[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4040 Reported in House (RH)]






                                                 Union Calendar No. 333
106th CONGRESS
  2d Session
                                H. R. 4040

                      [Report No. 106-610, Part I]

To amend title 5, United States Code, to provide for the establishment 
of a program under which long-term care insurance is made available to 
Federal employees, members of the uniformed services, and civilian and 
               military retirees, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 21, 2000

 Mr. Scarborough (for himself, Mr. Cummings, Mr. Mica, Ms. Norton, Mr. 
Miller of Florida, and Mr. Allen) introduced the following bill; which 
was referred to the Committee on Government Reform, and in addition to 
   the Committee on Armed Services, 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

                              May 8, 2000

     Additional sponsors: Mrs. Morella, Mr. Davis of Virginia, Mr. 
Blumenauer, Mr. Moran of Virginia, Mr. McCollum, Mr. Hall of Ohio, Mr. 
  Ose, Mr. McHugh, Mr. Gilman, Mr. Kasich, Mr. Frost, Ms. Danner, Mr. 
 Pallone, Mr. Petri, Mr. Weldon of Florida, Mr. Saxton, Mr. Foley, Mr. 
   Lipinski, Mr. English, Mr. Wamp, Mr. Nadler, Mr. Calvert, and Mr. 
                                McIntosh

                              May 8, 2000

   Reported from the Committee on Government Reform with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                              May 8, 2000

 Committee on Armed Services discharged; committed to the Committee of 
  the Whole House on the State of the Union and ordered to be printed
 [For text of introduced bill, see copy of bill as introduced on March 
                               21, 2000]

_______________________________________________________________________

                                 A BILL


 
To amend title 5, United States Code, to provide for the establishment 
of a program under which long-term care insurance is made available to 
Federal employees, members of the uniformed services, and civilian and 
               military retirees, and for other purposes.

    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 Security Act''.

SEC. 2. LONG-TERM CARE INSURANCE.

    (a) In General.--Subpart G of part III of title 5, United States 
Code, is amended by adding at the end the following:

