‘‘(1) as of January 1, 1994, to very large em-
ployers;
‘‘(2) as of January 1, 1995, to large employers;
‘‘(3) as of January 1, 1996, to medium-size em-
ployers; and
‘‘(4) as of January 1, 1997, to small employers.
‘‘(b) TRANSITION
FOR COLLECTIVE BARGAINING
AGREEMENTS.—The requirements of this part shall not
apply to employers with respect to their employees, insofar
as such employees are covered under a collective bargain-
ing agreement ratified before the date of the enactment
of this title, earlier than the date of termination of such
agreement (determined without regard to any extension
thereof agreed to after the date of the enactment of this
title).
‘‘SEC. 2106. TIMING OF ENROLLMENT; PERIOD OF COV-
ERAGE.
‘‘(a) TIMING OF ENROLLMENT; NOTICES.—
‘‘(1) IN GENERAL.—Enrollment under this part
shall occur not later than the date on which the em-
ployment, for which such enrollment is required
under this part, commences.
‘‘(2) REFERENCE
TO
DISCLOSURE
REQUIRE-
MENT.—For requirement for disclosure to employees
of information respecting the availability of low-in-
come assistance under part E of title XXII, see sec-
tion 2158(a)(1).
‘‘(b) PERIOD OF COVERAGE.—
‘‘(1) BEGINNING
OF
COVERAGE.—Coverage
under a qualified employer health plan shall begin in
accordance with section 2152(b).
‘‘(2) TERMINATION OF COVERAGE.—
‘‘(A) IN GENERAL.—If an enrollment is ef-
fected under this part on the basis of employ-
ment, coverage under such enrollment may be
terminated, subject to subparagraph (B), on the
last day of the month (or of any subsequent
month) during which such employment is termi-
nated.
‘‘(B) NOTICE REQUIRED.—Effective on the
date specified in section 2157(b)(2), coverage
under a qualified employer health plan shall not
be terminated unless notice has been provided
to the Secretary, as required in section
2157(b)(1), of such termination at least 7 days
before the last day of the month in which em-
ployment is terminated (or any subsequent
month).
‘‘(3) TREATMENT OF FAMILY MEMBERS.—Sub-
ject to section 2152, the period of coverage for fam-
ily members of an employee shall be the same as the
period of coverage for the employee.
‘‘PART B—REQUIREMENTS FOR QUALIFIED EMPLOYER
HEALTH PLANS
‘‘SEC. 2121. QUALIFIED EMPLOYER HEALTH PLAN DEFINED.
‘‘(a) IN GENERAL.—In this title and title XXII, sub-
ject to subsection (b), the term ‘qualified employer health
plan’ means an employment-related health plan (as de-
fined in section 2304(a)(2)) that—
‘‘(1) is a qualified health plan (as defined in
section 2151(a)),
‘‘(2) except as provided in section 2122, does
not impose premiums, deductibles, or copayments on
employees (and family members) required to be en-
rolled in a qualified employer health plan under part
A, and
‘‘(3) 
meets 
the 
requirements 
of 
section
2243(c)(3) (relating to coordination of low-income
assistance for deductibles).
‘‘(b) TYPES
OF QUALIFIED EMPLOYER HEALTH
PLANS.—
‘‘(1) LARGE
EMPLOYERS.—A very large or
large employer may meet the requirements of this
title through a qualified employer health plan that is
an insured plan or that is a self-insured plan.
‘‘(2) MEDIUM-SIZE AND SMALL EMPLOYERS.—
A medium-size or small employer may meet the re-
quirements of this title only through a qualified em-
ployer health plan that is an insured plan or through
the public health plan under title XXII.
‘‘(3) INSURED PLAN DEFINED.—The term ‘in-
sured plan’ has the meaning given the term ‘applica-
ble accident and health insurance contract’ in sec-
tion 5000B(e)(1) of the Internal Revenue Code of
1986.
‘‘SEC. 2122. REQUIREMENTS RELATING TO EMPLOYEE PRE-
MIUMS AND COST-SHARING.
‘‘(a) ENROLLEE
PREMIUMS
AND
COST-SHARING
PERMITTED.—
‘‘(1) IN GENERAL.—A qualified employer health
plan may require an enrollee to pay for—
‘‘(A) premiums for coverage under the
plan, but only if the premiums do not exceed
the limitations imposed under this section, and
‘‘(B) cost-sharing amounts for coverage
under the plan, but only if the cost-sharing does
not exceed the limitations on deductibles,
copayments, and coinsurance imposed with re-
spect to qualified health plans under section
2155.
‘‘(2) TREATMENT OF ADDITIONAL, REQUIRED
COVERAGE.—If a qualified employer health plan pro-
vides benefits in addition to the benefits required
under this title and the employee is not permitted
the option of not accepting such additional benefits,
the plan—
‘‘(A) may not impose a premium, for such
required and additional benefits, that exceeds
the premiums that may be imposed for the
basic benefits, and
‘‘(B) shall assure that cost-sharing is not
imposed with respect to required health services
once the cost-sharing limit has been reached in
a year with respect to benefits for such services.
‘‘(3) 
NONDISCRIMINATION
IN
PREMIUM
AMOUNTS.—Under a qualified employer health plan,
no employee may be charged a different premium for
similar benefits in the same employer health plan for
the same beneficiary class based on the age or sex
of the employee.
‘‘(b) LIMITATION ON PREMIUMS.—
‘‘(1) MONTHLY PREMIUM LIMITED TO 20 PER-
CENT OF ACTUARIAL RATE.—
‘‘(A) IN GENERAL.—A qualified employer
health plan may not require an employee to pay
a premium—
‘‘(i) for coverage for a period of longer
than one month, or
‘‘(ii) the amount of which on a month-
ly basis exceeds 20 percent of the monthly
actuarial rate (as defined under subpara-
graph (B)).
‘‘(B) MONTHLY
ACTUARIAL
RATE
DE-
FINED.—For purposes of this subsection, the
term ‘monthly actuarial rate’ means, with re-
spect to a qualified employer health plan in a
plan year, the average monthly per enrollee
amount that the plan estimates, for enrollees
under the plan during the year, would be nec-
essary to pay for the total benefits required
during the year under the plan (with respect to
required health services), including admin-
istrative costs for the provision of such benefits
and an appropriate amount for a contingency
margin.
‘‘(C) APPLICATION ON BASIS OF FAMILY
STATUS.—For purposes of subparagraph (B), a
qualified employer health plan may provide for
the premium to be applied, and the monthly ac-
tuarial rate described in such subparagraph to
be estimated, for required health services based
on the beneficiary classes described in section
2231(d)(1) or on such other beneficiary classi-
fications, consistent with subsection (a), as the
employer or plan may specify.
‘‘(3) LIABILITY FOR PAYMENT OF PREMIUMS.—
An employee enrolled under a qualified employer
health plan is liable for payment of premiums re-
quired under that plan in accordance with this sub-
section. In no case shall an employee be liable for
premiums with respect to a qualified employer
health plan, other than the portion of the premium
which may be imposed on the employee consistent
with this section.
‘‘(4) WITHHOLDING PERMITTED.—No provision
of State law shall prevent an employer of an em-
ployee enrolled under a qualified employer health
plan from withholding the amount of any premium
due by the employee under this subsection from the
wages paid the employee.
‘‘(5) CONSTRUCTION.—Nothing in this section
shall be construed—
‘‘(A) as preventing an employer from pay-
ing part or all of the employee premium for re-
quired health services or other health services,
or
‘‘(B) subject to subsection (a), from re-
quiring an employee to pay for all or part of the
premium for benefits for services other than re-
quired health services.
‘‘PART C—STANDARDS FOR QUALIFIED HEALTH PLANS
‘‘SEC. 2151. CERTIFICATION OF QUALIFIED HEALTH PLANS.
‘‘(a) QUALIFIED HEALTH PLAN DEFINED.—For
purposes of this title, the term ‘qualified health plan’
means a health plan that the Secretary certifies, upon ap-
plication by the plan, to meet the requirements of this
part.
‘‘(b) REVIEW
AND RECERTIFICATION.—The Sec-
retary shall establish procedures for the periodic review
and recertification of plans as qualified health plans.
‘‘(c) TERMINATION OF CERTIFICATION.—The Sec-
retary shall terminate the certification of a qualified
health plan if the Secretary determines that the plan no
longer meets the requirements for certification. Before
effecting a termination, the Secretary shall provide the
plan notice and opportunity for a hearing on the proposed
termination.
‘‘SEC. 2152. TREATMENT OF FAMILY AS A UNIT; COVERAGE
PERIOD; HEALTH PLAN CARDS.
‘‘(a) TREATMENT OF FAMILY AS A UNIT.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
enrollment of an individual in a qualified health plan
shall include enrollment of the other family members
(as defined in section 2282(1)) of the individual.
‘‘(2) TREATMENT
OF
INELIGIBLE
INDIVID-
UALS.—Nothing in paragraph (1) shall be construed
as requiring a qualified health plan (or permitting
the public health plan) to enroll individuals who are
not eligible individuals (as defined in section
2201(d)).
‘‘(b) BEGINNING OF COVERAGE.—
‘‘(1) IN GENERAL.—In the case of an individual
enrolled under any qualified health plan, subject to
subsection (c), the benefits under the plan shall first
become available for services furnished beginning on
the first day of the month following the month of
enrollment.
‘‘(2) SPECIAL RULES.—The Secretary shall pro-
vide for such standards as may be necessary to pro-
vide for the allocation of responsibility among quali-
fied health plans (including the public health plan
under title XXII) in the case of an inpatient hospital
stay, or in the case in which a single payment
amount if made for other services provided over a
period of time, that begins during the period of cov-
erage under one qualified health plan and ends dur-
ing a period of coverage under another qualified
health plan.
‘‘(c) STANDARDS TO REFLECT CHANGES IN FAMILY
AND EMPLOYMENT STATUS.—
‘‘(1) IN
GENERAL.—Under standards estab-
lished by the Secretary consistent with this sub-
section, qualified health plans shall provide for ap-
propriate changes in the coverage of family members
to take into account—
‘‘(A) changes in family composition or sta-
tus, including marriage, divorce (or legal sepa-
ration), birth or adoption of children, and the
aging of children into adulthood, and
‘‘(B) changes in employment status.
‘‘(2) MONTHLY CHANGES.—Except as specifi-
cally provided in this subsection, such standards
shall be designed—
‘‘(A) to effect a change in enrollment (or
status of enrollment) as of the first day of the
first month (or, in order to provide for notice
and an opportunity for coordination among
plans, a later month) following the date of the
event causing the change,
‘‘(B) to prevent any periods of noncoverage
under any qualified health plans, and
‘‘(C) to provide, in the case of a change of
family status such as marriage, divorce, or legal
separation, for accounting and crediting of cost-
sharing among family members (described in
section 2157(c)) in an equitable and admin-
istrable manner.
‘‘(3) TREATMENT OF NEWBORNS.—
‘‘(A) BIRTH TO WOMAN DURING PERIOD
OF
COVERAGE.—Any child born to a woman
during the period of coverage under a qualified
health plan shall, as of the date of birth, be
automatically enrolled and covered for benefits
under the plan.
‘‘(B) BIRTH
TO
WOMAN
WITHOUT
COV-
ERAGE.—Any child born in the United States to
a woman who is not, at the time of birth, en-
rolled under a qualified health plan shall be
automatically enrolled and covered for benefits
under this title as of the date of birth if an ap-
plication for such enrollment is made not later
than 60 days after the date of birth or, if later,
the end of the year in which the child is born.
‘‘(4) ADOPTION.—
‘‘(i) TREATMENT OF VOLUNTARY RELIN-
QUISHMENT.—Any child who is voluntarily re-
linquished to a public or private agency shall,
upon the application by the agency, be enrolled
under this title and covered as of the date of
the relinquishment, until the date of the child’s
placement for adoption.
‘‘(ii) TREATMENT
OF
ADOPTED
CHIL-
DREN.—Any child who is placed for adoption
with an individual during the period the individ-
ual is enrolled and covered under a qualified
health plan shall, as of the date of the place-
ment for adoption, be treated as the child of the
individual and be automatically enrolled and
covered under such plan.
‘‘(5) PLACEMENT
IN
CUSTODY
OF
PUBLIC
AGENCY PURSUANT TO COURT ORDER OR OTHER-
WISE.—Any child who is removed from the family
and placed in the temporary custody of a public
agency pursuant to a court order or otherwise shall,
upon application by the public agency on or after the
date of the removal and placement with the public
agency, be deemed to be automatically enrolled and
covered for benefits under this title as of the date
of the application, until the child is returned to the
family or placed for adoption.
‘‘(6) TREATMENT OF LEGAL WARDS, FOSTER
CHILDREN, ETC.—In cases not described in para-
graphs (4) or (5), the Secretary shall establish
standards relating to the time an individual de-
scribed in section 2282(5)(B)(ii) is treated as the
child of the person with custody and such other
standards as may be necessary to assure the proper
coordination of enrollment of children and other in-
dividuals among qualified health plans.
‘‘(d) HEALTH PLAN CARDS.—In conjunction with en-
rollment of individuals under a qualified health plan, the
plan shall provide for the issuance of a card which may
be used for purposes of identification of such enrollment
and the processing of claims for benefits under the plan.
Such card shall—
‘‘(1) identify (as appropriate) the types of bene-
fits to which the individual is entitled under the
plan, and
‘‘(2) contain such other information as the Sec-
retary (and the plan) shall specify.
‘‘SEC. 2153. REQUIREMENTS RESPECTING BASIC BENEFITS.
‘‘(a) IN GENERAL.—Each qualified health plan must
provide for benefits for at least all required health services
(as defined in section 2211(a)(2)).
‘‘(b) TREATMENT
OF
ADDITIONAL
BENEFITS.—
Nothing in this section shall be construed as preventing
a qualified health plan from including benefits in addition
to benefits for required health services.
‘‘SEC. 2154. REQUIREMENTS RESPECTING LIMITS ON PRE-
EXISTING CONDITION EXCLUSIONS AND COV-
ERAGE 
STANDARDS 
FOR 
BASIC 
HEALTH
SERVICES.
‘‘(a) IN GENERAL.—Except as provided under sub-
section (b), a qualified health plan—
‘‘(1) may not deny, limit, or condition the cov-
erage under (or benefits of) the plan with respect to
basic health services based on the health status,
claims experience, receipt of health care, medical his-
tory, or lack of evidence of insurability, of an indi-
vidual, and
‘‘(2) may not provide for exclusions from cov-
erage for basic health services that are more restric-
tive than the exclusions for such services under this
title.
‘‘(b) TREATMENT OF PRE-EXISTING CONDITION EX-
CLUSIONS FOR ALL SERVICES.—
‘‘(1) IN GENERAL.—Subject to the succeeding
provisions of this subsection, a qualified health plan
(other than the public health plan) may exclude cov-
erage with respect to services related to treatment of
a pre-existing condition, but the period of such ex-
clusion may not exceed 6 months.
‘‘(2) NONAPPLICATION
TO
NEWBORNS
AND
SUNSET OF PRE-EXISTING CONDITION EXCLUSIONS
FOR
BASIC
HEALTH
SERVICES.—The exclusion of
coverage permitted under paragraph (1) shall not
apply to—
‘‘(A) services furnished to newborns, or
‘‘(B) basic health services furnished on or
after July 1 of the 4th year beginning after the
date of the enactment of this title.
‘‘(3) CREDITING OF PREVIOUS COVERAGE.—
‘‘(A) IN GENERAL.—If an individual is in
a period of continuous coverage (as defined in
subparagraph (B)(i)) with respect to particular
services as of the date of initial coverage under
a plan, any period of exclusion of coverage with
respect to a pre-existing condition for such serv-
ices or type of services shall be reduced by 1
month for each month in the period of continu-
ous coverage.
‘‘(B) DEFINITIONS.—In this paragraph:
‘‘(i) PERIOD
OF
CONTINUOUS
COV-
ERAGE.—The term ‘period of continuous
coverage’ means, with respect to particular
services, the period beginning on the date
an individual is enrolled under a health
plan or program (including a qualified
health plan, a Federal health plan, the
medicare program, a State plan under title
XIX, or a State general medical assistance
program) which provides the same or sub-
stantially similar benefits with respect to
such services and ends on the date the in-
dividual is not so enrolled for a continuous
period of more than 3 months.
