HIV AIDS Resource Guide/HIV-AIDS Resource Guide.iso/STAT/PROP_FED/HSA01_4.ASC

Text File | 1993-01-14 | 88KB | 1,989 lines

/* The conclusion of Title I of the HSA follows. */

        Subpart B    Responsibilities Relating to Review and
Approval of State Systems
            Section 1511   FEDERAL REVIEW AND ACTION ON
STATE SYSTEMS.
    (a)  Approval of State Systems by National Board.
        (1)  In general. The National Health Board shall
approve a State health care system for which a document is
submitted under section 1200(b) unless the Board finds that
the system (as set forth in the document) does not (or will
not) provide for the State meeting the responsibilities for
participating States under this Act.
        (2)  Regulations. The Board shall issue regulations,
not later than July 1, 1995, prescribing the requirements
for State health care systems under parts 2 and 3 of
subtitle C, except that in the case of a document submitted
under section 1200(b) before the date of issuance of such
regulations, the Board shall take action on such document
notwithstanding the fact that such regulations have not been
issued.
        (3)  No approval permitted for years prior to 1996.
The Board may not approve a State health care system under
this subpart for any year prior to 1996.
    (b)  Review of Completeness of Documents.
        (1)  In general. If a State submits a document under
subsection (a)(1), the Board shall notify the State, not
later than 7 working days after the date of submission,
whether or not the document is complete and provides the
Board with sufficient information to approve or disapprove
the document.
        (2)  Additional information on incomplete document.
If the Board notifies a State that the State's document is
not complete, the State shall be provided such additional
period (not to exceed 45 days) as the Board may by
regulation establish in which to submit such additional
information as the Board may require. Not later than 7
working days after the State submits the additional
information, the Board shall notify the State respecting the
completeness of the document.
    (c)  Action on Completed Documents.
        (1)  In general. The Board shall make a
determination (and notify the State) on whether the State's
document provides for implementation of a State system that
meets the applicable requirements of subtitle C
            (A)  in the case of a State that did not require
the additional period described in subsection (b)(2) to file
a complete document, not later than 90 days after notifying
a State under subsection (b) that the State's document is
complete, or
            (B)  in the case of a State that required the
additional period described in subsection (b)(2) to file a
complete document, not later than 90 days after notifying a
State under subsection (b) that the State's document is
complete.
        (2)  Plans deemed approved. If the Board does not
meet the applicable deadline for making a determination and
providing
notice under paragraph (1) with respect to a State's
document, the Board shall be deemed to have approved the
State's document for purposes of this Act.
    (d)  Opportunity to Respond to Rejected Document.
        (1)  In general. If (within the applicable deadline
under subsection (c)(1)) the Board notifies a State that its
document does not provide for implementation of a State
system that meets the applicable requirements of subtitle C,
the Board shall provide the State with a period of 30 days
in which to submit such additional information and
assurances as the Board may require.
        (2)  Deadline for response. Not later than 30 days
after receiving such additional information and assurances,
the Board shall make a determination (and notify the State)
on whether the State's document provides for implementation
of a State system that meets the applicable requirements of
subtitle C.
        (3)  Plan deemed approved. If the Board does not
meet the deadline established under paragraph (2) with
respect to a State, the Board shall be deemed to have
approved the State's document for purposes of this Act.
 (e)  Approval of Previously Terminated States. If the Board
has approved a State system under this part for a year but
subsequently terminated the approval of the system under
section 1512(b)(2), the Board shall approve the system for a
succeeding year if the State

        (1)  demonstrates to the satisfaction of the Board
that the failure that formed the basis for the termination
no longer exists, and

        (2)  provides reasonable assurances that the types
of actions (or inactions) which formed the basis for such
termination will not recur.

    (f)  Revisions to State System.

        (1)  Submission. A State may revise a system
approved for a year under this section, except that such
revision shall not take effect unless the State has
submitted to the Board a document describing such revision
and the Board has approved such revision.

        (2)  Actions on amendments. Not later than 60 days
after determination submitted under paragraph (1), the Board
shall make a decision (and notify the State) on whether the
implementation of the State system, as proposed to be
revised, meets the applicable requirements of subtitle C. If
the Board fails to meet the requirement of the preceding
sentence, the Board shall be deemed to have approved the
implementation of the State system as proposed to be
revised.

        (3)  Rejection of amendments.Subsection (d) shall
apply to an amendment submitted under this subsection in the
same manner as it applies to a completed document submitted
under subsection (b).

    (g)  Notification of Non-Participating States.If a State
fails to submit a document for a State system by the
deadline referred to in section 1200, or such a document is
not approved under subsection (c), the Board shall
immediately notify the Secretary of Health and Human
Services of the State's failure for
purposes of applying subpart C in that State.
            Section 1512   FAILURE OF PARTICIPATING STATES
TO MEET CONDITIONS FOR COMPLIANCE.
    (a)  In General. In the case of a participating State,
if the Board determines that the operation of the State
system under subtitle C fails to meet the applicable
requirements of this Act, sanctions shall apply against the
State in accordance with subsection (b).
 (b)  Type of Sanction Applicable. The sanctions applicable
under this part are as follows:

        (1)  If the Board determines that the State's
failure does not substantially jeopardize the ability of
eligible individuals in the State to obtain coverage for the
comprehensive benefit package

            (A)  the Board may order a regional alliance in
the State to comply with applicable requirements of this Act
and take such additional measures to assure compliance with
such requirements as the Board may impose, if the Board
determines that the State's failure relates to a requirement
applicable to a regional alliance in the State, or

            (B)  if the Board does not take the action
described in subparagraph (A) (or if the Board takes the
action and determines that the action has not remedied the
violation that led to the imposition of the sanction), the
Board shall notify the Secretary of Health and Human
Services, who shall reduce payments with respect to the
State in accordance with section 1513.

        (2)  If the Board determines that the failure
substantially jeopardizes the ability of eligible
individuals in the State to obtain coverage for the
comprehensive benefit package

            (A)  the Board shall terminate its approval of
the State system; and

            (B)  the Board shall notify the Secretary of
Health and Human Services, who shall assume the
responsibilities described in section 1522.

    (c)  Termination of Sanction.

      (1)  Compliance by State. A State against which a
sanction is imposed may submit information at any time to
the Board to demonstrate that the failure that led to the
imposition of the sanction has been corrected.

        (2)  Termination of sanction. If the Board
determines that the failure that led to the imposition of a
sanction has been corrected

            (A)  in the case of the sanction described in
subsection (b)(1)(A), the Board shall notify the regional
alliance against which the sanction is imposed; or

            (B)  in the case of any other sanction described
in subsection (b), the Board shall notify the Secretary of
Health and Human Services.

   (d)  Protection of Access to Benefits.The Board and the
Secretary of Health and Human Services shall exercise
authority to take actions under this section with respect to
a State only in a manner that assures the continuous
coverage of eligible individuals under regional alliance
health plans.
            Section 1513   REDUCTION IN PAYMENTS FOR HEALTH
PROGRAMS BY SECRETARY OF HEALTH AND HUMAN SERVICES.
    (a)  In General. Upon receiving notice from the Board
under section 1512(b)(1)(B), the Secretary of Health and
Human Services shall reduce the amount of any of the
payments described in subsection (b) that would otherwise be
made to individuals and entities in the State by such amount
as the Secretary determines to be appropriate.
   (b)  Payments Described. The payments described in this
subsection are as follows:

        (1)  Payments to academic health centers in the
State under subtitle B of title III.

        (2)  Payments to individuals and entities in the
State for health research activities under section 301 and
title IV of the Public Health Service Act.

        (3)  Payments to hospitals in the State under part 4
of subtitle E of title III (relating to payments to
hospitals serving vulnerable populations)

            Section 1514   REVIEW OF FEDERAL DETERMINATIONS.

  Any State or alliance affected by a determination by the
Board under this subpart may appeal such determination in
accordance with section 5231.

          Section 1515   FEDERAL SUPPORT FOR STATE
IMPLEMENTATION.

    (a)  Planning Grants.

        (1)  In general. Not later than 90 days after the
date of the enactment of this Act, the Secretary shall make
available to each State a planning grant to assist a State
in the development of a health care system to become a
participating State under subtitle C.

        (2)  Formula. The Secretary shall establish a
formula for the distribution of funds made available under
this subsection.

        (3)  Authorization of appropriations. There are
authorized to be appropriated $50,000,000 in each of fiscal
years 1995 and 1996 for grants under this subsection.

    (b)  Grants for Start-up Support.

