Portability of Health Insurance bill

TABLE OF CONTENTS:

Title I: Health Care Access, Portability, and Renewability

Subtitle A: Group Market Rules

Subtitle B: Individual Market Rules

Subtitle C: General and Miscellaneous Provisions

Title II: Preventing Health Care Fraud and Abuse;

Administrative Simplification; Medical Liability Reform

Subtitle A: Fraud and Abuse Control Program

Subtitle B: Revisions to Current Sanctions for Fraud

and Abuse

Subtitle C: Data Collection

Subtitle D: Civil Monetary Penalties

Subtitle E: Revisions to Criminal Law

Subtitle F: Administrative Simplification

Subtitle G: Duplication and Coordination of

Medicare-Related Plans

Subtitle H: Patent Extension

Title III: Tax-Related Health Provisions

Subtitle A: Medical Savings Accounts

Subtitle B: Increase in Deduction for Health Insurance

Costs of Self-Employed Individuals

Subtitle C: Long-Term Care Services and Contracts

Subtitle D: Treatment of Accelerated Death Benefits

Subtitle E: State Insurance Pools

Subtitle F: Organizations Subject to Section 833

Subtitle G: IRA Distributions to the Unemployed

Subtitle H: Organ and Tissue Donation Information

Included with Income Tax Refund Payments

Title IV: Application and Enforcement of Group Health Plan

Requirements

Subtitle A: Application and Enforcement of Group Health

Plan Requirements

Subtitle B: Clarification of Certain Continuation

Coverage Requirements

Title V: Revenue Offsets

Subtitle A: Company-Owned Life Insurance

Subtitle B: Treatment of Individuals Who Lose United

States Citizenship

Subtitle C: Repeal of Financial Institution Transition

Rule to Interest Allocation Rules

Health Insurance Portability and Accountability Act of 1996 - Title I: Health Care Access, Portability, and Renewability - Subtitle A: Group Market Rules - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to add group health plan portability, access, and renewability requirements.

(Sec. 101) Provides for increased portability through limitation on preexisting condition exclusions. Limits the preexisting condition exclusion period. Sets forth rules relating to crediting for periods of previous coverage. Makes preexisting condition exclusions inapplicable to certain newborns, adopted children, and pregnancy. Requires special enrollment periods for certain individuals losing other coverage and for dependent beneficiaries. Allows group health plans that offer health maintenance organization (HMO) coverage to provide for an affiliation period with respect to such coverage only if there is no previous condition exclusion and if such affiliation is applied uniformly and for a specified limited period.

Prohibits discrimination against individual participants and beneficiaries based on health status, both in eligibility to enroll and in premium contributions.

Provides for guaranteed renewability in group health plans which are multiemployer plans or multiple employer welfare arrangements (MEWAs).

Sets forth provisions relating to preemption, State flexibility, and rules of construction. Provides for continued applicability of State law with respect to health insurance issuers (and continued preemption with respect to group health plans under other specified ERISA provisions). Sets forth special rules in case of portability requirements.

Sets forth special rules relating to group health plans, including: (1) a general exception for certain small group health plans which have less than two participants who are current employees; (2) an exception for certain benefits; (3) an exception for certain other benefits if certain conditions are met; and (4) treatment of certain partnerships as group health plans.

Sets forth definitions and provisions relating to regulations and enforcement of this Act and other ERISA provisions.

(Sec. 102) Amends the Public Health Service Act to create a new title on assuring portability, availability, and renewability of health insurance coverage.

Limits preexisting condition exclusion periods and mandates crediting periods of previous coverage.

Prohibits a group health plan and an insurance issuer offering coverage in connection with a group plan from discriminating based on health status, genetic information, and other specified factors.

Requires: (1) each issuer offering coverage in the small group market to accept every applying small employer and individual; (2) reports on large employer health insurance access; (3) issuers in the small or large group market to renew or continue the coverage at the option of the plan sponsor, except for premium nonpayment, fraud, and other factors; and (4) certain disclosures to small employers.

Excludes certain plans from the above requirements of this Act.

Provides for State and Federal enforcement.

Subtitle B: Individual Market Rules - Prohibits each issuer offering individual market health coverage from declining to offer or denying enrollment to any eligible individual or imposing a preexisting condition exclusion.

