110 HR 5923 IH: Small
U.S. House of Representatives
2008-04-29
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title; table of
contents
(a)This Act may be cited as the Patients’ Health Care Reform
Act
.
(b)The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purposes.
Title I—Healthmarts
Sec. 101. Expansion of consumer choice through
Healthmarts.
Title II—Health care access and choice through individual
membership associations (IMAs)
Sec. 201. Expansion of access and choice through individual
membership associations (IMAs).
Title III—Federal Matching Funding for State Insurance
Expenditures
Sec. 301. Federal matching funding for State insurance
expenditures.
Title IV—Affordable Health Coverage for Employees of Small
Businesses
Sec. 401. Short title of title.
Sec. 402. Rules.
Sec. 403. Clarification of treatment of single employer
arrangements.
Sec. 404. Clarification of treatment of certain collectively
bargained arrangements.
Sec. 405. Enforcement provisions.
Sec. 406. Cooperation between Federal and State
authorities.
Sec. 407. Effective date and transitional and other
rules.
Title V—Improvement to Access and Choice of Health
Care
Sec. 501. Refundable and advanceable credit for health
insurance costs.
Sec. 502. Exclusion for employer payments made to compensate
employees who elect not to participate in employer-subsidized health
plans.
Title VI—Patient Access to Information
Sec. 601. Patient access to information regarding plan
coverage, managed care procedures, health care providers, and quality of
medical care.
Sec. 602. Effective date.
(c)Constitutional
authority To enact this legislationThe constitutional authority
upon which this Act rests is the power of Congress to regulate commerce with
foreign nations and among the several States, set forth in article I, section 8
of the United States Constitution.
2.
(a)Need for
structural reformsCongress finds that the majority of Americans
are receiving health care of a quality unmatched elsewhere in the world but
that the method by which health care currently is financed and delivered is
inflationary and does not distribute quality care to all Americans. Congress
further finds that the major structural reforms must be implemented in order to
institute a competitive system based on individual choice, under which each
American is permitted individual choice to select the method of health care
delivery which he believes is most appropriate for himself and his family, with
appropriate assistance from the United States Government. Such a system would
introduce internal incentives for the cost-effective delivery of quality health
care to the American people.
(b)Congress finds that the major deficiencies of the
present method of delivering and financing health care as follows:
(1)Employer
ownership of health benefitsThe biggest problem with health care
today is that the tax code has encouraged employers, not individuals, to become
the purchaser of health insurance. Employers have a tax incentive to offer
health care benefits to their employees, which means that employers are truly
the owner of the plan, not individuals. Therefore employees, who are the
consumers of health care services are unconcerned with and not involved with
issues of cost and overutilize health care services in the belief that such
services are free
.
(2)Numerous persons are not able to obtain sufficient health
care either because the necessary personnel and facilities are not located in
their communities or because they do not have adequate financial resources to
obtain such services, or both.
(3)Excessive
Government regulationContinually increasing and complex
Government regulation of the economic aspects of the health care delivery
system has proven ineffective in restraining costs and is itself expensive and
counterproductive in fulfilling its purposes and detrimental to the care of
patients.
(4)Third-party
payment systemsPayment by third-party payers (including
commercial insurance companies and various levels of government) for the
preponderance of the health care delivered each year insulates patients, as
well as physicians, hospitals, and other deliverers of health care, from the
need to consider the cost of treatment in addition to the medical benefit
expected from it.
(5)Reasonable cost
reimbursementReimbursement of hospitals and other health care
institutions by third-party payers on the basis of reasonable costs of
operation provides these institutions insufficient incentives to introduce more
efficient methods of delivering care and at the same time diminishes the extent
to which these institutions and their patients are affected by the consequences
of inefficiency and overexpansion.
(6)Government and
third-party payerThe present role of government as a third-party
payer poses a conflict of interest whereby the Government purchases or finances
health care services and unilaterally determines the amount the deliverer will
be paid for those services.
(7)The present system of financing and regulation
prevents health care deliverers from competing with each other on the basis of
efficiency and price as well as quality.
3.The purposes of Act are—
(1)to make it
possible for individuals, employees, and the self-employed to purchase and own
their own health insurance without suffering any negative tax
consequences;
(2)to enable
individuals to make their own informed choice of the method by which their
health care is provided, the persons who deliver it, and the price they wish to
pay for it;
(3)to assist
individuals in obtaining and in paying for basic health care services;
(4)to render patients
and deliverers sensitive to the cost of health care, giving them both the
incentive and the ability to restrain undesired increases in health care
costs;
(5)to
simplify and rationalize the payment mechanism for health care services;
(6)to foster the
development of numerous, varied, and innovative systems of providing health
care which will compete against each other in terms of price, service, and
quality, and thus allow the American people to benefit from competitive forces
which will reward efficient and effective deliverers and eliminate those which
provide unsatisfactory quality of care or are inefficient;
(7)to
replace governmental regulation of the economic aspects of health care delivery
with individual choice, private initiative, and marketplace incentives and
disciplines;
(8)to encourage the
development of systems of delivering health care which are capable of supplying
a broad range of health care services in a comprehensive and systematic manner,
and
(9)to preserve the
independence of health care deliverers and encourage their close identification
with and their accountability to the individuals they serve.
<enum>I</enum><header>Healthmarts</header>
<section id="H02CF005B465E4AC69178330253CDEA9D"><enum>101.</enum><header>Expansion of
consumer choice through Healthmarts</header><text display-inline="no-display-inline">The <act-name parsable-cite="PHSA">Public
Health Service Act, </act-name> as amended by section 2 of the Lifespan Respite
Care Act of 2006 (<external-xref legal-doc="public-law" parsable-cite="pl/109/442">Public Law 109–442</external-xref>), is amended by adding at the end the
following new title:</text>
<quoted-block act-name="Public Health Service Act" id="H54A1B5F208D34C71B6E5F014CB6472AB">
<title id="HB93070BF3EB5405B8216AAB8ED0071A4"><enum>XXX</enum><header>Healthmarts</header>
<section id="H908948604B1A404993227010783E88BA"><enum>3001.</enum><header>Definition of
HealthMart</header>
<subsection id="H75A5299DB50A41DD966E229D22BBC009"><enum>(a)</enum><header>In
General</header><text>For purposes of this title, the term
<term>HealthMart</term> means a legal entity that meets the following
requirements:</text>
<paragraph id="HCF224571FAB2427E84BB03E9751BF6D9"><enum>(1)</enum><header>Organization</header><text>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:</text>
<subparagraph id="H16AF07CD90EC4A8D967399B3ED5E4437"><enum>(A)</enum><text>Employers.</text>
</subparagraph><subparagraph id="HFE90971C0025448AA1913CA1CE007C68"><enum>(B)</enum><text>Employees.</text>
</subparagraph><subparagraph id="H772067A88A564C148917C7F752DA7D72"><enum>(C)</enum><text>Individuals (other
than those described in subparagraph (B)) who are eligible to participate in
the HealthMart.</text>
</subparagraph><subparagraph id="H88E630B358CD46EB85107D949B4E7928"><enum>(D)</enum><text>Health care
providers, which may be physicians, other health care professionals, health
care facilities, or any combination thereof.</text>
</subparagraph><subparagraph id="H24363AF47D3141B59B85B497AEE5D71E"><enum>(E)</enum><text>Entities, such as
insurance companies, health maintenance organizations, and licensed
provider-sponsored organizations, that underwrite or administer health benefits
coverage.</text>
</subparagraph></paragraph><paragraph id="H1E186FBAFBEB4AA287006FC4AD496533"><enum>(2)</enum><header>Offering health
benefits coverage</header>
<subparagraph id="H549C788DFF1E4860BF4C3752EED063D1"><enum>(A)</enum><header>Different
groups</header><text>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
all employers, eligible employees, and individuals 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 <act-name parsable-cite="ERISA">Employee Retirement Income Security
Act of 1974</act-name>, 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).</text>
</subparagraph><subparagraph id="H21F8E66B4B854169AB9516BFC6C4E13E"><enum>(B)</enum><header>Nondiscrimination
in coverage offered</header>
<clause id="H637E34AF308C490283CB57F98B294891"><enum>(i)</enum><header>In
General</header><text>Subject to clause (ii), the HealthMart may not offer
health benefits coverage to an eligible employee or individual in a geographic
area (as specified under paragraph (3)(A)) unless the same coverage is offered
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.</text>
</clause><clause id="H171A9F0C38DD4A43876302DD405555D"><enum>(ii)</enum><header>Construction</header><text>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.</text>
</clause></subparagraph><subparagraph id="H4FC770FDA6ED43FD9C5B090000C9F1F0"><enum>(C)</enum><header>No financial
underwriting</header><text>The HealthMart provides health benefits coverage
only through contracts with health insurance issuers and does not assume
insurance risk with respect to such coverage.</text>
</subparagraph><subparagraph id="H8AF56F6984FF4473B798544FB1C56DD9"><enum>(D)</enum><header>Minimum
coverage</header><text>By the end of the first year of its operation and
thereafter, the HealthMart maintains not fewer than 10 purchasers and 100
members.</text>
</subparagraph></paragraph><paragraph id="H00B63D3575B84A5A9628E87B7D5648BC"><enum>(3)</enum><header>Geographic
areas</header>
<subparagraph id="H8FBF2ADA5D3441FC8E21735697AF99B0"><enum>(A)</enum><header>Specification of
geographic areas</header><text>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.</text>
</subparagraph><subparagraph id="H7D4200EB5C364AB0906FBE68BD8C89B3"><enum>(B)</enum><header>Multistate
areas</header><text>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.</text>
</subparagraph><subparagraph id="H40E3429B840249C5B75FDB60B73600F5"><enum>(C)</enum><header>Multiple
Healthmarts permitted in single geographic area</header><text>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.</text>
</subparagraph></paragraph><paragraph id="H79009DC0241241598696629883596103"><enum>(4)</enum><header>Provision of
administrative services to purchasers</header>
<subparagraph id="H939E091A483F4EEC8C99DAFE338FB9DA"><enum>(A)</enum><header>In
General</header><text>The HealthMart provides administrative services for
purchasers. Such services may include accounting, billing, enrollment
information, and employee coverage status reports.</text>
</subparagraph><subparagraph id="H0AE969BC5F034352BB61A165007DA0AA"><enum>(B)</enum><header>Construction</header><text>Nothing
in this subsection shall be construed as preventing a HealthMart from serving
as an administrative service organization to any entity.</text>
</subparagraph></paragraph><paragraph id="H6B0062C0818F4B1EA7CE14C04D8D50"><enum>(5)</enum><header>Dissemination of
information</header><text>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.</text>
</paragraph><paragraph id="H98610E57F9754A67849CED973DB1FD00"><enum>(6)</enum><header>Filing
information</header><text>The HealthMart—</text>
<subparagraph id="H347841256C1643A4A6A48F007E997D29"><enum>(A)</enum><text>files with the
applicable Federal authority information that demonstrates the HealthMart’s
compliance with the applicable requirements of this title; or</text>
</subparagraph><subparagraph id="HF4DBDE75DD0B434AABC8B684717CDE6"><enum>(B)</enum><text>in accordance with
rules established under section 3003(a), files with a State such information as
the State may require to demonstrate such compliance.</text>
</subparagraph></paragraph></subsection><subsection id="HC2B81B04993F465484F1C976F83C5BA1"><enum>(b)</enum><header>Health benefits
coverage requirements</header>
<paragraph id="HA8C0D0D969074854952CE914A87E2C3"><enum>(1)</enum><header>Compliance with
consumer protection requirements</header><text>Any health benefits coverage
offered through a HealthMart shall—</text>
<subparagraph id="H23982EAEE95E4FB48FFC6975C32EE44"><enum>(A)</enum><text>be underwritten by
a health insurance issuer that—</text>
<clause id="H15B991429C9D4D1AA2F582A095F895C4"><enum>(i)</enum><text>is
licensed (or otherwise regulated) under State law;</text>
</clause><clause id="H1B9FBF6106E04960A0E4CDB1E9EB83CD"><enum>(ii)</enum><text>meets all
applicable State standards relating to consumer protection, subject to section
3002(b); and</text>
</clause><clause id="H0AE0960BA3EF491391B5E2DD00C1B06F"><enum>(iii)</enum><text>offers the
coverage under a contract with the HealthMart;</text>
</clause></subparagraph><subparagraph id="H904F7F7772CE41B7A573E7EB31FEB53F"><enum>(B)</enum><text>subject to
paragraph (2), be approved or otherwise permitted to be offered under State
law; and</text>
</subparagraph><subparagraph id="H86E29C4416C441609200AEE1314CF8DC"><enum>(C)</enum><text>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 <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> 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.</text>
</subparagraph></paragraph><paragraph id="H66D4F76C904A462B8BC20000DD00B863"><enum>(2)</enum><header>Alternative
process for approval of health benefits coverage in case of discrimination or
delay</header>
<subparagraph id="HFD70C84CE40A4723A385C8CEFDD452EB"><enum>(A)</enum><header>In
General</header><text>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—</text>
<clause id="H33601B7F2D04462E95E6FD49E517CA3"><enum>(i)</enum><text>either (or both) of
the grounds described in subparagraph (B) for approval of the application has
been met; and</text>
</clause><clause id="H4C688C1AF51B493CA8BFF0AE5E95D1B2"><enum>(ii)</enum><text>the coverage
meets the applicable State standards (other than those that have been preempted
under section 3002).</text>
</clause></subparagraph><subparagraph id="HCFC2FD286758480893BC2E2C3FFF40A8"><enum>(B)</enum><header>Grounds</header><text>The
grounds described in this subparagraph with respect to a policy or product of
health benefits coverage are as follows:</text>
<clause id="H8FE7684C46C24D5E8E0548DED6A27C4B"><enum>(i)</enum><header>Failure to Act
on policy, product, or rate application on a timely basis</header><text>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.</text>
</clause><clause id="H8A240770041946C7B453EF6863149759"><enum>(ii)</enum><header>Denial of
application based on discriminatory treatment</header><text>The State has
denied such an application and—</text>
<subclause id="HE644433C0C5A45E58B1DE5F3009CB48E"><enum>(I)</enum><text>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 3002;
or</text>
</subclause><subclause id="H7FBB21BAE03A4CB5BF8BCCA56D80A533"><enum>(II)</enum><text>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.</text>
</subclause></clause></subparagraph><subparagraph id="H278623BDA2A94FEF83D4C94FD9AF47F4"><enum>(C)</enum><header>Enforcement</header><text>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).</text>
</subparagraph></paragraph><paragraph id="H8426B4D61C7F4E5D8C751FC897842550"><enum>(3)</enum><header>Examples of
types of coverage</header><text>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:</text>
<subparagraph id="HAE5061DFB7304E48A3D98DD1EB2015E2"><enum>(A)</enum><text>Coverage through a
health maintenance organization.</text>
</subparagraph><subparagraph id="HC8F2BC3E56044079AF12C64E20ADCCA"><enum>(B)</enum><text>Coverage in
connection with a preferred provider organization.</text>
</subparagraph><subparagraph id="H4E4EF6ECDE7B438089F86FE5F516DCCB"><enum>(C)</enum><text>Coverage in
connection with a licensed provider-sponsored organization.</text>
</subparagraph><subparagraph id="H41CC746D62544CD794F2C7DDDAA6B72"><enum>(D)</enum><text>Indemnity coverage
through an insurance company.</text>
</subparagraph><subparagraph id="H629ACD5CEE6A4B5899571851F225E872"><enum>(E)</enum><text>Coverage offered
in connection with a contribution into a medical savings account or flexible
spending account.</text>
</subparagraph><subparagraph id="H4D995F36B7DD49A18B5BEFDCD2DE2136"><enum>(F)</enum><text>Coverage that
includes a point-of-service option.</text>
</subparagraph><subparagraph id="H7130126DF94D43A1AAE68DD985B797B"><enum>(G)</enum><text>Any combination of
such types of coverage.</text>
</subparagraph></paragraph><paragraph id="H46B51AB290514E70B14272A8F0A25389"><enum>(4)</enum><header>Wellness bonuses
for health promotion</header><text>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.</text>
</paragraph></subsection><subsection id="H9CA850FE0E3D41E0BCD34D3184E125AD"><enum>(c)</enum><header>Purchasers;
members; health insurance issuers</header>
<paragraph id="H9C05291A2EC943D3A1411D86D4DDC412"><enum>(1)</enum><header>Purchasers</header>
<subparagraph id="HC09762C1C47D408000A292F2CFE2C66"><enum>(A)</enum><header>In
General</header><text>Subject to the provisions of this title, a HealthMart
shall permit any employer or any individual described in subsection (a)(1)(C)
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.</text>
</subparagraph><subparagraph id="H2C04B99BF8BC40E1A590021858EEC445"><enum>(B)</enum><header>Role of
associations, brokers, and licensed health insurance
agents</header><text>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.</text>
</subparagraph><subparagraph id="H4AAB9DFC40A44B88821100FCBC6D86D1"><enum>(C)</enum><header>Period of
contract</header><text>The HealthMart may not require a contract under
subparagraph (A) between a HealthMart and a purchaser to be effective for a
period of longer than 24 months. The previous sentence shall not be construed
as preventing such a contract from being extended for additional 24-month
periods or preventing the purchaser from voluntarily electing a contract period
of longer than 24 months.</text>
</subparagraph><subparagraph id="H9D4A12E5F0354582B3A3F5B0906E2CB"><enum>(D)</enum><header>Exclusive nature
of contract</header>
<clause id="HB9F1E070E626442692E380F87DE706FA"><enum>(i)</enum><header>In
General</header><text>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.</text>
</clause><clause id="H1D5767C344894E768E66BDAA1E39248"><enum>(ii)</enum><header>Exception if no
coverage offered in area of residences</header><text>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.</text>
</clause><clause id="H013715561A944A62BE3FC09D609FE408"><enum>(iii)</enum><header>Nothing
precluding individual employee opt-out</header><text>Nothing in this
subparagraph shall be construed as requiring an eligible employee of a large or
small employer that is a purchaser to obtain health benefits coverage through
the HealthMart.</text>
</clause></subparagraph></paragraph><paragraph id="HB34210DFF3D34533A57068B3BB98871E"><enum>(2)</enum><header>Members</header>
<subparagraph id="HC1EBA6884FF040188F73E900439BCD16"><enum>(A)</enum><header>In
General</header>
<clause id="HB668C05EE2EC4FCEAB7B6800DBB17F1E"><enum>(i)</enum><header>Employment based
membership</header><text>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 health benefits
coverage (including coverage for dependents of such enrolling employees)
offered by a health insurance issuer through the HealthMart.</text>
</clause><clause id="H8DC63CE49A304D4DAA1F24BC00A31100"><enum>(ii)</enum><header>Individuals</header><text>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 health benefits coverage (including coverage for
dependents of such individual) offered by a health insurance issuer through the
HealthMart.</text>
</clause></subparagraph><subparagraph id="HC84A98F21CE04D068C37589E355FA3DB"><enum>(B)</enum><header>Nondiscrimination
in enrollment</header><text>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).</text>
</subparagraph><subparagraph id="HB272F127CC46495EA9F9F375940C1BE"><enum>(C)</enum><header>Annual open
enrollment period</header><text>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.</text>
</subparagraph><subparagraph id="HCA51BBDE70C5469DB6F8F1F3ADCFD44"><enum>(D)</enum><header>Rules of
eligibility</header><text>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.</text>
</subparagraph></paragraph><paragraph id="H594F0CFE8D0648DEB9A4CC288C9ADDA"><enum>(3)</enum><header>Health insurance
issuers</header>
<subparagraph id="H1EF542F665CF4ABBA4C349ACF5E70006"><enum>(A)</enum><header>Premium
collection</header><text>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.</text>
</subparagraph><subparagraph id="H92DDFBECB9AF408386E184FD761FA129"><enum>(B)</enum><header>Scope of service
area</header><text>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.</text>
</subparagraph><subparagraph id="HA663058F374A4A53BC680043FF70C7BD"><enum>(C)</enum><header>Availability of
coverage options</header>
<clause id="HCE59F9231E174CF59CF1E0357BF9A4F3"><enum>(i)</enum><header>In
General</header><text>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.</text>
</clause><clause id="H8C823D0D62FF4A248DEB6C32FAA3A9A5"><enum>(ii)</enum><header>Requirement of
non-network option</header><text>At least one of the health insurance coverage
options made available under clause (i) shall be a non-network coverage option
under which enrollees may obtain benefits for health care items and services
that are not provided under a contract between the provider of the service and
the issuer involved.</text>
</clause></subparagraph></paragraph></subsection><subsection id="H70BC355892BA467C91FD962126AA2400"><enum>(d)</enum><header>Prevention of
conflicts of interest</header>
<paragraph id="HF9CBBD98D37841FAB76FCBBFF8F7EE2"><enum>(1)</enum><header>For boards of
directors</header><text>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.</text>
</paragraph><paragraph id="HC74635E207604F77897759077CCB00E4"><enum>(2)</enum><header>For boards of
directors or employees</header><text>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.</text>
</paragraph><paragraph id="H16BC298FEFFA48F08D00997D9C478936"><enum>(3)</enum><header>Employment and
employee representatives</header>
<subparagraph id="HBBE0736CCDB946CB8B37DA5DF81628D5"><enum>(A)</enum><header>In
General</header><text>An individual who is serving on a board of directors of a
HealthMart as a representative described in subparagraph (A) or (B) of section
3001(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.</text>
