II

104TH CONGRESS

2D SESSION S. 2186

To provide access to health care insurance coverage for children.

IN THE SENATE OF THE UNITED STATES

OCTOBER 1, 1996

Mr. KERRY (for himself and Mr. KENNEDY) introduced the following bill;

which was read twice and referred to the Committee on Labor and

Human Resources

A BILL

To provide access to health care insurance coverage for

children.

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 ‘‘Healthy Children Family Assistance Health Insurance

6 Program Act of 1996’’.

7 (b) TABLE OF CONTENTS.—The table of contents of

8 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings.
2

•S 2186 IS

TITLE I—COVERAGE FOR CHILDREN AND PREGNANT WOMEN

Subtitle A—Definitions

Sec. 100. Definitions.

Subtitle B—Participating State Program

Sec. 101. Establishment of participating State programs.

Sec. 102. Program to provide access to health plans to eligible children and

pregnant women.

Sec. 103. Notice of intent to participate.

Sec. 104. Payments to States for operating and administrative costs.

TITLE II—QUALIFYING POLICIES

Subtitle A—Qualifying Policies

Sec. 201. General description of qualifying children’s policy.

Sec. 202. General description of qualifying pregnant woman’s policy.

Subtitle B—Access and Preexisting Condition Limitations

Sec. 211. Limitation on preexisting condition exclusion period.

Subtitle C—General Duties and Responsibilities of the Secretary

Sec. 221. Regulations.

TITLE III—ASSISTANCE TO FAMILIES AND PREGNANT WOMEN

Sec. 301. Requirement to operate program.

Sec. 302. Assistance with qualifying children’s health plan or qualifying pregnant woman’s health plan premiums.

Sec. 303. Assistance with cost-sharing for qualifying children’s health plans or

qualifying pregnant woman’s health plan.

Sec. 304. Eligibility determinations.

Sec. 305. End-of-year reconciliation for premium assistance.

Sec. 306. Penalties for material misrepresentation and false information.

Sec. 307. Enrollment outreach.

Sec. 308. Aggregate Federal payments.

Sec. 309. Definitions and determinations of income.

Sec. 310. References to individual.

TITLE IV—MISCELLANEOUS PROVISIONS

Sec. 401. Employer may not discriminate against subsidy eligible individuals.

Sec. 402. Maintenance of effort.

Sec. 403. Sense of the Committee regarding financing.

1 SEC. 2. FINDINGS.

2 Congress finds that—
3

•S 2186 IS

1 (1) it is in the national interest to ensure that

2 every American child has access to affordable health

3 care;

4 (2) no family should be forced to choose be5 tween health care for its children and other essential

6 needs;

7 (3) 10,500,000 American children under the

8 age of 19 have no health insurance coverage, and 90

9 percent of these children have parents who work,

10 and too many of these children go without needed

11 health care;

12 (4) families have an obligation to contribute to

13 the cost of health insurance coverage for their chil14 dren, consistent with their ability to pay; and

15 (5) the Federal Government has an obligation

16 to help families provide health insurance coverage

17 for children.

18 TITLE I—COVERAGE FOR CHIL19 DREN AND PREGNANT

20 WOMEN

21 Subtitle A—Definitions

22 SEC. 100. DEFINITIONS.

23 For purposes of this Act:
4

•S 2186 IS

1 (1) ELIGIBLE CHILD.—The term ‘‘eligible

2 child’’ means an individual who is under 19 years of

3 age.

4 (2) PARTICIPATING STATE.—The term ‘‘partici5 pating State’’ means any State that establishes a

6 program under subtitle B.

7 (3) QUALIFYING CHILDREN’S POLICY.—The

8 term ‘‘qualifying children’s policy’’ means a policy

9 that meets the standards described in section 201.

10 (4) QUALIFYING PREGNANT WOMAN’S POL11 ICY.—The term ‘‘qualifying pregnant woman’s pol12 icy’’ means a policy that meets the standards de13 scribed in section 202.

