I

103D CONGRESS

1ST SESSION H. R. 2089

To promote the use of State-coordinated health insurance buying programs

and assist States in establishing Health Insurance Purchasing Cooperatives, through which small employers may purchase health insurance,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 12, 1993

Mr. BROWN of California introduced the following bill; which was referred

jointly to the Committees on Energy and Commerce, Ways and Means,

and the Judiciary

A BILL

To promote the use of State-coordinated health insurance

buying programs and assist States in establishing Health

Insurance Purchasing Cooperatives, through which small

employers may purchase health insurance, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Health Insurance

5 Purchasing Cooperatives Act’’.
2

•HR 2089 IH

1 SEC. 2. HEALTH INSURANCE PURCHASING COOPERATIVES

2 GRANT PROGRAM.

3 (a) IN GENERAL.—The Secretary shall award grants

4 to States, which submit applications and otherwise meet

5 the requirements of this Act, to assist such States in es6 tablishing coordinated buying programs through which

7 small employers may purchase health insurance for their

8 employees.

9 (b) APPLICATION REQUIREMENTS.—To be eligible to

10 receive a grant under this section, a State shall prepare

11 and submit to the Secretary an application in such form,

12 at such time, and containing such information, certifi13 cations, and assurances as the Secretary shall reasonably

14 require, including a certification that—

15 (1) the State has, through State law, executive

16 order, or regulation, initiated the steps necessary to

17 establish a coordinated buying program that meets

18 the requirements of subsection (d), through which

19 each small employer in the State desiring to pur20 chase health insurance for its employees shall pur21 chase such insurance; or

22 (2) in the case of a State which the Secretary

23 identifies, in consultation with the National Associa24 tion of Insurance Commissioners, as—

25 (A) requiring State legislation (other than

26 legislation appropriating funds) to establish a
3

•HR 2089 IH

1 coordinated buying program that meets the re2 quirements of subsection (d); and

3 (B) having a legislature that does not meet

4 during the first year after the date of enact5 ment of this Act in a legislative session in

6 which such legislation may be considered;

7 the State has established a plan, to be fully imple8 mented not later than 2 years after the date on

9 which the grant is awarded to such State by the

10 Secretary, for the establishment of a coordinated

11 buying program that meets the requirements of sub12 section (d).

13 (c) USE OF FUNDS.—Amounts awarded under this

14 section may be used to finance the administrative costs

15 associated with planning, developing, and implementing a

16 coordinated buying program, comprised of one or more

17 Health Insurance Purchasing Cooperatives, for small em18 ployers. Such administrative costs may include the costs

19 associated with—

20 (1) engaging in education and outreach efforts

21 to inform small employers, carriers, and the public

22 about the coordinated buying program;

23 (2) soliciting bids and negotiating with carriers

24 to make available health benefit plans, consistent

25 with section 3, through the coordinated buying pro-
4

•HR 2089 IH

1 gram and one or more Health Insurance Purchasing

2 Cooperatives; and

3 (3) preparing and disseminating the docu4 mentation required by Federal agencies to certify

5 participation in the coordinated buying program and

6 one or more Health Insurance Purchasing Coopera7 tives.

8 (d) COORDINATED BUYING PROGRAM.—To receive

9 funding under this section, a State coordinated buying

10 program shall—

11 (1) be authorized and enforced under State law,

12 executive order, or regulation as the sole mechanism

13 through which health insurance for employees of

14 small employers shall be purchased in such State;

15 (2) provide each small employer in the State

16 with access to health insurance for its employees and

17 their dependents, through one or more Health Insur18 ance Purchasing Cooperatives qualified under sub19 section (e);

20 (3) require that each Health Insurance Pur21 chasing Cooperative participating in the State co22 ordinated buying program meet the requirements of

23 section 5 with respect to reporting data to a Re24 gional Data Collection Center and participating in

25 the National Health Insurance Data System; and
5

•HR 2089 IH

1 (4) meet such other criteria as reasonably re2 quired by the Secretary, the National Health Board,

3 or mandated under this Act.

