[Congressional Record (Bound Edition), Volume 151 (2005), Part 13]
[House]
[Pages 17570-17603]
[From the U.S. Government Publishing Office, www.gpo.gov]




               SMALL BUSINESS HEALTH FAIRNESS ACT OF 2005

  Mr. BOEHNER. Mr. Speaker, pursuant to H. Res. 379, I call up the bill 
(H.R. 525) 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.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore (Mr. Gillmor). Pursuant to House Resolution 
379, the bill is considered read for amendment.
  The text of H.R. 525 is as follows:

                                H.R. 525

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

[[Page 17571]]



     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Health Fairness Act of 2005''.
       (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.
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 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 2005,
       ``(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 2005.
       ``(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--

[[Page 17572]]

       ``(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 
     2005, 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.
       ``(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) of subparagraph (B) 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

[[Page 17573]]

     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 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 2005, 
     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

[[Page 17574]]

     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 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

[[Page 17575]]

     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 2005.
       ``(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.--
       ``(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--

[[Page 17576]]

       ``(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 2005, 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 2005 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, 
     2010, 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

``801. Association health plans.
``802. Certification of association health plans.
``803. Requirements relating to sponsors and boards of trustees.
``804. Participation and coverage requirements.
``805. Other requirements relating to plan documents, contribution 
              rates, and benefit options.
``806. Maintenance of reserves and provisions for solvency for plans 
              providing health benefits in addition to health insurance 
              coverage.
``807. Requirements for application and related requirements.
``808. Notice requirements for voluntary termination.
``809. Corrective actions and mandatory termination.
``810. Trusteeship by the Secretary of insolvent association health 
              plans providing health benefits in addition to health 
              insurance coverage.
``811. State assessment authority.
``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

[[Page 17577]]

     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 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 after 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 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 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.


[[Page 17578]]


  The SPEAKER pro tempore. After 1 hour of debate on the bill, it shall 
be in order to consider the amendment in the nature of a substitute 
printed in House Report 109-183, 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 of debate on the 
bill.
  The Chair recognizes the gentleman from Ohio (Mr. Boehner).


                             General Leave

  Mr. BOEHNER. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks on H.R. 525.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Ohio?
  There was no objection.
  Mr. BOEHNER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the most pressing crisis we face in health care today is 
the number of Americans who lack basic health insurance. The number of 
uninsured Americans today stands at 45 million Americans; 27 million 
are fully employed. And 63 percent of these working uninsured are 
either self-employed or work for a small business with fewer than 100 
employees. It is tragic that so many employers cannot afford to 
purchase high-quality health insurance benefits for their workers.
  The problem is not going 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 their employees are sharing 
the burden of increased insurance premiums. Employer-based health 
insurance premiums jumped by 11 percent last year following a 15 
percent increase in 2003.
  Clearly, we need to focus on providing affordable health care to the 
uninsured as well as ensure employers who provide health benefits to 
their employees are not forced to drop their coverage because of rising 
premiums and high administrative costs.
  The Small Business Health Fairness Act 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 United States Chamber of Commerce where he said, ``AHPs 
would provide small businesses the same opportunity that big businesses 
get, and that is the economies of scale, the economies of purchase, the 
abilities to share risk in larger pools which drives down the costs of 
health care for small businesses.''
  The President is right, and we should help level the playing field so 
small businesses can offer quality coverage to their workers.
  Americans overwhelmingly agree with President Bush that association 
health plans are the right plan to help the uninsured. A poll conducted 
last year showed that 93 percent of Americans support association 
health plans as a way of providing access to affordable care for 
American workers who lack coverage. Over the last year, we have seen 
how large corporations are now starting to band together to provide 
health care to their part-time workers. Do small businesses and their 
workers not deserve the same opportunity?
  Importantly, the bill gives AHPs the freedom from costly State 
mandates because small businesses deserve to be treated in the same 
fashion as large corporations and unions who receive the same 
exemptions today. Clearly, these mandates are useless to families who 
have no health coverage in the first place. If you do not have health 
care coverage, State mandates requiring health plans to offer specific 
benefits do you and your family no good at all. This measure includes 
strong safeguards to protect American workers.
  Despite the bipartisan nature of this bill, I would like to correct 
some of the misinformation that I have heard. The measure protects 
against cherry-picking because we make clear that AHPs must comply with 
the 1996 Health Insurance Portability and Accountability Act, 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 where the employer is located. The bill 
also includes 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. These organizations must be established for 
purposes other than providing health insurance for at least 3 years.
  We in Congress have a responsibility to deal with a problem of small 
businesses who cannot afford to provide health insurance because of 
skyrocketing health care costs. The U.S. economy is getting stronger by 
the day, and more and more employers are hiring workers each month. 
Earlier this month the unemployment rate dropped to its lowest level 
since September of 2001 and the Labor Department reported that 3.7 
million new jobs have been created since March of 2003. That is 25 
consecutive months of sustained job creation.
  We want to make sure that these workers have the opportunity to 
receive quality health insurance through their employer, and this bill 
can help make that happen.
  Mr. Speaker, I reserve the balance of my time.
  Mr. ANDREWS. Mr. Speaker, I rise in opposition to the bill and I 
yield myself 4 minutes.
  Mr. Speaker, today there is a point of agreements and a strong point 
of disagreement. There is a point of agreement that health care costs 
are rising too fast for too many people. There is a point of agreement 
that the consequences of that price increase is a tremendous burden on 
small business and a high likelihood that more people will be 
uninsured.
  I do not think there is a Member of this body that does not favor 
finding an intelligent and effective way to reduce health care costs 
for small business so they can continue to insure the people they do 
insure and expand and insure more people in the future.
  Where we disagree is over whether this underlying bill is the right 
way to do it, and we emphatically believe that it is not.
  There are four reasons to oppose this bill. The first is that there 
is a better idea. There is a better way to solve this problem, and the 
gentleman from Wisconsin (Mr. Kind) will address that issue when our 
substitute is brought to the floor in a little while.
  The second reason is that this bill will not result in a reduction of 
the number of uninsured. To the contrary, it will result in an increase 
in the number of uninsured people, and here is how. It is estimated by 
the experts in this field that 8 million people will be shifted from 
conventional health care policies and plans to association health 
plans. These 8 million people will, in fact, probably have a lower 
premium than they do right now for a little while. But when those 8 
million people are shifted out of conventional health care plans and 
they will tend to be younger and healthier people, the people remaining 
in the conventional health care plans will have to bear more of the 
costs, and premiums will go up by an estimate of 23 percent. When the 
premiums go up on the rest of those in the pool, fewer of them will be 
insured.
  The experts estimate that while 8 million people will be shifted from 
regular plans to AHPs, 9 million people approximately will lose their 
coverage altogether, and the results will be a net loss in the number 
of insured of 1 million people.

[[Page 17579]]

  So supporting this bill will increase the number of uninsured, not 
decrease it; and it will increase premiums by 23 percent.
  The second reason to oppose this bill is that it fails to provide the 
protection to patients, providers and consumers that good insurance 
regulation provides. There are simply no effective regulations that 
will keep an insurance company from going bankrupt and being unable to 
meet its obligations to its policy holders and pay its claims. We have 
seen this happen before in multiemployer welfare associations. We will 
be submitting at the appropriate time a list for the Record of MEWAs 
that have failed.
  This is the reason that the National Governors Association, that 
attorneys general, that commissioners of insurance both Republican and 
Democrat oppose this bill because the regulation that would protect 
patients and providers and consumers is not there.
  The third reason that we should oppose this bill, the final reason, 
is that the coverage that people have fought for over the years, so 
that women have a minimum stay in the hospital after they have a C 
section, so that women have the right to an annual mammogram, so that 
people with diabetes have the right to insulin or diabetic care, so 
that people struggling with mental health problems or with substance 
abuse have the right to have those services covered, those protections 
which have been supported by Republicans and Democrats in State 
legislatures around this country are effectively repealed by the 
underlying bill, a judgment being made in Washington that contravenes 
the good judgment of Republicans and Democrats around the country.
  This bill should be opposed. There is a better way that the gentleman 
from Wisconsin (Mr. Kind) will be putting forward with my assistance. 
This is a bill that will increase the number of uninsured and increase 
health insurance premiums for small businesses.

                              {time}  1545

  This is a bill that will leave patients and providers and consumers 
unprotected if and when insurance companies go bankrupt. Finally, this 
is a bill that effectively repeals protections for breast cancer 
screening, colon cancer screening, diabetes care, substance abuse care, 
and mental health care. It is a bill that should be defeated.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BOEHNER. Mr. Speaker, I yield 4 minutes to the gentleman from 
Texas (Mr. Sam Johnson), chairman of the Subcommittee on Employer-
Employee Relations.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I thank the gentleman from 
Ohio for yielding me this time.
  As you know, Mr. Speaker, the cost of providing health care for 
employees has become the number one issue for small businesses around 
this country. It is especially important to me, because in my home 
State of Texas, one in four workers are uninsured. Small businesses 
have it especially tough because there is an inherent problem in a 
small number of people. You need to be able to pool risk to make 
insurance work. To make matters worse, there is a lack of competition 
in the small group health insurance market, allowing a few insurers to 
charge whatever they want. That is why we need association health 
plans.
  These AHPs would allow small businesses to pool together to purchase 
health insurance. So instead of one individual company shopping for 
health care insurance, they would bring an entire trade association, 
for example, the U.S. Chamber of Commerce, to the table with much 
better bargaining power.
  However, pooling risk and buying in bulk is not enough. If your 
association had members all across the United States, you would have to 
abide by 50 different sets of mandated benefits in order to offer your 
insurance. Not only is that a headache, but it is more costly. Some of 
the mandates that have been enacted by State legislatures include 
infertility treatment and alternative health solutions such as 
acupuncture. These mandates drive up the cost of premiums.
  To resolve this, AHPs would allow small businesses to buy insurance 
under the same terms that large corporations and unions enjoy today. 
ERISA, a law that governs employer benefits, lets these sort of self-
insured plans use one set of Federal rules, not 50 State rules. Talk 
about a quick way to lower administrative costs.
  And lower administrative costs, Mr. Speaker, means lower premiums, up 
to 30 percent lower by some estimates, and that means affordable health 
care for employers and their employees alike. So who would not want 
AHPs to pass?
  Some critics say AHPs will be an opportunity for fly-by-night groups 
that front as insurance companies and then leave employers with unpaid 
claims. The AHP bill in both the House and the Senate has tough 
safeguards to protect small businesses and their employees. A bona fide 
trade organization must have been in existence for 3 years before 
enactment of the law in order to offer an AHP. And there are Federal 
solvency standards set up for these health plans, including 
requirements for a reserve fund and stop-loss coverage. This is beyond 
and above what ERISA requires.
  Moreover, the Department of Labor would be charged with the oversight 
of these plans, and the bill gives them the power to pursue criminal 
penalties against those who commit fraud. The Department of Labor has 
testified in hearings that they are up to the task and support the 
legislation.
  Who else? Groups that have worked so hard to get coverage for their 
particular treatment mandated by State legislatures do not want AHPs to 
be exempt from the 50 different State laws. Let me say it plainly: That 
is the point of the legislation. One uniform set of benefits lowers 
administrative costs. If it is good enough for large corporations and 
unions, it ought to be good enough for small businesses.
  Mr. Speaker, AHPs are a big step in the right direction for our hard-
working families who need health insurance now.
  Mr. ANDREWS. Mr. Speaker, I am pleased to yield 3 minutes to the 
gentleman from Wisconsin (Mr. Kind), who has come up with a very 
constructive and progressive alternative.
  Mr. KIND. Mr. Speaker, I want to commend my friend and colleague, the 
gentleman from New Jersey (Mr. Andrews), for the leadership he has 
shown on this issue.
  Here we are again, Mr. Speaker. Year after year after year it seems 
we continue to rise in this Chamber to debate the same issue. One of 
the reasons we have to do this year after year is because bad policy is 
tough to sell, and especially tough to sell in the Senate right now, 
which has refused to take this up and move it forward because it has 
been bad policy.
  The chairman of the full committee, the gentleman from Ohio (Mr. 
Boehner), had a chart showing us a 93 percent approval of AHPs. That is 
not surprising, Mr. Speaker. There is such a craving throughout America 
for any type of legislative proposal that would bring price relief to 
the rising cost of health care, that I am afraid people will chase any 
proposal and even jump off a cliff without looking where they are going 
to land.
  That is why, Mr. Speaker, especially under these conditions, it is 
more incumbent upon us here in this Chamber to be extra careful in 
regard to the policy proposals that we are proposing so we do not 
violate the Hippocratic oath, and that is: first do no harm to the 
current health care system. There is plenty of places where this 
legislation that is being offered today would do substantial harm.
  We have had studies outside and inside this body that have come back 
explaining the true deficiencies of this legislation, but none probably 
summarize it better than the National Small Business Association that 
recently sent us a letter expressing their concerns. Now, this is an 
organization of some of the largest Chambers of Commerce and some of 
the biggest local and national organizations throughout the country, 
all of which see this AHP proposal for what it really is: an empty 
promise.

[[Page 17580]]

  Mr. Speaker, I quote from this letter from the National Small 
Business Association in which they state, ``The biggest loser from the 
passage of AHPs would be small businesses. AHPs are not an answer to 
rising health care costs and would significantly worsen the state of 
health care for all businesses. More and more small businesses are 
realizing that despite the bumper sticker pitch in its favor, AHPs are, 
simply put, bad public policy.''
  They go on to cite the Mercer study, saying that ``premiums for those 
outside the AHP market would increase an additional 23 percent, and an 
additional 1 million people would become uninsured as this policy plays 
out.'' They go on to state that ``the minimal price savings realized by 
some businesses through AHPs would come from attracting healthier 
participants and depleting benefits that are currently required by 
States. AHPs could create plans that manipulate benefits and are 
extremely unattractive to sicker, less healthy participants.
  ``Furthermore, the CBO found most of the enrollment in AHPs would 
come from businesses switching coverage. Only 1 in 14 would be newly 
insured. AHPs do nothing to solve the problem in rising health care 
costs to small businesses and their employees.'' And they conclude by 
saying, ``They simply shift the cost from the overall market to a more 
concentrated group of people. This is hardly a long-term solution.''
  There is a better proposal, one that we will talk about in more 
detail when our substitute is offered. There is a way for us, I 
believe, to come together in a bipartisan fashion to address one of the 
most pressing issues of the day, and that is affordability and access 
to quality health care.
  Businesses large and small, family farmers, individual employees are 
all suffering alike, and that is why it is important for us to come 
together and do something meaningful to relieve the health care 
pressures in this economy.
  Mr. BOEHNER. Mr. Speaker, I yield 3 minutes to the gentleman from 
Georgia (Mr. Norwood), the chairman of the Subcommittee on Workforce 
Protections.
  Mr. NORWOOD. Mr. Speaker, I thank the chairman very much for yielding 
me this time.
  Mr. Speaker, it is my understanding that H.R. 525 is supposed to 
decrease the cost of health insurance for small businesses that cannot 
afford it today. Well, I support that. That is a good goal. All of us 
support that. Yet, unfortunately, I believe that in this bill that has 
been undermined a little bit, and my logic is fairly simple.
  As I read it, in section 805 of the bill, it allows an AHP to preempt 
State-level patient protection laws that prevent cherry-picking against 
small businesses with sick employees. Now, that troubles me a great 
deal. Look at the bill. Line 8 through 14 gives us the right, and line 
21 through 22 takes it away. Sure, everybody can buy an AHP. It is just 
if you have anybody sick, you are in serious trouble, because the 
premium is going to be so high you cannot afford it.
  After all, H.R. 525 is supposed to allow small businesses to come 
together to form large pools and purchase affordable health care 
through an association. That is a good idea. This makes sense, since 
large employers use this concept under ERISA to provide employees good 
rates, regardless of preexisting conditions. But in my opinion we, 
somewhere along the way, allowed this very good idea to be corrupted by 
a very bad provision, a sort of fly in the buttermilk of health care 
reform, in the form of section 805.
  Mr. Speaker, 49 out of 50 States have instituted at least some 
patient protections that prevent insurers from using health status to 
discriminate against patients. Yet in plain English it appears to me 
that section 805 allows an AHP to preempt those rating laws. This 
simply makes no sense.
  This is the bottom line: A small business owner in remission from 
cancer likely cannot get health insurance for himself, his family, or 
his employees if he lives in a State that allows for rating based on 
health status. Will that small business owner be able to afford high-
quality health insurance from an AHP if H.R. 525 becomes law? Based on 
the language as I understand it, as I believe it to be true, he will 
not be able to get that insurance. Now, I believe that if H.R. 525 
becomes law, it may even be much harder for that employer to get 
insurance. Why is that? Because all other employers with healthy 
employees will be in the AHPs.
  I do not believe that is the intention of this bill. I hope I am 
wrong. I am going to vote for this bill. I am going to vote for it to 
move it forward, and I dearly hope I am wrong, and I hope that my 
chairman is right. But if time proves my position correct, I want these 
comments on the record so we will know exactly where to go to fix this 
when the milk turns sour.
  Mr. BOEHNER. Mr. Speaker, I yield myself 30 seconds.
  Mr. Speaker, the gentleman from Georgia and I have had a disagreement 
over this particular provision for several years. It is very clear in 
the bill, as I read it, not the way the gentleman from Georgia (Mr. 
Norwood) reads it, and this is where the source of the disagreement 
comes in terms of how plans can choose groups of employees.
  Under current ERISA law, you are allowed to have different rates for 
different groups of employees as long as there is a reason other than 
the health status of that group to have a separate group. Maybe you 
have a plant located in one part of the State, another plant in another 
part of the State. You could have two different rates at those two 
different plants, just like you can under most State laws and what you 
can under ERISA.
  So I look forward to continuing to work with my friend from Georgia 
to resolve our misunderstanding of this issue.
  Mr. ANDREWS. Mr. Speaker, I am pleased to yield 3 minutes to the 
gentlewoman from California (Ms. Woolsey), a person who is a strong 
voice for the rights of patients and families.
  Ms. WOOLSEY. Mr. Speaker, there currently are 45 million Americans 
who do not have health insurance and are looking for real solutions for 
their lack of health care coverage. Unfortunately, H.R. 525, the so-
called Small Business Health Fairness Act, is not their answer. In 
fact, this bill allows insurance companies to preempt State law, making 
possible a race to the bottom by associated health plans as companies, 
because of this bill, can offer the cheapest insurance with the least 
coverage.
  The idea that we would allow insurance companies to trump State law 
is really outrageous. Laws to protect those with diabetes, those with 
cancer, and a host of other ailments are at risk under this plan. That 
is why I offered an amendment in the Committee on Rules, along with the 
gentlewoman from New York (Mrs. McCarthy), that would protect 
mammograms and cervical cancer screenings from being preempted by 
association health plans. Unfortunately, the Republican majority does 
not see the value in protecting women from breast and/or cervical 
cancer, because they would not allow our amendment to come to the floor 
to be debated before we voted on this bill.

