[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1881 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 1881

To amend title I of the Employee Retirement Income Security Act of 1974 
  to promote fairness in administration of health insurance and other 
claims under employee welfare benefit plans and to improve enforcement 
              under such title with respect to such plans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 28, 1993

 Mr. Berman (for himself, Mr. Ford of Michigan, Mr. Williams, and Mr. 
    Stark) introduced the following bill; which was referred to the 
                    Committee on Education and Labor

_______________________________________________________________________

                                 A BILL


 
To amend title I of the Employee Retirement Income Security Act of 1974 
  to promote fairness in administration of health insurance and other 
claims under employee welfare benefit plans and to improve enforcement 
              under such title with respect to such plans.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Insurance Claims Fairness Act 
of 1993''.

SEC. 2. IMPROVEMENTS IN CLAIMS PROCEDURE.

    (a) Qualified Welfare Plan Claim Defined.--Section 3 of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002) is 
amended by adding at the end the following new paragraph:
    ``(42) The term `qualified welfare plan claim' means a notification 
of an employee welfare benefit plan of a claim for benefits under the 
plan, or a request for coverage of items or services under the plan, 
which--
            ``(A) is in writing or in any other form permitted by the 
        plan, and
            ``(B) is provided to the plan--
                    ``(i) by the participant, or
                    ``(ii) on behalf of the participant in accordance 
                with the plan by any other person in connection with 
                items or services provided or to be provided by such 
                other person to the participant or a beneficiary under 
                the plan.
For purposes of this paragraph, any request for preauthorization for 
benefits under the plan shall be treated as a claim for benefits under 
the plan.''.
    (b) Review Requirements for Qualified Welfare Plan Claims.--
            (1) In general.--Section 503 of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1133) is amended--
                    (A) by inserting ``(a) In General.--'' after ``Sec. 
                503.''; and
                    (B) by adding at the end the following new 
                subsections:
    ``(b) Review Requirements for Qualified Welfare Plan Claims.--An 
employee welfare benefit plan shall not be treated as complying with 
the requirements of subsection (a) unless such plan complies with the 
following requirements:
            ``(1) Time limit for consideration of completed claims.--
        Within 30 days after submission of a qualified welfare plan 
        claim to the plan in complete form, the plan shall provide to 
        the claimant a written notice of the plan's approval or denial 
        of the claim. Within 5 days after the date of any determination 
        by the plan to deny the claim, the plan shall provide the 
        claimant with a written notice setting forth the reasons for 
        the denial, referencing the policy provision, condition, or 
        exclusion upon which the denial is based, and including notice 
        of the right to appeal the denial under paragraph (2). In any 
        case in which the claim is filed by another person on behalf of 
        a participant, any notice required to be provided to the 
        claimant under this paragraph shall not be treated as so 
        provided until such notice also is provided to the participant.
            ``(2) Plan's duty to review denials upon timely request.--
        The plan shall review its denial of the claim if--
                    ``(A) within 120 days after receipt of written 
                notice from the plan of the denial, a written request 
                for reconsideration of the claim is filed with the plan 
                by the claimant (or by the participant in any case in 
                which the claim was filed by another person on behalf 
                of the participant), or
                    ``(B) the claim is a claim for benefits under the 
                plan other than a request for preauthorization and 
                involves items or services the aggregate value or 
                expected aggregate value of which is reasonably 
                estimated to exceed $10,000.
            ``(3) Time limit for review.--The plan shall complete any 
        review required under paragraph (2), and shall provide to the 
        claimant (and to the participant in any case in which the claim 
        was filed by another person on behalf of the participant) 
        written notice of the plan's decision on the claim after 
        reconsideration pursuant to such review--
                    ``(A) within 30 days after receipt of the request 
                for reconsideration, in any case described in paragraph 
                (2)(A), or
                    ``(B) within 30 days after the date of the initial 
                determination, in any case described in paragraph 
                (2)(B).
            ``(4) De novo reviews.--Any review required under paragraph 
        (2)--
                    ``(A) shall be de novo,
                    ``(B) shall be conducted by an individual who did 
                not make the initial decision denying the claim and who 
                is authorized to approve payment of the claim, and
                    ``(C) shall include review by a qualified physician 
                if the resolution of any issues involved requires 
                medical expertise or a determination of medical 
                necessity.
    ``(c) Treatment of Requests to Group Health Plans for 
Preauthorization.--
            ``(1) In general.--This subsection applies in the case of 
        any qualified welfare plan claim consisting of a request by a 
        participant (or by any other person on behalf of a participant 
        with respect to items or services to be provided thereby to the 
        participant or a beneficiary) for preauthorization of items or 
        services which is submitted to a group health plan prior to 
        receipt of such items or services and which involves--
                    ``(A) urgent treatment for a life-threatening 
                illness or condition,
                    ``(B) a high-risk pregnancy, or
                    ``(C) items or services the aggregate value or 
                expected aggregate value of which is reasonably 
                estimated to total at least $20,000.
            ``(2) Shortened time limit for consideration of requests 
        for preauthorization.--Notwithstanding subsection (b)(1), a 
        group health plan shall approve or deny any qualified welfare 
        plan claim consisting of a request for preauthorization 
        described in paragraph (1) before 10 days (3 days if the 
        request involves urgent treatment for a life-threatening 
        illness or condition) after submission of the claim to the 
        plan, irrespective of the completeness of the claim.
            ``(3) Automatic review.--The plan shall review any 
        determination to deny a request for preauthorization described 
        in paragraph (1) before 3 days after the date of the initial 
        determination. Any such review shall be conducted in accordance 
        with the requirements of subsection (b)(4) as if the request 
        were a claim to which such subsection applies.
            ``(4) Expedited exhaustion of plan remedies.--Upon 
        completion of the review required under paragraph (3), the 
        request for preauthorization shall be treated as a qualified 
        welfare plan claim with respect to which all remedies under the 
        plan provided pursuant to this section are exhausted for 
        purposes of further action under this part.
            ``(5) Denial of previously authorized claims not 
        permitted.--In any case in which a group health plan approves 
        the request of any person for preauthorization described in 
        paragraph (1)--
                    ``(A) the plan may not subsequently deny any claim 
                by such person for any items or services involved, 
                unless the plan makes a showing of intentional 
                misrepresentation by such person of a material fact, 
                and
                    ``(B) if any claim referred to in subparagraph (A) 
                is denied in violation of subparagraph (A), all 
                remedies under the plan provided pursuant to this 
                section with respect to such claim shall be treated as 
                exhausted for purposes of further action on the claim 
                under this part.
