Table Of Content

Public /House, /'I^G^rf^/ 1102thdCSeosnsgironess(1 HOUSEOFREPRESENTATIVES (fReptP.ar1t10:-870 HEALTHINSURANCESOURCEOFINJURYCLARIFICATION ACTOF2008 September23,2008.—CommittedtotheCommitteeoftheWholeHouseonthe StateoftheUnionandorderedtobeprinted Mr.DlNGELL,fromtheCommitteeonEnergyandCommerce, submittedthefollowing REPORT [ToaccompanyH.R.6908] [IncludingcostestimateoftheCongressionalBudgetOffice! TheCommitteeonEnergyandCommerce,towhomwasreferred thebill(H.R.6908)torequirethatlimitationsandrestrictionson coverage under group health plans be timely disclosedto group healthplansponsorsandtimelycommunicatedtoparticipantsand beneficiariesundersuchplansinaformthatiseasilyunderstand- able,havingconsideredthesame,reportfavorablythereonwithout amendmentandrecommendthatthebilldopass. CONTENTS PurposeandSummary Pag2e BackgroundandNeedforLegislation 2 Hearings 3 CommitteeConsideration 3 CommitteeVotes 3 CommitteeOversightFindings 3 NSteawteBmuedngtetofAGuetnheorriatly,PeErnftoirtmlaenmceentGoAuatlhsoraintdy,ObajnedctTivaexsExpenditures :3i EarmarksandTaxandTariffBenefits 3 CommitteeCostEstimate 4 CongressionalBudgetOfficeEstimate 4 FederalMandatesStatement 5 AdvisoryCommitteeStatement 5 ConstitutionalAuthorityStatement 5 ApplicabilitytoLegislativeBranch 5 SCehcatnigoen-sbyi-nSEexcitsitoinnAgnaLlaywsiMsaodfethbeyLtehgeisBliallt,ioansReported 65 69-006 2 PurposeandSummary ThepurposeofH.R.6908,theHealthInsuranceSourceofInjury ClarificationActof2008,istoimprovetransparencyinhealthin- surancebenefitrestrictionsandlimitations.H.R.6908amendsthe EmployeeRetirementIncomeSecurityActof1974(ERISA),Public HealthServiceAct(PHSA),andtheInternalRevenueCode(IRC) torequirethatanylimitationsonbenefitsofhealthinsurersbeex- plicitandclear;thattheybedisclosedtoplansponsorsinadvance ofthepointofsale;andthattheybedisclosedtoparticipantsand beneficiariesinamannerthatiseasilyunderstandableintheplan inadvanceofenrollmentandafterenrollment. BackgroundandNeedforLegislation InJanuary2001,theDepartmentofLabor(DOL),theInternal Revenue Service andtheHealth CareFinancingAdministration, issuedaruleinaccordancetotheHealthInsurancePortabilityand AccountabilityAct(HIPAA)of1996.Therulestatesthat"[w]hile apersoncannotbeexcludedfromaplanforengagingincertain recreationalactivities,benefitsforaparticularinjurycan,insome cases,beexcludedbasedonthesourceoftheinjury."1 Thisruleresultedinsituationswhereabeneficiarywasunaware thatinjuriesresultingfromcertainrecreationalactivitiescouldre- sultinnon-paymentfornecessarymedicalservices.Inmanysitua- tionstheexclusionswereunclearorverybroad. Thelackofclarityunderlyingcoverageofbenefitshascreateda confusing situation for individuals that may ride motorcycles, horses, snowmobiles, orparticipate in otherlegal activities that couldresultinaninjury.MillionsofAmericansenjoytheseactivi- tiessafelyeveryyearwithintheframeworkofStatelawsanduti- lizingpropersafetyprecautions.However,whereaninjuryresults from these activities, insurers should not discriminate in their treatmentofinjuredindividuals.Totheextentplanlimitationsor restrictions