I

104TH CONGRESS

2D SESSION H. R. 3425

To amend the Internal Revenue Code of 1986 to require health insurance

coverage and group health plans that provide coverage of childbirth

to provide coverage for a minimum inpatient stay following childbirth.

IN THE HOUSE OF REPRESENTATIVES

MAY 9, 1996

Mr. KLECZKA (for himself, Mr. STARK, Mr. GIBBONS, Mr. JACOBS, Mr.

PALLONE, Mr. CARDIN, Mr. MATSUI, Mr. LEWIS of Georgia, Mr. COYNE,

Mrs. KENNELLY, Mr. MCDERMOTT, Mr. NEAL of Massachusetts, Mr.

PAYNE of Virginia, Mr. RANGEL, Mr. MCNULTY, Mr. LEVIN, Mr. FORD,

and Ms. MCKINNEY) introduced the following bill; which was referred to

the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to require

health insurance coverage and group health plans that

provide coverage of childbirth to provide coverage for

a minimum inpatient stay following childbirth.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Newborns’ and Moth5 ers’ Health Protection Act of 1996’’.
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1 SEC. 2. FINDING.

2 Congress finds that—

3 (1) the length of post-delivery inpatient care

4 should be based on the unique characteristics of

5 each mother and her newborn child, taking into con6 sideration the health of the mother, the health and

7 stability of the infant, the ability and confidence of

8 the mother to care for her infant, the adequacy of

9 support systems at home, and the access of the

10 mother and infant to appropriate follow-up health

11 care; and

12 (2) the timing of the discharge of a mother and

13 her newborn child from the hospital should be made

14 by the attending provider in consultation with the

15 mother.

16 SEC. 3. NEWBORNS’ AND MOTHERS’ HEALTH PROTECTION.

17 (a) IN GENERAL.—The Internal Revenue Code of

18 1986 is amended by adding at the end the following:

19 ‘‘Subtitle K—Newborns’ and

20 Mothers’ Health Protection

21 ‘‘CHAPTER 100—NEWBORNS’ AND

22 MOTHERS’ HEALTH PROTECTION

‘‘Sec. 9801. Imposition of tax for failure to meet newborns’ and mothers’ health

protection requirements.

‘‘Sec. 9802. Required coverage for minimum inpatient stay following birth.

‘‘Sec. 9803. Definitions; general provisions.
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1 ‘‘SEC. 9801. IMPOSITION OF TAX FOR FAILURE TO MEET

2 NEWBORNS’ AND MOTHERS’ HEALTH PRO3 TECTION REQUIREMENTS.

4 ‘‘(a) HEALTH INSURANCE COVERAGE.—

5 ‘‘(1) IN GENERAL.—There is hereby imposed a

6 tax on an insurer or health maintenance organiza7 tion that offers health insurance coverage which the

8 Secretary of Health and Human Services certifies to

9 the Secretary fails to meet an applicable requirement

10 specified in section 9802 at any time during a cal11 endar year.

12 ‘‘(2) AMOUNT OF TAX.—The amount of tax im13 posed by paragraph (1) shall be equal to 25 percent

14 of the premiums received under such coverage dur15 ing the calendar year.

16 ‘‘(3) PREMIUM.—For purposes of this sub17 section, the term ‘premium’ means the gross amount

18 of premiums and other consideration (including ad19 vance premiums, deposits, fees, and assessments)

20 arising from health insurance coverage issued by an

21 insurer or health maintenance organization, adjusted

22 for any return or additional premiums paid as a re23 sult of endorsements, cancellations, audits, or retro24 spective rating.

25 ‘‘(4) EXEMPTION IF STATE REGULATION.—No

26 tax shall be imposed under paragraph (1) for a fail-
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1 ure of an insurer or organization to meet a require2 ment if the insurer or organization is regulated by

3 a State, unless the Secretary of Health and Human

4 Services has determined that such State has not

5 provided for enforcement of State laws which govern

6 the same matters as are governed by such require7 ment and which assure substantial compliance by in8 surers or organizations with such a requirement.

9 ‘‘(b) GROUP HEALTH PLANS.—

10 ‘‘(1) IN GENERAL.—There is hereby imposed a

11 tax on a plan sponsor (as defined in section 3 of the

12 Employee Retirement Income Security Act of 1974)

13 of a group health plan which the Secretary of Labor

14 certifies to the Secretary fails to meet an applicable

15 requirement of section 9802 at any time during a

16 calendar year.

17 ‘‘(2) AMOUNT OF TAX.—The amount of tax im18 posed by paragraph (1) shall be equal to 25 percent

19 of the group health plan coverage expenditures for

20 such calendar year under such plan.

