[Congressional Record Volume 149, Number 91 (Thursday, June 19, 2003)]
[House]
[Pages H5597-H5638]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMALL BUSINESS HEALTH FAIRNESS ACT OF 2003
Mr. BOEHNER. Madam Speaker, pursuant to House Resolution 283, I call
up the bill (H.R. 660) to amend title I of the Employee Retirement
Income Security Act of 1974 to improve access and choice for
entrepreneurs with small businesses with respect to medical care for
their employees, and ask for its immediate consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 283, the bill
is considered read for amendment.
The text of H.R. 660 is as follows:
[[Page H5598]]
H.R. 660
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Small
Business Health Fairness Act of 2003''.
(b) Table of Contents.--The table of contents is as
follows:
Sec. 1. Short title and table of contents.
Sec. 2. Rules governing association health plans.
``Part 8--Rules Governing Association Health Plans
``Sec. 801. Association health plans.
``Sec. 802. Certification of association health plans.
``Sec. 803. Requirements relating to sponsors and boards of trustees.
``Sec. 804. Participation and coverage requirements.
``Sec. 805. Other requirements relating to plan documents, contribution
rates, and benefit options.
``Sec. 806. Maintenance of reserves and provisions for solvency for
plans providing health benefits in addition to health
insurance coverage.
``Sec. 807. Requirements for application and related requirements.
``Sec. 808. Notice requirements for voluntary termination.
``Sec. 809. Corrective actions and mandatory termination.
``Sec. 810. Trusteeship by the Secretary of insolvent association
health plans providing health benefits in addition to
health insurance coverage.
``Sec. 811. State assessment authority.
``Sec. 812. Definitions and rules of construction.
Sec. 3. Clarification of treatment of single employer arrangements.
Sec. 4. Clarification of treatment of certain collectively bargained
arrangements.
Sec. 5. Enforcement provisions relating to association health plans.
Sec. 6. Cooperation between Federal and State authorities.
Sec. 7. Effective date and transitional and other rules.
SEC. 2. RULES GOVERNING ASSOCIATION HEALTH PLANS.
(a) In General.--Subtitle B of title I of the Employee
Retirement Income Security Act of 1974 is amended by adding
after part 7 the following new part:
``Part 8--Rules Governing Association Health Plans
``SEC. 801. ASSOCIATION HEALTH PLANS.
``(a) In General.--For purposes of this part, the term
`association health plan' means a group health plan whose
sponsor is (or is deemed under this part to be) described in
subsection (b).
``(b) Sponsorship.--The sponsor of a group health plan is
described in this subsection if such sponsor--
``(1) is organized and maintained in good faith, with a
constitution and bylaws specifically stating its purpose and
providing for periodic meetings on at least an annual basis,
as a bona fide trade association, a bona fide industry
association (including a rural electric cooperative
association or a rural telephone cooperative association), a
bona fide professional association, or a bona fide chamber of
commerce (or similar bona fide business association,
including a corporation or similar organization that operates
on a cooperative basis (within the meaning of section 1381 of
the Internal Revenue Code of 1986)), for substantial purposes
other than that of obtaining or providing medical care;
``(2) is established as a permanent entity which receives
the active support of its members and requires for membership
payment on a periodic basis of dues or payments necessary to
maintain eligibility for membership in the sponsor; and
``(3) does not condition membership, such dues or payments,
or coverage under the plan on the basis of health status-
related factors with respect to the employees of its members
(or affiliated members), or the dependents of such employees,
and does not condition such dues or payments on the basis of
group health plan participation.
Any sponsor consisting of an association of entities which
meet the requirements of paragraphs (1), (2), and (3) shall
be deemed to be a sponsor described in this subsection.
``SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.
``(a) In General.--The applicable authority shall prescribe
by regulation, through negotiated rulemaking, a procedure
under which, subject to subsection (b), the applicable
authority shall certify association health plans which apply
for certification as meeting the requirements of this part.
``(b) Standards.--Under the procedure prescribed pursuant
to subsection (a), in the case of an association health plan
that provides at least one benefit option which does not
consist of health insurance coverage, the applicable
authority shall certify such plan as meeting the requirements
of this part only if the applicable authority is satisfied
that the applicable requirements of this part are met (or,
upon the date on which the plan is to commence operations,
will be met) with respect to the plan.
``(c) Requirements Applicable to Certified Plans.--An
association health plan with respect to which certification
under this part is in effect shall meet the applicable
requirements of this part, effective on the date of
certification (or, if later, on the date on which the plan is
to commence operations).
``(d) Requirements for Continued Certification.--The
applicable authority may provide by regulation, through
negotiated rulemaking, for continued certification of
association health plans under this part.
``(e) Class Certification for Fully Insured Plans.--The
applicable authority shall establish a class certification
procedure for association health plans under which all
benefits consist of health insurance coverage. Under such
procedure, the applicable authority shall provide for the
granting of certification under this part to the plans in
each class of such association health plans upon appropriate
filing under such procedure in connection with plans in such
class and payment of the prescribed fee under section 807(a).
``(f) Certification of Self-Insured Association Health
Plans.--An association health plan which offers one or more
benefit options which do not consist of health insurance
coverage may be certified under this part only if such
plan consists of any of the following:
``(1) a plan which offered such coverage on the date of the
enactment of the Small Business Health Fairness Act of 2003,
``(2) a plan under which the sponsor does not restrict
membership to one or more trades and businesses or industries
and whose eligible participating employers represent a broad
cross-section of trades and businesses or industries, or
``(3) a plan whose eligible participating employers
represent one or more trades or businesses, or one or more
industries, consisting of any of the following: agriculture;
equipment and automobile dealerships; barbering and
cosmetology; certified public accounting practices; child
care; construction; dance, theatrical and orchestra
productions; disinfecting and pest control; financial
services; fishing; foodservice establishments; hospitals;
labor organizations; logging; manufacturing (metals); mining;
medical and dental practices; medical laboratories;
professional consulting services; sanitary services;
transportation (local and freight); warehousing; wholesaling/
distributing; or any other trade or business or industry
which has been indicated as having average or above-average
risk or health claims experience by reason of State rate
filings, denials of coverage, proposed premium rate levels,
or other means demonstrated by such plan in accordance with
regulations which the Secretary shall prescribe through
negotiated rulemaking.
``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF
TRUSTEES.
``(a) Sponsor.--The requirements of this subsection are met
with respect to an association health plan if the sponsor has
met (or is deemed under this part to have met) the
requirements of section 801(b) for a continuous period of not
less than 3 years ending with the date of the application for
certification under this part.
``(b) Board of Trustees.--The requirements of this
subsection are met with respect to an association health plan
if the following requirements are met:
``(1) Fiscal control.--The plan is operated, pursuant to a
trust agreement, by a board of trustees which has complete
fiscal control over the plan and which is responsible for all
operations of the plan.
``(2) Rules of operation and financial controls.--The board
of trustees has in effect rules of operation and financial
controls, based on a 3-year plan of operation, adequate to
carry out the terms of the plan and to meet all requirements
of this title applicable to the plan.
``(3) Rules governing relationship to participating
employers and to contractors.--
``(A) In general.--Except as provided in subparagraphs (B)
and (C), the members of the board of trustees are individuals
selected from individuals who are the owners, officers,
directors, or employees of the participating employers or who
are partners in the participating employers and actively
participate in the business.
``(B) Limitation.--
``(i) General rule.--Except as provided in clauses (ii) and
(iii), no such member is an owner, officer, director, or
employee of, or partner in, a contract administrator or other
service provider to the plan.
``(ii) Limited exception for providers of services solely
on behalf of the sponsor.--Officers or employees of a sponsor
which is a service provider (other than a contract
administrator) to the plan may be members of the board if
they constitute not more than 25 percent of the membership of
the board and they do not provide services to the plan other
than on behalf of the sponsor.
``(iii) Treatment of providers of medical care.--In the
case of a sponsor which is an association whose membership
consists primarily of providers of medical care, clause (i)
shall not apply in the case of any service provider described
in subparagraph (A) who is a provider of medical care under
the plan.
``(C) Certain plans excluded.--Subparagraph (A) shall not
apply to an association health plan which is in existence on
the date of the enactment of the Small Business Health
Fairness Act of 2003.
[[Page H5599]]
``(D) Sole authority.--The board has sole authority under
the plan to approve applications for participation in the
plan and to contract with a service provider to administer
the day-to-day affairs of the plan.
``(c) Treatment of Franchise Networks.--In the case of a
group health plan which is established and maintained by a
franchiser for a franchise network consisting of its
franchisees--
``(1) the requirements of subsection (a) and section
801(a)(1) shall be deemed met if such requirements would
otherwise be met if the franchiser were deemed to be the
sponsor referred to in section 801(b), such network were
deemed to be an association described in section 801(b), and
each franchisee were deemed to be a member (of the
association and the sponsor) referred to in section 801(b);
and
``(2) the requirements of section 804(a)(1) shall be deemed
met.
The Secretary may by regulation, through negotiated
rulemaking, define for purposes of this subsection the terms
`franchiser', `franchise network', and `franchisee'.
``(d) Certain Collectively Bargained Plans.--
``(1) In general.--In the case of a group health plan
described in paragraph (2)--
``(A) the requirements of subsection (a) and section
801(a)(1) shall be deemed met;
``(B) the joint board of trustees shall be deemed a board
of trustees with respect to which the requirements of
subsection (b) are met; and
``(C) the requirements of section 804 shall be deemed met.
``(2) Requirements.--A group health plan is described in
this paragraph if--
``(A) the plan is a multiemployer plan; or
``(B) the plan is in existence on April 1, 2003, and would
be described in section 3(40)(A)(i) but solely for the
failure to meet the requirements of section 3(40)(C)(ii).
``(3) Construction.--A group health plan described in
paragraph (2) shall only be treated as an association health
plan under this part if the sponsor of the plan applies for,
and obtains, certification of the plan as an association
health plan under this part.
``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.
``(a) Covered Employers and Individuals.--The requirements
of this subsection are met with respect to an association
health plan if, under the terms of the plan--
``(1) each participating employer must be--
``(A) a member of the sponsor,
``(B) the sponsor, or
``(C) an affiliated member of the sponsor with respect to
which the requirements of subsection (b) are met,
except that, in the case of a sponsor which is a professional
association or other individual-based association, if at
least one of the officers, directors, or employees of an
employer, or at least one of the individuals who are partners
in an employer and who actively participates in the business,
is a member or such an affiliated member of the sponsor,
participating employers may also include such employer; and
``(2) all individuals commencing coverage under the plan
after certification under this part must be--
``(A) active or retired owners (including self-employed
individuals), officers, directors, or employees of, or
partners in, participating employers; or
``(B) the beneficiaries of individuals described in
subparagraph (A).
``(b) Coverage of Previously Uninsured Employees.--In the
case of an association health plan in existence on the date
of the enactment of the Small Business Health Fairness Act of
2003, an affiliated member of the sponsor of the plan may be
offered coverage under the plan as a participating employer
only if--
``(1) the affiliated member was an affiliated member on the
date of certification under this part; or
``(2) during the 12-month period preceding the date of the
offering of such coverage, the affiliated member has not
maintained or contributed to a group health plan with respect
to any of its employees who would otherwise be eligible to
participate in such association health plan.
``(c) Individual Market Unaffected.--The requirements of
this subsection are met with respect to an association health
plan if, under the terms of the plan, no participating
employer may provide health insurance coverage in the
individual market for any employee not covered under the plan
which is similar to the coverage contemporaneously provided
to employees of the employer under the plan, if such
exclusion of the employee from coverage under the plan is
based on a health status-related factor with respect to the
employee and such employee would, but for such exclusion on
such basis, be eligible for coverage under the plan.
``(d) Prohibition of Discrimination Against Employers and
Employees Eligible To Participate.--The requirements of this
subsection are met with respect to an association health plan
if--
``(1) under the terms of the plan, all employers meeting
the preceding requirements of this section are eligible to
qualify as participating employers for all geographically
available coverage options, unless, in the case of any such
employer, participation or contribution requirements of the
type referred to in section 2711 of the Public Health Service
Act are not met;
``(2) upon request, any employer eligible to participate is
furnished information regarding all coverage options
available under the plan; and
``(3) the applicable requirements of sections 701, 702, and
703 are met with respect to the plan.
``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS,
CONTRIBUTION RATES, AND BENEFIT OPTIONS.
``(a) In General.--The requirements of this section are met
with respect to an association health plan if the following
requirements are met:
``(1) Contents of governing instruments.--The instruments
governing the plan include a written instrument, meeting the
requirements of an instrument required under section
402(a)(1), which--
``(A) provides that the board of trustees serves as the
named fiduciary required for plans under section 402(a)(1)
and serves in the capacity of a plan administrator (referred
to in section 3(16)(A));
``(B) provides that the sponsor of the plan is to serve as
plan sponsor (referred to in section 3(16)(B)); and
``(C) incorporates the requirements of section 806.
``(2) Contribution rates must be nondiscriminatory.--
``(A) The contribution rates for any participating small
employer do not vary on the basis of any health status-
related factor in relation to employees of such employer or
their beneficiaries and do not vary on the basis of the type
of business or industry in which such employer is engaged.
``(B) Nothing in this title or any other provision of law
shall be construed to preclude an association health plan, or
a health insurance issuer offering health insurance coverage
in connection with an association health plan, from--
``(i) setting contribution rates based on the claims
experience of the plan; or
``(ii) varying contribution rates for small employers in a
State to the extent that such rates could vary using the same
methodology employed in such State for regulating premium
rates in the small group market with respect to health
insurance coverage offered in connection with bona fide
associations (within the meaning of section 2791(d)(3) of the
Public Health Service Act),
subject to the requirements of section 702(b) relating to
contribution rates.
``(3) Floor for number of covered individuals with respect
to certain plans.--If any benefit option under the plan does
not consist of health insurance coverage, the plan has as of
the beginning of the plan year not fewer than 1,000
participants and beneficiaries.
``(4) Marketing requirements.--
``(A) In general.--If a benefit option which consists of
health insurance coverage is offered under the plan, State-
licensed insurance agents shall be used to distribute to
small employers coverage which does not consist of health
insurance coverage in a manner comparable to the manner in
which such agents are used to distribute health insurance
coverage.
``(B) State-licensed insurance agents.--For purposes of
subparagraph (A), the term `State-licensed insurance agents'
means one or more agents who are licensed in a State and are
subject to the laws of such State relating to licensure,
qualification, testing, examination, and continuing education
of persons authorized to offer, sell, or solicit health
insurance coverage in such State.
``(5) Regulatory requirements.--Such other requirements as
the applicable authority determines are necessary to carry
out the purposes of this part, which shall be prescribed by
the applicable authority by regulation through negotiated
rulemaking.
``(b) Ability of Association Health Plans To Design Benefit
Options.--Subject to section 514(d), nothing in this part or
any provision of State law (as defined in section 514(c)(1))
shall be construed to preclude an association health plan, or
a health insurance issuer offering health insurance coverage
in connection with an association health plan, from
exercising its sole discretion in selecting the specific
items and services consisting of medical care to be included
as benefits under such plan or coverage, except (subject to
section 514) in the case of any law to the extent that it (1)
prohibits an exclusion of a specific disease from such
coverage, or (2) is not preempted under section 731(a)(1)
with respect to matters governed by section 711 or 712.
``SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR
SOLVENCY FOR PLANS PROVIDING HEALTH BENEFITS IN
ADDITION TO HEALTH INSURANCE COVERAGE.
``(a) In General.--The requirements of this section are met
with respect to an association health plan if--
``(1) the benefits under the plan consist solely of health
insurance coverage; or
``(2) if the plan provides any additional benefit options
which do not consist of health insurance coverage, the plan--
``(A) establishes and maintains reserves with respect to
such additional benefit options, in amounts recommended by
the qualified actuary, consisting of--
``(i) a reserve sufficient for unearned contributions;
``(ii) a reserve sufficient for benefit liabilities which
have been incurred, which have not been satisfied, and for
which risk of loss has not yet been transferred, and for
expected administrative costs with respect to such benefit
liabilities;
``(iii) a reserve sufficient for any other obligations of
the plan; and
[[Page H5600]]
``(iv) a reserve sufficient for a margin of error and other
fluctuations, taking into account the specific circumstances
of the plan; and
``(B) establishes and maintains aggregate and specific
excess /stop loss insurance and solvency indemnification,
with respect to such additional benefit options for which
risk of loss has not yet been transferred, as follows:
``(i) The plan shall secure aggregate excess /stop loss
insurance for the plan with an attachment point which is not
greater than 125 percent of expected gross annual claims. The
applicable authority may by regulation, through negotiated
rulemaking, provide for upward adjustments in the amount of
such percentage in specified circumstances in which the plan
specifically provides for and maintains reserves in excess of
the amounts required under subparagraph (A).
``(ii) The plan shall secure specific excess /stop loss
insurance for the plan with an attachment point which is at
least equal to an amount recommended by the plan's qualified
actuary. The applicable authority may by regulation, through
negotiated rulemaking, provide for adjustments in the amount
of such insurance in specified circumstances in which the
plan specifically provides for and maintains reserves in
excess of the amounts required under subparagraph (A).
``(iii) The plan shall secure indemnification insurance for
any claims which the plan is unable to satisfy by reason of a
plan termination.
Any regulations prescribed by the applicable authority
pursuant to clause (i) or (ii) of subparagraph (B) may allow
for such adjustments in the required levels of excess /
stop loss insurance as the qualified actuary may
recommend, taking into account the specific circumstances
of the plan.
``(b) Minimum Surplus in Addition to Claims Reserves.--In
the case of any association health plan described in
subsection (a)(2), the requirements of this subsection are
met if the plan establishes and maintains surplus in an
amount at least equal to--
``(1) $500,000, or
``(2) such greater amount (but not greater than $2,000,000)
as may be set forth in regulations prescribed by the
applicable authority through negotiated rulemaking, based on
the level of aggregate and specific excess /stop loss
insurance provided with respect to such plan.
``(c) Additional Requirements.--In the case of any
association health plan described in subsection (a)(2), the
applicable authority may provide such additional requirements
relating to reserves and excess /stop loss insurance as the
applicable authority considers appropriate. Such requirements
may be provided by regulation, through negotiated rulemaking,
with respect to any such plan or any class of such plans.
``(d) Adjustments for Excess /Stop Loss Insurance.--The
applicable authority may provide for adjustments to the
levels of reserves otherwise required under subsections (a)
and (b) with respect to any plan or class of plans to take
into account excess /stop loss insurance provided with
respect to such plan or plans.
``(e) Alternative Means of Compliance.--The applicable
authority may permit an association health plan described in
subsection (a)(2) to substitute, for all or part of the
requirements of this section (except subsection
(a)(2)(B)(iii)), such security, guarantee, hold-harmless
arrangement, or other financial arrangement as the applicable
authority determines to be adequate to enable the plan to
fully meet all its financial obligations on a timely basis
and is otherwise no less protective of the interests of
participants and beneficiaries than the requirements for
which it is substituted. The applicable authority may take
into account, for purposes of this subsection, evidence
provided by the plan or sponsor which demonstrates an
assumption of liability with respect to the plan. Such
evidence may be in the form of a contract of indemnification,
lien, bonding, insurance, letter of credit, recourse under
applicable terms of the plan in the form of assessments of
participating employers, security, or other financial
arrangement.
``(f) Measures To Ensure Continued Payment of Benefits by
Certain Plans in Distress.--
``(1) Payments by certain plans to association health plan
fund.--
``(A) In general.--In the case of an association health
plan described in subsection (a)(2), the requirements of this
subsection are met if the plan makes payments into the
Association Health Plan Fund under this subparagraph when
they are due. Such payments shall consist of annual payments
in the amount of $5,000, and, in addition to such annual
payments, such supplemental payments as the Secretary may
determine to be necessary under paragraph (2). Payments under
this paragraph are payable to the Fund at the time determined
by the Secretary. Initial payments are due in advance of
certification under this part. Payments shall continue to
accrue until a plan's assets are distributed pursuant to a
termination procedure.
``(B) Penalties for failure to make payments.--If any
payment is not made by a plan when it is due, a late payment
charge of not more than 100 percent of the payment which was
not timely paid shall be payable by the plan to the Fund.
``(C) Continued duty of the secretary.--The Secretary shall
not cease to carry out the provisions of paragraph (2) on
account of the failure of a plan to pay any payment when due.
``(2) Payments by secretary to continue excess /stop loss
insurance coverage and indemnification insurance coverage for
certain plans.--In any case in which the applicable authority
determines that there is, or that there is reason to believe
that there will be: (A) a failure to take necessary
corrective actions under section 809(a) with respect to an
association health plan described in subsection (a)(2); or
(B) a termination of such a plan under section 809(b) or
810(b)(8) (and, if the applicable authority is not the
Secretary, certifies such determination to the Secretary),
the Secretary shall determine the amounts necessary to make
payments to an insurer (designated by the Secretary) to
maintain in force excess /stop loss insurance coverage or
indemnification insurance coverage for such plan, if the
Secretary determines that there is a reasonable expectation
that, without such payments, claims would not be satisfied by
reason of termination of such coverage. The Secretary shall,
to the extent provided in advance in appropriation Acts, pay
such amounts so determined to the insurer designated by
the Secretary.
``(3) Association health plan fund.--
``(A) In general.--There is established on the books of the
Treasury a fund to be known as the `Association Health Plan
Fund'. The Fund shall be available for making payments
pursuant to paragraph (2). The Fund shall be credited with
payments received pursuant to paragraph (1)(A), penalties
received pursuant to paragraph (1)(B); and earnings on
investments of amounts of the Fund under subparagraph (B).
``(B) Investment.--Whenever the Secretary determines that
the moneys of the fund are in excess of current needs, the
Secretary may request the investment of such amounts as the
Secretary determines advisable by the Secretary of the
Treasury in obligations issued or guaranteed by the United
States.
``(g) Excess /Stop Loss Insurance.--For purposes of this
section--
``(1) Aggregate excess /stop loss insurance.--The term
`aggregate excess /stop loss insurance' means, in connection
with an association health plan, a contract--
``(A) under which an insurer (meeting such minimum
standards as the applicable authority may prescribe by
regulation through negotiated rulemaking) provides for
payment to the plan with respect to aggregate claims under
the plan in excess of an amount or amounts specified in such
contract;
``(B) which is guaranteed renewable; and
``(C) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(2) Specific excess /stop loss insurance.--The term
`specific excess /stop loss insurance' means, in connection
with an association health plan, a contract--
``(A) under which an insurer (meeting such minimum
standards as the applicable authority may prescribe by
regulation through negotiated rulemaking) provides for
payment to the plan with respect to claims under the plan in
connection with a covered individual in excess of an amount
or amounts specified in such contract in connection with such
covered individual;
``(B) which is guaranteed renewable; and
``(C) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(h) Indemnification Insurance.--For purposes of this
section, the term `indemnification insurance' means, in
connection with an association health plan, a contract--
``(1) under which an insurer (meeting such minimum
standards as the applicable authority may prescribe through
negotiated rulemaking) provides for payment to the plan with
respect to claims under the plan which the plan is unable to
satisfy by reason of a termination pursuant to section 809(b)
(relating to mandatory termination);
``(2) which is guaranteed renewable and noncancellable for
any reason (except as the applicable authority may prescribe
by regulation through negotiated rulemaking); and
``(3) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(i) Reserves.--For purposes of this section, the term
`reserves' means, in connection with an association health
plan, plan assets which meet the fiduciary standards under
part 4 and such additional requirements regarding liquidity
as the applicable authority may prescribe through negotiated
rulemaking.
``(j) Solvency Standards Working Group.--
``(1) In general.--Within 90 days after the date of the
enactment of the Small Business Health Fairness Act of 2003,
the applicable authority shall establish a Solvency Standards
Working Group. In prescribing the initial regulations under
this section, the applicable authority shall take into
account the recommendations of such Working Group.
``(2) Membership.--The Working Group shall consist of not
more than 15 members appointed by the applicable authority.
The applicable authority shall include among persons invited
to membership on the Working Group at least one of each of
the following:
``(A) a representative of the National Association of
Insurance Commissioners;
``(B) a representative of the American Academy of
Actuaries;
``(C) a representative of the State governments, or their
interests;
[[Page H5601]]
``(D) a representative of existing self-insured
arrangements, or their interests;
``(E) a representative of associations of the type referred
to in section 801(b)(1), or their interests; and
``(F) a representative of multiemployer plans that are
group health plans, or their interests.
``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED
REQUIREMENTS.
``(a) Filing Fee.--Under the procedure prescribed pursuant
to section 802(a), an association health plan shall pay to
the applicable authority at the time of filing an application
for certification under this part a filing fee in the amount
of $5,000, which shall be available in the case of the
Secretary, to the extent provided in appropriation Acts, for
the sole purpose of administering the certification
procedures applicable with respect to association health
plans.
``(b) Information To Be Included in Application for
Certification.--An application for certification under this
part meets the requirements of this section only if it
includes, in a manner and form which shall be prescribed by
the applicable authority through negotiated rulemaking, at
least the following information:
``(1) Identifying information.--The names and addresses
of--
``(A) the sponsor; and
``(B) the members of the board of trustees of the plan.
``(2) States in which plan intends to do business.--The
States in which participants and beneficiaries under the plan
are to be located and the number of them expected to be
located in each such State.
``(3) Bonding requirements.--Evidence provided by the board
of trustees that the bonding requirements of section 412 will
be met as of the date of the application or (if later)
commencement of operations.
``(4) Plan documents.--A copy of the documents governing
the plan (including any bylaws and trust agreements), the
summary plan description, and other material describing the
benefits that will be provided to participants and
beneficiaries under the plan.
``(5) Agreements with service providers.--A copy of any
agreements between the plan and contract administrators and
other service providers.
``(6) Funding report.--In the case of association health
plans providing benefits options in addition to health
insurance coverage, a report setting forth information with
respect to such additional benefit options determined as of a
date within the 120-day period ending with the date of the
application, including the following:
``(A) Reserves.--A statement, certified by the board of
trustees of the plan, and a statement of actuarial opinion,
signed by a qualified actuary, that all applicable
requirements of section 806 are or will be met in accordance
with regulations which the applicable authority shall
prescribe through negotiated rulemaking.
``(B) Adequacy of contribution rates.--A statement of
actuarial opinion, signed by a qualified actuary, which sets
forth a description of the extent to which contribution rates
are adequate to provide for the payment of all obligations
and the maintenance of required reserves under the plan for
the 12-month period beginning with such date within such 120-
day period, taking into account the expected coverage and
experience of the plan. If the contribution rates are not
fully adequate, the statement of actuarial opinion shall
indicate the extent to which the rates are inadequate and the
changes needed to ensure adequacy.
``(C) Current and projected value of assets and
liabilities.--A statement of actuarial opinion signed by a
qualified actuary, which sets forth the current value of the
assets and liabilities accumulated under the plan and a
projection of the assets, liabilities, income, and expenses
of the plan for the 12-month period referred to in
subparagraph (B). The income statement shall identify
separately the plan's administrative expenses and claims.
``(D) Costs of coverage to be charged and other expenses.--
A statement of the costs of coverage to be charged, including
an itemization of amounts for administration, reserves, and
other expenses associated with the operation of the plan.
``(E) Other information.--Any other information as may be
determined by the applicable authority, by regulation through
negotiated rulemaking, as necessary to carry out the purposes
of this part.
``(c) Filing Notice of Certification With States.--A
certification granted under this part to an association
health plan shall not be effective unless written notice of
such certification is filed with the applicable State
authority of each State in which at least 25 percent of the
participants and beneficiaries under the plan are located.
For purposes of this subsection, an individual shall be
considered to be located in the State in which a known
address of such individual is located or in which such
individual is employed.
``(d) Notice of Material Changes.--In the case of any
association health plan certified under this part,
descriptions of material changes in any information which was
required to be submitted with the application for the
certification under this part shall be filed in such form and
manner as shall be prescribed by the applicable authority by
regulation through negotiated rulemaking. The applicable
authority may require by regulation, through negotiated
rulemaking, prior notice of material changes with respect to
specified matters which might serve as the basis for
suspension or revocation of the certification.
``(e) Reporting Requirements for Certain Association Health
Plans.--An association health plan certified under this part
which provides benefit options in addition to health
insurance coverage for such plan year shall meet the
requirements of section 503B by filing an annual report under
such section which shall include information described in
subsection (b)(6) with respect to the plan year and,
notwithstanding section 503C(a)(1)(A), shall be filed with
the applicable authority not later than 90 days after the
close of the plan year (or on such later date as may be
prescribed by the applicable authority). The applicable
authority may require by regulation through negotiated
rulemaking such interim reports as it considers appropriate.
``(f) Engagement of Qualified Actuary.--The board of
trustees of each association health plan which provides
benefits options in addition to health insurance coverage and
which is applying for certification under this part or is
certified under this part shall engage, on behalf of all
participants and beneficiaries, a qualified actuary who shall
be responsible for the preparation of the materials
comprising information necessary to be submitted by a
qualified actuary under this part. The qualified actuary
shall utilize such assumptions and techniques as are
necessary to enable such actuary to form an opinion as to
whether the contents of the matters reported under this
part--
``(1) are in the aggregate reasonably related to the
experience of the plan and to reasonable expectations; and
``(2) represent such actuary's best estimate of anticipated
experience under the plan.
The opinion by the qualified actuary shall be made with
respect to, and shall be made a part of, the annual report.
``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.
``Except as provided in section 809(b), an association
health plan which is or has been certified under this part
may terminate (upon or at any time after cessation of
accruals in benefit liabilities) only if the board of
trustees--
``(1) not less than 60 days before the proposed termination
date, provides to the participants and beneficiaries a
written notice of intent to terminate stating that such
termination is intended and the proposed termination date;
``(2) develops a plan for winding up the affairs of the
plan in connection with such termination in a manner which
will result in timely payment of all benefits for which the
plan is obligated; and
``(3) submits such plan in writing to the applicable
authority.
Actions required under this section shall be taken in such
form and manner as may be prescribed by the applicable
authority by regulation through negotiated rulemaking.
``SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.
``(a) Actions To Avoid Depletion of Reserves.--An
association health plan which is certified under this part
and which provides benefits other than health insurance
coverage shall continue to meet the requirements of section
806, irrespective of whether such certification continues in
effect. The board of trustees of such plan shall determine
quarterly whether the requirements of section 806 are met. In
any case in which the board determines that there is reason
to believe that there is or will be a failure to meet such
requirements, or the applicable authority makes such a
determination and so notifies the board, the board shall
immediately notify the qualified actuary engaged by the plan,
and such actuary shall, not later than the end of the next
following month, make such recommendations to the board for
corrective action as the actuary determines necessary to
ensure compliance with section 806. Not later than 30 days
after receiving from the actuary recommendations for
corrective actions, the board shall notify the applicable
authority (in such form and manner as the applicable
authority may prescribe by regulation through negotiated
rulemaking) of such recommendations of the actuary for
corrective action, together with a description of the actions
(if any) that the board has taken or plans to take in
response to such recommendations. The board shall thereafter
report to the applicable authority, in such form and
frequency as the applicable authority may specify to the
board, regarding corrective action taken by the board until
the requirements of section 806 are met.
``(b) Mandatory Termination.--In any case in which--
``(1) the applicable authority has been notified under
subsection (a) of a failure of an association health plan
which is or has been certified under this part and is
described in section 806(a)(2) to meet the requirements of
section 806 and has not been notified by the board of
trustees of the plan that corrective action has restored
compliance with such requirements; and
``(2) the applicable authority determines that there is a
reasonable expectation that the plan will continue to fail to
meet the requirements of section 806,
the board of trustees of the plan shall, at the direction of
the applicable authority, terminate the plan and, in the
course of the termination, take such actions as the
applicable authority may require, including satisfying any
claims referred to in section 806(a)(2)(B)(iii) and
recovering for the plan
[[Page H5602]]
any liability under subsection (a)(2)(B)(iii) or (e) of
section 806, as necessary to ensure that the affairs of the
plan will be, to the maximum extent possible, wound up in a
manner which will result in timely provision of all benefits
for which the plan is obligated.
``SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT
ASSOCIATION HEALTH PLANS PROVIDING HEALTH
BENEFITS IN ADDITION TO HEALTH INSURANCE
COVERAGE.
``(a) Appointment of Secretary as Trustee for Insolvent
Plans.--Whenever the Secretary determines that an association
health plan which is or has been certified under this part
and which is described in section 806(a)(2) will be unable to
provide benefits when due or is otherwise in a financially
hazardous condition, as shall be defined by the Secretary by
regulation through negotiated rulemaking, the Secretary
shall, upon notice to the plan, apply to the appropriate
United States district court for appointment of the Secretary
as trustee to administer the plan for the duration of the
insolvency. The plan may appear as a party and other
interested persons may intervene in the proceedings at the
discretion of the court. The court shall appoint such
Secretary trustee if the court determines that the
trusteeship is necessary to protect the interests of the
participants and beneficiaries or providers of medical care
or to avoid any unreasonable deterioration of the financial
condition of the plan. The trusteeship of such Secretary
shall continue until the conditions described in the first
sentence of this subsection are remedied or the plan is
terminated.
``(b) Powers as Trustee.--The Secretary, upon appointment
as trustee under subsection (a), shall have the power--
``(1) to do any act authorized by the plan, this title, or
other applicable provisions of law to be done by the plan
administrator or any trustee of the plan;
``(2) to require the transfer of all (or any part) of the
assets and records of the plan to the Secretary as trustee;
``(3) to invest any assets of the plan which the Secretary
holds in accordance with the provisions of the plan,
regulations prescribed by the Secretary through negotiated
rulemaking, and applicable provisions of law;
``(4) to require the sponsor, the plan administrator, any
participating employer, and any employee organization
representing plan participants to furnish any information
with respect to the plan which the Secretary as trustee may
reasonably need in order to administer the plan;
``(5) to collect for the plan any amounts due the plan and
to recover reasonable expenses of the trusteeship;
``(6) to commence, prosecute, or defend on behalf of the
plan any suit or proceeding involving the plan;
``(7) to issue, publish, or file such notices, statements,
and reports as may be required by the Secretary by regulation
through negotiated rulemaking or required by any order of the
court;
``(8) to terminate the plan (or provide for its termination
in accordance with section 809(b)) and liquidate the plan
assets, to restore the plan to the responsibility of the
sponsor, or to continue the trusteeship;
``(9) to provide for the enrollment of plan participants
and beneficiaries under appropriate coverage options; and
``(10) to do such other acts as may be necessary to comply
with this title or any order of the court and to protect the
interests of plan participants and beneficiaries and
providers of medical care.
``(c) Notice of Appointment.--As soon as practicable after
the Secretary's appointment as trustee, the Secretary shall
give notice of such appointment to--
``(1) the sponsor and plan administrator;
``(2) each participant;
``(3) each participating employer; and
``(4) if applicable, each employee organization which, for
purposes of collective bargaining, represents plan
participants.
``(d) Additional Duties.--Except to the extent inconsistent
with the provisions of this title, or as may be otherwise
ordered by the court, the Secretary, upon appointment as
trustee under this section, shall be subject to the same
duties as those of a trustee under section 704 of title 11,
United States Code, and shall have the duties of a fiduciary
for purposes of this title.
``(e) Other Proceedings.--An application by the Secretary
under this subsection may be filed notwithstanding the
pendency in the same or any other court of any bankruptcy,
mortgage foreclosure, or equity receivership proceeding, or
any proceeding to reorganize, conserve, or liquidate such
plan or its property, or any proceeding to enforce a lien
against property of the plan.
``(f) Jurisdiction of Court.--
``(1) In general.--Upon the filing of an application for
the appointment as trustee or the issuance of a decree under
this section, the court to which the application is made
shall have exclusive jurisdiction of the plan involved and
its property wherever located with the powers, to the extent
consistent with the purposes of this section, of a court of
the United States having jurisdiction over cases under
chapter 11 of title 11, United States Code. Pending an
adjudication under this section such court shall stay, and
upon appointment by it of the Secretary as trustee, such
court shall continue the stay of, any pending mortgage
foreclosure, equity receivership, or other proceeding to
reorganize, conserve, or liquidate the plan, the sponsor, or
property of such plan or sponsor, and any other suit against
any receiver, conservator, or trustee of the plan, the
sponsor, or property of the plan or sponsor. Pending such
adjudication and upon the appointment by it of the Secretary
as trustee, the court may stay any proceeding to enforce a
lien against property of the plan or the sponsor or any other
suit against the plan or the sponsor.
``(2) Venue.--An action under this section may be brought
in the judicial district where the sponsor or the plan
administrator resides or does business or where any asset of
the plan is situated. A district court in which such action
is brought may issue process with respect to such action in
any other judicial district.