‘‘(ii) PRE-EXISTING CONDITION.—The
term ‘pre-existing condition’ means, with
respect to coverage under a plan, a condi-
tion which has been diagnosed or treated
during the 3-month period ending on the
day before the first date of such coverage,
except that such term does not include a
condition which was first diagnosed or
treated during a period of continuous
coverage.
‘‘(C) STANDARDS
FOR
SIMILAR
BENE-
FITS.—The Secretary shall establish such cri-
teria for determining if benefits are substan-
tially similar as may be necessary to carry out
this subsection.
‘‘SEC. 2155. REQUIREMENTS RESPECTING LIMITS ON COST-
SHARING.
‘‘(a) IN GENERAL.—A qualified health plan may not
impose deductibles, copayments, or coinsurance with re-
spect to required health services in excess of the deductible
and coinsurance permitted under part C of title XXII with
respect to such services (not taking into account any low-
income assistance provided under part E of title XXII).
‘‘(b) CONSTRUCTION.—Nothing in this section shall
be construed as preventing a qualified health plan from
providing for deductibles, coinsurance, and copayments or
other restrictions with respect to services other than re-
quired health services that are different from those per-
mitted with respect to required health services.
‘‘SEC. 2156. USE OF PAYMENT RATES.
‘‘A qualified health plan shall establish adequate pay-
ment rates for required health services using the payment
rates approved under title III of the Health Insurance
Coverage and Cost Containment Act of 1993.
‘‘SEC. 2157. COORDINATION AND PORTABILITY OF HEALTH
COVERAGE 
UNDER 
QUALIFIED 
HEALTH
PLANS.
‘‘(a) IN GENERAL.—Each qualified health plan shall
provide for coordination of—
‘‘(1) enrollment and termination of enrollment
among the qualified health plans, the public health
plan, and title XVIII, and
‘‘(2) application of deductibles and limitations
on cost-sharing among such plans,
in accordance with standards established by the Secretary
consistent with this section.
‘‘(b) REQUIREMENT OF NOTICES WITH RESPECT TO
COVERAGE.—
‘‘(1) IN GENERAL.—Each qualified health plan
shall provide notice at the time an individual’s cov-
erage under the plan begins or is terminated. Such
notice shall be provided (in a form and manner and
at a time specified by the Secretary)—
‘‘(A) to the individual (or in the case of en-
rollment only of a child or children, to the par-
ent enrolling the child or children), and
‘‘(B) effective (on the date specified in
paragraph (2)) to the Secretary.
The notice under this paragraph shall include the
names and other identifying information of family
members whose coverage is affected by the change.
‘‘(2) DATE OF REQUIREMENT FOR NOTICE TO
PUBLIC HEALTH PLAN.—The date specified in this
paragraph is January 1, 1994, or, with respect to a
qualified employer health plan of an employer, the
date the requirements of part A apply with respect
to the employer under section 2105(a).
‘‘(3) NOTICE
TO
BENEFICIARY
AND
OTHER
QUALIFIED HEALTH PLANS UPON OBTAINING COV-
ERAGE.—In the case of an individual who begins
coverage under a qualified employer health plan (or
under this title on an employment basis), when the
Secretary receives notice under paragraph (1)(B)—
‘‘(A) if, at the time of obtaining such cov-
erage, the individual is enrolled on a non-em-
ployment basis in the public health plan, the
Secretary shall notify the individual that cov-
erage for such services on such a basis or for
such benefits shall be terminated effective on
the date of coverage under such a plan, and
‘‘(B) the Secretary shall provide for notice
to any other qualified health plan in which the
Secretary knows the individual is enrolled of the
fact of such new coverage.
‘‘(4) NOTICES OF TERMINATION.—Each notice
of termination under paragraph (1) shall include—
‘‘(A) the effective date of the termination,
‘‘(B) in the case of notice to the Secretary,
sufficient information to permit enrollment of
the individuals affected under the public health
plan, and
‘‘(C) in the case of an individual whose
coverage under the plan is terminated other
than at the end of a calendar year, the account-
ing statement produced under subsection (c)(2).
‘‘(c) ACCOUNTING FOR COST-SHARING.—
‘‘(1) IN GENERAL.—Each qualified health plan
shall provide for an ongoing accounting, for each en-
rollee (and enrolled family members) on a calendar
year basis, of expenses incurred for required health
services that are counted towards the deductible es-
tablished under section 2222 and that are counted
towards the cost-sharing limit established under sec-
tion 2224. The amount credited for each account
shall be determined in accordance with standards es-
tablished by the Secretary in order to provide con-
sistency among qualified health plans and to pro-
mote portability of benefits across qualified health
plans.
‘‘(2) STATEMENT OF ACCOUNT BALANCE.—In
the case of an individual whose coverage under the
plan is terminated other than at the end of a cal-
endar year, the qualified health plan shall produce
an accounting statement (in a uniform manner es-
tablished by the Secretary) of the amounts that are
credited under the plan towards such deductible and
cost-sharing limitations for the year for each enrollee
(and family members) involved, in accordance with
the accounting under paragraph (1).
‘‘(3) CREDITING OF PREVIOUS EXPENSES TO-
WARDS
DEDUCTIBLES
AND
COINSURANCE.—Each
qualified health plan shall, in the case of an individ-
ual who is enrolled under the plan after the begin-
ning of a year, credit, against the deductible and
cost-sharing limit for required health services under
its plan, the amounts previously accounted against
the deductible and cost-sharing limit under another
qualified health plan for the calendar year. The
credit under this subparagraph shall be based on the
accounting statement produced under paragraph (2).
‘‘(d) COVERAGE UNDER PUBLIC HEALTH PLAN.—
‘‘(1) IN GENERAL.—Except as provided in this
subsection, the public health plan under title XXII
shall enroll each eligible individual whose coverage
under another qualified health plan or under title
XVIII is terminated, effective on the date following
the effective date of termination of coverage under
such plan.
‘‘(2) TREATMENT OF MEDICARE-ELIGIBLE INDI-
VIDUALS.—Except as provided in paragraphs (3)
and (4), in the case of an individual who—
‘‘(A) is eligible for enrollment under part
B of title XVIII,
‘‘(B) is not so enrolled because of enroll-
ment under a qualified health plan, but
‘‘(C) whose enrollment under such a plan
is terminated,
the Secretary shall provide, upon the effective date
of such termination, for enrollment of the individual
under such part.
‘‘(3) OBTAINING
ALTERNATE
COVERAGE.—
Paragraphs (1) and (2) shall not apply if the indi-
vidual provides satisfactory evidence that the individ-
ual has obtained coverage through another qualified
health plan or is a medicare beneficiary enrolled
under part B of title XVIII.
‘‘(4) NO
AUTOMATIC
ENROLLMENT
DURING
TRANSITION.—Paragraphs (1) and (2) shall not
apply to terminations occurring before January 1,
1997. During the period before January 1, 1997, be-
fore an individual described in paragraph (1) enrolls
under this title, the Secretary shall provide the indi-
vidual with a notice of the minimum enrollment pe-
riod required under section 2202(a)(3).
‘‘(e) PROVISION OF INFORMATION ON ENROLLEES.—
Each qualified health plan shall provide the Secretary with
such information as the Secretary may require in order
to ascertain whether (and the amount of) any transfer
payments to be made under section 2234.
‘‘SEC. 2158. CONSUMER PROTECTIONS.
‘‘(a) DISCLOSURE REQUIREMENTS FOR EMPLOYER
PLANS.—
‘‘(1) NOTICE OF AVAILABILITY OF LOW-INCOME
ASSISTANCE.—At the time of enrollment of an em-
ployee under a qualified employer health plan, the
plan (directly or through the employer) shall provide
the employee with a notice (in a form specified by
the Secretary) of the low-income assistance available
under part E of title XXII with respect to enroll-
ment under the plan.
‘‘(2) FOR
SMALL
EMPLOYER
PLANS.—In the
case of a qualified employer health plan that is of-
fered to a small employer, the plan may not be is-
sued or sold to the employer unless the employer has
been provided, in addition to any information re-
quired to be disclosed under paragraph (1), the fol-
lowing information:
‘‘(A) A description of the benefits covered
in the plan and cost-sharing required with re-
spect to such benefits.
‘‘(B) A comparison of the benefits and
cost-sharing described in subparagraph (A) with
the benefits and cost-sharing available under
the public health plan (not taking into account
any low-income assistance under part E of title
XXII).
‘‘(3) STANDARD
FORMAT.—The disclosures
under paragraphs (1) and (2) shall be made in a
uniform format established by the Secretary.
‘‘(4) VIOLATIONS.—Any entity that issues or
sells a qualified health plan in violation of paragraph
(1) or (2) is subject to a civil money penalty of an
amount not to exceed $5,000 with respect to each
such issuance or sale. The provisions of section
1128A (other than the first sentence of subsection
(a) and other than subsection (b)) shall apply to a
civil money penalty under the previous sentence in
the same manner as such provisions apply to a pen-
alty or proceeding under section 1128A(a).
‘‘(b) EFFECTIVE GRIEVANCE PROCEDURES.—Each
qualified health plan shall provide for effective procedures
for hearing and resolving grievances between the plan and
individuals enrolled under the plan.
‘‘(c) RESTRICTION ON CERTAIN PHYSICIAN INCEN-
TIVE PLANS.—
‘‘(1) IN
GENERAL.—A health plan is not a
qualified health plan if it operates a physician incen-
tive plan (as defined in paragraph (2)) unless the re-
quirements specified in clauses (i) through (iii) of
section 1876(i)(8)(A) are met (in the same manner
as they apply to eligible organizations under section
1876).
‘‘(2) PHYSICIAN INCENTIVE PLAN DEFINED.—
In this subsection, the term ‘physician incentive
plan’ means any compensation or other financial ar-
rangement between the qualified health plan and a
physician or physician group that may directly or in-
directly have the effect of reducing or limiting serv-
ices provided with respect to individuals enrolled
under the plan.
‘‘(d) ENROLLEE FINANCIAL PROTECTION.—
‘‘(1) SOLVENCY
PROTECTION
FOR
INSURED
PLANS.—In the case of a qualified health plan that
is an insured plan (as defined by the Secretary) and
is issued in a State, in order for the plan to be cer-
tified under this part the Secretary must find that
the State has established satisfactory protection of
enrollees with respect to potential insolvency.
‘‘(2) 
PROTECTION
AGAINST
PROVIDER
CLAIMS.—In the case of a failure of a qualified
health plan to make payments with respect to re-
quired health services, under standards established
by the Secretary, an individual who is enrolled under
the plan is not liable to any health care provider or
practitioner with respect to the provision of required
health services for payments in excess of the amount
for which the enrollee would have been liable if the
plan were to have made payments in a timely
manner.
‘‘SEC. 2159. PREEMPTION OF CERTAIN STATE AND FEDERAL
REQUIREMENTS.
‘‘(a) BENEFIT AND COVERAGE RULES.—Effective as
of January 1, 1994, no State shall establish or enforce
any law or regulation that—
‘‘PART D—DEFINITIONS AND MISCELLANEOUS
‘‘SEC. 2181. DEFINITIONS.
‘‘(a) WAGES, EMPLOYMENT, ETC.—In this title—
‘‘(1) WAGES.—The term ‘wages’ has the mean-
ing given such term by section 3121(a) of the Inter-
nal Revenue Code of 1986 except that—
‘‘(A) the modifications of subsection (b)
shall apply in determining whether any service
is employment, and
‘‘(B) the applicable contribution base
under section 3121(x)(2) of such Code (relating
to hospital insurance) shall be used under sec-
tion 3121(a)(1) for purposes of this title.
‘‘(2) EMPLOYMENT.—
‘‘(A) IN GENERAL.—Except as modified in
subparagraph (B), the term ‘employment’ has
the meaning given such term by section
3121(b) of the Internal Revenue Code of 1986.
‘‘(B) MODIFICATIONS.—The modifications
referred to in this paragraph are that—
‘‘(i) paragraphs (5), (6), (7), (8), and
(9) of section 3121(b) of such Code shall
not apply, and
‘‘(ii) subsections (r) and (w) of section
3121 of such Code shall not apply.
‘‘(C) TREATMENT OF FEDERAL EMPLOY-
MENT.—In applying subparagraph (A), the
term ‘employment’ shall not be considered to
include service performed in the employ of the
United States if, in connection with the per-
formance of such service (or the service of a
family member), the individual—
‘‘(i) is enrolled in a health benefits
plan under chapter 89 of title 5, United
States Code, or
‘‘(ii) is provided medical and dental
benefits under chapter 55 of title 10, Unit-
ed States Code.
‘‘(3) EMPLOYEE; EMPLOYER.—The terms ‘em-
ployee’ and ‘employer’ have the same meanings as
such terms have for purposes of chapter 21 of the
Internal Revenue Code of 1986.
‘‘(b) DEFINITIONS RELATING TO EMPLOYEES.—In
this title:
‘‘(1) FULL-TIME EMPLOYEE.—The term ‘full-
time employee’ means, with respect to an employer,
an employee who normally performs on a monthly
basis at least 171⁄2 hours of service per week for
that employer.
‘‘(2) PART-TIME EMPLOYEE.—The term ‘part-
time employee’ means, with respect to an employer,
an employee who is not a full-time employee.
‘‘(3) SEASONAL OR TEMPORARY EMPLOYEE.—
The term ‘seasonal or temporary employee’ means,
with respect to an employer, an employee who is em-
ployed by the employer for not more than 4 months
in any 12 month period; except that the Secretary
may extend such period for up to 6 months in any
12 month period in the case of employment that is
sporadic, irregular, and seasonal in nature.
‘‘(4) TREATMENT OF CONSULTANTS AND CON-
TRACTORS.—The term ‘employee’ includes an indi-
vidual who is a consultant or contractor of an em-
ployer if the Secretary determines that the consult-
ing arrangement or contract was entered into to
avoid the requirements of this title.
‘‘(5) EXCLUSION OF FOREIGN EMPLOYMENT.—
The term ‘employee’ does not include an individ-
ual—
‘‘(A) who is not a citizen or resident of the
United States with respect to service performed
outside the United States, or
‘‘(B) who is a citizen or resident of the
United States with respect to services per-
formed outside the United States for an em-
ployer other than an American employer (as de-
fined in section 3121(h) of the Internal Reve-
nue Code of 1986).
‘‘(c) DEFINITIONS RELATING
TO SIZE
OF EM-
PLOYER.—In this title:
‘‘(1) SMALL EMPLOYER.—The term ‘small em-
ployer’ means, with respect to a calendar year, an
employer that normally employs fewer than 50 em-
ployees on a typical business day during the cal-
endar year.
‘‘(2) MEDIUM-SIZE EMPLOYER.—The term ‘me-
dium-size employer’ means, with respect to a cal-
endar year, an employer that normally employs at
least 50, but fewer than 101, employees on a typical
business day during the calendar year.
‘‘(3) LARGE EMPLOYER.—The term ‘large em-
ployer’ means, with respect to a calendar year, an
employer that normally employs at least 100, but
fewer than 250, employees on a typical business day
during the calendar year.
‘‘(4) VERY LARGE EMPLOYER.—The term ‘very
large employer’ means, with respect to a calendar
year, an employer that normally employs at least
250 employees on a typical business day during the
calendar year.
‘‘(4) APPLICATION
OF
CONTROLLED
GROUP
RULES.—For purposes of determining if an em-
ployer is a small, medium-size, large, or very large
employer or the number of hours an individual is
normally employed with respect to an employer,
rules similar to the rules of subsection (b) and (c)
of section 414 of the Internal Revenue Code of 1986
shall apply.
‘‘(d) INCORPORATION OF DEFINITIONS.—Except as
otherwise provided in this title, the terms defined in sec-
tion 2282 and 2283 shall apply under this title in the
same manner as they apply under title XXII.
‘‘SEC. 2182. NONAPPLICATION TO RESIDENTS OF PUERTO
RICO AND TERRITORIES.
‘‘The provisions of this title shall not apply with re-
spect to an employee who is not a resident of one of the
50 States or the District of Columbia.’’.
SEC. 103. REPEAL OF COBRA CONTINUATION REQUIRE-
MENTS.
(a) INTERNAL REVENUE CODE PROVISIONS.—
(1) IN GENERAL.—Section 4980B of the Inter-
nal Revenue Code of 1986 is repealed.
