CLASS Act, which stands for Community Living Assistance Services and Support Act, is considered as the first national, voluntary and government-facilitated insurance plan for long-term care in the United States. It was signed into law by President Barrack Obama on March 23, 2010 but only took effect last January 1, 2011.

The primary goal of the act is to provide means to employed adults to pay for long term care and health assistance through a salary deduction scheme and to augment the role of Medicaid and other insurance coverage. Nowadays, Medicaid pays more than 40% of personal care for senior citizens and disabled people. Cash benefits that will be provided by the CLASS Act would give American families the flexibility to pay for long-term care plans without putting a hole in their pocket.

The law is expected to have an impact in the year 2013, until all details are worked out. The Department of Health and Human Services is the government agency tasked to draft and implement the rules and regulations of the CLASS Act program. The rules will be decided by the Secretary no later than October 1, 2012.

Here are some of the most basic and significant provisions of the law:

Who are entitled to enrol in the program?

Any employed individuals, 18 years old and above, are eligible to join in the program. This includes part-time workers and self-employed ones. Applicants must be employed for at least 3 years before they can get their benefits. The person must not have previous history of institutional care.

How does it work?

It is a voluntary policy. People who want to avail the benefits of CLASS program need to pay for the premiums on a monthly basis through a salary deduction system. Members will be automatically enrolled through their companies and have their premiums deducted through their payroll, but with the choice to opt out.

How long is the waiting period?

Unlike private LTCi policies that pay for benefits on a daily, monthly, or annual basis, the CLASS Act commands a five-year waiting period. This means that an applicant can only receive the benefits after she or she completed paying the premiums for five years.

Are there any health qualifications?

None, fortunately. One positive provision of the CLASS program is that it accepts all qualified applicants, regardless of their pre-existing health conditions. This is different from private insurance policies in which they disapprove anyone with health problems. Underwriting process is not necessary for qualified applicants.

What are the benefits?

CLASS ACT will provide cash benefits which can be utilized to pay for a wide range of care services, including nursing home expenses, assisted living, and many others. The minimum benefit is US$50 per day, but the Congressional Budget Office assigns US$75 daily benefit to members who need backings on two or more activities for daily living.