[Congressional Record Volume 148, Number 150 (Tuesday, November 19, 2002)]
[Senate]
[Pages S11577-S11579]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN:
  S. 3173. A bill to amend title 5, United States Code, to establish a 
national health program administered by the Office of Personnel 
Management to offer Federal employee health benefits plans to 
individuals who are not Federal employees, and for other purposes; to 
the Committee on Governmental Affairs.
  Mr. DURBIN. Mr. President, today I am introducing legislation to make 
available to all Americans the same range of private health insurance 
plans available to Members of Congress and other Federal employees 
through the Federal Employees Health Benefits Program, FEHBP.
  Too many Americans do not have real insurance options. Many 
individuals lack insurance because no insurer is willing to cover them 
at a reasonable price. Others work for employers who do not provide 
health insurance or offer only one insurance provider. This legislation 
addresses these issues by giving individuals and businesses access to 
the group purchasing power of FEHBP and the wide range of health plans 
in that program.
  The OPTION Act, Offering People True Insurance Options Nationwide, 
would expand insurance options by allowing individuals to enroll in 
private health insurance plans nearly identical to the plans available 
to federal employees. Though the OPTION program would be separate from 
the Federal employees program, it would be modeled after FEHBP and 
would draw from FEHBP's strengths: plan choice, group purchasing 
savings, comprehensive benefits, and open enrollment periods.
  Under this legislation, all FEHBP health plans would be required to 
offer an OPTION health plan to non-Federal employees with the same 
range of benefits they offer Federal employees through FEHBP.
  OPTION enrollees would be placed in a separate risk pool to prevent 
any adverse effect on current FEHBP employees, annuitants, and their 
families. The OPTION Act would not result in any changes to the 
premiums or benefits of today's FEHBP health plans.
  OPTION health plans would not be allowed to impose any preexisting 
condition exclusions on new OPTION enrollees who have at least one year 
of health insurance coverage immediately prior to enrollment in an 
OPTION plan. To prevent people from waiting until they are sick to 
enroll, health plans would be allowed to exclude coverage for 
preexisting conditions for up to one year for people without coverage 
immediately prior to enrollment.
  One of the few differences from FEHBP is that OPTION plans would be 
allowed to vary premiums by age so that younger enrollees would be more 
likely to enroll. OPTION plans also would be required to offer rebates 
or lower premiums to encourage and reward longevity of health coverage. 
These provisions would act as an incentive for people to sign up when 
they are young and to maintain continuous coverage.
  Along with making FEHBP available in the individual market, the 
OPTION program will allow businesses to tap into the type of group 
buying power in the federal employees program if they voluntarily 
choose to participate. To be eligible, a business would have to be 
willing to pay at least a minimum percentage of premiums, varying from 
40 percent to 60 percent depending on the size of the business. 
Employers would also be offered an incentive to begin enrolling their 
employees by allowing them to pay as little as 20 percent of the 
premium for the first year. This innovative employer option would 
encourage employer health coverage rather than shifting coverage away 
from the private sector. I want to emphasize that employer 
participation would be entirely voluntary.
  Under the OPTION Act, premiums would not be government-subsidized. 
Instead, enrollees and those employers who choose to participate would 
be responsible for the cost of the premiums.
  The OPTION program would be administered by the Office of Personnel 
Management, OPM, which administers the FEHBP program, and would 
generally follow the rules for FEHBP. OPM has developed considerable 
expertise in negotiating and working with health plans and has shown 
that it can run a health program well at a minimal cost. We can build 
on OPM's expertise to extend the same health insurance options to all 
Americans.
  Finally, once it is up and running, this program would pay for 
itself. Administrative costs would be covered from a portion of the 
OPTION premiums. Those who benefit from the program would pay for its 
overhead costs.
  This legislation could open the door for many Americans to obtain 
good health insurance coverage. Health insurance premiums in today's 
market can be especially high, both for individuals and for small 
businesses buying insurance on their own. This legislation will reduce 
the cost of insurance, and as a result will help to reduce the number 
of uninsured Americans. It will also expand insurance options. I 
encourage my colleagues to support this very important legislation.

[[Page S11578]]

  I ask unanimous consent that the text of the legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3173

       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 ``Offering People True 
     Insurance Options Nationwide Act of 2002''.

     SEC. 2. OPTION HEALTH INSURANCE.

