I
103D CONGRESS
1ST SESSION
H. R. 1965
To amend the Internal Revenue Code of 1986 to allow individuals a deduction
from gross income for contributions to health services savings account;
to amend the Social Security Act to provide for universal coverage
of basic health needs for all Americans; to expand Medicare to include
preventive and long-term care services; and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 4, 1993
Mr. REGULA introduced the following bill; which was referred jointly to the
Committees on Ways and Means, Energy and Commerce, and Education
and Labor
A BILL
To amend the Internal Revenue Code of 1986 to allow indi-
viduals a deduction from gross income for contributions
to health services savings account; to amend the Social
Security Act to provide for universal coverage of basic
health needs for all Americans; to expand Medicare to
include preventive and long-term care services; and for
other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION. 1. SHORT TITLE; REFERENCES
(a) SHORT TITLE.—This Act may be cited as the
‘‘Universal Coordinated Care Act of 1992.’’
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(b) REFERENCES.—Except as otherwise provided,
any reference to Secretary within this Act shall refer to
the Secretary of Health and Human Services.
(c) TABLE OF CONTENTS.—the table of contents of
this Act is as follows:
Sec. 1. Short title; references.
Sec. 2. Deductions for contributions to health services account.
(a) In general.
‘‘Sec. 223. Health service account contributions.
‘‘(a) Allowance of tax credit.
‘‘(b) Limitations.
‘‘(c) Health services account defined.
‘‘(d) Qualified health expenses defined.
‘‘(e) Establishment of health services supplemental policies.
‘‘(f) Tax treatment on distribution.
‘‘(g) Tax treatment of accounts.
‘‘(h) Additional definitions and special rules.
(b) Tax on excess contributions.
(c) Tax on prohibited transactions.
(d) Failure to provide reports.
(e) Clerical amendments.
Sec. 3. Coverage of home care benefits.
(a) In general.
(b) Definition of benefits.
(c) Conditions on payments for services.
(d) Limitations upon payment.
(e) Assurances of minimum standards in home care services.
‘‘TITLE XXI—HOME CARE SERVICES.
‘‘Sec. 2101. Funding home care services.
‘‘Sec. 2102. Survey of home health agencies.
‘‘Sec. 2103. Sanctions.
‘‘Sec. 2104. Licensing policies.
‘‘Sec. 2105. Definitions.
‘‘Sec. 2106. Authorization of appropriations.
(f) Effective date.
Sec. 4. National care vouchers.
(a) In general.
‘‘TITLE XXII—NATIONAL CARE VOUCHERS.
‘‘Sec. 2201. Eligibility.
‘‘Sec. 2202. Description of benefit.
‘‘Sec. 2203. National care vouchers in general.
‘‘Sec. 2204. Small employer health insurance reform in general.
Sec. 5. Deduction for national care vouchers for small employers.
Sec. 6. Equity tax.
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SEC. 2. DEDUCTIONS FOR CONTRIBUTIONS TO HEALTH
SERVICES ACCOUNT.
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1954 (relating to
additional itemized deductions for individuals) is amended
by redesignating section 223 as section 224 and by insert-
ing after section 222 the following section:
‘‘SEC. 223. HEALTH SERVICE ACCOUNT CONTRIBUTIONS.
‘‘(a) ALLOWANCE OF TAX CREDIT.—In the case of
an individual, there shall be allowed as a credit any
amount paid in cash for the taxable year made by or on
behalf of said individual to a health services account.
‘‘(b) LIMITATIONS.—
‘‘(1) IN GENERAL.—The amount allowable as a
credit under subsection (a) to any individual for any
taxable year shall not exceed $1500.
‘‘(2) DOLLAR LIMITATION.—No credit shall be
permitted unless an amount equal to, or greater
than, the claimed credit was used to purchase cer-
tified health services supplemental policies and, or,
qualified health expenses.
‘‘(3) CERTAIN OTHER RULES TO APPLY.—Rules
similar to rules of paragraphs (3), (4), (5), and (6)
of section 219(f) shall apply for purposes of this sec-
tion.
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‘‘(c) HEALTH SERVICES ACCOUNT DEFINED.—For
the purposes of this section, the term ‘health services ac-
count’ (hereafter referred to as the Account) means a
trust created or organized in the United States exclusively
to pay qualified health expenses of the distributee, but
only if the written governing instrument creating the trust
meets the following requirements:
‘‘(1) No contribution will be accepted unless it
is in cash, and the contributions will not be accepted
for the taxable year in excess of $3,000 on behalf of
any individual.
‘‘(2) The trustee is a bank (as defined in sec-
tion 408(n) or such other person who demonstrates
to the satisfaction of the Secretary that the manner
in which such other person will administer the trust
will be consistent with the requirements of this sec-
tion.
‘‘(3) The interest of an individual in the bal-
ance of his account is nonforfeitable.
‘‘(4) The assets of the trust will not be commin-
gled with other property except in a common trust
fund or a common investment fund.
‘‘(d) QUALIFIED HEALTH EXPENSES DEFINED.—
The term ‘qualified health expense’ means any amount
paid for—
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ditional data as the Secretary finds necessary,
to the Secretary for his examination and for his
certification thereof as meeting the standards
and requirements set forth in subparagraph
(A). Such certification shall remain in effect if
the insurer files a notarized statement with the
Secretary no later than June 30 of each year
stating that the policy continues to meet such
standards and requirements if the insurer sub-
mits such additional data as the Secretary finds
necessary to independently verify the accuracy
of such notarized statement. Where the Sec-
retary determines such a policy meets (or con-
tinues to meet) such standards and require-
ments, he shall authorize the insurer to have
printed on such policy (but only in accordance
with such requirements and conditions as the
Secretary may prescribe) an emblem which the
Secretary shall cause to be designed for use as
an indication that policy has received the Sec-
retary’s certification. The Secretary shall pro-
vide each State commissioner or superintendent
of insurance with a list of all the policies which
have received his certification.
‘‘(f) TAX TREATMENT ON DISTRIBUTION.—
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‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, any amount distributed out
of an Account shall be included in taxable income by
the distributee for the taxable year in which the dis-
tribution is received. Notwithstanding any other pro-
vision of this title (including chapter 11 and 12), the
basis of any persons in such an account is zero.
‘‘(2) PENALTY
FOR
DISTRIBUTIONS
OTHER
THAN FOR PAYMENT OF QUALIFIED HEALTH EX-
PENSES.—If any distribution for an Account is not
used exclusively to pay qualified health expenses of
the distributee, the distributee’s tax under this chap-
ter for the taxable year in which such distribution is
received shall be increased by an amount equal to 10
percent of the amount of such distribution which is
not used exclusively to pay for qualified health ex-
penses.
‘‘(3) RULES RELATING TO EXCESS CONTRIBU-
TIONS.—Rules similar to the rules of paragraphs
(4), (5), and (6) of section 408(d) shall apply for
purposes of this section.
