[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2095 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2095

To amend title I of the Employee Retirement Income Security Act of 1974 
         to make needed reforms relating to group health plans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 9, 1999

 Mr. Boehner introduced the following bill; which was referred to the 
                Committee on Education and the Workforce

_______________________________________________________________________

                                 A BILL


 
To amend title I of the Employee Retirement Income Security Act of 1974 
         to make needed reforms relating to group health plans.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Health Care 
Quality and Access Act of 1999''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title and table of contents.
         TITLE I--PATIENT RIGHT TO UNRESTRICTED MEDICAL ADVICE

Sec. 101. Patient access to unrestricted professional health care 
                            advice.
Sec. 102. Effective date and related rules.
           TITLE II--PATIENT RIGHT TO EMERGENCY MEDICAL CARE

Sec. 201. Patient access to emergency medical care.
Sec. 202. Effective date and related rules.
      TITLE III--PATIENT RIGHT TO OBSTETRIC AND GYNECOLOGICAL CARE

Sec. 301. Patient access to obstetric and gynecological care.
Sec. 302. Effective date and related rules.
               TITLE IV--PATIENT RIGHT TO PEDIATRIC CARE

Sec. 401. Patient access to pediatric care.
Sec. 402. Effective date and related rules.
                 TITLE V--PATIENT ACCESS TO INFORMATION

Sec. 501. Patient access to information regarding plan coverage, 
                            managed care procedures, health care 
                            providers, and quality of medical care.
Sec. 502. Effective date and related rules.
              TITLE VI--GROUP HEALTH PLAN REVIEW STANDARDS

Sec. 601. Special rules for group health plans.
Sec. 602. Clarification of ERISA preemption rules.
Sec. 603. Effective date.
     TITLE VII--SMALL BUSINESS ACCESS AND CHOICE FOR ENTREPRENEURS

Sec. 701. Rules governing association health plans.
           ``Part 8--Rules Governing Association Health Plans

        ``Sec. 801. Association health plans.
        ``Sec. 802. Certification of association health plans.
        ``Sec. 803. Requirements relating to sponsors and boards of 
                            trustees.
        ``Sec. 804. Participation and coverage requirements.
        ``Sec. 805. Other requirements relating to plan documents, 
                            contribution rates, and benefit options.
        ``Sec. 806. Maintenance of reserves and provisions for solvency 
                            for plans providing health benefits in 
                            addition to health insurance coverage.
        ``Sec. 807. Requirements for application and related 
                            requirements.
        ``Sec. 808. Notice requirements for voluntary termination.
        ``Sec. 809. Corrective actions and mandatory termination.
        ``Sec. 810. Trusteeship by the Secretary of insolvent 
                            association health plans providing health 
                            benefits in addition to health insurance 
                            coverage.
        ``Sec. 811. State assessment authority.
        ``Sec. 812. Definitions and rules of construction.
Sec. 702. Clarification of treatment of single employer arrangements.
Sec. 703. Clarification of treatment of certain collectively bargained 
                            arrangements.
Sec. 704. Enforcement provisions relating to association health plans.
Sec. 705. Cooperation between Federal and State authorities.
Sec. 706. Effective date and transitional and other rules.
 TITLE VIII--HEALTH CARE ACCESS, AFFORDABILITY, AND QUALITY COMMISSION

Sec. 801. Establishment of commission.
Sec. 802. Effective date.

         TITLE I--PATIENT RIGHT TO UNRESTRICTED MEDICAL ADVICE

SEC. 101. PATIENT ACCESS TO UNRESTRICTED PROFESSIONAL HEALTH CARE 
              ADVICE.

    (a) In General.--Subpart B of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 is amended by 
adding at the end the following new section:

``SEC. 714. PATIENT ACCESS TO UNRESTRICTED PROFESSIONAL HEALTH CARE 
              ADVICE.

    ``(a) In General.--A group health plan, or a health insurance 
issuer offering health insurance coverage in connection with a group 
health plan, shall not prohibit or otherwise restrict a health care 
professional from advising a participant or beneficiary under the plan 
who is a patient of the professional about the health status of the 
participant or beneficiary or the medical care or treatment for the 
condition or disease of the participant or beneficiary, regardless of 
whether benefits for such care or treatment are provided under the plan 
or coverage, if the professional is acting within the lawful scope of 
practice of the professional.
    ``(b) Rules of Construction.--Nothing in this section shall be 
construed--
            ``(1) to prohibit the enforcement, as part of a contract or 
        agreement to which a health care professional is a party, of 
        any mutually agreed upon terms and conditions, including terms 
        and conditions requiring a health care professional to 
        participate in, and cooperate with, all programs, policies, and 
        procedures developed or operated by a group health plan or 
        health insurance issuer to assure, review, or improve the 
        quality and effective utilization of health care services (if 
        such utilization is according to guidelines or protocols that 
        are based on clinical or scientific evidence and the 
        professional judgment of the professional) but only if the 
        guidelines or protocols under such utilization do not prohibit 
        or restrict advice described in subsection (a) between health 
        care professionals and their patients; or
            ``(2) to permit a health care professional to misrepresent 
        the scope of benefits covered under the group health plan or 
        health insurance coverage or to otherwise require a group 
        health plan or health insurance issuer to reimburse health care 
        professionals for benefits (including services and advice) not 
        covered under the plan or coverage.
    ``(c) Health Care Professional Defined.--For purposes of this 
section, the term `health care professional' means a physician (as 
defined in section 1861(r) of the Social Security Act) or other health 
care professional if coverage for the professional's services is 
provided under the group health plan for the services of the 
professional. Such term includes a podiatrist, optometrist, 
chiropractor, psychologist, dentist, physician assistant, physical or 
occupational therapist and therapy assistant, speech-language 
pathologist, audiologist, registered or licensed practical nurse 
(including nurse practitioner, clinical nurse specialist, certified 
registered nurse anesthetist, and certified nurse-midwife), licensed 
certified social worker, registered respiratory therapist, and 
certified respiratory therapy technician.''.
    (b) Conforming Amendment.--Section 732(a) of such Act (29 U.S.C. 
1191a(a)) is amended by striking ``section 711'' and inserting 
``sections 711 and 714''.
    (c) Clerical Amendment.--The table of contents in section 1 of such 
Act is amended by adding at the end of the items relating to subpart B 
of part 7 of subtitle B of title I of such Act the following new item:

``Sec. 714. Patient access to unrestricted professional health care 
                            advice.''.

SEC. 102. EFFECTIVE DATE AND RELATED RULES.

    (a) Effective Date.--
            (1) In general.--Subject to paragraph (2), the amendments 
        made by this title apply with respect to group health plans for 
        plan years beginning on or after the first day of the first 
        month that begins more than 1 year after the date of the 
        enactment of this Act.
            (2) Collective bargaining exception.--In the case of a 
        group health plan maintained pursuant to 1 or more collective 
        bargaining agreements between employee representatives and 1 or 
        more employers ratified before the date of enactment of this 
        Act, the amendments made by this title shall not apply to plan 
        years beginning before the later of--
                    (A) the date on which the last collective 
                bargaining agreements relating to the plan terminates 
                (determined without regard to any extension thereof 
                agreed to after the date of enactment of this Act), or
                    (B) the first day described in paragraph (1).
        For purposes of subparagraph (A), any plan amendment made 
        pursuant to a collective bargaining agreement relating to the 
        plan which amends the plan solely to conform to any requirement 
        added by this title shall not be treated as a termination of 
        such collective bargaining agreement.
    (c) Limitation on Enforcement Actions.--No enforcement action shall 
be taken, pursuant to the amendments made by this title, against a 
group health plan or health insurance issuer with respect to a 
violation of a requirement imposed by such amendments, and no penalty 
shall be imposed on any failure by such plan to comply with any 
requirement imposed by such amendments, to the extent that violation or 
failure occurs before the date of issuance of final regulations issued 
in connection with such requirement, if the plan or issuer has sought 
to comply in good faith with such requirement.

           TITLE II--PATIENT RIGHT TO EMERGENCY MEDICAL CARE

SEC. 201. PATIENT ACCESS TO EMERGENCY MEDICAL CARE.

    (a) In General.--Subpart B of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (as amended by the 
preceding provisions of this Act) is amended further by adding at the 
end the following new section:

``SEC. 715. PATIENT ACCESS TO EMERGENCY MEDICAL CARE.

    ``(a) In General.--To the extent that a group health plan (or a 
health insurance issuer offering health insurance coverage in 
connection with the plan) provides for any benefits consisting of 
emergency medical care, except for items or services specifically 
excluded--
            ``(1) the plan or issuer shall provide benefits, without 
        requiring preauthorization and without regard to otherwise 
        applicable network limitations, for appropriate emergency 
        medical screening examinations (within the capability of the 
        emergency facility, including ancillary services routinely 
        available to the emergency facility) to the extent that a 
        prudent layperson, who possesses an average knowledge of health 
        and medicine, would determine such examinations to be necessary 
        in order to determine whether emergency medical care is 
        required; and
            ``(2) the plan or issuer shall provide benefits for 
        additional emergency medical services following an emergency 
        medical screening examination (if determined necessary under 
        paragraph (1)) to the extent that a prudent emergency medical 
        professional would determine such additional emergency services 
        to be necessary to avoid the consequences described in 
        subsection (c).
    ``(b) Uniform Cost-Sharing Required.--Nothing in this section shall 
be construed as preventing a group health plan or issuer from imposing 
any form of cost-sharing applicable to any participant or beneficiary 
(including coinsurance, copayments, deductibles, and any other charges) 
in relation to benefits described in subsection (a), if such form of 
cost-sharing is uniformly applied under such plan, with respect to 
similarly situated participants and beneficiaries, to all benefits 
consisting of emergency medical care provided to such similarly 
situated participants and beneficiaries under the plan.
    ``(c) Emergency Medical Care.--For purposes of this section, the 
term `emergency medical care' means medical care in any case in which 
an appropriate physician has certified in writing (or as otherwise 
provided in regulations of the Secretary)--
            ``(1) that failure to immediately provide the care to the 
        participant or beneficiary could reasonably be expected to 
        result in--
                    ``(A) placing the health of such participant or 
                beneficiary (or, with respect to such a participant or 
                beneficiary who is a pregnant woman, the health of the 
                woman or her unborn child) in serious jeopardy;
                    ``(B) serious impairment to bodily functions; or
                    ``(C) serious dysfunction of any bodily organ or 
                part; or
            ``(2) that immediate provision of the care is necessary 
        because the participant or beneficiary has made or is at 
        serious risk of making an attempt to harm himself or herself or 
        another individual.''.
    (b) Conforming Amendment.--The table of contents in section 1 of 
such Act (as amended by the preceding provisions of this Act) is 
amended further by adding at the end of the items relating to subpart B 
of part 7 of subtitle B of title I of such Act the following new item:

``Sec. 715. Patient access to emergency medical care.''.

SEC. 202. EFFECTIVE DATE AND RELATED RULES.

    (a) In General.--The amendments made by this title shall apply with 
respect to plan years beginning on or after January 1 of the second 
calendar year following the date of the enactment of this Act, except 
that the Secretary of Labor may issue regulations before such date 
under such amendments. The Secretary shall first issue regulations 
necessary to carry out the amendments made by this title before the 
effective date thereof.
    (b) Limitation on Enforcement Actions.--No enforcement action shall 
be taken, pursuant to the amendments made by this title, against a 
group health plan or health insurance issuer with respect to a 
violation of a requirement imposed by such amendments before the date 
of issuance of regulations issued in connection with such requirement, 
if the plan or issuer has sought to comply in good faith with such 
requirement.
    (c) Special Rule for Collective Bargaining Agreements.--In the case 
of a group health plan maintained pursuant to one or more collective 
bargaining agreements between employee representatives and one or more 
employers ratified before the date of the enactment of this Act, the 
amendments made by this title shall not apply with respect to plan 
years beginning before the later of--
            (1) the date on which the last of the collective bargaining 
        agreements relating to the plan terminates (determined without 
        regard to any extension thereof agreed to after the date of the 
        enactment of this Act); or
            (2) January 1, 2002.
For purposes of this subsection, any plan amendment made pursuant to a 
collective bargaining agreement relating to the plan which amends the 
plan solely to conform to any requirement added by this title shall not 
be treated as a termination of such collective bargaining agreement.

      TITLE III--PATIENT RIGHT TO OBSTETRIC AND GYNECOLOGICAL CARE

SEC. 301. PATIENT ACCESS TO OBSTETRIC AND GYNECOLOGICAL CARE.

    (a) In General.--Subpart B of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (as amended by the 
preceding provisions of this Act) is amended further by adding at the 
end the following new section:

``SEC. 716. PATIENT ACCESS TO OBSTETRIC AND GYNECOLOGICAL CARE

    ``(a) In General.--In any case in which a group health plan (or a 
health insurance issuer offering health insurance coverage in 
connection with the plan)--
            ``(1) provides benefits under the terms of the plan 
        consisting of--
                    ``(A) routine gynecological care (such as 
                preventive women's health examinations); or
                    ``(B) routine obstetric care (such as routine 
                pregnancy-related services),
        provided by a participating physician who specializes in such 
        care (or provides benefits consisting of payment for such 
        care); and
            ``(2) requires or provides for designation by a participant 
        or beneficiary of a participating primary care provider,
if the primary care provider designated by such a participant or 
beneficiary is not such a physician, then the plan (or issuer) shall 
meet the requirements of subsection (b).
    ``(b) Requirements.--A group health plan (or a health insurance 
issuer offering health insurance coverage in connection with the plan) 
meets the requirements of this subsection, in connection with benefits 
described in subsection (a) consisting of care described in 
subparagraph (A) or (B) of subsection (a)(1) (or consisting of payment 
therefor), if the plan (or issuer)--
            ``(1) does not require authorization or a referral by the 
        primary care provider in order to obtain such benefits; and
            ``(2) treats the ordering of other routine care of the same 
        type, by the participating physician providing the care 
        described in subparagraph (A) or (B) of subsection (a)(1), as 
        the authorization of the primary care provider with respect to 
        such care.
    ``(c) Construction.--Nothing in subsection (b)(2) shall waive any 
requirements of coverage relating to medical necessity or 
appropriateness with respect to coverage of gynecological or obstetric 
care so ordered.
    ``(d) Treatment of Multiple Coverage Options.--In the case of a 
plan providing benefits under two or more coverage options, the 
requirements of this section shall apply separately with respect to 
each coverage option.''.
    (b) Conforming Amendment.--The table of contents in section 1 of 
such Act (as amended by the preceding provisions of this Act) is 
amended further by adding at the end of the items relating to subpart B 
of part 7 of subtitle B of title I of such Act the following new item:

``Sec. 716. Patient access to obstetric and gynecological care.''.

SEC. 302. EFFECTIVE DATE AND RELATED RULES.

    (a) In General.--The amendments made by this title shall apply with 
respect to plan years beginning on or after January 1 of the second 
calendar year following the date of the enactment of this Act, except 
that the Secretary of Labor may issue regulations before such date 
under such amendments. The Secretary shall first issue regulations 
necessary to carry out the amendments made by this title before the 
effective date thereof.
    (b) Limitation on Enforcement Actions.--No enforcement action shall 
be taken, pursuant to the amendments made by this title, against a 
group health plan or health insurance issuer with respect to a 
violation of a requirement imposed by such amendments before the date 
of issuance of regulations issued in connection with such requirement, 
if the plan or issuer has sought to comply in good faith with such 
requirement.
    (c) Special Rule for Collective Bargaining Agreements.--In the case 
of a group health plan maintained pursuant to one or more collective 
bargaining agreements between employee representatives and one or more 
employers ratified before the date of the enactment of this Act, the 
amendments made by this title shall not apply with respect to plan 
years beginning before the later of--
            (1) the date on which the last of the collective bargaining 
        agreements relating to the plan terminates (determined without 
        regard to any extension thereof agreed to after the date of the 
        enactment of this Act); or
            (2) January 1, 2002.
For purposes of this subsection, any plan amendment made pursuant to a 
collective bargaining agreement relating to the plan which amends the 
plan solely to conform to any requirement added by this title shall not 
be treated as a termination of such collective bargaining agreement.

               TITLE IV--PATIENT RIGHT TO PEDIATRIC CARE

SEC. 401. PATIENT ACCESS TO PEDIATRIC CARE.

    (a) In General.--Subpart B of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (as amended by the 
preceding provisions of this Act) is amended further by adding at the 
end the following new section:

``SEC. 717. PATIENT ACCESS TO PEDIATRIC CARE.

    ``(a) In General.--In any case in which a group health plan (or a 
health insurance issuer offering health insurance coverage in 
connection with the plan) provides benefits consisting of routine 
pediatric care provided by a participating physician who specializes in 
pediatrics (or consisting of payment for such care) and the plan 
requires or provides for designation by a participant or beneficiary of 
a participating primary care provider, the plan (or issuer) shall 
provide that such a participating physician may be designated, if 
available, by a parent or guardian of any beneficiary under the plan is 
who under 18 years of age, as the primary care provider with respect to 
any such benefits.
    ``(b) Construction.--Nothing in subsection (a) shall waive any 
requirements of coverage relating to medical necessity or 
appropriateness with respect to coverage of pediatric care.
    ``(c) Treatment of Multiple Coverage Options.--In the case of a 
plan providing benefits under two or more coverage options, the 
requirements of this section shall apply separately with respect to 
each coverage option.''.
    (b) Conforming Amendment.--The table of contents in section 1 of 
such Act (as amended by the preceding provisions of this Act) is 
amended further by adding at the end of the items relating to subpart B 
of part 7 of subtitle B of title I of such Act the following new item:

``Sec. 717. Patient access to pediatric care.''.