                 ``CHAPTER 90--LONG-TERM CARE INSURANCE

``Sec.
``9001. Definitions.
``9002. Availability of insurance.
``9003. Contracting authority.
``9004. Financing.
``9005. Preemption.
``9006. Studies, reports, and audits.
``9007. Jurisdiction of courts.
``9008. Administrative functions.
``9009. Cost accounting standards.
``Sec. 9001. Definitions
    ``For purposes of this chapter:
            ``(1) Employee.--The term `employee' means--
                    ``(A) an employee as defined by section 8901(1); 
                and
                    ``(B) an individual described in section 2105(e);
        but does not include an individual employed by the government 
        of the District of Columbia.
            ``(2) Annuitant.--The term `annuitant' has the meaning such 
        term would have under paragraph (3) of section 8901 if, for 
        purposes of such paragraph, the term `employee' were considered 
        to have the meaning given to it under paragraph (1) of this 
        subsection.
            ``(3) Member of the uniformed services.--The term `member 
        of the uniformed services' means a member of the uniformed 
        services, other than a retired member of the uniformed 
        services.
            ``(4) Retired member of the uniformed services.--The term 
        `retired member of the uniformed services' means a member or 
        former member of the uniformed services entitled to retired or 
        retainer pay.
            ``(5) Qualified relative.--The term `qualified relative' 
        means each of the following:
                    ``(A) The spouse of an individual described in 
                paragraph (1), (2), (3), or (4).
                    ``(B) A parent, stepparent, or parent-in-law of an 
                individual described in paragraph (1) or (3).
                    ``(C) A child (including an adopted child, a 
                stepchild, or, to the extent the Office of Personnel 
                Management by regulation provides, a foster child) of 
                an individual described in paragraph (1), (2), (3), or 
                (4), if such child is at least 18 years of age.
                    ``(D) An individual having such other relationship 
                to an individual described in paragraph (1), (2), (3), 
                or (4) as the Office may by regulation prescribe.
            ``(6) Eligible individual.--The term `eligible individual' 
        refers to an individual described in paragraph (1), (2), (3), 
        (4), or (5).
            ``(7) Qualified carrier.--The term `qualified carrier' 
        means an insurance company (or consortium of insurance 
        companies) that is licensed to issue long-term care insurance 
        in all States, taking any subsidiaries of such a company into 
        account (and, in the case of a consortium, considering the 
        member companies and any subsidiaries thereof, collectively).
            ``(8) State.--The term `State' includes the District of 
        Columbia.
            ``(9) Qualified long-term care insurance contract.--The 
        term `qualified long-term care insurance contract' has the 
        meaning given such term by section 7702B of the Internal 
        Revenue Code of 1986.
            ``(10) Appropriate secretary.--The term `appropriate 
        Secretary' means--
                    ``(A) except as otherwise provided in this 
                paragraph, the Secretary of Defense;
                    ``(B) with respect to the Coast Guard when it is 
                not operating as a service of the Navy, the Secretary 
                of Transportation;
                    ``(C) with respect to the commissioned corps of the 
                National Oceanic and Atmospheric Administration, the 
                Secretary of Commerce; and
                    ``(D) with respect to the commissioned corps of the 
                Public Health Service, the Secretary of Health and 
                Human Services.
``Sec. 9002. Availability of insurance
    ``(a) In General.--The Office of Personnel Management shall 
establish and, in consultation with the appropriate Secretaries, 
administer a program through which an individual described in paragraph 
(1), (2), (3), (4), or (5) of section 9001 may obtain long-term care 
insurance coverage under this chapter for such individual.
    ``(b) General Requirements.--Long-term care insurance may not be 
offered under this chapter unless--
            ``(1) the only coverage provided is under qualified long-
        term care insurance contracts; and
            ``(2) each insurance contract under which any such coverage 
        is provided is issued by a qualified carrier.
    ``(c) Documentation Requirement.--As a condition for obtaining 
long-term care insurance coverage under this chapter based on one's 
status as a qualified relative, an applicant shall provide 
documentation to demonstrate the relationship, as prescribed by the 
Office.
    ``(d) Underwriting Standards.--
            ``(1) Disqualifying condition.--Nothing in this chapter 
        shall be considered to require that long-term care insurance 
        coverage be made available in the case of any individual who 
        would be eligible for benefits immediately.
            ``(2) Spousal parity.--For the purpose of underwriting 
        standards, a spouse of an individual described in paragraph 
        (1), (2), (3), or (4) of section 9001 shall, as nearly as 
        practicable, be treated like that individual.
            ``(3) Guaranteed issue.--Nothing in this chapter shall be 
        considered to require that long-term care insurance coverage be 
        guaranteed to an eligible individual.
            ``(4) Requirement that contract be fully insured.--In 
        addition to the requirements otherwise applicable under section 
        9001(9), in order to be considered a qualified long-term care 