        (1)  In general. The Secretary shall make available
to States, upon their enacting enabling legislation to
become participating States, grants to assist in the
establishment of regional alliances.

        (2)  Formula. The Secretary shall establish a
formula for the distribution of funds made available under
this subsection.

        (3)  State matching funds required. Funds are
payable to a State under this subsection only if the State
provides assurances, satisfactory to the Secretary, that
amounts of State
funds (at least equal to the amount made available under
this subsection) are expended for the purposes described in
paragraph (1).

        (4)  Authorization of appropriations. There are
authorized to be appropriated $313,000,000 for fiscal year
1996, $625,000,000 for fiscal year 1997, and $313,000,000
for fiscal year 1998 for grants under this subsection.

        Subpart C    Responsibilities in Absence of State
Systems

           Section 1521   APPLICATION OF SUBPART.

   (a)  Initial Application. This subpart shall apply with
respect to a State as of January 1, 1998, unless

        (1)  the State submits a document for a State system
under section 1511(a)(1) by July 1, 1997, and

        (2)  the Board determines under section 1511 that
such system meets the requirements of part 1 of subtitle C.

    (b)  Termination of Approval of System of Participating
State. In the case of a participating State for which the
Board terminates approval of the State system under section
1512(b)(2), this subpart shall apply with respect to the
State as of such date as is appropriate to assure the
continuity of coverage for the comprehensive benefit package
for eligible individuals in the State.

            Section 1522   FEDERAL ASSUMPTION OF
RESPONSIBILITIES IN NON-PARTICIPATING STATES.

    (a)  Notice. When the Board determines that this subpart
will apply to a State for a calendar year, the Board shall
notify the Secretary of Health and Human Services.

    (b)  Establishment of Regional Alliance System. Upon
receiving notice under subsection (a), the Secretary shall
take such steps, including the establishment of regional
alliances, and compliance with other requirements applicable
to participating States under subtitle C, as are necessary
to ensure that the comprehensive benefit package is provided
to eligible individuals in the State during the year.

    (c)  Requirements for Alliances. Subject to section
1523, any regional alliance established by the Secretary
pursuant to this section must meet all the requirements
applicable under subtitle D to a regional alliance
established and operated by a participating State, and the
Secretary shall have the authority to fulfill all the
functions of such an alliance.

    (d)  Establishment of Guaranty Fund.

        (1)  Establishment. The Secretary must ensure that
there is a guaranty fund that meets the requirements
established by the Board under section 1552, in order to
provide financial protection to health care providers and
others in the case of a failure of a regional alliance
health plan under a regional alliance established and
operated by the Secretary under this section.

        (2)  Assessments to provide guaranty funds. In the
case of a failure of one or more regional alliance health
plans under a regional alliance established and operated by
the Secretary under this section, the Secretary may require
each regional
alliance health plan under the alliance to pay an assessment
to the Secretary in an amount not to exceed 2 percent of the
premiums of such plans paid by or on behalf of regional
alliance eligible individuals during a year for so long as
necessary to generate sufficient revenue to cover any
outstanding claims against the failed plan.

            Section 1523   IMPOSITION OF SURCHARGE ON
PREMIUMS UNDER FEDERALLY-OPERATED SYSTEM.

    (a)  In General. If this subpart applies to a State for
a calendar year, the premiums charged under the regional
alliance established and operated by the Secretary in the
State shall be equal to premiums that would otherwise be
charged under a regional alliance established and operated
by the State, increased by 15 percent. Such 15 percent
increase shall be used to reimburse the Secretary for any
administrative or other expenses incurred as a result of
establishing and operating the system.

    (b)  Treatment of Surcharge as Part of Premium. For
purposes of determining the compliance of a State for which
this subpart applies in a year with the requirements for
budgeting under subtitle A of title VI for the year, the 15
percent increase described in subsection (a) shall be
treated as part of the premium for payment to a regional
alliance.

          Section 1524   RETURN TO STATE OPERATION.

    (a)  Application Process. After the establishment and
operation of an alliance system by the Secretary in a State
under section 1522, the State may at any time apply to the
Board for the approval of a State system in accordance with
the procedures described in section 1511.

    (b)  Timing. If the Board approves the system of a State
for which the Secretary has operated an alliance system
during a year, the Secretary shall terminate the operation
of the system, and the State shall establish and operate its
approved system, as of January 1 of the first year beginning
after the Board approves the State system. The termination
of the Secretary's system and the operation of the State's
system shall be conducted in a manner that assures the
continuous coverage of eligible individuals in the State
under regional alliance health plans.

        Subpart D    Establishment of Class Factors for
Charging Premiums

            Section 1531   PREMIUM CLASS FACTORS.

    (a)  In General.For each class of family enrollment (as
specified in section 1011(c)), for purposes of title VI, the
Board shall establish a premium class factor that reflects,
subject to subsection (b), the relative actuarial value of
the comprehensive benefit package of the class of family
enrollment compared to such value of such package for
individual enrollment.

    (b)  Conditions. In establishing such factors, the
factor for the class of individual enrollment shall be 1 and
the factor for the couple-only class of family enrollment
shall be 2.

Subpart E    Risk Adjustment and Reinsurance Methodology for
Payment of Plans

            Section 1541   DEVELOPMENT OF A RISK ADJUSTMENT
AND REINSURANCE METHODOLOGY.

    (a)  Development.
        (1)  Initial development. Not later than April 1,
1995, the Board shall develop a risk adjustment and
reinsurance methodology in accordance with this subpart.
        (2)  Improvements. The Board shall make such
improvements in such methodology as may be appropriate to
achieve the purposes described in subsection (b)(1).
    (b)  Methodology.
        (1)  Purposes. Such methodology shall provide for
the adjustment of payments to regional alliance health plans
for the purposes of
            (A)  assuring that payments to such plans
reflect the expected relative utilization and expenditures
for such services by each plan's enrollees compared to the
average utilization and expenditures for regional alliance
eligible individuals, and
            (B)  protecting health plans that enroll a
disproportionate share of regional alliance eligible
individuals with respect to whom expected utilization of
health care services (included in the comprehensive benefit
package) and expected health care expenditures for such
services are greater than the average level of such
utilization and expenditures for regional alliance eligible
individuals.
      (2)  Factors to be considered. In developing such
methodology, the Board shall take into account the following

factors:

            (A)  Demographic characteristics.

            (B)  Health status.

            (C)  Geographic area of residence.

            (D)  Socio-economic status.

            (E)  Subject to paragraph (5), (i) the
proportion of enrollees who are SSI recipients and (ii) the
proportion of enrollees who are AFDC recipients.


            (F)  Any other factors determined by the Board
to be material to the purposes described in paragraph (1).


        (3)  Zero sum. The methodology shall assure that the
total payments to health plans by the regional alliance
after application of the methodology are the same as the
amount of payments that would have been made without
application of the methodology.


        (4)  Prospective adjustment of payments. The
methodology, to the extent possible and except in the case
of a mandatory reinsurance system described in subsection
(c), shall be applied in manner that provides for the
prospective adjustment of payments to health plans.


        (5)  Treatment of ssi/afdc adjustment. The Board is
not required to apply the factor described in clause (i) or
(ii) of paragraph (2)(E) if the Board determines that the
application of the other risk adjustment factors described
in paragraph (2) is sufficient to adjust premiums to take
into account the enrollment
in plans of AFDC recipients and SSI recipients.

        (6)  Special consideration for mental illness. In
developing the methodology under this section, the Board
shall give consideration to the unique problems of adjusting
payments to health plans with respect to individuals with
mental illness.

        (7)  Special consideration for veterans, military,
and indian health plans. In developing the methodology under
this section, the Board shall give consideration to the
special enrollment and funding provisions relating to plans
described in section 1004(b).

        (8)  Adjustment to account for use of estimates.
Subject to section 1361(b)(3) (relating to establishment of
regional alliance reserve funds), if the total payments made
by a regional alliance to all regional alliance health plans
in a year under section 1351(b) exceeds, or is less than,
the total of such payments estimated by the alliance in the
application of the methodology under this subsection,
because of a difference between

            (A)  the alliance's estimate of the distribution
of enrolled families in different risk categories (assumed
in the application of risk factors under this subsection in
making payments to regional alliance health plans), and

            (B)  the actual distribution of such enrolled
families in such categories, the methodology under this
subsection shall provide for an adjustment in the
application of such methodology in the second succeeding
year in a manner that would reduce, or increase,
respectively, by the amount of such excess (or deficit) the
total of such payments made by the alliance to all such
plans.

    (c)  Mandatory Reinsurance.

