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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1965 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 1965

   To amend the Internal Revenue Code of 1986 to allow individuals a 
   deduction from gross income for contributions to health services 
   savings account; to amend the Social Security Act to provide for 
 universal coverage of basic health needs for all Americans; to expand 
  Medicare to include preventive and long-term care services; and for 
                            other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 4, 1993

Mr. Regula introduced the following bill; which was referred jointly to 
 the Committees on Ways and Means, Energy and Commerce, and Education 
                               and Labor

_______________________________________________________________________

                                 A BILL

 
   To amend the Internal Revenue Code of 1986 to allow individuals a 
   deduction from gross income for contributions to health services 
   savings account; to amend the Social Security Act to provide for 
 universal coverage of basic health needs for all Americans; to expand 
  Medicare to include preventive and long-term care services; and for 
                            other purposes.

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

SECTION. 1. SHORT TITLE; REFERENCES

    (a) Short Title.--This Act may be cited as the ``Universal 
Coordinated Care Act of 1992.''
    (b) References.--Except as otherwise provided, any reference to 
Secretary within this Act shall refer to the Secretary of Health and 
Human Services.
    (c) Table of Contents.--the table of contents of this Act is as 
follows:
Sec. 1. Short title; references.
Sec. 2. Deductions for contributions to health services account.
  (a) In general.
        ``Sec. 223. Health service account contributions.
          ``(a) Allowance of tax credit.
          ``(b) Limitations.
          ``(c) Health services account defined.
          ``(d) Qualified health expenses defined.
          ``(e) Establishment of health services supplemental policies.
          ``(f) Tax treatment on distribution.
          ``(g) Tax treatment of accounts.
          ``(h) Additional definitions and special rules.
  (b) Tax on excess contributions.
  (c) Tax on prohibited transactions.
  (d) Failure to provide reports.
  (e) Clerical amendments.
Sec. 3. Coverage of home care benefits.
  (a) In general.
  (b) Definition of benefits.
  (c) Conditions on payments for services.
  (d) Limitations upon payment.
  (e) Assurances of minimum standards in home care services.
                    ``TITLE XXI--HOME CARE SERVICES.

          ``Sec. 2101. Funding home care services.
          ``Sec. 2102. Survey of home health agencies.
          ``Sec. 2103. Sanctions.
          ``Sec. 2104. Licensing policies.
          ``Sec. 2105. Definitions.
          ``Sec. 2106. Authorization of appropriations.
  (f) Effective date.
Sec. 4. National care vouchers.
  (a) In general.
                 ``TITLE XXII--NATIONAL CARE VOUCHERS.

          ``Sec. 2201. Eligibility.
          ``Sec. 2202. Description of benefit.
          ``Sec. 2203. National care vouchers in general.
          ``Sec. 2204. Small employer health insurance reform in 
                            general.
Sec. 5. Deduction for national care vouchers for small employers.
Sec. 6. Equity tax.

SEC. 2. DEDUCTIONS FOR CONTRIBUTIONS TO HEALTH SERVICES ACCOUNT.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1954 (relating to additional itemized 
deductions for individuals) is amended by redesignating section 223 as 
section 224 and by inserting after section 222 the following section:

``SEC. 223. HEALTH SERVICE ACCOUNT CONTRIBUTIONS.

