I

103D CONGRESS

1ST SESSION H. R. 727

To amend the Internal Revenue Code of 1986 and the Social Security Act

to provide for health insurance coverage for pregnant women and children

through employment-based insurance and through a State-based health

plan.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 2, 1993

Mr. MATSUI introduced the following bill; which was referred jointly to the

Committees on Ways and Means, Energy and Commerce, and Education

and Labor

A BILL

To amend the Internal Revenue Code of 1986 and the Social

Security Act to provide for health insurance coverage

for pregnant women and children through employmentbased insurance and through a State-based health plan.

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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Children and Pregnant Women Health Insurance Act of

6 1993’’.
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1 (b) TABLE OF CONTENTS.—The table of contents of

2 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—REQUIRING EMPLOYERS TO PROVIDE HEALTH

INSURANCE COVERAGE FOR PREGNANT WOMEN AND CHILDREN

Sec. 101. ‘‘Pay-or-play’’ requirement.

Sec. 102. Meeting requirement through enrollment of employees and families

under qualified employer health plans.

‘‘TITLE XXI—REQUIREMENT FOR ENROLLMENT OF EMPLOYEES

UNDER A QUALIFIED EMPLOYER HEALTH PLAN

‘‘Sec. 2100. Relation to ‘pay-or-play’ requirement.

‘‘PART A—EMPLOYER REQUIREMENT TO ENROLL EMPLOYEES AND FAMILIES

IN A QUALIFIED EMPLOYER HEALTH PLAN

‘‘Sec. 2101. Application to full-time employees.

‘‘Sec. 2102. Application to part-time employees.

‘‘Sec. 2103. Application to seasonal and temporary employees.

‘‘Sec. 2104. Treatment of all family members as a unit; uniform treatment

of full-time employees and of part-time employees.

‘‘Sec. 2105. Application of requirement to employers of different sizes.

‘‘Sec. 2106. Timing of enrollment; period of coverage.

‘‘PART B—REQUIREMENTS FOR QUALIFIED EMPLOYER HEALTH PLANS

‘‘Sec. 2121. Qualified employer health plan defined.

‘‘Sec. 2122. Requirements relating to employee premiums and cost-sharing.

‘‘PART C—STANDARDS FOR QUALIFIED HEALTH PLANS

‘‘Sec. 2151. Certification of qualified health plans.

‘‘Sec. 2152. Treatment of family as a unit; coverage period; health plan

cards.

‘‘Sec. 2153. Requirement respecting required health services.

‘‘Sec. 2154. Requirements respecting limits on pre-existing condition exclusions and coverage standards for required health services.

‘‘Sec. 2155. Requirements respecting limits on cost-sharing.

‘‘Sec. 2156. Payment rates.

‘‘Sec. 2157. Coordination and portability of health coverage under qualified health plans.

‘‘Sec. 2158. Consumer protections.

‘‘Sec. 2159. Preemption of certain State and Federal requirements.

‘‘Sec. 2160. Use of uniform claims forms.

‘‘PART D—DEFINITIONS AND MISCELLANEOUS

‘‘Sec. 2181. Definitions.

‘‘Sec. 2182. Nonapplication to residents of Puerto Rico and territories.
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TITLE II—PROVISION OF HEALTH INSURANCE FOR PREGNANT

WOMEN AND CHILDREN THROUGH STATE CHILDREN AND

PREGNANT WOMEN HEALTH PLANS

Sec. 201. State children and pregnant women health plans.

‘‘TITLE XXII—STATE CHILDREN AND PREGNANT WOMEN

HEALTH PLANS

‘‘Sec. 2200. Establishment of State children and pregnant women health

plans.

‘‘PART A—PLAN REQUIREMENTS RELATING TO ELIGIBILITY AND

ENROLLMENT

‘‘Sec. 2201. General requirements; application process.

‘‘Sec. 2202. Coverage period; termination of enrollment.

‘‘Sec. 2203. Requirement of health insurance coverage.

‘‘PART B—BENEFITS

‘‘Sec. 2211. Covered health services.

‘‘Sec. 2212. Preventive care services.

‘‘Sec. 2213. Major medical services.

‘‘Sec. 2214. Extended medical services.

‘‘Sec. 2215. Scope of coverage.

‘‘PART C—PAYMENTS FOR BENEFITS; DEDUCTIBLE, COINSURANCE, AND

STOP-LOSS PROTECTION FOR REQUIRED HEALTH SERVICES

‘‘Sec. 2221. Payment rates.

‘‘Sec. 2222. Application of deductible.

‘‘Sec. 2223. Coinsurance for major medical services and extended medical

services.

‘‘Sec. 2224. Limit on cost-sharing for required health services.

‘‘Sec. 2225. Exclusions.

‘‘Sec. 2226. Application of particular qualified health plan requirements.

‘‘PART D—PREMIUMS; FEDERAL CHILDREN AND PREGNANT WOMEN

HEALTH INSURANCE TRUST FUND

‘‘Sec. 2231. Premiums.

‘‘Sec. 2232. Collection of premiums.

‘‘Sec. 2233. Federal Children and Pregnant Women Health Insurance

Trust Fund.

‘‘Sec. 2234. Transfer payments in the case of multiple employers.

‘‘Sec. 2235. Use of uniform claims forms.

‘‘Sec. 2236. Payments to States.

‘‘PART E—ASSISTANCE FOR LOW-INCOME INDIVIDUALS

‘‘Sec. 2241. Assistance for individuals enrolled on a non-employment basis.

‘‘Sec. 2242. Assistance for individuals covered under qualified employer

health plans.

‘‘Sec. 2243. Applications for assistance.

‘‘Sec. 2244. Reconciliation of premium assistance through use of income

statements.

‘‘Sec. 2245. Treatment of certain cash assistance recipients.
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‘‘Sec. 2246. Computation of family adjusted total income.

‘‘PART F—ADMINISTRATIVE PROVISIONS

‘‘Sec. 2261. General administration through insurance companies.

‘‘Sec. 2262. Quality assurance.

‘‘Sec. 2263. Beneficiary claims safeguards.

‘‘Sec. 2264. Administrative efficiency standards.

‘‘Sec. 2265. Health maintenance organizations.

‘‘Sec. 2266. Program integrity; miscellaneous provisions.

‘‘Sec. 2267. Demonstration project authority.

‘‘PART G—DEFINITIONS AND MISCELLANEOUS

‘‘Sec. 2281. Incorporation of certain definitions used in other health-related titles.

‘‘Sec. 2282. Other definitions.

‘‘Sec. 2283. Nonapplication to residents of Puerto Rico and territories.

Sec. 202. Coordination between State children and pregnant women health

plans and medicaid plans.

TITLE III—HEALTH INSURANCE REFORM FOR SMALL

EMPLOYERS

Sec. 301. Excise tax on premiums received on health insurance policies which

do not meet certain requirements.

Sec. 302. Group health insurance standards.

‘‘TITLE XXIII—INSURANCE REFORM FOR SMALL EMPLOYERS

‘‘Sec. 2301. Application of requirements to insured small employer health

plans.

‘‘Sec. 2302. Establishment of standards.

‘‘Sec. 2303. Enrollment practice and guaranteed renewability requirements

for small employer health plans.

‘‘Sec. 2304. Rating practices for small employer health plans.

‘‘Sec. 2305. Basic benefit package for small employer health plans.

‘‘Sec. 2306. Miscellaneous disclosure and record-keeping requirements for

small employer health plans.

‘‘Sec. 2307. Nonapplication in Puerto Rico and the territories.

‘‘Sec. 2308. Definitions.

1 TITLE I—REQUIRING EMPLOY2 ERS TO PROVIDE HEALTH IN3 SURANCE COVERAGE FOR

4 PREGNANT WOMEN AND

5 CHILDREN

6 SEC. 101. ‘‘PAY-OR-PLAY’’ REQUIREMENT.

7 (a) PREMIUM TAXES.—
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1 (1) IN GENERAL.—Subtitle C of the Internal

2 Revenue Code of 1986 (relating to employment

3 taxes) is amended by inserting after chapter 21 the

4 following new chapter:

5 ‘‘CHAPTER 21A—CHILDREN AND

6 PREGNANT WOMEN HEALTH PLAN TAXES

‘‘Sec. 3151. Imposition of tax.

‘‘Sec. 3152. Definitions and special rules.

7 ‘‘SEC. 3151. IMPOSITION OF TAX.

8 ‘‘(a) IMPOSITION OF TAX.—In addition to other

9 taxes, if an employee of any employer is not covered under

10 a qualified employer health plan of such employer—

11 ‘‘(1) TAX ON EMPLOYERS.—There is hereby im12 posed on such employer, with respect to having such

13 employee in his employ, a tax equal to 3.2 percent

14 of the wages paid by such employer to such em15 ployee.

16 ‘‘(2) TAX ON EMPLOYEES.—There is hereby im17 posed on the income of such employee a tax equal

18 to 1 percent of the wages received by such employee

19 from such employer.

20 ‘‘(3) WAGES TAKEN INTO ACCOUNT.—Wages

21 shall be taken into account under this subsection

22 only to the extent attributable to the period during

23 which such employee is not covered under a qualified

24 employer health plan of such employer.
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1 ‘‘(b) EXCEPTIONS.—

2 ‘‘(1) TRANSITION.—The taxes imposed by this

3 section shall not take effect before the date on which

4 the requirements of part A of title XXI of the Social

5 Security Act apply with respect to the employer

6 under section 2105(a) of such Act.

7 ‘‘(2) EMPLOYEES COVERED BY ANOTHER EM8 PLOYER’S PLAN.—The taxes imposed by subsection

9 (a)(2) of this section shall not apply to wages paid

10 to any employee of an employer for any period such

11 employee is covered by a qualified employer health

12 plan of another employer (whether as an employee

13 or family member of an employee).

14 ‘‘(3) EMPLOYEES COVERED BY FEDERAL

15 HEALTH PLAN.—The taxes imposed by this section

16 shall not apply to wages paid to any employee of the

17 United States if, by reason of such employment (or

18 the employment of a family member), the em19 ployee—

20 ‘‘(A) is enrolled in a health benefits plan

21 under chapter 89 of title 5, United States Code,

22 or

23 ‘‘(B) is provided medical and dental bene24 fits under chapter 55 of title 10 of such Code.
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1 ‘‘SEC. 3152. DEFINITIONS AND SPECIAL RULES.

2 ‘‘(a) WAGES.—For purposes of this chapter, the term

3 ‘wages’ has the meaning given such term by section

4 3121(a) except that—

5 ‘‘(1) the modifications of subsection (b) shall

6 apply in determining whether any service is employ7 ment, and

8 ‘‘(2) the applicable contribution base under sec9 tion 3121(x)(2) (relating to hospital insurance) shall

10 be used under section 3121(a)(1) for purposes of

11 this chapter.

12 ‘‘(b) EMPLOYMENT.—For purposes of this chapter—

13 ‘‘(1) IN GENERAL.—Except as modified in

14 paragraph (2), the term ‘employment’ has the mean15 ing given such term by section 3121(b).

16 ‘‘(2) MODIFICATIONS.—The modifications re17 ferred to in this paragraph are that—

18 ‘‘(A) paragraphs (5), (6), (7), (8), and (9)

19 of section 3121(b) shall not apply, and

20 ‘‘(B) subsections (r) and (w) of section

21 3121 shall not apply.

22 ‘‘(c) EMPLOYEE; EMPLOYER.—For purposes of this

23 chapter, the terms ‘employee’ and ‘employer’ have the

24 same meanings as such terms have for purposes of chapter

25 21.
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1 ‘‘(d) QUALIFIED EMPLOYER HEALTH PLAN.—For

2 purposes of this chapter, the term ‘qualified employer

3 health plan’ has the meaning given such term in section

4 2121(a) of the Social Security Act.

5 ‘‘(e) DEDUCTION FROM WAGES.—Rules similar to

6 the rules of section 3102 shall apply to the tax imposed

7 by section 3151(a)(2).

8 ‘‘(f) OTHER RULES.—

9 ‘‘(1) IN GENERAL.—Rules similar to the rules

10 of sections 3123, 3125, and 3126, and subsections

11 (q) and (s) of section 3121, shall apply for purposes

12 of this chapter.

13 ‘‘(2) DEPOSITS.—The deposit requirements

14 under section 6302 applicable to the taxes imposed

15 by chapter 21 shall apply to the taxes imposed by

16 this chapter.

17 ‘‘(3) MULTIPLE EMPLOYERS.—

18 ‘‘(A) IN GENERAL.—Except to the extent

19 inconsistent with subparagraph (B), rules simi20 lar to the rules of section 6413 shall apply to

21 the tax imposed by section 3151(a)(2).

22 ‘‘(B) CONTRIBUTION BASE TO APPLY TO

23 WAGES OF ENTIRE FAMILY.—In applying sec24 tion 6413(c)(1) for purposes of subparagraph

25 (A), the employee and the employee’s spouse
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1 and children (as defined in section 2282 of the

2 Social Security Act) shall be treated as 1 em3 ployee. The credit or refund allowable by reason

4 of the preceding sentence shall be allocated

5 among such individuals in such manner as the

6 Secretary may by regulations prescribe.’’

7 (2) CLERICAL AMENDMENT.—The table of

8 chapters for such subtitle C is amended by inserting

9 after the item relating to chapter 21 the following

10 new item:

‘‘Chapter 21A. Children and pregnant women health plan taxes.’’

11 (b) PENALTY TAXES.—

12 (1) IN GENERAL.—Chapter 47 of such Code is

13 amended by adding at the end thereof the following

14 new section:

15 ‘‘SEC. 5000A. FAILURE TO ENROLL EMPLOYEES AND DE16 PENDENTS UNDER STATE CHILDREN AND

17 PREGNANT WOMEN HEALTH PLAN.

18 ‘‘(a) IN GENERAL.—If the tax imposed by section

19 3151 applies to wages (as defined in section 3152) paid

20 by an employer to any individual, there is hereby imposed

21 a tax on the failure by the employer to provide to the State

22 in which the individual resides (in such form and manner

23 as such Secretary may specify and no later than the date

24 enrollment under a qualified employer health plan is re25 quired under section 2105(a) of the Social Security Act)
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1 completed application forms for enrollment with the State

2 children and pregnant women health plan (under title

3 XXII of such Act) of employees (and family members) re4 quired to be enrolled under such section and not enrolled

5 under a qualified employer health plan.

6 ‘‘(b) AMOUNT OF TAX.—

7 ‘‘(1) IN GENERAL.—The amount of the tax im8 posed by subsection (a) on any failure with respect

9 to an employee shall be $100 for each day in the

10 noncompliance period with respect to such failure.

11 ‘‘(2) NONCOMPLIANCE PERIOD.—For purposes

12 of this section, the term ‘noncompliance period’

13 means, with respect to any failure, the period—

14 ‘‘(A) beginning on the date such failure 1st

15 occurs, and

16 ‘‘(B) ending on the date such failure is

17 corrected.

18 ‘‘(c) LIABILITY FOR TAX.—The employer shall be lia19 ble for the tax imposed by subsection (a).

20 ‘‘(d) EXCEPTIONS.—

21 ‘‘(1) TAX NOT TO APPLY WHERE FAILURE NOT

22 DISCOVERED EXERCISING REASONABLE DILI23 GENCE.—No tax shall be imposed by subsection (a)

24 on any failure during any period for which it is es25 tablished to the satisfaction of the Secretary that the
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1 employer did not know, and exercising reasonable

2 diligence would not have known, that such failure

3 existed.

4 ‘‘(2) TAX NOT TO APPLY TO FAILURES COR5 RECTED WITHIN 30 DAYS.—No tax shall be imposed

6 by subsection (a) on any failure if—

7 ‘‘(A) such failure was due to reasonable

8 cause and not to willful neglect, and

9 ‘‘(B) such failure is corrected during the

10 1st 30 days of the noncompliance period with

11 respect to such failure.

12 ‘‘(3) WAIVER BY SECRETARY.—In the case of a

13 failure which is due to reasonable cause and not to

14 willful neglect, the Secretary may waive part or all

15 of the tax imposed by subsection (a) to the extent

16 that the payment of such tax would be unduly bur17 densome relative to the failure involved.’’

18 (c) DEFICIENCY PROCEDURES TO APPLY TO CHAP19 TER 47.—

20 (1) The following provisions of the Internal

21 Revenue Code of 1986 are each amended by striking

22 ‘‘or 44’’ each place it appears and inserting ‘‘44, or

23 47’’:

24 (A) Subsections (a) and (b)(2) of section

25 6211.
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1 (B) Section 6212(a).

2 (C) Subsections (a) and (g) of section

3 6213.

4 (D) Subsections (c) and (d) of section

5 6214.

6 (E) Section 6161(b)(1).

7 (F) Section 6344(a)(1).

8 (G) Subsections (a) and (b)(1) of section

9 6512.

10 (H) Section 7422(e).

11 (2) Sections 6211(a) and 6862(a) of such Code

12 are each amended by striking ‘‘and 44’’ and insert13 ing ‘‘44, and 47’’.

14 (3) Paragraph (1) of section 6212(b) of such

15 Code is amended—

16 (A) by striking ‘‘or chapter 44’’ and insert17 ing ‘‘chapter 44, or chapter 47’’, and

18 (B) by striking ‘‘chapter 44, and this chap19 ter’’ and inserting ‘‘chapter 44, chapter 47, and

20 this chapter’’.

21 (4) Paragraph (1) of section 6212(c) of such

22 Code is amended by striking ‘‘or of chapter 44 tax

23 for the same taxable period’’ and inserting ‘‘, of

24 chapter 44 tax for the same taxable period, or of
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1 chapter 47 for each act or failure to act to which the

2 petition relates’’.

3 (d) CLERICAL AMENDMENTS.—

4 (1) So much of chapter 47 of such Code as pre5 cedes subsection (a) of section 5000 is amended to

6 read as follows:

7 ‘‘CHAPTER 47—TAXES RELATING TO

8 GROUP HEALTH PLANS

‘‘Sec. 5000. Contributions to nonconforming large group health

plans.

‘‘Sec. 5000A. Failure to enroll employees under State children

and pregnant women health plan.

9 ‘‘SEC. 5000. CONTRIBUTIONS TO NONCONFORMING LARGE

10 GROUP HEALTH PLANS.’’

11 (2) The table of chapters for subtitle D of such

12 Code is amended by striking the item relating to

13 chapter 47 and inserting the following:

‘‘Chapter 47. Taxes relating to group health plans.’’

14 (e) EFFECTIVE DATE.—The amendments made by

15 this section shall apply to remuneration paid after Decem16 ber 31, 1994.

17 SEC. 102. MEETING REQUIREMENT THROUGH ENROLL18 MENT OF EMPLOYEES AND FAMILIES UNDER

19 QUALIFIED EMPLOYER HEALTH PLANS.

20 The Social Security Act is amended by adding at the

21 end the following new title:
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1 ‘‘TITLE XXI—REQUIREMENT FOR ENROLL2 MENT OF EMPLOYEES UNDER A QUALI3 FIED EMPLOYER HEALTH PLAN

4 ‘‘SEC. 2100. RELATION TO ‘PAY-OR-PLAY’ REQUIREMENT.

5 ‘‘If an employer fails to enroll employees (and family

6 members) under a qualified employer health plan in ac7 cordance with this title—

8 ‘‘(1) the employer and employee are each liable

9 for payment of an excise tax under section 3151(a)

10 of the Internal Revenue Code of 1986, and

11 ‘‘(2) the employer is required, under section

12 5000A of such Code, to provide information nec13 essary to enroll such employees and family members

14 under the State children and pregnant women health

15 plan under title XXII for the State in which the em16 ployee resides.

17 ‘‘PART A—EMPLOYER REQUIREMENT TO ENROLL EM18 PLOYEES AND FAMILIES IN A QUALIFIED EM19 PLOYER HEALTH PLAN

20 ‘‘SEC. 2101. APPLICATION TO FULL-TIME EMPLOYEES.

21 ‘‘(a) UNMARRIED EMPLOYEES.—

22 ‘‘(1) IN GENERAL.—Except as provided in this

23 part, each employer shall, in accordance with this

24 title, enroll each of its full-time employees who is un25 married in a qualified employer health plan.
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1 ‘‘(2) MULTIPLE FULL-TIME EMPLOYMENT.—

2 ‘‘(A) EACH OFFERS QUALIFIED PLAN.—In

3 the case of an unmarried individual who is a

4 full-time employee of more than 1 employer, if

5 more than 1 such employer offers the employee

6 enrollment under a qualified employer health

7 plan—

8 ‘‘(i) the individual shall elect (in a

9 manner specified by the Secretary) the

10 qualified employer health plan under which

11 the individual (and family members) will

12 be enrolled;

13 ‘‘(ii) a nonenrolling employer—

14 ‘‘(I) is not obligated to enroll the

15 employee (and family members) under

16 its qualified employer health plan (if

17 any) and may not charge the individ18 ual any premiums for required cov19 erage under the qualified employer

20 health plan, and

21 ‘‘(II) is not liable for any tax

22 under section 3151(a)(1) of the Inter23 nal Revenue Code of 1986 but is lia24 ble for a nonenrolling employer pre-
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1 mium under section 2234(a)(1)(A);

2 and

3 ‘‘(iii) the enrolling employer is eligible

4 for a enrolling employer subsidy under sec5 tion 2234(a)(1)(B).

6 ‘‘(B) ONLY 1 OFFERS QUALIFIED PLAN.—

7 In the case of an unmarried individual who is

8 a full-time employee of more than 1 employer,

9 if only 1 employer offers the employee enroll10 ment under a qualified employer health plan—

11 ‘‘(i) the individual shall be enrolled

12 under such plan and, pursuant to sub13 section (b)(2) of section 3151 of the Inter14 nal Revenue Code of 1986, is not subject

15 to taxes under subsection (a)(2) of such

16 section with respect to employment with

17 nonenrolling employers, and

18 ‘‘(ii) the enrolling employer is eligible

19 for a enrolling employer subsidy under sec20 tion 2234(a)(1)(B).

