I
103D CONGRESS
1ST SESSION
H. R. 192
To provide for improvements to the health of farm families, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mr. GUNDERSON introduced the following bill; which was referred to the
Committee on Energy and Commerce
A BILL
To provide for improvements to the health of farm families,
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.
This Act may be cited as the ‘‘Farm and Rural Medi-
cal Equity Reform Act of 1993’’.
TABLE OF CONTENTS
Sec. 1. Short title.
TITLE I—DEDUCTIBILITY OF HEALTH INSURANCE EXPENSES
FOR THE SELF-EMPLOYED
Sec. 101. Increase in amount of deduction for health insurance costs of self-
employed individuals.
TITLE II—MEDICAL SAVINGS ACCOUNTS
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Sec. 202. Unused amounts in flexible spending accounts transferable to medical
savings accounts.
Sec. 203. Deduction for amounts paid for qualified catastrophic coverage health
plan.
TITLE III—UNIFORM CLAIMS; ELECTRONIC CARDS; ELECTRONIC
BILLS
Sec. 301. Advisory council on health claim processing standardization.
Sec. 302. Specification and use of uniform health claim reimbursement forms.
TITLE IV—HEALTH INSURANCE PORTABILITY PROVISIONS
Sec. 401. Limitation on exclusion for pre-existing conditions; assurance of con-
tinuity of coverage.
Sec. 402. Limits on premium increases.
Sec. 403. Definitions.
Sec. 404. Excise tax for violations.
TITLE V—IMPROVED ACCESS TO RURAL HEALTH SERVICES
Subtitle A—Rural Emergency Medical Services Amendments
Sec. 501. Establishment of office of emergency medical services.
Sec. 502. State offices of emergency medical services.
Sec. 503. Programs for rural areas.
Sec. 504. Funding.
Sec. 505. Conforming Amendments.
Subtitle B—Extension of Special Treatment Rules for Medicare Dependent,
Small Rural Hospitals
Sec. 511. Extension of special treatment rules for Medicare dependent, small
rural hospitals.
Subtitle C—Outreach Grant Program
Sec. 521. Establishment of program of grants for rural health outreach.
TITLE 
I—DEDUCTIBILITY 
OF
HEALTH 
INSURANCE 
EX-
PENSES FOR THE SELF-EM-
PLOYED
SEC. 101. INCREASE IN AMOUNT OF DEDUCTION FOR
HEALTH INSURANCE COSTS OF SELF-EM-
PLOYED INDIVIDUALS.
(a) INCREASE
IN DEDUCTION.—Paragraph (1) of
section 162(l) of the Internal Revenue Code of 1986 (re-
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lating to special rules for health insurance costs of self-
employed individuals) is amended by striking ‘‘25 percent’’
and inserting ‘‘100 percent’’.
(b) DEDUCTION MADE PERMANENT.—Subsection (l)
of section 162 of such Code is amended by striking para-
graph (6).
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
June 30, 1992.
TITLE II—MEDICAL SAVINGS
ACCOUNTS
SEC. 201. MEDICAL SAVINGS ACCOUNTS.
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
additional itemized deductions for individuals) is amended
by redesignating section 220 as section 221 and by insert-
ing after section 219 the following new section:
‘‘SEC. 220. MEDICAL SAVINGS ACCOUNTS.
‘‘(a) DEDUCTION ALLOWED.—In the case of an eligi-
ble individual, there shall be allowed as a deduction
amounts paid in cash during the taxable year by or on
behalf of such individual to a medical savings account.
‘‘(b) LIMITATION.—
‘‘(1) IN GENERAL.—The amount allowable as a
deduction under subsection (a) to an individual for
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the taxable year shall not exceed the excess (if any)
of—
‘‘(A) the lesser of—
‘‘(i) the applicable limit, or
‘‘(ii) the compensation (as defined in
section 219(f)) includible in the individ-
ual’s gross income for the taxable year,
over
‘‘(B) the sum of—
‘‘(i) the value of employer-provided
coverage for the medical expenses of such
individual,
‘‘(ii) the amount paid by the individ-
ual (other than from amounts distributed
from a medical savings account) for cov-
erage under qualified catastrophic coverage
health plan for coverage for such individ-
ual, the spouse of such individual, and de-
pendents (as defined in section 152) of
such individual, plus
‘‘(iii) the aggregate amount contrib-
uted to such account during the taxable
year pursuant to section 125(d)(3).
‘‘(2) APPLICABLE
LIMIT.—For purposes of
paragraph (1), the applicable limit is the sum of—
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‘‘(A) $4,800, plus
‘‘(B) $600 for each individual who is a de-
pendent (as defined in section 152) of the indi-
vidual for whose benefit the account is estab-
lished.
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) MEDICAL SAVINGS ACCOUNT.—The term
‘medical savings account’ means a trust created or
organized in the United States exclusively for the
purpose of paying the qualified medical expenses of
the individual for whose benefit the trust is estab-
lished, but only if the written governing instrument
creating the trust meets the following requirements:
‘‘(A) A contribution will be accepted unless
it is in cash and contributions will not be ac-
cepted for any taxable year in excess of the ap-
plicable limit )as defined in subsection (b)(2)).
