[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1951 Introduced in Senate (IS)]








109th CONGRESS
  1st Session
                                S. 1951

    To amend the Public Health Service Act to help individuals with 
functional impairments and their families pay for services and supports 
  that they need to maximize their functionality and independence and 
have choices about community participation, education, and employment, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            November 2, 2005

Mr. Kennedy (for himself and Mr. DeWine) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
    To amend the Public Health Service Act to help individuals with 
functional impairments and their families pay for services and supports 
  that they need to maximize their functionality and independence and 
have choices about community participation, education, and employment, 
                        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 ``Community Living Assistance Services 
and Supports Act'' or the ``CLASS Act''.

SEC. 2. PURPOSES.

    The purposes of this Act are as follows:
            (1) To provide individuals with functional limitations with 
        tools that will allow them to maintain their independence and 
        live in the community through a new financing strategy for 
        community living assistance services and supports.
            (2) To establish an infrastructure that will help address 
        America's community living assistance services and supports 
        needs.
            (3) To alleviate burdens on family caregivers.

SEC. 3. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Findings and Purposes.
Sec. 3. Table of contents.
       TITLE I--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS

Sec. 101. Establishment of national voluntary insurance program for 
                            purchasing community living assistance 
                            services and support.
       TITLE II--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

Sec. 201. Above-the-line deduction for premium costs.
Sec. 202. Credit for premium costs of low-income class enrollees.
Sec. 203. Credit for costs of employers who elect to automatically 
                            enroll employees and withhold class 
                            premiums from wages.
Sec. 204. Long-term care insurance includible in cafeteria plans.
                       TITLE III--EFFECTIVE DATE

Sec. 301. Effective date.

       TITLE I--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS

SEC. 101. ESTABLISHMENT OF NATIONAL VOLUNTARY INSURANCE PROGRAM FOR 
              PURCHASING COMMUNITY LIVING ASSISTANCE SERVICES AND 
              SUPPORT.

    (a) Establishment of Program.--
            (1) In general.--The Public Health Service Act (42 U.S.C. 
        201 et seq.) is amended by adding at the end the following:

    ``TITLE XXIX--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS

``SEC. 2901. DEFINITIONS.

    ``In this title:
            ``(1) Active enrollee.--The term `active enrollee' means an 
        individual who is enrolled in the CLASS program in accordance 
        with section 2902 and who has paid any premiums due to maintain 
        such enrollment in accordance with section 2903.
            ``(2) Actively at work.--The term `actively at work' means 
        an individual who--
                    ``(A) is reporting for work at the individual's 
                usual place of employment or at another location to 
                which the individual's employer requires the individual 
                to travel (or in the case of an individual who is a 
                member of the uniformed services, is on active duty and 
                is physically able to perform the duties of the 
                individual's position);
                    ``(B) is able to perform all the usual and 
                customary duties of the individual's employment on the 
                individual's regular work schedule; and
                    ``(C) is not absent from work due to sickness, 
                injury, annual leave, sick leave or any other leave.
            ``(3) Activities of daily living.--The term `activities of 
        daily living' means each of the following activities specified 
        in section 7702B(c)(2)(B) of the Internal Revenue Code of 1986:
                    ``(A) Eating.
                    ``(B) Toileting.
                    ``(C) Transferring.
                    ``(D) Bathing.
                    ``(E) Dressing.
                    ``(F) Continence.
            ``(4) CLASS program.--The term `CLASS program' means the 
        program established under this title.
            ``(5) Disability determination service.--The term 
        `Disability Determination Service' means, with respect to each 
        State, the entity that has an agreement with the Commissioner 
        of Social Security to make disability determinations for 
        purposes of title II or XVI of the Social Security Act (42 
        U.S.C. 401 et seq., 1381 et seq.).
            ``(6) Eligible tier i beneficiary.--The term `eligible tier 
        I beneficiary' means any individual who--
                    ``(A) is an active enrollee in the CLASS program; 
                and
                    ``(B) as of the date the individual is determined 
                to be unable to perform at least 2 activities of daily 
                living or to require supervision, cueing, or hands-on 
                assistance to plan or perform at least 2 such 
                activities--
                            ``(i) has paid premiums for enrollment in 
                        such program for at least 60 months; and
                            ``(ii) except as provided in section 
                        2903(e)(2), has paid premiums for enrollment in 
                        such program for at least 12 consecutive months 
                        if a lapse in premium payments of more than 3 
                        months has occurred during the period that 
                        begins on the date of the individual's 
                        enrollment and ends on the date of such 
                        determination.
            ``(7) Eligible tier ii beneficiary.--The term `eligible 
        tier II beneficiary' means any individual who is an eligible 
        tier I beneficiary who has been determined to be unable to 
        perform at least 4 activities of daily living or to require 
        supervision, cueing, or hands-on assistance to plan or perform 
        at least 4 such activities.
            ``(8) Hospital; nursing facility; intermediate care 
        facility for the mentally retarded; institution for mental 
        diseases.--The terms `hospital', `nursing facility', 
        `intermediate care facility for the mentally retarded', and 
        `institution for mental diseases' have the meanings given such 
        terms for purposes of Medicaid.
            ``(9) Independence fund.--The term `Independence Fund' or 
        `Fund' means the fund established under section 2905.
            ``(10) Medicaid.--The term `Medicaid' means the program 
        established under title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.).
            ``(11) Poverty line.--The term `poverty line' has the 
        meaning given that term in section 2110(c)(5) of the Social 
        Security Act (42 U.S.C. 1397jj(c)(5)).
            ``(12) Protection and advocacy system.--The term 
        `Protection and Advocacy System' means the system for each 
        State established under section 143 of the Developmental 
        Disabilities Assistance and Bill of Rights Act of 2000 (42 
        U.S.C. 15043).

``SEC. 2902. AUTOMATIC ENROLLMENT WITH OPT-OUT ELECTION.

