‘‘(5) DISABILITY DETERMINATION SERVICE.— 
The term ‘Disability Determination Service’ means, 
with respect to each State, the entity that has an 
agreement with the Commissioner of Social Security 
to make disability determinations for purposes of 
title II or XVI of the Social Security Act (42 U.S.C. 
401 et seq., 1381 et seq.). 
‘‘(6) ELIGIBLE TIER I BENEFICIARY.— 
‘‘(A) IN GENERAL.—The term ‘eligible tier 
I beneficiary’ means any individual who is an 
active enrollee in the CLASS program and, as 
of the date described in subparagraph (B)— 
‘‘(i) has paid premiums for enrollment 
in such program for at least 60 months; 
and 
‘‘(ii) except as provided in section 
3103(e)(2), has paid premiums for enroll-
ment in such program for at least 12 con-
secutive months if a lapse in premium pay-
ments of more than 3 months has occurred 
during the period that begins on the date 
of the individual’s enrollment and ends on 
the date of such determination. 
‘‘(B) DATE DESCRIBED.—For purpose of 
subparagraph (A), the date described in this 
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subparagraph is the date on which the indi-
vidual is determined— 
‘‘(i) to be unable to perform at least 
2 activities of daily living or to require su-
pervision, cueing, or hands-on assistance to 
plan or perform at least 2 such activities; 
or 
‘‘(ii) due to a cognitive or psychiatric 
impairment, to require supervision, cueing, 
or hands-on assistance to engage in activi-
ties that will enable the individual to per-
form at least 2 of the following critical life 
functions: 
‘‘(I) Communicating. 
‘‘(II) Taking medications. 
‘‘(III) Household management. 
‘‘(IV) Basic money management. 
‘‘(7) ELIGIBLE
TIER
II
BENEFICIARY.—The 
term ‘eligible tier II beneficiary’ means any indi-
vidual who is an eligible tier I beneficiary who has 
been determined— 
‘‘(A) to be unable to perform at least 4 ac-
tivities of daily living or to require supervision, 
cueing, or hands-on assistance to plan or per-
form at least 4 such activities; or 
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‘‘(B) due to a cognitive or psychiatric im-
pairment, to require supervision, cueing, or 
hands-on assistance to engage in activities that 
will enable the individual to perform at least 4 
of the following critical life functions: 
‘‘(i) Communicating. 
‘‘(ii) Taking medications. 
‘‘(iii) Household management. 
‘‘(iv) Basic money management. 
‘‘(8) HOSPITAL; NURSING
FACILITY; INTER-
MEDIATE CARE FACILITY FOR THE MENTALLY RE-
TARDED; INSTITUTION
FOR
MENTAL
DISEASES.— 
The terms ‘hospital’, ‘nursing facility’, ‘intermediate 
care facility for the mentally retarded’, and ‘institu-
tion for mental diseases’ have the meanings given 
such terms for purposes of Medicaid. 
‘‘(9) INDEPENDENCE FUND.—The term ‘Inde-
pendence Fund’ or ‘Fund’ means the fund estab-
lished under section 3105. 
‘‘(10) MEDICAID.—The term ‘Medicaid’ means 
the program established under title XIX of the So-
cial Security Act (42 U.S.C. 1396 et seq.). 
‘‘(11) POVERTY LINE.—The term ‘poverty line’ 
has the meaning given that term in section 
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2110(c)(5) of the Social Security Act (42 U.S.C. 
1397jj(c)(5)). 
‘‘(12) PROTECTION AND ADVOCACY SYSTEM.— 
The term ‘Protection and Advocacy System’ means 
the system for each State established under section 
143 of the Developmental Disabilities Assistance 
and Bill of Rights Act of 2000 (42 U.S.C. 15043). 
‘‘SEC. 3102. AUTOMATIC ENROLLMENT WITH OPT-OUT 
ELECTION. 
‘‘(a) AUTOMATIC ENROLLMENT.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
the Secretary shall establish procedures under which 
each individual described in subsection (c) shall be 
automatically enrolled in the CLASS program by an 
employer of such individual in the same manner as 
an employer may elect to automatically enroll em-
ployees in a plan under section 401(k), 403(b), or 
457 of the Internal Revenue Code of 1986. 