    ``(a) Allowance of Tax Credit.--In the case of an individual, there 
shall be allowed as a credit any amount paid in cash for the taxable 
year made by or on behalf of said individual to a health services 
account.
    ``(b) Limitations.--
            ``(1) In general.--The amount allowable as a credit under 
        subsection (a) to any individual for any taxable year shall not 
        exceed $1500.
            ``(2) Dollar limitation.--No credit shall be permitted 
        unless an amount equal to, or greater than, the claimed credit 
        was used to purchase certified health services supplemental 
        policies and, or, qualified health expenses.
            ``(3) Certain other rules to apply.--Rules similar to rules 
        of paragraphs (3), (4), (5), and (6) of section 219(f) shall 
        apply for purposes of this section.
    ``(c) Health Services Account Defined.--For the purposes of this 
section, the term `health services account' (hereafter referred to as 
the Account) means a trust created or organized in the United States 
exclusively to pay qualified health expenses of the distributee, but 
only if the written governing instrument creating the trust meets the 
following requirements:
            ``(1) No contribution will be accepted unless it is in 
        cash, and the contributions will not be accepted for the 
        taxable year in excess of $3,000 on behalf of any individual.
            ``(2) The trustee is a bank (as defined in section 408(n) 
        or such other person who demonstrates to the satisfaction of 
        the Secretary that the manner in which such other person will 
        administer the trust will be consistent with the requirements 
        of this section.
            ``(3) The interest of an individual in the balance of his 
        account is nonforfeitable.
            ``(4) The assets of the trust will not be commingled with 
        other property except in a common trust fund or a common 
        investment fund.
    ``(d) Qualified Health Expenses Defined.--The term `qualified 
health expense' means any amount paid for--
            ``(1) care of the distributee at a skilled nursing facility 
        (as defined in section 1861(j) of the Social Security Act (42 
        U.S.C. 1395x(j));
            ``(2) care of the distributee at an intermediate care 
        facility (as defined in section 1905(c) of such Act (42 U.S.C. 
        1396(c));
            ``(3) care at any other long-term facility, licensed by the 
        State, which provides nursing or custodial care,
            ``(4) home health care of the distributee prescribed by, 
        and under the supervision of, a qualified physician that is 
        provided by a home health care agency, licensed by the State;
            ``(5) medicare supplemental policies for the distributee 
        (as defined in section 1882(g)(1) of the Social Security Act) 
        which have been certified by the Secretary under the authority 
        of section 1882 of the Social Security Act; or
            ``(6) health services supplemental policies for the 
        distributee (as established under subsection (e)).
An amount may be taken into account under this subsection only if such 
amount constitutes medical care (as defined by section 213(d)).
    ``(e) Establishment of Health Services Supplemental Policies.--
            ``(1) Health services supplemental policies defined.--For 
        purposes of this section, a `health services supplemental 
        policy' is a health insurance policy or other health benefit 
        plan offered by a private entity to an individual which 
        provided reimbursement for expenses incurred, or services, for 
        catastrophic and long-term care which is certified by the 
        Secretary under paragraph (2) of this subsection; including any 
        such policy or plan of one or more employers of labor 
        organizations, or of the trustees of a fund established by one 
        or more employers or labor organization (or combination 
        thereof), for employees or former employees (or combination 
        thereof) of the labor organizations.
            ``(2) Certification of health services supplemental 
        policies.--
                    ``(A) The Secretary shall establish minimum 
                standards and requirements for the certification of 
                health services supplemental policies.
                    ``(B) The Secretary shall establish a procedure 
                whereby health services supplemental policies may be 
                certified by the Secretary. Such procedure shall 
                provide an opportunity for any insurer to submit any 
                such policy, and such additional data as the Secretary 
                finds necessary, to the Secretary for his examination 
                and for his certification thereof as meeting the 
                standards and requirements set forth in subparagraph 
                (A). Such certification shall remain in effect if the 
                insurer files a notarized statement with the Secretary 
                no later than June 30 of each year stating that the 
                policy continues to meet such standards and 
                requirements if the insurer submits such additional 
                data as the Secretary finds necessary to independently 
                verify the accuracy of such notarized statement. Where 
                the Secretary determines such a policy meets (or 
                continues to meet) such standards and requirements, he 
                shall authorize the insurer to have printed on such 
                policy (but only in accordance with such requirements 
                and conditions as the Secretary may prescribe) an 
                emblem which the Secretary shall cause to be designed 
                for use as an indication that policy has received the 
                Secretary's certification. The Secretary shall provide 
                each State commissioner or superintendent of insurance 
                with a list of all the policies which have received his 
                certification.
    ``(f) Tax Treatment on Distribution.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, any amount distributed out of an Account shall be 
        included in taxable income by the distributee for the taxable 
        year in which the distribution is received. Notwithstanding any 
        other provision of this title (including chapter 11 and 12), 
        the basis of any persons in such an account is zero.
            ``(2) Penalty for distributions other than for payment of 
        qualified health expenses.--If any distribution for an Account 
        is not used exclusively to pay qualified health expenses of the 
        distributee, the distributee's tax under this chapter for the 
        taxable year in which such distribution is received shall be 
        increased by an amount equal to 10 percent of the amount of 
        such distribution which is not used exclusively to pay for 
        qualified health expenses.
            ``(3) Rules relating to excess contributions.--Rules 
        similar to the rules of paragraphs (4), (5), and (6) of section 
        408(d) shall apply for purposes of this section.
    ``(g) Tax Treatment of Accounts.--
            ``(1) In general.--Any Account shall be exempt from 
        taxation under this subtitle unless the account ceases to be an 
        Account by reason of paragraphs (2) or (3).
            ``(2) Loss of exemption of account where distributee 
        engages in prohibited transaction.--If, during any taxable year 
        of the distributee, the distributee engages in any transaction 
        prohibited by section 4975 with respect to such account--
                    ``(A) such Account shall cease to be an Account as 
                of the first of such taxable year, and
                    ``(B) subsection (f) shall be applied as if there 
                were a distribution on such first day in an amount 
                equal to the fair market value (on such first day) of 
                all assets in the account (on such first day).
            ``(3) Effect of pledging account as security.--If, during 
        any taxable year of the distributee, the distributee uses any 
        portion of the account as security for a loan, such portion 
        shall be treated as distributed to the distributee.
            ``(4) Termination of account on death of distributee.--
                    ``(A) In general.--In the case of the death of the 
                distributee--
                            ``(i) any Account of the distributee shall 
                        cease to be treated as such an account on the 
                        termination date, and
                            ``(ii) subsection (f) (other than paragraph 
                        (2)) shall be applied as if there were a 
                        distribution on such date in an accunt equal to 
                        the fair market value (on such date) of all 
                        assets in the account (on such date).
                    ``(B) Termination date.--For purposes of 
                subparagraph (A), the term `termination date' means the 
                later of--
                            ``(i) the last day of the taxable year in 
                        which the distributee dies, or
                            ``(ii) the date is six months after the 
                        date of death of the distributee.
    ``(h) Additional Definitions and Special Rules.--For purposes of 
this section--
            ``(1) Distributee.--The term `distributee' means the 
        individual on whose behalf the Account is established.
            ``(2) Distributed.--The term `distributed' includes paid.
            ``(3) Other rules.--Rules similar to the rules of 
        subsections (h) and (i) of section 408 shall apply.''.
    (b) Tax on Excess Contributions.--
            (1) In general.--Subsection (a) of section 4973 of such 
        Code (relating to tax on excess contributions to individuals 
        retirement accounts, certain section 403(b) contracts, and 
        certain individuals retirement annuities) is amended by 
        striking out ``or'' at the end of paragraph (1), by 
        redesignating paragraph (2) as paragraph (3), and by inserting 
        after paragraph (1) the following new paragraph:
            ``(2) a health services account (within the meaning of 
        section 223(c)), or''.
            (2) Technical amendments.--
                    (A) Subsection (b) of section 4973 of such Code is 
                amended by adding at the end thereof the following: 
                ``In the case of a health services account, rules 
                similar to the rules of the preceding provisions of 
                this subsection shall apply in determining excess 
                contributions.''.
                    (B) Subsection (C) of section 4973 of such Code is 
                amended by striking out ``subsection (a)(2)'' and 
                inserting in lieu thereof ``subsection (a)(3)''.
                    (C) The section heading for section 4973 of such 
                Code is amended by inserting ``HEALTH SERVICES 
                ACCOUNTS,'' after ``INDIVIDUAL RETIREMENT ACCOUNTS,''.
                    (D) The table of sections for subchapter C of 
                chapter 42 of such Code is amended in the item relating 
                to section 4973 by inserting ``health services 
                accounts,'' after ``individual retirement accounts,''.
    (c) Tax on Prohibited Transactions.--
            (1) In general.--Paragraph (1) of section 4975(e) of such 
        Code (relating to definitions) is amended by inserting ``, a 
        health services account described in section 223(c),'' after 
        ``described in section 408(a)''.
            (2) Special rule.--Subsection (c) of section 4975 of such 
        Code (defining prohibited transaction) is amended by adding at 
        the end thereof the following new paragraph:
            ``(4) Special rules for health services accounts.--An 
        individual for whose benefit a health services account is 
        established shall be exempt from the tax imposed by this 
        section with respect to any transaction concerning such account 
        (which would otherwise be taxable under this section) if, with 
        respect to such transaction, the account ceases to be a health 
        services account by reason of the application of section 
        223(g)(2) or if section 223(g)(3) applies to such Account.''.
    (d) Failure To Provide Reports.--
            (1) In general.--Subsection (a) of section 6693 of such 
        Code (relating to failure to provide reports on individual 
        retirement accounts or annuities) is amended by inserting ``, 
        or by subsection (h)(3) of section 223 to file a report 
        regarding a health services account,'' after ``retirement 
        annuity''.
            (2) Clerical amendments.--
                    (A) The section heading for section 6693 of such 
                Code is amended by inserting ``OR HEALTH SERVICES 
                ACCOUNTS'' after ``ANNUITIES''.
                    (B) The table of sections for subchapter B of 
                chapter 68 of such Code is amended in the item relating 
                to section 6693 by inserting ``or health services 
                accounts'' after ``annuities''.
    (e) Clerical Amendments.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by striking out the 
item relating to section 223 and inserting in lieu thereof the 
following:

        ``Sec. 223. Health services account contributions.
        ``Sec. 224. Cross references.''.
    (f) Report to Congress on Minimum Standards for Health Services 
Supplemental Policies.--Not later than one year after the date of 
enactment of this Act, a report shall be issued by the Secretary in 
consultation with, but not limited to, representatives of consumer 
groups, insurance companies, long-term care facilities, hospitals and 
home-health care agency representatives. The report shall contain a 
regulatory program that provides for the application of minimum 
standards with respect to health services supplemental policies. In 
addition, the report should contain an analysis and evaluation of the 
various catastrophic and long-term care insurance policies available to 
an individual, as well as any other areas of examination deemed 
appropriate by the Secretary.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning on or after the first day of the first 
calendar year which begins more than one year after the date of the 
enactment of this Act.