    ``(d) Time Limit for Determination of Incompleteness of Claim.--For 
purposes of this section, a qualified welfare plan claim shall be 
treated as filed in complete form for purposes of subsection (b)(1) as 
of 10 days (3 days in the case of any such claim which involves urgent 
treatment for a life-threatening illness or condition or a high-risk 
pregnancy) after the date of the submission of the claim, unless, 
within such period, the plan provides to the claimant (and to the 
participant in any case in which the claim was filed by another person 
on behalf of the participant) a written notice of any required matter 
remaining to be filed in order to complete the claim which includes any 
forms necessary to complete the claim. Any filing of matter requested 
by the plan pursuant to this paragraph shall be treated for purposes of 
this section as an initial filing of the claim.
    ``(e) Additional Notice and Disclosure Requirements for Group 
Health Plans.--In the case of a denial by a group health plan of a 
qualified welfare plan claim--
            ``(1) if the denial is based in whole or in part on a 
        determination that the claim exceeds reimbursement rates based 
        on reasonable and customary charges, the notice provided 
        pursuant to subsection (a)(1) shall set forth the factual basis 
        for such determination,
            ``(2) if the denial is based in whole or in part on 
        exclusion of coverage with respect to items or services because 
        such items or services are determined to comprise an 
        experimental treatment or investigatory procedure, such notice 
        shall set forth the medical basis for such determination and a 
        description of the process used in making such determination, 
        and
            ``(3) if the denial is based in whole or in part on a 
        determination that the treatment is not medically necessary, 
        such notice shall set forth the medical basis for such 
        determination and a description of the process used in making 
        such determination.
    ``(f) Records Maintenance Requirements.--Each group health plan 
shall--
            ``(1) record and maintain data relating to all qualified 
        welfare plan claims, for which files are pending, or were 
        pending and are closed, during the current plan year and the 2 
        preceding plan years, in such form and manner as is necessary 
        to enable the plan to readily retrieve, with respect to each 
        claim, the claim number, the line of coverage, the date of 
        loss, and the date of payment,
            ``(2) construct and maintain, with respect to each such 
        claim, a file containing in detail such documentation as is 
        necessary to permit reconstruction of the plan's activities in 
        relation to the claim, and
            ``(3) ensure that each document contained in each such file 
        indicates the date it was received by the plan, the date it was 
        processed by the plan, and the date on which any copy of such 
        document which has been mailed by the plan was so mailed.''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply with respect to claims filed after the date of the 
        enactment of this Act.
    (c) Prohibition of Waiver Clauses.--
            (1) In general.--Section 503(a) of such Act (as amended by 
        subsection (b)) is further amended--
                    (A) by striking ``shall'';
                    (B) in paragraph (1), by inserting ``shall'' after 
                ``(1)'', and by striking ``and'' at the end;
                    (C) in paragraph (2), by inserting ``shall'' after 
                ``(2)'', and by striking ``claim.'' and inserting 
                ``claim, and''; and
                    (D) by adding after paragraph (2) the following:
            ``(3) may not require any party to waive any right under 
        the plan or this Act as a condition for approval of any 
        qualified welfare plan claim under the plan, except to the 
        extent otherwise specified in a formal settlement agreement.
Any waiver described in paragraph (3) shall be null and void unless 
such waiver is included in a formal settlement agreement.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply with respect to claims and requests filed after the 
        date of the enactment of this Act.
    (d) Qualified Welfare Plan Claims Assistance Program.--
            (1) In general.--Section 503 of such Act (as amended by the 
        preceding provisions of this section) is further amended by 
        adding at the end the following new subsection:
    ``(f) Qualified Welfare Plan Claims Assistance Program.--The 
Secretary shall establish by regulation a qualified welfare plan claims 
assistance program. Under the program, the Secretary shall make 
available to participants and beneficiaries under employee welfare 
benefit plans ongoing assistance in the resolution of qualified welfare 
plan claims. Such assistance shall include, but not be limited to, 
reviewing denials of claims, assisting in appeals, contacting employee 
welfare benefit plans and insurance contractors on behalf of 
participants and beneficiaries, assisting participants and 
beneficiaries in obtaining plan documents, and referring of cases for 
appropriate enforcement action.''.
            (2) Establishment of program.--The Secretary of Labor shall 
        establish the qualified welfare plan claims assistance program 
        pursuant to section 503(f) of the Employee Retirement Income 
        Security Act of 1974 not later than 180 days after the date of 
        the enactment of this Act.
    (e) Treatment of Settlement Agreement As Terms of Plan.--
            (1) In general.--Section 503(a) of such Act (as amended by 
        subsection (d)) is further amended by adding at the end the 
        following new sentence: ``The terms of any settlement agreement 
        entered into under the procedures established by an employee 
        welfare benefit plan pursuant to this subsection shall be 
        enforceable under this title as if such terms were terms of the 
        plan.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to settlement agreements entered into 
        after the date of the enactment of this Act.
    (f) Definition of Group Health Plan.--
            (1) In general.--Section 3 of such Act (as amended by 
        subsection (a)) is further amended by adding at the end the 
        following new paragraph:
    ``(43) Group Health Plan.--The term `group health plan' means an 
employee welfare benefit plan that provides health care benefits to 
participants or beneficiaries directly or through insurance, 
reimbursement, or otherwise.''.
            (2) Conforming amendment.--Section 607(1) of such Act (29 
        U.S.C. 1167(1)) is amended to read as follows:
            ``(1) Group health plan.--For the definition of `group 
        health plan', see section 3(43).''.
    (g) Definition of Insurance Contractor.--Section 3 of such Act (as 
amended by subsection (f)) is further amended by adding at the end the 
following new paragraph:
    ``(44) Insurance Contractor.--
            ``(A) In general.--The term `insurance contractor' for an 
        employee welfare benefit plan means any insurer who has entered 
        into a legally binding obligation to the plan or plan sponsor 
        to provide benefits under the plan or to administer claims for 
        such benefits.
            ``(B) Insurer.--For purposes of subparagraph (A), the term 
        `insurer' means any person or legal entity engaged in the 
        business of insurance, including any insurance company, Lloyds 
        insurer, fraternal benefit society, medical service plan, 
        hospital service plan, health maintenance organization, prepaid 
        limited health care service plan, and dental, optometric, or 
        other similar health service plan. Such term shall include any 
        agent, broker, or adjuster engaged by such a person or entity 
        and any third party administrator engaged to administer benefit 
        claims under an employee welfare benefit plan. For purposes of 
        this title, all entities referred to in this subparagraph which 
        are not employee benefit plans shall be deemed to be engaged in 
        the business of insurance.''.
    (h) Additional Disclosure Requirements for Employee Welfare Benefit 
Plans.--
            (1) In general.--Section 104(b)(4) of such Act (29 U.S.C. 
        1024(b)(4)) is amended in the first sentence by striking 
        ``operated.'' and inserting ``operated, any insurance contract 
        under which benefits are or were provided, and, in the case of 
        a group health plan, any fee or reimbursement schedules for 
        health care providers under the plan.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to requests for any fee or 
        reimbursement schedule which are made after the date of the 
        enactment of this Act.