21 ‘‘(b) MARRIED EMPLOYEES.—

22 ‘‘(1) IN GENERAL.—Except as provided in this

23 part, each employer shall, in accordance with this

24 title, enroll each of its full-time employees who is

25 married in a qualified employer health plan.
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1 ‘‘(2) BOTH FULL-TIME EMPLOYEES.—In the

2 case of married individuals, if both are full-time em3 ployees of 1 or more employers, rules established by

4 the Secretary based on the rules under subsection

5 (a)(2) for multiple employment of unmarried individ6 uals shall apply.

7 ‘‘(c) CONSTRUCTION.—Nothing in this section shall

8 be construed as preventing the nonenrolling plan from

9 supplementing the benefits of the enrolling plan.

10 ‘‘(d) DEFINITIONS.—In this section, the terms ‘en11 rolling employer’ and ‘enrolling plan’ mean, with respect

12 to an individual or a married couple, the employer that

13 offers the qualified employer health plan in which the indi14 vidual or couple is enrolled under subsection (a)(2)(A)(i)

15 or (b)(2) and such plan, respectively, and the terms

16 ‘nonenrolling employer’ and ‘nonenrolling plan’ mean the

17 other employer and other qualified employer health plan,

18 respectively.

19 ‘‘SEC. 2102. APPLICATION TO PART-TIME EMPLOYEES.

20 ‘‘(a) APPLICATION OF FULL-TIME EMPLOYEE

21 RULES.—Subject to subsection (b), the provisions of sec22 tion 2101 shall apply to part-time employees in the same

23 manner as they apply to full-time employees.

24 ‘‘(b) SEPARATE TREATMENT OF PART-TIME AND

25 FULL-TIME EMPLOYEES UNDER QUALIFIED EMPLOYER
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1 HEALTH PLANS.—For rule regarding separate, but uni2 form, treatment of full-time and part-time employees (and

3 family members), see section 2104(b).

4 ‘‘SEC. 2103. APPLICATION TO SEASONAL AND TEMPORARY

5 EMPLOYEES.

6 ‘‘(a) ENROLLMENT UNDER QUALIFIED EMPLOYER

7 HEALTH PLAN NOT AFFECTING APPLICATION OF EXCISE

8 TAX.—The enrolling by an employer of an employee des9 ignated under subsection (b) as a seasonal or temporary

10 employee (as defined in section 2181(b)(3)), whether a

11 part-time or full-time employee, under the qualified em12 ployer health plan of the employer shall not be considered,

13 for purposes of section 3151 of the Internal Revenue Code

14 of 1986, coverage of the employee under a qualified em15 ployer health plan.

16 ‘‘(b) DESIGNATION OF SEASONAL OR TEMPORARY

17 EMPLOYEES.—Each employer shall designate, at the time

18 of initial employment and in a manner specified by the

19 Secretary, if the individual is to be treated under this title

20 and title XXII as a seasonal or temporary employee. The

21 Secretary shall provide appropriate sanctions (that may

22 include civil money penalties) for the knowing designation

23 as seasonal or temporary employees of individuals who are

24 not of seasonal or temporary employees.
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1 ‘‘SEC. 2104. TREATMENT OF ALL FAMILY MEMBERS AS A

2 UNIT; UNIFORM TREATMENT OF FULL-TIME

3 EMPLOYEES AND OF PART-TIME EMPLOYEES.

4 ‘‘(a) TREATMENT OF ALL FAMILY MEMBERS AS

5 UNIT.—

6 ‘‘(1) IN GENERAL.—In accordance with section

7 2152(a), enrollment of an employee in a qualified

8 employer health plan shall include enrollment of the

9 other family members of the employee. The fact that

10 an employee is not a pregnant woman or a child (or

11 has any family members who are pregnant women or

12 children) does not permit or prevent the enrollment

13 of the employee under the qualified employer health

14 plan in accordance with this part.

15 ‘‘(2) TREATMENT OF CHILDREN.—In the case

16 of an individual who is a child, the employer of the

17 child is not required to enroll the child in a qualified

18 employer health plan by virtue of the part-time or

19 full-time employment of the child (whether or not

20 the parent of the child is a full-time or part-time

21 employee). However, the employer is liable for taxes

22 under section 3151(a)(1) of the Internal Revenue

23 Code of 1986 (or payment of a nonenrolling em24 ployer premium under section 2234(a)(1)(A)) with

25 respect to such employment, and the child is, subject
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1 to section 3151(b)(2) of such Code, liable for taxes

2 under section 3151(a)(2) of such Code.

3 ‘‘(b) UNIFORM TREATMENT OF FULL-TIME EMPLOY4 EES AND OF PART-TIME EMPLOYEES.—Except as author5 ized under sections 2101 and 2102 (insofar as they permit

6 certain multiple-employed individuals to elect coverage

7 under qualified employer health plans) and as provided

8 under section 2103 and subsection (a)(2) of this section,

9 an employer health plan is not a qualified employer health

10 plan if the plan—

11 ‘‘(1) enrolls some (but not all) full-time employ12 ees (and family members) required to be enrolled

13 under this part, or

14 ‘‘(2) enrolls some (but not all) part-time em15 ployees (and family members) required to be enrolled

16 under this part.

17 However, a plan may be a qualified employer health plan

18 and enroll only full-time employees (and family members),

19 but not part-time employees (and family members).

20 ‘‘SEC. 2105. APPLICATION OF REQUIREMENT TO EMPLOY21 ERS OF DIFFERENT SIZES.

22 ‘‘(a) IN GENERAL.—Except as provided in subsection

23 (b), the requirements of this part apply—

24 ‘‘(1) as of January 1, 1995, to large employers

25 (as defined in section 2181(c)(3));
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1 ‘‘(2) as of January 1, 1996, to medium-size em2 ployers (as defined in section 2181(c)(2)) that nor3 mally employ at least 50 employees on a typical

4 business day during the calendar year;

5 ‘‘(3) as of January 1, 1997, to medium-size em6 ployers not described in paragraph (2); and

7 ‘‘(4) as of January 1, 1998, to small employers

8 (as defined in section 2181(c)(1)).

9 ‘‘(b) TRANSITION FOR COLLECTIVE BARGAINING

10 AGREEMENTS.—The requirements of this part shall not

11 apply to employers with respect to their employees, insofar

12 as such employees are covered under a collective bargain13 ing agreement ratified before the date of the enactment

14 of this title, earlier than the date of termination of such

15 agreement (determined without regard to any extension

16 thereof agreed to after such date of enactment).

17 ‘‘SEC. 2106. TIMING OF ENROLLMENT; PERIOD OF COV18 ERAGE.

19 ‘‘(a) TIMING OF ENROLLMENT; NOTICES.—

20 ‘‘(1) IN GENERAL.—Enrollment under this part

21 shall occur not later than the date on which the em22 ployment, for which such enrollment is required

23 under this part, commences.

24 ‘‘(2) REFERENCE TO DISCLOSURE REQUIRE25 MENT.—For requirement for disclosure to employees
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1 of information respecting the availability of low-in2 come assistance under part E of title XXII, see sec3 tion 2158(a)(1).

4 ‘‘(b) PERIOD OF COVERAGE.—

5 ‘‘(1) BEGINNING OF COVERAGE.—Coverage

6 under a qualified employer health plan shall begin in

7 accordance with section 2152(b).

8 ‘‘(2) TERMINATION OF COVERAGE.—

9 ‘‘(A) IN GENERAL.—If an enrollment is ef10 fected under this part on the basis of employ11 ment, coverage under such enrollment may be

12 terminated, subject to subparagraph (B), on the

13 last day of the month (or of any subsequent

14 month) during which such employment is termi15 nated.

16 ‘‘(B) NOTICE REQUIRED.—Effective on the

17 date specified in section 2157(b)(2), coverage

18 under a qualified employer health plan shall not

19 be terminated unless notice has been provided

20 to the Secretary, as required in section

21 2157(b)(1), of such termination at least 7 days

22 before the last day of the month in which em23 ployment is terminated (or, if later, 7 days be24 fore the last day of the month in which the cov25 erage is terminated).
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1 ‘‘(3) TREATMENT OF FAMILY MEMBERS.—Sub2 ject to section 2152, the period of coverage for fam3 ily members of an employee shall be the same as the

4 period of coverage for the employee.

5 ‘‘PART B—REQUIREMENTS FOR QUALIFIED EMPLOYER

6 HEALTH PLANS

7 ‘‘SEC. 2121. QUALIFIED EMPLOYER HEALTH PLAN DEFINED.

8 ‘‘(a) IN GENERAL.—In this title and title XXII, sub9 ject to subsection (b), the term ‘qualified employer health

10 plan’ means an employment-related health plan (as de11 fined in section 2308(a)(2)) that—

12 ‘‘(1) is a qualified health plan (as defined in

13 section 2151(a)),

14 ‘‘(2) except as provided in section 2122, does

15 not impose premiums, deductibles, or copayments on

16 employees (and family members) required to be en17 rolled in a qualified employer health plan under part

18 A, and

19 ‘‘(3) meets the requirements of section

20 2242(c)(3) (relating to coordination of low-income

21 assistance for deductibles).

22 ‘‘(b) TYPES OF QUALIFIED EMPLOYER HEALTH

23 PLANS.—

24 ‘‘(1) LARGE EMPLOYERS.—A large employer

25 may meet the requirements of this title through a
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1 qualified employer health plan that is an insured

2 plan or that is a self-insured plan.

3 ‘‘(2) MEDIUM-SIZE AND SMALL EMPLOYERS.—

4 A medium-size or small employer may meet the re5 quirements of this title only through a qualified em6 ployer health plan that is an insured plan that im7 poses premiums only in accordance with sections

8 2122 and 2304.

9 ‘‘(3) INSURED PLAN DEFINED.—The term ‘in10 sured plan’ has the meaning given the term ‘applica11 ble accident and health insurance contract’ in sec12 tion 5000B(e)(1) of the Internal Revenue Code of

13 1986.

14 ‘‘SEC. 2122. REQUIREMENTS RELATING TO EMPLOYEE PRE15 MIUMS AND COST-SHARING.

16 ‘‘(a) ENROLLEE PREMIUMS AND COST-SHARING

17 PERMITTED.—

18 ‘‘(1) IN GENERAL.—A qualified employer health

19 plan may require an enrollee to pay for—

20 ‘‘(A) premiums for coverage under the

21 plan, but only if the premiums do not exceed

22 the limitations imposed under this section, and

23 ‘‘(B) cost-sharing amounts for coverage

24 under the plan, but only if the cost-sharing does

25 not exceed the limitations on deductibles,
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1 copayments, and coinsurance imposed with re2 spect to qualified health plans under section

3 2155.

4 ‘‘(2) TREATMENT OF ADDITIONAL, REQUIRED

5 COVERAGE.—If a qualified employer health plan pro6 vides benefits in addition to the benefits required

7 under this title and the employee is not permitted

8 the option of not accepting such additional benefits,

9 the plan—

10 ‘‘(A) may not impose a premium, for such

11 required and additional benefits, that exceeds

12 the premiums that may be imposed for the

13 basic benefits, and

14 ‘‘(B) shall assure that cost-sharing is not

15 imposed with respect to required health services

16 once the cost-sharing limit has been reached in

17 a year with respect to benefits for such services.

18 ‘‘(3) NONDISCRIMINATION IN PREMIUM

19 AMOUNTS.—Under a qualified employer health plan,

20 no employee may be charged a different premium for

21 similar benefits in the same employer health plan for

22 the same beneficiary class based on the age, sex, or

23 health status of the employee (or number, age, sex,

24 or health status of family members).

25 ‘‘(b) LIMITATION ON PREMIUMS.—
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1 ‘‘(1) MONTHLY PREMIUM LIMITED TO 20 PER2 CENT OF ACTUARIAL RATE.—

3 ‘‘(A) IN GENERAL.—A qualified employer

4 health plan may not require an employee to pay

5 a premium—

6 ‘‘(i) for coverage for a period of longer

7 than one month, or

8 ‘‘(ii) the amount of which on a month9 ly basis exceeds 20 percent of the monthly

10 actuarial rate (as defined under subpara11 graph (B)).

12 ‘‘(B) MONTHLY ACTUARIAL RATE DE13 FINED.—For purposes of this subsection, the

14 term ‘monthly actuarial rate’ means, with re15 spect to a qualified employer health plan in a

16 plan year, the average monthly per enrollee

17 amount that the plan estimates, for enrollees

18 under the plan during the year, would be nec19 essary to pay for the total benefits required

20 during the year under the plan (with respect to

21 required health services), including administra22 tive costs for the provision of such benefits and

23 an appropriate amount for a contingency mar24 gin.
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1 ‘‘(C) UNIFORM APPLICATION REGARDLESS

2 OF FAMILY COMPOSITION.—For purposes of

3 subparagraph (B), a qualified employer health

4 plan shall provide for the premium to be ap5 plied, and the monthly actuarial rate described

6 in such subparagraph to be estimated, for re7 quired health services for all covered individuals

8 within a family (without regard to the age, sex,

9 health status, or number of such individuals

10 covered within the family).

11 ‘‘(3) LIABILITY FOR PAYMENT OF PREMIUMS.—

12 An employee enrolled under a qualified employer

13 health plan is liable for payment of premiums re14 quired under that plan in accordance with this sub15 section. In no case shall an employee be liable for

16 premiums with respect to a qualified employer

17 health plan, other than the portion of the premium

18 which may be imposed on the employee consistent

19 with this section.

20 ‘‘(4) WITHHOLDING PERMITTED.—No provision

21 of State law shall prevent an employer of an em22 ployee enrolled under a qualified employer health

23 plan from withholding the amount of any premium

24 due by the employee under this subsection from the

25 wages paid the employee.
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1 ‘‘(5) CONSTRUCTION.—Nothing in this section

2 shall be construed—

3 ‘‘(A) as preventing an employer from pay4 ing part or all of the employee premium for re5 quired health services or other health services,

6 or

7 ‘‘(B) subject to subsection (a), from re8 quiring an employee to pay for all or part of the

9 premium for benefits for services other than re10 quired health services.

11 ‘‘PART C—STANDARDS FOR QUALIFIED HEALTH PLANS

12 ‘‘SEC. 2151. CERTIFICATION OF QUALIFIED HEALTH PLANS.

13 ‘‘(a) QUALIFIED HEALTH PLAN DEFINED.—For

14 purposes of this title, the term ‘qualified health plan’

15 means a health plan that the Secretary certifies, upon ap16 plication by the plan, to meet the requirements of this

17 part.

18 ‘‘(b) REVIEW AND RECERTIFICATION.—The Sec19 retary shall establish procedures for the periodic review

20 and recertification of plans as qualified health plans.

21 ‘‘(c) TERMINATION OF CERTIFICATION.—The Sec22 retary shall terminate the certification of a qualified

23 health plan if the Secretary determines that the plan no

24 longer meets the requirements for certification. Before

25 effecting a termination, the Secretary shall provide the
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1 plan notice and opportunity for a hearing on the proposed

2 termination.

3 ‘‘SEC. 2152. TREATMENT OF FAMILY AS A UNIT; COVERAGE

4 PERIOD; HEALTH PLAN CARDS.

5 ‘‘(a) TREATMENT OF FAMILY AS A UNIT.—

6 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

7 enrollment of an individual in a qualified health plan

8 shall include enrollment of the other family members

9 (as defined in section 2282(3)) of the individual.

10 ‘‘(2) TREATMENT OF INELIGIBLE INDIVID11 UALS.—Nothing in paragraph (1) shall be construed

12 as requiring a qualified health plan (or permitting a

13 State children and pregnant women health plan) to

14 enroll individuals who are not eligible individuals (as

15 defined in section 2282(2)).

16 ‘‘(b) BEGINNING OF COVERAGE.—

17 ‘‘(1) IN GENERAL.—In the case of an individual

18 enrolled under any qualified health plan, subject to

19 subsection (c), the benefits under the plan shall first

20 become available for required health services fur21 nished beginning on the first day of the month fol22 lowing the month of enrollment.

23 ‘‘(2) SPECIAL RULES.—The Secretary shall pro24 vide for such standards as may be necessary to pro25 vide for the allocation of responsibility among quali-
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1 fied health plans (including State children and preg2 nant women health plans) in the case of an inpatient

3 hospital stay, or in the case in which a single pay4 ment amount is made for other services provided

5 over a period of time, that begins during the period

6 of coverage under one qualified health plan and ends

7 during a period of coverage under another qualified

8 health plan.

9 ‘‘(c) STANDARDS TO REFLECT CHANGES IN FAMILY

10 AND EMPLOYMENT STATUS.—

11 ‘‘(1) IN GENERAL.—Under standards estab12 lished by the Secretary consistent with this sub13 section, qualified health plans shall provide for ap14 propriate changes in the coverage of family members

15 to take into account—

16 ‘‘(A) changes in family composition or sta17 tus, including marriage, divorce (or legal sepa18 ration), birth or adoption of children, and the

19 aging of children into adulthood, and

20 ‘‘(B) changes in employment status.

21 ‘‘(2) MONTHLY CHANGES.—Except as specifi22 cally provided in this subsection, such standards

23 shall be designed—

24 ‘‘(A) to effect a change in enrollment (or

25 status of enrollment) as of the first day of the
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1 first month (or, in order to provide for notice

2 and an opportunity for coordination among

3 plans, a later month) following the date of the

4 event causing the change,

5 ‘‘(B) to prevent any periods of noncoverage

6 under any qualified health plans, and

7 ‘‘(C) to provide, in the case of a change of

8 family status such as marriage, divorce, or legal

9 separation, for accounting and crediting of cost10 sharing among family members (described in

11 section 2157(c)) in an equitable and admin12 istrable manner.

13 ‘‘(3) TREATMENT OF NEWBORNS.—

14 ‘‘(A) BIRTH TO WOMAN DURING PERIOD

15 OF COVERAGE.—Any child born to a woman

16 during the period of coverage under a qualified

17 health plan shall, as of the date of birth, be

18 automatically enrolled and covered for benefits

19 under the plan.

20 ‘‘(B) BIRTH TO WOMAN WITHOUT COV21 ERAGE.—Any child born in the United States to

22 a woman who is not, at the time of birth, en23 rolled under a qualified health plan shall be

24 automatically enrolled and covered for benefits

25 under the State children and pregnant women
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1 health plan for the State in which the child is

2 born as of the date of birth if an application for

3 such enrollment is made not later than 60 days

4 after the date of birth or, if later, the end of

5 the year in which the child is born.

6 ‘‘(4) ADOPTION.—

7 ‘‘(A) TREATMENT OF VOLUNTARY RELIN8 QUISHMENT.—Any child who is voluntarily re9 linquished to a public or private agency shall,

10 upon the application by the agency, be enrolled

11 and covered for benefits under the State chil12 dren and pregnant women health plan for the

13 State in which the child resides as of the date

14 of the relinquishment, until the date of the

15 child’s placement for adoption.

16 ‘‘(B) TREATMENT OF ADOPTED CHIL17 DREN.—Any child who is placed for adoption

18 with an individual during the period the individ19 ual is enrolled and covered under a qualified

20 health plan shall, as of the date of the place21 ment for adoption, be treated as the child of the

22 individual and be automatically enrolled and

23 covered under such plan.

24 ‘‘(5) PLACEMENT IN CUSTODY OF PUBLIC

25 AGENCY PURSUANT TO COURT ORDER OR OTHER-
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1 WISE.—Any child who is removed from the family

2 and placed in the temporary custody of a public

3 agency pursuant to a court order or otherwise shall,

4 upon application by the public agency on or after the

5 date of the removal and placement with the public

6 agency, be deemed to be automatically enrolled and

7 covered for benefits under the State plan under title

8 XXII as of the date of the application, until the

9 child is returned to the family or placed for adop10 tion.

11 ‘‘(6) TREATMENT OF LEGAL WARDS, FOSTER

12 CHILDREN, ETC.—In cases not described in para13 graph (4) or (5), the Secretary shall establish stand14 ards relating to the time an individual described in

15 section 2282(1)(B)(ii) is treated as the child of the

16 person with custody and such other standards as

17 may be necessary to assure the proper coordination

18 of enrollment of children and other individuals

19 among qualified health plans and State children and

20 pregnant women health plans.

21 ‘‘(d) HEALTH PLAN CARDS.—In conjunction with en22 rollment of individuals under a qualified health plan, the

23 plan shall provide for the issuance of a card which may

24 be used for purposes of identification of such enrollment
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1 and the processing of claims for benefits under the plan.

2 Such card shall—

3 ‘‘(1) identify (as appropriate) the types of bene4 fits to which the individual is entitled under the

5 plan, and

6 ‘‘(2) contain such other information as the Sec7 retary (and the plan) shall specify.

8 ‘‘SEC. 2153. REQUIREMENT RESPECTING REQUIRED

9 HEALTH SERVICES.

10 ‘‘(a) REQUIREMENT.—Each qualified health plan

11 must provide for benefits for at least all required health

12 services (as defined in section 2211(a)(2)), in accordance

13 with standards established under section 2211(d).

14 ‘‘(b) TREATMENT OF ADDITIONAL BENEFITS.—

15 Nothing in this section shall be construed as preventing

16 a qualified health plan from including benefits in addition

17 to benefits for required health services.

18 ‘‘SEC. 2154. REQUIREMENTS RESPECTING LIMITS ON PRE19 EXISTING CONDITION EXCLUSIONS AND COV20 ERAGE STANDARDS FOR REQUIRED HEALTH

21 SERVICES.

22 ‘‘(a) IN GENERAL.—Except as provided under sub23 section (b), a qualified health plan—

24 ‘‘(1) may not deny, limit, or condition the cov25 erage under (or benefits of) the plan with respect to
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1 required health services based on the health status,

2 claims experience, receipt of health care, medical his3 tory, or lack of evidence of insurability, of an indi4 vidual, and

5 ‘‘(2) may not provide for exclusions from cov6 erage for required health services that are more re7 strictive than the exclusions for such services under

8 part C of title XXII.

9 ‘‘(b) PROHIBITION OF PRE-EXISTING CONDITION EX10 CLUSIONS.—A qualified health plan may not exclude cov11 erage with respect to required health services related to

12 treatment of a pre-existing condition.

