‘‘(B) EXHAUSTION
OF
BENEFITS.—Ex-
haustion of benefits, as determined under the
contract.
‘‘(C) INSOLVENCY.—Insolvency of the in-
surer, as determined under the contract.
‘‘(D) CANCELLATION.—Any event justi-
fying a cancellation under subsection (d).
‘‘(3) PRESERVATION OF RIGHTS AND RESPON-
SIBILITIES.—Each contract under this section shall
include such provisions as may be necessary so as,
except as provided in paragraph (2)—
‘‘(A) to effectively preserve all parties’
rights and responsibilities under such contract
notwithstanding the termination of such con-
tract (whether due to its nonrenewal under the
first sentence of paragraph (1) or otherwise);
and
‘‘(B) to ensure that, once an individual be-
comes duly enrolled, long-term care insurance
coverage obtained by such individual pursuant
to that enrollment shall not be terminated due
to any change in status (as described in section
9002(b)), such as separation from Government
service or the uniformed services, or ceasing to
meet the requirements for being considered a
qualified relative (whether due to divorce or
otherwise).
‘‘§ 9004. Long-term care benefits
‘‘(a) IN GENERAL.—Benefits under this chapter shall
be provided under qualified long-term care insurance con-
tracts, within the meaning of section 7702B of the Inter-
nal Revenue Code of 1986.
‘‘(b) SPECIFIC MATTERS TO BE INCLUDED IN ALL
CONTRACTS.—Each contract under section 9003 shall, in
addition to any matter otherwise required under this chap-
ter, provide for the following:
‘‘(1) Adequate consumer protections (including
through establishment of sufficient reserves or rein-
surance).
‘‘(2) Adequate protections in the event of car-
rier bankruptcy (or other similar event).
‘‘(3) Availability of benefits upon appropriate
certification as to an individual’s—
‘‘(A) inability (without substantial assist-
ance from another individual) to perform at
least 2 activities of daily living for a period of
at least 90 days due to a loss of functional ca-
pacity;
‘‘(B) having a level of disability similar (as
determined under regulations prescribed by the
Secretary of the Treasury in consultation with
the Secretary of Health and Human Services)
to the level of disability described in subpara-
graph (A); or
‘‘(C) requiring substantial supervision to
protect such individual from threats to health
and safety due to severe cognitive impairment.
‘‘(4) Choice of cash or service benefits (such as
the expense-incurred method or the indemnity meth-
od).
‘‘(5) Inflation protection (whether through sim-
ple or compounded adjustment of benefits).
‘‘(6) Portability of benefits (consistent with
subsections (d) and (f) of section 9003).
‘‘(c) ADDITIONAL SPECIFIC MATTERS TO BE IN-
CLUDED IN AT LEAST ONE CONTRACT.—To the maximum
extent practicable, as of any given time, at least 1 of the
policies being offered under this chapter shall, in addition
to any matter otherwise required under this chapter, pro-
vide for the following:
‘‘(1) Length-of-benefit options.
‘‘(2) Options relating to the provision of cov-
erage in a variety of settings, including nursing
homes, assisted living facilities, and home and com-
munity care.
‘‘(3) Options relating to elimination periods.
‘‘(4) Options relating to nonforfeiture benefits.
‘‘(5) Availability of benefits upon appropriate
certification of medical necessity (as defined by the
Office in consultation with the Secretary of Health
and Human Services) not satisfying the require-
ments of subsection (b)(3).
‘‘(d) GOVERNMENTWIDE PLAN.—
‘‘(1) IN GENERAL.—The Office shall take all
practicable measures to ensure that, of the long-
term care benefits plans available under this chapter
as of any given time, at least one of them shall be
a Governmentwide long-term care benefits plan.
‘‘(2) DEFINITION.—For purposes of this sub-
section, the term ‘long-term care benefits plan’
means a group insurance policy or contract, or simi-
lar group arrangement, provided by a carrier for the
purpose of providing, paying for, or reimbursing ex-
penses for qualified long-term care services.