SEC. 3. EARLY RESOLUTION PROGRAM.

    (a) In General.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 is amended--
            (1) by inserting after the heading for part 5 the following 
        new heading:

                   ``Subpart A--General Provisions'';

        and
            (2) by adding at the end the following new subpart:

                 ``Subpart B--Early Resolution Program

                    ``CHAPTER 1--GENERAL PROVISIONS

``SEC. 521. ESTABLISHMENT OF THE EARLY RESOLUTION PROGRAM; CLAIMS 
              RESOLUTION BOARD.

    ``(a) Establishment of Program.--The Secretary shall establish and 
maintain an Early Resolution Program for employee welfare benefit 
plans, which shall be administered in the Department of Labor by a 
Claims Resolution Board (hereinafter in this subpart referred to as the 
`Board').
    ``(b) In General.--The Board shall--
            ``(1) administer the Early Resolution Program in accordance 
        with regulations of the Board,
            ``(2) develop Program policy and procedures,
            ``(3) maintain a roster of facilitators to act for the 
        Board in mediation proceedings between parties conducted under 
        chapter 2, and coordinate the recruitment, selection, and 
        training of such facilitators,
            ``(4) provide meeting sites, maintain records, and provide 
        facilitators with administrative support staff,
            ``(5) establish and maintain attorney referral panels, and
            ``(6) monitor and evaluate the Program on an ongoing basis.
    ``(c) Membership.--The Board shall consist of qualified attorneys 
or other professionals appointed by the Secretary who have expertise in 
the area of employee welfare benefits. The members shall serve for 
contemporaneous terms of 3 years and may be reappointed for one 
additional term. Vacancies for any term shall be filled for the 
remainder of such term in the same manner as the original appointment. 
Of the members of the Board--
            ``(1) 2 members shall represent the interests of employee 
        welfare benefit plans and insurance contractors,
            ``(2) 2 other members shall represent the interests of plan 
        participants and beneficiaries, and
            ``(3) the remaining 2 members shall be experienced in 
        mediation and conciliation procedures.
No member of the Board may otherwise serve as an employee of the United 
States, any State, or any political subdivision of a State. Not more 
than 3 members shall be of the same political party. Members of the 
Board shall serve without pay, except that each member shall receive 
travel expenses, including per diem in lieu of subsistence, in 
accordance with sections 5702 and 5703 of title 5, United States Code. 
The Board shall elect one member to serve as Chairman.
    ``(d) Executive Director and Staff.--The Secretary shall provide 
the Board with such administrative staff and support services as the 
Secretary considers necessary and appropriate. The administrative staff 
shall be headed by an Executive Director appointed by the Board. The 
Executive Director shall serve as the chief executive officer of the 
Board and in such capacity shall, with the assistance of such staff, 
conduct case intake under the Program and otherwise assist the Board in 
carrying out its functions. The Executive Director shall be paid at the 
rate equivalent to the maximum rate for GS-14 of the General Schedule.
    ``(e) Quorum.--Four members of the Board shall constitute a quorum 
necessary for business, and four affirmative votes shall be necessary 
for action.

``SEC. 522. ELIGIBILITY OF CASES FOR SUBMISSION TO EARLY RESOLUTION 
              PROGRAM.