(2) CONFORMING AMENDMENTS.—Section 414
of such Code is amended—
(A) in subsection (n)(3)(C), by striking
‘‘505, and 4980B’’ and inserting ‘‘and 505’’,
and
(B) in subsection (t)(2), by striking ‘‘505,
or 4980B’’ and inserting ‘‘or 505’’.
(b) ERISA.—
(1) IN GENERAL.—Part 6 of subtitle B of title
I of the Employee Retirement Income Security Act
of 1974 is repealed.
(2) 
CONFORMING
AMENDMENT.—Section
502(c)(1) of such Act (29 U.S.C. 1132(c)(1)) is
amended by striking ‘‘paragraph (1) or (4) of sec-
tion 606 or’’.
(c) PUBLIC HEALTH SERVICE ACT.—Title XXII of
the Public Health Service Act is repealed.
(d) EFFECTIVE DATE.—The repeals and amend-
ments made by this section shall apply to health plans of
employers as of the date specified with respect to employ-
ers of that size under section 2105 of the Social Security
Act.
(e) NOTICE OF BENEFITS UNDER PUBLIC HEALTH
PLAN.—In the case of continuation coverage which is in
effect on the date of a repeal under this section but which
is to be discontinued after such date (and before the date
required under law in effect before the date of the enact-
ment of this Act) such continuation may not be discon-
tinued without 30-days notice to the individual of such dis-
continuation. Such notice shall include such information
respecting continuation of coverage through enrollment
under the public health plan under title XXII of the Social
Security Act as the Secretary of Health and Human Serv-
ices shall specify.
TITLE 
II—PROVISION 
OF
HEALTH 
INSURANCE
THROUGH A PUBLIC HEALTH
PLAN
SEC. 201. PUBLIC HEALTH PLAN.
The Social Security Act is amended by adding after
the title added by section 101 the following new title:
‘‘TITLE XXII—PUBLIC HEALTH PLAN
‘‘PART A—ELIGIBILITY AND ENROLLMENT
‘‘SEC. 2201. ELIGIBILITY TO ENROLL FOR HEALTH INSUR-
ANCE BENEFITS AND TO APPLY FOR LOW-IN-
COME ASSISTANCE.
‘‘(a) ELIGIBILITY TO ENROLL FOR HEALTH INSUR-
ANCE BENEFITS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
each eligible individual (as defined in subsection (d))
who is not a medicare beneficiary and who is not en-
rolled under a qualified employer health plan pursu-
ant to title XXI or under a Federal health plan (as
defined in section 2204(f)) is eligible to enroll under
this title for health insurance benefits.
‘‘(2) ENROLLMENT
BY
ELECTING
SMALL
OR
MEDIUM-SIZE EMPLOYERS.—In order to meet the re-
quirements of title XXI, a small or medium-size em-
ployer may provide for the enrollment of full-time
employees (and family members) in the plan under
this title in a manner specified by the Secretary, but
only if—
‘‘(A) the employer complies with the re-
quirements of section 2122 with respect to the
plan under this title as if the plan under this
title were a qualified employer health plan; and
‘‘(B) provides for payment of premiums (in
the amounts specified in section 2231) in a
manner specified by the Secretary.
‘‘(3) EFFECTIVE DATE.—No health insurance
benefits are available under this title for items and
services furnished before January 1, 1994, or, for
individuals enrolled under this title as employees (or
dependents) of medium-size or small employers, be-
fore January 1, 1996, or 1997, respectively.
‘‘(b) ELIGIBILITY TO APPLY FOR LOW-INCOME AS-
SISTANCE.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
each eligible individual who—
‘‘(A) is enrolled in the public health plan
under this title, whether on a non-employment
basis or on an employment basis,
‘‘(B) is enrolled under a qualified employer
health plan, or
‘‘(C) is a medicare beneficiary,
is eligible to apply for low-income assistance under
part E.
‘‘(2) EFFECTIVE DATE.—No low-income assist-
ance is available for premiums for months before
January 1997 or for expenses incurred for any items
or services furnished before January 1, 1997.
‘‘(c) ENROLLMENT TERMS.—
‘‘(1) ENROLLMENT UNDER TITLE ON AN EM-
PLOYMENT
AND
NON-EMPLOYMENT
BASIS
DE-
FINED.—An eligible individual is considered, for pur-
poses of this title, to be enrolled under this title—
‘‘(A) on an ‘employment basis’ only if the
individual is enrolled by a small employer pur-
suant to the requirement of section 5000A of
the Internal Revenue Code of 1986, or
‘‘(B) on a ‘non-employment basis’ in any
other case.
‘‘(2) ENROLLMENT UNDER A QUALIFIED EM-
PLOYER HEALTH PLAN DEFINED.—An individual is
considered, for purposes of this title, to be ‘enrolled
under a qualified employer health plan’ if—
‘‘(A) the individual is enrolled under a
qualified employer health plan (as defined in
section 2281(b)(8)) as an employee (or family
member of an employee),
‘‘(B) the employer is required to provide
for such enrollment under part A of title XXI,
and
‘‘(C) the amount of the employee share of
the premium is limited under section 2122(b).
‘‘(d) ELIGIBLE INDIVIDUAL DEFINED.—In this sec-
tion, the term ‘eligible individual’ means an individual who
is—
‘‘(1)(A) a citizen or national of the United
States, (B) an alien lawfully admitted for permanent
residence, or (C) an alien otherwise residing perma-
nently in the United States under color of law, and
‘‘(2) a resident of the United States.
‘‘SEC. 2202. APPLICATION FOR ENROLLMENT.
‘‘(a) PERIOD OF APPLICATION.—Individuals eligible
to enroll under this title may apply to enroll at any time
at which they are so eligible.
‘‘(b) APPLICATION PROCESS.—
‘‘(1) IN GENERAL.—The filing of an application
for enrollment under this title shall (except as the
Secretary may provide) constitute enrollment under
this title. Such an application may be filed with the
Secretary by mail or at such locations as the Sec-
retary may specify.
‘‘(2) AVAILABILITY
OF
APPLICATIONS.—The
Secretary shall make applications for enrollment
under this title available—
‘‘(A) at local offices of the Social Security
Administration,
‘‘(B) at out-reach sites (such as provider
and practitioner locations), and
‘‘(C) at other locations (including post of-
fices) accessible to a broad cross-section of indi-
viduals eligible to enroll.
‘‘(3) APPLICATION
FOR
LOW-INCOME
ASSIST-
ANCE.—An application for enrollment under this
section may (but need not) be accompanied by an
application for low-income assistance under part E.
‘‘(4) RESTRICTION ON USE OF AGENTS.—The
Secretary may not provide for receipt or processing
of applications for enrollment under this title—
‘‘(A) by any non-Federal entity which is
directly or indirectly involved in the administra-
tion of title IV, XVI, or XIX of this Act, or
‘‘(B) by any entity which does not meet
such standards as the Secretary establishes to
assure the confidentiality of information col-
lected in the enrollment process.
‘‘SEC. 2203. COVERAGE PERIOD; TERMINATION OF ENROLL-
MENT.
‘‘(a) BEGINNING OF COVERAGE.—The provisions of
section 2152(b) shall apply to the public health plan in
the same manner as they apply to qualified health plans.
‘‘(b) TERMINATION OF ENROLLMENT DURING TRAN-
SITION PERIOD.—
‘‘(1) IN GENERAL.—Before January 1, 1997,
except as provided in paragraph (3)—
‘‘(A) an individual enrolled under this title
may terminate enrollment on a non-employment
basis by providing written notice to the Sec-
retary that the individual—
‘‘(i) no longer wishes to be enrolled in
the public health plan, or
‘‘(ii) is enrolled under a qualified em-
ployer health plan or is a medicare bene-
ficiary; and
‘‘(B) the Secretary may terminate enroll-
ment on a non-employment basis of an individ-
ual, after providing the individual (or the indi-
vidual’s representative) with written notice, for
failure to pay premiums required with respect
to such enrollment.
The termination of enrollment of an individual
(other than due to the individual becoming a medi-
care beneficiary) shall terminate the enrollment of
other family members enrolled with the individual.
‘‘(2) EFFECTIVE
DATE
OF
TERMINATION.—A
termination of enrollment under paragraph (1)(A)
shall take effect at the close of the month following
the month in which the notice is filed. A termination
of enrollment under paragraph (1)(B) shall take ef-
fect on a date (determined under regulations) after
the date written notice of such termination has been
provided to the enrollee (or the enrollee’s representa-
tive). Such regulations shall provide a grace period
of at least 1 month after the date of written notice
in which overdue premiums may be paid and cov-
erage continued.
‘‘(3) MINIMUM PERIOD OF ENROLLMENT DUR-
ING TRANSITION.—Subject to paragraph (4), before
January 1, 1997—
‘‘(A) IN GENERAL.—An individual (other
than a pregnant woman or newborn) who is en-
rolled under this title on a non-employment
basis may not terminate enrollment less than
12 months after the date of the enrollment.
‘‘(B) 
PREGNANT
WOMEN
AND
NEWBORNS.—In the case of a pregnant woman
who is enrolled under this title on a non-em-
ployment basis—
‘‘(i) the enrollment of the woman may
not be terminated earlier than the end of
the month in which the 60-day period, be-
ginning on the last day of the pregnancy,
ends; and
‘‘(ii) the newborn child shall be
deemed enrolled under this title as of the
date of birth, and such enrollment may not
be terminated earlier than the end of the
month in which the child’s first birthday
occurs.
‘‘(4) TERMINATION
PERMITTED
IF
COVERED
UNDER QUALIFIED EMPLOYER HEALTH PLAN.—The
minimum period of enrollment under paragraph (3)
shall not apply if, at the time of termination of en-
rollment, the individual is immediately covered under
a qualified employer health plan which will provide
coverage during the minimum period for which en-
rollment is otherwise required under such para-
graph.
‘‘(c) TERMINATION OF ENROLLMENT AFTER TRAN-
SITION PERIOD.—For limitations on termination of enroll-
ment under this title on or after January 1, 1997, see
section 2204(c).
‘‘SEC. 2204. REQUIREMENT OF HEALTH INSURANCE COV-
ERAGE.
‘‘(a) REQUIREMENT
FOR ALL ELIGIBLE INDIVID-
UALS.—
‘‘(1) IN GENERAL.—Effective on and after the
date specified in subsection (e), each eligible individ-
ual (as defined in section 2201(d)) who is not an ex-
cepted individual (as defined in paragraph (2)), is
deemed to have enrolled under this title on the date
before such date or as soon thereafter as the individ-
ual is not an excepted individual. If such an individ-
ual has not filed an application for enrollment under
this title by such date, the Secretary shall provide a
means to collect information sufficient to effect such
enrollment as soon as possible after such date.
‘‘(2) EXCEPTED
INDIVIDUALS.—For purposes
of paragraph (1), the term ‘excepted individual’
means an individual who—
‘‘(A) is a medicare beneficiary,
‘‘(B) is enrolled under a qualified employer
health plan, or
‘‘(C) demonstrates (in a manner specified
by the Secretary) enrollment under a Federal
health plan (as defined in subsection (f)).
‘‘(b) AUTOMATIC CONTINUING ENROLLMENT.—For
provisions relating to coordination of enrollment among
qualified health plans and assuring continuous coverage
for required health services (and portability of health in-
surance benefits among such plans), see section 2157.
‘‘(c) LIMITATION
ON TERMINATION
OF ENROLL-
MENT.—Effective on the date specified in subsection (e)—
‘‘(1) EMPLOYMENT-BASED
ENROLLMENT.—An
individual enrolled under this title on an employment
basis may not elect to terminate such enrollment.
‘‘(2) NON-EMPLOYMENT BASIS.—An individual
enrolled under this title on a non-employment basis
may not terminate such enrollment unless—
‘‘(A) the individual is no longer eligible to
be enrolled under this title because of a change
of immigration or residency status, or
‘‘(B) the individual demonstrates to the
satisfaction of the Secretary that the individual
is a medicare beneficiary or is enrolled under a
qualified employer health plan.
‘‘(d) ENFORCEMENT.—
‘‘(1) MONITORING
OF
INDIVIDUAL
TAX
RE-
TURNS.—The Secretary of the Treasury shall re-
quire the filing of such information as may be nec-
essary to establish compliance with subsection (a).
‘‘(2) RETROACTIVE ENROLLMENT.—If such an
individual has not provided evidence of enrollment in
a qualified employer health plan or Federal health
plan, the Secretary—
‘‘(A) shall enroll the individual pursuant to
the filing of such return, and
‘‘(B) shall require the payment of twice the
amounts of premiums that would have been
paid if the person had been enrolled on a timely
basis, unless the individual has established to
the satisfaction of the Secretary good cause for
the failure to enroll on a timely basis.
‘‘(e) EFFECTIVE DATE
OF REQUIREMENT.—The
date specified in this subsection is January 1, 1997.
‘‘(f) FEDERAL HEALTH PLAN DEFINED.—In this
section, the term ‘Federal health plan’ means a health
plan of, or contributed to by, the Federal Government on
behalf of its employees, retirees, and their family mem-
bers, and includes—
‘‘(1) the Federal employees health insurance
program under chapter 89 of title 5, United States
Code,
‘‘(2) the program for the provision of medical
and dental benefits under chapter 55 of title 10,
United States Code, and
‘‘(3) the program for the provision of hospital
care and medical services by the Department of Vet-
erans’ Affairs under chapter 17 of title 38, United
States Code.
‘‘PART B—HEALTH INSURANCE BENEFITS
‘‘SEC. 2211. REQUIRED HEALTH SERVICES.
‘‘(a) MEDICARE BENEFITS.—
‘‘(1) IN GENERAL.—Except as provided in the
succeeding provisions of this part and part C, the
health insurance benefits provided to an individual
enrolled under this title (whether on an employment
basis or a non-employment basis) shall consist of en-
titlement to the same benefits as are provided under
title XVIII to individuals entitled to benefits under
part A, and enrolled under part B, of title XVIII.
‘‘(2) REQUIRED HEALTH SERVICES DEFINED.—
In this title and title XXI, the term ‘required health
services’ means the services provided under this title
(including services described in subsections (b) and
(c)).
‘‘(b) UNLIMITED INPATIENT HOSPITAL SERVICES
FOR CHILDREN.—For children, required health benefits
also shall include payment for inpatient hospital services
without regard to any day limitations under subsections
(a)(1) and (b)(1) of section 1812.
‘‘(c) PREGNANCY-RELATED SERVICES.—
‘‘(1) IN GENERAL.—In the case of a pregnant
woman (as defined in section 2283(3)), benefits
under this title shall include entitlement to have pay-
ment made for the following, subject to the periodic-
ity schedule established with respect to the services
under paragraph (2) and prior authorization of cer-
tain services under paragraph (3):
‘‘(A) Prenatal care, including care for all
complications of pregnancy.
‘‘(B) Inpatient labor and delivery services.
‘‘(C) Postnatal care.
‘‘(D) Postnatal family planning services.
‘‘(2) PERIODICITY SCHEDULE.—The Secretary,
in consultation with the American College of Obstet-
rics and Gynecology, shall establish a schedule of pe-
riodicity which reflects the general, appropriate fre-
quency with which services listed in paragraph (1)
should be provided to pregnant women without com-
plications of pregnancy.
‘‘(3) PRIOR
AUTHORIZATION
REQUIRED
FOR
CERTAIN SERVICES.—
‘‘(A) IN GENERAL.—Except in the case of
items and services specified under subpara-
graph (B), benefits are not available with re-
spect to an item or service under paragraph (1)
unless the provision of the item or service has
been approved by a utilization and quality con-
trol peer review organization before the provi-
sion of the item or service.
‘‘(B) EXCEPTION FOR ROUTINE OR COM-
MON ITEMS AND SERVICES.—Subparagraph (A)
shall not apply to items and services which the
Secretary has specified on a list as being ei-
ther—
‘‘(i) related to normal pregnancy, or
‘‘(ii) related to a highly prevalent
complication of pregnancy,
or in the case of emergency services.
‘‘(d) PREVENTIVE SERVICES DEFINED.—In this title,
the term ‘preventive services’ means the following items
and services furnished in accordance with any applicable
periodicity schedules:
‘‘(1) Pregnancy-related services (described in
subsection (c)(1)).
‘‘(2) Well-child care (as defined in section
1861(ll)(1)).
