The American Association for Long-Term Care Insurance, the industry's national professional organization, commended Senate Finance Committee Chairman Max Baucus (D-Montana) for including a proposal to allow cafeteria plans to offer qualified long-term care insurance as part of his health care reform package.
The proposal was part of the Senator's "America’s Healthy Future Act," health care reform legislation which the Senator notes is intended to lower costs and provide quality, affordable health care coverage.
The health care reform proposal will make it easier for families and small businesses to buy health care coverage including long-term care insurance, ensure Americans can choose to keep the health care coverage they have if they like it and slow the growth of health care costs over time. The Finance Committee will meet to begin voting on the Chairman’s Mark next week.
The proposal recommends creation of a Simple Cafeteria Plan – a vehicle through which small businesses can provide tax-free benefits to their employees. This change would ease the participation restrictions and include self-employed individuals as qualified employees. The proposal also exempts employers who make contributions for employees under a simple cafeteria plan from pension plan nondiscrimination requirements applicable to highly compensated and key employees.
Finally, the proposal allows for qualified long-term care insurance to be provided under a cafeteria plan to the extent the amount of such contributions does not exceed the eligible long-term care premiums for the contract. This proposal is effective beginning on January 1, 2011.
The full text of the America’s Healthy Future Act is available at http://finance.senate.gov/sitepages/leg/LEG 2009/091609 Americas_Healthy_Future_Act.pdf