S. 1858 (105th): Work Incentives Improvement Act of 1998

105th Congress, 1997–1998. Text as of Mar 25, 1998 (Introduced).

Status & Summary | PDF | Source: GPO

S 1858 IS

105th CONGRESS

2d Session

S. 1858

To amend the Social Security Act to provide individuals with disabilities with incentives to become economically self-sufficient.

IN THE SENATE OF THE UNITED STATES

March 25, 1998

Mr. JEFFORDS (for himself, Mr. KENNEDY, and Mr. HARKIN) introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

To amend the Social Security Act to provide individuals with disabilities with incentives to become economically self-sufficient.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited as the ‘Work Incentives Improvement Act of 1998’.

    (b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

      Sec. 1. Short title; table of contents.

      Sec. 2. Findings and purposes.

TITLE I--ESTABLISHMENT OF OPTIONS PROGRAM

      Sec. 101. OPTIONS program for working individuals with disabilities.

      Sec. 102. Work incentive counseling and assistance program.

TITLE II--EXPANDED AVAILABILITY OF HEALTH CARE SERVICES

      Sec. 201. State work options program under medicaid.

      Sec. 202. Extension of medicare benefits for SSDI OPTIONS program participants.

TITLE III--DEMONSTRATION PROJECTS AND OUTREACH

      Sec. 301. Demonstration projects.

      Sec. 302. Information and outreach regarding work opportunities for individuals with a disability.

TITLE IV--MISCELLANEOUS

      Sec. 401. Report and recommendations to Congress.

      Sec. 402. Effective dates.

SEC. 2. FINDINGS AND PURPOSES.

    (a) FINDINGS- Congress makes the following findings:

      (1) Health care is important to all Americans.

      (2) Health care is particularly important to individuals with disabilities and special health care needs who often cannot afford the insurance available to them through the private market, are uninsurable by the plans available in the private sector, and are at great risk of incurring very high and devastating health care costs.

      (3) Americans with severe disabilities and special health care needs often are unable to obtain insurance that provides them with the necessary services, such as personal assistance services, prescription drugs, and durable medical equipment, that they need to maintain their employment and independence.

      (4) For individuals with disabilities, the fear of losing health care and related services is one of the greatest barriers keeping the individuals from maximizing their employment and earning potential.

      (5) Social security disability insurance (DI) beneficiaries and supplemental security income (SSI) disability recipients risk losing medicare or medicaid coverage that is linked to their cash benefits, a risk that is an equal, or greater, work disincentive than the loss of cash benefits associated with working.

      (6) Currently, less than 1/2 of 1 percent of social security disability insurance and supplemental security income beneficiaries cease to receive benefits as a result of employment.

      (7) If an additional 1/2 of 1 percent of the current social security disability insurance (DI) and supplemental security income (SSI) recipients were to cease receiving benefits as a result of employment, the savings in cash assistance would total $3,500,000,000 over the work life of the individuals.

    (b) PURPOSES- The purposes of this Act are as follows:

      (1) To provide health care services to individuals with disabilities that will enable those individuals to cease to receive social security disability insurance benefits and become employed and independent.

      (2) To provide States with the option of allowing individuals with disabilities to purchase, through medicaid and subject to a copayment requirement, the personal assistance services and prescription drugs that the private insurance available to such individuals does not provide.

      (3) To provide individuals with disabilities with the option of purchasing and maintaining medicare coverage after returning to work.

TITLE I--ESTABLISHMENT OF OPTIONS PROGRAM

SEC. 101. OPTIONS PROGRAM FOR WORKING INDIVIDUALS WITH DISABILITIES.

    (a) ESTABLISHMENT- Title XI of the Social Security Act (42 U.S.C. 1301 et seq.) is amended by adding at the end the following:

‘Part D--OPTIONS Program for Working Individuals With Disabilities

‘DEFINITIONS

    ‘SEC. 1181. In this part:

      ‘(1) COMMISSIONER- The term ‘Commissioner’ means the Commissioner of Social Security.

      ‘(2) ELIGIBLE WORKING INDIVIDUAL WITH A DISABILITY- The term ‘eligible working individual with a disability’ means an individual who, based on a determination by the State, is found eligible for personal assistance services or prescribed drugs under section 1929A because without such services or drugs the individual would be unable to perform essential functions of the employment position that the individual holds or desires, but does not include any individual who is receiving--

        ‘(A) disability benefits under title II; or

        ‘(B) supplemental security income benefits under title XVI.

      ‘(3) SSDI OPTIONS PROGRAM PARTICIPANT- The term ‘SSDI OPTIONS program participant’ means an individual eligible for cash benefits under title 223 on the basis of being disabled who has elected to participate in the OPTIONS program established under this part.

      ‘(4) SUBSTANTIAL GAINFUL ACTIVITY- The term ‘substantial gainful activity’ has the meaning given that term under section 223 with respect to an individual who has been determined to be eligible for

cash benefits under such section on the basis of being disabled.