4 (e) HEALTH INSURANCE PURCHASING COOPERA5 TIVE.—

6 (1) REQUIREMENTS.—To be a qualified Health

7 Insurance Purchasing Cooperative an entity shall—

8 (A) be a nonprofit entity established and

9 regulated in accordance with State law in a

10 manner that will ensure an economy of scale

11 based on the State’s geographic and demo12 graphic characteristics;

13 (B) be designated by the State as the ex14 clusive agent for purchasing, coordinating, and

15 administering services among carriers on behalf

16 of small employers and their employees within

17 a defined geographic area (hereafter referred to

18 in this section as a ‘‘district’’);

19 (C) except as provided under paragraph

20 (3), certify that it will not contract with any

21 carriers that deny, limit, or condition coverage

22 under (or benefits of) the plan based on the

23 health status, claims experience, receipt of

24 health care, medical history or lack of evidence

25 of insurability, of an individual;
6

•HR 2089 IH

1 (D) after the date that is 2 years after the

2 date of enactment of this Act, certify that it

3 will not contract with any carriers that do not

4 meet the minimum benefits requirements estab5 lished by the National Health Board under sec6 tion 4;

7 (E) not less than annually, hold an open

8 enrollment period for all employees covered by

9 the Health Insurance Purchasing Cooperative

10 health benefit plans;

11 (F) use adjusted community ratings (under

12 which the only factors that may be applied are

13 age, gender, and geography within a district) to

14 determine the cost for each covered employee or

15 dependent; and

16 (G) meet such other criteria as reasonably

17 required by the State or the Secretary, or man18 dated under this Act.

19 (2) ACTIVITIES.—Within its district, each

20 Health Insurance Purchasing Cooperative shall—

21 (A) provide for the comprehensive purchas22 ing of health insurance and services for all

23 small employers;

24 (B) act as an agent for the small employ25 ers and, based on the recommendations of the
7

•HR 2089 IH

1 National Health Board, assist the small em2 ployers, employees, and dependents in determin3 ing appropriate health benefit plans;

4 (C) solicit bids from and contract with car5 riers for specific health benefit plans, which

6 shall include those benefits determined by the

7 National Health Board under section 4, and,

8 notwithstanding any other provision of Federal

9 or State law—

10 (i) hold confidential proprietary infor11 mation upon which estimates on bids are

12 derived; and

13 (ii) issue contracts only to those car14 riers providing both cost effective and

15 quality health benefits, plans, and services;

16 (D) administer all aspects of health insur17 ance coverage for all small employers, their em18 ployees and dependents, including routine

19 health benefits, COBRA benefits, relevant Fed20 eral health insurance earned income tax credits,

21 and the collection of premiums paid under sec22 tion 1906 of the Social Security Act;

23 (E) inform employees and dependents

24 about their benefits, rights, and responsibilities

25 and enable employees and dependents to select
8

•HR 2089 IH

1 benefits based on standardized plans that com2 pete in cost and quality; and

3 (F) in a timely fashion, report, as required

4 by section 5, all relevant data, including health

5 outcomes data, to the appropriate Regional

6 Health Insurance Data Collection Center.

7 (3) EXCLUSION OF COVERAGE.—Notwithstand8 ing paragraph (1)(C), a Health Insurance Purchas9 ing Cooperative may, in accordance with this sub10 section, contract with a carrier for a health benefit

11 plan that limits exclusion of coverage, with respect

12 to services related to treatment of a preexisting con13 dition, to a period not exceeding 6 months. The ex14 clusion of coverage shall not apply to services fur15 nished to newborns.

16 (f) RELATION TO OTHER LAWS.—

17 (1) ANTITRUST LAWS.—Notwithstanding any

18 provision of the antitrust laws, it shall not be consid19 ered a violation of the antitrust laws for a State, in

20 accordance with this section, to develop a State co21 ordinated buying program comprised of Health In22 surance Purchasing Cooperatives, or for any carrier,

23 in accordance with this section, to participate in

24 such a program or Cooperative.
9

•HR 2089 IH

1 (2) DEFINITION.—For purposes of this section,

2 the term ‘‘antitrust laws’’ means—

3 (A) the Act entitled ‘‘An Act to protect

4 trade and commerce against unlawful restraints

5 and monopolies’’, approved July 2, 1890, com6 monly known as the ‘‘Sherman Act’’ (26 Stat.

