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Title III, Subtitle B
‘‘SEC. 2718. CIVIL MONEY PENALTY.
‘‘(a) CARRIER.—Any carrier, association or its sub-
sidiary that sells or offers for sale a long-term care insur-
ance policy and that—
‘‘(1) fails to make a refund in accordance with
section 2713(a);
‘‘(2) fails to transmit a policy in accordance
with section 2713(b);
‘‘(3) fails to provide, make available, or report
information in accordance with subsections (c) or (d)
of section 2713;
‘‘(4) provides a commission or compensation in
violation of section 2713(e);
‘‘(5) fails to provide an outline of coverage in
violation of section 2715(b)(1); or
‘‘(6) issues a policy without obtaining certain
information in violation of section 2715(f);
is subject to a civil money penalty of not to exceed $25,000
for each such violation.
‘‘(b) AGENTS.—Any agent that sells or offers for sale
a long-term care insurance policy and that—
‘‘(1) fails to make a refund in accordance with
section 2713(a);
‘‘(2) fails to transmit a policy in accordance
with section 2713(b);
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‘‘(3) fails to provide, make available, or report
information in accordance with subsections (c) or (d)
of section 2713;
‘‘(4) fails to provide an outline of coverage in
violation of section 2715(b)(1); or
‘‘(5) issues a policy without obtaining certain
information in violation of section 2715(f);
is subject to a civil money penalty of not to exceed $15,000
for each such violation.
‘‘PART C—LONG-TERM CARE INSURANCE POLICIES,
DEFINITION AND ENDORSEMENTS
‘‘SEC. 2721. LONG-TERM CARE INSURANCE POLICY DE-
FINED.
‘‘(a) IN GENERAL.—As used in this section, the term
‘long-term care insurance policy’ means any insurance pol-
icy, rider or certificate advertised, marketed, offered or de-
signed to provide coverage for not less than 12 consecutive
months for each covered person on an expense incurred,
indemnity prepaid or other basis, for one or more nec-
essary diagnostic, preventive, therapeutic, rehabilitative,
maintenance or personal care services, provided in a set-
ting other than an acute care unit of a hospital. Such term
includes—
‘‘(1) group and individual annuities and life in-
surance policies, riders or certificates that provide
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Title III, Subtitle B
directly, or that supplement long-term care insur-
ance; and
‘‘(2) a policy, rider or certificates that provides
for payment of benefits based on cognitive impair-
ment or the loss of functional capacity.
‘‘(b) ISSUANCE.—Long-term care insurance policies
may be issued by—
‘‘(1) carriers;
‘‘(2) fraternal benefit societies;
‘‘(3) nonprofit health, hospital, and medical
service corporations;
‘‘(4) prepaid health plans;
‘‘(5) health maintenance organizations; or
‘‘(6) any similar organization to the extent they
are otherwise authorized to issue life or health insur-
ance.
‘‘(c) POLICIES EXCLUDED.—The term ‘long-term
care insurance policy’ shall not include any insurance pol-
icy, rider or certificate that is offered primarily to provide
basic Medicare supplement coverage, basic hospital ex-
pense coverage, basic medical-surgical expense coverage,
hospital confinement indemnity coverage, major medical
expense coverage, disability income or related asset-protec-
tion coverage, accident only coverage, specified disease or
specified accident coverage, or limited benefit health cov-
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Title III, Subtitle B
erage. With respect to life insurance, such term shall not
include life insurance policies, riders or certificates that
accelerate the death benefit specifically for one or more
of the qualifying events of terminal illness, medical condi-
tions requiring extraordinary medical intervention, or per-
manent institutional confinement, and that provide the op-
tion of a lump-sum payment for those benefits and in
which neither the benefits nor the eligibility for the bene-
fits is conditioned upon the receipt of long-term care.
‘‘(d) APPLICATIONS.—Notwithstanding any other
provision of this title, this title shall apply to any product
advertised, marketed or offered as a long-term insurance
policy, rider or certificate.
