I

104TH CONGRESS

1ST SESSION H. R. 1610

To amend the Internal Revenue Code of 1986 to require employer-provided

group health plans to credit coverage under a prior group health plan

against any preexisting condition limitation.

IN THE HOUSE OF REPRESENTATIVES

MAY 11, 1995

Mr. THOMAS (for himself, Mr. STARK, Mrs. JOHNSON of Connecticut, Mr.

CARDIN, Mr. MCCRERY, Mr. MCDERMOTT, Mr. ENSIGN, Mr. KLECZKA,

Mr. CHRISTENSEN, Mr. LEWIS of Georgia, Mr. CRANE, Mr. HOUGHTON,

and Mr. SAM JOHNSON of Texas) 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

employer-provided group health plans to credit coverage

under a prior group health plan against any preexisting

condition limitation.

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

3 SECTION 1. CREDIT FOR COVERAGE UNDER PRIOR GROUP

4 HEALTH PLAN AGAINST ANY PREEXISTING

5 CONDITION LIMITATION.

6 (a) IN GENERAL.—Section 4980B of the Internal

7 Revenue Code of 1986 is amended by redesignating sub-
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1 section (g) as subsection (i) and by inserting after sub2 section (f) the following new subsections:

3 ‘‘(g) PREEXISTING CONDITION LIMITATION RE4 QUIREMENTS OF GROUP HEALTH PLANS.—

5 ‘‘(1) IN GENERAL.—A group health plan meets

6 the requirements of this subsection only if the pre7 existing condition limitation period (if any) under

8 the plan with respect to any individual who com9 mences coverage under the plan after December 31,

10 1995, is reduced by the length of the aggregate pe11 riod of qualified prior coverage (if any) applicable to

12 such individual as of the date of such commence13 ment.

14 ‘‘(2) PREEXISTING CONDITION LIMITATION PE15 RIOD.—For purposes of paragraph (1), the term

16 ‘preexisting condition limitation period’ means, with

17 respect to coverage of an individual under a group

18 health plan, the period during which benefits with

19 respect to treatment of a condition of such individ20 ual are not provided based on the fact that the con21 dition was preexisting.

22 ‘‘(3) AGGREGATE PERIOD OF QUALIFIED PRIOR

23 COVERAGE.—

24 ‘‘(A) IN GENERAL.—For purposes of para25 graph (1), the term ‘aggregate period of quali-
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1 fied prior coverage’ means, with respect to com2 mencement of coverage of an individual under

3 a group health plan, the aggregate of the quali4 fied coverage periods of such individual occur5 ring before the date of such commencement.

6 Such period shall be treated as zero if there is

7 more than a 60-day break in coverage under a

8 group health plan between the date the most re9 cent qualified coverage period ends and the date

10 of such commencement.

11 ‘‘(B) QUALIFIED COVERAGE PERIOD.—

12 ‘‘(i) IN GENERAL.—For purposes of

13 this paragraph, the term ‘qualified cov14 erage period’ means, with respect to an in15 dividual, any period of coverage of the in16 dividual under a group health plan.

17 ‘‘(ii) DISREGARDING PERIODS BEFORE

18 BREAKS IN COVERAGE.—Such term does

19 not include any period occurring before

20 any 60-day break in coverage under a

21 group health plan.

22 ‘‘(C) WAITING PERIOD NOT TREATED AS A

23 BREAK IN COVERAGE.—For purposes of sub24 paragraphs (A) and (B), any period that is in

25 a waiting period for any coverage under a
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1 group health plan shall not be considered to be

2 a break in coverage under a group health plan.

3 ‘‘(D) INCLUSION OF CONTINUATION COV4 ERAGE.—For purposes of this paragraph, con5 tinuation coverage, as defined in subsection

6 (f)(2), is treated as coverage under the group

7 health plan to which such continuation coverage

8 relates.