Requires an issuer providing coverage to an individual to renew or continue coverage at the option of the individual, except for premium nonpayment, fraud, or other factors.

Applies to issuers in the individual market the provisions of this Act regarding crediting periods of previous coverage.

Declares that provisions of this subtitle prohibiting declining to offer or denying enrollment to eligible individuals do not apply in a State with an alternative mechanism meeting specified requirements.

Provides for State enforcement and fall back Federal enforcement.

Subtitle C: General and Miscellaneous Provisions - Mandates studies and reports to appropriate congressional committees on: (1) the effectiveness of the provisions of this title and State laws in ensuring the availability of group and individual health coverage; and (2) patient access to and choice of providers inside and outside of networks, the cost and cost-effectiveness to issuers of out-of-network access, and the impact on cost and quality of providing that access. Requires the Health Care Financing Administration to complete its study of Medicare (title XVIII of the Social Security Act) reimbursement of all telemedicine services and report to the Congress.

Allows a health maintenance organization (HMO) to offer a high- deductible health plan.

Deems a free clinic health professional to be a Public Health Service employee for purposes of provisions relating to proceedings against commissioned officers or employees for damages resulting from the provision of health services.

Title II: Preventing Health Care Fraud and Abuse; Administrative Simplification (sic) - Subtitle A: Fraud and Abuse Control Program - Amends title XI of the Social Security Act (SSA) to require the Secretary of Health and Human Services (HHS), acting through HHS' Office of Inspector General (IG), and the Attorney General to establish a program to: (1) coordinate Federal, State, and local law enforcement programs to control health care fraud and abuse; (2) conduct investigations, audits, and inspections relating to the delivery of and payment for health care; (3) facilitate enforcement of certain provisions of title XI and other Acts applicable to health care fraud and abuse; (4) provide for the modification and establishment of safe harbors and to issue advisory opinions and special fraud alerts; and (5) provide for the reporting and disclosure of certain final adverse actions against health care providers, suppliers, or practitioners pursuant to the data collection system established below.

(Sec. 201) Establishes the Health Care Fraud and Abuse Control Account (Account) in Medicare's Federal Hospital Insurance Trust Fund (Trust Fund) to hold the criminal fines and civil monetary penalties and assessments obtained from Federal health care cases, as well as property forfeiture proceeds resulting from such cases, and other specified amounts for financing the program above and the Medicare Integrity Program established by this title. Makes certain appropriations to the Trust Fund and Account, earmarking certain amounts for activities of HHS' IG with respect to the Medicare and Medicaid programs under SSA titles XVIII and XIX. Requires the HHS Secretary and the Attorney General to jointly submit a report to the Congress with regard to Trust Fund appropriations. Directs the Comptroller General to submit a similar report to the Congress analyzing Trust Fund operations.

(Sec. 202) Establishes the Medicare Integrity Program under which the HHS Secretary shall promote the integrity of the Medicare program by entering into contracts with certain eligible private entities to: (1) review the activities of Medicare service providers and audit cost reports to determine whether payment should not have been made; (2) educate service providers, beneficiaries, and other persons with respect to payment and benefit issues; and (3) develop and periodically update a list of items of durable medical equipment subject to prior authorization. Details the process for entering into contracts. Sets certain limitations on contractor liability.

Prohibits fiscal intermediaries under Medicare part A (Hospital Insurance) and carriers under Medicare part B (Supplementary Medical Insurance) from carrying out certain activities under Medicare to the extent the activity is carried out pursuant to a contract under the Medicare Integrity Program.

(Sec. 203) Directs the HHS Secretary to provide an explanation of Medicare benefits with respect to each furnished item or service for which payment may be made to an individual without regard to whether or not a deductible or coinsurance may be imposed.

Directs the HHS Secretary to establish a program for encouraging individuals to: (1) report information on fraud and abuse under Medicare or other Federal or State health care programs; and (2) submit suggestions on methods to improve the efficiency of the Medicare program. Provides for the payment to such individuals of a portion of: (1) any amounts collected due to any such reports; or (2) any savings resulting from any such suggestions which are adopted.

(Sec. 204) Amends SSA title XI to require application of criminal penalties for acts involving the Medicare program to similar violations of any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the Federal Government, except the Federal Employees' Health Benefits Program (Federal care health programs).

