[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2926 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2926

To provide new patient protections under group health plans and through 
             health insurance issuers in the group market.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 23, 1999

  Mr. Boehner (for himself, Mr. Armey, Mr. Bliley, Mr. Goodling, Mrs. 
 Northup, Mr. McCrery, Mr. Green of Wisconsin, Mr. Talent, Mr. Oxley, 
Mr. Portman, Mr. Hobson, Mr. Ballenger, and Mr. Salmon) introduced the 
following bill; which was referred to the Committee on Commerce, and in 
  addition to the Committees on Education and the Workforce, Ways and 
Means, and the Judiciary, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To provide new patient protections under group health plans and through 
             health insurance issuers in the group market.

    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 ``Comprehensive 
Access and Responsibility in Health Care Act of 1999''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title and table of contents.
 TITLE I--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

                    Subtitle A--Patient Protections

Sec. 101. Patient access to unrestricted medical advice, emergency 
                            medical care, obstetric and gynecological 
                            care, pediatric care, and continuity of 
                            care.
Sec. 102. Required disclosure to network providers.
Sec. 103. Effective date and related rules.
               Subtitle B--Patient Access to Information

Sec. 111. Patient access to information regarding plan coverage, 
                            managed care procedures, health care 
                            providers, and quality of medical care.
Sec. 112. Effective date and related rules.
             Subtitle C--Group Health Plan Review Standards

Sec. 121. Special rules for group health plans.
Sec. 122. Special rule for access to specialty care.
Sec. 123. Requirements for treatment of prescription drugs and medical 
                            devices as experimental or investigational.
Sec. 124. Protection for certain information developed to reduce 
                            mortality or morbidity or for improving 
                            patient care and safety.
Sec. 125. Effective date.
     Subtitle D--Small Business Access and Choice for Entrepreneurs

Sec. 131. 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. 132. Clarification of treatment of single employer arrangements.
Sec. 133. Clarification of treatment of certain collectively bargained 
                            arrangements.
Sec. 134. Enforcement provisions relating to association health plans.
Sec. 135. Cooperation between Federal and State authorities.
Sec. 136. Effective date and transitional and other rules.
 Subtitle E--Health Care Access, Affordability, and Quality Commission

Sec. 141. Establishment of commission.
Sec. 142. Effective date.
         TITLE II--AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT

     Subtitle A--Patient Protections and Point of Service Coverage 
                              Requirements

Sec. 201. Patient access to unrestricted medical advice, emergency 
                            medical care, obstetric and gynecological 
                            care, pediatric care, and continuity of 
                            care.
Sec. 202. Requiring health maintenance organizations to offer option of 
                            point-of-service coverage.
Sec. 203. Effective date and related rules.
               Subtitle B--Patient Access to Information

Sec. 211. Patient access to information regarding plan coverage, 
                            managed care procedures, health care 
                            providers, and quality of medical care.
Sec. 212. Requirements for treatment of prescription drugs and medical 
                            devices as experimental or investigational.
Sec. 213. Effective date and related rules.
                        Subtitle C--HealthMarts

Sec. 221. Expansion of consumer choice through HealthMarts.
Sec. 222. Effective date.
               Subtitle D--Community Health Organizations

Sec. 231. Promotion of provision of insurance by community health 
                            organizations.
       TITLE III--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

                    Subtitle A--Patient Protections

Sec. 301. Patient access to unrestricted medical advice, emergency 
                            medical care, obstetric and gynecological 
                            care, pediatric care, and continuity of 
                            care.
                  Subtitle B--Medical Savings Accounts

Sec. 311. Expansion of availability of medical savings accounts.
Sec. 312. Effective date.
               Subtitle C--Tax Incentives for Health Care

Sec. 321. Deduction for health and long-term care insurance costs of 
                            individuals not participating in employer-
                            subsidized health plans.
Sec. 322. Refundable credit for health insurance coverage.
Sec. 323. Study of State safety-net health insurance programs for the 
                            medically uninsurable.
Sec. 324. Carryover of unused benefits from cafeteria plans and 
                            flexible spending arrangements.
                  TITLE IV--HEALTH CARE LAWSUIT REFORM

                     Subtitle A--General Provisions

Sec. 401. Federal reform of health care liability actions.
Sec. 402. Definitions.
Sec. 403. Effective date.
    Subtitle B--Uniform Standards for Health Care Liability Actions

Sec. 411. Statute of limitations.
Sec. 412. Calculation and payment of damages.
Sec. 413. Limitations on contingent fees.
Sec. 413. Alternative dispute resolution.
Sec. 414. Reporting on fraud and abuse enforcement activities.

 TITLE I--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

                    Subtitle A--Patient Protections

SEC. 101. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, EMERGENCY 
              MEDICAL CARE, OBSTETRIC AND GYNECOLOGICAL CARE, PEDIATRIC 
              CARE, AND CONTINUITY OF CARE.

    (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 MEDICAL ADVICE, EMERGENCY 
              MEDICAL CARE, OBSTETRIC AND GYNECOLOGICAL CARE, PEDIATRIC 
              CARE, AND CONTINUITY OF CARE.

    ``(a) Patient Access to Unrestricted Medical Advice.--
            ``(1) In general.--In the case of any health care 
        professional acting within the lawful scope of practice in the 
        course of carrying out a contractual employment arrangement or 
        other direct contractual arrangement between such professional 
        and a group health plan or a health insurance issuer offering 
        health insurance coverage in connection with a group health 
        plan, the plan or issuer with which such contractual employment 
        arrangement or other direct contractual arrangement is 
        maintained by the professional may not impose on such 
        professional under such arrangement any prohibition or 
        restriction with respect to advice, provided to a participant 
        or beneficiary under the plan who is a patient, 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 health 
        insurance coverage offered in connection with the plan.
            ``(2) Health care professional defined.--For purposes of 
        this paragraph, 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.
            ``(3) Rule of construction.--Nothing in this subsection 
        shall be construed to require the sponsor of a group health 
        plan or a health insurance issuer offering health insurance 
        coverage in connection with the group health plan to engage in 
        any practice that would violate its religious beliefs or moral 
        convictions.
    ``(b) Patient Access to Emergency Medical Care.--
            ``(1) Coverage of emergency services.--
                    ``(A) In general.--If a group health plan, or 
                health insurance coverage offered by a health insurance 
                issuer, provides any benefits with respect to emergency 
                services (as defined in subparagraph (B)(ii)), or 
                ambulance services, the plan or issuer shall cover 
                emergency services (including emergency ambulance 
                services as defined in subparagraph (B)(iii)) furnished 
                under the plan or coverage--
                            ``(i) without the need for any prior 
                        authorization determination;
                            ``(ii) whether or not the health care 
                        provider furnishing such services is a 
                        participating provider with respect to such 
                        services;
                            ``(iii) in a manner so that, if such 
                        services are provided to a participant or 
                        beneficiary by a nonparticipating health care 
                        provider, the participant or beneficiary is not 
                        liable for amounts that exceed the amounts of 
                        liability that would be incurred if the 
                        services were provided by a participating 
                        provider; and
                            ``(iv) without regard to any other term or 
                        condition of such plan or coverage (other than 
                        exclusion or coordination of benefits, or an 
                        affiliation or waiting period, permitted under 
                        section 701 and other than applicable cost 
                        sharing).
                    ``(B) Definitions.--In this subsection:
                            ``(i) Emergency medical condition.--The 
                        term `emergency medical condition' means--
                                    ``(I) a medical condition 
                                manifesting itself by acute symptoms of 
                                sufficient severity (including severe 
                                pain) such that a prudent layperson, 
                                who possesses an average knowledge of 
                                health and medicine, could reasonably 
                                expect the absence of immediate medical 
                                attention to result in a condition 
                                described in clause (i), (ii), or (iii) 
                                of section 1867(e)(1)(A) of the Social 
                                Security Act (42 U.S.C. 
                                1395dd(e)(1)(A)); and
                                    ``(II) a medical condition 
                                manifesting itself in a neonate by 
                                acute symptoms of sufficient severity 
                                (including severe pain) such that a 
                                prudent health care professional could 
                                reasonably expect the absence of 
                                immediate medical attention to result 
                                in a condition described in clause (i), 
                                (ii), or (iii) of section 1867(e)(1)(A) 
                                of the Social Security Act.
                            ``(ii) Emergency services.--The term 
                        `emergency services' means--
                                    ``(I) with respect to an emergency 
                                medical condition described in clause 
                                (i)(I), a medical screening examination 
                                (as required under section 1867 of the 
                                Social Security Act, 42 U.S.C. 1395dd)) 
                                that is within the capability of the 
                                emergency department of a hospital, 
                                including ancillary services routinely 
                                available to the emergency department 
                                to evaluate an emergency medical 
                                condition (as defined in clause (i)) 
                                and also, within the capabilities of 
                                the staff and facilities at the 
                                hospital, such further medical 
                                examination and treatment as 
are required under section 1867 of such Act to stabilize the patient; 
or
                                    ``(II) with respect to an emergency 
                                medical condition described in clause 
                                (i)(II), medical treatment for such 
                                condition rendered by a health care 
                                provider in a hospital to a neonate, 
                                including available hospital ancillary 
                                services in response to an urgent 
                                request of a health care professional 
                                and to the extent necessary to 
                                stabilize the neonate.
                            ``(iii) Emergency ambulance services.--The 
                        term `emergency ambulance services' means 
                        ambulance services (as defined for purposes of 
                        section 1861(s)(7) of the Social Security Act) 
                        furnished to transport an individual who has an 
                        emergency medical condition (as defined in 
                        clause (i)) to a hospital for the receipt of 
                        emergency services (as defined in clause (ii)) 
                        in a case in which appropriate emergency 
                        medical screening examinations are covered 
                        under the plan or coverage pursuant to 
                        paragraph (1)(A) and a prudent layperson, with 
                        an average knowledge of health and medicine, 
                        could reasonably expect that the absence of 
                        such transport would result in placing the 
                        health of the individual in serious jeopardy, 
                        serious impairment of bodily function, or 
                        serious dysfunction of any bodily organ or 
                        part.
                            ``(iv) Stabilize.--The term `to stabilize' 
                        means, with respect to an emergency medical 
                        condition, to provide such medical treatment of 
                        the condition as may be necessary to assure, 
                        within reasonable medical probability, that no 
                        material deterioration of the condition is 
                        likely to result from or occur during the 
                        transfer of the individual from a facility.
                            ``(v) Nonparticipating.--The term 
                        `nonparticipating' means, with respect to a 
                        health care provider that provides health care 
                        items and services to a participant or 
                        beneficiary under group health plan or under 
                        group health insurance coverage, a health care 
                        provider that is not a participating health 
                        care provider with respect to such items and 
                        services.
                            ``(vi) Participating.--The term 
                        `participating' means, with respect to a health 
                        care provider that provides health care items 
                        and services to a participant or beneficiary 
                        under group health plan or health insurance 
                        coverage offered by a health insurance issuer 
                        in connection with such a plan, a health care 
                        provider that furnishes such items and services 
                        under a contract or other arrangement with the 
                        plan or issuer.
    ``(c) Patient Right to Obstetric and Gynecological Care.--
            ``(1) 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)--
                    ``(A) provides benefits under the terms of the plan 
                consisting of--
                            ``(i) gynecological care (such as 
                        preventive women's health examinations); or
                            ``(ii) obstetric care (such as pregnancy-
                        related services),
                provided by a participating health care professional 
                who specializes in such care (or provides benefits 
consisting of payment for such care); and
                    ``(B) 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 health care professional, then the 
        plan (or issuer) shall meet the requirements of paragraph (2).
            ``(2) Requirements.--A group health plan (or a health 
        insurance issuer offering health insurance coverage in 
        connection with the plan) meets the requirements of this 
        paragraph, in connection with benefits described in paragraph 
        (1) consisting of care described in clause (i) or (ii) of 
        paragraph (1)(A) (or consisting of payment therefor), if the 
        plan (or issuer)--
                    ``(A) does not require authorization or a referral 
                by the primary care provider in order to obtain such 
                benefits; and
                    ``(B) treats the ordering of other care of the same 
                type, by the participating health care professional 
                providing the care described in clause (i) or (ii) of 
                paragraph (1)(A), as the authorization of the primary 
                care provider with respect to such care.
            ``(3) Health care professional defined.--For purposes of 
        this subsection, the term `health care professional' means an 
        individual (including, but not limited to, a nurse midwife or 
        nurse practitioner) who is licensed, accredited, or certified 
        under State law to provide obstetric and gynecological health 
        care services and who is operating within the scope of such 
        licensure, accreditation, or certification.
            ``(4) Construction.--Nothing in paragraph (1) shall be 
        construed as preventing a plan from offering (but not requiring 
        a participant or beneficiary to accept) a health care 
        professional trained, credentialed, and operating within the 
        scope of their licensure to perform obstetric and gynecological 
        health care services. Nothing in paragraph (2)(B) shall waive 
        any requirements of coverage relating to medical necessity or 
        appropriateness with respect to coverage of gynecological or 
        obstetric care so ordered.
            ``(5) Treatment of multiple coverage options.--In the case 
        of a plan providing benefits under two or more coverage 
        options, the requirements of this subsection shall apply 
        separately with respect to each coverage option.
    ``(d) Patient Right to Pediatric Care.--
            ``(1) 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 health care professional 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 health care 
        professional 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.
            ``(2) Health care professional defined.--For purposes of 
        this subsection, the term `health care professional' means an 
        individual (including, but not limited to, a nurse 
        practitioner) who is licensed, accredited, or certified under 
        State law to provide pediatric health care services and who is 
        operating within the scope of such licensure, accreditation, or 
        certification.
            ``(3) Construction.--Nothing in paragraph (1) shall be 
        construed as preventing a plan from offering (but not requiring 
        a participant or beneficiary to accept) a health care 
        professional trained, credentialed, and operating within the 
        scope of their licensure to perform pediatric health care 
        services. Nothing in paragraph (1) shall waive any requirements 
        of coverage relating to medical necessity or appropriateness 
        with respect to coverage of pediatric care so ordered.
            ``(4) Treatment of multiple coverage options.--In the case 
        of a plan providing benefits under two or more coverage 
        options, the requirements of this subsection shall apply 
        separately with respect to each coverage option.
    ``(e) Continuity of Care.--
            ``(1) In general.--
                    ``(A) Termination of provider.--If a contract 
                between a group health plan, or a health insurance 
                issuer offering health insurance coverage in connection 
                with a group health plan, and a health care provider is 
                terminated (as defined in subparagraph (D)(ii)), or 
                benefits or coverage provided by a health care provider 
                are terminated because of a change in the terms of 
                provider participation in a group health plan, and an 
                individual who, at the time of such termination, is a 
                participant or beneficiary in the plan and is scheduled 
                to undergo surgery (including an organ 
                transplantation), is undergoing treatment for 
                pregnancy, or is determined to be terminally ill (as 
                defined in section 1861(dd)(3)(A) of the Social 
                Security Act) and is undergoing treatment for the 
                terminal illness, the plan or issuer shall--
                            ``(i) notify the individual on a timely 
                        basis of such termination and of the right to 
                        elect continuation of coverage of treatment by 
                        the provider under this subsection; and
                            ``(ii) subject to paragraph (3), permit the 
                        individual to elect to continue to be covered 
                        with respect to treatment by the provider for 
                        such surgery, pregnancy, or illness during a 
                        transitional period (provided under paragraph 
                        (2)).
                    ``(B) Treatment of termination of contract with 
                health insurance issuer.--If a contract for the 
provision of health insurance coverage between a group health plan and 
a health insurance issuer is terminated and, as a result of such 
termination, coverage of services of a health care provider is 
terminated with respect to an individual, the provisions of 
subparagraph (A) (and the succeeding provisions of this subsection) 
shall apply under the plan in the same manner as if there had been a 
contract between the plan and the provider that had been terminated, 
but only with respect to benefits that are covered under the plan after 
the contract termination.
                    ``(C) Termination defined.--For purposes of this 
                subsection, the term `terminated' includes, with 
                respect to a contract, the expiration or nonrenewal of 
                the contract, but does not include a termination of the 
                contract by the plan or issuer for failure to meet 
                applicable quality standards or for fraud.
            ``(2) Transitional period.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) through (D), the transitional period 
                under this paragraph shall extend up to 90 days (as 
                determined by the treating health care professional) 
                after the date of the notice described in paragraph 
                (1)(A)(i) of the provider's termination.
                    ``(B) Scheduled surgery.--If surgery was scheduled 
                for an individual before the date of the announcement 
                of the termination of the provider status under 
                paragraph (1)(A)(i), the transitional period under this 
                paragraph with respect to the surgery shall extend 
                beyond the period under subparagraph (A) and until the 
                date of discharge of the individual after completion of 
                the surgery.
                    ``(C) Pregnancy.--If--
                            ``(i) a participant or beneficiary was 
                        determined to be pregnant at the time of a 
                        provider's termination of participation, and
                            ``(ii) the provider was treating the 
                        pregnancy before date of the termination,
                the transitional period under this paragraph with 
                respect to provider's treatment of the pregnancy shall 
                extend through the provision of post-partum care 
                directly related to the delivery.
                    ``(D) Terminal illness.--If--
                            ``(i) a participant or beneficiary was 
                        determined to be terminally ill (as determined 
                        under section 1861(dd)(3)(A) of the Social 
                        Security Act) at the time of a provider's 
                        termination of participation, and
                            ``(ii) the provider was treating the 
                        terminal illness before the date of 
                        termination,
                the transitional period under this paragraph shall 
                extend for the remainder of the individual's life for 
                care directly related to the treatment of the terminal 
                illness or its medical manifestations.
            ``(3) Permissible terms and conditions.--A group health 
        plan or health insurance issuer may condition coverage of 
        continued treatment by a provider under paragraph (1)(A)(i) 
        upon the individual notifying the plan of the election of 
        continued coverage and upon the provider agreeing to the 
        following terms and conditions:
                    ``(A) The provider agrees to accept reimbursement 
                from the plan or issuer and individual involved (with 
                respect to cost-sharing) at the rates applicable prior 
                to the start of the transitional period as payment in 
                full (or, in the case described in paragraph (1)(B), at 
                the rates applicable under the replacement plan or 
                issuer after the date of the termination of the 
                contract with the health insurance issuer) and not to 
                impose cost-sharing with respect to the individual in 
                an amount that would exceed the cost-sharing that could 
                have been imposed if the contract referred to in 
                paragraph (1)(A) had not been terminated.
                    ``(B) The provider agrees to adhere to the quality 
                assurance standards of the plan or issuer responsible 
                for payment under subparagraph (A) and to provide to 
                such plan or issuer necessary medical information 
                related to the care provided.
                    ``(C) The provider agrees otherwise to adhere to 
                such plan's or issuer's policies and procedures, 
                including procedures regarding referrals and obtaining 
                prior authorization and providing services pursuant to 
                a treatment plan (if any) approved by the plan or 
                issuer.
                    ``(D) The provider agrees to provide transitional 
                care to all participants and beneficiaries who are 
                eligible for and elect to have coverage of such care 
                from such provider.
                    ``(E) If the provider initiates the termination, 
                the provider has notified the plan within 30 days prior 
                to the effective date of the termination of--
                            ``(i) whether the provider agrees to 
                        permissible terms and conditions (as set forth 
                        in this paragraph) required by the plan, and
                            ``(ii) if the provider agrees to the terms 
                        and conditions, the specific plan beneficiaries 
                        and participants undergoing a course of 
                        treatment from the provider who the provider 
                        believes, at the time of the notification, 
                        would be eligible for transitional care under 
                        this subsection.
            ``(4) Construction.--Nothing in this subsection shall be 
        construed to--
                    ``(A) require the coverage of benefits which would 
                not have been covered if the provider involved remained 
                a participating provider, or
                    ``(B) prohibit a group health plan from 
                conditioning a provider's participation on the 
                provider's agreement to provide transitional care to 
                all participants and beneficiaries eligible to obtain 
coverage of such care furnished by the provider as set forth under this 
subsection.
    ``(f) Coverage for Individuals Participating in Approved Cancer 
Clinical Trials.--
            ``(1) Coverage.--
                    ``(A) In general.--If a group health plan (or a 
                health insurance issuer offering health insurance 
                coverage in connection with the plan) provides coverage 
                to a qualified individual (as defined in paragraph 
                (2)), the plan or issuer--
                            ``(i) may not deny the individual 
                        participation in the clinical trial referred to 
                        in paragraph (2)(B);
                            ``(ii) subject to paragraphs (2), (3), and 
                        (4), may not deny (or limit or impose 
                        additional conditions on) the coverage of 
                        routine patient costs for items and services 
                        furnished in connection with participation in 
                        the trial; and
                            ``(iii) may not discriminate against the 
                        individual on the basis of the participation of 
                        the participant or beneficiary in such trial.
                    ``(B) Exclusion of certain costs.--For purposes of 
                subparagraph (A)(ii), routine patient costs do not 
                include the cost of the tests or measurements conducted 
                primarily for the purpose of the clinical trial 
                involved.
                    ``(C) Use of in-network providers.--If one or more 
                participating providers is participating in a clinical 
                trial, nothing in subparagraph (A) shall be construed 
                as preventing a plan from requiring that a qualified 
                individual participate in the trial through such a 
                participating provider if the provider will accept the 
                individual as a participant in the trial.
            ``(2) Qualified individual defined.--For purposes of 
        paragraph (1), the term `qualified individual' means an 
        individual who is a participant or beneficiary in a group 
        health plan and who meets the following conditions:
                    ``(A)(i) The individual has been diagnosed with 
                cancer.
                    ``(ii) The individual is eligible to participate in 
                an approved clinical trial according to the trial 
                protocol with respect to treatment of cancer.
                    ``(iii) The individual's participation in the trial 
                offers meaningful potential for significant clinical 
                benefit for the individual.
                    ``(B) Either--
                            ``(i) the referring physician is a 
                        participating health care professional and has 
                        concluded that the individual's participation 
                        in such trial would be appropriate based upon 
                        satisfaction by the individual of the 
                        conditions described in subparagraph (A); or
                            ``(ii) the individual provides medical and 
                        scientific information establishing that the 
                        individual's participation in such trial would 
                        be appropriate based upon the satisfaction by 
                        the individual of the conditions described in 
                        subparagraph (A).
            ``(3) Payment.--
                    ``(A) In general.--A group health plan (or a health 
                insurance issuer offering health insurance coverage in 
                connection with the plan) shall provide for payment for 
                routine patient costs described in paragraph (1)(B) but 
                is not required to pay for costs of items and services 
                that are reasonably expected to be paid for by the 
                sponsors of an approved clinical trial.
                    ``(B) Routine patient care costs.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `routine patient care 
                        costs' shall include the costs associated with 
                        the provision of items and services that--
                                    ``(I) would otherwise be covered 
                                under the group health plan if such 
                                items and services were not provided in 
                                connection with an approved clinical 
                                trial program; and
                                    ``(II) are furnished according to 
                                the protocol of an approved clinical 
                                trial program.
                            ``(ii) Exclusion.--For purposes of this 
                        paragraph, `routine patient care costs' shall 
                        not include the costs associated with the 
                        provision of--
                                    ``(I) an investigational drug or 
                                device, unless the Secretary has 
                                authorized the manufacturer of such 
                                drug or device to charge for such drug 
                                or device; or
                                    ``(II) any item or service supplied 
                                without charge by the sponsor of the 
                                approved clinical trial program.
                    ``(C) Payment rate.--For purposes of this 
                subsection--
                            ``(i) Participating providers.--In the case 
                        of covered items and services provided by a 
                        participating provider, the payment rate shall 
                        be at the agreed upon rate.
                            ``(ii) Nonparticipating providers.--In the 
                        case of covered items and services provided by 
                        a nonparticipating provider, the payment rate 
                        shall be at the rate the plan would normally 
                        pay for comparable items or services under 
                        clause (i).
            ``(4) Approved clinical trial defined.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `approved clinical trial' means a cancer 
                clinical research study or cancer clinical 
                investigation approved by an Institutional Review 
                Board.
                    ``(B) Conditions for departments.--The conditions 
                described in this paragraph, for a study or 
                investigation conducted by a Department, are that the 
                study or investigation has been reviewed and approved 
                through a system of peer review that the Secretary 
                determines--
                            ``(i) to be comparable to the system of 
                        peer review of studies and investigations used 
                        by the National Institutes of Health, and
                            ``(ii) assures unbiased review of the 
                        highest scientific standards by qualified 
                        individuals who have no interest in the outcome 
                        of the review.
            ``(5) Construction.--Nothing in this subsection shall be 
        construed to limit a plan's coverage with respect to clinical 
        trials.
            ``(6) Plan satisfaction of certain requirements; 
        responsibilities of fiduciaries.--
                    ``(A) In general.--For purposes of this subsection, 
                insofar as a group health plan provides benefits in the 
                form of health insurance coverage through a health 
                insurance issuer, the plan shall be treated as meeting 
                the requirements of this subsection with respect to 
                such benefits and not be considered as failing to meet 
                such requirements because of a failure of the issuer to 
                meet such requirements so long as the plan sponsor or 
                its representatives did not cause such failure by the 
                issuer.
                    ``(B) Construction.--Nothing in this subsection 
                shall be construed to affect or modify the 
                responsibilities of the fiduciaries of a group health 
                plan under part 4.
            ``(7) Study and report.--
                    ``(A) Study.--The Secretary shall analyze cancer 
                clinical research and its cost implications for managed 
                care, including differentiation in--
                            ``(i) the cost of patient care in trials 
                        versus standard care;
                            ``(ii) the cost effectiveness achieved in 
                        different sites of service;
                            ``(iii) research outcomes;
                            ``(iv) volume of research subjects 
                        available in different sites of service;
                            ``(v) access to research sites and clinical 
                        trials by cancer patients;
                            ``(vi) patient cost sharing or copayment 
                        costs realized in different sites of service;
                            ``(vii) health outcomes experienced in 
                        different sites of service;
                            ``(viii) long term health care services and 
                        costs experienced in different sites of 
                        service;
                            ``(ix) morbidity and mortality experienced 
                        in different sites of service; and
                            ``(x) patient satisfaction and preference 
                        of sites of service.
                    ``(B) Report to congress.--Not later than January 
                1, 2005, the Secretary shall submit a report to 
                Congress that contains--
                            ``(i) an assessment of any incremental cost 
                        to group health plans resulting from the 
                        provisions of this section;
                            ``(ii) a projection of expenditures to such 
                        plans resulting from this section;
                            ``(iii) an assessment of any impact on 
                        premiums resulting from this section; and
                            ``(iv) recommendations regarding action on 
                        other diseases.''.
    (b) Conforming 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 medical advice, emergency 
                            medical care, obstetric and gynecological 
                            care, pediatric care, and continuity of 
                            care.''.