        insurance contract for purposes of this chapter, a contract 
        must be fully insured, whether through reinsurance with other 
        companies or otherwise.
            ``(5) Higher standards allowable.--Nothing in this chapter 
        shall, in the case of an individual applying for long-term care 
        insurance coverage under this chapter after the expiration of 
        such individual's first opportunity to enroll, preclude the 
        application of underwriting standards more stringent than those 
        that would have applied if that opportunity had not yet 
        expired.
    ``(e) Guaranteed Renewability.--The benefits and coverage made 
available to eligible individuals under any insurance contract under 
this chapter shall be guaranteed renewable (as defined by section 7A(2) 
of the model regulations described in section 7702B(g)(2) of the 
Internal Revenue Code of 1986), including the right to have insurance 
remain in effect so long as premiums continue to be timely made. 
However, the authority to revise premiums under this chapter shall be 
available only on a class basis and only to the extent otherwise 
allowable under section 9003(b).
``Sec. 9003. Contracting authority
    ``(a) In General.--The Office of Personnel Management shall, 
without regard to section 5 of title 41 or any other statute requiring 
competitive bidding, contract with 1 or more qualified carriers for a 
policy or policies of long-term care insurance. The Office shall ensure 
that each resulting contract (hereinafter in this chapter referred to 
as a `master contract') is awarded on the basis of contractor 
qualifications, price, and reasonable competition.
    ``(b) Terms and Conditions.--
            ``(1) In general.--Each master contract under this chapter 
        shall contain--
                    ``(A) a detailed statement of the benefits offered 
                (including any maximums, limitations, exclusions, and 
                other definitions of benefits);
                    ``(B) the premiums charged (including any 
                limitations or other conditions on their subsequent 
                adjustment);
                    ``(C) the terms of the enrollment period; and
                    ``(D) such other terms and conditions as may be 
                mutually agreed to by the Office and the carrier 
                involved, consistent with the requirements of this 
                chapter.
            ``(2) Premiums.--Premiums charged under each master 
        contract entered into under this section shall reasonably and 
        equitably reflect the cost of the benefits provided, as 
        determined by the Office. The premiums shall not be adjusted 
        during the term of the contract unless mutually agreed to by 
        the Office and the carrier.
            ``(3) Nonrenewability.--Master contracts under this chapter 
        may not be made automatically renewable.
    ``(c) Payment of Required Benefits; Dispute Resolution.--
            ``(1) In general.--Each master contract under this chapter 
        shall require the carrier to agree--
                    ``(A) to provide payments or benefits to an 
                eligible individual if such individual is entitled 
                thereto under the terms of the contract;
                    ``(B) to establish internal administrative 
                procedures designed to expeditiously resolve disputes 
                regarding claims for payments or benefits under the 
                terms of the contract; and
                    ``(C) for disputes not resolved under subparagraph 
                (B), to establish procedures for 1 or more alternative 
                means of dispute resolution involving independent 
                third-party review under appropriate circumstances 
                mutually acceptable to the Office and the carrier.
            ``(2) Eligibility.--A carrier's determination as to whether 
        or not a particular individual is eligible to obtain long-term 
        care insurance coverage under this chapter shall be subject to 
        review only to the extent and in the manner provided in the 
        applicable master contract.
            ``(3) Other claims.--Disputes arising under this chapter 
        between a carrier and the Office shall, after exhaustion of 
        administrative remedies, be subject to de novo judicial review 
        under section 9007.
            ``(4) Rule of construction.--Nothing in this chapter shall 
        be considered to grant authority for the Office or a third-
        party reviewer to change the terms of any contract under this 
        chapter.
    ``(d) Duration.--
            ``(1) In general.--Each master contract under this chapter 
        shall be for a term of 7 years, unless terminated earlier by 
        the Office in accordance with the terms of such contract. 
        However, the rights and responsibilities of the enrolled 
        individual, the insurer, and the Office (or duly designated 
        third-party administrator) under such contract shall continue 
        with respect to such individual until the termination of 
        coverage of the enrolled individual or the effective date of a 
        successor contract thereto.
            ``(2) Exception.--
                    ``(A) Shorter duration.--In the case of a master 
                contract entered into before the end of the period 
                described in subparagraph (B), paragraph (1) shall be 
                applied by substituting `ending on the last day of the 
                7-year period described in paragraph (2)(B)' for `of 7 
                years'.
                    ``(B) Definition.--The period described in this 
                subparagraph is the 7-year period beginning on the 
                earliest date as of which any long-term care insurance 
                coverage under this chapter becomes effective.
