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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1858 Introduced in Senate (IS)]

105th CONGRESS
  2d Session
                                S. 1858

     To amend the Social Security Act to provide individuals with 
  disabilities with incentives to become economically self-sufficient.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 25, 1998

Mr. Jeffords (for himself, Mr. Kennedy, and Mr. Harkin) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL

 
     To amend the Social Security Act to provide individuals with 
  disabilities with incentives to become economically self-sufficient.

    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 ``Work Incentives 
Improvement Act of 1998''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
               TITLE I--ESTABLISHMENT OF OPTIONS PROGRAM

Sec. 101. OPTIONS program for working individuals with disabilities.
Sec. 102. Work incentive counseling and assistance program.
        TITLE II--EXPANDED AVAILABILITY OF HEALTH CARE SERVICES

Sec. 201. State work options program under medicaid.
Sec. 202. Extension of medicare benefits for SSDI OPTIONS program 
                            participants.
             TITLE III--DEMONSTRATION PROJECTS AND OUTREACH

Sec. 301. Demonstration projects.
Sec. 302. Information and outreach regarding work opportunities for 
                            individuals with a disability.
                        TITLE IV--MISCELLANEOUS

Sec. 401. Report and recommendations to Congress.
Sec. 402. Effective dates.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress makes the following findings:
            (1) Health care is important to all Americans.
            (2) Health care is particularly important to individuals 
        with disabilities and special health care needs who often 
        cannot afford the insurance available to them through the 
        private market, are uninsurable by the plans available in the 
        private sector, and are at great risk of incurring very high 
        and devastating health care costs.
            (3) Americans with severe disabilities and special health 
        care needs often are unable to obtain insurance that provides 
        them with the necessary services, such as personal assistance 
        services, prescription drugs, and durable medical equipment, 
        that they need to maintain their employment and independence.
            (4) For individuals with disabilities, the fear of losing 
        health care and related services is one of the greatest 
        barriers keeping the individuals from maximizing their 
        employment and earning potential.
            (5) Social security disability insurance (DI) beneficiaries 
        and supplemental security income (SSI) disability recipients 
        risk losing medicare or medicaid coverage that is linked to 
        their cash benefits, a risk that is an equal, or greater, work 
        disincentive than the loss of cash benefits associated with 
        working.
            (6) Currently, less than \1/2\ of 1 percent of social 
        security disability insurance and supplemental security income 
        beneficiaries cease to receive benefits as a result of 
        employment.
            (7) If an additional \1/2\ of 1 percent of the current 
        social security disability insurance (DI) and supplemental 
        security income (SSI) recipients were to cease receiving 
        benefits as a result of employment, the savings in cash 
        assistance would total $3,500,000,000 over the work life of the 
        individuals.
    (b) Purposes.--The purposes of this Act are as follows:
            (1) To provide health care services to individuals with 
        disabilities that will enable those individuals to cease to 
        receive social security disability insurance benefits and 
        become employed and independent.
            (2) To provide States with the option of allowing 
        individuals with disabilities to purchase, through medicaid and 
        subject to a copayment requirement, the personal assistance 
        services and prescription drugs that the private insurance 
        available to such individuals does not provide.
            (3) To provide individuals with disabilities with the 
        option of purchasing and maintaining medicare coverage after 
        returning to work.

               TITLE I--ESTABLISHMENT OF OPTIONS PROGRAM

SEC. 101. OPTIONS PROGRAM FOR WORKING INDIVIDUALS WITH DISABILITIES.

    (a) Establishment.--Title XI of the Social Security Act (42 U.S.C. 
1301 et seq.) is amended by adding at the end the following:

  ``Part D--OPTIONS Program for Working Individuals With Disabilities

                             ``definitions

    ``Sec. 1181. In this part:
            ``(1) Commissioner.--The term `Commissioner' means the 
        Commissioner of Social Security.
            ``(2) Eligible working individual with a disability.--The 
        term `eligible working individual with a disability' means an 
        individual who, based on a determination by the State, is found 
        eligible for personal assistance services or prescribed drugs 
        under section 1929A because without such services or drugs the 
        individual would be unable to perform essential functions of 
        the employment position that the individual holds or desires, 
        but does not include any individual who is receiving--
                    ``(A) disability benefits under title II; or
                    ``(B) supplemental security income benefits under 
                title XVI.
            ``(3) SSDI OPTIONS program participant.--The term `SSDI 
        OPTIONS program participant' means an individual eligible for 
        cash benefits under title 223 on the basis of being disabled 
        who has elected to participate in the OPTIONS program 
        established under this part.
            ``(4) Substantial gainful activity.--The term `substantial 
        gainful activity' has the meaning given that term under section 
        223 with respect to an individual who has been determined to be 
        eligible for cash benefits under such section on the basis of 
being disabled.