``(g) Personnel.--In accordance with regulations which
shall be prescribed by the Secretary through negotiated
rulemaking, the Secretary shall appoint, retain, and
compensate accountants, actuaries, and other professional
service personnel as may be necessary in connection with the
Secretary's service as trustee under this section.
``SEC. 811. STATE ASSESSMENT AUTHORITY.
``(a) In General.--Notwithstanding section 514, a State may
impose by law a contribution tax on an association health
plan described in section 806(a)(2), if the plan commenced
operations in such State after the date of the enactment of
the Small Business Health Fairness Act of 2003.
``(b) Contribution Tax.--For purposes of this section, the
term `contribution tax' imposed by a State on an association
health plan means any tax imposed by such State if--
``(1) such tax is computed by applying a rate to the amount
of premiums or contributions, with respect to individuals
covered under the plan who are residents of such State, which
are received by the plan from participating employers located
in such State or from such individuals;
``(2) the rate of such tax does not exceed the rate of any
tax imposed by such State on premiums or contributions
received by insurers or health maintenance organizations for
health insurance coverage offered in such State in connection
with a group health plan;
``(3) such tax is otherwise nondiscriminatory; and
``(4) the amount of any such tax assessed on the plan is
reduced by the amount of any tax or assessment otherwise
imposed by the State on premiums, contributions, or both
received by insurers or health maintenance organizations for
health insurance coverage, aggregate excess /stop loss
insurance (as defined in section 806(g)(1)), specific excess
/stop loss insurance (as defined in section 806(g)(2)), other
insurance related to the provision of medical care under the
plan, or any combination thereof provided by such insurers or
health maintenance organizations in such State in connection
with such plan.
``SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION.
``(a) Definitions.--For purposes of this part--
``(1) Group health plan.--The term `group health plan' has
the meaning provided in section 733(a)(1) (after applying
subsection (b) of this section).
``(2) Medical care.--The term `medical care' has the
meaning provided in section 733(a)(2).
``(3) Health insurance coverage.--The term `health
insurance coverage' has the meaning provided in section
733(b)(1).
``(4) Health insurance issuer.--The term `health insurance
issuer' has the meaning provided in section 733(b)(2).
``(5) Applicable authority.--
``(A) In general.--Except as provided in subparagraph (B),
the term `applicable authority' means, in connection with an
association health plan--
``(i) the State recognized pursuant to subsection (c) of
section 506 as the State to which authority has been
delegated in connection with such plan; or
``(ii) if there if no State referred to in clause (i), the
Secretary.
``(B) Exceptions.--
``(i) Joint authorities.--Where such term appears in
section 808(3), section 807(e) (in the first instance),
section 809(a) (in the second instance), section 809(a) (in
the fourth instance), and section 809(b)(1), such term means,
in connection with an association health plan, the Secretary
and the State referred to in subparagraph (A)(i) (if any) in
connection with such plan.
``(ii) Regulatory authorities.--Where such term appears in
section 802(a) (in the first instance), section 802(d),
section 802(e), section 803(d), section 805(a)(5), section
806(a)(2), section 806(b), section 806(c), section 806(d),
paragraphs (1)(A) and (2)(A) of section 806(g), section
806(h), section 806(i), section 806(j), section 807(a) (in
the second instance), section 807(b), section 807(d), section
807(e) (in the second instance), section 808 (in the matter
after paragraph (3)), and section 809(a) (in the third
instance), such term means, in connection with an association
health plan, the Secretary.
``(6) Health status-related factor.--The term `health
status-related factor' has the meaning provided in section
733(d)(2).
``(7) Individual market.--
``(A) In general.--The term `individual market' means the
market for health insurance coverage offered to individuals
other than in connection with a group health plan.
``(B) Treatment of very small groups.--
``(i) In general.--Subject to clause (ii), such term
includes coverage offered in connection with a group health
plan that has
[[Page H5603]]
fewer than 2 participants as current employees or
participants described in section 732(d)(3) on the first day
of the plan year.
``(ii) State exception.--Clause (i) shall not apply in the
case of health insurance coverage offered in a State if such
State regulates the coverage described in such clause in the
same manner and to the same extent as coverage in the small
group market (as defined in section 2791(e)(5) of the Public
Health Service Act) is regulated by such State.
``(8) Participating employer.--The term `participating
employer' means, in connection with an association health
plan, any employer, if any individual who is an employee of
such employer, a partner in such employer, or a self-employed
individual who is such employer (or any dependent, as defined
under the terms of the plan, of such individual) is or was
covered under such plan in connection with the status of such
individual as such an employee, partner, or self-employed
individual in relation to the plan.
``(9) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or
official or officials designated by the State to enforce the
requirements of title XXVII of the Public Health Service Act
for the State involved with respect to such issuer.
``(10) Qualified actuary.--The term `qualified actuary'
means an individual who is a member of the American Academy
of Actuaries or meets such reasonable standards and
qualifications as the Secretary may provide by regulation
through negotiated rulemaking.
``(11) Affiliated member.--The term `affiliated member'
means, in connection with a sponsor--
``(A) a person who is otherwise eligible to be a member of
the sponsor but who elects an affiliated status with the
sponsor,
``(B) in the case of a sponsor with members which consist
of associations, a person who is a member of any such
association and elects an affiliated status with the sponsor,
or
``(C) in the case of an association health plan in
existence on the date of the enactment of the Small Business
Health Fairness Act of 2003, a person eligible to be a member
of the sponsor or one of its member associations.
``(12) Large employer.--The term `large employer' means, in
connection with a group health plan with respect to a plan
year, an employer who employed an average of at least 51
employees on business days during the preceding calendar year
and who employs at least 2 employees on the first day of the
plan year.
``(13) Small employer.--The term `small employer' means, in
connection with a group health plan with respect to a plan
year, an employer who is not a large employer.
``(b) Rules of Construction.--
``(1) Employers and employees.--For purposes of determining
whether a plan, fund, or program is an employee welfare
benefit plan which is an association health plan, and for
purposes of applying this title in connection with such plan,
fund, or program so determined to be such an employee welfare
benefit plan--
``(A) in the case of a partnership, the term `employer' (as
defined in section 3(5)) includes the partnership in relation
to the partners, and the term `employee' (as defined in
section 3(6)) includes any partner in relation to the
partnership; and
``(B) in the case of a self-employed individual, the term
`employer' (as defined in section 3(5)) and the term
`employee' (as defined in section 3(6)) shall include such
individual.
``(2) Plans, funds, and programs treated as employee
welfare benefit plans.--In the case of any plan, fund, or
program which was established or is maintained for the
purpose of providing medical care (through the purchase of
insurance or otherwise) for employees (or their dependents)
covered thereunder and which demonstrates to the Secretary
that all requirements for certification under this part would
be met with respect to such plan, fund, or program if such
plan, fund, or program were a group health plan, such plan,
fund, or program shall be treated for purposes of this title
as an employee welfare benefit plan on and after the date of
such demonstration.''.
(b) Conforming Amendments to Preemption Rules.--
(1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is
amended by adding at the end the following new subparagraph:
``(E) The preceding subparagraphs of this paragraph do not
apply with respect to any State law in the case of an
association health plan which is certified under part 8.''.
(2) Section 514 of such Act (29 U.S.C. 1144) is amended--
(A) in subsection (b)(4), by striking ``Subsection (a)''
and inserting ``Subsections (a) and (e)'';
(B) in subsection (b)(5), by striking ``subsection (a)'' in
subparagraph (A) and inserting ``subsection (a) of this
section and subsections (a)(2)(B) and (b) of section 805'',
and by striking ``subsection (a)'' in subparagraph (B) and
inserting ``subsection (a) of this section or subsection
(a)(2)(B) or (b) of section 805'';
(C) by redesignating subsection (d) as subsection (e); and
(D) by inserting after subsection (c) the following new
subsection:
``(d)(1) Except as provided in subsection (b)(4), the
provisions of this title shall supersede any and all State
laws insofar as they may now or hereafter preclude, or have
the effect of precluding, a health insurance issuer from
offering health insurance coverage in connection with an
association health plan which is certified under part 8.
``(2) Except as provided in paragraphs (4) and (5) of
subsection (b) of this section--
``(A) In any case in which health insurance coverage of any
policy type is offered under an association health plan
certified under part 8 to a participating employer operating
in such State, the provisions of this title shall supersede
any and all laws of such State insofar as they may preclude a
health insurance issuer from offering health insurance
coverage of the same policy type to other employers operating
in the State which are eligible for coverage under such
association health plan, whether or not such other employers
are participating employers in such plan.
``(B) In any case in which health insurance coverage of any
policy type is offered under an association health plan in a
State and the filing, with the applicable State authority, of
the policy form in connection with such policy type is
approved by such State authority, the provisions of this
title shall supersede any and all laws of any other State in
which health insurance coverage of such type is offered,
insofar as they may preclude, upon the filing in the same
form and manner of such policy form with the applicable State
authority in such other State, the approval of the filing in
such other State.
``(3) For additional provisions relating to association
health plans, see subsections (a)(2)(B) and (b) of section
805.
``(4) For purposes of this subsection, the term
`association health plan' has the meaning provided in section
801(a), and the terms `health insurance coverage',
`participating employer', and `health insurance issuer' have
the meanings provided such terms in section 811,
respectively.''.
(3) Section 514(b)(6)(A) of such Act (29 U.S.C.
1144(b)(6)(A)) is amended--
(A) in clause (i)(II), by striking ``and'' at the end;
(B) in clause (ii), by inserting ``and which does not
provide medical care (within the meaning of section
733(a)(2)),'' after ``arrangement,'', and by striking
``title.'' and inserting ``title, and''; and
(C) by adding at the end the following new clause:
``(iii) subject to subparagraph (E), in the case of any
other employee welfare benefit plan which is a multiple
employer welfare arrangement and which provides medical care
(within the meaning of section 733(a)(2)), any law of any
State which regulates insurance may apply.''.
(4) Section 514(e) of such Act (as redesignated by
paragraph (2)(C)) is amended--
(A) by striking ``Nothing'' and inserting ``(1) Except as
provided in paragraph (2), nothing''; and
(B) by adding at the end the following new paragraph:
``(2) Nothing in any other provision of law enacted on or
after the date of the enactment of the Small Business Health
Fairness Act of 2003 shall be construed to alter, amend,
modify, invalidate, impair, or supersede any provision of
this title, except by specific cross-reference to the
affected section.''.
(c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C.
102(16)(B)) is amended by adding at the end the following new
sentence: ``Such term also includes a person serving as the
sponsor of an association health plan under part 8.''.
(d) Disclosure of Solvency Protections Related to Self-
Insured and Fully Insured Options Under Association Health
Plans.--Section 102(b) of such Act (29 U.S.C. 102(b)) is
amended by adding at the end the following: ``An association
health plan shall include in its summary plan description, in
connection with each benefit option, a description of the
form of solvency or guarantee fund protection secured
pursuant to this Act or applicable State law, if any.''.
(e) Savings Clause.--Section 731(c) of such Act is amended
by inserting ``or part 8'' after ``this part''.
(f) Report to the Congress Regarding Certification of Self-
Insured Association Health Plans.--Not later than January 1,
2008, the Secretary of Labor shall report to the Committee on
Education and the Workforce of the House of Representatives
and the Committee on Health, Education, Labor, and Pensions
of the Senate the effect association health plans have had,
if any, on reducing the number of uninsured individuals.
(g) Clerical Amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 is
amended by inserting after the item relating to section 734
the following new items:
``Part 8--Rules Governing Association Health Plans
``Sec. 801. Association health plans.
``Sec. 802. Certification of association health plans.
``Sec. 803. Requirements relating to sponsors and boards of trustees.
``Sec. 804. Participation and coverage requirements.
``Sec. 805. Other requirements relating to plan documents, contribution
rates, and benefit options.
``Sec. 806. Maintenance of reserves and provisions for solvency for
plans providing health benefits in addition to health
insurance coverage.
[[Page H5604]]
``Sec. 807. Requirements for application and related requirements.
``Sec. 808. Notice requirements for voluntary termination.
``Sec. 809. Corrective actions and mandatory termination.
``Sec. 810. Trusteeship by the Secretary of insolvent association
health plans providing health benefits in addition to
health insurance coverage.
``Sec. 811. State assessment authority.
``Sec. 812. Definitions and rules of construction.''.
SEC. 3. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER
ARRANGEMENTS.
Section 3(40)(B) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002(40)(B)) is amended--
(1) in clause (i), by inserting ``for any plan year of any
such plan, or any fiscal year of any such other
arrangement;'' after ``single employer'', and by inserting
``during such year or at any time during the preceding 1-year
period'' after ``control group'';
(2) in clause (iii)--
(A) by striking ``common control shall not be based on an
interest of less than 25 percent'' and inserting ``an
interest of greater than 25 percent may not be required as
the minimum interest necessary for common control''; and
(B) by striking ``similar to'' and inserting ``consistent
and coextensive with'';
(3) by redesignating clauses (iv) and (v) as clauses (v)
and (vi), respectively; and
(4) by inserting after clause (iii) the following new
clause:
``(iv) in determining, after the application of clause (i),
whether benefits are provided to employees of two or more
employers, the arrangement shall be treated as having only
one participating employer if, after the application of
clause (i), the number of individuals who are employees and
former employees of any one participating employer and who
are covered under the arrangement is greater than 75 percent
of the aggregate number of all individuals who are employees
or former employees of participating employers and who are
covered under the arrangement;''.
SEC. 4. CLARIFICATION OF TREATMENT OF CERTAIN COLLECTIVELY
BARGAINED ARRANGEMENTS.
(a) In General.--Section 3(40)(A)(i) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1002(40)(A)(i)) is amended to read as follows:
``(i)(I) under or pursuant to one or more collective
bargaining agreements which are reached pursuant to
collective bargaining described in section 8(d) of the
National Labor Relations Act (29 U.S.C. 158(d)) or paragraph
Fourth of section 2 of the Railway Labor Act (45 U.S.C. 152,
paragraph Fourth) or which are reached pursuant to labor-
management negotiations under similar provisions of State
public employee relations laws, and (II) in accordance with
subparagraphs (C), (D), and (E);''.
(b) Limitations.--Section 3(40) of such Act (29 U.S.C.
1002(40)) is amended by adding at the end the following new
subparagraphs:
``(C) For purposes of subparagraph (A)(i)(II), a plan or
other arrangement shall be treated as established or
maintained in accordance with this subparagraph only if
the following requirements are met:
``(i) The plan or other arrangement, and the employee
organization or any other entity sponsoring the plan or other
arrangement, do not--
``(I) utilize the services of any licensed insurance agent
or broker for soliciting or enrolling employers or
individuals as participating employers or covered individuals
under the plan or other arrangement; or
``(II) pay any type of compensation to a person, other than
a full time employee of the employee organization (or a
member of the organization to the extent provided in
regulations prescribed by the Secretary through negotiated
rulemaking), that is related either to the volume or number
of employers or individuals solicited or enrolled as
participating employers or covered individuals under the plan
or other arrangement, or to the dollar amount or size of the
contributions made by participating employers or covered
individuals to the plan or other arrangement;
except to the extent that the services used by the plan,
arrangement, organization, or other entity consist solely of
preparation of documents necessary for compliance with the
reporting and disclosure requirements of part 1 or
administrative, investment, or consulting services unrelated
to solicitation or enrollment of covered individuals.
``(ii) As of the end of the preceding plan year, the number
of covered individuals under the plan or other arrangement
who are neither--
``(I) employed within a bargaining unit covered by any of
the collective bargaining agreements with a participating
employer (nor covered on the basis of an individual's
employment in such a bargaining unit); nor
``(II) present employees (or former employees who were
covered while employed) of the sponsoring employee
organization, of an employer who is or was a party to any of
the collective bargaining agreements, or of the plan or other
arrangement or a related plan or arrangement (nor covered on
the basis of such present or former employment),
does not exceed 15 percent of the total number of individuals
who are covered under the plan or arrangement and who are
present or former employees who are or were covered under the
plan or arrangement pursuant to a collective bargaining
agreement with a participating employer. The requirements of
the preceding provisions of this clause shall be treated as
satisfied if, as of the end of the preceding plan year, such
covered individuals are comprised solely of individuals who
were covered individuals under the plan or other arrangement
as of the date of the enactment of the Small Business Health
Fairness Act of 2003 and, as of the end of the preceding plan
year, the number of such covered individuals does not exceed
25 percent of the total number of present and former
employees enrolled under the plan or other arrangement.
``(iii) The employee organization or other entity
sponsoring the plan or other arrangement certifies to the
Secretary each year, in a form and manner which shall be
prescribed by the Secretary through negotiated rulemaking
that the plan or other arrangement meets the requirements of
clauses (i) and (ii).
``(D) For purposes of subparagraph (A)(i)(II), a plan or
arrangement shall be treated as established or maintained in
accordance with this subparagraph only if--
``(i) all of the benefits provided under the plan or
arrangement consist of health insurance coverage; or
``(ii)(I) the plan or arrangement is a multiemployer plan;
and
``(II) the requirements of clause (B) of the proviso to
clause (5) of section 302(c) of the Labor Management
Relations Act, 1947 (29 U.S.C. 186(c)) are met with respect
to such plan or other arrangement.
``(E) For purposes of subparagraph (A)(i)(II), a plan or
arrangement shall be treated as established or maintained in
accordance with this subparagraph only if--
``(i) the plan or arrangement is in effect as of the date
of the enactment of the Small Business Health Fairness Act of
2003; or
``(ii) the employee organization or other entity sponsoring
the plan or arrangement--
``(I) has been in existence for at least 3 years; or
``(II) demonstrates to the satisfaction of the Secretary
that the requirements of subparagraphs (C) and (D) are met
with respect to the plan or other arrangement.''.
(c) Conforming Amendments to Definitions of Participant and
Beneficiary.--Section 3(7) of such Act (29 U.S.C. 1002(7)) is
amended by adding at the end the following new sentence:
``Such term includes an individual who is a covered
individual described in paragraph (40)(C)(ii).''.
SEC. 5. ENFORCEMENT PROVISIONS RELATING TO ASSOCIATION HEALTH
PLANS.
(a) Criminal Penalties for Certain Willful
Misrepresentations.--Section 501 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1131) is amended--
(1) by inserting ``(a)'' after ``Sec. 501.''; and
(2) by adding at the end the following new subsection:
``(b) Any person who willfully falsely represents, to any
employee, any employee's beneficiary, any employer, the
Secretary, or any State, a plan or other arrangement
established or maintained for the purpose of offering or
providing any benefit described in section 3(1) to employees
or their beneficiaries as--
``(1) being an association health plan which has been
certified under part 8;
``(2) having been established or maintained under or
pursuant to one or more collective bargaining agreements
which are reached pursuant to collective bargaining described
in section 8(d) of the National Labor Relations Act (29
U.S.C. 158(d)) or paragraph Fourth of section 2 of the
Railway Labor Act (45 U.S.C. 152, paragraph Fourth) or which
are reached pursuant to labor-management negotiations under
similar provisions of State public employee relations laws;
or
``(3) being a plan or arrangement with respect to which the
requirements of subparagraph (C), (D), or (E) of section
3(40) are met,
shall, upon conviction, be imprisoned not more than 5 years,
be fined under title 18, United States Code, or both.''.
(b) Cease Activities Orders.--Section 502 of such Act (29
U.S.C. 1132), as amended by sections 141 and 143, is further
amended by adding at the end the following new subsection:
``(p) Association Health Plan Cease and Desist Orders.--
``(1) In general.--Subject to paragraph (2), upon
application by the Secretary showing the operation,
promotion, or marketing of an association health plan (or
similar arrangement providing benefits consisting of medical
care (as defined in section 733(a)(2))) that--
``(A) is not certified under part 8, is subject under
section 514(b)(6) to the insurance laws of any State in which
the plan or arrangement offers or provides benefits, and is
not licensed, registered, or otherwise approved under the
insurance laws of such State; or
``(B) is an association health plan certified under part 8
and is not operating in accordance with the requirements
under part 8 for such certification,
a district court of the United States shall enter an order
requiring that the plan or arrangement cease activities.
``(2) Exception.--Paragraph (1) shall not apply in the case
of an association health plan or other arrangement if the
plan or arrangement shows that--
``(A) all benefits under it referred to in paragraph (1)
consist of health insurance coverage; and
``(B) with respect to each State in which the plan or
arrangement offers or provides
[[Page H5605]]
benefits, the plan or arrangement is operating in accordance
with applicable State laws that are not superseded under
section 514.
``(3) Additional equitable relief.--The court may grant
such additional equitable relief, including any relief
available under this title, as it deems necessary to protect
the interests of the public and of persons having claims for
benefits against the plan.''.
(c) Responsibility for Claims Procedure.--Section 503 of
such Act (29 U.S.C. 1133), as amended by section 301(b), is
amended by adding at the end the following new subsection:
``(c) Association Health Plans.--The terms of each
association health plan which is or has been certified under
part 8 shall require the board of trustees or the named
fiduciary (as applicable) to ensure that the requirements of
this section are met in connection with claims filed under
the plan.''.
SEC. 6. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Section 506 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1136) is amended by adding at the end the
following new subsection:
``(c) Consultation With States With Respect to Association
Health Plans.--
``(1) Agreements with states.--The Secretary shall consult
with the State recognized under paragraph (2) with respect to
an association health plan regarding the exercise of--
``(A) the Secretary's authority under sections 502 and 504
to enforce the requirements for certification under part 8;
and
``(B) the Secretary's authority to certify association
health plans under part 8 in accordance with regulations of
the Secretary applicable to certification under part 8.
``(2) Recognition of primary domicile state.--In carrying
out paragraph (1), the Secretary shall ensure that only one
State will be recognized, with respect to any particular
association health plan, as the State to with which
consultation is required. In carrying out this paragraph, the
Secretary shall take into account the places of residence of
the participants and beneficiaries under the plan and the
State in which the trust is maintained.''.
SEC. 7. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.
(a) Effective Date.--The amendments made by sections 2, 5,
and 6 shall take effect one year from the date of the
enactment. The amendments made by sections 3 and 4 shall take
effect on the date of the enactment of this Act. The
Secretary of Labor shall first issue all regulations
necessary to carry out the amendments made by this subtitle
within one year from the date of the enactment. Such
regulations shall be issued through negotiated rulemaking.
(b) Exception.--Section 801(a)(2) of the Employee
Retirement Income Security Act of 1974 (added by section 2)
does not apply in connection with an association health plan
(certified under part 8 of subtitle B of title I of such Act)
existing on the date of the enactment of this Act, if no
benefits provided thereunder as of the date of the enactment
of this Act consist of health insurance coverage (as defined
in section 733(b)(1) of such Act).
(c) Treatment of Certain Existing Health Benefits
Programs.--
(1) In general.--In any case in which, as of the date of
the enactment of this Act, an arrangement is maintained in a
State for the purpose of providing benefits consisting of
medical care for the employees and beneficiaries of its
participating employers, at least 200 participating employers
make contributions to such arrangement, such arrangement has
been in existence for at least 10 years, and such arrangement
is licensed under the laws of one or more States to provide
such benefits to its participating employers, upon the filing
with the applicable authority (as defined in section
812(a)(5) of the Employee Retirement Income Security Act of
1974 (as amended by this subtitle)) by the arrangement of an
application for certification of the arrangement under part 8
of subtitle B of title I of such Act--
(A) such arrangement shall be deemed to be a group health
plan for purposes of title I of such Act;
(B) the requirements of sections 801(a)(1) and 803(a)(1) of
the Employee Retirement Income Security Act of 1974 shall be
deemed met with respect to such arrangement;
(C) the requirements of section 803(b) of such Act shall be
deemed met, if the arrangement is operated by a board of
directors which--
(i) is elected by the participating employers, with each
employer having one vote; and
(ii) has complete fiscal control over the arrangement and
which is responsible for all operations of the arrangement;
(D) the requirements of section 804(a) of such Act shall be
deemed met with respect to such arrangement; and
(E) the arrangement may be certified by any applicable
authority with respect to its operations in any State only if
it operates in such State on the date of certification.
The provisions of this subsection shall cease to apply with
respect to any such arrangement at such time after the date
of the enactment of this Act as the applicable requirements
of this subsection are not met with respect to such
arrangement.
(2) Definitions.--For purposes of this subsection, the
terms ``group health plan'', ``medical care'', and
``participating employer'' shall have the meanings provided
in section 812 of the Employee Retirement Income Security Act
of 1974, except that the reference in paragraph (7) of such
section to an ``association health plan'' shall be deemed a
reference to an arrangement referred to in this subsection.
The SPEAKER pro tempore. The committee amendment in the nature of a
substitute printed in the bill is adopted.
The text of the committee amendment in the nature of a substitute is
as follows:
H.R. 660
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Small
Business Health Fairness Act of 2003''.
(b) Table of Contents.--The table of contents is as
follows:
Sec. 1. Short title and table of contents.
Sec. 2. Rules governing association health plans.
``Part 8--Rules Governing Association Health Plans
``Sec. 801. Association health plans.
``Sec. 802. Certification of association health plans.
``Sec. 803. Requirements relating to sponsors and boards of trustees.
``Sec. 804. Participation and coverage requirements.
``Sec. 805. Other requirements relating to plan documents, contribution
rates, and benefit options.
``Sec. 806. Maintenance of reserves and provisions for solvency for
plans providing health benefits in addition to health
insurance coverage.
``Sec. 807. Requirements for application and related requirements.
``Sec. 808. Notice requirements for voluntary termination.
``Sec. 809. Corrective actions and mandatory termination.
``Sec. 810. Trusteeship by the Secretary of insolvent association
health plans providing health benefits in addition to
health insurance coverage.
``Sec. 811. State assessment authority.
``Sec. 812. Definitions and rules of construction.
Sec. 3. Clarification of treatment of single employer arrangements.
Sec. 4. Enforcement provisions relating to association health plans.
Sec. 5. Cooperation between Federal and State authorities.
Sec. 6. Effective date and transitional and other rules.
SEC. 2. RULES GOVERNING ASSOCIATION HEALTH PLANS.
(a) In General.--Subtitle B of title I of the Employee
Retirement Income Security Act of 1974 is amended by adding
after part 7 the following new part:
``Part 8--Rules Governing Association Health Plans
``SEC. 801. ASSOCIATION HEALTH PLANS.
``(a) In General.--For purposes of this part, the term
`association health plan' means a group health plan whose
sponsor is (or is deemed under this part to be) described in
subsection (b).
``(b) Sponsorship.--The sponsor of a group health plan is
described in this subsection if such sponsor--
``(1) is organized and maintained in good faith, with a
constitution and bylaws specifically stating its purpose and
providing for periodic meetings on at least an annual basis,
as a bona fide trade association, a bona fide industry
association (including a rural electric cooperative
association or a rural telephone cooperative association), a
bona fide professional association, or a bona fide chamber of
commerce (or similar bona fide business association,
including a corporation or similar organization that operates
on a cooperative basis (within the meaning of section 1381 of
the Internal Revenue Code of 1986)), for substantial purposes
other than that of obtaining or providing medical care;
``(2) is established as a permanent entity which receives
the active support of its members and requires for membership
payment on a periodic basis of dues or payments necessary to
maintain eligibility for membership in the sponsor; and
``(3) does not condition membership, such dues or payments,
or coverage under the plan on the basis of health status-
related factors with respect to the employees of its members
(or affiliated members), or the dependents of such employees,
and does not condition such dues or payments on the basis of
group health plan participation.
Any sponsor consisting of an association of entities which
meet the requirements of paragraphs (1), (2), and (3) shall
be deemed to be a sponsor described in this subsection.
``SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.
``(a) In General.--The applicable authority shall prescribe
by regulation a procedure under which, subject to subsection
(b), the applicable authority shall certify association
health plans which apply for certification as meeting the
requirements of this part.
``(b) Standards.--Under the procedure prescribed pursuant
to subsection (a), in the case of an association health plan
that provides at least one benefit option which does not
consist of health insurance coverage, the applicable
authority shall certify such plan as meeting the requirements
of this part only if the applicable authority is satisfied
that the applicable requirements of this part are met (or,
upon the
[[Page H5606]]
date on which the plan is to commence operations, will be
met) with respect to the plan.
``(c) Requirements Applicable to Certified Plans.--An
association health plan with respect to which certification
under this part is in effect shall meet the applicable
requirements of this part, effective on the date of
certification (or, if later, on the date on which the plan is
to commence operations).
``(d) Requirements for Continued Certification.--The
applicable authority may provide by regulation for continued
certification of association health plans under this part.
``(e) Class Certification for Fully Insured Plans.--The
applicable authority shall establish a class certification
procedure for association health plans under which all
benefits consist of health insurance coverage. Under such
procedure, the applicable authority shall provide for the
granting of certification under this part to the plans in
each class of such association health plans upon appropriate
filing under such procedure in connection with plans in such
class and payment of the prescribed fee under section 807(a).
``(f) Certification of Self-Insured Association Health
Plans.--An association health plan which offers one or more
benefit options which do not consist of health insurance
coverage may be certified under this part only if such plan
consists of any of the following:
``(1) a plan which offered such coverage on the date of the
enactment of the Small Business Health Fairness Act of 2003,
``(2) a plan under which the sponsor does not restrict
membership to one or more trades and businesses or industries
and whose eligible participating employers represent a broad
cross-section of trades and businesses or industries, or
``(3) a plan whose eligible participating employers
represent one or more trades or businesses, or one or more
industries, consisting of any of the following: agriculture;
equipment and automobile dealerships; barbering and
cosmetology; certified public accounting practices; child
care; construction; dance, theatrical and orchestra
productions; disinfecting and pest control; financial
services; fishing; foodservice establishments; hospitals;
labor organizations; logging; manufacturing (metals); mining;
medical and dental practices; medical laboratories;
professional consulting services; sanitary services;
transportation (local and freight); warehousing; wholesaling/
distributing; or any other trade or business or industry
which has been indicated as having average or above-average
risk or health claims experience by reason of State rate
filings, denials of coverage, proposed premium rate levels,
or other means demonstrated by such plan in accordance with
regulations.
``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF
TRUSTEES.
``(a) Sponsor.--The requirements of this subsection are met
with respect to an association health plan if the sponsor has
met (or is deemed under this part to have met) the
requirements of section 801(b) for a continuous period of not
less than 3 years ending with the date of the application for
certification under this part.
``(b) Board of Trustees.--The requirements of this
subsection are met with respect to an association health plan
if the following requirements are met:
``(1) Fiscal control.--The plan is operated, pursuant to a
trust agreement, by a board of trustees which has complete
fiscal control over the plan and which is responsible for all
operations of the plan.
``(2) Rules of operation and financial controls.--The board
of trustees has in effect rules of operation and financial
controls, based on a 3-year plan of operation, adequate to
carry out the terms of the plan and to meet all requirements
of this title applicable to the plan.
``(3) Rules governing relationship to participating
employers and to contractors.--
``(A) Board membership.--
``(i) In general.--Except as provided in clauses (ii) and
(iii), the members of the board of trustees are individuals
selected from individuals who are the owners, officers,
directors, or employees of the participating employers or who
are partners in the participating employers and actively
participate in the business.
``(ii) Limitation.--
``(I) General rule.--Except as provided in subclauses (II)
and (III), no such member is an owner, officer, director, or
employee of, or partner in, a contract administrator or other
service provider to the plan.
``(II) Limited exception for providers of services solely
on behalf of the sponsor.--Officers or employees of a sponsor
which is a service provider (other than a contract
administrator) to the plan may be members of the board if
they constitute not more than 25 percent of the membership of
the board and they do not provide services to the plan other
than on behalf of the sponsor.
``(III) Treatment of providers of medical care.--In the
case of a sponsor which is an association whose membership
consists primarily of providers of medical care, subclause
(I) shall not apply in the case of any service provider
described in subclause (I) who is a provider of medical care
under the plan.
``(iii) Certain plans excluded.--Clause (i) shall not apply
to an association health plan which is in existence on the
date of the enactment of the Small Business Health Fairness
Act of 2003.
``(B) Sole authority.--The board has sole authority under
the plan to approve applications for participation in the
plan and to contract with a service provider to administer
the day-to-day affairs of the plan.
``(c) Treatment of Franchise Networks.--In the case of a
group health plan which is established and maintained by a
franchiser for a franchise network consisting of its
franchisees--
``(1) the requirements of subsection (a) and section 801(a)
shall be deemed met if such requirements would otherwise be
met if the franchiser were deemed to be the sponsor referred
to in section 801(b), such network were deemed to be an
association described in section 801(b), and each franchisee
were deemed to be a member (of the association and the
sponsor) referred to in section 801(b); and
``(2) the requirements of section 804(a)(1) shall be deemed
met.
The Secretary may by regulation define for purposes of this
subsection the terms `franchiser', `franchise network', and
`franchisee'.
``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.
``(a) Covered Employers and Individuals.--The requirements
of this subsection are met with respect to an association
health plan if, under the terms of the plan--
``(1) each participating employer must be--
``(A) a member of the sponsor,
``(B) the sponsor, or
``(C) an affiliated member of the sponsor with respect to
which the requirements of subsection (b) are met,
except that, in the case of a sponsor which is a professional
association or other individual-based association, if at
least one of the officers, directors, or employees of an
employer, or at least one of the individuals who are partners
in an employer and who actively participates in the business,
is a member or such an affiliated member of the sponsor,
participating employers may also include such employer; and
``(2) all individuals commencing coverage under the plan
after certification under this part must be--
``(A) active or retired owners (including self-employed
individuals), officers, directors, or employees of, or
partners in, participating employers; or
``(B) the beneficiaries of individuals described in
subparagraph (A).
``(b) Coverage of Previously Uninsured Employees.--In the
case of an association health plan in existence on the date
of the enactment of the Small Business Health Fairness Act of
2003, an affiliated member of the sponsor of the plan may be
offered coverage under the plan as a participating employer
only if--
``(1) the affiliated member was an affiliated member on the
date of certification under this part; or
``(2) during the 12-month period preceding the date of the
offering of such coverage, the affiliated member has not
maintained or contributed to a group health plan with respect
to any of its employees who would otherwise be eligible to
participate in such association health plan.
``(c) Individual Market Unaffected.--The requirements of
this subsection are met with respect to an association health
plan if, under the terms of the plan, no participating
employer may provide health insurance coverage in the
individual market for any employee not covered under the plan
which is similar to the coverage contemporaneously provided
to employees of the employer under the plan, if such
exclusion of the employee from coverage under the plan is
based on a health status-related factor with respect to
the employee and such employee would, but for such
exclusion on such basis, be eligible for coverage under
the plan.
``(d) Prohibition of Discrimination Against Employers and
Employees Eligible To Participate.--The requirements of this
subsection are met with respect to an association health plan
if--
``(1) under the terms of the plan, all employers meeting
the preceding requirements of this section are eligible to
qualify as participating employers for all geographically
available coverage options, unless, in the case of any such
employer, participation or contribution requirements of the
type referred to in section 2711 of the Public Health Service
Act are not met;
``(2) upon request, any employer eligible to participate is
furnished information regarding all coverage options
available under the plan; and
``(3) the applicable requirements of sections 701, 702, and
703 are met with respect to the plan.
``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS,
CONTRIBUTION RATES, AND BENEFIT OPTIONS.
``(a) In General.--The requirements of this section are met
with respect to an association health plan if the following
requirements are met:
``(1) Contents of governing instruments.--The instruments
governing the plan include a written instrument, meeting the
requirements of an instrument required under section
402(a)(1), which--
``(A) provides that the board of trustees serves as the
named fiduciary required for plans under section 402(a)(1)
and serves in the capacity of a plan administrator (referred
to in section 3(16)(A));
``(B) provides that the sponsor of the plan is to serve as
plan sponsor (referred to in section 3(16)(B)); and
``(C) incorporates the requirements of section 806.
``(2) Contribution rates must be nondiscriminatory.--
``(A) The contribution rates for any participating small
employer do not vary on the basis of any health status-
related factor in relation to employees of such employer or
their beneficiaries and do not vary on the basis of the type
of business or industry in which such employer is engaged.
``(B) Nothing in this title or any other provision of law
shall be construed to preclude an association health plan, or
a health insurance issuer offering health insurance coverage
in connection with an association health plan, from--
``(i) setting contribution rates based on the claims
experience of the plan; or
``(ii) varying contribution rates for small employers in a
State to the extent that such rates
[[Page H5607]]
could vary using the same methodology employed in such State
for regulating premium rates in the small group market with
respect to health insurance coverage offered in connection
with bona fide associations (within the meaning of section
2791(d)(3) of the Public Health Service Act),
subject to the requirements of section 702(b) relating to
contribution rates.
