May 11, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 1001

COMMENDING LIEUTENANT COLONEL MOSES WHITEHURST FOR

SERVICES WELL-RENDERED

HON. WES COOLEY OF OREGON

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 10, 1995

Mr. COOLEY. Mr. Speaker, I rise today to

recognize the service and the accomplishments of Lt. Col. Moses Whitehurst, Jr. who

commanded Umatilla Depot Activity [UMDA],

in Hermiston, OR from July 1993 to July 1995.

Although continually challenged with mission

changes, personnel reductions, dwindling resources, and short supplies, Moses Whitehurst

performed his duties with vigor and professionalism while always meeting or exceeding

requirements and expectations.

Lieutenant Colonel Whitehurst performed

mission operations effectively as exhibited by

successful completion of countless reviews

and inspections. While under the command of

Lieutenant Colonel Whitehurst, UMDA exceeded fiscal year 1994 conventional ammunition demilitarization forecasts by accomplishing 100 percent of the workload ahead of

schedule. In addition, UMDA exceeded all expectations for shipment of ammunition stocks

and general commodities by shipping more in

fiscal year 1994 than had been shipped in the

4 previous years combined.

During Lieutenant Colonel Whitehurst’s

service, UMDA met or exceeded all BRAC

time requirements. Through effective use of

the one team approach, he has ensured a

seamless transition for the operational control

of the chemical stockpile mission from the Industrial Operations Command to the Chemical

and Biological Defense Command.

By all accounts, Lt. Col. Moses Whitehurst

has done an outstanding job of fulfilling all

UMDA civic responsibilities and ensuring that

a very positive public perception was maintained by the communities surrounding the installation. Under his command, UMDA was always well-represented at all meetings regarding CSEPP; in addition to hosting many local

professional groups at UMDA, which included

tours of the installation.

During his command tour at Umatilla Depot

Activity, Lieutenant Colonel Moses Whitehurst

set a tone of professionalism and teamwork.

His exceptional leadership performance is a

credit to himself, the Tooele Army Depot Complex, the Industrial Operations Command, and

the U.S. Army. The people of the Second District and I are grateful to have had the benefit

of his service.

TWA—NEW YORK TO LONDON

fHON. WILLIAM (BILL) CLAY OF MISSOURI

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 10, 1995

Mr. CLAY. Mr. Speaker, I would like to

share with this body an issue which is of great

importance to the St. Louis community and

vital to the future of one of our major domestic

airlines, Trans World Airlines. TWA, which

maintains its operating hub at Lambert International Airport in St. Louis, needs to regain

its longstanding New York-London route authority.

I have joined my St. Louis area colleagues

in urging the Department of Transportation to

pursue this issue in behalf of TWA at the ongoing bilateral negotiations with United Kingdom representatives. I would like to take this

opportunity to share the text of a letter which

St. Louis Mayor Freeman Bosley recently sent

to the Transportation Secretary Fredrico Pen ̃a.

This communication clearly articulates the vital

importance of TWA’s request for New York to

London route authority.

DEAR SECRETARY PEN ̃ A: I am submitting

this letter as Mayor of St. Louis in strong

support of Trans World Airlines regaining its

long-standing New York-London route authority in the current bilateral negotiations

with the United Kingdom. It is essential that

TWA—one of the nation’s great pioneers of

international service—not be left out of

these negotiations.

TWA maintains its major hub operation at

St. Louis and employs over 12,000 Missourians. This proposed New York-London

(Gatwick) service would not directly affect

Missouri (TWA already flies between St.

Louis and Long-Gatwick), but it would go far

toward rebuilding an airline attempting to

escape the financial damage and job loss

caused by less than satisfactory management for over six years.

TWA had served London since 1950 from

several large U.S. gateways and all but the

St. Louis authority was sold in 1991 and 1992.

St. Louis opposed such sales and unsuccessfully appealed the Department’s approval.

Under new energetic management. TWA is

now seeking to return to the New York-London market which was wrongfully given up

by prior management and whose transfer was

wrongfully approved by the prior Administration. The present Administration should

be fairness to TWA and its new employee

ownership move to redress that error and

find a means to return to TWA its New YorkLondon authority which was the backbone of

its transatlantic route system. The current

negotiations offer an ideal opportunity to accomplish this objective.

I also want to urge that TWA be granted

St. Louis-Toronto authority as early as possible under the new U.S.-Canada agreement.

St. Louis has been attempting for fifteen

years to obtain nonstop St. Louis-Toronto

service. The St. Louis area and the entire

state of Missouri have an exceptionally

strong community of interest with Toronto

and Canada as a whole. Through all this period Toronto has continued to represent one

of the major deficiencies in St. Louis air

service. St. Louis clearly ranks very high on

the nation’s list of deprived cities as far as

Canada is concerned. It is long past time to

remedy this situation.