    ``(a) Automatic Enrollment.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        shall establish procedures under which each individual 
        described in subsection (c) shall be automatically enrolled in 
        the CLASS program by an employer of such individual in the same 
        manner as an employer may elect to automatically enroll 
        employees in a plan under section 401(k), 403(b), or 457 of the 
        Internal Revenue Code of 1986.
            ``(2) Alternative enrollment procedures.--The procedures 
        established under paragraph (1) shall provide for an 
        alternative enrollment process for an individual described in 
        subsection (c) in the case of such an individual--
                    ``(A) who is self-employed;
                    ``(B) who has more than 1 employer;
                    ``(C) whose employer does not elect to participate 
                in the automatic enrollment process established by the 
                Secretary; or
                    ``(D) who is a spouse described in paragraph (2) of 
                such subsection who is not subject to automatic 
                enrollment.
            ``(3) Administration.--
                    ``(A) In general.--The Secretary shall, by 
                regulation, establish procedures to--
                            ``(i) ensure that an individual is not 
                        automatically enrolled in the CLASS program by 
                        more than 1 employer; and
                            ``(ii) allow for an individual's employer 
                        to deduct a premium for a spouse described in 
                        subsection (c)(1)(B) who is not subject to 
                        automatic enrollment.
                    ``(B) Form.--Enrollment in the CLASS program shall 
                be made in such manner as the Secretary may prescribe 
                in order to ensure ease of administration.
    ``(b) Election to Opt-Out.--An individual described in subsection 
(c) may elect to waive enrollment under the CLASS program at any time 
in such form and manner as the Secretary shall prescribe.
    ``(c) Individual Described.--For purposes of enrolling in the CLASS 
program, an individual described in this subsection is--
            ``(1) an individual--
                    ``(A) who has attained age 18;
                    ``(B) who--
                            ``(i) receives wages on which there is 
                        imposed a tax under section 3101(a) of the 
                        Internal Revenue Code of 1986; or
                            ``(ii) derives self-employment income on 
                        which there is imposed a tax under section 
                        1401(a) of the Internal Revenue Code of 1986;
                    ``(C) who is actively at work; and
                    ``(D) who is not--
                            ``(i) 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; or
                            ``(ii) confined in a jail, prison, other 
                        penal institution or correctional facility, or 
                        by court order pursuant to conviction of a 
                        criminal offense or in connection with a 
                        verdict or finding described in section 
                        202(x)(1)(A)(ii) of the Social Security Act (42 
                        U.S.C. 402(x)(1)(A)(ii)); or
            ``(2) the spouse of an individual described in paragraph 
        (1) and who would be an individual so described but for 
        subparagraph (B) or (C) of that paragraph.
    ``(d) Rule of Construction.--Nothing in this title shall be 
construed as requiring an active enrollee to continue to satisfy 
subparagraph (B) or (C) of subsection (c)(1) in order to maintain 
enrollment in the CLASS program.

``SEC. 2903. PREMIUMS.

