Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Public Health Service Act (PHSA) to mandate: (1) a set of rules for determining the actuarial value of the coverage offered by a plan or group health insurance coverage; and (2) a target actuarial value. Mandates model regulations specifying standards for making qualified group health plans available to small employers. Allows a State to implement more stringent standards, so long as the State standards do not prevent the offering of at least one plan that provides standard coverage. Amends the Internal Revenue Code to impose taxes on the failure to comply with requirements.
Revises Medicare provisions to cover: (1) annual pap smears, pelvic exams, and mammography screening for women, with a coinsurance waiver; and (2) insulin pumps for the computerized delivery of insulin to certain Type I diabetics in lieu of multiple daily manual insulin injections.
Authorizes appropriations to carry out the healthy start program under the PHSA Establishes: (1) a comprehensive school health education and prevention program for elementary and secondary schools; and (2) a comprehensive early childhood health education program.
Sets forth provisions concerning a patient's right to decline medical treatment.
Establishes: (1) a program to provide general medicine practice grants; (2) the Trust Fund for Medical Treatment Outcomes Research; (3) a State-based medical error reporting system; and (4) the National Fund for Health Research.
Provides a tax credit for qualified long-term care premiums.
[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 24 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 24
To provide improved access to health care, enhance informed individual
choice regarding health care services, lower health care costs through
the use of appropriate providers, improve the quality of health care,
improve access to long-term care, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 22, 2001
Mr. Lott (for Mr. Specter) introduced the following bill; which was
read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To provide improved access to health care, enhance informed individual
choice regarding health care services, lower health care costs through
the use of appropriate providers, improve the quality of health care,
improve access to long-term care, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Health Care
Assurance Act of 2001''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--EXPANDED MEDICAID COVERAGE FOR LOW-INCOME INDIVIDUALS
Sec. 101. Expanded medicaid coverage for low-income individuals.
TITLE II--EXPANSION OF THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM
Sec. 201. Increase in income eligibility.
TITLE III--EXPANDED HEALTH SERVICES FOR DISABLED INDIVIDUALS
Sec. 301. Coverage of community-based attendant services and supports
under the medicaid program.
Sec. 302. Grants to develop and establish real choice systems change
initiatives.
Sec. 303. State option for eligibility for individuals.
Sec. 304. Studies and reports.
Sec. 305. Task force on financing of long-term care services.
TITLE IV--HEALTH CARE INSURANCE COVERAGE
Subtitle A--General Provisions
Sec. 401. Amendments to the Employee Retirement Income Security Act of
1974.
Sec. 402. Amendments to the Public Health Service Act relating to the
group market.
Sec. 403. Amendment to the Public Health Service Act relating to the
individual market.
Sec. 404. Effective date.
Subtitle B--Tax Provisions
Sec. 411. Enforcement with respect to health insurance issuers.
Sec. 412. Enforcement with respect to small employers.
Sec. 413. Enforcement by excise tax on qualified associations.
Sec. 414. Deduction for health insurance costs of self-employed
individuals.
Sec. 415. Amendments to COBRA.
TITLE V--PRIMARY AND PREVENTIVE CARE SERVICES
Sec. 501. Improvement of medicare preventive care services.
Sec. 502. Authorization of appropriations for healthy start program.
Sec. 503. Reauthorization of certain programs providing primary and
preventive care.
Sec. 504. Comprehensive school health education program.
Sec. 505. Comprehensive early childhood health education program.
Sec. 506. Adolescent family life and abstinence.
TITLE VI--PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT
Sec. 601. Patient's right to decline medical treatment.
TITLE VII--PRIMARY AND PREVENTIVE CARE PROVIDERS
Sec. 701. Increased medicare reimbursement for physician assistants,
nurse practitioners, and clinical nurse
specialists.
Sec. 702. Requiring coverage of certain nonphysician providers under
the medicaid program.
Sec. 703. Medical student tutorial program grants.
Sec. 704. General medical practice grants.
TITLE VIII--SAFE AND COST-EFFECTIVE MEDICAL TREATMENT
Sec. 801. Enhancing investment in cost-effective methods of health
care.
Sec. 802. Medical Errors Reduction.
TITLE IX--TAX INCENTIVES FOR PURCHASE OF QUALIFIED LONG-TERM CARE
INSURANCE
Sec. 901. Credit for qualified long-term care premiums.
Sec. 902. Inclusion of qualified long-term care insurance in cafeteria
plans and flexible spending arrangements.
Sec. 903. Exclusion from gross income for amounts received on
cancellation of life insurance policies and
used for qualified long-term care insurance
contracts.
Sec. 904. Use of gain from sale of principal residence for purchase of
qualified long-term health care insurance.
TITLE X--NATIONAL FUND FOR HEALTH RESEARCH
Sec. 1001. Establishment of Fund.
TITLE I--EXPANDED MEDICAID COVERAGE FOR LOW-INCOME INDIVIDUALS
SEC. 101. EXPANDED MEDICAID COVERAGE FOR LOW-INCOME INDIVIDUALS.
(a) Required Coverage of Individuals up to 133 Percent of
Poverty.--Section 1902(a)(10)(A)(i) of the Social Security Act (42
U.S.C. 1396a(a)(10)(A)(i)) is amended--
(1) by striking ``or'' at the end of subclause (VI);
(2) by inserting ``or'' after the semicolon at the end of
subclause (VII); and
(3) by adding at the end the following:
``(VIII) whose family income does
not exceed 133 percent of the income
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;''.
(b) Optional Coverage of Individuals up to 200 Percent of
Poverty.--Section 1902(a)(10)(A)(i)(VIII) of the Social Security Act,
as added by subsection (a)(3), is amended by inserting ``(200 percent,
at State option)'' after ``133 percent''.
(c) Effective Date.--
(1) In general.--The amendments made by this section take
effect on October 1, 2001.
(2) Extension if state law amendment required.--In the case
of a State plan under title XIX of the Social Security Act
which the Secretary of Health and Human Services determines
requires State legislation in order for the plan to meet the
additional requirements imposed by the amendments made by this
section, the State plan shall not be regarded as failing to
comply with the requirements of such title solely on the basis
of its failure to meet these additional requirements before the
first day of the first calendar quarter beginning after the
close of the first regular session of the State legislature
that begins after the date of the enactment of this Act. For
purposes of the previous sentence, in the case of a State that
has a 2-year legislative session, each year of the session is
considered to be a separate regular session of the State
legislature.
TITLE II--EXPANSION OF THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM
SEC. 201. INCREASE IN INCOME ELIGIBILITY.
(a) Definition of Low-Income Child.--Section 2110(c)(4) of the
Social Security Act (42 U.S.C. 42 U.S.C. 1397jj(c)(4)) is amended by
striking ``200'' and inserting ``235''.
(b) Effective Date.--The amendment made by subsection (a) takes
effect on October 1, 2001.
TITLE III--EXPANDED HEALTH SERVICES FOR DISABLED INDIVIDUALS
SEC. 301. COVERAGE OF COMMUNITY ATTENDANT SERVICES AND SUPPORTS UNDER
THE MEDICAID PROGRAM.
(a) Required Coverage for Individuals Entitled to Nursing Facility
Services or Eligible for Intermediate Care Facility Services for the
Mentally Retarded.--Section 1902(a)(10)(D) of the Social Security Act
(42 U.S.C. 1396a(a)(10)(D)) is amended--
(1) by inserting ``(i)'' after ``(D)'';
(2) by adding ``and'' after the semicolon; and
(3) by adding at the end the following:
``(ii) subject to section 1935, for the inclusion
of community attendant services and supports for any
individual who is eligible for medical assistance under
the State plan and with respect to whom there has been
a determination that the individual requires the level
of care provided in a nursing facility or an
intermediate care facility for the mentally retarded
(whether or not coverage of such intermediate care
facility is provided under the State plan) and who
requires such community attendant services and supports
based on functional need and without regard to age or
disability;''.
(b) Medicaid Coverage of Community Attendant Services and
Supports.--
(1) In general.--Title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) is amended--
(A) by redesignating section 1935 as section 1936;
and
(B) by inserting after section 1934 the following:
``community attendant services and supports
``Sec. 1935. (a) Definitions.--In this title:
``(1) Community attendant services and supports.--
``(A) In general.--The term `community attendant
services and supports' means attendant services and
supports furnished to an individual, as needed, to
assist in accomplishing activities of daily living,
instrumental activities of daily living, and health-
related functions through hands-on assistance,
supervision, or cueing--
``(i) under a plan of services and supports
that is based on an assessment of functional
need and that is agreed to by the individual
or, as appropriate, the individual's
representative;
``(ii) in a home or community setting,
which may include a school, workplace, or
recreation or religious facility, but does not
include a nursing facility, an intermediate
care facility for the mentally retarded, or
other congregate facility;
``(iii) under an agency-provider model or
other model (as defined in paragraph (2)(C));
and
``(iv) the furnishing of which is selected,
managed, and dismissed by the individual, or,
as appropriate, with assistance from the
individual's representative.
``(B) Included services and supports.--Such term
includes--
``(i) tasks necessary to assist an
individual in accomplishing activities of daily
living, instrumental activities of daily
living, and health-related functions;
``(ii) acquisition, maintenance, and
enhancement of skills necessary for the
individual to accomplish activities of daily
living, instrumental activities of daily
living, and health-related functions;
``(iii) backup systems or mechanisms (such
as the use of beepers) to ensure continuity of
services and supports; and
``(iv) voluntary training on how to select,
manage, and dismiss attendants.
``(C) Excluded services and supports.--Subject to
subparagraph (D), such term does not include--
``(i) provision of room and board for the
individual;
``(ii) special education and related
services provided under the Individuals with
Disabilities Education Act and vocational
rehabilitation services provided under the
Rehabilitation Act of 1973;
``(iii) assistive technology devices and
assistive technology services;
``(iv) durable medical equipment; or
``(v) home modifications.
``(D) Flexibility in transition to community-based
home setting.--Such term may include expenditures for
transitional costs, such as rent and utility deposits,
first months's rent and utilities, bedding, basic
kitchen supplies, and other necessities required for an
individual to make the transition from a nursing
facility or intermediate care facility for the mentally
retarded to a community-based home setting where the
individual resides.
``(2) Additional definitions.--
``(A) Activities of daily living.--The term
`activities of daily living' includes eating,
toileting, grooming, dressing, bathing, and
transferring.
``(B) Consumer directed.--The term `consumer
directed' means a method of providing services and
supports that allow the individual, or where
appropriate, the individual's representative, maximum
control of the community attendant services and
supports, regardless of who acts as the employer of
record.
``(C) Delivery models.--
``(i) Agency-provider model.--The term
`agency-provider model' means, with respect to
the provision of community attendant services
and supports for an individual, a method of
providing consumer-directed services and
supports under which entities contract for the
provision of such services and supports.
``(ii) Other models.--The term `other
models' means methods, other than an agency-
provider model, for the provision of consumer-
directed services and supports. Such models may
include the provision of vouchers, direct cash
payments, or use of a fiscal agent to assist in
obtaining services.
``(D) Health-related functions.--The term `health-
related functions' means functions that can be
delegated or assigned by licensed health-care
professionals under State law to be performed by an
attendant.
``(E) Instrumental activities of daily living.--The
term `instrumental activities of daily living' includes
meal planning and preparation, managing finances,
shopping for food, clothing and other essential items,
performing essential household chores, communicating by
phone and other media, and getting around and
participating in the community.
``(F) Individual's representative.--The term
`individual's representative' means a parent, a family
member, a guardian, an advocate, or an authorized
representative of an individual.
``(b) Limitation on Amounts of Expenditures Under This Title.--In
carrying out section 1902(a)(10)(D)(ii), a State shall permit an
individual who has a level of severity of physical or mental impairment
that entitles such individual to medical assistance with respect to
nursing facility services or qualifies the individual for intermediate
care facility services for the mentally retarded to choose to receive
medical assistance for community attendant services and supports
(rather than medical assistance for such institutional services and
supports), in the most integrated setting appropriate to the needs of
the individual, so long as the aggregate amount of the Federal
expenditures for community attendant services and supports for all such
individuals in a fiscal year does not exceed the total that would have
been expended for such individuals to receive such institutional
services and supports in the year.
``(c) Maintenance of Effort.--With respect to a fiscal year
quarter, no Federal funds may be paid to a State for medical assistance
provided to individuals described in section 1902(a)(10)(D)(ii) for
such fiscal year quarter if the Secretary determines that the total of
the State expenditures for programs to enable such individuals with
disabilities to receive community attendant services and supports (or
services and supports that are similar to such services and supports)
under other provisions of this title for the preceding fiscal year
quarter is less than the total of such expenditures for the same fiscal
year quarter for the preceding fiscal year.
``(d) State Quality Assurance Program.--In order to continue to
receive Federal financial participation for providing community
attendant services and supports under this section, a State shall, at a
minimum, establish and maintain a quality assurance program that
provides for the following:
``(1) The State shall establish requirements, as
appropriate, for agency-based and other models that include--
``(A) minimum qualifications and training
requirements, as appropriate for agency-based and other
models;
``(B) financial operating standards; and
``(C) an appeals procedure for eligibility denials
and a procedure for resolving disagreements over the
terms of an individualized plan.
``(2) The State shall modify the quality assurance program,
where appropriate, to maximize consumer independence and
consumer direction in both agency-provided and other models.
``(3) The State shall provide a system that allows for the
external monitoring of the quality of services by entities
consisting of consumers and their representatives, disability
organizations, providers, family, members of the community, and
others.
``(4) The State provides ongoing monitoring of the health
and well-being of each recipient.
``(5) The State shall require that quality assurance
mechanisms appropriate for the individual should be included in
the individual's written plan.
``(6) The State shall establish a process for mandatory
reporting, investigation, and resolution of allegations of
neglect, abuse, or exploitation.
``(7) The State shall obtain meaningful consumer input,
including consumer surveys, that measure the extent to which a
participant receives the services and supports described in the
individual's plan and the participant's satisfaction with such
services and supports.
``(8) The State shall make available to the public the
findings of the quality assurance program.
``(9) The State shall establish an on-going public process
for the development, implementation, and review of the State's
quality assurance program.
``(10) The State shall develop and implement a program of
sanctions.
``(e) Federal Role in Quality Assurance.--The Secretary shall
conduct a periodic sample review of outcomes for individuals based upon
the individual's plan of support and based upon the quality assurance
program of the State. The Secretary may conduct targeted reviews upon
receipt of allegations of neglect, abuse, or exploitation. The
Secretary shall develop guidelines for States to use in developing
sanctions.
``(f) Requirement To Expand Eligibility.--Effective October 1,
2002, a State may not exercise the option of coverage of individuals
under section 1902(a)(10)(A)(ii)(V) without providing coverage under
section 1902(a)(10)(A)(ii)(VI).
``(g) Report on Impact of Section.--The Secretary shall submit to
Congress periodic reports on the impact of this section on
beneficiaries, States, and the Federal Government.''.
(c) Inclusion in Optional Eligibility Classification.--Section
1902(a)(10)(A)(ii)(VI) of the Social Security Act (42 U.S.C.
1396a(a)(10)(A)(ii)(VI)) is amended by inserting ``or community
attendant services and supports described in section 1935'' after
``section 1915'' each place such term appears.
(d) Coverage as Medical Assistance.--
(1) In general.--Section 1905(a) of the Social Security Act
(42 U.S.C. 1396d) is amended--
(A) by striking ``and'' at the end of paragraph
(26);
(B) by redesignating paragraph (27) as paragraph
(28); and
(C) by inserting after paragraph (26) the
following:
``(27) community attendant services and supports (to the
extent allowed and as defined in section 1935); and''.
(2) Conforming amendment.--Section 1902(a)(10)(C)(iv) of
the Social Security Act (42 U.S.C. 1396a(a)(10)(C)(iv)) is
amended by inserting ``and (27)'' after ``(24)''.
(e) Effective Date.--The amendments made by this section take
effect on October 1, 2001, and apply to medical assistance provided
under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) on
or after that date.
SEC. 302. GRANTS TO DEVELOP AND ESTABLISH REAL CHOICE SYSTEMS CHANGE
INITIATIVES.
(a) Establishment.--
(1) In general.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary'') shall award
grants described in subsection (b) to States for a fiscal year
to support real choice systems change initiatives that
establish specific action steps and specific timetables to
provide consumer-responsive long term services and supports to
eligible individuals in the most integrated setting appropriate
based on the unique strengths and needs of the individual and
the priorities and concerns of the individual (or, as
appropriate, the individual's representative).
(2) Eligibility.--To be eligible for a grant under this
section, a State shall--
(A) establish the Consumer Task Force in accordance
with subsection (d); and
(B) submit an application at such time, in such
manner, and containing such information as the
Secretary may determine. The application shall be
jointly developed and signed by the designated State
official and the chairperson of such Task Force, acting
on behalf of and at the direction of the Task Force.
(3) Definition of state.--In this section, the term
``State'' means each of the 50 States, the District of
Columbia, Puerto Rico, Guam, the United States Virgin Islands,
American Samoa, and the Commonwealth of the Northern Mariana
Islands.
(b) Grants for Real Choice Systems Change Initiatives.--
(1) In general.--From funds appropriated under subsection
(g), the Secretary shall award grants to States for a fiscal
year to--
(A) support the establishment, implementation, and
operation of the State real choice systems change
initiatives described in subsection (a); and
(B) conduct outreach campaigns regarding the
existence of such initiatives.
(2) Determination of awards; state allotments.--The
Secretary shall develop a formula for the distribution of funds
to States for each fiscal year under subsection (a). Such
formula shall give preference to States that have a relatively
higher proportion of long-term services and supports furnished
to individuals in an institutional setting but who have a plan
described in an application submitted under subsection (a)(2).
(c) Authorized Activities.--A State that receives a grant under
this section shall use the funds made available through the grant to
accomplish the purposes described in subsection (a) and, in
accomplishing such purposes, may carry out any of the following systems
change activities:
(1) Needs assessment and data gathering.--The State may use
funds to conduct a statewide needs assessment that may be based
on data in existence on the date on which the assessment is
initiated and may include information about the number of
individuals within the State who are receiving long-term
services and supports in unnecessarily segregated settings, the
nature and extent to which current programs respond to the
preferences of individuals with disabilities to receive
services in home and community-based settings as well as in
institutional settings, and the expected change in demand for
services provided in home and community settings as well as
institutional settings.
(2) Institutional bias.--The State may use funds to
identify, develop, and implement strategies for modifying
policies, practices, and procedures that unnecessarily bias the
provision of long-term services and supports toward
institutional settings and away from home and community-based
settings, including policies, practices, and procedures
governing statewideness, comparability in amount, duration, and
scope of services, financial eligibility, individualized
functional assessments and screenings (including individual and
family involvement), and knowledge about service options.
