39–006 

109TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 109–88 

SERVICEMEMBERS’ HEALTH INSURANCE PROTECTION 

ACT OF 2005 

MAY 19, 2005.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. BUYER, from the Committee on Veterans’ Affairs, 

submitted the following 

R E P O R T 

[To accompany H.R. 2046] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Veterans’ Affairs, to whom was referred the 

bill (H.R. 2046) to amend the Servicemembers Civil Relief Act to 

limit premium increases on reinstated health insurance on 

servicemembers who are released from active military service, and 

for other purposes, having considered the same, report favorably 

thereon with an amendment and recommend that the bill as 

amended do pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Servicemembers’ Health Insurance Protection Act 

of 2005’’. 

SEC. 2. LIMITATION ON PREMIUM INCREASES FOR REINSTATED HEALTH INSURANCE OF 

SERVICEMEMBERS RELEASED FROM ACTIVE MILITARY SERVICE. 

(a) PREMIUM PROTECTION.—Section 704 of the Servicemembers Civil Relief Act (50 

U.S.C. App. 594) is amended by adding at the end the following new subsection: 

‘‘(e) LIMITATION ON PREMIUM INCREASES.— 

‘‘(1) PREMIUM PROTECTION.—The amount of the premium for health insurance 

coverage that was terminated by a servicemember and required to be reinstated 

under subsection (a) may not be increased, for the balance of the period for 

which coverage would have been continued had the coverage not been terminated, to an amount greater than the amount chargeable for such coverage before the termination. 

‘‘(2) INCREASES OF GENERAL APPLICABILITY NOT PRECLUDED.—Paragraph (1) 

does not prevent an increase in premium to the extent of any general increase 

in the premiums charged by the carrier of the health care insurance for the 

same health insurance coverage for persons similarly covered by such insurance 

during the period between the termination and the reinstatement.’’. 

2 

(b) TECHNICAL AMENDMENT.—Subsection (b)(3) of such section is amended by 

striking ‘‘if the’’ and inserting ‘‘in a case in which the’’. 

SEC. 3. PRESERVATION OF EMPLOYER-SPONSORED HEALTH PLAN COVERAGE FOR CERTAIN 

RESERVE-COMPONENT MEMBERS WHO ACQUIRE TRICARE ELIGIBILITY. 

(a) CONTINUATION OF COVERAGE.—Subsection (a)(1) of section 4317 of title 38, 

United States Code, is amended by inserting after ‘‘by reason of service in the uniformed services,’’ the following: ‘‘or such person becomes eligible for medical and 

dental care under chapter 55 of title 10 by reason of subsection (d) of section 1074 

of that title,’’. 

(b) REINSTATEMENT OF COVERAGE.—Subsection (b) of such section is amended—

(1) in paragraph (1)—

(A) by inserting after ‘‘by reason of service in the uniformed services,’’ the 

following: ‘‘or by reason of the person’s having become eligible for medical 

and dental care under chapter 55 of title 10 by reason of subsection (d) of 

section 1074 of that title,’’; and 

(B) by inserting ‘‘or eligibility’’ before the period at the end of the first 

sentence; and 

(2) by adding at the end the following new paragraph: 

‘‘(3) In the case of a person whose coverage under a health plan is terminated by 

reason of the person having become eligible for medical and dental care under chapter 55 of title 10 by reason of subsection (d) of section 1074 of that title but who 

subsequently does not commence a period of active duty under the order to active 

duty that established such eligibility because the order is canceled before such active duty commences, the provisions of paragraph (1) relating to any exclusion or 

waiting period in connection with the reinstatement of coverage under a health plan 

shall apply to such person’s continued employment, upon the termination of such 

eligibility for medical and dental care under chapter 55 of title 10 that is incident 

to the cancellation of such order, in the same manner as if the person had become 

reemployed upon such termination of eligibility.’’. 

SEC. 4. TECHNICAL CORRECTIONS TO VETERANS BENEFITS IMPROVEMENT ACT OF 2004. 

(a) CORRECTIONS.—Section 2101 of title 38, United States Code, as amended by 

section 401 of the Veterans Benefits Improvement Act of 2004 (Public Law 108–454; 

118 Stat. 3614), is amended—

(1) by redesignating subsection (c) as subsection (d); 

(2) by inserting after subsection (b) a new subsection (c) consisting of the text 

of subsection (c) of such section 2101 as in effect immediately before the enactment of such Act, modified—

(A) in paragraph (1)—

(i) in the first sentence, by striking ‘‘paragraph (1), (2), or (3)’’ and 

inserting ‘‘subparagraph (A), (B), (C), or (D) of paragraph (2)’’; and 

(ii) in the second sentence, by striking ‘‘the second sentence’’ and inserting ‘‘paragraph (3)’’; and 

(B) in paragraph (2)—

(i) in the first sentence, by striking ‘‘paragraph (1)’’ and inserting 

‘‘paragraph (2)’’; and 

(ii) in the second sentence, by striking ‘‘paragraph (2)’’ and inserting 

‘‘paragraph (3)’’; and 

(3) in subsection (a)(3), by striking ‘‘subsection (c)’’ in the matter preceding 

subparagraph (A) and inserting ‘‘subsection (d)’’. 

