1.The table of contents
for this Act is as follows:
Sec. 1. Table of contents.
Title I—Repeal of PPACA and HCERA
Sec. 101. Repeal of PPACA and HCERA.
Title II—Deductibility of medical expenses
Sec. 201. Repeal of 7.5
percent threshold on deduction for medical expenses.
Title III—Universal Access
Sec. 301. Increased funding for high risk pools.
Title IV—Interstate purchasing of health insurance
Sec. 401. Interstate purchasing of health
insurance.
Title V—Association Health Plans
Sec. 501. Rules governing association health plans.
Sec. 502. Clarification of treatment of single employer
arrangements.
Sec. 503. Enforcement provisions relating to association health
plans.
Sec. 504. Cooperation between Federal and State
authorities.
Sec. 505. Effective date and transitional and other
rules.
<enum>I</enum><header>Repeal of PPACA
and HCERA</header>
<section id="H059D6D71BE9D4B8490ED4180BD8126F6"><enum>101.</enum><header>Repeal of PPACA
and HCERA</header><text display-inline="no-display-inline">The Patient
Protection and Affordable Care Act and the Health Care and Education
Reconciliation Act of 2010 are each repealed, effective as of the respective
date of enactment of each such Act, and the provisions of law amended or
repealed by such Acts are restored or revived as if such Acts had not been
enacted.</text>
</section><enum>II</enum><header>Deductibility of
medical expenses</header>
<section id="HAA29538FD32941828D0DC139AD700074"><enum>201.</enum><header>Repeal of
<enum-in-header>7.5</enum-in-header> percent threshold on deduction for medical
expenses</header>
<subsection id="HCC2547326D124B02B452D16FA3E7588E"><enum>(a)</enum><header>In
general</header><text>Subsection (a) of section 213 of the Internal Revenue
Code of 1986 (relating to deduction for medical expenses) is amended by
striking <quote>to the extent that such expenses exceed 7.5 percent of adjusted
gross income</quote>.</text>
</subsection><subsection id="H29B87F5694154912B96258F11B41AB50"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section><enum>III</enum><header>Universal
Access</header>
<section id="H06D8C2F3CA5848FA95C813A33AF44035"><enum>301.</enum><header>Increased
funding for high risk pools</header>
<subsection id="HFBD4E24AC11446CEA4B57B303B6E27BF"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 2745(d)(2) of
the Public Health Service Act (42 U.S.C. 300gg–45(d)(2)) is amended—</text>
<paragraph id="HC64CFC7655254BDBB596069C4CBD2C57"><enum>(1)</enum><text>in the heading, by
striking <quote><header-in-text level="paragraph" style="OLC">2010</header-in-text></quote> and inserting <quote><header-in-text level="paragraph" style="OLC">2015</header-in-text></quote>; and</text>
</paragraph><paragraph id="HEB2634E40FB24B89A43764E31855F7B5"><enum>(2)</enum><text>by inserting after
<quote>2010,</quote> the following: <quote>and $5,000,000,000 in each of fiscal
years 2011 through 2015</quote>.</text>
</paragraph></subsection><subsection id="H8ED47501AB824DC48C512732640838A7"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by subsection (a) shall take effect on
January 1, 2011.</text>
</subsection></section><enum>IV</enum><header>Interstate
purchasing of health insurance</header>
<section id="HB7DEDE75B8C943E7882B8D923841DEEC"><enum>401.</enum><header>Interstate
purchasing of health insurance</header>
<subsection id="HB5AD3C9CDF7F499FA9BC6C0D9915C9D7"><enum>(a)</enum><header>In
General</header><text>Title XXVII of the <act-name parsable-cite="PHSA">Public
Health Service Act</act-name> (42 U.S.C. 300gg et seq.) is amended by adding at
the end the following new part:</text>
<quoted-block act-name="Public Health Service Act" id="H4A67D40F35224DE59EA48AF7C549D151" style="OLC">
<part id="H7049AD6AC5A24B7982420A6C50B183E5"><enum>D</enum><header>Cooperative
Governing of Individual Health Insurance Coverage</header>
<section id="H19C15182381A494997AC75BF26D80B65"><enum>2795.</enum><header>Definitions</header><text display-inline="no-display-inline">In this part:</text>
<paragraph id="HBB3C55EE56A94FF1AC4E8813246108A0"><enum>(1)</enum><header>Primary
state</header><text>The term <term>primary State</term> means, with respect to
individual health insurance coverage offered by a health insurance issuer, the
State designated by the issuer as the State whose covered laws shall govern the
health insurance issuer in the sale of such coverage under this part. An
issuer, with respect to a particular policy, may only designate one such State
as its primary State with respect to all such coverage it offers. Such an
issuer may not change the designated primary State with respect to individual
health insurance coverage once the policy is issued, except that such a change
may be made upon renewal of the policy. With respect to such designated State,
the issuer is deemed to be doing business in that State.</text>
</paragraph><paragraph id="H875E6422B1344ECDB368518272CCB960"><enum>(2)</enum><header>Secondary
state</header><text>The term <term>secondary State</term> means, with respect
to individual health insurance coverage offered by a health insurance issuer,
any State that is not the primary State. In the case of a health insurance
issuer that is selling a policy in, or to a resident of, a secondary State, the
issuer is deemed to be doing business in that secondary State.</text>
</paragraph><paragraph id="H92BFD447208142CD8C8932A0AA4BD29F"><enum>(3)</enum><header>Health insurance
issuer</header><text>The term <term>health insurance issuer</term> has the
meaning given such term in section 2791(b)(2), except that such an issuer must
be licensed in the primary State and be qualified to sell individual health
insurance coverage in that State.</text>
</paragraph><paragraph id="HE89B06249F784D32A2829A3497901906"><enum>(4)</enum><header>Individual
health insurance coverage</header><text>The term <term>individual health
insurance coverage</term> means health insurance coverage offered in the
individual market, as defined in section 2791(e)(1).</text>
</paragraph><paragraph id="H45C87C138C9042FDB1C602E4681C4CF0"><enum>(5)</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 this title for the State with respect to the issuer.</text>
</paragraph><paragraph id="H2458684A673B4402987BD84A565A9621"><enum>(6)</enum><header>Hazardous
financial condition</header><text>The term <term>hazardous financial
condition</term> means that, based on its present or reasonably anticipated
financial condition, a health insurance issuer is unlikely to be able—</text>
<subparagraph id="HC3211E5EF0D648A98364B2D7795FD212"><enum>(A)</enum><text>to meet
obligations to policyholders with respect to known claims and reasonably
anticipated claims; or</text>
</subparagraph><subparagraph id="H0F9E931347F04BD488455F76F200C982"><enum>(B)</enum><text>to pay other
obligations in the normal course of business.</text>
</subparagraph></paragraph><paragraph id="H6A287C8972C84BC6921B75E362DFE580"><enum>(7)</enum><header>Covered
laws</header>
<subparagraph id="HE05537E0C923435DA1EBA73DF450928A"><enum>(A)</enum><header>In
general</header><text>The term <term>covered laws</term> means the laws, rules,
regulations, agreements, and orders governing the insurance business pertaining
to—</text>
<clause id="HC51A191C75A444BB9D91A82A344F19BD"><enum>(i)</enum><text>individual health
insurance coverage issued by a health insurance issuer;</text>
</clause><clause id="HDF47ED5C49B54D94B6F3DAA24CABAFB2"><enum>(ii)</enum><text>the offer, sale,
rating (including medical underwriting), renewal, and issuance of individual
health insurance coverage to an individual;</text>
</clause><clause id="H3EC95AB77F89470494A891F919573AAD"><enum>(iii)</enum><text>the provision to
an individual in relation to individual health insurance coverage of health
care and insurance related services;</text>
</clause><clause id="H0CCE32B963124A5EAC9093370CCE3726"><enum>(iv)</enum><text>the provision to
an individual in relation to individual health insurance coverage of
management, operations, and investment activities of a health insurance issuer;
and</text>
</clause><clause id="HC4EFC52C3D384C479E5F8ACAC6897C02"><enum>(v)</enum><text>the provision to
an individual in relation to individual health insurance coverage of loss
control and claims administration for a health insurance issuer with respect to
liability for which the issuer provides insurance.</text>
</clause></subparagraph><subparagraph id="H2C536BAC2444426DA7663B72E145AA93"><enum>(B)</enum><header>Exception</header><text>Such
term does not include any law, rule, regulation, agreement, or order governing
the use of care or cost management techniques, including any requirement
related to provider contracting, network access or adequacy, health care data
collection, or quality assurance.</text>
</subparagraph></paragraph><paragraph id="H1A6DFA92F4144F39A230D9AB735D5F61"><enum>(8)</enum><header>State</header><text>The
term <term>State</term> means the 50 States and includes the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the
Northern Mariana Islands.</text>
</paragraph><paragraph id="HCF3E786049F441FBAEE3A404B835EA50"><enum>(9)</enum><header>Unfair claims
settlement practices</header><text>The term <term>unfair claims settlement
practices</term> means only the following practices:</text>
<subparagraph id="H445D4954BB79496AA0177F85A1F92A92"><enum>(A)</enum><text>Knowingly
misrepresenting to claimants and insured individuals relevant facts or policy
provisions relating to coverage at issue.</text>
</subparagraph><subparagraph id="H7238B1FADAB9422FBA99AA1582360BCE"><enum>(B)</enum><text>Failing to
acknowledge with reasonable promptness pertinent communications with respect to
claims arising under policies.</text>
</subparagraph><subparagraph id="H8D8550356F064745B1C73CF0D20F8A9B"><enum>(C)</enum><text>Failing to adopt
and implement reasonable standards for the prompt investigation and settlement
of claims arising under policies.</text>
</subparagraph><subparagraph id="H1B2C784E07E648D5BC1642BFFB3C610F"><enum>(D)</enum><text>Failing to
effectuate prompt, fair, and equitable settlement of claims submitted in which
liability has become reasonably clear.</text>
</subparagraph><subparagraph id="HC3CF4D1EEA2C4967B89D7CE480ACE96C"><enum>(E)</enum><text>Refusing to pay
claims without conducting a reasonable investigation.</text>
</subparagraph><subparagraph id="HB28B9CD6968E4562A324005D4C0506C5"><enum>(F)</enum><text>Failing to affirm
or deny coverage of claims within a reasonable period of time after having
completed an investigation related to those claims.</text>
</subparagraph><subparagraph id="H800EB261739A47D0950D419D73BB7E05"><enum>(G)</enum><text>A pattern or
practice of compelling insured individuals or their beneficiaries to institute
suits to recover amounts due under its policies by offering substantially less
than the amounts ultimately recovered in suits brought by them.</text>
</subparagraph><subparagraph id="HCC03EC7B2EA24E5CAE4CCF6679087760"><enum>(H)</enum><text>A pattern or
practice of attempting to settle or settling claims for less than the amount
that a reasonable person would believe the insured individual or his or her
beneficiary was entitled by reference to written or printed advertising
material accompanying or made part of an application.</text>
</subparagraph><subparagraph id="HD62685C9AF5D42E4B4B7FB629446060F"><enum>(I)</enum><text>Attempting to
settle or settling claims on the basis of an application that was materially
altered without notice to, or knowledge or consent of, the insured.</text>
</subparagraph><subparagraph id="HA469ACF2F719444BBCFB094929419872"><enum>(J)</enum><text>Failing to provide
forms necessary to present claims within 15 calendar days of a requests with
reasonable explanations regarding their use.</text>
</subparagraph><subparagraph id="H26FBB588626740149B0F188EFB4E8023"><enum>(K)</enum><text>Attempting to
cancel a policy in less time than that prescribed in the policy or by the law
of the primary State.</text>
</subparagraph></paragraph><paragraph id="HF7B9EFFE95CD43E9BD81947FB6350256"><enum>(10)</enum><header>Fraud and
abuse</header><text>The term <term>fraud and abuse</term> means an act or
omission committed by a person who, knowingly and with intent to defraud,
commits, or conceals any material information concerning, one or more of the
following:</text>
<subparagraph id="HB1D2897E7EB34F8FBE1ADE033D680ED2"><enum>(A)</enum><text>Presenting,
causing to be presented or preparing with knowledge or belief that it will be
presented to or by an insurer, a reinsurer, broker or its agent, false
information as part of, in support of or concerning a fact material to one or
more of the following:</text>
<clause id="H229EBC5154384B019301888746DC9A98"><enum>(i)</enum><text>An
application for the issuance or renewal of an insurance policy or reinsurance
contract.</text>
</clause><clause id="H6A0D74AC75D4485FB47444E5C7269DED"><enum>(ii)</enum><text>The rating of an
insurance policy or reinsurance contract.</text>
</clause><clause id="H4C36D1E890C5448C871381FC8A572748"><enum>(iii)</enum><text>A claim for
payment or benefit pursuant to an insurance policy or reinsurance
contract.</text>
</clause><clause id="HA3DDD136F7784D278A9DD3463E531E38"><enum>(iv)</enum><text>Premiums paid on
an insurance policy or reinsurance contract.</text>
</clause><clause id="H56779AB0CCE5401886ED0E389EF68D79"><enum>(v)</enum><text>Payments made in
accordance with the terms of an insurance policy or reinsurance
contract.</text>
</clause><clause id="H1759FAD2FF8142C1AB42222105E96006"><enum>(vi)</enum><text>A
document filed with the commissioner or the chief insurance regulatory official
of another jurisdiction.</text>
</clause><clause id="HDA725F97A7A74EA5895DA92E69C2F13C"><enum>(vii)</enum><text>The financial
condition of an insurer or reinsurer.</text>
</clause><clause id="HF6E39E17BE7B4B27A7156754BD346F3A"><enum>(viii)</enum><text>The formation,
acquisition, merger, reconsolidation, dissolution or withdrawal from one or
more lines of insurance or reinsurance in all or part of a State by an insurer
or reinsurer.</text>
</clause><clause id="H75CC79AE6B524B03A4C1AEE14FA7E59B"><enum>(ix)</enum><text>The issuance of
written evidence of insurance.</text>
</clause><clause id="HA9AD5496A6FE42619030BFDDA5669EBB"><enum>(x)</enum><text>The reinstatement
of an insurance policy.</text>
</clause></subparagraph><subparagraph id="HFA1DD4E6BE3244A481741BD7D602D473"><enum>(B)</enum><text>Solicitation or
acceptance of new or renewal insurance risks on behalf of an insurer reinsurer
or other person engaged in the business of insurance by a person who knows or
should know that the insurer or other person responsible for the risk is
insolvent at the time of the transaction.</text>
</subparagraph><subparagraph id="H09B1111B13394A259E9D416F55DACF80"><enum>(C)</enum><text>Transaction of the
business of insurance in violation of laws requiring a license, certificate of
authority or other legal authority for the transaction of the business of
insurance.</text>
</subparagraph><subparagraph id="HBF83595B980D4649A26D78AFD7F5E104"><enum>(D)</enum><text>Attempt to commit,
aiding or abetting in the commission of, or conspiracy to commit the acts or
omissions specified in this paragraph.</text>
</subparagraph></paragraph></section><section id="HDE2341656B3F43039EF0E44A17C6BA1A"><enum>2796.</enum><header>Application of
law</header>
<subsection id="HFC24DFD782A14B16864A849E64802437"><enum>(a)</enum><header>In
General</header><text>The covered laws of the primary State shall apply to
individual health insurance coverage offered by a health insurance issuer in
the primary State and in any secondary State, but only if the coverage and
issuer comply with the conditions of this section with respect to the offering
of coverage in any secondary State.</text>
</subsection><subsection id="H2FCFB6AECDDC426B96166CE0016319EF"><enum>(b)</enum><header>Exemptions From
Covered Laws in a Secondary State</header><text>Except as provided in this
section, a health insurance issuer with respect to its offer, sale, rating
(including medical underwriting), renewal, and issuance of individual health
insurance coverage in any secondary State is exempt from any covered laws of
the secondary State (and any rules, regulations, agreements, or orders sought
or issued by such State under or related to such covered laws) to the extent
that such laws would—</text>
<paragraph id="H4E485A8879C94B0DA10B1128292C7865"><enum>(1)</enum><text>make unlawful, or
regulate, directly or indirectly, the operation of the health insurance issuer
operating in the secondary State, except that any secondary State may require
such an issuer—</text>
<subparagraph id="H2ED7C31BD64C47C781A109160A7E9995"><enum>(A)</enum><text>to pay, on a
nondiscriminatory basis, applicable premium and other taxes (including high
risk pool assessments) which are levied on insurers and surplus lines insurers,
brokers, or policyholders under the laws of the State;</text>
