[Congressional Record (Bound Edition), Volume 152 (2006), Part 6]
[Senate]
[Pages 7624-7662]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 3874. Mr. KENNEDY submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       In section 2932(b)(2) of the Public Health Service Act (as 
     added by section 301 of the bill), strike the second 
     sentence.
                                 ______
                                 
  SA 3875. Mr. KENNEDY submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       In section 103 of the bill, strike subsection (b).
                                 ______
                                 
  SA 3876. Mr. KENNEDY submitted an amendment intended to be proposed 
by

[[Page 7625]]

him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       In section 802 of the Employee Retirement Incomes Security 
     Act of 1974 (as added by section 101(a) of the bill) strike 
     subsection (d).
       In section 103 of the bill, strike subsection (b).
                                 ______
                                 
  SA 3877. Mr. KENNEDY submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       In section 802 of the Employee Retirement Incomes Security 
     Act of 1974 (as added by section 101(a) of the bill) strike 
     subsection (d)(2).
       Strike sections 2914, 2924, and 2934 of the Public Health 
     Service Act (as added by sections 201 and 301 of the bill).
                                 ______
                                 
  SA 3878. Mr. KENNEDY submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       In section 802 of the Employee Retirement Incomes Security 
     Act of 1974 (as added by section 101(a) of the bill) strike 
     subsection (d).
                                 ______
                                 
  SA 3879. Mr. KENNEDY submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       Strike sections 2912(b), 2913, 2914, 2923, 2924, 2933, and 
     2934 of the Public Health Service Act (as added by section 
     201 and amended by section 301 of the bill).
       At the appropriate place in title XXIX of the Public Health 
     Service Act (as added by section 201 and amended by section 
     301 of the bill), insert the following:

     ``SEC. 29__. PRESERVING STATE AUTHORITY OVER HEALTH 
                   INSURANCE.

       ``(a) Federal Rating Rules.--
       ``(1) State option to accept or reject.--A State may elect 
     to adopt or reject the Model Small Group Rating Rules or the 
     Transitional Small Group Rating Rules promulgated under 
     section 2911(a).
       ``(2) No federal preemption for non-adopting states.--In 
     the case of any State that elects not to adopt the Model 
     Small Group Rating Rules or the Transitional Small Group 
     Rating Rules promulgated under section 2911(a), no provision 
     of this Act shall be construed to--
       ``(A) preempt or supersede any law of such State; or
       ``(B) limit the ability of such State to enforce any State 
     law with respect to health insurance coverage.
       ``(b)  Federal Benefit Choice Standards.--
       ``(1) State option to accept or reject.--A State may elect 
     to adopt or reject the Benefit Choice Standards promulgated 
     under section 2922(a).
       ``(2) No federal preemption for non-adopting states.--In 
     the case of any State that elects not to adopt the Benefit 
     Choice Standards promulgated under section 2922(a), no 
     provision of this Act shall be construed to--
       ``(A) preempt or supersede any law of such State; or
       ``(B) limit the ability of such State to enforce any State 
     law with respect to health insurance coverage.
       ``(c) Federal Harmonization Standards.--
       ``(1) State option to accept or reject.--A State may elect 
     to adopt or reject the harmonized standards certified by the 
     Secretary under section 2932(d).
       ``(2) No federal preemption for non-adopting states.--In 
     the case of any State that elects not to adopt the harmonized 
     standards certified by the Secretary under section 2932(d), 
     no provision of this Act shall be construed to--
       ``(A) preempt or supersede any law of such State; or
       ``(B) limit the ability of such State to enforce any State 
     law with respect to health insurance coverage.
                                 ______
                                 
  SA 3880. Mr. KENNEDY submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. LIMITATION ON APPLICATION OF CERTAIN PROVISIONS.

       Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), any provision of this Act (or 
     amendment) that has the effect of--
       (1) increasing premiums for health insurance coverage for 
     individuals with diabetes;
       (2) permitting a health insurance issuer to deny coverage 
     for medical items or services needed to treat, mitigate, or 
     cure diabetes; or
       (3) limiting the ability of a State to enforce State laws 
     that prohibit premium increases or denials of coverage 
     described in paragraphs (1) or (2);

     shall not apply and shall not be enforced.
                                 ______
                                 
  SA 3881. Mr. KENNEDY submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. LIMITATION ON PARTICIPATION.

       Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), participation in small business 
     health plans shall be limited to small employers (as defined 
     for purposes of part 8 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974 (as added by 
     section 101(a)).
                                 ______
                                 
  SA 3882. Mr. KENNEDY submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. MODIFICATION OF REFERENCE TO NAIC MODEL RULES.

       Wherever in this Act (or an amendment made by this Act) 
     there is a reference to the ``Adopted Small Employer Health 
     Insurance Availability Model Act of 1993 of the National 
     Association of Insurance Commissioners'' such reference shall 
     be deemed to be the ``Adopted Small Employer Health Insurance 
     Availability Model Act of 2000 of the National Association of 
     Insurance Commissioners''.
                                 ______
                                 
  SA 3883. Mr. VITTER (for himself and Mr. Graham) submitted an 
amendment intended to be proposed by him to the bill S. 1955, to amend 
title I of the Employee Retirement Security Act of 1974 and the Public 
Health Service Act to expand health care access and reduce costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; which was ordered to 
lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. GAO STUDY CONCERNING BENEFITS MANDATES.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, the Government Accountability Office 
     shall complete a study, and submit to the Committee on 
     Health, Education, Labor, and Pensions of the Senate, a 
     report concerning certain health insurance benefits and 
     services that are mandated by State laws and covered under 
     small business health plans under this Act.
       (b) Purpose.--The purpose of the study under subsection (a) 
     shall be to compare benefits and services covered by small 
     business health plans under this Act with benefits and 
     services that are mandated by State laws.
       (c) Benefits To Be Studied.--For the purposes of this 
     section, the benefits to be studies under the study under 
     subsection (a) shall include--

[[Page 7626]]

       (1) chiropractic coverage;
       (2) mammography services;
       (3) minimum hospital stays;
       (4) secondary consultations for women who undergo 
     mastectomies and lymph node dissections for breast cancer;
       (5) bone density screenings;
       (6) cervical cancer screenings;
       (7) maternity care;
       (8) well-baby care;
       (9) immunizations;
       (10) autism treatments and services;
       (11) obesity coverage; and
       (12) diabetes coverage.
       (d) Other Study Areas.--In conducting the study and 
     submitting the report under subsection (a), the Government 
     Accountability Office shall--
       (1) consider the total number of small business health 
     plans approved pursuant to this Act;
       (2) include a summary of the 5 largest small business 
     health plans, measured by the number of enrollees, which 
     shall, with respect to each such plan, include--
       (A) a list of all benefits covered;
       (B) a list of States with residents covered under such 
     plan; and
       (C) a comparison of benefits covered under such plan with 
     benefits mandated by the insurance laws of each State in 
     which the plan is offered;
       (3) for each of the benefits described in subsection (c), 
     contain a list of the States that mandate such coverage; and
       (4) for each of the benefits described in subsection (c), 
     contain a description of the total number of small business 
     health plans offering such benefit.
                                 ______
                                 
  SA 3884. Mr. VITTER submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. COUNTERFEIT-RESISTANT TECHNOLOGIES FOR PRESCRIPTION 
                   DRUGS.

       (a) Required Technologies.--The Secretary of Health and 
     Human Services shall require that the packaging of any 
     prescription drug incorporate--
       (1) radio frequency identification (RFID) tagging 
     technology, or similar trace and track technologies that have 
     an equivalent function;
       (2) tamper-indicating technologies; and
       (3) blister security packaging when possible.
       (b) Use of Technologies.--
       (1) Authorized uses.--The Secretary shall require that 
     technologies described in subsection (a)(1) be used 
     exclusively to authenticate the pedigree of prescription 
     drugs, including by--
       (A) implementing inventory control;
       (B) tracking and tracing prescription drugs;
       (C) verifying shipment or receipt of prescription drugs;
       (D) authenticating finished prescription drugs; and
       (E) electronically authenticating the pedigree of 
     prescription drugs.
       (2) Privacy protection.--The Secretary shall prohibit 
     technologies required by subsection (a)(1) from containing or 
     transmitting any information that may be used to identify a 
     health care practitioner or the prescription drug consumer.
       (3) Prohibition against advertising.--The Secretary shall 
     prohibit technologies required by subsection (a)(1) from 
     containing or transmitting any advertisement or information 
     about prescription drug indications or off-label prescription 
     drug uses.
       (c) Recommended Technologies.--The Secretary shall 
     encourage the manufacturers and distributors of prescription 
     drugs to incorporate into the packaging of such drugs, in 
     addition to the technologies required under subsection (a), 
     overt optically variable counterfeit-resistant technologies 
     that--
       (1) are visible to the naked eye, providing for visual 
     identification of prescription drug authenticity without the 
     need for readers, microscopes, lighting devices, or scanners;
       (2) are similar to technologies used by the Bureau of 
     Engraving and Printing to secure United States currency;
       (3) are manufactured and distributed in a highly secure, 
     tightly controlled environment; and
       (4) incorporate additional layers of non-visible covert 
     security features up to and including forensic capability.
       (d) Standards for Packaging.--
       (1) Multiple elements.--For the purpose of making it more 
     difficult to counterfeit the packaging of prescription drugs, 
     the Secretary shall require manufacturers of prescription 
     drugs to incorporate the technologies described in paragraphs 
     (1), (2), and (3) of subsection (a), and shall encourage 
     manufacturers and distributors of prescription drugs to 
     incorporate the technologies described in subsection (c), 
     into multiple elements of the physical packaging of the 
     drugs, including--
       (A) blister packs, shrink wrap, package labels, package 
     seals, bottles, and boxes; and
       (B) at the item level.
       (2) Labeling of shipping container.--Shipments of 
     prescription drugs shall include a label on the shipping 
     container that incorporates the technologies described in 
     subsection (a)(1), so that members of the supply chain 
     inspecting the packages will be able to determine the 
     authenticity of the shipment. Chain of custody procedures 
     shall apply to such labels and shall include procedures 
     applicable to contractual agreements for the use and 
     distribution of the labels, methods to audit the use of the 
     labels, and database access for the relevant governmental 
     agencies for audit or verification of the use and 
     distribution of the labels.
       (e) Penalty.--A prescription drug is deemed to be 
     misbranded for purposes of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 301 et seq.) if the packaging or 
     labeling of the drug is in violation of a requirement or 
     prohibition applicable to the drug under subsection (a), (b), 
     or (d).
       (f) Transitional Provisions; Effective Dates.--
       (1) National specified list of susceptible prescription 
     drugs.--
       (A) Initial publication.--Not later than 180 days after the 
     date of the enactment of this Act, the Secretary of Health 
     and Human Services shall publish in the Federal Register a 
     list, to be known as the National Specified List of 
     Susceptible Prescription Drugs, consisting of not less than 
     30 of the prescription drugs that are most frequently subject 
     to counterfeiting in the United States (as determined by the 
     Secretary).
       (B) Revision.--Not less than annually through the end of 
     calendar year 2009, the Secretary shall review and, as 
     appropriate, revise the National Specified List of 
     Susceptible Prescription Drugs. The Secretary may not revise 
     the List to include fewer than 30 prescription drugs.
       (2) Effective dates.--The Secretary shall implement the 
     requirements and prohibitions of subsections (a), (b), and 
     (d)--
       (A) with respect to prescription drugs on the National 
     Specified List of Susceptible Prescription Drugs, beginning 
     not later than the earlier of--
       (i) 1 year after the initial publication of such List; or
       (ii) December 31, 2007; and
       (B) with respect to all prescription drugs, beginning not 
     later than December 31, 2010.
       (3) Authorized uses during transitional period.--In lieu of 
     the requirements specified in subsection (b)(1), for the 
     period beginning on the effective date applicable under 
     paragraph (2)(A) and ending on the commencement of the 
     effective date applicable under paragraph (2)(B), the 
     Secretary shall require that technologies described in 
     subsection (a)(1) be used exclusively to verify the 
     authenticity of prescription drugs.
       (g) Definitions.--In this Act:
       (1) The term ``pedigree''--
       (A) means the history of each prior sale, purchase, or 
     trade of the prescription drug involved to a distributor or 
     retailer of the drug (including the date of the transaction 
     and the names and addresses of all parties to the 
     transaction); and
       (B) excludes information about the sale, purchase, or trade 
     of the drug to the drug consumer.
       (2) The term ``prescription drug'' means a drug subject to 
     section 503(b)(1) of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 353(b)(1)).
       (3) The term ``Secretary'' means the Secretary of Health 
     and Human Services.
                                 ______
                                 
  SA 3885. Mr. BROWNBACK submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

                        TITLE __--HEALTH RECORDS

     SEC. __01. SHORT TITLE.

       This title may be cited as the ``Independent Health Record 
     Bank Act of 2006''.

     SEC. __02. PURPOSES.

       It is the purpose of this title to provide for the 
     establishment of a nationwide health information technology 
     network to--
       (1) improve healthcare quality, reduce medical errors, 
     increase the efficiency of care, and advance the delivery of 
     appropriate, evidence-based healthcare services;
       (2) promotes the wellness, disease prevention, and 
     management of chronic illnesses by increasing the 
     availability and transparency of information related to the 
     healthcare needs of an individual;
       (3) ensure that appropriate information necessary to make 
     medical decisions is available in a usable form at the time 
     and in the location that the medical service involved is 
     provided;
       (4) produces greater value for healthcare expenditures by 
     reducing healthcare costs

[[Page 7627]]

     that result from inefficiency, medical errors, inappropriate 
     care, and incomplete information;
       (5) promotes a more effective marketplace, greater 
     competition, greater systems analysis, increased choice, 
     enhanced quality, and improved outcomes in healthcare 
     services;
       (6) improve the coordination of information and the 
     provision of such services through an effective 
     infrastructure for the secure and authorized exchange and use 
     of healthcare information; and
       (7) ensure that the confidentiality of individually 
     identifiable health information of a patient is secure and 
     protected.

     SEC. __03. DEFINITIONS.

       In this title:
       (1) Account.--The term ``account'' means an electronic 
     health record of an individual contained in an independent 
     health record bank.
       (2) Electronic health record.--The term ``electronic health 
     record'' means a longitudinal collection of personal health 
     information concerning a single individual, entered or 
     accepted by healthcare providers, and stored electronically.
       (3) Healthcare entity.--The term ``healthcare entity'' 
     includes healthcare consumers, providers, and payers, 
     government agencies, pharmaceutical companies, laboratories, 
     and research institutes.
       (4) HIPAA.--The term ``HIPAA'' means the regulations under 
     section 264(c) of the Health Insurance Portability and 
     Accountability Act of 1996 (42 U.S.C. 1320d-2 note).
       (5) Individually identifiable health information.--The term 
     ``individually identifiable health information'' has the 
     meaning given such term in section 1171(6) of the Social 
     Security Act (42 U.S.C. 1320d(6)).
       (6) Nonidentifiable health information.--The term 
     ``nonidentifiable health information'' means any list, 
     description or other grouping of consumer information 
     (including publicly available information pertaining to them) 
     that is derived without using personally identifiable 
     information that is not publicly available.
       (7) Partially identifiable health information.--The term 
     ``partially identifiable health information'' means any list, 
     description, or other grouping of consumer information (and 
     publicly available information pertaining to them) derived 
     using any personally identifiable information that is not 
     publicly available.
       (8) Protected health information.--The term ``protected 
     health information'' shall have the meaning given such term 
     for purposes of HIPAA.
       (9) Secretary.--The term ``Secretary'' means the Secretary 
     of Commerce.

     SEC. __04. INDEPENDENT HEALTH RECORD BANKS.

       (a) Purpose.--It is the purpose of this section to provide 
     for the establishment of independent health record banks to 
     achieve a savings of money and lives in the healthcare system 
     through--
       (1) the creation and storage of lifetime individual 
     electronic health records for individuals that may contain 
     health plan and debit card functionality and that serves the 
     interests of all healthcare entities;
       (2) the utilization of technological infrastructure with 
     the goal of connecting health records to build a national 
     health information network;
       (3) the provision of health information data sets, within 
     distinct authorization boundaries, based on usage needs, 
     including--
       (A) the sale of approved data for research and other 
     consumer purposes as provided for under section __06(b);
       (B) the provision of data for emergency healthcare as 
     provided for under section __06(c); and
       (C) the provision of data for all other healthcare needs 
     determined appropriate by the Secretary (in accordance with 
     the protections provided for under section __06);
       (4) the offering of incentives to employers that face 
     rising employee health costs, to encourage employee 
     participation in independent health record banks; and
       (5) the creation of a source of tax-free income to support 
     the operations of the independent health record banks, and, 
     through revenue sharing, to provide incentives to independent 
     health record bank account holders, healthcare providers, and 
     fee payers to contribute health information.
       (b) Establishment.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall prescribe 
     standards for the establishment and certification of 
     independent health record banks to carry out the purposes 
     described in subsection (a).
       (2) Requirement of non-profit entity.--The standards under 
     paragraph (1) shall permit a non-profit entity to establish 
     an independent health record bank as a cooperative entity 
     that operates for the benefit and in the interests of the 
     membership of the bank as a whole. Such bank shall be owned 
     and controlled by its members.
       (3) For-profit entities.--A for-profit entity may not 
     participate in the establishment and operation of an 
     independent health record bank, except to the extent that 
     such entity is by contract employed to assist in carrying out 
     the operations of the bank.
       (4) Treatment as covered entity for purposes of hipaa.--To 
     the extent that an independent health record bank (or 
     associated vendor) is engaged in transmitting protected 
     health information, the bank shall be considered to be a 
     covered entity for purposes of HIPAA with respect to such 
     information.
       (c) Membership.--
       (1) In general.--To be eligible to be a member of an 
     independent health record bank, an individual shall obtain or 
     have obtained a product or service from a covered entity that 
     is to be used primarily for personal, family, or household 
     purposes, or that individual's legal representative.
       (2) No limitation on membership.--Nothing in this 
     subsection shall be construed to permit an independent health 
     record bank to restrict membership.
       (d) Rights Relating to Information in the Bank.--
       (1) Individual consumers.--
       (A) General right.--An individual who has a health record 
     contained in an independent health record bank shall maintain 
     ownership over the entire health record and shall have the 
     right to review the contents of the record in its entirety at 
     any time during the normal business operating hours of the 
     bank.
       (B) Additional information and limitation.--An individual 
     described in subparagraph (A) may add personal health 
     information to the health record of that individual, except 
     that such individual shall not alter or falsify information 
     that is entered into the health record by another healthcare 
     entity. Such an individual shall have the right to propose an 
     amendment to such information pursuant to standards 
     prescribed by the Secretary relating to the correction of 
     information contained in a health record.
       (2) Other healthcare entities.--A healthcare entity (other 
     than an individual) shall serve as the custodian of only that 
     information that has been added by such entity to the health 
     record of an individual that is maintained by an independent 
     health record bank. Such entity may be permitted to have 
     access to other specified information contained in such 
     health record (including the entire record if appropriate) if 
     such access is granted by the independent health record bank 
     and the individual involved (pursuant to standards prescribed 
     by the Secretary relating to access to information).
       (e) Financing of Activities.--
       (1) In general.--An independent health record bank may 
     generate revenue to pay for the operations of the bank 
     through--
       (A) charging healthcare entities, including individual 
     account holders, account fees for use of the bank;
       (B) the sale of nonidentifiable and partially identifiable 
     health information contained in the bank for research 
     purposes (as provided for in section __06(b)); and
       (C) the conduct of any other activities determined 
     appropriate by the Secretary.
       (2) Sharing of revenue.--Revenue derived under paragraph 
     (1)(B) shall be shared with independent health record bank 
     account holders, and may be shared with healthcare providers 
     and payers, in accordance with this title.
       (3) Treatment of income.--For purposes of the Internal 
     Revenue Code of 1986, any revenue described in this 
     subsection shall not be included in gross income of any 
     independent health record bank, independent health record 
     bank account holder, healthcare provider, or payer described 
     in this subsection.

     SEC. __05. HEALTHCARE CLEARINGHOUSE ACTIVITIES.

       (a) Application of Section.--This section shall apply to an 
     independent health record bank (and associated vendors) with 
     respect to activities undertaken by such bank in operating as 
     a health care clearinghouse (as such term is defined in 
     section 1171(2) of the Social Security Act (42 U.S.C. 
     1329d(2)).
       (b) Accreditation.--
       (1) In general.--To be eligible to carry out clearinghouse 
     activities under this section, an independent health record 
     bank (and associated vendors performing clearinghouse 
     functions) shall be accredited by a national standards 
     development organization, utilizing the criteria described in 
     paragraph (2), that is properly authenticated and registered 
     with the Attorney General and the Federal Trade Commission 
     pursuant to the provisions of the National Cooperation 
     Research and Production Act of 1993 (15 U.S.C. 4301 et seq.).
       (2) Criteria.--The criteria to be used by a national 
     standards development organization in the accreditation of an 
     independent health record bank under this section shall be 
     designed to measure the competency, assets, practices, and 
     procedures of the bank for purposes of conducting 
     clearinghouse activities. Such criteria shall include--
       (A) the technical capacity and electronic facilities of the 
     bank for the receipt, transmission, and handling of 
     electronic health information transactions;
       (B) the ability of the bank to process transactions to 
     which HIPAA applies;
       (C) the backup and disaster recovery plans and capacity of 
     the bank;
       (D) the privacy practices, procedures, and employee 
     training programs of the bank consistent with HIPAA; and
       (E) the security practices, procedures, and employee 
     training programs of the bank consistent with HIPAA, 
     including compliance

[[Page 7628]]

     with the HIPAA security rule that protected health 
     information must only be viewable by the intended recipient.
       (3) Existing clearinghouses.--An independent health record 
     bank operated by an entity that has been certified under part 
     C of title XI of the Social Security Act (42 U.S.C. 1320d et 
     seq.) as a health care clearinghouse prior to the date of 
     enactment of this Act shall be considered to be accredited 
     for purposes of paragraph (1).
       (c) Information Requirement.--An independent health record 
     bank acting as a health care clearinghouse under this section 
     shall ensure that reporting services are provided to 
     individual consumers in a manner that includes the provision 
     of lists of individuals or organizations that have accessed 
     the health record account of the consumer or to whom health 
     information disclosures concerning the consumer have been 
     made in accordance with the requirements of HIPAA.

     SEC. __06. AVAILABILITY AND USE OF HEALTHCARE INFORMATION IN 
                   BANK.

       (a) General Rule.--Except as provided in this section, 
     access to specified sections of, or an entire, electronic 
     health record maintained by an independent health record bank 
     concerning an individual shall only be provided with the 
     prior authorization of the individual involved, as 
     authenticated as provided for under the standards prescribed 
     by the Secretary under section __08.
       (b) Availability of Data for Research and Other 
     Activities.--An independent health record bank may sell 
     nonidentifiable and partially identifiable health information 
     concerning and individual only if--
       (1) the bank and the individual involved agree to the sale;
       (2) the agreement provided for under paragraph (1) includes 
     parameters with respect to the disclosure of information 
     involved and a process for the authorization of the further 
     disclosure of partially identifiable health information;
       (3) the data involved is to be used for research or other 
     activities only as provided for in the agreement under 
     paragraph (1);
       (4) the data involved does not identify the individual who 
     is the subject of the data;
       (5) the revenue to be derived from the sale of the data is 
     collected by the bank and equally divided between the bank 
     and the individual involved, except that revenue may also be 
     distributed to healthcare providers and payers as incentives 
     to contribute additional data to the bank; and
       (6) the transaction otherwise meets the requirements and 
     standards prescribed by the Secretary.
       (c) Availability of Data for Emergency Healthcare.--
       (1) Findings.--Congress finds that--
       (A) given the size and nature of visits to emergency 
     departments in the United States, readily available health 
     data could make the difference between life and death; and
       (B) due to the case mix and volume of patients treated, 
     emergency departments are well positioned to provide data for 
     public health surveillance, community risk assessment, 
     research, education, training, quality improvement, and other 
     uses.
       (2) Use of data.--An independent health record bank may 
     permit healthcare providers to access, during an emergency 
     department visit, a limited, authenticated data set 
     concerning an individual for emergency response purposes 
     without the prior consent of the individual. Such limited 
     data may include--
       (A) patient identification data, as determined appropriate 
     by the individual involved;
       (B) provider identification that includes the use of a 
     unique provider identifiers as provided for in section 1173 
     of the Social Security Act (42 U.S.C. 1320d-2);
       (C) payment data;
       (D) arrival and first assessment data;
       (E) data related to the individual's vitals, allergies, and 
     medication history;
       (F) data related to existing chronic problems and active 
     clinical conditions of the individual; and
       (G) data concerning physical examinations, procedures, 
     results, and diagnosis data relating to the visit.
       (d) Effect on HIPAA.--Nothing in this title shall be 
     construed to affect the scope, substance, or applicability of 
     the part C of title XI of the Social Security Act (42 U.S.C. 
     1320d et seq.) or HIPAA as such relates to individually 
     identifiable health information maintained in an independent 
     health record bank.

     SEC. __07. APPLICATION OF FEDERAL AND STATE SECURITY AND 
                   CONFIDENTIALITY STANDARDS.

       (a) In General.--Existing Federal security and 
     confidentiality standards and State security and 
     confidentiality laws shall apply to this title (and the 
     amendments made by this title) until such time as Congress 
     acts to amend such standards.
       (b) Provision of Information and Informational Provision.--
       (1) Designation of agency.--Each State with an independent 
     health records bank operating in the State shall designate a 
     State agency to be responsible for addressing complaints by 
     residents of the State with respect to health records 
     contained in the bank.
       (2) Provision of information.--An independent health record 
     bank operating in a State shall provide the State authority 
     designated under paragraph (1) with an informational filing 
     that describes the policies of the bank, the types of 
     information sold by the bank, and other relevant information 
     determined appropriate by such authority.
       (3) Information.--An individual who has a health record 
     maintained by an independent health record bank shall direct 
     any concerns, problems, or questions related to such record 
     directly to the appropriate State authority.
       (c) Definitions.--For purposes of this section:
       (1) State security and confidentiality laws.--The term 
     ``State security and confidentiality laws'' means State laws 
     and regulations relating to the privacy and confidentiality 
     of individually identifiable health information or to the 
     security of such information.
       (2) Current federal security and confidentiality 
     standards.--The term ``current Federal security and 
     confidentiality standards'' means the Federal privacy 
     standards established pursuant to section 264(c) of the 
     Health Insurance Portability and Accountability Act of 1996 
     (42 U.S.C. 1320d-2 note) and security standards established 
     under section 1173(d) of the Social Security Act.
       (3) State.--The term ``State'' has the meaning given such 
     term when used in title XI of the Social Security Act, as 
     provided under section 1101(a) of such Act (42 U.S.C. 
     1301(a)).

     SEC. __08. REGULATORY OVERSIGHT.

       (a) In General.--In carrying out this title, the Secretary, 
     acting through the Under Secretary for Technology or other 
     appropriate official, shall--
       (1) develop a program to certify entities to operate 
     independent health record banks;
       (2) provide assistance to encourage the growth of 
     independent health record banks;
       (3) track economic progress as it pertains to independent 
     health records bank operators and individuals receiving non-
     taxable income with respect to accounts;
       (4) conduct public education activities regarding the 
     creation and usage of the independent health records banks;
       (5) establish an interagency council under subsection (b) 
     to develop standards for Federal security auditing for 
     entities operating independent health record banks; and
       (6) carry out any other activities determined appropriate 
     by the Secretary.
       (b) Interagency Council for Security Auditing.--
       (1) In general.--The Secretary, in consultation with the 
     Secretary of Health and Human Services and other appropriate 
     Federal officials, shall establish an interagency council to 
     develop standards for Federal security auditing as it relates 
     to data security, authentication, and authorization 
     recommendations, and reviews of independent health record 
     banks.
       (2) Duties.--The interagency council established under 
     paragraph (1) shall take into consideration the following 
     factors when developing recommendations for security, 
     authentication, and authorization of data in independent 
     health record banks:
       (A) The number and type of factors used for the exchange of 
     protected health information.
       (B) Requiring that individuals, who have health records 
     that are maintained by the bank, be notified of a security 
     breech with respect to such records, and any corrective 
     action taken on behalf of the individual.
       (C) Requiring that information sent to, or received from, 
     an independent health record bank that has been designated as 
     high-risk should be authenticated through the use of methods 
     such as the periodic changing of passwords, the use of 
     biometrics, the use of tokens or other technology as 
     determined appropriate by the council.
       (D) Recommendations for entities operating independent 
     health record banks, including requiring analysis of the 
     potential risk of health transaction security breeches based 
     on set criteria.
       (E) The conduct of audits of independent health record 
     banks to ensure that they are in compliance with the 
     requirements and standards established under this title.
       (3) Compliance report.--The interagency council established 
     under this subsection shall annually submit to the Secretary 
     a report on compliance by independent health record banks 
     with the requirements and standard under this title. Such 
     report shall be included in the report required under 
     subsection (d).
       (c) Interagency Memorandum of Understanding.--The Secretary 
     and the Secretary of Health and Human Services, and other 
     Federal officials that may be impacted by this title, shall 
     ensure, through the execution of an interagency memorandum of 
     understanding among such Secretaries, that--
       (1) regulations, rulings, and interpretations issued by 
     such Secretaries or officials relating to the same matter 
     over which 2 or more such Secretaries or officials have 
     responsibility under this title are administered so as to 
     have the same effect at all times; and
       (2) coordination of policies relating to enforcing the same 
     requirements through such Secretaries or officials in order 
     to have coordinated enforcement strategy that avoids

[[Page 7629]]

     duplication of enforcement efforts and assigns priorities in 
     enforcement.
       (d) Annual Report.--Not later than 1 year after the date of 
     enactment of this Act, and annually thereafter, the 
     Secretary, acting through the Under Secretary for Technology, 
     shall submit to Committee on Health, Education, Labor, and 
     Pensions and the Committee on Finance of the Senate and the 
     Committee on Energy and Commerce and the Committee on Ways 
     and Means of the House of Representatives, a report that--
       (1) describes individual owner or institution operator 
     economic progress as achieved through independent health 
     record bank usage and existing barriers to such usage;
       (2) describes progress in security auditing as provided for 
     by the interagency security council under subsection (b); and
       (3) contains information on the other core responsibilities 
     of the Secretary as described in subsection (a).

     SEC. __09. PENALTIES FOR FRAUD AND ABUSE.

       The penalties provided for in section 1177(b) of the Social 
     Security Act (42 U.S.C. 1320d-6) shall apply to the wrongful 
     disclosure of information collected, maintained, or made 
     available by an independent health record bank under this 
     title, including disclosures by any employees or associates 
     of any such bank or other healthcare entity using or 
     disclosing such information.

     SEC. __10. TAX CREDIT FOR EMPLOYER-PROVIDED EMPLOYEE 
                   INDEPENDENT HEALTH RECORD BANK ACCOUNT FEES.

       (a) Allowance of Credit.--Subpart D of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 (relating to business related credits) is amended by 
     adding at the end the following new section:

     ``SEC. 45N. EMPLOYER-PROVIDED EMPLOYEE INDEPENDENT HEALTH 
                   RECORD BANK ACCOUNT FEES.

       ``(a) Determination of Amount.--For purposes of section 38, 
     the independent health record bank account investment credit 
     determined under this section with respect to any taxpayer 
     for any taxable year is an amount equal to the independent 
     health record bank account investment provided by such 
     taxpayer during the taxable year.
       ``(b) Independent Health Record Bank Account Investment.--
     For purposes of this section, the term `independent health 
     record bank account investment' means, with respect to each 
     employee of the taxpayer for any taxable year, an amount 
     equal to the lesser of--
       ``(1) 50 percent of the cost for such employee to maintain 
     an independent health record bank account paid by the 
     taxpayer during the taxable year, or
       ``(2) $50.
       ``(c) Independent Health Record Bank Account.--For purposes 
     of this section, the term `independent health record bank 
     account' has the meaning given to the term `account' under 
     section __03(1) of the Independent Health Record Bank Act of 
     2006.
       ``(d) Special Rules.--No deduction or credit (other than 
     under this section) shall be allowed under this chapter with 
     respect to any expense which is taken into account under 
     subsection (a) in determining the credit under this section.
       ``(e) Reports.--
       ``(1) In general.--Each taxpayer shall make such reports to 
     the Secretary and to employees of the taxpayer regarding--
       ``(A) independent health record bank account investments 
     made with respect to such employee during any calendar year, 
     and
       ``(B) such other information as the Secretary may require.
       ``(2) Time for making reports.--The reports required by 
     this subsection--
       ``(A) shall be filed at such time and in such manner as the 
     Secretary prescribes, and
       ``(B) shall be furnished to employees--
       ``(i) not later than January 31 of the calendar year 
     following the calendar year to which such reports relate, and
       ``(ii) in such manner as the Secretary prescribes.
       ``(f) Regulations.--The Secretary may prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this section.
       ``(g) Application of Section.--This section shall apply 
     with respect to any independent health record bank account 
     investments made by the taxpayer for the 5-taxable year 
     period beginning with the first taxable year during which 
     such investments are made by the taxpayer.''.
       (b) Credit Treated as Business Credit.--Section 38(b) of 
     the Internal Revenue Code of 1986 (relating to current year 
     business credit) is amended by striking ``and'' at the end of 
     paragraph (29), by striking the period at the end of 
     paragraph (30) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(31) the independent health record bank account 
     investment credit determined under section 45N(a).''.
       (c) Conforming Amendment.--The table of sections for 
     subpart C of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new item:

``Sec. 45N. Employer-provided employee independent health record bank 
              account fees.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
       (e) Additional Incentive for Consumers Participating in 
     IHRB.--Revenue generated by an independent health record bank 
     and received by an account holder, healthcare entity, or 
     healthcare payer shall not be considered taxable income under 
     the Internal Revenue Code of 1986.
                                 ______
                                 
  SA 3886. Mr. FRIST proposed an amendment to the bill S. 1955, to 
amend title I of the Employee Retirement Security Act of 1974 and the 
Public Health Service Act to expand health care access and reduce costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; as follows:

       At the end of the modified amendment at the following;
       ``This act shall become effective 1 day after enactment.''
                                 ______
                                 
  SA 3887. Mr. FRIST proposed an amendment to amendment SA 3886 
proposed by Mr. Frist to the bill S. 1955, to amend title I of the 
Employee Retirement Security Act of 1974 and the Public Health Service 
Act to expand health care access and reduce costs through the creation 
of small business health plans and through modernization of the health 
insurance marketplace; as follows:

       In the amendment strike ``1'' day and insert ``2'' days.
                                 ______
                                 
  SA 3888. Mr. FRIST proposed an amendment to the bill S. 1955, to 
amend title I of the Employee Retirement Security Act of 1974 and the 
Public Health Service Act to expand health care access and reduce costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS; PURPOSE.

       (a) Short Title.--This Act may be cited as the ``Health 
     Insurance Marketplace Modernization and Affordability Act of 
     2006''.
       (b) Table of Contents.--The table of contents is as 
     follows:

Sec. 1. Short title; table of contents; purposes.

                  TITLE I--SMALL BUSINESS HEALTH PLANS

Sec. 101. Rules governing small business health plans.
Sec. 102. Cooperation between Federal and State authorities.
Sec. 103. Effective date and transitional and other rules.

                        TITLE II--MARKET RELIEF

Sec. 201. Market relief.

         TITLE III--HARMONIZATION OF HEALTH INSURANCE STANDARDS

Sec. 301. Health Insurance Standards Harmonization.

       (c) Purposes.--It is the purpose of this Act to--
       (1) make more affordable health insurance options available 
     to small businesses, working families, and all Americans;
       (2) assure effective State regulatory protection of the 
     interests of health insurance consumers; and
       (3) create a more efficient and affordable health insurance 
     marketplace through collaborative development of uniform 
     regulatory standards.

                  TITLE I--SMALL BUSINESS HEALTH PLANS

     SEC. 101. RULES GOVERNING SMALL BUSINESS 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 SMALL BUSINESS HEALTH PLANS

     ``SEC. 801. SMALL BUSINESS HEALTH PLANS.

       ``(a) In General.--For purposes of this part, the term 
     `small business health plan' means a fully insured 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 medical care;

[[Page 7630]]

       ``(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;
       ``(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; and
       ``(4) does not condition membership on the basis of a 
     minimum group size.
     Any sponsor consisting of an association of entities which 
     meet the requirements of paragraphs (1), (2), (3), and (4) 
     shall be deemed to be a sponsor described in this subsection.

     ``SEC. 802. CERTIFICATION OF SMALL BUSINESS HEALTH PLANS.