SEC. 402. EFFECTIVE DATE AND RELATED RULES.

    (a) In General.--The amendments made by this title shall apply with 
respect to plan years beginning on or after January 1 of the second 
calendar year following the date of the enactment of this Act, except 
that the Secretary of Labor may issue regulations before such date 
under such amendments. The Secretary shall first issue regulations 
necessary to carry out the amendments made by this title before the 
effective date thereof.
    (b) Limitation on Enforcement Actions.--No enforcement action shall 
be taken, pursuant to the amendments made by this title, against a 
group health plan or health insurance issuer with respect to a 
violation of a requirement imposed by such amendments before the date 
of issuance of regulations issued in connection with such requirement, 
if the plan or issuer has sought to comply in good faith with such 
requirement.
    (c) Special Rule for Collective Bargaining Agreements.--In the case 
of a group health plan maintained pursuant to one or more collective 
bargaining agreements between employee representatives and one or more 
employers ratified before the date of the enactment of this Act, the 
amendments made by this title shall not apply with respect to plan 
years beginning before the later of--
            (1) the date on which the last of the collective bargaining 
        agreements relating to the plan terminates (determined without 
        regard to any extension thereof agreed to after the date of the 
        enactment of this Act); or
            (2) January 1, 2002.
For purposes of this subsection, any plan amendment made pursuant to a 
collective bargaining agreement relating to the plan which amends the 
plan solely to conform to any requirement added by this title shall not 
be treated as a termination of such collective bargaining agreement.

                 TITLE V--PATIENT ACCESS TO INFORMATION

SEC. 501. PATIENT ACCESS TO INFORMATION REGARDING PLAN COVERAGE, 
              MANAGED CARE PROCEDURES, HEALTH CARE PROVIDERS, AND 
              QUALITY OF MEDICAL CARE.

    (a) In General.--Part 1 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 is amended--
            (1) by redesignating section 111 as section 112; and
            (2) by inserting after section 110 the following new 
        section:

                   ``disclosure by group health plans

    ``Sec. 111. (a) Disclosure Requirement.--
            ``(1) Group health plans.--The administrator of each group 
        health plan shall take such actions as are necessary to ensure 
        that the summary plan description of the plan required under 
        section 102 (or each summary plan description in any case in 
        which different summary plan descriptions are appropriate under 
        part 1 for different options of coverage) contains, among any 
        information otherwise required under this part, the information 
        required under subsections (b), (c), (d), and (e)(2)(A).
            ``(2) Health insurance issuers.--Each health insurance 
        issuer offering health insurance coverage in connection with a 
        group health plan shall provide the administrator on a timely 
        basis with the information necessary to enable the 
        administrator to comply with the requirements of paragraph (1). 
        To the extent that any such issuer provides on a timely basis 
        to plan participants and beneficiaries information otherwise 
        required under this part to be included in the summary plan 
        description, the requirements of sections 101(a)(1) and 104(b) 
        shall be deemed satisfied in the case of such plan with respect 
        to such information.
    ``(b) Plan Benefits.--The information required under subsection (a) 
includes the following:
            ``(1) Covered items and services.--
                    ``(A) Categorization of included benefits.--A 
                description of covered benefits, categorized by--
                            ``(i) types of items and services 
                        (including any special disease management 
                        program); and
                            ``(ii) types of health care professionals 
                        providing such items and services.
                    ``(B) Emergency medical care.--A description of the 
                extent to which the plan covers emergency medical care 
                (including the extent to which the plan provides for 
                access to urgent care centers), and any definitions 
                provided under the plan for the relevant plan 
                terminology referring to such care.
                    ``(C) Preventative services.--A description of the 
                extent to which the plan provides benefits for 
                preventative services.
                    ``(D) Drug formularies.--A description of the 
                extent to which covered benefits are determined by the 
                use or application of a drug formulary and a summary of 
                the process for determining what is included in such 
                formulary.
                    ``(E) COBRA continuation coverage.--A description 
                of the benefits available under the plan pursuant to 
                part 6.
            ``(2) Limitations, exclusions, and restrictions on covered 
        benefits.--
                    ``(A) Categorization of excluded benefits.--A 
                description of benefits specifically excluded from 
                coverage, categorized by types of items and services.
                    ``(B) Utilization review and preauthorization 
                requirements.--Whether coverage for medical care is 
                limited or excluded on the basis of utilization review 
                or preauthorization requirements.
                    ``(C) Lifetime, annual, or other period 
                limitations.--A description of the circumstances under 
                which, and the extent to which, coverage is subject to 
                lifetime, annual, or other period limitations, 
                categorized by types of benefits.
                    ``(D) Custodial care.--A description of the 
                circumstances under which, and the extent to which, the 
                coverage of benefits for custodial care is limited or 
                excluded, and a statement of the definition used by the 
                plan for custodial care.
                    ``(E) Experimental treatments.--Whether coverage 
                for any medical care is limited or excluded because it 
                constitutes experimental treatment or technology, and 
                any definitions provided under the plan for the 
                relevant plan terminology referring to such limited or 
                excluded care.
                    ``(F) Medical appropriateness or necessity.--
                Whether coverage for medical care may be limited or 
                excluded by reason of a failure to meet the plan's 
                requirements for medical appropriateness or necessity, 
                and any definitions provided under the plan for the 
                relevant plan terminology referring to such limited or 
                excluded care.
                    ``(G) Second or subsequent opinions.--A description 
                of the circumstances under which, and the extent to 
                which, coverage for second or subsequent opinions is 
                limited or excluded.
                    ``(H) Specialty care.--A description of the 
                circumstances under which, and the extent to which, 
                coverage of benefits for specialty care is conditioned 
                on referral from a primary care provider.
                    ``(I) Continuity of care.--A description of the 
                circumstances under which, and the extent to which, 
                coverage of items and services provided by any health 
                care professional is limited or excluded by reason of 
                the departure by the professional from any defined set 
                of providers.
                    ``(J) Restrictions on coverage of emergency 
                services.--A description of the circumstances under 
                which, and the extent to which, the plan, in covering 
                emergency medical care furnished to a participant or 
                beneficiary of the plan imposes any financial 
                responsibility described in subsection (c) on 
                participants or beneficiaries or limits or conditions 
                benefits for such care subject to any other term or 
                condition of such plan.
    ``(c) Participant's Financial Responsibilities.--The information 
required under subsection (a) includes an explanation of--
            ``(1) a participant's financial responsibility for payment 
        of premiums, coinsurance, copayments, deductibles, and any 
        other charges; and
            ``(2) the circumstances under which, and the extent to 
        which, the participant's financial responsibility described in 
        paragraph (1) may vary, including any distinctions based on 
        whether a health care provider from whom covered benefits are 
        obtained is included in a defined set of providers.
    ``(d) Dispute Resolution Procedures.--The information required 
under subsection (a) includes a description of the processes adopted by 
the plan pursuant to section 503, including--
            ``(1) descriptions thereof relating specifically to--
                    ``(A) coverage decisions;
                    ``(B) internal review of coverage decisions; and
                    ``(C) any external review of coverage decisions; 
                and
            ``(2) the procedures and time frames applicable to each 
        step of the processes referred to in subparagraphs (A), (B), 
        and (C) of paragraph (1).
    ``(e) Information Available on Request.--
            ``(1) Access to plan benefit information in electronic 
        form.--
                    ``(A) In general.--In addition to the information 
                required to be provided under section 104(b)(4), a 
                group health plan (and a health insurance issuer 
                offering health insurance coverage in connection with a 
                group health plan) shall, upon written request (made 
                not more frequently than annually), make available to 
                participants and beneficiaries, in a generally 
                recognized electronic format, the following 
                information:
                            ``(i) the latest summary plan description, 
                        including the latest summary of material 
                        modifications; and
                            ``(ii) the actual plan provisions setting 
                        forth the benefits available under the plan
                to the extent such information relates to the coverage 
                options under the plan available to the participant or 
                beneficiary. A reasonable charge may be made to cover 
                the cost of providing such information in such 
                generally recognized electronic format. The Secretary 
                may by regulation prescribe a maximum amount which will 
                constitute a reasonable charge under the preceding 
                sentence.
                    ``(B) Alternative access.--The requirements of this 
                paragraph may be met by making such information 
                generally available (rather than upon request) on the 
                Internet or on a proprietary computer network in a 
                format which is readily accessible to participants and 
                beneficiaries.
            ``(2) Additional information to be provided on request.--
                    ``(A) Inclusion in summary plan description of 
                summary of additional information.--The information 
                required under subsection (a) includes a summary 
                description of the types of information required by 
                this subsection to be made available to participants 
                and beneficiaries on request.
                    ``(B) Information required from plans and issuers 
                on request.--In addition to information required to be 
                included in summary plan descriptions under this 
                subsection, a group health plan (and a health insurance 
                issuer offering health insurance coverage in connection 
                with a group health plan) shall provide the following 
                information to a participant or beneficiary on request:
                            ``(i) Network characteristics.--If the plan 
                        (or issuer) utilizes a defined set of providers 
                        under contract with the plan (or issuer), a 
                        detailed list of the names of such providers 
                        and their geographic location, set forth 
                        separately with respect to primary care 
                        providers and with respect to specialists.
                            ``(ii) Care management information.--A 
                        description of the circumstances under which, 
                        and the extent to which, the plan has special 
                        disease management programs or programs for 
                        persons with disabilities, indicating whether 
                        these programs are voluntary or mandatory and 
                        whether a significant benefit differential 
                        results from participation in such programs.
                            ``(iii) Inclusion of drugs and biologicals 
                        in formularies.--A statement of whether a 
                        specific drug or biological is included in a 
                        formulary used to determine benefits under the 
                        plan and a description of the procedures for 
                        considering requests for any patient-specific 
                        waivers.
                            ``(iv) Procedures for determining 
                        exclusions based on medical necessity or 
                        experimental treatments.--Upon receipt by the 
                        participant or beneficiary of any notification 
                        of an adverse coverage decision based on a 
                        determination relating to medical necessity or 
                        an experimental treatment or technology, a 
                        description of the procedures and medically-
                        based criteria used in such decision.
                            ``(v) Preauthorization and utilization 
                        review procedures.--Upon receipt by the 
                        participant or beneficiary of any notification 
                        of an adverse coverage decision, a description 
                        of the basis on which any preauthorization 
                        requirement or any utilization review 
                        requirement has resulted in such decision.
                            ``(vi) Accreditation status of health 
                        insurance issuers and service providers.--A 
                        description of the accreditation and licencing 
                        status (if any) of each health insurance issuer 
                        offering health insurance coverage in 
                        connection with the plan and of any utilization 
                        review organization utilized by the issuer or 
                        the plan, together with the name and address of 
                        the accrediting or licencing authority.
                            ``(vii) Measures of enrollee 
                        satisfaction.--The latest information (if any) 
                        maintained by the plan, or by any health 
                        insurance issuer offering health insurance 
                        coverage in connection with the plan, relating 
                        to enrollee satisfaction.
                            ``(viii) Quality performance measures.--The 
                        latest information (if any) maintained by the 
                        plan, or by any health insurance issuer 
                        offering health insurance coverage in 
                        connection with the plan, relating to quality 
                        of performance of the delivery of medical care 
                        with respect to coverage options offered under 
                        the plan and of health care professionals and 
                        facilities providing medical care under the 
                        plan.
                            ``(ix) Information relating to external 
                        reviews.--The number of any external reviews 
                        under section 503 that have been completed 
                        during the prior plan year and the number of 
                        such reviews in which a recommendation is made 
                        for modification or reversal of an internal 
                        review decision under the plan.
                    ``(C) Information required from health care 
                professionals on request.--Any health care professional 
                treating a participant or beneficiary under a group 
                health plan shall provide to the participant or 
                beneficiary, on request, a description of his or her 
                professional qualifications (including board 
                certification status, licensing status, and 
                accreditation status, if any), privileges, and 
                experience and a general description by category 
                (including salary, fee-for-service, capitation, and 
                such other categories as may be specified in 
                regulations of the Secretary) of the applicable method 
                by which such professional is compensated in connection 
                with the provision of such medical care.
                    ``(D) Information required from health care 
                facilities on request.--Any health care facility from 
                which a participant or beneficiary has sought treatment 
                under a group health plan shall provide to the 
                participant or beneficiary, on request, a description 
                of the facility's corporate form or other 
                organizational form and all forms of licensing and 
                accreditation status (if any) assigned to the facility 
                by standard-setting organizations.
    ``(f) Access to Information Relevant to the Coverage Options Under 
Which the Participant or Beneficiary is Eligible To Enroll.--In 
addition to information otherwise required to be made available under 
this section, a group health plan (and a health insurance issuer 
offering health insurance coverage in connection with a group health 
plan) shall, upon written request (made not more frequently than 
annually), make available to a participant (and an employee who, under 
the terms of the plan, is eligible for coverage but not enrolled) in 
connection with a period of enrollment the summary plan description for 
any coverage option under the plan under which the participant is 
eligible to enroll and any information described in clauses (i), (ii), 
(iii), (vi), (vii), and (viii) of subsection (e)(2)(B).
    ``(g) Advance Notice of Changes in Drug Formularies.--Not later 
than 30 days before the effective of date of any exclusion of a 
specific drug or biological from any drug formulary under the plan that 
is used in the treatment of a chronic illness or disease, the plan 
shall take such actions as are necessary to reasonably ensure that plan 
participants are informed of such exclusion. The requirements of this 
subsection may be satisfied--
            ``(1) by inclusion of information in publications broadly 
        distributed by plan sponsors, employers, or employee 
        organizations;
            ``(2) by electronic means of communication (including the 
        Internet or proprietary computer networks in a format which is 
        readily accessible to participants);
            ``(3) by timely informing participants who, under an 
        ongoing program maintained under the plan, have submitted their 
        names for such notification; or
            ``(4) by any other reasonable means of timely informing 
        plan participants.
    ``(h) Definitions.--For purposes of this section--
            ``(1) Group health plan.--The term `group health plan' has 
        the meaning provided such term under section 733(a)(1).
            ``(2) Medical care.--The term `medical care' has the 
        meaning provided such term under section 733(a)(2).
            ``(3) Health insurance coverage.--The term `health 
        insurance coverage' has the meaning provided such term under 
        section 733(b)(1).
            ``(4) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning provided such term under section 
        733(b)(2).''.
    (b) Conforming Amendments.--
            (1) Section 102(b) of such Act (29 U.S.C. 1022(b)) is 
        amended by inserting before the period at the end the 
        following: ``; and, in the case of a group health plan (as 
        defined in section 111(h)(1)), the information required to be 
        included under section 111(a)''.
            (2) The table of contents in section 1 of such Act is 
        amended by striking the item relating to section 111 and 
        inserting the following new items:

``Sec. 111. Disclosure by group health plans.
``Sec. 112. Repeal and effective date.''.

SEC. 502. EFFECTIVE DATE AND RELATED RULES.

    (a) In General.--The amendments made by this title shall apply with 
respect to plan years beginning on or after January 1 of the second 
calendar year following the date of the enactment of this Act. The 
Secretary shall first issue all regulations necessary to carry out the 
amendments made by this title before such date.
    (b) Limitation on Enforcement Actions.--No enforcement action shall 
be taken, pursuant to the amendments made by this title, against a 
group health plan or health insurance issuer with respect to a 
violation of a requirement imposed by such amendments before the date 
of issuance of final regulations issued in connection with such 
requirement, if the plan or issuer has sought to comply in good faith 
with such requirement.

              TITLE VI--GROUP HEALTH PLAN REVIEW STANDARDS

SEC. 601. SPECIAL RULES FOR GROUP HEALTH PLANS.