‘‘(3) Screening mammography (as defined in
section 1861(jj)).
‘‘(4) Screening pap smear (as defined in section
1861(nn)).
‘‘(5) Colorectal cancer screening services.
‘‘(6) Immunization services described in section
1862(a)(1)(H).
The services referred to in paragraph (5) are screening
fecal-occult 
blood 
tests 
and 
screening 
flexible
sigmoidoscopies provided for the purpose of early detection
of colon cancer.
‘‘PART C—PAYMENTS
FOR BENEFITS; DEDUCTIBLES,
COINSURANCE, AND STOP-LOSS PROTECTION
FOR
REQUIRED HEALTH SERVICES
‘‘SEC. 2221. PAYMENTS FOR BENEFITS.
‘‘(a) USE OF MEDICARE PAYMENT RULES.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this title—
‘‘(A) payment of benefits under this title
with respect to services shall be made, subject
to adjustment in payment rates under sub-
section (b), in the same amounts and on the
same basis as payment may be made with re-
spect to such services under title XVIII, and
‘‘(B) the provisions of sections 1814, 1815,
1833, 1834, 1835, 1842, 1848, 1886, 1887
shall apply to payment of benefits (and provi-
sion of services and charges thereon) under this
title in the same manner as they apply to bene-
fits, services, and charges under title XVIII.
‘‘(2) IDENTIFICATION
OF
COMPARABLE
PAY-
MENT METHODS FOR NEW SERVICES.—In the case
of services for which there is not a payment basis es-
tablished under title XVIII, the Secretary shall es-
tablish payment rules that are similar to the pay-
ment rules for similar services under such title.
‘‘(3) NO
JUDICIAL
OR
ADMINISTRATION
RE-
VIEW.—There shall be no administrative or judicial
review of the payment rates or rules under this sec-
tion (including adjustments made under subsection
(b)).
‘‘(b) PAYMENT BASED ON APPROVED RATES.—
‘‘(1) IN
GENERAL.—Payments for services
under this title shall be based on rates approved by
the Federal Health Care Cost Containment Commis-
sion under title III of the Health Insurance Cov-
erage and Cost Containment Act of 1993.
‘‘(2) PAYMENT FOR OBSTETRICAL SERVICES.—
‘‘(A) GLOBAL FEE.—In making payment
under this title with respect to the group of ob-
stetrical services typical of treatment through-
out a course of pregnancy, the Secretary shall
establish a global fee schedule with respect to
such group of services.
‘‘(B) DISINCENTIVE FOR CESAREAN SEC-
TIONS.—The fee schedule amount otherwise es-
tablished with respect to a cesarean section
shall be 95 percent of the fee schedule amount
otherwise established.
‘‘(c) USE OF TRUST FUND.—In applying the provi-
sions described in subsection (a)(1)(B) in carrying out this
section, any reference in title XVIII to a trust fund shall
be treated as a reference to the Public Health Trust Fund
established under section 2233.
‘‘(d) WITHHOLDING
OF PAYMENTS
FOR CERTAIN
MEDICARE AND MEDICAID PROVIDERS.—The provisions
of section 1885 (relating to withholding of payments for
certain medicaid providers) shall apply under this title in
the same manner as they apply under title XVIII, except
that for this purpose any reference in such section to title
XIX shall be deemed to include a reference to title XVIII.
‘‘SEC. 2222. DEDUCTIBLE FOR REQUIRED HEALTH SERV-
ICES.
‘‘(a) DEDUCTIBLE.—
‘‘(1) IN GENERAL.—Except as provided in this
section and part E, the amount of expenses for re-
quired health services with respect to which an indi-
vidual is entitled to have payment made under this
title for any year shall first be reduced by a deduct-
ible of $250.
‘‘(2) FAMILY LIMIT OF $500.—In the case of a
family, the deductible under paragraph (1) shall not
apply in a year after members of the family (who
are not medicare beneficiaries) have collectively had
expended $500 towards such deductible.
‘‘(3) APPLICATION OF DEDUCTIBLE IN PLACE
OF MEDICARE DEDUCTIBLES.—Under this title, the
deductible established under this subsection shall be
applied instead of applying the deductible for inpa-
tient hospital services under the first sentence of
section 1813(a)(1) and the deductible under section
1833(b).
‘‘(4) INDEXING OF DOLLAR AMOUNTS OF DE-
DUCTIBLE.—The dollar amounts specified in para-
graphs (1) and (2) shall each be increased each year
(beginning with second year after the year in which
this title is enacted) by a percentage equal to the
percentage increase in the contribution and benefit
base (determined under section 230) from the year
before the year in which this title is enacted to the
year before the year involved. Any such increase
shall be rounded to the nearest multiple of $5.
‘‘(b) DEDUCTIBLE DOES NOT APPLY TO PREVEN-
TIVE SERVICES.—The deductible established under sub-
section (a) does not apply to preventive services provided
consistent with any applicable periodicity schedules.
‘‘SEC. 2223. COINSURANCE FOR REQUIRED HEALTH SERV-
ICES.
‘‘(a) COINSURANCE RATES.—Subject to subsections
(b) and (c) and part E, the coinsurance rates applicable
to required health services under title XVIII shall apply
in the administration of this title.
‘‘(b) NO COINSURANCE
FOR PREVENTIVE SERV-
ICES.—There shall be no coinsurance under this title in
the case of preventive services provided consistent with
any applicable periodicity schedules.
‘‘(c) NO COINSURANCE FOR INPATIENT HOSPITAL
SERVICES FOR CHILDREN.—There shall be no coinsur-
ance under this title in the case of inpatient hospital serv-
ices furnished to children.
‘‘SEC. 2224. LIMIT ON COST-SHARING FOR REQUIRED
HEALTH SERVICES.
‘‘(a) LIMITATION.—
‘‘(1) IN
GENERAL.—Whenever in a calendar
year an individual’s or family’s expenses for the de-
ductible and coinsurance with respect to required
health services covered under this title and furnished
during the year equals $2,500 or $3,000, respec-
tively, payment of benefits under this title for the in-
dividual or family for required health services fur-
nished during the remainder of the year shall be
paid without the application of any coinsurance.
‘‘(2) INDEXING
OF
DOLLAR
AMOUNT
OF
LIMIT.—The dollar amounts specified in paragraph
(1) shall be increased each year (beginning with the
second year after the year in which this title is en-
acted) by a percentage equal to the percentage in-
crease in the contribution and benefit base (deter-
mined under section 230) from the year before the
year in which this title is enacted to the year before
the year involved. Any such increase shall be round-
ed to the nearest multiple of $5.
‘‘(b) CREDITING FOR EXPENSES INCURRED UNDER
QUALIFIED EMPLOYER HEALTH PLANS.—Cost sharing
incurred under a qualified employer health plan for re-
quired health services shall be credited under this section
against the limits contained in subsection (a).
‘‘SEC. 2225. EXCLUSIONS; COORDINATION.
‘‘(a) EXCLUSIONS.—
‘‘(1) IN GENERAL.—Except as provided in this
section, section 1862 shall apply to expenses in-
curred for items and services provided under this
title the same manner as such section applies to
items and services provided under title XVIII.
‘‘(2) PREVENTIVE SERVICES.—In the case of
preventive services provided consistent with the ap-
plicable periodicity schedule—
‘‘(A) such services shall be considered to be
reasonable and medically necessary, and
‘‘(B) shall not be subject to exclusion
through the operation of paragraph (1), (7), or
(12) of section 1862(a) (as incorporated under
paragraph (1)).
‘‘(3) USE OF SAME NATIONAL COVERAGE DECI-
SION REVIEW PROCESS.—The provisions of section
1869(b)(3) shall apply under this title in the same
manner as they apply under title XVIII. Any deter-
mination under such title that, under paragraph (1),
would apply under this title shall not be subject to
review under this paragraph.
‘‘(b) RELATIONSHIP TO MEDICARE IN CASE OF EM-
PLOYMENT-BASED ENROLLMENT.—In the case of enroll-
ment of a medicare beneficiary on an employment basis
under this title, in applying section 1862(b) (pursuant to
subsection (a)(2) of this section), the public health plan
shall be treated as a large group health plan (described
in section 1862(b)).
‘‘SEC. 2226. APPLICATION OF PARTICULAR QUALIFIED
HEALTH PLAN REQUIREMENTS.
‘‘Section 2152 (relating treatment of family members
as a unit; coverage period; and health plan cards) and sec-
tion 2157 (relating to coordination and portability of
health coverage under qualified health plans) shall apply
to the public health plan in the same manner as they apply
to a qualified health plan.
‘‘PART D—PREMIUMS, PUBLIC HEALTH TRUST FUND
‘‘SEC. 2231. PREMIUMS.
‘‘(a) AMOUNT OF PREMIUMS.—
‘‘(1) IN GENERAL.—Except as provided in this
section 
(and 
section 
2234 
with 
respect 
to
nonenrolling employer premiums), the premium to
be charged for enrollment under this title of any in-
dividual in a beneficiary class (as defined in sub-
section (d)) in any community (as defined in sub-
section (e)) is the actuarial rate established under
paragraph (2) with respect to such class and com-
munity.
‘‘(2) CREDIT
FOR
EMPLOYMENT
TAXES
PAID
FOR PART-TIME AND SEASONAL OR TEMPORARY EM-
PLOYEES.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (C), in the case of an individual who is
a covered employee (as defined in subparagraph
(B)), the premium to be charged for enrollment
under this title on a non-employment basis is—
‘‘(i) the actuarial rate otherwise appli-
cable under paragraph (1), less the amount
of the taxes paid by the individual and all
employers with respect to the employee
(and family members of the employee)
under section 3151(a) of the Internal Rev-
enue Code of 1986, or
‘‘(ii) 20 percent of such actuarial rate,
whichever is greater.
‘‘(B) COVERED EMPLOYEE DEFINED.—In
subparagraph (A), the term ‘covered employee’
means an individual—
‘‘(i) who is employed by one or more
employers as a part-time employee or as a
seasonal or temporary employee, and
‘‘(ii) none of whose employers is en-
rolling part-time employees or seasonal or
temporary employees, respectively, under a
qualified employer health plan, but all of
which are required to pay a tax with re-
spect to such employees under section
3151(a)(1) of the Internal Revenue Code
of 1986,
and includes the family members of such an
employee.
‘‘(C) LIMIT ON PREMIUM WHERE PREMIUM
SUBSIDY.—In no case shall the premium under
subparagraph (A) exceed—
‘‘(i) the beneficiary actuarial rate oth-
erwise applicable under paragraph (1), re-
duced by
‘‘(ii) the amount of any premium sub-
sidy under part E.
‘‘(b) DETERMINATION OF ACTUARIAL RATES.—
‘‘(1) IN GENERAL.—In September of each year,
beginning with 1993, the Secretary shall determine
and publish the actuarial rate for each beneficiary
class (as specified in subsection (d)) for each com-
munity (designated under subsection (e)) for health
insurance benefits in the following year.
‘‘(2) BASIS FOR ACTUARIAL RATES.—Each such
actuarial rate shall be established in a manner so
that if all eligible individuals in the class were en-
rolled under this title for the benefit package in the
community, the aggregate of the rates would be
equal to the total expenditures (including adminis-
trative expenses) with respect to that class and com-
munity under this title in that following year. Each
such actuarial rate shall be uniform within each ben-
eficiary class and community, and shall not vary
among such individuals by age, sex, health, or other
risk characteristics.
‘‘(3) PUBLIC STATEMENT.—Whenever the Sec-
retary publishes actuarial rates under this sub-
section, the Secretary shall, at the time of such pub-
lication, include a public statement setting forth the
actuarial assumptions and bases employed in arriv-
ing at the amount of the actuarial rates.
‘‘(c) NO JUDICIAL OR ADMINISTRATION REVIEW.—
There shall be no administrative or judicial review of the
actuarial rates determined under this section.
‘‘(d) BENEFICIARY CLASSES.—For purposes of this
section, the beneficiary classes are as follows:
‘‘(1) 1 adult.
‘‘(2) A married couple without children.
‘‘(3) A married couple with 1 or more children,
or 1 adult with 1 or more children.
‘‘(e) COMMUNITY.—For purposes of this section, the
term ‘community’ means a geographic area designated by
the Secretary as—
‘‘(1) encompassing one or more adjacent metro-
politan statistical areas, or
‘‘(2) the remaining area within each State (that
is not designated within any community under para-
graph (1));
except that the Secretary may designate an entire State
as a community if such a designation would better carry
out the purposes of this title and title XXIII. The Sec-
retary from time to time may change the boundaries of
communities designated under paragraph (1) or (2) for
such purposes. There shall be no administrative or judicial
review of the designation of communities under this sub-
section.
‘‘SEC. 2232. COLLECTION OF PREMIUMS.
‘‘(a) INDIVIDUAL ENROLLMENT.—
‘‘(1) IN GENERAL.—In the case of individuals
enrolled on a non-employment basis under this title,
the Secretary shall provide for the payment of pre-
miums on a monthly or quarterly basis. To the max-
imum extent feasible, the Secretary shall arrange for
payment of such premiums through automatic with-
holding from income sources or accounts with finan-
cial institutions. In the case of a part-time employee
or seasonal or temporary worker, the amount of the
premiums owed under this section shall be reduced
by the amount of excise taxes paid under section
3151(a) of the Internal Revenue Code of 1986 with
respect to such employment.
‘‘(2) COLLECTION OF UNPAID PREMIUMS.—
‘‘(A) TRANSMISSION OF INFORMATION TO
SECRETARY OF THE TREASURY.—In the case of
premium amounts owing and unpaid under this
subsection, the Secretary shall inform the Sec-
retary of the Treasury of individuals or individ-
uals owing such amounts and the amounts
owed.
‘‘(B) COLLECTION.—The Secretary of the
Treasury shall assess and collect the amounts
referred to in subparagraph (A) in the same
manner as taxes imposed by subtitle C of the
Internal Revenue Code of 1986.
‘‘(b) NONENROLLING EMPLOYER PREMIUMS.—
‘‘(1) EMPLOYER PREMIUMS.—In the case of an
individual enrolled under this title on an employment
basis, the employer shall provide for payment of pre-
miums on a monthly or quarterly basis.
‘‘(2) NONENROLLING EMPLOYER PREMIUMS.—
In the case of nonenrolling employer premiums owed
under section 2234, the Secretary shall require pay-
ment of premiums on a monthly or quarterly basis.
‘‘(3) COLLECTION OF UNPAID PREMIUMS.—
‘‘(A) TRANSMISSION OF INFORMATION TO
SECRETARY OF THE TREASURY.—In the case of
premium amounts owing and unpaid under this
subsection, the Secretary shall inform the Sec-
retary of the Treasury of the employers owing
such amounts and the amounts owed.
‘‘(B) COLLECTION.—The Secretary of the
Treasury shall assess and collect the amounts
referred to in subparagraph (A) in the same
manner as taxes imposed by subtitle C of the
Internal Revenue Code of 1986.
‘‘(c) DEPOSIT.—Premiums collected under this sec-
tion shall be deposited to the credit of the Public Health
Trust Fund (established under section 2233).
‘‘SEC. 2233. PUBLIC HEALTH TRUST FUND.
‘‘(a) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—There is hereby created on
the books of the Treasury of the United States a
trust fund to be known as the ‘Public Health Trust
Fund’ (in this section referred to as the ‘Trust
Fund’). The Trust Fund shall consist of such gifts
and bequests as may be made as provided in para-
graph (3) and such amounts as may be deposited in,
or appropriated to, such Trust Fund as provided in
this part.
‘‘(2) DEPOSIT
OF
TAXES.—There are hereby
appropriated to the Trust Fund amounts equivalent
to 100 percent of the taxes imposed by—
‘‘(A) part VIII of subchapter A of chapter
1 of the Internal Revenue Code of 1986, and
‘‘(B) sections 3151, 5000A, and 5000B of
such Code.
The amounts appropriated by the preceding sentence
shall be transferred from time to time from the gen-
eral fund in the Treasury to the Trust Fund, such
amounts to be determined on the basis of estimates
by the Secretary of the Treasury of the taxes, paid
to or deposited into the Treasury; and proper adjust-
ments shall be made in amounts subsequently trans-
ferred to the extent prior estimates were in excess
of or were less than the taxes specified in such
sentence.
