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H.R.3103
TITLE I--HEALTH CARE
ACCESS, PORTABILITY, AND RENEWABILITY
Subtitle A--Group Market
Rules
Part 1--Portability, Access, and Renewability Requirements
SEC. 101. THROUGH THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974.
(a) IN GENERAL- Subtitle
B of title I of the Employee Retirement Income Security Act of 1974 is
amended by adding at the end the following new part:
`Part 7--Group Health Plan Portability, Access, and Renewability
Requirements
`SEC. 701. INCREASED PORTABILITY THROUGH LIMITATION ON PREEXISTING
CONDITION EXCLUSIONS.
`(a) LIMITATION ON
PREEXISTING CONDITION EXCLUSION PERIOD; CREDITING FOR PERIODS OF
PREVIOUS COVERAGE- Subject to subsection (d), a group health plan, and a
health insurance issuer offering group health insurance coverage, may,
with respect to a participant or beneficiary, impose a preexisting
condition exclusion only if--
`(1) such exclusion
relates to a condition (whether physical or mental), regardless of the
cause of the condition, for which medical advice, diagnosis, care, or
treatment was recommended or received within the 6-month period ending
on the enrollment date;
`(2) such exclusion
extends for a period of not more than 12 months (or 18 months in the
case of a late enrollee) after the enrollment date; and
`(3) the period of any
such preexisting condition exclusion is reduced by the aggregate of the
periods of creditable coverage (if any, as defined in subsection (c)(1))
applicable to the participant or beneficiary as of the enrollment date.
`(b) DEFINITIONS- For
purposes of this part--
`(1) PREEXISTING
CONDITION EXCLUSION-
`(A) IN GENERAL- The
term `preexisting condition exclusion' means, with respect to coverage,
a limitation or exclusion of benefits relating to a condition based on
the fact that the condition was present before the date of enrollment
for such coverage, whether or not any medical advice, diagnosis, care,
or treatment was recommended or received before such date.
`(B) TREATMENT OF
GENETIC INFORMATION- Genetic information shall not be treated as a
condition described in subsection (a)(1) in the absence of a diagnosis
of the condition related to such information.
`(2) ENROLLMENT DATE-
The term `enrollment date' means, with respect to an individual covered
under a group health plan or health insurance coverage, the date of
enrollment of the individual in the plan or coverage or, if earlier, the
first day of the waiting period for such enrollment.
`(3) LATE ENROLLEE- The
term `late enrollee' means, with respect to coverage under a group
health plan, a participant or beneficiary who enrolls under the plan
other than during--
`(A) the first period
in which the individual is eligible to enroll under the plan, or
`(B) a special
enrollment period under subsection (f).
`(4) WAITING PERIOD- The
term `waiting period' means, with respect to a group health plan and an
individual who is a potential participant or beneficiary in the plan,
the period that must pass with respect to the individual before the
individual is eligible to be covered for benefits under the terms of the
plan.
`(c) RULES RELATING TO
CREDITING PREVIOUS COVERAGE-
`(1) CREDITABLE COVERAGE
DEFINED- For purposes of this part, the term `creditable coverage'
means, with respect to an individual, coverage of the individual under
any of the following:
`(A) A group health
plan.
`(B) Health insurance
coverage.
`(C) Part A or part B
of title XVIII of the Social Security Act.
`(D) Title XIX of the
Social Security Act, other than coverage consisting solely of benefits
under section 1928.
`(E) Chapter 55 of
title 10, United States Code.
`(F) A medical care
program of the Indian Health Service or of a tribal organization.
`(G) A State health
benefits risk pool.
`(H) A health plan
offered under chapter 89 of title 5, United States Code.
`(I) A public health
plan (as defined in regulations).
`(J) A health benefit
plan under section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)).
Such term does not
include coverage consisting solely of coverage of excepted benefits (as
defined in section 706(c)).
`(2) NOT COUNTING
PERIODS BEFORE SIGNIFICANT BREAKS IN COVERAGE-
`(A) IN GENERAL- A
period of creditable coverage shall not be counted, with respect to
enrollment of an individual under a group health plan, if, after such
period and before the enrollment date, there was a 63-day period during
all of which the individual was not covered under any creditable
coverage.
`(B) WAITING PERIOD NOT
TREATED AS A BREAK IN COVERAGE- For purposes of subparagraph (A) and
subsection (d)(4), any period that an individual is in a waiting period
for any coverage under a group health plan (or for group health
insurance coverage) or is in an affiliation period (as defined in
subsection (g)(2)) shall not be taken into account in determining the
continuous period under subparagraph (A).
`(3) METHOD OF CREDITING
COVERAGE-
`(A) STANDARD METHOD-
Except as otherwise provided under subparagraph (B), for purposes of
applying subsection (a)(3), a group health plan, and a health insurance
issuer offering group health insurance coverage, shall count a period of
creditable coverage without regard to the specific benefits covered
during the period.
`(B) ELECTION OF
ALTERNATIVE METHOD- A group health plan, or a health insurance issuer
offering group health insurance coverage, may elect to apply subsection
(a)(3) based on coverage of benefits within each of several classes or
categories of benefits specified in regulations rather than as provided
under subparagraph (A). Such election shall be made on a uniform basis
for all participants and beneficiaries. Under such election a group
health plan or issuer shall count a period of creditable coverage with
respect to any class or category of benefits if any level of benefits is
covered within such class or category.
`(C) PLAN NOTICE- In
the case of an election with respect to a group health plan under
subparagraph (B) (whether or not health insurance coverage is provided
in connection with such plan), the plan shall--
`(i) prominently state
in any disclosure statements concerning the plan, and state to each
enrollee at the time of enrollment under the plan, that the plan has
made such election, and
`(ii) include in such
statements a description of the effect of this election.
`(4) ESTABLISHMENT OF
PERIOD- Periods of creditable coverage with respect to an individual
shall be established through presentation of certifications described in
subsection (e) or in such other manner as may be specified in
regulations.
`(d) EXCEPTIONS-
`(1) EXCLUSION NOT
APPLICABLE TO CERTAIN NEWBORNS- Subject to paragraph (4), a group health
plan, and a health insurance issuer offering group health insurance
coverage, may not impose any preexisting condition exclusion in the case
of an individual who, as of the last day of the 30-day period beginning
with the date of birth, is covered under creditable coverage.
`(2) EXCLUSION NOT
APPLICABLE TO CERTAIN ADOPTED CHILDREN- Subject to paragraph (4), a
group health plan, and a health insurance issuer offering group health
insurance coverage, may not impose any preexisting condition exclusion
in the case of a child who is adopted or placed for adoption before
attaining 18 years of age and who, as of the last day of the 30-day
period beginning on the date of the adoption or placement for adoption,
is covered under creditable coverage. The previous sentence shall not
apply to coverage before the date of such adoption or placement for
adoption.
`(3) EXCLUSION NOT
APPLICABLE TO PREGNANCY- A group health plan, and health insurance
issuer offering group health insurance coverage, may not impose any
preexisting condition exclusion relating to pregnancy as a preexisting
condition.
`(4) LOSS IF BREAK IN
COVERAGE- Paragraphs (1) and (2) shall no longer apply to an individual
after the end of the first 63-day period during all of which the
individual was not covered under any creditable coverage.
`(e) CERTIFICATIONS AND
DISCLOSURE OF COVERAGE-
`(1) REQUIREMENT FOR
CERTIFICATION OF PERIOD OF CREDITABLE COVERAGE-
`(A) IN GENERAL- A
group health plan, and a health insurance issuer offering group health
insurance
coverage, shall provide the certification described in subparagraph
(B)--
`(i) at the time an
individual ceases to be covered under the plan or otherwise becomes
covered under a COBRA continuation provision,
`(ii) in the case of an
individual becoming covered under such a provision, at the time the
individual ceases to be covered under such provision, and
`(iii) on the request
on behalf of an individual made not later than 24 months after the date
of cessation of the coverage described in clause (i) or (ii), whichever
is later.
The certification under
clause (i) may be provided, to the extent practicable, at a time
consistent with notices required under any applicable COBRA continuation
provision.
`(B) CERTIFICATION- The
certification described in this subparagraph is a written certification
of--
`(i) the period of
creditable coverage of the individual under such plan and the coverage
(if any) under such COBRA continuation provision, and
`(ii) the waiting
period (if any) (and affiliation period, if applicable) imposed with
respect to the individual for any coverage under such plan.
`(C) ISSUER COMPLIANCE-
To the extent that medical care under a group health plan consists of
group health insurance coverage, the plan is deemed to have satisfied
the certification requirement under this paragraph if the health
insurance issuer offering the coverage provides for such certification
in accordance with this paragraph.
`(2) DISCLOSURE OF
INFORMATION ON PREVIOUS BENEFITS- In the case of an election described
in subsection (c)(3)(B) by a group health plan or health insurance
issuer, if the plan or issuer enrolls an individual for coverage under
the plan and the individual provides a certification of coverage of the
individual under paragraph (1)--
`(A) upon request of
such plan or issuer, the entity which issued the certification provided
by the individual shall promptly disclose to such requesting plan or
issuer information on coverage of classes and categories of health
benefits available under such entity's plan or coverage, and
`(B) such entity may
charge the requesting plan or issuer for the reasonable cost of
disclosing such information.
`(3) REGULATIONS- The
Secretary shall establish rules to prevent an entity's failure to
provide information under paragraph (1) or (2) with respect to previous
coverage of an individual from adversely affecting any subsequent
coverage of the individual under another group health plan or health
insurance coverage.
`(f) SPECIAL ENROLLMENT
PERIODS-
`(1) INDIVIDUALS LOSING
OTHER COVERAGE- A group health plan, and a health insurance issuer
offering group health insurance coverage in connection with a group
health plan, shall permit an employee who is eligible, but not enrolled,
for coverage under the terms of the plan (or a dependent of such an
employee if the dependent is eligible, but not enrolled, for coverage
under such terms) to enroll for coverage under the terms of the plan if
each of the following conditions is met:
`(A) The employee or
dependent was covered under a group health plan or had health insurance
coverage at the time coverage was previously offered to the employee or
dependent.
`(B) The employee
stated in writing at such time that coverage under a group health plan
or health insurance coverage was the reason for declining enrollment,
but only if the plan sponsor or issuer (if applicable) required such a
statement at such time and provided the employee with notice of such
requirement (and the consequences of such requirement) at such time.
`(C) The employee's or
dependent's coverage described in subparagraph (A)--
`(i) was under a COBRA
continuation provision and the coverage under such provision was
exhausted; or
`(ii) was not under
such a provision and either the coverage was terminated as a result of
loss of eligibility for the coverage (including as a result of legal
separation, divorce, death, termination of employment, or reduction in
the number of hours of employment) or employer contributions toward such
coverage were terminated.
`(D) Under the terms of
the plan, the employee requests such enrollment not later than 30 days
after the date of exhaustion of coverage described in subparagraph (C)(i)
or termination of coverage or employer contribution described in
subparagraph (C)(ii).
`(2) FOR DEPENDENT
BENEFICIARIES-
`(A) IN GENERAL- If--
`(i) a group health
plan makes coverage available with respect to a dependent of an
individual,
`(ii) the individual is
a participant under the plan (or has met any waiting period applicable
to becoming a participant under the plan and is eligible to be enrolled
under the plan but for a failure to enroll during a previous enrollment
period), and
`(iii) a person becomes
such a dependent of the individual through marriage, birth, or adoption
or placement for adoption,
the group health plan
shall provide for a dependent special enrollment period described in
subparagraph (B) during which the person (or, if not otherwise enrolled,
the individual) may be enrolled under the plan as a dependent of the
individual, and in the case of the birth or adoption of a child, the
spouse of the individual may be enrolled as a dependent of the
individual if such spouse is otherwise eligible for coverage.
`(B) DEPENDENT SPECIAL
ENROLLMENT PERIOD- A dependent special enrollment period under this
subparagraph shall be a period of not less than 30 days and shall begin
on the later of--
`(i) the date dependent
coverage is made available, or
`(ii) the date of the
marriage, birth, or adoption or placement for adoption (as the case may
be) described in subparagraph (A)(iii).
`(C) NO WAITING PERIOD-
If an individual seeks to enroll a dependent during the first 30 days of
such a dependent special enrollment period, the coverage of the
dependent shall become effective--
`(i) in the case of
marriage, not later than the first day of the first month beginning
after the date the completed request for enrollment is received;
`(ii) in the case of a
dependent's birth, as of the date of such birth; or
`(iii) in the case of a
dependent's adoption or placement for adoption, the date of such
adoption or placement for adoption.
`(g) USE OF AFFILIATION
PERIOD BY HMOS AS ALTERNATIVE TO PREEXISTING CONDITION EXCLUSION-
`(1) IN GENERAL- In the
case of a group health plan that offers medical care through health
insurance coverage offered by a health maintenance organization, the
plan may provide for an affiliation period with respect to coverage
through the organization only if--
`(A) no preexisting
condition exclusion is imposed with respect to coverage through the
organization,
`(B) the period is
applied uniformly without regard to any health status-related factors,
and
`(C) such period does
not exceed 2 months (or 3 months in the case of a late enrollee).
`(2) AFFILIATION PERIOD-
`(A) DEFINED- For
purposes of this part, the term `affiliation period' means a period
which, under the terms of the health insurance coverage offered by the
health maintenance organization, must expire before the health insurance
coverage becomes effective. The organization is not required to provide
health care services or benefits during such period and no premium shall
be charged to the participant or beneficiary for any coverage during the
period.
`(B) BEGINNING- Such
period shall begin on the enrollment date.
`(C) RUNS CONCURRENTLY
WITH WAITING PERIODS- An affiliation period under a plan shall run
concurrently with any waiting period under the plan.
`(3) ALTERNATIVE
METHODS- A health maintenance organization described in paragraph (1)
may use alternative methods, from those described in such paragraph, to
address adverse selection as approved by the State insurance
commissioner or official or officials designated by the State to enforce
the requirements of part A of title XXVII of the Public Health Service
Act for the State involved with respect to such issuer.
`SEC. 702. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS
AND BENEFICIARIES BASED ON HEALTH STATUS.
`(a) IN ELIGIBILITY TO
ENROLL-
`(1) IN GENERAL- Subject
to paragraph (2), a group health plan, and a health insurance issuer
offering group health insurance coverage in connection with a group
health plan, may not establish rules for eligibility (including
continued eligibility) of any individual to enroll under the terms of
the plan based on any of the following health status-related factors in
relation to the individual or a dependent of the individual:
`(A) Health status.
`(B) Medical condition
(including both physical and mental illnesses).
`(C) Claims experience.
`(D) Receipt of health
care.
`(E) Medical history.
`(F) Genetic
information.
`(G) Evidence of
insurability (including conditions arising out of acts of domestic
violence).
`(H) Disability.
`(2) NO APPLICATION TO
BENEFITS OR EXCLUSIONS- To the extent consistent with section 701,
paragraph (1) shall not be construed--
`(A) to require a group
health plan, or group health insurance coverage, to provide particular
benefits other than those provided under the terms of such plan or
coverage, or
`(B) to prevent such a
plan or coverage from establishing limitations or restrictions on the
amount, level, extent, or nature of the benefits or coverage for
similarly situated individuals enrolled in the plan or coverage.
`(3) CONSTRUCTION- For
purposes of paragraph (1), rules for eligibility to enroll under a plan
include rules defining any applicable waiting periods for such
enrollment.
`(b) IN PREMIUM
CONTRIBUTIONS-
`(1) IN GENERAL- A group
health plan, and a health insurance issuer offering health insurance
coverage in connection with a group health plan, may not require any
individual (as a condition of enrollment or continued enrollment under
the plan) to pay a premium or contribution which is greater than such
premium or contribution for a similarly situated individual enrolled in
the plan on the basis of any health status-related factor in relation to
the individual or to an individual enrolled under the plan as a
dependent of the individual.
