The Community Living Assistance Services and Supports Act (CLASS Act) is the recent nationwide program that strives to restore the interest of millions of Americans to finance their own care despite of the increasing costs of facilities and Medicaid’s inefficiency in funding long term care. This program provides opportunity for people, who become functionally disabled and require community living assistance and support, to afford long term care insurance by contributing a very low amount of premium. The effective date will be on January 1, 2011, but the payout for the benefits will happen on or after 2017. The Department of Health and Human Services (HHS) is responsible for the program and will issue any guidelines with regard to the benefits and enrolment.

Who Can Join?

Residents over the age 18 and earns income may enrol in the CLASS Act program. Employees will be automatically enrolled, but they reserve the right to decline their involvement in the program. Self-employed individuals may enrol in the program through an alternative method that will be established by HHS. However, employers are not obliged to offer CLASS act program or get any funds from their employers. Qualifying for CLASS Act is a lot easier than any private insurance because it does not require strict underwriting. Thus, any pre-existing condition does not hamper an individual from enrolling in the program.

Who is Eligible for the Benefits?

Adults with multiple functional limitations or related impairments (as determined by HHS) will be entitled to receive benefits after they have paid the monthly premiums for at least five years. Individuals who are incapable of doing activities of daily living or have cognitive impairment that persists for more than 90 days are also eligible for the benefits. Activities of daily living or ADL are bathing, dressing, moving, eating, and toileting.

What are the Benefits that Eligible Individuals Should Expect?

Eligible individuals will receive cash benefit they can use to purchase non-medical services and support. Institutional care can be also availed using the benefits. The benefits do not follow certain age-based limits, but follow a certain degree of impairment or disability. This requires members to pay an average of $50 per day and will increase annually in line with inflation. The benefits may be paid either daily or weekly basis and will be deposited in a debit account for each participants.

Who Pays for the CLASS Act Program?

Unlike Medicaid, the funds for the Long Term Care CLASS Act program are not gathered from tax payers, but come from the voluntary members who have paid for the premiums. The premiums will be placed in a trust fund or pool. The monthly premiums will depend on the member’s age; meaning, younger members will pay less premiums than older participants. In case a member skips paying premiums for three months, the premiums will be adjusted once the participant re-enrols. The premiums will then vary on the person’s age at the time of re-enrolment. Low-income earners and students below the age 22 but are actively employed will pay cheaper premiums to about $5 per month.