‘‘(2) 
ALTERNATIVE
ENROLLMENT
PROCE-
DURES.—The procedures established under para-
graph (1) shall provide for an alternative enrollment 
process for an individual described in subsection (c) 
in the case of such an individual— 
‘‘(A) who is self-employed; 
‘‘(B) who has more than 1 employer; 
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‘‘(C) whose employer does not elect to par-
ticipate in the automatic enrollment process es-
tablished by the Secretary; or 
‘‘(D) who is a spouse described in para-
graph (2) of such subsection who is not subject 
to automatic enrollment. 
‘‘(3) ADMINISTRATION.— 
‘‘(A) IN GENERAL.—The Secretary shall, 
by regulation, establish procedures to— 
‘‘(i) ensure that an individual is not 
automatically enrolled in the CLASS pro-
gram by more than 1 employer; and 
‘‘(ii) allow for an individual’s em-
ployer to deduct a premium for a spouse 
described in subsection (c)(1)(B) who is 
not subject to automatic enrollment. 
‘‘(B) FORM.—Enrollment in the CLASS 
program shall be made in such manner as the 
Secretary may prescribe in order to ensure ease 
of administration. 
‘‘(b) ELECTION TO OPT-OUT.—An individual de-
scribed in subsection (c) may elect to waive enrollment 
under the CLASS program at any time in such form and 
manner as the Secretary shall prescribe. 
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‘‘(c) INDIVIDUAL DESCRIBED.—For purposes of en-
rolling in the CLASS program, an individual described in 
this subsection is— 
‘‘(1) an individual— 
‘‘(A) who has attained age 18; 
‘‘(B) who— 
‘‘(i) receives wages on which there is 
imposed a tax under section 3101(a) of the 
Internal Revenue Code of 1986; or 
‘‘(ii) derives self-employment income 
on which there is imposed a tax under sec-
tion 1401(a) of the Internal Revenue Code 
of 1986; 
‘‘(C) who is actively at work; and 
‘‘(D) who is not— 
‘‘(i) a patient in a hospital or nursing 
facility, an intermediate care facility for 
the mentally retarded, or an institution for 
mental diseases and receiving medical as-
sistance under Medicaid; or 
‘‘(ii) confined in a jail, prison, other 
penal institution or correctional facility, or 
by court order pursuant to conviction of a 
criminal offense or in connection with a 
verdict or finding described in section 
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‘‘(2) INFLATION ADJUSTED PREMIUM FOR EN-
ROLLMENT IN FIRST YEAR IN WHICH AN INDIVIDUAL 
IS ELIGIBLE TO ENROLL AFTER FIRST YEAR OF THE 
PROGRAM.—The monthly premium for enrollment in 
the CLASS program of any individual who enrolls 
during the first year in which the individual is eligi-
ble to enroll in the program but that occurs after the 
first year in which the program is in effect under 
this title, shall be $30, increased with respect to 
each year that the program is in effect under this 
title until the year of such enrollment, by the per-
centage increase in the consumer price index for all 
urban consumers (U.S. city average) over each such 
preceding year. 
‘‘(3) AGE-ADJUSTED PREMIUMS FOR ENROLL-
MENT IN OTHER YEARS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
determine for each year that is not a year de-
scribed in paragraph (1) or (2), an annual 
monthly premium for enrollment in the CLASS 
program of an individual during the year that 
adjusts the monthly premium that would apply 
to the individual under paragraph (2) if the in-
dividual had enrolled during the first year in 
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which the individual was eligible to enroll in the 
program based on the following: 
‘‘(i) AGE AT ENROLLMENT.—Subject 
to paragraph (4), the age of an individual 
upon the individual’s initial enrollment in 
the program. 
‘‘(ii) ADMINISTRATIVE
EXPENSES.— 
The administrative expenses for the pro-
gram. 
‘‘(B) LIMITATION ON ADMINISTRATIVE EX-
PENSES.— 
‘‘(i) START-UP
ADMINISTRATIVE
EX-
PENSES.—The total amount of annual ex-
penditures incurred for administering the 
CLASS program during each of the first 5 
years in which the program is in effect 
under this title shall not exceed the sum of 
an amount equal to 3 percent of all pre-
miums paid during that year. 
‘‘(ii) SUBSEQUENT
ADMINISTRATIVE 
EXPENSES.—With respect to any year 
after the first 5 years in which the CLASS 
program is in effect under this title, the 
total amount of annual expenditures in-
curred for administering the CLASS pro-
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gram shall not exceed the lesser of an 
amount equal to— 
‘‘(I) 5 percent of the total 
amount of all expenditures (including 
benefits paid) under this title with re-
spect to that year; or 
‘‘(II) the percentage of expendi-
tures incurred under the medicare 
program under title XVIII of the So-
cial Security Act (42 U.S.C. 1395 et 
seq.) for that year that is attributable 
to administering that program. 