</subparagraph><subparagraph id="H8A1676FC3C5E4250A38E2C6E5CAE073C"><enum>(B)</enum><text>to register with
and designate the State insurance commissioner as its agent solely for the
purpose of receiving service of legal documents or process;</text>
</subparagraph><subparagraph id="H18ABD8D5FE7A4660801D9A4966A269AF"><enum>(C)</enum><text>to submit to an
examination of its financial condition by the State insurance commissioner in
any State in which the issuer is doing business to determine the issuer’s
financial condition, if—</text>
<clause id="HDA6493A53F7A4482934F65659E81D10C"><enum>(i)</enum><text>the State
insurance commissioner of the primary State has not done an examination within
the period recommended by the National Association of Insurance Commissioners;
and</text>
</clause><clause id="HCB561B0760FF4DA5B29C6F318361F92C"><enum>(ii)</enum><text>any such
examination is conducted in accordance with the examiners’ handbook of the
National Association of Insurance Commissioners and is coordinated to avoid
unjustified duplication and unjustified repetition;</text>
</clause></subparagraph><subparagraph id="HEFF9FC62030248CCA1A6630D03BC322A"><enum>(D)</enum><text>to comply with a
lawful order issued—</text>
<clause id="HA9525431214F4764BD75DAAA1AE08CE2"><enum>(i)</enum><text>in
a delinquency proceeding commenced by the State insurance commissioner if there
has been a finding of financial impairment under subparagraph (C); or</text>
</clause><clause id="H3CCAC2F380FF412CBECFA519C206B23D"><enum>(ii)</enum><text>in a voluntary
dissolution proceeding;</text>
</clause></subparagraph><subparagraph id="H95B1645A2FF64E058573ABDFD777699D"><enum>(E)</enum><text>to comply with an
injunction issued by a court of competent jurisdiction, upon a petition by the
State insurance commissioner alleging that the issuer is in hazardous financial
condition;</text>
</subparagraph><subparagraph id="H252FCBCF73484ED9922EE608669939B1"><enum>(F)</enum><text>to participate, on
a nondiscriminatory basis, in any insurance insolvency guaranty association or
similar association to which a health insurance issuer in the State is required
to belong;</text>
</subparagraph><subparagraph id="H2309302F6BDA42D09110236B4AE4ED38"><enum>(G)</enum><text>to comply with any
State law regarding fraud and abuse (as defined in section 2795(10)), except
that if the State seeks an injunction regarding the conduct described in this
subparagraph, such injunction must be obtained from a court of competent
jurisdiction;</text>
</subparagraph><subparagraph id="H92BA2D5C44FD4B53BF82ECBF629CA843"><enum>(H)</enum><text>to comply with any
State law regarding unfair claims settlement practices (as defined in section
2795(9)); or</text>
</subparagraph><subparagraph id="H50CA20098B674D01AEE71969853B0EEF"><enum>(I)</enum><text>to comply with the
applicable requirements for independent review under section 2798 with respect
to coverage offered in the State;</text>
</subparagraph></paragraph><paragraph id="H0657A13ED8884E4287D98768E1836C84"><enum>(2)</enum><text>require any
individual health insurance coverage issued by the issuer to be countersigned
by an insurance agent or broker residing in that Secondary State; or</text>
</paragraph><paragraph id="H33B862843B4340E0B5214783106887B6"><enum>(3)</enum><text>otherwise
discriminate against the issuer issuing insurance in both the primary State and
in any secondary State.</text>
</paragraph></subsection><subsection id="H162CA1FCC1774B1DB2948D49999862A7"><enum>(c)</enum><header>Clear and
Conspicuous Disclosure</header><text>A health insurance issuer shall provide
the following notice, in 12-point bold type, in any insurance coverage offered
in a secondary State under this part by such a health insurance issuer and at
renewal of the policy, with the 5 blank spaces therein being appropriately
filled with the name of the health insurance issuer, the name of primary State,
the name of the secondary State, the name of the secondary State, and the name
of the secondary State, respectively, for the coverage concerned:</text>
<continuation-text continuation-text-level="subsection"><quote>This policy is issued by ____
and is governed by the laws and regulations of the State of _____, and it has
met all the laws of that State as determined by that State’s Department of
Insurance. This policy may be less expensive than others because it is not
subject to all of the insurance laws and regulations of the State of _____,
including coverage of some services or benefits mandated by the law of the
State of _____. Additionally, this policy is not subject to all of the consumer
protection laws or restrictions on rate changes of the State of _____. As with
all insurance products, before purchasing this policy, you should carefully
review the policy and determine what health care services the policy covers and
what benefits it provides, including any exclusions, limitations, or conditions
for such services or benefits.</quote>
</continuation-text></subsection><subsection id="H0A6F877BE97344EE815626CE2C580A98"><enum>(d)</enum><header>Prohibition on
Certain Reclassifications and Premium Increases</header>
<paragraph id="H954DF682326B451DA2F23EF11C8DF0FF"><enum>(1)</enum><header>In
general</header><text>For purposes of this section, a health insurance issuer
that provides individual health insurance coverage to an individual under this
part in a primary or secondary State may not upon renewal—</text>
<subparagraph id="H40B156A677FB486AB884E95E50BEBE65"><enum>(A)</enum><text>move or reclassify
the individual insured under the health insurance coverage from the class such
individual is in at the time of issue of the contract based on the
health-status related factors of the individual; or</text>
</subparagraph><subparagraph id="HF569C76C0E944F67B03A36B52764DE84"><enum>(B)</enum><text>increase the
premiums assessed the individual for such coverage based on a health
status-related factor or change of a health status-related factor or the past
or prospective claim experience of the insured individual.</text>
</subparagraph></paragraph><paragraph id="H2C2A45D5DDCF42408EDFD63BA18523F3"><enum>(2)</enum><header>Construction</header><text>Nothing
in paragraph (1) shall be construed to prohibit a health insurance
issuer—</text>
<subparagraph id="HC82869FEA31C4208A334A754564C1247"><enum>(A)</enum><text>from terminating
or discontinuing coverage or a class of coverage in accordance with subsections
(b) and (c) of section 2742;</text>
</subparagraph><subparagraph id="H19814D41334D4F58A25CA7F45D0B4502"><enum>(B)</enum><text>from raising
premium rates for all policy holders within a class based on claims
experience;</text>
</subparagraph><subparagraph id="H91A227A18BA54087A039F57197B71550"><enum>(C)</enum><text>from changing
premiums or offering discounted premiums to individuals who engage in wellness
activities at intervals prescribed by the issuer, if such premium changes or
incentives—</text>
<clause id="H2C5FDB97097C48AEA4B6F2A0B9978091"><enum>(i)</enum><text>are disclosed to
the consumer in the insurance contract;</text>
</clause><clause id="HDEF24791E4A742E8BE3DD76E6DBFA987"><enum>(ii)</enum><text>are based on
specific wellness activities that are not applicable to all individuals;
and</text>
</clause><clause id="H2A2BAA7E786F4A77B530C7A7B50B1F84"><enum>(iii)</enum><text>are not
obtainable by all individuals to whom coverage is offered;</text>
</clause></subparagraph><subparagraph id="H080A11C62D4B46D68CFBB73BD2FC4040"><enum>(D)</enum><text>from reinstating
lapsed coverage; or</text>
</subparagraph><subparagraph id="H0153AB66FB62443CB7FD728CB9070C2C"><enum>(E)</enum><text>from retroactively
adjusting the rates charged an insured individual if the initial rates were set
based on material misrepresentation by the individual at the time of
issue.</text>
</subparagraph></paragraph></subsection><subsection id="HBC26C1D879A240C68E16B942A43EC18A"><enum>(e)</enum><header>Prior Offering
of Policy in Primary State</header><text>A health insurance issuer may not
offer for sale individual health insurance coverage in a secondary State unless
that coverage is currently offered for sale in the primary State.</text>
</subsection><subsection id="H0D5CBF666F6C4806920A96F66330BC3F"><enum>(f)</enum><header>Licensing of
Agents or Brokers for Health Insurance Issuers</header><text>Any State may
require that a person acting, or offering to act, as an agent or broker for a
health insurance issuer with respect to the offering of individual health
insurance coverage obtain a license from that State, with commissions or other
compensation subject to the provisions of the laws of that State, except that a
State may not impose any qualification or requirement which discriminates
against a nonresident agent or broker.</text>
</subsection><subsection id="H9DBDEE054DA946E8B93453A4C19FB451"><enum>(g)</enum><header>Documents for
Submission to State Insurance Commissioner</header><text>Each health insurance
issuer issuing individual health insurance coverage in both primary and
secondary States shall submit—</text>
<paragraph id="HFA41D31AB3EF4A71916E585E8C2349FC"><enum>(1)</enum><text>to the insurance
commissioner of each State in which it intends to offer such coverage, before
it may offer individual health insurance coverage in such State—</text>
<subparagraph id="H5A2FE07B07E54114B614AC3E490584BA"><enum>(A)</enum><text>a copy of the plan
of operation or feasibility study or any similar statement of the policy being
offered and its coverage (which shall include the name of its primary State and
its principal place of business);</text>
</subparagraph><subparagraph id="H575EC6D683144E6CA376C0D5B8A4A8BA"><enum>(B)</enum><text>written notice of
any change in its designation of its primary State; and</text>
</subparagraph><subparagraph id="H008798252575463D9C7AC1518ED32F65"><enum>(C)</enum><text>written notice
from the issuer of the issuer’s compliance with all the laws of the primary
State; and</text>
</subparagraph></paragraph><paragraph id="H99D6C563C1124FE69158A55DE3DC1F2D"><enum>(2)</enum><text>to the insurance
commissioner of each secondary State in which it offers individual health
insurance coverage, a copy of the issuer’s quarterly financial statement
submitted to the primary State, which statement shall be certified by an
independent public accountant and contain a statement of opinion on loss and
loss adjustment expense reserves made by—</text>
<subparagraph id="H08DE13BDA3D045D699A7011F1C9F2A3C"><enum>(A)</enum><text>a member of the
American Academy of Actuaries; or</text>
</subparagraph><subparagraph id="H0069DCF990A04D22AB07DD7EF5C6FBE8"><enum>(B)</enum><text>a qualified loss
reserve specialist.</text>
</subparagraph></paragraph></subsection><subsection id="H5FD0D315DA1E459E97E8AF1BBB3683E4"><enum>(h)</enum><header>Power of Courts
To Enjoin Conduct</header><text>Nothing in this section shall be construed to
affect the authority of any Federal or State court to enjoin—</text>
<paragraph id="H3D32B8B59B4C430EB4E81B9938E0C233"><enum>(1)</enum><text>the solicitation
or sale of individual health insurance coverage by a health insurance issuer to
any person or group who is not eligible for such insurance; or</text>
</paragraph><paragraph id="H5CE018886FF746E4A69BEC9A0A97B763"><enum>(2)</enum><text>the solicitation
or sale of individual health insurance coverage that violates the requirements
of the law of a secondary State which are described in subparagraphs (A)
through (H) of section 2796(b)(1).</text>
</paragraph></subsection><subsection id="H421669ED7D634038A85AFB02C8E1059A"><enum>(i)</enum><header>Power of
Secondary States To Take Administrative Action</header><text>Nothing in this
section shall be construed to affect the authority of any State to enjoin
conduct in violation of that State’s laws described in section
2796(b)(1).</text>
</subsection><subsection id="H15505AD4E5D840D0A01C3F1D5C3EDEE7"><enum>(j)</enum><header>State Powers To
Enforce State Laws</header>
<paragraph id="H77EB4E75F4014F44AD352EADB889087F"><enum>(1)</enum><header>In
general</header><text>Subject to the provisions of subsection (b)(1)(G)
(relating to injunctions) and paragraph (2), nothing in this section shall be
construed to affect the authority of any State to make use of any of its powers
to enforce the laws of such State with respect to which a health insurance
issuer is not exempt under subsection (b).</text>
</paragraph><paragraph id="HC934DE4188A84870A3F566B65E631E57"><enum>(2)</enum><header>Courts of
competent jurisdiction</header><text>If a State seeks an injunction regarding
the conduct described in paragraphs (1) and (2) of subsection (h), such
injunction must be obtained from a Federal or State court of competent
jurisdiction.</text>
</paragraph></subsection><subsection id="H5D6172181DD545E7A6F7D0DB635B699D"><enum>(k)</enum><header>States’
Authority To Sue</header><text>Nothing in this section shall affect the
authority of any State to bring action in any Federal or State court.</text>
</subsection><subsection id="HFCB4F1D3358F4E77B85784EDF3819BE2"><enum>(l)</enum><header>Generally
Applicable Laws</header><text>Nothing in this section shall be construed to
affect the applicability of State laws generally applicable to persons or
corporations.</text>
</subsection><subsection id="H4740B3ABECE74C5C901864BDFBA4D2A1"><enum>(m)</enum><header>Guaranteed
Availability of Coverage to HIPAA Eligible Individuals</header><text>To the
extent that a health insurance issuer is offering coverage in a primary State
that does not accommodate residents of secondary States or does not provide a
working mechanism for residents of a secondary State, and the issuer is
offering coverage under this part in such secondary State which has not adopted
a qualified high risk pool as its acceptable alternative mechanism (as defined
in section 2744(c)(2)), the issuer shall, with respect to any individual health
insurance coverage offered in a secondary State under this part, comply with
the guaranteed availability requirements for eligible individuals in section
2741.</text>
</subsection></section><section id="H4638FAD2DBF84AC88EAA3AB7EB85D4ED"><enum>2797.</enum><header>Primary State
must meet Federal floor before issuer may sell into secondary
States</header><text display-inline="no-display-inline">A health insurance
issuer may not offer, sell, or issue individual health insurance coverage in a
secondary State if the State insurance commissioner does not use a risk-based
capital formula for the determination of capital and surplus requirements for
all health insurance issuers.</text>
</section><section id="H57B17D6AD1AA4CE58FBEFCA00FE3F1FB"><enum>2798.</enum><header>Independent
external appeals procedures</header>
<subsection id="H3B1ABBA91B45407A8867FE37A68E9AD5"><enum>(a)</enum><header>Right to
External Appeal</header><text>A health insurance issuer may not offer, sell, or
issue individual health insurance coverage in a secondary State under the
provisions of this title unless—</text>
<paragraph id="HC2F1E21A8CFA452FB08755249AF64912"><enum>(1)</enum><text>both the secondary
State and the primary State have legislation or regulations in place
establishing an independent review process for individuals who are covered by
individual health insurance coverage, or</text>
</paragraph><paragraph id="H9934C35E02DF44CD93E6FFA2A8CE3DCA"><enum>(2)</enum><text>in any case in
which the requirements of subparagraph (A) are not met with respect to the
either of such States, the issuer provides an independent review mechanism
substantially identical (as determined by the applicable State authority of
such State) to that prescribed in the <quote>Health Carrier External Review
Model Act</quote> of the National Association of Insurance Commissioners for
all individuals who purchase insurance coverage under the terms of this part,
except that, under such mechanism, the review is conducted by an independent
medical reviewer, or a panel of such reviewers, with respect to whom the
requirements of subsection (b) are met.</text>
</paragraph></subsection><subsection id="HDE76C60F1AE14B27A53F3BC19EF6302D"><enum>(b)</enum><header>Qualifications
of Independent Medical Reviewers</header><text>In the case of any independent
review mechanism referred to in subsection (a)(2)—</text>
<paragraph id="H648C056F78484698967781F312B46B7C"><enum>(1)</enum><header>In
general</header><text>In referring a denial of a claim to an independent
medical reviewer, or to any panel of such reviewers, to conduct independent
medical review, the issuer shall ensure that—</text>
<subparagraph id="HCD5D0C296AFA499684CF46386C3FCAB1"><enum>(A)</enum><text>each independent
medical reviewer meets the qualifications described in paragraphs (2) and
(3);</text>
</subparagraph><subparagraph id="H21950FCA0F5745D9A614B75E2C597076"><enum>(B)</enum><text>with respect to
each review, each reviewer meets the requirements of paragraph (4) and the
reviewer, or at least 1 reviewer on the panel, meets the requirements described
