I
106TH CONGRESS
1ST SESSION
H. R. 2102
To amend the Internal Revenue Code of 1986 to allow individuals a deduction
for qualified long-term care insurance premiums and a credit for individ-
uals with long-term care needs, to provide for an individual and employer
educational campaign concerning long-term care insurance, and to amend
title XIX of the Social Security Act to expand State long-term care
partnerships by exempting 75 percent of partnership assets from Med-
icaid estate recovery.
IN THE HOUSE OF REPRESENTATIVES
JUNE 9, 1999
Mrs. JOHNSON of Connecticut (for herself, Mrs. THURMAN, Mrs. KELLY, Mrs.
MORELLA, and Mr. BAKER) introduced the following bill; which was re-
ferred to the Committee on Ways and Means, and in addition to the
Committee on Commerce, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned
A BILL
To amend the Internal Revenue Code of 1986 to allow indi-
viduals a deduction for qualified long-term care insurance
premiums and a credit for individuals with long-term
care needs, to provide for an individual and employer
educational campaign concerning long-term care insur-
ance, and to amend title XIX of the Social Security
Act to expand State long-term care partnerships by ex-
empting 75 percent of partnership assets from Medicaid
estate recovery.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Long-Term Care and
Retirement Security Act of 1999’’.
SEC. 2. DEDUCTION FOR PREMIUMS ON QUALIFIED LONG-
TERM CARE INSURANCE CONTRACTS.
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
additional itemized deductions) is amended by redesig-
nating section 222 as section 223 and by inserting after
section 221 the following new section:
‘‘SEC. 222. PREMIUMS ON QUALIFIED LONG-TERM CARE IN-
SURANCE CONTRACTS.
‘‘(a) IN GENERAL.—In the case of an individual,
there shall be allowed as a deduction an amount equal to
the applicable percentage of the amount of eligible long-
term care premiums (as defined in section 213(d)(10))
paid during the taxable year for coverage for the taxpayer,
his spouse, and dependents under a qualified long-term
care insurance contract (as defined in section 7702B(b)).
‘‘(b) APPLICABLE PERCENTAGE.—For purposes of
subsection (a)—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, the applicable percentage
shall be determined in accordance with the following
table based on the number of years of continuous
coverage (as of the close of the taxable year) of the
individual under a qualified long-term care insurance
contract (as defined in section 7702B(b)):
‘‘If the number of years of
The applicable long-term
continuous coverage is—
care percentage is—
Less than 1 ..................................................................
At least 1 but less than 2 .............................................
At least 2 but less than 3 .............................................
At least 3 but less than 4 .............................................
At least 4 but less than 5 .............................................
At least 5 ......................................................................
100.
‘‘(2) SPECIAL
RULES
FOR
INDIVIDUALS
WHO
HAVE ATTAINED AGE 60.—In the case of an indi-
vidual who has attained age 60 as of the close of the
taxable year, the following table shall be substituted
for the table in paragraph (1).
‘‘If the number of years of
The applicable long-term
continuous coverage is—
care percentage is—
Less than 1 ..................................................................
At least 1 but less than 2 .............................................
At least 2 but less than 3 .............................................
At least 3 ......................................................................
100.
‘‘(3) ONLY COVERAGE AFTER 1999 TAKEN INTO
ACCOUNT.—Only coverage for periods after Decem-
ber 31, 1999, shall be taken into account under this
subsection.
‘‘(4) CONTINUOUS
COVERAGE.—An individual
shall not fail to be treated as having continuous cov-
erage if the aggregate breaks in coverage during any
1-year period are less than 60 days.
‘‘(c) EXCLUSION OF SUBSIDIZED COVERAGE.—Sub-
section (a) shall not apply to any taxpayer for any cal-
endar month for which the taxpayer participates in any
group health plan of an employer or any other entity if
less than 50 percent of the cost of the taxpayer’s coverage
under such plan is borne by the taxpayer.
‘‘(d) SPECIAL RULES.—
‘‘(1) COORDINATION
WITH
MEDICAL
DEDUC-
TION, ETC.—Any amount paid by a taxpayer for any
qualified long-term care insurance contract shall not
be taken into account in computing the amount al-
lowable to the taxpayer as a deduction under section
213(a).