SEC. 102. REQUIRED DISCLOSURE TO NETWORK PROVIDERS.

    (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 
section 101) is amended further by adding at the end the following new 
section:

``SEC. 715. REQUIRED DISCLOSURE TO NETWORK PROVIDERS.

    ``(a) In General.--If a group health plan reimburses, through a 
contract or other arrangement, a health care provider at a discounted 
payment rate because the provider participates in a provider network, 
the plan shall disclose to the provider the following information 
before the provider furnishes covered items or services under the plan:
            ``(1) The identity of the plan sponsor or other entity that 
        is to utilize the discounted payment rates in reimbursing 
        network providers in that network.
            ``(2) The existence of any substantial benefit 
        differentials established for the purpose of actively 
        encouraging participants or beneficiaries under the plan to 
        utilize the providers in that network.
            ``(3) The methods and materials by which providers in the 
        network are identified to such participants or beneficiaries as 
        part of the network.
    ``(b) Permitted Means of Disclosure.--Disclosure required under 
subsection (a) by a plan may be made--
            ``(1) by another entity under a contract or other 
        arrangement between the plan and the entity; and
            ``(2) by making such information available in written 
        format, in an electronic format, on the Internet, or on a 
        proprietary computer network which is readily accessible to the 
        network providers.
    ``(c) Construction.--Nothing in this section shall be construed to 
require, directly or indirectly, disclosure of specific fee 
arrangements or other reimbursement arrangements--
            ``(1) between (i) group health plans or provider networks 
        and (ii) health care providers, or
            ``(2) among health care providers.
    ``(d) Definitions.--For purposes of this subsection:
            ``(1) Benefit differential.--The term `benefit 
        differential' means, with respect to a group health plan, 
        differences in the case of any participant or beneficiary, in 
        the financial responsibility for payment of coinsurance, 
        copayments, deductibles, balance billing requirements, or any 
        other charge, based upon whether a health care provider from 
        whom covered items or services are obtained is a network 
        provider.
            ``(2) Discounted payment rate.--The term `discounted 
        payment rate' means, with respect to a provider, a payment rate 
        that is below the charge imposed by the provider.
            ``(3) Network provider.--The term `network provider' means, 
        with respect to a group health plan, a health care provider 
        that furnishes health care items and services to participants 
        or beneficiaries under the plan pursuant to a contract or other 
        arrangement with a provider network in which the provider is 
        participating.
            ``(4) Provider network.--The term `provider network' means, 
        with respect to a group health plan offering health insurance 
        coverage, an association of network providers through whom the 
        plan provides, through contract or other arrangement, health 
        care items and services to participants and beneficiaries.''.
    (b) Conforming 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. 715. Required disclosure to network providers.''.

SEC. 103. EFFECTIVE DATE AND RELATED RULES.

    (a) In General.--The amendments made by this subtitle 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 subtitle before the 
effective date thereof.
    (b) Limitation on Enforcement Actions.--No enforcement action shall 
be taken, pursuant to the amendments made by this subtitle, 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 subtitle 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 subtitle shall 
not be treated as a termination of such collective bargaining 
agreement.

               Subtitle B--Patient Access to Information

SEC. 111. 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.--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).
    ``(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 an investigational item or 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.
            ``(3) Network characteristics.--If the plan (or health 
        insurance issuer offering health insurance coverage in 
        connection with the plan) 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.
    ``(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 on Plan Performance.--Any information required 
under subsection (a) shall include information concerning the number of 
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.
    ``(f) Information Included With Adverse Coverage Decisions.--A 
group health plan shall provide to each participant and beneficiary, 
together with any notification of the participant or beneficiary of an 
adverse coverage decision, the following information:
            ``(1) Preauthorization and utilization review procedures.--
        A description of the basis on which any preauthorization 
        requirement or any utilization review requirement has resulted 
        in the adverse coverage decision.
            ``(2) Procedures for determining exclusions based on 
        medical necessity or on investigational items or experimental 
        treatments.--If the adverse coverage decision is based on a 
        determination relating to medical necessity or to an 
        investigational item or an experimental treatment or 
        technology, a description of the procedures and medically-based 
        criteria used in such decision.
    ``(g) 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 may, upon written request (made not 
                more frequently than annually), make available to 
                participants and beneficiaries, in a generally 
                recognized electronic format--
                            ``(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 shall provide the 
                following information to a participant or beneficiary 
                on request:
                            ``(i) 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.
                            ``(ii) 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.
                            ``(iii) Accreditation status of health 
                        insurance issuers and service providers.--A 
                        description of the accreditation and licensing 
                        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 licensing authority.
                            ``(iv) Quality performance measures.--The 
                        latest information (if any) maintained by 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.
                    ``(C) Information required from health care 
                professionals.--
                            ``(i) Qualifications, privileges, and 
                        method of compensation.--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.
                            ``(ii) Cost of procedures.--Any health care 
                        professional who recommends an elective 
                        procedure or treatment while treating a 
                        participant or beneficiary under a group health 
                        plan that requires a participant or beneficiary 
                        to share in the cost of treatment shall inform 
                        such participant or beneficiary of each cost 
                        associated with the procedure or treatment and 
                        an estimate of the magnitude of such costs.
                    ``(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.
    ``(h) 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 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).
    ``(i) 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.
    ``(j) Definitions and Related Rules.--
            ``(1) In general.--For purposes of this section--
                    ``(A) Group health plan.--The term `group health 
                plan' has the meaning provided such term under section 
                733(a)(1).
                    ``(B) Medical care.--The term `medical care' has 
                the meaning provided such term under section 733(a)(2).
                    ``(C) Health insurance coverage.--The term `health 
                insurance coverage' has the meaning provided such term 
                under section 733(b)(1).
                    ``(D) Health insurance issuer.--The term `health 
                insurance issuer' has the meaning provided such term 
                under section 733(b)(2).
            ``(2) Applicability only in connection with included group 
        health plan benefits.--
                    ``(A) In general.--The requirements of this section 
                shall apply only in connection with included group 
                health plan benefits.
                    ``(B) Included group health plan benefit.--For 
                purposes of subparagraph (A), the term `included group 
                health plan benefit' means a benefit which is not an 
                excepted benefit (as defined in section 733(c)).''.
    (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(i)(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. 112. EFFECTIVE DATE AND RELATED RULES.

    (a) In General.--The amendments made by this subtitle 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 of Labor shall first issue all regulations necessary to 
carry out the amendments made by this subtitle before such date.
    (b) Limitation on Enforcement Actions.--No enforcement action shall 
be taken, pursuant to the amendments made by this subtitle, 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.

             Subtitle C--Group Health Plan Review Standards

SEC. 121. 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 (after and below paragraph (2)) the 
        following new flush-left sentence:
``This subsection does not apply in the case of included group health 
plan benefits (as defined in subsection (b)(10)(S)).''; 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, in the case of included group health plan benefits--
                    ``(A) provide adequate notice in writing in 
                accordance with this subsection to any participant or 
                beneficiary of any adverse coverage decision with 
                respect to such 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, which shall apply solely with respect to 
                such benefits.
            ``(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) Physicians must review initial coverage decisions 
        involving medical appropriateness or necessity or 
        investigational items or experimental treatment.--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 
        requirements for medical appropriateness or necessity or would 
        constitute provision of 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 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) or (ii) are 
                met, subject to clause (iii).
                            ``(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 
                        is excluded from coverage because the provision 
                        of such item or service--
                                    ``(I) is not medically appropriate 
                                or necessary; or
                                    ``(II) would constitute provision 
                                of an investigational item or 
                                experimental treatment or technology.
                            ``(ii) 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 or 
                                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) 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 panel of such experts) under 
                subparagraph (D)(ii)(IV) is to reverse or modify the 
                coverage decision.
                    ``(C) Request to independent contract expert 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 subparagraph (A)(ii) are met 
                        (and review is not otherwise precluded under 
                        subparagraph (A)(iii)), the terms of the plan 
                        shall provide for a procedure for initial 
                        review by an independent contract expert 
                        selected in accordance with subparagraph (H) 
                        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 (H)(i) and 
                                meets the requirements of subparagraph 
                                (H)(iii).
                    ``(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) An independent medical expert 
                                (or a panel of such experts, as 
                                determined necessary) will be selected 
                                in accordance with subparagraph (H) 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 panel) and maintained in a 
                                manner which will ensure 
                                confidentiality of such record.
                                    ``(III) Such expert (or panel) will 
                                reconsider the initial review decision 
                                to determine whether such decision was 
                                in accordance with the terms of the 
                                plan and this title. The expert (or 
                                panel) in its reconsideration will take 
                                into account the medical condition of 
                                the patient, the recommendation of the 
                                treating physician, the initial 
                                coverage decision (including the 
                                reasons for such decision) and the 
                                decision upon review conducted pursuant 
                                to paragraph (1)(C) (including review 
                                under paragraph (2)(A)(ii) or 
                                (2)(B)(ii)) , 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, and any other 
                                valid, relevant, scientific or clinical 
                                evidence the expert (or panel) 
                                determines appropriate for its 
review. The expert (or panel) may consult the participant or 
beneficiary, the treating physician, the medical director of the plan, 
or any other party who, in the opinion of the expert (or panel), may 
have relevant information for consideration.
                            ``(E) Issuance of binding final decision.--
                        Upon completion of the procedure for review 
                        under subparagraph (D), the independent medical 
                        expert (or panel of such experts) shall issue a 
                        written decision affirming, modifying, or 
                        reversing the initial review decision, setting 
                        forth the grounds for the decision. Such 
                        decision shall be the final decision of the 
                        plan and shall be binding on the plan. Such 
                        decision shall set forth specifically the 
                        determination of the expert (or panel) of the 
                        appropriate period for timely compliance by the 
                        plan with the decision. Such decision shall be 
                        issued concurrently to the participant or 
                        beneficiary, to the treating physician, and to 
                        the plan, shall constitute conclusive, written 
                        authorization for the provision of benefits 
                        under the plan in accordance with the decision, 
                        and shall be treated as terms of the plan for 
                        purposes of any action by the participant or 
                        beneficiary under section 502.
                    ``(F) 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. 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.
                    ``(G) 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 no 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 (H)(i) and meets the 
                                requirements of subparagraph (H)(iii).
                    ``(H) Selection of experts.--
                            ``(i) In general.--An independent contract 
                        expert or independent medical expert (or each 
                        member of any panel of independent medical 
                        experts selected under subparagraph (D)(ii)) is 
                        selected in accordance with this clause if--
                                    ``(I) the expert is selected by an 
                                intermediary which itself meets the 
                                requirements of clauses (ii) and (iii), 
                                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;
                                    ``(II) the expert is selected by an 
                                appropriately credentialed panel of 
                                physicians meeting the requirements of 
                                clauses (ii) and (iii) established by a 
                                fully accredited teaching hospital 
                                meeting such requirements;
                                    ``(III) the expert is selected by 
                                an organization described in section 
                                1152(1)(A) of the Social Security Act 
                                which meets the requirements of clauses 
                                (ii) and (iii);
                                    ``(IV) the expert is selected by an 
                                external review organization which 
                                meets the requirements of clauses (ii) 
                                and (iii) and is accredited by a 
                                private standard-setting organization 
                                meeting such requirements;
                                    ``(V) the expert is selected by a 
                                State agency which is established for 
                                the purpose of conducting independent 
                                external reviews and which meets the 
                                requirements of clauses (ii) and (iii); 
                                or
                                    ``(VI) 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, and the method 
                                of selection is devised to reasonably 
                                ensure that the expert selected meets 
                                the requirements of clauses (ii) and 
                                (iii).
                            ``(ii) Standards of performance for 
                        intermediaries.--The Secretary shall prescribe 
                        by regulation standards (in addition to the 
                        requirements of clause (iii)) which entities 
                        making selections under subclause (I), (II), 
                        (III), (IV), (V), or (VI) of clause (ii) must 
                        meet in order to be eligible for making such 
                        selections. Such standards shall include (but 
                        are not limited to)--
                                    ``(I) assurance that the entity 
                                will carry out specified duties in the 
                                course of exercising the entity's 
                                responsibilities under clause (i)(I),
                                    ``(II) assurance that applicable 
                                deadlines will be met in the exercise 
                                of such responsibilities, and
                                    ``(III) assurance that the entity 
                                meets appropriate indicators of 
                                solvency and fiscal integrity.
                        Each such entity shall provide to the 
                        Secretary, in such manner and at such times as 
                        the Secretary may prescribe, information 
                        relating the volume of claims with respect to 
                        which the entity has served under this 
                        subparagraph, the types of such claims, and 
                        such other information regarding such claims as 
                        the Secretary may determine appropriate.
                            ``(iii) 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.
                            ``(iv) 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.
                            ``(v) 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.
                    ``(I) 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 (H)(iii),
                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).
                    ``(J) Benefit exclusions maintained.--Nothing in 
                this paragraph shall be construed as providing for or 
                requiring the coverage of items or services for which 
                benefits are specifically excluded under the group 
                health plan or any health insurance coverage offered in 
                connection with the plan.
            ``(5) Permitted alternatives to required forms of 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 or any decision upon 
                review thereof 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 
                for each group of similarly situated participants and 
                beneficiaries. Upon voluntary election of such 
                procedure by the plan and by the aggrieved participant 
                or beneficiary in connection with the decision, the 
                plan may provide under such procedure (in a manner 
                consistent with such regulations as the Secretary may 
                prescribe to ensure equitable procedures) for waiver of 
                the review of the decision under paragraph (3) or 
                waiver of further review of the decision under 
                paragraph (4) or section 502 or for election by such 
                parties of an alternative means of external review 
                (other than review under paragraph (4)).
                    ``(B) Requirements.--An alternative dispute 
                resolution procedure meets the requirements of this 
                subparagraph, in connection with any decision, if--
                            ``(i) such procedure is utilized solely--
                                    ``(I) in 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 both the 
                                aggrieved participant or beneficiary 
                                and the plan,
                            ``(ii) 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
                            ``(iii) the means of resolution of dispute 
                        allow for adequate presentation by each party 
                        of scientific and medical evidence supporting 
                        the position of such party.
            ``(6) Review requirements.--In any review of a decision 
        issued under this subsection--
                    ``(A) the record shall be maintained for purposes 
                of any further review in accordance with standards 
                which shall be prescribed in regulations of the 
                Secretary designed to facilitate such further 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.
            ``(7) 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 of subtitle B of title I of the 
        Employee Retirement Income Security Act of 1974.
            ``(8) Limitation on applicability of special rules.--The 
        preceding provisions of this subsection shall not apply with 
        respect to employee benefit plans that are not group health 
        plans or with respect to benefits that are not included group 
        health plan benefits (as defined in paragraph (10)(S)).
            ``(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 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 
                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 
                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 3 
                days, or such 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 period as may be prescribed in regulations of the 
                Secretary, except that, 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 panel of such 
                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.
                    ``(S) Included group health plan benefit.--The term 
                `included group health plan benefit'' means a benefit 
                under a group health plan which is not an excepted 
                benefit (as defined in section 733(c)).''.
    (b) Civil Penalties.--
            (1) In general.--Section 502(c) of such Act (29 U.S.C. 
        1132(c)) is amended by redesignating paragraphs (6) and (7) as 
        paragraphs (7) and (8), respectively, and by inserting after 
        paragraph (5) the following new paragraph:
    ``(6)(A)(i) In the case of any failure to timely provide an 
included group health plan benefit (as defined in section 
503(b)(10)(S)) to a participant or beneficiary, which occurs after the 
issuance of, and in violation of, a final decision rendered upon 
completion of external review (under section 503(b)(4)) of an adverse 
coverage decision by the plan relating to such benefit, any person 
acting in the capacity of a fiduciary of the plan so as to cause such 
failure may, in the court's discretion, be liable to the aggrieved 
participant or beneficiary for a civil penalty.
    ``(ii) Except as provided in clause (iii), such civil penalty shall 
be in an amount of up to $1,000 a day from the date that occurs on or 
after the date of the issuance of the decision under section 503(b)(4) 
and upon which the plan otherwise could have been reasonably expected 
to commence compliance with the decision until the date the failure to 
provide the benefit is corrected.
    ``(iii) In any case in which it is proven by clear and convincing 
evidence that the person referred to in clause (i) acted willfully and 
in bad faith, the daily penalty under clause (ii) shall be increased to 
an amount of up to $5,000 a day.
    ``(iv) In any case in which it is further proven by clear and 
convincing evidence that--
            ``(I) the plan is not in full compliance with the decision 
        of the independent medical expert (or panel of such experts) 
        under section 503(b)(4)(E)) within the appropriate period 
        specified in such decision, and
            ``(II) the failure to be in full compliance was caused by 
        the plan or by a health insurance issuer offering health 
        insurance coverage in connection with the plan,
the plan shall pay the cost of all medical care which was not provided 
by reason of such failure to fully comply and which is otherwise 
obtained by the participant or beneficiary from any provider.
    ``(B) For purposes of subparagraph (A), the plan, and any health 
insurance issuer offering health insurance coverage in connection with 
the plan, shall be deemed to be in compliance with any decision of an 
independent medical expert (or panel of such experts) under section 
503(b)(4) with respect to any participant or beneficiary upon 
transmission to such entity (or panel) and to such participant or 
beneficiary by the plan or issuer of timely notice of an authorization 
of coverage by the plan or issuer which is consistent with such 
decision.
    ``(C) In any action commenced under subsection (a) by a participant 
or beneficiary with respect to an included group health plan benefit in 
which the plaintiff alleges that a person, in the capacity of a 
fiduciary and in violation of the terms of the plan or this title, has 
taken an action resulting in an adverse coverage decision in violation 
of the terms of the plan, or has failed to take an action for which 
such person is responsible under the plan and which is necessary under 
the plan for a favorable coverage decision, upon finding in favor of 
the plaintiff, if such action was commenced after a final decision of 
the plan upon review which included a review under section 503(b)(4) or 
such action was commenced under subsection (b)(4) of this section, the 
court shall cause to be served on the defendant an order requiring the 
defendant--
            ``(i) to cease and desist from the alleged action or 
        failure to act; and
            ``(ii) to pay to the plaintiff a reasonable attorney's fee 
        and other reasonable costs relating to the prosecution of the 
        action on the charges on which the plaintiff prevails.
The remedies provided under this subparagraph shall be in addition to 
remedies otherwise provided under this section.
    ``(D)(i) The Secretary may assess a civil penalty against a person 
acting in the capacity of a fiduciary of one or more group health plans 
(as defined in section 503(b)(9)) for--
            ``(I) any pattern or practice of repeated adverse coverage 
        decisions in connection with included group health plan 
        benefits in violation of the terms of the plan or plans or this 
        title; or
            ``(II) any pattern or practice of repeated violations of 
        the requirements of section 503 in connection with such 
        benefits.
Such penalty shall be payable only upon proof by clear and convincing 
evidence of such pattern or practice.
    ``(ii) Such penalty shall be in an amount not to exceed the lesser 
of--
            ``(I) 5 percent of the aggregate value of benefits shown by 
        the Secretary to have not been provided, or unlawfully delayed 
        in violation of section 503, under such pattern or practice; or
            ``(II) $100,000.
    ``(iii) Any person acting in the capacity of a fiduciary of a group 
health plan or plans who has engaged in any such pattern or practice in 
connection with included group health plan benefits, upon the petition 
of the Secretary, may be removed by the court from that position, and 
from any other involvement, with respect to such plan or plans, and may 
be precluded from returning to any such position or involvement for a 
period determined by the court.
    ``(E) For purposes of this paragraph, the term `included group 
health plan benefit' has the meaning provided in section 503(b)(10)(S).
    ``(F) The preceding provisions of this paragraph shall not apply 
with respect to employee benefit plans that are not group health plans 
or with respect to benefits that are not included group health plan 
benefits (as defined in paragraph (10)(S)).''.
            (2) Conforming amendment.--Section 502(a)(6) of such Act 
        (29 U.S.C. 1132(a)(6)) is amended by striking ``, or (6)'' and 
        inserting ``, (6), or (7)''.
    (c) Expedited Court Review.--Section 502 of such Act (29 U.S.C. 
1132) is amended--
            (1) in subsection (a)(8), by striking ``or'' at the end;
            (2) in subsection (a)(9), by striking the period and 
        inserting ``; or'';
            (3) by adding at the end of subsection (a) the following 
        new paragraph:
    ``(10) by a participant or beneficiary for appropriate relief under 
subsection (b)(4).''.
            (4) by adding at the end of subsection (b) the following 
        new paragraph:
    ``(4) In any case in which exhaustion of administrative remedies in 
accordance with paragraph (2)(A)(ii) or (2)(B)(ii) of section 503(b) 
otherwise necessary for an action for relief under paragraph (1)(B) or 
(3) of subsection (a) has not been obtained and it is demonstrated to 
the court by means of certification by an appropriate physician that 
such exhaustion is not reasonably attainable under the facts and 
circumstances without undue risk of irreparable harm to the health of 
the participant or beneficiary, a civil action may be brought by a 
participant or beneficiary to obtain appropriate equitable relief. Any 
determinations made under paragraph (2)(A)(ii) or (2)(B)(ii) of section 
503(b) made while an action under this paragraph is pending shall be 
given due consideration by the court in any such action.''.
    (d) Attorney's Fees.--Section 502(g) of such Act (29 U.S.C. 
1132(g)) is amended--
            (1) in paragraph (1), by striking ``paragraph (2)'' and 
        inserting ``paragraph (2) or (3))''; and
            (2) by adding at the end the following new paragraph:
    ``(3) In any action under this title by a participant or 
beneficiary in connection with an included group health plan benefit 
(as defined in section 503(b)(10)(S)) in which judgment in favor of the 
participant or beneficiary is awarded, the court shall allow a 
reasonable attorney's fee and costs of action to the participant or 
beneficiary.''.
    (e) Standard of Review Unaffected.--The standard of review under 
section 502 of the Employee Retirement Income Security Act of 1974 (as 
amended by this section) shall continue on and after the date of the 
enactment of this Act to be the standard of review which was applicable 
under such section as of immediately before such date.
    (f) Concurrent Jurisdiction.--Section 502(e)(1) of such Act (29 
U.S.C. 1132(e)(1)) is amended--
            (1) in the first sentence, by striking ``under subsection 
        (a)(1)(B) of this section'' and inserting ``under subsection 
        (a)(1)(A) for relief under subsection (c)(6), under subsection 
        (a)(1)(B), and under subsection (b)(4)''; and
            (2) in the last sentence, by striking ``of actions under 
        paragraphs (1)(B) and (7) of subsection (a) of this section'' 
        and inserting ``of actions under paragraph (1)(A) of subsection 
        (a) for relief under subsection (c)(6) and of actions under 
        paragraphs (1)(B) and (7) of subsection (a) and paragraph (4) 
        of subsection (b)''.