`(2) CONSTRUCTION-
Nothing in paragraph (1) shall be construed--
`(A) to restrict the
amount that an employer may be charged for coverage under a group health
plan; or
`(B) to prevent a group
health plan, and a health insurance issuer offering group health
insurance coverage, from establishing premium discounts or rebates or
modifying otherwise applicable copayments or deductibles in return for
adherence to programs of health promotion and disease prevention.
`SEC. 703. GUARANTEED RENEWABILITY IN MULTIEMPLOYER PLANS AND
MULTIPLE EMPLOYER WELFARE ARRANGEMENTS.
`A group health plan
which is a multiemployer plan or which is a multiple employer welfare
arrangement may not deny an employer whose employees are covered under
such a plan continued access to the same or different coverage under the
terms of such a plan, other than--
`(1) for nonpayment of
contributions;
`(2) for fraud or other
intentional misrepresentation of material fact by the employer;
`(3) for noncompliance
with material plan provisions;
`(4) because the plan is
ceasing to offer any coverage in a geographic area;
`(5) in the case of a
plan that offers benefits through a network plan, there is no longer any
individual enrolled through the employer who lives, resides, or works in
the service area of the network plan and the plan applies this paragraph
uniformly without regard to the claims experience of employers or any
health status-related factor in relation to such individuals or their
dependents; and
`(6) for failure to meet
the terms of an applicable collective bargaining agreement, to renew a
collective bargaining or other agreement requiring or authorizing
contributions to the plan, or to employ employees covered by such an
agreement.
`SEC. 704. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.
`(a) CONTINUED
APPLICABILITY OF STATE LAW WITH RESPECT TO HEALTH INSURANCE ISSUERS-
`(1) IN GENERAL- Subject
to paragraph (2) and except as provided in subsection (b), this part
shall not be construed to supersede any provision of State law which
establishes, implements, or continues in effect any standard or
requirement solely relating to health insurance issuers in connection
with group health insurance coverage except to the extent that such
standard or requirement prevents the application of a requirement of
this part.
`(2) CONTINUED
PREEMPTION WITH RESPECT TO GROUP HEALTH PLANS- Nothing in this part
shall be construed to affect or modify the provisions of section 514
with respect to group health plans.
`(b) SPECIAL RULES IN
CASE OF PORTABILITY REQUIREMENTS-
`(1) IN GENERAL- Subject
to paragraph (2), the provisions of this part relating to health
insurance coverage offered by a health insurance issuer supersede any
provision of State law which establishes, implements, or continues in
effect a standard or requirement applicable to imposition of a
preexisting condition exclusion specifically governed by section 701
which differs from the standards or requirements specified in such
section.
`(2) EXCEPTIONS- Only in
relation to health insurance coverage offered by a health insurance
issuer, the provisions of this part do not supersede any provision of
State law to the extent that such provision--
`(A) substitutes for
the reference to `6-month period' in section 701(a)(1) a reference to
any shorter period of time;
`(B) substitutes for
the reference to `12 months' and `18 months' in section 701(a)(2) a
reference to any shorter period of time;
`(C) substitutes for
the references to `63 days' in sections 701 (c)(2)(A) and (d)(4)(A) a
reference to any greater number of days;
`(D) substitutes for
the reference to `30-day period' in sections 701 (b)(2) and (d)(1) a
reference to any greater period;
`(E) prohibits the
imposition of any preexisting condition exclusion in cases not described
in section 701(d) or expands the exceptions described in such section;
`(F) requires special
enrollment periods in addition to those required under section 701(f);
or
`(G) reduces the
maximum period permitted in an affiliation period under section
701(g)(1)(B).
`(c) RULES OF
CONSTRUCTION- Nothing in this part shall be construed as requiring a
group health plan or health insurance coverage to provide specific
benefits under the terms of such plan or coverage.
`(d) DEFINITIONS- For
purposes of this section--
`(1) STATE LAW- The term
`State law' includes all laws, decisions, rules, regulations, or other
State action having the effect of law, of any State. A law of the United
States applicable only to the District of Columbia shall be treated as a
State law rather than a law of the United States.
`(2) STATE- The term
`State' includes a State, the Northern Mariana Islands, any political
subdivisions of a State or such Islands, or any agency or
instrumentality of either.
`SEC. 705. SPECIAL RULES RELATING TO GROUP HEALTH PLANS.
`(a) GENERAL EXCEPTION
FOR CERTAIN SMALL GROUP HEALTH PLANS- The requirements of this part
shall not apply to any group health plan (and group health insurance
coverage offered in connection with a group health plan) for any plan
year if, on the first day of such plan year, such plan has less than 2
participants who are current employees.
`(b) EXCEPTION FOR
CERTAIN BENEFITS- The requirements of this part shall not apply to any
group health plan (and group health insurance coverage) in relation to
its provision of excepted benefits described in section 706(c)(1).
`(c) EXCEPTION FOR
CERTAIN BENEFITS IF CERTAIN CONDITIONS MET-
`(1) LIMITED, EXCEPTED
BENEFITS- The requirements of this part shall not apply to any group
health plan (and group health insurance coverage offered in connection
with a group health plan) in relation to its provision of excepted
benefits described in section 706(c)(2) if the benefits--
`(A) are provided under
a separate policy, certificate, or contract of insurance; or
`(B) are otherwise not
an integral part of the plan.
`(2) NONCOORDINATED,
EXCEPTED BENEFITS- The requirements of this part shall not apply to any
group health plan (and group health insurance coverage offered in
connection with a group health plan) in relation to its provision of
excepted benefits described in section 706(c)(3) if all of the following
conditions are met:
`(A) The benefits are
provided under a separate policy, certificate, or contract of insurance.
`(B) There is no
coordination between the provision of such benefits and any exclusion of
benefits under any group health plan maintained by the same plan
sponsor.
`(C) Such benefits are
paid with respect to an event without regard to whether benefits are
provided with respect to such an event under any group health plan
maintained by the same plan sponsor.
`(3) SUPPLEMENTAL
EXCEPTED BENEFITS- The requirements of this part shall not apply to any
group health plan (and group health insurance coverage) in relation to
its provision of excepted benefits described in section 706(c)(4) if the
benefits are provided under a separate policy, certificate, or contract
of insurance.
`(d) TREATMENT OF
PARTNERSHIPS- For purposes of this part--
`(1) TREATMENT AS A
GROUP HEALTH PLAN- Any plan, fund, or program which would not be (but
for this subsection) an employee welfare benefit plan and which is
established or maintained by a partnership, to the extent that such
plan, fund, or program provides medical care (including items and
services paid for as medical care) to present or former partners in the
partnership or to their dependents (as defined under the terms of the
plan, fund, or program), directly or through insurance, reimbursement,
or otherwise, shall be treated (subject to paragraph (2)) as an employee
welfare benefit plan which is a group health plan.
`(2) EMPLOYER- In the
case of a group health plan, the term `employer' also includes the
partnership in relation to any partner.
`(3) PARTICIPANTS OF
GROUP HEALTH PLANS- In the case of a group health plan, the term
`participant' also includes--
`(A) in connection with
a group health plan maintained by a partnership, an individual who is a
partner in relation to the partnership, or
`(B) in connection with
a group health plan maintained by a self-employed individual (under
which one or more employees are participants), the self-employed
individual,
if such individual is,
or may become, eligible to receive a benefit under the plan or such
individual's beneficiaries may be eligible to receive any such benefit.
`SEC. 706. DEFINITIONS.
`(a) GROUP HEALTH PLAN-
For purposes of this part--
`(1) IN GENERAL- The
term `group health plan' means an employee welfare benefit plan to the
extent that the plan provides medical care (as defined in paragraph (2)
and including items and services paid for as medical care) to employees
or their dependents (as defined under the terms of the plan) directly or
through insurance, reimbursement, or otherwise.
`(2) MEDICAL CARE- The
term `medical care' means amounts paid for--
`(A) the diagnosis,
cure, mitigation, treatment, or prevention of disease, or amounts paid
for the purpose of affecting any structure or function of the body,
`(B) amounts paid for
transportation primarily for and essential to medical care referred to
in subparagraph (A), and
`(C) amounts paid for
insurance covering medical care referred to in subparagraphs (A) and
(B).
`(b) DEFINITIONS
RELATING TO HEALTH INSURANCE- For purposes of this part--
`(1) HEALTH INSURANCE
COVERAGE- The term `health insurance coverage' means benefits consisting
of medical care (provided directly, through insurance or reimbursement,
or otherwise and including items and services paid for as medical care)
under any hospital or medical service policy or certificate, hospital or
medical service plan contract, or health maintenance organization
contract offered by a health insurance issuer.
`(2) HEALTH INSURANCE
ISSUER- The term `health insurance issuer' means an insurance company,
insurance service, or insurance organization (including a health
maintenance organization, as defined in paragraph (3)) which is licensed
to engage in the business of insurance in a State and which is subject
to State law which regulates insurance (within the meaning of section
514(b)(2)). Such term does not include a group health plan.
`(3) HEALTH MAINTENANCE
ORGANIZATION- The term `health maintenance organization' means--
`(A) a federally
qualified health maintenance organization (as defined in section 1301(a)
of the Public Health Service Act (42 U.S.C. 300e(a))),
`(B) an organization
recognized under State law as a health maintenance organization, or
`(C) a similar
organization regulated under State law for solvency in the same manner
and to the same extent as such a health maintenance organization.
`(4) GROUP HEALTH
INSURANCE COVERAGE- The term `group health insurance coverage' means, in
connection with a group health plan, health insurance coverage offered
in connection with such plan.
`(c) EXCEPTED BENEFITS-
For purposes of this part, the term `excepted benefits' means benefits
under one or more (or any combination thereof) of the following:
`(1) BENEFITS NOT
SUBJECT TO REQUIREMENTS-
`(A) Coverage only for
accident, or disability income insurance, or any combination thereof.
`(B) Coverage issued as
a supplement to liability insurance.
`(C) Liability
insurance, including general liability insurance and automobile
liability insurance.
`(D) Workers'
compensation or similar insurance.
`(E) Automobile medical
payment insurance.
`(F) Credit-only
insurance.
`(G) Coverage for
on-site medical clinics.
`(H) Other similar
insurance coverage, specified in regulations, under which benefits for
medical care are secondary or incidental to other insurance benefits.
`(2) BENEFITS NOT
SUBJECT TO REQUIREMENTS IF OFFERED SEPARATELY-
`(A) Limited scope
dental or vision benefits.
`(B) Benefits for
long-term care, nursing home care, home health care, community-based
care, or any combination thereof.
`(C) Such other
similar, limited benefits as are specified in regulations.
`(3) BENEFITS NOT
SUBJECT TO REQUIREMENTS IF OFFERED AS INDEPENDENT, NONCOORDINATED
BENEFITS-
`(A) Coverage only for
a specified disease or illness.
`(B) Hospital indemnity
or other fixed indemnity insurance.
`(4) BENEFITS NOT
SUBJECT TO REQUIREMENTS IF OFFERED AS SEPARATE INSURANCE POLICY-
Medicare supplemental health insurance (as defined under section
1882(g)(1) of the Social Security Act), coverage supplemental to the
coverage provided under chapter 55 of title 10, United States Code, and
similar supplemental coverage provided to coverage under a group health
plan.
`(d) OTHER DEFINITIONS-
For purposes of this part--
`(1) COBRA CONTINUATION
PROVISION- The term `COBRA continuation provision' means any of the
following:
`(A) Part 6 of this
subtitle.
`(B) Section 4980B of
the Internal Revenue Code of 1986, other than subsection (f)(1) of such
section insofar as it relates to pediatric vaccines.
`(C) Title XXII of the
Public Health Service Act.
`(2) HEALTH
STATUS-RELATED FACTOR- The term `health status-related factor' means any
of the factors described in section 702(a)(1).
`(3) NETWORK PLAN- The
term `network plan' means health insurance coverage offered by a health
insurance issuer under which the financing and delivery of medical care
(including items and services paid for as medical care) are provided, in
whole or in part, through a defined set of providers under contract with
the issuer.
`(4) PLACED FOR
ADOPTION- The term `placement', or being `placed', for adoption, has the
meaning given such term in section 609(c)(3)(B).
`SEC. 707. REGULATIONS.
`The Secretary,
consistent with section 104 of the Health Care Portability and
Accountability Act of 1996, may promulgate such regulations as may be
necessary or appropriate to carry out the provisions of this part. The
Secretary may promulgate any interim final rules as the Secretary
determines are appropriate to carry out this part.'.
(b) ENFORCEMENT WITH
RESPECT TO HEALTH INSURANCE ISSUERS- Section 502(b) of such Act (29
U.S.C. 1132(b)) is amended by adding at the end the following new
paragraph:
`(3) The Secretary is
not authorized to enforce under this part any requirement of part 7
against a health insurance issuer offering health insurance coverage in
connection with a group health plan (as defined in section 706(a)(1)).
Nothing in this paragraph shall affect the authority of the Secretary to
issue regulations to carry out such part.'.
(c) DISCLOSURE OF
INFORMATION TO PARTICIPANTS AND BENEFICIARIES-
(1) IN GENERAL- Section
104(b)(1) of such Act (29 U.S.C. 1024(b)(1)) is amended in the matter
following subpara-graph (B)--
(A) by striking
`102(a)(1),' and inserting `102(a)(1) (other than a material reduction
in covered services or benefits provided in the case of a group health
plan (as defined in section 706(a)(1))),'; and
(B) by adding at the
end the following new sentences: `If there is a modification or change
described in section 102(a)(1) that is a material reduction in covered
services or benefits provided under a group health plan (as defined in
section 706(a)(1)), a summary description of such modification or change
shall be furnished to participants and beneficiaries not later than 60
days after the date of the adoption of the modification or change. In
the alternative, the plan sponsors may provide such description at
regular intervals of not more than 90 days. The Secretary shall issue
regulations within 180 days after the date of enactment of the Health
Insurance Portability and Accountability Act of 1996, providing
alternative mechanisms to delivery by mail through which group health
plans (as so defined) may notify participants and beneficiaries of
material reductions in covered services or benefits.'.
(2) PLAN DESCRIPTION AND
SUMMARY- Section 102(b) of such Act (29 U.S.C. 1022(b)) is amended--
(A) by inserting `in
the case of a group health plan (as defined in section 706(a)(1)),
whether a health insurance issuer (as defined in section 706(b)(2)) is
responsible for the financing or administration (including payment of
claims) of the plan and (if so) the name and address of such issuer;'
after `type of administration of the plan;'; and
(B) by inserting
`including the office at the Department of Labor through which
participants and beneficiaries may seek assistance or information
regarding their rights under this Act and the Health Insurance
Portability and Accountability Act of 1996 with respect to health
benefits that are offered through a group health plan (as defined in
section 706(a)(1))' after `benefits under the plan'.
(d) TREATMENT OF HEALTH
INSURANCE ISSUERS OFFERING HEALTH INSURANCE COVERAGE TO NONCOVERED
PLANS- Section 4(b) of such Act (29 U.S.C. 1003(b)) is amended by adding
at the end (after and below paragraph (5)) the following:
`The provisions of part
7 of subtitle B shall not apply to a health insurance issuer (as defined
in section 706(b)(2)) solely by reason of health insurance coverage (as
defined in section 706(b)(1)) provided by such issuer in connection with
a group health plan (as defined in section 706(a)(1)) if the provisions
of this title do not apply to such group health plan.'.
(e) REPORTING AND
ENFORCEMENT WITH RESPECT TO CERTAIN ARRANGEMENTS-
(1) IN GENERAL- Section
101 of such Act (29 U.S.C. 1021) is amended--
(A) by redesignating
subsection (g) as subsection (h), and
(B) by inserting after
subsection (f) the following new subsection:
`(g) REPORTING BY
CERTAIN ARRANGEMENTS- The Secretary may, by regulation, require multiple
employer welfare arrangements providing benefits consisting of medical
care (within the meaning of section 706(a)(2)) which are not group
health plans to report, not more frequently than annually, in such form
and such manner as the Secretary may require for the purpose of
determining the extent to which the requirements of part 7 are being
carried out in connection with such benefits.'.
