[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1028 Reported in Senate (RS)]
Calendar No. 205
104th CONGRESS
1st Session
S. 1028
[Report No. 104-156]
_______________________________________________________________________
A BILL
To provide increased access to health care benefits, to provide
increased portability of health care benefits, to provide increased
security of health care benefits, to increase the purchasing power of
individuals and small employers, and for other purposes.
_______________________________________________________________________
October 12 (legislative day, October 10), 1995
Reported with an amendment
Calendar No. 205
104th CONGRESS
1st Session
S. 1028
[Report No. 104-156]
To provide increased access to health care benefits, to provide
increased portability of health care benefits, to provide increased
security of health care benefits, to increase the purchasing power of
individuals and small employers, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 13 (legislative day, July 10), 1995
Mrs. Kassebaum (for herself, Mr. Kennedy, Mr. Frist, Mr. Dodd, Mr.
Jeffords, Ms. Mikulski, Mr. Gregg, Mr. Wellstone, Mr. Gorton, Mr. Pell,
Mr. Hatch, Mr. Simon, Mr. Chafee, Mr. Lieberman, Mr. Cohen, Mr. Kerrey,
Mr. Rockefeller, Mr. Simpson, Mr. Inouye, Mr. Dorgan, Mr. Glenn, Ms.
Snowe, Mr. Bennett, Mr. Hatfield, Mr. Abraham, and Mr. McCain)
introduced the following bill; which was read twice and referred to the
Committee on Labor and Human Resources
October 12 (legislative day, October 10), 1995
Reported by Mrs. Kassebaum, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
A BILL
To provide increased access to health care benefits, to provide
increased portability of health care benefits, to provide increased
security of health care benefits, to increase the purchasing power of
individuals and small employers, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
<DELETED>SECTION 1. SHORT TITLE.</DELETED>
<DELETED> This Act may be cited as the ``Health Insurance Reform Act
of 1995''.</DELETED>
<DELETED>SEC. 2. DEFINITIONS.</DELETED>
<DELETED> As used in this Act:</DELETED>
<DELETED> (1) Beneficiary.--The term ``beneficiary'' has the
same meaning given such term under section 3(8) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1102(8)).</DELETED>
<DELETED> (2) Employee.--The term ``employee'' has the same
meaning given such term under section 3(6) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1002(6)).</DELETED>
<DELETED> (3) Employer.--The term ``employer'' has the same
meaning given such term under section 3(6) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1002(6)),
except that such term shall only include employers of two or
more employees.</DELETED>
<DELETED> (4) Family.--</DELETED>
<DELETED> (A) In general.--The term ``family''
includes an individual, the individual's spouse, and
the child of the individual (if any).</DELETED>
<DELETED> (B) Child.--For purposes of subparagraph
(A), the term ``child'' means any individual who is a
child within the meaning of section 151(c)(3) of the
Internal Revenue Code of 1986, and under 19 years of
age.</DELETED>
<DELETED> (5) Group health plan.--The term ``group health
plan'' means any employee welfare benefit plan, governmental
plan, or church plan (as defined under paragraphs (1), (32) and
(33) of section 3 of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002(1), (32) and (33))) that maintains
(or makes contributions to) a health plan.</DELETED>
<DELETED> (6) Health plan.--The term ``health plan'' means
any plan or arrangement that provides, or pays for health
benefits (such as physician and hospital benefits) directly or
through insurance, reimbursement, or otherwise. Such term does
not include the following, or any combination
thereof:</DELETED>
<DELETED> (A) Coverage only for accidental death,
dismemberment, dental, or vision.</DELETED>
<DELETED> (B) Coverage providing wages or payments
in lieu of wages for any period during which the
employee is absent from work on account of sickness or
injury.</DELETED>
<DELETED> (C) A medicare supplemental policy (as
defined in section 1882(g)(1) of the Social Security
Act).</DELETED>
<DELETED> (D) Coverage issued as a supplement to
liability insurance.</DELETED>
<DELETED> (E) Workers' compensation or similar
insurance.</DELETED>
<DELETED> (F) Automobile medical payment
insurance.</DELETED>
<DELETED> (G) A long-term care insurance policy,
including a nursing home fixed indemnity
policy.</DELETED>
<DELETED> (H) Any plan or arrangement not described
in any preceding subparagraph that provides for benefit
payments, on a periodic basis, for a specified disease
or illness or period of hospitalization without regard
to the costs incurred or services rendered during the
period to which the payments relate.</DELETED>
<DELETED> (I) Coverage provided through a State risk
pool, uncompensated care pool, or similar subsidized
program.</DELETED>
<DELETED> (7) Individual health plan.--The term ``individual
health plan'' means a health plan marketed to
individuals.</DELETED>
<DELETED> (8) Insured health plan.--The term ``insured
health plan'' means, with respect to an employee welfare
benefit plan (as defined under section 3(1) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1002(1))), a
health plan that is a contract for health benefits with an
insurer that is subject to State regulation in accordance with
section 514(b)(2)(A) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1144(b)(2)(A))).</DELETED>
<DELETED> (9) Insurer.--The term ``insurer'' means--
</DELETED>
<DELETED> (A) a licensed insurance
company;</DELETED>
<DELETED> (B) a prepaid hospital or medical service
plan;</DELETED>
<DELETED> (C) a network plan (such as a preferred
provider organization) or heath maintenance
organization; or</DELETED>
<DELETED> (D) any other entity (other than an entity
described in paragraph (12)), except for those entities
described in section 514(b)(6)(A)(i) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1144(b)(6)(A)(i)) providing a plan of health insurance
or health benefits;</DELETED>
<DELETED>with respect to which State insurance laws apply and
are not preempted under section 514 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1144).</DELETED>
<DELETED> (10) Participant.--The term ``participant'' means
any person who is eligible, or is required to be eligible, to
receive benefits under a group health plan.</DELETED>
<DELETED> (11) Plan sponsor.--The term ``plan sponsor'' has
the same meaning given such term under section 3(16)(B) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1002(16)(B)).</DELETED>
<DELETED> (12) Secretary.--The term ``Secretary'', unless
specifically provided otherwise, means the Secretary of
Labor.</DELETED>
<DELETED> (13) Self-insured health plan.--The term ``self-
insured health plan'' means a group health plan that is not an
insured health plan.</DELETED>
<DELETED> (14) State.--The term ``State'' means each of the
several States, the District of Columbia, Puerto Rico, the
United States Virgin Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands.</DELETED>
<DELETED>TITLE I--HEALTH CARE ACCESS, PORTABILITY, AND
RENEWABILITY</DELETED>
<DELETED>Subtitle A--Group Health Plan Rules</DELETED>
<DELETED>SEC. 101. GUARANTEED AVAILABILITY OF HEALTH
COVERAGE.</DELETED>
<DELETED> (a) In General.--</DELETED>
<DELETED> (1) Group health plans.--Except as provided in
subsection (b) and section 103--</DELETED>
<DELETED> (A) an insurer may not decline to provide
whole group coverage to employers; and</DELETED>
<DELETED> (B) a group health plan (whether an
insured health plan or self-insured health plan) may
not establish eligibility, continuation, enrollment, or
contribution requirements for participants or
beneficiaries;</DELETED>
<DELETED>based on health status, medical condition, claims
experience, receipt of health care, medical history, evidence
of insurability, or disability of a participant or
beneficiary.</DELETED>
<DELETED> (3) Health promotion or disease prevention.--
Nothing in this subsection shall prevent a group health plan
from establishing discounts for participation in programs of
health promotion or disease prevention.</DELETED>
<DELETED> (b) Application of Capacity Limits.--</DELETED>
<DELETED> (1) In general.--Subject to paragraph (2), an
insurer offering coverage in connection with a group health
plan may cease enrolling employers under the plan if--
</DELETED>
<DELETED> (A) the insurer ceases to enroll any new
employers, participants and beneficiaries;
and</DELETED>
<DELETED> (B) the insurer can demonstrate to the
applicable certifying authority (as defined in section
202(d)), if required, that its financial or provider
capacity to serve previously covered participants and
beneficiaries (and additional participants and
beneficiaries who will be expected to enroll because of
their affiliation with the group health plan or such
previously covered participants or beneficiaries) will
be impaired if the insurer is required to enroll
additional employers, participants and
beneficiaries.</DELETED>
<DELETED>Such an insurer shall be prohibited from recommencing
enrollment after a cessation in enrollment under this paragraph
for a 6-month period after such cessation or until the insurer
can demonstrate to the applicable certifying authority (as
defined in section 202(d)) that the insurer has adequate
capacity, whichever is later.</DELETED>
<DELETED> (2) First-come-first-served.--An insurer offering
coverage in connection with a group health plan is only
eligible to exercise the limitations provided for in paragraph
(1) if the insurer provides for enrollment of employers
(including participants and beneficiaries) under such plan on a
first-come-first-served basis (except in the case of additional
employers, participants and beneficiaries described in
paragraph (1)(B)).</DELETED>
<DELETED> (c) Construction.--Nothing in this section shall be
construed to prevent a State from requiring insurers offering group
health plans to actively market such plans.</DELETED>
<DELETED>SEC. 102. GUARANTEED RENEWABILITY OF HEALTH
COVERAGE.</DELETED>
<DELETED> (a) In General.--</DELETED>
<DELETED> (1) Plan sponsor.--Subject to subsections (b) and
(c), a group health plan that is an insured health plan shall
be renewed or continued in force at the option of the plan
sponsor, except that the requirement of this subparagraph shall
not apply in the case of--</DELETED>
<DELETED> (A) the nonpayment of premiums or
contributions by the plan sponsor in accordance with
the terms of the plan or where the insurer has not
received timely premium payments;</DELETED>
<DELETED> (B) fraud or misrepresentation of material
fact on the part of the plan sponsor;</DELETED>
<DELETED> (C) the termination of the plan in
accordance with subsection (b); or</DELETED>
<DELETED> (D) the failure of the plan sponsor to
meet contribution or participation requirements in
accordance with paragraph (3).</DELETED>
<DELETED> (2) Participant.--Subject to subsections (b) and
(c), coverage under a group health plan (whether an insured
health plan or a self-insured health plan) shall be renewed or
continued in force, if the plan sponsor elects to continue to
provide coverage under such plan, at the option of the
participant or beneficiary, except that the requirement of this
paragraph shall not apply in the case of--</DELETED>
<DELETED> (A) the nonpayment of premiums or
contributions by the participant or beneficiary in
accordance with the terms of the plan or where the plan
has not received timely premium payments;</DELETED>
<DELETED> (B) fraud or misrepresentation of material
fact on the part of the participant or beneficiary
relating to an application for coverage or claim for
benefits;</DELETED>
<DELETED> (C) the termination of the plan in
accordance with subsection (b); or</DELETED>
<DELETED> (D) loss of eligibility for continuation
coverage as described in part 6 of subtitle B of title
I of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1161 et seq.).</DELETED>
<DELETED> (3) Contribution and participation rules.--Nothing
in this subsection shall be construed to preclude an insurer
from establishing employer contribution rules or group
participation rules for plan sponsors in connection with an
insured group health plan consistent with applicable State
law.</DELETED>
<DELETED> (b) Termination of Health Plans.--</DELETED>
<DELETED> (1) Health plan not offered.--In any case in which
an insurer is no longer going to continue to offer a group
health plan to plan sponsors, participants or beneficiaries,
the plan may be discontinued by the insurer if--</DELETED>
<DELETED> (A) the insurer provides notice to each
plan sponsor (and participants and beneficiaries
covered under the group health plan) of such
termination at least 90 days prior to the date of the
expiration of such plan;</DELETED>
<DELETED> (B) the insurer offers to each plan
sponsor, the option to purchase any other group health
plan currently being offered; and</DELETED>
<DELETED> (C) in exercising the option to
discontinue the group health plan and in offering one
or more replacement plans, the insurer acts uniformly
without regard to the health status or insurability of
participants or beneficiaries, or new participants or
beneficiaries.</DELETED>
<DELETED> (2) Insurer not offering plan.--</DELETED>
<DELETED> (A) In general.--In any case in which an
insurer is no longer offering any group health plan in
a State, the plan may be discontinued by the insurer
if--</DELETED>
<DELETED> (i) the insurer provides notice to
the applicable certifying authority (as defined
in section 202(d)) and to each plan sponsor
(and participants and beneficiaries covered
under such plan) of such termination at least
180 days prior to the date of the expiration of
the plan; and</DELETED>
<DELETED> (ii) all such plans issued or
delivered for issuance in the State are
discontinued and coverage under such plans is
nonrenewed.</DELETED>
<DELETED> (B) Application of provisions.--The
provisions of this paragraph and paragraph (3) may be
applied separately by an insurer--</DELETED>
<DELETED> (i) to all group health plans of
small employers (as defined under applicable
State law, or employers with not more than 50
employees if such term is not defined in State
law) covering participants or participants and