    ``(a) Case Criteria.--A dispute may be submitted to the Early 
Resolution Program only if the following requirements are met with 
respect to such dispute:
            ``(1) Parties.--The dispute consists of an assertion by an 
        individual of one or more claims, based on alleged coverage as 
        a participant or beneficiary under an employee welfare benefit 
        plan, against the plan, one or more insurance contractors for 
        such plan, or both, and a denial of such claims by such plan, 
        any such insurance contractor, or both.
            ``(2) Nature of claim.--Each claim consists of--
                    ``(A) a qualified welfare plan claim; or
                    ``(B) a claim arising out of the failure or refusal 
                by the plan or by an insurance contractor for the plan 
                to comply with the claimant's request for information 
                or documents the disclosure of which is required under 
                this title (including any claim of entitlement to 
                disclosure based on colorable claims to rights to 
                benefits under the plan).
            ``(3) Submission after exhaustion of plan remedies and in 
        lieu of commencement of civil action.--The claimant has 
        received a final determination regarding the claim under the 
        plan's claims procedure under section 503, or has otherwise 
        exhausted all remedies under the plan provided pursuant to 
        section 503, and no action has been commenced by the claimant 
        under section 502 asserting a claim which is asserted by the 
        claimant in the dispute.
    ``(b) Representation in Cases of Incompetency.--Any claimant who is 
unable to have a basic understanding of the Program or its process may 
be represented during the proceedings by a legal guardian or other 
court-appointed representative.
    ``(c) Notice of Program Availability.--Each employee welfare 
benefit plan shall provide, as part of its claims review procedure 
established pursuant to section 503(a), that claimants taking part in 
such procedure will be informed during such procedure of the 
availability of the Early Resolution Program.

``SEC. 523. FACILITATORS.

    ``(a) Recruitment.--The Board shall recruit individuals to serve as 
facilitators under the Early Resolution Program from individuals who 
have the requisite expertise for such service.
    ``(b) Criteria.--In selecting individuals to serve as facilitators, 
the Board shall consider the following:
            ``(1) the individual's experience in dispute resolution.
            ``(2) the individual's ability to act impartially;
            ``(3) the individual's ability to perform evaluations 
        quickly and to present them in nontechnical terms; and
            ``(4) the individual's experience in employee benefit law 
        and, to the extent that the individual's service will relate to 
        group health plans, the individual's expertise pertaining to 
        medical or disability issues;
    ``(c) Training of Facilitators.--The Board shall provide a training 
program for all new facilitators. The curriculum shall include the 
procedures of the Program, relevant ethical obligations, and skills in 
mediation and conciliation necessary for effective alternative dispute 
resolution in the applicable proceedings. A facilitator may serve only 
upon completion of such training program.
    ``(d) Assignment of Facilitators to Cases.--Upon submission of a 
claim to mediation proceedings under chapter 2, the Board shall appoint 
a facilitator through a random selection procedure which shall be 
prescribed in regulations of the Board.

``SEC. 524. COMPENSATION OF FACILITATORS.

    ``Facilitators serving in the Early Resolution Program may, at 
their election, serve on a pro bono basis or be compensated at a fixed 
fee to be established by the Board. The Board shall provide for 
additional compensation for follow up proceedings. Each facilitator 
shall receive travel expenses, including per diem in lieu of 
subsistence, in accordance with sections 5702 and 5703 of title 5, 
United States Code.

``SEC. 525. ROLE OF ATTORNEYS.

    ``(a) Representation.--Parties may participate pro se or be 
represented by attorneys throughout the mediation proceedings under the 
Early Resolution Program.
    ``(b) Referrals.--The Board shall maintain attorney referral panels 
(both fee-paying and pro bono) and referral information regarding other 
sources of legal assistance. Such panels shall consist of attorneys who 
are experienced in relevant employee benefit law and willing to 
represent the parties referred to them.

                   ``CHAPTER 2--MEDIATION OF DISPUTES

``SEC. 531. INITIATION OF PROCEEDINGS.

    ``(a) Filing of Election.--The proceedings under the Early 
Resolution Program shall be in the form of mediation conducted in 
accordance with this chapter.
    ``(b) Agreement to Participate.--
            ``(1) Election by claimants.--A claimant may elect 
        participation in mediation proceedings under this chapter only 
        by entering into a written agreement (including an agreement to 
        comply with the rules of the Program and consent for the Board 
        to contact the employee welfare benefit plan and any insurance 
        contractor involved regarding the agreement), by releasing plan 
        records to the Program for the exclusive use of the facilitator 
        assigned to the mediation, and by paying to the Board a 
        nonrefundable filing fee of $100. Such fee shall be deposited 
        as miscellaneous receipts in the general fund of the Treasury 
        and is hereby appropriated solely for purposes of administering 
        this chapter. The fee may be waived in cases of hardship, under 
        standards which shall be prescribed by the Board by regulation.
            ``(2) Participation by plans and insurance contractors.--
        Each party whose participation in the mediation proceedings has 
        been elected by a claimant pursuant to paragraph (1) shall 
        participate in, and cooperate fully, in the proceedings. The 
        Board shall provide each such party with a copy of the 
        participation agreement described in paragraph (1), together 
        with a written description of mediation under the Early 
        Resolution Program. Each such party shall submit such copy of 
        the agreement, together with such party's authorized signature 
        signifying receipt of notice of the agreement, to the Board, 
        shall include in such submission to the Board a copy of the 
        written record of the claims procedure completed by the plan or 
        insurance contractor pursuant to section 503 with respect to 
        the dispute and all relevant plan documents, and shall pay the 
        Board a nonrefundable filing fee of $100. Such fee shall be 
        deposited as miscellaneous receipts in the general fund of the 
        Treasury and is hereby appropriated solely for purposes of 
        administering this chapter. The relevant documents shall 
        include all documents under which the plan is or was 
        administered or operated, including copies of any insurance 
        contracts under which benefits are or were provided and, in the 
        case of a group health plan, any fee or reimbursement schedules 
        for health care providers requested by the facilitator.

``SEC. 532. THE MEDIATION PROCEEDINGS.

