[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2948 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 2948

To provide quality, affordable health insurance for small employers and 
                              individuals.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 30, 2008

   Mr. Brown introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
To provide quality, affordable health insurance for small employers and 
                              individuals.

    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 ``Small Business Empowerment Act''.

SEC. 2. DEFINITIONS.

    (a) In General.--In this Act, the terms ``health benefits plan'', 
``carrier'', and ``dependent'' have the meanings given such terms in 
section 8901 of title 5, United States Code.
    (b) Other Terms.--In this Act:
            (1) Administrator.--The term ``Administrator'' means the 
        entity that enters into the contract under section 3(b).
            (2) Commission.--The term ``Commission'' means the National 
        Health Coverage Commission established under section 8.
            (3) Employee.--The term ``employee'' has the meaning given 
        such term under section 3(6) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1002(6)). Such term shall not 
        include an employee of the Federal Government.
            (4) Employer.--The term ``employer'' has the meaning given 
        such term under section 3(5) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1002(5)), except that such term 
        shall include only employers who employed an average of at 
        least 1 but not more than 100 employees on business days during 
        the year preceding the date of application. Such term shall not 
        include the Federal Government.
            (5) Health insurance issuer.--The term ``health insurance 
        issuer'' has the meaning given such term in section 2791(b)(2) 
        of the Public Health Service Act (42 U.S.C. 300gg-91(b)(2)), 
        except that such term shall include the sponsor of a group 
        health plan.
            (6) Office.--The term ``Office'' means the Office of 
        Personnel Management.
            (7) Participating employer.--The term ``participating 
        employer'' means an employer that--
                    (A) elects to provide health insurance coverage 
                under this Act to its employees;
                    (B) is not offering other comprehensive health 
                insurance coverage to such employees; and
                    (C) agrees to provide the employer contribution as 
                required under section 6(a).
            (8) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
    (c) Application of Certain Rules in Determination of Employer 
Size.--For purposes of subsection (b)(2):
            (1) Application of aggregation rule for employers.--All 
        persons treated as a single employer under subsection (b), (c), 
        (m), or (o) of section 414 of the Internal Revenue Code of 1986 
        shall be treated as 1 employer.
            (2) Employers not in existence in preceding year.--In the 
        case of an employer which was not in existence for the full 
        year prior to the date on which the employer applies to 
        participate, the determination of whether such employer meets 
        the requirements of subsection (b)(2) shall be based on the 
        average number of employees that it is reasonably expected such 
        employer will employ on business days in the employer's first 
        full year.
            (3) Predecessors.--Any reference in this subsection to an 
        employer shall include a reference to any predecessor of such 
        employer.
    (d) Waiver and Continuation of Participation.--
            (1) Waiver.--The Office may waive the limitations relating 
        to the size of an employer which may participate in the health 
        insurance program established under this Act on a case by case 
        basis if the Office determines that such employer makes a 
        compelling case for such a waiver. In making determinations 
        under this paragraph, the Office may consider the effects of 
        the employment of temporary and seasonal workers and other 
        factors.
            (2) Continuation of participation.--An employer 
        participating in the program under this Act that experiences an 
        increase in the number of employees so that such employer has 
        in excess of 100 employees, may not be excluded from 
        participation solely as a result of such increase in employees.

SEC. 3. NATIONAL SMALL EMPLOYER AND INDIVIDUALS RISK POOL.

    (a) Establishment.--The Secretary, in consultation with the 
Director of the Office, shall established a national program to make 
quality, affordable health insurance available to small employers and 
self-employed individuals in a manner that will spread risk on a 
national basis. The program shall be modeled on the Federal employees 
health benefit program under chapter 89 of title 5, United States Code.
    (b) Contract for Administration.--
            (1) In general.--The Secretary, in consultation with the 
        Director of the Office, shall enter into a contract with an 
        eligible entity for the administration of the program 
        established under subsection (a).
            (2) Eligible entity.--The program under subsection (a) 
        shall be administered by a private entity under a contract 
        entered into with the Department of Health and Human Services. 
        An entity shall be eligible to enter into such contract if such 
        entity--
                    (A) is a medicare fiscal intermediary, a health 
                insurance issuer, a health care provider organization, 
                a third party administrator, or any other entity 
                determined appropriate by the Secretary; and
                    (B) can demonstrate the ability to administer the 
                insurance program under this Act, for a population 
                significantly larger than that populations served under 
                the Federal Employees Health Benefits Program under 
                chapter 89 of title 5, United States Code.
    (c) Limitations.--In no event shall the enactment of this Act 
result in--
            (1) any increase in the level of individual or Federal 
        Government contributions required under chapter 89 of title 5, 
        United States Code, including copayments or deductibles;
            (2) any decrease in the types of benefits offered under 
        such chapter 89; or
            (3) any other change that would adversely affect the 
        coverage afforded under such chapter 89 to employees and 
        annuitants and members of family under that chapter.

