II 111th CONGRESS 1st Session S. 623 IN THE SENATE OF THE UNITED STATES March 17, 2009 Mr. Rockefeller (for himself, Mr. Lautenberg, and Mr. Brown) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To amend title I of the Employee Retirement Income Security Act of 1974, title XXVII of the Public Health Service Act, and the Internal Revenue Code of 1986 to prohibit pre-existing condition exclusions in group health plans and in health insurance coverage in the group and individual markets.

1.

Short title

This Act may be cited as the Pre-existing Condition Patient Protection Act of 2009.

2.

Findings

Congress makes the following findings: (1)According to the United States Census Bureau, 45,700,000 individuals were uninsured in 2007. (2)According to a recent study by the Commonwealth Fund, the number of underinsured adults ages 19 to 64 has jumped 60 percent over the last 4 years, from 16,000,000 in 2003 to 25,000,000 in 2007. (3)According to the Center for Disease Control and Prevention, approximately 45 percent of Americans have at least 1 chronic condition. (4)Forty-four States currently allow insurance companies to deny coverage for, limit coverage for, or charge increased premiums for a pre-existing condition. (5)Over 26,000,000 individuals were enrolled in private individual market health plans in 2007. Under the amendments made by the Health Insurance Portability and Accountability Act of 1996, these individuals have no protections against pre-existing condition exclusions or waiting periods. (6)When an individual has a 63-day gap in health insurance coverage, pre-existing condition exclusions, such as limiting coverage, can be placed on them when they become insured under a new health insurance policy. (7)Eliminating pre-existing condition exclusions for all individuals is a vital safeguard to ensuring all Americans have access to health care when in need. (8)According to a Kaiser Family Foundation/Harvard School of Public Health public opinion poll, 58 percent of Americans strongly favor the Federal Government requiring health insurance companies to cover anyone who applies for health coverage, even if they have a prior illness.

3.

Elimination of pre-existing condition exclusions under group health plans

(a)

Application under the Employee Retirement Income Security Act of 1974

(1)

Elimination of pre-existing condition exclusions

Section 701 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181) is amended— (A)by amending the heading to read as follows: Elimination of pre-existing condition exclusions; (B)by amending subsection (a) to read as follows: (a)

In general

A group health plan, and a health insurance issuer offering group health insurance coverage, with respect to a participant or beneficiary— (1)may not impose any pre-existing condition exclusion; and (2)in the case of a group health plan that offers medical care through health insurance coverage offered by a health maintenance organization, may not provide for an affiliation period with respect to coverage through the organization. ; (C)in subsection (b), by striking paragraph (3) and inserting the following: (3)

Affiliation period

The term affiliation period means a period which, under the terms of the health insurance coverage offered by the health maintenance organization, must expire before the health insurance coverage becomes effective. ; (D)by striking subsections (c), (d), (e), and (g); and (E)by redesignating subsection (f) (relating to special enrollment periods) as subsection (c). (2)

Clerical amendment

The item in the table of contents of such Act relating to section 701 is amended to read as follows: Sec. 701. Elimination of pre-existing condition exclusions. . (b)

Application under Public Health Service Act

(1)

Elimination of pre-existing condition exclusions

Section 2701 of the Public Health Service Act (42 U.S.C. 300gg) is amended— (A)by amending the heading to read as follows: Elimination of pre-existing condition exclusions; (B)by amending subsection (a) to read as follows: (a)

In general

A group health plan, and a health insurance issuer offering group health insurance coverage, with respect to a participant or beneficiary— (1)may not impose any pre-existing condition exclusion; and (2)in the case of a group health plan that offers medical care through health insurance coverage offered by a health maintenance organization, may not provide for an affiliation period with respect to coverage through the organization. ; (C)in subsection (b), by striking paragraph (3) and inserting the following: (3)

Affiliation period

The term affiliation period means a period which, under the terms of the health insurance coverage offered by the health maintenance organization, must expire before the health insurance coverage becomes effective. ; (D)by striking subsections (c), (d), (e), and (g); and (E)by redesignating subsection (f) (relating to special enrollment periods) as subsection (c). (2)

Technical amendments relating to employer size

Section 2711 of such Act (42 U.S.C. 300gg–11) is amended— (A)in subsection (a)— (i)in the heading, by striking small; (ii)in paragraph (1)— (I)by striking (c) through (f) and inserting (b) through (d); (II)in the matter before subparagraph (A), by striking small; and (III)in subparagraph (A), by striking small employer (as defined in section 2791(e)(4)) and inserting employer; and (iii)in paragraph (2)— (I)by striking small each place it appears; and (II)by striking coverage to a and inserting coverage to an; (B)by striking subsection (b); (C)in subsections (c), (d), and (e), by striking small each place it appears; and (D)by striking subsection (f). (c)

