U.S. Code, Title 5, Part III, Subpart G
CHAPTER 90 — LONG-TERM CARE INSURANCE
Sec.
9001. Definitions.
9002. Availability of insurance.
9003. Contracting authority.
9004. Financing.
9005. Preemption.
9006. Studies, reports, and audits.
9007. Jurisdiction of courts.
9008. Administrative functions.
9009. Cost accounting standards.
Sec. 9001. Definitions
For purposes of this chapter:
(1) EMPLOYEE- The term `employee' means--
(A) an employee as defined by section 8901(1);
(B) an individual described in section 2105(e);
(C) an individual employed by the Tennessee Valley
Authority; and
(D) an employee of a nonappropriated fund instrumentality of the Department of Defense described in section 2105(c);
(E) an employee of the District of Columbia courts.
(2) Annuitant.--The term `annuitant' means--
(A) any individual who would satisfy the
requirements of paragraph (3) of section 8901 if, for
purposes of such paragraph, the term `employee' were
considered to have the meaning given to it under
paragraph (1);
(B) any individual who--
(i) satisfies all requirements for title to
an annuity under subchapter III of chapter 83,
chapter 84, or any other retirement system for
employees of the Government (whether based on the
service of such individual or otherwise), and
files application therefor;
(ii) is at least 18 years of age; and
(iii) would not (but for this subparagraph)
otherwise satisfy the requirements of this
paragraph; and
(C) any former employee who, on the basis of his or her service, would meet all requirements for being considered an `annuitant' within the meaning of subchapter III of chapter 83, chapter 84, or any other retirement system for employees of the Government, but for the fact that such former employee has not attained the minimum age for title to annuity.
(3) MEMBER OF THE UNIFORMED SERVICES- The term `member of the uniformed
services' means a member of the uniformed services, other than a retired
member of the uniformed services, who is--
(A) on active duty or full-time National Guard duty for a period of
more than 30 days; and
(B) a member of the Selected Reserve.
(4) RETIRED MEMBER OF THE UNIFORMED SERVICES- The term `retired member
of the uniformed services' means a member or former member of the uniformed
services entitled to retired or retainer pay, and a member who has been transferred to the Retired Reserve and who would be entitled to retired pay under chapter 1223 of title 10 but for not having attained the age of 60 and who satisfies such eligibility requirements as the Office of Personnel Management prescribes under section 9008.
(5) QUALIFIED RELATIVE- The term `qualified relative' means each of the
following:
(A) The spouse of an individual described in paragraph (1), (2), (3),
or (4).
(B) A parent, stepparent, or parent-in-law of an individual described
in paragraph (1) or (3).
(C) A child (including an adopted child, a stepchild, or, to the
extent the Office of Personnel Management by regulation provides, a foster
child) of an individual described in paragraph (1), (2), (3), or (4), if
such child is at least 18 years of age.
(D) An individual having such other relationship to an individual
described in paragraph (1), (2), (3), or (4) as the Office may by
regulation prescribe.
(6) ELIGIBLE INDIVIDUAL- The term `eligible individual' refers to an
individual described in paragraph (1), (2), (3), (4), or (5).
(7) QUALIFIED CARRIER- The term `qualified carrier' means an insurance
company (or consortium of insurance companies) that is licensed to issue
long-term care insurance in all States, taking any subsidiaries of such a
company into account (and, in the case of a consortium, considering the
member companies and any subsidiaries thereof, collectively).
(8) STATE- The term State' includes the District of Columbia.
(9) QUALIFIED LONG-TERM CARE INSURANCE CONTRACT- The term `qualified
long-term care insurance contract' has the meaning given such term by
section 7702B of the Internal Revenue Code of 1986.
(10) APPROPRIATE SECRETARY- The term `appropriate Secretary'
means--
(A) except as otherwise provided in this paragraph, the Secretary of
Defense;
(B) with respect to the Coast Guard when it is not operating as a
service of the Navy, the Secretary of Transportation;
(C) with respect to the commissioned corps of the National Oceanic
and Atmospheric Administration, the Secretary of Commerce; and
(D) with respect to the commissioned corps of the Public Health
Service, the Secretary of Health and Human Services.