13 ‘‘SEC. 2155. REQUIREMENTS RESPECTING LIMITS ON COST14 SHARING.

15 ‘‘(a) IN GENERAL.—Subject to subsection (b), a

16 qualified health plan may not impose premiums,

17 deductibles, copayments, or coinsurance with respect to re18 quired health services in excess of the premiums permitted

19 under this title and the deductible and coinsurance per20 mitted under part C of title XXII with respect to such

21 services (not taking into account any low-income assist22 ance provided under part E of title XXII).

23 ‘‘(b) ACTUARIALLY EQUIVALENCE PERMITTED FOR

24 EXTENDED MEDICAL SERVICES.—
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1 ‘‘(1) IN GENERAL.—A plan may provide for dif2 ferent premiums, deductibles, and copayments with

3 respect to extended medical services if the actuarial

4 value of such benefits (as defined in paragraph (3))

5 is not less than the equivalent of the actuarial value

6 of such benefits provided under the plan if this sub7 section did not apply. The previous sentence shall

8 not be construed as permitting a plan to provide for

9 a limit on cost-sharing in excess of the limit pro10 vided under section 2224.

11 ‘‘(2) GUIDELINES.—The Secretary shall estab12 lish guidelines for the application of paragraph (1).

13 Each State shall provide standards (consistent with

14 such guidelines) for the application of paragraph (1)

15 to plans offered in the State.

16 ‘‘(3) ACTUARIAL VALUE OF BENEFITS DE17 FINED.—In paragraph (1), the ‘actuarial value of

18 benefits’ of a plan is the amount by which the total

19 of the amounts payable as benefits under the plan

20 for extended medical services exceeds the amount of

21 the premiums, deductibles, copayments, and coinsur22 ance payable by the employee under the plan that

23 are attributable to such services, as determined on

24 an actuarial basis per enrollee for a plan year.
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1 (4) EXTENDED MEDICAL SERVICES DEFINED.—

2 In this subsection, the term ‘extended medical serv3 ices’ has the meaning given such term in section

4 2214(a).

5 ‘‘(c) CONSTRUCTION FOR OTHER THAN REQUIRED

6 HEALTH SERVICES.—Nothing in this section shall be con7 strued as preventing a qualified health plan from provid8 ing for deductibles, coinsurance, and copayments or other

9 restrictions with respect to services other than required

10 health services that are different from those permitted

11 with respect to required health services.

12 ‘‘SEC. 2156. PAYMENT RATES.

13 ‘‘(a) IN GENERAL.—A qualified health plan shall

14 make payment for required health services based on the

15 payment rates established under part C of title XXII.

16 ‘‘(b) TREATMENT OF HEALTH MAINTENANCE ORGA17 NIZATIONS.—Subsection (a) shall not apply to a plan of

18 an eligible organization (as defined in section 1876(b))

19 which provides for enrollee protections which are at least

20 as great as the enrollee protections provided under section

21 2265 (but without the application of section 2265(b)(5)

22 or 1876(c)(3)(B)).
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1 ‘‘SEC. 2157. COORDINATION AND PORTABILITY OF HEALTH

2 COVERAGE UNDER QUALIFIED HEALTH

3 PLANS.

4 ‘‘(a) IN GENERAL.—Each qualified health plan shall

5 provide for coordination of—

6 ‘‘(1) enrollment and termination of enrollment

7 among the qualified health plans and State children

8 and pregnant women health plans, and

9 ‘‘(2) application of deductibles and limitations

10 on cost-sharing among such plans,

11 in accordance with standards established by the Secretary

12 consistent with this section.

13 ‘‘(b) REQUIREMENT OF NOTICES WITH RESPECT TO

14 COVERAGE.—

15 ‘‘(1) IN GENERAL.—Each qualified health plan

16 shall provide notice at the time an individual’s cov17 erage under the plan begins or is terminated. Such

18 notice shall be provided (in a form and manner and

19 at a time specified by the Secretary)—

20 ‘‘(A) to the individual (or in the case of en21 rollment only of a child or children, to the par22 ent enrolling the child or children), and

23 ‘‘(B) effective (on the date specified in

24 paragraph (2)) to the Secretary.
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1 The notice under this paragraph shall include the

2 names and other identifying information of family

3 members whose coverage is affected by the change.

4 ‘‘(2) DATE OF REQUIREMENT FOR NOTICE TO

5 STATE CHILDREN AND PREGNANT WOMEN HEALTH

6 PLANS.—The date specified in this paragraph is

7 January 1, 1995, or, with respect to a qualified em8 ployer health plan of an employer, the date the re9 quirements of part A apply with respect to the em10 ployer under section 2105(a).

11 ‘‘(3) NOTICE TO BENEFICIARY AND OTHER

12 QUALIFIED HEALTH PLANS UPON OBTAINING COV13 ERAGE.—In the case of an individual who begins

14 coverage under a qualified employer health plan (or

15 under a State children and pregnant women health

16 plan on an employment basis), when the Secretary

17 receives notice under paragraph (1)(B)—

18 ‘‘(A) if, at the time of obtaining such cov19 erage, the individual is enrolled on a non-em20 ployment basis in a State children and pregnant

21 women health plan, the Secretary shall notify

22 the individual that coverage for such services on

23 such a basis or for such benefits shall be termi24 nated effective on the date of coverage under

25 such a plan, and
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1 ‘‘(B) the Secretary shall provide for notice

2 to any other qualified health plan in which the

3 Secretary knows the individual is enrolled of the

4 fact of such new coverage.

5 ‘‘(4) NOTICES OF TERMINATION.—Each notice

6 of termination under paragraph (1) shall include—

7 ‘‘(A) the effective date of the termination,

8 ‘‘(B) in the case of notice to the Secretary,

9 sufficient information to permit enrollment of

10 the individuals affected under a State children

11 and pregnant women health plan, and

12 ‘‘(C) in the case of an individual whose

13 coverage under the plan is terminated other

14 than at the end of a calendar year, the account15 ing statement produced under subsection (c)(2).

16 ‘‘(c) ACCOUNTING FOR COST-SHARING.—

17 ‘‘(1) IN GENERAL.—Each qualified health plan

18 shall provide for an ongoing accounting, for each en19 rollee (and enrolled family members) on a calendar

20 year basis, of expenses incurred for required health

21 services that are counted towards the deductible es22 tablished under section 2222 and that are counted

23 towards the cost-sharing limit established under sec24 tion 2224. The amount credited for each account

25 shall be determined in accordance with standards es-
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1 tablished by the Secretary in order to provide con2 sistency among qualified health plans and to pro3 mote portability of benefits across qualified health

4 plans.

5 ‘‘(2) STATEMENT OF ACCOUNT BALANCE.—In

6 the case of an individual whose coverage under the

7 plan is terminated other than at the end of a cal8 endar year, the qualified health plan shall produce

9 an accounting statement (in a uniform manner es10 tablished by the Secretary) of the amounts that are

11 credited under the plan towards such deductible and

12 cost-sharing limitations for the year for each enrollee

13 (and family members) involved, in accordance with

14 the accounting under paragraph (1).

15 ‘‘(3) CREDITING OF PREVIOUS EXPENSES TO16 WARDS DEDUCTIBLES AND COINSURANCE.—Each

17 qualified health plan shall, in the case of an individ18 ual who is enrolled under the plan after the begin19 ning of a year, credit, against the deductible and

20 cost-sharing limit for required health services under

21 its plan, the amounts previously accounted against

22 the deductible and cost-sharing limit under another

23 qualified health plan for the calendar year. The

24 credit under this subparagraph shall be based on the

25 accounting statement produced under paragraph (2).
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1 ‘‘(d) COVERAGE UNDER A STATE CHILDREN AND

2 PREGNANT WOMEN HEALTH PLAN.—

3 ‘‘(1) IN GENERAL.—Except as provided in this

4 subsection, each State children and pregnant women

5 health plan shall enroll each eligible individual (as

6 defined in section 2282(2)) who resides in the State

7 and whose coverage under a qualified health plan or

8 under title XVIII is terminated, effective on the date

9 following the effective date of termination of cov10 erage under such plan.

11 ‘‘(2) OBTAINING ALTERNATE COVERAGE.—

12 Paragraph (1) shall not apply if the individual pro13 vides satisfactory evidence that the individual has

14 obtained coverage through another qualified health

15 plan or is a medicare beneficiary enrolled under part

16 B of title XVIII.

17 ‘‘(3) NO AUTOMATIC ENROLLMENT DURING

18 TRANSITION.—Paragraphs (1) and (2) shall not

19 apply to terminations occurring before January 1,

20 1998. During the period before January 1, 1998, be21 fore an individual described in paragraph (1) enrolls

22 under a State children and pregnant women health

23 plan, the State shall provide the individual with a

24 notice of the minimum enrollment period required

25 under section 2202(b)(3).
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1 ‘‘(4) REFERENCE TO ADDITIONAL REQUIRE2 MENTS.—For addition enrollment requirements for

3 State children and pregnant women health plans, see

4 sections 2152(c)(3)(B), 2152(c)(4)(A), and

5 2152(c)(5).

6 ‘‘(e) PROVISION OF INFORMATION ON ENROLLEES.—

7 Each qualfied health plan shall provide the Secretary and

8 applicable State children and pregnant women health

9 plans with such information as the Secretary may require

10 in order to ascertain whether (and the amount of) any

11 transfer payments to be made under section 2234.

12 ‘‘SEC. 2158. CONSUMER PROTECTIONS.

13 ‘‘(a) DISCLOSURE REQUIREMENTS FOR EMPLOYER

14 PLANS.—

15 ‘‘(1) NOTICE OF AVAILABILITY OF LOW-INCOME

16 ASSISTANCE.—At the time of enrollment of an em17 ployee under a qualified employer health plan, the

18 plan (directly or through the employer) shall provide

19 the employee with a notice (in a form specified by

20 the Secretary) of the low-income assistance available

21 under part E of title XXII with respect to enroll22 ment under the plan.

23 ‘‘(2) FOR SMALL EMPLOYER PLANS.—In the

24 case of a qualified employer health plan that is of25 fered to a small employer, the plan may not be is-
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1 sued or sold to the employer unless the employer has

2 been provided the following information:

3 ‘‘(A) A description of the benefits covered

4 in the plan and cost-sharing required with re5 spect to such benefits.

6 ‘‘(B) A comparison of the benefits and

7 cost-sharing described in subparagraph (A) with

8 required health services.

9 ‘‘(3) STANDARD FORMAT.—The disclosures

10 under paragraphs (1) and (2) shall be made in a

11 uniform format established by the Secretary.

12 ‘‘(4) VIOLATIONS.—Any entity that violates

13 paragraph (1) or (2) is subject to a civil money pen14 alty of an amount not to exceed $5,000 with respect

15 to each such violation. The provisions of section

16 1128A (other than the first sentence of subsection

17 (a) and other than subsection (b)) shall apply to a

18 civil money penalty under the previous sentence in

19 the same manner as such provisions apply to a pen20 alty or proceeding under section 1128A(a).

21 ‘‘(b) EFFECTIVE GRIEVANCE PROCEDURES.—Each

22 qualified health plan shall provide for effective procedures

23 for hearing and resolving grievances between the plan and

24 individuals enrolled under the plan.
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1 ‘‘(c) RESTRICTION ON CERTAIN PHYSICIAN INCEN2 TIVE PLANS.—

3 ‘‘(1) IN GENERAL.—A health plan is not a

4 qualified health plan if it operates a physician incen5 tive plan (as defined in paragraph (2)) unless the re6 quirements specified in clauses (i) through (iii) of

7 section 1876(i)(8)(A) are met (in the same manner

8 as they apply to eligible organizations under section

9 1876).

10 ‘‘(2) PHYSICIAN INCENTIVE PLAN DEFINED.—

11 In this subsection, the term ‘physician incentive

12 plan’ means any compensation or other financial ar13 rangement between the qualified health plan and a

14 physician or physician group that may directly or in15 directly have the effect of reducing or limiting serv16 ices provided with respect to individuals enrolled

17 under the plan.

18 ‘‘(d) ENROLLEE FINANCIAL PROTECTION.—

19 ‘‘(1) SOLVENCY PROTECTION FOR INSURED

20 PLANS.—In the case of a qualified health plan that

21 is an insured plan (as defined by the Secretary) and

22 is issued in a State, in order for the plan to be cer23 tified under this part the Secretary must find that

24 the State has established satisfactory protection of
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1 enrollees with respect to potential insolvency of the

2 plan.

3 ‘‘(2) PROTECTION AGAINST PROVIDER

4 CLAIMS.—In the case of a failure of a qualified

5 health plan to make payments with respect to re6 quired health services, under standards established

7 by the Secretary, an individual who is enrolled under

8 the plan is not liable to any health care provider or

9 practitioner with respect to the provision of required

10 health services for payments in excess of the amount

11 for which the enrollee would have been liable if the

12 plan were to have made payments in a timely man13 ner.

14 ‘‘SEC. 2159. PREEMPTION OF CERTAIN STATE AND FEDERAL

15 REQUIREMENTS.

16 ‘‘(a) BENEFIT AND COVERAGE RULES.—Effective as

17 of January 1, 1995, no State shall establish or enforce

18 any law or regulation that—

19 ‘‘(1) requires the offering, as part of a qualified

20 employer health plan with respect to any pregnant

21 woman or child, of any services, category of care, or

22 services of any class or type of provider that is dif23 ferent from the benefits required to be provided

24 under section 2153,
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1 ‘‘(2) specifies the individuals to be covered

2 under a qualified employer health plan or the dura3 tion of such coverage, or

4 ‘‘(3) requires a right of conversion from a quali5 fied employer health plan to an individual qualified

6 health plan.

7 ‘‘(b) STATE DEFINED.—In subsection (a), the term

8 ‘State’ means the 50 States and the District of Columbia.

9 ‘‘SEC. 2160. USE OF UNIFORM CLAIMS FORMS.

10 ‘‘Each qualified health plan shall provide for submis11 sion of claims using uniform claims forms developed by

12 the Secretary.

13 ‘‘PART D—DEFINITIONS AND MISCELLANEOUS

14 ‘‘SEC. 2181. DEFINITIONS.

15 ‘‘(a) WAGES, EMPLOYMENT, ETC.—In this title—

16 ‘‘(1) WAGES.—The term ‘wages’ has the mean17 ing given such term by section 3121(a) of the Inter18 nal Revenue Code of 1986, except that—

19 ‘‘(A) the modifications of subsection (b)

20 shall apply in determining whether any service

21 is employment, and

22 ‘‘(B) the applicable contribution base

23 under section 3121(x)(2) of such Code (relating

24 to hospital insurance) shall be used under sec25 tion 3121(a)(1) for purposes of this title.
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1 ‘‘(2) EMPLOYMENT.—

2 ‘‘(A) IN GENERAL.—Except as modified in

3 subparagraph (B), the term ‘employment’ has

4 the meaning given such term by section

5 3121(b) of the Internal Revenue Code of 1986.

6 ‘‘(B) MODIFICATIONS.—The modifications

7 referred to in this paragraph are that—

8 ‘‘(i) paragraphs (5), (6), (7), (8), and

9 (9) of section 3121(b) of such Code shall

10 not apply, and

11 ‘‘(ii) subsections (r) and (w) of section

12 3121 of such Code shall not apply.

13 ‘‘(C) TREATMENT OF FEDERAL EMPLOY14 MENT.—In applying subparagraph (A), the

15 term ‘employment’ shall not be considered to

16 include service performed in the employ of the

17 United States if, in connection with the per18 formance of such service (or the service of a

19 family member), the individual—

20 ‘‘(i) is enrolled in a health benefits

21 plan under chapter 89 of title 5, United

22 States Code, or

23 ‘‘(ii) is provided medical and dental

24 benefits under chapter 55 of title 10, Unit25 ed States Code.
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1 ‘‘(3) EMPLOYEE; EMPLOYER.—The terms ‘em2 ployee’ and ‘employer’ have the same meanings as

3 such terms have for purposes of chapter 21 of the

4 Internal Revenue Code of 1986.

5 ‘‘(b) DEFINITIONS RELATING TO EMPLOYEES.—In

6 this title:

7 ‘‘(1) FULL-TIME EMPLOYEE.—The term ‘full8 time employee’ means, with respect to an employer,

9 an employee who normally performs on a monthly

10 basis at least 25 hours of service per week for that

11 employer.

12 ‘‘(2) PART-TIME EMPLOYEE.—The term ‘part13 time employee’ means, with respect to an employer,

14 an employee who is not a full-time employee.

15 ‘‘(3) SEASONAL OR TEMPORARY EMPLOYEE.—

16 The term ‘seasonal or temporary employee’ means,

17 with respect to an employer, an employee who is em18 ployed by the employer for not more than 4 months

19 in any 12-month period; except that the Secretary

20 may extend such period to up to 6 months in any

21 12-month period in the case of employment that is

22 sporadic, irregular, and seasonal in nature.

23 ‘‘(4) TREATMENT OF CONSULTANTS AND CON24 TRACTORS.—The term ‘employee’ includes an indi25 vidual who is a consultant or contractor of an em-
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1 ployer if the Secretary determines that the consult2 ing arrangement or contract was entered into to

3 avoid the requirements of this title.

4 ‘‘(5) EXCLUSION OF FOREIGN EMPLOYMENT.—

5 The term ‘employee’ does not include an individ6 ual—

7 ‘‘(A) who is not a citizen or resident of the

8 United States with respect to service performed

9 outside the United States, or

10 ‘‘(B) who is a citizen or resident of the

11 United States with respect to services per12 formed outside the United States for an em13 ployer other than an American employer (as de14 fined in section 3121(h) of the Internal Reve15 nue Code of 1986).

16 ‘‘(c) DEFINITIONS RELATING TO SIZE OF EM17 PLOYER.—In this title:

18 ‘‘(1) SMALL EMPLOYER.—The term ‘small em19 ployer’ means, with respect to a calendar year, an

20 employer that normally employs fewer than 25 em21 ployees on a typical business day during the cal22 endar year.

23 ‘‘(2) MEDIUM-SIZE EMPLOYER.—The term ‘me24 dium-size employer’ means, with respect to a cal25 endar year, an employer that normally employs at
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1 least 25, but fewer than 101, employees on a typical

2 business day during the calendar year.

3 ‘‘(3) LARGE EMPLOYER.—The term ‘large em4 ployer’ means an employer that is not a small em5 ployer or a medium-size employer.

6 ‘‘(4) APPLICATION OF CONTROLLED GROUP

7 RULES.— For purposes of determining if an em8 ployer is a small, medium-size, or large employer or

9 the number of hours an individual is normally em10 ployed with respect to an employer, rules similar to

11 the rules of subsection (b) and (c) of section 414 of

12 the Internal Revenue Code of 1986 shall apply.

13 ‘‘(d) STATE CHILDREN AND PREGNANT WOMEN

14 HEALTH PLAN.—The term ‘State children and pregnant

15 women health plan’ has the meaning of the term ‘State

16 plan’ under section 2200(c).

17 ‘‘(e) INCORPORATION OF DEFINITIONS.—Except as

18 otherwise provided in this title, the terms defined in sec19 tion 2282 shall apply under this title in the same manner

20 as they apply under title XXII.

21 ‘‘SEC. 2182. NONAPPLICATION TO RESIDENTS OF PUERTO

22 RICO AND TERRITORIES.

23 ‘‘The provisions of this title shall not apply with re24 spect to an employee who is not a resident of one of the

25 50 States or the District of Columbia.’’.
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1 TITLE II—PROVISION OF

2 HEALTH INSURANCE FOR

3 PREGNANT WOMEN AND

4 CHILDREN THROUGH STATE

5 CHILDREN AND PREGNANT

6 WOMEN HEALTH PLANS

7 SEC. 201. STATE CHILDREN AND PREGNANT WOMEN

8 HEALTH PLANS.

9 The Social Security Act is amended by adding after

10 the title added by section 102 the following new title:

11 ‘‘TITLE XXII—STATE CHILDREN AND

12 PREGNANT WOMEN HEALTH PLANS

13 ‘‘SEC. 2200. ESTABLISHMENT OF STATE CHILDREN AND

14 PREGNANT WOMEN HEALTH PLANS.

15 ‘‘(a) IN GENERAL.—By not later than January 1,

16 1995, each State shall establish and maintain a pro17 gram—

18 ‘‘(1) to assure the provision in accordance with

19 this title of health insurance for pregnant women

20 and children lawfully residing in the State who are

21 not covered under a qualified employer health plan

22 or under a Federal health plan, and

23 ‘‘(2) to provide low-income assistance under

24 part E for eligible individuals enrolled under a quali-
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1 fied employer health plan or under a Federal health

2 plan.

3 ‘‘(b) FEDERAL BACKUP.—If a State fails to establish

4 and maintain a State plan, the Secretary shall establish

5 and maintain such a plan for the State and the State shall

6 be liable to the Secretary for 105 percent of the minimum

7 amount the Secretary determines the State would have

8 been required to expend (net of payments to the State

9 under section 2236) to establish and maintain a State

10 plan under this title.

11 ‘‘(c) STATE PLAN DEFINED.—In this title, the term

12 ‘State plan’ means a program established and maintained

13 by a State under this section, and includes a plan estab14 lished by the Secretary under subsection (b).

15 ‘‘PART A—PLAN REQUIREMENTS RELATING TO

16 ELIGIBILITY AND ENROLLMENT

17 ‘‘SEC. 2201. GENERAL REQUIREMENTS; APPLICATION PROC18 ESS.

19 ‘‘(a) COVERAGE.—Each State plan shall provide pay20 ment for required health services (as defined in section

21 2211(a)) furnished to any eligible individual (as defined

22 in section 2282(2)) who is enrolled under the plan.

23 ‘‘(b) ENROLLMENT.—

24 ‘‘(1) IN GENERAL.—Each State plan shall pro25 vide a process for the enrollment of all eligible indi-
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1 viduals residing in the State who are not enrolled in

2 a qualified employer health plan or in a Federal

3 health plan (as defined in section 2282(4)).

4 ‘‘(2) UNIFORM RULES FOR RESIDENCY.—The

5 Secretary shall establish uniform rules respecting

6 the determination of the residence of eligible individ7 uals for purposes of this title.

