[House Report 118-112]
[From the U.S. Government Publishing Office]


118th Congress }                                                {  Report
                        HOUSE OF REPRESENTATIVES
 1st Session   }                                                { 118-112

======================================================================



 
                      ASSOCIATION HEALTH PLANS ACT

                                _______
                                

 June 14, 2023.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Ms. Foxx, from the Committee on Education and the Workforce, submitted 
                             the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 2868]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 2868) to amend the Employee Retirement 
Income Security Act of 1974 to clarify the treatment of certain 
association health plans as employers, and for other purposes, 
having considered the same, reports favorably thereon with an 
amendment and recommends that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Association Health Plans Act''.

SEC. 2. TREATMENT OF GROUP OR ASSOCIATION OF EMPLOYERS.

  (a) In General.--Section 3(5) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1002(5)) is amended--
          (1) by striking ``The term'' and inserting ``(A) The term''; 
        and
          (2) by adding at the end the following:
  ``(B) For purposes of subparagraph (A), a group or association of 
employers shall be treated as an `employer', regardless of whether the 
employers composing such group or association are in the same industry, 
trade, or profession, if such group or association--
          ``(i)(I) has established and maintains an employee welfare 
        benefit plan that is a group health plan (as defined in section 
        733(a)(1));
          ``(II) provides coverage under such plan to at least 51 
        employees after all of the employees employed by all of the 
        employer members of such group or association have been 
        aggregated and counted together as described in subparagraph 
        (D);
          ``(III) has been actively in existence for at least 2 years 
        prior to establishing and maintaining an employer welfare 
        benefit plan that is a group health plan (as defined in section 
        733(a)(1));
          ``(IV) has been formed and maintained in good faith for 
        purposes other than providing medical care (as defined in 
        section 733(a)(2)) through the purchase of insurance or 
        otherwise;
          ``(V) does not condition membership in the group or 
        association on any health status-related factor (as described 
        in section 702(a)(1)) relating to any individual;
          ``(VI) makes coverage under such plan available to all 
        employer members of such group or association regardless of any 
        health status-related factor (as described in section 
        702(a)(1)) relating to such employer members;
          ``(VII) does not provide coverage under such plan to any 
        individual other than an employee of an employer member of such 
        group or association;
          ``(VIII) has established a governing board with by-laws or 
        other similar indications of formality to manage and operate 
        such plan in both form and substance, of which at least 75 
        percent of the board members shall be made up of employer 
        members of such group or association participating in the plan 
        that are duly elected by each participating employer member 
        casting 1 vote during a scheduled election;
          ``(IX) is not a health insurance issuer (as defined in 
        section 733(b)(2)), and is not owned or controlled by such a 
        health insurance issuer or by a subsidiary or affiliate of such 
        a health insurance issuer, other than to the extent such a 
        health insurance issuer--
                  ``(aa) may participate in the group or association as 
                a member; and
                  ``(bb) may provide services such as assistance with 
                plan development, marketing, and administrative 
                services to such group or association;
          ``(ii) meets any set of criteria to qualify for such 
        treatment in an advisory opinion issued by the Secretary prior 
        to the date of enactment of the Association Health Plans Act; 
        or
          ``(iii) meets any other set of criteria to qualify for such 
        treatment that the Secretary by regulation may provide.
  ``(C)(i) For purposes of subparagraph (B), a self-employed individual 
shall be treated as--
          ``(I) an employer who may become a member of a group or 
        association of employers;
          ``(II) an employee who may participate in an employee welfare 
        benefit plan established and maintained by such group or 
        association; and
          ``(III) a participant of such plan subject to the eligibility 
        determination and monitoring requirements set forth in clause 
        (iii).
  ``(ii) For purposes of this subparagraph, the term `self-employed 
individual' means an individual who--
          ``(I) does not have any common law employees;
          ``(II) has an ownership right in a trade or business, 
        regardless of whether such trade or business is incorporated or 
        unincorporated;
          ``(III) earns wages (as defined in section 3121(a) of the 
        Internal Revenue Code of 1986) or self-employment income (as 
        defined in section 1402(b) of such Code) from such trade or 
        business; and
          ``(IV) works at least 10 hours per week or 40 hours per month 
        providing personal services to such trade or business.
  ``(iii) The board of a group or association of employers shall--
          ``(I) initially determine whether an individual meets the 
        requirements under clause (ii) to be considered a self-employed 
        individual for the purposes of being treated as an--
                  ``(aa) employer member of such group or association 
                (in accordance with clause (i)(I)); and
                  ``(bb) employee who may participate in the employee 
                welfare benefit plan established and maintained by such 
                group or association (in accordance with clause 
                (i)(II));
          ``(II) through reasonable monitoring procedures, periodically 
        determine whether the individual continues to meet such 
        requirements; and
          ``(III) if the board determines that an individual no longer 
        meets such requirements, not make such plan coverage available 
        to such individual (or dependents thereof) for any plan year 
        following the plan year during which the board makes such 
        determination. If, subsequent to a determination that an 
        individual no longer meets such requirements, such individual 
        furnishes evidence of satisfying such requirements, such 
        individual (and dependents thereof) shall be eligible to 
        receive plan coverage.
  ``(D) For purposes of subparagraph (B), all of the employees 
(including self-employed individuals) employed by all of the employer 
members (including self-employed individuals) of a group or association 
of employers shall be--
          ``(i) treated as employed by a single employer; and
          ``(ii) aggregated and counted together for purposes of any 
        regulation of an employee welfare benefit plan established and 
        maintained by such group or association.''.
  (b) Determination of Employer or Joint Employer Status.--The 
provision of employee welfare benefit plan coverage by a group or 
association of employers shall not be construed as evidence for 
establishing an employer or joint employer relationship under any 
Federal or State law.

SEC. 3. RULES APPLICABLE TO GROUP HEALTH PLANS ESTABLISHED AND 
                    MAINTAINED BY A GROUP OR ASSOCIATION OF EMPLOYERS.

  Part 7 of subtitle B of title I of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1181, et seq.) is amended by adding at 
the end the following:

``SEC. 736. RULES APPLICABLE TO GROUP HEALTH PLANS ESTABLISHED AND 
                    MAINTAINED BY A GROUP OR ASSOCIATION OF EMPLOYERS.

  ``(a) Premium Rates for a Group or Association of Employers.--
          ``(1)(A) In the case of a group health plan established and 
        maintained by a group or association of employers described in 
        section 3(5)(B), such plan may--
                  ``(i) establish base premium rates formed on an 
                actuarially sound, modified community rating 
                methodology that considers the pooling of all plan 
                participant claims; and
                  ``(ii) utilize the specific risk profile of each 
                employer member of such group or association to 
                determine contribution rates for each such employer 
                member's share of a premium by actuarially adjusting 
                above or below the established base premium rates.
          ``(B) For purposes of paragraph (1), the term `employer 
        member' means--
                  ``(i) an employer who is a member of such group or 
                association of employers and employs at least 1 common 
                law employee; or
                  ``(ii) a group made up solely of self-employed 
                individuals, within which all of the self-employed 
                individual members of such group or association are 
                aggregated together as a single employer member group, 
                provided the group includes at least 20 self-employed 
                individual members.
          ``(2) In the event a group or association is made up solely 
        of self-employed individuals (and no employers with at least 1 
        common law employee are members of such group or association), 
        the group health plan established by such group or association 
        shall--
                  ``(A) treat all self-employed individuals who are 
                members of such group or association as a single risk 
                pool;
                  ``(B) pool all plan participant claims; and
                  ``(C) charge each plan participant the same premium 
                rate.
  ``(b) Discrimination and Pre-existing Condition Protections.--A group 
health plan established and maintained by a group or association of 
employers described in section 3(5)(B) shall be prohibited from--
          ``(1) establishing any rule for eligibility (including 
        continued eligibility) of any individual (including an employee 
        of an employer member or a self-employed individual, or a 
        dependent of such employee or self-employed individual) to 
        enroll for benefits under the terms of the plan that 
        discriminates based on any health status-related factor that 
        relates to such individual (consistent with the rules under 
        section 702(a)(1));
          ``(2) requiring an individual (including an employee of an 
        employer member or a self-employed individual, or a dependent 
        of such employee or self-employed individual), as a condition 
        of enrollment or continued enrollment under the plan, to pay a 
        premium or contribution that is greater than the premium or 
        contribution for a similarly situated individual enrolled in 
        the plan based on any health status-related factor that relates 
        to such individual (consistent with the rules under section 
        702(b)(1)); and
          ``(3) denying coverage under such plan on the basis of a pre-
        existing condition (consistent with the rules under section 
        2704 of the Public Health Service Act).''.

