[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1322 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 1322

To amend title I of the Employee Retirement Income Security Act of 1974 
      to provide emergency protection for retiree health benefits.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 5, 2009

  Mr. Tierney (for himself, Mr. George Miller of California, and Mr. 
   Andrews) introduced the following bill; which was referred to the 
                    Committee on Education and Labor

_______________________________________________________________________

                                 A BILL


 
To amend title I of the Employee Retirement Income Security Act of 1974 
      to provide emergency protection for retiree health benefits.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Emergency Retiree Health Benefits 
Protection Act of 2009''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds the following:
            (1) Retired participants of group health plans regulated by 
        the Employee Retirement Income Security Act of 1974 (ERISA) 
        have been severely harmed by the virtually unchecked practices 
        of sponsors of such plans involving the post-retirement 
        cancellation or reduction of health benefits which retirees 
        counted on receiving for their lifetimes.
            (2) Such widespread post-retirement reductions in retiree 
        health benefits has led to a crisis in retiree healthcare in 
        which retirees--
                    (A) have been unable to substitute individual 
                coverage for the group coverage they lost, or, in order 
                to obtain individual coverage, have jeopardized their 
                economic security in retirement;
                    (B) because of preexisting medical conditions 
                cannot obtain substitute coverage that they can afford 
                without depleting their life savings or have been 
                unable to obtain adequate medical care or medical care 
                they had relied on to deal with serious illness;
                    (C) have sustained catastrophic illnesses or 
                injuries or otherwise experienced a marked 
                deterioration in their medical conditions or health as 
                a result of post-retirement changes to their medical 
                benefits;
                    (D) have been transferred indiscriminately into 
                improperly or inadequately managed health maintenance 
                organizations or other managed care entities, resulting 
                in the worsening rather than improvement of prior 
                medical conditions; and
                    (E) in many instances, have failed to obtain 
                adequate relief in the courts due to highly restrictive 
                judicial interpretations which are inconsistent with 
                ERISA's underlying protective purposes.
            (3) The crisis in retirees' healthcare generated by the 
        plan sponsor practice of post-retirement cancellations or 
        reductions of previously promised retiree health benefits has 
        led to a widespread loss of confidence in the integrity of 
        ERISA-regulated group health plans and the ability of ERISA 
        itself to adequately protect retiree health benefits.
            (4) A strong and dependable private sector retiree health 
        system is necessary to the essential health of our Nation's 
        senior citizens.
    (b) Purposes.--The purposes of this Act are to ensure that the 
reasonable health benefit expectations of retirees from ERISA-regulated 
group health plans are fulfilled, to minimize the incidence of 
prolonged legal disputes arising out of the post-retirement 
cancellation or reduction of retiree health benefits from such plans, 
and to prevent further adverse effects on retiree health arising from 
such post-retirement changes. To this end, the purposes of this Act 
also include the following:
            (1) to safeguard retired participants of group health plans 
        subject to the Employee Retirement Income Security Act of 1974 
        (29 U.S.C. 1001 et seq.) from loss or reduction of their health 
        benefits from such plans by barring plan sponsors from 
        canceling or reducing such benefits after the dates such 
        participants retire and when they no longer are able to absorb 
        such losses or reductions without experiencing adverse effects 
        on their health or finances;
            (2) to establish an enforceable obligation on the part of 
        sponsors of such group health plans to restore health benefits 
        previously taken away from retired participants of such plans 
        to the extent such benefits were canceled or altered after the 
        dates such participants retired and the plan sponsor would not 
        sustain substantial business hardship by restoring such 
        benefits; and
            (3) to establish an Emergency Retiree Health Loan Guarantee 
        Program to assist sponsors of group health plans subject to the 
        obligation to restore retiree health benefits under this Act to 
        obtain credit to assist them in discharging such obligations by 
        providing retiree health loan guarantees that would encourage 
        the availability of such credit.

SEC. 3. AMENDMENT OF EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 TO 
              PROVIDE RETIREE HEALTH BENEFIT PROTECTIONS IN GROUP 
              HEALTH PLANS.

