SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Common Sense Smoking Prevention Act 
of 1998''.

SEC. 2. PENALTY FOR SMOKERS.

    (a) Group Health Plans.--
            (1) Public health service act amendments.--(A) Subpart 2 of 
        part A of title XXVII of the Public Health Service Act is 
        amended by adding at the end the following new section:

``SEC. 2706. STANDARD RELATING TO SMOKERS.

    ``(a) Requirement.--In the case of benefits consisting of medical 
care provided under a group health plan, or in the case of group health 
insurance coverage offered by a health insurance issuer in connection 
with a group health plan, the plan or issuer--
            ``(1) shall deny, cancel, or refuse to renew such benefits 
        or such coverage on the basis that a participant or beneficiary 
        (or family member of a participant or beneficiary) refuses 
        testing by a licensed physician to determine whether or not 
        such participant or beneficiary is a smoker; and
            ``(2) shall increase the premiums for such benefits or 
        coverage by 10 percent for any participant or beneficiary under 
        the plan on the basis that a licensed physician has determined 
        that the participant or beneficiary (or family member of the 
        participant or beneficiary) is a smoker.
    ``(b) Definition of Family Member.--For purposes of this section 
the term `family member' means, with respect to an individual, a spouse 
or child of the individual.
    ``(c) Notice.--A group health plan under this part shall comply 
with the notice requirement under section 713(b) of the Employee 
Retirement Income Security Act of 1974 with respect to the requirements 
of this section as if such section applied to such plan.''.
            (B) Section 2723(c) of such Act (42 U.S.C. 300gg-23(c)), as 
        amended by section 604(b)(2) of Public Law 104-204, is amended 
        by striking ``section 2704'' and inserting ``sections 2704 and 
        2706''.
            (2) ERISA amendments.--(A) Subpart B of part 7 of subtitle 
        B of title I of the Employee Retirement Income Security Act of 
        1974 is amended by adding at the end the following new section:

``SEC. 713. STANDARD RELATING SMOKERS.

    ``(a) Requirement.--In the case of benefits consisting of medical 
care provided under a group health plan, or in the case of group health 
insurance coverage offered by a health insurance issuer in connection 
with a group health plan, the plan or issuer--
            ``(1) shall deny, cancel, or refuse to renew such benefits 
        or such coverage on the basis that a participant or beneficiary 
        (or family member of a participant or beneficiary) refuses 
        testing by a licensed physician to determine whether or not 
such participant or beneficiary is a smoker; and
            ``(2) shall increase the premiums for such benefits or 
        coverage by 10 percent for any participant or beneficiary under 
        the plan on the basis that a licensed physician has determined 
        that the participant or beneficiary (or family member of the 
        participant or beneficiary) is a smoker.
    ``(b) Definition of Family Member.--For purposes of this section 
the term `family member' means, with respect to an individual, a spouse 
or child of the individual.
    ``(c) Notice Under Group Health Plan.--The imposition of the 
requirement of this section shall be treated as a material modification 
in the terms of the plan described in section 102(a)(1), for purposes 
of assuring notice of such requirements under the plan; except that the 
summary description required to be provided under the last sentence of 
section 104(b)(1) with respect to such modification shall be provided 
by not later than 60 days after the first day of the first plan year in 
which such requirement apply.''.
            (B) Section 731(c) of such Act (29 U.S.C. 1191(c)), as 
        amended by section 603(b)(1) of Public Law 104-204, is amended 
        by striking ``section 711'' and inserting ``sections 711 and 
        713''.
            (C) Section 732(a) of such Act (29 U.S.C. 1191a(a)), as 
        amended by section 603(b)(2) of Public Law 104-204, is amended 
        by striking ``section 711'' and inserting ``sections 711 and 
        713''.
            (D) The table of contents in section 1 of such Act is 
        amended by inserting after the item relating to section 712 the 
        following new item:

``Sec. 713. Standard relating to smokers.''.
    (b) Individual Health Insurance.--(1) Part B of title XXVII of the 
Public Health Service Act is amended by inserting after section 2751 
the following new section:

``SEC. 2752. STANDARD RELATING TO SMOKERS.

    ``(a) In General.--The provisions of section 2706(a) shall apply to 
health insurance coverage offered by a health insurance issuer in the 
individual market in the same manner as they apply to health insurance 
coverage offered by a health insurance issuer in connection with a 
group health plan in the small or large group market.
    ``(b) Notice.--A health insurance issuer under this part shall 
comply with the notice requirement under section 713(b) of the Employee 
Retirement Income Security Act of 1974 with respect to the requirements 
referred to in subsection (a) as if such section applied to such issuer 
and such issuer were a group health plan.''.
    (2) Section 2762(b)(2) of such Act (42 U.S.C. 300gg-62(b)(2)), as 
added by section 605(b)(3)(B) of Public Law 104-204, is amended by 
striking ``section 2751'' and inserting ``sections 2751 and 2752''.
    (c) Effective Dates.--(1) Subject to paragraph (3), the amendments 
made by subsection (a) shall apply with respect to group health plans 
for plan years beginning on or after January 1, 1999.
    (2) The amendment made by subsection (b) shall apply with respect 
to health insurance coverage offered, sold, issued, renewed, in effect, 
or operated in the individual market on or after such date.
    (3) In the case of a group health plan maintained pursuant to 1 or 
more collective bargaining agreements between employee representatives 
and 1 or more employers ratified before the date of enactment of this 
Act, the amendments made subsection (a) shall not apply to plan years 
beginning before the later of--
            (A) the date on which the last collective bargaining 
        agreements relating to the plan terminates (determined without 
        regard to any extension thereof agreed to after the date of 
        enactment of this Act), or
            (B) January 1, 1999.
For purposes of subparagraph (A), any plan amendment made pursuant to a 
collective bargaining agreement relating to the plan which amends the 
plan solely to conform to any requirement added by subsection (a) shall 
not be treated as a termination of such collective bargaining 
agreement.
    (d) Coordinated Regulations.--Section 104(1) of Health Insurance 
Portability and Accountability Act of 1996 is amended by striking 
``this subtitle (and the amendments made by this subtitle and section 
401)'' and inserting ``the provisions of part 7 of subtitle B of title 
I of the Employee Retirement Income Security Act of 1974, the 
provisions of parts A and C of title XXVII of the Public Health Service 
Act, and chapter 100 of the Internal Revenue Code of 1986''.
Common Sense Smoking Prevention Act of 1998 - Amends the Public Health Service Act (PHSA) and the Employee Retirement Income Security Act of 1974 (ERISA) to mandate that group and individual health insurance policies and group health plans charge higher premiums for smokers and deny medical care benefits coverage for beneficiaries who refuse testing to determine whether or not they smoke. 
Prescribes certain notice requirements under PHSA and ERISA with respect to such requirements.
Common Sense Smoking Prevention Act of 1998