       Subpart G of part III of title 5, United States Code, is 
     amended by adding at the end the following:

       ``CHAPTER 90A--HEALTH INSURANCE FOR NON-FEDERAL EMPLOYEES

``Sec.
``9051. Definitions.
``9052. Health insurance for non-Federal employees.
``9053. Contract requirement.
``9054. Eligibility.
``9055. Alternative conditions to Federal employee plans.
``9056. Coordination with social security benefits.
``9057. Non-Federal employer participation.

     ``Sec. 9051. Definitions

       ``In this chapter--
       ``(1) the terms defined under section 8901 shall have the 
     meanings given such terms under that section; and
       ``(2) the term `Office' means the Office of Personnel 
     Management.

     ``Sec. 9052. Health insurance for non-Federal employees

       ``(a) The Office of Personnel Management shall administer a 
     health insurance program for non-Federal employees in 
     accordance with this chapter.
       ``(b) Except as provided under this chapter, the Office 
     shall prescribe regulations to apply the provisions of 
     chapter 89 to the greatest extent practicable to eligible 
     individuals covered under this chapter.
       ``(c) In no event shall the enactment of this chapter 
     result in--
       ``(1) any increase in the level of individual or Government 
     contributions required under chapter 89, including copayments 
     or deductibles;
       ``(2) any decrease in the types of benefits offered under 
     chapter 89; or
       ``(3) any other change that would adversely affect the 
     coverage afforded under chapter 89 to employees and 
     annuitants and members of family under that chapter.
       ``(d) The Office shall develop methods to facilitate 
     enrollment under this chapter, including the use of the 
     Internet.
       ``(e) The Office may enter into contracts for the 
     performance of appropriate administrative functions under 
     this chapter.

     ``Sec. 9053. Contract requirement

       ``(a) Each contract entered into under section 8902 shall 
     require a carrier to offer to eligible individuals under this 
     chapter, throughout each term for which the contract remains 
     effective, the same benefits (subject to the same maximums, 
     limitations, exclusions, and other similar terms or 
     conditions) as would be offered under such contract or 
     applicable health benefits plan to employees, annuitants, and 
     members of family.
       ``(b)(1) The Office may waive the requirements of this 
     section, if the Office determines, based on a petition 
     submitted by a carrier that--
       ``(A) the carrier is unable to offer the applicable health 
     benefits plan because of a limitation in the capacity of the 
     plan to deliver services or assure financial solvency;
       ``(B) the applicable health benefits plan is not sponsored 
     by a carrier licensed under applicable State law; or
       ``(C) bona fide enrollment restrictions make the 
     application of this chapter inappropriate, including 
     restrictions common to plans which are limited to individuals 
     having a past or current employment relationship with a 
     particular agency or other authority of the Government.
       ``(2) The Office may require a petition under this 
     subsection to include--
       ``(A) a description of the efforts the carrier proposes to 
     take in order to offer the applicable health benefits plan 
     under this chapter; and
       ``(B) the proposed date for offering such a health benefits 
     plan.
       ``(3) A waiver under this subsection may be for any period 
     determined by the Office. The Office may grant subsequent 
     waivers under this section.

     ``Sec. 9054. Eligibility

       ``An individual shall be eligible to enroll in a plan under 
     this chapter, unless the individual is enrolled or eligible 
     to enroll in a plan under chapter 89.

     ``Sec. 9055. Alternative conditions to Federal employee plans

       ``(a) For purposes of enrollment in a health benefits plan 
     under this chapter, an individual who had coverage under a 
     health insurance plan and is not a qualified beneficiary as 
     defined under section 4980B(g)(1) of the Internal Revenue 
     Code of 1986 shall be treated in a similar manner as an 
     individual who begins employment as an employee under chapter 
     89.
       ``(b) In the administration of this chapter, covered 
     individuals under this chapter shall be in a risk pool 
     separate from covered individuals under chapter 89.
       ``(c)(1) Each contract under this chapter may include a 
     preexisting condition exclusion as defined under section 
     9801(b)(1) of the Internal Revenue Code of 1986.
       ``(2)(A) The preexisting condition exclusion under this 
     subsection shall provide for coverage of a preexisting 
     condition to begin not more than 1 year after the date of 
     coverage of an individual under a health benefits plan, 
     reduced by 1 month for each month that individual was covered 
     under a health insurance plan immediately preceding the date 
     the individual submitted an application for coverage under 
     this chapter.
       ``(B) For purposes of this paragraph, a lapse in coverage 
     of not more than 63 days immediately preceding the date of 
     the submission of an application for coverage shall not be 
     considered a lapse in continuous coverage.
       ``(d)(1) Rates charged and premiums paid for a health 
     benefits plan under this chapter--
       ``(A) may be adjusted and differ from such rates charged 
     and premiums paid for the same health benefits plan offered 
     under chapter 89;
       ``(B) shall be negotiated in the same manner as negotiated 
     under chapter 89; and
       ``(C) shall be adjusted to cover the administrative costs 
     of this chapter.
       ``(2) In determining rates and premiums under this 
     chapter--
       ``(A) the age of covered individuals may be considered; and
       ``(B) rebates or lower rates and premiums shall be set to 
     encourage longevity of coverage.
       ``(e) No Government contribution shall be made for any 
     covered individual under this chapter.
       ``(f) If an individual who is enrolled in a health benefits 
     plan under this chapter terminates the enrollment, the 
     individual shall not be eligible for reenrollment until the 
     first open enrollment period following 6 months after the 
     date of such termination.

