[Congressional Record Volume 145, Number 95 (Wednesday, June 30, 1999)]
[Senate]
[Page S7938]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SESSIONS:
  S. 1309. A bill to amend title I of the Employee Retirement Income 
Security Act of 1974 to provide for the preemption of State law in 
certain cases relating to certain church plans; to the Committee on 
Health, Education, Labor, and Pensions.


       church plan parity and entanglement prevention act of 1999

  Mr. SESSIONS. Mr. President, today I am introducing legislation to 
protect the health and pension benefits of thousands of clergy and lay 
workers. This legislation clarifies the regulatory status of church 
benefit programs and allows service providers to continue contracting 
with church plans.
  Unfortunately, state insurance statutes, in all but three states, 
fail to address the legal status of these benefit programs. Thus, under 
some interpretations of state insurance law it is possible to conclude 
that these employer plans are subject to regulation as insurance 
companies. This uncertain legal status has caused service providers to 
refuse to contract with church plans--leaving these programs without 
the necessary tools to maximize benefits and reduce costs.
  Recently, the Insurance Department of South Dakota informed the 
church benefits community that either federal or state legislation is 
necessary to exempt their programs from their state's insurance laws. 
With the possibility that 46 more states could make the same request, I 
believe the only practical solution is for Congress to clarify the 
status of these plans. That is what my legislation does.
  Mr. President, my legislation is within the spirit of the National 
Securities Markets Improvement Act (NSMIA) of 1996 (P.L. 104-290) which 
not only exempted church plans from federal securities laws--providing 
the same treatment secular plans had previously enjoyed--but, also 
preempted state securities laws. This is not a unique idea. Similarly, 
the Internal Revenue Code includes numerous accommodations to the 
special circumstances of church plans. For example, the church plans 
which annuitize benefits are deemed not to be commercial insurers for 
purposes of maintaining their tax-exempt status.
  Mr. President, I have heard from ministers in my state about the 
urgency to move this legislation expeditiously. Indeed, Bishop Wesley 
Morris of the United Methodist Church visited me about this very 
matter. It is supported by the Church Alliance, a coalition of more 
than 30 denominational benefit programs, including the Presbyterian 
Church in America, the Rabbinical Pension Board, the Christian Brothers 
Service, the United Church of Christ, The United Methodist Church, the 
Episcopal Church, the Southern Baptist Convention and many others.

  While these denominations may disagree about certain theological 
issues, they are united in providing sound health care and pension 
programs to their ministers and lay workers. Furthermore, while there 
are differing opinions with the Senate, and among ourselves, about 
health care legislation, there should be no disagreement that we need 
to protect benefit plans that serve ministers and lay workers. It makes 
no sense to leave these programs at the mercy of 47 different insurance 
laws. Every person active in his or her church knows the rising cost of 
health care is a problem.
  Mr. President, I want to clarify two points with respect to 
preemption of State laws as provided by this legislation. The exception 
that allows states to enact legislation applicable to church plans is 
intended to permit states to regulate church plans only if a specific 
statute is passed by a State legislature on a stand-alone basis and the 
sole purpose of the statute is to regulate church plans.
  Furthermore, I want to point that this legislation is intended to 
permit insurance companies and other service providers to contract with 
church plans regardless of whether such church plans would have been 
treated as multiple-employer welfare arrangements under State law, if 
this legislation had not been enacted.
  Mr. President, I urge the Senate to pass this measure.
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