TWA’s proposed St. Louis-Toronto service

involves first nonstop operations to one of

the largest U.S. service areas, would offer beyond traffic support unequaled by any other

carrier and would provide the only effective

means through one service proposal of meeting the Canada needs of both the Midwest

and Western parts of the United States. TWA

should definitely be one of the carriers selected for Toronto service in the second year

of interim operation.

Further, St. Louis—in addition to its tremendous beyond area support—has a very

strong traffic base in its own area. St. Louis

is the nation’s fifth ranking Fortune 500

company headquarters city and was ranked

by World Trade magazine as one of the ten

best U.S. cities for international companies.

Substantial numbers of St. Louis area companies have major business ties to Canada.

The Canadian business investment in the St.

Louis area is similarly substantial and long

standing in nature. According to Canadian

data (Canadian Consulate, Chicago) total

Missouri exports to Canada were $1.934 billion in 1993 and Canadian exports to Missouri

were $1.435 billion in that year. Trade between Canada and Missouri is about the

same as that between Canada and Mexico.

In the interest of building a sound airline

industry, it is high time that the Department look away from the mega-carriers such

as American, Delta, Northwest and United in

favor of competition. TWA’s London and Toronto requests are fully in accord with the

Administration’s consistent position that

there should be increase competition—not

less—in the airline industry.

Moreover, there are unique reasons for

finding ways to strengthen TWA. The most

important of these is the fact that TWA is

under new ownership by its own employees.

TWA’s employees now own 45 percent of the

voting stock of the carrier, an equity interest for which the employees are paying substantial amounts in hard earned wages.

These employees have incredible dedication

to the success of the carrier. This development—the employee-ownership reorganization of TWA—represented the first successful

equity reorganization of this nature in the

industry and constitutes a model for subsequent airline restructuring. It should be encouraged by the Department.

Further, TWA has demonstrated great determination to reform itself by completely

overthrowing its old management and by developing new service concepts that truly attempt to met public needs. It was able to effect its major ownership and management

change and come through a painful reorganization under Chapter 11 in an expeditious

and successful fashion. It is now undergoing

a further financial restructuring to strengthen its operation. These efforts by TWA’s employee owners deserve to be recognized by

the Department as a major favorable development in an airline industry that has seen

too few favorable developments in recent

years.

In achieving its turnaround, TWA has been

able to preserve one of the great historic

names in the international aviation arena.

TWA was a true pioneer of international operations and its name continues to command

respect abroad. It is only right that the Department move to strengthen the carrier in

the international arena and grant it strong

London and Toronto routes which will materially aid its operations while at the same

time meeting clear public needs. I appreciate

your consideration of these matters which

are vital to TWA’s future.

Sincerely,

FREEMAN R. BOSLEY, JR.,

f Mayor.

WORKING FAMILIES HEALTH

ACCESS ACT

HON. NANCY L. JOHNSON OF CONNECTICUT

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 10, 1995

Mrs. JOHNSON of Connecticut. Mr. Speaker, as a step toward creating a national health

care policy that assures continuity of coverage

for all working Americans, I am introducing the

Working Families Health Access Act of 1995

and invite your co-sponsorship.

The text of the bill follows:

H.R. —

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

Congress assembled,
E 1002 CONGRESSIONAL RECORD — Extensions of Remarks May 11, 1995

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Working

Families Health Access Act of 1995’’.

SEC. 2. PROMOTING THE CONTINUITY AND PORTABILITY OF HEALTH COVERAGE.

(a) IN GENERAL.—Subtitle D of the Internal

Revenue Code of 1986 is amended by inserting

after chapter 44 the following new chapter:

‘‘CHAPTER 45—CONTINUITY AND

PORTABILITY OF HEALTH COVERAGE

‘‘Sec. 4986. Imposition of tax.

‘‘Sec. 4987. Nondiscrimination based on

health status.

‘‘Sec. 4988. Limited use of preexisting condition exclusions.

‘‘Sec. 4989. Guaranteed renewability of

health insurance coverage.

‘‘Sec. 4990. Relation to State standards.

‘‘Sec. 4991. Definitions.

‘‘SEC. 4986. IMPOSITION OF TAX FOR FAILURE TO

MEET CONTINUITY AND PORTABILITY STANDARDS.

‘‘(a) INSURED HEALTH PLANS.—

‘‘(1) IN GENERAL.—In the case of any health

insurance policy which fails to meet the applicable standards specified in this chapter

at any time during a calendar year, there is

hereby imposed a tax equal to 25 percent of

the premiums received under such policy

during the calendar year.

