I 

110TH CONGRESS 

1ST SESSION H. R. 2132 

To amend the Public Health Service Act to establish a small business health 

benefits program. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 3, 2007 

Mr. ALLEN (for himself, Mrs. CAPPS, Mr. CARNAHAN, Mr. DOGGETT, Ms. 

SCHAKOWSKY, Mr. WAXMAN, Ms. BALDWIN, Mr. EMANUEL, Mr. GENE

GREEN of Texas, Ms. MCCOLLUM of Minnesota, and Ms. DELAURO) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Education and 

Labor, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Public Health Service Act to establish a small 

business health benefits program. 

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 ‘‘Small Business Health 

5 Plans Act of 2007’’. 


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1 SEC. 2. SMALL BUSINESS HEALTH BENEFITS PROGRAM 

2 (SBHBP). 

3 Title XXVII of the Public Health Service Act is 

4 amended— 

5 (1) by redesignating part C as part D; and 

6 (2) by inserting after part B the following new 

7 part: 

8 ‘‘PART C—SMALL BUSINESS HEALTH BENEFITS 

9 PROGRAM (SBHBP) 

10 ‘‘SEC. 2771. SMALL BUSINESS HEALTH BENEFITS PROGRAM. 

11 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab12 lish a small business health benefits program under which 

13 small employers may offer health insurance coverage to 

14 employees and their dependents. 

15 ‘‘(b) PROGRAM ELEMENTS.—Under the SBHBP: 

16 ‘‘(1) ACCESS TO INSURANCE.—Small employers 

17 are provided access, for years beginning on or after 

18 January 1, 2007, to qualified health pooling ar19 rangements under which their employees may elect 

20 self-only or family health insurance coverage under 

21 at least 2 health insurance coverage policies, regard22 less of whether premium assistance referred to in 

23 paragraph (2) is available with respect to such em24 ployer. 

25 ‘‘(2) PREMIUM ASSISTANCE FOR SMALL EM26 PLOYERS.—Premium assistance is available under 


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1 subsection (c) to assist small employers in the pay2 ment of premiums for the health insurance coverage 

3 provided. 

4 ‘‘(3) EMPLOYER SHARE OF PREMIUMS.— 

5 ‘‘(A) IN GENERAL.—Small employers are 

6 provided access to health insurance coverage, 

7 and may be eligible for premium assistance 

8 under subsection (c), only if they pay (before 

9 the application of any premium assistance 

10 under subsection (c)) at least 50 percent of the 

11 premiums for coverage of their employees, but 

12 such employers are not required to pay for the 

13 portion of the premiums for dependents of em14 ployees. 

15 ‘‘(B) CONSTRUCTION.—Nothing in this 

16 section shall be construed as preventing an em17 ployee from applying the payment described in 

18 subparagraph (A) towards the payment of pre19 miums for family health insurance coverage. 

20 ‘‘(4) HEALTH INSURANCE COVERAGE.— 

21 ‘‘(A) IN GENERAL.—Health insurance cov22 erage offered under SBHBP shall meet the fol23 lowing requirements: 

24 ‘‘(i) The Secretary determines that 

25 the coverage is substantially similar to 


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1 health benefits coverage in any of the four 

2 largest health benefit plans (determined by 

3 enrollment) offered under chapter 89 of 

4 title 5, United States Code. 

5 ‘‘(ii) The coverage complies with State 

6 laws and regulations (including applicable 

7 benefit mandates, rating requirements, and 

8 other consumer protections) for group 

9 health insurance coverage for the State in 

10 which the coverage is offered. 

11 ‘‘(iii) The Secretary determines that 

12 the coverage provided to employees is co13 ordinated, in accordance with regulations 

14 prescribed by the Secretary, with other 

15 coverage provided under governmental 

16 health benefits programs under which 

17 health benefits coverage is available to 

18 such employees. 