</subparagraph><subparagraph id="H5FC5EDE10C914116AA00B8281D09AB29"><enum>(B)</enum><header>Construction</header><text>For
purposes of subparagraph (A), the term <term>affiliated</term> does not include
membership in a health benefits plan or the obtaining of health benefits
coverage offered by a health insurance issuer.</text>
</subparagraph></paragraph></subsection><subsection id="H537E852A25444A01B6674907652B5E64"><enum>(e)</enum><header>Construction</header>
<paragraph id="HA4275D55853046E288F2A9072200002F"><enum>(1)</enum><header>Network of
affiliated Healthmarts</header><text>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):</text>
<subparagraph id="H67806FF5E6BC428C9FD977616232D418"><enum>(A)</enum><text>Coordinating the
offering of the same or similar health benefits coverage in different areas
served by the different HealthMarts.</text>
</subparagraph><subparagraph id="H523C4160EB68471D9281B257B03D4B52"><enum>(B)</enum><text>Providing for
crediting of deductibles and other cost-sharing for individuals who are
provided health benefits coverage through the HealthMarts (or affiliated
HealthMarts) after—</text>
<clause id="H0C683BBC4B9042B6BF2070D478BAAF3"><enum>(i)</enum><text>a
change of employers through which the coverage is provided, or</text>
</clause><clause id="H8164A93910F74AF5002616C1B517502"><enum>(ii)</enum><text>a
change in place of employment to an area not served by the previous
HealthMart.</text>
</clause></subparagraph></paragraph><paragraph id="HB2B8E3AE20004FA290E8C4D0137C4700"><enum>(2)</enum><header>Permitting
Healthmarts to adjust distributions among issuers to reflect relative risk of
enrollees</header><text>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.</text>
</paragraph></subsection></section><section id="HB739A7B259D44499A5B6D1738D34D188"><enum>3002.</enum><header>Application of
certain laws and requirements</header>
<subsection id="HC189F5E20E924F9200A46F5DF7DC4066"><enum>(a)</enum><header>Authority of
States</header><text>Nothing in this section shall be construed as preempting
State laws relating to the following:</text>
<paragraph id="HE31B20ACC0F84A4696996FF6A58EC74E"><enum>(1)</enum><text>The regulation of
underwriters of health coverage, including licensure and solvency
requirements.</text>
</paragraph><paragraph id="H50D7C9814FBA4A83B4ABDC328E6F3788"><enum>(2)</enum><text>The application of
premium taxes and required payments for guaranty funds or for contributions to
high-risk pools.</text>
</paragraph><paragraph id="H5A1CD76109BC4A46B859B301407D2B96"><enum>(3)</enum><text>The application of
fair marketing requirements and other consumer protections (other than those
specifically relating to an item described in subsection (b)).</text>
</paragraph><paragraph id="H4D1585A538F64954B8F75826EE6BEA1"><enum>(4)</enum><text>The application of
requirements relating to the adjustment of rates for health insurance
coverage.</text>
</paragraph></subsection><subsection id="H6DCFA6D71DA04954A04C003F2C1536CC"><enum>(b)</enum><header>Treatment of
benefit and grouping requirements</header><text>State laws insofar as they
relate to any of the following are superseded and shall not apply to health
benefits coverage made available through a HealthMart:</text>
<paragraph id="HBE00913846FF4E9E911310D9B94D2D"><enum>(1)</enum><text>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.</text>
</paragraph><paragraph id="H87EB64A6716B4FF2A0228285BBBA6C15"><enum>(2)</enum><text>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.</text>
</paragraph><paragraph id="HCF307031506C4D7787BCD47C0054B875"><enum>(3)</enum><text>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.</text>
</paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection><subsection id="H9E8B4F43484D4094A90382B220EC5B78"><enum>(c)</enum><header>Application of
ERISA fiduciary and disclosure requirements</header><text>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 <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> 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.</text>
</subsection><subsection id="H6F30724D617843D18605FBA064061F37"><enum>(d)</enum><header>Application of
ERISA renewability protection</header><text>A HealthMart is deemed to be group
health plan that is a multiple employer welfare arrangement for purposes of
applying section 703 of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name>.</text>
</subsection><subsection id="HB1167A149BF9481B9D4CDBB4B5006030"><enum>(e)</enum><header>Application of
rules for network plans and financial capacity</header><text>The provisions of
subsections (c) and (d) of section 2711 apply to health benefits coverage
offered by a health insurance issuer through a HealthMart.</text>
</subsection><subsection id="H522AB3A905044E988C919C5C9B0122B8"><enum>(f)</enum><header>Construction
relating to offering requirement</header><text>Nothing in section 2711(a) of
this Act or 703 of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> 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).</text>
</subsection><subsection id="HB947440BA6F94DB4B49CD9F4ABFD5875"><enum>(g)</enum><header>Application to
guaranteed renewability requirements in case of discontinuation of an
issuer</header><text>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:</text>
<paragraph id="H74335C9156C1457EA5D8F0AA55C62584"><enum>(1)</enum><header>Renewability</header><text>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).</text>
</paragraph><paragraph id="H5CB27B48B20B4B3D966FF09216DC1F26"><enum>(2)</enum><header>Application of
association rules</header><text>The HealthMart shall be considered an
association for purposes of applying section 2712(e).</text>
</paragraph></subsection><subsection id="HB4D9B44E9A864128A97739DC5B008D85"><enum>(h)</enum><header>Construction in
relation to certain other laws</header><text>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 <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> or titles XXII and XXVII of this Act.</text>
</subsection></section><section id="H8ACD7778E03F4672A9DCABEA5FA40AB"><enum>3003.</enum><header>Administration</header>
<subsection id="HD2F95015EDAB4C8700018CD7774FDA30"><enum>(a)</enum><header>In
General</header><text>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 be subject to Congressional review under
the provisions of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/5/8">chapter 8</external-xref> of title 5, United States Code. The applicable
Federal authority shall incorporate the process of <quote>deemed file and
use</quote> with respect to the information filed under section 3001(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.</text>
</subsection><subsection id="H2B13153347844FACA2038802DDC81F3"><enum>(b)</enum><header>Periodic
reports</header><text>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.</text>
</subsection></section><section id="H2A066EB7567344E1A0DABBC51B8034F"><enum>3004.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this title:</text>
<paragraph id="HD8F24E2223974864A3A2951784BA093F"><enum>(1)</enum><header>Applicable
Federal authority</header><text>The term <term>applicable Federal
authority</term> means the Secretary of Health and Human Services .</text>
</paragraph><paragraph id="HB5BAD3B951BB4437A2BBB54ACB2C883"><enum>(2)</enum><header>Eligible employee
or individual</header><text>The term <term>eligible</term> means, with respect
to an employee or other individual and a HealthMart, an employee or individual
who is eligible under section 3001(c)(2) to enroll or be enrolled in health
benefits coverage offered through the HealthMart.</text>
</paragraph><paragraph id="HB56EAA0DCB5949BAAC03B351007095F7"><enum>(3)</enum><header>Employer;
employee; dependent</header><text>Except as the applicable Federal authority
may otherwise provide, the terms <term>employer</term>, <term>employee</term>,
and <term>dependent</term>, 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
<term>dependent</term> may include the spouse and children of the individual
involved.</text>
</paragraph><paragraph id="HCE1C4C5713284975A5C6A6C63C00468D"><enum>(4)</enum><header>Health benefits
coverage</header><text>The term <term>health benefits coverage</term> has the
meaning given the term group health insurance coverage in section
2791(b)(4).</text>
</paragraph><paragraph id="HFA83A3108F54418200B74094033EA910"><enum>(5)</enum><header>Health insurance
issuer</header><text>The term <term>health insurance issuer</term> has the
meaning given such term in section 2791(b)(2).</text>
</paragraph><paragraph id="HE284AC9EBA904C94B8724ECD68B748DD"><enum>(6)</enum><header>Health
status-related factor</header><text>The term <term>health status-related
factor</term> has the meaning given such term in section 2791(d)(9).</text>
</paragraph><paragraph id="HCC148B70E42F4827BBBBC4AD258F4085"><enum>(7)</enum><header>HealthMart</header><text>The
term <term>HealthMart</term> is defined in section 3001(a).</text>
</paragraph><paragraph id="HBEF3362533C4427AA777A9D94755B29B"><enum>(8)</enum><header>Member</header><text>The
term <term>member</term> means, with respect to a HealthMart, an individual
enrolled for health benefits coverage through the HealthMart under section
3001(c)(2).</text>
</paragraph><paragraph id="H49145D8C15DC42A3B536B4290072FA35"><enum>(9)</enum><header>Purchaser</header><text>The
term <term>purchaser</term> means, with respect to a HealthMart, an employer or
individual that has contracted under section 3001(c)(1)(A) with the HealthMart
for the purchase of health benefits
coverage.</text>
</paragraph></section>.
<enum>II</enum><header>Health care access
and choice through individual membership associations (IMAs)</header>
<section id="HFB5EF23A02B946A4AA331734B7FBFD4B"><enum>201.</enum><header>Expansion of
access and choice through individual membership associations
(IMAs)</header><text display-inline="no-display-inline">The
<act-name parsable-cite="PHSA">Public Health Service Act</act-name>, as amended
by section 102, is further amended by adding at the end the following new
title:</text>
<quoted-block act-name="Public Health Service Act" id="HFCFA5AAC9572489D94AD234F5500C392">
<title id="HB17AF83B73D0455AA46CFB6D63811DAB"><enum>XXXI</enum><header>Individual
Membership Associations</header>
<section id="H85B0228E4E454E64B3557612461F9319"><enum>3101.</enum><header>Definition of
individual membership association (IMA)</header>
<subsection id="H8F4B93719C514674809C3BAF2F8B5000"><enum>(a)</enum><header>In
General</header><text>For purposes of this title, the terms <term>individual
membership association</term> and <term>IMA</term> mean a legal entity that
meets the following requirements:</text>
<paragraph id="H88ECA705F11042339B431398AA33001D"><enum>(1)</enum><header>Organization</header><text>The
IMA is an organization operated under the direction of an association (as
defined in section 3104(1)).</text>
</paragraph><paragraph id="HEC2491C0269A438FAA50ED033F4EB384"><enum>(2)</enum><header>Offering health
benefits coverage</header>
<subparagraph id="H057DB0580BA3422A996C3463F3E1A0F4"><enum>(A)</enum><header>Different
groups</header><text>The IMA, in conjunction with those health insurance
issuers that offer health benefits coverage through the IMA, makes available
health benefits coverage in the manner described in subsection (b) to all
members of the IMA and the dependents of such members in the manner described
in subsection (c)(2) at rates 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.</text>
</subparagraph><subparagraph id="H8FBB7BCBC06043FAAB665464447B81CB"><enum>(B)</enum><header>Nondiscrimination
in coverage offered</header>
<clause id="HC117694EDA7D48EB8E2E0035796BE539"><enum>(i)</enum><header>In
General</header><text>Subject to clause (ii), the IMA may not offer health
benefits coverage to a member of an IMA unless the same coverage is offered to
all such members of the IMA.</text>
</clause><clause id="H75AAEE4E08044818A93200C37DF0C574"><enum>(ii)</enum><header>Construction</header><text>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, or requiring a health insurance issuer from excluding or
limiting the coverage on any individual, subject to the requirement of section
2741.</text>
</clause></subparagraph><subparagraph id="H2006192B546D4B18971012C0D05BB4B"><enum>(C)</enum><header>No financial
underwriting</header><text>The IMA provides health benefits coverage only
through contracts with health insurance issuers and does not assume insurance
risk with respect to such coverage.</text>
</subparagraph></paragraph><paragraph id="H4D77026FCCF04AFCB92D007BB0B140B6"><enum>(3)</enum><header>Geographic
areas</header><text>Nothing in this title shall be construed as preventing the
establishment and operation of more than one IMA in a geographic area or as
limiting the number of IMAs that may operate in any area.</text>
</paragraph><paragraph id="H73FE6F53E7FB4ABCA27E527F6D7B3DC7"><enum>(4)</enum><header>Provision of
administrative services to purchasers</header>
<subparagraph id="H07A78C4C11564C15998F85A23C01C000"><enum>(A)</enum><header>In
General</header><text>The IMA may provide administrative services for members.
Such services may include accounting, billing, and enrollment
information.</text>
</subparagraph><subparagraph id="HA531114F15D6458CB700D2329B5E2C00"><enum>(B)</enum><header>Construction</header><text>Nothing
in this subsection shall be construed as preventing an IMA from serving as an
administrative service organization to any entity.</text>
</subparagraph></paragraph><paragraph id="H2AF92A95355D461780786771048D6BB3"><enum>(5)</enum><header>Filing
information</header><text>The IMA files with the Secretary information that
demonstrates the IMA’s compliance with the applicable requirements of this
title.</text>
</paragraph></subsection><subsection id="H09BF7445D3254D8D985F2528DF7E4865"><enum>(b)</enum><header>Health benefits
coverage requirements</header>
<paragraph id="H1A17EEE819B9446793A4F900EAB8588E"><enum>(1)</enum><header>Compliance with
consumer protection requirements</header><text>Any health benefits coverage
offered through an IMA shall—</text>
<subparagraph id="HD0E07FEC7B8C431EAF59BA0083D3E547"><enum>(A)</enum><text>be underwritten by
a health insurance issuer that—</text>
<clause id="H9E955C0F84F04F678650468E053337C7"><enum>(i)</enum><text>is
licensed (or otherwise regulated) under State law,</text>
</clause><clause id="HA56721DC2A344A0E9300EF14541DF9C"><enum>(ii)</enum><text>meets all
applicable State standards relating to consumer protection, subject to section
3002(b), and</text>
</clause></subparagraph><subparagraph id="H118ACB263A9143469220F3A35904EBE6"><enum>(B)</enum><text>subject to
paragraph (2), be approved or otherwise permitted to be offered under State
law.</text>
</subparagraph></paragraph><paragraph id="H4D0C481789FA446F9D6C37B8142BDDBA"><enum>(2)</enum><header>Examples of
types of coverage</header><text>The benefits coverage made available through an
IMA may include, but is not limited to, any of the following if it meets the
other applicable requirements of this title:</text>
<subparagraph id="H179626D015614F2A961200C3D3231977"><enum>(A)</enum><text>Coverage through a
health maintenance organization.</text>
</subparagraph><subparagraph id="H5ED71F60B14C4C4894CA99756659794E"><enum>(B)</enum><text>Coverage in
connection with a preferred provider organization.</text>
</subparagraph><subparagraph id="HF566D8B79C3A48BFA5DA53AC76B1E843"><enum>(C)</enum><text>Coverage in
connection with a licensed provider-sponsored organization.</text>
</subparagraph><subparagraph id="H15CBE2A7F24C410EA74DE2ADCBEF2953"><enum>(D)</enum><text>Indemnity coverage
through an insurance company.</text>
</subparagraph><subparagraph id="H59BB26863F864B119F087710B05085CE"><enum>(E)</enum><text>Coverage offered
in connection with a contribution into a medical savings account or flexible
spending account.</text>
</subparagraph><subparagraph id="H2132111593E7434584003FC9460651A7"><enum>(F)</enum><text>Coverage that
includes a point-of-service option.</text>
</subparagraph><subparagraph id="HF73FE8259B03482CADEAF424166968A6"><enum>(G)</enum><text>Any combination of
such types of coverage.</text>
</subparagraph></paragraph><paragraph id="H6397BAF25F314BDBBDB3C2E133F7CC43"><enum>(3)</enum><header>Wellness bonuses
for health promotion</header><text>Nothing in this title shall be construed as
precluding a health insurance issuer offering health benefits coverage through
an IMA 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 IMA and comply with all other
provisions of this title and do not discriminate among similarly situated
members.</text>
</paragraph></subsection><subsection id="H33314EF64DCB41F49E08069CDF3B0109"><enum>(c)</enum><header>Members; health
insurance issuers</header>
<paragraph id="H6CF9E00343204BCC98DA7D95F3CAFF86"><enum>(1)</enum><header>Members</header>
<subparagraph id="HE663E9FB388945B099F64F98B57B7359"><enum>(A)</enum><header>In
General</header><text>Under rules established to carry out this title, with
respect to an individual who is a member of an IMA, the individual may enroll
for health benefits coverage (including coverage for dependents of such
individual) offered by a health insurance issuer through the IMA.</text>
</subparagraph><subparagraph id="HF41C56625AE54D3BBB1954F707AB9600"><enum>(B)</enum><header>Rules for
enrollment</header><text>Nothing in this paragraph shall preclude an IMA from
establishing rules of enrollment and reenrollment of members. Such rules shall
be applied consistently to all members within the IMA and shall not be based in
any manner on health status-related factors.</text>
</subparagraph></paragraph><paragraph id="H9D68C536B9494C3AB5A057BB4B79573D"><enum>(2)</enum><header>Health insurance
issuers</header><text>The contract between an IMA and a health insurance issuer
shall provide, with respect to a member enrolled with health benefits coverage
offered by the issuer through the IMA, for the payment of the premiums
collected by the issuer.</text>
</paragraph></subsection></section><section id="HA7739C8D8DA94E13A299FAE8CA466B68"><enum>3102.</enum><header>Application of
certain laws and requirements</header><text display-inline="no-display-inline">State laws insofar as they relate to any of
the following are superseded and shall not apply to health benefits coverage
made available through an IMA:</text>
<paragraph id="H1B03535CFB8E4A7DB186BB2F964E4400"><enum>(1)</enum><text>Benefit
requirements for health benefits coverage offered through an IMA, 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.</text>
</paragraph><paragraph id="HA4CC2FAF29684C6BB17146247C3309A6"><enum>(2)</enum><text>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 an IMA, if the IMA meets the requirements of
this title.</text>
</paragraph><continuation-text continuation-text-level="section">Any State
law or regulation relating to the composition or organization of an IMA is
preempted to the extent the law or regulation is inconsistent with the
provisions of this title.</continuation-text></section><section id="HA509953B70024C75A7EC97AF53019E34"><enum>3103.</enum><header>Administration</header>
<subsection id="H1C2BF3E22B1541D7AB00B7E0FB00B418"><enum>(a)</enum><header>In
General</header><text>The Secretary shall administer this title and is
authorized to issue such regulations as may be required to carry out this
title. Such regulations shall be subject to Congressional review under the
provisions of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/5/8">chapter 8</external-xref> of title 5, United States Code. The Secretary shall
incorporate the process of <quote>deemed file and use</quote> with respect to
the information filed under section 3001(a)(5)(A) and shall determine whether
information filed by an IMA demonstrates compliance with the applicable
requirements of this title. The Secretary shall exercise authority under this
title in a manner that fosters and promotes the development of IMAs in order to
improve access to health care coverage and services.</text>
</subsection><subsection id="HC7F012D5EB9D406795A4D8ADC7A44EFA"><enum>(b)</enum><header>Periodic
reports</header><text>The Secretary 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 Secretary to carry out this title, on the effectiveness of
this title in promoting coverage of uninsured individuals. The Secretary may
provide for the production of such reports through one or more contracts with
appropriate private entities.</text>
</subsection></section><section id="H30C71182C6964114BFC432390658C367"><enum>3104.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this title:</text>
<paragraph id="H2219E7F0DAA44AF69152AD3182553E06"><enum>(1)</enum><header>Association</header><text>The
term <term>association</term> means, with respect to health insurance coverage
offered in a State, an association which—</text>
<subparagraph id="H9271F305432844758F4D3F1B5FA1C6DD"><enum>(A)</enum><text>has been actively
in existence for at least 5 years;</text>
</subparagraph><subparagraph id="H4AAFBBA075DC4780A110C4C0D93DA396"><enum>(B)</enum><text>has been formed
and maintained in good faith for purposes other than obtaining
insurance;</text>
</subparagraph><subparagraph id="HD6744F9B5E0F41E2AF1BE79ECBCF37FF"><enum>(C)</enum><text>does not condition
membership in the association on any health status-related factor relating to
an individual (including an employee of an employer or a dependent of an
employee); and</text>
</subparagraph><subparagraph id="HAD42ACA2890341D3835F5FA0569D52F8"><enum>(D)</enum><text>does not make
health insurance coverage offered through the association available other than
in connection with a member of the association.</text>
</subparagraph></paragraph><paragraph id="H358EEC939F8B4CA98F3BA78DAF870064"><enum>(2)</enum><header>Dependent</header><text>The
term <term>dependent</term>, as applied to health insurance coverage offered by
a health insurance issuer licensed (or otherwise regulated) in a State, shall
have the meaning applied to such term with respect to such coverage under the
laws of the State relating to such coverage and such an issuer. Such term may
include the spouse and children of the individual involved.</text>
</paragraph><paragraph id="H4336D195DA704F8299F4D0E6537B6849"><enum>(3)</enum><header>Health benefits
coverage</header><text>The term <term>health benefits coverage</term> has the
meaning given the term health insurance coverage in section 2791(b)(1).</text>
</paragraph><paragraph id="HBC4CBFB6A19542B7B6E55C5102E9F49"><enum>(4)</enum><header>Health insurance
issuer</header><text>The term <term>health insurance issuer</term> has the
meaning given such term in section 2791(b)(2).</text>
</paragraph><paragraph id="H2516A4AFC27F4E49A160E305D86E970"><enum>(5)</enum><header>Health
status-related factor</header><text>The term <term>health status-related
factor</term> has the meaning given such term in section 2791(d)(9).</text>
</paragraph><paragraph id="H98E5519E9A09407DBBE46E6101706800"><enum>(6)</enum><header>IMA; individual
membership association</header><text>The terms <term>IMA</term> and
<term>individual membership association</term> are defined in section
3101(a).</text>
</paragraph><paragraph id="HB900D52C7928486781157EDDFC9F5900"><enum>(7)</enum><header>Member</header><text>The
term <term>member</term> means, with respect to an IMA, an individual who is a
member of the association to which the IMA is offering
coverage.</text>
</paragraph></section>.