‘OPPORTUNITY TO FULLY INTEGRATE THROUGH OCCUPATIONS

    ‘SEC. 1182. (a) ESTABLISHMENT OF OPTIONS PROGRAM-

      ‘(1) IN GENERAL- The Commissioner, in consultation with the Secretary, shall establish a program, to be known as the OPTIONS program, under which--

        ‘(A) an eligible working individual with a disability and a SSDI OPTIONS program participant--

          ‘(i) shall receive, without being subjected to a waiting period, work incentive services under title XIX to the extent the State in which the individual or participant resides makes such services available in accordance with section 1929A; and

          ‘(ii) shall receive work counseling and assistance, as provided under section 1183; and

        ‘(B) a SSDI OPTIONS program participant--

          ‘(i) shall be provided, after having been entitled to receive cash benefits under section 223 for at least 24 months (or having participated in the OPTIONS program for at least such period), with the opportunity to purchase hospital insurance benefits under part A of title XVIII and supplementary medical insurance benefits under part B of such title, in accordance with section 1818B, for as long as the individual participates in the OPTIONS program; and

          ‘(ii) shall choose--

            ‘(I) to waive cash benefits under section 223 and acquire average monthly earnings from substantial gainful activity in excess of the amount designated to represent such activity by the Commissioner; or

            ‘(II) if at the time the individual first elects to participate in the OPTIONS program, the individual has received cash benefits under section 223 for at least 24 months, to not waive cash benefits under section 223, and to continue to be subject to the limitation imposed by the Commissioner for other disability beneficiaries under section 223 with respect to average monthly earnings from substantial gainful activity.

      ‘(2) WAIVER OF CASH BENEFITS HAS NO EFFECT ON BENEFITS FOR DEPENDENTS AND SURVIVORS- A waiver of cash benefits under paragraph (1)(B)(ii)(I) by an individual shall have no effect on the eligibility for, or entitlement to, benefits of a dependent or survivor of such individual under section 202.

    ‘(b) OPTIONS FORM- The Commissioner shall prepare and disseminate a form that shall be entitled ‘Opportunity to Fully Integrate Through Occupations Program’. The form shall be used by an individual to elect to participate in the OPTIONS program.

    ‘(c) TIMING- An individual may elect to participate in the OPTIONS program at any time.

    ‘(d) CONTINUING DISABILITY AND OTHER WORK-RELATED REVIEWS-

      ‘(1) REGULAR REVIEWS- A SSDI OPTIONS program participant shall continue to be subject to continuing disability reviews on the same regularly scheduled basis that would occur if the individual had not chosen to participate in the OPTIONS program.

      ‘(2) WORK ACTIVITY, OR THE CESSATION OF WORK ACTIVITY, MAY NOT BE THE BASIS FOR A REVIEW, A FINDING OF NO DISABILITY, OR A PRESUMPTION OF AN INABILITY TO WORK- No continuing disability review or any other work-related review may be scheduled for a SSDI OPTIONS program participant solely as a result of work activity engaged in by the individual while participating in the OPTIONS program, no work activity engaged in by the individual while participating in the program may be used as evidence that the individual is no longer disabled, and no cessation of work activity by the individual while participating in the program may give rise to a presumption that the individual is unable to engage in work.

    ‘(e) RULES APPLICABLE TO SSDI OPTIONS PROGRAM PARTICIPANTS WHO CHOOSE TO RETAIN CASH DISABILITY BENEFITS-

      ‘(1) DETERMINATION OF IMPAIRMENT-RELATED WORK EXPENSES- In the case of a SSDI OPTIONS program participant who chooses to continue to receive cash benefits under section 223, the determination of the participant’s impairment-related work expenses for purposes of determining the extent to which the participant has engaged in substantial gainful activity shall include expenditures incurred by the participant for items and services related to the preparation for, and traveling to and from, employment, including expenditures for durable medical equipment, as defined in section 1861(n), adapting a vehicle for the participant, and orientation mobility services.

      ‘(2) EXCLUSION OF COST OF A VEHICLE FROM INCOME OF RURAL RESIDENTS-

        ‘(A) IN GENERAL- In the case of a SSDI OPTIONS program participant who chooses to continue to receive cash benefits under section 223 and who resides in a rural area, the Commissioner shall exclude from the monthly determination of the participant’s income the cost of obtaining a vehicle for the participant, subject to such reasonable limits as the Commissioner may prescribe.

        ‘(B) ONE-TIME EXCLUSION- The exclusion authorized under subparagraph (A) may only be made with respect to 1 vehicle per participant.

        ‘(C) DEFINITION OF RURAL AREA- For purposes of subparagraph (A), the term ‘rural area’ means any area that does not have reasonably available and accessible public transportation, as determined by the Commissioner.

      ‘(3) OVERPAYMENT OF BENEFITS- Any erroneous overpayments of cash benefits to a SSDI OPTIONS program participant who chooses to continue to receive cash benefits under section 223 that are not the result of fraudulent or deceptive activity by, or information from, the individual shall be retained by the participant.

    ‘(f) TERMINATION OF EMPLOYMENT- If a SSDI OPTIONS program participant terminates his or her employment, the participant--

      ‘(1) shall no longer be considered a SSDI OPTIONS program participant for purposes of this part, section 226(j), or section 1929A;

      ‘(2) shall be presumed automatically eligible for cash benefits under section 223 and hospital insurance benefits under section 226, and for supplemental security income benefits under title XVI and medical assistance under title XIX (if applicable), and any month in which the participant participated in the OPTIONS program shall be included in the determination of the 24-month period required for hospital insurance benefits under section 226(b)(2)(A); and

      ‘(3) shall continue to be eligible for work incentive services offered in accordance with section 1929A, only to the extent that the State where the participant resides offers such services and the participant otherwise qualifies for such services.