9 ‘‘(E) ESTABLISHMENT OF PERIOD.—A

10 qualified coverage period with respect to an in11 dividual shall be established through presen12 tation of certifications described in paragraph

13 (4) or in such other manner as may be specified

14 in regulation.

15 ‘‘(F) TREATMENT OF COVERAGE BEFORE

16 JANUARY 1, 1996.—In no event shall a qualified

17 coverage period with respect to an individual in18 clude any coverage before January 1, 1996, un19 less such coverage is under the group health

20 plan under which the individual was covered as

21 of December 31, 1995.

22 ‘‘(4) CERTIFICATION OF PERIOD OF PRIOR COV23 ERAGE.—The plan administrator of a group health

24 plan shall, on request made on behalf of an individ25 ual covered (or previously covered) under the plan,
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1 provide for a certification of the period of coverage

2 of the individual under the plan and of the waiting

3 period (if any) imposed with respect to the individ4 ual for any coverage under the plan.

5 ‘‘(5) APPLICATION TO SMALL EMPLOYER

6 PLANS.—For purposes of applying this subsection

7 and so much of this section as relates to this sub8 section, subsection (d)(1) shall not apply.

9 ‘‘(h) NONDISCRIMINATION IN ELIGIBILITY BASED ON

10 HEALTH STATUS FOR CERTAIN PREVIOUSLY COVERED

11 INDIVIDUALS.—

12 ‘‘(1) IN GENERAL.—A group health plan meets

13 the requirements of this subsection only if the plan

14 does not establish eligibility, continuation, enroll15 ment, or contribution requirements for a qualified

16 individual based on factors directly related to the

17 health status, medical condition, claims experience,

18 receipt of health care, medical history, disability, or

19 evidence of insurability of the individual.

20 ‘‘(2) QUALIFIED INDIVIDUAL DEFINED.—For

21 purposes of this subsection, the term ‘qualified indi22 vidual’ means an individual who (at the time of de23 termining eligibility, continuation, enrollment, or

24 contributions with respect to a group health plan)

25 has an aggregate period of qualified prior coverage
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1 (as defined in subsection (g)(3)(A)) of greater than

2 zero.

3 ‘‘(3) CONSTRUCTION.—Nothing in this sub4 section shall be construed as preventing a group

5 health plan from establishing preexisting condition

6 limitations and restrictions consistent with sub7 section (g).’’

8 (b) NOTICE.—Subsection (f)(6)(A) of section 4980B

9 of such Code is amended by inserting before the period

10 the following: ‘‘and subsections (g) and (h)’’.

11 (c) TECHNICAL AMENDMENTS.—

12 (1) Subsection (a) of section 4980B of such

13 Code is amended by striking ‘‘the requirements of’’

14 and all that follows and inserting ‘‘the requirements

15 of—

16 ‘‘(1) subsection (f) with respect to any qualified

17 beneficiary,

18 ‘‘(2) subsection (g) with respect to any individ19 ual covered under the group health plan, or

20 ‘‘(3) subsection (h) with respect to any individ21 ual.’’

22 (2) Subsection (f) of section 4980B of such

23 Code is further amended—

24 (A) in paragraph (2)(B)(i)(III), by striking

25 ‘‘(g)(1)(D)(iii)’’ and inserting ‘‘(i)(1)(D)(iii)’’,
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1 (B) in paragraph (2)(B)(iv)(II), by strik2 ing ‘‘(g)(1)(D)’’ and inserting ‘‘(i)(1)(D)’’,

3 (C) in the last sentence of paragraph (3),

4 by striking ‘‘(g)(1)(D)’’ and inserting

5 ‘‘(i)(1)(D)’’, and

6 (D) in paragraph (5)(B), by striking

7 ‘‘(g)(1)’’ and inserting ‘‘(i)(1)’’.

8 (d) EFFECTIVE DATE.— The amendments made by

9 this section shall apply to plan years beginning after De10 cember 31, 1995.

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