100
•HR 3080 SC2
‘‘(c) The Secretary shall prescribe, as an alternative
method for distributing summary plan descriptions in
order to meet the requirements of section 104(b)(1) in the
case of multiple employer welfare arrangements providing
benefits consisting of medical care described in section
607(1), a means of distribution of such descriptions by
participating employers.’’.
(d) CLERICAL AMENDMENT.—The table of contents
in section 1 of the Employee Retirement Income Security
Act of 1974 is amended by inserting after the item relat-
ing to section 608 the following new items:
‘‘PART 7—MULTIPLE EMPLOYER HEALTH PLANS
‘‘Sec. 701. Definitions.
‘‘Sec. 702. Exempted multiple employer welfare arrangements treated as em-
ployee welfare benefit plans and exempt from certain restric-
tions on preemption.
‘‘Sec. 703. Exemption procedure.
‘‘Sec. 704. Eligibility requirements.
‘‘Sec. 705. Additional requirements applicable to exempted arrangements.
‘‘Sec. 706. Disclosure to participating employers by arrangements providing
medical care.
‘‘Sec. 707. Maintenance of reserves.
‘‘Sec. 708. Corrective actions.
‘‘Sec. 709. Expiration, suspension, or revocation of exemption.
‘‘Sec. 710. Review of actions of the Secretary.’’.
SEC. 1212. CLARIFICATION OF SCOPE OF PREEMPTION
RULES.
(a) IN GENERAL.—Section 514(b)(6)(A)(ii) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1144(b)(6)(A)(ii)) is amended by inserting ‘‘, but
only, in the case of an arrangement which provides medi-
cal care described in section 607(1) and with respect to
101
•HR 3080 SC2
which an exemption under part 7 is not in effect,’’ before
‘‘to the extent not inconsistent with the preceding sections
of this title’’.
(b) CROSS-REFERENCE.—Section 514(b)(6) of such
Act (29 U.S.C. 1144(b)(6)) is amended by adding at the
end the following new subparagraph:
‘‘(E) For additional rules relating to exemption from
subparagraph (A)(ii) of multiple employer welfare ar-
rangements providing medical care, see part 7.’’.
SEC. 1213. CLARIFICATION OF TREATMENT OF SINGLE EM-
PLOYER ARRANGEMENTS.
Section 3(40)(B) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002(40)(B)) is amend-
ed—
(1) in clause (i), by inserting ‘‘for any plan year
of any such plan, or any fiscal year of any such
other arrangement,’’ after ‘‘single employer’’, and by
inserting ‘‘during such year or at any time during
the preceding 1-year period’’ after ‘‘common con-
trol’’;
(2) in clause (iii), by striking ‘‘common control
shall not be based on an interest of less than 25 per-
cent’’ and inserting ‘‘an interest of greater than 25
percent may not be required as the minimum inter-
102
•HR 3080 SC2
est necessary for common control’’, and by striking
‘‘and’’ at the end,
(3) by redesignating clause (iv) as clause (v),
and
(4) by inserting after clause (iii) the following
new clause:
‘‘(iv) in determining, after the application of
clause (i), whether benefits are provided to employ-
ees of two or more employers, the arrangement shall
be treated as having only 1 participating employer
if, at the time the determination under clause (i) is
made, the number of individuals who are employees
and former employees of any one participating em-
ployer and who are covered under the arrangement
is greater than 95 percent of the aggregate number
of all individuals who are employees or former em-
ployees of participating employers and who are
covered under the arrangement.’’.
SEC. 1214. CLARIFICATION OF TREATMENT OF CERTAIN
COLLECTIVELY 
BARGAINED 
ARRANGE-
MENTS.
(a) IN GENERAL.—Section 3(40)(A)(i) of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1002(40)(A)(i)) is amended to read as follows:
103
•HR 3080 SC2
‘‘(i) under or pursuant to one or more collective
bargaining agreements,’’.
(b) LIMITATIONS.—Section 3(40) of such Act (29
U.S.C. 1002(40)) is amended by adding at the end the
following new subparagraphs:
‘‘(C) Clause (i) of subparagraph (A) shall
apply only if—
‘‘(i) the plan or other arrangement,
and the employee organization or any other
entity sponsoring the plan or other ar-
rangement, do not—
‘‘(I) utilize the services of any li-
censed insurance agent or broker for
soliciting or enrolling employers or in-
dividuals as participating employers or
covered individuals under the plan or
other arrangement, or
‘‘(II) pay a commission or any
other type of compensation to a per-
son that is related either to the vol-
ume or number of employers or indi-
viduals solicited or enrolled as partici-
pating employers or covered individ-
uals under the plan or other arrange-
ment, or to the dollar amount or size
104
•HR 3080 SC2
of the contributions made by partici-
pating employers or covered individ-
uals to the plan or other arrangement,
‘‘(ii) not less than 85 percent of the
covered individuals under the plan or other
arrangement are individuals who—
‘‘(I) are employed within a bar-
gaining unit covered by at least one of
the collective bargaining agreements
with a participating employer (or are
covered on the basis of an individual’s
employment in such a bargaining
unit), or
‘‘(II) are present or former em-
ployees of the sponsoring employee or-
ganization, of an employer who is or
was a party to at least one of the col-
lective bargaining agreements, or of
the plan or other arrangement or a
related plan or arrangement (or are
covered on the basis of such present
or former employment),
‘‘(iii) the plan or other arrangement
does not provide benefits to individuals
(other than individuals described in clause
105
•HR 3080 SC2
(ii)(II)) who work outside the standard
metropolitan statistical area in which the
sponsoring 
employee 
organization 
rep-
resents employees (or to individuals (other
than 
individuals 
described 
in 
clause
(ii)(II)) on the basis of such work by oth-
ers), except that in the case of a sponsor-
ing employee organization that represents
employees who work outside of any stand-
ard metropolitan statistical area, this
clause shall be applied by reference to the
State in which the sponsoring organization
represents employees,
‘‘(iv) the employee organization or
other entity sponsoring the plan or other
arrangement certifies to the Secretary each
year, in a form and manner which shall be
prescribed in regulations of the Sec-
retary—
‘‘(I) that the plan or other ar-
rangement meets the requirements of
clauses (i), (ii), and (iii), and
‘‘(II) if, for any year, 10 percent
or more of the covered individuals
under the plan are individuals not de-
106
•HR 3080 SC2
scribed in subclause (I) or (II) of
clause (ii), the total number of cov-
ered individuals and the total number
of covered individuals not so de-
scribed.
‘‘(D)(i) Clause (i) of subparagraph (A)
shall not apply to a plan or other arrangement
that is established or maintained pursuant to
one or more collective bargaining agreements
which the National Labor Relations Boards de-
termines to have been negotiated or otherwise
agreed to in a manner or through conduct
which violates section 8(a)(2) of the National
Labor Relations Act (29 U.S.C. 158(a)(2)).
‘‘(ii)(I) Whenever a State insurance com-
missioner has reason to believe that this sub-
paragraph is applicable to part or all of a plan
or other arrangement, the State insurance com-
missioner may file a petition with the National
Labor Relations Board for a determination
under clause (i), along with sworn written testi-
mony supporting the petition.
‘‘(II) The Board shall give any such peti-
tion priority over all other petitions and cases,
other than other petitions under subclause (I)
107
•HR 3080 SC2
or cases given priority under section 10 of the
National Labor Relations Act (29 U.S.C. 160).
‘‘(III) The Board shall determine, upon
the petition and any response, whether, on the
facts before it, the plan or other arrangement
was negotiated, created, or otherwise agreed to
in a manner or through conduct which violates
section 8(a)(2) of the National Labor Relations
Act (29 U.S.C. 158(a)(2)). Such determination
shall constitute a final determination for pur-
poses of this subparagraph and shall be binding
in all Federal or State actions with respect to
the status of the plan or other arrangement
under this subparagraph.
‘‘(IV) A person aggrieved by the deter-
mination of the Board under subclause (III)
may obtain review of the determination in any
United States court of appeals in the circuit in
which the collective bargaining at issue oc-
curred. Commencement of proceedings under
this subclause shall not, unless specifically or-
dered by the court, operate as a stay of any
State administrative or judicial action or pro-
ceeding related to the status of the plan or
other arrangement, except that in no case may
108
•HR 3080 SC2
the court stay, before the completion of the re-
view, an order which prohibits the enrollment of
new individuals into coverage under a plan or
arrangement.’’.
SEC. 1215. EMPLOYEE LEASING HEALTHCARE ARRANGE-
MENTS.
(a) EMPLOYEE LEASING HEALTHCARE ARRANGE-
MENT DEFINED.—Section 3 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002) is amended
by adding at the end the following new paragraph:
‘‘(43) EMPLOYEE LEASING HEALTHCARE ARRANGE-
MENT.—
‘‘(A) IN
GENERAL.—Subject to subparagraph
(B), the term ‘employee leasing healthcare arrange-
ment’ means any labor leasing arrangement, staff
leasing arrangement, extended employee staffing or
supply arrangement, or other arrangement under
which—
‘‘(i) one business or other entity (herein-
after in this paragraph referred to as the ‘les-
see’), under a lease or other arrangement en-
tered into with any other business or other en-
tity (hereinafter in this paragraph referred to
as the ‘lessor’), receives from the lessor the
109
•HR 3080 SC2
services of individuals to be performed under
such lease or other arrangement, and
‘‘(ii) benefits consisting of medical care de-
scribed in section 607(1) are provided to such
individuals or such individuals and their de-
pendents as participants and beneficiaries.
‘‘(B) EXCEPTION.—Such term does not include
an arrangement described in subparagraph (A) if,
under such arrangement, the lessor retains, both le-
gally and in fact, a complete right of direction and
control within the scope of employment over the in-
dividuals whose services are supplied under such
lease or other arrangement, and such individuals
perform a specified function for the lessee which is
separate and divisible from the primary business or
operations of the lessee.’’.
(b) 
TREATMENT
OF
EMPLOYEE
LEASING
HEALTHCARE ARRANGEMENTS AS MULTIPLE EMPLOYER
WELFARE ARRANGEMENTS.—Section 3(40) of such Act
(29 U.S.C. 1002(40)) (as amended by the preceding provi-
sions of this title) is further amended by adding at the
end the following new subparagraph:
‘‘(E) The term ‘multiple employer welfare arrange-
ment’ includes any employee leasing healthcare arrange-
ment, except that such term does not include any employee
110
•HR 3080 SC2
leasing healthcare arrangement which is a multiple em-
ployer health plan (as defined in section 701(10)).’’.
