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What is the CLASS Act (Community Living Assistance Services and Support Act)

The Community Living Assistance Services and Support Act (aka CLASS Act) is a voluntary, pre-funded, long-term care program that will be administered by the federal government.

It was included as part of the  healthcare reform bill (PPACA-Patient Protection and Affordable Care Act) that was signed into law in March, 2010.

The CLASS Act has some similarities to traditional long-term care insurance and some differences.

Here are a few facts about the CLASS Act program:

  1. It is a voluntary program.
  2. If a participant in the program needs assistance with 2 or more Activities of Daily Living (or is severely cognitively impaired), the CLASS Act benefit will pay an average of $50 per day that can be used to pay for personal care services at home or in a facility.
  3. In order to enroll in the CLASS Act you must be working.
  4. Employers who choose to participate will automatically enroll their employees into the program and deduct the premiums from their paychecks.  (Each employee can choose to opt-out.)
  5. In order to become vested in the CLASS Act program, you must work for at least 3 of the first 5 years that you pay premiums into the program.
  6. You cannot make a claim for any benefits from the CLASS Act program until you have paid premiums for at least 5 years.
  7. The legislation requires the program to be “actuarially sound” for a 75-year period.
  8. No taxpayer funds will be allowed to fund the program.  All benefits must be paid solely from the premiums of those who participate in the program.
  9. Although funding for the CLASS Act program begins in January, 2011, the Secretary of Health and Human Services has until October, 2012 to finalize the exact benefits and premiums for the program.  Employers will start enrolling their employees in 2013.
  10. There are no health restrictions.  Anyone who is working can enroll in the CLASS Act regardless of their health history.
  11. The average premium for a 50-year old is projected to be about $125 per month.  The premiums are based upon age.  The younger you are when you enroll, the lower your premium.
  12. The premiums are designed to be level, but the Secretary of HHS is required to raise premiums and/or lower benefits, at anytime, in order to maintain the solvency of the program.
  13. Those who earn less than the Federal Poverty Level will pay only $5 per month in premiums.
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About Scott A. Olson

Scott A. Olson, is the author of “The Guidebook for Making Long-Term Care Insurance Easier.” He is a licensed insurance agent and has specialized in long-term care insurance since 1995. He is licensed to sell long-term care insurance in over 40 states. Scott was born and raised in New Jersey and attended Rutgers University. Scott was a caregiver for a close relative for two years. That personal experience has made him acutely aware of how to help his clients design and choose a long-term care policy that will benefit them when they need it the most. Scott and his wife Carolyn live in Redlands, California. Scott and Carolyn have four sons.

2 comments on “What is the CLASS Act (Community Living Assistance Services and Support Act)

  1. [...] for 13 simple facts on the program please see the LTCshop.com at 13 Simple Facts on the CLASS Act Filed Under: Healthcare, [...]

  2. According to this article, a person has to be young enough to work 3 ot the first 5 years before filing a claim for long-term care insurance to become vested, but you still have to pay for 5 years before filing a claim. What happens if a person works 3 years and pay in but does not work the other two? It doesn’t accept taxpayers payments into the system so how does one get the full 5 years paid in if they don’t work the full 5 years? Do they get a refund of the premiums paid for the 3 years that they paid in?
    If an older adult is already past the working years, they can’t get any coverage or help from this plan. This is apparently only for the young to prepare for their eventual need for LTC. Why can’t the children of an older adult buy into a plan and work the 5 years, pay premiums into the plan for the benefit of their parent who may be in their 70’s but still active and not in need of LTC. When they get into their 80’s or 90’s, they may need the LTC insurance and if a child has already paid in for the 5+ years, even 10+ years, why can’t they designate a beneficiary that can use the LTC? Regular life insurance can be done this way. My child can get a policy on my life now so why can’t they buy insurance to help me pay for the LTC?
    This CLASS Act seems to be favoring the people under the poverty level since the price is just $5.00 a month. The people that are under the poverty level are the ones that can’t, don’t or won’t work and of course, seniors. And they can’t afford the premiums anyway on social security.

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