arepermitted, suchlimitationsorrestrictionsshould beexplicitandclearbeforeapersonenrollsinaplan. LEGISLATIVEANDEXECUTIVEHISTORY H.R. 1076,theHIPAARecreationalInjuryTechnicalCorrection Act,wasintroducedbyCongressmanMichaelBurgess(R-TX)and CongressmanBartStupak(D-MI)onFebruary15,2007,andcur- rentlyhas122cosponsors.TheSenatecompanion,S.616,wasin- troducedbySenatorSusanCollins(R-ME)onFebruary15,2007, andhas8cosponsors. As introduced, H.R. 1076 would have required plans to cover paymentformedicalservicesresultingfromparticipationofanin- dividualinalegalmodeoftransportationoralegalrecreationalac- tivity. Inresponsetoconcernsraisedduringdiscussionsonthisbill,the CommitteeworkedwithMr.BurgessandMr.Stupakonanalter- nativepolicy. Congressman Burgess and Stupak introduced new legislation, H.R.6908,thatwould: 1FederalRegister,Vol.66,No.5,Monday,January8,2001. 3 • Requireanylimitationsandrestrictionsonbenefitsbeex- plicitandclear; • Requirethattheybedisclosedtothesponsorofthegroup healthplaninadvanceofthepointofsaletothegrouphealth plan;and • Requirethattheissuerofthehealthinsurancecoverage makeavailabletoparticipants andbeneficiariesin aneasily understandablemanneradescriptionofthelimitationsandre- strictionspriortoandupontheirenrollment. Hearings NohearingswereheldinconnectionwithH.R.6908. CommitteeConsideration OnWednesday,September17,2008,thefullCommitteemetin openmarkupsessionandorderedH.R.6908favorablyreportedto theHouse,byavoicevote.Noamendmentswereofferedduring fullCommitteeconsiderationofthebill. CommitteeVotes Clause3(b)ofruleXIIIoftheRulesoftheHouseofRepresenta- tivesrequirestheCommitteetolisttherecordvotesonthemotion toreportlegislationandamendmentsthereto.Norecordvoteswere AtakmeontiionncobnyneMcrt.ioDninwgietlhlotrodeorridnegrHH..RR..66990088refpaovorrtaebdltyortehpeorHtoeudset.o theHousewasagreedtobyavoicevote. CommitteeOversightFindings Regardingclause3(c)(1)ofruleXIIIoftheRulesoftheHouse ofRepresentatives,theoversightfindingsoftheCommitteeregard- ingH.R.6908arereflectedinthisreport. StatementOfGeneralPerformanceGoalsAndObjectives TheobjectiveofH.R. 6908istoensurethatconsumersarein- formedofanylimitationsandrestrictionsontheirhealthinsurance coverage. NewBudgetAuthority,EntitlementAuthority,andTax Expenditures Regardingcompliancewithclause3(c)(2)ofruleXIIIoftheRules ofthe House ofRepresentatives, the Committee finds thatH.R. 6908wouldresultinnoneworincreasedbudgetauthority,entitlementauthority,ortaxexpendituresorrevenues. EarmarksandTaxandTariffBenefits Regardingcompliancewithclause9ofruleXXIoftheRulesof theHouseofRepresentatives,H.R.6908doesnotcontainanycon- gressionalearmarks,limitedtaxbenefits,orlimitedtariffbenefits asdefinedinclause9(d),9(e),or9(f)ofruleXXI. 