I
104TH CONGRESS
2D SESSION
H. R. 3013
To increase the availability and continuity of health coverage for individuals,
small employers, and other groups, to reduce paperwork and simplify
administration of health care claims, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 5, 1996
Mr. NEY introduced the following bill; which was referred to the Committee
on Commerce, and in addition to the Committees on Economic and Edu-
cational Opportunities and Ways and Means, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
A BILL
To increase the availability and continuity of health coverage
for individuals, small employers, and other groups, to
reduce paperwork and simplify administration of health
care claims, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Insurance and Health Care Reform Act of 1995’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—HEALTH INSURANCE REFORMS
Subtitle A—Improving Access to and Continuity of Coverage
Sec. 101. Limitation on pre-existing conditions provisions in the small employer
market.
Sec. 102. Assurance of continuity of coverage through previous satisfaction of
pre-existing condition requirement.
Sec. 103. Requirements relating to renewability generally.
Sec. 104. Limits on premiums and other rating practices in the small employer
market.
Sec. 105. Small employer purchasing groups.
Subtitle B—Open Enrollment and Related Practices
Sec. 111. Enrollment guidelines.
Subtitle C—Preemption of State Mandated Benefits, Anti-managed Care
Laws, and State Insurance Standards
Sec. 121. Preemption from State mandated benefits.
Sec. 122. Preemption of State law restrictions on managed care arrangements.
Sec. 123. Preemption of State insurance standards.
Subtitle D—Administrative Simplification
Sec. 131. Adoption of data elements, uniform claims, and uniform electronic
transmission standards.
Sec. 132. Application of standards.
Sec. 133. Periodic review and revision of standards.
Subtitle E—Restriction on Genetic Screening and Testing
Sec. 141. Genetic screening and testing restrictions in health insurance.
Subtitle F—Administrative Expenses
Sec. 151. Limitation on administrative expenses.
Subtitle G—Limitations on Balance Billing
Sec. 161. Medicare program.
Sec. 162. Other programs.
Subtitle H—Enforcement; General Definitions
Sec. 171. General enforcement.
Sec. 172. General definitions.
TITLE II—EXTENSION OF PREVENTIVE PUBLIC HEALTH
Sec. 201. Immunizations against vaccine-preventable diseases.
Sec. 202. Prevention, control, and elimination of tuberculosis.
Sec. 203. Lead poisoning prevention.
TITLE III—TAX PROVISIONS
Sec. 301. Increased deduction for health insurance costs of self-employed indi-
viduals.
Sec. 302. Safe harbor for health care providers otherwise exempt under
501(c)(3) or (4) which affiliate with certain health entities.
TITLE I—HEALTH INSURANCE
REFORMS
Subtitle A—Improving Access to
and Continuity of Coverage
SEC. 101. LIMITATION ON PRE-EXISTING CONDITIONS PRO-
VISIONS IN THE SMALL EMPLOYER MARKET.
(a) IN GENERAL.—An insurer may impose a pre-ex-
isting conditions provision (as defined in subsection (b))
with respect to an individual under a health benefit plan
covering small employers only if—
(1) the limitation or exclusion does not extend
for a period beyond 12 months following the individ-
ual’s effective date of coverage under the plan and
only relates to conditions during the six months im-
mediately preceding the effective date of coverage;
and
(2) the limitation or exclusion does not apply to
an individual who, as of the date of birth, was cov-
ered under the plan.
(b) PRE-EXISTING
CONDITIONS
PROVISION
DE-
FINED.—In this title, the term ‘‘pre-existing conditions
provision’’ means a policy provision that excludes or limits
coverage for charges or expenses incurred during a speci-
fied period following the insured’s effective date of cov-
erage as to a condition which, during a specified period
immediately preceding the effective date of coverage, had
manifested itself in such a manner as would cause an ordi-
narily prudent person to seek medical advice, diagnosis,
care, or treatment or for which medical advice, diagnosis,
care or treatment was recommended or received, or a preg-
nancy existing on the effective date of coverage.
SEC. 102. ASSURANCE OF CONTINUITY OF COVERAGE
THROUGH PREVIOUS SATISFACTION OF PRE-
EXISTING CONDITION REQUIREMENT.
(a) IN GENERAL.—In determining whether a pre-ex-
isting conditions provision applies to an eligible employee
or dependent covered under any health benefit plan, the
plan shall credit the time the person was covered under
a previous health benefit plan if the previous coverage was
continuous to a date not more than 30 days prior to the
effective date of the new coverage, exclusive of any appli-
cable service waiting period under the plan.
(b) TREATMENT OF WAITING PERIODS.—In applying
subsection (a), any waiting period, which may not exceed
90 days, imposed by an employer before an employee is
eligible to be covered under a plan shall be treated as a
period in which the employee was covered under a health
benefit plan.
SEC. 103. REQUIREMENTS RELATING TO RENEWABILITY
GENERALLY.
(a) MULTIPLE
EMPLOYER
WELFARE
ARRANGE-
MENTS.—A multiple employer welfare arrangement may
not cancel coverage or deny renewal of coverage under
such a plan with respect to an employer other than—
(1) for nonpayment of contributions;
(2) for fraud or other misrepresentation by the
employer;
(3) for noncompliance with plan provisions; and
(4) because the plan is ceasing to provide any
coverage in a geographic area.
(b) INSURERS.—An insurer may not cancel a health
benefit plan or deny renewal of coverage under such a plan
other than—
(1) for nonpayment of premiums;
(2) for fraud or other misrepresentation by the
insured;
(3) for noncompliance with plan provisions;
(4) in the case of a plan issued to a small em-
ployer, for failure to maintain minimum participa-
tion rates (consistent with subsection (d)); or
(5) because the insurer is ceasing to provide
any health benefit plan in a State, or, in the case
of an HMO, in a geographic area.
(c) LIMITATION ON MARKET RE-ENTRY.—If an in-
surer ceases to offer health benefit plans to employers in
a geographic area, the insurer may not offer such a health
benefit plan to any employer in the geographic area until
5 years after the date of the termination.
(d) MINIMUM PARTICIPATION RATES.—An insurer
may require, with respect to a health benefit plan issued
to a small employer, that a minimum percentage of eligible
employees who do not otherwise have health insurance are
enrolled in such plan if such percentage is applied uni-
formly to all plans offered to employers of comparable size.
