I
103D CONGRESS
1ST SESSION
H. R. 1398
To amend the Internal Revenue Code of 1986 and the Social Security Act
to provide for health insurance coverage for workers and the public
in a manner that contains the costs of health care in the United States.
IN THE HOUSE OF REPRESENTATIVES
MARCH 18, 1993
Mr. CARDIN introduced the following bill; which was referred jointly to the
Committees on Energy and Commerce, Ways and Means, and Education
and Labor
A BILL
To amend the Internal Revenue Code of 1986 and the Social
Security Act to provide for health insurance coverage
for workers and the public in a manner that contains
the costs of health care in the United States.
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
‘‘Flexible Medical Access and Cost Containment Act of
1993’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—REQUIRING EMPLOYERS TO PROVIDE HEALTH
INSURANCE COVERAGE FOR EMPLOYEES AND DEPENDENTS
Sec. 101. Requirement.
Sec. 102. Meeting requirement through enrollment of employees and families
under qualified employer health plans.
‘‘TITLE XXI—REQUIREMENT FOR ENROLLMENT OF EMPLOYEES
UNDER A QUALIFIED EMPLOYER HEALTH PLAN
‘‘Sec. 2100. Relation to Internal Revenue Code requirement.
‘‘PART A—EMPLOYER REQUIREMENT TO ENROLL EMPLOYEES AND FAMILIES
IN A QUALIFIED EMPLOYER HEALTH PLAN
‘‘Sec. 2101. Application to full-time employees.
‘‘Sec. 2102. Application to part-time employees.
‘‘Sec. 2103. Application to seasonal and temporary employees.
‘‘Sec. 2104. Treatment of all family members as a unit; uniform treatment
of full-time employees and of part-time employees.
‘‘Sec. 2105. Application of requirement to employers of different sizes.
‘‘Sec. 2106. Timing of enrollment; period of coverage.
‘‘PART B—REQUIREMENTS FOR QUALIFIED EMPLOYER HEALTH PLANS
‘‘Sec. 2121. Qualified employer health plan defined.
‘‘Sec. 2122. Requirements relating to employee premiums and cost-shar-
ing.
‘‘PART C—STANDARDS FOR QUALIFIED HEALTH PLANS
‘‘Sec. 2151. Certification of qualified health plans.
‘‘Sec. 2152. Treatment of family as a unit; coverage period; health plan
cards.
‘‘Sec. 2153. Requirements respecting basic benefits.
‘‘Sec. 2154. Requirements respecting limits on pre-existing condition exclu-
sions and coverage standards for basic health services.
‘‘Sec. 2155. Requirements respecting limits on cost-sharing.
‘‘Sec. 2156. Use of payment rates.
‘‘Sec. 2157. Coordination and portability of health coverage under quali-
fied health plans.
‘‘Sec. 2158. Consumer protections.
‘‘Sec. 2159. Preemption of certain state and federal requirements.
‘‘Sec. 2160. Use of uniform claims forms; uniform information reporting.
‘‘PART D—DEFINITIONS AND MISCELLANEOUS
‘‘Sec. 2181. Definitions.
‘‘Sec. 2182. Nonapplication to residents of Puerto Rico and territories.
Sec. 103. Repeal of COBRA continuation requirements.
TITLE II—PROVISION OF HEALTH INSURANCE THROUGH A
PUBLIC HEALTH PLAN
Sec. 201. Public health plan.
‘‘TITLE XXII—PUBLIC HEALTH PLAN
‘‘PART A—ELIGIBILITY AND ENROLLMENT
‘‘Sec. 2201. Eligibility to enroll for health insurance benefits and to apply
for low-income assistance.
‘‘Sec. 2202. Application for enrollment.
‘‘Sec. 2203. Coverage period; termination of enrollment.
‘‘Sec. 2204. Requirement of health insurance coverage.
‘‘PART B—HEALTH INSURANCE BENEFITS
‘‘Sec. 2211. Required health services.
‘‘PART C—PAYMENTS FOR BENEFITS; DEDUCTIBLES, COINSURANCE, AND
STOP-LOSS PROTECTION FOR REQUIRED HEALTH SERVICES
‘‘Sec. 2221. Payments for benefits.
‘‘Sec. 2222. Deductible for required health services.