SEC. 3. COVERAGE OF HOME CARE BENEFITS.

    (a) In General.--Section 1812(a) (42 U.S.C. 1395d(a)) is amended--
            (1) by striking ``and'' at the end of paragraph (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting ``; and'', and
            (3) by adding at the end the following:
            ``(5) home care services to the qualified patient.''.
    (b) Definition of Benefits.--Section 1861 (42 U.S.C. 1395x) is 
amended by adding at the end the following subsection:

                          ``Home Care Services

            ``(ff)(1) The term `home care services' means services or 
        supplies provided to an individual by a home health agency or 
        another acting under the authority of such agency, under a 
        written plan of care established and periodically reviewed by a 
        physician, which are provided in the place of residence of such 
        individual's home--
                    ``(A) nursing care provided by or under the 
                supervision of a registered professional nurse;
                    ``(B) medical social services under the direction 
                of a physician;
                    ``(C) services of a homemaker/home health aide who 
                has met training and credentialing requirement approved 
                by the Secretary;
                    ``(D) physical, occupational, speech, respiratory 
                therapy, or rehabilitative services to preserve, 
                restore, or prevent the deterioration of the 
                individual's functional capabilities;
                    ``(E) medical supplies (other than drugs and 
                biological);
                    ``(F) services received under a program of managed 
                care.
            ``(2) For the purposes of this section the term `qualified 
        patient' means an individual who--
                    ``(A) has been certified by a physician as 
                requiring home care benefits based upon the 
                individual's impairment and inability to perform at 
                least three basic functions of normal activity as set 
                forth in paragraph (3); and
                    ``(B) is participating in a program of managed 
                care;
                    ``(C) is described in section 226(a).
            ``(3) For purposes of paragraph (2), each of the following 
        is a function of normal activity:
                    ``(A) Bathing.--The overall complex behavior of 
                getting water and cleansing the whole body, including 
                turning on the water for a bath, shower, or sponge 
                bath, getting to, in, and out of a tub or shower, and 
                washing and drying oneself.
                    ``(B) Eating.--The process of getting food from a 
                plate or its equivalent into the mouth.
                    ``(C) Toileting.--The act of going to the toilet 
                room for bowel and bladder function, transferring on 
                and off the toilet, cleaning after elimination, and 
                arranging clothes.
                    ``(D) Dressing.--The overall complex behavior of 
                getting clothes from closets and drawers and then 
                getting dressed including putting on braces or other 
                assistive devices, fastening buttons, zippers, snaps, 
                or other closures.
                    ``(E) Transfer.--The process of moving in and out 
                of bed and in and out of a chair or wheelchair.
            ``(4) The term `program of managed care' means an 
        established and formal program conducted by a managed care 
        organization (as described in paragraph (5)) for the oversight 
        of providing home care services to a qualified patient to 
        ensure effective and coordinated delivery of services, such as 
        development and periodic revision of individual plans of care, 
        arranging for necessary care and services, and follow-up and 
        on-going monitoring of patient and services delivery.
            ``(5) The term `managed care organization' means any 
        organization which--
                    ``(A) is a corporation established pursuant to and 
                regulated by State law but not limited to being 
                incorporated within the State in which the home care 
                services are furnished; and
                    ``(B) develops standards for reasonable levels of 
                care for the community in which the services are being 
                furnished, sufficient to meet standards as established 
                by the Secretary in regulations, to be used as 
                guidelines for the delivery of services by home health 
                agencies; and
                    ``(C) supervises home health agencies providing 
                services to qualified patients, under their oversight, 
                in accordance with regulations promulgated by the 
                Secretary; and
                    ``(D) establishes processes which include--
                            ``(i) a plan of care which states 
                        reasonable and measurable objectives for the 
                        individual and home care services to be 
                        furnished to meet those objectives;
                            ``(ii) methods for periodic review of the 
                        plan of care for the qualified patient
                            ``(iii) a statement of criteria and 
                        procedures for discharge or transfer to another 
                        agency, program, or service; and
                    ``(E) shall make such reports, in such form and 
                containing such information, as the Secretary may from 
                time to time require, and comply with such provisions 
                as the Secretary may from time to time find necessary 
                to assure the correctness and verification of such 
                reports.''.
    (c) Conditions on Payments for Services.--(1) Section 1814(a) (42 
U.S.C. 1395f(a)) is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (6),
                    (B) by striking the period at the end of paragraph 
                (7) and inserting ``; and'', and
                    (C) by inserting after paragraph (7) the following 
                new paragraph:
            ``(8) in the case of home care services provided to an 
        individual, the individual is a qualified patient.''.
            (2) Section 1862(a) (42 U.S.C. 1395y(a)) is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (a), by striking 
                        ``subparagraphs (B), (C), (D) and inserting ``a 
                        succeeding subparagraph of this paragraph'',
                            (ii) by striking ``and'' at the end of 
                        subparagraph (D).
                            (iii) by adding ``and'' at the end of 
                        subparagraph (E); and
                            (iv) by adding at the end the following new 
                        subparagraph:
                    ``(F) with respect to home care services, which is 
                not a reasonable cost as defined in section 1861ff(6) 
                of this Act''; and
                    (B) in paragraph (6), by inserting ``and except, in 
                the case of home care services, as is otherwise 
                permitted under paragraph (1)(F)'' and ``paragraph 
                (a)(C)''.
    (d) Limitations Upon Payment.--Section 1814 (42 U.S.C. 1395f) is 
amended by adding at the end the following new subsection:

