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[House Report 111-62]
[From the U.S. Government Publishing Office]

111th Congress                                             Rept. 111-62
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

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HEALTH INSURANCE RESTRICTIONS AND LIMITATIONS CLARIFICATION ACT OF 2009

                                _______
                                

 March 30, 2009.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                        [To accompany H.R. 1253]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Energy and Commerce, to whom as referred the 
bill (H.R. 1253) 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.........................................................     2
Committee Consideration..........................................     2
Committee Votes..................................................     2
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..........................................     3
Congressional Budget Office Estimate.............................     3
Federal Mandates Statement.......................................     4
Advisory Committee Statement.....................................     4
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............     5

                          Purpose and Summary

    The purpose of H.R. 1253, the ``Health Insurance 
Restrictions and Limitations Clarification Act of 2009'', is to 
improve transparency in health insurance benefit restrictions 
and limitations. H.R. 1253 amends the Employee Retirement 
Income Security Act of 1974 (ERISA), the 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 
advance of enrollment and after enrollment.

                  Background and Need For Legislation

    In January 2001, the Department of Labor, the Internal 
Revenue Service and the Health Care Financing Administration 
issued a rule in accordance with 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.''
    This rule resulted in situations where a health insurance 
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 who may ride 
motorcycles, horses, snowmobiles, or participate in other legal 
activities that could result in an injury. 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.

                                Hearings

    The Committee on Energy and Commerce has not held hearings 
on the legislation.

                        Committee Consideration

    The Committee on Energy and Commerce met in open markup 
session on Wednesday, March 4, 2009, and, pursuant to a motion 
by Mr. Waxman, agreed by unanimous consent to consider and 
approve H.R. 1253 and several other bills en bloc. H.R. 1253 
was ordered favorably reported to the House by a voice vote. No 
amendments were offered during full Committee consideration of 
H.R. 1253.

                            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. 
There were no recorded votes taken during consideration or 
ordering H.R. 1253 reported to the House.

                      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 are reflected in this report.

         Statement of General Performance Goals and Objectives

    The objective of H.R. 1253 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

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
1253 would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

                  Earmarks and Tax and Tariff Benefits

    In compliance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 1253 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 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. 1253 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, March 20, 2009.
Hon. Henry A. Waxman,
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. 1253, the Health 
Insurance Restrictions and Limitations Clarification Act of 
2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Robert 
Stewart.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 1253--Health Insurance Restrictions and Limitations Clarification 
        Act of 2009

    H.R. 1253, the Health Insurance Restrictions and 
Limitations Clarification Act of 2009, would require that group 
health plans disclose the limitations and restrictions on 
health insurance 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 
H.R. 1253 would have no significant impact on the federal 
budget.
    H.R. 1253 would impose private-sector mandates, 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 ($139 million 
in 2009, annually adjusted for inflation). CBO estimates that 
the direct costs of meeting the bill's requirements would be 
small because the issuers and sponsors of group health 
insurance plans generally make such information available and 
already discuss plan information before and after enrollment. 
Making that information more easily understood would only 
generate negligible costs.
    H.R. 1253 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, provisions of the 
bill that would require plans to disclose coverage limits for 
injuries by source would not impose 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 Robert Stewart 
(for federal costs), Lisa Ramirez-Branum (for the impact on 
state, local, and tribal governments), and Keisuke Nakagawa 
(for the private-sector impact). This estimate was approved by 
Peter H. Fontaine, Assistant Director for Budget Analysis.

                       Federal Mandates Statement

      The Committee adopts as its own the estimate of federal 
mandates regarding H.R. 1253 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 were created by H.R. 
1253.

                    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. 1253 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. 1253 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 the Act as the 
``Health Insurance Restrictions and Limitations Clarification 
Act of 2009''.

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):

   SECTION 702 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974

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 in 
                        writing to the plan sponsor in advance 
                        of the point of sale to the plan;
                          (iii) the plan sponsor of the health 
                        insurance coverage provide, 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 at the earliest 
                        opportunity that other materials are 
                        provided..

           *       *       *       *       *       *       *

                              ----------                              

             SECTION 2702 OF THE PUBLIC HEALTH SERVICE ACT

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 in 
                        writing 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 at the earliest 
                        opportunity that other materials are 
                        provided..

           *       *       *       *       *       *       *

                              ----------                              

           SECTION 9802 OF THE INTERNAL REVENUE CODE OF 1986

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 at the earliest 
                        opportunity that other materials are 
                        provided..

           *       *       *       *       *       *       *

                                  
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