(e) UNDERWRITING AND SELECTIVE EXCLUSION.—
(1) IN GENERAL.—Except as provided in this
subsection, an insurer may underwrite and rate
small employer groups using accepted underwriting
and actuarial practices.
(2) PROHIBITION OF HEALTH STATUS UNDER-
WRITING.—Subject to paragraph (3), an insurer
shall not exclude any eligible employee or dependent,
who would otherwise be covered under a health bene-
fit plan offered by the insurer, on the basis of any
actual or expected health condition of the employee
or dependent.
(3) EXCLUSION
OF
LATE
ENROLLEES.—With
respect to an individual who is a late enrollee (as de-
fined in paragraph (4)), an insurer—
(A) may exclude the individual for a period
of up to 24 months or may, in the discretion of
the insurer, extend coverage to the individual at
any time during that period, and
(B) may medically underwrite the individ-
ual.
(4) LATE ENROLLEE.—In this title, the term
‘‘late enrollee’’ means an eligible employee or de-
pendent who requests enrollment in a small employ-
er’s health benefit plan following the initial enroll-
ment period provided under the terms of the first
plan for which the employee or dependent was eligi-
ble through the small employer, unless any of the
following apply:
(A) The individual—
(i) was covered under another em-
ployer-provided health benefit plan at the
time the individual was eligible to enroll;
(ii) states, at the time of the initial
eligibility, that coverage under another em-
ployer health benefit plan was the reason
for declining enrollment;
(iii) has lost coverage under another
employer health benefit plan as a result of
the termination of employment, the termi-
nation of the other plan’s coverage, death
of a spouse, or divorce; and
(iv) requests enrollment within 30
days after the termination of coverage
under another employer health benefit
plan.
(B) The individual is employed by an em-
ployer who offers multiple health benefit plans
and the individual elects a different health ben-
efit plan during an open enrollment period.
(C) A court has ordered coverage to be
provided for a spouse or minor child under a
covered employee’s plan and a request for en-
rollment is made within 30 days after issuance
of the court order.
SEC. 104. LIMITS ON PREMIUMS AND OTHER RATING PRAC-
TICES IN THE SMALL EMPLOYER MARKET.
(a) LIMITS ON PREMIUMS.—
(1) LIMIT ON VARIATION OF RATES.—
(A) NEW
ISSUANCE.—With respect to a
health benefit plan offered to small employers
by an insurer and issued on or after the date
of the enactment of this Act, the premium rates
charged or offered for a rating period for the
same or similar coverage under the plan cover-
ing any small employer with similar case char-
acteristics may not vary from the applicable
midpoint rate by more than 35 percent of the
midpoint rate.
(B) CURRENT ISSUANCE.—
(i) IN
GENERAL.—If the premium
rate charged or offered for the same or
similar coverage under the plan covering
any small employer with similar case char-
acteristics exceeds the applicable midpoint
rate by more than 35 percent, any increase
in premium for a new rating period shall
not exceed the sum of the following:
(I) BASE PREMIUM INCREASE.—
Subject to clause (ii), any percentage
change in the base premium rate
measured from the first day of the
prior rating period to the first day of
the new rating period.
(II) ADJUSTMENT
FOR
CASE
CHARACTERISTICS.—Any adjustment
due to change in case characteristics
or plan design of the small employer,
as determined by the insurer.
(ii) LIMITATION.—Any increase in
premium rates for a new rating period
shall not exceed any percentage change in
the base premium rate measured from the
first day of the prior rating period to the
first day of the new rating period plus 15
percent, adjusted on a pro rata basis for
rating periods greater or less than one
year and adjustments due to a change in
case characteristics or plan design of the
small employer.
(iii) RATING PERIOD.—For purposes
of this subsection, an insurer shall treat all
health benefit plans covering small employ-
ers issued or renewed in the same calendar
month as having the same rating period.
(C) LIMITATION
ON
VARIATION
DUE
TO
USE OF INDUSTRY AS CASE CHARACTERISTIC.—
If an insurer uses industry as a case char-
acteristic in establishing premium rates, the
rate factor associated with any industry classi-
fication may not vary by more than 15 percent
from the arithmetic average of the rate factors
associated with all industry classifications.
(2) LIMIT ON VARIATION OF PREMIUM RATES
WITHIN A CLASS A BUSINESS.—For a class of busi-
ness (as defined in subsection (e)(3)) of an insurer,
the highest premium rates charged during a rating
period to small employers with similar case charac-
teristics for the same or similar coverage, or the
highest rates which could be charged to such em-
ployers under the rating system for that class of
business, shall not exceed an amount that is 1.5
times the base premium rate for the class of busi-
ness for a rating period (or portion thereof) that oc-
curs in the first 3 years in which this section is in
effect, and 1.35 times the base premium rate there-
after.
(3) LIMIT
ON
TRANSFER
OF
EMPLOYERS
AMONG CLASSES OF BUSINESS.—An insurer may not
involuntarily transfer a small employer into or out of
a class of business. An insurer may not offer to
transfer a small employer into or out of a class of
business unless such offer is made to transfer all
small employers in the class of business without re-
gard to claim experience, health status, or duration
of coverage since issue.
(b) FULL DISCLOSURE OF RATING PRACTICES.—At
the time an insurer offers a health benefit plan to a small
employer, the insurer shall fully disclose to the employer
rating practices applicable to such plan.
(c) ACTUARIAL CERTIFICATION.—Each insurer that
offers a health benefit plan to a small employer in a State
shall file annually with the State commissioner of insur-
ance a written statement by a member of the American
Academy of Actuaries (or other individual acceptable to
the commissioner) that, based upon an examination by the
individual which includes a review of the appropriate
records and the actuarial assumptions of the insurer and
methods used by the insurer in establishing premium rates
for applicable health benefit plans—
(1) the insurer is in compliance with the appli-
cable provisions of this section; and
(2) the rating methods are actuarially sound.
Each such insurer shall retain a copy of such statement
for examination at its principal place of business.
(d) REGISTRATION AND REPORTING.—Each insurer
that issues any health benefit plan to a small employer
in a State shall be registered or licensed with the State
commissioner of insurance and shall comply with any re-
porting requirements of the commissioner relating to such
a plan.
(e) DEFINITIONS.—In this section:
(1) BASE
PREMIUM
RATE.—The term ‘‘base
premium rate’’ means, as to any health benefit plan
that is issued by an insurer and that covers more
than 1 but less than 51 employees of a small em-
ployer, the lowest premium rate for a new or exist-
ing business for same or similar coverage covering
any small employer with small case characteristics.
