The new CLASS Act

The Community Living Assistance Services and Supports Act (CLASS Act) is contained in the recently passed federal health care reform law. It establishes a voluntary, government-administered, long-term care service program, whereby individuals who enroll in the program and pay monthly premiums are eligible to receive modest cash payments for their long-term care needs. This program is not intended to pay for the full cost of skilled nursing home care, and the average benefit paid would be approximately $75 per day, to be adjusted upward for inflation. There is no lifetime cap on benefits.

A recipient may use the funds to purchase care services or nonmedical services the recipient needs to maintain independence at home or in the community. The statute is silent with regard to coordination with long-term care insurance, although one would hope that the monthly benefit could be used to supplement a deficit in the beneficiary's long-term care insurance or self-funding for long-term care. The statute specifically states that the monthly benefit is to be disregarded for purposes of determining or continuing a beneficiary's eligibility for federal public benefit programs such as Medicaid.

In order to receive payments under the CLASS Act, one must have paid into the system for five years. In addition, the person enrolled must have been employed for three calendar years of the first 60 months of paying premiums. It is anticipated that the monthly premiums will average $123. Only persons who are "actively employed" can enroll in the program. Because no health history can disqualify someone from enrollment, it is believed that the "actively employed" requirement assures that participants who enroll are not already disabled by major health problems.

The Act forbids funding from taxpayer dollars and must be totally self-supporting. To encourage the enrollment of healthy people and increase the pool of participants, the CLASS program requires employees to enroll unless they take action to "opt out." Employees will have funds withheld from their payroll checks similar to deductions for retirement plans. Self-employed persons can also participate.

To be eligible to receive monthly benefits, a licensed health care professional must certify that the enrollee:

1. Cannot perform at least two or three of the activities of daily living, or

2. Requires substantial supervision to protect from threats to health or safety due to substantial cognitive impairment, or

3. Has a level of functional limitations similar to the first two criteria.

The effective date of the CLASS Act is Jan. 1, 2011, but it is unlikely that the program will start to enroll participants until 2012 or 2013.

James Bendell practices law at the Grupp Law Firm in Coeur d'Alene, and is a member of the National Academy of Elder Law Attorneys.