[Congressional Record Volume 149, Number 59 (Friday, April 11, 2003)]
[Senate]
[Pages S5361-S5363]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. STABENOW:
  S. 906. A bill to provide for the certification of programs to 
provide uninsured employees of small business access to health 
coverage, and for other purposes; to the Committee on Finance.
  Ms. STABENOW. Madam President, today I rise to introduce the Health 
Care Access for Small Businesses Act of 2003.
  Last month, thousands of Americans participated in a week-long 
discussion about covering the uninsured. The sheer breadth of the 
groups that participated in the unprecedented effort demonstrates the 
urgency of this issue. Labor unions were united with business groups, 
doctors with nurses, and charity health care providers with for-profit 
hospitals and insurance companies. They all came together to call on 
Congress to find a way to provide health coverage for uninsured 
Americans.
  I was glad to see awareness being raised about who the uninsured are 
and what it means to be without health coverage in America. There is a 
great misconception that uninsured Americans are largely unemployed or 
on Welfare. That is simply not the case. More than 80 percent of 
uninsured Americans are part of working families, and almost half work 
for small businesses. If we can help small businesses cover their 
employees, we will have made great progress in covering the uninsured.
  The bill I am introducing today is aimed at making coverage more 
affordable for employees of small businesses through what is called a 
``three-share'' program. The three-share model is an innovative 
community-based idea that has been working across the U.S. from 
California to Arkansas to North Carolina; and of course in Michigan.
  The name three-share stems from the program's payment structure. 
Premiums are shared between the employer who pays 30 percent, the 
employee who pays 30 percent and the community which covers the 
remaining 40 percent of the cost.
  In a three share model, a non-profit or local government entity 
serves as the manager of the plan. They design a benefit package by 
negotiating directly with providers or contracting through an insurance 
company. Then, they recruit small businesses that have not offered 
insurance coverage to their employees for the past year. The average 
cost for coverage is about $1,800 per year, much lower than the 
national average for commercial insurance, which on average costs 
$3,500 for a single person and $8,500 for a family. Of the $1,800, the 
employer and employee would each pay approximately $540 and the 
community would pay about $720.
  Different three share plans have received funds for the community 
portion from various places. In Michigan, most of the money has come 
from Medicaid funds. A plan in California uses money from the tobacco 
settlement while a plan in Arkansas raises funds through church events 
and other community initiatives.
  Unfortunately, despite the nuances that distinguish three share plans 
from one another, they all share a common challenge: they all lack a 
stable and sustainable funding source for the community share.
  If passed, my bill would help alleviate that problem by offering a 
refundable tax credit to small businesses who participate in three 
share plans. Businesses would pay their own share plus the community 
share up front and receive the community share back through a 
refundable tax credit.
  My bill would also encourage the development of more three share 
plans by providing seed money through the Community Access Program at 
the Health Resources Services Administration.
  This bill would maintain the current employer-based system and 
leverage every $1 of public money with $2 of private funds. It would 
not impose any new funding mandates on state or local governments nor 
would it create new bureaucracy. It is an innovative community-based 
approach that could work throughout the country if funding is 
available.
  Insuring more working families will also take the pressure off state 
Medicaid budgets. Adequate care for those presently uninsured will also 
help slash the billions we wind up spending on uncompensated care.
  Finally, I believe providing health care for these families fulfills 
a moral commitment. No one in America who gets up in the morning and 
goes to work should go to sleep at night fearful that an illness or 
injury in the family could wipe out everything they have worked for.
  I ask unanimous consent that the text of the bill and a fact sheet be 
printed in the Record.
  There being no objeciton, the material was ordered to be printed in 
the Record, as follows:

                                 S. 906

       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 ``Health Care Access for Small 
     Businesses Act of 2003''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) For most of the past 16 years, the number of Americans 
     without health insurance has been on the rise, reaching more 
     than 41,000,000 in 2002.
       (2) People without health insurance are less likely to get 
     preventive care and often delay or forgo needed care. They 
     are therefore more likely than those with health insurance to 
     be hospitalized for conditions that could have been avoided.
       (3) Not only are the health and financial circumstances of 
     uninsured Americans adversely affected by the lack of health 
     insurance, their care is ultimately being paid for in the 
     least efficient manner: after they get sick.
       (4) People who were uninsured during any part of 2001 
     received $99,000,000,000 in care, of which $34,500,000,000 
     was not paid for either out of pocket or by a private or 
     public insurance source. Federal, State, and local 
     governments covered 85 percent of such uncompensated care, 
     amounting to $30,000,000,000.
       (5) Private health insurance enrollees also help pay for 
     uncompensated care through higher premiums.
       (6) Covering more Americans will not only contribute to 
     better overall health, it will lower the amount of health 
     care costs assumed by taxpayers, businesses, and consumers.
       (7) Helping small businesses gain access to affordable 
     health care benefits is essential to insuring more Americans.
       (8) Eighty-two percent of uninsured people are part of 
     working families.
       (9) More than \1/2\ of small businesses with less than 50 
     employees do not offer their employees health insurance.
       (10) Innovative community-based solutions have developed 
     and should serve as a model for insuring more Americans.