Sec. 9002. Availability of insurance
(a) IN GENERAL- The Office of Personnel Management shall establish and,
in consultation with the appropriate Secretaries, administer a program through
which an individual described in paragraph (1), (2), (3), (4), or (5) of
section 9001 may obtain long-term care insurance coverage under this chapter
for such individual.
(b) DISCRETIONARY AUTHORITY REGARDING NONAPPROPRIATED FUND INSTRUMENTALITIES- The Secretary of Defense may determine that a nonappropriated fund instrumentality of the Department of Defense is covered under this chapter or is covered under an alternative long-term care insurance program.
(c) GENERAL REQUIREMENTS- Long-term care insurance may not be offered
under this chapter unless--
(1) the only coverage provided is under qualified long-term care
insurance contracts; and
(2) each insurance contract under which any such coverage is provided
is issued by a qualified carrier.
(d) DOCUMENTATION REQUIREMENT- As a condition for obtaining long-term
care insurance coverage under this chapter based on one's status as a
qualified relative, an applicant shall provide documentation to demonstrate
the relationship, as prescribed by the Office.
(e) UNDERWRITING STANDARDS-
(1) DISQUALIFYING CONDITION- Nothing in this chapter shall be
considered to require that long-term care insurance coverage be made
available in the case of any individual who would be eligible for benefits
immediately.
(2) SPOUSAL PARITY- For the purpose of underwriting standards, a spouse
of an individual described in paragraph (1), (2), (3), or (4) of section
9001 shall, as nearly as practicable, be treated like that individual.
(3) GUARANTEED ISSUE- Nothing in this chapter shall be considered to
require that long-term care insurance coverage be guaranteed to an eligible
individual.
(4) REQUIREMENT THAT CONTRACT BE FULLY INSURED- In addition to the
requirements otherwise applicable under section 9001(9), in order to be
considered a qualified long-term care insurance contract for purposes of
this chapter, a contract must be fully insured, whether through reinsurance
with other companies or otherwise.
(5) HIGHER STANDARDS ALLOWABLE- Nothing in this chapter shall, in the
case of an individual applying for long-term care insurance coverage under
this chapter after the expiration of such individual's first opportunity to
enroll, preclude the application of underwriting standards more stringent
than those that would have applied if that opportunity had not yet
expired.
(f) GUARANTEED RENEWABILITY- The benefits and coverage made available to
eligible individuals under any insurance contract under this chapter shall be
guaranteed renewable (as defined by section 7A(2) of the model regulations
described in section 7702B(g)(2) of the Internal Revenue Code of 1986),
including the right to have insurance remain in effect so long as premiums
continue to be timely made. However, the authority to revise premiums under
this chapter shall be available only on a class basis and only to the extent
otherwise allowable under section 9003(b).
Sec. 9003. Contracting authority
(a) IN GENERAL- The Office of Personnel Management shall, without regard
to section 5 of title 41 or any other statute requiring competitive bidding,
contract with one or more qualified carriers for a policy or policies of
long-term care insurance. The Office shall ensure that each resulting contract
(hereafter in this chapter referred to as a `master contract') is awarded on
the basis of contractor qualifications, price, and reasonable competition.
(b) TERMS AND CONDITIONS-
(1) IN GENERAL- Each master contract under this chapter shall
contain--
(A) a detailed statement of the benefits offered (including any
maximums, limitations, exclusions, and other definitions of
benefits);
(B) the premiums charged (including any limitations or other
conditions on their subsequent adjustment);
(C) the terms of the enrollment period; and
(D) such other terms and conditions as may be mutually agreed to by
the Office and the carrier involved, consistent with the requirements of
this chapter.
(2) PREMIUMS- Premiums charged under each master contract entered into
under this section shall reasonably and equitably reflect the cost of the
benefits provided, as determined by the Office. The premiums shall not be
adjusted during the term of the contract unless mutually agreed to by the
Office and the carrier.
