Text: H.R.5853 — 111th Congress (2009-2010)All Information (Except Text)

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Introduced in House (07/26/2010)


111th CONGRESS
2d Session
H. R. 5853


To amend title XXXII of the Public Health Service Act to require review and approval by law prior to collection of premiums under the CLASS program, to require notice to individuals prior to enrollment, and to require termination of the program in the event of actuarial unsoundness, and for other purposes.


IN THE HOUSE OF REPRESENTATIVES

July 26, 2010

Mr. Boustany introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned


A BILL

To amend title XXXII of the Public Health Service Act to require review and approval by law prior to collection of premiums under the CLASS program, to require notice to individuals prior to enrollment, and to require termination of the program in the event of actuarial unsoundness, and for other purposes.

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

SECTION 1. Short title.

This Act may be cited as the “Fiscal Responsibility and Retirement Security Act”.

SEC. 2. Review and approval by law of designation of CLASS Independence Benefit Plan.

Title XXXII of the Public Health Service Act, as added by section 8002(a) of the Patient Protection and Affordable Care Act (Public Law 111–148), is amended—

(1) in section 3203(a)—

(A) in paragraph (3), in the second sentence, by inserting “and shall submit to Congress a report containing such designation, details, and reasons” after “public comment”; and

(B) by adding at the end the following new paragraph:

“(4) APPROVAL BY LAW OF DESIGNATION.—No premiums may be deducted from an individual’s wages or otherwise collected under section 3204(e) unless there is enacted into law, in accordance with section 3211(a), a joint resolution approving the designation of the CLASS Independence Benefit Plan by the Secretary under paragraph (3).”; and

(2) by adding at the end the following new section:

“SEC. 3211. Procedural requirements for approval by law of designation of CLASS Independence Benefit Plan.

“(a) In general.—For purposes of paragraph (4) of section 3203(a), the following shall apply:

“(1) RECEIPT OF REPORTS.—It shall not be in order in the Senate or in the House of Representatives to consider a joint resolution described in such paragraph unless the Senate or the House of Representatives, respectively, has received, not fewer than 60 days prior to such consideration—

“(A) the report of the Secretary described in section 3203(a)(3); and

“(B) the report of the Chief Actuary of the Centers for Medicare & Medicaid Services described in paragraph (2).

“(2) REPORT OF CMS CHIEF ACTUARY.—Not later than 60 days after the Secretary designates the CLASS Independence Benefit Plan under section 3203(a)(3), the Chief Actuary of the Centers for Medicare & Medicaid Services shall submit to Congress a report on the long-term actuarial soundness of the CLASS Independence Benefit Plan. Such report shall include—

“(A) an estimate of the average premium per enrollee per year that will be required to ensure that the CLASS Independence Fund will be actuarially sound over the 75-year period beginning with the fiscal year in which such report is submitted; and

“(B) an estimate of the average amount of benefits that will be paid per enrollee per year over such period.

“(3) JOINT RESOLUTION DEFINED.—The term ‘joint resolution’ means only a joint resolution, the matter after the resolving clause of which is as follows: ‘That Congress approves of the CLASS Independence Benefit Plan designated by the Secretary of Health and Human Services under section 3203(a)(3) of the Public Health Service Act.’. Such term does not include a resolution that specifies more than one action.

“(b) Exercise of the rulemaking power of each House.—Subsection (a) is enacted by Congress—

“(1) as an exercise of the rulemaking power of the Senate and the House of Representatives, respectively, and is deemed to be part of the rules of each House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of a joint resolution under such subsection, and it supersedes other rules only to the extent that it is inconsistent with such rules; and

“(2) with full recognition of the constitutional right of either House to change the rules (so far as they relate to the procedure of that House) at any time, in the same manner, and to the same extent as in the case of any other rule of that House.”.

SEC. 3. Required notice prior to enrollment.