(3) Over medicalization of services.--The State may use
funds to identify, develop, and implement strategies for
modifying policies, practices, and procedures that
unnecessarily bias the provision of long-term services and
supports by health care professionals to the extent that
quality services and supports can be provided by other
qualified individuals, including policies, practices, and
procedures governing service authorization, case management,
and service coordination, service delivery options, quality
controls, and supervision and training.
(4) Interagency coordination; single point of entry.--The
State may support activities to identify and coordinate Federal
and State policies, resources, and services, relating to the
provision of long-term services and supports, including
the convening of interagency work groups and the entering into of
interagency agreements that provide for a single point of entry and the
design and implementation of a coordinated screening and assessment
system for all persons eligible for long-term services and supports.
(5) Training and technical assistance.--The State may carry
out directly, or may provide support to a public or private
entity to carry out training and technical assistance
activities that are provided for individuals with disabilities,
and, as appropriate, their representatives, attendants, and
other personnel (including professionals, paraprofessionals,
volunteers, and other members of the community).
(6) Public awareness.--The State may support a public
awareness program that is designed to provide information
relating to the availability of choices available to
individuals with disabilities for receiving long-term services
and support in the most integrated setting appropriate.
(7) Downsizing of large institutions.--The State may use
funds to support the per capita increased fixed costs in
institutional settings directly related to the movement of
individuals with disabilities out of specific facilities and
into community-based settings.
(8) Transitional costs.--The State may use funds to provide
transitional costs described in section 1935(a)(1)(D) of the
Social Security Act, as added by section 301(b) of this Act.
(9) Task force.--The State may use funds to support the
operation of the Consumer Task Force established under
subsection (d).
(10) Demonstrations of new approaches.--The State may use
funds to conduct, on a time-limited basis, the demonstration of
new approaches to accomplishing the purposes described in
subsection (a).
(11) Other activities.--The State may use funds for any
systems change activities that are not described in any of the
preceding paragraphs of this subsection and that are necessary
for developing, implementing, or evaluating the comprehensive
statewide system of long term services and supports.
(d) Consumer Task Force.--
(1) Establishment and duties.--To be eligible to receive a
grant under this section, each State shall establish a Consumer
Task Force (referred to in this section as the ``Task Force'')
to assist the State in the development, implementation, and
evaluation of real choice systems change initiatives.
(2) Appointment.--Members of the Task Force shall be
appointed by the Chief Executive Officer of the State in
accordance with the requirements of paragraph (3), after the
solicitation of recommendations from representatives of
organizations representing a broad range of individuals with
disabilities and organizations interested in individuals with
disabilities.
(3) Composition.--
(A) In general.--The Task Force shall represent a
broad range of individuals with disabilities from
diverse backgrounds and shall include representatives
from Developmental Disabilities Councils, State
Independent Living Councils, Commissions on Aging,
organizations that provide services to individuals with
disabilities and consumers of long-term services and
supports.
(B) Individuals with disabilities.--A majority of
the members of the Task Force shall be individuals with
disabilities or the representatives of such
individuals.
(C) Limitation.--The Task Force shall not include
employees of any State agency providing services to
individuals with disabilities other than employees of
agencies described in the Developmental Disabilities
Assistance and Bill of Rights Act (42 U.S.C. 6000 et
seq.).
(e) Availability of Funds.--
(1) Funds allotted to states.--Funds allotted to a State
under a grant made under this section for a fiscal year shall
remain available until expended.
(2) Funds not allotted to states.--Funds not allotted to
States in the fiscal year for which they are appropriated shall
remain available in succeeding fiscal years for allotment by
the Secretary using the allotment formula established by the
Secretary under subsection (b)(2).
(f) Annual Report.--A State that receives a grant under this
section shall submit an annual report to the Secretary on the use of
funds provided under the grant. Each report shall include the
percentage increase in the number of eligible individuals in the State
who receive long-term services and supports in the most integrated
setting appropriate, including through community attendant services and
supports and other community-based settings.
(g) Appropriation.--Out of any funds in the Treasury not otherwise
appropriated, there is authorized to be appropriated and there is
appropriated to make grants under this section for--
(1) fiscal year 2002, $25,000,000; and
(2) for fiscal year 2003 and each fiscal year thereafter,
such sums as may be necessary to carry out this section.
SEC. 303. STATE OPTION FOR ELIGIBILITY FOR INDIVIDUALS.
(a) In General.--Section 1903(f) of the Social Security Act (42
U.S.C. 1396b(f)) is amended--
(1) in paragraph (4)(C), by inserting ``subject to
paragraph (5),'' after ``does not exceed'', and
(2) by adding at the end the following:
``(5)(A) A State may waive the income, resources, and deeming
limitations described in paragraph (4)(C) in such cases as the State
finds the potential for employment opportunities would be enhanced
through the provision of medical assistance for community attendant
services and supports in accordance with section 1935.
``(B) In the case of an individual who is eligible for medical
assistance described in subparagraph (A) only as a result of the
application of such subparagraph, the State may, notwithstanding
section 1916(b), impose a premium based on a sliding scale related to
income.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to medical assistance provided for community attendant services
and supports described in section 1935 of the Social Security Act, as
added by section 301(b) of this Act, furnished on or after October 1,
2001.
SEC. 304. STUDIES AND REPORTS.
(a) Review of, and Report on, Regulations.--The National Council on
Disability established under title IV of the Rehabilitation Act of 1973
(29 U.S.C. 780 et seq.) shall review regulations in existence under
title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) on the
date of enactment of this Act insofar as such regulations regulate the
provision of home health services, personal care services, and other
services in home and community-based settings and, not later than 1
year after such date, submit a report to Congress on the results of
such study, together with any recommendations for legislation that the
Council determines to be appropriate as a result of the study.
(b) Report on Reduced Title XIX Expenditures.--Not later than 1
year after the date of enactment of this Act, the Secretary of Health
and Human Services shall submit to Congress a report on how
expenditures under the medicaid program under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.) can be reduced by the furnishing
of community attendant services and supports in accordance with section
1935 of the Social Security Act (as added by section 301(b) of this
Act).
SEC. 305. TASK FORCE ON FINANCING OF LONG-TERM CARE SERVICES.
The Secretary of Health and Human Services shall establish a task
force to examine appropriate methods for financing long-term services
and supports. The task force shall include significant representation
of individuals (and representatives of individuals) who receive such
services and supports.
TITLE IV--HEALTH CARE INSURANCE COVERAGE
Subtitle A--General Provisions
SEC. 401. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974.
(a) In General.--Part 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1181 et seq.) is
amended--
(1) by redesignating subpart C as subpart D; and
(2) by inserting after subpart B, the following:
``Subpart C--General Insurance Coverage Reforms
``CHAPTER 1--INCREASED AVAILABILITY AND CONTINUITY OF HEALTH COVERAGE
``SEC. 721. DEFINITION.
``As used in this subpart, the term `qualified group health plan'
means a group health plan, and a health insurance issuer offering group
health insurance coverage, that is designed to provide standard
coverage (consistent with section 721A(b)).
``SEC. 721A. ACTUARIAL EQUIVALENCE IN BENEFITS PERMITTED.
``(a) Set of Rules of Actuarial Equivalence.--
``(1) Initial determination.--The NAIC is requested to
submit to the Secretary, within 6 months after the date of the
enactment of this subpart, a set of rules which the NAIC
determines is sufficient for determining, in the case of any
group health plan, or a health insurance issuer offering group
health insurance coverage, and for purposes of this section,
the actuarial value of the coverage offered by the plan or
coverage.
``(2) Certification.--If the Secretary determines that the
NAIC has submitted a set of rules that comply with the
requirements of paragraph (1), the Secretary shall certify such
set of rules for use under this subpart. If the Secretary
determines that such a set of rules has not been submitted or
does not comply with such requirements, the Secretary shall
promptly establish a set of rules that meets such requirements.
``(b) Standard Coverage.--
``(1) In general.--A group health plan, and a health
insurance issuer offering group health insurance coverage,
shall be considered to provide standard coverage consistent
with this subsection if the benefits are determined, in
accordance with the set of actuarial equivalence rules
certified under subsection (a), to have a value that is within
5 percentage points of the target actuarial value for standard
coverage established under paragraph (2).
``(2) Initial determination of target actuarial value for
standard coverage.--
``(A) Initial determination.--
``(i) In general.--The NAIC is requested to
submit to the Secretary, within 6 months after
the date of the enactment of this subpart, a
target actuarial value for standard coverage
equal to the average actuarial value of the
coverage described in clause (ii). No specific
procedure or treatment, or classes thereof, is
required to be considered in such determination
by this subpart or through regulations. The
determination of such value shall be based on a
representative distribution of the population
of eligible employees offered such coverage and
a single set of standardized utilization and
cost factors.
``(ii) Coverage described.--The coverage
described in this clause is coverage for
medically necessary and appropriate services
consisting of medical and surgical services,
medical equipment, preventive services, and
emergency transportation in frontier areas. No
specific procedure or treatment, or classes
thereof, is required to be covered in such a
plan, by this subpart or through regulations.
``(B) Certification.--If the Secretary determines
that the NAIC has submitted a target actuarial value
for standard coverage that complies with the
requirements of subparagraph (A), the Secretary shall
certify such value for use under this chapter. If the
Secretary determines that a target actuarial value has not been
submitted or does not comply with the requirements of subparagraph (A),
the Secretary shall promptly determine a target actuarial value that
meets such requirements.
``(c) Subsequent Revisions.--
``(1) NAIC.--The NAIC may submit from time to time to the
Secretary revisions of the set of rules of actuarial
equivalence and target actuarial values previously established
or determined under this section if the NAIC determines that
revisions are necessary to take into account changes in the
relevant types of health benefits provisions or in demographic
conditions which form the basis for the set of rules of
actuarial equivalence or the target actuarial values. The
provisions of subsection (a)(2) shall apply to such a revision
in the same manner as they apply to the initial determination
of the set of rules.
``(2) Secretary.--The Secretary may by regulation revise
the set of rules of actuarial equivalence and target actuarial
values from time to time if the Secretary determines such
revisions are necessary to take into account changes described
in paragraph (1).
``SEC. 721B. ESTABLISHMENT OF PLAN STANDARDS.
``(a) Establishment of General Standards.--
``(1) Role of naic.--The NAIC is requested to submit to the
Secretary, within 9 months after the date of the enactment of
this subpart, model regulations that specify standards for
making qualified group health plans available to small
employers. If the NAIC develops recommended regulations
specifying such standards within such period, the Secretary
shall review the standards. Such review shall be completed
within 60 days after the date the regulations are developed.
Such standards shall serve as the standards under this section,
with such amendments as the Secretary deems necessary. Such
standards shall be nonbinding (except as provided in chapter
4).
``(2) Contingency.--If the NAIC does not develop such model
regulations within the period described in paragraph (1), the
Secretary shall specify, within 15 months after the date of the
enactment of this subpart, model regulations that specify
standards for insurers with regard to making qualified group
health plans available to small employers. Such standards shall
be nonbinding (except as provided in chapter 4).
``(3) Effective date.--The standards specified in the model
regulations shall apply to group health plans and health
insurance issuers offering group health insurance coverage in a
State on or after the respective date the standards are
implemented in the State.
``(b) No Preemption of State Law.--A State may implement standards
for group health plans available, and health insurance issuers offering
group health insurance coverage offered, to small employers that are
more stringent than the standards under this section, except that a
State may not implement standards that prevent the offering of at least
one group health plan that provides standard coverage (as described in
section 721A(b)).
``SEC. 721C. RATING LIMITATIONS FOR COMMUNITY-RATED MARKET.
``(a) Standard Premiums With Respect to Community-Rated Eligible
Employees and Eligible Individuals.--
``(1) In general.--Each group health plan offered, and each
health insurance issuer offering group health insurance
coverage, to a small employer shall establish within each
community rating area in which the plan is to be offered, a
standard premium for enrollment of eligible employees and
eligible individuals for the standard coverage (as defined
under section 721A(b)).
``(2) Establishment of community rating area.--
``(A) In general.--Not later than January 1, 2002,
each State shall, in accordance with subparagraph (B),
provide for the division of the State into 1 or more
community rating areas. The State may revise the
boundaries of such areas from time to time consistent
with this paragraph.
``(B) Geographic area variations.--For purposes of
subparagraph (A), a State--
``(i) may not identify an area that divides
a 3-digit zip code, a county, or all portions
of a metropolitan statistical area;
``(ii) shall not permit premium rates for
coverage offered in a portion of an interstate
metropolitan statistical area to vary based on
the State in which the coverage is offered; and
``(iii) may, upon agreement with one or
more adjacent States, identify multi-State
geographic areas consistent with clauses (i)
and (ii).
``(3) Eligible individuals.--For purposes of this section,
the term `eligible individuals' includes certain uninsured
individuals (as described in section 721G).
``(b) Uniform Premiums Within Community Rating Areas.--
``(1) In general.--Subject to paragraphs (2) and (3), the
standard premium for each group health plan to which this
section applies shall be the same, but shall not include the
costs of premium processing and enrollment that may vary
depending on whether the method of enrollment is through a
qualified small employer purchasing group, through a small
employer, or through a broker.
``(2) Application to enrollees.--
``(A) In general.--The premium charged for coverage
in a group health plan which covers eligible employees
and eligible individuals shall be the product of--
``(i) the standard premium (established
under paragraph (1));
``(ii) in the case of enrollment other than
individual enrollment, the family adjustment
factor specified under subparagraph (B); and
``(iii) the age adjustment factor
(specified under subparagraph (C)).
``(B) Family adjustment factor.--
``(i) In general.--The standards
established under section 721B shall specify
family adjustment factors that reflect the
relative actuarial costs of benefit packages
based on family classes of enrollment (as
compared with such costs for individual
enrollment).
``(ii) Classes of enrollment.--For purposes
of this subpart, there are 4 classes of
enrollment:
``(I) Coverage only of an
individual (referred to in this subpart
as the `individual' enrollment or class
of enrollment).
``(II) Coverage of a married couple
without children (referred to in this
subpart as the `couple-only' enrollment
or class of enrollment).
``(III) Coverage of an individual
and one or more children (referred to
in this subpart as the `single parent'
enrollment or class of enrollment).
``(IV) Coverage of a married couple
and one or more children (referred to
in this subpart as the `dual parent'
enrollment or class of enrollment).
``(iii) References to family and couple
classes of enrollment.--In this subpart:
``(I) Family.--The terms `family
enrollment' and `family class of
enrollment' refer to enrollment in a
class of enrollment described in any
subclause of clause (ii) (other than
subclause (I)).
``(II) Couple.--The term `couple
class of enrollment' refers to
enrollment in a class of enrollment
described in subclause (II) or (IV) of
clause (ii).
``(iv) Spouse; married; couple.--
``(I) In general.--In this subpart,
the terms `spouse' and `married' mean,
with respect to an individual, another
individual who is the spouse of, or is
married to, the individual, as
determined under applicable State law.
``(II) Couple.--The term `couple'
means an individual and the
individual's spouse.
``(C) Age adjustment factor.--The Secretary, in
consultation with the NAIC, shall specify uniform age
categories and maximum rating increments for age
adjustment factors that reflect the relative actuarial
costs of benefit packages among enrollees. For
individuals who have attained age 18 but not age 65,
the highest age adjustment factor may not exceed 3
times the lowest age adjustment factor.
``(3) Administrative charges.--
``(A) In general.--In accordance with the standards
established under section 721B, a group health plan
which covers eligible employees and eligible
individuals may add a separately-stated administrative
charge which is based on identifiable differences in
legitimate administrative costs and which is applied
uniformly for individuals enrolling through the same
method of enrollment. Nothing in this subparagraph may
be construed as preventing a qualified small employer
purchasing group from negotiating a unique
administrative charge with an insurer for a group
health plan.
``(B) Enrollment through a qualified small employer
purchasing group.--In the case of an administrative
charge under subparagraph (A) for enrollment through a
qualified small employer purchasing group, such charge
may not exceed the lowest charge of such plan for
enrollment other than through a qualified small
employer purchasing group in such area.
``(c) Treatment of Negotiated Rate as Community Rate.--
Notwithstanding any other provision of this section, a group health
plan and a health insurance issuer offering health insurance coverage
that negotiates a premium rate (exclusive of any administrative charge
described in subsection (b)(3)) with a qualified small employer
purchasing group in a community rating area shall charge the same
premium rate to all eligible employees and eligible individuals.
``SEC. 721D. RATING PRACTICES AND PAYMENT OF PREMIUMS.
``(a) Full Disclosure of Rating Practices.--
``(1) In general.--A group health plan and a health
insurance issuer offering health insurance coverage shall fully
disclose rating practices for the plan to the appropriate
certifying authority.
``(2) Notice on expiration.--A group health plan and a
health insurance issuer offering health insurance coverage
shall provide for notice of the terms for renewal of a plan at
the time of the offering of the plan and at least 90 days
before the date of expiration of the plan.
``(3) Actuarial certification.--Each group health plan and
health insurance issuer offering health insurance coverage
shall file annually with the appropriate certifying authority a
written statement by a member of the American Academy of
Actuaries (or other individual acceptable to such authority)
who is not an employee of the group health plan or issuer
certifying that, based upon an examination by the individual
which includes a review of the appropriate records and of the
actuarial assumptions of such plan or insurer and methods used
by the plan or insurer in establishing premium rates and
administrative charges for group health plans--
``(A) such plan or insurer is in compliance with
the applicable provisions of this subpart; and
``(B) the rating methods are actuarially sound.
Each plan and insurer shall retain a copy of such statement at
its principal place of business for examination by any
individual.
``(b) Payment of Premiums.--
``(1) In general.--With respect to a new enrollee in a
group health plan, the plan may require advanced payment of an
amount equal to the monthly applicable premium for the plan at
the time such individual is enrolled.
``(2) Notification of failure to receive premium.--If a
group health plan or a health insurance issuer offering health
insurance coverage fails to receive payment on a premium due
with respect to an eligible employee or eligible individual
covered under the plan involved, the plan or issuer shall
provide notice of such failure to the employee or individual
within the 20-day period after the date on which such premium
payment was due. A plan or issuer may not terminate the
enrollment of an eligible employee or eligible individual
unless such employee or individual has been notified of any
overdue premiums and has been provided a reasonable opportunity
to respond to such notice.
``SEC. 721E. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS.