SEC. 122. SPECIAL RULE FOR ACCESS TO SPECIALTY CARE.

    Section 503(b) of such Act (as added by the preceding provisions of 
this subtitle) is amended by adding at the end the following new 
paragraph:
            ``(11) Special rule for access to specialty care.--
                    ``(A) In general.--In the case of a request for 
                advance determination of coverage consisting of a 
                request by a physician for a determination of coverage 
                of the services of a specialist with respect to any 
                condition, if coverage of the services of such 
                specialist for such condition is otherwise provided 
                under the plan, the initial coverage decision referred 
                to in subparagraph (A)(i) or (B)(i) of paragraph (2) 
                shall be issued within the accelerated need decision 
                period.
                    ``(B) Specialist.--For purposes of this paragraph, 
                the term `specialist' means, with respect to a 
                condition, a physician who has a high level of 
                expertise through appropriate training and experience 
                (including, in the case of a patient who is a child, 
                appropriate pediatric expertise) to treat the 
                condition.''.

SEC. 123. REQUIREMENTS FOR TREATMENT OF PRESCRIPTION DRUGS AND MEDICAL 
              DEVICES AS EXPERIMENTAL OR INVESTIGATIONAL.

    Section 609 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1169) is amended--
            (1) by redesignating subsection (e) as subsection (f); and
            (2) by inserting after subsection (d) the following new 
        subsection:
    ``(e) Requirements for Treatment of Prescription Drugs and Medical 
Devices as Experimental or Investigational.--
            ``(1) In general.--No use of a prescription drug or medical 
        device shall be considered experimental or investigational in 
        connection with a group health plan if such use is included in 
        the labeling authorized by the Food and Drug Administration 
        under section 505, 513, or 515 of the Federal Food, Drug, and 
        Cosmetic Act or under secton 351 of the Public Health Service 
        Act, unless clinical benefit has not been adequately 
        demonstrated based on analysis of reliable authoritative 
        scientific evidence.
            ``(2) Construction.--Nothing in this subsection shall be 
        construed as--
                    ``(A) requiring a group health plan to provide any 
                coverage of prescription drugs or medical devices, or
                    ``(B) precluding a group health plan from 
                considering medical devices cleared through premarket 
                notification under section 510(k) of the Federal Food, 
                Drug, and Cosmetic Act as investigational.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) The term `group health plan' shall have the 
                meaning provided such term under such section 733.
                    ``(B) The term `clinical benefit' means improvement 
                in net health outcome (including but not limited to 
                length of life or ability to function) or in any 
                objectively measurable criterion that is reasonably 
                likely to predict clinical benefit to an extent at 
                least equivalent to the extent that is achievable under 
                the usual conditions of medical practice under 
                established alternatives.
                    ``(C) The term `reliable authoritative evidence' 
                means well-designed and well-conducted investigations 
                published in peer-reviewed scientific journals.''.

SEC. 124. PROTECTION FOR CERTAIN INFORMATION DEVELOPED TO REDUCE 
              MORTALITY OR MORBIDITY OR FOR IMPROVING PATIENT CARE AND 
              SAFETY.

    (a) Protection of Certain Information.--Notwithstanding any other 
provision of Federal or State law, health care response information 
shall be exempt from any disclosure requirement (regardless of whether 
the requirement relates to subpoenas, discovery, introduction of 
evidence, testimony, or any other form of disclosure), in connection 
with a civil or administrative proceeding under Federal or State law, 
to the same extent as information developed by a health care provider 
with respect to any of the following:
            (1) Peer review.
            (2) Utilization review.
            (3) Quality management or improvement.
            (4) Quality control.
            (5) Risk management.
            (6) Internal review for purposes of reducing mortality, 
        morbidity, or for improving patient care or safety.
    (b) No Waiver of Protection Through Interaction With Accrediting 
Body.--Notwithstanding any other provision of Federal or State law, the 
protection of health care response information from disclosure provided 
under subsection (a) shall not be deemed to be modified or in any way 
waived by--
            (1) the development of such information in connection with 
        a request or requirement of an accrediting body; or
            (2) the transfer of such information to an accrediting 
        body.
    (c) Definitions.--For purposes of this section:
            (1) The term ``accrediting body'' means a national, not-
        for-profit organization that--
                    (A) accredits health care providers; and
                    (B) is recognized as an accrediting body by statute 
                or by a Federal or State agency that regulates health 
                care providers.
            (2) The term ``health care provider'' has the meaning given 
        such term in section 1188 of the Social Security Act (as added 
        by section 5001 of this Act).
            (3) The term ``health care response information'' means 
        information (including any data, report, record, memorandum, 
        analysis, statement, or other communication) developed by, or 
        on behalf of, a health care provider in response to a serious, 
        adverse, patient-related event--
                    (A) during the course of analyzing or studying the 
                event and its causes; and
                    (B) for purposes of--
                            (i) reducing mortality or morbidity; or
                            (ii) improving patient care or safety 
                        (including the provider's notification to an 
                        accrediting body and the provider's plans of 
                        action in response to such event).
            (5) The term ``State'' includes the District of Columbia, 
        Puerto Rico, the Virgin Islands, Guam, American Samoa, and the 
        Northern Mariana Islands.

SEC. 125. EFFECTIVE DATE.

    (a) In General.--The amendments made by sections 801 and 802 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. The amendments made by section 
803 shall take effect on such January 1.
    (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.

     Subtitle D--Small Business Access and Choice for Entrepreneurs

SEC. 131. 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 two options 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 Comprehensive Access and Responsibility in 
        Health Care 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 
                Comprehensive Access and Responsibility in Health Care 
                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 Comprehensive Access and Responsibility in Health Care 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) all such coverage options under the plan are actively 
        marketed to such participating employers; 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 Comprehensive Access and Responsibility in 
        Health Care 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 Comprehensive Access and 
Responsibility in Health Care 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.--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 
                Comprehensive Access and Responsibility in Health Care 
                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.
    ``(c) Applicability Only With Respect to Included Group Health Plan 
Benefits.--
            ``(1) In general.--The requirements for certification under 
        this part in the case of any association health plan shall 
        apply only in connection with included group health plan 
        benefits provided under such plan.
            ``(2) Included group health plan benefits.--For purposes of 
        paragraph (1), the term `included group health plan benefit' 
        means a benefit which is not an excepted benefit (as defined in 
        section 733(c)).''.
    (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 Comprehensive Access and Responsibility in 
Health Care 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. 132. 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. 133. 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 Comprehensive Access and 
        Responsibility in Health Care 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 Comprehensive Access and Responsibility 
        in Health Care 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. 134. 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. 135. 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. 136. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

    (a) Effective Date.--The amendments made by sections 131, 134, and 
135 shall take effect on January 1, 2001. The amendments made by 
sections 132 and 133 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 subtitle 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 131) 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 subtitle)) 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.

 Subtitle E--Health Care Access, Affordability, and Quality Commission

SEC. 141. 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 policy 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) Studies of critical areas.--Based on information 
        gathered by appropriate Federal agencies, advisory groups, and 
        other appropriate sources for health care information, studies, 
        and data, the Commission shall study and report on in each of 
        the following areas:
                    ``(A) Independent expert external review programs.
                    ``(B) Consumer friendly information programs.
                    ``(C) The extent to which the following affect 
                patient quality and satisfaction:
                            ``(i) health plan enrollees' attitudes 
                        based on surveys;
                            ``(ii) outcomes measurements; and
                            ``(iii) accreditation by private 
                        organizations.
                    ``(D) Available systems to ensure the timely 
                processing of claims.
            ``(2) Establishment of form for remittance of claims to 
        providers.--Not later than 2 years after the date of the first 
meeting of the Commission, the Commission shall develop and transmit to 
the Secretary a proposed form for use by health insurance issuers (as 
defined in section 733(b)(2)) for the remittance of claims to health 
care providers. Effective for plan years beginning after 5 years after 
the date of the Comprehensive Access and Responsibility in Health Care 
Act of 1999, a health insurance issuer offering health insurance 
coverage in connection with a group health plan shall use such form for 
the remittance of all claims to providers.
            ``(3) 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.
            ``(4) 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.
            ``(5) 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.
            ``(6) 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 section.''.

SEC. 142. EFFECTIVE DATE.

    This subtitle shall be effective 6 months after the date of the 
enactment of this Act.

         TITLE II--AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT

     Subtitle A--Patient Protections and Point of Service Coverage 
                              Requirements

SEC. 201. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, EMERGENCY 
              MEDICAL CARE, OBSTETRIC AND GYNECOLOGICAL CARE, PEDIATRIC 
              CARE, AND CONTINUITY OF CARE.

    (a) In General.--Subpart 2 of part A of title XXVII of the Public 
Health Service Act is amended by adding at the end the following new 
section:

``SEC. 2707. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, EMERGENCY 
              MEDICAL CARE, OBSTETRIC AND GYNECOLOGICAL CARE, PEDIATRIC 
              CARE, AND CONTINUITY OF CARE.

    ``(a) Patient Access to Unrestricted Medical Advice.--
            ``(1) In general.--In the case of any health care 
        professional acting within the lawful scope of practice in the 
        course of carrying out a contractual employment arrangement or 
        other direct contractual arrangement between such professional 
        and a group health plan or a health insurance issuer offering 
        health insurance coverage in connection with a group health 
plan, the plan or issuer with which such contractual employment 
arrangement or other direct contractual arrangement is maintained by 
the professional may not impose on such professional under such 
arrangement any prohibition or restriction with respect to advice, 
provided to a participant or beneficiary under the plan who is a 
patient, 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 health insurance 
coverage offered in connection with the plan.
            ``(2) Health care professional defined.--For purposes of 
        this paragraph, 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.
            ``(3) Rule of construction.--Nothing in this subsection 
        shall be construed to require the sponsor of a group health 
        plan or a health insurance issuer offering health insurance 
        coverage in connection with the group health plan to engage in 
        any practice that would violate its religious beliefs or moral 
        convictions.
    ``(b) Patient Access to Emergency Medical Care.--
            ``(1) Coverage of emergency services.--
                    ``(A) In general.--If a group health plan, or 
                health insurance coverage offered by a health insurance 
                issuer, provides any benefits with respect to emergency 
                services (as defined in subparagraph (B)(ii)), or 
                ambulance services, the plan or issuer shall cover 
                emergency services (including emergency ambulance 
                services as defined in subparagraph (B)(iii)) furnished 
                under the plan or coverage--
                            ``(i) without the need for any prior 
                        authorization determination;
                            ``(ii) whether or not the health care 
                        provider furnishing such services is a 
                        participating provider with respect to such 
                        services;
                            ``(iii) in a manner so that, if such 
                        services are provided to a participant, 
                        beneficiary, or enrollee by a nonparticipating 
                        health care provider, the participant, 
                        beneficiary, or enrollee is not liable for 
                        amounts that exceed the amounts of liability 
                        that would be incurred if the services were 
                        provided by a participating provider; and
                            ``(iv) without regard to any other term or 
                        condition of such plan or coverage (other than 
                        exclusion or coordination of benefits, or an 
                        affiliation or waiting period, permitted under 
                        section 2701 and other than applicable cost 
                        sharing).
                    ``(B) Definitions.--In this subsection:
                            ``(i) Emergency medical condition.--The 
                        term `emergency medical condition' means--
                                    ``(I) a medical condition 
                                manifesting itself by acute symptoms of 
                                sufficient severity (including severe 
                                pain) such that a prudent layperson, 
                                who possesses an average knowledge of 
                                health and medicine, could reasonably 
                                expect the absence of immediate medical 
                                attention to result in a condition 
                                described in clause (i), (ii), or (iii) 
                                of section 1867(e)(1)(A) of the Social 
                                Security Act (42 U.S.C. 
                                1395dd(e)(1)(A)); and
                                    ``(II) a medical condition 
                                manifesting itself in a neonate by 
                                acute symptoms of sufficient severity 
                                (including severe pain) such that a 
                                prudent health care professional could 
                                reasonably expect the absence of 
                                immediate medical attention to result 
                                in a condition described in clause (i), 
                                (ii), or (iii) of section 1867(e)(1)(A) 
                                of the Social Security Act.
                            ``(ii) Emergency services.--The term 
                        `emergency services' means--
                                    ``(I) with respect to an emergency 
                                medical condition described in clause 
                                (i)(I), a medical screening examination 
                                (as required under section 1867 of the 
                                Social Security Act, 42 U.S.C. 1395dd)) 
                                that is within the capability of the 
                                emergency department of a hospital, 
                                including ancillary services routinely 
                                available to the emergency department 
                                to evaluate an emergency medical 
                                condition (as defined in clause (i)) 
                                and also, within the capabilities of 
                                the staff and facilities at the 
                                hospital, such further medical 
                                examination and treatment as are 
                                required under section 1867 of such Act 
                                to stabilize the patient; or
                                    ``(II) with respect to an emergency 
                                medical condition described in clause 
                                (i)(II), medical treatment for such 
                                condition rendered by a health care 
                                provider in a hospital to a neonate, 
                                including available hospital ancillary 
                                services in response to an urgent 
                                request of a health care professional 
                                and to the extent necessary to 
                                stabilize the neonate.
                            ``(iii) Emergency ambulance services.--The 
                        term `emergency ambulance services' means 
ambulance services (as defined for purposes of section 1861(s)(7) of 
the Social Security Act) furnished to transport an individual who has 
an emergency medical condition (as defined in clause (i)) to a hospital 
for the receipt of emergency services (as defined in clause (ii)) in a 
case in which appropriate emergency medical screening examinations are 
covered under the plan or coverage pursuant to paragraph (1)(A) and a 
prudent layperson, with an average knowledge of health and medicine, 
could reasonably expect that the absence of such transport would result 
in placing the health of the individual in serious jeopardy, serious 
impairment of bodily function, or serious dysfunction of any bodily 
organ or part.
                            ``(iv) Stabilize.--The term `to stabilize' 
                        means, with respect to an emergency medical 
                        condition, to provide such medical treatment of 
                        the condition as may be necessary to assure, 
                        within reasonable medical probability, that no 
                        material deterioration of the condition is 
                        likely to result from or occur during the 
                        transfer of the individual from a facility.
                            ``(v) Nonparticipating.--The term 
                        `nonparticipating' means, with respect to a 
                        health care provider that provides health care 
                        items and services to a participant or 
                        beneficiary under group health plan or under 
                        group health insurance coverage, a health care 
                        provider that is not a participating health 
                        care provider with respect to such items and 
                        services.
                            ``(vi) Participating.--The term 
                        `participating' means, with respect to a health 
                        care provider that provides health care items 
                        and services to a participant or beneficiary 
                        under group health plan or health insurance 
                        coverage offered by a health insurance issuer 
                        in connection with such a plan, a health care 
                        provider that furnishes such items and services 
                        under a contract or other arrangement with the 
                        plan or issuer.
    ``(c) Patient Right to Obstetric and Gynecological Care.--
            ``(1) 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)--
                    ``(A) provides benefits under the terms of the plan 
                consisting of--
                            ``(i) gynecological care (such as 
                        preventive women's health examinations); or
                            ``(ii) obstetric care (such as pregnancy-
                        related services),
                provided by a participating health care professional 
                who specializes in such care (or provides benefits 
                consisting of payment for such care); and
                    ``(B) 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 health care professional, then the 
        plan (or issuer) shall meet the requirements of paragraph (2).
            ``(2) Requirements.--A group health plan (or a health 
        insurance issuer offering health insurance coverage in 
        connection with the plan) meets the requirements of this 
        paragraph, in connection with benefits described in paragraph 
        (1) consisting of care described in clause (i) or (ii) of 
        paragraph (1)(A) (or consisting of payment therefor), if the 
        plan (or issuer)--
                    ``(A) does not require authorization or a referral 
                by the primary care provider in order to obtain such 
                benefits; and
                    ``(B) treats the ordering of other care of the same 
                type, by the participating health care professional 
                providing the care described in clause (i) or (ii) of 
                paragraph (1)(A), as the authorization of the primary 
                care provider with respect to such care.
            ``(3) Health care professional defined.--For purposes of 
        this subsection, the term `health care professional' means an 
        individual (including, but not limited to, a nurse midwife or 
        nurse practitioner) who is licensed, accredited, or certified 
        under State law to provide obstetric and gynecological health 
        care services and who is operating within the scope of such 
        licensure, accreditation, or certification.
            ``(4) Construction.--Nothing in paragraph (1) shall be 
        construed as preventing a plan from offering (but not requiring 
        a participant or beneficiary to accept) a health care 
        professional trained, credentialed, and operating within the 
        scope of their licensure to perform obstetric and gynecological 
        health care services. Nothing in paragraph (2)(B) shall waive 
        any requirements of coverage relating to medical necessity or 
        appropriateness with respect to coverage of gynecological or 
        obstetric care so ordered.
            ``(5) Treatment of multiple coverage options.--In the case 
        of a plan providing benefits under two or more coverage 
        options, the requirements of this subsection shall apply 
        separately with respect to each coverage option.
    ``(d) Patient Right to Pediatric Care.--
            ``(1) 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 health care professional 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 health care 
        professional may be designated, if available, by a parent or 
guardian of any beneficiary under the plan who is under 18 years of 
age, as the primary care provider with respect to any such benefits.
            ``(2) Health care professional defined.--For purposes of 
        this subsection, the term `health care professional' means an 
        individual who is licensed, accredited, or certified under 
        State law to provide pediatric health care services and who is 
        operating within the scope of such licensure, accreditation, or 
        certification.
            ``(3) Construction.--Nothing in paragraph (1) shall be 
        construed as preventing a plan from offering (but not requiring 
        a participant or beneficiary to accept) a health care 
        professional trained, credentialed, and operating within the 
        scope of their licensure to perform pediatric health care 
        services. Nothing in paragraph (1) shall waive any requirements 
        of coverage relating to medical necessity or appropriateness 
        with respect to coverage of pediatric care so ordered.
            ``(4) Treatment of multiple coverage options.--In the case 
        of a plan providing benefits under two or more coverage 
        options, the requirements of this subsection shall apply 
        separately with respect to each coverage option.
    ``(e) Continuity of Care.--
            ``(1) In general.--
                    ``(A) Termination of provider.--If a contract 
                between a group health plan, or a health insurance 
                issuer offering health insurance coverage in connection 
                with a group health plan, and a health care provider is 
                terminated (as defined in subparagraph (D)(ii)), or 
                benefits or coverage provided by a health care provider 
                are terminated because of a change in the terms of 
                provider participation in a group health plan, and an 
                individual who, at the time of such termination, is a 
                participant or beneficiary in the plan and is scheduled 
                to undergo surgery (including an organ 
                transplantation), is undergoing treatment for 
                pregnancy, or is determined to be terminally ill (as 
                defined in section 1861(dd)(3)(A) of the Social 
                Security Act) and is undergoing treatment for the 
                terminal illness, the plan or issuer shall--
                            ``(i) notify the individual on a timely 
                        basis of such termination and of the right to 
                        elect continuation of coverage of treatment by 
                        the provider under this subsection; and
                            ``(ii) subject to paragraph (3), permit the 
                        individual to elect to continue to be covered 
                        with respect to treatment by the provider for 
                        such surgery, pregnancy, or illness during a 
                        transitional period (provided under paragraph 
                        (2)).
                    ``(B) Treatment of termination of contract with 
                health insurance issuer.--If a contract for the 
                provision of health insurance coverage between a group 
                health plan and a health insurance issuer is terminated 
                and, as a result of such termination, coverage of 
                services of a health care provider is terminated with 
                respect to an individual, the provisions of 
                subparagraph (A) (and the succeeding provisions of this 
                subsection) shall apply under the plan in the same 
                manner as if there had been a contract between the plan 
                and the provider that had been terminated, but only 
                with respect to benefits that are covered under the 
                plan after the contract termination.
                    ``(C) Termination defined.--For purposes of this 
                subsection, the term `terminated' includes, with 
                respect to a contract, the expiration or nonrenewal of 
                the contract, but does not include a termination of the 
                contract by the plan or issuer for failure to meet 
                applicable quality standards or for fraud.
            ``(2) Transitional period.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) through (D), the transitional period 
                under this paragraph shall extend up to 90 days (as 
                determined by the treating health care professional) 
                after the date of the notice described in paragraph 
                (1)(A)(i) of the provider's termination.
                    ``(B) Scheduled surgery.--If surgery was scheduled 
                for an individual before the date of the announcement 
                of the termination of the provider status under 
                paragraph (1)(A)(i), the transitional period under this 
                paragraph with respect to the surgery shall extend 
                beyond the period under subparagraph (A) and until the 
                date of discharge of the individual after completion of 
                the surgery.
                    ``(C) Pregnancy.--If--
                            ``(i) a participant or beneficiary was 
                        determined to be pregnant at the time of a 
                        provider's termination of participation, and
                            ``(ii) the provider was treating the 
                        pregnancy before date of the termination,
                the transitional period under this paragraph with 
                respect to provider's treatment of the pregnancy shall 
                extend through the provision of post-partum care 
                directly related to the delivery.
                    ``(D) Terminal illness.--If--
                            ``(i) a participant or beneficiary was 
                        determined to be terminally ill (as determined 
                        under section 1861(dd)(3)(A) of the Social 
                        Security Act) at the time of a provider's 
                        termination of participation, and
                            ``(ii) the provider was treating the 
                        terminal illness before the date of 
                        termination,
                the transitional period under this paragraph shall 
                extend for the remainder of the individual's life for 
                care directly related to the treatment of the terminal 
                illness or its medical manifestations.
            ``(3) Permissible terms and conditions.--A group health 
        plan or health insurance issuer may condition coverage of 
continued treatment by a provider under paragraph (1)(A)(i) upon the 
individual notifying the plan of the election of continued coverage and 
upon the provider agreeing to the following terms and conditions:
                    ``(A) The provider agrees to accept reimbursement 
                from the plan or issuer and individual involved (with 
                respect to cost-sharing) at the rates applicable prior 
                to the start of the transitional period as payment in 
                full (or, in the case described in paragraph (1)(B), at 
                the rates applicable under the replacement plan or 
                issuer after the date of the termination of the 
                contract with the health insurance issuer) and not to 
                impose cost-sharing with respect to the individual in 
                an amount that would exceed the cost-sharing that could 
                have been imposed if the contract referred to in 
                paragraph (1)(A) had not been terminated.
                    ``(B) The provider agrees to adhere to the quality 
                assurance standards of the plan or issuer responsible 
                for payment under subparagraph (A) and to provide to 
                such plan or issuer necessary medical information 
                related to the care provided.
                    ``(C) The provider agrees otherwise to adhere to 
                such plan's or issuer's policies and procedures, 
                including procedures regarding referrals and obtaining 
                prior authorization and providing services pursuant to 
                a treatment plan (if any) approved by the plan or 
                issuer.
                    ``(D) The provider agrees to provide transitional 
                care to all participants and beneficiaries who are 
                eligible for and elect to have coverage of such care 
                from such provider.
                    ``(E) If the provider initiates the termination, 
                the provider has notified the plan within 30 days prior 
                to the effective date of the termination of--
                            ``(i) whether the provider agrees to 
                        permissible terms and conditions (as set forth 
                        in this paragraph) required by the plan, and
                            ``(ii) if the provider agrees to the terms 
                        and conditions, the specific plan beneficiaries 
                        and participants undergoing a course of 
                        treatment from the provider who the provider 
                        believes, at the time of the notification, 
                        would be eligible for transitional care under 
                        this subsection.
            ``(4) Construction.--Nothing in this subsection shall be 
        construed to--
                    ``(A) require the coverage of benefits which would 
                not have been covered if the provider involved remained 
                a participating provider, or
                    ``(B) prohibit a group health plan from 
                conditioning a provider's participation on the 
                provider's agreement to provide transitional care to 
                all participants and beneficiaries eligible to obtain 
                coverage of such care furnished by the provider as set 
                forth under this subsection.
    ``(f) Coverage for Individuals Participating in Approved Cancer 
Clinical Trials.--
            ``(1) Coverage.--
                    ``(A) In general.--If a group health plan (or a 
                health insurance issuer offering health insurance 
                coverage) provides coverage to a qualified individual 
                (as defined in paragraph (2)), the plan or issuer--
                            ``(i) may not deny the individual 
                        participation in the clinical trial referred to 
                        in paragraph (2)(B);
                            ``(ii) subject to paragraphs (2), (3), and 
                        (4), may not deny (or limit or impose 
                        additional conditions on) the coverage of 
                        routine patient costs for items and services 
                        furnished in connection with participation in 
                        the trial; and
                            ``(iii) may not discriminate against the 
                        individual on the basis of the participation of 
                        the participant or beneficiary in such trial.
                    ``(B) Exclusion of certain costs.--For purposes of 
                subparagraph (A)(ii), routine patient costs do not 
                include the cost of the tests or measurements conducted 
                primarily for the purpose of the clinical trial 
                involved.
                    ``(C) Use of in-network providers.--If one or more 
                participating providers is participating in a clinical 
                trial, nothing in subparagraph (A) shall be construed 
                as preventing a plan from requiring that a qualified 
                individual participate in the trial through such a 
                participating provider if the provider will accept the 
                individual as a participant in the trial.
            ``(2) Qualified individual defined.--For purposes of 
        paragraph (1), the term `qualified individual' means an 
        individual who is a participant or beneficiary in a group 
        health plan and who meets the following conditions:
                    ``(A)(i) The individual has been diagnosed with 
                cancer.
                    ``(ii) The individual is eligible to participate in 
                an approved clinical trial according to the trial 
                protocol with respect to treatment of cancer.
                    ``(iii) The individual's participation in the trial 
                offers meaningful potential for significant clinical 
                benefit for the individual.
                    ``(B) Either--
                            ``(i) the referring physician is a 
                        participating health care professional and has 
                        concluded that the individual's participation 
                        in such trial would be appropriate based upon 
                        satisfaction by the individual of the 
                        conditions described in subparagraph (A); or
                            ``(ii) the individual provides medical and 
                        scientific information establishing that the 
                        individual's participation in such trial would 
                        be appropriate based upon the satisfaction by 
                        the individual of the conditions described in 
                        subparagraph (A).
            ``(3) Payment.--
                    ``(A) In general.--A group health plan (or a health 
                insurance issuer offering health insurance coverage) 
                shall provide for payment for routine patient costs 
                described in paragraph (1)(B) but is not required to 
                pay for costs of items and services that are reasonably 
                expected to be paid for by the sponsors of an approved 
                clinical trial.
                    ``(B) Routine patient care costs.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `routine patient care 
                        costs' shall include the costs associated with 
                        the provision of items and services that--
                                    ``(I) would otherwise be covered 
                                under the group health plan if such 
                                items and services were not provided in 
                                connection with an approved clinical 
                                trial program; and
                                    ``(II) are furnished according to 
                                the protocol of an approved clinical 
                                trial program.
                            ``(ii) Exclusion.--For purposes of this 
                        paragraph, `routine patient care costs' shall 
                        not include the costs associated with the 
                        provision of--
                                    ``(I) an investigational drug or 
                                device, unless the Secretary has 
                                authorized the manufacturer of such 
                                drug or device to charge for such drug 
                                or device; or
                                    ``(II) any item or service supplied 
                                without charge by the sponsor of the 
                                approved clinical trial program.
                    ``(C) Payment rate.--For purposes of this 
                subsection--
                            ``(i) Participating providers.--In the case 
                        of covered items and services provided by a 
                        participating provider, the payment rate shall 
                        be at the agreed upon rate.
                            ``(ii) Nonparticipating providers.--In the 
                        case of covered items and services provided by 
                        a nonparticipating provider, the payment rate 
                        shall be at the rate the plan would normally 
                        pay for comparable items or services under 
                        clause (i).
            ``(4) Approved clinical trial defined.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `approved clinical trial' means a cancer 
                clinical research study or cancer clinical 
                investigation approved by an Institutional Review 
                Board.
                    ``(B) Conditions for departments.--The conditions 
                described in this paragraph, for a study or 
                investigation conducted by a Department, are that the 
                study or investigation has been reviewed and approved 
                through a system of peer review that the Secretary 
                determines--
                            ``(i) to be comparable to the system of 
                        peer review of studies and investigations used 
                        by the National Institutes of Health, and
                            ``(ii) assures unbiased review of the 
                        highest scientific standards by qualified 
                        individuals who have no interest in the outcome 
                        of the review.
            ``(5) Construction.--Nothing in this subsection shall be 
        construed to limit a plan's coverage with respect to clinical 
        trials.
            ``(6) Plan satisfaction of certain requirements; 
        responsibilities of fiduciaries.--
                    ``(A) In general.--For purposes of this subsection, 
                insofar as a group health plan provides benefits in the 
                form of health insurance coverage through a health 
                insurance issuer, the plan shall be treated as meeting 
                the requirements of this subsection with respect to 
                such benefits and not be considered as failing to meet 
                such requirements because of a failure of the issuer to 
                meet such requirements so long as the plan sponsor or 
                its representatives did not cause such failure by the 
                issuer.
                    ``(B) Construction.--Nothing in this subsection 
                shall be construed to affect or modify the 
                responsibilities of the fiduciaries of a group health 
                plan under part 4 of subtitle B of title I of the 
                Employee Retirement Income Security Act of 1974.
            ``(7) Study and report.--
                    ``(A) Study.--The Secretary shall analyze cancer 
                clinical research and its cost implications for managed 
                care, including differentiation in--
                            ``(i) the cost of patient care in trials 
                        versus standard care;
                            ``(ii) the cost effectiveness achieved in 
                        different sites of service;
                            ``(iii) research outcomes;
                            ``(iv) volume of research subjects 
                        available in different sites of service;
                            ``(v) access to research sites and clinical 
                        trials by cancer patients;
                            ``(vi) patient cost sharing or copayment 
                        costs realized in different sites of service;
                            ``(vii) health outcomes experienced in 
                        different sites of service;
                            ``(viii) long term health care services and 
                        costs experienced in different sites of 
                        service;
                            ``(ix) morbidity and mortality experienced 
                        in different sites of service; and
                            ``(x) patient satisfaction and preference 
                        of sites of service.
                    ``(B) Report to congress.--Not later than January 
                1, 2005, the Secretary shall submit a report to 
                Congress that contains--
                            ``(i) an assessment of any incremental cost 
                        to group health plans resulting from the 
                        provisions of this section;
                            ``(ii) a projection of expenditures to such 
                        plans resulting from this section;
                            ``(iii) an assessment of any impact on 
                        premiums resulting from this section; and
                            ``(iv) recommendations regarding action on 
                        other diseases.''.