(2) ENFORCEMENT-
(A) IN GENERAL- Section
502 of such Act (29 U.S.C. 1132) is amended--
(i) in subsection
(a)(6), by striking `under subsection (c)(2) or (i) or (l)' and
inserting `under paragraph (2), (4), or (5) of subsection (c) or under
subsection (i) or (l)'; and
(ii) in the last 2
sentences of subsection (c), by striking `For purposes of this
paragraph' and all that follows through `The Secretary and' and
inserting the following:
`(5) The Secretary may
assess a civil penalty against any person of up to $1,000 a day from the
date of the person's failure or refusal to file the information required
to be filed by such person with the Secretary under regulations
prescribed pursuant to section 101(g).
`(6) The Secretary and'.
(B) TECHNICAL AND
CONFORMING AMENDMENT- Section 502(c)(1) of such Act (29 U.S.C.
1132(c)(1)) is amended by adding at the end the following sentence: `For
purposes of this paragraph, each violation described in subparagraph (A)
with respect to any single participant, and each violation described in
subparagraph (B) with respect to any single participant or beneficiary,
shall be treated as a separate violation.'.
(3) COORDINATION-
Section 506 of such Act (29 U.S.C. 1136) is amended by adding at the end
the following new subsection:
`(c) COORDINATION OF
ENFORCEMENT WITH STATES WITH RESPECT TO CERTAIN ARRANGEMENTS- A State
may enter into an agreement with the Secretary for delegation to the
State of some or all of the Secretary's authority under sections 502 and
504 to enforce the requirements under part 7 in connection with multiple
employer welfare arrangements, providing medical care (within the
meaning of section 706(a)(2)), which are not group health plans.'.
(f) CONFORMING
AMENDMENTS-
(1) Section 514(b) of
such Act (29 U.S.C. 1144(b)) is amended by adding at the end the
following new paragraph:
`(9) For additional
provisions relating to group health plans, see section 704.'.
(2)(A) Part 6 of
subtitle B of title I of such Act (29 U.S.C. 1161 et seq.) is amended by
striking the heading and inserting the following:
`Part 6--Continuation Coverage and Additional Standards for Group
Health Plans'.
(B) The table of
contents in section 1 of such Act is amended by striking the item
relating to the heading for part 6 of subtitle B of title I and
inserting the following:
`Part 6--Continuation Coverage and Additional Standards for Group
Health Plans'.
(3) The table of
contents in section 1 of such Act (as amended by the preceding
provisions of this section) is amended by inserting after the items
relating to part 6 the following new items:
`Part 7--Group Health Plan Portability, Access, and Renewability
Requirements
`Sec. 701. Increased portability through limitation on preexisting
condition exclusions.
`Sec. 702. Prohibiting discrimination against individual participants
and beneficiaries based on health status.
`Sec. 703. Guaranteed renewability in multiemployer plans and
multiple employer welfare arrangements.
`Sec. 704. Preemption; State flexibility; construction.
`Sec. 705. Special rules relating to group health plans.
`Sec. 706. Definitions.
`Sec. 707. Regulations.'.
(g) EFFECTIVE DATES-
(1) IN GENERAL- Except
as provided in this section, this section (and the amendments made by
this section) shall apply with respect to group health plans for plan
years beginning after June 30, 1997.
(2) DETERMINATION OF
CREDITABLE COVERAGE-
(A) PERIOD OF COVERAGE-
(i) IN GENERAL- Subject
to clause (ii), no period before July 1, 1996, shall be taken into
account under part 7 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974 (as added by this section) in determining
creditable coverage.
(ii) SPECIAL RULE FOR
CERTAIN PERIODS- The Secretary of Labor, consistent with section 104,
shall provide for a process whereby individuals who need to establish
creditable coverage for periods before July 1, 1996, and who would have
such coverage credited but for clause (i) may be given credit for
creditable coverage for such periods through the presentation of
documents or other means.
(B) CERTIFICATIONS,
ETC-
(i) IN GENERAL- Subject
to clauses (ii) and (iii), subsection (e) of section 701 of the Employee
Retirement Income Security Act of 1974 (as added by this section) shall
apply to events occurring after June 30, 1996.
(ii) NO CERTIFICATION
REQUIRED TO BE PROVIDED BEFORE JUNE 1, 1997- In no case is a
certification required to be provided under such subsection before June
1, 1997.
(iii) CERTIFICATION
ONLY ON WRITTEN REQUEST FOR EVENTS OCCURRING BEFORE OCTOBER 1, 1996- In
the case of an event occurring after June 30, 1996, and before October
1, 1996, a certification is not required to be provided under such
subsection unless an individual (with respect to whom the certification
is otherwise required to be made) requests such certification in
writing.
(C) TRANSITIONAL RULE-
In the case of an individual who seeks to establish creditable coverage
for any period for which certification is not required because it
relates to an event occurring before June 30, 1996--
(i) the individual may
present other credible evidence of such coverage in order to establish
the period of creditable coverage; and
(ii) a group health
plan and a health insurance issuer shall not be subject to any penalty
or enforcement action with respect to the plan's or issuer's crediting
(or not crediting) such coverage if the plan or issuer has sought to
comply in good faith with the applicable requirements under the
amendments made by this section.
(3) SPECIAL RULE FOR
COLLECTIVE BARGAINING AGREEMENTS- Except as provided in paragraph (2),
in the case of a group health plan maintained pursuant to one or more
collective bargaining agreements between employee representatives and
one or more employers ratified before the date of the enactment of this
Act, part 7 of subtitle B of title I of Employee Retirement Income
Security Act of 1974 (other than section 701(e) thereof) shall not apply
to plan years beginning before the later of--
(A) the date on which
the last of the collective bargaining agreements relating to the plan
terminates (determined without regard to any extension thereof agreed to
after the date of the enactment of this Act), or
(B) July 1, 1997.
For purposes of
subparagraph (A), any plan amendment made pursuant to a collective
bargaining agreement relating to the plan which amends the plan solely
to conform to any requirement of such part shall not be treated as a
termination of such collective bargaining agreement.
(4) TIMELY REGULATIONS-
The Secretary of Labor, consistent with section 104, shall first issue
by not later than April 1, 1997, such regulations as may be necessary to
carry out the amendments made by this section.
(5) LIMITATION ON
ACTIONS- No enforcement action shall be taken, pursuant to the
amendments made by this section, against a group health plan or health
insurance issuer with respect to a violation of a requirement imposed by
such amendments before January 1, 1998, or, if later, the date of
issuance of regulations referred to in paragraph (4), if the plan or
issuer has sought to comply in good faith with such requirements.
SEC. 102. THROUGH THE PUBLIC HEALTH SERVICE ACT.
(a) IN GENERAL- The
Public Health Service Act is amended by adding at the end the following
new title:
`TITLE XXVII--ASSURING
PORTABILITY, AVAILABILITY, AND RENEWABILITY OF HEALTH INSURANCE COVERAGE
`Part A--Group Market Reforms
`Subpart 1--Portability, Access, and Renewability Requirements
`SEC.
2701. INCREASED PORTABILITY THROUGH LIMITATION ON PREEXISTING CONDITION
EXCLUSIONS.
`(a) LIMITATION ON
PREEXISTING CONDITION EXCLUSION PERIOD; CREDITING FOR PERIODS OF
PREVIOUS COVERAGE- Subject to subsection (d), a group health plan, and a
health insurance issuer offering group health insurance coverage, may,
with respect to a participant or beneficiary, impose a preexisting
condition exclusion only if--
`(1) such exclusion
relates to a condition (whether physical or mental), regardless of the
cause of the condition, for which medical advice, diagnosis, care, or
treatment was recommended or received within the 6-month period ending
on the enrollment date;
`(2) such exclusion
extends for a period of not more than 12 months (or 18 months in the
case of a late enrollee) after the enrollment date; and
`(3) the period of any
such preexisting condition exclusion is reduced by the aggregate of the
periods of creditable coverage (if any, as defined in subsection (c)(1))
applicable to the participant or beneficiary as of the enrollment date.
`(b) DEFINITIONS- For
purposes of this part--
`(1) PREEXISTING
CONDITION EXCLUSION-
`(A) IN GENERAL- The
term `preexisting condition exclusion' means, with respect to coverage,
a limitation or exclusion of benefits relating to a condition based on
the fact that the condition was present before the date of enrollment
for such coverage, whether or not any medical advice, diagnosis, care,
or treatment was recommended or received before such date.
`(B) TREATMENT OF
GENETIC INFORMATION- Genetic information shall not be treated as a
condition described in subsection (a)(1) in the absence of a diagnosis
of the condition related to such information.
`(2) ENROLLMENT DATE-
The term `enrollment date' means, with respect to an individual covered
under a group health plan or health insurance coverage, the date of
enrollment of the individual in the plan or coverage or, if earlier, the
first day of the waiting period for such enrollment.
`(3) LATE ENROLLEE- The
term `late enrollee' means, with respect to coverage under a group
health plan, a participant or beneficiary who enrolls under the plan
other than during--
`(A) the first period
in which the individual is eligible to enroll under the plan, or
`(B) a special
enrollment period under subsection (f).
`(4) WAITING PERIOD- The
term `waiting period' means, with respect to a group health plan and an
individual who is a potential participant or beneficiary in the plan,
the period that must pass with respect to the individual before the
individual is eligible to be covered for benefits under the terms of the
plan.
`(c) RULES RELATING TO
CREDITING PREVIOUS COVERAGE-
`(1) CREDITABLE COVERAGE
DEFINED- For purposes of this title, the term `creditable coverage'
means, with respect to an individual, coverage of the individual under
any of the following:
`(A) A group health
plan.
`(B) Health insurance
coverage.
`(C) Part A or part B
of title XVIII of the Social Security Act.
`(D) Title XIX of the
Social Security Act, other than coverage consisting solely of benefits
under section 1928.
`(E) Chapter 55 of
title 10, United States Code.
`(F) A medical care
program of the Indian Health Service or of a tribal organization.
`(G) A State health
benefits risk pool.
`(H) A health plan
offered under chapter 89 of title 5, United States Code.
`(I) A public health
plan (as defined in regulations).
`(J) A health benefit
plan under section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)).
Such term does not
include coverage consisting solely of coverage of excepted benefits (as
defined in section 2791(c)).
`(2) NOT COUNTING
PERIODS BEFORE SIGNIFICANT BREAKS IN COVERAGE-
`(A) IN GENERAL- A
period of creditable coverage shall not be counted, with respect to
enrollment of an individual under a group health plan, if, after such
period and before the enrollment date, there was a 63-day period during
all of which the individual was not covered under any creditable
coverage.
`(B) WAITING PERIOD NOT
TREATED AS A BREAK IN COVERAGE- For purposes of subparagraph (A) and
subsection (d)(4), any period that an individual is in a waiting period
for any coverage under a group health plan (or for group health
insurance coverage) or is in an affiliation period (as defined in
subsection (g)(2)) shall not be taken into account in determining the
continuous period under subparagraph (A).
`(3) METHOD OF CREDITING
COVERAGE-
`(A) STANDARD METHOD-
Except as otherwise provided under subparagraph (B), for purposes of
applying subsection (a)(3), a group health plan, and a health insurance
issuer offering group health insurance coverage, shall count a period of
creditable coverage without regard to the specific benefits covered
during the period.
`(B) ELECTION OF
ALTERNATIVE METHOD- A group health plan, or a health insurance issuer
offering group health insurance, may elect to apply subsection (a)(3)
based on coverage of benefits within each of several classes or
categories of benefits specified in regulations rather than as provided
under subparagraph (A). Such election shall be made on a uniform basis
for all participants and beneficiaries. Under such election a group
health plan or issuer shall count a period of creditable coverage with
respect to any class or category of benefits if any level of benefits is
covered within such class or category.
`(C) PLAN NOTICE- In
the case of an election with respect to a group health plan under
subparagraph (B) (whether or not health insurance coverage is provided
in connection with such plan), the plan shall--
`(i) prominently state
in any disclosure statements concerning the plan, and state to each
enrollee at the time of enrollment under the plan, that the plan has
made such election, and
`(ii) include in such
statements a description of the effect of this election.
`(D) ISSUER NOTICE- In
the case of an election under subparagraph (B) with respect to health
insurance coverage offered by an issuer in the small or large group
market, the issuer--
`(i) shall prominently
state in any disclosure statements concerning the coverage, and to each
employer at the time of the offer or sale of the coverage, that the
issuer has made such election, and
`(ii) shall include in
such statements a description of the effect of such election.
`(4) ESTABLISHMENT OF
PERIOD- Periods of creditable coverage with respect to an individual
shall be established through presentation of certifications described in
subsection (e) or in such other manner as may be specified in
regulations.
`(d) EXCEPTIONS-
`(1) EXCLUSION NOT
APPLICABLE TO CERTAIN NEWBORNS- Subject to paragraph (4), a group health
plan, and a health insurance issuer offering group health insurance
coverage, may not impose any preexisting condition exclusion in the case
of an individual who, as of the last day of the 30-day period beginning
with the date of birth, is covered under creditable coverage.
`(2) EXCLUSION NOT
APPLICABLE TO CERTAIN ADOPTED CHILDREN- Subject to paragraph (4), a
group health plan, and a health insurance issuer offering group health
insurance coverage, may not impose any preexisting condition exclusion
in the case of a child who is adopted or placed for adoption before
attaining 18 years of age and who, as of the last day of the 30-day
period beginning on the date of the adoption or placement for adoption,
is covered under creditable coverage. The previous sentence shall not
apply to coverage before the date of such adoption or placement for
adoption.
`(3) EXCLUSION NOT
APPLICABLE TO PREGNANCY- A group health plan, and health insurance
issuer offering group health insurance coverage, may not impose any
preexisting condition exclusion relating to pregnancy as a preexisting
condition.
`(4) LOSS IF BREAK IN
COVERAGE- Paragraphs (1) and (2) shall no longer apply to an individual
after the end of the first 63-day period during all of which the
individual was not covered under any creditable coverage.
`(e) CERTIFICATIONS AND
DISCLOSURE OF COVERAGE-
`(1) REQUIREMENT FOR
CERTIFICATION OF PERIOD OF CREDITABLE COVERAGE-
`(A) IN GENERAL- A
group health plan, and a health insurance issuer offering group health
insurance coverage, shall provide the certification described in
subparagraph (B)--
`(i) at the time an
individual ceases to be covered under the plan or otherwise becomes
covered under a COBRA continuation provision,
`(ii) in the case of an
individual becoming covered under such a provision, at the time the
individual ceases to be covered under such provision, and
`(iii) on the request
on behalf of an individual made not later than 24 months after the date
of cessation of the coverage described in clause (i) or (ii), whichever
is later.
The certification under
clause (i) may be provided, to the extent practicable, at a time
consistent with notices required under any applicable COBRA continuation
provision.
`(B) CERTIFICATION- The
certification described in this subparagraph is a written certification
of--
`(i) the period of
creditable coverage of the individual under such plan and the coverage
(if any) under such COBRA continuation provision, and
`(ii) the waiting
period (if any) (and affiliation period, if applicable) imposed with
respect to the individual for any coverage under such plan.
`(C) ISSUER COMPLIANCE-
To the extent that medical care under a group health plan consists of
group health insurance coverage, the plan is deemed to have satisfied
the certification requirement under this paragraph if the health
insurance issuer offering the coverage provides for such certification
in accordance with this paragraph.
`(2) DISCLOSURE OF
INFORMATION ON PREVIOUS BENEFITS- In the case of an election described
in subsection (c)(3)(B) by a group health plan or health insurance
issuer, if the plan or issuer enrolls an individual for coverage under
the plan and the individual provides a certification of coverage of the
individual under paragraph (1)--
`(A) upon request of
such plan or issuer, the entity which issued the certification provided
by the individual shall promptly disclose to such requesting plan or
issuer information on coverage of classes and categories of health
benefits available under such entity's plan or coverage, and
`(B) such entity may
charge the requesting plan or issuer for the reasonable cost of
disclosing such information.
`(3) REGULATIONS- The
Secretary shall establish rules to prevent an entity's failure to
provide information under paragraph (1) or (2) with respect to previous
coverage of an individual from adversely affecting any subsequent
coverage of the individual under another group health plan or health
insurance coverage.