       ``(a) In General.--Not later than 6 months after the date 
     of enactment of this part, the applicable authority shall 
     prescribe by interim final rule a procedure under which the 
     applicable authority shall certify small business health 
     plans which apply for certification as meeting the 
     requirements of this part.
       ``(b) Requirements Applicable to Certified Plans.--A small 
     business 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).
       ``(c) Requirements for Continued Certification.--The 
     applicable authority may provide by regulation for continued 
     certification of small business health plans under this part. 
     Such regulation shall provide for the revocation of a 
     certification if the applicable authority finds that the 
     small business health plan involved is failing to comply with 
     the requirements of this part.
       ``(d) Expedited and Deemed Certification.--
       ``(1) In general.--If the Secretary fails to act on an 
     application for certification under this section within 90 
     days of receipt of such application, the applying small 
     business health plan shall be deemed certified until such 
     time as the Secretary may deny for cause the application for 
     certification.
       ``(2) Civil penalty.--The Secretary may assess a civil 
     penalty against the board of trustees and plan sponsor 
     (jointly and severally) of a small business health plan that 
     is deemed certified under paragraph (1) of up to $500,000 in 
     the event the Secretary determines that the application for 
     certification of such small business health plan was 
     willfully or with gross negligence incomplete or inaccurate.

     ``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF 
                   TRUSTEES.

       ``(a) Sponsor.--The requirements of this subsection are met 
     with respect to a small business 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 a small business health 
     plan if the following requirements are met:
       ``(1) Fiscal control.--The plan is operated, pursuant to a 
     plan document, by a board of trustees which pursuant to a 
     trust agreement 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 a small business health plan which is in existence on the 
     date of the enactment of the Health Insurance Marketplace 
     Modernization and Affordability Act of 2006.
       ``(B) Sole authority.--The board has sole authority under 
     the plan to approve applications for participation in the 
     plan and to contract with insurers.
       ``(c) Treatment of Franchises.--In the case of a group 
     health plan which is established and maintained by a 
     franchiser for a franchisor or for 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 franchisor were deemed to be the sponsor referred 
     to in section 801(b) and each franchisee were deemed to be a 
     member (of the sponsor) referred to in section 801(b); and
       ``(2) the requirements of section 804(a)(1) shall be deemed 
     met.
     For purposes of this subsection the terms `franchisor' and 
     `franchisee' shall have the meanings given such terms for 
     purposes of sections 436.2(a) through 436.2(c) of title 16, 
     Code of Federal Regulations (including any such amendments to 
     such regulation after the date of enactment of this part).

     ``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.

       ``(a) Covered Employers and Individuals.--The requirements 
     of this subsection are met with respect to a small business 
     health plan if, under the terms of the plan--
       ``(1) each participating employer must be--
       ``(A) a member of the sponsor;
       ``(B) the sponsor; or
       ``(C) an affiliated member of the sponsor, 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 dependents of individuals described in 
     subparagraph (A).
       ``(b) Individual Market Unaffected.--The requirements of 
     this subsection are met with respect to a small business 
     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.
       ``(c) Prohibition of Discrimination Against Employers and 
     Employees Eligible to Participate.--The requirements of this 
     subsection are met with respect to a small business 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) information regarding all coverage options available 
     under the plan is made readily available to any employer 
     eligible to participate; 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 a small business health plan if the following 
     requirements are met:
       ``(1) Contents of governing instruments.--
       ``(A) In general.--The instruments governing the plan 
     include a written instrument, meeting the requirements of an 
     instrument required under section 402(a)(1), which--
       ``(i) 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)); and
       ``(ii) provides that the sponsor of the plan is to serve as 
     plan sponsor (referred to in section 3(16)(B)).
       ``(B) Description of material provisions.--The terms of the 
     health insurance coverage (including the terms of any 
     individual certificates that may be offered to individuals in 
     connection with such coverage) describe the material benefit 
     and rating, and

[[Page 7631]]

     other provisions set forth in this section and such material 
     provisions are included in the summary plan description.
       ``(2) Contribution rates must be nondiscriminatory.--
       ``(A) In general.--The contribution rates for any 
     participating small employer shall not vary on the basis of 
     any health status-related factor in relation to employees of 
     such employer or their beneficiaries and shall not vary on 
     the basis of the type of business or industry in which such 
     employer is engaged, subject to subparagraph (B) and the 
     terms of this title.
       ``(B) Effect of title.--Nothing in this title or any other 
     provision of law shall be construed to preclude a health 
     insurance issuer offering health insurance coverage in 
     connection with a small business health plan that meets the 
     requirements of this part, and at the request of such small 
     business health plan, from--
       ``(i) setting contribution rates for the small business 
     health plan based on the claims experience of the small 
     business health plan so long as any variation in such rates 
     for participating small employers complies with the 
     requirements of clause (ii), except that small business 
     health plans shall not be subject, in non-adopting states, to 
     subparagraphs (A)(ii) and (C) of section 2912(a)(2) of the 
     Public Health Service Act, and in adopting states, to any 
     State law that would have the effect of imposing requirements 
     as outlined in such subparagraphs (A)(ii) and (C); or
       ``(ii) varying contribution rates for participating small 
     employers in a small business health plan in a State to the 
     extent that such rates could vary using the same methodology 
     employed in such State for regulating small group premium 
     rates, subject to the terms of part I of subtitle A of title 
     XXIX of the Public Health Service Act (relating to rating 
     requirements), as added by title II of the Health Insurance 
     Marketplace Modernization and Affordability Act of 2006.
       ``(3) Exceptions regarding self-employed and large 
     employers.--
       ``(A) Self employed.--
       ``(i) In general.--Small business health plans with 
     participating employers who are self-employed individuals 
     (and their dependents) shall enroll such self-employed 
     participating employers in accordance with rating rules that 
     do not violate the rating rules for self-employed individuals 
     in the State in which such self-employed participating 
     employers are located.
       ``(ii) Guarantee issue.--Small business health plans with 
     participating employers who are self-employed individuals 
     (and their dependents) may decline to guarantee issue to such 
     participating employers in States in which guarantee issue is 
     not otherwise required for the self-employed in that State.
       ``(B) Large employers.--Small business health plans with 
     participating employers that are larger than small employers 
     (as defined in section 808(a)(10)) shall enroll such large 
     participating employers in accordance with rating rules that 
     do not violate the rating rules for large employers in the 
     State in which such large participating employers are 
     located.
       ``(4) 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 Small Business Health Plans to Design 
     Benefit Options.--Nothing in this part or any provision of 
     State law (as defined in section 514(c)(1)) shall be 
     construed to preclude a small business health plan or a 
     health insurance issuer offering health insurance coverage in 
     connection with a small business health plan from exercising 
     its sole discretion in selecting the specific benefits and 
     services consisting of medical care to be included as 
     benefits under such plan or coverage, except that such 
     benefits and services must meet the terms and specifications 
     of part II of subtitle A of title XXIX of the Public Health 
     Service Act (relating to lower cost plans), as added by title 
     II of the Health Insurance Marketplace Modernization and 
     Affordability Act of 2006.
       ``(c) Domicile and Non-Domicile States.--
       ``(1) Domicile state.--Coverage shall be issued to a small 
     business health plan in the State in which the sponsor's 
     principal place of business is located.
       ``(2) Non-domicile states.--With respect to a State (other 
     than the domicile State) in which participating employers of 
     a small business health plan are located but in which the 
     insurer of the small business health plan in the domicile 
     State is not yet licensed, the following shall apply:
       ``(A) Temporary preemption.--If, upon the expiration of the 
     90-day period following the submission of a licensure 
     application by such insurer (that includes a certified copy 
     of an approved licensure application as submitted by such 
     insurer in the domicile State) to such State, such State has 
     not approved or denied such application, such State's health 
     insurance licensure laws shall be temporarily preempted and 
     the insurer shall be permitted to operate in such State, 
     subject to the following terms:
       ``(i) Application of non-domicile state law.--Except with 
     respect to licensure and with respect to the terms of 
     subtitle A of title XXIX of the Public Health Service Act 
     (relating to rating and benefits as added by the Health 
     Insurance Marketplace Modernization and Affordability Act of 
     2006), the laws and authority of the non-domicile State shall 
     remain in full force and effect.
       ``(ii) Revocation of preemption.--The preemption of a non-
     domicile State's health insurance licensure laws pursuant to 
     this subparagraph, shall be terminated upon the occurrence of 
     either of the following:

       ``(I) Approval or denial of application.--The approval of 
     denial of an insurer's licensure application, following the 
     laws and regulations of the non-domicile State with respect 
     to licensure.
       ``(II) Determination of material violation.--A 
     determination by a non-domicile State that an insurer 
     operating in a non-domicile State pursuant to the preemption 
     provided for in this subparagraph is in material violation of 
     the insurance laws (other than licensure and with respect to 
     the terms of subtitle A of title XXIX of the Public Health 
     Service Act (relating to rating and benefits added by the 
     Health Insurance Marketplace Modernization and Affordability 
     Act of 2006)) of such State.

       ``(B) No prohibition on promotion.--Nothing in this 
     paragraph shall be construed to prohibit a small business 
     health plan or an insurer from promoting coverage prior to 
     the expiration of the 90-day period provided for in 
     subparagraph (A), except that no enrollment or collection of 
     contributions shall occur before the expiration of such 90-
     day period.
       ``(C) Licensure.--Except with respect to the application of 
     the temporary preemption provision of this paragraph, nothing 
     in this part shall be construed to limit the requirement that 
     insurers issuing coverage to small business health plans 
     shall be licensed in each State in which the small business 
     health plans operate.
       ``(D) Servicing by licensed insurers.--Notwithstanding 
     subparagraph (C), the requirements of this subsection may 
     also be satisfied if the participating employers of a small 
     business health plan are serviced by a licensed insurer in 
     that State, even where such insurer is not the insurer of 
     such small business health plan in the State in which such 
     small business health plan is domiciled.

     ``SEC. 806. REQUIREMENTS FOR APPLICATION AND RELATED 
                   REQUIREMENTS.

       ``(a) Filing Fee.--Under the procedure prescribed pursuant 
     to section 802(a), a small business 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 small business health 
     plans.
       ``(b) Information to Be Included in Application for 
     Certification.--An application for certification under this 
     part meets the requirements of this section only if it 
     includes, in a manner and form which shall be prescribed by 
     the applicable authority by regulation, at least the 
     following information:
       ``(1) Identifying information.--The names and addresses 
     of--
       ``(A) the sponsor; and
       ``(B) the members of the board of trustees of the plan.
       ``(2) States in which plan intends to do business.--The 
     States in which participants and beneficiaries under the plan 
     are to be located and the number of them expected to be 
     located in each such State.
       ``(3) Bonding requirements.--Evidence provided by the board 
     of trustees that the bonding requirements of section 412 will 
     be met as of the date of the application or (if later) 
     commencement of operations.
       ``(4) Plan documents.--A copy of the documents governing 
     the plan (including any bylaws and trust agreements), the 
     summary plan description, and other material describing the 
     benefits that will be provided to participants and 
     beneficiaries under the plan.
       ``(5) Agreements with service providers.--A copy of any 
     agreements between the plan, health insurance issuer, and 
     contract administrators and other service providers.
       ``(c) Filing Notice of Certification With States.--A 
     certification granted under this part to a small business 
     health plan shall not be effective unless written notice of 
     such certification is filed with the applicable State 
     authority of each State in which the small business health 
     plans operate.
       ``(d) Notice of Material Changes.--In the case of any small 
     business 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.

     ``SEC. 807. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

       ``A small business health plan which is or has been 
     certified under this part may terminate (upon or at any time 
     after cessation of

[[Page 7632]]

     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. 808. DEFINITIONS AND RULES OF CONSTRUCTION.

       ``(a) Definitions.--For purposes of this part--
       ``(1) Affiliated member.--The term `affiliated member' 
     means, in connection with a sponsor--
       ``(A) a person who is otherwise eligible to be a member of 
     the sponsor but who elects an affiliated status with the 
     sponsor, or
       ``(B) in the case of a sponsor with members which consist 
     of associations, a person who is a member or employee of any 
     such association and elects an affiliated status with the 
     sponsor.
       ``(2) Applicable authority.--The term `applicable 
     authority' means the Secretary of Labor, except that, in 
     connection with any exercise of the Secretary's authority 
     with respect to which the Secretary is required under section 
     506(d) to consult with a State, such term means the 
     Secretary, in consultation with such State.
       ``(3) 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.
       ``(4) Group health plan.--The term `group health plan' has 
     the meaning provided in section 733(a)(1) (after applying 
     subsection (b) of this section).
       ``(5) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning provided in section 
     733(b)(1), except that such term shall not include excepted 
     benefits (as defined in section 733(c)).
       ``(6) Health insurance issuer.--The term `health insurance 
     issuer' has the meaning provided in section 733(b)(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) Medical care.--The term `medical care' has the 
     meaning provided in section 733(a)(2).
       ``(9) Participating employer.--The term `participating 
     employer' means, in connection with a small business 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.
       ``(10) Small employer.--The term `small employer' means, in 
     connection with a group health plan with respect to a plan 
     year, a small employer as defined in section 2791(e)(4).
       ``(11) Trade association and professional association.--The 
     terms `trade association' and `professional association' mean 
     an entity that meets the requirements of section 1.501(c)(6)-
     1 of title 26, Code of Federal Regulations (as in effect on 
     the date of enactment of this Act).
       ``(b) Rule of Construction.--For purposes of determining 
     whether a plan, fund, or program is an employee welfare 
     benefit plan which is a small business 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--
       ``(1) 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
       ``(2) 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.
       ``(c) Renewal.--Notwithstanding any provision of law to the 
     contrary, a participating employer in a small business health 
     plan shall not be deemed to be a plan sponsor in applying 
     requirements relating to coverage renewal.
       ``(d) Health Savings Accounts.--Nothing in this part shall 
     be construed to create any mandates for coverage of benefits 
     for HSA-qualified health plans that would require 
     reimbursements in violation of section 223(c)(2) of the 
     Internal Revenue Code of 1986.''.
       (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 a small 
     business 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 a health 
     insurance issuer from offering health insurance coverage in 
     connection with a small business health plan which is 
     certified under part 8.
       ``(2) In any case in which health insurance coverage of any 
     policy type is offered under a small business 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 establish 
     rating and benefit requirements that would otherwise apply to 
     such coverage, provided the requirements of subtitle A of 
     title XXIX of the Public Health Service Act (as added by 
     title II of the Health Insurance Marketplace Modernization 
     and Affordability Act of 2006) (concerning health plan rating 
     and benefits) are met.''.
       (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 a small business health plan under part 8.''.
       (d) Savings Clause.--Section 731(c) of such Act is amended 
     by inserting ``or part 8'' after ``this part''.
       (e) 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 Small Business Health Plans

``801.  Small business health plans.
``802.  Certification of small business 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.  Requirements for application and related requirements.
``807.  Notice requirements for voluntary termination.
``808.  Definitions and rules of construction.''.

     SEC. 102. 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 Small 
     Business Health Plans.--
       ``(1) Agreements with states.--The Secretary shall consult 
     with the State recognized under paragraph (2) with respect to 
     a small business 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 small business 
     health plans under part 8 in accordance with regulations of 
     the Secretary applicable to certification under part 8.
       ``(2) Recognition of domicile state.--In carrying out 
     paragraph (1), the Secretary shall ensure that only one State 
     will be recognized, with respect to any particular small 
     business health plan, as the State with which consultation is 
     required. In carrying out this paragraph such State shall be 
     the domicile State, as defined in section 805(c).''.

[[Page 7633]]



     SEC. 103. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

       (a) Effective Date.--The amendments made by this title 
     shall take effect 12 months 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 title within 6 months 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 
     808(a)(2) 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 
     trustees which has control over 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 or at such time that the arrangement provides 
     coverage to participants and beneficiaries in any State other 
     than the States in which coverage is provided on such date of 
     enactment.
       (2) Definitions.--For purposes of this subsection, the 
     terms ``group health plan'', ``medical care'', and 
     ``participating employer'' shall have the meanings provided 
     in section 808 of the Employee Retirement Income Security Act 
     of 1974, except that the reference in paragraph (7) of such 
     section to an ``small business health plan'' shall be deemed 
     a reference to an arrangement referred to in this subsection.

                        TITLE II--MARKET RELIEF

     SEC. 201. MARKET RELIEF.

       The Public Health Service Act (42 U.S.C. 201 et seq.) is 
     amended by adding at the end the following:

     ``TITLE XXIX--HEALTH CARE INSURANCE MARKETPLACE MODERNIZATION

     ``SEC. 2901. GENERAL INSURANCE DEFINITIONS.

       ``In this title, the terms `health insurance coverage', 
     `health insurance issuer', `group health plan', and 
     `individual health insurance' shall have the meanings given 
     such terms in section 2791.

                      ``Subtitle A--Market Relief

                     ``PART I--RATING REQUIREMENTS

     ``SEC. 2911. DEFINITIONS.

       ``In this part:
       ``(1) Adopting state.--The term `adopting State' means a 
     State that, with respect to the small group market, has 
     enacted small group rating rules that meet the minimum 
     standards set forth in section 2912(a)(1) or, as applicable, 
     transitional small group rating rules set forth in section 
     2912(b).
       ``(2) 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 
     insurance laws of such State.
       ``(3) Base premium rate.--The term `base premium rate' 
     means, for each class of business with respect to a rating 
     period, the lowest premium rate charged or that could have 
     been charged under a rating system for that class of business 
     by the small employer carrier to small employers with similar 
     case characteristics for health benefit plans with the same 
     or similar coverage
       ``(4) Eligible insurer.--The term `eligible insurer' means 
     a health insurance issuer that is licensed in a State and 
     that--
       ``(A) notifies the Secretary, not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage 
     consistent with the Model Small Group Rating Rules or, as 
     applicable, transitional small group rating rules in a State;
       ``(B) notifies the insurance department of a nonadopting 
     State (or other State agency), not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer small group health insurance 
     coverage in that State consistent with the Model Small Group 
     Rating Rules, and provides with such notice a copy of any 
     insurance policy that it intends to offer in the State, its 
     most recent annual and quarterly financial reports, and any 
     other information required to be filed with the insurance 
     department of the State (or other State agency); and
       ``(C) includes in the terms of the health insurance 
     coverage offered in nonadopting States (including in the 
     terms of any individual certificates that may be offered to 
     individuals in connection with such group health coverage) 
     and filed with the State pursuant to subparagraph (B), a 
     description in the insurer's contract of the Model Small 
     Group Rating Rules and an affirmation that such Rules are 
     included in the terms of such contract.
       ``(5) Health insurance coverage.--The term `health 
     insurance coverage' means any coverage issued in the small 
     group health insurance market, except that such term shall 
     not include excepted benefits (as defined in section 
     2791(c)).
       ``(6) Index rate.--The term `index rate' means for each 
     class of business with respect to the rating period for small 
     employers with similar case characteristics, the arithmetic 
     average of the applicable base premium rate and the 
     corresponding highest premium rate.
       ``(7)  Model small group rating rules.--The term ` Model 
     Small Group Rating Rules' means the rules set forth in 
     section 2912(a)(2).
       ``(8) Nonadopting state.--The term `nonadopting State' 
     means a State that is not an adopting State.
       ``(9) Small group insurance market.--The term `small group 
     insurance market' shall have the meaning given the term 
     `small group market' in section 2791(e)(5).
       ``(10) State law.--The term `State law' means all laws, 
     decisions, rules, regulations, or other State actions 
     (including actions by a State agency) having the effect of 
     law, of any State.
       ``(11) Variation limits.--
       ``(A) Composite variation limit.--
       ``(i) In general.--The term `composite variation limit' 
     means the total variation in premium rates charged by a 
     health insurance issuer in the small group market as 
     permitted under applicable State law based on the following 
     factors or case characteristics:

       ``(I) Age.
       ``(II) Duration of coverage.
       ``(III) Claims experience.
       ``(IV) Health status.

       ``(ii) Use of factors.--With respect to the use of the 
     factors described in clause (i) in setting premium rates, a 
     health insurance issuer shall use one or both of the factors 
     described in subclauses (I) or (IV) of such clause and may 
     use the factors described in subclauses (II) or (III) of such 
     clause.
       ``(B) Total variation limit.--The term `total variation 
     limit' means the total variation in premium rates charged by 
     a health insurance issuer in the small group market as 
     permitted under applicable State law based on all factors and 
     case characteristics (as described in section 2912(a)(1)).

     ``SEC. 2912. RATING RULES.

       ``(a) Establishment of Minimum Standards for Premium 
     Variations and Model Small Group Rating Rules.--Not later 
     than 6 months after the date of enactment of this title, the 
     Secretary shall promulgate regulations establishing the 
     following Minimum Standards and Model Small Group Rating 
     Rules:
       ``(1) Minimum standards for premium variations.--
       ``(A) Composite variation limit.--The composite variation 
     limit shall not be less than 3:1.
       ``(B) Total variation limit.--The total variation limit 
     shall not be less than 5:1.
       ``(C) Prohibition on use of certain case characteristics.--
     For purposes of this paragraph, in calculating the total 
     variation limit, the State shall not use case characteristics 
     other than those used in calculating the composite variation 
     limit and industry, geographic area, group size, 
     participation rate, class of business, and participation in 
     wellness programs.
       ``(2) Model small group rating rules.--The following apply 
     to an eligible insurer in a non-adopting State:
       ``(A) Premium rates.--Premium rates for small group health 
     benefit plans to which this title applies shall comply with 
     the following provisions relating to premiums, except as 
     provided for under subsection (b):
       ``(i) Variation in premium rates.--The plan may not vary 
     premium rates by more than the minimum standards provided for 
     under paragraph (1).
       ``(ii) Index rate.--The index rate for a rating period for 
     any class of business shall not exceed the index rate for any 
     other class of business by more than 20 percent, excluding 
     those classes of business related to association groups under 
     this title.
       ``(iii) Class of businesses.--With respect to a class of 
     business, the premium rates charged during a rating period to 
     small employers with similar case characteristics for the 
     same or similar coverage or the rates that could be charged 
     to such employers under the rating system for that class of 
     business, shall not vary from the index rate

[[Page 7634]]

     by more than 25 percent of the index rate under clause (ii).
       ``(iv) Increases for new rating periods.--The percentage 
     increase in the premium rate charged to a small employer for 
     a new rating period may not exceed the sum of the following:

       ``(I) The percentage change in the new business premium 
     rate measured from the first day of the prior rating period 
     to the first day of the new rating period. In the case of a 
     health benefit plan into which the small employer carrier is 
     no longer enrolling new small employers, the small employer 
     carrier shall use the percentage change in the base premium 
     rate, except that such change shall not exceed, on a 
     percentage basis, the change in the new business premium rate 
     for the most similar health benefit plan into which the small 
     employer carrier is actively enrolling new small employers.
       ``(II) Any adjustment, not to exceed 15 percent annually 
     and adjusted pro rata for rating periods of less then 1 year, 
     due to the claim experience, health status or duration of 
     coverage of the employees or dependents of the small employer 
     as determined from the small employer carrier's rate manual 
     for the class of business involved.
       ``(III) Any adjustment due to change in coverage or change 
     in the case characteristics of the small employer as 
     determined from the small employer carrier's rate manual for 
     the class of business.

       ``(v) Uniform application of adjustments.--Adjustments in 
     premium rates for claim experience, health status, or 
     duration of coverage shall not be charged to individual 
     employees or dependents. Any such adjustment shall be applied 
     uniformly to the rates charged for all employees and 
     dependents of the small employer.
       ``(vi) Prohibition on use of certain case characteristic.--
     A small employer carrier shall not utilize case 
     characteristics, other than those permitted under paragraph 
     (1)(C), without the prior approval of the applicable State 
     authority.
       ``(vii) Consistent application of factors.--Small employer 
     carriers shall apply rating factors, including case 
     characteristics, consistently with respect to all small 
     employers in a class of business. Rating factors shall 
     produce premiums for identical groups which differ only by 
     the amounts attributable to plan design and do not reflect 
     differences due to the nature of the groups assumed to select 
     particular health benefit plans.
       ``(viii) Treatment of plans as having same rating period.--
     A small employer carrier shall treat all health benefit plans 
     issued or renewed in the same calendar month as having the 
     same rating period.
       ``(ix) Require compliance.--Premium rates for small 
     business health benefit plans shall comply with the 
     requirements of this subsection notwithstanding any 
     assessments paid or payable by a small employer carrier as 
     required by a State's small employer carrier reinsurance 
     program.
       ``(B) Establishment of separate class of business.--Subject 
     to subparagraph (C), a small employer carrier may establish a 
     separate class of business only to reflect substantial 
     differences in expected claims experience or administrative 
     costs related to the following:
       ``(i) The small employer carrier uses more than one type of 
     system for the marketing and sale of health benefit plans to 
     small employers.
       ``(ii) The small employer carrier has acquired a class of 
     business from another small employer carrier.
       ``(iii) The small employer carrier provides coverage to one 
     or more association groups that meet the requirements of this 
     title.
       ``(C) Limitation.--A small employer carrier may establish 
     up to 9 separate classes of business under subparagraph (B), 
     excluding those classes of business related to association 
     groups under this title.
       ``(D) Limitation on transfers.--A small employer carrier 
     shall not transfer a small employer involuntarily into or out 
     of a class of business. A small employer carrier shall not 
     offer to transfer a small employer into or out of a class of 
     business unless such offer is made to transfer all small 
     employers in the class of business without regard to case 
     characteristics, claim experience, health status or duration 
     of coverage since issue.
       ``(b) Transitional Model Small Group Rating Rules.--
       ``(1) In general.--Not later than 6 months after the date 
     of enactment of this title and to the extent necessary to 
     provide for a graduated transition to the minimum standards 
     for premium variation as provided for in subsection (a)(1), 
     the Secretary, in consultation with the National Association 
     of Insurance Commissioners (NAIC), shall promulgate State-
     specific transitional small group rating rules in accordance 
     with this subsection, which shall be applicable with respect 
     to non-adopting States and eligible insurers operating in 
     such States for a period of not to exceed 3 years from the 
     date of the promulgation of the minimum standards for premium 
     variation pursuant to subsection (a).
       ``(2) Compliance with transitional model small group rating 
     rules.--During the transition period described in paragraph 
     (1), a State that, on the date of enactment of this title, 
     has in effect a small group rating rules methodology that 
     allows for a variation that is less than the variation 
     provided for under subsection (a)(1) (concerning minimum 
     standards for premium variation), shall be deemed to be an 
     adopting State if the State complies with the transitional 
     small group rating rules as promulgated by the Secretary 
     pursuant to paragraph (1).
       ``(3) Transitioning of old business.--
       ``(A) In general.--In developing the transitional small 
     group rating rules under paragraph (1), the Secretary shall, 
     after consultation with the National Association of Insurance 
     Commissioners and representatives of insurers operating in 
     the small group health insurance market in non-adopting 
     States, promulgate special transition standards with respect 
     to independent rating classes for old and new business, to 
     the extent reasonably necessary to protect health insurance 
     consumers and to ensure a stable and fair transition for old 
     and new market entrants.
       ``(B) Period for operation of independent rating classes.--
     In developing the special transition standards pursuant to 
     subparagraph (A), the Secretary shall permit a carrier in a 
     non-adopting State, at its option, to maintain independent 
     rating classes for old and new business for a period of up to 
     5 years, with the commencement of such 5-year period to begin 
     at such time, but not later than the date that is 3 years 
     after the date of enactment of this title, as the carrier 
     offers a book of business meeting the minimum standards for 
     premium variation provided for in subsection (a)(1) or the 
     transitional small group rating rules under paragraph (1).
       ``(4) Other transitional authority.--In developing the 
     transitional small group rating rules under paragraph (1), 
     the Secretary shall provide for the application of the 
     transitional small group rating rules in transition States as 
     the Secretary may determine necessary for a an effective 
     transition.
       ``(c) Market Re-Entry.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, a health insurance issuer that has voluntarily withdrawn 
     from providing coverage in the small group market prior to 
     the date of enactment of the Health Insurance Marketplace 
     Modernization and Affordability Act of 2006 shall not be 
     excluded from re-entering such market on a date that is more 
     than 180 days after such date of enactment.
       ``(2) Termination.--The provision of this subsection shall 
     terminate on the date that is 24 months after the date of 
     enactment of the Health Insurance Marketplace Modernization 
     and Affordability Act of 2006.

     ``SEC. 2913. APPLICATION AND PREEMPTION.

       ``(a) Superseding of State Law.--
       ``(1) In general.--This part shall supersede any and all 
     State laws of a non-adopting State insofar as such State laws 
     (whether enacted prior to or after the date of enactment of 
     this subtitle) relate to rating in the small group insurance 
     market as applied to an eligible insurer, or small group 
     health insurance coverage issued by an eligible insurer, 
     including with respect to coverage issued to a small employer 
     through a small business health plan, in a State.
       ``(2) Nonadopting states.--This part shall supersede any 
     and all State laws of a nonadopting State insofar as such 
     State laws (whether enacted prior to or after the date of 
     enactment of this subtitle)--
       ``(A) prohibit an eligible insurer from offering, 
     marketing, or implementing small group health insurance 
     coverage consistent with the Model Small Group Rating Rules 
     or transitional model small group rating rules; or
       ``(B) have the effect of retaliating against or otherwise 
     punishing in any respect an eligible insurer for offering, 
     marketing, or implementing small group health insurance 
     coverage consistent with the Model Small Group Rating Rules 
     or transitional model small group rating rules.
       ``(b) Savings Clause and Construction.--
       ``(1) Nonapplication to adopting states.--Subsection (a) 
     shall not apply with respect to adopting states.
       ``(2) Nonapplication to certain insurers.--Subsection (a) 
     shall not apply with respect to insurers that do not qualify 
     as eligible insurers that offer small group health insurance 
     coverage in a nonadopting State.
       ``(3) Nonapplication where obtaining relief under state 
     law.--Subsection (a)(1) shall not supercede any State law in 
     a nonadopting State to the extent necessary to permit 
     individuals or the insurance department of the State (or 
     other State agency) to obtain relief under State law to 
     require an eligible insurer to comply with the Model Small 
     Group Rating Rules or transitional model small group rating 
     rules.
       ``(4) No effect on preemption.--In no case shall this part 
     be construed to limit or affect in any manner the preemptive 
     scope of sections 502 and 514 of the Employee Retirement 
     Income Security Act of 1974. In no case shall this part be 
     construed to create any cause of action under Federal or 
     State law or enlarge or affect any remedy available under the 
     Employee Retirement Income Security Act of 1974.
       ``(5) Preemption limited to rating.--Subsection (a) shall 
     not preempt any State law that does not have a reference to 
     or a connection with State rating rules that would otherwise 
     apply to eligible insurers.
       ``(c) Effective Date.--This section shall apply, at the 
     election of the eligible insurer,

[[Page 7635]]

     beginning in the first plan year or the first calendar year 
     following the issuance of the final rules by the Secretary 
     under the Model Small Group Rating Rules or, as applicable, 
     the Transitional Model Small Group Rating Rules, but in no 
     event earlier than the date that is 12 months after the date 
     of enactment of this title.

     ``SEC. 2914. CIVIL ACTIONS AND JURISDICTION.

       ``(a) In General.--The courts of the United States shall 
     have exclusive jurisdiction over civil actions involving the 
     interpretation of this part.
       ``(b) Actions.--An eligible insurer may bring an action in 
     the district courts of the United States for injunctive or 
     other equitable relief against any officials or agents of a 
     nonadopting State in connection with any conduct or action, 
     or proposed conduct or action, by such officials or agents 
     which violates, or which would if undertaken violate, section 
     2913.
       ``(c) Direct Filing in Court of Appeals.--At the election 
     of the eligible insurer, an action may be brought under 
     subsection (b) directly in the United States Court of Appeals 
     for the circuit in which the nonadopting State is located by 
     the filing of a petition for review in such Court.
       ``(d) Expedited Review.--
       ``(1) District court.--In the case of an action brought in 
     a district court of the United States under subsection (b), 
     such court shall complete such action, including the issuance 
     of a judgment, prior to the end of the 120-day period 
     beginning on the date on which such action is filed, unless 
     all parties to such proceeding agree to an extension of such 
     period.
       ``(2) Court of appeals.--In the case of an action brought 
     directly in a United States Court of Appeal under subsection 
     (c), or in the case of an appeal of an action brought in a 
     district court under subsection (b), such Court shall 
     complete all action on the petition, including the issuance 
     of a judgment, prior to the end of the 60-day period 
     beginning on the date on which such petition is filed with 
     the Court, unless all parties to such proceeding agree to an 
     extension of such period.
       ``(e) Standard of Review.--A court in an action filed under 
     this section, shall render a judgment based on a review of 
     the merits of all questions presented in such action and 
     shall not defer to any conduct or action, or proposed conduct 
     or action, of a nonadopting State.

     ``SEC. 2915. ONGOING REVIEW.

       ``Not later than 5 years after the date on which the Model 
     Small Group Rating Rules are issued under this part, and 
     every 5 years thereafter, the Secretary, in consultation with 
     the National Association of Insurance Commissioners, shall 
     prepare and submit to the appropriate committees of Congress 
     a report that assesses the effect of the Model Small Group 
     Rating Rules on access, cost, and market functioning in the 
     small group market. Such report may, if the Secretary, in 
     consultation with the National Association of Insurance 
     Commissioners, determines such is appropriate for improving 
     access, costs, and market functioning, contain legislative 
     proposals for recommended modification to such Model Small 
     Group Rating Rules.

                      ``PART II--AFFORDABLE PLANS

     ``SEC. 2921. DEFINITIONS.

       ``In this part:
       ``(1) Adopting state.--The term `adopting State' means a 
     State that has enacted the Benefit Choice Standards in their 
     entirety and as the exclusive laws of the State that relate 
     to benefit, service, and provider mandates in the group and 
     individual insurance markets.
       ``(2) Benefit choice standards.--The term `Benefit Choice 
     Standards' means the Standards issued under section 2922.
       ``(3) Eligible insurer.--The term `eligible insurer' means 
     a health insurance issuer that is licensed in a nonadopting 
     State and that--
       ``(A) notifies the Secretary, not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage 
     consistent with the Benefit Choice Standards in a nonadopting 
     State;
       ``(B) notifies the insurance department of a nonadopting 
     State (or other State agency), not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage in 
     that State consistent with the Benefit Choice Standards, and 
     provides with such notice a copy of any insurance policy that 
     it intends to offer in the State, its most recent annual and 
     quarterly financial reports, and any other information 
     required to be filed with the insurance department of the 
     State (or other State agency) by the Secretary in 
     regulations; and
       ``(C) includes in the terms of the health insurance 
     coverage offered in nonadopting States (including in the 
     terms of any individual certificates that may be offered to 
     individuals in connection with such group health coverage) 
     and filed with the State pursuant to subparagraph (B), a 
     description in the insurer's contract of the Benefit Choice 
     Standards and that adherence to such Standards is included as 
     a term of such contract.
       ``(4) Health insurance coverage.--The term `health 
     insurance coverage' means any coverage issued in the group or 
     individual health insurance markets, except that such term 
     shall not include excepted benefits (as defined in section 
     2791(c)).
       ``(5) Nonadopting state.--The term `nonadopting State' 
     means a State that is not an adopting State.
       ``(6) Small group insurance market.--The term `small group 
     insurance market' shall have the meaning given the term 
     `small group market' in section 2791(e)(5).
       ``(7) State law.--The term `State law' means all laws, 
     decisions, rules, regulations, or other State actions 
     (including actions by a State agency) having the effect of 
     law, of any State.

     ``SEC. 2922. OFFERING AFFORDABLE PLANS.