    (a) In General.--Subtitle B of title I of the Employee Retirement 
Income Security Act of 1974 is amended by adding at the end a new part 
8 as follows:

         ``PART 8--EMERGENCY RETIREE HEALTH BENEFIT PROTECTIONS

``SEC. 801. PROHIBITION AGAINST POST-RETIREMENT REDUCTIONS OF RETIREE 
              HEALTH BENEFITS BY GROUP HEALTH PLANS.

    ``(a) In General.--Notwithstanding that a group health plan 
described in subsection (b) may contain a provision reserving the 
general power to amend or terminate the plan or a provision 
specifically authorizing the plan to make post-retirement reductions in 
retiree health benefits, it shall be prohibited for any group health 
plan, whether through amendment or otherwise, to reduce the benefits 
provided to a retired participant or his or her beneficiary under the 
terms of the plan if such reduction of benefits occurs after the date 
the participant retired for purposes of the plan and reduces benefits 
that were provided to the participant, or his or her beneficiary, as of 
the date the participant retired. Any group health plan provision which 
purports to authorize the reduction of benefits in a manner 
inconsistent with the foregoing prohibition shall be void as against 
public policy.
    ``(b) Group Health Plan.--The term `group health plan' shall have 
the same meaning as in section 607(1).
    ``(c) Prohibited Reduction of Benefits.--As used in this section, 
references to a prohibited reduction of benefits means any group health 
plan amendment or other action which has the effect of--
            ``(1) canceling, decreasing or limiting the amount, type, 
        level, or form of any benefit or option provided prior to the 
        amendment or action;
            ``(2) imposing or increasing the out-of-pocket costs a 
        retired participant, or his or her beneficiary, must pay in 
        order to keep or obtain any benefits that were provided to the 
        participant or beneficiary prior to the amendment or action; or
            ``(3) modifying the manner by which medical services are 
        delivered under the plan so that after the amendment or action 
        a retired participant, or his or her beneficiary, has less 
        ready access to the delivery of any such medical services than 
        the participant or beneficiary had prior to the amendment or 
        action.
    ``(d) Treatment of Plan Termination.--
            ``(1) In general.--Subject to paragraph (2), a termination 
        of a group health plan shall be treated as violating the 
        prohibition contained in this section if, after the 
        termination, the plan sponsor of the terminated plan fails to 
        continue to provide to the participants who retired prior to 
        the termination and to their beneficiaries the same retiree 
        health benefits that were provided prior to the termination.
            ``(2) Waiver.--Paragraph (1) shall not apply in the case of 
        the termination of a group health plan if the Secretary issues 
        a waiver under this paragraph in connection with such 
        termination. The Secretary shall issue such a waiver if and 
        only if the plan sponsor demonstrates to the satisfaction of 
        the Secretary, in accordance with regulations prescribed by the 
        Secretary, that such plan sponsor will be unable to continue in 
        business unless such a waiver is issued.
    ``(e) Consent or Authorization by Participant.--A reduction of 
benefits shall not be treated as prohibited by this section if such 
reduction is consented to in writing by any retired participant or is 
authorized with respect to the retired participant under the terms of 
one or more agreements which the Secretary finds to be collective 
bargaining agreements between one or more employee representatives who 
were representing such participant at the time of the entry into such 
agreement and one or more employers.

``SEC. 802. ADOPTION BY GROUP HEALTH PLANS OF PROVISION BARRING POST-
              RETIREMENT REDUCTIONS IN RETIREE HEALTH BENEFITS.

    ``Every group health plan shall contain a provision which expressly 
bars the plan, or any fiduciary of the plan, from reducing the benefits 
provided under the plan to a retired participant, or his or her 
beneficiary, if such reduction affects the benefits provided to the 
participant or beneficiary as of the date the participant retired for 
purposes of the plan and such reduction occurs after the participant's 
retirement.

``SEC. 803. RESTORATION BY GROUP HEALTH PLANS OF BENEFITS REDUCED AFTER 
              RETIREMENT.