(c) SPECIAL
RULES
FOR
EMPLOYEE
LEASING
HEALTHCARE ARRANGEMENTS.—
(1) IN GENERAL.—Part 7 of subtitle B of title
I of such Act (as added by the preceding provisions
of this Act) is amended by adding at the end the fol-
lowing new section:
‘‘SEC. 711. SPECIAL RULES FOR EMPLOYEE LEASING
HEALTHCARE ARRANGEMENTS.
‘‘(a) IN GENERAL.—The requirements of paragraphs
(1), (2), and (3) of section 704(b) shall be treated as satis-
fied in the case of a multiple employer welfare arrange-
ment that is an employee leasing healthcare arrangement
if the application for exemption includes information
which the Secretary determines to be complete and accu-
rate and sufficient to demonstrate that the following
requirements are met with respect to the arrangement:
‘‘(1) 3-YEAR TENURE.—The lessor has been in
operation for not less than 3 years.
‘‘(2) SOLICITATION
RESTRICTIONS.—Employee
leasing services provided under the arrangement are
not solicited, advertised, or marketed through li-
censed insurance agents or brokers acting in such
capacity.
111
•HR 3080 SC2
‘‘(3) CREATION
OF
EMPLOYMENT
RELATION-
SHIP.—
‘‘(A) DISCLOSURE
STATEMENT.—Written
notice is provided to each applicant for employ-
ment subject to coverage under the arrange-
ment, at the time of application for employment
and before commencing coverage under the ar-
rangement, stating that the employer is the les-
sor under the arrangement.
‘‘(B) INFORMED
CONSENT.—Each such
applicant signs a written statement consenting
to the employment relationship with the lessor.
‘‘(C) INFORMED
RECRUITMENT
OF
LES-
SEE’S EMPLOYEES.—In any case in which the
lessor offers employment to an employee of a
lessee under the arrangement, the lessor in-
forms each employee in writing that his or her
acceptance of employment with the lessor is vol-
untary and that refusal of such offer will not be
deemed to be resignation from or abandonment
of current employment.
‘‘(4) REQUISITE
EMPLOYER-EMPLOYEE
RELA-
TIONSHIP UNDER ARRANGEMENT.—Under the em-
ployer-employee relationship with the employees of
the lessor—
112
•HR 3080 SC2
‘‘(A) the lessor retains the ultimate author-
ity to hire, terminate, and reassign such em-
ployees,
‘‘(B) the lessor is responsible for the pay-
ment of wages, payroll-related taxes, and em-
ployee benefits, without regard to payment by
the lessee to the lessor for its services,
‘‘(C) the lessor maintains the right of di-
rection and control over its employees, except to
the extent that the lessee is responsible for su-
pervision of the work performed consistent with
the lessee’s responsibility for its product or
service, and
‘‘(D) in accordance with section 301(a) of
the Labor Management Relations Act, 1947 (29
U.S.C. 185(a)), the lessor retains in the ab-
sence of an applicable collective bargaining
agreement, the right to enter into arbitration
and to decide employee grievances, and
‘‘(E) no owner, officer, or director of, or
partner in, a lessee is an employee of the lessor,
and not more than 10 percent of the individuals
covered under the arrangement consist of own-
ers, officers, or directors of, or partners in,
such a lessee (or any combination thereof).
113
•HR 3080 SC2
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) LESSOR.—The term ‘lessor’ means the
business or other entity from which services of indi-
viduals are obtained under an employee leasing
healthcare arrangement.
‘‘(2) LESSEE.—The term ‘lessee’ means a busi-
ness or other entity which receives the services of in-
dividuals provided under an employee leasing
healthcare arrangement.’’.
(2) CLERICAL AMENDMENT.—The table of con-
tents in section 1 of such Act (as amended by the
preceding provisions of this title) is further amended
by inserting after the item relating to section 710
the following new item:
‘‘Sec. 711. Employee leasing healthcare arrangements.’’.
SEC. 1216. ENFORCEMENT PROVISIONS RELATING TO MUL-
TIPLE EMPLOYER WELFARE ARRANGEMENTS
AND EMPLOYEE LEASING HEALTHCARE AR-
RANGEMENTS.
(a) ENFORCEMENT
OF FILING REQUIREMENTS.—
Section 502 of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1132) is amended—
(1) in subsection (a)(6), by striking ‘‘subsection
(c)(2) or (i) or (l)’’ and inserting ‘‘paragraph (2) or
(4) of subsection (c) or subsection (i) or (l)’’; and
114
•HR 3080 SC2
(2) by adding at the end of subsection (c) the
following new paragraph:
‘‘(4) The Secretary may assess a civil penalty against
any person of up to $1,000 a day from the date of such
person’s failure or refusal to file the information required
to be filed with the Secretary under section 101(e).’’.
(b) ACTIONS BY STATES IN FEDERAL COURT.—Sec-
tion 502(a) of such Act (29 U.S.C. 1132(a)) is amended—
(1) in paragraph (5), by striking ‘‘or’’ at the
end;
(2) in paragraph (6), by striking the period and
inserting ‘‘, or’’; and
(3) by adding at the end the following:
‘‘(7) by a State official having authority under
the law of such State to enforce the laws of such
State regulating insurance, to enjoin any act or
practice which violates any provision of part 7 which
such State has the power to enforce under part 7.’’.
(c) CRIMINAL PENALTIES FOR CERTAIN WILLFUL
MISREPRESENTATIONS.—Section 501 of such Act (29
U.S.C. 1131) is amended—
(1) by inserting ‘‘(a)’’ after ‘‘SEC. 501.’’; and
(2) by adding at the end the following new sub-
section:
115
•HR 3080 SC2
‘‘(b) Any person who, either willfully or with willful
blindness, falsely represents, to any employee, any employ-
ee’s beneficiary, any employer, the Secretary, or any State,
an arrangement established or maintained for the purpose
of offering or providing any benefit described in section
3(1) to employees or their beneficiaries as being a multiple
employer welfare arrangement granted an exemption
under part 7, as being an employee leasing healthcare ar-
rangement under such an exemption, or as having been
established or maintained under or pursuant to a collective
bargaining agreement shall, upon conviction, be impris-
oned not more than five years, be fined under title 18,
United States Code, or both.’’.
(d) CEASE ACTIVITIES ORDERS.—Section 502 of
such Act (29 U.S.C. 1132) is amended by adding at the
end the following new subsection:
‘‘(m)(1) Subject to paragraph (2), upon application
by the Secretary showing the operation, promotion, or
marketing of a multiple employer welfare arrangement
providing benefits consisting of medical care described in
section 607(1) that—
‘‘(A) is not licensed, registered, or otherwise ap-
proved under the insurance laws of the States in
which the arrangement offers or provides benefits, or
116
•HR 3080 SC2
‘‘(B) is not operating in accordance with the
terms of an exemption granted by the Secretary
under part 7,
a district court of the United States shall enter an order
requiring that the arrangement cease activities.
‘‘(2) Paragraph (1) shall not apply in the case of a
multiple employer welfare arrangement if the arrangement
shows that it—
‘‘(A) is fully insured, within the meaning of
section 701(9),
‘‘(B) is licensed, registered, or otherwise ap-
proved in each State in which it offers or provides
benefits, except to the extent that such State does
not require licensing, registration, or approval of
fully insured multiple employer welfare arrange-
ments, and
‘‘(C) with respect to each such State, is operat-
ing in accordance with applicable State insurance
laws that are not superseded under section 514.
‘‘(3) The court may grant such additional equitable
or remedial relief, including any relief available under this
title, as it deems necessary to protect the interests of the
public and of persons having claims for benefits against
the arrangement.’’.
117
•HR 3080 SC2
(e) RESPONSIBILITY
FOR CLAIMS PROCEDURE.—
Section 503 of such Act (29 U.S.C. 1133) is amended by
adding at the end (after and below paragraph (2)) the fol-
lowing new sentence: ‘‘The terms of each multiple em-
ployer welfare arrangement to which this section applies
and which provides benefits consisting of medical care de-
scribed in section 607(1) shall require the operating com-
mittee or the named fiduciary (as applicable) to ensure
that the requirements of this section are met in connection
with claims filed under the arrangement.’’.
SEC. 1217. FILING REQUIREMENTS FOR HEALTH BENEFIT
MULTIPLE EMPLOYER WELFARE ARRANGE-
MENTS.
Section 101 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1021) is amended—
(1) by redesignating subsection (e) as sub-
section (f); and
(2) by inserting after subsection (d) the follow-
ing new subsection:
‘‘(e)(1) Each multiple employer welfare arrangement
shall file with the Secretary a registration statement de-
scribed in paragraph (2) within 60 days before commenc-
ing operations (in the case of an arrangement commencing
operations on or after January 1, 1994) and no later than
February 15 of each year (in the case of an arrangement
118
•HR 3080 SC2
in operation since the beginning of such year), unless, as
of the date by which such filing otherwise must be made,
such arrangement provides no benefits consisting of medi-
cal care described in section 607(1).
‘‘(2) Each registration statement—
‘‘(A) shall be filed in such form, and contain
such information concerning the multiple employer
welfare arrangement and any persons involved in its
operation (including whether the arrangement is
fully insured), as shall be provided in regulations
which shall be prescribed by the Secretary, and
‘‘(B) if the arrangement is not fully insured,
shall contain a certification that copies of such reg-
istration statement have been transmitted by cer-
tified mail to—
‘‘(i) in the case of an arrangement with re-
spect to which an exemption under part 7 is in
effect, the State insurance commissioner of the
domicile State of such arrangement, or
‘‘(ii) in the case of an arrangement which
is not so exempt, the State insurance commis-
sioner of each State in which the arrangement
is located.
‘‘(3) The person or persons responsible for filing the
annual registration statement are—
119
•HR 3080 SC2
‘‘(A) the trustee or trustees so designated by
the terms of the instrument under which the mul-
tiple employer welfare arrangement is established or
maintained, or
‘‘(B) in the case of a multiple employer welfare
arrangement for which the trustee or trustees can-
not be identified, or upon the failure of the trustee
or trustees of an arrangement to file, the person or
persons actually responsible for the acquisition, dis-
position, control, or management of the cash or
property of the arrangement, irrespective of whether
such acquisition, disposition, control, or management
is exercised directly by such person or persons or
through an agent designated by such person or
persons.