7 209; chapter 647; 15 U.S.C. 1 et seq.);

8 (B) the Federal Trade Commission Act,

9 approved September 26, 1914 (38 Stat. 717;

10 chapter 311; 15 U.S.C. 41 et seq.);

11 (C) the Act entitled ‘‘An Act to supple12 ment existing laws against unlawful restraints

13 and monopolies, and for other purposes’’, ap14 proved October 15, 1914, commonly known as

15 the ‘‘Clayton Act’’ (38 Stat. 730; chapter 323;

16 15 U.S.C. 12 et seq.; 18 U.S.C. 402, 660,

17 3285, 3691; 29 U.S.C. 52, 53); and

18 (D) any State antitrust laws that would

19 prohibit the activities described in paragraph

20 (1).

21 (g) AUTHORIZATION OF APPROPRIATIONS.—There

22 are authorized to be appropriated to carry out this section,

23 $25,000,000 for fiscal year 1994, and $30,000,000 for

24 each of the fiscal years 1995 through 1998.
10

•HR 2089 IH

1 SEC. 3. NATIONAL HEALTH BOARD.

2 (a) IN GENERAL.—There is hereby established a Na3 tional Health Board (hereafter referred to in this section

4 as the ‘‘Board’’) which shall be composed of 11 members

5 to be appointed by the President by and with the advice

6 and consent of the Senate not later than 6 months after

7 the date of enactment of this Act.

8 (b) MEMBERSHIP.—

9 (1) REPRESENTATION.—The membership of the

10 Board shall include individuals with national rec11 ognition for their expertise in health insurance,

12 health economics, health care provider reimburse13 ment, and related fields. In appointing individuals

14 under subsection (a), the President shall assure rep15 resentation of consumers of health services, large

16 and small employers, State and local governments,

17 labor organizations, and health care providers and

18 carriers.

19 (2) CHAIRPERSON.—The members of the Board

20 shall elect a Chairperson.

21 (3) TERMS.—Members of the Board shall be

22 appointed to serve for terms of 6 years, except that

23 the terms of the members first appointed shall be

24 staggered so that the terms of no more than 4 mem25 bers expire in any year. The term of the Chairperson

26 shall be coincident with the term of the President.
11

•HR 2089 IH

1 Individuals appointed to fill a vacancy created in the

2 Board shall be appointed for the remainder of the

3 term.

4 (c) DUTIES.—

5 (1) PRECEPTS.—The Board shall establish Co6 ordinated Buying Program Precepts, that shall set

7 forth criteria for—

8 (A) establishing a uniform data system

9 that will assist in designating qualified Health

10 Insurance Purchasing Cooperatives and car11 riers;

12 (B) determining and implementing a sys13 tem for the collection of relevant health out14 comes data, including quality monitors, func15 tional status, expense reporting methods

16 (including the costs associated with providing

17 services within State coordinated buying pro18 gram), demographic and behavioral measures,

19 and changes in clinical conditions as a result of

20 therapeutic interventions expressed in Quality

21 Life Years in a manner that assumes confiden22 tiality of patient information; and

23 (C) determining and revising, if necessary,

24 appropriate minimum benefit requirements of a

25 qualified health benefit plan, consistent with
12

•HR 2089 IH

1 section 4 and developing additional benefit

2 plans as necessary to provide more extensive

3 benefits.

4 (2) SCIENTIFIC BASIS.—To the extent prac5 ticable, the precepts of the Board shall be derived

6 from an evaluation of the extant scientific literature

7 and outcome data collected under this Act.