       ``(a) Benefit Choice Options.--
       ``(1) Development.--Not later than 6 months after the date 
     of enactment of this title, the Secretary shall issue, by 
     interim final rule, Benefit Choice Standards that implement 
     the standards provided for in this part.
       ``(2) Basic options.--The Benefit Choice Standards shall 
     provide that a health insurance issuer in a State, may offer 
     a coverage plan or plan in the small group market, individual 
     market, large group market, or through a small business 
     health plan, that does not comply with one or more mandates 
     regarding covered benefits, services, or category of provider 
     as may be in effect in such State with respect to such market 
     or markets (either prior to or following the date of 
     enactment of this title), if such issuer also offers in such 
     market or markets an enhanced option as provided for in 
     paragraph (3).
       ``(3) Enhanced option.--A health insurance issuer issuing a 
     basic option as provided for in paragraph (2) shall also 
     offer to purchasers (including, with respect to a small 
     business health plan, the participating employers of such 
     plan) an enhanced option, which shall at a minimum include 
     such covered benefits, services, and categories of providers 
     as are covered by a State employee coverage plan in one of 
     the 5 most populous States as are in effect in the calendar 
     year in which such enhanced option is offered.
       ``(4) Publication of benefits.--Not later than 3 months 
     after the date of enactment of this title, and on the first 
     day of every calendar year thereafter, the Secretary shall 
     publish in the Federal Register such covered benefits, 
     services, and categories of providers covered in that 
     calendar year by the State employee coverage plans in the 5 
     most populous States.
       ``(b) Effective Dates.--
       ``(1) Small business health plans.--With respect to health 
     insurance provided to participating employers of small 
     business health plans, the requirements of this part 
     (concerning lower cost plans) shall apply beginning on the 
     date that is 12 months after the date of enactment of this 
     title.
       ``(2) Non-association coverage.--With respect to health 
     insurance provided to groups or individuals other than 
     participating employers of small business health plans, the 
     requirements of this part shall apply beginning on the date 
     that is 15 months after the date of enactment of this title.

     ``SEC. 2923. APPLICATION AND PREEMPTION.

       ``(a) Superseding of State Law.--
       ``(1) In general.--This part shall supersede any and all 
     State laws insofar as such laws relate to mandates relating 
     to covered benefits, services, or categories of provider in 
     the health insurance market as applied to an eligible 
     insurer, or health insurance coverage issued by an eligible 
     insurer, including with respect to coverage issued to a small 
     business health plan, in a nonadopting State.
       ``(2) Nonadopting states.--This part shall supersede any 
     and all State laws of a nonadopting State (whether enacted 
     prior to or after the date of enactment of this title) 
     insofar as such laws--
       ``(A) prohibit an eligible insurer from offering, 
     marketing, or implementing health insurance coverage 
     consistent with the Benefit Choice Standards, as provided for 
     in section 2922(a); or
       ``(B) have the effect of retaliating against or otherwise 
     punishing in any respect an eligible insurer for offering, 
     marketing, or implementing health insurance coverage 
     consistent with the Benefit Choice Standards.
       ``(b) Savings Clause and Construction.--
       ``(1) Nonapplication to adopting states.--Subsection (a) 
     shall not apply with respect to adopting States.
       ``(2) Nonapplication to certain insurers.--Subsection (a) 
     shall not apply with respect to insurers that do not qualify 
     as eligible insurers who offer health insurance coverage in a 
     nonadopting State.
       ``(3) Nonapplication where obtaining relief under state 
     law.--Subsection (a)(1) shall not supercede any State law of 
     a nonadopting State to the extent necessary to permit 
     individuals or the insurance department of the State (or 
     other State agency) to obtain relief under State law to 
     require an eligible insurer to comply with the Benefit Choice 
     Standards.
       ``(4) No effect on preemption.--In no case shall this part 
     be construed to limit or affect in any manner the preemptive 
     scope of sections 502 and 514 of the Employee Retirement 
     Income Security Act of 1974. In no case shall this part be 
     construed to create any cause of

[[Page 7636]]

     action under Federal or State law or enlarge or affect any 
     remedy available under the Employee Retirement Income 
     Security Act of 1974.
       ``(5) Preemption limited to benefits.--Subsection (a) shall 
     not preempt any State law that does not have a reference to 
     or a connection with State mandates regarding covered 
     benefits, services, or categories of providers that would 
     otherwise apply to eligible insurers.

     ``SEC. 2924. CIVIL ACTIONS AND JURISDICTION.

       ``(a) In General.--The courts of the United States shall 
     have exclusive jurisdiction over civil actions involving the 
     interpretation of this part.
       ``(b) Actions.--An eligible insurer may bring an action in 
     the district courts of the United States for injunctive or 
     other equitable relief against any officials or agents of a 
     nonadopting State in connection with any conduct or action, 
     or proposed conduct or action, by such officials or agents 
     which violates, or which would if undertaken violate, section 
     2923.
       ``(c) Direct Filing in Court of Appeals.--At the election 
     of the eligible insurer, an action may be brought under 
     subsection (b) directly in the United States Court of Appeals 
     for the circuit in which the nonadopting State is located by 
     the filing of a petition for review in such Court.
       ``(d) Expedited Review.--
       ``(1) District court.--In the case of an action brought in 
     a district court of the United States under subsection (b), 
     such court shall complete such action, including the issuance 
     of a judgment, prior to the end of the 120-day period 
     beginning on the date on which such action is filed, unless 
     all parties to such proceeding agree to an extension of such 
     period.
       ``(2) Court of appeals.--In the case of an action brought 
     directly in a United States Court of Appeal under subsection 
     (c), or in the case of an appeal of an action brought in a 
     district court under subsection (b), such Court shall 
     complete all action on the petition, including the issuance 
     of a judgment, prior to the end of the 60-day period 
     beginning on the date on which such petition is filed with 
     the Court, unless all parties to such proceeding agree to an 
     extension of such period.
       ``(e) Standard of Review.--A court in an action filed under 
     this section, shall render a judgment based on a review of 
     the merits of all questions presented in such action and 
     shall not defer to any conduct or action, or proposed conduct 
     or action, of a nonadopting State.

     ``SEC. 2925. RULES OF CONSTRUCTION.

       ``(a) In General.--Notwithstanding any other provision of 
     Federal or State law, a health insurance issuer in an 
     adopting State or an eligible insurer in a non-adopting State 
     may amend its existing policies to be consistent with the 
     terms of this subtitle (concerning rating and benefits).
       ``(b) Health Savings Accounts.--Nothing in this subtitle 
     shall be construed to create any mandates for coverage of 
     benefits for HSA-qualified health plans that would require 
     reimbursements in violation of section 223(c)(2) of the 
     Internal Revenue Code of 1986.''.

         TITLE III--HARMONIZATION OF HEALTH INSURANCE STANDARDS

     SEC. 301. HEALTH INSURANCE STANDARDS HARMONIZATION.

       Title XXIX of the Public Health Service Act (as added by 
     section 201) is amended by adding at the end the following:

                 ``Subtitle B--Standards Harmonization

     ``SEC. 2931. DEFINITIONS.

       ``In this subtitle:
       ``(1) Adopting state.--The term `adopting State' means a 
     State that has enacted the harmonized standards adopted under 
     this subtitle in their entirety and as the exclusive laws of 
     the State that relate to the harmonized standards.
       ``(2) Eligible insurer.--The term `eligible insurer' means 
     a health insurance issuer that is licensed in a nonadopting 
     State and that--
       ``(A) notifies the Secretary, not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage 
     consistent with the harmonized standards in a nonadopting 
     State;
       ``(B) notifies the insurance department of a nonadopting 
     State (or other State agency), not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage in 
     that State consistent with the harmonized standards published 
     pursuant to section 2932(d), and provides with such notice a 
     copy of any insurance policy that it intends to offer in the 
     State, its most recent annual and quarterly financial 
     reports, and any other information required to be filed with 
     the insurance department of the State (or other State agency) 
     by the Secretary in regulations; and
       ``(C) includes in the terms of the health insurance 
     coverage offered in nonadopting States (including in the 
     terms of any individual certificates that may be offered to 
     individuals in connection with such health coverage) and 
     filed with the State pursuant to subparagraph (B), a 
     description of the harmonized standards published pursuant to 
     section 2932(g)(2) and an affirmation that such standards are 
     a term of the contract.
       ``(3) Harmonized standards.--The term `harmonized 
     standards' means the standards certified by the Secretary 
     under section 2932(d).
       ``(4) Health insurance coverage.--The term `health 
     insurance coverage' means any coverage issued in the health 
     insurance market, except that such term shall not include 
     excepted benefits (as defined in section 2791(c)).
       ``(5) Nonadopting state.--The term `nonadopting State' 
     means a State that fails to enact, within 18 months of the 
     date on which the Secretary certifies the harmonized 
     standards under this subtitle, the harmonized standards in 
     their entirety and as the exclusive laws of the State that 
     relate to the harmonized standards.
       ``(6) State law.--The term `State law' means all laws, 
     decisions, rules, regulations, or other State actions 
     (including actions by a State agency) having the effect of 
     law, of any State.

     ``SEC. 2932. HARMONIZED STANDARDS.

       ``(a) Board.--
       ``(1) Establishment.--Not later than 3 months after the 
     date of enactment of this title, the Secretary, in 
     consultation with the NAIC, shall establish the Health 
     Insurance Consensus Standards Board (referred to in this 
     subtitle as the `Board') to develop recommendations that 
     harmonize inconsistent State health insurance laws in 
     accordance with the procedures described in subsection (b).
       ``(2) Composition.--
       ``(A) In general.--The Board shall be composed of the 
     following voting members to be appointed by the Secretary 
     after considering the recommendations of professional 
     organizations representing the entities and constituencies 
     described in this paragraph:
       ``(i) Four State insurance commissioners as recommended by 
     the National Association of Insurance Commissioners, of which 
     2 shall be Democrats and 2 shall be Republicans, and of which 
     one shall be designated as the chairperson and one shall be 
     designated as the vice chairperson.
       ``(ii) Four representatives of State government, two of 
     which shall be governors of States and two of which shall be 
     State legislators, and two of which shall be Democrats and 
     two of which shall be Republicans.
       ``(iii) Four representatives of health insurers, of which 
     one shall represent insurers that offer coverage in the small 
     group market, one shall represent insurers that offer 
     coverage in the large group market, one shall represent 
     insurers that offer coverage in the individual market, and 
     one shall represent carriers operating in a regional market.
       ``(iv) Two representatives of insurance agents and brokers.
       ``(v) Two independent representatives of the American 
     Academy of Actuaries who have familiarity with the actuarial 
     methods applicable to health insurance.
       ``(B) Ex officio member.--A representative of the Secretary 
     shall serve as an ex officio member of the Board.
       ``(3) Advisory panel.--The Secretary shall establish an 
     advisory panel to provide advice to the Board, and shall 
     appoint its members after considering the recommendations of 
     professional organizations representing the entities and 
     constituencies identified in this paragraph:
       ``(A) Two representatives of small business health plans.
       ``(B) Two representatives of employers, of which one shall 
     represent small employers and one shall represent large 
     employers.
       ``(C) Two representatives of consumer organizations.
       ``(D) Two representatives of health care providers.
       ``(4) Qualifications.--The membership of the Board shall 
     include individuals with national recognition for their 
     expertise in health finance and economics, actuarial science, 
     health plans, providers of health services, and other related 
     fields, who provide a mix of different professionals, broad 
     geographic representation, and a balance between urban and 
     rural representatives.
       ``(5) Ethical disclosure.--The Secretary shall establish a 
     system for public disclosure by members of the Board of 
     financial and other potential conflicts of interest relating 
     to such members. Members of the Board shall be treated as 
     employees of Congress for purposes of applying title I of the 
     Ethics in Government Act of 1978 (Public Law 95-521).
       ``(6) Director and staff.--Subject to such review as the 
     Secretary deems necessary to assure the efficient 
     administration of the Board, the chair and vice-chair of the 
     Board may--
       ``(A) employ and fix the compensation of an Executive 
     Director (subject to the approval of the Comptroller General) 
     and such other personnel as may be necessary to carry out its 
     duties (without regard to the provisions of title 5, United 
     States Code, governing appointments in the competitive 
     service);
       ``(B) seek such assistance and support as may be required 
     in the performance of its duties from appropriate Federal 
     departments and agencies;
       ``(C) enter into contracts or make other arrangements, as 
     may be necessary for the conduct of the work of the Board 
     (without regard to section 3709 of the Revised Statutes (41 
     U.S.C. 5));

[[Page 7637]]

       ``(D) make advance, progress, and other payments which 
     relate to the work of the Board;
       ``(E) provide transportation and subsistence for persons 
     serving without compensation; and
       ``(F) prescribe such rules as it deems necessary with 
     respect to the internal organization and operation of the 
     Board.
       ``(7) Terms.--The members of the Board shall serve for the 
     duration of the Board. Vacancies in the Board shall be filled 
     as needed in a manner consistent with the composition 
     described in paragraph (2).
       ``(b) Development of Harmonized Standards.--
       ``(1) In general.--In accordance with the process described 
     in subsection (c), the Board shall identify and recommend 
     nationally harmonized standards for each of the following 
     process categories:
       ``(A) Form filing and rate filing.--Form and rate filing 
     standards shall be established which promote speed to market 
     and include the following defined areas for States that 
     require such filings:
       ``(i) Procedures for form and rate filing pursuant to a 
     streamlined administrative filing process.
       ``(ii) Timeframes for filings to be reviewed by a State if 
     review is required before they are deemed approved.
       ``(iii) Timeframes for an eligible insurer to respond to 
     State requests following its review.
       ``(iv) A process for an eligible insurer to self-certify.
       ``(v) State development of form and rate filing templates 
     that include only non-preempted State law and Federal law 
     requirements for eligible insurers with timely updates.
       ``(vi) Procedures for the resubmission of forms and rates.
       ``(vii) Disapproval rationale of a form or rate filing 
     based on material omissions or violations of non-preempted 
     State law or Federal law with violations cited and explained.
       ``(viii) For States that may require a hearing, a rationale 
     for hearings based on violations of non-preempted State law 
     or insurer requests.
       ``(B) Market conduct review.--Market conduct review 
     standards shall be developed which provide for the following:
       ``(i) Mandatory participation in national databases.
       ``(ii) The confidentiality of examination materials.
       ``(iii) The identification of the State agency with primary 
     responsibility for examinations.
       ``(iv) Consultation and verification of complaint data with 
     the eligible insurer prior to State actions.
       ``(v) Consistency of reporting requirements with the 
     recordkeeping and administrative practices of the eligible 
     insurer.
       ``(vi) Examinations that seek to correct material errors 
     and harmful business practices rather than infrequent errors.
       ``(vii) Transparency and publishing of the State's 
     examination standards.
       ``(viii) Coordination of market conduct analysis.
       ``(ix) Coordination and nonduplication between State 
     examinations of the same eligible insurer.
       ``(x) Rationale and protocols to be met before a full 
     examination is conducted.
       ``(xi) Requirements on examiners prior to beginning 
     examinations such as budget planning and work plans.
       ``(xii) Consideration of methods to limit examiners' fees 
     such as caps, competitive bidding, or other alternatives.
       ``(xiii) Reasonable fines and penalties for material errors 
     and harmful business practices.
       ``(C) Prompt payment of claims.--The Board shall establish 
     prompt payment standards for eligible insurers based on 
     standards similar to those applicable to the Social Security 
     Act as set forth in section 1842(c)(2) of such Act (42 U.S.C. 
     1395u(c)(2)). Such prompt payment standards shall be 
     consistent with the timing and notice requirements of the 
     claims procedure rules to be specified under subparagraph 
     (D), and shall include appropriate exceptions such as for 
     fraud, nonpayment of premiums, or late submission of claims.
       ``(D) Internal review.--The Board shall establish standards 
     for claims procedures for eligible insurers that are 
     consistent with the requirements relating to initial claims 
     for benefits and appeals of claims for benefits under the 
     Employee Retirement Income Security Act of 1974 as set forth 
     in section 503 of such Act (29 U.S.C. 1133) and the 
     regulations thereunder.
       ``(2) Recommendations.--The Board shall recommend 
     harmonized standards for each element of the categories 
     described in subparagraph (A) through (D) of paragraph (1) 
     within each such market. Notwithstanding the previous 
     sentence, the Board shall not recommend any harmonized 
     standards that disrupt, expand, or duplicate the covered 
     benefit, service, or category of provider mandate standards 
     provided for in section 2922.
       ``(c) Process for Identifying Harmonized Standards.--
       ``(1) In general.--The Board shall develop recommendations 
     to harmonize inconsistent State insurance laws with respect 
     to each of the process categories described in subparagraphs 
     (A) through (D) of subsection (b)(1).
       ``(2) Requirements.--In adopting standards under this 
     section, the Board shall consider the following:
       ``(A) Any model acts or regulations of the National 
     Association of Insurance Commissioners in each of the process 
     categories described in subparagraphs (A) through (D) of 
     subsection (b)(1).
       ``(B) Substantially similar standards followed by a 
     plurality of States, as reflected in existing State laws, 
     relating to the specific process categories described in 
     subparagraphs (A) through (D) of subsection (b)(1).
       ``(C) Any Federal law requirement related to specific 
     process categories described in subparagraphs (A) through (D) 
     of subsection (b)(1).
       ``(D) In the case of the adoption of any standard that 
     differs substantially from those referred to in subparagraphs 
     (A), (B), or (C), the Board shall provide evidence to the 
     Secretary that such standard is necessary to protect health 
     insurance consumers or promote speed to market or 
     administrative efficiency.
       ``(E) The criteria specified in clauses (i) through (iii) 
     of subsection (d)(2)(B).
       ``(d) Recommendations and Certification by Secretary.--
       ``(1) Recommendations.--Not later than 18 months after the 
     date on which all members of the Board are selected under 
     subsection (a), the Board shall recommend to the Secretary 
     the certification of the harmonized standards identified 
     pursuant to subsection (c).
       ``(2) Certification.--
       ``(A) In general.--Not later than 120 days after receipt of 
     the Board's recommendations under paragraph (1), the 
     Secretary shall certify the recommended harmonized standards 
     as provided for in subparagraph (B), and issue such standards 
     in the form of an interim final regulation.
       ``(B) Certification process.--The Secretary shall establish 
     a process for certifying the recommended harmonized standard, 
     by category, as recommended by the Board under this section. 
     Such process shall--
       ``(i) ensure that the certified standards for a particular 
     process area achieve regulatory harmonization with respect to 
     health plans on a national basis;
       ``(ii) ensure that the approved standards are the minimum 
     necessary, with regard to substance and quantity of 
     requirements, to protect health insurance consumers and 
     maintain a competitive regulatory environment; and
       ``(iii) ensure that the approved standards will not limit 
     the range of group health plan designs and insurance 
     products, such as catastrophic coverage only plans, health 
     savings accounts, and health maintenance organizations, that 
     might otherwise be available to consumers.
       ``(3) Effective date.--The standards certified by the 
     Secretary under paragraph (2) shall be effective on the date 
     that is 18 months after the date on which the Secretary 
     certifies the harmonized standards.
       ``(e) Termination.--The Board shall terminate and be 
     dissolved after making the recommendations to the Secretary 
     pursuant to subsection (d)(1).
       ``(f) Ongoing Review.--Not earlier than 3 years after the 
     termination of the Board under subsection (e), and not 
     earlier than every 3 years thereafter, the Secretary, in 
     consultation with the National Association of Insurance 
     Commissioners and the entities and constituencies represented 
     on the Board and the Advisory Panel, shall prepare and submit 
     to the appropriate committees of Congress a report that 
     assesses the effect of the harmonized standards on access, 
     cost, and health insurance market functioning. The Secretary 
     may, based on such report and applying the process 
     established for certification under subsection (d)(2)(B), in 
     consultation with the National Association of Insurance 
     Commissioners and the entities and constituencies represented 
     on the Board and the Advisory Panel, update the harmonized 
     standards through notice and comment rulemaking.
       ``(g) Publication.--
       ``(1) Listing.--The Secretary shall maintain an up to date 
     listing of all harmonized standards certified under this 
     section on the Internet website of the Department of Health 
     and Human Services.
       ``(2) Sample contract language.--The Secretary shall 
     publish on the Internet website of the Department of Health 
     and Human Services sample contract language that incorporates 
     the harmonized standards certified under this section, which 
     may be used by insurers seeking to qualify as an eligible 
     insurer. The types of harmonized standards that shall be 
     included in sample contract language are the standards that 
     are relevant to the contractual bargain between the insurer 
     and insured.
       ``(h) State Adoption and Enforcement.--Not later than 18 
     months after the certification by the Secretary of harmonized 
     standards under this section, the States may adopt such 
     harmonized standards (and become an adopting State) and, in 
     which case, shall enforce the harmonized standards pursuant 
     to State law.

     ``SEC. 2933. APPLICATION AND PREEMPTION.

       ``(a) Superceding of State Law.--

[[Page 7638]]

       ``(1) In general.--The harmonized standards certified under 
     this subtitle shall supersede any and all State laws of a 
     non-adopting State insofar as such State laws relate to the 
     areas of harmonized standards as applied to an eligible 
     insurer, or health insurance coverage issued by a eligible 
     insurer, including with respect to coverage issued to a small 
     business health plan, in a nonadopting State.
       ``(2) Nonadopting states.--This subtitle shall supersede 
     any and all State laws of a nonadopting State (whether 
     enacted prior to or after the date of enactment of this 
     title) insofar as they may--
       ``(A) prohibit an eligible insurer from offering, 
     marketing, or implementing health insurance coverage 
     consistent with the harmonized standards; or
       ``(B) have the effect of retaliating against or otherwise 
     punishing in any respect an eligible insurer for offering, 
     marketing, or implementing health insurance coverage 
     consistent with the harmonized standards under this subtitle.
       ``(b) Savings Clause and Construction.--
       ``(1) Nonapplication to adopting states.--Subsection (a) 
     shall not apply with respect to adopting States.
       ``(2) Nonapplication to certain insurers.--Subsection (a) 
     shall not apply with respect to insurers that do not qualify 
     as eligible insurers who offer health insurance coverage in a 
     nonadopting State.
       ``(3) Nonapplication where obtaining relief under state 
     law.--Subsection (a)(1) shall not supersede any State law of 
     a nonadopting State to the extent necessary to permit 
     individuals or the insurance department of the State (or 
     other State agency) to obtain relief under State law to 
     require an eligible insurer to comply with the harmonized 
     standards under this subtitle.
       ``(4) Non-application where consistent with market conduct 
     examination harmonized standard.--Subsection (a)(1) shall not 
     supersede any State law of a nonadopting State that relates 
     to the harmonized standards issued under section 
     2932(b)(1)(B) to the extent that the State agency responsible 
     for regulating insurance (or other applicable State agency) 
     exercises its authority under State law consistent with the 
     harmonized standards issued under section 2932(b)(1)(B).
       ``(5) No effect on preemption.--In no case shall this 
     subtitle be construed to limit or affect in any manner the 
     preemptive scope of sections 502 and 514 of the Employee 
     Retirement Income Security Act of 1974. In no case shall this 
     subtitle be construed to create any cause of action under 
     Federal or State law or enlarge or affect any remedy 
     available under the Employee Retirement Income Security Act 
     of 1974.
       ``(6) Preemption limited to harmonized standards.--
     Subsection (a) shall not preempt any State law that does not 
     have a reference to or a connection with State requirements 
     for form and rate filing, market conduct reviews, prompt 
     payment of claims, or internal reviews that would otherwise 
     apply to eligible insurers.
       ``(c) Effective Date.--This section shall apply beginning 
     on the date that is 18 months and one day after the date on 
     harmonized standards are certified by the Secretary under 
     this subtitle.

     ``SEC. 2934. CIVIL ACTIONS AND JURISDICTION.

       ``(a) In General.--The courts of the United States shall 
     have exclusive jurisdiction over civil actions involving the 
     interpretation of this subtitle.
       ``(b) Actions.--An eligible insurer may bring an action in 
     the district courts of the United States for injunctive or 
     other equitable relief against any officials or agents of a 
     nonadopting State in connection with any conduct or action, 
     or proposed conduct or action, by such officials or agents 
     which violates, or which would if undertaken violate, section 
     2933.
       ``(c) Direct Filing in Court of Appeals.--At the election 
     of the eligible insurer, an action may be brought under 
     subsection (b) directly in the United States Court of Appeals 
     for the circuit in which the nonadopting State is located by 
     the filing of a petition for review in such Court.
       ``(d) Expedited Review.--
       ``(1) District court.--In the case of an action brought in 
     a district court of the United States under subsection (b), 
     such court shall complete such action, including the issuance 
     of a judgment, prior to the end of the 120-day period 
     beginning on the date on which such action is filed, unless 
     all parties to such proceeding agree to an extension of such 
     period.
       ``(2) Court of appeals.--In the case of an action brought 
     directly in a United States Court of Appeal under subsection 
     (c), or in the case of an appeal of an action brought in a 
     district court under subsection (b), such Court shall 
     complete all action on the petition, including the issuance 
     of a judgment, prior to the end of the 60-day period 
     beginning on the date on which such petition is filed with 
     the Court, unless all parties to such proceeding agree to an 
     extension of such period.
       ``(e) Standard of Review.--A court in an action filed under 
     this section, shall render a judgment based on a review of 
     the merits of all questions presented in such action and 
     shall not defer to any conduct or action, or proposed conduct 
     or action, of a nonadopting State.

     ``SEC. 2935. AUTHORIZATION OF APPROPRIATIONS; RULE OF 
                   CONSTRUCTION.

       ``(a) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to carry out this subtitle.
       ``(b) Health Savings Accounts.--Nothing in this subtitle 
     shall be construed to create any mandates for coverage of 
     benefits for HSA-qualified health plans that would require 
     reimbursements in violation of section 223(c)(2) of the 
     Internal Revenue Code of 1986.''.
                                 ______
                                 
  SA 3889. Mr. FRIST proposed an amendment to the bill S. 1955, to 
amend title I of the Employee Retirement Security Act of 1974 and the 
Public Health Service Act to expand health care access and reduce costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; as follows:

       In the amendment strike the number ``3'' and insert the 
     number ``4''.
                                 ______
                                 
  SA 3890. Mr. FRIST proposed an amendment to amendment SA 3889 
proposed by Mr. Frist to the bill S. 1955, to amend title I of the 
Employee Retirement Security Act of 1974 and the Public Health Service 
Act to expand health care access and reduce costs through the creation 
of small business health plans and through modernization of the health 
insurance marketplace; as follows:

       At the end of the amendment add the following:
       ``This act shall become effective 3 days after enactment.''
                                 ______
                                 
  SA 3891. Ms. COLLINS (for herself and Ms. Murkowski) submitted an 
amendment intended to be proposed by her to the bill S. 1955, to amend 
title I of the Employee Retirement Security Act of 1974 and the Public 
Health Service Act to expand health care access and reduce costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; which was ordered to 
lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. PROHIBITION ON DISCRIMINATION AGAINST HEALTH CARE 
                   PROVIDERS.

       Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), a health insurance issuer to 
     which this Act (or amendment) applies shall comply with 
     applicable State laws that prohibit discrimination with 
     respect to participation, reimbursement, or indemnification 
     under a health plan or other health insurance coverage 
     against any health care provider who is acting within the 
     scope of that provider's license or certification under 
     applicable State law.
                                 ______
                                 
  SA 3892. Ms. COLLINS (for herself and Mr. Bingaman) submitted an 
amendment intended to be proposed by her to the bill S. 1955, to amend 
title I of the Employee Retirement Security Act of 1974 and the Public 
Health Service Act to expand health care access and reduce costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; which was ordered to 
lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. DIABETES TREATMENT, EDUCATION, AND SUPPLIES.

       Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), a health insurance issuer to 
     which this Act (or amendment) applies shall comply with State 
     laws that require coverage for diabetes treatment, education, 
     supplies, and prescription drugs and biologics.
                                 ______
                                 
  SA 3893. Ms. COLLINS (for herself and Mr. Feingold) submitted an 
amendment intended to be proposed by her to the bill S. 1955, to amend 
title I of the Employee Retirement Security Act of 1974 and the Public 
Health Service Act to expand health care access and reduce costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; which was ordered to 
lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. COVERAGE OF CERTAIN INJURIES SUSTAINED DURING LEGAL 
                   ACTIVITIES.

       (a) ERISA.--Section 702(a)(3) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1182(a)(3)) is 
     amended--
       (1) by striking ``Construction.--For'' and inserting the 
     following: ``Scope.--
       ``(A) Waiting periods.--For''; and
       (2) by adding at the end the following:

[[Page 7639]]

       ``(B) Limitation on denial of benefits.--For purposes of 
     paragraph (2), a group health plan, or a health insurance 
     issuer offering group health insurance coverage in connection 
     with a group health plan, may not deny benefits otherwise 
     provided under the plan or coverage for the treatment of an 
     injury solely because such injury resulted from the 
     participation of the individual in a legal mode of 
     transportation or a legal recreational activity.''.
       (b) PHSA.--Section 2702(a)(3) of the Public Health Service 
     Act (42 U.S.C. 300gg-1(a)(3)) is amended--
       (1) by striking ``Construction.--For'' and inserting the 
     following: ``Scope.--
       ``(A) Waiting periods.--For''; and
       (2) by adding at the end the following:
       ``(B) Limitation on denial of benefits.--For purposes of 
     paragraph (2), a group health plan, or a health insurance 
     issuer offering group health insurance coverage in connection 
     with a group health plan, may not deny benefits otherwise 
     provided under the plan or coverage for the treatment of an 
     injury solely because such injury resulted from the 
     participation of the individual in a legal mode of 
     transportation or a legal recreational activity.''.
       (c) Internal Revenue Code.--Section 9802(a)(3) of the 
     Internal Revenue Code of 1986 is amended--
       (1) by striking ``Construction.--For'' and inserting the 
     following: ``Scope.--
       ``(A) Waiting periods.--For''; and
       (2) by adding at the end the following:
       ``(B) Limitation on denial of benefits.--For purposes of 
     paragraph (2), a group health plan may not deny benefits 
     otherwise provided under the plan for the treatment of an 
     injury solely because such injury resulted from the 
     participation of the individual in a legal mode of 
     transportation or a legal recreational activity.''.
                                 ______
                                 
  SA 3894. Ms. LANDRIEU submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. WAIVERS UNDER TITLE XXVI OF THE PUBLIC HEALTH 
                   SERVICE ACT FOR LOUISIANA FOR FISCAL YEARS 2007 
                   AND 2008.

       (a) In General.--For fiscal years 2007 and 2008, the 
     Secretary of Health and Human Services shall waive the 
     requirements of, with respect to Louisiana and any eligible 
     metropolitan area in Louisiana, the following sections of the 
     Public Health Service Act:
       (1) Section 2611(b)(1) of such Act (42 U.S.C. 300ff-
     21(b)(1)).
       (2) Section 2617(b)(6)(E) of such Act (42 U.S.C. 300ff-
     27(b)(6)(E)).
       (3) Section 2617(d) of such Act (42 U.S.C. 300ff-27(d)).
       (b) Consequence of Waiver.--For fiscal years 2007 and 2008, 
     the Secretary of Health and Human Services--
       (1) may not prevent Louisiana or any eligible metropolitan 
     area in Louisiana from receiving or utilizing, or both, funds 
     granted or distributed, or both, pursuant to title XXVI of 
     the Public Health Service Act (42 U.S.C. 300ff-11 et seq.) 
     because of the failure of Louisiana or any eligible 
     metropolitan area in Louisiana to comply with the 
     requirements of the sections listed in paragraphs (1) through 
     (3) of subsection (a);
       (2) may not take action due to such noncompliance; and
       (3) shall assess, evaluate, and review Louisiana or any 
     eligible metropolitan area's eligibility for funds under such 
     title XXVI as if Louisiana or such eligible metropolitan area 
     had fully complied with the requirements of the sections 
     listed in paragraphs (1) through (3) of subsection (a).
       (c) Sunset of Waiver.--The waiver authority provided under 
     subsection (a) shall apply for fiscal years 2007 and 2008 
     only. For fiscal year 2009 and each succeeding fiscal year, 
     Louisiana and any eligible metropolitan area in Louisiana 
     shall comply with each of the applicable requirements under 
     title XXVI of the Public Health Service Act (42 U.S.C. 300ff-
     11 et seq.).
                                 ______
                                 
  SA 3895. Ms. LANDRIEU submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. ELIGIBILITY OF HOSPITALS INCURRING HURRICANE-
                   RELATED DAMAGE AND LOSSES FOR STAFFORD ACT 
                   RELIEF AND ASSISTANCE.

       (a) Eligibility of Hospitals for Relief and Assistance 
     Related to Hurricanes Katrina and Rita.--Notwithstanding 
     sections 406(a)(1)(B) and 407(a)(2) of the Robert T. Stafford 
     Disaster Relief and Emergency Assistance Act (42 U.S.C. 
     5172(a)(1)(B) and 42 U.S.C. 5173(a)(2)) or any other 
     provision of such Act, any hospital that is located in a 
     State for which the President has issued a declaration of 
     major disaster with respect to Hurricane Katrina or Hurricane 
     Rita shall be eligible for relief and assistance under title 
     IV of such Act on the same terms and conditions as a hospital 
     that is a private nonprofit facility.
       (b) Limitation on Use of Certain Funds by Hospitals.--
     Notwithstanding section 406(c)(2)(B) of the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act (42 
     U.S.C. 5172(c)(2)(B)), any in lieu contributions elected by a 
     hospital eligible for such contributions pursuant to a 
     declaration of major disaster referred to in subsection (a) 
     may be used by the person owning or operating the hospital 
     only for the purposes specified in such section and only in--
       (1) the parish or county in which the hospital is located 
     or was located;
       (2) a parish or county that is contiguous to the parish or 
     county referred to in paragraph (1); or
       (3) a parish or county that is not more than 3 parishes or 
     counties away from the parish or county referred to in 
     paragraph (1).
                                 ______
                                 
  SA 3896. Mr. KENNEDY submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Responsible Public Readiness 
     and Emergency Preparedness Act''.

     SEC. 2. REPEAL.

       The Public Readiness and Emergency Preparedness Act 
     (division C of the Department of Defense, Emergency 
     Supplemental Appropriations to Address Hurricanes in the Gulf 
     of Mexico, and Pandemic Influenza Act, 2006 (Public Law 109-
     148)) is repealed.

     SEC. 3. NATIONAL BIODEFENSE INJURY COMPENSATION PROGRAM.

       (a) Establishment.--Section 224 of the Public Health 
     Service Act (42 U.S.C. 233) is amended by adding at the end 
     the following:
       ``(q) Biodefense Injury Compensation Program.--
       ``(1) Establishment.--There is established the Biodefense 
     Injury Compensation Program (referred to in this subsection 
     as the `Compensation Program') under which compensation may 
     be paid for death or any injury, illness, disability, or 
     condition that is likely (based on best available evidence) 
     to have been caused by the administration of a covered 
     countermeasure to an individual pursuant to a declaration 
     under subsection (p)(2).
       ``(2) Administration and interpretation.--The statutory 
     provisions governing the Compensation Program shall be 
     administered and interpreted in consideration of the program 
     goals described in paragraph (4)(B)(iii).
       ``(3) Procedures and standards.--The Secretary shall by 
     regulation establish procedures and standards applicable to 
     the Compensation Program that follow the procedures and 
     standards applicable under the National Vaccine Injury 
     Compensation Program established under section 2110, except 
     that the regulations promulgated under this paragraph shall 
     permit a person claiming injury or death related to the 
     administration of any covered countermeasure to file either--
       ``(A) a civil action for relief under subsection (p); or
       ``(B) a petition for compensation under this subsection.
       ``(4) Injury table.--
       ``(A) Inclusion.--For purposes of receiving compensation 
     under the Compensation Program with respect to a 
     countermeasure that is the subject of a declaration under 
     subsection (p)(2), the Vaccine Injury Table under section 
     2114 shall be deemed to include death and the injuries, 
     disabilities, illnesses, and conditions specified by the 
     Secretary under subparagraph (B)(ii).
       ``(B) Injuries, disabilities, illnesses, and conditions.--
       ``(i) Institute of medicine.--Not later than 30 days after 
     making a declaration described in subsection (p)(2), the 
     Secretary shall enter into a contract with the Institute of 
     Medicine, under which the Institute shall, within 180 days of 
     the date on which the contract is entered into, and 
     periodically thereafter as new information, including 
     information derived from the monitoring of those who were 
     administered the countermeasure, becomes available, provide 
     its expert recommendations on the injuries, disabilities, 
     illnesses,

[[Page 7640]]

     and conditions whose occurrence in one or more individuals 
     are likely (based on best available evidence) to have been 
     caused by the administration of a countermeasure that is the 
     subject of the declaration.
       ``(ii) Specification by secretary.--Not later than 30 days 
     after the receipt of the expert recommendations described in 
     clause (i), the Secretary shall, based on such 
     recommendations, specify those injuries, disabilities, 
     illnesses, and conditions deemed to be included in the 
     Vaccine Injury Table under section 2114 for the purposes 
     described in subparagraph (A).
       ``(iii) Program goals.--The Institute of Medicine, under 
     the contract under clause (i), shall make such 
     recommendations, the Secretary shall specify, under clause 
     (ii), such injuries, disabilities, illnesses, and conditions, 
     and claims under the Compensation Program under this 
     subsection shall be processed and decided taking into account 
     the following goals of such program:

       ``(I) To encourage persons to develop, manufacture, and 
     distribute countermeasures, and to administer covered 
     countermeasures to individuals, by limiting such persons' 
     liability for damages related to death and such injuries, 
     disabilities, illnesses, and conditions.
       ``(II) To encourage individuals to consent to the 
     administration of a covered countermeasure by providing 
     adequate and just compensation for damages related to death 
     and such injuries, disabilities, illnesses, or conditions.
       ``(III) To provide individuals seeking compensation for 
     damages related to the administration of a countermeasure 
     with a non-adversarial administrative process for obtaining 
     adequate and just compensation.