21 ‘‘(3) GROUP HEALTH PLAN COVERAGE EXPEND22 ITURES.—For purposes of this subsection, the group

23 health plan coverage expenditures of any self-insured

24 group health plan for any calendar year are the ag25 gregate expenditures for such year for health bene-
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1 fits provided under such plan to the extent that

2 health benefits are provided other than through

3 health insurance coverage.

4 ‘‘(c) WAIVER.—If the Secretary of Health and

5 Human Services finds, with respect to an insurer or health

6 maintenance organization, or the Secretary of Labor finds,

7 with respect to a group health plan, that a failure of such

8 insurer, organization, or plan is due to reasonable cause

9 and not to willful neglect and certifies such fact to the

10 Secretary of the Treasury, the Secretary of the Treasury

11 may waive part or all of the tax imposed by this section

12 to the extent that the Secretary of Health and Human

13 Services or the Secretary of Labor (as the case may be)

14 finds that payment of such tax would be excessive relative

15 to the failure involved.

16 ‘‘SEC. 9802. REQUIRED MINIMUM CHILDBIRTH BENEFITS.

17 ‘‘(a) MINIMUM CHILDBIRTH BENEFITS.—If an in18 surer or health maintenance organization provides health

19 insurance coverage that includes any benefits for inpatient

20 care for childbirth for a mother or newborn child or if a

21 group health plan includes any such benefits, the insurer,

22 organization, or plan shall meet the following require23 ments:

24 ‘‘(1) MINIMUM LENGTH OF STAY FOR INPA25 TIENT CARE BENEFITS.—The coverage or plan shall
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1 provide benefits for inpatient care for childbirth for

2 a minimum length of stay of 48 hours following a

3 vaginal delivery and a minimum length of stay of 96

4 hours following a caesarean section.

5 ‘‘(2) COVERAGE OF POST-DELIVERY FOLLOW-UP

6 CARE.—If an attending provider, in consultation

7 with the mother, decides to discharge a covered

8 mother or newborn child from an inpatient setting

9 before the expiration of the minimum length of stay

10 period described in paragraph (1), the coverage or

11 plan shall include benefits for timely post-delivery

12 care by a registered nurse, physician, nurse practi13 tioner, nurse midwife or physician assistant experi14 enced in maternal and child health in the home, a

15 provider’s office, a hospital, a federally qualified

16 health center, a federally qualified rural health clin17 ic, a State health department maternity clinic, or an18 other setting (such as a birthing center or an inter19 mediate care facility) determined appropriate under

20 regulations promulgated by the Secretary of Health

21 and Human Services.

22 ‘‘(3) NOTICE.—The insurer, organization, or

23 plan shall provide notice to each enrollee eligible for

24 childbirth benefits under this subsection regarding

25 the requirements of this section.
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1 (b) PROHIBITIONS.—In implementing the require2 ments of subsection (a), an insurer, organization, or plan

3 may not—

4 ‘‘(1) require or condition the provision of bene5 fits under subsection (a) on any authorization or ap6 proval of an attending or other provider;

7 ‘‘(2) deny enrollment, renewal, or continued

8 coverage to a mother and her newborn child who are

9 otherwise eligible to be so covered based on compli10 ance with this section;

11 ‘‘(3) provide monetary incentives to mothers to

12 encourage such mothers to request less than the

13 minimum coverage required under subsection (a);

14 ‘‘(4) provide incentives (monetary or otherwise)

15 to an attending provider to induce such provider to

16 provide treatment in a manner inconsistent with this

17 section; or

18 ‘‘(5) penalize or otherwise reduce or limit the

19 reimbursement of an attending provider because

20 such provider provided treatment in accordance with

21 this section.

22 ‘‘(c) ADDITIONAL TERMS AND CONDITIONS.—

23 ‘‘(1) ATTENDING PROVIDER.—As used in this

24 section, the term ‘attending provider’ means, with

25 respect to a mother and her newborn child, an obste-
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1 trician-gynecologist, pediatrician, family physician,

2 or other physician, or any other health care provider

3 (such as a nurse midwife or nurse practitioner),

4 who, acting in accordance with applicable State law,

5 is primarily responsible for the care of the mother

6 and child.

7 (2) TIMELY CARE DEFINED.—As used in sub8 section (a)(2), the term ‘timely post-delivery care’

9 means health care that is provided—

10 ‘‘(A) following the discharge of a mother

11 and her newborn child from the inpatient set12 ting following childbirth; and

13 ‘‘(B) in a manner that meets the health

14 care needs of the mother and her newborn

15 child, that provides for the appropriate monitor16 ing of the conditions of the mother and child,

17 and that occurs within the 72-hour period im18 mediately following discharge.

