I
104TH CONGRESS
2D SESSION
H. R. 3425
To amend the Internal Revenue Code of 1986 to require health insurance
coverage and group health plans that provide coverage of childbirth
to provide coverage for a minimum inpatient stay following childbirth.
IN THE HOUSE OF REPRESENTATIVES
MAY 9, 1996
Mr. KLECZKA (for himself, Mr. STARK, Mr. GIBBONS, Mr. JACOBS, Mr.
PALLONE, Mr. CARDIN, Mr. MATSUI, Mr. LEWIS of Georgia, Mr. COYNE,
Mrs. KENNELLY, Mr. MCDERMOTT, Mr. NEAL of Massachusetts, Mr.
PAYNE of Virginia, Mr. RANGEL, Mr. MCNULTY, Mr. LEVIN, Mr. FORD,
and Ms. MCKINNEY) introduced the following bill; which was referred to
the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to require
health insurance coverage and group health plans that
provide coverage of childbirth to provide coverage for
a minimum inpatient stay following childbirth.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Newborns’ and Moth-
ers’ Health Protection Act of 1996’’.
SEC. 2. FINDING.
Congress finds that—
(1) the length of post-delivery inpatient care
should be based on the unique characteristics of
each mother and her newborn child, taking into con-
sideration the health of the mother, the health and
stability of the infant, the ability and confidence of
the mother to care for her infant, the adequacy of
support systems at home, and the access of the
mother and infant to appropriate follow-up health
care; and
(2) the timing of the discharge of a mother and
her newborn child from the hospital should be made
by the attending provider in consultation with the
mother.
SEC. 3. NEWBORNS’ AND MOTHERS’ HEALTH PROTECTION.
(a) IN GENERAL.—The Internal Revenue Code of
1986 is amended by adding at the end the following:
‘‘Subtitle K—Newborns’ and
Mothers’ Health Protection
‘‘CHAPTER 100—NEWBORNS’ AND
MOTHERS’ HEALTH PROTECTION
‘‘Sec. 9801. Imposition of tax for failure to meet newborns’ and mothers’ health
protection requirements.
‘‘Sec. 9802. Required coverage for minimum inpatient stay following birth.
‘‘Sec. 9803. Definitions; general provisions.
‘‘SEC. 9801. IMPOSITION OF TAX FOR FAILURE TO MEET
NEWBORNS’ AND MOTHERS’ HEALTH PRO-
TECTION REQUIREMENTS.
‘‘(a) HEALTH INSURANCE COVERAGE.—
‘‘(1) IN GENERAL.—There is hereby imposed a
tax on an insurer or health maintenance organiza-
tion that offers health insurance coverage which the
Secretary of Health and Human Services certifies to
the Secretary fails to meet an applicable requirement
specified in section 9802 at any time during a cal-
endar year.
‘‘(2) AMOUNT OF TAX.—The amount of tax im-
posed by paragraph (1) shall be equal to 25 percent
of the premiums received under such coverage dur-
ing the calendar year.
‘‘(3) PREMIUM.—For purposes of this sub-
section, the term ‘premium’ means the gross amount
of premiums and other consideration (including ad-
vance premiums, deposits, fees, and assessments)
arising from health insurance coverage issued by an
insurer or health maintenance organization, adjusted
for any return or additional premiums paid as a re-
sult of endorsements, cancellations, audits, or retro-
spective rating.
‘‘(4) EXEMPTION IF STATE REGULATION.—No
tax shall be imposed under paragraph (1) for a fail-
ure of an insurer or organization to meet a require-
ment if the insurer or organization is regulated by
a State, unless the Secretary of Health and Human
Services has determined that such State has not
provided for enforcement of State laws which govern
the same matters as are governed by such require-
ment and which assure substantial compliance by in-
surers or organizations with such a requirement.
