[Congressional Record Volume 141, Number 141 (Tuesday, September 12, 1995)]
[Senate]
[Pages S13473-S13475]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. D'AMATO:
  S. 1232. A bill to amend the Internal Revenue Code of 1986 to exclude 
length of service awards to volunteers performing fire fighting or 
prevention services, emergency medical services, or ambulance services 
from the limitations applicable to certain deferred compensation plans, 
and for other purposes; to the Committee on Finance.


                   volunteer firefighters legislation

 Mr. D'AMATO. Mr. President, today I am introducing legislation 
to exclude Length of Service Award Programs [LOSAP's] for volunteers 
performing firefighting or prevention services, emergency medical 
services, or ambulance services from section 457 of the 

[[Page S 13474]]
Internal Revenue Code. In addition, the legislation would exempt 
LOSAP's from FICA and Medicare taxation. This corrective legislation 
would support the vital role that volunteer firefighters and rescue 
personnel play in small towns and rural areas across America.
  I am very proud to say that I am a volunteer firefighter, and have 
been for about 30 years. And I was never more proud than to witness the 
efforts of the 1,500 or so volunteers who vigorously fought the recent 
fire we had on Long Island. There are approximately 150,000 volunteer 
firefighters in about 37 States who receive nominal awards, averaging 
$250 per year, under LOSAP's from their governmental or tax-exempt fire 
districts. Volunteers earn awards under a LOSAP, on the basis of years 
of service, while performing volunteer services. However, not until 
after retiring from volunteer service are volunteers actually disbursed 
cash from the LOSAP's. There are similar award programs for volunteers 
performing other emergency medical services, such as rescue personnel 
and ambulance drivers.
  These nonqualified plans are covered under Internal Revenue Code 
section 457. Participants in these plans normally report for tax 
purposes any compensation deferred and any income attributable to the 
amounts when it is actually received, similar to qualified pension 
plans. Under section 457, one requirement to delay taxation is to limit 
such deferred amounts to a percentage of compensation paid. Generally, 
most volunteer firefighters and rescue personnel receive no regular 
pay, or only nominal amounts to cover expenses. Section 457 is in the 
code to prevent governmental and tax-exempt entities from setting aside 
excessive amounts of tax-deferred income for highly compensated 
employees, while at the same time being able to avoid the 
nondiscrimination rules that are applicable to qualified plans. 
Volunteers are far from being highly compensated, so the legislation 
does not undermine this policy.
  However, applying the current limitations, on the amounts set aside 
as LOSAP's for retirement, may result in a tax liability for volunteers 
with zero or minimal pay at the time the amounts vest with the 
volunteer. This could result even though it may be years before the 
volunteer will actually receive any funds.
  This proposal would provide that the LOSAP's are excluded from the 
provisions of section 457. The result would be deferral of taxation 
until the LOSAP awards are paid. It would also exempt the amounts 
awarded under LOSAP's from FICA and Medicare payroll taxes. The latter 
provision is similar to other payroll tax exclusions permitted in the 
tax law, such as exempting Peace Corps allowances paid to volunteers, 
as well as other plans established by the Government for deferral of 
compensation.
  Mr. President, the proposal would foster volunteerism in the United 
States. This is especially important because in many parts of the 
country it is not economically or geographically feasible to provide 
fire protection and emergency medical services through paid career 
personnel.
  I urge my colleagues to support this sensible legislation.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1232

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     SECTION 1. TREATMENT OF LENGTH OF SERVICE AWARDS TO 
                   VOLUNTEERS PERFORMING FIRE FIGHTING OR 
                   PREVENTION SERVICES, EMERGENCY MEDICAL 
                   SERVICES, OR AMBULANCE SERVICES.