          ``opportunity to fully integrate through occupations

    ``Sec. 1182. (a) Establishment of OPTIONS Program.--
            ``(1) In general.--The Commissioner, in consultation with 
        the Secretary, shall establish a program, to be known as the 
        OPTIONS program, under which--
                    ``(A) an eligible working individual with a 
                disability and a SSDI OPTIONS program participant--
                            ``(i) shall receive, without being 
                        subjected to a waiting period, work incentive 
                        services under title XIX to the extent the 
                        State in which the individual or participant 
                        resides makes such services available in 
                        accordance with section 1929A; and
                            ``(ii) shall receive work counseling and 
                        assistance, as provided under section 1183; and
                    ``(B) a SSDI OPTIONS program participant--
                            ``(i) shall be provided, after having been 
                        entitled to receive cash benefits under section 
                        223 for at least 24 months (or having 
                        participated in the OPTIONS program for at 
                        least such period), with the opportunity to 
                        purchase hospital insurance benefits under part 
                        A of title XVIII and supplementary medical 
                        insurance benefits under part B of such title, 
                        in accordance with section 1818B, for as long 
                        as the individual participates in the OPTIONS 
                        program; and
                            ``(ii) shall choose--
                                    ``(I) to waive cash benefits under 
                                section 223 and acquire average monthly 
                                earnings from substantial gainful 
                                activity in excess of the amount 
                                designated to represent such activity 
                                by the Commissioner; or
                                    ``(II) if at the time the 
                                individual first elects to participate 
                                in the OPTIONS program, the individual 
                                has received cash benefits under 
                                section 223 for at least 24 months, to 
                                not waive cash benefits under section 
                                223, and to continue to be subject to 
                                the limitation imposed by the 
                                Commissioner for other disability 
                                beneficiaries under section 223 with 
                                respect to average monthly earnings 
                                from substantial gainful activity.
            ``(2) Waiver of cash benefits has no effect on benefits for 
        dependents and survivors.--A waiver of cash benefits under 
        paragraph (1)(B)(ii)(I) by an individual shall have no effect 
        on the eligibility for, or entitlement to, benefits of a 
        dependent or survivor of such individual under section 202.
    ``(b) OPTIONS Form.--The Commissioner shall prepare and disseminate 
a form that shall be entitled `Opportunity to Fully Integrate Through 
Occupations Program'. The form shall be used by an individual to elect 
to participate in the OPTIONS program.
    ``(c) Timing.--An individual may elect to participate in the 
OPTIONS program at any time.
    ``(d) Continuing Disability and Other Work-Related Reviews.--
            ``(1) Regular reviews.--A SSDI OPTIONS program participant 
        shall continue to be subject to continuing disability reviews 
        on the same regularly scheduled basis that would occur if the 
        individual had not chosen to participate in the OPTIONS 
        program.
            ``(2) Work activity, or the cessation of work activity, may 
        not be the basis for a review, a finding of no disability, or a 
        presumption of an inability to work.--No continuing disability 
        review or any other work-related review may be scheduled for a 
        SSDI OPTIONS program participant solely as a result of work 
        activity engaged in by the individual while participating in 
        the OPTIONS program, no work activity engaged in by the 
        individual while participating in the program may be used as 
        evidence that the individual is no longer disabled, and no 
        cessation of work activity by the individual while 
        participating in the program may give rise to a presumption 
        that the individual is unable to engage in work.
    ``(e) Rules Applicable to SSDI OPTIONS Program Participants Who 
Choose To Retain Cash Disability Benefits.--
            ``(1) Determination of impairment-related work expenses.--
        In the case of a SSDI OPTIONS program participant who chooses 
        to continue to receive cash benefits under section 223, the 
        determination of the participant's impairment-related work 
        expenses for purposes of determining the extent to which the 
        participant has engaged in substantial gainful activity shall 
        include expenditures incurred by the participant for items and 
        services related to the preparation for, and traveling to and 
        from, employment, including expenditures for durable medical 
        equipment, as defined in section 1861(n), adapting a vehicle 
        for the participant, and orientation mobility services.
            ``(2) Exclusion of cost of a vehicle from income of rural 
        residents.--
                    ``(A) In general.--In the case of a SSDI OPTIONS 
                program participant who chooses to continue to receive 
                cash benefits under section 223 and who resides in a 
                rural area, the Commissioner shall exclude from the 
                monthly determination of the participant's income the 
                cost of obtaining a vehicle for the participant, 
                subject to such reasonable limits as the Commissioner 
                may prescribe.
                    ``(B) One-time exclusion.--The exclusion authorized 
                under subparagraph (A) may only be made with respect to 
                1 vehicle per participant.
                    ``(C) Definition of rural area.--For purposes of 
                subparagraph (A), the term `rural area' means any area 
                that does not have reasonably available and accessible 
                public transportation, as determined by the 
                Commissioner.
            ``(3) Overpayment of benefits.--Any erroneous overpayments 
        of cash benefits to a SSDI OPTIONS program participant who 
        chooses to continue to receive cash benefits under section 223 
        that are not the result of fraudulent or deceptive activity by, 
        or information from, the individual shall be retained by the 
        participant.
    ``(f) Termination of Employment.--If a SSDI OPTIONS program 
participant terminates his or her employment, the participant--
            ``(1) shall no longer be considered a SSDI OPTIONS program 
        participant for purposes of this part, section 226(j), or 
        section 1929A;
            ``(2) shall be presumed automatically eligible for cash 
        benefits under section 223 and hospital insurance benefits 
        under section 226, and for supplemental security income 
        benefits under title XVI and medical assistance under title XIX 
        (if applicable), and any month in which the participant 
        participated in the OPTIONS program shall be included in the 
        determination of the 24-month period required for hospital 
        insurance benefits under section 226(b)(2)(A); and
            ``(3) shall continue to be eligible for work incentive 
        services offered in accordance with section 1929A, only to the 
        extent that the State where the participant resides offers such 
        services and the participant otherwise qualifies for such 
        services.
    ``(g) No Effect On Eligibility for Title XX and Other Programs.--
Participation in the OPTIONS program by an eligible working individual 
with a disability or a SSDI OPTIONS program participant shall have no 
effect (except to the extent that such participation is a condition for 
eligibility for work incentive services under section 1929A) on any 
benefits that the individual or participant is eligible for, or 
provided under, title XX or any other Federal or State program (other 
than the programs under titles II and XVIII).