‘‘(g) TAX TREATMENT OF ACCOUNTS.—
‘‘(1) IN GENERAL.—Any Account shall be ex-
empt from taxation under this subtitle unless the ac-
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count ceases to be an Account by reason of para-
graphs (2) or (3).
‘‘(2) LOSS OF EXEMPTION OF ACCOUNT WHERE
DISTRIBUTEE
ENGAGES
IN
PROHIBITED
TRANS-
ACTION.—If, during any taxable year of the distribu-
tee, the distributee engages in any transaction pro-
hibited by section 4975 with respect to such ac-
count—
‘‘(A) such Account shall cease to be an Ac-
count as of the first of such taxable year, and
‘‘(B) subsection (f) shall be applied as if
there were a distribution on such first day in an
amount equal to the fair market value (on such
first day) of all assets in the account (on such
first day).
‘‘(3) EFFECT OF PLEDGING ACCOUNT AS SECU-
RITY.—If, during any taxable year of the distributee,
the distributee uses any portion of the account as se-
curity for a loan, such portion shall be treated as
distributed to the distributee.
‘‘(4) TERMINATION OF ACCOUNT ON DEATH OF
DISTRIBUTEE.—
‘‘(A) IN
GENERAL.—In the case of the
death of the distributee—
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‘‘(i) any Account of the distributee
shall cease to be treated as such an ac-
count on the termination date, and
‘‘(ii) subsection (f) (other than para-
graph (2)) shall be applied as if there were
a distribution on such date in an accunt
equal to the fair market value (on such
date) of all assets in the account (on such
date).
‘‘(B) TERMINATION DATE.—For purposes
of subparagraph (A), the term ‘termination
date’ means the later of—
‘‘(i) the last day of the taxable year in
which the distributee dies, or
‘‘(ii) the date is six months after the
date of death of the distributee.
‘‘(h) 
ADDITIONAL
DEFINITIONS
AND
SPECIAL
RULES.—For purposes of this section—
‘‘(1) DISTRIBUTEE.—The term ‘distributee’
means the individual on whose behalf the Account is
established.
‘‘(2) DISTRIBUTED.—The term ‘distributed’ in-
cludes paid.
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‘‘(3) OTHER RULES.—Rules similar to the rules
of subsections (h) and (i) of section 408 shall
apply.’’.
(b) TAX ON EXCESS CONTRIBUTIONS.—
(1) IN
GENERAL.—Subsection (a) of section
4973 of such Code (relating to tax on excess con-
tributions to individuals retirement accounts, certain
section 403(b) contracts, and certain individuals re-
tirement annuities) is amended by striking out ‘‘or’’
at the end of paragraph (1), by redesignating para-
graph (2) as paragraph (3), and by inserting after
paragraph (1) the following new paragraph:
‘‘(2) a health services account (within the
meaning of section 223(c)), or’’.
(2) TECHNICAL AMENDMENTS.—
(A) Subsection (b) of section 4973 of such
Code is amended by adding at the end thereof
the following: ‘‘In the case of a health services
account, rules similar to the rules of the preced-
ing provisions of this subsection shall apply in
determining excess contributions.’’.
(B) Subsection (C) of section 4973 of such
Code is amended by striking out ‘‘subsection
(a)(2)’’ and inserting in lieu thereof ‘‘subsection
(a)(3)’’.
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(C) The section heading for section 4973
of 
such 
Code 
is 
amended 
by 
inserting
‘‘HEALTH 
SERVICES 
ACCOUNTS,’’
after ‘‘INDIVIDUAL RETIREMENT AC-
COUNTS,’’.
(D) The table of sections for subchapter C
of chapter 42 of such Code is amended in the
item relating to section 4973 by inserting
‘‘health services accounts,’’ after ‘‘individual re-
tirement accounts,’’.
(c) TAX ON PROHIBITED TRANSACTIONS.—
(1) IN
GENERAL.—Paragraph (1) of section
4975(e) of such Code (relating to definitions) is
amended by inserting ‘‘, a health services account
described in section 223(c),’’ after ‘‘described in sec-
tion 408(a)’’.
(2) SPECIAL RULE.—Subsection (c) of section
4975 of such Code (defining prohibited transaction)
is amended by adding at the end thereof the follow-
ing new paragraph:
‘‘(4) SPECIAL RULES FOR HEALTH SERVICES
ACCOUNTS.—An individual for whose benefit a
health services account is established shall be exempt
from the tax imposed by this section with respect to
any transaction concerning such account (which
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would otherwise be taxable under this section) if,
with respect to such transaction, the account ceases
to be a health services account by reason of the ap-
plication of section 223(g)(2) or if section 223(g)(3)
applies to such Account.’’.
(d) FAILURE TO PROVIDE REPORTS.—
(1) IN
GENERAL.—Subsection (a) of section
6693 of such Code (relating to failure to provide re-
ports on individual retirement accounts or annuities)
is amended by inserting ‘‘, or by subsection (h)(3)
of section 223 to file a report regarding a health
services account,’’ after ‘‘retirement annuity’’.
(2) CLERICAL AMENDMENTS.—
(A) The section heading for section 6693
of such Code is amended by inserting ‘‘OR
HEALTH 
SERVICES 
ACCOUNTS’’
after ‘‘ANNUITIES’’.
(B) The table of sections for subchapter B
of chapter 68 of such Code is amended in the
item relating to section 6693 by inserting ‘‘or
health services accounts’’ after ‘‘annuities’’.
(e) CLERICAL AMENDMENTS.—The table of sections
for part VII of subchapter B of chapter 1 of such Code
is amended by striking out the item relating to section
223 and inserting in lieu thereof the following:
‘‘Sec. 223. Health services account contributions.
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‘‘Sec. 224. Cross references.’’.
(f) REPORT TO CONGRESS ON MINIMUM STANDARDS
FOR HEALTH SERVICES SUPPLEMENTAL POLICIES.—Not
later than one year after the date of enactment of this
Act, a report shall be issued by the Secretary in consulta-
tion with, but not limited to, representatives of consumer
groups, insurance companies, long-term care facilities,
hospitals and home-health care agency representatives.
The report shall contain a regulatory program that pro-
vides for the application of minimum standards with re-
spect to health services supplemental policies. In addition,
the report should contain an analysis and evaluation of
the various catastrophic and long-term care insurance
policies available to an individual, as well as any other
areas of examination deemed appropriate by the Sec-
retary.
(g) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning on or
after the first day of the first calendar year which begins
more than one year after the date of the enactment of
this Act.
SEC. 3. COVERAGE OF HOME CARE BENEFITS.
(a) IN
GENERAL.—Section 1812(a) (42 U.S.C.
1395d(a)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(3);
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(2) by striking the period at the end of para-
graph (4) and inserting ‘‘; and’’, and
(3) by adding at the end the following:
‘‘(5) home care services to the qualified pa-
tient.’’.