beneficiaries; or</DELETED>
<DELETED> (ii) to all other group health
plans offered by the insurer in the
State.</DELETED>
<DELETED> (3) Prohibition on market reentry.--In the case of
a termination under paragraph (2), the insurer may not provide
for the issuance of any insured group health plan that was
terminated in the State involved during the 5-year period
beginning on the date of the termination of the last plan not
so renewed.</DELETED>
<DELETED> (c) Treatment of Network Plans.--</DELETED>
<DELETED> (1) Geographic limitations.--A group health plan
which is a network plan (as defined in paragraph (2)) or a
health maintenance organization plan may deny continued
participation under the plan to participants or beneficiaries
who neither live, reside, nor work in an area in which the
group health plan is offered, but only if such denial is
applied uniformly, without regard to health status or the
insurability of particular participants or
beneficiaries.</DELETED>
<DELETED> (2) Network plan.--As used in paragraph (1), the
term ``network plan'' means a health plan that arranges for the
financing and delivery of health care services to participants
or beneficiaries covered under such health plan, in whole or in
part, through arrangements with providers to furnish health
care services.</DELETED>
<DELETED>SEC. 103. PORTABILITY OF HEALTH COVERAGE AND LIMITATION ON
PREEXISTING CONDITION EXCLUSIONS.</DELETED>
<DELETED> (a) In General.--A group health plan (whether an insured
health plan or a self-insured health plan) may impose a limitation or
exclusion of benefits relating to treatment of a preexisting condition
based on the fact that the condition existed prior to the effective
date of the plan with respect to a participant or beneficiary only if--
</DELETED>
<DELETED> (1) the limitation or exclusion extends for a
period of not more than 12 months after the date of enrollment
in the health plan;</DELETED>
<DELETED> (2) the limitation or exclusion does not apply to
an individual who, within 30 days of the date of birth, was
covered under the plan; and</DELETED>
<DELETED> (3) the limitation or exclusion does not apply to
a pregnancy existing on the effective date of
coverage.</DELETED>
<DELETED> (b) Crediting of Qualifying Previous Coverage.--</DELETED>
<DELETED> (1) In general.--A group health plan (whether an
insured health plan or a self-insured health plan) shall
provide that if a participant or beneficiary is in a period of
previous qualifying coverage as of the date of enrollment under
such plan, any period of exclusion or limitation of coverage
with respect to a preexisting condition shall be reduced by 1
month for each month in which the participant or beneficiary
was in the period of qualifying previous coverage.</DELETED>
<DELETED> (2) Discharge of duty.--The duty of an insurer or
plan sponsor to verify previous qualifying coverage with
respect to a participant or beneficiary is effectively
discharged when such insurer or plan sponsor provides
documentation to a participant or beneficiary at the time such
participant or beneficiary becomes ineligible for coverage
under the group health plan verifying--</DELETED>
<DELETED> (A) the dates that the participant or
beneficiary was covered under such previous qualifying
coverage; and</DELETED>
<DELETED> (B) the benefits and cost-sharing
arrangement available to the participant or beneficiary
under such previous qualifying coverage.</DELETED>
<DELETED> (3) Definition.--The term ``previous qualifying
coverage'' means the period beginning on the date a participant
or beneficiary is enrolled under a health plan and ends on the
date the participant or beneficiary is not so enrolled for a
continuous period of more than 30 days (without regard to any
waiting period).</DELETED>
<DELETED> (4) Construction.--Nothing in this subsection
shall be construed to prohibit a preexisting condition
exclusion, subject to the limits in subsection (a)(1), for a
service or benefit related to a preexisting condition if such
service or benefit was not previously covered under the health
plan in which the individual was enrolled immediately prior to
enrollment in the plan involved.</DELETED>
<DELETED> (c) Late Enrollees.--With respect to a participant or
beneficiary enrolling in a group health plan (whether an insured health
plan or a self-insured health plan) during a time that is other than
the first opportunity to enroll during an enrollment period of at least
30 days, the plan may exclude coverage with respect to services related
to the treatment of a preexisting condition in accordance with
subsections (a) and (b), except the period of such exclusion may not
exceed 18 months beginning on the date of coverage under the
plan.</DELETED>
<DELETED> (d) Waiting Periods.--With respect to participants or
beneficiaries who have become eligible to enroll in a group health plan
(whether an insured health plan or a self-insured health plan), if such
plan does not utilize a preexisting condition exclusion, such plan may
impose a waiting period on such participants or beneficiaries not to
exceed 60 days (or in the case of a late participant or beneficiary
described in subsection (c), 90 days) prior to the date on which
coverage under the plan becomes effective. A group health plan may also
use alternative methods to address adverse selection as approved by the
applicable certifying authority (as defined in section 202(d)). During
such a waiting period, the plan may not be required to provide health
care services or benefits and no premium shall be charged to the
participants or beneficiaries.</DELETED>
<DELETED> (e) Preexisting Condition.--For purposes of this section,
the term ``preexisting condition'' means a condition for which medical
advice, diagnosis, care, or treatment was recommended or received
within the 6-month period ending on the day before the effective date
of the coverage (without regard to any waiting period).</DELETED>
<DELETED> (f) State Flexibility.--Nothing in this Act shall be
construed to preempt State laws that limit the exclusions or
limitations for preexisting conditions to periods that are shorter than
those provided for under this section so long as such laws are not in
violation of section 514 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1144).</DELETED>
<DELETED>SEC. 104. SPECIAL ENROLLMENT PERIODS.</DELETED>
<DELETED> In the case of a participant, beneficiary or family member
who--</DELETED>
<DELETED> (1) through marriage, separation, divorce, death,
birth or adoption of a child, experiences a change in family
composition affecting health insurance coverage;</DELETED>
<DELETED> (2) experiences a change in employment status
(including a significant change in the terms and conditions of
employment) or in continuation coverage; or</DELETED>
<DELETED> (3) experiences a loss of health insurance
coverage because of a change in the employment status of a
family member;</DELETED>
<DELETED>each group health plan (whether insured or self-insured) shall
provide for a special enrollment period at the time of such event which
would permit the participant, beneficiary or family member to change
the individual or family basis of coverage or to enroll in the plan if
coverage would have been available to such individual but for failure
to enroll during a previous enrollment period. Such a special
enrollment period shall ensure that a child born or adopted shall be
deemed to be covered under the plan as of the date of such birth or
adoption if such child is enrolled within 30 days of the date of such
birth or adoption.</DELETED>
<DELETED>SEC. 105. DISCLOSURE OF INFORMATION.</DELETED>
<DELETED> (a) In General.--In connection with the offering for sale
of any group health plan to a small employer (as defined under
applicable State law, or employers with not more than 50 employees if
such term is not defined in State law), an insurer shall make a
reasonable disclosure to the employer, as part of its solicitation and
sales materials, of--</DELETED>
<DELETED> (1) the provisions of the group health plan
concerning the insurer's right to change premium rates and the
factors that affect changes in premium rates;</DELETED>
<DELETED> (2) the provisions of such plan relating to
renewability of policies and contracts;</DELETED>
<DELETED> (3) the provisions of such plan relating to any
preexisting condition provision; and</DELETED>
<DELETED> (4) descriptive information about the benefits and
premiums available under all group health plans for which the
employer is qualified.</DELETED>
<DELETED>Information shall be provided under this subsection in a
manner determined to be understandable by the average small employer or
plan sponsor, and shall be sufficiently accurate and comprehensive to
reasonably inform employers, participants and beneficiaries of their
rights and obligations under the plan.</DELETED>
<DELETED> (b) Exception.--With respect to the requirement of
subsection (a), any information that is proprietary and trade secret
information under applicable law shall not be subject to the disclosure
requirements of such subsection.</DELETED>
<DELETED> (c) Construction.--Nothing in this section shall be
construed to preempt State reporting and disclosure requirements or
reporting and disclosure requirements under the Employee Retirement
Income Security Act of 1974.</DELETED>
<DELETED>Subtitle B--Individual Health Plan Rules</DELETED>
<DELETED>SEC. 110. INDIVIDUAL HEALTH PLAN PORTABILITY.</DELETED>
<DELETED> (a) Limitation on Requirements.--</DELETED>
<DELETED> (1) In general.--With respect to an individual
desiring to enroll in an individual health plan, if such
individual is in a period of previous qualifying coverage (as
defined in section 103(b)(3)) under a group health plan that
commenced 12 or more months prior to the date on which such
individual desires to enroll in such a plan, an insurer
described in paragraph (3) may not establish eligibility,
continuation, or enrollment requirements based on the health
status, medical condition, claims experience, receipt of health
care, medical history, evidence of insurability, or disability
of the individual.</DELETED>
<DELETED> (2) Health promotion and disease prevention.--
Nothing in this subsection shall be construed to prevent an
insurer from establishing discounts for participation in
programs of health promotion or disease prevention.</DELETED>
<DELETED> (3) Insurer.--An insurer described in this
paragraph is an insurer that issues or renews any type or form
of health plan to individuals.</DELETED>
<DELETED> (4) Premiums.--Nothing in this subsection shall be
construed to affect the determination of an insurer as to the
amount of the premium payable under a health plan issued to
individuals under applicable State law.</DELETED>
<DELETED> (b) Eligibility for Other Group Coverage.--The provisions
of subsection (a) shall not apply to an individual who is eligible for
coverage under a group health plan, or who has had coverage terminated
under a group health plan for failure to make required premium payments
or contributions, or for fraud or misrepresentation of material fact,
or who is otherwise eligible for continuation coverage as described in
section 602 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1162).</DELETED>
<DELETED> (c) Market Requirements.--The provisions of subsection (a)
shall not be construed to require that an insurer be an insurer of
individuals.</DELETED>
<DELETED>SEC. 111. GUARANTEED RENEWABILITY OF INDIVIDUAL HEALTH
COVERAGE.</DELETED>
<DELETED> (a) In General.--Subject to subsections (b) and (c),
coverage for individuals under an individual health plan shall be
renewed or continued in force at the option of the individual, except
that the requirement of this subsection shall not apply in the case
of--</DELETED>
<DELETED> (1) the nonpayment of premiums or contributions by
the individual in accordance with the terms of the plan or
where the plan has not received timely premium
payments;</DELETED>
<DELETED> (2) fraud or misrepresentation of material fact on
the part of the individual; or</DELETED>
<DELETED> (3) the termination of the plan in accordance with
subsection (b).</DELETED>
<DELETED> (b) Termination of Health Plans.--</DELETED>
<DELETED> (1) Health plan not offered.--In any case in which
an insurer is no longer going to continue to offer an
individual health plan to individuals, the plan may be
discontinued by the insurer if--</DELETED>
<DELETED> (A) the insurer provides notice to each
individual covered under the plan of such termination
at least 90 days prior to the date of the expiration of
the plan;</DELETED>
<DELETED> (B) the insurer offers to each individual
covered under the plan the option to purchase any other
health plan currently being offered to individuals;
and</DELETED>
<DELETED> (C) in exercising the option to
discontinue the plan and in offering one or more
replacement plans, the insurer acts uniformly without
regard to the health status or insurability of
individuals.</DELETED>
<DELETED> (2) Insurer not offering plan.--In any case in
which an insurer is no longer offering any individual health
plan in a State, the plan may be discontinued by the insurer
if--</DELETED>
<DELETED> (A) the insurer provides notice to the
applicable certifying authority (as defined in section
202(d)) and to each individual covered under the plan
of such termination at least 180 days prior to the date
of the expiration of the plan; and</DELETED>
<DELETED> (B) all such plans issued or delivered for
issuance in the State are discontinued and coverage
under such plans is nonrenewed.</DELETED>
<DELETED> (3) Prohibition on market reentry.--In the case of
a termination under paragraph (2), the insurer may not provide
for the issuance of any individual health plan in the State
involved during the 5-year period beginning on the date of the
termination of the last plan not so renewed.</DELETED>
<DELETED> (c) Treatment of Network Plans.--</DELETED>
<DELETED> (1) Geographic limitations.--An individual health
plan which is a network plan (as defined in paragraph (2)) or a
health maintenance organization plan may deny continued
participation under the plan to individuals who neither live,
reside, nor work in an area in which the individual health plan
is offered, but only if such denial is applied uniformly,