``(3) Floor for number of covered individuals with respect
to certain plans.--If any benefit option under the plan does
not consist of health insurance coverage, the plan has as of
the beginning of the plan year not fewer than 1,000
participants and beneficiaries.
``(4) Marketing requirements.--
``(A) In general.--If a benefit option which consists of
health insurance coverage is offered under the plan, State-
licensed insurance agents shall be used to distribute to
small employers coverage which does not consist of health
insurance coverage in a manner comparable to the manner in
which such agents are used to distribute health insurance
coverage.
``(B) State-licensed insurance agents.--For purposes of
subparagraph (A), the term `State-licensed insurance agents'
means one or more agents who are licensed in a State and are
subject to the laws of such State relating to licensure,
qualification, testing, examination, and continuing education
of persons authorized to offer, sell, or solicit health
insurance coverage in such State.
``(5) Regulatory requirements.--Such other requirements as
the applicable authority determines are necessary to carry
out the purposes of this part, which shall be prescribed by
the applicable authority by regulation.
``(b) Ability of Association Health Plans To Design Benefit
Options.--Subject to section 514(d), nothing in this part or
any provision of State law (as defined in section 514(c)(1))
shall be construed to preclude an association health plan, or
a health insurance issuer offering health insurance coverage
in connection with an association health plan, from
exercising its sole discretion in selecting the specific
items and services consisting of medical care to be included
as benefits under such plan or coverage, except (subject to
section 514) in the case of (1) any law to the extent that it
is not preempted under section 731(a)(1) with respect to
matters governed by section 711, 712, or 713, or (2) any law
of the State with which filing and approval of a policy type
offered by the plan was initially obtained to the extent that
such law prohibits an exclusion of a specific disease from
such coverage.
``SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR
SOLVENCY FOR PLANS PROVIDING HEALTH BENEFITS IN
ADDITION TO HEALTH INSURANCE COVERAGE.
``(a) In General.--The requirements of this section are met
with respect to an association health plan if--
``(1) the benefits under the plan consist solely of health
insurance coverage; or
``(2) if the plan provides any additional benefit options
which do not consist of health insurance coverage, the plan--
``(A) establishes and maintains reserves with respect to
such additional benefit options, in amounts recommended by
the qualified actuary, consisting of--
``(i) a reserve sufficient for unearned contributions;
``(ii) a reserve sufficient for benefit liabilities which
have been incurred, which have not been satisfied, and for
which risk of loss has not yet been transferred, and for
expected administrative costs with respect to such benefit
liabilities;
``(iii) a reserve sufficient for any other obligations of
the plan; and
``(iv) a reserve sufficient for a margin of error and other
fluctuations, taking into account the specific circumstances
of the plan; and
``(B) establishes and maintains aggregate and specific
excess /stop loss insurance and solvency indemnification,
with respect to such additional benefit options for which
risk of loss has not yet been transferred, as follows:
``(i) The plan shall secure aggregate excess /stop loss
insurance for the plan with an attachment point which is not
greater than 125 percent of expected gross annual claims. The
applicable authority may by regulation provide for upward
adjustments in the amount of such percentage in specified
circumstances in which the plan specifically provides for and
maintains reserves in excess of the amounts required under
subparagraph (A).
``(ii) The plan shall secure specific excess /stop loss
insurance for the plan with an attachment point which is at
least equal to an amount recommended by the plan's qualified
actuary. The applicable authority may by regulation provide
for adjustments in the amount of such insurance in specified
circumstances in which the plan specifically provides for and
maintains reserves in excess of the amounts required under
subparagraph (A).
``(iii) The plan shall secure indemnification insurance for
any claims which the plan is unable to satisfy by reason of a
plan termination.
Any person issuing to a plan insurance described in clause
(i), (ii), or (iii) shall notify the Secretary of any failure
of premium payment meriting cancellation of the policy prior
to undertaking such a cancellation. Any regulations
prescribed by the applicable authority pursuant to clause (i)
or (ii) of subparagraph (B) may allow for such adjustments in
the required levels of excess /stop loss insurance as the
qualified actuary may recommend, taking into account the
specific circumstances of the plan.
``(b) Minimum Surplus in Addition to Claims Reserves.--In
the case of any association health plan described in
subsection (a)(2), the requirements of this subsection are
met if the plan establishes and maintains surplus in an
amount at least equal to--
``(1) $500,000, or
``(2) such greater amount (but not greater than $2,000,000)
as may be set forth in regulations prescribed by the
applicable authority, considering the level of aggregate and
specific excess /stop loss insurance provided with respect to
such plan and other factors related to solvency risk, such as
the plan's projected levels of participation or claims, the
nature of the plan's liabilities, and the types of assets
available to assure that such liabilities are met.
``(c) Additional Requirements.--In the case of any
association health plan described in subsection (a)(2), the
applicable authority may provide such additional requirements
relating to reserves, excess /stop loss insurance, and
indemnification insurance as the applicable authority
considers appropriate. Such requirements may be provided by
regulation with respect to any such plan or any class of such
plans.
``(d) Adjustments for Excess /Stop Loss Insurance.--The
applicable authority may provide for adjustments to the
levels of reserves otherwise required under subsections (a)
and (b) with respect to any plan or class of plans to take
into account excess /stop loss insurance provided with
respect to such plan or plans.
``(e) Alternative Means of Compliance.--The applicable
authority may permit an association health plan described in
subsection (a)(2) to substitute, for all or part of the
requirements of this section (except subsection
(a)(2)(B)(iii)), such security, guarantee, hold-harmless
arrangement, or other financial arrangement as the applicable
authority determines to be adequate to enable the plan to
fully meet all its financial obligations on a timely basis
and is otherwise no less protective of the interests of
participants and beneficiaries than the requirements for
which it is substituted. The applicable authority may take
into account, for purposes of this subsection, evidence
provided by the plan or sponsor which demonstrates an
assumption of liability with respect to the plan. Such
evidence may be in the form of a contract of indemnification,
lien, bonding, insurance, letter of credit, recourse under
applicable terms of the plan in the form of assessments of
participating employers, security, or other financial
arrangement.
``(f) Measures To Ensure Continued Payment of Benefits by
Certain Plans in Distress.--
``(1) Payments by certain plans to association health plan
fund.--
``(A) In general.--In the case of an association health
plan described in subsection (a)(2), the requirements of this
subsection are met if the plan makes payments into the
Association Health Plan Fund under this subparagraph when
they are due. Such payments shall consist of annual payments
in the amount of $5,000, and, in addition to such annual
payments, such supplemental payments as the Secretary may
determine to be necessary under paragraph (2). Payments under
this paragraph are payable to the Fund at the time determined
by the Secretary. Initial payments are due in advance of
certification under this part. Payments shall continue to
accrue until a plan's assets are distributed pursuant to a
termination procedure.
``(B) Penalties for failure to make payments.--If any
payment is not made by a plan when it is due, a late payment
charge of not more than 100 percent of the payment which was
not timely paid shall be payable by the plan to the Fund.
``(C) Continued duty of the secretary.--The Secretary shall
not cease to carry out the provisions of paragraph (2) on
account of the failure of a plan to pay any payment when due.
``(2) Payments by secretary to continue excess /stop loss
insurance coverage and indemnification insurance coverage for
certain plans.--In any case in which the applicable authority
determines that there is, or that there is reason to believe
that there will be: (A) a failure to take necessary
corrective actions under section 809(a) with respect to an
association health plan described in subsection (a)(2); or
(B) a termination of such a plan under section 809(b) or
810(b)(8) (and, if the applicable authority is not the
Secretary, certifies such determination to the Secretary),
the Secretary shall determine the amounts necessary to make
payments to an insurer (designated by the Secretary) to
maintain in force excess /stop loss insurance coverage or
indemnification insurance coverage for such plan, if the
Secretary determines that there is a reasonable expectation
that, without such payments, claims would not be satisfied by
reason of termination of such coverage. The Secretary shall,
to the extent provided in advance in appropriation Acts, pay
such amounts so determined to the insurer designated by the
Secretary.
``(3) Association health plan fund.--
``(A) In general.--There is established on the books of the
Treasury a fund to be known as the `Association Health Plan
Fund'. The Fund shall be available for making payments
pursuant to paragraph (2). The Fund shall be credited with
payments received pursuant to paragraph (1)(A), penalties
received pursuant to paragraph (1)(B); and earnings on
investments of amounts of the Fund under subparagraph (B).
``(B) Investment.--Whenever the Secretary determines that
the moneys of the fund are in excess of current needs, the
Secretary may request the investment of such amounts as the
Secretary determines advisable by the Secretary of the
Treasury in obligations issued or guaranteed by the United
States.
``(g) Excess /Stop Loss Insurance.--For purposes of this
section--
``(1) Aggregate excess /stop loss insurance.--The term
`aggregate excess /stop loss insurance' means, in connection
with an association health plan, a contract--
``(A) under which an insurer (meeting such minimum
standards as the applicable authority may prescribe by
regulation) provides for payment to the plan with respect to
aggregate
[[Page H5608]]
claims under the plan in excess of an amount or amounts
specified in such contract;
``(B) which is guaranteed renewable; and
``(C) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(2) Specific excess /stop loss insurance.--The term
`specific excess /stop loss insurance' means, in connection
with an association health plan, a contract--
``(A) under which an insurer (meeting such minimum
standards as the applicable authority may prescribe by
regulation) provides for payment to the plan with respect to
claims under the plan in connection with a covered individual
in excess of an amount or amounts specified in such contract
in connection with such covered individual;
``(B) which is guaranteed renewable; and
``(C) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(h) Indemnification Insurance.--For purposes of this
section, the term `indemnification insurance' means, in
connection with an association health plan, a contract--
``(1) under which an insurer (meeting such minimum
standards as the applicable authority may prescribe by
regulation) provides for payment to the plan with respect to
claims under the plan which the plan is unable to satisfy by
reason of a termination pursuant to section 809(b) (relating
to mandatory termination);
``(2) which is guaranteed renewable and noncancellable for
any reason (except as the applicable authority may prescribe
by regulation); and
``(3) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(i) Reserves.--For purposes of this section, the term
`reserves' means, in connection with an association health
plan, plan assets which meet the fiduciary standards under
part 4 and such additional requirements regarding liquidity
as the applicable authority may prescribe by regulation.
``(j) Solvency Standards Working Group.--
``(1) In general.--Within 90 days after the date of the
enactment of the Small Business Health Fairness Act of 2003,
the applicable authority shall establish a Solvency Standards
Working Group. In prescribing the initial regulations under
this section, the applicable authority shall take into
account the recommendations of such Working Group.
``(2) Membership.--The Working Group shall consist of not
more than 15 members appointed by the applicable authority.
The applicable authority shall include among persons invited
to membership on the Working Group at least one of each of
the following:
``(A) a representative of the National Association of
Insurance Commissioners;
``(B) a representative of the American Academy of
Actuaries;
``(C) a representative of the State governments, or their
interests;
``(D) a representative of existing self-insured
arrangements, or their interests;
``(E) a representative of associations of the type referred
to in section 801(b)(1), or their interests; and
``(F) a representative of multiemployer plans that are
group health plans, or their interests.
``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED
REQUIREMENTS.
``(a) Filing Fee.--Under the procedure prescribed pursuant
to section 802(a), an association health plan shall pay to
the applicable authority at the time of filing an application
for certification under this part a filing fee in the amount
of $5,000, which shall be available in the case of the
Secretary, to the extent provided in appropriation Acts, for
the sole purpose of administering the certification
procedures applicable with respect to association health
plans.
``(b) Information To Be Included in Application for
Certification.--An application for certification under this
part meets the requirements of this section only if it
includes, in a manner and form which shall be prescribed by
the applicable authority by regulation, at least the
following information:
``(1) Identifying information.--The names and addresses
of--
``(A) the sponsor; and
``(B) the members of the board of trustees of the plan.
``(2) States in which plan intends to do business.--The
States in which participants and beneficiaries under the plan
are to be located and the number of them expected to be
located in each such State.
``(3) Bonding requirements.--Evidence provided by the board
of trustees that the bonding requirements of section 412 will
be met as of the date of the application or (if later)
commencement of operations.
``(4) Plan documents.--A copy of the documents governing
the plan (including any bylaws and trust agreements), the
summary plan description, and other material describing the
benefits that will be provided to participants and
beneficiaries under the plan.
``(5) Agreements with service providers.--A copy of any
agreements between the plan and contract administrators and
other service providers.
``(6) Funding report.--In the case of association health
plans providing benefits options in addition to health
insurance coverage, a report setting forth information with
respect to such additional benefit options determined as of a
date within the 120-day period ending with the date of the
application, including the following:
``(A) Reserves.--A statement, certified by the board of
trustees of the plan, and a statement of actuarial opinion,
signed by a qualified actuary, that all applicable
requirements of section 806 are or will be met in accordance
with regulations which the applicable authority shall
prescribe.
``(B) Adequacy of contribution rates.--A statement of
actuarial opinion, signed by a qualified actuary, which sets
forth a description of the extent to which contribution rates
are adequate to provide for the payment of all obligations
and the maintenance of required reserves under the plan for
the 12-month period beginning with such date within such 120-
day period, taking into account the expected coverage and
experience of the plan. If the contribution rates are not
fully adequate, the statement of actuarial opinion shall
indicate the extent to which the rates are inadequate and the
changes needed to ensure adequacy.
``(C) Current and projected value of assets and
liabilities.--A statement of actuarial opinion signed by a
qualified actuary, which sets forth the current value of the
assets and liabilities accumulated under the plan and a
projection of the assets, liabilities, income, and expenses
of the plan for the 12-month period referred to in
subparagraph (B). The income statement shall identify
separately the plan's administrative expenses and claims.
``(D) Costs of coverage to be charged and other expenses.--
A statement of the costs of coverage to be charged, including
an itemization of amounts for administration, reserves, and
other expenses associated with the operation of the plan.
``(E) Other information.--Any other information as may be
determined by the applicable authority, by regulation, as
necessary to carry out the purposes of this part.
``(c) Filing Notice of Certification With States.--A
certification granted under this part to an association
health plan shall not be effective unless written notice of
such certification is filed with the applicable State
authority of each State in which at least 25 percent of the
participants and beneficiaries under the plan are located.
For purposes of this subsection, an individual shall be
considered to be located in the State in which a known
address of such individual is located or in which such
individual is employed.
``(d) Notice of Material Changes.--In the case of any
association health plan certified under this part,
descriptions of material changes in any information which was
required to be submitted with the application for the
certification under this part shall be filed in such form and
manner as shall be prescribed by the applicable authority by
regulation. The applicable authority may require by
regulation prior notice of material changes with respect to
specified matters which might serve as the basis for
suspension or revocation of the certification.
``(e) Reporting Requirements for Certain Association Health
Plans.--An association health plan certified under this part
which provides benefit options in addition to health
insurance coverage for such plan year shall meet the
requirements of section 103 by filing an annual report
under such section which shall include information
described in subsection (b)(6) with respect to the plan
year and, notwithstanding section 104(a)(1)(A), shall be
filed with the applicable authority not later than 90 days
after the close of the plan year (or on such later date as
may be prescribed by the applicable authority). The
applicable authority may require by regulation such
interim reports as it considers appropriate.
``(f) Engagement of Qualified Actuary.--The board of
trustees of each association health plan which provides
benefits options in addition to health insurance coverage and
which is applying for certification under this part or is
certified under this part shall engage, on behalf of all
participants and beneficiaries, a qualified actuary who shall
be responsible for the preparation of the materials
comprising information necessary to be submitted by a
qualified actuary under this part. The qualified actuary
shall utilize such assumptions and techniques as are
necessary to enable such actuary to form an opinion as to
whether the contents of the matters reported under this
part--
``(1) are in the aggregate reasonably related to the
experience of the plan and to reasonable expectations; and
``(2) represent such actuary's best estimate of anticipated
experience under the plan.
The opinion by the qualified actuary shall be made with
respect to, and shall be made a part of, the annual report.
``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.
``Except as provided in section 809(b), an association
health plan which is or has been certified under this part
may terminate (upon or at any time after cessation of
accruals in benefit liabilities) only if the board of
trustees, not less than 60 days before the proposed
termination date--
``(1) provides to the participants and beneficiaries a
written notice of intent to terminate stating that such
termination is intended and the proposed termination date;
``(2) develops a plan for winding up the affairs of the
plan in connection with such termination in a manner which
will result in timely payment of all benefits for which the
plan is obligated; and
``(3) submits such plan in writing to the applicable
authority.
Actions required under this section shall be taken in such
form and manner as may be prescribed by the applicable
authority by regulation.
``SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.
``(a) Actions To Avoid Depletion of Reserves.--An
association health plan which is certified under this part
and which provides benefits other than health insurance
coverage shall continue to meet the requirements of section
806, irrespective of whether such certification continues in
effect. The board of trustees of such plan shall determine
quarterly whether
[[Page H5609]]
the requirements of section 806 are met. In any case in which
the board determines that there is reason to believe that
there is or will be a failure to meet such requirements, or
the applicable authority makes such a determination and so
notifies the board, the board shall immediately notify the
qualified actuary engaged by the plan, and such actuary
shall, not later than the end of the next following month,
make such recommendations to the board for corrective action
as the actuary determines necessary to ensure compliance with
section 806. Not later than 30 days after receiving from the
actuary recommendations for corrective actions, the board
shall notify the applicable authority (in such form and
manner as the applicable authority may prescribe by
regulation) of such recommendations of the actuary for
corrective action, together with a description of the actions
(if any) that the board has taken or plans to take in
response to such recommendations. The board shall thereafter
report to the applicable authority, in such form and
frequency as the applicable authority may specify to the
board, regarding corrective action taken by the board until
the requirements of section 806 are met.
``(b) Mandatory Termination.--In any case in which--
``(1) the applicable authority has been notified under
subsection (a) (or by an issuer of excess /stop loss
insurance or indemnity insurance pursuant to section 806(a))
of a failure of an association health plan which is or has
been certified under this part and is described in section
806(a)(2) to meet the requirements of section 806 and has not
been notified by the board of trustees of the plan that
corrective action has restored compliance with such
requirements; and
``(2) the applicable authority determines that there is a
reasonable expectation that the plan will continue to fail to
meet the requirements of section 806,
the board of trustees of the plan shall, at the direction of
the applicable authority, terminate the plan and, in the
course of the termination, take such actions as the
applicable authority may require, including satisfying any
claims referred to in section 806(a)(2)(B)(iii) and
recovering for the plan any liability under subsection
(a)(2)(B)(iii) or (e) of section 806, as necessary to ensure
that the affairs of the plan will be, to the maximum extent
possible, wound up in a manner which will result in timely
provision of all benefits for which the plan is obligated.
``SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT
ASSOCIATION HEALTH PLANS PROVIDING HEALTH
BENEFITS IN ADDITION TO HEALTH INSURANCE
COVERAGE.
``(a) Appointment of Secretary as Trustee for Insolvent
Plans.--Whenever the Secretary determines that an association
health plan which is or has been certified under this part
and which is described in section 806(a)(2) will be unable to
provide benefits when due or is otherwise in a financially
hazardous condition, as shall be defined by the Secretary by
regulation, the Secretary shall, upon notice to the plan,
apply to the appropriate United States district court for
appointment of the Secretary as trustee to administer the
plan for the duration of the insolvency. The plan may appear
as a party and other interested persons may intervene in the
proceedings at the discretion of the court. The court shall
appoint such Secretary trustee if the court determines that
the trusteeship is necessary to protect the interests of
the participants and beneficiaries or providers of medical
care or to avoid any unreasonable deterioration of the
financial condition of the plan. The trusteeship of such
Secretary shall continue until the conditions described in
the first sentence of this subsection are remedied or the
plan is terminated.
``(b) Powers as Trustee.--The Secretary, upon appointment
as trustee under subsection (a), shall have the power--
``(1) to do any act authorized by the plan, this title, or
other applicable provisions of law to be done by the plan
administrator or any trustee of the plan;
``(2) to require the transfer of all (or any part) of the
assets and records of the plan to the Secretary as trustee;
``(3) to invest any assets of the plan which the Secretary
holds in accordance with the provisions of the plan,
regulations prescribed by the Secretary, and applicable
provisions of law;
``(4) to require the sponsor, the plan administrator, any
participating employer, and any employee organization
representing plan participants to furnish any information
with respect to the plan which the Secretary as trustee may
reasonably need in order to administer the plan;
``(5) to collect for the plan any amounts due the plan and
to recover reasonable expenses of the trusteeship;
``(6) to commence, prosecute, or defend on behalf of the
plan any suit or proceeding involving the plan;
``(7) to issue, publish, or file such notices, statements,
and reports as may be required by the Secretary by regulation
or required by any order of the court;
``(8) to terminate the plan (or provide for its termination
in accordance with section 809(b)) and liquidate the plan
assets, to restore the plan to the responsibility of the
sponsor, or to continue the trusteeship;
``(9) to provide for the enrollment of plan participants
and beneficiaries under appropriate coverage options; and
``(10) to do such other acts as may be necessary to comply
with this title or any order of the court and to protect the
interests of plan participants and beneficiaries and
providers of medical care.
``(c) Notice of Appointment.--As soon as practicable after
the Secretary's appointment as trustee, the Secretary shall
give notice of such appointment to--
``(1) the sponsor and plan administrator;
``(2) each participant;
``(3) each participating employer; and
``(4) if applicable, each employee organization which, for
purposes of collective bargaining, represents plan
participants.
``(d) Additional Duties.--Except to the extent inconsistent
with the provisions of this title, or as may be otherwise
ordered by the court, the Secretary, upon appointment as
trustee under this section, shall be subject to the same
duties as those of a trustee under section 704 of title 11,
United States Code, and shall have the duties of a fiduciary
for purposes of this title.
``(e) Other Proceedings.--An application by the Secretary
under this subsection may be filed notwithstanding the
pendency in the same or any other court of any bankruptcy,
mortgage foreclosure, or equity receivership proceeding, or
any proceeding to reorganize, conserve, or liquidate such
plan or its property, or any proceeding to enforce a lien
against property of the plan.
``(f) Jurisdiction of Court.--
``(1) In general.--Upon the filing of an application for
the appointment as trustee or the issuance of a decree under
this section, the court to which the application is made
shall have exclusive jurisdiction of the plan involved and
its property wherever located with the powers, to the extent
consistent with the purposes of this section, of a court of
the United States having jurisdiction over cases under
chapter 11 of title 11, United States Code. Pending an
adjudication under this section such court shall stay, and
upon appointment by it of the Secretary as trustee, such
court shall continue the stay of, any pending mortgage
foreclosure, equity receivership, or other proceeding to
reorganize, conserve, or liquidate the plan, the sponsor, or
property of such plan or sponsor, and any other suit against
any receiver, conservator, or trustee of the plan, the
sponsor, or property of the plan or sponsor. Pending such
adjudication and upon the appointment by it of the Secretary
as trustee, the court may stay any proceeding to enforce a
lien against property of the plan or the sponsor or any other
suit against the plan or the sponsor.
``(2) Venue.--An action under this section may be brought
in the judicial district where the sponsor or the plan
administrator resides or does business or where any asset of
the plan is situated. A district court in which such action
is brought may issue process with respect to such action in
any other judicial district.
``(g) Personnel.--In accordance with regulations which
shall be prescribed by the Secretary, the Secretary shall
appoint, retain, and compensate accountants, actuaries, and
other professional service personnel as may be necessary in
connection with the Secretary's service as trustee under this
section.
``SEC. 811. STATE ASSESSMENT AUTHORITY.
``(a) In General.--Notwithstanding section 514, a State may
impose by law a contribution tax on an association health
plan described in section 806(a)(2), if the plan commenced
operations in such State after the date of the enactment of
the Small Business Health Fairness Act of 2003.
``(b) Contribution Tax.--For purposes of this section, the
term `contribution tax' imposed by a State on an association
health plan means any tax imposed by such State if--
``(1) such tax is computed by applying a rate to the amount
of premiums or contributions, with respect to individuals
covered under the plan who are residents of such State, which
are received by the plan from participating employers located
in such State or from such individuals;
``(2) the rate of such tax does not exceed the rate of any
tax imposed by such State on premiums or contributions
received by insurers or health maintenance organizations for
health insurance coverage offered in such State in connection
with a group health plan;
``(3) such tax is otherwise nondiscriminatory; and
``(4) the amount of any such tax assessed on the plan is
reduced by the amount of any tax or assessment otherwise
imposed by the State on premiums, contributions, or both
received by insurers or health maintenance organizations for
health insurance coverage, aggregate excess /stop loss
insurance (as defined in section 806(g)(1)), specific excess
/stop loss insurance (as defined in section 806(g)(2)), other
insurance related to the provision of medical care under the
plan, or any combination thereof provided by such insurers or
health maintenance organizations in such State in connection
with such plan.
``SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION.
``(a) Definitions.--For purposes of this part--
``(1) Group health plan.--The term `group health plan' has
the meaning provided in section 733(a)(1) (after applying
subsection (b) of this section).
``(2) Medical care.--The term `medical care' has the
meaning provided in section 733(a)(2).
``(3) Health insurance coverage.--The term `health
insurance coverage' has the meaning provided in section
733(b)(1).
``(4) Health insurance issuer.--The term `health insurance
issuer' has the meaning provided in section 733(b)(2).
``(5) Applicable authority.--The term `applicable
authority' means the Secretary, except that, in connection
with any exercise of the Secretary's authority regarding
which the Secretary is required under section 506(d) to
consult with a State, such term means the Secretary, in
consultation with such State.
``(6) Health status-related factor.--The term `health
status-related factor' has the meaning provided in section
733(d)(2).
``(7) Individual market.--
[[Page H5610]]
``(A) In general.--The term `individual market' means the
market for health insurance coverage offered to individuals
other than in connection with a group health plan.
``(B) Treatment of very small groups.--
``(i) In general.--Subject to clause (ii), such term
includes coverage offered in connection with a group health
plan that has fewer than 2 participants as current employees
or participants described in section 732(d)(3) on the first
day of the plan year.
``(ii) State exception.--Clause (i) shall not apply in the
case of health insurance coverage offered in a State if such
State regulates the coverage described in such clause in the
same manner and to the same extent as coverage in the small
group market (as defined in section 2791(e)(5) of the Public
Health Service Act) is regulated by such State.
``(8) Participating employer.--The term `participating
employer' means, in connection with an association health
plan, any employer, if any individual who is an employee of
such employer, a partner in such employer, or a self-employed
individual who is such employer (or any dependent, as defined
under the terms of the plan, of such individual) is or was
covered under such plan in connection with the status of such
individual as such an employee, partner, or self-employed
individual in relation to the plan.
``(9) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or
official or officials designated by the State to enforce the
requirements of title XXVII of the Public Health Service Act
for the State involved with respect to such issuer.
``(10) Qualified actuary.--The term `qualified actuary'
means an individual who is a member of the American Academy
of Actuaries.
``(11) Affiliated member.--The term `affiliated member'
means, in connection with a sponsor--
``(A) a person who is otherwise eligible to be a member of
the sponsor but who elects an affiliated status with the
sponsor,
``(B) in the case of a sponsor with members which consist
of associations, a person who is a member of any such
association and elects an affiliated status with the sponsor,
or
``(C) in the case of an association health plan in
existence on the date of the enactment of the Small Business
Health Fairness Act of 2003, a person eligible to be a member
of the sponsor or one of its member associations.
``(12) Large employer.--The term `large employer' means, in
connection with a group health plan with respect to a plan
year, an employer who employed an average of at least 51
employees on business days during the preceding calendar year
and who employs at least 2 employees on the first day of the
plan year.
``(13) Small employer.--The term `small employer' means, in
connection with a group health plan with respect to a plan
year, an employer who is not a large employer.
``(b) Rules of Construction.--
``(1) Employers and employees.--For purposes of determining
whether a plan, fund, or program is an employee welfare
benefit plan which is an association health plan, and for
purposes of applying this title in connection with such plan,
fund, or program so determined to be such an employee welfare
benefit plan--
``(A) in the case of a partnership, the term `employer' (as
defined in section 3(5)) includes the partnership in relation
to the partners, and the term `employee' (as defined in
section 3(6)) includes any partner in relation to the
partnership; and
``(B) in the case of a self-employed individual, the term
`employer' (as defined in section 3(5)) and the term
`employee' (as defined in section 3(6)) shall include such
individual.
``(2) Plans, funds, and programs treated as employee
welfare benefit plans.--In the case of any plan, fund, or
program which was established or is maintained for the
purpose of providing medical care (through the purchase of
insurance or otherwise) for employees (or their dependents)
covered thereunder and which demonstrates to the Secretary
that all requirements for certification under this part would
be met with respect to such plan, fund, or program if such
plan, fund, or program were a group health plan, such plan,
fund, or program shall be treated for purposes of this title
as an employee welfare benefit plan on and after the date of
such demonstration.''.
(b) Conforming Amendments to Preemption Rules.--
(1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is
amended by adding at the end the following new subparagraph:
``(E) The preceding subparagraphs of this paragraph do not
apply with respect to any State law in the case of an
association health plan which is certified under part 8.''.
(2) Section 514 of such Act (29 U.S.C. 1144) is amended--
(A) in subsection (b)(4), by striking ``Subsection (a)''
and inserting ``Subsections (a) and (d)'';
(B) in subsection (b)(5), by striking ``subsection (a)'' in
subparagraph (A) and inserting ``subsection (a) of this
section and subsections (a)(2)(B) and (b) of section 805'',
and by striking ``subsection (a)'' in subparagraph (B) and
inserting ``subsection (a) of this section or subsection
(a)(2)(B) or (b) of section 805'';
(C) by redesignating subsection (d) as subsection (e); and
(D) by inserting after subsection (c) the following new
subsection:
``(d)(1) Except as provided in subsection (b)(4), the
provisions of this title shall supersede any and all State
laws insofar as they may now or hereafter preclude, or have
the effect of precluding, a health insurance issuer from
offering health insurance coverage in connection with an
association health plan which is certified under part 8.
``(2) Except as provided in paragraphs (4) and (5) of
subsection (b) of this section--
``(A) In any case in which health insurance coverage of any
policy type is offered under an association health plan
certified under part 8 to a participating employer operating
in such State, the provisions of this title shall supersede
any and all laws of such State insofar as they may preclude a
health insurance issuer from offering health insurance
coverage of the same policy type to other employers operating
in the State which are eligible for coverage under such
association health plan, whether or not such other employers
are participating employers in such plan.
``(B) In any case in which health insurance coverage of any
policy type is offered in a State under an association health
plan certified under part 8 and the filing, with the
applicable State authority (as defined in section 812(a)(9)),
of the policy form in connection with such policy type is
approved by such State authority, the provisions of this
title shall supersede any and all laws of any other State in
which health insurance coverage of such type is offered,
insofar as they may preclude, upon the filing in the same
form and manner of such policy form with the applicable State
authority in such other State, the approval of the filing in
such other State.
``(3) Nothing in subsection (b)(6)(E) or the preceding
provisions of this subsection shall be construed, with
respect to health insurance issuers or health insurance
coverage, to supersede or impair the law of any State--
``(A) providing solvency standards or similar standards
regarding the adequacy of insurer capital, surplus, reserves,
or contributions, or
``(B) relating to prompt payment of claims.
``(4) For additional provisions relating to association
health plans, see subsections (a)(2)(B) and (b) of section
805.
``(5) For purposes of this subsection, the term
`association health plan' has the meaning provided in section
801(a), and the terms `health insurance coverage',
`participating employer', and `health insurance issuer' have
the meanings provided such terms in section 812,
respectively.''.
(3) Section 514(b)(6)(A) of such Act (29 U.S.C.
1144(b)(6)(A)) is amended--
(A) in clause (i)(II), by striking ``and'' at the end;
(B) in clause (ii), by inserting ``and which does not
provide medical care (within the meaning of section
733(a)(2)),'' after ``arrangement,'', and by striking
``title.'' and inserting ``title, and''; and
(C) by adding at the end the following new clause:
``(iii) subject to subparagraph (E), in the case of any
other employee welfare benefit plan which is a multiple
employer welfare arrangement and which provides medical care
(within the meaning of section 733(a)(2)), any law of any
State which regulates insurance may apply.''.
(4) Section 514(e) of such Act (as redesignated by
paragraph (2)(C)) is amended--
(A) by striking ``Nothing'' and inserting ``(1) Except as
provided in paragraph (2), nothing''; and
(B) by adding at the end the following new paragraph:
``(2) Nothing in any other provision of law enacted on or
after the date of the enactment of the Small Business Health
Fairness Act of 2003 shall be construed to alter, amend,
modify, invalidate, impair, or supersede any provision of
this title, except by specific cross-reference to the
affected section.''.
(c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C.
102(16)(B)) is amended by adding at the end the following new
sentence: ``Such term also includes a person serving as the
sponsor of an association health plan under part 8.''.
(d) Disclosure of Solvency Protections Related to Self-
Insured and Fully Insured Options Under Association Health
Plans.--Section 102(b) of such Act (29 U.S.C. 102(b)) is
amended by adding at the end the following: ``An association
health plan shall include in its summary plan description, in
connection with each benefit option, a description of the
form of solvency or guarantee fund protection secured
pursuant to this Act or applicable State law, if any.''.
(e) Savings Clause.--Section 731(c) of such Act is amended
by inserting ``or part 8'' after ``this part''.
(f) Report to the Congress Regarding Certification of Self-
Insured Association Health Plans.--Not later than January 1,
2008, the Secretary of Labor shall report to the Committee on
Education and the Workforce of the House of Representatives
and the Committee on Health, Education, Labor, and Pensions
of the Senate the effect association health plans have had,
if any, on reducing the number of uninsured individuals.
(g) Clerical Amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 is
amended by inserting after the item relating to section 734
the following new items:
[[Page H5611]]
``Part 8--Rules Governing Association Health Plans
``Sec. 801. Association health plans.
``Sec. 802. Certification of association health plans.
``Sec. 803. Requirements relating to sponsors and boards of
trustees.
``Sec. 804. Participation and coverage requirements.
``Sec. 805. Other requirements relating to plan documents,
contribution rates, and benefit options.
``Sec. 806. Maintenance of reserves and provisions for
solvency for plans providing health benefits in
addition to health insurance coverage.
``Sec. 807. Requirements for application and related
requirements.
``Sec. 808. Notice requirements for voluntary termination.
``Sec. 809. Corrective actions and mandatory termination.
``Sec. 810. Trusteeship by the Secretary of insolvent
association health plans providing health benefits in
addition to health insurance coverage.
``Sec. 811. State assessment authority.
``Sec. 812. Definitions and rules of construction.''.
SEC. 3. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER
ARRANGEMENTS.
Section 3(40)(B) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002(40)(B)) is amended--
(1) in clause (i), by inserting after ``control group,''
the following: ``except that, in any case in which the
benefit referred to in subparagraph (A) consists of medical
care (as defined in section 812(a)(2)), two or more trades or
businesses, whether or not incorporated, shall be deemed a
single employer for any plan year of such plan, or any fiscal
year of such other arrangement, if such trades or businesses
are within the same control group during such year or at any
time during the preceding 1-year period,'';
(2) in clause (iii), by striking ``(iii) the
determination'' and inserting the following:
``(iii)(I) in any case in which the benefit referred to in
subparagraph (A) consists of medical care (as defined in
section 812(a)(2)), the determination of whether a trade or
business is under `common control' with another trade or
business shall be determined under regulations of the
Secretary applying principles consistent and coextensive with
the principles applied in determining whether employees of
two or more trades or businesses are treated as employed by a
single employer under section 4001(b), except that, for
purposes of this paragraph, an interest of greater than 25
percent may not be required as the minimum interest necessary
for common control, or
``(II) in any other case, the determination'';
(3) by redesignating clauses (iv) and (v) as clauses (v)
and (vi), respectively; and
(4) by inserting after clause (iii) the following new
clause:
``(iv) in any case in which the benefit referred to in
subparagraph (A) consists of medical care (as defined in
section 812(a)(2)), in determining, after the application of
clause (i), whether benefits are provided to employees of two
or more employers, the arrangement shall be treated as having
only one participating employer if, after the application of
clause (i), the number of individuals who are employees and
former employees of any one participating employer and who
are covered under the arrangement is greater than 75 percent
of the aggregate number of all individuals who are employees
or former employees of participating employers and who are
covered under the arrangement,''.
SEC. 4. ENFORCEMENT PROVISIONS RELATING TO ASSOCIATION HEALTH
PLANS.