    ‘(g) NO EFFECT ON ELIGIBILITY FOR TITLE XX AND OTHER PROGRAMS- Participation in the OPTIONS program by an eligible working individual with a disability or a SSDI OPTIONS program participant shall have no effect (except to the extent that such participation is a condition for eligibility for work incentive services under section 1929A) on any benefits that the individual or participant is eligible for, or provided under, title XX or any other Federal or State program (other than the programs under titles II and XVIII).

‘RESERVED

    ‘SEC. 1183. [Reserved].

‘REGULATIONS

    ‘SEC. 1184. Not later than 1 year after the date of enactment of this part, the Commissioner, in consultation with the Secretary, shall promulgate such final regulations, including regulations related to ensuring program integrity, as are necessary to implement the OPTIONS program established under this part.

‘REPORTS

    ‘SEC. 1185. The Commissioner, in consultation with the Secretary, shall submit the following reports to the appropriate committees of Congress:

      ‘(1) Not later than 3 years after the date of enactment of the OPTIONS program, a report on the establishment of the program.

      ‘(2) Not later than 5 years after such date, a report on the progress of the OPTIONS program.

      ‘(3) Not later than 7 years after such date, a final report recommending whether the OPTIONS program should be permanently authorized.

‘APPROPRIATIONS

    ‘SEC. 1186. (a) IN GENERAL- Out of any funds in the Treasury not otherwise appropriated, there are appropriated such sums as may be necessary to carry out the OPTIONS program established under this part, other than the work incentive counseling and assistance program established under section 1183.

    ‘(b) WORK INCENTIVE COUNSELING AND ASSISTANCE PROGRAM- The Commissioner shall use funds appropriated and otherwise made available for programs under titles II and XVI of this Act to carry out the work incentive counseling and assistance program established under section 1183.

‘SUNSET

    ‘SEC. 1187. The OPTIONS program established under this part shall terminate on the date that is 10 years after the date of enactment of this part.’.

    (b) CONFORMING AMENDMENTS-

      (1) EXTENDED PERIOD OF ELIGIBILITY- Section 223(a)(1) of the Social Security Act (42 U.S.C. 423(a)(1)) is amended by inserting after the second sentence the following: ‘For purposes of subclause (II) of the preceding sentence, the determination of the 36-month period shall not include a month in which the individual was a SSDI OPTIONS program participant.’.

      (2) PERIOD OF TRIAL WORK- The last sentence of section 222(c)(3) of the Social Security Act (42 U.S.C. 422(c)(3)) is amended by inserting before the period the following: ‘; and no such period may begin in or include a month in which the individual was a SSDI OPTIONS program participant’.

      (3) NONAPPLICATION OF ENTITLEMENT TO HOSPITAL INSURANCE BENEFITS; CROSS-REFERENCE- Section 226 of the Social Security Act (42 U.S.C. 426) is amended by adding at the end the following:

‘NONAPPLICATION TO OPTIONS PARTICIPANTS; CROSS-REFERENCE

    ‘(j) Subsection (b) shall not apply to any individual that would otherwise be entitled to hospital insurance benefits under such subsection who is a SSDI OPTIONS program participant, as defined in section 1181(3). For provisions relating to the availability of health care benefits under sections 1818B and 1929A for such individuals, and to eligibility for work counseling and assistance, as provided in section 1183, see part D of title XI.’.

      (4) ADDITIONAL CROSS-REFERENCE- Section 223 of the Social Security Act (42 U.S.C. 423 is amended by adding at the end the following:

‘OPTIONAL WAIVER OF BENEFITS

    ‘(j) For provisions relating to the availability of health care benefits under sections 1818B and 1929A for individuals who participate in the OPTIONS program established under part D of title XI, and to eligibility for work counseling and assistance, as provided in section 1183, see part D of title XI.’.

      (5) HEADING OF TITLE XI- Title XI of the Social Security Act (42 U.S.C. 1301 et seq.) is amended in the title by striking ‘AND ADMINISTRATIVE SIMPLIFICATION’ and inserting ‘ADMINISTRATIVE SIMPLIFICATION, AND OPTIONS PROGRAM FOR WORKING INDIVIDUALS WITH DISABILITIES’.

SEC. 102. WORK INCENTIVE COUNSELING AND ASSISTANCE PROGRAM.

    Section 1183 of the Social Security Act (as added by section 101(a)) is amended to read as follows:

‘WORK INCENTIVE COUNSELING AND ASSISTANCE PROGRAM

    ‘SEC. 1183. (a) ESTABLISHMENT- The Commissioner shall establish a community-based work incentive counseling and assistance program under which the Commissioner shall enter into agreements to provide counseling and assistance to eligible working individuals with a disability and SSDI OPTIONS program participants. The agreements authorized under the preceding sentence shall be made with States and public and private agencies and organizations (other than Social Security Administration Field Offices) that the Commissioner determines have experience in providing rehabilitation services or independent living and social services to working individuals with disabilities, and are qualified to provide counseling and assistance in accordance with the requirements described in subsection (b). The agreements may be made with any of the following:

      ‘(1) Vocational rehabilitation agencies.

      ‘(2) The State agency administering the State program funded under part A of title IV.

      ‘(3) The State agency administering the State medicaid program under title XIX.