                              {time}  1600

  Mr. Speaker, in my district, the Sixth Congressional District of 
California, the women of Marin County are plagued by an unusually high 
rate of breast cancer, and particularly young woman have the high 
incidence of breast cancers. But, fortunately, in California we require 
insurance companies to cover mammograms. So while the women of Marin 
County still have to worry about their community's high rate of breast 
cancer, at least they know their insurance companies cannot deny them 
access to the best available screening tools.
  I cannot accept the idea of even one woman in this Nation foregoing 
an annual mammogram or a pap smear only to be diagnosed later with 
advanced breast or cervical cancer because an association health plan 
does not provide coverage. This is a risk we cannot afford, and I urge 
my colleagues to vote ``no'' on H.R. 525.
  Mr. BOEHNER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Louisiana (Mr. Boustany), a physician.
  Mr. BOUSTANY. Mr. Speaker, 45 million Americans lack health insurance

[[Page 17581]]

today, and the number is rapidly growing. Twenty-six percent of all 
adults in Louisiana lack health insurance, and 22.6 percent of all 
working adults in Louisiana lack insurance.
  It has been said over here that we need the insurance mandates to 
protect the patient. Insurance mandates are meaningless without 
insurance. We need a free market health care system that allows doctors 
to make decisions and not insurance companies. Fifty-two percent of 
Louisiana's small businesses offer health insurance, and the number is 
constantly declining. We must act to ensure that Americans can afford 
the health insurance that they need, and we can do so by passing H.R. 
525, the Small Business Health Fairness Act.
  This bill will create association health plans that will allow small 
businesses to band together through bona fide trade associations to 
become larger purchasers of health insurance, thus giving small 
businesses the same benefits that Fortune 500 companies now enjoy.
  The Congressional Budget Office has estimated that small businesses 
obtaining insurance through AHPs would average premium reductions of 13 
percent and some as high as 25 percent reductions. Overhead costs alone 
would decrease by as much as 30 percent under these plans. What is 
wrong with this? This is offering affordable coverage to workers.
  There is additional research that also shows that up to 8.5 million 
Americans who are currently uninsured would become insured under AHPs. 
And this bill offers very many protections, consumers protections and 
protections with regard to solvency, as outlined.
  If we are going to lower costs and increase accessibility to health 
care, we need to create choices and enhance competition. This bill is 
an important first step, and I urge its passage.
  Mr. ANDREWS. Mr. Speaker, I yield 3 minutes to the gentleman from New 
Jersey (Mr. Holt), a Member who does not want to see a 23-percent 
increase in premiums for his constituents.
  Mr. HOLT. Mr. Speaker, today Member after Member has been talking 
about the 45 million Americans who lack health insurance. At the origin 
of our problem, we are the only major country where your health care 
coverage depends on who you work for. But that is not to be debated 
today.
  We are talking about the small businesses in New Jersey and elsewhere 
around the country that face the high cost of health insurance. We all 
hear about it from our small businesses and their employees. 
Unfortunately, what has been brought to the floor here is a bill that 
creates more problems than it solves.
  The concept of companies working together to control costs has worked 
in some States, and it is certainly something I support. However, I 
cannot support allowing association health plans to achieve cost 
savings by offering inferior coverage. Allowing AHPs to circumvent 
existing State laws, for example, with regard to mental health coverage 
or contraceptive equity or mammograms or prostate screening or 
countless other necessary benefits is not an acceptable means to cut 
premiums.
  Supporters of this legislation claim that millions of small 
businesses and their employees will be eligible for this new insurance 
option. However, the Congressional Budget Office estimates that only 
600,000 of those eligible are currently uninsured, a small fraction of 
this huge population.
  And H.R. 525 would allow AHPs to offer artificially lower costs by 
offering cheaper premiums to lower-risk populations, a policy that will 
lead to older and sicker people paying higher premiums. The CBO found 
that more than 20 million workers and their dependents would see their 
premiums increase due to AHPs cherry-picking.
  States require that qualified health plans cover certain basic items. 
States say that anything that is worthy of the name health plan must 
cover certain things. Well, under this bill I could create a health 
plan that covers nothing but ingrown toenail surgery. It would be the 
cheapest plan out there, but it would not help employees very much.
  I urge my colleagues to vote against H.R. 525 and to support the 
Andrews-Kind substitute. Their legislation would address the real needs 
of small employers. It would establish a small employer health benefits 
plan that would grant small business employees the same benefits as 
Federal employees receive. It provides prorated premium assistance for 
companies of varying sizes and employees of varying income. It would be 
much preferable to H.R. 525.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield 2 minutes to the 
gentleman from Georgia (Mr. Price), a member of the committee.
  Mr. PRICE of Georgia. Mr. Speaker, I thank the gentleman for yielding 
me this time and for his work on this issue and so many other important 
issues.
  When I go home, and especially as a physician in Congress, when I go 
home and talk to small businesses, they say whatever you do, whatever 
you do, do something about my health care costs. Make it so I can help 
my employees get insurance.
  Mr. Speaker, 45 million uninsured we have heard, 60 percent or more 
of those are employed currently, and why do they not have health 
insurance. Either they are self-employed or they work for small 
businesses so they have to purchase health insurance in the individual 
market.
  So what is the solution? Pool together. Six people can buy insurance 
for cheaper than one person; 60 cheaper than 6; 600 cheaper than 60; 
and 6 million cheaper than 600, and it can be quality insurance, and 
H.R. 525 is a step in the right direction.
  We have heard that the number of uninsured will go up, the cost for 
the premium will go up 23 percent. I will take that wager. This is the 
same crowd that said welfare reform would not work. I will take that 
bet.
  Once again, the rhetoric we have heard is disgraceful. We have heard 
that Republicans do not care about women with breast cancer. Come on. 
What kind of nonsense is this. Who do you think will be making the 
decisions about the kinds of provisions that will be in that insurance 
policy? It is patients. It is patients in the associations, and they 
are much closer I would argue to the individuals making decisions about 
what is going to be included under those plans than human resources 
officers in large companies.
  H.R. 525 is a step in the right direction. I encourage my colleagues 
on both sides of the aisle to support it.
  Mr. ANDREWS. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
New York (Ms. Velazquez), a person with whom I share an important goal, 
but have a disagreement on means.
  Ms. VELAZQUEZ. Mr. Speaker, in every State and every district when we 
meet with small business owners, their number one concern is rising 
health care costs. Even as we sit here, the cost of health care 
continues to rise.
  Today's legislation will help address this problem. Association 
health plans will provide an employer-based solution to help the sector 
of the economy that is being hit the hardest: small businesses. Critics 
of the bill will come forward today and tell you how association health 
plans are going to lead to a devastating impact on small businesses and 
the insurance market. Well, from where I stand, it is hard to imagine 
that it could get any worse.
  We have 45 million Americans without health insurance and over half 
are small businesses and their employees. This includes up to 7 million 
children that have family members working for small firms. And for the 
last 5 years, small businesses have seen insurance costs increase by 
over 60 percent. These are statistics that are so often stated in this 
town that we forget what the real impact is. When an employer has to 
spend an additional $3,000 a year for coverage per employee year after 
year, it is easy to understand why some are dropping coverage all 
together.
  We have a modest solution before us today that no one can claim will 
address all of the problems, but it can provide some help in a market 
that needs it. I think it is important to talk about what association 
health plans are and what they are not. These plans will be under the 
same set of rules that apply to corporate and union plans. In

[[Page 17582]]

fact, the requirements for association health plans are even more 
strict. It will require that an association health plan have sufficient 
reserves to pay all claims. It includes protections against cherry-
picking to prevent adverse selection. It provides a structure to ensure 
that the DOL can monitor these plans.
  Critics will cite an outdated CBO study that does not even examine 
the legislation before us today. Will association health plans cure all 
of the problems when it comes to health insurance in the small group 
market? Absolutely not. But will it bring some elements of 
affordability and competition in these markets? I think so.
  By some estimates, this bill is estimated to provide as many as 8 
million Americans with insurance, no small sum. One of the best 
indicators as to whether AHPs will increase competition is the strong 
opposition from insurance companies. They are worried that they will 
lose their stranglehold on the small-group market. These insurance 
companies with highly paid lobbyists from Blue Cross/Blue Shield, for 
example, that hold monopolies on State markets are worried that they 
will have to start negotiating premiums rather than dictating them.
  I rise in strong support of this legislation. I ask my colleagues to 
do the same. Just as important, I call on the Senate to act on this 
legislation and the administration to put its full backing behind this 
bill. This Nation's entrepreneurs deserve it.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I reserve the balance of my 
time.
  Mr. ANDREWS. Mr. Speaker, I yield 3 minutes to the gentleman from 
Massachusetts (Mr. Tierney), a Member who understands that this bill 
will increase the number of uninsured by at least 1 million people.
  Mr. TIERNEY. Mr. Speaker, this so-called Small Business Health 
Fairness Act is a bill that is attractive to a few, seems to be 
sufficient for none, and is going to be harmful for many.
  The Congressional Budget Office did an estimate of the proposed bill. 
It estimated that only 600,000 of the 45 million uninsured will be 
provided new insurance coverage by these AHPs. In fact, the respected 
2003 Mercer Consultant Study that was done for the National Small 
Business Association found that the number of uninsured will increase 
by 1 million, as increased nonassociated market costs force small 
employers to drop coverage.
  The fact of the matter is there is not going to be the dramatic 
savings proposed here. That is not going to materialize. The 
Congressional Budget Office found that these premiums for AHPs would 
only be marginally less than traditional premiums for health care 
plans.
  In fact, the 2003 Mercer Study found that premiums would increase by 
23 percent for those outside the AHP market. It also found that there 
would be an increase in the number of uninsured workers in small firms, 
an increase of 1 million people as a result of this plan being 
implemented.
  Again, the fact of the matter is that Americans would also lose their 
right to vital medical coverage, like OB-GYN and pediatrician services, 
cervical, colon, mammography and prostate cancer screening, maternity 
benefits, well-care child services, and diabetes treatment.
  Mr. Speaker, this bill is going to disallow a lot of State 
protections. In fact, that is how you get cheaper insurance. If you 
want to lower the price, you just do not give people the coverage that 
they need and deserve. Almost all of the States that we talk about have 
protections for people with coverage. Almost every Member of this House 
voted for the Federal Patient Bill of Rights that would have recognized 
these State protections that are in place for insurance programs; yet 
this bill would take those out carte blanche.

                              {time}  1615

  As a person in small business for over 22 years, and having 
represented a lot of small businesses, I can tell you from personal 
experience that small business employers do not want inferior coverage 
for their employees. We cannot allow it to happen again here. In fact, 
Mr. Speaker, I can tell you that AHPs really already exist. They are 
called the multiple employer welfare arrangements, the MEWAs. The 
public record is filled with stories of failed MEWAs that left 
employers and employees alike with unpaid medical bills. From 1988 to 
1991, dozens of MEWAs failed, leaving 400,000 individuals with over 
$123 million of unpaid medical claims.
  Small business owners and their families and their employees deserve 
protections. They deserve to go to the emergency room. Women in small 
businesses deserve to go to gynecologists without referral from another 
doctor. Why should we treat small business owners and employees as 
second-class citizens and give them second-class health care? Instead 
of extending the patient protections to all Americans, this AHP bill 
would actually roll them back and roll back the limited protections 
that they get today.
  Plainly speaking, Mr. Speaker, this bill eliminates all those 
protections. For this reason and for the other reasons I have 
mentioned, and the fact that over 1,000 different organizations oppose 
this bill, the National Governors Association, the Republican Governors 
Association, 41 State attorneys general, the National Small Business 
Administration, the National Association of Insurance Commissioners, as 
well as a dozen other labor, business and consumer groups think that 
this is not a good bill, I urge my colleagues to reject this bill and 
vote for the substitute.


                Announcement By the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Gillmor). The Chair would request that 
Members, as a courtesy to their colleagues, respect those time limits.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield 4 minutes to the 
gentleman from Maryland (Mr. Wynn).
  Mr. WYNN. I thank the gentleman for yielding me this time.
  Mr. Speaker, I rise in strong support of H.R. 525, the Small Business 
Health Fairness Act, designed to allow small businesses to create large 
insurance pools in order to give them market power which will allow 
them to purchase quality health insurance at affordable prices through 
association health plans.
  In truth, our biggest bipartisan failure in this Congress has been 
our inability to help 45 million, now pushing 50 million, Americans who 
do not have health insurance. Sixty percent of these people work in 
small businesses or are self-employed. Unfortunately, small business 
employers either cannot afford to offer health insurance or offer it at 
premium costs that employees cannot afford. Small businesses and their 
employees need our help. AHPs are not a panacea, but they are a step in 
the right direction.
  AHPs, association health plans, will be subject to Federal consumer 
protections, unlike what you may have heard, such as continuation of 
coverage; Federal claims procedures for benefit denials and appeals; 
guaranteed portability and renewability of health coverage for those 
with preexisting conditions; as well as the Mental Health Parity Act, 
the Women's Health and Cancer Rights Act, and the Newborns' and 
Mothers' Health Protection Act.
  We have also heard that AHPs will allow for cherry-picking, that only 
the healthiest will be signed up. That is not true due to the 
antidiscrimination language in the bill. Really and centrally, 
opponents claim that AHPs are bad because they do not provide mandated 
State benefits. This misanalysis reflects some of the backward thinking 
in our health care system, that people would put mandated benefits 
ahead of prevention. That does not make sense.
  Consider a State's mandated coverage for diabetes supplies. But what 
good is mandated benefits for diabetes supplies if you cannot afford to 
go to the doctor, and therefore do not know you have diabetes? Under 
AHPs you have an affordable, basic policy which covers doctors' visits. 
Therefore, you can get checkups and learn about your risk of diabetes 
or other health problems. The doctor can give you advice, prescribe 
life-style changes, and help you overcome, control, or avoid health

[[Page 17583]]

problems. In fact, the American Diabetes Association cited a recently 
completed study on diabetes prevention that conclusively showed that 
people with prediabetes can prevent the development of Type 2, or full-
blown, diabetes by making changes in their diet and increasing their 
level of physical activity.
  Our approach provides affordable access to this kind of preventive 
care, allowing people to lead healthier lives and not go to the 
emergency room, which is driving up costs for all of us.
  Some of our elitist opponents will call these policies worthless 
because they do not offer 30 or more State mandates. For a single 
mother who is a waitress who is able to take her son to the doctor, 
that is not a worthless policy. That is called progress. If the plans 
are so inadequate, don't worry, the people won't buy them.
  Most professional men and women have health insurance. Members of 
Congress have a great health insurance plan. Members of labor unions 
have health insurance. Why do they not want the mechanics and the 
barbers and the waitresses and the realtors to have health insurance? 
The attitude of our opponents seems to be, ``I drive a Cadillac. If you 
can't afford to drive a Cadillac, you don't get to drive at all.'' That 
does not make sense.
  Today 45 million Americans cannot afford a Cadillac health insurance 
policy with all the mandated benefits. However, they might be able to 
afford a more modest vehicle that would get them to their doctor's 
office where they could at least get a diagnosis, advice and 
recommendations in order to improve their quality of life.
  A broad and diverse coalition of more than 180 groups support this 
bill, including the U.S. Chamber of Commerce, the National Federation 
of Independent Business, the American Farm Bureau, the Associated 
Builders and Contractors, the Latino Coalition, and the National Black 
Chamber of Commerce. People want health insurance. Opponents of AHPs 
say, ``If you can't do everything for everyone, do nothing.'' We say 
this bill will help some people get health insurance, and we think that 
is a good thing.
  Please, support AHPs. Let us quit talking about health insurance and 
actually deliver it to the American people who work in small businesses 
and who are self-employed, because they really need it.
  Mr. ANDREWS. Mr. Speaker, among those who know the difference between 
a Cadillac and a lemon are the insurance commissioners of our States 
who oppose this bill.
  Mr. Speaker, I yield 2 minutes to the gentleman from North Dakota 
(Mr. Pomeroy), one of their former members.
  Mr. POMEROY. I thank the gentleman for yielding time.
  Mr. Speaker, let us understand something fundamental here. People do 
not just want the appearance of health insurance. They want a program 
that they can trust and that will pay when they incur the claim, and 
that is the critical problem with the bill being put before us. There 
are no meaningful consumer safeguards. This can manifest itself in 
three critical ways. First, as to content. We all know about insurance 
loopholes, the fine print that says, oh, we will pay your claim unless 
you file a claim, in which case we won't pay the claim. This kind of 
malarkey has been with us ever since insurance first came in the 
marketplace. Insurance commissioners make certain that the policy does 
what it purports to do, no fine print taking away the meaningful 
coverage. This bill takes away that insurance commissioner protection 
provided to the consumers.
  The second protection, rating. Do you know that in our States, there 
was a company that tried to sell a policy that actually raised the 
premium whenever you went to see a doctor? You thought you had good 
health care coverage, you went to see a doctor, your premium went up 
until it quickly became unaffordable. That is no insurance coverage. 
There is not the kind of protection on this kind of terrible rating 
scheme in this plan. As an insurance commissioner, I have seen rating 
schemes. Do not think for a second there are not people that will try 
this under this legislation. Consumers need protection there.
  Thirdly, solvency. If there is one part of this bill that I think 
just screams out, ``This is stupid,'' it is the part on solvency. There 
is a $2 million cap on the solvency required for an AHP, no matter how 
many lives you have. Millions and millions of lives, $2 million maximum 
coverage. Do you know that the claims incurred by two premature babies 
could totally bust this plan? Again, people want coverage that is there 
when they need it, not coverage that gives them the appearance of 
having something only to have it go bust because it did not have enough 
capitalization. This business of capping solvency stands in stark 
contrast to any actuarial approach and shows that this is absolute 
danger for our consumers. Reject this bill.
  Mr. BOEHNER. Mr. Speaker, I am pleased to yield 2 minutes to the 
gentleman from Louisiana (Mr. Boustany).
  Mr. BOUSTANY. I thank the gentleman for yielding me this time.
  Mr. Speaker, first of all, I have respect for our insurance 
commissioners, but I want to say that three out of the last four in 
Louisiana went to jail. So that is no automatic protection. I think 
other States have had similar problems.
  The preemption language in the bill only grants two limited 
exceptions from State laws that regulate insurance. Fully insured AHPs 
are exempted from State laws that would, one, preclude them from 
establishing an AHP; or, two, prevent them from designing their own 
benefit package. These two exemptions are narrowly tailored to allow 
AHPs to set a uniform benefit package that can be offered across State 
lines and to ensure that State regulators will not pass laws that 
prohibit the establishment of AHPs. State laws that regulate insurance 
and do not impact benefit design will apply, including prompt pay, 
external review, and solvency requirements. Assistant Secretary Ann 
Combs testified to this at a March 2003 Subcommittee on Employer-
Employee Relations hearing. At that hearing she noted that, quote, 
``fully insured AHPs would purchase insurance products with solvency 
standards and consumer protections regulated by the States.''
  Further specifying which State laws are not preempted is unnecessary. 
All State laws will apply except those that prevent a uniform benefit 
design or prevent an AHP from existing. Consumer protection laws that 
States see fit to pass will apply to fully insured AHPs. No further 
change in the legislation is necessary. Benefit mandates, as we have 
discussed, will be preempted as is the case for unions and large 
employers.
  Mr. ANDREWS. Mr. Speaker, I yield 3 minutes to the gentleman from 
Maryland (Mr. Van Hollen), a Member who understands that this bill will 
raise premiums by 23 percent and cost 1 million people their coverage.
  Mr. VAN HOLLEN. Mr. Speaker, I thank the gentleman from New Jersey 
for his leadership on this.
  This is a bad bill, Mr. Speaker, for many reasons. I want to focus on 
one of them, which is that this bill will strip away the consumer 
protections and the patient protections that exist under State law for 
our constituents today. I understand that we have 50 States, and in 
those 50 States many of them have different mandates for what has to be 
covered and what does not have to be covered, and there is some sense 
when you are talking about organizations operating across State lines 
that you would streamline that effort.
  That is exactly what the gentleman from Massachusetts (Mr. Tierney) 
and I tried to do when we took an amendment the other day to the Rules 
Committee. We said, let us look at six patients' rights that have been 
agreed to on a bipartisan basis by this Congress in previous 
legislation and which are overwhelmingly agreed to in our States, and 
let us say with respect to those six rights, you can't take that right 
away from one of our constituents, one of our patients, one of our 
consumers if you are an associated health plan.
  What happened to that amendment? We did not even get to hear it or 
vote

[[Page 17584]]

on it in this House. What are we afraid of? What were those six 
provisions that we wanted to make sure all our constituents, all our 
consumers, were protected by? The right to an independent external 
review of coverage decisions. Forty-three States have this rule 
already. It says if you disagree with your insurance company as to 
whether or not you are covered, let us not ask the insurance company 
who is right and who is wrong, let us have an independent individual 
who can make that decision. Does that make sense? Most of our 
constituents think they will have that right. If you pass this 
legislation and if you are in an AHP, you are not going to get it.
  Second, direct access to obstetric, gynecological, or pediatric 
services. You do not have to wait in line before you take your child to 
see the pediatrician.
  Third, imposition of prudent layperson decision-making standards. If 
you show up at the hospital, and you have a good faith reason for 
thinking you are sick, and it turns out you did not have a heart 
attack, but you went thinking you had one and you had good reason to 
think so, your insurance company cannot deny you coverage for that 
visit. You do not have to be the doctor. That is why we have doctors.
  Use of drug formularies, access to hospital emergency room treatment, 
42 States have this requirement; and making sure that we do not 
restrict the ability of our doctors to give us their opinions, to make 
sure that those States where they say you cannot have a gag rule, where 
your physician can tell you, the patient, what he or she thinks is in 
your best medical interest, they cannot be punished by the insurance 
company for telling you the truth.
  These are common-sense provisions, six common-sense provisions. That 
is what our amendment would have done. It would have made this piece of 
legislation stronger and protected our constituents. What happened? We 
did not even allow a vote on that.
  I would just like to quote from 42 State attorneys general, 
Republicans and Democrats, who say, ``Consumers rightfully expect their 
States to protect them from fraud and abuse. Elimination of the State 
role and replacement with weak Federal oversight is a bad deal for 
small businesses and for consumers.'' Those are State attorneys 
general, Republican and Democrat, who, like us, are trying to look out 
for the consumer interest.
  Do not pass this bill. If you do, you are going to have a lot of 
explaining to do to your constituents when they are denied by their 
insurance companies coverage that they thought they rightfully had.
  Mr. BOEHNER. Mr. Speaker, I reserve the balance of my time.
  Mr. ANDREWS. Mr. Speaker, I am pleased to yield 3 minutes to the 
gentleman from California (Mr. George Miller), the ranking member of 
the full committee and a fighter for working families throughout his 
career here.

