[Congressional Bills 103th Congress] [From the U.S. Government Publishing Office] [H.R. 192 Introduced in House (IH)] 103d CONGRESS 1st Session H. R. 192 To provide for improvements to the health of farm families, and for other purposes. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES January 5, 1993 Mr. Gunderson introduced the following bill; which was referred to the Committee on Energy and Commerce _______________________________________________________________________ A BILL To provide for improvements to the health of farm families, 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. This Act may be cited as the ``Farm and Rural Medical Equity Reform Act of 1993''. TABLE OF CONTENTS Sec. 1. Short title. TITLE I--DEDUCTIBILITY OF HEALTH INSURANCE EXPENSES FOR THE SELF- EMPLOYED Sec. 101. Increase in amount of deduction for health insurance costs of self-employed individuals. TITLE II--MEDICAL SAVINGS ACCOUNTS Sec. 202. Unused amounts in flexible spending accounts transferable to medical savings accounts. Sec. 203. Deduction for amounts paid for qualified catastrophic coverage health plan. TITLE III--UNIFORM CLAIMS; ELECTRONIC CARDS; ELECTRONIC BILLS Sec. 301. Advisory council on health claim processing standardization. Sec. 302. Specification and use of uniform health claim reimbursement forms. TITLE IV--HEALTH INSURANCE PORTABILITY PROVISIONS Sec. 401. Limitation on exclusion for pre-existing conditions; assurance of continuity of coverage. Sec. 402. Limits on premium increases. Sec. 403. Definitions. Sec. 404. Excise tax for violations. TITLE V--IMPROVED ACCESS TO RURAL HEALTH SERVICES Subtitle A--Rural Emergency Medical Services Amendments Sec. 501. Establishment of office of emergency medical services. Sec. 502. State offices of emergency medical services. Sec. 503. Programs for rural areas. Sec. 504. Funding. Sec. 505. Conforming Amendments. Subtitle B--Extension of Special Treatment Rules for Medicare Dependent, Small Rural Hospitals Sec. 511. Extension of special treatment rules for Medicare dependent, small rural hospitals. Subtitle C--Outreach Grant Program Sec. 521. Establishment of program of grants for rural health outreach. TITLE I--DEDUCTIBILITY OF HEALTH INSURANCE EXPENSES FOR THE SELF- EMPLOYED SEC. 101. INCREASE IN AMOUNT OF DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-EMPLOYED INDIVIDUALS. (a) Increase in Deduction.--Paragraph (1) of section 162(l) of the Internal Revenue Code of 1986 (relating to special rules for health insurance costs of self-employed individuals) is amended by striking ``25 percent'' and inserting ``100 percent''. (b) Deduction Made Permanent.--Subsection (l) of section 162 of such Code is amended by striking paragraph (6). (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after June 30, 1992. TITLE II--MEDICAL SAVINGS ACCOUNTS SEC. 201. MEDICAL SAVINGS ACCOUNTS. (a) In General.--Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to additional itemized deductions for individuals) is amended by redesignating section 220 as section 221 and by inserting after section 219 the following new section: ``SEC. 220. MEDICAL SAVINGS ACCOUNTS. ``(a) Deduction Allowed.--In the case of an eligible individual, there shall be allowed as a deduction amounts paid in cash during the taxable year by or on behalf of such individual to a medical savings account. ``(b) Limitation.-- ``(1) In general.--The amount allowable as a deduction under subsection (a) to an individual for the taxable year shall not exceed the excess (if any) of-- ``(A) the lesser of-- ``(i) the applicable limit, or ``(ii) the compensation (as defined in section 219(f)) includible in the individual's gross income for the taxable year, over ``(B) the sum of-- ``(i) the value of employer-provided coverage for the medical expenses of such individual, ``(ii) the amount paid by the individual (other than from amounts distributed from a medical savings account) for coverage under qualified catastrophic coverage health plan for coverage for such individual, the spouse of such individual, and dependents (as defined in section 152) of such individual, plus ``(iii) the aggregate amount contributed to such account during the taxable year pursuant to section 125(d)(3). ``(2) Applicable limit.--For purposes of paragraph (1), the applicable limit is the sum of-- ``(A) $4,800, plus ``(B) $600 for each individual who is a dependent (as defined in section 152) of the individual for whose benefit the account is established. ``(c) Definitions and Special Rules.--For purposes of this section-- ``(1) Medical savings account.--The term `medical savings account' means a trust created or organized in the United States exclusively for the purpose of paying the qualified medical expenses of the individual for whose benefit the trust is established, but only if the written governing instrument creating the trust meets the following requirements: ``(A) A contribution will be accepted unless it is in cash and contributions will not be accepted for any taxable year in excess of the applicable limit )as defined in subsection (b)(2)). ``(B) The trustee is a bank (as defined in section 408(n)) or another person who demonstrates to the satisfaction of the Secretary that the manner in which such person will administer the trust will be consistent with the requirements of this section. ``(C) No part of the trust assets will be invested in life insurance contracts. ``(D) The assets of the trust will not be commingled with other property except in a common trust fund or common investment fund. ``(2) Eligible individual.--The term `eligible individual' means any individual if-- ``(A) Such individual is not covered by any employer-provided group health plan, or ``(B) such individual is covered by an employer- provided group health plan which is a qualified catastrophic coverage health plan and is not covered by any other health plan. ``(3) Qualified medical expenses.-- ``(A) In general.--The term `qualified medical expenses' means-- ``(i) medical expenses, and ``(ii) amounts paid for qualified long-term care insurance (as defined in section 818(g)). ``(B) Medical expenses.--The term `medical expenses' means amount paid by the individual for whose benefit the account was established for medical care (as defined in section 213) of such individual, the spouse of such individual, and any dependent (as defined in section 152) of such individual, but only to the extent such amounts are not compensated for by insurance of otherwise. ``(4) Qualified catastrophic coverage health plan.--The term `qualified catastrophic coverage health plan' means any health plan which is certified by the Secretary of Health and Human Services as a plan-- ``(A) which provides no compensation for medical expenses not exceeding $3,000 during any year, ``(B) which requires the individual to pay 15 percent of such individual's medical expenses to the extent they exceed $3,000 but not $9,000 during any year, and ``(C) which provides full reimbursement for medical expenses exceeding $9,000. ``(5) Time when contributions deemed made.