    ``(a) In General.--A mediation proceeding under this chapter shall 
be conducted by facilitators recruited, trained, and assigned by the 
Board under section 523 and in accordance with fair and equitable 
procedures to be prescribed by the Board which shall be subject to the 
requirements of this chapter.
    ``(b) Analysis Stage.--In the commencement of the mediation 
proceedings with respect to any dispute, the facilitator assigned to 
the dispute shall--
            ``(1) identify the necessary parties,
            ``(2) confirm that the case is eligible for mediation under 
        this chapter,
            ``(3) ensure that each party is informed of available legal 
        representation, including such services as may be available 
        free of charge under legal assistance programs,
            ``(4) set a conference date,
            ``(5) at the option of the facilitator, request position 
        papers from the parties of not more than 10 pages in length, if 
        the facilitator determines that such papers are needed to 
        clarify the parties' positions and issues in dispute, and
            ``(6) analyze the record of the claims procedure conducted 
        pursuant to section 503 and any position papers submitted by 
        the parties, with appropriate legal assistance provided by the 
        Secretary, to determine if further case development is needed 
        to clarify the legal and factual issues in dispute, and whether 
        there is any need for additional information and documents, and 
        request the parties to present any such needed information and 
        documents.
    ``(c) Evaluation Stage.--Upon completion of the procedures 
described in subsection (b), the mediation proceedings shall proceed as 
follows:
            ``(1) Commencement of conference.--The facilitator shall 
        convene a conference between the parties. Each party shall be 
        given the opportunity to make a statement summarizing the 
        facts, issues, and arguments in support of such party's 
        position, and present, or inform the facilitator of, any 
        additional evidence such party considers to be relevant to the 
        evaluation.
            ``(2) Neutrality of facilitator.--The facilitator shall 
        maintain a neutral stance between the parties.
            ``(3) Preparation of settlement agreement.--If settlement 
        is reached, the facilitator shall assist in the preparation of 
        a written settlement agreement (which shall remain confidential 
        at the option of the parties) and shall ensure that the parties 
        understand the terms of the settlement.
            ``(4) Evaluation upon initial failure to reach 
        settlement.--If no settlement is reached, the facilitator may 
        evaluate for the parties the likely outcome of further 
        administrative action or litigation, based on the facilitator's 
        assessment of the relative strength of each party's position. 
        Any such evaluation by the facilitator shall be treated as a 
        proceeding communication to which section 536 applies.
            ``(5) Further proceedings.--The facilitator shall then 
        encourage extension of the proceedings if it is likely to lead 
        to settlement or a substantial narrowing of the issues.

``SEC. 533. APPLICABLE TIME LIMITS.

    ``(a) In General.--The mediation proceedings under this chapter 
with respect to any dispute shall be completed within 180 days after 
the election to participate, as follows:
            ``(1) Presentation to plans and insurance contractors of 
        claimant's signed agreement.--The Board shall present to each 
        party whose participation in the mediation proceedings has been 
        elected by the claimant the agreement signed by the claimant 
        within 10 days after the date of the claimant's signature.
            ``(2) Submission of receipt by plans and insurance 
        contractors.--Each party whose participation in the mediation 
        proceedings has been elected by the claimant shall submit 
        within 20 days after receipt of the signed agreement its 
        authorized signature signifying receipt of the notice of the 
        agreement.
            ``(3) Assignment of facilitator.--The facilitator shall be 
        assigned to the case within 30 days after the date as of which 
        all necessary authorized signatures have been secured.
            ``(4) Completion of analysis stage.--The facilitator shall 
        complete all procedures required in the analysis stage 
        described in section 532(a) within 45 days after the 
        facilitator's assignment to the case.
            ``(5) Commencement of evaluation stage.--The conference 
        conducted under the evaluation stage described in section 
        532(b) shall commence not later than the earlier of 60 days 
        after the date of the assignment of the facilitator or 15 days 
        after completion of the analysis stage described in section 
        532(a).
    ``(b) Extension of Proceedings.--The proceedings may be extended 
for not more than 30 days, but only at the written request of, or upon 
the written consent of, the claimant.

``SEC. 534. LEGAL EFFECT OF PARTICIPATION IN PROCEEDINGS.

    ``(a) Process Nonbinding.--Findings and conclusions made in the 
mediation proceedings under this chapter shall be treated as advisory 
in nature and nonbinding. Except as provided in subsection (b), the 
rights of the parties under subpart A shall not be affected by 
participation in the mediation proceedings under this chapter.
    ``(b) Resolution Through Settlement Agreement.--If a case is 
settled through participation in the mediation proceedings under this 
chapter, the facilitator shall assist the parties in drawing up an 
agreement which shall constitute, upon signature of the parties, a 
binding contract between the parties, which shall be enforceable under 
section 537, and which shall be enforceable under this title as if the 
terms of such agreement were terms of the plan.
    ``(c) Preservation of Rights of Non-Parties.--The settlement 
agreement shall not have the effect of waiving or otherwise affecting 
any rights to review under section 502 or any other right under this 
title or the plan with respect to any person who is not a party to the 
settlement agreement.

``SEC. 535. PROCEDURAL RULES.

    ``(a) Inapplicability of Formal Rules of Evidence.--Formal rules of 
evidence shall not apply to mediation proceedings under this chapter. 
All statements made and evidence presented in the proceedings shall be 
admissible in such proceedings. The facilitator shall be the sole judge 
of the proper weight to be afforded to each submission.
    ``(b) Inapplicability of Oath Requirements.--The parties to the 
mediation proceedings under this chapter shall not be required to make 
statements or present evidence under oath.

``SEC. 536. CONFIDENTIALITY.

