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United States · Law · HR

H.R. 3103 (104th)

Health Insurance Portability and Accountability Act of 1996

enactedUnited States· United States Congress· EN

Introduced

18 March 1996

Last action

—

Status

Became Public Law No: 104-191.

Sponsors

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Subjects

Discovery layer

Source updated

23 March 2026

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Summary

TABLE OF CONTENTS: Title I: Improved Availability and Portability of Health Insurance Coverage Subtitle A: Coverage Under Group Health Plans Subtitle B: Definitions; General Provisions Title II: Preventing Health Care Fraud and Abuse; Administrative Simplification 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 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: High-Risk Pools Title IV: Revenue Offsets Subtitle A: Repeal of Bad Debt Reserve Method for Thrift Savings Associations Subtitle B: Reform of the Earned Income Credit Health Coverage Availability and Affordability Act of 1996 - Title I: Improved Availability and Portability of Health Insurance Coverage - Subtitle A: Coverage Under Group Health Plans - Requires a group health plan and an insurer or health maintenance organization (HMO) offering health insurance in connection with a group health plan to: (1) reduce any preexisting condition period by the aggregate period of prior coverage; and (2) limit any preexisting condition period to not more than 12 months. Prohibits: (1) preexisting condition periods for newborns and regarding certain adoptions; and (2) treating pregnancy as a preexisting condition. Allows an HMO that does not use preexisting condition limitations to impose an eligibility period. (Sec. 103) Prohibits coverage exclusion on the basis of health status. Requires a plan to allow an otherwise-eligible employee to enroll if the employee previously declined enrollment because of other coverage and subsequently lost the other coverage. Prohibits, if a plan offers family coverage, a waiting period for a newborn, certain adopted children, or a spouse. (Sec. 104) Amends the Internal Revenue Code to impose a tax on any failure of a group health plan to meet certain requirements of this Act. Deems sections 101 through 103 of this Act to be provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Provides for civil money penalties for failure to meet a requirement of this subtitle. Subtitle B: Definitions; General Provisions - Sets forth definitions and general provisions, including: (1) excluding church plans from the requirements of this title; and (2) requiring treatment of State Medicaid (unless a State elects otherwise) and Medicare plans as a group health plan for individual coverage certification purposes. Title II: Preventing Health Care Fraud and Abuse; Administrative Simplification - 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 the Department of 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 the Department of HHS Office of the IG with respect to the Medicare and Medicaid programs under SSA titles XVIII and XIX. (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. 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 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. 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 discounting and managed care 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. 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, under the system for unique identifiers for Medicare physicians, to impose appropriate fees on such physicians to cover the costs of investigation and recertification activities with respect to the issuance of the identifiers. 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 control 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, for 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 define a Federal health care offense and cover within its general purview, and provide sanctions for, the commission of health care fraud, theft or embezzlement in connection with health care, obstruction of criminal investigations of Federal health care offenses, and other specified matters related to health care, such as the 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. 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 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 coordination of benefits) and data elements as well as standards relating to security and privacy, and performance of tasks pursuant to specified requirements, assisted by the newly established Health Information Advisory Committee. (Sec. 251) Provides penalties for violations of provisions of this subtitle, including for the wrongful disclosure of individually identifiable health information. (Sec. 261) Directs the HHS Secretary to adopt uniform coverage, administration, and payment policies for clinical diagnostic laboratory tests under Medicare part B (Supplementary Medical Insurance) in accordance with a specified process. Provides that, effective for claims submitted after the expiration of a specified 90-day period, an independent laboratory may select a single carrier for the processing of all of its claims for payment under Medicare part B without regard to the location where the laboratory or the patient or provider involved resides or conducts business. Requires such election of a single carrier to be made by the clinical laboratory, and an agreement between the carrier and laboratory to be forwarded to the HHS Secretary. 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 transactions taxes if the MSA ceases to be an MSA. Imposes a penalty on MSA reporting failure. Exempts MSAs from the definition of "specified insurance contract" for provisions relating to capitalization of certain policy acquisition expenses. Subtitle B: Increase in Deduction for Health Insurance Costs of Self-Employed Individuals - Allows self-employed individuals to deduct a portion of their expenditures for medical insurance for the individual, spouse, and dependents. Subtitle C: Long-Term Care Services and Contracts - Requires treating: (1) a long-term care insurance as accident and health insurance and associated amounts received as 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 overage provided through a flexible spending arrangement. Declares that a group health plan does not fail to meet continuation requirements solely because it fails to provide long-term coverage. (Sec. 323) Imposes reporting requirements on long-term care benefit payors. (Sec. 325) 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) policy or certificate delivery; and (3) claims denials information. Subtitle D: Treatment of Accelerated Death Benefits - Treats life insurance amounts paid as an amount paid because of death if the insured is terminally or chronically ill and the amount is received under a provision that is treated as long-term care insurance. 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: High-Risk Pools - Exempts from taxation a State- established membership organization providing nonprofit medical care coverage to high risk individuals. Title IV: Revenue Offsets - Subtitle A: Repeal of Bad Debt Reserve Method for Thrift Savings Associations - Declares that bad debt reserve banking provisions shall not apply after a specified date. Provides for the resulting accounting method change. Subtitle B: Reform of the Earned Income Credit - Requires, in order to be eligible for the earned income credit (EIC), that a taxpayer include on the return the taxpayer's (and, if married, the spouse's) social security number (SSN). Adds to the definition of "mathematical or clerical error" references to omission of a SSN required by EIC provisions. (Sec. 412) Increases preparer penalties for certain failures or actions.

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