`(f) SPECIAL ENROLLMENT
PERIODS-
`(1) INDIVIDUALS LOSING
OTHER COVERAGE- A group health plan, and a health insurance issuer
offering group health insurance coverage in connection with a group
health plan, shall permit an employee who is eligible, but not enrolled,
for coverage under the terms of the plan (or a dependent of such an
employee if the dependent is eligible, but not enrolled, for coverage
under such terms) to enroll for coverage under the terms of the plan if
each of the following conditions is met:
`(A) The employee or
dependent was covered under a group health plan or had health insurance
coverage at the time coverage was previously offered to the employee or
dependent.
`(B) The employee
stated in writing at such time that coverage under a group health plan
or health insurance coverage was the reason for declining enrollment,
but only if the plan sponsor or issuer (if applicable) required such a
statement at such time and provided the employee with notice of such
requirement (and the consequences of such requirement) at such time.
`(C) The employee's or
dependent's coverage described in subparagraph (A)--
`(i) was under a COBRA
continuation provision and the coverage under such provision was
exhausted; or
`(ii) was not under
such a provision and either the coverage was terminated as a result of
loss of eligibility for the coverage (including as a result of legal
separation, divorce, death, termination of employment, or reduction in
the number of hours of employment) or employer contributions toward such
coverage were terminated.
`(D) Under the terms of
the plan, the employee requests such enrollment not later than 30 days
after the date of exhaustion of coverage described in subparagraph
(C)(i) or termination of coverage or employer contribution described in
subparagraph (C)(ii).
`(2) FOR DEPENDENT
BENEFICIARIES-
`(A) IN GENERAL- If--
`(i) a group health
plan makes coverage available with respect to a dependent of an
individual,
`(ii) the individual is
a participant under the plan (or has met any waiting period applicable
to becoming a participant under the plan and is eligible to be enrolled
under the plan but for a failure to enroll during a previous enrollment
period), and
`(iii) a person becomes
such a dependent of the individual through marriage, birth, or adoption
or placement for adoption,
the group health plan
shall provide for a dependent special enrollment period described in
subparagraph (B) during which the person (or, if not otherwise enrolled,
the individual) may be enrolled under the plan as a dependent of the
individual, and in the case of the birth or adoption of a child, the
spouse of the individual may be enrolled as a dependent of the
individual if such spouse is otherwise eligible for coverage.
`(B) DEPENDENT SPECIAL
ENROLLMENT PERIOD- A dependent special enrollment period under this
subparagraph shall be a period of not less than 30 days and shall begin
on the later of--
`(i) the date dependent
coverage is made available, or
`(ii) the date of the
marriage, birth, or adoption or placement for adoption (as the case may
be) described in subparagraph (A)(iii).
`(C) NO WAITING PERIOD-
If an individual seeks to enroll a dependent during the first 30 days of
such a dependent special enrollment period, the coverage of the
dependent shall become effective--
`(i) in the case of
marriage, not later than the first day of the first month beginning
after the date the completed request for enrollment is received;
`(ii) in the case of a
dependent's birth, as of the date of such birth; or
`(iii) in the case of a
dependent's adoption or placement for adoption, the date of such
adoption or placement for adoption.
`(g) USE OF AFFILIATION
PERIOD BY HMOS AS ALTERNATIVE TO PREEXISTING CONDITION EXCLUSION-
`(1) IN GENERAL- A
health maintenance organization which offers health insurance coverage
in connection with a group health plan and which does not impose any
preexisting condition exclusion allowed under subsection (a) with
respect to any particular coverage option may impose an affiliation
period for such coverage option, but only if--
`(A) such period is
applied uniformly without regard to any health status-related factors;
and
`(B) such period does
not exceed 2 months (or 3 months in the case of a late enrollee).
`(2) AFFILIATION PERIOD-
`(A) DEFINED- For
purposes of this title, the term `affiliation period' means a period
which, under the terms of the health insurance coverage offered by the
health maintenance organization, must expire before the health insurance
coverage becomes effective. The organization is not required to provide
health care services or benefits during such period and no premium shall
be charged to the participant or beneficiary for any coverage during the
period.
`(B) BEGINNING- Such
period shall begin on the enrollment date.
`(C) RUNS CONCURRENTLY
WITH WAITING PERIODS- An affiliation period under a plan shall run
concurrently with any waiting period under the plan.
`(3) ALTERNATIVE
METHODS- A health maintenance organization described in paragraph (1)
may use alternative methods, from those described in such paragraph, to
address adverse selection as approved by the State insurance
commissioner or official or officials designated by the State to enforce
the requirements of this part for the State involved with respect to
such issuer.
`SEC.
2702. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS AND
BENEFICIARIES BASED ON HEALTH STATUS.
`(a) IN ELIGIBILITY TO
ENROLL-
`(1) IN GENERAL- Subject
to paragraph (2), a group health plan, and a health insurance issuer
offering group health insurance coverage in connection with a group
health plan, may not establish rules for eligibility (including
continued eligibility) of any individual to enroll under the terms of
the plan based on any of the following health status-related factors in
relation to the individual or a dependent of the individual:
`(A) Health status.
`(B) Medical condition
(including both physical and mental illnesses).
`(C) Claims experience.
`(D) Receipt of health
care.
`(E) Medical history.
`(F) Genetic
information.
`(G) Evidence of
insurability (including conditions arising out of acts of domestic
violence).
`(H) Disability.
`(2) NO APPLICATION TO
BENEFITS OR EXCLUSIONS- To the extent consistent with section 701,
paragraph (1) shall not be construed--
`(A) to require a group
health plan, or group health insurance coverage, to provide particular
benefits other than those provided under the terms of such plan or
coverage, or
`(B) to prevent such a
plan or coverage from establishing limitations or restrictions on the
amount, level, extent, or nature of the benefits or coverage for
similarly situated individuals enrolled in the plan or coverage.
`(3) CONSTRUCTION- For
purposes of paragraph (1), rules for eligibility to enroll under a plan
include rules defining any applicable waiting periods for such
enrollment.
`(b) IN PREMIUM
CONTRIBUTIONS-
`(1) IN GENERAL- A group
health plan, and a health insurance issuer offering health insurance
coverage in connection with a group health plan, may not require any
individual (as a condition of enrollment or continued enrollment under
the plan) to pay a premium or contribution which is greater than such
premium or contribution for a similarly situated individual enrolled in
the plan on the basis of any health status-related factor in relation to
the individual or to an individual enrolled under the plan as a
dependent of the individual.
`(2) CONSTRUCTION-
Nothing in paragraph (1) shall be construed--
`(A) to restrict the
amount that an employer may be charged for coverage under a group health
plan; or
`(B) to prevent a group
health plan, and a health insurance issuer offering group health
insurance coverage, from establishing premium discounts or rebates or
modifying otherwise applicable copayments or deductibles in return for
adherence to programs of health promotion and disease prevention.
`Subpart 2--Provisions Applicable Only to Health Insurance Issuers
`SEC.
2711. GUARANTEED AVAILABILITY OF COVERAGE FOR EMPLOYERS IN THE GROUP
MARKET.
`(a) ISSUANCE OF
COVERAGE IN THE SMALL GROUP MARKET-
`(1) IN GENERAL- Subject
to subsections (c) through (f), each health insurance issuer that offers
health insurance coverage in the small group market in a State--
`(A) must accept every
small employer (as defined in section 2791(e)(4)) in the State that
applies for such coverage; and
`(B) must accept for
enrollment under such coverage every eligible individual (as defined in
paragraph (2)) who applies for enrollment during the period in which the
individual first becomes eligible to enroll under the terms of the group
health plan and may not place any restriction which is inconsistent with
section 2702 on an eligible individual being a participant or
beneficiary.
`(2) ELIGIBLE INDIVIDUAL
DEFINED- For purposes of this section, the term `eligible individual'
means, with respect to a health insurance issuer that offers health
insurance coverage to a small employer in connection with a group health
plan in the small group market, such an individual in relation to the
employer as shall be determined--
`(A) in accordance with
the terms of such plan,
`(B) as provided by the
issuer under rules of the issuer which are uniformly applicable in a
State to small employers in the small group market, and
`(C) in accordance with
all applicable State laws governing such issuer and such market.
`(b) ASSURING ACCESS IN
THE LARGE GROUP MARKET-
`(1) REPORTS TO HHS- The
Secretary shall request that the chief executive officer of each State
submit to the Secretary, by not later December 31, 2000, and every 3
years thereafter a report on--
`(A) the access of
large employers to health insurance coverage in the State, and
`(B) the circumstances
for lack of access (if any) of large employers (or one or more classes
of such employers) in the State to such coverage.
`(2) TRIENNIAL REPORTS
TO CONGRESS- The Secretary, based on the reports submitted under
paragraph (1) and such other information as the Secretary may use, shall
prepare and submit to Congress, every 3 years, a report describing the
extent to which large employers (and classes of such employers) that
seek health insurance coverage in the different States are able to
obtain access to such coverage. Such report shall include such
recommendations as the Secretary determines to be appropriate.
`(3) GAO REPORT ON LARGE
EMPLOYER ACCESS TO HEALTH INSURANCE COVERAGE- The Comptroller General
shall provide for a study of the extent to which classes of large
employers in the different States are able to obtain access to health
insurance coverage and the circumstances for lack of access (if any) to
such coverage. The Comptroller General shall submit to Congress a report
on such study not later than 18 months after the date of the enactment
of this title.
`(c) SPECIAL RULES FOR
NETWORK PLANS-
`(1) IN GENERAL- In the
case of a health insurance issuer that offers health insurance coverage
in the small group market through a network plan, the issuer may--
`(A) limit the
employers that may apply for such coverage to those with eligible
individuals who live, work, or reside in the service area for such
network plan; and
`(B) within the service
area of such plan, deny such coverage to such employers if the issuer
has demonstrated, if required, to the applicable State authority that--
`(i) it will not have
the capacity to deliver services adequately to enrollees of any
additional groups because of its obligations to existing group contract
holders and enrollees, and
`(ii) it is applying
this paragraph uniformly to all employers without regard to the claims
experience of those employers and their employees (and their dependents)
or any health status-related factor relating to such employees and
dependents.
`(2) 180-DAY SUSPENSION
UPON DENIAL OF COVERAGE- An issuer, upon denying health insurance
coverage in any service area in accordance with paragraph (1)(B), may
not offer coverage in the small group market within such service area
for a period of 180 days after the date such coverage is denied.
`(d) APPLICATION OF
FINANCIAL CAPACITY LIMITS-
`(1) IN GENERAL- A
health insurance issuer may deny health insurance coverage in the small
group market if the issuer has demonstrated, if required, to the
applicable State authority that--
`(A) it does not have
the financial reserves necessary to underwrite additional coverage; and
`(B) it is applying
this paragraph uniformly to all employers in the small group market in
the State consistent with applicable State law and without regard to the
claims experience of those employers and their employees (and their
dependents) or any health status-related factor relating to such
employees and dependents.
`(2) 180-DAY SUSPENSION
UPON DENIAL OF COVERAGE- A health insurance issuer upon denying health
insurance coverage in connection with group health plans in accordance
with paragraph (1) in a State may not offer coverage in connection with
group health plans in the small group market in the State for a period
of 180 days after the date such coverage is denied or until the issuer
has demonstrated to the applicable State authority, if required under
applicable State law, that the issuer has sufficient financial reserves
to underwrite additional coverage, whichever is later. An applicable
State authority may provide for the application of this subsection on a
service-area-specific basis.
`(e) EXCEPTION TO
REQUIREMENT FOR FAILURE TO MEET CERTAIN MINIMUM PARTICIPATION OR
CONTRIBUTION RULES-
`(1) IN GENERAL-
Subsection (a) shall not be construed to preclude a health insurance
issuer from establishing employer contribution rules or group
participation rules for the offering of health insurance coverage in
connection
with a group health plan in the small group market, as allowed under
applicable State law.
`(2) RULES DEFINED- For
purposes of paragraph (1)--
`(A) the term `employer
contribution rule' means a requirement relating to the minimum level or
amount of employer contribution toward the premium for enrollment of
participants and beneficiaries; and
`(B) the term `group
participation rule' means a requirement relating to the minimum number
of participants or beneficiaries that must be enrolled in relation to a
specified percentage or number of eligible individuals or employees of
an employer.
`(f) EXCEPTION FOR
COVERAGE OFFERED ONLY TO BONA FIDE ASSOCIATION MEMBERS- Subsection (a)
shall not apply to health insurance coverage offered by a health
insurance issuer if such coverage is made available in the small group
market only through one or more bona fide associations (as defined in
section 2791(d)(3)).
`SEC.
2712. GUARANTEED RENEWABILITY OF COVERAGE FOR EMPLOYERS IN THE GROUP
MARKET.
`(a) IN GENERAL- Except
as provided in this section, if a health insurance issuer offers health
insurance coverage in the small or large group market in connection with
a group health plan, the issuer must renew or continue in force such
coverage at the option of the plan sponsor of the plan.
`(b) GENERAL EXCEPTIONS-
A health insurance issuer may nonrenew or discontinue health insurance
coverage offered in connection with a group health plan in the small or
large group market based only on one or more of the following:
`(1) NONPAYMENT OF
PREMIUMS- The plan sponsor has failed to pay premiums or contributions
in accordance with the terms of the health insurance coverage or the
issuer has not received timely premium payments.
`(2) FRAUD- The plan
sponsor has performed an act or practice that constitutes fraud or made
an intentional misrepresentation of material fact under the terms of the
coverage.
`(3) VIOLATION OF
PARTICIPATION OR CONTRIBUTION RULES- The plan sponsor has failed to
comply with a material plan provision relating to employer contribution
or group participation rules, as permitted under section 2711(e) in the
case of the small group market or pursuant to applicable State law in
the case of the large group market.
`(4) TERMINATION OF
COVERAGE- The issuer is ceasing to offer coverage in such market in
accordance with subsection (c) and applicable State law.
`(5) MOVEMENT OUTSIDE
SERVICE AREA- In the case of a health insurance issuer that offers
health insurance coverage in the market through a network plan, there is
no longer any enrollee in connection with such plan who lives, resides,
or works in the service area of the issuer (or in the area for which the
issuer is authorized to do business) and, in the case of the small group
market, the issuer would deny enrollment with respect to such plan under
section 2711(c)(1)(A).
`(6) ASSOCIATION
MEMBERSHIP CEASES- In the case of health insurance coverage that is made
available in the small or large group market (as the case may be) only
through one or more bona fide associations, the membership of an
employer in the association (on the basis of which the coverage is
provided) ceases but only if such coverage is terminated under this
paragraph uniformly without regard to any health status-related factor
relating to any covered individual.
`(c) REQUIREMENTS FOR
UNIFORM TERMINATION OF COVERAGE-
`(1) PARTICULAR TYPE OF
COVERAGE NOT OFFERED- In any case in which an issuer decides to
discontinue offering a particular type of group health insurance
coverage offered in the small or large group market, coverage of such
type may be discontinued by the issuer in accordance with applicable
State law in such market only if--
`(A) the issuer
provides notice to each plan sponsor provided coverage of this type in
such market (and participants and beneficiaries covered under such
coverage) of such discontinuation at least 90 days prior to the date of
the discontinuation of such coverage;
`(B) the issuer offers
to each plan sponsor provided coverage of this type in such market, the
option to purchase all (or, in the case of the large group market, any)
other health insurance coverage currently being offered by the issuer to
a group health plan in such market; and
`(C) in exercising the
option to discontinue coverage of this type and in offering the option
of coverage under subparagraph (B), the issuer acts uniformly without
regard to the claims experience of those sponsors or any health
status-related factor relating to any participants or beneficiaries
covered or new participants or beneficiaries who may become eligible for
such coverage.