                               ``reserved

    ``Sec. 1183. [Reserved].

                             ``regulations

    ``Sec. 1184. Not later than 1 year after the date of enactment of 
this part, the Commissioner, in consultation with the Secretary, shall 
promulgate such final regulations, including regulations related to 
ensuring program integrity, as are necessary to implement the OPTIONS 
program established under this part.

                               ``reports

    ``Sec. 1185. The Commissioner, in consultation with the Secretary, 
shall submit the following reports to the appropriate committees of 
Congress:
            ``(1) Not later than 3 years after the date of enactment of 
        the OPTIONS program, a report on the establishment of the 
        program.
            ``(2) Not later than 5 years after such date, a report on 
        the progress of the OPTIONS program.
            ``(3) Not later than 7 years after such date, a final 
        report recommending whether the OPTIONS program should be 
        permanently authorized.

                            ``appropriations

    ``Sec. 1186. (a) In General.--Out of any funds in the Treasury not 
otherwise appropriated, there are appropriated such sums as may be 
necessary to carry out the OPTIONS program established under this part, 
other than the work incentive counseling and assistance program 
established under section 1183.
    ``(b) Work Incentive Counseling and Assistance Program.--The 
Commissioner shall use funds appropriated and otherwise made available 
for programs under titles II and XVI of this Act to carry out the work 
incentive counseling and assistance program established under section 
1183.

                                ``sunset

    ``Sec. 1187. The OPTIONS program established under this part shall 
terminate on the date that is 10 years after the date of enactment of 
this part.''.
    (b) Conforming Amendments.--
            (1) Extended period of eligibility.--Section 223(a)(1) of 
        the Social Security Act (42 U.S.C. 423(a)(1)) is amended by 
        inserting after the second sentence the following: ``For 
        purposes of subclause (II) of the preceding sentence, the 
        determination of the 36-month period shall not include a month 
        in which the individual was a SSDI OPTIONS program 
        participant.''.
            (2) Period of trial work.--The last sentence of section 
        222(c)(3) of the Social Security Act (42 U.S.C. 422(c)(3)) is 
        amended by inserting before the period the following: ``; and 
        no such period may begin in or include a month in which the 
        individual was a SSDI OPTIONS program participant''.
            (3) Nonapplication of entitlement to hospital insurance 
        benefits; cross-reference.--Section 226 of the Social Security 
        Act (42 U.S.C. 426) is amended by adding at the end the 
        following:

       ``nonapplication to options participants; cross-reference

    ``(j) Subsection (b) shall not apply to any individual that would 
otherwise be entitled to hospital insurance benefits under such 
subsection who is a SSDI OPTIONS program participant, as defined in 
section 1181(3). For provisions relating to the availability of health 
care benefits under sections 1818B and 1929A for such individuals, and 
to eligibility for work counseling and assistance, as provided in 
section 1183, see part D of title XI.''.
            (4) Additional cross-reference.--Section 223 of the Social 
        Security Act (42 U.S.C. 423 is amended by adding at the end the 
        following:

                     ``optional waiver of benefits

    ``(j) For provisions relating to the availability of health care 
benefits under sections 1818B and 1929A for individuals who participate 
in the OPTIONS program established under part D of title XI, and to 
eligibility for work counseling and assistance, as provided in section 
1183, see part D of title XI.''.
            (5) Heading of title xi.--Title XI of the Social Security 
        Act (42 U.S.C. 1301 et seq.) is amended in the title by 
        striking ``AND ADMINISTRATIVE SIMPLIFICATION'' and inserting 
        ``ADMINISTRATIVE SIMPLIFICATION, AND OPTIONS PROGRAM FOR 
        WORKING INDIVIDUALS WITH DISABILITIES''.

SEC. 102. WORK INCENTIVE COUNSELING AND ASSISTANCE PROGRAM.

    Section 1183 of the Social Security Act (as added by section 
101(a)) is amended to read as follows:

           ``work incentive counseling and assistance program

    ``Sec. 1183. (a) Establishment.--The Commissioner shall establish a 
community-based work incentive counseling and assistance program under 
which the Commissioner shall enter into agreements to provide 
counseling and assistance to eligible working individuals with a 
disability and SSDI OPTIONS program participants. The agreements 
authorized under the preceding sentence shall be made with States and 
public and private agencies and organizations (other than Social 
Security Administration Field Offices) that the Commissioner determines 
have experience in providing rehabilitation services or independent 
living and social services to working individuals with disabilities, 
and are qualified to provide counseling and assistance in accordance 
with the requirements described in subsection (b). The agreements may 
be made with any of the following:
            ``(1) Vocational rehabilitation agencies.
            ``(2) The State agency administering the State program 
        funded under part A of title IV.
            ``(3) The State agency administering the State medicaid 
        program under title XIX.
            ``(4) State employment training and placement agencies.
            ``(5) Any other public or private agency or organization 
        that the Commissioner determines satisfies the requirements of 
        this section.
    ``(b) Requirements.--
            ``(1) In general.--Counselors for the program established 
        under this section shall--
                    ``(A) assess the education and skills of an 
                eligible working individual with a disability or a SSDI 
                OPTIONS program participant, in coordination and 
                communication with the local Social Security 
                Administration Field Office for the area in which such 
                individual or participant resides;
                    ``(B) on the basis of the assessment conducted 
                under subparagraph (A), assist in the identification of 
                employment or vocational rehabilitation opportunities 
                that may be available to the individual or participant; 
                and
                    ``(C) advise the individual or participant on the 
                adequacy of any health benefits coverage that may be 
                offered by an employer of the individual or participant 
                and the extent to which other health benefits coverage 
                may be available to the individual or participant, 
                including personal assistance services and prescription 
                drugs provided under section 1929A, if the State in 
                which the individual or participant resides opts to 
                provide such services.
            ``(2) Coordination with other programs.--The program 
        established under this section shall be conducted in 
        coordination with other public and private programs that 
        provide information and assistance regarding rehabilitation 
        services and independent living supports and benefits 
        counseling for working individuals with disabilities.
            ``(3) Options training for social security administration 
        field office work incentive designees.--The Commissioner shall 
        provide training regarding the OPTIONS program for the employee 
        in each Social Security Administration Field Office that is 
        designated to act as the work incentive coordinator for that 
        office.''.