``(a) Qualified Small Employer Purchasing Groups Described.--
``(1) In general.--A qualified small employer purchasing
group is an entity that--
``(A) is a nonprofit entity certified under State
law;
``(B) has a membership consisting solely of small
employers;
``(C) is administered solely under the authority
and control of its member employers;
``(D) with respect to each State in which its
members are located, consists of not fewer than the
number of small employers established by the State as
appropriate for such a group;
``(E) offers a program under which qualified group
health plans are offered to eligible employees and
eligible individuals through its member employers and
to certain uninsured individuals in accordance with
section 721D; and
``(F) an insurer, agent, broker, or any other
individual or entity engaged in the sale of insurance--
``(i) does not form or underwrite; and
``(ii) does not hold or control any right
to vote with respect to.
``(2) State certification.--A qualified small employer
purchasing group formed under this section shall submit an
application to the State for certification. The State shall
determine whether to issue a certification and otherwise ensure
compliance with the requirements of this subpart.
``(3) Special rule.--Notwithstanding paragraph (1)(B), an
employer member of a small employer purchasing group that has
been certified by the State as meeting the requirements of
paragraph (1) may retain its membership in the group if the
number of employees of the employer increases such that the
employer is no longer a small employer.
``(b) Board of Directors.--Each qualified small employer purchasing
group established under this section shall be governed by a board of
directors or have active input from an advisory board consisting of
individuals and businesses participating in the group.
``(c) Domiciliary State.--For purposes of this section, a qualified
small employer purchasing group operating in more than one State shall
be certified by the State in which the group is domiciled.
``(d) Membership.--
``(1) In general.--A qualified small employer purchasing
group shall accept all small employers and certain uninsured
individuals residing within the area served by the group as
members if such employers or individuals request such
membership.
``(2) Voting.--Members of a qualified small employer
purchasing group shall have voting rights consistent with the
rules established by the State.
``(e) Duties of Qualified Small Employer Purchasing Groups.--Each
qualified small employer purchasing group shall--
``(1) enter into agreements with insurers offering
qualified group health plans;
``(2) enter into agreements with small employers under
section 721F;
``(3) enroll only eligible employees, eligible individuals,
and certain uninsured individuals in qualified group health
plans, in accordance with section 721G;
``(4) provide enrollee information to the State;
``(5) meet the marketing requirements under section 721I;
and
``(6) carry out other functions provided for under this
subpart.
``(f) Limitation on Activities.--A qualified small employer
purchasing group shall not--
``(1) perform any activity involving approval or
enforcement of payment rates for providers;
``(2) perform any activity (other than the reporting of
noncompliance) relating to compliance of qualified group health
plans with the requirements of this subpart;
``(3) assume financial risk in relation to any such health
plan; or
``(4) perform other activities identified by the State as
being inconsistent with the performance of its duties under
this subpart.
``(g) Rules of Construction.--
``(1) Establishment not required.--Nothing in this section
shall be construed as requiring--
``(A) that a State organize, operate or otherwise
establish a qualified small employer purchasing group,
or otherwise require the establishment of purchasing
groups; and
``(B) that there be only one qualified small
employer purchasing group established with respect to a
community rating area.
``(2) Single organization serving multiple areas and
states.--Nothing in this section shall be construed as
preventing a single entity from being a qualified small
employer purchasing group in more than one community rating
area or in more than one State.
``(3) Voluntary participation.--Nothing in this section
shall be construed as requiring any individual or small
employer to purchase a qualified group health plan exclusively
through a qualified small employer purchasing group.
``SEC. 721F. AGREEMENTS WITH SMALL EMPLOYERS.
``(a) In General.--A qualified small employer purchasing group
shall offer to enter into an agreement under this section with each
small employer that employs eligible employees in the area served by
the group.
``(b) Payroll Deduction.--
``(1) In general.--Under an agreement under this section
between a small employer and a qualified small employer
purchasing group, the small employer shall deduct premiums from
an eligible employee's wages.
``(2) Additional premiums.--If the amount withheld under
paragraph (1) is not sufficient to cover the entire cost of the
premiums, the eligible employee shall be responsible for paying
directly to the qualified small employer purchasing group the
difference between the amount of such premiums and the amount
withheld.
``SEC. 721G. ENROLLING ELIGIBLE EMPLOYEES, ELIGIBLE INDIVIDUALS, AND
CERTAIN UNINSURED INDIVIDUALS IN QUALIFIED GROUP HEALTH
PLANS.
``(a) In General.--Each qualified small employer purchasing group
shall offer--
``(1) eligible employees,
``(2) eligible individuals, and
``(3) certain uninsured individuals,
the opportunity to enroll in any qualified group health plan which has
an agreement with the qualified small employer purchasing group for the
community rating area in which such employees and individuals reside.
``(b) Uninsured Individuals.--For purposes of this section, an
individual is described in subsection (a)(3) if such individual is an
uninsured individual who is not an eligible employee of a small
employer that is a member of a qualified small employer purchasing
group or a dependent of such individual.
``SEC. 721H. RECEIPT OF PREMIUMS.
``(a) Enrollment Charge.--The amount charged by a qualified small
employer purchasing group for coverage under a qualified group health
plan shall be equal to the sum of--
``(1) the premium rate offered by such health plan;
``(2) the administrative charge for such health plan; and
``(3) the purchasing group administrative charge for
enrollment of eligible employees, eligible individuals and
certain uninsured individuals through the group.
``(b) Disclosure of Premium Rates and Administrative Charges.--Each
qualified small employer purchasing group shall, prior to the time of
enrollment, disclose to enrollees and other interested parties the
premium rate for a qualified group health plan, the administrative
charge for such plan, and the administrative charge of the group,
separately.
``SEC. 721I. MARKETING ACTIVITIES.
``Each qualified small employer purchasing group shall market
qualified group health plans to members through the entire community
rating area served by the purchasing group.
``SEC. 721J. GRANTS TO STATES AND QUALIFIED SMALL EMPLOYER PURCHASING
GROUPS.
``(a) In General.--The Secretary shall award grants to States and
small employer purchasing groups to assist such States and groups in
planning, developing, and operating qualified small employer purchasing
groups.
``(b) Application Requirements.--To be eligible to receive a grant
under this section, a State or small employer purchasing group shall
prepare and submit to the Secretary an application in such form, at
such time, and containing such information, certifications, and
assurances as the Secretary shall reasonably require.
``(c) Use of Funds.--Amounts awarded under this section may be used
to finance the costs associated with planning, developing, and
operating a qualified small employer purchasing group. Such costs may
include the costs associated with--
``(1) engaging in education and outreach efforts to inform
small employers, insurers, and the public about the small
employer purchasing group;
``(2) soliciting bids and negotiating with insurers to make
available group health plans;
``(3) preparing the documentation required to receive
certification by the Secretary as a qualified small employer
purchasing group; and
``(4) such other activities determined appropriate by the
Secretary.
``(d) Authorization of Appropriations.--There are authorized to be
appropriated for awarding grants under this section such sums as may be
necessary.
``SEC. 721K. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS ESTABLISHED BY
A STATE.
``A State may establish a system in all or part of the State under
which qualified small employer purchasing groups are the sole mechanism
through which health care coverage for the eligible employees of small
employers shall be purchased or provided.
``SEC. 721L. EFFECTIVE DATES.
``(a) In General.--Except as provided in this chapter, the
provisions of this chapter are effective on the date of the enactment
of this subpart.
``(b) Exception.--The provisions of section 721C(b) shall apply to
contracts which are issued, or renewed, after the date which is 18
months after the date of the enactment of this subpart.
``CHAPTER 2--REQUIRED COVERAGE OPTIONS FOR ELIGIBLE EMPLOYEES AND
DEPENDENTS OF SMALL EMPLOYERS
``SEC. 722. REQUIRING SMALL EMPLOYERS TO OFFER COVERAGE FOR ELIGIBLE
INDIVIDUALS.
``(a) Requirement To Offer.--Each small employer shall make
available with respect to each eligible employee a group health plan
under which--
``(1) coverage of each eligible individual with respect to
such an eligible employee may be elected on an annual basis for
each plan year;
``(2) coverage is provided for at least the standard
coverage specified in section 721A(b); and
``(3) each eligible employee electing such coverage may
elect to have any premiums owed by the employee collected
through payroll deduction.
``(b) No Employer Contribution Required.--An employer is not
required under subsection (a) to make any contribution to the cost of
coverage under a group health plan described in such subsection.
``(c) Special Rules.--
``(1) Exclusion of new employers and certain very small
employers.--Subsection (a) shall not apply to any small
employer for any plan year if, as of the beginning of such plan
year--
``(A) such employer (including any predecessor
thereof) has been an employer for less than 2 years;
``(B) such employer has no more than 2 eligible
employees; or
``(C) no more than 2 eligible employees are not
covered under any group health plan.
``(2) Exclusion of family members.--Under such procedures
as the Secretary may prescribe, any relative of a small
employer may be, at the election of the employer, excluded from
consideration as an eligible employee for purposes of applying
the requirements of subsection (a). In the case of a small
employer that is not an individual, an employee who is a
relative of a key employee (as defined in section 416(i)(1) of
the Internal Revenue Code of 1986) of the employer may, at the
election of the key employee, be considered a relative
excludable under this paragraph.
``(3) Optional application of waiting period.--A group
health plan and a health insurance issuer offering group health
insurance coverage shall not be treated as failing to meet the
requirements of subsection (a) solely because a period of
service by an eligible employee of not more than 60 days is
required under the plan for coverage under the plan of eligible
individuals with respect to such employee.
``(d) Construction.--Nothing in this section shall be construed as
limiting the group health plans, or types of coverage under such a
plan, that an employer may offer to an employee.
``SEC. 722A. COMPLIANCE WITH APPLICABLE REQUIREMENTS THROUGH MULTIPLE
EMPLOYER HEALTH ARRANGEMENTS.
``(a) In General.--In any case in which an eligible employee is,
for any plan year, a participant in a group health plan which is a
multiemployer plan, the requirements of section 722(a) shall be deemed
to be met with respect to such employee for such plan year if the
employer requirements of subsection (b) are met with respect to the
eligible employee, irrespective of whether, or to what extent, the
employer makes employer contributions on behalf of the eligible
employee.
``(b) Employer Requirements.--The employer requirements of this
subsection are met under a group health plan with respect to an
eligible employee if--
``(1) the employee is eligible under the plan to elect
coverage on an annual basis and is provided a reasonable
opportunity to make the election in such form and manner and at
such times as are provided by the plan;
``(2) coverage is provided for at least the standard
coverage specified in section 721A(b);
``(3) the employer facilitates collection of any employee
contributions under the plan and permits the employee to elect
to have employee contributions under the plan collected through
payroll deduction; and
``(4) in the case of a plan to which part 1 does not
otherwise apply, the employer provides to the employee a
summary plan description described in section 102(a)(1) in the
form and manner and at such times as are required under such
part 1 with respect to employee welfare benefit plans.
``CHAPTER 3--REQUIRED COVERAGE OPTIONS FOR INDIVIDUALS INSURED THROUGH
ASSOCIATION PLANS
``Subchapter A--Qualified Association Plans
``SEC. 723. TREATMENT OF QUALIFIED ASSOCIATION PLANS.
``(a) General Rule.--For purposes of this chapter, in the case of a
qualified association plan--
``(1) except as otherwise provided in this subchapter, the
plan shall meet all applicable requirements of chapter 1 and
chapter 2 for group health plans offered to and by small
employers;
``(2) if such plan is certified as meeting such
requirements and the requirements of this subchapter, such plan
shall be treated as a plan established and maintained by a
small employer, and individuals enrolled in such plan shall be
treated as eligible employees; and
``(3) any individual who is a member of the association not
enrolling in the plan shall not be treated as an eligible
employee solely by reason of membership in such association.
``(b) Election To Be Treated as Purchasing Cooperative.--Subsection
(a) shall not apply to a qualified association plan if--
``(1) the health insurance issuer makes an irrevocable
election to be treated as a qualified small employer purchasing
group for purposes of section 721D; and
``(2) such sponsor meets all requirements of this subpart
applicable to a purchasing cooperative.
``SEC. 723A. QUALIFIED ASSOCIATION PLAN DEFINED.
``(a) General Rule.--For purposes of this chapter, a plan is a
qualified association plan if the plan is a multiple employer welfare
arrangement or similar arrangement--
``(1) which is maintained by a qualified association;
``(2) which has at least 500 participants in the United
States;
``(3) under which the benefits provided consist solely of
medical care (as defined in section 213(d) of the Internal
Revenue Code of 1986);
``(4) which may not condition participation in the plan, or
terminate coverage under the plan, on the basis of the health
status or health claims experience of any employee or member or
dependent of either;
``(5) which provides for bonding, in accordance with
regulations providing rules similar to the rules under section
412, of all persons operating or administering the plan or
involved in the financial affairs of the plan; and
``(6) which notifies each participant or provider that it
is certified as meeting the requirements of this chapter
applicable to it.
``(b) Self-Insured Plans.--In the case of a plan which is not fully
insured (within the meaning of section 514(b)(6)(D)), the plan shall be
treated as a qualified association plan only if--
``(1) the plan meets minimum financial solvency and cash
reserve requirements for claims which are established by the
Secretary and which shall be in lieu of any other such
requirements under this chapter;
``(2) the plan provides an annual funding report (certified
by an independent actuary) and annual financial statements to
the Secretary and other interested parties; and
``(3) the plan appoints a plan sponsor who is responsible
for operating the plan and ensuring compliance with applicable
Federal and State laws.
``(c) Certification.--
``(1) In general.--A plan shall not be treated as a
qualified association plan for any period unless there is in
effect a certification by the Secretary that the plan meets the
requirements of this subchapter. For purposes of this chapter,
the Secretary shall be the appropriate certifying authority
with respect to the plan.
``(2) Fee.--The Secretary shall require a $5,000 fee for
the original certification under paragraph (1) and may charge a
reasonable annual fee to cover the costs of processing and
reviewing the annual statements of the plan.
``(3) Expedited procedures.--The Secretary may by
regulation provide for expedited registration, certification,
and comment procedures.
``(4) Agreements.--The Secretary of Labor may enter into
agreements with the States to carry out the Secretary's
responsibilities under this subchapter.
``(d) Availability.--Notwithstanding any other provision of this
chapter, a qualified association plan may limit coverage to individuals
who are members of the qualified association establishing or
maintaining the plan, an employee of such member, or a dependent of
either.
``(e) Special Rules for Existing Plans.--In the case of a plan in
existence on January 1, 2001--
``(1) the requirements of subsection (a) (other than
paragraphs (4), (5), and (6) thereof) shall not apply;
``(2) no original certification shall be required under
this subchapter; and
``(3) no annual report or funding statement shall be
required before January 1, 2003, but the plan shall file with
the Secretary a description of the plan and the name of the
health insurance issuer.
``SEC. 723B. DEFINITIONS AND SPECIAL RULES.
``(a) Qualified Association.--For purposes of this subchapter, the
term `qualified association' means any organization which--
``(1) is organized and maintained in good faith by a trade
association, an industry association, a professional
association, a chamber of commerce, a religious organization, a
public entity association, or other business association
serving a common or similar industry;
``(2) is organized and maintained for substantial purposes
other than to provide a health plan;
``(3) has a constitution, bylaws, or other similar
governing document which states its purpose; and
``(4) receives a substantial portion of its financial
support from its active, affiliated, or federation members.
``(b) Coordination.--The term `qualified association plan' shall
not include a plan to which subchapter B applies.
``Subchapter B--Special Rule for Church, Multiemployer, and Cooperative
Plans
``SEC. 723F. SPECIAL RULE FOR CHURCH, MULTIEMPLOYER, AND COOPERATIVE
PLANS.
``(a) General Rule.--For purposes of this chapter, in the case of a
group health plan to which this section applies--
``(1) except as otherwise provided in this subchapter, the
plan shall be required to meet all applicable requirements of
chapter 1 and chapter 2 for group health plans offered to and
by small employers;
``(2) if such plan is certified as meeting such
requirements, such plan shall be treated as a plan established
and maintained by a small employer and individuals enrolled in
such plan shall be treated as eligible employees; and
``(3) any individual eligible to enroll in the plan who
does not enroll in the plan shall not be treated as an eligible
employee solely by reason of being eligible to enroll in the
plan.
``(b) Modified Standards.--
``(1) Certifying authority.--For purposes of this chapter,
the Secretary shall be the appropriate certifying authority
with respect to a plan to which this section applies.
``(2) Availability.--Rules similar to the rules of
subsection (e) of section 723A shall apply to a plan to which
this section applies.
``(3) Access.--An employer which, pursuant to a collective
bargaining agreement, offers an employee the opportunity to
enroll in a plan described in subsection (c)(2) shall not be
required to make any other plan available to the employee.
``(4) Treatment under state laws.--A church plan described
in subsection (c)(1) which is certified as meeting the
requirements of this section shall not be deemed to be a
multiple employer welfare arrangement or an insurance company
or other insurer, or to be engaged in the business of
insurance, for purposes of any State law purporting to regulate
insurance companies or insurance contracts.
``(c) Plans to Which Section Applies.--This section shall apply to
a health plan which--
``(1) is a church plan (as defined in section 414(e) of the
Internal Revenue Code of 1986) which has at least 100
participants in the United States;
``(2) is a multiemployer plan which is maintained by a
health plan sponsor described in section 3(16)(B)(iii) and
which has at least 500 participants in the United States; or
``(3) is a plan which is maintained by a rural electric
cooperative or a rural telephone cooperative association and
which has at least 500 participants in the United States.''.
(b) Conforming Amendments.--Section 731(d) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1186(d)) is amended
by adding at the end the following:
``(3) Eligible employee.--The term `eligible employee'
means, with respect to an employer, an employee who normally
performs on a monthly basis at least 30 hours of service per
week for that employer.
``(4) Eligible individual.--The term `eligible individual'
means, with respect to an eligible employee, such employee, and
any dependent of such employee.
``(5) NAIC.--The term `NAIC' means the National Association
of Insurance Commissioners.
``(6) Qualified group health plan.--The term `qualified
group health plan' shall have the meaning given the term in
section 721.''.
SEC. 402. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE
GROUP MARKET.
(a) In General.--Subpart 2 of part A of title XXVII of the Public
Health Service Act (42 U.S.C. 300gg-4 et seq.) is amended--
(1) by inserting after the subpart heading the following:
``CHAPTER 1--MISCELLANEOUS REQUIREMENTS'';
and
(2) by adding at the end the following:
``CHAPTER 2--GENERAL INSURANCE COVERAGE REFORMS
``Subchapter A--Increased Availability and Continuity of Health
Coverage
``SEC. 2707. DEFINITION.
``As used in this chapter, the term `qualified group health plan'
means a group health plan, and a health insurance issuer offering group
health insurance coverage, that is designed to provide standard
coverage (consistent with section 2707A(b)).
``SEC. 2707A. ACTUARIAL EQUIVALENCE IN BENEFITS PERMITTED.
