II

104TH CONGRESS

2D SESSION S. 2149

To establish a program to provide health insurance for workers changing

jobs.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 27, 1996

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

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

Human Resources

A BILL

To establish a program to provide health insurance for

workers changing jobs.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Transitional Health

5 Insurance for Workers Changing Jobs Act of 1996’’.

6 SEC. 2. HEALTH INSURANCE FOR WORKERS CHANGING

7 JOBS.

8 The Public Health Service Act (42 U.S.C. 201 et

9 seq.) is amended by adding at the end thereof the follow10 ing new title:
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1 ‘‘TITLE XXVIII—HEALTH INSUR2 ANCE FOR WORKERS CHANG3 ING JOBS

4 ‘‘SEC. 2801. ESTABLISHMENT OF PROGRAM; APPROPRIA5 TIONS.

6 ‘‘(a) ESTABLISHMENT OF PROGRAM.—

7 ‘‘(1) IN GENERAL.—The Secretary of Labor

8 and the Secretary of Health and Human Services

9 shall establish a joint program to award grants to

10 States to enable such States to provide temporary

11 health insurance premium assistance for eligible in12 dividuals and their families in accordance with this

13 title.

14 ‘‘(2) FEDERAL OPERATION.—In the case of a

15 State that, for a fiscal year—

16 ‘‘(A) declines to participate in the program

17 under this title; or

18 ‘‘(B) does not have in effect a State plan

19 approved by the Secretaries under section 2802,

20 the Secretaries shall operate (either directly or by

21 contract) a health insurance program under this title

22 in such State for such fiscal year, using the funds

23 allotted to the State pursuant to section 2805(b).

24 ‘‘(b) APPROPRIATIONS.—
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1 ‘‘(1) IN GENERAL.—There are authorized to be

2 appropriated, and there are appropriated, for fiscal

3 year 1998 to carry out this title, $2,000,000,000.

4 ‘‘(2) SUBSEQUENT FISCAL YEARS.—There are

5 authorized to be appropriated, and there are appro6 priated, to carry out this title for fiscal year 1999

7 and for each subsequent fiscal year, $2,000,000,000,

8 adjusted to reflect—

9 ‘‘(A) the projected increase (if any) in the

10 average number of unemployment compensation

11 recipients for such fiscal year as compared to

12 the prior fiscal year; and

13 ‘‘(B) the average annual increase in health

14 insurance premiums for the fiscal year preced15 ing the fiscal year involved (as determined by

16 the Secretary of Health and Human Services).

17 ‘‘(3) EXCESS APPROPRIATIONS.—

18 ‘‘(A) AMOUNT AVAILABLE.—Amounts ap19 propriated for a fiscal year under paragraph (2)

20 that remain available at the end of such fiscal

21 year shall remain available for expenditure

22 under this title in any subsequent fiscal year.

23 ‘‘(B) UNUSED ALLOTMENTS.—The amount

24 of any allotment made to a State under section

25 2805 that the State determines will not be used
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1 by the State in the fiscal year for which the al2 lotment was made shall be made available and

3 used in accordance with subparagraph (A).

4 ‘‘(4) PROJECTED INCREASE (IF ANY) IN THE

5 AVERAGE NUMBER OF UNEMPLOYMENT COMPENSA6 TION RECIPIENTS.—As used in this subsection, the

7 term ‘projected increase (if any) in the average num8 ber of unemployment compensation recipients’

9 means, with respect to a fiscal year, a percentage in10 crease (if any) equal to—

11 ‘‘(i)(I) the average number of individ12 uals receiving unemployment compensation

13 in the 12-month period ending on June 30

14 of the fiscal year preceding the fiscal year

15 for which such determination is being

16 made; less

17 ‘‘(II) the average number of individ18 uals receiving unemployment compensation

19 in the 12-month period ending June 30,

20 1996, as determined by the Secretary of

21 Labor; divided by

22 ‘‘(ii) the average number of individ23 uals receiving unemployment compensation

24 in the 12-month period ending June 30,
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1 1996, as determined by the Secretary of

2 Labor.

3 ‘‘(c) AVAILABILITY OF FUNDS.—Funds appropriated

4 under this section shall remain available until expended.

5 ‘‘SEC. 2802. STATE PLAN.

6 ‘‘(a) IN GENERAL.—To be eligible to receive a grant

7 under this title, a State shall prepare and submit to the

8 Secretaries a State plan that contains the following:

9 ‘‘(1) PLAN SUMMARY.—A description of the

10 program the State will conduct under the plan.

11 ‘‘(2) USE OF FUNDS.—An assurance that funds

12 received by the State under this title for a fiscal year

13 will be used only—

14 ‘‘(A) to provide premium assistance pay15 ments; and

16 ‘‘(B) to pay administrative costs that do

17 not exceed 5 percent of the amount of the allot18 ment of the State for the fiscal year (or such

19 greater percentage, not to exceed 10 percent, as

20 the Secretaries may approve).

21 ‘‘(3) COMMITMENT TO PROVIDE REQUIRED COV22 ERAGE.—An assurance that the State will use

23 amounts received under the grant to provide tem24 porary health insurance premium assistance, in ac25 cordance with section 2803, to all eligible individuals
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1 and their eligible family members (as determined

2 under section 2804).

3 ‘‘(4) METHODOLOGY FOR DETERMINATION OF

4 ELIGIBILITY.—A description of the mechanism to be

5 used, in accordance with any standards the Secretar6 ies may set, to determine income eligibility of indi7 viduals for premium assistance under the State pro8 gram.

9 ‘‘(5) COVERAGE FORMULA.—A statement of the

10 monthly amount (or the formula to be used to deter11 mine the monthly amount) of payments to be made

12 under the plan to or on behalf of eligible individuals

13 and eligible family members.

14 ‘‘(6) COVERAGE REDUCTION METHOD.—A

15 statement of the method to be used, in accordance

16 with section 2803(c), to adjust the duration or

17 amount of payments under the State plan in the

18 event that the allotment of the State for the fiscal

19 year involved is insufficient to cover program costs

20 specified in paragraph (2) for such fiscal year.

21 ‘‘(7) NOTICES TO ELIGIBLE INDIVIDUALS.—An

22 assurance, and a statement of the methods to be

23 used—

24 ‘‘(A) that the State will ensure that all in25 dividuals determined to be eligible for unem-
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1 ployment compensation are informed, at the

2 time such determination is made, of their po3 tential eligibility for temporary health insurance

4 premium assistance under the State program

5 under this title;

6 ‘‘(B) that the State will make broadly and

7 readily available, information concerning and

8 applications for participation in the State pro9 gram; and

10 ‘‘(C) that the State will—

11 ‘‘(i) inform eligible individuals receiv12 ing premium assistance under the State

13 program at the time eligibility is deter14 mined, of the plan of the State for reduc15 ing or terminating such premium assist16 ance in accordance with section 2803(c);

17 and

18 ‘‘(ii) provide notice to the individuals

19 required under section 2803(c)(2) in the

20 event of such a reduction or termination of

21 such assistance.

22 ‘‘(8) RECORDS AND REPORTS.—An assurance

23 that the State will maintain such records, collect

24 such data, and furnish the Secretaries with reports,
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1 at such times and in such format as the Secretaries

2 may require, that contain—

3 ‘‘(A) such information as may be necessary

4 to enable the Secretaries to operate and admin5 ister the program under this title and to mon6 itor State administration of the program under

7 this title;

8 ‘‘(B) such information as may be necessary

9 to enable the Secretaries to evaluate the pro10 gram under this title; and

11 ‘‘(C) such additional information as the

12 Secretaries may require.

13 ‘‘(b) APPROVAL OF STATE PLAN.—

14 ‘‘(1) IN GENERAL.—The Secretaries shall ap15 prove a State plan that meets the requirements of

16 this section.

17 ‘‘(2) 90-DAY APPROVAL DEADLINE.—A State

18 plan shall be deemed to be approved unless the Sec19 retary notifies the State in writing not later than 90

20 days after the receipt of the State plan under sub21 section (a) that the plan is disapproved (and the rea22 sons therefor) or that specifies that additional infor23 mation is needed prior to approval.
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1 ‘‘SEC. 2803. COVERAGE REQUIREMENTS AND LIMITATIONS.

2 ‘‘(a) COVERAGE STANDARD.—Except provided in

3 subsection (c), a State, under a State program operated

4 under this title, shall provide assistance to eligible individ5 uals and their eligible family members in the State to en6 able such individuals and family members to obtain health

7 benefit coverage through the payment of all or part of the

8 cost of—

9 ‘‘(1) premiums relating to COBRA continuation

10 coverage obtained from the prior employer of the eli11 gible individual; or

12 ‘‘(2) in the case of an eligible individual who is

13 not eligible for COBRA continuation coverage as de14 scribed in paragraph (1), premiums relating to—

15 ‘‘(A) health benefit coverage that is

16 actuarily equivalent to (or, at the option of the

17 eligible individual, less than) the coverage pro18 vided under the Federal Employees Health

19 Benefit Program Blue Cross/Blue Shield stand20 ard option plan; or

21 ‘‘(B) any alternative coverage subject to

22 the approval of the Secretaries.

23 ‘‘(b) INDIVIDUAL PREMIUM ASSISTANCE.—

24 ‘‘(1) IN GENERAL.—Under a State program

25 under this title, a State may provide a monthly pre26 mium assistance payment to, or on behalf of, eligible
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1 individuals and their eligible family members in the

2 State.

3 ‘‘(2) AMOUNT.—Subject to paragraph (3) and

4 subsection (c), the amount of a monthly premium

5 assistance payment under this title with respect to

6 an eligible individual shall be equal to the following

7 percentage of the monthly premium to be paid by

8 the individual for health benefit coverage for such

9 individual in accordance with subsection (a):

10 ‘‘(A) 100 percent of such premium, if the

11 combined family income of such individual does

not exceed 1 12 ⁄12 of the annual Federal poverty

13 income guidelines for the month involved.

14 ‘‘(B) If such combined family income for

15 the month involved is greater than 100 percent

but less than 240 percent of 1 16 ⁄12 of the annual

17 Federal poverty income guidelines, the percent18 age determined under this subparagraph shall

19 be equal to—

20 ‘‘(i) 140 less the number of percent21 age points by which the combined family

22 income of the individual for the month involved exceeds 1 23 ⁄12 of the annual Federal

24 poverty income guidelines; divided by

25 ‘‘(ii) 140.
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1 ‘‘(3) ADJUSTMENT BASED ON ACTUARIAL

2 VALUE.—If an eligible individual elects to use assist3 ance provided under a State program for the cost of

4 premiums relating to health benefit coverage (not

5 provided through COBRA continuation coverage)

6 that has an actuarial value that is greater than that

7 described in subsection (a)(2)(A), the percentage of

8 the monthly premium assistance payment under this

9 subsection shall be reduced to reflect the percentage

10 by which the actuarial value of the coverage exceeds

11 the actuarial value described in such subsection

12 (a)(2)(A).

13 ‘‘(4) DURATION.—Premium assistance shall not

14 be provided with respect to an eligible individual

15 under a State program under this title for more

16 than 6 months during each period of unemployment.

17 ‘‘(c) OPTIONS WHEN STATE ALLOTMENT INSUFFI18 CIENT.—If a State demonstrates to the satisfaction of the

19 Secretaries that the State reasonably expects to be re20 quired to expend more than the amount of the State allot21 ment for the fiscal year involved under section 2805 to

22 meet the program costs of the State (as specified in sec23 tion 2802(a)(2)) under the State plan in effect for such

24 fiscal year, the State, to the extent necessary to ensure
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1 that State resources under the program are commensurate

2 with State obligations, may—

3 ‘‘(1) request an additional allotment from the

4 Secretaries; or

5 ‘‘(2) after providing 30 days advance notice to

6 covered eligible individuals (and, in the case of the

7 option under subparagraph (B), to the Secretar8 ies)—

9 ‘‘(A) reduce the duration or extent of pre10 mium assistance under the program for the fis11 cal year; or

12 ‘‘(B) cease payments under the program

13 for the balance of such fiscal year.

14 ‘‘SEC. 2804. INDIVIDUAL ELIGIBILITY.

15 ‘‘(a) ELIGIBILITY CRITERIA.—

16 ‘‘(1) ELIGIBLE INDIVIDUAL.—An individual

17 shall be an ‘‘eligible individual’’ for purposes of a

18 State plan under this title if, on the date on which

19 an application is submitted by the individual for as20 sistance under this title—

21 ‘‘(A) the individual—

22 ‘‘(i) resides in the State;

23 ‘‘(ii) received unemployment com24 pensation for at least one week in the
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1 month previous to the month for which the

2 determination of eligibility is being made;

3 ‘‘(iii) received health benefits coverage

4 (as defined by the Secretary of Health and

5 Human Services) through employment for

6 at least the last six months during which

7 such individual was employed; and

8 ‘‘(iv) is ineligible for assistance under

9 title XIX of the Social Security Act (other

10 than payments for COBRA continuation

11 coverage under section 1902(a)(10)(F) of

12 such Act) or title XVIII of such Act;

13 ‘‘(B) the combined family income of the individual is less than 240 percent of 1 14 ⁄12 of the

15 annual Federal poverty income guidelines for

16 the month in which the application is made;

17 and

18 ‘‘(C) the employed spouse of the individual,

19 if any is not eligible for employer-provided fam20 ily health insurance coverage or such employer

21 contributes less than 50 percent of the premium

22 for such family coverage.

23 ‘‘(2) ELIGIBLE FAMILY MEMBER.—As used in

24 this title, the term ‘‘eligible family member’’ means

25 the spouse or dependent child of an eligible individ-
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1 ual who is ineligible for assistance under title XIX

2 of the Social Security Act Medicaid (other than pay3 ments for COBRA continuation coverage under sec4 tion 1902(a)(10)(F) of such Act) or title XVIII of

5 such Act.

6 ‘‘(b) ELIGIBILITY DETERMINATIONS.—A State shall,

7 in accordance with this section and any implementing reg8 ulations the Secretaries may prescribe, conduct, either di9 rectly or by contract, monthly determinations as to the

10 eligibility of individuals for assistance under the State

11 plan under this title.

12 ‘‘SEC. 2805. ALLOTMENTS TO STATES.

13 ‘‘(a) IN GENERAL.—Of the amounts appropriated for

14 each fiscal year the Secretaries shall allot 25 percent for

15 each quarter among all States (including States for which

16 the Secretaries operates a State program under section

17 2801(a)(2)). With respect to a State with an application

18 approved under section 2803(c)(1), such allotment shall

19 be made on the basis of the unemployment percentage for20 mula described in subsection (b) as applied to the measur21 ing period described in subsection (c) for such quarter,

22 together with such additional funds as may be approved

23 for allotment by the Secretaries based on the application

24 of a State under section 2803(c)(1). With respect to a

25 State for which the Secretaries will operate the State pro-
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1 gram under section 2801(a)(2), the Secretaries shall de2 termine the allotment necessary for such State.

3 ‘‘(b) UNEMPLOYMENT PERCENTAGE FORMULA.—

4 ‘‘(1) IN GENERAL.—For purposes of each quar5 terly allotment under subsection (a), the share of a

6 State shall be equal to an amount bearing the same

7 ratio to the amount to be allotted for such quarter

8 as the number of unemployed individuals in the

9 State who collected unemployment compensation

10 benefits during such quarter bears to the number of

11 such individuals in all States (as determined on the

12 basis of data provided by the Bureau of Labor Sta13 tistics on the average unemployment compensation

14 claims in the States for the measuring period con15 cerned). Such ratio shall be adjusted for each State

16 to reflect the average per capita premium payment

17 amount in each State.

18 ‘‘(2) ADDITIONAL ALLOTMENT.—The Secretar19 ies shall use amounts available for the fiscal year in20 volved under section 2801(b)(3) and remaining after

21 allotments under paragraph (1) to make additional

22 allotments to States submitting applications under

23 section 2803(c)(1).
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1 ‘‘(c) MEASURING PERIODS.—For purposes of the al2 lotment under subsection (a), the measuring periods are

3 the 12 months ending in—

4 ‘‘(1) with respect to the first quarter, June of

5 the preceding fiscal year;

6 ‘‘(2) with respect to the second quarter, Sep7 tember of the preceding fiscal year;

8 ‘‘(3) with respect to the third quarter, Decem9 ber of such fiscal year; and

10 ‘‘(4) with respect to the fourth quarter, March

11 of such fiscal year.