--A taxpayer shall be deemed to have made a contribution on the last day of the preceding taxable year if the contribution is made on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (not including extensions thereof). ``(d) Tax Treatment of Distributions.-- ``(1) In general.--Except as otherwise provided in this subsection, any amount paid or distributed out of a medical savings account shall be included in the gross income of the individual for whose benefit such account was established unless such amount is used exclusively to pay the qualified medical expenses of such individual. ``(2) Excess contributions returned before due date of return.--Paragraph (1) shall not apply to the distribution of any contribution paid during a taxable year to a medical savings account to the extent that such contribution exceeds the amount allowable as a deduction under subsection (a) if-- ``(A) such distribution is received on or before the day prescribed by law (including extensions of time) for filing such individual's return for such taxable year, ``(B) no deduction is allowed under subsection (a) with respect to such excess contribution, and ``(C) such distribution is accompanied by the amount of net income attributable to such excess contribution. Any net income described in subparagraph (C) shall be included in the gross income of the individual for the taxable year in which it is received. ``(e) Tax Treatment of Accounts.-- ``(1) Exemption from tax.--A medical savings account is exempt from taxation under this subtitle unless such account has ceased to be an investment savings account by reason of paragraph (2). Notwithstanding the preceding sentence, any such account is subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable, etc. organizations). ``(2) Loss of exemption of account where individual engages in prohibited transaction.-- ``(A) In general.--If, during any taxable year of the individual for whose benefit the medical savings account was established, such individual engages in any transaction prohibited by section 4975 with respect to the account, the account ceases to be a medical savings account as of the first day of that taxable year. ``(B) Account treated as distributing all its assets.--In any case in which any account ceases to be a medical savings account by reason of subparagraph (A) on the first day of any taxable year, paragraph (1) of subsection (d) applies as if there were a distribution on such first day in an amount equal to the fair market value (on such first day) of all assets in the account (on such first day). ``(3) Effect of pledging account as security.--If, during any taxable year, the individual for whose benefit a medical savings account was established uses the account or any portion thereof as security for a loan, the portion so used is treated as distributed to that individual. ``(f) Additional Tax on Certain Amounts Included in Gross Income.-- ``(1) Distribution not used for qualified medical expenses.--If a distribution from a medical savings account is made, and not used to pay the qualified medical expenses of the individual for whose benefit the account was established, the tax liability of such individual for the taxable year in which such distribution is received shall be increased by an amount equal to 10 percent of the amount of the distribution which is includible in gross income for such taxable year. ``(2) Disqualification cases.--If an amount is includible in the gross income of an individual for a taxable year under subsection (e), his tax under this chapter for such taxable year shall be increased by an amount equal to 10 percent of such amount includible in his gross income. ``(3) Disability or death cases.--Paragraphs (1) and (2) do not apply if the payment or distribution is made after the individual for whose benefit the medical savings account was established becomes disabled within the meaning of section 72(m)(7) or dies. ``(g) Special Rules.-- ``(1) Community property laws.--This section shall be applied without regard to any community property laws. ``(2) Custodial accounts.--For purposes of this section, a custodial account shall be treated as a trust if-- ``(A) the assets of such account are held by a bank (as defined in section 408(n)) or another person who demonstrates to the satisfaction of the Secretary that the manner in which he will administer the account will be consistent with the requirements of this section, and ``(B) the custodial account would, except for the fact that it is not a trust, constitute a medical savings account described in subsection (c). For purposes of this title, in the case of a custodial account treated as a trust by reason of the preceding sentence, the custodian of such account shall be treated as the trustee thereof. ``(3) Denial of deductions.--No amount paid or distributed from a medical savings account shall be taken into account in determining the deduction provided by section 213. ``(h) Inflation Adjustment.-- ``(1) In general.--In the case of any taxable year beginning in a calendar year after 1994, each applicable dollar amount shall be increased by an amount equal to-- ``(A) such dollar amount, multiplied by ``(B) the cost-of-living adjustment for the calendar year in which the taxable year begins. ``(2) Cost-of-living adjustment.--For purposes of paragraph (1), the cost-of-living adjustment for any calendar year is the percentage (if any) by which-- ``(A) the deemed average total wages (as defined in section 209(k) of the Social Security Act) for the preceding calendar year, exceeds ``(B) the deemed average total wages (as so defined) for calendar year 1993. ``(3) Applicable dollar amount.--For purposes of paragraph (1), the term `applicable dollar amount' means-- ``(A) the $4,800 and $600 amounts in subsection (b), and ``(B) the $3,000 and $9,000 amounts in subsection (c)(4). ``(4) Rounding.--If any amount as adjusted under paragraph (1) is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10 (or, if such amount is a multiple of $5 and not of $10, such amount shall be rounded to the next highest multiple of $10). ``(i) Reports.--The trustee of a medical savings account shall make such reports regarding such account to the Secretary and to the individual for whose benefit the account is maintained with respect to contributions, distributions, and such other matters as the Secretary may require under regulations. The reports required by this subsection shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required by those regulations.''. (b) Deduction Allowed in Arriving at Adjusted Gross Income.-- Paragraph (7) of section 62(a) of such Code (relating to retirement savings) is amended-- (1) by inserting ``or medical expense'' after ``Retirement'' in the heading of such paragraph, and (2) by inserting before the period at the end thereof the following: ``and the deduction allowed by section 220 (relating to deduction of certain payments to medical savings accounts)''. (c) Tax on Excess Contributions.