``(a) Set of Rules of Actuarial Equivalence.--
``(1) Initial determination.--The NAIC is requested to
submit to the Secretary, within 6 months after the date of the
enactment of this chapter, a set of rules which the NAIC
determines is sufficient for determining, in the case of any
group health plan, or a health insurance issuer offering group
health insurance coverage, and for purposes of this section,
the actuarial value of the coverage offered by the plan or
coverage.
``(2) Certification.--If the Secretary determines that the
NAIC has submitted a set of rules that comply with the
requirements of paragraph (1), the Secretary shall certify such
set of rules for use under this chapter. If the Secretary
determines that such a set of rules has not been submitted or
does not comply with such requirements, the Secretary shall
promptly establish a set of rules that meets such requirements.
``(b) Standard Coverage.--
``(1) In general.--A a group health plan, and a health
insurance issuer offering group health insurance coverage,
shall be considered to provide standard coverage consistent
with this subsection if the benefits are determined, in
accordance with the set of actuarial equivalence rules
certified under subsection (a), to have a value that is within
5 percentage points of the target actuarial value for standard
coverage established under paragraph (2).
``(2) Initial determination of target actuarial value for
standard coverage.--
``(A) Initial determination.--
``(i) In general.--The NAIC is requested to
submit to the Secretary, within 6 months after
the date of the enactment of this chapter, a
target actuarial value for standard coverage
equal to the average actuarial value of the
coverage described in clause (ii). No specific
procedure or treatment, or classes thereof, is
required to be considered in such determination
by this chapter or through regulations. The
determination of such value shall be based on a
representative distribution of the population
of eligible employees offered such coverage and
a single set of standardized utilization and
cost factors.
``(ii) Coverage described.--The coverage
described in this clause is coverage for
medically necessary and appropriate services
consisting of medical and surgical services,
medical equipment, preventive services, and
emergency transportation in frontier areas. No
specific procedure or treatment, or classes
thereof, is required to be covered in such a
plan, by this chapter or through regulations.
``(B) Certification.--If the Secretary determines
that the NAIC has submitted a target actuarial value
for standard coverage that complies with the
requirements of subparagraph (A), the Secretary shall
certify such value for use under this chapter. If the
Secretary determines that a target actuarial value has
not been submitted or does not comply with the
requirements of subparagraph (A), the Secretary shall
promptly determine a target actuarial value that meets
such requirements.
``(c) Subsequent Revisions.--
``(1) NAIC.--The NAIC may submit from time to time to the
Secretary revisions of the set of rules of actuarial
equivalence and target actuarial values previously established
or determined under this section if the NAIC determines that
revisions are necessary to take into account changes in the
relevant types of health benefits provisions or in demographic
conditions which form the basis for the set of rules of
actuarial equivalence or the target actuarial values. The
provisions of subsection (a)(2) shall apply to such a revision
in the same manner as they apply to the initial determination of the
set of rules.
``(2) Secretary.--The Secretary may by regulation revise
the set of rules of actuarial equivalence and target actuarial
values from time to time if the Secretary determines such
revisions are necessary to take into account changes described
in paragraph (1).
``SEC. 2707B. ESTABLISHMENT OF PLAN STANDARDS.
``(a) Establishment of General Standards.--
``(1) Role of naic.--The NAIC is requested to submit to the
Secretary, within 9 months after the date of the enactment of
this chapter, model regulations that specify standards for
making qualified group health plans available to small
employers. If the NAIC develops recommended regulations
specifying such standards within such period, the Secretary
shall review the standards. Such review shall be completed
within 60 days after the date the regulations are developed.
Such standards shall serve as the standards under this section,
with such amendments as the Secretary deems necessary. Such
standards shall be nonbinding (except as provided in chapter
4).
``(2) Contingency.--If the NAIC does not develop such model
regulations within the period described in paragraph (1), the
Secretary shall specify, within 15 months after the date of the
enactment of this chapter, model regulations that specify
standards for insurers with regard to making qualified group
health plans available to small employers. Such standards shall
be nonbinding (except as provided in chapter 4).
``(3) Effective date.--The standards specified in the model
regulations shall apply to group health plans and health
insurance issuers offering group health insurance coverage in a
State on or after the respective date the standards are
implemented in the State.
``(b) No Preemption of State Law.--A State may implement standards
for group health plans available, and health insurance issuers offering
group health insurance coverage offered, to small employers that are
more stringent than the standards under this section, except that a
State may not implement standards that prevent the offering of at least
one group health plan that provides standard coverage (as described in
section 2707A(b)).
``SEC. 2707C. RATING LIMITATIONS FOR COMMUNITY-RATED MARKET.
``(a) Standard Premiums With Respect to Community-Rated Eligible
Employees and Eligible Individuals.--
``(1) In general.--Each group health plan offered, and each
health insurance issuer offering group health insurance
coverage, to a small employer shall establish within each
community rating area in which the plan is to be offered, a
standard premium for enrollment of eligible employees and
eligible individuals for the standard coverage (as defined
under section 2707A(b)).
``(2) Establishment of community rating area.--
``(A) In general.--Not later than January 1, 2002,
each State shall, in accordance with subparagraph (B),
provide for the division of the State into 1 or more
community rating areas. The State may revise the
boundaries of such areas from time to time consistent
with this paragraph.
``(B) Geographic area variations.--For purposes of
subparagraph (A), a State--
``(i) may not identify an area that divides
a 3-digit zip code, a county, or all portions
of a metropolitan statistical area;
``(ii) shall not permit premium rates for
coverage offered in a portion of an interstate
metropolitan statistical area to vary based on
the State in which the coverage is offered; and
``(iii) may, upon agreement with one or
more adjacent States, identify multi-State
geographic areas consistent with clauses (i)
and (ii).
``(3) Eligible individuals.--For purposes of this section,
the term `eligible individuals' includes certain uninsured
individuals (as described in section 2707G).
``(b) Uniform Premiums Within Community Rating Areas.--
``(1) In general.--Subject to paragraphs (2) and (3), the
standard premium for each group health plan to which this
section applies shall be the same, but shall not include the
costs of premium processing and enrollment that may vary
depending on whether the method of enrollment is through a
qualified small employer purchasing group, through a small
employer, or through a broker.
``(2) Application to enrollees.--
``(A) In general.--The premium charged for coverage
in a group health plan which covers eligible employees
and eligible individuals shall be the product of--
``(i) the standard premium (established
under paragraph (1));
``(ii) in the case of enrollment other than
individual enrollment, the family adjustment
factor specified under subparagraph (B); and
``(iii) the age adjustment factor
(specified under subparagraph (C)).
``(B) Family adjustment factor.--
``(i) In general.--The standards
established under section 2707B shall specify
family adjustment factors that reflect the
relative actuarial costs of benefit packages
based on family classes of enrollment (as
compared with such costs for individual
enrollment).
``(ii) Classes of enrollment.--For purposes
of this chapter, there are 4 classes of
enrollment:
``(I) Coverage only of an
individual (referred to in this chapter
as the `individual' enrollment or class
of enrollment).
``(II) Coverage of a married couple
without children (referred to in this
chapter as the `couple-only' enrollment
or class of enrollment).
``(III) Coverage of an individual
and one or more children (referred to
in this chapter as the `single parent'
enrollment or class of enrollment).
``(IV) Coverage of a married couple
and one or more children (referred to
in this chapter as the `dual parent'
enrollment or class of enrollment).
``(iii) References to family and couple
classes of enrollment.--In this chapter:
``(I) Family.--The terms `family
enrollment' and `family class of
enrollment' refer to enrollment in a
class of enrollment described in any
subclause of clause (ii) (other than
subclause (I)).
``(II) Couple.--The term `couple
class of enrollment' refers to
enrollment in a class of enrollment
described in subclause (II) or (IV) of
clause (ii).
``(iv) Spouse; married; couple.--
``(I) In general.--In this chapter,
the terms `spouse' and `married' mean,
with respect to an individual, another
individual who is the spouse of, or is
married to, the individual, as
determined under applicable State law.
``(II) Couple.--The term `couple'
means an individual and the
individual's spouse.
``(C) Age adjustment factor.--The Secretary, in
consultation with the NAIC, shall specify uniform age
categories and maximum rating increments for age
adjustment factors that reflect the relative actuarial
costs of benefit packages among enrollees. For
individuals who have attained age 18 but not age 65,
the highest age adjustment factor may not exceed 3
times the lowest age adjustment factor.
``(3) Administrative charges.--
``(A) In general.--In accordance with the standards
established under section 2707B, a group health plan
which covers eligible employees and eligible
individuals may add a separately-stated administrative
charge which is based on identifiable differences in
legitimate administrative costs and which is applied
uniformly for individuals enrolling through the same
method of enrollment. Nothing in this subparagraph may
be construed as preventing a qualified small employer
purchasing group from negotiating a unique
administrative charge with an insurer for a group
health plan.
``(B) Enrollment through a qualified small employer
purchasing group.--In the case of an administrative
charge under subparagraph (A) for enrollment through a
qualified small employer purchasing group, such charge
may not exceed the lowest charge of such plan for
enrollment other than through a qualified small
employer purchasing group in such area.
``(c) Treatment of Negotiated Rate as Community Rate.--
Notwithstanding any other provision of this section, a group health
plan and a health insurance issuer offering health insurance coverage
that negotiates a premium rate (exclusive of any administrative charge
described in subsection (b)(3)) with a qualified small employer
purchasing group in a community rating area shall charge the same
premium rate to all eligible employees and eligible individuals.
``SEC. 2707D. RATING PRACTICES AND PAYMENT OF PREMIUMS.
``(a) Full Disclosure of Rating Practices.--
``(1) In general.--A group health plan and a health
insurance issuer offering health insurance coverage shall fully
disclose rating practices for the plan to the appropriate
certifying authority.
``(2) Notice on expiration.--A group health plan and a
health insurance issuer offering health insurance coverage
shall provide for notice of the terms for renewal of a plan at
the time of the offering of the plan and at least 90 days
before the date of expiration of the plan.
``(3) Actuarial certification.--Each group health plan and
health insurance issuer offering health insurance coverage
shall file annually with the appropriate certifying authority a
written statement by a member of the American Academy of
Actuaries (or other individual acceptable to such authority)
who is not an employee of the group health plan or issuer
certifying that, based upon an examination by the individual
which includes a review of the appropriate records and of the
actuarial assumptions of such plan or insurer and methods used
by the plan or insurer in establishing premium rates and
administrative charges for group health plans--
``(A) such plan or insurer is in compliance with
the applicable provisions of this chapter; and
``(B) the rating methods are actuarially sound.
Each plan and insurer shall retain a copy of such statement at
its principal place of business for examination by any
individual.
``(b) Payment of Premiums.--
``(1) In general.--With respect to a new enrollee in a
group health plan, the plan may require advanced payment of an
amount equal to the monthly applicable premium for the plan at
the time such individual is enrolled.
``(2) Notification of failure to receive premium.--If a
group health plan or a health insurance issuer offering health
insurance coverage fails to receive payment on a premium due
with respect to an eligible employee or eligible individual
covered under the plan involved, the plan or issuer shall
provide notice of such failure to the employee or individual
within the 20-day period after the date on which such premium
payment was due. A plan or issuer may not terminate the
enrollment of an eligible employee or eligible individual
unless such employee or individual has been notified of any
overdue premiums and has been provided a reasonable opportunity
to respond to such notice.
``SEC. 2707E. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS.
``(a) Qualified Small Employer Purchasing Groups Described.--
``(1) In general.--A qualified small employer purchasing
group is an entity that--
``(A) is a nonprofit entity certified under State
law;
``(B) has a membership consisting solely of small
employers;
``(C) is administered solely under the authority
and control of its member employers;
``(D) with respect to each State in which its
members are located, consists of not fewer than the
number of small employers established by the State as
appropriate for such a group;
``(E) offers a program under which qualified group
health plans are offered to eligible employees and
eligible individuals through its member employers and
to certain uninsured individuals in accordance with
section 2707D; and
``(F) an insurer, agent, broker, or any other
individual or entity engaged in the sale of insurance--
``(i) does not form or underwrite; and
``(ii) does not hold or control any right
to vote with respect to.
``(2) State certification.--A qualified small employer
purchasing group formed under this section shall submit an
application to the State for certification. The State shall
determine whether to issue a certification and otherwise ensure
compliance with the requirements of this chapter.
``(3) Special rule.--Notwithstanding paragraph (1)(B), an
employer member of a small employer purchasing group that has
been certified by the State as meeting the requirements of
paragraph (1) may retain its membership in the group if the
number of employees of the employer increases such that the
employer is no longer a small employer.
``(b) Board of Directors.--Each qualified small employer purchasing
group established under this section shall be governed by a board of
directors or have active input from an advisory board consisting of
individuals and businesses participating in the group.
``(c) Domiciliary State.--For purposes of this section, a qualified
small employer purchasing group operating in more than one State shall
be certified by the State in which the group is domiciled.
``(d) Membership.--
``(1) In general.--A qualified small employer purchasing
group shall accept all small employers and certain uninsured
individuals residing within the area served by the group as
members if such employers or individuals request such
membership.
``(2) Voting.--Members of a qualified small employer
purchasing group shall have voting rights consistent with the
rules established by the State.
``(e) Duties of Qualified Small Employer Purchasing Groups.--Each
qualified small employer purchasing group shall--
``(1) enter into agreements with insurers offering
qualified group health plans;
``(2) enter into agreements with small employers under
section 2707F;
``(3) enroll only eligible employees, eligible individuals,
and certain uninsured individuals in qualified group health
plans, in accordance with section 2707G;
``(4) provide enrollee information to the State;
``(5) meet the marketing requirements under section 2707I;
and
``(6) carry out other functions provided for under this
chapter.
``(f) Limitation on Activities.--A qualified small employer
purchasing group shall not--
``(1) perform any activity involving approval or
enforcement of payment rates for providers;
``(2) perform any activity (other than the reporting of
noncompliance) relating to compliance of qualified group health
plans with the requirements of this chapter;
``(3) assume financial risk in relation to any such health
plan; or
``(4) perform other activities identified by the State as
being inconsistent with the performance of its duties under
this chapter.
``(g) Rules of Construction.--
``(1) Establishment not required.--Nothing in this section
shall be construed as requiring--
``(A) that a State organize, operate or otherwise
establish a qualified small employer purchasing group,
or otherwise require the establishment of purchasing
groups; and
``(B) that there be only one qualified small
employer purchasing group established with respect to a
community rating area.
``(2) Single organization serving multiple areas and
states.--Nothing in this section shall be construed as
preventing a single entity from being a qualified small
employer purchasing group in more than one community rating
area or in more than one State.
``(3) Voluntary participation.--Nothing in this section
shall be construed as requiring any individual or small
employer to purchase a qualified group health plan exclusively
through a qualified small employer purchasing group.
``SEC. 2707F. AGREEMENTS WITH SMALL EMPLOYERS.
``(a) In General.--A qualified small employer purchasing group
shall offer to enter into an agreement under this section with each
small employer that employs eligible employees in the area served by
the group.
``(b) Payroll Deduction.--
``(1) In general.--Under an agreement under this section
between a small employer and a qualified small employer
purchasing group, the small employer shall deduct premiums from
an eligible employee's wages.
``(2) Additional premiums.--If the amount withheld under
paragraph (1) is not sufficient to cover the entire cost of the
premiums, the eligible employee shall be responsible for paying
directly to the qualified small employer purchasing group the
difference between the amount of such premiums and the amount
withheld.
``SEC. 2707G. ENROLLING ELIGIBLE EMPLOYEES, ELIGIBLE INDIVIDUALS, AND
CERTAIN UNINSURED INDIVIDUALS IN QUALIFIED GROUP HEALTH
PLANS.
``(a) In General.--Each qualified small employer purchasing group
shall offer--
``(1) eligible employees,
``(2) eligible individuals, and
``(3) certain uninsured individuals,
the opportunity to enroll in any qualified group health plan which has
an agreement with the qualified small employer purchasing group for the
community rating area in which such employees and individuals reside.
``(b) Uninsured Individuals.--For purposes of this section, an
individual is described in subsection (a)(3) if such individual is an
uninsured individual who is not an eligible employee of a small
employer that is a member of a qualified small employer purchasing
group or a dependent of such individual.
``SEC. 2707H. RECEIPT OF PREMIUMS.
``(a) Enrollment Charge.--The amount charged by a qualified small
employer purchasing group for coverage under a qualified group health
plan shall be equal to the sum of--
``(1) the premium rate offered by such health plan;
``(2) the administrative charge for such health plan; and
``(3) the purchasing group administrative charge for
enrollment of eligible employees, eligible individuals and
certain uninsured individuals through the group.
``(b) Disclosure of Premium Rates and Administrative Charges.--Each
qualified small employer purchasing group shall, prior to the time of
enrollment, disclose to enrollees and other interested parties the
premium rate for a qualified group health plan, the administrative
charge for such plan, and the administrative charge of the group,
separately.
``SEC. 2707I. MARKETING ACTIVITIES.
``Each qualified small employer purchasing group shall market
qualified group health plans to members through the entire community
rating area served by the purchasing group.
``SEC. 2707J. GRANTS TO STATES AND QUALIFIED SMALL EMPLOYER PURCHASING
GROUPS.
``(a) In General.--The Secretary shall award grants to States and
small employer purchasing groups to assist such States and groups in
planning, developing, and operating qualified small employer purchasing
groups.
``(b) Application Requirements.--To be eligible to receive a grant
under this section, a State or small employer purchasing group shall
prepare and submit to the Secretary an application in such form, at
such time, and containing such information, certifications, and
assurances as the Secretary shall reasonably require.
``(c) Use of Funds.--Amounts awarded under this section may be used
to finance the costs associated with planning, developing, and
operating a qualified small employer purchasing group. Such costs may
include the costs associated with--
``(1) engaging in education and outreach efforts to inform
small employers, insurers, and the public about the small
employer purchasing group;
``(2) soliciting bids and negotiating with insurers to make
available group health plans;
``(3) preparing the documentation required to receive
certification by the Secretary as a qualified small employer
purchasing group; and
``(4) such other activities determined appropriate by the
Secretary.
``(d) Authorization of Appropriations.--There are authorized to be
appropriated for awarding grants under this section such sums as may be
necessary.
``SEC. 2707K. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS ESTABLISHED BY
A STATE.
``A State may establish a system in all or part of the State under
which qualified small employer purchasing groups are the sole mechanism
through which health care coverage for the eligible employees of small
employers shall be purchased or provided.
``SEC. 2707L. EFFECTIVE DATES.
``(a) In General.--Except as provided in this chapter, the
provisions of this chapter are effective on the date of the enactment
of this chapter.
``(b) Exception.--The provisions of section 2707C(b) shall apply to
contracts which are issued, or renewed, after the date which is 18
months after the date of the enactment of this chapter.
