[Congressional Record Volume 145, Number 59 (Wednesday, April 28, 1999)]
[Senate]
[Pages S4347-S4349]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CLELAND:
  S. 894. 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 and annuitants, and for other 
purposes; to the Committee on Governmental Affairs.


federal civilian and uniformed services long-term care insurance act of 
                                  1999

  Mr. CLELAND. Mr. President, in support of the need for an initiative 
to help address the growing long-term care needs of Americans, I am 
pleased to introduce the Federal Civilian and Uniformed Services Long-
Term Care Insurance Act of 1999 in the Senate.
  The Administration proposed a plan to offer long-term health care 
insurance to federal civilian employees. Under my bill, the 
administration's proposal is expanded to include federal civilian and 
uniformed services employees, as well as foreign service employees. 
This non-subsidized, quality private long-term care insurance option 
can then be offered at an affordable group rate. It is anticipated that 
300,000 Federal employees and 200,000 uniformed services employees 
would voluntarily participate in such a long-term insurance plan. With 
such participation, the Federal government could truly serve as the 
model for employers for long-term care insurance.
  The bill would make the following groups eligible for the long-term 
care insurance: Civilian employees after continuously working for the 
federal government for 6 months, Foreign Service employees, civilian 
annuitants upon retirement, members of the Armed Services, retired 
members of the Armed Services, and designated relatives, like parents 
and parents-in-laws.
  The bill also offers: (1) portability of this benefit regardless of 
future federal or military employment as long as the monthly premium is 
paid on a time, (2) a choice of plans to meet the insurer's needs from 
up to three insurance carriers, and (3) a choice of cash or service 
benefits (such as expense-incurred or indemnity method). Costs for this 
program are anticipated to be no more than $15 million for OPM 
administrative expenses.
  The price of long-term care is very expensive both in terms of the 
financial and emotional burden to families. In 1997, Medicare and 
Medicaid spent $15.4 billion providing home health care to Americans. 
In that same year, nursing home care cost American taxpayers 
approximately $16.9 billion. What I am proposing is legislating the 
ability to maintain self-reliance. The Federal Civilian and Uniformed 
Services Long-Term Care Insurance Act of 1999 is an important step to 
providing ``affordable, high-quality long-term care.'' I urge my 
colleagues to support it.
  Mr. President, I ask unanimous consent that the text of my 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 894

       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 ``Federal Civilian and 
     Uniformed Services Long-Term Care Insurance Act of 1999''.

     SEC. 2. LONG-TERM CARE INSURANCE.

       Subpart G of part III of title 5, United States Code, is 
     amended by adding after chapter 89 the following:

                 ``Chapter 90--Long-Term Care Insurance

``Sec.
``9001. Definitions.
``9002. Eligibility to obtain coverage.
``9003. Contracting authority.
``9004. Long-term care benefits.
``9005. Financing.
``9006. Regulations.