--Section 4973 of such Code (relating to tax on excess contributions to individual retirement accounts, certain section 403(b) contracts, and certain individual retirement annuities) is amended-- (1) by inserting ``medical savings accounts,'' after ``accounts,'' in the heading of such section, (2) by redesignating paragraph (2) of subsection (a) as paragraph (3) and by inserting after paragraph (1) the following: ``(2) a medical savings account (within the meaning of section 220(c)),'', (3) by striking ``or'' at the end of paragraph (1) of subsection (a), and (4) by adding at the end thereof the following new subsection: ``(d) Excess Contributions to Medical Savings Accounts.--For purposes of this section, in the case of a medical savings account, the term `excess contributions' means the amount by which the amount contributed for the taxable year to the account exceeds the amount allowable as a deduction under section 220 for such taxable year. For purposes of this subsection, any contribution which is distributed out of the medical savings account and a distribution to which section 220(d)(2) applies shall be treated as an amount not contributed.''. (d) Tax on Prohibited Transactions.--Section 4975 of such Code (relating to prohibited transactions) is amended-- (1) by adding at the end of subsection (c) the following new paragraph: ``(4) Special rule for medical savings accounts.--An individual for whose benefit a medical savings account is established shall be exempt from the tax imposed by this section with respect to any transaction concerning such account (which would otherwise be taxable under this section) if, with respect to such transaction, the account ceases to be a medical savings account by reason of the application of section 220(e)(2)(A) to such account.'', and (2) by inserting ``or a medical savings account described in section 220(c)'' in subsection (e)(1) after ``described in section 408(a)''. (e) Failure To Provide Reports on Medical Savings Accounts.-- Section 6693 of such Code (relating to failure to provide reports on individual retirement account or annuities) is amended-- (1) by inserting ``or on medical savings accounts'' after ``annuities'' in the heading of such section, and (2) by adding at the end of subsection (a) the following: ``The person required by section 220(i) to file a report regarding a medical savings account at the time and in the manner required by such section shall pay a penalty of $50 for each failure unless it is shown that such failure is due to reasonable cause.'' (f) Clerical Amendments.-- (1) The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by striking the item relating to section 220 and inserting the following: ``Sec. 220. Medical savings accounts. ``Sec. 221. Cross reference.''. (2) The table of sections for chapter 43 of such Code is amended by striking the item relating to section 4973 and inserting the following: ``Sec. 4973. Tax on excess contributions to individual retirement accounts, medical savings accounts, certain 403(b) contracts, and certain individual retirement annuities.''. (3) The table of sections for subchapter B of chapter 68 of such Code is amended by inserting ``or on medical savings accounts'' after ``annuities'' in the item relating to section 6693. (g) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 1993. SEC. 202. UNUSED AMOUNTS IN FLEXIBLE SPENDING ACCOUNTS TRANSFERABLE TO MEDICAL SAVINGS ACCOUNTS. (a) In General.--Subsection (d) of section 125 of the Internal Revenue Code of 1986 (relating to cafeteria plans) is amended by adding at the end thereof the following new paragraph: ``(3) Unused amounts transferable to medical savings accounts.-- ``(A) In general.--Subsection (a) shall not fail to apply to a participant in a plan, and a plan shall not fail to be treated as a cafeteria plan, solely because under the plan amounts not paid out as reimbursements under a flexible spending arrangement for health and disability for the benefit of an individual are contributed to a medical savings account (as defined in section 220(c)) for the benefit of such individual. ``(B) Special rules.-- ``(i) Timing of contributions.-- Contributions made under this paragraph shall be made on the last day of the plan year of the cafeteria plan. ``(ii) Availability requirement.-- Subparagraph (A) shall apply only if the plan is available to at least 80 percent of the employees of the employer. For purposes of the preceding sentence, there shall be excluded employees who are excluded under section 414(q)(8) or who would be so excluded if `30' were substituted for `17\1/2\' in subparagraph (B) thereof.''. (b) Treatment of Amounts Received by Qualified Cash or Deferred Arrangement.-- (1) Paragraph (2) of section 401(k) of such Code is amended by striking ``and'' at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting ``, and'', and by adding at the end thereof the following new subparagraph: ``(E) which provides that, with respect to amounts held by the trust which are attributable to contributions made to the trust pursuant to section 125(d)(3)-- ``(i) an employee's right to such amounts is nonforfeitable, and ``(ii) such amounts may be used only to pay expenses (not compensated for by insurance or otherwise) for the medical care (as defined in section 213) of the employee, the spouse of the employee, or any dependent (as defined in section 152) of the employee.''. (2) Subsection (k) of section 401 of such Code is amended by adding at the end thereof the following new paragraph: ``(11) Treatment of amounts received from medical savings arrangements.--Contributions made to a trust by reason of section 125(d)(3) shall not be taken into account under paragraph (3)(A)(ii), and subsection (1) shall not apply to such contributions.''. (c) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 1993. SEC. 203. DEDUCTION FOR AMOUNTS PAID FOR QUALIFIED CATASTROPHIC COVERAGE HEALTH PLAN. (a) In General.--Section 213 of the Internal Revenue Code of 1986 (relating to medical, dental, etc., expenses) is amended adding at the end thereof the following new subsection: ``(g) Full Deduction for Amounts Paid for Qualified Catastrophic Coverage Health Plans.--In the case of amounts paid for coverage under a qualified catastrophic coverage health plan (as defined in section 220(c))-- ``(1) subsection (a) shall be applied without regard to the limitation based on adjusted gross income, and ``(2) such amounts shall not be taken into account in determining whether any other amounts are allowable as a deduction under this section.''. (b) Technical Amendment.--Paragraph (2) of section 162(l) of such Code is amended by adding at the end thereof the following new subparagraph: ``(C) Qualified catastrophic coverage.