In general, the premiums charged by health insurance companies represent actuarial estimates of the amount that would be required to cover three main components: (1) the expected cost of the health benefits covered under the plan, (2) the business administrative costs of operating the plan, and (3) a profit. The final premium calculation often is adjusted upward or downward to reflect several factors, such as making up for a previous financial loss. Health insurance premiums have been trending up, while the value of coverage has trended down.

Congress in recent years passed a number of bills intended in part to jump-start a recovery in the labor market from the recession that began in December 2007. Policymakers are interested in how employment has responded to stimulus measures to determine how effective the legislation has been and to decide whether additional job creation legislation is warranted.

Pay increases for current federal employees and cost-of-living adjustments (COLAs) for retired federal employees often differ because they are based on changes in different economic variables. Increases in pay for civilian federal workers are indexed to wage and salary increases in the private sector, as measured by the Employment Cost Index (ECI), whereas federal retirement and disability benefits are indexed to price increases as measured by the Consumer Price Index (CPI). Both the ECI and the CPI are calculated by the Bureau of Labor Statistics of the U.S. Department of Labor.

On November 7, 2009, the U.S. House of Representatives approved health insurance reform legislation, H.R. 3962, the Affordable Health Care for America Act. The "Senate Amendment" (S.Amdt. 2786 to H.R. 3590, the Patient Protection and Affordable Care Act) was offered by Senate Majority Leader Harry Reid on November 21, 2009. This report compares the private health insurance provisions of H.R. 3962 and the Senate Amendment. Individuals currently receiving health insurance through a large employer would likely see the least direct impact from the bills.

This report summarizes key provisions affecting private health insurance in S. 1796, America's Healthy Future Act of 2009, as ordered reported by the Senate Committee on Finance on October 19, 2009. Title I of the bill imposes new requirements on individuals, employers, and health plans; restructures the private health insurance market; sets minimum standards for health benefits; and provides financial assistance to certain individuals and, in some cases, small employers. Title VI of the bill include a number of new provisions to raise revenues to pay for health care reform.