``Subchapter B--Required Coverage Options for Eligible Employees and
Dependents of Small Employers
``SEC. 2708. REQUIRING SMALL EMPLOYERS TO OFFER COVERAGE FOR ELIGIBLE
INDIVIDUALS.
``(a) Requirement To Offer.--Each small employer shall make
available with respect to each eligible employee a group health plan
under which--
``(1) coverage of each eligible individual with respect to
such an eligible employee may be elected on an annual basis for
each plan year;
``(2) coverage is provided for at least the standard
coverage specified in section 2707A(b); and
``(3) each eligible employee electing such coverage may
elect to have any premiums owed by the employee collected
through payroll deduction.
``(b) No Employer Contribution Required.--An employer is not
required under subsection (a) to make any contribution to the cost of
coverage under a group health plan described in such subsection.
``(c) Special Rules.--
``(1) Exclusion of new employers and certain very small
employers.--Subsection (a) shall not apply to any small
employer for any plan year if, as of the beginning of such plan
year--
``(A) such employer (including any predecessor
thereof) has been an employer for less than 2 years;
``(B) such employer has no more than 2 eligible
employees; or
``(C) no more than 2 eligible employees are not
covered under any group health plan.
``(2) Exclusion of family members.--Under such procedures
as the Secretary may prescribe, any relative of a small
employer may be, at the election of the employer, excluded from
consideration as an eligible employee for purposes of applying
the requirements of subsection (a). In the case of a small
employer that is not an individual, an employee who is a
relative of a key employee (as defined in section 416(i)(1) of
the Internal Revenue Code of 1986) of the employer may, at the
election of the key employee, be considered a relative
excludable under this paragraph.
``(3) Optional application of waiting period.--A group
health plan and a health insurance issuer offering group health
insurance coverage shall not be treated as failing to meet the
requirements of subsection (a) solely because a period of
service by an eligible employee of not more than 60 days is
required under the plan for coverage under the plan of eligible
individuals with respect to such employee.
``(d) Construction.--Nothing in this section shall be construed as
limiting the group health plans, or types of coverage under such a
plan, that an employer may offer to an employee.
``SEC. 2708A. COMPLIANCE WITH APPLICABLE REQUIREMENTS THROUGH MULTIPLE
EMPLOYER HEALTH ARRANGEMENTS.
``(a) In General.--In any case in which an eligible employee is,
for any plan year, a participant in a group health plan which is a
multiemployer plan, the requirements of section 2722(a) shall be deemed
to be met with respect to such employee for such plan year if the
employer requirements of subsection (b) are met with respect to the
eligible employee, irrespective of whether, or to what extent, the
employer makes employer contributions on behalf of the eligible
employee.
``(b) Employer Requirements.--The employer requirements of this
subsection are met under a group health plan with respect to an
eligible employee if--
``(1) the employee is eligible under the plan to elect
coverage on an annual basis and is provided a reasonable
opportunity to make the election in such form and manner and at
such times as are provided by the plan;
``(2) coverage is provided for at least the standard
coverage specified in section 2707A(b);
``(3) the employer facilitates collection of any employee
contributions under the plan and permits the employee to elect
to have employee contributions under the plan collected through
payroll deduction; and
``(4) in the case of a plan to which subchapter A does not
otherwise apply, the employer provides to the employee a
summary plan description described in section 102(a)(1) of the
Employee Retirement Income Security Act of 1974 in the form and
manner and at such times as are required under such subchapter
A with respect to employee welfare benefit plans.
``Subchapter C--Required Coverage Options for Individuals Insured
Through Association Plans
``SEC. 2709. TREATMENT OF QUALIFIED ASSOCIATION PLANS.
``(a) General Rule.--For purposes of this chapter, in the case of a
qualified association plan--
``(1) except as otherwise provided in this subchapter, the
plan shall meet all applicable requirements of chapter 1 and
chapter 2 for group health plans offered to and by small
employers;
``(2) if such plan is certified as meeting such
requirements and the requirements of this subchapter, such plan
shall be treated as a plan established and maintained by a
small employer, and individuals enrolled in such plan shall be
treated as eligible employees; and
``(3) any individual who is a member of the association not
enrolling in the plan shall not be treated as an eligible
employee solely by reason of membership in such association.
``(b) Election To Be Treated as Purchasing Cooperative.--Subsection
(a) shall not apply to a qualified association plan if--
``(1) the health insurance issuer makes an irrevocable
election to be treated as a qualified small employer purchasing
group for purposes of section 2707D; and
``(2) such sponsor meets all requirements of this chapter
applicable to a purchasing cooperative.
``SEC. 2709A. QUALIFIED ASSOCIATION PLAN DEFINED.
``(a) General Rule.--For purposes of this chapter, a plan is a
qualified association plan if the plan is a multiple employer welfare
arrangement or similar arrangement--
``(1) which is maintained by a qualified association;
``(2) which has at least 500 participants in the United
States;
``(3) under which the benefits provided consist solely of
medical care (as defined in section 213(d) of the Internal
Revenue Code of 1986);
``(4) which may not condition participation in the plan, or
terminate coverage under the plan, on the basis of the health
status or health claims experience of any employee or member or
dependent of either;
``(5) which provides for bonding, in accordance with
regulations providing rules similar to the rules under section
412, of all persons operating or administering the plan or
involved in the financial affairs of the plan; and
``(6) which notifies each participant or provider that it
is certified as meeting the requirements of this chapter
applicable to it.
``(b) Self-Insured Plans.--In the case of a plan which is not fully
insured (within the meaning of section 514(b)(6)(D)), the plan shall be
treated as a qualified association plan only if--
``(1) the plan meets minimum financial solvency and cash
reserve requirements for claims which are established by the
Secretary and which shall be in lieu of any other such
requirements under this chapter;
``(2) the plan provides an annual funding report (certified
by an independent actuary) and annual financial statements to
the Secretary and other interested parties; and
``(3) the plan appoints a plan sponsor who is responsible
for operating the plan and ensuring compliance with applicable
Federal and State laws.
``(c) Certification.--
``(1) In general.--A plan shall not be treated as a
qualified association plan for any period unless there is in
effect a certification by the Secretary that the plan meets the
requirements of this subchapter. For purposes of this chapter,
the Secretary shall be the appropriate certifying authority
with respect to the plan.
``(2) Fee.--The Secretary shall require a $5,000 fee for
the original certification under paragraph (1) and may charge a
reasonable annual fee to cover the costs of processing and
reviewing the annual statements of the plan.
``(3) Expedited procedures.--The Secretary may by
regulation provide for expedited registration, certification,
and comment procedures.
``(4) Agreements.--The Secretary of Labor may enter into
agreements with the States to carry out the Secretary's
responsibilities under this subchapter.
``(d) Availability.--Notwithstanding any other provision of this
chapter, a qualified association plan may limit coverage to individuals
who are members of the qualified association establishing or
maintaining the plan, an employee of such member, or a dependent of
either.
``(e) Special Rules for Existing Plans.--In the case of a plan in
existence on January 1, 2001--
``(1) the requirements of subsection (a) (other than
paragraphs (4), (5), and (6) thereof) shall not apply;
``(2) no original certification shall be required under
this subchapter; and
``(3) no annual report or funding statement shall be
required before January 1, 2003, but the plan shall file with
the Secretary a description of the plan and the name of the
health insurance issuer.
``SEC. 2709B. DEFINITIONS AND SPECIAL RULES.
``(a) Qualified Association.--For purposes of this subchapter, the
term `qualified association' means any organization which--
``(1) is organized and maintained in good faith by a trade
association, an industry association, a professional
association, a chamber of commerce, a religious organization, a
public entity association, or other business association
serving a common or similar industry;
``(2) is organized and maintained for substantial purposes
other than to provide a health plan;
``(3) has a constitution, bylaws, or other similar
governing document which states its purpose; and
``(4) receives a substantial portion of its financial
support from its active, affiliated, or federation members.
``(b) Coordination.--The term `qualified association plan' shall
not include a plan to which subchapter B applies.
``SEC. 2709C. SPECIAL RULE FOR CHURCH, MULTIEMPLOYER, AND COOPERATIVE
PLANS.
``(a) General Rule.--For purposes of this chapter, in the case of a
group health plan to which this section applies--
``(1) except as otherwise provided in this subchapter, the
plan shall be required to meet all applicable requirements of
subchapter A and subchapter B for group health plans offered to
and by small employers;
``(2) if such plan is certified as meeting such
requirements, such plan shall be treated as a plan established
and maintained by a small employer and individuals enrolled in
such plan shall be treated as eligible employees; and
``(3) any individual eligible to enroll in the plan who
does not enroll in the plan shall not be treated as an eligible
employee solely by reason of being eligible to enroll in the
plan.
``(b) Modified Standards.--
``(1) Certifying authority.--For purposes of this chapter,
the Secretary shall be the appropriate certifying authority
with respect to a plan to which this section applies.
``(2) Availability.--Rules similar to the rules of
subsection (e) of section 2709A shall apply to a plan to which
this section applies.
``(3) Access.--An employer which, pursuant to a collective
bargaining agreement, offers an employee the opportunity to
enroll in a plan described in subsection (c)(2) shall not be
required to make any other plan available to the employee.
``(4) Treatment under state laws.--A church plan described
in subsection (c)(1) which is certified as meeting the
requirements of this section shall not be deemed to be a
multiple employer welfare arrangement or an insurance company
or other insurer, or to be engaged in the business of
insurance, for purposes of any State law purporting to regulate
insurance companies or insurance contracts.
``(c) Plans to Which Section Applies.--This section shall apply to
a health plan which--
``(1) is a church plan (as defined in section 414(e) of the
Internal Revenue Code of 1986) which has at least 100
participants in the United States;
``(2) is a multiemployer plan which is maintained by a
health plan sponsor described in section 3(16)(B)(iii) of the
Employee Retirement Income Security Act of 1974 and which has
at least 500 participants in the United States; or
``(3) is a plan which is maintained by a rural electric
cooperative or a rural telephone cooperative association and
which has at least 500 participants in the United States.''.
(b) Conforming Amendments.--Section 2791(d) of the Public Health
Service Act (42 U.S.C. 300gg-91(d)) is amended by adding at the end the
following:
``(15) Eligible employee.--The term `eligible employee'
means, with respect to an employer, an employee who normally
performs on a monthly basis at least 30 hours of service per
week for that employer.
``(16) Eligible individual.--The term `eligible individual'
means, with respect to an eligible employee, such employee, and
any dependent of such employee.
``(17) NAIC.--The term `NAIC' means the National
Association of Insurance Commissioners.
``(18) Qualified group health plan.--The term `qualified
group health plan' shall have the meaning given the term in
section 2707.''.
SEC. 403. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE
INDIVIDUAL MARKET.
The first subpart 3 of part B of title XXVII of the Public Health
Service Act (42 U.S.C. 300gg-51 et seq.) is amended--
(1) by redesignating such subpart as subpart 2; and
(2) by adding at the end the following:
``SEC. 2753. APPLICABILITY OF GENERAL INSURANCE MARKET REFORMS.
``The provisions of chapter 2 of subpart 2 of part A shall apply to
health insurance coverage offered by a health insurance issuer in the
individual market in the same manner as they apply to health insurance
coverage offered by a health insurance issuer in connection with a
group health plan in the small or large group market.''.
SEC. 404. EFFECTIVE DATE.
The amendments made by this subtitle shall apply with respect to
health insurance coverage offered, sold, issued, renewed, in effect, or
operated on or after January 1, 2002.
Subtitle B--Tax Provisions
SEC. 411. ENFORCEMENT WITH RESPECT TO HEALTH INSURANCE ISSUERS.
(a) In General.--Chapter 43 of the Internal Revenue Code of 1986
(relating to qualified pension, etc., plans) is amended by adding at
the end the following:
``SEC. 4980F. FAILURE OF INSURER TO COMPLY WITH CERTAIN STANDARDS FOR
HEALTH INSURANCE COVERAGE.
``(a) Imposition of Tax.--
``(1) In general.--There is hereby imposed a tax on the
failure of a health insurance issuer to comply with the
requirements applicable to such issuer under--
``(A) chapter 2 of subpart 2 of part A of title
XXVII of the Public Health Service Act;
``(B) section 2753 of the Public Health Service
Act; and
``(C) subpart C of part 7 of subtitle B of title I
of the Employee Retirement Income Security Act of 1974.
``(2) Exception.--Paragraph (1) shall not apply to a
failure by a health insurance issuer in a State if the
Secretary of Health and Human Services determines that the
State has in effect a regulatory enforcement mechanism that
provides adequate sanctions with respect to such a failure by
such an issuer.
``(b) Amount of Tax.--
``(1) In general.--Subject to paragraph (2), the amount of
the tax imposed by subsection (a) shall be $100 for each day
during which such failure persists for each person to which
such failure relates. A rule similar to the rule of section
4980D(b)(3) shall apply for purposes of this section.
``(2) Limitation.--The amount of the tax imposed by
subsection (a) for a health insurance issuer with respect to
health insurance coverage shall not exceed 25 percent of the
amounts received under the coverage for coverage during the
period such failure persists.
``(c) Liability for Tax.--The tax imposed by this section shall be
paid by the health insurance issuer.
``(d) Limitations on Amount of Tax.--
``(1) Tax not to apply to failures corrected within 30
days.--No tax shall be imposed by subsection (a) on any failure
if--
``(A) such failure was due to reasonable cause and
not to willful neglect, and
``(B) such failure is corrected during the 30-day
period (or such period as the Secretary may determine
appropriate) beginning on the first date the health
insurance issuer knows, or exercising reasonable
diligence could have known, that such failure existed.
``(2) Waiver by secretary.--In the case of a failure which
is due to reasonable cause and not to willful neglect, the
Secretary may waive part or all of the tax imposed by
subsection (a) to the extent that the payment of such tax would
be excessive relative to the failure involved.
``(e) Definitions.--For purposes of this section, the terms `health
insurance coverage' and `health insurance issuer' have the meanings
given such terms in section 2791 of the Public Health Service Act and
section 733 of the Employee Retirement Income Security Act of 1974.''.
(b) Conforming Amendment.--The table of sections for such chapter
43 is amended by adding at the end the following new item:
``Sec. 4980F. Failure of insurer to
comply with certain standards
for health insurance
coverage.''.
SEC. 412. ENFORCEMENT WITH RESPECT TO SMALL EMPLOYERS.
(a) In General.--Chapter 47 of the Internal Revenue Code of 1986
(relating to excise taxes on certain group health plans) is amended by
inserting after section 5000 the following new section:
``SEC. 5000A. SMALL EMPLOYER REQUIREMENTS.
``(a) General Rule.--There is hereby imposed a tax on the failure
of any small employer to comply with the requirements applicable to
such employer under--
``(1) subchapter C of chapter 2 of subpart 2 of part A of
title XXVII of the Public Health Service Act;
``(2) section 2753 of the Public Health Service Act; and
``(3) chapter 2 of subpart C of part 7 of subtitle B of
title I of the Employee Retirement Income Security Act of 1974.
``(b) Amount of Tax.--The amount of tax imposed by subsection (a)
shall be equal to $100 for each day for each individual for which such
a failure occurs.
``(c) Limitation on Tax.--
``(1) Tax not to apply where failures corrected within 30
days.--No tax shall be imposed by subsection (a) with respect
to any failure if--
``(A) such failure was due to reasonable cause and
not to willful neglect, and
``(B) such failure is corrected during the 30-day
period (or such period as the Secretary may determine
appropriate) beginning on the 1st date any of the
individuals on whom the tax is imposed knew, or
exercising reasonable diligence would have known, that
such failure existed.
``(2) Waiver by secretary.--In the case of a failure which
is due to reasonable cause and not to willful neglect, the
Secretary may waive part or all of the tax imposed by
subsection (a) to the extent that the payment of such tax would
be excessive relative to the failure involved.''.
(b) Conforming Amendment.--The table of sections for such chapter
47 is amended by adding at the end the following new item:
``Sec. 5000A. Small employer
requirements.''.
SEC. 413. ENFORCEMENT BY EXCISE TAX ON QUALIFIED ASSOCIATIONS.
(a) In General.--Chapter 43 of the Internal Revenue Code of 1986
(relating to qualified pension, etc., plans), as amended by section
411, is amended by adding at the end the following new section:
``SEC. 4980G. FAILURE OF QUALIFIED ASSOCIATIONS, ETC., TO COMPLY WITH
CERTAIN STANDARDS FOR HEALTH INSURANCE COVERAGE.
``(a) Imposition of Tax.--
``(1) In general.--There is hereby imposed a tax on the
failure of a qualified association (as defined in section 2709A
of the Public Health Service Act and section 723A of the
Employee Retirement Income Security Act of 1974), church plan
(as defined in section 414(e)), multiemployer plan, or plan
maintained by a rural electric cooperative or a rural telephone
cooperative association (within the meaning of section 3(40) of
the Employee Retirement Income Security Act of 1974) to comply
with the requirements applicable to such association or plans
under--
``(A) subchapter C of chapter 2 of subpart 2 of
part A of title XXVII of the Public Health Service Act;
``(B) section 2753 of the Public Health Service
Act; and
``(C) subchapters A and B of chapter 3 of subpart C
of part 7 of the Employee Retirement Income Security
Act of 1974.
``(2) Exception.--Paragraph (1) shall not apply to a
failure by a qualified association, church plan, multiemployer
plan, or plan maintained by a rural electric cooperative or a
rural telephone cooperative association in a State if the
Secretary of Health and Human Services determines that the
State has in effect a regulatory enforcement mechanism that
provides adequate sanctions with respect to such a failure by
such a qualified association or plan.
``(b) Amount of Tax.--The amount of the tax imposed by subsection
(a) shall be $100 for each day during which such failure persists for
each person to which such failure relates. A rule similar to the rule
of section 4980D(b)(3) shall apply for purposes of this section.
``(c) Liability for Tax.--The tax imposed by this section shall be
paid by the qualified association or plan.
``(d) Limitations on Amount of Tax.--
``(1) Tax not to apply to failures corrected within 30
days.--No tax shall be imposed by subsection (a) on any failure
if--
``(A) such failure was due to reasonable cause and
not to willful neglect, and
``(B) such failure is corrected during the 30-day
period (or such period as the Secretary may determine
appropriate) beginning on the first date the qualified
association, church plan, multiemployer plan, or plan
maintained by a rural electric cooperative or a rural
telephone cooperative association knows, or exercising
reasonable diligence could have known, that such
failure existed.
``(2) Waiver by secretary.--In the case of a failure which
is due to reasonable cause and not to willful neglect, the
Secretary may waive part or all of the tax imposed by
subsection (a) to the extent that the payment of such tax would
be excessive relative to the failure involved.''.
