A bill to provide school-based education and support services and comprehensive family support services to families of members of the Armed Forces of the United States who are serving on active duty, to provide continued coverage under group health plans for the families of members of the Armed Forces serving on active duty during the Persian Gulf conflict, and for other purposes.

Directs the Secretary of Defense to make grants to eligible local educational agencies in order to provide: (1) individual and group counseling for children and other family members of military personnel who have been deployed in connection with, or are casualties of, an armed conflict; (2) training and technical assistance for teachers and other school employees to prepare them to address questions and concerns of children of such military personnel; and (3) other appropriate programs, services, and information to address the special needs of such children and other family members of such military personnel resulting from their deployment, return, or resultant medical or rehabilitation needs. Authorizes appropriations.

Directs the Secretary to make grants to appropriate nonprofit organizations (such as the YMCA and Red Cross) that enter into an agreement with the Secretary to furnish family support services to families of military personnel: (1) living in an area outside of a U.S. military installation in which there is a significant concentration of families of members of the reserve serving on active duty in connection with the Persian Gulf; or (2) living at or in the vicinity of an installation or facility of the Department of Defense where there is a demonstrated need to increase case-managed family support services for families of military personnel deployed in connection with a current armed conflict or to consolidate the furnishing of such services through a family support center at such facility. Outlines other grant uses and conditions. Requires funds made available to a military family support center to be used to increase the availability of case-managed family support services at such facility or installation. Provides a $50,000 minimum for each grant. Limits to 15 percent of the grant the amount which may be used to provide actual notice to appropriate military families of the availability of family support services from the grant recipients. Authorizes appropriations.

Allows a reserve member called to active duty in connection with the Persian Gulf conflict and covered at the time of such call under an employer-provided group health insurance plan for the member and his or her family to elect to continue coverage under the employer-provided plan in lieu of being provided interim coverage while on active duty under the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS). Requires the Secretary of Defense, in the case of such an election, to reimburse the private employer for the cost of continued coverage during the member's period of active duty. Requires the employer to provide continued coverage under the private plan for the beneficiaries of such reserve personnel, unless the plan for all employees of the employer is discontinued. Requires the Secretary to apply requirements and limitations similar to those applicable to the continuation coverage of group health plans under the Internal Revenue Code.

States that all direct or discretionary spending contained in this Act is to be considered emergency expenditures related to Operation Desert Shield for purposes of the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act).