    ``(a) In General.--The plan sponsor of each group health plan shall 
provide, in accordance with this section, the option of benefit 
restoration to each retired participant that meets the following 
requirements:
            ``(1) The retired participant is entitled to benefit 
        coverage under the plan as of the date of enactment of the 
        Emergency Retiree Health Benefits Protection Act of 2009.
            ``(2) The amount, type, level, or form of any benefits or 
        option provided to the retired participant under the plan as of 
        the date the participant retired was reduced after the 
        participant's date of retirement. For purposes of the preceding 
        sentence, the term `reduced' has the same meaning as in section 
        801(c).
            ``(3) The retired participant has elected to restore 
        benefits under the plan within the restoration period 
        prescribed by subsection (c) and in accordance with such 
        procedures established by the plan pursuant to regulations of 
        the Secretary.
    ``(b) Exception for Certain Plans.--In accordance with regulations 
prescribed by the Secretary, subsection (a) shall not apply to any 
group health plan with less than 100 participants both on and after the 
date of enactment of the Emergency Retiree Health Benefits Protection 
Act of 2009.
    ``(c) Restoration Period.--The term `restoration period' means the 
period which--
            ``(1) begins not later than 1 year after the date of 
        enactment of the Emergency Retiree Health Benefits Protection 
        Act of 2009;
            ``(2) ends before 2 years from such date, unless extended 
        by the Secretary pursuant to section 804(g); and
            ``(3) is of no less than 60 days duration.
    ``(d) Notice Requirements Concerning Restoration of Benefits.--In 
accordance with regulations prescribed by the Secretary, each group 
health plan subject to the requirements of subsection (a) shall, within 
no less than 30 days prior to the commencement of the plan's 
restoration of benefits period, provide written notice to each retired 
participant of the plan who meets the requirements of subsection (a) of 
the following:
            ``(1) A description of all benefits the retired participant 
        is entitled to have restored.
            ``(2) The administrative procedure established under the 
        plan which may be used to submit a claim for the restoration of 
        any benefits.
            ``(3) An itemization of the value of each benefit the 
        retired participant is entitled to have restored, as determined 
        in accordance with regulations of the Secretary, and the total 
        value of all such benefits.
            ``(4) A description of any post-retirement increases in 
        retiree health benefits the retired participant received which 
        the plan sponsor could rescind if the retired participant 
        asserts a claim for the restoration of benefits.
            ``(5) An itemization of the value of each retiree health 
        benefit the plan sponsor could rescind, as determined in 
        accordance with regulations of the Secretary, and the total 
        value of all such benefits.
            ``(6) If the plan sponsor has filed an application for a 
        substantial business hardship exemption under section 804, the 
        date such application was filed, the date notice of such 
        application was given to retired participants entitled to 
        submit a claim for the restoration of benefits, and the status 
        of such application as of the date of the notice sent pursuant 
        to this subsection.
            ``(7) Such other information in such form and detail as may 
        be prescribed by the Secretary to carry out the purposes of 
        this part.
    ``(e) Deadline for Restoration of Benefits.--Regardless of any 
extension that may be granted by the Secretary pursuant to section 
804(g), all benefits required to be restored under this section shall 
be restored within no more than 3 years from the date of enactment of 
the Emergency Retiree Health Benefits Protection Act of 2009, or the 
date the plan sponsor files an application for an exemption under 
section 804, whichever comes last.

``SEC. 804. EXEMPTION FROM RESTORATION OF BENEFITS REQUIREMENTS.