        TITLE II--EXPANDED AVAILABILITY OF HEALTH CARE SERVICES

SEC. 201. STATE WORK OPTIONS PROGRAM UNDER MEDICAID.

    (a) State Option To Provide Work Incentive Services.--Title XIX of 
the Social Security Act (42 U.S.C. 1396 et seq.) is amended by 
inserting after section 1929 the following:

                      ``state work options program

    ``Sec. 1929A. (a) Definitions.--In this section:
            ``(1) Personal assistance services.--The term `personal 
        assistance services' means a range of services, provided by 1 
        or more persons, designed to assist an individual with a 
        disability to perform daily living activities on or off the job 
        that the individual would typically perform if the individual 
        did not have a disability. Such services shall be designed to 
        increase the individual's control in life and ability to 
        perform everyday activities on or off the job.
            ``(2) Eligible working individual with a disability.--The 
        term `eligible working individual with a disability' means an 
        individual who, based on a determination by the State, is found 
        eligible for personal assistance services or prescribed drugs 
        under this section because without such services or drugs the 
        individual would be unable to perform essential functions of 
        the employment position that the individual holds or desires, 
        but does not include any individual who is receiving--
                    ``(A) disability benefits under title II; or
                    ``(B) supplemental security income benefits under 
                title XVI.
            ``(3) Qualified eligible working individual with a 
        disability.--The term `qualified eligible working individual 
        with a disability' means an individual who has attained age 18 
        but has not attained age 65, and who--
                    ``(A) is an eligible working individual with a 
                disability;
                    ``(B) is a SSDI OPTIONS program participant; or
                    ``(C) engages in substantial gainful activity in 
                accordance with subsection (a) or (b) of section 1619.
            ``(4) SSDI OPTIONS program participant.--The term `SSDI 
        OPTIONS program participant' has the meaning given that term in 
        section 1181(3).
            ``(5) Work eligible individual.--The term `work eligible 
        individual' means an individual who--
                    ``(A) has attained age 16 but has not attained age 
                65;
                    ``(B) is entitled to cash benefits under section 
                223 or eligible for supplemental security income 
                benefits under title XVI;
                    ``(C) is not engaged in work, as determined under 
                the State plan; and
                    ``(D) the State, in accordance with regulations 
                issued by the Secretary, determines is in a transition 
                to work readiness or is otherwise work eligible.
            ``(6) Work incentive services.--The term `work incentive 
        services' means personal assistance services and prescribed 
        drugs.
    ``(b) State Option.--
            ``(1) In general.--A State that elects through a plan 
        amendment to provide work incentive services to qualified 
        eligible working individuals with a disability and to work 
        eligible individuals shall offer such services in accordance 
        with the provisions of this section.
            ``(2) Eligibility.--Only a State that, as of the date of 
        enactment of this section, does not offer under the State plan 
        or a waiver of such plan, services that would otherwise be 
        considered work incentive services under this section to 
        individuals who would otherwise qualify for work incentive 
        services under this section, may elect to offer work incentive 
        services under this section.
            ``(3) Maintenance of effort of amounts expended for support 
        of individuals with disabilities.--A State that elects to offer 
        work incentive services in accordance with this section may not 
        reduce the amount of State expenditures for individuals with 
        disabilities below the level of such expenditures in fiscal 
        year 1997. For purposes of this subparagraph, the term `State 
        expenditures' means expenditures by the State from amounts 
        other than amounts made available by the Federal government and 
        for which no Federal match, reimbursement, or payment is made.
            ``(4) Waiver of requirements.--The Secretary may waive such 
        provisions of this title as are necessary to carry out the 
        provisions of this section other than--
                    ``(A) section 1902(a)(1) (relating to 
                statewideness);
                    ``(B) subject to subsection (d), section 
                1902(a)(10)(B) (relating to comparability of amount, 
                duration, and scope of services); and
                    ``(C) the requirements imposed under this title for 
                a State to provide services under the State plan that 
                are reasonable in amount, duration, and scope to 
                achieve the purpose of such services.
    ``(c) Limitations on Premiums and Cost-Sharing.--
            ``(1) Individuals with income below 150 percent of poverty 
        line.--In the case of a qualified eligible working individual 
        with a disability or a work eligible individual whose income is 
        at or below 150 percent of the poverty line (as defined in 
        section 673(2) of the Community Services Block Grant Act (42 
        U.S.C. 9902(2)), including any revision required by such 
        section for a family of the size involved), a State may not 
