I
104TH CONGRESS
2D SESSION
H. R. 4135
To amend the Internal Revenue Code of 1986 to fully implement the
Newborns’ and Mothers’ Health Protection Act of 1996 and the Mental
Health Parity Act of 1996.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 24, 1996
Mr. THOMAS (for himself and Mr. STARK) introduced the following bill; which
was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to fully imple-
ment the Newborns’ and Mothers’ Health Protection Act
of 1996 and the Mental Health Parity Act of 1996.
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 ‘‘Newborns’ and Moth-
ers’ Health Protection and Mental Health Parity Imple-
mentation Amendments of 1996’’.
SEC. 2. AMENDMENTS TO THE INTERNAL REVENUE CODE
OF 1986 TO IMPLEMENT THE NEWBORNS’ AND
MOTHERS’ HEALTH PROTECTION ACT OF 1996
AND THE MENTAL HEALTH PARITY ACT OF
1996.
(a) IN GENERAL.—Subtitle K of the Internal Reve-
nue Code of 1986 (as added by section 401(a) of the
Health Insurance Portability and Accountability Act of
1996) is amended—
(1) by striking all that precedes section 9801
and inserting the following:
‘‘Subtitle K—Group Health Plan
Requirements
‘‘CHAPTER 100. Group health plan requirements.
‘‘CHAPTER 100—GROUP HEALTH PLAN
REQUIREMENTS
‘‘Subchapter A. Requirements relating to portability, access, and
renewability.
‘‘Subchapter B. Other requirements.
‘‘Subchapter C. General provisions.
‘‘Subchapter A—Requirements Relating to
Portability, Access, and Renewability
‘‘Sec. 9801. Increased portability through limitation on preexist-
ing condition exclusions.
‘‘Sec. 9802. Prohibiting discrimination against individual partici-
pants and beneficiaries based on health status.
‘‘Sec. 9803. Guaranteed renewability in multiemployer plans and
certain multiple employer welfare arrangements.’’,
(2) by redesignating sections 9804, 9805, and
9806 as sections 9831, 9832, and 9833, respectively,
(3) by inserting before section 9831 (as so re-
designated) the following:
‘‘Subchapter C—General Provisions
‘‘Sec. 9831. General exceptions.
‘‘Sec. 9832. Definitions.
‘‘Sec. 9833. Regulations.’’, and
(4) by inserting after section 9803 the follow-
ing:
‘‘Subchapter B—Other Requirements
‘‘Sec. 9811. Standards relating to benefits for mothers and
newborns.
‘‘Sec. 9812. Parity in the application of certain limits to mental
health benefits.
‘‘SEC. 9811. STANDARDS RELATING TO BENEFITS FOR
MOTHERS AND NEWBORNS.
‘‘(a) REQUIREMENTS FOR MINIMUM HOSPITAL STAY
FOLLOWING BIRTH.—
‘‘(1) IN GENERAL.—A group health plan may
not—
‘‘(A) except as provided in paragraph
(2)—
‘‘(i) restrict benefits for any hospital
length of stay in connection with childbirth
for the mother or newborn child, following
a normal vaginal delivery, to less than 48
hours, or
‘‘(ii) restrict benefits for any hospital
length of stay in connection with childbirth
for the mother or newborn child, following
a cesarean section, to less than 96 hours;
or
‘‘(B) require that a provider obtain author-
ization from the plan or the issuer for prescrib-
ing any length of stay required under subpara-
graph (A) (without regard to paragraph (2)).
‘‘(2) EXCEPTION.—Paragraph (1)(A) shall not
apply in connection with any group health plan in
any case in which the decision to discharge the
mother or her newborn child prior to the expiration
of the minimum length of stay otherwise required
under paragraph (1)(A) is made by an attending
provider in consultation with the mother.
‘‘(b) PROHIBITIONS.—A group health plan may not—
‘‘(1) deny to the mother or her newborn child
eligibility, or continued eligibility, to enroll or to
renew coverage under the terms of the plan, solely
for the purpose of avoiding the requirements of this
section;
‘‘(2) provide monetary payments or rebates to
mothers to encourage such mothers to accept less
than the minimum protections available under this
section;
‘‘(3) penalize or otherwise reduce or limit the
reimbursement of an attending provider because
such provider provided care to an individual partici-
pant or beneficiary in accordance with this section;
‘‘(4) provide incentives (monetary or otherwise)
to an attending provider to induce such provider to
provide care to an individual participant or bene-
ficiary in a manner inconsistent with this section; or
‘‘(5) subject to subsection (c)(3), restrict bene-
fits for any portion of a period within a hospital
length of stay required under subsection (a) in a
manner which is less favorable than the benefits pro-
vided for any preceding portion of such stay.