(2) CASE CHARACTERISTICS.—The term ‘‘case
characteristics’’ means, with respect to a small em-
ployer, any of the following:
(A) The geographic area in which the em-
ployees reside.
(B) The age and sex of the individual em-
ployees and their dependents.
(C) The appropriate industry classification
as determined by the insurer.
(D) The number of employees and depend-
ents.
(E) Such other objective criteria as may be
established by the insurer, but not including
claims experience, health status, or duration of
coverage from the date of issue.
(3) CLASS OF BUSINESS.—The term ‘‘class of
business’’ means, with respect to an insurer, all (or
a distinct group of) small employers as shown on the
records of the insurer.
(4) MIDPOINT RATE ‘‘midpoint rate’’ means, for
small employers with similar case characteristics and
plan designs and as determined by the applicable in-
surer for a rating period, the arithmetic average of
the applicable base premium rate and the cor-
responding highest premium rate.
SEC. 105. SMALL EMPLOYER PURCHASING GROUPS.
(a) SMALL EMPLOYER PURCHASING GROUPS DE-
SCRIBED.—
(1) IN GENERAL.—As used in this section, the
term ‘‘small employer purchasing group’’ means an
organization that—
(A) has a membership consisting solely of
small employers;
(B) is administered solely under the au-
thority and control of its member employers;
(C) with respect to each State in which its
members are located, consists of not fewer than
the number of small employers established by
the State as appropriate for such a group;
(D) offers a program to assist such small
employer members to obtain coverage for their
employees under one or more health benefit
plans; and
(E) is not directly or indirectly controlled,
through voting membership, representation on
its governing board or otherwise, by an insurer,
agent, broker, or any other individual or entity
engaged in the sale of insurance, provider, or by
persons who are officers, trustees, or directors
of such enterprises.
(2) SPECIAL RULE.—An employer member of a
small employer purchasing group that meets the re-
quirements of paragraph (1) may retain its member-
ship in the group if the number of employees of the
employer increases such that the employer is no
longer a small employer.
(b) AUTHORITY.—A small employer purchasing
group established under this section may do any of the
following:
(1) OFFERING HEALTH BENEFIT PLANS.—Ne-
gotiate and enter into agreements with one or more
insurers for the insurers to offer and provide one or
more health benefit plans to small employers for
their employees and retirees, and the dependents
and members of the families of such employees and
retirees, which coverage may be made available to
enrolled small employers without regard to indus-
trial, rating, or other classifications, and for the pur-
chasing group to perform, or contract with others
for the performance of, functions for or with respect
to such purchasing group.
(2) CONTRACTS WITH OTHER GROUPS.—Con-
tract with another small employer purchasing group
for the inclusion of the small employer members of
one in the program of the other.
(3) INFORMATION DISSEMINATION.—Provide or
cause to be provided to small employers information
concerning the availability coverage, benefits, pre-
miums, and other information regarding purchasing
groups.
(4) ADMINISTRATION.—Provide, or contract
with others to provide, enrollment, recordkeeping, in-
formation, premium billing, collection and transmit-
tal, and other services for a purchasing group.
(5) AUDITS.—Receive reports and information
from the insurer and negotiate and enter into agree-
ments with respect to inspection and audit of the
books and records of the insurer.
(c) LIMITATION ON ACTIVITIES.—A small employer
purchasing group may not—
(1) perform any activity involving approval or
enforcement of payment rates for providers;
(2) assume financial risk in relation to any
health benefit plan; or
(3) perform other activities identified by the
State as being inconsistent with the performance of
its duties under this section.
(d) RULES OF CONSTRUCTION.—
(1) ESTABLISHMENT NOT REQUIRED.—Nothing
in this section shall be construed as requiring—
(A) that a State organize, operate, or oth-
erwise establish a small employer purchasing
group, or otherwise require the establishment of
purchasing groups; and
(B) that there be only one small employer
purchasing group established with respect to a
community rating area.
(2) ELIGIBILITY REQUIREMENTS.—Nothing in
this section shall be construed as inhibiting or pre-
venting a small employer purchasing group from
adopting, imposing, and enforcing rules, conditions,
limitations, or restrictions that are based on factors
other than the health status of employees or their
dependents for the purpose of determining whether
a small employer is eligible to become a member of
a purchasing group.
(e) RECEIPT OF PREMIUMS.—
(1) 
ENROLLMENT
CHARGE.—The 
amount
charged by a small employer purchasing group for
coverage under a health benefit plan shall be equal
to the sum of—
(A) the premium rate offered by such
health plan;
(B) the administrative charge for such
health plan; and
(C) the purchasing group administrative
charge for enrollment of eligible employees, eli-
gible individuals and certain uninsured individ-
uals through the group.
(2) DISCLOSURE OF PREMIUM RATES AND AD-
MINISTRATIVE CHARGES.—Each small employer pur-
chasing group shall, prior to the time of enrollment,
disclose to enrollees and other interested parties the
premium rate for a health benefit plan, administra-
tive charge for such plan, and administrative charge
of the group, separately.
(f) SPECIAL RULES.—No health benefit plan offered
or provided by an insurer to a small employer in a small
employer purchasing group is subject to any law that does
any of the following:
(1) SELECTIVE CONTRACTING.—Inhibits the in-
surer from selectively contracting with providers or
groups of providers with respect to health care serv-
ice or benefits.
(2) PAYMENT NEGOTIATION.—Imposes any re-
strictions on the ability of the insurer to negotiate
with providers regarding the level or method of reim-
bursing for care or services.
(3) BENEFIT
OR
PROVIDER
MANDATES.—Re-
quires the reimbursement, utilization, or consider-
ation of a specific category of health care services or
benefits.
(4) BENEFICIARY INCENTIVES.—Limits the fi-
nancial incentives that a health benefit plan may re-
quire a beneficiary to pay when a nonplan provider
is used on a nonemergency basis.
(5) UTILIZATION REVIEW.—(A) Prohibits utili-
zation review of any or all treatments and condi-
tions, (B) requires the use of specified standards of
health care practice in such reviews or requires the
disclosure of the specific criteria used in such re-
views, (C) requires payments to providers for the ex-
penses of responding to utilization review requests,
or (D) imposes liability for delays in performing
such review.