`(2) DISCONTINUANCE OF
ALL COVERAGE-
`(A) IN GENERAL- In any
case in which a health insurance issuer elects to discontinue offering
all health insurance coverage in the small group market or the large
group market, or both markets, in a State, health insurance coverage may
be discontinued by the issuer only in accordance with applicable State
law and if--
`(i) the issuer
provides notice to the applicable State authority and to each plan
sponsor (and participants and beneficiaries covered under such coverage)
of such discontinuation at least 180 days prior to the date of the
discontinuation of such coverage; and
`(ii) all health
insurance issued or delivered for issuance in the State in such market
(or markets) are discontinued and coverage under such health insurance
coverage in such market (or markets) is not renewed.
`(B) PROHIBITION ON
MARKET REENTRY- In the case of a discontinuation under subparagraph (A)
in a market, the issuer may not provide for the issuance of any health
insurance coverage in the market and State involved during the 5-year
period beginning on the date of the discontinuation of the last health
insurance coverage not so renewed.
`(d) EXCEPTION FOR
UNIFORM MODIFICATION OF COVERAGE- At the time of coverage renewal, a
health insurance issuer may modify the health insurance coverage for a
product offered to a group health plan--
`(1) in the large group
market; or
`(2) in the small group
market if, for coverage that is available in such market other than only
through one or more bona fide associations, such modification is
consistent with State law and effective on a uniform basis among group
health plans with that product.
`(e) APPLICATION TO
COVERAGE OFFERED ONLY THROUGH ASSOCIATIONS- In applying this section in
the case of health insurance coverage that is made available by a health
insurance issuer in the small or large group market to employers only
through one or more associations, a reference to `plan sponsor' is
deemed, with respect to coverage provided to an employer member of the
association, to include a reference to such employer.
`SEC. 2713. DISCLOSURE OF INFORMATION.
`(a) DISCLOSURE OF
INFORMATION BY HEALTH PLAN ISSUERS- In connection with the offering of
any health insurance coverage to a small employer, a health insurance
issuer--
`(1) shall make a
reasonable disclosure to such employer, as part of its solicitation and
sales materials, of the availability of information described in
subsection (b), and
`(2) upon request of
such a small employer, provide such information.
`(b) INFORMATION
DESCRIBED-
`(1) IN GENERAL- Subject
to paragraph (3), with respect to a health insurance issuer offering
health insurance coverage to a small employer, information described in
this subsection is information concerning--
`(A) the provisions of
such coverage concerning issuer's right to change premium rates and the
factors that may affect changes in premium rates;
`(B) the provisions of
such coverage relating to renewability of coverage;
`(C) the provisions of
such coverage relating to any preexisting condition exclusion; and
`(D) the benefits and
premiums available under all health insurance coverage for which the
employer is qualified.
`(2) FORM OF
INFORMATION- Information under this subsection shall be provided to
small employers in a manner determined to be understandable by the
average small employer, and shall be sufficient to reasonably inform
small employers of their rights and obligations under the health
insurance coverage.
`(3) EXCEPTION- An
issuer is not required under this section to disclose any information
that is proprietary and trade secret information under applicable law.
`Subpart 3--Exclusion of Plans; Enforcement; Preemption
`SEC. 2721. EXCLUSION OF CERTAIN PLANS.
`(a) EXCEPTION FOR
CERTAIN SMALL GROUP HEALTH PLANS- The requirements of subparts 1 and 2
shall not apply to any group health plan (and health insurance coverage
offered in connection with a group health plan) for any plan year if, on
the first day of such plan year, such plan has less than 2 participants
who are current employees.
`(b) LIMITATION ON
APPLICATION OF PROVISIONS RELATING TO GROUP HEALTH PLANS-
`(1) IN GENERAL- The
requirements of subparts 1 and 2 shall apply with respect to group
health plans only--
`(A) subject to
paragraph (2), in the case of a plan that is a nonfederal governmental
plan, and
`(B) with respect to
health insurance coverage offered in connection with a group health plan
(including such a plan that is a church plan or a governmental plan).
`(2) TREATMENT OF
NONFEDERAL GOVERNMENTAL PLANS-
`(A) ELECTION TO BE
EXCLUDED- If the plan sponsor of a nonfederal governmental plan which is
a group health plan to which the provisions of subparts 1 and 2
otherwise apply makes an election under this subparagraph (in such form
and manner as the Secretary may by regulations prescribe), then the
requirements of such subparts insofar as they apply directly to group
health plans (and not merely to group health insurance coverage) shall
not apply to such governmental plans for such period except as provided
in this paragraph.
`(B) PERIOD OF
ELECTION- An election under subparagraph (A) shall apply--
`(i) for a single
specified plan year, or
`(ii) in the case of a
plan provided pursuant to a collective bargaining agreement, for the
term of such agreement.
An election under
clause (i) may be extended through subsequent elections under this
paragraph.
`(C) NOTICE TO
ENROLLEES- Under such an election, the plan shall provide for--
`(i) notice to
enrollees (on an annual basis and at the time of enrollment under the
plan) of the fact and consequences of such election, and
`(ii) certification and
disclosure of creditable coverage under the plan with respect to
enrollees in accordance with section 2701(e).
`(c) EXCEPTION FOR
CERTAIN BENEFITS- The requirements of subparts 1 and 2 shall not apply
to any group health plan (or group health insurance coverage) in
relation to its provision of excepted benefits described in section
2791(c)(1).
`(d) EXCEPTION FOR
CERTAIN BENEFITS IF CERTAIN CONDITIONS MET-
`(1) LIMITED, EXCEPTED
BENEFITS- The requirements of subparts 1 and 2 shall not apply to any
group health plan (and group health insurance coverage offered in
connection with a group health plan) in relation to its provision of
excepted benefits described in section 2791(c)(2) if the benefits--
`(A) are provided under
a separate policy, certificate, or contract of insurance; or
`(B) are otherwise not
an integral part of the plan.
`(2) NONCOORDINATED,
EXCEPTED BENEFITS- The requirements of subparts 1 and 2 shall not apply
to any group health plan (and group health insurance coverage offered in
connection with a group health plan) in relation to its provision of
excepted benefits described in section 2791(c)(3) if all of the
following conditions are met:
`(A) The benefits are
provided under a separate policy, certificate, or contract of insurance.
`(B) There is no
coordination between the provision of such benefits and any exclusion of
benefits under any group health plan maintained by the same plan
sponsor.
`(C) Such benefits are
paid with respect to an event without regard to whether benefits are
provided with respect to such an event under any group health plan
maintained by the same plan sponsor.
`(3) SUPPLEMENTAL
EXCEPTED BENEFITS- The requirements of this part shall not apply to any
group health plan (and group health insurance coverage) in relation to
its provision of excepted benefits described in section 27971(c)(4) if
the benefits are provided under a separate policy, certificate, or
contract of insurance.
`(e) TREATMENT OF
PARTNERSHIPS- For purposes of this part--
`(1) TREATMENT AS A
GROUP HEALTH PLAN- Any plan, fund, or program which would not be (but
for this subsection) an employee welfare benefit plan and which is
established or maintained by a partnership, to the extent that such
plan, fund, or program provides medical care (including items and
services paid for as medical care) to present or former partners in the
partnership or to their dependents (as defined under the terms of the
plan, fund, or program), directly or through insurance, reimbursement,
or otherwise, shall be treated (subject to paragraph (2)) as an employee
welfare benefit plan which is a group health plan.
`(2) EMPLOYER- In the
case of a group health plan, the term `employer' also includes the
partnership in relation to any partner.
`(3) PARTICIPANTS OF
GROUP HEALTH PLANS- In the case of a group health plan, the term
`participant' also includes--
`(A) in connection with
a group health plan maintained by a partnership, an individual who is a
partner in relation to the partnership, or
`(B) in connection with
a group health plan maintained by a self-employed individual (under
which one or more employees are participants), the self-employed
individual,
if such individual is,
or may become, eligible to receive a benefit under the plan or such
individual's beneficiaries may be eligible to receive any such benefit.
`SEC. 2722. ENFORCEMENT.
`(a) STATE ENFORCEMENT-
`(1) STATE AUTHORITY-
Subject to section 2723, each State may require that health insurance
issuers that issue, sell, renew, or offer health insurance coverage in
the State in the small or large group markets meet the requirements of
this part with respect to such issuers.
`(2) FAILURE TO
IMPLEMENT PROVISIONS- In the case of a determination by the Secretary
that a State has failed to substantially enforce a provision (or
provisions) in this part with respect to health insurance issuers in the
State, the Secretary shall enforce such provision (or provisions) under
subsection (b) insofar as they relate to the issuance, sale, renewal,
and offering of health insurance coverage in connection with group
health plans in such State.
`(b) SECRETARIAL
ENFORCEMENT AUTHORITY-
`(1) LIMITATION- The
provisions of this subsection shall apply to enforcement of a provision
(or provisions) of this part only--
`(A) as provided under
subsection (a)(2); and
`(B) with respect to
group health plans that are non-Federal governmental plans.
`(2) IMPOSITION OF
PENALTIES- In the cases described in paragraph (1)--
`(A) IN GENERAL-
Subject to the succeeding provisions of this subsection, any non-Federal
governmental plan that is a group health plan and any health insurance
issuer that fails to meet a provision of this part applicable to such
plan or issuer is subject to a civil money penalty under this
subsection.
`(B) LIABILITY FOR
PENALTY- In the case of a failure by--
`(i) a health insurance
issuer, the issuer is liable for such penalty, or
`(ii) a group health
plan that is a non-Federal governmental plan which is--
`(I) sponsored by 2 or
more employers, the plan is liable for such penalty, or
`(II) not so sponsored,
the employer is liable for such penalty.
`(C) AMOUNT OF PENALTY-
`(i) IN GENERAL- The
maximum amount of penalty imposed under this paragraph is $100 for each
day for each individual with respect to which such a failure occurs.
`(ii) CONSIDERATIONS IN
IMPOSITION- In determining the amount of any penalty to be assessed
under this paragraph, the Secretary shall take into account the previous
record of compliance of the entity being assessed with the applicable
provisions of this part and the gravity of the violation.
`(iii) LIMITATIONS-
`(I) PENALTY NOT TO
APPLY WHERE FAILURE NOT DISCOVERED EXERCISING REASONABLE DILIGENCE- No
civil money penalty shall be imposed under this paragraph on any failure
during any period for which it is established to the satisfaction of the
Secretary that none of the entities against whom the penalty would be
imposed knew, or exercising reasonable diligence would have known, that
such failure existed.
`(II) PENALTY NOT TO
APPLY TO FAILURES CORRECTED WITHIN 30 DAYS- No civil money penalty shall
be imposed under this paragraph on any failure if such failure was due
to reasonable cause and not to willful neglect, and such failure is
corrected during the 30-day period beginning on the first day any of the
entities against whom the penalty would be imposed knew, or exercising
reasonable diligence would have known, that such failure existed.
`(D) ADMINISTRATIVE
REVIEW-
`(i) OPPORTUNITY FOR
HEARING- The entity assessed shall be afforded an opportunity for
hearing by the Secretary upon request made within 30 days after the date
of the issuance of a notice of assessment. In such hearing the decision
shall be made on the record pursuant to section 554 of title 5, United
States Code. If no hearing is requested, the assessment shall constitute
a final and unappealable order.
`(ii) HEARING
PROCEDURE- If a hearing is requested, the initial agency decision shall
be made by an administrative law judge, and such decision shall become
the final order unless the Secretary modifies or vacates the decision.
Notice of intent to modify or vacate the decision of the administrative
law judge shall be issued to the parties within 30 days after the date
of the decision of the judge. A final order which takes effect under
this paragraph shall be subject to review only as provided under
subparagraph (E).
`(E) JUDICIAL REVIEW-
`(i) FILING OF ACTION
FOR REVIEW- Any entity against whom an order imposing a civil money
penalty has been entered after an agency hearing under this paragraph
may obtain review by the United States district court for any district
in which such entity is located or the United States District Court for
the District of Columbia by filing a notice of appeal in such court
within 30 days from the date of such order, and simultaneously sending a
copy of such notice by registered mail to the Secretary.
`(ii) CERTIFICATION OF
ADMINISTRATIVE RECORD- The Secretary shall promptly certify and file in
such court the record upon which the penalty was imposed.
`(iii) STANDARD FOR
REVIEW- The findings of the Secretary shall be set aside only if found
to be unsupported by substantial evidence as provided by section
706(2)(E) of title 5, United States Code.
`(iv) APPEAL- Any final
decision, order, or judgment of the district court concerning such
review shall be subject to appeal as provided in chapter 83 of title 28
of such Code.
`(F) FAILURE TO PAY
ASSESSMENT; MAINTENANCE OF ACTION-
`(i) FAILURE TO PAY
ASSESSMENT- If any entity fails to pay an assessment after it has become
a final and unappealable order, or after the court has entered final
judgment in favor of the Secretary, the Secretary shall refer the matter
to the Attorney General who shall recover the amount assessed by action
in the appropriate United States district court.
`(ii) NONREVIEWABILITY-
In such action the validity and appropriateness of the final order
imposing the penalty shall not be subject to review.
`(G) PAYMENT OF
PENALTIES- Except as otherwise provided, penalties collected under this
paragraph shall be paid to the Secretary (or other officer) imposing the
penalty and shall be available without appropriation and until expended
for the purpose of enforcing the provisions with respect to which the
penalty was imposed.
`SEC. 2723. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.
`(a) CONTINUED
APPLICABILITY OF STATE LAW WITH RESPECT TO HEALTH INSURANCE ISSUERS-
`(1) IN GENERAL- Subject
to paragraph (2) and except as provided in subsection (b), this part and
part C insofar as it relates to this part shall not be construed to
supersede any provision of State law which establishes, implements, or
continues in effect any standard or requirement solely relating to
health insurance issuers in connection with group health insurance
coverage except to the extent that such standard or requirement prevents
the application of a requirement of this part.
`(2) CONTINUED
PREEMPTION WITH RESPECT TO GROUP HEALTH PLANS- Nothing in this part
shall be construed to affect or modify the provisions of section 514 of
the Employee Retirement Income Security Act of 1974 with respect to
group health plans.
`(b) SPECIAL RULES IN
CASE OF PORTABILITY REQUIREMENTS-
`(1) IN GENERAL- Subject
to paragraph (2), the provisions of this part relating to health
insurance coverage offered by a health insurance issuer supersede any
provision of State law which establishes, implements, or continues in
effect a standard or requirement applicable to imposition of a
preexisting condition exclusion specifically governed by section 701
which differs from the standards or requirements specified in such
section.
`(2) EXCEPTIONS- Only in
relation to health insurance coverage offered by a health insurance
issuer, the provisions of this part do not supersede any provision of
State law to the extent that such provision--
`(i) substitutes for
the reference to `6-month period' in section 2701(a)(1) a reference to
any shorter period of time;
`(ii) substitutes for
the reference to `12 months' and `18 months' in section 2701(a)(2) a
reference to any shorter period of time;
`(iii) substitutes for
the references to `63' days in sections 2701(c)(2)(A) and 2701(d)(4)(A)
a reference to any greater number of days;
`(iv) substitutes for
the reference to `30-day period' in sections 2701(b)(2) and 2701(d)(1) a
reference to any greater period;
`(v) prohibits the
imposition of any preexisting condition exclusion in cases not described
in section 2701(d) or expands the exceptions described in such section;
`(vi) requires special
enrollment periods in addition to those required under section 2701(f);
or
`(vii) reduces the
maximum period permitted in an affiliation period under section
2701(g)(1)(B).
`(c) RULES OF
CONSTRUCTION- Nothing in this part shall be construed as requiring a
group health plan or health insurance coverage to provide specific
benefits under the terms of such plan or coverage.
`(d) DEFINITIONS- For
purposes of this section--
`(1) STATE LAW- The term
`State law' includes all laws, decisions, rules, regulations, or other
State action having the effect of law, of any State. A law of the United
States applicable only to the District of Columbia shall be treated as a
State law rather than a law of the United States.
`(2) STATE- The term
`State' includes a State (including the Northern Mariana Islands), any
political subdivisions of a State or such Islands, or any agency or
instrumentality of either.
`Part C--Definitions; Miscellaneous Provisions
`SEC. 2791. DEFINITIONS.