(b) EFFECTIVE DATE.—The amendments made by subsection (a) shall take effect 

as of December 10, 2004, as if enacted immediately after the enactment of the Veterans Benefits Improvement Act of 2004 on that date. 

SEC. 5. NOTIFICATION TO MEMBER’S SPOUSE OR NEXT OF KIN OF CERTAIN ELECTIONS 

UNDER SERVICEMEMBERS’ GROUP LIFE INSURANCE PROGRAM. 

(a) REPEAL.—Subsections (f) and (g) of section 1012 of division A of the Emergency 

Supplemental Appropriations Act for Defense, the Global War on Terror, and Tsunami Relief Act, 2005 (Public Law 109–13), and the amendments made by those 

subsections, are repealed, and sections 1967 and 1970 of title 38, United States 

Code, shall be applied as if those subsections had not been enacted. 

(b) NOTIFICATION REQUIRED.—Section 1967 of title 38, United States Code, is 

amended by adding at the end the following new subsection: 

‘‘(f)(1)(A) Whenever a member who is eligible for insurance under this subchapter 

executes a life insurance option specified in subparagraph (B), the Secretary concerned shall notify the member’s spouse or, if the member is unmarried, the member’s next of kin, in writing, of the execution of that option. 

‘‘(B) A life insurance option referred to in subparagraph (A) is any of the following: 

3 

‘‘(i) An election under subsection (a)(2)(A) not to be insured under this subchapter. 

‘‘(ii) An election under subsection (a)(3)(B) for insurance of the member in an 

amount that is less than the maximum amount provided under subsection 

(a)(3)(A)(i). 

‘‘(iii) An application under subsection (c) for insurance coverage under this 

subchapter or for a change in the amount of such insurance coverage. 

‘‘(iv) In the case of a married member, a designation under section 1970(a) 

of this title of any person other than the spouse or a child of the member as 

the beneficiary of the member for any amount of insurance under this subchapter. 

‘‘(2) Whenever an unmarried member who is eligible for insurance under this subchapter marries, the Secretary concerned shall notify the member’s spouse in writing as to whether the member is insured under this subchapter. In the case of a 

member who is so insured, the Secretary shall include with such notification—

‘‘(A) if the member has made an election described in paragraph (1)(B)(ii), notice that the amount of such insurance is less than the maximum amount provided under subsection (a)(3)(A)(i); and 

‘‘(B) if the member has designated a beneficiary other than the spouse or a 

child of the member for any amount of such insurance, notice that such a designation has been made. 

‘‘(3)(A) Notification of a spouse under paragraph (1) or (2), or of any other person 

under paragraph (1), for purposes of this subsection shall consist of a good faith effort to provide information to the spouse or other person at the last address of the 

spouse or other person known to the Secretary concerned. 

‘‘(B) Failure to provide such notification, or to provide such notification in a timely 

manner, does not affect the validity of any life insurance option referred to in paragraph (1)(B).’’. 

INTRODUCTION

The reported bill reflects the Committee’s consideration of H.R. 

2046, as amended. On May 4, 2005, the Subcommittee on Economic 

Opportunity held a hearing on four bills, including H.R. 2046, the 

Servicemembers’ Health Insurance Protection Act of 2005, introduced on May 3, 2005, by the Chairman and Ranking Member of 

the Committee, Honorable Steve Buyer and Honorable Lane Evans, 

respectively, and the Chairman and Ranking Member of the Subcommittee on Economic Opportunity, Honorable John Boozman, 

and Honorable Stephanie Herseth, respectively. 

On May 5, 2005, the Subcommittee on Economic Opportunity 

met and ordered H.R. 2046 reported favorably to the full Committee by unanimous voice vote. 

On May 11, 2005, the full Committee met and ordered H.R. 2046, 

as amended, reported favorably to the House by unanimous voice 

vote. 

SUMMARY OF THE REPORTED BILL

H.R. 2046, as amended, would: 

1. Amend the Servicemembers Civil Relief Act to limit premium 

increases on reinstated health insurance coverage of 

servicemembers who are released from active duty. 

2. Amend the Uniformed Services Employment and Reemployment Rights Act (USERRA) to preserve employer-sponsored health 

plan reinstatement rights for certain Reserve-component members 

who acquire TRICARE eligibility prior to entering active duty. 