‘‘(c) RULES OF CONSTRUCTION.—
‘‘(1) Nothing in this section shall be construed
to require a mother who is a participant or bene-
ficiary—
‘‘(A) to give birth in a hospital; or
‘‘(B) to stay in the hospital for a fixed pe-
riod of time following the birth of her child.
‘‘(2) This section shall not apply with respect to
any group health plan which does not provide bene-
fits for hospital lengths of stay in connection with
childbirth for a mother or her newborn child.
‘‘(3) Nothing in this section shall be construed
as preventing a group health plan from imposing
deductibles, coinsurance, or other cost-sharing in re-
lation to benefits for hospital lengths of stay in con-
nection with childbirth for a mother or newborn
child under the plan, except that such coinsurance or
other cost-sharing for any portion of a period within
a hospital length of stay required under subsection
(a) may not be greater than such coinsurance or
cost-sharing for any preceding portion of such stay.
‘‘(d) LEVEL
AND TYPE
OF REIMBURSEMENTS.—
Nothing in this section shall be construed to prevent a
group health plan from negotiating the level and type of
reimbursement with a provider for care provided in ac-
cordance with this section.
‘‘(f) PREEMPTION; EXCEPTION FOR HEALTH INSUR-
ANCE COVERAGE
IN CERTAIN STATES.—The require-
ments of this section shall not apply with respect to health
insurance coverage if there is a State law (including a de-
cision, rule, regulation, or other State action having the
effect of law) for a State that regulates such coverage that
is described in any of the following paragraphs:
‘‘(1) Such State law requires such coverage to
provide for at least a 48-hour hospital length of stay
following a normal vaginal delivery and at least a
96-hour hospital length of stay following a cesarean
section.
‘‘(2) Such State law requires such coverage to
provide for maternity and pediatric care in accord-
ance with guidelines established by the American
College of Obstetricians and Gynecologists, the
American Academy of Pediatrics, or other estab-
lished professional medical associations.
‘‘(3) Such State law requires, in connection
with such coverage for maternity care, that the hos-
pital length of stay for such care is left to the deci-
sion of (or required to be made by) the attending
provider in consultation with the mother.
‘‘SEC. 9812. PARITY IN THE APPLICATION OF CERTAIN LIM-
ITS TO MENTAL HEALTH BENEFITS.
‘‘(a) IN GENERAL.—
‘‘(1) AGGREGATE
LIFETIME
LIMITS.—In the
case of a group health plan that provides both medi-
cal and surgical benefits and mental health bene-
fits—
‘‘(A) NO
LIFETIME
LIMIT.—If the plan
does not include an aggregate lifetime limit on
substantially all medical and surgical benefits,
the plan or coverage may not impose any aggre-
gate lifetime limit on mental health benefits.
‘‘(B) LIFETIME
LIMIT.—If the plan in-
cludes an aggregate lifetime limit on substan-
tially all medical and surgical benefits (in this
paragraph referred to as the ‘applicable lifetime
limit’), the plan shall either—
‘‘(i) apply the applicable lifetime limit
both to the medical and surgical benefits to
which it otherwise would apply and to
mental health benefits and not distinguish
in the application of such limit between
such medical and surgical benefits and
mental health benefits; or
‘‘(ii) not include any aggregate life-
time limit on mental health benefits that is
less than the applicable lifetime limit.
‘‘(C) RULE IN CASE OF DIFFERENT LIM-
ITS.—In the case of a plan that is not described
in subparagraph (A) or (B) and that includes
no or different aggregate lifetime limits on dif-
ferent categories of medical and surgical bene-
fits, the Secretary shall establish rules under
which subparagraph (B) is applied to such plan
with respect to mental health benefits by sub-
stituting for the applicable lifetime limit an av-
erage aggregate lifetime limit that is computed
taking into account the weighted average of the
aggregate lifetime limits applicable to such cat-
egories.
‘‘(2) ANNUAL LIMITS.—In the case of a group
health plan that provides both medical and surgical
benefits and mental health benefits—
‘‘(A) NO ANNUAL LIMIT.—If the plan does
not include an annual limit on substantially all
medical and surgical benefits, the plan or cov-
erage may not impose any annual limit on men-
tal health benefits.
‘‘(B) ANNUAL LIMIT.—If the plan includes
an annual limit on substantially all medical and
surgical benefits (in this paragraph referred to
as the ‘applicable annual limit’), the plan shall
either—
‘‘(i) apply the applicable annual limit
both to medical and surgical benefits to
which it otherwise would apply and to
mental health benefits and not distinguish
in the application of such limit between
such medical and surgical benefits and
mental health benefits; or
‘‘(ii) not include any annual limit on
mental health benefits that is less than the
applicable annual limit.