‘‘(4) NOMINAL
PREMIUM
FOR
INDIVIDUAL’S 
WITH INCOME THAT DOES NOT EXCEED 150 PER-
CENT OF THE POVERTY LINE.— 
‘‘(A) IN GENERAL.—In the case of an indi-
vidual whose income does not exceed 150 per-
cent of the poverty line, the monthly premium 
for enrollment in the CLASS program shall be 
the applicable amount under subparagraph (B). 
‘‘(B) APPLICABLE
AMOUNT.—The Sec-
retary shall establish premium amounts which 
shall apply to an individual described in sub-
paragraph (A) in lieu of the premium amount 
which would otherwise apply to the individual 
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under paragraph (1), (2), or (3) (whichever is 
applicable). Such amounts shall be nominal 
and, in the case of an individual who, but for 
this paragraph, would be subject to the pre-
mium imposed under paragraph (3), may be ad-
justed in accordance with the factors described 
in that paragraph. 
‘‘(C) 
SELF-ATTESTATION
AND 
VERIFICATION
OF
INCOME.—The Secretary 
shall establish procedures to— 
‘‘(i) permit an individual, as part of 
their automatic enrollment in the CLASS 
program, to self-attest that their income 
does not exceed 150 percent of the poverty 
line; and 
‘‘(ii) verify the validity of such self-at-
testation. 
‘‘(5) ADJUSTMENT OF PREMIUMS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraphs (C) and (D), the amount of the 
monthly premium determined for an individual 
upon such individual’s enrollment in the 
CLASS program shall remain the same for as 
long as the individual is an active enrollee in 
the program. 
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‘‘(B) 
PROGRAM
SOLVENCY
PROJEC-
TIONS.—Beginning with 2012 and every year 
thereafter, the Secretary shall determine with 
respect to the 20-year period that begins with 
that year, the amount of funds held (or pro-
jected to be held) in the Independence Fund es-
tablished under section 3105 that are required 
to pay tier I and tier II benefits under section 
3104 during each year of that period. 
‘‘(C) RECALCULATED
PREMIUM
IF
RE-
QUIRED FOR PROGRAM SOLVENCY.— 
‘‘(i) IN GENERAL.—Subject to clauses 
(ii) and (iii), beginning with 2017 and 
every year thereafter, if the Secretary de-
termines as a result of making the pro-
gram solvency projections required under 
subparagraph (B) that, with respect to the 
20-year period that begins with that year, 
more than 40 percent of the amount of 
funds held (or projected to be held) in the 
Independence Fund established under sec-
tion 3105 are required to pay tier I and 
tier II benefits under section 3104 during 
each year of that period, the Secretary 
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shall adjust the monthly premiums for in-
dividuals enrolled in the CLASS program. 
‘‘(ii) REQUIREMENTS.—In adjusting 
monthly premiums under clause (i), the 
Secretary shall increase the premiums by 
such an amount as will ensure that— 
‘‘(I) the aggregate amount of 
such premiums collected will result in 
not more than 20 percent of the 
amounts held in the Independence 
Fund being required to pay tier I and 
tier II benefits for any one year occur-
ring during the applicable 20-year pe-
riod; 
‘‘(II) with respect to any indi-
vidual enrolled in the program— 
‘‘(aa) the amount of the in-
crease in the individual’s monthly 
premium does not exceed the 
amount equal to 50 percent of 
the premium prior to such in-
crease; and 
‘‘(bb) 
the 
individual’s 
monthly premium does not ex-
ceed the amount equal to 200 
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percent of the initial premium 
amount paid by the individual 
during their first year of enroll-
ment in the program; and 
‘‘(III) the requirements of clause 
(iii) are met. 
The Secretary shall immediately notify 
Congress if the Secretary determines that 
the requirements of this clause cannot be 
satisfied and shall include in such notifica-
tion recommendations for such legislative 
action as the Secretary determines to be 
appropriate. 