            ``(3) Congressional notification.--No later than 180 days 
        after receiving the second report required under section 
        9006(c), the Office of Personnel Management shall submit to the 
        Committees on Government Reform and on Armed Services of the 
        House of Representatives and the Committees on Governmental 
        Affairs and on Armed Services of the Senate, a written 
        recommendation as to whether the program under this chapter 
        should be continued without modification, terminated, or 
        restructured. During the 180-day period following the date on 
        which it submits its recommendation under this paragraph, the 
        Office may not take any steps to rebid or otherwise contract 
        for any coverage to be available at any time following the 
        expiration of the 7-year period described in paragraph (2)(B).
            ``(4) Full portability.--Each master contract under this 
        chapter shall include such provisions as may be necessary to 
        ensure that, once an individual becomes duly enrolled, long-
        term care insurance coverage obtained by such individual 
        pursuant to that enrollment shall not be terminated due to any 
        change in status (such as separation from Government service or 
        the uniformed services) or ceasing to meet the requirements for 
        being considered a qualified relative (whether as a result of 
        dissolution of marriage or otherwise).
``Sec. 9004. Financing
    ``(a) In General.--Each eligible individual obtaining long-term 
care insurance coverage under this chapter shall be responsible for 100 
percent of the premiums for such coverage.
    ``(b) Withholdings.--
            ``(1) In general.--The amount necessary to pay the premiums 
        for enrollment may--
                    ``(A) in the case of an employee, be withheld from 
                the pay of such employee;
                    ``(B) in the case of an annuitant, be withheld from 
                the annuity of such annuitant;
                    ``(C) in the case of a member of the uniformed 
                services described in section 9001(3), be withheld from 
                the basic pay of such member; and
                    ``(D) in the case of a retired member of the 
                uniformed services described in section 9001(4), be 
                withheld from the retired pay or retainer pay payable 
                to such member.
            ``(2) Voluntary withholdings for qualified relatives.--
        Withholdings to pay the premiums for enrollment of a qualified 
        relative may, upon election of the appropriate eligible 
        individual (described in section 9001(1)-(4)), be withheld 
        under paragraph (1) to the same extent and in the same manner 
        as if enrollment were for such individual.
    ``(c) Direct Payments.--All amounts withheld under this section 
shall be paid directly to the carrier.
    ``(d) Other Forms of Payment.--Any enrollee who does not elect to 
have premiums withheld under subsection (b) or whose pay, annuity, or 
retired or retainer pay (as referred to in subsection (b)(1)) is 
insufficient to cover the withholding required for enrollment (or who 
is not receiving any regular amounts from the Government, as referred 
to in subsection (b)(1), from which any such withholdings may be made, 
and whose premiums are not otherwise being provided for under 
subsection (b)(2)) shall pay an amount equal to the full amount of 
those charges directly to the carrier.
    ``(e) Separate Accounting Requirement.--Each carrier participating 
under this chapter shall maintain records that permit it to account for 
all amounts received under this chapter (including investment earnings 
on those amounts) separate and apart from all other funds.
    ``(f) Reimbursements.--
            ``(1) The Office shall have access to the Employees' Life 
        Insurance Fund without fiscal year limitation for its 
        reasonable expenses in administering this chapter, including 
        reasonable initial implementation costs.
            ``(2) Each master contract under this chapter shall include 
        appropriate provisions under which the carrier involved shall 
        reimburse the Employees' Life Insurance Fund for funds accessed 
        under paragraph (1) (including lost investment income), on a 
        pro rata basis.
``Sec. 9005. Preemption
    ``The terms of any contract under this chapter which relate to the 
nature, provision, or extent of coverage or benefits (including 
payments with respect to benefits) shall supersede and preempt any 
State or local law, or any regulation issued thereunder, which relates 
to long-term care insurance or contracts.
``Sec. 9006. Studies, reports, and audits
    ``(a) Provisions Relating to Carriers.--Each master contract under 
this chapter shall contain provisions requiring the carrier--
            ``(1) to furnish such reasonable reports as the Office of 
        Personnel Management determines to be necessary to enable it to 
        carry out its functions under this chapter; and
            ``(2) to permit the Office and representatives of the 
        General Accounting Office to examine such records of the 
        carrier as may be necessary to carry out the purposes of this 
        chapter.
    ``(b) Provisions Relating to Federal Agencies.--Each Federal agency 
shall keep such records, make such certifications, and furnish the 
Office, the carrier, or both, with such information and reports as the 
Office may require.
    ``(c) Reports by the General Accounting Office.--The General 
Accounting Office shall prepare and submit to the Office of Personnel 
Management and each House of Congress, before the end of the third and 
fifth years during which the program under this chapter is in effect, a 
written report evaluating such program. Each such report shall include 
