I
105TH CONGRESS
1ST SESSION
H. R. 1363
To provide grants to States to provide uninsured children with access to
health care insurance coverage.
IN THE HOUSE OF REPRESENTATIVES
APRIL 17, 1997
Mrs. JOHNSON of Connecticut (for herself, Mr. MATSUI, Mr. RIGGS, Mr.
STARK, Mrs. MORELLA, and Mr. SHAYS) introduced the following bill;
which was referred to the Committee on Commerce, and in addition to
the Committee on Education and the Workforce, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisoins as fall within the jurisdiction of the committee concerned
A BILL
To provide grants to States to provide uninsured children
with access to health care insurance coverage.
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
‘‘Child Health Insurance Act of 1997’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
TITLE I—CHILDREN’S HEALTH INSURANCE GRANT PROGRAM
Subtitle A—Voluntary State Grant Programs
Sec. 101. Authority to establish.
Sec. 102. Requirements for qualifying children’s policy.
Sec. 103 Requirements for qualifying children’s direct service benefit option.
Sec. 104. Other requirements.
SUBTITLE B—ASSISTANCE
PART 1—ASSISTANCE TO FAMILIES
Sec. 121. Eligibility determinations.
Sec. 122. Assistance to families.
Sec. 123. Penalties for material misrepresentation and false information.
Sec. 124. Aggregate Federal grant payments.
Sec. 125. Authorization of appropriations and deficit reduction.
PART 2—SERVICES FOR PREGNANT WOMEN, NEW MOTHERS, AND INFANTS
Sec. 131. Program for pregnant women and infants.
SUBTITLE C—DEFINITIONS AND MISCELLANEOUS PROVISIONS
PART 1—DEFINITIONS
Sec. 141. Definitions.
PART 2—MISCELLANEOUS PROVISIONS
Sec. 151. Other contributions to premiums.
Sec. 152. Maintenance of effort.
Sec. 153. Application of other requirements and State flexibility.
Sec. 154. Regulations.
TITLE II—CONFORMING AMENDMENTS; EFFECTIVE DATE
Sec. 201. Conforming amendments.
Sec. 202. Effective date.
SEC. 2. PURPOSES.
It is the purpose of this Act to benefit American fami-
lies by—
(1) providing grants to States to develop and
implement a voluntary program to help purchase
health coverage for uninsured, needy children; and
(2) acquiring resources targeted to help reduce
the Federal budget deficit that, if unchecked, will re-
quire American families to devote an increasing pro-
portion of their tax liability to service the debt.
TITLE I—CHILDREN’S HEALTH
INSURANCE GRANT PROGRAM
Subtitle A—Voluntary State Grant
Programs
SEC. 101. AUTHORITY TO ESTABLISH.
(a) STATE ELECTION.—Each State may elect to es-
tablish a children’s health insurance program that com-
plies with this title.
(b) STATE PLAN.—
(1) IN
GENERAL.—To apply to participate
under this subtitle, a State shall, not later than 90
days prior to the beginning of the calendar year in
which the State program is to begin, prepare and
submit to the Secretary a State plan for the oper-
ation of the program.
(2) APPROVAL BY SECRETARY.—The State plan
submitted by a State under paragraph (1) must be
approved by the Secretary in order for the State to
be eligible to receive a grant under this title.
(c) USE OF FUNDS.—Under a program under this
title, a participating State shall provide subsidies, consist-
ent with section 122, for coverage under a qualifying chil-
dren’s policy and a qualifying children’s direct service ben-
efit option.
SEC. 102. REQUIREMENTS FOR QUALIFYING CHILDREN’S
POLICY.