‘‘(2) LIABILITY FOR TAX.—The tax imposed

by paragraph (1) shall be paid by the issuer

of the policy.

‘‘(3) TREATMENT OF PREPAID HEALTH COVERAGE.—For purposes of this subsection:

‘‘(A) IN GENERAL.—In the case of any prepaid health arrangement—

‘‘(i) such arrangement shall be treated as a

health insurance policy,

‘‘(ii) the payments or premiums referred to

in subparagraph (B)(i) shall be treated as

premiums received for a health insurance

policy, and

‘‘(iii) the person referred to in subparagraph (B)(i) shall be treated as the issuer.

‘‘(B) PREPAID HEALTH ARRANGEMENT.—For

purposes of subparagraph (A), the term ‘prepaid health arrangement’ means an arrangement under which—

‘‘(i) fixed payments or premiums are received as consideration for any person’s

agreement to provide or arrange for the provision of accident or health coverage regardless of how such coverage is provided or arranged to be provided, and

‘‘(ii) substantially all the risks of the rates

of utilization of services is assumed by such

person or the provider of such services.

‘‘(4) INSURANCE POLICY.—For purposes of

this subsection, the term ‘insurance policy’

means any policy or other instrument whereby a contract of insurance is issued, renewed,

or extended.

‘‘(5) PREMIUM.—For purposes of this subsection, the term ‘premium’ means the gross

amount of premiums and other consideration

(including advance premiums, deposits, fees,

and assessments) arising from policies issued

by a person acting as the primary insurer,

adjusted for any return or additional premiums paid as a result of endorsements, cancellations, audits, or retrospective rating.

‘‘(b) SELF-INSURED HEALTH PLANS.—

‘‘(1) IN GENERAL.—In the case of a self-insured health plan which fails to meet the applicable standards specified in this chapter

at any time during a calendar year, there is

hereby imposed a tax equal to 25 percent of

the health coverage expenditures for such

calendar year under such plan.

‘‘(2) LIABILITY FOR TAX.—The tax imposed

by paragraph (1) shall be paid by the plan

sponsor.

‘‘(3) SELF-INSURED HEALTH PLAN.—For purposes of this subsection, the term ‘self-insured health plan’ means any plan for providing accident or health coverage if any

portion of such coverage is provided other

than through an insurance policy.

‘‘(4) HEALTH COVERAGE EXPENDITURES.—For

purposes of this subsection, the health coverage expenditures of any self-insured health

plan for any calendar year are the aggregate

expenditures for such year for health coverage provided under such plan.

‘‘(c) LIMITATIONS ON IMPOSITION.—

‘‘(1) TAX NOT TO APPLY WHERE FAILURE NOT

DISCOVERED EXERCISING REASONABLE DILIGENCE.—No tax shall be imposed under this

section on any failure for which it is established to the satisfaction of the Secretary

that none of the persons liable for the tax

knew, or exercising reasonable diligence

would have known, that such failure existed.

‘‘(2) TAX NOT TO APPLY TO CERTAIN FAILURES

CORRECTED WITHIN 30 DAYS.—No tax shall be

imposed by subsection (a) or (b) on any failure if—

‘‘(A) such failure was due to reasonable

cause and not to willful neglect, and

‘‘(B) such failure is corrected during the 30-

day period beginning on the 1st date any person liable for the tax knew, or exercising

reasonable diligence would have known, that

such failure existed.

‘‘(3) WAIVER BY SECRETARY.—In the case of

a failure which is due to reasonable cause

and not to willful neglect, the Secretary may

waive part or all of the tax imposed by this

section to the extent that the payment of

such tax would be excessive relative to the

failure involved.

‘‘SEC. 4987. NONDISCRIMINATION BASED ON

HEALTH STATUS.

‘‘(a) COVERAGE UNDER GROUP HEALTH

PLANS.—A group health plan and a carrier

offering health insurance coverage in connection with such a plan may not establish

or impose eligibility, continuation, enrollment, or contribution requirements for an

individual based on factors directly related

to the health status, medical condition,

claims experience, receipt of health care,

medical history, disability, or evidence of insurability of the individual.

‘‘(b) INDIVIDUAL COVERAGE.—

‘‘(1) IN GENERAL.—A carrier offering health

insurance coverage (other than in connection

with a group health plan) may not establish

or impose eligibility, continuation, or enrollment requirements for a qualifying individual (as defined in paragraph (2)) based on factors directly related to the health status,

medical condition, claims experience, receipt

of health care, medical history, disability, or

evidence of insurability of the individual.

‘‘(2) QUALIFYING INDIVIDUAL DEFINED.—For

purposes of paragraphs (1), the term ‘qualifying individual’ means an individual who

meets all of the following requirements:

‘‘(A) The individual is in a period of qualifying previous coverage (as defined in paragraph (3)) which is at least 6 months long.