        (1)  In general. The methodology developed under
this section may include a system of mandatory reinsurance,
but may not include a system of voluntary reinsurance.

        (2)  Requirement in certain cases. If the Board
determines that an adequate system of prospective adjustment
of payments to health plans to account for the health status
of individuals enrolled by regional alliance health plans
cannot be developed (and ready for implementation) by the
date specified in subsection (a)(1), the Board shall include
a mandatory reinsurance system as a component of the
methodology. The Board may thereafter reduce or eliminate
such a system at such time as the Board determines that an
adequate prospective payment adjustment for health status
has been developed and is ready for implementation.

        (3)  Reinsurance system. The Board, in developing
the methodology for a mandatory reinsurance system under
this subsection, shall

            (A)  provide for health plans to make payments
to state-established reinsurance programs for the purpose of
reinsuring part or all of the health care expenses for items
and services included in the comprehensive benefit package
for specified classes of high-cost enrollees or specified
high-cost treatments or diagnoses; and

            (B)  specify the manner of creation, structure,
and operation of the system in each State, including

 (i)  the manner (which may be prospective or retrospective)
in which health plans make payments to the system, and

    (ii)  the type and level of reinsurance coverage
provided by the system.

    (d)  Confidentiality of Information. The methodology
shall be developed in a manner consistent with privacy
standards promulgated under section 5120(a). In developing
such standards, the Board shall take into account any
potential need of alliances for certain individually
identifiable health information in order to carry out risk-
adjustment and reinsurance activities under this Act, but
only to the minimum extent necessary to carry out such
activities and with protections provided to minimize the
identification of the individuals to whom the information
relates.

            Section 1542   INCENTIVES TO ENROLL
DISADVANTAGED GROUPS.

    The Board shall establish standards under which States
may provide (under section 1203(e)(3)) for an adjustment in
the riskadjustment methodology developed under section 1541
in order to provide a financial incentive for regional
alliance health plans to enroll individuals who are members
of disadvantaged groups.

            Section 1543   ADVISORY COMMITTEE.

   (a)  In General. The Board shall establish an advisory
committee to provide technical advice and recommendations
regarding the development and modification of the risk
adjustment and reinsurance methodology developed under this
subpart.

    (b)  Composition. Such advisory committee shall consist
of 15 individuals and shall include individuals who are
representative of health plans, regional alliances,
consumers, experts, employers, and health providers.

         Section 1544   RESEARCH AND DEMONSTRATIONS.

    The Secretary shall conduct and support research and
demonstration projects to develop and improve, on a
continuing basis, the risk adjustment and reinsurance
methodology under this subpart.

            Section 1545   TECHNICAL ASSISTANCE TO STATES
AND ALLIANCES.

 The Board shall provide technical assistance to States and
regional alliances in implementing the methodology developed
under this subpart.

        Subpart F    Responsibilities for Financial
Requirements

            Section 1551   CAPITAL STANDARDS FOR REGIONAL
ALLIANCE HEALTH PLAN.

 (a)  In General.The Board shall establish, in consultation
with the States, minimum capital requirements for regional
alliance health plans, for purposes of section 1204(a).

    (b)  $500,000 Minimum. Subject to subsection (c), under
such requirements there shall be not less than $500,000 of
capital maintained for each plan offered in each alliance
area, regardless of whether or not the same sponsor offered
more than
one of such plans.
 (c)  Additional Capital Requirements. The Board may require
additional capital for factors likely to affect the
financial stability of health plans, including the
following:

        (1)  Projected plan enrollment and number of
providers participating in the plan.
       (2)  Market share and strength of competition.
        (3)  Extent and nature of risk-sharing with
participating providers and the financial stability of risk-
sharing providers.
        (4)  Prior performance of the plan, risk history,
and liquidity of assets.
    (d)  Development of Standards by NAIC. The Board may
request the National Association of Insurance Commissioners
to develop model standards for the additional capital
requirements described in subsection (c) and to present such
standards to the Board not later than July 1, 1995. The
Board may accept such standards as the standards to be
applied under subsection (c) or modify the standards in any
manner it finds appropriate.
         Section 1552   STANDARD FOR GUARANTY FUNDS.
 (a)  In General. In consultation with the States, the Board
shall establish standards for guaranty funds established by
States under section 1204(c).

    (b)  Guaranty Fund Standards. The standards established
under subsection (a) for a guaranty fund shall include the
following:

        (1)  Each fund must have a method to generate
sufficient resources to pay health providers and others in
the case of a failure of a health plan (as described in
section 1204(d)(4)) in order to meet obligations with
respect to

            (A)  services rendered by the health plan for
the comprehensive benefit package, including any
supplemental coverage for cost sharing provided by the
health plan, and
         (B)  services rendered prior to health plan
insolvency and services to patients after the insolvency but
prior to their enrollment in other health plans.

        (2)  The fund is liable for all claims against the
plan by health care providers with respect to their
provision of items and services covered under the
comprehensive benefit package to enrollees of the failed
plan. Such claims, in full, shall take priority over all
other claims. The fund also is liable, to the extent and in
the manner provided in accordance with rules established by
the Board, for other claims, including other claims of such
providers and the claims of contractors, employees,
governments, or any other claimants.

        (3)  The fund stands as a creditor for any payments
owed the plan to the extent of the payments made by the fund
for obligations of the plan.

        (4)  The fund has authority to borrow against future
assessments (payable under section 1204(c)(2)) in order to
meet the obligations of failed plans participating in the
fund.

    Part 2   RESPONSIBILITIES OF DEPARTMENT OF HEALTH AND
HUMAN
SERVICES

        Subpart A    General Responsibilities

            Section 1571   GENERAL RESPONSIBILITIES OF
SECRETARY OF HEALTH AND HUMAN SERVICES.

    (a)  In General. Except as otherwise specifically
provided under this Act (or with respect to administration
of provisions in the Internal Revenue Code of 1986 or in the
Employee Retirement Income Security Act of 1974), the
Secretary of Health and Human Services shall administer and
implement all of the provisions of this Act, except those
duties delegated to the National Health Board, any other
executive agency, or to any State.

    (b)  Financial Management Standards. The Secretary, in
consultation with the Secretaries of Labor and the Treasury,
shall establish, for purposes of section 1361, standards
relating to the management of finances, maintenance of
records, accounting practices, auditing procedures, and
financial reporting for health alliances. Such standards
shall take into account current Federal laws and regulations
relating to fiduciary responsibilities and financial
management of funds.

 (c)  Auditing Regional Alliance Performance. The Secretary
shall perform periodic financial and other audits of
regional alliances to assure that such alliances are
carrying out their responsibilities under this Act
consistent with this Act. Such audits shall include audits
of alliance performance in the areas of

      (1)  assuring enrollment of all regional alliance
eligible individuals in health plans,

        (2)  management of premium and cost sharing
discounts and reductions provided; and

        (3)  financial management of the alliance, including
allocation of collection shortfalls.

            Section 1572   ADVISORY COUNCIL ON BREAKTHROUGH
DRUGS.

    (a)  In General. The Secretary shall appoint an Advisory
Council on Breakthrough Drugs (in this section referred to
as the "Council") that will examine the reasonableness of
launch prices of new drugs that represent a breakthrough or
significant advance over existing therapies.

/* This section if passed potentially might affect the
launch of significant AIDS treatments-- consider the
controversy over the price of Retrovir (TM) brand of AZT.

    (b)  Duties. (1)  At the request of the Secretary, or a
member of the Council, the Council shall make a
determination regarding the reasonableness of launch prices
of a breakthrough drug. Such a determination shall be based
on

            (A)  prices of other drugs in the same
therapeutic class;

            (B)  cost information supplied by the
manufacturer;

            (C)  prices of the drug in countries specified
in section 802(b)(4)(A) of the Federal Food, Drug, and
Cosmetic Act;

            (D)  projected prescription volume, economies of
scale, product stability, special manufacturing requirements
and research costs;

            (E)  cost effectiveness relative to the cost of
alternative course of treatment options, including non
pharmacological medical interventions; and

            (F)  improvements in quality of life offered by
the new product, including ability to return to work,
ability to perform activities of daily living, freedom from
attached medical devices, and other appropriate measurements
of quality of life improvements.

        (2)  The Secretary shall review the determinations
of the Council and publish the results of such review along
with the Council's determination (including minority
opinions) as a notice in the Federal Register.