        impose any enrollment fee, premium, deductible, cost sharing, 
        or similar charge for receipt of work incentive services under 
        this section.
            ``(2) Other individuals.--In the case of a qualified 
        eligible working individual with a disability or a work 
        eligible individual who is not described in paragraph (1), a 
        State may impose an enrollment fee, premium, deductible, cost 
        sharing, or similar charge on a sliding scale basis related to 
        income, consistent with standards and regulations applicable to 
        such charges under section 1916.
    ``(d) Priority for 16- Through 25-Year-Old Work Eligible 
Individuals for Personal Assistance Services.--A State shall give 
priority for receipt of personal assistance services to work eligible 
individuals who have attained age 16 but have not attained age 26.
    ``(e) Enhanced FMAP.--Notwithstanding the first sentence of section 
1905(b), the Federal medical assistance percentage for work incentive 
services provided under this section is equal to the enhanced FMAP 
described in section 2105(b).
    ``(f) Other Requirements.--
            ``(1) Consumer choice in delivery of personal assistance 
        services.--A State shall provide qualified eligible working 
        individuals with a disability and work eligible individuals 
        with a choice of provider models for receiving personal 
        assistance services in accordance with this section and may not 
        require that such services be ordered by a physician in order 
        to be available to such individuals.
            ``(2) Medicaid coverage of last resort.--No payment may be 
        made under this section for any work incentive services 
        provided under this section to a qualified eligible working 
        individual with a disability or a work eligible individual who 
        is eligible for coverage of such services under--
                    ``(A) health benefits coverage offered by the 
                individual's employer; or
                    ``(B) any other coverage or payment available for 
                such services, including a vocational rehabilitation 
                program.
            ``(3) Appeals process.--Each State that elects to provide 
        work incentive services under this section shall provide an 
        appeals process for challenging the manner in which such 
        services are provided and the denial of such services, 
        consistent with the process for appealing other challenges to 
        eligibility for, or the extent of, coverage of items and 
        services under this title.
    ``(g) Rules of Construction.--
            ``(1) Limitation on entitlement.--Except as specifically 
        provided under this section, nothing in this title shall be 
        construed as establishing any entitlement of individuals 
        described in subsection (a) to any medical assistance provided 
        under this title other than work incentive services provided in 
        accordance with this section.
            ``(2) No affect on other basis for eligibility.--Nothing in 
        paragraph (1) shall be construed as affecting the eligibility 
        of an individual described in subsection (a) for medical 
        assistance under this title on a basis that is unrelated to the 
        individual's eligibility for work incentive services under this 
        section.
    ``(h) Regulations.--Not later than 1 year after the date of 
enactment of this section, the Secretary shall publish final 
regulations that set forth the requirements for offering work incentive 
services in accordance with this section.''.
    (b) Conforming Amendments.--
            (1) Section 1902(a)(10) of the Social Security Act (42 
        U.S.C. 1396a(a)(10)) is amended--
                    (A) in subparagraph (E), by striking ``and'' at the 
                end;
                    (B) in subparagraph (F), by adding ``and'' at the 
                end; and
                    (C) by adding at the end the following:
                    ``(G) at the option of a State, for making work 
                incentive services available to qualified eligible 
                working individuals with a disability and work eligible 
                individuals in accordance with section 1929A;''.
            (2) Section 1902(a)(10)(C)(iv) of such Act (42 U.S.C. 
        1396a(a)(10)(C)(iv)) is amended by inserting ``and (27)'' after 
        ``(24)''.
            (3) Section 1903(f)(4) of the Social Security Act (42 
        U.S.C. 1396b(f)(4)), as amended by section 162(4) of Public Law 
        105-100 (111 Stat. 2189), is amended by striking ``or 1905(u)'' 
        and inserting ``, 1905(u), 1929A(a)''.
            (4) Section 1905(a) of the Social Security Act (42 U.S.C. 
        1396d(a)), as amended by section 4802 of the Balanced Budget 
        Act of 1997 (Public Law 105-33; 111 Stat. 538), is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (26);
                    (B) by redesignating paragraph (27) as paragraph 
                (28); and
                    (C) by inserting after paragraph (26) the 
                following:
            ``(27) work incentive services (to the extent allowed and 
        as defined in section 1929A; and''.
            (5) Section 1905(b) is amended in the first sentence by 
        striking ``section 1933(d)'' and inserting ``sections 1929A(e) 
        and 1933(d)''.

SEC. 202. EXTENSION OF MEDICARE BENEFITS FOR SSDI OPTIONS PROGRAM 
              PARTICIPANTS.

    (a) In General.--Title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) is amended by inserting after section 1818A the 
following:

 ``hospital insurance and medical supplementary insurance benefits for 
                   ssdi options program participants

