1.This Act may be cited as the
Alzheimer’s Family Assistance Act of
2009
.
2.Credit for
taxpayers with Long-Term care needs
(a)Subpart A of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is
amended by inserting after section 25D the following new section:
25E.Credit for
taxpayers with Long-Term care needs
(a)
(1)There shall be allowed as a credit against the tax
imposed by this chapter for the taxable year an amount equal to the applicable
credit amount multiplied by the number of applicable individuals with respect
to whom the taxpayer is an eligible caregiver for the taxable year.
(2)For purposes of paragraph (1), the applicable
credit amount shall be determined in accordance with the following
table:
For taxable years
beginningThe applicable
in calendar year—credit amount
is—
2009$2,000
2010$2,500
2011$3,000
2012 or
thereafter$3,500.
(b)Limitation Based
on Adjusted Gross Income
(1)The amount of the credit allowable under subsection (a)
shall be reduced (but not below zero) by $100 for each $1,000 (or fraction
thereof) by which the taxpayer’s modified adjusted gross income exceeds the
threshold amount. For purposes of the preceding sentence, the term
modified adjusted gross income means adjusted gross income
increased by any amount excluded from gross income under section 911, 931, or
933.
(2)For purposes of paragraph (1), the term threshold
amount means—
(A)$150,000 in the
case of a joint return, and
(B)$75,000 in any
other case.
(3)In
the case of any taxable year beginning in a calendar year after 2009, each
dollar amount contained in paragraph (2) shall be increased by an amount equal
to the product of—
(A)such dollar
amount, and
(B)the medical care
cost adjustment determined under section 213(d)(10)(B)(ii) for the calendar
year in which the taxable year begins, determined by substituting
2008
for 1996
in subclause (II) thereof.
If any
increase determined under the preceding sentence is not a multiple of $50, such
increase shall be rounded to the next lowest multiple of $50.(c)For
purposes of this section—
(1)
(A)The term applicable individual means, with
respect to any taxable year, any individual who has been certified, before the
due date for filing the return of tax for the taxable year (without
extensions), by a physician (as defined in section 1861(r)(1) of the
Social Security Act) as being an
individual with long-term care needs described in subparagraph (B) for a
period—
(i)which is at least
120 consecutive days, and
(ii)a
portion of which occurs within the taxable year.
Such
term shall not include any individual otherwise meeting the requirements of the
preceding sentence unless within the 391/2 month period
ending on such due date (or such other period as the Secretary prescribes) a
physician (as so defined) has certified that such individual meets such
requirements.(B)Individuals with
long-term care needsAn individual is described in this
subparagraph if the individual meets any of the following requirements:
(i)The individual is
at least 18 years of age and—
(I)is unable to
perform (without substantial assistance from another individual) at least 3
activities of daily living (as defined in section 7702B(c)(2)(B)) due to a loss
of functional capacity, or
(II)requires
substantial supervision to protect such individual from threats to health and
safety due to severe cognitive impairment and is unable to perform at least 1
activity of daily living (as so defined) or to the extent provided in
regulations prescribed by the Secretary (in consultation with the Secretary of
Health and Human Services), is unable to engage in age appropriate
activities.
(ii)The individual is
at least 6 but not 18 years of age and—
(I)is unable to
perform (without substantial assistance from another individual) at least 3
activities of daily living (as defined in section 7702B(c)(2)(B)) due to a loss
of functional capacity,
(II)requires
substantial supervision to protect such individual from threats to health and
safety due to severe cognitive impairment and is unable to perform at least 1
activity of daily living (as so defined) or to the extent provided in
regulations prescribed by the Secretary (in consultation with the Secretary of
Health and Human Services), is unable to engage in age appropriate
activities,
(III)has a level of
disability similar to the level of disability described in subclause (I) (as
determined under regulations promulgated by the Secretary), or
(IV)has a complex
medical condition (as defined by the Secretary) that requires medical
management and coordination of care.
