1.
Short title and table of contents
(a)
This Act may be cited as the Small Business Health Fairness Act of
2005
.
(b)
The table of contents is as follows:
Sec. 1. Short title and table of
contents.
Sec. 2. Rules governing association health
plans.
Sec. 3. Clarification of treatment of
single employer arrangements.
Sec. 4. Enforcement provisions relating to
association health plans.
Sec. 5. Cooperation between Federal and
State authorities.
Sec. 6. Effective date and transitional
and other rules.
2.
Rules governing association health plans
(a)
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:
8
Rules governing association health plans
801.
(a)
For purposes of this part, the term association health
plan means a group health plan whose sponsor is (or is deemed under this
part to be) described in subsection (b).
(b)
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 requires for membership payment on a periodic basis
of 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.
802.
Certification of association health plans
(a)
The applicable authority shall prescribe by regulation 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)
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 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 for
continued certification of association health plans under this part.
(e)
Class certification for fully insured plans
The applicable authority shall establish a class certification
procedure for association health plans under which all benefits consist of
health insurance coverage. Under such procedure, the applicable authority shall
provide for the granting of certification under this part to the plans in each
class of such association health plans upon appropriate filing under such
procedure in connection with plans in such class and payment of the prescribed
fee under section 807(a).
(f)
Certification of Self-Insured association health
plans
An association health plan which offers one or more benefit
options which do not consist of health insurance coverage may be certified
under this part only if such plan consists of any of the following:
(1)
A plan which offered such coverage on the date of the enactment
of the Small Business Health Fairness Act of 2005.
(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.
(3)
A plan whose eligible participating employers represent one or
more trades or businesses, or one or more industries, consisting of any of the
following: agriculture; equipment and automobile dealerships; barbering and
cosmetology; certified public accounting practices; child care; construction;
dance, theatrical and orchestra productions; disinfecting and pest control;
financial services; fishing; foodservice establishments; hospitals; labor
organizations; logging; manufacturing (metals); mining; medical and dental
practices; medical laboratories; professional consulting services; sanitary
services; transportation (local and freight); warehousing;
wholesaling/distributing; or any other trade or business or industry which has
been indicated as having average or above-average risk or health claims
experience by reason of State rate filings, denials of coverage, proposed
premium rate levels, or other means demonstrated by such plan in accordance
with regulations.
803.
Requirements relating to sponsors and boards of
trustees
(a)
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)
The requirements of this subsection are met with respect to an
association health plan if the following requirements are met:
(1)
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)
(i)
Except as provided in clauses (ii) and (iii), 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.
(ii)
(I)
Except as provided in subclauses (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, subclause (I) shall
not apply in the case of any service provider described in subclause (I) who is
a provider of medical care under the plan.
(iii)
Clause (i) shall not apply to an association health plan which
is in existence on the date of the enactment of the Small Business Health
Fairness Act of 2005.
(B)
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) 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 define for purposes of this subsection the terms
franchiser
, franchise network
, and
franchisee
.
804.
Participation and coverage requirements
(a)
Covered employers and individuals
The requirements of this subsection are met with respect to an
association health plan if, under the terms of the plan—
(1)
each participating employer must be—
(A)
a member of the sponsor;
(B)
the sponsor; or
(C)
an affiliated member of the sponsor with respect to which the
requirements of subsection (b) are met, except that, in the case of a sponsor
which is a professional association or other individual-based association, if
at least one of the officers, directors, or employees of an employer, or at
least one of the individuals who are partners in an employer and who actively
participates in the business, is a member or such an affiliated member of the
sponsor, participating employers may also include such employer; and
(2)
all individuals commencing coverage under the plan after
certification under this part must be—
(A)
active or retired owners (including self-employed individuals),
officers, directors, or employees of, or partners in, participating employers;
or
(B)
the beneficiaries of individuals described in subparagraph
(A).
(b)
Coverage of previously uninsured employees
In the case of an association health plan in existence on the
date of the enactment of the Small Business Health Fairness Act of 2005, an
affiliated member of the sponsor of the plan may be offered coverage under the
plan as a participating employer only if—
(1)
the affiliated member was an affiliated member on the date of
certification under this part; or
(2)
during the 12-month period preceding the date of the offering
of such coverage, the affiliated member has not maintained or contributed to a
group health plan with respect to any of its employees who would otherwise be
eligible to participate in such association health plan.