‘‘(B) The individual is not eligible for coverage under any group health plan (including

continuation coverage under section 4980B)

and has not lost such coverage but for a failure to make required premium payments or

contributions or due to fraud or misrepresentation of material fact.

‘‘(C) If the individual’s most recent coverage during the period of qualifying previous coverage under subparagraph (A) was

health insurance coverage not in connection

with a group health plan, such coverage was

discontinued or terminated by the carrier

only on the basis of—

‘‘(i) a change in residence of the individual

so that the individual no longer resided within a service area of a carrier with respect to

such coverage, or

‘‘(ii) a change in the individual’s status so

that the individual was no longer eligible for

dependent coverage, if the individual previously was only eligible for such coverage

as a dependent.

Nothing in subparagraph (C) shall be construed as preventing a carrier from waiving

the application of such subparagraph during

an annual open enrollment period or otherwise.

‘‘(3) PERIOD OF QUALIFYING PREVIOUS COVERAGE DEFINED.—For purposes of this chapter, the term ‘period of qualifying previous

coverage’ means the period—

‘‘(A) beginning on the date an individual is

enrolled under a group health plan or is provided health insurance coverage, and

‘‘(B) ending on the date the individual is

neither covered under a group health plan or

covered under health insurance coverage (including coverage described in section

4991(2)(D)) for a continuous period of more

than 2 months.

SEC. 4988. LIMITED USE OF PREEXISTING CONDITION EXCLUSIONS.

‘‘(a) IN GENERAL.—A carrier offering health

insurance coverage and a group health plan

may impose a limitation or exclusion of benefits relating to treatment of a condition

based on the fact that the condition is a preexisting condition (as defined in subsection

(c)) only if the following requirements are

met:

‘‘(1) LIMITATIONS TO 3-MONTH LOCK-BACK.—

The condition was diagnosed or treated during the period not more than 3 months before

the date of enrollment for such coverage or

under such plan.

‘‘(2) LIMITATION ON EXCLUSION PERIOD.—

‘‘(A) GENERAL RULE OF MAXIMUM OF 6-

MONTH EXCLUSION.—Subject to paragraph (3),

the limitation or exclusion extends for a period not more than 6 months (or 12 months in

the case of a late enrollee described in subparagraph (B)) after such date of enrollment.

‘‘(B) LATE ENROLLEE DESCRIBED.—

‘‘(i) IN GENERAL.—Except as provided in

clause (ii), a late enrollee described in this

subparagraph with respect to a group health

plan is an individual who becomes covered

under the plan but who, at the time the individual first was eligible to elect such coverage, had elected not to be covered under

the plan.

‘‘(ii) EXCEPTION FOR INDIVIDUALS WITH CONTINUOUS COVERAGE.—An individual shall not

be considered to be a late enrollee with respect to a plan if the individual establishes

that, with respect to the period beginning on

the date the individual first could have obtained coverage under the plan and until the

date the individual was so covered, there was

no period of more than 2 months during all

of which the individual neither had health

insurance coverage (including coverage described in subparagraph (C) or (D) of section

4991(2)) or was covered under any group

health plan.

‘‘(3) CREDIT FOR PREVIOUS QUALIFYING COVERAGE.—In the case of an individual who is

in a period of qualifying previous coverage

(as defined in section 4987(b)(3)) as of the

date of enrollment for health insurance coverage or under the group health plan, the

limitation or exclusion period under paragraph (2)(A) shall be reduced by the length of

such period of qualifying previous coverage.

‘‘(4) EXCEPTION FOR TREATMENT OF PREGNANCY.—The limitation or exclusion does not

apply to treatment relating to pregnancy.

‘‘(5) EXCEPTION FOR CERTAIN DEPENDENT

COVERAGE.—

(A) NEWBORNS.—The limitation or exclusion does not apply to a child who has health

insurance coverage (or is covered under a

group health plan) as a dependent within 1

month of the birthdate until such time as

the child does not have such coverage (or is

not so covered) for a continuous period of

more than 2 months.
May 11, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 1003

(B) ADOPTED CHILDREN.—The limitation or

exclusion does not apply (beginning on the

date of adoption) to an adopted child who

has health insurance coverage (or is covered

under a group health plan) within 1 month of

such date until such time as the child does

not have such coverage (or is not so covered)

for a continuous period of more than 2

months.