    (c)  Membership. The Council shall consist of a chair
and 12 other persons, appointed without regard to the
provisions of title 5, United States Code, governing
appointments in the competitive service. The Council shall
include a representative from the pharmaceutical industry,
consumer organizations, physician organizations, the
hospital industry, and the managed care industry. Other
individuals appointed by the Secretary shall be recognized
experts in the fields of health care economics,
pharmacology, pharmacy, and prescription drug reimbursement.
Only one member of the Council may have direct or indirect
financial ties to the pharmaceutical industry.

 (d)  Term of Appointments. Appointments shall be for a term
of 3 years, except that the Secretary may provide initially
for such shorter terms as will ensure that the terms of not
more than 5 members expire in any one year.

 (e)  Compensation. Members of the Council shall be entitled
to receive reimbursement of expenses and per diem in lieu of
subsistence in the same manner as other members of advisory
councils appointed by the Secretary are provided such
reimbursements under the Social Security Act.

 (f)  No Termination. Notwithstanding the provisions of the
Federal Advisory Committee Act, the Council shall continue
in existence until otherwise specified in law.

      Subpart B    Certification of Essential Community
Providers

            Section 1581   CERTIFICATION.

    (a)  In General. For purposes of this Act, the Secretary
shall certify as an "essential community provider" any
health care provider or organization that

        (1)  is within any of the categories of providers
and organizations specified in section 1582(a), or

        (2)  meets the standards for certification under
section 1583(a).

  (b)  Timely Establishment of Process. The Secretary shall
take such actions as may be necessary to permit health care
providers and organizations to be certified as essential
community providers in a State before the beginning of the
first
year for the State.
            Section 1582   CATEGORIES OF PROVIDERS
AUTOMATICALLY CERTIFIED.
    (a)  In General. The categories of providers and
organizations specified in this subsection are as follows:
        (1)  Migrant health centers. A recipient or
subrecipient of a grant under section 329 of the Public
Health Service Act.
        (2)  Community health centers. A recipient or
subrecipient of a grant under section 330 of the Public
Health Service Act.
        (3)  Homeless program providers. A recipient or
subrecipient of a grant under section 340 of the Public
Health Service Act.
        (4)  Public housing providers. A recipient or
subrecipient of a grant under section 340A of the Public
Health Service Act.
        (5)  Family planning clinics. A recipient or
subrecipient of a grant under title X of the Public Health
Service Act.
        (6)  Indian health programs. A service unit of the
Indian Health Service, a tribal organization, or an urban
Indian program, as defined in the Indian Health Care
Improvement Act.
        (7)  AIDS providers under ryan white act. A public
or private nonprofit health care provider that is a
recipient or subrecipient of a grant under title XXVI of the
Public Health Service Act.
/* This section automatically provides for the certification
of funds under the Ryan White Act. The Ryan White Act is
contained in the statutes menu. */
        (8)  Maternal and child health providers.A public or
private nonprofit entity that provides prenatal care,
pediatric care, or ambulatory services to children,
including children with special health care needs, and that
receives funding for such care or services under title V of
the Social Security Act.
        (9)  Federally qualified health center; rural health
clinic. A Federally-qualified health center or a rural
health clinic (as such terms are defined in section 1861(aa)
of the Social Security Act).
        (10)  Provider of school health services.A provider
of school health services that receives funding for such
services under subtitle G of title III.
        (11)  Community practice network. A qualified
community practice network receiving development funds under
subtitle E of title III.
    (b)  Subrecipient Defined. In this subpart, the term
"subrecipient" means, with respect to a recipient of a grant
under a particular authority, an entity that--
     (1)  is receiving funding from such a grant under a
contract with the principal recipient of such a grant, and

        (2)  meets the requirements established to be a
recipient
of such a grant.

 (c)  Health Professional Defined. In this subpart, the term
"health professional" means a physician, nurse, nurse
practitioner, certified nurse midwife, physician assistant,
psychologist, dentist, pharmacist, and other health care
professional recognized by the Secretary.

            Section 1583   STANDARDS FOR ADDITIONAL
PROVIDERS.

    (a)  Standards. The Secretary shall publish standards
for the certification of additional categories of health
care providers and organizations as essential community
providers, including the categories described in subsection
(b). Such a health care provider or organization shall not
be certified unless the Secretary determines, under such
standards, that health plans operating in the area served by
the applicant would not otherwise be able to assure adequate
access to items and services included in the comprehensive
benefit package if such a provider was not so certified.

 (b)  Categories To Be Included. The categories described in
this subsection are as follows:

       (1)  Health professionals. Health professionals

            (A)  located in an area designated as a health
professional shortage area (under section 332 of the Public
Health Service Act), or

            (B)  providing a substantial amount of health
services (as determined in accordance with standards
established by the Secretary) to a medically underserved
population (as designated under section 330 of such Act).

        (2)  Institutional providers. Public and private
nonprofit hospitals and other institutional health care
providers located in such an area or providing health
services to such a population.

        (3)  Other providers. Other public and private
nonprofit agencies and organizations that

            (A)  are located in such an area or providing
health services to such a population, and

            (B)  provide health care and services essential
to residents of such an area or such populations.

            Section 1584   CERTIFICATION PROCESS; REVIEW;
TERMINATION OF CERTIFICATIONS.

    (a)  Certification Process.

        (1)  Publication of procedures. The Secretary shall
publish, not later than 6 months after the date of the
enactment of this Act, the procedures to be used by health
care professionals, providers, agencies, and organizations
seeking certification under this subpart, including the form
and manner in which an application for such certification is
to be made.

        (2)  Timely determination. The Secretary shall make
a determination upon such an application not later than 60
days (or 15 days in the case of a certification for an
entity described in section 1582) after the date the
complete application has been submitted. The determination
on an application for certification
of an entity described in section 1582 shall only involve
the verification that the entity is an entity described in
such section.
    (b)  Review of Certifications. The Secretary shall
periodically review whether professionals, providers,
agencies, and organizations certified under this subpart
continue to meet the requirements for such certification.
    (c)  Termination or Denial of Certification.
        (1)  Preliminary finding. If the Secretary
preliminarily finds that an entity seeking certification
under this section does not meet the requirements for such
certification or such an entity certified under this subpart
fails to continue to meet the requirements for such
certification, the Secretary shall notify the entity of such
preliminary finding and permit the entity an opportunity,
under subtitle C of title V, to rebut such findings.
        (2)  Final determination. If, after such
opportunity, the Secretary continues to find that such an
entity continues to fail to meet such requirements, the
Secretary shall terminate the certification and shall notify
the entity, regional alliances, and corporate alliances of
such termination and the effective date of the termination.
            Section 1585   NOTIFICATION OF HEALTH ALLIANCES
AND PARTICIPATING STATES.
    (a)  In General. Not less often than annually the
Secretary shall notify each participating State and each
health alliance of essential community providers that have
been certified under this subpart.
    (b)  Contents. Such notice shall include sufficient
information to permit each health alliance to notify health
plans of the identify of each entity certified as an
essential community provider, including
        (1)  the location of the provider within each plan's
service area,
        (2)  the health services furnished by the provider,
and
        (3)  other information necessary for health plans to
carry out part 3 of subtitle E.
    Part 3   SPECIFIC RESPONSIBILITIES OF SECRETARY OF
LABOR.
            Section 1591   RESPONSIBILITIES OF SECRETARY OF
LABOR.
   (a)  In General. The Secretary of Labor is responsible
        (1)  under subtitle G, for the enforcement of
requirements applicable to employers under regional
alliances (including requirements relating to payment of
premiums) and the administration of corporate alliances;
     (2)  under subtitle D, with respect to elections by
eligible sponsors to become corporate alliances and the
termination of such elections;

        (3)  under section 1395, for the temporary
assumption of the operation of self-insured corporate
alliance health plans that are insolvent;