(c)
Individual market unaffected
The requirements of this subsection are met with respect to an
association health plan if, under the terms of the plan, no participating
employer may provide health insurance coverage in the individual market for any
employee not covered under the plan which is similar to the coverage
contemporaneously provided to employees of the employer under the plan, if such
exclusion of the employee from coverage under the plan is based on a health
status-related factor with respect to the employee and such employee would, but
for such exclusion on such basis, be eligible for coverage under the
plan.
(d)
Prohibition of discrimination against employers and employees
eligible to participate
The requirements of this subsection are met with respect to an
association health plan if—
(1)
under the terms of the plan, all employers meeting the
preceding requirements of this section are eligible to qualify as participating
employers for all geographically available coverage options, unless, in the
case of any such employer, participation or contribution requirements of the
type referred to in section 2711 of the Public
Health Service Act are not met;
(2)
upon request, any employer eligible to participate is furnished
information regarding all coverage options available under the plan; and
(3)
the applicable requirements of sections 701, 702, and 703 are
met with respect to the plan.
805.
Other requirements relating to plan documents, contribution
rates, and benefit options
(a)
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 shall not vary on the basis of any health
status-related factor in relation to employees of such employer or their
beneficiaries and shall 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)
(A)
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)
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.
(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 (1) any law to the
extent that it is not preempted under section 731(a)(1) with respect to matters
governed by section 711, 712, or 713, or (2) any law of the State with which
filing and approval of a policy type offered by the plan was initially obtained
to the extent that such law prohibits an exclusion of a specific disease from
such coverage.
806.
Maintenance of reserves and provisions for solvency for plans
providing health benefits in addition to health insurance coverage
(a)
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)
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
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. The applicable authority may by
regulation 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
person issuing to a plan insurance described in clause (i), (ii), or (iii) of
subparagraph (B) shall notify the Secretary of any failure of premium payment
meriting cancellation of the policy prior to undertaking such a cancellation.
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, considering
the level of aggregate and specific excess/stop loss insurance provided with
respect to such plan and other factors related to solvency risk, such as the
plan’s projected levels of participation or claims, the nature of the plan’s
liabilities, and the types of assets available to assure that such liabilities
are met.
(c)
In the case of any association health plan described in
subsection (a)(2), the applicable authority may provide such additional
requirements relating to reserves, excess/stop loss insurance, and
indemnification insurance as the applicable authority considers appropriate.
Such requirements may be provided by regulation 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 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)
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)
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) 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) 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 by regulation) 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); and
(3)
which allows for payment of premiums by any third party on
behalf of the insured plan.
(i)
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 by regulation.
(j)
Solvency Standards Working Group
(1)
Within 90 days after the date of the enactment of the Small
Business Health Fairness Act of 2005, 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)
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.
(F)
A representative of multiemployer plans that are group health
plans, or their interests.
807.
Requirements for application and related
requirements
(a)
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 by regulation, at least the
following information:
(1)
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)
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)
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)
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)
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.
(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)
Any other information as may be determined by the applicable
authority, by regulation, 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. The applicable authority may require by regulation
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 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.
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, not less than 60 days
before the proposed termination date—
(1)
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.
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) 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)
In any case in which—
(1)
the applicable authority has been notified under subsection (a)
(or by an issuer of excess/stop loss insurance or indemnity insurance pursuant
to section 806(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.
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, 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)
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, 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 or required by any
order of the court;
(8)
to terminate the plan (or provide for its termination in
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)
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)
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)
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)
(1)
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)
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)
In accordance with regulations which shall be prescribed by the
Secretary, 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.
811.
State assessment authority
(a)
Notwithstanding section 514, a State may impose by law a
contribution tax on an association health plan described in section 806(a)(2),
if the plan commenced operations in such State after the date of the enactment
of the Small Business Health Fairness Act of 2005.
(b)
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.
812.
Definitions and rules of construction
(a)
For purposes of this part—
(1)
The term group health plan has the meaning
provided in section 733(a)(1) (after applying subsection (b) of this
section).
(2)
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)
The term health insurance issuer has the meaning
provided in section 733(b)(2).
(5)
The term applicable authority means the Secretary,
except that, in connection with any exercise of the Secretary’s authority
regarding which the Secretary is required under section 506(d) to consult with
a State, such term means the Secretary, in consultation with such State.
(6)
Health status-related factor
The term health status-related factor has the
meaning provided in section 733(d)(2).