19 ‘‘(B) STANDARDS FOR PARTICIPATING

20 HEALTH INSURERS.—In administering the pro21 gram, the Secretary may consider the solvency 

22 and claims payment history of health insurers 

23 and shall promote participation by qualified 

24 health insurers that establish— 


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1 ‘‘(i) integration of health information 

2 technology tools to promote quality; 

3 ‘‘(ii) chronic disease management; 

4 ‘‘(iii) preventive health care services; 

5 and 

6 ‘‘(iv) evidence-based medicine consid7 erations of prescription drugs and other 

8 treatment that take into account the indi9 vidual medical circumstances of individuals 

10 enrolled in the program. 

11 ‘‘(5) ENROLLMENT.—In administering the pro12 gram, the Secretary shall provide that employee en13 rollment (and changes in enrollment) are limited to 

14 an annual open enrollment period, except in the case 

15 of change of employment status (including new a 

16 new employee) that affects eligibility for coverage 

17 and in the case of qualifying events (such as change 

18 in family status) specified by the Secretary and con19 sistent with section 2701(f). 

20 ‘‘(c) PREMIUM ASSISTANCE.—Under the SBHBP, 

21 the Secretary shall establish a program of premium assist22 ance for small employers. Such program shall provide for 

23 a sliding scale of assistance to such employers taking into 

24 account the following: 

25 ‘‘(1) The number of employees of the employer. 


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1 ‘‘(2) The average wage level of such employees 

2 relative to the average wage level for employees in 

3 the same geographic area. 

4 ‘‘(3) The profit margin of the employer. 

5 ‘‘(d) REINSURANCE FOR CATASTROPHIC COSTS FOR

6 CERTAIN HEALTH INSURANCE ISSUERS.— 

7 ‘‘(1) IN GENERAL.—In the case of health insur8 ance coverage offered under the SBHBP by a health 

9 insurance issuer that participates in a qualified 

10 health pooling arrangement, the Secretary shall pro11 vide for reinsurance coverage for 75 percent of cov12 ered claims that exceed, for an individual for a year, 

13 an amount determined by the Secretary for such 

14 year which is not less than the minimum amount 

15 specified in paragraph (2). 

16 ‘‘(2) MINIMUM AMOUNT.—The minimum 

17 amount specified in this paragraph is— 

18 ‘‘(A) for the first year in which this section 

19 is in effect, $100,000; or 

20 ‘‘(B) for a subsequent year is the min21 imum amount specified in this paragraph for a 

22 previous year, increased by the Secretary’s esti23 mate of the average annual percentage increase 

24 in health insurance coverage with a median 

25 level of premiums for the previous year. 


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1 Any amount determined under subparagraph (B) 

2 which is not a multiple of $1,000 shall be rounded 

3 to the nearest multiple of $1,000. 

4 ‘‘(e) QUALIFIED HEALTH POOLING ARRANGE5 MENT.—For purposes of this section, the term ‘qualified 

6 health pooling arrangement’ means, with respect to em7 ployees employed in any State for any year— 

8 ‘‘(1) except as provided in subparagraph (B), 

9 an arrangement established by (and operating under 

10 the oversight of) such State for purposes of this sec11 tion, in accordance with regulations of the Secretary, 

12 which provides for pooling of health insurance cov13 erage offered for such year in such State, and 

14 ‘‘(2) in any case in which there is not in effect 

15 for any year an arrangement described in subpara16 graph (A) established by such State, the national 

17 health pooling arrangement established under sec18 tion 3. 

19 The Secretary shall determine, within a reasonable time 

20 prior to each year, whether there is a qualified health pool21 ing arrangement described in paragraph (1) with respect 

22 to employees employed in any State. 

23 ‘‘(f) SMALL EMPLOYER DEFINED.— 

24 ‘‘(1) IN GENERAL.—For purposes of this part, 

25 except as otherwise provided in this subsection, the 


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1 term ‘small employer’ means an employer with 50 or 

2 fewer employees, as determined under regulations 

3 promulgated by the Secretary. 

4 ‘‘(2) CONTINUATION OF PARTICIPATION.—An 

5 employer whose employees are provided health insur6 ance coverage under the SBHBP while the employer 

7 is a small employer as defined in paragraph (1) and 

8 who thereafter has more than 50 employees shall 

9 continue to be treated as a small employer. 