(a) IN GENERAL.—Each participating State—
(1) shall contract with health insurance issuers
to make qualifying children’s policies available to
subsidy eligible children in the State;
(2) shall ensure that qualifying children’s poli-
cies are available to all eligible children in the State
and that each eligible child has the opportunity to
enroll for coverage under such policies;
(3) shall ensure that a qualifying children’s pol-
icy provides coverage for the care described in sub-
sections (b) and (c);
(4) shall provide for the payment of premium
and cost sharing subsidies (in amounts as defined by
the State in accordance with section 122), that may
include vouchers, to or on behalf of subsidy eligible
children, except that a State electing to participate
may not—
(A) provide a premium subsidy that is less
than 95 percent for a subsidy eligible child in
a family with a family income below 185 per-
cent of the poverty line for a family of the size
involved;
(B) allow the imposition of cost-sharing re-
quirements for preventive services provided to a
subsidy eligible child; or
(C) enter into a contract with a health in-
surance issuer offering a qualifying children’s
policy that requires that a subsidy eligible child
(in a family with a family income below 150
percent of the poverty line for a family of the
size involved) pay more than 20 percent of the
cost-sharing otherwise applied under such con-
tract as applied with respect to a particular
item or service unless the cost-sharing required
under the contract involved has been deemed by
the Secretary as not being a barrier to care for
children of families below 150 percent of pov-
erty line for a family of the size involved.
(b) COVERAGE FOR MEDICAL CARE.—For purposes
of this title, a qualifying children’s policy is a policy for
an eligible child that provides coverage for medical care
for such child that either (at the option of the State)—
(1) is the equivalent of the medical assistance
available (other than cost sharing) to children under
the State plan under title XIX of the Social Security
Act (42 U.S.C. 1396 et seq.), or
(2) is comparable to the health benefits plan
that is offered under the Federal Employees’ Health
Benefits Program (under chapter 89 of title 5, Unit-
ed States Code) and that is the plan with the largest
enrollment of individuals under such Program.
(c) ACCESS
TO SPECIALTY CARE
FOR SPECIAL
NEEDS CHILDREN.—Each participating State shall as-
sure that each qualifying children’s policy ensure access
to pediatric primary and specialty care providers, includ-
ing centers of pediatric specialized treatment expertise.
(d) ACCESS.—
(1) ACCESS TO POLICIES.—In carrying out sub-
section (a)(1), a participating State shall, subject to
the funding limitation described in section 122(d),
ensure that subsidy eligible children have access to
a qualifying children’s policy provided by a health in-
surance issuer serving the area in which the eligible
child resides. Such policies may be offered to eligible
children residing in the State through existing public
and private purchasing sponsors.
(2) TO
TRADITIONAL
PROVIDERS.—A partici-
pating State shall ensure that a qualifying children’s
policy provides access to traditional providers who
have experience in serving populations covered under
this title and in areas in which such populations re-
side.
SEC. 103. REQUIREMENTS FOR QUALIFYING CHILDREN’S
DIRECT SERVICE BENEFIT OPTION.
(a) IN GENERAL.—Each participating State—
(1) for each area of the State served by a
health center (as defined in section 330), shall con-
tract directly with the health center to provide serv-
ices under the program under this title for subsidy
eligible children who choose to receive services from
the health center;
(2) shall ensure that under a qualifying chil-
dren’s direct service benefit option, coverage is pro-
vided for the care described in subsections (c) and
(d);
(3) shall ensure that services described in sub-
section (c) which are not made available by a health
center are provided either—
(A) through contracts for direct payment
to specific networks of providers; or
(B) through the purchase of wraparound
insurance; and
(4) shall provide for payments in accordance
with subsection (b).
(b) PAYMENTS.—
(1) IN
GENERAL.—Under a qualifying chil-
dren’s direct service benefit option, a State may
not—
(A) require that a subsidy eligible child in
a family with a family income below 185 per-
cent of the poverty line for a family of the size
involved pay more than 5 percent of the
capitated payment rate;
(B) allow the imposition of cost-sharing re-
quirements for preventive services provided to a
subsidy eligible child;
(C) enter into a contract that requires that
a subsidy eligible child (in a family with a fam-
ily income below 150 percent of the poverty line
for a family of the size involved) pay more than
20 percent of the cost-sharing otherwise applied
by the health center, unless the cost-sharing re-
quired under the contract involved has been
deemed by the Secretary as not being a barrier
to care for children of families below 150 per-
cent of the poverty line for a family of the size
involved.