8 ‘‘(c) APPLICATION PROCESS.—

9 ‘‘(1) OPEN ENROLLMENT.—Eligible individuals

10 residing in a State may enroll under the State plan

11 at any time.

12 ‘‘(2) ENROLLMENT.—The filing by an eligible

13 individual of an application for enrollment under a

14 State plan shall (except as the Secretary may pro15 vide) constitute enrollment under the plan. Such an

16 application may be filed with the State by mail or

17 at such locations as the State may specify.

18 ‘‘(3) AVAILABILITY OF APPLICATIONS.—Each

19 State shall make applications for enrollment under

20 the State plan available—

21 ‘‘(A) at out-reach sites (such as provider

22 and practitioner locations), and

23 ‘‘(B) at other locations (including post of24 fices) accessible to a broad cross-section of indi25 viduals eligible to enroll.
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1 The Secretary, to the extent practicable, shall make

2 applications for enrollment under State plans avail3 able at local offices of the Social Security Adminis4 tration.

5 ‘‘(4) APPLICATION FOR LOW-INCOME ASSIST6 ANCE.—An application for enrollment under a State

7 plan may (but need not) be accompanied by an ap8 plication for low-income assistance under part E.

9 ‘‘(d) ENROLLMENT TERMS.—

10 ‘‘(1) ENROLLMENT UNDER TITLE ON AN EM11 PLOYMENT AND NON-EMPLOYMENT BASIS DE12 FINED.—An eligible individual is considered, for pur13 poses of this title, to be enrolled under a State

14 plan—

15 ‘‘(A) on an ‘employment basis’ only if the

16 individual is enrolled by an employer pursuant

17 to the requirement of section 5000A of the In18 ternal Revenue Code of 1986, or

19 ‘‘(B) on a ‘non-employment basis’ in any

20 other case.

21 ‘‘(2) ENROLLMENT UNDER A QUALIFIED EM22 PLOYER HEALTH PLAN DEFINED.—An individual is

23 considered, for purposes of this title, to be ‘enrolled

24 under a qualified employer health plan’ if—
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1 ‘‘(A) the individual is enrolled under a

2 qualified employer health plan (as defined in

3 section 2281(b)(4)) as an employee (or family

4 member of an employee),

5 ‘‘(B) the employer is required to provide

6 for such enrollment under part A of title XXI,

7 and

8 ‘‘(C) the amount of the employee share of

9 the premium is limited under section 2122(b).

10 ‘‘SEC. 2202. COVERAGE PERIOD; TERMINATION OF ENROLL11 MENT.

12 ‘‘(a) BEGINNING OF COVERAGE.—Each State plan

13 shall provide for a period of coverage for eligible individ14 uals under the plan in the manner specified for qualified

15 health plans under section 2152(b).

16 ‘‘(b) TERMINATION OF ENROLLMENT DURING TRAN17 SITION PERIOD.—

18 ‘‘(1) IN GENERAL.—Before January 1, 1998,

19 except as provided in paragraph (3)—

20 ‘‘(A) an individual enrolled under a State

21 plan may terminate enrollment on a non-em22 ployment basis by providing written notice to

23 the State that the individual—

24 ‘‘(i) no longer wishes to be enrolled in

25 the plan, or
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•HR 727 IH

1 ‘‘(ii) is enrolled under a qualified em2 ployer health plan or is a medicare bene3 ficiary; and

4 ‘‘(B) a State plan may terminate enroll5 ment on a non-employment basis of an individ6 ual, after providing the individual (or the indi7 vidual’s representative) written notice, for fail8 ure to pay premiums required with respect to

9 such enrollment.

10 The termination of enrollment of an individual shall

11 terminate the enrollment of other family members

12 enrolled with the individual.

13 ‘‘(2) EFFECTIVE DATE OF TERMINATION.—A

14 termination of enrollment under paragraph (1)(A)

15 shall take effect at the close of the month following

16 the month in which the notice is filed. A termination

17 of enrollment under paragraph (1)(B) shall take ef18 fect on a date (determined under regulations of the

19 Secretary) after the date written notice of such ter20 mination has been provided to the enrollee (or the

21 enrollee’s representative). Such regulations shall pro22 vide a grace period of at least 1 month after the

23 date of written notice in which overdue premiums

24 may be paid and coverage continued.
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1 ‘‘(3) MINIMUM PERIOD OF ENROLLMENT DUR2 ING TRANSITION.—Subject to paragraph (4), before

3 January 1, 1998—

4 ‘‘(A) IN GENERAL.—An individual (other

5 than a pregnant woman or newborn) who is en6 rolled under a State plan on a non-employment

7 basis may not terminate enrollment less than

8 12 months after the date of the enrollment.

9 ‘‘(B) PREGNANT WOMEN AND

10 NEWBORNS.—In the case of a pregnant woman

11 who is enrolled under a State plan on a non12 employment basis—

13 ‘‘(i) the enrollment of the woman may

14 not be terminated earlier than the end of

15 the month in which the 60-day period, be16 ginning on the last day of the pregnancy,

17 ends; and

18 ‘‘(ii) the newborn child shall be

19 deemed enrolled for purposes of this title

20 as of the date of birth, and such enroll21 ment may not be terminated earlier than

22 the end of the month in which the child’s

23 first birthday occurs.

24 ‘‘(4) TERMINATION PERMITTED IF COVERED

25 UNDER QUALIFIED EMPLOYER HEALTH PLAN.—The
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1 minimum period of enrollment under paragraph (3)

2 shall not apply if, at the time of termination of en3 rollment, the individual is immediately covered under

4 a qualified employer health plan which will provide

5 coverage during the minimum period for which en6 rollment is otherwise required under such para7 graph.

8 ‘‘(c) TERMINATION OF ENROLLMENT AFTER TRAN9 SITION PERIOD.—For limitations on termination of enroll10 ment under this title on or after January 1, 1998, see

11 section 2203(c).

12 ‘‘SEC. 2203. REQUIREMENT OF HEALTH INSURANCE COV13 ERAGE.

14 ‘‘(a) REQUIREMENT FOR ALL ELIGIBLE INDIVID15 UALS.—

16 ‘‘(1) IN GENERAL.—Effective on and after the

17 date specified in subsection (e), each eligible individ18 ual (as defined in section 2282(2)) who is not an ex19 cepted individual (as defined in paragraph (2)), is

20 deemed to have enrolled in the State plan in which

21 the individual resides as of such date or as soon

22 thereafter as the individual is not an excepted indi23 vidual. If such an individual has not filed an applica24 tion for enrollment under a State plan by such date,

25 the Secretary shall provide a means to collect infor-
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1 mation sufficient to effect such enrollment as soon

2 as possible after such date.

3 ‘‘(2) EXCEPTED INDIVIDUALS.—For purposes

4 of paragraph (1), the term ‘excepted individual’

5 means an individual who is enrolled under a quali6 fied employer health plan or under a Federal health

7 plan.

8 ‘‘(b) AUTOMATIC CONTINUING ENROLLMENT.—For

9 provisions relating to coordination of enrollment among

10 qualified health plans and State plans and assuring con11 tinuous coverage for required health services (and port12 ability of health insurance benefits among such plans), see

13 section 2157 (made applicable to State plans by section

14 2226).

15 ‘‘(c) LIMITATION ON TERMINATION OF ENROLL16 MENT.—Effective on the date specified in subsection (e)—

17 ‘‘(1) EMPLOYMENT-BASED ENROLLMENT.—An

18 individual enrolled under a State plan on an employ19 ment basis may not elect to terminate such enroll20 ment.

21 ‘‘(2) NON-EMPLOYMENT BASIS.—An individual

22 enrolled under a State plan on a non-employment

23 basis may not terminate such enrollment unless—
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1 ‘‘(A) the individual is no longer an eligible

2 individual because of age or termination of

3 pregnancy,

4 ‘‘(B) the individual is no longer eligible to

5 be enrolled under the plan because of a change

6 of immigration or residency status, or

7 ‘‘(C) the individual demonstrates to the

8 satisfaction of the Secretary that the individual

9 is a medicare beneficiary or is enrolled under a

10 qualified employer health plan or a Federal

11 health plan.

12 ‘‘(d) ENFORCEMENT.—

13 ‘‘(1) MONITORING OF INDIVIDUAL TAX RE14 TURNS.—The Secretary of the Treasury shall re15 quire the filing of such information as may be nec16 essary to establish compliance with subsection (a).

17 ‘‘(2) RETROACTIVE ENROLLMENT.—If such an

18 individual has not provided evidence of enrollment in

19 a qualified employer health plan or Federal health

20 plan, the Secretary—

21 ‘‘(A) shall instruct the State to enroll the

22 individual pursuant to the filing of such return,

23 and

24 ‘‘(B) shall instruct the State to require

25 payment of twice the amounts of premiums that
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1 would have been paid if the person had been en2 rolled on a timely basis, unless the individual

3 has established to the satisfaction of the State

4 good cause for the failure to enroll on a timely

5 basis.

6 ‘‘(e) EFFECTIVE DATE OF REQUIREMENT.—The

7 date specified in this subsection is January 1, 1998.

8 ‘‘PART B—BENEFITS

9 ‘‘SEC. 2211. COVERED HEALTH SERVICES.

10 ‘‘(a) REQUIRED HEALTH SERVICES.—

11 ‘‘(1) IN GENERAL.—Except as provided in the

12 succeeding provisions of this part and part C, in the

13 case of eligible individuals enrolled under a State

14 plan, the State plan shall provide for payments in

15 accordance with this title for the following health

16 services:

17 ‘‘(A) Preventive care services (as defined in

18 section 2212(a)).

19 ‘‘(B) Major medical services (as defined in

20 section 2213(a)).

21 ‘‘(C) Extended medical services (as defined

22 in section 2214(a)).

23 ‘‘(2) REQUIRED HEALTH SERVICES DEFINED.—

24 In this title and title XXI, the term ‘required health

25 services’ means the health services described in para-
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1 graph (1), subject to the deductible and coinsurance

2 permitted with respect to such services under part

3 C.

4 ‘‘(b) REQUIRED OUTREACH SERVICES.—In addition

5 to the required health services under subsection (a), each

6 State plan shall provide (or make payment) for outreach

7 services to link low-income enrolled individuals with need8 ed required health services. Such outreach services shall

9 include—

10 ‘‘(1) transportation,

11 ‘‘(2) child care at service sites,

12 ‘‘(3) translation services,

13 ‘‘(4) case/care coordination,

14 ‘‘(5) screening followups, and

15 ‘‘(6) health promotions.

16 ‘‘(c) OPTIONAL ADDITIONAL SOCIAL SERVICES.—In

17 addition, each State plan may provide (or make payment)

18 for social services (such as family psycho-social supports,

19 therapeutic foster care, pediatric day treatment, parent

20 training, and in-home crisis management) necessary to as21 sure the health of enrolled individuals.

22 ‘‘(d) STANDARDS.—The Secretary shall establish

23 standards with respect to required health services. The

24 standards shall be applied under this title and title XXI.
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1 ‘‘SEC. 2212. PREVENTIVE CARE SERVICES.

2 ‘‘(a) DEFINED.—In this title, the term ‘preventive

3 care services’ means the following items and services fur4 nished in accordance with any applicable periodicity sched5 ule established under subsection (b):

6 ‘‘(1) Child preventive care, including—

7 ‘‘(A) routine office visits,

8 ‘‘(B) routine immunizations, and

9 ‘‘(C) routine laboratory tests.

10 ‘‘(2) Prenatal care, including care of all com11 plications of pregnancy.

12 ‘‘(3) Care of newborn infants, including attend13 ance at high-risk deliveries and normal newborn

14 care.

15 ‘‘(4) Family planning services.

16 ‘‘(5) Child abuse assessment.

17 ‘‘(6) Preventive dental care for children.

18 ‘‘(b) PERIODICITY SCHEDULES.—

19 ‘‘(1) PEDIATRIC CARE.—With respect to pre20 ventive care services furnished to children, the Sec21 retary shall establish a schedule of periodicity which

22 reflects the general, appropriate frequency with

23 which such care should be provided routinely to

24 healthy children. Such schedule shall be established

25 in consultation with the American Academy of Pedi26 atrics.
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1 ‘‘(2) PRENATAL CARE.—With respect to preven2 tive care services for pregnant women, the Secretary

3 shall establish a schedule of periodicity which re4 flects the appropriate frequency with which such

5 care should be provided to pregnant women, taking

6 into account age and other risk factors. Such sched7 ule shall be established in consultation with the

8 American College of Obstetricians and Gyne9 cologists.

10 ‘‘(c) NO APPLICATION OF DEDUCTIBLE OR COINSUR11 ANCE.—In accordance with sections 2222(b) and 2223(b),

12 a State plan may not impose deductibles or coinsurance

13 with respect to preventive care services.

14 ‘‘SEC. 2213. MAJOR MEDICAL SERVICES.

15 ‘‘(a) DEFINED.—In this title, the term ‘major medi16 cal services’ means the following items and services (to

17 the extent they are not preventive care services and subject

18 to subsection (b)):

19 ‘‘(1) Inpatient and outpatient hospital services.

20 ‘‘(2) Physicians’ services.

21 ‘‘(3) Professional services of certified nurse

22 midwives, nurse practitioners, and other health pro23 fessionals (to the extent authorized under State

24 law).
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1 ‘‘(4) Diagnostic tests (including laboratory

2 tests).

3 ‘‘(5) Ambulance.

4 ‘‘(6) Short-term home health services.

5 ‘‘(7) Medical and surgical supplies and durable

6 medical equipment.

7 ‘‘(8) Corrective eyeglasses and lenses and hear8 ing aids.

9 ‘‘(9) Prescription drugs, insulin, and medically

10 recommended nutritional supplements.

11 ‘‘(10) Acute dental care.

12 ‘‘(b) TREATMENT OF MENTAL HEALTH SERVICES,

13 SUBSTANCE ABUSE SERVICES, AND DEVELOPMENTAL

14 AND LEARNING DISABILITY SERVICES AS EXTENDED

15 MEDICAL SERVICES.—Major medical services do not in16 clude items and services for the treatment of mental ill17 ness, for the treatment of substance abuse, or for the

18 treatment of developmental and learning disabilities, but

19 do include psychiatric services. However, such services for

20 such treatment are included in the definition of extended

21 medical services under section 2214(a).

22 ‘‘(c) APPLICATION OF DEDUCTIBLE AND COINSUR23 ANCE.—In accordance with sections 2222 and 2223, a

24 State plan may impose deductibles and coinsurance with
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1 respect to major medical services, subject to the limits

2 specified in such sections.

3 ‘‘SEC. 2214. EXTENDED MEDICAL SERVICES.

4 ‘‘(a) DEFINED.—In this title, the term ‘extended

5 medical services’ means the following items and services

6 (to the extent they are not preventive care services and

7 subject to subsection (b)):

8 ‘‘(1) Items and services described in section

9 2213(a) for the treatment of mental illness or sub10 stance abuse and treatment of development and

11 learning disabilities (other than the educational com12 ponent of such treatment).

13 ‘‘(2) Orthodontia (other than cosmetic ortho14 dontia).

15 ‘‘(3) Substance abuse services.

16 ‘‘(4) Speech, occupational, and physical ther17 apy.

18 ‘‘(5) Hospice care.

19 ‘‘(6) Respite care.

20 ‘‘(7) Short-term skilled nursing facility services.

21 ‘‘(8) Nutritional assessment and counseling.

22 ‘‘(b) PLAN OF CARE REQUIREMENT.—A State plan

23 shall provide for coverage of extended medical services

24 only in accordance with a plan of care which—
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1 ‘‘(1) is developed in cooperation with the at2 tending primary care physician, and

3 ‘‘(2) applies to all required health services.

4 ‘‘(c) APPLICATION OF DEDUCTIBLE AND COINSUR5 ANCE.—In accordance with sections 2222 and 2223, a

6 State plan may impose a deductible and coinsurance with

7 respect to extended medical services, subject to the limits

8 specified in such sections.

9 ‘‘SEC. 2215. SCOPE OF COVERAGE.

10 ‘‘(a) NO AMOUNT, DURATION OR SCOPE LIMITA11 TIONS.—A State plan may not impose any limitation on

12 the amount, duration, or scope for required health serv13 ices.

14 ‘‘(b) CONSTRUCTION.—Subsection (a) shall not be

15 construed as requiring coverage of—

16 ‘‘(1) preventive care services in a frequency

17 greater than the frequency specified in the appro18 priate periodicity schedule established under section

19 2212(b),

20 ‘‘(2) extended medical services which are not

21 specified in a plan of care under section 2214(b), or

22 ‘‘(3) major medical services or extended medical

23 services which are not reasonable and medically nec24 essary.
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1 ‘‘(c) FREEDOM OF CHOICE OF PROVIDERS AND

2 PRACTITIONERS.—

3 ‘‘(1) IN GENERAL.—Any individual entitled to

4 benefits under a State plan with respect to required

5 health services may obtain benefits for such services

6 provided by any provider or practitioner who is

7 qualified to provide (and receive payment with re8 spect to) such services under the plan.

9 ‘‘(2) TREATMENT OF ENROLLMENT WITH

10 HEALTH MAINTENANCE ORGANIZATIONS AND COM11 PETITIVE MEDICAL PLANS.—Nothing in paragraph

12 (1) shall be construed to prohibit a health mainte13 nance organization or competitive medical plan from

14 limiting, under a contract entered into pursuant to

15 section 2265, the number of providers or practition16 ers for which benefits for services are paid.

17 ‘‘PART C—PAYMENTS FOR BENEFITS; DEDUCTIBLE, CO18 INSURANCE, AND STOP-LOSS PROTECTION FOR RE19 QUIRED HEALTH SERVICES

20 ‘‘SEC. 2221. PAYMENT RATES.

21 ‘‘(a) USE OF MEDICARE PAYMENT RULES; ETC.—

22 Subject to adjustment in payment rates under this section

23 and subject to differences in deductibles and coinsurance

24 between a State plan and title XVIII—
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1 ‘‘(1) in the case of physicians’ services and in2 patient hospital services, the provisions of section

3 1848 and 1886 (relating to payment for physicians’

4 services and to hospitals for inpatient hospital serv5 ices, respectively) shall apply under a State plan to

6 physicians’ services and inpatient hospital services in

7 the same manner as they apply under title XVIII;

8 ‘‘(2) in the case of other required health serv9 ices for which payment may be made under title

10 XVIII, such title shall apply to payment under a

11 State plan in the same manner as they apply to pay12 ment under title XVIII;

13 ‘‘(3) in the case of other required health serv14 ices for which payment may not be made under title

15 XVIII, the Secretary shall establish payment rules

16 that shall apply under State plans that are similar

17 to the payment rules for similar services under such

18 title; and

19 ‘‘(4) in the case of services described in sub20 sections (b) and (c) of section 2211, each State shall

21 establish adequate payment rates (as defined by the

22 Secretary).

23 There shall be no administrative or judicial review of the

24 payment rates or rules established under this section (in-
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1 cluding adjustments made under subsections (b), (c), and

2 (d)).

3 ‘‘(b) ADJUSTMENT OF MEDICARE PAYMENT RATES

4 FOR PHYSICIANS’ SERVICES.—

5 ‘‘(1) IN GENERAL.—For purposes of establish6 ing payment rates for physicians’ services under

7 State plans and qualified employer health plans, the

8 Secretary, by regulation and in accordance with this

9 subsection, shall adjust the payment rates otherwise

10 established under section 1848 to take into ac11 count—

12 ‘‘(A) differences between the population

13 served under title XVIII and the population re14 ceiving benefits under State plans or under

15 qualified employer health plans, and

16 ‘‘(B) such other appropriate factors as the

17 Secretary deems appropriate to assure the

18 availability of quality health care under such

19 plans.

20 ‘‘(2) REPORT BY PHYSICIAN PAYMENT REVIEW

21 COMMISSION.—The Physician Payment Review Com22 mission, in its recommendations to Congress under

23 section 1845(b) in the year before the first year in

24 which this title is effective, shall include rec25 ommendations on—
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1 ‘‘(A) the relative value units that should be

2 applied (under paragraph (1)) with respect to

3 pediatric, obstetrical, and other physicians’

4 services, and

5 ‘‘(B) data that should be collected in order

6 to evaluate the number of such units for such

7 services.

8 The Commission shall include, in its subsequent rec9 ommendations under section 1845(b), such rec10 ommendations with respect to the payment for phy11 sicians’ services under State plans and qualified em12 ployer health plans as it deems appropriate.

13 ‘‘(3) SECRETARIAL PUBLICATION.—The Sec14 retary shall cause to be published in the Federal

15 Register—

16 ‘‘(A) before June 1 before the first year in

17 which this title is effective, the relative value

18 units proposed to be applied during such first

19 year under State plans and qualified employer

20 health plans, and

21 ‘‘(B) after consideration of public com22 ments submitted pursuant to such proposal and

23 before October 1 before such year, the relative

24 value units to be applied during such first year

25 under such plans.
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1 ‘‘(4) SECRETARIAL REVIEW AND REVISION.—

2 The Secretary shall provide for the periodic review

3 and adjustment of the relative value units to be ap4 plied under State plans and qualified employer

5 health plans in the same manner and frequency as

6 provided under section 1848(c)(2)(B), except that

7 such review shall first be conducted each year during

8 the first 3 years and not less often than every 5

9 years thereafter.

