SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Children's Health Insurance Provides 
Security (CHIPS) Act of 1997''.

SEC. 2. ENCOURAGING STATES THROUGH INCREASED FEDERAL MEDICAL ASSISTANCE 
              PERCENTAGE (FMAP) TO EXPAND MEDICAID COVERAGE OF CHILDREN 
              AND PREGNANT WOMEN.

    (a) Increased FMAP for Medical Assistance for Certain 
Individuals.--Section 1905 of the Social Security Act (42 U.S.C. 1396d) 
is amended--
            (1) in subsection (b), by adding at the end the following 
        new sentence: ``Notwithstanding the first sentence of this 
        subsection, in the case of a State plan that meets the 
        conditions described in subsection (t)(1), with respect to 
        expenditures for medical assistance for individuals within an 
        optional coverage group (as defined in subsection (t)(2)) the 
        Federal medical assistance percentage is equal to the enhanced 
        medical assistance percentage described in subsection 
        (t)(3).''; and
            (2) by adding at the end the following new subsection:
    ``(t)(1) The conditions described in this paragraph for a State 
plan are as follows:
            ``(A) The plan provides (either through exercise of the 
        option under section 1902(l)(1)(D) or authority under section 
        1902(r)(2)) for coverage under section 1902(l)(1)(D) of 
        individuals under 19 years of age, regardless of date of birth.
            ``(B) The plan provides under section 1902(e)(12) for 
        continuous eligibility for a period of 12 months (under 
        subparagraph (A) of such section) of all individuals under 19 
        years of age who are determined to be eligible for benefits 
        under a State plan approved under this title under section 
        1902(a)(10)(A).
    ``(2) For purposes of subsection (b), the term `optional coverage 
group' means individuals described in each of the following 
subparagraphs:
            ``(A) Pregnant women with family income between 133 percent 
        and 150 percent of poverty line.--Women described in 
        subparagraph (A) of section 1902(l)(1) whose family income 
        exceeds 133 percent, but does not exceed 150 percent, of the 
        poverty line for a family of the size involved.
            ``(B) Infants with family income between 133 percent and 
        150 percent of poverty line.--Infants described in subparagraph 
        (B) of section 1902(l)(1) whose family income exceeds 133 
        percent, but does not exceed 150 percent, of the poverty line 
        for a family of the size involved.
            ``(C) Children under 6 years of age with family income 
        between 133 percent and 150 percent of poverty line.--Children 
        described in subparagraph (C) of section 1902(l)(1) whose 
family income exceeds 133 percent, but does not exceed 150 percent, of 
the poverty line for a family of the size involved.
            ``(D) Older children with family income between 100 percent 
        and 150 percent of poverty line.--Children described in 
        subparagraph (D) of section 1902(l)(1), who are not described 
        in any of subclauses (I) through (III) of section 
        1902(a)(10)(A)(i), and whose family income exceeds 100 percent, 
        but does not exceed 150 percent, of the poverty line for a 
        family of the size involved.
    ``(3) The enhanced medical assistance percentage described in this 
paragraph for a State is equal to the Federal medical assistance 
percentage (as defined in the first sentence of subsection (b)) for the 
State increased (but not above 90 percent) by the number of percentage 
points equal to 30 percent of the number of percentage points by which 
(A) such Federal medical assistance percentage for the State, is less 
than (B) 100 percent.''.
    (b) State Option To Expand Eligibility to 150 Percent of Poverty 
Line for Children Over 1 Year of Age.--Section 1902(l)(2) of such Act 
(42 U.S.C. 1396a(l)(2)) is amended--
            (1) in subparagraph (B), by striking ``equal to 133 
        percent'' and inserting ``a percentage (specified by the State 
        and not less than 133 percent and not more than 150 percent)'', 
        and
            (2) in subparagraph (C), by striking ``equal to 100 
        percent'' and inserting ``a percentage (specified by the State 
        and not less than 100 percent and not more than 150 percent)''.
    (c) Clarification of State Option To Cover All Children Under 19 
Years of Age.--Section 1902(l)(1)(D) of such Act (42 U.S.C. 
1396a(l)(1)(D)) is amended by inserting ``(or, at the option of a 
State, after any earlier date)'' after ``children born after September 
30, 1983''.
    (d) State Option of Continuous Eligibility for 12 Months.--Section 
1902(e) of such Act (42 U.S.C. 1396a(e)) is amended by adding at the 
end the following new paragraph:
    ``(12) At the option of the State, the plan may provide that an 
individual who is under an age specified by the State (not to exceed 19 
years of age) and who is determined to be eligible for benefits under a 
State plan approved under this title under subsection (a)(10)(A) shall 
remain eligible for those benefits until the earlier of--
            ``(A) the end of a period (not to exceed 12 months) 
        following the determination; or
            ``(B) the time that the individual exceeds that age.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to medical assistance for items and services furnished on or 
after January 1, 1998.