‘‘(4) Any agreement entered into under section
506(c) with a State as the primary domicile State with
respect to any multiple employer welfare arrangement
shall provide for simultaneous filings of reports required
under this subsection with the Secretary and with the
State insurance commissioner of such State.’’.
120
•HR 3080 SC2
SEC. 1218. COOPERATION BETWEEN FEDERAL AND STATE
AUTHORITIES.
Section 506 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1136) is amended by adding
at the end the following new subsection:
‘‘(c) RESPONSIBILITY WITH RESPECT TO MULTIPLE
EMPLOYER WELFARE ARRANGEMENTS.—
‘‘(1) STATE ENFORCEMENT.—
‘‘(A) 
AGREEMENTS
WITH
STATES.—A
State may enter into an agreement with the
Secretary for delegation to the State of some or
all of the Secretary’s authority under sections
502 and 504 to enforce the provisions of this
title applicable to multiple employer welfare ar-
rangements with respect to which an exemption
under part 7 is or has been in effect. The Sec-
retary shall enter into the agreement if the Sec-
retary determines that the delegation provided
for therein would not result in a lower level or
quality of enforcement of the provisions of this
title.
‘‘(B) 
DELEGATIONS.—Any 
department,
agency, or instrumentality of a State to which
authority is delegated pursuant to an agree-
ment entered into under this paragraph may, if
authorized under State law and to the extent
121
•HR 3080 SC2
consistent with such agreement, exercise the
powers of the Secretary under this title which
relate to such authority.
‘‘(C) CONCURRENT
AUTHORITY
OF
THE
SECRETARY.—If the Secretary delegates author-
ity to a State in an agreement entered into
under subparagraph (A), the Secretary may
continue to exercise such authority concurrently
with the State.
‘‘(D) RECOGNITION OF PRIMARY DOMICILE
STATE.—In entering into any agreement with a
State under subparagraph (A), the Secretary
shall ensure that, as a result of such agreement
and all other agreements entered into under
subparagraph (A), only one State will be recog-
nized, with respect to any particular multiple
employer welfare arrangement, as the primary
domicile State to which authority has been dele-
gated pursuant to such agreements.
‘‘(2) ASSISTANCE TO STATES.—The Secretary
shall—
‘‘(A) provide enforcement assistance to the
States with respect to multiple employer welfare
arrangements, including, but not limited to, co-
ordinating Federal and State efforts through
122
•HR 3080 SC2
the establishment of cooperative agreements
with appropriate State agencies under which
the Pension and Welfare Benefits Administra-
tion keeps the States informed of the status of
its cases and makes available to the States in-
formation obtained by it,
‘‘(B) provide continuing technical assist-
ance to the States with respect to issues involv-
ing multiple employer welfare arrangements
and this Act,
‘‘(C) assist the States in obtaining from
the Office of Regulations and Interpretations
timely and complete responses to requests for
advisory opinions on issues described in sub-
paragraph (B), and
‘‘(D) distribute copies of all advisory opin-
ions described in subparagraph (C) to the State
insurance commissioner of each State.’’.
SEC. 1219. EFFECTIVE DATE; TRANSITIONAL RULES.
(a) EFFECTIVE DATE.—The amendments made by
this part shall take effect January 1, 1994, except that
the Secretary of Labor may issue regulations before such
date under such amendments. The Secretary shall issue
all regulations necessary to carry out the amendments
made by this title before the effective date thereof.
123
•HR 3080 SC2
(b) TRANSITIONAL RULES.—If the sponsor of a mul-
tiple employer welfare arrangement which, as of January
1, 1994, provides benefits consisting of medical care de-
scribed in section 607(1) of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1167(1)) files with
the Secretary of Labor an application for an exemption
under part 7 of subtitle B of title I of such Act within
180 days after such date and the Secretary has not, as
of 90 days after receipt of such application, found such
application to be materially deficient, section 514(b)(6)(A)
of such Act (29 U.S.C. 1144(b)(6)(A)) shall not apply
with respect to such arrangement during the 18-month pe-
riod following such date. If the Secretary determines, at
any time after the date of enactment of this Act, that any
such exclusion from coverage under the provisions of such
section 514(b)(6)(A) of such Act of a multiple employer
welfare arrangement would be detrimental to the interests
of individuals covered under such arrangement, such ex-
clusion shall cease as of the date of the determination.
Any determination made by the Secretary under this sub-
section shall be in the Secretary’s sole discretion.
124
•HR 3080 SC2
PART 3—ENCOURAGEMENT OF MULTIPLE EM-
PLOYER ARRANGEMENTS PROVIDING BASIC
HEALTH BENEFITS
SEC. 1221. ELIMINATING COMMONALITY OF INTEREST OR
GEOGRAPHIC LOCATION REQUIREMENT FOR
TAX EXEMPT TRUST STATUS.
(a) IN GENERAL.—Paragraph (9) of section 501(c)
of the Internal Revenue Code of 1986 (relating to exempt
organizations) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(9)’’; and
(2) by adding at the end the following:
‘‘(B) Any determination of whether a multiple
employer health plan (as defined in section 701(10)
of the Employee Retirement Income Security Act of
1974) or an insured multiple employer health plan
(as defined in section 701(11) of such Act) is a vol-
untary employees’ beneficiary association meeting
the requirements of this paragraph shall be made
without regard to any determination of commonality
of interest or geographic location if—
‘‘(i) such plan provides at least standard
coverage (consistent with section 102(c) of the
Affordable Health Care Now Act of 1993), and
‘‘(ii) in the case of an insured multiple em-
ployer health plan, it meets the requirements
enforcible under section 514(b)(6)(B)(i) of the
125
•HR 3080 SC2
Employee Retirement Income Security Act of
1974 to the extent not preempted by section
1202 of the Affordable Health Care Now Act of
1993.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply with respect to determinations
made on or after January 1, 1994.
PART 4—SIMPLIFYING FILING OF REPORTS FOR
EMPLOYERS 
COVERED 
UNDER 
INSURED
MULTIPLE EMPLOYER HEALTH PLANS
SEC. 1231. SINGLE ANNUAL FILING FOR ALL EMPLOYERS
COVERED UNDER AN INSURED MULTIPLE
EMPLOYER HEALTH PLAN.
(a) IN GENERAL.—Section 110 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1030),
as amended by section 1211(c) of this subtitle, is amended
by adding at the end the following new subsection:
‘‘(d) The Secretary shall prescribe by regulation or
otherwise an alternative method providing for the filing
of a single annual report (as referred to in section
104(a)(1)(A)) with respect to all employers who are cov-
ered under the same insured multiple employer health plan
(as defined in section 701(11)).’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on the date of the enact-
126
•HR 3080 SC2
ment of this Act. The Secretary of Labor shall prescribe
the alternative method referred to in section 110(d) of the
Employee Retirement Income Security Act of 1974, as
added by such amendment, within 90 days after the date
of the enactment of this Act.
PART 5—COMPLIANCE WITH COVERAGE OPTION
REQUIREMENTS
SEC. 1241. COMPLIANCE WITH COVERAGE REQUIREMENTS
THROUGH MULTIPLE EMPLOYER HEALTH AR-
RANGEMENTS.
(a) COMPLIANCE WITH APPLICABLE REQUIREMENTS
THROUGH MULTIEMPLOYER PLANS.—In any case in
which an eligible employee is, for any plan year, a partici-
pant in a group health plan which is a multiemployer plan,
the requirements of section 1001(a) shall be deemed to
be met with respect to such employee for such plan year
if the employer requirements of subsection (c) are met
with respect to the eligible employee, irrespective of wheth-
er, or to what extent, the employer makes employer con-
tributions on behalf of the eligible employee.
(b) COMPLIANCE WITH APPLICABLE REQUIREMENTS
THROUGH OTHER MULTIPLE EMPLOYER HEALTH AR-
RANGEMENTS.—
(1) IN GENERAL.—In any case in which an em-
ployer is, for any plan year, a participating employer
127
•HR 3080 SC2
(as defined in paragraph (3)) in an exempted mul-
tiple employer health plan or an insured multiple
employer health plan, the requirements of section
1001(a) shall be deemed to be met (and the ERISA
requirements of paragraph (2) shall be deemed to be
met by the employer) with respect to an eligible em-
ployee of the employer if—
(A) the employer requirements of sub-
section (c) are met with respect to the eligible
employee, and
(B) the applicable ERISA requirements of
paragraph (2) are met by the plan with respect
to the plan,
irrespective of whether, or to what extent, the em-
ployer makes employer contributions on behalf of the
eligible employee.
(2) APPLICABLE ERISA REQUIREMENTS.—The
applicable ERISA requirements of this paragraph
are the requirements of—
(A) part 1 of subtitle B of title I of the
Employee Retirement Income Security Act of
1974 (relating to reporting and disclosure),
(B) section 503 of such Act (relating to
claims procedure), and
128
•HR 3080 SC2
(C) part 6 of subtitle B of such title I (re-
lating to group health plans),
to the extent that such requirements relate to em-
ployers as plan sponsors or plan administrators.
(3) PARTICIPATING
EMPLOYER.—In this sub-
section, the term ‘‘participating employer’’ means, in
connection with an exempted multiple employer
health plan or an insured multiple employer health
plan, any employer if any of its employees, or any
of the dependents of its employees, are or were cov-
ered under such plan in connection with the employ-
ment of the employees.
(c) EMPLOYER REQUIREMENTS.—The employer re-
quirements of this subsection are met under a plan with
respect to an eligible employee if—
(1) the employee is eligible under the plan to
elect coverage on an annual basis and is provided a
reasonable opportunity to make the election in such
form and manner and at such times as are provided
by the plan,
(2) subject to section 1001(c), such coverage in-
cludes at least the standard coverage (consistent
with section 1102(c)),
(3) the employer facilitates collection of any
employee contributions under the plan and permits
129
•HR 3080 SC2
the employee to elect to have employee contributions
under the plan collected through payroll deduction,
and
(4) in the case of a plan to which part 1 of sub-
title B of title I of the Employee Retirement Income
Security Act of 1974 does not otherwise apply, the
employer provides to the employee a summary plan
description described in section 102(a)(1) of such
Act in the form and manner and at such times as
are required under such part 1 with respect to em-
ployee welfare benefit plans.
Subtitle D—Health Deduction
Fairness
SEC. 1301. PERMANENT EXTENSION AND INCREASE IN
HEALTH INSURANCE TAX DEDUCTION FOR
SELF-EMPLOYED INDIVIDUALS.