SEC. 4. RULE OF CONSTRUCTION.

  Nothing in this Act shall be construed to exempt a group health plan 
which is an employee welfare benefit plan offered through a group or 
association of employers from the requirements of part 7 of subtitle B 
of title I of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1181 et. seq.), including the provisions of part A of title 
XXVII of the Public Health Service Act as incorporated by reference 
into this Act through section 715.

                                Purpose

    There is an urgent need to address health care challenges 
facing working families and small businesses. Democrat 
policies, like Obamacare, have sold Americans a faulty bill of 
goods and led to consolidation in the marketplace, skyrocketing 
premiums, and a broken individual health market that costs 
taxpayers more than a trillion dollars while covering only 9 
percent of the population.
    H.R. 2868, the Association Health Plans Act, amends the 
Employee Retirement Income Security Act of 1974 (ERISA) to 
improve access to affordable health coverage options for 
workers employed by small businesses. The bill amends ERISA to 
authorize the creation of association health plans (AHPs) 
sponsored by groups or associations of employers. The 
legislation allows small businesses and self-employed 
individuals to band together across state lines through 
associations, thus increasing their bargaining power with plans 
and providers and placing them on a more level playing field 
with larger companies and unions. H.R. 2868 frees small 
businesses from costly state-mandated benefit packages, spreads 
risk for self-employed individuals, and lowers overhead costs, 
enabling employers to offer more affordable health care 
coverage to their workers and enabling self-employed 
individuals to access more affordable health care coverage.

                            Committee Action


                             109TH CONGRESS

Legislative Action

    On February 2, 2005, Rep. Sam Johnson (R-TX), then-Chairman 
of the Employer-Employee Relations Subcommittee of the 
Committee on Education and the Workforce (Committee), 
introduced the Small Business Health Fairness Act (H.R. 525), 
along with 53 bipartisan original cosponsors, including then-
Chairman of the Committee, John Boehner (R-OH), and Reps. Nydia 
Velazquez (D-NY) and Albert Wynn (D-MD).
    On March 16, 2005, the Committee ordered H.R. 525, without 
amendment, favorably reported to the House of Representatives 
by a vote of 25 to 22. On April 13, 2005, the Committee filed 
its committee report, which detailed the history of the need 
for the legislation and prior committee action.\1\ On July 26, 
2015, H.R. 525 passed the full House by a vote of 263 to 165.
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    \1\H.R. Rep. No. 109-41 (2005).
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                             111TH CONGRESS

Legislative Action

    Between July 15-17, 2009, the Committee met to mark up H.R. 
3200, the America's Affordable Health Choices Act of 2009.\2\ 
During the markup, Rep. Howard P. ``Buck'' McKeon (R-CA) 
offered an amendment to create a new title at the end of 
Division A of H.R. 3200, titled Title IV--Small Business Health 
Fairness. The amendment included rules governing AHPs, the 
treatment of single-employer arrangements, enforcement 
provisions, and other provisions related to AHPs. The amendment 
was defeated by a vote of 21 to 27.
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    \2\H.R. 3200 was the House precursor to the law known as the 
Affordable Care Act.
---------------------------------------------------------------------------
    On November 7, 2009, the House passed H.R. 3962, the 
Affordable Health Care for America Act. During the debate, 
former Speaker John Boehner (R-OH) included the AHP legislative 
text in the Republican motion to recommit.\3\
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    \3\H. Amend. 510 to H.R. 3962, 111th Cong. (2009).
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    On March 21, 2010, the House passed the Patient Protection 
and Affordable Care Act by a vote of 219 to 212 to resolve 
differences with the Senate. The bill was signed by President 
Obama on March 23, 2010.\4\ On March 25, 2010, the House passed 
the Health Care and Education Reconciliation Act of 2010 by a 
vote of 220 to 207 to resolve differences with the Senate. This 
bill was signed into law by President Obama on March 30, 
2010.\5\ Collectively, the two bills are known as the 
Affordable Care Act (ACA or Obamacare).\6\ The ACA did not 
include AHP legislative text.
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    \4\Patient Protection and Affordable Care Act, Pub. L. No. 111-148 
(2010).
    \5\Health and Education Reconciliation Act, Pub. L. No. 111-152 
(2010).
    \6\Patient Protection and Affordable Care Act, Pub. L. No. 111-148 
(2010), and Health and Education Reconciliation Act, Pub. L. No. 111-
152 (2010).
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                             112TH CONGRESS

First Session--Hearing

    On February 9, 2011, the Committee held a hearing entitled 
``The Impact of the Health Care Law on the Economy, Employers, 
and the Workforce.'' This was the Committee's first hearing to 
investigate Obamacare and hear directly from job creators about 
how the 2010 law affects their ability to expand their business 
and hire new workers. The hearing also examined AHPs. The 
witnesses were Dr. Paul Howard, Senior Fellow, Manhattan 
Institute, New York, New York; Ms. Gail Johnson, President and 
CEO, Rainbow Station, Inc., Glenn Allen, Virginia; Dr. Paul Van 
de Water, Senior Fellow, Center on Budget and Policy 
Priorities, Washington, D.C.; and Mr. Neil Trautwein, Vice 
President and Employee Benefits Policy Counsel, National Retail 
Federation, Washington, D.C.

                             115TH CONGRESS

First Session--Hearings

    On February 1, 2017, the Committee held a hearing entitled 
``Rescuing Americans from the Failed Health Care Law and 
Advancing Patient-Centered Solutions,'' which examined failures 
of the ACA and also examined association health plans. 
Witnesses were Mr. Scott Bollenbacher, CPA, Managing Partner, 
Bollenbacher and Associates, LLC, Portland, Indiana; Mr. Joe 
Eddy, President and Chief Executive Officer, Eagle 
Manufacturing Company, Wellsburg, West Virginia; Ms. Angela 
Schlaack, St. Joseph, Michigan; and Dr. Tevi Troy, Chief 
Executive Officer, American Health Policy Institute, 
Washington, D.C.
    On February 1, 2017, the Committee held a hearing entitled 
``Rescuing Americans from the Failed Health Care Law and 
Advancing Patient-Centered Solutions,'' which examined failures 
of the ACA and also examined association health plans. 
Witnesses were Mr. Scott Bollenbacher, CPA, Managing Partner, 
Bollenbacher and Associates, LLC, Portland, Indiana; Mr. Joe 
Eddy, President and Chief Executive Officer, Eagle 
Manufacturing Company, Wellsburg, West Virginia; Ms. Angela 
Schlaack, St. Joseph, Michigan; and Dr. Tevi Troy, Chief 
Executive Officer, American Health Policy Institute, 
Washington, D.C.
    On March 1, 2017, the Committee held a hearing entitled 
``Legislative Proposals to Improve Health Care Coverage and 
Provide Lower Costs for Families,'' which examined the Small 
Business Health Fairness Act of 2017 (H.R. 1101), among other 
proposals. H.R. 1101 provides a legislative solution for 
association health plans. Witnesses were Mr. Jon B. Hurst, 
President, Retailers Association of Massachusetts, Boston, 
Massachusetts; Ms. Allison R. Klausner, J.D., Principal, 
Government Relations Leader, Conduent, Secaucus, New Jersey; 
Ms. Lydia Mitts, Associate Director of Affordability 
Initiatives, Families USA, Washington, D.C.; and Mr. Jay 
Ritchie, Executive Vice President, Tokio Marine HHC, Kennesaw, 
Georgia.

Legislative Action

    On February 16, 2017, Rep. Sam Johnson (R-TX) introduced 
the Small Business Health Fairness Act of 2017 (H.R. 1101) 
along with then-Subcommittee on Health, Employment, Labor, and 
Pensions (HELP) Chairman Tim Walberg (R-MI).\7\
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    \7\H.R. 1101, 115th Cong. (2017).
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    On March 8, 2017, the Committee considered H.R. 1101, the 
Small Business Health Fairness Act of 2017.\8\ Then-HELP 
Subcommittee Chairman Walberg offered an amendment in the 
nature of a substitute, making technical changes to the 
introduced bill. The Committee voted to adopt the amendment in 
the nature of a substitute by voice vote. Rep. Susan Davis (D-
CA) offered an amendment to prevent the bill from taking effect 
under certain circumstances. The amendment failed by a vote of 
17 to 22. The Committee favorably reported H.R. 1101, as 
amended, to the House of Representatives by a vote of 22 to 17.
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    \8\H.R. 1101, Small Business Health Fairness Act of 2017: Markup 
Before the H. Comm. on Educ. & the Workforce, 115th Cong. (Mar. 8, 
2017).
---------------------------------------------------------------------------
    On March 22, 2017, the House passed H.R. 1101, the Small 
Business Health Fairness Act of 2017 by a vote of 236-175.