       ``(iv) Use of best available evidence.--The Institute of 
     Medicine, under the contract under clause (i), shall make 
     such recommendations, the Secretary shall specify, under 
     clause (ii), such injuries, disabilities, illnesses, and 
     conditions, and claims under the Compensation Program under 
     this subsection shall be processed and decided using the best 
     available evidence, including information from adverse event 
     reporting or other monitoring of those individuals who were 
     administered the countermeasure, whether evidence from 
     clinical trials or other scientific studies in humans is 
     available.
       ``(v) Application of section 2115.--With respect to section 
     2115(a)(2) as applied for purposes of this subsection, an 
     award for the estate of the deceased shall be--

       ``(I) if the deceased was under the age of 18, an amount 
     equal to the amount that may be paid to a survivor or 
     survivors as death benefits under the Public Safety Officers' 
     Benefits Program under subpart 1 of part L of title I of the 
     Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3796 et seq.); or
       ``(II) if the deceased was 18 years of age or older, the 
     greater of--

       ``(aa) the amount described in subclause (I); or
       ``(bb) the projected loss of employment income, except that 
     the amount under this item may not exceed an amount equal to 
     400 percent of the amount that applies under item (aa).
       ``(vi) Application of section 2116.--Section 2116(b) shall 
     apply to injuries, disabilities, illnesses, and conditions 
     initially specified or revised by the Secretary under clause 
     (ii), except that the exceptions contained in paragraphs (1) 
     and (2) of such section shall not apply.
       ``(C) Rule of construction.--Section 13632 (a)(3) of Public 
     Law 103-66 (107 Stat. 646) (making revisions by Secretary to 
     the Vaccine Injury Table effective on the effective date of a 
     corresponding tax) shall not be construed to apply to any 
     revision to the Vaccine Injury Table made under regulations 
     under this paragraph.
       ``(5) Application.--The Compensation Program applies to any 
     death or injury, illness, disability, or condition that is 
     likely (based on best available evidence) to have been caused 
     by the administration of a covered countermeasure to an 
     individual pursuant to a declaration under subsection (p)(2).
       ``(6) Special masters.--
       ``(A) Hiring.--In accordance with section 2112, the judges 
     of the United States Claims Court shall appoint a sufficient 
     number of special masters to address claims for compensation 
     under this subsection.
       ``(B) Budget authority.--There are appropriated to carry 
     out this subsection such sums as may be necessary for fiscal 
     year 2006 and each fiscal year thereafter. This subparagraph 
     constitutes budget authority in advance of appropriations and 
     represents the obligation of the Federal Government.
       ``(7) Covered countermeasure.--For purposes of this 
     subsection, the term `covered countermeasure' has the meaning 
     given to such term in subsection (p)(7)(A).
       ``(8) Funding.--Compensation made under the Compensation 
     Program shall be made from the same source of funds as 
     payments made under subsection (p).''.
       (b) Effective Date.--This section shall take effect as of 
     November 25, 2002 (the date of enactment of the Homeland 
     Security Act of 2002 (Pub. L. 107-296; 116 Stat. 2135)).

     SEC. 4. INDEMNIFICATION FOR MANUFACTURERS AND HEALTH CARE 
                   PROFESSIONALS WHO ADMINISTER MEDICAL PRODUCTS 
                   NEEDED FOR BIODEFENSE.

       Section 224(p) of the Public Health Service Act (42 U.S.C. 
     233(p)) is amended--
       (1) in the subsection heading by striking ``Smallpox'';
       (2) in paragraph (1), by striking ``against smallpox'';
       (3) in paragraph (2)--
       (A) in the paragraph heading, by striking ``against 
     smallpox''; and
       (B) in subparagraph (B), by striking clause (ii);
       (4) by striking paragraph (3) and inserting the following:
       ``(3) Exclusivity; offset.--
       ``(A) Exclusivity.--With respect to an individual to which 
     this subsection applies, such individual may bring a claim 
     for relief under--
       ``(i) this subsection;
       ``(ii) subsection (q); or
       ``(iii) part C.
       ``(B) Election of alternatives.--An individual may only 
     pursue one remedy under subparagraph (A) at any one time 
     based on the same incident or series of incidents. An 
     individual who elects to pursue the remedy under subsection 
     (q) or part C may decline any compensation awarded with 
     respect to such remedy and subsequently pursue the remedy 
     provided for under this subsection. An individual who elects 
     to pursue the remedy provided for under this subsection may 
     not subsequently pursue the remedy provided for under 
     subsection (q) or part C.
       ``(C) Statute of limitations.--For purposes of determining 
     how much time has lapsed when applying statute of limitations 
     requirements relating to remedies under subparagraph (A), any 
     limitation of time for commencing an action, or filing an 
     application, petition, or claim for such remedies, shall be 
     deemed to have been suspended for the periods during which an 
     individual pursues a remedy under such subparagraph.
       ``(D) Offset.--The value of all compensation and benefits 
     provided under subsection (q) or part C of this title for an 
     incident or series of incidents shall be offset against the 
     amount of an award, compromise, or settlement of money 
     damages in a claim or suit under this subsection based on the 
     same incident or series of incidents.'';
       (5) in paragraph (6)--
       (A) in subparagraph (A), by inserting ``or under subsection 
     (q) or part C'' after ``under this subsection''; and
       (B) by redesignating subparagraph (B) as subparagraph (C);
       (C) by inserting after subparagraph (A), the following:
       ``(B) Grossly negligent, reckless, or illegal conduct and 
     willful misconduct.--For purposes of subparagraph (A), 
     grossly negligent, reckless, or illegal conduct or willful 
     misconduct shall include the administration by a qualified 
     person of a covered countermeasure to an individual who was 
     not within a category of individuals covered by a declaration 
     under subsection (p)(2) with respect to such countermeasure 
     where the qualified person fails to have had reasonable 
     grounds to believe such individual was within such a 
     category.''; and
       (D) by adding at the end the following:
       ``(D) Liability of the united states.--The United States 
     shall be liable under this subsection with respect to a claim 
     arising out of the manufacture, distribution, or 
     administration of a covered countermeasure regardless of 
     whether--
       ``(i) the cause of action seeking compensation is alleged 
     as negligence, strict liability, breach of warranty, failure 
     to warn, or other action; or
       ``(ii) the covered countermeasure is designated as a 
     qualified anti-terrorism technology under the SAFETY Act (6 
     U.S.C. 441 et seq.).''
       ``(E) Governing law.--Notwithstanding the provisions of 
     section 1346(b)(1) and chapter 171 of title 28, United States 
     Code, as they relate to governing law, the liability of the 
     United States as provided in this subsection shall be in 
     accordance with the law of the place of injury.
       ``(F) Military personnel and united states citizens 
     overseas.--
       ``(i) Military personnel.--The liability of the United 
     States as provided in this subsection shall extend to claims 
     brought by United States military personnel.
       ``(ii) Claims arising in a foreign country.--
     Notwithstanding the provisions of section 2680(k) of title 
     28, United States Code, the liability of the United States as 
     provided for in the subsection shall extend to claims based 
     on injuries arising in a foreign country where the injured 
     party is a member of the United States military, is the 
     spouse or child of a member of the United States military, or 
     is a United States citizen.
       ``(iii) Governing law.--With regard to all claims brought 
     under clause (ii), and notwithstanding the provisions of 
     section 1346(b)(1) and chapter 171 of title 28, United States 
     Code, and of subparagraph (C), as they relate to governing 
     law, the liability of the United States as provided in this 
     subsection shall be in accordance with the law of the 
     claimant's domicile in the United States or most recent 
     domicile with the United States.''; and
       (6) in paragraph (7)--
       (A) by striking subparagraph (A) and inserting the 
     following:

[[Page 7641]]

       ``(A) Covered countermeasure.--The term `covered 
     countermeasure', means--
       ``(i) a substance that is--

       ``(I)(aa) used to prevent or treat smallpox (including the 
     vaccinia or another vaccine); or
       ``(bb) vaccinia immune globulin used to control or treat 
     the adverse effects of vaccinia inoculation; and
       ``(II) specified in a declaration under paragraph (2); or

       ``(ii) a drug (as such term is defined in section 201(g)(1) 
     of the Federal Food, Drug, and Cosmetic Act), biological 
     product (as such term is defined in section 351(i) of this 
     Act), or device (as such term is defined in section 201(h) of 
     the Federal Food, Drug, and Cosmetic Act) that--

       ``(I) the Secretary determines to be a priority (consistent 
     with sections 302(2) and 304(a) of the Homeland Security Act 
     of 2002) to treat, identify, or prevent harm from any 
     biological, chemical, radiological, or nuclear agent 
     identified as a material threat under section 319F-
     2(c)(2)(A)(ii), or to treat, identify, or prevent harm from a 
     condition that may result in adverse health consequences or 
     death and may be caused by administering a drug, biological 
     product, or device against such an agent;
       ``(II) is--

       ``(aa) authorized for emergency use under section 564 of 
     the Federal Food, Drug, and Cosmetic Act, so long as the 
     manufacturer of such drug, biological product, or device 
     has--
       ``(AA) made all reasonable efforts to obtain applicable 
     approval, clearance, or licensure; and
       ``(BB) cooperated fully with the requirements of the 
     Secretary under such section 564; or
       ``(bb) approved or licensed solely pursuant to the 
     regulations under subpart I of part 314 or under subpart H of 
     part 601 of title 21, Code of Federal Regulations (as in 
     effect on the date of enactment of the National Biodefense 
     Act of 2005); and

       ``(III) is specified in a declaration under paragraph 
     (2).''; and

       (B) in subparagraph (B)--
       (i) by striking clause (ii), and inserting the following:
       ``(ii) a health care entity, a State, or a political 
     subdivision of a State under whose auspices such 
     countermeasure was administered;'' and
       (vi) in clause (viii), by inserting before the period ``if 
     such individual performs a function for which a person 
     described in clause (i), (ii), or (iv) is a covered person''.
                                 ______
                                 
  SA 3897. Mr. KENNEDY submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       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 ``Medicare 
     for All Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Medicare for all.

                     ``TITLE XXII--MEDICARE FOR ALL

``Sec. 2201. Description of program.
``Sec. 2202. Eligibility, enrollment, and coverage.
``Sec. 2203. Benefits.
``Sec. 2204. Choice of coverage under private health care delivery 
              systems.
``Sec. 2205. Medicare for All Trust Fund.
``Sec. 2206. Administration.
Sec. 3. Financing through employment tax.

     SEC. 2. MEDICARE FOR ALL.

       (a) Establishment of Program.--The Social Security Act is 
     amended by adding at the end the following:

                     ``TITLE XXII--MEDICARE FOR ALL

     ``SEC. 2201. DESCRIPTION OF PROGRAM.

       ``The program under this title--
       ``(1) ensures that all Americans have high quality, 
     affordable health care;
       ``(2) ensures that all Americans have access to health care 
     as good as their Member of Congress receives; and
       ``(3) reduces the cost of health care and enhances American 
     economic competitiveness in the global marketplace.

     ``SEC. 2202. ELIGIBILITY, ENROLLMENT, AND COVERAGE.

       ``(a) Eligibility.--
       ``(1) In general.--Each eligible individual is entitled to 
     benefits under the program under this title.
       ``(2) Eligible individual.--
       ``(A) In general.--For purposes of this title, the term 
     `eligible individual' means an individual who--
       ``(i) is--

       ``(I) a citizen of the United States; or
       ``(II) a person who is lawfully present in the United 
     States; and

       ``(ii) is not eligible for benefits under part A or B of 
     title XVIII.
       ``(B) Lawfully present.--For purposes of subparagraph 
     (A)(i)(II), a person is lawfully present in the United States 
     if such person--
       ``(i) is described in section 431 of Public Law 104-193;
       ``(ii) is described in section 103.12 of title 8, Code of 
     Federal Regulations (as in effect as of the date of enactment 
     of the Medicare for All Act);
       ``(iii) is eligible to apply for employment authorization 
     from the Department of Homeland Security as listed in section 
     274a.12 of title 8, Code of Federal Regulations (as in effect 
     as of the date of enactment of the Medicare for All Act); or
       ``(iv) is otherwise determined to be lawfully present in 
     the United States under criteria established by the 
     Secretary, in consultation with the Secretary of Homeland 
     Security.
       ``(3) Phase-in of eligibility.--Under rules established by 
     the Secretary, eligibility for benefits under this title 
     shall be phased-in as follows:
       ``(A) During the first 5 years the program under this title 
     is in operation, eligible individuals who are under 20 years 
     of age or who are over 55 years of age are eligible for such 
     benefits.
       ``(B) During the second 5 years the program under this 
     title is in operation, eligible individuals who are under 30 
     years of age or who are over 45 years of age are eligible for 
     such benefits.
       ``(C) All eligible individuals are eligible for such 
     benefits beginning with the eleventh year in which the 
     program under this title is in operation.
       ``(4) Ensuring that eligible individuals do not age-out of 
     program.--For purposes of subparagraphs (A) and (B) of 
     paragraph (3)--
       ``(A) the determination of whether an eligible individual 
     meets the age requirements under such subparagraphs shall be 
     made on the date of enrollment in the program under this 
     title; and
       ``(B) such an individual's enrollment under such program 
     may not be terminated because the individual no longer meets 
     such age requirements.
       ``(b) Automatic Enrollment.--
       ``(1) In general.--The Secretary shall establish a process 
     under which each eligible individual is deemed to be enrolled 
     under the program under this title. Such process shall 
     include the following:
       ``(A) Deemed enrollment of an eligible individual upon 
     birth in the United States.
       ``(B) Enrollment of eligible individuals at the time of 
     immigration into the United States.
       ``(2) Issuance of card.--The Secretary shall provide for 
     issuance of an appropriate card for individuals entitled to 
     benefits under the program under this title. Not later than 
     the sixth year the program under this title is in operation, 
     the Secretary shall ensure that each such card is linked 
     securely, and with strong privacy protections, to an 
     electronic health record for each such individual. In order 
     to accomplish such linkage, the Secretary is authorized to 
     award grants, issue contracts, alter reimbursement under the 
     program under this title, or provide such other incentives as 
     are reasonable and necessary.
       ``(c) Coverage.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     shall provide for coverage of benefits for items and services 
     furnished on and after the date an individual is entitled to 
     benefits under the program under this title.
       ``(2) Initial coverage.--No coverage is available under the 
     program under this title for items and services furnished 
     before the date that is 18 months after the date of the 
     enactment of the Medicare For All Act.
       ``(3) Expiration of coverage.--An individual's coverage 
     under the program under this title shall terminate as of the 
     date the individual is no longer an eligible individual.
       ``(d) Relation to Other Programs.--
       ``(1) Construction.--
       ``(A) Continued operation of public programs.--Nothing in 
     this title shall be construed as requiring (or preventing) an 
     individual who is entitled to benefits under the program 
     under this title from obtaining benefits under any other 
     public health care program to which the individual is 
     entitled, including under a State Medicaid plan under title 
     XIX, the State Children's Health Insurance Program under 
     title XXI, a health program of the Department of Defense 
     under chapter 55 of title 10, United States Code, a health 
     program of the Department of Veterans Affairs under chapter 
     17 of title 38 of such Code, or a medical care program of the 
     Indian Health Service or of a tribal organization.
       ``(B) Continued operation of private health insurance.--
     Nothing in this title shall be construed as preventing an 
     individual who is entitled to benefits under the program 
     under this title from obtaining benefits that supplement or 
     improve the benefits available under such program from any 
     private health insurance plan or policy.
       ``(2) Primary payor; other public programs providing wrap 
     around benefits.--The program under this title shall be 
     primary payor to other public health care benefit programs 
     and the benefits under such other public health care benefit 
     programs shall supplement the benefits under the program 
     under this title.

[[Page 7642]]



     ``SEC. 2203. BENEFITS.

       ``(a) Comprehensive Benefit Package.--The Secretary shall 
     provide for benefits under the program under this title 
     consistent with the following:
       ``(1) Medicare fee-for-service benefits.--The benefits 
     include the full range and scope of benefits available under 
     the original fee-for-service program under parts A and B of 
     title XVIII.
       ``(2) Prescription drug coverage.--The benefits include 
     coverage of prescription drugs at least as comprehensive as 
     the prescription drug coverage offered as of January 1, 2006, 
     under the Blue Cross/Blue Shield Standard Plan provided under 
     the Federal employees health benefits program under chapter 
     89 of title 5, United States Code (in this title referred to 
     as `FEHBP'). Such coverage shall be administered in the same 
     manner as other benefits under this section.
       ``(3) Inclusion of epsdt.--The benefits include benefits 
     for early and periodic screening, diagnostic, and treatment 
     services (as defined in section 1905(r)) for individuals who 
     are under the age of 21.
       ``(4) Parity in coverage of mental health benefits.--
       ``(A) In general.--There shall not be any treatment 
     limitations or financial requirements with respect to the 
     coverage of benefits for mental illnesses unless comparable 
     treatment limitations or financial requirements are imposed 
     on medical and surgical benefits. Nothing in this 
     subparagraph shall be construed to require coverage for 
     mental health benefits that are not medically necessary or to 
     prohibit the appropriate medical management of such benefits.
       ``(B) Related definitions.--For purposes of this 
     paragraph--
       ``(i) Financial requirements.--The term `financial 
     requirements' includes deductibles, coinsurance, co-payments, 
     other cost-sharing, and limitations on the total amount that 
     may be paid by an individual with respect to benefits and 
     shall include the application of annual and lifetime limits.
       ``(ii) Mental health benefits.--The term `mental health 
     benefits' means benefits with respect to services for all 
     categories of mental health conditions listed in the 
     Diagnostic and Statistical Manual of Mental Disorders, Fourth 
     Edition (DSM IV-TR), or the most recent edition if different 
     than the Fourth Edition, if such services are included as 
     part of an authorized treatment plan that is in accordance 
     with standard protocols and such services meet medical 
     necessity criteria. Such term does not include benefits with 
     respect to the treatment of substance abuse or chemical 
     dependency.
       ``(iii) Treatment limitations.--The term `treatment 
     limitations' means limitations on the frequency of treatment, 
     number of visits or days of coverage, or other similar limits 
     on the duration or scope of treatment under the qualifying 
     health benefit plan.
       ``(5) Preventive services.--The benefits shall include 
     coverage of such additional preventive health care items and 
     services as the Secretary shall specify, in consultation with 
     the United States Preventive Services Task Force.
       ``(6) Home and community based services.--The benefits 
     shall include coverage of home and community-based services 
     described in section 1915(c)(4)(B).
       ``(7) Additional benefits.--The benefits shall include such 
     additional benefits that the Secretary determines 
     appropriate.
       ``(8) Revision.--Nothing in this subsection shall be 
     construed as preventing the Secretary from improving the 
     benefit package from time to time to account for changes in 
     medical practice, new information from medical research, and 
     other relevant developments in health science.
       ``(9) Adjustment authorized.--The Secretary shall, on a 
     regular basis, evaluate whether adding any of the benefits 
     described in paragraphs (1) through (7) is necessary or 
     advisable to promote the health of beneficiaries under the 
     program under title XVIII. The Secretary is authorized to 
     improve the benefits available under such program, based upon 
     such evaluation.
       ``(b) Cost-Sharing.--
       ``(1) In general.--Except as otherwise provided under this 
     subsection or subsection (a)(4), with respect to the benefits 
     described in subsection (a)(1), such benefits shall be 
     subject to the cost-sharing (in the form of deductibles, 
     coinsurance, and copayments) and premiums applicable under 
     the program described in such subsection.
       ``(2) Prescription drug coverage.--With respect to the 
     benefits described in subsection (a)(2), such benefits shall 
     be subject to the cost-sharing (in the form of deductibles, 
     coinsurance, and copayments) applicable under the plan 
     described in such subsection.
       ``(3) Treatment of preventive and additional services.--
     With respect to benefits described in paragraphs (5) and (7) 
     of subsection (a), such benefits shall be subject to cost-
     sharing (in the form of deductibles, coinsurance, and 
     copayments) that is consistent (as determined by the 
     Secretary) with the cost-sharing applicable under paragraph 
     (1).
       ``(4) Treatment of epsdt and home and community-based 
     services.--With respect to benefits described in paragraphs 
     (3) and (6) of subsection (a), such benefits shall be subject 
     to nominal cost-sharing (in the form of deductibles, 
     coinsurance, and copayments) that is consistent (as 
     determined by the Secretary) with the cost-sharing applicable 
     to such services under section 1916 (as in effect on January 
     1, 2006).
       ``(5) Reduction in cost-sharing for low-income 
     individuals.--The Secretary shall provide for reduced cost-
     sharing for low-income individuals in a manner that is no 
     less protective than the reduced cost-sharing for individuals 
     under section 1902(a)(10)(E) (as in effect on January 1, 
     2006).
       ``(c) Freedom to Choose Your Own Doctor and Health Plan.--
     Except in the case of individuals who elect enrollment in a 
     private health plan under section 2204, the provisions of 
     section 1802 shall apply under this title.
       ``(d) Payment Schedule.--
       ``(1) In general.--The Secretary, with the assistance of 
     the Medicare Payment Advisory Commission, shall develop and 
     implement a payment schedule for benefits covered under the 
     program under this title which are provided other than 
     through private health plans. To the extent feasible, such 
     payment schedule shall be consistent with comparable payment 
     schedules and reimbursement methodologies applied to benefits 
     provided under parts A and B of title XVIII, except, that 
     with respect to the coverage of prescription drugs, the 
     Secretary shall provide for payment in accordance with a 
     payment schedule developed and implemented under the previous 
     sentence.
       ``(2) Additional payments for quality.--The Secretary shall 
     establish procedures to provide reimbursement in addition to 
     the reimbursement under paragraph (1) to health care 
     providers that achieve measures (as established by the 
     Secretary in consultation with health care professionals and 
     groups representing eligible individuals) of health care 
     quality. The Secretary shall ensure that such measures 
     include measures of appropriate use of health information 
     technology.
       ``(e) Application of Beneficiary Protections.--The 
     Secretary shall provide for protections of beneficiaries 
     under the program under this title that are not less than the 
     beneficiary protections provided under title XVIII, including 
     appeal rights and limitations on balance billing.

     ``SEC. 2204. CHOICE OF COVERAGE UNDER PRIVATE HEALTH CARE 
                   DELIVERY SYSTEMS.

       ``(a) In General.--The Secretary shall provide a process 
     for--
       ``(1) the offering of private health plans for the 
     provision of benefits under the program under this title; and
       ``(2) the enrollment, disenrollment, termination, and 
     change in enrollment of eligible individuals in such plans.
       ``(b) Offering of Private Health Plans.--
       ``(1) In general.--The Secretary shall enter into contracts 
     with qualified entities for the offering of private health 
     plans under the program under this title. In entering into 
     such contracts the Secretary shall have the same authority 
     that the Director of the Office of Personnel Management has 
     with respect to health benefits plans under FEHBP.
       ``(2) Requirements.--The Secretary shall not enter into 
     such a contract for the offering of a private health plan 
     under the program under this title unless at least the 
     following requirements are met:
       ``(A) Benefits as good as your Congressman gets.--Benefits 
     under such plans are not less than the benefits offered to 
     Members of Congress and Federal employees under FEHBP. Such 
     plans may provide health benefits in addition to such 
     required benefits and may impose a premium for the provision 
     of benefits. Such plans may not provide for financial 
     payments or rebates to enrollees.
       ``(B) Beneficiary protections.--Enrollees in such plans 
     have beneficiary protections that are not less than the 
     beneficiary protections applicable under this title to 
     individuals not so enrolled and shall include beneficiary 
     protections applicable under both FEHBP and part C of title 
     XVIII.
       ``(C) Other administrative requirements.--The plans are 
     subject to such requirements relating to licensure and 
     solvency, protection against fraud and abuse, inspection, 
     disclosure, periodic auditing, and administrative operations 
     and efficiencies as the Secretary identifies, taking into 
     account similar requirements under FEHBP and part C of title 
     XVIII.
       ``(c) Annual Open Enrollment.--The process under subsection 
     (a)(2) shall provide for an annual open enrollment period in 
     which individuals may enroll, and change or terminate 
     enrollment, in private health plans in a manner similar to 
     that provided under FEHBP as of January 1, 2006.
       ``(d) Payment to Private Health Plans.--
       ``(1) In general.--In the case of an individual enrolled in 
     a private health plan under this section for a month, the 
     Secretary shall provide for payment of an amount equal to \1/
     12\ of the annual per capita amount (described in paragraph 
     (2), as adjusted under paragraph (3)).
       ``(2) Annual per capita amount.--The annual per capita 
     amount under this paragraph shall be the annual average per 
     capita cost of providing benefits under the program under 
     this title (including both individuals enrolled and not 
     enrolled under private health plan), as computed by the 
     Secretary based on

[[Page 7643]]

     rules similar to the rules described in section 1876(a)(4).
       ``(3) Risk-adjustment.--In making payment under this 
     subsection, the Secretary shall apply risk adjustment factors 
     similar to those applied to payments to Medicare Advantage 
     organizations under section 1853, except that the Secretary 
     shall ensure that payments under this subsection are adjusted 
     based on such factors to ensure that the health status of the 
     enrollee is reflected in such adjusted payments, including 
     adjusting for the difference between the health status of the 
     enrollee and individuals receiving benefits under the program 
     under this title who are not so enrolled. Payments under this 
     subsection must, in aggregate, reflect such differences.
       ``(e) Requirements for FEHBP Carriers.--Each contract 
     entered into or renewed under section 8902 of title 5, United 
     States Code, shall require the carrier to offer a plan under 
     this section on similar terms and conditions to the plan 
     offered by the carrier under FEHBP.

     ``SEC. 2205. MEDICARE FOR ALL TRUST FUND.

       ``(a) Establishment of Trust Fund.--There is hereby created 
     on the books of the Treasury of the United States a trust 
     fund to be known as the `Medicare for All Trust Fund' (in 
     this section referred to as the `Trust Fund'). The Trust Fund 
     shall consist of such gifts and bequests as may be made as 
     provided in section 201(i)(1), and such amounts as may be 
     deposited in, or appropriated to, such fund as provided in 
     this part.
       ``(b) Transfers to Trust Fund.--There are hereby 
     appropriated to the Medicare for All Trust Fund, out of any 
     moneys in the Treasury not otherwise appropriated, amounts 
     equivalent to--
       ``(1) the taxes received in the Treasury under sections 
     1401(c), 3101(c), and 3111(c) of the Internal Revenue Code of 
     1986;
       ``(2) such portion of the taxes received in the Treasury 
     under section 3201 as are attributable to the rate specified 
     in section 3101(c) of such Code;
       ``(3) such portion of the taxes received in the Treasury 
     under section 3211 of such Code as are attributable to the 
     sum of the rates specified in section 3101(c) and 3111(c) of 
     such Code; and
       ``(4) such portion of the taxes received in the Treasury 
     under section 3221 as are attributable to the rate specified 
     in section 3111(c) of such Code.
     The amounts appropriated by the preceding sentence shall be 
     transferred from time to time from the general fund in the 
     Treasury to the Trust Fund, such amounts to be determined on 
     the basis of estimates by the Secretary of the Treasury of 
     the taxes, specified in the preceding sentence, paid to or 
     deposited into the Treasury, and proper adjustments shall be 
     made in amounts subsequently transferred to the extent prior 
     estimates were in excess of or were less than the taxes 
     specified in such sentence.
       ``(c) Incorporation of Provisions.--
       ``(1) In general.--Subject to paragraph (2), subsections 
     (b) through (i) of section 1817 shall apply with respect to 
     the Trust Fund and this title in the same manner as they 
     apply with respect to the Federal Hospital Insurance Trust 
     Fund and part A of title XVIII, respectively.
       ``(2) Miscellaneous references.--In applying provisions of 
     section 1817 under paragraph (1)--
       ``(A) any reference in such section to `this part' is 
     construed to refer to this title;
       ``(B) any reference to taxes referred to in subsection (a) 
     of such section shall be construed to refer to the taxes 
     referred to in subsection (b) of this section; and
       ``(C) the Board of Trustees of the Medicare for All Trust 
     Fund shall be the same as the Board of Trustees of the 
     Federal Hospital Insurance Trust Fund.

     ``SEC. 2206. ADMINISTRATION.

       ``Except as otherwise provided in this title--
       ``(1) the Secretary shall enter into appropriate contracts 
     with providers of services, other health care providers, and 
     medicare administrative contractors, taking into account the 
     types of contracts used under title XVIII with respect to 
     such entities, to administer the program under this title;
       ``(2) benefits described in section 2203 that are payable 
     under the program under this title to such individuals shall 
     be paid in a manner specified by the Secretary (taking into 
     account, and based to the greatest extent practicable upon, 
     the manner in which they are provided under title XVIII); and
       ``(3) provider participation agreements under title XVIII 
     shall apply to enrollees and benefits under the program under 
     this title in the same manner as they apply to enrollees and 
     benefits under the program under title XVIII.''.
       (b) Conforming Amendments to Social Security Act 
     Provisions.--
       (1) Section 201(i)(1) of the Social Security Act (42 U.S.C. 
     401(i)(1)) is amended--
       (A) by striking ``or the Federal Supplementary '' and 
     inserting ``the Federal Supplementary''; and
       (B) by inserting ``or the Medicare for All Trust Fund'' 
     after ``such Trust Fund)''.
       (2) Section 201(g)(1)(A) of such Act (42 U.S.C. 
     401(g)(1)(A)) is amended by striking ``and the Federal 
     Supplementary Medical Insurance Trust Fund established by 
     title XVIII'' and inserting ``, the Federal Supplementary 
     Medical Insurance Trust Fund established by title XVIII, and 
     the Medicare for All Trust Fund established under title 
     XXII''.
       (c) Maintenance of Medicaid Eligibility and Benefits.--In 
     order for a State to continue to be eligible for payments 
     under section 1903(a) of the Social Security Act (42 U.S.C. 
     1396b(a)) the State may not reduce standards of eligibility 
     or benefits provided under its State Medicaid plan under 
     title XIX of the Social Security Act below such standards of 
     eligibility and benefits in effect on the date of the 
     enactment of this Act.

     SEC. 3. FINANCING THROUGH EMPLOYMENT TAX.

       (a) Tax on Employees.--Section 3101 of the Internal Revenue 
     Code of 1986 is amended by redesignating subsection (c) as 
     subsection (d) and by inserting after subsection (b) the 
     following new subsection:
       ``(c) Medicare for All.--In addition to other taxes, there 
     is hereby imposed on the income of every individual a tax 
     equal to 1.7 percent of the wages (as defined in section 
     3121(a)) received by him with respect to employment (as 
     defined in section 3121(b)).''.
       (b) Tax on Employers.--Section 3111 of such Code is amended 
     by redesignating subsection (c) as subsection (d) and by 
     inserting after subsection (b) the following new subsection:
       ``(c) Medicare for All.--In addition to other taxes, there 
     is hereby imposed on every employer an excise tax, with 
     respect to having individuals in his employ, equal to 7 
     percent of the wages (as defined in section 3121(a)) paid by 
     him with respect to employment (as defined in section 
     3121(b)).''.
       (c) Tax on Self-Employment.--Section 1401 of such Code is 
     amended by redesignating subsection (c) as subsection (d) and 
     by inserting after subsection (b) the following new 
     subsection:
       ``(c) Medicare for All.--In addition to other taxes, there 
     shall be imposed for each taxable year, on the self-
     employment income of every individual, a tax equal to the 
     applicable percent of the self-employment income for such 
     taxable year. For purposes of the preceding sentence, the 
     applicable percent is a percent equal to the sum of the 
     percent described in section 3101(c) plus the percent 
     described in section 3111(c).''.
       (d) Railroad Retirement Tax.--
       (1) Tax on employees.--Section 3201(a) of such Code is 
     amended by striking ``subsections (a) and (b) of section 
     3101'' and inserting ``subsections (a), (b), and (c) of 
     section 3101''.
       (2) Tax on employee representatives.--Section 3211(a) of 
     such Code is amended by striking ``subsections (a) and (b) of 
     section 3101 and subsections (a) and (b) of section 3111'' 
     and inserting ``subsections (a), (b), and (c) of section 3101 
     and subsections (a), (b), and (c) of section 3111''.
       (3) Tax on employers.--Section 3221(a) of such Code is 
     amended by striking ``subsections (a) and (b) of section 
     3111'' and inserting ``subsections (a), (b), and (c) of 
     section 3111''.
       (4) Determination of contribution base.--Clause (iii) of 
     section 3231(e)(2)(A) is amended to read as follows:
       ``(iii) Hospital insurance and medicare for all taxes.--
     Clause (i) shall not apply to--

       ``(I) so much of the rate applicable under section 3201(a) 
     or 3221(a) as does not exceed the sum of the rates of tax in 
     effect under subsections (b) and (c) of section 3101, and
       ``(II) so much of the rate applicable under section 3211(a) 
     as does not exceed the sum of the rates of tax in effect 
     under subsections (b) and (c) of section 1401.''.

       (e) Application of Tax to Federal, State, and Local 
     Employment.--Paragraphs (1) and (2) of section 3121(u) and 
     section 3125(a) of such Code are each amended by striking 
     ``sections 3101(b) and 3111(b)'' and inserting ``subsections 
     (b) and (c) of section 3101 and subsections (b) and (c) of 
     section 3111''.
       (f) Conforming Amendments.--
       (1) Section 1402(a)(12)(B) of such Code is amended by 
     striking ``subsections (a) and (b) of section 1401'' and 
     inserting ``subsections (a), (b), and (c) of section 1401''.
       (2) Section 3121(q) of such Code is amended by striking 
     ``subsections (a) and (b) of section 3111'' and inserting 
     ``subsections (a), (b), and (c) of section 3111''.
       (3) The last sentence of section 6051(a) of such Code is 
     amended by striking ``sections 3101(c) and 3111(c)'' and 
     inserting ``sections 3101(d) and 3111(d)''.
       (g) Effective Date.--The amendments made by this section 
     shall apply to wages paid and self-employment income derived 
     on or after January 1 of the year following the date of the 
     enactment of this Act.
                                 ______
                                 
  SA 3898. Mr. KENNEDY submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

[[Page 7644]]



                       TITLE _--HEALTHY FAMILIES

     SEC. _01. SHORT TITLE.

       This title may be cited as the ``Healthy Families Act''.

     SEC. _02. FINDINGS.

       Congress makes the following findings:
       (1) Working Americans need to take time off for their own 
     health care needs or to perform essential caretaking 
     responsibilities for a wide range of family members, 
     including, among others, their children, spouse, parents, and 
     parents-in-law, and other children and adults for whom they 
     are caretakers.
       (2) Health care needs include preventive health care, 
     diagnostic procedures, medical treatment, and recovery in 
     response to short- and long-term illnesses and injuries.
       (3) Providing employees time off to tend to their own 
     health care needs ensures that they will be healthier in the 
     long run. Preventive care helps avoid illnesses and injuries 
     and routine medical care helps detect illnesses early and 
     shorten the duration of illnesses.
       (4) When parents are available to care for their children 
     who become sick, children recover faster, more serious 
     illnesses are prevented, and children's overall mental and 
     physical health are improved. Parents who cannot afford to 
     miss work and must send children with a contagious illness to 
     child care or school contribute to the high rate of 
     infections in child care centers and schools.
       (5) Providing paid sick leave improves public health by 
     reducing infectious disease. Policies that make it easier for 
     sick adults and children to be isolated at home reduce the 
     spread of infectious disease.
       (6) Routine medical care results in savings by decreasing 
     medical costs by detecting and treating illness and injury 
     early, decreasing the need for emergency care. These savings 
     benefit public and private payers of health insurance, 
     including private businesses.
       (7) The provision of individual and family sick leave by 
     large and small businesses, both here in the United States 
     and elsewhere, demonstrates that policy solutions are both 
     feasible and affordable in a competitive economy. Measures 
     that ensure that employees are both in good health themselves 
     and do not need to worry about unmet family health problems 
     help businesses by promoting productivity and reducing 
     employee turnover.
       (8) The American Productivity Audit found that 
     presenteeism--the practice of employees coming to work 
     despite illness--costs $180,000,000,000 annually in lost 
     productivity. Studies in the Journal of Occupational and 
     Environmental Medicine, the Employee Benefit News, and the 
     Harvard Business Review show that presenteeism is a larger 
     productivity drain than either absenteeism or short-term 
     disability.
       (9) The absence of sick leave has forced Americans to make 
     untenable choices between needed income and jobs on the one 
     hand and caring for their own and their family's health on 
     the other.
       (10) The majority of middle income Americans lack paid 
     leave for self-care or to care for a family member. Low-
     income Americans are significantly worse off. Of the poorest 
     families (the lowest quartile), 76 percent lack regular sick 
     leave. For families in the next 2 quartiles, 63 percent and 
     54 percent, respectively lack regular sick leave. Even in the 
     highest income quartile, 40 percent of families lack regular 
     sick leave. Less than \1/2\ of workers who have paid sick 
     leave can use it to care for ill children.
       (11) It is in the national interest to ensure that 
     Americans from all demographic groups can care for their own 
     health and the health of their families while prospering at 
     work.
       (12) Due to the nature of the roles of men and women in 
     society, the primary responsibility for family caretaking 
     often falls on women, and such responsibility affects the 
     working lives of women more than it affects the working lives 
     of men.
       (13) Although women are still primarily responsible for 
     family caretaking, an increasing number of men are taking on 
     caretaking obligations, and men who request leave time for 
     caretaking purposes are often denied accommodation or 
     penalized because of stereotypes that caretaking is only 
     ``women's work''.
       (14) Employers' reliance on persistent stereotypes about 
     the ``proper'' roles of both men and women in the workplace 
     and in the home--
       (A) creates a cycle of discrimination that forces women to 
     continue to assume the role of primary family caregiver; and
       (B) fosters stereotypical views among employers about 
     women's commitment to work and their value as employees.
       (15) Employment standards that apply to only one gender 
     have serious potential for encouraging employers to 
     discriminate against employees and applicants for employment 
     who are of that gender.

