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SIZING UP THE CLASS ACT
The health reform legislation contains numerous provisions related to long-term care. One of these provisions is the Community Living Assistance Services and Support (CLASS) Act.
Effective January 1, 2011, the CLASS Act will make long-term care insurance available to all working adults, who make voluntary contributions through payroll deductions if available through their employer or direct contributions to the program.
Like many of the provisions of Health Care Reform, there are many details still to be determined by the Secretary of Health and Human Services regarding the CLASS Act. Examples of these include:
- Determine monthly premium amounts, which will vary by age and income level
- Define which functional limitations and/or cognitive impairments qualify as eligible to receive benefits
These limitations are expected to include individuals who cannot perform at least two Activities of Daily Living (ADLs): e.g. eating, toileting, bathing, dressing, transferring; AND individuals who have a cognitive disability requiring supervision or assistance.
- Set the varying benefit amounts payable to eligible individuals based on the degree of impairment
What are the benefits of the CLASS program?
Adults who meet eligibility criteria will receive a cash benefit that can be used to purchase non–medical services and supports necessary to maintain community residence; payments for institutional care are permitted. The amount of the cash benefit is based on the degree of impairment or disability, averaging no less than $50 per day.
Do you know how far $50 per day will go?
A 2008 national survey conducted by John Hancock and CareScout found that the average cost of hourly home healthcare in Charlotte and Raleigh, NC was $18 per hour. Therefore, the average beneficiary of the CLASS program could expect to be reimbursed for about 2.5 hours of assistance per day.
While the intent of the CLASS provision was good, TriSure believes it will leave your employees with a false sense of security. They will expect that they have adequate coverage, when in all likelihood, they will need their savings to fund any shortcomings of the CLASS benefit.
Employees would most likely be better served if employers offered them a voluntary commercial individual Long Term Care policy in lieu of the CLASS program, or at the very least, to supplement it.
We encourage you to explore all LTC plan options as you would any other benefit you would offer to your employees, before promoting the CLASS program alone.