    (a) In General.--Section 503 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1133) is amended--
            (1) by inserting ``(a) In General.--'' after ``Sec. 503.'';
            (2) by inserting ``(other than a group health plan)'' after 
        ``employee benefit plan''; and
            (3) by adding at the end the following new subsection:
    ``(b) Special Rules for Group Health Plans.--
            ``(1) Coverage determinations.--Every group health plan 
        shall--
                    ``(A) provide adequate notice in writing in 
                accordance with this subsection to any participant or 
                beneficiary of any adverse coverage decision with 
                respect to benefits of such participant or beneficiary 
                under the plan, setting forth the specific reasons for 
                such coverage decision and any rights of review 
                provided under the plan, written in a manner calculated 
                to be understood by the average participant;
                    ``(B) provide such notice in writing also to any 
                treating medical care provider of such participant or 
                beneficiary, if such provider has claimed reimbursement 
                for any item or service involved in such coverage 
                decision, or if a claim submitted by the provider 
                initiated the proceedings leading to such decision;
                    ``(C) afford a reasonable opportunity to any 
                participant or beneficiary who is in receipt of the 
                notice of such adverse coverage decision, and who files 
                a written request for review of the initial coverage 
                decision within 90 days after receipt of the notice of 
                the initial decision, for a full and fair review of the 
                decision by an appropriate named fiduciary who did not 
                make the initial decision; and
                    ``(D) meet the additional requirements of this 
                subsection.
            ``(2) Time limits for making initial coverage decisions for 
        benefits and completing internal appeals.--
                    ``(A) Time limits for deciding requests for benefit 
                payments, requests for advance determination of 
                coverage, and requests for required determination of 
                medical necessity.--Except as provided in subparagraph 
                (B)--
                            ``(i) Initial decisions.--If a request for 
                        benefit payments, a request for advance 
                        determination of coverage, or a request for 
                        required determination of medical necessity is 
                        submitted to a group health plan in such 
                        reasonable form as may be required under the 
                        plan, the plan shall issue in writing an 
                        initial coverage decision on the request before 
                        the end of the initial decision period under 
                        paragraph (10)(I) following the filing 
                        completion date. Failure to issue a coverage 
                        decision on such a request before the end of 
                        the period required under this clause shall be 
                        treated as an adverse coverage decision for 
                        purposes of internal review under clause (ii).
                            ``(ii) Internal reviews of initial 
                        denials.--Upon the written request of a 
                        participant or beneficiary for review of an 
                        initial adverse coverage decision under clause 
                        (i), a review by an appropriate named fiduciary 
                        (subject to paragraph (3)) of the initial 
                        coverage decision shall be completed, including 
                        issuance by the plan of a written decision 
                        affirming, reversing, or modifying the initial 
                        coverage decision, setting forth the grounds 
                        for such decision, before the end of the 
                        internal review period following the review 
                        filing date. Such decision shall be treated as 
                        the final decision of the plan, subject to any 
                        applicable reconsideration under paragraph (4). 
                        Failure to issue before the end of such period 
                        such a written decision requested under this 
                        clause shall be treated as a final decision 
                        affirming the initial coverage decision.
                    ``(B) Time limits for making coverage decisions 
                relating to accelerated need medical care and for 
                completing internal appeals.--
                            ``(i) Initial decisions.--A group health 
                        plan shall issue in writing an initial coverage 
                        decision on any request for expedited advance 
                        determination of coverage or for expedited 
                        required determination of medical necessity 
                        submitted, in such reasonable form as may be 
                        required under the plan before the end of the 
                        accelerated need decision period under 
                        paragraph (10)(K), in cases involving 
                        accelerated need medical care, following the 
                        filing completion date. Failure to approve or 
                        deny such a request before the end of the 
                        applicable decision period shall be treated as 
                        a denial of the request for purposes of 
                        internal review under clause (ii).
                            ``(ii) Internal reviews of initial 
                        denials.--Upon the written request of a 
                        participant or beneficiary for review of an 
                        initial adverse coverage decision under clause 
                        (i), a review by an appropriate named fiduciary 
                        (subject to paragraph (3)) of the initial 
                        coverage decision shall be completed, including 
                        issuance by the plan of a written decision 
                        affirming, reversing, or modifying the initial 
                        converge decision, setting forth the grounds 
                        for the decision before the end of the 
                        accelerated need decision period under 
                        paragraph (10)(K) following the review filing 
                        date. Such decision shall be treated as the 
                        final decision of the plan, subject to any 
                        applicable reconsideration under paragraph (4). 
                        Failure to issue before the end of the 
                        applicable decision period such a written 
                        decision requested under this clause shall be 
                        treated as a final decision affirming the 
                        initial coverage decision.
            ``(3) Medical professionals must review initial coverage 
        decisions involving medical appropriateness or necessity or 
        investigational items or experimental treatment or 
        technology.--If an initial coverage decision under paragraph 
        (2)(A)(i) or (2)(B)(i) is based on a determination that 
        provision of a particular item or service is excluded from 
        coverage under the terms of the plan because the provision of 
        such item or service does not meet the plan's requirements for 
        medical appropriateness or necessity or would constitute 
        investigational items or experimental treatment or technology, 
        the review under paragraph (2)(A)(ii) or (2)(B)(ii), to the 
        extent that it relates to medical appropriateness or necessity 
        or to investigational items or experimental treatment or 
        technology, shall be conducted by a physician or, if 
        appropriate, another medical professional, who is selected by 
        the plan and who did not make the initial denial.
            ``(4) Elective external review by independent medical 
        expert and reconsideration of initial review decision.--
                    ``(A) In general.--In any case in which a 
                participant or beneficiary, who has received an adverse 
                coverage decision which is not reversed upon review 
                conducted pursuant to paragraph (1)(C) (including 
                review under paragraph (2)(A)(ii) or (2)(B)(ii)) and 
                who has not commenced review of the coverage decision 
                under section 502, makes a request in writing, within 
                30 days after the date of such review decision, for 
                reconsideration of such review decision, the 
                requirements of subparagraphs (B), (C), (D) and (E) 
                shall apply in the case of such adverse coverage 
                decision, if the requirements of clause (i), (ii), or 
                (iii) are met.
                            ``(i) Medical appropriateness or 
                        investigational item or experimental treatment 
                        or technology.--The requirements of this clause 
                        are met if such coverage decision is based on a 
                        determination that provision of a particular 
                        item or service that would otherwise be covered 
                        under the terms of the plan is excluded from 
                        coverage under the terms of the plan because 
                        the provision of such item or service--
                                    ``(I) does not meet the plan's 
                                requirements for medical 
                                appropriateness or necessity; or
                                    ``(II) would constitute an 
                                investigational item or experimental 
                                treatment or technology.
                            ``(ii) Categorical exclusion of item or 
                        service requiring evaluation of medical facts 
                        or evidence.--The requirements of this clause 
                        are met if--
                                    ``(I) such coverage decision is 
                                based on a determination that a 
                                particular item or service is not 
                                covered under the terms of the plan 
                                because provision of such item or 
                                service is categorically excluded from 
                                coverage under the terms of the plan, 
                                and
                                    ``(II) an independent contract 
                                expert finds under subparagraph (C), in 
                                advance of any review of the decision 
                                under subparagraph (D), that such 
                                determination primarily requires the 
                                evaluation of medical facts or medical 
                                evidence by a health professional.
                            ``(iii) Specific exclusion of item or 
                        service requiring evaluation of medical facts 
                        or evidence.--The requirements of this clause 
                        are met if--
                                    ``(I) such coverage decision is 
                                based on a determination that a 
                                particular item or service is not 
                                covered under the terms of the plan 
                                because provision of such item or 
                                service is specifically excluded from 
                                coverage under the terms of the plan, 
                                and
                                    ``(II) an independent contract 
                                expert finds under subparagraph (C), in 
                                advance of any review of the decision 
                                under subparagraph (D), that such 
                                determination primarily requires the 
                                evaluation of medical facts or medical 
                                evidence by a health professional.
                            ``(iv) Matters specifically not subject to 
                        review.--The requirements of subparagraphs (B), 
                        (C), (D), and (E) shall not apply in the case 
                        of any adverse coverage decision if such 
                        decision is based on--
                                    ``(I) a determination of 
                                eligibility for benefits,
                                    ``(II) the application of explicit 
                                plan limits on the number, cost, or 
                                duration of any benefit, or
                                    ``(III) a limitation on the amount 
                                of any benefit payment or a requirement 
                                to make copayments under the terms of 
                                the plan.
                Review under this paragraph shall not be available for 
                any coverage decision that has previously undergone 
                review under this paragraph.
                    ``(B) Limits on allowable advance payments.--The 
                review under this paragraph in connection with an 
                adverse coverage decision shall be available subject to 
                any requirement of the plan (unless waived by the plan 
                for financial or other reasons) for payment in advance 
                to the plan by the participant or beneficiary seeking 
                review of an amount not to exceed the greater of (i) 
                the lesser of $100 or 10 percent of the cost of the 
                medical care involved in the decision, or (ii) $25, 
                with such dollar amount subject to compounded annual 
                adjustments in the same manner and to the same extent 
                as apply under section 215(i) of the Social Security 
                Act, except that, for any calendar year, such amount as 
                so adjusted shall be deemed, solely for such calendar 
                year, to be equal to such amount rounded to the nearest 
                $10. No such payment may be required in the case of any 
                participant or beneficiary whose enrollment under the 
                plan is paid for, in whole or in part, under a State 
                plan under title XIX or XXI of the Social Security Act. 
                Any such advance payment shall be subject to 
                reimbursement if the recommendation of the independent 
                medical expert or experts under subparagraph (D)(iii) 
                is to reverse or modify the coverage decision.
                    ``(C) Request to independent contract experts for 
                determination of whether coverage decision required 
                evaluation of medical facts or evidence.--
                            ``(i) In general.--In the case of a request 
                        for review made by a participant or beneficiary 
                        as described in subparagraph (A), if the 
                        requirements of clause (ii) or (iii) of 
                        subparagraph (A) are met (and review is not 
                        otherwise precluded under subparagraph 
                        (A)(iv)), the terms of the plan shall provide 
                        for a procedure for initial review by an 
                        independent contract expert selected by the 
                        plan under which the expert will determine 
                        whether the coverage decision requires the 
                        evaluation of medical facts or evidence by a 
                        health professional. If the expert determines 
                        that the coverage decision requires such 
                        evaluation, reconsideration of such adverse 
                        decision shall proceed under this paragraph. If 
                        the expert determines that the coverage 
                        decision does not require such evaluation, the 
                        adverse decision shall remain the final 
                        decision of the plan.
                            ``(ii) Independent contract experts.--For 
                        purposes of this subparagraph, the term 
                        `independent contract expert' means a 
                        professional--
                                    ``(I) who has appropriate 
                                credentials and has attained recognized 
                                expertise in the applicable area of 
                                contract interpretation;
                                    ``(II) who was not involved in the 
                                initial decision or any earlier review 
                                thereof; and
                                    ``(III) who is selected in 
                                accordance with subparagraph (G)(i) and 
                                meets the requirements of subparagraph 
                                (G)(ii).
                    ``(D) Reconsideration of initial review decision.--
                            ``(i) In general.--In the case of a request 
                        for review made by a participant or beneficiary 
                        as described in subparagraph (A), if the 
                        requirements of subparagraph (A)(i) are met or 
                        reconsideration proceeds under this paragraph 
                        pursuant to subparagraph (C), the terms of the 
                        plan shall provide for a procedure for such 
                        reconsideration in accordance with clause (ii).
                            ``(ii) Procedure for reconsideration.--The 
                        procedure required under clause (i) shall 
                        include the following--
                                    ``(I) One or more independent 
                                medical experts will be selected in 
                                accordance with subparagraph (F) to 
                                reconsider any coverage decision 
                                described in subparagraph (A) to 
                                determine whether such decision was in 
                                accordance with the terms of the plan 
                                and this title.
                                    ``(II) The record for review 
                                (including a specification of the terms 
                                of the plan and other criteria serving 
                                as the basis for the initial review 
                                decision) will be presented to such 
                                expert or experts and maintained in a 
                                manner which will ensure 
                                confidentiality of such record.
                                    ``(III) Such expert or experts will 
                                reconsider the initial review decision 
                                to determine whether such decision was 
                                in accordance with the terms of the 
                                plan and this title. Such 
                                reconsideration shall include the 
                                initial decision of the plan, the 
                                medical condition of the patient, and 
                                the recommendations of the treating 
                                physician. The experts shall take into 
                                account in the course of such 
                                reconsideration any guidelines adopted 
                                by the plan through a process involving 
                                medical practitioners and peer-reviewed 
                                medical literature identified as such 
                                under criteria established by the Food 
                                and Drug Administration.
                                    ``(IV) Such expert or experts will 
                                issue a written decision affirming, 
                                modifying, or reversing the initial 
                                review decision, setting forth the 
                                grounds for the decision.
                    ``(E) Time limits for reconsideration.--Any review 
                under this paragraph (including any review under 
                subparagraph (C)) shall be completed before the end of 
                the reconsideration period (as defined in paragraph 
                (10)(L)) following the review filing date in connection 
                with such review. The decision under this paragraph 
                affirming, reversing, or modifying the initial review 
                decision of the plan shall be the final decision of the 
                plan. Failure to issue a written decision before the 
                end of the reconsideration period in any 
                reconsideration requested under this paragraph shall be 
                treated as a final decision affirming the initial 
                review decision of the plan.
                    ``(F) Independent medical experts.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `independent medical 
                        expert' means, in connection with any coverage 
                        decision by a group health plan, a 
                        professional--
                                    ``(I) who is a physician or, if 
                                appropriate, another medical 
                                professional;
                                    ``(II) who has appropriate 
                                credentials and has attained recognized 
                                expertise in the applicable medical 
                                field;
                                    ``(III) who was not involved in the 
                                initial decision or any earlier review 
                                thereof;
                                    ``(IV) who has not history of 
                                disciplinary action or sanctions 
                                (including, but not limited to, loss of 
                                staff privileges or participation 
                                restriction) taken or pending by any 
                                hospital, health carrier, government, 
                                or regulatory body; and
                                    ``(V) who is selected in accordance 
                                with subparagraph (G)(i) and meets the 
                                requirements of subparagraph (G)(ii).
                    ``(G) Selection of experts.--
                            ``(i) In general.--An independent contract 
                        expert or independent medical expert is 
                        selected in accordance with this clause if--
                                    ``(I) the expert is selected by an 
                                intermediary which itself meets the 
                                requirements of clause (ii), by means 
                                of a method which ensures that the 
                                identity of the expert is not disclosed 
                                to the plan, any health insurance 
                                issuer offering health insurance 
                                coverage to the aggrieved participant 
                                or beneficiary in connection with the 
                                plan, and the aggrieved participant or 
                                beneficiary under the plan, and the 
                                identities of the plan, the issuer, and 
                                the aggrieved participant or 
                                beneficiary are not disclosed to the 
                                expert; or
                                    ``(II) the expert is selected, by 
                                an intermediary or otherwise, in a 
                                manner that is, under regulations 
                                issued pursuant to negotiated 
                                rulemaking, sufficient to ensure the 
                                expert's independence, including 
                                selection by the plan in cases where it 
                                is determined that a suitable 
                                intermediary is not reasonably 
                                available,
                        and the method of selection is devised to 
                        reasonably ensure that the expert selected 
                        meets the independence requirements of clause 
                        (ii).
                            ``(ii) Independence requirements.--An 
                        independent contract expert or independent 
                        medical expert or another entity described in 
                        clause (i) meets the independence requirements 
                        of this clause if--
                                    ``(I) the expert or entity is not 
                                affiliated with any related party;
                                    ``(II) any compensation received by 
                                such expert or entity in connection 
                                with the external review is reasonable 
                                and not contingent on any decision 
                                rendered by the expert or entity;
                                    ``(III) under the terms of the plan 
                                and any health insurance coverage 
                                offered in connection with the plan, 
                                the plan and the issuer (if any) have 
                                no recourse against the expert or 
                                entity in connection with the external 
                                review; and
                                    ``(IV) the expert or entity does 
                                not otherwise have a conflict of 
                                interest with a related party as 
                                determined under any regulations which 
                                the Secretary may prescribe.
                            ``(iii) Related party.--For purposes of 
                        clause (i)(I), the term `related party' means--
                                    ``(I) the plan or any health 
                                insurance issuer offering health 
                                insurance coverage in connection with 
                                the plan (or any officer, director, or 
                                management employee of such plan or 
                                issuer);
                                    ``(II) the physician or other 
                                medical care provider that provided the 
                                medical care involved in the coverage 
                                decision;
                                    ``(III) the institution at which 
                                the medical care involved in the 
                                coverage decision is provided;
                                    ``(IV) the manufacturer of any drug 
                                or other item that was included in the 
                                medical care involved in the coverage 
                                decision; or
                                    ``(V) any other party determined 
                                under any regulations which the 
                                Secretary may prescribe to have a 
                                substantial interest in the coverage 
                                decision.
                            ``(iv) Affiliated.--For purposes of clause 
                        (ii)(I), the term `affiliated' means, in 
                        connection with any entity, having a familial, 
                        financial, or professional relationship with, 
                        or interest in, such entity.
                    ``(H) Misbehavior by experts.--Any action by the 
                expert or experts in applying for their selection under 
                this paragraph or in the course of carrying out their 
                duties under this paragraph which constitutes--
                            ``(i) fraud or intentional 
                        misrepresentation by such expert or experts, or
                            ``(ii) demonstrates failure to adhere to 
                        the standards for selection set forth in 
                        subparagraph (G)(ii),
                shall be treated as a failure to meet the requirements 
                of this paragraph and therefore as a cause of action 
                which may be brought by a fiduciary under section 
                502(a)(3).
            ``(5) Permitted alternatives to required internal review.--
                    ``(A) In general.--In accordance with such 
                regulations (if any) as may be prescribed by the 
                Secretary for purposes of this paragraph, in the case 
                of any initial coverage decision for benefits under 
                paragraph (2)(A)(ii) or (2)(B)(ii), a group health plan 
                may provide an alternative dispute resolution procedure 
                meeting the requirements of subparagraph (B) for use in 
                lieu of the procedures set forth under the preceding 
                provisions of this subsection relating review of such 
                decision. Such procedure may be provided in one form 
                for all participants and beneficiaries or in a 
                different form each group of similarly situated 
                participants and beneficiaries.
                    ``(B) Requirements.--An alternative dispute 
                resolution procedure meets the requirements of this 
                subparagraph, in connection with any initial coverage 
                decision, if--
                            ``(i) such procedure is utilized solely--
                                    ``(I) accordance with the 
                                applicable terms of a bona fide 
                                collective bargaining agreement 
                                pursuant to which the plan (or the 
                                applicable portion thereof governed by 
                                the agreement) is established or 
                                maintained, or
                                    ``(II) upon election by all parties 
                                to such decision,
                            ``(ii) the procedure incorporates time 
                        limits not exceeding the time limits otherwise 
                        applicable under paragraphs (2)(A)(ii) and 
                        (2)(B)(ii);
                            ``(iii) the procedure incorporates any 
                        otherwise applicable requirement for review by 
                        a physician under paragraph (3), unless waived 
                        by the participant or beneficiary (in a manner 
                        consistent with such regulations as the 
                        Secretary may prescribe to ensure equitable 
                        procedures); and
                            ``(iv) the means of resolution of dispute 
                        allow for adequate presentation by each party 
                        of scientific and medical evidence supporting 
                        the position of such party.
                    ``(C) Waivers.--In any case in which utilization of 
                the alternative dispute resolution procedure is 
                voluntarily elected by all parties in connection with a 
                coverage decision, the plan may require or allow under 
                such procedure (in a manner consistent with such 
                regulations as the Secretary may prescribe to ensure 
                equitable procedures) any party to waive review of the 
                coverage decision under paragraph (3), to waive further 
                review of the coverage decision under paragraph (4) or 
                section 502, and to elect an alternative means of 
                external review (other than review under paragraph 
                (4)).
            ``(6) Permitted alternatives to required external review.--
        A group health plan shall not be treated as failing to meet the 
        requirements of this subsection in connection with review of 
        coverage decisions under paragraph (4) if the aggrieved 
        participant or beneficiary elects to utilize a procedure in 
        connection with such review which is made generally available 
        under the plan (in a manner consistent with such regulations as 
        the Secretary may prescribe to ensure equitable procedures) 
        under which--
                    ``(A) the plan agrees in advance of the 
                recommendations of the independent medical expert or 
                experts under paragraph (4)(C)(iii) to render a final 
                decision in accordance with such recommendations; and
                    ``(B) the participant or beneficiary waives in 
                advance any right to review of the final decision under 
                section 502.
            ``(7) Review requirements.--In any review of a decision 
        issued under this subsection--
                    ``(A) the record below shall be maintained for 
                purposes of review in accordance with standards which 
                shall be prescribed in regulations of the Secretary 
                designed to facilitate such review, and
                    ``(B) any decision upon review which modifies or 
                reverses a decision below shall specifically set forth 
                a determination that the record upon review is 
                sufficient to rebut a presumption in favor of the 
                decision below.
            ``(8) Compliance with fiduciary standards.--The issuance of 
        a decision under a plan upon review in good faith compliance 
        with the requirements of this subsection shall not be treated 
        as a violation of part 4.
            ``(9) Group health plan defined.--For purposes of this 
        section--
                    ``(A) In general.--The term `group health plan' 
                shall have the meaning provided in section 733(a).
                    ``(B) Treatment of partnerships.--The provisions of 
                paragraphs (1), (2), and (3) of section 732(d) shall 
                apply.
            ``(10) Other definitions.--For purposes of this 
        subsection--
                    ``(A) Request for benefit payments.--The term 
                `request for benefit payments' means a request, for 
                payment of benefits by a group health plan for medical 
                care, which is made by, or (if expressly authorized) on 
                behalf of, a participant or beneficiary after such 
                medical care has been provided.
                    ``(B) Required determination of medical 
                necessity.--The term `required determination of medical 
                necessity' means a determination required under a group 
                health plan solely that proposed medical care meets, 
                under the facts and circumstances at the time of the 
                determination, the plan's requirements for medical 
                appropriateness or necessity (which may be subject to 
                exceptions under the plan for fraud or 
                misrepresentation), irrespective of whether the 
                proposed medical care otherwise meets other terms and 
                conditions of coverage, but only if such determination 
                does not constitute an advance determination of 
                coverage (as defined in subparagraph (C)).
                    ``(C) Advance determination of coverage.--The term 
                `advance determination of coverage' means a 
                determination under a group health plan that proposed 
                medical care meets, under the facts and circumstances 
                at the time of the determination, the plan's terms and 
                conditions of coverage (which may be subject to 
                exceptions under the plan for fraud or 
                misrepresentation).
                    ``(D) Request for advance determination of 
                coverage.--The term `request for advance determination 
                of coverage' means a request for an advance 
                determination of coverage of medical care which is made 
                by, or (if expressly authorized) on behalf of, a 
                participant or beneficiary before such medical care is 
                provided.
                    ``(E) Request for expedited advance determination 
                of coverage.--The term `request for expedited advance 
                determination of coverage' means a request for advance 
                determination of coverage, in any case in which the 
                proposed medical care constitutes accelerated need 
                medical care.
                    ``(F) Request for required determination of medical 
                necessity.--The term `request for required 
                determination of medical necessity' means a request for 
                a required determination of medical necessity for 
                medical care which is made by or on behalf of a 
                participant or beneficiary before the medical care is 
                provided.
                    ``(G) Request for expedited required determination 
                of medical necessity.--The term `request for expedited 
                required determination of medical necessity' means a 
                request for required determination of medical necessity 
                in any case in which the proposed medical care 
                constitutes accelerated need medical care.
                    ``(H) Accelerated need medical care.--The term 
                `accelerated need medical care' means medical care in 
                any case in which an appropriate physician has 
                certified in writing (or as otherwise provided in 
                regulations of the Secretary) that the participant or 
                beneficiary is stabilized and--
                            ``(i) that failure to immediately provide 
                        the care to the participant or beneficiary 
                        could reasonably be expected to result in--
                                    ``(I) placing the health of such 
                                participant or beneficiary (or, with 
                                respect to such a participant or 
                                beneficiary who is a pregnant woman, 
                                the health of the woman or her unborn 
                                child) in serious jeopardy;
                                    ``(II) serious impairment to bodily 
                                functions; or
                                    ``(III) serious dysfunction of any 
                                bodily organ or part; or
                            ``(ii) that immediate provision of the care 
                        is necessary because the participant or 
                        beneficiary has made or is at serious risk of 
                        making an attempt to harm himself or herself or 
                        another individual.
                    ``(I) Initial decision period.--The term `initial 
                decision period' means a period of 30 days, or such 
                longer period as may be prescribed in regulations of 
                the Secretary.
                    ``(J) Internal review period.--The term `internal 
                review period' means a period of 30 days, or such 
                longer period as may be prescribed in regulations of 
                the Secretary.
                    ``(K) Accelerated need decision period.--The term 
                `accelerated need decision period' means a period of 5 
                days, or such longer period as may be prescribed in 
                regulations of the Secretary.
                    ``(L) Reconsideration period.--The term 
                `reconsideration period' means a period of 25 days, or 
                such longer period as may be prescribed in regulations 
                of the Secretary, except that--
                            ``(i) in the case of a decision involving 
                        urgent medical care, such term means the urgent 
                        decision period; and
                            ``(ii) in the case of a decision involving 
                        accelerated need medical care, such term means 
                        the accelerated need decision period.
                    ``(M) Filing completion date.--The term `filing 
                completion date' means, in connection with a group 
                health plan, the date as of which the plan is in 
                receipt of all information reasonably required (in 
                writing or in such other reasonable form as may be 
                specified by the plan) to make an initial coverage 
                decision.
                    ``(N) Review filing date.--The term `review filing 
                date' means, in connection with a group health plan, 
                the date as of which the appropriate named fiduciary 
                (or the independent medical expert or experts in the 
                case of a review under paragraph (4)) is in receipt of 
                all information reasonably required (in writing or in 
                such other reasonable form as may be specified by the 
                plan) to make a decision to affirm, modify, or reverse 
                a coverage decision.
                    ``(O) Medical care.--The term `medical care' has 
                the meaning provided such term by section 733(a)(2).
                    ``(P) Health insurance coverage.--The term `health 
                insurance coverage' has the meaning provided such term 
                by section 733(b)(1).
                    ``(Q) Health insurance issuer.--The term `health 
                insurance issuer' has the meaning provided such term by 
                section 733(b)(2).
                    ``(R) Written or in writing.--
                            ``(i) In general.--A request or decision 
                        shall be deemed to be `written' or `in writing' 
                        if such request or decision is presented in a 
                        generally recognized printable or electronic 
                        format. The Secretary may by regulation provide 
                        for presentation of information otherwise 
                        required to be in written form in such other 
                        forms as may be appropriate under the 
                        circumstances.
                            ``(ii) Medical appropriateness or 
                        investigational items or experimental treatment 
                        determinations.--For purposes of this 
                        subparagraph, in the case of a request for 
                        advance determination of coverage, a request 
                        for expedited advance determination of 
                        coverage, a request for required determination 
                        of medical necessity, or a request for 
                        expedited required determination of medical 
                        necessity, if the decision on such request is 
                        conveyed to the provider of medical care or to 
                        the participant or beneficiary by means of 
                        telephonic or other electronic communications, 
                        such decision shall be treated as a written 
                        decision.''.