‘‘Sec. 2223. Coinsurance for required health services.
‘‘Sec. 2224. Limit on cost-sharing for required health services.
‘‘Sec. 2225. Exclusions; coordination.
‘‘Sec. 2226. Application of particular qualified health plan requirements.
‘‘PART D—PREMIUMS, PUBLIC HEALTH TRUST FUND
‘‘Sec. 2231. Premiums.
‘‘Sec. 2232. Collection of premiums.
‘‘Sec. 2233. Public Health Trust Fund.
‘‘Sec. 2234. Transfer payments in the case of multiple employers.
‘‘Sec. 2235. Use of uniform claims forms; uniform information reporting.
‘‘PART E—ASSISTANCE FOR LOW-INCOME INDIVIDUALS
‘‘Sec. 2241. Assistance for individuals with income below the poverty line
enrolled on a non-employment basis.
‘‘Sec. 2242. Assistance for individuals with income below twice the poverty
line enrolled on a non-employment basis.
‘‘Sec. 2243. Assistance for individuals covered under qualified employer
health plans.
‘‘Sec. 2244. Applications for assistance.
‘‘Sec. 2245. Reconciliation of premium assistance through use of income
statements.
‘‘Sec. 2246. Treatment of certain cash assistance recipients.
‘‘Sec. 2247. Computation of family adjusted total income.
‘‘PART F—ADMINISTRATIVE PROVISIONS
‘‘Sec. 2261. Agreements with hospitals; participating physicians; treatment
of Indian Health Service facilities.
‘‘Sec. 2262. Health maintenance organizations.
‘‘Sec. 2263. Use of fiscal agents.
‘‘Sec. 2264. General administration.
‘‘Sec. 2265. Determinations; appeals; Provider Reimbursement Review
Board.
‘‘Sec. 2266. Program integrity; miscellaneous provisions.
‘‘Sec. 2267. Information by telephone.
‘‘Sec. 2268. Demonstration project authority.
‘‘Sec. 2269. Incorporation of miscellaneous medicare provisions.
‘‘PART G—[RESERVED]
‘‘PART H—DEFINITIONS AND MISCELLANEOUS
‘‘Sec. 2281. Incorporation of certain definitions used in other health-relat-
ed titles.
‘‘Sec. 2282. Definitions relating to families.
‘‘Sec. 2283. Other definitions.
‘‘Sec. 2284. Authorizing reciprocal coverage of foreign nationals.
‘‘Sec. 2285. Nonapplication to residents of Puerto Rico and territories.
TITLE III—COST CONTAINMENT
Subtitle A—Health Care Spending Amounts
Sec. 301. Specification of overall health care spending amounts.
Sec. 302. Establishment of Federal Health Care Cost Containment Commis-
sion.
Sec. 303. State Health Rate Commissions.
Sec. 304. Standard for payment rates.
Sec. 305. Application of rates under medicare and public programs.
Subtitle B—Administrative Simplification
Sec. 321. Requirement for uniform health claims cards.
Sec. 322. Requirement for entitlement verification system.
Sec. 323. Requirements for uniform claims and electronic claims data set.
Sec. 324. Electronic medical records and reporting.
Sec. 325. Uniform hospital cost reporting.
Sec. 326. Definitions.
Subtitle C—Malpractice Reform
Sec. 331. Malpractice reform.
TITLE IV—GROUP HEALTH INSURANCE REFORM
Sec. 401. Excise tax on premiums received on health insurance policies which
do not meet certain requirements.
Sec. 402. Group health insurance standards.
‘‘TITLE XXIII—GROUP HEALTH INSURANCE STANDARDS
‘‘PART 1—GENERAL STANDARDS; DEFINITIONS
‘‘Sec. 2301. Application of requirements to employment-related health
plans.
‘‘Sec. 2302. Establishment of standards.
‘‘Sec. 2303. Requirements applicable to all employment-related health
plans.
‘‘Sec. 2304. Definitions.
‘‘Sec. 2305. Notice of plans meetings requirements.
‘‘PART 2—SMALL EMPLOYER HEALTH INSURANCE REFORM
‘‘Sec. 2311. Enrollment practice and guaranteed renewability requirements
for small employer health plans.