‘‘(2) COORDINATION
WITH
DEDUCTION
FOR
HEALTH INSURANCE COSTS OF SELF-EMPLOYED IN-
DIVIDUALS.—Any amount paid by a taxpayer for
any qualified long-term care insurance contract
which taken into account in computing the amount
allowable to the taxpayer as a deduction under sec-
tion 162(l) shall not be taken into account under
this section.’’
(b) CONFORMING AMENDMENTS.—
(1) Subsection (a) of section 62 of such Code
is amended by inserting after paragraph (17) the
following new item:
‘‘(18) PREMIUMS
ON
QUALIFIED
LONG-TERM
CARE
INSURANCE
CONTRACTS.—The deduction al-
lowed by section 222.’’
(2) The table of sections for part VII of sub-
chapter B of chapter 1 of such Code is amended by
striking the last item and inserting the following
new items:
‘‘Sec. 222. Premiums on qualified long-term care insurance con-
tracts.
‘‘Sec. 223. Cross reference.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
SEC. 3. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE
NEEDS.
(a) ALLOWANCE OF CREDIT.—
(1) IN GENERAL.—Section 24(a) of the Internal
Revenue Code of 1986 (relating to allowance of child
tax credit) is amended to read as follows:
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to the sum of—
‘‘(1) $500 multiplied by the number of quali-
fying children of the taxpayer, plus
‘‘(2) $1,000 multiplied by the number of appli-
cable individuals with respect to whom the taxpayer
is an eligible caregiver for the taxable year.’’
(2) ADDITIONAL CREDIT FOR TAXPAYER WITH
3 OR MORE SEPARATE CREDIT AMOUNTS.—So much
of section 24(d) of such Code as precedes paragraph
(1)(A) thereof is amended to read as follows:
‘‘(d) ADDITIONAL CREDIT FOR TAXPAYERS WITH 3
OR MORE SEPARATE CREDIT AMOUNTS.—
‘‘(1) IN GENERAL.—If the sum of the number
of qualifying children of the taxpayer and the num-
ber of applicable individuals with respect to which
the taxpayer is an eligible caregiver is 3 or more for
any taxable year, the aggregate credits allowed
under subpart C shall be increased by the lesser
of—’’.
(3) CONFORMING AMENDMENTS.—
(A) The heading for section 32(n) of such
Code is amended by striking ‘‘CHILD’’ and in-
serting ‘‘FAMILY CARE’’.
(B) The heading for section 24 is amended
to read as follows:
‘‘SEC. 24. FAMILY CARE CREDIT.’’
(C) The table of sections for subpart A of
part IV of subchapter A of chapter 1 of such
Code is amended by striking the item relating
to section 24 and inserting the following new
item:
‘‘Sec. 24. Family care credit.’’.
(b) DEFINITIONS.—Section 24(c) of such Code (de-
fining qualifying child) is amended to read as follows:
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFYING CHILD.—
‘‘(A) IN GENERAL.—The term ‘qualifying
child’ means any individual if—
‘‘(i) the taxpayer is allowed a deduc-
tion under section 151 with respect to such
individual for the taxable year,
‘‘(ii) such individual has not attained
the age of 17 as of the close of the cal-
endar year in which the taxable year of the
taxpayer begins, and
‘‘(iii) such individual bears a relation-
ship to the taxpayer described in section
32(c)(3)(B).
‘‘(B) EXCEPTION FOR CERTAIN NONCITI-
ZENS.—The term ‘qualifying child’ shall not in-
clude any individual who would not be a de-
pendent if the first sentence of section
152(b)(3) were applied without regard to all
that follows ‘resident of the United States’.
‘‘(2) APPLICABLE INDIVIDUAL.—
‘‘(A) IN GENERAL.—The term ‘applicable
individual’ means, with respect to any taxable
year, any individual who has been certified, be-
fore the due date for filing the return of tax for
the taxable year (without extensions), by a phy-
sician (as defined in section 1861(r)(1) of the
Social Security Act) as being an individual with
long-term care needs described in subparagraph
(B) for a period—
‘‘(i) which is at least 180 consecutive
days, and
‘‘(ii) a portion of which occurs within
the taxable year.