without regard to health status or the insurability of
particular individuals.</DELETED>
<DELETED> (2) Network plan.--As used in paragraph (1), the
term ``network plan'' means a health plan that arranges for the
financing and delivery of health care services to individuals
covered under such health plan, in whole or in part, through
arrangements with providers to furnish health care
services.</DELETED>
<DELETED>SEC. 112. STATE FLEXIBILITY IN INDIVIDUAL MARKET
REFORMS.</DELETED>
<DELETED> With respect to any State law in effect on, or enacted
after, the date of enactment of this Act, such as guarantee issue, open
enrollment, high-risk pools, or mandatory conversion policies, such
State law shall apply in lieu of the standards described in sections
110 and 111 unless the Secretary of Health and Human Services
determines that such State law is not as effective in providing access
to affordable health care coverage as the standards described in
sections 110 and 111.</DELETED>
<DELETED>SEC. 113. INDIVIDUAL HEALTH COVERAGE AVAILABILITY
STUDY.</DELETED>
<DELETED> (a) In General.--Not later than January 1, 1997, the
Secretary of Health and Human Services, in consultation with the
Secretary, representatives of State officials, consumers, and other
representatives of individuals and entities that have expertise in
health insurance and employee benefit issues, shall conduct a study,
and prepare and submit to the appropriate committees of Congress a
report, concerning--</DELETED>
<DELETED> (1) the most appropriate way, in light of the
experience of the various States, expert opinions, and such
additional data as may be available, to ensure the availability
of reasonably priced health insurance to individuals purchasing
coverage on a non-group basis;</DELETED>
<DELETED> (2) the need for Federal standards that limit the
variation in health insurance premiums charged to individuals
and groups of different characteristics in order to achieve the
purposes of this Act; and</DELETED>
<DELETED> (3) the effectiveness of the provisions of this
Act, and State insurance reform laws, in stabilizing the small
group health insurance market by providing for the broad
pooling of risk.</DELETED>
<DELETED> (b) Recommendations.--The report submitted under
subsection (a) shall contain the recommendations of the Secretary of
Health and Human Services and the Secretary for additional Federal
legislation, if any, that is needed to ensure the availability of
reasonably priced health insurance for individuals and
employers.</DELETED>
<DELETED>Subtitle C--COBRA Clarifications</DELETED>
<DELETED>SEC. 121. COBRA CLARIFICATIONS.</DELETED>
<DELETED> (a) Public Health Service Act.--</DELETED>
<DELETED> (1) Period of coverage.--Section 2202(2) of the
Public Health Service Act (42 U.S.C. 300bb-2(2)) is amended--
</DELETED>
<DELETED> (A) in subparagraph (A)--</DELETED>
<DELETED> (i) by transferring the sentence
immediately preceding clause (iv) so as to
appear immediately following such clause (iv);
and</DELETED>
<DELETED> (ii) in the last sentence (as so
transferred)--</DELETED>
<DELETED> (I) by inserting ``, or a
beneficiary-family member of the
individual,'' after ``an individual'';
and</DELETED>
<DELETED> (II) by striking ``at the
time of a qualifying event described in
section 2203(2)'' and inserting ``at
any time during the initial 18-month
period of continuing coverage under
this title''; and</DELETED>
<DELETED> (B) in subparagraph (E), by striking ``at
the time of a qualifying event described in section
2203(2)'' and inserting ``at any time during the
initial 18-month period of continuing coverage under
this title''.</DELETED>
<DELETED> (2) Election.--Section 2205(1)(C) of the Public
Health Service Act (42 U.S.C. 300bb-5(1)(C)) is amended--
</DELETED>
<DELETED> (A) in clause (i), by striking ``or'' at
the end thereof;</DELETED>
<DELETED> (B) in clause (ii), by striking the period
and inserting ``, or''; and</DELETED>
<DELETED> (C) by adding at the end thereof the
following new clause:</DELETED>
<DELETED> ``(iii) in the case of an
individual described in the last sentence of
section 2202(2)(A), or a beneficiary-family
member of the individual, the date such
individual is determined to have been
disabled.''.</DELETED>
<DELETED> (3) Notices.--Section 2206(3) of the Public Health
Service Act (42 U.S.C. 300bb-6(3)) is amended by striking ``at
the time of a qualifying event described in section 2203(2)''
and inserting ``at any time during the initial 18-month period
of continuing coverage under this title''.</DELETED>
<DELETED> (4) Birth or adoption of a child.--Section
2208(3)(A) of the Public Health Service Act (42 U.S.C. 300bb-
8(3)(A)) is amended by adding at the end thereof the following
new flush sentence:</DELETED>
<DELETED>``Such term shall also include a child who is born to
or adopted by the covered employee during the period of
continued coverage under this title.''.</DELETED>
<DELETED> (b) Employee Retirement Income Security Act of 1974.--
</DELETED>
<DELETED> (1) Period of coverage.--Section 602(2) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1162(2)) is amended--</DELETED>
<DELETED> (A) in the last sentence of subparagraph
(A)--</DELETED>
<DELETED> (i) by inserting ``, or a
beneficiary-family member of the individual,''
after ``an individual''; and</DELETED>
<DELETED> (ii) by striking ``at the time of
a qualifying event described in section
603(2)'' and inserting ``at any time during the
initial 18-month period of continuing coverage
under this part''; and</DELETED>
<DELETED> (B) in subparagraph (E), by striking ``at
the time of a qualifying event described in section
603(2)'' and inserting ``at any time during the initial
18-month period of continuing coverage under this
part''.</DELETED>
<DELETED> (2) Election.--Section 605(1)(C) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1165(1)(C))
is amended--</DELETED>
<DELETED> (A) in clause (i), by striking ``or'' at
the end thereof;</DELETED>
<DELETED> (B) in clause (ii), by striking the period
and inserting ``, or''; and</DELETED>
<DELETED> (C) by adding at the end thereof the
following new clause:</DELETED>
<DELETED> ``(iii) in the case of an
individual described in the last sentence of
section 602(2)(A), or a beneficiary-family
member of the individual, the date such
individual is determined to have been
disabled.''.</DELETED>
<DELETED> (3) Notices.--Section 606(3) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1166(3)) is
amended by striking ``at the time of a qualifying event
described in section 603(2)'' and inserting ``at any time
during the initial 18-month period of continuing coverage under
this part''.</DELETED>
<DELETED> (4) Birth or adoption of a child.--Section
607(3)(A) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1167(3)) is amended by adding at the end
thereof the following new flush sentence:</DELETED>
<DELETED>``Such term shall also include a child who is born to
or adopted by the covered employee during the period of
continued coverage under this part.''.</DELETED>
<DELETED> (c) Internal Revenue Code of 1986.--</DELETED>
<DELETED> (1) Period of coverage.--Section 4980B(f)(2)(B) of
the Internal Revenue Code of 1986 is amended--</DELETED>
<DELETED> (A) in the last sentence of clause (i) by
striking ``at the time of a qualifying event described
in paragraph (3)(B)'' and inserting ``at any time
during the initial 18-month period of continuing
coverage under this section''; and</DELETED>
<DELETED> (B) in clause (v), by striking ``at the
time of a qualifying event described in paragraph
(3)(B)'' and inserting ``at any time during the initial
18-month period of continuing coverage under this
section''.</DELETED>
<DELETED> (2) Election.--Section 4980B(f)(5)(A)(iii) of the
Internal Revenue Code of 1986 is amended--</DELETED>
<DELETED> (A) in subclause (I), by striking ``or''
at the end thereof;</DELETED>
<DELETED> (B) in subclause (II), by striking the
period and inserting ``, or''; and</DELETED>
<DELETED> (C) by adding at the end thereof the
following new subclause:</DELETED>
<DELETED> ``(III) in the case of an
qualified beneficiary described in the
last sentence of paragraph (2)(B)(i),
the date such individual is determined
to have been disabled.''.</DELETED>
<DELETED> (3) Notices.--Section 4980B(f)(6)(C) of the
Internal Revenue Code of 1986 is amended by striking ``at the
time of a qualifying event described in paragraph (3)(B)'' and
inserting ``at any time during the initial 18-month period of
continuing coverage under this section''.</DELETED>
<DELETED> (4) Birth or adoption of a child.--Section
4980B(g)(1)(A) of the Internal Revenue Code of 1986 is amended
by adding at the end thereof the following new flush
sentence:</DELETED>
<DELETED>``Such term shall also include a child who is
born to or adopted by the covered employee during the
period of continued coverage under this
section.''.</DELETED>
<DELETED> (d) Effective Date.--The amendment made by this section
shall apply to qualifying events occurring on or after the date of the
enactment of this Act for plan years beginning after December 31,
1996.</DELETED>
<DELETED> (e) Notification of Changes.--Not later than 60 days after
the date of enactment of this Act, each group health plan (covered
under title XXII of the Public Health Service Act, part 6 of subtitle A
of title I of the Employee Retirement Income Security Act of 1974, and
section 4980B(f) of the Internal Revenue Code of 1986) shall notify
each qualified beneficiary who has elected continuation coverage under
such title, part or section of the amendments made by this
section.</DELETED>
<DELETED>Subtitle D--Private Health Plan Purchasing
Coalitions</DELETED>
<DELETED>SEC. 131. PRIVATE HEALTH PLAN PURCHASING COALITIONS.</DELETED>
<DELETED> (a) Definition.--As used in this Act, the term ``health
plan purchasing coalition'' means a group of individuals or employers
that, on a voluntary basis and in accordance with this section, form an
entity for the purpose of purchasing insured health plans or
negotiating with insured health plans and providers. An insurer, agent,
broker or any other individual or entity engaged in the sale of
insurance may not form or underwrite a coalition.</DELETED>
<DELETED> (b) Certification.--</DELETED>
<DELETED> (1) In general.--A State shall certify health plan
purchasing coalitions that meet the requirements of this
section. Each coalition shall be chartered under State law and
registered with the Secretary.</DELETED>
<DELETED> (2) State refusal to certify.--If a State fails to
implement a program for certifying health plan purchasing
coalitions in accordance with the standards under this Act, the
Secretary shall certify and oversee the operations of such
coalitions in such State.</DELETED>
<DELETED> (3) Multi-state coalitions.--For purposes of this
section, a health plan purchasing coalition operating in more
than one State shall be certified by the State in which the
coalition is domiciled, pursuant to an agreement between the
States in which the coalition conducts business.</DELETED>
<DELETED> (d) Board of Directors.--</DELETED>
<DELETED> (1) In general.--Each health plan purchasing
coalition shall be governed by a Board of Directors that shall
be responsible for ensuring the performance of the duties of
the coalition under this section. The Board shall be composed
of a broad cross-section of representatives of employers,
employees, and individuals participating in the coalition. An
insurer, agent, broker or any other individual or entity
engaged in the sale of insurance may not hold or control any
right to vote with respect to a coalition.</DELETED>
<DELETED> (2) Limitation on compensation.--A health plan
purchasing coalition may not provide compensation to members of
the Board of Directors. The coalition may provide
reimbursements to such members for the reasonable and necessary
expenses incurred by the members in the performance of their
duties as members of the Board.</DELETED>
<DELETED> (3) Conflict of interest.--No member of the Board
of Directors (or family members of such members) nor any
management personnel of the coalition may be employed by, be a
consultant for, be a member of the board of directors of, be
affiliated with an agent of, or otherwise be a representative
of any health plan or other insurer, health care provider, or
agent or broker. Nothing in the preceding sentence shall limit
a member of the Board from purchasing coverage from a health
plan offered through the coalition.</DELETED>
<DELETED> (e) Membership and Marketing Area.--</DELETED>
<DELETED> (1) Membership.--</DELETED>
<DELETED> (A) In general.--A health plan purchasing
coalition may establish limits on the size of employers
who may become members of the coalition, and may
determine whether to permit individuals to become
members. Upon the establishment of such membership
requirements, the coalition shall, except as provided
in subparagraph (B), accept all employers (or
individuals) residing within the area served by the
coalition who meet such requirements as members on a
first come, first-served basis.</DELETED>
<DELETED> (B) Capacity limits.--A health plan
purchasing coalition may cease accepting employers or
individuals as members of the coalition if--</DELETED>
<DELETED> (i) the coalition ceases to permit
any new employers or individuals to become
members; and</DELETED>
<DELETED> (ii) the coalition can demonstrate
to the State (or the Secretary in the case of
coalitions certified by the Secretary) that the
financial or other capacity of the coalition to
serve current members will be impaired if the
coalition is required to accept other
members.</DELETED>
<DELETED> (2) Marketing area.--A State may establish rules
regarding the geographic area that must be served by a health
plan purchasing coalition. With respect to a State that has not
established such rules, a health plan purchasing coalition
operating in the State shall define the boundaries of the area
to be served by the coalition, except that such boundaries may
not be established on the basis of health status or
insurability.</DELETED>
<DELETED> (f) Duties and Responsibilities.--</DELETED>
<DELETED> (1) In general.--A health plan purchasing
coalition shall--</DELETED>
<DELETED> (A) enter into agreements with insured
health plans;</DELETED>
<DELETED> (B) enter into agreements with employers
