‘‘(I) the death of a beneficiary; or 
‘‘(II) the failure of a beneficiary 
to elect under paragraph (4)(B) to re-
ceive such benefits as a lump-sum pay-
ment before the end of the 12-month 
period in which such benefits accrued. 
‘‘(ii) PAYMENT INTO CLASS INDEPEND-
ENCE FUND.—Any benefits recouped in ac-
cordance with clause (i) shall be paid into 
the CLASS Independence Fund and used in 
accordance with section 3206. 
‘‘(6) REQUIREMENT TO RECERTIFY ELIGIBILITY 
FOR RECEIPT OF BENEFITS.—An eligible beneficiary 
shall periodically, as determined by the Secretary— 
‘‘(A) recertify by submission of medical evi-
dence the beneficiary’s continued eligibility for 
receipt of benefits; and 
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‘‘(B) submit records of expenditures attrib-
utable to the aggregate cash benefit received by 
the beneficiary during the preceding year. 
‘‘(7) 
SUPPLEMENT, 
NOT
SUPPLANT
OTHER 
HEALTH CARE BENEFITS.—Subject to the Medicaid 
payment rules under paragraph (1)(D), benefits re-
ceived by an eligible beneficiary shall supplement, but 
not supplant, other health care benefits for which the 
beneficiary is eligible under Medicaid or any other 
Federally funded program that provides health care 
benefits or assistance. 
‘‘(d) ADVOCACY SERVICES.—An agreement entered 
into under subsection (a)(2)(A)(ii) shall require the Protec-
tion and Advocacy System for the State to— 
‘‘(1) assign, as needed, an advocacy counselor to 
each eligible beneficiary that is covered by such agree-
ment and who shall provide an eligible beneficiary 
with— 
‘‘(A) information regarding how to access 
the appeals process established for the program; 
‘‘(B) assistance with respect to the annual 
recertification and notification required under 
subsection (c)(6); and 
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‘‘(C) such other assistance with obtaining 
services as the Secretary, by regulation, shall re-
quire; and 
‘‘(2) ensure that the System and such counselors 
comply with the requirements of subsection (h). 
‘‘(e) ADVICE
AND
ASSISTANCE
COUNSELING.—An 
agreement entered into under subsection (a)(2)(A)(iii) shall 
require the entity to assign, as requested by an eligible bene-
ficiary that is covered by such agreement, an advice and 
assistance counselor who shall provide an eligible bene-
ficiary with information regarding— 
‘‘(1) accessing and coordinating long-term serv-
ices and supports in the most integrated setting; 
‘‘(2) possible eligibility for other benefits and 
services; 
‘‘(3) development of a service and support plan; 
‘‘(4) information about programs established 
under the Assistive Technology Act of 1998 and the 
services offered under such programs; 
‘‘(5) available assistance with decision making 
concerning medical care, including the right to accept 
or refuse medical or surgical treatment and the right 
to formulate advance directives or other written in-
structions recognized under State law, such as a liv-
ing will or durable power of attorney for health care, 
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in the case that an injury or illness causes the indi-
vidual to be unable to make health care decisions; and 
‘‘(6) such other services as the Secretary, by reg-
ulation, may require. 
‘‘(f) NO EFFECT ON ELIGIBILITY FOR OTHER BENE-
FITS.—Benefits paid to an eligible beneficiary under the 
CLASS program shall be disregarded for purposes of deter-
mining or continuing the beneficiary’s eligibility for receipt 
of benefits under any other Federal, State, or locally funded 
assistance program, including benefits paid under titles II, 
XVI, XVIII, XIX, or XXI of the Social Security Act (42 
U.S.C. 401 et seq., 1381 et seq., 1395 et seq., 1396 et seq., 
1397aa et seq.), under the laws administered by the Sec-
retary of Veterans Affairs, under low-income housing assist-
ance programs, or under the supplemental nutrition assist-
ance program established under the Food and Nutrition Act 
of 2008 (7 U.S.C. 2011 et seq.). 