‘‘(b) LIMITATION ON USE OF DELAYED COVERAGE IN LIEU OF PREEXISTING EXCLUSION

LIMITATIONS.—

‘‘(1) IN GENERAL.—A carrier offering health

insurance coverage and a group health plan

providing coverage, with respect to an individual, may delay the effective date of coverage of the individual beyond the first date

of the month beginning after the date of

election of the coverage only if the following

requirements are met:

‘‘(A) LIMITATION ON DELAY PERIOD.—Subject

to paragraph (2), such additional delay does

not extend over a period of longer than 2

months (or 3 months in the case of a late enrollee described in subsection (a)(2)(B)).

‘‘(B) NO SUBSEQUENT APPLICATION OF ANY

PREEXISTING EXCLUSION.—After the period of

such additional delay, no limitation or exclusion described in subsection (a) may be

applied.

‘‘(C) NO PREMIUMS.—No premium or required contribution may be charged for the

period before the effective date of coverage.

Nothing in this paragraph shall waive the

applicable requirements of subsection (a).

‘‘(2) VOLUNTARY WAIVER.—The additional

delay may extend over a period longer than

the period specified under paragraph (1)(A) if

the individual involved waives the protection provided under such paragraph.

‘‘(c) PREEXISTING CONDITION DEFINED.—For

purposes of this section, the term ‘preexisting condition’ means, with respect to coverage under health insurance coverage or

under a group health plan, a condition which

was diagnosed or treated for a condition, or

for which a reasonably prudent person would

have sought medical care diagnosis or treatment, within the 3-month period ending on

the day before the date of enrollment (without regard to any delayed coverage period).

‘‘SEC. 4989. GUARANTEED RENEWABILITY OF

HEALTH INSURANCE COVERAGE.

‘‘(a) IN GENERAL.—Except as provided in

subsection (b), a carrier offering health insurance coverage shall guarantee that such

coverage may be renewed or continued in

force at the option of the policyholder or

contractholder.

‘‘(b) GROUNDS FOR REFUSAL TO RENEW.—

‘‘(1) IN GENERAL.—Subject to paragraphs (3)

and (4), a carrier offering health insurance

coverage may cancel or refuse to renew such

coverage—

‘‘(A) for nonpayment of premium or contribution in accordance with the terms of

the coverage;

‘‘(B) for fraud or misrepresentation of material fact;

‘‘(C) because of a general discontinuation

or termination of coverage, but only if the

carrier provides prior notice of such discontinuation or termination and if the conditions described in clause (i) or (ii) of paragraph (2)(A) are met;

‘‘(D) in the case of coverage offered in connection with a group health plan, for failure

of the plan to maintain participation rules

consistent with paragraph (4); or

‘‘(E) in the case of coverage that is continuation coverage under section 4980B, for

loss of eligibility to continue such coverage.

‘‘(2) CONDITIONS FOR DISCONTINUATION.—

‘‘(A) IN GENERAL.—

‘‘(i) NONDISCRIMINATORY SUBSTITUTION OF

ALTERNATIVE COVERAGE.—The conditions described in this clause are the following:

‘‘(I) The carrier is no longer offering health

insurance coverage to new policyholders or

contractholders.

‘‘(II) The carrier is offering to the previously covered policyholder or contractholder the option to purchase any other

health insurance coverage currently being

offered to new policyholders or contractholders.

‘‘(III) The discontinuation or termination

of coverage and option to replace with other

coverage is made uniformly without regard

to the health status or insurability of any

person provided health insurance coverage.

‘‘(ii) GENERAL DISCONTINUATION OF COVERAGE IN A STATE.—The conditions described

in this clause are that the carrier is discontinuing and not renewing all health insurance coverage within a class of coverage

(as defined in subparagraph (B)) in a State.

‘‘(B) CLASSES OF COVERAGE.—For purposes

of subparagraph (A)(ii), each of the following

is considered a separate class of health insurance coverage:

‘‘(i) INDIVIDUAL COVERAGE.—Health insurance coverage not offered in connection with

any group health plan.

‘‘(ii) SMALL EMPLOYER GROUP COVERAGE.—

Health insurance coverage offered to small

employers (as defined by State law) in connection with any group health plan for covered employees and their dependents.

‘‘(iii) OTHER GROUP COVERAGE.—Health insurance coverage offered in connection with

a group health plan and not described in

clause (ii).

‘‘(3) APPLICATION OF GEOGRAPHIC LIMITATIONS TO COVERAGE PROVIDED THROUGH A NETWORK ARRANGEMENT.—

‘‘(A) IN GENERAL.—Coverage under health

insurance or under a group health plan that

consists primarily of coverage through a network arrangement (as defined in subparagraph (B)) may be denied to individuals who

neither live nor reside in the service area of

the arrangement, but only if such denial is

applied uniformly, without regard to the

health status or the insurability of particular individuals.