Such term shall not include any individual oth-
erwise meeting the requirements of the pre-
ceding sentence unless within the 391⁄2 month
period ending on such due date (or such other
period as the Secretary prescribes) a physician
(as so defined) has certified that such indi-
vidual meets such requirements.
‘‘(B) INDIVIDUALS WITH LONG-TERM CARE
NEEDS.—An individual is described in this sub-
paragraph if the individual meets any of the fol-
lowing requirements:
‘‘(i) The individual is at least 6 years
of age and—
‘‘(I) is unable to perform (with-
out substantial assistance from an-
other individual) at least 3 activities
of daily living (as defined in section
7702B(c)(2)(B)) due to a loss of
functional capacity, or
‘‘(II) requires substantial super-
vision to protect such individual from
threats to health and safety due to se-
vere cognitive impairment and is un-
able to preform, without reminding or
cuing assistance, at least 1 activity of
at least 1 activity of daily living (as so
defined) or to the extent provided in
regulations prescribed by the Sec-
retary (in consultation with the Sec-
retary of Health and Human Serv-
ices), is unable to engage in age ap-
propriate activities.
‘‘(ii) The individual is at least 2 but
not 6 years of age and is unable due to a
loss of functional capacity to perform
(without substantial assistance from an-
other individual) at least 2 of the following
activities: eating, transferring, or mobility.
‘‘(iii) The individual is under 2 years
of age and requires specific durable med-
ical equipment by reason of a severe health
condition or requires a skilled practitioner
trained to address the individual’s condi-
tion to be available if the individual’s par-
ents or guardians are absent.
‘‘(3) ELIGIBLE CAREGIVER.—
‘‘(A) IN GENERAL.—A taxpayer shall be
treated as an eligible caregiver for any taxable
year with respect to the following individuals:
‘‘(i) The taxpayer.
‘‘(ii) The taxpayer’s spouse.
‘‘(iii) An individual with respect to
whom the taxpayer is allowed a deduction
under section 151 for the taxable year.
‘‘(iv) An individual who would be de-
scribed in clause (iii) for the taxable year
if section 151(c)(1)(A) were applied by
substituting for the exemption amount an
amount equal to the sum of the exemption
amount, the standard deduction under sec-
tion 63(c)(2)(C), and any additional stand-
ard deduction under section 63(c)(3) which
would be applicable to the individual if
clause (iii) applied.
‘‘(v) An individual who would be de-
scribed in clause (iii) for the taxable year
if—
‘‘(I) the requirements of clause
(iv) are met with respect to the indi-
vidual, and
‘‘(II) the requirements of sub-
paragraph (B) are met with respect to
the individual in lieu of the support
test of section 152(a).
‘‘(B) RESIDENCY
TEST.—The require-
ments of this subparagraph are met if an indi-
vidual has as his principal place of abode the
home of the taxpayer and—
‘‘(i) in the case of an individual who
is an ancestor or descendant of the tax-
payer or the taxpayer’s spouse, is a mem-
ber of the taxpayer’s household for over
half the taxable year, or
‘‘(ii) in the case of any other indi-
vidual, is a member of the taxpayer’s
household for the entire taxable year.
‘‘(C) SPECIAL RULES WHERE MORE THAN
1 ELIGIBLE CAREGIVER.—
‘‘(i) IN GENERAL.—If more than 1 in-
dividual is an eligible caregiver with re-
spect to the same applicable individual for
taxable years ending with or within the
same calendar year, a taxpayer shall be
treated as the eligible caregiver if each
such individual (other than the taxpayer)
files a written declaration (in such form
and manner as the Secretary may pre-
scribe) that such individual will not claim
such applicable individual for the credit
under this section.
‘‘(ii) NO AGREEMENT.—If each indi-
vidual required under clause (i) to file a
written declaration under clause (i) does
not do so, the individual with the highest
modified adjusted gross income (as defined
in section 32(c)(5)) shall be treated as the
eligible caregiver.