Application under the Internal Revenue Code of 1986

(1)

Elimination of pre-existing condition exclusions

Section 9801 of the Internal Revenue Code of 1986 is amended— (A)by amending the heading to read as follows: Elimination of pre-existing condition exclusions; (B)by amending subsection (a) to read as follows: (a)

In general

A group health plan with respect to a participant or beneficiary may not impose any pre-existing condition exclusion. ; (C)by striking paragraph (3) of subsection (b); (D)by striking subsections (c), (d), and (e); and (E)by redesignating subsection (f) (relating to special enrollment periods) as subsection (c). (2)

Clerical amendment

The item in the table of sections of chapter 100 of such Code relating to section 9801 is amended to read as follows: Sec. 9801. Elimination of pre-existing condition exclusions. . (d)

Effective date

(1)

In general

Except as provided in paragraph (2), the amendments made by this section shall apply with respect to group health plans for plan years beginning after the end of the 12th calendar month following the date of the enactment of this Act. (2)

Special rule for collective bargaining agreements

In the case of a group health plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before the date of the enactment of this Act, the amendments made by this section shall not apply to plan years beginning before the later of— (A)the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act); or (B)the date that is after the end of the 12th calendar month following the date of enactment of this Act. For purposes of subparagraph (A), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by the amendments made by this section shall not be treated as a termination of such collective bargaining agreement.

4.

Nondiscrimination in individual health insurance

(a)

In general

Section 2741 of the Public Health Service Act (42 U.S.C. 300gg–41) is amended by striking subsection (a) and inserting the following: (a)

In general

(1)

Guaranteed issue

Subject to the succeeding subsections of this section, each health insurance issuer that offers health insurance coverage (as defined in section 2791(b)(1)) in the individual market to individuals residing in an area may not, with respect to an eligible individual (as defined in subsection (b)) residing in the area who desires to enroll in individual health insurance coverage— (A)decline to offer such coverage to, or deny enrollment of, such individual; or (B)impose any pre-existing condition exclusion (as defined in section 2701(b)(1)(A)) with respect to such coverage. . (b)

Effective date

The amendments made by this section shall apply with respect to health insurance coverage offered, sold, issued, renewed, in effect, or operated in the individual market after the end of the 12th calendar month following the date of the enactment of this Act.

5.

Transparency in Claims Data

(a)

Report on adverse selection

Not later than 2 years after the date of enactment of this Act, the Secretary of Health and Human Services shall submit to Congress a report concerning the occurrence of adverse selection as a result of the enactment of this Act. Such report shall be based on the data reported under subsection (b). (b)

Mandatory reporting

A health insurance issuer to which this Act applies, shall upon the request of the Secretary, submit to the Secretary of Health and Human Services, data concerning— (1)the number of new enrollees in health plans offered by the issuer during the year involved; (2)the number of enrollees who re-enrolled in health plans offered by the issuer during the year involved; (3)the demographic characteristics of enrollees; (4)the number, nature, and dollar amount of claims made by enrollees during the year involved; (5)the number of enrollees who disenrolled or declined to be re-enrolled during the year involved; and (6)any other information determined appropriate by such Secretary. (c)

Enforcement

Part C of title XXVII of the Public Health Service Act (42 U.S.C. 300gg–91 et seq.) is amended by adding at the end the following:

2793.

Provision of information

(a)

In general

The Secretary shall require that group health plans and health insurance issuers to which this Act applies provide data to the Secretary, at such times and in such manner as the Secretary may require, in order to permit the Secretary to monitor compliance with the requirements of this Act (including requirements imposed under the Pre-existing Condition Patient Protection Act of 2009 (and the amendment made by that Act)). (b)

Civil penalties

(1)

In general

A group health plan or health insurance issuer that fails to provide information as required under subsection (a) shall be subject to a civil money penalty under this section. (2)

Amount of penalty

(A)

In general

The maximum amount of penalty imposed under this paragraph is $100 per covered life for each day that the plan or issuer fails to comply with this section. (B)

Consideration in imposition

In determining the amount of any penalty to be assessed under this paragraph, the Secretary shall take into account the previous record of compliance of the entity being assessed with this section and the gravity of the violation.

.

6.

Report on affordable health insurance coverage

Not later than 12 months after the date of enactment of this Act, the Government Accountability Office shall submit to the Secretary of Health and Human Services a report concerning the impact of this Act and other Federal laws relating to the regulation of health insurance and its effect on the affordability of health insurance coverage for individuals in all insurance markets and a description of the effect of this Act on the expansion of coverage and reductions in the number of uninsured and underinsured.