‘‘(B) The trustee is a bank (as defined in
section 408(n)) or another person who dem-
onstrates to the satisfaction of the Secretary
that the manner in which such person will ad-
minister the trust will be consistent with the re-
quirements of this section.
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‘‘(C) No part of the trust assets will be in-
vested in life insurance contracts.
‘‘(D) The assets of the trust will not be
commingled with other property except in a
common trust fund or common investment
fund.
‘‘(2) ELIGIBLE INDIVIDUAL.—The term ‘eligible
individual’ means any individual if—
‘‘(A) Such individual is not covered by any
employer-provided group health plan, or
‘‘(B) such individual is covered by an em-
ployer-provided group health plan which is a
qualified catastrophic coverage health plan and
is not covered by any other health plan.
‘‘(3) QUALIFIED MEDICAL EXPENSES.—
‘‘(A) IN
GENERAL.—The term ‘qualified
medical expenses’ means—
‘‘(i) medical expenses, and
‘‘(ii) amounts paid for qualified long-
term care insurance (as defined in section
818(g)).
‘‘(B) MEDICAL
EXPENSES.—The term
‘medical expenses’ means amount paid by the
individual for whose benefit the account was es-
tablished for medical care (as defined in section
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213) of such individual, the spouse of such indi-
vidual, and any dependent (as defined in section
152) of such individual, but only to the extent
such amounts are not compensated for by in-
surance of otherwise.
‘‘(4) QUALIFIED
CATASTROPHIC
COVERAGE
HEALTH
PLAN.—The term ‘qualified catastrophic
coverage health plan’ means any health plan which
is certified by the Secretary of Health and Human
Services as a plan—
‘‘(A) which provides no compensation for
medical expenses not exceeding $3,000 during
any year,
‘‘(B) which requires the individual to pay
15 percent of such individual’s medical expenses
to the extent they exceed $3,000 but not
$9,000 during any year, and
‘‘(C) which provides full reimbursement for
medical expenses exceeding $9,000.
‘‘(5) TIME
WHEN
CONTRIBUTIONS
DEEMED
MADE.—A taxpayer shall be deemed to have made a
contribution on the last day of the preceding taxable
year if the contribution is made on account of such
taxable year and is made not later than the time
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prescribed by law for filing the return for such tax-
able year (not including extensions thereof).
‘‘(d) TAX TREATMENT OF DISTRIBUTIONS.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, any amount paid or distrib-
uted out of a medical savings account shall be in-
cluded in the gross income of the individual for
whose benefit such account was established unless
such amount is used exclusively to pay the qualified
medical expenses of such individual.
‘‘(2) EXCESS CONTRIBUTIONS RETURNED BE-
FORE DUE DATE OF RETURN.—Paragraph (1) shall
not apply to the distribution of any contribution paid
during a taxable year to a medical savings account
to the extent that such contribution exceeds the
amount allowable as a deduction under subsection
(a) if—
‘‘(A) such distribution is received on or be-
fore the day prescribed by law (including exten-
sions of time) for filing such individual’s return
for such taxable year,
‘‘(B) no deduction is allowed under sub-
section (a) with respect to such excess contribu-
tion, and
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‘‘(C) such distribution is accompanied by
the amount of net income attributable to such
excess contribution.
Any net income described in subparagraph (C) shall
be included in the gross income of the individual for
the taxable year in which it is received.
‘‘(e) TAX TREATMENT OF ACCOUNTS.—
‘‘(1) EXEMPTION FROM TAX.—A medical sav-
ings account is exempt from taxation under this sub-
title unless such account has ceased to be an invest-
ment savings account by reason of paragraph (2).
Notwithstanding the preceding sentence, any such
account is subject to the taxes imposed by section
511 (relating to imposition of tax on unrelated busi-
ness income of charitable, etc. organizations).
‘‘(2) LOSS OF EXEMPTION OF ACCOUNT WHERE
INDIVIDUAL
ENGAGES
IN
PROHIBITED
TRANS-
ACTION.—
‘‘(A) IN GENERAL.—If, during any taxable
year of the individual for whose benefit the
medical savings account was established, such
individual engages in any transaction prohibited
by section 4975 with respect to the account, the
account ceases to be a medical savings account
as of the first day of that taxable year.
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require under regulations. The reports required by this
subsection shall be filed at such time and in such manner
and furnished to such individuals at such time and in such
manner as may be required by those regulations.’’.
(b) DEDUCTION ALLOWED
IN ARRIVING
AT AD-
JUSTED GROSS INCOME.—Paragraph (7) of section 62(a)
of such Code (relating to retirement savings) is amend-
ed—
(1) by inserting ‘‘OR MEDICAL EXPENSE’’ after
‘‘RETIREMENT’’ in the heading of such paragraph,
and
(2) by inserting before the period at the end
thereof the following: ‘‘and the deduction allowed by
section 220 (relating to deduction of certain pay-
ments to medical savings accounts)’’.
