[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2102 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2102

   To amend the Internal Revenue Code of 1986 to allow individuals a 
deduction for qualified long-term care insurance premiums and a credit 
for individuals with long-term care needs, to provide for an individual 
and employer educational campaign concerning long-term care insurance, 
and to amend title XIX of the Social Security Act to expand State long-
 term care partnerships by exempting 75 percent of partnership assets 
                     from Medicaid estate recovery.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 9, 1999

  Mrs. Johnson of Connecticut (for herself, Mrs. Thurman, Mrs. Kelly, 
 Mrs. Morella, and Mr. Baker) introduced the following bill; which was 
  referred to the Committee on Ways and Means, and in addition to the 
 Committee on Commerce, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to allow individuals a 
deduction for qualified long-term care insurance premiums and a credit 
for individuals with long-term care needs, to provide for an individual 
and employer educational campaign concerning long-term care insurance, 
and to amend title XIX of the Social Security Act to expand State long-
 term care partnerships by exempting 75 percent of partnership assets 
                     from Medicaid estate recovery.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Long-Term Care and Retirement 
Security Act of 1999''.

SEC. 2. DEDUCTION FOR PREMIUMS ON QUALIFIED LONG-TERM CARE INSURANCE 
              CONTRACTS.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions) is amended by redesignating section 222 as section 223 and 
by inserting after section 221 the following new section:

``SEC. 222. PREMIUMS ON QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a deduction an amount equal to the applicable percentage of 
the amount of eligible long-term care premiums (as defined in section 
213(d)(10)) paid during the taxable year for coverage for the taxpayer, 
his spouse, and dependents under a qualified long-term care insurance 
contract (as defined in section 7702B(b)).
    ``(b) Applicable Percentage.--For purposes of subsection (a)--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the applicable percentage shall be determined in 
        accordance with the following table based on the number of 
        years of continuous coverage (as of the close of the taxable 
        year) of the individual under a qualified long-term care 
        insurance contract (as defined in section 7702B(b)):

                ``If the number of years of
                                               The applicable long-term
                  continuous coverage is--
                                                 care percentage is--  
                    Less than 1............................      50    
                    At least 1 but less than 2.............      60    
                    At least 2 but less than 3.............      70    
                    At least 3 but less than 4.............      80    
                    At least 4 but less than 5.............      90    
                    At least 5.............................    100.    
            ``(2) Special rules for individuals who have attained age 
        60.--In the case of an individual who has attained age 60 as of 
        the close of the taxable year, the following table shall be 
        substituted for the table in paragraph (1).

                ``If the number of years of
                                               The applicable long-term
                  continuous coverage is--
                                                 care percentage is--  
                    Less than 1............................      60    
                    At least 1 but less than 2.............      70    
                    At least 2 but less than 3.............      85    
                    At least 3.............................    100.    
            ``(3) Only coverage after 1999 taken into account.--Only 
        coverage for periods after December 31, 1999, shall be taken 
        into account under this subsection.
            ``(4) Continuous coverage.--An individual shall not fail to 
        be treated as having continuous coverage if the aggregate 
        breaks in coverage during any 1-year period are less than 60 
        days.
    ``(c) Exclusion of Subsidized Coverage.--Subsection (a) shall not 
apply to any taxpayer for any calendar month for which the taxpayer 
participates in any group health plan of an employer or any other 
entity if less than 50 percent of the cost of the taxpayer's coverage 
under such plan is borne by the taxpayer.
    ``(d) Special Rules.--
            ``(1) Coordination with medical deduction, etc.--Any amount 
        paid by a taxpayer for any qualified long-term care insurance 
        contract shall not be taken into account in computing the 
        amount allowable to the taxpayer as a deduction under section 
        213(a).
            ``(2) Coordination with deduction for health insurance 
        costs of self-employed individuals.--Any amount paid by a 
        taxpayer for any qualified long-term care insurance contract 
        which taken into account in computing the amount allowable to 
        the taxpayer as a deduction under section 162(l) shall not be 
        taken into account under this section.''
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 62 of such Code is amended by 
        inserting after paragraph (17) the following new item:
            ``(18) Premiums on qualified long-term care insurance 
        contracts.--The deduction allowed by section 222.''
            (2) The table of sections for part VII of subchapter B of 
        chapter 1 of such Code is amended by striking the last item and 
        inserting the following new items:

                              ``Sec. 222. Premiums on qualified long-
                                        term care insurance contracts.
                              ``Sec. 223. Cross reference.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 3. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE NEEDS.