14 (5) SECRETARY.—The term ‘‘Secretary’’ means

15 the Secretary of Health and Human Services.

16 Subtitle B—Participating State

17 Program

18 SEC. 101. ESTABLISHMENT OF PARTICIPATING STATE PRO19 GRAMS.

20 (a) IN GENERAL.—A State shall be a participating

21 State for purposes of this subtitle if such State establishes

22 the program described in section 102 for making enroll23 ment in a health plan providing a qualifying children’s pol24 icy available to each eligible child in the State and a quali-
5

•S 2186 IS

1 fying pregnant woman’s policy available to each eligible

2 pregnant woman in the State.

3 (b) DESIGNATION OF STATE AGENCY.—A State may

4 designate an appropriate State agency to administer the

5 State program under this subtitle.

6 SEC. 102. PROGRAM TO PROVIDE ACCESS TO HEALTH

7 PLANS TO ELIGIBLE CHILDREN AND PREG8 NANT WOMEN.

9 (a) IN GENERAL.—

10 (1) PROGRAM DESCRIBED.—A State program

11 described in this section is a program under which

12 the State negotiates and contracts with at least 1

13 health plan providing—

14 (A) a qualifying children’s policy in order

15 to make such a plan available to eligible chil16 dren residing in the State; and

17 (B) a qualifying pregnant woman’s policy

18 in order to make such a plan available to preg19 nant women residing in the State.

20 (2) MINIMUM REQUIREMENT.—At least one

21 health plan with which a State contracts under para22 graph (1) must offer a broad access delivery system

23 (as defined by the Secretary consistent with para24 graph (3)).
6

•S 2186 IS

1 (3) BROAD ACCESS DELIVERY SYSTEM.—In de2 fining a broad access delivery system under this

3 paragraph, the Secretary shall ensure that such a

4 system under such definition permits access to the

5 majority of speciality and nonspeciality providers in

6 a service area, whether in-network or out-of-network

7 (in the case of a network plan) at a payment rate

8 for non-network providers that is consistent with re9 imbursement by fee-for-service plans in the area in10 volved and that does not establish cost-sharing for

11 use of services of non-network providers that is

12 greater than that typical of fee-for-service plans in

13 the area involved.

14 (b) ADDITIONAL STATE RESPONSIBILITIES.—A

15 State program described in this section shall—

16 (1)(A) with respect to a qualifying children’s

17 policy, provide for the cost-effective enrollment of

18 each eligible child in a health plan offering a qualify19 ing children’s policy; and

20 (B) with respect to a qualifying pregnant wom21 an’s policy, provide for the cost-effective enrollment

22 of each pregnant woman in a health plan offering a

23 qualifying pregnant woman’s policy;

24 (2) provide information on health plans offering

25 a qualifying children’s policy or qualifying pregnant
7

•S 2186 IS

1 woman’s policy through the State program and the

2 availability of subsidies under title III; and

3 (3) comply with any other requirements estab4 lished by the Secretary.

5 SEC. 103. NOTICE OF INTENT TO PARTICIPATE.

6 (a) IN GENERAL.—Each State shall file with the Sec7 retary a notice of intent to be treated as a participating

8 State under this subtitle by no later than January 1,

9 1998, and no later than January 1 of each subsequent

10 year.

11 (b) ADDITIONAL INFORMATION IN NOTICE OF IN12 TENT.—Each notice of intent for a participating State

13 submitted under subsection (a) must contain a plan for

14 implementing the program described in section 102.

15 SEC. 104. PAYMENTS TO STATES FOR OPERATING AND AD16 MINISTRATIVE COSTS.

17 The Secretary shall provide for payment to each par18 ticipating State for each calendar quarter, beginning with

19 any quarter beginning on or after June 1, 1998, in an

20 amount equal to—

21 (1) 100 percent of the total amount estimated

22 by the Secretary to be expended by the State during

23 such quarter for premium assistance and cost shar24 ing assistance under the program described in sec25 tion 102; and
8

•S 2186 IS

1 (2) 75 percent of the total amount estimated by

2 the Secretary to be expended by the State during

3 such quarter for proper and efficient administration

4 of the program described in section 102.