and individuals who become members of the
coalition;</DELETED>
<DELETED> (C) participate in any program of risk-
adjustment or reinsurance, or any similar program, that
is established by the State;</DELETED>
<DELETED> (D) contract and negotiate with health
care providers and health plans;</DELETED>
<DELETED> (E) prepare and disseminate comparative
health plan materials (including information about
cost, quality, benefits, and other information
concerning health plans offered through the
coalition);</DELETED>
<DELETED> (F) actively market to all eligible
employers and individuals residing within the service
area; and</DELETED>
<DELETED> (G) act as an ombudsman for health plan
enrollees.</DELETED>
<DELETED> (2) Permissible activities.--A health plan
purchasing coalition may perform such other functions as
necessary to further the purposes of this Act, including--
</DELETED>
<DELETED> (A) the collection and distribution of
premiums and the performance of other administrative
functions;</DELETED>
<DELETED> (B) the collection and analysis of surveys
of health plan enrollee satisfaction;</DELETED>
<DELETED> (C) the charging of membership fee to
enrollees (such fees may not be based on health status)
and the charging of participation fees to health plans;
and</DELETED>
<DELETED> (D) cooperating with (or accepting as
members) employers who self-insure for the purpose of
negotiating with providers.</DELETED>
<DELETED> (g) Limitations on Coalition Activities.--A health plan
purchasing coalition shall not--</DELETED>
<DELETED> (1) perform any activity relating to the licensing
of health plans;</DELETED>
<DELETED> (2) assume financial risk in relating to any
health plan;</DELETED>
<DELETED> (3) perform any other activities that conflict or
are inconsistent with the performance of its duties under this
Act; or</DELETED>
<DELETED> (4) establish eligibility, continuation,
enrollment, or contribution requirements for employees or
employers and individuals based on the health status, medical
condition, claims experience, receipt of health care, medical
history, evidence of insurability, or disability of any
individual.</DELETED>
<DELETED> (h) Limited Preemption of Certain State Laws.--</DELETED>
<DELETED> (1) In general.--With respect to a health plan
purchasing coalition that meets the requirements of this
section, the following State laws shall be preempted:</DELETED>
<DELETED> (A) State fictitious group laws.</DELETED>
<DELETED> (B) State rating requirement laws, except
to the extent necessary to comply with the requirements
of paragraph (2).</DELETED>
<DELETED> (C) Other State laws that directly
conflict with the requirements in this
section.</DELETED>
<DELETED> (2) Rating requirement laws.--With respect to a
State rating requirement law, the coalition--</DELETED>
<DELETED> (A) may not permit premium rates to vary
among employers or individuals that are members of a
health plan purchasing coalition in excess of the
amount of such variations that would be permitted under
such State rating laws among employers that are not
members of the coalition; and</DELETED>
<DELETED> (B) with respect to premium rates
negotiated by the coalition, may permit such rates to
be less than rates that would otherwise be permitted
under State law if such rating differential is not
based on differences in health status or demographic
factors.</DELETED>
<DELETED> (i) Rules of Construction.--Nothing in this section shall
be construed to--</DELETED>
<DELETED> (1) require that a State organize, operate, or
otherwise create health care purchasing coalitions;</DELETED>
<DELETED> (2) otherwise require the establishment of health
care purchasing coalitions;</DELETED>
<DELETED> (3) require individuals or employers to purchase
health plans through a health plan purchasing
coalition;</DELETED>
<DELETED> (4) require that a health plan purchasing
coalition be the only type of health insurance purchasing
arrangement permitted to operate in a State; or</DELETED>
<DELETED> (5) confer authority upon a State that the State
would not otherwise have to regulate health plans (whether
insured or self-insured).</DELETED>
<DELETED> (j) Application of ERISA.--The requirements of parts 4 and
5 of subtitle B of title I of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1101) shall apply to a health plan purchasing
coalition.</DELETED>
<DELETED>TITLE II--APPLICATION AND ENFORCEMENT OF STANDARDS</DELETED>
<DELETED>SEC. 201. APPLICABILITY.</DELETED>
<DELETED> (a) Construction.--</DELETED>
<DELETED> (1) In general.--A requirement or standard imposed
on an insured health plan under this Act shall be deemed to be
a requirement or standard imposed on the insurer. A requirement
or standard imposed on a self-insured health plan under this
Act shall be deemed to be a requirement or standard imposed on
the plan sponsor.</DELETED>
<DELETED> (2) Preemption of state law.--Nothing in this Act
shall be construed to prevent a State from establishing,
implementing, or continuing in effect standards and
requirements related to the issuance, renewal, or rating of
health insurance, or other standards or requirements related to
health insurance, unless such standards are in direct conflict
with the standards or requirements established under this
Act.</DELETED>
<DELETED>SEC. 202. ENFORCEMENT OF STANDARDS.</DELETED>
<DELETED> (a) Insured Health Plans.--Each State shall require that
each insured health plan issued, sold, renewed, offered for sale or
operated in such State meet the insurance reform standards established
under this Act pursuant to an enforcement plan filed by the State with
the Secretary. A State shall submit such information as required by the
Secretary demonstrating effective implementation of the State
enforcement plan.</DELETED>
<DELETED> (b) Self-Insured Health Plans.--In the case of self-
insured health plans, the Secretary shall enforce the reform standards
established under this Act. A plan failing to meet such standards shall
be subject to civil enforcement as provided for under section 502 of
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132)
and for penalties as provided for under paragraphs (1) and (2) of
section 502(a) of such Act (relating to failure to provide requested
information and failure to file required reports).</DELETED>
<DELETED> (c) Failure to Implement Plan.--In the case of the failure
of a State to enforce the standards and requirements set forth in this
Act, the Secretary, in consultation with the Secretary of Health and
Human Services, shall implement an enforcement plan meeting the
standards of this Act in such State. In the case of a State that fails
to enforce the standards and requirements set forth in this Act, each
health plan operating in such State shall be subject to civil
enforcement as provided for under section 502 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1132) and for
penalties as provided for under paragraphs (1) and (2) of subsection
(a) of such section (relating to failure to provide requested
information and failure to file required reports).</DELETED>
<DELETED> (d) Applicable Certifying Authority.--As used in this
title, the term ``applicable certifying authority'' means, with respect
to--</DELETED>
<DELETED> (1) insured health plans, the State insurance
commissioner for the State involved; and</DELETED>
<DELETED> (2) a self-insured health plan, the
Secretary.</DELETED>
<DELETED>TITLE III--MISCELLANEOUS PROVISIONS</DELETED>
<DELETED>SEC. 301. HMOS ALLOWED TO OFFER PLANS WITH DEDUCTIBLES TO
INDIVIDUALS WITH MEDICAL SAVINGS ACCOUNTS.</DELETED>
<DELETED> (a) In General.--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:</DELETED>
<DELETED> ``(6)(A) If a member certifies that a medical
savings account has been established for the benefit of such
member, a health maintenance organization may, at the request
of such member reduce the basic health services payment
otherwise determined under paragraph (1) by requiring the
payment of a deductible by the member for basic health
services.</DELETED>
<DELETED> ``(B) For purposes of this paragraph, the term
`medical savings account' means an account which, by its terms,
allows the deposit of funds and the use of such funds and
income derived from the investment of such funds for the
payment of the deductible described in subparagraph
(A).''.</DELETED>
<DELETED> (b) Medical Savings Accounts.--It is the sense of the
Committee on Labor and Human Resources of the Senate that the
establishment of medical savings accounts, including those defined in
section 1301(b)(6)(B) of the Public Health Service Act (42 U.S.C.
300e(b)(6)(B)), should be encouraged as part of any health insurance
reform legislation passed by the Senate through the use of tax
incentives relating to contributions to, the income growth of, and the
qualified use of, such accounts.</DELETED>
<DELETED> (b) Sense of the Senate.--It is the sense of the Senate
that the Congress should take measures to further the purposes of this
Act, including any necessary changes to the Internal Revenue Code of
1986 to encourage groups and individuals to obtain health coverage, and
to promote access, equity, portability, affordability, and security of
health benefits.</DELETED>
<DELETED>SEC. 302. EFFECTIVE DATE.</DELETED>
<DELETED> The provisions of this Act shall apply to health plans
offered, sold, issued, renewed, or operated on or after January 1,
1996.</DELETED>
<DELETED>SEC. 303. SEVERABILITY.</DELETED>
<DELETED> If any provision of this Act or the application of such
provision to any person or circumstance is held to be unconstitutional,
the remainder of this Act and the application of the provisions of such
to any person or circumstance shall not be affected thereby.</DELETED>
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Health Insurance
Reform Act of 1995''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
TITLE I--HEALTH CARE ACCESS, PORTABILITY, AND RENEWABILITY
Subtitle A--Group Market Rules
Sec. 101. Guaranteed availability of health coverage.
Sec. 102. Guaranteed renewability of health coverage.
Sec. 103. Portability of health coverage and limitation on preexisting
condition exclusions.
Sec. 104. Special enrollment periods.
Sec. 105. Disclosure of information.
Subtitle B--Individual Market Rules
Sec. 110. Individual health plan portability.
Sec. 111. Guaranteed renewability of individual health coverage.
Sec. 112. State flexibility in individual market reforms.
Sec. 113. Definition.
Subtitle C--COBRA Clarifications
Sec. 121. Cobra clarifications.
Subtitle D--Private Health Plan Purchasing Cooperatives
Sec. 131. Private health plan purchasing cooperatives.
TITLE II--APPLICATION AND ENFORCEMENT OF STANDARDS
Sec. 201. Applicability.
Sec. 202. Enforcement of standards.
TITLE III--MISCELLANEOUS PROVISIONS
Sec. 301. HMOs allowed to offer plans with deductibles to individuals
with medical savings accounts.
Sec. 302. Health coverage availability study.
Sec. 303. Sense of the Committee concerning Medicare.
Sec. 304. Effective date.
Sec. 305. Severability.
SEC. 2. DEFINITIONS.
As used in this Act:
(1) Beneficiary.--The term ``beneficiary'' has the meaning
given such term under section 3(8) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(8)).
(2) Employee.--The term ``employee'' has the meaning given
such term under section 3(6) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002(6)).
(3) Employer.--The term ``employer'' has the meaning given
such term under section 3(5) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002(5)), except that such term
shall include only employers of two or more employees.
(4) Employee health benefit plan.--
(A) In general.--The term ``employee health benefit
plan'' means any employee welfare benefit plan,
governmental plan, or church plan (as defined under
paragraphs (1), (32), and (33) of section 3 of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1002 (1), (32), and (33))) that provides or pays
for health benefits (such as provider and hospital
benefits) for participants and beneficiaries whether--
(i) directly;
(ii) through a group health plan offered by
a health plan issuer as defined in paragraph
(8); or
(iii) otherwise.
(B) Rule of construction.--An employee health
benefit plan shall not be construed to be a group
health plan, an individual health plan, or a health
plan issuer.
(C) Arrangements not included.--Such term does not
include the following, or any combination thereof:
(i) Coverage only for accident, or
disability income insurance, or any combination
thereof.
(ii) Medicare supplemental health insurance
(as defined under section 1882(g)(1) of the
Social Security Act).
(iii) Coverage issued as a supplement to
liability insurance.
(iv) Liability insurance, including general
liability insurance and automobile liability
insurance.
(v) Workers compensation or similar
insurance.
(vi) Automobile medical payment insurance.
(vii) Coverage for a specified disease or
illness.
(viii) Hospital or fixed indemnity
insurance.
(ix) Short-term limited duration insurance.
(x) Credit-only, dental-only, or vision-
only insurance.
(xi) A health insurance policy providing
benefits only for long-term care, nursing home
care, home health care, community-based care,
or any combination thereof.
(5) Family.--
(A) In general.--The term ``family'' means an
individual, the individual's spouse, and the child of
the individual (if any).
(B) Child.--For purposes of subparagraph (A), the
term ``child'' means any individual who is a child
within the meaning of section 151(c)(3) of the Internal
Revenue Code of 1986.
(6) Group health plan.--
(A) In general.--The term ``group health plan''
means any contract, policy, certificate or other
arrangement offered by a health plan issuer to a group
purchaser that provides or pays for health benefits
(such as provider and hospital benefits) in connection
with an employee health benefit plan.
(B) Arrangements not included.--Such term does not
include the following, or any combination thereof:
(i) Coverage only for accident, or
disability income insurance, or any combination
thereof.
(ii) Medicare supplemental health insurance
(as defined under section 1882(g)(1) of the
Social Security Act).
(iii) Coverage issued as a supplement to
liability insurance.
(iv) Liability insurance, including general
liability insurance and automobile liability
insurance.
