The CLASS Act National voluntary payroll deduct insurance

The CLASS Act National, voluntary, payroll deduct insurance program – The CLASS Independence Benefit Plan CLASS: Community Living Assistance Services and Support Eligible enrollees include any actively employed individual at least 18 years old. Qualified beneficiaries will receive cash benefit of not less than $50 per day.

The CLASS Act Timeline 2011 • HHS develops enrollment procedures, benefit eligibility assessment, disenrollment and payroll deduct procedures • President appoints 15 member CLASS Advisory Council (likely beneficiaries, caregivers, actuaries, economists, etc. ) • Development of 3 alternative benefit plans 2012 • Jan. 1 – enrollment begins • Oct. 1 – Secretary designates CLASS benefit plan 2018 • Earliest payout of benefits

CLASS Act details Enrollment • Employers are not currently required to participate • Employees are auto enrolled by employers, with voluntary opt-out • HHS to develop alternative enrollment procedures for: self-employed have multiple employers have non-participating employer

CLASS Act details Premiums • Established yearly based on act. analysis of 75 -year cost period • Initial premiums estimated to be $124 -$240 per month • $5 nominal premium established for enrollees <100% pov and fulltime actively employed students <22 years of age Benefit Triggers • Patterned after HIPAA LTCI triggers: Functional limitation expected to last more than 90 days Inability to perform 2 or 3 ADLs OR Cognitive impairment

CLASS Act details Cash Benefits • $50 per day indemnity benefit / no lifetime limit benefit not contingent on pay-in • Not payable until premiums paid in for 5 years • May be paid daily or weekly • Payments deposited into Life Independence Account rollover option for lump sum payments to be deferred on a month to month basis, but not from year to year Underwriting • No underwriting allowed

CLASS Act details Recalculation of Premiums • 10 years from program inception to gauge solvency, based on 20 -year look forward • Premium increase does NOT apply to: poor students >65, not actively at work, have paid premiums for at least 20 years • Premium increase WILL apply to: student status change re-enrollment after 90 -day premium lapse

CLASS Act Supplements? Viable? • High cost of participating in CLASS program poses significant barrier to creating marketable supplemental coverage • Impossible to supplement / coordinate with fixed indemnity coverage • Benefit triggers for private LTCI and CLASS coverage are different – improbable that triggers will be met under both, simultaneously. • Proof of claim requirements are significantly different