    ``(a) Application for Exemption.--Any plan sponsor of a group 
health plan that would sustain substantial business hardship if 
required to fulfill, in whole or in part, the restoration of benefits 
requirements contained in section 803, may file an application for an 
exemption with the Secretary from any or all of such requirements.
    ``(b) Authority for Waiver or Variance.--In response to an 
application filed by a plan sponsor pursuant to subsection (a), the 
Secretary may waive or vary the requirements of section 803 with 
respect to any or all of such requirements, including postponing for 
reasonable periods of time the obligation of the plan sponsor to 
restore reduced benefits, if the Secretary finds that compliance by the 
plan sponsor with the requirements of section 803 would--
            ``(1) be adverse to the interests of plan participants in 
        the aggregate;
            ``(2) not be administratively feasible; and
            ``(3) cause substantial business hardship to the plan 
        sponsor.
    ``(c) Factors Taken Into Account.--For purposes of this section, 
the factors to be taken into account in determining substantial 
business hardship shall include (but shall not be limited to) whether--
            ``(1) the plan sponsor is operating at an economic loss;
            ``(2) compliance with the restoration of benefits 
        requirements would necessitate substantial future reductions in 
        health benefits provided to participants under the plan or 
        cause a substantial decline in employment with the plan 
        sponsor;
            ``(3) it is reasonable to expect that the plan will be 
        continued only if a waiver or appropriate variance is granted; 
        and
            ``(4) the provisions of the Retiree Health Loan Guarantee 
        Program established under section 805 are unavailable to the 
        plan sponsor submitting the application, or, if available, 
        still would not provide a sufficient basis for denying a waiver 
        or variance.
    ``(d) Requirement of Satisfactory Evidence.--
            ``(1) In general.--The Secretary shall, before granting a 
        waiver or variance under this section, require each applicant 
        to provide evidence satisfactory to the Secretary that the 
        applicant has provided timely written notice of the filing of 
        an application for such waiver or variance to each retired 
        participant entitled to submit a claim for the restoration of 
        benefits under the applicant's plan.
            ``(2) Timeliness.--For purposes of paragraph (1), a written 
        notice shall be considered timely if it is provided not later 
        than 60 days prior to the date the plan sponsor files an 
        application for a waiver or variance under this section.
            ``(3) Information required.--The notice referred to in 
        paragraph (1) shall include information with respect to the 
        specific relief that will be sought by the plan sponsor's 
        application, the period of time for which relief is sought, and 
        such other relevant information as the Secretary may prescribe.
    ``(e) Participation in Proceedings by Retired Plan Participants.--
Each retired participant entitled to submit a claim for the restoration 
of benefits within the meaning of this section shall be provided a 
reasonable opportunity to submit comments or otherwise participate in 
any proceeding established by the Secretary to determine whether to 
grant or deny an application for a waiver or variance filed by the 
retired participant's plan sponsor.
    ``(f) Exception for Certain Applications.--The Secretary shall not 
be authorized to grant any application for a waiver or variance 
purporting to satisfy the requirements of subsection (b) if--
            ``(1) within the 5-year period preceding the date of the 
        plan sponsor's application the plan sponsor could have 
        transferred excess pension assets to a health benefits account 
        within the meaning of section 420 of the Internal Revenue Code 
        of 1986 but failed to do so, and the plan sponsor is submitting 
        an application on behalf of such retiree health account; or
            ``(2) the plan sponsor submitting the application also 
        maintains a fully funded pension plan with respect to which--
                    ``(A) retired participants eligible to submit a 
                claim for the restoration of benefits under section 803 
                are also eligible to receive ad hoc cost-of-living 
                adjustment benefits;
                    ``(B) the assets of the fully funded pension plan, 
                over the past 5 years preceding the date of application 
                for a waiver or variance, on average have exceeded 120 
                percent of the plan's liabilities;
                    ``(C) the plan had no minimum funding requirement 
                to satisfy within the 5 years preceding the date of 
                application for the waiver or variance and the plan 
                sponsor submitting the application made no minimum 
                funding contribution to the fully funded pension plan 
                during such 5-year period; and
                    ``(D) the plan sponsor submitting the application 
                for a waiver or variance failed to provide an ad hoc 
                cost-of-living adjustment benefit from the fully funded 
                pension plan during the 5-year period preceding the 
                date of application for the waiver or variance.
    ``(g) Running of Restoration Period Suspended.--The submission of 
an application for a waiver or variance pursuant to this section shall 
suspend the running of any relevant restoration period as specified in 
subsection (c). Where appropriate, the Secretary shall direct the 
reopening of any relevant restoration period upon the final conclusion 
of proceedings to determine whether an application should be granted or 
denied.

``SEC. 805. ESTABLISHMENT OF EMERGENCY RETIREE HEALTH LOAN GUARANTEE 
              PROGRAM.

