1.This Act may be cited as
the Small Business Health Plans Act of
2008
.
<enum>I</enum><header>Enhanced
marketplace pools</header>
<section id="IDC3BAA7ABDE704F5E87B17AA7732F6E74"><enum>101.</enum><header>Rules
governing enhanced marketplace pools</header>
<subsection id="ID3D540A27D6C5497190D5E15D7056C63B"><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="ID667C01FA746D4037B396461C7925E63B">
<part id="IDCCE0871241AD4B2D83F6ACE3E8A5F4D4"><enum>8</enum><header>Rules governing
enhanced marketplace pools</header>
<section id="id53AD2183E8434E5FAE078E0E40EF305C"><enum>801.</enum><header>Small business
health plans</header>
<subsection id="IDCA2F42F41DDB4C4D9BA83B2B1DF86AB2"><enum>(a)</enum><header>In
general</header><text>For purposes of this part, the term <term>small business
health plan</term> means a fully insured group health plan whose sponsor is (or
is deemed under this part to be) described in subsection (b).</text>
</subsection><subsection id="ID5D85C782393C485C821D747BC1B53390"><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="ID938546BA7F814B6E9080B439CFBB25CE"><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 section 1381 of the Internal Revenue Code of 1986)), for substantial
purposes other than that of obtaining medical care;</text>
</paragraph><paragraph id="ID41B3ADA98AF94F06ABE46A8DDB33C0B0"><enum>(2)</enum><text>is established as
a permanent entity which receives the active support of its members and
requires for membership payment on a periodic basis of dues or payments
necessary to maintain eligibility for membership;</text>
</paragraph><paragraph id="ID853D2F2D2E0342C98E22CF2CB5A994BA"><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; and</text>
</paragraph><paragraph id="idA63D185E87F54092A35E890BF3D63DA1"><enum>(4)</enum><text>does not
condition membership on the basis of a minimum group size.</text>
</paragraph><continuation-text continuation-text-level="subsection">Any
sponsor consisting of an association of entities which meet the requirements of
paragraphs (1), (2), (3), and (4) shall be deemed to be a sponsor described in
this subsection.</continuation-text></subsection></section><section id="ID7695a17a578d47d380d812b8d9332139"><enum>802.</enum><header>Alternative
Market Pooling Organizations</header>
<subsection id="ID8f5d77fe4ad1443a9d1fe5c112194840"><enum>(a)</enum><header>In
general</header><text>The Secretary, not later than 1 year after the date of
enactment of this part, shall promulgate regulations that apply the rules and
standards of this part, as necessary, to circumstances in which a pooling
entity other (hereinafter <quote>Alternative Market Pooling
Organizations</quote>) is not made up principally of employers and their
employees, or not a professional organization or such small business health
plan entity identified in section 801.</text>
</subsection><subsection id="ID6b319e069bc04c99aba21b526d408059"><enum>(b)</enum><header>Adaption of
standards</header><text>In developing and promulgating regulations pursuant to
subsection (a), the Secretary, in consultation with the Secretary of Health and
Human Services, small business health plans, small and large employers, large
and small insurance issuers, consumer representatives, and state insurance
commissioners, shall—</text>
<paragraph id="idC1E4E889D04D4054A8F959C3CA4D66BF"><enum>(1)</enum><text>adapt the
standards of this part, to the maximum degree practicable, to assure balanced
and comparable oversight standards for both small business health plans and
alternative market pooling organizations;</text>
</paragraph><paragraph id="ID15fe9863c9ba41cfadbc059dc8a3de64"><enum>(2)</enum><text>permit the
participation as alternative market pooling organizations unions, churches and
other faith-based organizations, or other organizations composed of individuals
and groups which may have little or no association with employment, provided
however, that such alternative market pooling organizations meet, and continue
meeting on an ongoing basis, to satisfy standards, rules, and requirements
materially equivalent to those set forth in this part with respect to small
business health plans;</text>
</paragraph><paragraph id="id231C411F42CA45D69267CE6C6D5E3CD5"><enum>(3)</enum><text>conduct periodic
verification of such compliance by alternative market pooling organizations, in
consultation with the Secretary of Health and Human Services and the National
Association of Insurance Commissioners, except that such periodic verification
shall not materially impede market entry or participation as pooling entities
comparable to that of small business health plans;</text>
</paragraph><paragraph id="ID9fa91ffa70484050a7b34cc81190c826"><enum>(4)</enum><text>assure that
consistent, clear, and regularly monitored standards are applied with respect
to alternative market pooling organizations to avert material risk-selection
within or among the composition of such organizations;</text>
</paragraph><paragraph id="ID7ce53dc804aa48c49d0c485d6c407fe3"><enum>(5)</enum><text>the expedited and
deemed certification procedures provided in section 805(d) shall not apply to
alternative market pooling organizations until sooner of the promulgation of
regulations under this subsection or the expiration of one year following
enactment of this Act; and</text>
</paragraph><paragraph id="idA0069CF94BA742B2BE873EF62683C3E0"><enum>(6)</enum><text>make such other
appropriate adjustments to the requirements of this part as the Secretary may
reasonably deem appropriate to fit the circumstances of an individual
alternative market pooling organization or category of such organization,
including but not limited to the application of the membership payment
requirements of section 801(b)(2) to alternative market pooling organizations
composed primarily of church- or faith-based membership.</text>
</paragraph></subsection></section><section id="ID7D23027FA7EC4872B8C23051E85A466D"><enum>803.</enum><header>Certification
of small business health plans</header>
<subsection id="ID72CAF9D3118F4B8F87A4D54846DF7F00"><enum>(a)</enum><header>In
general</header><text>Not later than 6 months after the date of enactment of
this part, the applicable authority shall prescribe by interim final rule a
procedure under which the applicable authority shall certify small business
health plans which apply for certification as meeting the requirements of this
part.</text>
</subsection><subsection id="ID5953A00229B049E790EB6C2C4E9BC5D1"><enum>(b)</enum><header>Requirements
applicable to certified plans</header><text>A small business 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="ID476B864211674A0FA9EF8BE8D9D807D4"><enum>(c)</enum><header>Requirements
for continued certification</header><text>The applicable authority may provide
by regulation for continued certification of small business health plans under
this part. Such regulation shall provide for the revocation of a certification
if the applicable authority finds that the small business health plan involved
is failing to comply with the requirements of this part.</text>
</subsection><subsection id="IDF7F0288C8F974621A60E30E705DC2F1B"><enum>(d)</enum><header>Expedited and
deemed certification</header>
<paragraph id="idE87AB197F4B84873B5A79EC3D8D832DE"><enum>(1)</enum><header>In
general</header><text>If the Secretary fails to act on an application for
certification under this section within 90 days of receipt of such application,
the applying small business health plan shall be deemed certified until such
time as the Secretary may deny for cause the application for
certification.</text>
</paragraph><paragraph id="idF8295EA2363947D9BA5E7D4F9B771BE7"><enum>(2)</enum><header>Civil
penalty</header><text>The Secretary may assess a civil penalty against the
board of trustees and plan sponsor (jointly and severally) of a small business
health plan that is deemed certified under paragraph (1) of up to $500,000 in
the event the Secretary determines that the application for certification of
such small business health plan was willfully or with gross negligence
incomplete or inaccurate.</text>
</paragraph></subsection></section><section id="IDEF097364FAC644A5BC209200F2C8FD51"><enum>804.</enum><header>Requirements
relating to sponsors and boards of trustees</header>
<subsection id="ID4FEC6C034C984FF394355C3A358F34CB"><enum>(a)</enum><header>Sponsor</header><text>The
requirements of this subsection are met with respect to a small business 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="ID62C08F3C0E874ACBA255DD23EB78BD27"><enum>(b)</enum><header>Board of
trustees</header><text>The requirements of this subsection are met with respect
to a small business health plan if the following requirements are met:</text>
<paragraph id="IDDDFFF20BF3CF48ECAF5F69FC022B7038"><enum>(1)</enum><header>Fiscal
control</header><text>The plan is operated, pursuant to a plan document, by a
board of trustees which pursuant to a trust agreement has complete fiscal
control over the plan and which is responsible for all operations of the
plan.</text>
</paragraph><paragraph id="IDE960A2BD26114D2EA9AA1BDFCC8549CD"><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="ID72936FAC5E554B08B6D67CC5FF6B7F7F"><enum>(3)</enum><header>Rules governing
relationship to participating employers and to contractors</header>
<subparagraph id="ID3F1C066FDAD344A6BCEEA32150454716"><enum>(A)</enum><header>Board
membership</header>
<clause id="ID62A3D4B54F0C465BBB12376C5D8FEA68"><enum>(i)</enum><header>In
general</header><text>Except as provided in clauses (ii) and (iii), the members
of the board of trustees are individuals selected from individuals who are the
owners, officers, directors, or employees of the participating employers or who
are partners in the participating employers and actively participate in the
business.</text>
</clause><clause commented="no" id="ID28E59340248040539D38CD38EF5A0264"><enum>(ii)</enum><header>Limitation</header>
<subclause commented="no" id="ID4928772F06354C08B850438E517F47FA"><enum>(I)</enum><header>General
rule</header><text>Except as provided in subclauses (II) and (III), no such
member is an owner, officer, director, or employee of, or partner in, a
contract administrator or other service provider to the plan.</text>
</subclause><subclause commented="no" id="IDF2C4B0DE3DD24C96B2F98FC67E51A3C1"><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>
</subclause><subclause commented="no" id="ID679DBE25E5FE4850853A5D6FBB5F7538"><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,
subclause (I) shall not apply in the case of any service provider described in
subclause (I) who is a provider of medical care under the plan.</text>
</subclause></clause><clause commented="no" id="ID3D5508CF36B442428DB96A052F5EEC74"><enum>(iii)</enum><header>Certain plans
excluded</header><text>Clause (i) shall not apply to a small business health
plan which is in existence on the date of the enactment of the
<short-title>Small Business Health Plans Act of 2008</short-title>.</text>
</clause></subparagraph><subparagraph id="IDBB5C3D5687914D19BFF65AC2BFA0C98E"><enum>(B)</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
insurers.</text>
</subparagraph></paragraph></subsection><subsection id="ID307D4AF3F2D14812925CDEBF77592A1E"><enum>(c)</enum><header>Treatment of
franchises</header><text>In the case of a group health plan which is
established and maintained by a franchiser for a franchisor or for its
franchisees—</text>
<paragraph id="ID1DEC1AC477D74E5BA3186FF001F4E3D3"><enum>(1)</enum><text>the requirements
of subsection (a) and section 801(a) shall be deemed met if such requirements
would otherwise be met if the franchisor were deemed to be the sponsor referred
to in section 801(b) and each franchisee were deemed to be a member (of the
sponsor) referred to in section 801(b); and</text>
</paragraph><paragraph id="IDE0C7136EA0BF490C8A89829BE0D70CA2"><enum>(2)</enum><text>the requirements
of section 804(a)(1) shall be deemed met.</text>
</paragraph><continuation-text continuation-text-level="subsection">For
purposes of this subsection the terms <quote>franchisor</quote> and
<quote>franchisee</quote> shall have the meanings given such terms for purposes
of sections 436.2(a) through 436.2(c) of title 16, Code of Federal Regulations
(including any such amendments to such regulation after the date of enactment
of this part).</continuation-text></subsection></section><section id="IDD179266A83AC43549CA1004EB035490A"><enum>805.</enum><header>Participation
and coverage requirements</header>
<subsection id="IDD568E57281E94B178F3EEA1C9C559AD8"><enum>(a)</enum><header>Covered
employers and individuals</header><text>The requirements of this subsection are
met with respect to a small business health plan if, under the terms of the
plan—</text>
<paragraph id="ID17AA46D9DEFD4DF882D0C6B21B3DE84B"><enum>(1)</enum><text>each
participating employer must be—</text>
<subparagraph id="ID53DF185BA1F84CE49AEB7DB8A85C47FB"><enum>(A)</enum><text>a member of the
sponsor;</text>
</subparagraph><subparagraph id="ID014398C15B65462AA5D8AE0D2E9B95AF"><enum>(B)</enum><text>the sponsor;
or</text>
</subparagraph><subparagraph id="ID18ACA334A9534C14BF2A60084983C29F"><enum>(C)</enum><text>an affiliated
member of the sponsor, 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</text>
</subparagraph></paragraph><paragraph id="ID4DFFCFD05C2243998AC8A8C4F6331BD3"><enum>(2)</enum><text>all individuals
commencing coverage under the plan after certification under this part must
be—</text>
<subparagraph id="IDA969572145CE4BB8A2F80EB518FDA39C"><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="IDA602591A25144F57A0134FCA66553282"><enum>(B)</enum><text>the dependents of
individuals described in subparagraph (A).</text>
</subparagraph></paragraph></subsection><subsection id="IDE016A054C8714D5EBA9C608BC08E3D85"><enum>(b)</enum><header>Individual
market unaffected</header><text>The requirements of this subsection are met
with respect to a small business 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="ID44DB19B5E3834582856F23409FC79FA9"><enum>(c)</enum><header>Prohibition of
discrimination against employers and employees eligible To
participate</header><text>The requirements of this subsection are met with
respect to a small business health plan if—</text>
<paragraph id="IDB8F46634428749FC952504F4E24A068B"><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="ID1966AA2394D34FF580EC1A4E8CCFD54A"><enum>(2)</enum><text>information
regarding all coverage options available under the plan is made readily
available to any employer eligible to participate; and</text>
</paragraph><paragraph id="IDE217FA9D68B64E87BFD54B0ED04211A1"><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="ID6F3FFBD0EFDA41CD89ABEB41A7452645"><enum>806.</enum><header>Other
requirements relating to plan documents, contribution rates, and benefit
options</header>
<subsection id="IDB5A36F92073C47C68EC44502FA695570"><enum>(a)</enum><header>In
general</header><text>The requirements of this section are met with respect to