<enum>III</enum><header>Federal Matching
Funding for State Insurance Expenditures</header>
<section id="H98C972E59C27459898AB2B04CBB02113"><enum>301.</enum><header>Federal
matching funding for State insurance expenditures</header>
<subsection id="HCD801D67A3FD447DB1468F65C95CBE8F"><enum>(a)</enum><header>In
General</header><text>Subject to the succeeding provisions of this section,
each State shall receive from the Secretary of Health and Human Services an
amount equal to 50 percent of the funds expended by the State in providing for
the use, in connection with providing health benefits coverage, of a high-risk
pool, a reinsurance pool, or other risk-adjustment mechanism used for the
purpose of subsidizing the purchase of private health insurance.</text>
</subsection><subsection id="HC5F24C748FE645049469E3FB0630ECBD"><enum>(b)</enum><header>Funding
limitation</header><text>A State shall not receive under this section for a
fiscal year more than a total of 50 cents multiplied by the average number of
residents (as estimated by the Secretary) in the State in the fiscal
year.</text>
</subsection><subsection id="HC791AD445CE64A2C8C999B6F2667C924"><enum>(c)</enum><header>Administration</header><text>The
Secretary of Health and Human Services shall provide for the administration of
this section and may establish such terms and conditions, including the
requirement of an application, as may be appropriate to carry out this
section.</text>
</subsection><subsection id="H40B4505F66B646A3A7675136534B6B33"><enum>(d)</enum><header>Construction</header><text>Nothing
in this section shall be construed as requiring a State to operate a
reinsurance pool (or other risk-adjustment mechanism) under this section or as
preventing a State from operating such a pool or mechanism through one or more
private entities.</text>
</subsection><subsection id="H194B180FCC594BCB95C0092CB8FF5400"><enum>(e)</enum><header>High-risk
pool</header><text>For purposes of this section, the term <term>high-risk
pool</term> means any qualified high risk pool (as defined in section
2744(c)(2) of the <act-name parsable-cite="PHSA">Public Health Service
Act</act-name>).</text>
</subsection><subsection id="HFD801772F74544E7B57598003B4FF76E"><enum>(f)</enum><header>Reinsurance pool
or other risk-adjustment mechanism defined</header><text>For purposes of this
section, the term <term>reinsurance pool or other risk-adjustment
mechanism</term> means any State-based risk spreading mechanism to subsidize
the purchase of private health insurance for the high-risk population.</text>
</subsection><subsection id="HE489BC830B81449E9D4FD1E6850941AB"><enum>(g)</enum><header>High-risk
population</header><text>For purposes of this section, the term <term>high-risk
population</term> means—</text>
<paragraph id="HE8EF984D18D8414B859CFD2CAABEA769"><enum>(1)</enum><text>individuals who,
by reason of the existence or history of a medical condition, are able to
acquire health coverage only at rates which are at least 150 percent of the
standard risk rates for such coverage, and</text>
</paragraph><paragraph id="H4F0243738EF74781B0B83E74ABAA6"><enum>(2)</enum><text>individuals who are
provided health coverage by a high-risk pool.</text>
</paragraph></subsection><subsection id="HF34FE55846A54C48BCC8FFAF4B7CACE"><enum>(h)</enum><header>State
defined</header><text>For purposes of this section, the term <term>State</term>
includes the District of Columbia, Puerto Rico, the Virgin Islands, Guam,
American Samoa, and the Northern Mariana Islands.</text>
</subsection></section><enum>IV</enum><header>Affordable Health
Coverage for Employees of Small Businesses</header>
<section id="H281C26AA345E41E0ABF116BDF7EC0C3"><enum>401.</enum><header>Short title of
title</header><text display-inline="no-display-inline">This title may be cited
as the <quote><short-title>Small Business Access and
Choice for Entrepreneurs Act of 2007</short-title></quote>.</text>
</section><section id="H68CD01DB75B74D7F95B2C935B4707700"><enum>402.</enum><header>Rules</header>
<subsection id="H21F5DAC9BED74FEB8B927E1EBF1FB688"><enum>(a)</enum><header>In
General</header><text>Subtitle B of title I of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> is amended by adding after part 7 the following new
part:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="HD1BD9D3ED38049BEAF09CE56AAFF872C">
<part id="H660599A41CC147EB81A5FF00F3D24D00"><header>Rules governing
association health plans</header>
<section id="H22ABB109C9CA404E90CD7D80000200CC"><enum>801.</enum><header>Association
health plans</header>
<subsection id="H625A4FDF4BAE4AAE93E0080D501CA32"><enum>(a)</enum><header>In
General</header><text>For purposes of this part, the term <term>association
health plan</term> means a group health plan—</text>
<paragraph id="HACB475DE6C584232A7D691EDA57831F1"><enum>(1)</enum><text>whose sponsor is
(or is deemed under this part to be) described in subsection (b); and</text>
</paragraph><paragraph id="H68C07CEA985941B4AB00A5873FDA0756"><enum>(2)</enum><text>under which at
least one option of health insurance coverage offered by a health insurance
issuer (which may include, among other options, managed care options, point of
service options, and preferred provider options) is provided to participants
and beneficiaries, unless, for any plan year, such coverage remains unavailable
to the plan despite good faith efforts exercised by the plan to secure such
coverage.</text>
</paragraph></subsection><subsection id="HD2B00A75A2B24D889E005F31F54C2B79"><enum>(b)</enum><header>Sponsorship</header><text>The
sponsor of a group health plan is described in this subsection if such
sponsor—</text>
<paragraph id="H82829456BE6C44C685D891742FCAEA77"><enum>(1)</enum><text>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 <external-xref legal-doc="usc" parsable-cite="usc/26/1381">section 1381</external-xref> of the Internal Revenue Code of 1986)), for substantial
purposes other than that of obtaining or providing medical care;</text>
</paragraph><paragraph id="HAD7D648D01A047D386BF7E3E3CD4F3D9"><enum>(2)</enum><text>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</text>
</paragraph><paragraph id="H0DAEB679D9A342C0BA45950015654021"><enum>(3)</enum><text>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.</text>
</paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection></section><section id="H2CDE89F401A8432000C083E3FA23E7A"><enum>802.</enum><header>Certification of
association health plans</header>
<subsection id="H2CB89FAA0A324E49B21D89EAEB11AA3E"><enum>(a)</enum><header>In
General</header><text>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.</text>
</subsection><subsection id="H925C45232129418B82789600B8CD46EE"><enum>(b)</enum><header>Standards</header><text>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—</text>
<paragraph id="H014C0B9A06AC4E9F8C117557007DDB84"><enum>(1)</enum><text>such
certification—</text>
<subparagraph id="H93B653A070E44FD98505B6E946C7177"><enum>(A)</enum><text>is administratively
feasible;</text>
</subparagraph><subparagraph id="H9D5FC8F30DAE4707B1753CF700FE9E37"><enum>(B)</enum><text>is not adverse to
the interests of the individuals covered under the plan; and</text>
</subparagraph><subparagraph id="H24F8276772E0409FA7D0D1E0E0A49114"><enum>(C)</enum><text>is protective of
the rights and benefits of the individuals covered under the plan; and</text>
</subparagraph></paragraph><paragraph id="HB54988450D27415EAC2F4495317E339D"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection id="H3AA7E5F4ACA84910A864D6FF1C8B4E28"><enum>(c)</enum><header>Requirements
applicable to certified plans</header><text>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).</text>
</subsection><subsection id="H02C42A7447234E77895F71D29134088F"><enum>(d)</enum><header>Requirements for
continued certification</header><text>The applicable authority may provide by
regulation, through negotiated rulemaking, for continued certification of
association health plans under this part.</text>
</subsection><subsection id="H4B6D7D08CFE0451FB893E506DD398E"><enum>(e)</enum><header>Class
certification for fully insured plans</header><text>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).</text>
</subsection><subsection id="H298FDD05ED374FD6A68D07BEEA7005B3"><enum>(f)</enum><header>Certification of
self-insured association health plans</header><text>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:</text>
<paragraph id="HABCF2C8F1AB74BFCADC8CC6184C4B6C9"><enum>(1)</enum><text>a plan which
offered such coverage on the date of the enactment of the
<short-title>Small Business Access and Choice for
Entrepreneurs Act of 2007</short-title>;</text>
</paragraph><paragraph id="H5C6D8F142FE54BB5A01BE477F7B52131"><enum>(2)</enum><text>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</text>
</paragraph><paragraph id="H67A13F708C394A1A824B4B45E469A7F4"><enum>(3)</enum><text>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.</text>
</paragraph></subsection></section><section id="H1ACDC237325F49EA86AA96D0001BBEC"><enum>803.</enum><header>Requirements
relating to sponsors and boards of trustees</header>
<subsection id="H85BEB0B3E58647599EF8F263076C85D8"><enum>(a)</enum><header>Sponsor</header><text>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.</text>
</subsection><subsection id="HEB5314DF6E734FE5873F698187A9C904"><enum>(b)</enum><header>Board of
trustees</header><text>The requirements of this subsection are met with respect
to an association health plan if the following requirements are met:</text>
<paragraph id="HFB48DA6B85EA4A8886B84846EF11D5F"><enum>(1)</enum><header>Fiscal
control</header><text>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.</text>
</paragraph><paragraph id="HAF59E7611A3E4B168C64C807BFF90053"><enum>(2)</enum><header>Rules of
operation and financial controls</header><text>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.</text>
</paragraph><paragraph id="H1E5293CDED8C41D1A905FF8965D196CB"><enum>(3)</enum><header>Rules governing
relationship to participating employers and to contractors</header>
<subparagraph id="HD4E19F125BB74ACAB2C7ED947745186F"><enum>(A)</enum><header>In
General</header><text>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.</text>
</subparagraph><subparagraph id="H60E719574F5146F78F545875CA008B90"><enum>(B)</enum><header>Limitation</header>
<clause id="H10368B1D92874AB39FC5A1AA85667722"><enum>(i)</enum><header>General
rule</header><text>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.</text>
</clause><clause id="HB0573FC6189440ADABAAF6BAB0B17CCD"><enum>(ii)</enum><header>Limited
exception for providers of services solely on behalf of the
sponsor</header><text>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.</text>
</clause><clause id="H57AF349BEF8F4C149D3B19006443DA4B"><enum>(iii)</enum><header>Treatment of
providers of medical care</header><text>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.</text>
</clause></subparagraph><subparagraph id="HD8A2A145FB104AB29B1091AAB52D8301"><enum>(C)</enum><header>Certain plans
excluded</header><text>Subparagraph (A) shall not apply to an association
health plan which is in existence on the date of the enactment of the
<short-title>Small Business Access and Choice for
Entrepreneurs Act of 2007</short-title>.</text>
</subparagraph><subparagraph id="HB3113136BABD4968A469917E87F58E11"><enum>(D)</enum><header>Sole
authority</header><text>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.</text>
</subparagraph></paragraph></subsection><subsection id="HCF40F3F000E24B049BEE904C0086F792"><enum>(c)</enum><header>Treatment of
franchise networks</header><text>In the case of a group health plan which is
established and maintained by a franchiser for a franchise network consisting
of its franchisees—</text>
<paragraph id="H139990A149EB41D8BADFED55DB082CBC"><enum>(1)</enum><text>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</text>
</paragraph><paragraph id="HAF245F0A45AA4F91831DDADE75B142F5"><enum>(2)</enum><text>the requirements
of section 804(a)(1) shall be deemed met.</text>
</paragraph><continuation-text continuation-text-level="subsection">The
Secretary may by regulation, through negotiated rulemaking, define for purposes
of this subsection the terms <term>franchiser</term>, <term>franchise
network</term>, and <term>franchisee</term>.</continuation-text></subsection><subsection id="HB5F20593FD73445F89D92DF44A9F5F8"><enum>(d)</enum><header>Certain
collectively bargained plans</header>
<paragraph id="H3808A9716F5F43E39B5C2EED49D15E22"><enum>(1)</enum><header>In
General</header><text>In the case of a group health plan described in paragraph
(2)—</text>
<subparagraph id="HA76F8E25CE354047AB99FAF592A70412"><enum>(A)</enum><text>the requirements
of subsection (a) and section 801(a)(1) shall be deemed met;</text>
</subparagraph><subparagraph id="H6A0BB2F32FB14EC8B63C383B041CAF81"><enum>(B)</enum><text>the joint board of
trustees shall be deemed a board of trustees with respect to which the
requirements of subsection (b) are met; and</text>
</subparagraph><subparagraph id="HC100C08824764B0487074BD746EEF39B"><enum>(C)</enum><text>the requirements
of section 804 shall be deemed met.</text>
</subparagraph></paragraph><paragraph id="HCB2989286D9D4D2F8E64629255F5BC"><enum>(2)</enum><header>Requirements</header><text>A
group health plan is described in this paragraph if—</text>
<subparagraph id="H5E5D2A3E7F0246EEB99BE108DA8CEF04"><enum>(A)</enum><text>the plan is a
multiemployer plan; or</text>
</subparagraph><subparagraph id="H2B0F24E36DA542F89CAB2C3508007EAA"><enum>(B)</enum><text>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).</text>
</subparagraph></paragraph></subsection></section><section id="H405257DC949B44719F8EFFEC964625D"><enum>804.</enum><header>Participation
and coverage requirements</header>
<subsection id="H0F0D23FD90C34148B6CA5DDBE8653E17"><enum>(a)</enum><header>Covered
employers and individuals</header><text>The requirements of this subsection are
met with respect to an association health plan if, under the terms of the
plan—</text>
<paragraph id="H67BEB9721D6D4998BB568FCCE5EA0070"><enum>(1)</enum><text>each participating
employer must be—</text>
<subparagraph id="H99815201DD834CF29FC0DC2CA3E0A26B"><enum>(A)</enum><text>a member of the
sponsor;</text>
</subparagraph><subparagraph id="H62B6E9D877034E25B8F3F812A54BCAB8"><enum>(B)</enum><text>the sponsor;
or</text>
</subparagraph><subparagraph id="HE2D393ADCAC04526BBAC004730004EC7"><enum>(C)</enum><text>an affiliated
member of the sponsor with respect to which the requirements of subsection (b)
are met;</text>
</subparagraph><continuation-text continuation-text-level="paragraph">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</continuation-text></paragraph><paragraph id="H8286160E544740B8A1FA3D34C4259ED7"><enum>(2)</enum><text>all individuals
commencing coverage under the plan after certification under this part must
be—</text>
<subparagraph id="HB738F38D3AEE40ECB2E491AC30A5643"><enum>(A)</enum><text>active or retired
owners (including self-employed individuals), officers, directors, or employees
of, or partners in, participating employers; or</text>
</subparagraph><subparagraph id="HFC4AB536BBAF411A97645CF180EA0495"><enum>(B)</enum><text>the beneficiaries
of individuals described in subparagraph (A).</text>
</subparagraph></paragraph></subsection><subsection id="HCFC57C34489341C694335EBAF091488D"><enum>(b)</enum><header>Coverage of
previously uninsured employees</header><text>In the case of an association
health plan in existence on the date of the enactment of the
<short-title>Small Business Access and Choice for
Entrepreneurs Act of 2007</short-title>, an affiliated member of the sponsor of
the plan may be offered coverage under the plan as a participating employer
only if—</text>
<paragraph id="H25C5F1D22FA5404E9900CDDBD11087C3"><enum>(1)</enum><text>the affiliated
member was an affiliated member on the date of certification under this part;
or</text>
</paragraph><paragraph id="H40F1696067464DE6ACFA288E5D1CDBE8"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection id="HC17565E5EF0A403998ACFD04C954ED33"><enum>(c)</enum><header>Individual
market unaffected</header><text>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.</text>
</subsection><subsection id="HA6E70604BC1342D0B7715637A48CC887"><enum>(d)</enum><header>Prohibition of
discrimination against employers and employees eligible To
participate</header><text>The requirements of this subsection are met with
respect to an association health plan if—</text>
<paragraph id="H996070E797F44B1A81F3A95C094914C7"><enum>(1)</enum><text>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
<act-name parsable-cite="PHSA">Public Health Service Act</act-name> are not
met;</text>
</paragraph><paragraph id="HF722070187D54368A2B600516846FDF8"><enum>(2)</enum><text>upon request, any
employer eligible to participate is furnished information regarding all
coverage options available under the plan; and</text>
</paragraph><paragraph id="H2D910A251652448300E2F9A0EF125E1D"><enum>(3)</enum><text>the applicable
requirements of sections 701, 702, and 703 are met with respect to the
plan.</text>
</paragraph></subsection></section><section id="H3CB25CAEC76F4CC18394AEECF1D1B6DD"><enum>805.</enum><header>Other
requirements relating to plan documents, contribution rates, and benefit
options</header>
<subsection id="H2BE60E6DDA764DA88BDDCF79CD82B2FF"><enum>(a)</enum><header>In
General</header><text>The requirements of this section are met with respect to
an association health plan if the following requirements are met:</text>
<paragraph id="H96BB7AAA3E494A04BB2D23AA7FF378E0"><enum>(1)</enum><header>Contents of
governing instruments</header><text>The instruments governing the plan include
a written instrument, meeting the requirements of an instrument required under
section 402(a)(1), which—</text>
<subparagraph id="HC9C814C67D64434487DAA0077ED1E3C9"><enum>(A)</enum><text>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));</text>
</subparagraph><subparagraph id="HB26B8B2505C04D6DBE43296141F2A653"><enum>(B)</enum><text>provides that the
sponsor of the plan is to serve as plan sponsor (referred to in section
3(16)(B)); and</text>
</subparagraph><subparagraph id="H125885A3BFB745888B28A3F99E1E73B3"><enum>(C)</enum><text>incorporates the
requirements of section 806.</text>
</subparagraph></paragraph><paragraph id="HDBBA03031367449C90A8ADB34B373E19"><enum>(2)</enum><header>Contribution
rates must be nondiscriminatory</header>
<subparagraph id="H5B13F4FB4BA042B7A36DD079743D2986"><enum>(A)</enum><text>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.</text>
</subparagraph><subparagraph id="HAB5543C601784F3691F05C64A04BE6B9"><enum>(B)</enum><text>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—</text>
<clause id="H736D94EF6D74450389C17CA6D7094672"><enum>(i)</enum><text>setting
contribution rates based on the claims experience of the plan; or</text>
</clause><clause id="H27A2C28A7DBA4E98B5A82C45D908118D"><enum>(ii)</enum><text>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 <act-name parsable-cite="PHSA">Public Health
Service Act</act-name>),</text>
</clause><continuation-text continuation-text-level="subparagraph">subject
to the requirements of section 702(b) relating to contribution rates.</continuation-text></subparagraph></paragraph><paragraph id="HF0CE610163A2464197617D77E94DAC00"><enum>(3)</enum><header>Floor for number
of covered individuals with respect to certain plans</header><text>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.</text>
</paragraph><paragraph id="H10F9BEFD16064C5DB1622F6860DBD802"><enum>(4)</enum><header>Marketing
requirements</header>
<subparagraph id="H845D30BDCE084FDBAFB423DC4A3F6E"><enum>(A)</enum><header>In
General</header><text>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.</text>
</subparagraph><subparagraph id="H2B2A7A123F3B45349DB4CA0725913BEB"><enum>(B)</enum><header>State-licensed
insurance agents</header><text>For purposes of subparagraph (A), the term
<term>State-licensed insurance agents</term> 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.</text>
</subparagraph></paragraph><paragraph id="HDF98BE90AA344D9BAFECBA861791B98"><enum>(5)</enum><header>Regulatory
requirements</header><text>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.</text>
</paragraph></subsection><subsection id="HEAA3C1829E074084B931797FDE47E1A0"><enum>(b)</enum><header>Health benefit
options under an association health plan</header>
<paragraph id="HEE28A589236B4E6EBF42C6BCD789D31"><enum>(1)</enum><header>Examples of types
of coverage</header><text>The health benefits coverage made available through
an association health plan may include, but is not limited to, any of the
following if it meets the other applicable requirements of this title:</text>
<subparagraph id="HA74E2EB420B943AD9EB2798F00D5C2B"><enum>(A)</enum><text>Coverage through a
health maintenance organization.</text>
</subparagraph><subparagraph id="HD5F5BFB855A94259815210D3483825CC"><enum>(B)</enum><text>Coverage in
connection with a preferred provider organization.</text>
</subparagraph><subparagraph id="H43C83803485244E99D8F080021CB0005"><enum>(C)</enum><text>Coverage in
connection with a licensed provider-sponsored organization.</text>