                              {time}  1630

  Mr. GEORGE MILLER of California. Mr. Speaker, I thank the gentleman 
for yielding me this time.
  I must say the Republicans are on a roll here. Last week they voted 
in the Committee on Education and the Workforce to raise the cost of 
education to those students seeking a higher education by raising the 
cost of the loans that they will seek to finance that education. In 
this legislation what we see them doing is taking away vital health 
benefits that millions of Americans currently have but will lose if 
this legislation is passed. And later this week they are going to bring 
an energy to the bill to the floor of the Congress that The Wall Street 
Journal says will raise the price of gasoline.
  What is it that the middle class did to them to make them so angry at 
them? They raise the cost of their education, they take away their 
health care benefits, and now they are going to increase the price of 
gasoline. Do the Members know what the price of gasoline is in 
California? It is $2.67, $2.77, $2.87 a gallon. Do the Members know how 
hard people have struggled in these States to have minimum health care 
benefits so that they can have a mammogram, so they can have diabetes 
testing, and now they are going to take that away. And now they raise 
the cost of college education. It just does not make any sense.
  The theory is that Congress should be trying to extend meaningful 
health care coverage to families and to making sure that they have 
benefits that, in fact, are there when they need them. But that is not 
what this legislation does. This legislation overrides all of the hard 
work that was done in 40 or 45 States to make sure that people would 
have access to well baby care, to make sure that they would have access 
to maternity benefits, to make sure that they would have access to 
mammograms, crucial services that families need. This legislation says 
not necessarily so, they do not get that, on the theory that we have 
heard argued here that some plan is better than no plan.
  But a plan without benefits is not worth much at all. And why would 
one keep paying premiums even if they are low premiums if they do not 
get the coverage that their family needs?
  The point is for the people running that plan, that can turn out to 
be very profitable. That is why they do not want the insurance 
commissioners involved, because at some point the insurance 
commissioners would do what they have done in the past. They would blow 
the whistle on people running plans where they take premiums from 
middle-class workers, but they do not give the benefit that they want. 
The record is replete with that, replete with that in State after State 
after State. But that is stripped out of this legislation.
  This legislation should be rejected because it just is not the 
benefits that people need. What we ought to be doing is extending that 
kind of universal access to plans that provide people the benefits.
  The Congressional Budget Office in its most recent report, April of 
this year, analyzed the legislation two other times and concluded that 
8\1/2\ million workers would end up in AHPs under this bill, and over 
90 percent of them would come from existing health care plans where in 
all likelihood their benefits are better. The CBO looked at it once, it 
looked at it twice, it looked at it three times, and it said that is 
their conclusion.
  This means that millions of Americans, working Americans today with 
health insurance, under this plan would get stripped of the health care 
coverage that they now have and that they need, that they need. They 
are talking about trying to cover a couple hundred thousand people. 
That is their argument, but they are going to strip the health care 
benefits away from almost 8 million people that have this kind of 
coverage. It is unacceptable.
  We ought to reject this. Later this week we ought to reject the 
energy bill, and maybe we can do something to keep people in decent 
health care plans, lower their energy costs, and, when the higher ed 
bill comes, reject that, and we can save them some money on a college 
education.
  Mr. BOEHNER. Mr. Speaker, I yield 3 minutes to the gentleman from 
Texas (Mr. Sam Johnson), the chairman of the Employer-Employee 
Relations Subcommittee.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, we have heard it over and over 
again today on the floor. Too many working Americans have a job, but 
are uninsured because their employers cannot afford to purchase quality 
health insurance benefits for their workers.
  This bill addresses the two most important issues in the health care 
reform debate: cost and access. H.R. 525 would, one, increase small 
businesses' bargaining power with health care providers; two, give them 
much-needed freedom from costly State-mandated benefit packages; and, 
three, lower their overhead costs by as much as 30 percent.
  Our small businesses are denied the ability to purchase health 
coverage with the benefits large multistate companies and unions have 
enjoyed for decades. This bill fixes that problem.
  By pooling their resources, increasing their bargaining power, AHPs 
will help small businesses reduce their

[[Page 17585]]

health insurance costs. As the Members have heard me say before, if it 
is good enough for Wall Street, it is good enough for Main Street. 
Small businesses in most States are stuck with disproportionately 
higher costs because they have to choose from fewer than five 
providers. So AHPs offer them a new option to choose from. Most 
importantly, AHPs will expand access to quality health care for the 
people for whom it is currently out of reach: uninsured working 
families.
  This bill has had unwavering support in the House for nearly a decade 
now. The other body is taking a serious look at the legislation this 
year, and it is a priority in the President's health care agenda. I 
look forward to working with our colleagues from the other body to make 
this bill law this year.
  The problem is getting worse every day. Small businesses need our 
help now. Let us vote ``yes'' on H.R. 525.
  Mr. ANDREWS. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, the argument for this bill rests upon a false choice 
that I believe would have catastrophic consequences for many Americans. 
We are told by proponents of the bill that if we are willing to yield 
the guarantees that they presently enjoy under the law that guarantee 
them a mammogram, guarantee them care for diabetic illness, guarantee 
them other rights that they fought and won for, if we make that trade-
off, we will get more people health insurance. If that were true, this 
would be a difficult choice, but it is not true.
  The net impact of this bill will be to increase the number of 
uninsured people by nearly 1 million people because the increases in 
premiums for small business that will occur in businesses that stay in 
conventional plans will chase more people out of these plans. The 
experts estimate that these increases will be in excess of 20 percent.
  So this is a false choice. This bill does not say that if we yield 
these benefits that people cherish, more people will be insured. The 
opposite is true. If we were to make the mistake of yielding these 
cherished benefits, more people would lose their coverage than would 
gain it.
  This is a choice not worth making, and it is why the National 
Governors Association opposes the bill, Republicans and Democrats. And 
it is why the Attorneys General oppose the bill, Republicans and 
Democrats. And it is why commissioners of insurance, Republicans and 
Democrats, oppose the bill.
  I urge our colleagues on both sides of the aisle to protect the 
benefits that our constituents earned and deserve and to prevent the 
increase in the number of uninsured and the increase in health 
insurance benefit premiums and vote ``no'' on this bill.
  Mr. Speaker, I yield back the balance of my time.
  Mr. BOEHNER. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, small employers today have a difficult problem. They are 
trying to keep their business alive. They are trying to make enough 
money to hire and grow their business and at the same time trying to 
provide affordable health insurance. About 60 percent of the 45 million 
people who have no health insurance work for small businesses of some 
sort. But what happens to those small employers in most of these State 
risk pools? They are in the small group coverage area, and guess what 
happens? There may be a provider or two that will offer them insurance. 
They are stuck in a small pool, and they pay the highest rates of any 
group that is out there, unless, unless, one happens to be self-
employed.
  Let us say that they were a realtor, and as a realtor they are self-
employed, they are not an employee of a company, and they try to buy 
health insurance for themselves out in the open market again in these 
small State risk pools. Here it comes, $1,500 a month, $2,000 a month. 
And, my goodness, if they are sick, they will not get it at all.
  So what we have been proposing now for some 10 years, and the House 
has passed this on a bipartisan basis at least five times, is to allow 
businesses and self-employed individuals who belong to bona fide 
organizations to group together for the purposes of health insurance. 
Why should a realtor who belongs to the National Association of 
Realtors not have an opportunity, whether their State association or 
the national association wants to put together a package of plans and 
allow them to choose one of those plans that might fit the kind of 
coverage that they want, why would we not want to do this?
  We have heard all this shtick about all these plans are lousy, they 
are low-cost coverage. No. These plans would look exactly like the 
plans that big companies and unions offer today. Everybody in America 
wants to work for a big company or a union. Why? Because they have got 
great health benefits. And why do they have great health benefits? 
Because that is what their employees and that is that their members 
want. People do not want to go out and buy low-cost coverage that does 
not cover anything. That does not accomplish anything.
  So when we look at the opportunity for small businesses to go out and 
to be able to purchase health insurance for their employees, just like 
a big company or just like a union under the same set of rules, the 
same set of rules for small companies that big companies have today, we 
should not let the perfect become the enemy of the good. This will not 
solve the problem of all 45 million of the uninsured, but it will help 
millions of Americans who work for small businesses have a better 
opportunity at getting good health coverage at competitive prices.
  We have heard an awful lot of talk about it does not have this 
mandate, that mandate, that mandate. And why do big companies who do 
not have to have any mandated coverages under ERISA, why do they 
provide those? Why do they have breast cancer screening? Why? Because 
it makes sense to screen for this to detect it early and to deal with 
it. Why do they have these benefits that are not mandated? Why? Because 
they make sense to find out early in the illness.
  These small companies are going to have the same types of high-
quality plans that big companies have today without State mandates, 
because what happens is every State has a mandate. Some of them have as 
many as 30 mandated benefits that drive up the cost of health insurance 
and drive the number of uninsured up as well. But companies that offer 
a lot of these benefits, they do so with, as an example, a breast 
cancer benefit that covers the whole country, one size, not 50 
different States done in 50 different ways that they have to find out 
exactly how it is going to be covered in each of those 50 States.
  I have no doubt that the policies that will be offered by these 
association health plans will, in fact, be high-quality policies at 
very competitive prices.
  As I said before, this bill has passed the House on a number of 
occasions with broad bipartisan support, and I expect that will occur 
again today. So I would ask my colleagues to stand up and vote. We hope 
that the other body will eventually take this bill up and move it and 
to help reduce the number of uninsured Americans that we have.
  Mrs. CHRISTENSEN. Mr. Speaker, I rise in strong opposition to the 
Small Business Fairness Act, which is not fair any place, but in its 
name, and in strong support for the Kind-Andrews substitute.
  As a 5-term member of the Small Business Committee, I know and am 
very concerned that 60 percent of the uninsured are employees of small 
businesses.
  We all want to make sure they are covered, but H.R. 525 will not do 
that, it is an empty promise.
  Worse, it would more likely increase the number of uninsured instead 
of reduce them. Even for those who might be covered. This bill is 
designed to provide great coverage if you don't need it, but please 
don't get sick--what it provides then is a false sense of security.
  The stories of individuals with similar low cost plans in States with 
little regulations are tragic, and must not be replicated as H.R. 525 
would do.
  AHPs specifically remove State consumer protection laws and appeal 
rights. It is fool hardy to think that the market will provide any 
protection, and our experience with the Department of Labor and 
hearings with the Secretary have added no reassurance.
  People of color, who make up a sizeable portion of small business 
employees and who

[[Page 17586]]

tend to be sicker because this government will not build fairness and 
equality into our healthcare system, will get the shortest end of the 
stick again. Because of the higher costs of taking care of them, 
minorities will be left out, and left behind.
  There is nothing fair about this bill, I urge my colleagues vote 
``no'' on 525 and vote for a bill that provides insurance relief to 
small businesses, keeps the cost low, and protects the consumer. I urge 
my colleagues to vote ``yes'' on the Kind/Andrews substitute. The only 
fair bill before us at this time.
  Mr. REYES. Mr. Speaker, I rise in opposition to H.R. 525, the Small 
Business Health Fairness Act, but in strong support of meaningful 
measures to help small businesses offer affordable, quality health care 
coverage to their employees.
  For many businesses in my congressional district and across the 
country, the rising cost of health insurance is a growing crisis. 
Currently, many small businesses devote significant resources to offer 
health insurance to their employees--money they could have otherwise 
invested in their businesses. Others have had to reduce or drop 
coverage entirely.
  While I agree that we must find a solution to this problem, H.R. 525 
is not the answer, for several reasons. First, supporters of H.R. 525 
claim the legislation would reduce the number of uninsured. However, a 
recent Urban Institute survey states that the number would actually 
increase, because some small employers in the State-regulated market 
would be forced to drop coverage when premiums increase as a result of 
the creation of Association Health Plans, AHPs.
  Second, AHPs would be exempt from State rules that limit how much and 
how often premiums can be increased, making it likely that premiums 
would go up rather than down. In fact, the Congressional Budget Office 
estimates that AHP legislation would result in higher premiums for 80 
percent of small employers, and as many as 100,000 sick people would 
lose coverage because they would not be able to afford the increases.
  Finally, AHPs would mean that consumers would lose important health 
benefits, such as treatment and care for diabetes, child immunizations, 
cancer screenings, and preventive care. Consumers would lose State-
based patient protections such as direct access to specialty care, 
emergency care, and the right to an independent, external review of 
denied medical claims.
  Instead of this flawed bill, I support the substitute offered by 
Representatives Kind and Andrews. This legislation would expand the 
health care options available for small businesses by building on the 
efforts of many State governments that are providing health care plans 
specifically for small businesses. Under the substitute, Federal and 
State health insurance pools would be created for small businesses to 
band together to purchase coverage. Participating businesses would be 
able to defray the costs of their participation through a 4-year tax 
credit provided under the legislation. By grouping small companies in 
healthcare pools, this bill would give small firms some of the same 
advantages large corporations have in trying to keep costs down.
  Mr. Speaker, I urge my colleagues to oppose the Small Business Health 
Fairness Act, and instead support real relief for small businesses 
trying to meet the health care needs of their employees by voting for 
the Kind-Andrews substitute.
  Mr. LARSON of Connecticut. Mr. Speaker, I rise today in opposition to 
H.R. 525, the Small Business Health Fairness Act of 2005. Today we face 
a problem. An estimated 45 million people are without health insurance. 
The number of uninsured has risen in almost every year since 1989 and 
is expected to continue its rise in the near term. Most people in the 
U.S. who have health insurance obtain it through their employer or a 
family member's employer as a workplace benefit. Due to the rising cost 
of health coverage, small employers are far less likely than larger 
employers to provide health insurance to their workers and almost half 
of the uninsured work for, or are family members of employees who work 
for, small employers. The Small Business Health Fairness Act would not 
address this problem.
  As a former small business owner, I understand the need for employers 
to offer benefits like health insurance to attract the best employees. 
I also understand the desire to offer benefits to employees to reward 
them for their efforts in making their business a success. Small 
businesses are a vital part of our economy, and it is critical that we 
provide them with affordable heath coverage that not only covers their 
employees, but helps reduce the ranks of the uninsured in our Nation.
  Unfortunately, the association health plans created by H.R. 525 would 
actually reduce health care benefits and coverage. In fact, the 
Congressional Budget Office estimates that only 600,000 of the 45 
million uninsured would receive coverage as a result of this bill. The 
CBO also found that almost 75 percent of workers would actually see 
their premiums rise. These numbers are evidence that this legislation 
will not address the problem.
  The bill raises numerous other concerns as well. It would create an 
uneven playing field where Federal law would provide one set of 
favorable rules for employers who join association health plans and a 
different, less favorable set of rules for those who do not. 
Association health plans would be exempt from most State benefit 
requirements, including those that ensure access to emergency services, 
mental health services and cancer screening. They would be free to 
choose healthier individuals who are cheaper to insure and leave behind 
those most in need of health care coverage. Finally, association health 
plans under this bill would be allowed to license themselves in a State 
with looser consumer protection provisions than the State they offer 
coverage in, leaving consumers open to fraud and abuse. These loopholes 
will not address the problem.
  However, today we will offer a real solution to this problem. The 
substitute amendment offered by the gentleman from Wisconsin, Mr. Kind, 
and the gentleman from New Jersey, Mr. Andrews, would address the needs 
of small businesses by providing them with the same access to health 
benefits as Federal employees through a Small Employer Health Benefits 
Plan. This plan would provide coverage to all small businesses and 
their employees, ensuring that every worker gets the coverage they need 
regardless of age, sex, race or any other factor. Additionally, it 
would commit Federal funds to aid small businesses in offering health 
insurance to employees. Finally, it would work within existing State 
laws and not preempt state regulations regarding health care coverage. 
This substitute will help small businesses more, cover more of the 
uninsured, and protect the rights of States.
  Unfortunately, without the Kind/Andrews amendment, I cannot support 
the Small Business Health Fairness Act. This is the fourth time the 
House has voted on association health plans and the fourth time it has 
been the wrong answer for small businesses and the uninsured. This is 
just another example of the Majority bringing the same legislation to 
the floor year after year knowing that it will go nowhere because it is 
the wrong answer for Americans. I urge my colleagues to join me in 
supporting the Kind/Andrews amendment, which would provide real 
solutions to help our Nation's small businesses and cover the 45 
million uninsured Americans.
  Mr. MANZULLO. Mr. Speaker, as the chairman of the Small Business 
Committee, our Nation's small business men and women tell me over and 
over that finding accessible and affordable quality health care is 
their number one priority for themselves and their employees.
  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.
  ``Mom and Pop'' businesses tell me how they want to provide 
healthcare for their employees, but every single year it gets more 
difficult.
  Many are giving up. Our Nation's 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.
  In March of this year, I held a hearing on AHPs. The Coca Cola 
Bottlers Association testified they have long offered AHPs.
  However, in 1990, they had to stop offering AHPs to members with 
under 100 employees because of the disparity of law from State to 
State. Those small employers have incurred increased premiums of 
between 20-25 percent per year.
  For those bottlers employing over 100 workers and who still were able 
to maintain an AHP, they only had an average increase of 9 percent a 
year.
  The proof is irrefutable. AHPs work. I urge all of my colleagues to 
support H.R. 525. Give hope to America's entrepreneurs. Vote for H.R. 
525.
  Mr. ENGEL. Mr. Speaker, the so-called Small Business Health Fairness 
Act is anything but fair. Congress should not be in the business of 
promoting the reduction of healthcare benefits and coverage and that is 
exactly what this bill does.