10 ‘‘(5) NATIONAL ADVISORY COMMITTEE.—The

11 Secretary shall establish a national advisory commit12 tee, composed of pediatricians, family physicians,

13 and obstetricians, and experts and advocates on ma14 ternal and child health—

15 ‘‘(A) to review recommendations made by

16 the Physician Payment Review Commission

17 under paragraph (2), and

18 ‘‘(B) to advise the Secretary respecting (i)

19 the appropriate payment amounts (including

20 the conversion factor) to be established under

21 this section for pediatric, obstetrical, and other

22 physicians’ services, and (ii) factors that influ23 ence the adequacy of health care expenditures

24 for children and pregnant women (such as qual25 ity of care and distribution of services).
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1 ‘‘(c) ADJUSTMENT OF MEDICARE PAYMENT RATES

2 FOR INPATIENT HOSPITAL SERVICES.—

3 ‘‘(1) IN GENERAL.—For purposes of payment

4 for inpatient hospital services, the Secretary, by reg5 ulation and in accordance with this section, shall ad6 just the payment rates otherwise established under

7 title XVIII to take into account—

8 ‘‘(A) differences between the population

9 served under that title and the population re10 ceiving benefits under State plans or qualified

11 employer health plans, and

12 ‘‘(B) such other appropriate factors (such

13 as the special circumstances of hospitals the in14 patients of which are predominantly children)

15 as the Secretary deems appropriate to assure

16 the availability of quality health care under

17 such plans.

18 ‘‘(2) REPORT BY PROSPECTIVE PAYMENT AS19 SESSMENT COMMISSION.—The Prospective Payment

20 Assessment Commission, in its report to Congress

21 under section 1886(e)(3)(A) in the year before the

22 first year in which this title is effective, shall include

23 its recommendations on—

24 ‘‘(A) the adjustments that should be made

25 under paragraph (1) in the payment methodol-
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1 ogy for inpatient hospital services in order to

2 take into account differences and appropriate

3 factors referred to in such paragraph, and data

4 that should be collected in order to establish ap5 propriate weighting factors for diagnosis-related

6 groups used under this section, and

7 ‘‘(B) whether, and if so how, payment for

8 inpatient hospital services of childrens’ hospitals

9 (described in section 1886(d)(1)(B)(iii)) may be

10 made under State plans and qualified employer

11 health plans using the prospective payment

12 methodology described in section 1886(d).

13 The Commission shall include, in its subsequent re14 ports under section 1886(e)(3)(A), such rec15 ommendations with respect to payment for inpatient

16 hospital services under State plans and qualified em17 ployer health plans as it deems appropriate.

18 ‘‘(3) SECRETARIAL PUBLICATIONS.—The Sec19 retary shall provide for the publication, in the man20 ner and time specified under section 1886(e)(5), of

21 adjustments proposed to be made (and to be made)

22 under this subsection for the calendar year begin23 ning in each fiscal year.

24 ‘‘(4) REPORT ON USE OF PROSPECTIVE PAY25 MENT METHODOLOGY.—By not later than April 1 of
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1 the first year in which this title is effective, the Sec2 retary shall submit to Congress a report on whether,

3 and if so how, payment for inpatient hospital serv4 ices of childrens’ hospitals (described in section

5 1886(d)(1)(B)(iii)) may be made under State plans

6 and qualified employer health plans using the pro7 spective payment methodology described in section

8 1886(d).

9 ‘‘(d) ADJUSTMENT OF MEDICARE PAYMENT RATES

10 FOR OTHER SERVICES.—For purposes of payment for

11 services under subsection (a)(2), the Secretary by regula12 tion shall adjust the payment rates otherwise established

13 under title XVIII to take into account—

14 ‘‘(1) differences between the population served

15 under that title and the population receiving benefits

16 under State plans and qualified employer health

17 plans, and

18 ‘‘(2) such other appropriate factors as the Sec19 retary deems appropriate to assure the availability of

20 quality health care under such plans.

21 ‘‘(e) TREATMENT OF HEALTH MAINTENANCE ORGA22 NIZATIONS.—Subsection (a) shall not apply to a plan of

23 an eligible organization (as defined in section 1876(b))

24 which provides for enrollee protections which are at least

25 as great as the enrollee protections provided under section
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1 2265 (but without the application of section 2265(b)(5)

2 or 1876(c)(3)(B)).

3 ‘‘SEC. 2222. APPLICATION OF DEDUCTIBLE.

4 ‘‘(a) IN GENERAL.—Except as provided in this sec5 tion and part E, a State plan may provide for an annual

6 deductible with respect to expenses for required health

7 services of members of a family, but the amount of such

8 deductible may not exceed $200 with respect to any fam9 ily.

10 ‘‘(b) DEDUCTIBLE DOES NOT APPLY TO PREVEN11 TIVE CARE SERVICES OR OUTREACH AND OPTIONAL

12 SERVICES.—The deductible established under subsection

13 (a) may not be applied to preventive health services or to

14 services provided under subsection (b) or (c) of section

15 2211.

16 ‘‘SEC. 2223. COINSURANCE FOR MAJOR MEDICAL SERVICES

17 AND EXTENDED MEDICAL SERVICES.

18 ‘‘(a) COINSURANCE RATES.—Subject to subsection

19 (b), section 2224, and part E, a State plan may require

20 coinsurance with respect to payment for required health

21 services, but the coinsurance percentage may not exceed—

22 ‘‘(1) 20 percent for major medical services, and

23 ‘‘(2) 30 percent for extended medical services.

24 ‘‘(b) NO COINSURANCE FOR PREVENTIVE CARE

25 SERVICES OR OUTREACH AND OPTIONAL SERVICES.—
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1 There shall be no coinsurance under this title in the case

2 of preventive care services provided consistent with any

3 applicable periodicity schedule or to services provided

4 under subsection (b) or (c) of section 2211.

5 ‘‘SEC. 2224. LIMIT ON COST-SHARING FOR REQUIRED

6 HEALTH SERVICES.

7 ‘‘(a) LIMITATION.—Whenever in a calendar year the

8 expenses of family members for the deductible and coin9 surance with respect to required health services under a

10 State plan and furnished during the year equals $3,000,

11 payment of benefits under the plan for the family mem12 bers for required health services furnished during the re13 mainder of the year shall be paid without the application

14 of any coinsurance.

15 ‘‘(b) CREDITING FOR EXPENSES INCURRED UNDER

16 QUALIFIED EMPLOYER HEALTH PLANS.—For provision

17 relating to the accounting of cost-sharing incurred for re18 quired health services furnished under this title and the

19 crediting under this title of cost-sharing incurred for such

20 services furnished under other qualified health plans, see

21 section 2157(c).

22 ‘‘SEC. 2225. EXCLUSIONS.

23 ‘‘(a) IN GENERAL.—Except as provided in this sec24 tion, section 1862 shall apply to expenses incurred for

25 items and services provided under this title in the same
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1 manner as such section applies to items and services pro2 vided under title XVIII.

3 ‘‘(b) PREVENTIVE SERVICES.—In the case of preven4 tive services provided consistent with the applicable perio5 dicity schedule—

6 ‘‘(1) such services shall be considered to be rea7 sonable and medically necessary, and

8 ‘‘(2) shall not be subject to exclusion through

9 the operation of paragraph (1), (7), or (12) of sec10 tion 1862(a) (as incorporated under paragraph (1)).

11 ‘‘(c) USE OF SAME NATIONAL COVERAGE DECISION

12 REVIEW PROCESS.—The provisions of section 1869(b)(3)

13 shall apply under this title in the same manner as they

14 apply under title XVIII. Any determination under such

15 title that, under subsection (a), would apply under this

16 title shall not be subject to review under this subsection.

17 ‘‘SEC. 2226. APPLICATION OF PARTICULAR QUALIFIED

18 HEALTH PLAN REQUIREMENTS.

19 ‘‘Section 2152 (relating to treatment of family mem20 bers as a unit; coverage period; and health plan cards)

21 and section 2157 (relating to coordination and portability

22 of health coverage under qualified health plans) shall

23 apply to a State plan in the same manner as they apply

24 to a qualified health plan.
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1 ‘‘PART D—PREMIUMS; FEDERAL CHILDREN AND

2 PREGNANT WOMEN HEALTH INSURANCE TRUST FUND

3 ‘‘SEC. 2231. PREMIUMS.

4 ‘‘(a) AMOUNT OF PREMIUMS.—

5 ‘‘(1) IN GENERAL.—Except as provided in this

6 section (and section 2234 with respect to

7 nonenrolling employer premiums), the premium to

8 be charged for enrollment under a State plan on a

9 non-employment basis of all covered individuals in a

10 family is such rate as the plan may establish. Such

11 rate shall not vary based on the age, sex, health sta12 tus, or number of covered individuals within a fam13 ily, but may vary based on the community (as de14 fined in subsection (b)) in the State in which the

15 family is residing.

16 ‘‘(2) CREDIT FOR EMPLOYMENT TAXES PAID

17 FOR PART-TIME AND SEASONAL OR TEMPORARY EM18 PLOYEES.—

19 ‘‘(A) IN GENERAL.—Subject to subpara20 graph (C), in the case of an individual who is

21 a covered employee (as defined in subparagraph

22 (B)), the premium to be charged for enrollment

23 under this title on a non-employment basis is—

24 ‘‘(i) the rate otherwise applicable

25 under paragraph (1), less the amount of
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1 the taxes paid by the individual and all

2 employers with respect to the employee

3 (and family members of the employee)

4 under section 3151(a) of the Internal Rev5 enue Code of 1986, or

6 ‘‘(ii) 20 percent of such actuarial rate,

7 whichever is greater.

8 ‘‘(B) COVERED EMPLOYEE DEFINED.—In

9 subparagraph (A), the term ‘covered employee’

10 means an individual—

11 ‘‘(i) who is employed by one or more

12 employers as a part-time employee or as a

13 seasonal or temporary employee, and

14 ‘‘(ii) none of whose employers is en15 rolling part-time employees or seasonal or

16 temporary employees, respectively, under a

17 qualified employer health plan, but all of

18 which are required to pay a tax with re19 spect to such employees under section

20 3151(a)(1) of the Internal Revenue Code

21 of 1986,

22 and includes eligible individuals who are family

23 members of such an employee.
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1 ‘‘(C) LIMIT ON PREMIUM WHERE PREMIUM

2 SUBSIDY.—In no case shall the premium under

3 subparagraph (A) exceed—

4 ‘‘(i) the rate otherwise applicable

5 under paragraph (1), reduced by

6 ‘‘(ii) the amount of any premium sub7 sidy under part E.

8 ‘‘(b) COMMUNITY.—For purposes of this section, the

9 term ‘community’ means a geographic area designated by

10 the Secretary as—

11 ‘‘(1) encompassing one or more adjacent metro12 politan statistical areas, or

13 ‘‘(2) the remaining area within each State (that

14 is not designated within any community under para15 graph (1));

16 except that the Secretary may designate an entire State

17 as a community if such a designation would better carry

18 out the purposes of this title and title XXIII. The Sec19 retary from time to time may change the boundaries of

20 communities designated under paragraph (1) or (2) for

21 such purposes. There shall be no administrative or judicial

22 review of the designation of communities under this sub23 section.

24 ‘‘SEC. 2232. COLLECTION OF PREMIUMS.

25 ‘‘(a) INDIVIDUAL ENROLLMENT.—
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1 ‘‘(1) IN GENERAL.—In the case of individuals

2 enrolled on a non-employment basis under a State

3 plan, the State plan shall require for the payment of

4 premiums on a monthly or quarterly basis. To the

5 maximum extent feasible, the State plan shall ar6 range for payment of such premiums through auto7 matic withholding from income sources or accounts

8 with financial institutions.

9 ‘‘(2) COLLECTION OF UNPAID PREMIUMS.—

10 ‘‘(A) TRANSMISSION OF INFORMATION TO

11 SECRETARY OF THE TREASURY.—In the case of

12 premium amounts owing and unpaid under this

13 subsection, the State shall inform the Secretary,

14 who shall inform the Secretary of the Treasury

15 of the individuals owing such amounts and the

16 amounts owed.

17 ‘‘(B) COLLECTION.—The Secretary of the

18 Treasury shall assess and collect the amounts

19 referred to in subparagraph (A) in the same

20 manner as taxes imposed by subtitle C of the

21 Internal Revenue Code of 1986.

22 ‘‘(b) NONENROLLING EMPLOYER PREMIUMS.—

23 ‘‘(1) IN GENERAL.—In the case of nonenrolling

24 employer premiums owed under section 2234, the
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1 applicable State plan shall require the payment of

2 premiums on a monthly or quarterly basis.

3 ‘‘(2) COLLECTION OF UNPAID PREMIUMS.—

4 ‘‘(A) TRANSMISSION OF INFORMATION TO

5 SECRETARY OF THE TREASURY.—In the case of

6 premium amounts owing and unpaid under this

7 subsection, the State shall inform the Secretary,

8 who shall inform the Secretary of the Treasury

9 of the employers owing such amounts and the

10 amounts owed.

11 ‘‘(B) COLLECTION.—The Secretary of the

12 Treasury shall assess and collect the amounts

13 referred to in subparagraph (A) in the same

14 manner as taxes imposed by subtitle C of the

15 Internal Revenue Code of 1986.

16 ‘‘(c) DEPOSIT.—Premiums collected under this sec17 tion by the Secretary of the Treasury shall be credited

18 to the State plan to which the premiums are owing.

19 ‘‘SEC. 2233. FEDERAL CHILDREN AND PREGNANT WOMEN

20 HEALTH INSURANCE TRUST FUND.

21 ‘‘(a) ESTABLISHMENT.—

22 ‘‘(1) IN GENERAL.—There is hereby created on

23 the books of the Treasury of the United States a

24 trust fund to be known as the ‘Federal Children and

25 Pregnant Women Health Insurance Trust Fund’ (in
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1 this section referred to as the ‘Trust Fund’). The

2 Trust Fund shall consist of such gifts and bequests

3 as may be made as provided in paragraph (3) and

4 such amounts as may be deposited in, or appro5 priated to, the Trust Fund as provided in this part.

6 ‘‘(2) DEPOSIT OF TAXES.—There are hereby

7 appropriated to the Trust Fund amounts equivalent

8 to 100 percent of the taxes imposed by—

9 ‘‘(A) part VIII of subchapter A of chapter

10 1 of the Internal Revenue Code of 1986, and

11 ‘‘(B) sections 3151, 5000A, and 5000B of

12 such Code.

13 The amounts appropriated by the preceding sentence

14 shall be transferred from time to time from the gen15 eral fund in the Treasury to the Trust Fund, such

16 amounts to be determined on the basis of estimates

17 by the Secretary of the Treasury of the taxes, paid

18 to or deposited into the Treasury; and proper adjust19 ments shall be made in amounts subsequently trans20 ferred to the extent prior estimates were in excess

21 of or were less than the taxes specified in such sen22 tence.

23 ‘‘(3) AUTHORIZATION TO ACCEPT GIFTS.—The

24 Managing Trustee of the Trust Fund is authorized

25 to accept on behalf of the United States money gifts
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1 and bequests made unconditionally to the Trust

2 Fund, for the benefit of the Trust Fund, or any ac3 tivity financed through the Trust Fund.

4 ‘‘(b) INCORPORATION OF PROVISIONS.—

5 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

6 the provisions of subsections (b) through (j) of sec7 tion 1817 shall apply to the Trust Fund in the same

8 manner as they apply to the Federal Hospital Insur9 ance Trust Fund.

10 ‘‘(2) EXCEPTIONS.—In applying paragraph

11 (1)—

12 ‘‘(A) the Board of Trustees and Managing

13 Trustee of the Trust Fund shall be composed of

14 the members of the Board of Trustees and the

15 Managing Trustee, respectively, of the Federal

16 Hospital Insurance Trust Fund; and

17 ‘‘(B) any reference in section 1817 to the

18 Federal Hospital Insurance Trust Fund, to title

19 XVIII (or part A thereof), or (in subsection

20 (f)(1)) to section 3102(b) of the Internal Reve21 nue Code of 1986 is deemed a reference to the

22 Trust Fund under this section, this title, and to

23 section 3151(a)(2) of such Code, respectively.
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1 ‘‘SEC. 2234. TRANSFER PAYMENTS IN THE CASE OF MUL2 TIPLE EMPLOYERS.

3 ‘‘(a) TREATMENT OF MULTIPLE EMPLOYMENT

4 WHERE EMPLOYEE COVERED UNDER A QUALIFIED EM5 PLOYER HEALTH PLAN.—

6 ‘‘(1) IN GENERAL.—In the case of a multiple7 employed individual (as defined in subsection (d)(1))

8 who is covered under a qualified employer health

9 plan of an employer—

10 ‘‘(A) each nonenrolling employer (as de11 fined in subsection (d)(2)) that offers coverage

12 under a qualified employer health plan shall pay

13 to the State plan in which the individual resides

14 the nonenrolling employer premium specified in

15 subsection (b);

16 ‘‘(B) the enrolling employer is entitled to

17 receive from such State plan the enrolling em18 ployer subsidy specified in subsection (c); and

19 ‘‘(C) there will be no tax imposed on the

20 wages of the individual under section

21 3151(a)(2) of the Internal Revenue Code of

22 1986 with respect to wages paid during the pe23 riod of such coverage.

24 ‘‘(2) APPLICATION ON A MONTHLY BASIS.—The

25 premiums and subsidies provided under this sub-
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1 section shall be paid with respect to a monthly pe2 riod of coverage.

3 ‘‘(b) AMOUNT OF NONENROLLING EMPLOYER PRE4 MIUM.—

5 ‘‘(1) IN GENERAL.—The amount of the

6 nonenrolling employer premium described in this

7 subsection is the applicable percent (as defined in

8 paragraph (2)) of the rate (established under section

9 2231(a)) applicable to the employee in the State in

10 which the employee resides.

11 ‘‘(2) APPLICABLE PERCENT DEFINED.—For

12 purposes of paragraph (1), the term ‘applicable per13 cent’ means, with respect to an employee who is—

14 ‘‘(A) a full-time employee of the employer,

15 40 percent, or

16 ‘‘(B) a part-time employee of the employer,

17 20 percent.

18 ‘‘(c) AMOUNT OF ENROLLING EMPLOYER SUB19 SIDY.—

20 ‘‘(1) IN GENERAL.—The amount of the enroll21 ing employer subsidy described in this subsection is

22 the applicable percent (as defined in paragraph (2))

23 of the rate (established under section 2231(a)) appli24 cable to the employee in the State in which the em25 ployee resides.
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1 ‘‘(2) APPLICABLE PERCENT DEFINED.—For

2 purposes of paragraph (1), the term ‘applicable per3 cent’ means, with respect to a multiple-employed em4 ployee who (or whose spouse) is—

5 ‘‘(A) a full-time employee of a nonenrolling

6 employer, 40 percent, or

7 ‘‘(B) not a full-time employee of a

8 nonenrolling employer, but is a part-time em9 ployee of a nonenrolling employer, 20 percent;

10 except that in no case shall the applicable percent

11 with respect to a multiple-employed employee (in12 cluding the employee’s spouse) exceed 40 percent.

13 ‘‘(d) DEFINITIONS.—In this section:

14 ‘‘(1) MULTIPLE-EMPLOYED INDIVIDUAL.—The

15 term ‘multiple-employed individual’ means an indi16 vidual who in a month is an employee (whether part17 time or full-time) and—

18 ‘‘(A) who is also employed (whether part19 time or full-time) by 1 or more other employer,

20 or

21 ‘‘(B) whose spouse or parent is also an em22 ployee (whether part-time or full-time) of 1 or

23 more employers.

24 ‘‘(2) NONENROLLING EMPLOYER.—The term

25 ‘nonenrolling employer’ means, with respect to a
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1 multiple-employed individual who is enrolled under a

2 qualified employer health plan of an employer, any

3 employer of such individual other than such em4 ployer.

5 ‘‘SEC. 2235. USE OF UNIFORM CLAIMS FORMS.

6 ‘‘Each State plan shall provide for submission of

7 claims under the plan based on uniform claims forms de8 veloped by the Secretary (after consultation with insurers

9 and States).

10 ‘‘SEC. 2236. PAYMENTS TO STATES.

11 ‘‘(a) IN GENERAL.—Each State which has in effect

12 a State plan that meets the requirements of this title is

13 entitled to receive from the Federal Children and Preg14 nant Women Health Insurance Trust Fund a quarterly

15 amount equal to the sum of the amounts described in sub16 sections (b)(1) and (c)(1).

17 ‘‘(b) PAYMENT FOR REQUIRED HEALTH SERV18 ICES.—

19 ‘‘(1) IN GENERAL.—The amounts described in

20 this subparagraph is 100 percent of the amount ex21 pended during the quarter under the State plan for

22 required health services (other than administrative

23 expenses), less the amounts specified in paragraphs

24 (2) and (3).
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1 ‘‘(2) STATE MAINTENANCE OF EFFORT

2 AMOUNT.—The amount specified in this paragraph

for a State for a quarter in a fiscal year is 1 3 ⁄4 of the

4 amount of expenditures (net of Federal payments)

5 that would have been made for required health bene6 fits for eligible individuals under title XIX during

7 the fiscal year if this title were not in effect in the

8 year. The Secretary shall annually determine, for

9 each State, the amount specified under the preced10 ing sentence and shall take into account inflation in

11 the provision of required health services that has oc12 curred.

13 ‘‘(3) PREMIUMS COLLECTED.—The amount

14 specified in this paragraph for a State for a quarter

15 is the amount of premiums collected under the State

16 plan in the quarter.

17 ‘‘(c) PAYMENT FOR OUTREACH AND OPTIONAL

18 SERVICES AND ADMINISTRATIVE COSTS.—

19 ‘‘(1) IN GENERAL.—The amount described in

20 this paragraph is the percentage (specified in para21 graph (2)) of the expenditures under the plan for

22 other than required health services as found nec23 essary by the Secretary to carry out the provision of

24 this title and for the proper and efficient administra25 tion of the State plan.
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1 ‘‘(2) FEDERAL MATCHING RATE.—The percent2 age specified in this paragraph for a State is the

3 sum of—

4 ‘‘(A) the percentage that would apply to

5 the class of expenses under section 1903(a) (as

6 in effect on the date of the enactment of this

7 title), and

8 ‘‘(B) for calendar quarters in—

9 ‘‘(i) 1995 or 1996, 10 percent,

10 ‘‘(ii) 1997, 7.5 percent,

11 ‘‘(iii) 1998, 5 percent, or

12 ‘‘(iv) 1999, 2.5 percent.