‘‘(C) RULE IN CASE OF DIFFERENT LIM-
ITS.—In the case of a plan that is not described
in subparagraph (A) or (B) and that includes
no or different annual limits on different cat-
egories of medical and surgical benefits, the
Secretary shall establish rules under which sub-
paragraph (B) is applied to such plan with re-
spect to mental health benefits by substituting
for the applicable annual limit an average an-
nual limit that is computed taking into account
the weighted average of the annual limits appli-
cable to such categories.
‘‘(b) CONSTRUCTION.—Nothing in this section shall
be construed—
‘‘(1) as requiring a group health plan to provide
any mental health benefits; or
‘‘(2) in the case of a group health plan that
provides mental health benefits, as affecting the
terms and conditions (including cost sharing, limits
on numbers of visits or days of coverage, and re-
quirements relating to medical necessity) relating to
the amount, duration, or scope of mental health ben-
efits under the plan, except as specifically provided
in subsection (a) (in regard to parity in the imposi-
tion of aggregate lifetime limits and annual limits
for mental health benefits).
‘‘(c) EXEMPTIONS.—
‘‘(1) SMALL EMPLOYER EXEMPTION.—This sec-
tion shall not apply to any group health plan for any
plan year of a small employer (as defined in section
4980D(d)(2)).
‘‘(2) INCREASED COST EXEMPTION.—This sec-
tion shall not apply with respect to a group health
plan if the application of this section to such plan
results in an increase in the cost under the plan of
at least 1 percent.
‘‘(d) SEPARATE APPLICATION TO EACH OPTION OF-
FERED.—In the case of a group health plan that offers
a participant or beneficiary two or more benefit package
options under the plan, the requirements of this section
shall be applied separately with respect to each such op-
tion.
‘‘(e) DEFINITIONS.—For purposes of this section:
‘‘(1) AGGREGATE LIFETIME LIMIT.—The term
‘aggregate lifetime limit’ means, with respect to ben-
efits under a group health plan, a dollar limitation
on the total amount that may be paid with respect
to such benefits under the plan with respect to an
individual or other coverage unit.
‘‘(2) ANNUAL LIMIT.—The term ‘annual limit’
means, with respect to benefits under a group health
plan, a dollar limitation on the total amount of bene-
fits that may be paid with respect to such benefits
in a 12-month period under the plan with respect to
an individual or other coverage unit.
‘‘(3) MEDICAL OR SURGICAL BENEFITS.—The
term ‘medical or surgical benefits’ means benefits
with respect to medical or surgical services, as de-
fined under the terms of the plan, but does not in-
clude mental health benefits.
‘‘(4) MENTAL HEALTH BENEFITS.—The term
‘mental health benefits’ means benefits with respect
to mental health services, as defined under the terms
of the plan, but does not include benefits with re-
spect to treatment of substance abuse or chemical
dependency.
‘‘(f) SUNSET.—This section shall not apply to bene-
fits for services furnished on or after September 30,
2001.’’
(b) CONFORMING AMENDMENTS.—
(1) Chapter 100 of such Code (as added by sec-
tion 401 of the Health Insurance Portability and Ac-
countability Act of 1996 and as previously amended
by this section) is further amended—
(A) in the last sentence of section
9801(c)(1), by striking ‘‘section 9805(c)’’ and
inserting ‘‘section 9832(c)’’;
(B) 
in 
section 
9831(b), 
by 
striking
‘‘9805(c)(1)’’ and inserting ‘‘9832(c)(1)’’;
(C) in section 9831(c)(1), by striking
‘‘9805(c)(2)’’ and inserting ‘‘9832(c)(2)’’;
(D) in section 9831(c)(2), by striking
‘‘9805(c)(3)’’ and inserting ‘‘9832(c)(3)’’; and
(E) in section 9831(c)(3), by striking
‘‘9805(c)(4)’’ and inserting ‘‘9832(c)(4)’’.
(2) Section 4980D of such Code (as added by
section 402 of the Health Insurance Portability and
Accountability Act of 1996) is amended—
(A) in subsection (c)(3)(B)(i)(I), by strik-
ing ‘‘9805(d)(3)’’ and inserting ‘‘9832(d)(3)’’;
(B) in subsection (d)(1), by inserting
‘‘(other than a failure attributable to section
9811)’’ after ‘‘on any failure’’;
(C) in subsection (d)(3), by striking
‘‘9805’’ and inserting ‘‘9832’’;
(D) in subsection (f)(1), by striking
‘‘9805(a)’’ and inserting ‘‘9832(a)’’.
(3) The table of subtitles for such Code is
amended by striking the item relating to subtitle K
(as added by section 401(b) of the Health Insurance
Portability and Accountability Act of 1996) and in-
serting the following new item:
‘‘SUBTITLE K. Group health plan requirements.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to group health plans
for plan years beginning on or after January 1, 1998.
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