</subparagraph><subparagraph id="H4A4C62C6A7A54FF281CE49B4418C60DD"><enum>(D)</enum><text>Indemnity coverage
through an insurance company.</text>
</subparagraph><subparagraph id="H0D35A7A0CCDD4C23AD52C1EE7225A674"><enum>(E)</enum><text>Coverage offered
in connection with a contribution into a medical savings account or flexible
spending account.</text>
</subparagraph><subparagraph id="HF419B28BF09D4A7B85A578CF3738A0D2"><enum>(F)</enum><text>Coverage that
includes a point-of-service option.</text>
</subparagraph><subparagraph id="H279F0710BF1040DDA01B029323CFB5F8"><enum>(G)</enum><text>Any combination of
such types of coverage.</text>
</subparagraph></paragraph><paragraph id="HAC5672A280A44340AE15B0F2F74FDEE9"><enum>(2)</enum><header>Health insurance
coverage options</header>
<subparagraph id="H3B8563E2B1BD4D08B874CAD6F2AA6366"><enum>(A)</enum><header>In
General</header><text>An association health plan shall include a minimum of 4
health insurance coverage options. At least 1 option shall be a non network
option. At least 2 options shall meet all applicable State benefit
mandates.</text>
</subparagraph><subparagraph id="H3DECAB7CE1FA42FDA3FD81E56A26FB9"><enum>(B)</enum><header>Model benefits
package</header><text>The Secretary in consultation with the National
Association of Insurance Commissioners shall develop a model benefits package
for health insurance coverage not later than one year after the date of the
enactment of the Consensus Health Care Access and Choice Act of 2003.</text>
</subparagraph><subparagraph id="H29A194047C794675BE82EDCE7077832"><enum>(C)</enum><header>Exception to
General rule</header><text>An association health plan may offer 2 options that
meet the requirements of the model benefits package in lieu of the State
benefit mandate offerings required under subparagraph (A).</text>
</subparagraph></paragraph><paragraph id="H4748109A0FF5492482B1EC550679D65D"><enum>(3)</enum><header>Permitting
association health plans to adjust distributions among issuers to reflect
relative risk of enrollees</header><text>Nothing in this section shall be
construed as precluding an association health plan from providing for
adjustments in amounts distributed among the health insurance issuers offering
health benefits coverage through the association health plan based on factors
such as the relative health care risk of members enrolled under the coverage
offered by the different issuers.</text>
</paragraph><paragraph id="H5D783F0A51474C4A93CDA9B6843F1038"><enum>(4)</enum><header>Construction</header><text>Except
as provided in subparagraph (2), 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.</text>
</paragraph></subsection></section><section id="H1AE68B1E198A45BFB4FE935444FF71CF"><enum>806.</enum><header>Maintenance of
reserves and provisions for solvency for plans providing health benefits in
addition to health insurance coverage</header>
<subsection id="HDED9073C84FD4F3BAFAF1FF9A60143CE"><enum>(a)</enum><header>In
General</header><text>The requirements of this section are met with respect to
an association health plan if—</text>
<paragraph id="H9AD1980DA05F4B1299295E3E6DD1F4E"><enum>(1)</enum><text>the benefits under
the plan consist solely of health insurance coverage; or</text>
</paragraph><paragraph id="HABED2C827B1F4A51A6D0F29347F9635B"><enum>(2)</enum><text>if the plan
provides any additional benefit options which do not consist of health
insurance coverage, the plan—</text>
<subparagraph id="H1ACED9FA86B54C50B5028B2D26C2BA51"><enum>(A)</enum><text>establishes and
maintains reserves with respect to such additional benefit options, in amounts
recommended by the qualified actuary, consisting of—</text>
<clause id="H8900BB3898C94A6BBAE46785CC5AE05"><enum>(i)</enum><text>a
reserve sufficient for unearned contributions;</text>
</clause><clause id="H8D85C1753CD445D6A4F252F8A68672AC"><enum>(ii)</enum><text>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;</text>
</clause><clause id="H6783BF3475F340FCAF3EC41ECA6D2561"><enum>(iii)</enum><text>a reserve
sufficient for any other obligations of the plan; and</text>
</clause><clause id="H000F2AE370444CC798FFB65E075EB16F"><enum>(iv)</enum><text>a
reserve sufficient for a margin of error and other fluctuations, taking into
account the specific circumstances of the plan; and</text>
</clause></subparagraph><subparagraph id="H8EE7DB83B3534D399911B1EAEF6A92"><enum>(B)</enum><text>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:</text>
<clause id="HBACE4293BCC64E74828E00D2542516F0"><enum>(i)</enum><text>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).</text>
</clause><clause id="HD570518964B740EDA3FD19F6798BFEA"><enum>(ii)</enum><text>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).</text>
</clause><clause id="H8705EE2010474ED290A82849DDF64DFD"><enum>(iii)</enum><text>The plan shall
secure indemnification insurance for any claims which the plan is unable to
satisfy by reason of a plan termination.</text>
</clause></subparagraph></paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection><subsection id="HFFDB76DB1B35411B9DA173B9473B0881"><enum>(b)</enum><header>Minimum surplus
in addition to claims reserves</header><text>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—</text>
<paragraph id="H6725256A4EC2487EA102A2EF8835EDAD"><enum>(1)</enum><text>$500,000;
or</text>
</paragraph><paragraph id="HEF0C39529E5C472BBF2E57553B17F9A0"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection id="HC80D0DB7E12C44B196DC3D001D1D0677"><enum>(c)</enum><header>Additional
requirements</header><text>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.</text>
</subsection><subsection id="H002A19C947A943C7AECF00156D735850"><enum>(d)</enum><header>Adjustments for
excess/Stop loss insurance</header><text>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.</text>
</subsection><subsection id="H3E7DDB8CE4EB429286913EED67B77698"><enum>(e)</enum><header>Alternative
means of compliance</header><text>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.</text>
</subsection><subsection id="HAD162876BB8C413EB2DA90E8FCD5CDEF"><enum>(f)</enum><header>Measures To
ensure continued payment of benefits by certain plans in distress</header>
<paragraph id="H63716CA363AE44EC8F11CEBD39D4A414"><enum>(1)</enum><header>Payments by
certain plans to Association Health Plan Fund</header>
<subparagraph id="HB0964F8BAC444D06008EEE42B3EC4679"><enum>(A)</enum><header>In
General</header><text>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.</text>
</subparagraph><subparagraph id="H205CE29DCB6B4497A0D8423D00BE6EEE"><enum>(B)</enum><header>Penalties for
failure to make payments</header><text>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.</text>
</subparagraph><subparagraph id="H462F960157654EB5A0EE2DF4E477854"><enum>(C)</enum><header>Continued duty of
the Secretary</header><text>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.</text>
</subparagraph></paragraph><paragraph id="H1739E00BFE1F41768EA089B033F426C3"><enum>(2)</enum><header>Payments by
Secretary to continue excess/stop loss insurance coverage and indemnification
insurance coverage for certain plans</header><text>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.</text>
</paragraph><paragraph id="H8BCC5D6A0A4B430200AD6EC3324135CF"><enum>(3)</enum><header>Association
Health Plan Fund</header>
<subparagraph id="H3FA79CE3E88648FAA9715C04F550D120"><enum>(A)</enum><header>In
General</header><text>There is established on the books of the Treasury a fund
to be known as the <quote>Association Health Plan Fund</quote>. 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).</text>
</subparagraph><subparagraph id="H4FA1848CF05345279390E77C482DC839"><enum>(B)</enum><header>Investment</header><text>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.</text>
</subparagraph></paragraph></subsection><subsection id="H46003CB2E9D84FFDAE3497E044007D6B"><enum>(g)</enum><header>Excess/Stop loss
insurance</header><text>For purposes of this section—</text>
<paragraph id="H6AA0671CD884461FB81C69C8FDA0028"><enum>(1)</enum><header>Aggregate
excess/stop loss insurance</header><text>The term <term>aggregate excess/stop
loss insurance</term> means, in connection with an association health plan, a
contract—</text>
<subparagraph id="H121849C4DA84423D8410FD00E700B5EC"><enum>(A)</enum><text>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;</text>
</subparagraph><subparagraph id="H332CEDF1C2904AF393C1588E97494E7D"><enum>(B)</enum><text>which is
guaranteed renewable; and</text>
</subparagraph><subparagraph id="HACB9C0C0DE614422AA01D8A7D4CE81C7"><enum>(C)</enum><text>which allows for
payment of premiums by any third party on behalf of the insured plan.</text>
</subparagraph></paragraph><paragraph id="HE989ED60A96B4E5991D9AA4638291CD5"><enum>(2)</enum><header>Specific
excess/stop loss insurance</header><text>The term <term>specific excess/stop
loss insurance</term> means, in connection with an association health plan, a
contract—</text>
<subparagraph id="H56D82B2CC8A14476B663AEF8F5890032"><enum>(A)</enum><text>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;</text>
</subparagraph><subparagraph id="HBDA2C83E26244DC5BACB29E0EA67D791"><enum>(B)</enum><text>which is
guaranteed renewable; and</text>
</subparagraph><subparagraph id="HDA849EF33D1F460C85CBA79162DFFB47"><enum>(C)</enum><text>which allows for
payment of premiums by any third party on behalf of the insured plan.</text>
</subparagraph></paragraph></subsection><subsection id="H050E007CA0754D629396820309CB3712"><enum>(h)</enum><header>Indemnification
insurance</header><text>For purposes of this section, the term
<term>indemnification insurance</term> means, in connection with an association
health plan, a contract—</text>
<paragraph id="H7F3E7B8BC8BA4BC0BC6CA95C17FF38D9"><enum>(1)</enum><text>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);</text>
</paragraph><paragraph id="H1B40C07ED67E477F80ED8958F9BC00E9"><enum>(2)</enum><text>which is
guaranteed renewable and noncancellable for any reason (except as the
applicable authority may prescribe by regulation through negotiated
rulemaking); and</text>
</paragraph><paragraph id="HCE7893329E144DEEB37E820569EE976E"><enum>(3)</enum><text>which allows for
payment of premiums by any third party on behalf of the insured plan.</text>
</paragraph></subsection><subsection id="H926577FB476A4DA0887CD7659B30BF03"><enum>(i)</enum><header>Reserves</header><text>For
purposes of this section, the term <term>reserves</term> 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.</text>
</subsection><subsection id="H0D7F3EFCB634414785CF8EDAD617A064"><enum>(j)</enum><header>Solvency
Standards Working Group</header>
<paragraph id="H8E5E3C40E94045CD87DCDEA207ED97D9"><enum>(1)</enum><header>In
General</header><text>Within 90 days after the date of the enactment of the
<short-title>Small Business Access and Choice for
Entrepreneurs Act of 2007</short-title>, 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.</text>
</paragraph><paragraph id="H6671648C733B40B98C5D855945D45D57"><enum>(2)</enum><header>Membership</header><text>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:</text>
<subparagraph id="HA28F465DBD3A4862AD9B2C917FB58266"><enum>(A)</enum><text>a representative
of the National Association of Insurance Commissioners;</text>
</subparagraph><subparagraph id="H3F57023B50B04920AE4499D2243B8437"><enum>(B)</enum><text>a representative
of the American Academy of Actuaries;</text>
</subparagraph><subparagraph id="H275C5D143A184D3BBD9B5FD799A3CD3"><enum>(C)</enum><text>a representative of
the State governments, or their interests;</text>
</subparagraph><subparagraph id="H4FC4E6C7CA934A829B6B9BA51587F44E"><enum>(D)</enum><text>a representative
of existing self-insured arrangements, or their interests;</text>
</subparagraph><subparagraph id="H209B004B5EB34670A02E117438C33421"><enum>(E)</enum><text>a representative
of associations of the type referred to in section 801(b)(1), or their
interests; and</text>
</subparagraph><subparagraph id="H6901127CBE5F4584865B7CCFD5E2C67C"><enum>(F)</enum><text>a representative
of multiemployer plans that are group health plans, or their interests.</text>
</subparagraph></paragraph></subsection></section><section id="H5A8D1DD2E38D46E3869296B676C86529"><enum>807.</enum><header>Requirements
for application and related requirements</header>
<subsection id="H6C044B79CCE8455A976F52D910887381"><enum>(a)</enum><header>Filing
fee</header><text>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.</text>
</subsection><subsection id="HE39337ECBAC04CF8AFFDF1494F674F90"><enum>(b)</enum><header>Information To
be included in application for certification</header><text>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:</text>
<paragraph id="H6D5583E5E2D44BE8833FF709A6DE2B6F"><enum>(1)</enum><header>Identifying
information</header><text>The names and addresses of—</text>
<subparagraph id="HBCC78166D1FC45D1A880025C01948587"><enum>(A)</enum><text>the sponsor;
and</text>
</subparagraph><subparagraph id="HABDEC5CF5A9F4B84B6C829CEA66F6784"><enum>(B)</enum><text>the members of the
board of trustees of the plan.</text>
</subparagraph></paragraph><paragraph id="H7932E1DC869D4A4591403BB5ECE600E6"><enum>(2)</enum><header>States in which
plan intends to do business</header><text>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.</text>
</paragraph><paragraph id="HF2151F01FBC14750B3FB7E96DFBE7300"><enum>(3)</enum><header>Bonding
requirements</header><text>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.</text>
</paragraph><paragraph id="HB60B9A837FA547A3806002CCBD4200E1"><enum>(4)</enum><header>Plan
documents</header><text>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.</text>
</paragraph><paragraph id="HB6B0037B60B14D6CB22D3D6934D52DB0"><enum>(5)</enum><header>Agreements with
service providers</header><text>A copy of any agreements between the plan and
contract administrators and other service providers.</text>
</paragraph><paragraph id="H373E43C55450411698CE8B6000C663B4"><enum>(6)</enum><header>Funding
report</header><text>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:</text>
<subparagraph id="H41C1FE0C29E24426BDDA1493027D0445"><enum>(A)</enum><header>Reserves</header><text>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.</text>
</subparagraph><subparagraph id="H7C0264ECD1EC468ABCE000FFF9853CC5"><enum>(B)</enum><header>Adequacy of
contribution rates</header><text>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.</text>
</subparagraph><subparagraph id="H999E3E56276E405C98234DE7721FED7"><enum>(C)</enum><header>Current and
projected value of assets and liabilities</header><text>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.</text>
</subparagraph><subparagraph id="HF8DCCB3A09DB42A3A8148B357970DF99"><enum>(D)</enum><header>Costs of
coverage to be charged and other expenses</header><text>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.</text>
</subparagraph><subparagraph id="H24C0D006A53D4350AA5DC15700BC7054"><enum>(E)</enum><header>Other
information</header><text>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.</text>
</subparagraph></paragraph></subsection><subsection id="H7DE65C83D02F48B1A459E36165136902"><enum>(c)</enum><header>Filing notice of
certification with States</header><text>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.</text>
</subsection><subsection id="H34F66B8160554EA7BC50BC00FC52D5DE"><enum>(d)</enum><header>Notice of
material changes</header><text>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.</text>
</subsection><subsection id="H63BC6A4296C14373B711E082DFF21773"><enum>(e)</enum><header>Reporting
requirements for certain association health plans</header><text>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.</text>
</subsection><subsection id="HE40ADCFA42CC498D8C1D3388009300B7"><enum>(f)</enum><header>Engagement of
qualified actuary</header><text>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—</text>
<paragraph id="H883F6A152D1F4FA5BC0161ECEEC53208"><enum>(1)</enum><text>are in the
aggregate reasonably related to the experience of the plan and to reasonable
expectations; and</text>
</paragraph><paragraph id="H654B7DA35DDE477EB2C3524C3F000287"><enum>(2)</enum><text>represent such
actuary’s best estimate of anticipated experience under the plan.</text>
</paragraph><continuation-text continuation-text-level="subsection">The
opinion by the qualified actuary shall be made with respect to, and shall be
made a part of, the annual report.</continuation-text></subsection></section><section id="H7F1014FBEB3C4ABC96DF3003CFF4300"><enum>808.</enum><header>Notice
requirements for voluntary termination</header><text display-inline="no-display-inline">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—</text>
<paragraph id="H632112D2043547FF8DDC1515DEFB0861"><enum>(1)</enum><text>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;</text>
</paragraph><paragraph id="H5CDD9F70CBF249B389E9E2689BE3DA90"><enum>(2)</enum><text>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</text>
</paragraph><paragraph id="H9E06C96019264BF2BD32D6562C3CE68D"><enum>(3)</enum><text>submits such plan
in writing to the applicable authority.</text>
</paragraph><continuation-text continuation-text-level="section">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.</continuation-text></section><section id="HD77F7DEC517D4D7D9600867C1F23B222"><enum>809.</enum><header>Corrective
actions and mandatory termination</header>
<subsection id="H7912E9850D0D4916B33539A3E33000E9"><enum>(a)</enum><header>Actions To avoid
depletion of reserves</header><text>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.</text>
</subsection><subsection id="HB793DB550D7C47910030CD15A1064269"><enum>(b)</enum><header>Mandatory
termination</header><text>In any case in which—</text>
<paragraph id="H07EB5173799F4FCE8237DABF44805B56"><enum>(1)</enum><text>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</text>
</paragraph><paragraph id="HB0B846C25C604658B63135EA49F66898"><enum>(2)</enum><text>the applicable
authority determines that there is a reasonable expectation that the plan will
continue to fail to meet the requirements of section 806,</text>
</paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection></section><section id="H18632C4C3AFB4785A3AC461604900000"><enum>810.</enum><header>Trusteeship by
the Secretary of insolvent association health plans providing health benefits
in addition to health insurance coverage</header>
<subsection id="H4CF4C5D515C548FDAD6E6CBCEDC9A745"><enum>(a)</enum><header>Appointment of
Secretary as trustee for insolvent plans</header><text>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.</text>
</subsection><subsection id="H726BF0044E844AC38D454D08C50008C2"><enum>(b)</enum><header>Powers as
trustee</header><text>The Secretary, upon appointment as trustee under
subsection (a), shall have the power—</text>
<paragraph id="H25CC8F07A4864F65A4FE303D9BDE01F7"><enum>(1)</enum><text>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;</text>
</paragraph><paragraph id="HF3826CF27F45474A84265C3F5382F1C7"><enum>(2)</enum><text>to require the
transfer of all (or any part) of the assets and records of the plan to the
Secretary as trustee;</text>
</paragraph><paragraph id="H8CD4F408BBC64EFFA200E04504E0424"><enum>(3)</enum><text>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;</text>
</paragraph><paragraph id="HC9155F18E4004EA99985906689B38013"><enum>(4)</enum><text>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;</text>
</paragraph><paragraph id="HD39151890E3F4F43B81EE0A69B6F28A3"><enum>(5)</enum><text>to collect for the
plan any amounts due the plan and to recover reasonable expenses of the
trusteeship;</text>
</paragraph><paragraph id="H053E9EABB4D348379D74EC65C2494E63"><enum>(6)</enum><text>to commence,
prosecute, or defend on behalf of the plan any suit or proceeding involving the
plan;</text>
</paragraph><paragraph id="H5AA4E7BA17964F8F8600ACEC00117657"><enum>(7)</enum><text>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;</text>
</paragraph><paragraph id="H10F4ABE5E3D64D8288801FAF588700EC"><enum>(8)</enum><text>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;</text>
</paragraph><paragraph id="HB9C1F0F129904D7F813DF6CB646D509"><enum>(9)</enum><text>to provide for the
enrollment of plan participants and beneficiaries under appropriate coverage
options; and</text>
</paragraph><paragraph id="H2A29839627BE4269BCC1A6E26511AF4D"><enum>(10)</enum><text>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.</text>
</paragraph></subsection><subsection id="HCE512D939B0840029B391EABAE063826"><enum>(c)</enum><header>Notice of
appointment</header><text>As soon as practicable after the Secretary’s
appointment as trustee, the Secretary shall give notice of such appointment
to—</text>
<paragraph id="H9DAF41B8B21E4864B84ED62FAE56847"><enum>(1)</enum><text>the sponsor and
plan administrator;</text>
</paragraph><paragraph id="HCD16435AB9C0428CAC8070D84C80546F"><enum>(2)</enum><text>each
participant;</text>
</paragraph><paragraph id="HA8D6C3F1F9DC4E5E90A94300375FEC78"><enum>(3)</enum><text>each participating
employer; and</text>
</paragraph><paragraph id="HBBC0D240C1E142D890EEA80040A4705D"><enum>(4)</enum><text>if applicable,