‘‘(b) GROUP HEALTH PLANS.—
‘‘(1) IN GENERAL.—There is hereby imposed a
tax on a plan sponsor (as defined in section 3 of the
Employee Retirement Income Security Act of 1974)
of a group health plan which the Secretary of Labor
certifies to the Secretary fails to meet an applicable
requirement of section 9802 at any time during a
calendar year.
‘‘(2) AMOUNT OF TAX.—The amount of tax im-
posed by paragraph (1) shall be equal to 25 percent
of the group health plan coverage expenditures for
such calendar year under such plan.
‘‘(3) GROUP HEALTH PLAN COVERAGE EXPEND-
ITURES.—For purposes of this subsection, the group
health plan coverage expenditures of any self-insured
group health plan for any calendar year are the ag-
gregate expenditures for such year for health bene-
fits provided under such plan to the extent that
health benefits are provided other than through
health insurance coverage.
‘‘(c) WAIVER.—If the Secretary of Health and
Human Services finds, with respect to an insurer or health
maintenance organization, or the Secretary of Labor finds,
with respect to a group health plan, that a failure of such
insurer, organization, or plan is due to reasonable cause
and not to willful neglect and certifies such fact to the
Secretary of the Treasury, the Secretary of the Treasury
may waive part or all of the tax imposed by this section
to the extent that the Secretary of Health and Human
Services or the Secretary of Labor (as the case may be)
finds that payment of such tax would be excessive relative
to the failure involved.
‘‘SEC. 9802. REQUIRED MINIMUM CHILDBIRTH BENEFITS.
‘‘(a) MINIMUM CHILDBIRTH BENEFITS.—If an in-
surer or health maintenance organization provides health
insurance coverage that includes any benefits for inpatient
care for childbirth for a mother or newborn child or if a
group health plan includes any such benefits, the insurer,
organization, or plan shall meet the following require-
ments:
‘‘(1) MINIMUM
LENGTH
OF
STAY
FOR
INPA-
TIENT CARE BENEFITS.—The coverage or plan shall
provide benefits for inpatient care for childbirth for
a minimum length of stay of 48 hours following a
vaginal delivery and a minimum length of stay of 96
hours following a caesarean section.
‘‘(2) COVERAGE OF POST-DELIVERY FOLLOW-UP
CARE.—If an attending provider, in consultation
with the mother, decides to discharge a covered
mother or newborn child from an inpatient setting
before the expiration of the minimum length of stay
period described in paragraph (1), the coverage or
plan shall include benefits for timely post-delivery
care by a registered nurse, physician, nurse practi-
tioner, nurse midwife or physician assistant experi-
enced in maternal and child health in the home, a
provider’s office, a hospital, a federally qualified
health center, a federally qualified rural health clin-
ic, a State health department maternity clinic, or an-
other setting (such as a birthing center or an inter-
mediate care facility) determined appropriate under
regulations promulgated by the Secretary of Health
and Human Services.
‘‘(3) NOTICE.—The insurer, organization, or
plan shall provide notice to each enrollee eligible for
childbirth benefits under this subsection regarding
the requirements of this section.
trician-gynecologist, pediatrician, family physician,
or other physician, or any other health care provider
(such as a nurse midwife or nurse practitioner),
who, acting in accordance with applicable State law,
is primarily responsible for the care of the mother
and child.
(2) TIMELY CARE DEFINED.—As used in sub-
section (a)(2), the term ‘timely post-delivery care’
means health care that is provided—
‘‘(A) following the discharge of a mother
and her newborn child from the inpatient set-
ting following childbirth; and
‘‘(B) in a manner that meets the health
care needs of the mother and her newborn
child, that provides for the appropriate monitor-
ing of the conditions of the mother and child,
and that occurs within the 72-hour period im-
mediately following discharge.
‘‘(3) REGULATIONS
REGARDING
APPROPRIATE
POST-CARE DELIVERY SETTINGS.—The Secretary of
Health and Human Services, with respect to regula-
tions promulgated under subsection (a)(2) concern-
ing appropriate post-delivery care settings—
‘‘(A) shall ensure that, to the extent prac-
ticable, such regulations are consistent with
State licensing and practice laws,
‘‘(B) shall consider telemedicine and other
innovative means to provide follow-up care, and
‘‘(C) shall consider both urban and rural
settings.