‘‘(3) AUTHORIZATION TO ACCEPT GIFTS.—The
Managing Trustee of the Trust Fund is authorized
to accept on behalf of the United States money gifts
and bequests made unconditionally to the Trust
Fund, for the benefit of the Trust Fund, or any ac-
tivity financed through the Trust Fund.
‘‘(b) INCORPORATION OF PROVISIONS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
the provisions of subsections (b) through (j) of sec-
tion 1817 shall apply to the Trust Fund in the same
manner as they apply to the Federal Hospital Insur-
ance Trust Fund.
‘‘(2) EXCEPTIONS.—In applying paragraph
(1)—
‘‘(A) the Board of Trustees and Managing
Trustee of the Trust Fund shall be composed of
the members of the Board of Trustees and the
Managing Trustee, respectively, of the Federal
Hospital Insurance Trust Fund; and
‘‘(B) any reference in section 1817 to the
Federal Hospital Insurance Trust Fund, to title
XVIII (or part A thereof), or (in subsection
(f)(1)) to section 3102(b) of the Internal Reve-
nue Code of 1986 is deemed a reference to the
Trust Fund under this section, this title, and to
section 3151(a)(2) of such Code, respectively.
‘‘(3) TRANSFERS
TO
HOSPITAL
INSURANCE
TRUST FUND.—There shall be transferred periodi-
cally (but not less often than monthly) from the
Trust Fund to the Federal Hospital Insurance Trust
Fund, amounts equivalent to the premium, deduct-
ible, and coinsurance subsidies provided under part
E of this title with respect to premiums, deductibles,
and coinsurance under part A of title XVIII.
‘‘(4) TRANSFERS TO SMI TRUST FUND.—There
shall be transferred periodically (but not less often
than monthly) from the Trust Fund to the Federal
Supplementary Medical Insurance Trust Fund,
amounts equivalent to the sum of—
‘‘(A) to the premium, deductible, and coin-
surance subsidies provided under part E of this
title with respect to premiums, deductibles, and
coinsurance under part B of title XVIII;
‘‘(B) the net additional expenditures under
part B of such title resulting from the amend-
ments made by sections 501 through 504 and
507 of the Health Insurance Coverage and Cost
Containment Act of 1993.
‘‘SEC. 2234. TRANSFER PAYMENTS IN THE CASE OF MUL-
TIPLE EMPLOYERS.
‘‘(a) TREATMENT
OF
MULTIPLE
EMPLOYMENT
WHERE EMPLOYEE COVERED UNDER A QUALIFIED EM-
PLOYER HEALTH PLAN.—
‘‘(1) IN GENERAL.—In the case of a multiple-
employed individual (as defined in subsection (d)(1))
who is covered under a qualified employer health
plan of an employer—
‘‘(A) each nonenrolling employer (as de-
fined in subsection (d)(2)) that offers coverage
under a qualified employer health plan shall pay
to the Public Insurance Trust Fund the
nonenrolling employer premium specified in
subsection (b);
‘‘(B) the enrolling employer is entitled to
receive from such Trust Fund the enrolling em-
ployer subsidy specified in subsection (c); and
‘‘(C) there will be no tax imposed on the
wages 
of 
the 
individual 
under 
section
3151(a)(2) of the Internal Revenue Code of
1986 with respect to wages paid during the pe-
riod of such coverage.
‘‘(2) APPLICATION ON A MONTHLY BASIS.—The
premiums and subsidies provided under this sub-
section shall be paid with respect to a monthly pe-
riod of coverage.
‘‘(b) AMOUNT OF NONENROLLING EMPLOYER PRE-
MIUM.—
‘‘(1) 
IN
GENERAL.—The 
amount 
of 
the
nonenrolling employer premium described in this
subsection is the applicable percent of the actuarial
rate (specified in section 2226(b)) for the beneficiary
class in the community in which the employee is
enrolled.
‘‘(2) APPLICABLE
PERCENT
DEFINED.—For
purposes of paragraph (1), the term ‘applicable per-
cent’ means, with respect to an employee who is—
‘‘(A) a full-time employee of the employer,
40 percent, or
‘‘(B) a part-time employee of the employer,
20 percent.
‘‘(c) AMOUNT
OF
ENROLLING
EMPLOYER
SUB-
SIDY.—
‘‘(1) IN GENERAL.—The amount of the enroll-
ing employer subsidy described in this subsection is
the applicable percent of the actuarial rate (specified
in section 2226(b)) for the beneficiary class in the
community in which the employee is enrolled.
‘‘(2) APPLICABLE
PERCENT
DEFINED.—For
purposes of paragraph (1), the term ‘applicable per-
cent’ means, with respect to a multiple-employee
who (or whose spouse) is—
‘‘(A) a full-time employee of a nonenrolling
employer, 40 percent, or
‘‘(B) not a full-time employee of a
nonenrolling employer, but is a part-time em-
ployee of a nonenrolling employer, 20 percent.
In no case shall the applicable percent with respect
to a multiple-employed employee (including the em-
ployee’s spouse) exceed 40 percent.
‘‘(d) DEFINITIONS.—In this section:
‘‘(1) MULTIPLE-EMPLOYED
INDIVIDUAL.—The
term ‘multiple-employed individual’ means an indi-
vidual who in a month is an employee (whether part-
time or full-time) and—
‘‘(A) who is also employed (whether part-
time or full-time) by 1 or more other employer,
or
‘‘(B) whose spouse or parent is also an em-
ployee (whether part-time or full-time) of 1 or
more employers.
‘‘(2) NONENROLLING
EMPLOYER.—The term
‘nonenrolling employer’ means, with respect to a
multiple-employed individual who is enrolled under a
qualified employer health plan of an employer, any
employer of such individual other than such em-
ployer.
‘‘SEC. 2235. USE OF UNIFORM CLAIMS FORMS; UNIFORM IN-
FORMATION REPORTING.
‘‘The Secretary shall provide for—
‘‘(1) submission of claims under this title (and
title XVIII) in accordance with section 323 of the
Health Insurance Coverage and Cost Containment
Act of 1993, and
‘‘(2) reporting to the Commission of informa-
tion on required health services provided under this
title (or title XVIII) pursuant to standards promul-
gated under section 324 of such Act.
‘‘PART E—ASSISTANCE FOR LOW-INCOME INDIVIDUALS
‘‘SEC. 2241. ASSISTANCE FOR INDIVIDUALS WITH INCOME
BELOW THE POVERTY LINE ENROLLED ON A
NON-EMPLOYMENT BASIS.
‘‘In the case of an individual—
‘‘(1) who is enrolled under this title on a non-
employment basis,
‘‘(2) who is not a medicare beneficiary, and
‘‘(3) whose family adjusted total income (as de-
fined in section 2247) does not exceed 100 percent
of the official poverty line (as defined in section
2283(2)),
the low-income assistance under this part shall consist of
waiver of the premiums imposed under section 2231(a)
and of any deductibles or coinsurance under this title for
the individual and the individual’s family.
‘‘SEC. 2242. ASSISTANCE FOR INDIVIDUALS WITH INCOME
BELOW 
TWICE 
THE 
POVERTY 
LINE 
EN-
ROLLED ON A NON-EMPLOYMENT BASIS.
‘‘(a) NON-MEDICARE POPULATION.—In the case of
an individual who is not a medicare beneficiary, who is
enrolled under this title on a non-employment basis, and
whose family adjusted total income exceeds 100 percent
but is less than 200 percent, of the official poverty line,
the low-income assistance under this part shall consist of
the following:
‘‘(1) PREMIUMS.—The premium amount under
section 2231(a) shall be reduced by the subsidy per-
centage (as defined in subsection (b)) of the pre-
mium amount otherwise applied. Any reduction in
premium under this paragraph shall be rounded to
the nearest multiple of $5.
‘‘(2) DEDUCTIBLE.—The deductibles under sec-
tion 2222 shall be reduced by the subsidy percentage
of the deductibles otherwise applied. Any reduction
in a deductible under this paragraph shall be round-
ed to the nearest multiple of $10.
‘‘(3) COINSURANCE.—The percentage coinsur-
ance applied under section 2223 shall be reduced by
the subsidy percentage multiplied by the percentage
coinsurance otherwise applied.
‘‘(b) SUBSIDY PERCENTAGE DEFINED.—
‘‘(1) IN GENERAL.—In this section and section
2243, the term ‘subsidy percentage’ means the num-
ber of percentage points by which the family’s ad-
justed total income (expressed as a percent of the
applicable official poverty line) is less than 200 per-
cent.
‘‘(2) ROUNDING FOR COINSURANCE.—For pur-
poses of subsection (a)(3), the subsidy percentage
(as applied to the coinsurance percentage) shall be
rounded to the nearest multiple of 5 percent.
‘‘SEC. 
2243. 
ASSISTANCE 
FOR 
INDIVIDUALS 
COVERED
UNDER 
QUALIFIED 
EMPLOYER 
HEALTH
PLANS.
‘‘(a) IN GENERAL.—In the case of an eligible individ-
ual who is enrolled under a qualified employer health plan
or is enrolled under this title on an employment basis, low-
income assistance under this part shall consist of—
‘‘(1) payment (in a manner specified by the
Secretary) of the amount of the premium subsidy
under subsection (b) to the individual or another
family member, or, in the case described in sub-
section (b)(4), the employer, and
‘‘(2) payment to the plan of the amount of the
deductible and coinsurance subsidy under subsection
(c).
Such subsidies shall apply to premiums, deductibles, and
coinsurance for the individual and family member covered
on an employment basis under the plan or under this title.
‘‘(b) PREMIUM SUBSIDY.—In the case of an eligible
individual who is enrolled under a qualified employer
health plan—
‘‘(1) TREATMENT
UNDER
QUALIFIED
EM-
PLOYER HEALTH PLAN.—
‘‘(A) AMOUNT.—The amount of the pre-
mium subsidy under this subsection is the sub-
sidy percentage (as defined in section 2242(c))
of the employee share of the premium. Any pre-
mium subsidy under this paragraph which is
not a multiple of $5 shall be rounded to the
nearest multiple of $5.
‘‘(B) USE
OF
LEAST
EXPENSIVE
QUALI-
FIED
PLAN.—In applying subparagraph (A),
the amount of the premium subsidy shall be
based on the qualified employer health plan
available to the employee with the smallest pre-
mium payment required of the employee (for
the type of individual or family enrollment with
which the employee is enrolled).
‘‘(C) FREQUENCY
OF
PAYMENT.—Except
as provided in subparagraph (D), the premium
subsidy under this subsection shall be paid not
less frequently than quarterly or, if the amount
of the premium subsidy on a monthly basis ex-
ceeds $20, monthly.
‘‘(D) OPTIONAL, DIRECT
COORDINATION
WITH
EMPLOYERS.—In the case of an em-
ployee—
‘‘(i) who is enrolled under a covered
employer health plan,
‘‘(ii) who is entitled to assistance
under this part,
‘‘(iii) whose employer agrees to enter
into an arrangement with the Secretary
under this subparagraph, and
‘‘(iv) who assigns (in the manner
specified by the Secretary) rights to pre-
mium subsidies under this paragraph to
the employer,
the Secretary shall enter into an arrangement
with the employer under which (I) the employer
agrees to reduce premiums otherwise imposed
with respect to the individual by the amount of
the subsidy, and (II) the Secretary agrees to
make payment (not less often than monthly) to
the employer of the amount of such premium
subsidy.
‘‘(2) TREATMENT
UNDER
PUBLIC
HEALTH
PLAN.—In the case of an eligible individual who is
enrolled on an employment basis under this title—
‘‘(A) AMOUNT.—The amount of the pre-
mium subsidy under this subsection is the sub-
sidy percentage (as defined in section 2242(c))
of the taxes paid under section 3151(a)(2) of
the Internal Revenue Code of 1986.
‘‘(B) FREQUENCY OF PAYMENT.—The pre-
mium subsidy under this subsection shall be
paid not less frequently than quarterly or, if the
amount of the premium subsidy on a monthly
basis exceeds $20, monthly.
‘‘(c) DEDUCTIBLE AND COINSURANCE SUBSIDY.—
‘‘(1) DEDUCTIBLE
SUBSIDY
AMOUNT.—The
amount of the deductible subsidy under this sub-
section is the subsidy percentage of the deductible
otherwise applied. Any deductible subsidy under this
paragraph that is not a multiple of $10 shall be
rounded to the nearest multiple of $10.
‘‘(2) COINSURANCE
SUBSIDY
AMOUNT.—The
amount of the coinsurance subsidy under this sub-
section is the product of the subsidy percentage, the
percentage coinsurance otherwise applied, and the
payment amount permitted for required health serv-
ices.
‘‘(3) DIRECT COORDINATION BY QUALIFIED EM-
PLOYER HEALTH PLAN REQUIRED.—In the case of
an individual enrolled under a qualified employer
health plan, the plan shall provide for—
‘‘(A) acceptance of information, electroni-
cally, from the Secretary on the amount of the
deductible and coinsurance subsidy for individ-
uals (and family members),
‘‘(B) a reduction in the deductibles and co-
insurance otherwise imposed to reflect the de-
ductible and coinsurance subsidies to which the
individual and family members are entitled,
‘‘(C) reasonably prompt payment of bills
for which such charges have been made, and
‘‘(D) transmission of such information as
is necessary to indicate the amount of subsidy
provided under the plan for specified individ-
uals.
In return, the Secretary shall provide for payment,
not less often than monthly, to the plan of the
amount of payments made by such a plan for de-
ductible and coinsurance subsidies under this sub-
section.
‘‘SEC. 2244. APPLICATIONS FOR ASSISTANCE.
‘‘(a) IN GENERAL.—Subject to section 2245, any in-
dividual who seeks assistance under this part (with respect
to himself or herself or a family member) shall submit a
written application, by person or mail, to the Secretary.
The application may be submitted with an application to
enroll under this title or separately.
‘‘(b) BASIS FOR DETERMINATION.—Subject to sec-
tion 2245 and reconciliation under such section, eligibility
for assistance under this part shall be based on 4 times
the family adjusted total income (as defined in section
2247) during the 3 months preceding the month in which
the application is filed.
‘‘(c) FORM AND CONTENTS.—An application for as-
sistance under this part shall be in a form and manner
specified by the Secretary and shall require—
‘‘(1) the provision of information necessary to
make the determinations described in subsection (b),
‘‘(2) the provision of information respecting any
covered employer health plan in which the individual
is enrolled, and
‘‘(3) the individual (if enrolled under such a
plan) to assign rights for deductible subsidies under
this part to such plan.
Such form also shall include an option to execute, as part
of completing the form and in order to meet the condition
described in section 2243(b)(4)(D), an assignment of an
individual’s right for premium subsidies under this part
to an employer.
‘‘(d) FREQUENCY OF APPLICATIONS.—
‘‘(1) IN GENERAL.—An application for assist-
ance under this part may be filed at any time during
the year and may be resubmitted (but, except as
provided in paragraph (3), not more frequently than
once every 3 months) based upon a change of in-
come or family composition.
‘‘(2) NEED TO REAPPLY.—In the case of an in-
dividual who—
‘‘(A) is entitled to assistance under this
section in September of a year, and
‘‘(B) wishes to remain eligible for benefits
for months beginning with January of the fol-
lowing year,
the individual (or a family member) must file with
the Secretary in October of that preceding year a
new application for assistance. If an individual fails
to file a new application under this paragraph, an
application for such assistance with respect to any
family member may not be filed during November or
December of that preceding year.
‘‘(3) CORRECTION
OF
INCOME.—Nothing in
paragraph (1) shall be construed as preventing an
individual or family from, at any time, submitting an
application to reduce the amount of assistance under
this part based upon an increase in income from
that stated in the previous application.
‘‘(e) TIMING OF ASSISTANCE.—
‘‘(1) IN GENERAL.—If an application for assist-
ance under this part is filed—
‘‘(A) on or before the 15th day of a month,
assistance under this part shall be available for
premiums for months after such month and,
with respect to the deductible, for expenses in-
curred after such month; or
‘‘(B) after the 15th day of a month, assist-
ance under this part shall be available for pre-
miums for months after the month following
such month and, with respect to the deductible,
for expenses incurred after such following
month.
‘‘(2) WELFARE RECIPIENTS.—In the case of an
individual or family with respect to whom an appli-
cation for assistance is not required because of sec-
tion 2246, in applying paragraph (1), the date of ap-
proval of aid or benefits described in such section
shall be considered the date of filing of an applica-
tion for assistance under this part.