(b) DEFINITION OF BENEFITS.—Section 1861 (42
U.S.C. 1395x) is amended by adding at the end the follow-
ing subsection:
‘‘Home Care Services
‘‘(ff)(1) The term ‘home care services’ means
services or supplies provided to an individual by a
home health agency or another acting under the au-
thority of such agency, under a written plan of care
established and periodically reviewed by a physician,
which are provided in the place of residence of such
individual’s home—
‘‘(A) nursing care provided by or under the
supervision of a registered professional nurse;
‘‘(B) medical social services under the di-
rection of a physician;
‘‘(C) services of a homemaker/home health
aide who has met training and credentialing re-
quirement approved by the Secretary;
‘‘(D) physical, occupational, speech, res-
piratory therapy, or rehabilitative services to
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preserve, restore, or prevent the deterioration of
the individual’s functional capabilities;
‘‘(E) medical supplies (other than drugs
and biological);
‘‘(F) services received under a program of
managed care.
‘‘(2) For the purposes of this section the term
‘qualified patient’ means an individual who—
‘‘(A) has been certified by a physician as
requiring home care benefits based upon the in-
dividual’s impairment and inability to perform
at least three basic functions of normal activity
as set forth in paragraph (3); and
‘‘(B) is participating in a program of man-
aged care;
‘‘(C) is described in section 226(a).
‘‘(3) For purposes of paragraph (2), each of the
following is a function of normal activity:
‘‘(A) BATHING.—The overall complex be-
havior of getting water and cleansing the whole
body, including turning on the water for a bath,
shower, or sponge bath, getting to, in, and out
of a tub or shower, and washing and drying
oneself.
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‘‘(B) EATING.—The process of getting
food from a plate or its equivalent into the
mouth.
‘‘(C) TOILETING.—The act of going to the
toilet room for bowel and bladder function,
transferring on and off the toilet, cleaning after
elimination, and arranging clothes.
‘‘(D) DRESSING.—The overall complex be-
havior of getting clothes from closets and draw-
ers and then getting dressed including putting
on braces or other assistive devices, fastening
buttons, zippers, snaps, or other closures.
‘‘(E) TRANSFER.—The process of moving
in and out of bed and in and out of a chair or
wheelchair.
‘‘(4) The term ‘program of managed care’
means an established and formal program conducted
by a managed care organization (as described in
paragraph (5)) for the oversight of providing home
care services to a qualified patient to ensure effective
and coordinated delivery of services, such as develop-
ment and periodic revision of individual plans of
care, arranging for necessary care and services, and
follow-up and on-going monitoring of patient and
services delivery.
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‘‘(5) The term ‘managed care organization’
means any organization which—
‘‘(A) is a corporation established pursuant
to and regulated by State law but not limited
to being incorporated within the State in which
the home care services are furnished; and
‘‘(B) develops standards for reasonable lev-
els of care for the community in which the serv-
ices are being furnished, sufficient to meet
standards as established by the Secretary in
regulations, to be used as guidelines for the de-
livery of services by home health agencies; and
‘‘(C) supervises home health agencies pro-
viding services to qualified patients, under their
oversight, in accordance with regulations pro-
mulgated by the Secretary; and
‘‘(D) establishes processes which include—
‘‘(i) a plan of care which states rea-
sonable and measurable objectives for the
individual and home care services to be
furnished to meet those objectives;
‘‘(ii) methods for periodic review of
the plan of care for the qualified patient
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‘‘(iii) a statement of criteria and pro-
cedures for discharge or transfer to an-
other agency, program, or service; and
‘‘(E) shall make such reports, in such form
and containing such information, as the Sec-
retary may from time to time require, and com-
ply with such provisions as the Secretary may
from time to time find necessary to assure the
correctness and verification of such reports.’’.
(c) CONDITIONS ON PAYMENTS FOR SERVICES.—(1)
Section 1814(a) (42 U.S.C. 1395f(a)) is amended—
(A) by striking ‘‘and’’ at the end of para-
graph (6),
(B) by striking the period at the end of
paragraph (7) and inserting ‘‘; and’’, and
(C) by inserting after paragraph (7) the
following new paragraph:
‘‘(8) in the case of home care services provided
to an individual, the individual is a qualified pa-
tient.’’.
(2) Section 1862(a) (42 U.S.C. 1395y(a)) is
amended—
(A) in paragraph (1)—
(i) in subparagraph (a), by striking
‘‘subparagraphs (B), (C), (D) and insert-
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ing ‘‘a succeeding subparagraph of this
paragraph’’,
(ii) by striking ‘‘and’’ at the end of
subparagraph (D).
(iii) by adding ‘‘and’’ at the end of
subparagraph (E); and
(iv) by adding at the end the following
new subparagraph:
‘‘(F) with respect to home care services,
which is not a reasonable cost as defined in sec-
tion 1861ff(6) of this Act’’; and
(B) in paragraph (6), by inserting ‘‘and
except, in the case of home care services, as is
otherwise permitted under paragraph (1)(F)’’
and ‘‘paragraph (a)(C)’’.
(d) LIMITATIONS UPON PAYMENT.—Section 1814
(42 U.S.C. 1395f) is amended by adding at the end the
following new subsection:
‘‘Limit on Payment for Home Care Services
‘‘(1) The maximum amount of payment that
may be made with respect to home care services pro-
vided a qualified patient (described in section
1861ff(2)) residing in a State in a month is an
amount that the Secretary estimates is equal to 75
percent of the average amount payable under the
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plan of the State approved under title XIX (or, in
the absence of such a plan, the average amount pay-
able under all such plans under such title) during
the month for skilled nursing facility services in the
State.
‘‘(2)(A) The amount payable for home care
services furnished an individual shall be reduced by
a deduction equal to the home care deductible or, if
less, the charges imposed with respect to such indi-
vidual for such services, except that, if the cus-
tomary charges for such services are greater than
the charges so imposed, such customary charges
shall be considered to be the charges so imposed.
‘‘(B) The Secretary shall, between July 1 and
October 1 of 1993, and of each year thereafter, de-
termine and promulgate the home care deductible
which shall be applicable for the purposes of sub-
section (5)(A) in the case of any home care services
furnished during the succeeding calendar year. Such
home care deductible shall be equal to $45 multi-
plied by the ratio of (i) the current average per diem
rate for home care services for the calendar year
preceding the promulgation, to (ii) the current aver-
age per diem rate for such services for 1992. Any
amount determined under the preceding multiple of
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$4 shall be rounded to the nearest next higher mul-
tiple.
‘‘(3)(A) The reasonable cost of any services
shall be the cost actually incurred, excluding there-
from any part of incurred cost found to be unneces-
sary in the efficient delivery of needed services, and
shall be determined in accordance with regulation es-
tablishing the methods to be used, and the items to
be included, in determining such costs for home care
benefits as provided by a home health agency (as de-
fined in Section 1861(o) of the Social Security Act).