     SEC. 3. THREE-SHARE PROGRAMS.

       The Social Security Act (42 U.S.C. 301 et seq.) is amended 
     by adding at the end the following:

               ``TITLE XXII--PROVIDING FOR THE UNINSURED

     ``SEC. 2201. THREE-SHARE PROGRAMS.

       ``(a) Certification.--
       ``(1) In general.--The Secretary, acting through the 
     Administrator, shall promulgate regulations for the 
     certification of three-share programs for purposes of section 
     36 of the Internal Revenue Code.

[[Page S5362]]

       ``(2) Three-share program requirements.--
       ``(A) In general.--The Administrator shall require, for 
     purposes of a certification under regulations under paragraph 
     (1) that each three-share program shall--
       ``(i) be either a non-profit or local governmental entity;
       ``(ii) define a region in which such program will provide 
     services;
       ``(iii) have the capacity to carry out administrative 
     functions of managing health plans, including monthly 
     billings, verification/enrollment of eligible employers and 
     employees, maintenance of membership rosters, development of 
     member materials (such as handbooks and identification 
     cards), customer service, and claims processing; and
       ``(iv) have community involvement, as determined by the 
     Administrator.
       ``(B) Payment.--To obtain the certification described in 
     paragraph (1), a three-share program shall pay the costs of 
     services provided under subparagraph (A)(ii) by charging a 
     monthly premium for each covered individual to be divided as 
     follows:
       ``(i) Not more than thirty percent of such fee shall be 
     paid by a qualified employee desiring coverage under the 
     three-share program.
       ``(ii) At least seventy percent of such fee shall be paid 
     by the qualified employer of such a qualified employee.
       ``(3) Coverage.--
       ``(A) In general.--To obtain the certification described in 
     paragraph (1) a 3-share program shall provide at least the 
     following benefits:
       ``(i) Physicians services.
       ``(ii) In-patient hospital services.
       ``(iii) Out-patient services.
       ``(iv) Emergency room visits.
       ``(v) Emergency ambulance services.
       ``(vi) Diagnostic lab fees and x-rays.
       ``(vii) Prescription drug benefits.
       ``(B) Limitation.--Nothing in subparagraph (A) shall be 
     construed to require that a three-share program provide 
     coverage for services performed outside the region described 
     in paragraph (2)(A)(i).
       ``(C) Preexisting conditions.--A program described in 
     subparagraph (A) shall not be eligible for certification 
     under paragraph (1) if any individual can be excluded from 
     coverage under such program because of a preexisting health 
     condition.
       ``(b) Startup Grants for Three-Share Programs.--
       ``(1) Establishment.--The Administrator may award startup 
     grants to eligible entities to establish three-share programs 
     for certification under subsection (a).
       ``(2) Three-share program plan.--Each entity desiring a 
     grant under this subsection shall develop a plan for the 
     establishment and operation of a three-share program that 
     meets the requirements of paragraphs (2) and (3) of 
     subsection (a).
       ``(3) Application.--Each entity desiring a grant under this 
     subsection shall submit an application to the Administrator 
     at such time, in such manner and containing such information 
     as the Administrator may require, including--
       ``(A) the three-share program plan described in paragraph 
     (2); and
       ``(B) an assurance that the eligible entity will--
       ``(i) determine a benefit package;
       ``(ii) recruit businesses and employees for the three-share 
     program;
       ``(iii) build and manage a network of health providers or 
     contract with an existing network or licensed insurance 
     provider; and
       ``(iv) manage all administrative needs.
       ``(4) Number of grants.--An eligible entity may receive 
     only 1 grant under this subsection for each three-share 
     program and may not receive a grant for such program under 
     both this subsection and subsection (c).
       ``(c) Grants for Existing Three-Share Programs To Meet 
     Certification Requirements.--
       ``(1) In general.--The Administrator may award grants to 
     three-share programs that are operating on the date of 
     enactment of this section, to assist such programs in meeting 
     the certification requirements of subsection (a).
       ``(2) Number of grants.--An eligible entity may receive 
     only 1 grant under this subsection for a three-share program 