--Paragraph (1) shall not apply to any amount allowed as a deduction under section 213 for amounts paid for coverage under a qualified catastrophic coverage health plan (as defined in section 220(c)).''. (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 1993. TITLE III--UNIFORM CLAIMS; ELECTRONIC CARDS; ELECTRONIC BILLING SEC. 301. ADVISORY COUNCIL ON HEALTH CLAIM PROCESSING STANDARDIZATION. (a) Establishment.--The Secretary of Health and Human Services (in this title referred to as the ``Secretary'') shall establish an Advisory Council on Health Claim Processing Standardization (in this title referred to as the ``Council''). (b) Composition.--The Council shall consist of 15 members appointed by the Secretary and shall include individuals representative of the health care community. (c) Recommendations.--Not later than 2 years after a majority of its members are appointed, the Council shall submit to the Secretary recommendations concerning-- (1) standards for uniform health claim reimbursement forms for hospitals and physicians and the information to be contained on such forms; (2) standards for electronic cards that could be used to store a patient's insurance information and medical records; and (3) the computerization of health claim billing and the use of electronic means to transmit billing information from hospitals and physicians to insurers and the Secretary. SEC. 302. SPECIFICATION AND USE OF UNIFORM HEALTH CLAIM REIMBURSEMENT FORMS. (a) Establishment.--Taking into account the recommendations of the Council under section 301(c)(1), the Secretary shall specify a uniform health claim reimbursement form for use by hospitals and such a form for use by physicians. (b) Use.--(1) Each insurer or other entity responsible for administration of a health benefit plan shall require the use of the appropriate form specified under subsection (a) for claims for hospital services or physician services in the United States under the plan. (2) The requirement of paragraph (1) shall apply with respect to claims for reimbursement submitted under a health benefit plan more than 6 months after the date of the Secretary specifies the forms under subsection (a). (c) Health Benefit Plan Defined.--The term ``health benefit plan'' means any hospital or medical expense incurred policy or certificate, hospital or medical service plan contract, health maintenance subscriber contract, multiple employer welfare arrangement, employee benefit plan (as defined under the Employee Retirement Income Security Act of 1974) that provides benefits with respect to health care services, or the medicare or medicaid programs, but does not include-- (1) coverage only for accident, dental, vision, disability income, or long-term care insurance, or any combination thereof, (2) coverage issued as a supplement to liability insurance, (3) worker's compensation or similar insurance, or (4) automobile medical-payment insurance, or any combination thereof. TITLE IV--HEALTH INSURANCE PORTABILITY PROVISIONS SEC. 401. LIMITATION ON EXCLUSION FOR PRE-EXISTING CONDITIONS; ASSURANCE OF CONTINUITY OF COVERAGE. (a) Limitations on Treatment of Pre-Existing Conditions.--Subject to subsection (c), a carrier may not impose (or require an employer to impose through a waiting period for coverage under a group health plan or similar requirement) a limitation or exclusion of benefits under a group health plan relating to treatment of a condition based on the fact that the condition pre-existed the effectiveness of the coverage if-- (1) the condition relates to a condition that was not diagnosed or treated within 3 months before the date of coverage under the plan; (2) the limitation or exclusion extends over more than 6 months after the date of coverage under the plan; (3) the limitation or exclusion applies to an individual who, as of the date of birth, was covered under the plan or whose mother, as of such date, was covered under the plan; or (4) the limitation or exclusion relates to pregnancy. In the case of an individual who is eligible for coverage under an employer health benefit plan but for a waiting period imposed by the employer, in applying paragraphs (1) and (2), the individual shall be treated as having been covered under the plan as of the earliest date of the beginning of the waiting period. (b) Assurance of Continuity of Coverage Through Previous Satisfaction of Pre-Existing Condition Requirement.-- (1) In general.--Each carrier shall waive any period applicable to a preexisting condition for similar benefits with respect to an individual to the extent that the individual was covered for the condition under any health benefit plan that was in effect before the date of the enrollment under the carrier's plan. (2) Continuous coverage required.-- (A) In general.--Paragraph (1) shall no longer apply if there is a continuous period of more than 60 days on which the individual was not covered under a health benefit plan. (B) Treatment of waiting periods.--In applying subparagraph (A), any waiting period imposed by an employer before an employee is eligible to be covered under a policy shall be treated as a period in which the employee was covered under a health benefit plan. (3) Exclusion of cash-only and dread disease policies.--In this subsection, the term ``health benefit plan'' does not include any insurance which is offered primarily to provide-- (A) coverage for a specified disease or illness, or (B) hospital or fixed indemnity policy, unless the Secretary (or in the case of a plan in a State, the State) determines that such a policy provides sufficiently comprehensive coverage of a benefit so that it should be treated as a health benefit plan under this subsection. (c) Regulatory Authority.--The Secretary is authorized directly, or through the states, to issue such regulations as may be required to carry out this section. (d) Effective Date.-- (1) In general.--The amendments made by this section shall apply to coverage provided under a group health plan on or after the first day of the first month beginning more than 1 year after the date of the enactment of this Act. (2) Application.--In applying paragraph (1), coverage provided before the effective date shall be taken into account in applying this section. SEC. 402. LIMITS ON PREMIUM INCREASES. (a) In General.--A carrier may not provide for an increase in the premium charged a small employer for a small employer health benefit plan in a percentage that exceeds the percentage change in the premium charged under the plan for a newly covered employer within the same class of business plus 15 percentage points. (b) A carrier will only be allowed to set the maximum percent increase in renewal premiums at 5 percent plus the percent change in the base premium rate. (c) Effective Date.