3. Make a technical correction to Public Law 108–454, the Veterans Benefits Improvement Act of 2004. 

4. Make a correction to the Servicemembers’ Group Life Insurance provisions of Public Law 109–13, the Emergency SuppleVerDate Aug 04 2004 22:55 May 20, 2005 Jkt 039006 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\HR088.XXX HR088
4 

mental Appropriations Act for Defense, the Global War on Terror, 

and Tsunami Relief Act, 2005. 

BACKGROUND AND DISCUSSION

Limitation on premium increases for reinstated health insurance 

of servicemembers released from active military service.—Section 2 

of the bill would amend section 704 of the Servicemembers Civil 

Relief Act (SCRA) to limit premium increases on reinstated health 

insurance coverage of servicemembers who are released from active 

duty. Section 704 provides that a servicemember who is ordered to 

active duty is entitled upon release from active duty to reinstatement of any health insurance in effect on the day before such service commenced. This amendment would prohibit any increase in 

premiums for such health insurance for the balance of the period 

for which coverage would have been continued had the coverage 

not been terminated. However, a health care insurance carrier 

would be allowed to increase a servicemember’s premium if such a 

general premium increase was implemented for persons similarly 

covered during the period between the termination and the reinstatement. 

Section 2 would clearly prohibit certain premium increases that 

have been encountered by some servicemembers returning from active duty. Section 704 of the SCRA currently contains no express 

provision regarding premium increases. While the Committee believes that the basic reinstatement entitlement implies that premiums be reinstated at the same rate in effect the day before the 

servicemember entered active duty, the need for legislative clarification was brought to the attention of the Committee by the Department of Defense after being identified by legal assistance programs of the military services. This amendment to section 704 

would ensure servicemembers are treated fairly upon reinstatement of their health insurance and are not discouraged by premium increases from exercising their reinstatement entitlement 

rights. 

Preservation of employer-sponsored health plan coverage for certain reserve-component members who acquire TRICARE eligibility.—Section 3 of the bill would amend section 4317 of the Uniformed Services Employment and Reemployment Rights Act 

(USERRA) to preserve employer-sponsored health plan reinstatement rights for certain Reserve-component members who prior to 

entering active duty acquire TRICARE eligibility under section 

1074(d) of title 10, United States Code. This option became available by an amendment to the TRICARE authority enacted on November 24, 2003. H.R. 2046, as amended, would conform the health 

insurance reinstatement right under USERRA to the change in 

TRICARE. 

According to the Department of Labor, under existing law, an 

employer is only required to provide employees returning from active duty with the same employer-sponsored health benefits they 

had when they reported for active duty. Unless the employer voluntarily chooses to allow immediate reinstatement of coverage, an 

employee would be required to wait for the next open enrollment 

opportunity provided by the employer and could be subject to any 

exclusion for preexisting conditions that may be imposed on new 

enrollees. This amendment to section 4317 of USERRA would cover 

5 

both employees who did not actually report because of cancellation 

of active duty orders and employees who served a period of active 

duty. 

SECTION-BY-SECTION ANALYSIS

Section 1 of the bill would provide that this Act may be cited as 

the ‘‘Servicemembers’ Health Insurance Protection Act of 2005.’’ Section 2 of the bill would amend section 704 of the 

Servicemembers Civil Relief Act (50 U.S.C. App. 594) by adding at 

the end a new subsection (e). The new subsection (e) would limit 

health insurance premium increases by limiting the amount of the 

premium for health insurance coverage that was terminated by a 

servicemember. This limitation applies for the balance of the period 

for which coverage would have been continued had the coverage 

not been terminated. The amount chargeable for such coverage 

may not exceed the amount charged for coverage before the termination. This new subsection would allow an increase in premium 

to the extent of any general increase in the premiums charged by 

the insurance carrier for persons similarly covered by such insurance during the period between termination and the reinstatement. 

Section 3(a) of the bill would preserve entitlement to employersponsored health plan coverage for certain reserve-component 

members who acquire TRICARE eligibility. This section would continue coverage by amending subsection (a)(1) of section 4317 of title 

38, United States Code, by inserting after ‘‘by reason of service in 

the uniformed services,’’ the following: ‘‘or such person becomes eligible for medical and dental care under chapter 55 of title 10 by 

reason of subsection (d) of section 1074 of that title,’’. As a result, 

any servicemember who becomes eligible for TRICARE benefits 

under title 10 would be entitled to have the employer-sponsored 

health plan reinstated following release from active duty. 

Section 3(b)(1) of the bill would preserve employer-sponsored 

health plan coverage for certain reserve-component members who 

acquire TRICARE eligibility by amending subsection (b)(1) of section 4317 of title 38, United States Code, by (A) inserting after ‘‘by 

reason of service in the uniformed services,’’ the following: ‘‘or such 

person becomes eligible for TRICARE under chapter 55 of title 10 

by reason of subsection (d) of section 1074 of that title,’’; and (B) 

inserting ‘‘or eligibility’’ before the period at the end of the first 

sentence. 

