We recently read about a new, buried gem in health care reform that helps Americans pay for elder care.  The CLASS Act.  Community Living Assistance Services and Supports Act.

What is the CLASS Act?
This program is a little-known, little-discussed part of the health care reform package passed earlier this year. The CLASS Act will allow U.S. employees to have a small amount taken out of their paycheck in return for about $75/day of benefits that can be used for care or living assistance once an individual can no longer take care of him/herself. It will take effect starting January, 2011, but there are still many details to be ironed out by the U.S. Department of Health and Human Services.

How is it structured?

• For the average citizen: All working people have the opportunity to pay a small fee from their paycheck now to pay for benefits later, similar to how social security is designed. People who choose to opt in will be able to apply for assistance to help pay for long-term home care – as a result of either age or disability. It will provide assistance for all eligible people for the any length of time they need it, whether it’s 3 years or 60 years.

• For the government: CLASS Act is required, to be self-supporting. So, the program must operate solely on the amount of money that people invest in it and cannot get additional help from tax dollars.

Who is eligible to collect on the CLASS Act?

• Participants have to be over the age of 18, contribute over a 5-year “vesting period,” and be actively working for 3 of those years before receiving benefits.

• All employers will automatically be included unless they opt out. Employees and self-employed can opt in independently if they choose.

• Minimum level of disability to qualify for benefits has not yet been set, but will likely be the loss of the ability to perform 2 or 3 activities of daily living OR equivalent cognitive limitation.

How much will it cost, and what will it provide?

• Average benefits will be approximately $75/day – estimated premiums will be variable, but roughly $60-$120/month depending on national participation rates.

• Once a member has turned 65 and has participated in CLASS for 20 years, their rates will be locked.

Key Ideas to Remember

• This is the nation’s FIRST attempt at blanket long-term care insurance; Medicare/ Medi-Cal do not count.

• Use of the benefits is flexible and can be used for in-home care services.

• CLASS Act is NOT a government service. The government is NOT paying for the program. CLASS Act is a trust run by the government that will re-distribute money paid directly into it.

• Private long-term insurance policies are generally designed for 3-4 years of care, this program covers a lifetime of care.