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[House Report 110-870]
[From the U.S. Government Publishing Office]

110th Congress                                            Rept. 110-870
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

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      HEALTH INSURANCE SOURCE OF INJURY CLARIFICATION ACT OF 2008

                                _______
                                

 September 23, 2008.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. Dingell, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 6908]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 6908) to require that limitations and 
restrictions on coverage under group health plans be timely 
disclosed to group health plan sponsors and timely communicated 
to participants and beneficiaries under such plans in a form 
that is easily understandable, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
Statement of General Performance Goals and Objectives............     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     3
Earmarks and Tax and Tariff Benefits.............................     3
Committee Cost Estimate..........................................     4
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     5
Advisory Committee Statement.....................................     5
Constitutional Authority Statement...............................     5
Applicability to Legislative Branch..............................     5
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill, as Reported............     6

                          Purpose and Summary

    The purpose of H.R. 6908, the Health Insurance Source of 
Injury Clarification Act of 2008, is to improve transparency in 
health insurance benefit restrictions and limitations. H.R. 
6908 amends the Employee Retirement Income Security Act of 1974 
(ERISA), Public Health Service Act (PHSA), and the Internal 
Revenue Code (IRC) to require that any limitations on benefits 
of health insurers be explicit and clear; that they be 
disclosed to plan sponsors in advance of the point of sale; and 
that they be disclosed to participants and beneficiaries in a 
manner that is easily understandable in the plan in advance of 
enrollment and after enrollment.

                  Background and Need for Legislation

    In January 2001, the Department of Labor (DOL), the 
Internal Revenue Service and the Health Care Financing 
Administration, issued a rule in accordance to the Health 
Insurance Portability and Accountability Act (HIPAA) of 1996. 
The rule states that ``[w]hile a person cannot be excluded from 
a plan for engaging in certain recreational activities, 
benefits for a particular injury can, in some cases, be 
excluded based on the source of the injury.''\1\
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    \1\Federal Register, Vol. 66, No. 5, Monday, January 8, 2001.
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    This rule resulted in situations where a beneficiary was 
unaware that injuries resulting from certain recreational 
activities could result in non-payment for necessary medical 
services. In many situations the exclusions were unclear or 
very broad.
    The lack of clarity underlying coverage of benefits has 
created a confusing situation for individuals that may ride 
motorcycles, horses, snowmobiles, or participate in other legal 
activities that could result in an injury. Millions of 
Americans enjoy these activities safely every year within the 
framework of State laws and utilizing proper safety 
precautions. However, where an injury results from these 
activities, insurers should not discriminate in their treatment 
of injured individuals. To the extent plan limitations or 
restrictions are permitted, such limitations or restrictions 
should be explicit and clear before a person enrolls in a plan.

                   LEGISLATIVE AND EXECUTIVE HISTORY

    H.R. 1076, the HIPAA Recreational Injury Technical 
Correction Act, was introduced by Congressman Michael Burgess 
(R-TX) and Congressman Bart Stupak (D-MI) on February 15, 2007, 
and currently has 122 cosponsors. The Senate companion, S. 616, 
was introduced by Senator Susan Collins (R-ME) on February 15, 
2007, and has 8 cosponsors.
    As introduced, H.R. 1076 would have required plans to cover 
payment for medical services resulting from participation of an 
individual in a legal mode of transportation or a legal 
recreational activity.
    In response to concerns raised during discussions on this 
bill, the Committee worked with Mr. Burgess and Mr. Stupak on 
an alternative policy.
    Congressman Burgess and Stupak introduced new legislation, 
H.R. 6908, that would:
           Require any limitations and restrictions on 
        benefits be explicit and clear;
           Require that they be disclosed to the 
        sponsor of the group health plan in advance of the 
        point of sale to the group health plan; and
           Require that the issuer of the health 
        insurance coverage make available to participants and 
        beneficiaries in an easily understandable manner a 
        description of the limitations and restrictions prior 
        to and upon their enrollment.

                                Hearings

    No hearings were held in connection with H.R. 6908.

                        Committee Consideration

    On Wednesday, September 17, 2008, the full Committee met in 
open markup session and ordered H.R. 6908 favorably reported to 
the House, by a voice vote. No amendments were offered during 
full Committee consideration of the bill.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. No 
record votes were taken in connection with ordering H.R. 6908 
reported to the House. A motion by Mr. Dingell to order H.R. 
6908 favorably reported to the House was agreed to by a voice 
vote.

                      Committee Oversight Findings

    Regarding clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the oversight findings of the 
Committee regarding H.R. 6908 are reflected in this report.