‘‘(g) RULE OF CONSTRUCTION.—Nothing in this title 
shall be construed as prohibiting benefits paid under the 
CLASS Independence Benefit Plan from being used to com-
pensate a family caregiver for providing community living 
assistance services and supports to an eligible beneficiary. 
‘‘(h) PROTECTION AGAINST CONFLICT
OF INTER-
ESTS.—The Secretary shall establish procedures to ensure 
that the Eligibility Assessment System, the Protection and 
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Advocacy System for a State, advocacy counselors for eligi-
ble beneficiaries, and any other entities that provide services 
to active enrollees and eligible beneficiaries under the 
CLASS program comply with the following: 
‘‘(1) If the entity provides counseling or plan-
ning services, such services are provided in a manner 
that fosters the best interests of the active enrollee or 
beneficiary. 
‘‘(2) The entity has established operating proce-
dures that are designed to avoid or minimize conflicts 
of interest between the entity and an active enrollee 
or beneficiary. 
‘‘(3) The entity provides information about all 
services and options available to the active enrollee or 
beneficiary, to the best of its knowledge, including 
services available through other entities or providers. 
‘‘(4) The entity assists the active enrollee or ben-
eficiary to access desired services, regardless of the 
provider. 
‘‘(5) The entity reports the number of active en-
rollees and beneficiaries provided with assistance by 
age, disability, and whether such enrollees and bene-
ficiaries received services from the entity or another 
entity. 
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‘‘(6) If the entity provides counseling or plan-
ning services, the entity ensures that an active en-
rollee or beneficiary is informed of any financial in-
terest that the entity has in a service provider. 
‘‘(7) The entity provides an active enrollee or 
beneficiary with a list of available service providers 
that can meet the needs of the active enrollee or bene-
ficiary. 
‘‘SEC. 3206. CLASS INDEPENDENCE FUND. 
‘‘(a) ESTABLISHMENT
OF CLASS INDEPENDENCE 
FUND.—There is established in the Treasury of the United 
States a trust fund to be known as the ‘CLASS Independ-
ence Fund’. The Secretary of the Treasury shall serve as 
Managing Trustee of such Fund. The Fund shall consist 
of all amounts derived from payments into the Fund under 
sections 3204(f) and 3205(c)(5)(C)(ii), and remaining after 
investment of such amounts under subsection (b), including 
additional amounts derived as income from such invest-
ments. The amounts held in the Fund are appropriated and 
shall remain available without fiscal year limitation— 
‘‘(1) to be held for investment on behalf of indi-
viduals enrolled in the CLASS program; 
‘‘(2) to pay the administrative expenses related 
to the Fund and to investment under subsection (b); 
and 
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‘‘(3) to pay cash benefits to eligible beneficiaries 
under the CLASS Independence Benefit Plan. 
‘‘(b) INVESTMENT OF FUND BALANCE.—The Secretary 
of the Treasury shall invest and manage the CLASS Inde-
pendence Fund in the same manner, and to the same extent, 
as the Federal Supplementary Medical Insurance Trust 
Fund may be invested and managed under subsections (c), 
(d), and (e) of section 1841(d) of the Social Security Act 
(42 U.S.C. 1395t). 
‘‘(c) BOARD OF TRUSTEES.— 
‘‘(1) IN GENERAL.—With respect to the CLASS 
Independence Fund, there is hereby created a body to 
be known as the Board of Trustees of the CLASS 
Independence Fund (hereinafter in this section re-
ferred to as the ‘Board of Trustees’) composed of the 
Secretary of the Treasury, the Secretary of Labor, 
and the Secretary of Health and Human Services, all 
ex officio, and of two members of the public (both of 
whom may not be from the same political party), who 
shall be nominated by the President for a term of 4 
years and subject to confirmation by the Senate. A 
member of the Board of Trustees serving as a member 
of the public and nominated and confirmed to fill a 
vacancy occurring during a term shall be nominated 
and confirmed only for the remainder of such term. 
