sulting contract (hereinafter in this chapter referred to as
a ‘master contract’) is awarded on the basis of contractor
qualifications, price, and reasonable competition.
‘‘(b) TERMS AND CONDITIONS.—
‘‘(1) IN
GENERAL.—Each master contract
under this chapter shall contain—
‘‘(A) a detailed statement of the benefits
offered (including any maximums, limitations,
exclusions, and other definitions of benefits);
‘‘(B) the premiums charged (including any
limitations or other conditions on their subse-
quent adjustment);
‘‘(C) the terms of the enrollment period;
and
‘‘(D) such other terms and conditions as
may be mutually agreed to by the Office and
the carrier involved, consistent with the require-
ments of this chapter.
‘‘(2) PREMIUMS.—Premiums charged under
each master contract entered into under this section
shall reasonably and equitably reflect the cost of the
benefits provided, as determined by the Office. The
premiums shall not be adjusted during the term of
the contract unless mutually agreed to by the Office
and the carrier.
‘‘(3) 
NONRENEWABILITY.—Master 
contracts
under this chapter may not be made automatically
renewable.
‘‘(c) PAYMENT OF REQUIRED BENEFITS; DISPUTE
RESOLUTION.—
‘‘(1) IN
GENERAL.—Each master contract
under this chapter shall require the carrier to
agree—
‘‘(A) to provide payments or benefits to an
eligible individual if such individual is entitled
thereto under the terms of the contract; and
‘‘(B) to participate in administrative proce-
dures designed to expeditiously resolve disputes
regarding claims for payments or benefits under
the terms of the contract, including, in appro-
priate circumstances, 1 or more alternative
means of dispute resolution involving inde-
pendent third-party review.
‘‘(2) ELIGIBILITY.—A carrier’s determination
as to whether or not a particular individual is eligi-
ble to obtain long-term care insurance coverage
under this chapter shall be subject to review only to
the extent and in the manner provided in the appli-
cable master contract.
‘‘(4) OTHER CLAIMS.—Disputes arising under
this chapter between a carrier and the Office shall,
after exhaustion of administrative remedies, be sub-
ject to de novo judicial review under section 9007.
‘‘(5) RULE
OF
CONSTRUCTION.—Nothing in
this chapter shall be considered to grant authority
for the Office or a third-party reviewer to change the
terms of any contract under this chapter.
‘‘(d) DURATION.—
‘‘(1) IN
GENERAL.—Each master contract
under this chapter shall be for a term of 7 years,
unless terminated earlier by the Office in accordance
with the terms of such contract. However, the rights
and responsibilities of the enrolled individual, the in-
surer, and the Office (or duly designated third-party
administrator) under such contract shall continue
with respect to such individual until the termination
of coverage of the enrolled individual or the effective
date of a successor contract thereto.
‘‘(2) EXCEPTION.—
‘‘(A) SHORTER DURATION.—In the case of
a master contract entered into before the end of
the period described in subparagraph (B), para-
graph (1) shall be applied by substituting ‘end-
ing on the last day of the 7-year period de-
scribed in paragraph (2)(B)’ for ‘7 years’.
‘‘(B) DEFINITION.—The period described
in this subparagraph is the 7-year period begin-
ning on the earliest date as of which any long-
term care insurance coverage under this chapter
becomes effective.
‘‘(3) CONGRESSIONAL NOTIFICATION.—No later
than 180 days after receiving the second report re-
quired under section 9006(c), the Office of Per-
sonnel Management shall submit to the Committees
on Government Reform and on Armed Services of
the House of Representatives and the Committees
on Governmental Affairs and on Armed Services of
the Senate, a written recommendation as to whether
the program under this chapter should be continued
without modification, terminated, or restructured.
During the 180-day period following the date on
which it submits its recommendation under this
paragraph, the Office may not take any steps to
rebid or otherwise contract for any coverage to be
available at any time following the expiration of the
7-year period described in paragraph (2)(B).
‘‘(4) FULL
PORTABILITY.—Each master con-
tract under this chapter shall include such provisions
as may be necessary to ensure that, once an indi-
vidual becomes duly enrolled, long-term care insur-
ance coverage obtained by such individual pursuant
to that enrollment shall not be terminated due to
any change in status (such as separation from Gov-
ernment service or the uniformed services) or ceas-
ing to meet the requirements for being considered a
qualified relative (whether as a result of dissolution
of marriage or otherwise).
‘‘§ 9004. Financing
‘‘(a) IN GENERAL.—Each eligible individual obtain-
ing long-term care insurance coverage under this chapter
shall be responsible for 100 percent of the premiums for
such coverage.
‘‘(b) WITHHOLDINGS.—
‘‘(1) IN GENERAL.—The amount necessary to
pay the premiums for enrollment may—
‘‘(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 9001(3), be
withheld from the basic pay of such member;
and
‘‘(D) in the case of a retired member of
the uniformed services described in section
9001(4), be withheld from the retired pay or re-
tainer pay payable to such member.