(c) TAX ON EXCESS CONTRIBUTIONS.—Section 4973
of such Code (relating to tax on excess contributions to
individual retirement accounts, certain section 403(b) con-
tracts, and certain individual retirement annuities) is
amended—
(1) by inserting ‘‘MEDICAL
SAVINGS
AC-
COUNTS,’’ after ‘‘ACCOUNTS,’’ in the heading of
such section,
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(2) by redesignating paragraph (2) of sub-
section (a) as paragraph (3) and by inserting after
paragraph (1) the following:
‘‘(2) a medical savings account (within the
meaning of section 220(c)),’’,
(3) by striking ‘‘or’’ at the end of paragraph
(1) of subsection (a), and
(4) by adding at the end thereof the following
new subsection:
‘‘(d) EXCESS CONTRIBUTIONS TO MEDICAL SAVINGS
ACCOUNTS.—For purposes of this section, in the case of
a medical savings account, the term ‘excess contributions’
means the amount by which the amount contributed for
the taxable year to the account exceeds the amount allow-
able as a deduction under section 220 for such taxable
year. For purposes of this subsection, any contribution
which is distributed out of the medical savings account
and a distribution to which section 220(d)(2) applies shall
be treated as an amount not contributed.’’.
(d) TAX ON PROHIBITED TRANSACTIONS.—Section
4975 of such Code (relating to prohibited transactions)
is amended—
(1) by adding at the end of subsection (c) the
following new paragraph:
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‘‘(4) SPECIAL RULE FOR MEDICAL SAVINGS AC-
COUNTS.—An individual for whose benefit a medical
savings account is established shall be exempt from
the tax imposed by this section with respect to any
transaction concerning such account (which would
otherwise be taxable under this section) if, with re-
spect to such transaction, the account ceases to be
a medical savings account by reason of the applica-
tion of section 220(e)(2)(A) to such account.’’, and
(2) by inserting ‘‘or a medical savings account
described in section 220(c)’’ in subsection (e)(1)
after ‘‘described in section 408(a)’’.
(e) FAILURE TO PROVIDE REPORTS ON MEDICAL
SAVINGS ACCOUNTS.—Section 6693 of such Code (relat-
ing to failure to provide reports on individual retirement
account or annuities) is amended—
(1) by inserting ‘‘OR ON MEDICAL SAVINGS
ACCOUNTS’’ after ‘‘ANNUITIES’’ in the heading of
such section, and
(2) by adding at the end of subsection (a) the
following: ‘‘The person required by section 220(i) to
file a report regarding a medical savings account at
the time and in the manner required by such section
shall pay a penalty of $50 for each failure unless it
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is shown that such failure is due to reasonable
cause.’’
(f) CLERICAL AMENDMENTS.—
(1) The table of sections for part VII of sub-
chapter B of chapter 1 of such Code is amended by
striking the item relating to section 220 and insert-
ing the following:
‘‘Sec. 220. Medical savings accounts.
‘‘Sec. 221. Cross reference.’’.
(2) The table of sections for chapter 43 of such
Code is amended by striking the item relating to sec-
tion 4973 and inserting the following:
‘‘Sec. 4973. Tax on excess contributions to individual retirement accounts, medi-
cal savings accounts, certain 403(b) contracts, and certain indi-
vidual retirement annuities.’’.
(3) The table of sections for subchapter B of
chapter 68 of such Code is amended by inserting ‘‘or
on medical savings accounts’’ after ‘‘annuities’’ in
the item relating to section 6693.
(g) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1993.
SEC. 202. UNUSED AMOUNTS IN FLEXIBLE SPENDING AC-
COUNTS TRANSFERABLE TO MEDICAL SAV-
INGS ACCOUNTS.
(a) IN GENERAL.—Subsection (d) of section 125 of
the Internal Revenue Code of 1986 (relating to cafeteria
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plans) is amended by adding at the end thereof the follow-
ing new paragraph:
‘‘(3) UNUSED
AMOUNTS
TRANSFERABLE
TO
MEDICAL SAVINGS ACCOUNTS.—
‘‘(A) IN
GENERAL.—Subsection (a) shall
not fail to apply to a participant in a plan, and
a plan shall not fail to be treated as a cafeteria
plan, solely because under the plan amounts not
paid out as reimbursements under a flexible
spending arrangement for health and disability
for the benefit of an individual are contributed
to a medical savings account (as defined in sec-
tion 220(c)) for the benefit of such individual.
‘‘(B) SPECIAL RULES.—
‘‘(i) TIMING
OF
CONTRIBUTIONS.—
Contributions made under this paragraph
shall be made on the last day of the plan
year of the cafeteria plan.
‘‘(ii) AVAILABILITY REQUIREMENT.—
Subparagraph (A) shall apply only if the
plan is available to at least 80 percent of
the employees of the employer. For pur-
poses of the preceding sentence, there shall
be excluded employees who are excluded
under section 414(q)(8) or who would be
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so excluded if ‘30’ were substituted for
‘171⁄2’ in subparagraph (B) thereof.’’.