a small business health plan if the following requirements are met:</text>
<paragraph id="IDA3CF16C594F84D9F8083C7B427B6AF70"><enum>(1)</enum><header>Contents of
governing instruments</header>
<subparagraph id="id57BAA461B7DD42E08D86FA6B00A19534"><enum>(A)</enum><header>In
general</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>
<clause id="ID16D82F1734D44787A6FE5D887A6ACD3C"><enum>(i)</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)); and</text>
</clause><clause id="IDB9DCB21E9549435DBCCD87A606459152"><enum>(ii)</enum><text>provides that
the sponsor of the plan is to serve as plan sponsor (referred to in section
3(16)(B)).</text>
</clause></subparagraph><subparagraph id="idC9CAB86DF0874E2BB308D99D3B727B05"><enum>(B)</enum><header>Description of
material provisions</header><text>The terms of the health insurance coverage
(including the terms of any individual certificates that may be offered to
individuals in connection with such coverage) describe the material benefit and
rating, and other provisions set forth in this section and such material
provisions are included in the summary plan description.</text>
</subparagraph></paragraph><paragraph id="IDBC0AEAE6C275489BACE818DB163E6452"><enum>(2)</enum><header>Contribution
rates must be nondiscriminatory</header>
<subparagraph id="ID799CD91B86F64C99B2C41D049848473A"><enum>(A)</enum><header>In
general</header><text>The contribution rates for any participating small
employer shall not vary on the basis of any health status-related factor in
relation to employees of such employer or their beneficiaries and shall not
vary on the basis of the type of business or industry in which such employer is
engaged, subject to subparagraph (B) and the terms of this title.</text>
</subparagraph><subparagraph id="ID8CD9839E883248CCAC9468A29905C7E5"><enum>(B)</enum><header>Effect of
title</header><text>Nothing in this title or any other provision of law shall
be construed to preclude a health insurance issuer offering health insurance
coverage in connection with a small business health plan that meets the
requirements of this part, and at the request of such small business health
plan, from—</text>
<clause id="IDe488300d5bd745d4bfecbaa811514842"><enum>(i)</enum><text>setting
contribution rates for the small business health plan based on the claims
experience of the small business health plan so long as any variation in such
rates for participating small employers complies with the requirements of
clause (ii), except that small business health plans shall not be subject, in
non-adopting states, to subparagraphs (A)(ii) and (C) of section 2912(a)(2) of
the Public Health Service Act, and in adopting states, to any State law that
would have the effect of imposing requirements as outlined in such
subparagraphs (A)(ii) and (C); or</text>
</clause><clause id="ID8677389fd71c43688ba1d847b6c5dbfd"><enum>(ii)</enum><text>varying
contribution rates for participating small employers in a small business health
plan in a State to the extent that such rates could vary using the same
methodology employed in such State for regulating small group premium rates,
subject to the terms of part I of subtitle A of title XXIX of the Public Health
Service Act (relating to rating requirements), as added by title II of the
<short-title>Small Business Health Plans Act of 2008</short-title>.</text>
</clause></subparagraph></paragraph><paragraph id="idB83A689918FE436A8D125BF2A86AF6DD"><enum>(3)</enum><header>Exceptions
regarding self-employed and large employers</header>
<subparagraph id="id0B8CDED486B24A61BE53AAE494BBDBDE"><enum>(A)</enum><header>Self
employed</header>
<clause id="ID5ad77e3575e64eeb9be66d98f507e370"><enum>(i)</enum><header>In
general</header><text>Small business health plans with participating employers
who are self-employed individuals (and their dependents) shall enroll such
self-employed participating employers in accordance with rating rules that do
not violate the rating rules for self-employed individuals in the State in
which such self-employed participating employers are located.</text>
</clause><clause id="IDf4637e49ce884fe6ac191e520101a36a"><enum>(ii)</enum><header>Guarantee
issue</header><text>Small business health plans with participating employers
who are self-employed individuals (and their dependents) may decline to
guarantee issue to such participating employers in States in which guarantee
issue is not otherwise required for the self-employed in that State.</text>
</clause></subparagraph><subparagraph id="IDf864fc14833145d8ba867463d03356a8"><enum>(B)</enum><header>Large
employers</header><text>Small business health plans with participating
employers that are larger than small employers (as defined in section
808(a)(10)) shall enroll such large participating employers in accordance with
rating rules that do not violate the rating rules for large employers in the
State in which such large participating employers are located.</text>
</subparagraph></paragraph><paragraph id="ID2C368B13AD1548099D7C75E89A8CC7EE"><enum>(4)</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.</text>
</paragraph></subsection><subsection id="IDE34F0CC698F04DECBE05F74BAB7E201E"><enum>(b)</enum><header>Ability of
small business health plans To design benefit options</header><text>Nothing in
this part or any provision of State law (as defined in section 514(c)(1)) shall
be construed to preclude a small business health plan or a health insurance
issuer offering health insurance coverage in connection with a small business
health plan from exercising its sole discretion in selecting the specific
benefits and services consisting of medical care to be included as benefits
under such plan or coverage, except that such benefits and services must meet
the terms and specifications of part II of subtitle A of title XXIX of the
Public Health Service Act (relating to lower cost plans), as added by title II
of the <short-title>Small Business Health Plans Act of
2008</short-title>.</text>
</subsection><subsection id="id39C88C60837843A8BF72432E8F7279B2"><enum>(c)</enum><header>Domicile and
non-domicile States</header>
<paragraph id="id341C6753A2D64BDEA7AEAB37B40F0420"><enum>(1)</enum><header>Domicile
state</header><text>Coverage shall be issued to a small business health plan in
the State in which the sponsor's principal place of business is located.</text>
</paragraph><paragraph id="id68AFAF0486F24317BD5792AAE3AB3B01"><enum>(2)</enum><header>Non-domicile
states</header><text>With respect to a State (other than the domicile State) in
which participating employers of a small business health plan are located but
in which the insurer of the small business health plan in the domicile State is
not yet licensed, the following shall apply:</text>
<subparagraph id="id48554C7B993846C884F8E6F67F5D6726"><enum>(A)</enum><header>Temporary
preemption</header><text>If, upon the expiration of the 90-day period following
the submission of a licensure application by such insurer (that includes a
certified copy of an approved licensure application as submitted by such
insurer in the domicile State) to such State, such State has not approved or
denied such application, such State's health insurance licensure laws shall be
temporarily preempted and the insurer shall be permitted to operate in such
State, subject to the following terms:</text>
<clause id="idFC615C2848D141BDB246D98C4DB82C9D"><enum>(i)</enum><header>Application of
non-domicile State law</header><text>Except with respect to licensure and with
respect to the terms of subtitle A of title XXIX of the Public Health Service
Act (relating to rating and benefits as added by the <short-title>Small
Business Health Plans Act of 2008</short-title>), the laws and authority of the
non-domicile State shall remain in full force and effect.</text>
</clause><clause id="id1807C9550AF1457A873EBCF79497C6B7"><enum>(ii)</enum><header>Revocation of
preemption</header><text>The preemption of a non-domicile State's health
insurance licensure laws pursuant to this subparagraph, shall be terminated
upon the occurrence of either of the following:</text>
<subclause id="idFD98FFFFE61C4B9492F25A9E9D1BBCB0"><enum>(I)</enum><header>Approval or
denial of application</header><text>The approval of denial of an insurer's
licensure application, following the laws and regulations of the non-domicile
State with respect to licensure.</text>
</subclause><subclause id="id340446A22FC84038B729346D0E188CDE"><enum>(II)</enum><header>Determination
of material violation</header><text>A determination by a non-domicile State
that an insurer operating in a non-domicile State pursuant to the preemption
provided for in this subparagraph is in material violation of the insurance
laws (other than licensure and with respect to the terms of subtitle A of title
XXIX of the Public Health Service Act (relating to rating and benefits added by
the <short-title>Small Business Health Plans Act of 2008</short-title>)) of
such State.</text>
</subclause></clause></subparagraph><subparagraph id="idA746AA6FE23C4E56A55760F037D92DCE"><enum>(B)</enum><header>No prohibition
on promotion</header><text>Nothing in this paragraph shall be construed to
prohibit a small business health plan or an insurer from promoting coverage
prior to the expiration of the 90-day period provided for in subparagraph (A),
except that no enrollment or collection of contributions shall occur before the
expiration of such 90-day period.</text>
</subparagraph><subparagraph id="ID49920b8d1c6347ceb3b392e45ab9e8ff"><enum>(C)</enum><header>licensure</header><text>Except
with respect to the application of the temporary preemption provision of this
paragraph, nothing in this part shall be construed to limit the requirement
that insurers issuing coverage to small business health plans shall be licensed
in each State in which the small business health plans operate.</text>
</subparagraph><subparagraph id="ID3b0c70049cf94ddb8ba95009138d990f"><enum>(D)</enum><header>Servicing by
licensed insurers</header><text>Notwithstanding subparagraph (C), the
requirements of this subsection may also be satisfied if the participating
employers of a small business health plan are serviced by a licensed insurer in
that State, even where such insurer is not the insurer of such small business
health plan in the State in which such small business health plan is
domiciled.</text>
</subparagraph></paragraph></subsection></section><section id="IDE9DFF143F75A4EBE94F1DCF10BF13424"><enum>807.</enum><header>Requirements
for application and related requirements</header>
<subsection id="ID9ED049C6D01D40769D172C06D6B49E70"><enum>(a)</enum><header>Filing
fee</header><text>Under the procedure prescribed pursuant to section 802(a), a
small business 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 small business health
plans.</text>
</subsection><subsection id="ID6D5A7B5EAE584E55BF4E774258C8AF6D"><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 by regulation, at least the following information:</text>
<paragraph id="ID8EFF544CCE2542C4A371C59C22BA1CCF"><enum>(1)</enum><header>Identifying
information</header><text>The names and addresses of—</text>
<subparagraph id="ID44CC0DBCB2734F3DBD9A72E46BF90079"><enum>(A)</enum><text>the sponsor;
and</text>
</subparagraph><subparagraph id="ID947D8418D419477AAA219BFB1DF700EC"><enum>(B)</enum><text>the members of
the board of trustees of the plan.</text>
</subparagraph></paragraph><paragraph id="ID1B7EB5B5370E4D36A26E51A13206935A"><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="IDE599E73B382E4426BCE43248779CDD91"><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="ID96C645B23B194B73AAC38E9300A305BF"><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="ID8118501FFD414D709E8B2EEADA9C671F"><enum>(5)</enum><header>Agreements with
service providers</header><text>A copy of any agreements between the plan,
health insurance issuer, and contract administrators and other service
providers.</text>
</paragraph></subsection><subsection id="ID58D3C63557C048F7B97DAF05DD04141F"><enum>(c)</enum><header>Filing notice
of certification with States</header><text>A certification granted under this
part to a small business health plan shall not be effective unless written
notice of such certification is filed with the applicable State authority of
each State in which the small business health plans operate.</text>
</subsection><subsection id="ID870959A989F24F06A8A81C537F3CA674"><enum>(d)</enum><header>Notice of
material changes</header><text>In the case of any small business health plan
certified under this part, descriptions of material changes in any information
which was required to be submitted with the application for the certification
under this part shall be filed in such form and manner as shall be prescribed
by the applicable authority by regulation. The applicable authority may require
by regulation prior notice of material changes with respect to specified
matters which might serve as the basis for suspension or revocation of the
certification.</text>
</subsection></section><section commented="no" id="ID283511EA75524C769BEC0ECCCCDF35E4"><enum>808.</enum><header>Notice
requirements for voluntary termination</header><text display-inline="no-display-inline">A small business health plan which is or has
been certified under this part may terminate (upon or at any time after
cessation of accruals in benefit liabilities) only if the board of trustees,
not less than 60 days before the proposed termination date—</text>
<paragraph commented="no" id="ID5B8D7C3B9C3F4DA0B7552D1FE60A0D5B"><enum>(1)</enum><text>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 commented="no" id="ID9B6B4C34ECBC4C1D99B47F6EB9148013"><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 commented="no" id="ID40D63051A1D64004B763187E62F9A946"><enum>(3)</enum><text>submits such plan
in writing to the applicable authority.</text>
</paragraph><continuation-text commented="no" 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.</continuation-text></section><section id="IDe747b8b516604c5fb4bbe7ea1dec9700"><enum>809.</enum><header>Implementation
and application authority by Secretary</header><text display-inline="no-display-inline">The Secretary shall, through promulgation
and implementation of such regulations as the Secretary may reasonably
determine necessary or appropriate, and in consultation with a balanced
spectrum of effected entities and persons, modify the implementation and
application of this part to accommodate with minimum disruption such changes to
State or Federal law provided in this part and the (and the amendments made by
such Act) or in regulations issued thereto.</text>
</section><section id="ID5772AD863399454399B25B25E521BFB5"><enum>810.</enum><header>Definitions
and rules of construction</header>
<subsection id="ID885A0D2B3D0D488F9FCBE6CF5DEF2641"><enum>(a)</enum><header>Definitions</header><text>For
purposes of this part—</text>
<paragraph id="ID3BB67D17F3824D3BAA524CAB9FC11BC0"><enum>(1)</enum><header>Affiliated
member</header><text>The term <term>affiliated member</term> means, in