Subtitle B—Open Enrollment and
Related Practices
SEC. 111. ENROLLMENT GUIDELINES.
(a) REQUIREMENT OF OPEN ENROLLMENT.—
(1) IN
GENERAL.—Beginning in January of
each year, each insurer shall accept applicants for
open enrollment coverage described in paragraph (2)
or (3) in the order in which they apply for coverage,
subject to subsection (f).
(2) SMALL EMPLOYERS.—In the case of an ap-
plicant that is a small employer, the applicant must
accept the employer if coverage is not otherwise
available and if coverage had not been terminated by
the employer (or by an insurer with respect to the
employer) during the preceding 12-month period.
(3) INDIVIDUALS.—In the case of an applicant
that is an individual, the applicant—
(A) is not applying for coverage as an em-
ployee of an employer, as a member of an asso-
ciation, or as a member of any other group; and
(B) is not covered, and is not eligible for
coverage, under any other private or public
health benefits arrangement, including the Med-
icare program under title XVIII of the Social
Security Act or any other Act of Congress or
law of any State that provides benefits com-
parable to the benefits provided under this sec-
tion or any conversion or continuation of cov-
erage policy under State or Federal law.
(b) MINIMUM COVERAGE.—An insurer shall provide
to any individual or small employer group accepted under
this section a health benefit plan that provides, at a mini-
mum, coverage of the following health care services, when
such services are provided within the scope of authorized
practice by the applicable licensed providers:
(1) Major medical.
(2) Hospital services.
(3) Basic medical-surgical services, both inpa-
tient and outpatient medical and surgical services,
diagnostic services, anesthesia services, and con-
sultation services.
(4) Prescription drugs, insulin, syringes, diag-
nostic x-rays and laboratory tests.
(5) Screening by low-dose mammography for
the presence of breast cancer and cytologic screening
for the presence of cervical cancer in accordance
with standards of the National Cancer Institute.
(6) Maternity services.
(c) PREEXISTING CONDITIONS PROVISIONS.—Health
benefit plans issued under this section may establish pre-
existing conditions provisions (as defined in section
101(b)) that exclude or limit coverage for a period of up
to 12 months (or 24 months in the case of a late enrollee,
as defined in section 101(e)(4) and at the option of the
insurer) following the individual’s effective date of cov-
erage and that may relate only to conditions during the
6 months immediately preceding the effective date of cov-
erage.
(d) PREMIUMS.—
(1) SMALL EMPLOYERS.—Premiums charged to
small employers under this section may not exceed
an amount that is 11⁄2 times the highest rate
charged any other small employer with similar case
characteristics for same or similar coverage.
(2) INDIVIDUALS.—Premiums charged to indi-
viduals under this section may not exceed an amount
that is 11⁄2 times the highest rate charged to any
other individual of the same age and gender for
same or similar coverage. If the insurer does not
have established individual rates in a State, the pre-
mium charged to individuals may not exceed an
amount that is 11⁄2 times the rate charged a small
employer with case characteristics similar to the in-
dividual seeking coverage for same or similar cov-
erage.
(e) USE OF NETWORKS.—In offering health benefit
plans under this section, an insurer may require the pur-
chase of health benefit plans that condition the reimburse-
ment of health services upon the use of a specific network
of providers.
(f) LIMITATION ON NUMBER OF NEW INSUREDS RE-
QUIRED TO ACCEPT.—
(1) IN GENERAL.—An insurer is not required to
accept annually under this section either individuals
or small employers that, in the aggregate, would
cause the insurer to have a total number of new
insureds under this section that is more than 1⁄2 per-
cent per year of its total number of insured individ-
uals or small group certificate holders, calculated as
of the immediately preceding 31st day of December
and excluding Medicare supplemental policies and
conversion or continuation of coverage policies under
State or Federal law.
(2) CERTIFICATION.—An officer of the insurer
shall certify to the State commissioner of insurance
of its domiciliary State when it has met the enroll-
ment limit under paragraph (1). Upon providing
such certification, the insurer shall be relieved of its
open enrollment requirement under this section for
the remainder of the calendar year.
(g) LIMITATION ON ACCEPTANCE OF CERTAIN CON-
FINED INDIVIDUALS.—An insurer shall not be required to
accept under this section applicants who, at the time of
enrollment, are confined to a health care facility because
of chronic illness, permanent injury, or other infirmity
that would cause economic impairment to the insurer if
the applicants were accepted, or to make the effective date
of benefits for individuals or groups accepted under this
section earlier than 90 days after the date of acceptance.
(h) NO APPLICATION TO INSOLVENT INSURERS.—
The requirements of this section do not apply to any in-
surer that is in a state of supervision, insolvency, or liq-
uidation. If the insurer demonstrates to the satisfaction
of the State commissioner of insurance of the insurer’s
domiciliary State that the application of the requirements
of this section would place the insurer in a State of super-
vision, insolvency, or liquidation, the commissioner may
waive or modify the requirements of subsection (a) and
(f). The actions of the commissioner under this subsection
shall be effective for a period of not more than 1 year.
At the expiration of such time, a new showing of need
for a waiver or modification by the insurer shall be made
before a new waiver or modification is issued or imposed.
(i) LIMITATION ON AGENT COMPENSATION.—No in-
surer shall pay or allow, or cause to be paid or allowed,
and no agent shall accept, or agree to receive or accept,
any commission, consideration, money, or other thing of
value in excess of 5 percent of the premium charged for
initial placement or for otherwise securing the issuance of,
or in excess of 4 percent of the premium charged for the
renewal of, a policy or contract issued to an individual or
small employer group under this section. The Secretary
may adopt such rules as are necessary to enforce this sub-
section.
(j) EXCLUSION OF CERTAIN POLICIES.—This section
does not apply to any policy that provides coverage for
specified diseases or accidents only or to any hospital in-
demnity, Medicare supplement, long-term care, disability
income, one-time-limited-duration policy of no longer than
6 months, or other policy that offers only supplemental
benefits.
Subtitle C—Preemption of State
Mandated Benefits, Anti-man-
aged Care Laws, and State In-
surance Standards
SEC. 121. PREEMPTION FROM STATE MANDATED BENEFITS.
Effective as of January 1, 1996, no State shall estab-
lish or enforce any law or regulation that—
(1) requires the offering, as part of health in-
surance coverage, of any services, category of care,
or services of any class or type of provider; or
(2) specifies the individuals to be provided
health insurance coverage or the duration of such
coverage.