(iii)The individual
is at least 2 but not 6 years of age and—
(I)is unable due to a
loss of functional capacity to perform (without substantial assistance from
another individual) at least 2 of the following activities: eating,
transferring, or mobility,
(II)has a level of
disability similar to the level of disability described in subclause (I) (as
determined under regulations promulgated by the Secretary), or
(III)has a complex
medical condition (as defined by the Secretary) that requires medical
management and coordination of care.
(iv)The individual is
under 2 years of age and—
(I)requires specific
durable medical equipment by reason of a severe health condition or requires a
skilled practitioner trained to address the individual’s condition to be
available if the individual’s parents or guardians are absent,
(II)has a level of
disability similar to the level of disability described in subclause (I) (as
determined under regulations promulgated by the Secretary), or
(III)has a complex
medical condition (as defined by the Secretary) that requires medical
management and coordination of care.
(v)The individual has
5 or more chronic conditions (as defined in subparagraph (C)) and is unable to
perform (without substantial assistance from another individual) at least 1
activity of daily living (as so defined) due to a loss of functional
capacity.
(C)For purposes of this paragraph, the term chronic
condition means a condition that lasts for at least 6 consecutive months
and requires ongoing medical care.
(2)
(A)A taxpayer shall be treated as an eligible caregiver for
any taxable year with respect to each of the following individuals:
(i)The
taxpayer.
(ii)The taxpayer’s
spouse.
(iii)An individual
who is a qualifying child (as defined in section 152(c)) or a qualifying
relative (as defined in section 152(d)) with respect to whom the taxpayer is
allowed a deduction under section 151(c) for the taxable year.
(iv)An individual who
would be a qualifying relative described in clause (iii) for the taxable year
if section 152(d)(1)(B) were applied by substituting for the exemption amount
an amount equal to the sum of the exemption amount, the standard deduction
under section 63(c)(2)(C), and any additional standard deduction under section
63(c)(3) which would be applicable to the individual if clause (iii)
applied.
(v)An
individual who would be a qualifying relative described in clause (iii) for the
taxable year if—
(I)the requirements of
clause (iv) are met with respect to the individual, and
(II)the requirements
of subparagraph (B) are met with respect to the individual in lieu of the
support test of section 152(d)(1)(C).
(B)The requirements of this subparagraph are met if an
individual has as his principal place of abode the home of the taxpayer
and—
(i)in
the case of an individual who is an ancestor or descendant of the taxpayer or
the taxpayer’s spouse, is a member of the taxpayer’s household for over half
the taxable year, or
(ii)in the case of
any other individual, is a member of the taxpayer’s household for the entire
taxable year.
(C)Special rules
where more than 1 eligible caregiver
(i)If more than 1 individual is an eligible caregiver with
respect to the same applicable individual for taxable years ending with or
within the same calendar year, a taxpayer shall be treated as the eligible
caregiver if each such individual (other than the taxpayer) files a written
declaration (in such form and manner as the Secretary may prescribe) that such
individual will not claim such applicable individual for the credit under this
section.
(ii)If each individual required under clause (i) to file a
written declaration under clause (i) does not do so, the individual with the
highest modified adjusted gross income (as defined in section 32(c)(5)) shall
be treated as the eligible caregiver.
(iii)Married
individuals filing separatelyIn the case of married individuals
filing separately, the determination under this subparagraph as to whether the
husband or wife is the eligible caregiver shall be made under the rules of
clause (ii) (whether or not one of them has filed a written declaration under
clause (i)).
(d)Identification
RequirementNo credit shall be allowed under this section to a
taxpayer with respect to any applicable individual unless the taxpayer includes
the name and taxpayer identification number of such individual, and the
identification number of the physician certifying such individual, on the
return of tax for the taxable year.
(e)Taxable Year
Must Be Full Taxable YearExcept in the case of a taxable year
closed by reason of the death of the taxpayer, no credit shall be allowable
under this section in the case of a taxable year covering a period of less than
12
months.
.
