I 
111TH CONGRESS 
1ST SESSION H. R. 2096 
To amend the Internal Revenue Code of 1986 to allow long-term care insur-
ance to be offered under cafeteria plans and flexible spending arrange-
ments and to provide additional consumer protections for long-term care 
insurance. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 23, 2009 
Mr. POMEROY (for himself, Mr. BOUSTANY, Ms. SCHWARTZ, and Ms. GINNY 
BROWN-WAITE of Florida) introduced the following bill; which was re-
ferred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow long- 
term care insurance to be offered under cafeteria plans 
and flexible spending arrangements and to provide addi-
tional consumer protections for long-term care insurance. 
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 Af-
fordability and Security Act of 2009’’. 
VerDate Nov 24 2008 
06:04 Apr 25, 2009
Jkt 079200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H2096.IH
H2096
SMARTINEZ on PROD1PC64 with BILLS
SEC. 2. TREATMENT OF PREMIUMS ON QUALIFIED LONG- 
TERM CARE INSURANCE CONTRACTS. 
(a) IN GENERAL.— 
(1) CAFETERIA PLANS.—The last sentence of 
section 125(f) of the Internal Revenue Code of 1986 
(defining qualified benefits) is amended by inserting 
before the period at the end ‘‘; except that such term 
shall include the payment of premiums for any quali-
fied long-term care insurance contract (as defined in 
section 7702B) to the extent the amount of such 
payment does not exceed the eligible long-term care 
premiums (as defined in section 213(d)(10)) for 
such contract’’. 
(2) FLEXIBLE
SPENDING
ARRANGEMENTS.— 
Section 106 of such Code (relating to contributions 
by an employer to accident and health plans) is 
amended by striking subsection (c) and redesig-
nating subsection (d) as subsection (c). 
(b) CONFORMING AMENDMENTS.— 
(1) Section 6041 of such Code is amended by 
adding at the end the following new subsection: 
‘‘(h) FLEXIBLE
SPENDING
ARRANGEMENT
DE-
FINED.—For purposes of this section, a flexible spending 
arrangement is a benefit program which provides employ-
ees with coverage under which— 
VerDate Nov 24 2008 
06:04 Apr 25, 2009
Jkt 079200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H2096.IH
H2096
SMARTINEZ on PROD1PC64 with BILLS
‘‘(1) specified incurred expenses may be reim-
bursed (subject to reimbursement maximums and 
other reasonable conditions), and 
‘‘(2) the maximum amount of reimbursement 
which is reasonably available to a participant for 
such coverage is less than 500 percent of the value 
of such coverage. 
In the case of an insured plan, the maximum amount rea-
sonably available shall be determined on the basis of the 
underlying coverage.’’. 
(2) The following sections of such Code are 
each amended by striking ‘‘section 106(d)’’ and in-
serting ‘‘section 106(c)’’: sections 223(b)(4)(B), 
223(d)(4)(C), 
223(f)(3)(B), 
3231(e)(11), 
3306(b)(18), 
3401(a)(22), 
4973(g)(1), 
and 
4973(g)(2)(B)(i). 
(3) Section 6041(f)(1) of such Code is amended 
by striking ‘‘(as defined in section 106(c)(2))’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2008. 
SEC. 3. ADDITIONAL CONSUMER PROTECTIONS FOR LONG- 
TERM CARE INSURANCE. 
(a) ADDITIONAL
PROTECTIONS
APPLICABLE
TO 
LONG-TERM CARE INSURANCE.—Subparagraphs (A) and 
VerDate Nov 24 2008 
06:04 Apr 25, 2009
Jkt 079200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H2096.IH
H2096
SMARTINEZ on PROD1PC64 with BILLS
(B) of section 7702B(g)(2) of the Internal Revenue Code 
of 1986 (relating to requirements of model regulation and 
Act) are amended to read as follows: 
‘‘(A) IN GENERAL.—The requirements of 
this paragraph are met with respect to any con-
tract if such contract meets— 
‘‘(i) MODEL
REGULATION.—The fol-
lowing requirements of the model regula-
tion: 
‘‘(I) Section 6A (relating to guar-
anteed renewal or noncancellability), 
other than paragraph (5) thereof, and 
the requirements of section 6B of the 
model Act relating to such section 6A. 
‘‘(II) Section 6B (relating to pro-
hibitions on limitations and exclu-
sions) other than paragraph (7) there-
of. 
‘‘(III) Section 6C (relating to ex-
tension of benefits). 
‘‘(IV) Section 6D (relating to 
continuation or conversion of cov-
erage). 
VerDate Nov 24 2008 
06:04 Apr 25, 2009
Jkt 079200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H2096.IH
H2096
SMARTINEZ on PROD1PC64 with BILLS
‘‘(V) Section 6E (relating to dis-
continuance and replacement of poli-
cies). 
‘‘(VI) Section 7 (relating to unin-
tentional lapse). 
‘‘(VII) Section 8 (relating to dis-
closure), other than sections 8F, 8G, 
8H, and 8I thereof. 
‘‘(VIII) Section 11 (relating to 
prohibitions against post-claims un-
derwriting). 