(a) Criminal Penalties for Certain Willful
Misrepresentations.--Section 501 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1131) is amended--
(1) by inserting ``(a)'' after ``Sec. 501.''; and
(2) by adding at the end the following new subsection:
``(b) Any person who willfully falsely represents, to any
employee, any employee's beneficiary, any employer, the
Secretary, or any State, a plan or other arrangement
established or maintained for the purpose of offering
or providing any benefit described in section 3(1) to
employees or their beneficiaries as--
``(1) being an association health plan which has been
certified under part 8;
``(2) having been established or maintained under or
pursuant to one or more collective bargaining agreements
which are reached pursuant to collective bargaining described
in section 8(d) of the National Labor Relations Act (29
U.S.C. 158(d)) or paragraph Fourth of section 2 of the
Railway Labor Act (45 U.S.C. 152, paragraph Fourth) or which
are reached pursuant to labor-management negotiations under
similar provisions of State public employee relations laws;
or
``(3) being a plan or arrangement described in section
3(40)(A)(i),
shall, upon conviction, be imprisoned not more than 5 years,
be fined under title 18, United States Code, or both.''.
(b) Cease Activities Orders.--Section 502 of such Act (29
U.S.C. 1132) is amended by adding at the end the following
new subsection:
``(n) Association Health Plan Cease and Desist Orders.--
``(1) In general.--Subject to paragraph (2), upon
application by the Secretary showing the operation,
promotion, or marketing of an association health plan (or
similar arrangement providing benefits consisting of medical
care (as defined in section 733(a)(2))) that--
``(A) is not certified under part 8, is subject under
section 514(b)(6) to the insurance laws of any State in which
the plan or arrangement offers or provides benefits, and is
not licensed, registered, or otherwise approved under the
insurance laws of such State; or
``(B) is an association health plan certified under part 8
and is not operating in accordance with the requirements
under part 8 for such certification,
a district court of the United States shall enter an order
requiring that the plan or arrangement cease activities.
``(2) Exception.--Paragraph (1) shall not apply in the case
of an association health plan or other arrangement if the
plan or arrangement shows that--
``(A) all benefits under it referred to in paragraph (1)
consist of health insurance coverage; and
``(B) with respect to each State in which the plan or
arrangement offers or provides benefits, the plan or
arrangement is operating in accordance with applicable State
laws that are not superseded under section 514.
``(3) Additional equitable relief.--The court may grant
such additional equitable relief, including any relief
available under this title, as it deems necessary to protect
the interests of the public and of persons having claims for
benefits against the plan.''.
(c) Responsibility for Claims Procedure.--Section 503 of
such Act (29 U.S.C. 1133) is amended by inserting ``(a) In
General.--'' before ``In accordance'', and by adding at the
end the following new subsection:
``(b) Association Health Plans.--The terms of each
association health plan which is or has been certified under
part 8 shall require the board of trustees or the named
fiduciary (as applicable) to ensure that the requirements of
this section are met in connection with claims filed under
the plan.''.
SEC. 5. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Section 506 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1136) is amended by adding at the end the
following new subsection:
``(d) Consultation With States With Respect to Association
Health Plans.--
``(1) Agreements with states.--The Secretary shall consult
with the State recognized under paragraph (2) with respect to
an association health plan regarding the exercise of--
``(A) the Secretary's authority under sections 502 and 504
to enforce the requirements for certification under part 8;
and
``(B) the Secretary's authority to certify association
health plans under part 8 in accordance with regulations of
the Secretary applicable to certification under part 8.
``(2) Recognition of primary domicile state.--In carrying
out paragraph (1), the Secretary shall ensure that only one
State will be recognized, with respect to any particular
association health plan, as the State to with which
consultation is required. In carrying out this paragraph--
``(A) in the case of a plan which provides health insurance
coverage (as defined in section 812(a)(3)), such State shall
be the State with which filing and approval of a policy type
offered by the plan was initially obtained, and
``(B) in any other case, the Secretary shall take into
account the places of residence of the participants and
beneficiaries under the plan and the State in which the trust
is maintained.''.
SEC. 6. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.
(a) Effective Date.--The amendments made by this Act shall
take effect one year from the date of the enactment. The
Secretary of Labor shall first issue all regulations
necessary to carry out the amendments made by this Act within
one year after the date of the enactment of this Act.
(b) Treatment of Certain Existing Health Benefits
Programs.--
(1) In general.--In any case in which, as of the date of
the enactment of this Act, an arrangement is maintained in a
State for the purpose of providing benefits consisting of
medical care for the employees and beneficiaries of its
participating employers, at least 200 participating employers
make contributions to such arrangement, such arrangement has
been in existence for at least 10 years, and such arrangement
is licensed under the laws of one or more States to provide
such benefits to its participating employers, upon the
filing with the applicable authority (as defined in
section 812(a)(5) of the Employee Retirement Income
Security Act of 1974 (as amended by this subtitle)) by the
arrangement of an application for certification of the
arrangement under part 8 of subtitle B of title I of such
Act--
(A) such arrangement shall be deemed to be a group health
plan for purposes of title I of such Act;
(B) the requirements of sections 801(a) and 803(a) of the
Employee Retirement Income Security Act of 1974 shall be
deemed met with respect to such arrangement;
(C) the requirements of section 803(b) of such Act shall be
deemed met, if the arrangement is operated by a board of
directors which--
(i) is elected by the participating employers, with each
employer having one vote; and
(ii) has complete fiscal control over the arrangement and
which is responsible for all operations of the arrangement;
(D) the requirements of section 804(a) of such Act shall be
deemed met with respect to such arrangement; and
(E) the arrangement may be certified by any applicable
authority with respect to its operations in any State only if
it operates in such State on the date of certification.
The provisions of this subsection shall cease to apply with
respect to any such arrangement at such time after the date
of the enactment of this Act as the applicable requirements
of this subsection are not met with respect to such
arrangement.
(2) Definitions.--For purposes of this subsection, the
terms ``group health plan'', ``medical care'', and
``participating employer'' shall
[[Page H5612]]
have the meanings provided in section 812 of the Employee
Retirement Income Security Act of 1974, except that the
reference in paragraph (7) of such section to an
``association health plan'' shall be deemed a reference to an
arrangement referred to in this subsection.
The SPEAKER pro tempore. After 1 hour of debate on the bill, it shall
be in order to consider the further amendment printed in House Report
108-160, if offered, by the gentleman from Wisconsin (Mr. Kind) or his
designee, which shall be considered read and shall be debatable for 1
hour, equally divided and controlled by the proponent and an opponent.
The gentleman from Ohio (Mr. Boehner) and the gentleman from New
Jersey (Mr. Andrews) each will control 30 minutes.
The Chair recognizes the gentleman from Ohio (Mr. Boehner).
Mr. BOEHNER. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, the most pressing crisis that we face in health care
today is the number of Americans who lack basic health insurance
benefits. It is a problem that can be illustrated by just a few
numbers, so let us just look at the facts.
Today, 41 million Americans are uninsured. This problem is not going
to go away, and we have a responsibility to confront it. With health
care costs continuing to rise sharply across the country, more and more
employers and workers are sharing the burden of increased premiums.
Employer-based health insurance premiums leaped an average of 15
percent in 2003, the largest increase in at least a decade, according
to a study just released June 11 by the Center for Studying Health
System Change. We know that for every 1 percent increase in coverage,
additional price increase, 300,000 more people lose their health
insurance, according to a 1999 study by the Lewin Group, a national
health care and human services consulting firm.
The second number is 60. Sixty is the percentage of the 41 million
uninsured Americans who either work for a small business or who are
dependent upon someone who does. So let us remember, there are 60
percent of the uninsured where they or one of their dependents works
every day for a company that likely does not offer health insurance.
Many of these Americans work for small employers who cannot afford to
purchase quality health insurance benefits for their workers. Notably,
the 2002 Census Bureau statistics show that employer-sponsored health
care coverage has declined because small businesses with less than 25
workers have been forced to drop coverage because of rising health care
costs. These small employers are denied the ability to purchase quality
health benefits that compare with the coverage that large, multi-State
corporations and unions have been offering to their workers for
decades.
The last number is $130 billion. Yes, $130 billion is the cost to the
American economy every year of poor health and premature deaths amongst
those 41 million Americans who lack basic health insurance coverage,
according to a study released just this week by the Institute of
Medicine. Madam Speaker, $130 billion a year of additional costs to our
society and disproportionately aimed at the 41 million Americans that
do not have any health insurance.
The implications of these numbers are tragic, not just for employers
who cannot afford the high cost of health insurance, but the millions
of uninsured families who are being denied access to quality care.
Clearly, we need to focus on providing affordable health care to the
uninsured as well as ensure that employers who provide health benefits
to their employees are not forced to drop coverage because of rising
premiums and high administrative costs.
The Small Business Health Fairness Act, which we have on the floor
today, responds to this problem and can help reduce the high cost of
health insurance for small businesses and uninsured working families.
By creating association health plans, which would be strictly regulated
by the Department of Labor, small businesses could pool their resources
and increase their bargaining power with benefit providers, which will
allow them to negotiate better rates and purchase quality health care
at a lower cost.
President Bush addressed this point directly last year during his
speech at the Women's Entrepreneurship Summit when he said, ``Small
businesses will be able to pool together and spread their risk across a
large employee base.
{time} 1400
It makes no sense in America to isolate small businesses as little
health care islands unto themselves. We must have association health
plans.
Well, the President is right, and we should help level this playing
field so that small businesses can afford to offer the kind of quality
coverage that large companies and unions do across America today.
Importantly, the bill gives AHPs the freedom from costly State
mandates because small businesses deserve to be treated in the same
fashions as corporations like GM and UPS, and unions who receive the
same exemption so that they can offer high quality plans and benefits
to their workers. Clearly, State health care mandates are useless to
families who do not have the health care coverage in the first place.
And if you do not have health care coverage, State mandates requiring
health plans to offer specific benefits to those they cover do you and
your family no good at all.
Let us be clear on the protections this bill provides workers,
however, because it includes strong safeguards to protect workers. In
fact, the solvency standards in the bill go far beyond what is required
any single employer plan or labor union plan under law. And despite the
bipartisan nature of this bill, some misinformation has been spread
about the bill that I would like to take a moment to correct.
The measure protects against cherrypicking because we make clear that
the AHPs must comply with the 1996 Health Insurance Portability and
Accountability Act, HIPAA, which prohibits group health plans from
excluding or charging a higher rate to high-risk individuals with a
high-claims experience.
Under our bill, sick or high-risk groups or individuals cannot be
denied coverage. In addition, AHPs cannot charge higher rates for
employers with sicker individuals within the plan, except to the extent
already allowed by State law based on where the employer is located.
The bill also contains strict requirements under which only bona fide
professional and trade associations can sponsor an association health
plan, and therefore does not allow sham association plans set up by
health insurance companies to go out and do what some did over the next
decade or so. These organizations must be established for purposes
other than providing health insurance and they have to be in existence
for at least 3 years prior to the passage of this bill.
This campaign of disinformation belies not just the need for the
bill, but the bipartisan support behind it. Not only is it strongly
supported by the President of the United States, President Bush and
Secretary Chao at the Department of Labor, but it has more than 160
bipartisan co-sponsors, including my colleague, the gentleman from
Texas (Mr. Sam Johnson), the subcommittee chairman; the gentleman from
Kentucky (Mr. Fletcher), the former member of our committee, now on the
Committee on Energy and Commerce; or the Democrat member, the gentleman
from California (Mr. Dooley); and the Democrat member, the gentlewoman
from New York (Ms. Velazquez).
It is noteworthy and significant that Republicans and Democrats alike
are joining together to deal with the crisis affecting more than 41
million uninsured Americans. Uninsured workers deserve the security of
knowing that health care is not just a dream but a reality for them and
for their families. This bill can help make that happen.
Madam Speaker, I reserve the balance of my time.
Mr. ANDREWS. Madam Speaker, I yield myself such time as I may
consume.
(Mr. ANDREWS asked and was given permission to revise and extend his
remarks.)
Mr. ANDREWS. Madam Speaker, I rise in strong opposition to this bill.
The chairman of the committee is precisely right, that the problem of
massive amounts of people not having health insurance is the central
problem in health care. Most of the 41 million
[[Page H5613]]
Americans who have no health care who are adults work for a living. And
most of those adults who work for a living work for a small business,
so there is an intuitive appeal to an argument that says let us help
make it easier for small businesses to acquire health insurance.
In fact, the substitute that the gentleman from Wisconsin (Mr. Kind)
and I will be offering later in this debate does that, and we would
urge our colleagues to support that.
The reality, though, is that small businesses who do not provide
health care for their employees do not do so because the gap between
what they can afford to pay and what they have must pay is huge. It is
immense. Even the most optimistic proponents of this bill admit that
the premium savings that could be generated by this bill will slender
indeed, usually in the single digits of percentage points, if that.
The reality is small businesses are not going to be able to afford to
expand health care without significant public subsidies. That is a
fact. The majority has drained well in excess of $2 trillion from the
public Treasury with its insatiable appetite for tax cuts, and as a
result, there is no money in the till. There is no money to provide
those necessary subsidies. So this is the fig leaf. This is the shallow
argument that says we can do something to help those small businesses.
Frankly, this bill belongs in the Orwellian hall of fame for
misnomers of a piece of legislation. It is called the Small Business
Health Care Fairness Act. With respect to small businesses, it provides
nothing in subsidies for employers who cannot afford health insurance,
not a dime. It provides for market reforms that offer an illusory and
ultimately empty promise of lower premiums.
It is not a health care bill because what it does is supplant
benefits that have been provided by State legislatures across this
country by Republicans and Democrats, benefits that guarantee women
breast cancer care, benefits that guarantee people with diabetes care
for their illness, benefits that guarantee pregnant women and small
children important care, benefits that protect consumers when they have
been wronged by their HMO. Because this bill invalidates and wipes out
those protections, the National Governors Association, Republicans and
Democrats, oppose this bill. Because this bill invalidates those
protections, the Attorneys General of a huge majority of the States
oppose this bill. Because the bill eliminates protections for
mammograms, for diabetes care, for well baby care, wipes them out, the
insurance commissioners across this country oppose the bill.
It is not a health care bill. It is a political bill designed to
paper over the fact that the majority already spent the money it needs
to provide real relief.
Finally, it is called fairness. Where is the fairness in creating two
sets of rules for those who attempt to buy health insurance for their
employees? Because that is what this bill does. It sets up one set of
rules where all the protections and regulations and safeguards that
most people enjoy are wiped off the books for AHPs, and then another
set of rules where the remaining insurance companies must compete on an
unlevel playing field. Many of us who support the substitute believe in
market competition, but we believe in market competition on a level
playing field. That is not what this bill does.
One of the of the most respected health care analysis firms in this
country, Madam Speaker, Certified Public Accountants and Associates,
looked at this bill and that firm concluded that the chairman would
have to change one of his charts because he started with a chart that
says there are 41 million uninsured. If this bill is enacted, the
chairman will have to change his chart and X out the 41 and put 42
uninsured, because that firm has concluded that the net effect of this
bill will be to drive up the premiums for insurance companies who are
not AHPs, drive them up so high that it will result in the loss of
coverage for one million more Americans.
This bill is an illusion. It should be defeated. Later in this
debate, the gentleman from Wisconsin (Mr. Kind) and I will be
presenting a substitute which we believe truly addresses the real needs
of small businesses in America's uninsured.
Madam Speaker, I reserve the balance of my time.
Mr. SAM JOHNSON of Texas. Madam Speaker, I yield myself such time as
I may consume.
(Mr. SAM JOHNSON of Texas asked and was given permission to revise
and extend his remarks.)
Mr. SAM JOHNSON of Texas. Madam Speaker, to my friend, the gentleman
from New Jersey (Mr. Andrews), that is total misinformation. And I
would agree that the gentleman is politicizing this bill. But he is
doing it, not us.
This bill makes it illegal to cherrypick. This bill does not
eliminate any form of insurance and the gentleman stated it did. It
does not stop insurance companies from insuring on whatever they want
to insure. And as a matter of fact, they probably will.
Furthermore, one million more people became uninsured in the past
year and it was primarily because of small businesses getting out of
the insurance business because it is too expensive. And I think that
there is the one way in which we can ensure that people will be
insured, more of them through small businesses. As a matter of fact, a
private study has said about 8.5 million more will be insured.
Under our bill, sick or high risk groups or individuals cannot be
denied coverage. Moreover, AHPs are severely limited in their ability
to charge higher rates which my cohort said would happen. They can not
charge higher rates for sicker people or groups within the plan. AHPs
can only charge different rates to the extent allowed under the law of
the State where the employer is based.
The bill contains strict requirements under which only bona fide
professional and trade associations can sponsor an AHP, and these
organizations must be established for purposes other than providing
health insurance for at least 3 years.
Now, there is considerable comment about AHPs being exempts from
State coverage. As we all know, labor unions and large corporations
that self-insure are already exempt from State health care mandates,
and they provide quality benefits because it is in the best interest of
their employees. And I will charge you that small business would apply
the same reasoning. It is really a moral fairness issue. If it is good
enough for labor unions, good enough for Fortune 500 companies, it
ought to be good enough for small business.
We must remember that our ultimate goal here is to bring quality
coverage to the 41 million Americans who have no insurance. Further,
AHPs will significantly expand access to health coverage to uninsured
Americans by increasing small businesses bargaining power with health
care providers by giving employers freedom from costly State-mandated
benefit packages.
According to a private study, as I said, AHPs should increase the
number of insured Americans by up to 8.5 million people. Sadly, last
year one in seven Americans went without health insurance. The increase
in the number of uninsured comes solely from the declining market in
the small business community. With health insurance costs continuing to
rise, businesses face increases more than double the national average.
Health insurance costs are still rising and many small employers are
forced to drop health coverage. Some cannot even offer it in the first
place.
The cost saving benefits of AHPs would help small employers of main
street access coverage at a more affordable price. According to the
Congressional Budget Office, AHPs would save small business owners and
their employees as much as 25 percent of their health insurance costs.
Just like buying a case of soda at a supermarket costs less per can
than buying 24 individual cans at a vending machine, AHPs would allow
groups like the National Restaurant Association to buy thousands of
health insurance policies at a lower person policy cost and pass the
savings along.
Let us face facts. Costs are rising. Businesses are dropping
coverage, and more people are going uninsured. Congress must address
the uninsured problem and move forward with increasing the insured
through association health plans. It is the least this Congress can do
to make certain that the American people will receive better health
care at a more reasonable price.
[[Page H5614]]
Madam Speaker, I reserve the balance of my time.
Mr. ANDREWS. Madam Speaker, I yield myself 15 seconds.
Madam Speaker, I think it is important to point out for the record
that the gentleman did admit that the benefit protections like
mammogram screenings are, in fact, wiped out by the bill before us.
{time} 1415
The bill before us will take away health coverage for more than 1
million people and add to the uninsured.
Madam Speaker, I yield 3 minutes to the gentleman from Wisconsin (Mr.
Kind), who has offered a plan that will actually decrease the number of
uninsured, which we will talk about later.
Mr. KIND. Madam Speaker, I thank the gentleman from New Jersey for
yielding me this time and also commend him for his leadership and the
energy he has shown on this subject, as well as the ranking member, the
gentleman from California (Mr. George Miller).
Madam Speaker, there is a serious problem throughout America in
regards to the rising cost of health insurance, double-digit premium
increases. As I travel around my congressional district in western
Wisconsin visiting businesses large and small alike, it is the number
one topic on their lips, the difficulty of being able to provide health
insurance coverage for their employees with the double-digit increases
that they are facing today.
Part of the problem in western Wisconsin deals with the inadequacy of
Medicare reimbursement rates, which then is cost-shifted on to the
private plans; but also part of the problem is the number of uninsured
and the cost shifting that occurs when they receive treatment. We saw
the statistics a little earlier, 41 million uninsured. Those numbers
are going up. Between 50 and 60 percent of the uninsured are employees
working in small businesses. It is a crisis situation out there, and I
have not met a small business owner yet that is happy with the fact
when they cannot provide some basic health coverage for their
employees. Unless we deal with it in an honest and, I think,
straightforward plan, the numbers will only get worse.
There are some here today that think H.R. 660 is the answer to the
crisis we are all experiencing in our own districts. I happen to
disagree. I think there are some serious flaws with H.R. 660. I believe
that, at best, the underlying legislation would do very little to
address the plight of the uninsured. There is a recent CBO analysis
that said that, at best, we might be able to extend additional coverage
for half a million Americans, a far cry from the 41 million who are
currently uninsured or the 25 million who are working right now in
small businesses. At worst, there is a Mercer report that shows that
because of the premium increases in other health plans, we could see
another million Americans losing their health insurance coverage
because of H.R. 660.
What also is a major problem is that it exempts State laws. These are
community value judgments made in each of our States in regards to what
health care practices should be covered for the citizens. Yet the
legislation today is calling for a preemption of that State law, an
eradication of the federalism that has existed in this country for a
very long period of time. It is one of the reasons why we have so many
people opposing the legislation, from the National Governors'
Association, from the Democratic Governors' Association and Republican
Governors' Association, the State Attorneys General Association, not to
mention the Association of Insurance Plans, as well as the National
Conference of State Legislatures.
Why would you, if you believe in the free market, as I think most of
us do, and believe in price competition, try to set up an uneven system
where you have two different sets of plans playing by two different
sets of rules? It does not make sense. If you are going to force price
competition in the free market system, you need to have everyone
playing on a level playing field playing by the same set of rules, such
as the State laws that exist right now, rather than exempting a whole
category of people.
I think our substitute offers a better alternative, and I would
encourage our colleagues to support that.
Mr. BOEHNER. Madam Speaker, I yield myself 15 seconds. What we want
to do in this bill is to give small employers the same advantages in
the marketplace that large companies and unions have today. And that is
the real secret behind this. Why can they not go out as a group and
design a plan that would meet their needs just like a big company can
for their employees?
Madam Speaker, I yield 4 minutes to the gentleman from Kentucky (Mr.
Fletcher), the author of this bill and someone who has worked on it for
many, many years.
Mr. FLETCHER. Madam Speaker, I thank the gentleman for yielding me
this time and for his leadership and work on this very important piece
of legislation.
Health care coverage is becoming more unaffordable for workers and
small businesses all across America. In fact, the cost of providing
health care now exceeds the cost of taxes. For that reason, I have
introduced the Small Business Health Fairness Act to ensure that more
workers can afford their health care, regardless of whether they work
for a large international company or for just a small hardware store on
Main Street. A farmer in Kentucky should have the same access to health
benefits as someone who works for a large company like Ford Motor
Company. That is where the fairness is.
Why should small business employees not be able to obtain the same
economies of scale, bargaining power, benefit design and choices now
available to those in large corporations and to those in labor unions?
You will not hear our opponents attack those plans, I do not believe.
Ninety-eight percent of large businesses offer health insurance to
their employees. Less than half of small businesses offer this
important benefit.
When we look at the fact that the morbidity rate of an uninsured
hospitalized patient is more than twice that of an insured one, I think
we can see that that is a resounding call to decrease the number of
uninsured, which this bill will do. Experts estimate that up to 8\1/2\
million uninsured small business workers will be covered by AHP
legislation. This plan will decrease the number of uninsured Americans,
will reduce health care costs by up to 30 percent for small businesses,
and provide new coverage options for self-employed, like farmers and
small business workers across this Nation. It will not only give more
health care coverage but allow small businesses to create more jobs.
Many have made false claims against this bill, and I would like to
take a moment to set the record straight. In redrafting this bill, we
have taken great lengths to ensure that these plans remain solvent. We
have set up strict solvency provisions that include reserves, cash
reserves, surplus reserves, stop-loss insurance, both specific and
aggregate, indemnification for plan termination, insolvency funds, and
a certification fee required for application.
Opponents of this legislation have also asserted AHP plans will
engage in cherrypicking, taking only the young and healthy and leaving
the sick to fend for themselves. These false accusers overlook or are
unaware that all members of an association must be offered the plan
coverage. Furthermore, plans must demonstrate that they have average or
above-average risk to even be able to form an association health plan
to begin with. That means an association could not be formed of young
marathon runners just to provide a low-risk group.
Opponents of this legislation falsely charge that the Department of
Labor is unable to handle such a program. Such statements, I believe,
are baseless and contradict the facts. The DOL currently administers
2.5 million private job-based health plans. These programs serve 131
million workers. Sixty-seven million individuals now are in self-
insured plans and are monitored exclusively under DOL oversight. DOL
has the experience, the personnel, and the vision to monitor and
enforce these plans. Besides, I know Secretary Elaine Chao. She is a
friend of mine; she is a good Kentuckian. Believe me, she can
effectively oversee these plans.
In conclusion, the President favors association health plans and
strongly supports them. The Department of Labor is ready for AHPs; and
small businesses, farmers, and the self-employed are ready for
association health
[[Page H5615]]
plans. Uninsured Americans have waited far too long, so I ask my
colleagues to do the right thing for the uninsured Americans of small
businesses, not only in Kentucky but across America. Support this bill.
Mr. ANDREWS. Madam Speaker, I yield such time as he may consume to
the gentleman from California (Mr. George Miller), the leader of our
committee and one of the leading opponents of this plan that would take
health care coverage away from 1 million people.
Mr. GEORGE MILLER of California. Madam Speaker, I thank the gentleman
for yielding me this time and for his leadership on this issue in our
committee.
Once again, as with pension legislation, unemployment assistance, tax
policy, and many other examples, the Republican majority of this House
is bringing forward a bill that they claim is in the interest of
working families. But once again this is head-fakes and sleight of
hand. This bill hurts working people, places their already-meager
health insurance coverage at risk, and serves only the interest of the
business lobbyists.
I want to add that once again, as with those earlier bills, the
Republican majority continues to deprive 206 Members of the House on
the Democratic side and the tens of millions of people we represent
from being able to conduct a serious debate on this issue. Once again,
a contentious bill comes to the floor with no amendments allowed, just
a substitute. So there is little time to debate the bill that will cost
millions of Americans, including millions of children and women
workers, their health coverage, with no ability to offer amendments to
improve this bill. These tyrannical and corrupt rules under which we
are operating under the Republican leadership in this House prevent us
from having that debate and prevent the Republicans from taking votes
on amendments we would like to offer.
Let us be clear: this is not a question of whether or not we have
time to devote to debate. Week in and week out the Congress comes in on
Tuesday or late Monday night and leaves on Thursday or early Friday
morning. The Congress has time to adjourn for fund-raisers, the
Congress has time to adjourn for golf tournaments, the Congress has
time to adjourn for the White House picnic; but apparently we do not
have time to be able to offer amendments to legislation so that we can
have an honest debate about the legislation before us or have
opportunities to improve it or to offer an alternative view on how that
should be carried out.
So what do we find out now? We do not have that opportunity here when
we are risking 8 million people's health care coverage, according to
the Congressional Budget Office. So we will pass today, with almost
entirely Republican votes, a bill that deprives 47 percent of the
people in this country a role in debating and improving this
legislation.
The heart of this ill-conceived bill is a provision that overrides
State laws requiring access to basic health care services. These State
laws say to people that when they have a health insurance plan, that
plan will mean something. It means that they will have access to
mammograms, that means that they will have access to emergency
services, that means that they will have maternity benefits and well-
baby care and diabetes treatment, and it means there will be some
mental health coverage and cancer screening. Because those are the
things that the American families need in a health care plan.
Now, why are those the rules today in States across this country? Why
did the States make this determination? Not to burden small businesses,
not to burden health care plans, but because what people were being
offered prior to that were essentially phantom plans. They were phantom
plans that had little or no benefits to individuals, that did not meet
the needs that families had. They had little or no benefits in terms of
what women needed in their health care policies. That is the reason for
these regulations, or these requirements, that health care insurance
plans provide in their health care. That is the purpose of the plans.
But that was not what was happening.
So now what we see is that this comes along, and it says we are going
to override the judgment of these States, we are going to overrides the
judgment of the legislators, the collective wisdom of the Governors and
legislatures, the attorneys general, the insurance commissioners and
others to make sure that people have adequate health insurance. And the
consequences are that we are stripping much of this treatment away from
the individuals in terms of preventive services for men, women and
children.
We know that these services and treatments save money, we know they
preserve health in the long run, and we know that these services were
rarely provided voluntarily by employers in the past. That is precisely
why so many States have moved to guarantee this coverage. The
proponents of this legislation constantly want to say, well, this was
good for labor unions and this was good for big industry. Yes, and in
those instances the employees are organized and they negotiate on an
equal level. That is not the situation with these plans. These people
are given a health care plan which they can take or leave. And the
purpose here is to reduce the cost of those plans.
The fact of the matter is CBO has reported that approximately 8.5
million workers would end up in AHPs, and over 95 percent would simply
be dumped into those from existing health care plans. That means that 8
million workers would be stripped of their current legal right to
critical treatments and preventive health care services. Eight million
people would end up with less health care the next morning than they
currently have under this provision.
I recognize that that means that new people will be given health
insurance that do not have it, but we have to weigh the question of the
people who will get this stripped-down policy as their health insurance
to those people who have relatively decent policies who will lose their
access to those policies. Because that is really what this is about. It
is about cutting the cost to businesses, not about providing health
insurance that families truly need.
That is why, again, these plans were protected in the States and were
regulated in the States, and that is why so many of the Governors, both
Republican and Democrat, oppose this legislation. That also means that
these people are not going to have the kind of peace of mind that so
many of them now have with respect to their insurance policies.
We also know that one of the reasons this bill is offered is that
health insurance costs are increasing. They are increasing about 20, 25
percent for small employers. What that suggests is that, as people move
into these plans, the individuals with higher risk will be left out.
Those people who stayed in those kinds of insured pools, those costs
will continue to go up; and it means that we will have uneven health
insurance for people in this country.
{time} 1430
Madam Speaker, this is a very bad bill. It is a bad bill. It really
is about false advertising. It is suggesting that somehow this is going
to extend to millions of people health insurance that will cover their
families. That is not what it is going to do. It would if we were not
overriding State law, but here the majority has decided that the
collective wisdom of the States and the protection of residents and
consumers in those States, that is going to be overridden and
individuals be under no requirements to offer those components as part
of this health insurance plan. I would hope that the House would reject
this plan when it comes time to vote on the legislation.
General Leave
Mr. BOEHNER. Madam Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks on H.R. 660.
The SPEAKER pro tempore (Mrs. Emerson). Is there objection to the
request of the gentleman from Ohio?
There was no objection.
Mr. BOEHNER. Madam Speaker, I yield 2 minutes to the gentlewoman from
New York (Ms. VELAZQUEZ).
(Ms. VELAZQUEZ asked and was given permission to revise and extend
her remarks.)
Ms. VELAZQUEZ. Madam Speaker, our country is in a health care crisis.
Today, in the world's largest remaining superpower, 41 million
Americans live
[[Page H5616]]
without health insurance. No place in this epidemic is more apparent
than with our Nation's small businesses. They represent 60 percent of
this country's uninsured.
Small business owners and their employees do not have health
insurance, not because they do not want it or are trying to cut
corners, but because they cannot afford it. Small companies see their
insurance costs rising upwards of 25 percent each year. They are
unfairly suffering this burden, and their employees are unfairly
suffering without insurance.
Small businesses provide more than half of the Nation's gross
domestic product, create 75 percent of all new jobs, and give two-
thirds of Americans their first paychecks. Yet many small businesses
are unable to provide the benefits they know the workers deserve.
Today, with the passage of this bipartisan Small Business Health
Fairness Act of 2003, we take an important first step in helping
millions of Americans afford what so many in this Chamber take for
granted, health care.
During the debate on this legislation, Members are going to hear
terms like cherrypicking, solvency, and MEWAs. If Members take one
thing away from today's debate, it should be that H.R. 660 is simply
about fairness, fairness for small business owners to offer health
insurance to their employees just as large corporations and unions
already do. If we trust large corporations and unions, we should trust
small businesses in America.
If it is good enough for IBM, Lockheed-Martin and GM, it should be
good enough for mainstream American businesses. H.R. 660 will give
small business owners the ability to provide quality health care for
themselves, their families, and, most importantly, their workers. I
urge my colleagues to vote yes on H.R. 660.
Mr. ANDREWS. Madam Speaker, I yield 4 minutes to the gentleman from
North Dakota (Mr. Pomeroy) who, as a former insurance commissioner from
North Dakota, has direct experience with AHPs running out of money and
not paying their claims.
Mr. POMEROY. Madam Speaker, I appreciate the comments of my colleague
about the crisis in small employer health care; but as we address this
issue, I think we have to ascribe ourselves fully to the Hippocratic
oath, First, do no harm.
The AHP proposal before us would do a great deal of harm. I would
recommend to my colleagues, study this issue before you vote, it is
very serious. If there is not enough time to get into the technical
details, just look at who is against this bill. This bill could be
called a wonderful, unifying force because it has brought together
people who do not agree on anything, but they do agree this is bad
policy for this country. The Republican Governors Association, the
Democrat Governors Association, 41 State attorneys general of both
political parties, the National Association of Insurance Commissioners,
again representing regulators of both political parties have reached
their conclusion based on several fundamental facts.
We have spent a lot of time in this Chamber debating the Patients'
Bill of Rights worrying about protections. I guess we could call this
the ``Patient Bill of No Rights'' because it literally exposes those
who would be insured under these mechanisms to whatever might be
written with no consumer protections and no State insurance department
to go to for those protections.
There is a nice populist argument which has been used this afternoon
that if big companies can do it, little companies ought to be able to
do it, too. I represent North Dakota. That is the place of small
employers. The difference in a fundamental one. IBM can self-insure.
They do it themselves. They basically pay themselves. A small hardware
store in an AHP would be joining an association, sending their premiums
not to themselves but off to others, and that is why we need the check.
We have tried this before. What happens is promoters come up with these
schemes, the employer goes for the lowest premium, they ship their
hard-earned dollars off to provide the coverage for their employees,
and someone makes off with the money. It has time and time again.
The protections protect coverage, but they also protect to make sure
the plan is solvent so they can pay the health claim when the insured
needs it. We have seen this tried before under the guise of multiple
employer trusts. They went bankrupt; there was a slew of scandals. We
have seen it now under multiple employer welfare arrangements. There
were scandals, busts, uncertain insurance framework for our consumers.
Madam Speaker, now they want to call them AHPs, but the result will
be precisely the same.
If it were simply a benign issue of let the buyer beware, it would be
one thing; but it is much worse than that because this makes the
premiums go up for all who remain in existing insurance pools. Small
employers insuring through insurance companies are not viewed just on
their own little group, they are part of a pool. Well, as AHPs would
take off smaller healthy groups, those left would be older, sicker
groups. Premiums would go up, coverage would be diminished, or dropped
altogether. It has been estimated that as many as a million people
would lose their coverage.
Again, do not take my word for it, look at what the Congressional
Budget Office has written on this, or consider the quotes by the Mercer
Consulting Group in analyzing this proposal, Health insurance premiums
would increase 23 percent for small employers that continue to purchase
State-regulated coverage. This would result from AHPs' ability to
attract healthier-than-average firms out of the small, regulated
market. This makes the problem worse.
First, let us do no harm. We need to address small employers. The
substitute to be presented has a better approach in that regard, but
the underlying bill is a stinker, and let us beat it.
Mr. BOEHNER. Madam Speaker, I yield myself 30 seconds.
The foundation of our health insurance market in the United States is
employer-provided coverage set up through ERISA, the Employee
Retirement Income Security Act of 1974. It covers 150 million American
lives. We are trying to allow small employers who belong to statewide
associations, national associations, the opportunity to band together
to create an insurance policy that will benefit not only the small
business but, more importantly, their employees.
Madam Speaker, I yield 2 minutes to the gentlewoman from Tennessee
(Mrs. Blackburn).
Mrs. BLACKBURN. Madam Speaker, I rise today in strong support of H.R.
660, the Small Business Health Fairness Act. Small business owners know
that it is far too important to their employees to let this issue slide
off the table. Employees want to have health coverage and the
increasing cost is making it ever more difficult. It is important to
note also in my State of Tennessee, small business is the largest
employer.
This bill works to alleviate the problems by establishing the
association health plans that would allow small businesses to band
together under an umbrella of a bona fide trade association to act as a
large purchaser of health insurance, having that ability to buy health
care coverage as a large group for their employees. All employees
benefit by having better coverage, increased options and lower
deductibles.
Madam Speaker, last weekend I had the opportunity to address a
national convention of women. It was a national convention of women who
own their own businesses. Their number one concern, their top priority
is passing this legislation, seeing it passed. That is, millions of
women who own and work for women-owned businesses and they are very
concerned about this. It is at the top of their list.
Madam Speaker, it is unfortunately that there are so many myths
surrounding the debate of this bill. I join my colleagues in helping to
dispel these myths, that it would allow cherrypicking. In reality, this
legislation has explicit language prohibiting such. This legislation
also contains solvency provisions to protect employees against the risk
of health plans that default or go bankrupt. These health plans must
certify through a qualified actuary that an AHP is financially sound on
a quarterly basis.
[[Page H5617]]
Madam Speaker, I agree with thousands of female business owners that
it is time to pass this legislation now.