Second Session--Hearing

    On March 16, 2018, the HELP Subcommittee held a hearing 
entitled ``Expanding Affordable Health Care Options: Examining 
the Department of Labor's Proposed Rule on Association Health 
Plans,'' which examined the U.S. Department of Labor's (DOL) 
recent proposed rule on AHPs as an alternative to Obamacare. 
Witnesses were Mr. Christopher Condeluci, Principal and Sole 
Shareholder, CC Law and Policy PLLC, Washington, D.C.; Mr. 
Michael McGrew, CEO McGrew Real Estate, Lawrence, Kansas; Ms. 
Catherine Monson, CEO and President, FASTSIGNS International, 
Inc., Carrollton, Texas; and Mr. John Arensmeyer, Founder and 
CEO, Small Business Majority, Washington, D.C.

                             117TH CONGRESS

First Session--Hearing

    On June 9, 2021, the Committee held a hearing entitled 
``Examining the Policies and Priorities of the U.S. Department 
of Labor,'' during which the Secretary of Labor was questioned 
about the Department's Fiscal Year 2022 budget priorities. The 
Committee also examined the Department's views on the Trump 
administration's rule to expand AHPs. The sole witness was the 
Honorable Martin J. Walsh, Secretary of DOL, Washington, D.C.

Second Session--Hearing

    On February 17, 2022, the HELP Subcommittee held a hearing 
entitled ``Exploring Pathways to Affordable, Universal Health 
Coverage,'' which examined, among other things, the benefits of 
expanding AHPs. The witnesses were Dr. Brian Blase, President, 
Paragon Health Institute, Ponte Verde, Florida; Dr. Georges C. 
Benjamin, Executive Director, the American Public Health 
Association, Washington, D.C.; Ms. Katie Keith, Center on 
Health Insurance Reforms, Georgetown University, Washington, 
D.C.; and Mr. Robert B. Reich, Carmel P. Friesen Professor of 
Public Policy, Goldman School of Public Policy, University of 
California, Berkley, California.

                             118TH CONGRESS

First Session--Hearing

    On April 26, 2023, the HELP Subcommittee held a hearing 
entitled ``Reducing Health Care Costs for Working Americans and 
Their Families,'' which examined H.R. 2868, the Association 
Health Plans Act, among other proposals, and also examined the 
continuing negative impact of the ACA on employer-sponsored 
health coverage and on lowering costs by expanding AHPs. 
Witnesses were Mr. Joel White, President, Council for 
Affordable Health Coverage (CAHC), Washington, D.C.; Mrs. Tracy 
Watts, Senior Partner, Mercer, Washington, D.C.; Marcie 
Strouse, Partner, Capitol Benefits Group, Des Moines, Iowa; and 
Ms. Sabrina Corlette, J.D., Senior Research Professor, Center 
on Health Insurance Reforms, Georgetown University's Health 
Policy Institute, Washington, D.C.

Legislative Action

    On April 25, 2023, Rep. Walberg introduced the Association 
Health Plans Act (H.R. 2868) with Chairwoman Foxx, HELP 
Subcommittee Chairman Bob Good (R-VA), Rep. Rick Allen (R-GA), 
Rep. Dan Crenshaw (R-TX), and Rep. Michael Burgess (R-TX) as 
original cosponsors. The bill was referred solely to the 
Committee on Education and the Workforce. On June 6, 2023, the 
Committee considered H.R. 2868, the Association Health Plans 
Act in legislative session and reported it favorably, as 
amended, to the House of Representatives by a recorded vote of 
23-18. The Committee adopted the following amendment to H.R. 
2868: Rep. Walberg offered an Amendment in the Nature of a 
Substitute (ANS) clarifying that an organization has to be 
actively in existence for two years prior to the establishment 
of an AHP in order for the AHP to qualify as a group health 
plan under H.R. 2868. In Section 3, the ANS also strikes 
``employee welfare benefit plan'' and inserts ``group health 
plan'' to clarify that premium rates are for health care only.

                            Committee Views


                              INTRODUCTION

Background on employer-sponsored insurance coverage

    Since World War II, employers have offered health care 
benefits to recruit and retain talent and to ensure a healthy 
and productive workforce. Employer-sponsored health insurance 
covers almost 159 million American workers and family 
members.\9\ According to the U.S. Census Bureau, 54.3 percent 
of Americans were covered by employment-based health coverage 
in 2021.\10\ When given the option for employment-based health 
coverage, 77 percent of workers take up coverage.\11\ Almost 
all businesses with at least 200 or more employees offer health 
benefits.\12\ According to the Kaiser Family Foundation, 
however, smaller firms (with 3 to 199 employees) are 
significantly less likely to offer health benefits.\13\ As a 
result, in 2022, just over half of all employers offered some 
health benefits.\14\
---------------------------------------------------------------------------
    \9\Kaiser Family Found., Employer Health Benefits: 2022 Annual 
Survey, 2022 Employer Health Benefits Survey 58, http://files.kff.org/
attachment/Report-Employer-Health-Benefits-2022-Annual-Survey.pdf.
    \10\U.S. Census Bur., U.S. Dep't of Com., Health Insurance Coverage 
in the United States: 2021, http://census.gov/content/dam/Census/
library/publications/2022/demo/p60-278.pdf.
    \11\Kaiser Family Found., supra note 9, at 12.
    \12\Id.
    \13\Id.
    \14\Id.
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    Employer-provided health benefits are regulated by a number 
of laws, including ERISA as amended by the ACA. DOL implements 
and enforces ERISA. By virtue of its jurisdiction over ERISA, 
the Committee has jurisdiction over employer-provided health 
coverage.
    Small and large employers offer health care coverage to 
employees in self-funded arrangements (self-insurance) or 
purchase fully insured plans. ERISA regulates both fully 
insured and self-insured plans, but only self-insured plans are 
exempt from a patchwork of benefit mandates imposed under state 
insurance law. Employers sponsoring self-insured plans are not 
subject to the same requirements under the ACA as those with 
fully insured plans. Therefore, employer-provided plans have 
different requirements and costs depending on funding 
arrangements. Last year, approximately 65 percent of workers 
with employer-sponsored health coverage were enrolled in a 
self-funded plan, up from 44 percent in 1999 and 55 percent in 
2007.\15\
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    \15\Id. at 157.
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Obamacare has failed, proving the need for a better way of providing 
        access to affordable, quality health care