     ``Sec. 9001. Definitions

       ``For purposes of this chapter, the term--
       ``(1) `activities of daily living' includes--
       ``(A) eating;
       ``(B) toileting;
       ``(C) transferring;
       ``(D) bathing;
       ``(E) dressing; and
       ``(F) continence;
       ``(2) `annuitant' has the meaning such term would have 
     under section 8901(3) if, for purposes of such paragraph, the 
     term `employee' were considered to have the meaning under 
     paragraph (7) of this section;
       ``(3) `appropriate Secretary' means--
       ``(A) except as otherwise provided in this paragraph, the 
     Secretary of Defense;
       ``(B) with respect to the United States 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;
       ``(D) with respect to the commissioned corps of the Public 
     Health Service, the Secretary of Health and Human Services; 
     and
       ``(E) with respect to members of the Foreign Service, the 
     Secretary of State;
       ``(4) `assisted living facility' has the meaning given such 
     term under section 232 of the National Housing Act (12 U.S.C. 
     1715w);
       ``(5) `carrier' means a voluntary association, corporation, 
     partnership, or other nongovernmental organization that is 
     lawfully engaged in providing, paying for, or reimbursing the 
     cost of, qualified long-term care services under group 
     insurance policies or contracts, or similar group 
     arrangements, in consideration of premiums or other periodic 
     charges payable to the carrier;
       ``(6) `eligible individual' means--
       ``(A) an employee who has completed 6 months of continuous 
     service as an employee under other than a temporary 
     appointment limited to 6 months or less;
       ``(B) an annuitant;
       ``(C) a member of the uniformed services on active duty for 
     a period of more than 30 days or full-time National Guard 
     duty (as defined under section 101(d)(5) of title 10) who 
     satisfies such eligibility requirements as the Office 
     prescribes under section 9006(c);
       ``(D) a member of the uniformed services entitled to 
     retired or retainer pay (other than under chapter 1223 of 
     title 10) who satisfies such eligibility requirements as the 
     Office prescribes under section 9006(c);
       ``(E) a member of the Foreign Service who--
       ``(i) is described under section 103(1), (2), (3), (4), or 
     (5) of the Foreign Service Act of 1980 (22 U.S.C. 3903(1), 
     (2), (3), (4), or (5); and
       ``(ii) satisfies such eligibility requirements as the 
     Office prescribes under sanction 9006(c);
       ``(F) a member of the Foreign Service entitled to an 
     annuity under the Foreign Service Retirement and Disability 
     System or the Foreign Service Pension System who satisfies 
     such eligibility requirements as the Office prescribes under 
     section 9006(c); or
       ``(G) a qualified relative of a sponsoring individual;
       ``(7) `employee' means--
       ``(A) an employee as defined under section 8901(1) (A) 
     through (H); and
       ``(B) an individual described under section 2105(e);
       ``(8) `home and community care' has the meaning given such 
     term under section 1929 of the Social Security Act (42 U.S.C. 
     1396t(a));
       ``(9) `long-term care benefits plan' means a group 
     insurance policy or contract, or similar group arrangement, 
     provided by a carrier for the purpose of providing, paying 
     for, or reimbursing expenses for qualified long-term care 
     services;
       ``(10) `nursing home' has the meaning given such term under 
     section 1908 of the Social Security Act (42 U.S.C. 
     1396g(e)(1));
       ``(11) `Office' means the Office of Personnel Management;
       ``(12) `qualified long-term care services' has the meaning 
     given such term under section 7702B of the Internal Revenue 
     Code of 1986;
       ``(13) `qualified relative', as used with respect to a 
     sponsoring individual, means--
       ``(A) the spouse of such sponsoring individual;
       ``(B) a parent or parent-in-law of such sponsoring 
     individual; and
       ``(C) any other person bearing a relationship to such 
     sponsoring individual specified by the Office in regulations; 
     and
       ``(14) `sponsoring individual' refers to an individual 
     described under paragraph (6)(A), (B), (C), or (D).

     ``Sec. 9002. Eligibility to obtain coverage

       ``(a) Any eligible individual may obtain long-term care 
     insurance coverage under this chapter for such individual.
       ``(b)(1) As a condition for obtaining long-term care 
     insurance coverage under this

[[Page S4348]]

     chapter based on an individual's status as a qualified 
     relative, certification from the applicant's sponsoring 
     individual shall be required as to--
       ``(A) such sponsoring individual's status, as described 
     under section 9001(6)(A), (B), (C), or (D) (as applicable), 
     as of the time of the qualified relative's application for 
     coverage; and
       ``(B) the existence of the claimed relationship as of that 
     time.
       ``(2) Any certification under paragraph (1) shall be 
     submitted at such time and in such form and manner as the 
     Office shall by regulation prescribe.
       ``(c) 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 
     immediately benefit eligible.