               ``Limit on Payment for Home Care Services

            ``(1) The maximum amount of payment that may be made with 
        respect to home care services provided a qualified patient 
        (described in section 1861ff(2)) residing in a State in a month 
        is an amount that the Secretary estimates is equal to 75 
        percent of the average amount payable under the plan of the 
        State approved under title XIX (or, in the absence of such a 
        plan, the average amount payable under all such plans under 
        such title) during the month for skilled nursing facility 
        services in the State.
            ``(2)(A) The amount payable for home care services 
        furnished an individual shall be reduced by a deduction equal 
        to the home care deductible or, if less, the charges imposed 
        with respect to such individual for such services, except that, 
        if the customary charges for such services are greater than the 
        charges so imposed, such customary charges shall be considered 
        to be the charges so imposed.
            ``(B) The Secretary shall, between July 1 and October 1 of 
        1993, and of each year thereafter, determine and promulgate the 
        home care deductible which shall be applicable for the purposes 
        of subsection (5)(A) in the case of any home care services 
        furnished during the succeeding calendar year. Such home care 
        deductible shall be equal to $45 multiplied by the ratio of (i) 
        the current average per diem rate for home care services for 
        the calendar year preceding the promulgation, to (ii) the 
        current average per diem rate for such services for 1992. Any 
        amount determined under the preceding multiple of $4 shall be 
        rounded to the nearest next higher multiple.
            ``(3)(A) The reasonable cost of any services shall be the 
        cost actually incurred, excluding therefrom any part of 
        incurred cost found to be unnecessary in the efficient delivery 
        of needed services, and shall be determined in accordance with 
        regulation establishing the methods to be used, and the items 
        to be included, in determining such costs for home care 
        benefits as provided by a home health agency (as defined in 
        Section 1861(o) of the Social Security Act). In prescribing the 
        regulations referred to in the preceding sentence, the 
        Secretary shall consider, among other things, the principles 
        generally applied by national organizations or established 
        prepayment organizations in computing the amount of payment, to 
        be made by persons other than the recipients of services, to 
        providers of home care benefits on account of services provided 
        to such recipients by such home care agencies. Such regulations 
        may provide for determination of the costs of services on a per 
        diem, per unit, per capita, or other basis, may provide for 
        using different methods in different circumstances, may provide 
        for the use of estimates of costs of particular items or 
        services, may provide for the establishment of limits on the 
        direct or indirect overall incurred costs of incurred costs of 
        specific items or services or groups of items or services to be 
        recognized as reasonable based on estimates of the costs 
        necessary in the efficient delivery of needed services to 
        individuals covered by this subsection, and may provide for the 
        use of charges or a percentage of charges where this method 
        reasonably reflects the costs. Such regulation shall--
                    ``(i) take into account both direct and indirect 
                costs of home care agencies in order that, under the 
                methods of determining costs, the necessary costs of 
                efficiently delivering covered services to individuals 
                eligible under this subsection will not be borne by 
                individuals not so covered, and the costs with respect 
                to individuals not so covered will not be borne by the 
                program under this subsection; and
                    ``(ii) provide for the making of suitable 
                retroactive corrective adjustments where, for a home 
                care agency for any fiscal period, the aggregate 
                reimbursement produced by the methods of determining 
                costs proves to be either inadequate or excessive.
            ``(B) Such regulations shall require each home care agency 
        to make reports to the Secretary of information described in 
        section 1121(a) in accordance with the uniform reporting 
        system.
            ``(4) There shall be paid from the Federal Supplementary 
        Medical Insurance Trust Fund, in the case of each individual 
        who is covered under the program established by this subsection 
        and incurs expenses for home care services with respect to 
        which benefits are payable under this subsection, amounts equal 
        to 80 percent of the reasonable cost of the service to the 
        provider of said services.''.
    (e) Assurances of Minimum Standards in Home Care Services.--The 
Social Security Act (42 U.S.C. 301 et seq.) is amended by adding at the 
end thereof, the following:

                    ``TITLE XXI--HOME CARE SERVICES

                      ``FUNDING HOME CARE SERVICES

    ``Sec. 2101. (a) The Secretary shall promulgate regulations 
requiring that to receive funding for the provision of home care 
services under this subsection, a home health agency must within six 
months after the date of the publication of such regulations--
            ``(1) meet the requirements of a home health agency as 
        described in section 1861(o); and
            ``(2) implement procedures for reviewing grievances of 
        qualified patients receiving home care services; and
            ``(3) provide to each qualified patient, or their 
        representative, a written statement of the services to be 
        provided to said individual and the schedule for provision of 
        such services, as agreed upon by the qualified patient, or 
        their representative; and
            ``(4) ensure that any provider of home care services 
        employed by or under contract with the home health agency 
        receives training which meets requirements established by the 
        Secretary in regulations to be appropriate in nature and scope 
        of the services provided.
            ``(5) conduct annual evaluations of providers of home care 
        services employed or under contract to the home health agency; 
        and
            ``(6) enter into a cooperative agreement with the managed 
        care organization who has oversight (as described in Section 
        1861ff) of a qualified patient receiving home care services 
        from said health care agency to provide for the coordination 
        and delivery of services to such individual.

                    ``SURVEY OF HOME HEALTH AGENCIES

    ``Sec. 2102. (a) The Secretary shall promulgate regulations that 
establish procedures for surveying home health agencies concerning 
compliance with the requirements of this section.
            ``(1) Regulations shall include, but not be limited 
        thereto, surveys regarding the facility that--
                    ``(A) shall not be announced in advance;
                    ``(B) shall be conducted by a multidisciplinary 
                team of professionals who have passed a standardized 
                competency examination approved by the Secretary;
                    ``(C) shall focus on the quality of care provided 
                to patients;
                    ``(D) shall include a private meeting between 
                patients, or their representatives, and survey 
                personnel to discuss patients' experiences with the 
                home health agency with respect to type of care 
                received and compliance with the standards applicable 
                to the agency under this title;
                    ``(E) shall be conducted, with respect to each 
                agency, between 9 and 15 months after the previous 
                survey for the agency, with such surveys being 
                conducted, on a Statewide average, 12 months apart; and
                    ``(F) may be conducted less often than annually 
                with respect to an agency only if the agency is fully 
                in compliance with the requirements of this title.
            ``(2) The Secretary may make an agreement with any State 
        which is able and willing to do so under which the services of 
        the State health agency or other appropriate State agency will 
        be utilized by him for the purpose of determining whether a 
        home health agency therein meets the requirements as 
        established under this title. Said State shall conduct surveys 
        of compliance with the requirements of this title and provide 
        for the annual transmittal to the Secretary of the results of 
        such surveys.
            ``(3) The Secretary shall develop procedures for validating 
        survey of home health agencies performed by States under 
        paragraph (2). Such procedures shall provide for the review of 
        surveys--
                    ``(A) not less than every 15 months; or
                    ``(B) not less than every 9 months if 10 percent of 
                the total number of the State's home health care 
                agencies, as reported by the overseeing managed care 
                organizations, have committed serious or chronic 
                violations of professionally recognized standards of 
                care; and
                    ``(C) based on a representative sample of home 
                health agencies which have been surveyed under 
                paragraph (2).