13 ‘‘(d) PAYMENT RULES.—Payments to States under

14 this section shall be made in accordance with rules similar

15 to the rules provided under section 1903 for payments to

16 States with plans under title XIX.

17 ‘‘PART E—ASSISTANCE FOR LOW-INCOME INDIVIDUALS

18 ‘‘SEC. 2241. ASSISTANCE FOR INDIVIDUALS ENROLLED ON A

19 NON-EMPLOYMENT BASIS.

20 ‘‘(a) INDIVIDUALS WITH INCOME BELOW 133 PER21 CENT OF POVERTY LEVEL .—Except as otherwise pro22 vided in this section, in the case of an individual—

23 ‘‘(1) who is enrolled under a State plan on a

24 non-employment basis, and
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1 ‘‘(2) whose family adjusted total income (as de2 fined in section 2246(2)) does not exceed 133 per3 cent of the official poverty line (as defined in section

4 2282(5)),

5 the State plan shall waive the premiums imposed under

6 section 2231(a) and any deductible or coinsurance under

7 the plan for the individual and the individual’s family.

8 ‘‘(b) PREGNANT WOMEN AND INFANTS BELOW 185

9 PERCENT OF POVERTY LEVEL.—In the case of a preg10 nant woman or child under 1 year of age—

11 ‘‘(1) who is enrolled under a State plan on a

12 non-employment basis, and

13 ‘‘(2) whose family adjusted total income (as de14 fined in section 2246(2)) does not exceed the per15 centage (established by the State under section

16 1902(l)(2)(A)(i) as of the date of the enactment of

17 this title) of the official poverty line (as defined in

18 section 2282(5)),

19 the State plan shall waive any deductible or coinsurance

20 under the plan for such individual. In addition, in the case

21 of individuals described in the previous sentence, a State

22 plan may provide for a reduction in the premium otherwise

23 established (taking into account the reduction required

24 under subsection (c)).
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1 ‘‘(c) INDIVIDUALS WITH INCOME BELOW 400 PER2 CENT OF POVERTY.—In the case of an individual not de3 scribed in subsection (a), who is enrolled under this title

4 on a non-employment basis, and whose family adjusted

5 total income is less than 400 percent of the official poverty

6 line, the State plan shall provide for reductions in pre7 miums, deductibles, and coinsurance as follows:

8 ‘‘(1) PREMIUMS REDUCTION FOR INDIVIDUALS

9 WITH INCOME BELOW 400 PERCENT OF POVERTY.—

10 The premium amount under section 2231(a) shall be

11 reduced by the premium subsidy percentage (as de12 fined in subsection (c)(1)(B)) of the premium

13 amount otherwise applied. Any reduction in pre14 mium under this paragraph shall be rounded to the

15 nearest multiple of $5.

16 ‘‘(2) REDUCTION IN DEDUCTIBLE FOR INDIVID17 UALS WITH INCOME BELOW 200 PERCENT OF POV18 ERTY.—If the individual is not described in sub19 section (b), the deductible under section 2222 shall

20 be reduced by the general subsidy percentage (as de21 fined in subsection (d)(2)) of the deductible other22 wise applied. Any reduction in a deductible under

23 this paragraph shall be rounded to the nearest mul24 tiple of $10.
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1 ‘‘(3) REDUCTION IN COINSURANCE FOR INDI2 VIDUALS WITH INCOME BELOW 200 PERCENT OF

3 POVERTY.—If the individual is not described in sub4 section (b), the percentage coinsurance applied

5 under section 2223 shall be reduced by the general

6 subsidy percentage multiplied by the percentage co7 insurance otherwise applied. In applying this para8 graph, the general subsidy percentage shall be

9 rounded to the nearest multiple of 5 percent.

10 ‘‘(d) DEFINITIONS.—In this section and section

11 2242—

12 ‘‘(1) GENERAL SUBSIDY PERCENTAGE.—The

13 term ‘general subsidy percentage’ means the number

14 of percentage points by which the family’s adjusted

15 total income (expressed as a percent of the applica16 ble official poverty line) is less than 200 percent. If

17 such income is equal to or greater than 200 percent

18 of the applicable official poverty line, the general

19 subsidy percentage shall be 0.

20 ‘‘(2) PREMIUM SUBSIDY PERCENTAGE.—The

21 term ‘premium subsidy percentage’ means the ratio

22 (expressed as a percentage) of—

23 ‘‘(A) 400 percent minus the family’s ad24 justed total income (expressed as a percent of

25 the applicable official poverty line), to
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1 ‘‘(B) 267 percent.

2 ‘‘SEC. 2242. ASSISTANCE FOR INDIVIDUALS COVERED

3 UNDER QUALIFIED EMPLOYER HEALTH

4 PLANS.

5 ‘‘(a) IN GENERAL.—In the case of an eligible individ6 ual who is enrolled under a qualified employer health plan

7 or under a State plan on an employment basis, the State

8 plan shall provide for—

9 ‘‘(1) payment (in a manner specified by the

10 Secretary) of the amount of the premium subsidy

11 under subsection (b) to the individual or another

12 family member, or, in the case described in sub13 section (b)(1)(D), the employer, and

14 ‘‘(2) in the case of a qualified employer health

15 plan, payment to the qualified employer health plan

16 of the amount of the deductible and coinsurance

17 subsidy under subsection (c) or, in the case of the

18 State plan, a reduction in the deductible and coin19 surance amounts otherwise established in the

20 amount specified under section 2241.

21 Such subsidies shall apply to premiums, deductibles, and

22 coinsurance for the individual and family member covered

23 on an employment basis under the employer plan or under

24 the State plan.

25 ‘‘(b) PREMIUM SUBSIDY.—
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1 ‘‘(1) TREATMENT UNDER QUALIFIED EM2 PLOYER HEALTH PLAN.—In the case of an eligible

3 individual who is enrolled under a qualified employer

4 health plan—

5 ‘‘(A) AMOUNT.—The amount of the pre6 mium subsidy under this subsection is the pre7 mium subsidy percentage (as defined in section

8 2241(d)(2)) of the employee share of the pre9 mium. Any premium subsidy under this para10 graph which is not a multiple of $5 shall be

11 rounded to the nearest multiple of $5.

12 ‘‘(B) USE OF LEAST EXPENSIVE QUALI13 FIED PLAN.—In applying subparagraph (A),

14 the amount of the premium subsidy shall be

15 based on the qualified employer health plan

16 available to the employee with the smallest pre17 mium payment required of the employee.

18 ‘‘(C) FREQUENCY OF PAYMENT.—Except

19 as provided in subparagraph (D), the premium

20 subsidy under this subsection shall be paid not

21 less frequently than quarterly or, if the amount

22 of the premium subsidy on a monthly basis ex23 ceeds $20, monthly.
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1 ‘‘(D) OPTIONAL, DIRECT COORDINATION

2 WITH EMPLOYERS.—In the case of an em3 ployee—

4 ‘‘(i) who is enrolled under a qualified

5 employer health plan,

6 ‘‘(ii) who is entitled to assistance

7 under this part,

8 ‘‘(iii) whose employer agrees to enter

9 into an arrangement with the State plan

10 under this subparagraph, and

11 ‘‘(iv) who assigns (in the manner

12 specified by the Secretary) rights to pre13 mium subsidies under this subsection to

14 the employer,

15 the State shall enter into an arrangement with

16 the employer under which (I) the employer

17 agrees to reduce premiums otherwise imposed

18 with respect to the individual by the amount of

19 the subsidy, and (II) the State agrees to make

20 payment (not less often than monthly) to the

21 employer of the amount of such premium sub22 sidy.

23 ‘‘(2) TREATMENT UNDER STATE PLAN.—In the

24 case of an eligible individual who is enrolled on an

25 employment basis under a State plan—
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1 ‘‘(A) AMOUNT.—The amount of the pre2 mium subsidy under this subsection is the pre3 mium subsidy percentage (as defined in section

4 2241(d)(2)) of the taxes paid under section

5 3151(a)(2) of the Internal Revenue Code of

6 1986.

7 ‘‘(B) FREQUENCY OF PAYMENT.—The pre8 mium subsidy under this subsection shall be

9 paid not less frequently than quarterly or, if the

10 amount of the premium subsidy on a monthly

11 basis exceeds $20, monthly.

12 ‘‘(c) DEDUCTIBLE AND COINSURANCE SUBSIDY.—

13 ‘‘(1) DEDUCTIBLE SUBSIDY AMOUNT.—The

14 amount of the deductible subsidy under this sub15 section is the general subsidy percentage (as defined

16 in section 2241(d)(1)) of the deductible otherwise

17 applied. Any deductible subsidy under this para18 graph that is not a multiple of $10 shall be rounded

19 to the nearest multiple of $10.

20 ‘‘(2) COINSURANCE SUBSIDY AMOUNT.—The

21 amount of the coinsurance subsidy under this sub22 section is the product of the general subsidy percent23 age, the percentage coinsurance otherwise applied,

24 and the payment amount permitted for required

25 health services. In applying this paragraph, the gen-
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1 eral subsidy percentage shall be rounded to the near2 est multiple of 5 percent.

3 ‘‘(3) DIRECT COORDINATION BY QUALIFIED EM4 PLOYER HEALTH PLAN REQUIRED.—In the case of

5 an individual enrolled under a qualified employer

6 health plan, the plan shall provide for—

7 ‘‘(A) acceptance of information, electroni8 cally, from the State on the amount of the de9 ductible and coinsurance subsidy for individuals

10 (and family members),

11 ‘‘(B) a reduction in the deductibles and co12 insurance otherwise imposed to reflect the de13 ductible and coinsurance subsidies to which the

14 individual and family members are entitled,

15 ‘‘(C) reasonably prompt payment of bills

16 for which such charges have been made, and

17 ‘‘(D) transmission of such information as

18 is necessary to indicate the amount of the de19 ductible and coinsurance subsidies provided

20 under the plan for specified individuals.

21 In return, the State plan shall provide for payment,

22 not less often than monthly, to the qualified em23 ployer health plan of the amount of payments made

24 by the qualified employer health plan for deductible

25 and coinsurance subsidies under this subsection.
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1 ‘‘SEC. 2243. APPLICATIONS FOR ASSISTANCE.

2 ‘‘(a) IN GENERAL.—Subject to section 2245, any in3 dividual who seeks assistance under this part (with respect

4 to himself or herself or a family member) shall submit a

5 written application, by person or mail, to the State plan

6 in the State in which the individual (for whom the assist7 ance is sought) is residing. The application may be sub8 mitted with an application to enroll under the State plan

9 or separately.

10 ‘‘(b) BASIS FOR DETERMINATION.—Subject to sec11 tion 2245 and reconciliation under section 2244, eligibility

12 for assistance under this part shall be based on 4 times

13 the family adjusted total income (as defined in section

14 2246(2)) during the 3 months preceding the month in

15 which the application is filed.

16 ‘‘(c) FORM AND CONTENTS.—An application for as17 sistance under this part shall be in a form and manner

18 specified under the State plan (consistent with guidelines

19 established by the Secretary) and shall require—

20 ‘‘(1) the provision of information necessary to

21 make the determinations described in subsection (b),

22 ‘‘(2) the provision of information respecting any

23 qualified employer health plan in which the individ24 ual is enrolled, and
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1 ‘‘(3) the individual (if enrolled under such a

2 plan) to assign rights for deductible and coinsurance

3 subsidies under this part to such plan.

4 Such form also shall include an option to execute, as part

5 of completing the form and in order to meet the condition

6 described in section 2242(b)(1)(D)(iv), an assignment of

7 an individual’s right for premium subsidies under this part

8 to an employer.

9 ‘‘(d) FREQUENCY OF APPLICATIONS.—

10 ‘‘(1) IN GENERAL.—An application for assist11 ance under this part may be filed at any time during

12 the year and may be resubmitted (but, except as

13 provided in paragraph (3), not more frequently than

14 once every 3 months) based upon a change of in15 come or family composition.

16 ‘‘(2) NEED TO REAPPLY.—In the case of an in17 dividual who—

18 ‘‘(A) is entitled to assistance under this

19 section in September of a year, and

20 ‘‘(B) wishes to remain eligible for benefits

21 for months beginning with January of the fol22 lowing year,

23 the individual (or a family member) must file with

24 the State plan in October of that preceding year a

25 new application for assistance. If an individual fails
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1 to file a new application under this paragraph, an

2 application for such assistance with respect to any

3 family member may not be filed during November or

4 December of that preceding year.

5 ‘‘(3) CORRECTION OF INCOME.—Nothing in

6 paragraph (1) shall be construed as preventing an

7 individual or family from, at any time, submitting an

8 application to reduce the amount of assistance under

9 this part based upon an increase in income from

10 that stated in the previous application.

11 ‘‘(e) TIMING OF ASSISTANCE.—

12 ‘‘(1) IN GENERAL.—If an application for assist13 ance under this part is filed—

14 ‘‘(A) on or before the 15th day of a month,

15 assistance under this part shall be available for

16 premiums for months after such month and,

17 with respect to the deductible and coinsurance,

18 for expenses incurred after such month; or

19 ‘‘(B) after the 15th day of a month, assist20 ance under this part shall be available for pre21 miums for months after the month following

22 such month and, with respect to the deductible

23 and coinsurance, for expenses incurred after

24 such following month.
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1 ‘‘(2) WELFARE RECIPIENTS.—In the case of an

2 individual or family with respect to whom an appli3 cation for assistance is not required because of sec4 tion 2245, in applying paragraph (1), the date of ap5 proval of aid or benefits described in such section

6 shall be considered the date of filing of an applica7 tion for assistance under this part.

8 ‘‘(f) VERIFICATION.—Each State plan shall provide

9 (consistent with guidelines of the Secretary) for verifica10 tion, on a sample basis or other basis, of the information

11 supplied in applications under this part. This verification

12 shall be separate from the reconciliation provided under

13 section 2244.

14 ‘‘(g) HELP IN COMPLETING APPLICATIONS.—Each

15 State plan shall provide for grants to public or private

16 nonprofit entities that will make available assistance to in17 dividuals and families in filing applications for assistance

18 under this part. Each plan shall make grants in a manner

19 that provides such assistance at a variety of sites (such

20 as low-income housing projects and shelters for homeless

21 individuals) that are readily accessible to individuals and

22 families eligible for assistance under this part. The

23 amounts paid under such grants shall be considered, for

24 purposes of section 2236(c)(1), to be expenses reasonably

25 required in the administration of this title.
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1 ‘‘(h) PENALTIES FOR INACCURATE INFORMATION.—

2 ‘‘(1) INTEREST FOR UNDERSTATEMENTS.—

3 Each individual who knowingly understates income

4 reported in an application for assistance under this

5 part or otherwise makes a material misrepresenta6 tion of information in such an application shall be

7 liable to the State plan for excess payments made

8 based on such understatement or misrepresentation,

9 and for interest on such excess payments at a rate

10 specified by the Secretary.

11 ‘‘(2) PENALTIES FOR MISREPRESENTATION.—

12 In addition to any penalty under paragraph (1),

13 each individual who knowingly misrepresents mate14 rial information in an application for assistance

15 under this part shall be liable to the State plan for

16 $1,000 or, if greater, three times the excess pay17 ments made based on such misrepresentation.

18 ‘‘(i) FILING OF APPLICATION DEFINED.—Except as

19 provided in subsection (e)(2), for purposes of this part,

20 an application under this part is considered to be ‘filed’

21 on the date on which the complete application, including

22 all documentation required to act on the application, has

23 been filed with the State plan.
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1 ‘‘SEC. 2244. RECONCILIATION OF PREMIUM ASSISTANCE

2 THROUGH USE OF INCOME STATEMENTS.

3 ‘‘(a) REQUIREMENT FOR FILING OF INCOME STATE4 MENT.—Subject to section 2245, in the case of a family

5 which is receiving low-income assistance under this part

6 for any month in a year, a member of the family shall

7 file with the State plan, by not later than April 15 of the

8 following year, a statement that verifies the family’s total

9 adjusted family income for the taxable year ending during

10 the previous year. Such a statement shall provide informa11 tion necessary to determine the family adjusted total in12 come during the year and the number of family members

13 in the family as of the last day of the year.

14 ‘‘(b) RECONCILIATION OF PREMIUM ASSISTANCE

15 BASED ON ACTUAL INCOME.—Based on and using the in16 come reported in the statement filed under subsection (a)

17 with respect to a family or individual, subject to section

18 2245, each State plan shall compute the amount of assist19 ance that should have been provided under this part with

20 respect to premiums for the family in the year involved.

21 If the amount of such assistance computed is—

22 ‘‘(1) greater than the amount of premium as23 sistance provided, the State plan shall provide for

24 payment (directly or through a credit against future

25 premiums owed) to the family or individual involved

26 of an amount equal to the amount of the deficit, or
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1 ‘‘(2) less than the amount of assistance pro2 vided, the State plan shall require the family or indi3 vidual to pay (directly or through an increase in fu4 ture premiums owed) to the plan an amount equal

5 to the amount of the excess payment.

6 ‘‘(c) DISQUALIFICATION FOR FAILURE TO FILE.—

7 Subject to section 2245, in the case of any family that

8 is required to file an information statement under sub9 section (a) in a year and that fails to file such a statement

10 by the deadline specified in such subsection, no member

11 of the family shall be eligible for assistance under this part

12 after May 1 of such year. A State plan shall waive the

13 application of this subsection if the family establishes, to

14 the satisfaction of the State, good cause for the failure

15 to file the statement on a timely basis.

16 ‘‘(d) PENALTIES FOR FALSE INFORMATION.—Any

17 individual that provides false information in a statement

18 under subsection (a) is subject to a criminal penalty to

19 the same extent as a criminal penalty may be imposed

20 under section 1128B(a) with respect to a person described

21 in clause (ii) of such section.

22 ‘‘(e) NOTICE OF REQUIREMENT.—Each State plan

23 shall provide for written notice, in March of each year,

24 of the requirement of subsection (a) to each family which
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1 received assistance under this part in any month during

2 the preceding year and to which such requirement applies.

3 ‘‘(f) TRANSMITTAL OF INFORMATION.—The Sec4 retary of the Treasury shall transmit annually to the Sec5 retary such information relating to the adjusted total in6 come of individuals for the taxable year ending in the pre7 vious year as may be necessary for State plans to verify

8 the reconciliation of assistance under this section. The

9 Secretary shall provide for transmission of such informa10 tion to State plans for their use in performing such rec11 onciliation.

12 ‘‘(g) CONSTRUCTION.—Nothing in this section shall

13 be construed as authorizing reconciliation of assistance

14 provided with respect to deductibles and coinsurance.

15 ‘‘SEC. 2245. TREATMENT OF CERTAIN CASH ASSISTANCE

16 RECIPIENTS.

17 ‘‘In the case of a family that has been determined

18 to be eligible for aid under part A or E of title IV or an

19 individual who has been determined to be eligible for sup20 plemental security income benefits under title XVI—

21 ‘‘(1) the family or individual is deemed, without

22 the need to file an application for assistance under

23 section 2243, to have adjusted total income below

24 100 percent of the official poverty line applicable to

25 a family of the size involved,
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1 ‘‘(2) the family or individual need not file a

2 statement under section 2244(a), and

3 ‘‘(3) the assistance received by the family or in4 dividual is not subject to reconciliation under section

5 2244(b).

6 ‘‘SEC. 2246. COMPUTATION OF FAMILY ADJUSTED TOTAL

7 INCOME.

8 ‘‘In this part:

9 ‘‘(1) ADJUSTED TOTAL INCOME.—The term

10 ‘adjusted total income’ means—

11 ‘‘(A) adjusted gross income (as defined in

12 section 62(a) of the Internal Revenue Code of

13 1986), determined without the application of

14 paragraphs (6) and (7) of such section and

15 without the application of section 162(l) of such

16 Code, plus

17 ‘‘(B) the amount of social security benefits

18 (described in section 86(d) of such Code) which

19 is not includable in gross income under section

20 86 of such Code.

21 ‘‘(2) FAMILY ADJUSTED TOTAL INCOME.—The

22 term ‘family adjusted total income’ means, with re23 spect to an individual, the sum of the adjusted total

24 income for the individual and all the other family

25 members.
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1 ‘‘PART F—ADMINISTRATIVE PROVISIONS

2 ‘‘SEC. 2261. GENERAL ADMINISTRATION THROUGH INSUR3 ANCE COMPANIES.

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

5 this part, each State shall provide, to the maximum extent

6 practicable, for the administration of the State plan under

7 this title through arrangements with at least 2 insurance

8 companies, or, if there are not 2 qualified insurance com9 panies able to administer the plan in the State, 1 such

10 insurance company. Nothing in this section shall be con11 strued as preventing or prohibiting States in a region from

12 jointly contracting with 2 or more insurance companies

13 to administer the State plans of the several States in the

14 region.

15 ‘‘(b) OUTREACH AND OPTIONAL SERVICES.—Each

16 State shall provide directly for the administration of the

17 State plan with respect to—

18 ‘‘(1) the provision of, or payment for, outreach

19 services under section 2212(b), and

20 ‘‘(2) the provision of, or payment for, optional

21 services under section 2212(c).

22 ‘‘(c) LOW INCOME ASSISTANCE.—Each State shall

23 provide for the determination of low-income assistance

24 under part E to be made by entities, specifically des25 ignated by the State, that are independent of such insur-
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1 ance companies and that will assure the confidentiality of

2 information provided in conjunction with obtaining such

3 assistance.

4 ‘‘SEC. 2262. QUALITY ASSURANCE.

5 ‘‘(a) IN GENERAL.—Each State plan shall provide for

6 the application of methods that assure the quality of the

7 services provided under the plan.

8 ‘‘(b) PEER REVIEW.—Such methods shall include—

9 ‘‘(1) peer review of professional services, and

10 ‘‘(2) such other methods as the Secretary finds

11 cost-effective in order to reduce unnecessary tests

12 and procedures.

13 ‘‘SEC. 2263. BENEFICIARY CLAIMS SAFEGUARDS.

14 ‘‘(a) NOTICE OF CLAIMS DENIALS.—Each State plan

15 shall provide an individual with written notice concerning

16 the denial of a claim submitted by the individual under

17 the plan. Such notice shall include the reasons for the de18 nial.

19 ‘‘(b) PROCESS FOR REVIEW.—Each State plan shall

20 use a fair process for the timely review of claims denied

21 under the plan.