    The ACA attempted to expand access to health insurance 
through a complicated structure of federal subsidies, Medicaid 
expansion, and new rules governing health insurance markets. 
The law has severely damaged America's health care system and 
is collapsing under its own weight. For example, President 
Obama famously promised the ACA would ``lower premiums by up to 
$2,500 for a typical family per year,'' yet the evidence 
suggests otherwise.\16\ Additionally, small businesses and 
their employees have been ``hurt badly by the cost increases 
caused by the ACA.''\17\ Small businesses continue to struggle 
with the cost of health care coverage, with adverse impacts to 
growth, hiring, and workforce pay.\18\ In June 2022, Kaiser 
Family Foundation reported that individual health care debt is 
a significant problem in the United States. The same study 
reports that half of adults find it difficult to afford health 
care and that cost is often a barrier to obtaining needed 
health care or filling prescriptions. \19\
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    \16\Jess Henig & Lori Robertson, Obama's Inflated Health `Savings', 
FactCheck.org, Jun. 16, 2008, http://www.factcheck.org/2008/06/obamas-
inflated-health-savings/.
    \17\Rescuing Americans from the Failed Health Care Law and 
Advancing Patient-Centered Solutions: Hearing Before the H. Comm. on 
Educ. & the Workforce, 115th Cong. 42 (2017) (statement of Scott 
Bollenbacher, Managing Partner, Bollenbacher & Assoc., LLC).
    \18\Small Bus. for Am. Future, Survey: Health Care Costs Putting 
Financial Pressure on Small Business (Oct. 2022), http://irp.cdn-
website.com/b4559992/files/uploaded/
SBAF%20National%20_health_care%20Survey%20Oct.%202022.pdf (reporting 
survey results of 1,209 small business owners finding that, to offset 
rising health care costs, nearly half increased prices of goods or 
services, 38 percent delayed growth opportunities, and 28 percent 
slowed hiring).
    \19\Alex Montero et al., Kaiser Family Found., Americans' 
Challenges with Health Care Costs (July 14, 2022), https://www.kff.org/
health-costs/issue-brief/americans-challenges-with-health-care-costs/ 
(reporting that 41 percent of adults have medical or dental care debt 
owed to credit cards, collections agencies, families and friends, 
banks, and other lenders).
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    The ACA placed additional mandates and administrative 
burdens on employers, increasing the cost of insurance coverage 
and making it more difficult to hire workers and grow their 
businesses. According to a study by the American Action Forum, 
ACA regulations have a significant negative impact on the labor 
market. The study concluded that roughly 300,000 small business 
jobs were lost, and 10,000 small businesses closed as a result 
of ACA's costs and regulations.\20\
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    \20\Ben Gitis & Sam Batkins, Update: Obamacare's Impact on Small 
Business Wages and Employment, Am. Action Forum (2017), https://
americanactionforum.org/research/update-obamacares-impact-small-
business-wages-employment/.
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    In the aftermath of ACA, approximately 36 percent of small 
businesses with fewer than 10 employees stopped offering 
coverage, leaving workers with even fewer health care 
options.\21\ In 2021, the offer rate for businesses with fewer 
than 50 employees had dropped to 31.9 percent, compared with 39 
percent in 2010 when ACA passed.\22\ Due to their size and 
economies of scale, large businesses and labor organizations 
have the ability to negotiate on behalf of their employees for 
high-quality health care at more affordable costs. By offering 
a qualified group health plan under ERISA, these large 
employers and labor organizations are also exempt from myriad 
state rules and regulations on health insurance. Small 
businesses, however, do not have the same bargaining power as 
larger businesses and are unable to band together to increase 
their bargaining power in the health insurance marketplace.
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    \21\Paul Fronstin, EBRI Educ. & Research Fund, Fewer Small 
Employers Offering Health Coverage; Large Employers Holding Steady 
(2016) (Jul. 2016), http://ebri.org/content/fewer-small-employers-
offering-health-coverage-large-employers-holding-steady-3367 (studying 
the impact of the ACA on employer health insurance offer rates).
    \22\Agency for Healthcare & Quality, Ctr. for Financing, Access and 
Cost Trends 2021 Medical Expenditure Panel Survey-Insurance Component, 
Table 1.A.2. (2021), http://meps.ahrq.gov/data_stats/summ_tables/insr/
state/series_2/2021/ic21_iia_f_pdf; Agency for Healthcare & Quality, 
Ctr. for Financing, Access and Costs Trends 2010 Medical Expenditure 
Panel Survey--Insurance Component, Table I.A.2 (2010), http://
meps.ahrq.gov/data_stats/summ_tables/insr/state/series_2/2010/
9c10_iaa_f.pdf.
---------------------------------------------------------------------------
    According to a survey released by the National Federation 
of Independent Business (NFIB) in March of 2023, 65 percent of 
small business employers that do not currently offer coverage 
cite the cost of health insurance coverage as the top 
reason.\23\ In testimony before the HELP Subcommittee, Mr. Joel 
White, President of the Council for Affordable Health Coverage, 
stated that ACA mandates applicable to small businesses 
increase the cost of providing health care coverage and limit 
choices: ``As Congress increased [costs for small businesses] 
and limited their choices, the authors of ACA created powerful 
incentives for small businesses to drop coverage. And they 
did.''\24\
---------------------------------------------------------------------------
    \23\Holly Wade, Nfib Research Ctr., Small Business Health Insurance 
Survey (Mar. 2023), https://strgnfibcom.blob.core.windows.net/nfibcom/
Health-insurance-survey-NFIB.pdf.
    \24\Reducing Health Care Costs for Working Americans and Their 
Families: Hearing Before the Subcomm. on Health, Employment, Labor & 
Pensions of the H. Comm. on Educ. & the Workforce, 118th Cong. (2023) 
(statement of Joel White, President, Council for Affordable Health 
Coverage).
---------------------------------------------------------------------------
    One significant factor contributing to the high cost of 
health care for small employers is their inability to band 
together to unlock the financial benefits of small business 
pooling arrangements. These cost-saving benefits--economies of 
scale, freedom from state regulation, and increased 
administrative efficiencies--would help small employers access 
coverage at a more affordable price and decrease the number of 
uninsured individuals who work in small businesses. That is 
particularly important because, as stated above, the percentage 
of smaller firms that offer coverage has fallen from 39 percent 
to 31.9 percent since 2010.
    To address the damage to small business caused by the ACA, 
Mr. White added, ``A good start would be to pass Congressman 
Walberg's bill the Association Health Plan Act to ensconce AHPs 
in statute, clarify regulatory authority, and expand AHPs as an 
option for employers,'' namely, the ability to pool together to 
offer health insurance coverage to their employees.

The need for small business pooling

    AHPs will give small businesses another option for offering 
health insurance coverage. In a statement submitted to the HELP 
Subcommittee, 18 organizations comprising the Coalition to 
Protect and Promote Association Health Plans (the ``AHP 
Coalition'') affirmed the benefits of AHPs, with data from AHPs 
demonstrating significant savings to employers in different 
industries from five to 35 percent and to participating self-
employed individuals from two to 50 percent.\25\ The AHP 
Coalition stated that several beneficial AHPs were 
``discontinued due to the legal uncertainty surrounding AHPs'' 
following an adverse ruling by the U.S. District Court for the 
District of Columbia regarding DOL's final regulations of June 
18, 2018, expanding AHP coverage.
---------------------------------------------------------------------------
    \25\Id. (statement of The Coalition to Protect and Promote 
Association Health Plans).
---------------------------------------------------------------------------
    AHPs allow small businesses to pool risk. Mr. White's 
testimony underscores the advantages of risk pooling that AHPs 
provide to small businesses:
          According to a recent survey from the Small Business 
        Entrepreneurship Council, only 1 in 5 (17 percent) 
        small business leaders agree that the employer health 
        care solutions available to them have kept up with 
        changing market conditions. In addition, small firms do 
        not have large pools of employees to spread risk across 
        broad populations or to reduce administrative costs 
        associated with offering coverage. One sick person at a 
        small business can blow a hole in profits and 
        potentially sink the enterprise.\26\
---------------------------------------------------------------------------
    \26\Id. (White statement).
---------------------------------------------------------------------------
    A key element of H.R. 2868 is that AHPs would have the 
ability to self-fund, which in turn would allow small 
businesses to band together across state lines to offer 
coverage. Self-insuring also allows employers to offer plans 
designed to meet the needs of their employees while controlling 
costs. These plans provide excellent, well-regulated benefits. 
As Mr. White testified, ``To help small businesses across the 
country, Congress should protect access to level-funded plans 
and reinsurance (including low attachment point reinsurance) 
policies by ensuring they remain available for sale and 
purchase in all states. This would involve clarifying ERISA 
preemption with respect to self-funded arrangements for small 
businesses.''\27\ As Mr. Jay Ritchie, Executive Vice President 
of Tokio Marine HCC Stop-Loss Group and the Chairman of the 
Board of the Self-Insurance Institute of America, Inc., 
testified that ``[s]elf-insurance plans are regulated by no 
less than 10 federal laws, including [ERISA] and [HIPAA].''\28\ 
Larger businesses and unions that are self-funded are regulated 
under these rules; prohibiting AHPs from self-funding would 
punish small businesses and deny them the same protections. 
Further, there is no data to substantiate critics' claims that 
self-funded AHPs will have any effect on the fully insured 
small group market or the ACA's Small Business Health Options 
Program Exchanges.\29\
---------------------------------------------------------------------------
    \27\Id. (White statement).
    \28\Legislative Proposals to Improve Health Care Coverage and 
Provide Lower Costs for Families: Hearing Before the H. Comm on Educ. & 
the Workforce, 115th Cong. 42 (2017) (statement of Jay Ritchie, Exec. 
Vice President, Tokio Marine HCC).
    \29\Id. at 43.
---------------------------------------------------------------------------
    Some states already allow pooling arrangements within their 
state. AHPs remain subject to all federal and state laws 
otherwise applicable to such plans, and the provisions of H.R. 
2868 are not intended to modify the application or 
interpretation of such laws to such plans.