5 TITLE II—QUALIFYING POLICIES

6 Subtitle A—Qualifying Policies

7 SEC. 201. GENERAL DESCRIPTION OF QUALIFYING CHIL8 DREN’S POLICY.

9 (a) DESCRIPTION.—For purposes of this Act, a quali10 fying children’s policy is a policy for children under the

11 age of 19 that—

12 (1) provides coverage consistent with coverage

13 provided under high quality group health plans as

14 determined appropriate by the Secretary;

15 (2) meets the special needs of children as deter16 mined appropriate by the Secretary; and

17 (3) provides for coverage of early and periodic

18 screening, diagnosis and treatment services (as de19 fined in title XIX of the Social Security Act).

20 (b) PREVENTIVE SERVICES.—No cost sharing re21 quirements shall be imposed for preventive services pro22 vided under this section.
9

•S 2186 IS

1 SEC. 202. GENERAL DESCRIPTION OF QUALIFYING PREG2 NANT WOMAN’S POLICY.

3 (a) DESCRIPTION.—For purposes of this Act, a quali4 fying pregnant woman’s policy is a policy for pregnant

5 women that provides coverage for prenatal care, delivery,

6 and post-natal care as determined appropriate by the Sec7 retary.

8 (b) PREVENTIVE SERVICES.—No cost sharing re9 quirements shall be imposed for preventive services pro10 vided under this section.

11 Subtitle B—Access and Preexisting

12 Condition Limitations

13 SEC. 211. LIMITATION ON PREEXISTING CONDITION EXCLU14 SION PERIOD.

15 (a) ELIGIBLE CHILDREN AND PREGNANT WOMEN.—

16 No preexisting condition exclusion shall be imposed with

17 respect to the following:

18 (1) A child eligible for coverage under section

19 2741 of the Public Health Service Act (as added by

20 section 102 of the Health Insurance Portability and

21 Accountability Act of 1996).

22 (2) Newborns if coverage under a qualifying

23 children’s policy is applied for within 90 days of the

24 date of birth of the child involved.

25 (3) Pregnant women.
10

•S 2186 IS

1 (4) A child eligible for a full subsidy under title

2 III.

3 (b) OTHER CHILDREN.—A preexisting condition ex4 clusion may be imposed with respect to a child not de5 scribed in subsection (a), except that any such preexisting

6 condition exclusion may not extend for a period in excess

7 of 6-months after the enrollment date, nor may any look8 back period extend for a period in excess of 6-months.

9 (c) DEFINITION.—As used in this section, the term

10 ‘‘preexisting condition exclusion’’ shall have the meaning

11 given such term by section 2701(b)(1) of the Public

12 Health Service Act (as added by section 102 of the Health

13 Insurance Portability and Accountability Act of 1996).

14 Subtitle C—General Duties and

15 Responsibilities of the Secretary

16 SEC. 221. REGULATIONS.

17 The Secretary may issue regulations and interim final

18 regulations to implement the program established under

19 this Act.

20 TITLE III—ASSISTANCE TO FAMI21 LIES AND PREGNANT WOMEN

22 SEC. 301. REQUIREMENT TO OPERATE PROGRAM.

23 In order to qualify for payments under section 308,

24 each State shall have in effect a program for furnishing

25 premium assistance and cost-sharing assistance in accord-
11

•S 2186 IS

1 ance with this title for calendar years beginning after

2 1997.