22 ‘‘(c) CLAIM FOR CARE NEEDED FOR LIFE-THREAT23 ENING ILLNESS.—In cases in which the failure to provide

24 required health services promptly would be life-threatening

25 or result in a risk of permanent disability of an individual
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1 enrolled under a State plan, the individual is entitled to

2 a decision as to whether benefits are available under the

3 plan with respect to such services not later than 1 day

4 after supplying the State plan with all requested informa5 tion. In the event of a denial of coverage for such services,

6 the individual shall be entitled to an expedited review of

7 an appeal of such denial within 5 days.

8 ‘‘(d) APPEALS.—Each individual is entitled to appeal

9 the denial of a claim submitted by the individual under

10 the State plan. The Secretary shall promulgate regulations

11 establishing procedures to be utilized for appealing denials

12 of claims under this title that are similar to the procedures

13 established under title XVIII for appealing denials of

14 claims under such title.

15 ‘‘SEC. 2264. ADMINISTRATIVE EFFICIENCY STANDARDS.

16 ‘‘Each State plan shall be administered in a manner

17 consistent with administrative efficiency and simplicity, in

18 accordance with standards specified by the Secretary.

19 Such standards shall incorporate goals for the reduction

20 of administrative waste and duplication.

21 ‘‘SEC. 2265. HEALTH MAINTENANCE ORGANIZATIONS.

22 ‘‘(a) IN GENERAL.—Except as provided in this sec23 tion, section 1876 shall apply to individuals enrolled under

24 a State plan in the same manner as such section applies
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1 to individuals entitled to benefits under part A, and en2 rolled under part B, of title XVIII.

3 ‘‘(b) APPLICATION.—In applying section 1876 under

4 this section—

5 ‘‘(1) the provisions of such section relating only

6 to individuals enrolled under part B of title XVIII

7 shall not apply;

8 ‘‘(2) any reference to a Trust Fund established

9 under title XVIII and to benefits with respect to any

10 services under such title is deemed a reference to the

11 Federal Children and Pregnant Women Health In12 surance Trust Fund and to health insurance benefits

13 with respect to required health services under this

14 title;

15 ‘‘(3) the adjusted average per capita cost shall

16 be determined on the basis of benefits under this

17 title;

18 ‘‘(4) subsections (f) and (h) of such section

19 shall not apply;

20 ‘‘(5) in applying subsection (c)(3)(B) of such

21 section, an eligible organization may require a mini22 mum period of enrollment (of not greater than 6

23 months) during which an individual may not

24 disenroll other than for cause or unless enrollment

25 under this title is terminated; and
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1 ‘‘(6) the Secretary shall establish such rules as

2 may be necessary to apply such section to different

3 State plans.

4 ‘‘SEC. 2266. PROGRAM INTEGRITY; MISCELLANEOUS PROVI5 SIONS.

6 ‘‘Sections 1124, 1124A, 1126, and 1128 through

7 1128B (relating to fraud and abuse) shall apply to this

8 title in the same manner as they apply to title XIX.

9 ‘‘SEC. 2267. DEMONSTRATION PROJECT AUTHORITY.

10 ‘‘(a) DEMONSTRATION PROJECT AUTHORITY.—

11 ‘‘(1) IN GENERAL.—Subject to the approval of

12 the Secretary, States are authorized to conduct dem13 onstration projects—

14 ‘‘(A) to improve the delivery and quality of

15 health care services under this title, and

16 ‘‘(B) to increase the efficiency and effec17 tiveness of methods of payment for such serv18 ices.

19 Subject to paragraph (2), the Secretary may waive

20 such requirements of this title as may be necessary

21 to carry out such demonstration projects.

22 ‘‘(2) LIMITATION.—The Secretary does not

23 have the authority under paragraph (1)—

24 ‘‘(A) to reduce the benefits available under

25 part B, or
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1 ‘‘(B) to increase the deductible or coinsur2 ance under part C.

3 ‘‘(3) FUNDING.—Grants, payments under con4 tracts, and other expenditures made for demonstra5 tion projects under this subsection—

6 ‘‘(A) shall be made from the Federal Chil7 dren and Pregnant Women Health Insurance

8 Trust Fund,

9 ‘‘(B) may be made either in advance or by

10 way of reimbursement, as may be determined

11 by the Secretary, and

12 ‘‘(C) shall be made in such installments

13 and on such conditions as the Secretary finds

14 necessary to carry out the purpose of this sub15 section.

16 ‘‘(b) CONSTRUCTION.—Except as provided in sub17 section (a), the Secretary is not authorized to waive any

18 requirement of this title.

19 ‘‘PART G—DEFINITIONS AND MISCELLANEOUS

20 ‘‘SEC. 2281. INCORPORATION OF CERTAIN DEFINITIONS

21 USED IN OTHER HEALTH-RELATED TITLES.

22 ‘‘(a) INCORPORATION OF MEDICARE DEFINITIONS.—

23 In this title, the definitions contained in section 1861

24 apply for purposes of this title in the same manner as they

25 apply for purposes of title XVIII.
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1 ‘‘(b) INCORPORATION OF CERTAIN EMPLOYMENT2 RELATED DEFINITIONS IN TITLE XXI.—In this title, ex3 cept as otherwise provided, the definitions of the following

4 terms contained in title XXI apply for purposes of this

5 title:

6 ‘‘(1) EMPLOYEE.—The term ‘employee’ as de7 fined in section 2181(a)(3).

8 ‘‘(2) FULL-TIME EMPLOYEE.—The term ‘full9 time employee’ as defined in section 2181(b)(1).

10 ‘‘(3) PART-TIME EMPLOYEE.—The term ‘part11 time employee’ as defined in section 2181(b)(2).

12 ‘‘(4) QUALIFIED EMPLOYER HEALTH PLAN.—

13 The term ‘qualified employer health plan’ as defined

14 in section 2121(a).

15 ‘‘(5) SEASONAL OR TEMPORARY EMPLOYEE.—

16 The term ‘seasonal or temporary employee’ as de17 fined in section 2181(b)(3).

18 ‘‘(6) WAGES.—The term ‘wages’ as defined in

19 section 2181(a)(1).

20 ‘‘SEC. 2282. OTHER DEFINITIONS.

21 ‘‘In this title:

22 ‘‘(1) CHILD.—The term ‘child’ means, with re23 spect to a person who is not a child, an individual—

24 ‘‘(A) who under 22 years of age;
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1 ‘‘(B)(i) who is the child of the person or

2 the person’s spouse, or

3 ‘‘(ii) who is the legal ward of the person or

4 the person’s spouse; and

5 ‘‘(C) who is not in the legal custody of an6 other individual.

7 The Secretary shall establish, by regulation, such

8 rules as are appropriate with respect to the treat9 ment of foster children, emancipated minors, chil10 dren in the process of adoption, and other unmar11 ried individuals under 22 years of age under similar

12 circumstances as children for purposes of this title.

13 ‘‘(2) ELIGIBLE INDIVIDUAL.—The term ‘eligible

14 individual’ means an individual who—

15 ‘‘(A) is a pregnant woman or child, and

16 ‘‘(B) is (i) a citizen or national of the

17 United States, (ii) an alien lawfully admitted

18 for permanent residence, or (iii) an alien other19 wise residing permanently in the United States

20 under color of law.

21 ‘‘(3) FAMILY; FAMILY MEMBER.—The terms

22 ‘family’ and ‘family member’ mean an individual and

23 the individual’s spouse, and includes all the individ24 ual’s children.
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1 ‘‘(4) FEDERAL HEALTH PLAN.—The term ‘Fed2 eral health plan’ means a health plan of, or contrib3 uted to by, the Federal Government on behalf of its

4 employees, retirees, and their family members, and

5 includes—

6 ‘‘(A) the Federal employees health insur7 ance program under chapter 89 of title 5, Unit8 ed States Code,

9 ‘‘(B) the program for the provision of med10 ical and dental benefits under chapter 55 of

11 title 10, United States Code, and

12 ‘‘(C) the program for the provision of hos13 pital care and medical services by the Depart14 ment of Veterans Affairs under chapter 17 of

15 title 38, United States Code.

16 ‘‘(5) OFFICIAL POVERTY LINE.—The term ‘offi17 cial poverty line’ means, for an individual in a fam18 ily, the official poverty line (as defined by the Office

19 of Management and Budget, and revised annually in

20 accordance with section 673(2) of the Omnibus

21 Budget Reconciliation Act of 1981) applicable to a

22 family of the size involved.

23 ‘‘(6) PREGNANT WOMAN.—The term ‘pregnant

24 woman’ means a woman—
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1 ‘‘(A) beginning on the date of verification

2 of pregnancy (as determined in a manner speci3 fied by the Secretary), and

4 ‘‘(B) ending on the last day of the month

5 in which the 60-day period (beginning on the

6 date of the termination of the pregnancy) ends.

7 ‘‘(7) SPOUSE.—The term ‘spouse’ means, with

8 respect to an individual, the individual to which the

9 individual is married. Marital status shall be deter10 mined in accordance with section 7703 of the Inter11 nal Revenue Code of 1986.

12 ‘‘SEC. 2283. NONAPPLICATION TO RESIDENTS OF PUERTO

13 RICO AND TERRITORIES.

14 ‘‘The provisions of this title shall not apply to an indi15 vidual who is not a resident of one of the 50 States or

16 the District of Columbia.’’.

17 SEC. 202. COORDINATION BETWEEN STATE CHILDREN AND

18 PREGNANT WOMEN HEALTH PLANS AND

19 MEDICAID PLANS.

20 (a) IN GENERAL.—

21 (1) LIMITING FEDERAL FINANCIAL PARTICIPA22 TION FOR SERVICES COVERED UNDER STATE CHIL23 DREN AND PREGNANT WOMEN HEALTH PLANS.—

24 Section 1903(i) of the Social Security Act (42

25 U.S.C. 1396b(i)) is amended—
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1 (A) in the paragraph (10) inserted by sec2 tion 4401(a)(1)(B) of Omnibus Budget Rec3 onciliation Act of 1990, by striking all that fol4 lows ‘‘1927(g)’’ and inserting a semicolon;

5 (B) by redesignating the paragraph (10)

6 added by section 4701(b)(2) as paragraph (11),

7 by transferring and inserting it after the para8 graph (10) inserted by section 4401(a)(1)(B) of

9 Omnibus Budget Reconciliation Act of 1990,

10 and by striking all that follows ‘‘with respect to

11 hospitals or facilities’’ and inserting a semi12 colon;

13 (C) by transferring and inserting the para14 graph (12) inserted by section 4752(a)(2) of

15 Omnibus Budget Reconciliation Act of 1990

16 after paragraph (11), as redesignated by sub17 paragraph (B), and by striking the period at

18 the end and inserting a semicolon;

19 (D) by redesignating the paragraph (14)

20 inserted by section 4752(e) of Omnibus Budget

21 Reconciliation Act of 1990 as paragraph (13),

22 by transferring and inserting it after paragraph

23 (12), and by striking the period at the end and

24 inserting a semicolon;
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1 (E) by redesignating the paragraph (11)

2 inserted by section 4801(e)(16)(A) of Omnibus

3 Budget Reconciliation Act of 1990 as para4 graph (14), by transferring and inserting it

5 after paragraph (13), and by striking the period

6 at the end and inserting ‘‘; or’’; and

7 (F) by inserting after paragraph (14), as

8 so redesignated, the following new paragraph:

9 ‘‘(15) with respect to items and services for

10 which payment is made under State children and

11 pregnant women health plans under title XXII.’’.

12 (2) CLARIFICATION OF NONDUPLICATION OF

13 MEDICAL ASSISTANCE WITH BENEFITS UNDER

14 STATE CHILDREN AND PREGNANT WOMEN HEALTH

15 PLANS.—Title XIX of such Act is amended by add16 ing at the end the following new section:

17 ‘‘NONDUPLICATION OF BENEFITS WITH STATE CHILDREN

18 AND PREGNANT WOMEN HEALTH PLANS

19 ‘‘SEC. 1931. Notwithstanding any other provision of

20 this title, a State is not required under its plan under sec21 tion 1902(a) to provide medical assistance for items and

22 services for which payment is made under its state chil23 dren and pregnant women health plan under title XXII.’’.

24 (3) CLARIFICATION OF APPLICATION OF THIRD25 PARTY PAYOR RULES TO QUALIFIED HEALTH

26 PLANS.—Section 1902(a)(25)(A) of such Act (42
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1 U.S.C. 1396a(a)(25)(A)) is amended by inserting

2 ‘‘and qualified health plans certified under part C of

3 title XXI’’ after ‘‘health insurers’’.

4 (b) CONTINUATION OF MEDICAID BENEFITS NOT

5 COVERED UNDER STATE CHILDREN AND PREGNANT

6 WOMEN HEALTH PLANS.—Nothing in this Act shall be

7 construed as—

8 (1) changing the eligibility of individuals for

9 medical assistance under title XIX of the Social Se10 curity Act, or

11 (2) subject to the amendments made by sub12 section (a), changing the amount, duration, or scope

13 of medical assistance required (or permitted) to be

14 provided under such title.

15 TITLE III—HEALTH INSURANCE

16 REFORM FOR SMALL EM17 PLOYERS

18 SEC. 301. EXCISE TAX ON PREMIUMS RECEIVED ON

19 HEALTH INSURANCE POLICIES WHICH DO

20 NOT MEET CERTAIN REQUIREMENTS.

21 (a) IN GENERAL.—Chapter 47 of the Internal Reve22 nue Code of 1986 (relating to taxes on group health

23 plans), as amended by section 101(b) of this Act, is fur24 ther amended by adding at the end thereof the following

25 new section:
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1 ‘‘SEC. 5000B. FAILURE TO SATISFY CERTAIN STANDARDS

2 FOR HEALTH INSURANCE.

3 ‘‘(a) GENERAL RULE.—In the case of any person is4 suing applicable accident and health insurance contracts,

5 there is hereby imposed a tax on the failure of such person

6 to meet at any time during any taxable year the applicable

7 requirements of title XXIII of the Social Security Act. The

8 Secretary of Health and Human Services shall determine

9 whether any contract meets the requirements of such title.

10 ‘‘(b) AMOUNT OF TAX.—

11 ‘‘(1) IN GENERAL.—The amount of tax imposed

12 by subsection (a) by reason of 1 or more failures

13 during a taxable year shall be equal to 50 percent

14 of the gross premiums received during such taxable

15 year with respect to all accident and health insur16 ance contracts issued by the person on whom such

17 tax is imposed.

18 ‘‘(2) GROSS PREMIUMS.—For purposes of para19 graph (1), gross premiums shall include any consid20 eration received with respect to any accident and

21 health insurance contract.

22 ‘‘(c) LIMITATION ON TAX.—

23 ‘‘(1) TAX NOT TO APPLY WHERE FAILURE NOT

24 DISCOVERED EXERCISING REASONABLE DILI25 GENCE.—No tax shall be imposed by subsection (a)

26 with respect to any failure for which it is established
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1 to the satisfaction of the Secretary that the person

2 on whom the tax is imposed did not know, and exer3 cising reasonable diligence would not have known,

4 that such failure existed.

5 ‘‘(2) TAX NOT TO APPLY WHERE FAILURES

6 CORRECTED WITHIN 30 DAYS.—No tax shall be im7 posed by subsection (a) with respect to any failure

8 if—

9 ‘‘(A) such failure was due to reasonable

10 cause and not to willful neglect, and

11 ‘‘(B) such failure is corrected during the

12 30-day period beginning on the 1st date any of

13 the persons on whom the tax is imposed knew,

14 or exercising reasonable diligence would have

15 known, that such failure existed.

16 ‘‘(3) WAIVER BY SECRETARY.—In the case of a

17 failure which is due to reasonable cause and not to

18 willful neglect, the Secretary may waive part or all

19 of the tax imposed by subsection (a).

20 ‘‘(d) LIABILITY FOR TAX.—The person issuing the

21 applicable accident and health contract with respect to

22 which a failure occurs shall be liable for the tax imposed

23 by subsection (a).

24 ‘‘(e) DEFINITIONS.—For purposes of this section—
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1 ‘‘(1) IN GENERAL.—The term ‘applicable acci2 dent and health insurance contract’ means a con3 tract under which a person authorized under appli4 cable State insurance law provides a health insur5 ance plan or arrangement to any group consisting of

6 more than 2 individuals. Such term does not include

7 any self-insured plan of an employer and does not

8 include a qualified health maintenance organization

9 (as defined in section 1310(d) of the Public Health

10 Service Act).

11 ‘‘(2) CERTAIN CONTRACTS NOT COVERED.—The

12 term ‘applicable accident and health insurance con13 tract’ does not include any contract—

14 ‘‘(A) which provides for accident only, den15 tal only, or disability only coverage,

16 ‘‘(B) which provides coverage as a supple17 ment to liability insurance,

18 ‘‘(C) which provides insurance arising out

19 of a workmens’ compensation or similar law, or

20 automobile medical-payment insurance, or

21 ‘‘(D) which provides insurance which is re22 quired by law to be contained under any self23 insured plan of an employer.’’
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1 (b) CLERICAL AMENDMENT.—The table of sections

2 for such chapter 47 is amended by adding at the end

3 thereof the following new item:

‘‘Sec. 5000B. Failure to satisfy certain standards for health insurance.’’

4 SEC. 302. GROUP HEALTH INSURANCE STANDARDS.

5 The Social Security Act is amended by adding at the

6 end the following new title:

7 ‘‘TITLE XXIII—INSURANCE REFORM FOR

8 SMALL EMPLOYERS

9 ‘‘SEC. 2301. APPLICATION OF REQUIREMENTS TO INSURED

10 SMALL EMPLOYER HEALTH PLANS.

11 ‘‘(a) PLAN UNDER STATE REGULATORY PROGRAM

12 OR CERTIFIED BY THE SECRETARY.—No insured small

13 employer health plan may be issued in a State on or after

14 the effective date specified in subsection (c) (and no new

15 contract may be offered under such plan with respect to

16 any small employer beginning on or after such effective

17 date) unless—

18 ‘‘(1) the Secretary determines that the State

19 has established a regulatory program that—

20 ‘‘(A) provides for the application and en21 forcement of the applicable standards estab22 lished under section 2302 (to carry out the re23 quirements of this title), and
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1 ‘‘(B) meets the requirements of section

2 2302(b),

3 by such effective date, or

4 ‘‘(2) if the State has not established such a pro5 gram, the plan has been certified by the Secretary

6 (in accordance with such procedures as the Sec7 retary establishes) as meeting the applicable stand8 ards established under section 2302 by such effective

9 date.

10 ‘‘(b) PLAN DISAPPROVED UNDER LOOK-BEHIND AU11 THORITY.—If the Secretary determines, under section

12 2302(c)(2), that small employer health plan does not meet

13 the applicable requirements of this title on or after such

14 effective date, regardless of whether or not the State has

15 taken any action with respect to such noncompliance, no

16 new contracts may be offered to small employers under

17 the plan on or after the date of the determination.

18 ‘‘(c) SANCTIONS.—

19 ‘‘(1) TAX.—For application of excise tax in the

20 case of a nonconforming plan, see section 5000B of

21 the Internal Revenue Code of 1986.

22 ‘‘(2) NOTICE TO EMPLOYER IN THE CASE OF

23 INSURED PLANS.—If tax is imposed under section

24 5000B of the Internal Revenue Code of 1986, the

25 Secretary of the Treasury shall provide for notice to
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1 be provided to each employer which meets the re2 quirement of part A of title XXI through coverage

3 under the plan of the imposition of the tax.

4 ‘‘(3) LOSS OF STATUS AS QUALIFIED EM5 PLOYER HEALTH PLAN.—

6 ‘‘(A) IN GENERAL.—If an employment-re7 lated health plan is determined to be in viola8 tion of subsection (a) and is not determined to

9 have come into compliance with the applicable

10 standards within 6 months after the date of the

11 initial determination of such a violation, the

12 plan shall no longer be treated as a qualified

13 employer health plan under title XXI as of the

14 end of such 6-month period.

15 ‘‘(B) NO ENFORCEMENT OF INSURANCE

16 CONTRACTS.—In the case of an employer that

17 is required, under part A of title XXI, to pro18 vide enrollment under a qualified employer

19 health plan and that meets such requirement

20 through an insured plan that is determined to

21 be in violation of subsection (a)—

22 ‘‘(i) if such plan is not brought into

23 compliance within 30 days after the date of

24 the violation, the employer may terminate

25 by notice the contract with the plan and is
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1 not liable for payment of any additional

2 amounts under the plan, and

3 ‘‘(ii) if such plan no longer qualifies

4 as a qualified employer health plan, such

5 contract shall be terminated and the em6 ployer is not liable for payment of any

7 amounts for periods in which the plan no

8 longer qualifies as a qualified employer

9 health plan.

10 ‘‘(4) DISQUALIFICATION FROM STATE PLAN AD11 MINISTRATION.—If an employment-related health

12 plan is determined to be in violation of subsection

13 (a) and is not determined to have come into compli14 ance with the applicable standards within 6 months

15 after the date of the initial determination of such a

16 violation, the plan shall no longer be eligible to ad17 minister a State plan under title XXII as of the end

18 of such 6-month period.

19 ‘‘(d) EFFECTIVE DATE.—The effective date specified

20 in this subsection is January 1, 1995.

21 ‘‘SEC. 2302. ESTABLISHMENT OF STANDARDS.

22 ‘‘(a) ESTABLISHMENT OF STANDARDS.—

23 ‘‘(1) NAIC.—The Secretary shall request the

24 NAIC—
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1 ‘‘(A) to develop specific standards, in the

2 form of a model Act and model regulations, to

3 implement the requirements of this title, and

4 ‘‘(B) to report to the Secretary on such de5 velopment,

6 by not later than October 1 of the year following the

7 year in which this title is enacted. If the NAIC de8 velops such standards within such period and the

9 Secretary finds that such standards implement the

10 requirements of this title, such standards shall be

11 the standards applied under section 2301.