(b) TREATMENT OF AMOUNTS RECEIVED BY QUALI-
FIED CASH OR DEFERRED ARRANGEMENT.—
(1) Paragraph (2) of section 401(k) of such
Code is amended by striking ‘‘and’’ at the end of
subparagraph (C), by striking the period at the end
of subparagraph (D) and inserting ‘‘, and’’, and by
adding at the end thereof the following new subpara-
graph:
‘‘(E) which provides that, with respect to
amounts held by the trust which are attrib-
utable to contributions made to the trust pursu-
ant to section 125(d)(3)—
‘‘(i) an employee’s right to such
amounts is nonforfeitable, and
‘‘(ii) such amounts may be used only
to pay expenses (not compensated for by
insurance or otherwise) for the medical
care (as defined in section 213) of the em-
ployee, the spouse of the employee, or any
dependent (as defined in section 152) of
the employee.’’.
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(2) Subsection (k) of section 401 of such Code
is amended by adding at the end thereof the follow-
ing new paragraph:
‘‘(11) TREATMENT
OF
AMOUNTS
RECEIVED
FROM
MEDICAL
SAVINGS
ARRANGEMENTS.—Con-
tributions made to a trust by reason of section
125(d)(3) shall not be taken into account under
paragraph (3)(A)(ii), and subsection (1) shall not
apply to such contributions.’’.
(c) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 1993.
SEC. 203. DEDUCTION FOR AMOUNTS PAID FOR QUALIFIED
CATASTROPHIC COVERAGE HEALTH PLAN.
(a) IN GENERAL.—Section 213 of the Internal Reve-
nue Code of 1986 (relating to medical, dental, etc., ex-
penses) is amended adding at the end thereof the following
new subsection:
‘‘(g) FULL DEDUCTION FOR AMOUNTS PAID FOR
QUALIFIED
CATASTROPHIC
COVERAGE
HEALTH
PLANS.—In the case of amounts paid for coverage under
a qualified catastrophic coverage health plan (as defined
in section 220(c))—
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‘‘(1) subsection (a) shall be applied without re-
gard to the limitation based on adjusted gross in-
come, and
‘‘(2) such amounts shall not be taken into ac-
count in determining whether any other amounts are
allowable as a deduction under this section.’’.
(b) TECHNICAL AMENDMENT.—Paragraph (2) of
section 162(l) of such Code is amended by adding at the
end thereof the following new subparagraph:
‘‘(C) 
QUALIFIED
CATASTROPHIC
COV-
ERAGE.—Paragraph (1) shall not apply to any
amount allowed as a deduction under section
213 for amounts paid for coverage under a
qualified catastrophic coverage health plan (as
defined in section 220(c)).’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1993.
TITLE 
III—UNIFORM 
CLAIMS;
ELECTRONIC 
CARDS; 
ELEC-
TRONIC BILLING
SEC. 301. ADVISORY COUNCIL ON HEALTH CLAIM PROCESS-
ING STANDARDIZATION.
(a) ESTABLISHMENT.—The Secretary of Health and
Human Services (in this title referred to as the ‘‘Sec-
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retary’’) shall establish an Advisory Council on Health
Claim Processing Standardization (in this title referred to
as the ‘‘Council’’).
(b) COMPOSITION.—The Council shall consist of 15
members appointed by the Secretary and shall include in-
dividuals representative of the health care community.
(c) RECOMMENDATIONS.—Not later than 2 years
after a majority of its members are appointed, the Council
shall submit to the Secretary recommendations concern-
ing—
(1) standards for uniform health claim reim-
bursement forms for hospitals and physicians and
the information to be contained on such forms;
(2) standards for electronic cards that could be
used to store a patient’s insurance information and
medical records; and
(3) the computerization of health claim billing
and the use of electronic means to transmit billing
information from hospitals and physicians to insur-
ers and the Secretary.
SEC. 302. SPECIFICATION AND USE OF UNIFORM HEALTH
CLAIM REIMBURSEMENT FORMS.
(a) ESTABLISHMENT.—Taking into account the rec-
ommendations of the Council under section 301(c)(1), the
Secretary shall specify a uniform health claim reimburse-
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ment form for use by hospitals and such a form for use
by physicians.
(b) USE.—(1) Each insurer or other entity respon-
sible for administration of a health benefit plan shall re-
quire the use of the appropriate form specified under sub-
section (a) for claims for hospital services or physician
services in the United States under the plan.
(2) The requirement of paragraph (1) shall apply
with respect to claims for reimbursement submitted under
a health benefit plan more than 6 months after the date
of the Secretary specifies the forms under subsection (a).
(c) HEALTH BENEFIT PLAN DEFINED.—The term
‘‘health benefit plan’’ means any hospital or medical ex-
pense incurred policy or certificate, hospital or medical
service plan contract, health maintenance subscriber con-
tract, multiple employer welfare arrangement, employee
benefit plan (as defined under the Employee Retirement
Income Security Act of 1974) that provides benefits with
respect to health care services, or the medicare or medic-
aid programs, but does not include—
(1) coverage only for accident, dental, vision,
disability income, or long-term care insurance, or
any combination thereof,
(2) coverage issued as a supplement to liability
insurance,
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(3) worker’s compensation or similar insurance,
or
(4)
automobile
medical-payment
insurance,
or any combination thereof.