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An individual nominated and confirmed as a member 
of the public may serve in such position after the ex-
piration of such member’s term until the earlier of the 
time at which the member’s successor takes office or 
the time at which a report of the Board is first issued 
under paragraph (2) after the expiration of the mem-
ber’s term. The Secretary of the Treasury shall be the 
Managing Trustee of the Board of Trustees. The 
Board of Trustees shall meet not less frequently than 
once each calendar year. A person serving on the 
Board of Trustees shall not be considered to be a fidu-
ciary and shall not be personally liable for actions 
taken in such capacity with respect to the Trust 
Fund. 
‘‘(2) DUTIES.— 
‘‘(A) IN GENERAL.—It shall be the duty of 
the Board of Trustees to do the following: 
‘‘(i) Hold the CLASS Independence 
Fund. 
‘‘(ii) Report to the Congress not later 
than the first day of April of each year on 
the operation and status of the CLASS 
Independence Fund during the preceding 
fiscal year and on its expected operation 
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and status during the current fiscal year 
and the next 2 fiscal years. 
‘‘(iii) Report immediately to the Con-
gress whenever the Board is of the opinion 
that the amount of the CLASS Independ-
ence Fund is not actuarially sound in re-
gards to the projection under section 
3203(b)(1)(B)(i). 
‘‘(iv) Review the general policies fol-
lowed in managing the CLASS Independ-
ence Fund, and recommend changes in such 
policies, including necessary changes in the 
provisions of law which govern the way in 
which the CLASS Independence Fund is to 
be managed. 
‘‘(B) REPORT.—The report provided for in 
subparagraph (A)(ii) shall— 
‘‘(i) include— 
‘‘(I) a statement of the assets of, 
and the disbursements made from, the 
CLASS Independence Fund during the 
preceding fiscal year; 
‘‘(II) an estimate of the expected 
income to, and disbursements to be 
made from, the CLASS Independence 
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Fund during the current fiscal year 
and each of the next 2 fiscal years; 
‘‘(III) a statement of the actuarial 
status of the CLASS Independence 
Fund for the current fiscal year, each 
of the next 2 fiscal years, and as pro-
jected over the 75-year period begin-
ning with the current fiscal year; and 
‘‘(IV) an actuarial opinion by the 
Chief Actuary of the Centers for Medi-
care & Medicaid Services certifying 
that the techniques and methodologies 
used are generally accepted within the 
actuarial profession and that the as-
sumptions and cost estimates used are 
reasonable; and 
‘‘(ii) be printed as a House document 
of the session of the Congress to which the 
report is made. 
‘‘(C) RECOMMENDATIONS.—If the Board of 
Trustees determines that enrollment trends and 
expected future benefit claims on the CLASS 
Independence Fund are not actuarially sound in 
regards 
to 
the 
projection 
under 
section 
3203(b)(1)(B)(i) and are unlikely to be resolved 
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with reasonable premium increases or through 
other means, the Board of Trustees shall include 
in the report provided for in subparagraph 
(A)(ii) recommendations for such legislative ac-
tion as the Board of Trustees determine to be ap-
propriate, including whether to adjust monthly 
premiums or impose a temporary moratorium 
on new enrollments. 
‘‘SEC. 3207. CLASS INDEPENDENCE ADVISORY COUNCIL. 
‘‘(a) ESTABLISHMENT.—There is hereby created an 
Advisory Committee to be known as the ‘CLASS Independ-
ence Advisory Council’. 