     SEC. _03. PURPOSES.

       The purposes of this title are--
       (1) to ensure that all working Americans can address their 
     own health needs and the health needs of their families by 
     requiring employers to provide a minimum level of paid sick 
     leave including leave for family care;
       (2) to diminish public and private health care costs by 
     enabling workers to seek early and routine medical care for 
     themselves and their family members;
       (3) to accomplish the purposes described in paragraphs (1) 
     and (2) in a manner that is feasible for employers; and
       (4) consistent with the provision of the 14th amendment to 
     the Constitution relating to equal protection of the laws, 
     and pursuant to Congress' power to enforce that provision 
     under section 5 of that amendment--
       (A) to accomplish the purposes described in paragraphs (1) 
     and (2) in a manner that minimizes the potential for 
     employment discrimination on the basis of sex by ensuring 
     generally that leave is available for eligible medical 
     reasons on a gender-neutral basis; and
       (B) to promote the goal of equal employment opportunity for 
     women and men.

     SEC. _04. DEFINITIONS.

       In this title:
       (1) Child.--The term ``child'' means a biological, foster, 
     or adopted child, a stepchild, a legal ward, or a child of a 
     person standing in loco parentis, who is--
       (A) under 18 years of age; or
       (B) 18 years of age or older and incapable of self-care 
     because of a mental or physical disability.
       (2) Employee.--The term ``employee'' means an individual--
       (A) who is--
       (i)(I) an employee (including an applicant), as defined in 
     section 3(e) of the Fair Labor Standards Act of 1938 (29 
     U.S.C. 203(e)), who is not covered under clause (v), 
     including such an employee of the Library of Congress, except 
     that a reference in such section to an employer shall be 
     considered to be a reference to an employer described in 
     clauses (i)(I) and (ii) of paragraph (3)(A); or
       (II) an employee (including an applicant) of the Government 
     Accountability Office;
       (ii) a State employee (including an applicant) described in 
     section 304(a) of the Government Employee Rights Act of 1991 
     (42 U.S.C. 2000e-16c(a));
       (iii) a covered employee (including an applicant), as 
     defined in section 101 of the Congressional Accountability 
     Act of 1995 (2 U.S.C. 1301);
       (iv) a covered employee (including an applicant), as 
     defined in section 411(c) of title 3, United States Code; or
       (v) a Federal officer or employee (including an applicant) 
     covered under subchapter V of chapter 63 of title 5, United 
     States Code; and
       (B) who works an average of at least 20 hours per week or, 
     in the alternative, at least 1,000 hours per year.
       (3) Employer.--
       (A) In general.--The term ``employer'' means a person who 
     is--
       (i)(I) a covered employer, as defined in subparagraph (B), 
     who is not covered under subclause (V);
       (II) an entity employing a State employee described in 
     section 304(a) of the Government Employee Rights Act of 1991;
       (III) an employing office, as defined in section 101 of the 
     Congressional Accountability Act of 1995;
       (IV) an employing office, as defined in section 411(c) of 
     title 3, United States Code; or
       (V) an employing agency covered under subchapter V of 
     chapter 63 of title 5, United States Code; and
       (ii) is engaged in commerce (including government), in the 
     production of goods for commerce, or in an enterprise engaged 
     in commerce (including government) or in the production of 
     goods for commerce.
       (B) Covered employer.--
       (i) In general.--In subparagraph (A)(i)(I), the term 
     ``covered employer''--

       (I) means any person engaged in commerce or in any industry 
     or activity affecting commerce who employs 15 or more 
     employees for each working day during each of 20 or more 
     calendar workweeks in the current or preceding calendar year;
       (II) includes--

       (aa) any person who acts, directly or indirectly, in the 
     interest of an employer to any of the employees of such 
     employer; and
       (bb) any successor in interest of an employer;

       (III) includes any ``public agency'', as defined in section 
     3(x) of the Fair Labor Standards Act of 1938 (29 U.S.C. 
     203(x)); and
       (IV) includes the Government Accountability Office and the 
     Library of Congress.

       (ii) Public agency.--For purposes of clause (i)(III), a 
     public agency shall be considered to be a person engaged in 
     commerce or in an industry or activity affecting commerce.
       (iii) Definitions.--For purposes of this subparagraph:

       (I) Commerce.--The terms ``commerce'' and ``industry or 
     activity affecting commerce'' mean any activity, business, or 
     industry in commerce or in which a labor dispute would hinder 
     or obstruct commerce or the free flow of commerce, and 
     include ``commerce'' and any ``industry affecting commerce'', 
     as defined in paragraphs (1) and (3) of section 501 of the 
     Labor Management Relations Act, 1947 (29 U.S.C. 142(1) and 
     (3)).
       (II) Employee.--The term ``employee'' has the same meaning 
     given such term in section 3(e) of the Fair Labor Standards 
     Act of 1938 (29 U.S.C. 203(e)).
       (III) Person.--The term ``person'' has the same meaning 
     given such term in section 3(a) of the Fair Labor Standards 
     Act of 1938 (29 U.S.C. 203(a)).

[[Page 7645]]

       (C) Predecessors.--Any reference in this paragraph to an 
     employer shall include a reference to any predecessor of such 
     employer.
       (4) Employment benefits.--The term ``employment benefits'' 
     means all benefits provided or made available to employees by 
     an employer, including group life insurance, health 
     insurance, disability insurance, sick leave, annual leave, 
     educational benefits, and pensions, regardless of whether 
     such benefits are provided by a practice or written policy of 
     an employer or through an ``employee benefit plan'', as 
     defined in section 3(3) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1002(3)).
       (5) Health care provider.--The term ``health care 
     provider'' means a provider who--
       (A)(i) is a doctor of medicine or osteopathy who is 
     authorized to practice medicine or surgery (as appropriate) 
     by the State in which the doctor practices; or
       (ii) is any other person determined by the Secretary to be 
     capable of providing health care services; and
       (B) is not employed by an employer for whom the provider 
     issues certification under this title.
       (6) Parent.--The term ``parent'' means a biological, 
     foster, or adoptive parent of an employee, a stepparent of an 
     employee, or a legal guardian or other person who stood in 
     loco parentis to an employee when the employee was a child.
       (7) Pro rata.--The term ``pro rata'', with respect to 
     benefits offered to part-time employees, means the proportion 
     of each of the benefits offered to full-time employees that 
     are offered to part-time employees that, for each benefit, is 
     equal to the ratio of part-time hours worked to full-time 
     hours worked.
       (8) Secretary.--The term ``Secretary'' means the Secretary 
     of Labor.
       (9) Sick leave.--The term ``sick leave'' means an increment 
     of compensated leave provided by an employer to an employee 
     as a benefit of employment for use by the employee during an 
     absence from employment for any of the reasons described in 
     paragraphs (1) through (3) of section _05(d).
       (10) Spouse.--The term ``spouse'', with respect to an 
     employee, has the meaning given such term by the marriage 
     laws of the State in which the employee resides.

     SEC. _05. PROVISION OF PAID SICK LEAVE.

       (a) In General.--An employer shall provide for each 
     employee employed by the employer not less than--
       (1) 7 days of sick leave with pay annually for employees 
     working 30 or more hours per week; or
       (2) a pro rata number of days or hours of sick leave with 
     pay annually for employees working less than--
       (A) 30 hours per week on a year-round basis; or
       (B) 1,500 hours throughout the year involved.
       (b) Accrual.--
       (1) Period of accrual.--Sick leave provided for under this 
     section shall accrue as determined appropriate by the 
     employer, but not on less than a quarterly basis.
       (2) Accumulation.--Accrued sick leave provided for under 
     this section shall carry over from year to year, but this 
     title shall not be construed to require an employer to permit 
     an employee to accumulate more than 7 days of the sick leave.
       (3) Use.--The sick leave may be used as accrued. The 
     employer, at the discretion of the employer, may loan the 
     sick leave to the employee in advance of accrual by such 
     employee.
       (c) Calculation.--
       (1) Less than a full workday.--Unless the employer and 
     employee agree to designate otherwise, for periods of sick 
     leave that are less than a normal workday, that leave shall 
     be counted--
       (A) on an hourly basis; or
       (B) in the smallest increment that the employer's payroll 
     system uses to account for absences or use of leave.
       (2) Variable schedule.--If the schedule of an employee 
     varies from week to week, a weekly average of the hours 
     worked over the 12-week period prior to the beginning of a 
     sick leave period shall be used to calculate the employee's 
     normal workweek for the purpose of determining the amount of 
     sick leave to which the employee is entitled.
       (d) Uses.--Sick leave accrued under this section may be 
     used by an employee for any of the following:
       (1) An absence resulting from a physical or mental illness, 
     injury, or medical condition of the employee.
       (2) An absence resulting from obtaining professional 
     medical diagnosis or care, or preventive medical care, for 
     the employee subject to the requirement of subsection (e).
       (3) An absence for the purpose of caring for a child, a 
     parent, a spouse, or any other individual related by blood or 
     affinity whose close association with the employee is the 
     equivalent of a family relationship, who--
       (A) has any of the conditions or needs for diagnosis or 
     care described in paragraph (1) or (2); and
       (B) in the case of someone who is not a child, is otherwise 
     in need of care.
       (e) Scheduling.--An employee shall make a reasonable effort 
     to schedule leave under paragraphs (2) and (3) of subsection 
     (d) in a manner that does not unduly disrupt the operations 
     of the employer.
       (f) Procedures.--
       (1) In general.--Paid sick leave shall be provided upon the 
     oral or written request of an employee. Such request shall--
       (A) include a reason for the absence involved and the 
     expected duration of the leave;
       (B) in a case in which the need for leave is foreseeable at 
     least 7 days in advance of such leave, be provided at least 7 
     days in advance of such leave; and
       (C) otherwise, be provided as soon as practicable after the 
     employee is aware of the need for such leave.
       (2) Certification.--
       (A) Provision.--
       (i) In general.--Subject to subparagraph (C), an employer 
     may require that a request for leave be supported by a 
     certification issued by the health care professional of the 
     eligible employee or of an individual described in subsection 
     (d)(3), as appropriate, if the leave period covers more than 
     3 consecutive workdays.
       (ii) Timeliness.--The employee shall provide a copy of such 
     certification to the employer in a timely manner, not later 
     than 30 days after the first day of the leave. The employer 
     shall not delay the commencement of the leave on the basis 
     that the employer has not yet received the certification.
       (B) Sufficient certification.--
       (i) In general.--A certification provided under 
     subparagraph (A) shall be sufficient if it states--

       (I) the date on which the leave will be needed;
       (II) the probable duration of the leave;
       (III) the appropriate medical facts within the knowledge of 
     the health care provider regarding the condition involved, 
     subject to clause (ii); and
       (IV)(aa) for purposes of leave under subsection (d)(1), a 
     statement that leave from work is medically necessary;
       (bb) for purposes of leave under subsection (d)(2), the 
     dates on which testing for a medical diagnosis or care is 
     expected to be given and the duration of such testing or 
     care; and
       (cc) for purposes of leave under subsection (d)(3), in the 
     case of leave to care for someone who is not a child, a 
     statement that care is needed for an individual described in 
     such subsection, and an estimate of the amount of time that 
     such care is needed for such individual.

       (ii) Limitation.--In issuing a certification under 
     subparagraph (A), a health care provider shall make 
     reasonable efforts to limit the medical facts described in 
     clause (i)(III) that are disclosed in the certification to 
     the minimum necessary to establish a need for the employee to 
     utilize paid sick leave.
       (C) Regulations.--Regulations prescribed under section _13 
     shall specify the manner in which an employee who does not 
     have health insurance shall provide a certification for 
     purposes of this paragraph.
       (D) Confidentiality and nondisclosure.--
       (i) Protected health information.--Nothing in this title 
     shall be construed to require a health care provider to 
     disclose information in violation of section 1177 of the 
     Social Security Act (42 U.S.C. 1320d-6) or the regulations 
     promulgated pursuant to section 264(c) of the Health 
     Insurance Portability and Accountability Act (42 U.S.C. 
     1320d-2 note).
       (ii) Health information records.--If an employer possesses 
     health information about an employee or an employee's child, 
     parent, spouse or other individual described in subsection 
     (d)(3), such information shall--

       (I) be maintained on a separate form and in a separate file 
     from other personnel information;
       (II) be treated as a confidential medical record; and
       (III) not be disclosed except to the affected employee or 
     with the permission of the affected employee.

       (g) Current Leave Policies.--
       (1) Equivalency requirement.--An employer with a leave 
     policy providing paid leave options shall not be required to 
     modify such policy, if such policy offers an employee the 
     option, at the employee's discretion, to take paid sick leave 
     that is at least equivalent to the sick leave described in 
     paragraphs (1) and (2) of subsection (a) and subsection (d), 
     or if the policy offers paid leave (in amounts equivalent to 
     the amounts described in such paragraphs) for purposes that 
     include the reasons described in subsection (d).
       (2) No elimination or reduction of leave.--An employer may 
     not eliminate or reduce leave in existence on the date of 
     enactment of this Act, regardless of the type of such leave, 
     in order to comply with the provisions of this title.

     SEC. _06. POSTING REQUIREMENT.

       (a) In General.--Each employer shall post and keep posted a 
     notice, to be prepared or approved in accordance with 
     procedures specified in regulations prescribed under section 
     _13, setting forth excerpts from, or summaries of, the 
     pertinent provisions of this title including--
       (1) information describing leave available to employees 
     under this title;
       (2) information pertaining to the filing of an action under 
     this title;
       (3) the details of the notice requirement for foreseeable 
     leave under section _05(f)(1)(B); and

[[Page 7646]]

       (4) information that describes--
       (A) the protections that an employee has in exercising 
     rights under this title; and
       (B) how the employee can contact the Secretary (or other 
     appropriate authority as described in section _08) if any of 
     the rights are violated.
       (b) Location.--The notice described under subsection (a) 
     shall be posted--
       (1) in conspicuous places on the premises of the employer, 
     where notices to employees (including applicants) are 
     customarily posted; or
       (2) in employee handbooks.
       (c) Violation; Penalty.--Any employer who willfully 
     violates the posting requirements of this section shall be 
     subject to a civil fine in an amount not to exceed $100 for 
     each separate offense.

     SEC. _07. PROHIBITED ACTS.

       (a) Interference With Rights.--
       (1) Exercise of rights.--It shall be unlawful for any 
     employer to interfere with, restrain, or deny the exercise 
     of, or the attempt to exercise, any right provided under this 
     title.
       (2) Discrimination.--It shall be unlawful for any employer 
     to discharge or in any other manner discriminate against 
     (including retaliating against) any individual for opposing 
     any practice made unlawful by this title, including--
       (A) discharging or discriminating against (including 
     retaliating against) any individual for exercising, or 
     attempting to exercise, any right provided under this title;
       (B) using the taking of sick leave under this title as a 
     negative factor in an employment action, such as hiring, 
     promotion, or a disciplinary action; or
       (C) counting the sick leave under a no-fault attendance 
     policy.
       (b) Interference With Proceedings or Inquiries.--It shall 
     be unlawful for any person to discharge or in any other 
     manner discriminate against (including retaliating against) 
     any individual because such individual--
       (1) has filed an action, or has instituted or caused to be 
     instituted any proceeding, under or related to this title;
       (2) has given, or is about to give, any information in 
     connection with any inquiry or proceeding relating to any 
     right provided under this title; or
       (3) has testified, or is about to testify, in any inquiry 
     or proceeding relating to any right provided under this 
     title.
       (c) Construction.--Nothing in this section shall be 
     construed to state or imply that the scope of the activities 
     prohibited by section 105 of the Family and Medical Leave Act 
     of 1993 (29 U.S.C. 2615) is less than the scope of the 
     activities prohibited by this section.

     SEC. _08. ENFORCEMENT AUTHORITY.

       (a) In General.--
       (1) Definition.--In this subsection:
       (A) the term ``employee'' means an employee described in 
     clause (i) or (ii) of section _04(2)(A); and
       (B) the term ``employer'' means an employer described in 
     subclause (I) or (II) of section _04(3)(A)(i).
       (2) Investigative authority.--
       (A) In general.--To ensure compliance with the provisions 
     of this title, or any regulation or order issued under this 
     title, the Secretary shall have, subject to subparagraph (C), 
     the investigative authority provided under section 11(a) of 
     the Fair Labor Standards Act of 1938 (29 U.S.C. 211(a)), with 
     respect to employees and employers.
       (B) Obligation to keep and preserve records.--An employer 
     shall make, keep, and preserve records pertaining to 
     compliance with this title in accordance with section 11(c) 
     of the Fair Labor Standards Act of 1938 (29 U.S.C. 211(c)) 
     and in accordance with regulations prescribed by the 
     Secretary.
       (C) Required submissions generally limited to an annual 
     basis.--The Secretary shall not require, under the authority 
     of this paragraph, an employer to submit to the Secretary any 
     books or records more than once during any 12-month period, 
     unless the Secretary has reasonable cause to believe there 
     may exist a violation of this title or any regulation or 
     order issued pursuant to this title, or is investigating a 
     charge pursuant to paragraph (4).
       (D) Subpoena authority.--For the purposes of any 
     investigation provided for in this paragraph, the Secretary 
     shall have the subpoena authority provided for under section 
     9 of the Fair Labor Standards Act of 1938 (29 U.S.C. 209).
       (3) Civil action by employees.--
       (A) Right of action.--An action to recover the damages or 
     equitable relief prescribed in subparagraph (B) may be 
     maintained against any employer in any Federal or State court 
     of competent jurisdiction by one or more employees or their 
     representative for and on behalf of--
       (i) the employees; or
       (ii) the employees and other employees similarly situated.
       (B) Liability.--Any employer who violates section _07 
     (including a violation relating to rights provided under 
     section _05) shall be liable to any employee affected--
       (i) for damages equal to--

       (I) the amount of--

       (aa) any wages, salary, employment benefits, or other 
     compensation denied or lost to such employee by reason of the 
     violation; or
       (bb) in a case in which wages, salary, employment benefits, 
     or other compensation have not been denied or lost to the 
     employee, any actual monetary losses sustained by the 
     employee as a direct result of the violation up to a sum 
     equal to 7 days of wages or salary for the employee;

       (II) the interest on the amount described in subclause (I) 
     calculated at the prevailing rate; and
       (III) an additional amount as liquidated damages; and

       (ii) for such equitable relief as may be appropriate, 
     including employment, reinstatement, and promotion.
       (C) Fees and costs.--The court in an action under this 
     paragraph shall, in addition to any judgment awarded to the 
     plaintiff, allow a reasonable attorney's fee, reasonable 
     expert witness fees, and other costs of the action to be paid 
     by the defendant.
       (4) Action by the secretary.--
       (A) Administrative action.--The Secretary shall receive, 
     investigate, and attempt to resolve complaints of violations 
     of section _07 (including a violation relating to rights 
     provided under section _05) in the same manner that the 
     Secretary receives, investigates, and attempts to resolve 
     complaints of violations of sections 6 and 7 of the Fair 
     Labor Standards Act of 1938 (29 U.S.C. 206 and 207).
       (B) Civil action.--The Secretary may bring an action in any 
     court of competent jurisdiction to recover the damages 
     described in paragraph (3)(B)(i).
       (C) Sums recovered.--Any sums recovered by the Secretary 
     pursuant to subparagraph (B) shall be held in a special 
     deposit account and shall be paid, on order of the Secretary, 
     directly to each employee affected. Any such sums not paid to 
     an employee because of inability to do so within a period of 
     3 years shall be deposited into the Treasury of the United 
     States as miscellaneous receipts.
       (5) Limitation.--
       (A) In general.--Except as provided in subparagraph (B), an 
     action may be brought under paragraph (3), (4), or (6) not 
     later than 2 years after the date of the last event 
     constituting the alleged violation for which the action is 
     brought.
       (B) Willful violation.--In the case of an action brought 
     for a willful violation of section _07 (including a willful 
     violation relating to rights provided under section _05), 
     such action may be brought within 3 years of the date of the 
     last event constituting the alleged violation for which such 
     action is brought.
       (C) Commencement.--In determining when an action is 
     commenced under paragraph (3), (4), or (6) for the purposes 
     of this paragraph, it shall be considered to be commenced on 
     the date when the complaint is filed.
       (6) Action for injunction by secretary.--The district 
     courts of the United States shall have jurisdiction, for 
     cause shown, in an action brought by the Secretary--
       (A) to restrain violations of section _07 (including a 
     violation relating to rights provided under section _05), 
     including the restraint of any withholding of payment of 
     wages, salary, employment benefits, or other compensation, 
     plus interest, found by the court to be due to employees 
     eligible under this title; or
       (B) to award such other equitable relief as may be 
     appropriate, including employment, reinstatement, and 
     promotion.
       (7) Solicitor of labor.--The Solicitor of Labor may appear 
     for and represent the Secretary on any litigation brought 
     under paragraph (4) or (6).
       (8) Government accountability office and library of 
     congress.--Notwithstanding any other provision of this 
     subsection, in the case of the Government Accountability 
     Office and the Library of Congress, the authority of the 
     Secretary of Labor under this subsection shall be exercised 
     respectively by the Comptroller General of the United States 
     and the Librarian of Congress.
       (b) Employees Covered by Congressional Accountability Act 
     of 1995.--The powers, remedies, and procedures provided in 
     the Congressional Accountability Act of 1995 (2 U.S.C. 1301 
     et seq.) to the Board (as defined in section 101 of that Act 
     (2 U.S.C. 1301)), or any person, alleging a violation of 
     section 202(a)(1) of that Act (2 U.S.C. 1312(a)(1)) shall be 
     the powers, remedies, and procedures this title provides to 
     that Board, or any person, alleging an unlawful employment 
     practice in violation of this title against an employee 
     described in section _04(2)(A)(iii).
       (c) Employees Covered by Chapter 5 of Title 3, United 
     States Code.--The powers, remedies, and procedures provided 
     in chapter 5 of title 3, United States Code, to the 
     President, the Merit Systems Protection Board, or any person, 
     alleging a violation of section 412(a)(1) of that title, 
     shall be the powers, remedies, and procedures this title 
     provides to the President, that Board, or any person, 
     respectively, alleging an unlawful employment practice in 
     violation of this title against an employee described in 
     section _04(2)(A)(iv).
       (d) Employees Covered by Chapter 63 of Title 5, United 
     States Code.--The powers, remedies, and procedures provided 
     in title 5, United States Code, to an employing agency, 
     provided in chapter 12 of that title to the Merit Systems 
     Protection Board, or provided in that title to any person, 
     alleging a violation of chapter 63 of that title, shall be 
     the

[[Page 7647]]

     powers, remedies, and procedures this title provides to that 
     agency, that Board, or any person, respectively, alleging an 
     unlawful employment practice in violation of this title 
     against an employee described in section _04(2)(A)(v).

     SEC. _09. GAO STUDY.

       (a) In General.--The Comptroller General of the United 
     States shall conduct a study to determine the following:
       (1) The number of days employees used paid sick leave 
     including--
       (A) the number of employees who used paid sick leave 
     annually;
       (B) both the number of consecutive days, and total days, 
     employees used paid sick leave for their illnesses, or 
     illnesses of--
       (i) a child;
       (ii) a spouse;
       (iii) a parent; or
       (iv) any other individual; and
       (C) the number of employees who used paid sick leave for 
     leave periods covering more than 3 consecutive workdays.
       (2) Whether employees used paid sick leave to care for 
     illnesses or conditions caused by domestic violence against 
     the employees or their family members.
       (3) The cost to employers of implementing paid sick leave 
     policies.
       (4) The benefits to employers of implementing the policies, 
     including improvements in retention and absentee rates and 
     productivity.
       (5) The cost to employees of providing certification issued 
     by a health care provider to obtain paid sick leave.
       (6) The benefits of paid sick leave to employees and their 
     family members.
       (7) Whether the provision of paid sick leave has affected 
     the ability of employees to care for their family members.
       (8) Whether and in what way the provision of paid sick 
     leave affected the ability of employees to provide for their 
     health needs.
       (9) Whether the provision of paid sick leave affected the 
     ability of employees to sustain an adequate income while 
     meeting health needs of the employees and their family 
     members.
       (10) Whether employers who administered paid sick leave 
     policies prior to the date of enactment of this Act were 
     affected by the provisions of this title.
       (11) Whether other types of leave were affected by this 
     title including whether this title affected--
       (A) paid vacation leave;
       (B) paid family or medical leave; or
       (C) personal leave.
       (12) Whether paid sick leave affected retention and 
     turnover.
       (13) Whether paid sick leave increased the use of less 
     costly preventive medical care and lowered the use of 
     emergency room care.
       (14) Whether paid sick leave reduced the number of children 
     sent to school when the children were sick.
       (15) Whether paid sick leave reduced the costs of 
     presenteeism for employers.
       (b) Aggregating Data.--The data collected under paragraphs 
     (1), (2), and (7) of subsection (a) shall be aggregated by 
     gender, race, disability, earnings level, age, marital 
     status, and family type, including parental status.
       (c) Reports.--
       (1) In general.--Not later than 18 months after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall prepare and submit a report to the appropriate 
     committees of Congress concerning the results of the study 
     conducted pursuant to subsection (a) and the data aggregated 
     under subsection (b).
       (2) Followup report.--Not later that 5 years after the date 
     of enactment of this Act the Comptroller General of the 
     United States shall prepare and submit a followup report to 
     the appropriate committees of Congress concerning the results 
     of the study conducted pursuant to subsection (a) and the 
     data aggregated under subsection (b).

     SEC. _10. EFFECT ON OTHER LAWS.

       (a) Federal and State Antidiscrimination Laws.--Nothing in 
     this title shall be construed to modify or affect any Federal 
     or State law prohibiting discrimination on the basis of race, 
     religion, color, national origin, sex, age, or disability.
       (b) State and Local Laws.--Nothing in this title shall be 
     construed to supersede any provision of any State or local 
     law that provides greater paid sick leave or other leave 
     rights than the rights established under this title.

     SEC. _11. EFFECT ON EXISTING EMPLOYMENT BENEFITS.

       (a) More Protective.--Nothing in this title shall be 
     construed to diminish the obligation of an employer to comply 
     with any contract, collective bargaining agreement, or any 
     employment benefit program or plan that provides greater paid 
     sick leave rights to employees than the rights established 
     under this title.
       (b) Less Protective.--The rights established for employees 
     under this title shall not be diminished by any contract, 
     collective bargaining agreement, or any employment benefit 
     program or plan.

     SEC. _12. ENCOURAGEMENT OF MORE GENEROUS LEAVE POLICIES.

       Nothing in this title shall be construed to discourage 
     employers from adopting or retaining leave policies more 
     generous than policies that comply with the requirements of 
     this title.

     SEC. _13. REGULATIONS.

       (a) In General.--
       (1) Authority.--Except as provided in paragraph (2), not 
     later than 120 days after the date of enactment of this Act, 
     the Secretary shall prescribe such regulations as are 
     necessary to carry out this title with respect to employees 
     described in clause (i) or (ii) of section _04(2)(A).
       (2) Government accountability office; library of 
     congress.--The Comptroller General of the United States and 
     the Librarian of Congress shall prescribe the regulations 
     with respect to employees of the Government Accountability 
     Office and the Library of Congress, respectively.
       (b) Employees Covered by Congressional Accountability Act 
     of 1995.--
       (1) Authority.--Not later than 120 days after the date of 
     enactment of this Act, the Board of Directors of the Office 
     of Compliance shall prescribe (in accordance with section 304 
     of the Congressional Accountability Act of 1995 (2 U.S.C. 
     1384)) such regulations as are necessary to carry out this 
     title with respect to employees described in section 
     _04(2)(A)(iii).
       (2) Agency regulations.--The regulations prescribed under 
     paragraph (1) shall be the same as substantive regulations 
     promulgated by the Secretary to carry out this title except 
     insofar as the Board may determine, for good cause shown and 
     stated together with the regulations prescribed under 
     paragraph (1), that a modification of such regulations would 
     be more effective for the implementation of the rights and 
     protections involved under this section.
       (c) Employees Covered by Chapter 5 of Title 3, United 
     States Code.--
       (1) Authority.--Not later than 120 days after the date of 
     enactment of this Act, the President (or the designee of the 
     President) shall prescribe such regulations as are necessary 
     to carry out this title with respect to employees described 
     in section _04(2)(A)(iv).
       (2) Agency regulations.--The regulations prescribed under 
     paragraph (1) shall be the same as substantive regulations 
     promulgated by the Secretary to carry out this title except 
     insofar as the President (or designee) may determine, for 
     good cause shown and stated together with the regulations 
     prescribed under paragraph (1), that a modification of such 
     regulations would be more effective for the implementation of 
     the rights and protections involved under this section.
       (d) Employees Covered by Chapter 63 of Title 5, United 
     States Code.--
       (1) Authority.--Not later than 120 days after the date of 
     enactment of this Act, the Director of the Office of 
     Personnel Management shall prescribe such regulations as are 
     necessary to carry out this title with respect to employees 
     described in section _04(2)(A)(v).
       (2) Agency regulations.--The regulations prescribed under 
     paragraph (1) shall be the same as substantive regulations 
     promulgated by the Secretary to carry out this title except 
     insofar as the Director may determine, for good cause shown 
     and stated together with the regulations prescribed under 
     paragraph (1), that a modification of such regulations would 
     be more effective for the implementation of the rights and 
     protections involved under this section.

     SEC. _14. EFFECTIVE DATES.

       (a) In General.--This title shall take effect 1 year after 
     the date of issuance of regulations under section _13(a)(1).
       (b) Collective Bargaining Agreements.--In the case of a 
     collective bargaining agreement in effect on the effective 
     date prescribed by subsection (a), this title shall take 
     effect on the earlier of--
       (1) the date of the termination of such agreement; or
       (2) the date that occurs 18 months after the date of 
     issuance of regulations under section _13(a)(1).
                                 ______
                                 
  SA 3899. Mr. DURBIN (for himself, Mrs. Lincoln, Mr. Reid, Mr. Baucus, 
Mr. Kennedy, Mrs. Clinton, Mr. Kerry, Mr. Bingaman, Ms. Cantwell, Mr. 
Pryor, Mr. Harkin, Mr. Obama, Mr. Lautenberg, Mr. Schumer, Mr. Kohl, 
Mr. Lieberman, Mr. Dodd, Mr. Dayton, Mr. Johnson, Mr. Menendez, Mrs. 
Boxer, Mr. Nelson of Florida, Ms. Mikulski, Ms. Stabenow, Mr. Carper, 
and Mr. Rockefeller) submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Small Employers Health 
     Benefits Program Act of 2006''.

     SEC. 2. DEFINITIONS.

       (a) In General.--In this Act, the terms ``member of 
     family'', ``health benefits plan'', ``carrier'', ``employee 
     organizations'', and

[[Page 7648]]

     ``dependent'' have the meanings given such terms in section 
     8901 of title 5, United States Code.
       (b) Other Terms.--In this Act:
       (1) Employee.--The term ``employee'' has the meaning given 
     such term under section 3(6) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1002(6)). Such term 
     shall not include an employee of the Federal Government.
       (2) Employer.--The term ``employer'' has the meaning given 
     such term under section 3(5) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1002(5)), except that 
     such term shall include only employers who employed an 
     average of at least 1 but not more than 100 employees on 
     business days during the year preceding the date of 
     application. Such term shall not include the Federal 
     Government.
       (3) Health status-related factor.--The term ``health 
     status-related factor'' has the meaning given such term in 
     section 2791(d)(9) of the Public Health Service Act (42 
     U.S.C. 300gg-91(d)(9)).
       (4) Office.--The term ``Office'' means the Office of 
     Personnel Management.
       (5) Participating employer.--The term ``participating 
     employer'' means an employer that--
       (A) elects to provide health insurance coverage under this 
     Act to its employees; and
       (B) is not offering other comprehensive health insurance 
     coverage to such employees.
       (c) Application of Certain Rules in Determination of 
     Employer Size.--For purposes of subsection (b)(2):
       (1) Application of aggregation rule for employers.--All 
     persons treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 of the Internal Revenue Code 
     of 1986 shall be treated as 1 employer.
       (2) Employers not in existence in preceding year.--In the 
     case of an employer which was not in existence for the full 
     year prior to the date on which the employer applies to 
     participate, the determination of whether such employer meets 
     the requirements of subsection (b)(2) shall be based on the 
     average number of employees that it is reasonably expected 
     such employer will employ on business days in the employer's 
     first full year.
       (3) Predecessors.--Any reference in this subsection to an 
     employer shall include a reference to any predecessor of such 
     employer.
       (d) Waiver and Continuation of Participation.--
       (1) Waiver.--The Office may waive the limitations relating 
     to the size of an employer which may participate in the 
     health insurance program established under this Act on a case 
     by case basis if the Office determines that such employer 
     makes a compelling case for such a waiver. In making 
     determinations under this paragraph, the Office may consider 
     the effects of the employment of temporary and seasonal 
     workers and other factors.
       (2) Continuation of participation.--An employer 
     participating in the program under this Act that experiences 
     an increase in the number of employees so that such employer 
     has in excess of 100 employees, may not be excluded from 
     participation solely as a result of such increase in 
     employees.
       (e) Treatment of Health Benefits Plan as Group Health 
     Plan.--A health benefits plan offered under this Act shall be 
     treated as a group health plan for purposes of applying the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1001 et seq.) except to the extent that a provision of this 
     Act expressly provides otherwise.

     SEC. 3. HEALTH INSURANCE COVERAGE FOR NON-FEDERAL EMPLOYEES.

       (a) Administration.--The Office shall administer a health 
     insurance program for non-Federal employees and employers in 
     accordance with this Act.
       (b) Regulations.--Except as provided under this Act, the 
     Office shall prescribe regulations to apply the provisions of 
     chapter 89 of title 5, United States Code, to the greatest 
     extent practicable to participating carriers, employers, and 
     employees covered under this Act.
       (c) Limitations.--In no event shall the enactment of this 
     Act result in--
       (1) any increase in the level of individual or Federal 
     Government contributions required under chapter 89 of title 
     5, United States Code, including copayments or deductibles;
       (2) any decrease in the types of benefits offered under 
     such chapter 89; or
       (3) any other change that would adversely affect the 
     coverage afforded under such chapter 89 to employees and 
     annuitants and members of family under that chapter.
       (d) Enrollment.--The Office shall develop methods to 
     facilitate enrollment under this Act, including the use of 
     the Internet.
       (e) Contracts for Administration.--The Office may enter 
     into contracts for the performance of appropriate 
     administrative functions under this Act.
       (f) Separate Risk Pool.--In the administration of this Act, 
     the Office shall ensure that covered employees under this Act 
     are in a risk pool that is separate from the risk pool 
     maintained for covered individuals under chapter 89 of title 
     5, United States Code.
       (g) Rule of Construction.--Nothing in this Act shall be 
     construed to require a carrier that is participating in the 
     program under chapter 89 of title 5, United States Code, to 
     provide health benefits plan coverage under this Act.