Mr. ANDREWS. Madam Speaker, I yield 3 minutes to the gentlewoman from
New York (Mrs. McCarthy).
Mrs. McCARTHY of New York. Madam Speaker, I stand in strong
opposition of H.R. 660. We are hearing all the time about do no harm,
and I think Members need to remember, why do 48 States have good basic
health care insurance? It is mainly because our advocates, breast
cancer or diabetes, all of the diseases that we are trying to prevent,
have made the States realize that the monies that we spend to make sure
that people stay healthy certainly is cheaper in the long run. That is
48 States including New York, and what we are doing here, we are wiping
that out. We are wiping that out.
As patients and advocates across this Nation quickly discovered that
their basic health care needs were not being served by their insurance
companies, that is why the States have forced the insurance companies
to make sure that the treatments that we are asking for, like a
mammogram, and how many lives have we saved over the years because we
have made the insurance companies make sure they have it in their
policies. The States made them do that.
What we are doing here is taking that away. They demanded that their
States step in and protect them. Madam Speaker, as I said in 48 States,
we have our attorneys general, we have our governors, Republicans and
Democrats. What we are doing here is harm. All of us, there is not one
Member in this Chamber that does not want to make sure that our small
businesses are able to offer health care insurance. That is why the
gentleman from New Jersey (Mr. Andrews) and the gentleman from
Wisconsin (Mr. Kind) are going to offer an amendment that will offer
help to our small businesses.
There is not one penny in this bill that is going to help small
businesses get health care. The Kind-Andrews amendment will. As a nurse
and certainly with the constituents I have coming into my office
yesterday, today, last week, every single week, all they are asking for
is to make sure that their basic health care needs are met. What we are
doing here is taking it away. I will say again, there is not one
Member, Republican or Democrat, that does not want to help our small
businesses. We would like to see health care be out there for
everybody. I certainly would, but again, we keep hearing about budget
constraints. Well, if we had not passed those large tax cuts, maybe we
could do some good health care policy around here.
Madam Speaker, this bill will do harm to millions of people. It is
always the devil is in the details, and on the top of this legislation
it might look good, but in the end it is not. All 48 States, as I have
said over and over again, have fought to make sure that our insurance
companies give the services that our constituents need. That is why it
was passed. That is why this bill should be defeated.
{time} 1445
Mr. BOEHNER. Madam Speaker, as I said earlier, this bill does have
broad bipartisan support. I am happy to yield 2 minutes to the
gentleman from Maryland (Mr. Wynn).
Mr. WYNN. Madam Speaker, I rise in strong support of this piece of
legislation. It is interesting, in the 10 years I have been down here,
we have been able to talk about regulations, talk about cherrypicking,
corporations have had insurance, big unions have had insurance, Members
of Congress have had insurance; but small businesses have been crying
out as they have not had insurance, and those that had it lost it
because the price continues to go up.
Bottom line: we have not done anything to help small businesses and
their employees have health insurance. It is time we do something.
Second, I hear a lot of talk about the great State regulations and
the protections they offer and these mandated benefits and those
mandated benefits. Let me tell you something. If you do not have health
insurance in the first place, the mandated benefits and the regulations
and the protections do not mean anything because they do not apply to
you because you do not have health insurance. The fundamental bottom
line is you have to have health insurance. At the end of the day that
will be the question you have to ask yourself: Do you want some health
insurance, or do you want to continue with no health insurance?
This plan works because it provides enhanced purchasing power for
small businesses. They come together, and they have the leverage to put
together an insurance plan to help those small businesses. They also
can lower administrative costs so they get savings. Small businesses
are very price sensitive. They will buy insurance even if they can get
just a small amount of savings. So on balance it is a very good idea.
We hear a lot of talk about the vaunted cherrypicking. Again if you
do not have health insurance, there is no cherrypicking because you are
not there to be picked. But the important issue is there are
regulations in this bill strictly regarding cherrypicking, prohibiting
cherrypicking, so that is not really a problem.
Finally and most importantly, what people are saying is this is a
bare bones policy and so you should not get it because it does not have
all the protections that admittedly we would all like. I am submitting
that it is better to have a basic policy that gets you into the
doctor's office, because if you get into the doctor's office, your
cancer, your heart attack, your diabetes and your blood pressure all
can be picked up by your doctor. They say, it is a bare bones policy
and no one's going to get it. Let me tell you, if it is that bare
bones, if it is that bad, if it does not provide any benefits at all to
the employee, they are not going to purchase it. They purchase it
because it provides the basic insurance that they can use.
It is not everything we would like, but it is better than nothing;
and at the end of the day, half a loaf is better than none.
Mr. ANDREWS. Madam Speaker, I yield myself 30 seconds. The gentleman
is correct. At the end of the day, the question is whether one has
health insurance or not. At the end of the day if this bill is enacted,
1 million more people will not have health insurance than do today
because of the damage that this bill does. That is one of the reasons
why State legislators across this country oppose this bill. Our next
colleague is someone who served in the Minnesota State legislature, who
fought for laws that protect women against discrimination. She will
point out that this law does not do that.
Madam Speaker, I am happy to yield 3 minutes to the gentlewoman from
Minnesota (Ms. McCollum).
Ms. McCOLLUM. Madam Speaker, I rise today in strong opposition to the
substandard health coverage that will be proposed in this bill.
Americans deserve affordable, quality health care coverage for our
children and for our families, not this substandard bill filled with
gaps, holes and exceptions that leave women and children especially
vulnerable. This bill leaves gaps for expecting mothers, leaves holes
for children with diabetes, leaves exceptions for families requiring
mental health care coverage. This legislation rewards bad medicine by
preempting every State standard that guarantees quality health care,
that protects women, children, and our families.
As a Minnesota State legislator, I fought hard for our State's health
care requirements. People were not getting the care that they needed or
deserved. Families living with diabetes came into my office and would
tell me how their health plans would cover their insulin but would not
cover the needles to deliver the insulin or the test strips to test
their sugar levels. This basic health care is needed to keep people
with diabetes healthy and enables them to manage and control their
disease. We passed laws in Minnesota mandating basic coverage that
health plans were not providing. They were not providing basic health
coverage.
Today we are considering legislation that rolls back these basic
health care protections. Minnesotans want comprehensive, affordable
health care. Minnesota health care professionals in a hearing I held,
nurses, pediatricians, psychologists and, yes, their patients, told me
they strongly oppose these substandard association plans.
Let us ensure quality. Let us ensure affordable health care that
protects women, protects children, protects our families and does not
only protect
[[Page H5618]]
them but protects those who we have heard over and over again, the
million people who stand to lose health insurance should this bill be
enacted.
Mr. BOEHNER. Madam Speaker, I am pleased to yield 2 minutes to the
gentleman from California (Mr. Dooley), one of my good friends and
colleagues on the Committee on Agriculture.
Mr. DOOLEY of California. Madam Speaker, I rise in strong support of
this legislation. One of the most difficult challenges facing those of
us in Congress is how do we deal with the growing number of uninsured
in our country, a number that is currently over 40 million. With the
increases in health care costs that we are going to be seeing in the
near future, that number is only going to continue to grow. This piece
of legislation is an attempt to ensure that we can find ways in which
small employers and farmers across the country can come together to
develop a purchasing power that can allow them to negotiate better
benefits at a less cost for the people they employ.
I represent a district in the central valley of California. It is 65
percent Latino. Many of those families are farm-worker families. They
are low-wage workers. They are almost without exception without health
insurance today. If they do have health insurance, it is through an
association health plan that was offered by Western growers. They have
coverage today that is benefiting them, and it is just basic coverage.
This legislation is an attempt to ensure that more of those low-wage
workers will have access to health care. It is unfortunate that it is
not going to be a plan that has all the mandates that some of the
States would require, but what I get so frustrated with is that we are
willing to deny the ability of employers to come together to offer a
basic level of health insurance to a lot of their low-wage workers and
their families that right now are not having access to care. We can do
better. This legislation is an attempt to do so.
I am struck by a lot of the opponents of this legislation that are
saying that this is going to lead to cherrypicking. I will tell you
today, there are not many insurance companies that are offering a plan
through the State HIPCs or whatever else that are interested in coming
out and trying to market a health insurance plan to a lot of the
farmers and the farm workers whom they employ. This is an attempt to
ensure that we can have an association of people who are committed to
that industry and to those employers that will be able to come together
to develop a basic health insurance product that will benefit the
health of these low-wage workers. I urge my colleagues to support this
legislation.
Mr. ANDREWS. Madam Speaker, one of the Members who is opposed to
expanding the ranks of the uninsured by 1 million people and,
therefore, opposes this bill is the gentleman from New York (Mr. Meeks)
to whom I yield 3 minutes.
Mr. MEEKS of New York. Madam Speaker, when I first saw the headlines
of the bill, I looked at the bill, it came across my desk, because
everybody wants to do something about small business. I first said to
my staff, let's get on this bill; it will help small business. But then
after I read it a second time and a third time, the devil is always in
the details. The devil is in the fine print. The devil is in what you
read.
When I really read the bill, I found that this bill would actually be
devastating; it is what we call short-term gain for long-term pain.
When you look over the years, the pain that really will happen to
people who we are trying to help in the long-term will be devastating.
Then when I looked even a little bit closer and tried to watch it to
see how it affected those low-wage earners that my colleague just
talked about and minorities and women in particular, then I noticed
another substantial devastating event, the fact that what this bill
does because many of the people that we want to help, they happen to be
minority and women and how they disproportionately will be affected by
this bill.
In fact, when you look at it, certain diseases because of people who
are of color, Latino and African American, you look at approximately
2.8 million or 13 percent of all African Americans and 2 million or
10.2 percent of all Latino Americans have diabetes. They would not be
covered under this. They could be cherrypicked. African American men
have a 20 percent higher incident rate and a 40 percent higher death
rate from all forms of cancer combined than white men do. They will be
affected by this bill disproportionately. African American women with
breast cancer are 67 percent more likely to die from the disease than
Caucasians. They will be disproportionately affected under this
cherrypicking, what this bill will do to them.
Hispanics experience the highest invasive cervical cancer incidence
rates of any group other than Vietnamese. They will be hurt and
devastated by this. Hispanics account for nearly one-fifth of HIV/AIDS
cases in the United States. African Americans account for approximately
35 percent of HIV/AIDS cases in the United States. They will not be
covered. They will not be picked up by these folks.
Now, more than ever, minority populations and women depend on health
care. H.R. 660 stands to make this needed health care harder for those
populations to obtain in the long run, not in the short run. In fact,
most States require insurance to cover cancer screenings, maternity,
diabetes treatment, and other benefits that provide medical care for
minorities and women. However, Federal AHP legislation would allow
certain insurers to avoid complying with these State laws. This means a
loss of crucial benefits for many families, that 1 million that we hear
my other colleagues talking about.
While our Nation is faced with a new health care crisis, H.R. 660 is
not the solution. It is absolutely not the solution. We must work to
pass legislation that offers genuine relief to small employers while
preserving the significant health care reforms undertaken by the
States. I urge my colleagues to voice their opposition to H.R. 660, the
so-called Small Business Health Fairness Act.
Mr. SAM JOHNSON of Texas. Madam Speaker, I yield 2 minutes to the
gentleman from Iowa (Mr. King), a member of the committee.
Mr. KING of Iowa. Madam Speaker, I am amazed at how the race card can
be played on every single trick and every single issue that comes up.
To me, this is just simply dollars and cents.
I started a small business in 1975 with actually a negative net worth
of $5,000, no capital and a dream. By the mid-80s when then Congressman
Grandy came to my hometown and held a hearing on health care, 70 or 80
of us in the basement of the Lutheran church in Odebolt, Iowa, sitting
in the front row because I do not hear that good, he said, how many of
you provide health insurance for your employees? I raised my hand as
did about 11 other people in that room. No, excuse me. I raised my hand
when he said, how many of you are employers? I kept it up when he said,
how many of you provide health insurance for your employees? I was the
only one in that room that provided health insurance for my employees.
I can tell you, I know why. It is because the cost is too high for a
group plan. Because the rules and the laws discriminate against small
business. This association health care plan is designed exactly to
correct that.
I have been involved in association work all of my life. That is the
only bargaining chip that small business has. A sole proprietor of a
small business is in a position where they cannot fully deduct all of
their own health care insurance unless, of course, they happen to be a
corporation and they are paying themselves a wage. That was put in
place at the end of World War II when we had wage and price controls,
and it was put in place because large business had the leverage, unions
had the leverage, but small business did not. That is what this bill
corrects, this association health care bill. It corrects the inequity
to some degree, and it is a small degree, that was created in World War
II.
I as a small business owner simply just sold out to my oldest son,
and now he is in that situation, that predicament, where he can utilize
this. About 60 percent of the uninsured are employed or are the
proprietors of small business. It is not because they do not care about
their employees. It is because of the law; it is because of the
structure of the regulations. It is essential that we pass this bill.
[[Page H5619]]
Madam Speaker, that is why I rise here today to stand in support of
this bill for association health care plans. It is essential to small
business which provides most of the new jobs and most of the new
innovation in America.
Mr. ANDREWS. Madam Speaker, I yield myself 30 seconds. I want to
again reemphasize that the objective analysis of this bill, contrary to
what we have heard repeatedly today, is that it will increase the
number of uninsured persons. It will do so because those who are not in
AHPs who must still comply with the mandated benefits and other
consumer protection laws will experience an escalation in premiums
which will cause a reduction in coverage. We believe the record is
clear, that the passage of this bill will increase the number of
uninsured persons by 1 million people.
Madam Speaker, I reserve the balance of my time.
Mr. BOEHNER. Madam Speaker, I yield myself the balance of my time. We
could look at the problem of the 41 million Americans through many
different lenses, and we could talk about solutions. We believe that we
are bringing a solution here where we are showing the glass half full.
{time} 1500
My colleagues on the other side want to look at this solution as a
glass that is half empty. The fact is that 41 million Americans have no
health insurance, and we in this Congress, over the last decade, have
talked about it and talked about it and talked about it. As a matter of
fact, we brought this bill to the floor on two occasions before today,
and unfortunately the other body did not see fit to move the
legislation. But we are not going to quit because if we do not help
these 41 million Americans who have no health insurance, guess what,
they are going to continue to get sicker. They are going to end up
getting treatment later in their illness, and they are going to
continue to pile up massive amounts of healthcare debt that by and
large they do not pay for, those who purchase health insurance pay for
in terms of higher fees.
We have heard all of the discussion about the fact that we do not
mandate this coverage and mandate this coverage.
The reason that we have the crisis in many States is because they
have mandated every coverage known to man be stipulated in each of the
policies, whether they need the coverage or not. Large employer plans
do not have mandates other than two small mandates that are in ERISA.
Neither did the union plans. They cover virtually all of these diseases
and all of these treatments because that is what their employees want.
We know that bare-bones policies do not work because employers do not
buy them and their employees do not want them. And if we look at the
best plans in America, they happen to be large employer plans, union
plans that cover broad healthcare coverage and those employees love
those plans.
Why would we not allow small businesses to come together, and whether
it is through the Ohio Chamber of Commerce or the National Restaurant
Association or the Lumbermen's Association, or how about the Farm
Bureau, why would we not allow them to allow their members to come
together where they could offer them a package of healthcare plans?
Maybe it is one or two, maybe it is four or five potential plans that
their members would get to choose from.
Take the issue of farmers, I have got a lot of farmers in my
district. They are independent contractors. Their ability to go out and
buy health insurance on not on their own is about zero unless they
wants to pay $1,000 to $2,000 a month. If they were allowed to come
together with other farmers around Ohio, other farmers around the
country, guess what? They would get much better coverage than they are
getting today at far less cost, and why should we not give them the
opportunity to do this?
So I say to my colleagues as we end the general debate today, this is
a good bill. It has strong bipartisan support, and I urge my colleagues
to support the underlying bill.
Ms. MAJETTE. Madam Speaker, today I voted against passage of H.R.
660, the legislation that would establish Association Health Plans
(AHP's). Despite its intention to allow small businesses to band
together in order to offer affordable health care benefits to their
workers, this proposal will, in fact, make coverage more expensive for
most small businesses and their employees. Though I support the intent
of this legislation, some serious flaws became apparent during my
consideration of the legislation in the Education and Workforce
Committee, which prevented my support.
According to the Congressional Budget Office, 4 out of 5 of the small
businesses that now have health coverage would face higher costs if
H.R. 660 was enacted. A recent report by Mercer Risk, Finance &
Insurance Consulting for National Small Business United underscored
this fact, finding that H.R. 660 would make health coverage more, not
less expensive for many small businesses. In Georgia there are 722,535
people that get insurance coverage through small businesses. If H.R.
600 passes, 578,028 of these individuals will pay higher premiums.
The problem with the legislation that will cause insurance costs to
increase is a provision which preempts State laws regarding the degree
to which insurance premiums can vary for different companies with a
plan. Therefore, firms can be charged wildly different rates based on a
variety of factors, including health status and age. This legislation
would allow some nefarious companies to unfairly discriminate against
consumers on the basis of age, gender or race. The ultimate effect, is
that firms with sicker employees will not be able to afford coverage
under an AHP. This means those firms and the firms currently in the
traditional insurance market will end up paying higher premiums.
Instead of offering a meaningful coverage alternative, AHP's would only
help to those healthy enough to qualify for lower rates.
Furthermore, this legislation prevents a State's insurance
commissioner from protecting consumers' rights when they have concerns
about their association health plan. The bill does not specify who has
the duty or the authority to help consumers if they have a problem with
their AHP. Instead, the bill creates a complex web of authority, in
which consumers might only have recourse through the U.S. Department of
Labor, which does not have the manpower or expertise to provide that
help.
When consumers have a serious problem with their health insurance
coverage, they need to know they have somewhere they can go for real
assistance. H.R. 660 just fails to guarantee that and could make it
very difficult for consumers to get any assistance with their health
insurance problems.
I offered amendments in the Education and the Workforce Committee to
correct both of these key concerns and improve H.R. 660, but both were
rejected. For this reason, and because of my overarching concern that
the bill falls short in delivering real help for small businesses, I
opposed final passage of H.R. 660. In doing so, I was supported by a
diverse array of over 500 national, State and local organizations
including small business, consumer, insurance, union, provider, and
patient advocate groups, as well as Georgia's Attorney General and
Insurance Commissioner, who have joined in opposition to H.R. 660. I
will continue to be an advocate for the interests of small businesses,
but am convinced that H.R. 660 does not address the problems they face.
I will continue to work with my colleagues to draft legislation that
would give small businesses more options in offering health insurance
without supplanting Georgia's consumer protection laws.
Mrs. JONES of Ohio. Madam Speaker, I rise today in opposition to H.R.
660. The bill will exempt those businesses that decide to form
Association Health Plans from health insurance regulation of the
various States. Thus, under the bill, these association health plans
could operate in different States but would not be subject to the
different health insurance regulations of those States. Instead, they
would be subject to regulation by the Labor Department. This Bill would
allow ``Cherry Picking.'' As the premiums rise, the employers will have
the chance to pick who will receive the health care, which means, the
employers will pick the youngest, and the healthiest for the plan so
that it would not cost them as much. As a result, thousands of the
sickest workers would end up losing coverage altogether. AHP will offer
a very minimum benefits package that does not include cancer screening,
mental health benefits, or autism coverage. CBO reports show that there
are 41 million uninsured Americans and only 550,000 currently uninsured
Americans would gain coverage and this number is less than one percent
of the country's Americans uninsured. As health care cost rises, the
problem of the uninsured shall only get worse. Ooh I get it!. Hurt
small employers and make coverage unaffordable for all but the
healthiest groups. According to the Congressional Budget Office.
Two-thirds of the lower premiums realized through AHPs would come
from risk selection, and most of the rest would come from eliminating
benefits.
[[Page H5620]]
Insured individuals switching from their current plan to an AHP would
outnumber the newly insured 14-to-1.
20 million individuals would face additional rate increases under
AHPs, and 10,000 of the sickest individuals would lose coverage
entirely.
The 80 percent of small business employees not participating in AHPs
would almost uniformly see their premiums increase.
Madam Speaker, Associated Health Plans will hurt Small Businesses and
increase the ranks of the uninsured.
Mr. UDALL of Colorado. Madam Speaker, I rise in opposition to H.R.
660, the Association Health Plan bill we are considering today.
While I sympathize with the challenges that many small businesses
face in providing health insurance to their employees, I do not think
that exempting AHPs from State oversight is the right solution. I agree
with the National Governor's Association, the National Association of
Insurance Commissioners, the National Association of Attorneys General,
the Health Insurance Association of America, and many other groups that
oppose Federally regulated AHPs. I am most concerned that AHPs would be
regulated under Federal laws and would be exempted from State laws that
govern premium increases, benefits, consumer protections, and financial
standards. H.R. 660 would override Colorado's new AHP law even before
we have time to see if it is working. Additionally, H.R. 660 does not
provide any resources to the Department of Labor to carry out important
oversight functions. I believe this leaves room for much of the same
abuse and fraud that we experienced with Multiple Employer Welfare
Associations in the 1980s.
Insurance is based on the principle of pooling healthy and sick
groups together so that the cost is more evenly distributed. Under this
bill, associations would be able to circumvent State pooling
requirements and siphon off healthier groups. As a result, sicker
people would be left in State regulated pools, and the cost of care for
these individuals would be shifted to the rest of us through higher
taxes and premiums. The non-partisan Congressional Budget Office
estimates that 80 percent of small employers and their families would
face rate increases under this legislation.
I continue to believe that refundable health care tax credits and
investments in our public health system would go much further in making
health care more affordable and reducing the number of uninsured in our
Nation. That's why I am supporting the substitute offered by Rep. Ron
Kind, which would establish the Small Employer Health Benefits plan and
provide Federal subsidies to small employers who have fewer than 100
employees and offer health insurance to them.
Madam Speaker, Americans are concerned that if they get sick, they
won't have health insurance coverage, or they are worried they will
lose their health care in this sluggish economy. I too am concerned
about the rising cost of health care and the uninsured, but removing
oversight over insurance and scaling back consumer protections,
benefits and coverage is not the way to go. I will continue to work on
meaningful health care reform that makes insurance more affordable and
provides coverage to the uninsured.
Mr. STARK. Madam Speaker, I rise today to oppose H.R. 660, the
``Small Business Health Fairness Act of 2003.'' This bill is badly
misnamed. Rather than make the cost of health insurance for small
businesses more fair, this bill would have the perverse effect of
increasing the cost of health insurance for many people and increase
the number of people without health insurance altogether.
This bill would allow these new entities, called Association Health
Plans (AHPs), to bypass State regulation and offer bare-bones health
insurance policies. Small businesses that don't choose to offer these
inadequate policies would see their premiums increase by 23 percent on
average. This premium hike would occur because AHPs, which would offer
only skeletal coverage, would attract the healthiest individuals,
leaving traditional health insurance plans with the sickest and most
expensive patients. This shift would penalize businesses with sicker
employees, and make health insurance for those who need it the most
even more unaffordable.
Further, this legislation would swell the ranks of the uninsured by
over one million more individuals. As traditional health insurance
becomes increasingly expensive, more and more businesses would have no
choice but to drop health insurance for their employees, leaving these
individuals with little or no opportunity to purchase health coverage.
Contrary to what proponents of this bill claim, AHPs would not truly
help small businesses purchase health insurance for their employees.
Although proponents claim that AHPs would give small-employers
bargaining power to purchase affordable health insurance, most States
already have laws in place that allow for group purchasing
arrangements. This bill would only harm existing laws while usurping
the traditional role of States to regulate insurance.
In fact, this bill would override key State laws and regulations that
protect millions of Americans. For example, many States regulate
insurance premiums to prevent insurers from discriminating against the
ill. But under this bill those laws wouldn't apply. AHPs would be
allowed to offer extremely-low ``teaser'' rates, and then rapidly
increase the premium if the enrollee becomes sick. Furthermore, nearly
all States have enacted external review laws which guarantee patients
an independent doctor review if a health plan denies them coverage for
a particular service. Patients who join AHPs would lose this vitally
important consumer protection.
This bill also exempts AHPs from State laws that require health
insurance to cover particular benefits. These laws have helped to
ensure that millions of Americans get access to the healthcare that
they need--such as mammography screenings, maternity care, well-child
care, and prompt payment rules. In my State, California, employees who
join AHPs could well lose access to these services as well as certain
emergency services, direct access to OB/GYNs, mental health parity, and
other important benefits. Moreover, this law would allow health plans
to ``gag'' doctors, the currently illegal practice of health insurers
preventing doctors from discussing treatment options that the plan does
not cover, even if some of those options are in the patient's best
medical interest.
The problems go on. AHPs are likely to create new fraud and abuse
problems in health care as well. These plans are very similar to
Multiple Employer Welfare Plans (MEWAs) which Congress created in the
1970s. MEWAs were also exempt from State insurance regulation. The
Department of Labor found that many of these plans were frauds and left
their enrollees holding the bag for more than $123 million in unpaid
health expenses. Congress had to come back and clean up the law to end
this blatant abuse. We should learn from that mistake--not repeat it!
This bill is bad for patients, bad for small business, and bad for
States. It is opposed by over 500 organizations--including both the
Democratic and Republican Governors Associations, local Chambers of
Commerce, small business associations, physician organizations, labor
unions, and healthcare coalitions. H.R. 660 would increase premiums,
increase the number of uninsured, lead to massive fraud, and remove key
State protections. I urge my colleagues to reject this legislation.
Mr. CUMMINGS. Madam Speaker, I rise today to speak against the bill
being considered today. With over 41 million Americans uninsured,
Congress' chief objective should be to ensure that these people have
access to quality health care coverage. However, today we consider
legislation that actually would be an even greater detriment to the
current health insurance coverage crisis, than doing nothing at all.
The Congressional Budget Office estimates that over 4 million
individuals who currently have health coverage will be switched to
lower benefit Association Health Plans (AHP) if this bill is passed.
This means that these individuals could be forced into plans that would
exclude benefits such as mammography screening, cervical cancer
screening, check-ups for children, bone marrow transplants and diabetic
supplies. These are critical needs, not options and this is an unfair
result.
Another flaw with this bill is that it doesn't actually help small
employers. The problem for most small employers is not their lack of
desire to provide healthcare coverage, but often the lack of cash flow
to afford monthly healthcare coverage. However, this bill does not
assist small employers or their employees to afford rising monthly
healthcare premiums. CBO found that the small businesses most likely to
get more affordable coverage with lower premiums under AHPs would be
those with the healthiest groups of employees. What this means is that
least healthy, older employees and their employers would have higher
premiums. This is just plain cherry-picking, which only puts the rest
of non-AHP employees at risk of higher rates of coverage.
The CBO also estimates that AHPs would provide coverage for less than
one percent (1 percent) of the 41 million uninsured Americans. As such,
H.R. 660 fails to significantly expand health coverage for the
uninsured and in fact, would reduce coverage for those who are
currently insured by forcing them to switch to lower benefit AHP health
plans. This will drive up the costs for other insured and will result
in the loss of affordable health care coverage for at least 1,000,000
employees. This represents a net loss, not a net gain in helping the 41
million uninsured in this country.
Any bill that excludes significant health care benefits, especially
for women, children and the elderly; that does not significantly expand
health coverage for the uninsured; and that may allow minority
communities and the elderly to be redlined and denied affordable health
insurance, is ``fig leaf'' legislation which will do little to nothing
to meet the needs of those small business employers it alleges to help.
[[Page H5621]]
Every American, despite his/her employer deserves to have first-class
health coverage. This bill does not accomplish this goal--which
explains why it is opposed by over 500 groups, including the AFL-CIO,
AFSCME, the National Governors' Association, many State Attorneys
General and many consumer organizations. I lend my voice to this
opposition and urge my colleagues to vote against H.R. 660.
Mr. WELDON of Florida. Madam Speaker, one of the issues about which
my constituents most frequently contact me is the high cost of health
insurance and the need for affordable insurance coverage. We all know
health insurance premiums are increasing significantly each year. As
such, many small businesses are unable to afford health insurance for
their employees. Furthermore, for those who can afford insurance for
their employees, rising costs make U.S. products more expensive,
harming U.S. competitiveness and costing American jobs.
Just last month I received a letter in my office written by a small
business owner in Palm Bay, Florida. In it he wrote, ``As an
independent businessman, I can only afford the most basic of health
insurance policies for myself, of which premiums have gone up over 100
percent in the past two years, I might add. I sacrifice greatly to
insure myself. But it is getting to the point I may not be able to
afford health insurance myself.'' I know he is not alone. We have all
heard similar stories.
Small businesses are the backbone of our economy, but the financial
viability of many small businesses is being hurt by the escalating
costs of health insurance. This hurts job creation and economic growth.
The U.S. Small Business Administration's Office of Advocacy found that
administrative expenses for small health plans make up about 35 percent
of total costs. This is not good for small business owners, their
employees, or the American economy. Congress must address this problem,
which is why I support H.R. 660, the Small Business Health Fairness
Act.
By passing H.R. 660 Congress will be leveling the playing field
between small businesses, the self-employed and large corporations.
This allows organizations of individuals and businesses to enter into
an Association Health Plan (AHP). Under an AHP, small businesses can
pool their resources and purchase health care similar to the way large
corporations do. They can get better bargaining power in terms of costs
and benefits for their employees. It gives workers, who do not have
health insurance today, the opportunity to obtain health insurance
coverage.
Whether it is a small business, a trade association, a farm bureau,
or a local community organization that is seeking to purchase more
affordable health insurance, this legislation will help them.
It is generally accepted that there are 41 million people in America
without health insurance at any given time. According to the
Congressional Budget Office, a more accurate estimate of the number of
people who were uninsured for all of an entire year is 21 million to 31
million. Regardless, almost 60 percent of those individuals are
employed by a small business. As health care costs increase, fewer and
fewer employers and working families will be able to afford coverage,
and more Americans will be without adequate health insurance. Those who
work for small businesses should have the same type of access to
quality health insurance that their counterparts in large corporations
already enjoy.
I urge Congress to pass H.R. 660. Congress must pass this bipartisan
legislation to give much needed relief to American small businesses,
farmers, and hard working families.
Mr. NORWOOD. Madam Speaker, it is my opinion that H.R. 660 will hurt
the ability of small employers to access insurance coverage. Contrary
to creating larger pools of small employers, H.R. 660 will fragment the
small group insurance market into a myriad of smaller and smaller pools
with healthy small firms separated from those firms with sick
employees. The basic fabric of small employer insurance--that healthy
and sick must be pooled together to create cross-subsidies--will be
irreparably torn to the detriment of all small firms. Small firms will
be returned to the unstable and erratic marketplace of the 1980's--
before states imposed small group reform protections. Specifically, the
dissenting Members of the Committee find that H.R. 660 will lead to:
(1) Higher Premiums for Most Small Firms and Rampant Discrimination
(II) Widespread AHP Failure and Millions of Dollars in Unpaid Claims
(III) More Uninsured--Particularly Among the Most Vulnerable
(IV) Consumers Stripped of Their State Protections
(V) No Administrative Cost Savings
(1) Higher Premiums for Most Small Firms and Rampant Discrimination
H.R. 660 would allow insured Association Health Plans (AHPs) to avoid
covering the oldest and sickest smallest employers by charging them
unaffordable rates that would not be allowed if the AHP was subject to
state law. As a result, the Congressional Budget Office (CBO) found
that 80 percent of small employers would see their premiums increased
as a result of the passage of H.R. 660. A June 2003 Mercer study
predicts health insurance premiums will increase by 23 percent for
small employers that continue to purchase state regulated insurance.
Under H.R. 660, insured AHPs could ``forum-shop'' for the state with
the weakest rating rules (a handful of states lack any formal premium
restrictions). Once the AHP's policy is approved in a weekly regulated
state, the AHP may sell the coverage across the country without regard
to the rating rules in the remaining 49 states.
For instance, New York is normally a community rating state that does
not allow variation of rates between small employers because of
differences in the health status of their employees. But an insured AHP
could sell coverage in New York that charges much higher premiums to
small employers with sick employees. This will allow the AHP to attract
low-risk employers from the state regulated pool--a practice known as
``cherry-picking''. Employers with sick employees would remain in the
state regulated pool because they would be effectively barred from the
AHP through the quotation of exorbitant rates. The Small Business
Administration 2003 study on Association Health Plans describes it as
follows:
``Thus AHPs located in states with the less stringent state
laws could offer insurance to the lower cost groups that are
now forced to subsidize higher cost groups in those states
that require community rating or narrow rate ``bands.''
The American Academy of Actuaries warns against this exemption of
AHPs from state rating rules:
``The result would be that small employers whose employees
are greater health risks are more likely to obtain coverage
from the private health insurance market, where rates are
limited, than through AHPs, who may not have the same
limitations. State small group legislation sought to
eliminate this sort of selection in the market by requiring
health insurers to put all their small groups in one pool and
to limit the premium charged to one employer relative to
another. Introducing AHPs that are not required to adhere to
the same rating rules brings selection back into the market.
The consequence will be that the rates for the two pools will
diverge, causing further instability in an already fragile
marketplace.''
The Committee had an opportunity to clarify this critical point
during the Committee mark-up. Representative Majette (D-GA) offered an
amendment that would have prohibited AHPs from varying the rates of
small employers beyond the variance allowed under state law. The
Committee rejected this amendment.
Indeed, it appears that proponents of AHP passage have long held
evasion of state rating rules as a key objective. In ``Insuring the
Uninsured through Association Health Plans,'' the AHP proponent
National Center for Policy Analysis argues against premium rating
restrictions in the small group market because they ``keep premiums
artificially low for the sickest groups and artificially high for the
healthiest.'' NCPA argues that ``in a competitive market, every new
person in a plan will tend to be charged a premium that reflects the
expected costs of that person's health care at the time of entry into
the plan. . . . However, in health insurance the tradition is to scorn
new entrants for `cherry picking.' Yet cherry picking is nothing more
than trying to satisfy consumer needs better than a rival.''
It is also important to recognize that H.R. 660 would allow
discrimination against small firms with sick employees before and after
enrollment with an AHP. In this cruel ``bait and switch'' game, a small
firm believes it has secure health insurance coverage only to find it
placed in jeopardy when an employee falls ill. The Small Business
Administration 2003 study describes the post-enrollment discrimination
process:
The House legislation, however, would also permit some of
the abuses of the insurance principle that led states to
adopt the rate reform legislation in the early 1990's. Some
states still permit insurers to use forms of durational tier
rating based on claims experience or ``reunderwriting'', the
practice of processing claims information in a manner similar
to the initial underwriting process, typically using
diagnosis-based or other risk adjustment to determine like
future claims experience and appropriate rerating action. The
association's insurer could offer very low rates as long as
all of a group's members are in good health, but increase the
premium to reflect the fully anticipated cost when one or
more group members develop expensive health conditions. AHPs
would be mainly regulated by DOL which does not have the
resources and experience of state insurance departments. \7\
The ability of AHP's to forum shop for the most lenient state means
that a small firm enrolled in an AHP who has an employee contract
cancer, or another dread disease, could
[[Page H5622]]
face an immediate--and unlimited--premium increase. The AHP would not
necessarily have to wait until renewal to impose this premium increase
and the premium increase could be of such a magnitude that the small
firm would have no choice but to drop coverage. Although the firm could
return to the state regulated market on a guaranteed issue basis, the
premiums offered by regulated carriers would be very high because of
the fact that AHPs had ``cherry picked'' the low-risk firms away from
the state regulated pool. Ultimately, this dramatic adverse selection
will drive carriers from the unsustainable state regulated small group
market leaving high-risk small firms with no access to coverage within
a short period following AHP passage.
With regard to self-funded AHPs, H.R. 660 allows them to
differentiate the premiums of small firms based on health status to the
extent state law allows. This is contrary to the Committee's stated
objective of furthering the ability of AHPs to play the same role that
large employers play under ERISA. Section 702 (b) of ERISA--added by
the Health Insurance Portability and Accountability Act--clearly
prohibits large employers from charging similarly situated employees
different premiums based on their health status:
A group health plan, and a health insurance issuer offering
health insurance coverage in connection with a group health
plan, may not require any individual (as a condition of
enrollment or continued enrollment under the plan) to pay a
premium or contribution which is greater than such premium or
contribution for a similarly situated individual enrolled in
the plan on the basis of any health status-related factor in
relation to the individual or to an individual enrolled under
the plan as a dependent of the individual.
This means that two computer engineers working in Seattle for
Microsoft can expect to pay the same premium for their employer group
health plan--even though one is very sick with cancer and the other
perfectly healthy. Under H.R. 660 however, a sick computer engineer's
firm could be charged a much higher premium than a healthy computer
engineer's firm even though both firms are members of the same
Association--perhaps a Seattle Association dedicated to technology
start-ups.