TITLE IV—HEALTH INSURANCE
PORTABILITY PROVISIONS
SEC. 401. LIMITATION ON EXCLUSION FOR PRE-EXISTING
CONDITIONS; ASSURANCE OF CONTINUITY OF
COVERAGE.
(a) LIMITATIONS ON TREATMENT OF PRE-EXISTING
CONDITIONS.—Subject to subsection (c), a carrier may
not impose (or require an employer to impose through a
waiting period for coverage under a group health plan or
similar requirement) a limitation or exclusion of benefits
under a group health plan relating to treatment of a condi-
tion based on the fact that the condition pre-existed the
effectiveness of the coverage if—
(1) the condition relates to a condition that was
not diagnosed or treated within 3 months before the
date of coverage under the plan;
(2) the limitation or exclusion extends over
more than 6 months after the date of coverage
under the plan;
(3) the limitation or exclusion applies to an in-
dividual who, as of the date of birth, was covered
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under the plan or whose mother, as of such date,
was covered under the plan; or
(4) the limitation or exclusion relates to preg-
nancy.
In the case of an individual who is eligible for coverage
under an employer health benefit plan but for a waiting
period imposed by the employer, in applying paragraphs
(1) and (2), the individual shall be treated as having been
covered under the plan as of the earliest date of the begin-
ning of the waiting period.
(b) ASSURANCE
OF
CONTINUITY
OF
COVERAGE
THROUGH PREVIOUS SATISFACTION OF PRE-EXISTING
CONDITION REQUIREMENT.—
(1) IN GENERAL.—Each carrier shall waive any
period applicable to a preexisting condition for simi-
lar benefits with respect to an individual to the ex-
tent that the individual was covered for the condi-
tion under any health benefit plan that was in effect
before the date of the enrollment under the carrier’s
plan.
(2) CONTINUOUS COVERAGE REQUIRED.—
(A) IN GENERAL.—Paragraph (1) shall no
longer apply if there is a continuous period of
more than 60 days on which the individual was
not covered under a health benefit plan.
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(B) TREATMENT OF WAITING PERIODS.—
In applying subparagraph (A), any waiting pe-
riod imposed by an employer before an em-
ployee is eligible to be covered under a policy
shall be treated as a period in which the em-
ployee was covered under a health benefit plan.
(3) EXCLUSION
OF
CASH-ONLY
AND
DREAD
DISEASE
POLICIES.—In this subsection, the term
‘‘health benefit plan’’ does not include any insurance
which is offered primarily to provide—
(A) coverage for a specified disease or ill-
ness, or
(B) hospital or fixed indemnity policy, un-
less the Secretary (or in the case of a plan in
a State, the State) determines that such a pol-
icy provides sufficiently comprehensive coverage
of a benefit so that it should be treated as a
health benefit plan under this subsection.
(c) REGULATORY AUTHORITY.—The Secretary is au-
thorized directly, or through the states, to issue such regu-
lations as may be required to carry out this section.
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to coverage provided under
a group health plan on or after the first day of the
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first month beginning more than 1 year after the
date of the enactment of this Act.
(2) APPLICATION.—In applying paragraph (1),
coverage provided before the effective date shall be
taken into account in applying this section.
SEC. 402. LIMITS ON PREMIUM INCREASES.
(a) IN GENERAL.—A carrier may not provide for an
increase in the premium charged a small employer for a
small employer health benefit plan in a percentage that
exceeds the percentage change in the premium charged
under the plan for a newly covered employer within the
same class of business plus 15 percentage points.
(b) A carrier will only be allowed to set the maximum
percent increase in renewal premiums at 5 percent plus
the percent change in the base premium rate.
(c) EFFECTIVE DATE.—Subsection (a) shall apply to
premiums for plans renewed more than 1 year after the
date of the enactment of this Act.
SEC. 403. DEFINITIONS.
In this title:
(1) The term ‘‘carrier’’ means any entity which
provides health insurance or health benefits in a
State, and includes a licensed insurance company, a
prepaid hospital or medical service plan, a health
maintenance organization, the plan sponsor of a
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multiple employer welfare arrangement or an em-
ployee benefit plan (as defined under the Employee
Retirement Income Security Act of 1974), or any
other entity providing a plan of health insurance
subject to State insurance regulation.
(2) The term ‘‘employer health benefit plan’’
means a health benefit plan (including an employee
welfare benefit plan, as defined in section 3(1) of the
Employee Retirement Income Security Act of 1974)
which is offered to employees through an employer
and for which the employer provides for any con-
tribution to such plan or any premium for such plan
are deducted by the employer from compensation to
the employee.
(3) The term ‘‘full-time employee’’ means, with
respect to an employer, an individual who normally
is employed for at least thirty hours per week by the
employer.