    ``(a) Monthly Premiums.--Except as provided in subsection (e), each 
individual who is enrolled in the CLASS program shall pay the Secretary 
a monthly premium to maintain enrollment in the program.
    ``(b) Amount of Premium.--
            ``(1) $30 monthly premium for enrollment in the first year 
        of the program.--Subject to the succeeding provisions of this 
        subsection, the monthly premium for enrollment in the CLASS 
        program of any individual who enrolls during the first year in 
        which the program is in effect under this title shall be $30 
        for every such enrollee, regardless of their age at enrollment.
            ``(2) Inflation adjusted premium for enrollment in first 
        year in which an individual is eligible to enroll after first 
        year of the program.--The monthly premium for enrollment in the 
        CLASS program of any individual who enrolls during the first 
        year in which the individual is eligible to enroll in the 
        program but that occurs after the first year in which the 
        program is in effect under this title, shall be $30, increased 
        with respect to each year that the program is in effect under 
        this title until the year of such enrollment, by the percentage 
        increase in the consumer price index for all urban consumers 
        (U.S. city average) over each such preceding year.
            ``(3) Age-adjusted premiums for enrollment in other 
        years.--
                    ``(A) In general.--The Secretary shall determine 
                for each year that is not a year described in paragraph 
                (1) or (2), an annual monthly premium for enrollment in 
                the CLASS program of an individual during the year that 
                adjusts the monthly premium that would apply to the 
                individual under paragraph (2) if the individual had 
                enrolled during the first year in which the individual 
                was eligible to enroll in the program based on the 
                following:
                            ``(i) Age at enrollment.--Subject to 
                        paragraph (4), the age of an individual upon 
                        the individual's initial enrollment in the 
                        program.
                            ``(ii) Administrative expenses.--The 
                        administrative expenses for the program.
                    ``(B) Limitation on administrative expenses.--
                            ``(i) Start-up administrative expenses.--
                        The total amount of annual expenditures 
                        incurred for administering the CLASS program 
                        during each of the first 5 years in which the 
                        program is in effect under this title shall not 
                        exceed the sum of an amount equal to 3 percent 
                        of all premiums paid during that year.
                            ``(ii) Subsequent administrative 
                        expenses.--With respect to any year after the 
                        first 5 years in which the CLASS program is in 
                        effect under this title, the total amount of 
                        annual expenditures incurred for administering 
                        the CLASS program shall not exceed the lesser 
                        of an amount equal to--
                                    ``(I) 5 percent of the total amount 
                                of all expenditures (including benefits 
                                paid) under this title with respect to 
                                that year; or
                                    ``(II) the percentage of 
                                expenditures incurred under the 
                                medicare program under title XVIII of 
                                the Social Security Act (42 U.S.C. 1395 
                                et seq.) for that year that is 
                                attributable to administering that 
                                program.
            ``(4) Nominal premium for individual's with income that 
        does not exceed 150 percent of the poverty line.--
                    ``(A) In general.--In the case of an individual 
                whose income does not exceed 150 percent of the poverty 
                line, the monthly premium for enrollment in the CLASS 
                program shall be the applicable amount under 
                subparagraph (B).
                    ``(B) Applicable amount.--The Secretary shall 
                establish premium amounts which shall apply to an 
                individual described in subparagraph (A) in lieu of the 
                premium amount which would otherwise apply to the 
                individual under paragraph (1), (2), or (3) (whichever 
                is applicable). Such amounts shall be nominal and, in 
                the case of an individual who, but for this paragraph, 
                would be subject to the premium imposed under paragraph 
                (3), may be adjusted in accordance with the factors 
                described in that paragraph.
                    ``(C) Self-attestation and verification of 
                income.--The Secretary shall establish procedures to--
                            ``(i) permit an individual, as part of 
                        their automatic enrollment in the CLASS 
                        program, to self-attest that their income does 
                        not exceed 150 percent of the poverty line; and
                            ``(ii) verify the validity of such self-
                        attestation.
            ``(5) Adjustment of premiums.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (C) and (D), the amount of the monthly 
                premium determined for an individual upon such 
                individual's enrollment in the CLASS program shall 
                remain the same for as long as the individual is an 
                active enrollee in the program.
                    ``(B) Program solvency projections.--Beginning with 
                2010 and every year thereafter, the Secretary shall 
                determine with respect to the 20-year period that 
                begins with that year, the amount of funds held (or 
                projected to be held) in the Independence Fund 
                established under section 2905 that are required to pay 
                tier I and tier II benefits under section 2904 during 
                each year of that period.
                    ``(C) Recalculated premium if required for program 
                solvency.--
                            ``(i) In general.--Subject to clauses (ii) 
                        and (iii), beginning with 2015 and every year 
                        thereafter, if the Secretary determines as a 
                        result of making the program solvency 
                        projections required under subparagraph (B) 
                        that, with respect to the 20-year period that 
                        begins with that year, more than 40 percent of 
                        the amount of funds held (or projected to be 
                        held) in the Independence Fund established 
                        under section 2905 are required to pay tier I 
                        and tier II benefits under section 2904 during 
                        each year of that period, the Secretary shall 
                        adjust the monthly premiums for individuals 
                        enrolled in the CLASS program.
                            ``(ii) Requirements.--In adjusting monthly 
                        premiums under clause (i), the Secretary shall 
                        increase the premiums by such an amount as will 
                        ensure that--
                                    ``(I) the aggregate amount of such 
                                premiums collected will result in not 
                                more than 20 percent of the amounts 
                                held in the Independence Fund being 
                                required to pay tier I and tier II 
                                benefits for any one year occurring 
                                during the applicable 20-year period;
                                    ``(II) with respect to any 
                                individual enrolled in the program--
                                            ``(aa) the amount of the 
                                        increase in the individual's 
                                        monthly premium does not exceed 
                                        the amount equal to 50 percent 
                                        of the premium prior to such 
                                        increase; and
                                            ``(bb) the individual's 
                                        monthly premium does not exceed 
                                        the amount equal to 200 percent 
                                        of the initial premium amount 
                                        paid by the individual during 
                                        their first year of enrollment 
                                        in the program; and
                                    ``(III) the requirements of clause 
                                (iii) are met.
                        The Secretary shall immediately notify Congress 
                        if the Secretary determines that the 
                        requirements of this clause cannot be satisfied 
                        and shall include in such notification 
                        recommendations for such legislative action as 
                        the Secretary determines to be appropriate.
                            ``(iii) Exemption from increase.--Any 
                        increase in a monthly premium imposed as result 
                        of a determination described in clause (i) 
                        shall not apply with respect to the monthly 
                        premium of any active enrollee who--
                                    ``(I) has attained age 65;
                                    ``(II) has paid premiums for 
                                enrollment in the program for at least 
                                20 years; and
                                    ``(III) is not actively at work.
                    ``(D) Recalculated premium if reenrollment after 
                more than a 3-month lapse.--
                            ``(i) In general.--Except as provided in 
                        subsection (e)(2), the reenrollment of an 
                        individual after a 90-day period during which 
                        the individual failed to pay the monthly 
                        premium required to maintain the individual's 
                        enrollment in the CLASS program shall be 
                        treated as an initial enrollment for purposes 
                        of age-adjusting the premium for enrollment in 
                        the program.
                            ``(ii) Credit for prior months.--An 
                        individual who reenrolls in the CLASS program 
                        after such a 90-day period shall be--
                                    ``(I) credited with any months of 
                                paid premiums that accrued prior to the 
                                individual's lapse in enrollment; and
                                    ``(II) notwithstanding the total 
                                amount of any such credited months, 
                                required to satisfy section 
                                2901(6)(B)(ii) before being eligible to 
                                receive a tier I or tier II benefit.
            ``(6) No underwriting requirements.--No underwriting shall 
        be used to--
                    ``(A) determine the monthly premium for enrollment 
                in the CLASS program; or
                    ``(B) prevent an individual from enrolling in the 
                program.
    ``(c) Payment.--
            ``(1) Payroll deduction.--An amount equal to the monthly 
        premium for the enrollment in the CLASS program of an 
        individual shall be deducted from the wages or self-employment 
        income of such individual in accordance with such procedures as 
        the Secretary, in consultation with the Secretary of the 
        Treasury, shall establish for employers who elect to deduct and 
        withhold such premiums on behalf of enrolled employees.
            ``(2) Alternative payment mechanism.--The Secretary shall 
        establish alternative procedures for the payment of monthly 
        premiums by an individual enrolled in the CLASS program--
                    ``(A) who does not have an employer who elects to 
                deduct and withhold premiums in accordance with 
                paragraph (1); or
                    ``(B) who does not earn wages or derive self-
                employment income.
    ``(d) Transfer of Premiums Collected.--
            ``(1) In general.--During each calendar year the Secretary 
        of the Treasury shall deposit into the Independence Fund a 
        total amount equal, in the aggregate, to 100 percent of the 
        premiums collected during that year.
            ``(2) Transfers based on estimates.--The amount deposited 
        pursuant to paragraph (1) shall be transferred in at least 
        monthly payments to the Independence Fund on the basis of 
        estimates by the Secretary and certified to the Secretary of 
        the Treasury of the amounts collected in accordance with 
        paragraphs (1) and (2) of subsection (c). Proper adjustments 
        shall be made in amounts subsequently transferred to the Fund 
        to the extent prior estimates were in excess of, or were less 
        than, actual amounts collected.
    ``(e) Contribution Period.--
            ``(1) In general.--An individual shall not be required to 
        pay a monthly premium to maintain the individual's enrollment 
        in the CLASS program during the following periods:
                    ``(A) Receiving benefits while unemployed.--Any 
                period during which the individual is--
                            ``(i) receiving tier I or tier II benefits; 
                        and
                            ``(ii) the individual does not have wages 
                        or income derived from self-employment.
                    ``(B) Full-time student who is actively at work.--
                Any period during which the individual is a full-time 
                student (as determined by the Secretary) who has not 
                attained age 22 and is actively at work.
            ``(2) Application of premium amount prior to start of 
        period.--Upon the conclusion of a period described in paragraph 
        (1) for an individual, the individual shall resume paying the 
        monthly premium amount that applied to the individual 
        immediately prior to the start of such period in order to 
        maintain enrollment in the program.