      ‘(4) State employment training and placement agencies.

      ‘(5) Any other public or private agency or organization that the Commissioner determines satisfies the requirements of this section.

    ‘(b) REQUIREMENTS-

      ‘(1) IN GENERAL- Counselors for the program established under this section shall--

        ‘(A) assess the education and skills of an eligible working individual with a disability or a SSDI OPTIONS program participant, in coordination and communication with the local Social Security Administration Field Office for the area in which such individual or participant resides;

        ‘(B) on the basis of the assessment conducted under subparagraph (A), assist in the identification of employment or vocational rehabilitation opportunities that may be available to the individual or participant; and

        ‘(C) advise the individual or participant on the adequacy of any health benefits coverage that may be offered by an employer of the individual or participant and the extent to which other health benefits coverage may be available to the individual or participant, including personal assistance services and prescription drugs provided under section 1929A, if the State in which the individual or participant resides opts to provide such services.

      ‘(2) COORDINATION WITH OTHER PROGRAMS- The program established under this section shall be conducted in coordination with other public and private programs that provide information and assistance regarding rehabilitation services and independent living supports and benefits counseling for working individuals with disabilities.

      ‘(3) OPTIONS TRAINING FOR SOCIAL SECURITY ADMINISTRATION FIELD OFFICE WORK INCENTIVE DESIGNEES- The Commissioner shall provide training regarding the OPTIONS program for the employee in each Social Security Administration Field Office that is designated to act as the work incentive coordinator for that office.’.

TITLE II--EXPANDED AVAILABILITY OF HEALTH CARE SERVICES

SEC. 201. STATE WORK OPTIONS PROGRAM UNDER MEDICAID.

    (a) STATE OPTION TO PROVIDE WORK INCENTIVE SERVICES- Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) is amended by inserting after section 1929 the following:

‘STATE WORK OPTIONS PROGRAM

    ‘SEC. 1929A. (a) DEFINITIONS- In this section:

      ‘(1) PERSONAL ASSISTANCE SERVICES- The term ‘personal assistance services’ means a range of services, provided by 1 or more persons, designed to assist an individual with a disability to perform daily living activities on or off the job that the individual would typically perform if the individual did not have a disability. Such services shall be designed to increase the individual’s control in life and ability to perform everyday activities on or off the job.

      ‘(2) ELIGIBLE WORKING INDIVIDUAL WITH A DISABILITY- The term ‘eligible working individual with a disability’ means an individual who, based on a determination by the State, is found eligible for personal assistance services or prescribed drugs under this section because without such services or drugs the individual would be unable to perform essential functions of the employment position that the individual holds or desires, but does not include any individual who is receiving--

        ‘(A) disability benefits under title II; or

        ‘(B) supplemental security income benefits under title XVI.

      ‘(3) QUALIFIED ELIGIBLE WORKING INDIVIDUAL WITH A DISABILITY- The term ‘qualified eligible working individual with a disability’ means an individual who has attained age 18 but has not attained age 65, and who--

        ‘(A) is an eligible working individual with a disability;

        ‘(B) is a SSDI OPTIONS program participant; or

        ‘(C) engages in substantial gainful activity in accordance with subsection (a) or (b) of section 1619.

      ‘(4) SSDI OPTIONS PROGRAM PARTICIPANT- The term ‘SSDI OPTIONS program participant’ has the meaning given that term in section 1181(3).

      ‘(5) WORK ELIGIBLE INDIVIDUAL- The term ‘work eligible individual’ means an individual who--

        ‘(A) has attained age 16 but has not attained age 65;

        ‘(B) is entitled to cash benefits under section 223 or eligible for supplemental security income benefits under title XVI;

        ‘(C) is not engaged in work, as determined under the State plan; and

        ‘(D) the State, in accordance with regulations issued by the Secretary, determines is in a transition to work readiness or is otherwise work eligible.

      ‘(6) WORK INCENTIVE SERVICES- The term ‘work incentive services’ means personal assistance services and prescribed drugs.

    ‘(b) STATE OPTION-

      ‘(1) IN GENERAL- A State that elects through a plan amendment to provide work incentive services to qualified eligible working individuals with a disability and to work eligible individuals shall offer such services in accordance with the provisions of this section.

      ‘(2) ELIGIBILITY- Only a State that, as of the date of enactment of this section, does not offer under the State plan or a waiver of such plan, services that would otherwise be considered work incentive services under this section to individuals who would otherwise qualify for work incentive services under this section, may elect to offer work incentive services under this section.

      ‘(3) MAINTENANCE OF EFFORT OF AMOUNTS EXPENDED FOR SUPPORT OF INDIVIDUALS WITH DISABILITIES- A State that elects to offer work incentive services in accordance with this section may not reduce the amount of State expenditures for individuals with disabilities below the level of such expenditures in fiscal year 1997. For purposes of this subparagraph, the term ‘State expenditures’ means expenditures by the State from amounts other than amounts made available by the Federal government and for which no Federal match, reimbursement, or payment is made.

      ‘(4) WAIVER OF REQUIREMENTS- The Secretary may waive such provisions of this title as are necessary to carry out the provisions of this section other than--

        ‘(A) section 1902(a)(1) (relating to statewideness);

        ‘(B) subject to subsection (d), section 1902(a)(10)(B) (relating to comparability of amount, duration, and scope of services); and

        ‘(C) the requirements imposed under this title for a State to provide services under the State plan that are reasonable in amount, duration, and scope to achieve the purpose of such services.