SEC. 202. REQUIRING HEALTH MAINTENANCE ORGANIZATIONS TO OFFER OPTION OF 
              POINT-OF-SERVICE COVERAGE.

    Title XXVII of the Public Health Service Act is amended by 
inserting after section 2713 the following new section:

``SEC. 2714. REQUIRING OFFERING OF OPTION OF POINT-OF-SERVICE COVERAGE.

    ``(a) Requirement to Offer Coverage Option to Certain Employers.--
Except as provided in subsection (c), any health insurance issuer 
which--
            ``(1) is a health maintenance organization (as defined in 
        section 2791(b)(3)); and
            ``(2) which provides for coverage of services of one or 
        more classes of health care professionals under health 
        insurance coverage offered in connection with a group health 
        plan only if such services are furnished exclusively through 
        health care professionals within such class or classes who are 
        members of a closed panel of health care professionals,
the issuer shall make available to the plan sponsor in connection with 
such a plan a coverage option which provides for coverage of such 
services which are furnished through such class (or classes) of health 
care professionals regardless of whether or not the professionals are 
members of such panel.
    ``(b) Requirement to Offer Supplemental Coverage to Participants in 
Certain Cases.--Except as provided in subsection (c), if a health 
insurance issuer makes available a coverage option under and described 
in subsection (a) to a plan sponsor of a group health plan and the 
sponsor declines to contract for such coverage option, then the issuer 
shall make available in the individual insurance market to each 
participant in the group health plan optional separate supplemental 
health insurance coverage in the individual health insurance market 
which consists of services identical to those provided under such 
coverage provided through the closed panel under the group health plan 
but are furnished exclusively by health care professionals who are not 
members of such a closed panel.
    ``(c) Exceptions.--
            ``(1) Offering of non-panel option.--Subsections (a) and 
        (b) shall not apply with respect to a group health plan if the 
        plan offers a coverage option that provides coverage for 
        services that may be furnished by a class or classes of health 
        care professionals who are not in a closed panel. This 
        paragraph shall be applied separately to distinguishable groups 
        of employees under the plan.
            ``(2) Availability of coverage through healthmart.--
        Subsections (a) and (b) shall not apply to a group health plan 
        if the health insurance coverage under the plan is made 
        available through a HealthMart (as defined in section 2801) and 
        if any health insurance coverage made available through the 
        HealthMart provides for coverage of the services of any class 
        of health care professionals other than through a closed panel 
        of professionals.
            ``(3) Relicensure exemption.--Subsections (a) and (b) shall 
        not apply to a health maintenance organization in a State in 
        any case in which--
                    ``(A) the organization demonstrates to the 
                applicable authority that the organization has made a 
                good faith effort to obtain (but has failed to obtain) 
                a contract between the organization and any other 
                health insurance issuer providing for the coverage 
                option or supplemental coverage described in subsection 
                (a) or (b), as the case may be, within the applicable 
                service area of the organization; and
                    ``(B) the State requires the organization to 
                receive or qualify for a separate license, as an 
                indemnity insurer or otherwise, in order to offer such 
                coverage option or supplemental coverage, respectively.
        The applicable authority may require that the organization 
        demonstrate that it meets the requirements of the previous 
        sentence no more frequently than once every 2 years.
            ``(4) Increased costs.--Subsections (a) and (b) shall not 
        apply to a health maintenance organization if the organization 
        demonstrates to the applicable authority, in accordance with 
        generally accepted actuarial practice, that, on either a 
        prospective or retroactive basis, the premium for the coverage 
        option or supplemental coverage required to be made available 
        under such respective subsection exceeds by more than 1 percent 
        the premium for the coverage consisting of services which are 
        furnished through a closed panel of health care professionals 
        in the class or classes involved. The applicable authority may 
        require that the organization demonstrate such an increase no 
        more frequently than once every 2 years. This paragraph shall 
        be applied on an average per enrollee or similar basis.
            ``(5) Collective bargaining agreements.--Subsections (a) 
        and (b) shall not apply in connection with a group health plan 
if the plan is established or maintained pursuant to one or more 
collective bargaining agreements.
            ``(6) Small issuers.--Subsections (a) and (b) shall not 
        apply in the case of a health insurance issuer with 25,000 or 
        fewer covered lives.
    ``(d) Definitions.--For purposes of this section:
            ``(1) Coverage through closed panel.--Health insurance 
        coverage for a class of health care professionals shall be 
        treated as provided through a closed panel of such 
        professionals only if such coverage consists of coverage of 
        items or services consisting of professionals services which 
        are reimbursed for or provided only within a limited network of 
        such professionals.
            ``(2) Health care professional.--The term `health care 
        professional' has the meaning given such term in section 
        2707(a)(2).''.

SEC. 203. 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 Health and Human Services 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.

               Subtitle B--Patient Access to Information

SEC. 111. PATIENT ACCESS TO INFORMATION REGARDING PLAN COVERAGE, 
              MANAGED CARE PROCEDURES, HEALTH CARE PROVIDERS, AND 
              QUALITY OF MEDICAL CARE.

    (a) In General.--Subpart 2 of part A of title XXVII of the Public 
Health Service Act (as amended by subtitle A) is amended further by 
adding at the end the following new section:

``SEC. 2708. DISCLOSURE BY GROUP HEALTH PLANS.

    ``(a) Disclosure Requirement.--Each health insurance issuer 
offering health insurance coverage in connection with a group health 
plan shall provide the plan administrator on a timely basis with the 
information necessary to enable the administrator to provide 
participants and beneficiaries with information in a manner and to an 
extent consistent with the requirements of section 111 of the Employee 
Retirement Income Security Act of 1974. To the extent that any such 
issuer provides such information on a timely basis to plan participants 
and beneficiaries, the requirements of this subsection 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 an investigational item or 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.
            ``(3) 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.
    ``(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 of the type described in section 503 of the Employee 
Retirement Income Security Act of 1974, 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 on Plan Performance.--Any information required 
under subsection (a) shall include information concerning the number of 
external reviews of the type described in section 503 of the Employee 
Retirement Income Security Act of 1974 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.
    ``(f) Information Included With Adverse Coverage Decisions.--A 
health insurance issuer offering health insurance coverage in 
connection with a group health plan shall provide to each participant 
and beneficiary, together with any notification of the participant or 
beneficiary of an adverse coverage decision, the following information:
            ``(1) Preauthorization and utilization review procedures.--
        A description of the basis on which any preauthorization 
        requirement or any utilization review requirement has resulted 
        in the adverse coverage decision.
            ``(2) Procedures for determining exclusions based on 
        medical necessity or on investigational items or experimental 
        treatments.--If the adverse coverage decision is based on a 
        determination relating to medical necessity or to an 
        investigational item or an experimental treatment or 
        technology, a description of the procedures and medically-based 
        criteria used in such decision.
    ``(g) Information Available on Request.--
            ``(1) Access to plan benefit information in electronic 
        form.--
                    ``(A) In general.--A health insurance issuer 
                offering health insurance coverage in connection with a 
                group health plan may, upon written request (made not 
                more frequently than annually), make available to 
                participants and beneficiaries, in a generally 
                recognized electronic format--
                            ``(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 otherwise 
                required to be provided under this subsection, 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) 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.
                            ``(ii) 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.
                            ``(iii) Accreditation status of health 
                        insurance issuers and service providers.--A 
                        description of the accreditation and licensing 
                        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 licensing authority.
                            ``(iv) Quality performance measures.--The 
                        latest information (if any) maintained by the 
                        health insurance issuer 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.
                    ``(C) Information required from health care 
                professionals.--
                            ``(i) Qualifications, privileges, and 
                        method of compensation.--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.
                            ``(ii) Cost of procedures.--Any health care 
                        professional who recommends an elective 
                        procedure or treatment while treating a 
                        participant or beneficiary under a group health 
                        plan that requires a participant or beneficiary 
                        to share in the cost of treatment shall inform 
                        such participant or beneficiary of each cost 
                        associated with the procedure or treatment and 
an estimate of the magnitude of such costs.
                    ``(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.
    ``(h) 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 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).
    ``(i) Advance Notice of Changes in Drug Formularies.--Not later 
than 30 days before the effective date of any exclusion of a specific 
drug or biological from any drug formulary under health insurance 
coverage offered by a health insurance issuer in connection with a 
group health plan that is used in the treatment of a chronic illness or 
disease, the issuer 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.
    ``(j) Definitions and Related Rules.--
            ``(1) In general.--For purposes of this section--
                    ``(A) Group health plan.--The term `group health 
                plan' has the meaning provided such term under section 
                733(a)(1).
                    ``(B) Medical care.--The term `medical care' has 
                the meaning provided such term under section 733(a)(2).
                    ``(C) Health insurance coverage.--The term `health 
                insurance coverage' has the meaning provided such term 
                under section 733(b)(1).
                    ``(D) Health insurance issuer.--The term `health 
                insurance issuer' has the meaning provided such term 
                under section 733(b)(2).
            ``(2) Applicability only in connection with included group 
        health plan benefits.--
                    ``(A) In general.--The requirements of this section 
                shall apply only in connection with included group 
                health plan benefits.
                    ``(B) Included group health plan benefit.--For 
                purposes of subparagraph (A), the term `included group 
                health plan benefit' means a benefit which is not an 
                excepted benefit (as defined in section 2791(c)).''.

SEC. 212. REQUIREMENTS FOR TREATMENT OF PRESCRIPTION DRUGS AND MEDICAL 
              DEVICES AS EXPERIMENTAL OR INVESTIGATIONAL.

    Subpart 2 of part A of title XXVII of the Public Health Service Act 
(as amended by 211) is amended further by adding at the end the 
following new section:

``SEC. 2709. REQUIREMENTS FOR TREATMENT OF PRESCRIPTION DRUGS AND 
              MEDICAL DEVICES AS EXPERIMENTAL OR INVESTIGATIONAL.

    ``(a) In General.--No use of a prescription drug or medical device 
shall be considered experimental or investigational in connection with 
health insurance coverage offered by a health insurance issuer in 
connection with a group health plan if such use is included in the 
labeling authorized by the Food and Drug Administration under section 
505, 513, or 515 of the Federal Food, Drug, and Cosmetic Act or under 
secton 351 of the Public Health Service Act, unless clinical benefit 
has not been adequately demonstrated based on analysis of reliable 
authoritative scientific evidence.
    ``(b) Construction.--Nothing in this section shall be construed 
as--
            ``(1) requiring a health insurance issuer offering health 
        insurance coverage in connection with a group health plan to 
        provide any coverage of prescription drugs or medical devices, 
        or
            ``(2) precluding a health insurance offering health 
        insurance coverage in connection with a group health plan from 
        considering medical devices cleared through premarket 
        notification under section 510(k) of the Federal Food, Drug, 
        and Cosmetic Act as investigational.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Terms used in this section which are defined in 
        section 2791 shall have the meanings provided such terms under 
        such section, respectively.
            ``(2) The term `clinical benefit' means improvement in net 
        health outcome (including but not limited to length of life or 
        ability to function) or in any objectively measurable criterion 
        that is reasonably likely to predict clinical benefit to an 
        extent at least equivalent to the extent that is achievable 
        under the usual conditions of medical practice under 
        established alternatives.
            ``(3) The term `reliable authoritative evidence' means 
        well-designed and well-conducted investigations published in 
        peer-reviewed scientific journals.''.

SEC. 213. EFFECTIVE DATE AND RELATED RULES.

    (a) In General.--The amendments made by section 211 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 of Labor shall first issue all regulations necessary to 
carry out the amendments made by this subtitle before such date.
    (b) Limitation on Enforcement Actions.--No enforcement action shall 
be taken, pursuant to the amendments made by this subtitle, against a 
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 issuer 
has sought to comply in good faith with such requirement.

                        Subtitle C--HealthMarts

SEC. 221. EXPANSION OF CONSUMER CHOICE THROUGH HEALTHMARTS.

    (a) In General.--The Public Health Service Act is amended by adding 
at the end the following new title:

                      ``TITLE XXVIII--HEALTHMARTS

``SEC. 2801. DEFINITION OF HEALTHMART.