SEC. 4. CONTRACT REQUIREMENT.

    (a) In General.--The Administrator may enter into contracts with 
qualified carriers offering health benefits plans of the type described 
in section 8903 or 8903a of title 5, United States Code, without regard 
to section 5 of title 41, United States Code, or other statutes 
requiring competitive bidding, to provide health insurance coverage to 
employees of participating employers and individuals under this Act. 
Each contract shall be for a uniform term of at least 1 year, but may 
be made automatically renewable from term to term in the absence of 
notice of termination by either party. In entering into such contracts, 
the Administrator shall ensure that health benefits coverage is 
provided for individuals only, individuals with one or more children, 
married individuals without children, and married individuals with one 
or more children. As a condition of entering into such a contract, a 
qualified carrier shall agree to pay the monthly assessment required 
under section 11(c).
    (b) Eligibility.--A carrier shall be eligible to enter into a 
contract under subsection (a) if such carrier--
            (1) is licensed to offer health benefits plan coverage in 
        each State in which the plan is offered; and
            (2) meets such other requirements as determined appropriate 
        by the Secretary.
    (c) Benefits.--
            (1) Pilot program.--
                    (A) In general.--The Administrator shall establish 
                a pilot program to provide for the offering, by 
                carriers, of a model health benefits plan that is 
                developed using the model provided for under section 
                8(c)(1).
                    (B) Assessment.--Not later than 5 years after the 
                date on which the pilot program is established under 
                subparagraph (A), the Administrator shall contract with 
                the Institute of Medicine for the conduct of an 
                assessment on the impact of the pilot program on health 
                care coverage costs and access.
            (2) Statement of benefits.--Each contract under this Act 
        shall contain a detailed statement of benefits offered and 
        shall include information concerning such maximums, 
        limitations, exclusions, and other definitions of benefits as 
        the Administrator considers necessary or desirable.
            (3) Ensuring a range of plans.--The Administrator shall 
        ensure that a range of health benefits plans are available to 
        participating employers under this Act.
    (d) Standards.--The minimum standards prescribed for health 
benefits plans under section 8902(e) of title 5, United States Code, 
and for carriers offering plans, shall apply to plans and carriers 
under this Act. Approval of a plan may be withdrawn by the 
Administrator only after notice and opportunity for hearing to the 
carrier concerned without regard to subchapter II of chapter 5 and 
chapter 7 of title 5, United States Code.
    (e) Conversion.--
            (1) In general.--A contract may not be made or a plan 
        approved under this section if the carrier under such contract 
        or plan does not offer to each enrollee whose enrollment in the 
        plan is ended, except by a cancellation of enrollment, a 
        temporary extension of coverage during which the individual may 
        exercise the option to convert, without evidence of good 
        health, to a nongroup contract providing health benefits. An 
        enrollee who exercises this option shall pay the full periodic 
        charges of the nongroup contract.
            (2) Noncancellable.--The benefits and coverage made 
        available under paragraph (1) may not be canceled by the 
        carrier except for fraud, over-insurance, or nonpayment of 
        periodic charges.
    (f) Requirement of Payment For or Provision of Health Service.--
Each contract entered into under this Act shall require the carrier to 
agree to pay for or provide a health service or supply in an individual 
case if the Administrator finds that the employee, annuitant, family 
member, former spouse, or person having continued coverage under 
section 8905a of title 5, United States Code, is entitled thereto under 
the terms of the contract.

SEC. 5. ELIGIBILITY.