‘‘SEC. 2722. CODE OF CONDUCT WITH RESPECT TO EN-
DORSEMENTS.
‘‘Not later than 1 year after the date of enactment
of this title the NAIC shall issue guidelines that shall
apply to organizations and associations, other than em-
ployers and labor organizations that do not accept com-
pensation, and their subsidiaries that provide endorse-
ments of long-term care insurance policies, or that permit
such policies to be offered for sale through the organiza-
tion or association. Such guidelines shall include at mini-
mum the following:
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Title III, Subtitle B
‘‘(1) In endorsing or selling long-term care in-
surance policies, the primary responsibility of an or-
ganization or association shall be to educate their
members concerning such policies and assist such
members in making informed decisions. Such organi-
zations and associations may not function primarily
as sales agents for insurance companies.
‘‘(2) Organizations and associations shall pro-
vide objective information regarding long-term care
insurance policies sold or endorsed by such organiza-
tions and associations to ensure that members of
such organizations and associations have a balanced
and complete understanding of both the strengths
and weaknesses of the policies that are being en-
dorsed or sold.
‘‘(3) Organizations and associations selling or
endorsing long-term care insurance policies shall dis-
close in marketing literature provided to their mem-
bers concerning such policies the manner in which
such policies and the insurance company issuing
such policies were selected. If the organization or as-
sociation and the insurance company have interlock-
ing directorates, the organization or association shall
disclose such fact to their members.
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Title III, Subtitle B
‘‘(4) Organizations and associations selling or
endorsing long-term care insurance policies shall dis-
close in marketing literature provided to their mem-
bers concerning such policies the nature and amount
of the compensation arrangements (including all
fees, commissions, administrative fees and other
forms of financial support that the organization or
association receives) from the endorsement or sale of
the policy to its members.
‘‘(5) The Boards of Directors of organizations
and associations selling or endorsing long-term care
insurance policies, if such organizations and associa-
tions have a Board of Directors, shall review and ap-
prove such insurance policies, the compensation ar-
rangements and the marketing materials used to
promote sales of such policies.
‘‘PART D—MISCELLANEOUS PROVISIONS
‘‘SEC. 2731. FUNDING FOR LONG-TERM CARE INSURANCE
INFORMATION, COUNSELING, AND ASSIST-
ANCE.
‘‘(a) IN GENERAL.—The Secretary, acting through
the Public Health Service, may award grants to States,
and national organizations with demonstrated experience
in long-term care insurance, for the establishment of pro-
grams to provide information, counseling, and assistance
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Title III, Subtitle B
licensed or required to be licensed under State
law for such purpose; and
‘‘(B) after the date referred to in subpara-
graph (A), an individual who meets the training
and certification requirements established under
section 2712(f).
‘‘(2) ASSOCIATION.—The term ‘association’ in-
cludes the association and its subsidiaries.
‘‘(3) CARRIER.—The term ‘carrier’ means any
person that offers a health benefit plan, whether
through insurance or otherwise, including a licensed
insurance company, a prepaid hospital or medical
service plan, a health maintenance organization, a
self-insured carrier, a reinsurance carrier, and a
multiple employer welfare arrangement (a combina-
tion of employers associated for the purpose of pro-
viding health benefit plan coverage for their employ-
ees).’’.
(b) CONFORMING AMENDMENTS.—
(1) Sections 2701 through 2714 of the Public
Health Service Act (42 U.S.C. 300cc through
300cc–15) are redesignated as sections 2801
through 2814, respectively.
(2) Sections 465(f) and 497 of such Act (42
U.S.C. 286(f) and 289(f)) are amended by striking
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Title III, Subtitle C
‘‘2701’’ each place that such appears and inserting
‘‘2801’’.
Subtitle C—Protection of Assets
Under Medicaid Through Use of
Qualified Long-term Care Insur-
ance
SEC. 3201. PROTECTION OF ASSETS THROUGH USE OF
QUALIFIED LONG-TERM CARE INSURANCE.