``SEC. 2904. BENEFITS.

    ``(a) Determination of Eligibility.--
            ``(1) Application for receipt of benefits.--The Secretary 
        shall establish procedures under which an active enrollee shall 
        apply for receipt of tier I or tier II benefits.
            ``(2) Eligibility assessments.--
                    ``(A) In general.--Not later than October 1, 2008, 
                the Secretary shall enter into agreements with--
                            ``(i) the Disability Determination Service 
                        for each State to provide for eligibility 
                        assessments of active enrollees who apply for 
                        receipt of benefits;
                            ``(ii) the Protection and Advocacy System 
                        for each State to provide advocacy services in 
                        accordance with subsection (e); and
                            ``(iii) public and private entities to 
                        provide advice and assistance counseling in 
                        accordance with subsection (f).
                    ``(B) 30-day period for approval or disapproval.--
                An agreement under subparagraph (A) shall require that 
                a Disability Determination Service determine within 30 
                days of the receipt of an application for benefits 
                under the CLASS program whether an applicant is an 
                eligible tier I beneficiary or an eligible tier II 
                beneficiary. An application that is pending after 45 
                days shall be deemed approved.
                    ``(C) Presumptive eligibility for certain 
                institutionalized enrollees planning to discharge.--An 
                active enrollee shall be deemed presumptively eligible 
                if the enrollee--
                            ``(i) has applied for receipt of tier II 
                        benefits;
                            ``(ii) is a patient in a hospital, nursing 
                        facility, intermediate care facility for the 
                        mentally retarded, or an institution for mental 
                        diseases; and
                            ``(iii) is in the process of, or about to 
                        begin the process of, planning to discharge 
                        from the hospital, facility, or institution.
                    ``(D) Appeals.--The Secretary shall establish 
                procedures under which an applicant for benefits under 
                the CLASS program shall be guaranteed the right to 
                appeal an adverse determination.
    ``(b) Tier I Benefits.--An eligible tier I beneficiary shall 
receive the following tier I benefits:
            ``(1) Daily cash benefit.--A daily cash benefit in the 
        amount of $50 per day.
            ``(2) Annual benefit.--An annual benefit in an amount not 
        to exceed the amount equal to the daily benefit applicable 
        under paragraph (1) (after the application of subsection (g)) 
        multiplied by 365.
            ``(3) Advocacy services.--Advocacy services in accordance 
        with subsection (e).
            ``(4) Advice and assistance counseling.--Advice and 
        assistance counseling in accordance with subsection (f).
            ``(5) No lifetime limit.--There shall be no lifetime limit 
        on the aggregate tier I benefits that an eligible tier I 
        beneficiary may receive.
    ``(c) Tier II Benefits.--An eligible tier II beneficiary shall 
receive the following tier II benefits:
            ``(1) Daily cash benefit.--A daily cash benefit in the 
        amount of $100 per day.
            ``(2) Annual benefit.--An annual benefit in an amount not 
        to exceed the amount equal to the daily benefit applicable 
        under paragraph (1) (after the application of subsection (g)) 
        multiplied by 365.
            ``(3) Advocacy services.--Advocacy services in accordance 
        with subsection (e).
            ``(4) Advice and assistance counseling.--Advice and 
        assistance counseling in accordance with subsection (f).
            ``(5) No lifetime limit.--There shall be no lifetime limit 
        on the aggregate tier II benefits that an eligible tier II 
        beneficiary may receive.
    ``(d) Payment of Benefits.--
            ``(1) Life independence accounts.--
                    ``(A) In general.--The Secretary shall establish 
                procedures under which tier I daily cash benefits and 
                tier II daily cash benefits shall be paid on a monthly 
                basis into a Life Independence Account established by 
                the Secretary on behalf of each eligible tier I 
                beneficiary or eligible tier II beneficiary.
                    ``(B) Use of cash benefits.--Daily cash benefits 
                paid into a Life Independence Account of an eligible 
                tier I beneficiary or an eligible tier II beneficiary 
                shall be used to purchase nonmedical services and 
                supports that the beneficiary needs to maintain his or 
                her independence at home or in another residential 
                setting in the community, such as home modifications, 
                adaptive technology, accessible transportation, 
                homemaker services, respite care, personal assistance 
                services, and home care aides.
                    ``(C) Electronic management of funds.--The 
                procedures established in accordance with subparagraph 
                (A) shall provide for--
                            ``(i) crediting an account established on 
                        behalf of a beneficiary with the beneficiary's 
                        cash daily benefit;
                            ``(ii) accessing such account through debit 
                        cards; and
                            ``(iii) accounting for withdrawals by the 
                        beneficiary from such account.
                    ``(D) Primary payor rules for beneficiaries who are 
                enrolled in medicaid.--In the case of an eligible tier 
                I beneficiary or an eligible tier II beneficiary who is 
                enrolled in Medicaid, the following payment rules shall 
                apply:
                            ``(i) Institutionalized beneficiary.--If 
                        the beneficiary is a patient in a hospital, 
                        nursing facility, intermediate care facility 
                        for the mentally retarded, or an institution 
                        for mental diseases, the beneficiary shall 
                        retain an amount equal to 5 percent of the 
                        beneficiary's daily cash benefit (which shall 
                        be in addition to the amount of the 
                        beneficiary's personal needs allowance provided 
                        under Medicaid), and the remainder of such 
                        benefit shall be applied toward the facility's 
                        cost of providing the beneficiary's care, and 
                        Medicaid shall provide secondary coverage for 
                        such care.
                            ``(ii) Beneficiaries receiving home and 
                        community-based services.--
                                    ``(I) 50 percent of daily benefit 
                                retained by beneficiary.--If a 
                                beneficiary is receiving medical 
                                assistance under Medicaid for home and 
                                community based services, the 
                                beneficiary shall retain an amount 
                                equal to 50 percent of the 
                                beneficiary's daily cash benefit, 
                                subject to subclause (II), and the 
                                remainder of the daily cash benefit 
                                shall be applied toward the cost to the 
                                State of providing such assistance (and 
                                shall not be used to claim Federal 
                                matching funds under Medicaid), and 
                                Medicaid shall provide secondary 
                                coverage for the remainder of any costs 
                                incurred in providing such assistance.
                                    ``(II) Requirement for state 
                                offset.--A State shall be paid the 
                                remainder of a beneficiary's daily cash 
                                benefit under subclause (I) only if the 
                                State home and community-based waiver 
                                under section 1115 of the Social 
                                Security Act (42 U.S.C. 1315) or 
                                subsection (c) or (d) of section 1915 
                                of such Act (42 U.S.C. 1396n) does not 
                                include a waiver of the requirements of 
                                section 1902(a)(1) of the Social 
                                Security Act (relating to 
                                statewideness) or of section 
                                1902(a)(10)(B) of such Act (relating to 
                                comparability) and the State offers at 
                                a minimum case management services, 
                                personal care services, habilitation 
                                services, and respite care under such a 
                                waiver.
                                    ``(III) Definition of home and 
                                community-based services.--In this 
                                clause, the term `home and community-
                                based services' means any services 
                                which may be offered under a home and 
                                community-based waiver authorized for a 
                                State under section 1115 of the Social 
                                Security Act (42 U.S.C. 1315) or 
                                subsection (c) or (d) of section 1915 
                                of such Act (42 U.S.C. 1396n).
            ``(2) Authorized representatives.--
                    ``(A) In general.--The procedures established under 
                paragraph (1)(A) shall allow for access to tier I daily 
                benefits or tier II daily benefits by an authorized 
                representative of the eligible tier I beneficiary or 
                eligible tier II beneficiary on whose behalf such 
