[Pages S11577-S11579]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

By Mr. DURBIN:
S. 3173. A bill to amend title 5, United States Code, to establish a
national health program administered by the Office of Personnel
Management to offer Federal employee health benefits plans to
individuals who are not Federal employees, and for other purposes; to
the Committee on Governmental Affairs.
Mr. DURBIN. Mr. President, today I am introducing legislation to make
available to all Americans the same range of private health insurance
plans available to Members of Congress and other Federal employees
through the Federal Employees Health Benefits Program, FEHBP.
Too many Americans do not have real insurance options. Many
individuals lack insurance because no insurer is willing to cover them
at a reasonable price. Others work for employers who do not provide
health insurance or offer only one insurance provider. This legislation
addresses these issues by giving individuals and businesses access to
the group purchasing power of FEHBP and the wide range of health plans
in that program.
The OPTION Act, Offering People True Insurance Options Nationwide,
would expand insurance options by allowing individuals to enroll in
private health insurance plans nearly identical to the plans available
to federal employees. Though the OPTION program would be separate from
the Federal employees program, it would be modeled after FEHBP and
would draw from FEHBP's strengths: plan choice, group purchasing
savings, comprehensive benefits, and open enrollment periods.
Under this legislation, all FEHBP health plans would be required to
offer an OPTION health plan to non-Federal employees with the same
range of benefits they offer Federal employees through FEHBP.
OPTION enrollees would be placed in a separate risk pool to prevent
any adverse effect on current FEHBP employees, annuitants, and their
families. The OPTION Act would not result in any changes to the
premiums or benefits of today's FEHBP health plans.
OPTION health plans would not be allowed to impose any preexisting
condition exclusions on new OPTION enrollees who have at least one year
of health insurance coverage immediately prior to enrollment in an
OPTION plan. To prevent people from waiting until they are sick to
enroll, health plans would be allowed to exclude coverage for
preexisting conditions for up to one year for people without coverage
immediately prior to enrollment.
One of the few differences from FEHBP is that OPTION plans would be
allowed to vary premiums by age so that younger enrollees would be more
likely to enroll. OPTION plans also would be required to offer rebates
or lower premiums to encourage and reward longevity of health coverage.
These provisions would act as an incentive for people to sign up when
they are young and to maintain continuous coverage.
Along with making FEHBP available in the individual market, the
OPTION program will allow businesses to tap into the type of group
buying power in the federal employees program if they voluntarily
choose to participate. To be eligible, a business would have to be
willing to pay at least a minimum percentage of premiums, varying from
40 percent to 60 percent depending on the size of the business.
Employers would also be offered an incentive to begin enrolling their
employees by allowing them to pay as little as 20 percent of the
premium for the first year. This innovative employer option would
encourage employer health coverage rather than shifting coverage away
from the private sector. I want to emphasize that employer
participation would be entirely voluntary.
Under the OPTION Act, premiums would not be government-subsidized.
Instead, enrollees and those employers who choose to participate would
be responsible for the cost of the premiums.
The OPTION program would be administered by the Office of Personnel
Management, OPM, which administers the FEHBP program, and would
generally follow the rules for FEHBP. OPM has developed considerable
expertise in negotiating and working with health plans and has shown
that it can run a health program well at a minimal cost. We can build
on OPM's expertise to extend the same health insurance options to all
Americans.
Finally, once it is up and running, this program would pay for
itself. Administrative costs would be covered from a portion of the
OPTION premiums. Those who benefit from the program would pay for its
overhead costs.
This legislation could open the door for many Americans to obtain
good health insurance coverage. Health insurance premiums in today's
market can be especially high, both for individuals and for small
businesses buying insurance on their own. This legislation will reduce
the cost of insurance, and as a result will help to reduce the number
of uninsured Americans. It will also expand insurance options. I
encourage my colleagues to support this very important legislation.

[[Page S11578]]

I ask unanimous consent that the text of the legislation be printed
in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 3173

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 ``Offering People True
Insurance Options Nationwide Act of 2002''.

SEC. 2. OPTION HEALTH INSURANCE.