Clearly H.R. 660 is not furthering the ability of small employers to
access the stability of large employer coverage; instead it is
retracting the stabilizing protections small employers enjoy under
current state law. Furthermore, limiting a self-funded AHP's ability to
rate based upon health status to state law will not limit an AHP's
ability to ``cherry-pick'' from the state regulated market. Ample
opportunity for risk selection remains, including:
Rating based upon age and gender: H.R. 660 would exempt AHPs from
state rules that limit the ability to increase a firm's premiums based
on the age and gender of employees. Older individuals typically
generate claims costs nearly seven times those of younger individuals.
In fact, actuaries consider age as a very close proxy for health
status. Young females typically generate significantly higher claims
than those of their male counterparts. With the unlimited age/gender
rating flexibility granted under H.R. 660, AHPs could offer very low
rates to firms with low-cost younger workers, draining the state
regulated pool of the types of firms needed to keep premiums stable for
firms dominated by older individuals or women in their childbearing
years.
Geographic ``Redlining'': H.R. 660 allows AHPs flexibility to
determine their geographic service area. AHPs would be free to avoid
geographic locations with high health care costs. They could choose to
avoid certain parts of a city with populations with a high prevalence
of expensive illnesses. For instance, Hispanic Americans have a
disproportionately high rate of diabetes, and the African American
community has been particularly hard hit by AIDS. AHPs could avoid
selling coverage in minority neighborhoods--or charge a much higher
premium to firms located in those areas--as a proxy for rating for
health status. AHPs also could avoid geographic locations where
significant portions of residents engage in high-risk occupations--they
could avoid lumberjacking towns or farming communities. The League of
United Latin American Citizens and the National Council of La Raza
recognize these risks and have opposed H.R. 660.
Exclusion of Very Small Firms: So-called ``baby groups''--firms with
fewer than 5 employees--are actuarially very expensive to insure. Their
claims expenses generally are much higher than those of firms with
more employees. HIPAA requires insurers to accept these very small
groups and states require insurers to pool these very small firms with
the rest of the small group pool. H.R. 660 would allow AHPs to exclude
very small firms from their membership altogether (e.g. establish a
``mid-sized'' business association) or accept the small firms as
members but charge them much higher premiums than their larger
counterparts.
The use of age, gender, geography and firm size in rating practices
provide the flexibility necessary for self-funded AHPs to limit their
covered lives to low-risk, low-cost firms. Opponents to this
legislation recognize that the rampant cherry picking H.R. 660 will
foster will hurt all small firms in the long run. That is why the
American Academy of Actuaries and the National Association of Insurance
Commissioners are joined in their opposition to H.R. 660 by the
following business organizations:
National Small Business United
28 Chambers of Commerce
Four Farm Bureaus
10 Local Small Business Associations (e.g. New Hampshire High Tech
Council)
17 Labor Organizations
(II) Widespread AHP Failure and Millions of Dollars in Unpaid Claims
The General Accounting Office (GAO) reported that a previous 1974
preemption of state law for Multiple Employer Welfare Arrangements
(note: all AHPs are MEWAs) left nearly 400,000 consumers with over $123
million in unpaid bills. H.R. 660 will force this sad history to repeat
itself--but the unfortunate results will be magnified since the growth
of the internet and other communications channels will allow unsound
AHPs to attract vulnerable members at a much more rapid rate.
Former Chief Counsel for the Senate Permanent Subcommittee on
Investigations and Inspector General for the Department of Defense
Eleanor Hill warns:
AHPs are fundamentally the same types of organizations as
many MEWAs that have, in the past, been sponsored through
associations. If exempted from state regulation, AHPs would
pose the same kinds of unacceptable risks to consumers. . . .
Nothing in this legislation would prevent the same
proliferation of plan failures and consumers losses that
occurred when these types of organizations were last clearly
exempt from state regulation.\8\
Former FDIC and Resolution Trust Corporation Chairman Bill Seidman
also has issued warnings regarding the exemption of AHPs from state
oversight: ``I am concerned that it places consumers at risk and could
set the stage for a taxpayer bailout similar to the one necessitated by
the savings and loan failures of the 1980's.
AHP failures will be driven by three fundamental weaknesses in H.R.
660:
1. DOL Lacks Resources and Expertise to Takeover State Regulation of
Self-funded AHPs
2. Insured AHPs will Exist in a Regulatory Vacuum, with Neither the
States or DOL Able to Regulate
3. Solvency Standards are Inadequate
DOL Lacks Resources and Expertise to Takeover State Regulation of Self-
funded AHPs
Transferring regulatory authority of self-funded AHPs to DOL will
represent a monumental change in the scope of DOL's regulatory
responsibilities. Although it is often quoted that DOL currently
administers ERISA for current group health plans--DOL's role is very
limited. They are not responsible for reviewing reserve levels or
assuring that actuarially fair premiums are charged and they are not in
constant monitoring mode as state insurance commissioners are. DOL has
admitted that its enforcement efforts under ERISA are:
. . . considerably different from and often more limited than
the remedies generally available to the states under their
insurance laws. In this regard, it is important to note that,
in many instances, states may be able to take immediate
action with respect to a MEWA upon determining that the MEWA
has failed to comply with licensing, contribution or reserve
requirements under State insurance laws whereas investigating
and substantiating a fiduciary breach under ERISA may take
considerably longer.
In fact, H.R. 660 does not even authorize the Secretary to
immediately terminate a failing AHP's operations. Instead, it directs
the Secretary to apply to the appropriate United States district court
for appointment as trustee to administer the termination of the plan.
A 2002 General Accounting Office (GAO) report found that DOL's Office
of Pension and Welfare Benefits Administration (PWBA) is understaffed
for its current responsibilities. With regard to pension
responsibilities, the report found that DOL faces an ``overabundance of
work'' as well as ``limited investigative resources'' and ``staff
shortages.'' It found that a review to determine pension plan
noncompliance with ERISA would ``require PWBA's full investigative
staff 90 years to fully and accurately complete.
Similarly in 1997, Assistant Secretary of Labor Olena Berg testified:
``An infrastructure adequate to handle the new responsibilities [for
Association Health Plans] replicating the functions of 50 state
insurance commissioners, simply does not exist.'' Berg noted that the
current staff would be able to review each health plan once every 300
years.
H.R. 660 includes no provisions that would address this problem. No
additional resources or retraining dollars for DOL are included.
Insured AHPs will Exist in a Regulatory Vacuum, with Neither the States
nor DOL able to Regulate
H.R. 660 includes very broad preemption language that appears to
authorize an insured
[[Page H5623]]
AHPO to sell insurance coverage nationwide and disregard the laws of 49
states once its policy is approved in one state. Thus once an AHP has
an approved filing in Michigan, it could sell insurance coverage to New
Yorkers. But who would protect the interests of New York policyholders?
The New York state insurance commissioner will not know which consumer
protection laws are or are not included in Michigan statute. And even
if the New York commissioner was an expert regarding Michigan law, it
is unlikely he would be authorized to enforce such protections. The
enforcement authority of insurance commissioners is generally limited
to the enforcement of their state's laws--not the laws of other states.
Conversely, it is unlikely the Michigan insurance commissioner is
authorized to take action against an insurer for behavior against a
resident of another state. His role is to protect the interests of his
residents.
Thus, the insured AHP would exist in a regulatory vacuum. State
insurance commissioners' hands would be tied by the Federal preemption
provisions, and the Department of Labor's oversight authority is quite
limited with regard to insured AHPs--the focus being on the initial
certification of meeting the Board and other requirements to be
considered a ``bona fide'' association. This regulatory vacuum will
allow fraudulent and sham operations to flourish. Premium dollars will
have disappeared into personal off-shore bank accounts before any
action by regulators can be taken, leaving consumers uninsured and
providers with large unpaid medical bills.
Solvency Standards are Inadequate
The National Association of Insurance commissioners, the American
Academy of Actuaries and others have all criticized H.R. 660 for
inadequate solvency standards. H.R. 660 allows AHPs to maintain as
little as $500,000 in surplus and caps even the largest AHPs at a
$2,000,000 requirement--an amount equivalent to just two premature
million dollar babies in a neo-natal intensive care unit. This is
contrary to typical state solvency regimes which use open-ended rules,
recognizing that the larger an AHP grows the larger a capital base is
necessary. The American Academy of Actuaries notes:
The proposed rules governing the minimum surplus
requirements for AHPs do not account for the growth of the
AHP. Historically, there have been many examples of AHP-like
organizations becoming insolvent. Following such events, most
states enacted solvency standards. To maintain the benefit of
these standards to consumers, the surplus standards should be
similar to the minimum requirements for Heath Risk-Based
Capital (RBC) developed by the National Association of
Insurance Commissioners (NAIC). Also the bills at issue rely
on affordable reinsurance vehicles that do not currently
exist in today's marketplace.
Former Resolution Trust Chairman Bill Seidman warns that ``The
Savings and Loan experience teaches us that a lack of adequate solvency
standards or investment guidelines can quickly lead to financial
failures.'' The NAIC also criticizes H.R. 660 as including ``woefully
inadequate capital reserve requirements'' and further cautions:
The most troubling aspect of the NFIB plan is it lacks
sufficient oversight to ensure that financial struggles do
not result in failures. Under the NFIB legislation, the AHP
would work with an actuary chosen by the company to set
reserve levels with little or no government oversight to
ensure the levels are sufficient or maintained. Also, that
AHP is required to ``self-report'' any financial problems. As
we have seen in recent months, relying on a company-picked
accountant or actuary to alert the government of any problems
can have dire consequences for the consumers who expect to
have protection under their health plan.
The combination of a regulatory vacuum for insured AHPs, an
understaffed and inexperienced DOL and inadequate solvency standards
lay the seeds for a large crop of devastating AHP failures and frauds
across the country that injures thousands of consumers. Organizations
with vast experience in health care fraud--such as the National
Association of Attorneys General--recognize that opposition to H.R. 660
is imperative because ``State oversight and regulation is the best way
to insure that plans remain solvent and that consumers are protected
against fraud.
(III) More Uninsured, Particularly Among the Most Vulnerable
A June 2003 Mercer study performed for National Small Business United
indicates that an additional one million individuals would lose
coverage and become uninsured if H.R. 660 became law. A 1999 Urban
Institute study predicted the uninsured would increase by 250,000 if
AHPs were exempt from state law and the Congressional Budget Office
(CBO) indicated that as many as 100,000 of the sickest individuals
could lose coverage.
While these reports differ in nagnitude, they all predict that AHPs
will worsen the uninsured problem, not solve it as proponents contend.
(IV) Consumers Stripped of Their State Protections
States have enacted a broad pantheon of state consumer protections in
the last decade. A sampling of these protections include:
44 states ensure access to independent review;
48 states limit how much insurers can charge sicker groups;
50 states impose detailed requirements to assure fair marketing;
50 states require mammography screening coverage; and
47 states require diabetic supplies and education.
Self-funded AHPs would be exempt from state consumer protection laws
under H.R. 660. Insured AHPs could forum shop for the state with the
least consumer protection laws and only use those limited protections
when selling in the remaining 49 states. The Committee accepted an
amendment by Rep. Van Hollen (D-MD) that would apply state prompt
payment laws to insured AHPs. This amendment did not apply any other
state consumer protection laws to insured AHPs, nor did it apply state
prompt payment laws to self-funded AHPs. With one stroke, passage of
H.R. 660 would eliminate thousands of state consumer protections across
the country.
(V) No Administrative Cost Savings
Numerous research reports have reviewed Association Health Plans and
all found that lower premiums offered by AHPs would stem from ``cherry-
picking''--because the AHP limits its coverage to the healthiest small
employers--and the avoidance of state mandated benefits. The 2003 Small
Business Administration Study found:
From an objective standpoint, AHPs are likely to lead to
moderately lower insurance premiums from a combination of
lower direct and indirect taxes, avoiding anti-selection and
other cross subsidies, avoiding some mandated benefits and
avoiding the cost to comply with multiple state regulations.
The Congressional Budget Office assumed no administrative savings
from AHPs and predicted that nearly two-thirds of any cost savings from
AHPs would result from attracting healthier members from the existing
insurance pool, with virtually all of the remaining savings stemming
from reduced benefits.
A June 2003 Mercer study estimates that AHPs would gain a pricing
advantage through risk selection, not greater administrative
efficiency. The modeling estimates that the average morbidity (a
measure of whether a firm is ``sick'' or ``healthy'') of firms
enrolling in AHPs would be 21 percent lower than the average morbidity
of small employers in the market today.
These reports found no administrative savings for AHPs because AHPs
would need to perform the same functions as insurers today--enrollment,
billing, claims administration. Providing health insurance to small
firms is resource intensive because the insurer is often providing the
types of services that a large employer receives internally from a
dedicated employee benefits department. Research report after research
report indicates that AHPs cannot avoid those costly functions and that
their prime avenue for costs savings is ``cherry picking'' and benefit
reduction.
Conclusion
Exemptions from state law for Association Health Plans have been
tried and failed before. Far from being a solution to the plight of the
small employer, H.R. 660 would exacerbate the cost and stability
problems in the small employer market. Consumers will find themselves
uninsured just when they need coverage the most--when they fall ill.
And providers will be left with millions in unpaid medical bills.
Furthermore, H.R. 660 will undo the small group reforms woven together
by states over the last decade to respond to the damage and pain that
rampant cherry picking imposed on the small employer community in the
late 80's.
Mr. McKEON. Madam Speaker, I rise today in strong support of H.R.
660, the Small Business Health Fairness Act, which will allow small
businesses to join together to better provide their hard-working
employees with health care coverage. This important legislation will
solve a serious problem with the growing number of uninsured American
workers.
In September 2002, the Census Bureau reported that as many as 60
percent of the 41 million uninsured Americans were employed in small
businesses throughout the country. Over the last few years, small
business employers have become unable to provide their workers with
affordable health care as a result of the rapid and unjust rise in the
cost of health insurance. A survey by Mercer Human Resource Consulting
found that health insurance costs rose 14.7 percent in 2002.
As a former small business owner, I understand the plight felt by
employers, who want to provide employees and their families with
quality health care.
The Small Business Health Fairness Act will afford these smaller
businesses the same rights that large corporations and unions have and
enable their representative associations to form Association Health
Plans (AHPs), which
[[Page H5624]]
will offer health care nationwide to member businesses. AHPs will be
crucial in closing the gap the small business community is facing with
the increase of uninsured American workers.
The opponents of this bill will consistently tell wild tales about
this legislation saying that AHPs will only offer health care to the
healthiest. This assertion is wholly untrue, as the bill specifically
prohibits AHPs from denying people on the basis of health status.
It is imperative that we act now by passing this legislation so that
our nation's small business employees can immediately begin receiving
health care for their families.
We can no longer allow these dedicated employees to live and work
without health insurance.
Mr. KILDEE. Madam Speaker, today we are considering a bill that will
nullify coverage requirements and patient protections that states
across the nation have determined are appropriate and necessary for the
health and well-being of their citizens.
Association health plans will be exempt from state laws that protect
patients, including requirements for external independent review of
denied claims and laws requiring coverage for, mammography screening,
prostate screening, maternity benefits and coverage of diabetes
supplies and education.
The American Diabetes Association states that, ``if allowed to pass
as written, this legislation will undermine state laws that ensure
coverage of essential diabetes medication, equipment, supplies, and
education by state-regulated health insurance policies. Over 475
organizations have voiced their opposition to AHP's, including state
governors, insurance commissioners, attorneys general, state
legislators, providers and physician groups, consumer and advocacy
organizations, chambers of commerce, unions, farm bureaus, and small
business associations.
H.R. 660 will not lead to health insurance cost decrease. According
to the CBO, more than 800,000 workers in my state of Michigan will pay
higher premiums under H.R. 660.
I urge my colleagues to vote for the substitute and oppose H.R. 660,
a bill that hurt, not help, the small business community.
Ms. EDDIE BERNICE JOHNSON of Texas. Madam Speaker, I rise in strong
opposition to the Small Business Health Fairness Act of 2003, H.R. 660.
This legislation would exempt Association Health Plans from state
regulations and oversight.
As a former nurse, I have spent much of my public career working to
ensure that the nation's health care system is affordable and provides
the best services possible to all Americans.
Although I agree in principle with the Small Business Health Fairness
Act H.R. 660), legislation that attempts to reduce the high cost of
health insurance for small businesses and the self-employed, after
careful review I have developed.
One of the problems I have with H.R. 660 is that it would exempt
associated Health Plants (AHPs) from state regulation and oversight. I
am afraid that this could lead to soaring insurance premiums,
discriminatory coverage and loss of crucial protections, such as
guaranteed access to medical care and critical benefits. With over 41
million Americans uninsured, and almost 65 percent of them being
Hispanic or African America, I am extremely concerned that this
legislation coiuld lead to loss of critical health services for some of
the neediest families.
Madam Speaker, while proponents claim that federal AHPs would make
insurance more affordable, and analysis by the Congressional Budget
Office (CBO) concluded that AHPs would save money primarily by ``cherry
picking'' the healthy from the existing insurance pool. The CBO
estimated that as a result of the risk pool fragmentation caused by
AHPS, health premiums would rise for 20 million workers and dependents
while only 4.6 million would experience premium reductions. The CBO
also found that the other source of savings would be the result of the
elimination of state mandated benefits. Examples of benefits likely to
be dropped by AHPs include mental health services, breast and prostate
cancer screenings, maternity coverage and prescription drugs.
I agree that all families should have access to a affordable health
care coverage. But schemes that would exempt association health plans
from state oversight would exacerbate existing problems by causing
further segmentation of the risk pool and putting consumers at greater
risk of plan insolvency and outright fraud. For these reasons urge my
colleagues to oppose H.R. 660
Mr. MARIO DIAZ-BALART. Madam Speaker, small businesses across the
country face no greater challenge than access to affordable health
care. Too often, small businesses are forced to sacrifice growth in
order to provide health care to the employees. Many others are unable
to meet the rising costs of health care and force their employees to go
without altogether.
Over 60 percent of the uninsured in America are small business owners
and employees. Not only are high costs an enormous burden on small
businesses and a large danger for employees, but also an unfortunate
disincentive for growth. Capital lost on high health care costs limit
economic growth of countless small businesses throughout the nation.
No matter the size of business, all Americans deserve access to
affordable health care. Small businesses should have the same access to
health care as their counterparts in large corporations and unions.
There is no rationale for punishing America's entrepreneurs by blocking
the access to affordable health care.
As an original cosponsor of the Small Business Health Fairness Act
(H.R. 660), I stand committed to ending this great injustice to
America's small businesses. As the true foundation of America's
economy, it is essential to ensure small businesses have every
incentive to grow and succeed. Without affordable health care for
employees, small businesses will continue to be burdened with unfair
health care costs resulting in reduced growth.
Associated health plans will allow small businesses owners to join
together in order to purchase health care for their families and
employees. This will not only lower health care costs for small
business owners, but will also provide greater choice.
I ask my colleagues to join me in supporting H.R. 660 and helping the
41 million uninsured Americans receive access to affordable health
care.
Mr. BEREUTER. Madam Speaker, this Member wishes to add his strong
support for the Small Business Health Fairness Act of 2003 (H.R. 660)
which would allow small business owners to band together across state
lines through associations to purchase health insurance for families
and employees.
This Member would like to commend the distinguished gentleman from
Ohio [Mr. Boehner], the Chairman of the House Committee on Education
and the Workforce, and the distinguished gentleman from California [Mr.
Miller], the ranking member of the House Committee on Education and the
Workforce for bringing this important resolution to the House Floor
today; this issue is very timely as this week is Small Business Week.
This Member would also like to commend the distinguished gentleman from
Kentucky [Mr. Fletcher] for sponsoring H.R. 660.
Over the past several years, we have witnessed significant changes in
our health care system. Congress, employers, and the American people
are currently searching for ways to control the cost of health care. In
doing so, it is important that we do not compromise access and quality.
This Member believes that Congress must evaluate three key areas when
considering heath care proposals: affordability so that people can
purchase health care that best fits their needs; accountability, so
patients are guaranteed the quality they were promised; and
accessibility, so millions more Americans can receive high-quality
health care coverage that best fits their personal and family needs.
Access to affordable health insurance is a major problem for many of
the 26 million uninsured Americans who live in families supported by
the self-employed or small business employees. Professional societies
and trade associations have tried to fill that void by offering health
insurance plans to their members. Unfortunately, the myriad of state
regulations and mandatory coverage requirements make it very difficult,
expensive, and often impossible to offer coverage in all 50 states. If
health insurance is not affordable it's not accessible.
The Small Business Health Fairness Act is intended to enhance the
purchasing power of small businesses so that they could purchase such
insurance more cheaply, and thereby provide health insurance coverage
to more people. The association health plans created by the measure
would be exempt from health insurance regulations of the various
states. Thus, under the bill, these association health plans could
operate in different states but would not be subject to the different
health insurance regulations of those states. Instead they would be
subject to regulation by the Labor Department. Similar association
health plan language has been included in patient protection bills that
Congress has recently considered. This Member has always supported
these proposals.
Madam Speaker, in closing, this Member urges his colleagues to
support H.R. 660.
Mr. ANDREWS. Madam Speaker, for all the reasons we have stated, we
oppose the bill.
Madam Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. All time for debate on the bill has expired.
Amendment in the Nature of a Substitute Offered by Mr. Kind
Mr. KIND. Madam Speaker, I offer an amendment in the nature of a
substitute.
[[Page H5625]]
The SPEAKER pro tempore. The Clerk will designate the amendment in
the nature of a substitute.
The text of the amendment in the nature of a substitute is as
follows:
Amendment in the nature of a substitute offered by Mr.
Kind:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Small
Employer Health Benefits Program Act of 2003''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title.
Sec. 2. Establishment of Small Employer Health Benefits Program
(SEHBP).
``Part 8--Small Employer Health Benefits Program
``Sec. 801. Establishment of program.
``Sec. 802. Contracts with qualifying insurers.
``Sec. 803. Additional conditions.
``Sec. 804. Dissemination of information.
``Sec. 805. Subsidies.
``Sec. 806. Authorization of appropriations.
SEC. 2. ESTABLISHMENT OF SMALL EMPLOYER HEALTH BENEFITS
PROGRAM (SEHBP).
(a) In General.--Subtitle B of title I of the Employee
Retirement Income Security Act of 1974 is amended by adding
after part 7 the following new part:
``Part 8--Small Employer Health Benefits Program (SEHBP)
``SEC. 801. ESTABLISHMENT OF PROGRAM.
``(a) In General.--The Secretary shall establish, in
accordance with this part, a program under which--
``(1) qualifying small employers (as defined in subsection
(b)) are provided access to qualifying health insurance
coverage (as defined in subsection (c)) for their employees,
and
``(2) such employees may elect alternative forms of
coverage offered by various health insurance issuers.
``(b) Qualifying Small Employer Defined; Other
Definitions.--For purposes of this part:
``(1) Qualifying small employer.--
``(A) In general.--The term `qualifying small employer'
means a small employer (as defined in paragraph (2)) that--
``(i) elects to offer health insurance coverage provided
under this part to each employee who has been employed by
that employer for 3 months or longer; and
``(ii) elects, with respect to an employee electing
coverage under qualified health insurance coverage, to pay at
least 50 percent of the total premium for qualifying health
insurance coverage provided under this part.
``(B) Elections.--Elections under subparagraph (A) may be
filed with the Secretary during the 180-day period beginning
with the first enrollment period occurring under section 803
and during open enrollment periods occurring thereafter under
such section. Such elections shall be filed in such form and
manner as shall be prescribed by the Secretary.
``(C) Part-time employment.--Under regulations of the
Secretary, in the case of an employee serving in a position
in which service is customarily less than 1,500 hours per
year, the reference in subparagraph (A)(ii) to `50 percent'
shall be deemed a percentage reduced to a percentage that
bears the same ratio to 50 percent as the number of hours of
service per year customarily in such position bears to 1,500.
``(2) Small employer.--The term `small employer' means,
with respect to a year, an employer who employed an average
of fewer than 100 employees on business days during the
preceding calendar year and who employs at least 2 employees
on the first day of the year.
``(3) SEHBP.--The term `SEHBP' means the small employer
health benefits program provided under this part.
``(c) Qualifying Health Insurance Coverage.--For purposes
of this part, the term `qualifying health insurance coverage'
means health insurance coverage that meets the following
requirements:
``(1) The coverage is offered by a health insurance issuer.
``(2) The benefits under such coverage are equivalent to or
greater than the lower level of benefits provided under the
service benefit plan described in section 8903(1) of title 5,
United States Code.
``(3) The coverage includes, with respect to an employee
that elects coverage, coverage of the same dependents that
would be covered if the coverage were offered under FEHBP.
``(4)(A) Subject to subparagraph (B), there is no
underwriting, through a preexisting condition limitation,
differential benefits, or different premium levels, or
otherwise, with respect to such coverage for covered
employees or their dependents.
``(B) The premiums charged for such coverage are community-
rated for employees within any State and may vary only--
``(i) by individual or family enrollment, and
``(ii) to the extent permitted under the laws of such State
relating to health insurance coverage offered in the small
group market, on the basis of geography.
``(d) Other Terms.--
``(1) Health insurance coverage; health insurance issuer;
health status-related factor.--The terms `health insurance
coverage', `health insurance issuer', `health status-related
factor' have the meanings provided such terms in section 733.
``(2) Small group market.--The term `small group market'
has the meaning provided such term in section 2791(e)(5) of
the Public Health Service Act (42 U.S.C. 300gg-91(e)(5)).
``(3) FEHBP.--The term `FEHBP' means the Federal Employees
Health Benefits Program under chapter 89 of title 5, United
States Code.
``SEC. 802. CONTRACTS WITH QUALIFYING INSURERS.
``(a) In General.--The Secretary shall enter into contracts
with health insurance issuers for the offering of qualifying
health insurance coverage under this part in the States in
such manner as to offer coverage to employees of employers
that elect to offer coverage under this part. Nothing in this
part shall be construed as requiring the Secretary to enter
into arrangements with all such issuers seeking to offer
qualifying health insurance coverage in a State.
``(b) Continued Regulation.--Nothing in this part shall be
construed as preempting State laws applicable to health
insurance issuers that offer coverage under this part in such
State.
``(c) Coordination with State Insurance Commissioners.--The
Secretary shall coordinate with the insurance commissioners
for the various States in establishing a process for handling
and resolving any complaints relating to health insurance
coverage offered under this part, to the extent necessary to
augment processes otherwise available under State law.
``SEC. 803. ADDITIONAL CONDITIONS.
``(a) Limitation on Enrollment Periods.--The Secretary may
limit the periods of times during which employees may elect
coverage offered under this part, but such election shall be
consistent with the elections permitted for employees under
FEHBP and shall provide for at least annual open enrollment
periods and enrollment at the time of initial eligibility to
enroll and upon appropriate changes in family circumstances.
``(b) Authorizing Use of States in Making Arrangements for
Coverage.--In lieu of the coverage otherwise arranged by the
Secretary under this part, the Secretary may enter an
arrangement with a State under which a State arranges for the
provision of qualifying health insurance coverage to
qualifying small employers in such manner as the Secretary
would otherwise arrange for such coverage.
``(c) Use of FEHBP Model.--The Secretary shall carry out
the SEHBP using the model of the FEHBP to the extent
practicable and consistent with the provisions of this part,
and, in carrying out such model, the Secretary shall, to the
maximum extent practicable, negotiate the most affordable and
substantial coverage possible for small employers.
``SEC. 804. DISSEMINATION OF INFORMATION.
``The Secretary shall widely disseminate information about
SEHBP through the media, the Internet, public service
announcements, and other employer and employee directed
communications.
``SEC. 805. SUBSIDIES.
``(a) Employer Subsidies.--
``(1) Enrollment discount.--
``(A) In general.--In the case of a qualifying small
employer who is eligible under subparagraph (B), the portion
of the total premium for coverage otherwise payable by such
employer under this part shall be reduced by 5 percent. Such
reduction shall not cause an increase in the portion of the
total premium payable by employees.
``(B) Employers eligible for discounts.--A qualifying small
employer is eligible under this subparagraph if such employer
employed an average of fewer than 25 employees on business
days during the preceding calendar year.
``(2) Employer premium subsidy.--
``(A) In general.--The Secretary shall provide to
qualifying small employers who are eligible under
subparagraph (C) and who elect to offer health insurance
coverage under this part a subsidy for premiums paid by the
employer for coverage of employees whose individual income
(as determined by the Secretary) is at or below 200 percent
of the poverty line (as defined in section 673(2) of the
Community Services Block Grant Act (42 U.S.C. 9902(2)),
including any revision required by such section) for an
individual.
``(B) Subsidy scaled according to size of employer.--The
subsidy provided under subparagraph (A) shall be designed so
that the subsidy equals, for any calendar year--
``(i) 50 percent of the portion of the premium payable by
the employer for the coverage, in the case of eligible
qualifying small employers who employ an average of fewer
than 11 employees on business days during the preceding
calendar year;
``(ii) 35 percent of the portion of the premium payable by
the employer for the coverage, in the case of eligible
qualifying small employers who employ an average of more than
10 employees but fewer than 26 employees on business days
during the preceding calendar year; and
``(iii) 25 percent of the portion of the premium payable by
the employer for the coverage, in the case of eligible
qualifying small employers who employ an average of more than
25 employees but fewer than 51 employees on business days
during the preceding calendar year.
[[Page H5626]]
``(C) Employers eligible for premium subsidy.--A qualifying
small employer is eligible under this subparagraph if such
employer employed an average of fewer than 50 employees on
business days during the preceding calendar year.
``(b) Employee Subsidies.--
``(1) In general.--The Secretary shall provide subsidies to
employees whose family income (as determined by the
Secretary) is at or below 200 percent of the poverty line (as
defined in section 673(2) of the Community Services Block
Grant Act (42 U.S.C. 9902(2)), including any revision
required by such section) for a family of the size involved.
``(2) Amount of subsidy.--Such subsidies shall be in an
amount equal to the excess of the portion of the total
premium for coverage otherwise payable by the employee under
this part for any period, over 5 percent of the family income
(as determined under paragraph (1)(A)) of the employee for
such period.
``(3) Coordination of subsidies.--Notwithstanding paragraph
(1), under regulations of the Secretary, an employee may be
entitled to subsidies under this subsection for any period
only if such employee is not eligible for subsidies for such
period under any Federal or State health insurance subsidy
program (including a program under title V, XIX, or XXI of
the Social Security Act). For purposes of this paragraph, an
employee is `eligible' for a subsidy under a program if such
employee is entitled to such subsidy or would, upon filing
application therefore, be entitled to such subsidy.
``(4) Authority to expand eligibility.--The Secretary may,
to the extent of available funding, provide for expansion of
the subsidy program under this subsection to employees whose
family income (as defined by the Secretary) is at or below
300 percent of the poverty line (as determined under
paragraph (1)).
``(c) Procedures.--The Secretary shall establish by
regulation applications, methods, and procedures for carrying
out this section, including measures to ascertain or confirm
levels of income.
``SEC. 806. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated, for the period
beginning with fiscal year 2004 and ending with fiscal year
2014, $50,000,000,000 to carry out this part, including the
establishment of subsidies under section 805.''.
(b) Report on Offering National Health Plans.--Not later
than 18 months after the date of the enactment of this Act,
the Secretary of Labor shall report to Congress the
Secretary's recommendations regarding the feasibility of
offering national health plans under part 8 of subtitle B of
title I of the Employee Retirement Income Security Act of
1974, as added by subsection (a).
(c) Clerical Amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 is
amended by inserting after the item relating to section 734
the following new items:
``Part 8--Small Employer Health Benefits Program (SEHBP)
``Sec. 801. Establishment of program.
``Sec. 802. Contracts with qualifying insurers.
``Sec. 803. Additional conditions.
``Sec. 804. Dissemination of information.
``Sec. 805. Subsidies.
``Sec. 806. Authorization of appropriations.''.
Amend the title so as to read: ``A Bill to provide for the
establishment in the Department of Labor of a Small Employer
Health Benefits Program.''.
The SPEAKER pro tempore. Pursuant to House Resolution 283, the
gentleman from Wisconsin (Mr. Kind) and a Member opposed each will
control 30 minutes.
The Chair recognizes the gentleman from Wisconsin (Mr. Kind).
Mr. KIND. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, we have had I think a very enlightening discussion so
far today in regards to the real impact of these associated health
plans, what they are potentially capable of doing and what the danger
of them are. As the gentleman from New Jersey (Mr. Andrews) has been
citing repeatedly, there is an objective study there indicating the
potential impact if this legislation enacted of increasing the ranks of
the uninsured throughout the country by an additional million people.
That is heading in the wrong direction considering we have 41 million
uninsured today, many of them, between 50 and 60 percent of that 41
million, working in small businesses throughout our Nation.
We have a serious issue that requires a serious response and a
serious plan to provide some real relief for small business employers
to their employees. These are people who wake up every morning. They go
to work. They play by the rules. They are asking for basic health care
coverage like their neighbors next to them.
Unfortunately, H.R. 660 pulls up a little bit short in a couple of
respects. First of all, it creates a current two-tiered system
exempting the health care plans from currently State-regulated
requirements. These are decisions made by State legislatures reflecting
community values in regards to what type of health care coverage is
important for their citizens, for their communities, for the society at
large. And what is being proposed now is exempting a whole category of
health insurance plans from basic health coverage such as cancer
screening, mammographies, prenatal care, maternity care, diabetes,
autism coverage in some States, and for those whoever worked with
autistic children understand the importance of treating autism is early
recognition, early intervention, and a lot of times that will not occur
unless there are health plans that provide such coverage, and if we do
not intervene early in these children's lives, there are exponentially
greater costs for society at large down the road.
We offer a substitute, which I believe addresses the challenge that
we are facing as a Nation more honestly and more fairly. The Democratic
alternative that I have worked on with the gentleman from New Jersey
(Mr. Andrews) and others on the committee would provide direct
assistance to small businesses and their employees, another shortcoming
of H.R. 660. There is no incentive, there is no help financially to
enable employers to provide this type of coverage for their employees.
And everyone I know is familiar with the small business employer that
is operating on the margin, oftentimes losing money rather than making
money.
And if there is not some type of financial incentive that our
substitute bill offers it is unlikely that they are going to be able to
extend their health insurance coverage to their employees who currently
do not have them.
What our substitute would do is it would direct the Department of
Labor to establish a small employer health benefit plan similar to the
Federal Employee Health Benefits Plan. Many of the Members of Congress
here today are members of the Federal Employee Health Benefits Plan. I
have not encountered too much criticism of the health plan that Members
of Congress are receiving. I think small business owners and their
employees should be given the same opportunity on an affordable basis.
The program would contract with State license insurers to offer a
minimum insurance package for all employees of businesses of fewer than
100 people. Small businesses would be eligible for a premium assistance
under our plan as would employees earning below 200 percent of the
poverty level.
This alternative has the potential of providing health insurance
coverage to 33 million Americans who currently go without it today. The
number stands in stark contrast to the estimated 550,000 that the
Congressional Budget Office has calculated under H.R. 660.
Perhaps most importantly, our plan is paid for under the budget
resolution that the majority party has passed earlier this year. It
fits within the budget confines by providing these premium assistance
to small business employers, and to those employees at 200 percent less
of poverty, providing financial assistance and the financial means to
actually access health plans and provide coverage for their employees.
H.R. 660 does not provide any of those means.
What we may see under their budget resolution coming back at us
shortly is some form of tax credit or some type of tax deduction, which
is not going to help the numerous employees and small businesses
operating at 200 percent or less poverty level, who are paying very
little Federal income taxes in order to qualify for such credits,
unless they are willing to extend that coverage to those employees. But
wait a minute. We are right now engaged in a heated debate over a child
tax credit on these very same principles; so it is doubtful that they
are going to be able to provide that type of tax relief to employees
who need it and cannot afford health plans generally.
I mean there is a reason why the National Governors Association,
Republican and Democratic governors alike, are in opposition, why the
State Attorney Generals Association is opposing, why the State
legislatures throughout the country are opposing, why many consumer
interest groups and health care providers are opposing H.R. 660,
because they fear that the ultimate income will be expanding the ranks
of
[[Page H5627]]
the uninsured rather than reducing that number.
I think we all have the best intentions in the plans that we are
advocating here today to try to reverse course on the 41 million, to
try to provide small businesses with an opportunity of providing some
health care coverage for their employees, but we believe there is a
right and there is a wrong way of doing it. We believe that the
Democratic substitute being offered which does not preempt State law,
which does provide some financial assistance, premium assistance for
small employers, which is paid for under the budget resolution is the
way to go if we are truly interested in reducing the number of the
uninsured in this country, and thereby affecting the premiums that
other health plans have to pay.