     and may not receive a grant for such program under both this 
     subsection and subsection (b).
       ``(3) Application.--Each eligible entity desiring a grant 
     under this subsection shall submit an application to the 
     Administrator at such time, in such manner, and containing 
     such information as the Administrator may require.
       ``(d) Risk Pool Grants.--
       ``(1) In general.--The Administrator may award grants to 
     eligible entities administering certified three-share 
     programs to enhance the risk pools of such programs.
       ``(2) Number of grants.--An eligible entity administering a 
     three-share program described in paragraph (1) may receive 
     only 1 grant under this subsection for such three-share 
     program.
       ``(3) Application.--Each eligible entity desiring a grant 
     under this subsection shall submit an application to the 
     Administrator at such time, in such manner, and containing 
     such information as the Administrator may require.
       ``(e) Application of State Laws.--Nothing in this Act shall 
     be construed to preempt State law.
       ``(f) Distressed business formula.--
       ``(1) In general.--Not later than 60 days after the date of 
     enactment of this section, the Administrator of the Health 
     Resources and Services Administration shall develop a formula 
     to determine which businesses qualify as distressed 
     businesses for purposes of this Act.
       ``(2) Effect on insurance market.--Granting eligibility to 
     a distressed business using the formula under paragraph (1) 
     shall not interfere with the insurance market. Any business 
     found to have reduced benefits to qualify as a distressed 
     business under the formula under paragraph (1) shall not be 
     eligible for any three-share program certified pursuant to 
     this section.
       ``(g) Definitions.--In this section:
       ``(1) Administrator.--The term `Administrator' means the 
     Administrator of the Health Resources and Services 
     Administration.
       ``(2) Covered individual.--The term `covered individual' 
     means--
       ``(A) a qualified employee; or
       ``(B) a child under the age of 23 or a spouse of such 
     qualified employee who--
       ``(i) lacks access to health care coverage through their 
     employment or employer;
       ``(ii) lacks access to health coverage through a family 
     member;
       ``(iii) is not eligible for coverage under the medicare 
     program under title XVIII or the medicaid program under title 
     XIX; and
       ``(iv) does not qualify for benefits under the State 
     Children's Health Insurance Program under title XXI.
       ``(3) Distressed business.--The term `distressed business' 
     means a business that--
       ``(A) in light of economic hardship and rising health care 
     premiums may be forced to discontinue or scale back its 
     health care coverage; and
       ``(B) qualifies as a distressed business according to the 
     formula under subsection (f).
       ``(4) Eligible entity.--The term `eligible entity' means an 
     entity that meets the requirements of subsection (a)(2)(A).
       ``(5) Full time.--The term `full time', for purposes of 
     employment, means regularly working at least 35 hours per 
     week.
       ``(6) Qualified employee.--The term `qualified employee' 
     means any individual employed by a qualified employer who 
     meets certain criteria including--
       ``(A) working full time;
       ``(B) lacking access to health coverage through a family 
     member or common law partner;
       ``(C) not being eligible for coverage under the medicare 
     program under title XVIII or the medicaid program under title 
     XIX; and
       ``(D) agreeing that the share of fees described in 
     subsection (a)(2)(B)(i) shall be paid in the form of payroll 
     deductions from the wages of such individual.
       ``(7) Qualified employer.--The term `qualified employer' 
     means an employer as defined in section 3(d) of the Fair 
     Labor Standards Act of 1938 (29 U.S.C. 203(d)) who--
       ``(A) is a small business concern as defined in section 
     3(a) of the Small Business Act (15 U.S.C. 632);
       ``(B) is located in the region described in subsection 
     (a)(2)(A)(i); and
       ``(C) has not contributed to the health care benefits of 
     its employees for at least 12 months consecutively or 
     currently provides insurance but is classified as a 
     distressed business.
       ``(h) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $50,000,000 for fiscal year 2004 and such sums as may be 
     necessary for each subsequent fiscal year.''.