     ``Sec. 9056. Coordination with social security benefits

       ``Benefits under this chapter shall, with respect to an 
     individual who is entitled to benefits under part A of title 
     XVIII of the Social Security Act, be offered (for use in 
     coordination with those social security benefits) to the same 
     extent and in the same manner as if coverage were under 
     chapter 89.

     ``Sec. 9057. Non-Federal employer participation

       ``(a) In this section the term--
       ``(1) `employee', notwithstanding section 9051, means an 
     employee of a non-Federal employer;
       ``(2) `non-Federal employer' means an employer that is not 
     the Federal Government; and
       ``(3) `total premium amount' means the total premiums for 
     individual coverage for the health benefits plan under which 
     the employee is enrolled, regardless of whether the employee 
     is enrolled as an individual or for self and family.
       ``(b)(1) The Office shall prescribe regulations under which 
     non-Federal employers may participate under this chapter, 
     including--
       ``(A) the offering of health benefits plans under this 
     chapter to employees through participating non-Federal 
     employers; and
       ``(B) a requirement for participating non-Federal employer 
     contributions to the payment of premiums for employees who 
     enroll in a health benefits plan under this chapter.
       ``(2) A participating non-Federal employer shall pay an 
     employer contribution for the premiums of an employee or 
     other applicable covered individual as follows:
       ``(A) A non-Federal employer that employs not more than 2 
     employees shall not be required to pay an employer 
     contribution.
       ``(B) A non-Federal employer that employs more than 2 and 
     not more than 25 employees shall pay not less than 40 percent 
     of the total premium amount.
       ``(C) A non-Federal employer that employs more than 25 and 
     not more than 50 employees shall pay not less than 50 percent 
     of the total premium amount.
       ``(D) A non-Federal employer that employs more than 50 
     employees shall pay not less than 60 percent of the total 
     premium amount.
       ``(3) Notwithstanding paragraph (2) (B), (C), or (D), a 
     non-Federal employer that employs more than 2 employees shall 
     pay not less than 20 percent of the total premium amount with 
     respect to the first year in which that employer participates 
     under this chapter.
       ``(c)(1) A participating non-Federal employer shall ensure 
     that each eligible full-time employee may enroll in a plan 
     under this chapter.
       ``(2)(A) A participating non-Federal employer may not offer 
     a health insurance plan to employees (other than a health 
     benefits plan under this chapter) unless such health 
     insurance plan is offered continuously on and after the date 
     of enactment of this chapter.
       ``(B) If a participating non-Federal employer offers 
     coverage under this chapter and under another plan as 
     provided under subparagraph (A), the non-Federal employer--
       ``(i) shall treat all employees in the same manner with 
     respect to such offerings; and
       ``(ii) may not use financial incentives or disincentives to 
     encourage an employee or class of employees to enroll in the 
     health insurance plan not offered under this chapter.''.

[[Page S11579]]

     SEC. 3. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Contract Requirement Under Chapter 89.--Section 8902 of 
     title 5, United States Code, is amended by adding after 
     subsection (o) the following:
       ``(p) Each contract under this chapter shall include a 
     provision that the carrier shall offer any health benefits 
     plan as required under chapter 90A.''.
       (b) Table of Chapters.--The table of chapters for part III 
     of title 5, United States Code, is amended by inserting after 
     the item relating to chapter 90 the following:

``90A. Health Insurance for Non-Federal Employees...........9051''.....

     SEC. 4. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect on the date of enactment of this Act and shall apply 
     to contracts that take effect with respect to calendar year 
     2003 and each calendar year thereafter.
                                 ______