Prescription for Health Act of 1994

TABLE OF CONTENTS:

Title I: Insurance Reform

Subtitle A: Reform of Insured Market for Employers and

Individuals

Subtitle B: ERISA and Internal Revenue Code

Requirements

Title II: Tax Fairness

Title III: Medical Savings Accounts

Title IV: Medical Malpractice

Title V: Antitrust Reform

Title VI: Consumer Information

The Prescription for Health Act of 1994 - Title I: Insurance Reforms - Subtitle A: Reform of Insured Market for Employers and Individuals - Part 1: General Reforms - Prohibits an insurer from canceling coverage or denying renewal of coverage of health insurance with respect to an employer or an individual other than: (1) for nonpayment of premiums, fraud or other misrepresentations, or noncompliance with plan provisions; or (2) because the insurer is ceasing to provide any health insurance in the State or, in the case of a health maintenance organization, in a geographic area with respect to employer or individuals, respectively.

Prohibits an insurer that terminates the offering of health insurance plans in an area with respect to the market for employers or individuals from offering such a plan to any employer or individual in the area for five years after such termination.

(Sec. 102) Bars an insurer from providing for an increase in the premium charged an employer or an individual for health insurance by a percentage that exceeds the percentage change in the premium charged any other employer or individual with the same characteristics, for similar benefits, and for the same area.

(Sec. 103) Prohibits an insurer from denying health insurance coverage to any employer or individual, and a sponsor of a group health plan (GHP) from denying coverage to an eligible individual, on the basis of health status or preexisting condition if the employer or individual was covered by health insurance or a GHP for the same condition by another insurer or GHP for a period of not less than 12 months within the 15-month period ending with the month in which the application for coverage is made, with exceptions.

Requires an insurer or sponsor of a GHP to waive any period applicable to a preexisting condition under health insurance or a GHP if the employer or individual was covered by such insurance or GHP for the same condition by another insurer or sponsor of a GHP for a period of not less than 12 months within the 15-month period ending with the month in which the application for coverage is made.

(Sec. 104) Prohibits the premium charged by an insurer with respect to an employer or an individual covered under health insurance by another insurer for a period of not less than 12 consecutive months from exceeding the greater of the amount charged during the previous rating period or the premium charged to any other employer or individual with the same characteristics, for similar benefits, and for the same area.

(Sec. 105) Permits variations in health insurance premiums among employers or individuals based on differences in covered services, age, gender, family composition, geographic area, or group size.

(Sec. 106) Requires an insurer, upon request, to fully disclose all actuarial assumptions and methods used in establishing its premiums for health insurance at the time it offers or renews coverage to any employer or individual.

(Sec. 107) Subjects any insurer or sponsor of a GHP which fails to comply with the provisions of this part to a civil monetary penalty of $250,000 per individual for each violation.

Part 2: State Preemptions - Specifies that no provision of State or local law shall apply: (1) that requires the coverage under health insurance of any insurer of any specific benefits, services, or categories of health care or services of any class or type of provider of health care; and (2) that prohibits two or more employers or groups from obtaining coverage under a multiple health insurance plan.

Subtitle B: ERISA and Internal Revenue Code Requirements - Amends the Employee Retirement Income Security Act of 1974 to direct the Secretary of Labor to prescribe: (1) solvency standards for GHPs that are single-employer plans which will ensure that benefits under such plans will be provided in full when due; and (2) rules for monitoring and enforcing compliance with such standards.

Requires: (1) the Secretary, in prescribing such solvency standards, to take into consideration the extent to which a plan's potential liabilities are covered by excess or stop-loss coverage; and (2) the plan sponsor of each GHP to take such steps as necessary to ensure that plan assets held for the purpose of complying with such standards are held in trust under the plan and are available solely for such purpose.

(Sec. 133) Amends the Internal Revenue Code to provide that the account limit for any qualified asset account for a taxable year is the amount reasonably and actuarially necessary to fund compliance with Federal or State solvency requirements, in the case of an account providing medical benefits, as well as specified claims and administrative costs.

Title II: Tax Fairness - Amends the Internal Revenue Code to allow individuals a deduction from gross income for medical expenses attributable to health plan coverage and contributions to a medical savings account.

Revises the medical expense deduction to include amounts paid under a health plan or paid to a medical savings account. Makes such deduction inapplicable to participants in a health plan maintained by their employer.

Excludes employer contributions to medical savings accounts from employment taxes.