    ``Sec. 1818B. (a) Eligibility.--Every individual who--
            ``(1) is a SSDI OPTIONS program participant (as defined in 
        section 1181(3)); and
            ``(2) is not otherwise entitled to benefits under this 
        part;
shall be eligible to enroll in the insurance program established by 
this part and part B.
    ``(b) Enrollment.--The Secretary shall establish procedures for 
enrollment under this section.
    ``(c) Coverage Period.--
            ``(1) In general.--The period during which an individual 
        described in subsection (a) is eligible for benefits under the 
        insurance program under this part and part B (in this 
        subsection referred to as a `coverage period') shall begin on 
        the first day of the month following the month in which the 
        individual has begun participation in the OPTIONS program 
        established under part D of title XI.
            ``(2) Termination.--An individual's coverage period under 
        this section shall continue until the individual's enrollment 
        is terminated as follows:
                    ``(A) As of the month following the month in which 
                the Secretary provides notice to the individual that 
                the individual is no longer a SSDI OPTIONS program 
                participant.
                    ``(B) As of the month following the month in which 
                the individual files notice that the individual no 
                longer wishes to participate in the insurance program 
                established by this part and part B.
                    ``(C) Except as provided in subsection (d)(4), as 
                of the month following the month in which the 
                individual becomes eligible for health benefits 
                coverage offered by the individual's employer.
                    ``(D) As of the month before the first month in 
                which the individual becomes eligible for hospital 
                insurance benefits under section 226(a) or 226A.
                    ``(E) As of a date, determined under regulations of 
                the Secretary, for nonpayment of premiums.
                    ``(F) As of the month following the month in which 
                the date described in section 1187 occurs.
        The regulations under subparagraph (E) may provide a grace 
        period of not longer than 90 days, which may be extended for a 
        period not to exceed 180 days in any case in which the 
        Secretary determines that there was good cause for failure to 
        pay the overdue premiums within such 90-day period. Termination 
        of coverage under this section shall result in simultaneous 
        termination of any other related coverage provided to the 
        individual under any other part of this title.
    ``(d) Premiums.--
            ``(1) In general.--
                    ``(A) Payment to secretary.--Premiums for 
                enrollment under this section shall be paid to the 
                Secretary at such times, and in such manner, as the 
                Secretary shall by regulations prescribe.
                    ``(B) Trust funds.--
                            ``(i) Part a.--Premiums received by the 
                        Secretary pursuant to subparagraph (A) for 
                        coverage under this part shall be deposited in 
                        the Treasury to the credit of the Federal 
                        Hospital Insurance Trust Fund.
                            ``(ii) Part b.--Premiums received by the 
                        Secretary pursuant to subparagraph (A) for 
                        coverage under part B shall be deposited in the 
                        Treasury to the credit of the Federal 
                        Supplementary Medical Insurance Trust Fund.
                    ``(C) Coverage period for payments; no payments 
                when otherwise eligible.--
                            ``(i) Coverage period of payments.--Subject 
                        to clause (ii) and paragraph (2)(A), such 
                        premiums shall be payable for the period 
                        commencing with the first month of an 
                        individual's coverage period and ending with 
                        the month in which the individual dies or, if 
                        earlier, in which the individual's coverage 
                        period terminates.
                            ``(ii) No payments when otherwise 
                        eligible.--Such premiums shall not be payable 
                        for any month in which the individual is 
                        entitled to benefits under this part pursuant 
                        to section 226(b).
            ``(2) Amount.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the amount of an individual's 
                premiums for any month in an individual's coverage 
                period under this section shall be equal to--
                            ``(i) for coverage under this part, zero; 
                        and
                            ``(ii) for coverage under part B, the 
                        amount of the premium determined under section 
                        1839(a)(3).
                    ``(B) Individuals whose income exceeds 250 percent 
                of poverty.--If an individual's earned income for any 
                month in an individual's coverage period during a 
                calendar year under this section (expressed as an 
                annual amount) exceeds the amount equal to 250 percent 
                of the poverty line (as defined in section 673(2) of 
                the Community Services Block Grant Act (42 U.S.C. 
                9902(2), including any revision required by such 
                section)) for a family of the size involved for such 
                calendar year, the amount of an individual's premiums 
for such month shall be equal to--
                            ``(i) for coverage under this part, the 
                        lesser of--
                                    ``(I) \1/12\ of 10 percent of the 
                                amount of such excess income; or
                                    ``(II) the amount of the premium 
                                determined under section 1818(d); and
                            ``(ii) for coverage under part B, the 
                        amount of the premium determined under section 
                        1839(a)(3).
            ``(3) Payment on behalf of individuals enrolled under this 
        section.--The provisions of section 1818(e) (relating to 
        payment of premiums) shall apply to individuals enrolled under 
        this section in the same manner as such provisions apply to 
        individuals enrolled under that section.
            ``(4) Election to continue medicare coverage for 
        individuals participating in an employer health plan.--
                    ``(A) In general.--Subsection (c)(2)(C) shall not 
                apply if an individual participates in a health 
                insurance plan offered by the individual's employer and 
                the individual elects to continue to be enrolled under 
                this section.
                    ``(B) Medicare as secondary payer.--
                            ``(i) In general.--If an individual 
                        enrolled under this section participates in the 
                        health plan offered by the employer and elects 
                        to continue to be enrolled under this section 
                        pursuant to subparagraph (A)--
                                    ``(I) the health insurance offered 
                                by the employer shall be the primary 
                                payer for any health care items and 
                                services provided to such individual 
                                and payment under this title for such 
                                items and services shall be secondary 
                                pursuant to section 1862(b)(2); and
                                    ``(II) the premium for enrollment 
                                under this section shall be the premium 