    ‘(c) LIMITATIONS ON PREMIUMS AND COST-SHARING-

      ‘(1) INDIVIDUALS WITH INCOME BELOW 150 PERCENT OF POVERTY LINE- In the case of a qualified eligible working individual with a disability or a work eligible individual whose income is at or below 150 percent of the poverty line (as defined in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)), including any revision required by such section for a family of the size involved), a State may not impose any enrollment fee, premium, deductible, cost sharing, or similar charge for receipt of work incentive services under this section.

      ‘(2) OTHER INDIVIDUALS- In the case of a qualified eligible working individual with a disability or a work eligible individual who is not described in paragraph (1), a State may impose an enrollment fee, premium, deductible, cost sharing, or similar charge on a sliding scale basis related to income, consistent with standards and regulations applicable to such charges under section 1916.

    ‘(d) PRIORITY FOR 16- THROUGH 25-YEAR-OLD WORK ELIGIBLE INDIVIDUALS FOR PERSONAL ASSISTANCE SERVICES- A State shall give priority for receipt of personal assistance services to work eligible individuals who have attained age 16 but have not attained age 26.

    ‘(e) ENHANCED FMAP- Notwithstanding the first sentence of section 1905(b), the Federal medical assistance percentage for work incentive services provided under this section is equal to the enhanced FMAP described in section 2105(b).

    ‘(f) OTHER REQUIREMENTS-

      ‘(1) CONSUMER CHOICE IN DELIVERY OF PERSONAL ASSISTANCE SERVICES- A State shall provide qualified eligible working individuals with a disability and work eligible individuals with a choice of provider models for receiving personal assistance services in accordance with this section and may not require that such services be ordered by a physician in order to be available to such individuals.

      ‘(2) MEDICAID COVERAGE OF LAST RESORT- No payment may be made under this section for any work incentive services provided under this section to a qualified eligible working individual with a disability or a work eligible individual who is eligible for coverage of such services under--

        ‘(A) health benefits coverage offered by the individual’s employer; or

        ‘(B) any other coverage or payment available for such services, including a vocational rehabilitation program.

      ‘(3) APPEALS PROCESS- Each State that elects to provide work incentive services under this section shall provide an appeals process for challenging the manner in which such services are provided and the denial of such services, consistent with the process for appealing other challenges to eligibility for, or the extent of, coverage of items and services under this title.

    ‘(g) RULES OF CONSTRUCTION-

      ‘(1) LIMITATION ON ENTITLEMENT- Except as specifically provided under this section, nothing in this title shall be construed as establishing any entitlement of individuals described in subsection (a) to any medical assistance provided under this title other than work incentive services provided in accordance with this section.

      ‘(2) NO AFFECT ON OTHER BASIS FOR ELIGIBILITY- Nothing in paragraph (1) shall be construed as affecting the eligibility of an individual described in subsection (a) for medical assistance under this title on a basis that is unrelated to the individual’s eligibility for work incentive services under this section.

    ‘(h) REGULATIONS- Not later than 1 year after the date of enactment of this section, the Secretary shall publish final regulations that set forth the requirements for offering work incentive services in accordance with this section.’.

    (b) CONFORMING AMENDMENTS-

      (1) Section 1902(a)(10) of the Social Security Act (42 U.S.C. 1396a(a)(10)) is amended--

        (A) in subparagraph (E), by striking ‘and’ at the end;

        (B) in subparagraph (F), by adding ‘and’ at the end; and

        (C) by adding at the end the following:

        ‘(G) at the option of a State, for making work incentive services available to qualified eligible working individuals with a disability and work eligible individuals in accordance with section 1929A;’.

      (2) Section 1902(a)(10)(C)(iv) of such Act (42 U.S.C. 1396a(a)(10)(C)(iv)) is amended by inserting ‘and (27)’ after ‘(24)’.

      (3) Section 1903(f)(4) of the Social Security Act (42 U.S.C. 1396b(f)(4)), as amended by section 162(4) of Public Law 105-100 (111 Stat. 2189), is amended by striking ‘or 1905(u)’ and inserting ‘, 1905(u), 1929A(a)’.

      (4) Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)), as amended by section 4802 of the Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 538), is amended--

        (A) by striking ‘and’ at the end of paragraph (26);

        (B) by redesignating paragraph (27) as paragraph (28); and

        (C) by inserting after paragraph (26) the following:

      ‘(27) work incentive services (to the extent allowed and as defined in section 1929A; and’.

      (5) Section 1905(b) is amended in the first sentence by striking ‘section 1933(d)’ and inserting ‘sections 1929A(e) and 1933(d)’.

SEC. 202. EXTENSION OF MEDICARE BENEFITS FOR SSDI OPTIONS PROGRAM PARTICIPANTS.

    (a) IN GENERAL- Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is amended by inserting after section 1818A the following:

‘HOSPITAL INSURANCE AND MEDICAL SUPPLEMENTARY INSURANCE BENEFITS FOR SSDI OPTIONS PROGRAM PARTICIPANTS

    ‘SEC. 1818B. (a) ELIGIBILITY- Every individual who--

      ‘(1) is a SSDI OPTIONS program participant (as defined in section 1181(3)); and

      ‘(2) is not otherwise entitled to benefits under this part;

    shall be eligible to enroll in the insurance program established by this part and part B.