(a) IN GENERAL.—Title XIX of the Social Security
Act, as amended by sections 1601(a) and 1701(a), is
amended—
(1) by redesignating section 1933 as section
1934; and
(2) by inserting after section 1932 the following
new section:
‘‘SPECIAL RULES FOR ASSET DISREGARD IN THE CASE OF
QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS
‘‘SEC. 1933. (a) IN GENERAL.—Each State plan
under this title may provide, subject to subsection (d), that
in determining the eligibility of an individual for medical
assistance under the plan with respect to such services
there shall be disregarded some or all of the individual’s
assets which are attributable (as determined under sub-
section (c)(2)) to coverage under a qualified long-term
care insurance contract (as defined in subsection (b)).
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Title III, Subtitle C
‘‘(b) QUALIFIED
LONG-TERM
CARE
INSURANCE
CONTRACT DEFINED.—In this section, the term ‘qualified
long-term care insurance contract’ means, with respect to
a State, a long-term care insurance contract (as defined
in section 818A(b) of the Internal Revenue Code of 1986)
which—
‘‘(1) provides such protection against the costs
of receiving long-term care services as the State may
require by law;
‘‘(2) provides that benefits under the contract
shall be paid without regard to eligibility for medical
assistance under this title; and
‘‘(3) meets such other requirements (such as re-
quirements relating to premiums, disclosure, mini-
mum benefits, rights of conversion, and standards
for claims processing) as the State may determine to
be appropriate.
‘‘(c) OTHER DEFINITIONS.—In this section:
‘‘(1) LONG-TERM CARE SERVICES.—The term
‘long-term care services’ means nursing facility serv-
ices, home health care services, and home and com-
munity-based services, and includes such other simi-
lar items and services described in section 1905(a)
as a State may specify.
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Title III, Subtitle C
‘‘(2) ATTRIBUTION RULES.—An individual’s as-
sets are considered to be ‘attributable’ to a qualified
long-term care insurance contract to the extent spec-
ified under the State plan. Such a plan shall provide
for at least one of the following:
‘‘(A) All assets are considered attributable
if the insurance contract provides coverage for
at least a specified period of coverage (of not
less than 3 years and of not more than 6 years)
for long-term care services.
‘‘(B) An amount of assets, up to the dollar
limitation on benefits for long-term care serv-
ices under the contract, is considered attrib-
utable to the contract.
‘‘(d) LIMITATION.—In no case shall this section re-
sult in (1) the total Federal payments to the State for
the quarter under this title (including payments attrib-
utable to this section), exceeding (2) the total Federal pay-
ments that the Secretary estimates would have been paid
under this title to the State for the quarter if the State
did not provide for the determination of eligibility in ac-
cordance with subsection (a).’’.
(b) 
CONFORMING
AMENDMENT.—Section
1902(a)(17)(A) of such Act (42 U.S.C. 1396a(a)(17)(A))
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Title III, Subtitle C
is amended by inserting ‘‘and section 1932’’ after ‘‘objec-
tives of this title’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply (except as provided under
paragraph (2)) to payments to States under title
XIX of the Social Security Act for calendar quarters
beginning on or after one year after the date of the
enactment of this Act, without regard to whether
regulations to implement such amendment are pro-
mulgated by such date.
(2) DELAY PERMITTED IF STATE LEGISLATION
REQUIRED.—In the case of a State plan for medical
assistance under title XIX of the Social Security Act
which the Secretary of Health and Human Services
determines requires State legislation (other than leg-
islation authorizing or appropriating funds) in order
for the plan to meet the additional requirements im-
posed by the amendments made by this section, the
State plan shall not be regarded as failing to comply
with the requirements of such title solely on the
basis of its failure to meet these additional require-
ments before the first day of the first calendar quar-
ter beginning after the close of the first regular ses-
sion of the State legislature that begins after the
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Title III, Subtitle D
date of the enactment of this Act. For purposes of
the previous sentence, in the case of a State that
has a 2-year legislative session, each year of such
session shall be deemed to be a separate regular ses-
sion of the State legislature.