‘‘(f) VERIFICATION.—The Secretary shall provide for
verification, on a sample basis or other basis, of the infor-
mation supplied in applications under this part. This ver-
ification shall be separate from the reconciliation provided
under section 2245.
‘‘(g) HELP
IN COMPLETING APPLICATIONS.—The
Secretary shall provide, from funds appropriated to carry
out this title, for grants to public or private nonprofit enti-
ties that will make available assistance to individuals and
families in filing applications for assistance under this
part. The Secretary shall make grants in a manner that
provides such assistance at a variety of sites (such as low-
income housing projects and shelters for homeless individ-
uals) that are readily accessible to individuals and families
eligible for assistance under this part.
‘‘(h) PENALTIES FOR INACCURATE INFORMATION.—
‘‘(1) INTEREST
FOR
UNDERSTATEMENTS.—
Each individual who knowingly understates income
reported in an application for assistance under this
part or otherwise makes a material misrepresenta-
tion of information in such an application shall be
liable to the Federal Government for excess pay-
ments made based on such understatement or mis-
representation, and for interest on such excess pay-
ments at a rate specified by the Secretary.
‘‘(2) PENALTIES FOR MISREPRESENTATION.—
Each individual who knowingly misrepresents mate-
rial information in an application for assistance
under this part shall be liable to the Federal Govern-
ment for $1,000 or, if greater, three times the ex-
cess payments made based on such misrepresenta-
tion.
‘‘(i) FILING OF APPLICATION DEFINED.—Except as
provided in subsection (e)(2), for purposes of this part,
an application under this part is considered to be ‘filed’
on the date on which the complete application, including
all documentation required to act on the application, has
been filed with the Secretary.
‘‘SEC. 2245. RECONCILIATION OF PREMIUM ASSISTANCE
THROUGH USE OF INCOME STATEMENTS.
‘‘(a) REQUIREMENT FOR FILING OF INCOME STATE-
MENT.—Subject to section 2246, in the case of a family
which is receiving low-income assistance under this part
for any month in a year, a member of the family shall
file with the Secretary, by not later than April 15 of the
following year, a statement that verifies the family’s total
adjusted family income for the taxable year ending during
the previous year. Such a statement shall provide informa-
tion necessary to determine the family adjusted total in-
come during the year and the number of family members
in the family as of the last day of the year.
‘‘(b) RECONCILIATION
OF PREMIUM ASSISTANCE
BASED ON ACTUAL INCOME.—Based on and using the in-
come reported in the statement filed under subsection (a)
with respect to a family or individual, subject to section
2246, the Secretary shall compute the amount of assist-
ance that should have been provided under this part with
respect to premiums for the family in the year involved.
If the amount of such assistance computed is—
‘‘(1) greater than the amount of premium as-
sistance provided, the Secretary shall provide for
payment (directly or through a credit against future
premiums owed) to the family or individual involved
of an amount equal to the amount of the deficit, or
‘‘(2) less than the amount of assistance pro-
vided, the Secretary shall require the family or indi-
vidual to pay (directly or through an increase in fu-
ture premiums owed) to the Secretary (to the credit
of the program under this title) an amount equal to
the amount of the excess payment.
‘‘(c) DISQUALIFICATION FOR FAILURE TO FILE.—
Subject to section 2246, in the case of any family that
is required to file an information statement under sub-
section (a) in a year and that fails to file such a statement
by the deadline specified in such subsection, no member
of the family shall be eligible for assistance under this part
after May 1 of such year. The Secretary shall waive the
application of this subsection if the family establishes, to
the satisfaction of the Secretary, good cause for the failure
to file the statement on a timely basis.
‘‘(d) PENALTIES FOR FALSE INFORMATION.—Any
individual that provides false information in a statement
under subsection (a) is subject to a criminal penalty to
the same extent as a criminal penalty may be imposed
under section 1128B(a) with respect to a person described
in clause (ii) of such section.
‘‘(e) NOTICE
OF REQUIREMENT.—The Secretary
shall provide for written notice, in March of each year,
of the requirement of subsection (a) to each family which
received assistance under this part in any month during
the preceding year and to which such requirement applies.
‘‘(f) TRANSMITTAL
OF INFORMATION.—The Sec-
retary of the Treasury shall transmit annually to the Sec-
retary such information relating to the adjusted total in-
come of individuals for the taxable year ending in the pre-
vious year as may be necessary to verify the reconciliation
of assistance under this section.
‘‘(g) CONSTRUCTION.—Nothing in this section shall
be construed as authorizing reconciliation of assistance
provided with respect to deductibles and coinsurance.
100
‘‘SEC. 2246. TREATMENT OF CERTAIN CASH ASSISTANCE
RECIPIENTS.
‘‘In the case of a family that has been determined
to be eligible for aid under part A or E of title IV or an
individual who has been determined to be eligible for sup-
plemental security income benefits under title XVI—
‘‘(1) the family or individual is deemed, without
the need to file an application for assistance under
section 2244, to have adjusted total income below
100 percent of the official poverty line applicable to
a family of the size involved,
‘‘(2) the family or individual need not file a
statement under section 2245(a), and
‘‘(3) the assistance received by the family is not
subject to reconciliation under section 2245(b).
‘‘SEC. 2247. COMPUTATION OF FAMILY ADJUSTED TOTAL
INCOME.
‘‘In this part:
‘‘(1) ADJUSTED
TOTAL
INCOME.—The term
‘adjusted total income’ means—
‘‘(A) adjusted gross income (as defined in
section 62(a) of the Internal Revenue Code of
1986), determined without the application of
paragraphs (6) and (7) of such section and
without the application of section 162(l) of such
Code, plus
101
‘‘(B) the amount of social security benefits
(described in section 86(d) of such Code) which
is not includable in gross income under section
86 of such Code.
‘‘(2) FAMILY ADJUSTED TOTAL INCOME.—The
term ‘family adjusted total income’ means, with re-
spect to an individual, the sum of the adjusted total
income for the individual and all the other family
members.
‘‘(3) FAMILY SIZE.—The family size to be ap-
plied under this part, with respect to family adjusted
total income, is the number of individuals included
in the family for purposes of coverage of health in-
surance benefits under this title or under a qualified
employer health plan (as the case may be).
‘‘PART F—ADMINISTRATIVE PROVISIONS
‘‘SEC. 2261. AGREEMENTS WITH HOSPITALS; PARTICIPAT-
ING PHYSICIANS; TREATMENT OF INDIAN
HEALTH SERVICE FACILITIES.
‘‘(a) REQUIREMENT.—
‘‘(1) IN GENERAL.—Any hospital shall be quali-
fied to participate under this title and shall be eligi-
ble for payments under this title if—
‘‘(A) it has in effect a participation agree-
ment under section 1866(a)(1), and
102
‘‘(B) it files with the Secretary a participa-
tion agreement meeting the requirements of
subsection (b).
‘‘(b) ELEMENTS OF AGREEMENT.—
‘‘(1) IN GENERAL.—Except as provided in this
subsection, a participation agreement under this
subsection shall provide terms, specified by the Sec-
retary, that are the same terms as those required of
hospital participation agreements under section
1866(a)(1).
‘‘(2) MODIFIED COPAYMENTS.—Instead of the
limitation on charges specified under paragraphs
(1)(A) and (2) of section 1866(a), the agreement
shall not permit the hospital to charge more than
the applicable deductible and coinsurance permitted
under this title.
‘‘(3) ACCEPTANCE OF PAYMENT LIMITS.—Each
agreement shall require the hospital not to impose
charges that exceed the payment rates approved
under title III of the Health Insurance Coverage and
Cost Containment Act of 1993. The previous sen-
tence shall not be construed as prohibiting a quali-
fied employer health plan from negotiating or other-
wise providing payment rates that are less than such
reference rates.
103
‘‘(c) PHYSICIAN PARTICIPATION AGREEMENTS.—
‘‘(1) IN GENERAL.—Except as provided in this
subsection, the Secretary shall provide for participat-
ing physician agreements under this title in the
same manner as such agreements are provided for
under title part B of title XVIII pursuant to section
1842(h).
‘‘(2) LIMITATION ON CHARGES TO OTHER ENTI-
TIES.—A participating physician agreement under
this subsection shall provide that the physician
agrees not to impose charges with respect to re-
quired health services that exceed the payment rates
approved with respect to such services under title III
of the Health Insurance Coverage and Cost Contain-
ment Act of 1993. The previous sentence shall not
be construed as prohibiting a qualified employer
health plan from negotiating or otherwise providing
payment rates that are less than such reference
rates.
‘‘(d) INDIAN HEALTH SERVICE FACILITIES.—The
provisions of section 1880 (relating to Indian health serv-
ice facilities) shall apply to this title in the same manner
as they apply under title XVIII.
104
‘‘SEC. 2262. HEALTH MAINTENANCE ORGANIZATIONS.
‘‘(a) IN GENERAL.—Except as provided in this sec-
tion, section 1876 shall apply to individuals entitled to
benefits under this title in the same manner as such sec-
tion applies to individuals entitled to benefits under part
A, and enrolled under part B, of title XVIII.
‘‘(b) APPLICATION.—In applying section 1876 under
this section—
‘‘(1) the provisions of such section relating only
to individuals enrolled under part B of title XVIII
shall not apply;
‘‘(2) any reference to a Trust Fund established
under title XVIII and to benefits with respect to any
services under such title is deemed a reference to the
Public Health Trust Fund and to health insurance
benefits with respect to required health services
under this title;
‘‘(3) the adjusted average per capita cost shall
be determined on the basis of benefits under this
title;
‘‘(4) subsections (f) and (h) shall not apply; and
‘‘(5) in applying subsection (c)(3)(B), an eligi-
ble organization may require a minimum period of
enrollment (of not greater than 6 months) during
which an individual may not disenroll other than for
105
cause or unless enrollment under this title is termi-
nated.
‘‘SEC. 2263. USE OF FISCAL AGENTS.
‘‘(a) USE OF FISCAL AGENTS.—
‘‘(1) IN GENERAL.—Except as provided in this
section, the Secretary shall provide for the adminis-
tration of this title through the use of fiscal agents
in the same manner as title XVIII is carried out
through the use of such fiscal intermediaries and
carriers.
‘‘(2) SPECIAL RULES.—In the administration of
this title, the Secretary—
‘‘(A) may use a single carrier with respect
to all required health services in an area, and
‘‘(B) shall establish performance standards
at least as rigorous as the performance stand-
ards applied in the administration of title
XVIII.
‘‘(3) SEPARATE
CONTRACTS.—Contracts with
fiscal agents entered into pursuant to this subsection
for an area need not be with the same fiscal
intermediary or carrier with an agreement under
section 1816 or a contract under section 1842 for
the area. However, nothing in this section shall be
construed as preventing such an organization with
106
such an agreement or contract under such section
from entering into a contract under this section.
‘‘(b) REQUIRING USE OF ELECTRONIC BILLING.—
Effective for claims submitted on or after January 1,
1997, payment shall only be made under this title on the
basis of bills or charges that are submitted electronically
in a manner specified by the Secretary.
‘‘SEC. 2264. GENERAL ADMINISTRATION.
‘‘(a) THROUGH HEALTH CARE FINANCING ADMINIS-
TRATION.—Except as otherwise provided in this title, this
title shall be administered by the Health Care Financing
Administration.
‘‘(b) REGULATIONS; TITLE II PROVISIONS; ADMINIS-
TRATION.—The provisions of sections 1871, 1872, and
1874 (relating to regulations, application of certain provi-
sions of title II, and administration) shall apply to this
title in the same manner as they apply to title XVIII.
‘‘(c) TREATMENT
OF AMOUNTS DUE.—In bank-
ruptcy and reorganization proceedings, amounts owed to
the public health plan under this title shall be treated in
the same manner as amounts owed to the Federal Govern-
ment under the Federal Insurance Contributions Act.
107
‘‘SEC. 2265. DETERMINATIONS; APPEALS; PROVIDER REIM-
BURSEMENT REVIEW BOARD.
‘‘(a) 
DETERMINATIONS.—The 
determination 
of
whether an individual is entitled to benefits under this title
and the determination of the amount of benefits under this
title shall be made by the Secretary in accordance with
regulations prescribed by the Secretary.
‘‘(b) HEARINGS.—
‘‘(1) IN GENERAL.—Any individual dissatisfied
with any determination under subsection (a) shall be
entitled to a hearing thereon by the Secretary to the
same extent as is provided in section 205(b) and to
judicial review of the Secretary’s final decision after
such hearing as is provided in section 205(g). Sec-
tions 206(a), 1102, and 1871 (as incorporated by
reference by section 2264) shall not be construed as
authorizing the Secretary to prohibit an individual
from being represented under this subsection by a
person that furnishes the individual, directly or indi-
rectly, with services solely on the basis that the per-
son furnishes the individual with such a service. Any
person that furnishes services to an individual may
not represent an individual under this subsection
with respect to the issue described in section
1879(a)(2) unless the person has waived any rights
for payment from the beneficiary with respect to the
108
services involved in the appeal. If a person furnishes
services to an individual and represents the individ-
ual under this subsection, the person may not im-
pose any financial liability on such individual in con-
nection with such representation.
‘‘(2) LIMITATION.—Notwithstanding paragraph
(1), a hearing shall not be available to an individual
if the amount in controversy is less than $500 and
judicial review shall not be available to the individual
if the amount in controversy is less than $1,000. In
determining the amount in controversy, the Sec-
retary, under regulations, shall allow two or more
claims to be aggregated if the claims involve the de-
livery of similar or involve related services to the
same individual or involve common issues of law and
fact arising from services furnished to two or more
individuals.
‘‘(3) EXPEDITED REVIEW.—In an administra-
tive hearing pursuant to paragraph (1), where the
moving party alleges that there are no material is-
sues of fact in dispute, the administrative law judge
shall make an expedited determination as to whether
any such facts are in dispute and, if not, shall deter-
mine the case expeditiously.
109
‘‘(c) PROVIDER REIMBURSEMENT REVIEW BOARD.—
The provisions of section 1878 (relating to the Provider
Reimbursement Review Board) shall apply under this title
in the same manner as they apply under title XVIII.
‘‘SEC. 2266. PROGRAM INTEGRITY; MISCELLANEOUS PROVI-
SIONS.
‘‘(a) PROGRAM INTEGRITY.—Sections 1124, 1124A,
1126, and 1128 through 1128B (relating to fraud and
abuse) shall apply to this title in the same manner as they
apply to title XVIII.
‘‘(b) TITLE XI PROVISIONS.—The following provi-
sions shall apply to this title in the same manner as they
apply to title XVIII:
‘‘(1) Section 1134 (relating to nonprofit hos-
pital philanthropy).
‘‘(2) Section 1138 (relating to hospital proto-
cols for organ procurement and standards for organ
procurement agencies).
‘‘(c) WITHHOLDING OF PAYMENTS FROM CERTAIN
PROVIDERS.—Subsections (a) through (c) of section 1885
shall apply to this title, the Secretary, and the Public
Health Trust Fund in the same manner as such sub-
sections apply to title XIX, the State agency, and the ap-
propriate State agency paid funds under subsection (c),
respectively.
110
‘‘SEC. 2267. INFORMATION BY TELEPHONE.
‘‘The Secretary shall provide information via a toll-
free telephone number on the public health plan, including
information concerning—
‘‘(1) the requirement of section 2204, and
‘‘(2) low-income assistance under part E.
‘‘SEC. 2268. DEMONSTRATION PROJECT AUTHORITY.
‘‘(a) DEMONSTRATION PROJECT AUTHORITY.—
‘‘(1) IN GENERAL.—The Secretary is authorized
to conduct demonstration projects—
‘‘(A) to improve the delivery and quality of
health care services under this title, and
‘‘(B) to increase the efficiency and effec-
tiveness of methods of payment for such serv-
ices.
Subject to paragraph (2), the Secretary may waive
such requirements of this title as may be necessary
to carry out such demonstration projects.
‘‘(2) LIMITATION.—The Secretary does not
have the authority under paragraph (1)—
‘‘(A) to reduce the benefits available under
part B, or
‘‘(B) to increase the deductibles or coinsur-
ance under part C.