‘‘(iii) MARRIED
INDIVIDUALS
FILING
SEPARATELY.—In the case of married indi-
viduals filing separately, the determination
under this subparagraph as to whether the
husband or wife is the eligible caregiver
shall be made under the rules of clause (ii)
(whether or not one of them has filed a
written declaration under clause (i)).’’.
(c) IDENTIFICATION REQUIREMENTS.—
(1) IN GENERAL.—Section 24(e) of such Code
is amended by adding at the end the following new
sentence: ‘‘No credit shall be allowed under this sec-
tion to a taxpayer with respect to any applicable in-
dividual unless the taxpayer includes the name and
taxpayer identification number of such individual,
and the identification number of the physician certi-
fying such individual, on the return of tax for the
taxable year.’’.
(2) ASSESSMENT.—Section 6213(g)(2)(I) of
such Code is amended—
(A) by inserting ‘‘or physician identifica-
tion’’ after ‘‘correct TIN’’, and
(B) by striking ‘‘child’’ and inserting
‘‘family care’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
SEC. 4. LONG-TERM CARE EDUCATION CAMPAIGN.
(a) INCLUDING INFORMATION WITH ANNUAL SOCIAL
SECURITY STATEMENTS.—Section 1143(c) of the Social
Security Act (42 U.S.C. 1320b–13(c)) is amended by add-
ing at the end the following:
‘‘(3)(A) The Secretary shall include with the annual
statements under paragraph (2) for individuals who have
attained age 50 information about—
‘‘(i) the limitation on long-term care benefits
provided through the medicare and medicaid pro-
grams under titles XVIII and XIX;
‘‘(ii) what such individuals should look for in
purchasing private long-term care coverage; and
‘‘(iii) the tax benefits that are available to those
who purchase qualified long-term care plans.
‘‘(B) The information described in subparagraph (A)
shall be developed in cooperation with the Health Care Fi-
nancing Administration and representatives of providers
of long-term care services, of medicare and medicaid bene-
ficiaries, and of entities offering long-term care insurance
policies.
‘‘(C) There are authorized to be appropriated from
the Federal Old-Age and Survivors Insurance Trust Fund
such sums as may be necessary to carry out this para-
graph and subsection (d).’’.
(b) TRANSMITTAL
OF INFORMATION
TO EMPLOY-
ERS.—Section 1143 of such Act (42 U.S.C. 1320b–13)
is further amended by adding at the end the following:
‘‘Dissemination of Information to Employers
‘‘(d) The Commissioner of Social Security shall pro-
vide for the transmittal to employers of information—
‘‘(1) concerning the tax benefits available to
employers for the provision of qualified long-term
care insurance coverage; and
‘‘(2) encouraging employers to offer coverage
under qualified long-term care insurance contracts
to their employees and to inform employees about
the information described in subsection (c)(3)(A).’’.
(c) EFFECTIVE DATES.—(1) The amendment made
by subsection (a) applies to annual statements transmitted
more than 1 year after the date of the enactment of this
Act.
(2) The amendment made by subsection (b) takes ef-
fect upon enactment.
SEC. 5. EXPANSION OF STATE LONG-TERM CARE PARTNER-
SHIPS BY EXEMPTING A PORTION OF PART-
NERSHIP ASSETS FROM ESTATE RECOVERY.
(a) IN GENERAL.—Section 1917(b)(1)(C) of the So-
cial Security Act (42 U.S.C. 1396p(b)(1)(C)) is
amended—
(1) in clause (i), by inserting ‘‘or clause (iii)’’
after ‘‘such clause’’; and
(2) by adding at the end the following new
clause:
‘‘(iii) In the case of an individual who receives
medical assistance under a State plan not described
in clause (ii) of a State which has a State plan
amendment approved which provides for the dis-
regard of any assets or resources in the manner de-
scribed in such clause, clause (i) shall not apply to
75 percent of the amounts of the assets or resources
so disregarded.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) take effect on the date of the enactment
of this Act.
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