(c) COVERAGE FOR MEDICAL CARE.—For purposes
of this title, a qualifying children’s direct service benefit
option is an option for a eligible child that provides cov-
erage for medical care for such child that either (at the
option of the State)—
(1) is the equivalent of the medical assistance
available (other than cost sharing) to children under
the State plan under title XIX of the Social Security
Act (42 U.S.C. 1396 et seq.), or
(2) is comparable to the health benefits plan
that is offered under the Federal Employees’ Health
Benefits Program (under chapter 89 of title 5, Unit-
ed States Code) and that is the plan with the largest
enrollment of individuals under such Program.
(d) ACCESS
TO SPECIALTY CARE
FOR SPECIAL
NEEDS CHILDREN.—Each qualified children’s direct serv-
ice benefit option shall assure access to pediatric primary
and specialty care providers, including centers of pediatric
specialized treatment expertise.
SEC. 104. OTHER REQUIREMENTS.
(a) IN GENERAL.—A participating State shall—
(1) take steps to ensure that information about
the availability of the program, requirements for
family participation in the program, benefits offered,
and the application process are disseminated effec-
tively to potential participants;
(2) have in effect an outreach system under
which families eligible for assistance under this title
are assisted in enrolling in the State program and
are enrolled at a wide variety of locations, including
through traditional providers of care;
(3) ensure that every subsidy eligible child have
the opportunity to apply for assistance under the
State program under this title pursuant to State
law;
(4) if the State determines that a child is eligi-
ble for cost-sharing assistance under this title, notify
the health plan in which such child is participating
in a timely manner of such eligibility;
(5) provide to any subsidy eligible child whose
claim for assistance under the State program is de-
nied or is not acted on within a reasonable period
of time, an opportunity under State law for an ad-
ministrative hearing on such denial or inaction be-
fore the State agency;
(6) provide to the public, a general description
of the rules (including the objective criteria used) es-
tablished by the State for making decisions concern-
ing eligibility for assistance under the State pro-
gram; and
(7) use funds received under this title only in
accordance with the provisions of this title.
(b) DESIGNATION OF STATE AGENCY.—A participat-
ing State may designate an appropriate State agency to
administer the State program under this title.
SUBTITLE B—ASSISTANCE
PART 1—ASSISTANCE TO FAMILIES
SEC. 121. ELIGIBILITY DETERMINATIONS.
(a) IN GENERAL.—The following requirements shall
apply with respect to eligibility determinations for assist-
ance under this title:
(1) APPLICATIONS.—A State program shall
provide that an individual may file an application for
assistance in any manner determined appropriate by
the State. Such applications shall—
(A) be in an understandable form and gen-
erally accessible to individuals;
(B) require the provision of information
necessary to make a determination as to wheth-
er a child is eligible for assistance; and
(C) require attachment of such documenta-
tion as deemed necessary by the Secretary in
order to verify eligibility for assistance.
(2) TERM.—The State program may provide
for a determination of eligibility under this section
to be effective for a 6-month period or longer.
(b) COORDINATION.—Eligibility determinations made
pursuant to this section may be coordinated with deter-
minations of eligibility for State-administered health pro-
grams to the extent that such coordination brings about
administrative efficiencies.
SEC. 122. ASSISTANCE TO FAMILIES.
(a) STATE APPLICABLE INCOME CRITERIA.—For
purposes of this title, the applicable income criteria used
by the State for purposes of determining whether a child
is a subsidy eligible child, shall be based on the income
of the family of the subsidy eligible child expressed as a
percentage of the poverty line for a family of the size in-
volved. In establishing the applicable eligibility criteria and
subsidy level, the State shall give priority to families in
the State with the lowest family incomes, except that the
State shall establish a higher income criterion for families
with a disabled child.