--Subsection (a) shall apply to premiums for plans renewed more than 1 year after the date of the enactment of this Act. SEC. 403. DEFINITIONS. In this title: (1) The term ``carrier'' means any entity which provides health insurance or health benefits in a State, and includes a licensed insurance company, a prepaid hospital or medical service plan, a health maintenance organization, the plan sponsor of a multiple employer welfare arrangement or an employee benefit plan (as defined under the Employee Retirement Income Security Act of 1974), or any other entity providing a plan of health insurance subject to State insurance regulation. (2) The term ``employer health benefit plan'' means a health benefit plan (including an employee welfare benefit plan, as defined in section 3(1) of the Employee Retirement Income Security Act of 1974) which is offered to employees through an employer and for which the employer provides for any contribution to such plan or any premium for such plan are deducted by the employer from compensation to the employee. (3) The term ``full-time employee'' means, with respect to an employer, an individual who normally is employed for at least thirty hours per week by the employer. (4) The term ``small employer'' means an entity actively engaged in business which, on at least 50 percent of its working days during the preceding year, employed at least two, but no more than one hundred, full-time employees. For purposes of determining if an employer is a small employer, rules similar to the rules of subsection (b) and (c) of section 414 of the Internal Revenue Code of 1986 shall apply. (5) The term ``small employer carrier'' means a carrier with respect to the issuance of a small employer health benefit plan. (6) The term ``small employer health benefit plan'' means an employer health benefit plan which provides coverage to one or more full-time employees of a small employer. (7) The term ``base premium rate'' means the lowest premium that the insurer may charge for a group with similar demographic characteristics, excluding factors related to health status, claims history, or duration of coverage. (8) The term ``State'' means the 50 States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, and American Samoa. SEC. 404. EXCISE TAX FOR VIOLATIONS. (a) In General.--Chapter 47 of the Internal Revenue Code of 1986 (relating to taxes on group health plans) is amended by adding at the end thereof the following new section: ``SEC. 5000A. FAILURE TO SATISFY CERTAIN STANDARDS FOR HEALTH INSURANCE. ``(a) General Rule.-- ``(1) Tax for portability violations.--There is hereby imposed a tax on a carrier for violating a requirement of section 401 of the Farm and Rural Equity Reform Act of 1993, and ``(2) Tax for excessive premium increase.--There is hereby imposed a tax on a carrier providing for a premium increase in violation of section 402 of the Farm and Rural Medical Equity Reform Act of 1993. ``(3) Determination of violations.--The Secretary of Health and Human Services shall determine whether any carrier meets the requirements of such sections. ``(b) Amount of Tax.-- ``(1) In general.--The amount of tax imposed by subsection (a) by reason of 1 or more violations during a taxable year shall be equal to 25 percent of the gross premiums received during such taxable year with respect to the employer health benefit plan with respect to which the violation occurred. ``(2) Gross premiums.--For purposes of paragraph (1), gross premiums shall include any consideration received with respect to any health benefit plan. ``(3) Controlled groups.--For purposes of paragraph (1)-- ``(A) Controlled group of corporations.--All corporations which are members of the same controlled group of corporations shall be treated as 1 person. For purposes of the preceding sentence, the term `controlled group of corporations' has the meaning given to such term by section 1563(a), except that-- ``(i) `more than 50 percent' shall be substituted for `at least 80 percent' each place it appears in section 1563(a)(1), and ``(ii) the determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of section 1563. ``(B) Partnerships, proprietorships, etc., which are under common control.--Under regulations prescribed by the Secretary, all trades or business (whether or not incorporated) which are under common control shall be treated as 1 person. The regulations prescribed under this subparagraph shall be based on principles similar to the principles which apply in the case of subparagraph (A). ``(c) Limitation on Tax.-- ``(1) Tax not to apply where failure not discovered exercising reasonable diligence.--No tax shall be imposed by subsection (a) with respect to any failure for which it is established to the satisfaction of the Secretary that the person on whom the tax is imposed did not know, and exercising reasonable diligence would not have known, that such failure existed. ``(2) 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 beginning on the 1st date any of the persons on whom the tax is imposed knew, or exercising reasonable diligence would have known, that such failure existed. ``(3) 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. ``(d) Carrier; Employer Health Benefit Plan Defined.--For purposes of this section, the terms `carrier' and `employer health benefit plan' have the meanings given such terms in section 403 of the Farm and Rural Medical Equity Reform Act of 1993.''. (b) Nondeductibility of Tax.--Paragraph (6) of section 275(a) of such Code (relating to nondeductibility of certain taxes) is amended by inserting ``47,'' after ``46,''. (c) Clerical Amendments.--The table of sections for such chapter 47 is amended by adding at the end thereof the following new item: ``Sec. 5000A. Failure to satisfy certain standards for health insurance.''. (d) Effective Dates.-- (1) In general.--The amendments made by subsections (a) and (c) shall take effect on the date of the enactment of this Act. (2) Nondeductibility of tax.--The amendment made by section 503(b) shall apply to taxable years beginning after December 31, 1993. TITLE V--IMPROVED ACCESS TO RURAL HEALTH SERVICES Subtitle A--Rural Emergency Medical Services Amendments SEC. 501. ESTABLISHMENT OF OFFICE OF EMERGENCY MEDICAL SERVICES. Title XII of the Public Health Service Act (42 U.S.C. 300d et seq.) is amended-- (1) in the heading for the title, by striking ``TRAUMA CARE'' and inserting ``EMERGENCY MEDICAL SERVICES''; (2) in the heading for part A, by striking ``General'' and all that follows and inserting ``General Authorities and Duties''; and (3) by amending section 1201 to read as follows: ``SEC. 1201. ESTABLISHMENT OF OFFICE OF EMERGENCY MEDICAL SERVICES. ``(a) In General.--The Secretary shall establish an office to be known as the Office of Emergency Medical Services, which shall be headed by a director appointed by the Secretary. The Secretary shall carry out this title acting through the Director of such Office. ``(b) General Authorities and Duties.