(Sec. 205) Directs the HHS Secretary to periodically publish a notice in the Federal Register soliciting proposals for: (1) modifications to existing safe harbors issued under the Medicare and Medicaid Patient and Program Protection Act of 1987; (2) additional safe harbors specifying payment practices that shall not be treated as a criminal offense or serve as the basis for an exclusion; (3) advisory opinions by the HHS IG with regard to, among other matters, prohibited remuneration constituting grounds for the imposition of a sanction; and (4) special fraud alerts by the HHS IG, upon request, with regard to suspect practices under the Medicare program or a State health care program. Requires the Secretary to issue appropriate implementing regulations.

Subtitle B: Revisions to Current Sanctions for Fraud and Abuse - Excludes from participation in Medicare and State health care programs any individual or entity convicted after the enactment of this Act of a felony related to: (1) fraud in connection with the delivery of a health care item or service; or (2) a controlled substance.

(Sec. 212) Revises specified current sanctions involving exclusion for fraud and abuse under Medicare and State health care programs, among other changes establishing minimum periods of exclusion for: (1) certain individuals and entities subject to permissive exclusion from Medicare and State health care programs; and (2) practitioners and persons failing to meet certain statutory obligations with regard to services or items.

(Sec. 213) Authorizes the permissive exclusion of individuals with a direct or indirect ownership or control interest in certain sanctioned entities.

(Sec. 214) Repeals the prerequisite that a health care practitioner or person be determined "unwilling or unable" to comply substantially with a corrective action plan before sanctions may be imposed (thus permitting the Secretary to exclude such practitioner or person from eligibility to provide services for failure to comply with a corrective action plan, regardless of circumstances).

(Sec. 215) Permits the imposition of intermediate sanctions on Medicare health maintenance organizations in addition to the current option of termination. Provides additional intermediate sanctions for miscellaneous program violations.

(Sec. 216) Provides an additional specified exception to anti-kickback penalties for risk-sharing arrangements.

(Sec. 217) Creates a criminal penalty under SSA title XI for fraudulent disposition of assets in order to obtain Medicaid benefits.

Subtitle C: Data Collection - Directs the HHS Secretary to establish a national health care fraud and abuse data collection program for reporting final adverse actions against health care providers, suppliers, or practitioners and maintain a database of such information. Requires each Government agency and health plan to report to the Secretary any final adverse action taken against such provider, supplier, or practitioner.

(Sec. 221) Allows the HHS Secretary to establish reasonable fees for disclosure of information in the database.

Subtitle D: Civil Monetary Penalties - Revises civil monetary penalties, providing among other changes for: (1) the exclusion from participation in Federal and State health care programs of persons subject to penalties and assessments for applicable program violations; (2) modifications in the amounts of various specified penalties and assessments, including the sanctions against health care practitioners who violate their statutory obligations with regard to the services or items ordered or provided by them to a covered beneficiary or recipient; (3) a prohibition against offering inducements to individuals enrolled under Medicare or a State health care program; (4) subjecting to civil money penalties certain excluded individuals retaining an ownership or controlling interest in a participating entity if they knew or should have known of the action constituting the basis for the exclusion of such entity at the time of violation; (5) a specific definition, for such penalty purposes, of remuneration which includes the waiver of coinsurance and deductible amounts and transfers of items or services for free or for other than fair market value; and (6) a penalty for false certification for home health services.

Subtitle E: Revisions to Criminal Law - Amends the Federal criminal code to set penalties for the commission of health care fraud, theft or embezzlement in connection with health care, false statements relating to health care matters, obstruction of criminal investigations of Federal health care offenses, and laundering of monetary instruments in connection with a Federal health care offense.

(Sec. 247) Provides for injunctive relief relating to covered Federal health care offenses, as well as for property forfeitures.

(Sec. 248) Establishes investigative demand procedures, including limits on the disclosure of health information about an individual in any administrative, civil, or criminal action or investigation.

Subtitle F: Administrative Simplification - Amends SSA title XI to add a new part C (Administrative Simplification) for development of an electronic system for: (1) processing health care information consistent with the goal of improving the operation of the overall health care system; and (2) reducing related administrative costs through the HHS Secretary's adoption of certain standards for information transactions (including enrollment, disenrollment, claims attachments, and referral certification and authorization) and data elements for such transactions, as well as standards relating to security and performance of specified tasks. Requires the Secretary, in adopting such standards, to rely on recommendations of the National Committee on Vital and Health Statistics.