in paragraph (5); and</text>
</subparagraph><subparagraph id="HC9A3C8A9E68A46E5A35782956FF92109"><enum>(C)</enum><text>compensation
provided by the issuer to each reviewer is consistent with paragraph
(6).</text>
</subparagraph></paragraph><paragraph id="HDEABBA8168EE4FEE8EEAB195305BAB82"><enum>(2)</enum><header>Licensure and
expertise</header><text>Each independent medical reviewer shall be a physician
(allopathic or osteopathic) or health care professional who—</text>
<subparagraph id="H01F28227EFA94D68BD64ED071FCE16D3"><enum>(A)</enum><text>is appropriately
credentialed or licensed in 1 or more States to deliver health care services;
and</text>
</subparagraph><subparagraph id="HA3EB14641A1F4584B06948AA99A8A759"><enum>(B)</enum><text>typically treats
the condition, makes the diagnosis, or provides the type of treatment under
review.</text>
</subparagraph></paragraph><paragraph id="H850141B9875D438686468C5F91814B61"><enum>(3)</enum><header>Independence</header>
<subparagraph id="H3B068E0D69EC4057875AA259C73094FF"><enum>(A)</enum><header>In
general</header><text>Subject to subparagraph (B), each independent medical
reviewer in a case shall—</text>
<clause id="HB3A9829D9DF540C79E6B26892F235EE0"><enum>(i)</enum><text>not be a related
party (as defined in paragraph (7));</text>
</clause><clause id="H875FC9C3CA6C44FAA3E49D4DAD26227A"><enum>(ii)</enum><text>not have a
material familial, financial, or professional relationship with such a party;
and</text>
</clause><clause id="H9F8BB3A05BE845508C0F36DFEBC50C87"><enum>(iii)</enum><text>not otherwise
have a conflict of interest with such a party (as determined under
regulations).</text>
</clause></subparagraph><subparagraph id="HC50377BCC5194581A3FD05E6E1B118D9"><enum>(B)</enum><header>Exception</header><text>Nothing
in subparagraph (A) shall be construed to—</text>
<clause id="H4CDF4E8F72FB4697BFEDDC3B55BAA00E"><enum>(i)</enum><text>prohibit an
individual, solely on the basis of affiliation with the issuer, from serving as
an independent medical reviewer if—</text>
<subclause id="H9869B1DBF6DC492BB2D12CE731A010A3"><enum>(I)</enum><text>a non-affiliated
individual is not reasonably available;</text>
</subclause><subclause id="H0447B2A99CEB44009925319CF2CF5D35"><enum>(II)</enum><text>the affiliated
individual is not involved in the provision of items or services in the case
under review;</text>
</subclause><subclause id="HC5158180A3FA49FEBF398650B740463A"><enum>(III)</enum><text>the fact of such
an affiliation is disclosed to the issuer and the enrollee (or authorized
representative) and neither party objects; and</text>
</subclause><subclause id="HC3442CF973BC4C8A91C2CE5587D7C487"><enum>(IV)</enum><text>the affiliated
individual is not an employee of the issuer and does not provide services
exclusively or primarily to or on behalf of the issuer;</text>
</subclause></clause><clause id="HA42161A2A0FF4831AF3A7AAE2DB7F25B"><enum>(ii)</enum><text>prohibit an
individual who has staff privileges at the institution where the treatment
involved takes place from serving as an independent medical reviewer merely on
the basis of such affiliation if the affiliation is disclosed to the issuer and
the enrollee (or authorized representative), and neither party objects;
or</text>
</clause><clause id="HE638482A4D7D4203A312870230D61BED"><enum>(iii)</enum><text>prohibit receipt
of compensation by an independent medical reviewer from an entity if the
compensation is provided consistent with paragraph (6).</text>
</clause></subparagraph></paragraph><paragraph id="H96C61E5CEA3642BA980783C3BD1E699D"><enum>(4)</enum><header>Practicing
health care professional in same field</header>
<subparagraph id="H1CCADFA4C25C4504B258054B4B3E9EBA"><enum>(A)</enum><header>In
general</header><text>In a case involving treatment, or the provision of items
or services—</text>
<clause id="H4C0A9081F72547AAB9F7F0EA33238F1C"><enum>(i)</enum><text>by
a physician, a reviewer shall be a practicing physician (allopathic or
osteopathic) of the same or similar specialty, as a physician who, acting
within the appropriate scope of practice within the State in which the service
is provided or rendered, typically treats the condition, makes the diagnosis,
or provides the type of treatment under review; or</text>
</clause><clause id="H073D9FE2451348FAA284324D9BC95E63"><enum>(ii)</enum><text>by a
non-physician health care professional, the reviewer, or at least 1 member of
the review panel, shall be a practicing non-physician health care professional
of the same or similar specialty as the non-physician health care professional
who, acting within the appropriate scope of practice within the State in which
the service is provided or rendered, typically treats the condition, makes the
diagnosis, or provides the type of treatment under review.</text>
</clause></subparagraph><subparagraph id="H1B41CDBB819546A688A524AC64B0F98F"><enum>(B)</enum><header>Practicing
defined</header><text>For purposes of this paragraph, the term
<term>practicing</term> means, with respect to an individual who is a physician
or other health care professional, that the individual provides health care
services to individual patients on average at least 2 days per week.</text>
</subparagraph></paragraph><paragraph id="H85D4ACBFB1A1451DBC555EAF1CE7C829"><enum>(5)</enum><header>Pediatric
expertise</header><text>In the case of an external review relating to a child,
a reviewer shall have expertise under paragraph (2) in pediatrics.</text>
</paragraph><paragraph id="HE3AF1A8EA8B9406A86F7950F37FA2A4E"><enum>(6)</enum><header>Limitations on
reviewer compensation</header><text>Compensation provided by the issuer to an
independent medical reviewer in connection with a review under this section
shall—</text>
<subparagraph id="HC140DD54D6EE477DB4AE8F0DB5E4F69A"><enum>(A)</enum><text>not exceed a
reasonable level; and</text>
</subparagraph><subparagraph id="HB908C55853FD44FC88D9926D4ACCCD9B"><enum>(B)</enum><text>not be contingent
on the decision rendered by the reviewer.</text>
</subparagraph></paragraph><paragraph id="HE9F1CA3594014FBE91DBCB7EFBA19382"><enum>(7)</enum><header>Related party
defined</header><text>For purposes of this section, the term <term>related
party</term> means, with respect to a denial of a claim under a coverage
relating to an enrollee, any of the following:</text>
<subparagraph id="H99D1ECB7C6904067A8C36D581D15057E"><enum>(A)</enum><text>The issuer
involved, or any fiduciary, officer, director, or employee of the
issuer.</text>
</subparagraph><subparagraph id="HE93DCF8EE70D4D2BB682030F295C9472"><enum>(B)</enum><text>The enrollee (or
authorized representative).</text>
</subparagraph><subparagraph id="H8CAE4FA59D9C4D9195A66185752F6948"><enum>(C)</enum><text>The health care
professional that provides the items or services involved in the denial.</text>
</subparagraph><subparagraph id="H10BA547AE1914169ABD23DD1C6460F5E"><enum>(D)</enum><text>The institution at
which the items or services (or treatment) involved in the denial are
provided.</text>
</subparagraph><subparagraph id="H5A40844EE3ED4BD2B30E8876C9FA80E6"><enum>(E)</enum><text>The manufacturer
of any drug or other item that is included in the items or services involved in
the denial.</text>
</subparagraph><subparagraph id="HE8BB9B7B0A3549058F2A399EC24DD448"><enum>(F)</enum><text>Any other party
determined under any regulations to have a substantial interest in the denial
involved.</text>
</subparagraph></paragraph><paragraph id="HB8A394C30AC94DB781922F8574242E0D"><enum>(8)</enum><header>Definitions</header><text>For
purposes of this subsection:</text>
<subparagraph id="HEF82516E643C4A79876A01BFE3CD66EB"><enum>(A)</enum><header>Enrollee</header><text>The
term <term>enrollee</term> means, with respect to health insurance coverage
offered by a health insurance issuer, an individual enrolled with the issuer to
receive such coverage.</text>
</subparagraph><subparagraph id="H857083CBC5DA4D3A86A953029B6F11CE"><enum>(B)</enum><header>Health care
professional</header><text>The term <term>health care professional</term> means
an individual who is licensed, accredited, or certified under State law to
provide specified health care services and who is operating within the scope of
such licensure, accreditation, or certification.</text>
</subparagraph></paragraph></subsection></section><section id="HA834CBA07C1648B9A658F43552DC77EA"><enum>2799.</enum><header>Enforcement</header>
<subsection id="HD0140ADF18364B9AAD006CAE120A5A44"><enum>(a)</enum><header>In
General</header><text>Subject to subsection (b), with respect to specific
individual health insurance coverage the primary State for such coverage has
sole jurisdiction to enforce the primary State’s covered laws in the primary
State and any secondary State.</text>
</subsection><subsection id="HD9D1E58CB72741818AA8011A3A8575CF"><enum>(b)</enum><header>Secondary
State’s Authority</header><text>Nothing in subsection (a) shall be construed to
affect the authority of a secondary State to enforce its laws as set forth in
the exception specified in section 2796(b)(1).</text>
</subsection><subsection id="HECABB75B0B204E44807CD8712ECC64D6"><enum>(c)</enum><header>Court
Interpretation</header><text>In reviewing action initiated by the applicable
secondary State authority, the court of competent jurisdiction shall apply the
covered laws of the primary State.</text>
</subsection><subsection id="H70EFFC746E314E2DB2AEB42DDF39C110"><enum>(d)</enum><header>Notice of
Compliance Failure</header><text>In the case of individual health insurance
coverage offered in a secondary State that fails to comply with the covered
laws of the primary State, the applicable State authority of the secondary
State may notify the applicable State authority of the primary
State.</text>
</subsection></section></part><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HD1A3527F9155468390CDE21A2B6C8E3C"><enum>(b)</enum><header>Effective
Date</header><text>The amendment made by subsection (a) shall apply to
individual health insurance coverage offered, issued, or sold after the date
that is one year after the date of the enactment of this Act.</text>
</subsection><subsection id="H64808B1E5CF0472EADF0C4D29570148E"><enum>(c)</enum><header>GAO Ongoing
Study and Reports</header>
<paragraph id="HF34CD9945D484EFD8AE000F27B71200C"><enum>(1)</enum><header>Study</header><text>The
Comptroller General of the United States shall conduct an ongoing study
concerning the effect of the amendment made by subsection (a) on—</text>
<subparagraph id="H8A347AE11F4749B88BAB6D9B35B954F4"><enum>(A)</enum><text>the number of
uninsured and under-insured;</text>
</subparagraph><subparagraph id="H08BE183D86AA46418568998D0AC6C309"><enum>(B)</enum><text>the availability
and cost of health insurance policies for individuals with preexisting medical
conditions;</text>
</subparagraph><subparagraph id="H6222860512C54D69BDD88F9125465208"><enum>(C)</enum><text>the availability
and cost of health insurance policies generally;</text>
</subparagraph><subparagraph id="H95FA736060FD48C8B4283D367315D5D9"><enum>(D)</enum><text>the elimination or
reduction of different types of benefits under health insurance policies
offered in different States; and</text>
</subparagraph><subparagraph id="H03FEAA8204A145AC8E45A6D66C98A3B8"><enum>(E)</enum><text>cases of fraud or
abuse relating to health insurance coverage offered under such amendment and
the resolution of such cases.</text>
</subparagraph></paragraph><paragraph id="HF672F365E9E04C4DBD677A6925C8ADF3"><enum>(2)</enum><header>Annual
reports</header><text>The Comptroller General shall submit to Congress an
annual report, after the end of each of the 5 years following the effective
date of the amendment made by subsection (a), on the ongoing study conducted
under paragraph (1).</text>
</paragraph></subsection></section><enum>V</enum><header>Association Health
Plans</header>
<section id="H3672FC207A784BADA276B0F037298312"><enum>501.</enum><header>Rules governing
association health plans</header>
<subsection id="HA5CDB0BEB36E41D9B47B35F2D499AF44"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">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="HF0503500E7304057A3CE4B718E64985E" style="OLC">
<part id="H91634351C7304ABD9813B8A3ABC9E186"><enum>8</enum><header>RULES GOVERNING
ASSOCIATION HEALTH PLANS</header>
<section id="H26AC6B6B8F3A4124BE24C836BE7A052D"><enum>801.</enum><header>Association
health plans</header>
<subsection id="H24A9AF8E85994CF9B4CADB9A1D6B6634"><enum>(a)</enum><header>In
General</header><text>For purposes of this part, the term <term>association
health plan</term> means a group health plan whose sponsor is (or is deemed
under this part to be) described in subsection (b).</text>
</subsection><subsection id="H25F9BF835661468D8ECCC2D6D308EEEA"><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="H70023DAE881E4CEAAC3EBD975F80706D"><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 or providing medical care;</text>
</paragraph><paragraph id="HF823876165504E4DA531534E7813FE05"><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 in the sponsor; and</text>
</paragraph><paragraph id="H0E08D452CF7B424AA7058C34E725F415"><enum>(3)</enum><text>does not condition
membership, such dues or payments, or coverage under the plan on the basis of
health status-related factors with respect to the employees of its members (or
affiliated members), or the dependents of such employees, and does not
condition such dues or payments on the basis of group health plan
participation.</text>
</paragraph><continuation-text continuation-text-level="subsection">Any
sponsor consisting of an association of entities which meet the requirements of
paragraphs (1), (2), and (3) shall be deemed to be a sponsor described in this
subsection.</continuation-text></subsection></section><section id="HE54EC694BBF440F3ACFE11D0DDA69C3D"><enum>802.</enum><header>Certification
of association health plans</header>
<subsection id="HBE01F4A6F4CE4981A540CB786963A59A"><enum>(a)</enum><header>In
General</header><text>The applicable authority shall prescribe by regulation a
procedure under which, subject to subsection (b), the applicable authority
shall certify association health plans which apply for certification as meeting
the requirements of this part.</text>
</subsection><subsection id="HD61EDE0129AF4C2ABFF56E9BE458C659"><enum>(b)</enum><header>Standards</header><text>Under
the procedure prescribed pursuant to subsection (a), in the case of an
association health plan that provides at least one benefit option which does
not consist of health insurance coverage, the applicable authority shall
certify such plan as meeting the requirements of this part only if the
applicable authority is satisfied that the applicable requirements of this part
are met (or, upon the date on which the plan is to commence operations, will be
met) with respect to the plan.</text>
</subsection><subsection id="HB428E2BA569F4A4B88E2D65E36A80258"><enum>(c)</enum><header>Requirements
Applicable to Certified Plans</header><text>An association health plan with
respect to which certification under this part is in effect shall meet the
applicable requirements of this part, effective on the date of certification
(or, if later, on the date on which the plan is to commence operations).</text>
</subsection><subsection id="H3AC45434534F4DC787F0309559E7399A"><enum>(d)</enum><header>Requirements for
Continued Certification</header><text>The applicable authority may provide by
regulation for continued certification of association health plans under this
part.</text>
</subsection><subsection id="HFD7F0BC1B70C4816909CA84C722E9B33"><enum>(e)</enum><header>Class
Certification for Fully Insured Plans</header><text>The applicable authority
shall establish a class certification procedure for association health plans
under which all benefits consist of health insurance coverage. Under such
procedure, the applicable authority shall provide for the granting of
certification under this part to the plans in each class of such association
health plans upon appropriate filing under such procedure in connection with
plans in such class and payment of the prescribed fee under section
807(a).</text>
</subsection><subsection id="H81E315813B1D4FCC93E8A17069760412"><enum>(f)</enum><header>Certification of
Self-Insured Association Health Plans</header><text>An association health plan
which offers one or more benefit options which do not consist of health
insurance coverage may be certified under this part only if such plan consists
of any of the following:</text>
<paragraph id="H2D70E8B94A544699B5E9003B8C90D096"><enum>(1)</enum><text>a plan which
offered such coverage on the date of the enactment of this Act,</text>
</paragraph><paragraph id="HCDD5F8E2365E441B99B68EAC954426DD"><enum>(2)</enum><text>a plan under which
the sponsor does not restrict membership to one or more trades and businesses
or industries and whose eligible participating employers represent a broad