In prescribing the regulations referred to in the pre-
ceding sentence, the Secretary shall consider, among
other things, the principles generally applied by na-
tional organizations or established prepayment orga-
nizations in computing the amount of payment, to
be made by persons other than the recipients of
services, to providers of home care benefits on ac-
count of services provided to such recipients by such
home care agencies. Such regulations may provide
for determination of the costs of services on a per
diem, per unit, per capita, or other basis, may pro-
vide for using different methods in different cir-
cumstances, may provide for the use of estimates of
costs of particular items or services, may provide for
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the establishment of limits on the direct or indirect
overall incurred costs of incurred costs of specific
items or services or groups of items or services to be
recognized as reasonable based on estimates of the
costs necessary in the efficient delivery of needed
services to individuals covered by this subsection,
and may provide for the use of charges or a percent-
age of charges where this method reasonably reflects
the costs. Such regulation shall—
‘‘(i) take into account both direct and indi-
rect costs of home care agencies in order that,
under the methods of determining costs, the
necessary costs of efficiently delivering covered
services to individuals eligible under this sub-
section will not be borne by individuals not so
covered, and the costs with respect to individ-
uals not so covered will not be borne by the pro-
gram under this subsection; and
‘‘(ii) provide for the making of suitable ret-
roactive corrective adjustments where, for a
home care agency for any fiscal period, the ag-
gregate reimbursement produced by the meth-
ods of determining costs proves to be either in-
adequate or excessive.
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‘‘(B) Such regulations shall require each home
care agency to make reports to the Secretary of in-
formation described in section 1121(a) in accordance
with the uniform reporting system.
‘‘(4) There shall be paid from the Federal Sup-
plementary Medical Insurance Trust Fund, in the
case of each individual who is covered under the pro-
gram established by this subsection and incurs ex-
penses for home care services with respect to which
benefits are payable under this subsection, amounts
equal to 80 percent of the reasonable cost of the
service to the provider of said services.’’.
(e) ASSURANCES OF MINIMUM STANDARDS IN HOME
CARE SERVICES.—The Social Security Act (42 U.S.C.
301 et seq.) is amended by adding at the end thereof, the
following:
‘‘TITLE XXI—HOME CARE SERVICES
‘‘FUNDING HOME CARE SERVICES
‘‘SEC. 2101. (a) The Secretary shall promulgate reg-
ulations requiring that to receive funding for the provision
of home care services under this subsection, a home health
agency must within six months after the date of the publi-
cation of such regulations—
‘‘(1) meet the requirements of a home health
agency as described in section 1861(o); and
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‘‘(2) implement procedures for reviewing griev-
ances of qualified patients receiving home care serv-
ices; and
‘‘(3) provide to each qualified patient, or their
representative, a written statement of the services to
be provided to said individual and the schedule for
provision of such services, as agreed upon by the
qualified patient, or their representative; and
‘‘(4) ensure that any provider of home care
services employed by or under contract with the
home health agency receives training which meets
requirements established by the Secretary in regula-
tions to be appropriate in nature and scope of the
services provided.
‘‘(5) conduct annual evaluations of providers of
home care services employed or under contract to
the home health agency; and
‘‘(6) enter into a cooperative agreement with
the managed care organization who has oversight (as
described in Section 1861ff) of a qualified patient
receiving home care services from said health care
agency to provide for the coordination and delivery
of services to such individual.
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‘‘SURVEY OF HOME HEALTH AGENCIES
‘‘SEC. 2102. (a) The Secretary shall promulgate reg-
ulations that establish procedures for surveying home
health agencies concerning compliance with the require-
ments of this section.
‘‘(1) Regulations shall include, but not be lim-
ited thereto, surveys regarding the facility that—
‘‘(A) shall not be announced in advance;
‘‘(B) shall be conducted by a multidisci-
plinary team of professionals who have passed
a standardized competency examination ap-
proved by the Secretary;
‘‘(C) shall focus on the quality of care pro-
vided to patients;
‘‘(D) shall include a private meeting be-
tween patients, or their representatives, and
survey personnel to discuss patients’ experi-
ences with the home health agency with respect
to type of care received and compliance with the
standards applicable to the agency under this
title;
‘‘(E) shall be conducted, with respect to
each agency, between 9 and 15 months after
the previous survey for the agency, with such
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surveys being conducted, on a Statewide aver-
age, 12 months apart; and
‘‘(F) may be conducted less often than an-
nually with respect to an agency only if the
agency is fully in compliance with the require-
ments of this title.
‘‘(2) The Secretary may make an agreement
with any State which is able and willing to do so
under which the services of the State health agency
or other appropriate State agency will be utilized by
him for the purpose of determining whether a home
health agency therein meets the requirements as es-
tablished under this title. Said State shall conduct
surveys of compliance with the requirements of this
title and provide for the annual transmittal to the
Secretary of the results of such surveys.
‘‘(3) The Secretary shall develop procedures for
validating survey of home health agencies performed
by States under paragraph (2). Such procedures
shall provide for the review of surveys—
‘‘(A) not less than every 15 months; or
‘‘(B) not less than every 9 months if 10
percent of the total number of the State’s home
health care agencies, as reported by the
overseeing managed care organizations, have
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committed serious or chronic violations of pro-
fessionally recognized standards of care; and
‘‘(C) based on a representative sample of
home health agencies which have been surveyed
under paragraph (2).
‘‘SANCTIONS
‘‘SEC. 2103. (a) Where the Secretary determines that
a home health care agency no longer meets the require-
ments of this title he shall promulgate regulations which
impose sanctions on home health agencies which shall—
‘‘(1) include civil penalties;
‘‘(2) include intermediate sanctions, including a
ban on admissions, receivership, fines, and emer-
gency authority to close home health agencies;
‘‘(3) require any sanction to be imposed to be
done so immediately following the determination
that the home health agency is no longer in compli-
ance with this title;
‘‘(4) provide for a plan and schedule for correc-
tive action by home health agencies determined to be
out of compliance with this title; and
‘‘(5) require public disclosure of failures to
comply with this title by home health agencies and
sanctions imposed on such agencies.
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‘‘(b)(1) The Secretary shall develop incentives to en-
courage high quality care and compliance by home health
agencies with the requirements of participation, including
annual publication of a directory of home health agencies,
listed alphabetically and by geographic area, which have
a consistent record of compliance with such requirements.
‘‘(2) The directory published under paragraph (b)(1)
shall be made available to managed care organizations,
area agencies on aging, state ombudsman programs, and
the public.
‘‘(c) The Secretary shall file an annual report with
the Congress on January 1 of each year regarding the
availability, adequacy, and use of sanctions to correct fail-
ures of home health agencies and home care providers to
meet professionally recognized standards of care.
‘‘LICENSING POLICIES
‘‘SEC. 2104. The Secretary shall encourage States to
develop policies and procedures for the licensing of home
health agencies and gather information concerning the ef-
fectiveness of such efforts. He shall issue a biannual re-
port which summarizes information gathered under this
section.