(b) Conforming Amendment.--The table of sections for such chapter
43, as amended by section 411, is amended by adding at the end the
following new item:
``Sec. 4980G. Failure of qualified
associations, etc., to comply
with certain standards for
health insurance plans.''.
SEC. 414. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-EMPLOYED
INDIVIDUALS.
(a) Full Deduction in 2002.--The table contained in section
162(l)(1)(B) of the Internal Revenue Code of 1986 (relating to special
rules for health insurance costs of self-employed individuals) is
amended--
(1) by striking ``2001'' and inserting ``2000'';
(2) by striking ``2002'' and all that follows; and
(3) by adding at the end the following:
``2001..................... 70
``2002 and thereafter...... 100.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
SEC. 415. AMENDMENTS TO COBRA.
(a) Amendments to Internal Revenue Code of 1986.--
(1) Lower cost coverage options.--Subparagraph (A) of
section 4980B(f)(2) of the Internal Revenue Code of 1986
(relating to continuation coverage requirements of group health
plans) is amended to read as follows:
``(A) Type of benefit coverage.--The coverage must
consist of coverage which, as of the time the coverage
is being provided--
``(i) is identical to the coverage provided
under the plan to similarly situated
beneficiaries under the plan with respect to
whom a qualifying event has not occurred,
``(ii) is so identical, except such
coverage is offered with an annual $1,000
deductible, and
``(iii) is so identical, except such
coverage is offered with an annual $3,000
deductible.
If coverage under the plan is modified for any group of
similarly situated beneficiaries, the coverage shall
also be modified in the same manner for all individuals
who are qualified beneficiaries under the plan pursuant
to this subsection in connection with such group.''.
(2) Termination of cobra coverage after eligible for
employer-based coverage for 90 days.--Clause (iv) of section
4980B(f)(2)(B) of the Internal Revenue Code of 1986 (relating
to period of coverage) is amended--
(A) by striking ``or'' at the end of subclause (I);
(B) by redesignating subclause (II) as subclause
(III); and
(C) by inserting after subclause (I) the following:
``(II) eligible for such employer-
based coverage for more than 90 days,
or''.
(3) Reduction of period of coverage.--Clause (i) of section
4980B(f)(2)(B) of the Internal Revenue Code of 1986 (relating
to period of coverage) is amended by striking ``18 months''
each place it appears and inserting ``24 months''.
(4) Continuation coverage for dependent child.--Clause (i)
of section 4980B(f)(2)(B) of the Internal Revenue Code of 1986
is amended by adding at the end the following:
``(VI) Special rule for dependent
child.--In the case of a qualifying
event described in paragraph (3)(E),
the date that is 36 months after the
date on which the dependent child of
the covered employee ceases to be a
dependent child under the plan.''.
(b) Amendments to Employee Retirement Income Security Act of
1974.--
(1) Lower cost coverage options.--Paragraph (1) of section
602 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1162(1)) (relating to continuation coverage requirements
of group health plans) is amended to read as follows:
``(1) Type of benefit coverage.--The coverage must consist
of coverage which, as of the time the coverage is being
provided--
``(A) is identical to the coverage provided under
the plan to similarly situated beneficiaries under the
plan with respect to whom a qualifying event has not
occurred,
``(B) is so identical, except such coverage is
offered with an annual $1,000 deductible, and
``(C) is so identical, except such coverage is
offered with an annual $3,000 deductible.
If coverage under the plan is modified for any group of
similarly situated beneficiaries, the coverage shall also be
modified in the same manner for all individuals who are
qualified beneficiaries under the plan pursuant to this
subsection in connection with such group.''.
(2) Termination of cobra coverage after eligible for
employer-based coverage for 90 days.--Subparagraph (D) of
section 602(2) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1162(2)(D)) (relating to period of coverage)
is amended--
(A) by striking ``or'' at the end of clause (i);
(B) by redesignating clause (ii) as clause (iii);
and
(C) by inserting after clause (i) the following:
``(ii) eligible for such employer-based
coverage for more than 90 days, or''.
(3) Reduction of period of coverage.--Subparagraph (A) of
section 602(2) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1162(2)(A)) (relating to period of coverage)
is amended by striking ``18 months'' each place it appears and
inserting ``24 months''.
(4) Continuation coverage for dependent child.--
Subparagraph (A) of section 602(2) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1162(2)(A)) is amended
by adding at the end the following:
``(vi) Special rule for dependent child.--
In the case of a qualifying event described in
section 603(5), the date that is 36 months
after the date on which the dependent child of
the covered employee ceases to be a dependent
child under the plan.''.
(c) Amendments to Public Health Service Act.--
(1) Lower cost coverage options.--Paragraph (1) of section
2202 of the Public Health Service Act (42 U.S.C. 300bb-2(1))
(relating to continuation coverage requirements of group health
plans) is amended to read as follows:
``(1) Type of benefit coverage.--The coverage must consist
of coverage which, as of the time the coverage is being
provided--
``(A) is identical to the coverage provided under
the plan to similarly situated beneficiaries under the
plan with respect to whom a qualifying event has not
occurred,
``(B) is so identical, except such coverage is
offered with an annual $1,000 deductible, and
``(C) is so identical, except such coverage is
offered with an annual $3,000 deductible.
If coverage under the plan is modified for any group of
similarly situated beneficiaries, the coverage shall also be
modified in the same manner for all individuals who are
qualified beneficiaries under the plan pursuant to this
subsection in connection with such group.''.
(2) Termination of cobra coverage after eligible for
employer-based coverage for 90 days.--Subparagraph (D) of
section 2202(2) of the Public Health Service Act (42 U.S.C.
300bb-2(2)(D)) (relating to period of coverage) is amended--
(A) by striking ``or'' at the end of clause (i);
(B) by redesignating clause (ii) as clause (iii);
and
(C) by inserting after clause (i) the following:
``(ii) eligible for such employer-based
coverage for more than 90 days, or''.
(3) Reduction of period of coverage.--Subparagraph (A) of
section 2202(2) of the Public Health Service Act (42 U.S.C.
300bb-2(2)(A)) (relating to period of coverage) is amended by
striking ``18 months'' each place it appears and inserting ``24
months''.
(4) Continuation coverage for dependent child.--
Subparagraph (A) of section 2202(2) of the Public Health
Service Act (42 U.S.C. 300bb-2(2)(A)) is amended by adding at
the end the following:
``(vi) Special rule for dependent child.--
In the case of a qualifying event described in
section 2203(5), the date that is 36 months
after the date on which the dependent child of
the covered employee ceases to be a dependent
child under the plan.''.
(d) Effective Date.--The amendments made by this section shall
apply to qualifying events occurring after the date of the enactment of
this Act.
TITLE V--PRIMARY AND PREVENTIVE CARE SERVICES
SEC. 501. IMPROVEMENT OF MEDICARE PREVENTIVE CARE SERVICES.
(a) Waiver of Coinsurance for Screening and Diagnostic
Mammography.--
(1) In general.--Section 1833(a)(1) of the Social Security
Act (42 U.S.C. 1395l(a)(1)), as amended by section 223(c) of
the Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (as enacted into law by section 1(a)(6)
of Public Law 106-554), is amended--
(A) by striking ``and (U)'' and inserting ``(U)'';
and
(B) by striking the semicolon at the end and
inserting the following: ``, and (V) with respect to
screening mammography (as defined in section 1861(jj))
and diagnostic mammography, 100 percent of the payment
basis determined under section 1848;''.
(2) Waiver of coinsurance in outpatient hospital
settings.--The third sentence of section 1866(a)(2)(A) of the
Social Security Act (42 U.S.C. 1395cc(a)(2)(A)) is amended by
inserting after ``1861(s)(10)(A)'' the following: ``, with
respect to screening mammography (as defined in section
1861(jj)) and diagnostic mammography,''.
(b) Coverage of Insulin Pumps.--
(1) Inclusion as item of durable medical equipment.--
Section 1861(n) of the Social Security Act (42 U.S.C. 1395x(n))
is amended by inserting before the semicolon the following: ``,
and includes insulin infusion pumps (as defined in subsection
(ww)) prescribed by the physician of an individual with Type I
diabetes who is experiencing severe swings of high and low
blood glucose levels and has successfully completed a training
program that meets standards established by the Secretary or
who has used such a pump without interruption for at least 18
months immediately before enrollment under part B''.
(2) Definition of insulin infusion pump.--Section 1861 of
the Social Security Act (42 U.S.C. 1395x), as amended by
section 105(b) of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (as enacted into law by
section 1(a)(6) of Public Law 106-554), is amended by adding at
the end the following:
``Insulin Infusion Pump
``(ww) The term `insulin infusion pump' means an infusion pump,
approved by the Federal Food and Drug Administration, that provides for
the computerized delivery of insulin for individuals with diabetes in
lieu of multiple daily manual insulin injections.''.
(3) Payment for supplies relating to infusion pumps.--
Section 1834(a)(2)(A) of the Social Security Act (42 U.S.C.
1395m(a)(2)(A)) is amended--
(A) in clause (ii), by striking ``or'' at the end;
(B) in clause (iii), by inserting ``or'' at the
end; and
(C) by inserting after clause (iii) the following:
``(iv) which is an accessory used in
conjunction with an insulin infusion pump (as
defined in section 1861(ww)),''.
(c) Annual Screening Pap Smear and Pelvic Exams.--
(1) In general.--Section 1861(nn) of the Social Security
Act (42 U.S.C. 1395x(nn), as amended by section 101(a) of the
Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (as enacted into law by section 1(a)(6)
of Public Law 106-554), is amended to read as follows:
``Screening Pap Smear; Screening Pelvic Exam
``(nn)(1) The term `screening pap smear' means a diagnostic
laboratory test consisting of a routine exfoliative cytology test
(Papanicolaou test) provided to a woman for the purpose of early
detection of cervical or vaginal cancer and includes a physician's
interpretation of the results of the test, if the individual involved
has not had such a test during the preceding year.
``(2) The term `screening pelvic exam' means a pelvic examination
provided to a woman if the woman involved has not had such an
examination during the preceding year, and includes a clinical breast
examination, relevant history-taking, medical decision-making, and
patient counseling.''.
(2) Waiver of coinsurance for pelvic exams.--Section
1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)),
as amended by subsection (a)(1) and section 223(c) of the
Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (as enacted into law by section 1(a)(6)
of Public Law 106-554), is amended--
(A) by striking ``and (V)'' and inserting ``(V)'';
and
(B) by striking the semicolon at the end and
inserting the following: ``, and (W) with respect to
services described in section 1861(nn)(2), 100 percent
of the payment basis determined under section 1848;''.
(e) Effective Date.--The amendments made by this section shall
apply to items and services furnished on or after the first day of the
first calendar quarter beginning on or after the date that is 6 months
after the date of enactment of this Act.
SEC. 502. AUTHORIZATION OF APPROPRIATIONS FOR HEALTHY START PROGRAM.
(a) Authorization of Appropriations.--To enable the Secretary of
Health and Human Services to carry out the healthy start program
established under the authority of section 301 of the Public Health
Service Act (42 U.S.C. 241), there are authorized to be appropriated
$115,000,000 for fiscal year 2002, $150,000,000 for fiscal year 2003,
$250,000,000 for fiscal year 2004, and $300,000,000 for each of the
fiscal years 2005 through 2007.
(b) Model Projects.--
(1) In general.--Of the amount appropriated under
subsection (a) for a fiscal year, the Secretary of Health and
Human Services shall reserve $50,000,000 for such fiscal year
to be distributed to model projects determined to be eligible
under paragraph (2).
(2) Eligibility.--To be eligible to receive funds under
paragraph (1), a model project shall--
(A) have been one of the original 15 Healthy Start
projects; and
(B) be determined by Secretary of Health and Human
Services to have been successful in serving needy areas
and reducing infant mortality.
(3) Use of projects.--A model project that receives funding
under paragraph (1) shall be utilized as a resource center to
assist in the training of those individuals to be involved in
projects established under subsection (c). It shall be the goal
of such projects to become self-sustaining within the project
area.
(4) Provision of matching funds.--In providing assistance
to a project under this subsection, the Secretary of Health and
Human Services shall ensure that--
(A) with respect to fiscal year 2002, the project
shall make non-Federal contributions (in cash or in-
kind) towards the costs of such project in an amount
equal to not less than 20 percent of such costs;
(B) with respect to fiscal year 2003, the project
shall make non-Federal contributions (in cash or in-
kind) towards the costs of such project in an amount
equal to not less than 30 percent of such costs;
(C) with respect to fiscal year 2004, the project
shall make non-Federal contributions (in cash or in-
kind) towards the costs of such project in an amount
equal to not less than 40 percent of such costs; and
(D) with respect to each of the fiscal years 2005
through 2007, the project shall make non-Federal
contributions (in cash or in-kind) towards the costs of
such project in an amount equal to not less than 50
percent of such costs for each such fiscal year.
(c) New Projects.--Of the amount appropriated under subsection (a)
for a fiscal year, the Secretary of Health and Human Services shall
allocate amounts remaining after the reservation under subsection (b)
for such fiscal year among new demonstration projects and existing
special projects that have proven to be successful as determined by the
Secretary of Health and Human Services. Such projects shall be
community-based and shall attempt to replicate healthy start model
projects that have been determined by the Secretary of Health and Human
Services to be successful.
SEC. 503. REAUTHORIZATION OF CERTAIN PROGRAMS PROVIDING PRIMARY AND
PREVENTIVE CARE.
(a) Tuberculosis Prevention Grants.--Section 317(j)(1) of the
Public Health Service Act (42 U.S.C. 247b(j)(1)), as amended by section
1711 of the Children's Health Act of 2000 (Public Law 106-310), is
amended by striking ``2005'' and inserting ``2007''.
(b) Sexually Transmitted Diseases.--Section 318(e)(1) of the Public
Health Service Act (42 U.S.C. 247c(e)(1)) is amended--
(1) by striking ``and such sums'' and inserting ``such
sums'';
(2) by striking ``1998'' and inserting ``2001''; and
(3) by inserting before the period the following: ``,
$130,000,000 for each of the fiscal years 2002 and 2003, and
such sums as may be necessary for each of the fiscal years 2004
through 2006''.
(c) Family Planning Project Grants.--Section 1001(d) of the Public
Health Service Act (42 U.S.C. 300(d)) is amended--
(1) by striking ``and $158,400,000'' and inserting
``$158,400,000''; and
(2) by inserting before the period the following: ``;
$430,000,000 for fiscal year 2002; and such sums as may be
necessary for each of the fiscal years 2003 through 2005''.
(d) Breast and Cervical Cancer Prevention.--Section 1510(a) of the
Public Health Service Act (42 U.S.C. 300n-5(a)) is amended--
(1) by striking ``and such sums'' and inserting ``such
sums''; and
(2) by inserting before the period the following: ``,
$200,000,000 for fiscal year 2002, and such sums as may be
necessary for each of the fiscal years 2003 through 2005''.
(e) Preventive Health and Health Services Block Grant.--Section
1901(a) of the Public Health Service Act (42 U.S.C. 300w(a)) is amended
by striking ``$205,000,000'' and inserting ``$235,000,000''.
(f) Maternal and Child Health Services Block Grant.--Section 501(a)
of the Social Security Act (42 U.S.C. 701(a)) is amended by striking
``fiscal year 2001 and each fiscal year thereafter'' and inserting
``each of fiscal years 2001 and 2002, and such sums as may be necessary
for each of the fiscal years 2003 through 2005''.
SEC. 504. COMPREHENSIVE SCHOOL HEALTH EDUCATION PROGRAM.
(a) Purpose.--It is the purpose of this section to establish a
comprehensive school health education and prevention program for
elementary and secondary school students.
(b) Program Authorized.--The Secretary of Education (referred to in
this section as the ``Secretary''), through the Office of Comprehensive
School Health Education established in subsection (e), shall award
grants to States from allotments under subsection (c) to enable such
States to--
(1) award grants to local or intermediate educational
agencies, and consortia thereof, to enable such agencies or
consortia to establish, operate, and improve local programs of
comprehensive health education and prevention, early health
intervention, and health education, in elementary and secondary
schools (including preschool, kindergarten, intermediate, and
junior high schools); and
(2) develop training, technical assistance, and
coordination activities for the programs assisted pursuant to
paragraph (1).
(c) Reservations and State Allotments.--
(1) Reservations.--From the sums appropriated pursuant to
the authority of subsection (f) for any fiscal year, the
Secretary shall reserve--
(A) 1 percent for payments to Guam, American Samoa,
the Virgin Islands, the Republic of the Marshall
Islands, the Federated States of Micronesia, the
Northern Mariana Islands, and the Republic of Palau, to
be allotted in accordance with their respective needs;
and
(B) 1 percent for payments to the Bureau of Indian
Affairs.
(2) State allotments.--From the remainder of the sums not
reserved under paragraph (1), the Secretary shall allot to each
State an amount which bears the same ratio to the amount of
such remainder as the school-age population of the State bears
to the school-age population of all States, except that no
State shall be allotted less than an amount equal to 0.5
percent of such remainder.
(3) Reallotment.--The Secretary may reallot any amount of
any allotment to a State to the extent that the Secretary
determines that the State will not be able to obligate such
amount within 2 years of allotment. Any such reallotment shall
be made on the same basis as an allotment under paragraph (2).
(d) Use of Funds.--Grant funds provided to local or intermediate
educational agencies, or consortia thereof, under this section may be
used to improve elementary and secondary education in the areas of--
(1) personal health and fitness;
(2) prevention of chronic diseases;
(3) prevention and control of communicable diseases;
(4) nutrition;
(5) substance use and abuse;
(6) accident prevention and safety;
(7) community and environmental health;
(8) mental and emotional health;
(9) parenting and the challenges of raising children; and
(10) the effective use of the health services delivery
system.
(e) Office of Comprehensive School Health Education.--The Secretary
shall establish within the Office of the Secretary an Office of
Comprehensive School Health Education which shall have the following
responsibilities:
(1) To recommend mechanisms for the coordination of school
health education programs conducted by the various departments
and agencies of the Federal Government.
(2) To advise the Secretary on formulation of school health
education policy within the Department of Education.
(3) To disseminate information on the benefits to health
education of utilizing a comprehensive health curriculum in
schools.
(f) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated
$50,000,000 for fiscal year 2002 and such sums as may be
necessary for each of the fiscal years 2003 and 2004 to carry
out this section.
(2) Availability.--Funds appropriated pursuant to the
authority of paragraph (1) in any fiscal year shall remain
available for obligation and expenditure until the end of the
fiscal year succeeding the fiscal year for which such funds
were appropriated.
SEC. 505. COMPREHENSIVE EARLY CHILDHOOD HEALTH EDUCATION PROGRAM.
(a) Purpose.--It is the purpose of this section to establish a
comprehensive early childhood health education program.