Section 3(b)(2) of the bill would preserve employer-sponsored 

health plan coverage for certain reserve-component members who 

acquire TRICARE eligibility. This section reinstates coverage by 

adding at the end of subsection (b) of section 4317 of title 38, 

United States Code, a new paragraph (3). 

Paragraph (3) of the bill would protect a person who chooses to 

terminate coverage under the employer-sponsored health plan by 

reason of the person having become eligible for TRICARE under 

chapter 55 of title 10 by reason of subsection (d) of section 1074 of 

that title but who subsequently does not commence a period of active duty because the order is canceled before such active duty commences. In such cases, the provisions of subsection (b) relating to 

any exclusion or waiting period in connection with the reinstatement of coverage under an employer-sponsored health plan would 

apply to such person’s continued employment, upon the termiVerDate Aug 04 2004 22:55 May 20, 2005 Jkt 039006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR088.XXX HR088
6 

nation of such eligibility for TRICARE under chapter 55 of title 10, 

in the same manner as if the person had actually reported and was 

reemployed following release from active duty. 

Section 4(a) of the bill would make a technical correction to section 2101 of title 38, United States Code, as amended by section 

401 of the Veterans Benefits Improvement Act of 2004 (Public Law 

108–454). 

Section 4(b) of the bill would make section 4(a) effective as of December 10, 2004, as if enacted immediately after the enactment of 

the Veterans Benefits Improvements Act of 2004. 

Section 5(b) of the bill would amend section 1967 of title 38, 

United States Code, to add a new requirement requiring notification of elections under the Servicemembers’ Group Life Insurance 

program. The Secretary concerned would be required to notify, in 

writing, the servicemember’s spouse or, if unmarried, the 

servicemember’s next of kin, when certain life insurance options 

have been executed. The notification would include whether the 

servicemember (1) declined to be insured under section 1967 of title 

38, United States Code, (2) elected an amount of insurance that is 

less than the maximum amount, (3) made any change in the 

amount of coverage previously elected, and (4) in the case of a married servicemember, the designation under section 1970(a) of title 

38, United States Code, of any person other than the spouse or 

child of the servicemember as beneficiary. When an unmarried 

servicemember who is eligible for insurance marries, the Secretary 

concerned would be required to notify the spouse if (1) the 

servicemember’s coverage amount is less than the maximum, and 

(2) someone other than the spouse or child has been designated the 

beneficiary. The Secretary concerned would be required to make a 

good faith effort to provide information to the spouse or other person at the last known address, but failure to provide notification 

in a timely manner would not affect the validity of any life insurance option. 

PERFORMANCE GOALS AND OBJECTIVES

The reported bill would authorize additional protections to Reserve and National Guard members under the Servicemembers 

Civil Relief Act and the Uniformed Services Employment and Reemployment Rights Act. The effectiveness and adequacy of these 

rights and protections with SCRA and USERRA are subject to the 

Committee’s regular oversight. 

STATEMENTS OF THE VIEWS OF THE ADMINISTRATION

STATEMENT OF JOHN M. MCWILLIAM, DEPUTY ASSISTANT SECRETARY OF LABOR FOR VETERANS’ EMPLOYMENT AND

TRAINING SERVICE, U.S. DEPARTMENT OF LABOR

Chairman Boozman, Ranking Member Herseth, and distinguished members of the subcommittee: 

It is my honor to appear before this subcommittee today 

on behalf of Secretary Elaine Chao. My testimony today 

covers four areas: H.R. 419, the ‘‘Hire Veterans Act’’ (a bill 

to extend the authorization of the President’s National 

Hire Veterans Committee (PNHVC)); and three draft bills: 

the ‘‘Homeless Veterans Reintegration Program ReauthorVerDate Aug 04 2004 22:55 May 20, 2005 Jkt 039006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6969 E:\HR\OC\HR088.XXX HR088
7 

ization Act of 2005,’’ the ‘‘Servicemembers’’ Health Insurance Protection Act of 2005,’’ and the ‘‘Servicemembers 

Taxation Protection Act of 2005.’’

* * * * * * * 

The Servicemembers’ Health Insurance Protection Act of 

2005 extends USERRA’s continuation coverage protections 

to individuals subject to a delayed-effective-date activeduty order who elect TRICARE coverage before they commence military service. The draft bill also protects such 

persons against the risk of an exclusion or waiting period 

upon reinstatement in their employment-based health plan 

if the duty orders are cancelled. The proposal makes clear 

that the employment-based health plan may not impose an 

exclusion or waiting period on such employees when they 

seek reinstatement in the plan, either upon reemployment 

following military service or in the situation where their 

civilian employment is continued because the military orders were cancelled prior to mobilization. 