                              ``SANCTIONS

    ``Sec. 2103. (a) Where the Secretary determines that a home health 
care agency no longer meets the requirements of this title he shall 
promulgate regulations which impose sanctions on home health agencies 
which shall--
            ``(1) include civil penalties;
            ``(2) include intermediate sanctions, including a ban on 
        admissions, receivership, fines, and emergency authority to 
        close home health agencies;
            ``(3) require any sanction to be imposed to be done so 
        immediately following the determination that the home health 
        agency is no longer in compliance with this title;
            ``(4) provide for a plan and schedule for corrective action 
        by home health agencies determined to be out of compliance with 
        this title; and
            ``(5) require public disclosure of failures to comply with 
        this title by home health agencies and sanctions imposed on 
        such agencies.
    ``(b)(1) The Secretary shall develop incentives to encourage high 
quality care and compliance by home health agencies with the 
requirements of participation, including annual publication of a 
directory of home health agencies, listed alphabetically and by 
geographic area, which have a consistent record of compliance with such 
requirements.
    ``(2) The directory published under paragraph (b)(1) shall be made 
available to managed care organizations, area agencies on aging, state 
ombudsman programs, and the public.
    ``(c) The Secretary shall file an annual report with the Congress 
on January 1 of each year regarding the availability, adequacy, and use 
of sanctions to correct failures of home health agencies and home care 
providers to meet professionally recognized standards of care.

                          ``LICENSING POLICIES

    ``Sec. 2104. The Secretary shall encourage States to develop 
policies and procedures for the licensing of home health agencies and 
gather information concerning the effectiveness of such efforts. He 
shall issue a biannual report which summarizes information gathered 
under this section.

                             ``DEFINITIONS

    ``Sec. 2105. For the purposes of this title--
            ``(1) The term `home health agency' has the meaning given 
        it in section 1861(o).
            ``(2) The term `home care services' has the meaning given 
        such term in section 1861ff(1).
            ``(3) The term `managed care organization' has the meaning 
        given it under section 1861ff(5).
            ``(4) The term `qualified patient' has the meaning as set 
        forth in section 1861ff(2).
            ``(5) The term `provider of home care services' means any 
        individual or entity who has contracted with a home health 
        agency, or is an agent of such an agency, providing home care 
        services to a qualified patient.

                   ``AUTHORIZATION OF APPROPRIATIONS

    ``Sec. 2106. There are authorized to be appropriated from the 
Federal Hospital Insurance Trust Fund such sums as may be necessary to 
carry out this title.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to home care services furnished on and after October 1, 1993.

SEC. 4. NATIONAL CARE VOUCHERS

    (a) In General.--The Social Security Act (42 U.S.C. 301 et seq.) is 
amended by adding at the end thereof, the following:

                  ``TITLE XXII--NATIONAL CARE VOUCHERS

                             ``ELIGIBILITY

    ``Sec. 2201.(a) Except as provided in subparagraph (b), each of the 
following individuals is eligible for benefits under the national care 
voucher program:
            ``(1) Each citizen or national of the United States.
            ``(2) Each alien lawfully admitted for permanent residence 
        or other permanently residing in the United States under color 
        of law, including aliens lawfully admitted for temporary 
        residence under section 210 or 245A of the Immigration and 
        Nationality Act.
            ``(3) Each alien admitted to the United States as an 
        officer or employee (or member of the immediate family of such 
        officer or employee)--
                    ``(A) of a foreign government or an instrumentality 
                of a foreign government, or
                    ``(B) of an international organization (as such 
                term is defined in the International Organizations 
                Immunities Act),
        if the government or organization, respectively, has entered 
        into an agreement described in subsection (d)(1) with the 
        United States.
    ``(b) Individuals who are entitled to health insurance benefits 
under Title XVIII of the Social Security Act (relating to Medicare and 
Medicaid) are not entitled to benefits under this title.

                        ``DESCRIPTION OF BENEFIT

    ``Sec. 2202. (a) The benefit coverage obtained from the purchase of 
insurance through a national care voucher must consist of entitlement 
to have payment made on his behalf for the following:
            ``(1) inpatient hospital services;
            ``(2) medical and other health services;
            ``(3) comprehensive outpatient rehabilitation facility 
        services and home intravenous therapy services;
            ``(4) alcohol and drug abuse rehabilitation services (as 
        defined by the Secretary in regulations);
            ``(5) outpatient mental health services furnished in a 
        community mental health center or by a physician, clinical 
        psychologist, clinical social worker, or psychiatric nurse 
        specialist (or other qualified provider who is legally 
        authorized to perform under State law, or the State regulatory 
        mechanism provided by State law) and would otherwise be covered 
        if furnished by a physician or as an incident to a physician's 
        service; and
            ``(6) the following preventive services:
                    ``(A) prenatal care (including home visitation 
                services);
                    ``(B) well-child care (including appropriate 
                immunizations according to age and health history;
                    ``(C) screening mammography (as defined in 
                subsection (jj));
                    ``(D) screening pap smear (as defined in subsection 
                (nn));
                    ``(E) colorectal cancer screening (as defined in 
                regulations by the Secretary); and
                    ``(F) nutritional screening (as defined in 
                regulations by the Secretary).