TITLE I—REQUIRING EMPLOY-
ERS TO PROVIDE HEALTH IN-
SURANCE 
COVERAGE 
FOR
EMPLOYEES 
AND 
DEPEND-
ENTS
SEC. 101. REQUIREMENT.
(a) IN GENERAL.—Chapter 47 of the Internal Reve-
nue Code of 1986 is amended by adding at the end thereof
the following new section:
‘‘SEC. 5000A. FAILURE TO COVER EMPLOYEES AND DE-
PENDENTS UNDER A QUALIFIED EMPLOYER
HEALTH PLAN.
‘‘(a) IMPOSITION
OF TAX.—In addition to other
taxes, if an employee of any employer is not covered under
a qualified employer health plan of such employer, there
is hereby imposed on such employer a tax.
‘‘(b) AMOUNT OF TAX.—
‘‘(1) IN GENERAL.—The amount of the tax im-
posed by subsection (a) on any failure with respect
to an employee shall be $100 for each day in the
noncompliance period with respect to such failure.
‘‘(2) NONCOMPLIANCE PERIOD.—For purposes
of this section, the term ‘noncompliance period’
means, with respect to any failure, the period—
‘‘(A) beginning on the date such failure
first occurs, and
‘‘(B) ending on the date such failure is
corrected.
‘‘(c) LIABILITY FOR TAX.—The employer shall be lia-
ble for the tax imposed by subsection (a).
‘‘(d) EXCEPTIONS.—
‘‘(1) TRANSITION.—The taxes imposed by this
section shall not take effect before the date on which
the requirements of part A of title XXI of the Social
Security Act apply with respect to the employer
under section 2105(a) of such Act.
‘‘(2) 
EMPLOYEES
COVERED
BY
FEDERAL
HEALTH PLAN.—The taxes imposed by this section
shall not apply to any employee of the United States
if, by reason of such employment (or the employ-
ment of a family member), the employee—
‘‘(A) is enrolled in a health benefits plan
under chapter 89 of title 5, United States Code,
or
‘‘(B) is provided medical and dental bene-
fits under chapter 55 of title 10 of such Code.
‘‘(3) TAX NOT TO APPLY WHERE FAILURE NOT
DISCOVERED
EXERCISING
REASONABLE
DILI-
GENCE.—No tax shall be imposed by subsection (a)
on any failure during any period for which it is es-
tablished to the satisfaction of the Secretary that the
employer did not know, and exercising reasonable
diligence would not have known, that such failure
existed.
‘‘(4) TAX
NOT
TO
APPLY
TO
FAILURE
COR-
RECTED WITHIN 30 DAYS.—No tax shall be imposed
by subsection (a) on any failure if—
‘‘(A) such failure was due to reasonable
cause and not to willful neglect, and
‘‘(B) such failure is corrected during the
first 30 days of the noncompliance period with
respect to such failure.
‘‘(5) 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 of all
of the tax imposed by subsection (a) to the extent
that the payment of such tax would be unduly bur-
densome relative to the failure involved.
‘‘(e) DEFINITIONS.—For purposes of this section—
‘‘(1) EMPLOYEE; EMPLOYER.—The terms ‘em-
ployee’ and ‘employer’ have the same meanings as
such terms have for purposes of chapter 21.
‘‘(2) QUALIFIED EMPLOYER HEALTH PLAN.—
The term ‘qualified employer health plan’ means a
plan meeting the requirements of title XXI of the
Social Security Act.
‘‘(3) COVERED.—An employee is not considered
to be ‘covered’ under a qualified employer health
plan if a dependent of the employee, whose coverage
is provided for under title XXI of the Social Security
Act, is not covered under such plan.’’.
(b) DEFICIENCY PROCEDURES TO APPLY TO CHAP-
TER 47.—
(1) The following provisions of the Internal
Revenue Code of 1986 are each amended by striking
‘‘or 44’’ each place it appears and inserting ‘‘44, or
47’’.
(A) Subsections (a) and (b)(2) of section
6211.
(B) Section 6212(a).
(C) Subsections (a) and (g) of section
6213.
(D) Subsections (c) and (d) of section
6214.
(E) Section 6161(b)(1).
(F) Section 6344(a)(1).