‘‘(3) 
CLARIFICATION.—Neither 
subsection
(c)(5) nor the exception set forth in the parenthet-
ical matter under subsection (e) shall apply with re-
spect to any Governmentwide plan under this sub-
section.
‘‘(e) COORDINATION
WITH
INTERNAL
REVENUE
CODE OF 1986.—Nothing in this chapter shall be consid-
ered to permit or require the inclusion, in any contract,
of provisions inconsistent with section 7702B or any other
provision of the Internal Revenue Code of 1986 (except
to the extent necessary to carry out subsection (c)(5)).
‘‘(f) COORDINATION WITH STATE REQUIREMENTS.—
If a State (or the District of Columbia) imposes any re-
quirement which is more stringent than the analogous re-
quirement imposed by subsection (b)(1), the requirement
imposed by subsection (b)(1) shall be treated as met if
the more stringent requirement of the State (or the Dis-
trict of Columbia) is met.
‘‘(g) DEFINITIONS.—For purposes of this section:
‘‘(1) ACTIVITIES OF DAILY LIVING.—Each of
the following is an activity of daily living:
‘‘(A) Eating.
‘‘(B) Toileting.
‘‘(C) Transferring.
‘‘(D) Bathing.
‘‘(E) Dressing.
‘‘(F) Continence.
‘‘(2) NURSING
HOME.—The term ‘nursing
home’ has the meaning given such term by section
1908 of the Social Security Act.
‘‘(3) ASSISTED
LIVING
FACILITY.—The term
‘assisted living facility’ has the meaning given such
term by section 232 of the National Housing Act.
‘‘(4) HOME AND COMMUNITY CARE.—The term
‘home and community care’ has the meaning given
such term by section 1929 of the Social Security
Act.
‘‘§ 9005. Financing
‘‘(a) NO GOVERNMENT CONTRIBUTION.—Except as
provided in subsection (b)(2), each individual having long-
term care insurance coverage under this chapter shall be
responsible for 100 percent of the charges for such cov-
erage.
‘‘(b) WITHHOLDINGS.—
‘‘(1) IN GENERAL.—The amount necessary to
pay the charges for enrollment shall—
‘‘(A) in the case of an employee, be with-
held from the pay of such employee;
‘‘(B) in the case of an annuitant, be with-
held from the annuity of such annuitant;
‘‘(C) in the case of a member of the uni-
formed services described in section 9002(b)(3),
be withheld from the basic pay of such member;
and
amounts received under this chapter separate and apart
from all other funds.
‘‘(e) REIMBURSEMENTS.—Contracts under this chap-
ter shall include appropriate provisions under which each
carrier shall reimburse the Office or other administering
entity for the administrative costs incurred by such entity
under this chapter (such as for dispute resolution) which
are allocable to such carrier.
‘‘§ 9006. Regulations
‘‘(a) IN GENERAL.—The Office shall prescribe regu-
lations necessary to carry out this chapter.
‘‘(b) ENROLLMENT.—The regulations of the Office
shall prescribe the time at which and the manner and con-
ditions under which an individual may obtain long-term
care insurance under this chapter, except that, under the
regulations, an open enrollment period shall be afforded
at least once each year (similar to that afforded under sec-
tion 8905(f)).
‘‘(c) CONSULTATION.—Any regulations necessary to
effect the application and operation of this chapter with
respect to an eligible individual described in paragraph (3)
or (4) of section 9002(b), or a qualified relative thereof,
shall be prescribed by the Office in consultation with the
appropriate Secretary.’’.
SEC. 3. EFFECTIVE DATE.
The amendments made by this Act shall take effect
on the date of enactment of this Act, except that no cov-
erage may become effective before the first calendar year
beginning after the expiration of the 18-month period be-
ginning on the date of enactment of this Act.
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