‘‘DEFINITIONS
‘‘SEC. 2105. For the purposes of this title—
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‘‘(1) The term ‘home health agency’ has the
meaning given it in section 1861(o).
‘‘(2) The term ‘home care services’ has the
meaning given such term in section 1861ff(1).
‘‘(3) The term ‘managed care organization’ has
the meaning given it under section 1861ff(5).
‘‘(4) The term ‘qualified patient’ has the mean-
ing as set forth in section 1861ff(2).
‘‘(5) The term ‘provider of home care services’
means any individual or entity who has contracted
with a home health agency, or is an agent of such
an agency, providing home care services to a quali-
fied patient.
‘‘AUTHORIZATION OF APPROPRIATIONS
‘‘SEC. 2106. There are authorized to be appropriated
from the Federal Hospital Insurance Trust Fund such
sums as may be necessary to carry out this title.’’.
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to home care services furnished
on and after October 1, 1993.
SEC. 4. NATIONAL CARE VOUCHERS
(a) IN GENERAL.—The Social Security Act (42
U.S.C. 301 et seq.) is amended by adding at the end there-
of, the following:
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‘‘TITLE XXII—NATIONAL CARE VOUCHERS
‘‘ELIGIBILITY
‘‘SEC. 2201.(a) Except as provided in subparagraph
(b), each of the following individuals is eligible for benefits
under the national care voucher program:
‘‘(1) Each citizen or national of the United
States.
‘‘(2) Each alien lawfully admitted for perma-
nent residence or other permanently residing in the
United States under color of law, including aliens
lawfully admitted for temporary residence under sec-
tion 210 or 245A of the Immigration and National-
ity Act.
‘‘(3) Each alien admitted to the United States
as an officer or employee (or member of the imme-
diate family of such officer or employee)—
‘‘(A) of a foreign government or an instru-
mentality of a foreign government, or
‘‘(B) of an international organization (as
such term is defined in the International Orga-
nizations Immunities Act),
if the government or organization, respectively, has
entered into an agreement described in subsection
(d)(1) with the United States.
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‘‘(b) Individuals who are entitled to health insurance
benefits under Title XVIII of the Social Security Act (re-
lating to Medicare and Medicaid) are not entitled to bene-
fits under this title.
‘‘DESCRIPTION OF BENEFIT
‘‘SEC. 2202. (a) The benefit coverage obtained from
the purchase of insurance through a national care voucher
must consist of entitlement to have payment made on his
behalf for the following:
‘‘(1) inpatient hospital services;
‘‘(2) medical and other health services;
‘‘(3) comprehensive outpatient rehabilitation fa-
cility services and home intravenous therapy serv-
ices;
‘‘(4) alcohol and drug abuse rehabilitation serv-
ices (as defined by the Secretary in regulations);
‘‘(5) outpatient mental health services furnished
in a community mental health center or by a physi-
cian, clinical psychologist, clinical social worker, or
psychiatric nurse specialist (or other qualified pro-
vider who is legally authorized to perform under
State law, or the State regulatory mechanism pro-
vided by State law) and would otherwise be covered
if furnished by a physician or as an incident to a
physician’s service; and
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‘‘(6) the following preventive services:
‘‘(A) prenatal care (including home visita-
tion services);
‘‘(B) well-child care (including appropriate
immunizations according to age and health his-
tory;
‘‘(C) screening mammography (as defined
in subsection (jj));
‘‘(D) screening pap smear (as defined in
subsection (nn));
‘‘(E) colorectal cancer screening (as de-
fined in regulations by the Secretary); and
‘‘(F) nutritional screening (as defined in
regulations by the Secretary).
‘‘NATIONAL CARE VOUCHERS
‘‘SEC. 2203. (a) IN GENERAL.—Subject to the provi-
sions of this Act, a full cash payment is to be made by
the United States, to each beneficiary eligible to partici-
pate in the national care voucher program, except as
amended by paragraph (d) of this section, to purchase cer-
tified health care insurance.
‘‘(b) ESTABLISHMENT OF VOUCHER ACCOUNTS.—
The United States shall establish an account for each ben-
eficiary eligible to participate in the national care voucher
program (except as modified by paragraph (b)) which is
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created or organized in the United States exclusively to
purchase certified health care insurance which meets the
following requirements:
‘‘(1) The trustee is a bank (as defined in sec-
tion 408(n)) or such other entity who demonstrates
to the satisfaction of the Secretary that the manner
in which such other entity will administer the trust
will be consistent with the requirements of this sec-
tion.
‘‘(2) The assets of the trust will not be commin-
gled with other property except in a common trust
fund or a common investment fund.
‘‘(3) The assets of the trust may be distributed
solely for the purchase of certified health care insur-
ance, except that after the purchase of said insur-
ance the remaining assets are to be distributed to
the beneficiary at his election without penalty.
‘‘(4) Any assets remaining in a voucher account
at the end of the taxable calender year must be dis-
tributed to the beneficiary of the account, except
that in cases where no purchase of certified health
insurance was made by the account for that taxable
year such monies shall be returned to the Treasury
of the United States.
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‘‘(5) The Secretary, in consultation with the
Secretary of the Treasury, shall select trustees to
administer individual voucher accounts, or groups of
accounts, in a manner prescribed by regulation. The
selection of the trustee shall—
‘‘(A) in the case of a voucher account,
being funded by an employer voucher payment
(in part or whole), be an individual or entity se-
lected by the Secretary after consultation with
the employer making the deposit to the account;
and
‘‘(B) in the case of all other voucher ac-
counts, be an individual or entity selected by
the Secretary based upon the preference of the
individual for which the account is being estab-
lished and the availability of qualified trustees
in the locality or State of said individual.
‘‘(6) A charge may be made to the account, by
the trustee of the account, to pay for reasonable and
customary costs of administration.
‘‘(c) EMPLOYER DONATIONS TO VOUCHERS.—
‘‘(1) IN GENERAL.—Except as provided in this
section, each employer shall, in accordance with this
title, deposit an amount equal to the annual voucher
deposit premium into the individual employee’s na-
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tional voucher account for each of its full-time em-
ployees no later than the 1st day of the eleventh
month preceding the calendar year in which the pay-
ment will be used to purchase a certified health care
insurance policy, except that—
‘‘(A) with respect to each part-time em-
ployee each employer shall, in accordance with
this title, deposit a payment into the individual
employee’s national voucher account in an
amount equal to the annual voucher deposit
premium as modified by the ratio of the individ-
ual employee’s gross pay to the gross pay of a
full-time employee (with similar work experience
or credentials) who performs same or similar
work; and
‘‘(B) no deposit for a part-time employee
shall be in an amount less than 50% of the an-
nual voucher deposit premium for a full-time
employee in the same taxable year.