         Statement Of General Performance Goals And Objectives

    The objective of H.R. 6908 is to ensure that consumers are 
informed of any limitations and restrictions on their health 
insurance coverage.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    Regarding compliance with clause 3(c)(2) of rule XIII of 
the Rules of the House of Representatives, the Committee finds 
that H.R. 6908 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  Earmarks and Tax and Tariff Benefits

    Regarding compliance with clause 9 of rule XXI of the Rules 
of the House of Representatives, H.R. 6908 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate on H.R. 
6908 prepared by the Director of the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act 
of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate on 
H.R. 6908 provided by the Congressional Budget Office pursuant 
to section 402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 22, 2008.
Hon. John D. Dingell,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 6908, the Health 
Insurance Source of Injury Clarification Act of 2008.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kirstin 
Nelson.
            Sincerely,
                                         Robert A. Sunshine
                                   (For Peter R. Orszag, Director).
    Enclosure.

H.R. 6908--Health Insurance Source of Injury Clarification Act of 2008

    H.R. 6908, the Health Insurance Source of Injury 
Clarification Act of 2008, would require that group health 
plans disclose the limitations and restrictions on coverage in 
a timely manner to health plan sponsors and participants. The 
bill would amend the Employee Retirement and Income Security 
Act of 1974, the Public Health Service Act, and the Internal 
Revenue Code to reflect this new requirement. The bill would 
require that health insurance coverage limitations and 
restrictions be explicit and clear prior to the time of sale or 
enrollment. CBO estimates that enacting H.R. 6908 would not 
affect the federal budget.
    H.R. 6908 would impose a private-sector mandate, as defined 
in the Unfunded Mandates Reform Act (UMRA), on issuers of group 
health insurance coverage and sponsors of group health 
insurance plans. CBO estimates that the aggregate cost of 
complying with those mandates would not exceed the threshold 
established by UMRA for private-sector mandates ($136 million 
in 2008, adjusted annually for inflation). CBO estimates that 
the direct cost of these requirements would be small because 
issuers and sponsors of group health insurance plans generally 
already make such information available and already disclose 
plan information before and after enrollment. Making that 
information more explicit would not, in and of itself, be 
costly.
    H.R. 6908 contains no intergovernmental mandates as defined 
in UMRA. An existing provision in the Public Health Service Act 
would allow state, local, and tribal governments, as employers 
that provide health benefits to their employees, to opt out of 
the requirements of this bill. Consequently, the requirements 
in the bill that would require plans to disclose coverage 
limits for injuries by source would not be an intergovernmental 
mandate as defined in UMRA. The bill would affect the budgets 
of those governments only if they choose to comply with the 
requirements for their group health plans.
    The CBO staff contacts for this estimate are Kirstin Nelson 
(for federal costs); Lisa Ramirez-Branum (for the impact on 
state, local, and tribal governments); and Patrick Bernhardt 
(for the private-sector impact). This estimate was approved by 
Keith J. Fontenot, Deputy Assistant Director for Health and 
Human Services, Budget Analysis Division.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 6908 prepared by the Director of the 
Congressional Budget Office pursuant to section 423 of the 
Unfunded Mandates Reform Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act would be created by H.R. 
6908.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for H.R. 6908 is provided in Article 
I, section 8, clause 3, which grants Congress the power to 
regulate commerce with foreign nations, among the several 
States, and with the Indian Tribes.

                  Applicability to Legislative Branch

    The Committee finds that H.R. 6908 does not relate to the 
terms and conditions of employment or access to public services 
or accommodations within the meaning of section 102(b)(3) of 
the Congressional Accountability Act of 1995.

             Section-by-Section Analysis of the Legislation

Section 1. Short title

    Section 1 establishes the short title of H.R. 6908 as the 
Health Insurance Source of Injury Clarification Act of 2008.

Section 2. Disclosure requirements

    Section 2(a) amends the Employee Retirement Income Security 
Act of 1974. This provision is not within the jurisdiction of 
the Committee.
    Section 2(b) amends the Public Health Service Act relating 
to the group market. It amends section 2702 (relating to 
prohibiting discrimination against individual participants and 
beneficiaries based on health status) in subsection (a)(2)(B) 
to provide that paragraph (1) of subsection (a) shall not be 
construed to prevent a plan or coverage from establishing 
limitations or restrictions on the amount, level, extent, or 
nature of the benefits or coverage for similarly situated 
individuals enrolled in the plan or coverage so long as:
           Such limitations and restrictions are 
        explicit and clear;
           Such limitations and restrictions have been 
        disclosed to the plan sponsor of the group health plan 
        in advance of the point of sale to the group health 
        plan;
           The plan sponsor and issuer make available 
        to participants and beneficiaries in an easily 
        understandable manner a description of the limitations 
        and restrictions in advance of the point of their 
        enrollment under the plan; and
           The plan sponsor and issuer make available 
        to participants and beneficiaries in an easily 
        understandable manner a description of the limitations 
        and restrictions upon their enrollment.
    Section 2(c) amends the Internal Revenue Code of 1986. This 
provision is not within the jurisdiction of the Committee.
    Section 2(d) makes these changes applicable with respect to 
plan years beginning 1 year after the date of enactment.