(4) The term ‘‘small employer’’ means an entity
actively engaged in business which, on at least 50
percent of its working days during the preceding
year, employed at least two, but no more than one
hundred, full-time employees. For purposes of deter-
mining if an employer is a small employer, rules
similar to the rules of subsection (b) and (c) of sec-
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tion 414 of the Internal Revenue Code of 1986 shall
apply.
(5) The term ‘‘small employer carrier’’ means a
carrier with respect to the issuance of a small em-
ployer health benefit plan.
(6) The term ‘‘small employer health benefit
plan’’ means an employer health benefit plan which
provides coverage to one or more full-time employees
of a small employer.
(7) The term ‘‘base premium rate’’ means the
lowest premium that the insurer may charge for a
group with similar demographic characteristics, ex-
cluding factors related to health status, claims his-
tory, or duration of coverage.
(8) The term ‘‘State’’ means the 50 States, the
District of Columbia, Puerto Rico, the Virgin Is-
lands, Guam, and American Samoa.
SEC. 404. EXCISE TAX FOR VIOLATIONS.
(a) IN GENERAL.—Chapter 47 of the Internal Reve-
nue Code of 1986 (relating to taxes on group health plans)
is amended by adding at the end thereof the following new
section:
‘‘SEC. 5000A. FAILURE TO SATISFY CERTAIN STANDARDS
FOR HEALTH INSURANCE.
‘‘(a) GENERAL RULE.—
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‘‘(1) TAX
FOR
PORTABILITY
VIOLATIONS.—
There is hereby imposed a tax on a carrier for vio-
lating a requirement of section 401 of the Farm and
Rural Equity Reform Act of 1993, and
‘‘(2) TAX
FOR
EXCESSIVE
PREMIUM
IN-
CREASE.—There is hereby imposed a tax on a car-
rier providing for a premium increase in violation of
section 402 of the Farm and Rural Medical Equity
Reform Act of 1993.
‘‘(3) DETERMINATION
OF
VIOLATIONS.—The
Secretary of Health and Human Services shall de-
termine whether any carrier meets the requirements
of such sections.
‘‘(b) AMOUNT OF TAX.—
‘‘(1) IN GENERAL.—The amount of tax imposed
by subsection (a) by reason of 1 or more violations
during a taxable year shall be equal to 25 percent
of the gross premiums received during such taxable
year with respect to the employer health benefit plan
with respect to which the violation occurred.
‘‘(2) GROSS PREMIUMS.—For purposes of para-
graph (1), gross premiums shall include any consid-
eration received with respect to any health benefit
plan.
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‘‘(3) CONTROLLED GROUPS.—For purposes of
paragraph (1)—
‘‘(A) CONTROLLED
GROUP
OF
CORPORA-
TIONS.—All corporations which are members of
the same controlled group of corporations shall
be treated as 1 person. For purposes of the pre-
ceding sentence, the term ‘controlled group of
corporations’ has the meaning given to such
term by section 1563(a), except that—
‘‘(i) ‘more than 50 percent’ shall be
substituted for ‘at least 80 percent’ each
place it appears in section 1563(a)(1), and
‘‘(ii) the determination shall be made
without regard to subsections (a)(4) and
(e)(3)(C) of section 1563.
‘‘(B) PARTNERSHIPS, PROPRIETORSHIPS,
ETC., WHICH ARE UNDER COMMON CONTROL.—
Under regulations prescribed by the Secretary,
all trades or business (whether or not incor-
porated) which are under common control shall
be treated as 1 person. The regulations pre-
scribed under this subparagraph shall be based
on principles similar to the principles which
apply in the case of subparagraph (A).
‘‘(c) LIMITATION ON TAX.—
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‘‘(1) TAX NOT TO APPLY WHERE FAILURE NOT
DISCOVERED
EXERCISING
REASONABLE
DILI-
GENCE.—No tax shall be imposed by subsection (a)
with respect to any failure for which it is established
to the satisfaction of the Secretary that the person
on whom the tax is imposed did not know, and exer-
cising reasonable diligence would not have known,
that such failure existed.
‘‘(2) TAX
NOT
TO
APPLY
WHERE
FAILURES
CORRECTED WITHIN 30 DAYS.—No tax shall be im-
posed by subsection (a) with respect to any failure
if—
‘‘(A) such failure was due to reasonable
cause and not to willful neglect, and
‘‘(B) such failure is corrected during the
30-day period beginning on the 1st date any of
the persons on whom the tax is imposed knew,
or exercising reasonable diligence would have
known, that such failure existed.
‘‘(3) WAIVER BY SECRETARY.—In the case of a
failure which is due to reasonable cause and not to
willful neglect, the Secretary may waive part or all
of the tax imposed by subsection (a) to the extent
that the payment of such tax would be excessive rel-
ative to the failure involved.
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‘‘(d) CARRIER; EMPLOYER HEALTH BENEFIT PLAN
DEFINED.—For purposes of this section, the terms ‘car-
rier’ and ‘employer health benefit plan’ have the meanings
given such terms in section 403 of the Farm and Rural
Medical Equity Reform Act of 1993.’’.