`(a) GROUP HEALTH PLAN-
`(1) DEFINITION- The
term `group health plan' means an employee welfare benefit plan (as
defined in section 3(1) of the Employee Retirement Income Security Act
of 1974) to the extent that the plan provides medical care (as defined
in paragraph (2)) and including items and services paid for as medical
care) to employees or their dependents (as defined under the terms of
the plan) directly or through insurance, reimbursement, or otherwise.
`(2) MEDICAL CARE- The
term `medical care' means amounts paid for--
`(A) the diagnosis,
cure, mitigation, treatment, or prevention of disease, or amounts paid
for the purpose of affecting any structure or function of the body,
`(B) amounts paid for
transportation primarily for and essential to medical care referred to
in subparagraph (A), and
`(C) amounts paid for
insurance covering medical care referred to in subparagraphs (A) and
(B).
`(3) TREATMENT OF
CERTAIN PLANS AS GROUP HEALTH PLAN FOR NOTICE PROVISION- A program under
which creditable coverage described in subparagraph (C), (D), (E), or
(F) of section 2701(c)(1) is provided shall be treated as a group health
plan for purposes of applying section 2701(e).
`(b) DEFINITIONS
RELATING TO HEALTH INSURANCE-
`(1) HEALTH INSURANCE
COVERAGE- The term `health insurance coverage' means benefits consisting
of medical care (provided directly, through insurance or reimbursement,
or otherwise and including items and services paid for as medical care)
under any hospital or medical service policy or certificate, hospital or
medical service plan contract, or health maintenance organization
contract offered by a health insurance issuer.
`(2) HEALTH INSURANCE
ISSUER- The term `health insurance issuer' means an insurance company,
insurance service, or insurance organization (including a health
maintenance organization, as defined in paragraph (3)) which is licensed
to engage in the business of insurance in a State and which is subject
to State law which regulates insurance (within the meaning of section
514(b)(2) of the Employee Retirement Income Security Act of 1974). Such
term does not include a group health plan.
`(3) HEALTH MAINTENANCE
ORGANIZATION- The term `health maintenance organization' means--
`(A) a Federally
qualified health maintenance organization (as defined in section
1301(a)),
`(B) an organization
recognized under State law as a health maintenance organization, or
`(C) a similar
organization regulated under State law for solvency in the same manner
and to the same extent as such a health maintenance organization.
`(4) GROUP HEALTH
INSURANCE COVERAGE- The term `group health insurance coverage' means, in
connection with a group health plan, health insurance coverage offered
in connection with such plan.
`(5) INDIVIDUAL HEALTH
INSURANCE COVERAGE- The term `individual health insurance coverage'
means health insurance coverage offered to individuals in the individual
market, but does not include short-term limited duration insurance.
`(c) EXCEPTED BENEFITS-
For purposes of this title, the term `excepted benefits' means benefits
under one or more (or any combination thereof) of the following:
`(1) BENEFITS NOT
SUBJECT TO REQUIREMENTS-
`(A) Coverage only for
accident, or disability income insurance, or any combination thereof.
`(B) Coverage issued as
a supplement to liability insurance.
`(C) Liability
insurance, including general liability insurance and automobile
liability insurance.
`(D) Workers'
compensation or similar insurance.
`(E) Automobile medical
payment insurance.
`(F) Credit-only
insurance.
`(G) Coverage for
on-site medical clinics.
`(H) Other similar
insurance coverage, specified in regulations, under which benefits for
medical care are secondary or incidental to other insurance benefits.
`(2) BENEFITS NOT
SUBJECT TO REQUIREMENTS IF OFFERED SEPARATELY-
`(A) Limited scope
dental or vision benefits.
`(B) Benefits for
long-term care, nursing home care, home health care, community-based
care, or any combination thereof.
`(C) Such other
similar, limited benefits as are specified in regulations.
`(3) BENEFITS NOT
SUBJECT TO REQUIREMENTS IF OFFERED AS INDEPENDENT, NONCOORDINATED
BENEFITS-
`(A) Coverage only for
a specified disease or illness.
`(B) Hospital indemnity
or other fixed indemnity insurance.
`(4) BENEFITS NOT
SUBJECT TO REQUIREMENTS IF OFFERED AS SEPARATE INSURANCE POLICY-
Medicare supplemental health insurance (as defined under section
1882(g)(1) of the Social Security Act), coverage supplemental to the
coverage provided under chapter 55 of title 10, United States Code, and
similar supplemental coverage provided to coverage under a group health
plan.
`(d) OTHER DEFINITIONS-
`(1) APPLICABLE STATE
AUTHORITY- The term `applicable State authority' means, with respect to
a health insurance issuer in a State, the State insurance commissioner
or official or officials designated by the State to enforce the
requirements of this title for the State involved with respect to such
issuer.
`(2) BENEFICIARY- The
term `beneficiary' has the meaning given such term under section 3(8) of
the Employee Retirement Income Security Act of 1974.
`(3) BONA FIDE
ASSOCIATION- The term `bona fide association' means, with respect to
health insurance coverage offered in a State, an association which--
`(A) has been actively
in existence for at least 5 years;
`(B) has been formed
and maintained in good faith for purposes other than obtaining
insurance;
`(C) does not condition
membership in the association on any health status-related factor
relating to an individual (including an employee of an employer or a
dependent of an employee);
`(D) makes health
insurance coverage offered through the association available to all
members regardless of any health status-related factor relating to such
members (or individuals eligible for coverage through a member);
`(E) does not make
health insurance coverage offered through the association available
other than in connection with a member of the association; and
`(F) meets such
additional requirements as may be imposed under State law.
`(4) COBRA CONTINUATION
PROVISION- The term `COBRA continuation provision' means any of the
following:
`(A) Section 4980B of
the Internal Revenue Code of 1986, other than subsection (f)(1) of such
section insofar as it relates to pediatric vaccines.
`(B) Part 6 of subtitle
B of title I of the Employee Retirement Income Security Act of 1974,
other than section 609 of such Act.
`(C) Title XXII of this
Act.
`(5) EMPLOYEE- The term
`employee' has the meaning given such term under section 3(6) of the
Employee Retirement Income Security Act of 1974.
`(6) EMPLOYER- The term
`employer' has the meaning given such term under section 3(5) of the
Employee Retirement Income Security Act of 1974, except that such term
shall include only employers of two or more employees.
`(7) CHURCH PLAN- The
term `church plan' has the meaning given such term under section 3(33)
of the Employee Retirement Income Security Act of 1974.
`(8) GOVERNMENTAL PLAN-
(A) The term `governmental plan' has the meaning given such term under
section 3(32) of the Employee Retirement Income Security Act of 1974 and
any Federal governmental plan.
`(B) FEDERAL
GOVERNMENTAL PLAN- The term `Federal governmental plan' means a
governmental plan established or maintained for its employees by the
Government of the United States or by any agency or instrumentality of
such Government.
`(C) NON-FEDERAL
GOVERNMENTAL PLAN- The term `non-Federal governmental plan' means a
governmental plan that is not a Federal governmental plan.
`(9) HEALTH
STATUS-RELATED FACTOR- The term `health status-related factor' means any
of the factors described in section 2702(a)(1).
`(10) NETWORK PLAN- The
term `network plan' means health insurance coverage of a health
insurance issuer under which the financing and delivery of medical care
(including items and services paid for as medical care) are provided, in
whole or in part, through a defined set of providers under contract with
the issuer.
`(11) PARTICIPANT- The
term `participant' has the meaning given such term under section 3(7) of
the Employee Retirement Income Security Act of 1974.
`(12) PLACED FOR
ADOPTION DEFINED- The term `placement', or being `placed', for adoption,
in connection with any placement for adoption of a child with any
person, means the assumption and retention by such person of a legal
obligation for total or partial support of such child in anticipation of
adoption of such child. The child's placement with such person
terminates upon the termination of such legal obligation.
`(13) PLAN SPONSOR- The
term `plan sponsor' has the meaning given such term under section
3(16)(B) of the Employee Retirement Income Security Act of 1974.
`(14) STATE- The term
`State' means each of the several States, the District of Columbia,
Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern
Mariana Islands.
`(e) DEFINITIONS
RELATING TO MARKETS AND SMALL EM-PLOYERS- For purposes of this title:
`(1) INDIVIDUAL MARKET-
`(A) IN GENERAL- The
term `individual market' means the market for health insurance coverage
offered to individuals other than in connection with a group health
plan.
`(B) TREATMENT OF VERY
SMALL GROUPS-
`(i) IN GENERAL-
Subject to clause (ii), such terms includes coverage offered in
connection with a group health plan that has fewer than two participants
as current employees on the first day of the plan year.
`(ii) STATE EXCEPTION-
Clause (i) shall not apply in the case of a State that elects to
regulate the coverage described in such clause as coverage in the small
group market.
`(2) LARGE EMPLOYER- The
term `large employer' means, in connection with a group health plan with
respect to a calendar year and a plan year, an employer who employed an
average of at least 51 employees on business
days during the preceding calendar year and who employs at least 2
employees on the first day of the plan year.
`(3) LARGE GROUP MARKET-
The term `large group market' means the health insurance market under
which individuals obtain health insurance coverage (directly or through
any arrangement) on behalf of themselves (and their dependents) through
a group health plan maintained by a large employer.
`(4) SMALL EMPLOYER- The
term `small employer' means, in connection with a group health plan with
respect to a calendar year and a plan year, an employer who employed an
average of at least 2 but not more than 50 employees on business days
during the preceding calendar year and who employs at least 2 employees
on the first day of the plan year.
`(5) SMALL GROUP MARKET-
The term `small group market' means the health insurance market under
which individuals obtain health insurance coverage (directly or through
any arrangement) on behalf of themselves (and their dependents) through
a group health plan maintained by a small employer.
`(6) APPLICATION OF
CERTAIN RULES IN DETERMINATION OF EMPLOYER SIZE- For purposes of this
subsection--
`(A) APPLICATION OF
AGGREGATION RULE FOR EMPLOYERS- all persons treated as a single employer
under subsection (b), (c), (m), or (o) of section 414 of the Internal
Revenue Code of 1986 shall be treated as 1 employer.
`(B) EMPLOYERS NOT IN
EXISTENCE IN PRECEDING YEAR- In the case of an employer which was not in
existence throughout the preceding calendar year, the determination of
whether such employer is a small or large employer shall be based on the
average number of employees that it is reasonably expected such employer
will employ on business days in the current calendar year.
`(C) PREDECESSORS- Any
reference in this subsection to an employer shall include a reference to
any predecessor of such employer.
`SEC. 2792. REGULATIONS.
`The Secretary,
consistent with section 104 of the Health Care Portability and
Accountability Act of 1996, may promulgate such regulations as may be
necessary or appropriate to carry out the provisions of this title. The
Secretary may promulgate any interim final rules as the Secretary
determines are appropriate to carry out this title.'.
(b) APPLICATION OF RULES
BY CERTAIN HEALTH MAINTENANCE ORGANIZATIONS- Section 1301 of such Act
(42 U.S.C. 300e) is amended by adding at the end the following new
subsection:
`(d) An organization
that offers health benefits coverage shall not be considered as failing
to meet the requirements of this section notwithstanding that it
provides, with respect to coverage offered in connection with a group
health plan in the small or large group market (as defined in section
2791(e)), an affiliation period consistent with the provisions of
section 2701(g).'.
(c) EFFECTIVE DATE-
(1) IN GENERAL- Except
as provided in this subsection, part A of title XXVII of the Public
Health Service Act (as added by subsection (a)) shall apply with respect
to group health plans, and health insurance coverage offered in
connection with group health plans, for plan years beginning after June
30, 1997.
(2) DETERMINATION OF
CREDITABLE COVERAGE-
(A) PERIOD OF COVERAGE-
(i) IN GENERAL- Subject
to clause (ii), no period before July 1, 1996, shall be taken into
account under part A of title XXVII of the Public Health Service Act (as
added by this section) in determining creditable coverage.
(ii) SPECIAL RULE FOR
CERTAIN PERIODS- The Secretary of Health and Human Services, consistent
with section 104, shall provide for a process whereby individuals who
need to establish creditable coverage for periods before July 1, 1996,
and who would have such coverage credited but for clause (i) may be
given credit for creditable coverage for such periods through the
presentation of documents or other means.
(B) CERTIFICATIONS,
ETC-
(i) IN GENERAL- Subject
to clauses (ii) and (iii), subsection (e) of section 2701 of the Public
Health Service Act (as added by this section) shall apply to events
occurring after June 30, 1996.
(ii) NO CERTIFICATION
REQUIRED TO BE PROVIDED BEFORE JUNE 1, 1997- In no case is a
certification required to be provided under such subsection before June
1, 1997.
(iii) CERTIFICATION
ONLY ON WRITTEN REQUEST FOR EVENTS OCCURRING BEFORE OCTOBER 1, 1996- In
the case of an event occurring after June 30, 1996, and before October
1, 1996, a certification is not required to be provided under such
subsection unless an individual (with respect to whom the certification
is otherwise required to be made) requests such certification in
writing.
(C) TRANSITIONAL RULE-
In the case of an individual who seeks to establish creditable coverage
for any period for which certification is not required because it
relates to an event occurring before June 30, 1996--
(i) the individual may
present other credible evidence of such coverage in order to establish
the period of creditable coverage; and
(ii) a group health
plan and a health insurance issuer shall not be subject to any penalty
or enforcement action with respect to the plan's or issuer's crediting
(or not crediting) such coverage if the plan or issuer has sought to
comply in good faith with the applicable requirements under the
amendments made by this section.
(3) SPECIAL RULE FOR
COLLECTIVE BARGAINING AGREEMENTS- Except as provided in paragraph
(2)(B), in the case of a group health plan maintained pursuant to 1 or
more collective bargaining agreements between employee representatives
and one or more employers ratified before the date of the enactment of
this Act, part A of title XXVII of the Public Health Service Act (other
than section 2701(e) thereof) shall not apply to plan years beginning
before the later of--
(A) the date on which
the last of the collective bargaining agreements relating to the plan
terminates (determined without regard to any extension thereof agreed to
after the date of the enactment of this Act), or
(B) July 1, 1997.
For purposes of
subparagraph (A), any plan amendment made pursuant to a collective
bargaining agreement relating to the plan which amends the plan solely
to conform to any requirement of such part shall not be treated as a
termination of such collective bargaining agreement.
(4) TIMELY REGULATIONS-
The Secretary of Health and Human Services, consistent with section 104,
shall first issue by not later than April 1, 1997, such regulations as
may be necessary to carry out the amendments made by this section and
section 111.
(5) LIMITATION ON
ACTIONS- No enforcement action shall be taken, pursuant to the
amendments made by this section, against a group health plan or health
insurance issuer with respect to a violation of a requirement imposed by
such amendments before January 1, 1998, or, if later, the date of
issuance of regulations referred to in paragraph (4), if the plan or
issuer has sought to comply in good faith with such requirements.
(d) MISCELLANEOUS
CORRECTION- Section 2208(1) of the Public Health Service Act (42 U.S.C.
300bb-8(1)) is amended by striking `section 162(i)(2)' and inserting
`5000(b)'.
SEC.
103. REFERENCE TO IMPLEMENTATION THROUGH THE INTERNAL REVENUE CODE OF
1986.
For provisions amending
the Internal Revenue Code of 1986 to provide for application and
enforcement of rules for group health plans similar to those provided
under the amendments made by section 101(a), see section 401.
SEC. 104. ASSURING COORDINATION.
The Secretary of the
Treasury, the Secretary of Health and Human Services, and the Secretary
of Labor shall ensure, through the execution of an interagency
memorandum of understanding among such Secretaries, that--
(1) regulations,
rulings, and interpretations issued by such Secretaries relating to the
same matter over which two or more such Secretaries have responsibility
under this subtitle (and the amendments made by this subtitle and
section 401) are administered so as to have the same effect at all
times; and
(2) coordination of
policies relating to enforcing the same requirements through such
Secretaries in order to have a coordinated enforcement strategy that
avoids duplication of enforcement efforts and assigns priorities in
enforcement.
Subtitle B--Individual
Market Rules
SEC. 111. AMENDMENT TO PUBLIC HEALTH SERVICE ACT.