SEC. 122. PREEMPTION OF STATE LAW RESTRICTIONS ON
MANAGED CARE ARRANGEMENTS.
Effective as of January 1, 1996—
(1) a State may not prohibit or limit an insurer
or health benefit plan providing health coverage
from including incentives for enrollees to use the
services of participating providers;
(2) a State may not prohibit or limit such in-
surer or plan from limiting coverage of services to
those provided by a participating provider;
(3) a State may not prohibit or limit the nego-
tiation of rates and forms of payments for providers
by such insurer or plan with respect to health cov-
erage;
(4) a State may not prohibit or limit such in-
surer or plan from limiting the number of participat-
ing providers; and
(5) a State may not prohibit or limit such in-
surer or plan from requiring that services be pro-
vided (or authorized) by a practitioner selected by
the enrollee from a list of available participating pro-
viders or from requiring enrollees to obtain referral
in order to have coverage for treatment by a special-
ist or health institution.
SEC. 123. PREEMPTION OF STATE INSURANCE STANDARDS.
A State may not establish or enforce standards for
health insurance coverage made available in the individual
and small group markets that are different from the
standards established under this title, unless the State has
already established or has been enforcing such standards
for health insurance coverage prior to the effective date
of this title.
Subtitle D—Administrative
Simplification
SEC. 
131. 
ADOPTION 
OF 
DATA 
ELEMENTS, 
UNIFORM
CLAIMS, AND UNIFORM ELECTRONIC TRANS-
MISSION STANDARDS.
(a) IN GENERAL.—The Secretary of Health and
Human Services (in this subtitle referred to as the ‘‘Sec-
retary’’) shall adopt standards relating to each of the fol-
lowing:
(1) DATA ELEMENTS.—Data elements for use
in paper and electronic claims processing under
health benefit plans, as well as for use in utilization
review and management of care (including data
fields, formats, and medical nomenclature, and in-
cluding plan benefit and insurance information).
(2) UNIFORM CLAIMS FORMS.—Uniform claims
forms (including uniform procedure and billing codes
for use with such forms and including information
or other health benefit plans that may be liable for
benefits).
(3) UNIFORM
ELECTRONIC
TRANSMISSION.—
Uniform electronic transmission of the date elements
(for purposes of billing and utilization review).
The standards under paragraph (3) (relating to electronic
transmission of data elements) for claims for services)
shall supersede (to the extent specified in such standards)
the standards adopted under paragraph (2) (relating to
the submission of paper claims) for such services. The
standards under paragraph (3) shall include protections
to assure the confidentiality of patient-specific information
and to protect against the unauthorized use and disclosure
of information.
(b) USE OF TASK FORCES.—In adopting standards
under this section, the Secretary shall—
(1) take into account the recommendations of
current task forces;
(2) consult with the National Association of In-
surance Commissioners (and, with respect to stand-
ards under subsection (a)(3), the American National
Standards Institute); and
(3) to the maximum extent practicable, seek to
make the standards consistent with any uniform
clinical data sets which have been adopted and are
widely recognized.
(c) DEADLINES
FOR PROMULGATION.—The Sec-
retary shall promulgate the standards under—
(1) subsection (a)(1) relating to claims process-
ing data, by not later than 12 months after the date
of the enactment of this Act;
(2) subsection (a)(2) (relating to uniform
claims forms) by not later than 12 months after the
date of the enactment of this Act; and
(3)(A) subsection (a)(3) relating to trans-
mission of information concerning hospital and phy-
sicians services, by not later than 24 months after
the date of the enactment of this Act; and
(B) subsection (a)(3) relating to transmission
of information on other services by such later date
as the Secretary may determine it to be feasible.
SEC. 132. APPLICATION OF STANDARDS.
(a) IN GENERAL.—If the Secretary determines, at
the end of the 2-year period beginning on the date that
standards are adopted under section 131 with respect to
classes of services, that a significant number of claims for
benefits for such services under health benefit plans are
not being submitted in accordance with such standards,
the Secretary may require, after notice in the Federal
Register of not less than 6 months, that all providers of
such services must submit claims to health benefit plans
in accordance with such standards. The Secretary may
waive the application of such a requirement in such cases
as the Secretary finds that the imposition of the require-
ment would not be economically practicable.
(b) SIGNIFICANT NUMBER.—The Secretary shall
make an affirmative determination described in subsection
(a) for a class of services only if the Secretary finds that
there would be a significant, measurable, additional gain
in efficiencies in the health care system that would be ob-
tained by imposing the requirement described in such
paragraph with respect to such services.
(c) APPLICATION OF REQUIREMENT.—
(1) IN GENERAL.—If the Secretary imposes the
requirement under subsection (a)—
(A) in the case of a requirement that im-
poses the standards relating to electronic trans-
mission of claims for a class of services, each
health care provider that furnishes such services
for which benefits are payable under a health
benefit plan shall transmit electronically and di-
rectly to the plan on behalf of the beneficiary
involved a claim for such services in accordance
with such standards;
(B) any health benefit plan may reject any
claim subject to the standards adopted under
section 131 but which is not submitted in ac-
cordance with such standards;
(C) it is unlawful for a health benefit
plan—
(i) to reject any such claim on the
basis of the form in which it is submitted
if it is submitted in accordance with such
standards; or
(ii) to require, for the purpose of utili-
zation review or as a condition of providing
benefits under the plan, a provider to
transmit medical data elements that are
inconsistent with the standards established
under section 131; and
(D) the Secretary may impose a civil
money penalty on any provider that knowingly
and repeatedly submits claims in violation of
such standards or on any health benefit plan
(other than a health benefit plan described in
paragraph (2)) that knowingly, and repeatedly
rejects claims in violation of subparagraph (B),
in an amount not to exceed $100 for each such
claim.
The provisions of section 1128A of the Social Secu-
rity Act (other than the first sentence of subsection
(a) and other than subsection (b)) shall apply to a
civil money penalty under subparagraph (D) in the
same manner as such provisions apply to penalty or
proceeding under section 1128 of such Act.
(2) PLANS SUBJECT TO EFFECTIVE STATE REG-
ULATION.—A plan described in this paragraph is a
health benefit plan—
(A) that is subject to regulation by a
State; and
(B) with respect to which the Secretary
finds that—
(i) the State provides for application
of the standards established under section
131; and
(ii) the State regulatory program pro-
vides for the appropriate and effective en-
forcement of such standards.
