National, voluntary, payroll deduct insurance program – The CLASS Independence Benefit Plan CLASS: Community Living Assistance Services and Support Eligible enrollees include any actively employed individual at least 18 years old. Qualified beneficiaries will receive cash benefit of not less than $50 per day. The CLASS Act

2011 HHS develops enrollment procedures, benefit eligibility assessment, disenrollment and payroll deduct procedures President appoints 15 member CLASS Advisory Council (likely beneficiaries, caregivers, actuaries, economists, etc.) Development of 3 alternative benefit plans 2012 Jan. 1 – enrollment begins Oct. 1 – Secretary designates CLASS benefit plan 2018 Earliest payout of benefits The CLASS Act Timeline

CLASS Act details Enrollment Employers are not currently required to participate Employees are auto enrolled by employers, with voluntary opt-out HHS to develop alternative enrollment procedures for: self-employed have multiple employers have non-participating employer

CLASS Act details Premiums Established yearly based on act. analysis of 75-year cost period Initial premiums estimated to be $124-$240 per month $5 nominal premium established for enrollees <100% pov and full- time actively employed students <22 years of age Benefit Triggers Patterned after HIPAA LTCI triggers: Functional limitation expected to last more than 90 days Inability to perform 2 or 3 ADLs OR Cognitive impairment

CLASS Act details Cash Benefits $50 per day indemnity benefit / no lifetime limit benefit not contingent on pay-in Not payable until premiums paid in for 5 years May be paid daily or weekly Payments deposited into Life Independence Account rollover option for lump sum payments to be deferred on a month to month basis, but not from year to year Underwriting No underwriting allowed

CLASS Act details Recalculation of Premiums 10 years from program inception to gauge solvency, based on 20-year look forward Premium increase does NOT apply to: poor students >65, not actively at work, have paid premiums for at least 20 years Premium increase WILL apply to: student status change re-enrollment after 90-day premium lapse

CLASS Act Supplements? Viable? High cost of participating in CLASS program poses significant barrier to creating marketable supplemental coverage Impossible to supplement / coordinate with fixed indemnity coverage Benefit triggers for private LTCI and CLASS coverage are different – improbable that triggers will be met under both, simultaneously. Proof of claim requirements are significantly different