    ``(a) In General.--For purposes of this title, the term 
`HealthMart' means a legal entity that meets the following 
requirements:
            ``(1) Organization.--The HealthMart is an organization 
        operated under the direction of a board of directors which is 
        composed of representatives of not fewer than 2 from each of 
        the following:
                    ``(A) Small employers, if coverage is offered 
                through the HealthMart to small employers.
                    ``(B) Employees of such small employers.
                    ``(C) Individuals (other than those who are 
                employees of employers) who are eligible to participate 
                in the HealthMart, if coverage is offered through 
                HealthMarts for individuals who are not employees of 
                small employers.
                    ``(D) Health care providers, which may be 
                physicians, other health care professionals, health 
                care facilities, or any combination thereof.
                    ``(E) Entities, such as insurance companies, health 
                maintenance organizations, and licensed provider-
                sponsored organizations, that underwrite or administer 
                health benefits coverage.
            ``(2) Offering health benefits coverage.--
                    ``(A) Different groups.--
                            ``(i) In general.--The HealthMart, in 
                        conjunction with those health insurance issuers 
                        that offer health benefits coverage through the 
                        HealthMart, makes available health benefits 
                        coverage in the manner described in subsection 
                        (b) to either or both of the following:
                                    ``(I) All small employers and 
                                eligible employees of those employers, 
                                and the dependents of such employees.
                                    ``(II) Other individuals (including 
                                self-employed individuals), and the 
                                dependents of such individuals, who are 
                                employees of an employer but not 
                                including employees of employers.
                            ``(ii) Manner of offering.--Such coverage 
                        shall be made available in the manner described 
                        in subsection (c)(2) at rates (including 
                        employer's and employee's share, if applicable) 
                        that are established by the health insurance 
                        issuer on a policy or product specific basis 
                        and that may vary only as permissible under 
                        State law. A HealthMart is deemed to be a group 
                        health plan for purposes of applying section 
                        702 of the Employee Retirement Income Security 
                        Act of 1974, section 2702 of this Act, and 
                        section 9802(b) of the Internal Revenue Code of 
                        1986 (which limit variation among similarly 
                        situated individuals of required premiums for 
                        health benefits coverage on the basis of health 
                        status-related factors).
                            ``(iii) Separate books of business.--The 
                        coverage that is offered to employers (and 
                        employees) described in subclause (I) of clause 
                        (i) need not be the same as that offered to 
                        individuals described in subclause (II) of such 
                        clause and the HealthMart shall establish 
                        premiums for coverage under each such subclause 
                        as a separate book of business.
                    ``(B) Nondiscrimination in coverage offered.--
                            ``(i) In general.--Subject to clause (ii), 
                        if a HealthMart offers coverage in a geographic 
                        area (as specified under paragraph (3)(A)) to 
                        eligible employees or individuals, the 
                        HealthMart shall offer the same coverage to all 
                        such employees or individuals in the same 
                        geographic area. Section 2711(a)(1)(B) of this 
                        Act limits denial of enrollment of certain 
                        eligible individuals under health benefits 
                        coverage in the small group market.
                            ``(ii) Construction.--Nothing in this title 
                        shall be construed as requiring or permitting a 
                        health insurance issuer to provide coverage 
                        outside the service area of the issuer, as 
                        approved under State law.
                    ``(C) No financial underwriting.--The HealthMart 
                provides health benefits coverage only through 
                contracts with health insurance issuers and does not 
                assume insurance risk with respect to such coverage.
            ``(3) Geographic areas.--
                    ``(A) Specification of geographic areas.--The 
                HealthMart shall specify the geographic area (or areas) 
                in which it makes available health benefits coverage 
                offered by health insurance issuers to employers, or 
                individuals, as the case may be. Any such area shall 
                encompass at least one entire county or equivalent 
                area.
                    ``(B) Multistate areas.--In the case of a 
                HealthMart that serves more than one State, such 
                geographic areas may be areas that include portions of 
                two or more contiguous States.
                    ``(C) Multiple healthmarts permitted in single 
                geographic area.--Nothing in this title shall be 
                construed as preventing the establishment and operation 
                of more than one HealthMart in a geographic area or as 
                limiting the number of HealthMarts that may operate in 
                any area.
            ``(4) Provision of administrative services to purchasers.--
                    ``(A) In general.--The HealthMart provides 
                administrative services for purchasers. Such services 
                may include accounting, billing, enrollment 
                information, and employee coverage status reports.
                    ``(B) Construction.--Nothing in this subsection 
                shall be construed as preventing a HealthMart from 
                serving as an administrative service organization to 
                any entity.
            ``(5) Dissemination of information.--The HealthMart 
        collects and disseminates (or arranges for the collection and 
        dissemination of) consumer-oriented information on the scope, 
        cost, and enrollee satisfaction of all coverage options offered 
        through the HealthMart to its members and eligible individuals. 
        Such information shall be defined by the HealthMart and shall 
        be in a manner appropriate to the type of coverage offered. To 
        the extent practicable, such information shall include 
        information on provider performance, locations and hours of 
        operation of providers, outcomes, and similar matters. Nothing 
        in this section shall be construed as preventing the 
        dissemination of such information or other information by the 
        HealthMart or by health insurance issuers through electronic or 
        other means.
            ``(6) Filing information.--The HealthMart--
                    ``(A) files with the applicable Federal authority 
                information that demonstrates the HealthMart's 
                compliance with the applicable requirements of this 
                title; or
                    ``(B) in accordance with rules established under 
                section 2803(a), files with a State such information as 
                the State may require to demonstrate such compliance.
    ``(b) Health Benefits Coverage Requirements.--
            ``(1) Compliance with consumer protection requirements.--
        Any health benefits coverage offered through a HealthMart 
        shall--
                    ``(A) be underwritten by a health insurance issuer 
                that--
                            ``(i) is licensed (or otherwise regulated) 
                        under State law,
                            ``(ii) meets all applicable State standards 
                        relating to consumer protection, subject to 
                        section 2802(b), and
                            ``(iii) offers the coverage under a 
                        contract with the HealthMart;
                    ``(B) subject to paragraph (2), be approved or 
                otherwise permitted to be offered under State law; and
                    ``(C) provide full portability of creditable 
                coverage for individuals who remain members of the same 
                HealthMart notwithstanding that they change the 
                employer through which they are members in accordance 
                with the provisions of the parts 6 and 7 of subtitle B 
                of title I of the Employee Retirement Income Security 
                Act of 1974 and titles XXII and XXVII of this Act, so 
                long as both employers are purchasers in the 
                HealthMart, and notwithstanding that they terminate 
                such employment, if the HealthMart permits enrollment 
                directly by eligible individuals.
            ``(2) Alternative process for approval of health benefits 
        coverage in case of discrimination or delay.--
                    ``(A) In general.--The requirement of paragraph 
                (1)(B) shall not apply to a policy or product of health 
                benefits coverage offered in a State if the health 
                insurance issuer seeking to offer such policy or 
                product files an application to waive such requirement 
                with the applicable Federal authority, and the 
                authority determines, based on the application and 
                other evidence presented to the authority, that--
                            ``(i) either (or both) of the grounds 
                        described in subparagraph (B) for approval of 
                        the application has been met; and
                            ``(ii) the coverage meets the applicable 
                        State standards (other than those that have 
                        been preempted under section 2802).
                    ``(B) Grounds.--The grounds described in this 
                subparagraph with respect to a policy or product of 
                health benefits coverage are as follows:
                            ``(i) Failure to act on policy, product, or 
                        rate application on a timely basis.--The State 
                        has failed to complete action on the policy or 
                        product (or rates for the policy or product) 
                        within 90 days of the date of the State's 
                        receipt of a substantially complete 
                        application. No period before the date of the 
                        enactment of this section shall be included in 
                        determining such 90-day period.
                            ``(ii) Denial of application based on 
                        discriminatory treatment.--The State has denied 
                        such an application and--
                                    ``(I) the standards or review 
                                process imposed by the State as a 
                                condition of approval of the policy or 
                                product imposes either any material 
                                requirements, procedures, or standards 
                                to such policy or product that are not 
                                generally applicable to other policies 
                                and products offered or 
any requirements that are preempted under section 2802; or
                                    ``(II) the State requires the 
                                issuer, as a condition of approval of 
                                the policy or product, to offer any 
                                policy or product other than such 
                                policy or product.
                    ``(C) Enforcement.--In the case of a waiver granted 
                under subparagraph (A) to an issuer with respect to a 
                State, the Secretary may enter into an agreement with 
                the State under which the State agrees to provide for 
                monitoring and enforcement activities with respect to 
                compliance of such an issuer and its health insurance 
                coverage with the applicable State standards described 
                in subparagraph (A)(ii). Such monitoring and 
                enforcement shall be conducted by the State in the same 
                manner as the State enforces such standards with 
                respect to other health insurance issuers and plans, 
                without discrimination based on the type of issuer to 
                which the standards apply. Such an agreement shall 
                specify or establish mechanisms by which compliance 
                activities are undertaken, while not lengthening the 
                time required to review and process applications for 
                waivers under subparagraph (A).
            ``(3) Examples of types of coverage.--The benefits coverage 
        made available through a HealthMart may include, but is not 
        limited to, any of the following if it meets the other 
        applicable requirements of this title:
                    ``(A) Coverage through a health maintenance 
                organization.
                    ``(B) Coverage in connection with a preferred 
                provider organization.
                    ``(C) Coverage in connection with a licensed 
                provider-sponsored organization.
                    ``(D) Indemnity coverage through an insurance 
                company.
                    ``(E) Coverage offered in connection with a 
                contribution into a medical savings account or flexible 
                spending account.
                    ``(F) Coverage that includes a point-of-service 
                option.
                    ``(G) Any combination of such types of coverage.
            ``(4) Wellness bonuses for health promotion.--Nothing in 
        this title shall be construed as precluding a health insurance 
        issuer offering health benefits coverage through a HealthMart 
        from establishing premium discounts or rebates for members or 
        from modifying otherwise applicable copayments or deductibles 
        in return for adherence to programs of health promotion and 
        disease prevention so long as such programs are agreed to in 
        advance by the HealthMart and comply with all other provisions 
        of this title and do not discriminate among similarly situated 
        members.
    ``(c) Purchasers; Members; Health Insurance Issuers.--
            ``(1) Purchasers.--
                    ``(A) In general.--Subject to the provisions of 
                this title, a HealthMart shall permit any employer or 
                any individual described in subsection (a)(1)(C), if 
                coverage is offered through the HealthMart for such 
                employer or individual, to contract with the HealthMart 
                for the purchase of health benefits coverage for its 
                employees and dependents of those employees or for the 
                individual (and the individual's dependents), 
                respectively, and may not vary conditions of 
                eligibility (including premium rates and membership 
                fees) of an employer or individual to be a purchaser.
                    ``(B) Role of associations, brokers, and licensed 
                health insurance agents.--Nothing in this section shall 
                be construed as preventing an association, broker, 
                licensed health insurance agent, or other entity from 
                assisting or representing a HealthMart or employers or 
                individuals from entering into appropriate arrangements 
                to carry out this title.
                    ``(C) Exclusive nature of contract.--
                            ``(i) In general.--Subject to clause (ii), 
                        such a contract shall provide that the 
                        purchaser agrees not to obtain or sponsor 
                        health benefits coverage, on behalf of any 
                        eligible employees (and their dependents), 
                        other than through the HealthMart.
                            ``(ii) Exception if no coverage offered in 
                        area of residences.--Clause (i) shall not apply 
                        to an eligible individual who resides in an 
                        area for which no coverage is offered by any 
                        health insurance issuer through the HealthMart.
                            ``(iii) Nothing precluding individual 
                        employee opt-out.--Nothing in this subparagraph 
                        shall be construed as requiring an eligible 
                        employee of an employer that is a purchaser to 
                        obtain health benefits coverage through the 
                        HealthMart.
            ``(2) Members.--
                    ``(A) In general.--
                            ``(i) Employment based membership.--Under 
                        rules established to carry out this title, with 
                        respect to an employer that has a purchaser 
                        contract with a HealthMart, individuals who are 
                        employees of the employer may enroll for group 
                        health benefits coverage (including coverage 
                        for dependents of such enrolling employees) 
                        offered by a health insurance issuer through 
                        the HealthMart.
                            ``(ii) Individuals.--Under rules 
                        established to carry out this title, with 
                        respect to an individual who has a purchaser 
                        contract with a HealthMart for himself or 
                        herself, the individual may enroll for 
                        individual health benefits coverage (including 
                        coverage for dependents of such individual) 
                        offered by a health insurance issuer through 
                        the HealthMart. Nothing in this clause shall be 
                        construed as requiring a HealthMart to offer 
coverage to individuals in any geographic area.
                    ``(B) Nondiscrimination in enrollment.--A 
                HealthMart may not deny enrollment as a member to an 
                individual who is an employee or individual (or 
                dependent of such an employee or individual) eligible 
                to be so enrolled based on health status-related 
                factors, except as may be permitted consistent with 
                section 2742(b).
                    ``(C) Annual open enrollment period.--In the case 
                of members enrolled in health benefits coverage offered 
                by a health insurance issuer through a HealthMart, 
                subject to subparagraph (D), the HealthMart shall 
                provide for an annual open enrollment period of 30 days 
                during which such members may change the coverage 
                option in which the members are enrolled.
                    ``(D) Rules of eligibility.--Nothing in this 
                paragraph shall preclude a HealthMart from establishing 
                rules of employee or individual eligibility for 
                enrollment and reenrollment of members during the 
                annual open enrollment period under subparagraph (C). 
                Such rules shall be applied consistently to all 
                purchasers and members within the HealthMart and shall 
                not be based in any manner on health status-related 
                factors and may not conflict with sections 2701 and 
                2702 of this Act.
            ``(3) Health insurance issuers.--
                    ``(A) Premium collection.--The contract between a 
                HealthMart and a health insurance issuer shall provide, 
                with respect to a member enrolled with health benefits 
                coverage offered by the issuer through the HealthMart, 
                for the payment of the premiums collected by the 
                HealthMart (or the issuer) for such coverage (less a 
                pre-determined administrative charge negotiated by the 
                HealthMart and the issuer) to the issuer.
                    ``(B) Scope of service area.--Nothing in this title 
                shall be construed as requiring the service area of a 
                health insurance issuer with respect to health 
                insurance coverage to cover the entire geographic area 
                served by a HealthMart.
                    ``(C) Availability of coverage options.--A 
                HealthMart shall enter into contracts with one or more 
                health insurance issuers in a manner that assures that 
                at least 2 health insurance coverage options are made 
                available in the geographic area specified under 
                subsection (a)(3)(A).
    ``(d) Prevention of Conflicts of Interest.--
            ``(1) For boards of directors.--A member of a board of 
        directors of a HealthMart may not serve as an employee or paid 
        consultant to the HealthMart, but may receive reasonable 
        reimbursement for travel expenses for purposes of attending 
        meetings of the board or committees thereof.
            ``(2) For boards of directors or employees.--An individual 
        is not eligible to serve in a paid or unpaid capacity on the 
        board of directors of a HealthMart or as an employee of the 
        HealthMart, if the individual is employed by, represents in any 
        capacity, owns, or controls any ownership interest in an 
        organization from whom the HealthMart receives contributions, 
        grants, or other funds not connected with a contract for 
        coverage through the HealthMart.
            ``(3) Employment and employee representatives.--
                    ``(A) In general.--An individual who is serving on 
                a board of directors of a HealthMart as a 
                representative described in subparagraph (A) or (B) of 
                section 2801(a)(1) shall not be employed by or 
                affiliated with a health insurance issuer or be 
                licensed as or employed by or affiliated with a health 
                care provider.
                    ``(B) Construction.--For purposes of subparagraph 
                (A), the term ``affiliated'' does not include 
                membership in a health benefits plan or the obtaining 
                of health benefits coverage offered by a health 
                insurance issuer.
    ``(e) Construction.--
            ``(1) Network of affiliated healthmarts.--Nothing in this 
        section shall be construed as preventing one or more 
        HealthMarts serving different areas (whether or not contiguous) 
        from providing for some or all of the following (through a 
        single administrative organization or otherwise):
                    ``(A) Coordinating the offering of the same or 
                similar health benefits coverage in different areas 
                served by the different HealthMarts.
                    ``(B) Providing for crediting of deductibles and 
                other cost-sharing for individuals who are provided 
                health benefits coverage through the HealthMarts (or 
                affiliated HealthMarts) after--
                            ``(i) a change of employers through which 
                        the coverage is provided, or
                            ``(ii) a change in place of employment to 
                        an area not served by the previous HealthMart.
            ``(2) Permitting healthmarts to adjust distributions among 
        issuers to reflect relative risk of enrollees.--Nothing in this 
        section shall be construed as precluding a HealthMart from 
        providing for adjustments in amounts distributed among the 
        health insurance issuers offering health benefits coverage 
        through the HealthMart based on factors such as the relative 
        health care risk of members enrolled under the coverage offered 
        by the different issuers.

``SEC. 2802. APPLICATION OF CERTAIN LAWS AND REQUIREMENTS.

    ``(a) Authority of States.--Nothing in this section shall be 
construed as preempting State laws relating to the following:
            ``(1) The regulation of underwriters of health coverage, 
        including licensure and solvency requirements.
            ``(2) The application of premium taxes and required 
        payments for guaranty funds or for contributions to high-risk 
        pools.
            ``(3) The application of fair marketing requirements and 
        other consumer protections (other than those specifically 
        relating to an item described in subsection (b)).
            ``(4) The application of requirements relating to the 
        adjustment of rates for health insurance coverage.
    ``(b) Treatment of Benefit and Grouping Requirements.--State laws 
insofar as they relate to any of the following are superseded and, 
except as provided under section 2801(c)(3)(C), shall not apply to 
health benefits coverage made available through a HealthMart:
            ``(1) Benefit requirements for health benefits coverage 
        offered through a HealthMart, including (but not limited to) 
        requirements relating to coverage of specific providers, 
        specific services or conditions, or the amount, duration, or 
        scope of benefits, but not including requirements to the extent 
        required to implement title XXVII or other Federal law and to 
        the extent the requirement prohibits an exclusion of a specific 
        disease from such coverage.
            ``(2) Requirements (commonly referred to as fictitious 
        group laws) relating to grouping and similar requirements for 
        such coverage to the extent such requirements impede the 
        establishment and operation of HealthMarts pursuant to this 
        title.
            ``(3) Any other requirements (including limitations on 
        compensation arrangements) that, directly or indirectly, 
        preclude (or have the effect of precluding) the offering of 
        such coverage through a HealthMart, if the HealthMart meets the 
        requirements of this title.
Any State law or regulation relating to the composition or organization 
of a HealthMart is preempted to the extent the law or regulation is 
inconsistent with the provisions of this title.
    ``(c) Application of ERISA Fiduciary and Disclosure Requirements.--
The board of directors of a HealthMart is deemed to be a plan 
administrator of an employee welfare benefit plan which is a group 
health plan for purposes of applying parts 1 and 4 of subtitle B of 
title I of the Employee Retirement Income Security Act of 1974 and 
those provisions of part 5 of such subtitle which are applicable to 
enforcement of such parts 1 and 4, and the HealthMart shall be treated 
as such a plan and the enrollees enrolled on the basis of employment 
shall be treated as participants and beneficiaries for purposes of 
applying such provisions pursuant to this subsection.
    ``(d) Application of ERISA Renewability Protection.--A HealthMart 
is deemed to be group health plan that is a multiple employer welfare 
arrangement for purposes of applying section 703 of the Employee 
Retirement Income Security Act of 1974.
    ``(e) Application of Rules for Network Plans and Financial 
Capacity.--The provisions of subsections (c) and (d) of section 2711 
apply to health benefits coverage offered by a health insurance issuer 
through a HealthMart.
    ``(f) Construction Relating to Offering Requirement.--Nothing in 
section 2711(a) of this Act or 703 of the Employee Retirement Income 
Security Act of 1974 shall be construed as permitting the offering 
outside the HealthMart of health benefits coverage that is only made 
available through a HealthMart under this section because of the 
application of subsection (b).
    ``(g) Application to Guaranteed Renewability Requirements in Case 
of Discontinuation of an Issuer.--For purposes of applying section 2712 
in the case of health insurance coverage offered by a health insurance 
issuer through a HealthMart, if the contract between the HealthMart and 
the issuer is terminated and the HealthMart continues to make available 
any health insurance coverage after the date of such termination, the 
following rules apply:
            ``(1) Renewability.--The HealthMart shall fulfill the 
        obligation under such section of the issuer renewing and 
        continuing in force coverage by offering purchasers (and 
        members and their dependents) all available health benefits 
        coverage that would otherwise be available to similarly-
        situated purchasers and members from the remaining 
        participating health insurance issuers in the same manner as 
        would be required of issuers under section 2712(c).
            ``(2) Application of association rules.--The HealthMart 
        shall be considered an association for purposes of applying 
        section 2712(e).
    ``(h) Construction in Relation to Certain Other Laws.--Nothing in 
this title shall be construed as modifying or affecting the 
applicability to HealthMarts or health benefits coverage offered by a 
health insurance issuer through a HealthMart of parts 6 and 7 of 
subtitle B of title I of the Employee Retirement Income Security Act of 
1974 or titles XXII and XXVII of this Act.

``SEC. 2803. ADMINISTRATION.

    ``(a) In General.--The applicable Federal authority shall 
administer this title and is authorized to issue such regulations as 
may be required to carry out this title. Such regulations shall promote 
the active development of Healthmarts and first be issued in final form 
not later than 6 months after the date of the enactment of this title 
and shall be subject to Congressional review under the provisions of 
chapter 8 of title 5, United States Code. The applicable Federal 
authority shall incorporate the process of `deemed file and use' with 
respect to the information filed under section 2801(a)(6)(A) and shall 
determine whether information filed by a HealthMart demonstrates 
compliance with the applicable requirements of this title. Such 
authority shall exercise its authority under this title in a manner 
that fosters and promotes the development of HealthMarts in order to 
improve access to health care coverage and services.
    ``(b) Periodic Reports.--The applicable Federal authority shall 
submit to Congress a report every 30 months, during the 10-year period 
beginning on the effective date of the rules promulgated by the 
applicable Federal authority to carry out this title, on the 
effectiveness of this title in promoting coverage of uninsured 
individuals. Such authority may provide for the production of such 
reports through one or more contracts with appropriate private 
entities.

``SEC. 2804. DEFINITIONS.

    ``For purposes of this title:
            ``(1) Applicable federal authority.--The term `applicable 
        Federal authority' means the Secretary of Health and Human 
        Services .
            ``(2) Eligible employee or individual.--The term `eligible' 
        means, with respect to an employee or other individual and a 
        HealthMart, an employee or individual who is eligible under 
        section 2801(c)(2) to enroll or be enrolled in health benefits 
        coverage offered through the HealthMart.
            ``(3) Employer; employee; dependent.--Except as the 
        applicable Federal authority may otherwise provide, the terms 
        `employer', `employee', and `dependent', as applied to health 
        insurance coverage offered by a health insurance issuer 
        licensed (or otherwise regulated) in a State, shall have the 
        meanings applied to such terms with respect to such coverage 
        under the laws of the State relating to such coverage and such 
        an issuer. The term `dependent' may include the spouse and 
        children of the individual involved.
            ``(4) Health benefits coverage.--The term `health benefits 
        coverage' has the meaning given the term group health insurance 
        coverage in section 2791(b)(4).
            ``(5) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning given such term in section 2791(b)(2).
            ``(6) Health status-related factor.--The term `health 
        status-related factor' has the meaning given such term in 
        section 2791(d)(9).
            ``(7) Healthmart.--The term `HealthMart' is defined in 
        section 2801(a).
            ``(8) Member.--The term `member`` means, with respect to a 
        HealthMart, an individual enrolled for health benefits coverage 
        through the HealthMart under section 2801(c)(2).
            ``(9) Purchaser.--The term `purchaser' means, with respect 
        to a HealthMart, an employer or individual that has contracted 
        under section 2801(c)(1)(A) with the HealthMart for the 
        purchase of health benefits coverage.
            ``(10) Small employer.--The term `small employer' has the 
        meaning given such term in section 2791(e)(4), but also 
        includes any employer if--
                    ``(A) such employer met the requirements under such 
                section for any preceding calendar year after 1998, and
                    ``(B) such employer employed an average of 250 or 
                fewer employees on business days during each preceding 
                calendar year after 1998.''.

               Subtitle D--Community Health Organizations

SEC. 231. PROMOTION OF PROVISION OF INSURANCE BY COMMUNITY HEALTH 
              ORGANIZATIONS.