     SEC. 4. CONTRACT REQUIREMENT.

       (a) In General.--The Office may enter into contracts with 
     qualified carriers offering health benefits plans of the type 
     described in section 8903 or 8903a of title 5, United States 
     Code, without regard to section 5 of title 41, United States 
     Code, or other statutes requiring competitive bidding, to 
     provide health insurance coverage to employees of 
     participating employers under this Act. Each contract shall 
     be for a uniform term of at least 1 year, but may be made 
     automatically renewable from term to term in the absence of 
     notice of termination by either party. In entering into such 
     contracts, the Office shall ensure that health benefits 
     coverage is provided for individuals only, individuals with 
     one or more children, married individuals without children, 
     and married individuals with one or more children.
       (b) Eligibility.--A carrier shall be eligible to enter into 
     a contract under subsection (a) if such carrier--
       (1) is licensed to offer health benefits plan coverage in 
     each State in which the plan is offered; and
       (2) meets such other requirements as determined appropriate 
     by the Office.
       (c) Statement of Benefits.--
       (1) In general.--Each contract under this Act shall contain 
     a detailed statement of benefits offered and shall include 
     information concerning such maximums, limitations, 
     exclusions, and other definitions of benefits as the Office 
     considers necessary or desirable.
       (2) Ensuring a range of plans.--The Office shall ensure 
     that a range of health benefits plans are available to 
     participating employers under this Act.
       (3) Participating plans.--The Office shall not prohibit the 
     offering of any health benefits plan to a participating 
     employer if such plan is eligible to participate in the 
     Federal Employees Health Benefits Program.
       (4) Nationwide plan.--With respect to all nationwide plans, 
     the Office shall develop a benefit package that shall be 
     offered in the case of a contract for a health benefit plan 
     that is to be offered on a nationwide basis that meets all 
     State benefit mandates.
       (d) Standards.--The minimum standards prescribed for health 
     benefits plans under section 8902(e) of title 5, United 
     States Code, and for carriers offering plans, shall apply to 
     plans and carriers under this Act. Approval of a plan may be 
     withdrawn by the Office only after notice and opportunity for 
     hearing to the carrier concerned without regard to subchapter 
     II of chapter 5 and chapter 7 of title 5, United States Code.
       (e) Conversion.--
       (1) In general.--A contract may not be made or a plan 
     approved under this section if the carrier under such 
     contract or plan does not offer to each enrollee whose 
     enrollment in the plan is ended, except by a cancellation of 
     enrollment, a temporary extension of coverage during which 
     the individual may exercise the option to convert, without 
     evidence of good health, to a nongroup contract providing 
     health benefits. An enrollee who exercises this option shall 
     pay the full periodic charges of the nongroup contract.
       (2) Noncancellable.--The benefits and coverage made 
     available under paragraph (1) may not be canceled by the 
     carrier except for fraud, over-insurance, or nonpayment of 
     periodic charges.
       (f) Requirement of Payment for or Provision of Health 
     Service.--Each contract entered into under this Act shall 
     require the carrier to agree to pay for or provide a health 
     service or supply in an individual case if the Office finds 
     that the employee, annuitant, family member, former spouse, 
     or person having continued coverage under section 8905a of 
     title 5, United States Code, is entitled thereto under the 
     terms of the contract.

     SEC. 5. ELIGIBILITY.

       An individual shall be eligible to enroll in a plan under 
     this Act if such individual--
       (1) is an employee of an employer described in section 
     2(b)(2), or is a self employed individual as defined in 
     section 401(c)(1)(B) of the Internal Revenue Code of 1986; 
     and
       (2) is not otherwise enrolled or eligible for enrollment in 
     a plan under chapter 89 of title 5, United States Code.

     SEC. 6. ALTERNATIVE CONDITIONS TO FEDERAL EMPLOYEE PLANS.

       (a) Treatment of Employee.--For purposes of enrollment in a 
     health benefits plan under this Act, an individual who had 
     coverage under a health insurance plan and is not a qualified 
     beneficiary as defined under section 4980B(g)(1) of the 
     Internal Revenue Code of 1986 shall be treated in a similar 
     manner as an individual who begins employment as an employee 
     under chapter 89 of title 5, United States Code.
       (b) Preexisting Condition Exclusions.--
       (1) In general.--Each contract under this Act may include a 
     preexisting condition exclusion as defined under section 
     9801(b)(1) of the Internal Revenue Code of 1986.
       (2) Exclusion period.--A preexisting condition exclusion 
     under this subsection shall provide for coverage of a 
     preexisting condition to begin not later than 6 months after

[[Page 7649]]

     the date on which the coverage of the individual under a 
     health benefits plan commences, reduced by the aggregate 1 
     day for each day that the individual was covered under a 
     health insurance plan immediately preceding the date the 
     individual submitted an application for coverage under this 
     Act. This provision shall be applied notwithstanding the 
     applicable provision for the reduction of the exclusion 
     period provided for in section 701(a)(3) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 
     1181(a)(3)).
       (c) Rates and Premiums.--
       (1) In general.--Rates charged and premiums paid for a 
     health benefits plan under this Act--
       (A) shall be determined in accordance with this subsection;
       (B) may be annually adjusted subject to paragraph (3);
       (C) shall be negotiated in the same manner as rates and 
     premiums are negotiated under such chapter 89; and
       (D) shall be adjusted to cover the administrative costs of 
     the Office under this Act.
       (2) Determinations.--In determining rates and premiums 
     under this Act, the following provisions shall apply:
       (A) In general.--A carrier that enters into a contract 
     under this Act shall determine that amount of premiums to 
     assess for coverage under a health benefits plan based on an 
     community rate that may be annually adjusted--
       (i) for the geographic area involved if the adjustment is 
     based on geographical divisions that are not smaller than a 
     metropolitan statistical area and the carrier provides 
     evidence of geographic variation in cost of services;
       (ii) based on whether such coverage is for an individual, 
     two adults, one adult and one or more children, or a family; 
     and
       (iii) based on the age of covered individuals (subject to 
     subparagraph (C)).
       (B) Limitation.--Premium rates charged for coverage under 
     this Act shall not vary based on health-status related 
     factors, gender, class of business, or claims experience
       (C) Age adjustments.--
       (i) In general.--With respect to subparagraph (A)(iii), in 
     making adjustments based on age, the Office shall establish 
     no more than 5 age brackets to be used by the carrier in 
     establishing rates. The rates for any age bracket may not 
     vary by more than 50 percent above or below the community 
     rate on the basis of attained age. Age-related premiums may 
     not vary within age brackets.
       (ii) Age 65 and older.--With respect to subparagraph 
     (A)(iii), a carrier may develop separate rates for covered 
     individuals who are 65 years of age or older for whom 
     medicare is the primary payor for health benefits coverage 
     which is not covered under medicare.
       ``(3) Readjustments.--Any readjustment in rates charged or 
     premiums paid for a health benefits plan under this Act shall 
     be made in advance of the contract term in which they will 
     apply and on a basis which, in the judgment of the Office, is 
     consistent with the practice of the Office for the Federal 
     Employees Health Benefits Program.
       (d) Termination and Reenrollment.--If an individual who is 
     enrolled in a health benefits plan under this Act terminates 
     the enrollment, the individual shall not be eligible for 
     reenrollment until the first open enrollment period following 
     the expiration of 6 months after the date of such 
     termination.
       (e) Continued Applicability of State Law.--
       (1) Health insurance or plans.--
       (A) Plans.--With respect to a contract entered into under 
     this Act under which a carrier will offer health benefits 
     plan coverage, State mandated benefit laws in effect in the 
     State in which the plan is offered shall continue to apply.
       (B) Rating rules.--The rating requirements under 
     subparagraphs (A) and (B) of subsection (c)(2) shall 
     supercede State rating rules for qualified plans under this 
     Act, except with respect to States that provide a rating 
     variance with respect to age that is less than the Federal 
     limit or that provide for some form of community rating.
       (2) Limitation.--Nothing in this subsection shall be 
     construed to preempt--
       (A) any State or local law or regulation except those laws 
     and regulations described in subparagraph (B) of paragraph 
     (1);
       (B) any State grievance, claims, and appeals procedure law, 
     except to the extent that such law is preempted under section 
     514 of the Employee Retirement Income Security Act of 1974; 
     and
       (C) State network adequacy laws.
       (f) Rule of Construction.--Nothing in this Act shall be 
     construed to limit the application of the service-charge 
     system used by the Office for determining profits for 
     participating carriers under chapter 89 of title 5, United 
     States Code.

     SEC. 7. ENCOURAGING PARTICIPATION BY CARRIERS THROUGH 
                   ADJUSTMENTS FOR RISK.

       (a) Application of Risk Corridors.--
       (1) In general.--This section shall only apply to carriers 
     with respect to health benefits plans offered under this Act 
     during any of calendar years 2007 through 2009.
       (2) Notification of costs under the plan.--In the case of a 
     carrier that offers a health benefits plan under this Act in 
     any of calendar years 2007 through 2009, the carrier shall 
     notify the Office, before such date in the succeeding year as 
     the Office specifies, of the total amount of costs incurred 
     in providing benefits under the health benefits plan for the 
     year involved and the portion of such costs that is 
     attributable to administrative expenses.
       (3) Allowable costs defined.--For purposes of this section, 
     the term ``allowable costs'' means, with respect to a health 
     benefits plan offered by a carrier under this Act, for a 
     year, the total amount of costs described in paragraph (2) 
     for the plan and year, reduced by the portion of such costs 
     attributable to administrative expenses incurred in providing 
     the benefits described in such paragraph.
       (b) Adjustment of Payment.--
       (1) No adjustment if allowable costs within 3 percent of 
     target amount.--If the allowable costs for the carrier with 
     respect to the health benefits plan involved for a calendar 
     year are at least 97 percent, but do not exceed 103 percent, 
     of the target amount for the plan and year involved, there 
     shall be no payment adjustment under this section for the 
     plan and year.
       (2) Increase in payment if allowable costs above 103 
     percent of target amount.--
       (A) Costs between 103 and 108 percent of target amount.--If 
     the allowable costs for the carrier with respect to the 
     health benefits plan involved for the year are greater than 
     103 percent, but not greater than 108 percent, of the target 
     amount for the plan and year, the Office shall reimburse the 
     carrier for such excess costs through payment to the carrier 
     of an amount equal to 75 percent of the difference between 
     such allowable costs and 103 percent of such target amount.
       (B) Costs above 108 percent of target amount.--If the 
     allowable costs for the carrier with respect to the health 
     benefits plan involved for the year are greater than 108 
     percent of the target amount for the plan and year, the 
     Office shall reimburse the carrier for such excess costs 
     through payment to the carrier in an amount equal to the sum 
     of--
       (i) 3.75 percent of such target amount; and
       (ii) 90 percent of the difference between such allowable 
     costs and 108 percent of such target amount.
       (3) Reduction in payment if allowable costs below 97 
     percent of target amount.--
       (A) Costs between 92 and 97 percent of target amount.--If 
     the allowable costs for the carrier with respect to the 
     health benefits plan involved for the year are less than 97 
     percent, but greater than or equal to 92 percent, of the 
     target amount for the plan and year, the carrier shall be 
     required to pay into the contingency reserve fund maintained 
     under section 8909(b)(2) of title 5, United States Code, an 
     amount equal to 75 percent of the difference between 97 
     percent of the target amount and such allowable costs.
       (B) Costs below 92 percent of target amount.--If the 
     allowable costs for the carrier with respect to the health 
     benefits plan involved for the year are less than 92 percent 
     of the target amount for the plan and year, the carrier shall 
     be required to pay into the stabilization fund under section 
     8909(b)(2) of title 5, United States Code, an amount equal to 
     the sum of--
       (i) 3.75 percent of such target amount; and
       (ii) 90 percent of the difference between 92 percent of 
     such target amount and such allowable costs.
       (4) Target amount described.--
       (A) In general.--For purposes of this subsection, the term 
     ``target amount'' means, with respect to a health benefits 
     plan offered by a carrier under this Act in any of calendar 
     years 2007 through 2011, an amount equal to--
       (i) the total of the monthly premiums estimated by the 
     carrier and approved by the Office to be paid for enrollees 
     in the plan under this Act for the calendar year involved; 
     reduced by
       (ii) the amount of administrative expenses that the carrier 
     estimates, and the Office approves, will be incurred by the 
     carrier with respect to the plan for such calendar year.
       (B) Submission of target amount.--Not later than December 
     31, 2006, and each December 31 thereafter through calendar 
     year 2010, a carrier shall submit to the Office a description 
     of the target amount for such carrier with respect to health 
     benefits plans provided by the carrier under this Act.
       (c) Disclosure of Information.--
       (1) In general.--Each contract under this Act shall 
     provide--
       (A) that a carrier offering a health benefits plan under 
     this Act shall provide the Office with such information as 
     the Office determines is necessary to carry out this 
     subsection including the notification of costs under 
     subsection (a)(2) and the target amount under subsection 
     (b)(4)(B); and
       (B) that the Office has the right to inspect and audit any 
     books and records of the organization that pertain to the 
     information regarding costs provided to the Office under such 
     subsections.
       (2) Restriction on use of information.--Information 
     disclosed or obtained pursuant to the provisions of this 
     subsection may be used by officers, employees, and 
     contractors of the Office only for the purposes of, and to

[[Page 7650]]

     the extent necessary in, carrying out this section.

     SEC. 8. ENCOURAGING PARTICIPATION BY CARRIERS THROUGH 
                   REINSURANCE.

       (a) Establishment.--The Office shall establish a 
     reinsurance fund to provide payments to carriers that 
     experience one or more catastrophic claims during a year for 
     health benefits provided to individuals enrolled in a health 
     benefits plan under this Act.
       (b) Eligibility for Payments.--To be eligible for a payment 
     from the reinsurance fund for a plan year, a carrier under 
     this Act shall submit to the Office an application that 
     contains--
       (1) a certification by the carrier that the carrier paid 
     for at least one episode of care during the year for covered 
     health benefits for an individual in an amount that is in 
     excess of $50,000; and
       (2) such other information determined appropriate by the 
     Office.
       (c) Payment.--
       (1) In general.--The amount of a payment from the 
     reinsurance fund to a carrier under this section for a 
     catastrophic episode of care shall be determined by the 
     Office but shall not exceed an amount equal to 80 percent of 
     the applicable catastrophic claim amount.
       (2) Applicable catastrophic claim amount.--For purposes of 
     paragraph (1), the applicable catastrophic episode of care 
     amount shall be equal to the difference between--
       (A) the amount of the catastrophic claim; and
       (B) $50,000.
       (3) Limitation.--In determining the amount of a payment 
     under paragraph (1), if the amount of the catastrophic claim 
     exceeds the amount that would be paid for the healthcare 
     items or services involved under title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.), the Office shall use 
     the amount that would be paid under such title XVIII for 
     purposes of paragraph (2)(A).
       (d) Definition.--In this section, the term ``catastrophic 
     claim'' means a claim submitted to a carrier, by or on behalf 
     of an enrollee in a health benefits plan under this Act, that 
     is in excess of $50,000.
       (e) Termination of Fund.--The reinsurance fund established 
     under subsection (a) shall terminate on the date that is 2 
     years after the date on which the first contract period 
     becomes effective under this Act.

     SEC. 9. CONTINGENCY RESERVE FUND.

       Beginning on October 1, 2010, the Office may use amounts 
     appropriated under section 14(a) that remain unobligated to 
     establish a contingency reserve fund to provide assistance to 
     carriers offering health benefits plans under this Act that 
     experience unanticipated financial hardships (as determined 
     by the Office).

     SEC. 10. EMPLOYER PARTICIPATION.

       (a) Regulations.--The Office shall prescribe regulations 
     providing for employer participation under this Act, 
     including the offering of health benefits plans under this 
     Act to employees.
       (b) Enrollment and Offering of Other Coverage.--
       (1) Enrollment.--A participating employer shall ensure that 
     each eligible employee has an opportunity to enroll in a plan 
     under this Act.
       (2) Prohibition on offering other comprehensive health 
     benefit coverage.--A participating employer may not offer a 
     health insurance plan providing comprehensive health benefit 
     coverage to employees other than a health benefits plan 
     that--
       (A) meets the requirements described in section 4(a); and
       (B) is offered only through the enrollment process 
     established by the Office under section 3.
       (3) Offer of supplemental coverage options.--
       (A) In general.--A participating employer may offer 
     supplementary coverage options to employees.
       (B) Definition.--In subparagraph (A), the term 
     ``supplementary coverage'' means benefits described as 
     ``excepted benefits'' under section 2791(c) of the Public 
     Health Service Act (42 U.S.C. 300gg-91(c)).
       (c) Rule of Construction.--Except as provided in section 
     15, nothing in this Act shall be construed to require that an 
     employer make premium contributions on behalf of employees.

     SEC. 11. ADMINISTRATION THROUGH REGIONAL ADMINISTRATIVE 
                   ENTITIES.

       (a) In General.--In order to provide for the administration 
     of the benefits under this Act with maximum efficiency and 
     convenience for participating employers and health care 
     providers and other individuals and entities providing 
     services to such employers, the Office is authorized to enter 
     into contracts with eligible entities to perform, on a 
     regional basis, one or more of the following:
       (1) Collect and maintain all information relating to 
     individuals, families, and employers participating in the 
     program under this Act in the region served.
       (2) Receive, disburse, and account for payments of premiums 
     to participating employers by individuals in the region 
     served, and for payments by participating employers to 
     carriers.
       (3) Serve as a channel of communication between carriers, 
     participating employers, and individuals relating to the 
     administration of this Act.
       (4) Otherwise carry out such activities for the 
     administration of this Act, in such manner, as may be 
     provided for in the contract entered into under this section.
       (5) The processing of grievances and appeals.
       (b) Application.--To be eligible to receive a contract 
     under subsection (a), an entity shall prepare and submit to 
     the Office an application at such time, in such manner, and 
     containing such information as the Office may require.
       (c) Process.--
       (1) Competitive bidding.--All contracts under this section 
     shall be awarded through a competitive bidding process on a 
     bi-annual basis.
       (2) Requirement.--No contract shall be entered into with 
     any entity under this section unless the Office finds that 
     such entity will perform its obligations under the contract 
     efficiently and effectively and will meet such requirements 
     as to financial responsibility, legal authority, and other 
     matters as the Office finds pertinent.
       (3) Publication of standards and criteria.--The Office 
     shall publish in the Federal Register standards and criteria 
     for the efficient and effective performance of contract 
     obligations under this section, and opportunity shall be 
     provided for public comment prior to implementation. In 
     establishing such standards and criteria, the Office shall 
     provide for a system to measure an entity's performance of 
     responsibilities.
       (4) Term.--Each contract under this section shall be for a 
     term of at least 1 year, and may be made automatically 
     renewable from term to term in the absence of notice by 
     either party of intention to terminate at the end of the 
     current term, except that the Office may terminate any such 
     contract at any time (after such reasonable notice and 
     opportunity for hearing to the entity involved as the Office 
     may provide in regulations) if the Office finds that the 
     entity has failed substantially to carry out the contract or 
     is carrying out the contract in a manner inconsistent with 
     the efficient and effective administration of the program 
     established by this Act.
       (d) Terms of Contract.--A contract entered into under this 
     section shall include--
       (1) a description of the duties of the contracting entity;
       (2) an assurance that the entity will furnish to the Office 
     such timely information and reports as the Office determines 
     appropriate;
       (3) an assurance that the entity will maintain such records 
     and afford such access thereto as the Office finds necessary 
     to assure the correctness and verification of the information 
     and reports under paragraph (2) and otherwise to carry out 
     the purposes of this Act;
       (4) an assurance that the entity shall comply with such 
     confidentiality and privacy protection guidelines and 
     procedures as the Office may require; and
       (5) such other terms and conditions not inconsistent with 
     this section as the Office may find necessary or appropriate.

     SEC. 12. COORDINATION WITH SOCIAL SECURITY BENEFITS.

       Benefits under this Act shall, with respect to an 
     individual who is entitled to benefits under part A of title 
     XVIII of the Social Security Act, be offered (for use in 
     coordination with those medicare benefits) to the same extent 
     and in the same manner as if coverage were under chapter 89 
     of title 5, United States Code.

     SEC. 13. PUBLIC EDUCATION CAMPAIGN.

       (a) In General.--In carrying out this Act, the Office shall 
     develop and implement an educational campaign to provide 
     information to employers and the general public concerning 
     the health insurance program developed under this Act.
       (b) Annual Progress Reports.--Not later than 1 year and 2 
     years after the implementation of the campaign under 
     subsection (a), the Office shall submit to the appropriate 
     committees of Congress a report that describes the activities 
     of the Office under subsection (a), including a determination 
     by the office of the percentage of employers with knowledge 
     of the health benefits programs provided for under this Act.
       (c) Public Education Campaign.--There is authorized to be 
     appropriated to carry out this section, such sums as may be 
     necessary for each of fiscal years 2007 and 2008.

     SEC. 14. APPROPRIATIONS.

       There are authorized to be appropriated to the Office, such 
     sums as may be necessary in each fiscal year for the 
     development and administration of the program under this Act.

     SEC. 15. REFUNDABLE CREDIT FOR SMALL BUSINESS EMPLOYEE HEALTH 
                   INSURANCE EXPENSES.

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

     ``SEC. 36. SMALL BUSINESS EMPLOYEE HEALTH INSURANCE EXPENSES.

       ``(a) Determination of Amount.--In the case of a qualified 
     small employer, there shall be allowed as a credit against 
     the tax imposed by this subtitle for the taxable year an 
     amount equal to the sum of--

[[Page 7651]]

       ``(1) the expense amount described in subsection (b), and
       ``(2) the expense amount described in subsection (c), paid 
     by the taxpayer during the taxable year.
       ``(b) Subsection (b) Expense Amount.--For purposes of this 
     section--
       ``(1) In general.--The expense amount described in this 
     subsection is the applicable percentage of the amount of 
     qualified employee health insurance expenses of each 
     qualified employee.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1)--
       ``(A) In general.--The applicable percentage is equal to--
       ``(i) 25 percent in the case of self-only coverage,
       ``(ii) 35 percent in the case of family coverage (as 
     defined in section 220(c)(5)), and
       ``(iii) 30 percent in the case of coverage for two adults 
     or one adult and one or more children.
       ``(B) Bonus for payment of greater percentage of 
     premiums.--The applicable percentage otherwise specified in 
     subparagraph (A) shall be increased by 5 percentage points 
     for each additional 10 percent of the qualified employee 
     health insurance expenses of each qualified employee 
     exceeding 60 percent which are paid by the qualified small 
     employer.
       ``(c) Subsection (c) Expense Amount.--For purposes of this 
     section--
       ``(1) In general.--The expense amount described in this 
     subsection is, with respect to the first credit year of a 
     qualified small employer which is an eligible employer, 10 
     percent of the qualified employee health insurance expenses 
     of each qualified employee.
       ``(2) First credit year.--For purposes of paragraph (1), 
     the term `first credit year' means the taxable year which 
     includes the date that the health insurance coverage to which 
     the qualified employee health insurance expenses relate 
     becomes effective.
       ``(d) Limitation Based on Wages.-- With respect to a 
     qualified employee whose wages at an annual rate during the 
     taxable year exceed $25,000, the percentage which would (but 
     for this section) be taken into account as the percentage for 
     purposes of subsection (b)(2) or (c)(1) for the taxable year 
     shall be reduced by an amount equal to the product of such 
     percentage and the percentage that such qualified employee's 
     wages in excess of $25,000 bears to $5,000.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Qualified small employer.--The term `qualified small 
     employer' means any employer (as defined in section 2(b)(2) 
     of the Small Employers Health Benefits Program Act of 2006) 
     which--
       ``(A) is a participating employer (as defined in section 
     2(b)(5) of such Act),
       ``(B) pays or incurs at least 60 percent of the qualified 
     employee health insurance expenses of each qualified employee 
     for self-only coverage, and
       ``(C) pays or incurs at least 50 percent of the qualified 
     employee health insurance expenses of each qualified employee 
     for all other categories of coverage.
       ``(2) Qualified employee health insurance expenses.--
       ``(A) In general.--The term `qualified employee health 
     insurance expenses' means any amount paid by an employer for 
     health insurance coverage under such Act to the extent such 
     amount is attributable to coverage provided to any employee 
     while such employee is a qualified employee.
       ``(B) Exception for amounts paid under salary reduction 
     arrangements.--No amount paid or incurred for health 
     insurance coverage pursuant to a salary reduction arrangement 
     shall be taken into account under subparagraph (A).
       ``(3) Qualified employee.--
       ``(A) Definition.--
       ``(i) In general.--The term `qualified employee' means, 
     with respect to any period, an employee (as defined in 
     section 2(b)(1) of such Act) of an employer if the total 
     amount of wages paid or incurred by such employer to such 
     employee at an annual rate during the taxable year exceeds 
     $5,000 but does not exceed $30,000.
       ``(ii) Annual adjustment.--For each taxable year after 
     2007, the dollar amounts specified for the preceding taxable 
     year (after the application of this subparagraph) shall be 
     increased by the same percentage as the average percentage 
     increase in premiums under the Federal Employees Health 
     Benefits Program under chapter 89 of title 5, United States 
     Code for the calendar year in which such taxable year begins 
     over the preceding calendar year.
       ``(B) Wages.--The term `wages' has the meaning given such 
     term by section 3121(a) (determined without regard to any 
     dollar limitation contained in such section).
       ``(f) Certain Rules Made Applicable.--For purposes of this 
     section, rules similar to the rules of section 52 shall 
     apply.
       ``(g) Credits for Nonprofit Organizations.--Any credit 
     which would be allowable under subsection (a) with respect to 
     a qualified small business if such qualified small business 
     were not exempt from tax under this chapter shall be treated 
     as a credit allowable under this subpart to such qualified 
     small business.''.
       (b) Conforming Amendments.--
       (1) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting before the period ``, or 
     from section 36 of such Code''.
       (2) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 is amended by striking the last item and inserting the 
     following new items:

``Sec. 36. Small business employee health insurance expenses.
``Sec. 37. Overpayments of tax.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after December 31, 2006.

     SEC. 16. EFFECTIVE DATE.

       Except as provided in section 10(e), this Act shall take 
     effect on the date of enactment of this Act and shall apply 
     to contracts that take effect with respect to calendar year 
     2007 and each calendar year thereafter.
                                 ______
                                 
  SA 3900. Mr. CARPER (for himself and Mrs. Feinstein) submitted an 
amendment intended to be proposed by him to the bill S. 1955, to amend 
title I of the Employee Retirement Security Act of 1974 and the Public 
Health Service Act to expand health care access and reduce costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; which was ordered to 
lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. CANCER SCREENING.

       (a) Findings.--Congress makes the following findings:
       (1) About 1,400,000 new cases of cancer will be diagnosed 
     in the United States in 2006.
       (2) Medical costs, lost wages, and lost productivity due to 
     cancer cost the United States and estimated $210,000,000,000 
     in 2005.
       (3) In 2006, cancer will take the lives of 565,000 
     Americans, or about 1,500 people per day.
       (4) About half of all new cancer cases can be prevented or 
     detected earlier through screening.
       (5) The 5 year survival rate for cancers of the breast, 
     colon, rectum, cervix, prostate, oral cavity, and skin is 
     currently about 86 percent, in part due to earlier diagnosis 
     through screening. If these cancers were diagnosed at the 
     earliest stage through regular cancer screenings, that 
     survival rate could increase to 95 percent.
       (b) Limitations.--Notwithstanding any other provision of 
     this Act (or an amendment made by this Act), nothing in this 
     Act (or amendment) shall be construed to permit a small 
     business health plan to be offered in a State, or to permit 
     the offering of any other health insurance coverage in such 
     State, if the plan or coverage fails to comply with laws of 
     the State that require coverage for cancer screening, 
     including screening for breast, cervical, colorectal, 
     prostate, lung, uterine, skin, colon, stomach, and other 
     cancers.
                                 ______
                                 
  SA 3901. Mr. AKAKA (for himself and Mr. Obama) submitted an amendment 
intended to be proposed by him to the bill S. 1955, to amend title I of 
the Employee Retirement Security Act of 1974 and the Public Health 
Service Act to expand health care access and reduce costs through the 
creation of small business health plans and through modernization of 
the health insurance marketplace; which was ordered to lie on the 
table; as follows:

       At the appropriate place, insert the following:

     SEC. __. REPEAL OF REQUIREMENT FOR DOCUMENTATION EVIDENCING 
                   CITIZENSHIP OR NATIONALITY AS A CONDITION FOR 
                   RECEIPT OF MEDICAL ASSISTANCE UNDER THE 
                   MEDICAID PROGRAM.

       (a) Repeal.--Subsections (i)(22) and (x) of section 1903 of 
     the Social Security Act (42 U.S.C. 1396b), as added by 
     section 6036 of the Deficit Reduction Act of 2005, are each 
     repealed.
       (b) Conforming Amendments.--
       (1) Section 1903 of the Social Security Act (42 U.S.C. 
     1396b) is amended--
       (A) in subsection (i)--
       (i) in paragraph (20), by adding ``or'' after the semicolon 
     at the end; and
       (ii) in paragraph (21), by striking ``; or'' and inserting 
     a period;
       (B) by redesignating subsection (y), as added by section 
     6043(b) of the Deficit Reduction Act of 2005, as subsection 
     (x); and
       (C) by redesignating subsection (z), as added by section 
     6081(a) of the Deficit Reduction Act of 2005, as subsection 
     (y).
       (2) Subsection (c) of section 6036 of the Deficit Reduction 
     Act of 2005 is repealed.
       (c) Effective Date.--The repeals and amendments made by 
     this section shall take effect as if included in the 
     enactment of the Deficit Reduction Act of 2005.
                                 ______
                                 
  SA 3902. Mr. PRYOR submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access

[[Page 7652]]

and reduce costs through the creation of small business health plans 
and through modernization of the health insurance marketplace; which 
was ordered to lie on the table; as follows:

       Strike title III.
                                 ______
                                 
  SA 3903. Mr. REED submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the end of the amendment, add the following:

                   TITLE __--MISCELLANEOUS PROVISIONS

     SEC. __. GAO EVALUATION.

       (a) In General.--Not later than 24 months after the date of 
     enactment of this Act, the Government Accountability Office 
     shall conduct a study, and submit to the appropriate 
     committees of Congress a report, concerning the impact of 
     this Act (and the amendments made by this Act) on the costs 
     and quality of health care coverage.
       (b) Repeal.--If the study and report under subsection (a) 
     finds that the implementation of this Act (and amendments) 
     does not result in a decrease in health care coverage costs 
     or in an increase in access to such coverage, the provisions 
     of this Act (and such amendments) shall be repealed effective 
     on the date on which such report is submitted.
                                 ______
                                 
  SA 3904. Mr. REED submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. LIMITATION ON PREEMPTION.

       Unless otherwise specifically provided for in this Act (or 
     an amendment made by this Act), nothing in this Act (or 
     amendment) shall be construed to preempt any State or local 
     law related to health insurance.
                                 ______
                                 
  SA 3905. Mr. REED submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce the costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. BENEFIT REVIEW PANEL ON HEALTH INSURANCE.

       (a) Benefit Review Panel.--
       (1) Establishment.--The Secretary of Health and Human 
     Services (referred to in this section as the ``Secretary''), 
     in consultation with the National Association of Insurance 
     Commissioners, shall establish the Benefit Review Panel on 
     Health Insurance (referred to in this section as the 
     ``Panel'') to develop recommendations that a Federal floor of 
     benefit mandates be established from the current array of 
     inconsistent State health insurance laws and in accordance 
     with the laws adopted in a plurality of the States.
       (2) Composition.--The Panel shall be composed of the 
     following individuals appointed by the Secretary:
       (A) Two State insurance commissioners, of which--
       (i) 1 shall be a Democrat and 1 shall be a Republican; and
       (ii) 1 shall be designated as the chairperson and 1 shall 
     be designated as the vice-chairperson.
       (B) Two representatives of State government, of which--
       (i) 1 shall be a governor of a State and 1 shall be a State 
     legislator; and
       (ii) 1 shall be a Democrat and 1 shall be a Republican.
       (C) Two representatives of employers, of which 1 shall 
     represent small employers and 1 shall represent large 
     employers.
       (D) Two representatives of health insurers, of which 1 
     shall represent insurers that offer coverage in all markets 
     (including individual, small, and large markets), and 1 shall 
     represent insurers that offer coverage in the small market.
       (E) Two representatives of consumer organizations.
       (F) Two representatives of insurance agents and brokers.
       (G) Two representatives of healthcare providers.
       (H) Two independent representatives of the American Academy 
     of Actuaries who have familiarity with the actuarial methods 
     applicable to health insurance.
       (I) One administrator of a qualified high risk pool.
       (3) Terms.--The members of the Panel shall serve for the 
     duration of the Panel. The Secretary shall fill vacancies in 
     the Panel as needed and in a manner consistent with the 
     composition described in paragraph (2).
       (b) Development of a Federal Standard Benefit Package.--In 
     accordance with the process described in subsection (c), the 
     Panel shall identify and recommend a Federal standard benefit 
     package of benefit mandates from among the current array of 
     inconsistent State insurance laws.
       (c) Process for Developing a Standard Federal Benefit 
     Package.--
       (1) In general.--In developing the standard benefit package 
     recommendations described in subsection (b), the Panel 
     shall--
       (A) review all State laws that regulate insurance benefits; 
     and
       (B) develop recommendations to harmonize inconsistent State 
     insurance laws with the laws adopted in a plurality of the 
     States.
       (2) Consultation.--The Panel shall consult with the 
     National Association of Insurance Commissioners in 
     identifying the benefit mandates of the States.
       (d) Recommendations and Adoption by Secretary.--
       (1) Recommendations.--Not later than 1 year after the date 
     of enactment of this Act, the Panel shall recommend to the 
     Secretary the adoption of the harmonized standards identified 
     under subsection (c).
       (2) Regulations.--Not later than 120 days after receipt of 
     the Panel's recommendations under paragraph (1), the 
     Secretary shall issue final regulations adopting such 
     recommendations as the Federal standard benefit package. If 
     the Secretary finds the recommended standards for an element 
     of the standard benefit package to be arbitrary and 
     inconsistent with the plurality requirements of this section, 
     the Secretary may issue a unique standard only for such 
     element, through a process similar to the process set forth 
     in subsection (c) and through the issuance of proposed and 
     final regulations.
       (3) Effective date.--The regulations issued by the 
     Secretary under paragraph (2) shall be effective on the date 
     that is 2 years after the date on which such regulations were 
     issued.
       (e) Termination.--The Panel shall terminate and be 
     dissolved after making the recommendations to the Secretary 
     pursuant to subsection (d)(1).
       (f) Updated Standard Benefit Package.--
       (1) In general.--Not later than 2 years after the 
     termination of the Panel under subsection (e), and every 2 
     years thereafter, the Secretary shall update the standard 
     benefit package adopted under subsection (d)(2). Such updated 
     standard benefit package shall be adopted in accordance with 
     paragraph (2).
       (2) Updated standard benefit package.--
       (A) In general.--In order to update the standard benefit 
     package in accordance with paragraph (1), the Secretary shall 
     review all State laws that regulate insurance mandates and 
     identify whether a plurality of States have adopted 
     substantially similar requirements that differ from the 
     standard benefit package adopted by the Secretary under 
     subsection (d). In such case, the Secretary shall consider 
     State laws that have been enacted with effective dates that 
     are contingent upon adoption as a harmonized standard in the 
     standard benefit package by the Secretary. Substantially 
     similar requirements by different States shall be considered 
     to be an updated harmonized standard.
       (B) Report.--The Secretary shall request the National 
     Association of Insurance Commissioners to issue a report to 
     the Secretary every 2 years to assist the Secretary in 
     identifying the updated benefit mandates of the States under 
     this paragraph. Nothing in this subparagraph shall be 
     construed to prohibit the Secretary from issuing updated 
     standards in the absence of such a report.
       (C) Regulations.--The Secretary shall issue regulations 
     adopting the updated standard benefit package under this 
     paragraph within 90 days of identifying the standards in need 
     of updating. Such regulations shall be effective beginning on 
     the date that is 2 years after the date on which such 
     regulations are issued.
       (g) Publication.--
       (1) Listing.--The Secretary shall maintain an up-to-date 
     listing of all harmonized standards in the standard benefit 
     package adopted under this section on the Internet website of 
     the Department of Health and Human Services.
       (2) Sample contract language.--The Secretary shall publish, 
     on the Internet website of the Department of Health and Human 
     Services, sample contract language that incorporates the 
     standard benefit package adopted under this section, which 
     may be used by insurers seeking to qualify as an eligible 
     insurer. The types of benefits that shall be included in such 
     sample contract language are the standards that are relevant 
     to the contractual bargain between the insurer and insured.
       (h) State Adoption and Enforcement.--Not later than 2 years 
     after the issuance by the Secretary of final regulations 
     adopting

[[Page 7653]]

     the Federal standard benefit package under this section, the 
     States may adopt such standard benefit package (and become an 
     adopting State) and, in which case, shall enforce the 
     harmonized standard benefit package pursuant to State law.
                                 ______
                                 
  SA 3906. Mr. BAUCUS submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce the costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. STATE OPT OUT.