                        ``NATIONAL CARE VOUCHERS

    ``Sec. 2203. (a) In General.--Subject to the provisions of this 
Act, a full cash payment is to be made by the United States, to each 
beneficiary eligible to participate in the national care voucher 
program, except as amended by paragraph (d) of this section, to 
purchase certified health care insurance.
    ``(b) Establishment of Voucher Accounts.--The United States shall 
establish an account for each beneficiary eligible to participate in 
the national care voucher program (except as modified by paragraph (b)) 
which is created or organized in the United States exclusively to 
purchase certified health care insurance which meets the following 
requirements:
            ``(1) The trustee is a bank (as defined in section 408(n)) 
        or such other entity who demonstrates to the satisfaction of 
        the Secretary that the manner in which such other entity will 
        administer the trust will be consistent with the requirements 
        of this section.
            ``(2) The assets of the trust will not be commingled with 
        other property except in a common trust fund or a common 
        investment fund.
            ``(3) The assets of the trust may be distributed solely for 
        the purchase of certified health care insurance, except that 
        after the purchase of said insurance the remaining assets are 
        to be distributed to the beneficiary at his election without 
        penalty.
            ``(4) Any assets remaining in a voucher account at the end 
        of the taxable calender year must be distributed to the 
        beneficiary of the account, except that in cases where no 
        purchase of certified health insurance was made by the account 
        for that taxable year such monies shall be returned to the 
        Treasury of the United States.
            ``(5) The Secretary, in consultation with the Secretary of 
        the Treasury, shall select trustees to administer individual 
        voucher accounts, or groups of accounts, in a manner prescribed 
        by regulation. The selection of the trustee shall--
                    ``(A) in the case of a voucher account, being 
                funded by an employer voucher payment (in part or 
                whole), be an individual or entity selected by the 
                Secretary after consultation with the employer making 
                the deposit to the account; and
                    ``(B) in the case of all other voucher accounts, be 
                an individual or entity selected by the Secretary based 
                upon the preference of the individual for which the 
                account is being established and the availability of 
                qualified trustees in the locality or State of said 
                individual.
            ``(6) A charge may be made to the account, by the trustee 
        of the account, to pay for reasonable and customary costs of 
        administration.
    ``(c) Employer Donations to Vouchers.--
            ``(1) In general.--Except as provided in this section, each 
        employer shall, in accordance with this title, deposit an 
        amount equal to the annual voucher deposit premium into the 
        individual employee's national voucher account for each of its 
        full-time employees no later than the 1st day of the eleventh 
        month preceding the calendar year in which the payment will be 
        used to purchase a certified health care insurance policy, 
        except that--
                    ``(A) with respect to each part-time employee each 
                employer shall, in accordance with this title, deposit 
                a payment into the individual employee's national 
                voucher account in an amount equal to the annual 
                voucher deposit premium as modified by the ratio of the 
                individual employee's gross pay to the gross pay of a 
                full-time employee (with similar work experience or 
                credentials) who performs same or similar work; and
                    ``(B) no deposit for a part-time employee shall be 
                in an amount less than 50% of the annual voucher 
                deposit premium for a full-time employee in the same 
                taxable year.
            ``(2) Application to seasonal and temporary employees.--In 
        the case of an employee designated as a seasonal or temporary 
        employee, whether a part-time or full-time employee, the 
        employer shall deposit a payment in an employee's national 
        voucher account in an amount equal to the annual voucher 
        deposit premium as modified by the ratio of the individual 
        employee's cumulated gross pay to the estimated cumulated gross 
        pay of an employee employed by the employer through the taxable 
        year (with similar work experience or credentials) who performs 
        same or similar work. Each employer shall designate, at the 
        time of initial employment and in a manner specified by the 
        Secretary, whether the individual is to be treated under this 
        title as a seasonal or temporary employee.
            ``(3) Treatment of employee's immediate family.--In the 
        case of a full-time employee or part-time employee, an employer 
        shall deposit a payment in the individual voucher accounts of 
        the employee's immediate family equal to the amount deposited 
        in said employee's account. The employer is not required to 
        provide deposits in the voucher accounts of a seasonal or 
        temporary employee's immediate family.
            ``(4) Cap on employer's deposit to voucher.--No deposit 
        shall be made, by an employer, to an employee's voucher account 
        or the voucher accounts of the employee's immediate family in 
        an amount greater than the annual voucher deposit premium.
            ``(5) Application to employers of different sizes.--
                    ``(A) In general.--The requirements of this title 
                shall apply to--
                            ``(i) large employers employing over 100 
                        full-time equivalent employees; and
                            ``(ii) medium employers employing 11 to 100 
                        full-time equivalent employees, as adjusted by 
                        paragraph (C) of this section.
                    ``(B) Exemptions.--The requirements of this title 
                shall not apply to--
                            ``(i) employers employing 10 or less full-
                        time equivalent employees; or
                            ``(ii) employers employing 100 or less 
                        full-time equivalent employees if they are a 
                        participant in a small employer health plan 
                        under Section 2204 of this title that provides 
                        such coverage to all full-time, part-time, or 
                        seasonal or temporary employees of the 
                        employer.
                    ``(C) Graduated scale for medium employers.--The 
                requirements of this title shall apply to medium 
                employers. Contributions to employees' voucher accounts 
                by a medium employer under the annual voucher deposit 
                premium shall be calculated as required by this title 
                but then shall be further adjusted by multiplying such 
                adjusted contribution by the medium employer ratio 
                (MER) to obtain the final adjusted annual voucher 
                deposit premium required to be contributed by the 
                medium employer, under the following graduated scale--