3 SEC. 302. ASSISTANCE WITH QUALIFYING CHILDREN’S

4 HEALTH PLAN OR QUALIFYING PREGNANT

5 WOMAN’S HEALTH PLAN PREMIUMS.

6 (a) ELIGIBILITY.—

7 (1) IN GENERAL.—An eligible individual (as de8 fined in section 309(5)) who has been determined by

9 a State under section 304 to be a premium subsidy

10 eligible individual (as defined in paragraph (2)) shall

11 be eligible for premium assistance in the amount de12 termined under subsection (b).

13 (2) PREMIUM SUBSIDY ELIGIBLE INDIVID14 UAL.—For purposes of this title, the term ‘‘premium

15 subsidy eligible individual’’ means any individual

16 who—

17 (A) is an eligible child (as defined in sec18 tion 100(1)) or a pregnant woman;

19 (B) is not eligible for medical assistance

20 under a State plan under title XIX of the So21 cial Security Act; and

22 (C) has a family income determined under

23 section 309(4) which does not exceed 300 per24 cent of the poverty line.
12

•S 2186 IS

1 (3) LIMITATION ON USE OF ASSISTANCE.—A

2 premium subsidy eligible individual who receives pre3 mium assistance under this title shall use such as4 sistance only for payments toward the premium

5 under a qualifying children’s health plan (as defined

6 in section 309(1)) or a qualifying pregnant woman’s

7 health plan (as defined in section 309) in which the

8 individual is enrolled.

9 (b) AMOUNT OF ASSISTANCE.—

10 (1) IN GENERAL.—

11 (A) DETERMINATION OF AMOUNT.—The

12 amount of premium assistance for a month for

13 a premium subsidy eligible individual is an

14 amount equal to the least of—

15 (i) the subsidy percentage specified in

paragraph (3) multiplied by 1 16 ⁄12th of the

17 annual premium paid for coverage under a

18 qualifying children’s health plan or a quali19 fying pregnant woman’s health plan in

20 which the individual is enrolled; or

21 (ii) the subsidy percentage specified in

paragraph (3) multiplied by 1 22 ⁄12th of the

23 weighted average annual premium rate (as

24 determined under subparagraph (B)).
13

•S 2186 IS

1 (B) WEIGHTED AVERAGE ANNUAL PRE2 MIUM RATE.—For purposes of this paragraph,

3 the term ‘‘weighted average annual premium

4 rate’’ means the average premium for the quali5 fying children’s health plans or qualifying preg6 nant woman’s health plan (as the case may be)

7 offered in the area in which the individual re8 sides (as determined by the State), weighted to

9 reflect the total enrollment of individuals among

10 such plans.

11 (3) SUBSIDY PERCENTAGE.—For purposes of

12 paragraph (1)(A), the term ‘‘subsidy percentage’’

13 means 100 percent reduced (but not below zero) by

14 .86 percentage point for each 1 percentage point (or

15 portion thereof) by which such individual’s family in16 come exceeds 185 percent of the poverty line. The

17 subsidy percentage for an individual with a family

18 income of 300 percent of poverty or more shall be

19 zero.

20 (4) SPECIAL RULE.—If an employer contribu21 tion toward the premium under a health plan that

22 is available to a premium subsidy eligible individual

23 through the employer is made or offered to be made

24 on behalf of the individual, the amount of any pre-
14

•S 2186 IS

1 mium subsidy under this section shall be reduced by

2 the amount of such employer contribution.

3 (c) PAYMENTS.—

4 (1) IN GENERAL.—The amount of the premium

5 assistance available to a premium subsidy eligible in6 dividual under subsection (b) shall be paid in the

7 case of an individual enrolled in a health plan under

8 a State program under subtitle A of title I, by the

9 State directly to the plan in which the individual is

10 enrolled. Payments under the preceding sentence

11 shall commence in the first month during which the

12 individual is enrolled in a qualifying children’s

13 health plan or qualifying pregnant woman’s health

14 plan and determined under section 304 to be a pre15 mium subsidy eligible individual.