(a) PERMANENT EXTENSION OF DEDUCTION.—
(1) IN GENERAL.—Subsection (l) of section 162
of the Internal Revenue Code of 1986 (relating to
special rules for health insurance costs of self-em-
ployed individuals) is amended by striking paragraph
(6).
(2) EFFECTIVE DATE.—The amendment made
by this subsection shall apply to taxable years begin-
ning after December 31, 1993.
130
•HR 3080 SC2
(b) INCREASE IN AMOUNT OF DEDUCTION; INSUR-
ANCE PURCHASED MUST MEET CERTAIN STANDARDS.—
(1) INCREASE IN AMOUNT OF DEDUCTION.—
Paragraph (1) of section 162(l) of such Code is
amended by striking ‘‘25 percent of’’ and inserting
‘‘100 percent (50 percent in the case of taxable
years beginning in 1996 or 1997) of’’.
(2) INSURANCE PURCHASED MUST MEET CER-
TAIN STANDARDS.—Paragraph (2) of section 162(l)
of such Code is amended by adding at the end there-
of the following new subparagraph:
‘‘(C) INSURANCE
MUST
MEET
CERTAIN
STANDARDS.—Paragraph (1) shall apply only to
insurance which is—
‘‘(i) a MedAccess plan (as defined in
section 1102(a)(2) of such Act), or
‘‘(ii) a health plan which provides at
least the standard coverage (consistent
with section 1102(c) of the Affordable
Health Care Now Act of 1993) with sub-
stantial cost-sharing (as defined for pur-
poses of section 1102(a)(1)(A)(i) of such
Act).
‘‘(D) TREATMENT
OF
GROUP
HEALTH
PLANS.—For purposes of this subsection, an
131
•HR 3080 SC2
amount paid into a multiple employer health
plan (as defined in section 701(10) of the Em-
ployee Retirement Income Security Act of
1974) shall be deemed to be an amount paid for
insurance which constitutes medical care.’’
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to taxable years begin-
ning after December 31, 1993.
SEC. 1302. DEDUCTION OF HEALTH INSURANCE PREMIUMS
FOR CERTAIN PREVIOUSLY UNINSURED INDI-
VIDUALS.
(a) IN GENERAL.—Section 213 of the Internal Reve-
nue Code of 1986 (relating to medical, dental, etc., ex-
penses) is amended by adding at the end thereof the fol-
lowing new subsection:
‘‘(f) DEDUCTION FOR CERTAIN HEALTH INSURANCE
COSTS DETERMINED WITHOUT REGARD TO ADJUSTED
GROSS INCOME THRESHOLD.—
‘‘(1) IN GENERAL.—Subsection (a) shall be ap-
plied without regard to the limitation based on ad-
justed gross income in the case of the applicable per-
centage of the amounts paid for insurance referred
to in section 162(l)(2)(C) (and including payments
referred to in section 162(l)(2)(D)).
132
•HR 3080 SC2
‘‘(2) APPLICABLE PERCENTAGE.—For purposes
of paragraph (1), the term ‘applicable percentage’
means—
‘‘(A) 25 percent for taxable years begin-
ning in 1994 or 1995,
‘‘(B) 50 percent for taxable years begin-
ning in 1996 or 1997, and
‘‘(C) 100 percent for taxable years begin-
ning after 1997.
‘‘(3) DEDUCTION NOT ALLOWED TO INDIVID-
UALS
ELIGIBLE
FOR
EMPLOYER-SUBSIDIZED
COV-
ERAGE.—
‘‘(A) IN
GENERAL.—Paragraph (1) shall
not apply to any individual—
‘‘(i) who is eligible to participate in
any subsidized health plan maintained by
an employer of such individual or the
spouse of such individual, or
‘‘(ii) who is (or whose spouse is) a
member of a subsidized class of employees
of an employer.
‘‘(B) SUBSIDIZED CLASS.—For purposes of
subparagraph (A), an individual is a member of
a subsidized class of employees of an employer
if, at any time during the 3 calendar years end-
133
•HR 3080 SC2
ing with or within the taxable year, any mem-
ber of such class was eligible to participate in
any subsidized health plan maintained by such
employer.
‘‘(C) SPECIAL RULES.—
‘‘(i) CONTROLLED GROUPS.—All per-
sons treated as a single employer under
subsection (a) or (b) of section 52 or sub-
section (m) or (o) of section 414 shall be
treated as a single employer for purposes
of subparagraph (B).
‘‘(ii) CLASSES.—Classes of employees
shall be determined under regulations pre-
scribed by the Secretary based on such fac-
tors as the Secretary determines appro-
priate to carry out the purposes of this
subsection.
‘‘(4) COORDINATION
WITH
DEDUCTION
FOR
OTHER AMOUNTS.—Amounts allowable as a deduc-
tion under subsection (a) by reason of this sub-
section shall not be taken into account in determin-
ing the deduction under subsection (a) for other
amounts.
‘‘(5) SUBSECTION NOT TO APPLY TO INDIVID-
UALS
ELIGIBLE
FOR
MEDICARE.—This subsection
134
•HR 3080 SC2
shall not apply to amount paid for insurance cover-
ing an individual who is eligible for benefits under
title XVIII of the Social Security Act.’’
(b) DEDUCTION ALLOWED WHETHER OR NOT INDI-
VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a)
of section 62 of such Code is amended by inserting after
paragraph (15) the following new paragraph:
‘‘(16) COSTS
OF
CERTAIN
HEALTH
INSUR-
ANCE.—The deduction allowed by section 213 to the
extent allowable by reason of section 213(f).’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1993.
Subtitle E—Improved Access to
Community Health Services
PART 
1—INCREASED 
AUTHORIZATION
FOR 
COMMUNITY 
AND 
MIGRANT
HEALTH CENTERS
SEC. 1401. GRANT PROGRAM TO PROMOTE PRIMARY
HEALTH CARE SERVICES FOR UNDERSERVED
POPULATIONS.
(a) AUTHORIZATION.—The Secretary of Health and
Human Services shall provide for a program of grants to
migrant and community health centers (receiving grants
or contracts under section 329, 330, or 340 of the Public
135
•HR 3080 SC2
Health Service Act) in order to promote the provision of
primary health care services for underserved individuals.
Such grants may be used—
(1) to promote the provision of off-site services
(through means such as mobile medical clinics);
(2) to improve birth outcomes in areas with
high infant mortality and morbidity;
(3) to establish primary care clinics in areas
identified as in need of such clinics; and
(4) for recruitment and training costs of nec-
essary providers and operating costs for unreim-
bursed services.
(b) CONDITIONS.—(1) Grants under this subsection
shall only be made upon application, approved by the Sec-
retary.
(2) The amount of grants made under this section
shall be determined by the Secretary.
(c) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated—
(1) in fiscal year 1994, $100,000,000,
(2) in fiscal year 1995, $200,000,000,
(3) in fiscal year 1996, $300,000,000,
(4) in fiscal year 1997, $400,000,000, and
(5) in fiscal year 1998, $500,000,000,
136
•HR 3080 SC2
to carry out this section. Of the amounts appropriated
each fiscal year under this section, at least 10 percent
shall be used for grants described in subsection (a)(1) and
at least 10 percent shall be used for grants described in
subsection (a)(2). The Secretary may use not to exceed
50 percent of the amounts appropriated to carry out this
section for the purpose of making new grants or contracts
under sections 329, 330, and 340 of the Public Health
Service Act.
(d) STUDY AND REPORT.—The Secretary shall con-
duct a study of the impact of the grants made under this
section to migrant and community health centers on ac-
cess to health care, birth outcomes, and the use of emer-
gency room services. Not later than 2 years after the date
of the enactment of this Act, the Secretary shall submit
to Congress a report on such study and on recommenda-
tions for changes in the programs under this section in
order to promote the appropriate use of cost-effective out-
patient services.
137
•HR 3080 SC2
PART 2—GRANTS FOR PROJECTS FOR
COORDINATING DELIVERY OF SERVICES
SEC. 1411. PROJECTS FOR COORDINATING DELIVERY OF
OUTPATIENT PRIMARY HEALTH SERVICES.
Part D of title III of the Public Health Service Act
(42 U.S.C. 254b et seq.) is amended by adding at the end
the following new subpart:
‘‘Subpart VII—Delivery of Services
‘‘PROJECTS FOR COORDINATING DELIVERY OF SERVICES
‘‘SEC. 340E. (a) AUTHORITY FOR GRANTS.—
‘‘(1) IN GENERAL.—The Secretary may make
grants to public and nonprofit private entities to
carry out demonstration projects for the purpose of
increasing access to outpatient primary health serv-
ices in geographic areas described in subsection (b)
through coordinating the delivery of such services
under Federal, State, local, and private programs.
‘‘(2) REQUIREMENT
REGARDING
PLAN.—The
Secretary may make a grant under paragraph (1)
only if—
‘‘(A) the applicant involved has received a
grant under subsection (l) and the Secretary
has approved the plan developed with such
grant; and
138
•HR 3080 SC2
‘‘(B) the applicant agrees to carry out the
project under paragraph (1) in accordance with
the plan.
‘‘(b) QUALIFIED HEALTH SERVICE AREAS.—
‘‘(1) IN
GENERAL.—A geographic area de-
scribed in this subsection is a geographic area
that—
‘‘(A) is a rational area for the delivery of
health services;
‘‘(B) has a population of not more than
500,000 individuals; and
‘‘(C)(i) has been designated by the Sec-
retary as an area with a shortage of personal
health services; or
‘‘(ii) has a significant number of individ-
uals who have low incomes or who have insuffi-
cient insurance regarding health care.
‘‘(2) AUTHORITY REGARDING MULTIPLE POLIT-
ICAL SUBDIVISIONS.—The Secretary shall make a
determination of whether a geographic area is a geo-
graphic area described in paragraph (1) without re-
gard to whether the area is a political subdivision,
without regard to whether the area is located in 2
or more political subdivisions or States, and without
139
•HR 3080 SC2
regard to whether the area encompasses 2 or more
political subdivisions.
‘‘(c) PREFERENCES IN MAKING GRANTS.—In making
grants under subsection (a), the Secretary shall give pref-
erence to applicants demonstrating that, with respect to
the outpatient primary health services that will be the sub-
ject of the project conducted by the applicant under such
subsection—
‘‘(1)(A) the project will result in the reduction
of administrative expenses associated with such serv-
ices by increasing the efficiency of the administrative
processes of the providers participating in the
project, and (B) the resulting savings will be ex-
pended for the direct provision of such services for
the designated population; or
‘‘(2) the services that will be the subject of the
project will be provided in facilities that are
underutilized.