4 CommitteeCostEstimate TheCommitteeadoptsasitsownthecostestimateonH.R.6908 preparedbytheDirectoroftheCongressionalBudgetOfficepursu- anttosection402oftheCongressionalBudgetActof1974. CongressionalBudgetOfficeEstimate Pursuanttoclause3(c)(3)ofruleXIIIoftheRulesoftheHouse ofRepresentatives,thefollowingisthecostestimateonH.R.6908 providedbytheCongressional BudgetOfficepursuantto section 402oftheCongressionalBudgetActof1974: U.S.Congress, CongressionalBudgetOffice, Washington,DC,September22,2008. Hon.JohnD.Dingell, Chairman,CommitteeonEnergyandCommerce, HouseofRepresentatives,Washington,DC. DearMr.Chairman:TheCongressionalBudgetOfficehaspre- paredtheenclosedcostestimateforH.R.6908,theHealthInsur- anceSourceofInjuryClarificationActof2008. toIpfryovoiudewitshhemf.urTthheerCdBeOtaisltsafofncotnhtiasctesitsiKmiartset,inwNeelwsiolln.bepleased Sincerely, RobertA.Sunshine (ForPeterR.Orszag,Director). Enclosure. — H.R. 6908 HealthInsuranceSourceofInjuryClarificationActof 2008 H.R. 6908,theHealthInsuranceSourceofInjuryClarification Actof2008,wouldrequirethatgrouphealthplansdisclosethelim- itationsandrestrictionsoncoverageinatimelymannertohealth plan sponsors and participants. The bill would amend the Em- ployee Retirement and Income Security Act of1974, the Public HealthServiceAct,andtheInternalRevenueCodetoreflectthis newrequirement.Thebillwouldrequirethathealthinsurancecov- teiramgeeoflismailteatoironesnraonldlmerenstt.riCctBiOonsesbteimeaxtpleiscitthaatndencalcetairngprHi.oRr.to69t0h8e wouldnotaffectthefederalbudget. H.R.6908wouldimposeaprivate-sectormandate,asdefinedin theUnfundedMandatesReformAct(UMRA),onissuersofgroup hpleaanlst.hCinBsOuraenscteimcaotveesratgheatantdhespaogngsroergsatoefgcorsotupofhecaolmtphlyiinnsgurwaintche tUahnMonsuReaAllmyfaonrfdoprartiienvfsaltaetw-iosoeunc)l.tdoCrnBmoOatnedesaxttcieemesadt(e$ts1h3et6hatmthirltelhsiehoondliidrnece2ts0t0cao8bs,ltiaosdfhjeutdshtebseyed requirementswouldbesmallbecauseissuersandsponsorsofgroup healthinsurance plans generally alreadymake suchinformation availableandalreadydiscloseplaninformationbeforeandafteren- rollment.Makingthatinformationmoreexplicitwouldnot,inand ofitself,becostly. UMHR.RA..69A0n8ecxoinsttaiinngsnprooviinstieorngoivnertnhmeentPaubllimcanHdeaatletshasSedrevfiicneedAcitn wouldallowstate,local,andtribalgovernments,asemployersthat 5 provide healthbenefitstotheiremployees, to optoutofthe re- quirementsofthisbill.Consequently,therequirementsinthebill thatwouldrequireplanstodisclosecoveragelimitsforinjuriesby sourcewouldnotbeanintergovernmentalmandateasdefinedin UMRA.Thebillwouldaffectthebudgetsofthosegovernmentsonly ifthey choose to comply with the requirements for their group healthplans. TheCBOstaffcontactsforthisestimateareKirstinNelson(for federalcosts);LisaRamirez-Branum(fortheimpactonstate,local, andtribalgovernments);andPatrickBernhardt(fortheprivate- sDeecptuotryimApsascits)t.anTthiDsireecsttoirmaftoerHweaasltahpparnodveHdubmyanKeSietrhviJc.esF,onBtuedngoett, AnalysisDivision. FederalMandatesStatement TheCommitteeadoptsasitsowntheestimateofFederalman- datesregardingH.R.6908preparedbytheDirectoroftheCongres- sionalBudgetOfficepursuanttosection423oftheUnfundedMan- datesReformAct. AdvisoryCommitteeStatement Noadvisorycommitteeswithinthemeaningofsection5(b)ofthe FederalAdvisoryCommitteeActwouldbecreatedbyH.R.6908. ConstitutionalAuthorityStatement Pursuanttoclause3(d)(1)ofruleXIIIoftheRulesoftheHouse