    (a) Allowance of Credit.--
            (1) In general.--Section 24(a) of the Internal Revenue Code 
        of 1986 (relating to allowance of child tax credit) is amended 
        to read as follows:
    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the sum of--
            ``(1) $500 multiplied by the number of qualifying children 
        of the taxpayer, plus
            ``(2) $1,000 multiplied by the number of applicable 
        individuals with respect to whom the taxpayer is an eligible 
        caregiver for the taxable year.''
            (2) Additional credit for taxpayer with 3 or more separate 
        credit amounts.--So much of section 24(d) of such Code as 
        precedes paragraph (1)(A) thereof is amended to read as 
        follows:
    ``(d) Additional Credit for Taxpayers With 3 or More Separate 
Credit Amounts.--
            ``(1) In general.--If the sum of the number of qualifying 
        children of the taxpayer and the number of applicable 
        individuals with respect to which the taxpayer is an eligible 
        caregiver is 3 or more for any taxable year, the aggregate 
        credits allowed under subpart C shall be increased by the 
        lesser of--''.
            (3) Conforming amendments.--
                    (A) The heading for section 32(n) of such Code is 
                amended by striking ``Child'' and inserting ``Family 
                Care''.
                    (B) The heading for section 24 is amended to read 
                as follows:

``SEC. 24. FAMILY CARE CREDIT.''

                    (C) The table of sections for subpart A of part IV 
                of subchapter A of chapter 1 of such Code is amended by 
                striking the item relating to section 24 and inserting 
                the following new item:

                              ``Sec. 24. Family care credit.''.
    (b) Definitions.--Section 24(c) of such Code (defining qualifying 
child) is amended to read as follows:
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualifying child.--
                    ``(A) In general.--The term `qualifying child' 
                means any individual if--
                            ``(i) the taxpayer is allowed a deduction 
                        under section 151 with respect to such 
                        individual for the taxable year,
                            ``(ii) such individual has not attained the 
                        age of 17 as of the close of the calendar year 
                        in which the taxable year of the taxpayer 
                        begins, and
                            ``(iii) such individual bears a 
                        relationship to the taxpayer described in 
                        section 32(c)(3)(B).
                    ``(B) Exception for certain noncitizens.--The term 
                `qualifying child' shall not include any individual who 
                would not be a dependent if the first sentence of 
                section 152(b)(3) were applied without regard to all 
                that follows `resident of the United States'.
            ``(2) Applicable individual.--
                    ``(A) In general.--The term `applicable individual' 
                means, with respect to any taxable year, any individual 
                who has been certified, before the due date for filing 
                the return of tax for the taxable year (without 
                extensions), by a physician (as defined in section 
                1861(r)(1) of the Social Security Act) as being an 
                individual with long-term care needs described in 
                subparagraph (B) for a period--
                            ``(i) which is at least 180 consecutive 
                        days, and
                            ``(ii) a portion of which occurs within the 
                        taxable year.
                Such term shall not include any individual otherwise 
                meeting the requirements of the preceding sentence 
                unless within the 39\1/2\ month period ending on such 
                due date (or such other period as the Secretary 
                prescribes) a physician (as so defined) has certified 
                that such individual meets such requirements.
                    ``(B) Individuals with long-term care needs.--An 
                individual is described in this subparagraph if the 
                individual meets any of the following requirements:
                            ``(i) The individual is at least 6 years of 
                        age and--
                                    ``(I) is unable to perform (without 
                                substantial assistance from another 
                                individual) at least 3 activities of 
                                daily living (as defined in section 
                                7702B(c)(2)(B)) due to a loss of 
                                functional capacity, or
                                    ``(II) requires substantial 
                                supervision to protect such individual 
                                from threats to health and safety due 
                                to severe cognitive impairment and is 
                                unable to preform, without reminding or 
                                cuing assistance, at least 1 activity 
                                of at least 1 activity of daily living 
                                (as so defined) or to the extent 
                                provided in regulations prescribed by 
                                the Secretary (in consultation with the 
                                Secretary of Health and Human 
                                Services), is unable to engage in age 
                                appropriate activities.
                            ``(ii) The individual is at least 2 but not 
                        6 years of age and is unable due to a loss of 
                        functional capacity to perform (without 
                        substantial assistance from another individual) 
                        at least 2 of the following activities: eating, 
                        transferring, or mobility.
                            ``(iii) The individual is under 2 years of 
                        age and requires specific durable medical 
                        equipment by reason of a severe health 
                        condition or requires a skilled practitioner 
                        trained to address the individual's condition 
                        to be available if the individual's parents or 
                        guardians are absent.
            ``(3) Eligible caregiver.--
                    ``(A) In general.--A taxpayer shall be treated as 
                an eligible caregiver for any taxable year with respect 
                to the following individuals:
                            ``(i) The taxpayer.
                            ``(ii) The taxpayer's spouse.
                            ``(iii) An individual with respect to whom 
                        the taxpayer is allowed a deduction under 
                        section 151 for the taxable year.
                            ``(iv) An individual who would be described 
                        in clause (iii) for the taxable year if section 
                        151(c)(1)(A) were applied by substituting for 
                        the exemption amount an amount equal to the sum 
                        of the exemption amount, the standard deduction 
                        under section 63(c)(2)(C), and any additional 
                        standard deduction under section 63(c)(3) which 
                        would be applicable to the individual if clause 
                        (iii) applied.
                            ``(v) An individual who would be described 
                        in clause (iii) for the taxable year if--
                                    ``(I) the requirements of clause 
                                (iv) are met with respect to the 
                                individual, and
                                    ``(II) the requirements of 
                                subparagraph (B) are met with respect 
                                to the individual in lieu of the 
                                support test of section 152(a).
                    ``(B) Residency test.--The requirements of this 
                subparagraph are met if an individual has as his 
                principal place of abode the home of the taxpayer and--
                            ``(i) in the case of an individual who is 
                        an ancestor or descendant of the taxpayer or 
                        the taxpayer's spouse, is a member of the 
                        taxpayer's household for over half the taxable 
                        year, or
                            ``(ii) in the case of any other individual, 
                        is a member of the taxpayer's household for the 
                        entire taxable year.
                    ``(C) Special rules where more than 1 eligible 
                caregiver.--
                            ``(i) In general.--If more than 1 
                        individual is an eligible caregiver with 
                        respect to the same applicable individual for 
                        taxable years ending with or within the same 
                        calendar year, a taxpayer shall be treated as 
                        the eligible caregiver if each such individual 
                        (other than the taxpayer) files a written 
                        declaration (in such form and manner as the 
                        Secretary may prescribe) that such individual 
                        will not claim such applicable individual for 
                        the credit under this section.
                            ``(ii) No agreement.--If each individual 
                        required under clause (i) to file a written 
                        declaration under clause (i) does not do so, 
                        the individual with the highest modified 
                        adjusted gross income (as defined in section 
                        32(c)(5)) shall be treated as the eligible 
                        caregiver.
                            ``(iii) Married individuals filing 
                        separately.--In the case of married individuals 
                        filing separately, the determination under this 
                        subparagraph as to whether the husband or wife 
                        is the eligible caregiver shall be made under 
                        the rules of clause (ii) (whether or not one of 
                        them has filed a written declaration under 
                        clause (i)).''.
    (c) Identification Requirements.--
            (1) In general.--Section 24(e) of such Code is amended by 
        adding at the end the following new sentence: ``No credit shall 
        be allowed under this section to a taxpayer with respect to any 
        applicable individual unless the taxpayer includes the name and 
        taxpayer identification number of such individual, and the 
        identification number of the physician certifying such 
        individual, on the return of tax for the taxable year.''.
            (2) Assessment.--Section 6213(g)(2)(I) of such Code is 
        amended--
                    (A) by inserting ``or physician identification'' 
                after ``correct TIN'', and
                    (B) by striking ``child'' and inserting ``family 
                care''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 4. LONG-TERM CARE EDUCATION CAMPAIGN.