connection with a sponsor—</text>
<subparagraph id="IDACD54D76F750434AAA5E5077AE9657CD"><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, or</text>
</subparagraph><subparagraph id="IDEE846C4550224AD68056602F256EFFEB"><enum>(B)</enum><text>in the case of a
sponsor with members which consist of associations, a person who is a member or
employee of any such association and elects an affiliated status with the
sponsor.</text>
</subparagraph></paragraph><paragraph id="id2173D8D3AEDF40FC8D2EADB32087FF63"><enum>(2)</enum><header>Applicable
authority</header><text>The term <term>applicable authority</term> means the
Secretary of Labor, except that, in connection with any exercise of the
Secretary's authority with respect to which the Secretary is required under
section 506(d) to consult with a State, such term means the Secretary, in
consultation with such State.</text>
</paragraph><paragraph id="IDD7BCEA90CB0041A1B50DB18E50DE8891"><enum>(3)</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="ID0F9798D9876640219F7198F71C831B3C"><enum>(4)</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="IDE69E53F7D509459CA04C75D2D8E0590F"><enum>(5)</enum><header>Health
insurance coverage</header><text>The term <term>health insurance
coverage</term> has the meaning provided in section 733(b)(1), except that such
term shall not include excepted benefits (as defined in section 733(c)).</text>
</paragraph><paragraph id="ID92F7C40FB24C49CEAB400CB062860C2A"><enum>(6)</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="ID5EF096793B264668AB45DAC0CFD75B21"><enum>(7)</enum><header>Individual
market</header>
<subparagraph id="ID2B396EA753364D4DBCDF938C60EF7F2A"><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="IDB9E6704758794DF998C9CBF2F55BDC20"><enum>(B)</enum><header>Treatment of
very small groups</header>
<clause id="IDA9AAC49077C7488E9D6248BC54E7E2AC"><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="ID956A1A31CE0647C1AA1CA68D1ADC5EB6"><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="IDBCA750E49EE84471AE6EEFA2D8BA08AA"><enum>(8)</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="IDB90281BEBF724984A4445383F85BF508"><enum>(9)</enum><header>Participating
employer</header><text>The term <term>participating employer</term> means, in
connection with a small business 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="ID45F2D9B907A6492D857D9C1E0F0F969A"><enum>(10)</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, a small
employer as defined in section 2791(e)(4).</text>
</paragraph><paragraph id="id667669DCEAB1481B9185112DB9FDD295"><enum>(11)</enum><header>Trade
association and professional association</header><text>The terms <term>trade
association</term> and <term>professional association</term> mean an entity
that meets the requirements of section 1.501(c)(6)–1 of title 26, Code of
Federal Regulations (as in effect on the date of enactment of this Act).</text>
</paragraph></subsection><subsection id="ID7B6578BAE1094DA79450A72CD889C0E1"><enum>(b)</enum><header>Rule of
construction</header><text>For purposes of determining whether a plan, fund, or
program is an employee welfare benefit plan which is a small business 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>
<paragraph id="ID0f1348f4110d4e7984aae4efb3382b5e"><enum>(1)</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>
</paragraph><paragraph id="ID2c1205da77864701a847cd767cee1818"><enum>(2)</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>
</paragraph></subsection><subsection id="ID43ea75c054a34d6f816798b719a0d940"><enum>(c)</enum><header>Renewal</header><text>Notwithstanding
any provision of law to the contrary, a participating employer in a small
business health plan shall not be deemed to be a plan sponsor in applying
requirements relating to coverage renewal.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id40A52E18064B43168A20E661973CD8D2"><enum>(d)</enum><header>Health savings
accounts</header><text display-inline="yes-display-inline">Nothing in this part
shall be construed to create any mandates for coverage of benefits for
HSA-qualified health plans that would require reimbursements in violation of
section 223(c)(2) of the Internal Revenue Code of
1986.</text>
</subsection></section></part><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" id="ID1094A5B5ED4C4634AD340CBA0ED1CC15"><enum>(b)</enum><header>Conforming
amendments to preemption rules</header>
<paragraph commented="no" id="IDF7E98E1A94884E05907576E856B8DC30"><enum>(1)</enum><text>Section 514(b)(6)
of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1144(b)(6)">29 U.S.C. 1144(b)(6)</external-xref>) is
amended by adding at the end the following new subparagraph:</text>
<quoted-block id="ID40AC1975CAD3437CAA0907B39EFD7A0D">
<subparagraph commented="no" id="ID8F41C6B6ECE144F1837578352F46D42B" 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 a small
business health plan which is certified under part
8.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="ID1FDE42A56E0F4C39B248DCEC3342EABA"><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 commented="no" id="ID0893113A7A2549B5A46414EC55A237E4"><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 commented="no" id="IDC4FD93BE8BDB45E182F1A8A8B473AA68"><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 commented="no" id="IDCE50B07515D84D639D11B4E180267A32"><enum>(C)</enum><text>by redesignating
subsection (d) as subsection (e); and</text>
</subparagraph><subparagraph commented="no" id="ID774B0175C4C84DA096E7FDFB8BBF3993"><enum>(D)</enum><text>by inserting
after subsection (c) the following new subsection:</text>
<quoted-block id="ID3F595AEBD0364021A4FF8A58C94A445F">
<subsection commented="no" id="IDC58ACF37630140E9A6E95E92D725D099"><enum>(d)</enum><paragraph commented="no" display-inline="yes-display-inline" id="IDA8CB16A9CB834C2C829E2D05328891AA"><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 a health insurance
issuer from offering health insurance coverage in connection with a small
business health plan which is certified under part 8.</text>
</paragraph><paragraph commented="no" id="IDD60070E3EBE34F8B9A480765B5B2EE08" indent="up1"><enum>(2)</enum><text>In any case in which health insurance
coverage of any policy type is offered under a small business 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 establish rating and benefit requirements that would otherwise
apply to such coverage, provided the requirements of subtitle A of title XXIX
of the Public Health Service Act (as added by title II of the Health Insurance
Marketplace Modernization and Affordability Act of 2007) (concerning health
plan rating and benefits) are
met.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection commented="no" id="ID44BBA82AB8484ED9AF6BAAE0946FC68E"><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(16)(B)">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 a
small business health plan under part 8.</quote>.</text>
</subsection><subsection commented="no" id="ID8C607D036ACF4986B55CA7B3E122EDE4"><enum>(d)</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="IDC4D7320BD42F4058B56E99B4A713053B"><enum>(e)</enum><header>Clerical
amendment</header><text>The table of contents in
<external-xref legal-doc="act" parsable-cite="ERISA/1">section
1</external-xref> 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="IDBF1452A94B4244F58AA21153937ED829" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="part">Part 8—Rules governing small business health
plans</toc-entry>
<toc-entry level="section">801. Small business health
plans.</toc-entry>
<toc-entry bold="off" level="section">802. Alternative market pooling
organizations.</toc-entry>
<toc-entry level="section">803. Certification of small business
health plans.</toc-entry>
<toc-entry level="section">804. Requirements relating to sponsors and
boards of trustees.</toc-entry>
<toc-entry level="section">805. Participation and coverage
requirements.</toc-entry>
<toc-entry level="section">806. Other requirements relating to plan
documents, contribution rates, and benefit options.</toc-entry>
<toc-entry level="section">807. Requirements for application and
related requirements.</toc-entry>
<toc-entry level="section">808. Notice requirements for voluntary
termination.</toc-entry>
<toc-entry bold="off" level="section">809. Implementation and
application authority by Secretary.</toc-entry>
<toc-entry level="section">810. Definitions and rules of
construction.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="IDE745A2F9EF1B4D81A4D69747DC6AD3FF"><enum>102.</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="ID80AE078C3FB54D909392841514CDF2E0">
<subsection id="ID19A55BADB7D641349E2C6DFFE9E0E427"><enum>(d)</enum><header>Consultation
with States with respect to small business health plans</header>
<paragraph id="IDE2848DCDE0BC4879B2DA745AF307AC87"><enum>(1)</enum><header>Agreements with
States</header><text>The Secretary shall consult with the State recognized
under paragraph (2) with respect to a small business health plan regarding the
exercise of—</text>
<subparagraph id="ID240A730BDDC44827B5430671EB58F2F6"><enum>(A)</enum><text>the Secretary’s
authority under sections 502 and 504 to enforce the requirements for
certification under part 8; and</text>
</subparagraph><subparagraph id="ID663AD9C3C0694210B34B7B96C34C5A39"><enum>(B)</enum><text>the Secretary’s
authority to certify small business health plans under part 8 in accordance
with regulations of the Secretary applicable to certification under part
8.</text>
</subparagraph></paragraph><paragraph id="ID33D2868F9BB449A68FDF38BB3CD57176"><enum>(2)</enum><header>Recognition of
domicile State</header><text>In carrying out paragraph (1), the Secretary shall
ensure that only one State will be recognized, with respect to any particular
small business health plan, as the State with which consultation is required.
In carrying out this paragraph such State shall be the domicile State, as
defined in section
805(c).</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="ID9A0470723CE5456D96C9B2CD273CE6E9"><enum>103.</enum><header>Effective date
and transitional and other rules</header>
<subsection commented="no" id="IDC55C21912FD84EC19D65617CC8C1EB0B"><enum>(a)</enum><header>Effective
date</header><text>The amendments made by this title shall take effect 12
months after the date of the enactment of this Act. The Secretary of Labor
shall first issue all regulations necessary to carry out the amendments made by
this title within 6 months after the date of the enactment of this Act.</text>
</subsection><subsection id="ID3F568417453142E6876C5F987FBC120D"><enum>(b)</enum><header>Treatment of
certain existing health benefits programs</header>
<paragraph id="ID1658139A5CF347B7B29EC09CCB4F6BE8"><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
<external-xref legal-doc="act" parsable-cite="ERISA/812(a)(5)">section
808(a)(2)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (as amended by this
subtitle)) by the arrangement of an application for certification of the
arrangement under part 8 of subtitle B of title I of such Act—</text>
<subparagraph id="ID2CC7CF0DDB3C4BF6BBD42822AFB6AA45"><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="ID0B02CB9B852F446BB3F8FBCB1FCAA63C"><enum>(B)</enum><text>the requirements
of sections 801(a) and 803(a) 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="ID3B4AC10F4EC048C88A4743B4EE7DC4FA"><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 trustees which has control over the arrangement;</text>
</subparagraph><subparagraph id="IDE16BDD3004EE41B3860AEAB4D37E4FC7"><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="ID6AAE5F59761046DFBECE3D1D79FEB6D7"><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 or at such time that the arrangement provides coverage to
participants and beneficiaries in any State other than the States in which
coverage is provided on such date of enactment.</continuation-text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDDBEBFCC8AF194CAF9B1B4321459D9321"><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
<external-xref legal-doc="act" parsable-cite="ERISA/812">section
808</external-xref> 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>small business health plan</quote> shall be
deemed a reference to an arrangement referred to in this subsection.</text>
</paragraph></subsection></section><enum>II</enum><header>Market
relief</header>
<section id="id700109EFB60B42279EF5415EAA9CBD59"><enum>301.</enum><header>Market
relief</header><text display-inline="no-display-inline">The Public Health
Service Act (42 U.S.C. 201 et seq.) is amended by adding at the end the
following:</text>
<quoted-block display-inline="no-display-inline" id="idE1431951A9E84ACAA169F1BE6AB0501F" style="OLC">
<title id="id3C62421077D8405D9751D2D0FBF923D1"><enum>XXIX</enum><header>Health care
insurance marketplace modernization</header>
<section id="id54F51CCEF40B4FE5AC5FEAE0FE15FB5D"><enum>2901.</enum><header>General
insurance definitions</header><text display-inline="no-display-inline">In this
title, the terms <term>health insurance coverage</term>, <term>health insurance
issuer</term>, <term>group health plan</term>, and <term>individual health
insurance</term> shall have the meanings given such terms in section
2791.</text>
</section><section id="id596D437F8C7744EB96221FED2FCC0417"><enum>2902.</enum><header>Implementation
and application authority by Secretary</header><text display-inline="no-display-inline">The Secretary shall, through promulgation
and implementation of such regulations as the Secretary may reasonably
determine necessary or appropriate, and in consultation with a balanced
spectrum of effected entities and persons, modify the implementation and
application of this title to accommodate with minimum disruption such changes
to State or Federal law provided in this title and the (and the amendments made
by such Act) or in regulations issued thereto.</text>
</section><subtitle id="idC0ADBAAE89724C0E86B308B64699BCC4"><enum>A</enum><header>Market
relief</header>
<part id="idC8FD8E41E0C2431DAE4DDAA9D3857AB6"><enum>I</enum><header>Rating
requirements</header>
<section id="id0D3E72E387194D9AA15CD3A347717060"><enum>2911.</enum><header>Definitions</header><text display-inline="no-display-inline">In this part:</text>
<paragraph id="ID37dde65b6539420b9ccbf73de24b9250"><enum>(1)</enum><header>Adopting
state</header><text>The term <term>adopting State</term> means a State that,
with respect to the small group market, has enacted small group rating rules
that meet the minimum standards set forth in section 2912(a)(1) or, as
applicable, transitional small group rating rules set forth in section
2912(b).</text>
</paragraph><paragraph id="ID4431272aedd24b398cb8a466443a960c"><enum>(2)</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 insurance laws of such State.</text>
</paragraph><paragraph id="ID5e216acc84084b0090565627b53f3a01"><enum>(3)</enum><header>Base premium
rate</header><text>The term <term>base premium rate</term> means, for each