16 (2) ADJUSTMENTS FOR COST-SHARING.—

17 Amounts paid to plans under this subsection shall be

18 adjusted to account for cost-sharing assistance pro19 vided to cost-sharing subsidy eligible individuals

20 under section 303.

21 (3) INDIVIDUAL RESPONSIBILITY.—An individ22 ual shall be responsible for paying any portion of the

23 premium for the qualifying children’s health plan or

24 the qualifying pregnant woman’s health plan in
15

•S 2186 IS

1 which the individual is enrolled that is not paid as

2 premium assistance under paragraph (1).

3 SEC. 303. ASSISTANCE WITH COST-SHARING FOR QUALIFY4 ING CHILDREN’S HEALTH PLANS OR QUALI5 FYING PREGNANT WOMAN’S HEALTH PLAN.

6 (a) ELIGIBILITY.—

7 (1) IN GENERAL.—An eligible individual (as de8 fined in section 309(5)) who has been determined by

9 a State under section 304 to be a cost-sharing sub10 sidy eligible individual (as defined in paragraph (2))

11 shall be eligible for cost-sharing assistance in accord12 ance with subsection (b).

13 (2) COST-SHARING SUBSIDY ELIGIBLE INDIVID14 UAL.—For purposes of this title, the term ‘‘cost15 sharing subsidy eligible individual’’ means any pre16 mium subsidy eligible individual whose family in17 come is less than 150 percent of the poverty line.

18 (b) COST-SHARING ASSISTANCE.—A cost-sharing

19 subsidy eligible individual enrolled in a qualifying chil20 dren’s health plan or a qualifying pregnant woman’s

21 health plan shall be eligible for cost-sharing assistance

22 consisting of a reduction in the amount of copayment ap23 plied with respect to an item or service to an amount equal

24 to in the case of an individual with a family income that

25 is less than 150 percent of the poverty line, 20 percent
16

•S 2186 IS

1 of the copayment amount otherwise applicable under the

2 plan, rounded to the nearest dollar.

3 (c) NOTIFICATION OF HEALTH PLANS.—If a State

4 determines that an individual is eligible for cost-sharing

5 assistance under this section the State shall notify the

6 health plan in which such individual is enrolled in a timely

7 manner, if the individual enrolled in a health plan under

8 a State program under subtitle B of title I.

9 SEC. 304. ELIGIBILITY DETERMINATIONS.

10 (a) IN GENERAL.—The Secretary shall promulgate

11 regulations specifying requirements for State programs

12 under this title with respect to determining eligibility for

13 premium and cost-sharing assistance.

14 (b) SPECIFICATIONS FOR REGULATIONS.—The regu15 lations promulgated by the Secretary under subsection (a)

16 shall include the following requirements:

17 (1) APPLICATIONS.—A State program shall

18 provide that an individual may file an application for

19 assistance with an agency designated by the State at

20 any time, in person or by mail.

21 (2) APPLICATION FORM.—A State program

22 shall provide for the use of an application form de23 veloped by the Secretary. Such form shall—

24 (A) be simple in form and understandable

25 to the average individual;
17

•S 2186 IS

1 (B) in the case of a State with a signifi2 cant number of residents with limited English3 speaking proficiency, be in languages other than

4 English, as appropriate for the State;

5 (C) require the provision of information

6 necessary to make a determination as to wheth7 er an individual is eligible for assistance, includ8 ing a declaration of estimated income by the in9 dividual; and

10 (D) require attachment of such docu11 mentation as deemed necessary by the Sec12 retary in order to ensure eligibility for assist13 ance.

14 (3) DISTRIBUTION OF APPLICATIONS.—A State

15 program shall make applications accessible at loca16 tions where individuals are most likely to obtain the

17 applications.

18 (4) REQUIREMENT TO SUBMIT REVISED APPLI19 CATION.—A State program shall require individuals

20 to submit revised applications to reflect changes in

21 estimated family incomes, including changes in em22 ployment status of family members, during the year.