Subpart G of part III of title 5, United States Code, is
amended by adding at the end the following:

``CHAPTER 90A--HEALTH INSURANCE FOR NON-FEDERAL EMPLOYEES

``Sec.
``9051. Definitions.
``9052. Health insurance for non-Federal employees.
``9053. Contract requirement.
``9054. Eligibility.
``9055. Alternative conditions to Federal employee plans.
``9056. Coordination with social security benefits.
``9057. Non-Federal employer participation.

``Sec. 9051. Definitions

``In this chapter--
``(1) the terms defined under section 8901 shall have the
meanings given such terms under that section; and
``(2) the term `Office' means the Office of Personnel
Management.

``Sec. 9052. Health insurance for non-Federal employees

``(a) The Office of Personnel Management shall administer a
health insurance program for non-Federal employees in
accordance with this chapter.
``(b) Except as provided under this chapter, the Office
shall prescribe regulations to apply the provisions of
chapter 89 to the greatest extent practicable to eligible
individuals covered under this chapter.
``(c) In no event shall the enactment of this chapter
result in--
``(1) any increase in the level of individual or Government
contributions required under chapter 89, including copayments
or deductibles;
``(2) any decrease in the types of benefits offered under
chapter 89; or
``(3) any other change that would adversely affect the
coverage afforded under chapter 89 to employees and
annuitants and members of family under that chapter.
``(d) The Office shall develop methods to facilitate
enrollment under this chapter, including the use of the
Internet.
``(e) The Office may enter into contracts for the
performance of appropriate administrative functions under
this chapter.

``Sec. 9053. Contract requirement

``(a) Each contract entered into under section 8902 shall
require a carrier to offer to eligible individuals under this
chapter, throughout each term for which the contract remains
effective, the same benefits (subject to the same maximums,
limitations, exclusions, and other similar terms or
conditions) as would be offered under such contract or
applicable health benefits plan to employees, annuitants, and
members of family.
``(b)(1) The Office may waive the requirements of this
section, if the Office determines, based on a petition
submitted by a carrier that--
``(A) the carrier is unable to offer the applicable health
benefits plan because of a limitation in the capacity of the
plan to deliver services or assure financial solvency;
``(B) the applicable health benefits plan is not sponsored
by a carrier licensed under applicable State law; or
``(C) bona fide enrollment restrictions make the
application of this chapter inappropriate, including
restrictions common to plans which are limited to individuals
having a past or current employment relationship with a
particular agency or other authority of the Government.
``(2) The Office may require a petition under this
subsection to include--
``(A) a description of the efforts the carrier proposes to
take in order to offer the applicable health benefits plan
under this chapter; and
``(B) the proposed date for offering such a health benefits
plan.
``(3) A waiver under this subsection may be for any period
determined by the Office. The Office may grant subsequent
waivers under this section.

``Sec. 9054. Eligibility

``An individual shall be eligible to enroll in a plan under
this chapter, unless the individual is enrolled or eligible
to enroll in a plan under chapter 89.

``Sec. 9055. Alternative conditions to Federal employee plans

``(a) For purposes of enrollment in a health benefits plan
under this chapter, an individual who had coverage under a
health insurance plan and is not a qualified beneficiary as
defined under section 4980B(g)(1) of the Internal Revenue
Code of 1986 shall be treated in a similar manner as an
individual who begins employment as an employee under chapter
89.
``(b) In the administration of this chapter, covered
individuals under this chapter shall be in a risk pool
separate from covered individuals under chapter 89.
``(c)(1) Each contract under this chapter may include a
preexisting condition exclusion as defined under section
9801(b)(1) of the Internal Revenue Code of 1986.
``(2)(A) The preexisting condition exclusion under this
subsection shall provide for coverage of a preexisting
condition to begin not more than 1 year after the date of
coverage of an individual under a health benefits plan,
reduced by 1 month for each month that individual was covered
under a health insurance plan immediately preceding the date
the individual submitted an application for coverage under
this chapter.
``(B) For purposes of this paragraph, a lapse in coverage
of not more than 63 days immediately preceding the date of
the submission of an application for coverage shall not be
considered a lapse in continuous coverage.
``(d)(1) Rates charged and premiums paid for a health
benefits plan under this chapter--
``(A) may be adjusted and differ from such rates charged
and premiums paid for the same health benefits plan offered
under chapter 89;
``(B) shall be negotiated in the same manner as negotiated
under chapter 89; and
``(C) shall be adjusted to cover the administrative costs
of this chapter.
``(2) In determining rates and premiums under this
chapter--
``(A) the age of covered individuals may be considered; and
``(B) rebates or lower rates and premiums shall be set to
encourage longevity of coverage.
``(e) No Government contribution shall be made for any
covered individual under this chapter.
``(f) If an individual who is enrolled in a health benefits
plan under this chapter terminates the enrollment, the
individual shall not be eligible for reenrollment until the
first open enrollment period following 6 months after the
date of such termination.