(b) Program.--The Secretary of Health and Human Services (referred
to in this section as the ``Secretary'') shall conduct a program of
awarding grants to agencies conducting Head Start training to enable
such agencies to provide training and technical assistance to Head
Start teachers and other child care providers. Such program shall--
(1) establish a training system through the Head Start
agencies and organizations conducting Head Start training for
the purpose of enhancing teacher skills and providing
comprehensive early childhood health education curriculum;
(2) enable such agencies and organizations to provide
training to day care providers in order to strengthen the
skills of the early childhood workforce in providing health
education;
(3) provide technical support for health education programs
and curricula; and
(4) provide cooperation with other early childhood
providers to ensure coordination of such programs and the
transition of students into the public school environment.
(c) Use of Funds.--Grant funds under this section may be used to
provide training and technical assistance in the areas of--
(1) personal health and fitness;
(2) prevention of chronic diseases;
(3) prevention and control of communicable diseases;
(4) dental health;
(5) nutrition;
(6) substance use and abuse;
(7) accident prevention and safety;
(8) community and environmental health;
(9) mental and emotional health; and
(10) strengthening the role of parent involvement.
(d) Reservation for Innovative Programs.--The Secretary shall
reserve 5 percent of the funds appropriated pursuant to the authority
of subsection (e) in each fiscal year for the development of innovative
model health education programs or curricula.
(e) Authorization of Appropriations.--There are authorized to be
appropriated $40,000,000 for fiscal year 2002 and such sums as may be
necessary for each of the fiscal years 2003 and 2004 to carry out this
section.
SEC. 506. ADOLESCENT FAMILY LIFE AND ABSTINENCE.
(a) Definitions.--Section 2002(a)(4)(G)(i) of the Public Health
Service Act (42 U.S.C. 300z-1(a)(4)(G)(i)) is amended by inserting
``and abstinence'' after ``adoption''.
(b) Geographic Diversity.--Section 2005 of the Public Health
Service Act (42 U.S.C. 300z-4) is amended--
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively; and
(2) by inserting after subsection (a) the following:
``(b) In approving applications for grants for demonstration
projects for services under this title, the Secretary shall, to the
maximum extent practicable, ensure adequate representation of both
urban and rural areas.''.
(c) Simplified Application Process.--Section 2006 of the Public
Health Service Act (42 U.S.C. 300z-5) is amended by adding at the end
following:
``(g) The Secretary shall develop and implement a simplified and
expedited application process for applicants seeking less than $15,000
of funds available under this title for a demonstration project.''.
(d) Authorization of Appropriations.--Section 2010(a) of the Public
Health Service Act (42 U.S.C. 300z-9) is amended to read as follows:
``(a) For the purpose of carrying out this title, there are
authorized to be appropriated $75,000,000 for each of the fiscal years
2002 through 2006.''.
TITLE VI--PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT
SEC. 601. PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT.
(a) Right To Decline Medical Treatment.--
(1) Rights of competent adults.--
(A) In general.--Except as provided in subparagraph
(B), a State may not restrict the right of a competent
adult to consent to, or to decline, medical treatment.
(B) Limitations.--
(i) Affect on third parties.--A State may
impose limitations on the right of a competent
adult to decline treatment if such limitations
protect third parties (including minor
children) from harm.
(ii) Treatment which is not medically
indicated.--Nothing in this subsection shall be
construed to require that any individual be
offered, or to state that any individual may
demand, medical treatment which the health care
provider does not have available, or which is,
under prevailing medical standards, either
futile or otherwise not medically indicated.
(2) Rights of incapacitated adults.--
(A) In general.--Except as provided in subparagraph
(B)(i) of paragraph (1), States may not restrict the
right of an incapacitated adult to consent to, or to
decline, medical treatment as exercised through the
documents specified in this paragraph, or through
similar documents or other written methods of directive
which evidence the adult's treatment choices.
(B) Advance directives and powers of attorney.--
(i) In general.--In order to facilitate the
communication, despite incapacity, of an
adult's treatment choices, the Secretary of
Health and Human Services (referred to in this
section as the ``Secretary''), in consultation
with the Attorney General, shall develop a
national advance directive form that--
(I) shall not limit or otherwise
restrict, except as provided in
subparagraph (B)(i) of paragraph (1),
an adult's right to consent to, or to
decline, medical treatment; and
(II) shall, at minimum--
(aa) provide the means for
an adult to declare such
adult's own treatment choices
in the event of a terminal
condition;
(bb) provide the means for
an adult to declare, at such
adult's option, treatment
choices in the event of other
conditions which are medically
incurable, and from which such
adult likely will not recover;
and
(cc) provide the means by
which an adult may, at such
adult's option, declare such
adult's wishes with respect to
all forms of medical treatment,
including forms of medical
treatment such as the provision
of nutrition and hydration by
artificial means which may be,
in some circumstances,
relatively nonburdensome.
(ii) National durable power of attorney
form.--The Secretary, in consultation with the
Attorney General, shall develop a national
durable power of attorney form for health care
decisionmaking. The form shall provide a means
for any adult to designate another adult or
adults to exercise the same decisionmaking
powers which would otherwise be exercised by
the patient if the patient were competent.
(iii) Honored by all health care
providers.--The national advance directive and
durable power of attorney forms developed by
the Secretary shall be honored by all health
care providers.
(iv) Limitations.--No individual shall be
required to execute an advance directive. This
section makes no presumption concerning the
intention of an individual who has not executed
an advance directive. An advance directive
shall be sufficient, but not necessary, proof
of an adult's treatment choices with respect to
the circumstances addressed in the advance
directive.
(C) Definition.--For purposes of this paragraph,
the term ``incapacity'' means the inability to
understand or to communicate concerning the nature and
consequences of a health care decision (including the
intended benefits and foreseeable risks of, and
alternatives to, proposed treatment options), and to
reach an informed decision concerning health care.
(3) Health care providers.--
(A) In general.--No health care provider may
provide treatment to an adult contrary to the adult's
wishes as expressed personally, by an advance directive
as provided for in paragraph (2)(B), or by a similar
written advance directive form or another written
method of directive which clearly and convincingly
evidence the adult's treatment choices. A health care
provider who acts in good faith pursuant to the
preceding sentence shall be immune from criminal or
civil liability or discipline for professional
misconduct.
(B) Health care providers under the medicare and
medicaid programs.--Any health care provider who
knowingly provides services to an adult contrary to the
adult's wishes as expressed personally, by an advance
directive as provided for in paragraph (2)(B), or by a
similar written advance directive form or another
written method of directive which clearly and convincingly evidence the
adult's treatment choices, shall be denied payment for such services
under titles XVIII and XIX of the Social Security Act.
(C) Transfers.--Health care providers who object to
the provision of medical care in accordance with an
adult's wishes shall transfer the adult to the care of
another health care provider.
(4) Definition.--For purposes of this subsection, the term
``adult'' means--
(A) an individual who is 18 years of age or older;
or
(B) an emancipated minor.
(b) Federal Right Enforceable in Federal Courts.--The rights
recognized in this section may be enforced by filing a civil action in
an appropriate district court of the United States.
(c) Suicide and Homicide.--Nothing in this section shall be
construed to permit, condone, authorize, or approve suicide or mercy
killing, or any affirmative act to end a human life.
(d) Rights Granted by States.--Nothing in this section shall impair
or supersede rights granted by State law which exceed the rights
recognized by this section.
(e) Effect on Other Laws.--
(1) In general.--Except as specified in paragraph (2),
written policies and written information adopted by health care
providers pursuant to sections 4206 and 4751 of the Omnibus
Budget Reconciliation Act of 1990 (Public Law 101-508), shall
be modified within 6 months after the enactment of this section
to conform to the provisions of this section.
(2) Delay period for uniform forms.--Health care providers
shall modify any written forms distributed as written
information under sections 4206 and 4751 of the Omnibus Budget
Reconciliation Act of 1990 (Public Law 101-508) not later than
6 months after promulgation of the forms referred to in clauses
(i) and (ii) of subsection (a)(2)(B) by the Secretary.
(f) Information Provided to Certain Individuals.--The Secretary
shall provide on a periodic basis written information regarding an
individual's right to consent to, or to decline, medical treatment as
provided in this section to individuals who are beneficiaries under
titles II, XVI, XVIII, and XIX of the Social Security Act.
(g) Recommendations to Congress on Issues Relating to a Patient's
Right of Self-Determination.--Not later than 180 days after the date of
the enactment of this Act, and annually thereafter for a period of 3
years, the Secretary shall provide recommendations to Congress
concerning the medical, legal, ethical, social, and educational issues
related to in this section. In developing recommendations under this
subsection the Secretary shall address the following issues:
(1) The contents of the forms referred to in clauses (i)
and (ii) of subsection (a)(2)(B).
(2) Issues pertaining to the education and training of
health care professionals concerning patients' self-
determination rights.
(3) Issues pertaining to health care professionals' duties
with respect to patients' rights, and health care
professionals' roles in identifying, assessing, and presenting
for patient consideration medically indicated treatment
options.
(4) Issues pertaining to the education of patients
concerning their rights to consent to, and decline, treatment,
including how individuals might best be informed of such rights
prior to hospitalization and how uninsured individuals, and
individuals not under the regular care of a physician or
another provider, might best be informed of their rights.
(5) Issues relating to appropriate standards to be adopted
concerning decisionmaking by incapacitated adult patients whose
treatment choices are not known.
(6) Such other issues as the Secretary may identify.
(h) Effective Date.--
(1) In general.--Except as provided in paragraph (2), this
section shall take effect on the date that is 6 months after
the date of enactment of this Act.
(2) Subsection (g).--The provisions of subsection (g) shall
take effect on the date of enactment of this Act.
TITLE VII--PRIMARY AND PREVENTIVE CARE PROVIDERS
SEC. 701. INCREASED MEDICARE REIMBURSEMENT FOR PHYSICIAN ASSISTANTS,
NURSE PRACTITIONERS, AND CLINICAL NURSE SPECIALISTS.
(a) Fee Schedule Amount.--Section 1833(a)(1)(O) of the Social
Security Act (42 U.S.C. 1395l(a)(1)(O)) is amended by striking ``85
percent'' and inserting ``90 percent'' each place it appears.
(b) Technical Amendment.--Section 1833(a)(1)(O) of the Social
Security Act (42 U.S.C. 1395l(a)(1)(O)) is amended by striking
``clinic'' and inserting ``clinical''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to services furnished and supplies provided on and
after January 1, 2002.
SEC. 702. REQUIRING COVERAGE OF CERTAIN NONPHYSICIAN PROVIDERS UNDER
THE MEDICAID PROGRAM.
(a) In General.--Section 1905(a) of the Social Security Act (42
U.S.C. 1396d(a)), as amended by section 301(c)(1), is amended--
(1) in paragraph (27), by striking ``and'' at the end;
(2) by redesignating paragraph (28) as paragraph (29); and
(3) by inserting after paragraph (27) the following:
``(28) services furnished by a physician assistant, nurse
practitioner, clinical nurse specialist (as defined in section
1861(aa)(5)), or certified registered nurse anesthetist (as
defined in section 1861(bb)(2)); and''.
(b) Conforming Amendment.--Section 1902(a)(10)(C)(iv) of the Social
Security Act (42 U.S.C. 1396a(a)(10)(C)(iv)), as amended by section
301(c)(3), is amended by striking ``and (27)'' and inserting ``, (27),
and (28)''.
(c) Effective Date.--The amendments made by this section shall
apply to medical assistance furnished under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.) beginning with the first fiscal
year quarter that begins after the date of enactment of this Act.
SEC. 703. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.
Part C of title VII of the Public Health Service Act (42 U.S.C.
293j et seq.) is amended by adding at the end thereof the following:
``SEC. 749. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.
``(a) Establishment.--The Secretary shall establish a program to
award grants to eligible schools of medicine or osteopathic medicine to
enable such schools to provide medical students for tutorial programs
or as participants in clinics designed to interest high school or
college students in careers in general medical practice.
``(b) Application.--To be eligible to receive a grant under this
section, a school of medicine or osteopathic medicine shall prepare and
submit to the Secretary an application at such time, in such manner,
and containing such information as the Secretary may require, including
assurances that the school will use amounts received under the grant in
accordance with subsection (c).
``(c) Use of Funds.--
``(1) In general.--Amounts received under a grant awarded
under this section shall be used to--
``(A) fund programs under which students of the
grantee are provided as tutors for high school and
college students in the areas of mathematics, science,
health promotion and prevention, first aid, nutrition
and prenatal care;
``(B) fund programs under which students of the
grantee are provided as participants in clinics and
seminars in the areas described in paragraph (1); and
``(C) conduct summer institutes for high school and
college students to promote careers in medicine.
``(2) Design of programs.--The programs, institutes, and
other activities conducted by grantees under paragraph (1)
shall be designed to--
``(A) give medical students desiring to practice
general medicine access to the local community;
``(B) provide information to high school and
college students concerning medical school and the
general practice of medicine; and
``(C) promote careers in general medicine.
``(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section, $5,000,000 for fiscal year
2002, and such sums as may be necessary for fiscal year 2003.''.
SEC. 704. GENERAL MEDICAL PRACTICE GRANTS.
Part C of title VII of the Public Health Service Act (as amended by
section 703) is further amended by adding at the end thereof the
following:
``SEC. 749A. GENERAL MEDICAL PRACTICE GRANTS.
``(a) Establishment.--The Secretary shall establish a program to
award grants to eligible public or private nonprofit schools of
medicine or osteopathic medicine, hospitals, residency programs in
family medicine or pediatrics, or to a consortium of such entities, to
enable such entities to develop effective strategies for recruiting
medical students interested in the practice of general medicine and
placing such students into general practice positions upon graduation.
``(b) Application.--To be eligible to receive a grant under this
section, an entity of the type described in subsection (a) shall
prepare and submit to the Secretary an application at such time, in
such manner, and containing such information as the Secretary may
require, including assurances that the entity will use amounts received
under the grant in accordance with subsection (c).
``(c) Use of Funds.--Amounts received under a grant awarded under
this section shall be used to fund programs under which effective
strategies are developed and implemented for recruiting medical
students interested in the practice of general medicine and placing
such students into general practice positions upon graduation.
``(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section, $25,000,000 for each of the
fiscal years 2002 through 2004, and such sums as may be necessary for
fiscal years thereafter.''.
TITLE VIII--SAFE AND COST-EFFECTIVE MEDICAL TREATMENT
SEC. 801. ENHANCING INVESTMENT IN COST-EFFECTIVE METHODS OF HEALTH
CARE.
(a) Establishment of Trust Fund for Medical Treatment Outcomes
Research.--
(1) In general.--Subchapter A of chapter 98 of the Internal
Revenue Code of 1986 (relating to trust fund code) is amended
by adding at the end the following:
``SEC. 9511. TRUST FUND FOR MEDICAL TREATMENT OUTCOMES RESEARCH.
``(a) Creation of Trust Fund.--There is established in the Treasury
of the United States a trust fund to be known as the `Trust Fund for
Medical Treatment Outcomes Research' (referred to in this section as
the `Trust Fund'), consisting of such amounts as may be appropriated or
credited to the Trust Fund as provided in this section or section
9602(b).
``(b) Transfers to Trust Fund.--There is hereby appropriated to the
Trust Fund an amount equivalent to the taxes received in the Treasury
under section 4491 (relating to tax on health insurance policies).
``(c) Distribution of Amounts in Trust Fund.--On an annual basis
and without further appropriation the Secretary shall distribute the
amounts in the Trust Fund to the Secretary of Health and Human Services
for use by the Agency for Healthcare Research and Quality. Such amounts
shall be available to pay for research activities related to medical
treatment outcomes and shall be in addition to any other amounts
appropriated for such purposes.''.
(2) Conforming amendment.--The table of sections for
subchapter A of chapter 98 of such Code is amended by adding at
the end the following:
``Sec. 9511. Trust Fund for Medical
Treatment Outcomes Research.''.
(b) Imposition of Tax on Health Insurance Policies.--
(1) In general.--Chapter 36 of the Internal Revenue Code of
1986 (relating to certain other excise taxes) is amended by
adding at the end the following:
``Subchapter F--Tax on Health Insurance Policies
``Sec. 4491. Imposition of tax.
``Sec. 4492. Liability for tax.
``SEC. 4491. IMPOSITION OF TAX.
``(a) General Rule.--There is hereby imposed a tax equal to .001
cent on each dollar, or fractional part thereof, of the premium paid on
a policy of health insurance.
``(b) Definition.--For purposes of subsection (a), the term `policy
of health insurance' means any policy or other instrument by whatever
name called whereby a contract of insurance is made, continued, or
renewed with respect to the health of an individual or group of
individuals.
``SEC. 4492. LIABILITY FOR TAX.
``The tax imposed by this subchapter shall be paid, on the basis of
a return, by any person who makes, signs, issues, or sells any of the
documents and instruments subject to the tax, or for whose use or
benefit the same are made, signed, issued, or sold. The United States
or any agency or instrumentality thereof shall not be liable for the
tax.''.
(2) Conforming amendment.--The table of subchapters for
chapter 36 of such Code is amended by adding at the end the
following:
``Subchapter F. Tax on health insurance
policies.''.
(c) Effective Date.--The amendments made by this section shall
apply to policies issued after December 31, 2001.
SEC. 802. MEDICAL ERRORS REDUCTION.
Title IX of the Public Health Service Act (42 U.S.C. 299 et seq.)
is amended--
(1) by redesignating part C as part D;
(2) by redesignating sections 921 through 928, as sections
931 through 938, respectively;
(3) in section 938(1) (as so redesignated), by striking
``921'' and inserting ``931''; and
(4) by inserting after part B the following:
``PART C--REDUCING ERRORS IN HEALTH CARE
``SEC. 921. DEFINITIONS.
``In this part:
``(1) Adverse event.--The term `adverse event' means an
injury resulting from medical management rather than the
underlying condition of the patient.
``(2) Error.--The term `error' means the failure of a
planned action to be completed as intended or the use of a
wrong plan to achieve the desired outcome.
``(3) Health care provider.--The term `health care
provider' means an individual or entity that provides medical
services and is a participant in a demonstration program under
this part.
``(4) Health care-related error.--The term ``health care-
related error'' means a preventable adverse event related to a
health care intervention or a failure to intervene
appropriately.
``(5) Medication-related error.--The term `medication-
related error' means a preventable adverse event related to the
administration of a medication.
``(6) Safety.--The term `safety' with respect to an
individual means that such individual has a right to be free
from preventable serious injury.
``(7) Sentinel event.--The term `sentinel event' means an
unexpected occurrence involving an individual that results in
death or serious physical injury that is unrelated to the
natural course of the individual's illness or underlying
condition.