SEC. 602. CLARIFICATION OF ERISA PREEMPTION RULES.

    (a) In General.--Section 514 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1144) is amended--
            (1) by redesignating subsection (d) as subsection (e); and
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d) The procedures and remedies required or provided under 
sections 502 and 503 in connection with--
            ``(1) review of claims for benefits under employee benefit 
        plans and for review of decisions denying such claims 
        (including review of coverage decisions referred to in section 
        503(b) and decisions upon review of such coverage decisions), 
        and
            ``(2) causes of action brought to recover plan benefits, to 
        enforce rights under the terms of the plan or this title, or to 
        clarify rights to future benefits under the terms of the plan 
        or this title,
are the exclusive procedures and remedies with respect to any such 
review or cause of action and supersede any provision of State law 
providing for any such review or cause of action.''.
    (b) Conforming Amendment.--Section 514(b)(2)(A) of such Act (42 
U.S.C. 1144(b)(2)(A)) is amended by inserting ``or subsection (d)'' 
after ``subparagraph (B)''.

SEC. 603. EFFECTIVE DATE.

    (a) In General.--The amendments made by this title shall apply with 
respect to grievances arising in plan years beginning on or after 
January 1 of the second calendar year following 12 months after the 
date the Secretary of Labor issues all regulations necessary to carry 
out amendments made by this title.
    (b) Limitation on Enforcement Actions.--No enforcement action shall 
be taken, pursuant to the amendments made by this title, against a 
group health plan or health insurance issuer with respect to a 
violation of a requirement imposed by such amendments before the date 
of issuance of final regulations issued in connection with such 
requirement, if the plan or issuer has sought to comply in good faith 
with such requirement.
    (c) Collective Bargaining Agreements.--Any plan amendment made 
pursuant to a collective bargaining agreement relating to the plan 
which amends the plan solely to conform to any requirement added by 
this title shall not be treated as a termination of such collective 
bargaining agreement.

     TITLE VII--SMALL BUSINESS ACCESS AND CHOICE FOR ENTREPRENEURS

SEC. 701. RULES GOVERNING ASSOCIATION HEALTH PLANS.

    (a) In General.--Subtitle B of title I of the Employee Retirement 
Income Security Act of 1974 is amended by adding after part 7 the 
following new part:

           ``Part 8--Rules Governing Association Health Plans

``SEC. 801. ASSOCIATION HEALTH PLANS.

    ``(a) In General.--For purposes of this part, the term `association 
health plan' means a group health plan--
            ``(1) whose sponsor is (or is deemed under this part to be) 
        described in subsection (b); and
            ``(2) under which at least one option of health insurance 
        coverage offered by a health insurance issuer (which may 
        include, among other options, managed care options, point of 
        service options, and preferred provider options) is provided to 
        participants and beneficiaries, unless, for any plan year, such 
        coverage remains unavailable to the plan despite good faith 
        efforts exercised by the plan to secure such coverage.
    ``(b) Sponsorship.--The sponsor of a group health plan is described 
in this subsection if such sponsor--
            ``(1) is organized and maintained in good faith, with a 
        constitution and bylaws specifically stating its purpose and 
        providing for periodic meetings on at least an annual basis, as 
        a bona fide trade association, a bona fide industry association 
        (including a rural electric cooperative association or a rural 
        telephone cooperative association), a bona fide professional 
        association, or a bona fide chamber of commerce (or similar 
        bona fide business association, including a corporation or 
        similar organization that operates on a cooperative basis 
        (within the meaning of section 1381 of the Internal Revenue 
        Code of 1986)), for substantial purposes other than that of 
        obtaining or providing medical care;
            ``(2) is established as a permanent entity which receives 
        the active support of its members and collects from its members 
        on a periodic basis dues or payments necessary to maintain 
        eligibility for membership in the sponsor; and
            ``(3) does not condition membership, such dues or payments, 
        or coverage under the plan on the basis of health status-
        related factors with respect to the employees of its members 
        (or affiliated members), or the dependents of such employees, 
        and does not condition such dues or payments on the basis of 
        group health plan participation.
Any sponsor consisting of an association of entities which meet the 
requirements of paragraphs (1), (2), and (3) shall be deemed to be a 
sponsor described in this subsection.

``SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.

    ``(a) In General.--The applicable authority shall prescribe by 
regulation, through negotiated rulemaking, a procedure under which, 
subject to subsection (b), the applicable authority shall certify 
association health plans which apply for certification as meeting the 
requirements of this part.
    ``(b) Standards.--Under the procedure prescribed pursuant to 
subsection (a), in the case of an association health plan that provides 
at least one benefit option which does not consist of health insurance 
coverage, the applicable authority shall certify such plan as meeting 
the requirements of this part only if the applicable authority is 
satisfied that--
            ``(1) such certification--
                    ``(A) is administratively feasible;
                    ``(B) is not adverse to the interests of the 
                individuals covered under the plan; and
                    ``(C) is protective of the rights and benefits of 
                the individuals covered under the plan; and
            ``(2) the applicable requirements of this part are met (or, 
        upon the date on which the plan is to commence operations, will 
        be met) with respect to the plan.
    ``(c) Requirements Applicable to Certified Plans.--An association 
health plan with respect to which certification under this part is in 
effect shall meet the applicable requirements of this part, effective 
on the date of certification (or, if later, on the date on which the 
plan is to commence operations).
    ``(d) Requirements for Continued Certification.--The applicable 
authority may provide by regulation, through negotiated rulemaking, for 
continued certification of association health plans under this part.
    ``(e) Class Certification for Fully Insured Plans.--The applicable 
authority shall establish a class certification procedure for 
association health plans under which all benefits consist of health 
insurance coverage. Under such procedure, the applicable authority 
shall provide for the granting of certification under this part to the 
plans in each class of such association health plans upon appropriate 
filing under such procedure in connection with plans in such class and 
payment of the prescribed fee under section 807(a).
    ``(f) Certification of Self-Insured Association Health Plans.--An 
association health plan which offers one or more benefit options which 
do not consist of health insurance coverage may be certified under this 
part only if such plan consists of any of the following:
            ``(1) a plan which offered such coverage on the date of the 
        enactment of the Small Business Access and Choice for 
        Entrepreneurs Act of 1999,
            ``(2) a plan under which the sponsor does not restrict 
        membership to one or more trades and businesses or industries 
        and whose eligible participating employers represent a broad 
        cross-section of trades and businesses or industries, or
            ``(3) a plan whose eligible participating employers 
        represent one or more trades or businesses, or one or more 
        industries, which have been indicated as having average or 
        above-average health insurance risk or health claims experience 
        by reason of State rate filings, denials of coverage, proposed 
        premium rate levels, and other means demonstrated by such plan 
        in accordance with regulations which the Secretary shall 
        prescribe through negotiated rulemaking, including (but not 
        limited to) the following: agriculture; automobile dealerships; 
        barbering and cosmetology; child care; construction; dance, 
        theatrical, and orchestra productions; disinfecting and pest 
        control; eating and drinking establishments; fishing; 
        hospitals; labor organizations; logging; manufacturing 
        (metals); mining; medical and dental practices; medical 
        laboratories; sanitary services; transportation (local and 
        freight); and warehousing.

``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF TRUSTEES.