Department of Labor regulation expanding AHPs

    On June 21, 2018, DOL issued a final regulation to expand 
the groups and associations of employers eligible to sponsor 
employment-based health coverage.\30\ The rule was intended to 
expand access to affordable, high-quality health care options, 
particularly for employees of small employers. On March 28, 
2019, the U.S. District Court of the District of Columbia 
invalidated key portions of the rule.\31\ An appeal is pending 
with the U.S. Court of Appeals for the D.C. Circuit.
---------------------------------------------------------------------------
    \30\Definition of ``Employer'' Under Section 3(5) of ERISA--
Association Health Plans, 83 Fed. Reg. 28,912 (June 21, 2018).
    \31\New York v. DOL, 363 F. Supp. 3d 109 (D.D.C. 2019).
---------------------------------------------------------------------------
    In the brief period before the rule was blocked by the 
district court, 28 new AHPs were established. Due to the short 
period these plans were operating, little data is available. 
However, reported savings for the plans averaged 29 percent for 
self-funded AHPs and 23 percent for fully insured AHPs.\32\
---------------------------------------------------------------------------
    \32\Kev Coleman, Ass'n Health Plans, Inc., First Phase Of New 
Association Health Plans Reveal Promising Trends, https://
associationhealthplans.com/reports/new-ahp-study.
---------------------------------------------------------------------------

The federal government's attack on small business owners

    On May 31, the Centers for Medicare and Medicaid Services 
(CMS) sent a letter to Gov. Glenn Youngkin (R-VA) alleging that 
the state is not enforcing certain coverage mandates required 
by the ACA.\33\ A 2022 Virginia law allows self-employed 
individuals and employees of real estate brokerage firms to 
band together to create an AHP.\34\ The letter claims these 
groups cannot form AHPs because the definition of employee 
organization under ERISA does not allow for the participation 
of self-employed individuals. Federal legislation is needed to 
expand AHPs in order to help protect access for small business 
owners in Virginia and other states.
---------------------------------------------------------------------------
    \33\Letter from Chiquita Brooks-LaSure, Ctr. For Medicare & 
Medicaid Serv., to Gov. Glenn Youngkin (May 31, 2023), https://
www.cms.gov/files/document/virginia-preliminary-determination-
letter.pdf.
    \34\Press Release, Governor Glenn Youngkin Signs Bipartisan 
Legislation To Expand Health Care Coverage Options For Virginia's 
Realtor Community (June 16, 2022), https://www.governor.virginia.gov/
newsroom/news-releases/2022/june/name-934901-en.html.
---------------------------------------------------------------------------

Support for creating options and flexibility for small businesses

    Because it benefits both employers and working families, 
AHP legislation has been consistently supported over the years, 
including by a broad swath of groups representing job creators, 
including: the National Federation of Independent Businesses, 
Council for Affordable Coverage, National Association of 
REALTORS, the North Carolina Chamber, Associated General 
Contractors of America, MLD Foundation, Main Street Freedom 
Alliance, National Association of Wholesaler-Distributors, 
Small Business & Entrepreneurship Council, the American Farm 
Bureau Federation, American Society of Association Executives, 
Associated Employers Benefit & Trust; Indiana Credit Union 
League, Manufacturer & Business Association, Michigan Business 
and Professional Association, Michigan Dental Association, 
National Restaurant Association, Small Business Association of 
Michigan, and U.S. Chamber of Commerce.

              H.R. 2868, THE ASSOCIATION HEALTH PLANS ACT

    The Committee is advancing this legislation to expand 
access to more affordable health care coverage for small 
employers and self-employed individuals by authorizing the 
creation of AHPs sponsored by groups or associations of 
employers, including self-employed individuals. The legislation 
allows small businesses and independent contractors to band 
together across state lines through associations for their 
workers, thus increasing their bargaining power with plans and 
providers and placing them on a more level playing field with 
larger companies and unions. H.R. 2868 frees small businesses 
from costly state-mandated benefit packages, spreads risk for 
self- employed individuals, and lowers overhead costs, enabling 
employers to offer more affordable health care coverage to 
their workers and self-employed individuals to access more 
affordable health care coverage.

                               CONCLUSION

    H.R. 2868, the Association Health Plans Act, makes it 
easier for small businesses to promote a healthy workforce and 
offer more affordable health care coverage. By allowing small 
businesses to join together in AHPs, the bill puts smaller 
businesses on a more level playing field with larger companies 
and unions, and it increases their bargaining power with 
insurance providers. More importantly, it provides smaller 
employers--many of whom have limited resources--with a greater 
opportunity to offer their workers quality and affordable 
health care coverage. If enacted, H.R. 2868 will empower small 
businesses to provide quality health care for their employees 
and independent contractors to obtain quality affordable health 
care coverage.

                                Summary


                  H.R. 2868 SECTION-BY-SECTION SUMMARY

Section 1. Short title

    Section 1 provides that the short title is ``Association 
Health Plans Act.''

Section 2. Treatment of group or association of employers

    Section 2 amends the definition of ``employer'' under ERISA 
to confirm that a group or association of employers--regardless 
of profession or geography--may be considered a single large 
employer if the group or association:
           Establishes a group health plan;
           Includes at least 51 employees;
           Has been actively in existence for a minimum 
        of two years;
           Has been formed in good faith for a purpose 
        other than purchasing insurance;
           Has no membership restrictions based on 
        health status-related factors;
           Makes coverage available to all employees 
        regardless of health status;
           Does not offer coverage to anyone outside 
        the group or association;
           Has established a governing board with at 
        least 75 percent of board members being duly elected by 
        the employer members participating in the health plan; 
        and
           Is not a health insurance issuer itself or 
        controlled or owned by a health insurance issuer or its 
        subsidiary.
    For purposes of determining whether the group or 
association includes at least 51 employees, all employees of 
employer members of the group or association are aggregated and 
treated as being employed by a single employer.
            Grandfather clause and additional pathways
    Section 2 grandfathers existing AHPs by allowing a group or 
association to be considered an ``employer'' for purposes of 
sponsoring an ERISA-covered health plan if the group or 
association (1) satisfies criteria outlined in DOL advisory 
opinions issued prior to the enactment of H.R. 2868 or (2) 
satisfies any criteria in prospective DOL regulations.
    Section 2 allows self-employed individuals to participate 
in an ERISA-covered health plan established by a group or 
association by treating a self-employed individual as an 
``employer'' and an ``employee'' as well as a ``participant'' 
in the health plan. For these purposes, a self-employed 
individual:
           Does not have any common-law employees;
           Has ownership right in a trade or business;
           Earns wages or income from this trade or 
        business; and
           Works at least 10 hours per week or 40 hours 
        per month.
    Section 2 requires that all AHPs have established a 
governing board with at least 75 percent of board members duly 
elected by the employer members participating in the health 
plan. The board shall (1) determine whether a self-employed 
individual satisfies the criteria to join a group or 
association prior to the individual enrolling in the health 
plan and (2) periodically monitor whether an individual 
continues to be considered a self-employed individual. If the 
board determines that a self-employed individual no longer 
satisfies the criteria, the individual and their dependents 
will no longer be eligible for coverage (other than COBRA 
continuation coverage, if applicable) starting in the next plan 
year, although an individual has the right to provide evidence 
that he or she continues to meet (or subsequently meets) the 
criteria to maintain or restore coverage.
    Section 2 also clarifies that participation in an ERISA-
covered plan sponsored by a group or association of employers 
is not evidence of joint employment.