(d) TREATMENT OF REJECTIONS.—If a plan rejects
a claim pursuant to subsection (c), the plan shall permit
the person submitting the claim a reasonable opportunity
to resubmit the claim on a form or in an electronic manner
that meets the requirements for acceptance of the claim
under such subsection.
SEC. 133. PERIODIC REVIEW AND REVISION OF STAND-
ARDS.
(a) IN GENERAL.—The Secretary shall—
(1) provide for the ongoing receipt and review
of comments and suggestions for changes in the
standards adopted and promulgated under section
131;
(2) establish a schedule for the periodic review
of such standards; and
(3) based upon such comments, suggestions,
and review, revise such standards and promulgate
such revisions.
(b) APPLICATION OF REVISED STANDARDS.—If the
Secretary under subsection (a) revises the standards de-
scribed in section 131, then, in the case of any claim for
benefits submitted under a health benefit plan more than
the minimum period (of not less than 6 months specified
by the Secretary) after the date the revision is promul-
gated under subsection (a), such standards shall apply
under section 132 instead of the standards previously pro-
mulgated.
Subtitle E—Restriction on Genetic
Screening and Testing
SEC. 141. GENETIC SCREENING AND TESTING RESTRIC-
TIONS IN HEALTH INSURANCE.
(a) IN GENERAL.—No insurer, in processing an ap-
plication for coverage under a health benefit plan or in
determining insurability under such plan, shall do any of
the following:
(1) Require an individual seeking coverage to
submit to genetic screening or testing (as defined in
subsection (g)).
(2) Take into consideration, other than in ac-
cordance with subsection (f), the results of genetic
screening or testing.
(3) Make any inquiry to determine the results
of genetic screening or testing.
(4) Make a decision adverse to the applicant
based on entries in medical records or other reports
of genetic screening or testing.
(b) NO QUESTIONS.—In developing and asking ques-
tions regarding medical histories of applicants for an indi-
vidual or group health benefit plan, no insurer shall ask
for the results of genetic screening or testing or ask ques-
tions designed to ascertain the results of genetic screening
or testing.
(c) NO CANCELLATION.—No insurer shall cancel or
refuse to issue or renew coverage under a health benefit
plan based on the results of genetic screening or testing.
(d) NO BENEFIT LIMITATION.—No insurer shall de-
liver, issue for delivery, or renew an individual or group
health benefit plan that limits benefits based on the results
of genetic screening or testing.
(e) USE OF VOLUNTARY TESTING.—Notwithstanding
the previous provisions of this section, an insurer may con-
sider the results of genetic screening or testing if the re-
sults are voluntarily submitted by an applicant for cov-
erage or renewal of coverage and the results are favorable
to the applicant.
(f) GENETIC SCREENING OR TESTING DEFINED.—
As used in this section, the term ‘‘genetic screening or
testing’’ means a laboratory test of a person’s genes or
chromosomes for abnormalities, defects, or deficiencies, in-
cluding carrier status, that are linked to physical or men-
tal disorders or impairments, or that indicate a suscepti-
bility to illness, disease, or other disorders, whether phys-
ical or mental, which test is a direct test for abnormalities,
defects, or deficiencies, and not an indirect manifestation
of genetic disorders.
Subtitle F—Administrative
Expenses
SEC. 151. LIMITATION ON ADMINISTRATIVE EXPENSES.
(a) IN GENERAL.—The following apply to every in-
surer with respect to administrative expenses for sickness
and accident insurance business of the insurer offered in
each State:
(1) For calendar year 1996, each insurer shall
have aggregate administrative expenses for such
business of no more than 40 percent of the premium
income of the insurer for such business, based on
the premiums received in that year on the sickness
and accident insurance business of the insurer.
(2) For calendar year 1997, each insurer shall
have aggregate administrative expenses of no more
than 30 percent of the premium income of the in-
surer, based on the premiums received in that year
on the sickness and accident insurance business of
the insurer.
(3) For calendar year 1998, each insurer shall
have aggregate administrative expenses of no more
than 25 percent of the premium income of the in-
surer, based on the premiums received in that year
on the sickness and accident insurance business of
the insurer.
(4) For calendar year 1999 and each calendar
year thereafter, each insurer shall have aggregate
administrative expenses of no more than 20 percent
of the premium income of the insurer, based on the
premiums received in that year on the sickness and
accident insurance business of the insurer.
(b) ANNUAL STATEMENT.—Each insurer, during the
first 2 months of each year (beginning with 1997), shall
annually prepare, under oath, and deposit in the office of
the commissioner of insurance of the insurer’s State of
domicile, a statement of the aggregate administrative ex-
penses of the insurer, based on the premiums received in
the immediately preceding calendar year on the sickness
and accident insurance business of the insurer.
(c) DEFINITIONS.—As used in this section:
(1) ADMINISTRATIVE EXPENSE.—
(A) IN GENERAL.—The term ‘‘Administra-
tive expense’’ means the amount of premiums
received by the insurer for sickness and acci-
dent insurance business, minus the sum of the
following:
(i) The amount of claims for losses
paid.
(ii) The amount of losses incurred but
not reported.
(iii) The amount paid for State fees,
Federal and State taxes, and reinsurance.
(iv) The amount paid for commis-
sions.
(B) EXCLUSION OF ERISA ITEMS.—Such
term does not include any amounts collected, or
administrative expenses incurred, by an insurer
for the administration of an employee health
benefit plan subject to regulation by the Em-
ployee Retirement Income Security Act of 1974.
In the previous sentence, the term ‘‘amount col-
lected or administrative expenses incurred’’
means the total amount paid to an adminis-
trator for the administration and payment of
claims minus the sum of the amount of claims
for losses paid and the amount of losses in-
curred but not reported.
(2) SICKNESS AND ACCIDENT INSURANCE BUSI-
NESS.—The term ‘‘sickness and accident insurance
business’’ does not include—
(A) coverage provided by an insurer for
specific diseases or accidents only;
(B) any hospital indemnity, Medicare sup-
plement, long-term care, disability income, one-
time-limited-duration policy of no longer than 6
months, or other policy that offers only supple-
mental benefits; or
(C) coverage provided to individuals who
are not residents of the State involved.