8 (3) ASSISTANCE TO SECRETARY.—The Board

9 shall make written recommendations on at least an

10 annual basis to the Secretary and the States in the

11 planning, development, and implementation of all

12 components of the National Health Insurance Data

13 System established under section 5, including the

14 determination of health outcomes data to be col15 lected through the standardized universal electronic

16 card, and shall provide such other assistance as the

17 Secretary or the States may request.

18 (d) MISCELLANEOUS.—

19 (1) AUTHORITY.—The Board may—

20 (A) employ and fix the compensation of an

21 Executive Director and solicit other personnel

22 (not to exceed 15) as may be necessary to carry

23 out its duties (without regard to the provisions

24 of title 5, United States Code, governing ap25 pointments in the competitive service);
13

•HR 2089 IH

1 (B) seek such assistance and support as

2 may be required in the performance of its du3 ties from appropriate Federal departments and

4 agencies;

5 (C) enter into contracts or make other ar6 rangements, as may be necessary for the con7 duct of the work of the Board (without regard

8 to section 3709 of the Revised Statutes (41

9 U.S.C. 5)); and

10 (D) make advance, progress, and other

11 payments which relate to the work of the

12 Board.

13 (2) COMPENSATION.—While serving on the

14 business of the Board (including traveltime), a mem15 ber of the Board shall be entitled to compensation

16 at the per diem equivalent of the rate provided for

17 level IV of the Executive Schedule under section

18 5315 of title 5, United States Code, and while so

19 serving away from the member’s home and regular

20 place of business, a member may be allowed travel

21 expenses, as authorized by the Chairperson of the

22 Board.

23 (3) ACCESS TO INFORMATION, ETC.—The

24 Board shall have access to such relevant information

25 and data as may be available from appropriate Fed-
14

•HR 2089 IH

1 eral agencies and shall assure that its activities, es2 pecially the conduct of original research and medical

3 studies, are coordinated with the activities of Fed4 eral agencies. The Board shall be subject to periodic

5 audit by the General Accounting Office.

6 (4) AUTHORIZATION OF APPROPRIATIONS.—

7 There are authorized to be appropriated, $500,000

8 for each of the fiscal years 1994 through 1998.

9 SEC. 4. HEALTH BENEFITS.

10 (a) ESTABLISHMENT OF REQUIREMENTS.—Not later

11 than 18 months after the date of enactment of this Act,

12 the National Health Board shall establish minimum bene13 fit requirements for health benefit plans offered through

14 Health Insurance Purchasing Cooperatives. Such mini15 mum benefits shall include—

16 (1) inpatient and outpatient hospital care, ex17 cept that treatment for a mental disorder is subject

18 to the special limitations described in paragraph

19 (6)(A);

20 (2) inpatient and outpatient physician services,

21 except that psychotherapy or counseling for a mental

22 disorder is subject to the special limitations de23 scribed in paragraph (6)(B);

24 (3) diagnostic tests;
15

•HR 2089 IH

1 (4) prenatal care and well-baby care provided to

2 children who are 1 year of age or younger;

3 (5) preventive and early intervention services,

4 including—

5 (A) well child care;

6 (B) pap smears; and

7 (C) mammograms; and

8 (6)(A) inpatient hospital care for a mental dis9 order for not less than 45 days per year, except that

10 days of partial hospitalization, residential care, or

11 outpatient treatment may be substituted for days of

12 inpatient care according to a ratio established by the

13 Board; and

14 (B) outpatient psychotherapy and counseling

15 for a mental disorder for not less than 20 visits per

16 year provided by a provider who is acting within the

17 scope of State law and who—

18 (i) is a physician; or

19 (ii) meets the standards of subsection

20 (e)(2)(B) and is a duly licensed or certified clin21 ical psychologist or a duly licensed or certified

22 clinical social worker, a duly licensed or cer23 tified equivalent mental health professional, or

24 a clinic or center providing duly licensed or cer25 tified mental health services.
16

•HR 2089 IH

1 (b) EXCEPTIONS.—Subsection (a) shall not be con2 strued as requiring the Board to specify that a plan in3 clude payment for—

4 (1) items and services that are not medically

5 necessary; or

6 (2) experimental services and procedures, ex7 cept that the Board may include coverage of routine

8 medical costs associated with peer-reviewed and ap9 proved protocols conducted in connection with peer10 reviewed and approved research programs, pursuant

11 to standards established by the Board.