Section 3. Rules applicable to employee welfare benefit plans 
        established and maintained by a group or association of 
        employers

    Section 3 requires that premiums and underwriting be based 
on the risk pool of employer groups instead of on an individual 
level. A group or association of employers made up solely of 
employers with at least one common-law employee (i.e., a group 
or association with no self-employed individuals) may develop 
premium rates in the following manner:
    a. Establish premium rates after considering the collective 
health claims experience of all employees and their dependents 
participating in the plan.
    b. Vary rates up or down for each individual employer 
member of the group or association based on the collective 
health claims experience of the employees employed by each 
respective employer.
    A mixed group or association of employers that includes 
both employers with at least one common-law employee and self-
employed individuals may develop premium rates in the same 
manner as above. However, for purposes of varying the premiums 
by the employer member, all self-employed individuals must be 
aggregated and counted together as their own single group made 
up of at least 20 self-employed individuals. Any premium 
variation for this self-employed individual group shall 
consider the collective health claims experience of all self-
employed individuals and their dependents in this group.
    For a group or association of employers made up solely of 
self-employed individuals (i.e., a group or association with no 
employers with at least one common-law employee), premium rates 
will be developed by considering the collective health claims 
experience of all the self-employed individuals and their 
dependents participating in the plan. The base rates will then 
be charged equally to all self-employed individuals and their 
dependents participating in the plan. If the aggregated group 
of self-employed individuals is less than 20 individuals, this 
group or association cannot permit self-employed individuals to 
participate in the plan.
    Section 3 reconfirms current law and reiterates that an 
ERISA-covered health plan shall: not establish a rule for 
eligibility or continued eligibility in the health plan that 
discriminates against any participant based on a health status-
related factor; not require any participant to pay a premium 
rate that is higher than the premium rate similarly situated 
individuals pay based on a health-status-related factor 
relating to that participant; and not deny coverage based on a 
pre-existing condition.

Section 4. Rules of construction

    Section 4 confirms current law and requires an ERISA-
covered health plan to comply with the ACA's group health plan 
coverage requirements and ERISA's coverage requirements.

                       Explanation of Amendments

    The amendments, including the amendment in the nature of a 
substitute, are explained in the body of this report.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. H.R. 2868 takes important steps to expand access to 
affordable, high-quality healthcare coverage for small 
employers and self-employed individuals.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. This issue will be addressed in the CBO letter.

                           Earmark Statement

    H.R. 2868 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of House rule XXI.

                            Roll Call Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee Report to include for 
each record vote on a motion to report the measure or matter 
and on any amendments offered to the measure or matter the 
total number of votes for and against and the names of the 
Members voting for and against.


         Statement of General Performance Goals and Objectives

    In accordance with clause (3)(c) of House Rule XIII, the 
goal of H.R. 2868, the Association Health Plans Act, is to 
improve access to affordable health coverage options for 
workers employed by small businesses.

                    Duplication of Federal Programs

    No provision of H.R. 2868 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Statement of Oversight Findings and 
                    Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the committee's oversight findings and recommendations are 
reflected in the body of this report.

            Required Committee Hearing and Related Hearings

    In compliance with clause 3(c)(6) of rule XIII the 
following hearing held during the 118th Congress was used to 
develop or consider H.R. 2868: On April 24, 2023, the HELP 
Subcommittee held a hearing entitled ``Reducing Health Care 
Costs for Working Americans and Their Families.''

               New Budget Authority and CBO Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, a cost estimate was not made 
available to the Committee in time for the filing of this 
report. The Chairwoman of the Committee shall cause such 
estimate to be printed in the Congressional Record upon its 
receipt by the Committee.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 2868. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when, as with the present report, 
the committee adopts as its own the cost estimate of the bill 
being prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

            EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974



           *       *       *       *       *       *       *
             TITLE I--PROTECTION OF EMPLOYEE BENEFIT RIGHTS

Subtitle A--General Provisions

           *       *       *       *       *       *       *


                              DEFINITIONS

  Sec. 3. For purposes of this title:
  (1) The terms ``employee welfare benefit plan'' and ``welfare 
plan'' mean any plan, fund, or program which was heretofore or 
is hereafter established or maintained by an employer or by an 
employee organization, or by both, to the extent that such 
plan, fund, or program was established or is maintained for the 
purpose of providing for its participants or their 
beneficiaries, through the purchase of insurance or otherwise, 
(A) medical, surgical, or hospital care or benefits, or 
benefits in the event of sickness, accident, disability, death 
or unemployment, or vacation benefits, apprenticeship or other 
training programs, or day care centers, scholarship funds, or 
prepaid legal services, or (B) any benefit described in section 
302(c) of the Labor Management Relations Act, 1947 (other than 
pensions on retirement or death, and insurance to provide such 
pensions).
  (2)(A) Except as provided in subparagraph (B), the terms 
``employee pension benefit plan'' and ``pension plan'' mean any 
plan, fund, or program which was heretofore or is hereafter 
established or maintained by an employer or by an employee 
organization, or by both, to the extent that by its express 
terms or as a result of surrounding circumstances such plan, 
fund, or program--
          (i) provides retirement income to employees, or
          (ii) results in a deferral of income by employees for 
        periods extending to the termination of covered 
        employment or beyond,
regardless of the method of calculating the contributions made 
to the plan, the method of calculating the benefits under the 
plan or the method of distributing benefits from the plan. A 
distribution from a plan, fund, or program shall not be treated 
as made in a form other than retirement income or as a 
distribution prior to termination of covered employment solely 
because such distribution is made to an employee who has 
attained age 62 and who is not separated from employment at the 
time of such distribution.
  (B) The Secretary may by regulation prescribe rules 
consistent with the standards and purposes of this Act 
providing one or more exempt categories under which--
          (i) severance pay arrangements, and
          (ii) supplemental retirement income payments, under 
        which the pension benefits of retirees or their 
        beneficiaries are supplemented to take into account 
        some portion or all of the increases in the cost of 
        living (as determined by the Secretary of Labor) since 
        retirement,
shall, for purposes of this title, be treated as welfare plans 
rather than pension plans. In the case of any arrangement or 
payment a principal effect of which is the evasion of the 
standards or purposes of this Act applicable to pension plans, 
such arrangement or payment shall be treated as a pension plan. 
An applicable voluntary early retirement incentive plan (as 
defined in section 457(e)(11)(D)(ii) of the Internal Revenue 
Code of 1986) making payments or supplements described in 
section 457(e)(11)(D)(i) of such Code, and an applicable 
employment retention plan (as defined in section 457(f)(4)(C) 
of such Code) making payments of benefits described in section 
457(f)(4)(A) of such Code, shall, for purposes of this title, 
be treated as a welfare plan (and not a pension plan) with 
respect to such payments and supplements.
          (C) A pooled employer plan shall be treated as--
                  (i) a single employee pension benefit plan or 
                single pension plan; and
                  (ii) a plan to which section 210(a) applies.
  (3) The term ``employee benefit plan'' or ``plan'' means an 
employee welfare benefit plan or an employee pension benefit 
plan or a plan which is both an employee welfare benefit plan 
and an employee pension benefit plan.
  (4) The term ``employee organization'' means any labor union 
or any organization of any kind, or any agency or employee 
representation committee, association, group, or plan, in which 
employees participate and which exists for the purpose, in 
whole or in part, of dealing with employers concerning an 
employee benefit plan, or other matters incidental to 
employment relationships; or any employees' beneficiary 
association organized for the purpose in whole or in part, of 
establishing such a plan.
  (5) [The term] (A) The term  ``employer'' means any person 
acting directly as an employer, or indirectly in the interest 
of an employer, in relation to an employee benefit plan; and 
includes a group or association of employers acting for an 
employer in such capacity.
  (B) For purposes of subparagraph (A), a group or association 
of employers shall be treated as an ``employer'', regardless of 
whether the employers composing such group or association are 
in the same industry, trade, or profession, if such group or 
association--
          (i)(I) has established and maintains an employee 
        welfare benefit plan that is a group health plan (as 
        defined in section 733(a)(1));
                  (II) provides coverage under such plan to at 
                least 51 employees after all of the employees 
                employed by all of the employer members of such 
                group or association have been aggregated and 
                counted together as described in subparagraph 
                (D);
                  (III) has been actively in existence for at 
                least 2 years prior to establishing and 
                maintaining an employer welfare benefit plan 
                that is a group health plan (as defined in 
                section 733(a)(1));
                  (IV) has been formed and maintained in good 
                faith for purposes other than providing medical 
                care (as defined in section 733(a)(2)) through 
                the purchase of insurance or otherwise;
                  (V) does not condition membership in the 
                group or association on any health status-
                related factor (as described in section 
                702(a)(1)) relating to any individual;
                  (VI) makes coverage under such plan available 
                to all employer members of such group or 
                association regardless of any health status-
                related factor (as described in section 
                702(a)(1)) relating to such employer members;
                  (VII) does not provide coverage under such 
                plan to any individual other than an employee 
                of an employer member of such group or 
                association;
                  (VIII) has established a governing board with 
                by-laws or other similar indications of 
                formality to manage and operate such plan in 
                both form and substance, of which at least 75 
                percent of the board members shall be made up 
                of employer members of such group or 
                association participating in the plan that are 
                duly elected by each participating employer 
                member casting 1 vote during a scheduled 
                election;
                  (IX) is not a health insurance issuer (as 
                defined in section 733(b)(2)), and is not owned 
                or controlled by such a health insurance issuer 
                or by a subsidiary or affiliate of such a 
                health insurance issuer, other than to the 
                extent such a health insurance issuer--
                          (aa) may participate in the group or 
                        association as a member; and
                          (bb) may provide services such as 
                        assistance with plan development, 
                        marketing, and administrative services 
                        to such group or association;
          (ii) meets any set of criteria to qualify for such 
        treatment in an advisory opinion issued by the 
        Secretary prior to the date of enactment of the 
        Association Health Plans Act; or
          (iii) meets any other set of criteria to qualify for 
        such treatment that the Secretary by regulation may 
        provide.
  (C)(i) For purposes of subparagraph (B), a self-employed 
individual shall be treated as--
                  (I) an employer who may become a member of a 
                group or association of employers;
                  (II) an employee who may participate in an 
                employee welfare benefit plan established and 
                maintained by such group or association; and
                  (III) a participant of such plan subject to 
                the eligibility determination and monitoring 
                requirements set forth in clause (iii).
                  (ii) For purposes of this subparagraph, the 
                term ``self-employed individual'' means an 
                individual who--
                          (I) does not have any common law 
                        employees;
                          (II) has an ownership right in a 
                        trade or business, regardless of 
                        whether such trade or business is 
                        incorporated or unincorporated;
                          (III) earns wages (as defined in 
                        section 3121(a) of the Internal Revenue 
                        Code of 1986) or self-employment income 
                        (as defined in section 1402(b) of such 
                        Code) from such trade or business; and
                          (IV) works at least 10 hours per week 
                        or 40 hours per month providing 
                        personal services to such trade or 
                        business.
                  (iii) The board of a group or association of 
                employers shall--
                          (I) initially determine whether an 
                        individual meets the requirements under 
                        clause (ii) to be considered a self-
                        employed individual for the purposes of 
                        being treated as an--
                                  (aa) employer member of such 
                                group or association (in 
                                accordance with clause (i)(I)); 
                                and
                                  (bb) employee who may 
                                participate in the employee 
                                welfare benefit plan 
                                established and maintained by 
                                such group or association (in 
                                accordance with clause 
                                (i)(II));
                          (II) through reasonable monitoring 
                        procedures, periodically determine 
                        whether the individual continues to 
                        meet such requirements; and
                          (III) if the board determines that an 
                        individual no longer meets such 
                        requirements, not make such plan 
                        coverage available to such individual 
                        (or dependents thereof) for any plan 
                        year following the plan year during 
                        which the board makes such 
                        determination. If, subsequent to a 
                        determination that an individual no 
                        longer meets such requirements, such 
                        individual furnishes evidence of 
                        satisfying such requirements, such 
                        individual (and dependents thereof) 
                        shall be eligible to receive plan 
                        coverage.
  (D) For purposes of subparagraph (B), all of the employees 
(including self-employed individuals) employed by all of the 
employer members (including self-employed individuals) of a 
group or association of employers shall be--
          (i) treated as employed by a single employer; and
          (ii) aggregated and counted together for purposes of 
        any regulation of an employee welfare benefit plan 
        established and maintained by such group or 
        association.
  (6) The term ``employee'' means any individual employed by an 
employer.
  (7) The term ``participant'' means any employee or former 
employee of an employer, or any member or former member of an 
employee organization, who is or may become eligible to receive 
a benefit of any type from an employee benefit plan which 
covers employees of such employer or members of such 
organization, or whose beneficiaries may be eligible to receive 
any such benefit.
  (8) The term ``beneficiary'' means a person designated by a 
participant, or by the terms of an employee benefit plan, who 
is or may become entitled to a benefit thereunder.
  (9) The term ``person'' means an individual, partnership, 
joint venture, corporation, mutual company, joint-stock 
company, trust, estate, unincorporated organization, 
association, or employee organization.
  (10) The term ``State'' includes any State of the United 
States, the District of Columbia, Puerto Rico, the Virgin 
Islands, American Samoa, Guam, Wake Island, and the Canal Zone. 
The term ``United States'' when used in the geographic sense 
means the States and the Outer Continental Shelf lands defined 
in the Outer Continental Shelf Lands Act (43 U.S.C. 1331-1343).
  (11) The term ``commerce'' means trade, traffic, commerce, 
transportation, or communication between any State and any 
place outside thereof.
  (12) The term ``industry or activity affecting commerce'' 
means any activity, business, or industry in commerce or in 
which a labor dispute would hinder or obstruct commerce or the 
free flow of commerce, and includes any activity or industry 
``affecting commerce'' within the meaning of the Labor 
Management Relations Act, 1947, or the Railway Labor Act.
  (13) The term ``Secretary'' means the Secretary of Labor.
  (14) The term ``party in interest'' means, as to an employee 
benefit plan--