                benefits are paid.
                    ``(B) Quality assurance and protection against 
                fraud and abuse.--The Secretary shall include in the 
                procedures established under paragraph (1) standards of 
                conduct for authorized representatives of eligible tier 
                I beneficiaries and eligible tier II beneficiaries to 
                ensure that authorized representatives provide quality 
                services on behalf of such beneficiaries, do not have 
                conflicts of interest, and do not misuse benefits paid 
                on behalf of such beneficiaries or otherwise engage in 
                fraud or abuse.
            ``(3) Commencement of benefits.--Tier I benefits or tier II 
        benefits, as applicable, shall be paid to, or on behalf of, an 
        eligible tier I beneficiary or an eligible tier II beneficiary, 
        respectively, beginning with the first month in which an 
        application for such benefits is approved.
            ``(4) Rollover option for lump-sum payment.--An eligible 
        tier I beneficiary or an eligible tier II beneficiary may elect 
        to--
                    ``(A) defer payment of their daily benefit and to 
                rollover any such deferred benefits from month-to-
                month, but not from year-to-year; and
                    ``(B) receive a lump-sum payment of such deferred 
                benefits in an amount that may not exceed the lesser 
                of--
                            ``(i) the total amount of the accrued 
                        deferred benefits; or
                            ``(ii) the applicable annual benefit.
            ``(5) Period for determination of annual benefits.--
                    ``(A) In general.--The applicable period for 
                determining with respect to an eligible tier I 
                beneficiary or an eligible tier II beneficiary the 
                applicable annual benefit and the amount of any accrued 
                deferred benefits is the 12-month period that commences 
                with the first month in which the beneficiary began to 
                receive such benefits, and each 12-month period 
                thereafter.
                    ``(B) Inclusion of tier i benefits.--The Secretary 
                shall establish procedures under which benefits paid to 
                an eligible tier I beneficiary who becomes an eligible 
                tier II beneficiary before the end of a 12-month 
                benefit period shall be included in the determination 
                of the applicable annual benefit paid to the eligible 
                tier II beneficiary.
                    ``(C) Recoupment of unpaid, accrued benefits.--
                            ``(i) In general.--The Secretary shall 
                        recoup any accrued benefits in the event of--
                                    ``(I) the death of a beneficiary; 
                                or
                                    ``(II) the failure of a beneficiary 
                                to elect under paragraph (4)(B) to 
                                receive such benefits as a lump-sum 
                                payment before the end of the 12-month 
                                period in which such benefits accrued.
                            ``(ii) Payment into independence fund.--Any 
                        benefits recouped in accordance with clause (i) 
                        shall be paid into the Independence Fund and 
                        used in accordance with section 2905.
            ``(6) Requirement to recertify eligibility for receipt of 
        benefits and to notify the secretary if not earning wages or 
        income.--The procedures established under paragraph (1)(A) 
        shall provide for an eligible tier I beneficiary or an eligible 
        tier II beneficiary to--
                    ``(A) annually--
                            ``(i) recertify by submission of medical 
                        evidence the beneficiary's continued 
                        eligibility for receipt of tier I or tier II 
                        benefits (as applicable); and
                            ``(ii) submit records of expenditures 
                        attributable to the aggregate daily cash 
                        benefit received by the beneficiary during the 
                        preceding year; and
                    ``(B) notify the Secretary if the beneficiary is 
                not earning wages or deriving self-employment income 
                and should not have to pay a monthly premium to 
                maintain enrollment in the CLASS program in accordance 
                with section 2903(e)(2).
            ``(7) Supplement, not supplant other health care 
        benefits.--Subject to the Medicaid payment rules under 
        paragraph (1)(C), benefits received by an eligible tier I 
        beneficiary or an eligible tier II beneficiary shall 
        supplement, but not supplant, other health care benefits for 
        which the beneficiary is eligible under Medicaid or any other 
        Federally funded program that provides health care benefits or 
        assistance.
    ``(e) Advocacy Services.--An agreement entered into under 
subsection (a)(2)(A)(ii) shall require the Protection and Advocacy 
System for the State to--
            ``(1) assign, as needed, an advocacy counselor to each 
        eligible tier I beneficiary or eligible tier II beneficiary 
        that is covered by such agreement and who provides an eligible 
        tier I beneficiary or an eligible tier II beneficiary with--
                    ``(A) information regarding how to access the 
                appeals process established for the program;
                    ``(B) assistance with respect to the annual 
                recertification and notification required under 
                subsection (d)(6); and
                    ``(C) such other services as the Secretary, by 
                regulation, shall require; and
            ``(2) ensure that the System and such counselors comply 
        with the requirements of subsection (i).
    ``(f) Advice and Assistance Counseling.--An agreement entered into 
under subsection (a)(2)(A)(iii) shall require the entity to assign, as 
requested by an eligible tier I beneficiary or an eligible tier II 
beneficiary that is covered by such agreement, an advice and assistance 
counselor who provides an eligible tier I beneficiary or an eligible 
tier II beneficiary with information regarding--
            ``(1) accessing and coordinating long-term services and 
        supports in the most integrated setting;
            ``(2) possible eligibility for other benefits and services;
            ``(3) development of a service and support plan; and
            ``(4) such other services as the Secretary, by regulation, 
        may require.
    ``(g) No Effect on Eligibility for Other Benefits.--Benefits paid 
to an eligible tier I beneficiary or an eligible tier II beneficiary 
under the CLASS program shall be disregarded for purposes of 
determining or continuing the beneficiary's eligibility for receipt of 
benefits under any other Federal, State, or locally funded assistance 
program, including benefits paid under titles II, XVI, XVIII, XIX, or 
XXI of the Social Security Act (42 U.S.C. 401 et seq., 1381 et seq., 
1395 et seq., 1396 et seq., 1397aa et seq.), under the laws 
administered by the Secretary of Veterans Affairs, under low-income 
housing assistance programs, or under the food stamp program 
established under the Food Stamp Act of 1977 (7 U.S.C. 2011).
    ``(h) Cost-of-Living and Other Adjustments.--
            ``(1) In general.--Beginning with 2007, the dollar amounts 
        specified in subsections (b)(1) and (c)(1) shall be annually 
        increased by the percentage increase in the consumer price 
        index for all urban consumers (U.S. city average) over the 
        previous year.
            ``(2) Additional adjustment.--With respect to any year for 
        which the Secretary has determined under section 2903(b)(4)(C) 
        that an adjustment to the monthly premium amounts is necessary 
        to ensure program solvency, the Secretary shall decrease the 
        increase in the dollar amounts specified in subsections (b)(1) 
        and (c)(1) that would otherwise be applicable under paragraph 
        (1) for that year, by such amount as the Secretary determines 
        is appropriate for that year (but shall ensure that there is an 
        increase in such dollar amounts for that year) .
    ``(i) Rule of Construction.--Nothing in this title shall be 
construed as prohibiting tier I or tier II benefits paid under the 
CLASS program from being used to compensate a family caregiver for 
providing community living assistance services and supports to an 
eligible tier I beneficiary or an eligible tier II beneficiary.
    ``(j) Protection Against Conflict of Interests.--The Secretary 
shall establish procedures to ensure that the Disability Determination 
Service and Protection and Advocacy System for a State, advocacy 
counselors for eligible tier I or eligible tier II beneficiaries, and 
any other entities that provide services to active enrollees and 
eligible tier I or eligible tier II beneficiaries under the CLASS 
program comply with the following:
            ``(1) If the entity provides counseling or planning 
        services, such services are provided in a manner that fosters 
        the best interests of the active enrollee or beneficiary.
            ``(2) The entity has established operating procedures that 
        are designed to avoid or minimize conflicts of interest between 
        the entity and an active enrollee or beneficiary.
            ``(3) The entity provides information about all services 
        and options available to the active enrollee or beneficiary, to 
        the best of its knowledge, including services available through 
        other entities or providers.
            ``(4) The entity assists the active enrollee or beneficiary 
        to access desired services, regardless of the provider.
            ``(5) The entity reports the number of active enrollees and 
        beneficiaries provided with assistance by age, disability, and 
        whether such enrollees and beneficiaries received services from 
        the entity or another entity.
            ``(6) If the entity provides counseling or planning 
        services, the entity ensures that an active enrollee or 
        beneficiary is informed of any financial interest that the 
        entity has in a service provider.
            ``(7) The entity provides an active enrollee or beneficiary 
        with a list of available service providers that can meet the 
        needs of the active enrollee or beneficiary.