(Sec. 261) Provides penalties for violations of this subtitle, including wrongful disclosure of individually identifiable health information.

(Sec. 263) Amends the Public Health Service Act to provide for a change in the membership and duties of the National Committee on Vital and Health Statistics, including responsibility for advising the HHS Secretary and the Congress on the implementation of the administrative simplification requirements of this subtitle.

(Sec. 264) Directs the HHS Secretary to submit to specified congressional committees detailed recommendations on standards with respect to the privacy of individually identifiable health information.

Subtitle G: Duplication and Coordination of Medicare-Related Plans - Declares that certain health insurance policies (other than Medicare supplemental policies) are not considered to duplicate benefits under Medicare, Medicaid, or other health insurance policies, if they: (1) provide health care benefits only for long-term care, nursing home care, home health care, or community-based care, or any combination thereof; (2) coordinate against or exclude items and services available or paid for under Medicare or another health insurance policy; and (3) disclose such coordination or exclusion, in policies sold or issued on or after a specified date, in the policy's outline of coverage.

Subtitle H: Patent Extension - Extends for two years beginning February 28, 1997, the active agent patent (and prohibition of infringement) for any owner of the right to market a nonsteroidal anti-inflammatory drug that: (1) contains a patented active agent; (2) has been reviewed by the Food and Drug Administration (FDA) for more than 96 months as a new drug application; and (3) was approved as safe and effective by the FDA on January 31, 1991.

(Sec. 281) Requires such an owner, as a condition of eligibility for such entitlement, to: (1) pay $10 million per year to the HHS Secretary in FY 1997 and 1998; and (2) enter into a legally binding agreement with the HHS Secretary to provide a means for ensuring that such entitlement shall not create any net costs to the States under Medicaid.

Title III: Tax-Related Health Provisions - Subtitle A: Medical Savings Accounts - Amends the Internal Revenue Code to allow a deduction for limited amounts paid to a medical savings account (MSA). Defines "medical savings account" as a trust for paying the account holder's medical expenses. Exempts an MSA from taxation unless it has ceased being an MSA. Provides for the treatment of distributions. Allows the MSA deduction to be taken whether or not the individual itemizes deductions. Excludes limited employer MSA contributions from employee gross income. Excludes employer MSA contributions from provisions relating to social security, railroad retirement, unemployment, and withholding taxes. Makes MSA contributions unavailable under cafeteria plans. Excludes MSAs from the value of taxable estates. Imposes a tax on excess MSA contributions. Exempts an MSA holder from prohibited transaction taxes if the MSA ceases to be an MSA. Imposes a penalty on MSA reporting failures. Exempts MSAs from the definition of "specified insurance contract" for provisions relating to capitalization of certain policy acquisition expenses. Mandates a study of the effects of MSAs in the small group market.

Subtitle B: Increase in Deduction for Health Insurance Costs of Self-Employed Individuals - Increases the deduction for medical insurance expenditures by self-employed individuals.

Subtitle C: Long-Term Care Services and Contracts - Part I: General Provisions - Requires treating: (1) a long-term care insurance contract as accident and health insurance and associated amounts received as amounts received for personal injuries and sickness and as reimbursement for medical care expenses actually incurred; (2) an employer's plan providing long-term care as an accident and health plan; (3) limited amounts paid for such insurance as payments for medical care; and (4) such insurance as guaranteed renewable under specified provisions. Provides for the treatment of: (1) excess aggregate long-term care payments; and (2) long-term care coverage provided in conjunction with life insurance. Excludes long-term care from cafeteria plans. Includes in an employee's gross income employer-provided long-term care coverage provided through a flexible spending arrangement. Declares, under Internal Revenue Code (IRC), Employee Retirement Income Security Act of 1974, and Public Health Service Act provisions, that the term group health plan does not include any plan substantially all of the coverage under which is for qualified long-term care services. Mandates a study on the marketing and other effects of per diem limits on certain types of long-term care policies.

(Sec. 322) Amends the definition of "medical care" (for provisions allowing a deduction for medical care expenses) to include qualified long-term care services.