    ``(a) Definitions.--For purposes of this section--
            ``(1) Board.--The term `Board' means the Emergency Retiree 
        Health Loan Guarantee Board established under subsection (c).
            ``(2) Program.--The term `Program' means the Emergency 
        Retiree Health Loan Guarantee Program established under 
        subsection (b).
            ``(3) Eligible plan sponsor.--The term `eligible plan 
        sponsor' means any plan sponsor as defined in section 3(16)(B) 
        that maintains a group health plan subject to the retiree 
        health benefits restoration requirements of section 803.
    ``(b) Establishment of Emergency Retiree Health Loan Guarantee 
Program.--There is established the Retiree Health Loan Guarantee 
Program, to be administered by the Board, the purpose of which is to 
provide loan guarantees to eligible plan sponsors in accordance with 
this section.
    ``(c) Retiree Health Loan Guarantee Board Membership.--There is 
established a Retiree Health Loan Guarantee Board, which shall be 
composed of--
            ``(1) the Secretary of Labor, who shall serve as Chairman 
        of the Board;
            ``(2) the Secretary of Commerce;
            ``(3) the Secretary of the Treasury;
            ``(4) the Secretary of Health and Human Services; and
            ``(5) the Chairman of the Council of Economic Advisers.
    ``(d) Retiree Health Loan Guarantee Program.--
            ``(1) Authority.--The Program may guarantee loans provided 
        by private banking and investment institutions to eligible plan 
        sponsors for purposes of assisting such plan sponsors to meet 
        their obligations under section 803. Such loan guarantees shall 
        be provided to the extent provided in advance in appropriation 
        Acts pursuant to paragraph (4) and only in accordance with the 
        procedures, rules, and regulations established by the Board.
            ``(2) Total guarantee limit.--The aggregate amount of loans 
        guaranteed and outstanding at any time under this section may 
        not exceed $5,000,000,000.
            ``(3) Individual guarantee limit.--The aggregate amount of 
        loans guaranteed under this section with respect to a single 
        eligible plan sponsor may not exceed $5,000,000.
            ``(4) Additional costs.--For the additional cost of loans 
        guaranteed under this subsection, including the costs of 
        modifying the loans, as defined in section 502 of the 
        Congressional Budget Act of 1974 (2 U.S.C. 661a), there is 
        authorized to be appropriated $200,000,000, to remain available 
        until expended.
    ``(e) Requirements for Loan Guarantees.--A loan guarantee may be 
issued under this section upon application to the Board by an eligible 
plan sponsor pursuant to an agreement to provide a loan to that 
eligible plan sponsor by a private bank or investment company, if the 
Board determines that--
            ``(1) credit is not otherwise available to that eligible 
        plan sponsor under reasonable terms and conditions sufficient 
        to meet its financing needs with respect to the restoration of 
        retiree health benefits, as reflected in the financial and 
        business plans of that eligible plan sponsor;
            ``(2) the prospective earning power of that eligible plan 
        sponsor, together with the character and value of the security 
        pledged, furnish reasonable assurance of repayment of the loan 
        to be guaranteed in accordance with its terms;
            ``(3) the loan to be guaranteed bears interest at a rate 
        determined by the Board to be reasonable, taking into account 
        the current average yield on outstanding obligations of the 
        United States with remaining periods of maturity comparable to 
        the maturity of such loan;
            ``(4) the loan to be guaranteed will materially assist that 
        eligible plan sponsor to discharge its obligation to comply 
        with the restoration of benefits requirements contained in 
        section 803; and
            ``(5) the eligible plan sponsor has agreed to an audit by 
        the Government Accountability Office prior to the issuance of 
        the loan guarantee and annually while any such guaranteed loan 
        is outstanding.
    ``(f) Terms and Conditions of Loan Guarantee.--
            ``(1) Loan duration.--All loans guaranteed under this 
        section shall be payable in full not later than December 31, 
        2017, and the terms and conditions of each such loan shall 
        provide that the loan may not be amended or any provision 
        thereof waived without the consent of the Board.
            ``(2) Loan security.--Any commitment to issue a loan 
        guarantee under this section shall contain such affirmative and 
        negative covenants and other protective provisions that the 
        Board determines are appropriate.
            ``(3) Fees.--An eligible plan sponsor receiving a guarantee 
        under this section shall pay a fee in an amount equal to 0.5 
        percent of the outstanding principal balance of the guaranteed 
        loan to the Department of the Treasury.
    ``(g) Reports to Congress.--The Secretary of Labor shall submit 
annually to each House of the Congress a full report of the activities 
of the Board under this section during 2010 and 2011, and annually 
thereafter during such period as any loan guaranteed under this section 
is outstanding. Such report shall be submitted not later than January 
31 of each year (beginning in 2010).
    ``(h) Salaries and Administrative Expenses.--For necessary expenses 
to administer the Program, there is authorized to be appropriated to 
the Department of Labor (and to be transferred to the Office of the 
Assistant Secretary for Pension and Welfare Benefits Administration) 
$10,000,000, to remain available until expended.
    ``(i) Termination of Guarantee Authority.--The authority of the 
Board to make commitments to guarantee any loan under this section 
shall terminate on December 31, 2015.
    ``(j) Regulatory Action.--The Board shall issue such final 
procedures, rules, and regulations as may be necessary to carry out 
this section not later than 90 days after the date of enactment of the 
Emergency Retiree Health Benefits Protection Act of 2009. In no event 
shall the Board issue a procedure, rule, or regulation which authorizes 
it to approve or deny any application for a loan guarantee in more than 
270 days after receipt of such application.