19 ‘‘(3) REGULATIONS REGARDING APPROPRIATE

20 POST-CARE DELIVERY SETTINGS.—The Secretary of

21 Health and Human Services, with respect to regula22 tions promulgated under subsection (a)(2) concern23 ing appropriate post-delivery care settings—
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1 ‘‘(A) shall ensure that, to the extent prac2 ticable, such regulations are consistent with

3 State licensing and practice laws,

4 ‘‘(B) shall consider telemedicine and other

5 innovative means to provide follow-up care, and

6 ‘‘(C) shall consider both urban and rural

7 settings.

8 ‘‘(4) RULE OF CONSTRUCTION.—Nothing in

9 this section shall be construed to require that a

10 mother—

11 ‘‘(A) give birth in a hospital; or

12 ‘‘(B) stay in the hospital for a fixed period

13 of time following the birth of her child.

14 ‘‘(5) REQUIREMENTS.—The notice required

15 under subsection (a)(3) shall be in accordance with

16 regulations promulgated by the Secretary of Health

17 and Human Services. Such regulations shall provide

18 that the notice shall be in writing, shall be conspicu19 ous and prominently positioned, and shall be re20 quired to be provided as follows:

21 ‘‘(A) HEALTH INSURANCE COVERAGE.—By

22 an insurer or health maintenance organiza23 tion—

24 ‘‘(i) to enrollees described in sub25 section (a) who are enrolled on the effec-
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1 tive date of this chapter within 120 days

2 after such effective date and annually

3 thereafter, and

4 ‘‘(ii) to other enrollees at the time of

5 enrollment and annually thereafter.

6 ‘‘(B) GROUP HEALTH PLANS.—By a group

7 health plan—

8 ‘‘(i) to enrollees described in sub9 section (a) who are enrolled on the effec10 tive date of this chapter within 120 days

11 after such effective date, and

12 ‘‘(ii) for plan years beginning on or

13 after such effective date, as part of its

14 summary plan description.

15 ‘‘SEC. 9803. DEFINITIONS; GENERAL PROVISIONS.

16 ‘‘(a) GROUP HEALTH PLAN DEFINED.—For pur17 poses of this chapter—

18 ‘‘(1) IN GENERAL.—The term ‘group health

19 plan’ means an employee welfare benefit plan (as de20 fined in section 3(1) of the Employee Retirement In21 come Security Act of 1974) to the extent that the

22 plan provides medical care directly or through insur23 ance, reimbursement, or otherwise, and includes a

24 group health plan within the meaning of section

25 5000(b)(1).
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1 ‘‘(2) EXCLUSION OF PLANS WITH LIMITED COV2 ERAGE.—An employee welfare benefit plan shall be

3 treated as a group health plan under this chapter

4 only with respect to medical care which is provided

5 under the plan and which does not consist of cov6 erage excluded from the definition of health insur7 ance coverage under subsection (b)(1)(B).

8 ‘‘(3) EXCLUSION OF CHURCH PLANS.—The re9 quirements of this chapter insofar as they apply to

10 group health plans shall not apply to church plans

11 (as defined in section 3(33) of the Employee Retire12 ment Income Security Act of 1974).

13 ‘‘(4) TREATMENT OF GOVERNMENTAL PLANS.—

14 If the plan sponsor of a governmental plan (as such

15 terms are defined in section 3 of the Employee Re16 tirement Income Security Act of 1974) which is a

17 group health plan to which the provisions of this

18 chapter otherwise apply makes an election under this

19 paragraph for any specified period (in such form

20 and manner as the Secretary of Health and Human

21 Services may by regulations prescribe), then the re22 quirements of this chapter insofar as they apply to

23 group health plans shall not apply to such govern24 mental plans for such period.
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1 ‘‘(b) DEFINITIONS RELATING TO HEALTH INSUR2 ANCE COVERAGE.—As used in this chapter—

3 ‘‘(1) HEALTH INSURANCE COVERAGE.—

4 ‘‘(A) IN GENERAL.—Except as provided in

5 subparagraph (B), the term ‘health insurance

6 coverage’ means benefits consisting of medical

7 care (provided directly, through insurance or re8 imbursement, or otherwise) under any hospital

9 or medical service policy or certificate, hospital

10 or medical service plan contract, or health

11 maintenance organization group contract of12 fered by an insurer or a health maintenance or13 ganization.

14 ‘‘(B) EXCEPTION.—Such term does not in15 clude coverage under any separate policy, cer16 tificate, or contract only for one or more of any

17 of the following:

18 ‘‘(i) Coverage only for accident, or

19 disability income insurance, or any com20 bination thereof.