                                determined under paragraph (2).
                            ``(ii) Rule of construction.--Nothing in 
                        clause (i) shall be construed as affecting the 
                        application of the payment rules described in 
                        section 1862(b)(2).
            ``(5) Verification and adjustments of premiums.--
                    ``(A) Verification.--Each individual to whom this 
                section applies shall, on the basis of information 
                shown on the return of tax imposed by chapter 1 of the 
                Internal Revenue Code of 1986 for any taxable year, 
                determine the difference (if any) between--
                            ``(i) the aggregate premiums imposed by 
                        this section for months during the calendar 
                        year in which the taxable year begins; and
                            ``(ii) the aggregate amount of premiums 
                        paid under this section for such months with 
                        respect to the individual.
                Such determination shall be included on a form 
                prescribed by the Secretary and the form shall be 
                submitted to the Secretary at such time and in such 
                manner as the Secretary shall prescribe.
                    ``(B) Deficiency adjustments.--
                            ``(i) In general.--If the amount under 
                        subparagraph (A)(i) exceeds the amount under 
                        subparagraph (A)(ii), the individual shall 
                        include with the form required to be filed 
                        under subparagraph (A) a separate check made 
                        payable to the Secretary in an amount equal to 
                        such excess plus interest determined under 
                        clause (ii).
                            ``(ii) Interest on underpayments.--For 
                        purposes of clause (i)--
                                    ``(I) In general.--The amount of 
                                interest taken into account shall be 
                                the sum of the amounts determined under 
                                subclause (II) for each of the months 
                                in the taxable year.
                                    ``(II) Monthly interest.--Interest 
                                shall be computed for any month in an 
                                amount determined by applying the 
                                underpayment rate established under 
                                section 6621 of the Internal Revenue 
                                Code of 1986 to any portion of the 
                                underpayment for the period beginning 
                                on the first day of the following month 
                                and ending on the date the portion is 
                                paid. For purposes of this subclause, 
                                payments shall be applied to months in 
                                order, beginning with the earliest.
                                    ``(III) Safe-harbor exception.--No 
                                interest shall be imposed for any month 
                                if the individual's estimate of earned 
                                income under paragraph (2) on which the 
                                premium for the month was based was not 
                                less than the individual's earned 
                                income determined on the basis of 
                                information shown on the return of tax 
                                imposed by chapter 1 of such Code for 
                                the taxable year ending with or within 
                                the calendar year preceding the 
                                calendar year in which the estimate was 
                                made.
                    ``(C) Overpayment adjustments.--If the amount under 
                subparagraph (A)(ii) exceeds the amount under 
                subparagraph (A)(i), the Secretary shall, at the 
                Secretary's discretion--
                            ``(i) credit such excess against any 
                        premium required under this section; or
                            ``(ii) make a payment to the individual in 
                        the amount of such excess.
                    ``(D) Adjustments by secretary.--If the Secretary 
                determines, on the basis of information received from 
                the Secretary of the Treasury under section 6103(l)(17) 
                of the Internal Revenue Code of 1986, that there was an 
                underpayment or overpayment of the aggregate premiums 
                for months during any taxable year (after any other 
                adjustment under this paragraph), the Secretary shall--
                            ``(i) notify the individual of such 
                        underpayment or overpayment,
                            ``(ii) in the case of an underpayment--
                                    ``(I) give such individual an 
                                opportunity for a hearing with respect 
                                to such underpayment and a reasonable 
                                time for payment of such underpayment 
                                and interest determined under 
                                subparagraph (B)(i), and
                                    ``(II) collect the amount of any 
                                underpayment and interest not paid 
                                under subclause (I) in such manner as 
                                the Secretary may prescribe, and
                            ``(iii) in the case of an overpayment, take 
                        the actions described in subparagraph (C).
            ``(6) Earned income.--For purposes of this subsection, the 
        term `earned income' has the meaning given such term by section 
        32(c)(2) of the Internal Revenue Code of 1986.
            ``(7) Agreement with commissioner.--In order to promote the 
        efficient administration of this subsection, the Secretary may 
        enter into an agreement with the Commissioner of Social 
        Security under which the Commissioner performs administrative 
        responsibilities under this subsection.''.
    (b) Disclosure of Information.--Section 6103(l) of the Internal 
Revenue Code of 1986 (relating to disclosure of returns and return 
information for purposes other than tax administration) is amended by 
adding at the end the following:
            ``(17) Disclosure of taxpayer return information to social 
        security administration for purposes of collecting premiums for 
        a ssdi options program participant.--
                    ``(A) In general.--The Secretary shall, upon 
                written request from the Secretary of Health and Human 
                Services, disclose to the Secretary with respect to a 
                SSDI OPTIONS program participant identified in the 
                request whether or not (and the amount by which) the 
                participant's earned income for any taxable year 
                specified in the request exceeded the amount specified 
                in section 1818B(d)(2)(B).
                    ``(B) Restriction on use.--Return information 
                disclosed under subparagraph (A) may be used by 
                officers and employees of the Department of Health and 
                Human Services (or of the Social Security 
                Administration if section 1818B(d)(7) of the Social 
                Security Act applies) only for the purposes of, and to 
                the extent necessary in, establishing a participant's 
                correct premium under section 1818B of the such Act.
                    ``(C) Definitions.--For purposes of this paragraph, 
                any term used that is also used in section 1818B of the 
                Social Security Act shall have the meaning given such 
                term by such section.''.

