Monthly Archives : May 2010

Health Reform for Americans with Disabilities

On March 23, 2010 President Obama signed the Patient Protection and Affordable Care Act into law, as amended by the Health Care and Education Reconciliation Act of 2010 (“Health Care Reform”).  Here are some highlights of the Health Care Reform legislation intended to provide greater access to health insurance coverage for individuals with disabilities. 

  • Health Care Reform legislation provides for a new, voluntary self-insured program to help families pay for community based supportive services if a family member develops a disability.   The Community Living Assistance Services and Support program (CLASS Act) is not intended to replace private long term care insurance or Medicaid, but is meant to provide a supplemental monthly cash payment to help defray the cost of non-medical services, such as home health care, assistive technology, or adult day care.

    Working adults will be able to make voluntary premium contributions either directly or through payroll deductions.  Your employer will automatically enroll you in the program, unless you opt out.  To be eligible for benefits, an adult would need to pay premiums for at least five years and have been employed during three of those five year.

    The CLASS program is effective on January 1, 2011, but payout of CLASS benefits will not take effect until 2017, leaving many people with disabilities and seniors without affordable options to finance long-term care in the short run.

  • Creates more options for the States to provide Medicaid funded home and community based services to enable more people with disabilities to access long-term services in a setting they choose. 
  • Makes improvements to the Medicaid Home and Community Based Services Option. 
  • For 2010, prohibits insurance companies from denying coverage to children based on pre-existing conditions.  Next year, insurance companies will be prohibited from denying coverage or charging more to an individual based on medical history. 
  • Provides access to health insurance through Exchanges to those without job-related coverage and premium tax credits to those who cannot afford coverage.
New Tax Planning Option if in the Market for Long Term Care Insurance

Two important changes regarding Long Term Care Insurance have come into effect. Starting January 1, 2010: (a) Distributions from non-qualified annuities and life insurance which have a long-term care insurance rider are tax-free when used to pay long-term care costs; and (b) non-qualified annuities and life insurance can be exchanged tax-free via a so-called “1034 exchange” for a tax advantaged long-term care insurance policy.   There are a number of technical requirements that must be met to achieve the tax-free exchange status and as with any investment, exchanges may not be right for everyone.