``SEC. 2905. INDEPENDENCE FUND.

    ``(a) Establishment of Independence Fund.--There is established in 
the Treasury of the United States a trust fund to be known as the 
`Independence Fund'. The Secretary shall serve as Managing Trustee of 
such Fund. The Fund shall consist of all amounts derived from payments 
into the Fund under sections 2903(d) and 2904(d)(5)(C)(ii), and 
remaining after investment of such amounts under subsection (b), 
including additional amounts derived as income from such investments. 
The amounts held in the Fund are appropriated and shall remain 
available without fiscal year limitation--
            ``(1) to be held for investment on behalf of individuals 
        enrolled in the CLASS program;
            ``(2) to pay the administrative expenses related to the 
        Fund and to investment under subsection (b); and
            ``(3) to pay tier I and tier II benefits under section 
        2904.
    ``(b) Investment of Fund Balance.--The Secretary, through the 
Secretary of the Treasury, shall invest the Independence Fund in the 
same manner, and to the same extent, as the Federal Old-Age and 
Survivors Trust Fund and the Federal Disability Insurance Trust Fund 
may be invested under section 201(d) of the Social Security Act (42 
U.S.C. 401(d)).
    ``(c) Off-Budget Status; Lock-Box Protection.--
            ``(1) Exclusion of trust funds from all budgets.--
        Notwithstanding any other provision of law, the amounts derived 
        from payments into the Fund and amounts paid from the Fund 
        shall not be counted as new budget authority, outlays, 
        receipts, or deficit or surplus for purposes of--
                    ``(A) the budget of the United States Government, 
                as submitted by the President;
                    ``(B) the congressional budget; or
                    ``(C) the Balanced Budget and Emergency Deficit 
                Control Act of 1985.
            ``(2) Lock-box protection.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, it shall not be in order in the 
                Senate or the House of Representatives to consider any 
                measure that would authorize the payment or use of 
                amounts in the Fund for any purpose other than a 
                purpose authorized under this title.
                    ``(B) 60-vote waiver required in the senate.--
                            ``(i) In general.--Subparagraph (A) may be 
                        waived or suspended in the Senate only by the 
                        affirmative vote of \3/5\ of the Members, duly 
                        chosen and sworn.
                            ``(ii) Appeals.--
                                    ``(I) Procedure.--Appeals in the 
                                Senate from the decisions of the Chair 
                                relating to clause (i) shall be limited 
                                to 1 hour, to be equally divided 
                                between, and controlled by, the mover 
                                and the manager of the measure that 
                                would authorize the payment or use of 
                                amounts in the Fund for a purpose other 
                                than a purpose authorized under this 
                                title.
                                    ``(II) 60-votes required.--An 
                                affirmative vote of \3/5\ of the 
                                Members, duly chosen and sworn, shall 
                                be required in the Senate to sustain an 
                                appeal of the ruling of the Chair on a 
                                point of order raised in relation to 
                                clause (i).
                    ``(C) Rules of the senate and house of 
                representatives.--This section is enacted by Congress--
                            ``(i) as an exercise of the rulemaking 
                        power of the Senate and House of 
                        Representatives, respectively, and is deemed to 
                        be part of the rules of each House, 
                        respectively, but applicable only with respect 
                        to the procedure to be followed in that House 
                        in the case of a measure described in 
                        subparagraph (A), and it supersedes other rules 
                        only to the extent that it is inconsistent with 
                        such rules; and
                            ``(ii) with full recognition of the 
                        constitutional right of either House to change 
                        the rules (so far as they relate to the 
                        procedure of that House) at any time, in the 
                        same manner, and to the same extent as in the 
                        case of any other rule of that House.
    ``(d) Additional Appropriations to Ensure Solvency During Initial 
Benefit Years.--In addition to the amounts appropriated to the Fund 
under subsection (a), out of any money in the Treasury of the United 
States not otherwise appropriated, there are appropriated to the Fund, 
for each of fiscal years 2011 through 2015, such sums as are necessary 
for each such fiscal year (and which, in the case of each of fiscal 
years 2012 through 2015, shall be less than the amount appropriated for 
the preceding fiscal year) to ensure the solvency of the Fund during 
the first 5 years in which tier I or tier II benefits are paid from the 
Fund. Amounts appropriated under this subsection shall remain available 
without fiscal year limitation for the purposes specified in paragraphs 
(1), (2), and (3) of subsection (a).

