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S 2706

110th CONGRESS
2d Session

S. 2706

To impose a limitation on lifetime aggregate limits imposed by health plans.

IN THE SENATE OF THE UNITED STATES

March 5, 2008

Mr. DORGAN introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions


A BILL

To impose a limitation on lifetime aggregate limits imposed by health plans.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the `Health Insurance Coverage Protection Act'.

SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.

    (a) In General- Subpart B of part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185 et seq.) is amended by adding at the end the following:

`SEC. 714. LIMITATION ON LIFETIME AGGREGATE LIMITS.

    `(a) In General- A group health plan and a health insurance issuer providing health insurance coverage in connection with a group health plan, may not impose an aggregate dollar lifetime limit of less than--

      `(1) with respect to the first 2 plan years after the effective date of this section, $5,000,000;

      `(2) with respect to the third and fourth plan years after such date, $10,000,000; and

      `(3) with respect to each subsequent year, the amount for the previous year adjusted by the percentage increase in the consumer price index (for all urban consumers) for such year;

    with respect to benefits payable under the plan or coverage.

    `(b) Small Employers-

      `(1) IN GENERAL- Subsection (a) shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) offered to or maintained for employees of a small employer, except that upon the request of such a small employer, the plan involved shall provide for the application of an aggregate dollar lifetime limit that is consistent with the limit required under such subsection.

      `(2) SMALL EMPLOYER- For purposes of paragraph (1), the term `small employer' means an employer who normally employed fewer than 20 employees on a typical business day during the preceding calendar year and who employs fewer than 20 employees on the first day of the plan year.

      `(3) APPLICATION OF CERTAIN RULES IN DETERMINATION OF EMPLOYER SIZE- For purposes of this subsection--

        `(A) APPLICATION OF AGGREGATION RULE FOR EMPLOYERS- Rules similar to the rules under subsections (b), (c), (m), and (o) of section 414 of the Internal Revenue Code of 1986 shall apply for purposes of treating persons as a single employer.

        `(B) EMPLOYERS NOT IN EXISTENCE IN PRECEDING YEAR- In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small employer shall be based on the number of employees that it is reasonably expected such employer will normally employ on a typical business day in the current calendar year.

        `(C) PREDECESSORS- Any reference in this subsection to an employer shall include a reference to any predecessor of such employer.

    `(c) Definition- In this section, the term `aggregate dollar lifetime limit' means, with respect to benefits under a group health plan or health insurance coverage, a dollar limitation on the total amount that may be paid with respect to such benefits under the plan or health insurance coverage with respect to an individual or other coverage unit.'.

    (b) Clerical Amendment- The table of contents in section 1 of such Act, is amended by inserting after the item relating to section 713 the following new item:

      `Sec. 714. Limitation on lifetime aggregate limits'.

    (c) Effective Date- The amendments made by this section shall apply with respect to plan years beginning on or after the date that is 1 year after the date of enactment of this Act.

SEC. 3. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE GROUP MARKET.

    (a) In General- Subpart 2 of part A of title XXVII of the Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is amended by adding at the end the following:

`SEC. 2707. LIMITATION ON LIFETIME AGGREGATE LIMITS.

    `(a) In General- A group health plan and a health insurance issuer providing health insurance coverage in connection with a group health plan, may not impose an aggregate dollar lifetime limit of less than--

      `(1) with respect to the first 2 plan years after the effective date of this section, $5,000,000;

      `(2) with respect to the third and fourth plan years after such date, $10,000,000; and

      `(3) with respect to each subsequent year, the amount for the previous year adjusted by the percentage increase in the consumer price index (for all urban consumers) for such year;

    with respect to benefits payable under the plan or coverage.

    `(b) Small Employers-

      `(1) IN GENERAL- Subsection (a) shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) offered to or maintained for employees of a small employer, except that upon the request of such a small employer, the plan involved shall provide for the application of an aggregate dollar lifetime limit that is consistent with the limit required under such subsection.

      `(2) SMALL EMPLOYER- For purposes of paragraph (1), the term `small employer' means an employer who normally employed fewer than 20 employees on a typical business day during the preceding calendar year and who employs fewer than 20 employees on the first day of the plan year.

      `(3) APPLICATION OF CERTAIN RULES IN DETERMINATION OF EMPLOYER SIZE- For purposes of this subsection--

        `(A) APPLICATION OF AGGREGATION RULE FOR EMPLOYERS- Rules similar to the rules under subsections (b), (c), (m), and (o) of section 414 of the Internal Revenue Code of 1986 shall apply for purposes of treating persons as a single employer.

        `(B) EMPLOYERS NOT IN EXISTENCE IN PRECEDING YEAR- In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small employer shall be based on the number of employees that it is reasonably expected such employer will normally employ on a typical business day in the current calendar year.

        `(C) PREDECESSORS- Any reference in this subsection to an employer shall include a reference to any predecessor of such employer.

    `(c) Definition- In this section, the term `aggregate dollar lifetime limit' means, with respect to benefits under a group health plan or health insurance coverage, a dollar limitation on the total amount that may be paid with respect to such benefits under the plan or health insurance coverage with respect to an individual or other coverage unit.'.

    (b) Effective Date- The amendment made by this section shall apply with respect to plan years beginning on or after the date that is 1 year after the date of enactment of this Act.

SEC. 4. STUDY BY THE INSTITUTE OF MEDICINE.

    The Secretary of Health and Human Services shall enter into a contract with the Institute of Medicine for the conduct of a study to determine the number of individuals who have reached the lifetime limitations set forth in the amendments made by this Act beginning in the third plan year for which such amendments apply. Not later than 1 year after the date on which the study is conducted under the previous sentence, the Institute of Medicine shall submit to the Secretary and the appropriate committees of Congress a report concerning the results of the study.

END