     ``Sec. 9003. Contracting authority

       ``(a) Without regard to section 3709 of the Revised 
     Statutes or other statute requiring competitive bidding, the 
     Office may contract with qualified carriers to provide group 
     long-term care insurance under this chapter, except that the 
     Office may not have contracts in effect under this section 
     with more than 3 qualified carriers.
       ``(b) To be considered a qualified carrier under this 
     chapter, a company shall be licensed to issue group long-term 
     care insurance in all the States and the District of 
     Columbia.
       ``(c)(1) Each contract under this section shall contain a 
     detailed statement of the benefits offered (including any 
     maximums, limitations, exclusions, and other definitions of 
     benefits), the rates charged (including any limitations or 
     other conditions on any subsequent adjustment), and 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) The rates charged under any contract under this 
     section shall reasonably reflect the cost of the benefits 
     provided under such contract.
       ``(d) The benefits and coverage made available to 
     individuals under any contract under this section shall be 
     guaranteed to be renewable and may not be canceled by the 
     carrier except for nonpayment of charges.
       ``(e) Each contract under this section shall require the 
     carrier to agree to--
       ``(1) pay or provide benefits in an individual case if the 
     Office (or a duly designated third-party administrator) finds 
     that the individual involved is entitled to such payment or 
     benefit under the contract; and
       ``(2) participate in administrative procedures designed to 
     bring about the expeditious resolution of disputes arising 
     under such contract, including, in appropriate circumstances, 
     1 or more alternative means of dispute resolution.
       ``(f)(1)(A) Subject to subparagraph (B), each contract 
     under this section shall be for a term of 5 years, but may be 
     made automatically renewable from term to term in the absence 
     of notice of termination by either party.
       ``(B) The rights and responsibilities of the enrolled 
     individual, the insurer, and the Office (or duly designated 
     third-party administrator) under any such contract shall 
     continue until the termination of coverage of the enrolled 
     individual.
       ``(2) Group long-term care insurance coverage obtained by 
     an individual under this chapter shall terminate only upon 
     the occurrence of--
       ``(A) the death of the insured;
       ``(B) exhaustion of benefits, as determined under the 
     contract;
       ``(C) insolvency of the insurer, as determined under the 
     contract; or
       ``(D) any event justifying a cancellation under subsection 
     (d).
       ``(3) Subject to paragraph (2), each contract under this 
     section shall include such provisions as may be necessary 
     to--
       ``(A) effectively preserve all parties' rights and 
     responsibilities under such contract notwithstanding the 
     termination of such contract (whether due to nonrenewal under 
     paragraph (1) or otherwise); and
       ``(B) ensure that, once an individual becomes duly 
     enrolled, long-term care insurance coverage obtained by such 
     individual under that enrollment shall not be terminated due 
     to any change in status (as described under section 9001(6)), 
     such as separation from Government service or the uniformed 
     services, or ceasing to meet the requirements for being 
     considered a qualified relative (whether due to divorce or 
     otherwise).