class of business with respect to a rating period, the lowest premium rate
charged or that could have been charged under a rating system for that class of
business by the small employer carrier to small employers with similar case
characteristics for health benefit plans with the same or similar
coverage.</text>
</paragraph><paragraph id="IDb3dbbb3bd63a4825a6b542d36278635b"><enum>(4)</enum><header>Eligible
insurer</header><text>The term <term>eligible insurer</term> means a health
insurance issuer that is licensed in a State and that—</text>
<subparagraph id="ID95dde76105434d51a96e8f04d7da0bb4"><enum>(A)</enum><text>notifies the
Secretary, not later than 30 days prior to the offering of coverage described
in this subparagraph, that the issuer intends to offer health insurance
coverage consistent with the Model Small Group Rating Rules or, as applicable,
transitional small group rating rules in a State;</text>
</subparagraph><subparagraph id="IDe97f2a43608146da8fd546a9cc91480d"><enum>(B)</enum><text>notifies the
insurance department of a nonadopting State (or other State agency), not later
than 30 days prior to the offering of coverage described in this subparagraph,
that the issuer intends to offer small group health insurance coverage in that
State consistent with the Model Small Group Rating Rules, and provides with
such notice a copy of any insurance policy that it intends to offer in the
State, its most recent annual and quarterly financial reports, and any other
information required to be filed with the insurance department of the State (or
other State agency); and</text>
</subparagraph><subparagraph id="ID8d126dfcefdd4a0b8482e9fe6bfa3953"><enum>(C)</enum><text>includes in the
terms of the health insurance coverage offered in nonadopting States (including
in the terms of any individual certificates that may be offered to individuals
in connection with such group health coverage) and filed with the State
pursuant to subparagraph (B), a description in the insurer's contract of the
Model Small Group Rating Rules and an affirmation that such Rules are included
in the terms of such contract.</text>
</subparagraph></paragraph><paragraph id="ID0b5537e52a3d4199bb6e6cbc1901bfe9"><enum>(5)</enum><header>Health
insurance coverage</header><text>The term <term>health insurance
coverage</term> means any coverage issued in the small group health insurance
market, except that such term shall not include excepted benefits (as defined
in section 2791(c)).</text>
</paragraph><paragraph id="idE557F996110744D19E7475FCA24E5865"><enum>(6)</enum><header>Index
rate</header><text>The term <term>index rate</term> means for each class of
business with respect to the rating period for small employers with similar
case characteristics, the arithmetic average of the applicable base premium
rate and the corresponding highest premium rate.</text>
</paragraph><paragraph id="IDf67639a115d4425c9f2caa9995f7bfb7"><enum>(7)</enum><header> Model Small
Group Rating Rules</header><text>The term <term>Model Small Group Rating
Rules</term> means the rules set forth in section 2912(a)(2).</text>
</paragraph><paragraph id="IDf5b54b08f34341df816c658cc6eb5b52"><enum>(8)</enum><header>Nonadopting
state</header><text>The term <term>nonadopting State</term> means a State that
is not an adopting State.</text>
</paragraph><paragraph id="idAEF060D700064709B7E368BA8E8C15B3"><enum>(9)</enum><header>Small group
insurance market</header><text>The term <term>small group insurance
market</term> shall have the meaning given the term <term>small group
market</term> in section 2791(e)(5).</text>
</paragraph><paragraph id="ID94a260a0a53f4193befec1b959378a53"><enum>(10)</enum><header>State
law</header><text>The term <term>State law</term> means all laws, decisions,
rules, regulations, or other State actions (including actions by a State
agency) having the effect of law, of any State.</text>
</paragraph><paragraph id="ID7a4c7053b4914f199b41fe93c8175e99"><enum>(11)</enum><header>Variation
limits</header>
<subparagraph id="idD5362DFBF4FA409BB0A2F1C8A78DA539"><enum>(A)</enum><header>Composite
variation limit</header>
<clause id="id2D37F75C54C84E27807561418CC43F47"><enum>(i)</enum><header>In
general</header><text>The term <term>composite variation limit</term> means the
total variation in premium rates charged by a health insurance issuer in the
small group market as permitted under applicable State law based on the
following factors or case characteristics:</text>
<subclause id="IDf370d69b356349eaaf6d7c6a3be13419"><enum>(I)</enum><text>Age.</text>
</subclause><subclause id="ID0f54cd73599c4c64b7709f25b2dc34f6"><enum>(II)</enum><text>Duration of
coverage.</text>
</subclause><subclause id="IDa19deb96d053487dbcd0ea77914e741a"><enum>(III)</enum><text>Claims
experience.</text>
</subclause><subclause id="ID8a5f9f0a29e64d138f0f603d373f5c93"><enum>(IV)</enum><text>Health
status.</text>
</subclause></clause><clause id="idC294340D7A884504B9DCE16BB9C837C9"><enum>(ii)</enum><header>Use of
factors</header><text>With respect to the use of the factors described in
clause (i) in setting premium rates, a health insurance issuer shall use one or
both of the factors described in subclauses (I) or (IV) of such clause and may
use the factors described in subclauses (II) or (III) of such clause.</text>
</clause></subparagraph><subparagraph id="IDd5cb67149e044efe967b450ef9f6a514"><enum>(B)</enum><header>Total variation
limit</header><text>The term <term>total variation limit</term> means the total
variation in premium rates charged by a health insurance issuer in the small
group market as permitted under applicable State law based on all factors and
case characteristics (as described in section 2912(a)(1)).</text>
</subparagraph></paragraph></section><section id="idCDDC6762328C40A58DFE64CD20C16DB3"><enum>2912.</enum><header>Rating
rules</header>
<subsection id="id4F1D5E44D4884AED9053B745BD36A837"><enum>(a)</enum><header>Establishment
of minimum standards for premium variations and model small group rating
rules</header><text>Not later than 6 months after the date of enactment of this
title, the Secretary shall promulgate regulations establishing the following
Minimum Standards and Model Small Group Rating Rules:</text>
<paragraph id="id6027134F5FEE422F8B5383365943E19D"><enum>(1)</enum><header>Minimum
standards for premium variations</header>
<subparagraph id="id6D8D1DBDEE394B8094ED1B64DF2B6C95"><enum>(A)</enum><header>Composite
variation limit</header><text>The composite variation limit shall not be less
than 3:1.</text>
</subparagraph><subparagraph id="ID3b84eb032ac04ff2b5346d1bb7075974"><enum>(B)</enum><header>Total variation
limit</header><text>The total variation limit shall not be less than
5:1.</text>
</subparagraph><subparagraph commented="no" id="IDe6ed0e2295a440399dc82d9fdba1c3f1"><enum>(C)</enum><header>Prohibition on
use of certain case characteristics</header><text>For purposes of this
paragraph, in calculating the total variation limit, the State shall not use
case characteristics other than those used in calculating the composite
variation limit and industry, geographic area, group size, participation rate,
class of business, and participation in wellness programs.</text>
</subparagraph></paragraph><paragraph id="idBE811E9F248E41BDB095E2434A18C0F5"><enum>(2)</enum><header>Model Small
Group Rating Rules</header><text>The following apply to an eligible insurer in
a non-adopting State:</text>
<subparagraph id="ID7db10ba5e98f48df91a329858f70057c"><enum>(A)</enum><header>Premium
rates</header><text>Premium rates for small group health benefit plans to which
this title applies shall comply with the following provisions relating to
premiums, except as provided for under subsection (b):</text>
<clause id="id17C22236C5684515AFD8F9B1672C060F"><enum>(i)</enum><header>Variation in
premium rates</header><text>The plan may not vary premium rates by more than
the minimum standards provided for under paragraph (1).</text>
</clause><clause id="IDcd6a4a5cbefb4086a78be673b52c8c7a"><enum>(ii)</enum><header>Index
rate</header><text>The index rate for a rating period for any class of business
shall not exceed the index rate for any other class of business by more than 20
percent, excluding those classes of business related to association groups
under this title.</text>
</clause><clause id="IDc7985a75c8904e09815f04600f0d3b67"><enum>(iii)</enum><header>Class of
businesses</header><text>With respect to a class of business, the premium rates
charged during a rating period to small employers with similar case
characteristics for the same or similar coverage or the rates that could be
charged to such employers under the rating system for that class of business,
shall not vary from the index rate by more than 25 percent of the index rate
under clause (ii).</text>
</clause><clause id="IDd4565c1701174d23bdee33a2220449c3"><enum>(iv)</enum><header>Increases for
new rating periods</header><text>The percentage increase in the premium rate
charged to a small employer for a new rating period may not exceed the sum of
the following:</text>
<subclause id="ID02e8d8b9e2a0439ba1d52f56e4712133"><enum>(I)</enum><text>The percentage
change in the new business premium rate measured from the first day of the
prior rating period to the first day of the new rating period. In the case of a
health benefit plan into which the small employer carrier is no longer
enrolling new small employers, the small employer carrier shall use the
percentage change in the base premium rate, except that such change shall not
exceed, on a percentage basis, the change in the new business premium rate for
the most similar health benefit plan into which the small employer carrier is
actively enrolling new small employers.</text>
</subclause><subclause id="ID4a877f15c01741d987840269ca50ab1a"><enum>(II)</enum><text>Any adjustment,
not to exceed 15 percent annually and adjusted pro rata for rating periods of
less then 1 year, due to the claim experience, health status or duration of
coverage of the employees or dependents of the small employer as determined
from the small employer carrier's rate manual for the class of business
involved.</text>
</subclause><subclause id="IDe2af6db1756f4faab685ebe7666814c7"><enum>(III)</enum><text>Any adjustment
due to change in coverage or change in the case characteristics of the small
employer as determined from the small employer carrier's rate manual for the
class of business.</text>
</subclause></clause><clause id="ID273adafd124b49dfb5a7f60c0f74ca31"><enum>(v)</enum><header>Uniform
application of adjustments</header><text>Adjustments in premium rates for claim
experience, health status, or duration of coverage shall not be charged to
individual employees or dependents. Any such adjustment shall be applied
uniformly to the rates charged for all employees and dependents of the small
employer.</text>
</clause><clause commented="no" id="IDb6dcd2987a674739814016a1d1f0f0e9"><enum>(vi)</enum><header>Prohibition on
use of certain case characteristic</header><text>A small employer carrier shall
not utilize case characteristics, other than those permitted under paragraph
(1)(C), without the prior approval of the applicable State authority.</text>
</clause><clause id="ID6b9ded4d9cb749a1b15de5dbf57dcf80"><enum>(vii)</enum><header>Consistent
application of factors</header><text>Small employer carriers shall apply rating
factors, including case characteristics, consistently with respect to all small
employers in a class of business. Rating factors shall produce premiums for
identical groups which differ only by the amounts attributable to plan design
and do not reflect differences due to the nature of the groups assumed to
select particular health benefit plans.</text>
</clause><clause id="ID3c402ffcc2dd472989200d21d3f505e5"><enum>(viii)</enum><header>Treatment of
plans as having same rating period</header><text>A small employer carrier shall
treat all health benefit plans issued or renewed in the same calendar month as
having the same rating period.</text>
</clause><clause id="IDe7d733c4229b46fc869df13dd6aa02be"><enum>(ix)</enum><header>Require
compliance</header><text>Premium rates for small business health benefit plans
shall comply with the requirements of this subsection notwithstanding any
assessments paid or payable by a small employer carrier as required by a
State's small employer carrier reinsurance program.</text>
</clause></subparagraph><subparagraph id="ID427ad58786d448faa0d19af94c9f504c"><enum>(B)</enum><header>Establishment
of separate class of business</header><text>Subject to subparagraph (C), a
small employer carrier may establish a separate class of business only to
reflect substantial differences in expected claims experience or administrative
costs related to the following:</text>
<clause id="IDdb164e70d8b64e1f87e7e5a3d161af59"><enum>(i)</enum><text>The small
employer carrier uses more than one type of system for the marketing and sale
of health benefit plans to small employers.</text>
</clause><clause id="IDf39e9a81d41b48f2b05d3f4d8b4ce09b"><enum>(ii)</enum><text>The small
employer carrier has acquired a class of business from another small employer
carrier.</text>
</clause><clause id="ID1be1fee78af140d8a93de53ca4803b0d"><enum>(iii)</enum><text>The small
employer carrier provides coverage to one or more association groups that meet
the requirements of this title.</text>
</clause></subparagraph><subparagraph id="IDe15c547818054362a584a3454c0f9501"><enum>(C)</enum><header>Limitation</header><text>A
small employer carrier may establish up to 9 separate classes of business under
subparagraph (B), excluding those classes of business related to association
groups under this title.</text>
</subparagraph><subparagraph id="ID78ffddca458648f7bdf6d9bf921bc0aa"><enum>(D)</enum><header>Limitation on
transfers</header><text>A small employer carrier shall not transfer a small
employer involuntarily into or out of a class of business. A small employer
carrier shall not offer to transfer a small employer into or out of a class of
business unless such offer is made to transfer all small employers in the class
of business without regard to case characteristics, claim experience, health
status or duration of coverage since issue.</text>
</subparagraph></paragraph></subsection><subsection id="ID2340cb12484d48ebb94624c02eeb2422"><enum>(b)</enum><header>Transitional
Model Small Group Rating Rules</header>
<paragraph id="IDb271cf6f098647549ba721ced4c27f1f"><enum>(1)</enum><header>In
general</header><text>Not later than 6 months after the date of enactment of
this title and to the extent necessary to provide for a graduated transition to
the minimum standards for premium variation as provided for in subsection
(a)(1), the Secretary, in consultation with the National Association of
Insurance Commissioners (NAIC), shall promulgate State-specific transitional
small group rating rules in accordance with this subsection, which shall be
applicable with respect to non-adopting States and eligible insurers operating
in such States for a period of not to exceed 3 years from the date of the