    (a) Waiver of State Licensure Requirement for Community Health 
Organizations in Certain Cases.--Subpart I of part D of title III of 
the Public Health Service Act is amended by adding at the end the 
following new section:

     ``waiver of state licensure requirement for community health 
                     organizations in certain cases

    ``Sec. 330B. (a) Waiver Authorized.--
            ``(1) In general.--A community health organization may 
        offer health insurance coverage in a State notwithstanding that 
        it is not licensed in such a State to offer such coverage if--
                    ``(A) the organization files an application for 
                waiver of the licensure requirement with the Secretary 
                of Health and Human Services (in this section referred 
                to as the `Secretary') by not later than November 1, 
                2003; and
                    ``(B) the Secretary determines, based on the 
                application and other evidence presented to the 
                Secretary, that any of the grounds for approval of the 
                application described in subparagraph (A), (B), or (C) 
                of paragraph (2) has been met.
            ``(2) Grounds for approval of waiver.--
                    ``(A) Failure to act on licensure application on a 
                timely basis.--The ground for approval of such a waiver 
                application described in this subparagraph is that the 
                State has failed to complete action on a licensing 
                application of the organization within 90 days of the 
                date of the State's receipt of a substantially complete 
                application. No period before the date of the enactment 
                of this section shall be included in determining such 
                90-day period.
                    ``(B) Denial of application based on discriminatory 
                treatment.--The ground for approval of such a waiver 
                application described in this subparagraph is that the 
                State has denied such a licensing application and the 
                standards or review process imposed by the State as a 
                condition of approval of the license or as the basis 
                for such denial by the State imposes any material 
                requirements, procedures, or standards (other than 
                solvency requirements) to such organizations that are 
                not generally applicable to other entities engaged in a 
                substantially similar business.
                    ``(C) Denial of application based on application of 
                solvency requirements.--With respect to waiver 
                applications filed on or after the date of publication 
                of solvency standards established by the Secretary 
                under subsection (d), the ground for approval of such a 
                waiver application described in this subparagraph is 
                that the State has denied such a licensing application 
                based (in whole or in part) on the organization's 
                failure to meet applicable State solvency requirements 
                and such requirements are not the same as the solvency 
                standards established by the Secretary. For purposes of 
                this subparagraph, the term solvency requirements means 
                requirements relating to solvency and other matters 
                covered under the standards established by the 
                Secretary under subsection (d).
            ``(3) Treatment of waiver.--In the case of a waiver granted 
        under this subsection for a community health organization with 
        respect to a State--
                    ``(A) Limitation to state.--The waiver shall be 
                effective only with respect to that State and does not 
                apply to any other State.
                    ``(B) Limitation to 36-month period.--The waiver 
                shall be effective only for a 36-month period but may 
                be renewed for up to 36 additional months if the 
                Secretary determines that such an extension is 
                appropriate.
                    ``(C) Conditioned on compliance with consumer 
                protection and quality standards.--The continuation of 
                the waiver is conditioned upon the organization's 
                compliance with the requirements described in paragraph 
                (5).
                    ``(D) Preemption of state law.--Any provisions of 
                law of that State which relate to the licensing of the 
                organization and which prohibit the organization from 
                providing health insurance coverage shall be 
                superseded.
            ``(4) Prompt action on application.--The Secretary shall 
        grant or deny such a waiver application within 60 days after 
        the date the Secretary determines that a substantially complete 
        waiver application has been filed. Nothing in this section 
        shall be construed as preventing an organization which has had 
        such a waiver application denied from submitting a subsequent 
        waiver application.
            ``(5) Application and enforcement of state consumer 
        protection and quality standards.--A waiver granted under this 
        subsection to an organization with respect to licensing under 
        State law is conditioned upon the organization's compliance 
        with all consumer protection and quality standards insofar as 
        such standards--
                    ``(A) would apply in the State to the community 
                health organization if it were licensed as an entity 
                offering health insurance coverage under State law; and
                    ``(B) are generally applicable to other risk-
                bearing managed care organizations and plans in the 
                State.
            ``(6) Report.--By not later than December 31, 2002, the 
        Secretary shall submit to the Committee on Commerce of the 
        House of Representatives and the Committee on Labor and Human 
        Resources of the Senate a report regarding whether the waiver 
        process under this subsection should be continued after 
        December 31, 2003.
    ``(b) Assumption of Full Financial Risk.--To qualify for a waiver 
under subsection (a), the community health organization shall assume 
full financial risk on a prospective basis for the provision of covered 
health care services, except that the organization--
            ``(1) may obtain insurance or make other arrangements for 
        the cost of providing to any enrolled member such services the 
        aggregate value of which exceeds such aggregate level as the 
        Secretary specifies from time to time;
            ``(2) may obtain insurance or make other arrangements for 
        the cost of such services provided to its enrolled members 
        other than through the organization because medical necessity 
        required their provision before they could be secured through 
        the organization;
            ``(3) may obtain insurance or make other arrangements for 
        not more than 90 percent of the amount by which its costs for 
        any of its fiscal years exceed 105 percent of its income for 
        such fiscal year; and
            ``(4) may make arrangements with physicians or other health 
        care professionals, health care institutions, or any 
        combination of such individuals or institutions to assume all 
        or part of the financial risk on a prospective basis for the 
        provision of health services by the physicians or other health 
        professionals or through the institutions.
    ``(c) Certification of Provision Against Risk of Insolvency for 
Unlicensed CHO's.--
            ``(1) In general.--Each community health organization that 
        is not licensed by a State and for which a waiver application 
        has been approved under subsection (a)(1), shall meet standards 
        established by the Secretary under subsection (d) relating to 
        the financial solvency and capital adequacy of the 
        organization.
            ``(2) Certification process for solvency standards for 
        cho's.--The Secretary shall establish a process for the receipt 
        and approval of applications of a community health organization 
        described in paragraph (1) for certification (and periodic 
        recertification) of the organization as meeting such solvency 
        standards. Under such process, the Secretary shall act upon 
        such a certification application not later than 60 days after 
        the date the application has been received.
    ``(d) Establishment of Solvency Standards for Community Health 
Organizations.--
            ``(1) In general.--The Secretary shall establish, on an 
        expedited basis and by rule pursuant to section 553 of title 5, 
        United States Code and through the Health Resources and 
        Services Administration, standards described in subsection 
        (c)(1) (relating to financial solvency and capital adequacy) 
        that entities must meet to obtain a waiver under subsection 
        (a)(2)(C). In establishing such standards, the Secretary shall 
        consult with interested organizations, including the National 
        Association of Insurance Commissioners, the Academy of 
        Actuaries, and organizations representing Federally qualified 
        health centers.
            ``(2) Factors to consider for solvency standards.--In 
        establishing solvency standards for community health 
        organizations under paragraph (1), the Secretary shall take 
        into account--
                    ``(A) the delivery system assets of such an 
                organization and ability of such an organization to 
                provide services to enrollees;
                    ``(B) alternative means of protecting against 
                insolvency, including reinsurance, unrestricted 
                surplus, letters of credit, guarantees, organizational 
                insurance coverage, partnerships with other licensed 
                entities, and valuation attributable to the ability of 
                such an organization to meet its service obligations 
through direct delivery of care; and
                    ``(C) any standards developed by the National 
                Association of Insurance Commissioners specifically for 
                risk-based health care delivery organizations.
            ``(3) Enrollee protection against insolvency.--Such 
        standards shall include provisions to prevent enrollees from 
        being held liable to any person or entity for the 
        organization's debts in the event of the organization's 
        insolvency.
            ``(4) Deadline.--Such standards shall be promulgated in a 
        manner so they are first effective by not later than April 1, 
        1999.
    ``(e) Definitions.--In this section:
            ``(1) Community health organization.--The term `community 
        health organization' means an organization that is a Federally-
        qualified health center or is controlled by one or more 
        Federally-qualified health centers.
            ``(2) Federally-qualified health center.--The term 
        `Federally-qualified health center' has the meaning given such 
        term in section 1905(l)(2)(B) of the Social Security Act.
            ``(3) Health insurance coverage.--The term `health 
        insurance coverage' has the meaning given such term in section 
        2791(b)(1).
            ``(4) Control.--The term `control' means the possession, 
        whether direct or indirect, of the power to direct or cause the 
        direction of the management and policies of the organization 
        through membership, board representation, or an ownership 
        interest equal to or greater than 50.1 percent.''.

       TITLE III--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

                    Subtitle A--Patient Protections

SEC. 301. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, EMERGENCY 
              MEDICAL CARE, OBSTETRIC AND GYNECOLOGICAL CARE, PEDIATRIC 
              CARE, AND CONTINUITY OF CARE.

    Subchapter B of chapter 100 of the Internal Revenue Code of 1986 is 
amended--
            (1) in the table of sections, by inserting after the item 
        relating to section 9812 the following new item:

``Sec. 9813. Patient access to unrestricted medical advice, emergency 
                            medical care, obstetric and gynecological 
                            care, pediatric care, and continuity of 
                            care.''; and
            (2) by inserting after section 9812 the following:

``SEC. 9813. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, EMERGENCY 
              MEDICAL CARE, OBSTETRIC AND GYNECOLOGICAL CARE, PEDIATRIC 
              CARE, AND CONTINUITY OF CARE.

    ``(a) Patient Access to Unrestricted Medical Advice.--
            ``(1) In general.--In the case of any health care 
        professional acting within the lawful scope of practice in the 
        course of carrying out a contractual employment arrangement or 
        other direct contractual arrangement between such professional 
        and a group health plan, the plan with which such contractual 
        employment arrangement or other direct contractual arrangement 
        is maintained by the professional may not impose on such 
        professional under such arrangement any prohibition or 
        restriction with respect to advice, provided to a participant 
        or beneficiary under the plan who is a patient, 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.
            ``(2) Health care professional defined.--For purposes of 
        this paragraph, 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.
            ``(3) Rule of construction.--Nothing in this subsection 
        shall be construed to require the sponsor of a group health 
        plan to engage in any practice that would violate its religious 
        beliefs or moral convictions.
    ``(b) Patient Access to Emergency Medical Care.--
            ``(1) Coverage of emergency services.--
                    ``(A) In general.--If a group health plan provides 
                any benefits with respect to emergency services (as 
                defined in subparagraph (B)(ii)), or ambulance 
                services, the plan shall cover emergency services 
                (including emergency ambulance services as defined in 
                subparagraph (B)(iii)) furnished under the plan--
                            ``(i) without the need for any prior 
                        authorization determination;
                            ``(ii) whether or not the health care 
                        provider furnishing such services is a 
                        participating provider with respect to such 
                        services;
                            ``(iii) in a manner so that, if such 
                        services are provided to a participant or 
                        beneficiary by a nonparticipating health care 
                        provider, the participant or beneficiary is not 
                        liable for amounts that exceed the amounts of 
                        liability that would be incurred if the 
                        services were provided by a participating 
                        provider; and
                            ``(iv) without regard to any other term or 
                        condition of such plan (other than exclusion or 
                        coordination of benefits, or an affiliation or 
                        waiting period, permitted under section 701 and 
other than applicable cost sharing).
                    ``(B) Definitions.--In this subsection:
                            ``(i) Emergency medical condition.--The 
                        term `emergency medical condition' means--
                                    ``(I) a medical condition 
                                manifesting itself by acute symptoms of 
                                sufficient severity (including severe 
                                pain) such that a prudent layperson, 
                                who possesses an average knowledge of 
                                health and medicine, could reasonably 
                                expect the absence of immediate medical 
                                attention to result in a condition 
                                described in clause (i), (ii), or (iii) 
                                of section 1867(e)(1)(A) of the Social 
                                Security Act (42 U.S.C. 
                                1395dd(e)(1)(A)); and
                                    ``(II) a medical condition 
                                manifesting itself in a neonate by 
                                acute symptoms of sufficient severity 
                                (including severe pain) such that a 
                                prudent health care professional could 
                                reasonably expect the absence of 
                                immediate medical attention to result 
                                in a condition described in clause (i), 
                                (ii), or (iii) of section 1867(e)(1)(A) 
                                of the Social Security Act.
                            ``(ii) Emergency services.--The term 
                        `emergency services' means--
                                    ``(I) with respect to an emergency 
                                medical condition described in clause 
                                (i)(I), a medical screening examination 
                                (as required under section 1867 of the 
                                Social Security Act, 42 U.S.C. 1395dd)) 
                                that is within the capability of the 
                                emergency department of a hospital, 
                                including ancillary services routinely 
                                available to the emergency department 
                                to evaluate an emergency medical 
                                condition (as defined in clause (i)) 
                                and also, within the capabilities of 
                                the staff and facilities at the 
                                hospital, such further medical 
                                examination and treatment as are 
                                required under section 1867 of such Act 
                                to stabilize the patient; or
                                    ``(II) with respect to an emergency 
                                medical condition described in clause 
                                (i)(II), medical treatment for such 
                                condition rendered by a health care 
                                provider in a hospital to a neonate, 
                                including available hospital ancillary 
                                services in response to an urgent 
                                request of a health care professional 
                                and to the extent necessary to 
                                stabilize the neonate.
                            ``(iii) Emergency ambulance services.--The 
                        term `emergency ambulance services' means 
                        ambulance services (as defined for purposes of 
                        section 1861(s)(7) of the Social Security Act) 
                        furnished to transport an individual who has an 
                        emergency medical condition (as defined in 
                        clause (i)) to a hospital for the receipt of 
                        emergency services (as defined in clause (ii)) 
                        in a case in which appropriate emergency 
                        medical screening examinations are covered 
                        under the plan pursuant to paragraph (1)(A) and 
                        a prudent layperson, with an average knowledge 
                        of health and medicine, could reasonably expect 
                        that the absence of such transport would result 
                        in placing the health of the individual in 
                        serious jeopardy, serious impairment of bodily 
                        function, or serious dysfunction of any bodily 
                        organ or part.
                            ``(iv) Stabilize.--The term `to stabilize' 
                        means, with respect to an emergency medical 
                        condition, to provide such medical treatment of 
                        the condition as may be necessary to assure, 
                        within reasonable medical probability, that no 
                        material deterioration of the condition is 
                        likely to result from or occur during the 
                        transfer of the individual from a facility.
                            ``(v) Nonparticipating.--The term 
                        `nonparticipating' means, with respect to a 
                        health care provider that provides health care 
                        items and services to a participant or 
                        beneficiary under group health plan, a health 
                        care provider that is not a participating 
                        health care provider with respect to such items 
                        and services.
                            ``(vi) Participating.--The term 
                        `participating' means, with respect to a health 
                        care provider that provides health care items 
                        and services to a participant or beneficiary 
                        under group health plan, a health care provider 
                        that furnishes such items and services under a 
contract or other arrangement with the plan.
    ``(c) Patient Right to Obstetric and Gynecological Care.--
            ``(1) In general.--In any case in which a group health 
        plan--
                    ``(A) provides benefits under the terms of the plan 
                consisting of--
                            ``(i) gynecological care (such as 
                        preventive women's health examinations); or
                            ``(ii) obstetric care (such as pregnancy-
                        related services),
                provided by a participating health care professional 
                who specializes in such care (or provides benefits 
                consisting of payment for such care); and
                    ``(B) 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 health care professional, then the 
        plan shall meet the requirements of paragraph (2).
            ``(2) Requirements.--A group health plan meets the 
        requirements of this paragraph, in connection with benefits 
        described in paragraph (1) consisting of care described in 
        clause (i) or (ii) of paragraph (1)(A) (or consisting of 
        payment therefor), if the plan--
                    ``(A) does not require authorization or a referral 
                by the primary care provider in order to obtain such 
                benefits; and
                    ``(B) treats the ordering of other care of the same 
                type, by the participating health care professional 
                providing the care described in clause (i) or (ii) of 
                paragraph (1)(A), as the authorization of the primary 
                care provider with respect to such care.
            ``(3) Health care professional defined.--For purposes of 
        this subsection, the term `health care professional' means an 
        individual (including, but not limited to, a nurse midwife or 
        nurse practitioner) who is licensed, accredited, or certified 
        under State law to provide obstetric and gynecological health 
        care services and who is operating within the scope of such 
        licensure, accreditation, or certification.
            ``(4) Construction.--Nothing in paragraph (1) shall be 
        construed as preventing a plan from offering (but not requiring 
        a participant or beneficiary to accept) a health care 
        professional trained, credentialed, and operating within the 
        scope of their licensure to perform obstetric and gynecological 
        health care services. Nothing in paragraph (2)(B) shall waive 
        any requirements of coverage relating to medical necessity or 
        appropriateness with respect to coverage of gynecological or 
        obstetric care so ordered.
            ``(5) Treatment of multiple coverage options.--In the case 
        of a plan providing benefits under two or more coverage 
        options, the requirements of this subsection shall apply 
        separately with respect to each coverage option.
    ``(d) Patient Right to Pediatric Care.--
            ``(1) In general.--In any case in which a group health plan 
        provides benefits consisting of routine pediatric care provided 
        by a participating health care professional 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 
        shall provide that such a participating health care 
        professional 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.
            ``(2) Health care professional defined.--For purposes of 
        this subsection, the term `health care professional' means an 
        individual who is licensed, accredited, or certified under 
        State law to provide pediatric health care services and who is 
        operating within the scope of such licensure, accreditation, or 
        certification.
            ``(3) Construction.--Nothing in paragraph (1) shall be 
        construed as preventing a plan from offering (but not requiring 
        a participant or beneficiary to accept) a health care 
        professional trained, credentialed, and operating within the 
        scope of their licensure to perform pediatric health care 
        services. Nothing in paragraph (1) shall waive any requirements 
        of coverage relating to medical necessity or appropriateness 
        with respect to coverage of pediatric care so ordered.
            ``(4) Treatment of multiple coverage options.--In the case 
        of a plan providing benefits under two or more coverage 
        options, the requirements of this subsection shall apply 
        separately with respect to each coverage option.
    ``(e) Continuity of Care.--
            ``(1) In general.--
                    ``(A) Termination of provider.--If a contract 
                between a group health plan and a health care provider 
                is terminated (as defined in subparagraph (D)(ii)), or 
                benefits provided by a health care provider are 
                terminated because of a change in the terms of provider 
                participation in a group health plan, and an individual 
                who, at the time of such termination, is a participant 
                or beneficiary in the plan and is scheduled to undergo 
                surgery (including an organ transplantation), is 
                undergoing treatment for pregnancy, or is determined to 
                be terminally ill (as defined in section 1861(dd)(3)(A) 
                of the Social Security Act) and is undergoing treatment 
                for the terminal illness, the plan shall--
                            ``(i) notify the individual on a timely 
                        basis of such termination and of the right to 
                        elect continuation of coverage of treatment by 
                        the provider under this subsection; and
                            ``(ii) subject to paragraph (3), permit the 
                        individual to elect to continue to be covered 
                        with respect to treatment by the provider for 
                        such surgery, pregnancy, or illness during a 
transitional period (provided under paragraph (2)).
                    ``(B) Treatment of termination of contract with 
                health insurance issuer.--If a contract for the 
                provision of health insurance coverage between a group 
                health plan and a health insurance issuer is terminated 
                and, as a result of such termination, coverage of 
                services of a health care provider is terminated with 
                respect to an individual, the provisions of 
                subparagraph (A) (and the succeeding provisions of this 
                subsection) shall apply under the plan in the same 
                manner as if there had been a contract between the plan 
                and the provider that had been terminated, but only 
                with respect to benefits that are covered under the 
                plan after the contract termination.
                    ``(C) Termination defined.--For purposes of this 
                subsection, the term `terminated' includes, with 
                respect to a contract, the expiration or nonrenewal of 
                the contract, but does not include a termination of the 
                contract by the plan for failure to meet applicable 
                quality standards or for fraud.
            ``(2) Transitional period.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) through (D), the transitional period 
                under this paragraph shall extend up to 90 days (as 
                determined by the treating health care professional) 
                after the date of the notice described in paragraph 
                (1)(A)(i) of the provider's termination.
                    ``(B) Scheduled surgery.--If surgery was scheduled 
                for an individual before the date of the announcement 
                of the termination of the provider status under 
                paragraph (1)(A)(i), the transitional period under this 
                paragraph with respect to the surgery or 
                transplantation.
                    ``(C) Pregnancy.--If--
                            ``(i) a participant or beneficiary was 
                        determined to be pregnant at the time of a 
                        provider's termination of participation, and
                            ``(ii) the provider was treating the 
                        pregnancy before date of the termination,
                the transitional period under this paragraph with 
                respect to provider's treatment of the pregnancy shall 
                extend through the provision of post-partum care 
                directly related to the delivery.
                    ``(D) Terminal illness.--If--
                            ``(i) a participant or beneficiary was 
                        determined to be terminally ill (as determined 
                        under section 1861(dd)(3)(A) of the Social 
                        Security Act) at the time of a provider's 
                        termination of participation, and
                            ``(ii) the provider was treating the 
                        terminal illness before the date of 
                        termination,
                the transitional period under this paragraph shall 
                extend for the remainder of the individual's life for 
                care directly related to the treatment of the terminal 
                illness or its medical manifestations.
            ``(3) Permissible terms and conditions.--A group health 
        plan may condition coverage of continued treatment by a 
        provider under paragraph (1)(A)(i) upon the individual 
        notifying the plan of the election of continued coverage and 
        upon the provider agreeing to the following terms and 
        conditions:
                    ``(A) The provider agrees to accept reimbursement 
                from the plan and individual involved (with respect to 
                cost-sharing) at the rates applicable prior to the 
                start of the transitional period as payment in full 
                (or, in the case described in paragraph (1)(B), at the 
                rates applicable under the replacement plan after the 
                date of the termination of the contract with the health 
                insurance issuer) and not to impose cost-sharing with 
                respect to the individual in an amount that would 
                exceed the cost-sharing that could have been imposed if 
                the contract referred to in paragraph (1)(A) had not 
                been terminated.
                    ``(B) The provider agrees to adhere to the quality 
                assurance standards of the plan responsible for payment 
                under subparagraph (A) and to provide to such plan 
                necessary medical information related to the care 
                provided.
                    ``(C) The provider agrees otherwise to adhere to 
                such plan's policies and procedures, including 
                procedures regarding referrals and obtaining prior 
                authorization and providing services pursuant to a 
                treatment plan (if any) approved by the plan.
                    ``(D) The provider agrees to provide transitional 
                care to all participants and beneficiaries who are 
                eligible for and elect to have coverage of such care 
                from such provider.
                    ``(E) If the provider initiates the termination, 
                the provider has notified the plan within 30 days prior 
                to the effective date of the termination of--
                            ``(i) whether the provider agrees to 
                        permissible terms and conditions (as set forth 
                        in this paragraph) required by the plan, and
                            ``(ii) if the provider agrees to the terms 
                        and conditions, the specific plan beneficiaries 
                        and participants undergoing a course of 
                        treatment from the provider who the provider 
                        believes, at the time of the notification, 
                        would be eligible for transitional care under 
                        this subsection.
            ``(4) Construction.--Nothing in this subsection shall be 
        construed to--
                    ``(A) require the coverage of benefits which would 
                not have been covered if the provider involved remained 
                a participating provider, or
                    ``(B) prohibit a group health plan from 
                conditioning a provider's participation on the 
                provider's agreement to provide transitional care to 
                all participants and beneficiaries eligible to obtain 
coverage of such care furnished by the provider as set forth under this 
subsection.
    ``(f) Coverage for Individuals Participating in Approved Cancer 
Clinical Trials.--
            ``(1) Coverage.--
                    ``(A) In general.--If a group health plan provides 
                coverage to a qualified individual (as defined in 
                paragraph (2)), the plan--
                            ``(i) may not deny the individual 
                        participation in the clinical trial referred to 
                        in paragraph (2)(B);
                            ``(ii) subject to paragraphs (2), (3), and 
                        (4), may not deny (or limit or impose 
                        additional conditions on) the coverage of 
                        routine patient costs for items and services 
                        furnished in connection with participation in 
                        the trial; and
                            ``(iii) may not discriminate against the 
                        individual on the basis of the participation of 
                        the participant or beneficiary in such trial.
                    ``(B) Exclusion of certain costs.--For purposes of 
                subparagraph (A)(ii), routine patient costs do not 
                include the cost of the tests or measurements conducted 
                primarily for the purpose of the clinical trial 
                involved.
                    ``(C) Use of in-network providers.--If one or more 
                participating providers is participating in a clinical 
                trial, nothing in subparagraph (A) shall be construed 
                as preventing a plan from requiring that a qualified 
                individual participate in the trial through such a 
                participating provider if the provider will accept the 
                individual as a participant in the trial.
            ``(2) Qualified individual defined.--For purposes of 
        paragraph (1), the term `qualified individual' means an 
        individual who is a participant or beneficiary in a group 
        health plan and who meets the following conditions:
                    ``(A)(i) The individual has been diagnosed with 
                cancer.
                    ``(ii) The individual is eligible to participate in 
                an approved clinical trial according to the trial 
                protocol with respect to treatment of cancer.
                    ``(iii) The individual's participation in the trial 
                offers meaningful potential for significant clinical 
                benefit for the individual.
                    ``(B) Either--
                            ``(i) the referring physician is a 
                        participating health care professional and has 
                        concluded that the individual's participation 
                        in such trial would be appropriate based upon 
                        satisfaction by the individual of the 
                        conditions described in subparagraph (A); or
                            ``(ii) the individual provides medical and 
                        scientific information establishing that the 
                        individual's participation in such trial would 
                        be appropriate based upon the satisfaction by 
                        the individual of the conditions described in 
                        subparagraph (A).
            ``(3) Payment.--
                    ``(A) In general.--A group health plan shall 
                provide for payment for routine patient costs described 
                in paragraph (1)(B) but is not required to pay for 
                costs of items and services that are reasonably 
                expected to be paid for by the sponsors of an approved 
                clinical trial.
                    ``(B) Routine patient care costs.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `routine patient care 
                        costs' shall include the costs associated with 
                        the provision of items and services that--
                                    ``(I) would otherwise be covered 
                                under the group health plan if such 
                                items and services were not provided in 
                                connection with an approved clinical 
                                trial program; and
                                    ``(II) are furnished according to 
                                the protocol of an approved clinical 
                                trial program.
                            ``(ii) Exclusion.--For purposes of this 
                        paragraph, `routine patient care costs' shall 
                        not include the costs associated with the 
                        provision of--
                                    (I) an investigational drug or 
                                device, unless the Secretary has 
                                authorized the manufacturer of such 
                                drug or device to charge for such drug 
                                or device; or
                                    (II) any item or service supplied 
                                without charge by the sponsor of the 
                                approved clinical trial program.
                    ``(C) Payment rate.--For purposes of this 
                subsection--
                            ``(i) Participating providers.--In the case 
                        of covered items and services provided by a 
                        participating provider, the payment rate shall 
                        be at the agreed upon rate.
                            ``(ii) Nonparticipating providers.--In the 
                        case of covered items and services provided by 
                        a nonparticipating provider, the payment rate 
                        shall be at the rate the plan would normally 
                        pay for comparable items or services under 
                        clause (i).
            ``(4) Approved clinical trial defined.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `approved clinical trial' means a cancer 
                clinical research study or cancer clinical 
                investigation approved by an Institutional Review 
                Board.
                    ``(B) Conditions for departments.--The conditions 
                described in this paragraph, for a study or 
                investigation conducted by a Department, are that the 
                study or investigation has been reviewed and approved 
                through a system of peer review that the Secretary 
                determines--
                            ``(i) to be comparable to the system of 
                        peer review of studies and investigations used 
by the National Institutes of Health, and
                            ``(ii) assures unbiased review of the 
                        highest scientific standards by qualified 
                        individuals who have no interest in the outcome 
                        of the review.
            ``(5) Construction.--Nothing in this subsection shall be 
        construed to limit a plan's coverage with respect to clinical 
        trials.
            ``(6) Plan satisfaction of certain requirements; 
        responsibilities of fiduciaries.--
                    ``(A) In general.--For purposes of this subsection, 
                insofar as a group health plan provides benefits in the 
                form of health insurance coverage through a health 
                insurance issuer, the plan shall be treated as meeting 
                the requirements of this subsection with respect to 
                such benefits and not be considered as failing to meet 
                such requirements because of a failure of the issuer to 
                meet such requirements so long as the plan sponsor or 
                its representatives did not cause such failure by the 
                issuer.
                    ``(B) Construction.--Nothing in this subsection 
                shall be construed to affect or modify the 
                responsibilities of the fiduciaries of a group health 
                plan under part 4 of subtitle B of title I of the 
                Employee Retirement Income Security Act of 1974.
            ``(7) Study and report.--
                    ``(A) Study.--The Secretary shall analyze cancer 
                clinical research and its cost implications for managed 
                care, including differentiation in--
                            ``(i) the cost of patient care in trials 
                        versus standard care;
                            ``(ii) the cost effectiveness achieved in 
                        different sites of service;
                            ``(iii) research outcomes;
                            ``(iv) volume of research subjects 
                        available in different sites of service;
                            ``(v) access to research sites and clinical 
                        trials by cancer patients;
                            ``(vi) patient cost sharing or copayment 
                        costs realized in different sites of service;
                            ``(vii) health outcomes experienced in 
                        different sites of service;
                            ``(viii) long term health care services and 
                        costs experienced in different sites of 
                        service;
                            ``(ix) morbidity and mortality experienced 
                        in different sites of service; and
                            ``(x) patient satisfaction and preference 
                        of sites of service.
                    ``(B) Report to congress.--Not later than January 
                1, 2005, the Secretary shall submit a report to 
                Congress that contains--
                            ``(i) an assessment of any incremental cost 
                        to group health plans resulting from the 
                        provisions of this section;
                            ``(ii) a projection of expenditures to such 
                        plans resulting from this section;
                            ``(iii) an assessment of any impact on 
                        premiums resulting from this section; and
                            ``(iv) recommendations regarding action on 
                        other diseases.''.

