I
104TH CONGRESS
2D SESSION
H. R. 3699
To establish a demonstration project to authorize certain covered beneficiaries
under the military health care system (including the dependents of active
duty military personnel and retired members and their dependents) to
enroll in the Federal Employees Health Benefits program and to ensure
their future health security through the use of medical savings accounts.
IN THE HOUSE OF REPRESENTATIVES
JUNE 20, 1996
Mr. STEARNS (for himself, Mr. MICA, and Mr. CANADY of Florida) introduced
the following bill; which was referred to the Committee on National Secu-
rity, and in addition to the Committees on Government Reform and Over-
sight, and Ways and Means, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
A BILL
To establish a demonstration project to authorize certain
covered beneficiaries under the military health care sys-
tem (including the dependents of active duty military
personnel and retired members and their dependents)
to enroll in the Federal Employees Health Benefits pro-
gram and to ensure their future health security through
the use of medical savings accounts.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. DEMONSTRATION PROJECT FOR IMPROVED
HEALTH CARE ACCESS FOR MILITARY COV-
ERED BENEFICIARIES THROUGH THE FED-
ERAL EMPLOYEES HEALTH BENEFITS PRO-
GRAM AND MEDICAL SAVINGS ACCOUNTS.
(a) 
PARTICIPATION
IN
FEDERAL
EMPLOYEES
HEALTH BENEFITS PROGRAM.—The Secretary of De-
fense shall conduct a demonstration project in at least one
region of the TRICARE program to provide covered bene-
ficiaries described in subsection (b) with the option to re-
ceive health care prescribed by section 1077 of title 10,
United States Code, through the Federal Employees
Health Benefits program under chapter 89 of title 5, Unit-
ed States Code, in addition to the other health care op-
tions available to the covered beneficiaries. The Secretary
shall carry out the demonstration project during the two-
year period beginning on the date covered beneficiaries
first enroll under the project.
(b) PERSONS ELIGIBLE FOR PARTICIPATION.—Eligi-
bility to participate in the demonstration project is limited
to covered beneficiaries under chapter 55 of title 10, Unit-
ed States Code, who—
(1) reside in the TRICARE region in which the
demonstration project is conducted, but outside of
the enrollment catchment area used for TRICARE
Prime; or
(2) reside in the TRICARE region in which the
demonstration project is conducted and are entitled
to hospital insurance benefits under part A of title
XVIII of the Social Security Act (42 U.S.C. 1395c
et seq.).
(c) SPECIAL RULE FOR MEDICARE PARTICIPANTS.—
The payment limitations contained in section 1086(d)(3)
of title 10, United States Code, shall apply in the case
of covered beneficiaries described in subsection (b)(2) who
are not eligible to participate in the TRICARE or
CHAMPUS programs, by reason of section 1086(d)(1) of
title 10, United States Code, but who are eligible to par-
ticipate in the demonstration project.
(d) USE OF MEDICAL SAVINGS ACCOUNTS.—In the
case of participants in the demonstration project, the Sec-
retary of the Treasury shall permit a participant during
the demonstration project to take as a credit against the
tax imposed under the Internal Revenue Code of 1986 for
a taxable year an amount equal to 25 percent of the
amount paid in cash during such year by or on behalf of
the participant to a medical savings account, subject to
such restrictions on the total amount of the cash contribu-
tion and such other requirements as the Secretary may
prescribe.
(e) DEFINITIONS.—For purposes of this section:
(1) COVERED BENEFICIARIES.—The term ‘‘cov-
ered beneficiary’’ means a beneficiary under chapter
55 of title 10, United States Code, other than a ben-
eficiary under section 1074(a) of such title. Such
term includes—
(A) the spouse and children of a member
of the Armed Forces on active duty; and
(B) members and former members of the
uniformed services who are entitled to retired or
retainer pay, or equivalent pay, and their de-
pendents.
(2) TRICARE.—The term ‘‘TRICARE’’ means
the managed health care program that is established
by the Secretary of Defense under the authority of
chapter 55 of title 10, United States Code, prin-
cipally section 1097 of such title, and includes the
competitive selection of contractors to financially un-
derwrite the delivery of health care services under
the Civilian Health and Medical Program of the
Uniformed Services.
(3) MEDICAL
SAVINGS
ACCOUNT.—The term
‘‘medical savings account’’ means a trust created or
organized in the United States exclusively for the
purpose of paying the qualified medical expenses of
the individual for whose benefit the trust is estab-
lished.
(f) REPORT ON IMPLEMENTATION PLAN.—Not later
than six months after the date of the enactment of this
Act, the Secretary of Defense shall submit a report to
Congress containing the plan prepared by the Secretary
of Defense and the Secretary of the Treasury to imple-
ment the demonstration project and to permit participants
to maintain and use medical savings accounts.
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