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  1. 1. CLASS Act Presented by Steve Sanders Golden Security
  2. 2. Timing <ul><li>There will be three plans submitted to the Advisory Committee who will bring the Secretary their opinion by mid-2012 </li></ul><ul><li>By October 1, 2012, the Secretary will publish the plan chosen for public comment </li></ul><ul><li>It appears that the goal is to begin the plan in 2013 at the latest </li></ul><ul><li>It’s possible that the plan will start earlier to get savings for health care portion of law </li></ul>
  3. 3. Enrollment <ul><li>Enrollment for the program will be handled by employers </li></ul><ul><li>All employees will be enrolled unless they opt-out </li></ul>
  4. 4. Disenrollment/Enrollment <ul><li>There are penalties built into the law for employees who opt-out and later want to join the program </li></ul><ul><ul><li>Basically the penalty will be a percentage and the fact that they will have to pay the new premium based on re-enrollment date </li></ul></ul><ul><li>Once started there will be an annual disenrollment period </li></ul><ul><li>There will be a biennial enrollment period </li></ul>
  5. 5. Premiums <ul><li>The Secretary will set the plan premium starting the first year and every year thereafter based on a 75 year actuarially sound projection </li></ul><ul><li>The goal is to have no premium increases for any enrollee during their lifetime </li></ul>
  6. 6. Premium Increases <ul><li>However, premiums can be increased based on certain guidelines for current enrollees: </li></ul><ul><ul><li>If current projections show the plan will become insolvent within 20 years </li></ul></ul><ul><ul><li>However, premiums may not be increased for people over the age of 65, no longer working and if they have paid in for over 20 years </li></ul></ul>
  7. 7. Premium Amounts <ul><li>In early stages, estimated premium would be about $60 per month </li></ul><ul><li>However, with actuarial projections actually being debated, amount has been projected as high as $240 per month </li></ul>
  8. 8. Vesting Period <ul><li>There will be a five year vesting period for all enrollees </li></ul><ul><li>This is why this is part of the health care reform bill </li></ul><ul><li>It’s expected that this will build a budget surplus for this entire five year time frame which helps to cover the cost of reform </li></ul>
  9. 9. Benefit Eligibility <ul><li>Appears that they will follow tax-qualified LTCi rules here. </li></ul><ul><li>The law does allow them to consider two or three ADL’s in determining eligibility. </li></ul><ul><li>I think the reasoning for this is that they might need it to keep the premium down to meet the 75 year soundness rule. </li></ul>
  10. 10. Benefits <ul><li>The law stipulates that there be a minimum of two up to a maximum of six benefit levels </li></ul><ul><ul><li>The minimum benefit level is $50 per day adjusted by CPI. </li></ul></ul><ul><ul><li>Benefits will be paid weekly or monthly. </li></ul></ul><ul><ul><li>There is no lifetime maximum benefit. </li></ul></ul>
  11. 11. Benefit Payment <ul><li>The primary purpose of this law is to provide benefits for people to stay at home </li></ul><ul><li>The Cash Benefit is placed into a Life Independence Account which shall be used to purchase nonmedical services and supports that the beneficiary needs to maintain his or her independence at home or in another residential setting of their choice in the community </li></ul>
  12. 12. Summarize <ul><li>Employer enrollment unless opt-out </li></ul><ul><ul><li>High penalties if need later </li></ul></ul><ul><li>Premiums estimated $160-240 monthly </li></ul><ul><ul><li>Can be increased in future </li></ul></ul><ul><li>Benefit average of at least $50 per day </li></ul><ul><li>Five years before qualify for benefits </li></ul><ul><li>Benefits increase at CPI (3.15% historical) </li></ul>
  13. 13. Private Insurance Comparison
  14. 14. Differences <ul><li>We offer $1,500 a month PURE CASH </li></ul><ul><li>We’ll pay up to $6,000 a month HHC </li></ul><ul><li>We’ll pay up to $3,000 a month ALF/NH </li></ul><ul><li>No five year waiting period </li></ul><ul><li>3.5% inflation versus CPI </li></ul><ul><li>Partnership Protection </li></ul><ul><li>Better insurance pool! </li></ul><ul><li>Contractual, not government run </li></ul>
  15. 15. Further Private Insurance Comparison Versus a Potential $480 Per Month?
  16. 16. But, Let’s Plan Better…
  17. 17. Less Than Half The Price… <ul><li>$3,000 a month Pure Cash vs. $1,500 </li></ul><ul><li>Up to $12,000 HHC versus $1,500 </li></ul><ul><li>Partnership Protection up to $300,000 </li></ul><ul><li>No five year waiting period </li></ul><ul><li>Good insurable pool </li></ul><ul><li>Contractual versus government-run </li></ul>
  18. 18. What About Worksite… <ul><li>Dramatic savings to younger employees </li></ul><ul><ul><li>Who face major penalties if they opt-out now and try to get back in later! </li></ul></ul><ul><li>Chance for employer to be a hero by pre-empting government plan </li></ul>
  19. 19. Potential Problems With CLASS <ul><li>Pool – compare to Federal Plan </li></ul><ul><ul><li>Potential spiraling effect </li></ul></ul><ul><li>May need to go to 3 of 5 ADL’s to keep premium reasonable </li></ul><ul><li>Potential penalties to non-insured Americans since no excuse for no coverage after plan in force </li></ul>
  20. 20. Our Role <ul><li>Education – inform clients of new law </li></ul><ul><ul><li>Message this law sends? </li></ul></ul><ul><ul><li>Don’t rely on government to continue to pay! </li></ul></ul><ul><li>Call to action – importance of getting private coverage if they can – WHILE THEY CAN!! </li></ul>NO CLIENT LEFT BEHIND!