each employee organization which, for purposes of collective bargaining,
represents plan participants.</text>
</paragraph></subsection><subsection id="H1401D0D2BAF043B4B2E8385870C08905"><enum>(d)</enum><header>Additional
duties</header><text>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 <external-xref legal-doc="usc" parsable-cite="usc/11/704">section 704</external-xref> of title 11, United States Code, and
shall have the duties of a fiduciary for purposes of this title.</text>
</subsection><subsection id="H9AF688CBEE6445EABDD5A15FD4731FA9"><enum>(e)</enum><header>Other
proceedings</header><text>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.</text>
</subsection><subsection id="HB502AB0FC4EF4BE2A90088DBEE1766DC"><enum>(f)</enum><header>Jurisdiction of
court</header>
<paragraph id="H356002AA8694453696C47769D9D3A59C"><enum>(1)</enum><header>In
General</header><text>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 <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/11/11">chapter 11</external-xref> 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.</text>
</paragraph><paragraph id="H38C0B0BA3BF048F9938C5BC9E43775EE"><enum>(2)</enum><header>Venue</header><text>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.</text>
</paragraph></subsection><subsection id="H6CA559E67BFA4C7683D626C529115CD0"><enum>(g)</enum><header>Personnel</header><text>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.</text>
</subsection></section><section id="H5CF51EDF2BE649CEA91974E01B30C1DE"><enum>811.</enum><header>State
assessment authority</header>
<subsection id="H6258C4F4F74C4D07BBC470BACC4FF1A3"><enum>(a)</enum><header>In
General</header><text>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 <short-title>Small Business Access and Choice for
Entrepreneurs Act of 2007</short-title>.</text>
</subsection><subsection id="HD5947E26A92745BCBFF56B22F4CC99C3"><enum>(b)</enum><header>Contribution
tax</header><text>For purposes of this section, the term <term>contribution
tax</term> imposed by a State on an association health plan means any tax
imposed by such State if—</text>
<paragraph id="H642377DDE15C410FBD521E4FA4C48E2B"><enum>(1)</enum><text>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;</text>
</paragraph><paragraph id="H00E0567C1CB345CE855F50FBF45F2878"><enum>(2)</enum><text>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;</text>
</paragraph><paragraph id="H5AD2FF3922A94808A74CD8EE4ED442D7"><enum>(3)</enum><text>such tax is
otherwise nondiscriminatory; and</text>
</paragraph><paragraph id="H366E3BA653A8429F813C00EEDACF441"><enum>(4)</enum><text>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.</text>
</paragraph></subsection></section><section id="HB33701D9F1A84310BE00EFE562F1BCB8"><enum>812.</enum><header>Special rules
for church plans</header>
<subsection id="H1CBAEEAABA6B4176ADCD851D94B39100"><enum>(a)</enum><header>Election for
church plans</header><text>Notwithstanding section 4(b)(2), if a church, a
convention or association of churches, or an organization described in section
3(33)(C)(i) maintains a church plan which is a group health plan (as defined in
section 733(a)(1)), and such church, convention, association, or organization
makes an election with respect to such plan under this subsection (in such form
and manner as the Secretary may by regulation prescribe), then the provisions
of this section shall apply to such plan, with respect to benefits provided
under such plan consisting of medical care, as if section 4(b)(2) did not
contain an exclusion for church plans. Nothing in this subsection shall be
construed to render any other section of this title applicable to church plans,
except to the extent that such other section is incorporated by reference in
this section.</text>
</subsection><subsection id="HBA640D487EB540E0A9008B6F5C329B7B"><enum>(b)</enum><header>Effect of
election</header>
<paragraph id="H4868CBD033FC461DAD2CCC29C56C649C"><enum>(1)</enum><header>Preemption of
State insurance laws regulating covered church plans</header><text>Subject to
paragraphs (2) and (3), this section shall supersede any and all State laws
which regulate insurance insofar as they may now or hereafter regulate church
plans to which this section applies or trusts established under such church
plans.</text>
</paragraph><paragraph id="H4426EB41C01647C2979184FD115FC2D"><enum>(2)</enum><header>General State
insurance regulation unaffected</header>
<subparagraph id="HA85C62EF597C4E5ABF5F1EB5FB30954"><enum>(A)</enum><header>In
General</header><text>Except as provided in subparagraph (B) and paragraph (3),
nothing in this section shall be construed to exempt or relieve any person from
any provision of State law which regulates insurance.</text>
</subparagraph><subparagraph id="HA6DB4F0DD03144F1998B0614039D34E2"><enum>(B)</enum><header>Church plans not
to be deemed insurance companies or insurers</header><text>Neither a church
plan to which this section applies, nor any trust established under such a
church plan, shall be deemed to be an insurance company or other insurer or to
be engaged in the business of insurance for purposes of any State law
purporting to regulate insurance companies or insurance contracts.</text>
</subparagraph></paragraph><paragraph id="H3D8616CE667C4F5E9B00B4317054DAB2"><enum>(3)</enum><header>Preemption of
certain State laws relating to premium rate regulation and benefit
mandates</header><text>The provisions of subsections (a)(2)(B) and (b) of
section 805 shall apply with respect to a church plan to which this section
applies in the same manner and to the same extent as such provisions apply with
respect to association health plans.</text>
</paragraph><paragraph id="H22B8F913CBB44E8FB61BC064A189172"><enum>(4)</enum><header>Definitions</header><text>For
purposes of this subsection—</text>
<subparagraph id="H3EB5BE13704249418D3300D3E37D6439"><enum>(A)</enum><header>State
law</header><text>The term <term>State law</term> includes all laws, decisions,
rules, regulations, or other State action having the effect of law, of any
State. A law of the United States applicable only to the District of Columbia
shall be treated as a State law rather than a law of the United States.</text>
</subparagraph><subparagraph id="HE0173956685C4A0D00749542633E3C7B"><enum>(B)</enum><header>State</header><text>The
term <term>State</term> includes a State, any political subdivision thereof, or
any agency or instrumentality of either, which purports to regulate, directly
or indirectly, the terms and conditions of church plans covered by this
section.</text>
</subparagraph></paragraph></subsection><subsection id="H48B2B8DF4318415999C02D741529ACA2"><enum>(c)</enum><header>Requirements for
covered church plans</header>
<paragraph id="HA1D49EF91BC546748DEC3CA1DB100E9"><enum>(1)</enum><header>Fiduciary rules
and exclusive purpose</header><text>A fiduciary shall discharge his duties with
respect to a church plan to which this section applies—</text>
<subparagraph id="HDB1FC9CEDDC54946B71443B147B81C5D"><enum>(A)</enum><text>for the exclusive
purpose of:</text>
<clause id="HBBEEFF9BC5EE4021A6DF2514A87FC77C"><enum>(i)</enum><text>providing benefits
to participants and their beneficiaries; and</text>
</clause><clause id="H3BCB97E143A046CCB7E55B3406C528FE"><enum>(ii)</enum><text>defraying
reasonable expenses of administering the plan;</text>
</clause></subparagraph><subparagraph id="H2A717B55D65F4C038154B9AB7BA6B650"><enum>(B)</enum><text>with the care,
skill, prudence and diligence under the circumstances then prevailing that a
prudent man acting in a like capacity and familiar with such matters would use
in the conduct of an enterprise of a like character and with like aims;
and</text>
</subparagraph><subparagraph id="H106780D6D70A498D00D269E099F493E3"><enum>(C)</enum><text>in accordance with
the documents and instruments governing the plan.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">The
requirements of this paragraph shall not be treated as not satisfied solely
because the plan assets are commingled with other church assets, to the extent
that such plan assets are separately accounted for.</continuation-text></paragraph><paragraph id="HB877262A6DE1429A832941111DEE2BCD"><enum>(2)</enum><header>Claims
procedure</header><text>In accordance with regulations of the Secretary, every
church plan to which this section applies shall—</text>
<subparagraph id="H32AA2019647F463496D25B9BEFD515"><enum>(A)</enum><text>provide adequate
notice in writing to any participant or beneficiary whose claim for benefits
under the plan has been denied, setting forth the specific reasons for such
denial, written in a manner calculated to be understood by the
participant;</text>
</subparagraph><subparagraph id="HA9E55EF372104F159D094759EF42D093"><enum>(B)</enum><text>afford a
reasonable opportunity to any participant whose claim for benefits has been
denied for a full and fair review by the appropriate fiduciary of the decision
denying the claim; and</text>
</subparagraph><subparagraph id="H81D05D5192A54A1085290000DFB4FB6E"><enum>(C)</enum><text>provide a written
statement to each participant describing the procedures established pursuant to
this paragraph.</text>
</subparagraph></paragraph><paragraph id="H19212D8584394C4CB981B6DBBA30508B"><enum>(3)</enum><header>Annual
statements</header><text>In accordance with regulations of the Secretary, every
church plan to which this section applies shall file with the Secretary an
annual statement—</text>
<subparagraph id="H336D9008A39441E48CE4BB6F75CF579F"><enum>(A)</enum><text>stating the names
and addresses of the plan and of the church, convention, or association
maintaining the plan (and its principal place of business);</text>
</subparagraph><subparagraph id="HCB37629B65774EF09829A849168491A0"><enum>(B)</enum><text>certifying that it
is a church plan to which this section applies and that it complies with the
requirements of paragraphs (1) and (2);</text>
</subparagraph><subparagraph id="HB908FAF311E041539BA0E0DEFEDF4356"><enum>(C)</enum><text>identifying the
States in which participants and beneficiaries under the plan are or likely
will be located during the 1-year period covered by the statement; and</text>
</subparagraph><subparagraph id="HB3C9034B310D46368B52A5BDEC4CFF9B"><enum>(D)</enum><text>containing a copy
of a statement of actuarial opinion signed by a qualified actuary that the plan
maintains capital, reserves, insurance, other financial arrangements, or any
combination thereof adequate to enable the plan to fully meet all of its
financial obligations on a timely basis.</text>
</subparagraph></paragraph><paragraph id="HDFA1606C328B46D18CA11DBDCDCCF08C"><enum>(4)</enum><header>Disclosure</header><text>At
the time that the annual statement is filed by a church plan with the Secretary
pursuant to paragraph (3), a copy of such statement shall be made available by
the Secretary to the State insurance commissioner (or similar official) of any
State. The name of each church plan and sponsoring organization filing an
annual statement in compliance with paragraph (3) shall be published annually
in the Federal Register.</text>
</paragraph></subsection><subsection id="H7A394EA3C10242A28F68BFBAD30000D6"><enum>(d)</enum><header>Enforcement</header><text>The
Secretary may enforce the provisions of this section in a manner consistent
with section 502, to the extent applicable with respect to actions under
section 502(a)(5), and with section 3(33)(D), except that, other than for the
purpose of seeking a temporary restraining order, a civil action may be brought
with respect to the plan’s failure to meet any requirement of this section only
if the plan fails to correct its failure within the correction period described
in section 3(33)(D). The other provisions of part 5 (except sections 501(a),
503, 512, 514, and 515) shall apply with respect to the enforcement and
administration of this section.</text>
</subsection><subsection id="H65A37E7EC14C4475A08FFB51142683C7"><enum>(e)</enum><header>Definitions and
other rules</header><text>For purposes of this section—</text>
<paragraph id="H7DCE8A17EA4D4332889CB7411E58ACC1"><enum>(1)</enum><header>In
General</header><text>Except as otherwise provided in this section, any term
used in this section which is defined in any provision of this title shall have
the definition provided such term by such provision.</text>
</paragraph><paragraph id="HC0808CC13D9E445785F39EE3DD95F956"><enum>(2)</enum><header>Seminary
students</header><text>Seminary students who are enrolled in an institution of
higher learning described in section 3(33)(C)(iv) and who are treated as
participants under the terms of a church plan to which this section applies
shall be deemed to be employees as defined in section 3(6) if the number of
such students constitutes an insignificant portion of the total number of
individuals who are treated as participants under the terms of the plan.</text>
</paragraph></subsection></section><section id="HA67DD9E46AC541C3BB00DEA7982F5F61"><enum>813.</enum><header>Definitions and
rules of construction</header>
<subsection id="H1D861B1FF0A44324B57482F532261800"><enum>(a)</enum><header>Definitions</header><text>For
purposes of this part—</text>
<paragraph id="H0452AA7B95864F2ABD678E8812F1CE00"><enum>(1)</enum><header>Group health
plan</header><text>The term <term>group health plan</term> has the meaning
provided in section 733(a)(1) (after applying subsection (b) of this
section).</text>
</paragraph><paragraph id="HB3D8501C451F4A84B9D7A9C03E4959E2"><enum>(2)</enum><header>Medical
care</header><text>The term <term>medical care</term> has the meaning provided
in section 733(a)(2).</text>
</paragraph><paragraph id="HDBF6712CA33D4F1DB3274375515CB751"><enum>(3)</enum><header>Health insurance
coverage</header><text>The term <term>health insurance coverage</term> has the
meaning provided in section 733(b)(1).</text>
</paragraph><paragraph id="H401197A141624622B000A127EF4600FB"><enum>(4)</enum><header>Health insurance
issuer</header><text>The term <term>health insurance issuer</term> has the
meaning provided in section 733(b)(2).</text>
</paragraph><paragraph id="HD25F66A4AE49437693EE969509B2B00"><enum>(5)</enum><header>Applicable
authority</header>
<subparagraph id="H504A026A222C48A99FC15AB6719F1AD"><enum>(A)</enum><header>In
General</header><text>Except as provided in subparagraph (B), the term
<term>applicable authority</term> means, in connection with an association
health plan—</text>
<clause id="H008506571C334D6B9C859300C7C5805C"><enum>(i)</enum><text>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</text>
</clause><clause id="H1FC8DB0A40A546ACB8E9BA44984090CC"><enum>(ii)</enum><text>if there is no
State referred to in clause (i), the Secretary.</text>
</clause></subparagraph><subparagraph id="H0C7E55FA975C42348D19378521847D60"><enum>(B)</enum><header>Exceptions</header>
<clause id="HE60ADD5093214B5C8B008217F2ADD541"><enum>(i)</enum><header>Joint
authorities</header><text>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.</text>
</clause><clause id="H437573F8381D473B87BB70C32BD8749B"><enum>(ii)</enum><header>Regulatory
authorities</header><text>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.</text>
</clause></subparagraph></paragraph><paragraph id="H9D867AC86CA74F35B6433BBFB1C0EC73"><enum>(6)</enum><header>Health
status-related factor</header><text>The term <term>health status-related
factor</term> has the meaning provided in section 733(d)(2).</text>
</paragraph><paragraph id="HF40C65A897BD48578500F25A36EB4D6"><enum>(7)</enum><header>Individual
market</header>
<subparagraph id="H2ABB2F849FD748D58061522B29DA7839"><enum>(A)</enum><header>In
General</header><text>The term <term>individual market</term> means the market
for health insurance coverage offered to individuals other than in connection
with a group health plan.</text>
</subparagraph><subparagraph id="HC23CE3516C4B47D79FBC12ED6DC5E04E"><enum>(B)</enum><header>Treatment of
very small groups</header>
<clause id="H58A2639AA9C14E69AAAE93196498BD09"><enum>(i)</enum><header>In
General</header><text>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.</text>
</clause><clause id="H6D7AE4F24A3F45028BEB07D000C0F00"><enum>(ii)</enum><header>State
exception</header><text>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
<act-name parsable-cite="PHSA">Public Health Service Act</act-name>) is
regulated by such State.</text>
</clause></subparagraph></paragraph><paragraph id="H2617948E7E6A49468D1B085308080100"><enum>(8)</enum><header>Participating
employer</header><text>The term <term>participating employer</term> 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.</text>
</paragraph><paragraph id="H910EB70CFA0748B092A5217FDBC9785"><enum>(9)</enum><header>Applicable State
authority</header><text>The term <term>applicable State authority</term> 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 <act-name parsable-cite="PHSA">Public Health
Service Act</act-name> for the State involved with respect to such
issuer.</text>
</paragraph><paragraph id="H9F0CA8CDC63A4042009B9776D4F018D7"><enum>(10)</enum><header>Qualified
actuary</header><text>The term <term>qualified actuary</term> 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.</text>
</paragraph><paragraph id="HC8D4026A6D8349A1978DBAB7CE0644F3"><enum>(11)</enum><header>Affiliated
member</header><text>The term <term>affiliated member</term> means, in
connection with a sponsor—</text>
<subparagraph id="H090DB3A971604D87AEECA8B858D73B8E"><enum>(A)</enum><text>a person who is
otherwise eligible to be a member of the sponsor but who elects an affiliated
status with the sponsor,</text>
</subparagraph><subparagraph id="HBC468C6401B84C5896C5D64A0EF7198"><enum>(B)</enum><text>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</text>
</subparagraph><subparagraph id="HD7EDAC3AD28D4F3DA7454000F9515CB2"><enum>(C)</enum><text>in the case of an
association health plan in existence on the date of the enactment of the
<short-title>Small Business Access and Choice for
Entrepreneurs Act of 2007</short-title>, a person eligible to be a member of
the sponsor or one of its member associations.</text>
</subparagraph></paragraph><paragraph id="H431352031C464CB4AB26A7EEF014788E"><enum>(12)</enum><header>Large
employer</header><text>The term <term>large employer</term> 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.</text>
</paragraph><paragraph id="H701253161B7C454396030614B2F0093"><enum>(13)</enum><header>Small
employer</header><text>The term <term>small employer</term> means, in
connection with a group health plan with respect to a plan year, an employer
who is not a large employer.</text>
</paragraph></subsection><subsection id="HA21FC90772524804BCC4128635B21C5F"><enum>(b)</enum><header>Rules of
construction</header>
<paragraph id="HA7A23C7183F14C6182ED904C1660E986"><enum>(1)</enum><header>Employers and
employees</header><text>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—</text>
<subparagraph id="H67504E2E01B946D18BED8300B029E951"><enum>(A)</enum><text>in the case of a
partnership, the term <term>employer</term> (as defined in section (3)(5))
includes the partnership in relation to the partners, and the term
<term>employee</term> (as defined in section (3)(6)) includes any partner in
relation to the partnership; and</text>
</subparagraph><subparagraph id="H9B5F2EF11BDA44F300003D2459BBC2B5"><enum>(B)</enum><text>in the case of a
self-employed individual, the term <term>employer</term> (as defined in section
3(5)) and the term <term>employee</term> (as defined in section 3(6)) shall
include such individual.</text>
</subparagraph></paragraph><paragraph id="H146F2F07F57D4FA7A7D800E55C4CC1DB"><enum>(2)</enum><header>Plans, funds,
and programs treated as employee welfare benefit plans</header><text>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.</text>
</paragraph></subsection></section></part><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H226D469CF3414711AA43B57B1B5478AC"><enum>(b)</enum><header>Conforming
amendments to preemption rules</header>
<paragraph id="H1343E95B3C044DFCA9F967E64F65FF8D"><enum>(1)</enum><text>Section 514(b)(6)
of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1144">29 U.S.C. 1144(b)(6)</external-xref>) is amended by adding at the end the
following new subparagraph:</text>
<quoted-block id="HB0A920F6DAF647CF00988FA29527E2E6">
<subparagraph id="H32D0C637258E4105952182896E641E9B" indent="up2"><enum>(E)</enum><text>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.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H4A3B517D00824004A4D7C53675845C4E"><enum>(2)</enum><text>Section 514 of
such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1144">29 U.S.C. 1144</external-xref>) is amended—</text>
<subparagraph id="H28867E62A1B64924AC3C2FF049FE076E"><enum>(A)</enum><text>in subsection
(b)(4), by striking <quote>Subsection (a)</quote> and inserting
<quote>Subsections (a) and (d)</quote>;</text>
</subparagraph><subparagraph id="HC66ED28216E64965B6FA987BA4AC38B4"><enum>(B)</enum><text>in subsection
(b)(5), by striking <quote>subsection (a)</quote> in subparagraph (A) and
inserting <quote>subsection (a) of this section and subsections (a)(2)(B) and
(b) of section 805</quote>, and by striking <quote>subsection (a)</quote> in
