PUBLIC LAW 104-191—AUG. 21, 1996
110 STAT. 2055
"(2) SPECIAL RULES. —
"(A) PER DIEM, ETC. PAYMENTS PERMITTED.— A contract
shall not fail to be described in subparagraph (A) or (B)
of paragraph (1) by reason of payments being made on
a per diem or other periodic basis without regard to the
expenses incurred during the period to which the payments
relate.
" (B) SPECIAL RULES RELATING TO MEDICARE. —
"(i) Paragraph (1)(B) shall not apply to expenses
which are reimbursable under title XVIII of the Social
Security Act only as a secondary payor.
"(ii) No provision of law shall be construed or
applied so as to prohibit the offering of a qualified
long-term care insurance contract on the basis that
the contract coordinates its benefits with those provided under such title.
"(C) REFUNDS OF PREMIUMS.— Paragraph (1)(E) shall
not apply to any refund on the death of the insured, or
on a complete surrender or cancellation of the contract,
which cannot exceed the aggregate premiums paid under
the contract. Any refund on a complete surrender or cancellation of the contract shall be includible in gross income
to the extent that any deduction or exclusion was allowable
with respect to the premiums.
"(c) QUALIFIED LONG-TERM CARE SERVICES.— For purposes of
this section—
"(1) IN GENERAL.—The term 'qualified long-term care
services' means necessary diagnostic, preventive, therapeutic,
curing, treating, mitigating, and rehabilitative services, and
maintenance or personal care services, which—
"(A) are required by a chronically ill individual, and
"(B) are provided pursuant to a plan of care prescribed
by a licensed health care practitioner.
"(2) CHRONICALLY ILL INDIVIDUAL. —
"(A) IN GENERAL.—The term 'chronically ill individual'
means any individual who has been certified by a licensed
health care practitioner as—
"(i) being unable to perform (without substantial
assistance from another individual) at least 2 activities
of daily living for a period of at least 90 days due
to a loss of functional capacity,
"(ii) having a level of disability similar (as determined under regulations prescribed by the Secretary
in consultation with the Secretary of Health and
Human Services) to the level of disability described
in clause (i), or
"(iii) requiring substantial supervision to protect
such individual from threats to health and safety due
to severe cognitive impairment.
Such term shall not include any individual otherwise meeting the requirements of the preceding sentence unless
within the preceding 12-month period a licensed health
care practitioner has certified that such individual meets
such requirements.
"(B) ACTIVITIES OF DAILY LIVING.—For purposes of
subparagraph (A), each of the following is an activity of
daily living:
�
