[Congressional Record Volume 146, Number 47 (Thursday, April 13, 2000)]
[Senate]
[Pages S2734-S2736]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Ms. Mikulski, Ms. Collins, and Mr. 
        Cleland):
  S. 2420. A bill to amend title 5, United States Code, to provide for 
the establishment of a program under which long-term care insurance is 
made available to Federal employees, members of the uniformed services, 
and civilian and military retirees, and for other purposes; to the 
Committee on Governmental Affairs.


                      long-term care security act

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2420

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Long-Term Care Security 
     Act''.

     SEC. 2. LONG-TERM CARE INSURANCE.

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

                 ``CHAPTER 90--LONG-TERM CARE INSURANCE

``Sec.
``9001. Definitions.
``9002. Availability of insurance.
``9003. Contracting authority.
``9004. Financing.
``9005. Preemption.
``9006. Studies, reports, and audits.
``9007. Jurisdiction of courts.
``9008. Administrative functions.
``9009. Cost accounting standards.

     ``Sec. 9001. Definitions

       For purposes of this chapter:
       ``(1) Employee.--The term `employee' means--
       ``(A) an employee as defined by section 8901(1); and
       ``(B) an individual described in section 2105(e);
     but does not include an individual employed by the government 
     of the District of Columbia.
       ``(2) Annuitant.--The term `annuitant' has the meaning such 
     term would have under paragraph (3) of section 8901 if, for 
     purposes of such paragraph, the term `employee' were 
     considered to have the meaning given to it under paragraph 
     (1) of this subsection.
       ``(3) Member of the uniformed services.--The term `member 
     of the uniformed services' means a member of the uniformed 
     services, other than a retired member of the uniformed 
     services.
       ``(4) Retired member of the uniformed services.--The term 
     `retired member of the uniformed services' means a member or 
     former member of the uniformed services entitled to retired 
     or retainer pay.
       ``(5) Qualified relative.--The term `qualified relative' 
     means each of the following:
       ``(A) The spouse of an individual described in paragraph 
     (1), (2), (3), or (4).
       ``(B) A parent, stepparent, or parent-in-law of an 
     individual described in paragraph (1) or (3).
       ``(C) A child (including an adopted child, a stepchild, or, 
     to the extent the Office of Personnel Management by 
     regulation provides, a foster child) of an individual 
     described in paragraph (1), (2), (3), or (4), if such child 
     is at least 18 years of age.
       ``(D) An individual having such other relationship to an 
     individual described in paragraph (1), (2), (3), or (4) as 
     the Office may by regulation prescribe.
       ``(6) Eligible individual.--The term `eligible individual' 
     refers to an individual described in paragraph (1), (2), (3), 
     (4), or (5).
       ``(7) Qualified carrier.--The term `qualified carrier' 
     means an insurance company (or consortium of insurance 
     companies) that is licensed to issue long-term care insurance 
     in all States, taking any subsidiaries of such a company into 
     account (and, in the case of a consortium, considering the 
     member companies and any subsidiaries thereof, collectively).
       ``(8) State.--The term `State' includes the District of 
     Columbia.
       ``(9) Qualified long-term care insurance contract.--The 
     term `qualified long-term care insurance contract' has the 
     meaning given such term by section 7702B of the Internal 
     Revenue Code of 1986.
       ``(10) Appropriate secretary.--The term `appropriate 
     Secretary' means--
       ``(A) except as otherwise provided in this paragraph, the 
     Secretary of Defense;
       ``(B) with respect to the Coast Guard when it is not 
     operating as a service of the Navy, the Secretary of 
     Transportation;
       ``(C) with respect to the commissioned corps of the 
     National Oceanic and Atmospheric Administration, the 
     Secretary of Commerce; and
       ``(D) with respect to the commissioned corps of the Public 
     Health Service, the Secretary of Health and Human Services.