``SEC. 2906. REGULATIONS; ANNUAL REPORT.

    ``(a) Regulations.--The Secretary shall promulgate such regulations 
as are necessary to carry out the CLASS program in accordance with this 
title. Such regulations shall include provisions to prevent fraud and 
abuse under the program.
    ``(b) Annual Report.--Beginning with fiscal year 2011, the 
Secretary shall submit an annual report to Congress on the CLASS 
program. Each report shall include the following:
            ``(1) The total amount of enrollees in the program.
            ``(2) The total number of eligible tier I beneficiaries and 
        eligible tier II beneficiaries during the fiscal year.
            ``(3) The total amount of tier I and tier II benefits 
        provided during the fiscal year.
            ``(4) A description of instances of fraud or abuse 
        identified during the fiscal year.
            ``(5) Recommendations for such administrative or 
        legislative action as the Secretary determines is necessary to 
        improve the program or to prevent the occurrence of fraud or 
        abuse.

``SEC. 2907. TAX TREATMENT OF PROGRAM.

    ``The CLASS program shall be treated for purposes of the Internal 
Revenue Code of 1986 in the same manner as a qualified long-term care 
insurance contract for qualified long-term care services.''.
            (2) Conforming amendments to medicaid.--Section 1902(a) of 
        the Social Security Act (42 U.S.C. 1396a(a)) is amended--
                    (A) in paragraph (66), by striking ``and'' at the 
                end;
                    (B) in paragraph (67), by striking the period and 
                inserting ``; and''; and
                    (C) by inserting after paragraph (67) the 
                following:
            ``(68) provide that the State will comply with such 
        regulations regarding the application of primary and secondary 
        payor rules with respect to individuals who are eligible for 
        medical assistance under this title and are eligible tier I 
        beneficiaries or eligible tier II beneficiaries under the CLASS 
        program established under title XXIX of the Public Health 
        Service Act as the Secretary shall establish.''.
    (b) Assurance of Adequate Infrastructure for the Provision of 
Personal Care Attendant Workers.--Section 1902(a) of the Social 
Security Act (42 U.S.C. 1396a(a)), as amended by subsection (a)(2), is 
amended--
            (1) in paragraph (67), by striking ``and'' at the end;
            (2) in paragraph (68), by striking the period at the end 
        and inserting ``; and''; and
            (3) by inserting after paragraph (68), the following:
            ``(69) provide that, not later than 2 years after the date 
        of enactment of the Community Living Assistance Services and 
        Supports Act, each State shall--
                    ``(A) assess the extent to which entities such as 
                providers of home care, home health services, home and 
                community service providers, public authorities created 
                to provide personal care services to individuals 
                eligible for medical assistance under the State plan, 
                and nonprofit organizations, are serving or have the 
                capacity to serve as fiscal agents for, employers of, 
                and providers of employment-related benefits for, 
                personal care attendant workers who provide personal 
                care services to individuals receiving benefits under 
                the CLASS program established under title XXIX of the 
                Public Health Service Act, including in rural and 
                underserved areas;
                    ``(B) designate or create such entities to serve as 
                fiscal agents for, employers of, and providers of 
                employment-related benefits for, such workers to ensure 
                an adequate supply of the workers for individuals 
                receiving benefits under the CLASS program, including 
                in rural and underserved areas; and
                    ``(C) ensure that the designation or creation of 
                such entities will not impede the ability of such 
                individuals to retain, manage, or dismiss such workers 
                or inhibit such individuals from relying on family 
                members for the provision of personal care services.''.
    (c) Personal Care Attendants Workforce Advisory Panel.--
            (1) Establishment.--Not later than 90 days after the date 
        of enactment of this Act, the Secretary of Health and Human 
        Services shall establish a Personal Care Attendants Workforce 
        Advisory Panel for the purpose of examining and advising the 
        Secretary and Congress on workforce issues related to personal 
        care attendant workers, including with respect to the adequacy 
        of the number of such workers, the salaries, wages, and 
        benefits of such workers, and access to the services provided 
        by such workers.
            (2) Membership.--In appointing members to the Personal Care 
        Attendants Workforce Advisory Panel, the Secretary shall ensure 
        that such members include the following:
                    (A) Individuals with disabilities of all ages.
                    (B) Senior individuals.
                    (C) Representatives of individuals with 
                disabilities.
                    (D) Representatives of senior individuals.
                    (E) Representatives of workforce and labor 
                organizations.
                    (F) Representatives of home and community-based 
                service providers.
                    (G) Representatives of assisted living providers.

       TITLE II--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

SEC. 201. ABOVE-THE-LINE DEDUCTION FOR PREMIUM COSTS.