       (a) In General.--Paragraph (11) of section 457(e) of the 
     Internal Revenue Code of 1986 (relating to deferred 
     compensation plans of State and local governments and tax-
     exempt organizations) is amended to read as follows:
       ``(11) Certain plans excluded.--
       ``(A) In general.--The following plans shall be treated as 
     not providing for the deferral of compensation:
       ``(i) Any bona fide vacation leave, sick leave, 
     compensatory time, severance pay, disability pay, or death 
     benefit plan.
       ``(ii) Any plan paying solely length of service awards to 
     bona fide volunteers (or their beneficiaries) on account of 
     qualified services performed by such volunteers.
       ``(B) Special rules applicable to length of service award 
     plans.--An individual shall be treated as a bona fide 
     volunteer for purposes of subparagraph (A)(ii) if the only 
     compensation received by such individual for performing 
     qualified services is in the form of--
       ``(i) reimbursement for (or a reasonable allowance for) 
     reasonable expenses incurred in the performance of such 
     services, or
       ``(ii) reasonable benefits (including length of service 
     awards), and nominal fees for such services, customarily paid 
     by eligible employers in connection with the performance of 
     such services by volunteers.
       ``(C) Qualified services.--For purposes of this paragraph, 
     the term `qualified services' means fire fighting and 
     prevention services, emergency medical services, and 
     ambulance services.''
       (b) Exemption From Social Security Taxes.--(1) Subsection 
     (i) of section 3121 of such Code is amended by adding at the 
     end the following new paragraph:
       ``(6) Volunteers performing fire and medical services.--For 
     purposes of this chapter, the term `wages' shall not 
     include--
       ``(A) any amount deferred under a plan described in section 
     457(e)(11)(A)(ii) and maintained by an eligible employer (as 
     defined in section 457(e)(1)), and
       ``(B) any payment from such a plan.''
       (2) Section 209 of the Social Security Act is amended by 
     adding at the end the following new subsection:
       (2) Section 209 of the Social Security Act is amended by 
     adding at the end the following new subsection:
       ``(1) For purposes of this title, the term `wages' shall 
     not include--
       ``(1) any amount deferred under a plan described in section 
     457(e)(11)(A)(ii) of the Internal Revenue Code of 1986 and 
     maintained by an eligible employer (as defined in section 
     457(e)(1) of such Code), and
       ``(2) any payment from such a plan.''
       (c) Effective Date.--
       (1) Subsection (a).--The amendment made by subsection (a) 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
       (2) Subsection (b).--The amendments made by subsection (b) 
     shall apply to remuneration paid after the date of the 
     enactment of this Act.
                                 ______

      By Ms. MIKULSKI:
  S. 1233. A bill to assure equitable coverage and treatment of 
emergency services under health plans; to the Committee on Labor and 
Human Resources.


          THE ACCESS TO EMERGENCY MEDICAL SERVICES ACT OF 1995

 Ms. MIKULSKI. Mr. President, today, I am introducing the 
Access to Emergency Medical Services Act of 1995. This bill prohibits 
health plans from denying coverage and payment for emergency room 
visits.
  Currently, payment for emergency room services may be denied because 
a patient does not have pre-authorization for treatment; the diagnosis 
after reaching the emergency room determined the condition was not an 
emergency; or the health plan may not have a contract with the hospital 
rendering the emergency service. Denial of payment places a significant 
burden on the patient, who now has higher health care costs and is more 
cautious about seeking medical treatment. This is a significant health 
risk. A patient thinks twice about going to an emergency room and 
receiving emergency medical treatment for conditions that really pose a 
serious health problem.
  Federal law requires physicians and hospitals to render emergency 
services immediately for an injury or sudden illness. The law also 
requires that emergency services not be delayed until the health 
insurance status of a patient has been determined. However, too often 
patients are not receiving treatment until their health plan has given 
authorization for services. This bill would prohibit health plans from 
denying coverage and payment for services because of a lack of 
authorization from the health plan. The bill also requires health plans 
to pay emergency physicians and hospital emergency departments for 
emergency services rendered in compliance with Federal law.
  Most importantly, the Access to Emergency Medical Services Act 
provides a uniform definition of emergency. This definition would base 
payment upon a patient's symptoms and not upon the doctor's diagnosis. 
Therefore, health plans could not deny coverage and payment for medical 
services after a diagnosis is given. The State of Maryland has 
established a uniform definition of emergency, as have Virginia and 
Arkansas. The Maryland law giving a uniform definition of emergency was 
enacted in 1993. Since the enactment of the bill, complaints to the 
Maryland Insurance Administration have decreased by 90 percent. In 

[[Page S 13475]]
addition, patients are able to have urgent symptoms treated in the 
emergency rooms without any problems regarding pre-authorization from 
the health plan. There has not been a denial of coverage or payment for 
services even if the final diagnosis is different from the symptoms.
  The Maryland law has proven to be cost-effective to patients and to 
the health plans. Providing a uniform definition of emergency allows 
persons to be treated for their symptoms even if the final diagnosis 
determines the medical problem causing the symptoms was not an 
emergency. This policy is able to prevent much more serious health 
problems. By not denying coverage and prohibiting persons from 
receiving treatment in the emergency department, more serious illnesses 
are prevented or detected sooner. This will allow for medical treatment 
for existing conditions that prevent the onset of a life threatening 
illness for which a person may have to be hospitalized. Let me give an 
example. A person has chest pains but believes he is having a heart 
attack. The emergency room diagnosis determines that the person is not 
having a heart attack. However, if the person had not received 
treatment for the chest pains, he could have later had a heart attack 
requiring hospital admission. The cost for treatment in the emergency 
department is less than if the person had to be admitted to the 
hospital for any length of time. The Access to Emergency Medical 
Services Act of 1995 saves money for patients and for health plans.
  Health plans that deny emergency care coverage are taking a deadly 
toll on American families. We, as lawmakers, have an obligation to 
protect our constituents and end this very real problem. I urge my 
colleagues to support the Access to Emergency Medical Service Act of 
1995.


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