cross-section of trades and businesses or industries, or</text>
</paragraph><paragraph id="H489E0E57E4C54FE59B715FE9C171C6E6"><enum>(3)</enum><text>a plan whose
eligible participating employers represent one or more trades or businesses, or
one or more industries, consisting of any of the following: agriculture;
equipment and automobile dealerships; barbering and cosmetology; certified
public accounting practices; child care; construction; dance, theatrical and
orchestra productions; disinfecting and pest control; financial services;
fishing; food service establishments; hospitals; labor organizations; logging;
manufacturing (metals); mining; medical and dental practices; medical
laboratories; professional consulting services; sanitary services;
transportation (local and freight); warehousing; wholesaling/distributing; or
any other trade or business or industry which has been indicated as having
average or above-average risk or health claims experience by reason of State
rate filings, denials of coverage, proposed premium rate levels, or other means
demonstrated by such plan in accordance with regulations.</text>
</paragraph></subsection></section><section id="H7866E152140C42F099D8575EEEBAE71A"><enum>803.</enum><header>Requirements
relating to sponsors and boards of trustees</header>
<subsection id="H436128488D014E0A9EFE7EB7F254E61F"><enum>(a)</enum><header>Sponsor</header><text>The
requirements of this subsection are met with respect to an association health
plan if the sponsor has met (or is deemed under this part to have met) the
requirements of section 801(b) for a continuous period of not less than 3 years
ending with the date of the application for certification under this
part.</text>
</subsection><subsection id="HBB058CACABA94910B5EC61C44EF838E5"><enum>(b)</enum><header>Board of
Trustees</header><text>The requirements of this subsection are met with respect
to an association health plan if the following requirements are met:</text>
<paragraph id="HECE67D59866340B2ADBB71C5FDB48F0A"><enum>(1)</enum><header>Fiscal
control</header><text>The plan is operated, pursuant to a trust agreement, by a
board of trustees which has complete fiscal control over the plan and which is
responsible for all operations of the plan.</text>
</paragraph><paragraph id="H37DE0DF00A134080AE619C5D334AF923"><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="H26E2079F07504592BE976BA772AC1784"><enum>(3)</enum><header>Rules governing
relationship to participating employers and to contractors</header>
<subparagraph id="H31C92896FD154143A5F271F699870E7C"><enum>(A)</enum><header>Board
membership</header>
<clause id="HE45E6DC768C24B8B90CD9643A059E92A"><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 id="H554B4BBCB24A4A0FBE8A1CCDD5030B39"><enum>(ii)</enum><header>Limitation</header>
<subclause id="H351E951B20964627915260B7DC4785A3"><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 id="H0963D8C79EF3440FB11D2F971C329D09"><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 id="H1566A2DB04A946CD993B952FF518E0CF"><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 id="H3EE262FA56FC47A0997D9A9501DD9621"><enum>(iii)</enum><header>Certain plans
excluded</header><text>Clause (i) shall not apply to an association health plan
which is in existence on the date of the enactment of this Act.</text>
</clause></subparagraph><subparagraph id="H9D5BB022EEE84A609E56B5A901E94932"><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 a service
provider to administer the day-to-day affairs of the plan.</text>
</subparagraph></paragraph></subsection><subsection id="HEC9594EE048A45B28CD2700CFD4FBFE4"><enum>(c)</enum><header>Treatment of
Franchise Networks</header><text>In the case of a group health plan which is
established and maintained by a franchiser for a franchise network consisting
of its franchisees—</text>
<paragraph id="HE537DD08005E407B99BFC0182442DE41"><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 franchiser were deemed to be the sponsor referred
to in section 801(b), such network were deemed to be an association described
in section 801(b), and each franchisee were deemed to be a member (of the
association and the sponsor) referred to in section 801(b); and</text>
</paragraph><paragraph id="H8A4E2ED30D0C4ADC9D895DADC1E6592E"><enum>(2)</enum><text>the requirements
of section 804(a)(1) shall be deemed met.</text>
</paragraph><continuation-text continuation-text-level="subsection">The
Secretary may by regulation define for purposes of this subsection the terms
<quote>franchiser</quote>, <quote>franchise network</quote>, and
<quote>franchisee</quote>.</continuation-text></subsection></section><section id="H1BACB1CF7D3F442B8AAF07A3FBC69C7B"><enum>804.</enum><header>Participation
and coverage requirements</header>
<subsection id="HA82585B6DBE54E5A9D987F6BC550B4BF"><enum>(a)</enum><header>Covered
Employers and Individuals</header><text>The requirements of this subsection are
met with respect to an association health plan if, under the terms of the
plan—</text>
<paragraph id="H2F64EF3219AD4E1F8E7786BE5F64BF11"><enum>(1)</enum><text>each participating
employer must be—</text>
<subparagraph id="H37A39E44E387474CBFF276FF29204831"><enum>(A)</enum><text>a member of the
sponsor,</text>
</subparagraph><subparagraph id="H6EEC9F26D37B4999B5288DB0F158F745"><enum>(B)</enum><text>the sponsor,
or</text>
</subparagraph><subparagraph id="HFE717C354C2A4C21ACCCCD7A15761F8E"><enum>(C)</enum><text>an affiliated
member of the sponsor with respect to which the requirements of subsection (b)
are met,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">except
that, in the case of a sponsor which is a professional association or other
individual-based association, if at least one of the officers, directors, or
employees of an employer, or at least one of the individuals who are partners
in an employer and who actively participates in the business, is a member or
such an affiliated member of the sponsor, participating employers may also
include such employer; and</continuation-text></paragraph><paragraph id="HE3B3F65DBAAE4366BDE09651AA392CAA"><enum>(2)</enum><text>all individuals
commencing coverage under the plan after certification under this part must
be—</text>
<subparagraph id="H0498C2FED11B47B8B84382B151E1C20B"><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="H84EE8F05D709467F937CE5A3080BCA4E"><enum>(B)</enum><text>the beneficiaries
of individuals described in subparagraph (A).</text>
</subparagraph></paragraph></subsection><subsection id="H56DAEED5BA5742C58DAD074BAD6A75D4"><enum>(b)</enum><header>Coverage of
Previously Uninsured Employees</header><text>In the case of an association
health plan in existence on the date of the enactment of this Act, an
affiliated member of the sponsor of the plan may be offered coverage under the
plan as a participating employer only if—</text>
<paragraph id="HC2E283F7B485459899A2A79A74430FEA"><enum>(1)</enum><text>the affiliated
member was an affiliated member on the date of certification under this part;
or</text>
</paragraph><paragraph id="HF13ABFE4D4954CA0BD33199EA1FDAEEE"><enum>(2)</enum><text>during the
12-month period preceding the date of the offering of such coverage, the
affiliated member has not maintained or contributed to a group health plan with
respect to any of its employees who would otherwise be eligible to participate
in such association health plan.</text>
</paragraph></subsection><subsection id="HB535F9F99F61499E8D38E8BDEAFB3789"><enum>(c)</enum><header>Individual
Market Unaffected</header><text>The requirements of this subsection are met
with respect to an association health plan if, under the terms of the plan, no
participating employer may provide health insurance coverage in the individual
market for any employee not covered under the plan which is similar to the
coverage contemporaneously provided to employees of the employer under the
plan, if such exclusion of the employee from coverage under the plan is based
on a health status-related factor with respect to the employee and such
employee would, but for such exclusion on such basis, be eligible for coverage
under the plan.</text>
</subsection><subsection id="H61EB61A2C56F41AB9E922DCD588820A3"><enum>(d)</enum><header>Prohibition of
Discrimination Against Employers and Employees Eligible To
Participate</header><text>The requirements of this subsection are met with
respect to an association health plan if—</text>
<paragraph id="H853385D4EE0A4806AA3CC0EC95EF7315"><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="HED5453E7F83A4557B8E10750165698E3"><enum>(2)</enum><text>upon request, any
employer eligible to participate is furnished information regarding all
coverage options available under the plan; and</text>
</paragraph><paragraph id="H8BF36CEA8F3C4B63B4CCFED7A6BD3B3C"><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="HD6168B9CE0814771827E4013384A45CE"><enum>805.</enum><header>Other
requirements relating to plan documents, contribution rates, and benefit
options</header>
<subsection id="H54475DCA34A541069B3D4F8A0D3F0143"><enum>(a)</enum><header>In
General</header><text>The requirements of this section are met with respect to
an association health plan if the following requirements are met:</text>
<paragraph id="H5A3B08367A87474EA9CD6A0D21610E8C"><enum>(1)</enum><header>Contents of
governing instruments</header><text>The instruments governing the plan include
a written instrument, meeting the requirements of an instrument required under
section 402(a)(1), which—</text>
<subparagraph id="HC0CF0E14843548FA9F2EFB02C8AE3664"><enum>(A)</enum><text>provides that the
board of trustees serves as the named fiduciary required for plans under
section 402(a)(1) and serves in the capacity of a plan administrator (referred
to in section 3(16)(A));</text>
</subparagraph><subparagraph id="HE01B1067350B4A9EB39108AEB6A6586D"><enum>(B)</enum><text>provides that the
sponsor of the plan is to serve as plan sponsor (referred to in section
3(16)(B)); and</text>
</subparagraph><subparagraph id="H4E320A2EDBDC409AAE2FD2472A16F893"><enum>(C)</enum><text>incorporates the
requirements of section 806.</text>
</subparagraph></paragraph><paragraph id="HA9ABA76FCDD945D297791E175EB0414C"><enum>(2)</enum><header>Contribution
rates must be nondiscriminatory</header>
<subparagraph id="H98FE6D1A6C8B46B4994F5633399F0D84"><enum>(A)</enum><text>The contribution
rates for any participating small employer do not vary on the basis of any
health status-related factor in relation to employees of such employer or their
beneficiaries and do not vary on the basis of the type of business or industry
in which such employer is engaged.</text>
</subparagraph><subparagraph id="H7E8C0F89C0024013AE78E9C50F4ED3AF"><enum>(B)</enum><text>Nothing in this
title or any other provision of law shall be construed to preclude an
association health plan, or a health insurance issuer offering health insurance
coverage in connection with an association health plan, from—</text>
<clause id="HCECF2413196C40B184B46974D32ED36D"><enum>(i)</enum><text>setting
contribution rates based on the claims experience of the plan; or</text>
</clause><clause id="H184BED47FD4E4B43ABDF3BEF989954A1"><enum>(ii)</enum><text>varying
contribution rates for small employers in a State to the extent that such rates
could vary using the same methodology employed in such State for regulating
premium rates in the small group market with respect to health insurance
coverage offered in connection with bona fide associations (within the meaning
of section 2791(d)(3) of the <act-name parsable-cite="PHSA">Public Health
Service Act</act-name>),</text>
</clause><continuation-text continuation-text-level="subparagraph">subject
to the requirements of section 702(b) relating to contribution rates.</continuation-text></subparagraph></paragraph><paragraph id="H4A00970DF0C74F22B71C7B9DD5F84704"><enum>(3)</enum><header>Floor for number
of covered individuals with respect to certain plans</header><text>If any
benefit option under the plan does not consist of health insurance coverage,
the plan has as of the beginning of the plan year not fewer than 1,000
participants and beneficiaries.</text>
</paragraph><paragraph id="HCB59F004BDC54F47BF18E573A1AEF3BE"><enum>(4)</enum><header>Marketing
requirements</header>
<subparagraph id="H3D0FF0537228442ABBC1D43F4D1D4782"><enum>(A)</enum><header>In
general</header><text>If a benefit option which consists of health insurance
coverage is offered under the plan, State-licensed insurance agents shall be
used to distribute to small employers coverage which does not consist of health
insurance coverage in a manner comparable to the manner in which such agents
are used to distribute health insurance coverage.</text>
</subparagraph><subparagraph id="H0A04D5115BA94F25B8DC4F5045DCDEF2"><enum>(B)</enum><header>State-licensed
insurance agents</header><text>For purposes of subparagraph (A), the term
<term>State-licensed insurance agents</term> means one or more agents who are
licensed in a State and are subject to the laws of such State relating to
licensure, qualification, testing, examination, and continuing education of
persons authorized to offer, sell, or solicit health insurance coverage in such
State.</text>
</subparagraph></paragraph><paragraph id="H4BAF23D9258E4E0B8FB8876EF37EBFD1"><enum>(5)</enum><header>Regulatory
requirements</header><text>Such other requirements as the applicable authority
determines are necessary to carry out the purposes of this part, which shall be
prescribed by the applicable authority by regulation.</text>
</paragraph></subsection><subsection id="HFB9E90BA761545749352DFDEE7F4572E"><enum>(b)</enum><header>Ability of
Association Health Plans To Design Benefit Options</header><text>Subject to
section 514(d), nothing in this part or any provision of State law (as defined
in section 514(c)(1)) shall be construed to preclude an association health
plan, or a health insurance issuer offering health insurance coverage in
connection with an association health plan, from exercising its sole discretion
in selecting the specific items and services consisting of medical care to be
included as benefits under such plan or coverage, except (subject to section
514) in the case of (1) any law to the extent that it is not preempted under
section 731(a)(1) with respect to matters governed by section 711, 712, or 713,
or (2) any law of the State with which filing and approval of a policy type
offered by the plan was initially obtained to the extent that such law
prohibits an exclusion of a specific disease from such coverage.</text>
</subsection></section><section id="H41BEFF2D2E164D67B083F30EABC1476D"><enum>806.</enum><header>Maintenance of
reserves and provisions for solvency for plans providing health benefits in
addition to health insurance coverage</header>
<subsection id="HAED57B3DEFE24EED9D8D404A191DCAE0"><enum>(a)</enum><header>In
General</header><text>The requirements of this section are met with respect to
an association health plan if—</text>
<paragraph id="HE958F72D7E2C4A6EAAA2D2A703F95BF4"><enum>(1)</enum><text>the benefits under
the plan consist solely of health insurance coverage; or</text>
</paragraph><paragraph id="H97FDC849942C45BA84D68F1A939C4506"><enum>(2)</enum><text>if the plan
provides any additional benefit options which do not consist of health
insurance coverage, the plan—</text>
<subparagraph id="HBFB6D377222047CF858253D9B7501DB3"><enum>(A)</enum><text>establishes and
maintains reserves with respect to such additional benefit options, in amounts
recommended by the qualified actuary, consisting of—</text>
<clause id="H8BD2B974A0644CD58DC2370040552CD4"><enum>(i)</enum><text>a
reserve sufficient for unearned contributions;</text>
</clause><clause id="H37DE883A0FEC4CEA93D69BF9481C264B"><enum>(ii)</enum><text>a
reserve sufficient for benefit liabilities which have been incurred, which have
not been satisfied, and for which risk of loss has not yet been transferred,
and for expected administrative costs with respect to such benefit
liabilities;</text>
</clause><clause id="H0E4C2AC73C2845EDAFBF91FDD5A5320B"><enum>(iii)</enum><text>a reserve
sufficient for any other obligations of the plan; and</text>
</clause><clause id="H9276727616B74683A6AC5B511BCB6803"><enum>(iv)</enum><text>a
reserve sufficient for a margin of error and other fluctuations, taking into
account the specific circumstances of the plan; and</text>
</clause></subparagraph><subparagraph id="H1CB7E059E6FB493DBD91DC255B44E55E"><enum>(B)</enum><text>establishes and
maintains aggregate and specific excess/stop loss insurance and solvency
indemnification, with respect to such additional benefit options for which risk
of loss has not yet been transferred, as follows:</text>
<clause id="H1FD338AD79354277A72003491656DBB2"><enum>(i)</enum><text>The plan shall
secure aggregate excess/stop loss insurance for the plan with an attachment
point which is not greater than 125 percent of expected gross annual claims.