(b) PAYMENTS.—
(1) IN GENERAL.—The amount of the assist-
ance available to a subsidy eligible child shall be
paid directly to—
(A) in the case of a child enrolled in a
qualifying children’s policy, the health insur-
ance issuer offering the qualifying children’s
policy (unless such plan is a group health plan
in which case such payment may be made di-
rectly to the group health plan or the health in-
surance issuer offering health insurance cov-
erage through the group health plan, or to the
individual); or
(B) in the case of an individual receiving
benefits under a qualifying children’s direct
service benefit option, to the provider and the
health insurance issuer if applicable with whom
the State has contracted under section 103.
(2) INDIVIDUAL RESPONSIBILITY.—An individ-
ual shall be responsible for any portion of the pre-
mium or cost sharing not subsidized by the State.
(c) SPECIAL RULE.—
(1) IN GENERAL.—If a subsidy eligible child en-
rolls in a group health plan, a premium subsidy
under this title shall be applied only to the amount
of the employee contribution for coverage for a sub-
sidy eligible child.
(2) RULE OF CONSTRUCTION.—Nothing in this
section shall be construed to require that an em-
ployer provide a qualifying children’s policy to an eli-
gible child regardless of whether such child is eligible
for a subsidy under this title.
(d) LIMITATION.—Nothing in this title shall be con-
strued to require that a State provide assistance to sub-
sidy eligible children under this subtitle in an amount that
exceeds the total amount available to the State under sec-
tion 126 (including State matching funds) for carrying out
the program under this title. If the State determines that
such available amount is not sufficient to provide premium
subsidies and other assistance under this subtitle to all
subsidy eligible children in the State, the State may adjust
the applicable eligibility criteria appropriately or adjust
the State program in another manner specified by the Sec-
retary prior to the program year.
SEC. 123. PENALTIES FOR MATERIAL MISREPRESENTATION
AND FALSE INFORMATION.
A participating State shall establish penalties to be
applied to any individual who knowingly and willfully
makes a material misrepresentation of information or pro-
vides false information in an application for assistance
under this subtitle, and shall otherwise enforce the provi-
sions of this title as determined appropriate by the State.
SEC. 124. AGGREGATE FEDERAL GRANT PAYMENTS.
(a) PAYMENT SCHEDULE.—
(1) STATE AMOUNT.—
(A) IN GENERAL.—A participating State
shall be eligible to receive a grant in an amount
under this title that bears the same relationship
to the amount appropriated for such year under
section 125 (and available after the reservation
under paragraph (7)), as the total number of
uninsured eligible children in the State in a
base year as determined appropriate by the Sec-
retary bears to the total number of uninsured
eligible children in all participating States in
such base year.
(B) STATE ALLOCATION ADJUSTMENTS.—
(i) STUDY.—Not later than Septem-
ber 30, 1998, the Secretary shall conduct
a study, and prepare and submit to the ap-
propriate committees of Congress a report,
concerning methodology for providing the
State allotment under subparagraph (A)
that takes into account an equitable ad-
justment to the formula based on vari-
ations in costs among States.
(ii) IMPLEMENTATION OF METHODOL-
OGY.—If determined appropriate and fea-
sible by the Secretary, the Secretary shall,
not later than January 1, 1999, implement
by regulation a methodology for the deter-
mination of the maximum amount under
subparagraph (A) that takes into account
the relative number of uninsured eligible
children in a State in the base year de-
scribed in subparagraph (A) and the rel-
ative cost of the delivery of services to
those children.
(2) PAYMENT.—Subject to paragraph (1), the
Secretary shall provide for payment under a grant to
each participating State for each calendar quarter,
beginning with any quarter beginning on or after
April 1, 1998, of an amount equal to—
(A)(i) 100 percent of the total amount es-
timated by the Secretary to have been expended
by the State during such prior quarter for pre-
mium and cost-sharing assistance under this
title for enrollment in qualifying children’s poli-
cies and for coverage under the qualifying chil-
dren’s direct service benefit option through the
programs operated under subtitle A; less
(ii) the State matching amount as deter-
mined under paragraph (3) for such prior quar-
ter; and
(B) 50 percent of the total amount esti-
mated by the Secretary to be expended by the
State during such prior quarter for the proper
and efficient administration of the program de-
scribed in this subtitle.