111
‘‘(3) FUNDING.—Grants, payments under con-
tracts, and other expenditures made for demonstra-
tion projects under this subsection—
‘‘(A) shall be made from the Public Health
Trust Fund,
‘‘(B) may be made either in advance or by
way of reimbursement, as may be determined
by the Secretary, and
‘‘(C) shall be made in such installments
and on such conditions as the Secretary finds
necessary to carry out the purpose of this sub-
section.
‘‘(b) CONSTRUCTION.—Except as provided in sub-
section (a), the Secretary is not authorized to waive any
requirement of this title.
‘‘SEC. 2269. INCORPORATION OF MISCELLANEOUS MEDI-
CARE PROVISIONS.
‘‘(a) OVERPAYMENTS ON BEHALF OF INDIVIDUALS
AND SETTLEMENT OF CLAIMS FOR BENEFITS ON BE-
HALF OF DECEASED INDIVIDUALS.—The provisions of
section 1870 (relating to overpayments on behalf of indi-
viduals and settlement of claims for benefits on behalf of
deceased individuals), other than subsection (b), shall
apply under this title in the same manner as they apply
under title XVIII.
112
‘‘(b) LIMITATION ON CERTAIN PHYSICIAN REFER-
RALS.—The provisions of section 1877 (relating to limita-
tion on certain physician referrals) shall apply under this
title in the same manner as they apply under title XVIII.
‘‘PART G—[RESERVED]
‘‘PART H—DEFINITIONS AND MISCELLANEOUS
‘‘SEC. 2281. INCORPORATION OF CERTAIN DEFINITIONS
USED IN OTHER HEALTH-RELATED TITLES.
‘‘(a) INCORPORATION OF MEDICARE DEFINITIONS.—
In this title, the definitions contained in section 1861
apply for purposes of this title in the same manner as they
apply for purposes of title XVIII.
‘‘(b) INCORPORATION
OF CERTAIN EMPLOYMENT-
RELATED DEFINITIONS IN TITLE XXI.—In this title, ex-
cept as otherwise provided, the definitions of the following
terms contained in title XXI apply for purposes of this
title:
‘‘(1) COVERED EMPLOYER HEALTH PLAN.—The
term ‘covered employer health plan’ as defined in
section 2121(b).
‘‘(2) EMPLOYEE.—The term ‘employee’ as de-
fined in section 2181(a)(3).
‘‘(3) FULL-TIME EMPLOYEE.—The term ‘full-
time employee’ as defined in section 2181(b)(1).
113
‘‘(4) LARGE EMPLOYER.—The term ‘large em-
ployer’ as defined in section 2181(c)(3).
‘‘(5) MEDIUM-SIZE EMPLOYER.—The term ‘me-
dium-size employer’ as defined in section 2181(c)(2).
‘‘(6) PART-TIME EMPLOYEE.—The term ‘part-
time employee’ as defined in section 2181(b)(2).
‘‘(7) QUALIFIED EMPLOYER HEALTH PLAN.—
The term ‘qualified employer health plan’ as defined
in section 2121(a).
‘‘(8) SEASONAL OR TEMPORARY EMPLOYEE.—
The term ‘seasonal or temporary employee’ as de-
fined in section 2181(b)(3).
‘‘(9) SMALL EMPLOYER.—The term ‘small em-
ployer’ as defined in section 2181(c)(1).
‘‘(10) VERY
LARGE
EMPLOYER.—The term
‘very 
large 
employer’ 
as 
defined 
in 
section
2181(c)(4).
‘‘(11) WAGES.—The term ‘wages’ as defined in
section 2181(a)(1).
‘‘SEC. 2282. DEFINITIONS RELATING TO FAMILIES.
‘‘In this title:
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the terms ‘family’ and ‘family member’
mean an individual and the individual’s spouse, and
includes all the individual’s children.
114
‘‘(2) TREATMENT
OF
FAMILIES
WITH
MEDI-
CARE BENEFICIARIES FOR COVERAGE PURPOSES.—
In the case of a family with a medicare beneficiary,
if coverage is provided to family members other than
on the basis of employment of a family member, the
beneficiary shall not be treated under this title as a
member of the family for purposes of determining
eligibility for coverage but shall be treated as a sepa-
rate individual. However, except as provided in sec-
tion 2242(b)(2), for purposes of applying part E, a
medicare beneficiary shall continue to be treated as
a member of the beneficiary’s family.
‘‘(3) SPOUSE.—The term ‘spouse’ means, with
respect to an individual, the individual to which the
individual is married.
‘‘(4) MARRIED; UNMARRIED.—Marital status
shall be determined in accordance with section 7703
of the Internal Revenue Code of 1986.
‘‘(5) CHILD.—The term ‘child’ means, with re-
spect to a person who is not a child, an individual—
‘‘(A) who (i) is unmarried and under 18
years of age, (ii) is unmarried and under 23
years of age and a full-time student, or (iii) is
an unmarried, dependent child, regardless of
age, who is incapable of self-support because of
115
mental or physical disability which existed be-
fore age 22;
‘‘(B)(i) who is the child of the person or
the person’s spouse, or
‘‘(ii) who is the legal ward of the person or
the person’s spouse; and
‘‘(C) who is not in the legal custody of an-
other individual.
The Secretary shall establish, by regulation, such
rules as are appropriate with respect to the treat-
ment of foster children, emancipated minors, chil-
dren in the process of adoption, and other unmar-
ried individuals under 23 years of age under similar
circumstances as children for purposes of this title.
‘‘(6) ADULT.—The term ‘adult’ means an indi-
vidual who is not a child.
‘‘SEC. 2283. OTHER DEFINITIONS.
‘‘In this title:
‘‘(1) MEDICARE
BENEFICIARY; 
LOW-INCOME
MEDICARE BENEFICIARY.—
‘‘(A) The term ‘medicare beneficiary’
means an individual entitled to benefits under
part A of title XVIII.
‘‘(B) The term ‘low-income medicare bene-
ficiary’ means a medicare beneficiary whose
116
family adjusted total income (as defined in sec-
tion 2247(2)), as determined based upon an ap-
plication under part E, is less than 200 percent
of the official poverty line applicable to a family
of the size involved.
‘‘(2) OFFICIAL POVERTY LINE.—The term ‘offi-
cial poverty line’ means, for an individual in a fam-
ily, the official poverty line (as defined by the Office
of Management and Budget, and revised annually in
accordance with section 673(2) of the Omnibus
Budget Reconciliation Act of 1981) applicable to a
family of the size involved.
‘‘(3) PREGNANT WOMAN.—The term ‘pregnant
woman’ means a woman who has been certified by
a physician (in a manner specified by the Secretary)
as being pregnant, until the last day of the month
in which the 60-day period (beginning on the date
of termination of the pregnancy) ends.
‘‘(4) PUBLIC HEALTH PLAN.—The term ‘public
health plan’ means the program of health insurance
provided under this title.
117
‘‘SEC. 2284. AUTHORIZING RECIPROCAL COVERAGE OF FOR-
EIGN NATIONALS.
‘‘Effective January 1, 1997, the Secretary may make
benefits available under this title with respect to required
health services for individuals who—
‘‘(1) are not eligible individuals described in
section 2201(d),
‘‘(2) are in the United States, and
‘‘(3) are nationals of a foreign state which pro-
vides health benefits to nationals of the United
States who are in that state,
if the Secretary determines that such benefits with respect
to such services would be available to nationals of the
United States under comparable circumstances in the for-
eign state.
‘‘SEC. 2285. NONAPPLICATION TO RESIDENTS OF PUERTO
RICO AND TERRITORIES.
‘‘The provisions of this title shall not apply to an indi-
vidual who is not a resident of one of the 50 States or
the District of Columbia.’’.
118
TITLE III—COST CONTAINMENT
Subtitle A—Health Care Spending
Amounts
SEC. 301. SPECIFICATION OF OVERALL HEALTH CARE
SPENDING AMOUNTS.
(a) AMOUNT.—For purposes of this title, with respect
to each year (beginning with 1994), the overall health care
spending amount (specified under this section) is the prod-
uct of—
(1) the average per capita health care expendi-
tures (identified in subsection (c)) in previous year,
as estimated by the Secretary, multiplied by the ap-
plicable adjustment factor for the year involved spec-
ified in subsection (b), and
(2) the population of the United States (exclud-
ing medicare beneficiaries), as projected by the Sec-
retary of Commerce as of July 1 of the year in-
volved.
(b) APPLICABLE ADJUSTMENT FACTOR.—The appli-
cable adjustment factor under this subsection for each
year is 1 plus the sum (expressed as a fraction) of—
(1) the average annual percentage increase in
the gross domestic product (in current dollars, as
published by the Secretary of Commerce) during the
119
3-year period ending with the second previous year;
plus
(2)(A) for 1995, 3.5 percentage points,
(B) for 1996, 2.5 percentage points,
(C) for 1997, 1.5 percentage points,
(D) for 1998, 0.5 percentage point, and
(E) for each year thereafter, 0 percentage
points.
(c) SERVICES COVERED.—The average per capita
health care expenditures shall be based on the expendi-
tures (including expenditures for deductibles and coinsur-
ance) for required and other health services (as defined
in subsection (d)) expended in the United States, other
than with respect to individuals entitled to benefits under
part A or B of title XVIII of the Social Security Act.
(d) REQUIRED AND OTHER HEALTH SERVICES DE-
FINED.—In this subtitle, the term ‘‘required and other
health services’’ means required health services, specified
in section 2211(a)(2) of the Social Security Act, and also
includes prescription drugs, biologicals, and insulin.
SEC. 302. ESTABLISHMENT OF FEDERAL HEALTH CARE
COST CONTAINMENT COMMISSION.
(a) IN GENERAL.—There is hereby established a
Federal Health Care Cost Containment Commission (in
this subtitle referred to as the ‘‘FHCC’’). The FHCC shall
120
be composed of 11 members, appointed by the President
by and with the advice and consent of the Senate. The
membership of the FHCC shall include individuals with
national recognition for their expertise in health econom-
ics, health insurance, provider reimbursement, and related
fields. In appointing individuals, the President shall assure
representation of labor organizations, employers, health
care providers, and consumers of health services.
(b) TERMS.—Members of the FHCC shall be ap-
pointed to serve for terms of 3 years, except that the terms
of the members first appointed shall be staggered so that
the terms of no more than 4 members expire in any year.
Individuals appointed to fill a vacancy created in the
FHCC shall be appointed for the remainder of the term.
(c) DUTIES RELATING TO ESTABLISHMENT OF PAY-
MENT RATES.—
(1) ALLOCATION
OF
OVERALL
SPENDING
BY
STATE.—
(A) IN GENERAL.—Each year the FHCC
shall apportion the overall health care spending
amount specified under section 301 for required
and other health services among the States.
Subject to subparagraph (B), such apportion-
ment shall be based on the populations of the
States, adjusted to reflect differences in age
121
and health status of the population and the
cost-of-living among the States and such other
considerations as the FHCC deems appropriate,
including such adjustment as will encourage the
provision of necessary services in underserved
areas.
(B) PHASE-IN.—During the 10-year period
beginning in 1994—
(i) initially the apportionment shall
reflect the current variations in per capita
health care expenditures among the States,
(ii) gradually the apportionment shall
reflect to a lesser degree such current vari-
ations, and
(iii) at the end of the period the ap-
portionment shall reflect only the factors
and considerations described in subpara-
graph (A).
(2) MONITORING STATE EXPENDITURES.—The
FHCC shall monitor the compliance of each State
with the overall health care spending amount appor-
tioned under paragraph (1) for each year and over
each 3-year period.
(3) APPROVAL OF PAYMENT RATES IN CERTAIN
STATES WITHOUT A STATE HEALTH COMMISSION OR
122
UNABLE
TO
CONTROL
HEALTH
CARE
EXPENDI-
TURES.—
(A) IN GENERAL.—In the case of a State
described in subparagraph (B)—
(i) the FHCC shall conduct negotia-
tions with professional and other associa-
tions representing the types of health care
providers in order to apportion the overall
health care spending apportioned to the
States under paragraph (1) among the dif-
ferent classes of providers (as defined in
subsection (f));
(ii) the Secretary shall establish, for
each class of provider for the year involved
and subject to approval by the FHCC
under clause (iii), payment rates for re-
quired and other health services consistent
with the limitation on overall health care
spending for such services specified in sub-
paragraph (B)(ii) and reflecting such re-
duction in payment rates as may be nec-
essary to reduce spending by an amount
equal to the amount by which the State
has exceeded such spending limitation; and
123
(iii) the FHCC shall review and, if
they meet the standards described in sec-
tion 304(a), approve the payment rates es-
tablished by the Secretary under clause (ii)
or, if they do not, disapprove such rates.
(B) STATES
COVERED.—A State is de-
scribed in this subparagraph if the FHCC de-
termines that the State—
(i) has failed to establish a State
Health Commission in accordance with sec-
tion 303(a), or
(ii) has permitted over a 3-consecu-
tive-year period overall health care spend-
ing for required and other health services
in the State to exceed the sum of—
(I) the cumulative overall health
care spending amount apportioned to
the State under paragraph (1) for
that period and
(II) any cumulative difference be-
tween a State’s overall health care
spending for required and other
health services in previous periods and
spending amounts apportioned to the
124
State under paragraph (1) for those
periods,
until such time as the FHCC determines that
such a State Health Commission has been es-
tablished and that the State has provided the
FHCC with satisfactory assurances that overall
health care spending for required and other
health services in the State will not exceed the
overall health care spending amount appor-
tioned to the State under paragraph (1).
(C) PAYMENT BASIS.—The payment rates
established under subparagraph (A)(ii) shall be
based on payment methodologies (including
payment for inpatient hospital services on the
basis of per discharge payments relating to di-
agnosis-related groups and payment for physi-
cians’ services based on a resource-based rel-
ative value scale) used under title XVIII of the
Social Security Act. In establishing such rates,
the Secretary shall consult with the Prospective
Payment Assessment Commission and with the
Physician Payment Review Commission, as ap-
propriate.
(D) APPLICATION OF RATES.—
125
(i) IN GENERAL.—Except as provided
in clause (ii), the rates established under
subparagraph (B)(ii) shall be the rate that
may be charged by providers under quali-
fied employer health plans or under the
public health plan.
(ii) SPECIAL TREATMENT OF PHYSI-
CIANS’ SERVICES.—In applying subpara-
graph (E) in the case of physicians’ serv-
ices, the rate specified under this para-
graph shall be the same percentage above
the rate otherwise computed under this
paragraph as the percentage by which the
limiting charge under section 1848(g) of
the Social Security Act exceeds the recog-
nized payment amount (as defined in sec-
tion 1848(g)(2)(D) of such Act).
(E) ENFORCEMENT.—Any health care pro-
vider that imposes a charge in excess of the
rate specified under this paragraph shall be in-
eligible for a period (specified by the Secretary)
of not more than 5 years to provide services for
which payment may be made under title XVIII,
XIX, or XXII of the Social Security Act.
126
(4) APPEALS
OF
PAYMENT
RATES
ESTAB-
LISHED BY STATE HEALTH COMMISSIONS.—
(A) PROCESS.—The FHCC shall establish
a process for receipt of, and action upon, griev-
ances concerning payment rates established by
a State Health Commission under section 303.
Such process shall provide for disapproval of
such a rate if the rate fails to meet the stand-
ards for approval of such a rate under section
304(a).
(B) RATE ADJUSTMENTS.—In the case of
such a disapproval, the SHC shall revise rates
consistent with such standards.
(d) PERIODIC REPORTS.—The FHCC shall report to
the Congress and the public periodically (not less often
than annually) on the effect of this title on the delivery
of required health care services.
(e) MISCELLANEOUS.—
(1) AUTHORITY.—The FHCC shall have the
authority specified in clauses (i) through (vi) of sec-
tion 1886(e)(6)(C) of the Social Security Act, but
(under such clause (i)) not subject to the approval
of the Director of the Office.
(2) COMPENSATION.—While serving on the
business of the FHCC (including traveltime), a
127
member of the FHCC shall be entitled to compensa-
tion at the per diem equivalent of the rate provided
for level IV of the Executive Schedule under section
5315 of title 5, United States Code; and while so
serving away from home and his regular place of
business, a member may be allowed travel expenses,
as authorized by the Chairman of the FHCC. Physi-
cians serving as personnel of the FHCC may be pro-
vided a physician comparability allowance by the
FHCC in the same manner as Government physi-
cians may be provided such an allowance by an
agency under section 5948 of title 5, United States
Code, and for such purpose subsection (i) of such
section shall apply to the FHCC in the same manner
as it applies to the Tennessee Valley Authority.