       (a) In General.--The provisions of this Act (and the 
     amendments made by this Act) shall not apply with respect to 
     a State if--
       (1) the governor of such State certifies to the State 
     legislature that the application of such provisions would 
     have a detrimental effect on the residents of the State; and
       (2) the State enacts legislation that provides that such 
     provisions shall not apply in the State.
       (b) Partial Opt Out.--A State may apply subsection with 
     respect to all of the provisions of this Act (or amendments) 
     or to select provisions.
                                 ______
                                 
  SA 3907. Mr. BAUCUS submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce the costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. LIMITATION ON APPLICATION OF CERTAIN PROVISIONS.

       (a) In General.--Notwithstanding any other provision of 
     this Act (or an amendment made by this Act), any provision of 
     this Act (or amendment) that has the effect of--
       (1) increasing the premiums paid by women of child bearing 
     age for health insurance coverage;
       (2) nullifying, superseding, or limiting the application of 
     any State law that requires a health insurance issuer to 
     provide coverage for maternity care or related pre- and post-
     natal care for women and their infants;
       (3) limiting the ability of the State to enforce any law 
     described in paragraph (2);

     shall not apply and shall not be enforced.
       (b) Limitation on Use of Gender in Setting Rates.--
     Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), a health insurance issuer that 
     offers a small business health plan may not use gender as a 
     characteristic in setting health insurance premium rates with 
     respect to such plan.
                                 ______
                                 
  SA 3908. Mr. BAUCUS (for himself and Mr. Coleman) submitted an 
amendment intended to be proposed by him to the bill S. 1955, to amend 
title I of the Employee Retirement Security Act of 1974 and the Public 
Health Service Act to expand health care access and reduce costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; which was ordered to 
lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. CLARIFICATION OF AVAILABILITY OF TARGETED CASE 
                   MANAGEMENT SERVICES UNDER MEDICAID.

       (a) In General.--Section 1915(g) of the Social Security Act 
     (42 U.S.C. 1396n(g)) is amended--
       (1) in paragraph (2)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``subsection'' and inserting ``title'';
       (B) in subparagraph (A)--
       (i) in clause (i)--

       (I) by inserting ``targeted'' before ``case''; and
       (II) by inserting ``that are furnished without regard to 
     the requirements of section 1902(a)(1) and section 
     1902(a)(10)(B) to specific classes of individuals or to 
     individuals who reside in specified areas and'' after ``means 
     services''; and

       (ii) in clause (iii), in the matter preceding subclause 
     (I), by striking ``Such term'' and all that follows through 
     ``the following'' and inserting ``Except as provided in 
     subparagraph (B), such term does not include the following 
     activities with respect to the delivery of foster care 
     services''; and
       (C) by amending subparagraph (B) to read as follows:
       ``(B) Such term includes the activities described in 
     subclauses (II) and (VIII) of subparagraph (A)(iii) in the 
     case of an individual who is eligible for medical assistance 
     under the State plan but who is not eligible for services or 
     payments to be made on their behalf under part E of title 
     IV.'';
       (2) in subparagraphs (A) and (B) of paragraph (3), by 
     inserting ``targeted'' before ``case management activity'' 
     each place it appears;
       (3) in paragraph (4), by striking ``only'' and all that 
     follows through the period and inserting ``is available under 
     this title for targeted case management services as furnished 
     under the plan unless there are other third parties liable to 
     pay for such services.''; and
       (4) by adding at the end the following new paragraph:
       ``(6) Nothing in this subsection shall be construed as 
     limiting the responsibility of the program established under 
     this title to--
       ``(A) pay for any item or service for which no other payor 
     is legally liable;
       ``(B) treat other payors or providers as legally liable who 
     have no enforceable responsibility to pay for any item or 
     service; or
       ``(C) treat the availability of public funding for any item 
     or service as creating a legal liability.''.
       (b) Conforming Amendment.--The heading for section 6052 of 
     the Deficit Reduction Act of 2005 (Public Law 109-171, 120 
     Stat. 93) is amended to read as follows: ``clarification of 
     availability of targeted case management services''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of, and the 
     amendments to section 1915(g) of the Social Security Act made 
     by, section 6052 of the Deficit Reduction Act of 2005 (Public 
     Law 109-171; 120 Stat. 93).
                                 ______
                                 
  SA 3909. Mr. FEINGOLD (for himself and Mr. Graham) submitted an 
amendment intended to be proposed by him to the bill S. 1955, to amend 
title I of the Employee Retirement Security Act of 1974 and the Public 
Health Service Act to expand health care access and reduce the costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; which was ordered to 
lie on the table; as follows:

       At the appropriate place, insert the following:

                        TITLE __--HEALTH REFORM

     SEC. __01. SHORT TITLE.

       This title may be cited as the ``Reform Health Care Now 
     Act''.

     SEC. __02. SENATE CONSIDERATION OF HEALTH CARE REFORM 
                   LEGISLATION.

       (a) Introduction.--
       (1) In general.--Not later than 30 calendar days after the 
     commencement of the session of Congress that follows the date 
     of enactment of this Act, the chair of the Senate Committee 
     on Health, Education, Labor, and Pensions, the Chair of the 
     Senate Committee on Finance, the Majority Leader of the 
     Senate, and the Minority Leader of the Senate shall each 
     introduce a bill to provide a significant increase in access 
     to health care coverage for the people of the United States.
       (2) Minority party.--These bills may be introduced by 
     request and only 1 qualified bill may be introduced by each 
     individual referred to in paragraph (1) within a Congress. If 
     either committee chair fails to introduce the bill within the 
     30-day period, the ranking minority party member of the 
     respective committee may instead introduce a bill that will 
     qualify for the expedited procedure provided in this section.
       (3) Qualified bill.--
       (A) In general.--In order to qualify as a qualified bill--
       (i) the title of the bill shall be ``To reform the health 
     care system of the United States and to provide insurance 
     coverage for Americans.'';
       (ii) the bill shall reach the goal of providing health care 
     coverage to 95 percent of Americans within 10 years; and
       (iii) the bill shall be deficit neutral.
       (B) Determination.--Whether or not a bill meets the 
     criteria in subparagraph (A) shall be determined by the Chair 
     of the Senate Budget Committee, relying on estimates of the 
     Congressional Budget Office, subject to the final approval of 
     the Senate.
       (b) Referral.--
       (1) Committee bills.--Upon introduction, the bill authored 
     by the Chair of the Senate Committee on Finance shall be 
     referred to that Committee and the bill introduced by the 
     Chair of the Senate Committee on Health, Education, Labor, 
     and Pensions shall be referred to that committee. If either 
     committee has not reported the bill referred to it (or 
     another qualified bill) by the end of a 60 calendar-day 
     period beginning on the date of referral, the committee is, 
     as of that date, automatically discharged from further 
     consideration of the bill, and the bill is placed directly on 
     the chamber's legislative calendar. In calculating the 60-day 
     period, adjournments for more than 3 days are not counted.
       (2) Leader bills.--The bills introduced by the Senate 
     Majority Leader and the Senate Minority Leader shall, on 
     introduction, be placed directly on the Senate Calendar of 
     Business.

[[Page 7654]]

       (c) Motion to Proceed.--
       (1) In general.--On or after the third day following the 
     committee report or discharge or upon a bill being placed on 
     the calendar under subsection (b)(2), it shall be in order 
     for any Member, after consultation with the Majority Leader, 
     to move to proceed to the consideration of any qualified 
     bill. Notice shall first be given before proceeding. This 
     motion to proceed to the consideration of a bill can be 
     offered by a Member only on the day after the calendar day on 
     which the Member announces the Member's intention to offer 
     it.
       (2) Consideration.--The motion to proceed to a given 
     qualified bill can be made even if a motion to the same 
     effect has previously been rejected. No more than 3 such 
     motions may be made, however, in any 1 congressional session.
       (3) Privileged and nondebatable.--The motion to proceed is 
     privileged, and all points of order against the motion to 
     proceed to consideration and its consideration are waived. 
     The motion is not debatable, is not amendable, and is not 
     subject to a motion to postpone.
       (4) No other business or reconsideration.--The motion is 
     not subject to a motion to proceed to the consideration of 
     other business. A motion to reconsider the vote by which the 
     motion to proceed is agreed to or disagreed to is not in 
     order.
       (d) Consideration of Qualified Bill.--
       (1) In general.--If the motion to proceed is adopted, the 
     chamber shall immediately proceed to the consideration of a 
     qualified bill without intervening motion, order, or other 
     business, and the bill remains the unfinished business of the 
     Senate until disposed of. A motion to limit debate is in 
     order and is not debatable.
       (2) Only business.--The qualified bill is not subject to a 
     motion to postpone or a motion to proceed to the 
     consideration of other business before the bill is disposed 
     of.
       (3) Relevant amendments.--Only relevant amendments may be 
     offered to the bill.

     SEC. __03. HOUSE CONSIDERATION OF HEALTH CARE REFORM 
                   LEGISLATION.

       (a) Introduction.--
       (1) In general.--Not later than 30 calendar days after the 
     commencement of the session of Congress that follows the date 
     of enactment of this Act, the chair of the House Committee on 
     Energy and Commerce, the chair of the House Committee on Ways 
     and Means, the Majority Leader of the House, and the Minority 
     Leader of the House shall each introduce a bill to provide a 
     significant increase in access to health care coverage for 
     the people of the United States.
       (2) Minority party.--These bills may be introduced by 
     request and only 1 qualified bill may be introduced by each 
     individual referred to in paragraph (1) within a Congress. If 
     either committee chair fails to introduce the bill within the 
     30-day period, the ranking minority party member of the 
     respective committee may, within the following 30 days, 
     instead introduce a bill that will qualify for the expedited 
     procedure provided in this section.
       (3) Qualified bill.--
       (A) In general.--To qualify for the expedited procedure 
     under this section as a qualified bill, the bill shall--
       (i) reach the goal of providing healthcare coverage to 95 
     percent of Americans within 10 years; and
       (ii) be deficit neutral.
       (B) Determination.--Whether or not a bill meets the 
     criteria in subparagraph (A) shall be determined by the 
     Speaker's ruling on a point of order based on a Congressional 
     Budget Office estimate of the bill.
       (b) Referral.--
       (1) Committee bills.--Upon introduction, the bill authored 
     by the Chair of the House Committee on Energy and Commerce 
     shall be referred to that committee and the bill introduced 
     by the Chair of the House Committee on Ways and Means shall 
     be referred to that committee. If either committee has not 
     reported the bill referred to it (or another qualified bill) 
     by the end of 60 days of consideration beginning on the date 
     of referral, the committee shall be automatically discharged 
     from further consideration of the bill, and the bill shall be 
     placed directly on the Calendar of the Whole House on the 
     State of the Union. In calculating the 60-day period, 
     adjournments for more than 3 days are not counted.
       (2) Leader bills.--The bills introduced by the House 
     Majority Leader and House Minority Leader will, on 
     introduction, be placed directly on the Calendar of the Whole 
     House on the State of the Union.
       (c) Motion to Proceed.--
       (1) In general.--On or after the third day following the 
     committee report or discharge or upon a bill being placed on 
     the calendar under subsection (b)(2), it shall be in order 
     for any Member, after consultation with the Majority Leader, 
     to move to proceed to the consideration of any qualified 
     bill. Notice must first be given before proceeding. This 
     motion to proceed to the consideration of a bill can be 
     offered by a Member only on the day after the calendar day on 
     which the Member announces the Member's intention to offer 
     it.
       (2) Consideration.--The motion to proceed to a given 
     qualified bill can be made even if a motion to the same 
     effect has previously been rejected. No more than 3 such 
     motions may be made, however, in any 1 congressional session.
       (3) Privileged and nondebatable.--The motion to proceed is 
     privileged, and all points of order against the motion to 
     proceed to consideration and its consideration are waived. 
     The motion is not debatable, is not amendable, and is not 
     subject to a motion to postpone.
       (4) No other business or reconsideration.--The motion is 
     not subject to a motion to proceed to the consideration of 
     other business. A motion to reconsider the vote by which the 
     motion to proceed is agreed to or disagreed to is not in 
     order.
       (d) Consideration of a Qualified Bill.--
       (1) In general.--If the motion to proceed is adopted, the 
     chamber will immediately proceed to the consideration of a 
     qualified bill without intervening motion, order, or other 
     business, and the bill remains the unfinished business of the 
     House until disposed of.
       (2) Committee of the whole.--The bill will be considered in 
     the Committee of the Whole under the 5-minute rule, and the 
     bill shall be considered as read and open for amendment at 
     any time.
       (3) Limit debate.--A motion to further limit debate is in 
     order and is not debatable.
       (4) Relevant amendments.--Only relevant amendments may be 
     offered to the bill.
                                 ______
                                 
  SA 3910. Mr. FEINGOLD (for himself and Ms. Collins) submitted an 
amendment intended to be proposed by him to the bill S. 1955, to amend 
title I of the Employee Retirement Security Act of 1974 and the Public 
Health Service Act to expand health care access and reduce costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; which was ordered to 
lie on the table; as follows:

       At the appropriate place, insert the following:

             TITLE __--HEALTH CARE PURCHASING COOPERATIVES

     SEC. __01. SHORT TITLE.

       This title may be cited as the ``Promoting Health Care 
     Purchasing Cooperatives Act''.

     SEC. __02. FINDINGS AND PURPOSE.

       (a) Findings.--Congress makes the following findings:
       (1) Health care spending in the United States has reached 
     15 percent of the Gross Domestic Product of the United 
     States, yet 45,000,000 people, or 15.6 percent of the 
     population, remains uninsured.
       (2) After nearly a decade of manageable increases in 
     commercial insurance premiums, many employers are now faced 
     with consecutive years of double digit premium increases.
       (3) Purchasing cooperatives owned by participating 
     businesses are a proven method of achieving the bargaining 
     power necessary to manage the cost and quality of employer-
     sponsored health plans and other employee benefits.
       (4) The Employer Health Care Alliance Cooperative has 
     provided its members with health care purchasing power 
     through provider contracting, data collection, activities to 
     enhance quality improvements in the health care community, 
     and activities to promote employee health care consumerism.
       (5) According to the National Business Coalition on Health, 
     there are nearly 80 employer-led coalitions across the United 
     States that collectively purchase health care, proactively 
     challenge high costs and the inefficient delivery of health 
     care, and share information on quality. These coalitions 
     represent more than 10,000 employers.
       (b) Purpose.--It is the purpose of this title to build off 
     of successful local employer-led health insurance initiatives 
     by improving the value of their employees' health care.

     SEC. __03. GRANTS TO SELF INSURED BUSINESSES TO FORM HEALTH 
                   CARE COOPERATIVES.

       (a) Authorization.--The Secretary of Health and Human 
     Services (in this title referred to as the ``Secretary''), 
     acting through the Director of the Agency for Healthcare 
     Research and Quality, is authorized to award grants to 
     eligible groups that meet the criteria described in 
     subsection (d), for the development of health care purchasing 
     cooperatives. Such grants may be used to provide support for 
     the professional staff of such cooperatives, and to obtain 
     contracted services for planning, development, and 
     implementation activities for establishing such health care 
     purchasing cooperatives.
       (b) Eligible Group Defined.--
       (1) In general.--In this section, the term ``eligible 
     group'' means a consortium of 2 or more self-insured 
     employers, including agricultural producers, each of which 
     are responsible for their own health insurance risk pool with 
     respect to their employees.
       (2) No transfer of risk.--Individual employers who are 
     members of an eligible group may not transfer insurance risk 
     to such group.
       (c) Application.--An eligible group desiring a grant under 
     this section shall submit to the Secretary an application at 
     such time, in such manner, and accompanied by such 
     information as the Secretary may require.
       (d) Criteria.--
       (1) Feasibility study grants.--
       (A) In general.--An eligible group may submit an 
     application under subsection (c)

[[Page 7655]]

     for a grant to conduct a feasibility study concerning the 
     establishment of a health insurance purchasing cooperative. 
     The Secretary shall approve applications submitted under the 
     preceding sentence if the study will consider the criteria 
     described in paragraph (2).
       (B) Report.--After completion of a feasibility study under 
     a grant under this section, an eligible group shall submit to 
     the Secretary a report describing the results of such study.
       (2) Grant criteria.--The criteria described in this 
     paragraph include the following with respect to the eligible 
     group:
       (A) The ability of the group to effectively pool the health 
     care purchasing power of employers.
       (B) The ability of the group to provide data to employers 
     to enable such employers to make data-based decisions 
     regarding their health plans.
       (C) The ability of the group to drive quality improvement 
     in the health care community.
       (D) The ability of the group to promote health care 
     consumerism through employee education, self-care, and 
     comparative provider performance information.
       (E) The ability of the group to meet any other criteria 
     determined appropriate by the Secretary.
       (e) Cooperative Grants.--After the submission of a report 
     by an eligible group under subsection (d)(1)(B), the 
     Secretary shall determine whether to award the group a grant 
     for the establishment of a cooperative under subsection (a). 
     In making a determination under the preceding sentence, the 
     Secretary shall consider the criteria described in subsection 
     (d)(2) with respect to the group.
       (f) Cooperatives.--
       (1) In general.--An eligible group awarded a grant under 
     subsection (a) shall establish or expand a health insurance 
     purchasing cooperative that shall--
       (A) be a nonprofit organization;
       (B) be wholly owned, and democratically governed by its 
     member-employers;
       (C) exist solely to serve the membership base;
       (D) be governed by a board of directors that is 
     democratically elected by the cooperative membership using a 
     1-member, 1-vote standard; and
       (E) accept any new member in accordance with specific 
     criteria, including a limitation on the number of members, 
     determined by the Secretary.
       (2) Authorized cooperative activities.--A cooperative 
     established under paragraph (1) shall--
       (A) assist the members of the cooperative in pooling their 
     health care insurance purchasing power;
       (B) provide data to improve the ability of the members of 
     the cooperative to make data-based decisions regarding their 
     health plans;
       (C) conduct activities to enhance quality improvement in 
     the health care community;
       (D) work to promote health care consumerism through 
     employee education, self-care, and comparative provider 
     performance information; and
       (E) conduct any other activities determined appropriate by 
     the Secretary.
       (g) Review.--
       (1) In general.--Not later than 1 year after the date on 
     which grants are awarded under this section, and every 2 
     years thereafter, the Secretary shall study programs funded 
     by grants under this section and provide to the appropriate 
     committees of Congress a report on the progress of such 
     programs in improving the access of employees to quality, 
     affordable health insurance.
       (2) Sliding scale funding.--The Secretary shall use the 
     information included in the report under paragraph (1) to 
     establish a schedule for scaling back payments under this 
     section with the goal of ensuring that programs funded with 
     grants under this section are self sufficient within 10 
     years.

     SEC. __04. GRANTS TO SMALL BUSINESSES TO FORM HEALTH CARE 
                   COOPERATIVES.

       The Secretary shall carry out a grant program that is 
     identical to the grant program provided in section __03, 
     except that an eligible group for a grant under this section 
     shall be a consortium of 2 or more employers, including 
     agricultural producers, each of which--
       (1) have 99 employees or less; and
       (2) are purchasers of health insurance (are not self-
     insured) for their employees.

     SEC. __05. AUTHORIZATION OF APPROPRIATIONS.

       From the administrative funds provided to the Secretary, 
     the Secretary may use not more than a total of $60,000,000 
     for fiscal years 2006 through 2015 to carry out this title.
                                 ______
                                 
  SA 3911. Ms. MURKOWSKI submitted an amendment intended to be proposed 
by her to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. APPLICATION TO SMALL EMPLOYERS.

       Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), the provisions of this Act (and 
     amendments) shall only apply to small employers (as defined 
     in section 808(a)(10) of the Employee Retirement Income 
     Security Act of 1974 (as added by section 101(a)) and 
     including self-employed individuals) and health insurance 
     coverage issued through small employers or to the employees 
     of small employers (or self-employed individuals). Nothing in 
     this Act (or an amendment made by this Act) shall be 
     construed to preempt or supersede State laws relating to 
     health insurance offered in the large group or individual 
     markets or to limit the application of section 805(a)(3)(B) 
     of the Employee Retirement Income Security Act of 1974 (as 
     added by section 101(a)).
                                 ______
                                 
  SA 3912. Mr. HARKIN submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. LIMITATION ON APPLICATION OF CERTAIN PROVISIONS.

       Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), any provision of this Act (or 
     amendment) that has the effect of--
       (1) permitting a health insurance issuer to deny coverage 
     for a preventive service that is recommended by the United 
     States Preventive Services Task Force through a rating of 
     ``A'' of ``B''; or
       (2) limiting the ability of a State to enforce State laws 
     that require the coverage described in paragraph (1);
     shall not apply and shall not be enforced.
                                 ______
                                 
  SA 3913. Mr. HARKIN submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. LIMITATION ON APPLICATION OF CERTAIN PROVISIONS.

       Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), any provision of this Act (or 
     amendment) that has the effect of--
       (1) permitting a health insurance issuer to deny coverage 
     for screening for obesity in adults and intensive counseling 
     and behavioral interventions to promote sustained weight loss 
     for obese adults; or
       (2) limiting the ability of a State to enforce State laws 
     that require the coverage described in paragraph (1);
     shall not apply and shall not be enforced.
                                 ______
                                 
  SA 3914. Mr. HARKIN submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. PROMOTING CESSATION OF TOBACCO USE BY PREGNANT WOMEN 
                   UNDER THE MEDICAID PROGRAM.

       (a) Dropping Exception From Medicaid Prescription Drug 
     Coverage for Tobacco Cessation Medications.--Section 
     1927(d)(2) of the Social Security Act (42 U.S.C. 1396r-
     8(d)(2)) is amended--
       (1) by striking subparagraph (E);
       (2) by redesignating subparagraphs (F) through (J) as 
     subparagraphs (E) through (I), respectively; and
       (3) in subparagraph (F) (as redesignated by paragraph (2)), 
     by inserting before the period at the end the following: 
     ``except, in the case of a pregnant woman, agents approved by 
     the Food and Drug Administration for purposes of promoting, 
     and when used to promote, tobacco cessation''.
       (b) Requiring Coverage of Tobacco Cessation Counseling 
     Services for Pregnant Women.--Section 1905 of the Social 
     Security Act (42 U.S.C. 1396d(a)(4)) is amended--
       (1) in subsection (a)(4)--
       (A) by striking ``and'' before ``(C)''; and
       (B) by inserting before the semicolon at the end the 
     following new subparagraph: ``;

[[Page 7656]]

     and (D) counseling for cessation of tobacco use (as defined 
     in subsection (y)) for pregnant women''; and
       (2) by adding at the end the following:
       ``(y)(1) For purposes of this title, the term `counseling 
     for cessation of tobacco use' means therapy and counseling 
     for cessation of tobacco use for pregnant women who use 
     tobacco products or who are being treated for tobacco use 
     that is furnished--
       ``(A) by or under the supervision of a physician; or
       ``(B) by any other health care professional who--
       ``(i) is legally authorized to furnish such services under 
     State law (or the State regulatory mechanism provided by 
     State law) of the State in which the services are furnished; 
     and
       ``(ii) is authorized to receive payment for other services 
     under this title or is designated by the Secretary for this 
     purpose.
       ``(2) Subject to paragraph (3), such term is limited to--
       ``(A) therapy and counseling services recommended in 
     `Treating Tobacco Use and Dependence: A Clinical Practice 
     Guideline', published by the Public Health Service in June 
     2000, or any subsequent modification of such Guideline; and
       ``(B) such other therapy and counseling services that the 
     Secretary recognizes to be effective.
       ``(3) Such term shall not include coverage for drugs or 
     biologicals that are not otherwise covered under this 
     title.''.
       (c) Removal of Cost Sharing for Tobacco Cessation 
     Counseling Services for Pregnant Women.--
       (1) General cost sharing protections.--Section 1916 of the 
     Social Security Act (42 U.S.C. 1396o) is amended in each of 
     subsections (a)(2)(B) and (b)(2)(B) by inserting ``, and 
     counseling for cessation of tobacco use (as defined in 
     section 1905(y))'' after ``complicate the pregnancy''.
       (2) Alternative cost sharing.--Section 1916A(b)(3)(B)(iii) 
     of such Act (42 U.S.C. 1396o-1(b)(3)(B)(iii)) is amended by 
     inserting ``or to counseling for cessation of tobacco use (as 
     defined in section 1905(y))'' after ``complicate the 
     pregnancy''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act and 
     shall apply to services furnished on or after that date.
                                 ______
                                 
  SA 3915. Mr. NELSON of Florida (for himself and Ms. Snowe) submitted 
an amendment intended to be proposed by him to the bill S. 1955, to 
amend title I of the Employee Retirement Security Act of 1974 and the 
Public Health Service Act to expand health care access and reduce costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; which was ordered to 
lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. PROTECTION FOR MEDICARE BENEFICIARIES WHO ENROLL IN 
                   THE PRESCRIPTION DRUG BENEFIT DURING 2006.

       (a) In General.--Section 1851(e)(3)(B) of the Social 
     Security Act (42 U.S.C. 1395w-21(e)(3)(B)) is amended--
       (1) in clause (iii), by striking ``May 15, 2006'' and 
     inserting ``December 31, 2006''; and
       (2) by adding at the end the following new sentence:
       ``An individual making an election during the period 
     beginning on November 15, 2006, and ending on December 15, 
     2006, shall specify whether the election is to be effective 
     with respect to 2006 or with respect to 2007 (or both).''.
       (b) One-Time Change of Plan Enrollment for Medicare 
     Prescription Drug Benefit During All of 2006.--
       (1) In general.--Section 1851(e) of the Social Security Act 
     (42 U.S.C. 1395w-21(e)) is amended--
       (A) in paragraph (2)(B)--
       (i) in the heading, by striking ``for first 6 months'';
       (ii) in clause (i), by striking ``the first 6 months of 
     2006,'' and all that follows through ``is a Medicare+Choice 
     eligible individual,'' and inserting ``2006,''; and
       (iii) in clause (ii), by inserting ``(other than during 
     2006)'' after ``paragraph (3)''; and
       (B) in paragraph (4), by striking ``2006'' and inserting 
     ``2007'' each place it appears.
       (2) Conforming amendment.--Section 1860D-1(b)(1)(B)(iii) of 
     the Social Security Act (42 U.S.C. 1395w-101(b)(1)(B)(iii)) 
     is amended by striking ``subparagraphs (B) and (C) of 
     paragraph (2)'' and inserting ``paragraph (2)(C)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of section 
     101(a) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2071).
                                 ______
                                 
  SA 3916. Mr. REID (for himself, Mrs. Clinton, Mrs. Murray, and Mr. 
Menendez) submitted an amendment intended to be proposed by him to the 
bill S. 1955, to amend title I of the Employee Retirement Security Act 
of 1974 and the Public Health Service Act to expand health care access 
and reduce costs through the creation of small business health plans 
and through modernization of the health insurance marketplace; which 
was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. LIMITATION ON APPLICATION OF CERTAIN PROVISIONS.

       Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), any provision of this Act (or 
     amendment) that has the effect of--
       (1) permitting a health insurance issuer to deny, exclude, 
     or restrict coverage for prescription contraceptive drugs or 
     devices approved by the Food and Drug Administration, or 
     generic equivalents approved as substitutable by the Food and 
     Drug Administration, and outpatient contraceptive services; 
     or
       (2) limiting the ability of a State to enforce State laws 
     that prohibit denials, exclusions, or restrictions of 
     coverage described in paragraph (1);

     shall not apply and shall not be enforced.
                                 ______
                                 
  SA 3917. Mr. BAUCUS (for himself and Mr. Reid) submitted an amendment 
intended to be proposed by him to the bill S. 1955, to amend title I of 
the Employee Retirement Security Act of 1974 and the Public Health 
Service Act to expand health care access and reduce costs through the 
creation of small business health plans and through modernization of 
the health insurance marketplace; which was ordered to lie on the 
table; as follows:

       At the appropriate place, insert the following:

     SEC. __. ADDITIONAL FUNDING FOR ENROLLMENT ASSISTANCE.

       (a) In General.--There are appropriated, to be transferred 
     from the Federal Supplementary Medical Insurance Trust Fund, 
     not to exceed $25,000,000 for the Centers for Medicare & 
     Medicaid Services, for the purpose of ensuring that 
     individuals have adequate access to impartial advice on and 
     assistance enrolling in the prescription drug program under 
     part D of title XVIII of the Social Security Act.
       (b) Use of Funds.--Amounts provided under subsection (a) 
     shall be used for the following purposes:
       (1) Grants for state health insurance assistance 
     programs.--To provide additional grants to States for State 
     health insurance counseling programs (receiving assistance 
     under section 4360 of the Omnibus Reconciliation Act of 1990) 
     to broaden their capacity to--
       (A) provide personal and impartial assistance to 
     individuals seeking to enroll in a prescription drug plan or 
     an MA-PD plan under such prescription drug program;
       (B) educate and assist individuals in applying for a low-
     income subsidy under section 1860D-14 of such Act (42 U.S.C. 
     1395w-114); and
       (C) assist individuals in accessing benefits under such a 
     prescription drug plan or such an MA-PD plan once they are 
     enrolled in a plan.
       (2) Grants for innovative programs.--To provide grants to 
     eligible States to support innovative programs that provide 
     any of the services described in subparagraphs (A), (B), and 
     (C) of paragraph (1).
       (3) Promotion.--To widely promote and disseminate 
     information about the existence of, and services provided by, 
     State health insurance counseling programs.
       (c) Administration.--
       (1) SHIPs.--The amount of a grant under subsection (b)(1) 
     from the total amount made available for such grants shall be 
     based on the number of part D eligible individuals (as 
     defined in section 1860D-1(a)(3)(A) of the Social Security 
     Act (42 U.S.C. 1395w-101(a)(3))) residing in a rural area (as 
     determined by the Administrator of the Centers for Medicare & 
     Medicaid Services) relative to the total number of such 
     individuals in each State, as estimated by the Administrator.
       (2) Innovative programs.--A State is eligible for a grant 
     under subsection (b)(2) if the percentage of part D eligible 
     individuals (as so defined) with creditable prescription drug 
     coverage (as defined in section 1860D-13(b)(4) of the Social 
     Security Act (42 U.S.C. 1395w-113(b)(4))) in the State is 
     below the national average.
       (d) Availability.--Amounts provided under subsection (a) 
     shall remain available--
       (1) for obligation until December 31, 2008; and
       (2) for expenditure until December 31, 2010.
                                 ______
                                 
  SA 3918. Mr. DODD (for himself and Mr. Menendez) submitted an 
amendment intended to be proposed by him to the bill S. 1955, to amend 
title I of the Employee Retirement Security Act of 1974 and the Public 
Health Service Act to expand health care access and reduce costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; which was ordered to 
lie on the table; as follows:


[[Page 7657]]

       At the appropriate place, insert the following:

     SEC. __. LIMITATION ON APPLICATION OF CERTAIN PROVISIONS.

       Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), any provision of this Act (or 
     amendment) that has the effect of preempting any State law 
     that requires health plans and health insurance issuers to 
     cover services for beneficiaries or enrollees participating 
     in clinical trials shall not apply and shall not be enforced.
                                 ______
                                 
  SA 3919. Mr. DODD submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. LIMITATION ON APPLICATION OF CERTAIN PROVISIONS.

       Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), any provision of this Act (or 
     amendment) that has the effect of preempting any State law 
     that requires health plans and health insurance issuers to 
     provide coverage for services for newborns and children, 
     including pediatric and well-child care, and immunizations 
     shall not apply and shall not be enforced.
                                 ______
                                 
  SA 3920. Mr. DODD submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. LIMITATION ON APPLICATION OF CERTAIN PROVISIONS.

       Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), any provision of this Act (or 
     amendment) that has the effect of permitting health insurance 
     issuers to vary premiums based on health status shall not 
     apply and shall not be enforced.
                                 ______
                                 
  SA 3921. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed by her to the bill S. 1955, to amend title I of the Employee 
Retirement Security Act of 1974 and the Public Health Service Act to 
expand health care access and reduce costs through the creation of 
small business health plans and through modernization of the health 
insurance marketplace; which was ordered to lie on the table; as 
follows:

       Strike all after the enacting clause insert the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Internet Pharmacy Consumer 
     Protection Act'' or the ``Ryan Haight Act''.

     SEC. 2. INTERNET SALES OF PRESCRIPTION DRUGS.

       (a) In General.--Chapter 5 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 351 et seq.) is amended by inserting 
     after section 503A the following section:

     ``SEC. 503B. INTERNET SALES OF PRESCRIPTION DRUGS.

       ``(a) Requirements Regarding Information on Internet 
     Site.--
       ``(1) In general.--A person may not dispense a prescription 
     drug pursuant to a sale of the drug by such person if--
       ``(A) the purchaser of the drug submitted the purchase 
     order for the drug, or conducted any other part of the sales 
     transaction for the drug, through an Internet site;
       ``(B) the person dispenses the drug to the purchaser by 
     mailing or shipping the drug to the purchaser; and
       ``(C) such site, or any other Internet site used by such 
     person for purposes of sales of a prescription drug, fails to 
     meet each of the requirements specified in paragraph (2), 
     other than a site or pages on a site that--
       ``(i) are not intended to be accessed by purchasers or 
     prospective purchasers; or
       ``(ii) provide an Internet information location tool within 
     the meaning of section 231(e)(5) of the Communications Act of 
     1934 (47 U.S.C. 231(e)(5)).
       ``(2) Requirements.--With respect to an Internet site, the 
     requirements referred to in subparagraph (C) of paragraph (1) 
     for a person to whom such paragraph applies are as follows:
       ``(A) Each page of the site shall include either the 
     following information or a link to a page that provides the 
     following information:
       ``(i) The name of such person.
       ``(ii) Each State in which the person is authorized by law 
     to dispense prescription drugs.
       ``(iii) The address and telephone number of each place of 
     business of the person with respect to sales of prescription 
     drugs through the Internet, other than a place of business 
     that does not mail or ship prescription drugs to purchasers.
       ``(iv) The name of each individual who serves as a 
     pharmacist for prescription drugs that are mailed or shipped 
     pursuant to the site, and each State in which the individual 
     is authorized by law to dispense prescription drugs.
       ``(v) If the person provides for medical consultations 
     through the site for purposes of providing prescriptions, the 
     name of each individual who provides such consultations; each 
     State in which the individual is licensed or otherwise 
     authorized by law to provide such consultations or practice 
     medicine; and the type or types of health professions for 
     which the individual holds such licenses or other 
     authorizations.
       ``(B) A link to which paragraph (1) applies shall be 
     displayed in a clear and prominent place and manner, and 
     shall include in the caption for the link the words 
     `licensing and contact information'.
       ``(b) Internet Sales Without Appropriate Medical 
     Relationships.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     person may not dispense a prescription drug, or sell such a 
     drug, if--
       ``(A) for purposes of such dispensing or sale, the 
     purchaser communicated with the person through the Internet;
       ``(B) the patient for whom the drug was dispensed or 
     purchased did not, when such communications began, have a 
     prescription for the drug that is valid in the United States;
       ``(C) pursuant to such communications, the person provided 
     for the involvement of a practitioner, or an individual 
     represented by the person as a practitioner, and the 
     practitioner or such individual issued a prescription for the 
     drug that was purchased;
       ``(D) the person knew, or had reason to know, that the 
     practitioner or the individual referred to in subparagraph 
     (C) did not, when issuing the prescription, have a qualifying 
     medical relationship with the patient; and
       ``(E) the person received payment for the dispensing or 
     sale of the drug.