     ``Sec. 9002. Availability of insurance

       ``(a) In General.--The Office of Personnel Management shall 
     establish and, in consultation with the appropriate 
     Secretaries, administer a program through which an individual 
     described in paragraph (1), (2), (3), (4), or (5) of section 
     9001 may obtain long-term care insurance coverage under this 
     chapter for such individual.
       ``(b) General Requirements.--Long-term care insurance may 
     not be offered under this chapter unless--
       ``(1) the only coverage provided is under qualified long-
     term care insurance contracts; and
       ``(2) each insurance contract under which any such coverage 
     is provided is issued by a qualified carrier.
       ``(c) Documentation Requirement.--As a condition for 
     obtaining long-term care insurance coverage under this 
     chapter based on one's status as a qualified relative, an 
     applicant shall provide documentation to demonstrate the 
     relationship, as prescribed by the Office.
       ``(d) Underwriting Standards.--
       ``(1) Disqualifying condition.--Nothing in this chapter 
     shall be considered to require that long-term care insurance 
     coverage be made available in the case of any individual who 
     would be eligible for benefits immediately.
       ``(2) Spousal parity.--For the purpose of underwriting 
     standards, a spouse of an individual described in paragraph 
     (1), (2), (3), or (4) of section 9001 shall, as nearly as 
     practicable, be treated like that individual.
       ``(3) Guaranteed issue.--Nothing in this chapter shall be 
     considered to require that long-term care insurance coverage 
     be guaranteed to an eligible individual.
       ``(4) Requirement that contract be fully insured.--In 
     addition to the requirements otherwise applicable under 
     section 9001(9), in order to be considered a qualified long-
     term care insurance contract for purposes of this chapter, a 
     contract must be fully insured, whether through reinsurance 
     with other companies or otherwise.
       ``(5) Higher standards allowable.--Nothing in this chapter 
     shall, in the case of an individual applying for long-term 
     care insurance coverage under this chapter after the 
     expiration of such individual's first opportunity to enroll, 
     preclude the application of underwriting standards more 
     stringent than those that would have applied if that 
     opportunity had not yet expired.
       ``(e) Guaranteed Renewability.--The benefits and coverage 
     made available to eligible individuals under any insurance 
     contract under this chapter shall be guaranteed renewable (as 
     defined by section 7A(2) of the model regulations described 
     in section 7702B(g)(2) of the Internal Revenue Code of 1986), 
     including the right to have insurance remain in effect so 
     long as premiums continue to be timely made. However, the 
     authority to revise premiums under this chapter shall be 
     available only on a class basis and only to the extent 
     otherwise allowable under section 9003(b).

     ``Sec. 9003. Contracting authority

       ``(a) In General.--The Office of Personnel Management 
     shall, without regard to section 5 of title 41 or any other 
     statute requiring competitive bidding, contract with 1 or 
     more qualified carriers for a policy or policies of long-term 
     care insurance. The Office shall ensure that each resulting 
     contract (hereinafter in this chapter referred to as a 
     `master

[[Page S2735]]