(3) NONRENEWABILITY- Master contracts under this chapter may not be
made automatically renewable.
(c) PAYMENT OF REQUIRED BENEFITS; DISPUTE RESOLUTION-
(1) IN GENERAL- Each master contract under this chapter shall require
the carrier to agree--
(A) to provide payments or benefits to an eligible individual if such
individual is entitled thereto under the terms of the contract;
and
(B) with respect to disputes regarding claims for payments or
benefits under the terms of the contract--
(i) to establish internal procedures designed to expeditiously
resolve such disputes; and
(ii) to establish, for disputes not resolved through procedures
under clause (i), procedures for one or more alternative means of
dispute resolution involving independent third-party review under
appropriate circumstances by entities mutually acceptable to the Office
and the carrier.
(2) ELIGIBILITY- A carrier's determination as to whether or not a
particular individual is eligible to obtain long-term care insurance
coverage under this chapter shall be subject to review only to the extent
and in the manner provided in the applicable master contract.
(3) OTHER CLAIMS- For purposes of applying the Contract Disputes Act of
1978 to disputes arising under this chapter between a carrier and the
Office--
(A) the agency board having jurisdiction to decide an appeal relative
to such a dispute shall be such board of contract appeals as the Director
of the Office of Personnel Management shall specify in writing (after
appropriate arrangements, as described in section 8(c) of such Act);
and
(B) the district courts of the United States shall have original
jurisdiction, concurrent with the United States Court of Federal Claims,
of any action described in section 10(a)(1) of such Act relative to such a
dispute.
(4) RULE OF CONSTRUCTION- Nothing in this chapter shall be considered
to grant authority for the Office or a third-party reviewer to change the
terms of any contract under this chapter.
(1) IN GENERAL- Each master contract under this chapter shall be for a
term of 7 years, unless terminated earlier by the Office in accordance with
the terms of such contract. However, the rights and responsibilities of the
enrolled individual, the insurer, and the Office (or duly designated
third-party administrator) under such contract shall continue with respect
to such individual until the termination of coverage of the enrolled
individual or the effective date of a successor contract thereto.
(A) SHORTER DURATION- In the case of a master contract entered into
before the end of the period described in subparagraph (B), paragraph (1)
shall be applied by substituting `ending on the last day of the 7-year
period described in paragraph (2)(B)' for `of 7 years'.
(B) DEFINITION- The period described in this subparagraph is the
7-year period beginning on the earliest date as of which any long-term
care insurance coverage under this chapter becomes effective.
(3) CONGRESSIONAL NOTIFICATION- No later than 180 days after receiving
the second report required under section 9006(c), the President (or his
designee) shall submit to the Committees on Government Reform and on Armed
Services of the House of Representatives and the Committees on Governmental
Affairs and on Armed Services of the Senate, a written recommendation as to
whether the program under this chapter should be continued without
modification, terminated, or restructured. During the 180-day period
following the date on which the President (or his designee) submits the
recommendation required under the preceding sentence, the Office of
Personnel Management may not take any steps to rebid or otherwise contract
for any coverage to be available at any time following the expiration of the
7-year period described in paragraph (2)(B).
(4) FULL PORTABILITY- Each master contract under this chapter shall
include such provisions as may be necessary to ensure that, once an
individual becomes duly enrolled, long-term care insurance coverage obtained
by such individual pursuant to that enrollment shall not be terminated due
to any change in status (such as separation from Government service or the
uniformed services) or ceasing to meet the requirements for being considered
a qualified relative (whether as a result of dissolution of marriage or
otherwise).
Sec. 9004. Financing
(a) IN GENERAL- Each eligible individual obtaining long-term care
insurance coverage under this chapter shall be responsible for 100 percent of
the premiums for such coverage.
(1) IN GENERAL- The amount necessary to pay the premiums for enrollment
may--
(A) in the case of an employee, be withheld from the pay of such
employee;
(B) in the case of an annuitant, be withheld from the annuity of such
annuitant;
(C) in the case of a member of the uniformed services described in
section 9001(3), be withheld from the pay of such member; and
(D) in the case of a retired member of the uniformed services
described in section 9001(4), be withheld from the retired pay or retainer
pay payable to such member.