ofRepresentatives,theCommitteefindsthattheConstitutionalau- thorityforH.R.6908isprovidedinArticleI,section8,clause3, whichgrantsCongressthepowertoregulatecommercewithfor- eignnations,amongtheseveralStates,andwiththeIndianTribes. ApplicabilitytoLegislattveBranch TheCommitteefindsthatH.R.6908doesnotrelatetotheterms andconditionsofemploymentoraccesstopublicservicesoraccom- modationswithinthemeaningofsection102(b)(3)oftheCongres- sionalAccountabilityActof1995. Section-by-SectionAnalysisoftheLegislation Section1.Shorttitle Section1establishestheshorttitleofH.R.6908astheHealth InsuranceSourceofInjuryClarificationActof2008. Section2.Disclosurerequirements Section2(a)amendstheEmployeeRetirementIncomeSecurity Actof1974. This provision is notwithin thejurisdiction ofthe Committee. Section2(b)amendsthePublicHealthServiceActrelatingtothe groupmarket.Itamendssection2702(relatingtoprohibitingdis- criminationagainstindividualparticipantsandbeneficiariesbased onhealthstatus)insubsection(a)(2)(B)toprovidethatparagraph (1)ofsubsection(a)shallnotbeconstruedtopreventaplanorcov- eragefromestablishinglimitationsorrestrictionsontheamount, —— — — 6 level,extent,ornatureofthebenefitsorcoverageforsimilarlysit- uatedindividualsenrolledintheplanorcoveragesolongas: • Suchlimitationsandrestrictionsareexplicitandclear; • Such limitations and restrictions have been disclosed to theplansponsorofthegrouphealthplaninadvanceofthe pointofsaletothegrouphealthplan; • The plan sponsor and issuer make available to partici- pantsandbeneficiariesinaneasilyunderstandablemannera descriptionofthelimitationsandrestrictionsinadvanceofthe pointoftheirenrollmentundertheplan;and • The plan sponsor and issuer make available to partici- pantsandbeneficiariesinaneasilyunderstandablemannera descriptionofthelimitationsandrestrictionsupontheirenroll- ment. Section2(c)amendstheInternalRevenueCodeof1986.Thispro- visionisnotwithinthejurisdictionoftheCommittee. Section2(d)makesthesechangesapplicablewithrespecttoplan yearsbeginning1yearafterthedateofenactment. ChangesinExistingLawMadebytheBill,asReported Incompliancewithclause3(e)ofruleXIIIoftheRulesofthe HouseofRepresentatives,changesinexistinglawmadebythebill, asreported,areshownasfollows(newmatterisprintedinitalic and existing law in which no change is proposed is shown in roman): ******* EMPLOYEERETIREMENTINCOMESECURITYACTOF 1974 ******* TITLEI—PROTECTIONOFEMPLOYEEBENEFITRIGHTS ******* SubtitleB RegulatoryProvisions *Part*7 Gr*oupHea*lthPl*anReq*uireme*nts SubpartA RequirementsRelatingtoPortability,Access, ANDRENEWABILITY SEC.702.PRTOIHCIIBPIATNITNSGADNIDSCBREINMEIFNIACTIIAORNIEASGABIANSSETDIONNDIHVEIADLUATLHPSATRA-- TUS. — (a)InEligibilityToEnroll. Q) * * * (2)NOAPPLICATIONTOBENEFITSOREXCLUSIONS.