                Employer employing
                                                                       
                    full-time equivalent
                                                        Medium employer
                    employees
                                                            ratio (MER)
                            11 to 20.................         .10      
                            21 to 30.................         .20      
                            31 to 40.................         .30      
                            41 to 50.................         .40      
                            51 to 60.................         .50      
                            61 to 70.................         .60      
                            71 to 80.................         .70      
                            81 to 90.................         .80      
                            91 to 100................         .90      
                    ``(D) Calculation of medium employer ratio.--In the 
                calculation of full-time equivalent employees in 
                determining the medium employer ratio any decimal 
                values shall be rounded up to the next whole number.
                    ``(E) Five year retention of existing small 
                employer plans.--Any employer employing 10 or less 
                full-time equivalent employees and who provides health 
                care insurance or benefits to their employees (on the 
                date of enactment of this Act) shall maintain such 
                coverage, or coverage of equal value, until December 
                31, 1998. Any employer who discontinues or reduces such 
                coverage before that date shall be treated as a large 
                employer for the purposes of this title and become 
                subject to the requirements of this title through 
                December 31, 1998. The Secretary may grant a waiver to 
                this requirement, on a case by case basis, based on the 
                establishment by the petitioning employer that 
                continuation of the coverage is an--
                            ``(i) undue hardship to the employer; and
                            ``(ii) will be a primary cause in the 
                        discontinuation of the employer's business if 
                        the coverage is not terminated or modified.
                    ``(E) Effective date.--For the purposes of this 
                title, the requirements of this section shall become 
                effective--
                            ``(i) for large employers as of January 1 
                        of the 2nd year beginning after the date of 
                        enactment;
                            ``(ii) for medium employers, as of January 
                        1 of the 3rd year beginning after the date of 
                        enactment.
    ``(d) Federal Deposit to Voucher Accounts.--It shall be the duty of 
the Secretary of the Treasury, in consultation with the Secretary of 
Health and Human Services--
            ``(1) to make withdrawals from the General Fund of the 
        United States Treasury, to provide a deposit to every voucher 
        account in an amount equal to the annual voucher deposit 
        premium except that in the case where an employer is required 
        to make a deposit to the voucher account under subparagraph (c) 
        then the Secretary of the Treasury shall make no additional 
        deposit except that necessary to cause the amount within the 
        account to equal the annual voucher deposit premium;
            ``(2) to provide the deposit to every voucher account no 
        later than the 1st day of the eleventh month preceding the 
        calendar year in which the payment will be used to purchase a 
        certified health care insurance policy;
            ``(3) to immediately terminate any account which is unused 
        due to the death or ineligibility of the individual and return 
        all unused funds, less those amounts necessary to pay for the 
        reasonable and customary costs of the prior administration of 
        the account, to the General Fund of the United States Treasury; 
        and
            ``(4) set forth such other regulations, by either 
        Secretary, as necessary to ensure the effective administration 
        of each national voucher account.
    ``(e) Certification of Health Care Insurance Policies.--
            ``(1) The Secretary shall establish minimum standards and 
        requirements, for the certification of health care insurance 
        policies eligible to be purchased under this section.
            ``(2) The Secretary shall establish a procedure whereby 
        health care insurance policies may be certified by the 
        Secretary. Such procedure shall provide an opportunity for any 
        insurer to submit any such policy, and such additional data as 
        the Secretary finds necessary, to the Secretary for his 
        examination and for his certification thereof as meeting the 
        standard and requirements set forth in subparagraph (1). Such 
        certification shall remain in effect if the insurer files a 
        notarized statement with the Secretary no later than June 30 of 
        each year stating that the policy continues to meet such 
        standards and requirements and if the insurer submits such 
        additional data as the Secretary finds necessary to 
        independently verify the accuracy of such notarized statement. 
        Where the Secretary determines such a policy meets (or 
        continues to meet) such standards and requirements, he shall 
        authorize the insurer to have printed on such policy (but only 
        in accordance with such requirements and conditions as the 
        Secretary may prescribe) an emblem which the Secretary shall 
        cause to be designed for use as an indication that a policy has 
        received the Secretary's certifications. The Secretary shall 
        provide each State commissioner or superintendent of insurance 
        with a list of all the policies which have received his 
        certification.
            ``(3) No health care insurance policy may be certified 
        unless--
                    ``(A) the plan provides for benefits for all 
                required health services (as defined in section 
                2102(a)) of the Social Security Act;
                    ``(B) the plan does not impose cost-sharing with 
                respect to required health services in excess of the 
                deductibles and coinsurance permitted under part A of 
                title XVIII with respect to such services (not taking 
                into account any low-income assistance under part C of 
                such title);
                    ``(C) the plan does not deny, limit, or condition 
                the coverage under (or benefits of) the plan with 
                respect to required health services based on the health 
                status, claims experience, receipt of health care, 
                medical history, or lack of evidence of insurability, 
                of an individual, and may not exclude coverage with 
                respect to services related to treatment of a 
                preexisting condition; and
                    ``(D) a plan may be certified and include such 
                additional items and services as the insurer can 
                demonstrate to the satisfaction of the Secretary that 
                inclusion of such items and services will facilitate 
                appropriate hospital discharges or avoid unnecessary 
                hospitalization.
            ``(4) A self-insured plan or the plan of a health 
        maintenance organization may receive certification under this 
        section as a certified health care insurance policy.
    ``(f) Procedures for Health Insurance Enrollment.--
            ``(1) Election of coverage by individual.--
                    ``(A) Open enrollment period.--
                            ``(i) Beginning the 1st day of the eleventh 
                        month preceding the calendar year in which the 
                        health coverage is to be purchased and ending 
                        the last day of such month, the individual, for 
                        whom the account is established, shall through 
                        the election of a specific certified health 
                        care insurance policy cause the trustee of 
                        their individual voucher account to distribute 
                        a lump sum, or enter into a binding agreement 
                        to distribute funds on a regular basis (not to 
                        exceed the calendar year for which the 
                        insurance policy is limited), for the purchase 
                        of such coverage for the upcoming calendar 
                        year.
                            ``(ii) If the individual fails to elect the 
                        purchase of a specific insurance policy under 
                        subparagraph (i) then the election of the 
                        policy shall be made by the employer or 
                        Secretary under subparagraph (f)(2) of this 
                        part.
            ``(2) Election of coverage by employer or federal 
        government.--Upon failure of the individual, for whom the 
        account is established, to make an election, the employer (in 
        the case of full-time and part-time employees) shall make such 
        an election, or the Secretary in all other cases shall make 
        such an election, no later than 15 days after the failure of 
        the individual to make an election.
            ``(3) Duties of trustee.--
                    ``(A) Trustee as purchaser.--Under the authority of 
                this Title the elector (as determined under paragraph 
                (f)(1) or (2)) shall provide written notification to 
                the trustee of his election of a specific certified 
                insurance policy. Within 10 days of the date of receipt 
                of the notification of the election, the trustee shall 
                verify the certification of said policy through 
                reasonable and customary means after which the trustee 
                shall promptly distribute funds to the insurance 
                carrier for the purchase of said policy. Multiple 
                policies may be purchased if the coverage is not 
                redundant.
                    ``(B) Fiduciary duty of trustee.--As trustee of the 
                voucher account the trustee shall make available to the 
                individual (for whom the account is established) such 
                information as may be reasonably possible regarding the 
                process of election and return of the account's 
                remainder to said individual.
                    ``(C) Trustee as reporter.--The trustee of any 
                voucher account shall report, no later than 30 days 
                after the date of receipt of the notification of the 
                election, to the Secretary of the elector's election of 
                a specific certified insurance policy. Such report 
                shall include, but not limited thereto, the--
                            ``(i) description of the insurance policy 
                        and insurer;
                            ``(ii) cost of policy and date of payment;
                            ``(iii) designation of which elector made 
                        the election; and
                            ``(iv) such other information as prescribed 
                        by regulation.
    ``(g) Definitions.--For the purposes of this title:
            ``(1) Employee, employer, employment.--Except as otherwise 
        provided in this section, the terms `employer', `employee', and 
        `employment' have the same meanings as such terms have for 
        purposes of chapter 21 of the Internal Revenue Code of 1986.
            ``(2) Full-time employee.--The term `full-time employee' 
        means, with respect to an employer, an employee who normally 
        performs on a monthly basis at least 20 hours of service per 
        week for that employer.
            ``(3) Part-time employee.--The term `part-time employee' 
        means, with respect to an employer, an employee who is not a 
        full-time employee.
            ``(4) Seasonal or temporary employee.--The term `seasonal 
        or temporary employee' means, with respect to an employer, an 
        employee who is employed by the employer for not more than 4 
        months in any 12 month period; except that the Secretary may 
        extend such period for up to 6 months in any 12 month period in 
        the case of employment that is sporadic, irregular, and 
        seasonal in nature.
            ``(5) Employee's immediate family.--
                    ``(A) In general.--Except as provide in paragraph 
                (2), the term `employee's immediate family' means the 
                individual's spouse, and includes all the individual's 
                children
                    ``(B) Spouse.--The term `spouse' means, with 
                respect to an individual, the individual to which the 
                individual is married. Marital status shall be 
                determined in accordance with section 7703 of the 
                Internal Revenue Code of 1986.
                    ``(C) Child.--The term `child' means, with respect 
                to a person who is not a child, an individual--
                            ``(i) who is--
                                    ``(I) unmarried and under 18 years 
                                of age; or
                                    ``(II) unmarried and under 23 years 
                                of age and a full-time student; or
                                    ``(III) an unmarried, dependent 
                                child, regardless of age, who is 
                                incapable of self-support because of 
                                mental or physical disability; and
                            ``(ii)(I) who is the child of the 
                        individual or the individual's spouse; or
                            ``(II) who is the legal ward of the 
                        individual or the individual's spouse; and
                            ``(iii) who is not in the legal custody of 
                        another individual.
                The Secretary shall establish, by regulation, such 
                rules as are appropriate with respect to the treatment 
                of foster children, emancipated minors, children in the 
                process of adoption, and other unmarried individuals 
                under 23 years of age under similar circumstances as 
                children for purposes of this title.
            ``(6) Full-time equivalent employees.--The term `full-time 
        equivalent employees', with respect to an employer, means a 
        number equal to the total man hours of service for which an 
        employer has provided compensation in a calendar year divided 
        by the sum of 2080.
            ``(7) Annual voucher deposit premium.--The term `annual 
        voucher deposit premium' means an amount equal to $3200 for the 
        taxable year 1993. In the case of any taxable year beginning 
        after 1993, the annual voucher deposit premium shall be the 
        premium (which would be in effect under this title for the 
        taxable year beginning in the preceding calendar year) 
        increased by an amount no less than an amount equal to the 
        prior year's premium multiplied by the percentage increase in 
        the CPI for the previous 12 month period. In no year shall the 
        premium be less than 103% of the preceding year's annual 
        voucher deposit premium.
            ``(8) Insurance carrier.--The term `insurance carrier' 
        means a private entity that offers certified health insurance 
        (as defined by this title) to an individual; including 
        employers or labor organizations offering such policies, or the 
        trustees of a fund established by one or more employers or 
        labor organization (or combination thereof) for employees or 
        former employees (or combination thereof) of the labor 
        organizations.