‘‘(d) ACTIVITIES OF PROJECT MUST SERVE DES-
IGNATED POPULATION.—The Secretary may make a
grant under subsection (a) to an applicant only if the ap-
plicant demonstrates that carrying out the project under
such subsection will increase access to outpatient primary
health services for a significant segment of the designated
population.
140
•HR 3080 SC2
‘‘(e) MATCHING FUNDS.—
‘‘(1) IN GENERAL.—With respect to the costs of
the project to be carried out under subsection (a) by
an applicant, the Secretary may make a grant under
such subsection only if the applicant agrees to make
available (directly or through donations from public
or private entities) non-Federal contributions toward
such costs in an amount that is not less than 50
percent of such costs.
‘‘(2) DETERMINATION
OF
AMOUNT
CONTRIB-
UTED.—Non-Federal contributions required in para-
graph (1) may be in cash or in kind, fairly evalu-
ated, including plant, equipment, or services.
Amounts provided by the Federal Government, or
services assisted or subsidized to any significant ex-
tent by the Federal Government, may not be in-
cluded in determining the amount of such non-Fed-
eral contributions.
‘‘(f) CERTAIN LIMITATIONS REGARDING GRANTS.—
‘‘(1) PROVISION OF HEALTH SERVICES; CON-
STRUCTION
OF
FACILITIES.—The Secretary may
make a grant under subsection (a) only if the appli-
cant involved agrees that the grant will not be ex-
pended for the direct provision of any health service
or for the construction or renovation of facilities.
141
•HR 3080 SC2
‘‘(2) DURATION AND AMOUNT OF GRANT.—The
period during which payments are made for a
project under subsection (a) may not exceed 4 years,
and the aggregate amount of such payments for the
period may not exceed $200,000. The provision of
such payments shall be subject to annual approval
by the Secretary of the payments and subject to the
availability of appropriations for the fiscal year in-
volved to make the payments.
‘‘(3) FINANCIAL CAPACITY FOR CONTINUATION
OF PROJECT AFTER TERMINATION OF GRANT.—The
Secretary may make a grant under subsection (a)
only if the Secretary determines that there is a rea-
sonable basis for believing that, after termination of
payments under such subsection pursuant to para-
graph (2), the project under such subsection will
have the financial capacity to continue operating.
‘‘(g) 
AGREEMENTS
AMONG
PARTICIPANTS
IN
PROJECTS.—
‘‘(1) REQUIRED PARTICIPANTS.—The Secretary
may make a grant under subsection (a) only if the
applicant for the grant has, for purposes of carrying
out a project under such subsection, entered into
agreements with—
142
•HR 3080 SC2
‘‘(A) the chief public health officers, and
the chief health officers for the elementary and
secondary schools, of each of the political sub-
divisions of the qualified health service area in
which the project under such subsection is to be
carried out (or, in the case of a political sub-
division that does not have such an official,
with another appropriate official of such sub-
division);
‘‘(B) each hospital in the qualified health
service area;
‘‘(C) representatives of entities in such
area that provide outpatient primary health
services under Federal, State, local, or private
programs;
‘‘(D) representatives of businesses in such
area, including small businesses; and
‘‘(E) representatives of nonprofit private
entities in such area.
‘‘(2) OPTIONAL
PARTICIPANTS.—With respect
to compliance with this section, a grantee under sub-
section (a) may, for purposes of carrying out a
project under such subsection, enter into such agree-
ments with public and private entities in the quali-
fied health service area involved (in addition to the
143
•HR 3080 SC2
entities specified in paragraph (1)) as the grantee
may elect.
‘‘(h) EXPENDITURES OF GRANT.—With respect to a
project under subsection (a), the purposes for which a
grant under such subsection may be expended include (but
are not limited to) expenditures to increase the efficiency
of the administrative processes of providers participating
in the project, paying the costs of hiring and compensating
staff, obtaining computers and other equipment (including
vehicles to transport individuals to programs providing
outpatient primary health services), and developing and
operating provider networks.
‘‘(i) MAINTENANCE OF EFFORT.—In the case of serv-
ices and populations that are the subject of a project
under subsection (a), the Secretary may make such a
grant for a fiscal year only if the applicant involved agrees
that the applicant, and each entity making an agreement
under subsection (g), will maintain expenditures of non-
Federal amounts for such services and populations at a
level that is not less than the level of such expenditures
maintained by the applicant and the entity, respectively,
for the fiscal year preceding the first fiscal year for which
the applicant receives such a grant.
‘‘(j) REPORTS TO SECRETARY.—The Secretary may
make a grant under subsection (a) only if the applicant
144
•HR 3080 SC2
involved agrees to submit to the Secretary such reports
on the project carried out under such subsection as the
Secretary may require.
‘‘(k) EVALUATIONS AND DISSEMINATION OF INFOR-
MATION.—The Secretary shall provide for evaluations of
projects carried out under subsection (a), and for the col-
lection and dissemination of information developed as a
result of such projects and as a result of similar projects.
‘‘(l) PLANNING GRANTS.—
‘‘(1) IN GENERAL.—The Secretary may make
grants to public and nonprofit private entities for
the purpose of developing plans to carry out projects
under subsection (a). Such a grant may be made
only if the applicant involved submits to the Sec-
retary information—
‘‘(A) providing a detailed statement of the
proposal of the applicant for carrying out the
project;
‘‘(B) identifying the geographic area in
which the project is to be carried out; and
‘‘(C) demonstrating that the area is a
qualified health service area and that the pro-
posal otherwise is in accordance with the re-
quirements established in this section for the
receipt of a grant under subsection (a).
145
•HR 3080 SC2
‘‘(2) DURATION AND AMOUNT OF GRANT.—The
period during which payments are made under para-
graph (1) for the development of a plan under such
paragraph may not exceed 1 year, and the amount
of such payments may not exceed $100,000.
‘‘(m) APPLICATION FOR GRANT.—The Secretary may
make a grant under subsection (a) or (l) only if the appli-
cant for the grant submits an application to the Secretary
that—
‘‘(1) contains any agreements, assurances, and
information required in this section with respect to
the grant; and
‘‘(2) is in such form, is made in such manner,
and contains such other agreements, assurances, and
information as the Secretary determines to be nec-
essary to carry out the purpose for which the grant
is to be provided.
‘‘(n) DEFINITIONS.—For purposes of this section:
‘‘(1) The term ‘designated population’ means
individuals described in subsection (b)(1)(C)(ii).
‘‘(2) The term ‘primary health services’ includes
preventive health services.
‘‘(3) The term ‘qualified health service area’
means a geographic area described in subsection (b).
‘‘(o) AUTHORIZATION OF APPROPRIATIONS.—
146
•HR 3080 SC2
‘‘(1) PLANNING FOR PROJECTS.—For the pur-
pose of grants under subsection (l), there is author-
ized to be appropriated $5,000,000 for fiscal year
1994, to remain available until expended.
‘‘(2) OPERATION OF PROJECTS.—For the pur-
pose of grants under subsection (a), there is author-
ized to be appropriated an aggregate $10,000,000
for the fiscal years 1995 through 1998.’’.
Subtitle F—Improved Access to
Rural Health Services
PART 
1—ESTABLISHMENT 
OF 
RURAL
EMERGENCY 
ACCESS 
CARE 
HOS-
PITALS UNDER MEDICARE
SEC. 1501. RURAL EMERGENCY ACCESS CARE HOSPITALS
DESCRIBED.
Section 1861 of the Social Security Act (42 U.S.C.
1395x) is amended by adding at the end the following new
subsection:
‘‘Rural Emergency Access Care Hospital; Rural
Emergency Access Care Hospital Services
‘‘(oo)(1) The term ‘rural emergency access care hos-
pital’ means, for a fiscal year, a facility with respect to
which the Secretary finds the following:
‘‘(A) The facility is located in a rural area (as
defined in section 1886(d)(2)(D)).
147
•HR 3080 SC2
‘‘(B) The facility was a hospital under this title
at any time during the 5-year period that ends on
the date of the enactment of this subsection.
‘‘(C) The facility is in danger of closing due to
low inpatient utilization rates and negative operating
losses, and the closure of the facility would limit the
access of individuals residing in the facility’s service
area to emergency services.
‘‘(D) The facility has entered into (or plans to
enter into), with a hospital with a participation
agreement in effect under section 1866(a), and
under such agreement the hospital shall accept pa-
tients transferred to the hospital from the facility
and receives data from and transmits data to the fa-
cility.
‘‘(E) There is a practitioner who is qualified to
provide advanced cardiac life support services (as de-
termined by the State in which the facility is lo-
cated) on-site at the facility on a 24-hour basis.
‘‘(F) A physician is available on-call to provide
emergency medical services on a 24-hour basis.
‘‘(G) The facility meets such staffing require-
ments as would apply under section 1861(e) to a
hospital located in a rural area, except that—
148
•HR 3080 SC2
‘‘(i) the facility need not meet hospital
standards relating to the number of hours dur-
ing a day, or days during a week, in which the
facility must be open, except insofar as the fa-
cility is required to provide emergency care on
a 24-hour basis under subparagraphs (E) and
(F); and
‘‘(ii) the facility may provide any services
otherwise required to be provided by a full-time,
on-site dietician, pharmacist, laboratory techni-
cian, medical technologist, or radiological tech-
nologist on a part-time, off-site basis.
‘‘(H) The facility meets the requirements appli-
cable to clinics and facilities under subparagraphs
(C) through (J) of paragraph (2) of section
1861(aa) and of clauses (ii) and (iv) of the second
sentence of such paragraph (or, in the case of the
requirements of subparagraph (E), (F), or (J) of
such paragraph, would meet the requirements if any
reference in such subparagraph to a ‘nurse practi-
tioner’ or to ‘nurse practitioners’ was deemed to be
a reference to a ‘nurse practitioner or nurse’ or to
‘nurse practitioners or nurses’), except that in deter-
mining whether a facility meets the requirements of
this subparagraph, subparagraphs (E) and (F) of
149
•HR 3080 SC2
that paragraph shall be applied as if any reference
to a ‘physician’ is a reference to a physician as de-
fined in section 1861(r)(1).
‘‘(2) The term ‘rural emergency access care hospital
services’ means medical and other health services fur-
nished by a rural emergency access care hospital.’’.
SEC. 1502. COVERAGE OF AND PAYMENT FOR SERVICES.