    An individual shall be eligible to enroll in a plan under this Act 
if such individual--
            (1) is an employee of a small employer described in section 
        2(b)(2), or is a self-employed individual as defined in section 
        401(c)(1)(B) of the Internal Revenue Code of 1986, that elects 
        to provide coverage for its employees under this Act; or
            (2) is not otherwise enrolled or eligible for enrollment or 
        coverage of the type described in section 2701(c)(1) of the 
        Public Health Service Act.

SEC. 6. APPLICATION OF PROVISIONS.

    (a) FEHBP.--Except as provided in this section, the provisions of 
chapter 89 of title 5, United States Code, relating to employer 
contributions for coverage, requirements for rating, guaranteed issue 
and renewability, and other provisions determined appropriate by the 
Secretary (in consultation with the Director of the Office) shall apply 
with respect to health coverage provided under this Act.
    (b) Rating and Loss-Ratio.--
            (1) Rating.--With respect to the determination of premium 
        amounts for health benefits plans under this Act, the only 
        rating factor permitted shall be an age-related factor.
            (2) Loss-ratio.--A qualified carrier shall ensure that the 
        loss-ratio of any health benefits plan offered by such carrier 
        under this Act not be less than 85 percent with respect to the 
        amount of premiums expended for patient care.
    (c) Continued Applicability of State Law.--
            (1) Health insurance or plans.--
                    (A) Plans.--With respect to a contract entered into 
                under this Act under which a carrier will offer health 
                benefits plan coverage, State mandated benefit laws in 
                effect in the State in which the plan is offered shall 
                continue to apply.
                    (B) Rating rules.--The rating and other 
                requirements described in subsections (a) and (b) shall 
                supercede State rating rules for qualified plans under 
                this Act.
            (2) Limitation.--Nothing in this subsection shall be 
        construed to preempt--
                    (A) any State or local law or regulation except 
                those laws and regulations described in subparagraph 
                (B) of paragraph (1);
                    (B) any State grievance, claims, and appeals 
                procedure law, except to the extent that such law is 
                preempted under section 514 of the Employee Retirement 
                Income Security Act of 1974; and
                    (C) State network adequacy laws.

SEC. 7. EMPLOYER PARTICIPATION.

    (a) Regulations.--The Secretary, in consultation with the Director 
of the Office, shall prescribe regulations providing for employer 
participation under this Act, including the offering of health benefits 
plans under this Act to employees.
    (b) Enrollment and Offering of Other Coverage.--
            (1) Enrollment.--A participating employer shall ensure that 
        each eligible employee has an opportunity to enroll in a plan 
        under this Act.
            (2) Prohibition on offering other comprehensive health 
        benefit coverage.--A participating employer may not offer a 
        health insurance plan providing comprehensive health benefits 
        coverage to employees participating in the program under this 
        Act other than a health benefits plan that--
                    (A) meets the requirements described in section 
                4(a); and
                    (B) is offered only through the enrollment process 
                established by the Administrator under section 3.
            (3) Offer of supplemental coverage options.--
                    (A) In general.--A participating employer may offer 
                supplementary coverage options to employees.
                    (B) Definition.--In subparagraph (A), the term 
                ``supplementary coverage'' means benefits described as 
                ``excepted benefits'' under section 2791(c) of the 
                Public Health Service Act (42 U.S.C. 300gg-91(c)).

SEC. 8. NATIONAL HEALTH COVERAGE COMMISSION.