(7)
(A)
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)
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)
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)
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)
The term qualified actuary means an individual who
is a member of the American Academy of Actuaries.
(11)
The term affiliated member means, in connection
with a sponsor—
(A)
a person who is otherwise eligible to be a member of the
sponsor but who elects an affiliated status with the sponsor,
(B)
in the case of a sponsor with members which consist of
associations, a person who is a member of any such association and elects an
affiliated status with the sponsor, or
(C)
in the case of an association health plan in existence on the
date of the enactment of the Small Business Health Fairness Act of 2005, a
person eligible to be a member of the sponsor or one of its member
associations.
(12)
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)
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)
(1)
For purposes of determining whether a plan, fund, or program is
an employee welfare benefit plan which is an association health plan, and for
purposes of applying this title in connection with such plan, fund, or program
so determined to be such an employee welfare benefit plan—
(A)
in the case of a partnership, the term employer
(as defined in section 3(5)) includes the partnership in relation to the
partners, and the term employee (as defined in section 3(6))
includes any partner in relation to the partnership; and
(B)
in the case of a self-employed individual, the term
employer (as defined in section 3(5)) and the term
employee (as defined in section 3(6)) shall include such
individual.
(2)
Plans, funds, and programs treated as employee welfare
benefit plans
In the case of any plan, fund, or program which was established
or is maintained for the purpose of providing medical care (through the
purchase of insurance or otherwise) for employees (or their dependents) covered
thereunder and which demonstrates to the Secretary that all requirements for
certification under this part would be met with respect to such plan, fund, or
program if such plan, fund, or program were a group health plan, such plan,
fund, or program shall be treated for purposes of this title as an employee
welfare benefit plan on and after the date of such demonstration.
.
(b)
Conforming amendments to preemption rules
(1)
Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is
amended by adding at the end the following new subparagraph:
(E)
The preceding subparagraphs of this paragraph do not apply with
respect to any State law in the case of an association health plan which is
certified under part 8.
.
(2)
Section 514 of such Act (29 U.S.C. 1144) is amended—
(A)
in subsection (b)(4), by striking Subsection (a)
and inserting Subsections (a) and (d)
;
(B)
in subsection (b)(5), by striking subsection (a)
in subparagraph (A) and inserting subsection (a) of this section and
subsections (a)(2)(B) and (b) of section 805
, and by striking
subsection (a)
in subparagraph (B) and inserting
subsection (a) of this section or subsection (a)(2)(B) or (b) of section
805
;
(C)
by redesignating subsection (d) as subsection (e); and
(D)
by inserting after subsection (c) the following new
subsection:
(d)
(1)
Except as provided in subsection (b)(4), the provisions of this
title shall supersede any and all State laws insofar as they may now or
hereafter preclude, or have the effect of precluding, a health insurance issuer
from offering health insurance coverage in connection with an association
health plan which is certified under part 8.
(2)
Except as provided in paragraphs (4) and (5) of subsection (b)
of this section—
(A)
In any case in which health insurance coverage of any policy
type is offered under an association health plan certified under part 8 to a
participating employer operating in such State, the provisions of this title
shall supersede any and all laws of such State insofar as they may preclude a
health insurance issuer from offering health insurance coverage of the same
policy type to other employers operating in the State which are eligible for
coverage under such association health plan, whether or not such other
employers are participating employers in such plan.
(B)
In any case in which health insurance coverage of any policy
type is offered in a State under an association health plan certified under
part 8 and the filing, with the applicable State authority (as defined in
section 812(a)(9)), 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)
Nothing in subsection (b)(6)(E) or the preceding provisions of
this subsection shall be construed, with respect to health insurance issuers or
health insurance coverage, to supersede or impair the law of any State—
(A)
providing solvency standards or similar standards regarding the
adequacy of insurer capital, surplus, reserves, or contributions, or
(B)
relating to prompt payment of claims.
(4)
For additional provisions relating to association health plans,
see subsections (a)(2)(B) and (b) of section 805.
(5)
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 812, respectively.
.
(3)
Section 514(b)(6)(A) of such Act (29 U.S.C. 1144(b)(6)(A))
is amended—
(A)
in clause (i)(II), by striking and
at the
end;
(B)
in clause (ii), by inserting and which does not provide
medical care (within the meaning of section 733(a)(2)),
after
arrangement,
, and by striking title.
and
inserting title, and
; and
(C)
by adding at the end the following new clause:
(iii)
subject to subparagraph (E), in the case of any other employee
welfare benefit plan which is a multiple employer welfare arrangement and which
provides medical care (within the meaning of section 733(a)(2)), any law of any
State which regulates insurance may apply.