(a) COVERAGE UNDER PART B.—Section 1832(a)(2)
of the Social Security Act (42 U.S.C. 1395k(a)(2)) is
amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (I);
(2) by striking the period at the end of sub-
paragraph (J) and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(K) rural emergency access care hospital
services (as defined in section 1861(oo)(2)).’’.
(b) PAYMENT BASED ON PAYMENT FOR OUTPATIENT
RURAL PRIMARY CARE HOSPITAL SERVICES.—
(1) IN GENERAL.—Section 1833(a)(6) of the
Social Security Act (42 U.S.C. 1395l(a)(6)) is
amended by striking ‘‘services,’’ and inserting ‘‘serv-
ices and rural emergency access care hospital serv-
ices,’’.
150
•HR 3080 SC2
(2) PAYMENT
METHODOLOGY
DESCRIBED.—
Section 1834(g) of such Act (42 U.S.C. 1395m(g))
is amended—
(A) in the heading, by striking ‘‘SERV-
ICES’’ and inserting ‘‘SERVICES
AND RURAL
EMERGENCY ACCESS CARE HOSPITAL SERV-
ICES’’; and
(B) in paragraph (1), by striking ‘‘during
a year before 1993’’ and inserting ‘‘during a
year before the prospective payment system de-
scribed in paragraph (2) is in effect’’;
(C) in paragraph (1), by adding at the end
the following:
‘‘The amount of payment shall be determined under
either method without regard to the amount of the
customary or other charge.’’;
(D) in paragraph (2), by striking ‘‘Janu-
ary 1, 1993,’’ and inserting ‘‘January 1,
1996,’’; and
(E) by adding at the end the following new
paragraph:
‘‘(3) APPLICATION OF METHODS TO PAYMENT
FOR
RURAL
EMERGENCY
ACCESS
CARE
HOSPITAL
SERVICES.—The amount of payment for rural emer-
gency access care hospital services provided during
151
•HR 3080 SC2
a year shall be determined using the applicable
method provided under this subsection for determin-
ing payment for outpatient rural primary care hos-
pital services during the year.’’.
SEC. 1503. EFFECTIVE DATE.
The amendments made by sections 1501 and 1502
shall apply to fiscal years beginning on or after October
1, 1993.
PART 2—RURAL MEDICAL EMERGENCIES
AIR TRANSPORT
SEC. 1511. GRANTS TO STATES REGARDING AIRCRAFT FOR
TRANSPORTING RURAL VICTIMS OF MEDICAL
EMERGENCIES.
Part E of title XII of the Public Health Service Act
(42 U.S.C. 300d–51 et seq.) is amended by adding at the
end thereof the following new section:
‘‘SEC. 1252. GRANTS FOR SYSTEMS TO TRANSPORT RURAL
VICTIMS OF MEDICAL EMERGENCIES.
‘‘(a) IN GENERAL.—The Secretary shall make grants
to States to assist such States in the creation or enhance-
ment of air medical transport systems that provide victims
of medical emergencies in rural areas with access to treat-
ments for the injuries or other conditions resulting from
such emergencies.
‘‘(b) APPLICATION AND PLAN.—
152
•HR 3080 SC2
‘‘(1) APPLICATION.—To be eligible to receive a
grant under subsection (a), a State shall prepare
and submit to the Secretary an application in such
form, made in such manner, and containing such
agreements, assurances, and information, including
a State plan as required in paragraph (2), as the
Secretary determines to be necessary to carry out
this section.
‘‘(2) STATE PLAN.—An application submitted
under paragraph (1) shall contain a State plan that
shall—
‘‘(A) describe the intended uses of the
grant proceeds and the geographic areas to be
served;
‘‘(B) demonstrates that the geographic
areas to be served, as described under subpara-
graph (A), are rural in nature;
‘‘(C) demonstrate that there is a lack of
facilities available and equipped to deliver ad-
vanced levels of medical care in the geographic
areas to be served;
‘‘(D) demonstrate that in utilizing the
grant proceeds for the establishment or en-
hancement of air medical services the State
would be making a cost-effective improvement
153
•HR 3080 SC2
to existing ground-based or air emergency medi-
cal service systems;
‘‘(E) demonstrate that the State will not
utilize the grant proceeds to duplicate the capa-
bilities of existing air medical systems that are
effectively meeting the emergency medical needs
of the populations they serve;
‘‘(F) demonstrate that in utilizing the
grant proceeds the State is likely to achieve a
reduction in the morbidity and mortality rates
of the areas to be served, as determined by the
Secretary;
‘‘(G) demonstrate that the State, in utiliz-
ing the grant proceeds, will—
‘‘(i) maintain the expenditures of the
State for air and ground medical transport
systems at a level equal to not less than
the level of such expenditures maintained
by the State for the fiscal year preceding
the fiscal year for which the grant is re-
ceived; and
‘‘(ii) ensure that recipients of direct
financial assistance from the State under
such grant will maintain expenditures of
such recipients for such systems at a level
154
•HR 3080 SC2
at least equal to the level of such expendi-
tures maintained by such recipients for the
fiscal year preceding the fiscal year for
which the financial assistance is received;
‘‘(H) demonstrate that persons experienced
in the field of air medical service delivery were
consulted in the preparation of the State plan;
‘‘(I) contain such other information as the
Secretary may determine appropriate.
‘‘(c) CONSIDERATIONS IN AWARDING GRANTS.—In
determining whether to award a grant to a State under
this section, the Secretary shall—
‘‘(1) consider the rural nature of the areas to
be served with the grant proceeds and the services
to be provided with such proceeds, as identified in
the State plan submitted under subsection (b); and
‘‘(2) give preference to States with State plans
that demonstrate an effective integration of the pro-
posed air medical transport systems into a com-
prehensive network or plan for regional or statewide
emergency medical service delivery.
‘‘(d) 
STATE
ADMINISTRATION
AND
USE
OF
GRANT.—
‘‘(1) IN
GENERAL.—The Secretary may not
make a grant to a State under subsection (a) unless
155
•HR 3080 SC2
the State agrees that such grant will be adminis-
tered by the State agency with principal responsibil-
ity for carrying out programs regarding the provi-
sion of medical services to victims of medical emer-
gencies or trauma.
‘‘(2) PERMITTED
USES.—A State may use
amounts received under a grant awarded under this
section to award subgrants to public and private en-
tities operating within the State.
‘‘(3) OPPORTUNITY FOR PUBLIC COMMENT.—
The Secretary may not make a grant to a State
under subsection (a) unless that State agrees that,
in developing and carrying out the State plan under
subsection (b)(2), the State will provide public notice
with respect to the plan (including any revisions
thereto) and facilitate comments from interested
persons.
‘‘(e) NUMBER
OF GRANTS.—The Secretary shall
award grants under this section to not less than 7 States.
‘‘(f) REPORTS.—
‘‘(1) REQUIREMENT.—A State that receives a
grant under this section shall annually (during each
year in which the grant proceeds are used) prepare
and submit to the Secretary a report that shall con-
tain—
156
•HR 3080 SC2
‘‘(A) a description of the manner in which
the grant proceeds were utilized;
‘‘(B) a description of the effectiveness of
the air medical transport programs assisted
with grant proceeds; and
‘‘(C) such other information as the Sec-
retary may require.
‘‘(2) TERMINATION OF FUNDING.—In reviewing
reports submitted under paragraph (1), if the Sec-
retary determines that a State is not using amounts
provided under a grant awarded under this section
in accordance with the State plan submitted by the
State under subsection (b), the Secretary may termi-
nate the payment of amounts under such grant to
the State until such time as the Secretary deter-
mines that the State comes into compliance with
such plan.
‘‘(g) DEFINITION.—As used in this section, the term
‘rural areas’ means geographic areas that are located out-
side of standard metropolitan statistical areas, as identi-
fied by the Secretary.
‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to make grants under
this section, $15,000,000 for fiscal year 1994, and such
157
•HR 3080 SC2
sums as may be necessary for each of the fiscal years 1995
and 1996.’’.
PART 3—EMERGENCY MEDICAL SERVICES
AMENDMENTS
SEC. 1521. ESTABLISHMENT OF OFFICE OF EMERGENCY
MEDICAL SERVICES.
Title XII of the Public Health Service Act (42 U.S.C.
300d et seq.) is amended—
(1) in the heading for the title, by striking
‘‘TRAUMA CARE’’ and inserting ‘‘EMERGENCY
MEDICAL SERVICES’’;
(2) in the heading for part A, by striking
‘‘GENERAL’’ and all that follows and inserting
‘‘GENERAL AUTHORITIES AND DUTIES’’; and
(3) by amending section 1201 to read as fol-
lows:
‘‘SEC. 1201. ESTABLISHMENT OF OFFICE OF EMERGENCY
MEDICAL SERVICES.
‘‘(a) IN GENERAL.—The Secretary shall establish an
office to be known as the Office of Emergency Medical
Services, which shall be headed by a director appointed
by the Secretary. The Secretary shall carry out this title
acting through the Director of such Office.
158
•HR 3080 SC2
‘‘(b) GENERAL AUTHORITIES AND DUTIES.—With
respect to emergency medical services (including trauma
care), the Secretary shall—
‘‘(1) conduct and support research, training,
evaluations, and demonstration projects;
‘‘(2) foster the development of appropriate,
modern systems of such services through the sharing
of information among agencies and individuals in-
volved in the study and provision of such services;
‘‘(3) sponsor workshops and conferences;
‘‘(4) as appropriate, disseminate to public and
private entities information obtained in carrying out
paragraphs (1) through (4);
‘‘(5) provide technical assistance to State and
local agencies;
‘‘(6) coordinate activities of the Department of
Health and Human Services; and
‘‘(7) as appropriate, coordinate activities of
such Department with activities of other Federal
agencies.
‘‘(c) CERTAIN REQUIREMENTS.—With respect to
emergency medical services (including trauma care), the
Secretary shall ensure that activities under subsection (b)
are carried out regarding—
159
•HR 3080 SC2
‘‘(1) maintaining an adequate number of health
professionals with expertise in the provision of the
services, including hospital-based professionals and
prehospital-based professionals;
‘‘(2) developing, periodically reviewing, and re-
vising as appropriate, in collaboration with appro-
priate public and private entities, guidelines for the
provision of such services (including, for various typ-
ical circumstances, guidelines on the number and va-
riety of professionals, on equipment, and on train-
ing);
‘‘(3) the appropriate use of available tech-
nologies, including communications technologies; and
‘‘(4) the unique needs of underserved inner-city
areas and underserved rural areas.