(2) VOLUNTARY WITHHOLDINGS FOR QUALIFIED RELATIVES- Withholdings to pay
the premiums for enrollment of a qualified relative may, upon election of
the appropriate eligible individual (described in section 9001(1)-(4)), be
withheld under paragraph (1) to the same extent and in the same manner as if
enrollment were for such individual.
(c) DIRECT PAYMENTS- All amounts withheld under this section shall be
paid directly to the carrier.
(d) OTHER FORMS OF PAYMENT- Any enrollee who does not elect to have
premiums withheld under subsection (b) or whose pay, annuity, or retired or
retainer pay (as referred to in subsection (b)(1)) is insufficient to cover
the withholding required for enrollment (or who is not receiving any regular
amounts from the Government, as referred to in subsection (b)(1), from which
any such withholdings may be made, and whose premiums are not otherwise being
provided for under subsection (b)(2)) shall pay an amount equal to the full
amount of those charges directly to the carrier.
(e) SEPARATE ACCOUNTING REQUIREMENT- Each carrier participating under
this chapter shall maintain records that permit it to account for all amounts
received under this chapter (including investment earnings on those amounts)
separate and apart from all other funds.
(1) REASONABLE INITIAL COSTS-
(A) IN GENERAL- The Employees' Life Insurance Fund is available,
without fiscal year limitation, for reasonable expenses incurred by the
Office of Personnel Management in administering this chapter before the
start of the 7-year period described in section 9003(d)(2)(B), including
reasonable implementation costs.
(B) REIMBURSEMENT REQUIREMENT- Such Fund shall be reimbursed, before
the end of the first year of that 7-year period, for all amounts obligated
or expended under subparagraph (A) (including lost investment income).
Such reimbursement shall be made by carriers, on a pro rata basis, in
accordance with appropriate provisions which shall be included in master
contracts under this chapter.
(A) IN GENERAL- There is hereby established in the Employees' Life
Insurance Fund a Long-Term Care Administrative Account, which shall be
available to the Office, without fiscal year limitation, to defray
reasonable expenses incurred by the Office in administering this chapter
after the start of the 7-year period described in section
9003(d)(2)(B).
(B) REIMBURSEMENT REQUIREMENT- Each master contract under this
chapter shall include appropriate provisions under which the carrier
involved shall, during each year, make such periodic contributions to the
Long-Term Care Administrative Account as necessary to ensure that the
reasonable anticipated expenses of the Office in administering this
chapter during such year (adjusted to reconcile for any earlier
overestimates or underestimates under this subparagraph) are
defrayed.
Sec. 9005. Preemption
(a) CONTRACTUAL PROVISIONS.The terms of any contract under this chapter which relate to the nature,
provision, or extent of coverage or benefits (including payments with respect
to benefits) shall supersede and preempt any State or local law, or any
regulation issued thereunder, which relates to long-term care insurance or
contracts.
(b) PREMIUMS.--
(1) IN GENERAL.--No tax, fee, or other monetary payment
may be imposed or collected, directly or indirectly, by any
State, the District of Columbia, or the Commonwealth of Puerto
Rico, or by any political subdivision or other governmental
authority thereof, on, or with respect to, any premium paid for
an insurance policy under this chapter.
(2) RULE OF CONSTRUCTION.--Paragraph (1) shall not be
construed to exempt any company or other entity issuing a policy
of insurance under this chapter from the imposition, payment, or
collection of a tax, fee, or other monetary payment on the net
income or profit accruing to or realized by such entity from
business conducted under this chapter, if that tax, fee, or
payment is applicable to a broad range of business activity.'
Sec. 9006. Studies, reports, and audits
(a) PROVISIONS RELATING TO CARRIERS- Each master contract under this
chapter shall contain provisions requiring the carrier--
(1) to furnish such reasonable reports as the Office of Personnel
Management determines to be necessary to enable it to carry out its
functions under this chapter; and
(2) to permit the Office and representatives of the General Accounting
Office to examine such records of the carrier as may be necessary to carry
out the purposes of this chapter.