Subtitle G—Limitations on Balance
Billing
SEC. 161. MEDICARE PROGRAM.
(a) IN GENERAL.—Section 1848(g)(2)(B) of the So-
cial Security Act (42 U.S.C. 1395w–4(g)(2)(B)) is amend-
ed by striking ‘‘115 percent’’ and inserting ‘‘105 percent’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to charges for items and services
furnished on or after the first January 1 that occurs after
the date of the enactment of this Act.
SEC. 162. OTHER PROGRAMS.
(a) IN GENERAL.—No provider shall balance bill any
individual or dependent of an individual or any eligible em-
ployee or dependent of an employee for any health care
supplies or services provided to the individual or depend-
ent or the eligible employee or dependent, who is insured
under a health benefit plan. The provider shall accept pay-
ments made to it by the insurer under the terms of the
plan insuring or covering such individual as payment in
full for such health care supplies or services.
(b) BALANCED BILL DEFINED.—As used in this sec-
tion, the term ‘‘balance bill’’ means charging or collecting
an amount in excess of the amount reimbursable or pay-
able under a health benefit plan for such health care sup-
ply or service. Such term does not include charging for
or collecting copayments or deductibles required by the
plan.
Subtitle H—Enforcement; General
Definitions
SEC. 171. GENERAL ENFORCEMENT.
(a) INSURERS.—If a commissioner of insurance for
an insurer’s State of domicile determines that an insurer
has failed to comply with a requirement of subtitle A, B,
E, or F of this title applicable to the insurer, the commis-
sioner is responsible for suspending the insurer’s license
to do the business of sickness and accident insurance in
the State until the commissioner is satisfied that the in-
surer is in compliance with such requirements. If the in-
surer continues to do the business of sickness and accident
insurance in the State while under the suspension order,
the commissioner may impose a civil money penalty (speci-
fied by the commissioner) for each day of the violation.
Any funds collected by the commissioner under the pre-
vious sentence shall be deposited into the State treasury
to the credit of the operating fund for the commissioner.
(b) OTHER HEALTH BENEFIT PLANS.—Insofar as a
requirement under subtitle A, B, or F of this title applies
to a health benefit plan that is not offered by an insurer,
the Secretary of Health and Human Services, in consulta-
tion with the Secretary of Labor, shall take such actions
as may be appropriate to ensure enforcement with such
requirement. Such actions may include—
(1) an action in an appropriate court to enjoin
violations of such requirements, and
(2) a civil money penalty (of not to exceed
$50,000) for each violation of such a requirement.
SEC. 172. GENERAL DEFINITIONS.
As used in this title:
(1) COMMISSIONER OF INSURANCE.—The term
‘‘commissioner of insurance’’ includes a superintend-
ent of insurance.
(2) ELIGIBLE EMPLOYEE.—The term ‘‘eligible
employee’’ means an employee who works a normal
work week of 25 or more hours. Such term does not
include a temporary or substitute or seasonal em-
ployee who works only part of the calendar year.
(3) 
HEALTH
BENEFIT
PLAN.—The 
term
‘‘health benefit plan’’ means any contract or ar-
rangement under which an entity bears all or part
of the cost of providing health care items and serv-
ices. Such term includes a hospital or medical serv-
ice policy or certificate, hospital or medical service
plan contract, or health maintenance organization
group contract offered by an insurer, but does not
include any of the following:
(A) Coverage only for accident, dental, vi-
sion, disability, or long term care, Medicare
supplemental health insurance, or any combina-
tion thereof.
(B) Coverage issued as supplemental to li-
ability insurance.
(C) Workers’ compensation or similar in-
surance.
(D) Automobile medical-payment insur-
ance.
(E) Liability insurance, including general
liability insurance and automobile insurance.
(F) Coverage for a specified disease or ill-
ness.
(4) HMO.—The term ‘‘HMO’’ means an orga-
nization that is recognized under State law as an
HMO or managed care organization or a similar or-
ganization regulated under State law for solvency
and that offers health care services on a prepaid, at-
risk basis primarily through a defined set of provid-
ers.
(5) INSURER.—The term ‘‘Insurer’’ means—
(A) a licensed insurance company;
(B) an entity offering prepaid hospital or
medical services;
(C) an HMO; or
(D) a multiple small employer welfare ar-
rangement or other combination of small em-
ployers associated for the purpose of providing
health insurance plan coverage for their employ-
ers.
(6) PROVIDER.—The term ‘‘provider’’ means a
physician, hospital, pharmacy, laboratory, or other
person licensed or otherwise authorized under appli-
cable State laws to furnish health care items or serv-
ices.
(7) SMALL EMPLOYER.—The term ‘‘small em-
ployer’’ means, with respect to a calendar year, an
employer whose total employed work force consisted
of, on at least 50 percent of its working days during
the preceding year, more than 1 but less than 51 eli-
gible employees. For purposes of determining if an
employer is a small employer, rules similar to the
rules of subsections (B) of (C) of Section 414 of the
Internal Revenue Code of 1986 shall apply.
(8) STATE.—The term ‘‘State’’ means the 50
States, the District of Columbia, Puerto Rico, the
Virgin Islands, Guam, American Samoa, and the
Northern Mariana Islands.
TITLE II—EXTENSION OF
PREVENTIVE PUBLIC HEALTH
SEC. 201. IMMUNIZATIONS AGAINST VACCINE-PREVENT-
ABLE DISEASES.
Section 317(j)(1) of the Public Health Service Act
(42 U.S.C. 247b(j)(1)) is amended by striking ‘‘through
1995’’ and inserting ‘‘through 1999’’.
SEC. 202. PREVENTION, CONTROL, AND ELIMINATION OF
TUBERCULOSIS.
Section 317E(g)(1)(A) of the Public Health Service
Act (42 U.S.C. 247b–6(g)(1)(A)) is amended by striking
‘‘through 1998’’ and inserting ‘‘through 1999’’.
SEC. 203. LEAD POISONING PREVENTION.
Section 317A(l)(1) of the Public Health Service Act
(42 U.S.C. 247b–1(l)(1)) is amended by striking ‘‘through
1998’’ and inserting ‘‘through 1999’’.
TITLE III—TAX PROVISIONS
SEC. 301. INCREASED DEDUCTION FOR HEALTH INSUR-
ANCE COSTS OF SELF-EMPLOYED INDIVID-
UALS.