‘‘(d) GRANTS, COOPERATIVE AGREEMENTS, AND
CONTRACTS.—In carrying out subsections (b) and (c), the
Secretary may make grants and enter into cooperative
agreements and contracts.
‘‘(e) DEFINITIONS.—For purposes of this part:
‘‘(1) The term ‘hospital-based professional’
means a health professional (including an allied
health professional) who has expertise in providing
one or more emergency medical services and who
normally provides the services at a medical facility.
160
•HR 3080 SC2
‘‘(2) The term ‘prehospital-based professional’
means a health professional (including an allied
health professional) who has expertise in providing
one or more emergency medical services and who
normally provides the services at the site of the med-
ical emergency or during transport to a medical fa-
cility.’’.
SEC. 1522. STATE OFFICES OF EMERGENCY MEDICAL SERV-
ICES.
(a) TECHNICAL AMENDMENTS TO FACILITATE ES-
TABLISHMENT OF PROGRAM.—
(1) IN
GENERAL.—Title XII of the Public
Health Service Act (42 U.S.C. 300d et seq.) is
amended—
(A) by redesignating section 1239 as sec-
tion 1235;
(B) by redesignating sections 1231 and
1233 as sections 1236 and 1237, respectively;
and
(C) by redesignating sections 1211 through
1222 as sections 1221 through 1232, respec-
tively.
(2) MODIFICATIONS
IN
FORMAT
OF
TITLE
XII.—Title XII of the Public Health Service Act, as
161
•HR 3080 SC2
amended by paragraph (1) of this subsection, is
amended—
(A) by striking ‘‘PART B’’ and all that fol-
low through ‘‘STATE PLANS’’ and inserting the
following:
‘‘Subpart II—Formula Grants With Respect to
Modifications of State Plans’’;
(B) by striking ‘‘PART C—GENERAL PRO-
VISIONS’’ and inserting the following:
‘‘Subpart III—General Provisions’’;
(C) by redesignating sections 1202 and
1203 as sections 1211 and 1212, respectively;
and
(D) by inserting before section 1211 (as so
redesignated) the following:
‘‘PART B—TRAUMA CARE
‘‘Subpart I—Advisory Council; Clearinghouse’’.
(b) STATE OFFICES.—Title XII of the Public Health
Service Act, as amended by subsection (a) of this section,
is amended by inserting after section 1201 the following
new section:
‘‘SEC. 1202. STATE OFFICES OF EMERGENCY MEDICAL
SERVICES.
‘‘(a) PROGRAM
OF GRANTS.—The Secretary may
make grants to States for the purpose of improving the
162
•HR 3080 SC2
availability and quality of emergency medical services
through the operation of State offices of emergency medi-
cal services.
‘‘(b) REQUIREMENT OF MATCHING FUNDS.—
‘‘(1) IN
GENERAL.—The Secretary may not
make a grant under subsection (a) unless the State
involved agrees, with respect to the costs to be in-
curred by the State in carrying out the purpose de-
scribed in such subsection, to provide non-Federal
contributions toward such costs in an amount that—
‘‘(A) for the first fiscal year of payments
under the grant, is not less than $1 for each $3
of Federal funds provided in the grant;
‘‘(B) for any second fiscal year of such
payments, is not less than $1 for each $1 of
Federal funds provided in the grant; and
‘‘(C) for any third fiscal year of such pay-
ments, is not less than $3 for each $1 of Fed-
eral funds provided in the grant.
‘‘(2) DETERMINATION
OF
AMOUNT
OF
NON-
FEDERAL CONTRIBUTION.—
‘‘(A) Subject to subparagraph (B), non-
Federal contributions required in paragraph (1)
may be in cash or in kind, fairly evaluated, in-
cluding plant, equipment, or services. Amounts
163
•HR 3080 SC2
provided by the Federal Government, or serv-
ices assisted or subsidized to any significant ex-
tent by the Federal Government, may not be in-
cluded in determining the amount of such non-
Federal contributions.
‘‘(B) The Secretary may not make a grant
under subsection (a) unless the State involved
agrees that—
‘‘(i) for the first fiscal year of pay-
ments under the grant, 100 percent or less
of the non-Federal contributions required
in paragraph (1) will be provided in the
form of in-kind contributions;
‘‘(ii) for any second fiscal year of such
payments, not more than 50 percent of
such non-Federal contributions will be pro-
vided in the form of in-kind contributions;
and
‘‘(iii) for any third fiscal year of such
payments, such non-Federal contributions
will be provided solely in the form of cash.
‘‘(c) CERTAIN REQUIRED ACTIVITIES.—The Sec-
retary may not make a grant under subsection (a) unless
the State involved agrees that activities carried out by an
office operated pursuant to such subsection will include—
164
•HR 3080 SC2
‘‘(1) coordinating the activities carried out in
the State that relate to emergency medical services;
‘‘(2) activities regarding the matters described
in paragraphs (1) through (4) section 1201(b);
‘‘(3) identifying Federal and State programs re-
garding emergency medical services and providing
technical assistance to public and nonprofit private
entities regarding participation in such programs.
‘‘(d) REQUIREMENT REGARDING ANNUAL BUDGET
FOR OFFICE.—The Secretary may not make a grant
under subsection (a) unless the State involved agrees that,
for any fiscal year for which the State receives such a
grant, the office operated pursuant to subsection (a) will
be provided with an annual budget of not less than
$50,000.
‘‘(e) CERTAIN USES OF FUNDS.—
‘‘(1) RESTRICTIONS.—The Secretary may not
make a grant under subsection (a) unless the State
involved agrees that—
‘‘(A) if research with respect to emergency
medical services is conducted pursuant to the
grant, not more than 10 percent of the grant
will be expended for such research; and
165
•HR 3080 SC2
‘‘(B) the grant will not be expended to pro-
vide emergency medical services (including pro-
viding cash payments regarding such services).
‘‘(2) ESTABLISHMENT
OF
OFFICE.—Activities
for which a State may expend a grant under sub-
section (a) include paying the costs of establishing
an office of emergency medical services for purposes
of such subsection.
‘‘(f) REPORTS.—The Secretary may not make a
grant under subsection (a) unless the State involved
agrees to submit to the Secretary reports containing such
information as the Secretary may require regarding activi-
ties carried out under this section by the State.
‘‘(g) REQUIREMENT
OF APPLICATION.—The Sec-
retary may not make a grant under subsection (a) unless
an application for the grant is submitted to the Secretary
and the application is in such form, is made in such man-
ner, and contains such agreements, assurances, and infor-
mation as the Secretary determines to be necessary to
carry out this section.’’.
SEC. 1523. PROGRAMS FOR RURAL AREAS.
(a) IN GENERAL.—Title XII of the Public Health
Service Act, as amended by section 1522, is amended—
(1) by transferring section 1204 to part A;
166
•HR 3080 SC2
(2) by redesignating such section as section
1203;
(3) by inserting such section after section 1202;
and
(4) in section 1203 (as so redesignated)—
(A) by redesignating subsection (c) as sub-
section (d); and
(B) by inserting after subsection (b) the
following new subsection:
‘‘(c) DEMONSTRATION PROGRAM REGARDING TELE-
COMMUNICATIONS.—
‘‘(1) LINKAGES
FOR
RURAL
FACILITIES.—
Projects under subsection (a)(1) shall include dem-
onstration projects to establish telecommunications
between rural medical facilities and medical facilities
that have expertise or equipment that can be utilized
by the rural facilities through the telecommuni-
cations.
‘‘(2) MODES
OF
COMMUNICATION.—The Sec-
retary shall ensure that the telecommunications
technologies demonstrated under paragraph (1) in-
clude interactive video telecommunications, static
video imaging transmitted through the telephone
system, and facsimiles transmitted through such sys-
tem.’’.
167
•HR 3080 SC2
(b) CONFORMING AMENDMENT.—Section 1203 of the
Public Health Service Act, as redesignated by subsection
(a)(2) of this section, is amended in the heading for the
section by striking ‘‘ESTABLISHMENT’’ and all that fol-
lows and inserting ‘‘PROGRAMS FOR RURAL AREAS.’’.
SEC. 1524. FUNDING.
Title XII of the Public Health Service Act, as amend-
ed by the preceding provisions of this title, is amended—
(1) by redesignating parts C through F as parts
D through G, respectively;
(2) by inserting after subpart III of part B the
following:
‘‘PART C—FUNDING’’;
(3) by transferring section 1239 to part C (as
so added); and
(4) in such section, by striking subsections (a)
and (b) and inserting the following:
‘‘(a) 
EMERGENCY
MEDICAL
SERVICES
GEN-
ERALLY.—
‘‘(1) IN GENERAL.—For the purpose of carry-
ing out section 1201 other than with respect to trau-
ma care, there are authorized to be appropriated
$2,000,000 for fiscal year 1994, and such sums as
may be necessary for each of the fiscal years 1995
and 1996.
168
•HR 3080 SC2
‘‘(2) STATE OFFICES.—For the purpose of car-
rying out section 1202, there are authorized to be
appropriated $3,000,000 for fiscal year 1994, and
such sums as may be necessary for each of the fiscal
years 1995 and 1996.
‘‘(3) CERTAIN
TELECOMMUNICATIONS
DEM-
ONSTRATIONS.—For the purpose of carrying out sec-
tion 1203(c), there are authorized to be appro-
priated $10,000,000 for fiscal year 1994 and such
sums as may be necessary for each of the fiscal
years 1995 and 1996.
‘‘(b) TRAUMA CARE AND CERTAIN OTHER ACTIVI-
TIES.—
‘‘(1) IN GENERAL.—For the purpose of carry-
ing out part B, section 1201 with respect to trauma
care, and section 1203 (other than subsection (c) of
such section), there are authorized to be appro-
priated $60,000,000 for fiscal year 1994, and such
sums as may be necessary for each of the fiscal
years 1995 and 1996.
‘‘(2) ALLOCATION OF FUNDS BY SECRETARY.—
‘‘(A) For the purpose of carrying out sub-
part I of part B, section 1201 with respect to
trauma care, and section 1203 (other than sub-
section (c) of such section), the Secretary shall
169
•HR 3080 SC2
make available 10 percent of the amounts ap-
propriated for a fiscal year under paragraph
(1).
‘‘(B) For the purpose of carrying out sec-
tion 1203 (other than subsection (c) of such
section), the Secretary shall make available 10
percent of the amounts appropriated for a fiscal
year under paragraph (1).