an analysis of the competitiveness of the program, as compared to both 
group and individual coverage generally available to individuals in the 
private insurance market. The Office shall cooperate with the General 
Accounting Office to provide periodic evaluations of the program.
``Sec. 9007. Jurisdiction of courts
    ``The district courts of the United States have original 
jurisdiction of a civil action or claim against the United States or a 
carrier founded on this chapter, after such administrative remedies as 
required under section 9003(c)(2) or (3) have been exhausted, but only 
to the extent judicial review is not precluded by any dispute 
resolution or other administrative remedy under this chapter. In cases 
against the United States, the jurisdiction of the district courts 
shall be concurrent with that of the United States Court of Federal 
Claims.
``Sec. 9008. Administrative functions
    ``(a) In General.--The Office of Personnel Management shall 
prescribe regulations necessary to carry out this chapter.
    ``(b) Enrollment Periods.--The Office shall provide for periodic 
coordinated enrollment, promotion, and education efforts in 
consultation with the carriers.
    ``(c) Consultation.--Any regulations necessary to effect the 
application and operation of this chapter with respect to an eligible 
individual described in paragraph (3) or (4) of section 9001, or a 
qualified relative thereof, shall be prescribed by the Office in 
consultation with the appropriate Secretary.
    ``(d) Informed Decisionmaking.--The Office shall ensure that each 
eligible individual applying for long-term care insurance under this 
chapter is furnished the information necessary to enable that 
individual to evaluate the advantages and disadvantages of obtaining 
long-term care insurance under this chapter, including:
            ``(1) The principal long-term care benefits and coverage 
        available under this chapter, and how those benefits and 
        coverage compare to the range of long-term care benefits and 
        coverage otherwise generally available.
            ``(2) Representative examples of the cost of long-term 
        care, and the sufficiency of the benefits available under this 
        chapter relative to those costs. The information under this 
        paragraph shall also include--
                    ``(A) the projected effect of inflation on the 
                value of those benefits; and
                    ``(B) a comparison of the inflation-adjusted value 
                of those benefits to the projected future costs of 
                long-term care.
            ``(3) Any rights individuals under this chapter may have to 
        cancel coverage, and to receive a total or partial refund of 
        premiums. The information under this paragraph shall also 
        include--
                    ``(A) the projected number or percentage of 
                individuals likely to fail to maintain their coverage 
                (determined based on lapse rates experienced under 
                similar group long-term care insurance programs and, 
                when available, this chapter); and
                    ``(B)(i) a summary description of how and when 
                premiums for long-term care insurance under this 
                chapter may be raised;
                    ``(ii) the premium history during the last 10 years 
                for each qualified carrier offering long-term care 
                insurance under this chapter; and
                    ``(iii) if cost increases are anticipated, the 
                projected premiums for a typical insured individual at 
                various ages.
            ``(4) The advantages and disadvantages of long-term care 
        insurance generally, relative to other means of accumulating or 
        otherwise acquiring the assets that may be needed to meet the 
        costs of long-term care, such as through tax-qualified 
        retirement programs or other investment vehicles.
``Sec. 9009. Cost accounting standards
    ``The cost accounting standards issued pursuant to section 26(f) of 
the Office of Federal Procurement Policy Act (41 U.S.C. 422(f)) shall 
not apply with respect to a long-term care insurance contract under 
this chapter.''.
    (b) Conforming Amendment.--The analysis for part III of title 5, 
United States Code, is amended by adding at the end of subpart G the 
following:

``90. Long-Term Care Insurance.............................    9001.''.

 SEC. 3. EFFECTIVE DATE.

    The Office of Personnel Management shall take such measures as may 
be necessary to ensure that long-term care insurance coverage under 
title 5, United States Code, as amended by this Act, may be obtained in 
time to take effect not later than the first day of the first 
applicable pay period of the first fiscal year which begins after the 
end of the 18-month period beginning on the date of enactment of this 
Act.




                                                 Union Calendar No. 333

106th CONGRESS

  2d Session

                               H. R. 4040

                      [Report No. 106-610, Part I]

_______________________________________________________________________

                                 A BILL

To amend title 5, United States Code, to provide for the establishment 
of a program under which long-term care insurance is made available to 
Federal employees, members of the uniformed services, and civilian and 
               military retirees, and for other purposes.

_______________________________________________________________________

                              May 8, 2000

   Reported from the Committee on Government Reform with an amendment

                              May 8, 2000

 Committee on Armed Services discharged; committed to the Committee of 
  the Whole House on the State of the Union and ordered to be printed