Because if the uninsured get sick or get hurt, they still go in, they
still access, they still get care, but those costs are then shifted on
to those plans that pay for it. Our plan would reduce the number of
uninsured and thereby save costs and help reduce the premium increases
that so many of our employers, large and small, are experiencing today.
And with that, I encourage my colleagues to support the substitute.
Vote no on the H.R. 660.
Mr. Speaker, I reserve the balance of my time.
Mr. BOEHNER. Mr. Speaker, I am opposed to the gentleman's amendment
and claim the time in opposition.
The SPEAKER pro tempore (Mr. Simpson). The gentleman from Ohio is
recognized for 15 minutes.
Mr. BOEHNER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, instead of embracing this bipartisan bill like many of
their colleagues, some House Democrats have, instead, offered a
substitute that is really no alternative at all.
Their plan does nothing to address one of the real issues that is
really at the heart of this debate, and that is cost. In fact, it takes
us exactly in the wrong direction of where we are trying to going,
raising costs for small businesses and imposing with new mandates on
employers. Instead of relying on competition that AHPs would provide,
thereby lowering costs, their alternative could drive small employers
out of business altogether.
Moreover, the substitute comes with a $50 billion price tag
establishing a complex new Federal program that includes health care
subsidies for certain small businesses and some workers who work in
small businesses. It would establish a national Government-subsidized
health care plan that attempts to model itself after the Federal
Employee Health Benefits Plan, but instead imposes a new mandate such
as requiring small employers to pay 50 percent of their premiums for
employees.
However, unlike the Federal Employee Health Benefits Plan that is
exempt from costly State mandates and regulations, coverage offered
under this substitute would subject this plan to the more than 1,500
State mandates that make up about 15 percent of the rising cost of
health insurance. In addition, in order to qualify, the substitute
imposes new mandates on employer plans. For example, the substitute
mandates that employers provide health care coverage to every employee
who has been employed for at least 3 months.
In addition, it mandates that employers pay 50 percent of the cost of
health care premiums for employees and that they cover all dependents
of their workers. Well meaning, but in the end, these mandates will
prohibit employers from proceeding. Self-employed individuals, however,
are not covered by the substitute and would receive no benefits.
So let us make clear this fact. Small businesses today have the
highest health care premiums of any other group. Premiums increased
this year by at least 15 percent, the highest increase in a decade. And
premiums are even higher for small businesses that see increases of 40
to 50 percent a year as employers continue to get out of small group
activities and States. In fact, the increase in the uninsured this
year, now 41 million Americans, was made up entirely of small business
workers who lost their health care coverage because their employers
could not afford to continue to provide this benefit.
So in answer to this, the substitute proposes to raise the cost to
those small employers by adding new coverage requirements and
subjecting it to more than 1,500 State mandates. And then we are going
to spend $50 billion worth of Federal taxpayers' money to subsidize
this coverage.
In contrast, AHPs use the strengths of the employer-based system that
cover about 150 million American lives today, and we rely on the
private market. The benefits of competition, the economies of scales
that are enjoyed by large unions and large companies all across the
country to help lower costs and to provide better coverage for their
workers.
AHPs allow small businesses to access the benefits of ERISA that are
currently offered to large employers and unions. ERISA exempts large
employers and unions from State mandates so that they are able to offer
a quality benefit package from one coast to another or in just several
adjoining States.
{time} 1515
This uniformity reduces the cost so that more of the health care
dollar that they are spending can actually go to benefits for their
employees, and the lowering of the administrative costs also allows
these companies and unions to offer more benefits to their members.
Through ERISA, employers and unions are able to offer benefits that
best fit the needs of their employees. Their small business
counterparts deserve the same opportunity to craft benefit packages
that are both high quality and affordable.
The substitute would offer employers a difficult Hobson's choice:
Meet these conditions, which may strap a business to the point of going
under; or face limited and costly alternatives to health care coverage;
or they can just do what they do today, offer no health care coverage
to their employees.
Instead of making it possible for small businesses to access more
affordable coverage, their coverage options will actually be more
expensive, and then we are going to finance it with higher taxes.
While AHP legislation would be implemented quickly, the Democrat
substitute might take years to get up and running because we are going
to require the Department of Labor to design this, then to figure out
how they are going to sell it, and then figure out how they are going
to parcel out the $50 billion. If the appropriation does not go
through, then you have got a plan with no financing behind it at all.
So, let me make myself clear, if I have not already: I believe our
Nation's employer-sponsored health care system is a huge American
success story. Employers provide coverage for the vast majority of our
Nation's population, and almost 150 million Americans have coverage
through ERISA.
The Committee on Education and the Workforce and the Department of
Labor through our oversight of ERISA have jurisdiction over employer-
sponsored health care, and I support the employer-based system to
address the problem of the uninsured.
However, the way that the substitute does that is not by building on
our strengths to offer really good plans. The mandates in their bill
will basically say to small employers, you either offer the best health
care plan in the entire market that is possible to your employees, or
you get no help at all.
I think the strengths of the current system are good, and I think
building on those by allowing Association Healthcare Plans will, in
fact, work.
This bill is being supported by our nation's small business
associations. The NIFB, the National Retail Association, the National
Association of Wholesale Distributors, the National Association of
Homebuilders, the U.S. Chamber of Commerce and others strongly support
this bill, and the same groups oppose the substitute that we have
before us.
So I hope Members will join me in offering assistance to our Nation's
small businesses by supporting the underlying bill, and I ask my
colleagues to reject the substitute we have before us.
Mr. Speaker, I reserve the balance of my time.
Mr. KIND. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, this is modeled after the Federal employee health plan.
I
[[Page H5628]]
never heard so much complaining about the Federal employee health plan
before, which Members of Congress participate in. It is the classic
case of the double standard yet again.
There are no new mandates. We respect State law. We do not preempt
state law. Furthermore, their own Congressional Budget Office estimates
that the Associated Health Plans will lead to higher insurance costs
for 80 percent of small business employers and employees. Their
legislation will impose a higher cost burden on small businesses
throughout the country.
Mr. Speaker, I yield 3 minutes to the distinguished gentleman from
Rhode Island (Mr. Langevin), someone who is concerned about the
increase of 1 million more uninsured under H.R. 660 and also
understands the importance of State health insurance coverage.
Mr. LANGEVIN. Mr. Speaker, I thank the gentleman for yielding me
time.
Mr. Speaker, I rise today in opposition to H.R. 660, the Small
Business Health Fairness Act, and in support of the substitute.
As health care costs soar and small business owners struggle to offer
health benefits, it is critical to increase incentives for them to
cover their workers. However, it is equally important that the health
plans available to these workers be high quality and not jeopardize the
stability of the health insurance marketplace.
This legislation, as it is written, encourages the formation of
federally certified Association Health Plans by exempting these plans
from State laws that govern health insurance sold to small employers
today.
For years, patients have been denied necessary care as a result of
HMOs' exemption from State regulation. As long as I have been in
Congress, we have struggled to pass a meaningful Patients' Bill of
Rights to assert the rights of individuals to a more basic minimum of
health care.
Creating more exemptions is contrary to our efforts to preserve and
enhance the existing regulatory system. We must think creatively about
how to make health insurance affordable for small business owners and
employees without threatening the progress we have made in ensuring
patients' protection.
In Rhode Island, we have experimented with the successful program
called RIte Share, which has made it possible for workers eligible for
the State's Medicaid program who have access to employer-sponsored
insurance to participate in the employer's programs. This month, I will
reintroduce the Making Health Care Available for Low Income Workers
Act, which would support demonstration projects such as RIte Share.
As we look for innovative ways to provide health care to all, we must
not sell small business owners and employees short. The National Small
Business United opposes this legislation, as they recognize that it
would ultimately have a detrimental impact on small employer premiums
and would cause a significant number of small employers to drop
coverage, thereby increasing the Nation's uninsured population and
undermine the quality of available coverage.
To that end, I urge my colleagues to vote against H.R. 660 and for
the substitute.
The SPEAKER pro tempore (Mr. Simpson). Does the gentleman from Texas
(Mr. Sam Johnson) seek to control time for the opposition?
Mr. SAM JOHNSON of Texas. Yes, Mr. Speaker.
The SPEAKER pro tempore. Without objection, the gentleman from Texas
(Mr. Sam Johnson) will control the time in opposition.
There was no objection.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield 3 minutes to the
gentleman from North Carolina (Mr. Ballenger), a member of the
Committee on Education and Workforce and a long-time Member of Congress
and a small businessman.
Mr. BALLENGER. Mr. Speaker, I thank the gentleman for yielding me
time.
Mr. Speaker, today we are going to hear a lot of discussion,
important discussion, about over 40 million Americans who are
uninsured. Very few people in Congress have actually had the experience
of dealing with employees and their health insurance. Well, I have,
with them and their dependents.
H.R. 660 will allow small business to pool their resources in
Associated Health Plans, giving them healthcare purchasing power that
they do not have today.
As one Member who is a small business owner, I know firsthand that
ballooning costs are a major reason why so many Americans are
uninsured. When the company I founded employed only 5 or 10 workers, I
was at the mercy of the insurance companies. Small companies lack the
bargaining power that is necessary to find the best deal, and the
smaller the company, the worse it gets.
Like me, most employers care deeply about their employees and want to
give them access to quality care. Unfortunately, skyrocketing costs
have forced many of us to distribute health insurance costs to our
employees, to drop health coverage or to close up shop altogether. And
this is nothing short of a tragedy, not only for millions of uninsured
or underinsured workers and their families, but also for employers who
can no longer afford the high cost of health insurance.
Mr. Speaker, the problem is not going away. While AHPs may not cover
every uninsured American, I know that it will help many Americans gain
access to quality care.
Some Members of this Congress will only be satisfied with universal
healthcare coverage. Let me just ask you, does small business want the
U.S. Government as a partner? Well, not where I come from.
These Members argue that we are somehow misguided when we want to
take a common sense approach toward any American access to quality
healthcare insurance. Associated Health Plans will allow small
businesses to pool their resources and increase their bargaining power
with insurance companies. This will allow them to negotiate better
rates and purchase quality healthcare at a lower cost. In essence, AHPs
will put small business on equal footing with the large, self-insured
companies and unions.
Mr. Speaker, it is good to talk about the plight of the uninsured,
but let us do something to help them. Let us support AHPs.
Mr. KIND. Mr. Speaker, I yield 2 minutes to the distinguished
gentlewoman from California (Ms. Woolsey), a very knowledgeable member
of the Committee on Education and the Workforce.
Ms. WOOLSEY. Mr. Speaker, I thank the gentleman for yielding me time,
and I thank the gentleman from New Jersey (Mr. Andrews) for this
substitute that we have here today.
Mr. Speaker, I rise in support of the Kind plan because it is
actually kind to small businesses and it is kind to hard-working
employees, and it makes affordable coverage accessible to the
employees, the hard workers that need and deserve that coverage.
As a small business owner, I know firsthand how difficult it is to
provide workers with first-class health coverage, but the reality is
these hard-working families need access to quality healthcare, not just
bare bones, expensive coverage. I would have appreciated the Kind plan
for my employees, I can tell you that.
The Republican plan actually provides employers and employees with a
false sense of security. It is a false security. They will assume they
are paying for standard coverage, like the owner of the business has
for his or her family. They will assume they are paying for mammograms,
prenatal and postnatal coverage, coverage for illnesses like diabetes,
and for prostate cancer, because these are generally State-mandated
coverages. And when they find out differently after they have enrolled
in one of these plans, it will be too late.
I support the Kind substitute, because it gives small businesses the
option to enroll in a health plan that is similar to the Federal
Employees Health Benefit Plan, giving workers a choice of plans. Why
should the hard-working people of America, those employed by small
businesses, have fewer options than Federal workers?
Mr. Speaker, the Kind substitute provides an affordable option to
small businesses by granting subsidies. It gives them choices
guaranteed to cover the most important medical procedures. This
substitute provides working families, desperate for quality
[[Page H5629]]
health coverage, the choices they need and want, and I urge my
colleagues to support the Kind substitute.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield 2 minutes to the
gentlewoman from Illinois (Mrs. Biggert), a member of the committee.
Mrs. BIGGERT. Mr. Speaker, I thank the gentleman for yielding me
time.
Mr. Speaker, I rise in strong opposition to the substitute to H.R.
660. The mandates contained in this substitute will drive up costs and
defeat the very purpose of H.R. 660, which is to make healthcare
insurance more affordable.
Talk to most business owners, small business owners, in my district,
and they will say that the fastest growing cost to their businesses is
rising health insurance premiums for their workers. Talk to other small
business owners in my district, and they will say that they cannot
afford to offer their workers healthcare coverage.
In fact, if you talk to any of the 41 million Americans who have no
health insurance, 6 out of 10 of them will say they work for a small
business. It is not that these small business employers, employees or
owners do not want health insurance or do not realize its importance;
they simply cannot afford it.
Health insurance is expensive, even if you work for a large company.
Studies show health insurance costs rose by 14.7 percent in 2002, and
others predict they will rise another 15 percent for 2003.
In large companies, health coverage costs are spread out over many
employees, making coverage more affordable for each employee. However,
when there are fewer employees, each must bear a higher share of the
costs and the cost per worker for the employer is very high. Far too
often, small businesses either cannot afford to offer insurance, or, if
they offer it, it is too costly and their employees cannot afford it.
Let us give small businesses the same economies of scale that are
enjoyed by large businesses. I urge my colleagues to vote against this
substitute which would establish new mandates and turn the plan into a
nationalized, government-subsidized health care plan.
I urge a yes vote for final passage of H.R. 660. Let us give more
working Americans access to affordable, quality insurance coverage.
Mr. KIND. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, let me quickly dispel a couple of myths. We have heard a
couple of occasions new mandates are going to add costs to the
employers.
First of all, there are no new mandates under the substitute. We
merely respect State law. We do not require compliance. It is a
voluntary program. If small business employers do not think it is a
good financial deal for them, they do not have to join. There is
nothing mandating their requirement.
We have also heard the word ``taxes'' being used, too. Let me
reiterate, this is paid for in their own budget resolution. So there is
no new taxes that we are talking about with respect to this substitute.
Mr. Speaker, I yield such time as he may consume to the gentleman
from New Jersey (Mr. Andrews), the coauthor of this alternative bill.
(Mr. ANDREWS asked and was given permission to revise and extend his
remarks.)
Mr. ANDREWS. Mr. Speaker, I would like to thank the gentleman from
Wisconsin (Mr. Kind) for all the leadership he has shown on this, all
the hard work he has done, and his usual, thoughtful approach to this
problem.
{time} 1530
Understand the desirability of the substitute versus the underlying
bill. It would be helpful to think of a person who runs a tool and die
shop with a dozen employees, or a cafe with 15 or 20 employees. Under
the majority's Republican underlying bill, the most optimistic people
believe there would be about a 15 percent premium savings for that
employer. I think that is unduly optimistic, but let us give them the
benefit of the doubt.
In my State, it costs about $6,000 to provide a health care package
for an individual, and about $12,000 for family coverage. That means
for that individual plan, the price would drop from $6,000 down to
about $5,100. For the owner of that tool and die shop or that cafe,
even if that price drop would occur, it is not nearly enough to afford
the premiums that would be involved.
The majority's bill provides zero to the owner of that tool and die
shop or that cafe to help them buy those premiums.
The substitute goes to the majority's budget resolution, identifies,
as the majority did, $50 billion over 5 years, without any increase in
taxes or revenues, as the gentleman from Wisconsin (Mr. Kind) just
said, and uses that $50 billion creatively and wisely to provide
subsidies to what we estimate would be 5 million employers and 16
million employees.
The person running the tool and die shop or the cafe, even if you are
right, and we think you are wrong, meaning the majority, even if that
person enjoys a reduction in premiums from $6,000 down to $5,100, it is
not enough to increase coverage.
The plain fact is this: people who are employing people at the bottom
of the wage ladder in low-margin businesses are not going to be able to
afford the price of health insurance unless there is a significant
subsidy. That is a fact. It is a fact the majority would choose to
ignore, because the majority has taken over $2 trillion from the public
Treasury that could be used to address the problem of 41 million
uninsured people and flushed that money away. This substitute is an
appropriate way to close that gap.
I also again want to reiterate that we believe you do not have to
make this false choice between people being covered, as our various
States would have them covered, with mammogram protection, with
diabetes care, with prenatal and well-baby care. You do not have to
make the choice between providing those vital benefits and no coverage
at all.
The Mercer study shows that the underlying bill from the majority
will result in an increase of 1 million people to the ranks of the
uninsured. Eight million people, the CBO now tells us, will move from
regular protected plans into these new unprotected, at-risk AHPs. We
will get the worst of both worlds: eight million people for whom there
is no guaranteed coverage against breast cancer, against diabetes,
against the other diseases and conditions people worry about, and an
increase in the number of uninsured.
The plan that the gentleman from Wisconsin (Mr. Kind) has taken the
lead on would do the opposite. It will address the real needs of the
owner of that tool and die shop and the real needs of the owner of that
cafe by providing him or her with a meaningful subsidy that would help
purchase health insurance benefits for his or her employees. There is a
5 million person difference when it comes to employers, a 16 million
person difference when it comes to employees, and all the difference in
the world when it comes to the approach here.
The plan the gentleman from Wisconsin (Mr. Kind) has put forward will
work. It will work within the contours of the majority's own budget
resolution. It provides real help and real aid to those who need it,
not the empty promise of the majority's bill.
I urge our colleagues on both sides of the aisle to support the Kind
substitute.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield 1 minute to the
gentleman from Ohio (Mr. Boehner), the chairman of the Committee on
Education and the Workforce.
Mr. BOEHNER. Mr. Speaker, I thank my good colleague for yielding me
this time.
We have heard about these studies today; and the gentleman knows that
is the study, or at least has heard me say that the study done by
Mercer is very similar to the study done by the Congressional Budget
Office, and they are both flawed. They are very flawed. They do not
take into account the fact that we have anti-cherrypicking language in
the bill, and they assume in their studies that cherrypicking would be
allowed.
Secondly, they assume that there would not be any difference in the
administrative fees for running the plan. The fact is that we have
studies that show that up to 8 million of the uninsured would have
access to affordable, quality health insurance.
Let me also point out exactly what our bill does. The gentleman from
New Jersey just said in the State of New Jersey, for a single person to
buy a
[[Page H5630]]
health insurance plan is about $6,000 and family coverage is about
$12,000. The average cost for a large employer for the cost of their
health insurance is about $3,300 for a single person and about $5,500
for a family.
Mr. ANDREWS. Mr. Speaker, would the gentleman yield?
Mr. BOEHNER. I yield to the gentleman from New Jersey.
Mr. ANDREWS. Mr. Speaker, would the gentleman care to cite the source
of that statistic?
Mr. BOEHNER. Mr. Speaker, I made some phone calls to find several
plans that were both in the same area.
The fact is, that is exactly what this bill does. It allows small
employers to band together to get themselves into a larger pool to
design their own plan so that they can, in fact, offer better coverage
at lower cost to their employees.
Mr. Speaker, I reserve the balance of my time.
Mr. KIND. Mr. Speaker, I shudder to think we may be making major
policy based on a few phone calls here today.
Mr. Speaker, I yield 1 minute to the gentleman from New Jersey (Mr.
Andrews).
Mr. ANDREWS. Mr. Speaker, I thank the gentleman for yielding me this
time.
I understand there are variations in plan costs around the country. I
would once again say, however, that the most enthusiastic proponents of
the AHP plan do not talk about a reduction of the magnitude that the
chairman of the full committee just talked about; they talk, at best
case, about a 15 or 16 percent premium reduction.
If you live in a market that has a $6,000-per-person premium, which I
do, that is nowhere near a $2,700 reduction which the chairman's phone
calls have uncovered.
Mr. BOEHNER. Mr. Speaker, would the gentleman yield?
Mr. ANDREWS. I yield to the gentleman from Ohio.
Mr. BOEHNER. Mr. Speaker, the 15 percent reduction is only the
reduction in the administrative costs of running the plan. When you
begin to look at what pooling and larger pools will do, it brings the
costs down significantly.
Mr. ANDREWS. Mr. Speaker, reclaiming my time, what premium benefit
then would the chairman claim would result from this bill?
I yield to the chairman to tell us what premium benefit he predicts
would result from the underlying bill.
Mr. BOEHNER. Mr. Speaker, we believe that the average reduction for a
small employer would be somewhere between 15 and 30 percent.
Mr. ANDREWS. Fifteen and 30 percent. That is a new number for us, Mr.
Speaker.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield 4 minutes to the
gentleman from Illinois (Mr. Manzullo), the chairman of the Committee
on Small Business.
Mr. MANZULLO. Mr. Speaker, as the chairman of the Committee on Small
Business, our Nation's small businessmen and -women tell me over and
over that accessible and affordable health care is their number one
priority. I have heard from thousands of small employers in America who
have been pleading for options to help them manage their surging health
care costs. In fact, so many letters came in, we put them into a binder
called ``Health Care Horror Stories from America's Small Employers.''
The NFIB assisted us in putting this together for us.
The small business owners tell us regularly how they struggle to
provide their workers with health insurance but, each year, they face
double-digit increases. Small business owners tell me they do not know
how much longer they can continue to provide health care for their
employees. Mom and pop businesses tell me they want to provide health
care for their employees, but they cannot because of the expense of the
policy. My own brother who runs a family restaurant is drowning in the
surging costs and the exorbitant costs of health care insurance. This
is a family business. We know personally what it costs when you are
little, when you have a very small pool. People like my brother Frank
are horrified at the thought of not being able to have insurance.
As one of my small business constituents wrote, ``I have always
wanted to take care of my employees and provide them with competitive
benefits and wages, but each year it gets more and more difficult. Our
health insurance costs were raised 43 percent last year and 34 percent
this year.''
Another constituent: ``Health care costs and insurance are draining
us. Last year we had a 14 percent increase, and now the costs are going
up 21 percent again. I have nowhere else to go.''
So they go out of business because they cannot afford insurance.
Today we bring forward a great option, association health plans, to
help control these outrageous costs. Of the 41 million Americans with
no health insurance, 60 percent of these are small entrepreneurs, their
families and their employees.
Why should the small businesses of this country not have the same
right to band together as local labor unions do to purchase their
insurance in large pools? That is all this is. It is just that simple.
The more people you have in the pool, the cheaper the rates are for the
insurance. It is a matter of equity. The little guys out there, the
people that are struggling, why can they not have the same right, the
same legal right to get together as labor unions? Why does there have
to be a double standard, to allow labor unions to get together and do
the smart thing, which they have been doing for 60 or 70 years, and
using the union as the center post around which to buy their insurance,
and allow associations as a center post around which to buy insurance
for the small business people?
It is simply a matter of equity, it is a matter of fairness, and the
biggest argument that we have here is this: the larger the pool, the
lower the rate. There is not anybody here on the floor today or in this
country that can dispute that fact. My brother is a pool of two, him
and his wife, at the restaurant.
As the Chairman of the Small Business Committee, our nation's small
business men and women tell me over and over that accessible and
affordable health care is their number one priority.
I have heard from thousands of small employers in America who have
been pleading for options to help them manage their surging health care
costs.
Small business owners tell me regularly how they struggle to provide
their workers health insurance, but each year they face double digit
increases.
Small business owners tell me they don't know how much longer they
can continue to provide health care for their employees because each
year the premiums rise, their coverage decreases and out of pocket
expenses soar.
``Mom and Pop'' businesses tell me how they want to provide
healthcare for their employees, but they cannot because of the expense
for a policy that covers less then ten people.
My own brother, who runs the family restaurant, is staggering at the
exorbitant cost of health care insurance.
They are horrified at the thought of leaving their workers high and
dry without health insurance.
As one of my small business constituents wrote, ``I've always wanted
to take care of my employees and provide them with competitive benefits
and wages, but each year it is getting more and more difficult. Our
health insurance costs were raised 43 percent last year and 34 percent
this year and there is nothing we can do about it.``
Another constituent writes, ``Health care costs and insurance are
draining us. Last year, we had a 14 percent increase. Now, the costs
are going up 21 percent again. I have nowhere to go.''
They are hopeless. Our entrepreneurs, whose ingenuity and hard work
ethic have driven the American economy, have run out of options to
battle this crisis. They need our help.
And today, we bring forward a great option--Association Health
Plans--to help them control these outrageous costs and continue
offering vital health insurance to their employees and their families.
Of the 41 million Americans with no health insurance, 60 percent are
small entrepreneurs, their families and their employees.
One of the reasons small businesses cannot afford health coverage for
their employees is that they are unable to achieve the economies of
scale and purchasing power of larger corporations and unions.
Small businesses suffer from unequal treatment--what they want most
is a level playing field when it comes to health care.
Large corporations and labor unions use the purchasing power of
thousands of employees to offer affordable health insurance to their
workers.
Small business owners have to find their insurance on an individual
basis, making it very difficult and expensive to find affordable health
coverage.
[[Page H5631]]
The premiums that small businesses pay for health insurance are
typically 20-30 percent higher than those of large companies or unions
which can self-insure.
Additionally, the administrative costs incurred by small businesses
are likewise higher than those of large businesses; 25-27 percent
versus 5-11 percent for large businesses.
Association Health Plans can provide hope to those who lack health
care by expanding the pool of people and bringing down costs by 15 to
30 percent.
For small businesses, that savings can mean the difference between
providing health care or not.
That savings can be the difference between profitability or losing
money.
In March, I held a Small Business Committee hearing on this very
topic.
The Washington State Farm Bureau testified to the success they have
enjoyed operating an AHP for the last 3\1/2\ years.
Traditionally, farmers have had great difficulty buying health
insurance because their business is usually made up entirely of their
family.
Of those who have taken advantage of the Washington State Farm
Bureau's AHP, 25 percent did not have health insurance prior to
enrolling.
Additionally, the Washington State Farm Bureau AHP has operated with
a 99 percent retention rate.
The proof is irrefutable. AHPs work.
I urge all of my colleagues to support H.R. 660.
Mr. KIND. Mr. Speaker, would the gentleman yield?
Mr. MANZULLO. I yield to the gentleman from Wisconsin.
Mr. KIND. Mr. Speaker, with all due respect to the gentleman from
Illinois, my good friend, that is why our substitute is much better. We
have one comprehensive pool that small businesses can buy into if they
choose, therefore leveraging their bargaining power.
Mr. MANZULLO. Mr. Speaker, reclaiming my time, that is a government-
run pool with a government-run subsidy, and that will end up like every
other government-run program: it will bankrupt the country, and the
small businessperson will be at the end of it.
Try this. See if this works. This is so simple. If it works for the
labor unions, why can it not work for Frank and Mary Ann Manzullo?
Mr. KIND. Mr. Speaker, would the gentleman yield?
Mr. MANZULLO. I yield to the gentleman from Wisconsin.
Mr. KIND. Mr. Speaker, one of the strengths of the labor union is
they are there representing the workers. They leverage the number of
workers there, and they are representing their interests, and they
oftentimes reduce wages in order to get a better health care plan.
The SPEAKER pro tempore (Mr. Simpson). The time of the gentleman from
Illinois (Mr. Manzullo) has expired.
Mr. KIND. Mr. Speaker, I yield such time as she may consume for the
purposes of a colloquy to the gentlewoman from Minnesota (Ms.
McCollum), a former State legislator and a colleague on the Committee
on Education and the Workforce.
Ms. McCOLLUM. Mr. Speaker, I just want to make sure that I understand
clearly the benefits of the Kind amendment in contrast to the
underlying bill that we will be asked to vote on later.
One of the concerns I had in committee, as the gentleman knows, was
that gender discrimination by the coverage that can be allowed under
the existing bill that we are going to be voting on would have a direct
impact on women's health care coverage, especially during their
reproductive years.
So I would like to know, under the Kind plan, is cervical cancer
screening covered if States cover it?
Mr. KIND. Mr. Speaker, would the gentlewoman yield?
Ms. McCOLLUM. I yield to the gentleman from Wisconsin.
Mr. KIND. Mr. Speaker, it would be, because we respect existing State
law.
Ms. McCOLLUM. Mr. Speaker, would contraceptive coverage be allowed
for women under the Kind plan?
Mr. KIND. Again, it is not mandated unless the State offers that
right now.
Ms. McCOLLUM. If the State requires mammography screening, is that
covered under the Kind amendment?
Mr. KIND. That would be covered.
Ms. McCOLLUM. If a State requires maternity coverage so it is not the
drive-through maternity coverage that we have heard about in past
years, is that covered?
Mr. KIND. That would also be covered under our substitute.
Ms. McCOLLUM. Is a minimum mastectomy stay also covered if States
have that as part of their law?
Mr. KIND. That would be covered.
Ms. McCOLLUM. Would a minimum maternity stay be covered?
Mr. KIND. That is right.
Ms. McCOLLUM. So we have good reproductive health coverage for women
while we are expecting. But also I found with many of the women I have
spoken with, and their husbands too, they would like to make sure that
women have access to gynecologists, sometimes as their primary care
physicians, and many States allow this. Would the Kind amendment allow
this to continue?
Mr. KIND. Yes, it would.
Ms. McCOLLUM. And does the Kind amendment also allow for second
automatic referrals if States allow for second opinions?
Mr. KIND. It would, indeed.
Ms. McCOLLUM. Mr. Speaker, I thank the gentleman.
Mr. ANDREWS. Mr. Speaker, would the gentlewoman yield?
Ms. McCOLLUM. I yield to the gentleman from New Jersey.
Mr. ANDREWS. Mr. Speaker, and it is also true, is it not, like I said
to my colleague from Minnesota, that in the underlying bill that the
majority offered, that each one of those State protections that the
gentlewoman just outlined would be invalidated?
Ms. McCOLLUM. Mr. Speaker, reclaiming my time, that is totally
correct. In fact, many of these I was directly involved in in the State
of Minnesota, because we had families, women, mothers, husbands,
brothers, aunts and uncles come and say that this was basic health care
coverage that their mothers needed, that their grandmothers needed,
that their nieces needed.
Mr. ANDREWS. Mr. Speaker, if the gentlewoman would further yield,
what the gentlewoman is saying is that if the insurance industry
chooses to keep these protections, it may; but if it chooses not to,
the person who is covered under the plan does not get any of the
coverage the gentlewoman just spoke of; is that correct?
Ms. McCOLLUM. That is correct. And it is my understanding that
insurance companies did not offer these coverages because they were, in
their opinion, too expensive to cover, and that put gender
discrimination at risk for women in their reproductive years.
{time} 1545
Mr. KIND. Mr. Speaker, will the gentlewoman yield?
Ms. McCOLLUM. I yield to the gentleman from Wisconsin.
Mr. KIND. One other significant difference between our substitute and
H.R. 660 is ours would have a uniform premium rate for all employees.
Employees could not be discriminated against with higher premium rates
because they happen to be sicker than their fellow employees in the
workforce. Ours would establish a uniform insurance premium rate for
them so there would not be that type of price discrimination against
the sicker in our population.
Ms. McCOLLUM. I thank the gentleman. I will be supporting the Kind
amendment because if the gentleman from Wisconsin (Mr. Kind), and the
gentleman from New Jersey (Mr. Andrews) and I all worked for the same
employer, I would like to think that my basic health care coverage,
including my reproductive health, would be covered.
The SPEAKER pro tempore (Mr. Simpson). Does the gentleman from Ohio
(Mr. Boehner) wish to reclaim the time in opposition?
Mr. BOEHNER. I do, Mr. Speaker.
The SPEAKER pro tempore. Without objection, the gentlemen from Ohio
will control the time in opposition.
There was no objection.
Mr. BOEHNER. Mr. Speaker, I yield 4 minutes to the gentleman from
Georgia (Mr. Isakson), a member of our committee.
Mr. ISAKSON. Mr. Speaker, I have not had any time to make any phone
calls. I did not read the think tank studies. I did, however, for 22
years prior to coming to Congress, manage a company. When we left, we
had 220 employees covered by an ERISA-qualified
[[Page H5632]]
group medical insurance coverage. And their salaries was paid and my
salary was paid by the proceeds of sales made by independent
contractors of which 90 percent were women.
Under the independent contractor law and IRS requirements, we could
not offer them group medical insurance and they had no ERISA
protection. They were at the mercy of what was available.
Now, those 220 for whom we provided group medical insurance, I would
have to resent the fact that the illusion was made that an employer who
had that many women as a percentage of their workforce would not
provide gynecological benefits and other reproductive benefits
available to women. Of course you would.
Now what this bill does it does not preclude a mandated 48-hour stay
any more than it precludes any other benefit. It offers the employer
the option of offering it. It is true there is an exemption from the
State requirement. It is untrue that it necessarily, on its face, takes
that benefit away from a company.
Who in here would believe for a moment that an employer who wants to
offer a benefit to his employees would take away the very benefit that
is most important to those employees? Facts are stubborn things.
The fact of the matter is, 41 million Americans do not have health
insurance. Now there are contributing reasons to that. But one of the
main contributing reasons are those independent contractors, small
business people, laborers, people who make the money that pay the taxes
who have no accessibility to health insurance.
Now, I have lobbied on both sides about this and I care about this
very deeply. I have a campaign staff right now and I am providing
insurance to those few individuals I have employed because I know how
important it is to have it, and I know how expensive it is to go out
and get it on an individual basis, even though they are basically
young. But understand this, this bill does not preclude a health care
benefit for women that is mandated in State law from being offered.
It gives the choice for companies to put together a cafeteria-type of
plan which may or may not include it, but do not sell those employers
short that they would not offer a benefit that the very basis of their
employees have to have.
Secondly, as I understand it, the cost of this is about $354 million
in terms of CBO's estimate of H.R. 660 and $50 billion in terms of the
substitute. I would say this, if we can make an investment that is
$49,442,000,000 less expensive to offer insurance to 41 million
Americans or a lot of them, we estimate 8 to 10, to provide benefits to
give them health care that they do not have, then we should vote for
the underlying bill. We should reject the substitute, and we should
reject any false perception that this is taking away the integrity of a
business in offering a qualified plan to their qualified employees.
Mr. BOEHNER. Mr. Speaker, will the gentleman yield?
Mr. ISAKSON. I yield to the gentleman from Ohio.
Mr. BOEHNER. Mr. Speaker, the gentleman referred to his ability to
offer a package under ERISA to your 220 employees on the business you
managed, but what about those 900 real estate agents that work as
independent contractors for this company, who had to go out and fight
on their own, day in and day out, to get a policy for themselves or for
their family? And under this bill, if I am correct, the National
Association of Realtors or the Georgia Realtor Association could offer
a group plan to their real estate agents which would bring their costs
down substantially.
Mr. ISAKSON. Mr. Speaker, the gentleman is absolutely correct, and if
I may take the remainder of the time to tell the gentleman that in that
exact scenario, since I could not offer those benefits because they
were independent contractors, but because I cared very deeply about my
independent contractors and the quality of life they had, I tried to
scratch and find those.
What this bill does, it opens up an opportunity for employers who
have independent contractors as their employees, to take the benefits
of pooling and provide for those independent contractors the benefit
that ERISA guarantees the opportunity to provide in terms of the
employees that company has. This is an important step forward for 41
million Americans.
Mr. KIND. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, again, we state that our substitute is fully paid for
under the budget resolution, so we are not asking for new money. And
with due respect to my friend from Georgia, we would hope a lot of
employers would continue to offer the basic health care coverage that
exists today. But the reason there were so many State battles
throughout the country in State legislatures is because many of them
were not. That is why these hard-fought battles need to be respected,
and our substitute does.
Mr. Speaker, I yield 3 minutes to the gentlewoman from the Virgin
Islands (Mrs. Christensen).
Mrs. CHRISTENSEN. Mr. Speaker, I thank the gentleman for yielding me
time.
Mr. Speaker, I rise today in opposition to H.R. 660, and in support
of the Democratic substitute. As a member of the Committee on Small
Business, a physician and former small business owner, the issue of
meeting the health care needs of the small business community is a
priority for me and it is alarming that their employees represent 60
percent of our Nation's uninsured.
Whereas, I commend my colleagues on both sides of the aisle for their
work in bringing legislation to the floor, I cannot support H.R. 660.
The Congressional Budget Office estimates that AHPs could insure
additional 330,000 Americans, but would drive up health care costs for
the rest of the Nation to such an extent that 1 million presently
insured Americans would be unable to afford coverage.
H.R. 660 would exempt AHPs from State insurance mandates regarding
the coverage of such basic and life saving treatments as maternity
care, emergency room visits, cancer screening and diabetes coverage,
leaving it to individual plans to decide. More than 450 national and
local organizations have joined in opposing Federal legislation that
would allow associated health plans to operate without State oversight.