23 The State shall revise the amount of any premium

24 assistance based on such a revised application.
18

•S 2186 IS

1 (c) EFFECTIVENESS OF ELIGIBILITY.—A determina2 tion by a State that an individual is a premium or cost3 sharing subsidy eligible individual shall be effective for the

4 calendar year for which such determination is made unless

5 a revised application submitted under subsection (b)(4) in6 dicates that an individual is no longer eligible for assist7 ance.

8 (d) COORDINATION.—Determinations made pursuant

9 to this section may be coordinated with determinations of

10 eligibility for State-administered health programs to the

11 extent that such coordination brings about administrative

12 efficiencies.

13 SEC. 305. END-OF-YEAR RECONCILIATION FOR PREMIUM

14 ASSISTANCE.

15 (a) IN GENERAL.—

16 (1) REQUIREMENT TO FILE STATEMENT.—An

17 individual who received premium assistance under

18 this title from a State for any month in a calendar

19 year shall file with the State an income reconcili20 ation statement to verify the individual’s family in21 come for the year. Such a statement shall be filed

22 at such time, and contain such information, as the

23 State may specify in accordance with regulations

24 promulgated by the Secretary.
19

•S 2186 IS

1 (2) NOTICE OF REQUIREMENT.—The State

2 shall provide a written notice of the requirement

3 under paragraph (1) at the end of the year to an in4 dividual who received premium assistance under this

5 title in any month during the year.

6 (b) RECONCILIATION OF PREMIUM ASSISTANCE

7 BASED ON ACTUAL INCOME.—

8 (1) IN GENERAL.—Based on and using the in9 come reported in the reconciliation statement filed

10 under subsection (a) with respect to an individual,

11 the State shall compute the amount of premium as12 sistance that should have been provided under this

13 title with respect to the individual for the year in14 volved.

15 (2) OVERPAYMENT OF ASSISTANCE.—If the

16 total amount of the premium assistance provided

17 was greater than the amount computed under para18 graph (1), the individual is liable to pay an amount

19 equal to the amount of the excess payment. The in20 dividual shall pay such amount to the State if the

21 individual enrolled in a health plan under a State

22 program under subtitle A of title I.

23 (3) UNDERPAYMENT OF ASSISTANCE.—If the

24 total amount of the premium assistance provided

25 was less than the amount computed under para-
20

•S 2186 IS

1 graph (1), the State shall pay to the individual an

2 amount equal to the amount of the deficit.

3 (4) STATE OPTION.—The State may, in accord4 ance with regulations promulgated by the Secretary,

5 establish a procedure under which any overpayments

6 or underpayments of premium assistance determined

7 under paragraphs (2) and (3) with respect to an in8 dividual for a year may be collected or paid, as ap9 propriate, through adjustments to the premium as10 sistance furnished to such individual in the succeed11 ing year.

12 (c) PENALTIES FOR FAILURE TO FILE.—In the case

13 of an individual who is required to file a statement under

14 this section in a year who fails to file such a statement,

15 the entire amount of the premium assistance provided in

16 such year shall be considered an excess amount under sub17 section (b)(2) and such individual shall not be eligible for

18 premium assistance under this title until such statement

19 is filed. The State, using rules established by the Sec20 retary, shall waive the application of this subsection if the

21 individual establishes, to the satisfaction of the State

22 under such rules, good cause for the failure to file the

23 statement on a timely basis.
21

•S 2186 IS

1 SEC. 306. PENALTIES FOR MATERIAL MISREPRESENTATION

2 AND FALSE INFORMATION.

3 (a) IN GENERAL.—Any individual who knowingly

4 makes a material misrepresentation of information or pro5 vides false information in an application for assistance

6 under this title under section 304 or an income reconcili7 ation statement under section 305 shall be liable to the

8 Federal Government for the amount any premium assist9 ance received by the individual on the basis of such mis10 representation or false information and interest on such

11 amount at a rate specified by the Secretary, and shall,

12 in addition, be liable to the Federal Government for

13 $2,000 or, if greater, 3 times the amount of any premium

14 assistance received by the individual on the basis of such

15 misrepresentation or false information.

