Title I, SEC. 1012. TREATMENT OF CERTAIN FAMILIES. (a) Treatment of Medicare-Eligible Individuals Who are Qualified Employees or Spouses of Qualified Employees. (1) In general. Except as specifically provided, in the case of an individual who is an individual described in paragraph (2) with respect to 2 consecutive months in a year (and it is anticipated would be in the following month), the individual shall not be treated as a medicare-eligible individual under this Act during the following month and the remainder of the year. (2) Individual described. An individual described in this paragraph with respect to a month is a medicare-eligible individual (determined without regard to paragraph (1)) who is a qualifying employee or the spouse or family member of a qualifying employee in the month. (3) Exception. Paragraph (1) shall not apply, in the case of an individual, if the individual described in paragraph (2) terminates qualifying employment in the month preceding the first month in which paragraph (1) applies. The previous sentence shall apply until with respect to qualifying employment occurring before such first month. (b) Separate Treatment for Certain Groups of Individuals. In the case of a family that includes one or more individuals in a group described in subsection (c) (1) all the individuals in each such group within the family shall be treated as a separate family, and (2) all the individuals not described in any such group shall be treated collectively as a separate family. (c) Groups of Individuals Described. Each of the following is a group of individuals described in this subsection: (1) AFDC recipients (as defined in section 1902(3)). (2) Disabled SSI recipients (as defined in section 1902(13)) . (3) SSI recipients who are not disabled SSI recipients. (4) Electing veterans (as defined in subsection (d)(1)). (5) Active duty military personnel (as defined in subsection (d)(2)). (6) Electing Indians (as defined in subsection (d)(3)). (7) Prisoners (as defined in section 1902(26)). (d) Special Rules. In this Act: (1) Electing veterans. (A) Defined. Subject to subparagraph (B), the term ``electing veteran'' means a veteran who makes an election to enroll with a health plan of the Department of Veterans Affairs under chapter 18 of title 38, United States Code. (B) Family exception. Subparagraph (A) shall not apply with respect to coverage under a health plan referred to in such subparagraph if, for the area in which the electing veteran resides, such health plan offers coverage to family members of an electing veteran and the veteran elects family enrollment under such plan (instead of individual enrollment). (2) Active duty military personnel. (A) In general. Subject to subparagraph (B), the term ``active duty military personnel'' means an individual on active duty in the Uniformed Services of the United States. (B) Exception. If an individual described in subparagraph (A) elects family coverage under section 1073a(d)(1) of title 10, United States Code, then paragraph (5) of subsection (c) shall not apply with respect to such coverage. (3) Electing indians. (A) In general. Subject to subparagraph (B), the term ``electing Indian'' means an eligible individual who makes an election under section 8302(b) of this Act. (B) Family election for all individuals eligible to elect. No such election shall be made with respect to an individual in a family (as defined without regard to this section) unless such election is made for all eligible individuals (described in section 8302(a)) who are family members of the family. (4) Multiple choice. Eligible individuals who are permitted to elect coverage under more than one health plan or program referred to in this subsection may elect which of such plans or programs will be the applicable health plan under this Act. (e) Qualifying Students. (1) In general. In the case of a qualifying student (described in paragraph (2)), the individual may elect to enroll in a regional alliance health plan offered by the regional alliance for the area in which the school is located. (2) Qualifying student. In paragraph (1), the term ``qualifying student'' means an individual who (A) but for this subsection would receive coverage under a health plan as a child of another person, and (B) is a full-time student at a school in an alliance area that is different from the alliance area (or, in the case of a corporate alliance, such coverage area as the Board may specify) providing the coverage described in subparagraph (A). (3) Payment rules. (A) Continued treatment as family. Except as provided in subparagraph (B), nothing in this subsection shall be construed as affecting the payment liabilities between families and health alliances or between health alliances and health plans. (B) Transfer payment. In the case of an election under paragraph (1), the health plan described in paragraph (2)(A) shall make payment to the health plan referred to in paragraph (1) in accordance with rules specified by the Board. (f) Spouses Living in Different Alliance Areas. The Board shall provide for such special rules in applying this Act in the case of a couple in which the spouses reside in different alliance areas as the Board finds appropriate.