II

105TH CONGRESS

1ST SESSION S. 1114

To impose a limitation on lifetime aggregate limits imposed by health plans.

IN THE SENATE OF THE UNITED STATES

JULY 31, 1997

Mr. JEFFORDS (for himself, Mr. ROCKEFELLER, Ms. MIKULSKI, Mr. INOUYE,

Mr. DASCHLE, Mr. KERRY, Mrs. BOXER, Mrs. FEINSTEIN, Mr. DODD,

Mr. WELLSTONE, Mr. HARKIN, and Mr. HOLLINGS) introduced the following bill; which was read twice and referred to the Committee on Labor

and Human Resources

A BILL

To impose a limitation on lifetime aggregate limits imposed

by health plans.

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 ‘‘Lifetime Caps Dis5 crimination Prevention Act’’.

6 SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT IN7 COME SECURITY ACT OF 1974.

8 (a) IN GENERAL.—Subpart B of part 7 of subtitle

9 B of title I of the Employee Retirement Income Security
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1 Act of 1974 (as added by section 603(a) of the Newborns’

2 and Mothers’ Health Protection Act of 1996 and amended

3 by section 702(a) of the Mental Health Parity Act of

4 1996) is amended by adding at the end the following new

5 section:

6 ‘‘SEC. 713. LIMITATION ON LIFETIME AGGREGATE LIMITS.

7 ‘‘(a) IN GENERAL.—A group health plan and a health

8 insurance issuer providing health insurance coverage in

9 connection with a group health plan, may not impose an

10 aggregate dollar lifetime limit of less than—

11 ‘‘(1) with respect to the first 3 plan years after

12 the effective date of this section, $5,000,000; and

13 ‘‘(2) with respect to subsequent plan years,

14 $10,000,000;

15 with respect to benefits payable under the plan or cov16 erage.

17 ‘‘(b) SMALL EMPLOYERS.—

18 ‘‘(1) IN GENERAL.—Subsection (a) shall not

19 apply to any group health plan (and group health in20 surance coverage offered in connection with a group

21 health plan) offered to or maintained for employees

22 of a small employer.

23 ‘‘(2) SMALL EMPLOYER.—For purposes of

24 paragraph (1), the term ‘small employer’ means an

25 employer who normally employed fewer than 20 em-
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1 ployees on a typical business day during the preced2 ing calendar year and who employs fewer than 20

3 employees on the first day of the plan year.

4 ‘‘(3) APPLICATION OF CERTAIN RULES IN DE5 TERMINATION OF EMPLOYER SIZE.—For purposes of

6 this subsection—

7 ‘‘(A) APPLICATION OF AGGREGATION RULE

8 FOR EMPLOYERS.—Rules similar to the rules

9 under subsections (b), (c), (m), and (o) of sec10 tion 414 of the Internal Revenue Code of 1986

11 shall apply for purposes of treating persons as

12 a single employer.

13 ‘‘(B) EMPLOYERS NOT IN EXISTENCE IN

14 PRECEDING YEAR.—In the case of an employer

15 which was not in existence throughout the pre16 ceding calendar year, the determination of

17 whether such employer is a small employer shall

18 be based on the number of employees that it is

19 reasonably expected such employer will normally

20 employ on a typical business day in the current

21 calendar year.

22 ‘‘(C) PREDECESSORS.—Any reference in

23 this subsection to an employer shall include a

24 reference to any predecessor of such employer.
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1 ‘‘(c) DEFINITION.—In this section, the term ‘aggre2 gate dollar lifetime limit’ means, with respect to benefits

3 under a group health plan or health insurance coverage,

4 a dollar limitation on the total amount that may be paid

5 with respect to such benefits under the plan or health in6 surance coverage with respect to an individual or other

7 coverage unit.’’.

8 (b) CLERICAL AMENDMENT.—The table of contents

9 in section 1 of such Act, as amended by section 603 of

10 the Newborns’ and Mothers’ Health Protection Act of

11 1996 and section 702 of the Mental Health Parity Act

12 of 1996, is amended by inserting after the item relating

13 to section 712 the following new item:

‘‘Sec. 713. Limitation on lifetime aggregate limits.’’.

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

15 this section shall apply with respect to plan years begin16 ning on or after the date that is 2 years after the date

17 of enactment of this Act.

18 SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE

19 ACT RELATING TO THE GROUP MARKET.

20 (a) IN GENERAL.—Subpart 2 of part A of title

21 XXVII of the Public Health Service Act (as added by sec22 tion 604(a) of the Newborns’ and Mothers’ Health Protec23 tion Act of 1996 and amended by section 703(a) of the

24 Mental Health Parity Act of 1996) is amended by adding

25 at the end the following new section:
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1 ‘‘SEC. 2706. LIMITATION ON LIFETIME AGGREGATE LIMITS.

2 ‘‘(a) IN GENERAL.—A group health plan and a health

3 insurance issuer providing health insurance coverage in

4 connection with a group health plan, may not impose an

5 aggregate dollar lifetime limit of less than—

6 ‘‘(1) with respect to the first 3 plan years after

7 the effective date of this section, $5,000,000; and

8 ‘‘(2) with respect to subsequent plan years,

9 $10,000,000;

10 with respect to benefits payable under the plan or cov11 erage.

12 ‘‘(b) SMALL EMPLOYERS.—

13 ‘‘(1) IN GENERAL.—Subsection (a) shall not

14 apply to any group health plan (and group health in15 surance coverage offered in connection with a group

16 health plan) offered to or maintained for employees

17 of a small employer.

18 ‘‘(2) SMALL EMPLOYER.—For purposes of

19 paragraph (1), the term ‘small employer’ means an

20 employer who normally employed fewer than 20 em21 ployees on a typical business day during the preced22 ing calendar year and who employs fewer than 20

23 employees on the first day of the plan year.

24 ‘‘(3) APPLICATION OF CERTAIN RULES IN DE25 TERMINATION OF EMPLOYER SIZE.—For purposes of

26 this subsection—
6

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1 ‘‘(A) APPLICATION OF AGGREGATION RULE

2 FOR EMPLOYERS.—Rules similar to the rules

3 under subsections (b), (c), (m), and (o) of sec4 tion 414 of the Internal Revenue Code of 1986

5 shall apply for purposes of treating persons as

6 a single employer.

7 ‘‘(B) EMPLOYERS NOT IN EXISTENCE IN

8 PRECEDING YEAR.—In the case of an employer

9 which was not in existence throughout the pre10 ceding calendar year, the determination of

11 whether such employer is a small employer shall

12 be based on the number of employees that it is

13 reasonably expected such employer will normally

14 employ on a typical business day in the current

15 calendar year.

16 ‘‘(C) PREDECESSORS.—Any reference in

17 this subsection to an employer shall include a

18 reference to any predecessor of such employer.

19 ‘‘(c) DEFINITION.—In this section, the term ‘aggre20 gate dollar lifetime limit’ means, with respect to benefits

21 under a group health plan or health insurance coverage,

22 a dollar limitation on the total amount that may be paid

23 with respect to such benefits under the plan or health in24 surance coverage with respect to an individual or other

25 coverage unit.’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 this section shall apply with respect to plan years begin3 ning on or after the date that is 2 years after the date

4 of enactment of this Act.

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