I

104TH CONGRESS

2D SESSION H. R. 3699

To establish a demonstration project to authorize certain covered beneficiaries

under the military health care system (including the dependents of active

duty military personnel and retired members and their dependents) to

enroll in the Federal Employees Health Benefits program and to ensure

their future health security through the use of medical savings accounts.

IN THE HOUSE OF REPRESENTATIVES

JUNE 20, 1996

Mr. STEARNS (for himself, Mr. MICA, and Mr. CANADY of Florida) introduced

the following bill; which was referred to the Committee on National Security, and in addition to the Committees on Government Reform and Oversight, and Ways and Means, for a period to be subsequently determined

by the Speaker, in each case for consideration of such provisions as fall

within the jurisdiction of the committee concerned

A BILL

To establish a demonstration project to authorize certain

covered beneficiaries under the military health care system (including the dependents of active duty military

personnel and retired members and their dependents)

to enroll in the Federal Employees Health Benefits program and to ensure their future health security through

the use of medical savings accounts.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. DEMONSTRATION PROJECT FOR IMPROVED

2 HEALTH CARE ACCESS FOR MILITARY COV3 ERED BENEFICIARIES THROUGH THE FED4 ERAL EMPLOYEES HEALTH BENEFITS PRO5 GRAM AND MEDICAL SAVINGS ACCOUNTS.

6 (a) PARTICIPATION IN FEDERAL EMPLOYEES

7 HEALTH BENEFITS PROGRAM.—The Secretary of De8 fense shall conduct a demonstration project in at least one

9 region of the TRICARE program to provide covered bene10 ficiaries described in subsection (b) with the option to re11 ceive health care prescribed by section 1077 of title 10,

12 United States Code, through the Federal Employees

13 Health Benefits program under chapter 89 of title 5, Unit14 ed States Code, in addition to the other health care op15 tions available to the covered beneficiaries. The Secretary

16 shall carry out the demonstration project during the two17 year period beginning on the date covered beneficiaries

18 first enroll under the project.

19 (b) PERSONS ELIGIBLE FOR PARTICIPATION.—Eligi20 bility to participate in the demonstration project is limited

21 to covered beneficiaries under chapter 55 of title 10, Unit22 ed States Code, who—

23 (1) reside in the TRICARE region in which the

24 demonstration project is conducted, but outside of

25 the enrollment catchment area used for TRICARE

26 Prime; or
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1 (2) reside in the TRICARE region in which the

2 demonstration project is conducted and are entitled

3 to hospital insurance benefits under part A of title

4 XVIII of the Social Security Act (42 U.S.C. 1395c

5 et seq.).

6 (c) SPECIAL RULE FOR MEDICARE PARTICIPANTS.—

7 The payment limitations contained in section 1086(d)(3)

8 of title 10, United States Code, shall apply in the case

9 of covered beneficiaries described in subsection (b)(2) who

10 are not eligible to participate in the TRICARE or

11 CHAMPUS programs, by reason of section 1086(d)(1) of

12 title 10, United States Code, but who are eligible to par13 ticipate in the demonstration project.

14 (d) USE OF MEDICAL SAVINGS ACCOUNTS.—In the

15 case of participants in the demonstration project, the Sec16 retary of the Treasury shall permit a participant during

17 the demonstration project to take as a credit against the

18 tax imposed under the Internal Revenue Code of 1986 for

19 a taxable year an amount equal to 25 percent of the

20 amount paid in cash during such year by or on behalf of

21 the participant to a medical savings account, subject to

22 such restrictions on the total amount of the cash contribu23 tion and such other requirements as the Secretary may

24 prescribe.

25 (e) DEFINITIONS.—For purposes of this section:
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1 (1) COVERED BENEFICIARIES.—The term ‘‘cov2 ered beneficiary’’ means a beneficiary under chapter

3 55 of title 10, United States Code, other than a ben4 eficiary under section 1074(a) of such title. Such

5 term includes—

6 (A) the spouse and children of a member

7 of the Armed Forces on active duty; and

8 (B) members and former members of the

9 uniformed services who are entitled to retired or

10 retainer pay, or equivalent pay, and their de11 pendents.

12 (2) TRICARE.—The term ‘‘TRICARE’’ means

13 the managed health care program that is established

14 by the Secretary of Defense under the authority of

15 chapter 55 of title 10, United States Code, prin16 cipally section 1097 of such title, and includes the

17 competitive selection of contractors to financially un18 derwrite the delivery of health care services under

19 the Civilian Health and Medical Program of the

20 Uniformed Services.

21 (3) MEDICAL SAVINGS ACCOUNT.—The term

22 ‘‘medical savings account’’ means a trust created or

23 organized in the United States exclusively for the

24 purpose of paying the qualified medical expenses of
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1 the individual for whose benefit the trust is estab2 lished.

3 (f) REPORT ON IMPLEMENTATION PLAN.—Not later

4 than six months after the date of the enactment of this

5 Act, the Secretary of Defense shall submit a report to

6 Congress containing the plan prepared by the Secretary

7 of Defense and the Secretary of the Treasury to imple8 ment the demonstration project and to permit participants

9 to maintain and use medical savings accounts.

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