However, the draft bill does not address the situation of 

service members who continue TRICARE coverage after 

reemployment, rather than promptly seeking reinstatement under their employment-based health plan. Section 

4317(b)(1) of USERRA provides that an exclusion or waiting period may not be imposed in connection with the reinstatement of a service member in the employment-based 

health plan upon reemployment, but does not clearly cover 

the situation where the service member seeks reinstatement in the employment-based plan at a point in time 

after he or she is reemployed. We would like to offer to 

provide technical assistance to the committee to ensure 

that any amendment addresses both the front-end and 

back-end issues relating to extended TRICARE coverage 

under section 4317. 

* * * * * * * 

TESTIMONY OF CRAIG W. DUEHRING, PRINCIPAL DEPUTY

ASSISTANT SECRETARY OF DEFENSE RESERVE AFFAIRS

Mr. Chairman and members of the Subcommittee, thank 

you for giving me the opportunity to come before you this 

afternoon to discuss several proposed improvements to the 

Servicemembers Civil Relief Act (SCRA) and the Uniformed Services Employment and Reemployment Rights 

Act (USERRA). 

* * * * * * * 

The Department of Defense supports enactment of the 

Servicemembers’ Health Insurance Protection Act of 2005 

and the Servicemembers’ Taxation Protection Act of 2005, 

both of which would amend several provisions of the SCRA 

to reflect our experience with the SCRA during its first 

seventeen months. The proposed amendments in both 

draft bills address problems that have been encountered 

by servicemembers and brought to the attention of the Department through the legal assistance programs of the 

8 

Military Services. Legal assistance attorneys play a key 

role in ensuring that servicemembers are able to fully exercise the rights and protections afforded by the SCRA, 

and we have been attentive to their experiences during the 

first year under the new law. 

* * * * * * * 

The Servicemembers’ Health Insurance Protection Act of 

2005 addresses problems we have noted in the SCRA and 

in USERRA, both relating to health insurance. Section 2 

of that Act would amend section 704 of the SCRA (50 

U.S.C. App. § 594) to prevent unfair rate increases in a returning servicemember’s health insurance. The SCRA and 

USERRA both guarantee to a servicemember who is returning to civilian life the right to reinstate civilian health 

insurance policies he or she may have had before departing for military service. The SCRA is silent, however, as 

to the rate at which such reinstated coverage is available. 

Section 2 of the Servicemembers’ Health Insurance Protection Act would require reinstated coverage to be made 

available at either the same rate as pre-service coverage, 

or at a rate no higher than general increases charged by 

the carrier for similar health insurance. This prevents the 

carrier from offering reinstated coverage at a rate so high 

as to discourage a returning servicemember from using the 

reinstated coverage. I would note that section 703 of the 

SCRA (50 U.S.C. App. § 593) provides exactly this type of 

protection for doctors, dentists, and other health care professionals, with respect to professional liability insurance. 

Section 2 of the draft bill would provide servicemember patients the same cost guarantees that their doctors now 

enjoy under the SCRA. 

Section 3 of the Servicemembers’ Health Insurance Protection Act of 2005 offers a technical correction to address 

two groups of servicemembers who fall into gaps in coverage provided by the Uniformed Services Employment 

and Reemployment Rights Act’s (USERRA’s) right to immediate reinstatement of health coverage. First, some reservists who are notified or alerted that they may be called 

to active duty choose to terminate their employer-sponsored health coverage early (before entering military service) and enroll in the military TRICARE plan immediately 

upon notification. Since such reservists technically have no 

employer-sponsored health coverage when they actually 

leave to perform military duty, they are not entitled to immediate reinstatement when they return from military 

service. Second, other reservists who are notified or alerted 

that they may be called to active duty are not ultimately 

brought onto active duty. Under existing law, such reservists who terminate employer-sponsored health coverage 

are not entitled to elect immediate reinstatement, since 

they actually do not go onto active duty. (The right of immediate reinstatement is predicated on serving on military 

duty for some length of time.) Section 3 of the bill corrects 

these gaps in coverage and makes clear that both of these 

groups of reservists are entitled to immediate reinstateVerDate Aug 04 2004 22:55 May 20, 2005 Jkt 039006 PO 00000 Frm 00008 Fmt 6659 Sfmt 6969 E:\HR\OC\HR088.XXX HR088
9 

ment in employer-sponsored health plans under 38 U.S.C. 

§ 4317. Immediate reinstatement under § 4317 is important 

because it prevents gaps in coverage and the potential exclusions for so-called ‘‘pre-existing’’ conditions that such 

gaps in coverage may create. 

* * * * * * * 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

The following letter was received from the Congressional Budget 

Office concerning the cost of the reported bill: 

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, May 16, 2005. 