The applicable authority may by regulation provide for upward adjustments in
the amount of such percentage in specified circumstances in which the plan
specifically provides for and maintains reserves in excess of the amounts
required under subparagraph (A).</text>
</clause><clause id="H3E4D1F4F281C48FF90E66852B4CDEF90"><enum>(ii)</enum><text>The plan shall
secure specific excess/stop loss insurance for the plan with an attachment
point which is at least equal to an amount recommended by the plan’s qualified
actuary. The applicable authority may by regulation provide for adjustments in
the amount of such insurance in specified circumstances in which the plan
specifically provides for and maintains reserves in excess of the amounts
required under subparagraph (A).</text>
</clause><clause id="H5F811913CE194BF98BA63D82DCF982E6"><enum>(iii)</enum><text>The plan shall
secure indemnification insurance for any claims which the plan is unable to
satisfy by reason of a plan termination.</text>
</clause></subparagraph></paragraph><continuation-text continuation-text-level="subsection">Any
person issuing to a plan insurance described in clause (i), (ii), or (iii) of
subparagraph (B) shall notify the Secretary of any failure of premium payment
meriting cancellation of the policy prior to undertaking such a cancellation.
Any regulations prescribed by the applicable authority pursuant to clause (i)
or (ii) of subparagraph (B) may allow for such adjustments in the required
levels of excess/stop loss insurance as the qualified actuary may recommend,
taking into account the specific circumstances of the plan.</continuation-text></subsection><subsection id="H08C3BFD9EF3147FEBC5E21A9136C1788"><enum>(b)</enum><header>Minimum Surplus
in Addition to Claims Reserves</header><text>In the case of any association
health plan described in subsection (a)(2), the requirements of this subsection
are met if the plan establishes and maintains surplus in an amount at least
equal to—</text>
<paragraph id="HB15CCC0F259F497495D6041CBF98727C"><enum>(1)</enum><text>$500,000,
or</text>
</paragraph><paragraph id="H298B7CD3A9904AC19E70721663BC70C6"><enum>(2)</enum><text>such greater
amount (but not greater than $2,000,000) as may be set forth in regulations
prescribed by the applicable authority, considering the level of aggregate and
specific excess/stop loss insurance provided with respect to such plan and
other factors related to solvency risk, such as the plan’s projected levels of
participation or claims, the nature of the plan’s liabilities, and the types of
assets available to assure that such liabilities are met.</text>
</paragraph></subsection><subsection id="HA813B18EF83E4E2284DFB88889E80C4F"><enum>(c)</enum><header>Additional
Requirements</header><text>In the case of any association health plan described
in subsection (a)(2), the applicable authority may provide such additional
requirements relating to reserves, excess/stop loss insurance, and
indemnification insurance as the applicable authority considers appropriate.
Such requirements may be provided by regulation with respect to any such plan
or any class of such plans.</text>
</subsection><subsection id="H0C0DB413EFF743769D28FB9AC3A84FEC"><enum>(d)</enum><header>Adjustments for
Excess/Stop Loss Insurance</header><text>The applicable authority may provide
for adjustments to the levels of reserves otherwise required under subsections
(a) and (b) with respect to any plan or class of plans to take into account
excess/stop loss insurance provided with respect to such plan or plans.</text>
</subsection><subsection id="H370710B19BBA4E2696E7996A5E2635E7"><enum>(e)</enum><header>Alternative
Means of Compliance</header><text>The applicable authority may permit an
association health plan described in subsection (a)(2) to substitute, for all
or part of the requirements of this section (except subsection (a)(2)(B)(iii)),
such security, guarantee, hold-harmless arrangement, or other financial
arrangement as the applicable authority determines to be adequate to enable the
plan to fully meet all its financial obligations on a timely basis and is
otherwise no less protective of the interests of participants and beneficiaries
than the requirements for which it is substituted. The applicable authority may
take into account, for purposes of this subsection, evidence provided by the
plan or sponsor which demonstrates an assumption of liability with respect to
the plan. Such evidence may be in the form of a contract of indemnification,
lien, bonding, insurance, letter of credit, recourse under applicable terms of
the plan in the form of assessments of participating employers, security, or
other financial arrangement.</text>
</subsection><subsection id="H687F85B261224989905680C4D3491617"><enum>(f)</enum><header>Measures To
Ensure Continued Payment of Benefits by Certain Plans in Distress</header>
<paragraph id="H0BE2C13FC4B04421B1D159E9BB32A3D6"><enum>(1)</enum><header>Payments by
certain plans to association health plan fund</header>
<subparagraph id="H86FDF87A585042B5B64DD221A7FD5C97"><enum>(A)</enum><header>In
general</header><text>In the case of an association health plan described in
subsection (a)(2), the requirements of this subsection are met if the plan
makes payments into the Association Health Plan Fund under this subparagraph
when they are due. Such payments shall consist of annual payments in the amount
of $5,000, and, in addition to such annual payments, such supplemental payments
as the Secretary may determine to be necessary under paragraph (2). Payments
under this paragraph are payable to the Fund at the time determined by the
Secretary. Initial payments are due in advance of certification under this
part. Payments shall continue to accrue until a plan’s assets are distributed
pursuant to a termination procedure.</text>
</subparagraph><subparagraph id="HF394F6743DD44EE0A5347877610FBDE6"><enum>(B)</enum><header>Penalties for
failure to make payments</header><text>If any payment is not made by a plan
when it is due, a late payment charge of not more than 100 percent of the
payment which was not timely paid shall be payable by the plan to the
Fund.</text>
</subparagraph><subparagraph id="H275DCB573CD84217AEAB9F831D435357"><enum>(C)</enum><header>Continued duty
of the secretary</header><text>The Secretary shall not cease to carry out the
provisions of paragraph (2) on account of the failure of a plan to pay any
payment when due.</text>
</subparagraph></paragraph><paragraph id="H3C498F423E6547D893EBCDACE3031CA4"><enum>(2)</enum><header>Payments by
secretary to continue excess/stop loss insurance coverage and indemnification
insurance coverage for certain plans</header><text>In any case in which the
applicable authority determines that there is, or that there is reason to
believe that there will be: (A) a failure to take necessary corrective actions
under section 809(a) with respect to an association health plan described in
subsection (a)(2); or (B) a termination of such a plan under section 809(b) or
810(b)(8) (and, if the applicable authority is not the Secretary, certifies
such determination to the Secretary), the Secretary shall determine the amounts
necessary to make payments to an insurer (designated by the Secretary) to
maintain in force excess/stop loss insurance coverage or indemnification
insurance coverage for such plan, if the Secretary determines that there is a
reasonable expectation that, without such payments, claims would not be
satisfied by reason of termination of such coverage. The Secretary shall, to
the extent provided in advance in appropriation Acts, pay such amounts so
determined to the insurer designated by the Secretary.</text>
</paragraph><paragraph id="HC880F24E01D140519196AE6C47AE579D"><enum>(3)</enum><header>Association
health plan fund</header>
<subparagraph id="H2AFCDDBB780E45B5B25C24087B17CA58"><enum>(A)</enum><header>In
general</header><text>There is established on the books of the Treasury a fund
to be known as the <quote>Association Health Plan Fund</quote>. The Fund shall
be available for making payments pursuant to paragraph (2). The Fund shall be
credited with payments received pursuant to paragraph (1)(A), penalties
received pursuant to paragraph (1)(B); and earnings on investments of amounts
of the Fund under subparagraph (B).</text>
</subparagraph><subparagraph id="HE0673ED38DA0460A877C3115C45C42A2"><enum>(B)</enum><header>Investment</header><text>Whenever
the Secretary determines that the moneys of the fund are in excess of current
needs, the Secretary may request the investment of such amounts as the
Secretary determines advisable by the Secretary of the Treasury in obligations
issued or guaranteed by the United States.</text>
</subparagraph></paragraph></subsection><subsection id="H253A04B0FEFD4E8D9FC8D7A820500995"><enum>(g)</enum><header>Excess/Stop Loss
Insurance</header><text>For purposes of this section—</text>
<paragraph id="H8023EF0D0B0045EE97B52EB66AD3CF15"><enum>(1)</enum><header>Aggregate
excess/stop loss insurance</header><text>The term <term>aggregate excess/stop
loss insurance</term> means, in connection with an association health plan, a
contract—</text>
<subparagraph id="HCEB9A78AFED04316B3D96D5BBE9028E3"><enum>(A)</enum><text>under which an
insurer (meeting such minimum standards as the applicable authority may
prescribe by regulation) provides for payment to the plan with respect to
aggregate claims under the plan in excess of an amount or amounts specified in
such contract;</text>
</subparagraph><subparagraph id="H0390C47EE8E0419AA30B5881880AC3F5"><enum>(B)</enum><text>which is
guaranteed renewable; and</text>
</subparagraph><subparagraph id="HAF2FB5658A1C4C4BBFFF7129526F4BB2"><enum>(C)</enum><text>which allows for
payment of premiums by any third party on behalf of the insured plan.</text>
</subparagraph></paragraph><paragraph id="HAE1922BAC90D434C9D19306B3B9BF6A6"><enum>(2)</enum><header>Specific
excess/stop loss insurance</header><text>The term <term>specific excess/stop
loss insurance</term> means, in connection with an association health plan, a
contract—</text>
<subparagraph id="H75870606844B4C6E9EF4CF0ED4DE0EA9"><enum>(A)</enum><text>under which an
insurer (meeting such minimum standards as the applicable authority may
prescribe by regulation) provides for payment to the plan with respect to
claims under the plan in connection with a covered individual in excess of an
amount or amounts specified in such contract in connection with such covered
individual;</text>
</subparagraph><subparagraph id="HA473F922D9C2483EBD8095FEC40EC9CB"><enum>(B)</enum><text>which is
guaranteed renewable; and</text>
</subparagraph><subparagraph id="H249CE84A596949DBAAB5540063A2E8F7"><enum>(C)</enum><text>which allows for
payment of premiums by any third party on behalf of the insured plan.</text>
</subparagraph></paragraph></subsection><subsection id="HDA1BA8097A02403B9C5090588997D754"><enum>(h)</enum><header>Indemnification
Insurance</header><text>For purposes of this section, the term
<term>indemnification insurance</term> means, in connection with an association
health plan, a contract—</text>
<paragraph id="H8F2F0AAD9003447D9004FD40AF25A333"><enum>(1)</enum><text>under which an
insurer (meeting such minimum standards as the applicable authority may
prescribe by regulation) provides for payment to the plan with respect to
claims under the plan which the plan is unable to satisfy by reason of a
termination pursuant to section 809(b) (relating to mandatory
termination);</text>
</paragraph><paragraph id="H5DA437C42A064705884A15ED2CAD9395"><enum>(2)</enum><text>which is
guaranteed renewable and noncancellable for any reason (except as the
applicable authority may prescribe by regulation); and</text>
</paragraph><paragraph id="H2D06260306614A0B9C9D1D735A65CA8E"><enum>(3)</enum><text>which allows for
payment of premiums by any third party on behalf of the insured plan.</text>
</paragraph></subsection><subsection id="H195416E0E5564DFD8D8BFCBDCC0E0BF5"><enum>(i)</enum><header>Reserves</header><text>For
purposes of this section, the term <term>reserves</term> means, in connection
with an association health plan, plan assets which meet the fiduciary standards
under part 4 and such additional requirements regarding liquidity as the
applicable authority may prescribe by regulation.</text>
</subsection><subsection id="HF0ED50DD4C1A4461890B0A11E475150C"><enum>(j)</enum><header>Solvency
Standards Working Group</header>
<paragraph id="H5326FCA83DC64DF0AB6B36F1175131A8"><enum>(1)</enum><header>In
general</header><text>Within 90 days after the date of the enactment of this
Act, the applicable authority shall establish a Solvency Standards Working
Group. In prescribing the initial regulations under this section, the
applicable authority shall take into account the recommendations of such
Working Group.</text>
</paragraph><paragraph id="H67201957E61F46F48995FACE62D2E8CF"><enum>(2)</enum><header>Membership</header><text>The
Working Group shall consist of not more than 15 members appointed by the
applicable authority. The applicable authority shall include among persons
invited to membership on the Working Group at least one of each of the
following:</text>
<subparagraph id="H15899FDFF7164E93B3A9B8300121C539"><enum>(A)</enum><text>a representative
of the National Association of Insurance Commissioners;</text>
</subparagraph><subparagraph id="H9DF79C128630493B9F389F53A236DFBC"><enum>(B)</enum><text>a representative
of the American Academy of Actuaries;</text>
</subparagraph><subparagraph id="HEE326D1A927949E29503408A39E3CFD6"><enum>(C)</enum><text>a representative
of the State governments, or their interests;</text>
</subparagraph><subparagraph id="HE4E68D5D64E34EE29220A0C988C03523"><enum>(D)</enum><text>a representative
of existing self-insured arrangements, or their interests;</text>
</subparagraph><subparagraph id="HBA78B0F978AE4FC0A415C352F9DB703F"><enum>(E)</enum><text>a representative
of associations of the type referred to in section 801(b)(1), or their
interests; and</text>
</subparagraph><subparagraph id="H1CD34D6756AC4BE0B4C2A99B8C3490B3"><enum>(F)</enum><text>a representative
of multiemployer plans that are group health plans, or their interests.</text>
</subparagraph></paragraph></subsection></section><section id="HCE8A5D856BA24B25AF0B9284D9175C69"><enum>807.</enum><header>Requirements
for application and related requirements</header>
<subsection id="HBB1A0644C2CB4E58A264572F1D1234B9"><enum>(a)</enum><header>Filing
Fee</header><text>Under the procedure prescribed pursuant to section 802(a), an
association health plan shall pay to the applicable authority at the time of
filing an application for certification under this part a filing fee in the
amount of $5,000, which shall be available in the case of the Secretary, to the
extent provided in appropriation Acts, for the sole purpose of administering
the certification procedures applicable with respect to association health
plans.</text>
</subsection><subsection id="H49A14EDB7E1B43BE8BA8FE43B5A556A3"><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="HB8B9F02E669A4A3C879EC9C6394FE5BA"><enum>(1)</enum><header>Identifying
information</header><text>The names and addresses of—</text>
<subparagraph id="H5FF43B6A56D54D4CB32970A9A41362F7"><enum>(A)</enum><text>the sponsor;
and</text>
</subparagraph><subparagraph id="H88B6CA5F01F44C5D9D58E6A82489DFA9"><enum>(B)</enum><text>the members of the
board of trustees of the plan.</text>
</subparagraph></paragraph><paragraph id="H71F28577957D48B395015A2A9049CC39"><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="H242758C9689C4C24BE83EC6DE00A11C3"><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="H54564C2C180E4D63940D61AC3D964E99"><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="HCF8C95A540864D298750675A69EA9A62"><enum>(5)</enum><header>Agreements with
service providers</header><text>A copy of any agreements between the plan and
contract administrators and other service providers.</text>
</paragraph><paragraph id="HBDDC5F154F71489B860A928751C84B99"><enum>(6)</enum><header>Funding
report</header><text>In the case of association health plans providing benefits
options in addition to health insurance coverage, a report setting forth
information with respect to such additional benefit options determined as of a
date within the 120-day period ending with the date of the application,
including the following:</text>
<subparagraph id="H32648361AF44467689274192AF1A09A8"><enum>(A)</enum><header>Reserves</header><text>A
statement, certified by the board of trustees of the plan, and a statement of
