S 2337 ISCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to allow long-term care insurance to be offered under cafeteria plans and flexible spending arrangements and to provide additional consumer protections for long-term care insurance.CommentsClose CommentsPermalink

November 13, 2007

Mr. GRASSLEY (for himself, Mrs. LINCOLN, Ms. SNOWE, Ms. STABENOW, and Mr. SMITH) introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to allow long-term care insurance to be offered under cafeteria plans and flexible spending arrangements and to provide additional consumer protections for long-term care insurance.CommentsClose CommentsPermalink

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

SECTION 1. SHORT TITLE.

This Act may be cited as the `Long-Term Care Affordability and Security Act of 2007'.CommentsClose CommentsPermalink

SEC. 2. TREATMENT OF PREMIUMS ON QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.

(a) In General-CommentsClose CommentsPermalink





(1) CAFETERIA PLANS- The last sentence of section 125(f) of the Internal Revenue Code of 1986 (defining qualified benefits) is amended by inserting before the period at the end `; except that such term shall include the payment of premiums for any qualified long-term care insurance contract (as defined in section 7702B) to the extent the amount of such payment does not exceed the eligible long-term care premiums (as defined in section 213(d)(10)) for such contract'.CommentsClose CommentsPermalink





(2) FLEXIBLE SPENDING ARRANGEMENTS- Section 106 of such Code (relating to contributions by an employer to accident and health plans) is amended by striking subsection (c) and redesignating subsection (d) as subsection (c).CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 6041 of such Code is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(h) Flexible Spending Arrangement Defined- For purposes of this section, a flexible spending arrangement is a benefit program which provides employees with coverage under which--CommentsClose CommentsPermalink





`(1) specified incurred expenses may be reimbursed (subject to reimbursement maximums and other reasonable conditions), andCommentsClose CommentsPermalink





`(2) the maximum amount of reimbursement which is reasonably available to a participant for such coverage is less than 500 percent of the value of such coverage.CommentsClose CommentsPermalink





In the case of an insured plan, the maximum amount reasonably available shall be determined on the basis of the underlying coverage.'.CommentsClose CommentsPermalink





(2) The following sections of such Code are each amended by striking `section 106(d)' and inserting `section 106(c)': sections 223(b)(4)(B), 223(d)(4)(C), 223(f)(3)(B), 3231(e)(11), 3306(b)(18), 3401(a)(22), 4973(g)(1), and 4973(g)(2)(B)(i).CommentsClose CommentsPermalink





(3) Section 6041(f)(1) of such Code is amended by striking `(as defined in section 106(c)(2))'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2006.CommentsClose CommentsPermalink

SEC. 3. ADDITIONAL CONSUMER PROTECTIONS FOR LONG-TERM CARE INSURANCE.

(a) Additional Protections Applicable to Long-Term Care Insurance- Subparagraphs (A) and (B) of section 7702B(g)(2) of the Internal Revenue Code of 1986 (relating to requirements of model regulation and Act) are amended to read as follows:CommentsClose CommentsPermalink





`(A) IN GENERAL- The requirements of this paragraph are met with respect to any contract if such contract meets--CommentsClose CommentsPermalink





`(i) MODEL REGULATION- The following requirements of the model regulation:CommentsClose CommentsPermalink





`(I) Section 6A (relating to guaranteed renewal or noncancellability), other than paragraph (5) thereof, and the requirements of section 6B of the model Act relating to such section 6A.CommentsClose CommentsPermalink





`(II) Section 6B (relating to prohibitions on limitations and exclusions) other than paragraph (7) thereof.CommentsClose CommentsPermalink





`(III) Section 6C (relating to extension of benefits).CommentsClose CommentsPermalink





`(IV) Section 6D (relating to continuation or conversion of coverage).CommentsClose CommentsPermalink





`(V) Section 6E (relating to discontinuance and replacement of policies).CommentsClose CommentsPermalink





`(VI) Section 7 (relating to unintentional lapse).CommentsClose CommentsPermalink





`(VII) Section 8 (relating to disclosure), other than sections 8F, 8G, 8H, and 8I thereof.CommentsClose CommentsPermalink





`(VIII) Section 11 (relating to prohibitions against post-claims underwriting).CommentsClose CommentsPermalink





`(IX) Section 12 (relating to minimum standards).CommentsClose CommentsPermalink





`(X) Section 13 (relating to requirement to offer inflation protection).CommentsClose CommentsPermalink





