I 
109TH CONGRESS 
1ST SESSION H. R. 3056
To amend title I of the Employee Retirement Income Security Act of 1974 
to provide for the establishment in the Department of Labor of a Small 
Employer Health Benefits Program. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 24, 2005
Mr. ANDREWS (for himself and Mr. KIND) introduced the following bill; which 
was referred to the Committee on Education and the Workforce 
A BILL 
To amend title I of the Employee Retirement Income Secu-
rity Act of 1974 to provide for the establishment in 
the Department of Labor of a Small Employer Health 
Benefits Program.
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 
‘‘Small Employer Health Act of 2005’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows:
Sec. 1. Short title; table of contents. 
Sec. 2. Establishment of Small Employer Health Benefits Program (SEHBP).
‘‘PART 8—SMALL EMPLOYER HEALTH BENEFITS PROGRAM (SEHBP) 
‘‘Sec. 801. Establishment of program. 
‘‘Sec. 802. Contracts with qualifying insurers. 
‘‘Sec. 803. Additional conditions. 
‘‘Sec. 804. Dissemination of information. 
‘‘Sec. 805. Subsidies. 
‘‘Sec. 806. Authorization of appropriations.
SEC. 2. ESTABLISHMENT OF SMALL EMPLOYER HEALTH 
BENEFITS PROGRAM (SEHBP). 
(a) IN GENERAL.—Subtitle B of title I of the Em-
ployee Retirement Income Security Act of 1974 is amend-
ed by adding after part 7 the following new part: 
‘‘PART 8—SMALL EMPLOYER HEALTH BENEFITS 
PROGRAM (SEHBP) 
‘‘SEC. 801. ESTABLISHMENT OF PROGRAM. 
‘‘(a) IN GENERAL.—The Secretary shall establish, in 
accordance with this part, a program under which—
‘‘(1) qualifying small employers (as defined in 
subsection (b)) are provided access to qualifying 
health insurance coverage (as defined in subsection 
(c)) for their employees, and 
‘‘(2) such employees may elect alternative forms 
of coverage offered by various health insurance 
issuers. 
‘‘(b) QUALIFYING
SMALL
EMPLOYER
DEFINED; 
OTHER DEFINITIONS.—For purposes of this part: 
‘‘(1) QUALIFYING SMALL EMPLOYER.—
‘‘(A) IN GENERAL.—The term ‘qualifying 
small employer’ means a small employer (as de-
fined in paragraph (2)) that—
‘‘(i) elects to offer health insurance 
coverage provided under this part to each 
employee who has been employed by that 
employer for 3 months or longer; and 
‘‘(ii) elects, with respect to an em-
ployee electing coverage under qualified 
health insurance coverage, to pay at least 
50 percent of the total premium for quali-
fying health insurance coverage provided 
under this part. 
‘‘(B) ELECTIONS.—Elections under sub-
paragraph (A) may be filed with the Secretary 
during the 180-day period beginning with the 
first enrollment period occurring under section 
803 and during open enrollment periods occur-
ring thereafter under such section. Such elec-
tions shall be filed in such form and manner as 
shall be prescribed by the Secretary. 
‘‘(C) PART-TIME
EMPLOYMENT.—Under 
regulations of the Secretary, in the case of an 
employee serving in a position in which service 
is customarily less than 1,500 hours per year,
the reference in subparagraph (A)(ii) to ‘50 
percent’ shall be deemed a percentage reduced 
to a percentage that bears the same ratio to 50 
percent as the number of hours of service per 
year customarily in such position bears to 
1,500. 
‘‘(2) SMALL EMPLOYER.—The term ‘small em-
ployer’ means, with respect to a year, an employer 
who employed an average of fewer than 100 employ-
ees on business days during the preceding calendar 
year and who employs at least 1 employee on the 
first day of the year. 
‘‘(3) SEHBP.—The term ‘SEHBP’ means the 
small employer health benefits program provided 
under this part. 
‘‘(c) QUALIFYING HEALTH INSURANCE COVERAGE.—
For purposes of this part, the term ‘qualifying health in-
surance coverage’ means health insurance coverage that 
meets the following requirements: 
‘‘(1) The coverage is offered by a health insur-
ance issuer. 
‘‘(2) The benefits under such coverage are 
equivalent to or greater than the lower level of bene-
fits provided under the service benefit plan described 
in section 8903(1) of title 5, United States Code.
‘‘(3) The coverage includes, with respect to an 
eligible individual that elects coverage, coverage of 
the same dependents that would be covered if the 
coverage were offered under FEHBP. 
‘‘(4)(A) Subject to subparagraph (B), there is 
no underwriting, through a preexisting condition 
limitation, differential benefits, or different premium 
levels, or otherwise, with respect to such coverage for 
covered individuals or their dependents. 
‘‘(B) The premiums charged for such coverage 
are community-rated for individuals within any 
State and may vary only—
‘‘(i) by individual or family enrollment, and 
‘‘(ii) to the extent permitted under the 
laws of such State relating to health insurance 
coverage offered in the small group market, on 
the basis of geography. 
‘‘(d) OTHER TERMS.—
‘‘(1) HEALTH INSURANCE COVERAGE; HEALTH 
INSURANCE ISSUER; HEALTH STATUS-RELATED FAC-
TOR.—The terms ‘health insurance coverage’, ‘health 
insurance issuer’, ‘health status-related factor’ have 
the meanings provided such terms in section 733. 
‘‘(2) SMALL GROUP MARKET.—The term ‘small 
group market’ has the meaning provided such term
in section 2791(e)(5) of the Public Health Service 
Act (42 U.S.C. 300gg–91(e)(5)). 
‘‘(3) FEHBP.—The term ‘FEHBP’ means the 
Federal Employees Health Benefits Program under 
chapter 89 of title 5, United States Code. 
‘‘(e) TREATMENT OF PARTNERSHIPS AND SELF-EM-
PLOYED INDIVIDUALS.—For purposes of this part, and for 
purposes of applying section 3 to this part and to part 
5 as it applies to this part, in any case in which qualifying 
health insurance coverage is, or is to be, provided under 
a plan, fund, or program to individuals covered there-
under—
‘‘(1) if such plan, fund, or program is main-
tained by a partnership, the term ‘employer’ (as de-
fined in section 3(5)) includes the partnership in re-
lation to the partners, and the term ‘employee’ (as 
defined in section 3(6)) includes any partner in rela-
tion to the partnership; and 
‘‘(2) if such plan, fund, or program is main-
tained by a self-employed individual, the term ‘em-
ployer’ (as defined in section 3(5)) and the term 
‘employee’ (as defined in section 3(6)) shall include 
such individual.