21 ‘‘(ii) Medicare supplemental health in22 surance (as defined under section

23 1882(g)(1) of the Social Security Act).

24 ‘‘(iii) Coverage issued as a supplement

25 to liability insurance.
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1 ‘‘(iv) Liability insurance, including

2 general liability insurance and automobile

3 liability insurance.

4 ‘‘(v) Workers compensation or similar

5 insurance.

6 ‘‘(vi) Automobile medical payment in7 surance.

8 ‘‘(vii) Coverage for a specified disease

9 or illness.

10 ‘‘(viii) Hospital or fixed indemnity in11 surance.

12 ‘‘(ix) Short-term limited duration in13 surance.

14 ‘‘(x) Credit-only, dental-only, or vi15 sion-only insurance.

16 ‘‘(xi) A health insurance policy provid17 ing benefits only for long-term care, nurs18 ing home care, home health care, commu19 nity-based care, or any combination there20 of.

21 ‘‘(2) HEALTH MAINTENANCE ORGANIZATION.—

22 The term ‘health maintenance organization’

23 means—

24 ‘‘(A) a federally qualified health mainte25 nance organization (as defined in section
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1 1301(a) of the Public Health Service Act (42

2 U.S.C. 300e(a))),

3 ‘‘(B) an organization recognized under

4 State law as a health maintenance organization,

5 or

6 ‘‘(C) a similar organization regulated

7 under State law for solvency in the same man8 ner and to the same extent as such a health

9 maintenance organization,

10 if the organization is subject to State law which reg11 ulates insurance (within the meaning of section

12 514(b)(2) of the Employee Retirement Income Secu13 rity Act of 1974).

14 ‘‘(3) INSURER.—The term ‘insurer’ means an

15 insurance company, insurance service, or insurance

16 organization which is licensed to engage in the busi17 ness of insurance in a State and which is subject to

18 State law which regulates insurance (within the

19 meaning of section 514(b)(2)(A) of the Employee

20 Retirement Income Security Act of 1974).

21 ‘‘(c) OTHER DEFINITIONS.—As used in this chap22 ter—

23 ‘‘(1) MEDICAL CARE.—The term ‘medical care’

24 means—
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1 ‘‘(A) amounts paid for, or items or services

2 in the form of, the diagnosis, cure, mitigation,

3 treatment, or prevention of disease, or amounts

4 paid for, or items or services provided for, the

5 purpose of affecting any structure or function

6 of the body,

7 ‘‘(B) amounts paid for, or services in the

8 form of, transportation primarily for and essen9 tial to medical care referred to in subparagraph

10 (A), and

11 ‘‘(C) amounts paid for insurance covering

12 medical care referred to in subparagraphs (A)

13 and (B).

14 ‘‘(2) STATE.—The term ‘State’ includes the

15 District of Columbia, Puerto Rico, the Virgin Is16 lands, Guam, American Samoa, and the Northern

17 Mariana Islands.

18 ‘‘(d) NONPREEMPTION.—

19 ‘‘(1) IN GENERAL.—The provisions of this

20 chapter shall not preempt those provisions of State

21 law that provide protections that are not less than

22 the protections provided under this chapter, includ23 ing any—

24 ‘‘(A) requirement that health insurance

25 coverage provide for maternity and pediatric
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1 care that is in accordance with guidelines estab2 lished by the American College of Obstetricians

3 and Gynecologists and the American Academy

4 of Pediatrics, and

5 ‘‘(B) leaving decisions regarding the appro6 priate length of inpatient care for a mother and

7 her newborn child entirely to the attending pro8 vider in consultation with the mother.

9 ‘‘(2) NO OVERRIDE OF ERISA PREEMPTION.—

10 Nothing in this chapter shall be construed to affect

11 or modify the provisions of section 514 of the Em12 ployee Retirement Income Security Act of 1974 (29

13 U.S.C. 1144).

14 ‘‘(e) REGULATIONS.—Regulations promulgated by

15 the Secretary to carry out this chapter shall be promul16 gated in consultation with the Secretary of Health and

17 Human Services.’’.

18 (b) EFFECTIVE DATE.—The amendments made by

19 this section shall apply—

20 (1) to health insurance coverage for contract

21 years beginning on or after January 1, 1997; and

22 (2) to group health plans as of the first day of

23 the first plan year beginning on or after January 1,

24 1997.
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1 (c) CLERICAL AMENDMENT.—The table of contents

2 for the Internal Revenue Code of 1986 is amended by add3 ing after the item relating to subtitle J the following new

4 item:

‘‘Subtitle K. Newborns’ and Mothers’ Health Protection.’’

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