.
(4)
Section 514(e) of such Act (as redesignated by paragraph (2)(C))
is amended—
(A)
by striking Nothing
and inserting (1)
Except as provided in paragraph (2), nothing
; and
(B)
by adding at the end the following new paragraph:
(2)
Nothing in any other provision of law enacted on or after the
date of the enactment of the Small Business Health Fairness Act of 2005 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)
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)
Section 731(c) of such Act is amended by inserting or part
8
after this part
.
(f)
Report to congress regarding certification of Self-Insured
association health plans
Not later than January 1, 2010, the Secretary of Labor shall
report to the Committee on Health, Education, Labor, and Pensions of the Senate
and the Committee on Education and the Workforce of the House of
Representatives the effect association health plans have had, if any, on
reducing the number of uninsured individuals.
(g)
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
801. Association health plans.
802. Certification of association health
plans.
803. Requirements relating to sponsors and
boards of trustees.
804. Participation and coverage
requirements.
805. Other requirements relating to plan
documents, contribution rates, and benefit options.
806. Maintenance of reserves and
provisions for solvency for plans providing health benefits in addition to
health insurance coverage.
807. Requirements for application and
related requirements.
808. Notice requirements for voluntary
termination.
809. Corrective actions and mandatory
termination.
810. Trusteeship by the Secretary of
insolvent association health plans providing health benefits in addition to
health insurance coverage.
811. State assessment
authority.
812. Definitions and rules of
construction.
.
3.
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 after control group,
the following: except that, in any case in which the benefit referred to
in subparagraph (A) consists of medical care (as defined in section 812(a)(2)),
2 or more trades or businesses, whether or not incorporated, shall be deemed a
single employer for any plan year of such plan, or any fiscal year of such
other arrangement, if such trades or businesses are within the same control
group during such year or at any time during the preceding 1-year
period,
;
(2)
in clause (iii), by striking (iii) the
determination
and inserting the following:
(iii)
(I)
in any case in which the benefit referred to in subparagraph
(A) consists of medical care (as defined in section 812(a)(2)), the
determination of whether a trade or business is under common
control
with another trade or business shall be determined under
regulations of the Secretary applying principles consistent and coextensive
with the principles applied in determining whether employees of 2 or more
trades or businesses are treated as employed by a single employer under section
4001(b), except that, for purposes of this paragraph, an interest of greater
than 25 percent may not be required as the minimum interest necessary for
common control, or
(II)
in any other case, the determination
;
(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 any case in which the benefit referred to in subparagraph
(A) consists of medical care (as defined in section 812(a)(2)), in determining,
after the application of clause (i), whether benefits are provided to employees
of 2 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,
.
4.
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 described in section 3(40)(A)(i),
shall, upon conviction, be imprisoned not more than 5 years, be fined under
title 18, United States Code, or both.
.
(b)
Section 502 of such Act (29 U.S.C. 1132) is amended by
adding at the end the following new subsection:
(n)
Association health plan cease and desist orders
(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)
Additional equitable relief
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) is amended by
inserting (a) In general.—
before In accordance
, and by adding at the end the following new
subsection:
(b)
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.
.
5.
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:
(d)
Consultation with States with respect to association health
plans
(1)
The Secretary shall consult with the State recognized under
paragraph (2) with respect to an association health plan regarding the exercise
of—
(A)
the Secretary’s authority under sections 502 and 504 to enforce
the requirements for certification under part 8; and
(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.
(2)
Recognition of primary domicile State
In carrying out paragraph (1), the Secretary shall ensure that
only one State will be recognized, with respect to any particular association
health plan, as the State with which consultation is required. In carrying out
this paragraph—
(A)
in the case of a plan which provides health insurance coverage
(as defined in section 812(a)(3)), such State shall be the State with which
filing and approval of a policy type offered by the plan was initially
obtained, and
(B)
in any other case, 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.
.
6.
Effective date and transitional and other rules
(a)
The amendments made by this Act shall take effect one year after
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 Act within
one year after the date of the enactment of this Act.
(b)
Treatment of certain existing health benefits programs
(1)
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) and 803(a) 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)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.