‘‘(C)(i) For the purpose of making allot-
ments under section 1221(a), the Secretary
shall, subject to subsection (c), make available
80 percent of the amounts appropriated for a
fiscal year under paragraph (1).
‘‘(ii) Amounts paid to a State under sec-
tion 1221(a) for a fiscal year shall, for the pur-
poses for which the amounts were paid, remain
available for obligation until the end of the fis-
cal year immediately following the fiscal year
for which the amounts were paid.’’.
SEC. 1525. CONFORMING AMENDMENTS.
Title XII of the Public Health Service Act, as amend-
ed by the preceding provisions of this title, is amended—
(1) in section 1203(b), by striking ‘‘1214(c)(1)’’
and inserting ‘‘1224(c)(1)’’;
170
•HR 3080 SC2
(2) in section 1211(b)(3), by striking ‘‘1213(c)’’
and inserting ‘‘1223(c)’’;
(3) in section 1221—
(A) in subsection (a)—
(i) by striking ‘‘1218’’ and inserting
‘‘1228’’; and
(ii) by striking ‘‘1217’’ and inserting
‘‘1227’’; and
(B) in subsection (b)—
(i) by striking ‘‘1233’’ and inserting
‘‘1237’’; and
(ii) by striking ‘‘1213’’ and inserting
‘‘1223’’;
(4) in section 1222—
(A) in subsection (a)—
(i) in paragraph (1), by striking
‘‘1211(a)’’ and inserting ‘‘1221(a)’’; and
(ii) in paragraph (2)(A), by striking
‘‘1211(c)’’ and inserting ‘‘1221(c)’’; and
(B) 
in 
subsection 
(b), 
by 
striking
‘‘1211(a)’’ and inserting ‘‘1221(a)’’;
(5) in section 1223—
(A) 
in 
subsection 
(a), 
by 
striking
‘‘1211(b)’’ and inserting ‘‘1221(b)’’;
(B) in subsection (b)—
171
•HR 3080 SC2
(i) in paragraph (1), by striking
‘‘1211(a)’’ and inserting ‘‘1221(a)’’; and
(ii) in paragraph (3), by striking
‘‘1211(a)’’ and inserting ‘‘1221(a)’’; and
(C) 
in 
subsection 
(d), 
by 
striking
‘‘1211(a)’’ and inserting ‘‘1221(a)’’;
(6) in section 1224—
(A) in each of subsections (a) through (c),
by striking ‘‘1211(a)’’ and inserting ‘‘1221(a)’’;
and
(B) 
in 
subsection 
(b), 
by 
striking
‘‘1213(a)(7)’’ and inserting ‘‘1223(a)(7)’’;
(7) in section 1225—
(A) in subsection (a)—
(i) by striking ‘‘1211(a)’’ and insert-
ing ‘‘1221(a)’’; and
(ii) by striking ‘‘1233’’ and inserting
‘‘1237’’; and
(B) 
in 
subsection 
(b), 
by 
striking
‘‘1211(b)’’ and inserting ‘‘1221(b)’’;
(8) in section 1226, in each of subsections (a)
through (c), by striking ‘‘1211(a)’’ and inserting
‘‘1221(a)’’;
(9) in section 1227—
172
•HR 3080 SC2
(A) by striking ‘‘1211(a)’’ and inserting
‘‘1221(a)’’; and
(B) by striking ‘‘1214’’ and inserting
‘‘1224’’;
(10) in section 1228—
(A) in each of subsections (a) through (c),
by striking ‘‘1211(a)’’ each place such term ap-
pears and inserting ‘‘1221(a)’’;
(B) in subsection (b), in each of para-
graphs 
(2)(A) 
and 
(3)(A), 
by 
striking
‘‘1232(a)’’ and inserting ‘‘1239(a)’’; and
(C) in subsection (c)(2)—
(i) by striking ‘‘1232(b)(3)’’ and in-
serting ‘‘1239(b)(3)’’; and
(ii) by striking ‘‘1217’’ and inserting
‘‘1227’’;
(11) in section 1229(a), by striking ‘‘1211(a)’’
each place such term appears and inserting
‘‘1221(a)’’;
(12) in section 1230(a), by striking ‘‘1211(a)’’
each place such term appears and inserting
‘‘1221(a)’’;
(13) in section 1231—
173
•HR 3080 SC2
(A) in each of subsections (a) and (b), by
striking ‘‘1211(a)’’ each place such term ap-
pears and inserting ‘‘1221(a)’’; and
(B) in each of subsections (a) and (b), by
striking ‘‘1211(b)’’ and inserting ‘‘1221(b)’’;
(14) in section 1232, by striking ‘‘1211’’ and
inserting ‘‘1221’’;
(15) in section 1236—
(A) in the matter preceding paragraph (1),
by striking ‘‘this title’’ and inserting ‘‘this
part’’; and
(B) in paragraph (1), by striking ‘‘1213’’
and inserting ‘‘1223’’;
(16) in section 1237—
(A) in each of subsections (a) and (b), by
striking ‘‘1211’’ each place such term appears
and inserting ‘‘1221’’;
(B) in subsection (b)—
(i) by striking ‘‘part B’’ and inserting
‘‘subpart II’’; and
(ii) by striking ‘‘1214(c)(1)’’ and in-
serting ‘‘1224(c)(1)’’; and
(C) in subsection (c), by striking ‘‘1213’’
and inserting ‘‘1223’’; and
(17) in section 1239(c)(1)—
174
•HR 3080 SC2
(A) by striking ‘‘1211(a)’’ and inserting
‘‘1221(a)’’;
(B) by striking ‘‘1218(a)(2)’’ and inserting
‘‘1228(a)(2)’’; and
(C) by striking ‘‘part B’’ and inserting
‘‘subpart II’’.
SEC. 1526. EFFECTIVE DATE.
The amendments made by this part shall take effect
October 1, 1993, or upon the date of the enactment of
this Act, whichever occurs later.
Subtitle G—State Flexibility in the
Medicaid Program: The Medical
Health Allowance Program
SEC. 1601. ESTABLISHMENT OF PROGRAM.
(a) IN GENERAL.—Title XIX of the Social Security
Act (42 U.S.C. 1396 et seq.), as amended by section
13631(b) of the Omnibus Budget Reconciliation Act of
1993, is amended—
(1) by redesignating section 1931 as section
1932; and
(2) by inserting after section 1930 the following
new section:
‘‘STATE HEALTH ALLOWANCE PROGRAMS
‘‘SEC. 1931. (a) TREATMENT
OF EXPENDITURES
UNDER HEALTH ALLOWANCE PROGRAMS AS MEDICAL
ASSISTANCE UNDER STATE PLAN.—
175
•HR 3080 SC2
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this title, for purposes of determining
the amount to be paid to a State under section
1903(a)(1) for quarters in any fiscal year, amounts
expended by an eligible State (as described in sub-
section (b)) during the fiscal year under a State
health allowance program (as described in subsection
(c)) shall be included in the total amount expended
during the fiscal year as medical assistance under
the State plan (except as provided under paragraphs
(2) and (3) and under subsection (d)(1)(C)).
‘‘(2) FEDERAL
PAYMENT
RESTRICTED
TO
ACUTE
CARE
SERVICES.—No amounts expended
under a State health allowance program that are at-
tributable to medical assistance described in para-
graphs (4), (14), (15), (23), or (24) of section
1905(a) shall be included in the total amount ex-
pended as medical assistance under the State plan.
‘‘(3) LIMITATION.—In no case shall this sub-
section result in (A) the total Federal payments to
the State for the quarter under this title (including
payments attributable to this section and section
1923), exceeding (B) the total Federal payments
that the Secretary estimates would have been paid
176
•HR 3080 SC2
under this title to the State for the quarter if the
State did not have a program under this section.
‘‘(b) ELIGIBILITY OF STATE.—A State is eligible for
purposes of subsection (a) if the State submits (at such
time and in such form as the Secretary may require) an
application to the Secretary containing such information
and assurances as the Secretary may require, including
assurances that the State has adopted and is enforcing
standards regarding quality assurance for group health
plans participating in the State health allowance program,
including standards regarding—
‘‘(1) uniform reporting requirements for such
plans relating to a minimum set of clinical data, pa-
tient satisfaction data, and other information that
may be used by individuals to compare the quality
of various plans; and
‘‘(2) the establishment or designation of an en-
tity of the State government to collect the data de-
scribed in subparagraph (A) and to regularly report
such data to the Secretary.
‘‘(c) STATE HEALTH ALLOWANCE PROGRAM DE-
SCRIBED.—
‘‘(1) ENROLLMENT OF PARTICIPATING INDIVID-
UALS IN APPROVED GROUP HEALTH PLANS.—In this
section, a State health allowance program is a pro-
177
•HR 3080 SC2
gram in effect in all the political subdivisions of the
State (except as provided in (c)) under which the
State makes payments to a group health plan (ap-
proved under paragraph (2)) which provides cov-
erage to the individual as an allowance towards the
costs of providing the individual with benefits under
the plan.
‘‘(2) APPROVED PLANS DESCRIBED.—For pur-
poses of paragraph (1), a State shall approve group
health plans in accordance with such standards as
the State may establish, except that—
‘‘(A) the State may not approve a plan for
a year unless the actuarial value of the benefits
provided by the plan (taking into account the
cost-sharing associated with the plan) for the
year—
‘‘(i) with respect to the first year for
which the plan is approved for purposes of
this subsection, is not less than the actuar-
ial value of the medical assistance provided
under the State plan under this title for
the year (as determined by the Secretary
without regard to medical assistance de-
scribed in paragraphs (4), (14), (15), (23),
or (24) of section 1905(a)); and
178
•HR 3080 SC2
‘‘(ii) with respect to any subsequent
year, is not greater than the amount deter-
mined under this subparagraph for the
preceding year, increased or decreased by
the amount (expressed as a percentage) by
which the actuarial value of the medical
assistance described in clause (i) for the
year exceeds or is less than the actuarial
value of such medical assistance for the
preceding year;
‘‘(B) at least one of the plans approved by
the State shall be a health maintenance organi-
zation or other plan under which payments are
otherwise made on a capitated basis for provid-
ing medical assistance to individuals enrolled in
the State plan under this title; and
‘‘(C) in the case of an individual who is en-
titled to benefits under the State plan under
this title as of the first month during which the
State health allowance program is in effect, an
approved plan may not require the individual to
contribute a greater amount of cost-sharing
than the individual would have been required to
contribute under the State plan (except as may
be imposed on an individual described in sub-