(v) Workers compensation or similar
insurance.
(vi) Automobile medical payment insurance.
(vii) Coverage for a specified disease or
illness.
(viii) Hospital or fixed indemnity
insurance.
(ix) Short-term limited duration insurance.
(x) Credit-only, dental-only, or vision-
only insurance.
(xi) A health insurance policy providing
benefits only for long-term care, nursing home
care, home health care, community-based care,
or any combination thereof.
(7) Group purchaser.--The term ``group purchaser'' means
any person (as defined under paragraph (9) of section 3 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1002(9)) or entity that purchases or pays for health benefits
(such as provider or hospital benefits) on behalf of two or
more participants or beneficiaries in connection with an
employee health benefit plan. A health plan purchasing
cooperative established under section 131 shall not be
considered to be a group purchaser.
(8) Health plan issuer.--The term ``health plan issuer''
means any entity that is licensed (prior to or after the date
of enactment of this Act) by a State to offer a group health
plan or an individual health plan.
(9) Participant.--The term ``participant'' has the meaning
given such term under section 3(7) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(7)).
(10) 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 (29 U.S.C. 1002(16)(B)).
(11) Secretary.--The term ``Secretary'', unless
specifically provided otherwise, means the Secretary of Labor.
(12) State.--The term ``State'' means each of the several
States, the District of Columbia, Puerto Rico, the United
States Virgin Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands.
TITLE I--HEALTH CARE ACCESS, PORTABILITY, AND RENEWABILITY
Subtitle A--Group Market Rules
SEC. 101. GUARANTEED AVAILABILITY OF HEALTH COVERAGE.
(a) In General.--
(1) Nondiscrimination.--Except as provided in subsection
(b), section 102 and section 103--
(A) a health plan issuer offering a group health
plan may not decline to offer whole group coverage to a
group purchaser desiring to purchase such coverage; and
(B) an employee health benefit plan or a health
plan issuer offering a group health plan may establish
eligibility, continuation of eligibility, enrollment,
or premium contribution requirements under the terms of
such plan, except that such requirements shall not be
based on health status, medical condition, claims
experience, receipt of health care, medical history,
evidence of insurability, or disability.
(2) Health promotion and disease prevention.--Nothing in
this subsection shall prevent an employee health benefit plan
or a health plan issuer from establishing premium discounts or
modifying otherwise applicable copayments or deductibles in
return for adherence to programs of health promotion and
disease prevention.
(b) Application of Capacity Limits.--
(1) In general.--Subject to paragraph (2), a health plan
issuer offering a group health plan may cease offering coverage
to group purchasers under the plan if--
(A) the health plan issuer ceases to offer coverage
to any additional group purchasers; and
(B) the health plan issuer can demonstrate to the
applicable certifying authority (as defined in section
202(d)), if required, that its financial or provider
capacity to serve previously covered participants and
beneficiaries (and additional participants and
beneficiaries who will be expected to enroll because of
their affiliation with a group purchaser or such
previously covered participants or beneficiaries) will
be impaired if the health plan issuer is required to
offer coverage to additional group purchasers.
Such health plan issuer shall be prohibited from offering
coverage after a cessation in offering coverage under this
paragraph for a 6-month period or until the health plan issuer
can demonstrate to the applicable certifying authority (as
defined in section 202(d)) that the health plan issuer has
adequate capacity, whichever is later.
(2) First-come-first-served.--A health plan issuer offering
a group health plan is only eligible to exercise the
limitations provided for in paragraph (1) if the health plan
issuer offers coverage to group purchasers under such plan on a
first-come-first-served basis or other basis established by a
State to ensure a fair opportunity to enroll in the plan and
avoid risk selection.
(c) Construction.--
(1) Marketing of group health plans.--Nothing in this
section shall be construed to prevent a State from requiring
health plan issuers offering group health plans to actively
market such plans.
(2) Involuntary offering of group health plans.--Nothing in
this section shall be construed to require a health plan issuer
to involuntarily offer group health plans in a particular
market. For the purposes of this paragraph, the term ``market''
means either the large employer market or the small employer
market (as defined under applicable State law, or if not so
defined, an employer with not more than 50 employees).
SEC. 102. GUARANTEED RENEWABILITY OF HEALTH COVERAGE.
(a) In General.--
(1) Group purchaser.--Subject to subsections (b) and (c), a
group health plan shall be renewed or continued in force by a
health plan issuer at the option of the group purchaser, except
that the requirement of this subparagraph shall not apply in
the case of--
(A) the nonpayment of premiums or contributions by
the group purchaser in accordance with the terms of the
group health plan or where the health plan issuer has
not received timely premium payments;
(B) fraud or misrepresentation of material fact on
the part of the group purchaser;
(C) the termination of the group health plan in
accordance with subsection (b); or
(D) the failure of the group purchaser to meet
contribution or participation requirements in
accordance with paragraph (3).
(2) Participant.--Subject to subsections (b) and (c),
coverage under an employee health benefit plan or group health
plan shall be renewed or continued in force, if the group
purchaser elects to continue to provide coverage under such
plan, at the option of the participant (or beneficiary where
such right exists under the terms of the plan or under
applicable law), except that the requirement of this paragraph
shall not apply in the case of--
(A) the nonpayment of premiums or contributions by
the participant or beneficiary in accordance with the
terms of the employee health benefit plan or group
health plan or where such plan has not received timely
premium payments;
(B) fraud or misrepresentation of material fact on
the part of the participant or beneficiary relating to
an application for coverage or claim for benefits;
(C) the termination of the employee health benefit
plan or group health plan;
(D) loss of eligibility for continuation coverage
as described in part 6 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1161 et seq.); or
(E) failure of a participant or beneficiary to meet
requirements for eligibility for coverage under an
employee health benefit plan or group health plan that
are not prohibited by this Act.
(3) Rules of Construction.--Nothing in this subsection, nor
in section 101(a), shall be construed to--
(A) preclude a health plan issuer from establishing
employer contribution rules or group participation
rules for group health plans as allowed under
applicable State law;
(B) preclude a plan defined in section 3(37) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1102(37)) from establishing employer
contribution rules or group participation rules; or
(C) permit individuals to decline coverage under an
employee health benefit plan if such right is not
otherwise available under such plan.
(b) Termination of Group Health Plans.--
(1) Particular type of group health plan not offered.--In
any case in which a health plan issuer decides to discontinue
offering a particular type of group health plan, a group health
plan of such type may be discontinued by the health plan issuer
only if--
(A) the health plan issuer provides notice to each
group purchaser covered under a group health plan of
this type (and participants and beneficiaries covered
under such group health plan) of such discontinuation
at least 90 days prior to the date of the
discontinuation of such plan;
(B) the health plan issuer offers to each group
purchaser covered under a group health plan of this
type, the option to purchase any other group health
plan currently being offered by the health plan issuer;
and
(C) in exercising the option to discontinue a group
health plan of this type and in offering one or more
replacement plans, the health plan issuer acts
uniformly without regard to the health status or
insurability of participants or beneficiaries covered
under the group health plan, or new participants or
beneficiaries who may become eligible for coverage
under the group health plan.
(2) Discontinuance of all group health plans.--
(A) In general.--In any case in which a health plan
issuer elects to discontinue offering all group health
plans in a State, a group health plan may be
discontinued by the health plan issuer only if--
(i) the health plan issuer provides notice
to the applicable certifying authority (as
defined in section 202(d)) and to each group
purchaser (and participants and beneficiaries
covered under such group health plan) of such
discontinuation at least 180 days prior to the
date of the expiration of such plan; and
(ii) all group health plans issued or
delivered for issuance in the State are
discontinued and coverage under such plans is
not renewed.
(B) Application of provisions.--The provisions of
this paragraph and paragraph (3) may be applied
separately by a health plan issuer--
(i) to all group health plans offered to
small employers (as defined under applicable
State law, or if not so defined, an employer
with not more than 50 employees); or
(ii) to all other group health plans
offered by the health plan issuer in the State.
(3) Prohibition on market reentry.--In the case of a
discontinuation under paragraph (2), the health plan issuer may
not provide for the issuance of any group health plan in the
market sector (as described in paragraph (2)(B)) in which
issuance of such group health plan was discontinued in the
State involved during the 5-year period beginning on the date
of the discontinuation of the last group health plan not so
renewed.
(c) Treatment of Network Plans.--
(1) Geographic limitations.--A network plan (as defined in
paragraph (2)) may deny continued participation under such plan
to participants or beneficiaries who neither live, reside, nor
work in an area in which such network plan is offered, but only
if such denial is applied uniformly, without regard to health
status or the insurability of particular participants or
beneficiaries.
(2) Network plan.--As used in paragraph (1), the term
``network plan'' means an employee health benefit plan or a
group health plan that arranges for the financing and delivery
of health care services to participants or beneficiaries
covered under such plan, in whole or in part, through
arrangements with providers.
(d) COBRA Coverage.--Nothing in subsection (a)(2)(E) or subsection
(c) shall be construed to affect any right to COBRA continuation
coverage as described in part 6 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1161 et
seq.).
SEC. 103. PORTABILITY OF HEALTH COVERAGE AND LIMITATION ON PREEXISTING
CONDITION EXCLUSIONS.
(a) In General.--An employee health benefit plan or a health plan
issuer offering a group health plan may impose a limitation or
exclusion of benefits relating to treatment of a preexisting condition
based on the fact that the condition existed prior to the coverage of
the participant or beneficiary under the plan only if--
(1) the limitation or exclusion extends for a period of not
more than 12 months after the date of enrollment in the plan;
(2) the limitation or exclusion does not apply to an
individual who, within 30 days of the date of birth or
placement for adoption (as determined under section
609(c)(3)(B) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1169(c)(3)(B)), was covered under the plan; and
(3) the limitation or exclusion does not apply to a
pregnancy.
(b) Crediting of Previous Qualifying Coverage.--
(1) In general.--Subject to paragraph (4), an employee
health benefit plan or a health plan issuer offering a group
health plan shall provide that if a participant or beneficiary
is in a period of previous qualifying coverage as of the date
of enrollment under such plan, any period of exclusion or
limitation of coverage with respect to a preexisting condition
shall be reduced by 1 month for each month in which the
participant or beneficiary was in the period of previous
qualifying coverage. With respect to an individual described in
subsection (a)(2) who maintains continuous coverage, no
limitation or exclusion of benefits relating to treatment of a
preexisting condition may be applied to a child within the
child's first 12 months of life or within 12 months after the
placement of a child for adoption.
(2) Discharge of duty.--An employee health benefit plan
shall provide documentation of coverage to participants and
beneficiaries whose coverage is terminated under the plan.
Pursuant to regulations promulgated by the Secretary, the duty
of an employee health benefit plan to verify previous
qualifying coverage with respect to a participant or
beneficiary is effectively discharged when such employee health
benefit plan provides documentation to a participant or
beneficiary that includes the following information:
(A) the dates that the participant or beneficiary
was covered under the plan; and
(B) the benefits and cost-sharing arrangement
available to the participant or beneficiary under such
plan.
An employee health benefit plan shall retain the documentation
provided to a participant or beneficiary under subparagraphs
(A) and (B) for at least the 12-month period following the date
on which the participant or beneficiary ceases to be covered
under the plan. Upon request, an employee health benefit plan
shall provide a second copy of such documentation to such
participant or beneficiary within the 12-month period following
the date of such ineligibility.
(3) Definitions.--As used in this section:
(A) Previous qualifying coverage.--The term
``previous qualifying coverage'' means the period
beginning on the date--
(i) a participant or beneficiary is
enrolled under an employee health benefit plan
or a group health plan, and ending on the date
the participant or beneficiary is not so
enrolled; or
(ii) an individual is enrolled under an
individual health plan (as defined in section
113) or under a public or private health plan
established under Federal or State law, and
ending on the date the individual is not so
enrolled;
for a continuous period of more than 30 days (without
regard to any waiting period).
(B) Limitation or exclusion of benefits relating to
treatment of a preexisting condition.--The term
``limitation or exclusion of benefits relating to
treatment of a preexisting condition'' means a
limitation or exclusion of benefits imposed on an
individual based on a preexisting condition of such
individual.
(4) Effect of previous coverage.--An employee health
benefit plan or a health plan issuer offering a group health
plan may impose a limitation or exclusion of benefits relating
to the treatment of a preexisting condition, subject to the
limits in subsection (a)(1), only to the extent that such
service or benefit was not previously covered under the group
health plan, employee health benefit plan, or individual health
plan in which the participant or beneficiary was enrolled
immediately prior to enrollment in the plan involved.