subparagraph (B) and inserting <quote>subsection (a) of this section or
subsection (a)(2)(B) or (b) of section 805</quote>;</text>
</subparagraph><subparagraph id="H716A106352DE4EE2B92231A645AF637C"><enum>(C)</enum><text>by redesignating
subsection (d) as subsection (e); and</text>
</subparagraph><subparagraph id="HFB36849189F74FAABB79AD4FFB1D98D"><enum>(D)</enum><text>by inserting after
subsection (c) the following new subsection:</text>
<quoted-block id="H3CCE9367B06D47778ECA74DE73FFC758">
<subsection id="H058871C5B400403898872CC1C22C2560"><enum>(d)</enum><paragraph commented="no" display-inline="yes-display-inline" id="HC8271D3190C2438B85E6E4C5BD00AA15"><enum>(1)</enum><text>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.</text>
</paragraph><paragraph id="H60E12B3FEC5A41D79600D3FDD64184E6" indent="up1"><enum>(2)</enum><text>Except as provided in paragraphs (4)
and (5) of subsection (b) of this section—</text>
<subparagraph id="H01C704161E394B259C4894AB4B88A406"><enum>(A)</enum><text>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.</text>
</subparagraph><subparagraph id="H0B990003183E4B28A8497BF1BACC78C"><enum>(B)</enum><text>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.</text>
</subparagraph></paragraph><paragraph id="H96CB6362BA114D9E84C682BE968D35F2" indent="up1"><enum>(3)</enum><text>For additional provisions relating to
association health plans, see subsections (a)(2)(B) and (b) of section
805.</text>
</paragraph><paragraph id="HFBCA9678C700480CBEF2E457E8E68136" indent="up1"><enum>(4)</enum><text>For purposes of this subsection, the
term <term>association health plan</term> has the meaning provided in section
801(a), and the terms <term>health insurance coverage</term>,
<term>participating employer</term>, and <term>health insurance issuer</term>
have the meanings provided such terms in section 811,
respectively.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H54AEEE029C334C94007523A5EA7E85DD"><enum>(3)</enum><text>Section
514(b)(6)(A) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1144">29 U.S.C. 1144(b)(6)(A)</external-xref>) is amended—</text>
<subparagraph id="H8DB761EA38BB408CA9FCB2F597577D87"><enum>(A)</enum><text>in clause (i)(II),
by striking <quote>and</quote> at the end;</text>
</subparagraph><subparagraph id="H9E33EC83654D49C9BCE7D3FC90387DB"><enum>(B)</enum><text>in clause (ii), by
inserting <quote>and which does not provide medical care (within the meaning of
section 733(a)(2)),</quote> after <quote>arrangement,</quote>, and by striking
<quote>title.</quote> and inserting <quote>title, and</quote>; and</text>
</subparagraph><subparagraph id="H1419E90331BD489CB3BB9DBB846B3E"><enum>(C)</enum><text>by adding at the end
the following new clause:</text>
<quoted-block id="H6450DCE31A1A4E42A7070049801E0000">
<clause id="HDDB56F76331747889D66673F4B9F7FAB" indent="up2"><enum>(iii)</enum><text>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.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H061DF74199564D0B99E63547D85EC04B"><enum>(4)</enum><text>Section 514(e) of
such Act (as redesignated by paragraph (2)(C)) is amended—</text>
<subparagraph id="H65092FDC691045548EC8362C680038C0"><enum>(A)</enum><text>by striking
<quote>Nothing</quote> and inserting <quote>(1) Except as provided in paragraph
(2), nothing</quote>; and</text>
</subparagraph><subparagraph id="HEBC4B010F52C4092BD80C02EF3BAE8CE"><enum>(B)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block id="HF4AD6D41D6974E0685AA1D2B677E63A">
<paragraph id="HAB043B6C10ED47C5A720ACF5E927E009" indent="up1"><enum>(2)</enum><text>Nothing in any other provision of law
enacted on or after the date of the enactment of the
<short-title>Small Business Access and Choice for
Entrepreneurs Act of 2007</short-title> 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.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="H94F23FD2793540BEBE60ABBF55D0B116"><enum>(c)</enum><header>Plan
sponsor</header><text>Section 3(16)(B) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/102">29 U.S.C. 102(16)(B)</external-xref>) is
amended by adding at the end the following new sentence: <quote>Such term also
includes a person serving as the sponsor of an association health plan under
part 8.</quote>.</text>
</subsection><subsection id="H8577104A678B47A291C4BD14529606CF"><enum>(d)</enum><header>Disclosure of
solvency protections related to self-insured and fully insured options under
association health plans</header><text>Section 102(b) of such Act (29 U.S.C.
102(b)) is amended by adding at the end the following: <quote>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.</quote>.</text>
</subsection><subsection id="H98EC76DEF7D245CD8032D56BAFA0F0B5"><enum>(e)</enum><header>Savings
clause</header><text>Section 731(c) of such Act is amended by inserting
<quote>or part 8</quote> after <quote>this part</quote>.</text>
</subsection><subsection id="HBEF9C650C9AD4DB08FE4D19C108766F9"><enum>(f)</enum><header>Report to the
Congress regarding certification of self-insured association health
plans</header><text>Not later than January 1, 2010, 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.</text>
</subsection><subsection id="H796C0A55419946F98D67D2C59D44178D"><enum>(g)</enum><header>Clerical
amendment</header><text>The table of contents in section 1 of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> is amended by inserting after the item relating to section 734
the following new items:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="HCC7ECE85ED884C23AA0691E3E80546B2" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="part">Part 8—Rules governing association health
plans</toc-entry>
<toc-entry level="section">Sec. 801. Association health
plans.</toc-entry>
<toc-entry level="section">Sec. 802. Certification of association
health plans.</toc-entry>
<toc-entry level="section">Sec. 803. Requirements relating to
sponsors and boards of trustees.</toc-entry>
<toc-entry level="section">Sec. 804. Participation and coverage
requirements.</toc-entry>
<toc-entry level="section">Sec. 805. Other requirements relating to
plan documents, contribution rates, and benefit options.</toc-entry>
<toc-entry level="section">Sec. 806. Maintenance of reserves and
provisions for solvency for plans providing health benefits in addition to
health insurance coverage.</toc-entry>
<toc-entry level="section">Sec. 807. Requirements for application and
related requirements.</toc-entry>
<toc-entry level="section">Sec. 808. Notice requirements for
voluntary termination.</toc-entry>
<toc-entry level="section">Sec. 809. Corrective actions and mandatory
termination.</toc-entry>
<toc-entry level="section">Sec. 810. Trusteeship by the Secretary of
insolvent association health plans providing health benefits in addition to
health insurance coverage.</toc-entry>
<toc-entry level="section">Sec. 811. State assessment
authority.</toc-entry>
<toc-entry level="section">Sec. 812. Special rules for church
plans.</toc-entry>
<toc-entry level="section">Sec. 813. Definitions and rules of
construction.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="H9E8BFFAB4E9D422CA3854E314290FC9"><enum>403.</enum><header>Clarification of
treatment of single employer arrangements</header><text display-inline="no-display-inline">Section 3(40)(B) of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1002">29 U.S.C. 1002(40)(B)</external-xref>) is amended—</text>
<paragraph id="HFC9AEC72F3BC414FB015BDCEF94193FC"><enum>(1)</enum><text>in clause (i), by
inserting <quote>for any plan year of any such plan, or any fiscal year of any
such other arrangement,</quote> after <quote>single employer</quote>, and by
inserting <quote>during such year or at any time during the preceding 1-year
period</quote> after <quote>control group</quote>;</text>
</paragraph><paragraph id="HF6E855132B4343348EBAD8E501F802A"><enum>(2)</enum><text>in
clause (iii)—</text>
<subparagraph id="HC2134AB20E5C40659CBBD2E8B54F54AB"><enum>(A)</enum><text>by striking
<quote>common control shall not be based on an interest of less than 25
percent</quote> and inserting <quote>an interest of greater than 25 percent may
not be required as the minimum interest necessary for common control</quote>;
and</text>
</subparagraph><subparagraph id="H8541332FA8E1442C005D3DCEABCACB5F"><enum>(B)</enum><text>by striking
<quote>similar to</quote> and inserting <quote>consistent and coextensive
with</quote>;</text>
</subparagraph></paragraph><paragraph id="H15EA846009CF408DB027CFF2D8656946"><enum>(3)</enum><text>by redesignating
clauses (iv) and (v) as clauses (v) and (vi), respectively; and</text>
</paragraph><paragraph id="HAAF143EDC2074510BF49F83BABF4CF5"><enum>(4)</enum><text>by
inserting after clause (iii) the following new clause:</text>
<quoted-block id="H814354E39060470380899CE4C78EF000">
<clause id="H770060468C604AB399AA65FEE2ABDA" indent="up2"><enum>(iv)</enum><text>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;</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></section><section id="HA2F61C0E18E84C6A8D9FC8784027C5B"><enum>404.</enum><header>Clarification of
treatment of certain collectively bargained arrangements</header>
<subsection id="H89920D7B9B15427A8D2E8500C40015FB"><enum>(a)</enum><header>In
General</header><text>Section 3(40)(A)(i) of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1002">29 U.S.C. 1002(40)(A)(i)</external-xref>) is amended to read as
follows:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H6E71EDACC9604D1E8652E22B174F6E49">
<clause id="HF3806051DE2546EA9FBA8C99BD7926DE" indent="up2"><enum>(i)</enum><subclause commented="no" display-inline="yes-display-inline" id="H0FFFAD4647934873BF598FBBB5329C75"><enum>(I)</enum><text>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 (<external-xref legal-doc="usc" parsable-cite="usc/29/158">29 U.S.C. 158(d)</external-xref>) or paragraph Fourth of section 2 of the Railway Labor
Act (<external-xref legal-doc="usc" parsable-cite="usc/45/152">45 U.S.C. 152</external-xref>, 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);</text>
</subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HA1D236FF1E31468B944000BA6C5025CC"><enum>(b)</enum><header>Limitations</header><text>Section
3(40) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1002">29 U.S.C. 1002(40)</external-xref>) is amended by adding at the end the
following new subparagraphs:</text>
<quoted-block id="H4C1CA48C97C04EC38C4F547045217993">
<subparagraph id="H9641BE416106473BAE82B16974AFF9B7" indent="up2"><enum>(C)</enum><text>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:</text>
<clause id="H43F8D619CB034A0E9DE0238C7590EFA3"><enum>(i)</enum><text>The plan or other arrangement, and the
employee organization or any other entity sponsoring the plan or other
arrangement, do not—</text>
<subclause id="H3C104654B1C04C4DACD58F22C55C91C3"><enum>(I)</enum><text>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</text>
</subclause><subclause id="H4E489CF0DB9749E68817404E796C9D2D"><enum>(II)</enum><text>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;</text>
</subclause><continuation-text continuation-text-level="clause" indent="paragraph">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.</continuation-text></clause><clause id="H6A0BFEA612DB4067BE6701CF16CED510"><enum>(ii)</enum><text>As of the end of the preceding plan
year, the number of covered individuals under the plan or other arrangement who
are neither—</text>
<subclause id="H6F35690BE39148F584D2D7F9093DB0F9"><enum>(I)</enum><text>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</text>
</subclause><subclause id="HE9ED883BA6F1402FB280BFD3DEDDA091"><enum>(II)</enum><text>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);</text>
</subclause><continuation-text continuation-text-level="clause" indent="paragraph">does not exceed 15 percent of the total number of
individuals who are covered under the plan or arrangement and who are present
or former employees who are or were covered under the plan or arrangement
pursuant to a collective bargaining agreement with a participating employer.
The requirements of the preceding provisions of this clause shall be treated as
satisfied if, as of the end of the preceding plan year, such covered
individuals are comprised solely of individuals who were covered individuals
under the plan or other arrangement as of the date of the enactment of the
Small Business Access and Choice for Entrepreneurs Act of 2003 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.</continuation-text></clause><clause id="HBA0D9207F37E431CB0B394BD77DB10AD"><enum>(iii)</enum><text>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).</text>
</clause></subparagraph><subparagraph id="H693B03D3ACD34F3BA3A1FFDEFD3BECB3" indent="up2"><enum>(D)</enum><text>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—</text>
<clause id="H31B279B0E2734A619486DE0095907924"><enum>(i)</enum><text>all of the benefits provided under the
plan or arrangement consist of health insurance coverage; or</text>
</clause><clause id="HD2DBD5B28D2D4582BE2333DD2575DF17"><enum>(ii)</enum><subclause commented="no" display-inline="yes-display-inline" id="H565A4C93E2BC4AFA84F32380949E9C14"><enum>(I)</enum><text>the plan or arrangement
is a multiemployer plan; and</text>
</subclause><subclause id="HD499D5356E2A4994BD04C4E481E253B8" indent="up1"><enum>(II)</enum><text>the requirements of clause (B) of the
proviso to clause (5) of section 302(c) of the Labor Management Relations Act,
1947 (<external-xref legal-doc="usc" parsable-cite="usc/29/186">29 U.S.C. 186(c)</external-xref>) are met with respect to such plan or other
arrangement.</text>
</subclause></clause></subparagraph><subparagraph id="H4D80ABC90D8D4EF08698CB20ADF8E795" indent="up2"><enum>(E)</enum><text>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—</text>
<clause id="H4503FA618D76463DBAE008746207237"><enum>(i)</enum><text>the plan or arrangement is in effect
as of the date of the enactment of the <short-title>Small
Business Access and Choice for Entrepreneurs Act of 2007</short-title>;
or</text>
</clause><clause id="H1E34077A117445B6AFF147EE3721C0A8"><enum>(ii)</enum><text>the employee organization or other
entity sponsoring the plan or arrangement—</text>
<subclause id="H38CF6F180E604C4F89A1A5EBB3109967"><enum>(I)</enum><text>has been in existence for at least
3 years; or</text>
</subclause><subclause id="HAD3F34F9B0C64CEC002456D8056E02E4"><enum>(II)</enum><text>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.</text>
</subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H75816D95A3BA4F54B8F6968BFD308847"><enum>(c)</enum><header>Conforming
amendments to definitions of participant and beneficiary</header><text>Section
3(7) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1002">29 U.S.C. 1002(7)</external-xref>) is amended by adding at the end the
following new sentence: <quote>Such term includes an individual who is a
covered individual described in paragraph (40)(C)(ii).</quote>.</text>
</subsection></section><section id="H7756013E777F4BE5BAD39F58699778F3"><enum>405.</enum><header>Enforcement
provisions</header>
<subsection id="H2BA4694C5C1F475CA353002463887B00"><enum>(a)</enum><header>Criminal
penalties for certain willful misrepresentations</header><text>Section 501 of
the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1131">29 U.S.C. 1131</external-xref>) is amended—</text>
<paragraph id="H03DF8CEFE9EB4C95B22500005FE2838F"><enum>(1)</enum><text>by inserting
<quote>(a)</quote> after <quote>Sec. 501.</quote>; and</text>
</paragraph><paragraph id="H4B5720E6C1BD4311873840C9E9CC18B8"><enum>(2)</enum><text>by adding at the
end the following new subsection:</text>
<quoted-block id="H45BBC7AC8F244554BD8532BE17F9F726">
<subsection id="H2BD8B5B4F6C74C9DA7EEF61BB94C7E17"><enum>(b)</enum><text>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—</text>
<paragraph id="HB1C9DD6E8F374050BF2D275352C7D680"><enum>(1)</enum><text>being an
association health plan which has been certified under part 8;</text>
</paragraph><paragraph id="HD29B88244FB944A9AD937C00574B1721"><enum>(2)</enum><text>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</text>
</paragraph><paragraph id="HF54C933B4C274A47A2C383F307A716D"><enum>(3)</enum><text>being a plan or
arrangement with respect to which the requirements of subparagraph (C), (D), or
(E) of section 3(40) are met;</text>
</paragraph><continuation-text continuation-text-level="subsection">shall,
upon conviction, be imprisoned not more than 5 years, be fined under title 18,
United States Code, or
both.</continuation-text></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H0F3CC714779A42C59B8EA9EAE30001D7"><enum>(b)</enum><header>Cease activities
orders</header><text>Section 502 of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132</external-xref>) is amended by
adding at the end the following new subsection:</text>
<quoted-block id="HDB2DA730D4A74CFC859BFE177F49BDB">
<subsection id="H51F567B5CBD246F8B09FF4E156000CE"><enum>(n)</enum><paragraph commented="no" display-inline="yes-display-inline" id="HD58B1F89FAB64A17A3572073287F4C79"><enum>(1)</enum><text>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—</text>
<subparagraph id="H928DF3E1A6FE4D90A7D2606E38E6D220" indent="up1"><enum>(A)</enum><text>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</text>
</subparagraph><subparagraph id="HCFC976B6DE284C69B9F853DBB928D021" indent="up1"><enum>(B)</enum><text>is an association health plan
certified under part 8 and is not operating in accordance with the requirements
under part 8 for such certification,</text>
</subparagraph></paragraph><continuation-text continuation-text-level="subsection">a
district court of the United States shall enter an order requiring that the
plan or arrangement cease activities.</continuation-text><paragraph id="H9D023674773547CDBA19A5A53FB3800" indent="up1"><enum>(2)</enum><text>Paragraph (1) shall not apply in the
case of an association health plan or other arrangement if the plan or
arrangement shows that—</text>
<subparagraph id="H229A2E65265F4B68A4B4DA95A6EC491D"><enum>(A)</enum><text>all benefits under it referred to in
paragraph (1) consist of health insurance coverage; and</text>
</subparagraph><subparagraph id="H7523B6365C6243578992D8CCBE9D663"><enum>(B)</enum><text>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.</text>
</subparagraph></paragraph><paragraph id="H257DCC25DE0C4EB6BF879D152273E347" indent="up1"><enum>(3)</enum><text>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.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H13B8468ED8C9445BBB2DE545EE643DC6"><enum>(c)</enum><header>Responsibility
for claims procedure</header><text>Section 503 of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1133">29 U.S.C. 1133</external-xref>) is
amended—</text>
<paragraph id="H53F8877E9EE944CABE6E2097C3EDE3CA"><enum>(1)</enum><text>by inserting
<quote>(a) In General.—</quote> after <quote>Sec. 503.</quote>; and</text>
</paragraph><paragraph id="HD038DB0494F84913A3685CF949098039"><enum>(2)</enum><text>by adding at the
end the following new subsection:</text>
<quoted-block id="H9F26F267F3DF41DE00ABD203596B19D9">
<subsection id="H7223DB8CA6F54D2584EAD6B3C3E98EF"><enum>(b)</enum><header>Association
health plans</header><text>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.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection></section><section id="H90E3828E89A8448EB0C44C88DE6FCB2"><enum>406.</enum><header>Cooperation
between Federal and State authorities</header><text display-inline="no-display-inline">Section 506 of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1136">29 U.S.C. 1136</external-xref>) is amended by adding at the end the following
new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="HC91D45518F1E41AA80883BFFD272C00">
<subsection id="H405988FF237844BC87AC22EADBE883"><enum>(d)</enum><header>Responsibility of
States with respect to association health plans</header>
<paragraph id="H759C447416FD45ED965F8DEBEC009DF4"><enum>(1)</enum><header>Agreements with
States</header><text>A State may enter into an agreement with the Secretary for
delegation to the State of some or all of—</text>
<subparagraph id="H80CABDBD1E6343FBB7585FE27088FE73"><enum>(A)</enum><text>the Secretary’s
authority under sections 502 and 504 to enforce the requirements for
certification under part 8;</text>
</subparagraph><subparagraph id="HD4C0B1BC8BDD49DFAD28B150686306E3"><enum>(B)</enum><text>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</text>
</subparagraph><subparagraph id="H1BE6EF172E284FF3B906FAF28F42F1C"><enum>(C)</enum><text>any combination of
the Secretary’s authority authorized to be delegated under subparagraphs (A)
and (B).</text>
</subparagraph></paragraph><paragraph id="H76177706279A4A48862B828E4FE83282"><enum>(2)</enum><header>Delegations</header><text>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.</text>
</paragraph><paragraph id="HC996D76DEB2C47A4BF2F76A2F400F94F"><enum>(3)</enum><header>Recognition of
primary domicile State</header><text>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.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HA19EA8E13BD747BEA5B4DA7D9DF8C86D"><enum>407.</enum><header>Effective date
