Weverka & Associates, Inc.

Class Act

Purpose:

  • Provide individuals with functional disabilities with tools that will allow them to maintain their personal and financial independence and live in the community through a new financing strategy for community living services and support.
  • Establish an infrastructure that will help address the Nation’s community living assistance services and support needs.
  • Alleviate burdens on family caregivers, and
  • Address institutional bias by providing a financing mechanism that supports personal choice and independence to live in the community.

The Plan:

The Secretary of Health and Human Services, in consultation with appropriate actuaries and other experts, shall develop 3 actuarially sound benefit plans for consideration as the designated CLASS Independent Benefit Plan to provide eligible beneficiaries with benefits described as follows. The Secretary must select a Plan for public scrutiny and advice from the CLASS independent Advisory Council before October 1, 2012.

Premium:

  • A monthly amount (to be determined by the Secretary) based on the 75 year cost of the program and ensuring solvency for that 75 year period.
  • Nominal premium ($5.00) for needy and full time students.
  • Premiums to be adjusted annually based on the increase in the consumer price index for all urban consumers (US city average).
  • In general the premiums shall remain unchanged (except for CPI) unless in any year it is determined that the premium and investment income of the CLASS Independent Fund is insufficient with respect to the next 20 years. The Secretary shall then make the appropriate monthly adjustment for those currently enrolled in the Plan. Except:
    • Those paying a Nominal premium.
    • Those who are age 65 or older.
    • Those who have been actively enrolled for 20 years or more.
    • Those not actively employed.

Vesting period is five years, which means that you must have paid premium for 5 years (60 months) to be eligible for benefits, and in three of those years you must have earned enough to be credited with a quarter of earnings to be counted toward your Social Security benefits.

Benefit Triggers:

  • Must be unable to perform minimum number (may be 2 or 3) activities of daily living (ADL) without substantial assistance from another individual. The ctivitis of daily are defined as:
    • Eating
    • Toileting
    • Transferring
    • Bathing
    • Dressing
    • Continence
  • Individual requires substantial supervision because of cognitive impairment.
  • Individual has functional limitations similar to the levels described in 1 and 2.

Cash Benefit:

  • Not less than an average of $50.00 per day.
  • Benefit level may vary depending of functional limitation. Minimum of two levels and maximum of six levels.
  • Daily benefit to be increased annually by the increase in the CPI. (note, unclear if CPI increases start after first year of plan or first year the Plan will pay benefits).
  • Benefits paid on a daily or weekly period.
  • No lifetime or aggregate limit.
  • Coordination with other benefits that may be provide with this overall bill.
  • Cash benefits can be used to purchase nonmedical services and support including but not limited to:
    • Home modification
    • Assistive technology
    • Accessible transportation
    • Homemaker services
    • Respite care
    • Personal assistance services
    • Home care aides
    • Nursing support

Recalculated Premium if Reenrollment After more than a Three Month Lapse:

  • Premium based on age at reenrollment.
  • Credit for prior months enrollment is given if lapse period less than 5 years.
  • Must have been enrolled in program for at least 24 months after reenrollment to be eligible for benefits.
  • Penalty for reenrollment after 5 year lapse.
    • Age adjusted premium is increased by one percent for each month of lapse or
    • A monthly amount determined by the Secretary to be actuarially sound, whichever is greater.

Enrollment and Eligibility:

  • Automatic Enrollment. The Secretary with the Secretary of the Treasury shall establish procedures for an employer to enroll an individual in the same manner that they can enroll an employee in a 401k program.
  • Alternative enrollment procedures will be established for:
    • Self employed.
    • Individuals with multiple employers.
    • Individuals who have employers who elect not to participate in the Automatic Enrollment procedure.
  • Election to Opt-Out. An individual may elect to waive enrollment in the CLASS at any time. An individual who in the year of initial eligibility to enroll in the CLASS Program has elected to waive enrollment in the program, is eligible to enroll in the program in an open enrollment period designated by the Secretary that may not occur more frequently than biennially.
  • An individual is eligible for the CLASS program who:
    • Attained age 18.
    • Receives taxable wages.
    • Derives self employment taxable income.
    • Not eligible if:
      • 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 assistance under Medicaid.
      • Confined in jail, prison, or other institution or correctional facility.

Miscellaneous Stuff:

  • Additional benefits include
    • Advocacy Services
    • Advice and assistance counseling.
  • No taxpayer funds can be used to pay benefits. “Taxpayer funds” means any Federal funds from sources other than premiums deposited by CLASS program participants and interest earned on the CLASS Independent Fund.

The full text of The CLASS Act can be reviewed at the following locations: