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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 2186 Introduced in Senate (IS)]

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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Healthy Children 
Family Assistance Health Insurance Program Act of 1996''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
           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.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) it is in the national interest to ensure that every 
        American child has access to affordable health care;
            (2) no family should be forced to choose between health 
        care for its children and other essential needs;
            (3) 10,500,000 American children under the age of 19 have 
        no health insurance coverage, and 90 percent of these children 
        have parents who work, and too many of these children go 
        without needed health care;
            (4) families have an obligation to contribute to the cost 
        of health insurance coverage for their children, consistent 
        with their ability to pay; and
            (5) the Federal Government has an obligation to help 
        families provide health insurance coverage for children.

           TITLE I--COVERAGE FOR CHILDREN AND PREGNANT WOMEN

                        Subtitle A--Definitions

SEC. 100. DEFINITIONS.

    For purposes of this Act:
            (1) Eligible child.--The term ``eligible child'' means an 
        individual who is under 19 years of age.
            (2) Participating state.--The term ``participating State'' 
        means any State that establishes a program under subtitle B.
            (3) Qualifying children's policy.--The term ``qualifying 
        children's policy'' means a policy that meets the standards 
        described in section 201.
            (4) Qualifying pregnant woman's policy.--The term 
        ``qualifying pregnant woman's policy'' means a policy that 
        meets the standards described in section 202.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

                Subtitle B--Participating State Program

SEC. 101. ESTABLISHMENT OF PARTICIPATING STATE PROGRAMS.

    (a) In General.--A State shall be a participating State for 
purposes of this subtitle if such State establishes the program 
described in section 102 for making enrollment in a health plan 
providing a qualifying children's policy available to each eligible 
child in the State and a qualifying pregnant woman's policy available 
to each eligible pregnant woman in the State.
    (b) Designation of State Agency.--A State may designate an 
appropriate State agency to administer the State program under this 
subtitle.

SEC. 102. PROGRAM TO PROVIDE ACCESS TO HEALTH PLANS TO ELIGIBLE 
              CHILDREN AND PREGNANT WOMEN.

    (a) In General.--
            (1) Program described.--A State program described in this 
        section is a program under which the State negotiates and 
        contracts with at least 1 health plan providing--
                    (A) a qualifying children's policy in order to make 
                such a plan available to eligible children residing in 
                the State; and
                    (B) a qualifying pregnant woman's policy in order 
                to make such a plan available to pregnant women 
                residing in the State.
            (2) Minimum requirement.--At least one health plan with 
        which a State contracts under paragraph (1) must offer a broad 
        access delivery system (as defined by the Secretary consistent 
        with paragraph (3)).
            (3) Broad access delivery system.--In defining a broad 
        access delivery system under this paragraph, the Secretary 
        shall ensure that such a system under such definition permits 
        access to the majority of speciality and nonspeciality 
        providers in a service area, whether in-network or out-of-
        network (in the case of a network plan) at a payment rate for 
        non-network providers that is consistent with reimbursement by 
        fee-for-service plans in the area involved and that does not 
        establish cost-sharing for use of services of non-network 
        providers that is greater than that typical of fee-for-service 
        plans in the area involved.
    (b) Additional State Responsibilities.--A State program described 
in this section shall--
            (1)(A) with respect to a qualifying children's policy, 
        provide for the cost-effective enrollment of each eligible 
        child in a health plan offering a qualifying children's policy; 
        and
            (B) with respect to a qualifying pregnant woman's policy, 
        provide for the cost-effective enrollment of each pregnant 
        woman in a health plan offering a qualifying pregnant woman's 
        policy;
            (2) provide information on health plans offering a 
        qualifying children's policy or qualifying pregnant woman's 
        policy through the State program and the availability of 
        subsidies under title III; and
            (3) comply with any other requirements established by the 
        Secretary.

SEC. 103. NOTICE OF INTENT TO PARTICIPATE.

    (a) In General.--Each State shall file with the Secretary a notice 
of intent to be treated as a participating State under this subtitle by 
no later than January 1, 1998, and no later than January 1 of each 
subsequent year.
    (b) Additional Information in Notice of Intent.--Each notice of 
intent for a participating State submitted under subsection (a) must 
contain a plan for implementing the program described in section 102.

SEC. 104. PAYMENTS TO STATES FOR OPERATING AND ADMINISTRATIVE COSTS.

    The Secretary shall provide for payment to each participating State 
for each calendar quarter, beginning with any quarter beginning on or 
after June 1, 1998, in an amount equal to--
            (1) 100 percent of the total amount estimated by the 
        Secretary to be expended by the State during such quarter for 
        premium assistance and cost sharing assistance under the 
        program described in section 102; and
            (2) 75 percent of the total amount estimated by the 
        Secretary to be expended by the State during such quarter for 
        proper and efficient administration of the program described in 
        section 102.

                     TITLE II--QUALIFYING POLICIES

                    Subtitle A--Qualifying Policies

SEC. 201. GENERAL DESCRIPTION OF QUALIFYING CHILDREN'S POLICY.

    (a) Description.--For purposes of this Act, a qualifying children's 
policy is a policy for children under the age of 19 that--
            (1) provides coverage consistent with coverage provided 
        under high quality group health plans as determined appropriate 
        by the Secretary;
            (2) meets the special needs of children as determined 
        appropriate by the Secretary; and
            (3) provides for coverage of early and periodic screening, 
        diagnosis and treatment services (as defined in title XIX of 
        the Social Security Act).
    (b) Preventive Services.--No cost sharing requirements shall be 
imposed for preventive services provided under this section.

SEC. 202. GENERAL DESCRIPTION OF QUALIFYING PREGNANT WOMAN'S POLICY.

    (a) Description.--For purposes of this Act, a qualifying pregnant 
woman's policy is a policy for pregnant women that provides coverage 
for prenatal care, delivery, and post-natal care as determined 
appropriate by the Secretary.
    (b) Preventive Services.--No cost sharing requirements shall be 
imposed for preventive services provided under this section.

        Subtitle B--Access and Preexisting Condition Limitations

SEC. 211. LIMITATION ON PREEXISTING CONDITION EXCLUSION PERIOD.

    (a) Eligible Children and Pregnant Women.--No preexisting condition 
exclusion shall be imposed with respect to the following:
            (1) A child eligible for coverage under section 2741 of the 
        Public Health Service Act (as added by section 102 of the 
        Health Insurance Portability and Accountability Act of 1996).
            (2) Newborns if coverage under a qualifying children's 
        policy is applied for within 90 days of the date of birth of 
        the child involved.
            (3) Pregnant women.
            (4) A child eligible for a full subsidy under title III.
    (b) Other Children.--A preexisting condition exclusion may be 
imposed with respect to a child not described in subsection (a), except 
that any such preexisting condition exclusion may not extend for a 
period in excess of 6-months after the enrollment date, nor may any 
look-back period extend for a period in excess of 6-months.
    (c) Definition.--As used in this section, the term ``preexisting 
condition exclusion'' shall have the meaning given such term by section 
2701(b)(1) of the Public Health Service Act (as added by section 102 of 
the Health Insurance Portability and Accountability Act of 1996).

    Subtitle C--General Duties and Responsibilities of the Secretary

SEC. 221. REGULATIONS.

    The Secretary may issue regulations and interim final regulations 
to implement the program established under this Act.

          TITLE III--ASSISTANCE TO FAMILIES AND PREGNANT WOMEN

SEC. 301. REQUIREMENT TO OPERATE PROGRAM.

    In order to qualify for payments under section 308, each State 
shall have in effect a program for furnishing premium assistance and 
cost-sharing assistance in accordance with this title for calendar 
years beginning after 1997.

SEC. 302. ASSISTANCE WITH QUALIFYING CHILDREN'S HEALTH PLAN OR 
              QUALIFYING PREGNANT WOMAN'S HEALTH PLAN PREMIUMS.

    (a) Eligibility.--
            (1) In general.--An eligible individual (as defined in 
        section 309(5)) who has been determined by a State under 
        section 304 to be a premium subsidy eligible individual (as 
        defined in paragraph (2)) shall be eligible for premium 
        assistance in the amount determined under subsection (b).
            (2) Premium subsidy eligible individual.--For purposes of 
        this title, the term ``premium subsidy eligible individual'' 
        means any individual who--
                    (A) is an eligible child (as defined in section 
                100(1)) or a pregnant woman;
                    (B) is not eligible for medical assistance under a 
                State plan under title XIX of the Social Security Act; 
                and
                    (C) has a family income determined under section 
                309(4) which does not exceed 300 percent of the poverty 
                line.
            (3) Limitation on use of assistance.--A premium subsidy 
        eligible individual who receives premium assistance under this 
        title shall use such assistance only for payments toward the 
        premium under a qualifying children's health plan (as defined 
        in section 309(1)) or a qualifying pregnant woman's health plan 
(as defined in section 309) in which the individual is enrolled.
    (b) Amount of Assistance.--
            (1) In general.--
                    (A) Determination of amount.--The amount of premium 
                assistance for a month for a premium subsidy eligible 
                individual is an amount equal to the least of--
                            (i) the subsidy percentage specified in 
                        paragraph (3) multiplied by \1/12\th of the 
                        annual premium paid for coverage under a 
                        qualifying children's health plan or a 
                        qualifying pregnant woman's health plan in 
                        which the individual is enrolled; or
                            (ii) the subsidy percentage specified in 
                        paragraph (3) multiplied by \1/12\th of the 
                        weighted average annual premium rate (as 
                        determined under subparagraph (B)).
                    (B) Weighted average annual premium rate.--For 
                purposes of this paragraph, the term ``weighted average 
                annual premium rate'' means the average premium for the 
                qualifying children's health plans or qualifying 
                pregnant woman's health plan (as the case may be) 
                offered in the area in which the individual resides (as 
                determined by the State), weighted to reflect the total 
                enrollment of individuals among such plans.
            (3) Subsidy percentage.--For purposes of paragraph (1)(A), 
        the term ``subsidy percentage'' means 100 percent reduced (but 
        not below zero) by .86 percentage point for each 1 percentage 
        point (or portion thereof) by which such individual's family 
        income exceeds 185 percent of the poverty line. The subsidy 
        percentage for an individual with a family income of 300 
        percent of poverty or more shall be zero.
            (4) Special rule.--If an employer contribution toward the 
        premium under a health plan that is available to a premium 
        subsidy eligible individual through the employer is made or 
        offered to be made on behalf of the individual, the amount of 
        any premium subsidy under this section shall be reduced by the 
        amount of such employer contribution.
    (c) Payments.--
            (1) In general.--The amount of the premium assistance 
        available to a premium subsidy eligible individual under 
        subsection (b) shall be paid in the case of an individual 
        enrolled in a health plan under a State program under subtitle 
        A of title I, by the State directly to the plan in which the 
        individual is enrolled. Payments under the preceding sentence 
        shall commence in the first month during which the individual 
        is enrolled in a qualifying children's health plan or 
        qualifying pregnant woman's health plan and determined under 
        section 304 to be a premium subsidy eligible individual.
            (2) Adjustments for cost-sharing.--Amounts paid to plans 
        under this subsection shall be adjusted to account for cost-
        sharing assistance provided to cost-sharing subsidy eligible 
        individuals under section 303.
            (3) Individual responsibility.--An individual shall be 
        responsible for paying any portion of the premium for the 
        qualifying children's health plan or the qualifying pregnant 
        woman's health plan in which the individual is enrolled that is 
        not paid as premium assistance under paragraph (1).

SEC. 303. ASSISTANCE WITH COST-SHARING FOR QUALIFYING CHILDREN'S HEALTH 
              PLANS OR QUALIFYING PREGNANT WOMAN'S HEALTH PLAN.

    (a) Eligibility.--
            (1) In general.--An eligible individual (as defined in 
        section 309(5)) who has been determined by a State under 
        section 304 to be a cost-sharing subsidy eligible individual 
        (as defined in paragraph (2)) shall be eligible for cost-
        sharing assistance in accordance with subsection (b).
            (2) Cost-sharing subsidy eligible individual.--For purposes 
        of this title, the term ``cost-sharing subsidy eligible 
        individual'' means any premium subsidy eligible individual 
        whose family income is less than 150 percent of the poverty 
        line.
    (b) Cost-Sharing Assistance.--A cost-sharing subsidy eligible 
individual enrolled in a qualifying children's health plan or a 
qualifying pregnant woman's health plan shall be eligible for cost-
sharing assistance consisting of a reduction in the amount of copayment 
applied with respect to an item or service to an amount equal to in the 
case of an individual with a family income that is less than 150 
percent of the poverty line, 20 percent of the copayment amount 
otherwise applicable under the plan, rounded to the nearest dollar.
    (c) Notification of Health Plans.--If a State determines that an 
individual is eligible for cost-sharing assistance under this section 
the State shall notify the health plan in which such individual is 
enrolled in a timely manner, if the individual enrolled in a health 
plan under a State program under subtitle B of title I.

SEC. 304. ELIGIBILITY DETERMINATIONS.

    (a) In General.--The Secretary shall promulgate regulations 
specifying requirements for State programs under this title with 
respect to determining eligibility for premium and cost-sharing 
assistance.
    (b) Specifications for Regulations.--The regulations promulgated by 
the Secretary under subsection (a) shall include the following 
requirements:
            (1) Applications.--A State program shall provide that an 
        individual may file an application for assistance with an 
        agency designated by the State at any time, in person or by 
        mail.
            (2) Application form.--A State program shall provide for 
        the use of an application form developed by the Secretary. Such 
        form shall--
                    (A) be simple in form and understandable to the 
                average individual;
                    (B) in the case of a State with a significant 
                number of residents with limited English-speaking 
                proficiency, be in languages other than English, as 
                appropriate for the State;
                    (C) require the provision of information necessary 
                to make a determination as to whether an individual is 
                eligible for assistance, including a declaration of 
                estimated income by the individual; and
                    (D) require attachment of such documentation as 
                deemed necessary by the Secretary in order to ensure 
                eligibility for assistance.
            (3) Distribution of applications.--A State program shall 
        make applications accessible at locations where individuals are 
        most likely to obtain the applications.
            (4) Requirement to submit revised application.--A State 
        program shall require individuals to submit revised 
        applications to reflect changes in estimated family incomes, 
        including changes in employment status of family members, 
        during the year. The State shall revise the amount of any 
        premium assistance based on such a revised application.
    (c) Effectiveness of Eligibility.--A determination by a State that 
an individual is a premium or cost-sharing subsidy eligible individual 
shall be effective for the calendar year for which such determination 
is made unless a revised application submitted under subsection (b)(4) 
indicates that an individual is no longer eligible for assistance.
    (d) Coordination.--Determinations made pursuant to this section may 
be coordinated with determinations of eligibility for State-
administered health programs to the extent that such coordination 
brings about administrative efficiencies.

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

    (a) In General.--
            (1) Requirement to file statement.--An individual who 
        received premium assistance under this title from a State for 
        any month in a calendar year shall file with the State an 
        income reconciliation statement to verify the individual's 
        family income for the year. Such a statement shall be filed at 
        such time, and contain such information, as the State may 
        specify in accordance with regulations promulgated by the 
        Secretary.
            (2) Notice of requirement.--The State shall provide a 
        written notice of the requirement under paragraph (1) at the 
        end of the year to an individual who received premium 
        assistance under this title in any month during the year.
    (b) Reconciliation of Premium Assistance Based on Actual Income.--
            (1) In general.--Based on and using the income reported in 
        the reconciliation statement filed under subsection (a) with 
        respect to an individual, the State shall compute the amount of 
        premium assistance that should have been provided under this 
        title with respect to the individual for the year involved.
            (2) Overpayment of assistance.--If the total amount of the 
        premium assistance provided was greater than the amount 
        computed under paragraph (1), the individual is liable to pay 
        an amount equal to the amount of the excess payment. The 
        individual shall pay such amount to the State if the individual 
        enrolled in a health plan under a State program under subtitle 
        A of title I.
            (3) Underpayment of assistance.--If the total amount of the 
        premium assistance provided was less than the amount computed 
        under paragraph (1), the State shall pay to the individual an 
        amount equal to the amount of the deficit.
            (4) State option.--The State may, in accordance with 
        regulations promulgated by the Secretary, establish a procedure 
        under which any overpayments or underpayments of premium 
        assistance determined under paragraphs (2) and (3) with respect 
        to an individual for a year may be collected or paid, as 
        appropriate, through adjustments to the premium assistance 
        furnished to such individual in the succeeding year.
    (c) Penalties for Failure to File.--In the case of an individual 
who is required to file a statement under this section in a year who 
fails to file such a statement, the entire amount of the premium 
assistance provided in such year shall be considered an excess amount 
under subsection (b)(2) and such individual shall not be eligible for 
premium assistance under this title until such statement is filed. The 
State, using rules established by the Secretary, shall waive the 
application of this subsection if the individual establishes, to the 
satisfaction of the State under such rules, good cause for the failure 
to file the statement on a timely basis.