    ‘(b) ENROLLMENT- The Secretary shall establish procedures for enrollment under this section.

    ‘(c) COVERAGE PERIOD-

      ‘(1) IN GENERAL- The period during which an individual described in subsection (a) is eligible for benefits under the insurance program under this part and part B (in this subsection referred to as a ‘coverage period’) shall begin on the first day of the month following the month in which the individual has begun participation in the OPTIONS program established under part D of title XI.

      ‘(2) TERMINATION- An individual’s coverage period under this section shall continue until the individual’s enrollment is terminated as follows:

        ‘(A) As of the month following the month in which the Secretary provides notice to the individual that the individual is no longer a SSDI OPTIONS program participant.

        ‘(B) As of the month following the month in which the individual files notice that the individual no longer wishes to participate in the insurance program established by this part and part B.

        ‘(C) Except as provided in subsection (d)(4), as of the month following the month in which the individual becomes eligible for health benefits coverage offered by the individual’s employer.

        ‘(D) As of the month before the first month in which the individual becomes eligible for hospital insurance benefits under section 226(a) or 226A.

        ‘(E) As of a date, determined under regulations of the Secretary, for nonpayment of premiums.

        ‘(F) As of the month following the month in which the date described in section 1187 occurs.

      The regulations under subparagraph (E) may provide a grace period of not longer than 90 days, which may be extended for a period not to exceed 180 days in any case in which the Secretary determines that there was good cause for failure to pay the overdue premiums within such 90-day period. Termination of coverage under this section shall result in simultaneous termination of any other related coverage provided to the individual under any other part of this title.

    ‘(d) PREMIUMS-

      ‘(1) IN GENERAL-

        ‘(A) PAYMENT TO SECRETARY- Premiums for enrollment under this section shall be paid to the Secretary at such times, and in such manner, as the Secretary shall by regulations prescribe.

        ‘(B) TRUST FUNDS-

          ‘(i) PART A- Premiums received by the Secretary pursuant to subparagraph (A) for coverage under this part shall be deposited in the Treasury to the credit of the Federal Hospital Insurance Trust Fund.

          ‘(ii) PART B- Premiums received by the Secretary pursuant to subparagraph (A) for coverage under part B shall be deposited in the Treasury to the credit of the Federal Supplementary Medical Insurance Trust Fund.

        ‘(C) COVERAGE PERIOD FOR PAYMENTS; NO PAYMENTS WHEN OTHERWISE ELIGIBLE-

          ‘(i) COVERAGE PERIOD OF PAYMENTS- Subject to clause (ii) and paragraph (2)(A), such premiums shall be payable for the period commencing with the first month of an individual’s coverage period and ending with the month in which the individual dies or, if earlier, in which the individual’s coverage period terminates.

          ‘(ii) NO PAYMENTS WHEN OTHERWISE ELIGIBLE- Such premiums shall not be payable for any month in which the individual is entitled to benefits under this part pursuant to section 226(b).

      ‘(2) AMOUNT-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), the amount of an individual’s premiums for any month in an individual’s coverage period under this section shall be equal to--

          ‘(i) for coverage under this part, zero; and

          ‘(ii) for coverage under part B, the amount of the premium determined under section 1839(a)(3).

        ‘(B) INDIVIDUALS WHOSE INCOME EXCEEDS 250 PERCENT OF POVERTY- If an individual’s earned income for any month in an individual’s coverage period during a calendar year under this section (expressed as an annual amount) exceeds the amount equal to 250 percent of the poverty line (as defined in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2), including any revision required by such section)) for a family of the size involved for such calendar year, the amount

of an individual’s premiums for such month shall be equal to--

          ‘(i) for coverage under this part, the lesser of--

            ‘(I) 1/12 of 10 percent of the amount of such excess income; or

            ‘(II) the amount of the premium determined under section 1818(d); and

          ‘(ii) for coverage under part B, the amount of the premium determined under section 1839(a)(3).

      ‘(3) PAYMENT ON BEHALF OF INDIVIDUALS ENROLLED UNDER THIS SECTION- The provisions of section 1818(e) (relating to payment of premiums) shall apply to individuals enrolled under this section in the same manner as such provisions apply to individuals enrolled under that section.

      ‘(4) ELECTION TO CONTINUE MEDICARE COVERAGE FOR INDIVIDUALS PARTICIPATING IN AN EMPLOYER HEALTH PLAN-

        ‘(A) IN GENERAL- Subsection (c)(2)(C) shall not apply if an individual participates in a health insurance plan offered by the individual’s employer and the individual elects to continue to be enrolled under this section.

        ‘(B) MEDICARE AS SECONDARY PAYER-

          ‘(i) IN GENERAL- If an individual enrolled under this section participates in the health plan offered by the employer and elects to continue to be enrolled under this section pursuant to subparagraph (A)--

            ‘(I) the health insurance offered by the employer shall be the primary payer for any health care items and services provided to such individual and payment under this title for such items and services shall be secondary pursuant to section 1862(b)(2); and

            ‘(II) the premium for enrollment under this section shall be the premium determined under paragraph (2).

          ‘(ii) RULE OF CONSTRUCTION- Nothing in clause (i) shall be construed as affecting the application of the payment rules described in section 1862(b)(2).