‘‘(iii) EXEMPTION FROM INCREASE.— 
Any increase in a monthly premium im-
posed as result of a determination de-
scribed in clause (i) shall not apply with 
respect to the monthly premium of any ac-
tive enrollee who— 
‘‘(I) has attained age 65; 
‘‘(II) has paid premiums for en-
rollment in the program for at least 
20 years; and 
‘‘(III) is not actively at work. 
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‘‘(D) RECALCULATED
PREMIUM
IF
RE-
ENROLLMENT AFTER MORE THAN A 3-MONTH 
LAPSE.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in subsection (e)(2), the reenrollment 
of an individual after a 90-day period dur-
ing which the individual failed to pay the 
monthly premium required to maintain the 
individual’s enrollment in the CLASS pro-
gram shall be treated as an initial enroll-
ment for purposes of age-adjusting the 
premium for enrollment in the program. 
‘‘(ii) CREDIT FOR PRIOR MONTHS.— 
An individual who reenrolls in the CLASS 
program after such a 90-day period shall 
be— 
‘‘(I) credited with any months of 
paid premiums that accrued prior to 
the individual’s lapse in enrollment; 
and 
‘‘(II) notwithstanding the total 
amount of any such credited months, 
required 
to 
satisfy 
section 
3101(6)(B)(ii) before being eligible to 
receive a tier I or tier II benefit. 
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‘‘(6) NO UNDERWRITING REQUIREMENTS.—No 
underwriting shall be used to— 
‘‘(A) determine the monthly premium for 
enrollment in the CLASS program; or 
‘‘(B) prevent an individual from enrolling 
in the program. 
‘‘(c) PAYMENT.— 
‘‘(1) PAYROLL DEDUCTION.—An amount equal 
to the monthly premium for the enrollment in the 
CLASS program of an individual shall be deducted 
from the wages or self-employment income of such 
individual in accordance with such procedures as the 
Secretary, in consultation with the Secretary of the 
Treasury, shall establish for employers who elect to 
deduct and withhold such premiums on behalf of en-
rolled employees. 
‘‘(2) ALTERNATIVE
PAYMENT
MECHANISM.— 
The Secretary shall establish alternative procedures 
for the payment of monthly premiums by an indi-
vidual enrolled in the CLASS program— 
‘‘(A) who does not have an employer who 
elects to deduct and withhold premiums in ac-
cordance with paragraph (1); or 
‘‘(B) who does not earn wages or derive 
self-employment income. 
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‘‘(d) TRANSFER OF PREMIUMS COLLECTED.— 
‘‘(1) IN GENERAL.—During each calendar year 
the Secretary of the Treasury shall deposit into the 
Independence Fund a total amount equal, in the ag-
gregate, to 100 percent of the premiums collected 
during that year. 
‘‘(2) TRANSFERS BASED ON ESTIMATES.—The 
amount deposited pursuant to paragraph (1) shall be 
transferred in at least monthly payments to the 
Independence Fund on the basis of estimates by the 
Secretary and certified to the Secretary of the 
Treasury of the amounts collected in accordance 
with paragraphs (1) and (2) of subsection (c). Prop-
er adjustments shall be made in amounts subse-
quently transferred to the Fund to the extent prior 
estimates were in excess of, or were less than, actual 
amounts collected. 
‘‘(e) CONTRIBUTION PERIOD.— 
‘‘(1) IN GENERAL.—An individual shall not be 
required to pay a monthly premium to maintain the 
individual’s enrollment in the CLASS program dur-
ing the following periods: 
‘‘(A) RECEIVING BENEFITS WHILE UNEM-
PLOYED.—Any period during which the indi-
vidual is— 
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‘‘(i) receiving tier I or tier II benefits; 
and 
‘‘(ii) the individual does not have 
wages or income derived from self-employ-
ment. 
‘‘(B) FULL-TIME
STUDENT
WHO
IS
AC-
TIVELY
AT
WORK.—Any period during which 
the individual is a full-time student (as deter-
mined by the Secretary) who has not attained 
age 22 and is actively at work. 
‘‘(2) APPLICATION OF PREMIUM AMOUNT PRIOR 
TO START OF PERIOD.—Upon the conclusion of a pe-
riod described in paragraph (1) for an individual, 
the individual shall resume paying the monthly pre-
mium amount that applied to the individual imme-
diately prior to the start of such period in order to 
maintain enrollment in the program. 
‘‘SEC. 3104. BENEFITS. 