promulgation of the minimum standards for premium variation pursuant to
subsection (a).</text>
</paragraph><paragraph id="ID6c2e82db9d66481b9467e7237479945b"><enum>(2)</enum><header>Compliance with
transitional model small group rating rules</header><text>During the transition
period described in paragraph (1), a State that, on the date of enactment of
this title, has in effect a small group rating rules methodology that allows
for a variation that is less than the variation provided for under subsection
(a)(1) (concerning minimum standards for premium variation), shall be deemed to
be an adopting State if the State complies with the transitional small group
rating rules as promulgated by the Secretary pursuant to paragraph (1).</text>
</paragraph><paragraph id="ID07b14b9f98dc442b8c8751677bfb691d"><enum>(3)</enum><header>Transitioning
of old business</header>
<subparagraph id="id7DFB40DF528D49D3849906ED72781376"><enum>(A)</enum><header>In
general</header><text>In developing the transitional small group rating rules
under paragraph (1), the Secretary shall, after consultation with the National
Association of Insurance Commissioners and representatives of insurers
operating in the small group health insurance market in non-adopting States,
promulgate special transition standards with respect to independent rating
classes for old and new business, to the extent reasonably necessary to protect
health insurance consumers and to ensure a stable and fair transition for old
and new market entrants.</text>
</subparagraph><subparagraph commented="no" id="ID6d7481a3cc5c472688638e60f41fb351"><enum>(B)</enum><header>Period for
operation of independent rating classes</header><text>In developing the special
transition standards pursuant to subparagraph (A), the Secretary shall permit a
carrier in a non-adopting State, at its option, to maintain independent rating
classes for old and new business for a period of up to 5 years, with the
commencement of such 5-year period to begin at such time, but not later than
the date that is 3 years after the date of enactment of this title, as the
carrier offers a book of business meeting the minimum standards for premium
variation provided for in subsection (a)(1) or the transitional small group
rating rules under paragraph (1).</text>
</subparagraph></paragraph><paragraph id="ID20fd91bdea434106991fc48af7cef763"><enum>(4)</enum><header>Other
transitional authority</header><text>In developing the transitional small group
rating rules under paragraph (1), the Secretary shall provide for the
application of the transitional small group rating rules in transition States
as the Secretary may determine necessary for a an effective transition.</text>
</paragraph></subsection><subsection id="idB0479DBF9B114075B0514F36529FF9FF"><enum>(c)</enum><header>Market
re-entry</header>
<paragraph id="id5B1C77EEDC4A48B49A97C349C859625A"><enum>(1)</enum><header>In
general</header><text>Notwithstanding any other provision of law, a health
insurance issuer that has voluntarily withdrawn from providing coverage in the
small group market prior to the date of enactment of the <short-title>Small
Business Health Plans Act of 2008</short-title> shall not be excluded from
re-entering such market on a date that is more than 180 days after such date of
enactment.</text>
</paragraph><paragraph id="id9912CF866B6742009B881CAA9938AE66"><enum>(2)</enum><header>Termination</header><text>The
provision of this subsection shall terminate on the date that is 24 months
after the date of enactment of the <short-title>Small Business Health Plans Act
of 2008</short-title>.</text>
</paragraph></subsection></section><section id="IDb9ad26b9611d47c4b244ac74046cda65"><enum>2913.</enum><header>Application
and preemption</header>
<subsection id="IDf23fa58340bf417986973503316ab735"><enum>(a)</enum><header>Superseding of
state law</header>
<paragraph id="IDe10be47ec4644fcd8a4c2e1d34ec7137"><enum>(1)</enum><header>In
general</header><text>This part shall supersede any and all State laws of a
non-adopting State insofar as such State laws (whether enacted prior to or
after the date of enactment of this subtitle) relate to rating in the small
group insurance market as applied to an eligible insurer, or small group health
insurance coverage issued by an eligible insurer, including with respect to
coverage issued to a small employer through a small business health plan, in a
State.</text>
</paragraph><paragraph id="IDc38b5eb7d6c24fc98cec7f34f6ddb118"><enum>(2)</enum><header>Nonadopting
states</header><text>This part shall supersede any and all State laws of a
nonadopting State insofar as such State laws (whether enacted prior to or after
the date of enactment of this subtitle)—</text>
<subparagraph id="id5BFEB68BE54E4913B255B3A3573A6619"><enum>(A)</enum><text>prohibit an
eligible insurer from offering, marketing, or implementing small group health
insurance coverage consistent with the Model Small Group Rating Rules or
transitional model small group rating rules; or</text>
</subparagraph><subparagraph id="idBC942BA91CE9451CA90EC5D3DC04CDD6"><enum>(B)</enum><text>have the effect
of retaliating against or otherwise punishing in any respect an eligible
insurer for offering, marketing, or implementing small group health insurance
coverage consistent with the Model Small Group Rating Rules or transitional
model small group rating rules.</text>
</subparagraph></paragraph></subsection><subsection id="IDb7e7ffcf87c64da69499387ed79fe925"><enum>(b)</enum><header>Savings clause
and construction</header>
<paragraph id="ID4171e333d9934232bd37636fe4381c00"><enum>(1)</enum><header>Nonapplication
to adopting states</header><text>Subsection (a) shall not apply with respect to
adopting states.</text>
</paragraph><paragraph id="ID3ae3584ba1424659bbf480664981f636"><enum>(2)</enum><header>Nonapplication
to certain insurers</header><text>Subsection (a) shall not apply with respect
to insurers that do not qualify as eligible insurers that offer small group
health insurance coverage in a nonadopting State.</text>
</paragraph><paragraph id="ID428b882ef79e426aa074e89cd328b016"><enum>(3)</enum><header>Nonapplication
where obtaining relief under state law</header><text>Subsection (a)(1) shall
not supercede any State law in a nonadopting State to the extent necessary to
permit individuals or the insurance department of the State (or other State
agency) to obtain relief under State law to require an eligible insurer to
comply with the Model Small Group Rating Rules or transitional model small
group rating rules.</text>
</paragraph><paragraph id="IDd0bfa57f69254bec865a16e070f9abd9"><enum>(4)</enum><header>No effect on
preemption</header><text>In no case shall this part be construed to limit or
affect in any manner the preemptive scope of sections 502 and 514 of the
Employee Retirement Income Security Act of 1974. In no case shall this part be
construed to create any cause of action under Federal or State law or enlarge
or affect any remedy available under the Employee Retirement Income Security
Act of 1974.</text>
</paragraph><paragraph id="IDe2c37ed47e50405db39d633b04b70147"><enum>(5)</enum><header>Preemption
limited to rating</header><text>Subsection (a) shall not preempt any State law
that does not have a reference to or a connection with State rating rules that
would otherwise apply to eligible insurers.</text>
</paragraph></subsection><subsection id="ID1307996c70b94ac682768261ffd4d01c"><enum>(c)</enum><header>Effective
date</header><text>This section shall apply, at the election of the eligible
insurer, beginning in the first plan year or the first calendar year following
the issuance of the final rules by the Secretary under the Model Small Group
Rating Rules or, as applicable, the Transitional Model Small Group Rating
Rules, but in no event earlier than the date that is 12 months after the date
of enactment of this title.</text>
</subsection></section><section id="ID153080fcff484458a1583a2c39bf6a75"><enum>2914.</enum><header>Civil actions
and jurisdiction</header>
<subsection id="IDf0be43808ca74c4bbf665397914820f0"><enum>(a)</enum><header>In
general</header><text>The courts of the United States shall have exclusive
jurisdiction over civil actions involving the interpretation of this
part.</text>
</subsection><subsection id="ID6a503c223ee34d10a12aa9faa749655e"><enum>(b)</enum><header>Actions</header><text>An
eligible insurer may bring an action in the district courts of the United
States for injunctive or other equitable relief against any officials or agents
of a nonadopting State in connection with any conduct or action, or proposed
conduct or action, by such officials or agents which violates, or which would
if undertaken violate, section 2913.</text>
</subsection><subsection id="ID2382da7a3e214d4c99cae688f6b206ba"><enum>(c)</enum><header>Direct filing
in Court of Appeals</header><text>At the election of the eligible insurer, an
action may be brought under subsection (b) directly in the United States Court
of Appeals for the circuit in which the nonadopting State is located by the
filing of a petition for review in such Court.</text>
</subsection><subsection id="ID6df9f8f212d048f7b206f069ef52561d"><enum>(d)</enum><header>Expedited
review</header>
<paragraph id="ID1911f76c305848a0b23093397d1eaa19"><enum>(1)</enum><header>District
court</header><text>In the case of an action brought in a district court of the
United States under subsection (b), such court shall complete such action,
including the issuance of a judgment, prior to the end of the 120-day period
beginning on the date on which such action is filed, unless all parties to such
proceeding agree to an extension of such period.</text>
</paragraph><paragraph id="IDed8f114af4d946f09a02cefd5089d4c8"><enum>(2)</enum><header>Court of
Appeals</header><text>In the case of an action brought directly in a United
States Court of Appeal under subsection (c), or in the case of an appeal of an
action brought in a district court under subsection (b), such Court shall
complete all action on the petition, including the issuance of a judgment,
prior to the end of the 60-day period beginning on the date on which such
petition is filed with the Court, unless all parties to such proceeding agree
to an extension of such period.</text>
</paragraph></subsection><subsection id="ID9576a74f864e498d9854546793e439aa"><enum>(e)</enum><header>Standard of
review</header><text>A court in an action filed under this section, shall
render a judgment based on a review of the merits of all questions presented in
such action and shall not defer to any conduct or action, or proposed conduct
or action, of a nonadopting State.</text>
</subsection></section><section id="id01B1D8DCCCC5484C9334A53E200872ED"><enum>2915.</enum><header>Ongoing
review</header><text display-inline="no-display-inline">Not later than 5 years
after the date on which the Model Small Group Rating Rules are issued under
this part, and every 5 years thereafter, the Secretary, in consultation with
the National Association of Insurance Commissioners, shall prepare and submit
to the appropriate committees of Congress a report that assesses the effect of
the Model Small Group Rating Rules on access, cost, and market functioning in
the small group market. Such report may, if the Secretary, in consultation with
the National Association of Insurance Commissioners, determines such is
appropriate for improving access, costs, and market functioning, contain
legislative proposals for recommended modification to such Model Small Group
Rating Rules.</text>
</section></part><part id="id71A68226AE2C4E8FB8BEA287F01675EA"><enum>II</enum><header>Affordable
plans</header>
<section id="id2F2590A84F1E447394568C7BDCE1B40D"><enum>2921.</enum><header>Definitions</header><text display-inline="no-display-inline">In this part:</text>
<paragraph id="id65D44729509D4492BD4004EB809D6244"><enum>(1)</enum><header>Adopting
state</header><text>The term <term>adopting State</term> means a State that has
enacted a law providing that small group, individual, and large group health
insurers in such State may offer and sell products in accordance with the List
of Required Benefits and the Terms of Application as provided for in section
2922(b).</text>
</paragraph><paragraph id="idF7E48EA244504EE1BABD2EA16CBE67FD"><enum>(2)</enum><header>Eligible
insurer</header><text>The term <term>eligible insurer</term> means a health
insurance issuer that is licensed in a nonadopting State and that—</text>
<subparagraph id="id4824C821FA7B4FEC84B10A1416517284"><enum>(A)</enum><text>notifies the
Secretary, not later than 30 days prior to the offering of coverage described
in this subparagraph, that the issuer intends to offer health insurance
coverage consistent with the List of Required Benefits and Terms of Application
in a nonadopting State;</text>
</subparagraph><subparagraph id="id17DD03DA651D438E8963E78977B3065E"><enum>(B)</enum><text>notifies the
insurance department of a nonadopting State (or other applicable State agency),
not later than 30 days prior to the offering of coverage described in this
subparagraph, that the issuer intends to offer health insurance coverage in
that State consistent with the List of Required Benefits and Terms of
Application, and provides with such notice a copy of any insurance policy that
it intends to offer in the State, its most recent annual and quarterly
financial reports, and any other information required to be filed with the
insurance department of the State (or other State agency) by the Secretary in
regulations; and</text>
</subparagraph><subparagraph id="id6514506A5B4747A790FF3141A51C305B"><enum>(C)</enum><text>includes in the
terms of the health insurance coverage offered in nonadopting States (including
in the terms of any individual certificates that may be offered to individuals
in connection with such group health coverage) and filed with the State
pursuant to subparagraph (B), a description in the insurer's contract of the
List of Required Benefits and a description of the Terms of Application,
including a description of the benefits to be provided, and that adherence to
such standards is included as a term of such contract.</text>
</subparagraph></paragraph><paragraph id="id97A94081C0304269BA4A33C49FBFC60A"><enum>(3)</enum><header>Health
insurance coverage</header><text>The term <term>health insurance
coverage</term> means any coverage issued in the small group, individual, or
large group health insurance markets, including with respect to small business
health plans, except that such term shall not include excepted benefits (as
defined in section 2791(c)).</text>
</paragraph><paragraph id="id7D86A4E79EE64AC4B70201DF962F5F5C"><enum>(4)</enum><header>List of
Required Benefits</header><text>The term <term>List of Required Benefits</term>
means the List issued under section 2922(a).</text>
</paragraph><paragraph id="id3C941BB0754A4DD2AEBE1323699416A5"><enum>(5)</enum><header>Nonadopting
state</header><text>The term <term>nonadopting State</term> means a State that