actuarial opinion, signed by a qualified actuary, that all applicable
requirements of section 806 are or will be met in accordance with regulations
which the applicable authority shall prescribe.</text>
</subparagraph><subparagraph id="HD0EC83795C06460EB87847531F4403EB"><enum>(B)</enum><header>Adequacy of
contribution rates</header><text>A statement of actuarial opinion, signed by a
qualified actuary, which sets forth a description of the extent to which
contribution rates are adequate to provide for the payment of all obligations
and the maintenance of required reserves under the plan for the 12-month period
beginning with such date within such 120-day period, taking into account the
expected coverage and experience of the plan. If the contribution rates are not
fully adequate, the statement of actuarial opinion shall indicate the extent to
which the rates are inadequate and the changes needed to ensure
adequacy.</text>
</subparagraph><subparagraph id="HE3901DD768F1466CB16E726461A521BE"><enum>(C)</enum><header>Current and
projected value of assets and liabilities</header><text>A statement of
actuarial opinion signed by a qualified actuary, which sets forth the current
value of the assets and liabilities accumulated under the plan and a projection
of the assets, liabilities, income, and expenses of the plan for the 12-month
period referred to in subparagraph (B). The income statement shall identify
separately the plan’s administrative expenses and claims.</text>
</subparagraph><subparagraph id="H0226531EFE3A4E339D9454AB44F1AA9B"><enum>(D)</enum><header>Costs of
coverage to be charged and other expenses</header><text>A statement of the
costs of coverage to be charged, including an itemization of amounts for
administration, reserves, and other expenses associated with the operation of
the plan.</text>
</subparagraph><subparagraph id="H78468DCDA24A4B74B0EB92C12539D8FF"><enum>(E)</enum><header>Other
information</header><text>Any other information as may be determined by the
applicable authority, by regulation, as necessary to carry out the purposes of
this part.</text>
</subparagraph></paragraph></subsection><subsection id="H00BD3F1412154CB7A97841F6D4BF6A6A"><enum>(c)</enum><header>Filing Notice of
Certification With States</header><text>A certification granted under this part
to an association health plan shall not be effective unless written notice of
such certification is filed with the applicable State authority of each State
in which at least 25 percent of the participants and beneficiaries under the
plan are located. For purposes of this subsection, an individual shall be
considered to be located in the State in which a known address of such
individual is located or in which such individual is employed.</text>
</subsection><subsection id="H85543AFFA6D1487A937FA247A97ADBA7"><enum>(d)</enum><header>Notice of
Material Changes</header><text>In the case of any association health plan
certified under this part, descriptions of material changes in any information
which was required to be submitted with the application for the certification
under this part shall be filed in such form and manner as shall be prescribed
by the applicable authority by regulation. 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><subsection id="HF0D8637BEA844CF7A5F9029F604D2FE0"><enum>(e)</enum><header>Reporting
Requirements for Certain Association Health Plans</header><text>An association
health plan certified under this part which provides benefit options in
addition to health insurance coverage for such plan year shall meet the
requirements of section 103 by filing an annual report under such section which
shall include information described in subsection (b)(6) with respect to the
plan year and, notwithstanding section 104(a)(1)(A), shall be filed with the
applicable authority not later than 90 days after the close of the plan year
(or on such later date as may be prescribed by the applicable authority). The
applicable authority may require by regulation such interim reports as it
considers appropriate.</text>
</subsection><subsection id="H15CBE2D263FB4500861BA43DEEA574F8"><enum>(f)</enum><header>Engagement of
Qualified Actuary</header><text>The board of trustees of each association
health plan which provides benefits options in addition to health insurance
coverage and which is applying for certification under this part or is
certified under this part shall engage, on behalf of all participants and
beneficiaries, a qualified actuary who shall be responsible for the preparation
of the materials comprising information necessary to be submitted by a
qualified actuary under this part. The qualified actuary shall utilize such
assumptions and techniques as are necessary to enable such actuary to form an
opinion as to whether the contents of the matters reported under this
part—</text>
<paragraph id="H7A66EAB67A2C4E268F87835E5C18DBF4"><enum>(1)</enum><text>are in the
aggregate reasonably related to the experience of the plan and to reasonable
expectations; and</text>
</paragraph><paragraph id="H58568032FDE34BD58E3386B8ADAE997B"><enum>(2)</enum><text>represent such
actuary’s best estimate of anticipated experience under the plan.</text>
</paragraph><continuation-text continuation-text-level="subsection">The
opinion by the qualified actuary shall be made with respect to, and shall be
made a part of, the annual report.</continuation-text></subsection></section><section id="H823A498791EB49E4B3F7A63241645820"><enum>808.</enum><header>Notice
requirements for voluntary termination</header><text display-inline="no-display-inline">Except as provided in section 809(b), an
association health plan which is or has been certified under this part may
terminate (upon or at any time after cessation of accruals in benefit
liabilities) only if the board of trustees, not less than 60 days before the
proposed termination date—</text>
<paragraph id="HDC0EB29DB2BD4996A2FF6D0BCFB9265B"><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 id="HA2B042F8DA2247A7BDEFE7A9786C6BB6"><enum>(2)</enum><text>develops a plan
for winding up the affairs of the plan in connection with such termination in a
manner which will result in timely payment of all benefits for which the plan
is obligated; and</text>
</paragraph><paragraph id="H93256D5B2AA34B7A9AC08984B1218861"><enum>(3)</enum><text>submits such plan
in writing to the applicable authority.</text>
</paragraph><continuation-text continuation-text-level="section">Actions
required under this section shall be taken in such form and manner as may be
prescribed by the applicable authority by regulation.</continuation-text></section><section id="H52D468A45D374C3E8E09B9F35F70A9BB"><enum>809.</enum><header>Corrective
actions and mandatory termination</header>
<subsection id="HE27D98ACC1C143B9BDBA4EC9890FE161"><enum>(a)</enum><header>Actions To Avoid
Depletion of Reserves</header><text>An association health plan which is
certified under this part and which provides benefits other than health
insurance coverage shall continue to meet the requirements of section 806,
irrespective of whether such certification continues in effect. The board of
trustees of such plan shall determine quarterly whether the requirements of
section 806 are met. In any case in which the board determines that there is
reason to believe that there is or will be a failure to meet such requirements,
or the applicable authority makes such a determination and so notifies the
board, the board shall immediately notify the qualified actuary engaged by the
plan, and such actuary shall, not later than the end of the next following
month, make such recommendations to the board for corrective action as the
actuary determines necessary to ensure compliance with section 806. Not later
than 30 days after receiving from the actuary recommendations for corrective
actions, the board shall notify the applicable authority (in such form and
manner as the applicable authority may prescribe by regulation) of such
recommendations of the actuary for corrective action, together with a
description of the actions (if any) that the board has taken or plans to take
in response to such recommendations. The board shall thereafter report to the
applicable authority, in such form and frequency as the applicable authority
may specify to the board, regarding corrective action taken by the board until
the requirements of section 806 are met.</text>
</subsection><subsection id="H77A6ADF9093F47A8B87A573A15A5688A"><enum>(b)</enum><header>Mandatory
Termination</header><text>In any case in which—</text>
<paragraph id="H8505BAF3D67443F7852DD3F270107E59"><enum>(1)</enum><text>the applicable
authority has been notified under subsection (a) (or by an issuer of
excess/stop loss insurance or indemnity insurance pursuant to section 806(a))
of a failure of an association health plan which is or has been certified under
this part and is described in section 806(a)(2) to meet the requirements of
section 806 and has not been notified by the board of trustees of the plan that
corrective action has restored compliance with such requirements; and</text>
</paragraph><paragraph id="HFD7EE21FF18F42B29339A33FFC3E7466"><enum>(2)</enum><text>the applicable
authority determines that there is a reasonable expectation that the plan will
continue to fail to meet the requirements of section 806,</text>
</paragraph><continuation-text continuation-text-level="subsection">the board
of trustees of the plan shall, at the direction of the applicable authority,
terminate the plan and, in the course of the termination, take such actions as
the applicable authority may require, including satisfying any claims referred
to in section 806(a)(2)(B)(iii) and recovering for the plan any liability under
subsection (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure that
the affairs of the plan will be, to the maximum extent possible, wound up in a
manner which will result in timely provision of all benefits for which the plan
is obligated.</continuation-text></subsection></section><section id="H0A86B25DAFF04906B8472D72FA3A5078"><enum>810.</enum><header>Trusteeship by
the Secretary of insolvent association health plans providing health benefits
in addition to health insurance coverage</header>
<subsection id="H15158DB6240F4DB28306AD057F59C725"><enum>(a)</enum><header>Appointment of
Secretary as Trustee for Insolvent Plans</header><text>Whenever the Secretary
determines that an association health plan which is or has been certified under
this part and which is described in section 806(a)(2) will be unable to provide
benefits when due or is otherwise in a financially hazardous condition, as
shall be defined by the Secretary by regulation, the Secretary shall, upon
notice to the plan, apply to the appropriate United States district court for
appointment of the Secretary as trustee to administer the plan for the duration
of the insolvency. The plan may appear as a party and other interested persons
may intervene in the proceedings at the discretion of the court. The court
shall appoint such Secretary trustee if the court determines that the
trusteeship is necessary to protect the interests of the participants and
beneficiaries or providers of medical care or to avoid any unreasonable
deterioration of the financial condition of the plan. The trusteeship of such
Secretary shall continue until the conditions described in the first sentence
of this subsection are remedied or the plan is terminated.</text>
</subsection><subsection id="HAF8127D6FCD94379841A44063A799730"><enum>(b)</enum><header>Powers as
Trustee</header><text>The Secretary, upon appointment as trustee under
subsection (a), shall have the power—</text>
<paragraph id="H25F5915D024D4C59AFB1B03B3844EC45"><enum>(1)</enum><text>to do any act
authorized by the plan, this title, or other applicable provisions of law to be
done by the plan administrator or any trustee of the plan;</text>
</paragraph><paragraph id="H7374E7E9A2BE4E25B754416D87A7947F"><enum>(2)</enum><text>to require the
transfer of all (or any part) of the assets and records of the plan to the
Secretary as trustee;</text>
</paragraph><paragraph id="H40E37F69652149C9980453DB6D43C027"><enum>(3)</enum><text>to invest any
assets of the plan which the Secretary holds in accordance with the provisions
of the plan, regulations prescribed by the Secretary, and applicable provisions
of law;</text>
</paragraph><paragraph id="H33C04EB35FB64F0D8BF5FC386AC25470"><enum>(4)</enum><text>to require the
sponsor, the plan administrator, any participating employer, and any employee
organization representing plan participants to furnish any information with
respect to the plan which the Secretary as trustee may reasonably need in order
to administer the plan;</text>
</paragraph><paragraph id="H7F570F2B568343A4A3DBBCF53C2A5037"><enum>(5)</enum><text>to collect for the
plan any amounts due the plan and to recover reasonable expenses of the
trusteeship;</text>
</paragraph><paragraph id="H8139BD85C389418DAB95775D474E8981"><enum>(6)</enum><text>to commence,
prosecute, or defend on behalf of the plan any suit or proceeding involving the
plan;</text>
</paragraph><paragraph id="H823C3772C8A745B78F7F9309554378B8"><enum>(7)</enum><text>to issue, publish,
or file such notices, statements, and reports as may be required by the
Secretary by regulation or required by any order of the court;</text>
</paragraph><paragraph id="H844420885EA04F7999C76CC0187FA8D7"><enum>(8)</enum><text>to terminate the
plan (or provide for its termination in accordance with section 809(b)) and
liquidate the plan assets, to restore the plan to the responsibility of the
sponsor, or to continue the trusteeship;</text>
</paragraph><paragraph id="H225D004CB9FF4F4FB466D1D488AB70F6"><enum>(9)</enum><text>to provide for the
enrollment of plan participants and beneficiaries under appropriate coverage
options; and</text>
</paragraph><paragraph id="H5BD2DEF948434D1E8B97A38F2C9914A1"><enum>(10)</enum><text>to do such other
acts as may be necessary to comply with this title or any order of the court
and to protect the interests of plan participants and beneficiaries and
providers of medical care.</text>
</paragraph></subsection><subsection id="HEE27D14794064AF7A45B6147966994E9"><enum>(c)</enum><header>Notice of
Appointment</header><text>As soon as practicable after the Secretary’s
appointment as trustee, the Secretary shall give notice of such appointment
to—</text>
<paragraph id="H9B49F94DF6BE443AA1B075DDC4629FE5"><enum>(1)</enum><text>the sponsor and
plan administrator;</text>
</paragraph><paragraph id="H2035EBA98E2241E886B4024C016D4969"><enum>(2)</enum><text>each
participant;</text>
</paragraph><paragraph id="HA756F42869D646E3A971FB14026FEFD4"><enum>(3)</enum><text>each participating
employer; and</text>
</paragraph><paragraph id="H9EFE3A77C0274D13B061F62B640116BA"><enum>(4)</enum><text>if applicable,
each employee organization which, for purposes of collective bargaining,
represents plan participants.</text>
</paragraph></subsection><subsection id="H3D3776575E1F4372A5C5B4F24F23D7CC"><enum>(d)</enum><header>Additional
Duties</header><text>Except to the extent inconsistent with the provisions of
this title, or as may be otherwise ordered by the court, the Secretary, upon
appointment as trustee under this section, shall be subject to the same duties
as those of a trustee under section 704 of title 11, United States Code, and
shall have the duties of a fiduciary for purposes of this title.</text>
</subsection><subsection id="H6ECBD3F7F3634D10A5394AC0DFFBDDA4"><enum>(e)</enum><header>Other
Proceedings</header><text>An application by the Secretary under this subsection
may be filed notwithstanding the pendency in the same or any other court of any
bankruptcy, mortgage foreclosure, or equity receivership proceeding, or any
proceeding to reorganize, conserve, or liquidate such plan or its property, or
any proceeding to enforce a lien against property of the plan.</text>
</subsection><subsection id="H22D597E944D3493687F2613DD0D2D014"><enum>(f)</enum><header>Jurisdiction of
Court</header>
<paragraph id="H16DF8B8EAF4D463786A0F4CEBE8DA081"><enum>(1)</enum><header>In
general</header><text>Upon the filing of an application for the appointment as
trustee or the issuance of a decree under this section, the court to which the
application is made shall have exclusive jurisdiction of the plan involved and
its property wherever located with the powers, to the extent consistent with
the purposes of this section, of a court of the United States having
jurisdiction over cases under chapter 11 of title 11, United States Code.