--With respect to emergency medical services (including trauma care), the Secretary shall-- ``(1) conduct and support research, training, evaluations, and demonstration projects; ``(2) foster the development of appropriate, modern systems of such services through the sharing of information among agencies and individuals involved in the study and provision of such services; ``(3) sponsor workshops and conferences; ``(4) as appropriate, disseminate to public and private entities information obtained in carrying out paragraphs (1) through (4); ``(5) provide technical assistance to State and local agencies; ``(6) coordinate activities of the Department of Health and Human Services; and ``(7) as appropriate, coordinate activities of such Department with activities of other Federal agencies. ``(c) Certain Requirements.--With respect to emergency medical services (including trauma care), the Secretary shall ensure that activities under subsection (b) are carried out regarding-- ``(1) maintaining an adequate number of health professionals with expertise in the provision of the services, including hospital-based professional and prehospital-based professionals; ``(2) developing, periodically reviewing, and revising as appropriate, in collaboration with appropriate public and private entities, guidelines for the provision of such services (including, for various typical circumstances, guidelines on the number and variety of professionals, on equipment, and on training); ``(3) the appropriate use of available technologies, including communications technologies; and ``(4) the unique needs of underserved inner-city areas and underserved rural areas. ``(d) Grants, Cooperative Agreements, and Contracts.--In carrying out subsections (b) and (c), the Secretary may make grants and enter into cooperative agreements and contracts. ``(e) Definitions.--For purposes of this part: ``(1) The term `hospital-based professional' means a health professional (including an allied health professional) who has expertise in providing one or more emergency medical services and who normally provides the services at a medical facility. ``(2) The term `prehospital-based professional' means a health professional (including an allied health professional) who has expertise in providing one or more emergency medical services and who normally provides the services at the site of the medical emergency or during transport to a medical facility.''. SEC. 502. STATE OFFICES OF EMERGENCY MEDICAL SERVICES. (a) Technical Amendments to Facilitate Establishment of Program.-- (1) In general.--Title XII of the Public Health Service Act (42 U.S.C. 300d et seq.) is amended-- (A) by redesignating section 1232 as section 1235; (B) by redesignating sections 1231 and 1233 as sections 1241 and 1242, respectively; and (C) by redesignating sections 1211 through 1222 as sections 1221 through 1232, respectively. (2) Modifications in format of title xii.--Title XII of the Public Health Service Act, as amended by paragraph (1) of this subsection, is amended-- (A) by striking ``Part B'' and all that follow through ``State Plans'' and inserting the following: ``Subpart II--Formula Grants With Respect to Modifications of State Plans''; (B) by striking ``Part C--General Provisions'' and inserting the following: ``Subpart III--General Provisions''; (C) be redesignating sections 1202 and 1203 as sections 1211 and 1212, respectively; and (D) by inserting before section 1211 (as so redesignated) the following: ``Part B--Trauma Care ``Subpart I--Advisory Council; Clearinghouse''. (b) State Offices.--Title XII of the Public Health Service Act, as amended by subsection (a) of this section, is amended by inserting after section 1201 the following new section: ``SEC. 1202. STATE OFFICES OF EMERGENCY MEDICAL SERVICES. ``(a) Program of Grants.--The Secretary may make grants to States for the purpose of improving the availability and quality of emergency medical services through the operation of State offices of emergency medical services. ``(b) Requirement of Matching Funds.-- ``(1) In general.--The Secretary may not make a grant under subsection (a) unless the State involved agrees, with respect to the costs to be incurred by the State in carrying out the purpose described in such subsection, to provide non-Federal contributions toward such costs in an amount that-- ``(A) for the first fiscal year of payments under the grant, is not less than $1 for each $3 of Federal funds provided in the grant; ``(B) for any second fiscal year of such payments, is not less than $1 for each $1 of Federal funds provided in the grant; and ``(C) for any third fiscal year of such payments, is not less than $3 for each $1 of Federal funds provided in the grant. ``(2) Determination of amount of non-federal contribution.-- ``(A) Subject to subparagraph (B), non-Federal contributions required in paragraph (1) may be in cash or in kind, fairly evaluated, including plant, equipment, or services. Amounts provided by the Federal Government, or services assisted or subsidized to any significant extent by the Federal Government, may not be included in determining the amount of such non- Federal contributions. ``(B) The Secretary may not make a grant under subsection (a) unless the State involved agrees that-- ``(i) for the first fiscal year of payments under the grant, 100 percent or less of the non-Federal contributions required in paragraph (1) will be provided in the form of in-kind contributions; ``(ii) for any second fiscal year of such payments, not more than 50 percent of such non- Federal contributions will be provided in the form of in-kind contributions; and ``(iii) for any third fiscal year of such payments, such non-Federal contributions will be provided solely in the form of cash. ``(c) Certain Required Activities.--The Secretary may not make a grant under subsection (a) unless the State involved agrees that activities carried out by an office operated pursuant to such subsection will include-- ``(1) coordinating the activities carried out in the State that relate to emergency medical services; ``(2) activities regarding the matters described in paragraphs (1) through (4) section 1201(b); ``(3) identifying Federal and State programs regarding emergency medical services and providing technical assistance to public and nonprofit private entities regarding participation in such programs. ``(d) Requirement Regarding Annual Budget for Office.--The Secretary may not make a grant under subsection (a) unless the State involved agrees that, for any fiscal year for which the State receives such a grant, the office operated pursuant to subsection (a) will be provided with an annual budget of not less than $50,000. ``(e) Certain Uses of Funds.-- ``(1) Restrictions.--The Secretary may not make a grant under subsection (a) unless the State involved agrees that-- ``(A) if research with respect to emergency medical services is conducted pursuant to the grant, not more than 10 percent of the grant will be expended for such research; and ``(B) the grant will not be expended to provide emergency medical services (including providing cash payments regarding such services). ``(2) Establishment of office.