is not an adopting State.</text>
</paragraph><paragraph id="id3DCB03059CBB4CC7876F5D4D05EE29B5"><enum>(6)</enum><header>State
law</header><text>The term <term>State law</term> means all laws, decisions,
rules, regulations, or other State actions (including actions by a State
agency) having the effect of law, of any State.</text>
</paragraph><paragraph id="id0C13A1D43DCD47AEAFF3C1CA8AD49A9E"><enum>(7)</enum><header>State Provider
Freedom of Choice Law</header><text>The term <term>State Provider Freedom of
Choice Law</term> means a State law requiring that a health insurance issuer,
with respect to health insurance coverage, not discriminate with respect to
participation, reimbursement, or indemnification as to any provider who is
acting within the scope of the provider's license or certification under
applicable State law.</text>
</paragraph><paragraph id="IDbfd9698015a149119d2cde9da40cd281"><enum>(8)</enum><header>Terms of
Application</header><text>The term <term>Terms of Application</term> means
terms provided under section 2922(a).</text>
</paragraph></section><section commented="no" display-inline="no-display-inline" id="idFFDD498078B341A89931BAAE81406C49" section-type="subsequent-section"><enum>2922.</enum><header>Offering affordable
plans</header>
<subsection id="ID56f9fad1feba4e76a6107971e34fbe62"><enum>(a)</enum><header>List of
Required Benefits</header><text>Not later than 3 months after the date of
enactment of this title, the Secretary, in consultation with the National
Association of Insurance Commissioners, shall issue by interim final rule a
list (to be known as the <quote>List of Required Benefits</quote>) of covered
benefits, services, or categories of providers that are required to be provided
by health insurance issuers, in each of the small group, individual, and large
group markets, in at least 26 States as a result of the application of State
covered benefit, service, and category of provider mandate laws. With respect
to plans sold to or through small business health plans, the List of Required
Benefits applicable to the small group market shall apply.</text>
</subsection><subsection id="id88DBDEBE9E3146E39FB550029834DA64"><enum>(b)</enum><header>Terms of
Application</header>
<paragraph id="id806B956002B44B9A8692AB3460A293B6"><enum>(1)</enum><header>State with
mandates</header><text>With respect to a State that has a covered benefit,
service, or category of provider mandate in effect that is covered under the
List of Required Benefits under subsection (a), such State mandate shall,
subject to paragraph (3) (concerning uniform application), apply to a coverage
plan or plan in, as applicable, the small group, individual, or large group
market or through a small business health plan in such State.</text>
</paragraph><paragraph id="id69FAF82F855C425B973F88E347E4A1AF"><enum>(2)</enum><header>States without
mandates</header><text>With respect to a State that does not have a covered
benefit, service, or category of provider mandate in effect that is covered
under the List of Required Benefits under subsection (a), such mandate shall
not apply, as applicable, to a coverage plan or plan in the small group,
individual, or large group market or through a small business health plan in
such State.</text>
</paragraph><paragraph id="id5EE78CAE8EC84DBB942ECA04E9FF615D"><enum>(3)</enum><header>Uniform
application of laws</header>
<subparagraph id="id13D9B8FABFE8476AAFD7E76CA3C1E3A6"><enum>(A)</enum><header>In
general</header><text>With respect to a State described in paragraph (1), in
applying a covered benefit, service, or category of provider mandate that is on
the List of Required Benefits under subsection (a) the State shall permit a
coverage plan or plan offered in the small group, individual, or large group
market or through a small business health plan in such State to apply such
benefit, service, or category of provider coverage in a manner consistent with
the manner in which such coverage is applied under one of the three most
heavily subscribed national health plans offered under the Federal Employee
Health Benefits Program under chapter 89 of title 5, United States Code (as
determined by the Secretary in consultation with the Director of the Office of
Personnel Management), and consistent with the Publication of Benefit
Applications under subsection (c). In the event a covered benefit, service, or
category of provider appearing in the List of Required Benefits is not offered
in one of the three most heavily subscribed national health plans offered under
the Federal Employees Health Benefits Program, such covered benefit, service,
or category of provider requirement shall be applied in a manner consistent
with the manner in which such coverage is offered in the remaining most heavily
subscribed plan of the remaining Federal Employees Health Benefits Program
plans, as determined by the Secretary, in consultation with the Director of the
Office of Personnel Management.</text>
</subparagraph><subparagraph id="id07EBE46612364DA89A40179A2B1E3A7A"><enum>(B)</enum><header>Exception
regarding State provider freedom of choice laws</header><text>Notwithstanding
subparagraph (A), in the event a category of provider mandate is included in
the List of Covered Benefits, any State Provider Freedom of Choice Law (as
defined in section 2921(7)) that is in effect in any State in which such
category of provider mandate is in effect shall not be preempted, with respect
to that category of provider, by this part.</text>
</subparagraph></paragraph></subsection><subsection id="ID618d84cdf6f74cc08bfcaa216c2f21fc"><enum>(c)</enum><header>Publication of
benefit applications</header><text>Not later than 3 months after the date of
enactment of this title, and on the first day of every calendar year
thereafter, the Secretary, in consultation with the Director of the Office of
Personnel Management, shall publish in the Federal Register a description of
such covered benefits, services, and categories of providers covered in that
calendar year by each of the three most heavily subscribed nationally available
Federal Employee Health Benefits Plan options which are also included on the
List of Required Benefits.</text>
</subsection><subsection id="id7B54562771174CA5827C752BA7CB1F4C"><enum>(d)</enum><header>Effective
dates</header>
<paragraph id="idF038C4EAFF3C4BEB85FE755654C18ED8"><enum>(1)</enum><header>Small business
health plans</header><text>With respect to health insurance provided to
participating employers of small business health plans, the requirements of
this part (concerning lower cost plans) shall apply beginning on the date that
is 12 months after the date of enactment of this title.</text>
</paragraph><paragraph id="idCF00071A072C494E86C3BAA3CF1B81D1"><enum>(2)</enum><header>Non-association
coverage</header><text>With respect to health insurance provided to groups or
individuals other than participating employers of small business health plans,
the requirements of this part shall apply beginning on the date that is 15
months after the date of enactment of this title.</text>
</paragraph></subsection><subsection id="ID01579d28d8ab40e6879de33d85de8fb9"><enum>(e)</enum><header>Updating of
list of required benefits</header><text>Not later than 2 years after the date
on which the list of required benefits is issued under subsection (a), and
every 2 years thereafter, the Secretary, in consultation with the National
Association of Insurance Commissioners, shall update the list based on changes
in the laws and regulations of the States. The Secretary shall issue the
updated list by regulation, and such updated list shall be effective upon the
first plan year following the issuance of such regulation.</text>
</subsection></section><section id="id10F5DE1B113A424B8E8197C3E21B228B"><enum>2923.</enum><header>Application
and preemption</header>
<subsection id="IDd42ab114375c4301ab9cdd6fd4d0a0b2"><enum>(a)</enum><header>Superceding of
state law</header>
<paragraph id="ID1b8450b67de4481494f986c441d0694d"><enum>(1)</enum><header>In
general</header><text>This part shall supersede any and all State laws insofar
as such laws relate to mandates relating to covered benefits, services, or
categories of provider in the health insurance market as applied to an eligible
insurer, or health insurance coverage issued by an eligible insurer, including
with respect to coverage issued to a small business health plan, in a
nonadopting State.</text>
</paragraph><paragraph id="ID4ba17dd88ee6458791cae5d766aae4ac"><enum>(2)</enum><header>Nonadopting
states</header><text>This part shall supersede any and all State laws of a
nonadopting State (whether enacted prior to or after the date of enactment of
this title) insofar as such laws—</text>
<subparagraph id="idA25C694B67014D71B7C785E349E5F2C8"><enum>(A)</enum><text>prohibit an
eligible insurer from offering, marketing, or implementing health insurance
coverage consistent with the Benefit Choice Standards, as provided for in
section 2922(a); or</text>
</subparagraph><subparagraph id="id9EF0F31382B24EAB8068514392AA7AFD"><enum>(B)</enum><text>have the effect
of retaliating against or otherwise punishing in any respect an eligible
insurer for offering, marketing, or implementing health insurance coverage
consistent with the Benefit Choice Standards.</text>
</subparagraph></paragraph></subsection><subsection id="ID22eda467fea242f2bacfa12b7c3efbb5"><enum>(b)</enum><header>Savings clause
and construction</header>
<paragraph id="ID3ecab177b6764a0999c7873b3d32cbe9"><enum>(1)</enum><header>Nonapplication
to adopting states</header><text>Subsection (a) shall not apply with respect to
adopting States.</text>
</paragraph><paragraph id="IDceb4c94a29e74fb68ffe556db3559156"><enum>(2)</enum><header>Nonapplication
to certain insurers</header><text>Subsection (a) shall not apply with respect
to insurers that do not qualify as eligible insurers who offer health insurance
coverage in a nonadopting State.</text>
</paragraph><paragraph id="ID26d15c82ca734300b02d047502b56d22"><enum>(3)</enum><header>Nonapplication
where obtaining relief under state law</header><text>Subsection (a)(1) shall
not supercede any State law of a nonadopting State to the extent necessary to
permit individuals or the insurance department of the State (or other State
agency) to obtain relief under State law to require an eligible insurer to
comply with the Benefit Choice Standards.</text>
</paragraph><paragraph id="IDfeadb6a897b8415a98edd74a3882ad5f"><enum>(4)</enum><header>No effect on
preemption</header><text>In no case shall this part be construed to limit or
affect in any manner the preemptive scope of sections 502 and 514 of the
Employee Retirement Income Security Act of 1974. In no case shall this part be
construed to create any cause of action under Federal or State law or enlarge
or affect any remedy available under the Employee Retirement Income Security
Act of 1974.</text>
</paragraph><paragraph id="ID2557a5cf84cc4a088e19d4645f70b826"><enum>(5)</enum><header>Preemption
limited to benefits</header><text>Subsection (a) shall not preempt any State
law that does not have a reference to or a connection with State mandates
regarding covered benefits, services, or categories of providers that would
otherwise apply to eligible insurers.</text>
</paragraph></subsection></section><section id="IDade5a7eefb794ea994750263bd07ff45"><enum>2924.</enum><header>Civil actions
and jurisdiction</header>
<subsection id="ID5c0ed5cd76484d6a919ee248847b3064"><enum>(a)</enum><header>In
general</header><text>The courts of the United States shall have exclusive
jurisdiction over civil actions involving the interpretation of this
part.</text>
</subsection><subsection id="idF0C3B21B110C40B1BEB7EF12179713EA"><enum>(b)</enum><header>Actions</header><text>An
eligible insurer may bring an action in the district courts of the United
States for injunctive or other equitable relief against any officials or agents
of a nonadopting State in connection with any conduct or action, or proposed
conduct or action, by such officials or agents which violates, or which would
if undertaken violate, section 2923.</text>
</subsection><subsection id="idA894CDF675754AD98E7BB4C40AF38ABB"><enum>(c)</enum><header>Direct filing
in Court of Appeals</header><text>At the election of the eligible insurer, an
action may be brought under subsection (b) directly in the United States Court
of Appeals for the circuit in which the nonadopting State is located by the
filing of a petition for review in such Court.</text>
</subsection><subsection id="idA86E516F92064F7EB01D720BC581D224"><enum>(d)</enum><header>Expedited
review</header>
<paragraph id="id995A935B92C846139AADCDD9FE0D2E94"><enum>(1)</enum><header>District
court</header><text>In the case of an action brought in a district court of the
United States under subsection (b), such court shall complete such action,
including the issuance of a judgment, prior to the end of the 120-day period
beginning on the date on which such action is filed, unless all parties to such
proceeding agree to an extension of such period.</text>
</paragraph><paragraph id="id1B8B4A4B33E74BC2B0D39F2700CA4B5F"><enum>(2)</enum><header>Court of
Appeals</header><text>In the case of an action brought directly in a United
States Court of Appeal under subsection (c), or in the case of an appeal of an
action brought in a district court under subsection (b), such Court shall
complete all action on the petition, including the issuance of a judgment,
prior to the end of the 60-day period beginning on the date on which such
petition is filed with the Court, unless all parties to such proceeding agree
to an extension of such period.</text>
</paragraph></subsection><subsection id="idFB9BA1C03504402DB95762CED3C6979B"><enum>(e)</enum><header>Standard of
review</header><text>A court in an action filed under this section, shall
render a judgment based on a review of the merits of all questions presented in
such action and shall not defer to any conduct or action, or proposed conduct
or action, of a nonadopting State.</text>
</subsection></section><section commented="no" id="id3ED17E0D08AB48D7984C442ECE28A1BE"><enum>2925.</enum><header>Rules of
construction</header>
<subsection commented="no" id="id055E6E90BC4A4A36BBF262E5BFA4981F"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Notwithstanding any
other provision of Federal or State law, a health insurance issuer in an
adopting State or an eligible insurer in a non-adopting State may amend its
existing policies to be consistent with the terms of this subtitle (concerning
rating and benefits).</text>
</subsection><subsection commented="no" id="id9AC1190E1F2048D3BC214C9C027399AF"><enum>(b)</enum><header>Health savings
accounts</header><text display-inline="yes-display-inline">Nothing in this
subtitle shall be construed to create any mandates for coverage of benefits for
HSA-qualified health plans that would require reimbursements in violation of
section 223(c)(2) of the Internal Revenue Code of
1986.</text>
</subsection></section></part></subtitle>.