    (a) Establishment.--There is established a commission to be known 
as the ``National Health Coverage Commission'' to carry out the duties 
activities described in subsection (c).
    (b) Composition.--
            (1) Appointment.--The Commission shall be composed of 15 
        members to be appointed by the President, after consultation 
        with and recommendations from the Institute of Medicine of the 
        National Academy of Sciences, from among representatives of 
        employers, employees, health care providers, health services 
        researchers, economists, and other health care stakeholders and 
        experts determined appropriate by the Institute of Medicine.
            (2) Chairperson, vice-chairperson, and meetings.--Not later 
        than 30 days after the date on which all members of the 
        Commission are appointed under paragraph (1), such members 
        shall meet to elect a Chairperson and Vice Chairperson from 
        among such members and shall determine a schedule of Commission 
        meetings.
            (3) Terms, vacancies, and quorum.--
                    (A) Terms.--An individual appointed under paragraph 
                (1) shall serve a term of 3 years.
                    (B) Vacancy.--Any vacancy in the Commission shall 
                not affect its powers and shall be filled in the same 
                manner in which the original appointment was made.
                    (C) Quorum.--A majority of the members of the 
                Commission shall constitute a quorum, but a lesser 
                number of members may hold hearings.
    (c) Duties and Activities.--The Commission shall--
            (1) develop a model that ensures adequate coverage for 
        medically necessary services, promotes disease and chronic 
        disease management, provides incentives for health provider 
        compliance with best practices protocols, and that does not 
        discriminate against individuals based on the nature of their 
        medically necessary condition, but provides appropriate 
        coverage limits based on scientifically determined models of 
        care;
            (2) as part of the model under paragraph (1), establish a 
        standardized benefit package for health benefit plans provided 
        under contracts entered into under this Act;
            (3) develop model cost sharing mechanisms that do not 
        discriminate and that accommodate lower income individuals;
            (4) establish a systematic means of ensuring that the 
        health care system adopts best practices;
            (5) provide for the establishment of a partnership between 
        health care providers, manufacturers of health products, health 
        care economists, and policy experts in the areas of health 
        financing and delivery, to--
                    (A) develop a systematic means of ensuring that the 
                health care system adopts best practices;
                    (B) develop procedures to combat price gouging by 
                the manufacturers of new health products; and
                    (C) determine cost sharing mechanisms that do not 
                discriminate and that accommodate low income 
                individuals; and
            (6) carry out any other activities determined appropriate 
        by the Secretary to assist in carrying out this Act.
    (d) Powers of Commission.--
            (1) Hearings.--The Commission may hold such hearings, meet 
        and act at such times and places, and receive such evidence as 
        may be necessary to carry out the functions of the Commission.
            (2) Information from federal agencies.--
                    (A) In general.--The Commission may access, to the 
                extent authorized by law, from any executive 
                department, bureau, agency, board, commission, office, 
                independent establishment, or instrumentality of the 
                Federal Government such information, suggestions, 
                estimates, and statistics as the Commission considers 
                necessary to carry out this Act.
                    (B) Provision of information.--On written request 
                of the Chairperson of the Commission, each department, 
                bureau, agency, board, commission, office, independent 
                establishment, or instrumentality shall, to the extent 
                authorized by law, provide the requested information to 
                the Commission
                    (C) Receipt, handling, storage, and 
                dissemination.--Information shall only be received, 
                handled, stored, and disseminated by members of the 
                Commission and its staff consistent with all applicable 
                statutes, regulations, and Executive orders.
            (3) Assistance from federal agencies.--
                    (A) General services administration.--On request of 
                the Chairperson of the Commission, the Administrator of 
                General Services shall provide to the Commission, on a 
                reimbursable basis, administrative support and other 
                assistance necessary for the Commission to carry out 
                its duties.
                    (B) Other departments and agencies.--In addition to 
                the assistance provided for under subparagraph (A), 
                departments and agencies of the United States may 
                provide to the Commission such assistance as they may 
                determine advisable and as authorized by law.
            (4) Contracting.--The Commission may enter into contracts 
        to enable the Commission to discharge its duties under this 
        Act.
            (5) Donations.--The Commission may accept, use, and dispose 
        of donations of services or property.
            (6) Postal services.--The Commission may use the United 
        States mails in the same manner and under the same conditions 
        as a department or agency of the United States.
    (e) Staff of Commission.--
            (1) In general.--The Chairperson of the Commission, in 
        consultation with the Vice Chairperson, in accordance with 
        rules agreed upon by the Commission, may appoint and fix the 
        compensation of a staff director and such other personnel as 
        may be necessary to enable the Commission to carry out its 
        functions, in accordance with the provisions of title 5, United 
        States Code, except that no rate of pay fixed under this 
        subsection may exceed the equivalent of that payable for a 
        position at level V of the Executive Schedule under section 
        5316 of title 5, United States Code.
            (2) Staff of federal agencies.--Upon request of the 
        Chairperson of the Commission, the head of any executive 
        department, bureau, agency, board, commission, office, 
        independent establishment, or instrumentality of the Federal 
        Government may detail, without reimbursement, any of its 
        personnel to the Commission to assist it in carrying out its 
        duties under this Act. Any detail of an employee shall be 
        without interruption or loss of civil service status or 
        privilege.
            (3) Consultant services.--The Commission is authorized to 
        procure the services of experts and consultants in accordance 
        with section 3109 of title 5, United States Code, but at rates 
        not to exceed the daily rate paid a person occupying a position 
        at level IV of the Executive Schedule under section 5315 of 
        title 5, United States Code.
    (f) Report and Termination.--
            (1) Report.--Not later than 3 years after the date on which 
        all of the members of the Commission are appointed under 
        subsection (b), the Commission shall submit to the appropriate 
        committees of Congress a report concerning the activities of 
        the Commission which shall include recommendations for coverage 
        and benefits under the program under this Act.
            (2) Termination.--The Commission shall terminate on the 
        date on which the report is submitted under paragraph (1).

