Dear Workforce Do We Need to Be Educating Employees About the CLASS Act?

Dear CLASS Struggle:

The Community Living Assistance Services and Supports, or CLASS, program, which is being created under the Patient Protection and Affordable Care Act, is a voluntary public insurance program designed to help people plan for a time when they may have functional limitations that interfere with their ability to maintain their independence. The Affordable Care Act requires the Department of Health and Human Services to spell out the official benefit plan by Oct. 1, 2012. Until guidance is issued on the CLASS program, there is nothing that employers have to do, and we can only surmise what the final program will look like.

That said, the CLASS program will be funded by premiums paid by enrollees and will pay a benefit for nonmedical services and supports to help people with disabilities function without having to go into a nursing home. Employer participation in the program is voluntary. Employers may elect to automatically enroll their active employees (with employee opt-out). Even if they do not promote participation through auto enrollment, employers may choose to deduct premium payments for the program from employees’ paychecks, presumably on an after-tax basis.

As for employees who opt out of the CLASS program, there are no indications at this time that they will need to be provided with any information about payroll deductions since there will be no CLASS program deductions from their paychecks. On the other hand, employees who choose to participate will no doubt need to be notified about what is being deducted.

Although there are no immediate action steps for employers to take, as details about the CLASS program are announced this year and next, employers should monitor guidance and consider whether they would like to play a role in facilitating employee enrollment and/or deducting premium payments.

SOURCE: Kathryn Bakich, the Segal Co., Washington, D.C.

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The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.