and transitional and other rules</header>
<subsection id="H27CC43B2DC394DC4972669E6C8D7E3F"><enum>(a)</enum><header>Effective
date</header><text>The amendments made by sections 101, 104, and 105 shall take
effect on January 1, 2007. The amendments made by sections 102 and 103 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, 2007. Such regulations shall be issued through
negotiated rulemaking.</text>
</subsection><subsection id="H0D3B638C4B524011938BAD9E2CE02B76"><enum>(b)</enum><header>Exception</header><text>Section
801(a)(2) of the <act-name parsable-cite="ERISA">Employee Retirement Income
Security Act of 1974</act-name> (added by section 101) 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).</text>
</subsection><subsection id="H0310EB239BF5469BA87E78AF4E976E37"><enum>(c)</enum><header>Treatment of
certain existing health benefits programs</header>
<paragraph id="H21903A7071E14411A3C08113EB6F369"><enum>(1)</enum><header>In
General</header><text>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 813(a)(5) of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (as amended by this Act)) by the arrangement of an application
for certification of the arrangement under part 8 of subtitle B of title I of
such Act—</text>
<subparagraph id="H2B776D3CA05A4B378EE0FFBCE3BDCE"><enum>(A)</enum><text>such arrangement
shall be deemed to be a group health plan for purposes of title I of such
Act;</text>
</subparagraph><subparagraph id="H686A4D5C5E954F58AF822FF5DC66243D"><enum>(B)</enum><text>the requirements
of sections 801(a)(1) and 803(a)(1) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> shall be deemed met with respect to such arrangement;</text>
</subparagraph><subparagraph id="H95239E4EFDD442EE8454ED13429B649F"><enum>(C)</enum><text>the requirements
of section 803(b) of such Act shall be deemed met, if the arrangement is
operated by a board of directors which—</text>
<clause id="H2CF60EC8A3E148188E797916DDD12141"><enum>(i)</enum><text>is
elected by the participating employers, with each employer having one vote;
and</text>
</clause><clause id="HA0A3EC2024B04F99BECED22E4E75443D"><enum>(ii)</enum><text>has
complete fiscal control over the arrangement and which is responsible for all
operations of the arrangement;</text>
</clause></subparagraph><subparagraph id="H90ED3D21ACF7412C97DEDB77E5ED6C60"><enum>(D)</enum><text>the requirements
of section 804(a) of such Act shall be deemed met with respect to such
arrangement; and</text>
</subparagraph><subparagraph id="H14F99DD5CDDC4E5998F4F2CA00B02E80"><enum>(E)</enum><text>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.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph><paragraph id="H8650D39227AC476AAE9FF666AB07D3E4"><enum>(2)</enum><header>Definitions</header><text>For
purposes of this subsection, the terms <term>group health plan</term>,
<term>medical care</term>, and <term>participating employer</term> shall have
the meanings provided in section 813 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name>, except that the reference in paragraph (7) of such section to
an <quote>association health plan</quote> shall be deemed a reference to an
arrangement referred to in this subsection.</text>
</paragraph></subsection></section><enum>V</enum><header>Improvement to
Access and Choice of Health Care</header>
<section display-inline="no-display-inline" id="H776AC8572D2148FEADAF1F8DB0C86B33" section-type="subsequent-section"><enum>501.</enum><header>Refundable and
advanceable credit for health insurance costs</header>
<subsection id="HD5FCDE24445A4CE1A2A2DB7B713E06DA"><enum>(a)</enum><header>In
General</header><text>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 36 as section 37 and by inserting after section 35 the
following new section:</text>
<quoted-block id="HB95C74539F2940249B988F6D48CD993C">
<section id="HD8F8BDC278FF426880B0F2ECCCC71194"><enum>36.</enum><header>Health insurance
costs</header>
<subsection id="HC7D4ACE87DED4F528BB94D2EB69960F0"><enum>(a)</enum><header>In
General</header><text>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 coverage of the
taxpayer, his spouse, and dependents.</text>
</subsection><subsection id="H81773E62D74F49809193D14B009F732C"><enum>(b)</enum><header>Limitations</header>
<paragraph id="H6D8BFA9E17D948C5A487004372C055BD"><enum>(1)</enum><header>Maximum
credit</header>
<subparagraph id="H2138DED7A39A42E8A2DE710524CD1302"><enum>(A)</enum><header>In
General</header><text>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 months during such taxable year.</text>
</subparagraph><subparagraph id="H9436D49561B8416398BD6EFAD4EDF8CA"><enum>(B)</enum><header>Monthly
limitation</header><text>The monthly limitation for any month is the amount
equal to <fraction>1/12</fraction> of the lesser of—</text>
<clause id="HA599C669F74A4B6C890027B4E539123D"><enum>(i)</enum><text>the product of
$1,000 multiplied by the number of individuals taken into account under
subsection (a) who are covered under qualified health insurance as of the first
day of such month; or</text>
</clause><clause id="H33BFF421A2EE4A4CA9925857DBE6D693"><enum>(ii)</enum><text>$3,000.</text>
</clause></subparagraph></paragraph><paragraph id="H5A5481AE11B04EF0969749C12142BA2B"><enum>(2)</enum><header>Employer
subsidized coverage</header><text>Subsection (a) shall not apply to amounts
paid for coverage of any individual for any month for which such individual
participates in any subsidized health plan maintained by any employer of the
taxpayer or of the spouse of the taxpayer. The rule of the last sentence of
section 162(l)(2)(B) shall apply for purposes of the preceding sentence.</text>
</paragraph></subsection><subsection id="H2BD3F9345979438B84E7B0B4E7F9FDFE"><enum>(c)</enum><header>Qualified health
insurance</header><text>For purposes of this section—</text>
<paragraph id="H74910833BDCD4C30994CF67F5C7D3558"><enum>(1)</enum><header>In
General</header><text>The term <term>qualified health insurance</term> means
insurance which constitutes medical care if—</text>
<subparagraph id="HA4BBD7793A944492B000B5B1C92144C8"><enum>(A)</enum><text>such insurance
meets the requirements of section 223(c)(2)(A)(ii),</text>
</subparagraph><subparagraph id="HCA26A136FB154ABAB5A81430AAAD5558"><enum>(B)</enum><text>there is no
exclusion from, or limitation on, coverage for any preexisting medical
condition of any applicant who, on the date the application is made, has been
continuously insured during the 1-year period ending on the date of the
application under—</text>
<clause id="H24E1B3C99DD84873B8B7488F13A551B5"><enum>(i)</enum><text>qualified health
insurance (determined without regard to this subparagraph), or</text>
</clause><clause id="H51A3C08CA99240C583EBFABF79A645AC"><enum>(ii)</enum><text>a
program described in—</text>
<subclause id="HD0AE6C524C9841F5A2FADB557DC92E2"><enum>(I)</enum><text>title XVIII or XIX
of the <act-name parsable-cite="SSA">Social Security Act</act-name>,</text>
</subclause><subclause id="H6482F26CFBE448C3AE45128B5F2F4BC7"><enum>(II)</enum><text>chapter 55 of
title 10, United States Code,</text>
</subclause><subclause id="H86B1E880196740ED8686ED4B7214A507"><enum>(III)</enum><text>chapter 17 of
title 38, United States Code,</text>
</subclause><subclause id="HCB51C942C4A547F798FF8D70E20091FE"><enum>(IV)</enum><text>chapter 89 of
title 5, United States Code, or</text>
</subclause><subclause id="HF9E20B148AA84B1D9824148F85C087F8"><enum>(V)</enum><text>the
<act-name parsable-cite="IHCIA">Indian Health Care Improvement Act</act-name>,
and</text>
</subclause></clause></subparagraph><subparagraph id="HBDC77A913FEA4D3CB096A121D2FAA6DA"><enum>(C)</enum><text>in the case of
each applicant who has not been continuously so insured during the 1-year
period ending on the date the application is made, the exclusion from, or
limitation on, coverage for any preexisting medical condition does not extend
beyond the period after such date equal to the lesser of—</text>
<clause id="H891BF8E08D524FC0A38835A48DE6037D"><enum>(i)</enum><text>the number of
months immediately prior to such date during which the individual was not so
insured since the illness or condition in question was first diagnosed,
or</text>
</clause><clause id="HA92EF0A86007498A97691041FD00B9FC"><enum>(ii)</enum><text>1
year.</text>
</clause></subparagraph></paragraph><paragraph id="H1B79E592D3F144A7B12690BE0019359E"><enum>(2)</enum><header>Exclusion of
certain plans</header><text>Such term does not include—</text>
<subparagraph id="H2420762697E24966B1A25B1E1C230090"><enum>(A)</enum><text>insurance if
substantially all of its coverage is coverage described in section
223(c)(1)(B),</text>
</subparagraph><subparagraph id="HCAB8F6ECD15047EAA747A7F1158CDAAB"><enum>(B)</enum><text>insurance under a
program described in paragraph (1)(B)(ii).</text>
</subparagraph></paragraph><paragraph id="HE4062EA5D7E048C08C05EA09E703B2A3"><enum>(3)</enum><header>Transition rule
for 2007</header><text>In the case of applications made during 2007, the
requirements of subparagraphs (C) and (D) of paragraph (1) are met only if the
insurance does not exclude from coverage, or limit coverage for, any
preexisting medical condition of any applicant.</text>
</paragraph></subsection><subsection id="HA7C9962FA8584143A96C74B604FB2CB"><enum>(d)</enum><header>Special
rules</header>
<paragraph id="HC4ED4412807A4C2B81F448AFA3AEFCD1"><enum>(1)</enum><header>Coordination
with medical deduction, etc</header><text>Any amount paid by a taxpayer for
insurance to which subsection (a) applies shall not be taken into account in
computing the amount allowable to the taxpayer as a credit under section 35 or
as a deduction under section 162(l) or 213(a).</text>
</paragraph><paragraph id="H52A3728B461F405EBC84A87EA3AA64A9"><enum>(2)</enum><header>Denial of credit
to dependents</header><text>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.</text>
</paragraph><paragraph id="H084AD13182D942B1AEDE21E82357FAA2"><enum>(3)</enum><header>Married couples
must file joint return</header>
<subparagraph id="H2A3A68DB71FC49C4995F6C8232AC59F3"><enum>(A)</enum><header>In
General</header><text>If the taxpayer is married at the close of the taxable
year, the credit shall be allowed under subsection (a) only if the taxpayer and
his spouse file a joint return for the taxable year.</text>
</subparagraph><subparagraph id="HA149CB99100D4EDD963D4D82AC89741"><enum>(B)</enum><header>Marital status;
certain married individuals living apart</header><text>Rules similar to the
rules of paragraphs (3) and (4) of section 21(e) shall apply for purposes of
this paragraph.</text>
</subparagraph></paragraph><paragraph id="HF9E057C223204D868F284DA684558EA5"><enum>(4)</enum><header>Verification of
coverage, etc</header><text>No credit shall be allowed under this section to
any individual unless such individual’s coverage under qualified health
insurance, and the amount paid for such coverage, are verified in such manner
as the Secretary may prescribe.</text>
</paragraph><paragraph id="H7200557B738A46AF9FC6ACD489788C1D"><enum>(5)</enum><header>Coordination
with advance payments of credit</header><text>With respect to any taxable year,
the amount which would (but for this subsection) be allowed as a credit to the
taxpayer under subsection (a) shall be reduced (but not below zero) by the
aggregate amount paid on behalf of such taxpayer under section 7527A for months
beginning in such taxable year.</text>
</paragraph><paragraph id="HA6A7B9DD3379467400E2BE57A87BA200"><enum>(6)</enum><header>Cost-of-living
adjustment</header><text>In the case of any taxable year beginning in a
calendar year after 2007, each dollar amount contained in subsection (b)(1)(B)
shall be increased by an amount equal to—</text>
<subparagraph id="HDE9220E971A54F099081856CAC755EE4"><enum>(A)</enum><text>such dollar
amount, multiplied by</text>
</subparagraph><subparagraph id="HA146F1DC856A4816A7C61957A16E92F3"><enum>(B)</enum><text>the cost-of-living
adjustment determined under section 1(f)(3) for the calendar year in which the
taxable year begins by substituting <quote>calendar year 2006</quote> for
<quote>calendar year 1992</quote> in subparagraph (B) thereof.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Any
increase determined under the preceding sentence shall be rounded to the
nearest multiple of
$10.</continuation-text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H886E00878A1A4E1CBBF28C81F17D3CE7"><enum>(b)</enum><header>Advance payment
of credit</header><text>Chapter 77 of such Code (relating to miscellaneous
provisions) is amended by inserting after section 7527 the following new
section:</text>
<quoted-block id="H00B3169CBAF14EBB8FC5B7F782F8629">
<section id="H739CCA7E4E8B4D9A8F68AF009F64B8FC"><enum>7527A.</enum><header>Advance
payment of credit for health insurance costs</header>
<subsection id="HDFB19DC3B6864178A56F09F2C9D5F136"><enum>(a)</enum><header>General
rule</header><text>The Secretary shall establish a program for making payments
on behalf of individuals to providers of qualified health insurance (as defined
in section 36(c)) for such individuals.</text>
</subsection><subsection id="HB75009EE31A443429816049D6E1640A0"><enum>(b)</enum><header>Limitation on
advance payments during any taxable year</header><text>The Secretary may make
payments under subsection (a) only to the extent that the total amount of such
payments made on behalf of any individual during the taxable year does not
exceed the amount allowable as a credit to such individual for such year under
section 36 (determined without regard to subsection (d)(5)
thereof).</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H815F2CDF7C4B4BDB87CC9FAD7DC96125"><enum>(c)</enum><header>Conforming
amendments</header>
<paragraph id="H8219A4ED84EB4EEE88BABD377381CFBC"><enum>(1)</enum><text>Paragraph (2) of
<external-xref legal-doc="usc" parsable-cite="usc/31/1324">section 1324(b)</external-xref> of title 31, United States Code, is amended by inserting
<quote>or 36</quote> after <quote>section 35</quote>.</text>
</paragraph><paragraph id="HF7CF3499F9EB48F9857C45A0D9B7EF25"><enum>(2)</enum><text>The table of
sections for subpart C of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by striking the item relating to section 36 and
inserting the following new items:</text>
<quoted-block id="H5CF8F144787B409D88A47600B6CB4982" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 36. Health insurance
costs.</toc-entry>
<toc-entry level="section">Sec. 37. Overpayments of
tax.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H89746D768C6B4EFFB740A46EE436646"><enum>(3)</enum><text>The table of
sections for chapter 77 of such Code is amended by inserting after the item
relating to section 7527 the following new item:</text>
<quoted-block display-inline="no-display-inline" id="H020C772BAD6E4FF497A5B1F0F705A6E2" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 7527A. Advance payment of credit for
health insurance
costs.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H7806C394A767421CB4B8E9BDCAADCC26"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2006</text>
</subsection></section><section id="HF8040F05DF554A968EEEDFE0D8CE48D"><enum>502.</enum><header>Exclusion for
employer payments made to compensate employees who elect not to participate in
employer-subsidized health plans</header>
<subsection id="H43307DA17F054031BAA37FC0E1AD5F00"><enum>(a)</enum><header>In
General</header><text>Part III of subchapter B of chapter 1 of the Internal
Revenue Code of 1986 (relating to items specifically excluded from gross
income) is amended by inserting after section 139A the following new
section:</text>
<quoted-block id="HC58A7A8A5C364464BA5D2F80268CAD73">
<section id="H25FA81BEC6414521844DCBBA66849968"><enum>139B.</enum><header>Treatment of
compensating payments made for employees who elect not to participate in
employer-subsidized health plans</header>
<subsection id="HC49AED407A2B438CBE084169286586E5"><enum>(a)</enum><header>In
General</header><text>Gross income of an eligible employee shall not include
the amount of any compensating coverage payment made by an employer of such
employee for such employee’s benefit.</text>
</subsection><subsection id="H7A9F8A00F2F0402685B374CEEC392C21"><enum>(b)</enum><header>Eligible
employee</header><text>For purposes of this section, the term <term>eligible
employee</term> means any employee who is eligible to participate in any
subsidized health plan of an employer for any period and who elects not to
participate in any subsidized health plan of such employer for such
period.</text>
</subsection><subsection id="HAEB3FC519A0942BFBB3D78BFF797B9B0"><enum>(c)</enum><header>Compensating
coverage payment</header><text>For purposes of this section, the term
<term>compensating coverage payment</term> means—</text>
<paragraph id="H13A2A66A04A940E9B96DE690B1BDF026"><enum>(1)</enum><text>any payment made
by the employer for qualified health insurance specified by the employee (for
any period for which the employee is described in subsection (b)) which covers
all of the individuals who, but for the election referred to in subsection (b),
would be covered under the subsidized health plan of the employer, and</text>
</paragraph><paragraph id="H7594309052B540018D00016303869200"><enum>(2)</enum><text>any payment made
by the employer to any Archer MSA or health savings account of such employee or
spouse for a period for which the employee is covered by qualified health
insurance.</text>
</paragraph></subsection><subsection id="H116D39504958412D9718D54900A45DDA"><enum>(d)</enum><header>Qualified health
insurance</header><text>For purposes of this section, the term <term>qualified
health insurance</term> has the meaning given such term in section
36(c).</text>
</subsection><subsection id="H4EEEDB4858D64F7AB09651EE7C04F717"><enum>(e)</enum><header>Employer
participation</header>
<paragraph id="H9E90C20250DF41CAB4E5BBF2064ECE7"><enum>(1)</enum><header>In
general</header><text>This section shall apply to a compensating coverage
payment made by an employer for an employee’s benefit only if—</text>
<subparagraph id="H6871028592264203AAEB9C2884E6C621"><enum>(A)</enum><text>the employer, and
all other employers which are members of any controlled group which includes
such employer, agree to make such payments to all their eligible
employees,</text>
</subparagraph><subparagraph id="H9DF9458ED3054CF3AA1552E473BB9D7"><enum>(B)</enum><text>the amount of such
payment is not less than the employer health plan contribution for such period
with respect to the employee, and</text>
</subparagraph><subparagraph id="HB4E7CA86E23344BEB6B01CC499C447E4"><enum>(C)</enum><text>the employer
permits the election referred to in subsection (b) to be made by
employees—</text>
<clause id="H6F4DCCD8786B488F8414AEE96DD1299F"><enum>(i)</enum><text>at
the commencement of employment with the employer, and</text>
</clause><clause id="H7216E4CDF3394FB1BFB200FA910084A7"><enum>(ii)</enum><text>during open
enrollment periods (not less frequently than annually) of at least 30
days.</text>
</clause></subparagraph></paragraph><paragraph id="H9EA7EC62CBF9446181227E4B61DD1DF8"><enum>(2)</enum><header>Exception for
certain employees</header><text>Paragraph (1) shall not apply to—</text>
<subparagraph id="H65F2193FD2264529B06EC452044F1900"><enum>(A)</enum><text>any employee who
is covered under a subsidized health plan of another employer of such employee
or of an employer of such employee’s spouse,</text>
</subparagraph><subparagraph id="H01853B6EBE5E45E78BE3A8B7F6427E9D"><enum>(B)</enum><text>any employee who
normally works less than 25 hours per week,</text>
</subparagraph><subparagraph id="H44E113913E8D4F68888BB14CB8EF00"><enum>(C)</enum><text>any employee who
normally works during not more than 6 months during any year,</text>
</subparagraph><subparagraph id="HF8AC1D305F7843268856627191D22B82"><enum>(D)</enum><text>any employee who
has not attained age 21, and</text>
</subparagraph><subparagraph id="H28412B6DAF75464AAC86A8D7B96E00E6"><enum>(E)</enum><text>except to the
extent provided in regulations, any employee who is included in a unit of
employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and the
employer.</text>
</subparagraph></paragraph><paragraph id="H4A226FC4C42C4C0BA35166BA3CD439EC"><enum>(3)</enum><header>Controlled
groups</header><text>Rules similar to the rules of subclauses (II) and (III) of
paragraph (4)(D)(iii) shall apply for purposes of paragraph (1)(A).</text>
</paragraph><paragraph id="H6D7898B798CB4D4DA08CDC5FCDA6BB5"><enum>(4)</enum><header>Employer health
plan contribution</header><text>For purposes of this section—</text>
<subparagraph id="HA8366668239F4E4AB9D7DB093C78A377"><enum>(A)</enum><header>In
General</header><text>The term <term>employer health plan contribution</term>
means the applicable premium for the employee reduced by the employee’s share
of such premium.</text>
</subparagraph><subparagraph id="H91CBB701F79D496AAA7D9DB10304C317"><enum>(B)</enum><header>Applicable
premium</header><text>Except as provided in subparagraph (D), the term
<term>applicable premium</term> means an amount which is not less than 98
percent of—</text>
<clause id="H266E8BCC3A8B4A8D9C534DFAF2D6CBB"><enum>(i)</enum><text>the