(3) STATE MATCHING PERCENTAGE.—
(A) IN GENERAL.—With respect to the cal-
endar quarter for which the payment is to be
made under this section, the State will be re-
sponsible for contributing an amount equal to
40 percent of the percentage of the amount the
State is responsible for expending for medical
assistance under title XIX of the Social Secu-
rity Act, based on the State percentage deter-
mined under section 1905(b) of such Act (42
U.S.C. 1396d(b)), for the State for the calendar
quarter involved.
(B) LIMITATION.—In no case shall the
State responsibility under subparagraph (A) for
a calendar quarter be less than an amount
equal to 10 percent of the amount determined
under paragraph (2)(A)(i) for the State for the
calendar quarter involved.
(C) TERRITORIES.—In the case of Puerto
Rico, the Virgin Islands, Guam, American
Samoa, and the Northern Mariana Islands, the
State percentage for purposes of determining
the State matching amount under subpara-
graph (A) shall be 20 percent.
(4) AVAILABILITY OF FUNDS.—Except as pro-
vided in paragraph (5), amounts provided to a State
under this section shall remain available until ex-
pended by the State.
(5) REDISTRIBUTION.—The Secretary shall es-
tablish a procedure for the redistribution of any
funds—
(A) not expended by a State under this
title; and
(B) as determined by the Secretary, after
consultation with the governor of the State,
that are unlikely to be used in the future by the
State.
(6) STATE
REQUEST
FOR
REDUCTION
IN
FUNDS.—Nothing in this section shall be construed
to prohibit a State from requesting only a portion of
the amount allotted to the State under this section.
(7) RESERVATION.—
(A) IN GENERAL.—Of the amount appro-
priated to carry out this title for a fiscal year,
the Secretary shall reserve .15 percent of such
amount for allocation among the territories de-
scribed in paragraph (2)(C).
(B) ALLOCATION.—A territory described in
paragraph (2)(C) shall be eligible to receive an
amount that bears the same relationship to the
amount reserved for such year under subpara-
graph (A), as the total number of uninsured eli-
gible children in the territory in a base year as
determined appropriate by the Secretary bears
to the total number of uninsured eligible chil-
dren in all participating territories in such base
year.
(b) REDUCTION IN PAYMENTS FOR ADMINISTRATIVE
ERRORS.—
(1) IN GENERAL.—In the case of administrative
errors described in paragraph (2), matching pay-
ments available to a State under subsection (a) shall
be reduced by an amount determined appropriate by
the Secretary.
(2) ADMINISTRATIVE
ERRORS
DESCRIBED.—
The administrative errors described in this para-
graph include the following:
(A) An eligibility error rate for premium
assistance to the extent the applicable error
rate exceeds the maximum permissible error
rate specified by the Secretary.
(B) Misappropriations or other expendi-
tures that the Secretary finds are attributable
to malfeasance or misfeasance.
(c) AUDITS.—The Secretary shall conduct regular
audits of the activities conducted under this subtitle.
(d) BUDGETARY TREATMENT.—Subject to section
125, this section constitutes budget authority in advance
of appropriations Acts, and represents the obligation of
the Federal Government to provide payments to the States
in accordance with this section.
(e) NONENTITLEMENT.—Nothing in this title shall be
construed as providing an individual with an entitlement
to assistance under this title.
SEC. 125. AUTHORIZATION OF APPROPRIATIONS AND DEFI-
CIT REDUCTION.
(a) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated to make Federal payments
under this title—
(1) for fiscal year 1998, $3,000,000,000;
(2) for fiscal year 1999, $3,000,000,000;
(3) for fiscal year 2000, $4,000,000,000;
(4) for fiscal year 2001, $5,000,000,000; and
(5) for fiscal year 2002, $5,000,000,000.
(b) DEFICIT REDUCTION TARGETS.—For purposes
of this section, the deficit reduction target shall be—
(1) for fiscal year 1998, $3,000,000,000;
(2) for fiscal year 1999, $3,000,000,000;
(3) for fiscal year 2000, $2,000,000,000;
(4) for fiscal year 2001, $1,000,000,000; and
(5) for fiscal year 2002, $1,000,000,000.