‘‘(a) DETERMINATION OF ELIGIBILITY.— 
‘‘(1) APPLICATION
FOR
RECEIPT
OF
BENE-
FITS.—The Secretary shall establish procedures 
under which an active enrollee shall apply for receipt 
of tier I or tier II benefits. 
‘‘(2) ELIGIBILITY ASSESSMENTS.— 
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‘‘(A) IN GENERAL.—Not later than Octo-
ber 1, 2012, the Secretary shall enter into 
agreements with— 
‘‘(i) 
the 
Disability 
Determination 
Service for each State to provide for eligi-
bility assessments of active enrollees who 
apply for receipt of benefits; 
‘‘(ii) the Protection and Advocacy 
System for each State to provide advocacy 
services in accordance with subsection (e); 
and 
‘‘(iii) public and private entities to 
provide advice and assistance counseling in 
accordance with subsection (f). 
‘‘(B) 30-DAY PERIOD FOR APPROVAL OR 
DISAPPROVAL.—An agreement under subpara-
graph (A) shall require that a Disability Deter-
mination Service determine within 30 days of 
the receipt of an application for benefits under 
the CLASS program whether an applicant is an 
eligible tier I beneficiary or an eligible tier II 
beneficiary. An application that is pending after 
45 days shall be deemed approved. 
‘‘(C) PRESUMPTIVE ELIGIBILITY FOR CER-
TAIN
INSTITUTIONALIZED
ENROLLEES
PLAN-
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NING TO DISCHARGE.—An active enrollee shall 
be deemed presumptively eligible if the en-
rollee— 
‘‘(i) has applied for receipt of tier II 
benefits; 
‘‘(ii) is a patient in a hospital, nursing 
facility, intermediate care facility for the 
mentally retarded, or an institution for 
mental diseases; and 
‘‘(iii) is in the process of, or about to 
begin the process of, planning to discharge 
from the hospital, facility, or institution. 
‘‘(D) APPEALS.—The Secretary shall es-
tablish procedures under which an applicant for 
benefits under the CLASS program shall be 
guaranteed the right to appeal an adverse de-
termination. 
‘‘(b) TIER I BENEFITS.—An eligible tier I beneficiary 
shall receive the following tier I benefits: 
‘‘(1) DAILY CASH BENEFIT.—A daily cash ben-
efit in the amount of $50 per day. 
‘‘(2) ANNUAL BENEFIT.—An annual benefit in 
an amount not to exceed the amount equal to the 
daily benefit applicable under paragraph (1) (after 
the application of subsection (g)) multiplied by 365. 
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‘‘(1) LIFE INDEPENDENCE ACCOUNTS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish procedures under which tier I daily 
cash benefits and tier II daily cash benefits 
shall be paid on a monthly basis into a Life 
Independence Account established by the Sec-
retary on behalf of each eligible tier I bene-
ficiary or eligible tier II beneficiary. 
‘‘(B) USE OF CASH BENEFITS.—Daily cash 
benefits paid into a Life Independence Account 
of an eligible tier I beneficiary or an eligible tier 
II beneficiary shall be used to purchase non-
medical services and supports that the bene-
ficiary needs to maintain his or her independ-
ence at home or in another residential setting 
of their choice in the community, such as home 
modifications, assistive technology, accessible 
transportation, homemaker services, respite 
care, personal assistance services, and home 
care aides. 
‘‘(C) 
ELECTRONIC
MANAGEMENT
OF 
FUNDS.—The procedures established in accord-
ance with subparagraph (A) shall provide for— 
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‘‘(i) crediting an account established 
on behalf of a beneficiary with the bene-
ficiary’s cash daily benefit; 
‘‘(ii) accessing such account through 
debit cards; and 
‘‘(iii) accounting for withdrawals by 
the beneficiary from such account. 
‘‘(D) PRIMARY PAYOR RULES FOR BENE-
FICIARIES WHO ARE ENROLLED IN MEDICAID.— 
In the case of an eligible tier I beneficiary or 
an eligible tier II beneficiary who is enrolled in 
Medicaid, the following payment rules shall 
apply: 
‘‘(i) 
INSTITUTIONALIZED
BENE-
FICIARY.—If the beneficiary is a patient in 
a hospital, nursing facility, intermediate 
care facility for the mentally retarded, or 
an institution for mental diseases, the ben-
eficiary shall retain an amount equal to 5 
percent of the beneficiary’s daily cash ben-
efit (which shall be in addition to the 
amount of the beneficiary’s personal needs 
allowance provided under Medicaid), and 
the remainder of such benefit shall be ap-
plied toward the facility’s cost of providing 
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the beneficiary’s care, and Medicaid shall 
provide secondary coverage for such care. 