applicable premium (as defined in section 4980B(f)(4)) for the employee,
or</text>
</clause><clause id="H954CB844D0214F2DB7BC1587595BA3F"><enum>(ii)</enum><text>if
an election under subparagraph (D) is in effect with respect to an employee,
the applicable premium determined under subparagraph (D).</text>
</clause></subparagraph><subparagraph id="HE7244E69A0184A14A1CA15A13408A28B"><enum>(C)</enum><header>Employee’s
share</header><text>The term <term>employee’s share</term> means, with respect
to the applicable premium for any employee, the amount of the cost to the plan
which is paid by the similarly situated beneficiaries who are taken into
account in determining such premium for such employee.</text>
</subparagraph><subparagraph id="HF57FBA12228A4DAEB855E841CA4FBB1C"><enum>(D)</enum><header>Authority to use
age, sex, and geography in determining contribution</header>
<clause id="HB62AED607A0E48FA9343D90290A9F200"><enum>(i)</enum><header>In
General</header><text>An employer may elect to determine the applicable premium
for an employee on an actuarial basis taking into account age, sex, and
geography of the employee and similarly situated beneficiaries.</text>
</clause><clause id="H952393FF27E14C18A775DC2D90E40EE"><enum>(ii)</enum><header>Determination of
employee’s share</header><text>In the case of an employer who determines the
applicable premium under clause (i), the employee’s share of such premium shall
be the same percentage of such premium as the employee’s share of the
applicable premium determined without regard to clause (i).</text>
</clause><clause id="HED06FF377F35495D89D4EF6536978427"><enum>(iii)</enum><header>Consistency
required</header>
<subclause id="H5AF5C0403FF341A79D233CE3875FFC1C"><enum>(I)</enum><header>In
General</header><text>Except as provided in subclause (III), an employer may
determine the applicable premium under this subparagraph for any employee only
if such employer, and all other employers which are members of any controlled
group which includes such employer, elect to determine the applicable premium
under this subparagraph for all their employees.</text>
</subclause><subclause id="H20A3321616D9442CA557C1FCD6FD2BA1"><enum>(II)</enum><header>Controlled
group</header><text>All persons treated as a single employer under subsection
(a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be
treated as members of a controlled group for purposes of subclause (I).</text>
</subclause><subclause id="H74F1CED11594431EA4AAE515B359ACEE"><enum>(III)</enum><header>Treatment of
separate lines of business</header><text>If an employer is treated under
section 414(r) as operating separate lines of business during any taxable year,
subclause (I) shall not apply to employees employed in such separate lines of
business.</text>
</subclause></clause></subparagraph></paragraph></subsection><subsection id="HFA68126F3CCF4882B4B432ECAEE85983"><enum>(f)</enum><header>Special rule for
Archer MSAs and health savings account contributions</header><text>Sections
220(b)(5) and 223(b)(4) shall not apply to an employer contribution which is
excludable from gross income under subsection (a).</text>
</subsection><subsection id="HF4C4B9D6F7894CF6BB8CD57DDE06EDFC"><enum>(g)</enum><header>Exclusion
applicable in determining employment tax liability</header><text>The exclusion
under this section shall be treated for purposes of subtitle C in the same
manner as the exclusion under section
106.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H150E662DAF15428FB8E634E38D213ED"><enum>(b)</enum><header>Employer health
plan contribution To be reported on W–2</header><text>Subsection (a) of section
6051 of such Code (relating to receipts to employees) is amended by striking
<quote>and</quote> at the end of paragraph (12), by striking the period at the
end of paragraph (13) and inserting a comma, and by inserting after paragraph
(13) the following new paragraphs:</text>
<quoted-block id="H02E4D083A94E415299B6ACC7C8C1600">
<paragraph id="H6AC51C1A19C1478BB900F9C3C22B948"><enum>(14)</enum><text>the amount of the
employer health plan contribution (as defined in section 139(c)(3)), and</text>
</paragraph><paragraph id="HB0F98F7AFFCD45DE861758A9EBDE8FA2"><enum>(15)</enum><text>the amount of
compensating coverage payment (as defined in section
139(c)(1)).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HC646CE632C944B77B5F9EA243F499112"><enum>(c)</enum><header>Clerical
amendment</header><text>The table of sections for such part III is amended by
inserting after the item relating to section 139A the following new
item:</text>
<quoted-block id="H744D5C1CE33C4845B6335666736E1949" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 139B. Treatment of compensating
payments made for employees who elect not to participate in employer-subsidized
health
plans.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H44CDB28BC43F42E29321008BBCE4B17"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section><enum>VI</enum><header>Patient Access to
Information</header>
<section id="H1F084077972948C9A9AA68DC00C08CD3"><enum>601.</enum><header>Patient access
to information regarding plan coverage, managed care procedures, health care
providers, and quality of medical care</header>
<subsection id="H4FF3952619D84098809786CB3C22AD98"><enum>(a)</enum><header>In
General</header><text>Subpart 2 of part A of title XXVII of the
<act-name parsable-cite="PHSA">Public Health Service Act</act-name> is amended
by adding at the end the following new section:</text>
<quoted-block act-name="Public Health Service Act" id="H844D1D4A0B4B45C4BDF3DCEEAB35E37C">
<section id="HB0A7ACCFB82D41549D3F85B523EDFF15"><enum>2707.</enum><header>Patient access
to information regarding plan coverage, managed care procedures, health care
providers, and quality of medical care</header>
<subsection id="H820A08A42FAF4FB2B59F1DE14D007F1B"><enum>(a)</enum><header>Disclosure
requirement</header><text>Each health insurance issuer offering health
insurance coverage in connection with a group health plan shall provide the
administrator of such plan on a timely basis with the information necessary to
enable the administrator to include in the summary plan description of the plan
required under section 102 of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (or each summary plan
description in any case in which different summary plan descriptions are
appropriate under part 1 of subtitle B of title I of such Act for different
options of coverage) the information required under subsections (b), (c), (d),
and (e)(2)(A). 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.</text>
</subsection><subsection id="H3D9BA52DCB4A4925A3C05FEB618EE4EB"><enum>(b)</enum><header>Plan
benefits</header><text>The information required under subsection (a) includes
the following:</text>
<paragraph id="H8A9B33AA8C03475991A7EE50002BCD1F"><enum>(1)</enum><header>Covered items
and services</header>
<subparagraph id="H11BDA3586F6B47F400C45DDFCBD77604"><enum>(A)</enum><header>Categorization
of included benefits</header><text>A description of covered benefits,
categorized by—</text>
<clause id="H3C8B8EBCCC594604AD7FBA4EBFC8F46"><enum>(i)</enum><text>types of items and
services (including any special disease management program); and</text>
</clause><clause id="H4A804D52A57A41FA00B63BA87948E1A3"><enum>(ii)</enum><text>types of health
care professionals providing such items and services.</text>
</clause></subparagraph><subparagraph id="H460E4148345944C3B771E1D106861263"><enum>(B)</enum><header>Emergency
medical care</header><text>A description of the extent to which the coverage
includes emergency medical care (including the extent to which the coverage
provides for access to urgent care centers), and any definitions provided under
in connection with such coverage for the relevant coverage terminology
referring to such care.</text>
</subparagraph><subparagraph id="H0C41AB047C3C49C50007E77B00F34224"><enum>(C)</enum><header>Preventative
services</header><text>A description of the extent to which the coverage
includes benefits for preventative services.</text>
</subparagraph><subparagraph id="H6770D8F8D7E6460680BB55640000A03C"><enum>(D)</enum><header>Drug
formularies</header><text>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.</text>
</subparagraph><subparagraph id="HA6373E452A5C41D88C00BE3CFD3371CF"><enum>(E)</enum><header>COBRA
continuation coverage</header><text>A description of the benefits available
under the coverage provided pursuant to part 6 of subtitle B of title I of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name>.</text>
</subparagraph></paragraph><paragraph id="H04BF667F0EAF4347A7124302BE4D1888"><enum>(2)</enum><header>Limitations,
exclusions, and restrictions on covered benefits</header>
<subparagraph id="H77C724FC333E4EBF81180166483F994F"><enum>(A)</enum><header>Categorization
of excluded benefits</header><text>A description of benefits specifically
excluded from coverage, categorized by types of items and services.</text>
</subparagraph><subparagraph id="HFC3871C88D5341A3BC3BF1EAD0018C0"><enum>(B)</enum><header>Utilization
review and preauthorization requirements</header><text>Whether coverage for
medical care is limited or excluded on the basis of utilization review or
preauthorization requirements.</text>
</subparagraph><subparagraph id="HA134FF16FAB54B63AC4EB28F6E83F8C1"><enum>(C)</enum><header>Lifetime,
annual, or other period limitations</header><text>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.</text>
</subparagraph><subparagraph id="H6B105EF640744F77B84600C3DA5D86A4"><enum>(D)</enum><header>Custodial
care</header><text>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 in connection with such
coverage for custodial care.</text>
</subparagraph><subparagraph id="H06E47C748D174675A570A9E0AC11F13F"><enum>(E)</enum><header>Experimental
treatments</header><text>Whether coverage for any medical care is limited or
excluded because it constitutes experimental treatment or technology, and any
definitions provided in connection with such coverage for the relevant plan
terminology referring to such limited or excluded care.</text>
</subparagraph><subparagraph id="H7669C29C96554C1EB0DAB844BCC45307"><enum>(F)</enum><header>Medical
appropriateness or necessity</header><text>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 in connection with such coverage for the relevant coverage terminology
referring to such limited or excluded care.</text>
</subparagraph><subparagraph id="H8431C64995C7491AB8294E18B4239B2F"><enum>(G)</enum><header>Second or
subsequent opinions</header><text>A description of the circumstances under
which, and the extent to which, coverage for second or subsequent opinions is
limited or excluded.</text>
</subparagraph><subparagraph id="H37F7427B9A034D5AA14B68794500A88D"><enum>(H)</enum><header>Specialty
care</header><text>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.</text>
</subparagraph><subparagraph id="HDC0ABD0201764FC2A8A6AA1899AD2EA4"><enum>(I)</enum><header>Continuity of
care</header><text>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.</text>
</subparagraph><subparagraph id="HA0A7E38EC77B43E7B28153F8BB12275F"><enum>(J)</enum><header>Restrictions on
coverage of emergency services</header><text>A description of the circumstances
under which, and the extent to which, the coverage, in including 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 coverage.</text>
</subparagraph></paragraph></subsection><subsection id="H2382C27F5E234C33B037E100056FEBDD"><enum>(c)</enum><header>Participant’s
financial responsibilities</header><text>The information required under
subsection (a) includes an explanation of—</text>
<paragraph id="H7816D1CD059E445F83EB6F235B701729"><enum>(1)</enum><text>a participant’s
financial responsibility for payment of premiums, coinsurance, copayments,
deductibles, and any other charges; and</text>
</paragraph><paragraph id="H4ACC8CB241A9460E95A9F1CF714CB0E"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection id="H89BDD4D81F414358A243F81F04B217EA"><enum>(d)</enum><header>Accountability</header><text>The
information required under subsection (a) includes a description of the legal
recourse options available for participants and beneficiaries under the plan
including—</text>
<paragraph id="H577B60D4815C49AD00F8DCE3C88576E"><enum>(1)</enum><text>the preemption that
applies under section 514 of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1144">29 U.S.C. 1144</external-xref>) to certain
actions arising out of the provision of health benefits;</text>
</paragraph><paragraph id="H9A723D86995F466A806F3B09B4292C74"><enum>(2)</enum><text>the ability of a
participant or beneficiary (or the estate of the participant or beneficiary)
under State law to recover damages resulting from personal injury or for
wrongful death against any person in connection with the provision of
insurance, administrative services, or medical services by such person to or
for a group health plan; and</text>
</paragraph><paragraph id="H9FF30F7C93C9445AAEF2AF61E8494B2C"><enum>(3)</enum><text>the extent to
which coverage decisions made by the plan are subject to internal review or any
external review and the proper time frames under which such reviews may be
requested and conducted.</text>
</paragraph></subsection><subsection id="H7344AEB765A04B41904D5D96A3263454"><enum>(e)</enum><header>Information
available on request</header>
<paragraph id="H7151978777F64A5E9B1B2E1ECDBF9F12"><enum>(1)</enum><header>Access to plan
benefit information in electronic form</header>
<subparagraph id="H87AC6CE396FB47C2A1007CE8C43F00A4"><enum>(A)</enum><header>In
General</header><text>A group health plan (and a health insurance issuer
offering health insurance coverage in connection with a group health plan)
shall, upon written request (made not more frequently than annually), make
available to participants and beneficiaries, in a generally recognized
electronic format, the following information:</text>
<clause id="H3A9A2A73DF8B4105B26703C9AD480099"><enum>(i)</enum><text>the latest summary
plan description, including the latest summary of material modifications;
and</text>
</clause><clause id="HCB0D7F922BF0462A9EC0CD467057E430"><enum>(ii)</enum><text>the actual plan
provisions setting forth the benefits available under the plan,</text>
</clause><continuation-text continuation-text-level="subparagraph">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.</continuation-text></subparagraph><subparagraph id="H52419B0575064F89A42B1F84B7B66240"><enum>(B)</enum><header>Alternative
access</header><text>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.</text>
</subparagraph></paragraph><paragraph id="H9CC34B02DBD44C5B983444AAF5E293A0"><enum>(2)</enum><header>Additional
information to be provided on request</header>
<subparagraph id="HA5F65F4FE537435F8B1900F0AA448789"><enum>(A)</enum><header>Inclusion in
summary plan description of summary of additional information</header><text>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.</text>
</subparagraph><subparagraph id="H63B734452266487C977C7DC6D9977D5B"><enum>(B)</enum><header>Information
required from plans and issuers on request</header><text>In addition to
information required to be included in summary plan descriptions under this
subsection, a group health plan (and a health insurance issuer offering health
insurance coverage in connection with a group health plan) shall provide the
following information to a participant or beneficiary on request:</text>
<clause id="H62EB6E9DE8814612B6684788A753BF67"><enum>(i)</enum><header>Network
characteristics</header><text>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.</text>
</clause><clause id="H738396BE0B184DCEB1378EA714BE79AA"><enum>(ii)</enum><header>Care management
information</header><text>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.</text>
</clause><clause id="H37F67FCC3D174F45BEB4D2F851B16F77"><enum>(iii)</enum><header>Inclusion of
drugs and biologicals in formularies</header><text>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.</text>
</clause><clause id="HFEA7298FCF674F48BC71F27E40366DAD"><enum>(iv)</enum><header>Procedures for
determining exclusions based on medical necessity or experimental
treatments</header><text>Upon receipt by the participant or beneficiary of any
notification of an adverse coverage decision based on a determination relating
to medical necessity or an experimental treatment or technology, a description
of the procedures and medically based criteria used in such decision.</text>
</clause><clause id="HE86C7640A07B4E619709761E32C5097"><enum>(v)</enum><header>Preauthorization
and utilization review procedures</header><text>Upon receipt by the participant
or beneficiary of any notification of an adverse coverage decision, a
description of the basis on which any preauthorization requirement or any
utilization review requirement has resulted in such decision.</text>
</clause><clause id="HC3D4EC30462D4912985CCC6E35F333DD"><enum>(vi)</enum><header>Accreditation
status of health insurance issuers and service providers</header><text>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.</text>
</clause><clause id="H9CB868CED7A24C338FD7215812AEF787"><enum>(vii)</enum><header>Measures of
enrollee satisfaction</header><text>The latest information (if any) maintained
by the plan, or by any health insurance issuer offering health insurance
coverage in connection with the plan, relating to enrollee satisfaction.</text>
</clause><clause id="HF676C614B5A14687A8A350D601EDB1FF"><enum>(viii)</enum><header>Quality
performance measures</header><text>The latest information (if any) maintained
by the plan, or by any health insurance issuer offering health insurance
coverage in connection with the plan, relating to quality of performance of the
delivery of medical care with respect to coverage options offered under the
plan and of health care professionals and facilities providing medical care
under the plan.</text>
</clause></subparagraph><subparagraph id="HCC79CAE740C54603A69D66F9E3DA5BC"><enum>(C)</enum><header>Information
required from health care professionals on request</header><text>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.</text>
</subparagraph><subparagraph id="H3AEBE28D5FA541E9B43EE362693DD795"><enum>(D)</enum><header>Information
required from health care facilities on request</header><text>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.</text>
</subparagraph></paragraph></subsection><subsection id="H6136A957BF4B4C8800108C5BD4ED06F"><enum>(f)</enum><header>Access to
information relevant to the coverage options under which the participant or
beneficiary is eligible To enroll</header><text>In addition to information
otherwise required to be made available under this section, a group health plan
(and a health insurance issuer offering health insurance coverage in connection
with a group health plan) shall, upon written request (made not more frequently
than annually), make available to a participant (and an employee who, under the
terms of the plan, is eligible for coverage but not enrolled) in connection
with a period of enrollment the summary plan description for any coverage
option under the plan under which the participant is eligible to enroll and any
information described in clauses (i), (ii), (iii), (vi), (vii), and (viii) of
subsection (e)(2)(B).</text>
</subsection><subsection id="H5452CE9A738B410CB71F842222F2BBC0"><enum>(g)</enum><header>Advance notice
of changes in drug formularies</header><text>Not later than 30 days before the
effective 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—</text>
<paragraph id="HE179BA7FBC214EEF8D3D09FFEA2EE265"><enum>(1)</enum><text>by inclusion of
information in publications broadly distributed by plan sponsors, employers, or
employee organizations;</text>
</paragraph><paragraph id="H43185FB99F004C68B94D8D00DBECAAF"><enum>(2)</enum><text>by electronic means
of communication (including the Internet or proprietary computer networks in a
format which is readily accessible to participants);</text>
</paragraph><paragraph id="HC19D045C621D492600FA8C0842075EBB"><enum>(3)</enum><text>by timely
informing participants who, under an ongoing program maintained under the plan,
have submitted their names for such notification; or</text>
</paragraph><paragraph id="H4E7FF41802C14989A78309A6B100949E"><enum>(4)</enum><text>by any other
reasonable means of timely informing plan
participants.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="H443F03729F9D41129998BFE1374B4B1C"><enum>602.</enum><header>Effective
date</header>
<subsection id="H732D12023010449583ECBFF550B0E629"><enum>(a)</enum><header>In
General</header><text>The amendments made by section 601 shall apply with
respect to plan years beginning on or after January 1 of the second calendar
year following the date of the enactment of this Act. The Secretary shall first
issue all regulations necessary to carry out the amendments made by section 601
before such date.</text>
</subsection><subsection id="H1399AA3D87B24DF6B4C8AFA8CDF62FF"><enum>(b)</enum><header>Limitation on
enforcement actions</header><text>No enforcement action shall be taken,
pursuant to the amendments made by section 601, 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.</text>
</subsection></section>