SEC. 302. EFFECTIVE DATE AND RELATED RULES.

    (a) In General.--The amendments made by this subtitle 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 the Treasury may issue regulations before 
such date under such amendments. The Secretary shall first issue 
regulations necessary to carry out the amendments made by this subtitle 
before the effective date thereof.
    (b) Limitation on Enforcement Actions.--No enforcement action shall 
be taken, pursuant to the amendments made by this subtitle, against a 
group health plan 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 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 subtitle 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 subtitle shall 
not be treated as a termination of such collective bargaining 
agreement.

                  Subtitle B--Medical Savings Accounts

SEC. 311. EXPANSION OF AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS.

    (a) Repeal of Limitations on Number of Medical Savings Accounts.--
            (1) In general.--Subsections (i) and (j) of section 220 of 
        the Internal Revenue Code of 1986 are hereby repealed.
            (2) Conforming amendment.--Paragraph (1) of section 220(c) 
        of such Code is amended by striking subparagraph (D).
    (b) All Employers May Offer Medical Savings Accounts.--
            (1) In general.--Subclause (I) of section 220(c)(1)(A)(iii) 
        of such Code (defining eligible individual) is amended by 
        striking ``and such employer is a small employer''.
            (2) Conforming amendments.--
                    (A) Paragraph (1) of section 220(c) of such Code is 
                amended by striking subparagraph (C).
                    (B) Subsection (c) of section 220 of such Code is 
                amended by striking paragraph (4) and by redesignating 
                paragraph (5) as paragraph (4).
    (c) Increase in Amount of Deduction Allowed for Contributions to 
Medical Savings Accounts.--
            (1) In general.--Paragraph (2) of section 220(b) of such 
        Code is amended to read as follows:
            ``(2) Monthly limitation.--The monthly limitation for any 
        month is the amount equal to \1/12\ of the annual deductible 
        (as of the first day of such month) of the individual's 
        coverage under the high deductible health plan.''.
            (2) Conforming amendment.--Clause (ii) of section 
        220(d)(1)(A) of such Code is amended by striking ``75 percent 
        of''.
    (d) Both Employers and Employees May Contribute to Medical Savings 
Accounts.--Paragraph (5) of section 220(b) of such Code is amended to 
read as follows:
            ``(5) Coordination with exclusion for employer 
        contributions.--The limitation which would (but for this 
        paragraph) apply under this subsection to the taxpayer for any 
        taxable year shall be reduced (but not below zero) by the 
        amount which would (but for section 106(b)) be includible in 
        the taxpayer's gross income for such taxable year.''.
    (e) Reduction of Permitted Deductibles Under High Deductible Health 
Plans.--
            (1) In general.--Subparagraph (A) of section 220(c)(2) of 
        such Code (defining high deductible health plan) is amended--
                    (A) by striking ``$1,500'' in clause (i) and 
                inserting ``$1,000'', and
                    (B) by striking ``$3,000'' in clause (ii) and 
                inserting ``$2,000''.
            (2) Conforming amendment.--Subsection (g) of section 220 of 
        such Code is amended to read as follows:
    ``(g) Cost-of-Living Adjustment.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 1998, each dollar amount in 
        subsection (c)(2) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                such taxable year begins by substituting `calendar year 
                1997' for `calendar year 1992' in subparagraph (B) 
                thereof.
            ``(2) Special rules.--In the case of the $1,000 amount in 
        subsection (c)(2)(A)(i) and the $2,000 amount in subsection 
        (c)(2)(A)(ii), paragraph (1)(B) shall be applied by 
        substituting `calendar year 1999' for `calendar year 1997'.
            ``(3) Rounding.--If any increase under paragraph (1) or (2) 
        is not a multiple of $50, such increase shall be rounded to the 
        nearest multiple of $50.''.
    (f) Medical Savings Accounts May Be Offered Under Cafeteria 
Plans.--Subsection (f) of section 125 of such Code is amended by 
striking ``106(b),''.

SEC. 312. EFFECTIVE DATE.

    The amendments made by this subtitle shall apply to taxable years 
beginning after December 31, 2000.

               Subtitle C--Tax Incentives for Health Care

SEC. 321. DEDUCTION FOR HEALTH AND LONG-TERM CARE INSURANCE COSTS OF 
              INDIVIDUALS NOT PARTICIPATING IN EMPLOYER-SUBSIDIZED 
              HEALTH PLANS.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by redesignating section 222 
as section 223 and by inserting after section 221 the following new 
section:

``SEC. 222. HEALTH AND LONG-TERM CARE INSURANCE COSTS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a deduction an amount equal to the applicable percentage of 
the amount paid during the taxable year for insurance which constitutes 
medical care for the taxpayer and the taxpayer's spouse and dependents.
    ``(b) Applicable Percentage.--For purposes of subsection (a), the 
applicable percentage shall be determined in accordance with the 
following table:

``For taxable years beginning
                                                         The applicable
  in calendar year--
                                                        percentage is--
    2002, 2003, and 2004...................................        25  
    2005...................................................        35  
    2006...................................................        65  
    2007 and thereafter....................................      100.  

    ``(c) Limitation Based on Other Coverage.--
            ``(1) Coverage under certain subsidized employer plans.--
                    ``(A) In general.--Subsection (a) shall not apply 
                to any taxpayer for any calendar month for which the 
                taxpayer participates in any health plan maintained by 
                any employer of the taxpayer or of the spouse of the 
                taxpayer if 50 percent or more of the cost of coverage 
                under such plan (determined under section 4980B and 
                without regard to payments made with respect to any 
                coverage described in subsection (e)) is paid or 
                incurred by the employer.
                    ``(B) Employer contributions to cafeteria plans, 
                flexible spending arrangements, and medical savings 
                accounts.--Employer contributions to a cafeteria plan, 
                a flexible spending or similar arrangement, or a 
                medical savings account which are excluded from gross 
                income under section 106 shall be treated for purposes 
                of subparagraph (A) as paid by the employer.
                    ``(C) Aggregation of plans of employer.--A health 
                plan which is not otherwise described in subparagraph 
                (A) shall be treated as described in such subparagraph 
                if such plan would be so described if all health plans 
of persons treated as a single employer under subsection (b), (c), (m), 
or (o) of section 414 were treated as one health plan.
                    ``(D) Separate application to health insurance and 
                long-term care insurance.--Subparagraphs (A) and (C) 
                shall be applied separately with respect to--
                            ``(i) plans which include primarily 
                        coverage for qualified long-term care services 
                        or are qualified long-term care insurance 
                        contracts, and
                            ``(ii) plans which do not include such 
                        coverage and are not such contracts.
            ``(2) Coverage under certain federal programs.--
                    ``(A) In general.--Subsection (a) shall not apply 
                to any amount paid for any coverage for an individual 
                for any calendar month if, as of the first day of such 
                month, the individual is covered under any medical care 
                program described in--
                            ``(i) title XVIII, XIX, or XXI of the 
                        Social Security Act,
                            ``(ii) chapter 55 of title 10, United 
                        States Code,
                            ``(iii) chapter 17 of title 38, United 
                        States Code,
                            ``(iv) chapter 89 of title 5, United States 
                        Code, or
                            ``(v) the Indian Health Care Improvement 
                        Act.
                    ``(B) Exceptions.--
                            ``(i) Qualified long-term care.--
                        Subparagraph (A) shall not apply to amounts 
                        paid for coverage under a qualified long-term 
                        care insurance contract.
                            ``(ii) Continuation coverage of fehbp.--
                        Subparagraph (A)(iv) shall not apply to 
                        coverage which is comparable to continuation 
                        coverage under section 4980B.
    ``(d) Long-Term Care Deduction Limited to Qualified Long-Term Care 
Insurance Contracts.--In the case of a qualified long-term care 
insurance contract, only eligible long-term care premiums (as defined 
in section 213(d)(10)) may be taken into account under subsection (a).
    ``(e) Deduction Not Available for Payment of Ancillary Coverage 
Premiums.--Any amount paid as a premium for insurance which provides 
for--
            ``(1) coverage for accidents, disability, dental care, 
        vision care, or a specified illness, or
            ``(2) making payments of a fixed amount per day (or other 
        period) by reason of being hospitalized.
shall not be taken into account under subsection (a).
    ``(f) Special Rules.--
            ``(1) Coordination with deduction for health insurance 
        costs of self-employed individuals.--The amount taken into 
        account by the taxpayer in computing the deduction under 
        section 162(l) shall not be taken into account under this 
        section.
            ``(2) Coordination with medical expense deduction.--The 
        amount taken into account by the taxpayer in computing the 
        deduction under this section shall not be taken into account 
        under section 213.
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as may be appropriate to carry out this section, including regulations 
requiring employers to report to their employees and the Secretary such 
information as the Secretary determines to be appropriate.''.
    (b) Deduction Allowed Whether or Not Taxpayer Itemizes Other 
Deductions.--Subsection (a) of section 62 of such Code is amended by 
inserting after paragraph (17) the following new item:
            ``(18) Health and long-term care insurance costs.--The 
        deduction allowed by section 222.''.
    (c) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by striking the last 
item and inserting the following new items:

                              ``Sec. 222. Health and long-term care 
                                        insurance costs.
                              ``Sec. 223. Cross reference.''.

    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

SEC. 322. REFUNDABLE CREDIT FOR HEALTH INSURANCE COVERAGE.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. HEALTH INSURANCE COSTS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this subtitle an amount 
equal to the amount paid during the taxable year for qualified health 
insurance for the taxpayer, his spouse, and dependents.
    ``(b) Limitations.--
            ``(1) In general.--The amount allowed as a credit under 
        subsection (a) to the taxpayer for the taxable year shall not 
        exceed the sum of the monthly limitations for coverage months 
        during such taxable year for each individual referred to in 
        subsection (a) for whom the taxpayer paid during the taxable 
        year any amount for coverage under qualified health insurance.
            ``(2) Monthly limitation.--
                    ``(A) In general.--The monthly limitation for an 
                individual for each coverage month of such individual 
                during the taxable year is the amount equal to 1/12 
                of--
                            ``(i) $1,000 if such individual is the 
                        taxpayer,
                            ``(ii) $1,000 if--
                                    ``(I) such individual is the spouse 
                                of the taxpayer,
                                    ``(II) the taxpayer and such spouse 
                                are married as of the first day of such 
                                month, and
                                    ``(III) the taxpayer files a joint 
                                return for the taxable year, and
                            ``(iii) $500 if such individual is an 
                        individual for whom a deduction under section 
                        151(c) is allowable to the taxpayer for such 
                        taxable year.
                    ``(B) Limitation to 2 dependents.--Not more than 2 
                individuals may be taken into account by the taxpayer 
                under subparagraph (A)(iii).
                    ``(C) Special rule for married individuals.--In the 
                case of an individual--
                            ``(i) who is married (within the meaning of 
                        section 7703) as of the close of the taxable 
                        year but does not file a joint return for such 
                        year, and
                            ``(ii) who does not live apart from such 
                        individual's spouse at all times during the 
                        taxable year,
                the limitation imposed by subparagraph (B) shall be 
                divided equally between the individual and the 
                individual's spouse unless they agree on a different 
                division.
            ``(3) Coverage month.--For purposes of this subsection--
                    ``(A) In general.--The term `coverage month' means, 
                with respect to an individual, any month if--
                            ``(i) as of the first day of such month 
                        such individual is covered by qualified health 
                        insurance, and
                            ``(ii) the premium for coverage under such 
                        insurance for such month is paid by the 
                        taxpayer.
                    ``(B) Employer-subsidized coverage.--Such term 
                shall not include any month for which such individual 
                participates in any subsidized health plan (within the 
                meaning of section 162(l)(2)) maintained by any 
                employer of the taxpayer or of the spouse of the 
                taxpayer.
                    ``(C) Cafeteria plan and flexible spending account 
                beneficiaries.--Such term shall not include any month 
                during a taxable year if any amount is not includible 
                in the gross income of the taxpayer for such year under 
                section 106 with respect to--
                            ``(i) a benefit chosen under a cafeteria 
                        plan (as defined in section 125(d)), or
                            ``(ii) a benefit provided under a flexible 
                        spending or similar arrangement.
                    ``(D) Medicare and medicaid.--Such term shall not 
                include any month with respect to an individual if, as 
                of the first day of such month, such individual--
                            ``(i) is entitled to any benefits under 
                        title XVIII of the Social Security Act, or
                            ``(ii) is a participant in the program 
                        under title XIX of such Act.
                    ``(E) Certain other coverage.--Such term shall not 
                include any month during a taxable year with respect to 
                an individual if, at any time during such year, any 
benefit is provided to such individual under--
                            ``(i) chapter 17 of title 38, United States 
                        Code, or
                            ``(ii) any medical care program under the 
                        Indian Health Care Improvement Act.
                    ``(F) Prisoners.--Such term shall not include any 
                month with respect to an individual if, as of the first 
                day of such month, such individual is imprisoned under 
                Federal, State, or local authority.
                    ``(G) Insufficient presence in united states.--Such 
                term shall not include any month during a taxable year 
                with respect to an individual if such individual is 
                present in the United States on fewer than 183 days 
                during such year (determined in accordance with section 
                7701(b)(7)).
            ``(4) Coordination with deduction for health insurance 
        costs of self-employed individuals.--In the case of a taxpayer 
        who is eligible to deduct any amount under section 162(l) for 
        the taxable year, this section shall apply only if the taxpayer 
        elects not to claim any amount as a deduction under such 
        section for such year.
    ``(c) Qualified Health Insurance.--For purposes of this section--
            ``(1) In general.--The term `qualified health insurance' 
        means insurance which constitutes medical care as defined in 
        section 213(d) without regard to--
                    ``(A) paragraph (1)(C) thereof, and
                    ``(B) so much of paragraph (1)(D) thereof as 
                relates to qualified long-term care insurance 
                contracts.
            ``(2) Exclusion of certain other contracts.--Such term 
        shall not include insurance if a substantial portion of its 
        benefits are excepted benefits (as defined in section 9832(c)).
    ``(d) Medical Savings Account Contributions.--
            ``(1) In general.--If a deduction would (but for paragraph 
        (2)) be allowed under section 220 to the taxpayer for a payment 
        for the taxable year to the medical savings account of an 
        individual, subsection (a) shall be applied by treating such 
        payment as a payment for qualified health insurance for such 
        individual.
            ``(2) Denial of double benefit.--No deduction shall be 
        allowed under section 220 for that portion of the payments 
        otherwise allowable as a deduction under section 220 for the 
        taxable year which is equal to the amount of credit allowed for 
        such taxable year by reason of this subsection.
    ``(e) Special Rules.--
            ``(1) Coordination with medical expense deduction.--The 
        amount which would (but for this paragraph) be taken into 
        account by the taxpayer under section 213 for the taxable year 
        shall be reduced by the credit (if any) allowed by this section 
        to the taxpayer for such year.
            ``(2) Denial of credit to dependents.--No credit shall be 
        allowed under this section to any individual with respect to 
        whom a deduction under section 151 is allowable to another 
        taxpayer for a taxable year beginning in the calendar year in 
        which such individual's taxable year begins.
            ``(3) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year after 2000, each dollar 
        amount contained in subsection (b)(2)(A) shall be increased by 
        an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 1999' for `calendar year 1992' in 
                subparagraph (B) thereof.
        Any increase determined under the preceding sentence shall be 
        rounded to the nearest multiple of $50 ($25 in the case of the 
        dollar amount in subsection (b)(2)(A)(iii)).''.
    (b) Information Reporting.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 of such Code (relating to information concerning 
        transactions with other persons) is amended by inserting after 
        section 6050S the following new section:

``SEC. 6050T. RETURNS RELATING TO PAYMENTS FOR QUALIFIED HEALTH 
              INSURANCE.

    ``(a) In General.--Any person who, in connection with a trade or 
business conducted by such person, receives payments during any 
calendar year from any individual for coverage of such individual or 
any other individual under creditable health insurance, shall make the 
return described in subsection (b) (at such time as the Secretary may 
by regulations prescribe) with respect to each individual from whom 
such payments were received.
    ``(b) Form and Manner of Returns.--A return is described in this 
subsection if such return--
            ``(1) is in such form as the Secretary may prescribe, and
            ``(2) contains--
                    ``(A) the name, address, and TIN of the individual 
                from whom payments described in subsection (a) were 
                received,
                    ``(B) the name, address, and TIN of each individual 
                who was provided by such person with coverage under 
                creditable health insurance by reason of such payments 
                and the period of such coverage, and
                    ``(C) such other information as the Secretary may 
                reasonably prescribe.
    ``(c) Creditable Health Insurance.--For purposes of this section, 
the term `creditable health insurance' means qualified health insurance 
(as defined in section 35(c)) other than--
            ``(1) insurance under a subsidized group health plan 
        maintained by an employer, or
            ``(2) to the extent provided in regulations prescribed by 
        the Secretary, any other insurance covering an individual if no 
        credit is allowable under section 35 with respect to such 
        coverage.
    ``(d) Statements To Be Furnished to Individuals With Respect to 
Whom Information Is Required.--Every person required to make a return 
under subsection (a) shall furnish to each individual whose name is 
required under subsection (b)(2)(A) to be set forth in such return a 
written statement showing--
            ``(1) the name and address of the person required to make 
        such return and the phone number of the information contact for 
        such person,
            ``(2) the aggregate amount of payments described in 
        subsection (a) received by the person required to make such 
        return from the individual to whom the statement is required to 
        be furnished, and
            ``(3) the information required under subsection (b)(2)(B) 
        with respect to such payments.
The written statement required under the preceding sentence shall be 
furnished on or before January 31 of the year following the calendar 
year for which the return under subsection (a) is required to be made.
    ``(e) Returns Which Would Be Required To Be Made by 2 or More 
Persons.--Except to the extent provided in regulations prescribed by 
the Secretary, in the case of any amount received by any person on 
behalf of another person, only the person first receiving such amount 
shall be required to make the return under subsection (a).''.
            (2) Assessable penalties.--
                    (A) Subparagraph (B) of section 6724(d)(1) of such 
                Code (relating to definitions) is amended by 
                redesignating clauses (xi) through (xvii) as clauses 
                (xii) through (xviii), respectively, and by inserting 
                after clause (x) the following new clause:
                            ``(xi) section 6050T (relating to returns 
                        relating to payments for qualified health 
                        insurance),''.
                    (B) Paragraph (2) of section 6724(d) of such Code 
                is amended by striking ``or'' at the end of the next to 
                last subparagraph, by striking the period at the end of 
                the last subparagraph and inserting ``, or'', and by 
                adding at the end the following new subparagraph:
                    ``(BB) section 6050T(d) (relating to returns 
                relating to payments for qualified health 
                insurance).''.
            (3) Clerical amendment.--The table of sections for subpart 
        B of part III of subchapter A of chapter 61 of such Code is 
        amended by inserting after the item relating to section 6050S 
        the following new item:

                              ``Sec. 6050T. Returns relating to 
                                        payments for qualified health 
                                        insurance.''.
    (c) Advance Payment of Credit For Purchasers of Qualified Health 
Insurance.--Chapter 77 of the Internal Revenue Code of 1986 (relating 
to miscellaneous provisions) is amended by adding at the end the 
following new section:

``SEC. 7527. ADVANCE PAYMENT OF HEALTH INSURANCE CREDIT FOR PURCHASERS 
              OF QUALIFIED HEALTH INSURANCE.

    ``(a) General Rule.--In the case of an eligible individual, the 
Secretary shall make payments to the provider of such individual's 
qualified health insurance equal to such individual's qualified health 
insurance credit advance amount with respect to such provider.
    ``(b) Eligible Individual.--For purposes of this section, the term 
`eligible individual' means any individual--
            ``(1) who purchases qualified health insurance (as defined 
        in section 35(c)), and
            ``(2) for whom a qualified health insurance credit 
        eligibility certificate is in effect.
    ``(c) Qualified Health Insurance Credit Eligibility Certificate.--
For purposes of this section, a qualified health insurance credit 
eligibility certificate is a statement furnished by an individual to 
the Secretary which--
            ``(1) certifies that the individual will be eligible to 
        receive the credit provided by section 35 for the taxable year,
            ``(2) estimates the amount of such credit for such taxable 
        year, and
            ``(3) provides such other information as the Secretary may 
        require for purposes of this section.
    ``(d) Qualified Health Insurance Credit Advance Amount.--For 
purposes of this section, the term `qualified health insurance credit 
advance amount' means, with respect to any provider of qualified health 
insurance, the Secretary's estimate of the amount of credit allowable 
under section 35 to the individual for the taxable year which is 
attributable to the insurance provided to the individual by such 
provider.
    ``(e) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the purposes of this section.''.
    (c) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``, or 
        from section 35 of such Code''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the last item and inserting the following new items:

                              ``Sec. 35. Health insurance costs.
                              ``Sec. 36. Overpayments of tax.''.
            (3) The table of sections for chapter 77 of such Code is 
        amended by adding at the end the following new item:

                              ``Sec. 7527. Advance payment of health 
                                        insurance credit for purchasers 
                                        of qualified health 
                                        insurance.''.
    (d) Effective Dates.--
            (1) In general.--Except as provided by paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 1999.
            (2) Advance payment of credit for purchasers of qualified 
        health insurance.--The amendments made by subsections (c) and 
        (d)(3) shall take effect on January 1, 2000.