‘‘(ii) 
BENEFICIARIES
RECEIVING 
HOME
AND
COMMUNITY-BASED
SERV-
ICES.— 
‘‘(I) 50 PERCENT OF DAILY BEN-
EFIT RETAINED BY BENEFICIARY.—If 
a beneficiary is receiving medical as-
sistance under Medicaid for home and 
community-based services, the bene-
ficiary shall retain an amount equal to 
50 percent of the beneficiary’s daily 
cash benefit, subject to subclause (II), 
and the remainder of the daily cash 
benefit shall be applied toward the 
cost to the State of providing such as-
sistance (and shall not be used to 
claim Federal matching funds under 
Medicaid), and Medicaid shall provide 
secondary coverage for the remainder 
of any costs incurred in providing 
such assistance. 
‘‘(II) REQUIREMENT FOR STATE 
OFFSET.—A State shall be paid the 
remainder of a beneficiary’s daily cash 
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benefit under subclause (I) only if the 
State home and community-based 
waiver under section 1115 of the So-
cial Security Act (42 U.S.C. 1315) or 
subsection (c) or (d) of section 1915 
of such Act (42 U.S.C. 1396n) does 
not include a waiver of the require-
ments of section 1902(a)(1) of the So-
cial 
Security 
Act 
(relating 
to 
statewideness) 
or 
of 
section 
1902(a)(10)(B) of such Act (relating 
to comparability) and the State offers 
at a minimum case management serv-
ices, personal care services, habili-
tation services, and respite care under 
such a waiver. 
‘‘(III) DEFINITION OF HOME AND 
COMMUNITY-BASED
SERVICES.—In 
this clause, the term ‘home and com-
munity-based services’ means any 
services which may be offered under a 
home and community-based waiver 
authorized for a State under section 
1115 of the Social Security Act (42 
U.S.C. 1315) or subsection (c) or (d) 
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of section 1915 of such Act (42 
U.S.C. 1396n). 
‘‘(2) AUTHORIZED REPRESENTATIVES.— 
‘‘(A) IN GENERAL.—The procedures estab-
lished under paragraph (1)(A) shall allow for 
access to tier I daily benefits or tier II daily 
benefits by an authorized representative of the 
eligible tier I beneficiary or eligible tier II bene-
ficiary on whose behalf such benefits are paid. 
‘‘(B) QUALITY ASSURANCE AND PROTEC-
TION AGAINST FRAUD AND ABUSE.—The Sec-
retary shall include in the procedures estab-
lished under paragraph (1) standards of con-
duct for authorized representatives of eligible 
tier I beneficiaries and eligible tier II bene-
ficiaries to ensure that authorized representa-
tives provide quality services on behalf of such 
beneficiaries, do not have conflicts of interest, 
and do not misuse benefits paid on behalf of 
such beneficiaries or otherwise engage in fraud 
or abuse. 
‘‘(3) COMMENCEMENT
OF
BENEFITS.—Tier I 
benefits or tier II benefits, as applicable, shall be 
paid to, or on behalf of, an eligible tier I beneficiary 
or an eligible tier II beneficiary, respectively, begin-
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ning with the first month in which an application for 
such benefits is approved. 
‘‘(4) ROLLOVER OPTION FOR LUMP-SUM PAY-
MENT.—An eligible tier I beneficiary or an eligible 
tier II beneficiary may elect to— 
‘‘(A) defer payment of their daily benefit 
and to rollover any such deferred benefits from 
month-to-month, but not from year-to-year; and 
‘‘(B) receive a lump-sum payment of such 
deferred benefits in an amount that may not 
exceed the lesser of— 
‘‘(i) the total amount of the accrued 
deferred benefits; or 
‘‘(ii) the applicable annual benefit. 
‘‘(5) PERIOD FOR DETERMINATION OF ANNUAL 
BENEFITS.— 
‘‘(A) IN GENERAL.—The applicable period 
for determining with respect to an eligible tier 
I beneficiary or an eligible tier II beneficiary 
the applicable annual benefit and the amount of 
any accrued deferred benefits is the 12-month 
period that commences with the first month in 
which the beneficiary began to receive such ben-
efits, and each 12-month period thereafter. 
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