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Insurers marketing to small employers would be required to offer at least a minimum benefit plan and would be required to guarantee that all small employers could purchase the minimum benefit plan. Such plans would be exempt from State benefit mandates. Underwriting criteria would be limited as well as exclusions for pre-existing conditions. Insurers which were not in compliance with the standards would be subject to a penalty.
H.R. 3626, introduced by Chairman Rostenkowski, would prohibit any group insurance plan from discriminating on the basis on health status or medical history. Exclusions for preexisting conditions would be limited to six months. In addition, an individual with a pre-existing condition who changed jobs without experiencing a lapse in coverage of more than three months would generally be protected from any pre-existing condition exclusion.
Insurers selling coverage to small groups (2 to 50 employees) would be required to offer adjusted, community-rated policies on a continuous open-enrollment basis. Insurers could vary premiums for the age and sex of the group members, except that the variation could not exceed 67 percent. Rate variation would not be allowed within a Metropolitan Statistical Area. Medical underwriting would not be allowed. Small group insurers would be required to offer a minimum benefit plan. Insurers which did not meet the standards would be subject to an excise
Under H.R. 3626, small employers would be prohibited from self-insuring under the provisions of the Employee Retirement Income Security Act.
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Those who wish to file a written statement for the printed record of the hearing should submit six (6) copies by the close of business on Thursday, March 26, 1992, to Robert J. Leonard, chief Counsel and Staff Director, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House office Building, Washington, D.C. 20515. An additional supply of statements may be furnished for distribution to the press and public it supplied to the Subcommittee office, 1114 Longworth House office Building, before the hearing begins.
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To amend the Internal Revenue Code of 1986 to impose an excise tax
on premiums received on health insurance policies which do not meet certain requirements.
IN THE HOUSE OF REPRESENTATIVES
APRIL 29, 1991 Mr. STARK introduced the following bill; which was referred to the Committee
on Ways and Means
To amend the Internal Revenue Code of 1986 to impose
an excise tax on premiums received on health insurance policies which do not meet certain requirements.
Be it enacted by the Senate and House of Representa
2 tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE.
This Act may be cited as the "Health Insurance Re
5 form Act of 1991”.
1 SEC. 2. EXCISE TAX ON PREMIUMS RECEIVED ON HEALTH
INSURANCE POLICIES WHICH DO NOT MEET
4 (a) IN GENERAL.- Chapter 47 of the Internal Reve5 nue Code of 1986 (relating to excise taxes on qualified
6 pension, etc. plans) is amended by adding at the end
7 thereof the following new subchapter: 8 "Subchapter B-Health Insurance Standards
"Sec. 5000A. Failure to satisfy standards for health insurance.
9 "SEC. 5000A. FAILURE TO SATISFY CERTAIN STANDARDS
FOR HEALTH INSURANCE.
“(a) GENERAL RULE.—In the case of any person is
12 suing applicable accident and health insurance contracts,
13 there is hereby imposed a tax on the failure of such person 14 to meet at any time during any taxable year15
“(1) the general issuance requirements of sec
19 The Secretary of Health and Human Services shall deter
20 mine whether any contract meets the requirements of such
"(1) IN GENERAL.—The amount of tax imposed
by subsection (a) by reason of 1 or more failures during a taxable year shall be equal to 100 percent of the gross premiums received during such taxable
year with respect to all accident and health insur
ance contracts issued by the person on whom such
tax is imposed.
“(2) GROSS PREMIUMS.—For purposes of para
graph (1), gross premiums shall include any consid
"(1) TAX NOT TO APPLY WHERE FAILURE NOT
GENCE.—No tax shall be imposed by subsection (a)
with respect to any failure for which it is established
to the satisfaction of the Secretary that the person
on whom the tax is imposed did not know, or exer
cising reasonable diligence would not have known,
that such failure existed.
“(2) TAX NOT TO APPLY WHERE FAILURES
CORRECTED WITHIN 30 DAYS.—No tax shall be im
posed by subsection (a) with respect to any failure
“(A) such failure was due to reasonable
cause and not to willful neglect, and
“(B) such failure is corrected during the 30-day period beginning on the 1st date any of
the persons on whom the tax is imposed knew,
or exercising reasonable diligence would have
known, that such failure existed.
“(3) WAIVER BY SECRETARY.—In the case of a
failure which is due to reasonable cause and not to
willful neglect, the Secretary may waive part or all
of the tax imposed by subsection (a).
“(d) LIABILITY FOR Tax.—The person issuing the
13 applicable accident and health contract with respect to
14 which a failure occurs shall be liable for the tax imposed
15 by subsection (a).
16 "SEC. 6000B. GENERAL ISSUANCE REQUIREMENTS.
“(a) GENERAL RULE.—The requirements of this sec
18 tion are met if a person meets
“(1) the mandatory policy requirements of sub
"(2) the guaranteed issue requirements of sub
“(b) MANDATORY POLICY REQUIREMENTS.
“(1) IN GENERAL.—The requirements of this subsection are met if any person issuing accident