(c) Late Enrollees.--Except as provided in section 104, with
respect to a participant or beneficiary enrolling in an employee health
benefit plan or a group health plan during a time that is other than
the first opportunity to enroll during an enrollment period of at least
30 days, coverage with respect to benefits or services relating to the
treatment of a preexisting condition in accordance with subsections (a)
and (b) may be excluded, except the period of such exclusion may not
exceed 18 months beginning on the date of coverage under the plan.
(d) Affiliation Periods.--With respect to a participant or
beneficiary who would otherwise be eligible to receive benefits under
an employee health benefit plan or a group health plan but for the
operation of a preexisting condition limitation or exclusion, if such
plan does not utilize a limitation or exclusion of benefits relating to
the treatment of a preexisting condition, such plan may impose an
affiliation period on such participant or beneficiary not to exceed 60
days (or in the case of a late participant or beneficiary described in
subsection (c), 90 days) from the date on which the participant or
beneficiary would otherwise be eligible to receive benefits under the
plan. An employee health benefit plan or a health plan issuer offering
a group health plan may also use alternative methods to address adverse
selection as approved by the applicable certifying authority (as
defined in section 202(d)). During such an affiliation period, the plan
may not be required to provide health care services or benefits and no
premium shall be charged to the participant or beneficiary.
(e) Preexisting Condition.--For purposes of this section, the term
``preexisting condition'' means a condition, 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 day
before the effective date of the coverage (without regard to any
waiting period).
(f) State Flexibility.--Nothing in this section shall be construed
to preempt State laws that --
(1) require health plan issuers to impose a limitation or
exclusion of benefits relating to the treatment of a
preexisting condition for periods that are shorter than those
provided for under this section; or
(2) allow individuals, participants, and beneficiaries to
be considered to be in a period of previous qualifying coverage
if such individual, participant, or beneficiary experiences a
lapse in coverage that is greater than the 30-day period
provided for under subsection (b)(3);
unless such laws are preempted by section 514 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1144).
SEC. 104. SPECIAL ENROLLMENT PERIODS.
In the case of a participant, beneficiary or family member who--
(1) through marriage, separation, divorce, death, birth or
placement of a child for adoption, experiences a change in
family composition affecting eligibility under a group health
plan, individual health plan, or employee health benefit plan;
(2) experiences a change in employment status, as described
in section 603(2) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1163(2)), that causes the loss of
eligibility for coverage, other than COBRA continuation
coverage under a group health plan, individual health plan, or
employee health benefit plan; or
(3) experiences a loss of eligibility under a group health
plan, individual health plan, or employee health benefit plan
because of a change in the employment status of a family
member;
each employee health benefit plan and each group health plan shall
provide for a special enrollment period extending for a reasonable time
after such event that would permit the participant to change the
individual or family basis of coverage or to enroll in the plan if
coverage would have been available to such individual, participant, or
beneficiary but for failure to enroll during a previous enrollment
period. Such a special enrollment period shall ensure that a child born
or placed for adoption shall be deemed to be covered under the plan as
of the date of such birth or placement for adoption if such child is
enrolled within 30 days of the date of such birth or placement for
adoption.
SEC. 105. DISCLOSURE OF INFORMATION.
(a) Disclosure of Information by Health Plan Issuers.--
(1) In general.--In connection with the offering of any
group health plan to a small employer (as defined under
applicable State law, or if not so defined, an employer with
not more than 50 employees), a health plan issuer shall make a
reasonable disclosure to such employer, as part of its
solicitation and sales materials, of--
(A) the provisions of such group health plan
concerning the health plan issuer's right to change
premium rates and the factors that may affect changes
in premium rates;
(B) the provisions of such group health plan
relating to renewability of coverage;
(C) the provisions of such group health plan
relating to any preexisting condition provision; and
(D) descriptive information about the benefits and
premiums available under all group health plans for
which the employer is qualified.
Information shall be provided to small employers under this
paragraph in a manner determined to be understandable by the
average small employer, and shall be sufficiently accurate and
comprehensive to reasonably inform small employers,
participants and beneficiaries of their rights and obligations
under the group health plan.
(2) Exception.--With respect to the requirement of
paragraph (1), any information that is proprietary and trade
secret information under applicable law shall not be subject to
the disclosure requirements of such paragraph.
(3) Construction.--Nothing in this subsection shall be
construed to preempt State reporting and disclosure
requirements to the extent that such requirements are not
preempted under section 514 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1144).
(b) Disclosure of Information to Participants and Beneficiaries.--
(1) In general.--Section 104(b)(1) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1024(b)(1))
is amended in the matter following subparagraph (B)--
(A) by striking ``102(a)(1),'' and inserting
``102(a)(1) that is not a material reduction in covered
services or benefits provided,''; and
(B) by adding at the end thereof 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, a
summary description of such modification or change
shall be furnished to participants 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 Reform Act of 1995, providing
alternative mechanisms to delivery by mail through
which employee health benefit plans may notify
participants of material reductions in covered services
or benefits.''.
(2) Plan description and summary.--Section 102(b) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1022(b)) is amended--
(A) by inserting ``including the office or title of
the individual who is responsible for approving or
denying claims for coverage of benefits'' after ``type
of administration of the plan'';
(B) by inserting ``including the name of the
organization responsible for financing claims'' after
``source of financing of the plan''; and
(C) by inserting ``including the office, contact,
or title of the individual at the Department of Labor
through which participants may seek assistance or
information regarding their rights under this Act and
the Health Insurance Reform Act of 1995 with respect to
health benefits that are not offered through a group
health plan.'' after ``benefits under the plan''.
Subtitle B--Individual Market Rules
SEC. 110. INDIVIDUAL HEALTH PLAN PORTABILITY.
(a) Limitation on Requirements.--
(1) In general.--With respect to an individual desiring to
enroll in an individual health plan, if such individual is in a
period of previous qualifying coverage (as defined in section
103(b)(3)(A)(i)) under one or more group health plans or
employee health benefit plans that commenced 18 or more months
prior to the date on which such individual desires to enroll in
the individual plan, a health plan issuer described in
paragraph (3) may not decline to offer coverage to such
individual, or deny enrollment to such individual based on the
health status, medical condition, claims experience, receipt of
health care, medical history, evidence of insurability, or
disability of the individual, except as described in
subsections (b) and (c).
(2) Health promotion and disease prevention.--Nothing in
this subsection shall be construed to prevent a health plan
issuer offering an individual health plan from establishing
premium discounts or modifying otherwise applicable copayments
or deductibles in return for adherence to programs of health
promotion or disease prevention.
(3) Health plan issuer.--A health plan issuer described in
this paragraph is a health plan issuer that issues or renews
individual health plans.
(4) Premiums.--Nothing in this subsection shall be
construed to affect the determination of a health plan issuer
as to the amount of the premium payable under an individual
health plan under applicable State law.
(b) Eligibility for Other Group Coverage.--The provisions of
subsection (a) shall not apply to an individual who is eligible for
coverage under a group health plan or an employee health benefit plan,
or who has had coverage terminated under a group health plan or
employee health benefit plan for failure to make required premium
payments or contributions, or for fraud or misrepresentation of
material fact, or who is otherwise eligible for continuation coverage
as described in part 6 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1161 et seq.) or
under an equivalent State program.
(c) Application of Capacity Limits.--
(1) In general.--Subject to paragraph (2), a health plan
issuer offering coverage to individuals under an individual
health plan may cease enrolling individuals under the plan if--
(A) the health plan issuer ceases to enroll any new
individuals; and
(B) the health plan issuer can demonstrate to the
applicable certifying authority (as defined in section
202(d)), if required, that its financial or provider
capacity to serve previously covered individuals will
be impaired if the health plan issuer is required to
enroll additional individuals.
Such a health plan issuer shall be prohibited from offering
coverage after a cessation in offering coverage under this
paragraph for a 6-month period or until the health plan issuer
can demonstrate to the applicable certifying authority (as
defined in section 202(d)) that the health plan issuer has
adequate capacity, whichever is later.
(2) First-come-first-served.--A health plan issuer offering
coverage to individuals under an individual health plan is only
eligible to exercise the limitations provided for in paragraph
(1) if the health plan issuer provides for enrollment of
individuals under such plan on a first-come-first-served basis
or other basis established by a State to ensure a fair opportunity to
enroll in the plan and avoid risk selection.
(d) Market Requirements.--
(1) In general.--The provisions of subsection (a) shall not
be construed to require that a health plan issuer offering
group health plans to group purchasers offer individual health
plans to individuals.
(2) Conversion policies.--A health plan issuer offering
group health plans to group purchasers under this Act shall not
be deemed to be a health plan issuer offering an individual
health plan solely because such health plan issuer offers a
conversion policy.
(3) Marketing of plans.--Nothing in this section shall be
construed to prevent a State from requiring health plan issuers
offering coverage to individuals under an individual health
plan to actively market such plan.
SEC. 111. GUARANTEED RENEWABILITY OF INDIVIDUAL HEALTH COVERAGE.
(a) In General.--Subject to subsections (b) and (c), coverage for
individuals under an individual health plan shall be renewed or
continued in force by a health plan issuer at the option of the
individual, except that the requirement of this subsection shall not
apply in the case of--
(1) the nonpayment of premiums or contributions by the
individual in accordance with the terms of the individual
health plan or where the health plan issuer has not received
timely premium payments;
(2) fraud or misrepresentation of material fact on the part
of the individual; or
(3) the termination of the individual health plan in
accordance with subsection (b).
(b) Termination of Individual Health Plans.--
(1) Particular type of individual health plan not
offered.--In any case in which a health plan issuer decides to
discontinue offering a particular type of individual health
plan to individuals, an individual health plan may be
discontinued by the health plan issuer only if--
(A) the health plan issuer provides notice to each
individual covered under the plan of such
discontinuation at least 90 days prior to the date of
the expiration of the plan;
(B) the health plan issuer offers to each
individual covered under the plan the option to
purchase any other individual health plan currently
being offered by the health plan issuer to individuals;
and
(C) in exercising the option to discontinue the
individual health plan and in offering one or more
replacement plans, the health plan issuer acts
uniformly without regard to the health status or
insurability of particular individuals.
(2) Discontinuance of all individual health plans.--In any
case in which a health plan issuer elects to discontinue all
individual health plans in a State, an individual health plan
may be discontinued by the health plan issuer only if--
(A) the health plan issuer provides notice to the
applicable certifying authority (as defined in section
202(d)) and to each individual covered under the plan
of such discontinuation at least 180 days prior to the
date of the discontinuation of the plan; and
(B) all individual health plans issued or delivered
for issuance in the State are discontinued and coverage
under such plans is not renewed.
(3) Prohibition on market reentry.--In the case of a
discontinuation under paragraph (2), the health plan issuer may
not provide for the issuance of any individual health plan in
the State involved during the 5-year period beginning on the
date of the discontinuation of the last plan not so renewed.
(c) Treatment of Network Plans.--
(1) Geographic limitations.--A health plan issuer which
offers a network plan (as defined in paragraph (2)) may deny
continued participation under the plan to individuals who
neither live, reside, nor work in an area in which the
individual health plan is offered, but only if such denial is
applied uniformly, without regard to health status or the
insurability of particular individuals.
(2) Network plan.--As used in paragraph (1), the term
``network plan'' means an individual health plan that arranges
for the financing and delivery of health care services to
individuals covered under such health plan, in whole or in
part, through arrangements with providers.
SEC. 112. STATE FLEXIBILITY IN INDIVIDUAL MARKET REFORMS.
(a) In General.--With respect to any State law with respect to
which the Governor of the State notifies the Secretary of Health and
Human Services that such State law will achieve the goals of sections
110 and 111, and that is in effect on, or enacted after, the date of
enactment of this Act (such as laws providing for guaranteed issue,
open enrollment by one or more health plan issuers, high-risk pools, or
mandatory conversion policies), such State law shall apply in lieu of
the standards described in sections 110 and 111 unless the Secretary of
Health and Human Services determines, after considering the criteria
described in subsection (b)(1), in consultation with the Governor and
Insurance Commissioner or chief insurance regulatory official of the
State, that such State law does not achieve the goals of providing
access to affordable health care coverage for those individuals
described in sections 110 and 111.
(b) Determination.--
(1) In general.--In making a determination under subsection
(a), the Secretary of Health and Human Services shall only--
(A) evaluate whether the State law or program
provides guaranteed access to affordable coverage to
individuals described in sections 110 and 111;
(B) evaluate whether the State law or program
provides coverage for preexisting conditions (as
defined in section 103(e)) that were covered under the
individuals' previous group health plan or employee
health benefit plan for individuals described in
sections 110 and 111;
(C) evaluate whether the State law or program
provides individuals described in sections 110 and 111
with a choice of health plans or a health plan
providing comprehensive coverage; and
(D) evaluate whether the application of the
standards described in sections 110 and 111 will have
an adverse impact on the number of individuals in such
State having access to affordable coverage.