``Sec. 9056. Coordination with social security benefits

``Benefits under this chapter shall, with respect to an
individual who is entitled to benefits under part A of title
XVIII of the Social Security Act, be offered (for use in
coordination with those social security benefits) to the same
extent and in the same manner as if coverage were under
chapter 89.

``Sec. 9057. Non-Federal employer participation

``(a) In this section the term--
``(1) `employee', notwithstanding section 9051, means an
employee of a non-Federal employer;
``(2) `non-Federal employer' means an employer that is not
the Federal Government; and
``(3) `total premium amount' means the total premiums for
individual coverage for the health benefits plan under which
the employee is enrolled, regardless of whether the employee
is enrolled as an individual or for self and family.
``(b)(1) The Office shall prescribe regulations under which
non-Federal employers may participate under this chapter,
including--
``(A) the offering of health benefits plans under this
chapter to employees through participating non-Federal
employers; and
``(B) a requirement for participating non-Federal employer
contributions to the payment of premiums for employees who
enroll in a health benefits plan under this chapter.
``(2) A participating non-Federal employer shall pay an
employer contribution for the premiums of an employee or
other applicable covered individual as follows:
``(A) A non-Federal employer that employs not more than 2
employees shall not be required to pay an employer
contribution.
``(B) A non-Federal employer that employs more than 2 and
not more than 25 employees shall pay not less than 40 percent
of the total premium amount.
``(C) A non-Federal employer that employs more than 25 and
not more than 50 employees shall pay not less than 50 percent
of the total premium amount.
``(D) A non-Federal employer that employs more than 50
employees shall pay not less than 60 percent of the total
premium amount.
``(3) Notwithstanding paragraph (2) (B), (C), or (D), a
non-Federal employer that employs more than 2 employees shall
pay not less than 20 percent of the total premium amount with
respect to the first year in which that employer participates
under this chapter.
``(c)(1) A participating non-Federal employer shall ensure
that each eligible full-time employee may enroll in a plan
under this chapter.
``(2)(A) A participating non-Federal employer may not offer
a health insurance plan to employees (other than a health
benefits plan under this chapter) unless such health
insurance plan is offered continuously on and after the date
of enactment of this chapter.
``(B) If a participating non-Federal employer offers
coverage under this chapter and under another plan as
provided under subparagraph (A), the non-Federal employer--
``(i) shall treat all employees in the same manner with
respect to such offerings; and
``(ii) may not use financial incentives or disincentives to
encourage an employee or class of employees to enroll in the
health insurance plan not offered under this chapter.''.

[[Page S11579]]

SEC. 3. TECHNICAL AND CONFORMING AMENDMENTS.

(a) Contract Requirement Under Chapter 89.--Section 8902 of
title 5, United States Code, is amended by adding after
subsection (o) the following:
``(p) Each contract under this chapter shall include a
provision that the carrier shall offer any health benefits
plan as required under chapter 90A.''.
(b) Table of Chapters.--The table of chapters for part III
of title 5, United States Code, is amended by inserting after
the item relating to chapter 90 the following:

``90A. Health Insurance for Non-Federal Employees...........9051''.....

SEC. 4. EFFECTIVE DATE.

This Act and the amendments made by this Act shall take
effect on the date of enactment of this Act and shall apply
to contracts that take effect with respect to calendar year
2003 and each calendar year thereafter.
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