         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 (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

            EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974

           *       *       *       *       *       *       *
TITLE I--PROTECTION OF EMPLOYEE BENEFIT RIGHTS

           *       *       *       *       *       *       *

Subtitle B--Regulatory Provisions

           *       *       *       *       *       *       *

                 Part 7--Group Health Plan Requirements

     Subpart A--Requirements Relating to Portability, Access, and 
Renewability

           *       *       *       *       *       *       *

SEC. 702. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS 
                    AND BENEFICIARIES BASED ON HEALTH STATUS.

  (a) In Eligibility To Enroll.--
          (1) * * *
          (2) No application to benefits or exclusions.--To the 
        extent consistent with section 701, paragraph (1) shall 
        not be construed--
                  (A) * * *
                  (B) to prevent such a plan or coverage from 
                establishing limitations or restrictions on the 
                amount, level, extent, or nature of the 
                benefits or coverage for similarly situated 
                individuals enrolled in the plan or coverage so 
                long as--
                          (i) such limitations and restrictions 
                        are explicit and clear;
                          (ii) in the case of such limitations 
                        and restrictions in health insurance 
                        coverage offered in connection with the 
                        group health plan, such limitations and 
                        restrictions have been disclosed to the 
                        plan sponsor in advance of the point of 
                        sale to the plan;
                          (iii) the plan sponsor and the issuer 
                        of the health insurance coverage make 
                        available, to participants and 
                        beneficiaries in the plan in advance of 
                        the point of their enrollment under the 
                        plan, a description of such limitations 
                        and restrictions in a form that is 
                        easily understandable by such 
                        participants and beneficiaries; and
                          (iv) the plan sponsor and the issuer 
                        of the coverage provide such 
                        description to participants and 
                        beneficiaries upon their enrollment 
                        under the plan.

           *       *       *       *       *       *       *

                              ----------                              

                       PUBLIC HEALTH SERVICE ACT

           *       *       *       *       *       *       *
    TITLE XXVII--REQUIREMENTS RELATING TO HEALTH INSURANCE COVERAGE

                      Part A--Group Market Reforms

Subpart 1--Portability, Access, and Renewability Requirements

           *       *       *       *       *       *       *

SEC. 2702. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS 
                    AND BENEFICIARIES BASED ON HEALTH STATUS.

  (a) In Eligibility To Enroll.--
          (1) * * *
          (2) No application to benefits or exclusions.--To the 
        extent consistent with section 701, paragraph (1) shall 
        not be construed--
                  (A) * * *
                  (B) to prevent such a plan or coverage from 
                establishing limitations or restrictions on the 
                amount, level, extent, or nature of the 
                benefits or coverage for similarly situated 
                individuals enrolled in the plan or coverage so 
                long as--
                          (i) such limitations and restrictions 
                        are explicit and clear;
                          (ii) in the case of such limitations 
                        and restrictions in health insurance 
                        coverage offered in connection with the 
                        group health plan, such limitations and 
                        restrictions have been disclosed to the 
                        plan sponsor in advance of the point of 
                        sale to the plan;
                          (iii) the plan sponsor and the issuer 
                        of the group health insurance coverage 
                        make available, to participants and 
                        beneficiaries in the plan in advance of 
                        the point of their enrollment under the 
                        plan, a description of such limitations 
                        and restrictions in a form that is 
                        easily understandable by such 
                        participants and beneficiaries; and
                          (iv) the plan sponsor and the issuer 
                        of the coverage provides such 
                        description to participants and 
                        beneficiaries upon their enrollment 
                        under the plan.

           *       *       *       *       *       *       *

                              ----------                              

                     INTERNAL REVENUE CODE OF 1986

           *       *       *       *       *       *       *
Subtitle K--Group Health Plan Requirements

           *       *       *       *       *       *       *

CHAPTER 100--GROUP HEALTH PLAN REQUIREMENTS

           *       *       *       *       *       *       *

    Subchapter A--Requirements Relating to Portability, Access, and 
Renewability

           *       *       *       *       *       *       *

SEC. 9802. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS 
                    AND BENEFICIARIES BASED ON HEALTH STATUS.

  (a) In Eligibility To Enroll.--
          (1) * * *
          (2) No application to benefits or exclusions.--To the 
        extent consistent with section 9801, paragraph (1) 
        shall not be construed--
                  (A) * * *
                  (B) to prevent such a plan from establishing 
                limitations or restrictions on the amount, 
                level, extent, or nature of the benefits or 
                coverage for similarly situated individuals 
                enrolled in the plan or coverage so long as--
                          (i) such limitations and restrictions 
                        are explicit and clear;
                          (ii) the group health plan makes 
                        available, to participants and 
                        beneficiaries in the plan in advance of 
                        the point of their enrollment under the 
                        plan, a description of such limitations 
                        and restrictions in a form that is 
                        easily understandable by such 
                        participants and beneficiaries; and
                          (iii) the plan provides such 
                        description to participants and 
                        beneficiaries upon their enrollment 
                        under the plan.

           *       *       *       *       *       *       *

                                  
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