‘‘(4) RULE
OF
CONSTRUCTION.—Nothing in
this section shall be construed to require that a
mother—
‘‘(A) give birth in a hospital; or
‘‘(B) stay in the hospital for a fixed period
of time following the birth of her child.
‘‘(5) REQUIREMENTS.—The notice required
under subsection (a)(3) shall be in accordance with
regulations promulgated by the Secretary of Health
and Human Services. Such regulations shall provide
that the notice shall be in writing, shall be conspicu-
ous and prominently positioned, and shall be re-
quired to be provided as follows:
‘‘(A) HEALTH INSURANCE COVERAGE.—By
an insurer or health maintenance organiza-
tion—
‘‘(i) to enrollees described in sub-
section (a) who are enrolled on the effec-
tive date of this chapter within 120 days
after such effective date and annually
thereafter, and
‘‘(ii) to other enrollees at the time of
enrollment and annually thereafter.
‘‘(B) GROUP HEALTH PLANS.—By a group
health plan—
‘‘(i) to enrollees described in sub-
section (a) who are enrolled on the effec-
tive date of this chapter within 120 days
after such effective date, and
‘‘(ii) for plan years beginning on or
after such effective date, as part of its
summary plan description.
‘‘SEC. 9803. DEFINITIONS; GENERAL PROVISIONS.
‘‘(a) GROUP HEALTH PLAN DEFINED.—For pur-
poses of this chapter—
‘‘(1) IN
GENERAL.—The term ‘group health
plan’ means an employee welfare benefit plan (as de-
fined in section 3(1) of the Employee Retirement In-
come Security Act of 1974) to the extent that the
plan provides medical care directly or through insur-
ance, reimbursement, or otherwise, and includes a
group health plan within the meaning of section
5000(b)(1).
‘‘(2) EXCLUSION OF PLANS WITH LIMITED COV-
ERAGE.—An employee welfare benefit plan shall be
treated as a group health plan under this chapter
only with respect to medical care which is provided
under the plan and which does not consist of cov-
erage excluded from the definition of health insur-
ance coverage under subsection (b)(1)(B).
‘‘(3) EXCLUSION OF CHURCH PLANS.—The re-
quirements of this chapter insofar as they apply to
group health plans shall not apply to church plans
(as defined in section 3(33) of the Employee Retire-
ment Income Security Act of 1974).
‘‘(4) TREATMENT OF GOVERNMENTAL PLANS.—
If the plan sponsor of a governmental plan (as such
terms are defined in section 3 of the Employee Re-
tirement Income Security Act of 1974) which is a
group health plan to which the provisions of this
chapter otherwise apply makes an election under this
paragraph for any specified period (in such form
and manner as the Secretary of Health and Human
Services may by regulations prescribe), then the re-
quirements of this chapter insofar as they apply to
group health plans shall not apply to such govern-
mental plans for such period.
‘‘(b) DEFINITIONS RELATING TO HEALTH INSUR-
ANCE COVERAGE.—As used in this chapter—
‘‘(1) HEALTH INSURANCE COVERAGE.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the term ‘health insurance
coverage’ means benefits consisting of medical
care (provided directly, through insurance or re-
imbursement, or otherwise) under any hospital
or medical service policy or certificate, hospital
or medical service plan contract, or health
maintenance organization group contract of-
fered by an insurer or a health maintenance or-
ganization.
‘‘(B) EXCEPTION.—Such term does not in-
clude coverage under any separate policy, cer-
tificate, or contract only for one or more of any
of the following:
‘‘(i) Coverage only for accident, or
disability income insurance, or any com-
bination thereof.
‘‘(ii) Medicare supplemental health in-
surance 
(as 
defined 
under 
section
1882(g)(1) of the Social Security Act).