[[Page 17587]]

  Proponents of H.R. 525 argue that health insurance will be cheaper 
under this bill, but the devil is in the details. Healthy people would 
enjoy low premiums under association health plans because the plans are 
exempt from State consumer protections and minimum quality 
requirements, and therefore meaningful coverage. Without consumer 
safeguards, association health plans would be largely unregulated and 
unlikely to cover such benefits as mammography screening, cervical 
cancer screening, well-child visits, mental health services and 
diabetic supplies. While this might appeal to healthy people, it will 
be devastating to those who actually need medical care. Those who are 
sicker would remain in non-association health plans and would have to 
pay higher premiums to compensate for those individuals who are 
siphoned off into the association health plans.
  It is also troublesome that this legislation exempts association 
health plans from State solvency standards. Many States have strict 
solvency laws that protect workers from insurance fraud and abuse. Any 
meaningful insurance company should have to adhere to adequate 
standards of protection.
  We should reject this anti-consumer proposal in favor of the Kind/
Andrews substitute. This measure would create a Small Employer Health 
Benefits Plan, SEHB, similar to the Federal Employee Health Benefit 
Plan and would offer coverage to all small businesses with fewer than 
100 workers. Significantly, this legislation works with existing State 
laws and does not preempt State mandates regarding health care 
coverage. This substitute very clearly commits Federal funds to aid 
small businesses in offering insurance to employees.
  True health insurance coverage offers meaningful benefits with 
appropriate solvency safeguards. Our constituents deserve no less. I 
urge my colleagues to reject H.R. 525 and pass the Kind/Andrews 
substitute today.
  Mr. MORAN of Virginia. Mr. Speaker, I rise in support of the Small 
Business Health Fairness Act, H.R. 525, which will allow small 
businesses and associations to band together to purchase health 
insurance coverage for their workers and their families.
  The Small Business Health Fairness Act can directly benefit the over 
2,300 small businesses and associations in my congressional district 
and their employees.
  H.R. 525 would allow AHPs and small businesses to be certified under 
one Federal law, instead of 50 different State regulations.
  Like large employers and labor unions that offer health insurance to 
their employees and members, AHPs would be regulated by the U.S. 
Department of Labor.
  Many opponents of the Small Business Health Fairness Act claim that 
AHPs will ``cherry pick'' and therefore only benefit healthy people. 
This is not true.
  All AHPs must comply with the Health Insurance Portability and 
Accountability Act, which prohibits group plans from excluding high-
risk individuals that have required repeated health insurance claims.
  H.R. 525 also guarantees that only bona fide professional and trade 
associations can sponsor an AHP. This measure ensures that AHPs will 
undergo a strict, new certification process before they will be allowed 
to offer health benefits to employers. This new certification process 
includes stronger solvency standards, including stop-loss and 
indemnification insurance.
  Studies have shown that AHPs would save the typical small business 
owner between 15 percent and 30 percent on health insurance.
  Currently, there are 45 million Americans who are uninsured. Even 
more troubling is the fact that 60 percent of uninsured Americans work 
for small businesses that lack the resources to provide health care 
benefits to their workers.
  In fact, 65 percent of small-business owners indicate high cost as 
the main reason why they do not offer health insurance.
  Small employers are facing 50 percent premium hikes, even as many 
insurers are leaving the small group market because it is not 
profitable enough.
  The time to offer small businesses and associations the ability to 
band together to offer health insurance to their employees is now.
  The Small Business Health Fairness Act represents a first step in 
helping to lower the number of uninsured Americans, many of whom work 
for small businesses.
  H.R. 525 would introduce more competition into the market, reduce 
unnecessary regulation and administrative costs and make health 
coverage more affordable for small employers and their employees.
  I urge support of H.R. 525.
  Mr. BLUMENAUER. Mr. Speaker, it is unfortunate that while we are in 
the midst of a healthcare crisis for the uninsured, for small 
businesses, and for practitioners, Congress is recycling the same 
flawed legislation. The proposal would allow association health plans 
to bypass the State solvency framework requirements, leaving the 
consumers at a significant risk.
  The reason that over 1,350 business, labor, and community 
organizations oppose H.R. 525--including organizations such as the 
National Governors Association, 41 Attorneys General, the National 
Association of Insurance Commissioners, Blue Cross/Blue Shield, 
National Small Business United and 69 local Chambers of Commerce--is 
because it not only misses the point, it will make things worse.
  The bill would undermine our efforts to provide essential services to 
everyone by providing incentives to insure only the healthiest and 
wealthiest, leaving the vast majority of over \1/2\ million uninsured 
Oregonians and 45 million uninsured Americans behind. Even worse, the 
adverse selection process will mean that the insurance pool will be 
narrower and sicker, resulting in more expensive insurance for most 
families. Furthermore, the Congressional Budget Office estimates that 8 
million individuals who currently have health coverage will be switched 
to a lower benefit plan. Consumers may be denied the proper screening, 
procedures and treatment they deserve.
  These are critical issues for taxpayers and businesses alike. I will 
continue to work with the healthcare and business community to produce 
the type of process, discussion and legislation Americans critically 
deserve.
  Mr. STARK. Mr. Speaker, I rise today in strong opposition to H.R. 
525, the regurgitated association health plan, AHP, bill. This is the 
fourth vote on this exact same legislation in as many years. So, if my 
statement sounds familiar, that's because it has all been said before.
  While they've titled the bill the Small Business Health Fairness Act, 
its impact would be the opposite. 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 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 
bare-bones 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 1 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 that guaranteed 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 of 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

[[Page 17588]]

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, that 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 more than 1,300 organizations, including the 
National Governors Association, the National Association of Insurance 
Commissioners, the American Academy of Actuaries, local Chambers of 
Commerce, small business associations, physician organizations, labor 
unions, and healthcare coalitions.
  The Senate has no intention of taking up this legislation. It's bad 
policy, and our colleagues on the other side of the Capitol know it. 
Taking yet another vote on AHPs is an enormous waste of time and 
taxpayer resources, and has nothing to do with providing affordable 
healthcare options to our citizens. Health care reform shouldn't raise 
premiums, increase the number of uninsured, lead to massive fraud, and 
remove key State patient protections. I urge my colleagues to reject 
this legislation once and for all.
  Mr. SHUSTER. Mr. Speaker, I rise today in support of the Small 
Business Health Fairness Act, H.R. 525. This legislation is a 
prescription to provide quality, affordable health care to the 
Americans who need it most: 45 million people from working families 
across the country.
  By lowering costs and strengthening bargaining power, Association 
Health Plans, AHPs, would allow small businesses to band together 
through associations and purchase quality health care for workers and 
their families at a lower cost. Small businesses currently have little 
buying power and few affordable options--five or fewer insurers control 
at least three-quarters of the small group market in most States, 
according to a GAO report in 2002. By banding together through bona-
fide trade associations, AHPs would level the playing field and give 
participating small employers the exact same advantages Fortune 500 
companies and unions currently enjoy.
  It is important to note that this legislation does not make AHPs a 
mandatory program for employers. AHPs are about choice and healthy, 
competitive options for those seeking quality coverage. Each business 
would have the option of remaining with their current insurance 
provider, if they have one, or joining up with a legitimate, certified, 
and regulated association that is able to pool risk and offer small 
businesses a seat at the table when it comes to really being serious 
about providing health care for American workers.
  Contrary to opponent's claims, H.R. 525 provides safeguards against 
fraud and abuse with a strict, new certification process that must be 
adhered to before any association can offer health benefits to 
employers. Included are strong solvency protections that go beyond what 
is required of single employer and labor union plans under current law. 
The bill requires self-insured AHPs to maintain reserves that are 
sufficient for unearned contribution, benefit liabilities, expected 
administrative costs, and any other obligations. With the reserve 
levels required to be recommended by a certified actuary who is a 
member of the American Academy of Actuaries, AHPs are designed to 
protect the employer from fraudulent abuse and those who would seek to 
take advantage of the system.
  Under this bill, regulated by the Department of Labor and current 
ERISA and HIPPA laws, AHPs would be prohibited from excluding high-risk 
individuals from their plans and AHPs would also be barred from 
charging higher rates for sicker individuals or groups within the plan.
  The lack of current competition in the health care market contributes 
to double-digit rate increases for many small businesses and a 
resulting rise in the number of small business employees who are 
uninsured. Too many small business owners and employers are forced to 
choose between offering health care benefits to their employees and 
hiring, expanding, or even maintaining their business. With the 
adoption of AHPs, the door of opportunity is opened to millions who do 
not currently have access to the kind of quality, affordable health 
care America's working families deserve.
  Mr. Speaker, I would strongly encourage my colleagues in joining me 
and voting in favor of H.R. 525.
  Mr. AKIN. Mr. Speaker, I rise today in support of H.R. 525, the Small 
Business Health Fairness Act of 2005.
  In 2003, there were an estimated 45 million Americans without health 
insurance. Small businesses employ over 60 percent of those currently 
uninsured.
  Without question, cost is often the biggest barrier to affordable 
health insurance for small businesses. Too often, I hear from small 
businesses owners back in my district in Missouri that the 
affordability of health insurance is their number one concern. This 
problem has been deepened in recent years as the overall cost of health 
care has risen. While large employer-sponsored health plans have seen 
an average 12-percent increase in health insurance premiums, small 
businesses have been faced with annual premium increases of up to 50 
percent, forcing many firms to drop coverage altogether.
  By allowing small firms to join an association health plan as H.R. 
525 would do, small employers would enjoy greater bargaining power 
because they would become part of a larger bargaining force, enabling 
them to offer their employees the same advantages and benefits that are 
currently available to larger companies.
  I doubt that many of my colleagues here would deny the fact that 
small businesses are leaders in innovation. They pay the majority of 
our Nation's taxes and employ the majority of our Nation's workforce. 
Yet we have burdened them with excessive regulations to the point that 
they cannot afford to provide health insurance to their employees. We 
must not deny quality, affordable health care to these hard-working 
Americans who want to safeguard their own health and provide their 
families access to such protections.
  I urge my colleagues to support the Small Business Health Fairness 
Act.
  Mr. WELDON of Florida. Mr. Speaker, an issue I often hear about from 
my constituents is concern about the high cost of health insurance and 
the need for affordable insurance coverage. We all know health 
insurance premiums continue to increase substantially 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.
  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. 525, the Small Business Health Fairness 
Act.
  By passing H.R. 525 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 
Association Health Plans, AHPs. Under AHPs, small business can pool 
their resources and purchase group health care similar to the way large 
corporations do today. 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. They can 
join together with other groups and purchase health insurance at much 
more affordable rates and have better negotiating power with insurance 
providers.
  It is generally reported that there are over 40 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 
employers and working families will be able to afford coverage, and 
more Americans will be without health insurance. Those who work for 
small businesses should have the same type of access to health 
insurance that their counterparts in large corporations already enjoy.
  I urge Congress to pass H.R. 525. Congress must pass this bipartisan 
legislation to give much needed relief to American small businesses, 
farmers, and hard working families.
  Mr. SHAYS. Mr. Speaker, I rise in support of H.R. 525, the Small 
Business Health Fairness Act. This legislation would allow small 
businesses to pool their resources into what

[[Page 17589]]

are known as Association Health Plans, AHPs, to purchase health 
insurance.
  Pooled alliances, including AHPs, help control health care costs by 
permitting individuals to use their collective bargaining power to win 
cost concessions from insurance companies.
  These alliances also achieve economies of scale for administrative 
functions--substantially cutting overhead costs, which currently amount 
to between 30 and 40 cents of every premium dollar paid by small 
businesses to insurers.
  Purchasing alliances have been a popular response in many States to 
the problems many self-employed and small business owners have had 
securing affordable health insurance for themselves or their employees.
  While I sensitive to the concerns many disease advocacy groups have 
about this legislation, the fact is this legislation provides the same 
exemption from State benefit mandates for small businesses already 
enjoyed by large employers.
  The cost savings from avoiding benefit mandates has been estimated to 
be between 4 and 13 percent. This could make a huge difference for 
small businesses looking to offer their employees health insurance. 
Because small businesses are extremely cost-sensitive, studies indicate 
that even a 5 percent reduction in costs will result in a 10 to 15-
percent increase in small businesses offering health insurance.
  The legislation also protects against these plans ``cherry-picking'' 
the healthiest employees by restricting the ability of self-insured 
health plans to be qualified as an AHP. Unless a self-insured plan is 
in existence before the date of enactment, it would be required to 
offer membership to a broad cross-section of trades or to employers 
representing at least one higher-risk occupation.
  Additionally, AHPs must comply with the Health Insurance Portability 
and Accountability Act, which prohibits group health plans from 
excluding high-risk individuals with high claims experience.
  The bottom line is this legislation will help small businesses, which 
are the engine in our economy, provide health insurance to their 
employees. I urge the passage of this bill.
  Mr. HONDA. Mr. Speaker, I rise today in strong opposition to the 
Small Business Health Fairness Act, H.R. 525. This bill would not only 
fail to expand health coverage for the uninsured, but would actually 
reduce health care benefits and coverage for 8 million individuals who 
would be switched to lower benefit AHP health plans. Only 1 percent--
600,000 people--of the 45 million uninsured Americans would be provided 
new coverage by AHPs.
  Instead of providing broader access to comprehensive health insurance 
for the millions of uninsured Americans, H.R. 525 will undermine access 
to quality, affordable health insurance and may actually increase the 
ranks of the uninsured. Under current law, the majority of health 
insurance plans are regulated at the State level. States have enacted a 
number of protections to ensure the fairness of health insurance 
coverage for patients. Most States now require insurers to allow direct 
access to emergency services, independent external appeal of health 
care claims denials, and access to an adequate range of health 
professionals. AHPs would be exempt from these requirements, leaving 
those with AHP coverage with inadequate protection.
  Insurers naturally have incentives to select the healthiest 
individuals or groups that are seeking coverage. State regulations 
counter this incentive by mandating that certain benefits be covered, 
and by limiting and defining how policies are to be priced. By 
exempting AHPs from these State regulations, AHPs would offer less-
generous policies that would be attractive to healthier individuals and 
groups. By permitting AHPs to offer coverage to specific types of 
employers, the bill allows them to hand pick populations that are 
better risks and therefore less costly to insure. Under H.R. 525, AHPs 
would offer different premiums to each member employer, charging lower 
rates for lower risk persons and charging much higher rates for higher 
risk persons.
  The only restriction on premiums is that differences could not be 
based on health status. This provision is essentially meaningless 
because it permits AHPs to accomplish the same goal by varying premiums 
based on age, sex, race, national origin, or any other factor in the 
employers' workforce, including claims experience. As a Nation, we have 
recognized and are committed to eliminating health disparities based on 
race, ethnicity, and national origin. Why then would we create laws 
that perpetuate and encourage further health disparities?
  Small businesses comprise nearly one-third of the private sector 
workforce, and are much less likely than large firms to provide health 
coverage for their employees. Although this is a serious concern, AHPs 
are not the answer. The Kind/Andrews substitute offers provisions that 
would address the real health insurance needs of small employers. It 
would provide small employers the same access to health benefits as 
Federal employees by establishing a Small Employer Health Benefits 
Plan, SEHB, similar to the Federal Employees Health Benefits Plan. It 
offers coverage to all small employers and their employees to apply for 
coverage under SEHB. Those working less than full-time would be 
eligible for pro rata coverage. It would also minimize adverse 
selection, use State-licenses insurers without preempting State laws, 
provide a minimum benefit package similar to Federal employees, and 
provide premium assistance to make employee and employer premiums 
affordable.
  I urge my colleagues to support the Kind/Andrews substitute and 
oppose the Republican leadership's flawed approach to AHPs.
  Ms. SCHAKOWSKY. Mr. Speaker, I rise today in support of the Kind/
Andrews substitute and in strong opposition to H.R. 525, the Small 
Business Health Fairness Act of 2005. We have the opportunity to give 
small business owners and employees meaningful access to affordable and 
comprehensive coverage by adopting the Kind/Andrews substitute. Or, by 
passing H.R. 525, we can give access to cheap, flimsy insurance 
policies that will not provide meaningful protection and leave those 
who need better coverage far worse off.
  All of us are concerned about the high cost of health insurance, 
particularly for small businesses. We all agree that we need to allow 
small businesses to band together to achieve economies of scale in 
purchasing coverage. The Kind/Andrews substitute would give small 
businesses the ability to pool together through a Small Employer Health 
Benefits Plan. It would provide premium assistance to make coverage 
affordable for small business employers and employees. The Kind/Andrews 
substitute will guarantee that insurance policies are not worthless 
paper but provide meaningful access to benefits.
  What the Kind/Andrews substitute will not do is preempt State 
consumer protection laws--laws that have been enacted by State 
legislatures on a bipartisan basis in response to real-life problems in 
the insurance market. The Kind/Andrews approach would benefit employers 
and consumers. The so-called Small Business Health Fairness Act of 2005 
would not. In fact, this ill-conceived bill would make the current 
situation worse--adding to the ranks of the uninsured, reducing 
benefits, and leaving small business workers with insurance policies 
that do not provide the care that they and their families need.
  There are three fundamental problems with this bill--all of which 
stem from the decision to preempt State laws and leave no other 
protections in their place. First, the bill will not significantly 
reduce the number of uninsured and may actually make this crisis worse. 
It would preempt State insurance regulation--allowing association 
health plans to cherry pick healthy small businesses. Small businesses 
with older workers, persons with disabilities or chronic conditions, 
and women of child-bearing age would face higher premiums. The 
nonpartisan Congressional Budget Office estimates that only 620,000 
uninsured workers would buy these new, barebones policies but that 75 
percent of currently insured small business employees--20 million--
would see their premiums increase. National Small Business United--a 
group whose reason for being is to promote the interests of small 
businesses--opposes the bill because it would increase health 
``insurance premiums for small employers by up to 23 percent and cause 
some to drop coverage altogether. A Mercer Consultants study in 2003 
found that it would actually increase the number of uninsured by 1 
million. The CBO says that up to 100,000 of the most medically needy 
workers--those with chronic, ongoing conditions or disabilities--would 
be among those losing coverage.
  Second, the bill would take away protections from consumers 
victimized by fraud and abuse. All 50 States and the District of 
Columbia have passed tough laws to stop abuses in the small group 
health insurance market. Again, these laws would be preempted. The U.S. 
Department of Labor is not going to have the will or the resources to 
respond when consumers are injured by benefit denials, AHPs go belly-
up, or fraud is committed. AHP policy holders and health consumers 
would be left in a regulatory blackhole--with no place to turn if they 
are defrauded, cheated, or denied benefits. That's why the National 
Association of Insurance Commissioners and 41 attorneys general oppose 
this bill.
  Third, the bill would preempt basic benefit requirements and patient 
protections, allowing AHPs to drop coverage for preventive services, 
screening, mental health and other critical services. CBO estimates 
that 8 million workers with health coverage today would lose benefits 
under H.R. 525.

[[Page 17590]]

  In Illinois, we have enacted benefits that include mammograms, pap 
tests, minimum mastectomy stays, colorectal screening, diabetes 
education and supplies, pre- and postnatal care, mental health parity 
that goes beyond inadequate federal requirements, and access to cancer 
drugs. We have a prudent layperson rule to ensure access to emergency 
services, direct access to OB-GYNs, and a ban on HMOs ``gagging'' 
doctors in their communications with patients. We have prompt payment 
rules for providers and fair marketing requirements. We require that 
insurance companies cover newborns. Those protections would be 
preempted under H.R. 525.
  Many of us who previously served in State legislatures fought for 
those benefits because private insurance policies refused to cover 
items like mammograms, maternity care, diabetes education, prosthetics, 
or chemotherapy. We had constituents whose insurance companies refused 
to cover their babies, arguing that conditions developed in the 
mother's womb were ``preexisting.'' Dropping those critical benefits 
will not make health care more affordable; it will simply shift costs 
to employees and their families. And, despite having so-called 
insurance, if workers cannot afford to pay those costs on their own, 
they might as well be uninsured. That is why groups from Consumers 
Union to the American Diabetes Association, from the National Mental 
Health Association to the NAACP oppose this bill.
  I also want to point out that women have a tremendous stake in this 
debate. Nearly all women-owned firms are small firms, most with fewer 
than five employees. Women are half of all workers at very small firms. 
And women are the beneficiaries of many of the State benefits enacted 
because private insurers refused to cover critical services--
mammography, pap smears, reconstructive surgery following mastectomies, 
contraceptive services, breast and cervical cancer screening, direct 
access to OB-GYNs and nurse-midwives, and osteoporosis screening. A 
bill that raises premiums to women-owned small businesses and cuts 
women's health services is no solution.
  Finally, I want to respond to the arguments of the proponents of H.R. 
525 that something is better than nothing. As I have mentioned, for at 
least 8 million people, the something that would be provided under this 
bill would be a policy with lower benefits than they have today, for at 
least 20 million it would be a policy with higher premiums than they 
pay today. That is hardly a good deal. But there is a more important 
issue at stake here. H.R. 525 says that we owe small business owners 
and employees nothing better than barebones coverage, an insurance 
policy that may be affordable but that doesn't provide access to needed 
medical services and is stripped of consumer protections. I believe 
that we can do better and that is why I support the Kind/Andrews 
substitute.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise today in support of 
H.R. 525. This bill, introduced by the Employer-Employee Relations 
Subcommittee Chairman Sam Johnson, Committee Chairman John Boehner, 
Small Business Committee Ranking Member Nydia Velazquez and Albert 
Wynn, would allow small businesses to join together through association 
health plans, AHPs, to purchase health insurance for their workers at a 
lower cost. The measure would increase small businesses' bargaining 
power with health care providers, give them freedom from costly State-
mandated benefit packages, and lower their overhead costs by as much as 
30 percent. This is a benefit that many large corporations like GM and 
Ford already enjoy because of their larger economies of scale.
  Furthermore, this bill expressly prohibits discrimination by 
requiring that all employers who are association members are eligible 
for participation, all geographically available coverage options are 
made available upon request to eligible employers, and eligible 
individuals cannot be excluded from enrolling because of health status. 
Premium contribution rates for any particular small employer cannot be 
based on the health status or claims experience of plan participants or 
beneficiaries or on the type of business or industry in which the 
employer is engaged.
  The measure makes clear that AHPs must comply with the Health 
Insurance Portability and Accountability Act, HIPAA, which prohibits 
group health plans from excluding high-risk individuals with high 
claims experience. Thus, it will not be possible for AHPs to ``cherry 
pick'' because sick or high risk-groups or individuals cannot be denied 
coverage. The bill prohibits AHPs from charging higher rates for sicker 
individuals or groups within the plan, except to the extent already 
allowed under the relevant State rating law.
  While I support all of these positive aspects of the bill, I do have 
concerns with other areas. Due to this fact, I also stand today to 
support the Kind/Andrews substitute. This substitute would strengthen 
the larger goal of the legislation which is to lower health care cost 
for workers. The substitute does this by providing small employers the 
same access to health benefits as Federal employees. Under the 
substitute, the Department of Labor will establish a Small Employer 
Health Benefits Plan, SEHB, similar to the Federal Employees Health 
Benefits Plan, FEHB. The States also may establish State small employer 
health pools.
  In addition, the substitute offers coverage to all small employers 
and their employees. In essence, all employers with fewer than 100 
employees during the previous calendar year shall be eligible to apply 
for coverage under SEHB. Employers must offer coverage to all employees 
who have completed 3 months of service. Employees working less than 
full-time are eligible for pro rata coverage.
  Furthermore, the substitute also minimizes adverse selection. This is 
done by requiring the Secretary to establish an initial open enrollment 
period and thereafter an annual enrollment period.
  One of the most important things achieved by the substitute is the 
fact that is uses State-licensed insurers without preempting State 
laws. It also provides a minimum benefit package similar to Federal 
employees, i.e., all participating insurers must offer benefits similar 
to the benefits offered under the four largest FEHB health plans.
  As I close, I would hope that the differences I have mentioned are 
reconciled as this bill moves to conference.
  Mr. GENE GREEN of Texas. Mr. Speaker, I rise in opposition to H.R. 
525, the Small Business Health Fairness Act.
  The sponsors of this legislation have a laudable intent: To make 
health insurance more affordable for small businesses by allowing them 
to band together to increase their purchasing power and negotiate lower 
health insurance rates.
  With costs in the private health insurance growing 12.8 percent each 
year, no one would disagree that our small businesses are struggling to 
provide coverage for their employees.
  But this legislation is not the answer to the rising cost of health 
insurance in this country.
  Mr. Speaker, the regulation of health insurance has long rested with 
the States.
  For decades, State legislatures in each of our States have enacted 
State coverage mandates and consumer protections to ensure that 
residents of those States purchase a quality health insurance policy.
  While some policies cost more than others, thanks to State 
regulations, consumers can be assured that all policies offer a minimum 
level of coverage.
  In my home State of Texas, health plans must provide access to 
emergency services, immunizations for children, direct access to OB/
GYNs, and coverage of diabetes supplies and education--just to name a 
few guaranteed benefits.
  The State has also enacted important consumer protection laws that 
afford consumers external review and limit how much insurers can charge 
sicker groups of people.
  Under H.R. 525, however, the State would have no authority to ensure 
that Federal association health plans provide these benefits and 
consumer protections.
  By taking away these vital patient protections, the policies 
purchased under AHPs would be worth little more than the paper they are 
printed on.
  The amendment offered by our colleagues Mr. Kind and Mr. Andrews 
would correct many of the flaws in this legislation.
  Specifically, the alternative would allow small businesses to 
purchase insurance through a Small Employees Health Benefit Plan--
similar to the Federal employees health plan.
  The Kind/Andrews amendment would ensure that the quality of health 
plans is protected; that low income employees have assistance in 
purchasing policies; and that the smallest of small businesses get the 
additional assistance they need.
  As a former small business employee charged with choosing my 
company's health plan, I am all too aware of the need for the 
assistance outlined in the Kind/Andrews amendment.
  The employees choosing these health plans for small businesses most 
often are not human resources or insurance professionals.
  The coverage and benefit mandates enacted by State legislatures 
ensure that small businesses won't fall victim to sham policies and 
that their employees can depend on quality health insurance when an 
illness strikes.
  Because H.R. 525 eviscerates these assurances by preempting the laws 
enacted by State legislatures, I urge my colleagues to oppose the 
underlying bill and support the Kind/Andrews alternative.