Hon. STEVE BUYER, 

Chairman, Committee on Veterans’ Affairs, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 2046, the 

Servicemembers’ Health Insurance Protection Act of 2005. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Michelle S. Patterson. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN, Director. 

Enclosure. 

H.R. 2046—Servicemembers’ Health Insurance Protection Act of 

2005 

H.R. 2046 would limit premium increases on health insurance for 

reservists who return to their civilian jobs after serving on active 

duty and ensure that reservists whose activation is cancelled before 

they report for duty can reinstate their health care coverage. It also 

would allow disabled servicemembers to qualify for a housing grant 

provided by the Department of Veterans Affairs (VA) before being 

discharged from active duty. Finally, the bill would modify a requirement in the Emergency Supplemental Appropriations Act for 

Defense, the Global War on Terror, and Tsunami Relief Act, 2005 

(Public Law 109–113) regarding elections of servicemembers to reduce or decline insurance. 

The VA currently administers two grant programs (with direct 

spending authority) to assist severely disabled veterans in acquiring housing that is adapted to their disabilities, or in modifying 

their existing housing. The maximum amounts of these two grants 

are $50,000 and $10,000, respectfully. Section 4 would allow members of the armed forces who become severely disabled to receive 

these grants while still on active duty. Because the eligibility requirements for these grants are very restrictive, CBO believes that 

very few servicemembers would qualify, and that these 

servicemembers would be separating from the military within 12 

months of the time they become eligible for these grants. Thus, this 

section would simply shift their eligibility forward by six months, 

on average. On that basis, CBO estimates enacting this bill would 

increase direct spending for these grants by less than $500,000 

10 

over the 2006–2015 period. (Enacting the bill would have no effect 

on revenues.) 

H.R. 2046 contains both intergovernmental and private-sector 

mandates as defined in the Unfunded Mandates Reform Act 

(UMRA). Current law imposes a mandate on public and privatesector entities that provide health insurance by requiring them to 

allow servicemembers and reservists on active duty to continue 

policies or reinstate those policies without delay when they return 

from service. Section 2 would prohibit those entities that provide 

insurance from raising premiums for servicemembers when they 

return from active-duty service and choose to reinstate or continue 

previously held policies. 

Section 3 of this bill would expand current law to require that 

certain reservists whose notice for active duty is later canceled are 

also eligible to continue or reinstate health policies without delay. 

That expansion would increase the cost for both public and privatesector providers to comply with an existing mandate. 

Based on information from the Department of Defense and industry representatives, CBO estimates that only a small number of 

servicemembers would benefit from those provisions. The total direct cost for providers to comply with those mandates, thus would 

be minimal and well below the annual thresholds established by 

UMRA ($62 million in 2005 and $123 million in 2005, respectively, 

adjusted annually for inflation). 

This estimate was prepared by Michelle S. Patterson, and approved by Peter H. Fontaine, Deputy Assistant Director for Budget 

Analysis. 

STATEMENT OF FEDERAL MANDATES

The preceding Congressional Budget Office (CBO) cost estimate 

states that H.R. 2046 contains both intergovernmental and privatesector mandates as defined in the Unfunded Mandates Reform Act 

(UMRA). However, according to CBO, because of the small number 

of servicemembers who would benefit from the provisions, the costs 

for compliance would be well below the annual thresholds established by UMRA. 

STATEMENT OF CONSTITUTIONAL AUTHORITY

Pursuant to Article I, section 8 of the United States Constitution, 

the reported bill is authorized by Congress’ power to ‘‘provide for 

the common Defense and general Welfare of the United States.’’

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

SECTION 704 OF THE SERVICEMEMBERS CIVIL RELIEF 

ACT 

SEC. 704. HEALTH INSURANCE REINSTATEMENT. 

(a) * * * 

11 

(b) NO EXCLUSION OR WAITING PERIOD.—The reinstatement of 

health care insurance coverage for the health or physical condition 

of a servicemember described in subsection (a), or any other person 

who is covered by the insurance by reason of the coverage of the 

servicemember, shall not be subject to an exclusion or a waiting period, if—

(1) * * * 

* * * * * * * 

(3) øif the¿ in a case in which the condition relates to the 

servicemember, the condition has not been determined by the 

Secretary of Veterans Affairs to be a disability incurred or aggravated in the line of duty (within the meaning of section 105 

of title 38, United States Code). 

* * * * * * * 

(e) LIMITATION ON PREMIUM INCREASES.— (1) PREMIUM PROTECTION.—The amount of the premium for 

health insurance coverage that was terminated by a 

servicemember and required to be reinstated under subsection 

(a) may not be increased, for the balance of the period for which 

coverage would have been continued had the coverage not been 

terminated, to an amount greater than the amount chargeable 

for such coverage before the termination. 

