• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
California Health Advocates

California Health Advocates

  • Contact
  • Home
  • About Us
    • Contact
    • Our Team
    • Mission
    • Education Services
    • About HICAP
    • Press
    • Testimonials
  • MEDICARE COUNSELING
  • Fact Sheets
  • Topics
    • The Basics
    • Prescription Drugs
    • Low-Income Help
    • Medigap
    • Medicare Advantage
    • Other Health Insurance
    • Appeals
    • Billing & Claims
    • Disabilities
    • Long-Term Care
    • Tribal Nations & Medicare
    • Health Care Reform
    • Advocacy & Policy
    • Glossary
  • Fraud & Abuse
  • Blog
  • Donate

The CLASS Act: Health Reform Creates New Voluntary Long-Term Care Insurance Program

California Health Advocates > News > Long-Term Care > The CLASS Act: Health Reform Creates New Voluntary Long-Term Care Insurance Program

Posted by Karen Fletcher on June 30, 2010

Note: The CLASS Act was repealed in January 2013; it will not be implemented. Instead, the government has appointed a 15-member Federal Long Term Care Commission to compile recommendations for addressing the substantial long-term care needs of our growing elder population. More info will be posted soon.

The health care reform legislation, the Patient Protection and Affordable Care Act (PPACA, P.L. 111-148, March 23, 2010), created a new voluntary federal long-term care insurance policy and is a part of the legislative legacy of Senator Ted Kennedy. This program, often referred to as the Community Living Assistance Services and Supports (CLASS) Act, is for actively employed individuals who will pay premiums through a payroll deduction system. People who pay into the program and later require benefits can receive an average of $50 a day to pay for home and community-based care, and other long-term care expenses designed to help maintain their independence. The Secretary of Health and Human Services will issue regulations to spell out the details of the CLASS Act no later than October 1, 2012, with a period for public comment. Those regulations will then explain the details of the program, its method of operation, premiums each population group will pay, how people will qualify for and obtain benefits, how decisions can be appealed, and a host of other program details.

Our updated summary on the CLASS Act, by Bonnie Burns, our Training and Policy Specialist, reviews the CLASS Act provisions, examining what’s in the law that will become this new long-term care benefit program. Below is a highlight of a few of the summary details pertaining to premiums, enrollment and disenrollment.

Premiums

Premiums will be the only source of funding for this LTC insurance program; the use of taxpayer funds is specifically prohibited. Premium amounts can be based on the age of the enrollee but not on their health condition. The actual premium amounts will vary depending on a number of factors yet to be determined, such as: 1) the initial and projected numbers of participants in the program; 2) how long people are likely to stay in the program; 3) the probable health status of enrollees; and 4) the amount and cost of services enrollees are likely to need. Administrative costs are capped at 3% of program funds.

Note: individuals enrolled in the program must pay premiums for a minimum of 60 months, known as a vesting period, before benefits will be available. Enrollees must have been actively working for 3 years of those first 60 months.

Enrollment

Active workers age 18 and older will be automatically enrolled in the program through a payroll deduction system. Employers and individuals can opt out and choose not to participate. Individuals who opt out and later want to enroll may pay a late enrollment penalty. Non-working spouses or other non-working individuals are not eligible to enroll.

An enrollee, however, can continue their participation in the program if they stop working but they must have accumulated a minimum of 3 years of employment credit during at least the first 5 years they are enrolled in the program.

People with low-income who meet the requirements for active employment, and full-time students who are working, can also enroll in the program. These individuals will pay a nominal monthly premium of $5, with annual increases based on the Consumer Price Index (CPI). A nominal premium must be maintained for them to stay enrolled.

Full-time students who stop working can stay enrolled in the program by paying a premium based on their age when they first enrolled in the program. Both low-income individuals and working students must annually self-certify their status.

Delayed Enrollment, Re-Enrollment and Disenrollment

Individuals who choose not to enroll when first eligible, will have a chance to re-enroll every 2 years. A late enrollment penalty can be applied and added to their monthly premium.

Individuals disenrolling will have a 90-day window to re-enroll at the same premium and retain their vesting credit equal to their prior months of coverage. After 90 days, but within 5 years, an actively working individual can re-enroll at the premium for their current age. However, the Secretary will determine the amount of vesting credit for prior months of coverage. Five years after disenrollment an individual will not receive any vesting credit for prior months of coverage, and premiums will be based on their current age plus a premium penalty for each month of non-coverage.

The CLASS Act also calls for the Secretary to enter into agreements with public and private groups in each state to provide advice, assistance and counseling services on this new benefit.

Also of note is that CLASS benefits are in addition to any Medicaid benefits, and cannot supplant or replace those benefits. CLASS Act benefits cannot have any effect on eligibility or continued eligibility for any federal, state, or locally funded assistance program.

For more details, please see our updated summary report, Community Living Assistance Services & Supports (CLASS) Act Passed with Health Reform Legislation .

Filed Under: Long-Term Care, News

Previous Post: « CHA Briefs
Next Post: Medigap Changes Are Now in Effect »

About Karen Fletcher

Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.

Related Posts

  • CHA Joins over 50 Organizations Opposed to Congressional Tax Plan
  • Long-Term Care and the Graying of America
  • CLASS Act Repealed & Federal Long-Term Care Commission Appointed: What’s Next?
  • Two Elder Women Go on Youtube Demanding Congress Cap LTC Insurance Fees

Primary Sidebar

Change Text Size

  • 100%  110%  120%  130%  

News & Blog Categories

  • Medicare Advantage
  • Low-Income help
  • Medicare & Disabilities
  • Medicare Basics
  • Prescription Drugs
  • Medicare & Other Health Insurance
  • Medicare Billings, Claims & Appeals
  • Health Care Disparities
  • Fraud & Abuse

—

  • COVID-19
  • Resources
  • Health Care Reform
  • Long-Term Care
  • CHA News

—

  • Advocacy & Policy
  • Letters and Comments to Policymakers
  • Legislative and Congressional Testimony
  • Policy Briefs

Send Us Comment

Do you have comments or concerns about your Medicare coverage? Issues regarding getting your needed prescriptions from your Part D plan, or a Medicare Advantage plan representative's marketing practices? Let us know at comments@cahealthadvocates.org.

We are dedicated to making Medicare's program work well for all beneficiaries. Your feedback from your own or your client's concerns and experiences with Medicare, will guide our Medicare advocacy efforts with key policy and decision-makers in both California and nationally with the Centers for Medicare and Medicaid Services (CMS) and Congress.

Archives

Donate Today

Footer

Sign up for our newsletter

Choose the news you'd like to receive

Important Links

  • About Us
  • Fact Sheets
  • Blog
  • Donate
  • Contact
  • Privacy Notice
  • Cookie Policy
  • Accessibility Statement

Follow Us

Copyright © 2022 · California Health Advocates · Web Design by TWK Web and Print Design · Log in