(G) Subsections (a) and (b)(1) of section
6512.
(H) Section 7422(e).
(2) Sections 6211(a) and 6862(a) of such Code
are each amended by striking ‘‘and 44’’ and insert-
ing ‘‘44, and 47’’.
(3) Paragraph (1) of section 6212(b) of such
Code is amended—
(A) by striking ‘‘or chapter 44’’ and insert-
ing ‘‘chapter 44, or chapter 47’’, and
(B) by striking ‘‘chapter 44, and this chap-
ter’’ and inserting ‘‘chapter 44, chapter 47, and
this chapter’’.
(4) Paragraph (1) of section 6212(c) of such
Code is amended by striking ‘‘or of chapter 44 tax
for the same taxable period’’ and inserting ‘‘, of
chapter 44 tax for the same taxable period, or of
chapter 47 for each act or failure to act to which the
petition relates’’.
(c) CLERICAL AMENDMENTS.—
(1) So much of chapter 47 of such Code as pre-
cedes subsection (a) of section 5000 is amended to
read as follows:
‘‘CHAPTER 47—TAXES RELATING TO
GROUP HEALTH PLANS
‘‘Sec. 5000. Contributions to nonconforming large group health
plans.
‘‘Sec. 5000A. Failure to cover employees and dependents under
a qualified employer health plan.
‘‘SEC. 5000. CONTRIBUTIONS TO NONCONFORMING LARGE
GROUP HEALTH PLANS.’’
(2) The table of chapters for subtitle D of such
Code is amended by striking the item relating to
chapter 47 and inserting the following:
‘‘Chapter 47. Taxes relating to group health plans.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to failures occurring after Decem-
ber 31, 1993.
SEC. 102. MEETING REQUIREMENT THROUGH ENROLL-
MENT OF EMPLOYEES AND FAMILIES UNDER
QUALIFIED EMPLOYER HEALTH PLANS.
The Social Security Act is amended by adding at the
end the following new title:
‘‘TITLE 
XXI—REQUIREMENT 
FOR 
ENROLL-
MENT OF EMPLOYEES UNDER A QUALI-
FIED EMPLOYER HEALTH PLAN
‘‘SEC. 2100. RELATION TO INTERNAL REVENUE CODE RE-
QUIREMENT.
‘‘(a) IN GENERAL.—If an employer fails to enroll em-
ployees (and family members) under a qualified employer
health plan in accordance with this title, the employer is
liable for payment of an excise tax under section 5000A(a)
of the Internal Revenue Code of 1986.
‘‘(b) TREATMENT OF SMALL EMPLOYERS.—A small
employer may meet such requirements through purchase
of coverage under the public plan provided under title
XXII.
‘‘PART A—EMPLOYER REQUIREMENT TO ENROLL EM-
PLOYEES
AND FAMILIES
IN
A QUALIFIED EM-
PLOYER HEALTH PLAN
‘‘SEC. 2101. APPLICATION TO FULL-TIME EMPLOYEES.
‘‘(a) UNMARRIED EMPLOYEES.—
‘‘(1) IN GENERAL.—Except as provided in this
part, each employer shall, in accordance with this
title, enroll each of its full-time employees who is un-
married in a qualified employer health plan.
‘‘(2) MULTIPLE FULL-TIME EMPLOYMENT.—
‘‘(A) EACH OFFERS QUALIFIED PLAN.—In
the case of an unmarried individual who is a
full-time employee of more than 1 employer, if
more than 1 such employer offers the employee
enrollment under a qualified employer health
plan—
‘‘(i) the individual shall elect (in a
manner specified by the Secretary) the
qualified employer health plan under which
the individual (and family members) will
be enrolled;
‘‘(ii) a nonenrolling employer—
‘‘(I) is not obligated to enroll the
employee (and family members) under
its qualified employer health plan (if
any) and may not charge the individ-
ual any premiums for required cov-
erage under the qualified employer
health plan, and
‘‘(II) is not liable for any tax
under section 3151(a)(1) of the Inter-
nal Revenue Code of 1986 but is lia-
ble for a nonenrolling employer pre-
mium under section 2234(a)(1)(A);
and
‘‘(iii) the enrolling employer is eligible
for an enrolling employer subsidy under
section 2234(a)(1)(B).