        (4)  under section 1396, for the establishment and
administration of Corporate Alliance Health Plan Insolvency
Fund;
        (5)  for carrying out any other responsibilities
assigned to the Secretary under this Act; and
        (6)  for administering title I of the Employee
Retirement Income Security Act of 1974 as it relates to
group health plans maintained by corporate alliances.
    (b)  Agreements with States. The Secretary of Labor may
enter into agreements with States in order to enforce
responsibilities of employers and corporate alliances, and
requirements of corporate alliance health plans, under
subtitle B of title I of the Employee Retirement Income
Security Act of 1974.
    (c)  Consultation with Board. In carrying out activities
under this Act with respect to corporate alliances,
corporate alliance health plans, and employers, the
Secretary of Labor shall consult with the National Health
Board.
    (d)  Employer-Related Requirements.
        (1)  In general. The Secretary of Labor, in
consultation with the Secretary, shall be responsible for
assuring that employers
            (A)  make payments of any employer premiums (and
withhold and make payment of the family share of premiums
with respect to qualifying employees) as required under this
Act, including auditing of regional alliance collection
activities with respect to such payments,
            (B)  submit timely reports as required under
this Act, and
            (C)  otherwise comply with requirements imposed
on employers under this Act.
        (2)  Audit and similar authorities.The Secretary of
Labor
            (A)  may carry out such audits (directly or
through contract) and such investigations of employers and
health alliances,
            (B)  may exercise such authorities under section
504 of Employee Retirement Income Security Act of 1974 (in
relation to activities under this Act),
            (C)  may, with the permission of the Board,
provide (through contract or otherwise) for such collection
activities (in relation to amounts owed to regional
alliances and for the benefit of such alliances), and
            (D)  may impose such civil penalties under
section 1345(d)(1), as may be necessary to carry out such
Secretary's responsibilities under this section.
    (e)  Authority. The Secretary of Labor is authorized to
issue such regulations as may be necessary to carry out
section 1607 and responsibilities of the Secretary under
this Act (including under title XI).
Title I, Subtitle G
Subtitle G    Employer Responsibilities
            Section 1601   PAYMENT REQUIREMENT.
  (a)  In General. Each employer shall provide for payments
required under section 6121 or 6131 in accordance with the
applicable provisions of this Act.

    (b)  Employers in Single-Payer States. In the case of an
employer with respect to employees who reside in a single-
payer State, the responsibilities of such employer under
such system shall supersede the obligations of the employer
under subsection (a), except as the Board may provide.

    (c)  Employers Participating in Regional Alliances
Through Multiemployer Plans. In the case of an employer
participating in a multiemployer plan, which plan elects to
serve as a regional alliance employer on behalf of its
participating employers, the employer's payment obligation
under section 6121 shall be deemed satisfied if the employer
pays to the multiemployer plan at least the premium payment
amount specified in section 6121(b) and the plan has assumed
legal obligations of such an employer under such section.

            Section 1602   REQUIREMENT FOR INFORMATION
REPORTING.

   (a)  Reporting of End-of-Year Information to Qualifying
Employees.

        (1)  In general. Each employer shall provide to each
individual who was a qualifying employee of the employer
during any month in the previous year information described
in paragraph (2) with respect to the employee.

      (2)  Information to be supplied. The information
described in this paragraph, with respect to a qualifying
employee, is the following (as specified by the Secretary):

            (A)  Regional alliance information. With respect
to each regional alliance through which the individual
obtained health coverage:

    (i)  The total number of months of full-time equivalent
employment (as determined under section 1901(b)(2)) for each
class of enrollment.

    (ii)  The amount of wages attributable to qualified
employment and the amount of covered wages (as defined in
paragraph (4)).

    (iii)  The total amount deducted from wages and paid for
the family share of the premium.

 (iv)  Such other information as the Secretary of Labor may
specify.

            (B)  Corporate alliance information. With
respect to a qualifying employee who obtains coverage
through a corporate alliance health plan:

    (i)  The total number of months of full-time equivalent
employees (as determined under section 1901(b)(2)) for each
class of enrollment.

 (ii)  Such other information as the Secretary of Labor may
specify.

        (3)  Alliance specific information. In the case of a
qualifying employee with respect to whom an employer made
employer premium payments during the year to more than one
regional alliance, the information under this subsection
shall be reported separately with respect to each such
alliance.

        (4)  Covered wages defined. In this section, the
term "covered wages"means wages paid an employee of an
employer during a month in which the employee was a
qualifying employee of the employer.

    (b)  Reporting of Information for Use of Regional
Alliances.

        (1)  In general. Each employer (including corporate
alliance employers) shall provide under subsection (f) on
behalf of each regional alliance information described in
paragraph (2) on an annual basis, information described in
paragraph (3) on a monthly basis, and information described
in paragraph (4) on a one-time basis, with respect to the
employment of qualifying employees in each year, month, or
other time, respectively.

        (2)  Information to be supplied on an annual
basis.The information described in this paragraph, with
respect to an employer, is the following (as specified by
the Secretary of Labor):

            (A)  Regional alliance information. With respect
to each regional alliance to which employer premium payments
were payable in the year:

    (i)  For each qualifying employee in the year

            (I)  The total number of months of full-time
equivalent employment (as determined under section
1901(b)(2)) for the employee for each class of enrollment.

            (II)  The total amount deducted from wages and
paid for the family share of the premium of the qualifying
employee.

 (ii)  The total employer premium payment made under section
6121 for the year with respect to the employment of all
qualifying employees residing in the alliance area and, in
the case of an employer that has obtained (or seeks to
obtain) a premium discount under section 6123, the total
employer premium payment that would have been owed for such
employment for the year but for such section.

    (iii)  The number of full-time equivalent employees
(determined under section 1901(b)(2)) for each class of
family enrollment in the year (and for each month in the
year in the case of an employer that has obtained or is
seeking a premium discount under section 6123).

    (iv)  In the case of an employer to which section 6124
applies in a year, such additional information as the
Secretary of Labor may require for purposes of that section.

    (v)  The amounts paid (and payable) pursuant to section
6125.

    (vi)  The amount of covered wages for each qualifying
employee.

        (3)  Information on a monthly basis.

            (A)  In general. The information described in
this
paragraph for a month for an employer is such information as
the Secretary of Labor may specify regarding

    (i)  the identity of each eligible individual who
changed qualifying employee status with respect to the
employer in the month; and

    (ii)  in the case of such an individual described in
subparagraph (B)(i)

            (I)  the regional alliance for the alliance area
in which the individual resides, and

            (II)   the individual's class of family
enrollment.

            (B)  Changes in qualifying employee status
described. For purposes of subparagraph (A), an individual
is considered to have changed qualifying employee status in
a month if the individual either (i) is a qualifying
employee of the employer in the month and was not a
qualifying employee of the employer in the previous month,
or (ii) is not a qualifying employee of the employer in the
month but was a qualifying employee of the employer in the
previous month.

        (4)  Initial information. Each employer, at such
time before the first year in which qualifying employees of
the employer are enrolled in regional alliance health plans
as the Board may specify, shall provide for the reporting of
such information relating to employment of eligible
individuals as the Board may specify.

    (c)  Reconciliation of Employer Premium Payments.

        (1)  Provision of information. Each employer
(whether or not the employer claimed (or claims) an employer
premium discount under section 6123 for a year) that is
liable for employer premium payments to a regional alliance
for any month in a year shall provide the alliance with such
information as the alliance may require (consistent with
rules of the Secretary of Labor) to determine the
appropriate amount of employer premium payments that should
have been made for all months in the year (taking into
account any employer premium discount under section 6123 for
the employer).

        (2)  Deadline. Such information shall be provided
not later than the beginning of February of the following
year with the payment to be made for that month.

        (3)  Reconciliation.

            (A)  Continuing employers. Based on such
information, the employer shall adjust the amount of
employer premium payment made in the month in which the
information is provided to reflect the amount by which the
payments in the previous year were greater or less than the
amount of payments that should have been made.

            (B)  Discontinuing employers. In the case of a
person that ceases to be an employer in a year, such
adjustment shall be made in the form of a payment to, or
from, the alliance involved.

        (4)  Special treatment of self-employed individuals.
Except as the Secretary of Labor may provide, individuals
who are employers only by virtue of the operation of section
6126 shall have employer premium payments attributable to
such section reconciled (in the manner previously described
in this
subsection) under the process for the collection of the
family share of premiums under section 1344 rather than
under this subsection.
    (d)  Special Rules for Self-Employed.
        (1)  In general. In the case of an individual who is
treated as an employer under section 6126, the individual
shall provide, under subsection (f) on behalf of each
regional alliance, information described in paragraph (2)
with respect to net earnings from self-employment income of
the individual in each year.
        (2)  Information to be supplied. The information
described in this paragraph, with respect to an individual,
is such information as may be necessary to compute the
amount payable under section 6131 by virtue of section 6126.
    (e)  Form. Information shall be provided under this
section in such electronic or other form as the Secretary
specifies. Such specifications shall be done in a manner
that, to the maximum extent practicable, simplifies
administration for small employers.
    (f)  Information Clearinghouse Functions.
        (1)  Designation. The Board shall provide for the
use of the regional centers (which are part of the
electronic data network under section 5103) to perform
information clearinghouse functions under this section with
respect to employers and regional and corporate alliances.
        (2)  Functions. The functions referred to in
paragraph (1) shall include
            (A)  receipt of information submitted by
employers under subsection (b) on an annual (or one-time)
basis,
            (B)  from the information received, transmittal
of information required to regional alliances, and
            (C)  such other functions as the Board
specifies.
  (g)  Deadline. Information required to be provided by an
employer for a year under this section

        (1)  to a qualifying employee shall be provided not
later than the date the employer is required under law to
provide for statements under section 6051 of the Internal
Revenue Code of 1986 for that year, or

        (2)  to a health alliance (through a regional
center) shall be provided not later than the date by which
information is required to be filed with the Secretary
pursuant to agreements under section 232 of the Social
Security Act for that year.