(b) NONDEDUCTIBILITY OF TAX.—Paragraph (6) of
section 275(a) of such Code (relating to nondeductibility
of certain taxes) is amended by inserting ‘‘47,’’ after
‘‘46,’’.
(c) CLERICAL AMENDMENTS.—The table of sections
for such chapter 47 is amended by adding at the end
thereof the following new item:
‘‘Sec. 5000A. Failure to satisfy certain standards for health insurance.’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—The amendments made by
subsections (a) and (c) shall take effect on the date
of the enactment of this Act.
(2) NONDEDUCTIBILITY OF TAX.—The amend-
ment made by section 503(b) shall apply to taxable
years beginning after December 31, 1993.
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TITLE V—IMPROVED ACCESS TO
RURAL HEALTH SERVICES
Subtitle A—Rural Emergency
Medical Services Amendments
SEC. 501. ESTABLISHMENT OF OFFICE OF EMERGENCY
MEDICAL SERVICES.
Title XII of the Public Health Service Act (42 U.S.C.
300d et seq.) is amended—
(1) in the heading for the title, by striking
‘‘TRAUMA CARE’’ and inserting ‘‘EMERGENCY
MEDICAL SERVICES’’;
(2) in the heading for part A, by striking
‘‘GENERAL’’ and all that follows and inserting
‘‘GENERAL AUTHORITIES AND DUTIES’’; and
(3) by amending section 1201 to read as fol-
lows:
‘‘SEC. 1201. ESTABLISHMENT OF OFFICE OF EMERGENCY
MEDICAL SERVICES.
‘‘(a) IN GENERAL.—The Secretary shall establish an
office to be known as the Office of Emergency Medical
Services, which shall be headed by a director appointed
by the Secretary. The Secretary shall carry out this title
acting through the Director of such Office.
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‘‘(b) GENERAL AUTHORITIES AND DUTIES.—With
respect to emergency medical services (including trauma
care), the Secretary shall—
‘‘(1) conduct and support research, training,
evaluations, and demonstration projects;
‘‘(2) foster the development of appropriate,
modern systems of such services through the sharing
of information among agencies and individuals in-
volved in the study and provision of such services;
‘‘(3) sponsor workshops and conferences;
‘‘(4) as appropriate, disseminate to public and
private entities information obtained in carrying out
paragraphs (1) through (4);
‘‘(5) provide technical assistance to State and
local agencies;
‘‘(6) coordinate activities of the Department of
Health and Human Services; and
‘‘(7) as appropriate, coordinate activities of
such Department with activities of other Federal
agencies.
‘‘(c) CERTAIN REQUIREMENTS.—With respect to
emergency medical services (including trauma care), the
Secretary shall ensure that activities under subsection (b)
are carried out regarding—
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‘‘(1) maintaining an adequate number of health
professionals with expertise in the provision of the
services, including hospital-based professional and
prehospital-based professionals;
‘‘(2) developing, periodically reviewing, and re-
vising as appropriate, in collaboration with appro-
priate public and private entities, guidelines for the
provision of such services (including, for various typ-
ical circumstances, guidelines on the number and va-
riety of professionals, on equipment, and on train-
ing);
‘‘(3) the appropriate use of available tech-
nologies, including communications technologies; and
‘‘(4) the unique needs of underserved inner-city
areas and underserved rural areas.
‘‘(d) GRANTS, COOPERATIVE AGREEMENTS, AND
CONTRACTS.—In carrying out subsections (b) and (c), the
Secretary may make grants and enter into cooperative
agreements and contracts.
‘‘(e) DEFINITIONS.—For purposes of this part:
‘‘(1) The term ‘hospital-based professional’
means a health professional (including an allied
health professional) who has expertise in providing
one or more emergency medical services and who
normally provides the services at a medical facility.
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‘‘(2) The term ‘prehospital-based professional’
means a health professional (including an allied
health professional) who has expertise in providing
one or more emergency medical services and who
normally provides the services at the site of the med-
ical emergency or during transport to a medical fa-
cility.’’.
SEC. 502. STATE OFFICES OF EMERGENCY MEDICAL SERV-
ICES.
(a) TECHNICAL AMENDMENTS TO FACILITATE ES-
TABLISHMENT OF PROGRAM.—
(1) IN
GENERAL.—Title XII of the Public
Health Service Act (42 U.S.C. 300d et seq.) is
amended—
(A) by redesignating section 1232 as sec-
tion 1235;
(B) by redesignating sections 1231 and
1233 as sections 1241 and 1242, respectively;
and
(C) by redesignating sections 1211 through
1222 as sections 1221 through 1232, respec-
tively.
