Community Living Assistance Services and Supports (CLASS) Act
Health Care Reform Brings Optional Long-Term Care Coverage
Health care reform of 2010 established a national voluntary insurance program to make long-term care insurance affordable and available to all Americans. The Community Living Assistance Services and Supports Act, or CLASS Act, takes effect on January 1, 2011.
Long-term care expenses covered by Medicaid continue to be the largest portion of the country’s health care costs. A major goal of the CLASS Act is to save Medicaid funds, as CLASS benefits will offset Medicaid costs.
Funding and Benefits
The CLASS Act is funded by premiums and will pay $50.00 or more per day to enrolled individuals to be used toward nursing home care or to encourage individuals to stay in their own home. The cash benefits can be applied to such things as wheelchair ramps and wages for home health care aides.
The CLASS Act pays cash benefits to enrollees who have paid premiums for at least five years and worked at least three of those years, and who meet a functional or cognitive "trigger." Benefits are triggered if an individual:
- has a functional limitation, as certified by a licensed health care provider that is expected to last more than 90 days;
- is unable to perform a specified number of activities of daily living, such as eating or bathing, without substantial assistance; and
- requires substantial supervision to protect themselves from threats to their own health or safety.
Automatic Enrollment
Employers have the option to automatically enroll employees, and employees will also have an opportunity to opt out.
Is There a Limit to the Total Amount Paid to Those Enrolled?
CLASS benefits continue for as long as the qualified participant needs them. There is no lifetime limit to the dollar amount of benefits paid.
Paychex Insurance Agency Can Help
Paychex Insurance Agency is a full-service organization ready to provide information and guidance about this issue. While we are waiting for additional details and guidance, Paychex will explore options for administering premium deductions and remitting payments to the Department of Health and Human Services.
We will also help you:
- learn more about the CLASS Act and how to become a participating employer; and
- follow the latest regulations to keep you informed about any legislative changes that affect you and your business.
An essential partner to over 550,000 businesses nationwide, Paychex closely monitors legislation that affects our clients. With access to legislative and regulatory specialists in Washington, D.C., and utilizing expert, in-house sources of legal and compliance guidance, Paychex Insurance Agency will continue to provide the latest information on health care reform.
Paychex Insurance Agency is ready with the coverage you need, when you need it. To speak with a licensed insurance representative about the right plans for your business, your employees, and yourself, call 877-393-8868 or have an agent call you.
The Department of Health and Human Services and the Internal Revenue Service (IRS) continue to provide specifics and guidance on the Health Care Reform Act. Paychex will monitor these regulatory developments and provide updates as appropriate.
The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. It is provided for informational purposes only. If you require legal or accounting advice, or need other professional assistance, you should always consult your licensed attorney, accountant, or other federally licensed tax professional to discuss your particular facts, circumstances, and business needs.
Insurance available through Paychex Insurance Agency, Inc. (formerly Paychex Agency, Inc.), 150 Sawgrass Drive, Rochester, NY 14620. CA License #0C28207.
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