‘‘(B) NETWORK ARRANGEMENTS.—For purposes of subparagraph (A), the term ‘network

arrangement’ means, with respect to a group

health plan or under health insurance coverage, an arrangement under such plan or

coverage whereby providers agree to provide

items and services covered under the arrangement to individuals covered under the

plan or who have such coverage.

‘‘(4) MINIMUM PARTICIPATION REQUIREMENTS.—A carrier that offers health insurance coverage in connection with a group

health plan that covers the employees of one

or more employers may require that a minimum percentage of eligible employees of

such an employer obtain such coverage if

such percentage is applied uniformly to all

such coverage offered to employers of comparable size.

‘‘SEC. 4990. RELATION TO STATE STANDARDS.

‘‘Nothing in this chapter shall prevent a

State from establishing, implementing, or

continuing in effect standards related to

health insurance coverage (including the issuance, renewal, or rating of such coverage)

if such standards are at least as stringent as

the standards established under this chapter

with respect to such coverage.

‘‘SEC. 4991. DEFINITIONS.

‘‘For purposes of this chapter—

‘‘(1) CARRIER.—The term ‘carrier’ means—

‘‘(A) a licensed insurance company;

‘‘(B) an entity offering prepaid hospital or

medical service plan;

‘‘(C) a health maintenance organization;

and

‘‘(D) any similar entity which (i) is engaged in the business of providing a plan of

health insurance or health benefits or services and (ii) is regulated under State law for

solvency.

‘‘(2) HEALTH INSURANCE COVERAGE.—

‘‘(A) IN GENERAL.—Except as provided in

subparagraph (B), the term ‘health insurance

coverage’ means any hospital or medical

service policy or certificate, hospital or medical service plan contract, or health maintenance organization group contract offered by

a carrier.

‘‘(B) EXCEPTION.—Such term does not include any of the following (or any combination of the following):

‘‘(i) Coverage only for accident, dental, vision, or disability income, or any combination thereof.

‘‘(ii) Medicare supplemental health insurance.

‘‘(iii) Coverage issued as a supplement to

liability insurance.

‘‘(iv) Liability insurance, including general

liability insurance and automobile liability

insurance.

‘‘(v) Workers’ compensation or similar insurance.

‘‘(vi) Automobile medical-payment insurance.

‘‘(vii) Coverage providing wages or payments in lieu of wages for any period during

which an employee is absent from work on

account of sickness or injury.

‘‘(viii) A long-term care insurance coverage, including a nursing home fixed indemnity policy (unless the Secretary of Health

and Human Services, in consultation with

the Secretaries of Labor and of the Treasury,

determines that such coverage is sufficiently

comprehensive so that it should be treated

as health insurance coverage.)

‘‘(ix) Any coverage not described in any

preceding clause which consists of benefit

payments, on a periodic basis, for a specified

disease or illness or period of hospitalization

without regard to the costs incurred or services rendered during the period to which the

payments relate.

‘‘(x) Such other coverage as the Secretary

of Health and Human Services, in consultation with the Secretaries of Labor and of the

Treasury, determines is not health insurance

coverage.

‘‘(C) TREATMENT OF STATE RISK POOLS.—Except for purposes of sections 4987(b)(3),

4988(a)(2)(B)(ii), and 4988(a)(3), such term

does not include coverage provided through a

State risk pool, uncompensated care pool or

similar subsidized program.

‘‘(D) PUBLIC PLANS COUNTED FOR PURPOSES

OF QUALIFYING PREVIOUS COVERAGE.—For purposes of sections 4987(b)(3), 4988(a)(2)(B)(ii),

and 4988(a)(3), such term also includes coverage under any of the following:

‘‘(i) The medicare program under title

XVIII of the Social Security Act.

‘‘(ii) A State plan under title XIX of such

Act.

‘‘(iii) A program of the Indian Health Service.

‘‘(iv) The Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)

under title 10, United States Code.

‘‘(v) Any other similar governmental

health insurance program (including a program described in subparagraph (C)).

‘‘(3) GROUP HEALTH PLAN.—The term ‘group

health plan’ has the meaning given such

term in section 5000(b)(1), but does not include any type of coverage excluded from the

definition of health insurance coverage

under paragraph (2)(B) or (C) and does not include any plan unless at least one of the following requirements is met:

‘‘(A) Any portion of the premium or benefits under the plan is paid by or on behalf of

the employer.
E 1004 CONGRESSIONAL RECORD — Extensions of Remarks May 11, 1995

‘‘(B) An eligible employee or dependent is

reimbursed, whether through wage adjustments or otherwise, by or on behalf of the

employer for any portion of the premium.

‘‘(C) The health benefit plan is treated by

the employer, or any of the eligible employees or dependents, as part of a plan or program for the purposes of section 162, section

25, or section 106 of the Internal Revenue

Code of 1986.