10 ‘‘(3) EMPLOYERS NOT IN EXISTENCE IN PRE11 CEDING YEAR.—In the case of an employer which 

12 was not in existence for the full year prior to the 

13 date on which the employer applies to participate in 

14 SBHBP, the determination of whether such em15 ployer meets the requirements of paragraph (1) shall 

16 be based on the average number of employees that 

17 it is reasonably expected such employer will employ 

18 on business days in the employer’s first full year. 

19 ‘‘(4) WAIVER.—The Secretary may waive the 

20 limitations relating to the size of an employer which 

21 may participate under SBHBP on a case by case 

22 basis if the Secretary determines that such employer 

23 makes a compelling case for such a waiver. In mak24 ing determinations under this paragraph, the Sec25 retary shall consider the effects of the employment 


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1 of temporary and seasonal workers and other related 

2 factors. 

3 ‘‘(g) OTHER DEFINITIONS.—For purposes of this 

4 part: 

5 ‘‘(1) The terms ‘employee’ and ‘dependent’ have 

6 the meanings given such terms by the Secretary in 

7 regulations and shall be based upon the definitions 

8 of such terms used for purposes of the Federal em9 ployee health benefits program established under 

10 chapter 89 of title 5, United States Code. The term 

11 ‘employee’ includes, in the case of a partnership or 

12 sole proprietorship, a partner in the partnership or 

13 the sole proprietor, including an individual employer 

14 who has no employees. Such may include, with re15 spect to an employer and at the employer’s option, 

16 part-time and seasonal employees. 

17 ‘‘(2) The term ‘SBHBP’ means the small busi18 ness health benefits program established under this 

19 section. 

20 ‘‘(h) GRANTS FOR STATE QUALIFIED HEALTH POOL21 ING ARRANGEMENTS.— 

22 ‘‘(1) IN GENERAL.—The Secretary shall provide 

23 grants to States for the establishment, initial admin24 istration, and operations of qualified health pooling 

25 arrangements described in subsection (e)(1). 


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1 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

2 There are authorized to be appropriated such sums 

3 as may be necessary to carry out this subsection. 

4 ‘‘SEC. 2772. ESTABLISHMENT OF NATIONAL HEALTH POOL5 ING ARRANGEMENT. 

6 ‘‘(a) IN GENERAL.—The Secretary and the Secretary 

7 of Labor, acting jointly and in consultation with the Direc8 tor of the Office of Personnel Management, shall provide 

9 for— 

10 ‘‘(1) the offering on a timely basis consistent 

11 with section 2771 of a national health pooling ar12 rangement to eligible small employers; and 

13 ‘‘(2) appropriate oversight over any such ar14 rangement. 

15 ‘‘(b) SPECIFIC REQUIREMENTS.—In carrying out 

16 subsection (a), the Secretary and the Secretary of Labor 

17 shall— 

18 ‘‘(1) model the national health pooling arrange19 ment on the Federal employees health benefits pro20 gram under chapter 89 of title 5, United States 

21 Code, to the extent practicable and consistent with 

22 the other requirements of this part; 

23 ‘‘(2) consistent with paragraph (1), negotiate 

24 the most affordable and substantial coverage pos25 sible for small employers; and 


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1 ‘‘(3) not offer any health plan under such ar2 rangement unless the plan meets the restrictions re3 lating to premium rates contained in the most recent 

4 ‘Small Employer Health Insurance Availability 

5 Model Act’ of the National Association of Insurance 

6 Commissioners . 

7 ‘‘(c) DEFINITIONS.—For purposes of this section— 

8 ‘‘(1) the term ‘national health pooling arrange9 ment’ means an arrangement which provides for 

10 pooling of health insurance coverage offered for any 

11 year in all States which do not have in effect for 

12 such year an arrangement for pooling of health in13 surance coverage offered in such States; and 

14 ‘‘(2) in connection with the national health 

15 pooling arrangement offered pursuant to this sec16 tion, an individual employer shall be taken into ac17 count as an employee under this section.’’. 

Æ 


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