    ``(a) Sponsor.--The requirements of this subsection are met with 
respect to an association health plan if the sponsor has met (or is 
deemed under this part to have met) the requirements of section 801(b) 
for a continuous period of not less than 3 years ending with the date 
of the application for certification under this part.
    ``(b) Board of Trustees.--The requirements of this subsection are 
met with respect to an association health plan if the following 
requirements are met:
            ``(1) Fiscal control.--The plan is operated, pursuant to a 
        trust agreement, by a board of trustees which has complete 
        fiscal control over the plan and which is responsible for all 
        operations of the plan.
            ``(2) Rules of operation and financial controls.--The board 
        of trustees has in effect rules of operation and financial 
        controls, based on a 3-year plan of operation, adequate to 
        carry out the terms of the plan and to meet all requirements of 
        this title applicable to the plan.
            ``(3) Rules governing relationship to participating 
        employers and to contractors.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), the members of the board of 
                trustees are individuals selected from individuals who 
                are the owners, officers, directors, or employees of 
                the participating employers or who are partners in the 
                participating employers and actively participate in the 
                business.
                    ``(B) Limitation.--
                            ``(i) General rule.--Except as provided in 
                        clauses (ii) and (iii), no such member is an 
                        owner, officer, director, or employee of, or 
                        partner in, a contract administrator or other 
                        service provider to the plan.
                            ``(ii) Limited exception for providers of 
                        services solely on behalf of the sponsor.--
                        Officers or employees of a sponsor which is a 
                        service provider (other than a contract 
                        administrator) to the plan may be members of 
                        the board if they constitute not more than 25 
                        percent of the membership of the board and they 
                        do not provide services to the plan other than 
                        on behalf of the sponsor.
                            ``(iii) Treatment of providers of medical 
                        care.--In the case of a sponsor which is an 
                        association whose membership consists primarily 
                        of providers of medical care, clause (i) shall 
                        not apply in the case of any service provider 
                        described in subparagraph (A) who is a provider 
                        of medical care under the plan.
                    ``(C) Certain plans excluded.--Subparagraph (A) 
                shall not apply to an association health plan which is 
                in existence on the date of the enactment of the Small 
                Business Access and Choice for Entrepreneurs Act of 
                1999.
                    ``(D) Sole authority.--The board has sole authority 
                under the plan to approve applications for 
                participation in the plan and to contract with a 
                service provider to administer the day-to-day affairs 
                of the plan.
    ``(c) Treatment of Franchise Networks.--In the case of a group 
health plan which is established and maintained by a franchiser for a 
franchise network consisting of its franchisees--
            ``(1) the requirements of subsection (a) and section 
        801(a)(1) shall be deemed met if such requirements would 
        otherwise be met if the franchiser were deemed to be the 
        sponsor referred to in section 801(b), such network were deemed 
        to be an association described in section 801(b), and each 
        franchisee were deemed to be a member (of the association and 
        the sponsor) referred to in section 801(b); and
            ``(2) the requirements of section 804(a)(1) shall be deemed 
        met.
The Secretary may by regulation, through negotiated rulemaking, define 
for purposes of this subsection the terms `franchiser', `franchise 
network', and 'franchisee'.
    ``(d) Certain Collectively Bargained Plans.--
            ``(1) In general.--In the case of a group health plan 
        described in paragraph (2)--
                    ``(A) the requirements of subsection (a) and 
                section 801(a)(1) shall be deemed met;
                    ``(B) the joint board of trustees shall be deemed a 
                board of trustees with respect to which the 
                requirements of subsection (b) are met; and
                    ``(C) the requirements of section 804 shall be 
                deemed met.
            ``(2) Requirements.--A group health plan is described in 
        this paragraph if--
                    ``(A) the plan is a multiemployer plan; or
                    ``(B) the plan is in existence on April 1, 1997, 
                and would be described in section 3(40)(A)(i) but 
                solely for the failure to meet the requirements of 
                section 3(40)(C)(ii).

``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.

    ``(a) Covered Employers and Individuals.--The requirements of this 
subsection are met with respect to an association health plan if, under 
the terms of the plan--
            ``(1) each participating employer must be--
                    ``(A) a member of the sponsor,
                    ``(B) the sponsor, or
                    ``(C) an affiliated member of the sponsor with 
                respect to which the requirements of subsection (b) are 
                met,
        except that, in the case of a sponsor which is a professional 
        association or other individual-based association, if at least 
        one of the officers, directors, or employees of an employer, or 
        at least one of the individuals who are partners in an employer 
        and who actively participates in the business, is a member or 
        such an affiliated member of the sponsor, participating 
        employers may also include such employer; and
            ``(2) all individuals commencing coverage under the plan 
        after certification under this part must be--
                    ``(A) active or retired owners (including self-
                employed individuals), officers, directors, or 
                employees of, or partners in, participating employers; 
                or
                    ``(B) the beneficiaries of individuals described in 
                subparagraph (A).
    ``(b) Coverage of Previously Uninsured Employees.--In the case of 
an association health plan in existence on the date of the enactment of 
the Small Business Access and Choice for Entrepreneurs Act of 1999, an 
affiliated member of the sponsor of the plan may be offered coverage 
under the plan as a participating employer only if--
            ``(1) the affiliated member was an affiliated member on the 
        date of certification under this part; or
            ``(2) during the 12-month period preceding the date of the 
        offering of such coverage, the affiliated member has not 
        maintained or contributed to a group health plan with respect 
        to any of its employees who would otherwise be eligible to 
        participate in such association health plan.
    ``(c) Individual Market Unaffected.--The requirements of this 
subsection are met with respect to an association health plan if, under 
the terms of the plan, no participating employer may provide health 
insurance coverage in the individual market for any employee not 
covered under the plan which is similar to the coverage 
contemporaneously provided to employees of the employer under the plan, 
if such exclusion of the employee from coverage under the plan is based 
on a health status-related factor with respect to the employee and such 
employee would, but for such exclusion on such basis, be eligible for 
coverage under the plan.
    ``(d) Prohibition of Discrimination Against Employers and Employees 
Eligible To Participate.--The requirements of this subsection are met 
with respect to an association health plan if--
            ``(1) under the terms of the plan, all employers meeting 
        the preceding requirements of this section are eligible to 
        qualify as participating employers for all geographically 
        available coverage options, unless, in the case of any such 
        employer, participation or contribution requirements of the 
        type referred to in section 2711 of the Public Health Service 
        Act are not met;
            ``(2) upon request, any employer eligible to participate is 
        furnished information regarding all coverage options available 
        under the plan; and
            ``(3) the applicable requirements of sections 701, 702, and 
        703 are met with respect to the plan.

``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, CONTRIBUTION 
              RATES, AND BENEFIT OPTIONS.

    ``(a) In General.--The requirements of this section are met with 
respect to an association health plan if the following requirements are 
met:
            ``(1) Contents of governing instruments.--The instruments 
        governing the plan include a written instrument, meeting the 
        requirements of an instrument required under section 402(a)(1), 
        which--
                    ``(A) provides that the board of trustees serves as 
                the named fiduciary required for plans under section 
                402(a)(1) and serves in the capacity of a plan 
                administrator (referred to in section 3(16)(A));
                    ``(B) provides that the sponsor of the plan is to 
                serve as plan sponsor (referred to in section 
                3(16)(B)); and
                    ``(C) incorporates the requirements of section 806.
            ``(2) Contribution rates must be nondiscriminatory.--
                    ``(A) The contribution rates for any participating 
                small employer do not vary on the basis of the claims 
                experience of such employer and do not vary on the 
                basis of the type of business or industry in which such 
                employer is engaged.
                    ``(B) Nothing in this title or any other provision 
                of law shall be construed to preclude an association 
                health plan, or a health insurance issuer offering 
                health insurance coverage in connection with an 
                association health plan, from--
                            ``(i) setting contribution rates based on 
                        the claims experience of the plan; or
                            ``(ii) varying contribution rates for small 
                        employers in a State to the extent that such 
                        rates could vary using the same methodology 
                        employed in such State for regulating premium 
                        rates in the small group market with respect to 
                        health insurance coverage offered in connection 
                        with bona fide associations (within the meaning 
                        of section 2791(d)(3) of the Public Health 
                        Service Act),
                subject to the requirements of section 702(b) relating 
                to contribution rates.
            ``(3) Floor for number of covered individuals with respect 
        to certain plans.--If any benefit option under the plan does 
        not consist of health insurance coverage, the plan has as of 
        the beginning of the plan year not fewer than 1,000 
        participants and beneficiaries.
            ``(4) Marketing requirements.--
                    ``(A) In general.--If a benefit option which 
                consists of health insurance coverage is offered under 
                the plan, State-licensed insurance agents shall be used 
                to distribute to small employers coverage which does 
                not consist of health insurance coverage in a manner 
                comparable to the manner in which such agents are used 
                to distribute health insurance coverage.
                    ``(B) State-licensed insurance agents.--For 
                purposes of subparagraph (A), the term `State-licensed 
                insurance agents' means one or more agents who are 
                licensed in a State and are subject to the laws of such 
                State relating to licensure, qualification, testing, 
                examination, and continuing education of persons 
                authorized to offer, sell, or solicit health insurance 
                coverage in such State.
            ``(5) Regulatory requirements.--Such other requirements as 
        the applicable authority determines are necessary to carry out 
        the purposes of this part, which shall be prescribed by the 
        applicable authority by regulation through negotiated 
        rulemaking.
    ``(b) Ability of Association Health Plans To Design Benefit 
Options.--Subject to section 514(d), nothing in this part or any 
provision of State law (as defined in section 514(c)(1)) shall be 
construed to preclude an association health plan, or a health insurance 
issuer offering health insurance coverage in connection with an 
association health plan, from exercising its sole discretion in 
selecting the specific items and services consisting of medical care to 
be included as benefits under such plan or coverage, except (subject to 
section 514) in the case of any law to the extent that it (1) prohibits 
an exclusion of a specific disease from such coverage, or (2) is not 
preempted under section 731(a)(1) with respect to matters governed by 
section 711 or 712.

``SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR SOLVENCY FOR 
              PLANS PROVIDING HEALTH BENEFITS IN ADDITION TO HEALTH 
              INSURANCE COVERAGE.

    ``(a) In General.--The requirements of this section are met with 
respect to an association health plan if--
            ``(1) the benefits under the plan consist solely of health 
        insurance coverage; or
            ``(2) if the plan provides any additional benefit options 
        which do not consist of health insurance coverage, the plan--
                    ``(A) establishes and maintains reserves with 
                respect to such additional benefit options, in amounts 
                recommended by the qualified actuary, consisting of--
                            ``(i) a reserve sufficient for unearned 
                        contributions;
                            ``(ii) a reserve sufficient for benefit 
                        liabilities which have been incurred, which 
                        have not been satisfied, and for which risk of 
                        loss has not yet been transferred, and for 
                        expected administrative costs with respect to 
                        such benefit liabilities;
                            ``(iii) a reserve sufficient for any other 
                        obligations of the plan; and
                            ``(iv) a reserve sufficient for a margin of 
                        error and other fluctuations, taking into 
                        account the specific circumstances of the plan; 
                        and
                    ``(B) establishes and maintains aggregate and 
                specific excess/stop loss insurance and solvency 
                indemnification, with respect to such additional 
                benefit options for which risk of loss has not yet been 
                transferred, as follows:
                            ``(i) The plan shall secure aggregate 
                        excess/stop loss insurance for the plan with an 
                        attachment point which is not greater than 125 
                        percent of expected gross annual claims. The 
                        applicable authority may by regulation, through 
                        negotiated rulemaking, provide for upward 
                        adjustments in the amount of such percentage in 
                        specified circumstances in which the plan 
                        specifically provides for and maintains 
                        reserves in excess of the amounts required 
                        under subparagraph (A).
                            ``(ii) The plan shall secure specific 
                        excess/stop loss insurance for the plan with an 
                        attachment point which is at least equal to an 
                        amount recommended by the plan's qualified 
                        actuary (but not more than $175,000). The 
                        applicable authority may by regulation, through 
                        negotiated rulemaking, provide for adjustments 
                        in the amount of such insurance in specified 
                        circumstances in which the plan specifically 
                        provides for and maintains reserves in excess 
                        of the amounts required under subparagraph (A).
                            ``(iii) The plan shall secure 
                        indemnification insurance for any claims which 
                        the plan is unable to satisfy by reason of a 
                        plan termination.
Any regulations prescribed by the applicable authority pursuant to 
clause (i) or (ii) of subparagraph (B) may allow for such adjustments 
in the required levels of excess/stop loss insurance as the qualified 
actuary may recommend, taking into account the specific circumstances 
of the plan.
    ``(b) Minimum Surplus in Addition to Claims Reserves.--In the case 
of any association health plan described in subsection (a)(2), the 
requirements of this subsection are met if the plan establishes and 
maintains surplus in an amount at least equal to--
            ``(1) $500,000, or
            ``(2) such greater amount (but not greater than $2,000,000) 
        as may be set forth in regulations prescribed by the applicable 
        authority through negotiated rulemaking, based on the level of 
        aggregate and specific excess/stop loss insurance provided with 
        respect to such plan.
    ``(c) Additional Requirements.--In the case of any association 
health plan described in subsection (a)(2), the applicable authority 
may provide such additional requirements relating to reserves and 
excess/stop loss insurance as the applicable authority considers 
appropriate. Such requirements may be provided by regulation, through 
negotiated rulemaking, with respect to any such plan or any class of 
such plans.
    ``(d) Adjustments for Excess/Stop Loss Insurance.--The applicable 
authority may provide for adjustments to the levels of reserves 
otherwise required under subsections (a) and (b) with respect to any 
plan or class of plans to take into account excess/stop loss insurance 
provided with respect to such plan or plans.
    ``(e) Alternative Means of Compliance.--The applicable authority 
may permit an association health plan described in subsection (a)(2) to 
substitute, for all or part of the requirements of this section (except 
subsection (a)(2)(B)(iii)), such security, guarantee, hold-harmless 
arrangement, or other financial arrangement as the applicable authority 
determines to be adequate to enable the plan to fully meet all its 
financial obligations on a timely basis and is otherwise no less 
protective of the interests of participants and beneficiaries than the 
requirements for which it is substituted. The applicable authority may 
take into account, for purposes of this subsection, evidence provided 
by the plan or sponsor which demonstrates an assumption of liability 
with respect to the plan. Such evidence may be in the form of a 
contract of indemnification, lien, bonding, insurance, letter of 
credit, recourse under applicable terms of the plan in the form of 
assessments of participating employers, security, or other financial 
arrangement.
    ``(f) Measures To Ensure Continued Payment of Benefits by Certain 
Plans in Distress.--
            ``(1) Payments by certain plans to association health plan 
        fund.--
                    ``(A) In general.--In the case of an association 
                health plan described in subsection (a)(2), the 
                requirements of this subsection are met if the plan 
                makes payments into the Association Health Plan Fund 
                under this subparagraph when they are due. Such 
                payments shall consist of annual payments in the amount 
                of $5,000, and, in addition to such annual payments, 
                such supplemental payments as the Secretary may 
                determine to be necessary under paragraph (2). Payments 
                under this paragraph are payable to the Fund at the 
                time determined by the Secretary. Initial payments are 
                due in advance of certification under this part. 
                Payments shall continue to accrue until a plan's assets 
                are distributed pursuant to a termination procedure.
                    ``(B) Penalties for failure to make payments.--If 
                any payment is not made by a plan when it is due, a 
                late payment charge of not more than 100 percent of the 
                payment which was not timely paid shall be payable by 
                the plan to the Fund.
                    ``(C) Continued duty of the secretary.--The 
                Secretary shall not cease to carry out the provisions 
                of paragraph (2) on account of the failure of a plan to 
                pay any payment when due.
            ``(2) Payments by secretary to continue excess/stop loss 
        insurance coverage and indemnification insurance coverage for 
        certain plans.--In any case in which the applicable authority 
        determines that there is, or that there is reason to believe 
        that there will be: (A) a failure to take necessary corrective 
        actions under section 809(a) with respect to an association 
        health plan described in subsection (a)(2); or (B) a 
        termination of such a plan under section 809(b) or 810(b)(8) 
        (and, if the applicable authority is not the Secretary, 
        certifies such determination to the Secretary), the Secretary 
        shall determine the amounts necessary to make payments to an 
        insurer (designated by the Secretary) to maintain in force 
        excess/stop loss insurance coverage or indemnification 
        insurance coverage for such plan, if the Secretary determines 
        that there is a reasonable expectation that, without such 
        payments, claims would not be satisfied by reason of 
        termination of such coverage. The Secretary shall, to the 
        extent provided in advance in appropriation Acts, pay such 
        amounts so determined to the insurer designated by the 
        Secretary.
            ``(3) Association health plan fund.--
                    ``(A) In general.--There is established on the 
                books of the Treasury a fund to be known as the 
                `Association Health Plan Fund'. The Fund shall be 
                available for making payments pursuant to paragraph 
                (2). The Fund shall be credited with payments received 
                pursuant to paragraph (1)(A), penalties received 
                pursuant to paragraph (1)(B); and earnings on 
                investments of amounts of the Fund under subparagraph 
                (B).
                    ``(B) Investment.--Whenever the Secretary 
                determines that the moneys of the fund are in excess of 
                current needs, the Secretary may request the investment 
                of such amounts as the Secretary determines advisable 
                by the Secretary of the Treasury in obligations issued 
                or guaranteed by the United States.
    ``(g) Excess/Stop Loss Insurance.--For purposes of this section--
            ``(1) Aggregate excess/stop loss insurance.--The term 
        `aggregate excess/stop loss insurance' means, in connection 
        with an association health plan, a contract--
            ``(A) under which an insurer (meeting such minimum 
        standards as the applicable authority may prescribe by 
        regulation through negotiated rulemaking) provides for payment 
        to the plan with respect to aggregate claims under the plan in 
        excess of an amount or amounts specified in such contract;
            ``(B) which is guaranteed renewable; and
            ``(C) which allows for payment of premiums by any third 
        party on behalf of the insured plan.
            ``(2) Specific excess/stop loss insurance.--The term 
        `specific excess/stop loss insurance' means, in connection with 
        an association health plan, a contract--
                    ``(A) under which an insurer (meeting such minimum 
                standards as the applicable authority may prescribe by 
                regulation through negotiated rulemaking) provides for 
                payment to the plan with respect to claims under the 
                plan in connection with a covered individual in excess 
                of an amount or amounts specified in such contract in 
                connection with such covered individual;
                    ``(B) which is guaranteed renewable; and
                    ``(C) which allows for payment of premiums by any 
                third party on behalf of the insured plan.
    ``(h) Indemnification Insurance.--For purposes of this section, the 
term `indemnification insurance' means, in connection with an 
association health plan, a contract--
            ``(1) under which an insurer (meeting such minimum 
        standards as the applicable authority may prescribe through 
        negotiated rulemaking) provides for payment to the plan with 
        respect to claims under the plan which the plan is unable to 
        satisfy by reason of a termination pursuant to section 809(b) 
        (relating to mandatory termination);
            ``(2) which is guaranteed renewable and noncancellable for 
        any reason (except as the applicable authority may prescribe by 
        regulation through negotiated rulemaking); and
            ``(3) which allows for payment of premiums by any third 
        party on behalf of the insured plan.
    ``(i) Reserves.--For purposes of this section, the term `reserves' 
means, in connection with an association health plan, plan assets which 
meet the fiduciary standards under part 4 and such additional 
requirements regarding liquidity as the applicable authority may 
prescribe through negotiated rulemaking.
    ``(j) Solvency Standards Working Group.--
            ``(1) In general.--Within 90 days after the date of the 
        enactment of the Small Business Access and Choice for 
        Entrepreneurs Act of 1999, the applicable authority shall 
        establish a Solvency Standards Working Group. In prescribing 
        the initial regulations under this section, the applicable 
        authority shall take into account the recommendations of such 
        Working Group.
            ``(2) Membership.--The Working Group shall consist of not 
        more than 15 members appointed by the applicable authority. The 
        applicable authority shall include among persons invited to 
        membership on the Working Group at least one of each of the 
        following:
                    ``(A) a representative of the National Association 
                of Insurance Commissioners;
                    ``(B) a representative of the American Academy of 
                Actuaries;
                    ``(C) a representative of the State governments, or 
                their interests;
                    ``(D) a representative of existing self-insured 
                arrangements, or their interests;
                    ``(E) a representative of associations of the type 
                referred to in section 801(b)(1), or their interests; 
                and
                    ``(F) a representative of multiemployer plans that 
                are group health plans, or their interests.