SEC. 323. STUDY OF STATE SAFETY-NET HEALTH INSURANCE PROGRAMS FOR THE 
              MEDICALLY UNINSURABLE.

    (a) Study.--
            (1) In general.--The Secretary of Health and Human Services 
        shall provide for a study on the current state of all existing 
        State safety-net health insurance programs (as defined in 
        subsection (c)). The study shall determine which forms of such 
        programs are the most successful in making health insurance 
        available to all willing payers regardless of their health 
        status.
            (2) Consultation.--In conducting the study the Secretary 
        shall consult with representatives of the National Governors 
        Association, the National Association of Insurance 
        Commissioners, national associations representing health 
        insurers, insurance companies that administer and participate 
        in State safety-net health insurance programs, and individuals 
        who receive their health insurance through such programs.
    (b) Report.--The Secretary shall submit to Congress, by not later 
than October 1, 2000, a detailed report on the study conducted under 
subsection (a). The report shall include recommendations on how 
Congress can best strengthen State safety-net health insurance programs 
where they currently exist and can encourage their establishment in 
States where they do not exist.
    (c) State Safety-Net Health Insurance Program Defined.--For 
purposes of this section, the term ``State safety-net health insurance 
program'' means a high risk pool or similar arrangement provided under 
State law for providing access of medically uninsurable individuals to 
health insurance coverage. Such term may include such other 
arrangements as the Secretary finds appropriate for assuring the 
provision of health insurance coverage to such individuals.

SEC. 324. CARRYOVER OF UNUSED BENEFITS FROM CAFETERIA PLANS AND 
              FLEXIBLE SPENDING ARRANGEMENTS.

    (a) In General.--Section 125 of the Internal Revenue Code of 1986 
(relating to cafeteria plans) is amended by redesignating subsections 
(h) and (i) as subsections (i) and (j), respectively, and by inserting 
after subsection (g) the following new subsection:
    ``(h) Allowance of Carryovers of Unused Benefits to Later Taxable 
Years.--
            ``(1) In general.--For purposes of this title--
                    ``(A) a plan or other arrangement shall not fail to 
                be treated as a cafeteria plan or flexible spending or 
                similar arrangement, and
                    ``(B) no amount shall be required to be included in 
                gross income by reason of this section or any other 
                provision of this chapter,
        solely because under such plan or other arrangement any 
        nontaxable benefit which is unused as of the close of a taxable 
        year may be carried forward to 1 or more succeeding taxable 
        years.
            ``(2) Limitation.--Paragraph (1) shall not apply to amounts 
        carried from a plan to the extent such amounts exceed $500 
        (applied on an annual basis). For purposes of this paragraph, 
        all plans and arrangements maintained by an employer or any 
        related person shall be treated as 1 plan.
            ``(3) Allowance of rollover.--
                    ``(A) In general.--Each flexible spending or 
                similar arrangement which permits a carryover under 
                paragraph (1) of an amount of unused benefit shall 
                provide that each participant may elect, in lieu of a 
                carryover of such amount, to have such amount 
                distributed to the participant.
                    ``(B) Amounts not included in income.--Any 
                distribution under subparagraph (A) shall not be 
                included in gross income to the extent that such amount 
                is transferred in a trustee-to-trustee transfer, or is 
                contributed within 60 days of the date of the 
                distribution, to--
                            ``(i) an individual retirement plan,
                            ``(ii) a qualified cash or deferred 
                        arrangement described in section 401(k),
                            ``(iii) a plan under which amounts are 
                        contributed by an individual's employer for an 
                        annuity contract described in section 403(b),
                            ``(iv) an eligible deferred compensation 
                        plan described in section 457,
                            ``(v) a medical savings account (within the 
                        meaning of section 220), or
                            ``(vi) an education individual retirement 
                        account (within the meaning of section 530(b)).
                Any amount rolled over under this subparagraph shall be 
                treated as a rollover contribution for the taxable year 
                from which the unused amount would otherwise be 
                carried.
                    ``(C) Treatment of rollover.--Any amount rolled 
                over under subparagraph (B) shall be treated as an 
                eligible rollover under section 219, 220, 401(k), 
                403(b), 457, or 530, whichever is applicable, and shall 
                not be taken into account in applying any limitation 
                (or participation requirement) on contributions under 
                such section or any other provision of this chapter for 
                the taxable year of the rollover.
            ``(4) Cost-of-living adjustment.--In the case of any 
        taxable year beginning in a calendar year after 1999, the $500 
        amount under paragraph (2) shall be adjusted at the same time 
        and in the same manner as under section 415(d)(2), except that 
        the base period taken into account shall be the calendar 
        quarter beginning October 1, 1998, and any increase which is 
        not a multiple of $50 shall be rounded to the next lowest 
        multiple of $50.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.

                  TITLE IV--HEALTH CARE LAWSUIT REFORM

                     Subtitle A--General Provisions

SEC. 401. FEDERAL REFORM OF HEALTH CARE LIABILITY ACTIONS.

    (a) Applicability.--This title shall apply with respect to any 
health care liability action brought in any State or Federal court, 
except that this title shall not apply to--
            (1) an action for damages arising from a vaccine-related 
        injury or death to the extent that title XXI of the Public 
        Health Service Act applies to the action; or
            (2) an action under the Employee Retirement Income Security 
        Act of 1974 (29 U.S.C. 1001 et seq.).
    (b) Preemption.--This title shall preempt any State law to the 
extent such law is inconsistent with the limitations contained in this 
title. This title shall not preempt any State law that provides for 
defenses or places limitations on a person's liability in addition to 
those contained in this title or otherwise imposes greater restrictions 
than those provided in this title.
    (c) Effect on Sovereign Immunity and Choice of Law or Venue.--
Nothing in subsection (b) shall be construed to--
            (1) waive or affect any defense of sovereign immunity 
        asserted by any State under any provision of law;
            (2) waive or affect any defense of sovereign immunity 
        asserted by the United States;
            (3) affect the applicability of any provision of the 
        Foreign Sovereign Immunities Act of 1976;
            (4) preempt State choice-of-law rules with respect to 
        claims brought by a foreign nation or a citizen of a foreign 
        nation; or
            (5) affect the right of any court to transfer venue or to 
        apply the law of a foreign nation or to dismiss a claim of a 
        foreign nation or of a citizen of a foreign nation on the 
        ground of inconvenient forum.
    (d) Amount in Controversy.--In an action to which this title 
applies and which is brought under section 1332 of title 28, United 
States Code, the amount of non-economic damages or punitive damages, 
and attorneys' fees or costs, shall not be included in determining 
whether the matter in controversy exceeds the sum or value of $50,000.
    (e) Federal Court Jurisdiction Not Established on Federal Question 
Grounds.--Nothing in this title shall be construed to establish any 
jurisdiction in the district courts of the United States over health 
care liability actions on the basis of section 1331 or 1337 of title 
28, United States Code.

SEC. 402. DEFINITIONS.

    As used in this title:
            (1) Actual damages.--The term ``actual damages'' means 
        damages awarded to pay for economic loss.
            (2) Alternative dispute resolution system; adr.--The term 
        ``alternative dispute resolution system'' or ``ADR'' means a 
        system established under Federal or State law that provides for 
        the resolution of health care liability claims in a manner 
        other than through health care liability actions.
            (3) Claimant.--The term ``claimant'' means any person who 
        brings a health care liability action and any person on whose 
        behalf such an action is brought. If such action is brought 
        through or on behalf of an estate, the term includes the 
        claimant's decedent. If such action is brought through or on 
        behalf of a minor or incompetent, the term includes the 
        claimant's legal guardian.
            (4) Clear and convincing evidence.--The term ``clear and 
        convincing evidence'' is that measure or degree of proof that 
        will produce in the mind of the trier of fact a firm belief or 
        conviction as to the truth of the allegations sought to be 
        established. Such measure or degree of proof is more than that 
        required under preponderance of the evidence but less than that 
        required for proof beyond a reasonable doubt.
            (5) Collateral source payments.--The term ``collateral 
        source payments'' means any amount paid or reasonably likely to 
        be paid in the future to or on behalf of a claimant, or any 
        service, product, or other benefit provided or reasonably 
        likely to be provided in the future to or on behalf of a 
        claimant, as a result of an injury or wrongful death, pursuant 
        to--
                    (A) any State or Federal health, sickness, income-
                disability, accident or workers' compensation Act;
                    (B) any health, sickness, income-disability, or 
                accident insurance that provides health benefits or 
                income-disability coverage;
                    (C) any contract or agreement of any group, 
                organization, partnership, or corporation to provide, 
                pay for, or reimburse the cost of medical, hospital, 
                dental, or income disability benefits; and
                    (D) any other publicly or privately funded program.
            (6) Drug.--The term ``drug'' has the meaning given such 
        term in section 201(g)(1) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 321(g)(1)).
            (7) Economic loss.--The term ``economic loss'' means any 
        pecuniary loss resulting from injury (including the loss of 
        earnings or other benefits related to employment, medical 
        expense loss, replacement services loss, loss due to death, 
        burial costs, and loss of business or employment 
        opportunities), to the extent recovery for such loss is allowed 
        under applicable State law.
            (8) Harm.--The term ``harm'' means any legally cognizable 
        wrong or injury for which punitive damages may be imposed.
            (9) Health benefit plan.--The term ``health benefit plan'' 
        means--
                    (A) a hospital or medical expense incurred policy 
                or certificate;
                    (B) a hospital or medical service plan contract;
                    (C) a health maintenance subscriber contract; or
                    (D) a Medicare+Choice plan (offered under part C of 
                title XVIII of the Social Security Act),
        that provides benefits with respect to health care services.
            (10) Health care liability action.--The term ``health care 
        liability action'' means a civil action brought in a State or 
        Federal court against--
                    (A) a health care provider;
                    (B) an entity which is obligated to provide or pay 
                for health benefits under any health benefit plan 
                (including any person or entity acting under a contract 
                or arrangement to provide or administer any health 
                benefit); or
                    (C) the manufacturer, distributor, supplier, 
                marketer, promoter, or seller of a medical product,
in which the claimant alleges a claim (including third party claims, 
cross claims, counter claims, or contribution claims) based upon the 
provision of (or the failure to provide or pay for) health care 
services or the use of a medical product, regardless of the theory of 
liability on which the claim is based or the number of plaintiffs, 
defendants, or causes of action.
            (11) Health care liability claim.--The term ``health care 
        liability claim'' means a claim in which the claimant alleges 
        that injury was caused by the provision of (or the failure to 
        provide) health care services.
            (12) Health care provider.--The term ``health care 
        provider'' means any person that is engaged in the delivery of 
        health care services in a State and that is required by the 
        laws or regulations of the State to be licensed or certified by 
        the State to engage in the delivery of such services in the 
        State.
            (13) Health care service.--The term ``health care service'' 
        means any service eligible for payment under a health benefit 
        plan, including services related to the delivery or 
        administration of such service.
            (14) Medical device.--The term ``medical device'' has the 
        meaning given such term in section 201(h) of the Federal Food, 
        Drug, and Cosmetic Act (21 U.S.C. 321(h)).
            (15) Non-economic damages.--The term ``non-economic 
        damages'' means damages paid to an individual for pain and 
        suffering, inconvenience, emotional distress, mental anguish, 
        loss of consortium, injury to reputation, humiliation, and 
        other nonpecuniary losses.
            (16) Person.--The term ``person'' means any individual, 
        corporation, company, association, firm, partnership, society, 
        joint stock company, or any other entity, including any 
        governmental entity.
            (17) Product seller.--
                    (A) In general.--Subject to subparagraph (B), the 
                term ``product seller'' means a person who, in the 
                course of a business conducted for that purpose--
                            (i) sells, distributes, rents, leases, 
                        prepares, blends, packages, labels, or is 
                        otherwise involved in placing, a product in the 
                        stream of commerce; or
                            (ii) installs, repairs, or maintains the 
                        harm-causing aspect of a product.
                    (B) Exclusion.--Such term does not include--
                            (i) a seller or lessor of real property;
                            (ii) a provider of professional services in 
                        any case in which the sale or use of a product 
                        is incidental to the transaction and the 
                        essence of the transaction is the furnishing of 
                        judgment, skill, or services; or
                            (iii) any person who--
                                    (I) acts in only a financial 
                                capacity with respect to the sale of a 
                                product; or
                                    (II) leases a product under a lease 
                                arrangement in which the selection, 
                                possession, maintenance, and operation 
                                of the product are controlled by a 
                                person other than the lessor.
            (18) Punitive damages.--The term ``punitive damages'' means 
        damages awarded against any person not to compensate for actual 
        injury suffered, but to punish or deter such person or others 
        from engaging in similar behavior in the future.
            (19) State.--The term ``State'' means each of the several 
        States, the District of Columbia, Puerto Rico, the Virgin 
        Islands, Guam, American Samoa, the Northern Mariana Islands, 
        and any other territory or possession of the United States.

SEC. 403. EFFECTIVE DATE.

    This title will apply to--
            (1) any health care liability action brought in a Federal 
        or State court; and
            (2) any health care liability claim subject to an 
        alternative dispute resolution system,
that is initiated on or after the date of enactment of this title, 
except that any health care liability claim or action arising from an 
injury occurring before the date of enactment of this title shall be 
governed by the applicable statute of limitations provisions in effect 
at the time the injury occurred.

    Subtitle B--Uniform Standards for Health Care Liability Actions

SEC. 411. STATUTE OF LIMITATIONS.

    A health care liability action may not be brought after the 
expiration of the 2-year period that begins on the date on which the 
alleged injury that is the subject of the action was discovered or 
should reasonably have been discovered, but in no case after the 
expiration of the 5-year period that begins on the date the alleged 
injury occurred.

SEC. 412. CALCULATION AND PAYMENT OF DAMAGES.

    (a) Treatment of Non-Economic Damages.--
            (1) Limitation on non-economic damages.--The total amount 
        of non-economic damages that may be awarded to a claimant for 
        losses resulting from the injury which is the subject of a 
        health care liability action may not exceed $250,000, 
        regardless of the number of parties against whom the action is 
        brought or the number of actions brought with respect to the 
        injury. The limitation under this paragraph shall not apply to 
        an action for damages based solely on intentional denial of 
        medical treatment necessary to preserve a patient's life that 
        the patient is otherwise qualified to receive, against the 
        wishes of a patient, or if the patient is incompetent, against 
        the wishes of the patient's guardian, on the basis of the 
        patient's present or predicated age, disability, degree of 
        medical dependency, or quality of life.
            (2) Limit.--If, after the date of the enactment of this 
        Act, a State enacts a law which prescribes the amount of non-
        economic damages which may be awarded in a health care 
        liability action which is different from the amount prescribed 
        by section 412(a)(1), the State amount shall apply in lieu of 
        the amount prescribed by such section. If, after the date of 
the enactment of this Act, a State enacts a law which limits the amount 
of recovery in a health care liability action without delineating 
between economic and non-economic damages, the State amount shall apply 
in lieu of the amount prescribed by such section.
            (3) Joint and several liability.--In any health care 
        liability action brought in State or Federal court, a defendant 
        shall be liable only for the amount of non-economic damages 
        attributable to such defendant in direct proportion to such 
        defendant's share of fault or responsibility for the claimant's 
        actual damages, as determined by the trier of fact. In all such 
        cases, the liability of a defendant for non-economic damages 
        shall be several and not joint and a separate judgment shall be 
        rendered against each defendant for the amount allocated to 
        such defendant.
    (b) Treatment of Punitive Damages.--
            (1) General rule.--Punitive damages may, to the extent 
        permitted by applicable State law, be awarded in any health 
        care liability action for harm in any Federal or State court 
        against a defendant if the claimant establishes by clear and 
        convincing evidence that the harm suffered was the result of 
        conduct--
                    (A) specifically intended to cause harm; or
                    (B) conduct manifesting a conscious, flagrant 
                indifference to the rights or safety of others.
            (2) Applicability.--This subsection shall apply to any 
        health care liability action brought in any Federal or State 
        court on any theory where punitive damages are sought. This 
        subsection does not create a cause of action for punitive 
        damages.
            (3) Limitation on punitive damages.--The total amount of 
        punitive damages that may be awarded to a claimant for losses 
        resulting from the injury which is the subject of a health care 
        liability action may not exceed the greater of--
                    (A) 2 times the amount of economic damages, or
                    (B) $250,000,
        regardless of the number of parties against whom the action is 
        brought or the number of actions brought with respect to the 
        injury. This subsection does not preempt or supersede any State 
        or Federal law to the extent that such law would further limit 
        the award of punitive damages.
            (4) Bifurcation.--At the request of any party, the trier of 
        fact shall consider in a separate proceeding whether punitive 
        damages are to be awarded and the amount of such award. If a 
        separate proceeding is requested, evidence relevant only to the 
        claim of punitive damages, as determined by applicable State 
        law, shall be inadmissible in any proceeding to determine 
        whether actual damages are to be awarded.
            (5) Drugs and devices.--
                    (A) In general.--
                            (i) Punitive damages.--Punitive damages 
                        shall not be awarded against a manufacturer or 
                        product seller of a drug or medical device 
                        which caused the claimant's harm where--
                                    (I) such drug or device was subject 
                                to premarket approval by the Food and 
                                Drug Administration with respect to the 
                                safety of the formulation or 
                                performance of the aspect of such drug 
                                or device which caused the claimant's 
                                harm, or the adequacy of the packaging 
                                or labeling of such drug or device 
                                which caused the harm, and such drug, 
                                device, packaging, or labeling was 
                                approved by the Food and Drug 
                                Administration; or
                                    (II) the drug is generally 
                                recognized as safe and effective 
                                pursuant to conditions established by 
                                the Food and Drug Administration and 
                                applicable regulations, including 
                                packaging and labeling regulations.
                            (ii) Application.--Clause (i) shall not 
                        apply in any case in which the defendant, 
                        before or after premarket approval of a drug or 
                        device--
                                    (I) intentionally and wrongfully 
                                withheld from or misrepresented to the 
                                Food and Drug Administration 
                                information concerning such drug or 
                                device required to be submitted under 
                                the Federal Food, Drug, and Cosmetic 
                                Act (21 U.S.C. 301 et seq.) or section 
                                351 of the Public Health Service Act 
                                (42 U.S.C. 262) that is material and 
                                relevant to the harm suffered by the 
                                claimant; or
                                    (II) made an illegal payment to an 
                                official or employee of the Food and 
                                Drug Administration for the purpose of 
                                securing or maintaining approval of 
                                such drug or device.
                    (B) Packaging.--In a health care liability action 
                for harm which is alleged to relate to the adequacy of 
                the packaging or labeling of a drug which is required 
                to have tamper-resistant packaging under regulations of 
                the Secretary of Health and Human Services (including 
                labeling regulations related to such packaging), the 
                manufacturer or product seller of the drug shall not be 
                held liable for punitive damages unless such packaging 
                or labeling is found by the court by clear and 
                convincing evidence to be substantially out of 
                compliance with such regulations.
    (c) Periodic Payments for Future Losses.--
            (1) General rule.--In any health care liability action in 
        which the damages awarded for future economic and non-economic 
        loss exceeds $50,000, a person shall not be required to pay 
        such damages in a single, lump-sum payment, but shall be 
        permitted to make such payments periodically based on when the 
damages are likely to occur, as such payments are determined by the 
court.
            (2) Finality of judgment.--The judgment of the court 
        awarding periodic payments under this subsection may not, in 
        the absence of fraud, be reopened at any time to contest, 
        amend, or modify the schedule or amount of the payments.
            (3) Lump-sum settlements.--This subsection shall not be 
        construed to preclude a settlement providing for a single, 
        lump-sum payment.
    (d) Treatment of Collateral Source Payments.--
            (1) Introduction into evidence.--In any health care 
        liability action, any defendant may introduce evidence of 
        collateral source payments. If any defendant elects to 
        introduce such evidence, the claimant may introduce evidence of 
        any amount paid or contributed or reasonably likely to be paid 
        or contributed in the future by or on behalf of the claimant to 
        secure the right to such collateral source payments.
            (2) No subrogation.--No provider of collateral source 
        payments shall recover any amount against the claimant or 
        receive any lien or credit against the claimant's recovery or 
        be equitably or legally subrogated to the right of the claimant 
        in a health care liability action.
            (3) Application to settlements.--This subsection shall 
        apply to an action that is settled as well as an action that is 
        resolved by a fact finder.

SEC. 413. LIMITATIONS ON CONTINGENT FEES.

    (a) In General.--The total of all contingent fees for representing 
all claimants in a health care liability claim or action shall not 
exceed the following limits:
            (1) 40 percent of the first $500,000 recovered by the 
        claimant.
            (2) 33 1/3 percent of the next $50,000 recovered by the 
        claimant.
            (3) 25 percent of the next $50,000 recovered by the 
        claimant.
            (4) 15 percent of any amount by which the recovery by the 
        claimant exceeds $600,000.
    (b) Applicability.--The limitations prescribed by subsection (a) 
shall apply whether the recovery is by judgment, settlement, mediation, 
arbitration, or any other form of ADR. A court acting in a health care 
liability claim or action involving a minor or incompetent person 
retains the authority to authorize or approve a fee that is less than 
the maximum permitted under subsection (a).
    (c) Definitions.--For purposes of this section:
            (1) Contingent fee.--The term ``contingent fee'' includes 
        all compensation to any person which is payable only if a 
        recovery is effected on behalf of one or more claimants.
            (2) Recovery.--The term ``recovery'' means the net sum 
        recovered after deducting any disbursements or costs incurred 
        in connection with prosecution or settlement of the claim, 
        including all costs paid or advanced by any person. Costs of 
        health care incurred by the plaintiff and the attorney's office 
        overhead costs or charges for legal services are not deductible 
        disbursements of costs for such purpose.

SEC. 413. ALTERNATIVE DISPUTE RESOLUTION.

    Any ADR used to resolve a health care liability action or claim 
shall contain provisions relating to statute of limitations, non-
economic damages, joint and several liability, punitive damages, 
collateral source rule, and periodic payments which are consistent with 
the provisions relating to such matters in this title.

SEC. 414. REPORTING ON FRAUD AND ABUSE ENFORCEMENT ACTIVITIES.

    The General Accounting Office shall--
            (1) monitor--
                    (A) the compliance of the Department of Justice and 
                all United States Attorneys-with the guideline entitled 
                ``Guidance on the Use of the False Claims Act in Civil 
                Health Care Matters'' issued by the Department on June 
                3, 1998, including any revisions to that guideline; and
                    (B) the compliance of the Office of the Inspector 
                General of the Department of Health and Human Services 
                with the protocols and guidelines entitled ``National 
                Project Protocols--Best Practice Guidelines'' issued by 
                the Inspector General on June 3, 1998, including any 
                revisions to such protocols and guidelines; and
            (2) submit a report on such compliance to the Committee on 
        Commerce, the Committee on the Judiciary, and the Committee on 
        Ways and Means of the House of Representatives and the 
        Committee on the Judiciary and the Committee on Finance of the 
        Senate not later than February 1, 2000, and every year 
        thereafter for a period of 4 years ending February 1, 2003.
                                 <all>