  (h)  Notice to Certain Individuals Who Are Not Employees.

        (1)  In general. A person that carries on a trade or
business shall notify in writing each individual described
in paragraph (2) that the person is not obligated to make
any employer health care premium payment (under section
6121) in relation to the services performed by the
individual for the person.

        (2)  Individual described. An individual described
in
this paragraph, with respect to a person, is an individual who
normally performs services for the person in the person's
trade or business for more than 40 hours per month but who is
not an employee of the person (within the meaning of section
1901(a)).

       (3)  Timing; effective date. Such notice shall be
provided within a reasonable time after the individual begins
performing services forthe person, except that in no event is
such a notice required to be provided with respect to services
performed before January 1, 1998.

        (4)  Exceptions. The Secretary shall issue regulations
providing exceptions to the notice requirement of paragraph
(1) with respect to individuals performing services on an
irregular, incidental, or casual basis.

        (5)  Model notice. The Secretary shall publish a model
notice that is easily understood by the average reader and
that persons may use to satisfy the requirements of paragraph
(1).

          Section 1603   REQUIREMENTS RELATING TO NEW
EMPLOYEES.

  (a)  Completion of Enrollment Information Form. At the time
an individual is hired as a qualifying employee of a regional
alliance employer, the employer shall obtain from the
individual the following information (pursuant to rules
established by the Secretary of Labor):

        (1)  The identity of the individual.

        (2)  The individual's alliance area of residence and
whether the individual has moved from another alliance area.

        (3)  The class of family enrollment applicable to the
individual.

        (4)  The health plan (and health alliance) in which
the individual is enrolled at that time.

        (5)  If the individual has moved from another alliance
area, whether the individual intends to enroll in a regional
alliance health plan.

    (b)  Transmittal of Information to Alliance.

       (1)  In general. Each employer shall transmit the
information obtained under subsection (a) to the regional
alliance for the alliance area in which the qualifying
employee resides (or will reside at the time of initial
employment).

        (2)  Deadline. Such information shall be transmitted
within 30 days of the date of hiring of the employee.

       (3)  Form. Information under this section may be
forwarded in electronic form to a regional alliance.

   (c)  Provision of Enrollment Form and Information. In the
case of an individual described in subsection (a)(5), the
employer shall provide the individual, at the time of hiring,
with

      (1)  such information regarding the choice of, and
enrollment in, regional alliance health plans, and

      (2)  such enrollment form, as the regional alliance
provides to the employer.

            Section 1604   AUDITING OF RECORDS.

    Each regional alliance employer shall maintain such
records, and provide the regional alliance for the area in
which the employer maintains the principal place of employment
(as specified by the Secretary of Labor) with access to such
records, as may be necessary to verify and audit the
information reported under this subtitle.

            Section 1605   PROHIBITION OF CERTAIN EMPLOYER
DISCRIMINATION.

    No employer may discriminate with respect to an employee on
the basis of the family status of the employee or on the basis
of the class of family enrollment selected with respect to the
employee.

            Section 1606   PROHIBITION ON SELF-FUNDING OF COST
SHARING BENEFITS BY REGIONAL ALLIANCE EMPLOYERS.

    (a)  Prohibition. A regional alliance employer (and a
corporate alliance employer with respect to employees who are
regional alliance eligible individuals) may provide benefits to
employees that consist of the benefits included in a cost
sharing policy (as defined in section 1421(b)(2)) only through
a contribution toward the purchase of a cost sharing policy
which is funded primarily through insurance.

    (b)  Individual and Employer Responsibilities. In the case
of an individual who resides in a single-payer State and an
employer with respect to employees who reside in such a State,
the responsibilities of such individual and employer under such
system shall supersede the obligations of the individual and
employer under this subtitle.

          Section 1607   EQUAL VOLUNTARY CONTRIBUTION
REQUIREMENT.

    (a)  In General.

         (1)  Equal voluntary employer premium payment
requirement.

            (A)  Regional alliance health plans. If an employer
makes available a voluntary employer premium payment (as
defined in subsection (d)) on behalf of a full-time employee
(as defined in section 1901(b)(2)(C)) who is enrolled in a
regional alliance health plan of a regional alliance in a class
of family enrollment, the employer shall make available such a
voluntary employer premium payment in the same dollar amount to
all qualifying employees (as defined in section 1901(b)(1)) of
the employer who are enrolled in any regional alliance health
plan of the same alliance in the same class of family
enrollment.

            (B)  Corporate alliance health plans. If a
corporate alliance employer makes available a voluntary
employer premium payment on behalf of a full-time employee who
is enrolled in a corporate alliance health plan of a corporate
alliance in a class of family enrollment in a premium area
(designated under section 1384(b)), the employer shall make
available such a voluntary employer premium payment in the same
dollar amount to all qualifying employees of the employer
enrolled in any corporate alliance health plan of the same
alliance in the same class of family enrollment in the same
premium area.

            (C)  Treatment of part-time employees. In applying
subparagraphs (A) and (B) in the case of a qualifying employee
employed on a part-time basis (within the meaning of section
1901(b)(2)(A)(ii)), the dollar amount shall be equal to the
fulltime employment ratio (as defined in section 1901(b)(2)(B))
multiplied by the dollar amount otherwise required.
      (2)  Limit on voluntary employer premium payments.
            (A)  Regional alliance health plans. An employer
may not make available a voluntary employer premium payment on
behalf of an employee (enrolled in a regional alliance health
plan of a regional alliance in a class of family enrollment) in
an amount that exceeds the maximum amount that could be payable
as the family share of premium (described in section
6101(b)(2)) for the most expensive regional alliance health
plan of the same alliance for the same class of family
enrollment.
            (B)  Corporate alliance health plans. An employer
may not make available a voluntary employer premium payment on
behalf of an employee (enrolled in a corporate alliance health
plan of a corporate alliance in a class of family enrollment in
a premium area, designated under section 1384) in an amount
that exceeds the maximum amount that could be payable as the
family share of premium (described in section 6101(b)(3)) for
the most expensive corporate alliance health plan of the same
alliance for the same class of family enrollment in the same
premium area.
            (C)  Exclusion of plans without material
enrollment. Subparagraphs (A) and (B) shall not take into
account any health plan that does not have material enrollment
(as determined in accordance with regulations of the Secretary
of Labor).
        (3)  Nondiscrimination among plans selected. An
employer may not discriminate in the wages or compensation
paid, or other terms or conditions of employment, with respect
to an employee based on the health plan (or premium of such a
plan) in which the employee is enrolled.
    (b)  Rebate Required in Certain Cases.
         (1)  In general.Subject to subsection (c), if
            (A)  an employer makes available a voluntary
employer premium payment on behalf of an employee, and
            (B) (i) the sum of the amount of the applicable
alliance credit (under section 6103) and the voluntary employer
premium payment, exceeds (ii) the premium for the plan
selected, the employer must rebate to the employee an amount
equal to the excess described in subparagraph (B).
        (2)  Rebates.
            (A)  In general. Any rebate provided under
paragraph (1) shall be treated, for purposes of the Internal
Revenue Code of 1986, as wages described in section 3121(a) of
such Act.
            (B)  Treatment of multiple full-time employment in
a family. In the case of
    (i)  an individual who is an employee of more than one
employer, or