12 (c) AMOUNT, SCOPE, AND DURATION OF CERTAIN

13 BENEFITS.—Except as provided in subsection (b), a

14 health benefit plan shall place no limits on the amount,

15 scope, or duration of benefits described in paragraphs (1)

16 through (3) of subsection (a).

17 (d) LIMITATIONS.—

18 (1) PANELS AND MANAGED CARE SYSTEMS.—

19 Nothing in this section or this Act shall prohibit a

20 health benefit plan from providing benefits for the

21 items and services described in this section through

22 a managed care system, and from selecting particu23 lar health care providers or types, classes, or cat24 egories of health care providers to participate in

25 such managed care system. Such managed care sys-
17

•HR 2089 IH

1 tem shall provide reasonable access, as defined by

2 the Board, to care by plan enrollees.

3 (2) DIFFERENT LEVELS OF PAYMENTS.—Noth4 ing in this section or this Act shall prohibit a health

5 benefit plan from establishing a different level of

6 payments for reimbursement for different health

7 care providers furnishing the benefits for the items

8 and services described in this section.

9 (3) DENIAL OF PAYMENT TO EXCLUDED PRO10 VIDERS.—Nothing in this section or this Act shall

11 require a health benefit plan to make payment to

12 any health care provider that is excluded from par13 ticipation in any Federal health care program.

14 (e) MENTAL HEALTH CARE.—

15 (1) INPATIENT CARE.—Subject to the provi16 sions of subsection (d), inpatient hospital care de17 scribed in subsection (a)(6)(A) shall include reim18 bursement for professional care provided to the indi19 vidual while the individual is receiving such inpatient

20 care, by a physician or duly licensed or certified clin21 ical psychologist operating within the scope of prac22 tice of the physician or psychologist, as determined

23 appropriate under State law. Nothing in this sub24 section shall be construed to modify hospital prac-
18

•HR 2089 IH

1 tices with regard to scope of practice, admitting

2 privileges, or billing arrangements.

3 (2) OUTPATIENT CARE.—

4 (A) USE OF PROVIDERS.—Subject to the

5 provisions of subsection (d), a health benefit

6 plan that provided benefits with respect to out7 patient psychotherapy described in subsection

8 (a)(6)(B) prior to January 1, 1994, shall not be

9 required under such subsection to provide bene10 fits for outpatient psychotherapy provided by

11 any health care provider (or type, class, or cat12 egory of health care provider) described in sub13 section (a)(6)(B)(ii), other than duly licensed or

14 certified clinical psychologists and health care

15 providers being used by the plan on January 1,

16 1994.

17 (B) STANDARDS FOR CERTAIN PROVID18 ERS.—The Board shall establish standards that

19 providers referred to in subsection (a)(6)(B)(ii)

20 must meet to be eligible for payment under a

21 health benefit plan and such standards shall re22 quire that such providers have training and

23 education equivalent to a licensed clinical social

24 worker (as defined in title XVIII of the Social

25 Security Act).
19

•HR 2089 IH

1 (f) ADDED BENEFIT PLANS.—Not later than 24

2 months after the date of enactment of this Act, the Board

3 shall establish minimum benefit requirements for two ad4 ditional health benefit plans that—

5 (1) shall provide benefits more extensive or

6 more innovative than those provided by the plan de7 veloped under subsection (a); and

8 (2) may be compared on the basis of cost and

9 quality outcome measures.

10 (g) STUDIES.—

11 (1) INITIAL REPORT.—Not later than 3 years

12 after the date of enactment of this Act, the Board

13 shall—

14 (A) review the appropriateness of the mini15 mum benefits and services required to be cov16 ered under subsection (a); and

17 (B) prepare and submit to the Secretary

18 and the appropriate committees of Congress a

19 report concerning the cost-effectiveness and de20 sirability of such benefits and services and mak21 ing recommendations for changes in the list of

22 such benefits and services.

23 (2) BIENNIAL REPORT.—Not later than 2 years

24 after the date on which the report is submitted

25 under paragraph (1), and every 2 years thereafter,
20

•HR 2089 IH

1 the Board shall prepare and submit to the Secretary

2 and the appropriate committees of Congress a report

3 updating the preceding report and reviewing, con4 sistent with paragraph (1), the additional benefits

5 and services included in the plans developed under

6 subsection (f).