(b) PROVISIONS RELATING TO FEDERAL AGENCIES- Each Federal agency shall
keep such records, make such certifications, and furnish the Office, the
carrier, or both, with such information and reports as the Office may
require.
(c) REPORTS BY THE GENERAL ACCOUNTING OFFICE- The General Accounting
Office shall prepare and submit to the President, the Office of Personnel
Management, and each House of Congress, before the end of the third and fifth
years during which the program under this chapter is in effect, a written
report evaluating such program. Each such report shall include an analysis of
the competitiveness of the program, as compared to both group and individual
coverage generally available to individuals in the private insurance market.
The Office shall cooperate with the General Accounting Office to provide
periodic evaluations of the program.
Sec. 9007. Jurisdiction of courts
`The district courts of the United States have original jurisdiction of a
civil action or claim described in paragraph (1) or (2) of section 9003(c),
after such administrative remedies as required under such paragraph (1) or (2)
(as applicable) have been exhausted, but only to the extent judicial review is
not precluded by any dispute resolution or other remedy under this chapter.
Sec. 9008. Administrative functions
(a) IN GENERAL- The Office of Personnel Management shall prescribe
regulations necessary to carry out this chapter.
(b) ENROLLMENT PERIODS- The Office shall provide for periodic coordinated
enrollment, promotion, and education efforts in consultation with the
carriers.
(c) CONSULTATION- Any regulations necessary to effect the application and
operation of this chapter with respect to an eligible individual described in
paragraph (3) or (4) of section 9001, or a qualified relative thereof, shall
be prescribed by the Office in consultation with the appropriate Secretary.
(d) INFORMED DECISIONMAKING- The Office shall ensure that each eligible
individual applying for long-term care insurance under this chapter is
furnished the information necessary to enable that individual to evaluate the
advantages and disadvantages of obtaining long-term care insurance under this
chapter, including the following:
(1) The principal long-term care benefits and coverage available under
this chapter, and how those benefits and coverage compare to the range of
long-term care benefits and coverage otherwise generally available.
(2) Representative examples of the cost of long-term care, and the
sufficiency of the benefits available under this chapter relative to those
costs. The information under this paragraph shall also include--
(A) the projected effect of inflation on the value of those benefits;
and
(B) a comparison of the inflation-adjusted value of those benefits to
the projected future costs of long-term care.
(3) Any rights individuals under this chapter may have to cancel
coverage, and to receive a total or partial refund of premiums. The
information under this paragraph shall also include--
(A) the projected number or percentage of individuals likely to fail
to maintain their coverage (determined based on lapse rates experienced
under similar group long-term care insurance programs and, when available,
this chapter); and
(B)(i) a summary description of how and when premiums for long-term
care insurance under this chapter may be raised;
(ii) the premium history during the last 10 years for each qualified
carrier offering long-term care insurance under this chapter; and
(iii) if cost increases are anticipated, the projected premiums for a
typical insured individual at various ages.
(4) The advantages and disadvantages of long-term care insurance
generally, relative to other means of accumulating or otherwise acquiring
the assets that may be needed to meet the costs of long-term care, such as
through tax-qualified retirement programs or other investment
vehicles.
Sec. 9009. Cost accounting standards
`The cost accounting standards issued pursuant to section 26(f) of the
Office of Federal Procurement Policy Act (41 U.S.C. 422(f)) shall not apply
with respect to a long-term care insurance contract under this chapter.'.
(b) CONFORMING AMENDMENT- The analysis for part III of title 5, United
States Code, is amended by adding at the end of subpart G the following:
`90. Long-Term Care Insurance
--9001.'.
SEC. 1003. EFFECTIVE DATE.
The Office of Personnel Management shall take such measures as may be
necessary to ensure that long-term care insurance coverage under title 5,
United States Code, as amended by this title, may be obtained in time to take
effect not later than the first day of the first applicable pay period of the
first fiscal year which begins after the end of the 18-month period beginning
on the date of the enactment of this Act.