(2) Notice of intent.--If, within 6 months after the date
of enactment of this Act, the Governor of a State notifies the
Secretary of Health and Human Services that the State intends
to enact a law, or modify an existing law, described in
subsection (a), the Secretary of Health and Human Services may
not make a determination under such subsection until the
expiration of the 12-month period beginning on the date on
which such notification is made, or until January 1, 1997,
whichever is later. With respect to a State that provides
notice under this paragraph and that has a legislature that
does not meet within the 12-month period beginning on the date
of enactment of this Act, the Secretary shall not make a
determination under subsection (a) prior to January 1, 1998.
(3) Notice to state.--If the Secretary of Health and Human
Services determines that a State law or program does not
achieve the goals described in subsection (a), the Secretary of
Health and Human Services shall provide the State with adequate
notice and reasonable opportunity to modify such law or program
to achieve such goals prior to making a final determination
under subsection (a).
(c) Adoption of NAIC Model.--If, not later than 9 months after the
date of enactment of this Act--
(1) the National Association of Insurance Commissioners
(hereafter referred to as the ``NAIC''), through a process
which the Secretary of Health and Human Services determines has
included consultation with representatives of the insurance
industry and consumer groups, adopts a model standard or
standards for reform of the individual health insurance market;
and
(2) the Secretary of Health and Human Services determines,
within 30 days of the adoption of such NAIC standard or
standards, that such standards comply with the goals of
sections 110 and 111;
a State that elects to adopt such model standards or substantially
adopt such model standards shall be deemed to have met the requirements
of sections 110 and 111 and shall not be subject to a determination
under subsection (a).
SEC. 113. DEFINITION.
(a) In General.--As used in this title, the term ``individual
health plan'' means any contract, policy, certificate or other
arrangement offered to individuals by a health plan issuer that
provides or pays for health benefits (such as provider and hospital
benefits) and that is not a group health plan under section 2(6).
(b) Arrangements Not Included.--Such term does not include the
following, or any combination thereof:
(1) Coverage only for accident, or disability income
insurance, or any combination thereof.
(2) Medicare supplemental health insurance (as defined
under section 1882(g)(1) of the Social Security Act).
(3) Coverage issued as a supplement to liability insurance.
(4) Liability insurance, including general liability
insurance and automobile liability insurance.
(5) Workers' compensation or similar insurance.
(6) Automobile medical payment insurance.
(7) Coverage for a specified disease or illness.
(8) Hospital or fixed indemnity insurance.
(9) Short-term limited duration insurance.
(10) Credit-only, dental-only, or vision-only insurance.
(11) A health insurance policy providing benefits only for
long-term care, nursing home care, home health care, community-
based care, or any combination thereof.
Subtitle C--COBRA Clarifications
SEC. 121. COBRA CLARIFICATIONS.
(a) Public Health Service Act.--
(1) Period of coverage.--Section 2202(2) of the Public
Health Service Act (42 U.S.C. 300bb-2(2)) is amended--
(A) in subparagraph (A)--
(i) by transferring the sentence
immediately preceding clause (iv) so as to
appear immediately following such clause (iv);
and
(ii) in the last sentence (as so
transferred)--
(I) by inserting ``, or a
beneficiary-family member of the
individual,'' after ``an individual'';
and
(II) by striking ``at the time of a
qualifying event described in section
2203(2)'' and inserting ``at any time
during the initial 18-month period of
continuing coverage under this title'';
(B) in subparagraph (D)(i), by inserting before ``,
or'' the following: ``, except that the exclusion or
limitation contained in this clause shall not be
considered to apply to a plan under which a preexisting
condition or exclusion does not apply to an individual
otherwise eligible for continuation coverage under this
section because of the provision of the Health
Insurance Reform Act of 1995''; and
(C) in subparagraph (E), by striking ``at the time
of a qualifying event described in section 2203(2)''
and inserting ``at any time during the initial 18-month
period of continuing coverage under this title''.
(2) Election.--Section 2205(1)(C) of the Public Health
Service Act (42 U.S.C. 300bb-5(1)(C)) is amended--
(A) in clause (i), by striking ``or'' at the end
thereof;
(B) in clause (ii), by striking the period and
inserting ``, or''; and
(C) by adding at the end thereof the following new
clause:
``(iii) in the case of an individual
described in the last sentence of section
2202(2)(A), or a beneficiary-family member of
the individual, the date such individual is
determined to have been disabled.''.
(3) Notices.--Section 2206(3) of the Public Health Service
Act (42 U.S.C. 300bb-6(3)) is amended by striking ``at the time
of a qualifying event described in section 2203(2)'' and
inserting ``at any time during the initial 18-month period of
continuing coverage under this title''.
(4) Birth or adoption of a child.--Section 2208(3)(A) of
the Public Health Service Act (42 U.S.C. 300bb-8(3)(A)) is
amended by adding at the end thereof the following new flush
sentence:
``Such term shall also include a child who is born to or placed
for adoption with the covered employee during the period of
continued coverage under this title.''.
(b) Employee Retirement Income Security Act of 1974.--
(1) Period of coverage.--Section 602(2) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1162(2)) is
amended--
(A) in the last sentence of subparagraph (A)--
(i) by inserting ``, or a beneficiary-
family member of the individual,'' after ``an
individual''; and
(ii) by striking ``at the time of a
qualifying event described in section 603(2)''
and inserting ``at any time during the initial
18-month period of continuing coverage under
this part'';
(B) in subparagraph (D)(i), by inserting before ``,
or'' the following: ``, except that the exclusion or
limitation contained in this clause shall not be
considered to apply to a plan under which a preexisting
condition or exclusion does not apply to an individual
otherwise eligible for continuation coverage under this
section because of the provision of the Health
Insurance Reform Act of 1995''; and
(C) in subparagraph (E), by striking ``at the time
of a qualifying event described in section 603(2)'' and
inserting ``at any time during the initial 18-month
period of continuing coverage under this part''.
(2) Election.--Section 605(1)(C) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1165(1)(C)) is amended--
(A) in clause (i), by striking ``or'' at the end
thereof;
(B) in clause (ii), by striking the period and
inserting ``, or''; and
(C) by adding at the end thereof the following new
clause:
``(iii) in the case of an individual
described in the last sentence of section
602(2)(A), or a beneficiary-family member of
the individual, the date such individual is
determined to have been disabled.''.
(3) Notices.--Section 606(3) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1166(3)) is amended by
striking ``at the time of a qualifying event described in
section 603(2)'' and inserting ``at any time during the initial
18-month period of continuing coverage under this part''.
(4) Birth or adoption of a child.--Section 607(3)(A) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1167(3)) is amended by adding at the end thereof the following
new flush sentence:
``Such term shall also include a child who is born to or placed
for adoption with the covered employee during the period of
continued coverage under this part.''.
(c) Internal Revenue Code of 1986.--
(1) Period of coverage.--Section 4980B(f)(2)(B) of the
Internal Revenue Code of 1986 is amended--
(A) in the last sentence of clause (i) by striking
``at the time of a qualifying event described in
paragraph (3)(B)'' and inserting ``at any time during
the initial 18-month period of continuing coverage
under this section'';
(B) in clause (iv)(I), by inserting before ``, or''
the following: ``, except that the exclusion or
limitation contained in this subclause shall not be
considered to apply to a plan under which a preexisting
condition or exclusion does not apply to an individual
otherwise eligible for continuation coverage under this
subsection because of the provision of the Health
Insurance Reform Act of 1995''; and
(C) in clause (v), by striking ``at the time of a
qualifying event described in paragraph (3)(B)'' and
inserting ``at any time during the initial 18-month
period of continuing coverage under this section''.
(2) Election.--Section 4980B(f)(5)(A)(iii) of the Internal
Revenue Code of 1986 is amended--
(A) in subclause (I), by striking ``or'' at the end
thereof;
(B) in subclause (II), by striking the period and
inserting ``, or''; and
(C) by adding at the end thereof the following new
subclause:
``(III) in the case of an qualified
beneficiary described in the last
sentence of paragraph (2)(B)(i), the
date such individual is determined to
have been disabled.''.
(3) Notices.--Section 4980B(f)(6)(C) of the Internal
Revenue Code of 1986 is amended by striking ``at the time of a
qualifying event described in paragraph (3)(B)'' and inserting
``at any time during the initial 18-month period of continuing
coverage under this section''.
(4) Birth or adoption of a child.--Section 4980B(g)(1)(A)
of the Internal Revenue Code of 1986 is amended by adding at
the end thereof the following new flush sentence:
``Such term shall also include a child who is
born to or placed for adoption with the covered
employee during the period of continued
coverage under this section.''.
(d) Effective Date.--The amendments made by this section shall
apply to qualifying events occurring on or after the date of the
enactment of this Act for plan years beginning after December 31, 1996.
(e) Notification of Changes.--Not later than 60 days prior to the
date on which this section becomes effective, each group health plan
(covered under title XXII of the Public Health Service Act, part 6 of
subtitle B of title I of the Employee Retirement Income Security Act of
1974, and section 4980B(f) of the Internal Revenue Code of 1986) shall
notify each qualified beneficiary who has elected continuation coverage
under such title, part or section of the amendments made by this
section.
Subtitle D--Private Health Plan Purchasing Cooperatives
SEC. 131. PRIVATE HEALTH PLAN PURCHASING COOPERATIVES.
(a) Definition.--As used in this Act, the term ``health plan
purchasing cooperative'' means a group of individuals or employers
that, on a voluntary basis and in accordance with this section, form a
cooperative for the purpose of purchasing individual health plans or
group health plans offered by health plan issuers. A health plan
issuer, agent, broker or any other individual or entity engaged in the
sale of insurance may not underwrite a cooperative.
(b) Certification.--
(1) In general.--If a group described in subsection (a)
desires to form a health plan purchasing cooperative in
accordance with this section and such group appropriately
notifies the State and the Secretary of such desire, the State,
upon a determination that such group meets the requirements of
this section, shall certify the group as a health plan
purchasing cooperative. The State shall make a determination of
whether such group meets the requirements of this section in a
timely fashion. Each such cooperative shall also be registered
with the Secretary.
(2) State refusal to certify.--If a State fails to
implement a program for certifying health plan purchasing
cooperatives in accordance with the standards under this Act,
the Secretary shall certify and oversee the operations of such
cooperatives in such State.
(3) Interstate cooperatives.--For purposes of this section,
a health plan purchasing cooperative operating in more than one
State shall be certified by the State in which the cooperative
is domiciled. States may enter into cooperative agreements for
the purpose of certifying and overseeing the operation of such
cooperatives. For purposes of this subsection, a cooperative
shall be considered to be domiciled in the State in which most
of the members of the cooperative reside.
(c) Board of Directors.--
(1) In general.--Each health plan purchasing cooperative
shall be governed by a Board of Directors that shall be
responsible for ensuring the performance of the duties of the
cooperative under this section. The Board shall be composed of
a broad cross-section of representatives of employers,
employees, and individuals participating in the cooperative. A
health plan issuer, agent, broker or any other individual or
entity engaged in the sale of individual health plans or group
health plans may not hold or control any right to vote with
respect to a cooperative.
(2) Limitation on compensation.--A health plan purchasing
cooperative may not provide compensation to members of the
Board of Directors. The cooperative may provide reimbursements
to such members for the reasonable and necessary expenses
incurred by the members in the performance of their duties as
members of the Board.
(3) Conflict of interest.--No member of the Board of
Directors (or family members of such members) nor any
management personnel of the cooperative may be employed by, be
a consultant for, be a member of the board of directors of, be
affiliated with an agent of, or otherwise be a representative
of any health plan issuer, health care provider, or agent or
broker. Nothing in the preceding sentence shall limit a member
of the Board from purchasing coverage offered through the
cooperative.
(d) Membership and Marketing Area.--
(1) Membership.--A health plan purchasing cooperative may
establish limits on the maximum size of employers who may
become members of the cooperative, and may determine whether to
permit individuals to become members. Upon the establishment of
such membership requirements, the cooperative shall, except as
provided in subparagraph (B), accept all employers (or
individuals) residing within the area served by the cooperative
who meet such requirements as members on a first-come, first-
served basis, or on another basis established by the State to
ensure equitable access to the cooperative.
(2) Marketing area.--A State may establish rules regarding
the geographic area that must be served by a health plan
purchasing cooperative. With respect to a State that has not
established such rules, a health plan purchasing cooperative
operating in the State shall define the boundaries of the area
to be served by the cooperative, except that such boundaries
may not be established on the basis of health status or
insurability of the populations that reside in the area.