‘‘(b) MEMBERSHIP.— 
‘‘(1) IN
GENERAL.—The CLASS Independence 
Advisory Council shall be composed of not more than 
15 individuals, not otherwise in the employ of the 
United States— 
‘‘(A) who shall be appointed by the Presi-
dent without regard to the civil service laws and 
regulations; and 
‘‘(B) a majority of whom shall be represent-
atives of individuals who participate or are like-
ly to participate in the CLASS program, and 
shall include representatives of older and young-
er workers, individuals with disabilities, family 
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caregivers of individuals who require services 
and supports to maintain their independence at 
home or in another residential setting of their 
choice in the community, individuals with exper-
tise in long-term care or disability insurance, 
actuarial science, economics, and other relevant 
disciplines, as determined by the Secretary. 
‘‘(2) TERMS.— 
‘‘(A) IN
GENERAL.—The members of the 
CLASS Independence Advisory Council shall 
serve overlapping terms of 3 years (unless ap-
pointed to fill a vacancy occurring prior to the 
expiration of a term, in which case the indi-
vidual shall serve for the remainder of the term). 
‘‘(B) LIMITATION.—A member shall not be 
eligible to serve for more than 2 consecutive 
terms. 
‘‘(3) CHAIR.—The President shall, from time to 
time, appoint one of the members of the CLASS Inde-
pendence Advisory Council to serve as the Chair. 
‘‘(c) DUTIES.—The CLASS Independence Advisory 
Council shall advise the Secretary on matters of general pol-
icy in the administration of the CLASS program estab-
lished under this title and in the formulation of regulations 
under this title including with respect to— 
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‘‘(1) the development of the CLASS Independence 
Benefit Plan under section 3203; 
‘‘(2) the determination of monthly premiums 
under such plan; and 
‘‘(3) the financial solvency of the program. 
‘‘(d) APPLICATION OF FACA.—The Federal Advisory 
Committee Act (5 U.S.C. App.), other than section 14 of 
that Act, shall apply to the CLASS Independence Advisory 
Council. 
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.— 
‘‘(1) IN GENERAL.—There are authorized to be 
appropriated to the CLASS Independence Advisory 
Council to carry out its duties under this section, 
such sums as may be necessary for fiscal year 2011 
and for each fiscal year thereafter. 
‘‘(2) AVAILABILITY.—Any sums appropriated 
under the authorization contained in this section 
shall remain available, without fiscal year limitation, 
until expended. 
‘‘SEC. 3208. SOLVENCY AND FISCAL INDEPENDENCE; REGU-
LATIONS; ANNUAL REPORT. 
‘‘(a) SOLVENCY.—The Secretary shall regularly con-
sult with the Board of Trustees of the CLASS Independence 
Fund and the CLASS Independence Advisory Council, for 
purposes of ensuring that enrollees premiums are adequate 
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to ensure the financial solvency of the CLASS program, 
both with respect to fiscal years occurring in the near-term 
and fiscal years occurring over 20- and 75-year periods, 
taking into account the projections required for such periods 
under subsections (a)(1)(A)(i) and (b)(1)(B)(i) of section 
3202. 
‘‘(b) NO TAXPAYER FUNDS USED TO PAY BENE-
FITS.—No taxpayer funds shall be used for payment of ben-
efits under a CLASS Independent Benefit Plan. For pur-
poses of this subsection, the term ‘taxpayer funds’ means 
any Federal funds from a source other than premiums de-
posited by CLASS program participants in the CLASS 
Independence Fund and any associated interest earnings. 
‘‘(c) REGULATIONS.—The Secretary shall promulgate 
such regulations as are necessary to carry out the CLASS 
program in accordance with this title. Such regulations 
shall include provisions to prevent fraud and abuse under 
the program. 
‘‘(d) ANNUAL REPORT.—Beginning January 1, 2014, 
the Secretary shall submit an annual report to Congress 
on the CLASS program. Each report shall include the fol-
lowing: 
‘‘(1) The total number of enrollees in the pro-
gram. 
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‘‘(2) The total number of eligible beneficiaries 
during the fiscal year. 
‘‘(3) The total amount of cash benefits provided 
during the fiscal year. 
‘‘(4) A description of instances of fraud or abuse 
identified during the fiscal year. 