``SEC. 806. EFFECT ON OTHER CLAIMS.

    ``(a) Other Claims Unaffected.--Nothing contained in this part 
shall be construed to alter, impair, or eliminate any claim for retiree 
health benefits based on conduct alleged to violate the terms of a 
group health plan, any provision of this Act (other than this part), or 
both, regardless of whether such conduct occurred prior to, on, or 
after, the effective date of this part.
    ``(b) Other Causes of Action Not Authorized.--Unless the conduct 
giving rise to a claim for retiree health benefits is alleged to 
violate the provisions of this part, nothing contained in this part 
shall be construed to authorize any other cause of action for the 
recovery of retiree health benefits.

``SEC. 807. REGULATIONS.

    ``The Secretary may promulgate such regulations as may be necessary 
to carry out the provisions of this part. The Secretary may promulgate 
any interim final rules as the Secretary deems are appropriate to carry 
out this part.

``SEC. 808. ENFORCEMENT.

    ``The enforcement provisions of sections 501 and 502 shall be 
applicable to this part.''.
    (b) Civil Penalty Section.--Section 502(c) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1132(e)) is amended--
            (1) by redesignating the second paragraph (10) as paragraph 
        (12); and
            (2) by inserting after the first paragraph (10) (relating 
        to Secretarial enforcement authority relating to use of genetic 
        information) the following new paragraph:
            ``(11) Enforcement of retiree health benefit protections.--
        The Secretary may assess a civil penalty of not more than 
        $1,000 for each separate violation of section 801, 802, or 803 
        by any person individually with respect to each participant or 
        beneficiary aggrieved by such violation.''.
    (c) Conforming Amendment.--The table of contents in section 1 of 
such Act is amended by inserting after the item relating to section 734 
the following new items:

         ``Part 8--Emergency Retiree Health Benefit Protections

``Sec. 801. Prohibition against post-retirement reductions of retiree 
                            health benefits by group health plans.
``Sec. 802. Adoption by group health plans of provision barring post-
                            retirement reductions in retiree health 
                            benefits.
``Sec. 803. Restoration by group health plans of benefits reduced after 
                            retirement.
``Sec. 804. Exemption from restoration of benefits requirements.
``Sec. 805. Establishment of Emergency Retiree Health Loan Guarantee 
                            Program.
``Sec. 806. Effect on other claims.
``Sec. 807. Regulations.
``Sec. 808. Enforcement.''.

SEC. 4. SEPARABILITY OF PROVISIONS.

    The provisions of section 509 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1139) shall be applicable to this Act 
and the amendments made thereby.

SEC. 5. EFFECTIVE DATE.

    The amendments made by this Act shall take effect on the date of 
the enactment of this Act.
                                 <all>