12 ‘‘(2) SECRETARY.—If the NAIC fails to develop

13 and report on such standards by such date or the

14 Secretary finds that such standards do not imple15 ment the requirements of this title, the Secretary

16 shall develop and publish, by not later than Novem17 ber 15 of the year following the year in which this

18 title is enacted, such standards. Such standards

19 shall then be the standards applied under section

20 2301.

21 ‘‘(b) ADDITIONAL ELEMENTS OF REGULATORY PRO22 GRAMS.—

23 ‘‘(1) IN GENERAL.—For purposes of section

24 2301(a)(1)(B), a State regulatory program shall in25 clude the following:
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1 ‘‘(A) Enforcement under the program—

2 ‘‘(i) shall be designed in a manner so

3 as to secure compliance with the standards

4 within 30 days after the date of a finding

5 of noncompliance with such standards, and

6 ‘‘(ii) shall provide for notice to the

7 Secretary in cases where such compliance

8 is not secured within such 30-day period.

9 ‘‘(B) A toll-free telephone which provides

10 for—

11 ‘‘(i) a system for the receipt and dis12 position of consumer and provider com13 plaints or inquiries regarding compliance

14 of health plans with the requirements of

15 this title, and

16 ‘‘(ii) information to small employers

17 about carriers that offer small employer

18 health plans in the area covered by the

19 regulatory authority.

20 Such system shall provide for the recording of

21 consumer and provider complaints in accord22 ance with a uniform methodology developed by

23 the NAIC and recognized by the Secretary.

24 ‘‘(2) SECRETARIAL AUTHORITY.—In the case of

25 a State without a regulatory program approved
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1 under subsection (a), the Secretary shall provide for

2 the establishment of the toll-free telephone informa3 tion and complaint system described in paragraph

4 (1)(B).

5 ‘‘(c) SECRETARIAL REVIEW.—

6 ‘‘(1) PERIODIC REVIEW OF STATE REGULATORY

7 PROGRAMS.—The Secretary periodically shall review

8 State regulatory programs to determine if they con9 tinue to meet the standards referred to in subsection

10 (a) and the requirements of subsection (b). If the

11 Secretary finds that a State regulatory program no

12 longer meets such standards and requirements, be13 fore making a final determination, the Secretary

14 shall provide the State an opportunity to adopt such

15 a plan of correction as would permit the program to

16 continue to meet such standards and requirements.

17 If the Secretary makes a final determination that

18 the State regulatory program, after such an oppor19 tunity, fails to meet such standards and require20 ments, the Secretary shall assume responsibility

21 under section 2301(a)(2) with respect to plans in

22 the State.

23 ‘‘(2) LOOK-BEHIND AUTHORITY.—In the case

24 of a State with a regulatory program found by the

25 Secretary to meet the standards and requirements
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1 under this title, the Secretary nonetheless is author2 ized to determine whether or not individual insured

3 employment-related health plans in the State have

4 failed to comply with the applicable requirements of

5 this title.

6 ‘‘(d) GAO AUDITS.—The Comptroller General shall

7 conduct periodic audits on a sample of State regulatory

8 programs to determine their compliance with the require9 ments of this section. The Comptroller General shall re10 port to the Secretary and Congress on the findings in such

11 audits.

12 ‘‘SEC. 2303. ENROLLMENT PRACTICE AND GUARANTEED RE13 NEWABILITY REQUIREMENTS FOR SMALL EM14 PLOYER HEALTH PLANS.

15 ‘‘(a) REGISTRATION WITH APPLICABLE REGULATORY

16 AUTHORITY.—

17 ‘‘(1) IN GENERAL.—Each small employer car18 rier (as defined in section 2308(b)(3)) shall register

19 with the applicable regulatory authority for each

20 State in which it issues or offers a small employer

21 health plan.

22 ‘‘(2) NO PREEMPTION OF STATE INFORMATION

23 REQUIREMENTS.—Nothing in paragraph (1) shall be

24 construed as preventing the applicable regulatory

25 authority from requiring such additional information
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1 in conjunction with, or apart from, the registration

2 required under paragraph (1) as the applicable regu3 latory authority may be authorized to require under

4 State law.

5 ‘‘(b) GUARANTEED ISSUE.—

6 ‘‘(1) IN GENERAL.—Subject to the succeeding

7 provisions of this subsection, a carrier that offers a

8 health plan to small employers located in a commu9 nity must offer the same plan to any other small

10 employer located in the community.

11 ‘‘(2) TREATMENT OF HEALTH MAINTENANCE

12 ORGANIZATIONS.—

13 ‘‘(A) GEOGRAPHIC LIMITATIONS.—A

14 health maintenance organization may deny cov15 erage under a plan to a small employer whose

16 employees are located outside the service area

17 of the organization, but only if such denial is

18 applied uniformly without regard to health sta19 tus or insurability.

20 ‘‘(B) SIZE LIMITS.—A health maintenance

21 organization may apply to the applicable regu22 latory authority to cease enrolling new small

23 employer groups in its small employer health

24 plan (or in a geographic area served by the

25 plan) if it can demonstrate that its financial or
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1 administrative capacity to serve previously en2 rolled groups and individuals (and additional in3 dividuals who will be expected to enroll because

4 of affiliation with such previously enrolled

5 groups) will be impaired if it is required to en6 roll new groups.

7 ‘‘(3) GROUNDS FOR REFUSAL TO ISSUE OR

8 RENEW.—

9 ‘‘(A) IN GENERAL.—A carrier may refuse

10 to issue or renew or terminate a plan only for—

11 ‘‘(i) nonpayment of premiums,

12 ‘‘(ii) fraud or misrepresentation, and

13 ‘‘(iii) failure to meet minimum partici14 pation rates (consistent with subparagraph

15 (B)).

16 ‘‘(B) MINIMUM PARTICIPATION RATES.—A

17 carrier may require, with respect to a small em18 ployer health plan, that a minimum percentage

19 of full-time, permanent employees eligible to en20 roll under the plan be enrolled, so long as such

21 percentage is enforced uniformly for all employ22 ment groups of comparable size.

23 ‘‘(c) MINIMUM PLAN PERIOD.—A carrier may not

24 offer to, or issue with respect to, a small employer a small

25 employer health plan with a term of less than 12 months.
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1 ‘‘(d) GUARANTEED RENEWABILITY.—

2 ‘‘(1) IN GENERAL.—

3 ‘‘(A) GENERAL RULE.—Subject to the suc4 ceeding provisions of this subsection, each small

5 employer health plan must be renewed, at the

6 option of the employer or employment-related

7 organization described in section 2308(a)(2),

8 unless the plan is terminated for the reasons

9 specified in subsection (b)(3)(A) or under sub10 paragraph (B).

11 ‘‘(B) TERMINATION OF BLOCK OF BUSI12 NESS.—A carrier need not renew a health plan

13 with respect to such an employer or employ14 ment-related organization if the carrier—

15 ‘‘(i) is terminating the block of busi16 ness that includes the plan, and

17 ‘‘(ii) provides notice to the employer

18 or organization covered under the plan of

19 such termination at least 90 days before

20 the date of expiration of the plan.

21 In the case of such a termination, the insurer

22 may not provide for issuance of any small em23 ployer health plan in any block of business dur24 ing the 5-year period beginning on the date of

25 termination of such block of business.
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1 ‘‘(C) CONSTRUCTION RESPECTING ADDI2 TIONAL STATE DISCLOSURE REQUIREMENTS.—

3 Subparagraph (B)(ii) shall not be construed as

4 preventing the applicable regulatory authority

5 from specifying the information to be included

6 in the notice under such subparagraph or in re7 quiring such notice to be provided at an earlier

8 date.

9 ‘‘(2) NOTICE AND SPECIFICATION OF RATES

10 AND ADMINISTRATIVE CHANGES.—

11 ‘‘(A) NOTICE.—The small employer carrier

12 of a small employer health plan shall provide

13 for notice, at least 30 days before the date of

14 expiration of the health plan, of the terms for

15 renewal of the plan. Except with respect to

16 rates and administrative changes, the terms of

17 renewal (including benefits) shall be the same

18 as the terms of issuance.

19 ‘‘(B) RENEWAL RATES SAME AS ISSUANCE

20 RATES.—The carrier may change the terms for

21 such renewal, but the premium rates charged

22 with respect to such renewal shall be the same

23 as that for a new issue.

24 ‘‘(C) RATES CANNOT CHANGE MORE

25 OFTEN THAN MONTHLY.—
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1 ‘‘(i) IN GENERAL.—A small employer

2 carrier may not change the premium rates

3 established with respect to any block of

4 business for a small employer health plan

5 more often than monthly.

6 ‘‘(ii) APPLICATION OF NEW RATES.—

7 In the case of a plan issued which becomes

8 effective in a month, the premium rates es9 tablished under clause (i) for that month

10 shall apply to all months during the 12-

11 month period beginning with that month.

12 In the case of a plan renewal which is ef13 fective for a 12-month period beginning

14 with a month, the premium rates estab15 lished under clause (i) with respect to that

16 month shall apply to all months during 12-

17 month renewal period.

18 ‘‘(3) PERIOD OF RENEWAL.—The period of re19 newal of each small employer health plan shall be for

20 a period of not less than 12 months.

21 ‘‘(e) NO DISCRIMINATION BASED ON HEALTH STA22 TUS FOR CERTAIN SERVICES.—An small employer health

23 plan may not deny, limit, or condition the coverage under

24 (or benefits of) the plan with respect to required health

25 services based on the health status, claims experience, re-
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1 ceipt of health care, medical history, or lack of evidence

2 of insurability, of an individual.

3 ‘‘SEC. 2304. RATING PRACTICES FOR SMALL EMPLOYER

4 HEALTH PLANS.

5 ‘‘(a) COHESIVE RATING SYSTEM AND ACTUARIAL

6 CERTIFICATION.—

7 ‘‘(1) IN GENERAL.—The premiums (including

8 reference premium rate, as defined in section

9 2308(c)(6)) for all small employer health plans of

10 the same entity shall—

11 ‘‘(A) be established based on a single cohe12 sive rating system which is applied consistently

13 for all employer groups and is designed not to

14 treat groups, after the second effective year (as

15 defined in subsection (c)), differently based on

16 health status or risk status; and

17 ‘‘(B) be actuarially certified annually.

18 ‘‘(2) ACTUARIAL CERTIFIED DEFINED.—For

19 purposes of paragraph (1)(B), a plan is considered

20 to be ‘actuarially certified’ if there is a written state21 ment, by a member of the American Academy of Ac22 tuaries or other individual acceptable to the applica23 ble regulatory authority that a small employer car24 rier is in compliance with this section, based upon

25 the individual’s examination, including a review of
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1 the appropriate records and of the actuarial assump2 tions and methods utilized by the carrier in estab3 lishing premium rates for applicable health plans.

4 ‘‘(b) USE OF COMMUNITY-RATING.—

5 ‘‘(1) IN GENERAL.—Except as provided in para6 graph (2):

7 ‘‘(A) COMMUNITY RATING WITHIN A

8 BLOCK OF BUSINESS.—The reference premium

9 rate charged for a small employer health plan

10 with similar benefits in a community within a

11 block of business shall be the same for all small

12 employers and shall be the same regardless of

13 the age, sex, health status, or number of indi14 viduals in the family covered under the plan.

15 ‘‘(B) LIMITING VARIATION ON REFERENCE

16 PREMIUM RATES AMONG BLOCKS OF BUSI17 NESS.—

18 ‘‘(i) IN GENERAL.—Except as pro19 vided in clause (iii), the reference premium

20 rate charged for small employer health

21 plans with similar benefits in any commu22 nity for the most expensive block of busi23 ness shall not exceed 120 percent of such

24 rate charged for such plan for the least ex25 pensive block of business.
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1 ‘‘(ii) ROLE OF REGULATORY AUTHOR2 ITY.—An applicable regulatory authority

3 that is a State may reduce or eliminate the

4 percent variation otherwise permitted

5 under clause (i).

6 ‘‘(iii) EXCEPTION.—Clause (i) shall

7 not apply to a block of business—

8 ‘‘(I) if the block is one for which

9 the carrier does not reject, and never

10 has rejected, small employers included

11 within the definition of employers eli12 gible for the block of business or oth13 erwise eligible employees and depend14 ents who enroll on a timely basis,

15 ‘‘(II) the carrier does not invol16 untarily transfer, and never has invol17 untarily transferred, a health plan

18 into or out of the block of business,

19 and

20 ‘‘(III) that block of business was

21 available for purchase as of the date

22 of the enactment of this title.

23 ‘‘(2) TRANSITION.—Notwithstanding paragraph

24 (1)—
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1 ‘‘(A) during the first effective year (as de2 fined in subsection (c)), the premium rate for

3 any employer may be as much as, but may not

4 exceed, 150 percent of the reference premium

5 rate for such plans in the same community for

6 similar benefits in the same block of business,

7 or

8 ‘‘(B) during the second effective year, the

9 premium rate for any employer may be as much

10 as, but may not exceed, 122 percent of the ref11 erence premium rate for such plans in the same

12 community for similar benefits in the same

13 block of business.

14 ‘‘(3) ESTABLISHMENT OF BLOCKS OF BUSI15 NESS.—For the purpose of establishing premiums

16 for small employer health plans with similar cov17 erage, the small employer carrier may establish

18 blocks of business based only on one or more of the

19 following characteristics:

20 ‘‘(A) Plans that are marketed by clearly

21 different sales forces.

22 ‘‘(B) Plans that have been acquired from

23 another carrier as a distinct group.

24 ‘‘(C) Plans that are managed care plans.
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1 ‘‘(D) Plans within another distinct group,

2 if the applicable regulatory authority finds that

3 establishment of such a group will enhance the

4 efficiency and fairness of the small employer in5 surance marketplace.

6 ‘‘(c) EFFECTIVE YEARS DEFINED.—In this section,

7 the terms ‘first effective year’ and ‘second effective year’

8 mean 1995 and 1996, respectively.

9 ‘‘SEC. 2305. BASIC BENEFIT PACKAGE FOR SMALL EM10 PLOYER HEALTH PLANS.

11 ‘‘(a) BENEFITS AND COST-SHARING IN QUALIFIED

12 HEALTH PLANS.—Except as provided in subsection (b),

13 no small employer health plan may be issued to a small

14 employer by a carrier unless—

15 ‘‘(1) the plan provides for benefits for all re16 quired health services (as defined in section

17 2211(a));

18 ‘‘(2) the plan does not impose cost-sharing with

19 respect to required health services in excess of the

20 deductibles and coinsurance permitted under title

21 XXI with respect to such services (not taking into

22 account any low-income assistance under part E of

23 title XXII); and

24 ‘‘(3) the carrier makes available to the employer

25 a small employer health plan that, subject to sub-
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1 section (b), only provides the benefits for required

2 health services and the maximum cost-sharing con3 sistent with paragraphs (1) and (2).

4 ‘‘(b) ADDITIONAL, OPTIONAL MINIMUM SERVICES.—

5 In meeting the requirement of subsection (a)(3), a small

6 employer health plan may include such additional items

7 and services as the small employer carrier can dem8 onstrate to the satisfaction of the applicable regulatory au9 thority that inclusion of such items and services will facili10 tate appropriate hospital discharges or avoid unnecessary

11 hospitalization.

12 ‘‘SEC. 2306. MISCELLANEOUS DISCLOSURE AND RECORD13 KEEPING REQUIREMENTS FOR SMALL EM14 PLOYER HEALTH PLANS.

15 ‘‘(a) DISCLOSURE TO EMPLOYERS.—

16 ‘‘(1) GENERAL DISCLOSURE.—Each small em17 ployer carrier shall disclose to each small employer

18 before issuing a small employer health plan the fol19 lowing:

20 ‘‘(A) The availability (pursuant to the re21 quirement of section 2305(a)(3)) of a plan in22 cluding only required health services.

23 ‘‘(B) The limits, imposed under section

24 2304, on the premiums permitted to be charged

25 for such plans.
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1 ‘‘(C) The rights of guaranteed issue and

2 renewability provided under section 2303.

3 Such disclosure shall be in addition to any disclosure

4 required generally of qualified health plans under

5 section 2158(a)(2).

6 ‘‘(2) SPECIFIC DISCLOSURE UPON REQUEST.—

7 Each small employer carrier shall disclose to each

8 small employer, upon request, information concern9 ing the blocks of business established with respect to

10 small employer health plans and the applicable pre11 miums for such plans.

12 ‘‘(3) STANDARD FORMAT.—The disclosure

13 under paragraph (1) shall be made in a uniform for14 mat established by the Secretary, after consultation

15 with the NAIC.

16 ‘‘(b) INFORMATION FILED WITH APPLICABLE REGU17 LATORY AUTHORITY.—

18 ‘‘(1) IN GENERAL.—Each small employer car19 rier shall disclose to the applicable regulatory au20 thority, in a manner specified by the Secretary, in21 formation concerning—

22 ‘‘(1) blocks of business established, and

23 ‘‘(2) applicable premiums for small employer

24 health plans.
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1 ‘‘(2) ADDITIONAL INFORMATION.—Nothing in

2 this subsection shall be construed as limiting the in3 formation which an applicable regulatory authority

4 may require to be reported by small employer car5 riers.

6 ‘‘SEC. 2307. NONAPPLICATION IN PUERTO RICO AND THE

7 TERRITORIES.

8 ‘‘This title shall not apply outside the 50 States or

9 the District of Columbia.

10 ‘‘SEC. 2308. DEFINITIONS.

11 ‘‘(a) HEALTH PLAN AND OTHER DEFINITIONS RE12 LATING TO HEALTH PLANS.—In this title:

13 ‘‘(1) HEALTH PLAN.—The term ‘health plan’

14 means any hospital or medical expense incurred pol15 icy or certificate, hospital or medical service plan

16 contract, health maintenance subscriber contract,

17 other employee welfare plan (as defined in the Em18 ployee Retirement Income Security Act of 1964), or

19 any other health insurance arrangement, but does

20 not include—

21 ‘‘(A) accident-only, credit, dental, or dis22 ability income insurance,

23 ‘‘(B) coverage issued as a supplement to li24 ability insurance,
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1 ‘‘(C) worker’s compensation or similar in2 surance, or

3 ‘‘(D) automobile medical-payment insur4 ance.

5 ‘‘(2) EMPLOYMENT-RELATED HEALTH PLAN.—

6 The term ‘employment-related health plan’ means

7 any health plan provided or arranged for or contrib8 uted to by the employer or an employment-related

9 organization to provide health benefits (directly or

10 indirectly) for the employer’s employees and depend11 ents, but only insofar as such benefits provide re12 quired health care services for pregnant women and

13 children.

14 ‘‘(3) INSURED EMPLOYMENT-RELATED HEALTH

15 PLAN.—The term ‘insured employment-related

16 health plan’ means an employment-related health

17 plan that has been provided by a person authorized

18 under applicable State insurance law, and does not

19 include any self-insured employment-related health

20 plan.

21 ‘‘(4) SELF-INSURED EMPLOYMENT-RELATED

22 HEALTH PLAN.—The term ‘self-insured employment23 related health plan’ means an employment-related

24 health plan which is an employee welfare benefit

25 plan (as defined in the Employee Retirement Income
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1 Security Act of 1964) and in which the employer or

2 employment-related group assumes the underwriting

3 risk for the plan (whether or not there is any rein4 surance or similar mechanism to underwrite a por5 tion of that risk).

6 ‘‘(5) SMALL EMPLOYER HEALTH PLAN.—The

7 term ‘small employer health plan’ means an insured

8 employment-related health plan insofar as it offers

9 benefits with respect to any small employer, as de10 fined in subsection (c)(8), or the employees of a

11 small employer.

12 ‘‘(b) CARRIER; HEALTH MAINTENANCE ORGANIZA13 TION; AND OTHER DEFINITIONS RELATING TO CAR14 RIERS.—In this part:

15 ‘‘(1) CARRIER.—The term ‘carrier’ means any

16 person that offers a health plan, whether through in17 surance or otherwise, including a licensed insurance

18 company, a prepaid hospital or medical service plan,

19 a health maintenance organization, and a multiple

20 employer welfare arrangement.

21 ‘‘(2) HEALTH MAINTENANCE ORGANIZATION.—

22 The term ‘health maintenance organization’ has the

23 meaning given the term ‘eligible organization’ in sec24 tion 1876(b).
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1 ‘‘(3) SMALL EMPLOYER CARRIER.—The term

2 ‘small employer carrier’ means any carrier which of3 fers a small employer health plan.

4 ‘‘(c) GENERAL DEFINITIONS.—In this part:

5 ‘‘(1) APPLICABLE REGULATORY AUTHORITY.—

6 The term ‘applicable regulatory authority’ means,

7 with respect to a health plan offered in a State, the

8 State commissioner or superintendent of insurance

9 or other State authority responsible for regulation of

10 health insurance, or, if the Secretary is exercising

11 authority under section 2301(a)(2) in the State, the

12 Secretary.

13 ‘‘(2) BLOCK OF BUSINESS.—The term ‘block of

14 business’ means all, or a distinct grouping of, small

15 employers as shown on the records of the small em16 ployer carrier, if established consistent with section

17 2304(b)(3).

18 ‘‘(3) COMMUNITY.—The term ‘community’ has

19 the meaning given such term in section 2231(b).

20 ‘‘(4) FULL-TIME EMPLOYEE.—The term ‘full21 time employee’ has the meaning given such term in

22 section 2181(b)(1).

23 ‘‘(5) NAIC.—The term ‘NAIC’ means the Na24 tional Association of Insurance Commissioners.
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1 ‘‘(6) REFERENCE PREMIUM RATE.—The term

2 ‘reference premium rate’ means, for each block of

3 business for a rating period in a community, the

4 lowest premium rate charged or which could have

5 been charged by the small employer carrier to small

6 employers in that block under a rating system for

7 that block of business in the community for health

8 plans with the same or similar coverage.

9 ‘‘(8) SMALL EMPLOYER.—The term ‘small em10 ployer’ has the meaning given such term in section

11 2181(c)(1) and also includes a medium-size em12 ployer (as defined in section 2181(c)(2)).

13 ‘‘(9) STATE.—The term ‘State’ means the 50

14 States and the District of Columbia.’’.

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