Exec Summary - CLASS Act

Health Reform CLASS ACT (Community Living Assistance Services and Supports Act)


Who:         Anyone over age 18 who is working. Enrollment is automatic.  Individuals will be assumed to be enrolled unless they explicitly opt out. 


When:       The CLASS program was effective on January 1, 2011. The HHS Secretary is expected to define the CLASS benefit and premium by October 2012 with enrollment to begin soon thereafter.


Executive Summary:  The CLASS ACT establishes a national insurance program for purchasing long term care community living assistance services.


Benefits:    Individuals who pay into the program for at least five years (and work during at least three of those five years) and meet eligibility criteria will receive a daily cash benefit if they have functional limitations that are expected to last at least 90 days.


Benefits will be for individuals who are unable to perform two or more activities of daily living or ADLs (e.g. eating, toileting, bathing, dressing, transferring), or individuals who have an equivalent cognitive disability that requires supervision or hands-on assistance to perform those activities (e.g. traumatic brain injury, Alzheimer’s disease, multiple sclerosis, mental retardation).


Benefits will vary based on degree of disability or impairment averaging no less than $50 per day. The HHS Secretary will set the benefit amount based on the degree of impairment, which is expected to average roughly $75 per day or more than $27,000 per year. There are no lifetime limits, and benefits can continue for as long as a person remains qualified.


Premiums:  The premiums have yet to be determined by HHS.  Outside estimates have ranged from $120-240 per month. Younger participants will pay less than older participants. Those with incomes below the federal poverty level and full-time students who are actively employed will pay nominal premiums, starting at $5 per month.

Potential for Repeal:    The long term cost of the CLASS ACT has raised grave concerns. In December 2010, the bipartisan National Commission on Fiscal Responsibility and Reform raised doubts about whether CLASS could be fixed in ways that were financially responsible and politically palatable. The commission recommended that if CLASS couldn't be reformed, it should be repealed.

Action Required:  Employers will need to establish a process to collect and submit premiums of participating employees.   Most employers will want to discuss the legislation and the potential repeal with their agents or consultant.   


The information presented and contained within this article was submitted by Ronald E. Bachman, President & CEO of Healthcare Visions. This information is general information only, and does not, and is not intended to constitute legal advice. You should consult your legal advisors to determine the laws and regulations impacting your business.
Ron Bachman,
Jun 17, 2011, 11:45 AM