Subtitle D—Studies
SEC. 3301. FEASIBILITY OF ENCOURAGING HEALTH CARE
PROVIDERS TO DONATE SERVICES TO HOME-
BOUND PATIENTS.
The Comptroller General of the United States shall
conduct a study on the feasibility of encouraging health
care providers to donate their services to homebound pa-
tients. Such study shall include an examination of the ef-
fects of qualifying such services as a charitable contribu-
tion.
SEC. 3302. FEASIBILITY OF TAX CREDIT FOR HEADS OF
HOUSEHOLDS WHO CARE FOR ELDERLY FAM-
ILY MEMBERS IN THEIR HOMES.
The Comptroller General of the United States shall
conduct a study on the feasibility of providing heads of
households who care for elderly family members in their
homes with a tax credit. Such study shall estimate the
cost of such a tax credit which would apply to expenses
incurred in the custodial care of such an elderly family
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Title III, Subtitle D
member to the extent such expenses exceed 5 percent of
adjusted gross income.
SEC. 3303. CASE MANAGEMENT OF CURRENT LONG-TERM
CARE BENEFITS.
(a) IN GENERAL.—The Secretary of Health and
Human Services shall conduct a study of the feasibility
of encouraging or requiring the use of a single designated
public or nonprofit agency (such as an area agency on
aging) to coordinate, through case management, the provi-
sion of long-term care benefits under current Federal,
State, and local programs in a geographic area.
(b) REPORT.—The Secretary shall submit to Con-
gress a report on the study conducted under subsection
(a) by not later than 1 year after the date of the enact-
ment of this Act. Such report shall include such rec-
ommendations regarding changes in legislation to encour-
age or require the use (described in subsection (a)) of an
agency to coordinate long-term care benefits as may be
appropriate.
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Title III, Subtitle E
Subtitle E—Volunteer Service
Credit Demonstration Projects
SEC. 3401. AMENDMENT TO THE OLDER AMERICANS ACT
OF 1965.
(a) IN GENERAL.—Part B of title IV of the Older
Americans Act of 1965 (42 U.S.C. 3034–3035r) is amend-
ed by adding at the end the following:
‘‘SEC. 429K. VOLUNTEER SERVICE CREDIT DEMONSTRA-
TION PROJECTS.
‘‘(a) REQUIREMENTS.—The Commissioner shall—
‘‘(1) establish and operate (directly, or through
the State agency on aging or one or more area agen-
cies on aging) a volunteer service credit demonstra-
tion project in all or part of each State;
‘‘(2) establish criteria for selecting individuals
to whom volunteer services will be provided under
volunteer service credit demonstration projects oper-
ated under paragraph (1);
‘‘(3) recruit and train (directly or through State
agencies on aging or area agencies on aging) individ-
uals who volunteer to provide services through such
projects;
‘‘(4) establish a minimum standard for each
service to be provided by volunteers through such
projects;
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Title III, Subtitle E
‘‘(5) monitor services provided by volunteers
through such projects to ensure that standards es-
tablished under paragraph (4) are met; and
‘‘(6) maintain (directly or through State agen-
cies on aging or area agencies on aging) with respect
to each individual who provides services through a
volunteer service credit demonstration project oper-
ated under paragraph (1) a separately identifiable
account showing the number of hours such individ-
ual provided such services.
‘‘(b) DEFINITION.—For purposes of subsection (a),
the term ‘volunteer service credit demonstration project’
means a demonstration project through which homemaker
services, respite care for families, adult day care, and edu-
cational, transportation, and home-delivery services are
provided by—
‘‘(1) volunteer older individuals for the benefit
of older individuals or low-income children; or
‘‘(2) volunteer individuals of any age for the
benefit of older individuals;
in return for the receipt of similar services under any such
demonstration project (that is established under this sec-
tion) at a time at which such volunteers are older individ-
uals in need of such services.’’.
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Title III, Subtitle E
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect October 1, 1995.
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