``SEC. 922. ESTABLISHMENT OF STATE-BASED MEDICAL ERROR REPORTING
SYSTEMS.
``(a) In General.--The Secretary shall make grants available to
States to enable such States to establish reporting systems designed to
reduce medical errors and improve health care quality.
``(b) Requirement.--
``(1) In general.--To be eligible to receive a grant under
subsection (a), the State involved shall provide assurances to
the Secretary that amounts received under the grant will be
used to establish and implement a medical error reporting
system using guidelines (including guidelines relating to the
confidentiality of the reporting system) developed by the
Agency for Healthcare Research and Quality with input from
interested, non-governmental parties including patient,
consumer and health care provider groups.
``(2) Guidelines.--Not later than 90 days after the date of
enactment of this part, the Agency for Healthcare Research and
Quality shall develop and publish the guidelines described in
paragraph (1).
``(c) Data.--
``(1) Availability.--A State that receives a grant under
subsection (a) shall make the data provided to the medical
error reporting system involved available only to the Agency
for Healthcare Research and Quality and may not otherwise
disclose such information.
``(2) Confidentiality.--Nothing in this part shall be
construed to supersede any State law that is inconsistent with
this part.
``(d) Application.--To be eligible for a grant under this section,
a State shall prepare and submit to the Secretary an application at
such time, in such manner and containing, such information as the
Secretary shall require.
``SEC. 923. DEMONSTRATION PROJECTS TO REDUCE MEDICAL ERRORS, IMPROVE
PATIENT SAFETY, AND EVALUATE REPORTING.
``(a) Establishment.--The Secretary, acting through the Director of
the Agency for Healthcare Research and Quality and in conjunction with
the Administrator of the Health Care Financing Administration, may
establish a program under which funding will be provided for not less
than 15 demonstration projects, to be competitively awarded, in health
care facilities and organizations in geographically diverse locations,
including rural and urban areas (as determined by the Secretary), to
determine the causes of medical errors and to--
``(1) use technology, staff training, and other methods to
reduce such errors;
``(2) develop replicable models that minimize the frequency
and severity of medical errors;
``(3) develop mechanisms that encourage reporting, prompt
review, and corrective action with respect to medical errors;
and
``(4) develop methods to minimize any additional paperwork
burden on health care professionals.
``(b) Activities.--
``(1) In general.--A health care provider participating in
a demonstration project under subsection (a) shall--
``(A) utilize all available and appropriate
technologies to reduce the probability of future
medical errors; and
``(B) carry out other activities consistent with
subsection (a).
``(2) Reporting to patients.--In carrying out this section,
the Secretary shall ensure that--
``(A) 5 of the demonstration projects permit the
voluntary reporting by participating health care
providers of any adverse events, sentinel events,
health care-related errors, or medication-related
errors to the Secretary;
``(B) 5 of the demonstration projects require
participating health care providers to report any
adverse events, sentinel events, health care-related
errors, or medication-related errors to the Secretary;
and
``(C) 5 of the demonstration projects require
participating health care providers to report any
adverse events, sentinel events, health care-related
errors, or medication-related errors to the Secretary
and to the patient involved and a family member or
guardian of the patient.
``(3) Confidentiality.--
``(A) In general.--The Secretary and the
participating grantee organization shall ensure that
information reported under this section remains
confidential.
``(B) Use.--The Secretary may use the information
reported under this section only for the purpose of
evaluating the ability to reduce errors in the delivery
of care. Such information shall not be used for
enforcement purposes.
``(C) Disclosure.--The Secretary may not disclose
the information reported under this section.
``(D) Nonadmissibility.--Information reported under
this section shall be privileged, confidential, shall
not be admissible as evidence or discoverable in any
civil or criminal action or proceeding or subject to
disclosure, and shall not be subject to the Freedom of
Information Act (5 U.S.C. App). This paragraph shall
apply to all information maintained by the reporting
entity and the entities who receive such reports.
``(c) Use of Technologies.--The Secretary shall encourage, as part
of the demonstration projects conducted under subsection (a), the use
of appropriate technologies to reduce medical errors, such as hand-held
electronic prescription pads, training simulators for medical
education, and bar-coding of prescription drugs and patient bracelets.
``(d) Database.--The Secretary shall provide for the establishment
and operation of a national database of medical errors to be used as
provided for by the Secretary. The information provided to the
Secretary under subsection (b)(2) shall be contained in the database.
``(e) Evaluation.--The Secretary shall evaluate the progress of
each demonstration project established under this section in reducing
the incidence of medical errors and submit the results of such
evaluations as part of the reports under section 926(b).
``(f) Reporting.--Prior to October 1, of the third fiscal year for
which funds are made available under this section, the Secretary shall
prepare and submit to the appropriate committees of Congress an interim
report concerning the results of such demonstration projects.
``SEC. 924. PATIENT SAFETY IMPROVEMENT.
``(a) In General.--The Secretary shall provide information to
educate patients and family members about their role in reducing
medical errors. Such information shall be provided to all individuals
who participate in Federally-funded health care programs.
``(b) Development of Programs.--The Secretary shall develop
programs that encourage patients to take a more active role in their
medical treatment, including encouraging patients to provide
information to health care providers concerning pre-existing conditions
and medications.
``SEC. 925. PRIVATE, NONPROFIT EFFORTS TO REDUCE MEDICAL ERRORS.
``(a) In General.--The Secretary shall make grants to health
professional associations and other organizations to provide training
in ways to reduce medical errors, including curriculum development,
technology training, and continuing medical education.
``(b) Application.--To be eligible for a grant under this section,
an entity shall prepare and submit to the Secretary an application at
such time, in such manner and containing, such information as the
Secretary shall require.
``SEC. 926. REPORT TO CONGRESS.
``(a) Initial Report.--Not later than 180 days after the date of
enactment of this part, the Secretary shall prepare and submit to the
appropriate committees of Congress a report concerning the costs
associated with implementing a program that identifies factors that
contribute to errors and which includes upgrading the health care
computer systems and other technologies in the United States in order
to reduce medical errors, including computerizing hospital systems for
the coordination of prescription drugs and handling of laboratory
specimens, and contains recommendation on ways in which to reduce those
factors.
``(b) Other Reports.--Not later than 180 days after the completion
of all demonstration projects under section 923, the Secretary shall
prepare and submit to the appropriate committees of Congress a report
concerning--
``(1) how successful each demonstration project was in
reducing medical errors;
``(2) the data submitted by States under section 922(c);
``(3) the best methods for reducing medical errors;
``(4) the costs associated with applying such best methods
on a nationwide basis; and
``(5) the manner in which other Federal agencies can share
information on best practices in order to reduce medical errors
in all Federal health care programs.
``SEC. 927. AUTHORIZATION OF APPROPRIATIONS.
``There is authorized to be appropriated such sums as may be
necessary to carry out this part.''.
TITLE IX--TAX INCENTIVES FOR PURCHASE OF QUALIFIED LONG-TERM CARE
INSURANCE
SEC. 901. CREDIT FOR QUALIFIED LONG-TERM CARE PREMIUMS.
(a) General Rule.--Subpart C of part IV of subchapter A of chapter
1 of the Internal Revenue Code of 1986 (relating to refundable credits)
is amended by redesignating section 35 as section 36 and by inserting
after section 34 the following:
``SEC. 35. LONG-TERM CARE INSURANCE CREDIT.
``(a) General Rule.--In the case of an individual, there shall be
allowed as a credit against the tax imposed by this subtitle for the
taxable year an amount equal to the applicable percentage of the
premiums for a qualified long-term care insurance contract (as defined
in section 7702B(b)) paid during such taxable year for such individual
or the spouse of such individual.
``(b) Applicable Percentage.--
``(1) In general.--For purposes of this section, the term
`applicable percentage' means 28 percent reduced (but not below
zero) by 1 percentage point for each $1,000 (or fraction
thereof) by which the taxpayer's adjusted gross income for the
taxable year exceeds the base amount.
``(2) Base amount.--For purposes of paragraph (1) the term
`base amount' means--
``(A) except as otherwise provided in this
paragraph, $25,000,
``(B) $40,000 in the case of a joint return, and
``(C) zero in the case of a taxpayer who--
``(i) is married at the close of the
taxable year (within the meaning of section
7703) but does not file a joint return for such
taxable year, and
``(ii) does not live apart from the
taxpayer's spouse at all times during the
taxable year.
``(c) Coordination With Medical Expense Deduction.--Any amount
allowed as a credit under this section shall not be taken into account
under section 213.''.
(b) Conforming Amendment.--The table of sections for such subpart C
is amended by striking the item relating to section 35 and inserting
the following:
``Sec. 35. Long-term care insurance
credit.
``Sec. 36. Overpayments of tax.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
SEC. 902. INCLUSION OF QUALIFIED LONG-TERM CARE INSURANCE IN CAFETERIA
PLANS AND FLEXIBLE SPENDING ARRANGEMENTS.
(a) Cafeteria Plans.--The last sentence of section 125(f) of the
Internal Revenue Code of 1986 (defining qualified benefits) is amended
by striking ``shall not'' and inserting ``shall''.
(b) Flexible Spending Arrangements.--Section 106(c) of the Internal
Revenue Code of 1986 (relating to contributions by employer to accident
and health plans) is amended--
(1) in paragraph (1), by striking ``include'' and inserting
``shall not''; and
(2) in the heading, by striking ``Inclusion'' and inserting
``Exclusion''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
SEC. 903. EXCLUSION FROM GROSS INCOME FOR AMOUNTS RECEIVED ON
CANCELLATION OF LIFE INSURANCE POLICIES AND USED FOR
QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.
(a) In General.--
(1) Exclusion from gross income.--
(A) In general.--Part III of subchapter B of
chapter 1 of the Internal Revenue Code of 1986
(relating to items specifically excluded from gross
income) is amended by redesignating section 139 as
section 140 and by inserting after section 138 the
following new section:
``SEC. 139. AMOUNTS RECEIVED ON CANCELLATION, ETC. OF LIFE INSURANCE
CONTRACTS AND USED TO PAY PREMIUMS FOR QUALIFIED LONG-
TERM CARE INSURANCE.
``No amount (which but for this section would be includible in the
gross income of an individual) shall be included in gross income on the
whole or partial surrender, cancellation, or exchange of any life
insurance contract during the taxable year if--
``(1) such individual has attained age 59\1/2\ on or before
the date of the transaction, and
``(2) the amount otherwise includible in gross income is
used during such year to pay for any qualified long-term care
insurance contract (as defined in section 7702B(b)) which--
``(A) is for the benefit of such individual or the
spouse of such individual if such spouse has attained
age 59\1/2\ on or before the date of the transaction,
and
``(B) may not be surrendered for cash.''.
(B) Conforming amendment.--The table of sections
for such part III is amended by striking the item
relating to section 139 and inserting the following:
``Sec. 139. Amounts received on
cancellation, etc. of life
insurance contracts and used to
pay premiums for qualified
long-term care insurance.
``Sec. 140. Cross references to other
Acts.''.
(2) Certain exchanges not taxable.--Section 1035(a) of such
Code (relating to certain exchanges of insurance contracts) is
amended by striking the period at the end of paragraph (3) and
inserting ``; or'', and by adding at the end the following:
``(4) in the case of an individual who has attained age
59\1/2\, a contract of life insurance or an endowment or
annuity contract for a qualified long-term care insurance
contract (as defined in section 7702B(b)), if the qualified
long-term care insurance contract may not be surrendered for
cash.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
SEC. 904. USE OF GAIN FROM SALE OF PRINCIPAL RESIDENCE FOR PURCHASE OF
QUALIFIED LONG-TERM HEALTH CARE INSURANCE.
(a) In General.--Subsection (d) of section 121 of the Internal
Revenue Code of 1986 (relating to exclusion of gain from sale of
principal) is amended by adding at the end the following:
``(9) Eligibility of home equity conversion sale-leaseback
transaction for exclusion.--
``(A) In general.--For purposes of this section,
the term `sale or exchange' includes a home equity
conversion sale-leaseback transaction.
``(B) Home equity conversion sale-leaseback
transaction.--For purposes of subparagraph (A), the
term `home equity conversion sale-leaseback' means a
transaction in which--
``(i) the seller-lessee--
``(I) sells property which during
the 5-year period ending on the date of
the transaction has been owned and used
as a principal residence by such
seller-lessee for periods aggregating 2
years or more,
``(II) uses a portion of the
proceeds from such sale to purchase a
qualified long-term care insurance
contract (as defined in section
7702B(b)), which contract may not be
surrendered for cash,
``(III) obtains occupancy rights in
such property pursuant to a written
lease requiring a fair rental, and
``(IV) receives no option to
repurchase the property at a price less
than the fair market price of the
property unencumbered by any leaseback
at the time such option is exercised,
and
``(ii) the purchaser-lessor--
``(I) is a person,
``(II) is contractually responsible
for the risks and burdens of ownership
and receives the benefits of ownership
(other than the seller-lessee's
occupancy rights) after the date of
such transaction, and
``(III) pays a purchase price for
the property that is not less than the
fair market price of such property
encumbered by a leaseback, and taking
into account the terms of the lease.
``(C) Additional definitions.--For purposes of
subparagraph (B)--
``(i) Occupancy rights.--The term
`occupancy rights' means the right to occupy
the property for any period of time, including
a period of time measured by the life of the
seller-lessee on the date of the sale-leaseback
transaction (or the life of the surviving
seller-lessee, in the case of jointly held
occupancy rights), or a periodic term subject
to a continuing right of renewal by the seller-
lessee (or by the surviving seller-lessee, in
the case of jointly held occupancy rights).
``(ii) Fair rental.--The term `fair rental'
means a rental for any subsequent year which
equals or exceeds the rental for the 1st year
of a sale-leaseback transaction.''.
(b) Effective Date.--The amendment made by this section shall apply
to sales after December 31, 2001, in taxable years beginning after such
date.
TITLE X--NATIONAL FUND FOR HEALTH RESEARCH
SEC. 1001. ESTABLISHMENT OF FUND.
(a) Establishment.--There is established in the Treasury of the
United States a fund, to be known as the ``National Fund for Health
Research'' (in this section referred to as the ``Fund''), consisting of
such amounts as are transferred to the Fund under subsection (b) and
any interest earned on investment of amounts in the Fund.
(b) Transfers to Fund.--
(1) In general.--The Secretary of the Treasury shall
transfer to the Fund amounts equivalent to amounts designated
under paragraph (2) and received in the Treasury.
(2) Amounts.--
(A) Health plan set aside.--With respect to each
calendar year beginning with the first full calendar
year after the date of enactment of this Act, each
health plan shall set aside and transfer to the
Treasury of the United States an amount equal to--
(i) for the first full calendar year, 0.25
percent of all health premiums received with
respect to the plan for such year;
(ii) for the second full calendar year, 0.5
percent of all health premiums received with
respect to the plan for such year;
(iii) for the third full calendar year,
0.75 percent of all health premiums received
with respect to the plan for such year; and
(iv) for the fourth and each succeeding
full calendar year, 1 percent of all health
premiums received with respect to the plan for
such year.
(3) Transfers based on estimates.--The amounts transferred
by paragraph (1) shall annually be transferred to the Fund
within 30 days after the President signs an appropriations Act
for the Departments of Labor, Health and Human Services, and
Education, and related agencies, or by the end of the first
quarter of the fiscal year. Proper adjustment shall be made in
amounts subsequently transferred to the extent prior estimates
were in excess of or less than the amounts required to be
transferred.
(4) Definition.--As used in this subsection, the term
``health plan'' means a group health plan (as defined in
section 2791(a) of the Public Health Service Act and any
individual health insurance (as defined in section 2791(b)(5)
of such Act) operated by a health insurance issuer.
(c) Obligations From Fund.--
(1) In general.--Subject to the provisions of paragraph
(4), with respect to the amounts made available in the Fund in
a fiscal year, the Secretary of Health and Human Services shall
distribute--
(A) 2 percent of such amounts during any fiscal
year to the Office of the Director of the National
Institutes of Health to be allocated at the Director's
discretion for the following activities:
(i) for carrying out the responsibilities
of the Office of the Director, including the
Office of Research on Women's Health and the
Office of Research on Minority Health, the
Office of Rare Disease Research, the Office of
Behavioral and Social Sciences Research (for
use for efforts to reduce tobacco use), the
Office of Dietary Supplements, and the Office
for Disease Prevention; and
(ii) for construction and acquisition of
equipment for or facilities of or used by the
National Institutes of Health;
(B) 2 percent of such amounts for transfer to the
National Center for Research Resources to carry out
section 1502 of the National Institutes of Health
Revitalization Act of 1993 concerning Biomedical and
Behavioral Research Facilities;
(C) 1 percent of such amounts during any fiscal
year for carrying out section 301 and part D of title
IV of the Public Health Service Act with respect to
health information communications; and
(D) the remainder of such amounts during any fiscal
year to member institutes and centers, including the
Office of AIDS Research, of the National Institutes of
Health in the same proportion to the total amount
received under this section, as the amount of annual
appropriations under appropriations Acts for each
member institute and Centers for the fiscal year bears
to the total amount of appropriations under
appropriations Acts for all member institutes and
Centers of the National Institutes of Health for the
fiscal year.
(2) Plans of allocation.--The amounts transferred under
paragraph (1)(D) shall be allocated by the Director of the
National Institutes of Health or the various directors of the
institutes and centers, as the case may be, pursuant to
allocation plans developed by the various advisory councils to
such directors, after consultation with such directors.
(3) Grants and contracts fully funded in first year.--With
respect to any grant or contract funded by amounts distributed
under paragraph (1), the full amount of the total obligation of
such grant or contract shall be funded in the first year of
such grant or contract, and shall remain available until
expended.
(4) Trigger and release of monies and phase-in.--
(A) Trigger and release.--No expenditure shall be
made under paragraph (1) during any fiscal year in
which the annual amount appropriated for the National
Institutes of Health is less than the amount so
appropriated for the prior fiscal year.
(B) Phase-in.--The Secretary of Health and Human
Services shall phase-in the distributions required
under paragraph (1) so that--
(i) 25 percent of the amount in the Fund is
distributed in the first fiscal year for which
funds are available;
(ii) 50 percent of the amount in the Fund
is distributed in the second fiscal year for
which funds are available;
(iii) 75 percent of the amount in the Fund
is distributed in the third fiscal year for
which funds are available; and
(iv) 100 percent of the amount in the Fund
is distributed in the fourth and each
succeeding fiscal year for which funds are
available.
(d) Budget Treatment of Amounts in Fund.--The amounts in the Fund
shall be excluded from, and shall not be taken into account, for
purposes of any budget enforcement procedure under the Congressional
Budget Act of 1974 or the Balanced Budget and Emergency Deficit Control
Act of 1985.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S269-275, S293-294)
Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S275-293)
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