    (a) In General.--Section 62(a) of the Internal Revenue Code of 1986 
(defining adjusted gross income) is amended by redesignating paragraph 
(19), as added by section 703(a) of the American Jobs Creation Act of 
2004, as paragraph (20), and by inserting after paragraph (20) (as so 
redesignated) the following new paragraph:
            ``(21) Class program premiums.--The deduction allowed by 
        section 213 (determined without regard to any adjusted gross 
        income limitation) which consists of amounts paid by the 
        taxpayer for enrollment in the CLASS program (as defined in 
        section 36(d)) for eligible enrollment months (as defined in 
        section 36(b)) beginning in the taxable year.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.

SEC. 202. CREDIT FOR PREMIUM COSTS OF LOW-INCOME CLASS ENROLLEES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 36 as section 37 and inserting 
after section 35 the following new section:

``SEC. 36. PREMIUM COSTS OF LOW-INCOME CLASS ENROLLEES.

    ``(a) In General.--In the case of a low-income CLASS enrollee, 
there shall be allowed as a credit against the tax imposed by subtitle 
A an amount equal to 50 percent of the amount paid by the taxpayer for 
enrollment of the taxpayer and the taxpayer's spouse in the CLASS 
program for eligible enrollment months beginning in the taxable year.
    ``(b) Eligible Enrollment Month.--For purposes of this section--
            ``(1) In general.--The term `eligible enrollment month' 
        means any month if, as of the first day of such month, the 
        taxpayer is a low-income CLASS enrollee enrolled in the CLASS 
        program, the premium for which is paid by the taxpayer.
            ``(2) Joint returns.--In the case of a joint return, the 
        requirements of paragraph (1) shall be treated as met with 
        respect to any month if at least 1 spouse satisfies such 
        requirements.
    ``(c) Low-Income Class Enrollee.--For purposes of this section, the 
term `low-income CLASS enrollee' means an individual--
            ``(1) who is an active enrollee in the CLASS program (as 
        defined in section 2901(1) of the Public Health Service Act); 
        and
            ``(2) whose gross income does not exceed 250 percent of the 
        poverty line.
    ``(d) Class Program.--For purposes of this section, the term `CLASS 
program' means the program for community living assistance services and 
supports established under title XXIX of the Public Health Service Act.
    ``(e) Special Rules.--
            ``(1) Coordination with other deductions.--Amounts taken 
        into account under subsection (a) shall not be taken into 
        account in determining any deduction allowed under section 
        62(a)(21), 162(l), or 213.
            ``(2) MSA distributions.--Amounts distributed from an 
        Archer MSA (as defined in section 220(d)) shall not be taken 
        into account under subsection (a).
            ``(3) Denial of credit to dependents.--No credit shall be 
        allowed under this section to any individual with respect to 
        whom a deduction under section 151 is allowable to another 
        taxpayer for a taxable year beginning in the calendar year in 
        which such individual's taxable year begins.
            ``(4) Both spouses eligible individuals.--For purposes of 
        subsection (a), the amount paid for enrollment of the 
        taxpayer's spouse shall be disregarded if--
                    ``(A) the taxpayer is married at the close of the 
                taxable year,
                    ``(B) the taxpayer and the taxpayer's spouse are 
                both low-income CLASS enrollees during the taxable 
                year, and
                    ``(C) the taxpayer files a separate return for the 
                taxable year.
            ``(5) Marital status; certain married individuals living 
        apart.--Rules similar to the rules of paragraph (3) and (4) of 
        section 21(e) shall apply for purposes of this section.
    ``(f) Regulations.--The Secretary may prescribe such regulations 
and guidance as may be necessary or appropriate to carry out this 
section.''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``or 36'' after ``35''.
            (2) The table of section for subpart C of part IV of 
        chapter 1 of the Internal Revenue Code of 1986 is amended by 
        striking the last item and inserting the following new items:

        ``Sec. 36. Premiums costs of low-income CLASS enrollees.
        ``Sec. 37. Overpayments of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.

SEC. 203. CREDIT FOR COSTS OF EMPLOYERS WHO ELECT TO AUTOMATICALLY 
              ENROLL EMPLOYEES AND WITHHOLD CLASS PREMIUMS FROM WAGES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business credits) is 
amended by inserting after section 45M the following:

``SEC. 45N. CREDIT FOR COSTS OF AUTOMATICALLY ENROLLING EMPLOYEES AND 
              WITHHOLDING CLASS PREMIUMS FROM WAGES.

    ``(a) General Rule.--For purposes of section 38, the CLASS 
automatic enrollment and premium withholding credit determined under 
this section for the taxable year is an amount equal to 25 percent of 
the total amount paid or incurred by the taxpayer during the taxable 
year to--
            ``(1) automatically enroll employees in the CLASS program 
        established under title XXIX of the Public Health Service Act, 
        and
            ``(2) withhold monthly CLASS premiums on behalf of an 
        employee who is enrolled in that program.
    ``(b) Denial of Double Benefit.--No deduction shall be allowed 
under this chapter for any amount taken into account in determining the 
credit under this section.
    ``(c) Election Not to Claim Credit.--This section shall not apply 
to a taxpayer for any taxable year if such taxpayer elects to have this 
section not apply for such taxable year.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 of the Internal Revenue Code of 1986 (relating to general 
business credit) is amended by striking ``plus'' at the end of 
paragraph (23), by striking the period at the end of paragraph (24) and 
inserting ``, plus'', and by inserting after paragraph (24) the 
following new paragraph:
            ``(25) the CLASS automatic enrollment and premium 
        withholding credit.''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 45M the 
following new item:

        ``Sec. 45N. Credit for costs of automatically enrolling 
                            employees and withholding CLASS premiums 
                            from wages.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred after December 31, 2005, in taxable 
years ending after such date.

SEC. 204. LONG-TERM CARE INSURANCE INCLUDIBLE IN CAFETERIA PLANS.

    (a) In General.--Section 125(f) of the Internal Revenue Code of 
1986 is amended by striking the last sentence.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2005.

                       TITLE III--EFFECTIVE DATE

SEC. 301. EFFECTIVE DATE.

    Except as provided in sections 201(b), 202(c), and 203(b), this Act 
and the amendments made by this Act take effect on January 1, 2006.
                                 <all>