`(XI) Section 25 (relating to prohibition against preexisting conditions and probationary periods in replacement policies or certificates).CommentsClose CommentsPermalink





`(XII) The provisions of section 28 relating to contingent nonforfeiture benefits, if the policyholder declines the offer of a nonforfeiture provision described in paragraph (4) of this subsection.CommentsClose CommentsPermalink





`(ii) MODEL ACT- The following requirements of the model Act:CommentsClose CommentsPermalink





`(I) Section 6C (relating to preexisting conditions).CommentsClose CommentsPermalink





`(II) Section 6D (relating to prior hospitalization).CommentsClose CommentsPermalink





`(III) The provisions of section 8 relating to contingent nonforfeiture benefits, if the policyholder declines the offer of a nonforfeiture provision described in paragraph (4) of this subsection.CommentsClose CommentsPermalink





`(B) DEFINITIONS- For purposes of this paragraph--CommentsClose CommentsPermalink





`(i) MODEL REGULATION- The term `model regulation' means the long-term care insurance model regulation promulgated by the National Association of Insurance Commissioners (as adopted as of December 2006).CommentsClose CommentsPermalink





`(ii) MODEL ACT- The term `model Act' means the long-term care insurance model Act promulgated by the National Association of Insurance Commissioners (as adopted as of December 2006).CommentsClose CommentsPermalink





`(iii) COORDINATION- Any provision of the model regulation or model Act listed under clause (i) or (ii) of subparagraph (A) shall be treated as including any other provision of such regulation or Act necessary to implement the provision.CommentsClose CommentsPermalink





`(iv) DETERMINATION- For purposes of this section and section 4980C, the determination of whether any requirement of a model regulation or the model Act has been met shall be made by the Secretary.'.CommentsClose CommentsPermalink





(b) Excise Tax- Paragraph (1) of section 4980C(c) of the Internal Revenue Code of 1986 (relating to requirements of model provisions) is amended to read as follows:CommentsClose CommentsPermalink





`(1) REQUIREMENTS OF MODEL PROVISIONS-CommentsClose CommentsPermalink





`(A) MODEL REGULATION- The following requirements of the model regulation must be met:CommentsClose CommentsPermalink





`(i) Section 9 (relating to required disclosure of rating practices to consumer).CommentsClose CommentsPermalink





`(ii) Section 14 (relating to application forms and replacement coverage).CommentsClose CommentsPermalink





`(iii) Section 15 (relating to reporting requirements).CommentsClose CommentsPermalink





`(iv) Section 22 (relating to filing requirements for marketing).CommentsClose CommentsPermalink





`(v) Section 23 (relating to standards for marketing), including inaccurate completion of medical histories, other than paragraphs (1), (6), and (9) of section 23C.CommentsClose CommentsPermalink





`(vi) Section 24 (relating to suitability).CommentsClose CommentsPermalink





`(vii) Section 27 (relating to the right to reduce coverage and lower premiums).CommentsClose CommentsPermalink





`(viii) Section 31 (relating to standard format outline of coverage).CommentsClose CommentsPermalink





`(ix) Section 32 (relating to requirement to deliver shopper's guide).CommentsClose CommentsPermalink





The requirements referred to in clause (vi) shall not include those portions of the personal worksheet described in Appendix B relating to consumer protection requirements not imposed by section 4980C or 7702B.CommentsClose CommentsPermalink





`(B) MODEL ACT- The following requirements of the model Act must be met:CommentsClose CommentsPermalink





`(i) Section 6F (relating to right to return).CommentsClose CommentsPermalink





`(ii) Section 6G (relating to outline of coverage).CommentsClose CommentsPermalink





`(iii) Section 6H (relating to requirements for certificates under group plans).CommentsClose CommentsPermalink





`(iv) Section 6J (relating to policy summary).CommentsClose CommentsPermalink





`(v) Section 6K (relating to monthly reports on accelerated death benefits).CommentsClose CommentsPermalink





`(vi) Section 7 (relating to incontestability period).CommentsClose CommentsPermalink





`(vii) Section 9 (relating to producer training requirements).CommentsClose CommentsPermalink





`(C) DEFINITIONS- For purposes of this paragraph, the terms `model regulation' and `model Act' have the meanings given such terms by section 7702B(g)(2)(B).'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to policies issued more than 1 year after the date of the enactment of this Act.CommentsClose CommentsPermalink