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(A) utilizing other forms of cost contain-
ment not prohibited under subsection (a); or
(B) applying requirements that make dis-
tinctions between acute care and chronic care.
(2) NONAPPLICABILITY.—This section shall not
apply to—
(A) substance abuse or chemical dependency
benefits; or
(B) health benefits or health plans paid for
under title XVIII or XIX of the Social Security
Act.
(3) STATE LAW.—Nothing in this section shall be
construed to preempt any State law that provides for
greater parity with respect to mental health benefits
than that required under this section.
(c) SMALL EMPLOYER EXEMPTION.—
(1) IN GENERAL.—This section shall not apply
to plans maintained by employers that employ less
than 26 employees.
(2) APPLICATION OF CERTAIN RULES IN DETER-
MINATION OF EMPLOYER SIZE.—For purposes of this
subsection—
(A) APPLICATION
OF
AGGREGATION
RULE
FOR EMPLOYERS.—All persons treated as a sin-
gle employer under subsection (b), (c), (m), or
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(o) of section 414 of the Internal Revenue Code
of 1986 shall be treated as 1 employer.
(B) EMPLOYERS NOT IN EXISTENCE IN PRE-
CEDING YEAR.—In the case of an employer which
was not in existence throughout the preceding
calendar year, the determination of whether such
employer is a small employer shall be based on
the average number of employees that it is rea-
sonably expected such employer will employ on
business days in the current calendar year.
(C) PREDECESSORS.—Any reference in this
subsection to an employer shall include a ref-
erence to any predecessor of such employer.
SEC. 703. DEFINITIONS.
For purposes of this title:
(1) GROUP HEALTH PLAN.—
(A) IN GENERAL.—The term ‘‘group health
plan’’ means an employee welfare benefit plan
(as defined in section 3(1) of the Employee Re-
tirement Income Security Act of 1974) to the ex-
tent that the plan provides medical care (as de-
fined in paragraph (2)) and including items and
services paid for as medical care) to employees or
their dependents (as defined under the terms of
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the plan) directly or through insurance, reim-
bursement, or otherwise.
(B) MEDICAL
CARE.—The term ‘‘medical
care’’ means amounts paid for—
(i) the diagnosis, cure, mitigation,
treatment, or prevention of disease, or
amounts paid for the purpose of affecting
any structure or function of the body,
(ii) amounts paid for transportation
primarily for and essential to medical care
referred to in clause (i), and
(iii) amounts paid for insurance cover-
ing medical care referred to in clauses (i)
and (ii).
(2) HEALTH INSURANCE COVERAGE.—The term
‘‘health insurance coverage’’ means benefits consisting
of medical care (provided directly, through insurance
or reimbursement, or otherwise and including items
and services paid for as medical care) under any hos-
pital or medical service policy or certificate, hospital
or medical service plan contract, or health mainte-
nance organization contract offered by a health insur-
ance issuer.
(3) HEALTH
INSURANCE
ISSUER.—The term
‘‘health insurance issuer’’ means an insurance com-
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pany, insurance service, or insurance organization
(including a health maintenance organization, as de-
fined in paragraph (4)) which is licensed to engage
in the business of insurance in a State and which is
subject to State law which regulates insurance (with-
in the meaning of section 514(b)(2) of the Employee
Retirement Income Security Act of 1974), and in-
cludes a plan sponsor described in section 3(16)(B) of
the Employee Retirement Income Security Act of
1974 in the case of a group health plan which is an
employee welfare benefit plan (as defined in section
3(1) of such Act). Such term does not include a group
health plan.
(4) HEALTH MAINTENANCE ORGANIZATION.—The
term ‘‘health maintenance organization’’ means—
(A) a federally qualified health maintenance
organization (as defined in section 1301(a) of the
Public Health Service Act),
(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 manner and
to the same extent as such a health maintenance
organization.
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(5) STATE.—The term ‘‘State’’ means each of the
several States, the District of Columbia, Puerto Rico,
the Virgin Islands, Guam, American Samoa, and the
Northern Mariana Islands.
SEC. 704. SUNSET.
Sections 701 through 703 shall cease to be effective on
September 30, 2001.
SEC. 705. FEDERAL EMPLOYEE HEALTH BENEFIT PROGRAM.
For the Federal Employee Health Benefit Program,
sections 701 through 703 will take effect on October 1, 1997.
SEC. 706. EXEMPTION.
Notwithstanding the provisions of this title, if the pro-
visions of this title result in a 1 percent or greater increase
in the cost of a group health plan’s premiums, the purchaser
is exempt from the provisions of this title.
This Act may be cited as the ‘‘Departments of Veter-
ans Affairs and Housing and Urban Development, and
Independent Agencies Appropriations Act, 1997’’.
Passed the House of Representatives June 26, 1996.
Attest:
ROBIN H. CARLE,
Clerk.
Passed the Senate September 5, 1996.
Attest:
KELLY D. JOHNSTON,
Secretary.