    (ii)  a couple for which both spouses are employees, if
more
than one employer provides for voluntary employer premium
payments, the individual or couple may elect to have paragraph
(1) applied with respect to all employment.
    (c)  Exception for Collective Bargaining Agreement.
Subsections (a) and (b) (other than subsection (a)(2)) shall
not apply with respect to voluntary employer premium payments
made pursuant to a bona fide collective bargaining agreement.
    (d)  Voluntary Employer Premium Payment. In this section,
the term "voluntary employer premium payment" means any payment
designed to be used exclusively (or primarily) towards the cost
of the family share of premiums for a health plan. Such term
does not include any employer premiums required to be paid
under part 3 of subtitle B of title VI.
          Section 1608   EMPLOYER RETIREE OBLIGATION.
    (a)  In General. If an employer was providing, as of
October 1, 1993, a threshold payment (specified in subsection
(c)) for a person who was a qualifying retired beneficiary (as
defined in subsection (b)) as of such date, the employer shall
pay, to or on behalf of that beneficiary for each month
beginning with January 1998, an amount that is not less than
the amount specified in subsection (d), but only if and for so
long as the person remains a qualifying retired beneficiary.
    (b)  Qualifying Retired Beneficiary. In this section, the
term "qualifying retired beneficiary" means a person who is an
eligible retiree or qualified spouse or child (as such terms
are defined in subsections (b) and (c) of section 6114).
  (c)  Threshold Payment. The term "threshold payment" means,
for an employer with respect to a health benefit plan providing
coverage to a qualifying retired beneficiary, a payment

        (1)  for coverage of any item or service described in
section 1101, and
        (2)  the amount of which is at least 20 percent of the
amount of the premium (or premium equivalent) for such coverage
with respect to the beneficiary (and dependents).
    (d)  Amount. The amount specified in this subsection is 20
percent of the weighted average premium for the regional
alliance in which the beneficiary resides and for the
applicable class of family enrollment.
  (e)  Nature of Obligation. The requirement of this section
shall be in addition to any other requirement imposed on an
employer under this Act or otherwise.

    (f)  Protection of Collective Bargaining Rights. Nothing in
this Act (including this section) shall be construed as
affecting collective bargaining rights or rights under
collective bargaining agreements.

            Section 1609   ENFORCEMENT.
  In the case of a person that violates a requirement of this
subtitle, the Secretary of Labor may impose a civil money
penalty, in an amount not to exceed $10,000, for each violation
with respect to each individual.

Subtitle J    General Definitions; Miscellaneous Provisions

    Part 1   GENERAL DEFINITIONS
            Section 1901   DEFINITIONS RELATING TO EMPLOYMENT
AND INCOME.
  (a)  In General. Except as otherwise specifically provided,
in this Act the following definitions and rules apply:

        (1)  Employer, employee, employment, and wages defined.
Except as provided in this section

            (A)  the terms "wages" and "employment" have the
meanings given such terms under section 3121 of the Internal
Revenue Code of 1986,

            (B)  the term "employee" has the meaning given such
term under section 3121 of such Code, subject to the provisions
of chapter 25 of such Code, and

            (C)  the term "employer" has the same meaning as
the term "employer" as used in such section 3121.

        (2)  Exceptions. For purposes of paragraph (1)

            (A)  Employment.

    (i)  Employment included. Paragraphs (1), (2), (5), (7)
(other than clauses (i) through (iv) of subparagraph (C) and
clauses (i) through (v) of subparagraph (F)), (8), (9), (10),
(11), (13), (15), (18), and (19) of section 3121(b) of the
Internal Revenue Code of 1986 shall not apply.

    (ii)  Exclusion of inmates as employees. Employment shall
not include services performed in a penal institution by an
inmate thereof or in a hospital or other health care
institution by a patient thereof.

            (B)  Wages.

   (i)  In general. Paragraph (1) of section 3121(a) of the
Internal Revenue Code of 1986 shall not apply.

  (ii)  Tips not included. The term "wages" does not include
cash tips.

            (C)  Exclusion of employees outside the united
states. The term "employee" does not include an individual who
does not reside in the United States.

            (D)  Exclusion of foreign employment. The term
"employee" does not include an individual

   (i)  with respect to service, if the individual is not a
citizen or resident of the United States and the service is
performed outside the United States, or

    (ii)  with respect to service, if the individual is a
citizen or resident of the United States and the service is
performed outside the United States for an employer other than
an American employer (as defined in section 3121(h) of the
Internal Revenue Code of 1986).

        (3)  Aggregation rules for employers.For purposes of
this Act

            (A)  all employers treated as a single employer
under
subsection (a) or (b) of section 52 of the Internal Revenue
Code of 1986 shall be treated as a single employer, and

            (B)  under regulations of the Secretary of Labor,
all employees of organizations which are under common control
with one or more organizations which are exempt from income tax
under subtitle A of the Internal Revenue Code of 1986 shall be
treated as employed by a single employer. The regulations
prescribed under subparagraph (B) shall be based on principles
similar to the principles which apply to taxable organizations
under subparagraph (A).

        (4)  Employer premium. The term "employer premium"
refers to the premium established and imposed under part 2 of
subtitle B of title VI.

    (b)  Qualifying Employee; Full-Time Employment.

        (1)  Qualifying employee.

            (A)  In general. In this Act, the term "qualifying
employee" means, with respect to an employer for a month, an
employee (other than a covered child, as defined in
subparagraph (C)) who is employed by the employer for at least
40 hours (as determined under paragraph (3)) in the month.

            (B)  No special treatment of medicare
beneficiaries, ssi recipients, afdc recipients, and
others.Subparagraph (A) shall apply regardless of whether or
not the employee is a medicare-eligible individual, an SSI
recipient, an AFDC recipient, an individual described in
section 1004(b), an eligible individual or is authorized to be
so employed.

            (C)  Covered child defined. In subparagraph (A),
the term "covered child" means an eligible individual who is a
child and is enrolled under a health plan as a family member
described in section 1011(b)(2)(B).

        (2)  Full-time equivalent employees; part-time
employees.

            (A)  In general. For purposes of this Act, a
qualifying employee who is employed by an employer

    (i)  for at least 120 hours in a month, is counted as 1
fulltime equivalent employee for the month and shall be deemed
to be employed on a full-time basis, or

  (ii)  for at least 40 hours, but less than 120 hours, in a
month, is counted as a fraction of a full-time equivalent
employee in the month equal to the full-time employment ratio
(as defined in subparagraph (B)) for the employee and shall be
deemed to be employed on a part-time basis.

            (B)  Full-time employment ratio defined. For
purposes of this Act, the term "full-time employment ratio"
means, with respect to a qualifying employee of an employer in
a month, the lesser of 1 or the ratio of

    (i)  the number of hours of employment such employee is
employed by such employer for the month (as determined under
paragraph (3)), to

    (ii)  120 hours.

            (C)  Full-time employee. For purposes of this Act,
the term "full-time employee" means, with respect to an
employer,
an employee who is employed on a full-time basis (as specified
in subparagraph (A)) by the employer.

            (D)  Consideration of industry practice. As
provided under rules established by the Board, an employee who
is not described in subparagraph (C) shall be considered to be
employed on a full-time basis by an employer (and to be a full-
time employee of an employer) for a month (or for all months in
a 12month period) if the employee is employed by that employer
on a continuing basis that, taking into account the structure
or nature of the employment in the industry, represents full
time employment.

        (3)  Hours of employment.

            (A)  In general. For purposes of this Act, the
Board shall specify the method for computing hours of
employment for employees of an employer consistent with this
paragraph. The Board shall take into account rules used for
purposes of applying the Fair Labor Standards Act.

            (B)  Hourly wage earners. In the case of an
individual who receives compensation (in the form of hourly
wages or compensation) for the performance of services, the
individual is considered to be "employed" by an employer for an
hour if compensation is payable with respect to that hour of
employment, without regard to whether or not the employee is
actually performing services during such hours.

        (4)  Treatment of salaried employees and employees paid
on contingent or bonus arrangements. In the case of an employee
who receives compensation on a salaried basis or on the basis
of a commission (or other contingent or bonus basis), rather
than an hourly wage, the Board shall establish rules for the
conversion of the compensation to hours of employment, taking
into account the minimum monthly compensation levels for
workers employed on a full-time basis under the Fair Labor
Standards Act and other factors the Board considers relevant.

   (c)  Definitions Relating to Self-Employment.In this Act:

        (1)  Net earnings from self-employment. The term "net
earnings from self-employment" has the meaning given such term
under section 1402(a) of the Internal Revenue Code of 1986.

        (2)  Self-employed individual. The term "self-employed
individual" means, for a year, an individual who has net
earnings from self-employment for the year.

           Section 1902   OTHER GENERAL DEFINITIONS.

  Except as otherwise specifically provided, in this Act the
following apply:

        (1)  Alien permanently residing in the united states
under color of law. The term "alien permanently residing in the
United States under color of law" means an alien lawfully
admitted for permanent residence (within the meaning of section
101(a)(20) of the Immigration and Nationality Act), and
includes any of the following:

            (A)  An alien who is admitted as a refugee under
section 207 of the Immigration and Nationality Act.