``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED REQUIREMENTS.

    ``(a) Filing Fee.--Under the procedure prescribed pursuant to 
section 802(a), an association health plan shall pay to the applicable 
authority at the time of filing an application for certification under 
this part a filing fee in the amount of $5,000, which shall be 
available in the case of the Secretary, to the extent provided in 
appropriation Acts, for the sole purpose of administering the 
certification procedures applicable with respect to association health 
plans.
    ``(b) Information To Be Included in Application for 
Certification.--An application for certification under this part meets 
the requirements of this section only if it includes, in a manner and 
form which shall be prescribed by the applicable authority through 
negotiated rulemaking, at least the following information:
            ``(1) Identifying information.--The names and addresses 
        of--
                    ``(A) the sponsor; and
                    ``(B) the members of the board of trustees of the 
                plan.
            ``(2) States in which plan intends to do business.--The 
        States in which participants and beneficiaries under the plan 
        are to be located and the number of them expected to be located 
        in each such State.
            ``(3) Bonding requirements.--Evidence provided by the board 
        of trustees that the bonding requirements of section 412 will 
        be met as of the date of the application or (if later) 
        commencement of operations.
            ``(4) Plan documents.--A copy of the documents governing 
        the plan (including any bylaws and trust agreements), the 
        summary plan description, and other material describing the 
        benefits that will be provided to participants and 
        beneficiaries under the plan.
            ``(5) Agreements with service providers.--A copy of any 
        agreements between the plan and contract administrators and 
        other service providers.
            ``(6) Funding report.--In the case of association health 
        plans providing benefits options in addition to health 
        insurance coverage, a report setting forth information with 
        respect to such additional benefit options determined as of a 
        date within the 120-day period ending with the date of the 
        application, including the following:
                    ``(A) Reserves.--A statement, certified by the 
                board of trustees of the plan, and a statement of 
                actuarial opinion, signed by a qualified actuary, that 
                all applicable requirements of section 806 are or will 
                be met in accordance with regulations which the 
                applicable authority shall prescribe through negotiated 
                rulemaking.
                    ``(B) Adequacy of contribution rates.--A statement 
                of actuarial opinion, signed by a qualified actuary, 
                which sets forth a description of the extent to which 
                contribution rates are adequate to provide for the 
                payment of all obligations and the maintenance of 
                required reserves under the plan for the 12-month 
                period beginning with such date within such 120-day 
                period, taking into account the expected coverage and 
                experience of the plan. If the contribution rates are 
                not fully adequate, the statement of actuarial opinion 
                shall indicate the extent to which the rates are 
                inadequate and the changes needed to ensure adequacy.
                    ``(C) Current and projected value of assets and 
                liabilities.--A statement of actuarial opinion signed 
                by a qualified actuary, which sets forth the current 
                value of the assets and liabilities accumulated under 
                the plan and a projection of the assets, liabilities, 
                income, and expenses of the plan for the 12-month 
                period referred to in subparagraph (B). The income 
                statement shall identify separately the plan's 
                administrative expenses and claims.
                    ``(D) Costs of coverage to be charged and other 
                expenses.--A statement of the costs of coverage to be 
                charged, including an itemization of amounts for 
                administration, reserves, and other expenses associated 
                with the operation of the plan.
                    ``(E) Other information.--Any other information as 
                may be determined by the applicable authority, by 
                regulation through negotiated rulemaking, as necessary 
                to carry out the purposes of this part.
    ``(c) Filing Notice of Certification With States.--A certification 
granted under this part to an association health plan shall not be 
effective unless written notice of such certification is filed with the 
applicable State authority of each State in which at least 25 percent 
of the participants and beneficiaries under the plan are located. For 
purposes of this subsection, an individual shall be considered to be 
located in the State in which a known address of such individual is 
located or in which such individual is employed.
    ``(d) Notice of Material Changes.--In the case of any association 
health plan certified under this part, descriptions of material changes 
in any information which was required to be submitted with the 
application for the certification under this part shall be filed in 
such form and manner as shall be prescribed by the applicable authority 
by regulation through negotiated rulemaking. The applicable authority 
may require by regulation, through negotiated rulemaking, prior notice 
of material changes with respect to specified matters which might serve 
as the basis for suspension or revocation of the certification.
    ``(e) Reporting Requirements for Certain Association Health 
Plans.--An association health plan certified under this part which 
provides benefit options in addition to health insurance coverage for 
such plan year shall meet the requirements of section 103 by filing an 
annual report under such section which shall include information 
described in subsection (b)(6) with respect to the plan year and, 
notwithstanding section 104(a)(1)(A), shall be filed with the 
applicable authority not later than 90 days after the close of the plan 
year (or on such later date as may be prescribed by the applicable 
authority). The applicable authority may require by regulation through 
negotiated rulemaking such interim reports as it considers appropriate.
    ``(f) Engagement of Qualified Actuary.--The board of trustees of 
each association health plan which provides benefits options in 
addition to health insurance coverage and which is applying for 
certification under this part or is certified under this part shall 
engage, on behalf of all participants and beneficiaries, a qualified 
actuary who shall be responsible for the preparation of the materials 
comprising information necessary to be submitted by a qualified actuary 
under this part. The qualified actuary shall utilize such assumptions 
and techniques as are necessary to enable such actuary to form an 
opinion as to whether the contents of the matters reported under this 
part--
            ``(1) are in the aggregate reasonably related to the 
        experience of the plan and to reasonable expectations; and
            ``(2) represent such actuary's best estimate of anticipated 
        experience under the plan.
The opinion by the qualified actuary shall be made with respect to, and 
shall be made a part of, the annual report.

``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

    ``Except as provided in section 809(b), an association health plan 
which is or has been certified under this part may terminate (upon or 
at any time after cessation of accruals in benefit liabilities) only if 
the board of trustees--
            ``(1) not less than 60 days before the proposed termination 
        date, provides to the participants and beneficiaries a written 
        notice of intent to terminate stating that such termination is 
        intended and the proposed termination date;
            ``(2) develops a plan for winding up the affairs of the 
        plan in connection with such termination in a manner which will 
        result in timely payment of all benefits for which the plan is 
        obligated; and
            ``(3) submits such plan in writing to the applicable 
        authority.
Actions required under this section shall be taken in such form and 
manner as may be prescribed by the applicable authority by regulation 
through negotiated rulemaking.

``SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.

    ``(a) Actions To Avoid Depletion of Reserves.--An association 
health plan which is certified under this part and which provides 
benefits other than health insurance coverage shall continue to meet 
the requirements of section 806, irrespective of whether such 
certification continues in effect. The board of trustees of such plan 
shall determine quarterly whether the requirements of section 806 are 
met. In any case in which the board determines that there is reason to 
believe that there is or will be a failure to meet such requirements, 
or the applicable authority makes such a determination and so notifies 
the board, the board shall immediately notify the qualified actuary 
engaged by the plan, and such actuary shall, not later than the end of 
the next following month, make such recommendations to the board for 
corrective action as the actuary determines necessary to ensure 
compliance with section 806. Not later than 30 days after receiving 
from the actuary recommendations for corrective actions, the board 
shall notify the applicable authority (in such form and manner as the 
applicable authority may prescribe by regulation through negotiated 
rulemaking) of such recommendations of the actuary for corrective 
action, together with a description of the actions (if any) that the 
board has taken or plans to take in response to such recommendations. 
The board shall thereafter report to the applicable authority, in such 
form and frequency as the applicable authority may specify to the 
board, regarding corrective action taken by the board until the 
requirements of section 806 are met.
    ``(b) Mandatory Termination.--In any case in which--
            ``(1) the applicable authority has been notified under 
        subsection (a) of a failure of an association health plan which 
        is or has been certified under this part and is described in 
        section 806(a)(2) to meet the requirements of section 806 and 
        has not been notified by the board of trustees of the plan that 
        corrective action has restored compliance with such 
        requirements; and
            ``(2) the applicable authority determines that there is a 
        reasonable expectation that the plan will continue to fail to 
        meet the requirements of section 806,
the board of trustees of the plan shall, at the direction of the 
applicable authority, terminate the plan and, in the course of the 
termination, take such actions as the applicable authority may require, 
including satisfying any claims referred to in section 
806(a)(2)(B)(iii) and recovering for the plan any liability under 
subsection (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure 
that the affairs of the plan will be, to the maximum extent possible, 
wound up in a manner which will result in timely provision of all 
benefits for which the plan is obligated.

``SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT ASSOCIATION 
              HEALTH PLANS PROVIDING HEALTH BENEFITS IN ADDITION TO 
              HEALTH INSURANCE COVERAGE.

    ``(a) Appointment of Secretary as Trustee for Insolvent Plans.--
Whenever the Secretary determines that an association health plan which 
is or has been certified under this part and which is described in 
section 806(a)(2) will be unable to provide benefits when due or is 
otherwise in a financially hazardous condition, as shall be defined by 
the Secretary by regulation through negotiated rulemaking, the 
Secretary shall, upon notice to the plan, apply to the appropriate 
United States district court for appointment of the Secretary as 
trustee to administer the plan for the duration of the insolvency. The 
plan may appear as a party and other interested persons may intervene 
in the proceedings at the discretion of the court. The court shall 
appoint such Secretary trustee if the court determines that the 
trusteeship is necessary to protect the interests of the participants 
and beneficiaries or providers of medical care or to avoid any 
unreasonable deterioration of the financial condition of the plan. The 
trusteeship of such Secretary shall continue until the conditions 
described in the first sentence of this subsection are remedied or the 
plan is terminated.
    ``(b) Powers as Trustee.--The Secretary, upon appointment as 
trustee under subsection (a), shall have the power--
            ``(1) to do any act authorized by the plan, this title, or 
        other applicable provisions of law to be done by the plan 
        administrator or any trustee of the plan;
            ``(2) to require the transfer of all (or any part) of the 
        assets and records of the plan to the Secretary as trustee;
            ``(3) to invest any assets of the plan which the Secretary 
        holds in accordance with the provisions of the plan, 
        regulations prescribed by the Secretary through negotiated 
        rulemaking, and applicable provisions of law;
            ``(4) to require the sponsor, the plan administrator, any 
        participating employer, and any employee organization 
        representing plan participants to furnish any information with 
        respect to the plan which the Secretary as trustee may 
        reasonably need in order to administer the plan;
            ``(5) to collect for the plan any amounts due the plan and 
        to recover reasonable expenses of the trusteeship;
            ``(6) to commence, prosecute, or defend on behalf of the 
        plan any suit or proceeding involving the plan;
            ``(7) to issue, publish, or file such notices, statements, 
        and reports as may be required by the Secretary by regulation 
        through negotiated rulemaking or required by any order of the 
        court;
            ``(8) to terminate the plan (or provide for its termination 
        accordance with section 809(b)) and liquidate the plan assets, 
        to restore the plan to the responsibility of the sponsor, or to 
        continue the trusteeship;
            ``(9) to provide for the enrollment of plan participants 
        and beneficiaries under appropriate coverage options; and
            ``(10) to do such other acts as may be necessary to comply 
        with this title or any order of the court and to protect the 
        interests of plan participants and beneficiaries and providers 
        of medical care.
    ``(c) Notice of Appointment.--As soon as practicable after the 
Secretary's appointment as trustee, the Secretary shall give notice of 
such appointment to--
            ``(1) the sponsor and plan administrator;
            ``(2) each participant;
            ``(3) each participating employer; and
            ``(4) if applicable, each employee organization which, for 
        purposes of collective bargaining, represents plan 
        participants.
    ``(d) Additional Duties.--Except to the extent inconsistent with 
the provisions of this title, or as may be otherwise ordered by the 
court, the Secretary, upon appointment as trustee under this section, 
shall be subject to the same duties as those of a trustee under section 
704 of title 11, United States Code, and shall have the duties of a 
fiduciary for purposes of this title.
    ``(e) Other Proceedings.--An application by the Secretary under 
this subsection may be filed notwithstanding the pendency in the same 
or any other court of any bankruptcy, mortgage foreclosure, or equity 
receivership proceeding, or any proceeding to reorganize, conserve, or 
liquidate such plan or its property, or any proceeding to enforce a 
lien against property of the plan.
    ``(f) Jurisdiction of Court.--
            ``(1) In general.--Upon the filing of an application for 
        the appointment as trustee or the issuance of a decree under 
        this section, the court to which the application is made shall 
        have exclusive jurisdiction of the plan involved and its 
        property wherever located with the powers, to the extent 
        consistent with the purposes of this section, of a court of the 
        United States having jurisdiction over cases under chapter 11 
        of title 11, United States Code. Pending an adjudication under 
        this section such court shall stay, and upon appointment by it 
        of the Secretary as trustee, such court shall continue the stay 
        of, any pending mortgage foreclosure, equity receivership, or 
        other proceeding to reorganize, conserve, or liquidate the 
        plan, the sponsor, or property of such plan or sponsor, and any 
        other suit against any receiver, conservator, or trustee of the 
        plan, the sponsor, or property of the plan or sponsor. Pending 
        such adjudication and upon the appointment by it of the 
        Secretary as trustee, the court may stay any proceeding to 
        enforce a lien against property of the plan or the sponsor or 
        any other suit against the plan or the sponsor.
            ``(2) Venue.--An action under this section may be brought 
        in the judicial district where the sponsor or the plan 
        administrator resides or does business or where any asset of 
        the plan is situated. A district court in which such action is 
        brought may issue process with respect to such action in any 
        other judicial district.
    ``(g) Personnel.--In accordance with regulations which shall be 
prescribed by the Secretary through negotiated rulemaking, the 
Secretary shall appoint, retain, and compensate accountants, actuaries, 
and other professional service personnel as may be necessary in 
connection with the Secretary's service as trustee under this section.

``SEC. 811. STATE ASSESSMENT AUTHORITY.

    ``(a) In General.--Notwithstanding section 514, a State may impose 
by law a contribution tax on an association health plan described in 
section 806(a)(2), if the plan commenced operations in such State after 
the date of the enactment of the Small Business Access and Choice for 
Entrepreneurs Act of 1999.
    ``(b) Contribution Tax.--For purposes of this section, the term 
`contribution tax' imposed by a State on an association health plan 
means any tax imposed by such State if--
            ``(1) such tax is computed by applying a rate to the amount 
        of premiums or contributions, with respect to individuals 
        covered under the plan who are residents of such State, which 
        are received by the plan from participating employers located 
        in such State or from such individuals;
            ``(2) the rate of such tax does not exceed the rate of any 
        tax imposed by such State on premiums or contributions received 
        by insurers or health maintenance organizations for health 
        insurance coverage offered in such State in connection with a 
        group health plan;
            ``(3) such tax is otherwise nondiscriminatory; and
            ``(4) the amount of any such tax assessed on the plan is 
        reduced by the amount of any tax or assessment otherwise 
        imposed by the State on premiums, contributions, or both 
        received by insurers or health maintenance organizations for 
        health insurance coverage, aggregate excess/stop loss insurance 
        (as defined in section 806(g)(1)), specific excess/stop loss 
        insurance (as defined in section 806(g)(2)), other insurance 
        related to the provision of medical care under the plan, or any 
        combination thereof provided by such insurers or health 
        maintenance organizations in such State in connection with such 
        plan.

``SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION.

    ``(a) Definitions.--For purposes of this part--
            ``(1) Group health plan.--The term `group health plan' has 
        the meaning provided in section 733(a)(1) (after applying 
        subsection (b) of this section).
            ``(2) Medical care.--The term `medical care' has the 
        meaning provided in section 733(a)(2).
            ``(3) Health insurance coverage.--The term `health 
        insurance coverage' has the meaning provided in section 
        733(b)(1).
            ``(4) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning provided in section 733(b)(2).
            ``(5) Applicable authority.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `applicable authority' 
                means, in connection with an association health plan--
                            ``(i) the State recognized pursuant to 
                        subsection (c) of section 506 as the State to 
                        which authority has been delegated in 
                        connection with such plan; or
                            ``(ii) if there if no State referred to in 
                        clause (i), the Secretary.
                    ``(B) Exceptions.--
                            ``(i) Joint authorities.--Where such term 
                        appears in section 808(3), section 807(e) (in 
                        the first instance), section 809(a) (in the 
                        second instance), section 809(a) (in the fourth 
                        instance), and section 809(b)(1), such term 
                        means, in connection with an association health 
                        plan, the Secretary and the State referred to 
                        in subparagraph (A)(i) (if any) in connection 
                        with such plan.
                            ``(ii) Regulatory authorities.--Where such 
                        term appears in section 802(a) (in the first 
                        instance), section 802(d), section 802(e), 
                        section 803(d), section 805(a)(5), section 
                        806(a)(2), section 806(b), section 806(c), 
                        section 806(d), paragraphs (1)(A) and (2)(A) of 
                        section 806(g), section 806(h), section 806(i), 
                        section 806(j), section 807(a) (in the second 
                        instance), section 807(b), section 807(d), 
                        section 807(e) (in the second instance), 
                        section 808 (in the matter after paragraph 
                        (3)), and section 809(a) (in the third 
                        instance), such term means, in connection with 
                        an association health plan, the Secretary.
            ``(6) Health status-related factor.--The term `health 
        status-related factor' has the meaning provided in section 
        733(d)(2).
            ``(7) Individual market.--
                    ``(A) In general.--The term `individual market' 
                means the market for health insurance coverage offered 
                to individuals other than in connection with a group 
                health plan.
                    ``(B) Treatment of very small groups.--
                            ``(i) In general.--Subject to clause (ii), 
                        such term includes coverage offered in 
                        connection with a group health plan that has 
                        fewer than 2 participants as current employees 
                        or participants described in section 732(d)(3) 
                        on the first day of the plan year.
                            ``(ii) State exception.--Clause (i) shall 
                        not apply in the case of health insurance 
                        coverage offered in a State if such State 
                        regulates the coverage described in such clause 
                        in the same manner and to the same extent as 
                        coverage in the small group market (as defined 
                        in section 2791(e)(5) of the Public Health 
                        Service Act) is regulated by such State.
            ``(8) Participating employer.--The term `participating 
        employer' means, in connection with an association health plan, 
        any employer, if any individual who is an employee of such 
        employer, a partner in such employer, or a self-employed 
        individual who is such employer (or any dependent, as defined 
        under the terms of the plan, of such individual) is or was 
        covered under such plan in connection with the status of such 
        individual as such an employee, partner, or self-employed 
        individual in relation to the plan.
            ``(9) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health insurance 
        issuer in a State, the State insurance commissioner or official 
        or officials designated by the State to enforce the 
        requirements of title XXVII of the Public Health Service Act 
        for the State involved with respect to such issuer.
            ``(10) Qualified actuary.--The term `qualified actuary' 
        means an individual who is a member of the American Academy of 
        Actuaries or meets such reasonable standards and qualifications 
        as the Secretary may provide by regulation through negotiated 
        rulemaking.
            ``(11) Affiliated member<plus-minus><plus-minus>.--The term 
        `affiliated member' means, in connection with a sponsor--
                    ``(A) a person who is otherwise eligible to be a 
                member of the sponsor but who elects an affiliated 
                status with the sponsor,
                    ``(B) in the case of a sponsor with members which 
                consist of associations, a person who is a member of 
                any such association and elects an affiliated status 
                with the sponsor, or
                    ``(C) in the case of an association health plan in 
                existence on the date of the enactment of the Small 
                Business Access and Choice for Entrepreneurs Act of 
                1999, a person eligible to be a member of the sponsor 
                or one of its member associations.
            ``(12) Large employer.--The term `large employer' means, in 
        connection with a group health plan with respect to a plan 
        year, an employer who employed an average of at least 51 
        employees on business days during the preceding calendar year 
        and who employs at least 2 employees on the first day of the 
        plan year.
            ``(13) Small employer.--The term `small employer' means, in 
        connection with a group health plan with respect to a plan 
        year, an employer who is not a large employer.
    ``(b) Rules of Construction.--
            ``(1) Employers and employees.--For purposes of determining 
        whether a plan, fund, or program is an employee welfare benefit 
        plan which is an association health plan, and for purposes of 
        applying this title in connection with such plan, fund, or 
        program so determined to be such an employee welfare benefit 
        plan--
                    ``(A) in the case of a partnership, the term 
                `employer' (as defined in section (3)(5)) includes the 
                partnership in relation to the partners, and the term 
                `employee' (as defined in section (3)(6)) includes any 
                partner in relation to the partnership; and
                    ``(B) in the case of a self-employed individual, 
                the term `employer' (as defined in section 3(5)) and 
                the term `employee' (as defined in section 3(6)) shall 
                include such individual.
            ``(2) Plans, funds, and programs treated as employee 
        welfare benefit plans.--In the case of any plan, fund, or 
        program which was established or is maintained for the purpose 
        of providing medical care (through the purchase of insurance or 
        otherwise) for employees (or their dependents) covered 
        thereunder and which demonstrates to the Secretary that all 
        requirements for certification under this part would be met 
        with respect to such plan, fund, or program if such plan, fund, 
        or program were a group health plan, such plan, fund, or 
        program shall be treated for purposes of this title as an 
        employee welfare benefit plan on and after the date of such 
        demonstration.''.
    (b) Conforming Amendments to Preemption Rules.--
            (1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is 
        amended by adding at the end the following new subparagraph:
    ``(E) The preceding subparagraphs of this paragraph do not apply 
with respect to any State law in the case of an association health plan 
which is certified under part 8.''.
            (2) Section 514 of such Act (29 U.S.C. 1144) is amended--
                    (A) in subsection (b)(4), by striking ``Subsection 
                (a)'' and inserting ``Subsections (a) and (d)'';
                    (B) in subsection (b)(5), by striking ``subsection 
                (a)'' in subparagraph (A) and inserting ``subsection 
                (a) of this section and subsections (a)(2)(B) and (b) 
                of section 805'', and by striking ``subsection (a)'' in 
                subparagraph (B) and inserting ``subsection (a) of this 
                section or subsection (a)(2)(B) or (b) of section 
                805'';
                    (C) by redesignating subsection (d) as subsection 
                (e); and
                    (D) by inserting after subsection (c) the following 
                new subsection:
    ``(d)(1) Except as provided in subsection (b)(4), the provisions of 
this title shall supersede any and all State laws insofar as they may 
now or hereafter preclude, or have the effect of precluding, a health 
insurance issuer from offering health insurance coverage in connection 
with an association health plan which is certified under part 8.
    ``(2) Except as provided in paragraphs (4) and (5) of subsection 
(b) of this section--
            ``(A) In any case in which health insurance coverage of any 
        policy type is offered under an association health plan 
        certified under part 8 to a participating employer operating in 
        such State, the provisions of this title shall supersede any 
        and all laws of such State insofar as they may preclude a 
        health insurance issuer from offering health insurance coverage 
        of the same policy type to other employers operating in the 
        State which are eligible for coverage under such association 
        health plan, whether or not such other employers are 
        participating employers in such plan.
            ``(B) In any case in which health insurance coverage of any 
        policy type is offered under an association health plan in a 
        State and the filing, with the applicable State authority, of 
        the policy form in connection with such policy type is approved 
        by such State authority, the provisions of this title shall 
        supersede any and all laws of any other State in which health 
        insurance coverage of such type is offered, insofar as they may 
        preclude, upon the filing in the same form and manner of such 
        policy form with the applicable State authority in such other 
        State, the approval of the filing in such other State.
    ``(3) For additional provisions relating to association health 
plans, see subsections (a)(2)(B) and (b) of section 805.
    ``(4) For purposes of this subsection, the term `association health 
plan' has the meaning provided in section 801(a), and the terms `health 
insurance coverage', `participating employer', and `health insurance 
issuer' have the meanings provided such terms in section 811, 
respectively.''.
            (3) Section 514(b)(6)(A) of such Act (29 U.S.C. 
        1144(b)(6)(A)) is amended--
                    (A) in clause (i)(II), by striking ``and'' at the 
                end;
                    (B) in clause (ii), by inserting ``and which does 
                not provide medical care (within the meaning of section 
                733(a)(2)),'' after ``arrangement,'', and by striking 
                ``title.'' and inserting ``title, and''; and
                    (C) by adding at the end the following new clause:
            ``(iii) subject to subparagraph (E), in the case of any 
        other employee welfare benefit plan which is a multiple 
        employer welfare arrangement and which provides medical care 
        (within the meaning of section 733(a)(2)), any law of any State 
        which regulates insurance may apply.''.
            (4) Section 514(e) of such Act (as redesignated by 
        paragraph (2)(C)) is amended--
                    (A) by striking ``Nothing'' and inserting ``(1) 
                Except as provided in paragraph (2), nothing''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(2) Nothing in any other provision of law enacted on or after the 
date of the enactment of the Small Business Access and Choice for 
Entrepreneurs Act of 1999 shall be construed to alter, amend, modify, 
invalidate, impair, or supersede any provision of this title, except by 
specific cross-reference to the affected section.''.
    (c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C. 
102(16)(B)) is amended by adding at the end the following new sentence: 
``Such term also includes a person serving as the sponsor of an 
association health plan under part 8.''.
    (d) Disclosure of Solvency Protections Related to Self-Insured and 
Fully Insured Options Under Association Health Plans.--Section 102(b) 
of such Act (29 U.S.C. 102(b)) is amended by adding at the end the 
following: ``An association health plan shall include in its summary 
plan description, in connection with each benefit option, a description 
of the form of solvency or guarantee fund protection secured pursuant 
to this Act or applicable State law, if any.''.
    (e) Savings Clause.--Section 731(c) of such Act is amended by 
inserting ``or part 8'' after ``this part''.
    (f) Report to the Congress Regarding Certification of Self-Insured 
Association Health Plans.--Not later than January 1, 2004, the 
Secretary of Labor shall report to the Committee on Education and the 
Workforce of the House of Representatives and the Committee on Health, 
Education, Labor, and Pensions of the Senate the effect association 
health plans have had, if any, on reducing the number of uninsured 
individuals.
    (g) Clerical Amendment.--The table of contents in section 1 of the 
Employee Retirement Income Security Act of 1974 is amended by inserting 
after the item relating to section 734 the following new items:

           ``Part 8--Rules Governing Association Health Plans

``Sec. 801. Association health plans.
``Sec. 802. Certification of association health plans.
``Sec. 803. Requirements relating to sponsors and boards of trustees.
``Sec. 804. Participation and coverage requirements.
``Sec. 805. Other requirements relating to plan documents, contribution 
                            rates, and benefit options.
``Sec. 806. Maintenance of reserves and provisions for solvency for 
                            plans providing health benefits in addition 
                            to health insurance coverage.
``Sec. 807. Requirements for application and related requirements.
``Sec. 808. Notice requirements for voluntary termination.
``Sec. 809. Corrective actions and mandatory termination.
``Sec. 810. Trusteeship by the Secretary of insolvent association 
                            health plans providing health benefits in 
                            addition to health insurance coverage.
``Sec. 811. State assessment authority.
``Sec. 812. Definitions and rules of construction.''.

SEC. 702. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER ARRANGEMENTS.

    Section 3(40)(B) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1002(40)(B)) is amended--
            (1) in clause (i), by inserting ``for any plan year of any 
        such plan, or any fiscal year of any such other arrangement;'' 
        after ``single employer'', and by inserting ``during such year 
        or at any time during the preceding 1-year period'' after 
        ``control group'';
            (2) in clause (iii)--
                    (A) by striking ``common control shall not be based 
                on an interest of less than 25 percent'' and inserting 
                ``an interest of greater than 25 percent may not be 
                required as the minimum interest necessary for common 
                control''; and
                    (B) by striking ``similar to'' and inserting 
                ``consistent and coextensive with'';
            (3) by redesignating clauses (iv) and (v) as clauses (v) 
        and (vi), respectively; and
            (4) by inserting after clause (iii) the following new 
        clause:
            ``(iv) in determining, after the application of clause (i), 
        whether benefits are provided to employees of two or more 
        employers, the arrangement shall be treated as having only one 
        participating employer if, after the application of clause (i), 
        the number of individuals who are employees and former 
        employees of any one participating employer and who are covered 
        under the arrangement is greater than 75 percent of the 
        aggregate number of all individuals who are employees or former 
        employees of participating employers and who are covered under 
        the arrangement;''.

SEC. 703. CLARIFICATION OF TREATMENT OF CERTAIN COLLECTIVELY BARGAINED 
              ARRANGEMENTS.

    (a) In General.--Section 3(40)(A)(i) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1002(40)(A)(i)) is amended to 
read as follows:
            ``(i)(I) under or pursuant to one or more collective 
        bargaining agreements which are reached pursuant to collective 
        bargaining described in section 8(d) of the National Labor 
        Relations Act (29 U.S.C. 158(d)) or paragraph Fourth of section 
        2 of the Railway Labor Act (45 U.S.C. 152, paragraph Fourth) or 
        which are reached pursuant to labor-management negotiations 
        under similar provisions of State public employee relations 
        laws, and (II) in accordance with subparagraphs (C), (D), and 
        (E);''.
    (b) Limitations.--Section 3(40) of such Act (29 U.S.C. 1002(40)) is 
amended by adding at the end the following new subparagraphs:
    ``(C) For purposes of subparagraph (A)(i)(II), a plan or other 
arrangement shall be treated as established or maintained in accordance 
with this subparagraph only if the following requirements are met:
            ``(i) The plan or other arrangement, and the employee 
        organization or any other entity sponsoring the plan or other 
        arrangement, do not--
                    ``(I) utilize the services of any licensed 
                insurance agent or broker for soliciting or enrolling 
                employers or individuals as participating employers or 
                covered individuals under the plan or other 
                arrangement; or
                    ``(II) pay any type of compensation to a person, 
                other than a full time employee of the employee 
                organization (or a member of the organization to the 
                extent provided in regulations prescribed by the 
                Secretary through negotiated rulemaking), that is 
                related either to the volume or number of employers or 
                individuals solicited or enrolled as participating 
                employers or covered individuals under the plan or 
                other arrangement, or to the dollar amount or size of 
                the contributions made by participating employers or 
                covered individuals to the plan or other arrangement;
        except to the extent that the services used by the plan, 
        arrangement, organization, or other entity consist solely of 
        preparation of documents necessary for compliance with the 
        reporting and disclosure requirements of part 1 or 
        administrative, investment, or consulting services unrelated to 
        solicitation or enrollment of covered individuals.
            ``(ii) As of the end of the preceding plan year, the number 
        of covered individuals under the plan or other arrangement who 
        are neither--
                    ``(I) employed within a bargaining unit covered by 
                any of the collective bargaining agreements with a 
                participating employer (nor covered on the basis of an 
                individual's employment in such a bargaining unit); nor
                    ``(II) present employees (or former employees who 
                were covered while employed) of the sponsoring employee 
                organization, of an employer who is or was a party to 
                any of the collective bargaining agreements, or of the 
                plan or other arrangement or a related plan or 
                arrangement (nor covered on the basis of such present 
                or former employment);
        does not exceed 15 percent of the total number of individuals 
        who are covered under the plan or arrangement and who are 
        present or former employees who are or were covered under the 
        plan or arrangement pursuant to a collective bargaining 
        agreement with a participating employer. The requirements of 
        the preceding provisions of this clause shall be treated as 
        satisfied if, as of the end of the preceding plan year, such 
        covered individuals are comprised solely of individuals who 
        were covered individuals under the plan or other arrangement as 
        of the date of the enactment of the Small Business Access and 
        Choice for Entrepreneurs Act of 1999 and, as of the end of the 
        preceding plan year, the number of such covered individuals 
        does not exceed 25 percent of the total number of present and 
        former employees enrolled under the plan or other arrangement.
            ``(iii) The employee organization or other entity 
        sponsoring the plan or other arrangement certifies to the 
        Secretary each year, in a form and manner which shall be 
        prescribed by the Secretary through negotiated rulemaking that 
        the plan or other arrangement meets the requirements of clauses 
        (i) and (ii).
    ``(D) For purposes of subparagraph (A)(i)(II), a plan or 
arrangement shall be treated as established or maintained in accordance 
with this subparagraph only if--
            ``(i) all of the benefits provided under the plan or 
        arrangement consist of health insurance coverage; or
            ``(ii)(I) the plan or arrangement is a multiemployer plan; 
        and
            ``(II) the requirements of clause (B) of the proviso to 
        clause (5) of section 302(c) of the Labor Management Relations 
        Act, 1947 (29 U.S.C. 186(c)) are met with respect to such plan 
        or other arrangement.
    ``(E) For purposes of subparagraph (A)(i)(II), a plan or 
arrangement shall be treated as established or maintained in accordance 
with this subparagraph only if--
            ``(i) the plan or arrangement is in effect as of the date 
        of the enactment of the Small Business Access and Choice for 
        Entrepreneurs Act of 1999; or
            ``(ii) the employee organization or other entity sponsoring 
        the plan or arrangement--
                    ``(I) has been in existence for at least 3 years; 
                or
                    ``(II) demonstrates to the satisfaction of the 
                Secretary that the requirements of subparagraphs (C) 
                and (D) are met with respect to the plan or other 
                arrangement.''.
    (c) Conforming Amendments to Definitions of Participant and 
Beneficiary.--Section 3(7) of such Act (29 U.S.C. 1002(7)) is amended 
by adding at the end the following new sentence: ``Such term includes 
an individual who is a covered individual described in paragraph 
(40)(C)(ii).''.