Section 3204(a) of the Public Health Service Act, as added by section 8002(a) of the Patient Protection and Affordable Care Act (Public Law 111–148), is amended by adding at the end the following new paragraph:

“(4) REQUIRED NOTICE PRIOR TO ENROLLMENT.—

“(A) IN GENERAL.—An employer may not enroll an employee in the CLASS program under paragraph (1) unless, prior to enrolling the employee, the employer—

“(i) has provided to the employee the exact statements described in subparagraph (C) in a single written notice that displays such statements in the order in which they are set forth in such subparagraph; and

“(ii) certifies to the Secretary that the individual has received such notice.

“(B) ENROLLMENT OTHER THAN BY EMPLOYER.—In the case of an individual seeking to enroll in the CLASS program other than through enrollment by the individual’s employer under paragraph (1), the Secretary shall not permit the individual to enroll unless, prior to the individual’s enrollment, the Secretary has provided to the individual the exact statements described in subparagraph (C) in a single written notice that displays such statements in the order in which they are set forth in such subparagraph and the individual has acknowledged in writing the receipt of such notice.

“(C) STATEMENTS DESCRIBED.—The statements described in this subparagraph are the following:

“(i) The Chief Actuary of the Centers for Medicare & Medicaid Services made the following assessment in April 2010 regarding the CLASS program: ‘In general, voluntary, unsubsidized, and non-underwritten insurance programs such as CLASS face a significant risk of failure as a result of adverse selection by participants. Individuals with health problems or who anticipate a greater risk of functional limitation would be more likely to participate than those in better-than-average health. . . . [T]here is a very serious risk that the problem of adverse selection will make the CLASS program unsustainable.’.

“(ii) The Chief Actuary estimated in April 2010 that the CLASS program will likely begin to run deficits in 2025 and continue to run deficits thereafter.

“(iii) The Chief Actuary further estimated in April 2010 that an initial average premium level of about $240 per month would be required to adequately fund CLASS program costs.

“(iv) The Federal Government will collect more than $70 billion in CLASS program premiums from 2012 through 2019, according to an estimate of the Congressional Budget Office in March 2010. Although these premiums are credited as IOUs or United States Government securities in a ‘CLASS Independence Fund,’ the money, itself, is used to pay for other Government expenses, including other programs under the health care law enacted in March 2010 that are unrelated to the CLASS program. There is no separate pool of money set aside to pay CLASS program benefits, and workers and retirees could be required to repay these IOUs in the form of higher taxes.

“(v) Under section 3212 of the Public Health Service Act, the CLASS program will terminate immediately if an annual report of the Board of Trustees of the Class Independence Fund indicates that the CLASS program will not be actuarially sound over the 75-year period beginning with the fiscal year in which the report is submitted.”.

SEC. 4. No collection of premiums pending promulgation of final regulations.

Section 3208(c) of the Public Health Service Act, as added by section 8002(a) of the Patient Protection and Affordable Care Act (Public Law 111–148), is amended—

(1) by striking “The Secretary” and inserting the following:

“(1) IN GENERAL.—The Secretary”; and

(2) by adding at the end the following new paragraph:

“(2) NO COLLECTION OF PREMIUMS PENDING PROMULGATION OF FINAL REGULATIONS.—No premiums may be deducted from an individual’s wages or otherwise collected under section 3204(e) before the Secretary has promulgated, in final form—

“(A) the regulations described in section 3202(6)(C);

“(B) the rule described in section 3203(a)(3); and

“(C) the regulations described in paragraph (1).”.

SEC. 5. Termination of program if CLASS Independence Fund actuarially unsound.

Title XXXII of the Public Health Service Act, as amended by section 2, is further amended by adding at the end the following new section:

“SEC. 3212. Termination of program if CLASS Independence Fund actuarially unsound.