The American Diabetes Association has said it would be a disaster for
people with diabetes. The American Nurses Association argued that by
removing coverage for cost effective benefits such as well-child care,
AHPs created by H.R. 660 could drive up the cost of health care. States
have enacted safeguards to ensure that the health insurance plans
offered to small employers and their families are fairly priced, cover
a specific set of benefits, that they can not cherrypick.
Under the proposed legislation, small employers who have joint AHPs
could lose these important safeguards. The Kind-Andrews Democrat
substitute addresses these concerns. It would use the Federal Employee
Health Benefits Program as a base benefit package without superseding
State laws and regulations. Most importantly, the Kind-Andrews
substitute offers incentives and subsidies to firms of fewer than 50
employees and provides premium subsidies for employees who are below
200 percent of poverty. The Kind-Andrews substitute would make a real
difference in covering the uninsured while maintaining consumer,
personal and professional rights.
This is a good approach and a far better bill that can really do a
lot to cover more than half of the 41 million uninsured.
Mr. Speaker, I urge support for the Kind-Andrews substitute and urge
a no vote on H.R. 660.
Mr. BOEHNER. Mr. Speaker, I yield 1 minute to the gentleman from
Pennsylvania (Mr. Shuster).
Mr. SHUSTER. Mr. Speaker, I thank the gentleman for yielding me time.
Mr. Speaker, I rise in opposition today to the substitute and in
support of H.R. 660, the Small Business Health Fairness Act.
Of the more than 41 million Americans that are uninsured, almost 60
percent of those individuals are from families that are employed by
small businesses that cannot afford to pay health benefits. We can no
longer stand by as health insurance premiums for small businesses are
increasing at double digit rates. Their choices of plans and benefits
continue to decrease.
[[Page H5633]]
The passage of the Small Business Health Fairness Act would be an
important step in providing access to affordable health insurance for
millions of workers and their family, helping to stop the growing
numbers of uninsured Americans. As a former small business owner for 13
years, I struggled with the skyrocketing costs of health care benefits.
Employers, small business owners must decide whether to scale back or
cut coverage altogether. By allowing businesses to join together in
associated health plans, they will have the same opportunities that
large businesses and unions have. Hard working Americans employed by
small businesses deserve access to quality and affordable health care
too.
Mr. Speaker, I would like to commend the gentleman from Ohio (Mr.
Boehner), the gentleman from Illinois (Mr. Manzullo) and the gentleman
from Kentucky (Mr. Fletcher) for their outstanding leadership, and as a
small business owner, I urge my colleagues to support H.R. 660.
The SPEAKER pro tempore. The gentleman from Ohio (Mr. Boehner) has 8
minutes remaining. The gentleman from Wisconsin (Mr. Kind) has 5
minutes remaining.
Mr. BOEHNER. Mr. Speaker, I yield 2 minutes to the gentleman from
Texas (Mr. Burgess)
Mr. BURGESS. Mr. Speaker, today the United States is confronted with
an increasing number of Americans who are without health insurance. The
Census Bureau estimates that 41.2 million Americans are without
insurance and the numbers continue to rise.
Remarkably, the policy makers here in Washington have all too often
made attempts to remedy this situation with convoluted policies that
have just exacerbated this very serious problem.
The bill before us today, H.R. 660, will make great strides in
addressing this problem by not imposing a top-down Washington-type
solution, but instead giving small businesses in Flower Mound, Texas
and cities and towns, as in all of our districts, the ability to make
responsible health care coverage decisions for their employees.
H.R. 660 will make American families without health insurance and
help small businesses struggling with the high cost of insurance for
their employees. As the owner of a medical practice in Lewisville,
Texas, I understand how difficult it can be to provide health care
insurance to your employees. Only 10 percent of businesses with 50 or
fewer employees offer their employees health care coverage. This number
is low because group coverage for small businesses is costly and
heavily regulated.
H.R. 660 will give retailers, wholesalers, printers, medical
practices, churches and other businesses the ability to purchase health
insurance through associated health plans by freeing them from
restrictive mandates and maximizing their ability to spread risks
across a large number of employees. I believe this bill will decrease
the number of uninsured in the United States, but I am afraid that the
best our friends on the other side of the aisle can come up with in the
form of this substitute is a continuation of the Washington, D.C. style
solution that does not trust small business owners with decisions about
what is best for their employees.
The substitute places more mandates on small business and does
nothing to increase access to health insurance. By stacking requirement
on top of requirement, it is clear that they do not trust Americans to
make their own health decisions.
Mr. Speaker, the Democratic substitute is just another in a long line
of unrealistic health care reform proposals that they simply cannot
relinquish. I urge my colleagues to vote against the substitute and
vote in favor of passage of H.R. 660.
Mr. BOEHNER. Mr. Speaker, I yield 1 minute to the gentleman from
South Bend, Indiana (Mr. Chocola).
Mr. CHOCOLA. Mr. Speaker, I thank the gentleman for yielding me time.
Mr. Speaker, before coming to Congress, I was a small business owner.
Now that I am a member of Congress, I am on the Committee on Small
Business. And not a day goes by that I do not hear from a constituent
at home or someone talking to the Committee on Small Business that is a
small business owner about the horrors of trying to provide health care
to their employees.
We in government cannot make people successful. We cannot make
businesses successful. But what we can do is create an environment that
gives people and businesses the opportunity for success. In creating an
environment where small business owners can join together with common
interest on a nationwide basis and go out and provide health care for
their employees to meet their particular employees needs, is exactly
what we should be doing as Members of Congress.
{time} 1600
I think that we have to pass this bill because the bottom line is
that the people who have to live with the reality of providing health
care for their employees will encounter lower costs and greater access
to the health care coverage they wish to provide for their employees.
So I urge my colleagues to vote in favor of H.R. 660 and against the
substitute.
Mr. KIND. Mr. Speaker, I yield 2 minutes to the gentlewoman from New
York (Mrs. McCarthy), a distinguished member of the Committee on
Education and the Workforce.
Mrs. McCARTHY of New York. Mr. Speaker, I thank my colleague from the
Committee on Education and the Workforce for yielding me this time and
for introducing this bill, because this substitute is actually the
answer to what we are looking for, and it is also paid for.
Let me say what this amendment will do, the substitute. It provides
small employees the same access to health benefits that Federal
employees have. All small business employees and employers are offered
coverage. It minimizes the adverse selection. ``The Secretary shall
establish an initial open enrollment period and thereafter an annual
enrollment period.'' It uses state-licensed insurers without preempting
State laws.
For some reason, I thought basically, especially on the other side of
the aisle, that we never wanted to preempt State laws.
This amendment provides a minimum benefit package similar to Federal
employees. All participating insurers must offer benefits equal to or
greater than the options offered to Federal employees. It also provides
for affordable small employer premiums with premium assistance.
This is the answer to help our small businesses. And again I will
say, on the main bill, when we have Republican and Democratic Governors
throughout this country saying this is not the answer, when we have
State attorneys general saying this is not the answer, and that this
substitute is the answer, then I believe this can help our small
businesses. We all want to do that.
So I would say to my colleagues here on the right, and certainly the
right side and the left side of the aisle, that this substitute is the
answer to what our Governors would like, certainly our State attorneys
general would like. It would help the people and not take away the
minimum health care benefits that we have been fighting for for gosh
knows how many years.
I will stress again and again that the only reason that we have
decent basic health care coverage in our States, 48 of them, is because
they realized that was the way to go.
Mr. BOEHNER. Mr. Speaker, I am pleased to yield 2 minutes to the
gentleman from Georgia (Mr. Gingrey), a member of our committee.
Mr. GINGREY. Mr. Speaker, I rise in strong support of the Small
Business Health Fairness Act, H.R. 660, and against the amendment.
By anybody's estimate, 41 million uninsured Americans is entirely too
many, and the Bureau of the Census has estimated that over 60 percent
of those uninsured Americans are employed. They are not unemployed.
They are just working for small businesses, small employers that cannot
afford to go into that small market and purchase health insurance,
which is rising at least 14 percent a year. The AHPs, with a minimum
pool of 1,000 or more employees, spreads the risk, and it gives them
the opportunity to get that same volume discount that the Fortune 500
companies and the large labor unions enjoy.
But maybe the most important savings and the reason that the premiums
are lower is that they are not bound now by each and every of the 50
States with their multiple mandates. The
[[Page H5634]]
other side wants to talk about how unfair it is that these plans could
not include a routine screening mammogram or could not exclude the fact
that some plans have so-called drive-through deliveries, and that
patients might not be able to stay overnight when they had a radical
mastectomy. Mr. Speaker, these plans that are being offered under ERISA
protection have all of these provisions in them.
What we are talking about, and I know this as a physician member of
the State legislature, and the demands to include one mandate after
another, things like coverage or screening for chronic adult fatigue
syndrome, or carpal tunnel syndrome, or a blood test for this or a
blood test for that, pretty soon they will be requiring routine
screening for fissle phosphate levels in everybody's blood. It just
goes on and on and on, and it becomes absolutely ridiculous and
prohibitively expensive.
So that is why we need this bill. That is why we need these AHPs. I
think we will insure not 330,000 more people, but probably over 2
million.
Mr. KIND. Mr. Speaker, I yield 2 minutes to the gentleman from Texas
(Mr. Hinojosa), a distinguished member of the Committee on Education
and the Workforce.
(Mr. HINOJOSA asked and was given permission to revise and extend his
remarks.)
Mr. HINOJOSA. Mr. Speaker, I rise today in strong opposition to H.R.
660, the Small Business Health Fairness Act. Like many of my
colleagues, I have heard from numerous industry groups, health plans,
medical associations, and, most importantly, my constituents on whether
or not AHPs are the best solution to address the growing number of
uninsured in our Nation. I am particularly concerned about finding
workable solutions for small business employers.
Like many of my colleagues, my district in south Texas is built on
the foundation of small businesses. They employ a large percentage of
the workforce in the Rio Grande Valley. Most employers are faced with
difficult choices on how to offer loyal employees the benefit they
deserve or risk losing them to larger companies in larger cities. The
high cost of health insurance is extremely burdensome for these small
firms, and that is why we are here today.
H.R. 660 is a well-intended bill. Many of the 41 million Americans
without health insurance are employed by small businesses. If Congress
can find a way to help these employers provide health insurance for
their workforce, we will be well on our way to reducing the number of
uninsured in this country. But in my view, AHPs are not the way to do
it. AHPs will offer minimal coverage, sufficient only for the young and
the healthy. Our workforce will have none of the protections that State
benefit mandates offer. They will have no assurance against fraud or
premium inflation and no assurance that Federal oversight by the
Department of Labor will even be conducive to fair handling of
disputes. AHPs create an entirely new health care crisis, with 8.5
million newly underinsured Americans.
As a member of a heavily Hispanic border district, I am particularly
concerned about what this will mean for the diagnosis and the treatment
of diabetes, a disease that strikes many of my Hispanic constituents.
Mr. Speaker, over 11 million Americans have diagnosed diabetes, while
another 6 million have diabetes but don't know it.
Diabetes hits minority populations especially hard. Untreated, this
disease leads to end-stage renal failure, blindness, amputations and
over 200,000 deaths annually. However, it has been demonstrated that
appropriate use of diabetes medications, equipment, supplies, and
education can dramatically reduce the incidence and impact of
complications associated with diabetes. President Bush surely knew this
when he was Governor of Texas and signed into law the diabetes coverage
mandated currently in effect in Texas.
My principal concern is that the AHP legislation before us today
preempts the State benefit mandates in Texas and 45 other States, your
home States, for coverage of diabetes supplies and education. The
amendment that the gentleman from Michigan, Mr. Kildee and I offered,
unsuccessfully, in committee would have corrected this dangerous
omission. We also tried, again without success, to have the amendment
made in order during floor consideration.
By refusing to include a requirement that AHPs adhere to State
coverage laws associated with diabetes, we will be leaving millions of
people with diabetes to fend for themselves. It is not a matter of cost
effectiveness; it is a matter of right and wrong.
Mr. Speaker, the Democratic substitute offers small business
employers and their workers a fair alternative. It establishes a small
employer health benefit plan with minimum coverage similar to the Blue
Cross/Blue Shield standard plan.
I urge my colleagues to support the Kind-Andrews substitute, and if
that substitute is defeated, to vote against H.R. 660.
Mr. BOEHNER. Mr. Speaker, I am pleased to yield 1 minute to the
gentleman from Texas (Mr. Sam Johnson), the chairman of the
Subcommittee on Employer-Employee Relations, the gentleman who
shepherded this bill through our committee.
(Mr. SAM JOHNSON of Texas asked and was given permission to revise
and extend his remarks.)
Mr. SAM JOHNSON of Texas. Mr. Speaker, I rise in opposition to this
amendment. We have been hearing all day that it is going to create all
this stuff, and it is not going to create anything. Our bill allows for
anything to be covered, and it will all be covered.
This amendment creates an incredibly complex $50 billion government-
run program. The program sets up brand-new health care subsidies, but
only for certain small businesses and some workers. Unlike the Federal
employee plan, the new program would be subject to thousands of State
mandates. As we have heard time and again, those mandates make up at
least 15 percent of the rising cost of health insurance.
Now, here is the real kicker. In order to qualify for the subsidy,
employers are required to pay at least 50 percent of the cost for the
care of their employees. The Democrat substitute will raise health care
costs for small employers and then spend $50 billion to subsidize it.
AHPs are going to give everybody the ability to obtain insurance. Mr.
Speaker, I urge rejection of this substitute.
Mr. KIND. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, this is a very important debate that we are having
today. Just to correct one of the things just stated by the previous
speaker, the Department of Labor, just like H.R. 660, would be in
charge of administering the substitute plan that we have before us
today. They would actually contract with state-licensed insurers to
offer basic insurance plans.
The significant difference, though, is that we are asking everyone to
play on a level playing field, to respect States' rights, and to not
have Federal preemption. Because for those who believe in the free
market system, which I think most of us do, it can only work if
everyone is playing by the same rules instead of trying to establish a
two-tier system. And that, I believe, is going to be the best hope we
have, through price competition, of keeping a check on rising premium
costs.
There has been a lot of citing of statistics throughout the
afternoon, a lot from the Congressional Budget Office, and so I will
provide for the Record a letter from the Congressional Budget Office
stating their analysis of H.R. 660.
Mr. Speaker, I would encourage our colleagues, in conclusion, to
support the substitute, one that does provide an opportunity for more
small employers to provide health care coverage to their employees, one
that respects State law, one that provides some premium assistance so
they can afford it. I encourage support of the substitute and a ``no''
vote on H.R. 660.
Mr. Speaker, the letter referred to above is as follows:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 18, 2003.
Hon. George Miller,
Senior Democratic Member, Committee on Education and the
Workforce, House of Representatives, Washington, DC.
Dear Congressman: This letter responds to your request of
June 17, 2003, for additional information on CBO's estimate
of the impact of H.R. 660 on enrollment in the health
insurance markets for small employers and self-employed
workers. We expect that the effects of the bill would be
fully reflected in those markets by 2008, and all of the
following numbers refer to that year.
Under current law, CBO estimates that approximately 30.1
million people will be enrolled in health insurance offered
by plans in the state-regulated small group insurance
[[Page H5635]]
market. Under the bill, CBO estimates that combined
enrollment in state-regulated plans and association health
plans (AHPs) would rise by about 550,000 people to a total of
30.7 million people. Of this, approximately 23.2 million
people would retain coverage in the state-regulated market.
About 7.5 million people would be enrolled in AHPs, including
the additional 550,000 people who would not have been covered
by any small-employer plan under current law, and 6.9 million
people who would have been covered in the state-regulated
market.
The same consideration apply to self-employed people. We
estimate that approximately 4.7 million people will be
enrolled in state-regulated coverage purchased by self-
employed workers under current law. Under H.R. 660, CBO
estimates that combined enrollment through state-regulated
insurers and AHPs would rise by about 70,000 people to 4.8
million people. Of this, approximately 3.8 million people
would retain state-regulated coverage. About 1.0 million
people would obtain coverage through AHPs, including the
additional 70,000 people who would not have been insured
under current law, and 0.9 million people who would have been
covered in the state-regulated market.
If you would like additional information on this estimate,
the CBO staff contact is Stuart Hagen, who can be reached at
225-2644.
Sincerely,
Douglas Holtz-Eakin,
Director.
Mr. BOEHNER. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, we have 41 million Americans who do not have health
insurance. As I said before, Congress has been talking about this for a
decade. And while the underlying bill will not solve the entire
problem, it will help in addressing the needs of the uninsured.
As we heard before, some 60 percent either work for or have a
dependent who works for a business, and so they have jobs. We are not
talking about the poor here, because the poor get covered by Medicaid.
We are talking about people who go to work every day, but they happen
to work in an industry that maybe does not traditionally cover health
insurance, or they work for a small employer who just cannot afford it
because they are locked in a small State insurance pool.
We know what the cost of health insurance and these increases do. It
creates more uninsured. In the Wall Street Journal today, CALPERS, the
country's largest health plan, is set to increase premiums on an
average of 17 percent for the next year, a 17 percent increase from the
largest health care plan in the country. It is time that we step up and
take action.
The underlying bill will in fact help small businesses create more
coverage for more people. Small businesses. And who are small
businesses? How about the dry cleaner down the street or the
convenience store? How about the farmers in America today who have to
go fend for themselves as an individual in the marketplace? They may be
by themselves, maybe just family coverage. How about the real estate
agents we talked about before, independent contractors, and others who
may be self-employed that have to go fight to get insurance in very
small risk pools in many States? If we allow them to come together with
large State associations, national associations, and to group
themselves, they can have real coverage for a much more reasonable
cost.
This is the right thing to do today, to help those who pay high
premiums; and it is also the right thing to do to help those who have
no insurance at all. Those plans that are out there covered under ERISA
are the Cadillac of plans in the country. Why not let small employers
have the same advantage.
The SPEAKER pro tempore (Mr. Simpson). All time for debate on the
amendment has expired.
Pursuant to House Resolution 283, the previous question is ordered on
the bill and on the amendment offered by the gentleman from Wisconsin
(Mr. Kind).
The question is on the amendment in the nature of a substitute
offered by the gentleman from Wisconsin (Mr. Kind).
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. KIND. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The vote was taken by electronic device, and there were--yeas 183,
nays 238, answered ``present'' 1, not voting 12, as follows:
[Roll No. 294]
YEAS--183
Abercrombie
Ackerman
Alexander
Allen
Andrews
Baca
Baldwin
Ballance
Becerra
Bell
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boswell
Boucher
Brady (PA)
Brown (OH)
Brown, Corrine
Capps
Capuano
Cardoza
Clay
Clyburn
Cooper
Crowley
Cummings
Davis (AL)
Davis (CA)
Davis (FL)
Davis (IL)
Davis (TN)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Doyle
Edwards
Emanuel
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank (MA)
Frost
Gordon
Green (TX)
Grijalva
Harman
Hill
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley (OR)
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind
Kleczka
Kucinich
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Lynch
Majette
Maloney
Markey
Marshall
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Mollohan
Moore
Murtha
Nadler
Napolitano
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rodriguez
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Sabo
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Sandlin
Schakowsky
Schiff
Scott (GA)
Scott (VA)
Serrano
Sherman
Skelton
Slaughter
Snyder
Solis
Spratt
Stark
Stenholm
Strickland
Stupak
Tanner
Taylor (MS)
Thompson (CA)
Thompson (MS)
Tierney
Towns
Udall (CO)
Udall (NM)
Van Hollen
Visclosky
Waters
Watson
Watt
Waxman
Weiner
Wexler
Woolsey
Wu
Wynn
NAYS--238
Aderholt
Akin
Bachus
Baker
Ballenger
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bass
Beauprez
Bereuter
Biggert
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Boyd
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burns
Burr
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Cardin
Carson (OK)
Carter
Case
Castle
Chabot
Chocola
Coble
Cole
Collins
Cox
Cramer
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
DeMint
Diaz-Balart, L.
Diaz-Balart, M.
Dooley (CA)
Doolittle
Dreier
Duncan
Dunn
Ehlers
Emerson
English
Everett
Feeney
Ferguson
Flake
Fletcher
Foley
Forbes
Fossella
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gillmor
Gonzalez
Goode
Goodlatte
Goss
Granger
Graves
Green (WI)
Greenwood
Gutknecht
Hall
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hobson
Hoekstra
Hostettler
Houghton
Hulshof
Hunter
Hyde
Isakson
Issa
Istook
Janklow
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
LaHood
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (KY)
Lucas (OK)
Manzullo
McCotter
McCrery
McHugh
McInnis
McIntyre
McKeon
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Moran (VA)
Murphy
Musgrave
Myrick
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Osborne
Ose
Otter
Oxley
Paul
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Porter
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Royce
Ryan (WI)
Ryun (KS)
Saxton
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Smith (MI)
Smith (TX)
Stearns
Sullivan
Sweeney
Tancredo
Tauscher
Tauzin
Taylor (NC)
Terry
Thomas
Thornberry
Tiberi
Toomey
Turner (OH)
Turner (TX)
Upton
Velazquez
Vitter
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Young (AK)
Young (FL)
ANSWERED ``PRESENT''--1
Baird
[[Page H5636]]
NOT VOTING--12
Carson (IN)
Conyers
Costello
Gephardt
Gingrey
Gutierrez
Hastings (FL)
Neal (MA)
Smith (NJ)
Smith (WA)
Souder
Tiahrt
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (Mr. Simpson) (during the vote). Members are
advised that 2 minutes remain in this vote.
{time} 1632
Messrs. OSE, BLUNT, NEUGEBAUER and OXLEY changed their vote from
``yea'' to ``nay.''
So the amendment in the nature of a substitute was rejected.
The result of the vote was announced as above recorded.
Stated against:
Mr. GINGREY. Mr. Speaker, on rollcall No. 294, the voting machine did
not properly record my vote. I would have voted ``nay.''
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit Offered by Mrs. McCarthy of New York
Mrs. McCARTHY of New York. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore. Is the gentlewoman opposed to the bill?
Mrs. McCARTHY of New York. Yes, Mr. Speaker, in its present form.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Mrs. McCarthy of New York moves to recommit the bill H.R.
660 to the Committee on Education and the Workforce with
instructions to report the same back to the House forthwith
with the following amendment:
Page 14, insert after line 17 the following:
``(e) Protection of Existing Group Health Plan Coverage.--
``(1) In general.--The requirements of this section are not
met with respect to an association health plan if--
``(A) during the 1-year period preceding the date of the
enactment of the Small Business Health Fairness Act of 2003,
any participating employer of the plan maintained another
group health plan providing a type of coverage described in
paragraph (2), and
``(B) such association health plan does not provide such
type of coverage.
``(2) Types of coverage.--A type of coverage is described
in this paragraph if it consists of--
``(A) coverage for breast cancer screening and tests
recommended by a physician,
``(B) coverage for the expenses of pregnancy and
childbirth,
``(C) coverage for well child care, or
``(D) direct access to those obstetric or gynecological
services which are provided by the plan.
``(3) Predecessors and controlled groups.--For purposes of
this subsection, a predecessor of an employer or any member
of the employer's controlled group shall be treated as the
employer. For purposes of this paragraph, the term
`controlled group' means any group treated as a single
employer under subsection (b), (c), (m), or (o) of section
414 of the Internal Revenue Code of 1986.''
Mrs. McCARTHY of New York (during the reading). Mr. Speaker, I ask
unanimous consent that the motion to recommit be considered as read and
printed in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from New York?
There was no objection.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
New York (Mrs. McCarthy) is recognized for 5 minutes in support of her
motion.
Mrs. McCARTHY of New York. Mr. Speaker, I yield myself 2 minutes.
I rise in strong support for the motion to recommit. This motion will
prohibit employers from joining association health plans if it allows
for a reduction in coverage for breast cancer services. A vote against
this motion and for the bill will allow employers that already cover
basic mammograms to drop this coverage.
Mr. Speaker, a reduction in health insurance in any form is a
reduction in health care. It is just that simple. States know that
without guaranteeing basic health care, patients will not get the
services they desperately need. They will only seek help under extreme
circumstances, requiring more expensive medical treatment for their
disease, putting their lives and the lives of their children at risk.
According to the American Cancer Society, over 211,000 new cases of
breast cancer will be diagnosed in the United States this year alone.
Two thousand of those cases will be in my State. Breast cancer is
potentially fatal, but early detection through mammogram screenings is
the key to proper treatment of this disease. Timely screening could
prevent approximately 15 percent to 30 percent of all deaths from
breast cancer among women over the age of 40. Currently, New York and
47 other States require insurance companies to cover mammogram
screenings. However, under this bill, associated health plans would be
exempt from having to provide this critical benefit in these 48 States.
This motion would at least present a reduction of health care services
to those who already have this important benefit.
As a nurse, I cannot believe this House, after hearing from cancer
survivors for years about the need for treatments and screenings to
beat this deadly disease, is now going to be rolling back these patient
protections.
Today before you vote, truly realize a vote against this motion to
recommit will harm millions of patients across this country.
Mr. Speaker, I yield 1\1/2\ minutes to the gentlewoman from Minnesota
(Ms. McCollum).
Ms. McCOLLUM. Mr. Speaker, I am proud to join my colleagues today in
offering a motion to recommit to protect the coverage that women and
children currently have today. This motion simply states that
associated health plans cannot stop coverage for well-child visits,
maternity or other types of visits that are vital to women's and
children's health care. Children deserve a healthy start in life.
Coverage to promote healthy children is required in Minnesota and 30
other States. This coverage ensures that children have regular visits
to pediatricians to get immunizations and preventive care. Why would we
not want to protect our children?
This coverage is particularly important because getting a good start
in life can prevent avoidable illnesses, identify serious disabilities,
and reduce future health care costs. We have all seen the importance of
childhood immunizations. For example, today polio has been eradicated
because of the determination and commitment our country had to immunize
children when they were young. Regular doctor visits for newborns is
absolutely critical. Thirty-three children are born every day with
severe hearing loss. If caught early enough through preventive doctor
visits, this screening can make a difference. It can make a difference
in their lives and a difference in the money spent on special
education.
This motion ensures that families who currently have well-child
visits and maternity coverage will not lose it tomorrow. We should be
ensuring access to quality, comprehensive health care for our Nation's
working families and not rolling back basic coverage. I urge my
colleagues to support the motion to recommit.
Mrs. McCARTHY of New York. Mr. Speaker, I yield 30 seconds to the
gentlewoman from California (Ms. Woolsey).
Ms. WOOLSEY. Mr. Speaker, few health services are as important to a
woman as an annual mammogram. Early detection is necessary as a weapon
in our fight against breast cancer. Breast cancer has already touched
far too many families. I simply cannot accept the idea of even one
woman in any of our districts forgoing her annual mammogram and then
later being diagnosed with advanced breast cancer because her
association health plan does not cover mammograms.
Support this motion to recommit. Help save the lives of our wives,
mothers, daughters, and sisters. The women of this country are counting
on your vote.
Mrs. McCARTHY of New York. Mr. Speaker, I yield the balance of my
time to the gentleman from New Jersey (Mr. Andrews).
The SPEAKER pro tempore. The gentleman from New Jersey is recognized
for 1 minute.
Mr. ANDREWS. Mr. Speaker, if the underlying bill becomes law, 4
million American women who presently are guaranteed breast cancer care
will only have it if the insurance companies they move to decide to let
them have it. We can change that by voting ``yes'' on this motion to
recommit. The question is simple: Do we want our mothers and our
sisters and our daughters and our
[[Page H5637]]
wives to rely upon the whims of the insurance industry or the power of
our votes? If you want to guarantee that this care goes forward, the
only way to do it is to vote ``yes'' on the motion of the gentlewoman
from New York. I urge a ``yes'' vote.
Mr. BOEHNER. Mr. Speaker, I rise in opposition to the motion to
recommit.
The SPEAKER pro tempore. The gentleman from Ohio is recognized for 5
minutes.
Mr. BOEHNER. Mr. Speaker, the underlying bill seeks to address the
needs of 41 million Americans who have no health insurance. What the
motion to recommit does is essentially mandate coverage on association
health care plans. If you have no health insurance, a mandate will do
you no good. What we seek to do with the underlying bill is to cover
more people. Sixty percent of the people who are uninsured either work
in a small business or have a relative that works in a small business.
What we are trying to do here is level the playing field so that small
businesses can buy health insurance for their employees just like large
companies and unions can do today.
Under ERISA, there are but several small mandates. We do not mandate
every coverage. But if you ask employees of large companies and you ask
employees and members of large unions, they will tell you that they
have the best health care plans in America. These large plans in our
country have great benefits. They cover virtually all the illnesses and
all the diseases that are there. But they are allowed to design one
benefit issue for each of these mandates that covers all 50 States. It
may not read the same in every particular State. What we are trying to
do with the underlying bill is to give small businesses the same
advantage in the marketplace that big businesses have today.
I would urge my colleagues at this hour, reject the motion to
recommit and vote for the final passage of this bill.
The SPEAKER pro tempore. Without objection, the previous question is
ordered on the motion to recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Recorded Vote
Mrs. McCARTHY of New York. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair
will reduce to 5 minutes the minimum time for any electronic vote on
the question of final passage.
The vote was taken by electronic device, and there were--ayes 192,
noes 230, not voting 12, as follows:
[Roll No. 295]
AYES--192
Abercrombie
Ackerman
Alexander
Allen
Andrews
Baca
Baird
Baldwin
Ballance
Becerra
Bell
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boswell
Boucher
Boyd
Brady (PA)
Brown (OH)
Brown, Corrine
Capps
Capuano
Cardin
Cardoza
Carson (OK)
Clay
Clyburn
Cooper
Cramer
Crowley
Cummings
Davis (AL)
Davis (CA)
Davis (FL)
Davis (IL)
Davis (TN)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Doyle
Edwards
Emanuel
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank (MA)
Frost
Gordon
Green (TX)
Grijalva
Gutierrez
Hall
Harman
Hill
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley (OR)
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind
Kleczka
Kucinich
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Lucas (KY)
Lynch
Majette
Maloney
Markey
Marshall
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Mollohan
Moore
Murtha
Nadler
Napolitano
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rodriguez
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Sabo
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Sandlin
Schakowsky
Schiff
Scott (GA)
Scott (VA)
Serrano
Sherman
Skelton
Slaughter
Snyder
Solis
Spratt
Stark
Stenholm
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Tierney
Towns
Udall (CO)
Udall (NM)
Van Hollen
Visclosky
Waters
Watson
Watt
Waxman
Weiner
Wexler
Woolsey
Wu
Wynn
NOES--230
Aderholt
Akin
Bachus
Baker
Ballenger
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bass
Beauprez
Bereuter
Biggert
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burns
Burr
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Carter
Case
Castle
Chabot
Chocola
Coble
Cole
Collins
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
DeMint
Diaz-Balart, L.
Diaz-Balart, M.
Dooley (CA)
Doolittle
Dreier
Duncan
Dunn
Ehlers
Emerson
English
Everett
Feeney
Ferguson
Flake
Fletcher
Foley
Forbes
Fossella
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Gonzalez
Goode
Goodlatte
Goss
Granger
Graves
Green (WI)
Greenwood
Gutknecht
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hobson
Hoekstra
Hostettler
Houghton
Hulshof
Hunter
Hyde
Isakson
Issa
Istook
Janklow
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
LaHood
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (OK)
Manzullo
McCotter
McCrery
McHugh
McInnis
McKeon
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Moran (VA)
Murphy
Musgrave
Myrick
Nethercutt
Neugebauer
Northup
Norwood
Nunes
Nussle
Osborne
Ose
Otter
Oxley
Paul
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Porter
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Royce
Ryan (WI)
Ryun (KS)
Saxton
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Smith (MI)
Smith (TX)
Souder
Stearns
Sullivan
Sweeney
Tancredo
Tauzin
Taylor (NC)
Terry
Thomas
Thornberry
Tiberi
Toomey
Turner (OH)
Turner (TX)
Upton
Velazquez
Vitter
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Young (AK)
Young (FL)
NOT VOTING--12
Carson (IN)
Conyers
Costello
Cox
Gephardt
Hastings (FL)
Johnson, E. B.
Neal (MA)
Ney
Smith (NJ)
Smith (WA)
Tiahrt
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (Mr. Simpson) (during the vote). Members are
advised that 2 minutes remain in this vote.
{time} 1700
Mr. DOOLEY of California changed his vote from ``aye'' to ``no.''
So the motion to recommit was rejected.
The result of the vote was announced as above recorded.
Stated against:
Mr. NEY. Mr. Speaker, on June 19, 2003, I was unable to be present
for rollcall vote 295 on H.R. 660, the Small Business Health Fairness
Act of 2003 due to important business in the Subcommittee on Housing
and Community Opportunity, which I chair. Had I been present I would
have voted ``no'' on rollcall vote No. 295.
The SPEAKER pro tempore. The question is on passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Mr. ANDREWS. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. This will be a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 262,
noes 162, not voting 11, as follows:
[[Page H5638]]
[Roll No. 296]
AYES--262
Aderholt
Akin
Bachus
Baker
Ballenger
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bass
Beauprez
Bell
Bereuter
Biggert
Bilirakis
Bishop (GA)
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burns
Burr
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Carson (OK)
Carter
Case
Castle
Chabot
Chocola
Coble
Cole
Collins
Cooper
Cox
Cramer
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis (AL)
Davis (IL)
Davis (TN)
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
DeMint
Diaz-Balart, L.
Diaz-Balart, M.
Dooley (CA)
Doolittle
Dreier
Duncan
Dunn
Edwards
Ehlers
Emerson
English
Everett
Feeney
Ferguson
Flake
Fletcher
Foley
Forbes
Fossella
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Gonzalez
Goode
Goodlatte
Goss
Granger
Graves
Green (WI)
Greenwood
Gutknecht
Hall
Harman
Harris
Hart
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hobson
Hoekstra
Hostettler
Houghton
Hulshof
Hunter
Hyde
Isakson
Israel
Issa
Istook
Jackson-Lee (TX)
Janklow
Jenkins
John
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
LaHood
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
Lipinski
LoBiondo
Lucas (KY)
Lucas (OK)
Manzullo
Marshall
Matheson
McCarthy (MO)
McCotter
McCrery
McHugh
McInnis
McIntyre
McKeon
Meek (FL)
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Moran (VA)
Murphy
Musgrave
Myrick
Nethercutt
Neugebauer
Ney
Northup
Nunes
Nussle
Osborne
Ose
Otter
Oxley
Paul
Pearce
Pence
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Porter
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Rothman
Royce
Rush
Ryan (WI)
Ryun (KS)
Sanchez, Loretta
Saxton
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skelton
Smith (MI)
Smith (TX)
Snyder
Souder
Stearns
Stenholm
Sullivan
Sweeney
Tancredo
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thornberry
Tiberi
Toomey
Turner (OH)
Turner (TX)
Upton
Velazquez
Vitter
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Wynn
Young (AK)
Young (FL)
NOES--162
Abercrombie
Ackerman
Alexander
Allen
Andrews
Baca
Baird
Baldwin
Ballance
Becerra
Berkley
Berman
Berry
Bishop (NY)
Blumenauer
Boswell
Boucher
Boyd
Brady (PA)
Brown (OH)
Brown, Corrine
Capps
Capuano
Cardin
Cardoza
Clay
Clyburn
Crowley
Cummings
Davis (CA)
Davis (FL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Doyle
Emanuel
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank (MA)
Frost
Gordon
Green (TX)
Grijalva
Gutierrez
Hill
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley (OR)
Hoyer
Inslee
Jackson (IL)
Jefferson
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind
Kleczka
Kucinich
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lofgren
Lowey
Lynch
Majette
Maloney
Markey
Matsui
McCarthy (NY)
McCollum
McDermott
McGovern
Meehan
Meeks (NY)
Menendez
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Mollohan
Moore
Murtha
Nadler
Napolitano
Norwood
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rodriguez
Ross
Roybal-Allard
Ruppersberger
Ryan (OH)
Sabo
Sanchez, Linda T.
Sanders
Sandlin
Schakowsky
Schiff
Scott (GA)
Scott (VA)
Serrano
Sherman
Slaughter
Solis
Spratt
Stark
Strickland
Stupak
Tanner
Tauscher
Thompson (CA)
Thompson (MS)
Tierney
Towns
Udall (CO)
Udall (NM)
Van Hollen
Visclosky
Waters
Watson
Watt
Waxman
Weiner
Wexler
Woolsey
Wu
NOT VOTING--11
Carson (IN)
Conyers
Costello
Gephardt
Hastings (FL)
Johnson, E. B.
McNulty
Neal (MA)
Smith (NJ)
Smith (WA)
Tiahrt
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (during the vote). Members are advised that 2
minutes remain in this vote.
{time} 1707
Mr. RUSH changed his vote from ``no'' to ``aye.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________