(a) IN GENERAL- Title
XXVII of the Public Health Service Act, as added by section 102(a) of
this Act, is amended by inserting after part A the following new part:
`Part B--Individual Market Rules
`SEC.
2741. GUARANTEED AVAILABILITY OF INDIVIDUAL HEALTH INSURANCE COVERAGE TO
CERTAIN INDIVIDUALS WITH PRIOR GROUP COVERAGE.
`(a) GUARANTEED
AVAILABILITY-
`(1) IN GENERAL- Subject
to the succeeding subsections of this section and section 2744, each
health insurance issuer that offers health insurance coverage (as
defined in section 2791(b)(1)) in the individual market in a State may
not, with respect to an eligible individual (as defined in subsection
(b)) desiring to enroll in individual health insurance coverage--
`(A) decline to offer
such coverage to, or deny enrollment of, such individual; or
`(B) impose any
preexisting condition exclusion (as defined in section 2701(b)(1)(A))
with respect to such coverage.
`(2) SUBSTITUTION BY
STATE OF ACCEPTABLE ALTERNATIVE MECHANISM- The requirement of paragraph
(1) shall not apply to health insurance coverage offered in the
individual market in a State in which the State is implementing an
acceptable alternative mechanism under section 2744.
`(b) ELIGIBLE INDIVIDUAL
DEFINED- In this part, the term `eligible individual' means an
individual--
`(1)(A) for whom, as of
the date on which the individual seeks coverage under this section, the
aggregate of the periods of creditable coverage (as defined in section
2701(c)) is 18 or more months and (B) whose most recent prior creditable
coverage was under a group health plan, governmental plan, or church
plan (or health insurance coverage offered in connection with any such
plan);
`(2) who is not eligible
for coverage under (A) a group health plan, (B) part A or part B of
title XVIII of the Social Security Act, or (C) a State plan under title
XIX of such Act (or any successor program), and does not have other
health insurance coverage;
`(3) with respect to
whom the most recent coverage within the coverage period described in
paragraph (1)(A) was not terminated based on a factor described in
paragraph (1) or (2) of section 2712(b) (relating to nonpayment of
premiums or fraud);
`(4) if the individual
had been offered the option of continuation coverage under a COBRA
continuation provision or under a similar State program, who elected
such coverage; and
`(5) who, if the
individual elected such continuation coverage, has exhausted such
continuation coverage under such provision or program.
`(c) ALTERNATIVE
COVERAGE PERMITTED WHERE NO STATE MECHANISM-
`(1) IN GENERAL- In the
case of health insurance coverage offered in the individual market in a
State in which the State is not implementing an acceptable alternative
mechanism under section 2744, the health insurance issuer may elect to
limit the coverage offered under subsection (a) so long as it offers at
least two different policy forms of health insurance coverage both of
which--
`(A) are designed for,
made generally available to, and actively marketed to, and enroll both
eligible and other individuals by the issuer; and
`(B) meet the
requirement of paragraph (2) or (3), as elected by the issuer.
For purposes of this
subsection, policy forms which have different cost-sharing arrangements
or different riders shall be considered to be different policy forms.
`(2) CHOICE OF MOST
POPULAR POLICY FORMS- The requirement of this paragraph is met, for
health insurance coverage policy forms offered by an issuer in the
individual market, if the issuer offers the policy forms for individual
health insurance coverage with the largest, and next to
largest, premium volume of all such policy forms offered by the
issuer in the State or applicable marketing or service area (as may be
prescribed in regulation) by the issuer in the individual market in the
period involved.
`(3) CHOICE OF 2 POLICY
FORMS WITH REPRESENTATIVE COVERAGE-
`(A) IN GENERAL- The
requirement of this paragraph is met, for health insurance coverage
policy forms offered by an issuer in the individual market, if the
issuer offers a lower-level coverage policy form (as defined in
subparagraph (B)) and a higher-level coverage policy form (as defined in
subparagraph (C)) each of which includes benefits substantially similar
to other individual health insurance coverage offered by the issuer in
that State and each of which is covered under a method described in
section 2744(c)(3)(A) (relating to risk adjustment, risk spreading, or
financial subsidization).
`(B) LOWER-LEVEL OF
COVERAGE DESCRIBED- A policy form is described in this subparagraph if
the actuarial value of the benefits under the coverage is at least 85
percent but not greater than 100 percent of a weighted average
(described in subparagraph (D)).
`(C) HIGHER-LEVEL OF
COVERAGE DESCRIBED- A policy form is described in this subparagraph if--
`(i) the actuarial
value of the benefits under the coverage is at least 15 percent greater
than the actuarial value of the coverage described in subparagraph (B)
offered by the issuer in the area involved; and
`(ii) the actuarial
value of the benefits under the coverage is at least 100 percent but not
greater than 120 percent of a weighted average (described in
subparagraph (D)).
`(D) WEIGHTED AVERAGE-
For purposes of this paragraph, the weighted average described in this
subparagraph is the average actuarial value of the benefits provided by
all the health insurance coverage issued (as elected by the issuer)
either by that issuer or by all issuers in the State in the individual
market during the previous year (not including coverage issued under
this section), weighted by enrollment for the different coverage.
`(4) ELECTION- The
issuer elections under this subsection shall apply uniformly to all
eligible individuals in the State for that issuer. Such an election
shall be effective for policies offered during a period of not shorter
than 2 years.
`(5) ASSUMPTIONS- For
purposes of paragraph (3), the actuarial value of benefits provided
under individual health insurance coverage shall be calculated based on
a standardized population and a set of standardized utilization and cost
factors.
`(d) SPECIAL RULES FOR
NETWORK PLANS-
`(1) IN GENERAL- In the
case of a health insurance issuer that offers health insurance coverage
in the individual market through a network plan, the issuer may--
`(A) limit the
individuals who may be enrolled under such coverage to those who live,
reside, or work within the service area for such network plan; and
`(B) within the service
area of such plan, deny such coverage to such individuals if the issuer
has demonstrated, if required, to the applicable State authority that--
`(i) it will not have
the capacity to deliver services adequately to additional individual
enrollees because of its obligations to existing group contract holders
and enrollees and individual enrollees, and
`(ii) it is applying
this paragraph uniformly to individuals without regard to any health
status-related factor of such individuals and without regard to whether
the individuals are eligible individuals.
`(2) 180-DAY SUSPENSION
UPON DENIAL OF COVERAGE- An issuer, upon denying health insurance
coverage in any service area in accordance with paragraph (1)(B), may
not offer coverage in the individual market within such service area for
a period of 180 days after such coverage is denied.
`(e) APPLICATION OF
FINANCIAL CAPACITY LIMITS-
`(1) IN GENERAL- A
health insurance issuer may deny health insurance coverage in the
individual market to an eligible individual if the issuer has
demonstrated, if required, to the applicable State authority that--
`(A) it does not have
the financial reserves necessary to underwrite additional coverage; and
`(B) it is applying
this paragraph uniformly to all individuals in the individual market in
the State consistent with applicable State law and without regard to any
health status-related factor of such individuals and without regard to
whether the individuals are eligible individuals.
`(2) 180-DAY SUSPENSION
UPON DENIAL OF COVERAGE- An issuer upon denying individual health
insurance coverage in any service area in accordance with paragraph (1)
may not offer such coverage in the individual market within such service
area for a period of 180 days after the date such coverage is denied or
until the issuer has demonstrated, if required under applicable State
law, to the applicable State authority that the issuer has sufficient
financial reserves to underwrite additional coverage, whichever is
later. A State may provide for the application of this paragraph on a
service-area-specific basis.
`(e) MARKET
REQUIREMENTS-
`(1) IN GENERAL- The
provisions of subsection (a) shall not be construed to require that a
health insurance issuer offering health insurance coverage only in
connection with group health plans or through one or more bona fide
associations, or both, offer such health insurance coverage in the
individual market.
`(2) CONVERSION
POLICIES- A health insurance issuer offering health insurance coverage
in connection with group health plans under this title shall not be
deemed to be a health insurance issuer offering individual health
insurance coverage solely because such issuer offers a conversion
policy.
`(f) CONSTRUCTION-
Nothing in this section shall be construed--
`(1) to restrict the
amount of the premium rates that an issuer may charge an individual for
health insurance coverage provided in the individual market under
applicable State law; or
`(2) to prevent a health
insurance issuer offering health insurance coverage in the individual
market from establishing premium discounts or rebates or modifying
otherwise applicable copayments or deductibles in return for adherence
to programs of health promotion and disease prevention.
`SEC.
2742. GUARANTEED RENEWABILITY OF INDIVIDUAL HEALTH INSURANCE COVERAGE.
`(a) IN GENERAL- Except
as provided in this section, a health insurance issuer that provides
individual health insurance coverage to an individual shall renew or
continue in force such coverage at the option of the individual.
`(b) GENERAL EXCEPTIONS-
A health insurance issuer may nonrenew or discontinue health insurance
coverage of an individual in the individual market based only on one or
more of the following:
`(1) NONPAYMENT OF
PREMIUMS- The individual has failed to pay premiums or contributions in
accordance with the terms of the health insurance coverage or the issuer
has not received timely premium payments.
`(2) FRAUD- The
individual has performed an act or practice that constitutes fraud or
made an intentional misrepresentation of material fact under the terms
of the coverage.
`(3) TERMINATION OF
PLAN- The issuer is ceasing to offer coverage in the individual market
in accordance with subsection (c) and applicable State law.
`(4) MOVEMENT OUTSIDE
SERVICE AREA- In the case of a health insurance issuer that offers
health insurance coverage in the market through a network plan, the
individual no longer resides, lives, or works in the service area (or in
an area for which the issuer is authorized to do business) but only if
such coverage is terminated under this paragraph uniformly without
regard to any health status-related factor of covered individuals.
`(5) ASSOCIATION
MEMBERSHIP CEASES- In the case of health insurance coverage that is made
available in the individual market only through one or more bona fide
associations, the membership of the individual in the association (on
the basis of which the coverage is provided) ceases but only if such
coverage is terminated under this paragraph uniformly without regard to
any health status-related factor of covered individuals.
`(c) REQUIREMENTS FOR
UNIFORM TERMINATION OF COVERAGE-
`(1) PARTICULAR TYPE OF
COVERAGE NOT OFFERED- In any case in which an issuer decides to
discontinue offering a particular type of health insurance coverage
offered in the individual market, coverage of such type may be
discontinued by the issuer only if--
`(A) the issuer
provides notice to each covered individual provided coverage of this
type in such market of such discontinuation at least 90 days prior to
the date of the discontinuation of such coverage;
`(B) the issuer offers
to each individual in the individual market provided coverage of this
type, the option to purchase any other individual health insurance
coverage currently being offered by the issuer for individuals in such
market; and
`(C) in exercising the
option to discontinue coverage of this type and in offering the option
of coverage under subparagraph (B), the issuer acts uniformly without
regard to any health status-related factor of enrolled individuals or
individuals who may become eligible for such coverage.
`(2) DISCONTINUANCE OF
ALL COVERAGE-
`(A) IN GENERAL-
Subject to subparagraph (C), in any case in which a health insurance
issuer elects to discontinue offering all health insurance coverage in
the individual market in a State, health insurance coverage may be
discontinued by the issuer only if--
`(i) the issuer
provides notice to the applicable State authority and to each individual
of such discontinuation at least 180 days prior to the date of the
expiration of such coverage, and
`(ii) all health
insurance issued or delivered for issuance in the State in such market
are discontinued and coverage under such health insurance coverage in
such market is not renewed.
`(B) PROHIBITION ON
MARKET REENTRY- In the case of a discontinuation under subparagraph (A)
in the individual market, the issuer may not provide for the issuance of
any health insurance coverage in the market and State involved during
the 5-year period beginning on the date of the discontinuation of the
last health insurance coverage not so renewed.
`(d) EXCEPTION FOR
UNIFORM MODIFICATION OF COVERAGE- At the time of coverage renewal, a
health insurance issuer may modify the health insurance coverage for a
policy form offered to individuals in the individual market so long as
such modification is consistent with State law and effective on a
uniform basis among all individuals with that policy form.
`(e) APPLICATION TO
COVERAGE OFFERED ONLY THROUGH ASSOCIATIONS- In applying this section in
the case of health insurance coverage that is made available by a health
insurance issuer in the individual market to individuals only through
one or more associations, a reference to an `individual' is deemed to
include a reference to such an association (of which the individual is a
member).
`SEC. 2743. CERTIFICATION OF COVERAGE.
`The provisions of
section 2701(e) shall apply to health insurance coverage offered by a
health insurance issuer in the individual market in the same manner as
it applies to health insurance coverage offered by a health insurance
issuer in connection with a group health plan in the small or large
group market.
`SEC. 2744. STATE FLEXIBILITY IN INDIVIDUAL MARKET REFORMS.
`(a) WAIVER OF
REQUIREMENTS WHERE IMPLEMENTATION OF ACCEPTABLE ALTERNATIVE MECHANISM-
`(1) IN GENERAL- The
requirements of section 2741 shall not apply with respect to health
insurance coverage offered in the individual market in the State so long
as a State is found to be implementing, in accordance with this section
and consistent with section 2746(b), an alternative mechanism (in this
section referred to as an `acceptable alternative mechanism')--
`(A) under which all
eligible individuals are provided a choice of health insurance coverage;
`(B) under which such
coverage does not impose any preexisting condition exclusion with
respect to such coverage;
`(C) under which such
choice of coverage includes at least one policy form of coverage that is
comparable to comprehensive health insurance coverage offered in the
individual market in such State or that is comparable to a standard
option of coverage available under the group or individual health
insurance laws of such State; and
`(D) in a State which
is implementing--
`(i) a model act
described in subsection (c)(1),
`(ii) a qualified high
risk pool described in subsection (c)(2), or
`(iii) a mechanism
described in subsection (c)(3).
`(2) PERMISSIBLE FORMS
OF MECHANISMS- A private or public individual health insurance mechanism
(such as a health insurance coverage pool or programs, mandatory group
conversion policies, guaranteed issue of one or more plans of individual
health insurance coverage, or open enrollment by one or more health
insurance issuers), or combination of such mechanisms, that is designed
to provide access to health benefits for individuals in the individual
market in the State in accordance with this section may constitute an
acceptable alternative mechanism.
`(b) APPLICATION OF
ACCEPTABLE ALTERNATIVE MECHANISMS-
`(1) PRESUMPTION-
`(A) IN GENERAL-
Subject to the succeeding provisions of this subsection, a State is
presumed to be implementing an acceptable alternative mechanism in
accordance with this section as of July 1, 1997, if, by not later than
April 1, 1997, the chief executive officer of a State--
`(i) notifies the
Secretary that the State has enacted or intends to enact (by not later
than January 1, 1998, or July 1, 1998, in the case of a State described
in subparagraph (B)(ii)) any necessary legislation to provide for the
implementation of a mechanism reasonably designed to be an acceptable
alternative mechanism as of January 1, 1998, (or, in the case of a State
described in subparagraph (B)(ii), July 1, 1998); and
`(ii) provides the
Secretary with such information as the Secretary may require to review
the mechanism and its implementation (or proposed implementation) under
this subsection.
`(B) DELAY PERMITTED
FOR CERTAIN STATES-
`(i) EFFECT OF DELAY-
In the case of a State described in clause (ii) that provides notice
under subparagraph (A)(i), for the presumption to continue on and after
July 1, 1998, the chief executive officer of the State by April 1,
1998--
`(I) must notify the
Secretary that the State has enacted any necessary legislation to
provide for the implementation of a mechanism reasonably designed to be
an acceptable alternative mechanism as of July 1, 1998; and
`(II) must provide the
Secretary with such information as the Secretary may require to review
the mechanism and its implementation (or proposed implementation) under
this subsection.
`(ii) STATES DESCRIBED-
A State described in this clause is a State that has a legislature that
does not meet within the 12-month period beginning on the date of
enactment of this Act.
`(C) CONTINUED
APPLICATION- In order for a mechanism to continue to be presumed to be
an acceptable alternative mechanism, the State shall provide the
Secretary every 3 years with information described in subparagraph
(A)(ii) or (B)(i)(II) (as the case may be).