                ``SMALL EMPLOYER HEALTH INSURANCE REFORM

    ``Sec. 2204. (a) In General.--
            ``(1) Each small employer carrier shall register with the 
        Secretary.
            ``(2) Nothing in paragraph (1) shall be construed as 
        preventing the applicable regulatory authority in a State from 
        requiring, in the case of carriers that are not self-insurance 
        carriers, such additional information in conjunction with, or 
        apart from, the registration required under paragraph (1) as 
        the applicable regulatory authority may be authorized to 
        require under State law.
    ``(b) Guaranteed Offering of Plan.--
            ``(1) A small employer carrier (hereafter referred to as 
        carrier) that offers a health plan to small employers located 
        in a community must offer the same plan to any other small 
        employer located in the community. Such requirement shall apply 
        on a continuous, year round basis.
            ``(2) A carrier may refuse to issue or renew or terminate a 
        plan only for--
                    ``(A) nonpayment of premiums; and
                    ``(B) fraud or misrepresentation.
    ``(c) Minimum Plan Period.--A carrier may not offer to, or issue 
with respect to, a small employer a small employer health plan with a 
term of less than 12 months.
    ``(d) Renewal and Rates.--
            ``(1) The small employer carrier of a small employer health 
        plan shall provide for notice, at least 30 days before the date 
        of expiration of the health plan, of the terms for renewal of 
        the plan. Except with respect to rates and administrative 
        changes, the terms of renewal (including benefits) shall be the 
        same as the terms of issuance.
            ``(2) The carrier may change the terms of such renewal, but 
        the premium rates charged with respect to such renewal shall be 
        the same as that for a new issue.
            ``(3) The period of renewal of each small employer health 
        plan shall be for a period of not less than 12 months.
    ``(e) Definitions.--
            ``(1) Small employer health plan.--The term `small employer 
        health plan' means an employment-related health plan insofar as 
        it offers a basic package of benefits, that equal or exceed the 
        requirements of Section 2202 of this Title, with respect to a 
        small employer.
            ``(2) Small employer carrier.--The term `small employer 
        carrier' means any carrier which offers small employer health 
        plans.
            ``(3) Small employer.--For the purposes of this section the 
        term `small employer' means any employer employing 100 or less 
        full-time equivalent employees.''.

SEC. 5. DEDUCTION FOR NATIONAL CARE VOUCHERS FOR SMALL EMPLOYERS.

    (a) In General.--Section 162 of the Internal Revenue Code of 1954 
(relating to trade or business expense) is amended by redesignating 
subsection (l) as subsection (m) and by inserting the following new 
subsection:
    ``(1) Deduction for Small Employers.--
            ``(1) The expenses paid or incurred by a small employer for 
        a certified health care insurance policy (as defined in section 
        2204 of title XXII of the Social Security Act) shall be allowed 
        as a deduction under this section at the rate of 125 percent of 
        the amount paid or incurred by the small employer (as defined 
        by title XXII of the Social Security Act) in the taxable year.
            ``(2) The deduction allowed to any small employer by reason 
        of this subsection for any taxable year shall not exceed the 
        portion of the taxable income of such employer for such taxable 
        year.''

SEC. 6. EQUITY TAX.

    (a) Section 310 of the Trade Act of 1974 (19 U.S.C. 2420) is 
amended by adding at the end the following new subsection:
    ``(e) High Cost Priority Foreign Country Designation.--
            ``(1) Mandatory identification.--For purposes of this 
        section, a country shall be identified by the Trade 
        Representative as a high cost priority foreign country with 
        respect to the priority practices of such foreign country, if--
                    ``(A) the amount of the trade deficit between the 
                United States and such country for the calendar year 
                for which a report under section 181 is submitted 
                exceeds 15 percent of the amount of the total trade 
                deficit of the United States for such calendar year; 
                and
                    ``(B) such country has not entered into a free 
                trade agreement with the United States.
            ``(2) Annual review.--Not later than the 30th day of 
        January for each calendar year after the date of enactment the 
        Trade Representative shall identify all high cost priority 
        foreign countries and provide such designation to the United 
        States Congress, and the respected committees of jurisdiction. 
        This list shall be reviewed accordingly each year to reflect 
        changes in the trade deficit between the United States and the 
        affected foreign country.
            ``(3) Imposition of equity tax.--
                    ``(A) Entries of merchandise of a country 
                designated as a high cost priority foreign country 
                shall be subject to the imposition of a 1 percent tax 
                to be levied upon the value of the merchandise.
                    ``(B) Merchandise subject to such tax which is 
                entered, or withdrawn from warehouse, for consumption 
                on or after the date of publication of the Trade 
                Representative's annual review of high cost priority 
                countries shall be subject to the imposition of the 1 
                percent tax to be levied upon the value of the 
                merchandise.
                    ``(C) The administering authority shall transfer 
                any funds collected under the authority of this section 
                to the General Fund of the United States, no later than 
                30 days from the date of collection.
            ``(4) Effective date.--This subsection shall be effective 
        upon date of enactment and shall remain in effect for calendar 
        years 1994 through 2005.''.
    (b) Equity Health Insurance Trust Fund.--
            (1) In general.--Subchapter A of chapter 98 of the Internal 
        Revenue Code of 1986 (relating to trust fund code) is amended 
        by adding at the end the following new section:

``SEC. 9511. EQUITY HEALTH INSURANCE TRUST FUND

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Equity Health 
Insurance Trust Fund'.
    ``(b) Transfers.--There are hereby appropriated to the Equity 
Health Insurance Trust Fund amounts equivalent to the taxes received in 
the Treasury after December 31, 1993, under section 310(e) of the Trade 
Act of 1974 (relating to high cost priority countries and imposition of 
equity tax).
    ``(c) Expenditures.--Amounts in the Equity Health Insurance Trust 
Fund shall be available to provide payments to national voucher 
accounts under title XXII of the Social Security Act.''.
            (2) Clerical amendment.--The table of section for such 
        subchapter A is amended by adding at the end the following new 
        item:

        ``Sec. 9511. Equity Health Insurance Trust Fund.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to amounts received after December 31, 1994.

                                 <all>

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