Pending an adjudication under this section such court shall stay, and upon
appointment by it of the Secretary as trustee, such court shall continue the
stay of, any pending mortgage foreclosure, equity receivership, or other
proceeding to reorganize, conserve, or liquidate the plan, the sponsor, or
property of such plan or sponsor, and any other suit against any receiver,
conservator, or trustee of the plan, the sponsor, or property of the plan or
sponsor. Pending such adjudication and upon the appointment by it of the
Secretary as trustee, the court may stay any proceeding to enforce a lien
against property of the plan or the sponsor or any other suit against the plan
or the sponsor.</text>
</paragraph><paragraph id="H93F3359522B449BD8A6E11A5A8ED05EE"><enum>(2)</enum><header>Venue</header><text>An
action under this section may be brought in the judicial district where the
sponsor or the plan administrator resides or does business or where any asset
of the plan is situated. A district court in which such action is brought may
issue process with respect to such action in any other judicial
district.</text>
</paragraph></subsection><subsection id="H05F2F09F18254DCDB18A9229E038D8FE"><enum>(g)</enum><header>Personnel</header><text>In
accordance with regulations which shall be prescribed by the Secretary, the
Secretary shall appoint, retain, and compensate accountants, actuaries, and
other professional service personnel as may be necessary in connection with the
Secretary’s service as trustee under this section.</text>
</subsection></section><section id="H58BFE53694BD40C5B424235193179886"><enum>811.</enum><header>State
assessment authority</header>
<subsection id="H84B82F20EF6041B3AA2E6D455C8CB77E"><enum>(a)</enum><header>In
General</header><text>Notwithstanding section 514, a State may impose by law a
contribution tax on an association health plan described in section 806(a)(2),
if the plan commenced operations in such State after the date of the enactment
of this Act.</text>
</subsection><subsection id="H6022A12B6C5F41408B6396AEA4F9926A"><enum>(b)</enum><header>Contribution
Tax</header><text>For purposes of this section, the term <term>contribution
tax</term> imposed by a State on an association health plan means any tax
imposed by such State if—</text>
<paragraph id="H82E6F1E4F5424EA98F515A5C2ACB7488"><enum>(1)</enum><text>such tax is
computed by applying a rate to the amount of premiums or contributions, with
respect to individuals covered under the plan who are residents of such State,
which are received by the plan from participating employers located in such
State or from such individuals;</text>
</paragraph><paragraph id="HEF3EC97DBF0C49F2A9C726C9FF18B920"><enum>(2)</enum><text>the rate of such
tax does not exceed the rate of any tax imposed by such State on premiums or
contributions received by insurers or health maintenance organizations for
health insurance coverage offered in such State in connection with a group
health plan;</text>
</paragraph><paragraph id="H154CDD89A4484EFC83AF478A3CDC4999"><enum>(3)</enum><text>such tax is
otherwise nondiscriminatory; and</text>
</paragraph><paragraph id="H18EC8230B70C4CBBB73A8465060C311A"><enum>(4)</enum><text>the amount of any
such tax assessed on the plan is reduced by the amount of any tax or assessment
otherwise imposed by the State on premiums, contributions, or both received by
insurers or health maintenance organizations for health insurance coverage,
aggregate excess/stop loss insurance (as defined in section 806(g)(1)),
specific excess/stop loss insurance (as defined in section 806(g)(2)), other
insurance related to the provision of medical care under the plan, or any
combination thereof provided by such insurers or health maintenance
organizations in such State in connection with such plan.</text>
</paragraph></subsection></section><section id="H27FB281D366D4D26A4D6269596402184"><enum>812.</enum><header>Definitions and
rules of construction</header>
<subsection id="H4AB101EB4F6E40BA9C02B4A92701243D"><enum>(a)</enum><header>Definitions</header><text>For
purposes of this part—</text>
<paragraph id="H5CF4C82603394C97AA48FC768F00F1C4"><enum>(1)</enum><header>Group health
plan</header><text>The term <term>group health plan</term> has the meaning
provided in section 733(a)(1) (after applying subsection (b) of this
section).</text>
</paragraph><paragraph id="H7F3970EA6C2A4C77B8524DA1FB0FA8C7"><enum>(2)</enum><header>Medical
care</header><text>The term <term>medical care</term> has the meaning provided
in section 733(a)(2).</text>
</paragraph><paragraph id="HA40C729E692643268840F02D08F425A8"><enum>(3)</enum><header>Health insurance
coverage</header><text>The term <term>health insurance coverage</term> has the
meaning provided in section 733(b)(1).</text>
</paragraph><paragraph id="H3553E2D0FB844619BCD8060E62615DB6"><enum>(4)</enum><header>Health insurance
issuer</header><text>The term <term>health insurance issuer</term> has the
meaning provided in section 733(b)(2).</text>
</paragraph><paragraph id="H2ED0C22C3E7F4E9D95FEB2DE9E333F45"><enum>(5)</enum><header>Applicable
authority</header><text>The term <term>applicable authority</term> means the
Secretary, except that, in connection with any exercise of the Secretary’s
authority regarding which the Secretary is required under section 506(d) to
consult with a State, such term means the Secretary, in consultation with such
State.</text>
</paragraph><paragraph id="H38C960F5A3404A27AE8A53D13660DA78"><enum>(6)</enum><header>Health
status-related factor</header><text>The term <term>health status-related
factor</term> has the meaning provided in section 733(d)(2).</text>
</paragraph><paragraph id="HEC29673A3F3742CF83BBAC8863651219"><enum>(7)</enum><header>Individual
market</header>
<subparagraph id="HA0DFD43662324D44BD91E6EF2E3B03E3"><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="H5BB501DE83E74F1383A22FC877B3EC46"><enum>(B)</enum><header>Treatment of
very small groups</header>
<clause id="H056B0E87F82548328E72D005109D6C2D"><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="HBDC41776295F44BBBEE60E1D537DE8FF"><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="H0B1B544B6F894E70AC8A33D9A5A524C2"><enum>(8)</enum><header>Participating
employer</header><text>The term <term>participating employer</term> means, in
connection with an association health plan, any employer, if any individual who
is an employee of such employer, a partner in such employer, or a self-employed
individual who is such employer (or any dependent, as defined under the terms
of the plan, of such individual) is or was covered under such plan in
connection with the status of such individual as such an employee, partner, or
self-employed individual in relation to the plan.</text>
</paragraph><paragraph id="HEDF081A0B78E418F8131E94467F5F913"><enum>(9)</enum><header>Applicable state
authority</header><text>The term <term>applicable State authority</term> means,
with respect to a health insurance issuer in a State, the State insurance
commissioner or official or officials designated by the State to enforce the
requirements of title XXVII of the <act-name parsable-cite="PHSA">Public Health
Service Act</act-name> for the State involved with respect to such
issuer.</text>
</paragraph><paragraph id="HFCDBCA594F6E4BD38E0470F24ABB618B"><enum>(10)</enum><header>Qualified
actuary</header><text>The term <term>qualified actuary</term> means an
individual who is a member of the American Academy of Actuaries.</text>
</paragraph><paragraph id="H06377283326847A681190E59C1E4BD33"><enum>(11)</enum><header>Affiliated
member</header><text>The term <term>affiliated member</term> means, in
connection with a sponsor—</text>
<subparagraph id="HA5C771D8A2014ED497824D1BF76C1ADB"><enum>(A)</enum><text>a person who is
otherwise eligible to be a member of the sponsor but who elects an affiliated
status with the sponsor,</text>
</subparagraph><subparagraph id="H54866A7D74F347E38B277382D0E6002B"><enum>(B)</enum><text>in the case of a
sponsor with members which consist of associations, a person who is a member of
any such association and elects an affiliated status with the sponsor,
or</text>
</subparagraph><subparagraph id="H90CB58D3A7A447029407CBF1D85ED5D8"><enum>(C)</enum><text>in the case of an
association health plan in existence on the date of the enactment of this Act,
a person eligible to be a member of the sponsor or one of its member
associations.</text>
</subparagraph></paragraph><paragraph id="H1BE1020854C443E0B2304E3B2BE61CAF"><enum>(12)</enum><header>Large
employer</header><text>The term <term>large employer</term> means, in
connection with a group health plan with respect to a plan year, an employer
who employed an average of at least 51 employees on business days during the
preceding calendar year and who employs at least 2 employees on the first day
of the plan year.</text>
</paragraph><paragraph id="H9A174DE2479F4E57B89E8E3CDC0D22A5"><enum>(13)</enum><header>Small
employer</header><text>The term <term>small employer</term> means, in
connection with a group health plan with respect to a plan year, an employer
who is not a large employer.</text>
</paragraph></subsection><subsection id="H17F56CA61AAF43BD9387D3888487CDA1"><enum>(b)</enum><header>Rules of
Construction</header>
<paragraph id="H0CA06FE286754686B8AD83A68C0C3EE7"><enum>(1)</enum><header>Employers and
employees</header><text>For purposes of determining whether a plan, fund, or
program is an employee welfare benefit plan which is an association health
plan, and for purposes of applying this title in connection with such plan,
fund, or program so determined to be such an employee welfare benefit
plan—</text>
<subparagraph id="H5241D6EE4BDE476082432588D5308F1E"><enum>(A)</enum><text>in the case of a
partnership, the term <term>employer</term> (as defined in section 3(5))
includes the partnership in relation to the partners, and the term
<term>employee</term> (as defined in section 3(6)) includes any partner in
relation to the partnership; and</text>
</subparagraph><subparagraph id="H3AA8E10200434880A2F6B3067745E5AB"><enum>(B)</enum><text>in the case of a
self-employed individual, the term <term>employer</term> (as defined in section
3(5)) and the term <term>employee</term> (as defined in section 3(6)) shall
include such individual.</text>
</subparagraph></paragraph><paragraph id="H1B07745D68BF4BFCB2A6E12B515AD6E6"><enum>(2)</enum><header>Plans, funds,
and programs treated as employee welfare benefit plans</header><text>In the
case of any plan, fund, or program which was established or is maintained for
the purpose of providing medical care (through the purchase of insurance or
otherwise) for employees (or their dependents) covered thereunder and which
demonstrates to the Secretary that all requirements for certification under
this part would be met with respect to such plan, fund, or program if such
plan, fund, or program were a group health plan, such plan, fund, or program
shall be treated for purposes of this title as an employee welfare benefit plan
on and after the date of such
demonstration.</text>
</paragraph></subsection></section></part><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HFE39F848404E41818194139E0D338D08"><enum>(b)</enum><header>Conforming
Amendments to Preemption Rules</header>
<paragraph id="H857015B78B8A44118615FDF0C301E441"><enum>(1)</enum><text>Section 514(b)(6)
of such Act (29 U.S.C. 1144(b)(6)) is amended by adding at the end the
following new subparagraph:</text>
<quoted-block id="H72C2D049A40340479B5267437FFB45FF" style="OLC">
<subparagraph id="H39EBE4E62285460299BE8344919BC92C" indent="up2"><enum>(E)</enum><text>The preceding subparagraphs of this
paragraph do not apply with respect to any State law in the case of an
association health plan which is certified under part
8.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H567A487B1D1C46988CFC47A48E1AC5C7"><enum>(2)</enum><text>Section 514 of
such Act (29 U.S.C. 1144) is amended—</text>
<subparagraph id="H7F7D1EAB08064406896BCD9D4DBC95B5"><enum>(A)</enum><text>in subsection
(b)(4), by striking <quote>Subsection (a)</quote> and inserting
<quote>Subsections (a) and (d)</quote>;</text>
</subparagraph><subparagraph id="HC506947D9AD84F1E97819EF3697E84CF"><enum>(B)</enum><text>in subsection
(b)(5), by striking <quote>subsection (a)</quote> in subparagraph (A) and
inserting <quote>subsection (a) of this section and subsections (a)(2)(B) and
(b) of section 805</quote>, and by striking <quote>subsection (a)</quote> in
subparagraph (B) and inserting <quote>subsection (a) of this section or
subsection (a)(2)(B) or (b) of section 805</quote>;</text>
</subparagraph><subparagraph id="H2B2D1BAB10494694803B5DABCB7C728D"><enum>(C)</enum><text>by redesignating
subsection (d) as subsection (e); and</text>
</subparagraph><subparagraph id="HFC65B63BE96C4D6AAEF9146F49B6C7A1"><enum>(D)</enum><text>by inserting after
subsection (c) the following new subsection:</text>
<quoted-block id="H3E3AF4FD0D374EEBBA9AF38AA0211B17" style="OLC">
<subsection id="H4824483963414268A51FB4D86BD93012"><enum>(d)</enum><paragraph commented="no" display-inline="yes-display-inline" id="H6E2806B3136140929BDDD516CB2B16BE"><enum>(1)</enum><text>Except as provided in
subsection (b)(4), the provisions of this title shall supersede any and all
State laws insofar as they may now or hereafter preclude, or have the effect of
precluding, a health insurance issuer from offering health insurance coverage
in connection with an association health plan which is certified under part
8.</text>
</paragraph><paragraph id="HC44D9BD3D0194D6B865DA3A138BD3BA7" indent="up1"><enum>(2)</enum><text>Except as provided in paragraphs (4)
and (5) of subsection (b) of this section—</text>
<subparagraph id="H312117F75DDC445E9279AC22F9893917"><enum>(A)</enum><text>In any case in which health insurance
coverage of any policy type is offered under an association health plan
certified under part 8 to a participating employer operating in such State, the
provisions of this title shall supersede any and all laws of such State insofar
as they may preclude a health insurance issuer from offering health insurance
coverage of the same policy type to other employers operating in the State
which are eligible for coverage under such association health plan, whether or
not such other employers are participating employers in such plan.</text>
</subparagraph><subparagraph id="HD1F437FF50FE493D8175DDFAA794F7CD"><enum>(B)</enum><text>In any case in which health insurance
coverage of any policy type is offered in a State under an association health
plan certified under part 8 and the filing, with the applicable State authority
(as defined in section 812(a)(9)), of the policy form in connection with such
policy type is approved by such State authority, the provisions of this title
shall supersede any and all laws of any other State in which health insurance
coverage of such type is offered, insofar as they may preclude, upon the filing
in the same form and manner of such policy form with the applicable State
authority in such other State, the approval of the filing in such other
State.</text>
</subparagraph></paragraph><paragraph id="H63EB6C145A5A4AC59C09DDD2AC6A6B6E" indent="up1"><enum>(3)</enum><text>Nothing in subsection (b)(6)(E) or
the preceding provisions of this subsection shall be construed, with respect to
health insurance issuers or health insurance coverage, to supersede or impair
the law of any State—</text>
<subparagraph id="HAF77A2CC90324E6687D770EFD4A36359"><enum>(A)</enum><text>providing solvency standards or
similar standards regarding the adequacy of insurer capital, surplus, reserves,
or contributions, or</text>
</subparagraph><subparagraph id="H16E37A55037445A9822EE4B488C64F06"><enum>(B)</enum><text>relating to prompt payment of
claims.</text>
</subparagraph></paragraph><paragraph id="H65D11FD699D44399A31ADC166C84885D" indent="up1"><enum>(4)</enum><text>For additional provisions relating to
association health plans, see subsections (a)(2)(B) and (b) of section
805.</text>
</paragraph><paragraph id="H956CCAD551D4433EA483CA5192C46864" indent="up1"><enum>(5)</enum><text>For purposes of this subsection, the
term <term>association health plan</term> has the meaning provided in section
801(a), and the terms <term>health insurance coverage</term>,
<term>participating employer</term>, and <term>health insurance issuer</term>
have the meanings provided such terms in section 812,
respectively.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="HC29015683BF64BF3A796AF3BB5F86126"><enum>(3)</enum><text>Section
514(b)(6)(A) of such Act (29 U.S.C. 1144(b)(6)(A)) is amended—</text>
<subparagraph id="H9ABD066D6C594B37B5BC51810F8B63D2"><enum>(A)</enum><text>in clause (i)(II),
by striking <quote>and</quote> at the end;</text>
</subparagraph><subparagraph id="H6A936078D659419F91D05CEF8904F81F"><enum>(B)</enum><text>in clause (ii), by
inserting <quote>and which does not provide medical care (within the meaning of
section 733(a)(2)),</quote> after <quote>arrangement,</quote>, and by striking
<quote>title.</quote> and inserting <quote>title, and</quote>; and</text>
</subparagraph><subparagraph id="HB0509D51B33B4A13A7A5A5A9BDA0C33F"><enum>(C)</enum><text>by adding at the
end the following new clause:</text>
<quoted-block id="HF6E1BFE58CDF4872B09A4AC8FDBC4DC0" style="OLC">
<clause id="H9DBFF07C0AB04C50B179A8CD45817965" indent="up2"><enum>(iii)</enum><text>subject to subparagraph (E), in the
case of any other employee welfare benefit plan which is a multiple employer
welfare arrangement and which provides medical care (within the meaning of
section 733(a)(2)), any law of any State which regulates insurance may
apply.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="HECEB272BA2EB4C11A327178C6582A7A2"><enum>(4)</enum><text>Section 514(e) of
such Act (as redesignated by paragraph (2)(C)) is amended—</text>
<subparagraph id="HB5D3E9DAF4F54B9BABA2DF291BE726E3"><enum>(A)</enum><text>by striking
<quote>Nothing</quote> and inserting <quote>(1) Except as provided in paragraph
(2), nothing</quote>; and</text>
</subparagraph><subparagraph id="HADE73046B2C44B7096BB683686461516"><enum>(B)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block id="HB0F60B658EC14558AD53736B993310F9" style="OLC">
<paragraph id="H327C9DA712384327BE6C17777279ED01" indent="up1"><enum>(2)</enum><text>Nothing in any other provision of law
enacted on or after the date of the enactment of this Act shall be construed to
alter, amend, modify, invalidate, impair, or supersede any provision of this
title, except by specific cross-reference to the affected
section.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="H75586E910BDE496E949410E1A602D997"><enum>(c)</enum><header>Plan
Sponsor</header><text>Section 3(16)(B) of such Act (29 U.S.C. 102(16)(B)) is
amended by adding at the end the following new sentence: <quote>Such term also
includes a person serving as the sponsor of an association health plan under
part 8.</quote>.</text>
</subsection><subsection id="HF734161811F04DF09BE00C1D01157C30"><enum>(d)</enum><header>Disclosure of
Solvency Protections Related to Self-Insured and Fully Insured Options Under
Association Health Plans</header><text>Section 102(b) of such Act (29 U.S.C.