16 (b) COLLECTION OF PENALTY AMOUNTS.—A State

17 which receives an application for assistance or an income

18 reconciliation statement with respect to which a material

19 misrepresentation has been made or false information has

20 been provided shall collect the penalty amount required

21 under subsection (a) and submit such amount to the Sec22 retary in a timely manner.

23 SEC. 307. ENROLLMENT OUTREACH.

24 The Secretary shall promulgate regulations under

25 which each State operating a program for premium assist26 ance under this title shall have in effect an enrollment out-
22

•S 2186 IS

1 reach system under which individuals may be assisted in

2 enrolling under this Act by health care providers who fur3 nish services to such individuals.

4 SEC. 308. AGGREGATE FEDERAL PAYMENTS.

5 (a) IN GENERAL.—The Secretary shall provide for

6 payment to each participating State for each calendar

7 quarter, beginning with any quarter beginning on or after

8 June 1, 1998, in an amount equal to—

9 (1) 100 percent of the total amount estimated

10 by the Secretary to be expended by the State during

11 such quarter for premium and cost-sharing assist12 ance under this title for enrollment in qualifying

13 children’s health plans or qualifying pregnant wom14 an’s health plans through the programs operated

15 under title I; and

16 (2) 75 percent of the total amount estimated by

17 the Secretary to be expended by the State during

18 such quarter for proper and efficient administration

19 of the program described in this title.

20 (b) REDUCTION IN PAYMENTS FOR ADMINISTRATIVE

21 ERRORS.—

22 (1) IN GENERAL.—In the case of administrative

23 errors described in paragraph (2), matching pay24 ments available to a State under subsection (a) shall
23

•S 2186 IS

1 be reduced by an amount determined appropriate by

2 the Secretary.

3 (2) ADMINISTRATIVE ERRORS DESCRIBED.—

4 The administrative errors described in this para5 graph include the following:

6 (A) An eligibility error rate for premium

7 assistance to the extent the applicable error

8 rate exceeds the maximum permissible error

9 rate specified by the Secretary.

10 (B) Misappropriations or other expendi11 tures that the Secretary finds are attributable

12 to malfeasance or misfeasance.

13 (c) AUDITS.—The Secretary shall conduct regular

14 audits of the activities conducted under this title.

15 (d) BUDGETARY TREATMENT.—This section con16 stitutes budget authority in advance of appropriations

17 Acts, and represents the obligation of the Federal Govern18 ment to provide payments to the States in accordance with

19 this section.

20 SEC. 309. DEFINITIONS AND DETERMINATIONS OF INCOME.

21 For purposes of this title:

22 (1) QUALIFYING CHILDREN’S HEALTH PLAN.—

23 The term ‘‘qualifying children’s health plan’’ means

24 a health plan providing the qualifying children’s pol25 icy as described in section 201.
24

•S 2186 IS

1 (2) QUALIFYING PREGNANT WOMAN’S HEALTH

2 PLAN.—The term ‘‘Qualifying pregnant woman’s

3 health plan’’ means a health plan providing the

4 qualifying pregnant woman’s policy as described in

5 section 202.

6 (3) CHILD.—The term ‘‘child‘‘ means an indi7 vidual who is under 19 years of age.

8 (4) DETERMINATIONS OF INCOME.—

9 (A) FAMILY INCOME.—The term ‘‘family

10 income’’ means, with respect to an individual

11 who—

12 (i) is not a dependent (as defined in

13 subparagraph (B)) of another individual,

14 the sum of the modified adjusted gross in15 comes (as defined in subparagraph (D))

16 for the individual, the individual’s spouse,

17 and children who are dependents of the in18 dividual; or

19 (ii) is a dependent of another individ20 ual, the sum of the modified adjusted gross

21 incomes for the other individual, the other

22 individual’s spouse, and children who are

23 dependents of the other individual.