12 ‘‘SEC. 2806. PAYMENTS TO STATES.

13 ‘‘(a) IN GENERAL.—The Secretaries shall make

14 quarterly payments to each State with a plan approved

15 under section 2802 in an amount equal to the allotment

16 for the State under section 2805 for such quarter.

17 ‘‘(b) PAYMENT ADJUSTMENTS.—Payments to a State

18 under subsection (a) shall be reduced as necessary to re19 coup payments for the current or any prior fiscal year not

20 expended by the State in accordance with this title.

21 ‘‘SEC. 2807. REGULATIONS.

22 ‘‘The Secretaries (in consultation, as appropriate,

23 with the Secretary of Labor and the Secretary of the

24 Treasury) is authorized to promulgate such regulations as

25 may be necessary to carry out the program under this
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1 title. The Secretaries may promulgate any interim final

2 rules as the Secretaries determine are appropriate to carry

3 out this title.

4 ‘‘SEC. 2808. AUDITS.

5 ‘‘The Secretaries and the Comptroller General of the

6 United States or any of their duly authorized representa7 tives shall have access for the purpose of audit and exam8 ination to any books, documents, papers, and records that

9 are pertinent to a grant received under this title.

10 ‘‘SEC. 2809. DEFINITIONS.

11 ‘‘In this title:

12 ‘‘(1) BLUE CROSS/BLUE SHIELD STANDARD OP13 TION PLAN.—The term ‘Blue Cross/Blue Shield

14 standard option plan’ means, with respect to a pro15 gram under this title in a State, such plan as is

16 available through the Federal Employees Health

17 Benefit Program.

18 ‘‘(2) COBRA CONTINUATION COVERAGE.—The

19 term ‘COBRA continuation coverage’ means tempo20 rarily extended coverage of employment-related

21 health benefits for an individual after termination of

22 employment, in accordance with part 6 of subtitle B

23 of title I of the Employee Retirement Income Secu24 rity Act of 1974 (29 U.S.C. 1161 et seq.), title XXII

25 of the Public Health Service Act (42 U.S.C. 300bb–
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1 1 et seq.), or section 4980B of the Internal Revenue

2 Code of 1986.

3 ‘‘(3) FEDERAL POVERTY INCOME GUIDE4 LINES.—The term ‘Federal poverty income guide5 lines’ means the poverty guidelines updated annually

6 in the Federal Register by the Department of

7 Health and Human Services under the authority of

8 section 673(2) of the Omnibus Reconciliation Act of

9 1981 (42 U.S.C. 9902(2)).

10 ‘‘(4) PREMIUM ASSISTANCE.—The term ‘pre11 mium assistance’ means the amount paid to or on

12 behalf of an eligible individual and eligible family

13 members, if any, under the program under this title

14 for the purchase of health insurance coverage.

15 ‘‘(5) SECRETARIES.—The term ‘Secretaries’

16 means the Secretary of Health and Human Services

17 and the Secretary of Labor.

18 ‘‘(6) STATE.—The term ‘State’ means each of

19 the several States, the District of Columbia, and the

20 Commonwealth of Puerto Rico.

21 ‘‘(7) UNEMPLOYMENT COMPENSATION.—The

22 term ‘unemployment compensation’ has the meaning

23 given that term in section 85(b) of the Internal Rev24 enue Code of 1986.’’.
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1 SEC. 3. 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 joint program

5 established under title XXVIII of the Public Health Serv6 ice Act (as added by section 2) should be financed in a

7 budget neutral manner by offsetting revenues derived from

8 eliminating undeserved corporate tax breaks, especially

9 tax breaks that encourage American corporations to move

10 jobs overseas and that reward book-keeping transactions

11 that artificially place corporate income overseas for tax

12 purposes.

Æ