(b)
(1)Section 6213(g)(2)
of the Internal Revenue Code of 1986 is amended by striking and
at the end of subparagraph (L)(ii), by striking the period at the end of
subparagraph (M) and inserting , and
, and by inserting after
subparagraph (M) the following new subparagraph:
(N)an omission of a
correct TIN or physician identification required under section 25E(d) (relating
to credit for taxpayers with long-term care needs) to be included on a
return.
.
(2)The table of
sections for subpart A of part IV of subchapter A of chapter 1 of such Code is
amended by inserting after the item relating to section 25D the following new
item:
Sec. 25E. Credit for taxpayers with
long-term care
needs.
.
(c)The amendments made by this section shall apply to taxable
years beginning after December 31, 2009.
3.Treatment of
premiums on qualified Long-Term care insurance contracts
(a)Part VII of subchapter B of chapter 1 of the Internal
Revenue Code of 1986 (relating to additional itemized deductions) is amended by
redesignating section 224 as section 225 and by inserting after section 223 the
following new section:
224.Premiums on
qualified Long-Term care insurance contracts
(a)In the case of an individual, there shall be allowed as a
deduction an amount equal to the applicable percentage of the amount of
eligible long-term care premiums (as defined in section 213(d)(10)) paid during
the taxable year for coverage for the taxpayer and the taxpayer’s spouse and
dependents under a qualified long-term care insurance contract (as defined in
section 7702B(b)).
(b)For purposes of subsection (a)—
(1)Except as otherwise provided in this subsection, the
applicable percentage shall be determined in accordance with the following
table based on the number of years of continuous coverage (as of the close of
the taxable year) of the individual under any qualified long-term care
insurance contracts (as defined in section 7702B(b)):
If the number of years
ofThe applicable
continuous coverage is—percentage is—
Less than
160
At least 1 but
less than 270
At least 2 but
less than 380
At least 3 but
less than 490
At least
4100.
(2)Special rules
for individuals who have attained age 55In the case of an
individual who has attained age 55 as of the close of the taxable year, the
following table shall be substituted for the table in paragraph (1):
If the number of years
ofThe applicable
continuous coverage is—percentage is—
Less than
170
At least 1 but
less than 285
At least
2100.
(3)Only coverage
after 2009 taken into accountOnly coverage for periods after
December 31, 2009, shall be taken into account under this subsection.
(4)An individual shall not fail to be treated as having
continuous coverage if the aggregate breaks in coverage during any 1-year
period are less than 60 days.
(c)Coordination
With Other DeductionsAny amount paid by a taxpayer for any
qualified long-term care insurance contract to which subsection (a) applies
shall not be taken into account in computing the amount allowable to the
taxpayer as a deduction under section 162(l) or
213(a).
.
(b)
(1)Section 62(a) of
the Internal Revenue Code of 1986 is amended by inserting after paragraph (21)
the following new paragraph:
(22)Premiums on
qualified long-term care insurance contractsThe deduction
allowed by section
224.
.
(2)The table of
sections for part VII of subchapter B of chapter 1 of such Code is amended by
striking the last item and inserting the following new items:
Sec. 224. Premiums on qualified
long-term care insurance contracts.
Sec. 225. Cross
reference.
.
(c)The amendments made by this section shall apply to taxable
years beginning after December 31, 2009.
4.Additional
consumer protections for Long-Term care insurance
(a)Additional
Protections Applicable to Long-Term Care InsuranceSubparagraphs
(A) and (B) of section 7702B(g)(2) of the Internal Revenue Code of 1986
(relating to requirements of model regulation and Act) are amended to read as
follows:
(A)The requirements of this paragraph are met with respect
to any contract if such contract meets—
(i)The following requirements of the model
regulation:
(I)Section 6A
(relating to guaranteed renewal or noncancellability), and the requirements of
section 6B of the model Act relating to such section 6A.
(II)Section 6B
(relating to prohibitions on limitations and exclusions).