(2) INCREASES OF GENERAL APPLICABILITY NOT PRECLUDED.— Paragraph (1) does not prevent an increase in premium to the 

extent of any general increase in the premiums charged by the 

carrier of the health care insurance for the same health insurance coverage for persons similarly covered by such insurance 

during the period between the termination and the reinstatement. 

TITLE 38, UNITED STATES CODE 

* * * * * * * 

PART II—GENERAL BENEFITS 

* * * * * * * 

CHAPTER 19—INSURANCE 

* * * * * * * 

SUBCHAPTER III—SERVICEMEMBERS’ GROUP LIFE 

INSURANCE 

* * * * * * * 

§ 1967. Persons insured; amount 

(a) * * * 

* * * * * * * 

(f)(1)(A) Whenever a member who is eligible for insurance under 

this subchapter executes a life insurance option specified in subparagraph (B), the Secretary concerned shall notify the member’s 

spouse or, if the member is unmarried, the member’s next of kin, in 

writing, of the execution of that option. 

12 

(B) A life insurance option referred to in subparagraph (A) is any 

of the following: 

(i) An election under subsection (a)(2)(A) not to be insured 

under this subchapter. 

(ii) An election under subsection (a)(3)(B) for insurance of the 

member in an amount that is less than the maximum amount 

provided under subsection (a)(3)(A)(i). 

(iii) An application under subsection (c) for insurance coverage under this subchapter or for a change in the amount of 

such insurance coverage. 

(iv) In the case of a married member, a designation under 

section 1970(a) of this title of any person other than the spouse 

or a child of the member as the beneficiary of the member for 

any amount of insurance under this subchapter. 

(2) Whenever an unmarried member who is eligible for insurance 

under this subchapter marries, the Secretary concerned shall notify 

the member’s spouse in writing as to whether the member is insured 

under this subchapter. In the case of a member who is so insured, 

the Secretary shall include with such notification— (A) if the member has made an election described in paragraph (1)(B)(ii), notice that the amount of such insurance is less 

than the maximum amount provided under subsection 

(a)(3)(A)(i); and 

(B) if the member has designated a beneficiary other than the 

spouse or a child of the member for any amount of such insurance, notice that such a designation has been made. 

(3)(A) Notification of a spouse under paragraph (1) or (2), or of 

any other person under paragraph (1), for purposes of this subsection shall consist of a good faith effort to provide information to 

the spouse or other person at the last address of the spouse or other 

person known to the Secretary concerned. 

(B) Failure to provide such notification, or to provide such notification in a timely manner, does not affect the validity of any life 

insurance option referred to in paragraph (1)(B). 

* * * * * * * 

CHAPTER 21—SPECIALLY ADAPTED HOUSING FOR 

DISABLED VETERANS 

* * * * * * * 

§ 2101. Veterans eligible for assistance 

(a) ACQUISITION OF HOUSING WITH SPECIAL FEATURES.—(1) 

* * * 

* * * * * * * 

(3) The regulations prescribed under øsubsection (c)¿ subsection 

(d) shall require that assistance under paragraph (1) may be provided to a veteran only if the Secretary finds that— (A) * * * 

* * * * * * * 

(c)(1) The Secretary may provide assistance under subsection (a) 

to a member of the Armed Forces serving on active duty who is suffering from a disability described in subparagraph (A), (B), (C), or 

(D) of paragraph (2) of that subsection if such disability is the result 

13 

of an injury incurred or disease contracted in or aggravated in line 

of duty in the active military, naval, or air service. Such assistance 

shall be provided to the same extent as assistance is provided under 

that subsection to veterans eligible for assistance under that subsection and subject to the requirements of paragraph (3) of that subsection. 

(2) The Secretary may provide assistance under subsection (b) to 

a member of the Armed Forces serving on active duty who is suffering from a disability described in subparagraph (A) or (B) of 

paragraph (2) of that subsection if such disability is the result of 

an injury incurred or disease contracted in or aggravated in line of 

duty in the active military, naval, or air service. Such assistance 

shall be provided to the same extent as assistance is provided under 

that subsection to veterans eligible for assistance under that subsection and subject to the requirements of paragraph (3) of that subsection. 

ø(c)¿ (d) REGULATIONS.—Assistance under this section shall be 

provided in accordance with such regulations as the Secretary may 

prescribe. 