    ``(a) Facilitators.--Except as provided in subsections (d) and (e), 
a facilitator in a mediation proceeding under this chapter shall not 
voluntarily disclose or through discovery or compulsory process be 
required to disclose any information concerning any proceeding 
communication or any communication provided in confidence to the 
facilitator, unless--
            ``(1) all parties to the proceeding and the facilitator 
        consent in writing, and, if the proceeding communication was 
        provided by a nonparty participant, that the participant also 
        consents in writing,
            ``(2) the proceeding communication has already been made 
        public,
            ``(3) the proceeding communication is required by statute 
        to be made public, but a facilitator may make such 
        communication public only if no other person is reasonably 
        available to disclose the communication, or
            ``(4) a court determines that such testimony or disclosure 
        is necessary to--
                    ``(A) prevent a manifest injustice,
                    ``(B) help establish a violation of law, or
                    ``(C) prevent harm to the public health or safety,
        of sufficient magnitude in the particular case to outweigh the 
        integrity of the proceedings in general by reducing the 
        confidence of parties in future cases that their communications 
        will remain confidential.
    ``(b) Parties.--A party to a mediation proceeding under this 
chapter shall not voluntarily disclose or through discovery or 
compulsory process be required to disclose any information concerning 
any proceeding communication, unless--
            ``(1) the communication was prepared by the party seeking 
        disclosure,
            ``(2) all parties to the proceeding consent in writing,
            ``(3) the proceeding communication has already been made 
        public,
            ``(4) the proceeding communication is required by statute 
        to be made public,
            ``(5) a court determines that such testimony or disclosure 
        is necessary to--
                    ``(A) prevent a manifest injustice,
                    ``(B) help establish a violation of law, or
                    ``(C) prevent harm to the public health or safety,
        of sufficient magnitude in the particular case to outweigh the 
        integrity of the proceedings in general by reducing the 
        confidence of parties in future cases that their communications 
        will remain confidential,
            ``(6) the proceeding communication is relevant to 
        determining the existence or meaning of an agreement or award 
        that resulted from the proceeding or to the enforcement of such 
        an agreement or award, or
            ``(7) the proceeding communication was provided to or was 
        available to all parties to the proceeding.
    ``(c) Inadmissibility of Disclosed Information.--Any proceeding 
communication that is disclosed in violation of subsection (a) or (b) 
shall not be admissible in any proceeding relating to the issues in 
controversy with respect to which the communication was made.
    ``(d) Alternative Procedures.--The parties may agree to alternative 
confidential procedures for disclosures by a facilitator. Upon such 
agreement the parties shall inform the facilitator before the 
commencement of the proceeding of any modifications to the provisions 
of subsection (a) that will govern the confidentiality of the 
proceeding. If the parties do not so inform the facilitator, subsection 
(a) shall apply.
    ``(e) Notice of Demands for Disclosure.--If a demand for 
disclosure, by way of discovery request or other legal process, is made 
upon a facilitator regarding a proceeding communication, the 
facilitator shall make reasonable efforts to notify the parties and any 
affected nonparty participants of the demand. In any case in which such 
disclosure would otherwise be in violation of this section, the 
facilitator may perform such disclosure in accordance with such demand 
only if each party and affected nonparty participant who receives such 
notice consents to such disclosure within 15 calendar days after the 
date of the issuance of such notification.
    ``(f) Exceptions.--
            ``(1) Information otherwise disclos- able.--Nothing in this 
        section shall prevent the discovery or admissibility of any 
        evidence that is otherwise discoverable, merely because the 
        evidence was presented in the course of a mediation proceeding 
        under this chapter.
            ``(2) Documentation of agreements or orders.--Subsections 
        (a) and (b) shall have no effect on the information and data 
        that are necessary to document an agreement reached or order 
        issued pursuant to a mediation proceeding under this chapter.
            ``(3) Research or educational purposes.--Subsections (a) 
        and (b) shall not prevent the gathering of information for 
        research or educational purposes so long as the parties and the 
        specific issues in controversy are not identifiable.
            ``(4) Disputes between facilitator and a party.--
        Subsections (a) and (b) shall not prevent use of a proceeding 
        communication to resolve a dispute between the facilitator in a 
        mediation proceeding under this chapter and a party to or 
        participant in such proceeding, so long as such proceeding 
        communication is disclosed only to the extent necessary to 
        resolve such dispute.
    ``(g) Civil Remedies.--
            ``(1) Civil penalty.--The Secretary may assess a civil 
        penalty against any person who discloses information in 
        violation of subsection (a) or (b) in the amount of three times 
        the amount of the claim involved.
            ``(2) Disqualification from service.--Any facilitator who 
        discloses information in violation of subsection (a) shall be 
        disqualified from further service as a facilitator under this 
        subpart.
    ``(h) Definitions.--For purposes of this section--
            ``(1) Proceeding communication.--The term `proceeding 
        communication' means any oral or written communication prepared 
        for the purposes of a mediation proceeding under this chapter, 
        including any memoranda, notes, or work product of the 
        facilitator, parties, or nonparty participants, except that 
        such term does not include a written agreement to enter into 
        the proceeding or a final written agreement reached as a result 
        of the proceeding.
            ``(2) In confidence.--The term `in confidence' means, with 
        respect to information, that the information is provided--
                    ``(A) with the expressed intent of the source that 
                it not be disclosed, or
                    ``(B) under circumstances that would create the 
                reasonable expectation on behalf of the source that the 
                information will not be disclosed.

``SEC. 537. ENFORCEMENT OF SETTLEMENT AGREEMENTS.