     SEC. 4. REFUNDABLE CREDIT FOR PORTION OF EMPLOYER COSTS OF 
                   THREE-SHARE PROGRAM.

       (a) In General.--Subpart C of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     refundable credits) is amended by redesignating section 36 as 
     section 37 and inserting after section 35 the following new 
     section:

     ``SEC. 36. EMPLOYER COSTS OF THREE-SHARE PROGRAM.

       ``(a) In General.--In the case of an eligible employer, 
     there shall be allowed as a credit against the tax imposed by 
     this subtitle an amount equal to 40 percent of the costs of a 
     three-share program resulting from the participation of the 
     taxpayer in such program during the taxable year.
       ``(b) Eligible Employer.--For purposes of this section, the 
     term `eligible employer' means any employer which pays or 
     incurs at least 70 percent of the costs of a three-share 
     program resulting from the participation of the taxpayer in 
     such program during the taxable year.
       ``(c) Three-Share Program.--For purposes of this section, 
     the term `three-share program' means an employee health care 
     coverage program approved for participation by an eligible 
     employer pursuant to title XXII of the Social Security Act.
       ``(d) Denial of Double Benefit.--No deduction or credit 
     under any other provision of this chapter shall be allowed 
     with respect to costs of a three-share program taken into 
     account under subsection (a).
       ``(e) Advanced Refundability.--The Secretary shall provide 
     for the advanced refundability of the credit allowed under 
     this section to be made in quarterly payments to taxpayers 
     providing such information as the Secretary requires in order 
     to make a proper determination of such payments.
       ``(f) Regulations.--The Secretary may prescribe such 
     regulations and other guidance as may be necessary or 
     appropriate to carry out this section.''.
       (b) Conforming Amendments.--

[[Page S5363]]

       (1) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting before the period ``, or 
     from section 36 of such Code''.
       (2) The table of sections for subpart C of part IV of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     striking the last item and inserting the following new items:

``Sec. 36. Employer costs of three-share program.
``Sec. 37. Overpayments of tax.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                  ____


          Health Care Access for Small Businesses Act of 2003

       Creating affordable health insurance for small businesses 
     is key to reducing the number of uninsured Americans. Dozens 
     of communities around the country, using seed money from a 
     federal grant program called the Community Access Program 
     (CAP), have developed and implemented a unique way to make 
     health coverage affordable to small businesses through 
     ``three-share'' programs.


                          three-share programs

       A three-share program is a community-based health plan that 
     is paid for jointly by the employer, employee and the 
     community.
       Under a typical three-share model, a community-based 
     entity, either a non-profit or local government does the 
     following:
       1. Works with local health care providers or an insurance 
     entity to develop a benefit package;
       2. Signs up small businesses in the community that do not 
     offer health insurance to their employees; and
       3. Takes responsibility for administering the program.
       An enrolled small business and their employees each pay 30 
     percent of the monthly premium while the community pays the 
     remaining 40 percent.
       thousands of Americans who previously went without health 
     insurance are now covered through three-share programs. 
     Unfortunately, entities managing these programs are 
     struggling to secure a steady revenue source for the 
     community share of the costs.


      The Health Insurance Access for Small Businesses Act of 2003

       The Health Insurance Access for Small Businesses Act of 
     2003 encourages the development of more three-share programs 
     by increasing seed money for non-profits or local governments 
     interested in creating a program in their community. The bill 
     provides sustainable funding for the community share if the 
     costs through a refundable tax credit for small businesses.
       Expand seed funding for three-share through Community 
     Access Program (CAP)--CAP is a grant program designed to help 
     communities expand coverage to the uninsured that has helped 
     many non-profits and local governments start three-share 
     programs. Funding is authorized to increase by $50 million 
     for FY04.
       Refundable tax credit for the community portion--This bill 
     will establish a steady revenue stream for the third share 
     through a refundable tax credit to the employer. The employee 
     would pay 30 percent of the premium through payroll 
     deductions. The employer would pay their 30 percent of the 
     premium plus the 40 percent that is the community share. The 
     40 percent would be returned to the business through a 
     refundable tax credit.


                               Specifics

       Target group: Small businesses not currently offering 
     health coverage to employees or distressed small businesses, 
     as defined by the Small Business Act, that are in jeopardy of 
     dropping health coverage because of rising premiums and 
     economic hardship.
       Employer Eligibility:
       Located within a community defined by the administering 
     entity
       Has not offered or contributed to health care benefits of 
     employees for previous 12 consecutive months
       Qualifies as a ``distressed business'' under HRSA 
     regulations.
       Employee Eligibility:
       Works full time (a minimum of 35 hours);
       Lacks access to health coverage through employer;
       Lacks access to health coverage through a family member or 
     common law partner;
       Is not eligible for Medicaid or Medicare;
       Agrees to payroll deductions.
       Family Eligibility:
       Spouse of participating employee not covered through their 
     employer or any public insurance program;
       Dependent of participating employee under the age of 23 not 
     eligible for SCHIP.
       Shared Premiums: Average benefit is estimated to be $540 
     per year for an employee, $540 for employer and $720 will be 
     refunded through the tax credit to the employer.
       Employer pays 30 percent of annual cost;
       Employee pays 30 percent of annual cost;
       Refundable tax credit to employer for 40 percent of the 
     total annual cost.
       Minimum Benefits: All benefit packages must include the 
     following:
       Physicians services;
       In-patient hospital services;
       Out-patient services;
       Emergency room visits;
       Emergency ambulance services;
       Diagnostic lab and x-rays;
       Prescription drug benefits.
       Note.--People may not be excluded because of pre-existing 
     conditions. Coverage for services performed outside 
     designated regional area not required.
                                 ______