(Sec. 323) Imposes reporting requirements on long-term care benefit payors.

Part II: Consumer Protection Provisions - Sets forth provisions regarding: (1) the model regulation and model Act promulgated by the National Association of Insurance Commissioners; and (2) certain disclosure and nonforfeitability requirements.

(Sec. 326) Imposes a tax the failure to meet requirements regarding: (1) the model regulation and model Act; (2) contract or certificate delivery; and (3) claims denials information.

Subtitle D: Treatment of Accelerated Death Benefits - Treats life insurance amounts paid as amounts paid because of death if the insured is terminally or chronically ill. Treats the amount paid by a viatical settlement provider for a life insurance contract as an amount paid by reason of the death of the insured.

(Sec. 332) Treats, for life insurance company provisions, references to life insurance contracts as including references to accelerated death benefit riders (unless a rider is treated as a long-term care contract).

Subtitle E: State Insurance Pools - Exempts from taxation certain State-established membership organizations established exclusively to provide: (1) nonprofit medical care coverage to high risk individuals; or (2) to reimburse members for losses arising under workmen's compensation acts.

Subtitle F: Organizations Subject to Section 833 - Allows (for provisions affording a special deduction) an organization that is not a blue cross or blue shield (BCBS) organization to be treated as if it were a BCBS organization if it is not for profit and meets other requirements.

Subtitle G: IRA Distributions to the Unemployed - Permits penalty-free distributions from IRA accounts to pay health insurance premiums for certain unemployed individuals.

Subtitle H: Organ and Tissue Donation Information Included With Income Tax Refund Payments - Directs the Secretary of the Treasury, to the extent practicable, to include certain organ and tissue donation information with income tax refund payments.

Title IV: Application and Enforcement of Group Health Plan Requirements - Subtitle A: Application and Enforcement of Group Health Plan Requirements - Adds to the end of the IRC a new subtitle, Subtitle K - Group Health Plan Portability, Access, and Renewability Requirements. Permits a group health plan to impose a preexisting condition exclusion only if: (1) the exclusion relates to a condition for which medical advice, diagnosis, care, or treatment was recommended or received within the six-month period ending on the date of enrollment; (2) the exclusion extends for no more than twelve months (18 months for a late enrollee); and (3) such exclusion period is reduced by the length of the aggregate of the periods of creditable coverage applicable to the enrollee as of the enrollment date.

Prohibits a group health plan from refusing to enroll, subject to exceptions, an individual because of the individual's: (1) health status; (2) medical condition; (3) claims experience; (4) receipt of health care; (5) medical history; (6) genetic information; (7) evidence of insurability; or (8) disability.

Provides for guaranteed renewability in multiemployer plans and certain multiple employer welfare arrangements, subject to certain exceptions, including: (1) nonpayment of premiums; (2) fraud; or (3) the plan ceases to cover a geographic area.

Sets forth provisions concerning: (1) exceptions for certain plans (includes government plans within the exceptions) and benefits; (2) definitions; (3) promulgation of regulations; and (4) penalties for failure to meet certain group health plan requirements.

Subtitle B: Clarification of Certain Continuation Coverage Requirements - Amends the Public Health Service Act, the Employee Retirement Income Security Act of 1974, and the IRC to modify continuation coverage requirements.

Title V: Revenue Offsets - Subtitle A: Company-Owned Life Insurance - Revises provisions prohibiting a deduction for interest on loans with respect to company-owned life insurance, including a revision which prohibits a deduction for interest on loans with respect to company-owned endowment or annuity contracts.

Subtitle B: Treatment of Individuals Who Lose United States Citizenship - Revises provisions concerning expatriation to avoid taxes, including the following changes: (1) applies the provisions to certain long-term residents; (2) permits the Secretary to expand the ten-year taxation period to fifteen years; (3) increases the categories of income treated as U.S. source income; (4) giving credit for foreign taxes imposed on U.S. source income; and (5) requiring the filing of certain information by expatriates. Revises the comparable estate and gift tax provisions.

Subtitle C: Repeal of Financial Institution Transition Rule to Interest Allocation Rules - Amends the Tax Reform Act of 1986 to repeal a provision concerning the allocation and apportionment of interest expense, by financial institutions that are members of an affiliated group, between U.S. and foreign source income.