    ``(a) Confirmation; Jurisdiction; Procedure.--At any time within 
one year after the date of a settlement agreement entered into under 
this chapter any party to the agreement may apply to the United States 
district court in and for the district within which such agreement was 
made for an order confirming the agreement. Upon such application, the 
court shall grant such an order unless the agreement is vacated, 
modified, or corrected as prescribed in subsection (b) or (c). Notice 
of the application shall be served upon the adverse party. Upon such 
notice, the court shall have jurisdiction of such adverse party as 
though such adverse party had appeared generally in the proceeding. If 
the adverse party is a resident of the district within which the award 
was made, such service shall be made upon the adverse party or such 
party's attorney as prescribed by law for service of notice of motion 
in any action in the same court. If the adverse party is a nonresident, 
the notice of the application shall be served by the marshal of any 
district within which the adverse party may be found in like manner as 
other process of the court.
    ``(b) Vacation; Grounds; Rehearing.--The court may make an order 
vacating the settlement agreement upon the application of any party to 
the agreement if--
            ``(1) the agreement was procured under duress or by 
        corruption, fraud, or undue means, or
            ``(2) there was evident partiality or corruption in the 
        facilitator who assisted in the making of the agreement.
    ``(c) Modification or Correction; Grounds; Order.--The court may 
make an order modifying or correcting the settlement agreement upon the 
application of any party to the agreement if--
            ``(1) there was a material miscalculation of figures or a 
        material mistake in the description of any person, thing, or 
        property referred to in the agreement,
            ``(2) the agreement relates to a matter not submitted in 
        the conference proceedings, unless it is a matter not affecting 
        the merits of the agreement upon the matter submitted, or
            ``(3) the agreement is imperfect in matter of form not 
        affecting the merits of the controversy.
The order may modify and correct the agreement, so as to effect the 
intent thereof and promote justice between the parties.
    ``(d) Notice of Motions To Vacate or Modify; Service; Stay of 
Proceedings.--Notice of a motion to vacate, modify, or correct a 
settlement agreement made under this subpart must be served upon the 
adverse party or the party's attorney within 90 days after the 
settlement agreement is made. If the adverse party is a resident of the 
district within which the agreement is made, such service shall be made 
upon the adverse party or the party's attorney as prescribed by law for 
service of notice of motion in an action in the same court. If the 
adverse party is a nonresident, the notice of the application shall be 
served by the marshal of any district within which the adverse party 
may be found in like manner as other process of the court. For the 
purposes of the motion any judge who may make an order to stay the 
proceedings in an action brought in the same court may make an order, 
to be served with the notice of motion, staying the proceedings of the 
adverse party to enforce the agreement.
    ``(e) Papers Filed With Order on Motions; Judgment; Docketing; 
Force and Effect; Enforcement.--
            ``(1) Filing of papers.--The party moving for an order 
        confirming, modifying, or correcting a settlement agreement 
        made under this chapter shall, at the time such order is filed 
        with the clerk for the entry of judgment thereon, also file the 
        following papers with the clerk:
                    ``(A) the agreement, and
                    ``(B) each notice, affidavit, or other paper used 
                upon an application to confirm, modify, or correct the 
                agreement, and a copy of each order of the court upon 
                such an application.
            ``(2) Docketing of judgment.--The judgment shall be 
        docketed as if it were rendered in an action.
            ``(3) Force and effect; enforcement.--The judgment so 
        entered shall have the same force and effect, in all respects, 
        as a judgment in an action, and shall be subject to all the 
        provisions of law relating to such a judgment. Such judgment, 
        including the terms of the agreement (as confirmed, modified, 
        or corrected), may be enforced as if it had been rendered in an 
        action in the court in which it is entered.
    ``(f) Appeals.--An appeal may be taken from an order confirming or 
denying confirmation of a settlement agreement made under this chapter 
or modifying, correcting, or vacating such an agreement.''.
    (b) Scope of Court Enforcement in Cases of Mediation.--Section 
502(a) of such Act (29 U.S.C. 1132(a)) is amended by adding at the end 
the following new flush sentences:
``The applicability of this subsection to any qualified welfare plan 
claim shall not be affected by participation in mediation proceedings 
under chapter 2 of subpart B regarding such claim except to the extent 
otherwise required under the terms of any settlement agreement entered 
into in such proceedings.''.
    (c) Mandatory Compliance With Requests for Information by 
Facilitators in Mediation Proceedings.--Section 502 of such Act (29 
U.S.C. 1132) is amended--
            (1) in subsection (a)(5), by striking ``or'' at the end;
            (2) in subsection (a)(6), by striking the period at the end 
        and inserting ``; or'';
            (3) by inserting after subsection (a)(6) the following new 
        paragraph:
            ``(7) by the Claims Resolution Board to collect any civil 
        penalty under subsection (c)(4).''; and
            (4) by inserting at the end of subsection (c) the following 
        new paragraph:
    ``(4) The Claims Resolution Board may assess a civil penalty 
against any party to any mediation proceeding under chapter 2 of 
subpart B of this part of up to $1,000 a day from the date of such 
party's failure or refusal to supply relevant plan documents as 
required under section 531(b)(2) or such additional information or 
documents as are requested by the facilitator pursuant to section 
532(b)(6).''.
    (d) Enforcement of Civil Remedies for Violations of 
Confidentiality.--Section 502(a) of such Act (29 U.S.C. 1132(a)) is 
amended--
            (1) in paragraph (2), by inserting ``or section 536(g)(2)'' 
        after ``section 409''; and
            (2) in paragraph (6), by inserting ``or section 536(g)(1)'' 
        after ``(l)''.
    (e) Clerical Amendment.--The table of contents in section 1 of such 
Act is amended--
            (1) by inserting before the item relating to section 501 
        the following:

                   ``Subpart A--General Provisions'';

        and
            (2) by inserting before the items relating to part 6 the 
        following new items:

                 ``Subpart B--Early Resolution Program

                    ``Chapter 1--General Provisions

``Sec. 521. Establishment of the Early Resolution Program; Claims 
                            Resolution Board.
``Sec. 522. Eligibility of cases for submission to Early Resolution 
                            Program.
``Sec. 523. Facilitators.
``Sec. 524. Compensation of facilitators.
``Sec. 525. Role of attorneys.
                   ``Chapter 2--Mediation of Disputes

``Sec. 531. Initiation of proceedings.
``Sec. 532. The mediation proceedings.
``Sec. 533. Applicable time limits.
``Sec. 534. Legal effect of participation in proceedings.
``Sec. 535. Procedural rules.
``Sec. 536. Confidentiality.
``Sec. 537. Enforcement of settlement agreements.''.
    (f) Effective Date and Related Rules.--
            (1) In general.--The Claims Resolution Board shall issue 
        the initial regulations necessary to carry out the amendments 
        made by this section not later than 1 year after the date on 
        which a quorum of the initial members of the Board are 
        appointed. The amendments made by this section shall apply with 
        respect to disputes submitted to the Board after such 1-year 
        period.
            (2) Appointment of initial members.--The Secretary of Labor 
        shall appoint the initial members of the Claims Resolution 
        Board not later than 180 days after the date of the enactment 
        of this Act.
            (3) Treatment of certain collectively bargained plans.--The 
        amendments made by this section shall not apply with respect to 
        an employee welfare benefit plan if--
                    (A) such plan is in effect on the date of the 
                enactment of this Act,
                    (B) such plan is, as of such date, maintained 
                pursuant to one or more collective bargaining 
                agreements between one or more employee organizations 
                and one or more employers, and
                    (C) the terms of such agreements include, as of 
                such date, and continue to include thereafter, a 
                provision explicitly providing procedures for 
                resolution of claims disputes by arbitration, 
                mediation, or both between participants and 
                beneficiaries and the plan and (if any) insurance 
                contractors for the plan.

