H.R. 4040 (ih) To amend title 5, United States Code, to provide for the establishment of a program under which long-term care insurance is made available to Federal employees, members of the uniformed services, and civilian and military retirees, and for...

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        H.R.4040

                       One Hundred Sixth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

           Begun and held at the City of Washington on Monday,
             the twenty-fourth day of January, two thousand


                                 An Act


 
 To amend title 5, United States Code, to provide for the establishment 
 of a program under which long-term care insurance is made available to 
 Federal employees, members of the uniformed services, and civilian and 
  military retirees, provide for the correction of retirement coverage 
 errors under chapters 83 and 84 of such title, and for other purposes.

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

               TITLE I--FEDERAL LONG-TERM CARE INSURANCE

SEC. 1001. SHORT TITLE.

    This title may be cited as the ``Long-Term Care Security Act''.

SEC. 1002. LONG-TERM CARE INSURANCE.

    (a) In General.--Subpart G of part III of title 5, United States 
Code, is amended by adding at the end the following:

                 ``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); and
            ``(C) an individual employed by the Tennessee Valley 
        Authority,
    but does not include an individual employed by the government of 
    the District of Columbia.
        ``(2) Annuitant.--The term `annuitant' has the meaning such 
    term would have under 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) of this 
    subsection.
        ``(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, including a member or former member retired under chapter 1223 
    of title 10 who has 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) 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.
    ``(c) 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.
    ``(d) 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.
    ``(e) 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.
    ``(d) Duration.--
        ``(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.
        ``(2) Exception.--
            ``(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.
    ``(b) Withholdings.--
        ``(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.--

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