(III)Section 6C
(relating to extension of benefits).
(IV)Section 6D
(relating to continuation or conversion of coverage).
(V)Section 6E
(relating to discontinuance and replacement of policies).
(VI)Section 7
(relating to unintentional lapse).
(VII)Section 8
(relating to disclosure), other than section 8F thereof.
(VIII)Section 11
(relating to prohibitions against post-claims underwriting).
(IX)Section 12
(relating to minimum standards).
(X)Section 13
(relating to requirement to offer inflation protection), except that any
requirement for a signature on a rejection of inflation protection shall permit
the signature to be on an application or on a separate form.
(XI)Section 25
(relating to prohibition against preexisting conditions and probationary
periods in replacement policies or certificates).
(XII)The provisions
of section 26 relating to contingent nonforfeiture benefits, if the
policyholder declines the offer of a nonforfeiture provision described in
paragraph (4).
(ii)The following requirements of the model Act:
(I)Section 6C
(relating to preexisting conditions).
(II)Section 6D
(relating to prior hospitalization).
(III)The provisions
of section 8 relating to contingent nonforfeiture benefits, if the policyholder
declines the offer of a nonforfeiture provision described in paragraph
(4).
(B)For
purposes of this paragraph—
(i)The terms model regulation and
model Act mean the long-term care insurance model regulation, and
the long-term care insurance model Act, respectively, promulgated by the
National Association of Insurance Commissioners (as adopted as of September
2000).
(ii)Any
provision of the model regulation or model Act listed under clause (i) or (ii)
of subparagraph (A) shall be treated as including any other provision of such
regulation or Act necessary to implement the provision.
(iii)For
purposes of this section and section 4980C, the determination of whether any
requirement of a model regulation or the model Act has been met shall be made
by the
Secretary.
.
(b)Paragraph (1) of section 4980C(c) of the Internal Revenue
Code of 1986 (relating to requirements of model provisions) is amended to read
as follows:
(1)Requirements of
model provisions
(A)The following requirements of the model regulation
must be met:
(i)Section 9
(relating to required disclosure of rating practices to consumer).
(ii)Section 14
(relating to application forms and replacement coverage).
(iii)Section 15
(relating to reporting requirements), except that the issuer shall also report
at least annually the number of claims denied during the reporting period for
each class of business (expressed as a percentage of claims denied), other than
claims denied for failure to meet the waiting period or because of any
applicable preexisting condition.
(iv)Section 22
(relating to filing requirements for marketing).
(v)Section 23
(relating to standards for marketing), including inaccurate completion of
medical histories, other than paragraphs (1), (6), and (9) of section 23C,
except that—
(I)in addition to
such requirements, no person shall, in selling or offering to sell a qualified
long-term care insurance contract, misrepresent a material fact; and
(II)no such
requirements shall include a requirement to inquire or identify whether a
prospective applicant or enrollee for long-term care insurance has accident and
sickness insurance.
(vi)Section 24
(relating to suitability).
(vii)Section 29
(relating to standard format outline of coverage).
(viii)Section 30
(relating to requirement to deliver shopper’s guide).
The
requirements referred to in clause (vi) shall not include those portions of the
personal worksheet described in Appendix B relating to consumer protection
requirements not imposed by section 4980C or 7702B.(B)The following requirements of the model Act must be
met:
(i)Section 6F
(relating to right to return), except that such section shall also apply to
denials of applications and any refund shall be made within 30 days of the
return or denial.
(ii)Section 6G
(relating to outline of coverage).
(iii)Section 6H
(relating to requirements for certificates under group plans).
(iv)Section 6I
(relating to policy summary).
(v)Section 6J
(relating to monthly reports on accelerated death benefits).
(vi)Section 7
(relating to incontestability period).
(C)For
purposes of this paragraph, the terms model regulation and
model Act have the meanings given such terms by section
7702B(g)(2)(B).
.
(c)The amendments made by this section shall apply to policies
issued more than 1 year after the date of the enactment of this Act.