7 (h) EXEMPTION FROM HMO REQUIREMENTS.—Sec8 tion 1301 of the Public Health Service Act (42 U.S.C.

9 300e) is amended by adding at the end thereof the follow10 ing new subsection:

11 ‘‘(d) The provisions of this title relating to health

12 services offered by a health maintenance organization shall

13 not apply with respect to those health maintenance organi14 zations that provide services that meet the requirements

15 for health insurance plans offered through Health Insur16 ance Purchasing Cooperatives under section 4 of the

17 Health Insurance Purchasing Cooperatives Act.’’.

18 SEC. 5. NATIONAL HEALTH INSURANCE DATA SYSTEM.

19 (a) IN GENERAL.—Using advanced technologies to

20 the maximum extent practicable, the Secretary shall estab21 lish and maintain a National Health Insurance Data Sys22 tem, which shall be comprised of—

23 (1) a centralized National Data Base for

24 Health Insurance and Health Outcomes Informa25 tion;
21

•HR 2089 IH

1 (2) a network of no more than five Regional

2 Health Insurance Data Collection Centers; and

3 (3) a standardized, universal mechanism for

4 electronically processing health insurance and health

5 outcomes data.

6 (b) NATIONAL DATA BASE FOR HEALTH INSURANCE

7 INFORMATION.—The National Data Base for Health In8 surance Information shall—

9 (1) be centrally located;

10 (2) rely on advanced technologies to the maxi11 mum extent practicable; and

12 (3) be readily accessible by each State coordi13 nated buying program for data input and retrieval.

14 (c) REGIONAL HEALTH INSURANCE DATA COLLEC15 TION CENTERS.—The Secretary shall designate not more

16 than five regional centers, to be located throughout the

17 United States, for the initial collection and analysis of

18 data on each State coordinated buying program, as de19 scribed in section 3(c)(1)(B), and such other information

20 as determined useful to the Secretary or the National

21 Health Board. The regional centers shall transmit relevant

22 data, as determined appropriate by the Secretary and the

23 National Health Board, to the National Data Base for

24 Health Insurance and Health Outcomes Information.
22

•HR 2089 IH

1 (d) ELECTRONIC DATA COLLECTION CARD.—The

2 Secretary, upon the recommendation of the National

3 Health Board, shall—

4 (1) establish uniform billing and claims forms

5 and mandatory reporting requirements, including in6 formation on member eligibility, benefits, use, out7 comes, and efficacy, which shall be adopted for use

8 by each State and State coordinated buying program

9 receiving funding under section 2; and

10 (2) ensure that no State receives funding under

11 this Act if carriers in such State do not agree to

12 issue to each participant in the State coordinated

13 buying program an electronic data processing card

14 approved by the Secretary that shall—

15 (A) contain information on billing, eligi16 bility, and other financial, administrative, and

17 health outcomes matters, as determined nec18 essary by the Secretary and the National

19 Health Board, which can be conveyed electroni20 cally to a regional data processing center; and

21 (B) enable health care providers to enter

22 information into a participant’s file concerning

23 administrative matters, treatment, such as di24 agnosis based on standard codes, and outcome,

25 except that participating health care providers
23

•HR 2089 IH

1 must agree to provide data in standard format,

2 which shall be established by the Secretary and

3 the National Health Board.

4 (e) RELIGIOUS OBJECTIONS.—Nothing in this Act

5 shall be construed to require any State coordinated buying

6 program or Health Insurance Purchasing Cooperative to

7 compel any person to undergo any medical screening, ex8 amination, diagnosis, or treatment or to accept any other

9 health care or services provided under a health benefit

10 plan for any purpose (other than for the purpose of discov11 ering and preventing the spread of infection or contagious

12 disease or for the purpose of protecting environmental

13 health), if such person objects (or, in case such person

14 is a child, his parent or guardian objects) thereto on

15 religious grounds.