‘‘(2) APPLICATION
TO
SEASONAL
AND
TEM-
PORARY EMPLOYEES.—In the case of an employee
designated as a seasonal or temporary employee,
whether a part-time or full-time employee, the em-
ployer shall deposit a payment in an employee’s na-
tional voucher account in an amount equal to the
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annual voucher deposit premium as modified by the
ratio of the individual employee’s cumulated gross
pay to the estimated cumulated gross pay of an em-
ployee employed by the employer through the taxable
year (with similar work experience or credentials)
who performs same or similar work. Each employer
shall designate, at the time of initial employment
and in a manner specified by the Secretary, whether
the individual is to be treated under this title as a
seasonal or temporary employee.
‘‘(3) TREATMENT OF EMPLOYEE’S IMMEDIATE
FAMILY.—In the case of a full-time employee or
part-time employee, an employer shall deposit a pay-
ment in the individual voucher accounts of the em-
ployee’s immediate family equal to the amount de-
posited in said employee’s account. The employer is
not required to provide deposits in the voucher ac-
counts of a seasonal or temporary employee’s imme-
diate family.
‘‘(4) CAP ON EMPLOYER’S DEPOSIT TO VOUCH-
ER.—No deposit shall be made, by an employer, to
an employee’s voucher account or the voucher ac-
counts of the employee’s immediate family in an
amount greater than the annual voucher deposit pre-
mium.
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‘‘(5) APPLICATION
TO
EMPLOYERS
OF
DIF-
FERENT SIZES.—
‘‘(A) IN GENERAL.—The requirements of
this title shall apply to—
‘‘(i) large employers employing over
100 full-time equivalent employees; and
‘‘(ii) medium employers employing 11
to 100 full-time equivalent employees, as
adjusted by paragraph (C) of this section.
‘‘(B) EXEMPTIONS.—The requirements of
this title shall not apply to—
‘‘(i) employers employing 10 or less
full-time equivalent employees; or
‘‘(ii) employers employing 100 or less
full-time equivalent employees if they are a
participant in a small employer health plan
under Section 2204 of this title that pro-
vides such coverage to all full-time, part-
time, or seasonal or temporary employees
of the employer.
‘‘(C) GRADUATED SCALE FOR MEDIUM EM-
PLOYERS.—The requirements of this title shall
apply to medium employers. Contributions to
employees’ voucher accounts by a medium em-
ployer under the annual voucher deposit pre-
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mium shall be calculated as required by this
title but then shall be further adjusted by mul-
tiplying such adjusted contribution by the me-
dium employer ratio (MER) to obtain the final
adjusted annual voucher deposit premium re-
quired to be contributed by the medium em-
ployer, under the following graduated scale—
Employer employing
full-time equivalent
Medium employer
employees
ratio (MER)
11 to 20 .....................................................
.10
21 to 30 .....................................................
.20
31 to 40 .....................................................
.30
41 to 50 .....................................................
.40
51 to 60 .....................................................
.50
61 to 70 .....................................................
.60
71 to 80 .....................................................
.70
81 to 90 .....................................................
.80
91 to 100 ...................................................
.90
‘‘(D) CALCULATION
OF
MEDIUM
EM-
PLOYER RATIO.—In the calculation of full-time
equivalent employees in determining the me-
dium employer ratio any decimal values shall be
rounded up to the next whole number.
‘‘(E) FIVE YEAR RETENTION OF EXISTING
SMALL EMPLOYER PLANS.—Any employer em-
ploying 10 or less full-time equivalent employees
and who provides health care insurance or bene-
fits to their employees (on the date of enact-
ment of this Act) shall maintain such coverage,
or coverage of equal value, until December 31,
1998. Any employer who discontinues or re-
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duces such coverage before that date shall be
treated as a large employer for the purposes of
this title and become subject to the require-
ments of this title through December 31, 1998.
The Secretary may grant a waiver to this re-
quirement, on a case by case basis, based on
the establishment by the petitioning employer
that continuation of the coverage is an—
‘‘(i) undue hardship to the employer;
and
‘‘(ii) will be a primary cause in the
discontinuation of the employer’s business
if the coverage is not terminated or modi-
fied.
‘‘(E) EFFECTIVE DATE.—For the purposes
of this title, the requirements of this section
shall become effective—
‘‘(i) for large employers as of January
1 of the 2nd year beginning after the date
of enactment;
‘‘(ii) for medium employers, as of
January 1 of the 3rd year beginning after
the date of enactment.
‘‘(d) FEDERAL DEPOSIT TO VOUCHER ACCOUNTS.—
It shall be the duty of the Secretary of the Treasury, in
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consultation with the Secretary of Health and Human
Services—
‘‘(1) to make withdrawals from the General
Fund of the United States Treasury, to provide a
deposit to every voucher account in an amount equal
to the annual voucher deposit premium except that
in the case where an employer is required to make
a deposit to the voucher account under subpara-
graph (c) then the Secretary of the Treasury shall
make no additional deposit except that necessary to
cause the amount within the account to equal the
annual voucher deposit premium;
‘‘(2) to provide the deposit to every voucher ac-
count no later than the 1st day of the eleventh
month preceding the calendar year in which the pay-
ment will be used to purchase a certified health care
insurance policy;
‘‘(3) to immediately terminate any account
which is unused due to the death or ineligibility of
the individual and return all unused funds, less
those amounts necessary to pay for the reasonable
and customary costs of the prior administration of
the account, to the General Fund of the United
States Treasury; and
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‘‘(4) set forth such other regulations, by either
Secretary, as necessary to ensure the effective ad-
ministration of each national voucher account.
‘‘(e) CERTIFICATION OF HEALTH CARE INSURANCE
POLICIES.—
‘‘(1) The Secretary shall establish minimum
standards and requirements, for the certification of
health care insurance policies eligible to be pur-
chased under this section.
‘‘(2) The Secretary shall establish a procedure
whereby health care insurance policies may be cer-
tified by the Secretary. Such procedure shall provide
an opportunity for any insurer to submit any such
policy, and such additional data as the Secretary
finds necessary, to the Secretary for his examination
and for his certification thereof as meeting the
standard and requirements set forth in subpara-
graph (1). Such certification shall remain in effect
if the insurer files a notarized statement with the
Secretary no later than June 30 of each year stating
that the policy continues to meet such standards and
requirements and if the insurer submits such addi-
tional data as the Secretary finds necessary to inde-
pendently verify the accuracy of such notarized
statement. Where the Secretary determines such a
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policy meets (or continues to meet) such standards
and requirements, he shall authorize the insurer to
have printed on such policy (but only in accordance
with such requirements and conditions as the Sec-
retary may prescribe) an emblem which the Sec-
retary shall cause to be designed for use as an indi-
cation that a policy has received the Secretary’s cer-
tifications. The Secretary shall provide each State
commissioner or superintendent of insurance with a
list of all the policies which have received his certifi-
cation.