SEC. 306. PENALTIES FOR MATERIAL MISREPRESENTATION AND FALSE 
              INFORMATION.

    (a) In General.--Any individual who knowingly makes a material 
misrepresentation of information or provides false information in an 
application for assistance under this title under section 304 or an 
income reconciliation statement under section 305 shall be liable to 
the Federal Government for the amount any premium assistance received 
by the individual on the basis of such misrepresentation or false 
information and interest on such amount at a rate specified by the 
Secretary, and shall, in addition, be liable to the Federal Government 
for $2,000 or, if greater, 3 times the amount of any premium assistance 
received by the individual on the basis of such misrepresentation or 
false information.
    (b) Collection of Penalty Amounts.--A State which receives an 
application for assistance or an income reconciliation statement with 
respect to which a material misrepresentation has been made or false 
information has been provided shall collect the penalty amount required 
under subsection (a) and submit such amount to the Secretary in a 
timely manner.

SEC. 307. ENROLLMENT OUTREACH.

    The Secretary shall promulgate regulations under which each State 
operating a program for premium assistance under this title shall have 
in effect an enrollment outreach system under which individuals may be 
assisted in enrolling under this Act by health care providers who 
furnish services to such individuals.

SEC. 308. AGGREGATE FEDERAL PAYMENTS.

    (a) In General.--The Secretary shall provide for payment to each 
participating State for each calendar quarter, beginning with any 
quarter beginning on or after June 1, 1998, in an amount equal to--
            (1) 100 percent of the total amount estimated by the 
        Secretary to be expended by the State during such quarter for 
        premium and cost-sharing assistance under this title for 
        enrollment in qualifying children's health plans or qualifying 
        pregnant woman's health plans through the programs operated 
        under title I; and
            (2) 75 percent of the total amount estimated by the 
        Secretary to be expended by the State during such quarter for 
        proper and efficient administration of the program described in 
        this title.
    (b) Reduction in Payments for Administrative Errors.--
            (1) In general.--In the case of administrative errors 
        described in paragraph (2), matching payments available to a 
        State under subsection (a) shall be reduced by an amount 
        determined appropriate by the Secretary.
            (2) Administrative errors described.--The administrative 
        errors described in this paragraph include the following:
                    (A) An eligibility error rate for premium 
                assistance to the extent the applicable error rate 
                exceeds the maximum permissible error rate specified by 
                the Secretary.
                    (B) Misappropriations or other expenditures that 
                the Secretary finds are attributable to malfeasance or 
                misfeasance.
    (c) Audits.--The Secretary shall conduct regular audits of the 
activities conducted under this title.
    (d) Budgetary Treatment.--This section constitutes budget authority 
in advance of appropriations Acts, and represents the obligation of the 
Federal Government to provide payments to the States in accordance with 
this section.

SEC. 309. DEFINITIONS AND DETERMINATIONS OF INCOME.