     contract') is awarded on the basis of contractor 
     qualifications, price, and reasonable competition.
       ``(b) Terms and Conditions.--
       ``(1) In general.--Each master contract under this chapter 
     shall contain--
       ``(A) a detailed statement of the benefits offered 
     (including any maximums, limitations, exclusions, and other 
     definitions of benefits);
       ``(B) the premiums charged (including any limitations or 
     other conditions on their subsequent adjustment);
       ``(C) the terms of the enrollment period; and
       ``(D) such other terms and conditions as may be mutually 
     agreed to by the Office and the carrier involved, consistent 
     with the requirements of this chapter.
       ``(2) Premiums.--Premiums charged under each master 
     contract entered into under this section shall reasonably and 
     equitably reflect the cost of the benefits provided, as 
     determined by the Office. The premiums shall not be adjusted 
     during the term of the contract unless mutually agreed to by 
     the Office and the carrier.
       ``(3) Nonrenewability.--Master contracts under this chapter 
     may not be made automatically renewable.
       ``(c) Payment of Required Benefits; Dispute Resolution.--
       ``(1) In general.--Each master contract under this chapter 
     shall require the carrier to agree--
       ``(A) to provide payments or benefits to an eligible 
     individual if such individual is entitled thereto under the 
     terms of the contract; and
       ``(B) with respect to disputes regarding claims for 
     payments or benefits under the terms of the contract--
       ``(i) to establish internal procedures designed to 
     expeditiously resolve such disputes; and
       ``(ii) to establish, for disputes not resolved through 
     procedures under clause (i), procedures for 1 or more 
     alternative means of dispute resolution involving independent 
     third-party review under appropriate circumstances by 
     entities mutually acceptable to the Office and the carrier.
       ``(2) Eligibility.--A carrier's determination as to whether 
     or not a particular individual is eligible to obtain long-
     term care insurance coverage under this chapter shall be 
     subject to review only to the extent and in the manner 
     provided in the applicable master contract.
       ``(3) Other claims.--For purposes of applying the Contract 
     Disputes Act of 1978 to disputes arising under this chapter 
     between a carrier and the Office--
       ``(A) the agency board having jurisdiction to decide an 
     appeal relative to such a dispute shall be such board of 
     contract appeals as the Director of the Office of Personnel 
     Management shall specify in writing (after appropriate 
     arrangements, as described in section 8(c) of such Act); and
       ``(B) the district courts of the United States shall have 
     original jurisdiction, concurrent with the United States 
     Court of Federal Claims, of any action described in section 
     10(a)(1) of such Act relative to such a dispute.
       ``(4) Rule of construction.--Nothing in this chapter shall 
     be considered to grant authority for the Office or a third-
     party reviewer to change the terms of any contract under this 
     chapter.
       ``(d) Duration.--
       ``(1) In general.--Each master contract under this chapter 
     shall be for a term of 7 years, unless terminated earlier by 
     the Office in accordance with the terms of such contract. 
     However, the rights and responsibilities of the enrolled 
     individual, the insurer, and the Office (or duly designated 
     third-party administrator) under such contract shall continue 
     with respect to such individual until the termination of 
     coverage of the enrolled individual or the effective date of 
     a successor contract thereto.
       ``(2) Exception.--
       ``(A) Shorter duration.--In the case of a master contract 
     entered into before the end of the period described in 
     subparagraph (B), paragraph (1) shall be applied by 
     substituting `ending on the last day of the 7-year period 
     described in paragraph (2)(B)' for `of 7 years'.
       ``(B) Definition.--The period described in this 
     subparagraph is the 7-year period beginning on the earliest 
     date as of which any long-term care insurance coverage under 
     this chapter becomes effective.
       ``(3) Congressional notification.--No later than 180 days 
     after receiving the second report required under section 
     9006(c), the President (or his designee) shall submit to the 
     Committees on Government Reform and on Armed Services of the 
     House of Representatives and the Committees on Governmental 
     Affairs and on Armed Services of the Senate, a written 
     recommendation as to whether the program under this chapter 
     should be continued without modification, terminated, or 
     restructured. During the 180-day period following the date on 
     which the President (or his designee) submits the 
     recommendation required under the preceding sentence, the 
     Office of Personnel Management may not take any steps to 
     rebid or otherwise contract for any coverage to be available 
     at any time following the expiration of the 7-year period 
     described in paragraph (2)(B).
       ``(4) Full portability.--Each master contract under this 
     chapter shall include such provisions as may be necessary to 
     ensure that, once an individual becomes duly enrolled, long-
     term care insurance coverage obtained by such individual 
     pursuant to that enrollment shall not be terminated due to 
     any change in status (such as separation from Government 
     service or the uniformed services) or ceasing to meet the 
     requirements for being considered a qualified relative 
     (whether as a result of dissolution of marriage or 
     otherwise).