     For purposes of subparagraph (E), payment is received if 
     money or other valuable consideration is received.
       ``(2) Exceptions.--Paragraph (1) does not apply to--
       ``(A) the dispensing or selling of a prescription drug 
     pursuant to telemedicine practices sponsored by--
       ``(i) a hospital that has in effect a provider agreement 
     under title XVIII of the Social Security Act (relating to the 
     Medicare program); or
       ``(ii) a group practice that has not fewer than 100 
     physicians who have in effect provider agreements under such 
     title; or
       ``(B) the dispensing or selling of a prescription drug 
     pursuant to practices that promote the public health, as 
     determined by the Secretary by regulation.
       ``(3) Qualifying medical relationship.--
       ``(A) In general.--With respect to issuing a prescription 
     for a drug for a patient, a practitioner has a qualifying 
     medical relationship with the patient for purposes of this 
     section if--
       ``(i) at least one in-person medical evaluation of the 
     patient has been conducted by the practitioner; or
       ``(ii) the practitioner conducts a medical evaluation of 
     the patient as a covering practitioner.
       ``(B) In-person medical evaluation.--A medical evaluation 
     by a practitioner is an in-person medical evaluation for 
     purposes of this section if the practitioner is in the 
     physical presence of the patient as part of conducting the 
     evaluation, without regard to whether portions of the 
     evaluation are conducted by other health professionals.
       ``(C) Covering practitioner.--With respect to a patient, a 
     practitioner is a covering practitioner for purposes of this 
     section if the practitioner conducts a medical evaluation of 
     the patient at the request of a practitioner who has 
     conducted at least one in-person medical evaluation of the 
     patient and is temporarily unavailable to conduct the 
     evaluation of the patient. A practitioner is a covering 
     practitioner without regard to whether the practitioner has 
     conducted any in-person medical evaluation of the patient 
     involved.
       ``(4) Rules of construction.--
       ``(A) Individuals represented as practitioners.--A person 
     who is not a practitioner (as defined in subsection (d)(1)) 
     lacks legal capacity under this section to have a qualifying 
     medical relationship with any patient.
       ``(B) Standard practice of pharmacy.--Paragraph (1) may not 
     be construed as prohibiting any conduct that is a standard 
     practice in the practice of pharmacy.
       ``(C) Applicability of requirements.--Paragraph (3) may not 
     be construed as having any applicability beyond this section, 
     and does not affect any State law, or interpretation of State 
     law, concerning the practice of medicine.
       ``(c) Actions by States.--
       ``(1) In general.--Whenever an attorney general of any 
     State has reason to believe that the interests of the 
     residents of that

[[Page 7658]]

     State have been or are being threatened or adversely affected 
     because any person has engaged or is engaging in a pattern or 
     practice that violates section 301(l), the State may bring a 
     civil action on behalf of its residents in an appropriate 
     district court of the United States to enjoin such practice, 
     to enforce compliance with such section (including a 
     nationwide injunction), to obtain damages, restitution, or 
     other compensation on behalf of residents of such State, to 
     obtain reasonable attorneys fees and costs if the State 
     prevails in the civil action, or to obtain such further and 
     other relief as the court may deem appropriate.
       ``(2) Notice.--The State shall serve prior written notice 
     of any civil action under paragraph (1) or (5)(B) upon the 
     Secretary and provide the Secretary with a copy of its 
     complaint, except that if it is not feasible for the State to 
     provide such prior notice, the State shall serve such notice 
     immediately upon instituting such action. Upon receiving a 
     notice respecting a civil action, the Secretary shall have 
     the right--
       ``(A) to intervene in such action;
       ``(B) upon so intervening, to be heard on all matters 
     arising therein; and
       ``(C) to file petitions for appeal.
       ``(3) Construction.--For purposes of bringing any civil 
     action under paragraph (1), nothing in this chapter shall 
     prevent an attorney general of a State from exercising the 
     powers conferred on the attorney general by the laws of such 
     State to conduct investigations or to administer oaths or 
     affirmations or to compel the attendance of witnesses or the 
     production of documentary and other evidence.
       ``(4) Venue; service of process.--Any civil action brought 
     under paragraph (1) in a district court of the United States 
     may be brought in the district in which the defendant is 
     found, is an inhabitant, or transacts business or wherever 
     venue is proper under section 1391 of title 28, United States 
     Code. Process in such an action may be served in any district 
     in which the defendant is an inhabitant or in which the 
     defendant may be found.
       ``(5) Actions by other state officials.--
       ``(A) Nothing contained in this section shall prohibit an 
     authorized State official from proceeding in State court on 
     the basis of an alleged violation of any civil or criminal 
     statute of such State.
       ``(B) In addition to actions brought by an attorney general 
     of a State under paragraph (1), such an action may be brought 
     by officers of such State who are authorized by the State to 
     bring actions in such State on behalf of its residents.
       ``(d) General Definitions.--For purposes of this section:
       ``(1) The term `practitioner' means a practitioner referred 
     to in section 503(b)(1) with respect to issuing a written or 
     oral prescription.
       ``(2) The term `prescription drug' means a drug that is 
     subject to section 503(b)(1).
       ``(3) The term `qualifying medical relationship', with 
     respect to a practitioner and a patient, has the meaning 
     indicated for such term in subsection (b).
       ``(e) Internet-Related Definitions.--
       ``(1) In general.--For purposes of this section:
       ``(A) The term `Internet' means collectively the myriad of 
     computer and telecommunications facilities, including 
     equipment and operating software, which comprise the 
     interconnected world-wide network of networks that employ the 
     transmission control protocol/internet protocol, or any 
     predecessor or successor protocols to such protocol, to 
     communicate information of all kinds by wire or radio.
       ``(B) The term `link', with respect to the Internet, means 
     one or more letters, words, numbers, symbols, or graphic 
     items that appear on a page of an Internet site for the 
     purpose of serving, when activated, as a method for executing 
     an electronic command--
       ``(i) to move from viewing one portion of a page on such 
     site to another portion of the page;
       ``(ii) to move from viewing one page on such site to 
     another page on such site; or
       ``(iii) to move from viewing a page on one Internet site to 
     a page on another Internet site.
       ``(C) The term `page', with respect to the Internet, means 
     a document or other file accessed at an Internet site.
       ``(D)(i) The terms `site' and `address', with respect to 
     the Internet, mean a specific location on the Internet that 
     is determined by Internet Protocol numbers. Such term 
     includes the domain name, if any.
       ``(ii) The term `domain name' means a method of 
     representing an Internet address without direct reference to 
     the Internet Protocol numbers for the address, including 
     methods that use designations such as `.com', `.edu', `.gov', 
     `.net', or `.org'.
       ``(iii) The term `Internet Protocol numbers' includes any 
     successor protocol for determining a specific location on the 
     Internet.
       ``(2) Authority of secretary.--The Secretary may by 
     regulation modify any definition under paragraph (1) to take 
     into account changes in technology.
       ``(f) Interactive Computer Service; Advertising.--No 
     provider of an interactive computer service, as defined in 
     section 230(f)(2) of the Communications Act of 1934 (47 
     U.S.C. 230(f)(2)), or of advertising services shall be liable 
     under this section for dispensing or selling prescription 
     drugs in violation of this section on account of another 
     person's selling or dispensing such drugs, provided that the 
     provider of the interactive computer service or of 
     advertising services does not own or exercise corporate 
     control over such person.''.
       (b) Inclusion as Prohibited Act.--Section 301 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 331) is 
     amended by inserting after paragraph (k) the following:
       ``(l) The dispensing or selling of a prescription drug in 
     violation of section 503B.''.
       (c) Internet Sales of Prescription Drugs; Consideration by 
     Secretary of Practices and Procedures for Certification of 
     Legitimate Businesses.--In carrying out section 503B of the 
     Federal Food, Drug, and Cosmetic Act (as added by subsection 
     (a) of this section), the Secretary of Health and Human 
     Services shall take into consideration the practices and 
     procedures of public or private entities that certify that 
     businesses selling prescription drugs through Internet sites 
     are legitimate businesses, including practices and procedures 
     regarding disclosure formats and verification programs.
       (d) Reports Regarding Internet-Related Violations of State 
     and Federal Laws on Dispensing of Drugs.--
       (1) In general.--The Secretary of Health and Human Services 
     (referred to in this subsection as the ``Secretary'') shall, 
     pursuant to the submission of an application meeting the 
     criteria of the Secretary, make an award of a grant or 
     contract to the National Clearinghouse on Internet 
     Prescribing (operated by the Federation of State Medical 
     Boards) for the purpose of--
       (A) identifying Internet sites that appear to be in 
     violation of State or Federal laws concerning the dispensing 
     of drugs;
       (B) reporting such sites to State medical licensing boards 
     and State pharmacy licensing boards, and to the Attorney 
     General and the Secretary, for further investigation; and
       (C) submitting, for each fiscal year for which the award 
     under this subsection is made, a report to the Secretary 
     describing investigations undertaken with respect to 
     violations described in subparagraph (A).
       (2) Authorization of appropriations.--For the purpose of 
     carrying out paragraph (1), there is authorized to be 
     appropriated $100,000 for each of the fiscal years 2006 
     through 2008.
       (e) Effective Date.--The amendments made by subsections (a) 
     and (b) take effect upon the expiration of the 60-day period 
     beginning on the date of the enactment of this Act, without 
     regard to whether a final rule to implement such amendments 
     has been promulgated by the Secretary of Health and Human 
     Services under section 701(a) of the Federal Food, Drug, and 
     Cosmetic Act. The preceding sentence may not be construed as 
     affecting the authority of such Secretary to promulgate such 
     a final rule.
                                 ______
                                 
  SA 3922. Mr. SALAZAR submitted an amendment intended to be proposed 
by him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the end of the bill, add the following:

            TITLE __--NATIONAL COMMISSION ON HEALTH CARE ACT

     SEC. __1. SHORT TITLE.

       This title may be cited as the ``National Commission on 
     Health Care Act''.

     SEC. __2. FINDINGS.

       Congress makes the following findings:
       (1) Americans spent $1.9 trillion on health care in 2005, 
     up from $1.4 trillion in 2001.
       (2) While 174 million Americans were covered by employer-
     sponsored health insurance in 2004, rising health care costs 
     to both employers and employees jeopardize the ability of 
     employers and employees to maintain needed coverage.
       (3) One in every 6 people in the United States, or 
     approximately 46 million people lacked health insurance in 
     2004, and the number of uninsured individuals is expected to 
     grow.
       (4) The medicare program under title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.) provided health 
     insurance to 41.7 million elderly and disabled Americans in 
     2004, while the medicaid program under title XIX of the 
     Social Security Act (42 U.S.C. 1396 et seq.) provided health 
     care for 55 million low-income children and their parents, 
     pregnant women, and low-income elderly individuals in 2004. 
     Federal and State government expenditures for both programs 
     were approximately $606 billion in 2004.

     SEC. __3. PURPOSE.

       The purpose of this title is to establish a National 
     Commission on Health Care to--
       (1) examine and report on--
       (A) the factors leading to the rising costs of health care 
     for individuals and businesses participating in employer-
     based health insurance and the rising health care 
     expenditures for public health care programs;

[[Page 7659]]

       (B) the barriers that prevent individuals from securing 
     adequate health care coverage; and
       (C) the issues faced by people covered by public health 
     care programs;
       (2) ascertain, evaluate, and report on the evidence 
     developed by all relevant Federal, State, and local 
     governmental agencies regarding the facts and circumstances 
     surrounding rising health care costs and the barriers to 
     adequate insurance coverage;
       (3) build upon the investigations of past and current 
     entities by reviewing the findings, conclusions, and 
     recommendations of--
       (A) executive branch, congressional, or independent 
     commission investigations into the issues of health care 
     services or health care costs; and
       (B) State and local entities that have developed innovative 
     solutions to deal with the health care needs in their 
     respective communities; and
       (4) investigate and report to the President and the 
     Congress on its findings, conclusions, and recommendations 
     for policy solutions to the health care problems, including 
     current private and public services and the lack of health 
     care insurance for more than 45,800,0000 Americans.

     SEC. __4. ESTABLISHMENT.

       There is established in the legislative branch the National 
     Commission on Health Care (referred to in this title as the 
     ``Commission'').

     SEC. __5. COMPOSITION OF COMMISSION.

       (a) Members.--The Commission shall be composed of 10 
     members, of whom--
       (1) 1 member shall be appointed by the President, who shall 
     serve as the chairperson of the Commission;
       (2) 1 member shall be appointed jointly by the Majority 
     Leader of the Senate and the Speaker of the House of 
     Representatives, after consultation with the Minority Leader 
     of the Senate and the Minority Leader of the House of 
     Representatives, who shall serve as vice chairperson of the 
     Commission;
       (3) 2 members shall be appointed by the senior member of 
     the Republican leadership of the Senate;
       (4) 2 members shall be appointed by the senior member of 
     the Democratic leadership of the Senate;
       (5) 2 members shall be appointed by the senior member of 
     the Republican leadership of the House of Representatives; 
     and
       (6) 2 members shall be appointed by the senior member of 
     the Democratic leadership of the House of Representatives.
       (b) Qualifications; Initial Meeting.--
       (1) Political party affiliation.--Not more than 5 members 
     of the Commission shall be from the same political party.
       (2) Nongovernmental appointees.--An individual appointed to 
     the Commission may not be an officer or employee of the 
     Federal Government or any State or local government.
       (3) Other qualifications.--It is the sense of Congress that 
     individuals appointed to the Commission should be prominent 
     United States citizens, with national recognition and 
     significant depth of experience in such professions or 
     memberships as governmental service, health care services, 
     health care administration, business, public administration, 
     and research institutions or programs with health care 
     emphasis.
       (4) Deadline for appointment.--All members of the 
     Commission shall be appointed not later than May 15, 2006, or 
     60 days after the date of enactment of this title, whichever 
     is later.
       (5) Initial meeting.--The Commission shall meet and begin 
     the operations of the Commission as soon as practicable after 
     all members of the Commission are appointed.
       (c) Quorum; Vacancies.--After its initial meeting, the 
     Commission shall meet upon the call of the chairperson or a 
     majority of its members. Six members of the Commission shall 
     constitute a quorum. Any vacancy in the Commission shall not 
     affect its powers, and shall be filled in the same manner in 
     which the original appointment was made.

     SEC. __6. FUNCTIONS OF COMMISSION.

       (a) In General.--The functions of the Commission are to--
       (1) conduct a study that--
       (A) investigates relevant facts and experiences relating to 
     the problems within the sphere of health care, including any 
     relevant legislation, Executive order, regulation, plan, 
     policy, practice, or procedure; and
       (B) investigates relevant facts and circumstances relating 
     to--
       (i) the rising costs of health care;
       (ii) the impact of the rising costs of health care on 
     American businesses;
       (iii) the provision of health care by State and local 
     health care agencies;
       (iv) the effects of increases in insurance premiums on 
     health care coverage for businesses and individuals;
       (v) the private health insurance industry;
       (vi) the public health programs;
       (vii) innovations and reforms necessary to increase the 
     provision of affordable, quality health care to all 
     Americans;
       (viii) the role of congressional oversight and resource 
     allocation; and
       (ix) other areas of the public and private sectors 
     determined relevant by the Commission for its inquiry;
       (2) identify, review, and evaluate the lessons learned from 
     past legislative structuring of health care, coordination, 
     management policies, and procedures of the Federal 
     Government, and, when appropriate, State and local 
     governments and nongovernmental entities, relative to 
     administering, representing and implementing and receiving 
     health care; and
       (3) submit to the President and Congress such reports as 
     are required by this title containing such findings, 
     conclusions, and recommendations as the Commission shall 
     determine, including proposing organization, coordination, 
     planning, management arrangements, procedures, rules, and 
     regulations.

     SEC. __7. POWERS OF COMMISSION.

       (a) Hearings and Evidence.--The Commission or, on the 
     authority of the Commission, any subcommittee or member 
     thereof, may hold such hearings, sit and act at such times 
     and places, take such testimony, and receive such evidence as 
     the Commission determines appropriate for the purposes of 
     carrying out this title.
       (b) Contracting.--The Commission may, to such extent and in 
     such amounts as are provided for in appropriation Acts, enter 
     into contracts to enable the Commission to discharge its 
     duties under this title.
       (c) Information From Federal Agencies.--
       (1) In general.--The Commission is authorized to secure 
     directly from any executive department, bureau, agency, 
     board, commission, office, independent establishment, or 
     instrumentality of the Government, information, suggestions, 
     estimates, and statistics for the purposes of this title. 
     Each department, bureau, agency, board, commission, office, 
     independent establishment, or instrumentality shall, to the 
     extent authorized by law, furnish such information, 
     suggestions, estimates, and statistics directly to the 
     Commission, upon request made by the chairperson, the 
     chairperson of any subcommittee created by a majority of the 
     Commission, or any member designated by a majority of the 
     Commission.
       (2) Receipt, handling storage, and dissemination.--
     Information shall only be received, handled, stored, and 
     disseminated by members of the Commission and its staff 
     consistent with all applicable statutes, regulations, and 
     Executive orders.
       (d) Assistance From Federal Agencies.--
       (1) General services administration.--The Administrator of 
     General Services shall provide to the Commission on a 
     reimbursable basis administrative support and other services 
     for the performance of the Commission's functions.
       (2) Other departments and agencies.--In addition to the 
     assistance prescribed in paragraph (1), departments and 
     agencies of the United States may provide to the Commission 
     such services, funds, facilities, staff, and other support 
     services as they may determine advisable and as may be 
     authorized by law.
       (e) Gifts.--The Commission may accept, use, and dispose of 
     gifts or donations of services or property.
       (f) Postal Services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as departments and agencies of the United States.

     SEC. __8. STAFF OF COMMISSION.

       (a) In General.--
       (1) Appointment and compensation.--The chairperson of the 
     Commission, in consultation with vice chairperson, in 
     accordance with rules agreed upon by the Commission, may 
     appoint and fix the compensation of a staff director and such 
     other personnel as may be necessary to enable the Commission 
     to carry out its functions, without regard to the provisions 
     of title 5, United States Code, governing appointments in the 
     competitive service, and without regard to the provisions of 
     chapter 51 and subchapter III of chapter 53 of such title 
     relating to classification and General Schedule pay rates, 
     except that no rate of pay fixed under this subsection may 
     exceed the equivalent of that payable for a position at level 
     V of the Executive Schedule under section 5316 of title 5, 
     United States Code.
       (2) Personnel as federal employees.--
       (A) In general.--The staff director and any personnel of 
     the Commission who are employees shall be employees under 
     section 2105 of title 5, United States Code, for purposes of 
     chapters 63, 81, 83, 84, 85, 87, 89, and 90 of that title.
       (B) Members of commission.--Subparagraph (A) shall not be 
     construed to apply to members of the Commission.
       (b) Detailees.--Any Federal Government employee may be 
     detailed to the Commission without reimbursement from the 
     Commission, and such detailee shall retain the rights, 
     status, and privileges of the detailee's regular employment 
     without interruption.
       (c) Consultant Services.--The Commission is authorized to 
     procure the services of experts and consultants in accordance 
     with section 3109 of title 5, United States Code, but at 
     rates not to exceed the daily rate paid a person occupying a 
     position at level IV of the Executive Schedule under section 
     5315 of title 5, United States Code.

     SEC. __9. COMPENSATION AND TRAVEL EXPENSES.

       (a) Compensation.--Each member of the Commission may be 
     compensated at a rate not to exceed the daily equivalent of 
     the annual rate of basic pay in effect for a position

[[Page 7660]]

     at level IV of the Executive Schedule under section 5315 of 
     title 5, United States Code, for each day during which that 
     member is engaged in the actual performance of the duties of 
     the Commission.
       (b) Travel Expenses.--While away from their homes or 
     regular places of business in the performance of services for 
     the Commission, members of the Commission shall be allowed 
     travel expenses, including per diem in lieu of subsistence, 
     in the same manner as persons employed intermittently in the 
     Government service are allowed expenses under section 5703(b) 
     of title 5, United States Code.

     SEC. _10. REPORTS OF COMMISSION; TERMINATION.

       (a) Interim Reports.--The Commission may submit to the 
     President and Congress interim reports containing such 
     findings, conclusions, and recommendations for corrective 
     measures as have been agreed to by a majority of Commission 
     members.
       (b) Final Report.--Not later than 12 months after the date 
     of the enactment of this title, the Commission shall submit 
     to the President and Congress a final report containing such 
     findings, conclusions, and recommendations for corrective 
     measures as have been agreed to by a majority of Commission 
     members.
       (c) Termination.--
       (1) In general.--The Commission, and all the authorities of 
     this title, shall terminate 60 days after the date on which 
     the final report is submitted under subsection (b).
       (2) Administrative activities before termination.--The 
     Commission may use the 60 day period referred to in paragraph 
     (1) for the purpose of concluding its activities, including 
     providing testimony to committees of Congress concerning its 
     reports and disseminating the final report.

     SEC. _11. FUNDING.

       (a) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this title $6,000,000.
       (b) Duration of Availability.--Amounts made available to 
     the Commission under subsection (a) shall remain available 
     until the termination of the Commission.
                                 ______
                                 
  SA 3923. Ms. STABENOW (for herself and Mr. Levin) submitted an 
amendment intended to be proposed by her to the bill S. 1955, to amend 
title I of the Employee Retirement Security Act of 1974 and the Public 
Health Service Act to expand health care access and reduce the costs 
through the creation of small business health plans and through 
modernization of the health insurance marketplace; which was ordered to 
lie on the table; as follows:

       At the appropriate place, insert the following:

                     TITLE __--THREE-SHARE PROGRAM

     SEC. __01. THREE-SHARE PROGRAMS.

       Title XXIX of the Public Health Service Act, as added by 
     section 201, is amended by adding at the end the following:

               ``Subtitle C--Providing for the Uninsured

     ``SEC. 2941. THREE-SHARE PROGRAMS.

       ``(a) Pilot Programs.--The Secretary, acting through the 
     Administrator, shall award grants under this section for the 
     startup and operation of 25 eligible three-share pilot 
     programs for a 5-year period.
       ``(b) Grants for Three-Share Programs.--
       ``(1) Establishment.--The Administrator may award grants to 
     eligible entities--
       ``(A) to establish three-share programs;
       ``(B) to provide for contributions to the premiums assessed 
     for coverage under a three-share program as provided for in 
     subsection (c)(2)(B)(iii); and
       ``(C) to establish risk pools.
       ``(2) Three-share program plan.--Each entity desiring a 
     grant under this subsection shall develop a plan for the 
     establishment and operation of a three-share program that 
     meets the requirements of paragraphs (2) and (3) of 
     subsection (c).
       ``(3) Application.--Each entity desiring a grant under this 
     subsection shall submit an application to the Administrator 
     at such time, in such manner and containing such information 
     as the Administrator may require, including--
       ``(A) the three-share program plan described in paragraph 
     (2); and
       ``(B) an assurance that the eligible entity will--
       ``(i) determine a benefit package;
       ``(ii) recruit businesses and employees for the three-share 
     program;
       ``(iii) build and manage a network of health providers or 
     contract with an existing network or licensed insurance 
     provider;
       ``(iv) manage all administrative needs; and
       ``(v) establish relationships among community, business, 
     and provider interests.
       ``(4) Priority.--In awarding grants under this section the 
     Administrator shall give priority to an applicant--
       ``(A) that is an existing three-share program;
       ``(B) that is an eligible three-share program that has 
     demonstrated community support; or
       ``(C) that is located in a State with insurance laws and 
     regulations that permit three-share program expansion.
       ``(c) Grant Eligibility.--
       ``(1) In general.--The Secretary, acting through the 
     Administrator, shall promulgate regulations providing for the 
     eligibility of three-share programs for participation in the 
     pilot program under this section.
       ``(2) Three-share program requirements.--
       ``(A) In general.--To be determined to be an eligible 
     three-share program for purposes of participation in the 
     pilot program under this section a three-share program 
     shall--
       ``(i) be either a non-profit or local governmental entity;
       ``(ii) define the region in which such program will provide 
     services;
       ``(iii) have the capacity to carry out administrative 
     functions of managing health plans, including monthly 
     billings, verification/enrollment of eligible employers and 
     employees, maintenance of membership rosters, development of 
     member materials (such as handbooks and identification 
     cards), customer service, and claims processing; and
       ``(iv) have demonstrated community involvement.
       ``(B) Payment.--To be eligible under paragraph (1), a 
     three-share program shall pay the costs of services provided 
     under subparagraph (A)(ii) by charging a monthly premium for 
     each covered individual to be divided as follows:
       ``(i) Not more than 30 percent of such premium shall be 
     paid by a qualified employee desiring coverage under the 
     three-share program.
       ``(ii) Not more than 30 percent of such premium shall be 
     paid by the qualified employer of such a qualified employee.
       ``(iii) At least 40 percent of such premium shall be paid 
     from amounts provided under a grant under this section.
       ``(iv) Any remaining amount shall be paid by the three-
     share program from other public, private, or charitable 
     sources.
       ``(C) Program flexibility.--A three-share program may set 
     an income eligibility guideline for enrollment purposes.
       ``(3) Coverage.--
       ``(A) In general.--To be an eligible three-share program 
     under this section, the three-share program shall provide at 
     least the following benefits:
       ``(i) Physicians services.
       ``(ii) In-patient hospital services.
       ``(iii) Out-patient services.
       ``(iv) Emergency room visits.
       ``(v) Emergency ambulance services.
       ``(vi) Diagnostic lab fees and x-rays.
       ``(vii) Prescription drug benefits.
       ``(B) Limitation.--Nothing in subparagraph (A) shall be 
     construed to require that a three-share program provide 
     coverage for services performed outside the region described 
     in paragraph (2)(A)(i).
       ``(C) Preexisting conditions.--A program described in 
     subparagraph (A) shall not be an eligible three-share program 
     under paragraph (1) if any individual can be excluded from 
     coverage under such program because of a preexisting health 
     condition.
       ``(d) Grants for Existing Three-Share Programs To Meet 
     Certification Requirements.--
       ``(1) In general.--The Administrator may award grants to 
     three-share programs that are operating on the date of 
     enactment of this section.
       ``(2) Application.--Each eligible entity desiring a grant 
     under this subsection shall submit an application to the 
     Administrator at such time, in such manner, and containing 
     such information as the Administrator may require.
       ``(e) Application of State Laws.--Nothing in this section 
     shall be construed to preempt State law.
       ``(f) Distressed Business Formula.--
       ``(1) In general.--Not later than 60 days after the date of 
     enactment of this section, the Administrator of the Health 
     Resources and Services Administration shall develop a formula 
     to determine which businesses qualify as distressed 
     businesses for purposes of this section.
       ``(2) Effect on insurance market.--Granting eligibility to 
     a distressed business using the formula under paragraph (1) 
     shall not interfere with the insurance market. Any business 
     found to have reduced benefits to qualify as a distressed 
     business under the formula under paragraph (1) shall not be 
     eligible to be a three-share program for purposes of this 
     section.
       ``(g) Definitions.--In this section:
       ``(1) Administrator.--The term `Administrator' means the 
     Administrator of the Health Resources and Services 
     Administration.
       ``(2) Covered individual.--The term `covered individual' 
     means--
       ``(A) a qualified employee; or
       ``(B) a child under the age of 23 or a spouse of such 
     qualified employee who--
       ``(i) lacks access to health care coverage through their 
     employment or employer;
       ``(ii) lacks access to health coverage through a family 
     member;
       ``(iii) is not eligible for coverage under the medicare 
     program under title XVIII or the medicaid program under title 
     XIX; and
       ``(iv) does not qualify for benefits under the State 
     Children's Health Insurance Program under title XXI.
       ``(3) Distressed business.--The term `distressed business' 
     means a business that--

[[Page 7661]]

       ``(A) in light of economic hardship and rising health care 
     premiums may be forced to discontinue or scale back its 
     health care coverage; and
       ``(B) qualifies as a distressed business according to the 
     formula under subsection (g).
       ``(4) Eligible entity.--The term `eligible entity' means an 
     entity that meets the requirements of subsection (a)(2)(A).
       ``(5) Qualified employee.--The term `qualified employee' 
     means any individual employed by a qualified employer who 
     meets certain criteria including--
       ``(A) lacking access to health coverage through a family 
     member or common law partner;
       ``(B) not being eligible for coverage under the medicare 
     program under title XVIII or the medicaid program under title 
     XIX; and
       ``(C) agreeing that the share of fees described in 
     subsection (a)(2)(B)(i) shall be paid in the form of payroll 
     deductions from the wages of such individual.
       ``(6) Qualified employer.--The term `qualified employer' 
     means an employer as defined in section 3(d) of the Fair 
     Labor Standards Act of 1938 (29 U.S.C. 203(d)) who--
       ``(A) is a small business concern as defined in section 
     3(a) of the Small Business Act (15 U.S.C. 632);
       ``(B) is located in the region described in subsection 
     (a)(2)(A)(i); and
       ``(C) has not contributed to the health care benefits of 
     its employees for at least 12 months consecutively or 
     currently provides insurance but is classified as a 
     distressed business.
       ``(h) Evaluation.--Not later than 90 days after the end of 
     the 5-year period during which grants are available under 
     this section, the Government Accountability Office shall 
     submit to the Secretary and the appropriate committees of 
     Congress a report concerning--
       ``(1) the effectiveness of the programs established under 
     this section;
       ``(2) the number of individuals covered under such 
     programs;
       ``(3) any resulting best practices; and
       ``(4) the level of community involvement.
       ``(i) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, such 
     sums as may be necessary for each of fiscal years 2006 
     through 2011.''.
                                 ______
                                 
  SA 3924. Ms. SNOWE (for herself, Mr. Byrd, Mr. Talent, and Mr. 
Domenici) submitted an amendment intended to be proposed by her to the 
bill S. 1955, to amend title I of the Employee Retirement Security Act 
of 1974 and the Public Health Service Act to expand health care access 
and reduce costs through the creation of small business health plans 
and through modernization of the health insurance marketplace; which 
was ordered to lie on the table; as follows:

       In part II of subtitle A of title XXIX of the Public Health 
     Service Act, as added by section 201 of the amendment, strike 
     all through section 2922 and insert the following:

                      ``PART II--AFFORDABLE PLANS

     ``SEC. 2921. DEFINITIONS.

       ``In this part:
       ``(1) Adopting state.--The term `adopting State' means a 
     State that has enacted a law providing that small group and 
     large group health insurers in such State may offer and sell 
     products in accordance with the List of Required Benefits and 
     the Terms of Application as provided for in section 2922(b)
       ``(2) Eligible insurer.--The term `eligible insurer' means 
     a health insurance issuer that is licensed in a nonadopting 
     State and that--
       ``(A) notifies the Secretary, not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage 
     consistent with the List of Required Benefits and Terms of 
     Application in a nonadopting State;
       ``(B) notifies the insurance department of a nonadopting 
     State (or other applicable State agency), not later than 30 
     days prior to the offering of coverage described in this 
     subparagraph, that the issuer intends to offer health 
     insurance coverage in that State consistent with the List of 
     Required Benefits and Terms of Application, and provides with 
     such notice a copy of any insurance policy that it intends to 
     offer in the State, its most recent annual and quarterly 
     financial reports, and any other information required to be 
     filed with the insurance department of the State (or other 
     State agency) by the Secretary in regulations; and
       ``(C) includes in the terms of the health insurance 
     coverage offered in nonadopting States (including in the 
     terms of any individual certificates that may be offered to 
     individuals in connection with such group health coverage) 
     and filed with the State pursuant to subparagraph (B), a 
     description in the insurer's contract of the List of Required 
     Benefits and a description of the Terms of Application, 
     including a description of the benefits to be provided, and 
     that adherence to such standards is included as a term of 
     such contract.
       ``(3) Health insurance coverage.--The term `health 
     insurance coverage' means any coverage issued in the small 
     group or large group health insurance markets, including with 
     respect to small business health plans, except that such term 
     shall not include excepted benefits (as defined in section 
     2791(c)).
       ``(4) List of required benefits.--The term `List of 
     Required Benefits' means the List issued under section 
     2922(a).
       ``(5) Nonadopting state.--The term `nonadopting State' 
     means a State that is not an adopting State.
       ``(6) State law.--The term `State law' means all laws, 
     decisions, rules, regulations, or other State actions 
     (including actions by a State agency) having the effect of 
     law, of any State.
       ``(7) State provider freedom of choice law.--The term 
     `State Provider Freedom of Choice Law' means a State law 
     requiring that a health insurance issuer, with respect to 
     health insurance coverage, not discriminate with respect to 
     participation, reimbursement, or indemnification as to any 
     provider who is acting within the scope of the provider's 
     license or certification under applicable State law.
       ``(8) Terms of application.--The term `Terms of 
     Application' means terms provided under section 2922(a).

     ``SEC. 2922. OFFERING AFFORDABLE PLANS.

       ``(a) List of Required Benefits.--Not later than 3 months 
     after the date of enactment of this title, the Secretary, in 
     consultation with the National Association of Insurance 
     Commissioners, shall issue by interim final rule a list (to 
     be known as the `List of Required Benefits') of covered 
     benefits, services, or categories of providers that are 
     required to be provided by health insurance issuers, in each 
     of the small group and large group markets, in at least 26 
     States as a result of the application of State covered 
     benefit, service, and category of provider mandate laws. With 
     respect to plans sold to or through small business health 
     plans, the List of Required Benefits applicable to the small 
     group market shall apply.
       ``(b) Terms of Application.--
       ``(1) State with mandates.--With respect to a State that 
     has a covered benefit, service, or category of provider 
     mandate in effect that is covered under the List of Required 
     Benefits under subsection (a), such State mandate shall, 
     subject to paragraph (3) (concerning uniform application), 
     apply to a coverage plan or plan in, as applicable, the small 
     group or large group market or through a small business 
     health plan in such State.
       ``(2) States without mandates.--With respect to a State 
     that does not have a covered benefit, service, or category of 
     provider mandate in effect that is covered under the List of 
     Required Benefits under subsection (a), such mandate shall 
     not apply, as applicable, to a coverage plan or plan in the 
     small group or large group market or through a small business 
     health plan in such State.
       ``(3) Uniform application of laws.--
       ``(A) In general.--With respect to a State described in 
     paragraph (1), in applying a covered benefit, service, or 
     category of provider mandate that is on the List of Required 
     Benefits under subsection (a) the State shall permit a 
     coverage plan or plan offered in the small group or large 
     group market or through a small business health plan in such 
     State to apply such benefit, service, or category of provider 
     coverage in a manner consistent with the manner in which such 
     coverage is applied under one of the three most heavily 
     subscribed national health plans offered under the Federal 
     Employee Health Benefits Program under chapter 89 of title 5, 
     United States Code (as determined by the Secretary in 
     consultation with the Director of the Office of Personnel 
     Management), and consistent with the Publication of Benefit 
     Applications under subsection (c). In the event a covered 
     benefit, service, or category of provider appearing in the 
     List of Required Benefits is not offered in one of the three 
     most heavily subscribed national health plans offered under 
     the Federal Employees Health Benefits Program, such covered 
     benefit, service, or category of provider requirement shall 
     be applied in a manner consistent with the manner in which 
     such coverage is offered in the remaining most heavily 
     subscribed plan of the remaining Federal Employees Health 
     Benefits Program plans, as determined by the Secretary, in 
     consultation with the Director of the Office of Personnel 
     Management.
       ``(B) Exception regarding state provider freedom of choice 
     laws.--Notwithstanding subparagraph (A), in the event a 
     category of provider mandate is included in the List of 
     Covered Benefits, any State Provider Freedom of Choice Law 
     (as defined in section 2921(7)) that is in effect in any 
     State in which such category of provider mandate is in effect 
     shall not be preempted, with respect to that category of 
     provider, by this part.
       ``(c) Publication of Benefit Applications.--Not later than 
     3 months after the date of enactment of this title, and on 
     the first day of every calendar year thereafter, the 
     Secretary, in consultation with the Director of the Office of 
     Personnel Management, shall publish in the Federal Register a 
     description of such covered benefits, services, and 
     categories of providers covered in that calendar year by each 
     of the three most heavily subscribed nationally available 
     Federal Employee Health Benefits Plan options

[[Page 7662]]

     which are also included on the List of Required Benefits.
       ``(d) Effective Dates.--
       ``(1) Small business health plans.--With respect to health 
     insurance provided to participating employers of small 
     business health plans, the requirements of this part 
     (concerning lower cost plans) shall apply beginning on the 
     date that is 12 months after the date of enactment of this 
     title.
       ``(2) Non-association coverage.--With respect to health 
     insurance provided to groups or individuals other than 
     participating employers of small business health plans, the 
     requirements of this part shall apply beginning on the date 
     that is 15 months after the date of enactment of this title.
       ``(e) Updating of List of Required Benefits.--Not later 
     than 2 years after the date on which the list of required 
     benefits is issued under subsection (a), and every 2 years 
     thereafter, the Secretary, in consultation with the National 
     Association of Insurance Commissioners, shall update the list 
     based on changes in the laws and regulations of the States. 
     The Secretary shall issue the updated list by regulation, and 
     such updated list shall be effective upon the first plan year 
     following the issuance of such regulation.''.

                          ____________________