‘‘(3) No health care insurance policy may be
certified unless—
‘‘(A) the plan provides for benefits for all
required health services (as defined in section
2102(a)) of the Social Security Act;
‘‘(B) the plan does not impose cost-sharing
with respect to required health services in ex-
cess of the deductibles and coinsurance per-
mitted under part A of title XVIII with respect
to such services (not taking into account any
low-income assistance under part C of such
title);
‘‘(C) the plan does not deny, limit, or con-
dition the coverage under (or benefits of) the
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plan with respect to required health services
based on the health status, claims experience,
receipt of health care, medical history, or lack
of evidence of insurability, of an individual, and
may not exclude coverage with respect to serv-
ices related to treatment of a preexisting condi-
tion; and
‘‘(D) a plan may be certified and include
such additional items and services as the in-
surer can demonstrate to the satisfaction of the
Secretary that inclusion of such items and serv-
ices will facilitate appropriate hospital dis-
charges or avoid unnecessary hospitalization.
‘‘(4) A self-insured plan or the plan of a health
maintenance organization may receive certification
under this section as a certified health care insur-
ance policy.
‘‘(f) PROCEDURES
FOR HEALTH INSURANCE EN-
ROLLMENT.—
‘‘(1) ELECTION
OF
COVERAGE
BY
INDIVID-
UAL.—
‘‘(A) OPEN ENROLLMENT PERIOD.—
‘‘(i) Beginning the 1st day of the elev-
enth month preceding the calendar year in
which the health coverage is to be pur-
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chased and ending the last day of such
month, the individual, for whom the ac-
count is established, shall through the elec-
tion of a specific certified health care in-
surance policy cause the trustee of their in-
dividual voucher account to distribute a
lump sum, or enter into a binding agree-
ment to distribute funds on a regular basis
(not to exceed the calendar year for which
the insurance policy is limited), for the
purchase of such coverage for the upcom-
ing calendar year.
‘‘(ii) If the individual fails to elect the
purchase of a specific insurance policy
under subparagraph (i) then the election of
the policy shall be made by the employer or
Secretary under subparagraph (f)(2) of
this part.
‘‘(2) ELECTION OF COVERAGE BY EMPLOYER
OR FEDERAL GOVERNMENT.—Upon failure of the in-
dividual, for whom the account is established, to
make an election, the employer (in the case of full-
time and part-time employees) shall make such an
election, or the Secretary in all other cases shall
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make such an election, no later than 15 days after
the failure of the individual to make an election.
‘‘(3) DUTIES OF TRUSTEE.—
‘‘(A) TRUSTEE
AS
PURCHASER.—Under
the authority of this Title the elector (as deter-
mined under paragraph (f)(1) or (2)) shall pro-
vide written notification to the trustee of his
election of a specific certified insurance policy.
Within 10 days of the date of receipt of the no-
tification of the election, the trustee shall verify
the certification of said policy through reason-
able and customary means after which the
trustee shall promptly distribute funds to the
insurance carrier for the purchase of said pol-
icy. Multiple policies may be purchased if the
coverage is not redundant.
‘‘(B) FIDUCIARY DUTY OF TRUSTEE.—As
trustee of the voucher account the trustee shall
make available to the individual (for whom the
account is established) such information as may
be reasonably possible regarding the process of
election and return of the account’s remainder
to said individual.
‘‘(C) TRUSTEE AS REPORTER.—The trust-
ee of any voucher account shall report, no later
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than 30 days after the date of receipt of the no-
tification of the election, to the Secretary of the
elector’s election of a specific certified insurance
policy. Such report shall include, but not lim-
ited thereto, the—
‘‘(i) description of the insurance policy
and insurer;
‘‘(ii) cost of policy and date of pay-
ment;
‘‘(iii) designation of which elector
made the election; and
‘‘(iv) such other information as pre-
scribed by regulation.
‘‘(g) DEFINITIONS.—For the purposes of this title:
‘‘(1) EMPLOYEE, EMPLOYER, EMPLOYMENT.—
Except as otherwise provided in this section, the
terms ‘employer’, ‘employee’, and ‘employment’ have
the same meanings as such terms have for purposes
of chapter 21 of the Internal Revenue Code of 1986.
‘‘(2) FULL-TIME EMPLOYEE.—The term ‘full-
time employee’ means, with respect to an employer,
an employee who normally performs on a monthly
basis at least 20 hours of service per week for that
employer.
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‘‘(3) PART-TIME EMPLOYEE.—The term ‘part-
time employee’ means, with respect to an employer,
an employee who is not a full-time employee.
‘‘(4) SEASONAL OR TEMPORARY EMPLOYEE.—
The term ‘seasonal or temporary employee’ means,
with respect to an employer, an employee who is em-
ployed by the employer for not more than 4 months
in any 12 month period; except that the Secretary
may extend such period for up to 6 months in any
12 month period in the case of employment that is
sporadic, irregular, and seasonal in nature.
‘‘(5) EMPLOYEE’S IMMEDIATE FAMILY.—
‘‘(A) IN GENERAL.—Except as provide in
paragraph (2), the term ‘employee’s immediate
family’ means the individual’s spouse, and in-
cludes all the individual’s children
‘‘(B) SPOUSE.—The term ‘spouse’ means,
with respect to an individual, the individual to
which the individual is married. Marital status
shall be determined in accordance with section
7703 of the Internal Revenue Code of 1986.
‘‘(C) CHILD.—The term ‘child’ means,
with respect to a person who is not a child, an
individual—
‘‘(i) who is—
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‘‘(I) unmarried and under 18
years of age; or
‘‘(II) unmarried and under 23
years of age and a full-time student;
or
‘‘(III) an unmarried, dependent
child, regardless of age, who is incapa-
ble of self-support because of mental
or physical disability; and
‘‘(ii)(I) who is the child of the individ-
ual or the individual’s spouse; or
‘‘(II) who is the legal ward of the in-
dividual or the individual’s spouse; and
‘‘(iii) who is not in the legal custody
of another individual.
The Secretary shall establish, by regulation,
such rules as are appropriate with respect to
the treatment of foster children, emancipated
minors, children in the process of adoption, and
other unmarried individuals under 23 years of
age under similar circumstances as children for
purposes of this title.
‘‘(6) FULL-TIME
EQUIVALENT
EMPLOYEES.—
The term ‘full-time equivalent employees’, with re-
spect to an employer, means a number equal to the
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total man hours of service for which an employer
has provided compensation in a calendar year di-
vided by the sum of 2080.
‘‘(7) ANNUAL VOUCHER DEPOSIT PREMIUM.—
The term ‘annual voucher deposit premium’ means
an amount equal to $3200 for the taxable year
1993. In the case of any taxable year beginning
after 1993, the annual voucher deposit premium
shall be the premium (which would be in effect
under this title for the taxable year beginning in the
preceding calendar year) increased by an amount no
less than an amount equal to the prior year’s pre-
mium multiplied by the percentage increase in the
CPI for the previous 12 month period. In no year
shall the premium be less than 103% of the preced-
ing year’s annual voucher deposit premium.