             TITLE III--DEMONSTRATION PROJECTS AND OUTREACH

SEC. 301. DEMONSTRATION PROJECTS.

    (a) Extension of Disability Insurance Program Demonstration Project 
Authority.--Section 505 of the Social Security Disability Amendments of 
1980 (42 U.S.C. 1310 note) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) by inserting ``(A)'' after ``(1)'';
                            (ii) by striking ``(A) various'' and 
                        inserting ``(i) various'';
                            (iii) by striking ``and (B)'' and inserting 
                        ``, (ii)'';
                            (iv) by striking the period and inserting 
                        ``, and (iii) implementing sliding scale 
                        benefit offsets using variations in the amount 
                        of the offset as a proportion of earned income, 
                        the duration of the offset period, and the 
                        method of determining the amount of income 
                        earned by the beneficiaries, and using state-
                        of-the-art information technology and 
                        electronic funds transfer technology to 
                        streamline the reporting of data and the 
                        implementation of the offsets, and developing 
                        and making available to beneficiaries, their 
                        families, guardians, and advocates, through the 
                        Internet information regarding work incentives 
                        and assistance for beneficiaries to make 
                        informed decisions regarding work.''; and
                            (v) by adding at the end the following:
    ``(B) The Commissioner may expand the scope of any experiment or 
demonstration project described in subparagraph (A) to include any 
group of participants with impairments that reasonably may be presumed 
to be disabled, and may limit any such experiment or demonstration 
project to any such group of individuals, subject to the terms of such 
experiment or demonstration project. The Commissioner shall define the 
extent of any presumption that is the basis for an expansion described 
in the preceding sentence.'';
                    (B) in paragraph (3), by striking ``1996'' and 
                inserting ``1999''; and
                    (C) in paragraph (4), by striking ``of the 
                succeeding years through 1995'' and inserting ``year 
                thereafter''; and
            (2) in subsection (c), by striking ``October 1, 1996'' and 
        inserting ``1 year after the conclusion of each such experiment 
        and demonstration project''.
    (b) Requirements for Consideration of Waivers To Reduce Work 
Disincentives.--Section 1115 of the Social Security Act (42 U.S.C. 
1315) is amended by inserting after subsection (c) the following:
    ``(d)(1) In the case of any request for a waiver under this section 
that is for the purpose of conducting an experimental, pilot, or 
demonstration project that is designed to reduce work disincentives for 
individuals with disabilities, the Secretary shall take into account 
reductions in payments made to such individuals under titles II and 
XVI, and other reductions in Federal expenditures that are related to 
Federally-subsidized assistance for, or support of, such individuals, 
when the reduced expenditures are related to the fact that the 
individuals have earned income.
    ``(2)(A) Not later than 90 days after the date the Secretary 
receives a request to conduct an experimental, pilot, or demonstration 
project that is designed to reduce work disincentives for individuals 
with disabilities and that is limited to not more than 5000 such 
individuals, the Secretary shall approve or disapprove the request, or 
inform the State that specified additional information is needed to 
review the request.
    ``(B) In the case of a request described in subparagraph (A) in 
which the Secretary has specified that additional information is 
needed, the Secretary shall approve or disapprove the request not later 
than 90 days after the date the additional information is submitted.''.
    (c) Sense of Congress Regarding Additional Demonstration 
Projects.--It is the sense of Congress that the Commissioner of Social 
Security and the Secretary of Health and Human Services should 
establish additional demonstration projects to assist individuals with 
disabilities engage in work.

SEC. 302. INFORMATION AND OUTREACH REGARDING WORK OPPORTUNITIES FOR 
              INDIVIDUALS WITH A DISABILITY.

    (a) Establishment.--The Commissioner of Social Security shall 
establish and conduct directly, or through grants, contracts, or 
interagency agreements, an ongoing program of outreach to individuals 
with disabilities who are potentially eligible to participate in the 
OPTIONS program established under part D of title XI of the Social 
Security Act or to engage in substantial gainful activity in accordance 
with subsections (a) and (b) of section 1619 of such Act (42 U.S.C. 
1382h) and to the families of such individuals.
    (b) Requirements.--Under the program established in accordance with 
this section, the Commissioner of Social Security shall--
            (1) prepare and disseminate information explaining the 
        OPTIONS program established under part D of title XI of the 
        Social Security Act and the opportunity to engage in 
        substantial gainful activity in accordance with subsections (a) 
        and (b) of section 1619 of such Act (42 U.S.C. 1382h); and
            (2) work in cooperation with other Federal, State, and 
        private agencies and nonprofit organizations that serve 
        disabled individuals, and with agencies and organizations that 
        focus on vocational rehabilitation and work-related training 
        and counseling.

                        TITLE IV--MISCELLANEOUS

SEC. 401. REPORT AND RECOMMENDATIONS TO CONGRESS.

    Not later than 12 months after the date of enactment of this Act, 
the Commissioner of Social Security and the Secretary of Health and 
Human Services shall jointly submit to Congress a report containing 
recommendations for any administrative or legislative changes, 
including to the OPTIONS program for working individuals with 
disabilities established under part D of title XI of the Social 
Security Act (and the health care benefits provided under sections 
1818B and 1929A of such Act), that the Commissioner and the Secretary 
determine would be appropriate to reduce work disincentives for 
individuals with disabilities.

SEC. 402. EFFECTIVE DATES.

    (a) In General.--Except as provided in subsections (b) and (c), 
this Act takes effect on the date of enactment of this Act.
    (b) Exceptions.--The amendments made by titles I and II shall take 
effect on the date that is 1 year after the date of enactment of this 
Act.
    (c) Extension of Effective Date for State Law Amendment.--In the 
case of a State plan under title XIX of the Social Security Act that 
the Secretary of Health and Human Services determines requires State 
legislation in order for the plan to meet the additional requirements 
imposed by the amendments made in section 201 of this Act, the State 
plan shall not be regarded as failing to comply with the requirements 
of such title solely on the basis of its failure to meet these 
additional requirements before the first day of the first calendar 
quarter beginning after the close of the first regular session of the 
State legislature that begins after the date of enactment of this Act. 
For purposes of the previous sentence, in the case of a State that has 
a 2-year legislative session, each year of the session is considered to 
be a separate regular session of the State legislature.
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