            (B)  An alien who is granted asylum under section
208 of such Act.

            (C)  An alien whose deportation is withheld under
section 243(h) of such Act.
            (D)  An alien who is admitted for temporary
residence under section 210, 210A, or 245A of such Act.
            (E)  An alien who has been paroled into the United
States under section 212(d)(5) of such Act for an indefinite
period or who has been granted extended voluntary departure as
a member of a nationality group.
            (F)  An alien who is the spouse or unmarried child
under 21 years of age of a citizen of the United States, or the
parent of such a citizen if the citizen is over 21 years of
age, and with respect to whom an application for adjustment to
lawful permanent residence is pending.
            (G)  An alien within such other classification of
permanent resident aliens as the National Health Board may
establish by regulation.
        (2)  AFDC family.The term "AFDC family" means a family
composed entirely of one or more AFDC recipients.
        (3)  AFDC recipient. The term "AFDC recipient" means,
for a month, an individual who is receiving aid or assistance
under any plan of the State approved under title I, X, XIV, or
XVI, or part A or part E of title IV, of the Social Security
Act for the month.
        (4)  Alliance area. The term "alliance area" means the
area served by a regional alliance and specified under section
1202(b).
        (5)  Alliance eligible individual. The term "alliance
eligible individual" means, with respect to a health alliance,
an eligible individual with respect to whom the applicable
health plan is a health plan offered by or through such
alliance and does not include a prisoner.
        (6)  Applicable health plan. The term "applicable
health plan" means, with respect to an eligible individual, the
health plan specified pursuant to section 1004 and part 2 of
subtitle A.
        (7)  Combination cost sharing plan. The term
"combination cost sharing plan" means a health plan that
provides combination cost sharing schedule (consistent with
section 1134).
        (8)  Comprehensive benefit package. The term
"comprehensive benefit package" means the package of health
benefits provided under subtitle B.
        (9)  Consumer price index; cpi. The terms consumer
price index" and "CPI" mean the Consumer Price Index for all
urban consumers (U.S. city average), as published by the Bureau
of Labor Statistics.
        (10)  Corporate alliance eligible individual. The term
"corporate alliance eligible individual" means, with respect to
a corporate alliance, an eligible individual with respect to
whom the corporate alliance is the applicable health plan.
        (11)  Corporate alliance employer. The term "corporate
alliance employer" means, with respect to a corporate alliance,
an employer of an individual who is a participant in a
corporate
alliance health plan of that alliance.
        (12)  Corporate alliance health plan. The term
"corporate alliance health plan" means a health plan offered by
a corporate alliance/.
        (13)  Disabled ssi recipient. The term "disabled SSI
recipient" means an individual who
            (A)  is an SSI recipient, and
            (B)  has been determined to be disabled for
purposes of the supplemental security income program (under
title XVI of the Social Security Act).
        (14)  Eligible enrollee. The term "eligible enrollee"
means, with respect to an health plan offered by a health
alliance, an alliance eligible individual, but does not include
such an individual if the individual is enrolled under such a
plan as the family member of another alliance eligible
individual.
        (15)  Essential community provider. The term "essential
community provider" means an entity certified as such a
provider under subpart B of part 2 of subtitle F.
        (16)  Fee-for-service plan. The term "fee-for-service
plan" means a health plan described in section 1322(b)(2)(A).
      (17)  First year. The term "first year" means, with
respect to

            (A)  a State that is a participating State in a
year before 1998, the year in which the State first is a
participating State, or

            (B)  any other State, 1998.

        (18)  Higher cost sharing plan. The term "higher cost
sharing plan" means a health plan that provides a higher cost
sharing schedule (consistent with section 1133).

        (19)  Long-term nonimmigrant. The term "long-term
nonimmigrant" means a nonimmigrant described in subparagraph
(E), (H), (I), (J), (K), (L), (M), (N), (O), (Q), or (R) of
section 101(a)(15) of the Immigration and Nationality Act or an
alien within such other classification of nonimmigrant as the
National Health Board may establish by regulation.

      (20)  Lower cost sharing plan. The term "lower cost
sharing plan" means a health plan that provides a lower cost
sharing schedule (consistent with section 1132).

        (21)  Medicare program. The term "medicare program"
means the health insurance program under title XVIII of the
Social Security Act.

        (22)  Medicare-eligible individual. The term "medicare
eligible individual" means, subject to section 1012(a), an
individual who is entitled to benefits under part A of the
medicare program.

        (23)  Move. The term "move" means, respect to an
individual, a change of residence of the individual from one
alliance area to another alliance area.

        (24)  National health board; board. The terms "National
Health Board" and "Board" mean the National Health Board
created under section 1501.
        (25)  Poverty level.
            (A)  In general. The term "applicable poverty
level" means, for a family for a year, the official poverty
line (as defined by the Office of Management and Budget, and
revised annually in accordance with section 673(2) of the
Omnibus Budget Reconciliation Act of 1981) applicable to a
family of the size involved (as determined under subparagraph
(B)) for 1994 adjusted by the percentage increase or decrease
described in subparagraph (C) for the year involved.
            (B)  Family size. In applying the applicable
poverty level to
  (i)  an individual enrollment, the family size is deemed to
be one person;

    (ii)  a couple-only enrollment, the family size is deemed
to be two persons;

    (iii)  a single parent enrollment, the family size is
deemed to be three persons; or

    (iv)  a dual parent enrollment, the family size is deemed
to be four persons.

            (C)  Percentage adjustment. The percentage increase
or decrease described in this subparagraph for a year is the
percentage increase or decrease by which the average CPI for
the 12-month-period ending with August 31 of the preceding year
exceeds such average for the 12-month period ending with August
31, 1993.

            (D)  Rounding. Any adjustment made under
subparagraph (A) for a year shall be rounded to the nearest
multiple of $100.

        (26)  Prisoner. The term "prisoner" means, as specified
by the Board, an eligible individual during a period of
imprisonment under Federal, State, or local authority after
conviction as an adult.

        (27)  Regional alliance eligible individual. The term
"regional alliance eligible individual" means an eligible
individual with respect to whom a regional alliance health plan
is an applicable health plan.

        (28)  Regional alliance employer. The term "regional
alliance employer" means, with respect to an employee, an
employer that is not a corporate alliance employer with respect
to such employee.

        (29)  Regional alliance health plan. The term "regional
alliance health plan" means a health plan offered by a regional
alliance.

        (30)  Reside.

            (A)  An individual is considered to reside in the
location in which the individual maintains a primary residence
(as established under rules of the National Health Board).

            (B)  Under such rules and subject to section
1323(c),
in the case of an individual who maintains more than one
residence, the primary residence of the individual shall be
determined taking into account the proportion of time spent at
each residence.

            (C)  In the case of a couple only one spouse of
which is a qualifying employee, except as the Board may
provide, the residence of the employee shall be the residence
of the couple.

        (31)  Secretary. The term "Secretary" means the
Secretary of Health and Human Services.

        (32)  SSI family. The term "SSI family" means a family
composed entirely of one or more SSI recipients.

        (33)  SSI recipient. The term "SSI recipient" means,
for a month, an individual

            (A)  with respect to whom supplemental security
income benefits are being paid under title XVI of the Social
Security Act for the month,

            (B)  who is receiving a supplementary payment under
section 1616 of such Act or under section 212 of Public Law
930966 for the month, or

            (C)  who is receiving monthly benefits under
section 1619(a) of the Social Security Act (whether or not
pursuant to section 1616(c)(3) of such Act) for the month.

        (34)  State. The term "State" includes the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Northern Mariana Islands.

        (35)  State medicaid plan. The term "State medicaid
plan" means a plan of medical assistance of a State approved
under title XIX of the Social Security Act.

        (36)  Undocumented alien. The term "undocumented alien"
means an alien who is not a long-term nonimmigrant, a diplomat,
or described in section 1005(c).

        (37)  United States. The term "United States" means the
50 States, the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, and Northern Mariana Islands.

Subtitle B    Miscellaneous Provisions
            Section 1911   USE OF INTERIM, FINAL REGULATIONS.
    In order to permit the timely implementation of the
provisions of this Act, the National Health Board, the
Secretary of Health and Human Services, the Secretary of Labor
are each authorized to issue regulations under this Act on an
interim basis that become final on the date of publication,
subject to change based on subsequent public comment.
            Section 1912   SOCIAL SECURITY ACT REFERENCES.
    Except as may otherwise be provided, any reference in this
title, or in IV or VI, to a provision of the Social Security
Act shall be to that provision of the Social Security Act as in
effect on the date of the enactment of this Act.