      ‘(5) VERIFICATION AND ADJUSTMENTS OF PREMIUMS-

        ‘(A) VERIFICATION- Each individual to whom this section applies shall, on the basis of information shown on the return of tax imposed by chapter 1 of the Internal Revenue Code of 1986 for any taxable year, determine the difference (if any) between--

          ‘(i) the aggregate premiums imposed by this section for months during the calendar year in which the taxable year begins; and

          ‘(ii) the aggregate amount of premiums paid under this section for such months with respect to the individual.

        Such determination shall be included on a form prescribed by the Secretary and the form shall be submitted to the Secretary at such time and in such manner as the Secretary shall prescribe.

        ‘(B) DEFICIENCY ADJUSTMENTS-

          ‘(i) IN GENERAL- If the amount under subparagraph (A)(i) exceeds the amount under subparagraph (A)(ii), the individual shall include with the form required to be filed under subparagraph (A) a separate check made payable to the Secretary in an amount equal to such excess plus interest determined under clause (ii).

          ‘(ii) INTEREST ON UNDERPAYMENTS- For purposes of clause (i)--

            ‘(I) IN GENERAL- The amount of interest taken into account shall be the sum of the amounts determined under subclause (II) for each of the months in the taxable year.

            ‘(II) MONTHLY INTEREST- Interest shall be computed for any month in an amount determined by applying the underpayment rate established under section 6621 of the Internal Revenue Code of 1986 to any portion of the underpayment for the period beginning on the first day of the following month and ending on the date the portion is paid. For purposes of this subclause, payments shall be applied to months in order, beginning with the earliest.

            ‘(III) SAFE-HARBOR EXCEPTION- No interest shall be imposed for any month if the individual’s estimate of earned income under paragraph (2) on which the premium for the month was based was not less than the individual’s earned income determined on the basis of information shown on the return of tax imposed by chapter 1 of such Code for the taxable year ending with or within the calendar year preceding the calendar year in which the estimate was made.

        ‘(C) OVERPAYMENT ADJUSTMENTS- If the amount under subparagraph (A)(ii) exceeds the amount under subparagraph (A)(i), the Secretary shall, at the Secretary’s discretion--

          ‘(i) credit such excess against any premium required under this section; or

          ‘(ii) make a payment to the individual in the amount of such excess.

        ‘(D) ADJUSTMENTS BY SECRETARY- If the Secretary determines, on the basis of information received from the Secretary of the Treasury under section 6103(l)(17) of the Internal Revenue Code of 1986, that there was an underpayment or overpayment of the aggregate premiums for months during any taxable year (after any other adjustment under this paragraph), the Secretary shall--

          ‘(i) notify the individual of such underpayment or overpayment,

          ‘(ii) in the case of an underpayment--

            ‘(I) give such individual an opportunity for a hearing with respect to such underpayment and a reasonable time for payment of such underpayment and interest determined under subparagraph (B)(i), and

            ‘(II) collect the amount of any underpayment and interest not paid under subclause (I) in such manner as the Secretary may prescribe, and

          ‘(iii) in the case of an overpayment, take the actions described in subparagraph (C).

      ‘(6) EARNED INCOME- For purposes of this subsection, the term ‘earned income’ has the meaning given such term by section 32(c)(2) of the Internal Revenue Code of 1986.

      ‘(7) AGREEMENT WITH COMMISSIONER- In order to promote the efficient administration of this subsection, the Secretary may enter into an agreement with the Commissioner of Social Security under which the Commissioner performs administrative responsibilities under this subsection.’.

    (b) DISCLOSURE OF INFORMATION- Section 6103(l) of the Internal Revenue Code of 1986 (relating to disclosure of returns and return information for purposes other than tax administration) is amended by adding at the end the following:

      ‘(17) DISCLOSURE OF TAXPAYER RETURN INFORMATION TO SOCIAL SECURITY ADMINISTRATION FOR PURPOSES OF COLLECTING PREMIUMS FOR A SSDI OPTIONS PROGRAM PARTICIPANT-

        ‘(A) IN GENERAL- The Secretary shall, upon written request from the Secretary of Health and Human Services, disclose to the Secretary with respect to a SSDI OPTIONS program participant identified in the request whether or not (and the amount by which) the participant’s earned income for any taxable year specified in the request exceeded the amount specified in section 1818B(d)(2)(B).

        ‘(B) RESTRICTION ON USE- Return information disclosed under subparagraph (A) may be used by officers and employees of the Department of Health and Human Services (or of the Social Security Administration if section 1818B(d)(7) of the Social Security Act applies) only for the purposes of, and to the extent necessary in, establishing a participant’s correct premium under section 1818B of the such Act.

        ‘(C) DEFINITIONS- For purposes of this paragraph, any term used that is also used in section 1818B of the Social Security Act shall have the meaning given such term by such section.’.

TITLE III--DEMONSTRATION PROJECTS AND OUTREACH

SEC. 301. DEMONSTRATION PROJECTS.