SEC. 4. IMPROVEMENTS IN ENFORCEMENT.

    (a) Recovery of Damages for Failure To Provide Benefits as Required 
Under an Employee Welfare Benefit Plan.--
            (1) In general.--Section 502(c) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1132(c)) (as amended by 
        the preceding provisions of this Act) is further amended by 
        adding at the end the following new paragraph:
    ``(5)(A) In any case in which a qualified welfare plan claim is 
denied in violation of the terms of the plan or of this title or in 
which any provision of this title is violated with respect to the 
administration of the plan in connection with such a claim or the 
processing of such a claim thereunder, the named fiduciary under the 
plan and any insurance contractor for the plan administering such claim 
shall be jointly and severally liable to any participant, beneficiary, 
employer, employee organization, or plan aggrieved by such failure or 
violation for actual damages (including compensatory and consequential 
damages proximately caused by such failure or violation), except that, 
subject to subparagraph (B), damages for such failure or violation 
shall not include punitive damages.
    ``(B) In any case in which a failure or violation described in 
subparagraph (A) constitutes fraud, each party liable under 
subparagraph (A) may, in the court's discretion, be liable to the 
plaintiff for punitive or exemplary damages in addition to damages 
described in subparagraph (A).
    ``(C) A named fiduciary under a multiemployer plan shall not be 
liable under this paragraph.
    ``(D) The remedies provided under this paragraph shall be in 
addition to remedies otherwise provided under this section.''.
            (2) Standing of employers, employee organizations, and 
        plans in actions for failure to meet requirements with respect 
        to benefit claims.--
                    (A) In general.--Section 502(a) of such Act (29 
                U.S.C. 1132(a)) (as amended by section 3(c)) is further 
                amended--
                            (i) in subsection (a)(6), by striking 
                        ``or'' at the end;
                            (ii) in subsection (a)(7), by striking the 
                        period and inserting ``; or''; and
                            (iii) by inserting after subsection (a)(7) 
                        the following new paragraph:
            ``(8) by an employer, an employee organization, or a plan 
        for the relief provided under subsection (c)(5).''.
                    (B) Conforming amendment.--Section 502(e)(1) of 
                such Act (29 U.S.C. 1132(e)(1)) is amended by striking 
                ``subsection (a)(1)(B) of this section'' each place it 
                appears and inserting ``paragraph (1)(A) (with respect 
                to relief under subsection (c)(5)), paragraph (1)(B), 
                or paragraph (7) of subsection (a)''.
    (b) Actions for Violations of Statutory Requirements.--Section 
502(a)(1)(B) of such Act (29 U.S.C. 1132(a)(1)(B)) is amended by 
inserting ``or the provisions of this title'' after ``plan'' each place 
it appears.
    (c) Actions by Plans Against Fiduciaries.--Section 502(a)(2) of 
such Act (29 U.S.C. 1132(a)(2)) is amended by striking ``beneficiary or 
fiduciary'' and inserting ``beneficiary, fiduciary, or plan''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to failures occurring or commencing on or after the 
date of the enactment of this Act.

SEC. 5. ATTORNEY'S FEES AND COSTS OF ACTION.

    (a) In General.--Section 502(g) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1132(g)) is amended--
            (1) in paragraph (1), by inserting ``or (3)'' after 
        ``paragraph (2)''; and
            (2) by adding at the end the following new paragraph:
    ``(3) In any action or settlement proceeding under this title with 
respect to an employee welfare benefit plan by a participant or 
beneficiary under such plan in which the participant or beneficiary 
prevails or substantially prevails, the participant or beneficiary 
shall be entitled to reasonable attorney's fees and other costs of the 
action, including reasonable expert witness fees, to be paid by the 
opposing party. Fees to which the participant or beneficiary is 
entitled under this paragraph shall be at generally prevailing hourly 
rates.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply with respect to failures occurring or commencing on or after the 
date of the enactment of this Act.

SEC. 6. CLARIFICATION OF ABILITY OF STATES TO REGULATE THE BUSINESS OF 
              INSURANCE.

    (a) In General.--Section 514(b) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1144(b)) is amended by adding at the 
end the following new paragraph:
    ``(9) Subsection (a) shall not apply to any provision of State law 
to the extent that such provision--
            ``(A) provides for the establishment or maintenance of any 
        program making available to participants and beneficiaries 
        ongoing assistance in the resolution of qualified welfare plan 
        claims under group health plans, or
            ``(B) provides for the licensing or regulation of insurance 
        contractors or provides sanctions against insurance contractors 
        for unfair claims settlement practices.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to violations occurring on or after the date of the 
enactment of this Act.

SEC. 7. STUDY OF PREEMPTION PROVISIONS.

    (a) Study.--The Secretary of Labor (or the Secretary's delegate) 
shall conduct a study on the effects of the provisions of section 514 
of the Employee Retirement Income Security Act of 1974 which provide 
for the preemption of State laws relating to employee benefit plans.
    (b) Report.--Not later than one year after the date of the 
enactment of this Act, the Secretary of Labor shall submit to the 
Committee on Education and Labor of the House of Representatives and 
the Committee on Labor and Human Resources of the Senate the results of 
the study conducted under subsection (a), together with any 
recommendations for legislative reforms which the Secretary finds 
necessary.

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