| President Obama signed into law comprehensive | | | | Congress made CLASS an "opt out" plan. This is an |
| healthcare reform legislation that contains a program | | | | important point that people need to be aware of. Unlike |
| known as the Community Living Assistance Services | | | | Social Security or Medicare that are mandatory, |
| and Supporters Act (CLASS Act). | | | | CLASS is a "voluntary, opt-out" plan. If that sounds |
| The passage of CLASS does not negate the need | | | | confusing, it is. Read the question below regarding "opt |
| for private long-term care coverage in any way. Many | | | | out". |
| of the details regarding the CLASS program are not | | | | What will the insurance coverage cost? |
| yet defined and will be developed through Government | | | | The monthly premium that will be charged by the |
| regulation. The following is designed to address what is | | | | government and deducted from paychecks has yet to |
| known currently and to answer the most common | | | | be determined. There have been a wide range of |
| questions being asked. | | | | estimates - and we will not speculate on the final cost. |
| What are the general provisions of the CLASS Act? | | | | Congress required that the CLASS plan should be |
| The most of the important details for the CLASS | | | | fiscally sound for a 75-year period. Simply stated, the |
| program have not (yet) been defined. They will be | | | | goal was to have the amounts paid by participants |
| developed by the Department of Health and Human | | | | ultimately be sufficient to pay future benefits without |
| Services over the next few years. | | | | the need for taxpayer support. |
| But, simply stated, CLASS creates a new voluntary | | | | Because of the "guaranteed (health) issue" nature of |
| government program under which participants will pay | | | | the CLASS plan, many experts explain that those |
| a monthly premium and will be eligible for modest | | | | most likely to apply for CLASS policies will be those in |
| benefits for their long-term care needs after five years | | | | poorer health. This will likely create more people |
| of paying premiums. | | | | requiring benefits in future years. A fiscally sound plan |
| While CLASS is often characterized as a long-term | | | | will mean initial premiums could be high (as much as |
| care program, it is primarily designed as a program to | | | | $1,500 to $2,500 a year per-person. Some say they |
| provide future assistance to the working disabled. | | | | could be higher. But we'll have to wait for the |
| Traditional long-term care insurance requires that | | | | Department of Health and Human Services (HHS) to |
| applicants meet certain good-health requirements. | | | | set the rates people will pay. |
| CLASS will not have such health qualification | | | | Premiums can be increased yearly to ensure that the |
| requirements. The plan will be available on a | | | | CLASS fund is actuarially sound. |
| guaranteed-issue basis. | | | | Remember that CLASS is not a contractual obligation. |
| When will the CLASS Act begin? | | | | Future provisions (from costs to benefit eligibility) can |
| While provisions of the CLASS Act become effective | | | | be changed. And, of course, while the intent of the law |
| in 2011, there are so many details to be worked out | | | | is to avoid taxpayer funds, CLASS could inevitably find |
| that most experts don't expect the plan will become | | | | itself underfunded the way Social Security and |
| available until 2013. | | | | Medicare currently find themselves. |
| For example, not only do costs have to be determined | | | | Explain the five-year waiting period before benefits |
| but employers must be given sufficient time to | | | | begin. |
| educate employees and prepare to start withholding | | | | Once enrolled, participants must pay premiums for five |
| premiums from employee paychecks. | | | | years, after which they will be eligible to receive certain |
| Following implementation and withholding of the first | | | | benefits for their long-term support and service needs. |
| payments from employees' paychecks, there is a | | | | They must also have worked for at least three of |
| five-year waiting period during which premiums must | | | | those five years. |
| be paid before the participant becomes eligible to | | | | What coverage or benefits will be provided? |
| receive benefits. As a result, the earliest anyone could | | | | While the exact benefits to be provided under the |
| be receiving CLASS benefits may be as late as 2018. | | | | CLASS program are yet to be determined, here is |
| Who will pay? | | | | some general information. |
| CLASS is intended to be a voluntary plan primarily | | | | Remember that to be eligible for benefits, you must |
| offered by employers and paid for by employees. Or | | | | pay premiums for five years to be eligible to receive |
| simply stated, money will be withheld from paychecks | | | | certain benefits for long-term support and service |
| -- similar to the way Social Security (FICA) payments | | | | needs. The participant must have a functional |
| are withheld from paychecks. | | | | impairment expected to last more than 90 days and |
| There are provisions to make the offering available to | | | | which requires substantial assistance with two or three |
| others who may be self-employed or who may not | | | | Activities of Daily Living, or has substantial cognitive |
| have access to the plan through an employer. | | | | impairment. |