[[Page 17591]]


  Mr. BACA. Mr. Speaker, I rise in opposition of H.R. 525 and the 
association health plans it creates.
  There are 44 million Americans who are uninsured in this country and 
this bill will not even affect 1 percent of them. Not 1 percent.
  CBO found that only 360,000 uninsured Americans would join AHPs.
  This bill in fact hurts those who enroll in the plans and will even 
cause healthcare costs to go up for many other Americans.
  There has to be a better way to help 44 million uninsured Americans.
  AHPs will not be accountable to State health regulations. This will 
leave consumers who enroll in these plans without protection or a right 
to appeal if their cancer or diabetes treatment or medicines are 
denied.
  We cannot let AHPs become bargain basement plans that enroll only the 
healthiest Americans. What will happen to our sick, elderly and those 
with severe health conditions?
  Twenty million Americans will face higher healthcare costs. Twenty 
million.
  Health insurers will give breaks to the AHPs and charge other 
consumers more. Studies show that these higher healthcare costs could 
cause up to 10,000 Americans to become insured.
  There is a better way to help small businesses and the uninsured.
  H.R. 525 will not help small businesses or their employees. This is a 
shortsighted plan that does nothing to cover the 44 million uninsured 
Americans who cannot afford to get sick.
  Mr. KUCINICH. Mr. Speaker, I thank Mr. Miller for his leadership on 
this bill. Mr. Speaker I rise in strong opposition to H.R. 525. 
Association Health Plans cherry-pick. They lower standards of care. 
They fail to reduce the growing ranks of the uninsured. But I would 
like to focus on a critical shortfall we don't often hear much about: 
Efficiency.
  AHPs fail to address the white elephant in the living room. One of 
the biggest reasons that America's health care costs are so high is 
that we pay far more for administrative costs in privately administered 
health plans than other industrialized nations. The average private 
health plan puts 12-15 percent--sometimes as high as 30 percent--of 
your health care dollar to administrative costs. AHPs would not only 
fail to address this problem, but could make it worse.
  In fact, a study by human resources consultants, William Mercer, Inc. 
found that ``. . . the potential administrative cost increases 
typically would exceed the potential administrative cost savings. We 
estimate that the additional costs for small firms who buy AHP coverage 
typically would range from 1.5 percent to 5 percent of premiums.'' That 
is above and beyond the average administrative costs of 12-15 percent.
  Now contrast that with the overhead costs of Medicare, whose 40th 
birthday we celebrate this week. On average, Medicare's administrative 
costs are 2-3 percent. That means that Medicare is about 5 times more 
efficient than private health plans and could be 7 to 10 times more 
efficient than AHPs.
  Health care costs are dragging small businesses down in their efforts 
to compete with their counterparts in other nations where health care 
is universal. It is time to stop dancing around the margins of reform 
by proposing more of the same inefficiencies. We already know what 
works. Lets expand Medicare to all.
  Mr. LANGEVIN. Mr. Speaker, I rise in opposition to H.R. 525, the 
Small Business Health Fairness Act. I am deeply concerned that this 
legislation will jeopardize valuable patient protections for all 
Americans. While pooling insurance risks may allow employers to 
strengthen their bargaining power with insurance carriers and share 
administrative functions, the methods outlined in this bill would 
threaten the quality of health plans available to small business 
employees, and the stability of the market for small businesses without 
access to trade associations.
  This legislation establishes association health plans by removing 
them from state oversight--including the application of state patient 
protections and solvency standards. For example, my home state of Rhode 
Island is one of 15 states to mandate health insurance coverage of a 
colorectal cancer screening test. My constituents value this 
protection. But under this legislation, my constituents could find 
themselves enrolled in association health plans that are not required 
to follow that and other state laws designed to increase access to 
preventative care and screenings.
  In addition, this bill permits association health plans to offer 
coverage to specific types of employers, allowing plans to seek 
memberships with better risks and less costly populations. This 
``cherry picking''--skimming off the healthiest consumers and leaving 
the sickest patients uninsured--will force premiums even higher for the 
majority of the market. A recent Congressional Budget Office study 
estimated that costs would decline for the 20 percent of businesses 
that join AHPs, but would therefore go up for the remaining 80 percent.
  Alternatively, the Democratic substitute would provide small business 
and their employees access to small employer health pools, without the 
negative features of H.R. 525, by including a number of protections for 
businesses and their employees. The substitute amendment provides that 
participating health insurance companies will remain subject to the 
requirements of state health insurance laws and stipulates that all 
participating insurers offer benefits equivalent to or greater than the 
options offered to Federal employees. There are ways to accomplish the 
goal of increased access to health insurance that do not threaten that 
patient protections and state laws that Americans have come to rely on.
  Small business employers and their workers do need better access to 
affordable health care coverage, but this misguided bill is not the way 
to accomplish that important goal. As we look for innovative ways to 
provide health care to all, we must not sell small business owners and 
employees short. We must address the health care crisis, and we must do 
it in a way that does not exacerbate the existing problems. I urge my 
colleagues to vote against H.R. 525.
  Mr. RYUN of Kansas. Mr. Speaker, I rise today in support of H.R. 525, 
which would authorize small businesses around the country to establish 
Association Health Plans. An estimated 45 million people are uninsured 
in the United States, and the number has grown since 1989. Eighty-five 
percent of these people are in working families where the price of 
premiums have increased so much that they cannot afford the coverage 
that will give them peace of mind.
  The majority of Americans receive health insurance coverage through 
their employers, but with rising health care costs, many small 
businesses can no longer afford to provide coverage for their 
employees. H.R. 525 would remedy this by allowing small businesses to 
band together to garner greater buying power when bargaining with 
health care providers. Let's give Americans access to more affordable 
health care and support Association Health Plans.
  Mr. BOEHNER. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Rehberg). All time for debate on the 
bill has expired.


      Amendment in the Nature of a Substitute Offered by Mr. Kind

  Mr. KIND. Mr. Speaker, I offer an amendment in the nature of a 
substitute.
  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 
     Business Affordable Health Insurance Act of 2005''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Establishment of Small Employer Health Benefits Program 
              (SEHBP).

        ``Part 8--Small Employer Health Benefits Program (SEHBP)

``Sec. 801. Establishment of program.
``Sec. 802. Premium assistance for small employers and their employees.
``Sec. 803. Qualified State health pooling arrangements.
``Sec. 804. Establishment of national health pooling arrangement.
``Sec. 805. Coordination and consultation.
``Sec. 806. Public education.
``Sec. 807. Funding for premium assistance and pooling arrangements.
Sec. 3. Institute of Medicine study and report.

     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 (to be known as the 
     `Small Employer Health Benefits Program' or `SEHBP') 
     providing--
       ``(1) access to qualified health pooling arrangements 
     (consisting of both qualified

[[Page 17592]]

     State health pooling arrangements and a national health 
     pooling arrangement) under which self-only and family 
     coverage is offered to small employers and their employees, 
     and
       ``(2) premium assistance to small employers and their 
     employees to assist with the payment of premiums incurred for 
     coverage offered under such arrangements.
       ``(b) Limitations.--
       ``(1) Employer must bear 50 percent of cost.--Premium 
     assistance shall not be provided under this part with respect 
     to premiums incurred for any period for coverage under a 
     qualified health pooling arrangement unless at least 50 
     percent of the premiums are paid by the employer.
       ``(2) 10-year period of coverage.--Premium assistance shall 
     be provided under this part only with respect to coverage for 
     the 10-year period beginning on the date the employer first 
     begins participating in a qualified health pooling 
     arrangement.
       ``(3) Employers offering other health benefits.--In the 
     case of an employer who paid or incurred any expenses for 
     health benefits for the employees of such employer during the 
     first calendar year ending on or after the date of the 
     enactment of this section, premium assistance shall be 
     provided under this part only if the employer begins 
     participating in a qualified health pooling arrangement 
     during the 2-year period beginning on the later of--
       ``(A) the date of the enactment of this section, or
       ``(B) the first date that a qualified health pooling 
     arrangement exists which allows such employer to participate.
       ``(4) Participation requirements.--Premium assistance shall 
     not be provided under this part with respect to premiums 
     incurred for any period unless at all times during such 
     period coverage for health benefits under a qualified health 
     pooling arrangement is available to all employees of the 
     employer under similar terms, except that, under regulations 
     of the Secretary--
       ``(A) coverage under the arrangement may exclude employees 
     with less than 90 days of service with the employer, and
       ``(B) in the case of an employee serving in a position in 
     which service is customarily less than 1,000 hours per year, 
     the reference in paragraph (1) 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 1,000.
       ``(5) Amounts paid under salary reduction arrangements.--No 
     amount paid or incurred pursuant to a salary reduction 
     arrangement shall be taken into account under subsection (a).
       ``(c) Definitions and Special Rules.--For purposes of this 
     part--
       ``(1) Small employer.--
       ``(A) In general.--The term `small employer' means an 
     employer who normally employed not more than 100 employees on 
     a typical business day during the preceding calendar year 
     (determined under rules similar to the rules applicable under 
     section 601(b)).
       ``(B) Employers not in existence in preceding year.--In the 
     case of an employer which was not in existence throughout the 
     preceding calendar year, the determination of whether such 
     employer is a small employer shall be based on the number of 
     employees that it is reasonably expected such employer will 
     normally employ on business days in the current calendar 
     year.
       ``(C) Predecessors.--The Secretary may prescribe 
     regulations which provide for references in this paragraph to 
     an employer to be treated as including references to 
     predecessors of such employer.
       ``(D) Permanent status as small employer.--In the case of 
     an employer who meets the requirements of this paragraph with 
     respect to the calendar year in which such employer first 
     begins participating in a qualified health pooling 
     arrangement, such employer shall not fail to be treated as a 
     small employer for any subsequent calendar year.
       ``(2) Family coverage.--The term `family coverage' means 
     coverage for health benefits of the employee and qualified 
     family members of the employee (as defined in section 35(d) 
     of the Internal Revenue Code of 1986, but without regard to 
     the last sentence of paragraph (1) thereof).
       ``(3) Qualified health pooling arrangement.--The term 
     `qualified health pooling arrangement' means a qualified 
     State health pooling arrangement described in section 802 or 
     the national health pooling arrangement described in section 
     803.
       ``(4) Entities under common control.--
       ``(A) Controlled group of corporations.--All employees of 
     all corporations which are members of the same controlled 
     group of corporations shall be treated as employed by a 
     single employer. In any such case, the total premium 
     assistance (if any) provided to each member of the controlled 
     group and the total premium assistance (if any) provided to 
     its employees shall be its proportionate share of the wages 
     paid to all employees of members of the controlled group. For 
     purposes of this subparagraph, the term `controlled group of 
     corporations' has the meaning given to such term by 
     subsection (a) of section 1563 of the Internal Revenue Code 
     of 1986, except that--
       ``(i) `more than 50 percent' shall be substituted for `at 
     least 80 percent' each place it appears in subsection (a)(1) 
     of such section 1563, and
       ``(ii) the determination shall be made without regard to 
     subsections (a)(4) and (e)(3)(C) of such section 1563.
       ``(B) Employees of partnerships, proprietorships, etc., 
     which are under common control.--Under regulations prescribed 
     by the Secretary--
       ``(i) all employees of trades or business (whether or not 
     incorporated) which are under common control shall be treated 
     as employed by a single employer, and
       ``(ii) the total premium assistance (if any) provided to 
     each trade or business and the total premium assistance (if 
     any) provided to its employees shall be its proportionate 
     share of the wages paid to all employees of such trades or 
     business under common control.

     The regulations prescribed under this subparagraph shall be 
     based on principles similar to the principles which apply in 
     the case of subparagraph (A).

     ``SEC. 802. PREMIUM ASSISTANCE FOR SMALL EMPLOYERS AND THEIR 
                   EMPLOYEES.

       ``(a) Employer Premium Assistance.--
       ``(1) In general.--Pursuant to section 801(a)(2), the 
     Secretary shall provide to small employers who are eligible 
     under paragraph (3) and who elect to provide for coverage of 
     their employees under a qualified health pooling arrangement 
     premium assistance for premiums paid by the employer for such 
     coverage with respect to 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.
       ``(2) Premium assistance scaled according to size of 
     employer.--The premium assistance provided under paragraph 
     (1) shall be designed so that the premium assistance equals, 
     for any calendar year--
       ``(A) 50 percent of the portion of the premium payable by 
     the employer for the coverage, in the case of small employers 
     who employ an average of fewer than 11 employees on business 
     days during the preceding calendar year;
       ``(B) 35 percent of the portion of the premium payable by 
     the employer for the coverage, in the case of 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
       ``(C) 25 percent of the portion of the premium payable by 
     the employer for the coverage, in the case of small employers 
     who employ an average of more than 25 employees but fewer 
     than 51 employees on business days during the preceding 
     calendar year.
       ``(3)  eligible employers.--A small employer is eligible 
     under this paragraph if such employer--
       ``(A) normally employed fewer than 25 employees on a 
     typical business day during the preceding calendar year 
     (determined under rules similar to the rules applicable under 
     section 601(b)), and
       ``(B) paid such employees during such year at an average 
     annual rate of income (consisting of wages and salary) per 
     employee which was at or below the median income (as 
     determined by the Secretary for the most recent calendar year 
     for which data are available as of the end of the preceding 
     calendar year) for an individual residing in the State in 
     which the employer maintains its principal place of business.
       ``(b) Employee Premium Assistance.--
       ``(1) In general.--Pursuant to section 801(a)(2), the 
     Secretary shall provide to employees of small employers 
     premium assistance for premiums for coverage under qualified 
     health pooling arrangements paid by such employees in the 
     case of 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 premium assistance.--Such premium 
     assistance 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 premium assistance.--Notwithstanding 
     paragraph (1), under regulations of the Secretary, the total 
     premium assistance to which any employee may be provided 
     under this subsection for any period shall be reduced (to not 
     less than zero) by the total amount of subsidies for which 
     such employee is eligible 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

[[Page 17593]]

     premium assistance 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. 803. QUALIFIED STATE HEALTH POOLING ARRANGEMENTS.

       ``(a) Defined.--For purposes of this part, the term 
     `qualified State health pooling arrangement' means an 
     arrangement established by a State which meets the following 
     requirements:
       ``(1) Coverage provided by health insurance issuer.--The 
     health benefits coverage is provided by a health insurance 
     issuer (as defined in section 733(b)(2)).
       ``(2) Health benefits coverage.--The arrangement provides 
     health benefits coverage that the Secretary determines is 
     substantially similar to the health benefits coverage in any 
     of the four largest health benefits plans (determined by 
     enrollment) offered under chapter 89 of title 5, United 
     States Code.
       ``(3) Group health plan requirements.--The health benefits 
     coverage provided under the arrangement meets the 
     requirements applicable to a group health plan under this 
     title and State law.
       ``(4) Guaranteed issue and renewable.--The arrangement does 
     not deny coverage (including renewal of coverage) with 
     respect to employees of any eligible small employer or 
     qualifying family members of such employees on the basis of 
     health status of such employees or family members or any 
     other condition or requirement that the Secretary determines 
     constitutes health underwriting.
       ``(5) No preexisting condition exclusion.--The arrangement 
     does not permit a preexisting condition exclusion as defined 
     under section 701(b)(1).
       ``(6) No underwriting; community-rated premiums.--(A) 
     Subject to subparagraph (B), the arrangement does not permit 
     underwriting, through a preexisting condition limitation, 
     differential benefits, or different premium levels, or 
     otherwise, with respect to such coverage for employees or 
     their qualifying family members.
       ``(B) The premiums charged for such coverage are community-
     rated for individuals without regard to health status.
       ``(7) No riders.--The arrangement does not permit riders to 
     the health benefits coverage.
       ``(8) Accessibility to eligible small employers.--The 
     arrangement makes such coverage available to an eligible 
     small employer without regard to whether premium assistance 
     is available under section 802 with respect to such employer 
     or its employees.
       ``(9) Minimum of two plans offered under the arrangement.--
     The arrangement makes available at least two alternative 
     forms of health benefits coverage.
       ``(b) Limitation on Enrollment Periods.--A qualified State 
     health pooling arrangement may provide limits on the periods 
     of times during which employees may elect coverage offered 
     under the arrangement, but the arrangement shall not be 
     treated as meeting the requirements of this section unless 
     the arrangement provides for at least annual open enrollment 
     periods and enrollment at the time of initial eligibility to 
     enroll and upon appropriate changes in family circumstances.
       ``(c) Qualifying Family Member.--For purposes of this part, 
     the term `qualifying family member' has the meaning given 
     such term in section 35(d) of the Internal Revenue Code of 
     1986, applied without regard to the last sentence of 
     paragraph (1) thereof.
       ``(d) State Defined.--For purposes of this part, the term 
     `State' includes the District of Columbia, Puerto Rico, the 
     Virgin Islands of the United States, Guam, American Samoa, 
     and the Northern Mariana Islands.
       ``(e) Construction.--Nothing in this section shall be 
     construed as requiring a State to establish or maintain a 
     qualified State health pooling arrangement.
       ``(f) Creditable Coverage for Purposes of HIPAA.--Health 
     benefits coverage provided under a qualified State health 
     pooling arrangement under this section (and coverage provided 
     under a National Pooling Arrangement under section 803) shall 
     be treated as creditable coverage for purposes of part 7.
       ``(g) Annual Reports.--
       ``(1) In general.--Each State that offers a qualified State 
     health pooling arrangement under this section in a year shall 
     submit, in a form and manner specified by the Secretary, a 
     report on the operation of the arrangement in that year.
       ``(2) Contents of report.--Reports required under paragraph 
     (1) shall include the following:
       ``(A) A description of the health benefits coverage offered 
     under the arrangement.
       ``(B) The number of employers that participated in the 
     arrangement.
       ``(C) The number of employees and qualifying family members 
     of employees who received health benefits coverage under the 
     arrangement.
       ``(D) The premiums charged for the health benefits coverage 
     under the arrangement.
       ``(3) Certification.--Each State that offers a qualified 
     State health pooling arrangement under this section in a year 
     shall submit, in a form and manner specified by the 
     Secretary, a certification that the arrangement meets the 
     requirements of this part.
       ``(h) Negotiations to Lower Health Care Costs.--The 
     Secretary and States offering qualified State health pooling 
     arrangements may collectively negotiate for lower prices for 
     medical services, supplies, equipment, and pharmaceuticals 
     for the purpose of lowering the health care costs to 
     employers and employees served by such arrangements.
       ``(i) Coordination With State Regulation.--Nothing in this 
     section shall be construed as preempting provisions of State 
     law that provide protections in excess of the protections 
     required under this section. 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 benefits coverage offered under 
     this part, to the extent necessary to augment processes 
     otherwise available under State law.