Allows an individual tax credit for amounts allocable to FICA taxes used to purchase health plan coverage and to make contributions to medical savings accounts. Makes such credit inapplicable to participants in a health plan maintained by their employer.

Title III: Medical Savings Accounts - Establishes tax-exempt medical savings accounts as trusts created to pay the medical expenses of beneficiaries.

Title IV: Medical Malpractice - Makes this title applicable to any medical malpractice liability claim (claim) and any medical malpractice liability action (action) brought in State or Federal court, except regarding a claim or action for damages arising from a vaccine-related injury or death to the extent that specified provisions of the Public Health Service Act apply.

Sets forth provisions regarding: (1) preemption and negotiated liability; (2) effect on sovereign immunity and choice of law or venue; and (3) Federal court jurisdiction.

(Sec. 402) Sets a two-year statute of limitations from the date the alleged injury was, or reasonably should have been, discovered for actions, with an exception for certain minors.

(Sec. 403) Makes the liability of each defendant in an action, with respect to economic and noneconomic damages, several only and not joint. Specifies that such a defendant shall be liable only for the amount of such damages allocated to the defendant in direct proportion to such defendant's percentage of fault or responsibility for the claimant's injury.

(Sec. 404) Limits to $250,000 the total amount of noneconomic damages that may be awarded to a claimant and the members of the claimant's family for losses resulting from the injury which is the subject of an action.

(Sec. 405) Prohibits requiring a defendant, in an action in which the damages awarded for any economic losses to be incurred after the date on which the judgment is entered exceed $100,000, from paying such damages in a single, lump-sum payment. Authorizes the court to require that such a defendant purchase an annuity or fund a reversionary trust to make periodic payments under specified circumstances. Bars a court judgment awarding periodic payments from being reopened at any time to contest, amend, or modify the schedule or amount of payments in the absence of fraud or any other basis under which a party may obtain relief from a final judgment.

(Sec. 406) Authorizes a court, as a condition of the initiation of an action, to require an undertaking for the payment of the costs associated with the action, including reasonable attorney fees. Directs the court to require the party against whom the judgment was rendered to pay to the prevailing party costs and fees incurred, with exceptions.

(Sec. 407) Specifies that the total amount of damages received by a claimant in an action shall be reduced by any other payment that has been, or will be, made to such claimant to compensate such claimant for an injury that was part of the action.

(Sec. 408) Prohibits the award of noneconomic damages regarding any medical product liability claim alleged against a medical product producer if: (1) the drug or device that is the subject of such claim was subject to approval or premarket approval by the Food and Drug Administration (FDA) with respect to the safety of the formulation or performance of the aspect, or the adequacy of the packaging or labeling, of the drug or device, and was approved by the FDA; or (2) the drug or device is generally recognized as safe and effective pursuant to conditions established by the FDA and applicable regulations. Makes an exception in the case of withheld information, misrepresentation, or illegal payment to an FDA official for purposes of securing approval.

Title V: Antitrust Reform - Directs the Attorney General to: (1) provide for the development and publication of explicit guidelines on the application of antitrust laws to the activities of health plans; and (2) establish a review process under which the administrator or sponsor of a health plan may submit a request to the Attorney General to obtain a prompt opinion from the Department of Justice on the plan's conformity with the Federal antitrust laws.

(Sec. 502) Requires the Attorney General to issue a certificate of public advantage to each eligible health care collaborative activity that complies with specified requirements in effect on or after the expiration of the one-year period that begins on the date of this Act's enactment (thus making such activity and the parties to such activity immune from liability under the antitrust laws for conduct described).

Sets forth provisions regarding requirements applicable to the issuance of such certificates. Directs the Attorney General to issue a certificate to an eligible health care collaborative activity upon finding that the benefits are likely to outweigh any reduction in competition likely to result from the activity and that such reduction in competition is reasonably necessary to obtain such benefits.

Sets forth provisions regarding: (1) the establishment of criteria and procedures; (2) eligible health care collaborative activity; (3) the review of applications for certificates; (4) revocation of certificates; and (5) judicial review.

Title VI: Consumer Information - Requires each hospital, physician, or other health care provider to make available to an individual, before providing any health care item or service in the United States, a list of all applicable fees and charges (and where not readily determinable in advance, the provider may use such estimates as the Secretary of Health and Human Services may permit), with an exception for emergency treatment. Specifies that no individual shall be liable for payment for a health care item or service for which disclosure has not been substantially made in accordance with this title.