SEC. 3. EMPLOYER CONTRIBUTIONS TO PREMIUMS.

    (a) General Rule.--Any employer which elects to make employer 
contributions on behalf of an individual who is an employee of such 
employer, or who is a dependent of such employee, for health insurance 
coverage shall not condition, or vary, such contributions with respect 
to any such individual by reason of such individual's status as an 
individual eligible for medical assistance under a State plan under 
title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).
    (b) Elimination of Contributions.--An employer shall not be treated 
as failing to meet the requirements of subsection (a) if the employer 
ceases to make employer contributions for health insurance coverage for 
all its employees.
    (c) Enforcement.--The enforcement provisions applicable to group 
health insurance coverage under the amendments made by section 
101(e)(2) of the Health Insurance Portability and Accountability Act of 
1996 (Public Law 104-191; 110 Stat. 1952) shall apply with respect to 
an employer that violates the provisions of this section in the same 
manner as such provisions apply to employers under such amendments.

SEC. 4. GRANT PROGRAM TO PROMOTE OUTREACH EFFORTS.

    (a) Authorization of Appropriations.--There are authorized to be 
appropriated, for each fiscal year beginning with fiscal year 1998 to 
the Secretary of Health and Human Services, $25,000,000 for grants to 
States, localities, and nonprofit entities to promote outreach efforts 
to enroll eligible children under the medicaid program under title XIX 
of the Social Security Act (42 U.S.C. 1396 et seq.) and related 
programs.
    (b) Use of Funds.--Funds under this section may be used to 
reimburse States, localities, and nonprofit entities for additional 
training and administrative costs associated with outreach activities. 
Such activities include the following:
            (1) Use of a common application form for federal child 
        assistance programs.--Implementing use of a single application 
        form (established by the Secretary and based on the model 
        application forms developed under subsections (a) and (b) of 
        section 6506 of the Omnibus Budget Reconciliation Act of 1989 
        (42 U.S.C. 701 note; 1396a note)) to determine the eligibility 
        of a child or the child's family (as applicable) for assistance 
        or benefits under the medicaid program and under other Federal 
        child assistance programs (such as the temporary assistance for 
        needy families program under part A of title IV of the Social 
        Security Act (42 U.S.C. 601 et seq.), the food stamp program, 
        as defined in section 3(h) of the Food Stamp Act of 1977 (7 
        U.S.C. 2012(h)), and the State program for foster care 
        maintenance payments and adoption assistance payments under 
        part E of title IV of the Social Security Act (42 U.S.C. 670 et 
        seq.)).
            (2) Expanding outstationing of eligibility personnel.--
        Providing for the stationing of eligibility workers at sites, 
        such as hospitals and health clinics, at which children receive 
        health care or related services.
    (c) Application, Etc.--Funding shall be made available under this 
section only upon the approval of an application by a State, locality, 
or nonprofit entity for such funding and only upon such terms and 
conditions as the Secretary specifies.
    (d) Administration.--The Secretary may administer the grant program 
under this section through the identifiable administrative unit 
designated under section 509(a) of the Social Security Act (42 U.S.C. 
709(a)) to promote coordination of medicaid and maternal and child 
health activities and other child health related activities.
Children's Health Insurance Provides Security (CHIPS) Act of 1997 - Amends title XIX (Medicaid) of the Social Security Act to offer an enhanced Federal match to States with Medicaid plans that provide for: (1) coverage of pregnant women, infants, and children under age six with family income between 133 and 150 percent of the poverty line, as well as older children with family income between 100 and 150 percent of the poverty line; and (2) continuous eligibility for a 12-month period for children under any age the State specifies (up to age 19). Gives States the option to:  (1) expand Medicaid eligibility to 150 percent of the poverty line for children over one year of age; and (2) extend coverage to all children under age 19. 
Prohibits any employer which elects to make employer health insurance contributions on behalf of an employee (or dependent) from conditioning, or varying, such contributions with respect to any such individual by reason of his or her eligibility for Medicaid. 
Authorizes appropriations to the Secretary of Health and Human Services for grants to States, localities, and nonprofit entities to promote outreach efforts to enroll eligible children under Medicaid and related programs.
Children's Health Insurance Provides Security (CHIPS) Act of 1997