42 U.S.C. § 1395t — Federal Supplementary Medical Insurance Trust Fund

(a) Creation; deposits; fund transfers. The Treasury of the United States must keep a trust fund called the “Federal Supplementary Medical Insurance Trust Fund.” This section calls it the “Trust Fund.” The Trust Fund consists of: - Gifts and bequests made under section 401(i)(1) of this title; - Amounts deposited in, or appropriated to, the Trust Fund under this part or section 9008(c) of the Patient Protection and Affordable Care Act of 2009; and - Amounts deposited in, or appropriated to, the Medicare Prescription Drug Account established by section 1395w–116 of this title, or the Transitional Assistance Account established by section 1395w–141(k)(1) of this title. (b) Board of Trustees; composition; meetings; duties. This section creates a Board of Trustees for the Trust Fund. The Board consists of the Commissioner of Social Security, the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services. They serve because of their offices. It also consists of two members of the public. The two public members may not both be from the same political party. The President nominates those members for four-year terms, and the Senate must confirm them. If a public member is nominated and confirmed to fill a vacancy during a term, that person is nominated and confirmed only for the rest of that term. A public member whose term ends may continue serving until whichever happens first: the member’s successor takes office, or the Board first issues a report under paragraph (2) after the term ends. The Secretary of the Treasury is the Board’s Managing Trustee. The Administrator of the Centers for Medicare & Medicaid Services is the Board’s Secretary. The Board must meet at least once in each calendar year. The Board must: (1) Hold the Trust Fund. (2) Report to Congress by April 1 of each year on how the Trust Fund operated and its status during the previous fiscal year. The report must also address its expected operation and status during the current fiscal year and the next two fiscal years. Beginning with the 2005 report, each report under paragraph (2) must include the information specified in section 801(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. (3) Report to Congress immediately whenever the Board believes that the amount in the Trust Fund is too small. (4) Review the general policies used to manage the Trust Fund. The Board must recommend policy changes, including needed changes to the laws governing how the Trust Fund is managed. The report required by paragraph (2) must include: - A statement of the Trust Fund’s assets and the payments made from it during the previous fiscal year; - An estimate of the income expected to go into the Trust Fund and the payments expected to come out during the current fiscal year and each of the next two fiscal years; and - A statement of the Trust Fund’s actuarial status. The report must also include an actuarial opinion from the Chief Actuary of the Centers for Medicare & Medicaid Services. The opinion must certify that the techniques and methods used are generally accepted in the actuarial profession and that the assumptions and cost estimates used are reasonable. The report must be printed as a House document for the session of Congress to which it is submitted. A person serving on the Board is not considered a fiduciary and is not personally liable for actions taken in that capacity concerning the Trust Fund. This section does not define the terms “actuarial,” “fiduciary,” or “political party.” (c) Investment of Trust Fund by Managing Trustee. The Managing Trustee must invest the part of the Trust Fund that, in the Trustee’s judgment, is not needed for current withdrawals. The Trustee may invest only in interest-bearing obligations of the United States or obligations for which the United States guarantees both principal and interest. For this purpose, the Trustee may acquire obligations: (1) When they are first issued, at the issue price; or (2) By buying outstanding obligations at the market price. The purposes for which the United States may issue obligations under chapter 31 of title 31 are expanded to allow the United States to issue public-debt obligations at par for the Trust Fund to buy. Those obligations must have maturity dates set with proper regard for the Trust Fund’s needs. They must bear interest at a rate equal to the average market yield on all marketable, interest-bearing United States obligations that are then part of the public debt and are not due or callable until after four years from the end of the calendar month immediately before the obligations are issued. The Managing Trustee must compute that average market yield from market quotations as of the end of that preceding calendar month. If the average market yield is not a multiple of one-eighth of one percent, the interest rate must be the nearest multiple of one-eighth of one percent. The Managing Trustee may buy other interest-bearing United States obligations, or obligations guaranteed by the United States as to both principal and interest, either when they are first issued or at market price, only if the Trustee determines that buying them is in the public interest. This section does not define “public interest,” “market price,” or “market yield.” (d) Authority of Managing Trustee to sell obligations. The Managing Trustee may sell at market price any obligation acquired by the Trust Fund, except a public-debt obligation issued exclusively to the Trust Fund. The Trustee may redeem such an exclusively issued public-debt obligation at par plus interest that has accrued. (e) Interest on or proceeds from sale or redemption of obligations. Interest on obligations held in the Trust Fund, and money received from selling or redeeming those obligations, must be credited to the Trust Fund and become part of it. (f) Transfers to other Funds. At regular intervals, but at least once each fiscal year, amounts must be transferred to the Trust Fund from the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund. Each transferred amount must equal amounts not previously transferred that the Secretary of Health and Human Services has certified as overpayments under section 1395gg(b) of this title. This does not include amounts certified to the Railroad Retirement Board. At regular intervals, but at least once each fiscal year, amounts must also be transferred to the Trust Fund from the Railroad Retirement Account. Each amount must equal amounts not previously transferred that the Secretary of Health and Human Services has certified as overpayments to the Railroad Retirement Board under section 1395gg(b) of this title. (g) Payments from Trust Fund of amounts provided for by this part or with respect to administrative expenses. From time to time, the Managing Trustee must pay from the Trust Fund the amounts that the Secretary of Health and Human Services certifies are needed to make payments provided for by this part. The Managing Trustee must also pay amounts for administrative expenses as provided in section 401(g)(1) of this title. Payments provided for under part D must be made from the Medicare Prescription Drug Account in the Trust Fund, except for payments under section 1395w–141(k)(2) of this title. Payments under section 1395w–141(k)(2) must be made from the Transitional Assistance Account in the Trust Fund. (h) Payments from Trust Fund of costs incurred by Director of Office of Personnel Management. From time to time, the Managing Trustee must pay from the Trust Fund the amounts that the Secretary of Health and Human Services certifies are needed to pay costs incurred by the Director of the Office of Personnel Management in making deductions under section 1395s(d), section 1395w–113(c)(1), or section 1395w–24(d)(2)(A) of this title. When the costs arise from deductions under section 1395w–113(c)(1) or section 1395w–24(d)(2)(A), the proper part of the payment must come from the Medicare Prescription Drug Account in the Trust Fund. During each fiscal year, or after it ends, the Director of the Office of Personnel Management must certify to the Secretary the amount of costs incurred in making those deductions. That certified amount is the basis for the amount of those costs that the Secretary certifies to the Managing Trustee. (i) Payments from Trust Fund of costs incurred by Railroad Retirement Board. From time to time, the Managing Trustee must pay from the Trust Fund the amounts that the Secretary of Health and Human Services certifies are needed to pay costs incurred by the Railroad Retirement Board for services performed under section 1395s(b)(1), section 1395u(g), section 1395w–113(c)(1), and section 1395w–24(d)(2)(A) of this title. When the costs arise from services under section 1395w–113(c)(1) or section 1395w–24(d)(2)(A), the proper part of the payment must come from the Medicare Prescription Drug Account in the Trust Fund. During each fiscal year, or after it ends, the Railroad Retirement Board must certify to the Secretary the amount of costs it incurred in performing those services. That certified amount is the basis for the amount of those costs that the Secretary certifies to the Managing Trustee. This section does not define “fiscal year,” “administrative expenses,” “overpayments,” or “current withdrawals.”