SEC. 9. PUBLIC EDUCATION CAMPAIGN.

    (a) In General.--In carrying out this Act, the Secretary, in 
consultation with the Director of the Office, shall develop, and the 
Administrator shall implement, an educational campaign to provide 
information to employers and the general public concerning the health 
insurance program developed under this Act.
    (b) Annual Progress Reports.--Not later than 1 year and 2 years 
after the implementation of the campaign under subsection (a), the 
Administrator shall submit to the appropriate committees of Congress a 
report that describes the activities of the Administrator under 
subsection (a), including a determination by the Administrator of the 
percentage of employers with knowledge of the health benefits programs 
provided for under this Act.
    (c) Public Education Campaign.--There is authorized to be 
appropriated to carry out this section, such sums as may be necessary 
for each of fiscal years 2009 and 2010.

SEC. 10. TRANSITION PERIOD.

    During the period prior to the date on which assessments begin 
under section 11(c), the Administrator shall adjust the annual premium 
amount assessed for coverage under a health benefits plan to reflect 
the median premium amount that is assessed for coverage under the Blue 
Cross/Blue Shield Standard Plan provided under the Federal Employees 
Health Benefit Program under chapter 89 of title 5, United States Code 
for the year involved.

SEC. 11. REINSURANCE PROGRAM.

    (a) Establishment of Program.--Not later than 1 year after the date 
of enactment of this Act, the Secretary shall establish a program to 
provide reinsurance to qualified carriers offering health benefit plans 
under this Act.
    (b) Amount of Reinsurance Payments.--
            (1) In general.--Under the program established under 
        subsection (a), the Secretary shall, using amounts in the trust 
        fund established under subsection (d), pay to a qualified 
        carrier an amount determined under paragraph (2) for each large 
        claim paid by such carrier under a health benefits plan under 
        this Act.
            (2) Payment.--The amount of a payment under paragraph (1) 
        shall be equal to 90 percent of the amount of the large claim 
        paid by the carrier under this Act.
            (3) Large claim.--In this subsection, the term ``large 
        claim'' means a claim paid by a qualified carrier on behalf of 
        a enrollee under a health benefits plan under this Act that is 
        excess of $5,000, but less than $75,000.
            (4) Annual payment.--The Secretary shall develop procedures 
        to provide for the annual payment of amounts to qualified 
        carriers under the program under this section.
    (c) Assessments.--
            (1) In general.--The Secretary shall require the payment of 
        monthly assessments by each health insurance issuer offering 
        health insurance coverage.
            (2) Amount of assessment.--
                    (A) Establishment of base amount by secretary.--Not 
                later than 1 year after the date of enactment of this 
                Act, the Secretary shall determine the base amount of 
                the assessment under paragraph (1).
                    (B) Amount per carrier.--With respect to a health 
                insurance issuer, the amount of the monthly assessment 
                under this subsection shall be the product of the base 
                amount under subparagraph (A) and the number of lives 
                covered under the health benefits plans offered by the 
                issuer during the month involved.
    (d) Trust Fund.--
            (1) Establishment.--There is established in the Treasury of 
        the Untied States a trust fund to be known as the ``Small 
        Business Health Coverage Trust Fund'', consisting of such 
        amounts as may be appropriated or credited to such Trust Fund 
        as provided in this subsection.
            (2) Transfers to trust fund.--There are hereby appropriated 
        to the Small Business Health Coverage Trust Fund amounts 
        equivalent to the net revenues received in the Treasury from 
        the assessments paid under subsection (c).

SEC. 12. APPROPRIATIONS.

    There are authorized to be appropriated, such sums as may be 
necessary in each fiscal year for the development and administration of 
the program under this Act.
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