     ``Sec. 9004. Long-term care benefits

       ``(a) Benefits under this chapter shall be provided under 
     qualified long-term care insurance contracts, within the 
     meaning of section 7702B of the Internal Revenue Code of 
     1986.
       ``(b) Each contract under section 9003, in addition to any 
     matter otherwise required under this chapter, shall provide 
     for--
       ``(1) adequate consumer protections (including through 
     establishment of sufficient reserves or reinsurance);
       ``(2) adequate protections in the event of carrier 
     bankruptcy (or other similar event);
       ``(3) availability of benefits upon appropriate 
     certification as to an individual's--
       ``(A) inability (without substantial assistance from 
     another individual) to perform at least 2 activities of daily 
     living for a period of at least 90 days due to a loss of 
     functional capacity;
       ``(B) having a level of disability similar (as determined 
     under regulations prescribed by the Secretary of the Treasury 
     in consultation with the Secretary of Health and Human 
     Services) to the level of disability described in 
     subparagraph (A); or
       ``(C) requiring substantial supervision to protect such 
     individual from threats to health and safety due to severe 
     cognitive impairment;
       ``(4) choice of cash or service benefits (such as the 
     expense-incurred method or the indemnity method);
       ``(5) inflation protection (whether through simple or 
     compounded adjustment of benefits); and
       ``(6) portability of benefits (consistent with section 9003 
     (d) and (f)).
       ``(c) To the maximum extent practicable, at least 1 of the 
     policies being offered under this chapter shall, in addition 
     to any matter otherwise required under this chapter, provide 
     for--
       ``(1) length-of-benefit options;
       ``(2) options relating to the provision of coverage in a 
     variety of settings, including nursing homes, assisted living 
     facilities, and home and community care;
       ``(3) options relating to elimination periods;
       ``(4) options relating to nonforfeiture benefits; and
       ``(5) availability of benefits upon appropriate 
     certification of medical necessity (as defined by the Office 
     in consultation with the Secretary of Health and Human 
     Services) not satisfying the requirements of subsection 
     (b)(3).
       ``(d)(1) The Office shall take all practicable measures to 
     ensure that, at least 1 of the long-term care benefits plans 
     available under this chapter shall be a Governmentwide long-
     term care benefits plan.
       ``(2) Neither subsection (c)(5) nor the exception under 
     subsection (e) shall apply with respect to any Governmentwide 
     plan under this subsection.
       ``(e) Nothing in this chapter shall be considered to permit 
     or require the inclusion, in any contract, of provisions 
     inconsistent with section 7702B of the Internal Revenue Code 
     of 1986 or any other provision of such Code (except to the 
     extent necessary to carry out subsection (c)(5)).
       ``(f) If a State (or the District of Columbia) imposes any 
     requirement which is more stringent than the requirement 
     imposed by subsection (b)(1), the requirement imposed by 
     subsection (b)(1) shall be treated as met if the more 
     stringent requirement of the State (or the District of 
     Columbia) is met.

     ``Sec. 9005. Financing

       ``(a) Except as provided in subsection (b)(2), each 
     individual having long-term care insurance coverage under 
     this chapter shall be responsible for 100 percent of the 
     charges for such coverage.
       ``(b)(1) The amount necessary to pay the charges for 
     enrollment shall--
       ``(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 under section 9001(6)(C), be withheld from the 
     basic pay of such member; and
       ``(D) in the case of a member of the uniformed services 
     described in section 9001(6)(D), be withheld from the retired 
     pay or retainer pay payable to such member.
       ``(2) Withholdings to pay the charges for enrollment of a 
     qualified relative may, upon election of the sponsoring 
     individual involved, be withheld under paragraph (1) in the 
     same manner as if enrollment were for such sponsoring 
     individual.
       ``(3) All amounts withheld under paragraph (1) or (2) shall 
     be paid directly to the carrier.
       ``(c)(1) Any enrollee 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) shall pay an amount 
     described under paragraph (2) (or, in the case of an enrollee 
     not receiving any regular amounts, the full amount of those 
     charges) directly to the carrier.
       ``(2) The amount referred to under paragraph (1) is the 
     amount equal to the difference between the amount of 
     withholding required for the enrollment and the amount 
     actually withheld.
       ``(d) Each carrier participating under this chapter shall 
     maintain all amounts received under this chapter separate 
     from all other funds.
       ``(e) Contracts under this chapter shall include 
     appropriate provisions under which each carrier shall 
     reimburse the Office or other administering entity for the 
     administrative costs incurred by the Office or such entity 
     under this chapter (such as for dispute resolution) which are 
     allocable to such carrier.

     ``Sec. 9006. Regulations

       ``(a) The Office shall prescribe regulations necessary to 
     carry out this chapter.
       ``(b)(1) Subject to paragraph (2), the regulations of the 
     Office shall prescribe the time at which and the manner and 
     conditions under which an individual may obtain long-term 
     care insurance under this chapter.
       ``(2) The regulations prescribed under this section shall 
     provide for an open enrollment period at least once each year 
     (similar to the open enrollment period provided under section 
     8905(f)).
       ``(c) Any regulations necessary to effect the application 
     and operation of this chapter

[[Page S4349]]

     with respect to an eligible individual or a qualified 
     relative of such individual shall be prescribed by the Office 
     in consultation with the appropriate Secretary.''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by this Act shall take effect on the 
     date of enactment of this Act, except that no coverage may 
     become effective before the first calendar year beginning 
     after the expiration of the 18-month period beginning on the 
     date of enactment of this Act.
                                 ______