     ``Sec. 9004. Financing

       ``(a) In General.--Each eligible individual obtaining long-
     term care insurance coverage under this chapter shall be 
     responsible for 100 percent of the premiums for such 
     coverage.
       ``(b) Withholdings.--
       ``(1) In general.--The amount necessary to pay the premiums 
     for enrollment may--
       ``(A) in the case of an employee, be withheld from the pay 
     of such employee;
       ``(B) in the case of an annuitant, be withheld from the 
     annuity of such annuitant;
       ``(C) in the case of a member of the uniformed services 
     described in section 9001(3), be withheld from the basic pay 
     of such member; and
       ``(D) in the case of a retired member of the uniformed 
     services described in section 9001(4), be withheld from the 
     retired pay or retainer pay payable to such member.
       ``(2) Voluntary withholdings for qualified relatives.--
     Withholdings to pay the premiums for enrollment of a 
     qualified relative may, upon election of the appropriate 
     eligible individual (described in section 9001(1)-(4)), be 
     withheld under paragraph (1) to the same extent and in the 
     same manner as if enrollment were for such individual.
       ``(c) Direct Payments.--All amounts withheld under this 
     section shall be paid directly to the carrier.
       ``(d) Other Forms of Payment.--Any enrollee who does not 
     elect to have premiums withheld under subsection (b) or whose 
     pay, annuity, or retired or retainer pay (as referred to in 
     subsection (b)(1)) is insufficient to cover the withholding 
     required for enrollment (or who is not receiving any regular 
     amounts from the Government, as referred to in subsection 
     (b)(1), from which any such withholdings may be made, and 
     whose premiums are not otherwise being provided for under 
     subsection (b)(2)) shall pay an amount equal to the full 
     amount of those charges directly to the carrier.
       ``(e) Separate Accounting Requirement.--Each carrier 
     participating under this chapter shall maintain records that 
     permit it to account for all amounts received under this 
     chapter (including investment earnings on those amounts) 
     separate and apart from all other funds.
       ``(f) Reimbursements.--
       ``(1) Reasonable initial costs.--
       ``(A) In general.--The Employees' Life Insurance Fund is 
     available, without fiscal year limitation, for reasonable 
     expenses incurred by the Office of Personnel Management in 
     administering this chapter before the start of the 7-year 
     period described in section 9003(d)(2)(B), including 
     reasonable implementation costs.
       ``(B) Reimbursement requirement.--Such Fund shall be 
     reimbursed, before the end of the first year of that 7-year 
     period, for all amounts obligated or expended under 
     subparagraph (A) (including lost investment income). Such 
     reimbursement shall be made by carriers, on a pro rata basis, 
     in accordance with appropriate provisions which shall be 
     included in master contracts under this chapter.
       ``(2) Subsequent costs.--
       ``(A) In general.--There is hereby established in the 
     Employees' Life Insurance Fund a Long-Term Care 
     Administrative Account, which shall be available to the 
     Office, without fiscal year limitation, to defray reasonable 
     expenses incurred by the Office in administering this chapter 
     after the start of the 7-year period described in section 
     9003(d)(2)(B).
       ``(B) Reimbursement requirement.--Each master contract 
     under this chapter shall include appropriate provisions under 
     which the carrier involved shall, during each year, make such 
     periodic contributions to the Long-Term Care Administrative 
     Account as necessary to ensure that the reasonable 
     anticipated expenses of the Office in administering this 
     chapter during such year (adjusted to reconcile for any 
     earlier overestimates or underestimates under this 
     subparagraph) are defrayed.

     ``Sec. 9005. Preemption

       ``The terms of any contract under this chapter which relate 
     to the nature, provision, or extent of coverage or benefits 
     (including payments with respect to benefits) shall supersede 
     and preempt any State or local law, or any regulation issued 
     thereunder, which relates to long-term care insurance or 
     contracts.