Any amount of revenue available under this subsection
shall be deposited into the Treasury and used for deficit
reduction.
(c) REDUCTION IN AUTHORIZED AMOUNT.—
(1) IN GENERAL.—If, with respect to a fiscal
year, the total estimated amount of revenue derived
for the financing of the program under this title is
less than the total target amount determined under
paragraph (2), then the amount referred to for the
following fiscal year under subsection (a) shall be re-
duced by the amount by which the amount of such
estimated revenue is less than the total target
amount determined under paragraph (2) for such
fiscal year multiplied by 2⁄3.
(2) TOTAL TARGET AMOUNT.—For purposes of
paragraph (1), the total target amount for a fiscal
year shall be equal to the sum of—
(A) the amount authorized to be appro-
priated for such year under subsection (a); and
(B) the deficit reduction target for such
fiscal year under subsection (b).
(3) REVENUE IN EXCESS OF ESTIMATES.—If
the estimated amount of revenue described in para-
graph (1) for a fiscal year is greater than the total
target amount under paragraph (2) for such fiscal
year, then the amount authorized for the following
fiscal year under subsection (a) shall be increased in
the same manner as the reduction described in para-
graph (1).
PART 2—SERVICES FOR PREGNANT WOMEN, NEW
MOTHERS, AND INFANTS
SEC. 131. PROGRAM FOR PREGNANT WOMEN AND INFANTS.
(a) ESTABLISHMENT OF PROGRAM.—A participating
State may use up to 5 percent of the amount of the allot-
ment to the State for a fiscal year under section 125 to
establish a program to meet the needs identified by the
State in the statewide needs assessments prepared by the
States under section 505(a)(1)(A) of the Social Security
Act (42 U.S.C. 705(a)(1)(A)).
(b) COORDINATION.—A State shall take actions to
ensure that the program established under this section is
coordinated with the programs operated by the State
under title V of the Social Security Act (42 U.S.C. 705).
(c) MAINTENANCE OF EFFORT.—With respect to a
State that carries out a program under this section, funds
made available under this title for such program shall be
used to supplement and not supplant current State spend-
ing for the needs described in subsection (a).
SUBTITLE C—DEFINITIONS AND MISCELLANEOUS
PROVISIONS
PART 1—DEFINITIONS
SEC. 141. DEFINITIONS.
(a) IN GENERAL.—In this title:
(1) ELIGIBLE
CHILD.—The term ‘‘eligible
child’’ means an individual who is 18 years of age
or younger.
(2) PARTICIPATING STATE.—The term ‘‘partici-
pating State’’ means any State that elects to estab-
lish a program under subtitle A.
(3) POVERTY LINE.—The term ‘‘poverty line’’
means the income official poverty line (as defined by
the Office of Management and Budget, and revised
annually in accordance with section 673(2) of the
Omnibus Budget Reconciliation Act of 1981) that is
applicable to a family of the size involved.
(4) QUALIFYING
CHILDREN’S
POLICY.—The
term ‘‘qualifying children’s policy’’ means a policy
that meets the standards described in section 102.
(5) QUALIFYING CHILDREN’S DIRECT SERVICE
BENEFIT OPTION.—The term ‘‘qualifying children’s
direct service benefit option’’ means the provision of
direct medical assistance under the standards de-
scribed in section 103.
(6) STATE.—The term ‘‘State’’ means each of
the several States, the District of Columbia, Puerto
Rico, the Virgin Islands, Guam, American Samoa,
and the Northern Mariana Islands.