(a) PHASE-IN OF INCREASED DEDUCTION.—Para-
graph (1) of section 162(l) of the Internal Revenue Code
of 1986 (relating to special rules for health insurance costs
of self-employed individuals) is amended to read as fol-
lows:
‘‘(1) IN GENERAL.—
‘‘(A) DEDUCTION.—In the case of an indi-
vidual who is an employee within the meaning
of section 401(c)(1), there shall be allowed as
a deduction under this section an amount equal
to the applicable percentage of the amount paid
during the taxable year for insurance which
constitutes medical care for the taxpayer, his
spouse, and dependents.
‘‘(B) 
APPLICABLE
PERCENTAGE.—For
purposes of subparagraph (A), the applicable
percentage for any taxable year beginning in a
calendar year is the percentage determined in
accordance with the following table:
Calendar year:
Applicable percentage:
1996 ..........................................................................
30 percent
1997 ..........................................................................
55 percent
1998 ..........................................................................
75 percent
1999 or any subsequent year ....................................
100 percent.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 1995.
SEC. 302. SAFE HARBOR FOR HEALTH CARE PROVIDERS
OTHERWISE EXEMPT UNDER 501(c) (3) OR (4)
WHICH AFFILIATE WITH CERTAIN HEALTH
ENTITIES.
(a) IN GENERAL.—Section 501 of the Internal Reve-
nue Code of 1986 (relating to exemption from tax on cor-
porations, certain trusts, etc.) is amended by redesignat-
ing subsection (n) as subsection (o) and inserting after
subsection (m) the following new subsection:
‘‘(n) SAFE HARBOR FOR HEALTH CARE PROVIDERS
OTHERWISE EXEMPT UNDER SUBSECTION (c) (3) OR (4)
WHICH AFFILIATE WITH CERTAIN HEALTH ENTITIES.—
‘‘(1) IN GENERAL.—For purposes of this title,
a health care provider shall not be treated as failing
to be described in paragraph (3) or (4) of subsection
(c) for any taxable year solely for the reason that
such health care provider is affiliated with or con-
trolled by a qualified health entity (through a man-
agement services agreement, joint venture, member-
ship, or other arrangement) if such health care pro-
vider meets the requirements of paragraph (3) for
such year.
‘‘(2) BONDS ISSUED BY HEALTH CARE PRO-
VIDERS OTHERWISE EXEMPT UNDER SUBSECTION
(c)(3) WHICH AFFILIATE WITH CERTAIN HEALTH
ENTITIES.—
‘‘(A) IN GENERAL.—For purposes of this
title, obligations issued by a health care pro-
vider shall not be treated as failing to be de-
scribed in section 145(a) for any taxable year
solely for the reason that such health care pro-
vider is affiliated with or controlled by a quali-
fied health entity (through a management serv-
ices agreement, joint venture, membership, or
other arrangement) if such health care provider
meets the requirements of paragraph (3) for
such year.
‘‘(B) SPECIAL RULES FOR MERGERS, CON-
SOLIDATIONS, AND PARTNERSHIPS.—For pur-
poses of applying section 150 to an obligation
described in subparagraph (A), if the affiliation
or control referred to in subparagraph (A) is a
merger or consolidation, or the creation of a
partnership—
‘‘(i) property owned by the entity re-
sulting from such merger or consolidation
(or by such partnership) shall be treated as
owned by a 501(c)(3) organization to the
extent that such property was owned, on
the day preceding the affiliation date, by
the 501(c)(3) organization issuing such ob-
ligation, and
‘‘(ii) each trade or business of such
resulting entity (or such partnership) shall
be treated as a trade or business of a
501(c)(3) organization to the extent that
such trade or business was conducted, on
the day preceding the affiliation date, by
the 501(c)(3) organization issuing such ob-
ligation.
‘‘(C) AFFILIATION DATE.—For purposes of
subparagraph (B), the term ‘affiliation date’
means—
‘‘(i) with respect to a merger or con-
solidation, the date of such merger or con-
solidation, and
‘‘(ii) with respect to a partnership, the
date on which the property referred to in
section 150(b) is contributed to such part-
nership.
‘‘(D) OBLIGATIONS ISSUED TO REFUND.—
An obligation issued to refund an obligation de-
scribed in subparagraph (A) shall be treated as
described in subparagraph (A) if such refunding
obligation meets the requirements of subclauses
(I), (II), and (III) of section 144(a)(12)(A)(ii).
‘‘(3) REQUIREMENTS.—A health care provider
meets the requirements of this paragraph if, for the
taxable year, such health care provider—
‘‘(A)(i) assesses the health care needs of
the community in which the health care pro-
vider is located,
‘‘(ii) develops a written plan which states
the manner in which the health care provider
plans to meet such needs, consistent with the
purpose of the health care provider, and
‘‘(iii) makes the plan available in the same
manner as a return filed under section 6033 is
required to be made available under section
6104(e)(1),
‘‘(B) maintains a board of directors or
trustees, at least 50 percent of whom are rep-
resentatives of the community in which the
health care provider is located, and at least 80
percent of whom receive no compensation (di-
rectly or indirectly) from the health care pro-
vider for the taxable year for medical services
performed in connection with the health care
provider or as an officer of the health care pro-
vider,
‘‘(C) does not discriminate in the provision
of health care services on the basis of whether
an individual is insured by Medicare, Medicaid,
or a health care provider who contracts with a
State to provide health care services under a
government-sponsored health plan, and
‘‘(D) does not discriminate in the provision
of emergency health care services on the basis
of the patient’s ability to pay.
‘‘(4) DEFINITIONS.—For purposes of this sub-
section:
‘‘(A) HEALTH CARE PROVIDER.—The term
‘health care provider’ means any person whose
predominant activity is the provision of health
care services.
‘‘(B) HEALTH CARE SERVICES.—The term
‘health care services’ means any activity de-
scribed in section 213(d)(1)(A).
‘‘(C) QUALIFIED
HEALTH
ENTITY.—The
term ‘qualified health entity’ means any organi-
zation—
‘‘(i) the predominant activity of which
is the provision of health care services, or
‘‘(ii) a primary activity of which is the
provision of insurance relating to such
services,
either directly or through arrangements with
health care providers, to individuals enrolled
with the organization.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1995, except that the requirements of sec-
tion 501(n)(3)(B) of such Code (as added by this Act)
shall apply to taxable years beginning after December 31,
1996.
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