SEC. 704. ENFORCEMENT PROVISIONS RELATING TO ASSOCIATION HEALTH PLANS.

    (a) Criminal Penalties for Certain Willful Misrepresentations.--
Section 501 of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1131) is amended--
            (1) by inserting ``(a)'' after ``Sec. 501.''; and
            (2) by adding at the end the following new subsection:
    ``(b) Any person who willfully falsely represents, to any employee, 
any employee's beneficiary, any employer, the Secretary, or any State, 
a plan or other arrangement established or maintained for the purpose 
of offering or providing any benefit described in section 3(1) to 
employees or their beneficiaries as--
            ``(1) being an association health plan which has been 
        certified under part 8;
            ``(2) having been established or maintained under or 
        pursuant to one or more collective bargaining agreements which 
        are reached pursuant to collective bargaining described in 
        section 8(d) of the National Labor Relations Act (29 U.S.C. 
        158(d)) or paragraph Fourth of section 2 of the Railway Labor 
        Act (45 U.S.C. 152, paragraph Fourth) or which are reached 
        pursuant to labor-management negotiations under similar 
        provisions of State public employee relations laws; or
            ``(3) being a plan or arrangement with respect to which the 
        requirements of subparagraph (C), (D), or (E) of section 3(40) 
        are met;
shall, upon conviction, be imprisoned not more than 5 years, be fined 
under title 18, United States Code, or both.''.
    (b) Cease Activities Orders.--Section 502 of such Act (29 U.S.C. 
1132) is amended by adding at the end the following new subsection:
    ``(n)(1) Subject to paragraph (2), upon application by the 
Secretary showing the operation, promotion, or marketing of an 
association health plan (or similar arrangement providing benefits 
consisting of medical care (as defined in section 733(a)(2))) that--
            ``(A) is not certified under part 8, is subject under 
        section 514(b)(6) to the insurance laws of any State in which 
        the plan or arrangement offers or provides benefits, and is not 
        licensed, registered, or otherwise approved under the insurance 
        laws of such State; or
            ``(B) is an association health plan certified under part 8 
        and is not operating in accordance with the requirements under 
        part 8 for such certification,
a district court of the United States shall enter an order requiring 
that the plan or arrangement cease activities.
    ``(2) Paragraph (1) shall not apply in the case of an association 
health plan or other arrangement if the plan or arrangement shows 
that--
            ``(A) all benefits under it referred to in paragraph (1) 
        consist of health insurance coverage; and
            ``(B) with respect to each State in which the plan or 
        arrangement offers or provides benefits, the plan or 
        arrangement is operating in accordance with applicable State 
        laws that are not superseded under section 514.
    ``(3) The court may grant such additional equitable relief, 
including any relief available under this title, as it deems necessary 
to protect the interests of the public and of persons having claims for 
benefits against the plan.''.
    (c) Responsibility for Claims Procedure.--Section 503 of such Act 
(29 U.S.C. 1133) (as amended by title I) is amended by adding at the 
end the following new subsection:
    ``(c) Association Health Plans.--The terms of each association 
health plan which is or has been certified under part 8 shall require 
the board of trustees or the named fiduciary (as applicable) to ensure 
that the requirements of this section are met in connection with claims 
filed under the plan.''.

SEC. 705. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

    Section 506 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1136) is amended by adding at the end the following new 
subsection:
    ``(c) Responsibility of States With Respect to Association Health 
Plans.--
            ``(1) Agreements with states.--A State may enter into an 
        agreement with the Secretary for delegation to the State of 
        some or all of--
                    ``(A) the Secretary's authority under sections 502 
                and 504 to enforce the requirements for certification 
                under part 8;
                    ``(B) the Secretary's authority to certify 
                association health plans under part 8 in accordance 
                with regulations of the Secretary applicable to 
                certification under part 8; or
                    ``(C) any combination of the Secretary's authority 
                authorized to be delegated under subparagraphs (A) and 
                (B).
            ``(2) Delegations.--Any department, agency, or 
        instrumentality of a State to which authority is delegated 
        pursuant to an agreement entered into under this paragraph may, 
        if authorized under State law and to the extent consistent with 
        such agreement, exercise the powers of the Secretary under this 
        title which relate to such authority.
            ``(3) Recognition of primary domicile state.--In entering 
        into any agreement with a State under subparagraph (A), the 
        Secretary shall ensure that, as a result of such agreement and 
        all other agreements entered into under subparagraph (A), only 
        one State will be recognized, with respect to any particular 
        association health plan, as the State to which all authority 
        has been delegated pursuant to such agreements in connection 
        with such plan. In carrying out this paragraph, the Secretary 
        shall take into account the places of residence of the 
        participants and beneficiaries under the plan and the State in 
        which the trust is maintained.''.

SEC. 706. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

    (a) Effective Date.--The amendments made by sections 701, 704, and 
705 shall take effect on January 1, 2001. The amendments made by 
sections 702 and 703 shall take effect on the date of the enactment of 
this Act. The Secretary of Labor shall first issue all regulations 
necessary to carry out the amendments made by this title before January 
1, 2001. Such regulations shall be issued through negotiated 
rulemaking.
    (b) Exception.--Section 801(a)(2) of the Employee Retirement Income 
Security Act of 1974 (added by section 701) does not apply in 
connection with an association health plan (certified under part 8 of 
subtitle B of title I of such Act) existing on the date of the 
enactment of this Act, if no benefits provided thereunder as of the 
date of the enactment of this Act consist of health insurance coverage 
(as defined in section 733(b)(1) of such Act).
    (c) Treatment of Certain Existing Health Benefits Programs.--
            (1) In general.--In any case in which, as of the date of 
        the enactment of this Act, an arrangement is maintained in a 
        State for the purpose of providing benefits consisting of 
        medical care for the employees and beneficiaries of its 
        participating employers, at least 200 participating employers 
        make contributions to such arrangement, such arrangement has 
        been in existence for at least 10 years, and such arrangement 
        is licensed under the laws of one or more States to provide 
        such benefits to its participating employers, upon the filing 
        with the applicable authority (as defined in section 812(a)(5) 
        of the Employee Retirement Income Security Act of 1974 (as 
        amended by this Act)) by the arrangement of an application for 
        certification of the arrangement under part 8 of subtitle B of 
        title I of such Act--
                    (A) such arrangement shall be deemed to be a group 
                health plan for purposes of title I of such Act;
                    (B) the requirements of sections 801(a)(1) and 
                803(a)(1) of the Employee Retirement Income Security 
                Act of 1974 shall be deemed met with respect to such 
                arrangement;
                    (C) the requirements of section 803(b) of such Act 
                shall be deemed met, if the arrangement is operated by 
                a board of directors which--
                            (i) is elected by the participating 
                        employers, with each employer having one vote; 
                        and
                            (ii) has complete fiscal control over the 
                        arrangement and which is responsible for all 
                        operations of the arrangement;
                    (D) the requirements of section 804(a) of such Act 
                shall be deemed met with respect to such arrangement; 
                and
                    (E) the arrangement may be certified by any 
                applicable authority with respect to its operations in 
                any State only if it operates in such State on the date 
                of certification.
        The provisions of this subsection shall cease to apply with 
        respect to any such arrangement at such time after the date of 
        the enactment of this Act as the applicable requirements of 
        this subsection are not met with respect to such arrangement.
            (2) Definitions.--For purposes of this subsection, the 
        terms ``group health plan'', ``medical care'', and 
        ``participating employer'' shall have the meanings provided in 
        section 812 of the Employee Retirement Income Security Act of 
        1974, except that the reference in paragraph (7) of such 
        section to an ``association health plan'' shall be deemed a 
        reference to an arrangement referred to in this subsection.

 TITLE VIII--HEALTH CARE ACCESS, AFFORDABILITY, AND QUALITY COMMISSION

SEC. 801. ESTABLISHMENT OF COMMISSION.

    Part 5 of the Employee Retirement Income Security Act of 1974 is 
amended by adding at the end the following new section:

 ``sec. 518. health care access, affordability and quality commission.

    ``(a) Establishment.--There is hereby established a commission to 
be known as the Health Care Access, Affordability, and Quality 
Commission (hereinafter in this Act referred to as the `Commission').
    ``(b) Duties of Commission.--The duties of the Commission shall be 
as follows:
            ``(1) Establishment of model guidelines.--Based on 
        information gathered by appropriate Federal agencies, advisory 
        groups, and other appropriate sources for health care 
        information, studies, and data, the Commission shall establish 
        model guidelines in each of the following areas:
                    ``(A) Independent expert external review programs.
                    ``(B) Consumer friendly information programs.
                    ``(C) Systems for measuring patient satisfaction 
                and patient outcomes.
                    ``(D) Systems to ensure the timely processing of 
                claims.
            ``(2) Evaluation of health benefits mandates.--At the 
        request of the chairmen or ranking minority members of the 
        appropriate committees of Congress, the Commission shall 
        evaluate, taking into consideration the overall cost effect, 
        availability of treatment, and the effect on the health of the 
        general population, existing and proposed benefit requirements 
        for group health plans.
            ``(3) Comments on certain secretarial reports.--If the 
        Secretary submits to Congress (or a committee of Congress) a 
        report that is required by law and that relates to policies 
        under this section, the Secretary shall transmit a copy of the 
        report to the Commission. The Commission shall review the 
        report and, not later than 6 months after the date of submittal 
        of the Secretary's report to Congress, shall submit to the 
        appropriate committees of Congress written comments on such 
        report. Such comments may include such recommendations as the 
        Commission deems appropriate.
            ``(4) Agenda and additional review.--The Commission shall 
        consult periodically with the chairmen and ranking minority 
        members of the appropriate committees of Congress regarding the 
        Commission's agenda and progress toward achieving the agenda. 
        The Commission may conduct additional reviews, and submit 
        additional reports to the appropriate committees of Congress, 
        from time to time on such topics as may be requested by such 
        chairmen and members and as the Commission deems appropriate.
            ``(5) Availability of reports.--The Commission shall 
        transmit to the Secretary a copy of each report submitted under 
        this subsection and shall make such reports available to the 
        public.
    ``(c) Membership.--
            ``(1) Number and appointment.--The Commission shall be 
        composed of 11 members appointed by the Comptroller General.
            ``(2) Qualifications.--
                    ``(A) In general.--The membership of the Commission 
                shall include--
                            ``(i) physicians and other health 
                        professionals;
                            ``(ii) representatives of employers, 
                        including multiemployer plans;
                            ``(ii) representatives of insured 
                        employees;
                            ``(iv) third-party payers; and
                            ``(v) health services and health economics 
                        researchers with expertise in outcomes and 
                        effectiveness research and technology 
                        assessment.
                    ``(B) Ethical disclosure.--The Comptroller General 
                shall establish a system for public disclosure by 
                members of the Commission of financial and other 
                potential conflicts of interest relating to such 
                members.
            ``(3) Terms.--
                    ``(A) In general.--Each member shall be appointed 
                for a term of 3 years, except that the Comptroller 
                shall designate staggered terms for the members first 
                appointed.
                    ``(B) Vacancies.--Any member appointed to fill a 
                vacancy occurring before the expiration of the term for 
                which the member's predecessor was appointed shall be 
                appointed only for the remainder of that term. A member 
                may serve after the expiration of that member's term 
                until a successor has taken office. A vacancy in the 
                Commission shall be filled in the manner in which the 
                original appointment was made.
            ``(4) Basic pay.--
                    ``(A) Rates of pay.--Except as provided in 
                subparagraph (B), members shall each be paid at a rate 
                equal to the rate of basic pay payable for level IV of 
                the Executive Schedule for each day (including travel 
                time) during which they are engaged in the actual 
                performance of duties vested in the Commission.
                    ``(B) Prohibition of compensation of federal 
                employees.--Members of the Commission who are full-time 
                officers or employees of the United States (or Members 
                of Congress) may not receive additional pay, 
                allowances, or benefits by reason of their service on 
                the Commission.
            ``(5) Travel expenses.--Each member shall receive travel 
        expenses, including per diem in lieu of subsistence, in 
        accordance with sections 5702 and 5703 of title 5, United 
        States Code.
            ``(6) Chairperson.--The Chairperson of the Commission shall 
        be designated by the Comptroller at the time of the 
        appointment. The term of office of the Chairperson shall be 3 
        years.
            ``(7) Meetings.--The Commission shall meet 4 times each 
        year.
    ``(d) Director and Staff of Commission.--
            ``(1) Director.--The Commission shall have a Director who 
        shall be appointed by the Chairperson. The Director shall be 
        paid at a rate not to exceed the maximum rate of basic pay 
        payable for GS-13 of the General Schedule.
            ``(2) Staff.--The Director may appoint 2 additional staff 
        members.
            ``(3) Applicability of certain civil service laws.--The 
        Director and staff of the Commission shall be appointed subject 
        to the provisions of title 5, United States Code, governing 
        appointments in the competitive service, and shall be paid in 
        accordance with the provisions of chapter 51 and subchapter III 
        of chapter 53 of that title relating to classification and 
        General Schedule pay rates.
    ``(e) Powers of Commission.--
            ``(1) Hearings and sessions.--The Commission may, for the 
        purpose of carrying out this Act, hold hearings, sit and act at 
        times and places, take testimony, and receive evidence as the 
        Commission considers appropriate. The Commission may administer 
        oaths or affirmations to witnesses appearing before it.
            ``(2) Powers of members and agents.--Any member or agent of 
        the Commission may, if authorized by the Commission, take any 
        action which the Commission is authorized to take by this 
        section.
            ``(3) Obtaining official data.--The Commission may secure 
        directly from any department or agency of the United States 
        information necessary to enable it to carry out this Act. Upon 
        request of the Chairperson of the Commission, the head of that 
        department or agency shall furnish that information to the 
        Commission.
            ``(4) Mails.--The Commission may use the United States 
        mails in the same manner and under the same conditions as other 
        departments and agencies of the United States.
            ``(5) Administrative support services.--Upon the request of 
        the Commission, the Administrator of General Services shall 
        provide to the Commission, on a reimbursable basis, the 
        administrative support services necessary for the Commission to 
        carry out its responsibilities under this Act.
            ``(6) Contract authority.--The Commission may contract with 
        and compensate government and private agencies or persons for 
        services, without regard to section 3709 of the Revised 
        Statutes (41 U.S.C. 5).
    ``(f) Reports.--Beginning December 31, 2000, and each year 
thereafter, the Commission shall submit to the Congress an annual 
report detailing the following information:
            ``(1) Access to care, affordability to employers and 
        employees, and quality of care under employer-sponsored health 
        plans and recommendations for improving such access, 
        affordability, and quality.
            ``(2) Any issues the Commission deems appropriate or any 
        issues (such as the appropriateness and availability of 
        particular medical treatment) that the chairmen or ranking 
        members of the appropriate committees of Congress requested the 
        Commission to evaluate.
    ``(g) Definition of Appropriate Committees of Congress.--For 
purposes of this section the term `appropriate committees of Congress' 
means any committee in the Senate or House of Representatives having 
jurisdiction over the Employee Retirement Income Security Act of 1974.
    ``(h) Termination.--Section 14(a)(2)(B) of the Federal Advisory 
Committee Act (5 U.S.C. App.; relating to the termination of advisory 
committees) shall not apply to the Commission.
    ``(i) Authorization of Appropriations.--There is authorized to be 
appropriated for fiscal years 2000 through 2004 such sums as may be 
necessary to carry out this Act.''.

SEC. 802. EFFECTIVE DATE.

    This title shall be effective 6 months after the date of the 
enactment of this Act.
                                 <all>