(3) ACCESS TO INFORMATION, ETC.—The provi-
sions of subparagraphs (F) and (H) of section
1886(e)(6) of the Social Security Act shall apply to
the FHCC in the same manner as they apply to the
Prospective Payment Assessment Commission.
(4) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated, from the
Public Health Trust Fund (established under section
2233 of the Social Security Act) such sums as may
be necessary to carry out this section.
128
(f) CLASS OF PROVIDER DEFINED.—In this subtitle,
the term ‘‘class of provider’’ means hospitals, physicians,
and such other classes of health care providers (which may
include a prepaid system of health care delivery) as the
FHCC specifies in regulations.
(g) SECRETARY.—In this subtitle, the term ‘‘Sec-
retary’’ means the Secretary of Health and Human Serv-
ices.
SEC. 303. STATE HEALTH RATE COMMISSIONS.
(a) IN GENERAL.—Each State shall establish a State
Health Commission (each in this section referred to as a
‘‘SHC’’) to carry out duties under this section. If a State
fails to establish such a SHC, the FHCC shall perform
functions of such a Commission under section 302(c)(3).
(b) COMPOSITION AND TERMS.—
(1) COMPOSITION.—Each SHC shall be com-
posed of not to exceed 11 members, appointed by the
chief executive officer of the State. The membership
of each SHC shall include individuals with recogni-
tion for their expertise in health economics, health
insurance, provider reimbursement, and related
fields. In appointing individuals, the chief executive
officer shall assure representation of labor organiza-
tions, employers, health care providers, and consum-
ers of health services.
129
(2) TERMS.—Members of each SHC shall be
appointed to serve for terms of 3 years, except that
the terms of the members first appointed shall be
staggered so that the terms of no more than 40 per-
cent of the number of members expire in any year.
Individuals appointed to fill a vacancy created in an
SHC shall be appointed for the remainder of the
term.
(c) DUTIES.—
(1) ALLOCATION
OF
OVERALL
SPENDING
BY
STATE.—Each year each SHC shall apportion the
portion of the health care spending amount appor-
tioned to the State under section 302(c)(1) among
required and other health services furnished by the
different classes of providers.
(2) ESTABLISHMENT OF PAYMENT RATES.—
(A) IN GENERAL.—Each year each SHC
shall establish for each such class of provider
payment rates for required and other health
services (as defined in section 301(d)) furnished
in that State in that year, which meet the
standards for approval under section 304(a).
(B) REVISION OF RATES.—If the FHCC
determines that particular payment rates do not
meet the standard specified under section
130
304(a)(2) and must be increased to meet such
standard, the SHC—
(i) shall increase those payment rates
so as to meet such standard, and
(ii) shall provide for such decrease in
other payment rates as may be necessary
to assure that the standard described in
section 304(a)(1) continues to be met (tak-
ing into account the increase provided
under clause (i)).
(3) USE OF REGIONAL COMMISSIONS IN CARRY-
ING OUT DUTIES.—In carrying out duties of an SHC
under this subsection, a State may establish regional
commissions to carry out the functions of the SHC
on a local basis, within the allocation provided to the
region by the SHC.
SEC. 304. STANDARD FOR PAYMENT RATES.
(a) IN GENERAL.—The FHCC shall approve rates es-
tablished by a State Health Commission (or regional com-
mission) under section 303(c)(2), or the Secretary under
section 302(c)(3)(A)(ii), for a class of provider only if the
FHCC determines that—
(1) the rates, if applied in the aggregate by all
qualified employer health plans and by the public
health plan during the year in the State, would re-
131
sult in total expenditures for required services fur-
nished by that class of provider that are consistent
with the amount distributed under section 303(c)(1)
or 302(c)(3)(A)(i), as the case may be, for services
of that class of provider; and
(2) the rates are reasonable and adequate, con-
sistent with subsection (b).
(b) TEST OF REASONABLENESS AND ADEQUACY.—
For purposes of applying subsection (a)(2) with respect
to payment rates for required and other health services
furnished by a class of provider—
(1) ACCESS AND QUALITY.—Payment rates are
not considered to be reasonable and adequate if pa-
tients will not have reasonable access to services of
high quality.
(2) AGGREGATE
ADEQUACY.—The determina-
tion of reasonableness and adequacy of payment
rates shall be made based on the aggregate rates.
(3) EQUITABLE
RATE
DISTRIBUTION.—Pay-
ment rates are not considered to be reasonable un-
less they are set equitably among all purchasers
without undue discrimination.
(4) APPROPRIATE
SETTING.—Payment rates
are not considered to be reasonable and adequate
unless the rates—
132
(A) encourage services to be provided to
patients in the most cost effective environment
that does not endanger patients’ well-being, and
(B) include incentives to contain health
care costs.
The payment rates may be designed to encourage the pro-
vision of necessary services in underserved areas.
SEC. 305. APPLICATION OF RATES UNDER MEDICARE AND
PUBLIC PROGRAMS.
Payment rates approved this subtitle shall apply both
under the medicare program under title XVIII of the So-
cial Security Act and under the public health plan under
title XXII of such Act.
Subtitle B—Administrative
Simplification
SEC. 321. REQUIREMENT FOR UNIFORM HEALTH CLAIMS
CARDS.
(a) UNIFORM HEALTH CLAIMS CARDS.—
(1) REQUIREMENT.—Each health benefit plan
(as defined in section 326(a)) shall issue a health
claims card that meets the requirements of sub-
section (c) for each individual who is entitled to ben-
efits under the plan and who is residing in the Unit-
ed States. Such card shall be issued to the individual
involved or, in the case of an individual enrolled as
133
a dependent of another individual, to that other indi-
vidual.
(2) DEADLINE FOR APPLICATION OF REQUIRE-
MENT.—The deadline specified under this paragraph
for the requirement under paragraph (1) is 6
months after the date the standards are established
under subsection (c).
(b) ENFORCEMENT THROUGH CIVIL MONEY PEN-
ALTIES.—
(1) IN GENERAL.—In the case of a health bene-
fit plan that fails to issue a health claims card in ac-
cordance with subsection (a)(1), the plan is subject
to a civil money penalty of not to exceed $100 for
each such violation. The provisions of section 1128A
of the Social Security Act (other than subsections
(a) and (b)) shall apply to a civil money penalty
under this subsection in the same manner as such
provisions apply to a penalty or proceeding under
section 1128A(a) of such Act.
(2) EFFECTIVE DATE.—No penalty may be im-
posed under paragraph (1) for any failure occurring
before the deadline specified in subsection (a)(2).
(c) UNIFORM HEALTH CLAIMS CARDS.—
(1) IN GENERAL.—The Secretary shall establish
standards consistent with this subsection respecting
134
the form and information to be contained on uni-
form health claims cards (for purposes of subsection
(a)).
(2) ELECTRONIC.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), the card shall be in a form similar
to that of a credit card and shall have, encoded
in electronic form—
(i) the identity of the individual,
(ii) the health benefit plan in which
the individual is enrolled, and
(iii) the telephone number or numbers
to be used for the verification electronically
of entitlement to benefits under the plan
under section 322 and for the submission
electronically of claims under the plan
under section 323.
(B) USE
OF
ELECTRONIC
READ-AND-
WRITE CARDS.—The Secretary may provide for
cards in a electronic form that permits informa-
tion on the card to be readily changed. Such in-
formation may include information relating to
the health coverage status of the individual and
the medical history of the individual.
135
(C) PERSONAL
IDENTIFIER.—For pur-
poses of subparagraph (A) and for purposes of
claims processing and related purposes under
section 323, the Social Security account number
of the individual or, in the case of an infant or
other individual to whom such a number has
not been issued, such a Social Security account
number of a parent or guardian or other num-
ber as the Secretary shall specify, shall be used
as the personal identifier for the individual.
(3) 
ADDITIONAL
INFORMATION.—The 
card
shall include such additional information, in elec-
tronic or other form, as the Secretary may require
to carry out the purposes of this Act. In addition,
the health benefit plan issuing the card may include
such additional information on the card as the plan
desires, subject to such limitations as the Secretary
may provide.
(4) DEADLINE.—The Secretary shall first es-
tablish the standards for uniform health claims
cards under this subsection by not later than 12
months after the date of the enactment of this Act.
(d) APPLICATION TO MEDICARE AND MEDICAID PRO-
GRAMS.—
136
(1) MEDICARE PROGRAM.—The Secretary shall
provide, in regulations promulgated to carry out the
medicare program, that identification cards issued
under that program are modified to the extent re-
quired to conform to the standards established under
subsection (c), by not later than the deadline speci-
fied in subsection (a)(2).
(2) STATE MEDICAID PLANS.—As a condition
for the approval of a State plan under the medicaid
program, effective for calendar quarters beginning
on or after the deadline specified in subsection
(a)(2), each such plan shall provide, in accordance
with regulations of the Secretary, that identification
cards issued under the plan are modified to the ex-
tent required to conform to the requirements of sub-
section (c).
SEC. 322. REQUIREMENT FOR ENTITLEMENT VERIFICA-
TION SYSTEM.
(a) IN GENERAL.—
(1) REQUIREMENT.—Each health benefit plan
shall provide for an electronic system, that is cer-
tified by the Secretary as meeting the standards es-
tablished under subsection (c), for the verification of
an individual’s entitlement to benefits under such
plan.
137
(2) DEADLINE FOR APPLICATION OF REQUIRE-
MENT.—The deadline specified under this paragraph
for the requirement under paragraph (1) is 6
months after the date the standards are established
under subsection (c).
(b) ENFORCEMENT THROUGH CIVIL MONEY PEN-
ALTIES.—
(1) IN GENERAL.—In the case of a health bene-
fit plan that fails to provide for an electronic ver-
ification system that is certified by the Secretary as
meeting the standards established under subsection
(c), the plan is subject to a civil money penalty of
not to exceed $100 for each day in which such fail-
ure persists. The provisions of section 1128A of the
Social Security Act (other than subsections (a) and
(b)) shall apply to a civil money penalty under this
subsection in the same manner as such provisions
apply to a penalty or proceeding under section
1128A(a) of such Act.
(2) EFFECTIVE DATE.—No penalty may be im-
posed under paragraph (1) for any failure occurring
before the deadline specified in subsection (a)(2).
(c) STANDARDS FOR ENTITLEMENT VERIFICATION
SYSTEMS.—
138
(1) IN GENERAL.—The Secretary shall estab-
lish standards consistent with this subsection re-
specting the requirements for certification of entitle-
ment verification systems.
(2) INFORMATION AVAILABLE.—Such standards
shall require a system to provide information, with
respect to individuals, concerning the following:
(A) The specific benefits to which the indi-
vidual is entitled under the plan.
(B) Current status of the individual with
respect 
to 
fulfillment 
of 
deductibles,
copayments, and out-of-pocket limits on cost-
sharing.
(C) Restrictions on providers who may pro-
vide covered services, including utilization con-
trols (such as preadmission certification).
(3) COORDINATION
OF
BENEFIT
INFORMA-
TION.—Such standards shall require a system to
provide for the transfer among health benefit plans
of appropriate information in determining liability in
cases in which benefits may be payable under two or
more such plans.
(4) FORM OF INQUIRY.—Each verification sys-
tem shall be capable of accepting inquiries under
this subsection from health care providers (and, to
139
the extent provided under paragraph (3), from other
health benefit plans) in a variety of electronic and
other forms, including—
(A) through electronic transmission of in-
formation on the uniform health claims card (in
a manner similar to that for verification of
credit card purchases),
(B) through the use of a touch-tone tele-
phone line, and
(C) through the use of a computer modem.
The system shall also provide, for an additional fee,
for the acceptance of inquiries in a nonelectronic
form.
(5) FORM OF RESPONSE.—Each such system
shall be capable of responding to such inquiries
under this subsection in a variety of electronic and
other forms, including—
(A) through modem transmission of infor-
mation,
(B) through computer synthesized voice
communication, and
(C) through transmission of information to
a facsimile (fax) machine.
The system shall also provide, for an additional fee,
for the response to inquiries in a nonelectronic form.
140
(6) LIMITATION
ON
FEES.—A health benefit
plan may not impose a fee for the acceptance or re-
sponse to an inquiry under this subsection except
where 
the 
acceptance 
or 
response 
is 
in 
a
nonelectronic form.
(7) PUBLIC
DOMAIN
SOFTWARE
TO
PROVID-
ERS.—The Secretary shall provide for the develop-
ment, and shall make available without charge to
health service providers and health benefit plans,
such computer software as will enable—
(A) such providers to make inquiries, and
receive responses, electronically respecting the
eligibility and benefits of an individual under
health benefit plans, and
(B) such plans to make inquiries, and re-
ceive responses, electronically respecting liability
of other plans for the provision or payment of
benefits.
(8) DEADLINE.—The Secretary shall first es-
tablish the standards under this subsection (and
shall develop and make available the software under
paragraph (7)) by not later than 12 months after
the date of the enactment of this Act.
(d) APPLICATION TO MEDICARE AND MEDICAID PRO-
GRAMS.—
141
(1) MEDICARE PROGRAM.—The Secretary shall
provide, in regulations promulgated to carry out the
medicare program, that there is established an enti-
tlement verification system that meets the standards
established under subsection (c), by not later than
the deadline specified in subsection (a)(2).
(2) STATE MEDICAID PLANS.—As a condition
for the approval of a State plan under the medicaid
program, effective for calendar quarters beginning
on or after the deadline specified in subsection
(a)(2), each such plan shall provide, in accordance
with regulations of the Secretary, that there is es-
tablished an entitlement verification system that
meets the standards established under subsection
(c).
SEC. 323. REQUIREMENTS FOR UNIFORM CLAIMS AND
ELECTRONIC CLAIMS DATA SET.
(a) REQUIREMENTS.—
(1) SUBMISSION OF CLAIMS.—Each health serv-
ice provider that furnishes services in the United
States for which payment may be made under a
health benefit plan shall submit any claim for pay-
ment for such services only in a form and manner
consistent with standards established under sub-
section (c).
142
(2) ACCEPTANCE OF CLAIMS.—A health benefit
plan may not reject a claim for payment under the
plan on the basis of the form or manner in which
the claim is submitted if the claim is submitted in
accordance with the standards established under
subsection (c).
(3) EFFECTIVE
DATE.—This subsection shall
apply to claims for services furnished on or after the
date that is 6 months after the date standards are
established under subsection (c).
(b) ENFORCEMENT THROUGH CIVIL MONEY PEN-
ALTIES.—
(1) IN GENERAL.—
(A) PROVIDERS.—In the case of a health
service provider that submits a claim in viola-
tion of subsection (a)(1), the provider is subject
to a civil money penalty of not to exceed $100
(or, if greater, the amount of the claim) for
each such violation.
(B) PLANS.—In the case of a health bene-
fit plan that rejects a claim in violation of sub-
section (a)(2), the plan is subject to a civil
money penalty of not to exceed $100 (or, if
greater, the amount of the claim) for each such
violation.
170
subsection (c)(4), or the employees of a small em-
ployer.
‘‘(b) CARRIER; HEALTH MAINTENANCE ORGANIZA-
TION; AND OTHER DEFINITIONS RELATING
TO CAR-
RIERS.—In this part:
‘‘(1) CARRIER.—The term ‘carrier’ means any
person that offers a health plan, whether through in-
surance or otherwise, including a licensed insurance
company, a prepaid hospital or medical service plan,
a health maintenance organization, a self-insurer
carrier, and a multiple employer welfare arrange-
ment.
‘‘(2) HEALTH MAINTENANCE ORGANIZATION.—
The term ‘health maintenance organization’ has the
meaning given the term ‘eligible organization’ in sec-
tion 1876(b).
‘‘(3) SELF-INSURER CARRIER.—The term ‘self-
insurer carrier’ means a carrier that is not a li-
censed insurance company, a prepaid hospital or
medical service plan, or a health maintenance orga-
nization, that offers a health plan directly with re-
spect to an employment-related group.
‘‘(4) SMALL
EMPLOYER
CARRIER.—The term
‘small employer carrier’ means any carrier which of-
fers small employer health plans.