—Totheex- tentconsistent with section 701, paragraph (1) shall notbe construed (A) * * * (B)topreventsuchaplanorcoveragefromestablishing limitationsorrestrictionsontheamount,level,extent,or — — 7 natureofthebenefitsorcoverageforsimilarlysitua—tedin- dividualsenrolledintheplanorcoveragesolongas (i)suchlimitationsandrestrictionsareexplicitand clear; (ii)inthecaseofsuchlimitationsandrestrictionsin health insurance coverage offered in connection with thegrouphealthplan,suchlimitationsandrestrictions havebeendisclosedtotheplansponsorinadvanceof thepointofsaletotheplan; (Hi)theplansponsorandtheissuerofthehealthin- surancecoveragemakeavailable, toparticipantsand beneficiaries in theplan in advance ofthepoint of theirenrollmentundertheplan,adescriptionofsuch limitationsandrestrictionsinaformthatiseasilyun- derstandable by such participants and beneficiaries; and (iv)theplansponsorandtheissuerofthecoverage provide such description to participants and bene- ficiariesupontheirenrollmentundertheplan. PUBLICHEALTHSERVICEACT TITLEXXVII—REQUIREMENTSRELATINGTOHEALTH INSURANCECOVERAGE PartA GroupMarketReforms Subpart1—Portability,Access,andRenewabilityRequirements IPS Sp ?i? * -8p: * SEC.2702.PRTOIHCIIBPIANTTISNGADNIDSCBREINMEFIINCAITAIROINEASGBAAISNSETDIONNDIHVEIADLUTAHLPSATRA-- TUS. — (a)InEligibilityToEnroll. ((12))N*O*AP*PLICATIONTOBENEFITSOREXCLUSIONS.—Totheex- tentconsistentwith section 701, paragraph (1) shall notbe construed (A) * * * (B)topreventsuchaplanorcoveragefromestablishing limitationsorrestrictionsontheamount,level,extent,or natureofthebenefitsorcoverageforsimilarlysitua—tedin- dividualsenrolledintheplanorcoveragesolongas (i)suchlimitationsandrestrictionsareexplicitand clear; (ii)inthecaseofsuchlimitationsandrestrictionsin health insurance coverage offered in connection with thegrouphealthplan,suchlimitationsandrestrictions havebeendisclosedtotheplansponsorinadvanceof thepointofsaletotheplan; (Hi) theplan sponsorand the issuerofthegroup health insurancecoverage makeavailable, topartici- — 8 pantsandbeneficiariesintheplaninadvanceofthe pointoftheirenrollmentundertheplan,adescription ofsuchlimitationsandrestrictionsinaformthatis easilyunderstandablebysuchparticipantsandbene- ficiaries;and (iv)theplansponsorandtheissuerofthecoverage provides such description to participants and bene- ficiariesupontheirenrollmentundertheplan. INTERNALREVENUECODEOF1986 SubtitleK—GroupHealthPlan Requirements CHAPTER100—GROUPHEALTHPLAN REQUIREMENTS S*ubcha*pterA*—Re*quire*ments*Relat*ingto Portability,Access,andRenewability SEC.9802.PRTOIHCIIBPIANTTISNGADNIDSCBREINMEFIINCAITAIROINEASGBAIANSSETDIONNDIHVEIADLUTALHPSATRA-- TUS. — (a)InEligibilityToEnroll. Q(2))N*O*AP*PLICATIONTOBENEFITSOREXCLUSIONS.—Totheex- tentconsistentwithsection9801,paragraph(1)shallnotbe construed (A) * * * (B)topreventsuchaplanfromestablishinglimitations orrestrictionsontheamount,level,extent,ornatureof thebenefitsorcoverageforsimilarlysit—uatedindividuals enrolledintheplanorcoveragesolongas (i)suchlimitationsandrestrictionsareexplicitand clear; (ii)thegrouphealthplanmakesavailable,topartici- pantsandbeneficiariesintheplaninadvanceofthe pointoftheirenrollmentundertheplan,adescription ofsuchlimitationsandrestrictionsinaformthatis easilyunderstandablebysuchparticipantsandbene- ficiaries;and 9 (Hi) theplanprovides such description topartici- pants and beneficiaries upon theirenrollment under theplan. O CnSLIBRARY ACH5 00Dlb5B7