‘‘(B) ONLY 1 OFFERS QUALIFIED PLAN.—
In the case of an unmarried individual who is
a full-time employee of more than 1 employer,
if only 1 employer offers the employee enroll-
ment under a qualified employer health plan—
‘‘(i) the individual shall be enrolled
under such plan and, pursuant to sub-
section (c)(2) of section 3151 of the Inter-
nal Revenue Code of 1986, is not subject
to taxes under subsection (a)(2) of such
section with respect to employment with
nonenrolling employers, and
‘‘(ii) the enrolling employer is eligible
for an enrolling employer subsidy under
section 2234(a)(1)(B).
‘‘(b) MARRIED EMPLOYEES.—
‘‘(1) IN GENERAL.—Except as provided in this
part, each employer shall, in accordance with this
title, enroll each of its full-time employees who is
married in a qualified employer health plan.
‘‘(2) BOTH
FULL-TIME
EMPLOYEES.—In the
case of married individuals, if both are full-time em-
ployees of 1 or more employers, rules established by
the Secretary based on the rules under subsection
(a)(2) for multiple employment of unmarried individ-
uals shall apply.
‘‘(c) CONSTRUCTION.—Nothing in this section shall
be construed as preventing the nonenrolling plan from
supplementing the benefits of the enrolling plan.
‘‘(d) DEFINITIONS.—In this section, the terms ‘en-
rolling employer’ and ‘enrolling plan’ mean, with respect
to an individual or a married couple, the employer that
offers the qualified employer health plan in which the indi-
vidual or couple is enrolled under subsection (a)(2)(A)(i)
or (b)(2)(A)(i) and such plan, respectively, and the terms
‘nonenrolling employer’ and ‘nonenrolling plan’ mean the
other employer and other qualified employer health plan,
respectively.
‘‘SEC. 2102. APPLICATION TO PART-TIME EMPLOYEES.
‘‘(a) APPLICATION
OF
FULL-TIME
EMPLOYEE
RULES.—Subject to subsection (b), the provisions of sec-
tion 2101 shall apply to part-time employees in the same
manner as they apply to full-time employees.
‘‘(b) SEPARATE TREATMENT
OF PART-TIME
AND
FULL-TIME EMPLOYEES UNDER QUALIFIED EMPLOYER
HEALTH PLANS.—For rule regarding separate, but uni-
form, treatment of full-time and part-time employees (and
family members), see section 2104(b).
‘‘SEC. 2103. APPLICATION TO SEASONAL AND TEMPORARY
EMPLOYEES.
‘‘(a) ENROLLMENT UNDER QUALIFIED EMPLOYER
HEALTH PLAN NOT AFFECTING APPLICATION OF EXCISE
TAX.—The enrolling by an employer of an employee des-
ignated under subsection (b) as a seasonal or temporary
employee (as defined in section 2181(b)(3)), whether a
part-time or full-time employee, under the qualified em-
ployer health plan of the employer shall not be considered,
for purposes of section 3151 of the Internal Revenue Code
ployer premium under section 2234(a)(1)(A)) with
respect to such employment, and the child is, subject
to section 3151(c)(2) of such Code, liable for taxes
under section 3151(a)(2) of such Code.
‘‘(b) UNIFORM TREATMENT OF FULL-TIME EMPLOY-
EES AND OF PART-TIME EMPLOYEES.—Except as author-
ized under sections 2101 and 2102 (with respect to per-
mitting certain multiple-employed individuals to elect cov-
erage under qualified employer health plans) and as pro-
vided under section 2103 and subsection (a)(2) of this sec-
tion, an employer health plan is not a qualified employer
health plan if the plan—
‘‘(1) enrolls some (but not all) full-time employ-
ees (and family members) required to be enrolled
under this part, or
‘‘(2) enrolls some (but not all) part-time em-
ployees (and family members) required to be enrolled
under this part.
However, a plan may be a qualified employer health plan
and enroll only full-time employees (and family members),
but not part-time employees (and family members).
‘‘SEC. 2105. APPLICATION OF REQUIREMENT TO EMPLOY-
ERS OF DIFFERENT SIZES.
‘‘(a) IN GENERAL.—Except as provided in subsection
(b), the requirements of this part apply—