‘‘(4) STATE.—The term ‘State’ includes the

District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the

Northern Mariana Islands.’’

(b) EFFECTIVE DATE.—

(1) IN GENERAL.—The amendments made by

subsection (a) shall apply to individuals who

commence health insurance coverage or coverage under a group health plan after the

first day of the first month beginning more

than 6 months after the date of the enactment of this Act.

(2) PLAN YEAR EXCEPTION.—Such amendments shall not apply to plan years ending

before the first day referred to in paragraph

(1).

(c) CLERICAL AMENDMENT.—The table of

chapters for subtitle D is amended by inserting after the item relating to chapter 44 the

following new item:

‘‘CHAPTER 45. Continuity and portability of

health coverage.’’

SEC. 3. CHANGES IN COBRA CONTINUATION REQUIREMENTS.

(a) MORE AFFORDABLE COVERAGE THROUGH

REQUIREMENT OF LOWER-COST HEALTH PLAN

CHOICES.—

(1) IN GENERAL.—Section 4980B(f) of the Internal Revenue Code of 1986 is amended—

(A) in paragraph (1), by striking ‘‘, continuation coverage under the plan’’ and inserting ‘‘and as selected by the qualified beneficiary under this subsection, continuation

coverage of the type described in subparagraph (A), (F)(i), or (F)(ii) of paragraph (2)’’;

(B) in paragraph (2)(A), by striking ‘‘The

coverage’’ and inserting ‘‘Unless the coverage is the type of coverage described in

clause (i) or (ii) of subparagraph (F), the coverage’’;

(C) in paragraph (2)(C)—

(i) in clause (i), by inserting ‘‘(or in the

case of alternative continuation coverage described in clause (i) or (ii) of subparagraph

(F), 69 percent or 52 percent, respectively, of

such applicable premium)’’ after ‘‘for such

period’’, and

(ii) in the last sentence by inserting ‘‘, ‘69

percent’, or ‘52 percent’’’ after ‘‘ ‘102 percent’’’ and by inserting ‘‘, ‘100 percent’, or ‘75

percent’, respectively,’’;

(D) by adding at the end of paragraph (2)

the following new subparagraph:

‘‘(F) TYPES OF ALTERNATIVE CONTINUATION

COVERAGE REQUIRED.—

‘‘(i) COVERAGE WITH TWO-THIRDS ACTUARIAL

VALUE.—The type of coverage described in

this clause is coverage which—

‘‘(I) has an actuarial value (determined

with respect to the similarly situated beneficiaries referred to in subparagraph (A)) of

not less than 2⁄3 of the actuarial value (determined with respect to such beneficiaries) of

the reference coverage, and

‘‘(II) meets the requirements of clause (iii).

‘‘(ii) COVERAGE WITH ONE-HALF ACTUARIAL

VALUE.—The type of coverage described in

this clause is coverage which—

‘‘(I) has an actuarial value (determined

with respect to the similarly situated beneficiaries referred to in subparagraph (A)) of

not less than 1⁄2 of the actuarial value (determined with respect to such beneficiaries) of

the reference coverage, and

‘‘(II) meets the requirements of clause (iii).

‘‘(iii) REQUIREMENTS RELATING TO GENERAL

AVAILABILITY AND PREEXISTING CONDITIONS.—

Coverage meets the requirements of this

clause if the coverage—

‘‘(I) is made available to all qualified beneficiaries who become eligible for coverage

under this subsection after the effective date

of this subparagraph, and

‘‘(II) does not impose any restriction or

limitation on coverage based on a preexisting condition unless such restriction or limitation could be imposed under the coverage

described in subparagraph (A).

‘‘(iv) REFERENCE COVERAGE DEFINED.—For

purposes of this subparagraph, the term ‘reference coverage’ means, with respect to a

group health plan, the costliest continuation

coverage available under subparagraph (A)

under the plan, excluding coverage in which

an insignificant proportion of the eligible individuals is enrolled.’’; and

(E) by adding at the end of paragraph (4)

the following new subparagraph:

‘‘(D) COMPUTATION BASED ON FULL COVERAGE.—For purposes of this section, the applicable premium shall be computed based on

the type of coverage described in paragraph

(2)(A).’’

(2) EFFECTIVE DATE.—The amendments

made by this subsection shall apply to plan

years beginning on or after the first day of

the first month beginning at least 6 months

after the date of the enactment of this Act.