“(a) In general.—If the Board of Trustees of the CLASS Independence Fund submits to Congress the report described in subsection (b) (relating to the actuarial unsoundness of the CLASS Independence Fund)—

“(1) no individual shall be enrolled under section 3204(a) in the CLASS program after the date of the submission of the report;

“(2) no premiums shall be deducted from an individual’s wages or otherwise collected under section 3204(e) after such date;

“(3) no benefits shall be provided under section 3205(c) after such date;

“(4) the Secretary shall refund any amount remaining in the CLASS Independence Fund (established under section 3206(a)) on such date, according to the process described in subsection (c), and send notification to the Secretary of the Treasury when the refund is complete;

“(5) in the case of notification under paragraph (4), the CLASS Independence Fund and the Board of Trustees of the CLASS Independence Fund (established under section 3206(c)(1)) shall be abolished as of the date of such notification;

“(6) the CLASS Independence Advisory Council (established under section 3207(a)) is abolished as of the date of the submission of the report;

“(7) the Secretary shall take such other steps as the Secretary considers necessary to terminate the CLASS program;

“(8) in lieu of the annual report required by section 3208(d), the Secretary shall submit to Congress a quarterly report on the status of the termination of the CLASS program in accordance with this section, until such time as the Secretary indicates in such a report that the program has been completely terminated; and

“(9) in lieu of the annual report required by section 3209, the Inspector General of the Department of Health and Human Services shall submit to Congress a quarterly report on the Secretary’s progress in terminating the CLASS program in accordance with this section, including the existence of any waste, fraud, or abuse in connection with the termination activities, until such time as the Inspector General indicates in such a report that the program has been completely terminated.

“(b) Report of unsoundness.—The report described in this subsection is a report under subparagraph (A)(ii) of section 3206(c)(2) that contains a statement described in subparagraph (B)(i)(III) of such section that indicates that the CLASS Independence Fund is projected to be actuarially unsound over the 75-year period beginning with the fiscal year in which such report is submitted.

“(c) Refund of amount in CLASS Independence Fund.—The refund process described in this subsection is the following:

“(1) IN GENERAL.—Not later than 180 days after the date of the submission of the report described in subsection (b), subject to paragraph (2), the Secretary shall pay to each individual enrolled in the CLASS program on the date of the submission of such report an amount from the CLASS Independence Fund equal to the difference of—

“(A) the total amount such respective individual paid in premiums as of such date under the CLASS program; and

“(B) the lesser of—

“(i) the total amount of benefits described in section 3205(b) received as of such date by such individual under the program; or

“(ii) the amount described in subparagraph (A).

“(2) INSUFFICIENT OR EXCESS FUNDS.—

“(A) INSUFFICIENT FUNDS.—If the amount remaining in the CLASS Independence Fund on the date of the submission of the report described in subsection (b) is insufficient to make the refund described in paragraph (1), the Secretary shall pay to each individual enrolled in the CLASS program on such date an amount that bears the same ratio to the amount remaining in the CLASS Independence Fund on such date as the amount determined under such paragraph for such respective individual bears to the sum obtained by adding each amount obtained by applying such paragraph to each such individual.

“(B) EXCESS FUNDS.—If an amount remains in the CLASS Independence Fund after the Secretary makes the refund described in paragraph (1), such amount shall be transferred to the general fund of the Treasury.

“(d) Funds in Life Independence Accounts retained by enrollees.—Notwithstanding the termination of the CLASS program under subsection (a), an individual who has funds remaining in a Life Independence Account established by the Secretary for such individual under subparagraph (A) of section 3205(c)(1) may continue to use such funds for the purposes described in subparagraph (B) of such section.”.

SEC. 6. Conforming amendments.

Title XXXII of the Public Health Service Act, as amended by sections 2 and 5, is further amended—

(1) in section 3204—

(A) in subsection (a)(1), by striking “paragraph (2)” and inserting “paragraphs (2) and (4)”; and

(B) in subsection (e)—

(i) in paragraph (1), by striking “An amount” and inserting “Subject to sections 3203(a)(4), 3208(c)(2), and 3212(a)(2), an amount”; and

(ii) in paragraph (2), by striking “The Secretary” and inserting “Subject to sections 3203(a)(4), 3208(c)(2), and 3212(a)(2), the Secretary”;

(2) in section 3208(d), in the first sentence, by striking “Beginning January 1” and inserting “Subject to section 3212(a)(8), beginning January 1”; and

(3) in section 3209, in the first sentence, by striking “The Inspector General” and inserting “Subject to section 3212(a)(9), the Inspector General”.


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