(2) MODIFICATIONS
IN
FORMAT
OF
TITLE
XII.—Title XII of the Public Health Service Act, as
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amended by paragraph (1) of this subsection, is
amended—
(A) by striking ‘‘PART B’’ and all that fol-
low through ‘‘STATE PLANS’’ and inserting the
following:
‘‘Subpart II—Formula Grants With Respect to
Modifications of State Plans’’;
(B) by striking ‘‘PART C—GENERAL PRO-
VISIONS’’ and inserting the following:
‘‘Subpart III—General Provisions’’;
(C) be redesignating sections 1202 and
1203 as sections 1211 and 1212, respectively;
and
(D) by inserting before section 1211 (as so
redesignated) the following:
‘‘PART B—TRAUMA CARE
‘‘Subpart I—Advisory Council; Clearinghouse’’.
(b) STATE OFFICES.—Title XII of the Public Health
Service Act, as amended by subsection (a) of this section,
is amended by inserting after section 1201 the following
new section:
‘‘SEC. 1202. STATE OFFICES OF EMERGENCY MEDICAL
SERVICES.
‘‘(a) PROGRAM
OF GRANTS.—The Secretary may
make grants to States for the purpose of improving the
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availability and quality of emergency medical services
through the operation of State offices of emergency medi-
cal services.
‘‘(b) REQUIREMENT OF MATCHING FUNDS.—
‘‘(1) IN
GENERAL.—The Secretary may not
make a grant under subsection (a) unless the State
involved agrees, with respect to the costs to be in-
curred by the State in carrying out the purpose de-
scribed in such subsection, to provide non-Federal
contributions toward such costs in an amount that—
‘‘(A) for the first fiscal year of payments
under the grant, is not less than $1 for each $3
of Federal funds provided in the grant;
‘‘(B) for any second fiscal year of such
payments, is not less than $1 for each $1 of
Federal funds provided in the grant; and
‘‘(C) for any third fiscal year of such pay-
ments, is not less than $3 for each $1 of Fed-
eral funds provided in the grant.
‘‘(2) DETERMINATION
OF
AMOUNT
OF
NON-
FEDERAL CONTRIBUTION.—
‘‘(A) Subject to subparagraph (B), non-
Federal contributions required in paragraph (1)
may be in cash or in kind, fairly evaluated, in-
cluding plant, equipment, or services. Amounts
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provided by the Federal Government, or serv-
ices assisted or subsidized to any significant ex-
tent by the Federal Government, may not be in-
cluded in determining the amount of such non-
Federal contributions.
‘‘(B) The Secretary may not make a grant
under subsection (a) unless the State involved
agrees that—
‘‘(i) for the first fiscal year of pay-
ments under the grant, 100 percent or less
of the non-Federal contributions required
in paragraph (1) will be provided in the
form of in-kind contributions;
‘‘(ii) for any second fiscal year of such
payments, not more than 50 percent of
such non-Federal contributions will be pro-
vided in the form of in-kind contributions;
and
‘‘(iii) for any third fiscal year of such
payments, such non-Federal contributions
will be provided solely in the form of cash.
‘‘(c) CERTAIN REQUIRED ACTIVITIES.—The Sec-
retary may not make a grant under subsection (a) unless
the State involved agrees that activities carried out by an
office operated pursuant to such subsection will include—
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‘‘(1) coordinating the activities carried out in
the State that relate to emergency medical services;
‘‘(2) activities regarding the matters described
in paragraphs (1) through (4) section 1201(b);
‘‘(3) identifying Federal and State programs re-
garding emergency medical services and providing
technical assistance to public and nonprofit private
entities regarding participation in such programs.
‘‘(d) REQUIREMENT REGARDING ANNUAL BUDGET
FOR OFFICE.—The Secretary may not make a grant
under subsection (a) unless the State involved agrees that,
for any fiscal year for which the State receives such a
grant, the office operated pursuant to subsection (a) will
be provided with an annual budget of not less than
$50,000.
‘‘(e) CERTAIN USES OF FUNDS.—
‘‘(1) RESTRICTIONS.—The Secretary may not
make a grant under subsection (a) unless the State
involved agrees that—
‘‘(A) if research with respect to emergency
medical services is conducted pursuant to the
grant, not more than 10 percent of the grant
will be expended for such research; and
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‘‘(B) the grant will not be expended to pro-
vide emergency medical services (including pro-
viding cash payments regarding such services).
‘‘(2) ESTABLISHMENT
OF
OFFICE.—Activities
for which a State may expend a grant under sub-
section (a) include paying the costs of establishing
an office of emergency medical services for purposes
of such subsection.
‘‘(f) REPORTS.—The Secretary may not make a
grant under subsection (a) unless the State involved
agrees to submit to the Secretary reports containing such
information as the Secretary may require regarding activi-
ties carried out under this section by the State.
‘‘(g) REQUIREMENT
OF APPLICATION.—The Sec-
retary may not make a grant under subsection (a) unless
an application for the grant is submitted to the Secretary
and the application is in such form, is made in such man-
ner, and contains such agreements, assurances, and infor-
mation as the Secretary determines to be necessary to
carry out this section.’’.
SEC. 503. PROGRAMS FOR RURAL AREAS.
(a) IN GENERAL.—Title XII of the Public Health
Service Act, as amended by section 502 of this Act, is
amended—
(1) by transferring section 1204 to part A;