* * * * * * * 

PART III—READJUSTMENT AND RELATED BENEFITS 

* * * * * * * 

CHAPTER 43—EMPLOYMENT AND REEMPLOYMENT 

RIGHTS OF MEMBERS OF THE UNIFORMED SERVICES 

* * * * * * * 

SUBCHAPTER II—EMPLOYMENT AND REEMPLOYMENT 

RIGHTS AND LIMITATIONS; PROHIBITIONS 

* * * * * * * 

§ 4317. Health plans 

(a)(1) In any case in which a person (or the person’s dependents) 

has coverage under a health plan in connection with the person’s 

position of employment, including a group health plan (as defined 

in section 607(1) of the Employee Retirement Income Security Act 

of 1974), and such person is absent from such position of employment by reason of service in the uniformed services, or such person 

becomes eligible for medical and dental care under chapter 55 of 

title 10 by reason of subsection (d) of section 1074 of that title, the 

plan shall provide that the person may elect to continue such coverage as provided in this subsection. The maximum period of coverage of a person and the person’s dependents under such an election shall be the lesser of—

(A) * * * 

* * * * * * * 

(b)(1) Except as provided in paragraph (2), in the case of a person 

whose coverage under a health plan was terminated by reason of 

service in the uniformed services, or by reason of the person’s having become eligible for medical and dental care under chapter 55 

of title 10 by reason of subsection (d) of section 1074 of that title, 

an exclusion or waiting period may not be imposed in connection 

14 

with the reinstatement of such coverage upon reemployment under 

this chapter if an exclusion or waiting period would not have been 

imposed under a health plan had coverage of such person by such 

plan not been terminated as a result of such service or eligibility. This paragraph applies to the person who is reemployed and to any 

individual who is covered by such plan by reason of the reinstatement of the coverage of such person. 

* * * * * * * 

(3) In the case of a person whose coverage under a health plan 

is terminated by reason of the person having become eligible for 

medical and dental care under chapter 55 of title 10 by reason of 

subsection (d) of section 1074 of that title but who subsequently does 

not commence a period of active duty under the order to active duty 

that established such eligibility because the order is canceled before 

such active duty commences, the provisions of paragraph (1) relating to any exclusion or waiting period in connection with the reinstatement of coverage under a health plan shall apply to such person’s continued employment, upon the termination of such eligibility 

for medical and dental care under chapter 55 of title 10 that is incident to the cancellation of such order, in the same manner as if the 

person had become reemployed upon such termination of eligibility. 

* * * * * * * 

EMERGENCY SUPPLEMENTAL APPROPRIATIONS ACT 

FOR DEFENSE, THE GLOBAL WAR ON TERROR, AND 

TSUNAMI RELIEF, 2005 

(Division A of Public Law 109–13) 

* * * * * * * 

DIVISION A—EMERGENCY SUPPLEMENTAL APPROPRIATIONS ACT FOR 

DEFENSE, THE GLOBAL WAR ON TERROR, AND TSUNAMI RELIEF, 2005 

That the following sums are appropriated, out of any money in the 

Treasury not otherwise appropriated, for the fiscal year ending 

September 30, 2005, and for other purposes, namely: 

TITLE I—DEFENSE-RELATED APPROPRIATIONS 

* * * * * * * 

GENERAL PROVISIONS, THIS TITLE 

SERVICEMEMBERS’ GROUP LIFE INSURANCE

SEC. 1012. (a) * * * 

* * * * * * * 

ø(f) REQUIREMENTS REGARDING ELECTIONS OF MEMBERS TO REDUCE OR DECLINE INSURANCE.—Section 1967(a) of such title is further amended—

15 

ø(1) in paragraph (2), by adding at the end the following new 

subparagraph: 

ø‘‘(C) Pursuant to regulations prescribed by the Secretary of Defense, notice of an election of a member with a spouse not to be 

insured under this subchapter, or to be insured under this subchapter in an amount less than the maximum amount provided 

under paragraph (3)(A)(i)(I), shall be provided to the spouse of the 

member.’’; and 

ø(2) in paragraph (3)— ø(A) in the matter preceding clause (i), by striking ‘‘and 

(C)’’ and inserting ‘‘, (C), and (D)’’; and 

ø(B) by adding at the end the following new subparagraphs: 

ø‘‘(D) A member with a spouse may not elect not to be insured 

under this subchapter, or to be insured under this subchapter in 

an amount less than the maximum amount provided under subparagraph (A)(i)(I), without the written consent of the spouse. 

ø‘‘(E) Whenever a member who is not married elects not to be insured under this subchapter, or to be insured under this subchapter in an amount less than the maximum amount provided for 

under subparagraph (A)(i)(I), the Secretary concerned shall provide 

a notice of such election to any person designated by the member 

as a beneficiary or designated as the member’s next-of-kin for the 

purpose of emergency notification, as determined under regulations 

prescribed by the Secretary of Defense.’’. ø(g) REQUIREMENT REGARDING REDESIGNATION OF BENE- FICIARIES.—Section 1970 of such title is amended by adding at the 

end the following new subsection: 

ø‘‘(j) A member with a spouse may not modify the beneficiary or 

beneficiaries designated by the member under subsection (a) without providing written notice of such modification to the spouse.’’.¿ 

* * * * * * * 

Æ