‘‘(IX) Section 12 (relating to 
minimum standards). 
‘‘(X) Section 13 (relating to re-
quirement to offer inflation protec-
tion). 
‘‘(XI) Section 25 (relating to pro-
hibition against preexisting conditions 
and probationary periods in replace-
ment policies or certificates). 
‘‘(XII) The provisions of section 
28 relating to contingent nonforfeiture 
benefits, if the policyholder declines 
the offer of a nonforfeiture provision 
VerDate Nov 24 2008 
06:04 Apr 25, 2009
Jkt 079200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H2096.IH
H2096
SMARTINEZ on PROD1PC64 with BILLS
described in paragraph (4) of this 
subsection. 
‘‘(ii) MODEL ACT.—The following re-
quirements of the model Act: 
‘‘(I) Section 6C (relating to pre-
existing conditions). 
‘‘(II) Section 6D (relating to 
prior hospitalization). 
‘‘(III) The provisions of section 8 
relating to contingent nonforfeiture 
benefits, if the policyholder declines 
the offer of a nonforfeiture provision 
described in paragraph (4) of this 
subsection. 
‘‘(B) DEFINITIONS.—For purposes of this 
paragraph— 
‘‘(i) MODEL REGULATION.—The term 
‘model regulation’ means the long-term 
care insurance model regulation promul-
gated by the National Association of Insur-
ance Commissioners (as adopted as of De-
cember 2006). 
‘‘(ii) MODEL ACT.—The term ‘model 
Act’ means the long-term care insurance 
model Act promulgated by the National 
VerDate Nov 24 2008 
06:04 Apr 25, 2009
Jkt 079200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H2096.IH
H2096
SMARTINEZ on PROD1PC64 with BILLS
Association of Insurance Commissioners 
(as adopted as of December 2006). 
‘‘(iii) COORDINATION.—Any provision 
of the model regulation or model Act listed 
under clause (i) or (ii) of subparagraph 
(A) shall be treated as including any other 
provision of such regulation or Act nec-
essary to implement the provision. 
‘‘(iv) 
DETERMINATION.—For 
pur-
poses of this section and section 4980C, 
the determination of whether any require-
ment of a model regulation or the model 
Act has been met shall be made by the 
Secretary.’’. 
(b) 
EXCISE
TAX.—Paragraph 
(1) 
of 
section 
4980C(c) of the Internal Revenue Code of 1986 (relating 
to requirements of model provisions) is amended to read 
as follows: 
‘‘(1) REQUIREMENTS OF MODEL PROVISIONS.— 
‘‘(A) MODEL REGULATION.—The following 
requirements of the model regulation must be 
met: 
‘‘(i) Section 9 (relating to required 
disclosure of rating practices to consumer). 
VerDate Nov 24 2008 
06:04 Apr 25, 2009
Jkt 079200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H2096.IH
H2096
SMARTINEZ on PROD1PC64 with BILLS
‘‘(ii) Section 14 (relating to applica-
tion forms and replacement coverage). 
‘‘(iii) Section 15 (relating to reporting 
requirements). 
‘‘(iv) Section 22 (relating to filing re-
quirements for marketing). 
‘‘(v) Section 23 (relating to standards 
for marketing), including inaccurate com-
pletion of medical histories, other than 
paragraphs (1), (6), and (9) of section 
23C. 
‘‘(vi) Section 24 (relating to suit-
ability). 
‘‘(vii) Section 27 (relating to the right 
to reduce coverage and lower premiums). 
‘‘(viii) Section 31 (relating to stand-
ard format outline of coverage). 
‘‘(ix) Section 32 (relating to require-
ment to deliver shopper’s guide). 
The requirements referred to in clause (vi) shall 
not include those portions of the personal work-
sheet described in Appendix B relating to con-
sumer protection requirements not imposed by 
section 4980C or 7702B. 
VerDate Nov 24 2008 
06:04 Apr 25, 2009
Jkt 079200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H2096.IH
H2096
SMARTINEZ on PROD1PC64 with BILLS
‘‘(B) MODEL ACT.—The following require-
ments of the model Act must be met: 
‘‘(i) Section 6F (relating to right to 
return). 
‘‘(ii) Section 6G (relating to outline of 
coverage). 
‘‘(iii) Section 6H (relating to require-
ments for certificates under group plans). 
‘‘(iv) Section 6J (relating to policy 
summary). 
‘‘(v) Section 6K (relating to monthly 
reports on accelerated death benefits). 
‘‘(vi) Section 7 (relating to incontest-
ability period). 
‘‘(vii) Section 9 (relating to producer 
training requirements). 
‘‘(C) DEFINITIONS.—For purposes of this 
paragraph, the terms ‘model regulation’ and 
‘model Act’ have the meanings given such terms 
by section 7702B(g)(2)(B).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to policies issued more than 1 year 
after the date of the enactment of this Act. 
Æ 
VerDate Nov 24 2008 
06:04 Apr 25, 2009
Jkt 079200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6301
E:\BILLS\H2096.IH
H2096
SMARTINEZ on PROD1PC64 with BILLS