<enum>III</enum><header>Harmonization
of health insurance standards</header>
<section id="idF122543D2F3B496AA4265FC81FF2B80A"><enum>301.</enum><header>Health
Insurance Standards Harmonization</header><text display-inline="no-display-inline">Title XXIX of the Public Health Service Act
(as added by section 201) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="id454669D0D75946948F46771174C4759F" style="OLC">
<subtitle id="id985D034447B44D03995245142CE4C170"><enum>B</enum><header>Standards
harmonization</header>
<section id="idE391E937CE614597AB01E7B1D0ADB933"><enum>2931.</enum><header>Definitions</header><text display-inline="no-display-inline">In this subtitle:</text>
<paragraph id="idA12856E6FAF147FF83851A35C7205967"><enum>(1)</enum><header>Adopting
state</header><text>The term <term>adopting State</term> means a State that has
enacted the harmonized standards adopted under this subtitle in their entirety
and as the exclusive laws of the State that relate to the harmonized
standards.</text>
</paragraph><paragraph id="id4485E50EFE144BC49E71AA9F5EADE375"><enum>(2)</enum><header>Eligible
insurer</header><text>The term <term>eligible insurer</term> means a health
insurance issuer that is licensed in a nonadopting State and that—</text>
<subparagraph id="id769379D807824CCCA7C0E278D38257EB"><enum>(A)</enum><text>notifies the
Secretary, not later than 30 days prior to the offering of coverage described
in this subparagraph, that the issuer intends to offer health insurance
coverage consistent with the harmonized standards in a nonadopting
State;</text>
</subparagraph><subparagraph id="id9B7D55A3EB7B45C89639E090A93206B3"><enum>(B)</enum><text>notifies the
insurance department of a nonadopting State (or other State agency), not later
than 30 days prior to the offering of coverage described in this subparagraph,
that the issuer intends to offer health insurance coverage in that State
consistent with the harmonized standards published pursuant to section 2933(d),
and provides with such notice a copy of any insurance policy that it intends to
offer in the State, its most recent annual and quarterly financial reports, and
any other information required to be filed with the insurance department of the
State (or other State agency) by the Secretary in regulations; and</text>
</subparagraph><subparagraph id="id5F9A084DC9714CD9A946AACB19EB93A7"><enum>(C)</enum><text>includes in the
terms of the health insurance coverage offered in nonadopting States (including
in the terms of any individual certificates that may be offered to individuals
in connection with such health coverage) and filed with the State pursuant to
subparagraph (B), a description of the harmonized standards published pursuant
to section 2933(g)(2) and an affirmation that such standards are a term of the
contract.</text>
</subparagraph></paragraph><paragraph id="id8E111DFD8D34447C8749D307BCA1DA5E"><enum>(3)</enum><header>Harmonized
standards</header><text>The term <term>harmonized standards</term> means the
standards certified by the Secretary under section 2933(d).</text>
</paragraph><paragraph id="id61CD43E287204793B681DFA8088C5A7D"><enum>(4)</enum><header>Health
insurance coverage</header><text>The term <term>health insurance
coverage</term> means any coverage issued in the health insurance market,
except that such term shall not include excepted benefits (as defined in
section 2791(c).</text>
</paragraph><paragraph id="idDEAF137068DB4C1B9B99197302769CFA"><enum>(5)</enum><header>Nonadopting
state</header><text>The term <term>nonadopting State</term> means a State that
fails to enact, within 18 months of the date on which the Secretary certifies
the harmonized standards under this subtitle, the harmonized standards in their
entirety and as the exclusive laws of the State that relate to the harmonized
standards.</text>
</paragraph><paragraph id="id405438CD4867456D8FA04BE9BD8E6B1B"><enum>(6)</enum><header>State
law</header><text>The term <term>State law</term> means all laws, decisions,
rules, regulations, or other State actions (including actions by a State
agency) having the effect of law, of any State.</text>
</paragraph></section><section id="idA5CD306ABD7A427D80E08865E5D1FCFD"><enum>2932.</enum><header>Harmonized
standards</header>
<subsection id="idC1675EF1FD63429A930DA4A7B7908155"><enum>(a)</enum><header>Board</header>
<paragraph id="id1180FF4532BA4699B848852AE28628D3"><enum>(1)</enum><header>Establishment</header><text>Not
later than 3 months after the date of enactment of this title, the Secretary,
in consultation with the NAIC, shall establish the Health Insurance Consensus
Standards Board (referred to in this subtitle as the <quote>Board</quote>) to
develop recommendations that harmonize inconsistent State health insurance laws
in accordance with the procedures described in subsection (b).</text>
</paragraph><paragraph id="id3F30D66884D744A48CC5A8FFFC0C8FF9"><enum>(2)</enum><header>Composition</header>
<subparagraph id="idA7D2529E3CDA4E708887496856AE905D"><enum>(A)</enum><header>In
general</header><text>The Board shall be composed of the following voting
members to be appointed by the Secretary after considering the recommendations
of professional organizations representing the entities and constituencies
described in this paragraph:</text>
<clause id="idC0AB54DE552F4E1AA2B46094112E2EC6"><enum>(i)</enum><text>Four State
insurance commissioners as recommended by the National Association of Insurance
Commissioners, of which 2 shall be Democrats and 2 shall be Republicans, and of
which one shall be designated as the chairperson and one shall be designated as
the vice chairperson.</text>
</clause><clause id="idA61A48F29CE2443F8AF3F58EA6C0B3C2"><enum>(ii)</enum><text>Four
representatives of State government, two of which shall be governors of States
and two of which shall be State legislators, and two of which shall be
Democrats and two of which shall be Republicans.</text>
</clause><clause id="idFC25D07801C9456FB0ACFAF4F406EEC7"><enum>(iii)</enum><text>Four
representatives of health insurers, of which one shall represent insurers that
offer coverage in the small group market, one shall represent insurers that
offer coverage in the large group market, one shall represent insurers that
offer coverage in the individual market, and one shall represent carriers
operating in a regional market.</text>
</clause><clause id="id8BCFB349559040D3A1258A807D392C23"><enum>(iv)</enum><text>Two
representatives of insurance agents and brokers.</text>
</clause><clause id="id6BE5FF50591A41DDAE754E268607A2EF"><enum>(v)</enum><text>Two independent
representatives of the American Academy of Actuaries who have familiarity with
the actuarial methods applicable to health insurance.</text>
</clause></subparagraph><subparagraph commented="no" id="idB9075FFC48A14B2CBA2F19250B75C63C"><enum>(B)</enum><header>Ex officio
member</header><text>A representative of the Secretary shall serve as an ex
officio member of the Board.</text>
</subparagraph></paragraph><paragraph id="idD10984C2516C46D9B96F5023D371A61C"><enum>(3)</enum><header>Advisory
panel</header><text>The Secretary shall establish an advisory panel to provide
advice to the Board, and shall appoint its members after considering the
recommendations of professional organizations representing the entities and
constituencies identified in this paragraph:</text>
<subparagraph id="id21A527FCC966439094CB6604DC4AB920"><enum>(A)</enum><text>Two
representatives of small business health plans.</text>
</subparagraph><subparagraph id="id2723C049F505413B88B2C1FA6E087425"><enum>(B)</enum><text>Two
representatives of employers, of which one shall represent small employers and
one shall represent large employers.</text>
</subparagraph><subparagraph id="id6B8A211E70964EEFAFF4C403505BE77F"><enum>(C)</enum><text>Two
representatives of consumer organizations.</text>
</subparagraph><subparagraph id="idB35A6BEF73B24C969E58E30D16CABACC"><enum>(D)</enum><text>Two
representatives of health care providers.</text>
</subparagraph></paragraph><paragraph id="idA37273548597421FB08815336DE77EFF"><enum>(4)</enum><header>Qualifications</header><text>The
membership of the Board shall include individuals with national recognition for
their expertise in health finance and economics, actuarial science, health
plans, providers of health services, and other related fields, who provide a
mix of different professionals, broad geographic representation, and a balance
between urban and rural representatives.</text>
</paragraph><paragraph id="id7B44014680DB4EED9B43CDC5B84EABCE"><enum>(5)</enum><header>Ethical
disclosure</header><text>The Secretary shall establish a system for public
disclosure by members of the Board of financial and other potential conflicts
of interest relating to such members. Members of the Board shall be treated as
employees of Congress for purposes of applying title I of the Ethics in
Government Act of 1978 (Public Law 95–521).</text>
</paragraph><paragraph id="idB43993B4AED74F52BDC334219AA0B14E"><enum>(6)</enum><header>Director and
staff</header><text>Subject to such review as the Secretary deems necessary to
assure the efficient administration of the Board, the chair and vice-chair of
the Board may—</text>
<subparagraph id="id833AAE73B50041B4AE919717A2469FCC"><enum>(A)</enum><text>employ and fix
the compensation of an Executive Director (subject to the approval of the
Comptroller General) and such other personnel as may be necessary to carry out
its duties (without regard to the provisions of title 5, United States Code,
governing appointments in the competitive service);</text>
</subparagraph><subparagraph id="idF4EFD784198D45B68B6BC47A7564DA5A"><enum>(B)</enum><text>seek such
assistance and support as may be required in the performance of its duties from
appropriate Federal departments and agencies;</text>
</subparagraph><subparagraph id="id5BDF35DB01C74F0BA0608C3EB99F2A31"><enum>(C)</enum><text>enter into
contracts or make other arrangements, as may be necessary for the conduct of
the work of the Board (without regard to section 3709 of the Revised Statutes
(41 U.S.C. 5));</text>
</subparagraph><subparagraph id="idE21F7C3623544D89A7034BBED7FF3D89"><enum>(D)</enum><text>make advance,
progress, and other payments which relate to the work of the Board;</text>
</subparagraph><subparagraph commented="no" id="idF24138698B0D4C59B83A437152BFD139"><enum>(E)</enum><text>provide
transportation and subsistence for persons serving without compensation;
and</text>
</subparagraph><subparagraph id="idE4D4967ED4F14992A70F6AAB747A8717"><enum>(F)</enum><text>prescribe such
rules as it deems necessary with respect to the internal organization and
operation of the Board.</text>
</subparagraph></paragraph><paragraph id="id23A0EC80E49F4738AC3FB5838D60AD87"><enum>(7)</enum><header>Terms</header><text>The
members of the Board shall serve for the duration of the Board. Vacancies in
the Board shall be filled as needed in a manner consistent with the composition
described in paragraph (2).</text>
</paragraph></subsection><subsection id="idAAD2EEDA493D43D7833FD6EA07116511"><enum>(b)</enum><header>Development of
harmonized standards</header>
<paragraph id="id3AE36AD55D134CB6AB28C04EA8121D94"><enum>(1)</enum><header>In
general</header><text>In accordance with the process described in subsection
(c), the Board shall identify and recommend nationally harmonized standards for
each of the following process categories:</text>
<subparagraph id="idB075D7FA661B4A12929BCF4732AB64A7"><enum>(A)</enum><header>Form filing and
rate filing</header><text>Form and rate filing standards shall be established
which promote speed to market and include the following defined areas for
States that require such filings:</text>
<clause id="idC4984C22A69C45B1AD297B48DD0DEDD2"><enum>(i)</enum><text>Procedures for
form and rate filing pursuant to a streamlined administrative filing
process.</text>
</clause><clause id="idB8AC29447644474A8ECDFA52D9B99E8C"><enum>(ii)</enum><text>Timeframes for
filings to be reviewed by a State if review is required before they are deemed
approved.</text>
</clause><clause id="id6351F1F429604EDC8306BA8C54DC6A22"><enum>(iii)</enum><text>Timeframes for
an eligible insurer to respond to State requests following its review.</text>
</clause><clause id="id086CA2E01AA34A0F99608B7662A4EB0A"><enum>(iv)</enum><text>A process for an
eligible insurer to self-certify.</text>
</clause><clause id="idE892C77C538745A78819D8E7D9A37C72"><enum>(v)</enum><text>State development
of form and rate filing templates that include only non-preempted State law and
Federal law requirements for eligible insurers with timely updates.</text>
</clause><clause id="id68CF145C8E7E4859AB2B86363721F4B7"><enum>(vi)</enum><text>Procedures for
the resubmission of forms and rates.</text>
</clause><clause id="idC486ECB49A344130AFC0C64E2594A6DE"><enum>(vii)</enum><text>Disapproval
rationale of a form or rate filing based on material omissions or violations of
non-preempted State law or Federal law with violations cited and
explained.</text>
</clause><clause id="idAAA7FEC586744870B35F0B7305BFD1B9"><enum>(viii)</enum><text>For States
that may require a hearing, a rationale for hearings based on violations of
non-preempted State law or insurer requests.</text>
</clause></subparagraph><subparagraph id="id095B1D142340430B9CED1E0FB9121CAE"><enum>(B)</enum><header>Market conduct
review</header><text>Market conduct review standards shall be developed which
provide for the following:</text>
<clause id="idC8DAF6F4F7C74A4EB21110A1A357313F"><enum>(i)</enum><text>Mandatory
participation in national databases.</text>
</clause><clause id="id899F04BFA0B44D9B80E4B1BE5B5B7952"><enum>(ii)</enum><text>The
confidentiality of examination materials.</text>
</clause><clause id="idA53E5D0AAE5041C18510CDFC32425036"><enum>(iii)</enum><text>The
identification of the State agency with primary responsibility for
examinations.</text>
</clause><clause id="idCF1A3F98E391416097F444DF19973B8C"><enum>(iv)</enum><text>Consultation and
verification of complaint data with the eligible insurer prior to State
actions.</text>
</clause><clause id="idE3BACE7DC5044304A0F729B4A384E5C8"><enum>(v)</enum><text>Consistency of
reporting requirements with the recordkeeping and administrative practices of
the eligible insurer.</text>
</clause><clause id="id6CB863456BED4918A860F4AEDAA861B5"><enum>(vi)</enum><text>Examinations
that seek to correct material errors and harmful business practices rather than
infrequent errors.</text>
</clause><clause id="idB7BFD911F53A4376A1EB286DAC3AD11E"><enum>(vii)</enum><text>Transparency
and publishing of the State's examination standards.</text>
</clause><clause id="id865029120B384479B7C1D0B951498A02"><enum>(viii)</enum><text>Coordination
of market conduct analysis.</text>
</clause><clause id="id0CFC4CAF60BB4FA09414154FFF9EB6DB"><enum>(ix)</enum><text>Coordination and
nonduplication between State examinations of the same eligible insurer.</text>
</clause><clause id="idD9EBBD0113934F23A822BCB594ECEAFA"><enum>(x)</enum><text>Rationale and
protocols to be met before a full examination is conducted.</text>
</clause><clause id="id635809F133FD4B83AC5B9DD5AB1E40D4"><enum>(xi)</enum><text>Requirements on
examiners prior to beginning examinations such as budget planning and work
plans.</text>
</clause><clause id="idED29680A811D43BFA6685B52223AFBA8"><enum>(xii)</enum><text>Consideration
of methods to limit examiners' fees such as caps, competitive bidding, or other
alternatives.</text>
</clause><clause id="id1D2B215EBCCF492AB5E1B02390432C8A"><enum>(xiii)</enum><text>Reasonable
fines and penalties for material errors and harmful business practices.</text>
</clause></subparagraph><subparagraph id="idD9EEF9A11F64432B87BD00DB0984A0E5"><enum>(C)</enum><header>Prompt payment
of claims</header><text>The Board shall establish prompt payment standards for
eligible insurers based on standards similar to those applicable to the Social
Security Act as set forth in section 1842(c)(2) of such Act (42 U.S.C.