‘‘(iii) Coverage issued as a supplement
to liability insurance.
‘‘(iv) Liability insurance, including
general liability insurance and automobile
liability insurance.
‘‘(v) Workers compensation or similar
insurance.
‘‘(vi) Automobile medical payment in-
surance.
‘‘(vii) Coverage for a specified disease
or illness.
‘‘(viii) Hospital or fixed indemnity in-
surance.
‘‘(ix) Short-term limited duration in-
surance.
‘‘(x) Credit-only, dental-only, or vi-
sion-only insurance.
‘‘(xi) A health insurance policy provid-
ing benefits only for long-term care, nurs-
ing home care, home health care, commu-
nity-based care, or any combination there-
of.
‘‘(2) HEALTH MAINTENANCE ORGANIZATION.—
The 
term 
‘health 
maintenance 
organization’
means—
‘‘(A) a federally qualified health mainte-
nance organization (as defined in section
1301(a) of the Public Health Service Act (42
U.S.C. 300e(a))),
‘‘(B) an organization recognized under
State law as a health maintenance organization,
or
‘‘(C) a similar organization regulated
under State law for solvency in the same man-
ner and to the same extent as such a health
maintenance organization,
if the organization is subject to State law which reg-
ulates insurance (within the meaning of section
514(b)(2) of the Employee Retirement Income Secu-
rity Act of 1974).
‘‘(3) INSURER.—The term ‘insurer’ means an
insurance company, insurance service, or insurance
organization which is licensed to engage in the busi-
ness of insurance in a State and which is subject to
State law which regulates insurance (within the
meaning of section 514(b)(2)(A) of the Employee
Retirement Income Security Act of 1974).
‘‘(c) OTHER DEFINITIONS.—As used in this chap-
ter—
‘‘(1) MEDICAL CARE.—The term ‘medical care’
means—
‘‘(A) amounts paid for, or items or services
in the form of, the diagnosis, cure, mitigation,
treatment, or prevention of disease, or amounts
paid for, or items or services provided for, the
purpose of affecting any structure or function
of the body,
‘‘(B) amounts paid for, or services in the
form of, transportation primarily for and essen-
tial to medical care referred to in subparagraph
(A), and
‘‘(C) amounts paid for insurance covering
medical care referred to in subparagraphs (A)
and (B).
‘‘(2) STATE.—The term ‘State’ includes the
District of Columbia, Puerto Rico, the Virgin Is-
lands, Guam, American Samoa, and the Northern
Mariana Islands.
‘‘(d) NONPREEMPTION.—
‘‘(1) IN
GENERAL.—The provisions of this
chapter shall not preempt those provisions of State
law that provide protections that are not less than
the protections provided under this chapter, includ-
ing any—
‘‘(A) requirement that health insurance
coverage provide for maternity and pediatric
care that is in accordance with guidelines estab-
lished by the American College of Obstetricians
and Gynecologists and the American Academy
of Pediatrics, and
‘‘(B) leaving decisions regarding the appro-
priate length of inpatient care for a mother and
her newborn child entirely to the attending pro-
vider in consultation with the mother.
‘‘(2) NO OVERRIDE OF ERISA PREEMPTION.—
Nothing in this chapter shall be construed to affect
or modify the provisions of section 514 of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1144).
‘‘(e) REGULATIONS.—Regulations promulgated by
the Secretary to carry out this chapter shall be promul-
gated in consultation with the Secretary of Health and
Human Services.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply—
(1) to health insurance coverage for contract
years beginning on or after January 1, 1997; and
(2) to group health plans as of the first day of
the first plan year beginning on or after January 1,
1997.
(c) CLERICAL AMENDMENT.—The table of contents
for the Internal Revenue Code of 1986 is amended by add-
ing after the item relating to subtitle J the following new
item:
‘‘Subtitle K. Newborns’ and Mothers’ Health Protection.’’
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