(e) Duties and Responsibilities.--
(1) In general.--A health plan purchasing cooperative
shall--
(A) enter into agreements with multiple,
unaffiliated health plan issuers, except that the
requirement of this subparagraph shall not apply in
regions (such as remote or frontier areas) in which
compliance with such requirement is not possible;
(B) enter into agreements with employers and
individuals who become members of the cooperative;
(C) participate in any program of risk-adjustment
or reinsurance, or any similar program, that is
established by the State;
(D) prepare and disseminate comparative health plan
materials (including information about cost, quality,
benefits, and other information concerning group health
plans and individual health plans offered through the
cooperative);
(E) actively market to all eligible employers and
individuals residing within the service area; and
(F) act as an ombudsman for group health plan or
individual health plan enrollees.
(2) Permissible activities.--A health plan purchasing
cooperative may perform such other functions as necessary to
further the purposes of this Act, including--
(A) collecting and distributing premiums and
performing other administrative functions;
(B) collecting and analyzing surveys of enrollee
satisfaction;
(C) charging membership fee to enrollees (such fees
may not be based on health status) and charging
participation fees to health plan issuers;
(D) cooperating with (or accepting as members)
employers who provide health benefits directly to
participants and beneficiaries only for the purpose of
negotiating with providers; and
(E) negotiating with health care providers and
health plan issuers.
(f) Limitations on Cooperative Activities.--A health plan
purchasing cooperative shall not--
(1) perform any activity relating to the licensing of
health plan issuers;
(2) assume financial risk directly or indirectly on behalf
of members of a health plan purchasing cooperative relating to
any group health plan or individual health plan;
(3) establish eligibility, continuation of eligibility,
enrollment, or premium contribution requirements for
participants, beneficiaries, or individuals based on health
status, medical condition, claims experience, receipt of health
care, medical history, evidence of insurability, or disability;
(4) operate on a for-profit or other basis where the legal
structure of the cooperative permits profits to be made and not
returned to the members of the cooperative, except that a for-
profit health plan purchasing cooperative may be formed by a
nonprofit organization--
(A) in which membership in such organization is not
based on health status, medical condition, claims
experience, receipt of health care, medical history,
evidence of insurability, or disability; and
(B) that accepts as members all employers or
individuals on a first-come, first-served basis,
subject to any established limit on the maximum size of
and employer that may become a member; or
(5) perform any other activities that conflict or are
inconsistent with the performance of its duties under this Act.
(g) Limited Preemption of Certain State Laws.--
(1) In general.--With respect to a health plan purchasing
cooperative that meets the requirements of this section, State
fictitious group laws shall be preempted.
(2) Health plan issuers.--
(A) Rating.--With respect to a health plan issuer
offering a group health plan or individual health plan
through a health plan purchasing cooperative that meets
the requirements of this section, State premium rating
requirement laws, except to the extent provided under
subparagraph (B), shall be preempted unless such laws
permit premium rates negotiated by the cooperative to
be less than rates that would otherwise be permitted
under State law, if such rating differential is not
based on differences in health status or demographic
factors.
(B) Exception.--State laws referred to in
subparagraph (A) shall not be preempted if such laws--
(i) prohibit the variance of premium rates
among employers, plan sponsors, or individuals
that are members of a health plan purchasing
cooperative in excess of the amount of such
variations that would be permitted under such
State rating laws among employers, plan
sponsors, and individuals that are not members
of the cooperative; and
(ii) prohibit a percentage increase in
premium rates for a new rating period that is
in excess of that which would be permitted
under State rating laws.
(C) Benefits.--Except as provided in subparagraph
(D), a health plan issuer offering a group health plan
or individual health plan through a health plan
purchasing cooperative shall comply with all State
mandated benefit laws that require the offering of any
services, category or care, or services of any class or
type of provider.
(D) Exception.--In those States that have enacted
laws authorizing the issuance of alternative benefit
plans to small employers, health plan issuers may offer
such alternative benefit plans through a health plan
purchasing cooperative that meets the requirements of
this section.
(h) Rules of Construction.--Nothing in this section shall be
construed to--
(1) require that a State organize, operate, or otherwise
create health plan purchasing cooperatives;
(2) otherwise require the establishment of health plan
purchasing cooperatives;
(3) require individuals, plan sponsors, or employers to
purchase group health plans or individual health plans through
a health plan purchasing cooperative;
(4) require that a health plan purchasing cooperative be
the only type of purchasing arrangement permitted to operate in
a State;
(5) confer authority upon a State that the State would not
otherwise have to regulate health plan issuers or employee
health benefits plans; or
(6) confer authority upon a State (or the Federal
Government) that the State (or Federal Government) would not
otherwise have to regulate group purchasing arrangements,
coalitions, or other similar entities that do not desire to
become a health plan purchasing cooperative in accordance with
this section.
(i) Application of ERISA.--For purposes of enforcement only, the
requirements of parts 4 and 5 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1101) shall apply to
a health plan purchasing cooperative as if such plan were an employee
welfare benefit plan.
TITLE II--APPLICATION AND ENFORCEMENT OF STANDARDS
SEC. 201. APPLICABILITY.
(a) Construction.--
(1) Enforcement.--
(A) In general.--A requirement or standard imposed
under this Act on a group health plan or individual
health plan offered by a health plan issuer shall be
deemed to be a requirement or standard imposed on the
health plan issuer. Such requirements or standards
shall be enforced by the State insurance commissioner
for the State involved or the official or officials
designated by the State to enforce the requirements of
this Act. In the case of a group health plan offered by
a health plan issuer in connection with an employee
health benefit plan, the requirements or standards
imposed under this Act shall be enforced with respect
to the health plan issuer by the State insurance
commissioner for the State involved or the official or
officials designated by the State to enforce the
requirements of this Act.
(B) Limitation.--Except as provided in subsection
(c), the Secretary shall not enforce the requirements
or standards of this Act as they relate to health plan
issuers, group health plans, or individual health
plans. In no case shall a State enforce the
requirements or standards of this Act as they relate to
employee health benefit plans.
(2) Preemption of state law.--Nothing in this Act shall be
construed to prevent a State from establishing, implementing,
or continuing in effect standards and requirements--
(A) not prescribed in this Act; or
(B) related to the issuance, renewal, or
portability of health insurance or the establishment or
operation of group purchasing arrangements, that are
consistent with, and are not in direct conflict with,
this Act and provide greater protection or benefit to
participants, beneficiaries or individuals.
(b) Rule of Construction.--Nothing in this Act 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).
(c) Continuation.--Nothing in this Act shall be construed as
requiring a group health plan or an employee health benefit plan to
provide benefits to a particular participant or beneficiary in excess
of those provided under the terms of such plan.
SEC. 202. ENFORCEMENT OF STANDARDS.
(a) Health Plan Issuers.--Each State shall require that each group
health plan and individual health plan issued, sold, renewed, offered
for sale or operated in such State by a health plan issuer meet the
standards established under this Act pursuant to an enforcement plan
filed by the State with the Secretary. A State shall submit such
information as required by the Secretary demonstrating effective
implementation of the State enforcement plan.
(b) Employee Health Benefit Plans.--With respect to employee health
benefit plans, the Secretary shall enforce the reform standards
established under this Act in the same manner as provided for under
sections 502, 504, 506, and 510 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1132, 1134, 1136, and 1140). The civil
penalties contained in paragraphs (1) and (2) of section 502(c) of such
Act (29 U.S.C. 1132(c)(1) and (2)) shall apply to any information
required by the Secretary to be disclosed and reported under this
section.
(c) Failure To Implement Plan.--In the case of the failure of a
State to substantially enforce the standards and requirements set forth
in this Act with respect to group health plans and individual health
plans as provided for under the State enforcement plan filed under
subsection (a), the Secretary, in consultation with the Secretary of
Health and Human Services, shall implement an enforcement plan meeting
the standards of this Act in such State. In the case of a State that
fails to substantially enforce the standards and requirements set forth
in this Act, each health plan issuer operating in such State shall be
subject to civil enforcement as provided for under sections 502, 504,
506, and 510 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1132, 1134, 1136, and 1140). The civil penalties contained in
paragraphs (1) and (2) of section 502(c) of such Act (29 U.S.C.
1132(c)(1) and (2)) shall apply to any information required by the
Secretary to be disclosed and reported under this section.
(d) Applicable Certifying Authority.--As used in this title, the
term ``applicable certifying authority'' means, with respect to--
(1) health plan issuers, the State insurance commissioner
or official or officials designated by the State to enforce the
requirements of this Act for the State involved; and
(2) an employee health benefit plan, the Secretary.
(e) Regulations.--The Secretary may promulgate such regulations as
may be necessary or appropriate to carry out this Act.
(f) Technical Amendment.--Section 508 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1138) is amended by inserting
``and under the Health Insurance Reform Act of 1995'' before the
period.
TITLE III--MISCELLANEOUS PROVISIONS
SEC. 301. HMOS ALLOWED TO OFFER PLANS WITH DEDUCTIBLES TO INDIVIDUALS
WITH MEDICAL SAVINGS ACCOUNTS.
(a) In General.--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) If a member certifies that a medical savings
account has been established for the benefit of such member, a
health maintenance organization may, at the request of such
member reduce the basic health services payment otherwise
determined under paragraph (1) by requiring the payment of a
deductible by the member for basic health services.
``(B) For purposes of this paragraph, the term `medical
savings account' means an account which, by its terms, allows
the deposit of funds and the use of such funds and income
derived from the investment of such funds for the payment of
the deductible described in subparagraph (A).''.
(b) Medical Savings Accounts.--It is the sense of the Committee on
Labor and Human Resources of the Senate that the establishment of
medical savings accounts, including those defined in section
1301(b)(6)(B) of the Public Health Service Act (42 U.S.C.
300e(b)(6)(B)), should be encouraged as part of any health insurance
reform legislation passed by the Senate through the use of tax
incentives relating to contributions to, the income growth of, and the
qualified use of, such accounts.
(c) Sense of the Senate.--It is the sense of the Senate that the
Congress should take measures to further the purposes of this Act,
including any necessary changes to the Internal Revenue Code of 1986 to
encourage groups and individuals to obtain health coverage, and to
promote access, equity, portability, affordability, and security of
health benefits.
SEC. 302. HEALTH COVERAGE AVAILABILITY STUDY.
(a) In General.--The Secretary of Health and Human Services, in
consultation with the Secretary, representatives of State officials,
consumers, and other representatives of individuals and entities that
have expertise in health insurance and employee benefits, shall conduct
a two-part study, and prepare and submit reports, in accordance with
this section.
(b) Evaluation of Availability.--Not later than January 1, 1997,
the Secretary of Health and Human Services shall prepare and submit to
the appropriate committees of Congress a report, concerning--
(1) an evaluation, based on the experience of States,
expert opinions, and such additional data as may be available,
of the various mechanisms used to ensure the availability of
reasonably priced health coverage to employers purchasing group
coverage and to individuals purchasing coverage on a non-group
basis; and
(2) whether standards that limit the variation in premiums
will further the purposes of this Act.
(c) Evaluation of Effectiveness.--Not later than January 1, 1998,
the Secretary of Health and Human Services shall prepare and submit to
the appropriate committees of Congress a report, concerning the
effectiveness of the provisions of this Act 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.
SEC. 303. SENSE OF THE COMMITTEE CONCERNING MEDICARE.
(a) Findings.--The Committee on Labor and Human Resources of the
Senate finds that the Public Trustees of Medicare concluded in their
1995 Annual Report that--
(1) the Medicare program is clearly unsustainable in its
present form;
(2) ``the Hospital Insurance Trust Fund, which pays
inpatient hospital expenses, will be able to pay benefits for
only about 7 years and is severely out of financial balance in
the long range''; and
(3) the Public Trustees ``strongly recommend that the
crisis presented by the financial condition of the Medicare
trust fund be urgently addressed on a comprehensive basis,
including a review of the programs's financing methods, benefit
provisions, and delivery mechanisms''.
(b) Sense of the Committee.--It is the Sense of the Committee on
Labor and Human Resources of the Senate that the Senate should take
measures necessary to reform the Medicare program, to provide increased
choice for seniors, and to respond to the findings of the Public
Trustees by protecting the short-term solvency and long-term
sustainability of the Medicare program.
SEC. 304. EFFECTIVE DATE.
Except as otherwise provided for in this Act, the provisions of
this Act shall apply as follows:
(1) With respect to group health plans and individual
health plans, such provisions shall apply to plans offered,
sold, issued, renewed, in effect, or operated on or after
January 1, 1996; and
(2) With respect to employee health benefit plans, on the
first day of the first plan year beginning on or after January
1, 1996.
SEC. 305. SEVERABILITY.
If any provision of this Act or the application of such provision
to any person or circumstance is held to be unconstitutional, the
remainder of this Act and the application of the provisions of such to
any person or circumstance shall not be affected thereby.
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