--Activities for which a State may expend a grant under subsection (a) include paying the costs of establishing an office of emergency medical services for purposes of such subsection. ``(f) Reports.--The Secretary may not make a grant under subsection (a) unless the State involved agrees to submit to the Secretary reports containing such information as the Secretary may require regarding activities carried out under this section by the State. ``(g) Requirement of Application.--The Secretary may not make a grant under subsection (a) unless an application for the grant is submitted to the Secretary and the application is in such form, is made in such manner, and contains such agreements, assurances, and information as the Secretary determines to be necessary to carry out this section.''. SEC. 503. PROGRAMS FOR RURAL AREAS. (a) In General.--Title XII of the Public Health Service Act, as amended by section 502 of this Act, is amended-- (1) by transferring section 1204 to part A; (2) by redesignating such section as section 1203; (3) by inserting such section after section 1202; and (4) in section 1203 (as so redesignated)-- (A) by redesignating subsection (c) as subsection (d); and (B) by inserting after subsection (b) the following new subsection: ``(c) Demonstration Program Regarding Telecommunications.-- ``(1) Linkages for rural facilities.--Projects under subsection (a)(1) shall include demonstration projects to establish telecommunications between rural medical facilities and medical facilities that have expertise or equipment that can be utilized by the rural facilities through the telecommunications. ``(2) Modes of communication.--The Secretary shall ensure that the telecommunications technologies demonstrated under paragraph (1) include (interactive) video telecommunications (static video imaging transmitted through the telephone system), and facsimiles transmitted through such system.''. (b) Conforming Amendment.--Section 1203 of the Public Health Service Act, as redesignated by subsection (a)(2) of this section, is amended in the heading for the section by striking ``establishment'' and all that follows and inserting ``programs for rural areas.''. SEC. 504. FUNDING. Title XII of the Public Health Service Act, as amended by the preceding provisions of this subtitle, is amended-- (1) by inserting after subpart III of part B the following: ``Part C--Funding''; (2) by transferring section 1235 to part C (as so added); and (3) in such section, by striking subsections (a) and (b) and inserting the following: ``(a) Emergency Medical Services Generally.-- ``(1) In general.--For the purpose of carrying out section 1201 other than with respect to trauma care, there are authorized to be appropriated $2,000,000 for fiscal year 1994, and such sums as may be necessary for each of the fiscal years 1995 and 1996. ``(2) State offices.--For the purpose of carrying out section 1202, there are authorized to be appropriated $3,000,000 for fiscal year 1994, and such sums as may be necessary for each of the fiscal years 1995 and 1996. ``(3) Certain telecommunications demonstrations.--For the purpose of carrying out section 1203(c), there are authorized to be appropriated $10,000,000 for fiscal year 1994, and such sums as may be necessary for each of the fiscal years 1995 and 1996. ``(b) Trauma Care and Certain Other Activities.-- ``(1) In general.--For the purpose of carrying out part B, section 1201 with respect to trauma care, and section 1203 (other than subsection (c) of such section), there are authorized to be appropriated $60,000,000 for fiscal year 1994, and such sums as may be necessary for each of the fiscal years 1995 and 1996. ``(2) Allocation of funds by secretary.-- ``(A) For the purpose of carrying out subpart I of part B, section 1201 with respect to trauma care, and section 1203 (other than subsection (c) of such section), the Secretary shall make available 10 percent of the amounts appropriated for a fiscal year under paragraph (1). ``(B) For the purpose of carrying out section 1203 (other than subsection (c) of such section), the Secretary shall make available 10 percent of the amounts appropriated for a fiscal year under paragraph (1). ``(C)(i) For the purpose of making allotments under section 1221(a), the Secretary shall, subject to subsection (c), make available 80 percent of the amounts appropriated for a fiscal year under paragraph (1). ``(ii) Amounts paid to a State under section 1221(a) for a fiscal year shall, for the purposes for which the amounts were paid, remain available for obligation until the end of the fiscal year immediately following the fiscal year for which the amounts were paid.''. SEC. 505. CONFORMING AMENDMENTS. Title XII of the Public Health Service Act, as amended by the preceding provisions of this subtitle, is amended-- (1) in section 1203(b), by striking ``1214(c)(1)'' and inserting ``1224(c)(1)''; (2) in section 1211(b)(3), by striking ``1213(c)'' and inserting ``1223(c)''; (3) in section 1221-- (A) in subsection (a)-- (i) by striking ``1218'' and inserting ``1228''; and (ii) by striking ``1217'' and inserting ``1227''; and (B) in subsection (b)-- (i) by striking ``1233'' and inserting ``1242''; and (ii) by striking ``1213'' and inserting ``1223''; (4) in section 1222-- (A) in subsection (a)-- (i) in paragraph (1), by striking ``1211(a)'' and inserting ``1221(a)''; and (ii) in paragraph (2)(A), by striking ``1211(c)'' and inserting ``1221(c)''; and (B) in subsection (b), by striking ``1211(a)'' and inserting ``1221(a)''; (5) in section 1223-- (A) in subsection (a), by striking ``1211(b)'' and inserting ``1221(b)''; (B) in subsection (b)-- (i) in paragraph (1), by striking ``1211(a)'' and inserting ``1221(a)''; and (ii) in paragraph (3), by striking ``1211(a)'' and inserting ``1221(a)''; and (C) in subsection (d), by striking ``1211(a)'' and inserting ``1221(a)''; (6) in section 1224-- (A) in each of subsections (a) through (c), by striking ``1211(a)'' and inserting ``1221(a)''; and (B) in subsection (b), by striking ``1213(a)(7)'' and inserting ``1223(a)(7)''; (7) in section 1225-- (A) in subsection (a)-- (i) by striking ``1211(a)'' and inserting ``1221(a)''; and (ii) by striking ``1233'' and inserting ``1242''; and (B) in subsection (b), by striking ``1211(b)'' and inserting ``1221(b)''; (8) in section 1226, in each of subsections (a) through (c), by striking ``1211(a)'' and inserting ``1221(a)''; (9) in section 1227-- (A) by striking ``1211(a)'' and inserting ``1221(a)''; and (B) by striking ``1214'' and inserting ``1224''; (10) in section 1228-- (A) in each of subsections (a) through (c), by striking ``1211(a)'' each place such term appears and inserting ``1221(a)''; (B) in subsection (b), in each of paragraphs (2)(A) and (3)(A), by striking ``1232(a)'' and inserting ``1235(a)''; and (C) in subsection (c)(2)-- (i) by striking ``1232(b)(3)'' and inserting ``1235(b)(3)''; and (ii) by striking ``1217'' and inserting ``1227''; (11) in section 1229(a), by striking ``1211(a)'' each place such