     ``SEC. 804. ESTABLISHMENT OF NATIONAL HEALTH POOLING 
                   ARRANGEMENT.

       ``(a) In General.--The Secretary shall provide for the 
     offering and oversight of a national health pooling 
     arrangement to eligible small employers.
       ``(b) National Health Pooling Arrangement Defined.-- For 
     purposes of this section, the term `national health pooling 
     arrangement' means an arrangement under which health benefits 
     coverage is offered under terms and conditions that meet the 
     requirements of section 803(a).
       ``(c) Use of FEHBP Model.--The Secretary shall provide for 
     the national health pooling arrangement using the model of 
     the Federal employees health benefits program under chapter 
     89 of title 5, United States Code, to the extent practicable 
     and consistent with the provisions of this part. In carrying 
     out such model, the Secretary shall, to the maximum extent 
     practicable, negotiate the most affordable and substantial 
     coverage possible for small employers.
       ``(d) Limitation on Enrollment Periods.--The Secretary may 
     provide limits on the periods of times during which employees 
     may elect coverage offered under the national health pooling 
     arrangement, but the Secretary 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.
       ``(e) Authorizing Use of States in Making Arrangements for 
     Coverage.--In lieu of the coverage otherwise arranged by the 
     Secretary under this section, the Secretary may enter an 
     arrangement with a State under which a State arranges for the 
     provision of qualifying health insurance coverage to eligible 
     small employers in such manner as the Secretary would 
     otherwise arrange for such coverage.

     ``SEC. 805. COORDINATION AND CONSULTATION.

       ``(a) Coordination of State and National Programs.--The 
     Secretary shall provide by regulation for coordination of the 
     offering under this part of health benefits coverage to 
     employees of small employers under State health pooling 
     arrangements and the offering under this part of such 
     coverage to such employees under the national health pooling 
     arrangement.
       ``(b) Consultation.--In carrying out the provisions of this 
     part, the Secretary shall consult with the Secretary of 
     Health and Human Services and the Director of the Office of 
     Personnel Management.

     ``SEC. 806. PUBLIC EDUCATION.

       ``The Secretary shall maintain an ongoing program of public 
     education under which the Secretary shall--
       ``(1) publicize the national health pooling arrangement 
     established under section 804, and
       ``(2) assist, and participate with, the States in 
     publicizing the qualified State health pooling arrangements 
     established under section 803.

     ``SEC. 807. FUNDING FOR PREMIUM ASSISTANCE AND POOLING 
                   ARRANGEMENTS.

       ``(a) Premium Assistance.--There are authorized to be 
     appropriated to the Secretary such sums as may be necessary 
     to provide for premium assistance under section 802.
       ``(b) Grants to States Establishing and Operating Qualified 
     State Health Pooling Arrangements.--The Secretary may provide 
     for grants to States to establish and operate qualified State 
     health pooling arrangements described in section 803. There 
     are authorized to be appropriated to the Secretary such sums 
     as may be necessary to provide such grants.
       ``(c) Funding for National Health Pooling Arrangement and 
     Other Duties of the Secretary.--There are authorized to be 
     appropriated to the Secretary such sums as may be necessary 
     to provide for the offering and operation of the national 
     health pooling arrangement under section 804 and to carry out 
     the other duties of the Secretary under this part.''.
       (b) 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.

[[Page 17594]]

``Sec. 802. Premium assistance for small employers and their employees.
``Sec. 803. Qualified State health pooling arrangements.
``Sec. 804. Establishment of national health pooling arrangement.
``Sec. 805. Coordination and consultation.
``Sec. 806. Public education.
``Sec. 807. Funding for premium assistance and pooling arrangements.''.

     SEC. 3. INSTITUTE OF MEDICINE STUDY AND REPORT.

       (a) Study.--The Secretary shall enter into an arrangement 
     under which the Institute of Medicine of the National Academy 
     of Sciences shall conduct a study on the operation of 
     qualified State health pooling arrangements under section 803 
     of the Employee Retirement Income Security Act of 1974 and 
     the national health pooling arrangement under section 804 of 
     such Act.
       (b) Matters Studied.--The study conducted under subsection 
     (a) shall include the following:
       (1) An assessment of the success of the arrangements.
       (2) A determination of the affordability of health benefits 
     coverage under the arrangements for employers and employees.
       (3) A determination of the access of small employers to 
     health benefits coverage.
       (4) A determination of the extent to which part 8 of 
     subtitle B of title I of the Employee Retirement Income 
     Security Act of 1974 provides premium assistance for eligible 
     small employers (and premium assistance for employees of such 
     employers) that provided (or would have provided) health 
     benefits coverage in the absence of such premium assistance.
       (5) Recommendations with respect to--
       (A) extension of the period for which the premium 
     assistance under part 8 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974 is available 
     to employers and employees or an appropriate phase-out of 
     such premium assistance over time;
       (B) expansion of categories of persons eligible for such 
     premium assistance;
       (C) expansion of persons eligible for health benefits 
     coverage under the arrangements; and
       (D) such other matters as the Institute determines 
     appropriate.
       (c) Report.--Not later than January 1, 2010, the 
     Comptroller General shall submit to the Congress a report on 
     the study conducted under subsection (a).
       Amend the title so as to read: ``A bill to amend title I of 
     the Employee Retirement Income Security Act of 1974 to 
     encourage small employers to offer affordable health coverage 
     to their employees through qualified health pooling 
     arrangements, to encourage the establishment and operation of 
     these arrangements, and for other purposes.''.

  The SPEAKER pro tempore. Pursuant to House Resolution 379, 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. Mr. Speaker, I yield myself 5 minutes.
  Mr. Speaker, this morning we fortunately witnessed the successful 
take-off of the latest space shuttle mission into space, and I, and I 
know all my colleagues, our thoughts and prayers go with that crew and 
their families. We wish them a successful mission and a safe return 
here to Earth at the conclusion of that mission.
  But, Mr. Speaker, ``Houston, we have got a problem'' right here on 
Earth today, and that problem we all can agree to is the rising cost of 
health care, the impact that it is having on businesses large and 
small, family farmers, individual employees. It is a crisis that has 
been building through a number of years, and there is nothing more 
heart-wrenching or gut-wrenching than to speak to young parents who 
have a young child in desperate need of emergency medical attention, 
having to take that child to the hospital knowing that they do not have 
adequate health care coverage to provide for their sick child.

                              {time}  1645

  Today, one of the major factors for individual and personal 
bankruptcies is health care-related costs. There is also nothing more 
disheartening than speaking to the multitude of small business owners 
throughout this country who would love nothing better than to be able 
to extend affordable health care coverage to their employees; but they 
cannot because it is too expensive.
  I think we can all agree to the fact that this is something that we 
have to have focused attention to alleviate the high costs of health 
care and the growing ranks of the uninsured, which is roughly 45 
million to 48 million today. When we think about who comprises these 45 
million to 48 million uninsured, the vast majority of them are working 
Americans, working in small businesses who cannot afford to provide 
coverage. Again, it is something we all recognize, because we hear 
about it daily when we are back home traveling in our congressional 
districts. So, yes, action is needed; but there is a right way and a 
wrong way in taking action.
  A wrong way would be doing more harm than good in passing legislation 
and, for the previous hour, we have had a discussion in regard to the 
deficiencies and the shortfalls of the underlying associated health 
plans bill. That is why over 1,400 organizations around the country 
have come out in opposition to it.
  But today, the gentleman from New Jersey (Mr. Andrews) and I are 
offering the right way, an alternative way, another approach to dealing 
with the health care crisis that our small businesses are facing, one 
that we believe would extend health care coverage to millions of 
Americans, while keeping a lid on the rising premium costs.
  What it does, in essence, Mr. Speaker, is it builds upon the 
successful framework that the Federal Employees Health Benefits Program 
has offered to countless Federal employees throughout the country. It 
is a purchasing pool concept that they can enter into, with the 
competition of the marketplace and different insurance plans competing 
for that business that has proven to be extremely cost effective in not 
only extending coverage to millions of Federal employees, but also by 
guaranteeing the State protections and consumer protections that have 
been passed by State legislatures throughout the country.
  Mr. Speaker, it is one of the more amazing aspects of this debate 
that the party that claims to be for States' rights and tries to take 
political advantage of saying, listen, States, we stand for you and 
what you decide to do on a policy level, is so quick to jettison 
States' rights when it becomes politically inconvenient for their 
political allies, and that is exactly what is going on here today with 
the proposed associated health plans, which will preempt and trump the 
public policy decisions that have been made throughout this country by 
State legislatures.
  Now, our plan also would offer a minimum guarantee of coverage, one 
that the Federal Employee Health Plan currently does. It does not 
preempt the consumer protections and the State laws that have been 
passed. And the reason those State laws have been passed throughout the 
years is because the free marketplace and the insurance companies 
competing for the business were not offering this type of coverage, and 
that is why the State legislatures, in working with the Governors, had 
to pass legislation requiring certain minimal safeguards of health care 
coverage. So if a State legislature has felt in the past that it is 
necessary to require prenatal care, for instance, or to prohibit drive-
through deliveries, or to require screening for diabetes, autism, 
cancer, they have chosen to do so; and it has made sense for those 
States that have.
  But, instead, this one-size-fits-all approach comes in and tries to 
preempt what the States have been doing for many, many years.
  But what is also different with our substitute is it actually offers 
premium support payments to make it more affordable to small businesses 
to offer health care coverage to their employees, something that the 
underlying AHP plan is silent on. Again, an analysis of our bill would 
show that it would actually increase the coverage of the uninsured, 
help premium prices come down by building on this purchasing-pool 
concept, but also maintaining important and safe consumer protections. 
There is a reason why the National Governors Association and the States 
attorneys general have opposed the underlying bill. It is for all of 
these reasons, and we would respectfully submit the right approach is 
the substitute that we are offering today.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I rise in opposition to the

[[Page 17595]]

amendment in the nature of a substitute.
  The SPEAKER pro tempore (Mr. Rehberg). The gentleman from Texas (Mr. 
Sam Johnson) is recognized for 30 minutes.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, as the number of uninsured Americans continues to 
increase and health insurance costs continue to rise by double digits 
annually, it is clear that something must be done. I commend our 
friends across the aisle for coming up with a plan they think works. 
While I have great respect for the gentleman from New Jersey (Ranking 
Member Andrews) and the gentleman from Wisconsin (Mr. Kind), I have to 
disagree with them. Their substitute will have the unintended 
consequence of raising, not lowering, costs for small businesses trying 
to offer health insurance. It will impose new mandates on employers and 
saddle the American public with yet another government program to fund.
  The proponents of the plan claim that the new ``small employer health 
benefits plan'' is modeled after ours here in the Federal Government. 
Unfortunately, unlike the Federal Employee Health Benefit Plan, health 
insurance provided under the Democrat substitute would be subject to 
more than 1,500 State mandates that make up 15 percent of the rising 
costs of health insurance. That increased cost would likely be funded 
by higher taxes, adding another burden to small businesses. And on top 
of that, the substitute would force small businesses to deal with a 
host of new mandates.
  Their substitute mandates employers provide health coverage to every 
employee who has been employed for more than 3 months. It mandates that 
employers pay 50 percent of the health care premiums for employees. It 
mandates that they cover the dependents of their workers. More mandates 
are supposed to lower costs? The Democrat substitute just does not make 
sense.
  In contrast, AHPs utilize the strengths of the employer-based system, 
the private market, competition, economy of scale enjoyed by large 
union and employer plans, and ERISA's preemption of State mandates, to 
lower costs. Mr. Speaker, AHPs are supported by our Nation's small 
businesses. The NFIB, the National Retail Federation; the National 
Association of Wholesalers and Distributors; the National Restaurant 
Association; Associated Builders and Contractors; National Association 
of Homebuilders; the United States Chamber of Commerce, and others are 
strongly supportive of this legislation.
  I hope my colleagues will join me in offering assistance to our 
Nation's small businesses and their workers by supporting AHPs and 
opposing the Democrat substitute.
  Mr. Speaker I reserve the balance of my time.
  Mr. KIND. Mr. Speaker, at this time I yield 4 minutes to the 
gentlewoman from Colorado (Ms. DeGette), a person who certainly 
appreciates the role of States and consumer protection in this health 
care debate.
  Ms. DeGETTE. Mr. Speaker, I rise today to urge a ``no'' vote on H.R. 
525 and a ``yes'' vote on the Kind-Andrews substitute.
  This debate is, frankly, misdirected. The question is not who 
recognizes that there is a health care crisis in this country and who 
does not. This is not a contest to see who among us truly understands 
that small businesses are finding themselves in an increasingly 
difficult predicament when it comes to providing health care insurance 
for their employees.
  We all care about this issue, and we all have constituents who need 
help affording health care insurance. Small businesses, which do face 
unique challenges across the board compared to large corporations, are 
the backbone of our economy; and we should be doing more to help them. 
And providing better and more health care coverage is one of the 
biggest problems they face today.
  So I ask our friends on the other side of the aisle, why do we have 
before us a bill that does nothing to really address the problem for 
small businesses and very well may end up hurting the people who we say 
we are trying to help? There is a reason why the National Governors 
Association and 41 attorneys general are against this bill. There is a 
reason why numerous advocacy associations, consumer groups, and others 
oppose this misguided legislation.
  This bill has been hailed as the answer to covering many of the 45 
million Americans who are currently uninsured; but in truth, a very 
small percentage of the population would be helped in any way. This is 
because association health plans would help a relatively small number 
of the youngest and healthiest among us who will gain access to cheap 
minimalist plans. But that would come at the expense of the vast 
majority of workers whose premiums would actually increase. It would 
also make it nearly impossible for those with previous health 
challenges or chronic diseases to obtain any coverage at all.
  Let me give an example. I am the cochair of the bipartisan Diabetes 
Caucus in Congress. Forty-six States have mandated that insurance plans 
must cover diabetic supplies? Why? One little vial of strips, test 
strips costs $50, and insurance companies simply were not giving that 
benefit in the past. That is why 46 of the 50 States said, you have to 
pay for this. Now, if diabetics test their blood, long-term 
complications like heart disease, kidney failure, end-stage renal 
disease, all of those are eliminated; but they have to have insurance 
coverage for these supplies. This legislation wipes out that 
requirement. It says, you do not have to pay for that; you do not have 
to follow that State law. That is not only wrong for those 
beneficiaries who are diabetic; it is shortsighted in the long run for 
the cost of our health care system.
  We need to address the real access and affordability issues that 
affect employees of small businesses, and the only way we can do that 
is by passing the Kind-Andrews substitute. This substitute will give 
small employers the ability to provide the same access to health 
benefits as Federal employees. It will also allow States to establish 
small employer health pools. It would also minimize adverse selection 
and use state-licensed insurers without preempting State laws. Sounds 
like a good substitute to me.
  If we pass the substitute, we can make a true impact on the status of 
millions of uninsured workers across this country; and for that reason, 
I urge a ``no'' vote on H.R. 525 and a ``yes'' vote on the substitute.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield such time as he may 
consume to the gentleman from Ohio (Mr. Boehner), the chairman of the 
committee.
  Mr. BOEHNER. Mr. Speaker, I thank my colleague for yielding me this 
time to speak on the substitute that has been offered.
  Now, if we think that having States regulate insurance in a small 
group market is a problem with state-mandated benefits, this is the 
mother of all complicated programs to offer health insurance, because 
what are we going to do? We are going to have the Federal Government do 
it. Now, none of us really believes that the Federal Government ought 
to be in the business of running big-risk pools and offering plans to 
small businesses.
  Secondly, the bill is estimated, and it has changed from last year; 
last year there was a $50 billion authorization, but it is still going 
to cost an awful lot of money to do this bill.
  One of the most damaging parts, though, is that each employer who 
would take part in this plan that is being offered would still be 
subjected to the State mandates on health insurance in their particular 
State. There are 1,500 State-mandated health benefits around the 
country. It also requires that the employer must pay at least 50 
percent of the premium. In most cases, I would imagine the employer 
would pay far more than that of the premium; but maybe it is a small 
company, maybe it is five or six employees, and maybe together they 
decide, we want to qualify for this, but we will each pick up our own 
share of

[[Page 17596]]

the cost. Why would we want to prohibit them from including themselves 
in this by this type of a requirement?
  It also says that every employer must offer this to every employee 
who has worked at the company for 3 months. That seems like a very 
short period of time, especially in some industries where you have an 
awful lot of turnover where they would typically require that you wait 
6 months before you would qualify. All this would do would be to drive 
up the cost.
  But one of the most amazing parts of this substitute, we would 
subsidize this from the Federal Government and, for employers with 25 
or fewer employees, we would give them a subsidy to help entice them 
into this program. And, if you qualified, you qualify for a 10-year 
period. Now, some small company with less than 25 employees may 
qualify, may get the subsidy and may, over a course of several years, 
become highly successful. But under this particular substitute, they 
would still qualify for the subsidy.

                              {time}  1700

  I do not think any of us believe that the Federal Government ought to 
be operating a health insurance company. There are a lot of mechanisms 
in the private market for this association health plan program to work. 
And, again, why do we want to make the perfect the enemy of the good?
  The underlying bill that we have will, in fact, work. It will allow 
millions of Americans to get better-quality coverage at much more 
competitive prices than what they get today.
  So let us allow the underlying bill to go forward. Let us defeat the 
substitute.
  Mr. KIND. Mr. Speaker, I yield myself 1 minute to respond quickly, 
just to clarify a couple of facts.
  Mr. Speaker, I have all of the respect and admiration for the chair 
of our committee, but a closer reading of the substitute bill would 
not, in fact, require a Federal-run program; rather the Department of 
Labor would contract out the State-licensed health insurance plans in 
order to administer these programs.
  But we do feel that there is a requirement or a necessity to offer 
greater incentives and inducements for small businesses to offer this 
coverage. That is why we are offering a premium support program with 
it.
  Mr. Speaker, I yield 5 minutes to the coauthor and codrafter of this 
substitute amendment, the gentleman from New Jersey (Mr. Andrews).
  Mr. ANDREWS. Mr. Speaker, I thank my friend, the gentleman from 
Wisconsin (Mr. Kind), for yielding me the time.
  I think the best way to understand the difference between the plan 
that the gentleman from Wisconsin (Mr. Kind) and I are putting forward 
and the majority plan is to look at it from the point of view of one of 
the small business people that we keep hearing referred to over and 
over again here today.
  My friend, the gentleman from Wisconsin (Mr. Obey), often refers to 
speeches on the floor as posing for holy pictures, and I think that is 
what is going on here today, where everyone is embracing the small 
businessman or small businesswoman and saying how much we love them and 
care about them, and I am sure everyone does. But I think what matters 
is the impact of these various proposals, what the proposals would have 
on the small business person.
  In my State the cost of insuring a family is about $14,000 a year. So 
let us take a small business person that has 10 employees and is 
looking at a situation where he or she would have to spend $140,000 to 
insure each of those employees and their families if the employer was 
going to bear the whole cost. That is a huge amount of money, but is 
probably well beyond the ability of that employer to pay for.
  Under the majority's bill, if we give the majority every benefit of 
the doubt, if we assume that the majority's bill will work exactly as 
they say that it will, the most optimistic forecast is the majority's 
bill will save 13 percent in premiums for that employer. And let us 
round it up a little bit and give them the benefit of the doubt further 
and say it will save $2,000 per employee off that $14,000.
  So what would happen? We would save $20,000, and the employer would 
be looking at spending $120,000 to insure the families instead of 
$140,000. That is not going to do it. That is still far more than the 
person running a machine shop or a small retail store or landscaping 
business or a delicatessen is ever going to be able to afford. This 
just is not going to happen. It is not going to happen.
  Our proposal is very different. It says that in a case of a small 
business like the one I am hypothesizing here, where you have about 10 
employees, and where those employees make less than 200 percent of the 
poverty level, which in my State for a family of four would be about 
$40,000, so just about anybody making less than $20 an hour or so would 
be eligible for this kind of subsidy, that is most people. That is most 
people. Under our plan that employer, if the employer chose to do this, 
my friend a minute ago said that the employers were mandated to do 
this, that is not so. No one is required to insure their employees 
under this plan, but if the employer chooses to insure his or her 
employees, what would happen is they would get a credit of $7,000 per 
employee toward the cost of this health insurance, a 50 percent credit. 
So the price of the coverage would drop from $140,000 down to $70,000. 
That is still an awful lot of money. It is an awful lot of money for a 
person running a small business, but it puts the person in reach of 
maybe covering that family, particularly if they ask the family to 
share with copays and deductibles and their own contribution.
  Now, my friend, the gentleman from Ohio (Mr. Boehner), the chairman 
of the full committee, said, my goodness, the Government will be 
subsidizing small employers if we do this. It is big government. Well, 
government already subsidizes health care for large employers, because 
they permit the large employers to deduct every premium dollar. And 
that employer is paying at the 36 or 37 percent corporate tax rate, 
which most of them do. That constitutes a 36 or 37 percent subsidy. So 
General Motors is getting a nearly 40 percent subsidy, but the person 
running the delicatessen or the machine shop is not. This evens the 
playing field.
  Now, how do we pay for this? Now, the chairman knows that under the 
rules of the House that it would not be appropriate or germane for us 
to identify the source of paying for this, because it would take it 
outside of the committee's jurisdiction.
  There are different views as to how we could pay for this. I speak 
only for myself when I say this, but I would note for the record that 
the cost of tax breaks to companies that outsource their jobs outside 
of the United States is $100 billion over the next 10 years. So if that 
machine shop, if its competitor takes all of the jobs and moves them to 
Malaysia or Mexico, gets a tax break for doing that, which I think is a 
foolish policy, if we were to repeal that tax break for companies that 
are outsourcing their jobs out of this country, that would go a long 
way toward paying for the plan that we are talking about.
  That to me is a pretty good trade-off. Companies that are sending 
their jobs overseas would lose a tax break; companies here in America 
would gain health insurance.
  Vote yes on the Kind-Andrews substitute.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield 3 minutes to the 
gentleman from Louisiana (Mr. Boustany).
  Mr. BOUSTANY. Mr. Speaker, you know what we are trying to do here is 
to make health care more affordable, available and accessible to all 
Americans. It seems to me that if we are going to achieve this goal, we 
have to adhere to some principles, and I can think of three right off 
the bat that are very important. One is to provide information to the 
consumer; second, choices to the consumer; and, thirdly, thirdly, 
control to the consumer.
  Now, this amendment that is being proposed seems to me that it is 
going to limit choice rather than create choice. And I find it odd that 
there is