    (a) EXTENSION OF DISABILITY INSURANCE PROGRAM DEMONSTRATION PROJECT AUTHORITY- Section 505 of the Social Security Disability Amendments of 1980 (42 U.S.C. 1310 note) is amended--

      (1) in subsection (a)--

        (A) in paragraph (1)--

          (i) by inserting ‘(A)’ after ‘(1)’;

          (ii) by striking ‘(A) various’ and inserting ‘(i) various’;

          (iii) by striking ‘and (B)’ and inserting ‘, (ii)’;

          (iv) by striking the period and inserting ‘, and (iii) implementing sliding scale benefit offsets using variations in the amount of the offset as a proportion of earned income, the duration of the offset period, and the method of determining the amount of income earned by the beneficiaries, and using state-of-the-art information technology and electronic funds transfer technology to streamline the reporting of data and the implementation of the offsets, and developing and making available to beneficiaries, their families, guardians, and advocates, through the Internet information regarding work incentives and assistance for beneficiaries to make informed decisions regarding work.’; and

          (v) by adding at the end the following:

    ‘(B) The Commissioner may expand the scope of any experiment or demonstration project described in subparagraph (A) to include any group of participants with impairments that reasonably may be presumed to be disabled, and may limit any such experiment or demonstration project to any such group of individuals, subject to the terms of such experiment or demonstration project. The Commissioner shall define the extent of any presumption that is the basis for an expansion described in the preceding sentence.’;

        (B) in paragraph (3), by striking ‘1996’ and inserting ‘1999’; and

        (C) in paragraph (4), by striking ‘of the succeeding years through 1995’ and inserting ‘year thereafter’; and

      (2) in subsection (c), by striking ‘October 1, 1996’ and inserting ‘1 year after the conclusion of each such experiment and demonstration project’.

    (b) REQUIREMENTS FOR CONSIDERATION OF WAIVERS TO REDUCE WORK DISINCENTIVES- Section 1115 of the Social Security Act (42 U.S.C. 1315) is amended by inserting after subsection (c) the following:

    ‘(d)(1) In the case of any request for a waiver under this section that is for the purpose of conducting an experimental, pilot, or demonstration project that is designed to reduce work disincentives for individuals with disabilities, the Secretary shall take into account reductions in payments made to such individuals under titles II and XVI, and other reductions in Federal expenditures that are related to Federally-subsidized assistance for, or support of, such individuals, when the reduced expenditures are related to the fact that the individuals have earned income.

    ‘(2)(A) Not later than 90 days after the date the Secretary receives a request to conduct an experimental, pilot, or demonstration project that is designed to reduce work disincentives for individuals with disabilities and that is limited to not more than 5000 such individuals, the Secretary shall approve or disapprove the request, or inform the State that specified additional information is needed to review the request.

    ‘(B) In the case of a request described in subparagraph (A) in which the Secretary has specified that additional information is needed, the Secretary shall approve or disapprove the request not later than 90 days after the date the additional information is submitted.’.

    (c) SENSE OF CONGRESS REGARDING ADDITIONAL DEMONSTRATION PROJECTS- It is the sense of Congress that the Commissioner of Social Security and the Secretary of Health and Human Services should establish additional demonstration projects to assist individuals with disabilities engage in work.

SEC. 302. INFORMATION AND OUTREACH REGARDING WORK OPPORTUNITIES FOR INDIVIDUALS WITH A DISABILITY.

    (a) ESTABLISHMENT- The Commissioner of Social Security shall establish and conduct directly, or through grants, contracts, or interagency agreements, an ongoing program of outreach to individuals with disabilities who are potentially eligible to participate in the OPTIONS program established under part D of title XI of the Social Security Act or to engage in substantial gainful activity in accordance with subsections (a) and (b) of section 1619 of such Act (42 U.S.C. 1382h) and to the families of such individuals.

    (b) REQUIREMENTS- Under the program established in accordance with this section, the Commissioner of Social Security shall--

      (1) prepare and disseminate information explaining the OPTIONS program established under part D of title XI of the Social Security Act and the opportunity to engage in substantial gainful activity in accordance with subsections (a) and (b) of section 1619 of such Act (42 U.S.C. 1382h); and

      (2) work in cooperation with other Federal, State, and private agencies and nonprofit organizations that serve disabled individuals, and with agencies and organizations that focus on vocational rehabilitation and work-related training and counseling.

TITLE IV--MISCELLANEOUS

SEC. 401. REPORT AND RECOMMENDATIONS TO CONGRESS.

    Not later than 12 months after the date of enactment of this Act, the Commissioner of Social Security and the Secretary of Health and Human Services shall jointly submit to Congress a report containing recommendations for any administrative or legislative changes, including to the OPTIONS program for working individuals with disabilities established under part D of title XI of the Social Security Act (and the health care benefits provided under sections 1818B and 1929A of such Act), that the Commissioner and the Secretary determine would be appropriate to reduce work disincentives for individuals with disabilities.

SEC. 402. EFFECTIVE DATES.

    (a) IN GENERAL- Except as provided in subsections (b) and (c), this Act takes effect on the date of enactment of this Act.

    (b) EXCEPTIONS- The amendments made by titles I and II shall take effect on the date that is 1 year after the date of enactment of this Act.

    (c) EXTENSION OF EFFECTIVE DATE FOR STATE LAW AMENDMENT- In the case of a State plan under title XIX of the Social Security Act that the Secretary of Health and Human Services determines requires State legislation in order for the plan to meet the additional requirements imposed by the amendments made in section 201 of this Act, the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet these additional requirements before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of the session is considered to be a separate regular session of the State legislature.