16 (f) CONFIDENTIALITY.—The Secretary, upon the rec17 ommendation of the National Health Board, shall ensure

18 that all patient information collected under this section is

19 managed so that confidentiality is protected.

20 (g) AUTHORIZATION OF APPROPRIATIONS.—There

21 shall be authorized to be appropriated, annually,

22 $1,000,000 for fiscal years 1994 through 1998.

23 SEC. 6. DEFINITIONS.

24 As used in this Act:
24

•HR 2089 IH

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

2 person or entity that offers a health benefit plan,

3 whether through insurance or otherwise, including a

4 licensed insurance company, a prepaid hospital or

5 medical service plan, or a health maintenance

6 organization.

7 (2) ELIGIBLE EMPLOYEE.—The term ‘‘eligible

8 employee’’ means, with respect to an employer, an

9 employee who normally performs on a monthly basis

10 at least 30 hours of service per week for that

11 employer.

12 (3) HEALTH BENEFIT PLAN.—The term

13 ‘‘health benefit plan’’ means any hospital or medical

14 service policy or certificate, hospital or medical serv15 ice plan contract, or health maintenance organiza16 tion group contract, but does not include any of the

17 following offered by a carrier—

18 (A) accident only, dental only, disability

19 only insurance, or long-term care only

20 insurance;

21 (B) coverage issued as a supplement to li22 ability insurance;

23 (C) workmen’s compensation or similar in24 surance; or
25

•HR 2089 IH

1 (D) automobile medical-payment

2 insurance.

3 (4) HEALTH MAINTENANCE ORGANIZATION.—

4 The term ‘‘health maintenance organization’’ has the

5 meaning given the term ‘‘eligible organization’’ in

6 section 1876(b) of the Social Security Act.

7 (5) NAIC.—The term ‘‘NAIC’’ means the Na8 tional Association of Insurance Commissioners.

9 (6) PREEXISTING CONDITION.—The term ‘‘pre10 existing condition’’ means, with respect to coverage

11 under a health benefit plan issued to a small em12 ployer, employee or dependent by a carrier, a condi13 tion which has been diagnosed or treated during the

14 3-month period ending on the day before the first

15 date of such coverage (without regard to any waiting

16 period).

17 (7) SECRETARY.—The term ‘‘Secretary’’ means

18 the Secretary of Health and Human Services.

19 (8) SMALL EMPLOYER.—The term ‘‘small em20 ployer’’ means, with respect to a calendar year, an

21 employer that normally employs at least 1 but less

22 than 51 eligible employees on a typical business day.

23 For the purposes of this paragraph, the term ‘‘em24 ployer’’ includes a self-employed individual.
26

•HR 2089 IH

1 SEC. 7. INCREASE IN DEDUCTIBLE HEALTH INSURANCE

2 COSTS FOR SELF-EMPLOYED INDIVIDUALS

3 FOR INSURANCE PURCHASED THROUGH A

4 HEALTH INSURANCE PURCHASING

5 COOPERATIVE.

6 (a) IN GENERAL.—Paragraph (1) of section 162(l)

7 of the Internal Revenue Code of 1986 (relating to special

8 rules for health insurance costs of self-employed individ9 uals) is amended by striking ‘‘equal to’’ and all that fol10 lows and inserting the following: ‘‘equal to—

11 ‘‘(A) 100 percent of the amount paid dur12 ing the taxable year for insurance which is pur13 chased through a Health Insurance Purchasing

14 Cooperative under the Health Insurance Pur15 chasing Cooperatives Act and which constitutes

16 medical care for the taxpayer, his spouse, and

17 dependents, and

18 ‘‘(B) 25 percent of the amount paid during

19 the taxable year for insurance not described in

20 subparagraph (A) which constitutes medical

21 care for the taxpayer, his spouse, and depend22 ents.’’.

23 (b) PERMANENT DEDUCTION.—Section 162(l) of

24 such Code is amended by striking paragraph (6).
27

•HR 2089 IH

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

2 this section shall apply to taxable years beginning after

3 December 31, 1993.

Æ

HR 2089 IH——2

HR 2089 IH——3