[[Page 17597]]

no mention of what its cost is going to be to the Federal Government in 
putting forth these subsidies. I think we need to know that 
information. I think it is very important information.
  And it also seems to me that this program is going to add to the cost 
of health care, and not lower the cost. What we need to do is foster 
competition in health care, and right now 45 percent of all of the 
health care dollars are within governmental systems, Medicare and 
Medicaid and so forth. The other 55 percent is in the insurance market, 
and there is no competition. There is no competition in this arena. And 
so if we stick to these three principles I mentioned earlier, we can 
create competition.
  It seems to me that if we are going to give subsidies, why not give 
subsidies to individuals to buy health savings accounts which provide 
those choices which will allow for an information flow to the patient, 
to the consumer?
  And so I urge colleagues on both sides of the aisle to not support 
this amendment and to vote for H.R. 525, which offers a good starting 
point to creating competition in the health care market.
  Mr. KIND. Mr. Speaker, I just recommend to the previous speaker that 
he should talk to any Federal employee with regard to the choices that 
they are offered under the Federal Employee Health Plan.
  Mr. Speaker, I yield 2 minutes to the gentlewoman from Ohio (Mrs. 
Jones), a person who would rather take millions of people off the ranks 
of the uninsured rather than add a million people into the uninsured.
  Mrs. JONES of Ohio. Mr. Speaker, first of all, I want to thank my 
colleagues, the gentleman from Wisconsin (Mr. Kind) and the gentleman 
from New Jersey (Mr. Andrews), for offering this substitute.
  I live in the city of Cleveland. We have a great organization 
representing many of our smaller enterprises called COSE, and COSE has 
come together in an attempt to provide health care coverage to small 
businesses.
  I wanted to vote for a piece of legislation that will allow small 
business to have insurance policies for their people, but I did not 
want to vote for a plan that did not provide the same kind of coverage 
that everybody else has, meaning that it did not have to be responsible 
for State insurance regulations as did other policies.
  So by presenting this amendment, the gentleman from Wisconsin (Mr. 
Kind) and the gentleman from New Jersey (Mr. Andrews) have offered me 
an opportunity to say to the small businesses in my community, I 
support you, and I want to make sure you can provide health care 
coverage to your employees.
  What is also of particular concern to me is that offering something 
that does not provide the same safeguards is like offering nothing. All 
we have to do is go back and look at the MEWAs, the Multiple Employer 
Welfare Arrangement, I guess that is what they call them, the Multiple 
Employer Welfare Arrangements, which have been used by employers as 
vehicles to provide benefits. The public record is filled with 
instances where they have failed, left employees and employers alike 
with unpaid medical bills.
  Mr. Speaker, the other thing that we have to look at is, and the 
prior speaker said something about subsidies, and you give them to 
people, and they do not get anything in return. We gave subsidies to 
the drug companies in the Medicare prescription drug bill, and they got 
money that they did not even have to use towards a prescription 
benefit. So do not talk to me about subsidizing anything.
  Let us make sure that the people of America and the small businesses 
have an opportunity to have health care. If we do preventive health 
care, we would not have so many people coming into hospitals with acute 
problems because they have not had any prevention.
  It is so wonderful that we have a substitute that offers coverage to 
small employers. Vote for the substitute and vote against H.R. 525, the 
Small Business Fairness Act.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I reserve the balance of my 
time.
  Mr. KIND. Mr. Speaker, I yield 4 minutes to the gentleman from 
Tennessee (Mr. Cooper).
  Mr. COOPER. Mr. Speaker, I think the Rules Committee has made a 
terrible mistake here, and not the usual Rules Committee sort of 
mistake, because they have actually allowed to come to the floor a 
substitute that is so clearly superior to the AHP bill it is amazing.
  Now, let my friends on the other side understand, I am not against 
AHPs. I am an original cosponsor of the gentleman from Texas (Mr. 
Johnson's) legislation. AHPs would be an improvement over current 
market conditions, which are appalling. But this plan put forward by 
the gentleman from Wisconsin (Mr. Kind) and the gentleman from New 
Jersey (Mr. Andrews) is better than AHPs, and let me describe some of 
the ways.
  First, the gentleman from Louisiana (Mr. Boustany) mentioned choice 
earlier. Under the AHP approach, the average small business might be 
able to offer their employees one or two insurance plans, and that 
employee of the small business would have no idea whether their doctor 
was going to be a apart of one of those plans. But under the Federal 
employee approach, such as the one that we enjoy in this House of 
Representatives, they could have 10 or 20 or more plans to choose from, 
and the likelihood that their physician, their caregiver, would be part 
of one or more of those plans increases substantially.
  So when you are talking about unleashing the free market to work for 
the individual, the Federal Employee Health Benefits-type plan, and 
this would not infringe on Federal employees' benefits, but it would 
set up a parallel organization that small businesses could benefit 
from, the opportunities for the small businesses of America are 
magnificent under this approach.
  Another key aspect of this is the substitute approach is more likely 
to work. AHPs are largely a thought experiment. They have never really 
worked anywhere. But the Federal Employee Health Benefit System has 
worked well for decades, 30 or 40 years of a magnificent track record 
of experience. It has got bipartisan support. Men and women of goodwill 
on both sides of the aisle know that this sort of approach works; it 
lowers the sales load, it increases the risk pool to the maximum size 
which you need for lower group rates.
  It really is the fairest and best way to approach this nagging small 
business problem that we have had. It is also going to be more 
affordable, because while it lowers the sales load and increases the 
size of the risk pool, it is fairer to all industries.
  There are probably going to be a lot of insurance companies that want 
to offer insurance to software companies, because those employees tend 
to be young and healthy. How many are going to be eager to insure older 
Rust Belt industries?
  The tax credit approach that my friend has mentioned has had to be 
adjusted for purposes of this substitute, but we need to acknowledge, 
as my friend from New Jersey (Mr. Andrews) mentioned, health care is 
already seriously subsidized in this country. All we are trying to do 
is make that subsidy fairer.
  I think also the substitute approach would make the system higher 
quality. First of all, under AHPs, there would be minimal solvency 
requirements. By completely overturning all State regulation, as AHPs 
would do, that is a truly radical approach, and while my friends on the 
other side may be radicals in this regard, I think they are going 
further than they realize. These insurance plans need to be thoroughly 
solvent. You need to have adequate capital requirements so that you 
know the insurance is going to be there when you need it.

                              {time}  1715

  I think you would have better benefits under this plan, too, because 
you would have more proven traditional insurance policies that I think 
more folks who work for small businesses are accustomed to.

[[Page 17598]]

  Let me admit, Mr. Speaker, in closing, our approach is less famous. 
Why? Because we do not have every PAC and trade association in 
Washington, D.C. favoring this because they stand to personally benefit 
from promoting AHPs to their members. They are desperate for non-dues 
revenue for those associations.
  For any tourist who comes to Washington, if you do not think these 
PACs and trade associations are rich enough, come visit again. You will 
see skyscrapers full of these folks all over town, and they would love 
to make money as insurance salesmen to all the small businesses in 
America. That is not doing justice for our folks back home.
  As I say, AHPs are an improvement, but they are not as good as the 
Kind-Andrews approach. Please vote for Kind-Andrews.
  Mr. KIND. Mr. Speaker, how much time remains?
  The SPEAKER pro tempore (Mr. Rehberg). The gentleman from Wisconsin 
(Mr. Kind) has 9\1/2\ minutes remaining. The gentleman from Texas (Mr. 
Sam Johnson) has 22 minutes remaining.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I reserve the balance of my 
time.
  Mr. KIND. Mr. Speaker, I yield 4 minutes to the gentleman from Rhode 
Island (Mr. Kennedy), someone who understands the importance of 
maintaining consumer protections as we have in our substitute bill.
  Mr. KENNEDY of Rhode Island. Mr. Speaker, I thank the gentleman for 
yielding me time.
  As we all know, we are in a health care crisis and many propose many 
solutions. But let us just find out the simple facts. Facts are, 
insurance ratings are really dependent on the notion that some people 
are higher risk than others. Those are the people that insurance 
companies love to insure. They love to insure them because if they have 
low risk, every dollar that they pay in terms of premium is another 
dollar down on their bottom line of profit. However, if you are 
unfortunate enough to be born with a congenital defect in your organs, 
if you are unfortunate to be run over by a car, if you are struck by 
some ailment that is out of any control that you have whatsoever, under 
the insurance system you are known as a risk. Simply growing old titles 
you as a risk.
  Do you think an insurance company wants to cover you? Of course they 
do not.
  This is a zero sum game. If some get insurance, others get zero. But 
the fact of the matter is we all pay. The notion that some people are 
going to get away from paying, meaning some small businesses are going 
to get away from paying, is just hogwash.
  The fact of the matter is, we all know that when we pay our premiums, 
we are paying for someone who is uninsured. We are paying for someone 
who is underinsured. The way out of this problem is not to escape 
giving people health insurance, which this legislation does. Of course 
it is going to be cheaper if you do not pay for care. That should not 
be a surprise to any of us. That is pretty obvious. If you want to get 
lower insurance costs, let us just cut out treatment for cancer. That 
will reduce insurance costs. Let us just cut out treatment for mental 
health.
  That is just what this act does. It says ``no State mandates'' which 
means all the provisions, for example, for pregnant women to be able to 
have at least 72 hours after giving birth, all those provisions that 
States have put in for consumer protection, are no longer there under 
this legislation because this obviates all those State requirements 
that the people want in their insurance coverage. By joining the 
insurance pool of Federal employees, we bring everyone under a 
community rating, which means that we all pay our share, irrespective 
of whether someone is healthy and young versus old and sick.
  All of us should be paying our fair share unless you want to escape 
paying for the notion that there but for the grace of God go you. The 
fact of the matter is there but for the grace of God go you, someone 
else, and I. All of us have an obligation to those who have needs that 
need that health insurance.
  Why? Because it could be any one of us that is the person that is in 
great need. And I do not think any one of us would be denied health 
care coverage simply because as a human being we have greater health 
care needs. And that is why I believe people ought to support the Kind 
substitute. We ought to support people's access to the same coverage 
all of us as Federal Members of Congress receive.
  Thank you to my good friends, Mr. Kind and Mr. Andrews, for yielding 
me this time to speak in support of this substitute, the Small Employer 
Health Benefits Program, which will provide a real solution for many of 
the forty-five million Americans without health insurance.
  Mr. Speaker, our health care system is broken.
  To live in a country as great and as wealthy as ours, and to have 
millions of hard working, employed Americans who cannot afford quality 
health insurance is inexcusable.
  My friends from across the aisle would like the American people to 
believe that Association Health Plans are the only available option to 
relieve the burden of increased health care costs on small business 
owners.
  However, the fact remains that Association Health Plans not only 
ignore the unique needs of small businesses, but will actually 
undermine our insurance system by allowing healthy individuals to opt 
out.
  We shouldn't be making policy only for the fortunate. We should be 
making policy for everybody.
  The proposed substitute, the Small Employers Health Benefits Program, 
would provide the same access to health benefits as the Federal 
Employees Health Benefits Program, FEHBP.
  If we are not ready to provide an overall solution to the Nation's 
health care crisis, then why don't we at least extend small businesses 
the courtesy of providing a plan that meets the same requirements that 
Members of Congress and their families currently enjoy.
  My colleagues on the other side of the aisle are right about one 
thing, small business owners are facing a crisis. Now let's provide 
them with a solution.
  Mr. KIND. Mr. Speaker, I yield 2 minutes to the gentleman from 
Maryland (Mr. Cardin), a person who has built up considerable health 
care expertise from his position on the Committee on Ways and Means.
  Mr. CARDIN. Mr. Speaker, I oppose the underlying bill for many 
reasons. Fundamentally, it violates the concept of federalism that is 
embodied in our Constitution, respect for our States, and the ability 
of our States to be able to regulate public safety issues and health 
issues for the people of our States.
  This legislation would preempt the ability of my State and your State 
to protect the rights of our own citizens through regulation. That is 
wrong. That is the wrong usurpation of power by the Federal Government.
  This underlying legislation would adversely affect the people of 
Maryland, and let me tell you why. Our legislature has passed small 
market reform. People who work for companies that are between two and 
50 employees have the opportunity to purchase insurance, affordable 
health insurance in Maryland as a result of our small market reform. 
The passage of this legislation will mean the end of the small market 
reform and the opportunity to purchase insurance by small employers in 
my State. That is wrong.
  We are going to be moving in the wrong direction with making 
affordable health insurance available for the people of this Nation.
  Mr. Speaker, I want you to understand the Insurance Commissioner of 
Maryland is a Republican. The Governor of Maryland, who opposes this 
bill, is a Republican. This should not be a partisan issue. This should 
be a matter about the appropriate use of the Federal authority and it 
is being used wrong here.
  I congratulate the gentleman from Wisconsin (Mr. Kind) for his 
substitute which is sensitive to the rights of our States. I hope 
Members will support the substitute and reject the underlying bill.
  Mr. Speaker, as a member who is dedicated to protecting the rights of 
Americans who have health insurance and to ensuring that opportunities 
to secure affordable health insurance can be expanded, I rise in 
opposition to H.R. 525. Since coming to Congress, I have heard

[[Page 17599]]

frequently from individuals who work in small business. They have 
spoken to me about the difficulties that result from a lack of health 
insurance coverage, skyrocketing premiums, and reductions in benefits. 
I remain committed to developing solutions that will alleviate the 
hardships faced by many Maryland families and small businesses.
  However, the Association Health Plan (AHP) legislation we are 
considering on the House floor today is not a viable solution. H.R. 525 
would exempt AHPs from State laws and State regulatory oversight. 
Through this special exemption, AHPs would be able to severely 
undermine the goal of greater health care access and affordability for 
Maryland residents. Although some supporters of this legislation claim 
it will benefit small employers, the reality is that H.R. 525 will only 
hurt the small business community.
  H.R. 525 would leave the Maryland insurance commissioner powerless to 
protect our citizens. Under this misguided bill, unregulated out-of-
state AHPs could operate in Maryland without being required to comply 
with health care safeguards enacted by our state legislature, such as:
  Appropriate access to emergency care. The right to independent appeal 
of denied claims, Fair insurance premiums for small groups, Consumer 
marketing protections, Prevention of health plan failures due to 
insolvency.
  Under this legislation, my constituents would not only lose their 
ability to demand an independent review of denied claims, but they 
would lose guaranteed access to important benefits such as emergency 
medical treatment and mammography screenings. Workers who purchase 
association health plan coverage--believing that they are getting 
comprehensive insurance--may very well find that they would still have 
to shoulder the costs of these essential services.
  Not only would this bill be harmful to potential subscribers, it 
would destroy the small group market reforms already in place in 
Maryland. Twelve years ago, my home state of Maryland took a major step 
toward helping small businesses afford health insurance for their 
workers. Our reforms guarantee the availability of reasonably priced, 
comprehensive health insurance for all small employers. Specifically, 
Maryland requires all health insurers to sell a comprehensive standard 
benefit package designed by an independent commission to all employers 
with between 2 and 50 employees. The plan must have benefits that are 
actuarially equivalent to those required to be offered by federally 
qualified HMOs, and the average cost cannot exceed 12 percent of 
Maryland's average annual wage. Insurers have the option of offering 
additional benefits, but they must be priced separately. Insurers must 
use adjusted community rating to price their plans, and they cannot 
impose pre-existing condition limitations. The Maryland plan not only 
guarantees the availability of reasonably priced insurance, it also 
makes it easier for small employers to make ``apples to apples'' 
comparisons of health costs throughout the state.
  Due to these reforms, more Maryland small businesses offer health 
care coverage to their employees than in any surrounding states or in 
the nation as a whole. Maryland's system is one in which healthy 
subscribers subsidize those who are less healthy. These reforms work 
because insurers are not allowed to ``cherry pick'' the businesses that 
have the healthiest workers. Association health plans have been 
outlawed in our state. The association health plan legislation before 
us would undermine our system by using the lure of lower premiums to 
attract firms whose workers have fewer health problems, firms whose 
employees might be willing to forgo some of the consumer protections 
offered under Maryland law. Businesses with older, sicker employees 
would remain in the state system, driving up premiums. H.R. 525 would, 
in effect, lead to the collapse of Maryland's system. I want to 
emphasize that this is not a partisan issue--AHS's are opposed by my 
own governor, our former colleague Robert Ehrlich, and by the National 
Governors' Association, and the National Association of Insurance 
Commissioners. I will submit for the Record an April 19 letter from 
Alfred Redmer, Maryland's Insurance Commissioner, expressing his 
opposition to H.R. 525.
  This bill would be devastating on a national level, as well. The non-
partisan Congressional Budget Office found that premiums would increase 
for 20 million employees and their dependents who are covered through 
small firms, and that 100,000 of the sickest workers would lose 
coverage altogether if this AHP legislation were enacted.
  Passage of this legislation would be a disservice to every worker, 
every family, and every small business in Maryland. H.R. 525 fails to 
provide meaningful help for the uninsured, denies access to affordable 
health care for older, less healthy groups, and undermines the crucial 
consumer protections that our General Assembly has enacted. For these 
reasons, I urge my colleagues to vote against this bill.
  Mr. Speaker, the following is a letter from our insurance 
commissioner who is opposed to H.R. 525:

                            Maryland Insurance Administration,

                                    Baltimore, MD, April 19, 2005.
     Hon. Benjamin L. Cardin,
     House of Representatives,
     Washington, DC.
       Dear Congressman Cardin: As Commissioner of the Maryland 
     Insurance Administration I am writing to express my strong 
     opposition to federal legislation that would create 
     Association Health Plans, AHPs. I understand such 
     legislation, H.R. 525, has been passed, again, by the House 
     Education and the Workforce Committee and may soon come to 
     the floor of the House for a vote. H.R. 525 would allow AHPs 
     to form and operate in Maryland outside the authority of my 
     office and beyond the reach of proven State consumer 
     safeguards and solvency laws. If enacted into law, this could 
     do irreparable harm to our small group market and strip our 
     citizens of critical protections.
       Altough I share the sponsor's concern for the growing 
     number of small business employees who cannot afford adequate 
     coverage, the fact is this legislation would do little, if 
     anything to address this problem. H.R. 525 ignores the root 
     cause of the current crisis--skyrocketing healthcare 
     spending. Unless spending is brought under control no 
     attempts to increase competition or enhance options for small 
     business will truly make insurance affordable and, thus, 
     promote coverage.
       Even more troubling is the harm the legislation would do to 
     consumers, H.R. 525 would: (1) permit risk selection thereby 
     creating opportunities for ``cherry-picking'' among healthier 
     groups; (2) allow inadequate capital standards and solvency 
     requirements, both of which are inferior to existing State 
     standards; (3) eliminate proven State consumer protection 
     laws, including those designed to allow consumer appeals of 
     adverse plan decisions and those aimed at preventing and 
     fighting fraud; and (4) allow AHPs to ignore State benefit 
     requirements. To add insult to injury, while longstanding 
     State oversight and consumer protections would be eliminated, 
     H.R. 525 provides no additional resources to the Department 
     of Labor to regulate AHPs or help consumers.
       I remain committed to improving access to affordable 
     insurance for small business owners and workers in Maryland. 
     Together, we can find solutions that will be effective and 
     not lead to greater problems in the future. H.R. 515 is 
     clearly not the answer and I urge you to oppose it.
           Sincerely,
                                                   Al Redmer, Jr.,
                                           Insurance Commissioner.

  Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield 30 seconds to the 
gentleman from Louisiana (Mr. Boustany).
  Mr. BOUSTANY. Mr. Speaker, I would like to engage the gentleman from 
Wisconsin (Mr. Kind) in a colloquy.
  My question is, I think we need to know this information, what is the 
cost of your amendment to the Federal Government?
  Mr. KIND. Mr. Speaker, will the gentleman yield?
  Mr. BOUSTANY. I yield to the gentleman from Wisconsin.
  Mr. KIND. We are waiting to get a cost estimate back, but based on 
two previous debates on this issue, it was comparable to the amount of 
money set aside for the health savings account that has been a part of 
this bill in the past, but is not this year.
  Mr. BOUSTANY. I think we need to have that information. I am all for 
choices and the gentleman's plan is intriguing, it is interesting; but 
I think it may be premature.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, do I have the right to close?
  The SPEAKER pro tempore. Yes.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I reserve the balance of my 
time.
  Mr. KIND. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, I think there is wide agreement, bipartisan agreement 
that we have got a serious issue on our hands, a huge challenge that is 
facing our Nation, that is, rising health care costs and the impact it 
is having on economic growth, the opportunities for businesses large 
and small to grow and hire additional workers. I think it is one of the 
main reasons why we have experienced such anemic job growth in this 
country in recent years, because of the hesitancy of so many 
businesses, especially small businesses to hire additional workers 
because of the associated rising health care costs. It is

[[Page 17600]]

something that we must address in order to deal with an expanding 
economy at a rate that we would all like to see, but also to get a grip 
on the stagnant wages right now that are holding so many of our workers 
back.
  I think there is a direct cause and effect whereas the typical 
worker's wages have been frozen in effect in recent years because of 
the additional costs coming out of their pockets to afford health care. 
That is why, again, we have had an important debate today, but it is 
one we should be working on in a bipartisan fashion to address the 
underlying causes.
  Volumes have been written about the underlying associated health plan 
that is before us today. And, unfortunately, the verdict is in and that 
verdict is this is just bad public policy. That is why so many of the 
Governors and so many of the attorneys general, and the commissioners 
of insurance, the Association of State Legislatures in a bipartisan 
fashion have roundly criticized and condemned the underlying associated 
health plan, because they feel as we do on this side that it will do 
more harm than good.
  I understand and appreciate the motivation on the other side to try 
to move forward on this issue. But we are stuck. The wheels are stuck 
in the mud, and it is just spinning because it is not getting any 
traction. And that is because the Senate in their analysis of the 
underlying bill has found that it, too, is bad public policy. And I am 
afraid we are going to have this debate today, it is going to expire 
and it is going to get stuck with no progress being made.
  Perhaps there may be some deficiencies in what we are offering in our 
substitute, just as we believe there are deficiencies in theirs. But 
now is the time for us to come together to try to find some common 
ground so we can make progress and deal with this issue that is 
affecting more and more Americans every year.
  One of the issues that really has not received that much attention, 
and I would just like to close on and highlight it, is again the fact 
of the Federal preemption and taking away from States the ability to 
conduct proper oversight and accountability with these insurance plans.
  Both the GAO in a study and a recent Georgetown University study that 
came out this summer indicated that the underlying AHP bill, as it is 
written with the weak provisions that would go to the Department of 
Labor, would lead to an explosion of fraud and abuse with these types 
of plans throughout the country. And there is a history of fraud and 
abuse.
  Currently, there are over 144 plans that are set up fraudulently that 
are not paying the claims that are affecting well over 200,000 workers. 
But for the effective oversight and the policing that is taking place 
at the State level, even these would probably go unnoticed. It would 
impact more and more Americans. It is another reason why the underlying 
bill does not make sense, why the Federal preemption over State 
jurisdiction, which has been the history of health care regulation in 
this country, is another bad idea.
  Our substitute addresses that by not preempting State law by allowing 
the State jurisdiction and oversight to continue. It does build upon 
the concept of a purchasing pool modeled after the Federal employee 
health plan which, as was stated earlier, has worked marvelously over 
the years. No one is recommending dismantling that.
  I would encourage a ``yes'' on the substitute and a ``no'' on the 
underlying bill.
  Mr. Speaker, I yield back the balance of my time.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield myself the balance of 
my time.
  Mr. Speaker, we do not know the cost. It is going to be out of 
reason, I believe. And while AHP legislation will be implemented 
quickly, this Democrat substitute might take years to get up and 
running.
  In addition, the funds are subject to appropriations. And if an 
appropriation did not go through or did not provide enough funds, small 
employers and their workers would be left hanging.
  Let me make myself clear. I believe our Nation's employer-sponsored 
health care system is a success story. Employers provide coverage for 
the vast majority of our Nation's population; 131 million Americans 
obtain their coverage from private employers.
  The Committee on Education and the Workforce and the Department of 
Labor through our oversight of ERISA have jurisdiction over employer-
sponsored health care. So I support using the employer-based system to 
address the problems of the uninsured.

                              {time}  1730

  However, the way to do that is to build on the success of the current 
system by utilizing the strengths that enable large employers and 
unions to offer Cadillac health plans. AHPs are the way to do that. 
Vote down this amendment. Vote for AHPs.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Rehberg). Pursuant to House Resolution 
379, the previous question is ordered on the bill and on the amendment 
in the nature of a substitute 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 197, 
nays 230, not voting 6, as follows:

                             [Roll No. 424]

                               YEAS--197

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Barrow
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Case
     Chandler
     Clay
     Cleaver
     Clyburn
     Conyers
     Cooper
     Costa
     Costello
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doyle
     Edwards
     Emanuel
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Harman
     Hastings (FL)
     Herseth
     Higgins
     Hinchey
     Hinojosa
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     Kucinich
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren, Zoe
     Lowey
     Lynch
     Maloney
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Melancon
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Schwartz (PA)
     Schwarz (MI)
     Scott (GA)
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Visclosky
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu

                               NAYS--230

     Aderholt
     Akin
     Alexander
     Bachus
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Bean
     Beauprez
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boren
     Boustany
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole (OK)
     Conaway
     Cox

[[Page 17601]]


     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis (KY)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Everett
     Ferguson
     Fitzpatrick (PA)
     Flake
     Foley
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gilchrest
     Gillmor
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hall
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Issa
     Istook
     Jenkins
     Jindal
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kuhl (NY)
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McIntyre
     McKeon
     McMorris
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Otter
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Pombo
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (NJ)
     Smith (TX)
     Sodrel
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Velazquez
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Wynn
     Young (AK)
     Young (FL)

                             NOT VOTING--6

     Cramer
     Feeney
     Gibbons
     Owens
     Oxley
     Westmoreland

                              {time}  1753

  Messrs. WYNN, WELLER, and SHERWOOD changed their vote from ``yea'' to 
``nay.''
  Mr. RUSH changed his vote from ``nay'' to ``yea.''
  So the amendment in a nature of a substitute was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore (Mr. Hayes). 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 Mr. George Miller of California

  Mr. GEORGE MILLER of California. Mr. Speaker, I offer a motion to 
recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. GEORGE MILLER of California. I am, Mr. Speaker.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. George Miller of California moves to recommit the bill 
     H.R. 525 to the Committee on Education and the Workforce with 
     instructions to report the same back to the House forthwith 
     with the following amendments:

       Page 17, line 16, insert ``subsection (c) and'' before 
     ``section 514(d)''.
       Page 18, insert after line 6 the following:
       ``(c) Maintenance of State Laws Providing for Certain Forms 
     of Coverage .--Nothing in this part or section 514 shall be 
     construed to preclude the application of State law (as 
     defined in section 514(c)(1)) to an association health plan, 
     or any health insurance issuer offering health insurance 
     coverage in connection with the plan--
       ``(1) to the extent that such law requires coverage for the 
     expenses of--
       ``(A) pregnancy and childbirth, or
       ``(B) children's health services (including the application 
     of any such State law to the extent such law requires certain 
     numbers of child health supervision visits or requires 
     exemption of reasonable and customary charges for child 
     health supervision services from a deductible, copayment, or 
     other coinsurance or dollar limitation requirement),
       ``(2) to the extent that such law requires--
       ``(A) a minimum hospital stay for mastectomy,
       ``(B) coverage for reconstructive surgery following 
     mastectomies (in excess of coverage required under section 
     713), and
       ``(C) coverage for the expenses of screening and tests 
     recommended by a physician for breast cancer,
       ``(3) to the extent that such law requires--
       ``(A) coverage for medical treatments relating to cervical 
     cancer, and
       ``(B) coverage for the expenses of screening and tests 
     recommended by a physician for cervical cancer,
       ``(4) to the extent that such law requires--
       ``(A) the offering of, or coverage for, medical treatments 
     related to mental illness or substance abuse and other 
     services related to the treatment of mental illness or 
     substance abuse,
       ``(B) coverage for prescription medications associated with 
     the management of mental illness or substance abuse, or
       ``(C) education and self-management training services 
     relating to mental illness or substance abuse,
       ``(5) to the extent that such law requires--
       ``(A) coverage for medical treatments related to diabetes,
       ``(B) coverage for diabetes-specific supplies, including 
     blood glucose monitors, insulin pumps, insulin syringes, and 
     single-use medical supplies associated with the management of 
     diabetes,
       ``(C) coverage for prescription medications when prescribed 
     by a physician associated with the management of diabetes, 
     including insulin, or
       ``(D) diabetes education and self-management training 
     services, or
       ``(6) to the extent that such law imposes annual, lifetime, 
     or day and visit benefit minimums or limits copayments, 
     deductibles, or out-of-pocket or other coinsurance 
     requirements in connection with coverage, or items and 
     services, described in the preceding paragraphs of this 
     subsection.

  Mr. GEORGE MILLER of California (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 
gentleman from California?
  There was no objection.
  The SPEAKER pro tempore. The gentleman from California (Mr. George 
Miller) is recognized for 5 minutes in support of his motion to 
recommit.
  Mr. GEORGE MILLER of California. Mr. Speaker, I submit a motion to 
recommit along with my colleagues on the Committee on Education and the 
Workforce, the gentlewoman from New York (Mrs. McCarthy), the 
gentlewoman from California (Ms. Woolsey), and the gentlewoman from 
Minnesota (Ms. McCollum).
  This motion shows exactly what the issue is about. It is about the 
minimum standard of health care protection for all Americans, including 
those who work for small businesses.
  Mr. Speaker, all employees, including the employees of small 
employers, may need access to pregnancy, to well-child care, to cancer 
treatment, mental health treatment, or even diabetes treatment. We 
should not encourage insurers to offer bare-bones treatment that does 
not protect anyone.
  Everyone gets sick at some point in their lives, and everyone will 
need access to a meaningful package of benefits. That is why I am 
offering this motion to recommit.
  Mr. Speaker, I yield to the gentlewoman from New York (Mrs. 
McCarthy).
  Mrs. McCARTHY. Mr. Speaker, as we worked on this on the Committee on 
Education and the Workforce, we tried to put our thoughts into it. 
People have to understand, if the main bill is passed, health care for 
our small employers is not going to help the majority of those 
employees seeking coverage.
  The recommittal goes back to what the States have already done, 
mainly because in the beginning the insurance companies would not give 
health care to women that needed to have a mammogram or to have a pap 
smear to make sure they do not have cervical cancer.
  This House spends money constantly on cancer research, and here we 
are using a tool that we can prevent cancer and make sure that women 
are treated earlier. With this bill, the mainline bill is taking that 
away. I ask my colleagues, do not be fooled, stand up for your State. 
Stand up for the health care of your constituents. That is what our job 
is.
  Mr. GEORGE MILLER of California. Mr. Speaker, I yield to the 
gentlewoman from Minnesota (Ms. McCollum).
  Ms. McCOLLUM of Minnesota. Mr. Speaker, I rise to support the motion

[[Page 17602]]

to recommit because AHPs are awful health plans. AHPs roll back State 
benefit standards that protect women and children. They are awful for 
women; they are awful for children.
  Our motion protects Americans who have access to mental health 
benefits. It protects families' access to maternity care and well-baby 
checks.

                              {time}  1800

  Maternity coverage is critical for women. It should not be optional. 
Fortunately, many States require health plans to cover maternity care 
and well-baby checks for their children. The bottom line is healthy 
moms equal healthy children. Healthy children, valuing children's 
lives, should be a goal we all share.
  Children deserve a healthy start in life with regular visits to the 
doctor and necessary immunizations. Preventive care makes economic 
sense. It can prevent avoidable illness and reduce future health care 
costs.
  I encourage all Members to reject awful health plans and to support 
the motion to recommit.
  Mr. GEORGE MILLER of California. Mr. Speaker, I yield to the 
gentlewoman from California (Ms. Woolsey).
  Ms. WOOLSEY. Mr. Speaker, the preemption of State law that is allowed 
under H.R. 525 makes no sense. For example, 49 States guarantee that 
health insurance plans include mammograms, and for good reason. We know 
that if a woman has health insurance, the likelihood she will receive a 
mammogram is promising. We know that early detection increases a 
woman's chance of surviving breast cancer. No one knows this better 
than my constituents in Marin County, California, who suffer from the 
highest rates of breast cancer in the country. They deserve more 
protections from this deadly disease, not a rollback in coverage of the 
most basic screening tool we have, mammograms. They are looking to 
Congress to help more women get the services they need to catch this 
disease before it becomes fatal. Instead, today we are telling them 
that insurance companies are allowed to trump State law and decide what 
is best for their health.
  I am sure that all of the men and women here today want their wives, 
sisters, mothers, and daughters to have annual screenings as 
recommended by physicians. It is common sense. I urge each of my 
colleagues, support the women in your lives. Support the motion to 
recommit.
  Mr. GEORGE MILLER of California. Mr. Speaker, I would hope that 
people would support this motion to recommit. This is fundamental and 
basic. It is about whether or not people will have coverage that works 
for them when they or a member of their family becomes sick.
  CBO has looked at this legislation three times, and three times they 
have determined that almost 8 million people who today have health care 
coverage that is good coverage, they will be stripped of that coverage 
and put into these AHPs. In fact, they expect that 90 percent of the 
new enrollees will be people who come out of better plans who will lose 
that coverage that people have fought hard for in almost every State in 
this Union, to have those kinds of health care protections that our 
three colleagues just spoke about in support of this motion to 
recommit.
  I would urge the House to support the motion to recommit and reject 
this legislation that is harmful to the health care coverage of 
millions of Americans and their families.
  Mr. BOEHNER. Mr. Speaker, I rise in opposition to the gentleman's 
motion.
  The SPEAKER pro tempore (Mr. Hayes). The gentleman is recognized for 
5 minutes.
  Mr. BOEHNER. Mr. Speaker, the most coveted health insurance available 
to Americans is offered by big companies and unions. All we are trying 
to do in the underlying bill is to give small employers the same 
opportunity to provide high-quality health insurance to their employees 
at competitive prices.
  The motion to recommit would require every AHP to cover every mandate 
known to man, driving up the cost of those policies and making sure 
that no new employees would ever be covered by an AHP. There are 45 
million Americans with no health insurance. While this will not cover 
all 45 million Americans, it will help some Americans who have no 
access to health insurance today have access to high-quality, 
competitively priced health insurance. You can have all the mandates in 
the world; but if you do not have health insurance, you get no coverage 
at all. No doctors' visits. No nothing. It is a bad motion. Support the 
underlying bill.
  Mr. Speaker, I yield back the balance of my time.
  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.
  Mr. GEORGE MILLER of California. Mr. Speaker, on that I demand the 
yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule 
XX, this 15-minute vote on the motion to recommit will be followed by 
5-minute votes on passage of H.R. 525, if ordered, and suspending the 
rules on H.R. 2894.
  The vote was taken by electronic device, and there were--yeas 198, 
nays 230, not voting 5, as follows:

                             [Roll No. 425]

                               YEAS--198

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boren
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Case
     Chandler
     Clay
     Cleaver
     Clyburn
     Conyers
     Cooper
     Costa
     Costello
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doyle
     Edwards
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Harman
     Hastings (FL)
     Herseth
     Higgins
     Hinchey
     Hinojosa
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     Kucinich
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren, Zoe
     Lowey
     Lynch
     Maloney
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Melancon
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Schwartz (PA)
     Scott (GA)
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Visclosky
     Wasserman Schultz
     Waters
     Watson
     Watt
     Weiner
     Wexler
     Woolsey
     Wu

                               NAYS--230

     Aderholt
     Akin
     Alexander
     Bachus
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boustany
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole (OK)
     Conaway
     Cox
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis (KY)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Evans
     Everett
     Ferguson
     Fitzpatrick (PA)

[[Page 17603]]


     Flake
     Foley
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gilchrest
     Gillmor
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hall
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Issa
     Istook
     Jenkins
     Jindal
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kuhl (NY)
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Otter
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Pombo
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schwarz (MI)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (NJ)
     Smith (TX)
     Sodrel
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Velazquez
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Wynn
     Young (AK)
     Young (FL)

                             NOT VOTING--5

     Cramer
     Feeney
     Gibbons
     Oxley
     Waxman


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Hayes) (during the vote). Members are 
advised there are 2 minutes remaining in this vote.

                              {time}  1821

  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. ANDREWS. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 263, 
nays 165, not voting 5, as follows:

                             [Roll No. 426]

                               YEAS--263

     Aderholt
     Akin
     Alexander
     Bachus
     Baird
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Bean
     Beauprez
     Biggert
     Bilirakis
     Bishop (GA)
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boren
     Boustany
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Case
     Castle
     Chabot
     Chocola
     Coble
     Cole (OK)
     Conaway
     Cooper
     Costello
     Cox
     Crenshaw
     Cubin
     Cuellar
     Culberson
     Cunningham
     Davis (AL)
     Davis (KY)
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Edwards
     Ehlers
     Emerson
     English (PA)
     Everett
     Ferguson
     Fitzpatrick (PA)
     Flake
     Foley
     Forbes
     Ford
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gilchrest
     Gillmor
     Gingrey
     Gohmert
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hall
     Harman
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Herseth
     Hobson
     Hoekstra
     Hostettler
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Israel
     Issa
     Istook
     Jackson-Lee (TX)
     Jenkins
     Jindal
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kuhl (NY)
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Marshall
     Matheson
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McIntyre
     McKeon
     McMorris
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Mollohan
     Moran (KS)
     Moran (VA)
     Murphy
     Musgrave
     Myrick
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Ortiz
     Osborne
     Otter
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Pombo
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Rahall
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Royce
     Ryan (WI)
     Ryun (KS)
     Salazar
     Sanchez, Loretta
     Saxton
     Schwarz (MI)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skelton
     Smith (NJ)
     Smith (TX)
     Snyder
     Sodrel
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (MS)
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Velazquez
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Wynn
     Young (AK)
     Young (FL)

                               NAYS--165

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baldwin
     Barrow
     Becerra
     Berkley
     Berman
     Berry
     Bishop (NY)
     Blumenauer
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Chandler
     Clay
     Cleaver
     Clyburn
     Conyers
     Costa
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doyle
     Emanuel
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Frank (MA)
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hastings (FL)
     Higgins
     Hinchey
     Hinojosa
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Jackson (IL)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     Kucinich
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lofgren, Zoe
     Lowey
     Lynch
     Maloney
     Markey
     Matsui
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Melancon
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Moore (KS)
     Moore (WI)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rangel
     Reyes
     Ross
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanders
     Schakowsky
     Schiff
     Schwartz (PA)
     Scott (GA)
     Scott (VA)
     Serrano
     Sherman
     Slaughter
     Smith (WA)
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Tauscher
     Thompson (CA)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Visclosky
     Wasserman Schultz
     Waters
     Watson
     Watt
     Weiner
     Wexler
     Woolsey
     Wu

                             NOT VOTING--5

     Cramer
     Feeney
     Gibbons
     Oxley
     Waxman


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised there 
are 2 minutes remaining in this vote.

                              {time}  1834

  Ms. MILLENDER-McDONALD changed her vote from ``yea'' to ``nay.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________