‘‘(8) INSURANCE CARRIER.—The term ‘insur-
ance carrier’ means a private entity that offers cer-
tified health insurance (as defined by this title) to
an individual; including employers or labor organiza-
tions offering such policies, or the trustees of a fund
established by one or more employers or labor orga-
nization (or combination thereof) for employees or
former employees (or combination thereof) of the
labor organizations.
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‘‘SMALL EMPLOYER HEALTH INSURANCE
REFORM
‘‘SEC. 2204. (a) IN GENERAL.—
‘‘(1) Each small employer carrier shall register
with the Secretary.
‘‘(2) Nothing in paragraph (1) shall be con-
strued as preventing the applicable regulatory au-
thority in a State from requiring, in the case of car-
riers that are not self-insurance carriers, such addi-
tional information in conjunction with, or apart
from, the registration required under paragraph (1)
as the applicable regulatory authority may be au-
thorized to require under State law.
‘‘(b) GUARANTEED OFFERING OF PLAN.—
‘‘(1) A small employer carrier (hereafter re-
ferred to as carrier) that offers a health plan to
small employers located in a community must offer
the same plan to any other small employer located
in the community. Such requirement shall apply on
a continuous, year round basis.
‘‘(2) A carrier may refuse to issue or renew or
terminate a plan only for—
‘‘(A) nonpayment of premiums; and
‘‘(B) fraud or misrepresentation.
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‘‘(c) MINIMUM PLAN PERIOD.—A carrier may not
offer to, or issue with respect to, a small employer a small
employer health plan with a term of less than 12 months.
‘‘(d) RENEWAL AND RATES.—
‘‘(1) The small employer carrier of a small em-
ployer health plan shall provide for notice, at least
30 days before the date of expiration of the health
plan, of the terms for renewal of the plan. Except
with respect to rates and administrative changes, the
terms of renewal (including benefits) shall be the
same as the terms of issuance.
‘‘(2) The carrier may change the terms of such
renewal, but the premium rates charged with respect
to such renewal shall be the same as that for a new
issue.
‘‘(3) The period of renewal of each small em-
ployer health plan shall be for a period of not less
than 12 months.
‘‘(e) DEFINITIONS.—
‘‘(1) SMALL
EMPLOYER
HEALTH
PLAN.—The
term ‘small employer health plan’ means an employ-
ment-related health plan insofar as it offers a basic
package of benefits, that equal or exceed the require-
ments of Section 2202 of this Title, with respect to
a small employer.
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‘‘(2) SMALL
EMPLOYER
CARRIER.—The term
‘small employer carrier’ means any carrier which of-
fers small employer health plans.
‘‘(3) SMALL EMPLOYER.—For the purposes of
this section the term ‘small employer’ means any
employer employing 100 or less full-time equivalent
employees.’’.
SEC. 5. DEDUCTION FOR NATIONAL CARE VOUCHERS FOR
SMALL EMPLOYERS.
(a) IN GENERAL.—Section 162 of the Internal Reve-
nue Code of 1954 (relating to trade or business expense)
is amended by redesignating subsection (l) as subsection
(m) and by inserting the following new subsection:
‘‘(1) DEDUCTION FOR SMALL EMPLOYERS.—
‘‘(1) The expenses paid or incurred by a small
employer for a certified health care insurance policy
(as defined in section 2204 of title XXII of the So-
cial Security Act) shall be allowed as a deduction
under this section at the rate of 125 percent of the
amount paid or incurred by the small employer (as
defined by title XXII of the Social Security Act) in
the taxable year.
‘‘(2) The deduction allowed to any small em-
ployer by reason of this subsection for any taxable
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year shall not exceed the portion of the taxable in-
come of such employer for such taxable year.’’
SEC. 6. EQUITY TAX.
(a) Section 310 of the Trade Act of 1974 (19 U.S.C.
2420) is amended by adding at the end the following new
subsection:
‘‘(e) HIGH COST PRIORITY FOREIGN COUNTRY DES-
IGNATION.—
‘‘(1) MANDATORY IDENTIFICATION.—For pur-
poses of this section, a country shall be identified by
the Trade Representative as a high cost priority for-
eign country with respect to the priority practices of
such foreign country, if—
‘‘(A) the amount of the trade deficit be-
tween the United States and such country for
the calendar year for which a report under sec-
tion 181 is submitted exceeds 15 percent of the
amount of the total trade deficit of the United
States for such calendar year; and
‘‘(B) such country has not entered into a
free trade agreement with the United States.
‘‘(2) ANNUAL
REVIEW.—Not later than the
30th day of January for each calendar year after the
date of enactment the Trade Representative shall
identify all high cost priority foreign countries and
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provide such designation to the United States Con-
gress, and the respected committees of jurisdiction.
This list shall be reviewed accordingly each year to
reflect changes in the trade deficit between the Unit-
ed States and the affected foreign country.
‘‘(3) IMPOSITION OF EQUITY TAX.—
‘‘(A) Entries of merchandise of a country
designated as a high cost priority foreign coun-
try shall be subject to the imposition of a 1 per-
cent tax to be levied upon the value of the mer-
chandise.
‘‘(B) Merchandise subject to such tax
which is entered, or withdrawn from warehouse,
for consumption on or after the date of publica-
tion of the Trade Representative’s annual re-
view of high cost priority countries shall be sub-
ject to the imposition of the 1 percent tax to be
levied upon the value of the merchandise.
‘‘(C) The administering authority shall
transfer any funds collected under the authority
of this section to the General Fund of the Unit-
ed States, no later than 30 days from the date
of collection.
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‘‘(4) EFFECTIVE DATE.—This subsection shall
be effective upon date of enactment and shall remain
in effect for calendar years 1994 through 2005.’’.
(b) EQUITY HEALTH INSURANCE TRUST FUND.—
(1) IN GENERAL.—Subchapter A of chapter 98
of the Internal Revenue Code of 1986 (relating to
trust fund code) is amended by adding at the end
the following new section:
‘‘SEC. 9511. EQUITY HEALTH INSURANCE TRUST FUND
‘‘(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund
to be known as the ‘Equity Health Insurance Trust Fund’.
‘‘(b) TRANSFERS.—There are hereby appropriated to
the Equity Health Insurance Trust Fund amounts equiva-
lent to the taxes received in the Treasury after December
31, 1993, under section 310(e) of the Trade Act of 1974
(relating to high cost priority countries and imposition of
equity tax).
‘‘(c) EXPENDITURES.—Amounts in the Equity
Health Insurance Trust Fund shall be available to provide
payments to national voucher accounts under title XXII
of the Social Security Act.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tion for such subchapter A is amended by adding at
the end the following new item:
‘‘Sec. 9511. Equity Health Insurance Trust Fund.’’.