`(2) NOTICE- If the
Secretary finds, after review of information provided under paragraph
(1) and in consultation with the chief executive officer of the State
and the insurance commissioner or chief insurance regulatory official of
the State, that such a mechanism is not an acceptable alternative
mechanism or is not (or no longer) being implemented, the Secretary--
`(A) shall notify the
State of--
`(i) such preliminary
determination, and
`(ii) the consequences
under paragraph (3) of a failure to implement such a mechanism; and
`(B) shall permit the
State a reasonable opportunity in which to modify the mechanism (or to
adopt another mechanism) in a manner so that may be an acceptable
alternative mechanism or to provide for implementation of such a
mechanism.
`(3) FINAL
DETERMINATION- If, after providing notice and opportunity under
paragraph (2), the Secretary finds that the mechanism is not an
acceptable alternative mechanism or the State is not implementing such a
mechanism, the Secretary shall notify the State that the State is no
longer considered to be implementing an acceptable alternative mechanism
and that the requirements of section 2741 shall apply to health
insurance coverage offered in the individual market in the State,
effective as of a date specified in the notice.
`(4) LIMITATION ON
SECRETARIAL AUTHORITY- The Secretary shall not make a determination
under paragraph (2) or (3) on any basis other than the basis that a
mechanism is not an acceptable alternative mechanism or is not being
implemented.
`(5) FUTURE ADOPTION OF
MECHANISMS- If a State, after January 1, 1997, submits the notice and
information described in paragraph (1), unless the Secretary makes a
finding described in paragraph (3) within the 90-day period beginning on
the date of submission of the notice and information, the mechanism
shall be considered to be an acceptable alternative mechanism for
purposes of this section, effective 90 days after the end of such
period, subject to the second sentence of paragraph (1).
`(c) PROVISION RELATED
TO RISK-
`(1) ADOPTION OF NAIC
MODELS- The model act referred to in subsection (a)(1)(D)(i) is the
Small Employer and Individual Health Insurance Availability Model Act
(adopted by the National Association of Insurance Commissioners on June
3, 1996) insofar as it applies to individual health insurance coverage
or the Individual Health Insurance Portability Model Act (also adopted
by such Association on such date).
`(2) QUALIFIED HIGH RISK
POOL- For purposes of subsection (a)(1)(D)(ii), a `qualified high risk
pool' described in this paragraph is a high risk pool that--
`(A) provides to all
eligible individuals health insurance coverage (or comparable coverage)
that does not impose any preexisting condition exclusion with respect to
such coverage for all eligible individuals, and
`(B) provides for
premium rates and covered benefits for such coverage consistent with
standards included in the NAIC Model Health Plan for Uninsurable
Individuals Act (as in effect as of the date of the enactment of this
title).
`(3) OTHER MECHANISMS-
For purposes of subsection (a)(1)(D)(iii), a mechanism described in this
paragraph--
`(A) provides for risk
adjustment, risk spreading, or a risk spreading mechanism (among issuers
or policies of an issuer) or otherwise provides for some financial
subsidization for eligible individuals, including through assistance to
participating issuers; or
`(B) is a mechanism
under which each eligible individual is provided a choice of all
individual health insurance coverage otherwise available.
`SEC. 2745. ENFORCEMENT.
`(a) STATE ENFORCEMENT-
`(1) STATE AUTHORITY-
Subject to section 2746, each State may require that health insurance
issuers that issue, sell, renew, or offer health insurance coverage in
the State in the individual market meet the requirements established
under this part with respect to such issuers.
`(2) FAILURE TO
IMPLEMENT REQUIREMENTS- In the case of a State that fails to
substantially enforce the requirements set forth in this part with
respect to health insurance issuers in the State, the Secretary shall
enforce the requirements of this part under subsection (b) insofar as
they relate to the issuance, sale, renewal, and offering of health
insurance coverage in the individual market in such State.
`(b) SECRETARIAL
ENFORCEMENT AUTHORITY- The Secretary shall have the same authority in
relation to enforcement of the provisions of this part with respect to
issuers of health insurance coverage in the individual market in a State
as the Secretary has under section 2722(b)(2) in relation to the
enforcement of the provisions of part A with respect to issuers of
health insurance coverage in the small group market in the State.
`SEC. 2746. PREEMPTION.
`(a) IN GENERAL- Subject
to subsection (b), nothing in this part (or part C insofar as it applies
to this part) shall be construed to prevent a State from establishing,
implementing, or continuing in effect standards and requirements unless
such standards and requirements prevent the application of a requirement
of this part.
`(b) RULES OF
CONSTRUCTION- Nothing in this part (or part C insofar as it applies to
this part) shall be construed to affect or modify the provisions of
section 514 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1144).
`SEC. 2747. GENERAL EXCEPTIONS.
`(a) EXCEPTION FOR
CERTAIN BENEFITS- The requirements of this part shall not apply to any
health insurance coverage in relation to its provision of excepted
benefits described in section 2791(c)(1).
`(b) EXCEPTION FOR
CERTAIN BENEFITS IF CERTAIN CONDITIONS MET- The requirements of this
part shall not apply to any health insurance coverage in relation to its
provision of excepted benefits described in paragraph (2), (3), or (4)
of section 2791(c) if the benefits are provided under a separate policy,
certificate, or contract of insurance.'.
(b) EFFECTIVE DATE-
(1) IN GENERAL- Except
as provided in this subsection, part B of title XXVII of the Public
Health Service Act (as inserted by subsection (a)) shall apply with
respect to health insurance coverage offered, sold, issued, renewed, in
effect, or operated in the individual market after June 30, 1997,
regardless of when a period of creditable coverage occurs.
(2) APPLICATION OF
CERTIFICATION RULES- The provisions of section 102(d)(2) of this Act
shall apply to section 2743 of the Public Health Service Act in the same
manner as it applies to section 2701(e) of such Act.
Subtitle C--General and
Miscellaneous Provisions
SEC. 191. HEALTH COVERAGE AVAILABILITY STUDIES.
(a) STUDIES-
(1) STUDY ON
EFFECTIVENESS OF REFORMS- The Secretary of Health and Human Services
shall provide for a study on the effectiveness of the provisions of this
title and the various State laws, in ensuring the availability of
reasonably priced health coverage to employers purchasing group coverage
and individuals purchasing coverage on a non-group basis.
(2) STUDY ON ACCESS AND
CHOICE- The Secretary also shall provide for a study on--
(A) the extent to which
patients have direct access to, and choice of, health care providers,
including specialty providers, within a network plan, as well as the
opportunity to utilize providers outside of the network plan, under the
various types of coverage offered under the provisions of this title;
and
(B) the cost and
cost-effectiveness to health insurance issuers of providing access to
out-of-network providers, and the potential impact of providing such
access on the cost and quality of health insurance coverage offered
under provisions of this title.
(3) CONSULTATION- The
studies under this subsection shall be conducted in consultation with
the Secretary of Labor, representatives of State officials, consumers,
and other representatives of individuals and entities that have
expertise in health insurance and employee benefits.
(b) REPORTS- Not later
than January 1, 2000, the Secretary shall submit to the appropriate
committees of Congress a report on each of the studies under subsection
(a).
SEC. 192. REPORT ON MEDICARE REIMBURSEMENT OF TELEMEDICINE.
The Health Care
Financing Administration shall complete its ongoing study of Medicare
reimbursement of all telemedicine services and submit a report to
Congress on Medicare reimbursement of telemedicine services by not later
than March 1, 1997. The report shall--
(1) utilize data
compiled from the current demonstration projects already under review
and gather data from other ongoing telemedicine networks;
(2) include an analysis
of the cost of services provided via telemedicine; and
(3) include a proposal
for Medicare reimbursement of such services.
SEC.
193. ALLOWING FEDERALLY-QUALIFIED HMOS TO OFFER HIGH DEDUCTIBLE PLANS.
Section 1301(b) of the
Public Health Service Act (42 U.S.C. 300e(b)) is amended by adding at
the end the following new paragraph:
`(6) A health
maintenance organization that otherwise meets the requirements of this
title may offer a high-deductible health plan (as defined in section
220(c)(2) of the Internal Revenue Code of 1986).'.
SEC.
194. VOLUNTEER SERVICES PROVIDED BY HEALTH PROFESSIONALS AT FREE
CLINICS.
Section 224 of the
Public Health Service Act (42 U.S.C. 233) is amended by adding at the
end the following subsection:
`(o)(1) For purposes of
this section, a free clinic health professional shall in providing a
qualifying health service to an individual be deemed to be an employee
of the Public Health Service for a calendar year that begins during a
fiscal year for which a transfer was made under paragraph (6)(D). The
preceding sentence is subject to the provisions of this subsection.
`(2) In providing a
health service to an individual, a health care practitioner shall for
purposes of this subsection be considered to be a free clinic health
professional if the following conditions are met:
`(A) The service is
provided to the individual at a free clinic, or through offsite programs
or events carried out by the free clinic.
`(B) The free clinic is
sponsoring the health care practitioner pursuant to paragraph (5)(C).
`(C) The service is a
qualifying health service (as defined in paragraph (4)).
`(D) Neither the health
care practitioner nor the free clinic receives any compensation for the
service from the individual or from any third-party payor (including
reimbursement under any insurance policy or health plan, or under any
Federal or State health benefits program). With respect to compliance
with such condition:
`(i) The health care
practitioner may receive repayment from the free clinic for reasonable
expenses incurred by the health care practitioner in the provision of
the service to the individual.
`(ii) The free clinic
may accept voluntary donations for the provision of the service by the
health care practitioner to the individual.
`(E) Before the service
is provided, the health care practitioner or the free clinic provides
written notice to the individual of the extent to which the legal
liability of the health care practitioner is limited pursuant to this
subsection (or in the case of an emergency, the written notice is
provided to the individual as soon after the emergency as is
practicable). If the individual is a minor or is otherwise legally
incompetent, the condition under this subparagraph is that the written
notice be provided to a legal guardian or other person with legal
responsibility for the care of the individual.
`(F) At the time the
service is provided, the health care practitioner is licensed or
certified in accordance with applicable law regarding the provision of
the service.
`(3)(A) For purposes of
this subsection, the term `free clinic' means a health care facility
operated by a nonprofit private entity meeting the following
requirements:
`(i) The entity does
not, in providing health services through the facility, accept
reimbursement from any third-party payor (including reimbursement under
any insurance policy or health plan, or under any Federal or State
health benefits program).
`(ii) The entity, in
providing health services through the facility, either does not impose
charges on the individuals to whom the services are provided, or imposes
a charge according to the ability of the individual involved to pay the
charge.
`(iii) The entity is
licensed or certified in accordance with applicable law regarding the
provision of health services.
`(B) With respect to
compliance with the conditions under subparagraph (A), the entity
involved may accept voluntary donations for the provision of services.
`(4) For purposes of
this subsection, the term `qualifying health service' means any medical
assistance required or authorized to be provided in the program under
title XIX of the Social Security Act, without regard to whether the
medical assistance is included in the plan submitted under such program
by the State in which the health care practitioner involved provides the
medical assistance. References in the preceding sentence to such program
shall as applicable be considered to be references to any successor to
such program.
`(5) Subsection (g)
(other than paragraphs (3) through (5)) and subsections (h), (i), and
(l) apply to a health care practitioner for purposes of this subsection
to the same extent and in the same manner as such subsections apply to
an officer, governing board member, employee, or contractor of an entity
described in subsection (g)(4), subject to paragraph (6) and subject to
the following:
`(A) The first sentence
of paragraph (1) applies in lieu of the first sentence of subsection
(g)(1)(A).
`(B) This subsection may
not be construed as deeming any free clinic to be an employee of the
Public Health Service for purposes of this section.
`(C) With respect to a
free clinic, a health care practitioner is not a free clinic health
professional unless the free clinic sponsors the health care
practitioner. For purposes of this subsection, the free clinic shall be
considered to be sponsoring the health care practitioner if--
`(i) with respect to
the health care practitioner, the free clinic submits to the Secretary
an application meeting the requirements of subsection (g)(1)(D); and
`(ii) the Secretary,
pursuant to subsection (g)(1)(E), determines that the health care
practitioner is deemed to be an employee of the Public Health Service.
`(D) In the case of a
health care practitioner who is determined by the Secretary pursuant to
subsection (g)(1)(E) to be a free clinic health professional, this
subsection applies to the health care practitioner (with respect to the
free clinic sponsoring the health care practitioner pursuant to
subparagraph (C)) for any cause of action arising from an act or
omission of the health care practitioner
occurring on or after the date on which the Secretary makes such
determination.
`(E) Subsection
(g)(1)(F) applies to a health care practitioner for purposes of this
subsection only to the extent that, in providing health services to an
individual, each of the conditions specified in paragraph (2) is met.
`(6)(A) For purposes of
making payments for judgments against the United States (together with
related fees and expenses of witnesses) pursuant to this section arising
from the acts or omissions of free clinic health professionals, there is
authorized to be appropriated $10,000,000 for each fiscal year.
`(B) The Secretary shall
establish a fund for purposes of this subsection. Each fiscal year
amounts appropriated under subparagraph (A) shall be deposited in such
fund.
`(C) Not later than May
1 of each fiscal year, the Attorney General, in consultation with the
Secretary, shall submit to the Congress a report providing an estimate
of the amount of claims (together with related fees and expenses of
witnesses) that, by reason of the acts or omissions of free clinic
health professionals, will be paid pursuant to this section during the
calendar year that begins in the following fiscal year. Subsection
(k)(1)(B) applies to the estimate under the preceding sentence regarding
free clinic health professionals to the same extent and in the same
manner as such subsection applies to the estimate under such subsection
regarding officers, governing board members, employees, and contractors
of entities described in subsection (g)(4).
`(D) Not later than
December 31 of each fiscal year, the Secretary shall transfer from the
fund under subparagraph (B) to the appropriate accounts in the Treasury
an amount equal to the estimate made under subparagraph (C) for the
calendar year beginning in such fiscal year, subject to the extent of
amounts in the fund.
`(7)(A) This subsection
takes effect on the date of the enactment of the first appropriations
Act that makes an appropriation under paragraph (6)(A), except as
provided in subparagraph (B)(i).
`(B)(i) Effective on the
date of the enactment of the Health Insurance Portability and
Accountability Act of 1996--
`(I) the Secretary may
issue regulations for carrying out this subsection, and the Secretary
may accept and consider applications submitted pursuant to paragraph
(5)(C); and
`(II) reports under
paragraph (6)(C) may be submitted to the Congress.
`(ii) For the first
fiscal year for which an appropriation is made under subparagraph (A) of
paragraph (6), if an estimate under subparagraph (C) of such paragraph
has not been made for the calendar year beginning in such fiscal year,
the transfer under subparagraph (D) of such paragraph shall be made
notwithstanding the lack of the estimate, and the transfer shall be made
in an amount equal to the amount of such appropriation.'.
SEC. 195. FINDINGS; SEVERABILITY.
(a) FINDINGS RELATING TO
EXERCISE OF COMMERCE CLAUSE AUTHORITY- Congress finds the following in
relation to the provisions of this title:
(1) Provisions in group
health plans and health insurance coverage that impose certain
preexisting condition exclusions impact the ability of employees to seek
employment in interstate commerce, thereby impeding such commerce.
(2) Health insurance
coverage is commercial in nature and is in and affects interstate
commerce.
(3) It is a necessary
and proper exercise of Congressional authority to impose requirements
under this title on group health plans and health insurance coverage
(including coverage offered to individuals previously covered under
group health plans) in order to promote commerce among the States.
(4) Congress, however,
intends to defer to States, to the maximum extent practicable, in
carrying out such requirements with respect to insurers and health
maintenance organizations that are subject to State regulation,
consistent with the provisions of the Employee Retirement Income
Security Act of 1974.
(b) SEVERABILITY- If any provision of this title or the
application of such provision to any person or circumstance is held to
be unconstitutional, the remainder of this title and the application of
the provisions of such to any person or circumstance shall not be
affected thereby.
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