     ``Sec. 9006. Studies, reports, and audits

       ``(a) Provisions Relating to Carriers.--Each master 
     contract under this chapter shall contain provisions 
     requiring the carrier--
       ``(1) to furnish such reasonable reports as the Office of 
     Personnel Management determines to be necessary to enable it 
     to carry out its functions under this chapter; and
       ``(2) to permit the Office and representatives of the 
     General Accounting Office to examine such records of the 
     carrier as may be necessary to carry out the purposes of this 
     chapter.
       ``(b) Provisions Relating to Federal Agencies.--Each 
     Federal agency shall keep such records, make such 
     certifications, and furnish the Office, the carrier, or both, 
     with

[[Page S2736]]

     such information and reports as the Office may require.
       ``(c) Reports by the General Accounting Office.--The 
     General Accounting Office shall prepare and submit to the 
     President, the Office of Personnel Management, and each House 
     of Congress, before the end of the third and fifth years 
     during which the program under this chapter is in effect, a 
     written report evaluating such program. Each such report 
     shall include an analysis of the competitiveness of the 
     program, as compared to both group and individual coverage 
     generally available to individuals in the private insurance 
     market. The Office shall cooperate with the General 
     Accounting Office to provide periodic evaluations of the 
     program.

     ``Sec. 9007. Jurisdiction of courts

       ``The district courts of the United States have original 
     jurisdiction of a civil action or claim described in 
     paragraph (1) or (2) of section 9003(c), after such 
     administrative remedies as required under such paragraph (1) 
     or (2) (as applicable) have been exhausted, but only to the 
     extent judicial review is not precluded by any dispute 
     resolution or other remedy under this chapter.

     ``Sec. 9008. Administrative functions

       ``(a) In General.--The Office of Personnel Management shall 
     prescribe regulations necessary to carry out this chapter.
       ``(b) Enrollment Periods.--The Office shall provide for 
     periodic coordinated enrollment, promotion, and education 
     efforts in consultation with the carriers.
       ``(c) Consultation.--Any regulations necessary to effect 
     the application and operation of this chapter with respect to 
     an eligible individual described in paragraph (3) or (4) of 
     section 9001, or a qualified relative thereof, shall be 
     prescribed by the Office in consultation with the appropriate 
     Secretary.
       ``(d) Informed Decisionmaking.--The Office shall ensure 
     that each eligible individual applying for long-term care 
     insurance under this chapter is furnished the information 
     necessary to enable that individual to evaluate the 
     advantages and disadvantages of obtaining long-term care 
     insurance under this chapter, including the following:
       ``(1) The principal long-term care benefits and coverage 
     available under this chapter, and how those benefits and 
     coverage compare to the range of long-term care benefits and 
     coverage otherwise generally available.
       ``(2) Representative examples of the cost of long-term 
     care, and the sufficiency of the benefits available under 
     this chapter relative to those costs. The information under 
     this paragraph shall also include--
       ``(A) the projected effect of inflation on the value of 
     those benefits; and
       ``(B) a comparison of the inflation-adjusted value of those 
     benefits to the projected future costs of long-term care.
       ``(3) Any rights individuals under this chapter may have to 
     cancel coverage, and to receive a total or partial refund of 
     premiums. The information under this paragraph shall also 
     include--
       ``(A) the projected number or percentage of individuals 
     likely to fail to maintain their coverage (determined based 
     on lapse rates experienced under similar group long-term care 
     insurance programs and, when available, this chapter); and
       ``(B)(i) a summary description of how and when premiums for 
     long-term care insurance under this chapter may be raised;
       ``(ii) the premium history during the last 10 years for 
     each qualified carrier offering long-term care insurance 
     under this chapter; and
       ``(iii) if cost increases are anticipated, the projected 
     premiums for a typical insured individual at various ages.
       ``(4) The advantages and disadvantages of long-term care 
     insurance generally, relative to other means of accumulating 
     or otherwise acquiring the assets that may be needed to meet 
     the costs of long-term care, such as through tax-qualified 
     retirement programs or other investment vehicles.

     ``Sec. 9009. Cost accounting standards

       ``The cost accounting standards issued pursuant to section 
     26(f) of the Office of Federal Procurement Policy Act (41 
     U.S.C. 422(f)) shall not apply with respect to a long-term 
     care insurance contract under this chapter.''.
       (b) Conforming Amendment.--The analysis for part III of 
     title 5, United States Code, is amended by adding at the end 
     of subpart G the following:

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

      SEC. 3. EFFECTIVE DATE.

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