102(b)) is amended by adding at the end the following: <quote>An association
health plan shall include in its summary plan description, in connection with
each benefit option, a description of the form of solvency or guarantee fund
protection secured pursuant to this Act or applicable State law, if
any.</quote>.</text>
</subsection><subsection id="H234993B298C04A0BB55D6DB32C12CFC3"><enum>(e)</enum><header>Savings
Clause</header><text>Section 731(c) of such Act is amended by inserting
<quote>or part 8</quote> after <quote>this part</quote>.</text>
</subsection><subsection id="H65BAE2357AD84A0091A9F1E21B1D9A48"><enum>(f)</enum><header>Report to the
Congress Regarding Certification of Self-Insured Association Health
Plans</header><text>Not later than January 1, 2012, the Secretary of Labor
shall report to the Committee on Education and the Workforce of the House of
Representatives and the Committee on Health, Education, Labor, and Pensions of
the Senate the effect association health plans have had, if any, on reducing
the number of uninsured individuals.</text>
</subsection><subsection id="H14DAB0F7467E4819893DF2160BAF4437"><enum>(g)</enum><header>Clerical
Amendment</header><text>The table of contents in section 1 of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> is amended by inserting after the item relating to section 734
the following new items:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H3BEC4E9EF4F64E9BB8E895E54347D22C" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="part">Part 8—Rules Governing Association Health
Plans</toc-entry>
<toc-entry level="section">801. Association health plans.</toc-entry>
<toc-entry level="section">802. Certification of association health
plans.</toc-entry>
<toc-entry level="section">803. Requirements relating to sponsors and
boards of trustees.</toc-entry>
<toc-entry level="section">804. Participation and coverage
requirements.</toc-entry>
<toc-entry level="section">805. Other requirements relating to plan
documents, contribution rates, and benefit options.</toc-entry>
<toc-entry level="section">806. Maintenance of reserves and
provisions for solvency for plans providing health benefits in addition to
health insurance coverage.</toc-entry>
<toc-entry level="section">807. Requirements for application and
related requirements.</toc-entry>
<toc-entry level="section">808. Notice requirements for voluntary
termination.</toc-entry>
<toc-entry level="section">809. Corrective actions and mandatory
termination.</toc-entry>
<toc-entry level="section">810. Trusteeship by the Secretary of
insolvent association health plans providing health benefits in addition to
health insurance coverage.</toc-entry>
<toc-entry level="section">811. State assessment
authority.</toc-entry>
<toc-entry level="section">812. Definitions and rules of
construction.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="HD79B6F0E6594474DAF752BC71E7175DD"><enum>502.</enum><header>Clarification
of treatment of single employer arrangements</header><text display-inline="no-display-inline">Section 3(40)(B) of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (29 U.S.C. 1002(40)(B)) is amended—</text>
<paragraph id="HDCFB6D0155BC4E5AA8973A234BB953D4"><enum>(1)</enum><text>in clause (i), by
inserting after <quote>control group,</quote> the following: <quote>except
that, in any case in which the benefit referred to in subparagraph (A) consists
of medical care (as defined in section 812(a)(2)), two or more trades or
businesses, whether or not incorporated, shall be deemed a single employer for
any plan year of such plan, or any fiscal year of such other arrangement, if
such trades or businesses are within the same control group during such year or
at any time during the preceding 1-year period,</quote>;</text>
</paragraph><paragraph id="H281B833EA03941D8952C20C6D9D63216"><enum>(2)</enum><text>in clause (iii),
by striking <quote>(iii) the determination</quote> and inserting the
following:</text>
<quoted-block id="H6442FC3DC70B4B949BCCD6B26957BC8D" style="OLC">
<clause id="HBB985795420F42C3A51192494536585A" indent="up2"><enum>(iii)</enum><subclause commented="no" display-inline="yes-display-inline" id="H90297D1DA27B45D99028BE0E1ABEB60F"><enum>(I)</enum><text>in any case in which the
benefit referred to in subparagraph (A) consists of medical care (as defined in
section 812(a)(2)), the determination of whether a trade or business is under
<quote>common control</quote> with another trade or business shall be
determined under regulations of the Secretary applying principles consistent
and coextensive with the principles applied in determining whether employees of
two or more trades or businesses are treated as employed by a single employer
under section 4001(b), except that, for purposes of this paragraph, an interest
of greater than 25 percent may not be required as the minimum interest
necessary for common control, or</text>
</subclause><subclause id="HA1BCCDA363EF450791A2B5BE236247BA" indent="up1"><enum>(II)</enum><text>in any other case, the
determination</text>
</subclause></clause><after-quoted-block>;</after-quoted-block></quoted-block>
</paragraph><paragraph id="H4B9BB65BD81B4752BCED53FD3B7BB32A"><enum>(3)</enum><text>by redesignating
clauses (iv) and (v) as clauses (v) and (vi), respectively; and</text>
</paragraph><paragraph id="H47251157BAD14803B41522E321E4BC42"><enum>(4)</enum><text>by inserting after
clause (iii) the following new clause:</text>
<quoted-block id="H5314A2FD366B4AFEAA8AD77071C203BC" style="OLC">
<clause id="H577ABD08F1D04ED4BD19668526C9FE39" indent="up2"><enum>(iv)</enum><text>in any case in which the benefit
referred to in subparagraph (A) consists of medical care (as defined in section
812(a)(2)), in determining, after the application of clause (i), whether
benefits are provided to employees of two or more employers, the arrangement
shall be treated as having only one participating employer if, after the
application of clause (i), the number of individuals who are employees and
former employees of any one participating employer and who are covered under
the arrangement is greater than 75 percent of the aggregate number of all
individuals who are employees or former employees of participating employers
and who are covered under the
arrangement,</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></section><section id="H654F62CBBC5B431E9A74272EEECFBF5F"><enum>503.</enum><header>Enforcement
provisions relating to association health plans</header>
<subsection id="H42EC3CB4CD3F476999508C458EE50FC8"><enum>(a)</enum><header>Criminal
Penalties for Certain Willful Misrepresentations</header><text>Section 501 of
the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (29 U.S.C. 1131) is amended—</text>
<paragraph id="HAF159A1E015E41A2BAA1C4C575EE4F8A"><enum>(1)</enum><text>by inserting
<quote>(a)</quote> after <quote>Sec. 501.</quote>; and</text>
</paragraph><paragraph id="H7624570E02694611808673817409B1E7"><enum>(2)</enum><text>by adding at the
end the following new subsection:</text>
<quoted-block id="H94844D3106654055AD6F366B15D87E7B" style="OLC">
<subsection id="HD86CFC6D5D9744DEB045A2946050A252"><enum>(b)</enum><text>Any person who
willfully falsely represents, to any employee, any employee’s beneficiary, any
employer, the Secretary, or any State, a plan or other arrangement established
or maintained for the purpose of offering or providing any benefit described in
section 3(1) to employees or their beneficiaries as—</text>
<paragraph id="H3EACE892155642CB9E45103CD76B2E75"><enum>(1)</enum><text>being an
association health plan which has been certified under part 8;</text>
</paragraph><paragraph id="H51C374C186504D54A09A773976AD2DFB"><enum>(2)</enum><text>having been
established or maintained under or pursuant to one or more collective
bargaining agreements which are reached pursuant to collective bargaining
described in section 8(d) of the National Labor Relations Act (29 U.S.C.
158(d)) or paragraph Fourth of section 2 of the Railway Labor Act (45 U.S.C.
152, paragraph Fourth) or which are reached pursuant to labor-management
negotiations under similar provisions of State public employee relations laws;
or</text>
</paragraph><paragraph id="H6A24565717204999A02EED88DF1CE77C"><enum>(3)</enum><text>being a plan or
arrangement described in section 3(40)(A)(i),</text>
</paragraph><continuation-text continuation-text-level="subsection">shall,
upon conviction, be imprisoned not more than 5 years, be fined under title 18,
United States Code, or
both.</continuation-text></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H24D04F5C0068408A9037009735DE5562"><enum>(b)</enum><header>Cease Activities
Orders</header><text>Section 502 of such Act (29 U.S.C. 1132) is amended by
adding at the end the following new subsection:</text>
<quoted-block id="HF0A9694464994429B6F2F7B0875D3E23" style="OLC">
<subsection id="H9716F5BDEC344332A8B6FB8D0EBE204C"><enum>(n)</enum><header>Association
Health Plan Cease-and-Desist Orders</header>
<paragraph id="H20AF6D2778A0484DBD1057F02F52DD42"><enum>(1)</enum><header>In
general</header><text>Subject to paragraph (2), upon application by the
Secretary showing the operation, promotion, or marketing of an association
health plan (or similar arrangement providing benefits consisting of medical
care (as defined in section 733(a)(2))) that—</text>
<subparagraph id="HA028739AD80043ECAB621DD487F453A5"><enum>(A)</enum><text>is not certified
under part 8, is subject under section 514(b)(6) to the insurance laws of any
State in which the plan or arrangement offers or provides benefits, and is not
licensed, registered, or otherwise approved under the insurance laws of such
State; or</text>
</subparagraph><subparagraph id="HCCDF2626E9BC42AEAD6DA9F3489BA92E"><enum>(B)</enum><text>is an association
health plan certified under part 8 and is not operating in accordance with the
requirements under part 8 for such certification,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">a district
court of the United States shall enter an order requiring that the plan or
arrangement cease activities.</continuation-text></paragraph><paragraph id="H72772960BACE4C33996D4D71FE536319"><enum>(2)</enum><header>Exception</header><text>Paragraph
(1) shall not apply in the case of an association health plan or other
arrangement if the plan or arrangement shows that—</text>
<subparagraph id="HD07994AFAE2D430F9F28CF4982A1C3D3"><enum>(A)</enum><text>all benefits under
it referred to in paragraph (1) consist of health insurance coverage;
and</text>
</subparagraph><subparagraph id="H99201740901C4AD7964460F40B1C1DCD"><enum>(B)</enum><text>with respect to
each State in which the plan or arrangement offers or provides benefits, the
plan or arrangement is operating in accordance with applicable State laws that
are not superseded under section 514.</text>
</subparagraph></paragraph><paragraph id="H5F8C564DAD3A4CB09CEDD54DF1142569"><enum>(3)</enum><header>Additional
equitable relief</header><text>The court may grant such additional equitable
relief, including any relief available under this title, as it deems necessary
to protect the interests of the public and of persons having claims for
benefits against the
plan.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H9D50EC1FD2F0490DA1E7509B7A34FB90"><enum>(c)</enum><header>Responsibility
for Claims Procedure</header><text>Section 503 of such Act (29 U.S.C. 1133) is
amended by inserting <quote>(a) <header-in-text level="subsection" style="OLC">In general</header-in-text>.—</quote> before <quote>In
accordance</quote>, and by adding at the end the following new
subsection:</text>
<quoted-block id="HDADCD12C2AEB41F9B62F1A2766CA6DAF" style="OLC">
<subsection id="HEFB581BAB4484FE5BC6FC86E28C50D64"><enum>(b)</enum><header>Association
Health Plans</header><text>The terms of each association health plan which is
or has been certified under part 8 shall require the board of trustees or the
named fiduciary (as applicable) to ensure that the requirements of this section
are met in connection with claims filed under the
plan.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="H3816A85CE2534131A71E3A7D2C9954A7"><enum>504.</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> (29 U.S.C. 1136) is amended by adding at the end the following
new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="HD9B0CEAD65A54C7B88210621F1A5F31E" style="OLC">
<subsection id="H2ACED66D756443B89F5611BBDC1E2001"><enum>(d)</enum><header>Consultation
With States With Respect to Association Health Plans</header>
<paragraph id="H0C898A986F7340448B484FF309E86231"><enum>(1)</enum><header>Agreements with
states</header><text>The Secretary shall consult with the State recognized
under paragraph (2) with respect to an association health plan regarding the
exercise of—</text>
<subparagraph id="HC33BE8FBEA3C46DBBB56EB9FCB0AA799"><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="H39714809D47F4AF4B1D4E169AB49722D"><enum>(B)</enum><text>the Secretary’s
authority to certify association health plans under part 8 in accordance with
regulations of the Secretary applicable to certification under part 8.</text>
</subparagraph></paragraph><paragraph id="HB3C0A29B6B1348A3BB9EBB9D8CF0DE1F"><enum>(2)</enum><header>Recognition of
primary 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 association health plan, as the State with which consultation is
required. In carrying out this paragraph—</text>
<subparagraph id="H069723EFF99E49F9A94567FF62DCCF5E"><enum>(A)</enum><text>in the case of a
plan which provides health insurance coverage (as defined in section
812(a)(3)), such State shall be the State with which filing and approval of a
policy type offered by the plan was initially obtained, and</text>
</subparagraph><subparagraph id="H04B976B2B5F2422AA07D74F562FDE138"><enum>(B)</enum><text>in any other case,
the Secretary shall take into account the places of residence of the
participants and beneficiaries under the plan and the State in which the trust
is
maintained.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HCF909B2CDF724A83A54B764475BBE2B2"><enum>505.</enum><header>Effective date
and transitional and other rules</header>
<subsection id="H29C21B4C3FEC4C8E851C35DB615CF85D"><enum>(a)</enum><header>Effective
Date</header><text>The amendments made by this title shall take effect 1 year
after the date of the enactment of this Act. The Secretary of Labor shall first
issue all regulations necessary to carry out the amendments made by this title
within 1 year after the date of the enactment of this Act.</text>
</subsection><subsection id="H0D1CDC8D1F944EDD83A41E544F1AF3A5"><enum>(b)</enum><header>Treatment of
Certain Existing Health Benefits Programs</header>
<paragraph id="H78BD2E64300E4C008DA1FCF700482876"><enum>(1)</enum><header>In
general</header><text>In any case in which, as of the date of the enactment of
this Act, an arrangement is maintained in a State for the purpose of providing
benefits consisting of medical care for the employees and beneficiaries of its
participating employers, at least 200 participating employers make
contributions to such arrangement, such arrangement has been in existence for
at least 10 years, and such arrangement is licensed under the laws of one or
more States to provide such benefits to its participating employers, upon the
filing with the applicable authority (as defined in section 812(a)(5) of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (as amended by this title)) 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="HD52E0A913189468C8438EFD8505B1EE9"><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="H72057EAC24C0433D9E04449E5EE934E7"><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="HB33E886B5B8F4D73BC768F65C6124704"><enum>(C)</enum><text>the requirements
of section 803(b) of such Act shall be deemed met, if the arrangement is
operated by a board of directors which—</text>
<clause id="H1A476EFAA13F4AADAB6736C45AE3A0E8"><enum>(i)</enum><text>is
elected by the participating employers, with each employer having one vote;
and</text>
</clause><clause id="H5CA4F0C99AC44FAFAEA393402B856997"><enum>(ii)</enum><text>has
complete fiscal control over the arrangement and which is responsible for all
operations of the arrangement;</text>
</clause></subparagraph><subparagraph id="H19450FD6BD224BBA8574523578D66E3A"><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="H6DC88D66CE4D45A294B16F12DC830AF3"><enum>(E)</enum><text>the arrangement
may be certified by any applicable authority with respect to its operations in
any State only if it operates in such State on the date of
certification.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">The
provisions of this subsection shall cease to apply with respect to any such
arrangement at such time after the date of the enactment of this Act as the
applicable requirements of this subsection are not met with respect to such
arrangement.</continuation-text></paragraph><paragraph id="H830C05E702B34FD6929C4397BD8724F8"><enum>(2)</enum><header>Definitions</header><text>For
purposes of this subsection, the terms <term>group health plan</term>,
<term>medical care</term>, and <term>participating employer</term> shall have
the meanings provided in section 812 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name>, except that the reference in paragraph (7) of such section to
an <quote>association health plan</quote> shall be deemed a reference to an
arrangement referred to in this subsection.</text>
</paragraph></subsection></section>