    For purposes of this title:
            (1) Qualifying children's health plan.--The term 
        ``qualifying children's health plan'' means a health plan 
        providing the qualifying children's policy as described in 
        section 201.
            (2) Qualifying pregnant woman's health plan.--The term 
        ``Qualifying pregnant woman's health plan'' means a health plan 
        providing the qualifying pregnant woman's policy as described 
        in section 202.
            (3) Child.--The term ``child`` means an individual who is 
        under 19 years of age.
            (4) Determinations of income.--
                    (A) Family income.--The term ``family income'' 
                means, with respect to an individual who--
                            (i) is not a dependent (as defined in 
                        subparagraph (B)) of another individual, the 
                        sum of the modified adjusted gross incomes (as 
                        defined in subparagraph (D)) for the 
                        individual, the individual's spouse, and 
                        children who are dependents of the individual; 
                        or
                            (ii) is a dependent of another individual, 
                        the sum of the modified adjusted gross incomes 
                        for the other individual, the other 
                        individual's spouse, and children who are 
                        dependents of the other individual.
                    (B) Dependent.--The term ``dependent'' shall have 
                the meaning given such term under section 152 of the 
                Internal Revenue Code of 1986.
                    (C) Special rule for foster children.--For purposes 
                of subparagraph (A), a child who is placed in foster 
                care by a State agency shall not be considered a 
                dependent of another individual.
                    (D) Modified adjusted gross income.--The term 
                ``modified adjusted gross income'' means adjusted gross 
                income (as defined in section 62(a) of the Internal 
                Revenue Code of 1986)--
                            (i) determined without regard to sections 
                        135, 162(l), 911, 931, and 933 of such Code, 
                        and
                            (ii) increased by--
                                    (I) the amount of interest received 
                                or accrued by the individual during the 
                                taxable year which is exempt from tax, 
                                and
                                    (II) the amount of the social 
                                security benefits (as defined in 
                                section 86(d) of such Code) received 
                                during the taxable year to the extent 
                                not included in gross income under 
                                section 86 of such Code.
                The determination under the preceding sentence shall be 
                made without regard to any carryover or carryback.
                    (E) Rules relating to disregard of certain 
                income.--The Secretary may promulgate rules under which 
                spousal income may be disregarded in instances where a 
                spouse is not part of a family unit.
            (5) Poverty line.--The term ``poverty line'' means the 
        income official poverty line (as defined by the Office of 
        Management and Budget, and revised annually in accordance with 
        section 673(2) of the Omnibus Budget Reconciliation Act of 
        1981) that--
                    (A) in the case of a family of less than five 
                individuals, is applicable to a family of the size 
                involved; and
                    (B) in the case of a family of more than four 
                individuals, is applicable to a family of four persons.

SEC. 310. REFERENCES TO INDIVIDUAL.

    For purposes of this title, any reference to an individual shall 
include a reference to the parent or guardian of such individual.

                   TITLE IV--MISCELLANEOUS PROVISIONS

SEC. 401. EMPLOYER MAY NOT DISCRIMINATE AGAINST SUBSIDY ELIGIBLE 
              INDIVIDUALS.

    (a) General Rule.--Any employer which elects to make employer 
contributions on behalf of an individual who is an employee of such 
employer, or who is a dependent of such employee, for health insurance 
coverage shall not condition, or vary, such contributions with respect 
to any such individual by reason of such individual's status as an 
individual eligible for premium assistance under title III.
    (b) Elimination of Contributions.--An employer shall not be treated 
as failing to meet the requirements of subsection (a) if the employer 
ceases to make employer contributions for health insurance coverage for 
all its employees.

SEC. 402. MAINTENANCE OF EFFORT.

    A participating State may not modify the eligibility requirements 
for children or pregnant women under the State program under title XIX 
of the Social Security Act, as in effect on July 1, 1996, in any manner 
that would have the effect of reducing the eligibility of children or 
pregnant women for coverage under such program.

SEC. 403. SENSE OF THE COMMITTEE REGARDING FINANCING.

    It is the sense of the Committee on Labor and Human Resources of 
the Senate that the program established under this Act should be fully 
financed in a budget neutral manner by offsetting revenues derived from 
increasing the taxes on tobacco and providing for reductions in 
undeserved corporate tax breaks.
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