24 (B) DEPENDENT.—The term ‘‘dependent’’

25 shall have the meaning given such term under
25

•S 2186 IS

1 section 152 of the Internal Revenue Code of

2 1986.

3 (C) SPECIAL RULE FOR FOSTER CHIL4 DREN.—For purposes of subparagraph (A), a

5 child who is placed in foster care by a State

6 agency shall not be considered a dependent of

7 another individual.

8 (D) MODIFIED ADJUSTED GROSS IN9 COME.—The term ‘‘modified adjusted gross in10 come’’ means adjusted gross income (as defined

11 in section 62(a) of the Internal Revenue Code

12 of 1986)—

13 (i) determined without regard to sec14 tions 135, 162(l), 911, 931, and 933 of

15 such Code, and

16 (ii) increased by—

17 (I) the amount of interest re18 ceived or accrued by the individual

19 during the taxable year which is ex20 empt from tax, and

21 (II) the amount of the social se22 curity benefits (as defined in section

23 86(d) of such Code) received during

24 the taxable year to the extent not in-
26

•S 2186 IS

1 cluded in gross income under section

2 86 of such Code.

3 The determination under the preceding sen4 tence shall be made without regard to any car5 ryover or carryback.

6 (E) RULES RELATING TO DISREGARD OF

7 CERTAIN INCOME.—The Secretary may promul8 gate rules under which spousal income may be

9 disregarded in instances where a spouse is not

10 part of a family unit.

11 (5) POVERTY LINE.—The term ‘‘poverty line’’

12 means the income official poverty line (as defined by

13 the Office of Management and Budget, and revised

14 annually in accordance with section 673(2) of the

15 Omnibus Budget Reconciliation Act of 1981) that—

16 (A) in the case of a family of less than five

17 individuals, is applicable to a family of the size

18 involved; and

19 (B) in the case of a family of more than

20 four individuals, is applicable to a family of

21 four persons.

22 SEC. 310. REFERENCES TO INDIVIDUAL.

23 For purposes of this title, any reference to an individ24 ual shall include a reference to the parent or guardian of

25 such individual.
27

•S 2186 IS

1 TITLE IV—MISCELLANEOUS

2 PROVISIONS

3 SEC. 401. EMPLOYER MAY NOT DISCRIMINATE AGAINST

4 SUBSIDY ELIGIBLE INDIVIDUALS.

5 (a) GENERAL RULE.—Any employer which elects to

6 make employer contributions on behalf of an individual

7 who is an employee of such employer, or who is a depend8 ent of such employee, for health insurance coverage shall

9 not condition, or vary, such contributions with respect to

10 any such individual by reason of such individual’s status

11 as an individual eligible for premium assistance under title

12 III.

13 (b) ELIMINATION OF CONTRIBUTIONS.—An employer

14 shall not be treated as failing to meet the requirements

15 of subsection (a) if the employer ceases to make employer

16 contributions for health insurance coverage for all its em17 ployees.

18 SEC. 402. MAINTENANCE OF EFFORT.

19 A participating State may not modify the eligibility

20 requirements for children or pregnant women under the

21 State program under title XIX of the Social Security Act,

22 as in effect on July 1, 1996, in any manner that would

23 have the effect of reducing the eligibility of children or

24 pregnant women for coverage under such program.
28

•S 2186 IS

1 SEC. 403. SENSE OF THE COMMITTEE REGARDING FINANC2 ING.

3 It is the sense of the Committee on Labor and

4 Human Resources of the Senate that the program estab5 lished under this Act should be fully financed in a budget

6 neutral manner by offsetting revenues derived from in7 creasing the taxes on tobacco and providing for reductions

8 in undeserved corporate tax breaks.

Æ