(7) SUBSIDY
ELIGIBLE
CHILD.—The term
‘‘subsidy eligible child’’ means a child who—
(A) meets reasonable eligibility criteria es-
tablished by the State, and has a family income
that falls within the applicable income criteria
(as defined in section 122), for purposes of pro-
viding subsidies under the State program;
(B) is an eligible child;
(C) is a citizen or qualified alien (as de-
fined in section 431(b) of the Personal Respon-
sibility and Work Opportunity Reconciliation
Act of 1996 (8 U.S.C. 1641(b));
(D) is not eligible for medical assistance
under the State plan under title XIX of the So-
cial Security Act, except that nothing in this
title shall be construed to require that an indi-
vidual be denied medical assistance under a
State plan under title XIX of the Social Secu-
rity Act (42 U.S.C. 1396 et seq.) in order for
that child to be eligible to receive assistance
under the State program under this title; and
(E) has not been covered under a group
health plan (unless such coverage was termi-
nated as a result of a change in employment
status) during the 6-month period ending on
the date on which the individual applies for
subsidy-eligible health coverage under this title.
For purposes of subparagraph (E), enrollment in a
health plan under a COBRA continuation provision
(as defined in section 2791(d)(4) of the Public
Health Service Act) shall not constitute enrollment
in a group health plan.
(b) DEFINITIONS RELATING TO INCOME.—In this
title:
(1) FAMILY
INCOME.—The term ‘‘family in-
come’’ means, with respect to an individual who—
(A) is not a dependent of another individ-
ual, the sum of the modified adjusted gross in-
comes for the individual, the individual’s
spouse, and children who are dependents of the
individual; or
(B) is a dependent of another individual,
the sum of the modified adjusted gross incomes
for the other individual, the other individual’s
spouse, and children who are dependents of the
other individual.
The Secretary may promulgate rules under which
spousal income may be disregarded in instances
where a spouse is not part of a family unit.
(2) DEPENDENT.—The term ‘‘dependent’’ has
the meaning given such term under section 152 of
the Internal Revenue Code of 1986. For purposes of
this paragraph, a child who is placed in foster care
by a State agency shall not be considered a depend-
ent of another individual.
(3) MODIFIED ADJUSTED GROSS INCOME.—The
term ‘‘modified adjusted gross income’’ means ad-
justed gross income (as defined in section 62(a) of
the Internal Revenue Code of 1986)—
(A) determined without regard to sections
135, 162(l), 911, 931, and 933 of such Code,
and
(B) increased by—
(i) the amount of interest received or
accrued by the individual during the tax-
able year which is exempt from tax, and
(ii) the amount of the social security
benefits (as defined in section 86(d) of
such Code) received during the taxable
year to the extent not included in gross in-
come under section 86 of such Code.
The determination under the preceding sentence
shall be made without regard to any carryover or
carryback.
(c) OTHER DEFINITIONS.—The term—
(1) ‘‘group health plan’’ has the meaning given
the term in section 2791(a) of the Public Health
Service Act;
(2) ‘‘health insurance coverage’’ has the mean-
ing given the term in section 2791(b)(1) of such Act;
(3) ‘‘health insurance issuer’’ has the meaning
given the term in section 2791(b)(2) of such Act;
(4) ‘‘health maintenance organization’’ has the
meaning given the term in section 2791(b)(3) of
such Act; and
(5) ‘‘network plan’’ has the meaning given the
term in section 2791(B)(10) of such Act.
(d) REFERENCES TO INDIVIDUAL.—For purposes of
this title, any reference to an individual shall include a
reference to the parent or guardian of such individual.
PART 2—MISCELLANEOUS PROVISIONS
SEC. 151. OTHER CONTRIBUTIONS TO PREMIUMS.
(a) GENERAL RULE.—Any employer which elects to
make employer contributions on behalf of an individual
who is an employee of such employer, or who is a depend-
ent of such employee, for health insurance coverage shall
not condition, or vary, such contributions with respect to
any such individual by reason of such individual’s status
as an individual eligible for assistance under subtitle B.
(b) ELIMINATION OF CONTRIBUTIONS.—An employer
shall not be treated as failing to meet the requirements
of subsection (a) if the employer ceases to make employer
contributions for health insurance coverage for all its em-
ployees.
(c) ENFORCEMENT.—The enforcement provisions ap-
plicable to group health insurance coverage under the
amendments made by section 101(e)(2) of the Health In-
surance Portability and Accountability Act of 1996 shall
apply with respect to an employer that violates the provi-
sions of this section in the same manner as such provisions
apply to employers under such amendments.