‘‘(2) VOLUNTARY WITHHOLDINGS FOR QUALI-
FIED
RELATIVES.—Withholdings to pay the pre-
miums for enrollment of a qualified relative may,
upon election of the appropriate eligible individual
(described in section 9001(1)–(4)), be withheld
under paragraph (1) to the same extent and in the
same manner as if enrollment were for such indi-
vidual.
‘‘(c) DIRECT
PAYMENTS.—All amounts withheld
under this section shall be paid directly to the carrier.
‘‘(d) OTHER FORMS
OF PAYMENT.—Any enrollee
who does not elect to have premiums withheld under sub-
section (b) or whose pay, annuity, or retired or retainer
pay (as referred to in subsection (b)(1)) is insufficient to
cover the withholding required for enrollment (or who is
not receiving any regular amounts from the Government,
as referred to in subsection (b)(1), from which any such
withholdings may be made, and whose premiums are not
otherwise being provided for under subsection (b)(2)) shall
pay an amount equal to the full amount of those charges
directly to the carrier.
‘‘(e) SEPARATE ACCOUNTING REQUIREMENT.—Each
carrier participating under this chapter shall maintain
records that permit it to account for all amounts received
under this chapter (including investment earnings on
those amounts) separate and apart from all other funds.
‘‘(f) REIMBURSEMENTS.—
‘‘(1) The Office shall have access to the unused
funds in the Administrative Reserve of the Employ-
ees Health Benefits Fund for its reasonable ex-
penses in administering this chapter, including rea-
sonable initial implementation costs.
‘‘(2) Each master contract under this chapter
shall include appropriate provisions under which the
carrier involved shall reimburse the Employees
Health Benefits Fund for funds accessed under
paragraph (1) (including lost investment income), on
a pro rata basis.
‘‘§ 9005. Preemption
The terms of any contract under this chapter which
relate to the nature, provision, or extent of coverage or
benefits (including payments with respect to benefits)
shall supersede and preempt any State or local law, or
any regulation issued thereunder, which relates to long-
term care insurance or contracts.
‘‘§ 9006. Studies, reports, and audits
‘‘(a) PROVISIONS RELATING TO CARRIERS.—Each
master contract under this chapter shall contain provi-
sions requiring the carrier—
‘‘(1) to furnish such reasonable reports as the
Office of Personnel Management determines to be
necessary to enable it to carry out its functions
under this chapter; and
‘‘(2) to permit the Office and representatives of
the General Accounting Office to examine such
records of the carrier as may be necessary to carry
out the purposes of this chapter.
‘‘(b) PROVISIONS RELATING
TO FEDERAL AGEN-
CIES.—Each Federal agency shall keep such records,
make such certifications, and furnish the Office, the car-
rier, or both, with such information and reports as the
Office may require.
‘‘(c) REPORTS BY THE GENERAL ACCOUNTING OF-
FICE.—The General Accounting Office shall prepare and
submit to the Office of Personnel Management and each
House of Congress, before the end of the third and fifth
years during which the program under this chapter is in
effect, a written report evaluating such program. Each
such report shall include an analysis of the competitive-
ness of the program, as compared to both group and indi-
vidual coverage generally available to individuals in the
private insurance market. The Office shall cooperate with
the General Accounting Office to provide periodic evalua-
tions of the program.
‘‘§ 9007. Jurisdiction of courts
‘‘The district courts of the United States have origi-
nal jurisdiction of a civil action or claim against the
United States or a carrier founded on this chapter, after
exhausting such administrative remedies as required
under section 9003(c)(2) or (4), but only to the extent
judicial review is not precluded by any dispute resolution
or other administrative remedy under this chapter. In
cases against the United States, the jurisdiction of the dis-
trict courts shall be concurrent with the United States
Court of Federal Claims.
‘‘§ 9008. Administrative functions
‘‘(a) IN GENERAL.—The Office shall prescribe regu-
lations necessary to carry out this chapter.
‘‘(b) ENROLLMENT PERIODS.—The Office shall pro-
vide for periodic coordinated enrollment, promotion, and
education efforts in consultation with the carriers.
‘‘(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 9001, or a qualified relative thereof, shall
be prescribed by the Office in consultation with the appro-
priate Secretary.
‘‘§ 9009. Cost accounting standards
The cost accounting standards issued pursuant to
section 26(f) of the Office of Federal Procurement Policy
Act (41 U.S.C. 422(f)) shall not apply with respect to a
long-term care insurance contract under this chapter.’’.
(b) CONFORMING AMENDMENT.—The analysis for
part III of title 5, United States Code, is amended by add-
ing at the end of subpart G the following:
‘‘90. Long-Term Care Insurance .........................................................
9001.’’.
SEC. 3. EFFECTIVE DATE.
The Office of Personnel Management shall take such
measures as may be necessary to ensure that long-term
care insurance coverage under title 5, United States Code,
as amended by this Act, may be obtained in time to take
effect not later than the first day of the first applicable
pay period of the first fiscal year which begins after the
end of the 18-month period beginning on the date of en-
actment of this Act.
Æ