I 
109TH CONGRESS 
1ST SESSION H. R. 3917 
To provide for payment by large employers for employees, and spouses and 
dependents of employees, who are covered under the Medicaid Program 
or SCHIP. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 27, 2005 
Mr. PALLONE introduced the following bill; which was referred to the 
Committee on Energy and Commerce 
A BILL 
To provide for payment by large employers for employees, 
and spouses and dependents of employees, who are cov-
ered under the Medicaid Program or SCHIP. 
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 ‘‘Large Employer Med-
icaid and SCHIP Responsibility Act of 2005’’.
SEC. 2. LARGE EMPLOYER RESPONSIBILITY FOR MEDICAID 
AND SCHIP COVERAGE OF EMPLOYEES AND 
THEIR DEPENDENTS. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, any large employer that employs one or more 
employees who are enrolled (or any of whose spouses or 
dependent children are enrolled) under medicaid or 
SCHIP for a month in a year is liable to the Secretary 
of Health and Human Services for payment of the penalty 
computed under subsection (b)(4) with respect to each 
such employee, spouse, or dependent. Such payment shall 
be made on a quarterly basis for months in each quarter 
in a form and manner specified by the Secretary and shall 
be payable to States in accordance with subsection (d). 
(b) AMOUNT OF PER CAPITA PENALTY.— 
(1) COMPUTATION
OF
MONTHLY
AVERAGE 
COSTS FOR ADULTS AND CHILDREN.—The Secretary 
shall compute for months in each year for each 
State a monthly average cost of providing acute care 
under medicaid and SCHIP for a month in the year 
for— 
(A) an adult who is not disabled and is 
under 65 years of age; and 
(B) a child. 
(2) ADMINISTRATIVE
FACTOR
FOR
COSTS
OF 
PROGRAM.—The Secretary shall compute an esti-
mate of the average monthly per capita cost of ad-
ministering this section in a year, including costs re-
lating to collection of the penalty under this section 
and enforcement of such penalty. 
(3) ADJUSTED MONTHLY AVERAGE COST PER 
COVERED EMPLOYEE OR SPOUSE OR CHILD.—The 
Secretary shall compute an adjusted monthly aver-
age cost for a month in a year for an employee, or 
spouse of an employee, and for a dependent child in 
each State equal to the sum of— 
(A) 80 percent of the amount computed 
under subparagraph (1) for an adult or child, 
respectively; and 
(B) the monthly per capita cost computed 
under paragraph (2). 
(4) PENALTY AMOUNT.—The amount of the per 
capita penalty under this paragraph for an employer 
for a month in a year for an employee (or spouse 
of an employee) or a dependent child is equal to the 
adjusted monthly average cost for such employee, 
spouse, or dependent child computed under para-
graph (3). 
(c) ENFORCEMENT.—Penalties imposed under this 
section may be collected in the same manner as civil
money penalties may be collected under section 1128A of 
the Social Security Act. 
(d) PAYMENT TO STATE PROVIDING MEDICAID OR 
SCHIP ASSISTANCE.—The Secretary shall provide for the 
distribution of penalties paid under this section with re-
spect to an employee, spouse, or child covered under med-
icaid or SCHIP in a State to such State. 
(e) DEFINITIONS.—For purposes of this section: 
(1) EMPLOYEE.—The term ‘‘employee’’ means, 
with respect to an employer, an individual who is 
employed by the employer for an average of at least 
40 hours a week and has been so employed by that 
employer for at least 3 months. 
(2) LARGE EMPLOYER.—The term ‘‘large em-
ployer’’ means an employer that has 50 or more em-
ployees. 
(3) MEDICAID.—The term ‘‘medicaid’’ means a 
State plan under title XIX of the Social Security 
Act. 
(4) SCHIP.—The term ‘‘SCHIP’’ means a 
State child health insurance program under title 
XXI of the Social Security Act. 
(5) SECRETARY.—The term ‘‘Secretary’’ means 
Secretary of Health and Human Services.
(6) STATE.—The term ‘‘State’’ has the mean-
ing given such term for purposes of title XIX of the 
Social Security Act. 
(f) EFFECTIVE DATE.—This section shall apply to 
employers for months beginning with January 2006. 
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