    (a) Including Information With Annual Social Security Statements.--
Section 1143(c) of the Social Security Act (42 U.S.C. 1320b-13(c)) is 
amended by adding at the end the following:
    ``(3)(A) The Secretary shall include with the annual statements 
under paragraph (2) for individuals who have attained age 50 
information about--
            ``(i) the limitation on long-term care benefits provided 
        through the medicare and medicaid programs under titles XVIII 
        and XIX;
            ``(ii) what such individuals should look for in purchasing 
        private long-term care coverage; and
            ``(iii) the tax benefits that are available to those who 
        purchase qualified long-term care plans.
    ``(B) The information described in subparagraph (A) shall be 
developed in cooperation with the Health Care Financing Administration 
and representatives of providers of long-term care services, of 
medicare and medicaid beneficiaries, and of entities offering long-term 
care insurance policies.
    ``(C) There are authorized to be appropriated from the Federal Old-
Age and Survivors Insurance Trust Fund such sums as may be necessary to 
carry out this paragraph and subsection (d).''.
    (b) Transmittal of Information to Employers.--Section 1143 of such 
Act (42 U.S.C. 1320b-13) is further amended by adding at the end the 
following:

              ``Dissemination of Information to Employers

    ``(d) The Commissioner of Social Security shall provide for the 
transmittal to employers of information--
            ``(1) concerning the tax benefits available to employers 
        for the provision of qualified long-term care insurance 
        coverage; and
            ``(2) encouraging employers to offer coverage under 
        qualified long-term care insurance contracts to their employees 
        and to inform employees about the information described in 
        subsection (c)(3)(A).''.
    (c) Effective Dates.--(1) The amendment made by subsection (a) 
applies to annual statements transmitted more than 1 year after the 
date of the enactment of this Act.
    (2) The amendment made by subsection (b) takes effect upon 
enactment.

SEC. 5. EXPANSION OF STATE LONG-TERM CARE PARTNERSHIPS BY EXEMPTING A 
              PORTION OF PARTNERSHIP ASSETS FROM ESTATE RECOVERY.

    (a) In General.--Section 1917(b)(1)(C) of the Social Security Act 
(42 U.S.C. 1396p(b)(1)(C)) is amended--
            (1) in clause (i), by inserting ``or clause (iii)'' after 
        ``such clause''; and
            (2) by adding at the end the following new clause:
            ``(iii) In the case of an individual who receives medical 
        assistance under a State plan not described in clause (ii) of a 
        State which has a State plan amendment approved which provides 
        for the disregard of any assets or resources in the manner 
        described in such clause, clause (i) shall not apply to 75 
        percent of the amounts of the assets or resources so 
        disregarded.''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect on the date of the enactment of this Act.
                                 <all>