term appears and inserting ``1221(a)''; (12) in section 1230(a), by striking ``1211(a)'' each place such term appears and inserting ``1221(a)''; (13) in section 1231-- (A) in each of subsections (a) and (b), by striking ``1211(a)'' each place such term appears and inserting ``1221(a)''; and (B) in each of subsections (a) and (b), by striking ``1211(b)'' and inserting ``1221(b)''; (14) in section 1232, by striking ``1211'' and inserting ``1221''; (15) in section 1241-- (A) in the matter preceding paragraph (1), by striking ``this title'' and inserting ``this part''; and (B) in paragraph (1), by striking ``1213'' and inserting ``1223''; (16) in section 1242-- (A) in each of subsections (a) and (b), by striking ``1211'' each place such term appears and inserting ``1221''; (B) in subsection (b)-- (i) by striking ``part B'' and inserting ``subpart II''; and (ii) by striking ``1214(c)(1)'' and inserting ``1224(c)(1)''; and (C) in subsection (c), by striking ``1213'' and inserting ``1223''; and (17) in section 1251(c)(1)-- (A) by striking ``1211(a)'' and inserting ``1221(a)''; (B) by striking ``1218(a)(2)'' and inserting ``1228(a)(2)''; and (C) by striking ``part B'' and inserting ``subpart II''. Subtitle B--Extension of Special Treatment Rules for Medicare- Dependent, Small Rural Hospitals SEC. 511. EXTENSION OF SPECIAL TREATMENT RULES FOR MEDICARE-DEPENDENT, SMALL RURAL HOSPITALS. (a) In General.-- (1) Determination of payment amount.--Section 1886(b)(3)(D) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is amended by striking ``March 31, 1993,'' and inserting ``March 31, 1994,''. (2) Eligibility for designation.--Section 1886(d)(5)(G)(i) of such Act (42 U.S.C. 1395ww(d)(5)(G)(i)) is amended by striking ``March 31, 1993,'' and inserting ``March 31, 1994,''. (b) Effective Date.--The amendments made by subsection (a) shall take effect as if included in the enactment of section 6003(f) of the Omnibus Budget Reconciliation Act of 1989. Subtitle C--Outreach Grants Program SEC. 521. ESTABLISHMENT OF PROGRAM OF GRANTS FOR RURAL HEALTH OUTREACH. Title III of the Public Health Service Act (42 U.S.C. 241 et seq.) is amended by adding at the end the following part: ``Part O--Rural Health Outreach Program. ``SEC. 399J. RURAL HEALTH OUTREACH GRANT PROGRAM. ``(a) In General.--The Secretary may make grants to demonstrate new and innovative models of outreach and health care services delivery in rural areas that lack basic health services. Grants will be awarded for one of the following: direct provision of health services to rural populations (especially for those who are not currently receiving those services), or to enhance access to and utilization of existing available services. ``(b) Missions of the Outreach Projects.--Projects under subsection (a) should be designed to address the needs of a wide range of populations living in rural communities including, but not limited to, the poor, farmers, farm workers, senior citizens, individuals with disabilities, pregnant women, infants, adolescents, and rural populations with special health care needs. The program could include projects to: ``(1) Provide, enhance, or revitalize emergency medical services in rural communities. ``(2) Provide ambulatory health and/or mental health services in health professional shortage areas and in frontier areas. ``(3) Enhance the health and safety of farmers through direct health services for farm families, and migrant and seasonal farm workers. ``(4) Provide direct health services to enhance health care services to senior citizens. ``(5) Provide direct health services that will reduce infant mortality in rural communities. ``(c) Composition of Program.-- ``(1) Consortium arrangements.--Participation in the program established in subsection (a) requires the formation of consortium arrangements among three or more separate and distinct entities to carry out an outreach project. ``(2) Certain requirements.-- ``(A) A consortium under paragraph (1) must be composed of three or more existing health care providers or a combination of three or more health care and social service providers. Consortium members may include such entities as hospitals, public health agencies, home health providers, mental health centers, rural health clinics, social service agencies, health professional schools, educational institutions, emergency medical centers/providers, and community and migrant health centers. ``(B) All public and private entities, both nonprofit and for-profit may participate as members of a consortium arrangement under paragraph (1). ``(C) A grant under subsection (a) will be made to only one entity in a consortium under paragraph (1). The grant recipient must be a nonprofit or public entity which meets one of the following requirements: ``(i) The applicant must be located outside of a Metropolitan Statistical Area as defined by the Federal Government. ``(ii) The applicant must be located in a rural census tract. ``(d) Review Criteria.--An outreach application under this section shall be evaluated based on the following criteria: ``(1) The extent to which the applicant has proposed a new and innovative approach to health care in the rural area. Services shall be directed to population groups that are unserved or underserved. ``(2) The extent to which the applicant has justified and documented the needs for the project and developed measurable goals for meeting the needs. ``(3) The extent to which the applicant has clearly defined the roles and responsibilities for each member of the consortium and developed a workable plan for managing the consortium's activities. ``(4) The level of local commitment and involvement with the project, including the extent of cost participation by the applicant and/or other organizations. ``(5) The feasibility of the project to continue after Federal grant support is completed. ``(6) The extent of the evaluation component. ``(e) How Project Funds Are to be Expended.-- ``(1) Grantees under subsection (a) will be required to use at least 85 percent of the total amount awarded for outreach and care services. ``(2) 60 percent of funds must be spent in rural areas. ``(3) Grant funds may not be used for purchase, construction, or renovation of real property or to support the delivery of inpatient services. ``(4) Grant funds may be used for equipment and vehicles when such equipment is essential to carrying out the outreach project. ``(5) Individual grant awards will be limited to a total amount of $300,000 per year for not to exceed 3 years. ``(6) Applicants must demonstrate that existing levels of institutional and other support are not reduced or supplanted by the availability of these grant funds. ``(f) Authorization of Appropriations.--For the purpose of carrying out this section, there are authorized to be appropriated $25,000,000 for fiscal year 1994, and such sums as may be necessary for each fiscal year thereafter.''. <all> HR 192 IH----2 HR 192 IH----3 HR 192 IH----4 HR 192 IH----5