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CLASS Act to be repealed

One provision of the Affordable Care Act, commonly referred to as “health care reform act”, that has been delayed is the Community Living Assistance Services and Support Act (CLASS Act).  Originally scheduled to be implemented on January 1, 2011 this provision was delayed until the Secretary of the Department of Health and Human Services (HHS) could develop three “actuarial sound” funding strategies for consideration in the program’s design.  The deadline for these strategies is October 1, 2012 with expected implementation to be in 2013.  Now, it appears that the entire CLASS Act program may be repealed.

The CLASS Act is commonly referred to as long-term care coverage for disabled Americans, however, its intended design does not follow traditional long-term care insurance coverage that provides a benefit for disabled individuals needing care in a facility setting such as a nursing home or assisted living facility.  Instead, the CLASS Act intended to provide benefits enabling the disabled individual to continue to live at home by modifying the residence to accommodate the disability and providing professional services in the home.  The CLASS Act was intended to be a voluntary program with employers “strongly encouraged”, but not required, to participate.  For those employers who did participate, employers would auto-enroll employees into the plan (although employees could “opt-out” of the coverage) and deduct the cost of the CLASS Act (estimated at, on average, $65 a month) from the employee’s paycheck.

Critics, citing the Congressional Budget Office (CBO), immediately argued that the CLASS Act was not financially sustainable.  In 2010, a bipartisan deficit reduction commission appointed by President Obama recommended either reform or total repeal of the CLASS Act.  Lastly, on July 20, 2011, a bipartisan group of senators known as the “Gang of Six” included repeal of the CLASS Act as part of their $3.7 trillion deficit-reduction plan.

With the likely appeal of the CLASS Act it means that three provisions of the Affordable Care Act, the 1099 Form Reporting Requirement and Free Choice Vouchers being the other two, have been repealed.