‘‘(5) Recommendations for such administrative 
or legislative action as the Secretary determines is 
necessary to improve the program, ensure the solvency 
of the program, or to prevent the occurrence of fraud 
or abuse. 
‘‘SEC. 3209. INSPECTOR GENERAL’S REPORT. 
‘‘The Inspector General of the Department of Health 
and Human Services shall submit an annual report to the 
Secretary and Congress relating to the overall progress of 
the CLASS program and of the existence of waste, fraud, 
and abuse in the CLASS program. Each such report shall 
include findings in the following areas: 
‘‘(1) The eligibility determination process. 
‘‘(2) The provision of cash benefits. 
‘‘(3) Quality assurance and protection against 
waste, fraud, and abuse. 
‘‘(4) Recouping of unpaid and accrued benefits. 
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excess amounts determined under paragraph (2) for 
months during the taxable period. 
‘‘(2) MONTHLY
EXCESS
AMOUNT.—The excess 
amount determined under this paragraph for any 
month is the excess (if any) of— 
‘‘(A) the aggregate cost of the applicable em-
ployer-sponsored coverage of the employee for the 
month, over 
‘‘(B) an amount equal to 1⁄12 of the annual 
limitation under paragraph (3) for the calendar 
year in which the month occurs. 
‘‘(3) ANNUAL LIMITATION.—For purposes of this 
subsection— 
‘‘(A) IN GENERAL.—The annual limitation 
under this paragraph for any calendar year is 
the dollar limit determined under subparagraph 
(C) for the calendar year. 
‘‘(B) APPLICABLE
ANNUAL
LIMITATION.— 
The annual limitation which applies for any 
month shall be determined on the basis of the 
type of coverage (as determined under subsection 
(f)(1)) provided to the employee by the employer 
as of the beginning of the month. 
‘‘(C) APPLICABLE DOLLAR LIMIT.—Except 
as provided in subparagraph (D)— 
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‘‘(i) 2013.—In the case of 2013, the 
dollar limit under this subparagraph is— 
‘‘(I) in the case of an employee 
with self-only coverage, $8,500, and 
‘‘(II) in the case of an employee 
with coverage other than self-only cov-
erage, $23,000. 
‘‘(ii) EXCEPTION
FOR
CERTAIN
INDI-
VIDUALS.—In the case of an individual who 
is a qualified retiree or who participates in 
a plan sponsored by an employer the major-
ity of whose employees are engaged in a 
high-risk profession or employed to repair 
or install electrical or telecommunications 
lines— 
‘‘(I) the dollar amount in clause 
(i)(I) (determined after the application 
of subparagraph (D)) shall be in-
creased by $1,350, and 
‘‘(II) the dollar amount in clause 
(i)(II) (determined after the applica-
tion of subparagraph (D)) shall be in-
creased by $3,000. 
‘‘(iii) SUBSEQUENT
YEARS.—In the 
case of any calendar year after 2013, each 
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this section shall not be taken into account and 
the amount of such cost shall be calculated sepa-
rately for self-only coverage and other coverage. 
In the case of applicable employer-sponsored cov-
erage which provides coverage to retired employ-
ees, the plan may elect to treat a retired em-
ployee who has not attained the age of 65 and 
a retired employee who has attained the age of 
65 as similarly situated beneficiaries. 
‘‘(B) HEALTH FSAS.—In the case of appli-
cable employer-sponsored coverage consisting of 
coverage under a flexible spending arrangement 
(as defined in section 106(c)(2)), the cost of the 
coverage shall be equal to the sum of— 
‘‘(i) the amount of employer contribu-
tions under any salary reduction election 
under the arrangement, plus 
‘‘(ii) the amount determined under 
subparagraph (A) with respect to any reim-
bursement under the arrangement in excess 
of the contributions described in clause (i). 
‘‘(C) ARCHER MSAS AND HSAS.—In the case 
of applicable employer-sponsored coverage con-
sisting of coverage under an arrangement under 
which the employer makes contributions de-
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