1395u(c)(2)). Such prompt payment standards shall be consistent with the timing
and notice requirements of the claims procedure rules to be specified under
subparagraph (D), and shall include appropriate exceptions such as for fraud,
nonpayment of premiums, or late submission of claims.</text>
</subparagraph><subparagraph id="idD83C7DC536024BFD9161C8AAB816C440"><enum>(D)</enum><header>Internal
review</header><text>The Board shall establish standards for claims procedures
for eligible insurers that are consistent with the requirements relating to
initial claims for benefits and appeals of claims for benefits under the
Employee Retirement Income Security Act of 1974 as set forth in section 503 of
such Act (29 U.S.C. 1133) and the regulations thereunder.</text>
</subparagraph></paragraph><paragraph id="id3A49955943D549829C21EF76AEDDBCAD"><enum>(2)</enum><header>Recommendations</header><text>The
Board shall recommend harmonized standards for each element of the categories
described in subparagraph (A) through (D) of paragraph (1) within each such
market. Notwithstanding the previous sentence, the Board shall not recommend
any harmonized standards that disrupt, expand, or duplicate the benefit,
service, or provider mandate standards provided in the Benefit Choice Standards
pursuant to section 2922(a).</text>
</paragraph></subsection><subsection id="idABECC1AC55D746B382A65735B9369A26"><enum>(c)</enum><header>Process for
identifying harmonized standards</header>
<paragraph id="id8AE7CE5939764F0A8112709719FF9229"><enum>(1)</enum><header>In
general</header><text>The Board shall develop recommendations to harmonize
inconsistent State insurance laws with respect to each of the process
categories described in subparagraphs (A) through (D) of subsection
(b)(1).</text>
</paragraph><paragraph id="id704DD078975C45FDB3F8B3E14A57E08A"><enum>(2)</enum><header>Requirements</header><text>In
adopting standards under this section, the Board shall consider the
following:</text>
<subparagraph id="idE5DF8F1A7F8F4254B389C596C38405E2"><enum>(A)</enum><text>Any model acts or
regulations of the National Association of Insurance Commissioners in each of
the process categories described in subparagraphs (A) through (D) of subsection
(b)(1).</text>
</subparagraph><subparagraph id="idC810C65434344C42B644A2A0CC8FEEF5"><enum>(B)</enum><text>Substantially
similar standards followed by a plurality of States, as reflected in existing
State laws, relating to the specific process categories described in
subparagraphs (A) through (D) of subsection (b)(1).</text>
</subparagraph><subparagraph id="idBB656802BDCD4911815AE96C4E087ADE"><enum>(C)</enum><text>Any Federal law
requirement related to specific process categories described in subparagraphs
(A) through (D) of subsection (b)(1).</text>
</subparagraph><subparagraph id="id3ED342C784134A13A15895BA5144731D"><enum>(D)</enum><text>In the case of
the adoption of any standard that differs substantially from those referred to
in subparagraphs (A), (B), or (C), the Board shall provide evidence to the
Secretary that such standard is necessary to protect health insurance consumers
or promote speed to market or administrative efficiency.</text>
</subparagraph><subparagraph id="id71F3F05BCBDE4EEE9DB6B30AEA5CFF4C"><enum>(E)</enum><text>The criteria
specified in clauses (i) through (iii) of subsection (d)(2)(B).</text>
</subparagraph></paragraph></subsection><subsection id="id60DCBABC7F7C4A61913BEEDE4E282E80"><enum>(d)</enum><header>Recommendations
and certification by Secretary</header>
<paragraph id="id26882A52A6714974BDC5525D9E381992"><enum>(1)</enum><header>Recommendations</header><text>Not
later than 18 months after the date on which all members of the Board are
selected under subsection (a), the Board shall recommend to the Secretary the
certification of the harmonized standards identified pursuant to subsection
(c).</text>
</paragraph><paragraph id="idCCD411C235F343FCBFB9AD5D53DBE333"><enum>(2)</enum><header>Certification</header>
<subparagraph id="id5A2DEB7C800941B4A233BFECFD343924"><enum>(A)</enum><header>In
general</header><text>Not later than 120 days after receipt of the Board's
recommendations under paragraph (1), the Secretary shall certify the
recommended harmonized standards as provided for in subparagraph (B), and issue
such standards in the form of an interim final regulation.</text>
</subparagraph><subparagraph id="idF8661997564F47A4AD41BBE5B5D4592B"><enum>(B)</enum><header>Certification
process</header><text>The Secretary shall establish a process for certifying
the recommended harmonized standard, by category, as recommended by the Board
under this section. Such process shall—</text>
<clause id="id79D129BC8D8B457F9BBC4AC915D9C758"><enum>(i)</enum><text>ensure that the
certified standards for a particular process area achieve regulatory
harmonization with respect to health plans on a national basis;</text>
</clause><clause id="id208CBC82807A47CA885D2399D60BB8F2"><enum>(ii)</enum><text>ensure that the
approved standards are the minimum necessary, with regard to substance and
quantity of requirements, to protect health insurance consumers and maintain a
competitive regulatory environment; and</text>
</clause><clause id="id48094E9EA8C247BF8D03829AB8A93E23"><enum>(iii)</enum><text>ensure that the
approved standards will not limit the range of group health plan designs and
insurance products, such as catastrophic coverage only plans, health savings
accounts, and health maintenance organizations, that might otherwise be
available to consumers.</text>
</clause></subparagraph></paragraph><paragraph id="id3C72DB061F23482389232611415D4644"><enum>(3)</enum><header>Application and
effective date</header><text>The standards certified by the Secretary under
paragraph (2) shall apply and become effective on the date that is 18 months
after the date on which the Secretary certifies the harmonized
standards.</text>
</paragraph></subsection><subsection id="id194E658FA0C049BF9127F780638AB1F5"><enum>(e)</enum><header>Termination</header><text>The
Board shall terminate and be dissolved after making the recommendations to the
Secretary pursuant to subsection (d)(1).</text>
</subsection><subsection commented="no" id="idDA43B716C32C47D6BB193B06E3403E64"><enum>(f)</enum><header>Ongoing
review</header><text>Not earlier than 3 years after the termination of the
Board under subsection (e), and not earlier than every 3 years thereafter, the
Secretary, in consultation with the National Association of Insurance
Commissioners and the entities and constituencies represented on the Board and
the Advisory Panel, shall prepare and submit to the appropriate committees of
Congress a report that assesses the effect of the harmonized standards applied
under this section on access, cost, and health insurance market functioning.
The Secretary may, based on such report and applying the process established
for certification under subsection (d)(2)(B), in consultation with the National
Association of Insurance Commissioners and the entities and constituencies
represented on the Board and the Advisory Panel, update the harmonized
standards through notice and comment rulemaking.</text>
</subsection><subsection id="id5A631E854DAD4789837ADD2146BE5DB4"><enum>(g)</enum><header>Publication</header>
<paragraph id="id17D0B844307F4E2EBE8368957ACA54E6"><enum>(1)</enum><header>Listing</header><text>The
Secretary shall maintain an up to date listing of all harmonized standards
certified under this section on the Internet website of the Department of
Health and Human Services.</text>
</paragraph><paragraph id="id727D03940C2C44D9B860AEE44C759FD3"><enum>(2)</enum><header>Sample contract
language</header><text>The Secretary shall publish on the Internet website of
the Department of Health and Human Services sample contract language that
incorporates the harmonized standards certified under this section, which may
be used by insurers seeking to qualify as an eligible insurer. The types of
harmonized standards that shall be included in sample contract language are the
standards that are relevant to the contractual bargain between the insurer and
insured.</text>
</paragraph></subsection><subsection id="id6FDBA9DEFC77461780FB0E92A3125A35"><enum>(h)</enum><header>State adoption
and enforcement</header><text>Not later than 18 months after the certification
by the Secretary of harmonized standards under this section, the States may
adopt such harmonized standards (and become an adopting State) and, in which
case, shall enforce the harmonized standards pursuant to State law.</text>
</subsection></section><section id="id760F03218416498DAAB1FAFCC236BF9C"><enum>2933.</enum><header>Application
and preemption</header>
<subsection id="idC202C0AC5BBE4ACD84131CE8C0113C5C"><enum>(a)</enum><header>Superceding of
state law</header>
<paragraph id="id78D66985C0344D24ACF36C4F6E1CE855"><enum>(1)</enum><header>In
general</header><text>The harmonized standards certified under this subtitle
and applied as provided for in section 2933(d)(3), shall supersede any and all
State laws of a non-adopting State insofar as such State laws relate to the
areas of harmonized standards as applied to an eligible insurer, or health
insurance coverage issued by a eligible insurer, including with respect to
coverage issued to a small business health plan, in a nonadopting State.</text>
</paragraph><paragraph id="id78FE429CF96243D9AB82C6D30C9C97DC"><enum>(2)</enum><header>Nonadopting
states</header><text>This subtitle shall supersede any and all State laws of a
nonadopting State (whether enacted prior to or after the date of enactment of
this title) insofar as they may—</text>
<subparagraph id="id69C5076D9109426688662A986174D1AC"><enum>(A)</enum><text>prohibit an
eligible insurer from offering, marketing, or implementing health insurance
coverage consistent with the harmonized standards; or</text>
</subparagraph><subparagraph id="idE0EB1C8363364B2BAA479F60C6F11817"><enum>(B)</enum><text>have the effect
of retaliating against or otherwise punishing in any respect an eligible
insurer for offering, marketing, or implementing health insurance coverage
consistent with the harmonized standards under this subtitle.</text>
</subparagraph></paragraph></subsection><subsection id="idD11FDE0B73EB4CADA4506F21BA534DA9"><enum>(b)</enum><header>Savings clause
and construction</header>
<paragraph id="id0C13DFD4886947F1B22B7391B60E2FC8"><enum>(1)</enum><header>Nonapplication
to adopting states</header><text>Subsection (a) shall not apply with respect to
adopting States.</text>
</paragraph><paragraph id="id1F5A284065754993B4542E2F78DD9B85"><enum>(2)</enum><header>Nonapplication
to certain insurers</header><text>Subsection (a) shall not apply with respect
to insurers that do not qualify as eligible insurers who offer health insurance
coverage in a nonadopting State.</text>
</paragraph><paragraph id="id669E8AEBB035457589315551762D06BC"><enum>(3)</enum><header>Nonapplication
where obtaining relief under state law</header><text>Subsection (a)(1) shall
not supercede any State law of a nonadopting State to the extent necessary to
permit individuals or the insurance department of the State (or other State
agency) to obtain relief under State law to require an eligible insurer to
comply with the harmonized standards under this subtitle.</text>
</paragraph><paragraph id="idE8ED42FA02BE4951888B8241FD3E8B97"><enum>(4)</enum><header>No effect on
preemption</header><text>In no case shall this subtitle be construed to limit
or affect in any manner the preemptive scope of sections 502 and 514 of the
Employee Retirement Income Security Act of 1974. In no case shall this subtitle
be construed to create any cause of action under Federal or State law or
enlarge or affect any remedy available under the Employee Retirement Income
Security Act of 1974.</text>
</paragraph></subsection><subsection id="id15E956FB96EF43A4AA7FFE3637F41CF4"><enum>(c)</enum><header>Effective
date</header><text>This section shall apply beginning on the date that is 18
months after the date on harmonized standards are certified by the Secretary
under this subtitle.</text>
</subsection></section><section id="idCE344264B53E4499862589F880F32747"><enum>2934.</enum><header>Civil actions
and jurisdiction</header>
<subsection id="id28E6799828344DEE8AC005E8DD70D68C"><enum>(a)</enum><header>In
general</header><text>The district courts of the United States shall have
exclusive jurisdiction over civil actions involving the interpretation of this
subtitle.</text>
</subsection><subsection id="id0EBBFAF7A1B34C22A9AD87E79AA79C0B"><enum>(b)</enum><header>Actions</header><text>An
eligible insurer may bring an action in the district courts of the United
States for injunctive or other equitable relief against any officials or agents
of a nonadopting State in connection with any conduct or action, or proposed
conduct or action, by such officials or agents which violates, or which would
if undertaken violate, section 2933.</text>
</subsection><subsection id="id2E080EC2F2AA4C6BBD7B3B1558854EAD"><enum>(c)</enum><header>Direct filing
in Court of Appeals</header><text>At the election of the eligible insurer, an
action may be brought under subsection (b) directly in the United States Court
of Appeals for the circuit in which the nonadopting State is located by the
filing of a petition for review in such Court.</text>
</subsection><subsection id="id7396A183158C4159B48F0AE201863666"><enum>(d)</enum><header>Expedited
review</header>
<paragraph id="id11F61AEA425241EAAA5E1711C1518735"><enum>(1)</enum><header>District
court</header><text>In the case of an action brought in a district court of the
United States under subsection (b), such court shall complete such action,
including the issuance of a judgment, prior to the end of the 120-day period
beginning on the date on which such action is filed, unless all parties to such
proceeding agree to an extension of such period.</text>
</paragraph><paragraph id="idF9975B0BBC9F4ED081BDE406451C20E5"><enum>(2)</enum><header>Court of
Appeals</header><text>In the case of an action brought directly in a United
States Court of Appeal under subsection (c), or in the case of an appeal of an
action brought in a district court under subsection (b), such Court shall
complete all action on the petition, including the issuance of a judgment,
prior to the end of the 60-day period beginning on the date on which such
petition is filed with the Court, unless all parties to such proceeding agree
to an extension of such period.</text>
</paragraph></subsection><subsection id="idD7154F37C1524F779D2137B6FB03F069"><enum>(e)</enum><header>Standard of
review</header><text>A court in an action filed under this section, shall
render a judgment based on a review of the merits of all questions presented in
such action and shall not defer to any conduct or action, or proposed conduct
or action, of a nonadopting State.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="idB170E5E827504BA78BBEE4646EC10ED5" section-type="subsequent-section"><enum>2935.</enum><header>Authorization of
appropriations; rule of construction</header>
<subsection commented="no" display-inline="no-display-inline" id="id598330AD9C894C5D88B82986BEFF1EC6"><enum>(a)</enum><header>Authorization
of appropriations</header><text display-inline="yes-display-inline">There are
authorized to be appropriated such sums as may be necessary to carry out this
subtitle.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDdc7d124bcb6740c0bf5d21a2f174c782"><enum>(b)</enum><header>Health savings
accounts</header><text>Nothing in this subtitle shall be construed to create
any mandates for coverage of any benefits below the deductible levels set for
any health savings account-qualified health plan pursuant to section 223 of the
Internal Revenue Code of
1986.</text>
</subsection></section></subtitle><after-quoted-block>.</after-quoted-block></quoted-block>
</section>