(b) CONTINUATION COVERAGE FOR CERTAIN

FORMERLY COVERED DEPENDENT SPOUSES AND

CHILDREN.—

(1) IN GENERAL.—Section 4980B(f) of such

Code is amended by adding at the end the

following new paragraph:

‘‘(9) CAPTURE OF DELAYED DIVORCE OR SEPARATION.—

‘‘(A) IN GENERAL.—For purposes of this section, if a covered employee disenrolls from

coverage (or fails to renew coverage of) a

qualified beneficiary within the 12-month period preceding the date of the divorce or

legal separation of the employee from the

employee’s spouse, the divorce or separation

shall be treated as a qualifying event described in paragraph (3)(C) and the loss of

coverage shall be considered to be a result

(and by reason) of such event.

‘‘(B) EXCEPTION.—Subparagraph (A) shall

not apply to a qualified beneficiary if—

‘‘(i) the beneficiary waives the rights under

such subparagraph, or

‘‘(ii) the qualified beneficiary at the time

of the qualifying event or at the time of the

disenrollment or failure to renew coverage

has coverage under a group health plan

(other than by reason of this paragraph) if

the plan does not contain any exclusion or

limitation with respect to any preexisting

condition of such beneficiary.’’

(2) TREATMENT OF PERIOD BEFORE DELAYED

DIVORCE OR SEPARATION.—Subparagraph (D)

of section 4980B(f)(2) of such Act is amended

by adding at the end the following new sentence: ‘‘For purposes of applying any preexisting condition limitation or restriction,

any period beginning on the date of the

disenrollment or failure to renew coverage

referred to in paragraph (9)(A) and ending on

the date of the divorce or separation referred

to in such paragraph shall not be treated as

a break in coverage if such paragraph applies

to the qualified beneficiary.’’.

(3) TREATMENT OF ANNULMENTS.—Section

4980B(g) of such Code is amended by adding

at the end the following new paragraph:

‘‘(5) TREATMENT OF ANNULMENT AS DIVORCE.—The term ‘divorce’ includes an annulment.’’.

(4) EFFECTIVE DATE.—The amendments

made by this section shall apply to divorces,

legal separations, and annulments occurring

more than 60 days after the date of the enactment of this Act.

(c) ELIMINATION OF TERMINATION OF CONTINUATION COVERAGE BY REASON OF MEDICARE

ELIGIBILITY THROUGH END STAGE RENAL DISEASE.—

(1) IN GENERAL.—Subclause (II) of section

4980B(f)(2)(B)(iv) of such Code is amended by

inserting ‘‘other than by reason of section

226A of such Act’’ after ‘‘the Social Security

Act’’.

(2) EFFECTIVE DATE.—The amendment

made by this subsection shall apply to covered employees and qualified beneficiaries

who become entitled to benefits under title

XVIII of the Social Security Act pursuant to

section 226A of such Act on or after the first

day of the first month that begins after the

date of the enactment of this Act.

THE MEDIGAP CONSUMER

PROTECTION ACT OF 1995

f

HON. RICHARD J. DURBIN OF ILLINOIS

IN THE HOUSE OF REPRESENTATIVES

Thursday, May 11, 1995

Mr. DURBIN. Mr. Speaker, today I am introducing the Medigap Consumer Protection Act

of 1995, which will help millions of seniors

hang on to the private health insurance they

purchase to pay for the deductibles and services which are not covered by Medicare.

In recent years, insurance companies have

increasingly sold Medigap policies whose premiums are determined using a method known

as ‘‘attained age rating’’. An attained age policy offers the buyer lower premiums at an

early age but its premiums increase as a result of the aging of the policyholder. At various

age thresholds the insurer raises premiums to

reflect the expected greater use of health care

by older policyholders. Due to the high inflation rate in the cost of health care, all Medigap

policy premiums increase with time, but the

premiums of attained age policies increase

much more sharply.

The Medigap Consumer Protection Act

would prohibit annual Medigap premium increases from being based on the age or aging

of the policyholder. This would prohibit insurance companies from selling any more attained age Medigap policies. Ten States already prohibit attained age rating for Medigap:

Arkansas, Connecticut, Florida, Georgia,

Idaho, Maine, Massachusetts, Minnesota, New

York, and Washington. The bill would allow

people who have already purchased attained

age policies to keep them if they choose to do

so. However, insurance companies would

have to offer these policyholders the option of

changing their insurance coverage to a policy

not based on attained age rating, for example,

a community rated or issue age rated policy.

Most Medigap purchasers, and many insurance agents, do not understand how attained

age rating works, so prospective policy buyers

often have a difficult time in making an informed decision. Senior citizens who purchase

attained age policies and later face unexpectedly large premium increases as they age find

it difficult to change policies because they usually must face a 6-month waiting period for

pre-existing health conditions. When seniors

enter the Medicare system—usually at age

65—they have a 6-month window of opportunity during which they can sign up for

Medigap insurance without being denied coverage because of pre-existing conditions. At

all other times they are subject to such a preexisting condition waiting period.