SEC. 152. MAINTENANCE OF EFFORT.
(a) MEDICAID.—A State that elects to participate
under this title may not modify the eligibility requirements
for children under the State program under title XIX of
the Social Security Act, as in effect on January 1, 1997
(except that such requirements may be modified pursuant
to an application for a waiver under section 1115 of the
Social Security Act (42 U.S.C. 1315) submitted prior to
January 1, 1997), in any manner that would have the ef-
fect of reducing the eligibility of children for coverage
under such program.
(b) MAINTENANCE
OF
EFFORT.—Funds appro-
priated pursuant to the authority of this title shall be used
to supplement and not supplant other Federal and State
funds expended to provide services for disabled individ-
uals.
SEC. 153. APPLICATION OF OTHER REQUIREMENTS AND
STATE FLEXIBILITY.
(a) APPLICATION
OF INSURANCE REQUIREMENTS
UNDER TITLE XXVII.—For purposes of applying sections
2701(a) through (e) and (g) of the Public Health Service
Act (relating to limitations on preexisting conditions and
increased portability) except those provisions relating to
late enrollees, waiting periods, and election of alternative
methods under sections 2701(c)(3)(B), 2702(a)(1) and (b)
(relating to eligibility to enroll), 2711(a)(1)(A) (relating
to guaranteed availability for eligible individuals), and
2711(c) and (d)(1) (relating to special rules for network
plans and financial capacity) of such Act to health insur-
ance issuers offering a qualifying children’s policy and
health insurance issuers offering wrap-around insurance
under this title, a qualifying children’s policy shall be
deemed to be health insurance coverage offered by a health
insurance issuer in the small group market, in connection
with a group health plan, and an eligible individual shall
be considered a small employer for the purposes of section
2711(a)(1)(A), (c) and (d)(1) of such Act, except that sec-
tion 2701(b) of such Act shall apply to a qualifying chil-
dren’s policy offered to a subsidy eligible child.
(b) STATE FLEXIBILITY.—Nothing in this section
shall be construed to prevent a State from establishing
or implementing standards or requirements—
(1) not prescribed in this title; or
(2) related to the issuance, renewal or port-
ability of health insurance under a qualifying chil-
dren’s policy or a qualifying children’s direct service
benefit option that provide greater protection or ben-
efit to an eligible child.
SEC. 154. REGULATIONS.
The Secretary may issue regulations to implement
the program established under this title.
TITLE II—CONFORMING
AMENDMENTS; EFFECTIVE DATE
SEC. 201. CONFORMING AMENDMENTS.
(a) ERISA.—Section 701(c)(1) of the Employee Re-
tirement Income Security Act of 1974 (as added by section
101(a) of the Health Insurance Portability and Account-
ability Act of 1996) is amended by adding at the end the
following:
(K) A qualifying children’s policy under
title I of the Child Health Insurance and Lower
Deficit Act of 1997.’’’.
(b) PUBLIC HEALTH SERVICE ACT.—
(1) Section 2701(c)(1) of the Public Health
Service Act (as added by section 102(a) of the
Health Insurance Portability and Accountability Act
of 1996) is amended by adding at the end the fol-
lowing:
‘‘(K) A qualifying children’s policy under
title I of the Child Health Insurance and Lower
Deficit Act of 1997.’’.
(2) Section 2761(b)(1)(A) of the Public Health
Service Act (as added by section 102(a) of the
Health Insurance Portability and Accountability Act
of 1996) is amended—
(A) by striking ‘‘or church plan’’ and in-
serting ‘‘church plan’’; and
(B) by inserting before the semicolon the
following: ‘‘, qualifying children’s policy, or
qualifying children’s direct service benefit op-
tion’’.
SEC. 202. EFFECTIVE DATE.
This Act shall become effective on the date of enact-
ment of this Act, except that funds to carry out programs
under title I shall not be available prior to January 1,
1998.
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