          (A) any fiduciary (including, but not limited to, any 
        administrator, officer, trustee, or custodian), 
        counsel, or employee of such employee benefit plan;
          (B) a person providing services to such plan;
          (C) an employer any of whose employees are covered by 
        such plan;
          (D) an employee organization any of whose members are 
        covered by such plan;
          (E) an owner, direct or indirect, of 50 percent or 
        more of--
                  (i) the combined voting power of all classes 
                of stock entitled to vote or the total value of 
                shares of all classes of stock of a 
                corporation,
                  (ii) the capital interest or the profits 
                interest of a partnership, or
                  (iii) the beneficial interest of a trust or 
                unincorporated enterprise,
        which is an employer or an employee organization 
        described in subparagraph (C) or (D);
          (F) a relative (as defined in paragraph (15)) of any 
        individual described in subparagraph (A), (B), (C), or 
        (E);
          (G) a corporation, partnership, or trust or estate of 
        which (or in which) 50 percent or more of--
                  (i) the combined voting power of all classes 
                of stock entitled to vote or the total value of 
                shares of all classes of stock of such 
                corporation,
                  (ii) the capital interest or profits interest 
                of such partnership, or
                  (iii) the beneficial interest of such trust 
                or estate,
        is owned directly or indirectly, or held by persons 
        described in subparagraph (A), (B), (C), (D), or (E);
          (H) an employee, officer, director (or an individual 
        having powers or responsibilities similar to those of 
        officers or directors), or a 10 percent or more 
        shareholder directly or indirectly, of a person 
        described in subparagraph (B), (C), (D), (E), or (G), 
        or of the employee benefit plan; or
          (I) a 10 percent or more (directly or indirectly in 
        capital or profits) partner or joint venturer of a 
        person described in subparagraph (B), (C), (D), (E), or 
        (G).
The Secretary, after consultation and coordination with the 
Secretary of the Treasury, may by regulation prescribe a 
percentage lower than 50 percent for subparagraph (E) and (G) 
and lower than 10 percent for subparagraph (H) or (I). The 
Secretary may prescribe regulations for determining the 
ownership (direct or indirect) of profits and beneficial 
interests, and the manner in which indirect stockholdings are 
taken into account. Any person who is a party in interest with 
respect to a plan to which a trust described in section 
501(c)(22) of the Internal Revenue Code of 1986 is permitted to 
make payments under section 4223 shall be treated as a party in 
interest with respect to such trust.
  (15) The term ``relative'' means a spouse, ancestor, lineal 
descendant, or spouse of a lineal descendant.
  (16)(A) The term ``administrator'' means--
          (i) the person specifically so designated by the 
        terms of the instrument under which the plan is 
        operated;
          (ii) if an administrator is not so designated, the 
        plan sponsor; or
          (iii) in the case of a plan for which an 
        administrator is not designated and a plan sponsor 
        cannot be identified, such other person as the 
        Secretary may by regulation prescribe.
  (B) The term ``plan sponsor'' means (i) the employer in the 
case of an employee benefit plan established or maintained by a 
single employer, (ii) the employee organization in the case of 
a plan established or maintained by an employee organization, 
(iii) in the case of a plan established or maintained by two or 
more employers or jointly by one or more employers and one or 
more employee organizations, the association, committee, joint 
board of trustees, or other similar group of representatives of 
the parties who establish or maintain the plan, or (iv) in the 
case of a pooled employer plan, the pooled plan provider.
  (17) The term ``separate account'' means an account 
established or maintained by an insurance company under which 
income, gains, and losses, whether or not realized, from assets 
allocated to such account, are, in accordance with the 
applicable contract, credited to or charged against such 
account without regard to other income, gains, or losses of the 
insurance company.
  (18) The term ``adequate consideration'' when used in part 4 
of subtitle B means (A) in the case of a security for which 
there is a generally recognized market, either (i) the price of 
the security prevailing on a national securities exchange which 
is registered under section 6 of the Securities Exchange Act of 
1934, or (ii) if the security is not traded on such a national 
securities exchange, a price not less favorable to the plan 
than the offering price for the security as established by the 
current bid and asked prices quoted by persons independent of 
the issuer and of any party in interest; and (B) in the case of 
an asset other than a security for which there is a generally 
recognized market, the fair market value of the asset as 
determined in good faith by the trustee or named fiduciary 
pursuant to the terms of the plan and in accordance with 
regulations promulgated by the Secretary.
  (19) The term ``nonforfeitable'' when used with respect to a 
pension benefit or right means a claim obtained by a 
participant or his beneficiary to that part of an immediate or 
deferred benefit under a pension plan which arises from the 
participant's service, which is unconditional, and which is 
legally enforceable against the plan. For purposes of this 
paragraph, a right to an accrued benefit derived from employer 
contributions shall not be treated as forfeitable merely 
because the plan contains a provision described in section 
203(a)(3).
  (20) The term ``security'' has the same meaning as such term 
has under section 2(1) of the Securities Act of 1933 (15 U.S.C. 
77b(1)).
  (21)(A) Except as otherwise provided in subparagraph (B), a 
person is a fiduciary with respect to a plan to the extent (i) 
he exercises any discretionary authority or discretionary 
control respecting management of such plan or exercises any 
authority or control respecting management or disposition of 
its assets, (ii) he renders investment advice for a fee or 
other compensation, direct or indirect, with respect to any 
moneys or other property of such plan, or has any authority or 
responsibility to do so, or (iii) he has any discretionary 
authority or discretionary responsibility in the administration 
of such plan. Such term includes any person designated under 
section 405(c)(1)(B).
  (B) If any money or other property of an employee benefit 
plan is invested in securities issued by an investment company 
registered under the Investment Company Act of 1940, such 
investment shall not by itself cause such investment company or 
such investment company's investment adviser or principal 
underwriter to be deemed to be a fiduciary or a party in 
interest as those terms are defined in this title, except 
insofar as such investment company or its investment adviser or 
principal underwriter acts in connection with an employee 
benefit plan covering employees of the investment company, the 
investment adviser, or its principal underwriter. Nothing 
contained in this subparagraph shall limit the duties imposed 
on such investment company, investment adviser, or principal 
underwriter by any other law.
  (22) The term ``normal retirement benefit'' means the greater 
of the early retirement benefit under the plan, or the benefit 
under the plan commencing at normal retirement age. The normal 
retirement benefit shall be determined without regard to--
          (A) medical benefits, and
          (B) disability benefits not in excess of the 
        qualified disability benefit.
For purposes of this paragraph, a qualified disability benefit 
is a disability benefit provided by a plan which does not 
exceed the benefit which would be provided for the participant 
if he separated from the service at normal retirement age. For 
purposes of this paragraph, the early retirement benefit under 
a plan shall be determined without regard to any benefit under 
the plan which the Secretary of the Treasury finds to be a 
benefit described in section 204(b)(1)(G).
  (23) The term ``accrued benefit'' means--
          (A) in the case of a defined benefit plan, the 
        individual's accrued benefit determined under the plan 
        and, except as provided in section 204(c)(3), expressed 
        in the form of an annual benefit commencing at normal 
        retirement age, or
          (B) in the case of a plan which is an individual 
        account plan, the balance of the individual's account.
The accrued benefit of an employee shall not be less than the 
amount determined under section 204(c)(2)(B) with respect to 
the employee's accumulated contribution.
  (24) The term ``normal retirement age'' means the earlier 
of--
          (A) the time a plan participant attains normal 
        retirement age under the plan, or
          (B) the later of--
                  (i) the time a plan participant attains age 
                65, or
                  (ii) the 5th anniversary of the time a plan 
                participant commenced participation in the 
                plan.
  (25) The term ``vested liabilities'' means the present value 
of the immediate or deferred benefits available at normal 
retirement age for participants and their beneficiaries which 
are nonforfeitable.
  (26) The term ``current value'' means fair market value where 
available and otherwise the fair value as determined in good 
faith by a trustee or a named fiduciary (as defined in section 
402(a)(2)) pursuant to the terms of the plan and in accordance 
with regulations of the Secretary, assuming an orderly 
liquidation at the time of such determination.
  (27) The term ``present value'', with respect to a liability, 
means the value adjusted to reflect anticipated events. Such 
adjustments shall conform to such regulations as the Secretary 
of the Treasury may prescribe.
  (28) The term ``normal service cost'' or ``normal cost'' 
means the annual cost of future pension benefits and 
administrative expenses assigned, under an actuarial cost 
method, to years subsequent to a particular valuation date of a 
pension plan. The Secretary of the Treasury may prescribe 
regulations to carry out this paragraph.
  (29) The term ``accrued liability'' means the excess of the 
present value, as of a particular valuation date of a pension 
plan, of the projected future benefit costs and administrative 
expenses for all plan participants and beneficiaries over the 
present value of future contributions for the normal cost of 
all applicable plan participants and beneficiaries. The 
Secretary of the Treasury may prescribe regulations to carry 
out this paragraph.
  (30) The term ``unfunded accrued liability'' means the excess 
of the accrued liability, under an actuarial cost method which 
so provides, over the present value of the assets of a pension 
plan. The Secretary of the Treasury may prescribe regulations 
to carry out this paragraph.
  (31) The term ``advance funding actuarial cost method'' or 
``actuarial cost method'' means a recognized actuarial 
technique utilized for establishing the amount and incidence of 
the annual actuarial cost of pension plan benefits and 
expenses. Acceptable actuarial cost methods shall include the 
accrued benefit cost method (unit credit method), the entry age 
normal cost method, the individual level premium cost method, 
the aggregate cost method, the attained age normal cost method, 
and the frozen initial liability cost method. The terminal 
funding cost method and the current funding (pay-as-you-go) 
cost method are not acceptable actuarial cost methods. The 
Secretary of the Treasury shall issue regulations to further 
define acceptable actuarial cost methods.
  (32) The term ``governmental plan'' means a plan established 
or maintained for its employees by the Government of the United 
States, by the government of any State or political subdivision 
thereof, or by any agency or instrumentality of any of the 
foregoing. The term ``governmental plan'' also includes any 
plan to which the Railroad Retirement Act of 1935 or 1937 
applies, and which is financed by contributions required under 
that Act and any plan of an international organization which is 
exempt from taxation under the provisions of the International 
Organizations Immunities Act (59 Stat. 669). The term 
``governmental plan'' includes a plan which is established and 
maintained by an Indian tribal government (as defined in 
section 7701(a)(40) of the Internal Revenue Code of 1986), a 
subdivision of an Indian tribal government (determined in 
accordance with section 7871(d) of such Code), or an agency or 
instrumentality of either, and all of the participants of which 
are employees of such entity substantially all of whose 
services as such an employee are in the performance of 
essential governmental functions but not in the performance of 
commercial activities (whether or not an essential government 
function)
  (33)(A) The term ``church plan'' means a plan established and 
maintained (to the extent required in clause (ii) of 
subparagraph (B)) for its employees (or their beneficiaries) by 
a church or by a convention or association of churches which is 
exempt from tax under section 501 of the Internal Revenue Code 
of 1986.
  (B) The term ``church plan'' does not include a plan--
          (i) which is established and maintained primarily for 
        the benefit of employees (or their beneficiaries) of 
        such church or convention or association of churches 
        who are employed in connection with one or more 
        unrelated trades or businesses (within the meaning of 
        section 513 of the Internal Revenue Code of 1986), or
          (ii) if less than substantially all of the 
        individuals included in the plan are individuals 
        described in subparagraph (A) or in clause (ii) of 
        subparagraph (C) (or their beneficiaries).
  (C) For purposes of this paragraph--
          (i) A plan established and maintained for its 
        employees (or their beneficiaries) by a church or by a 
        convention or association of churches includes a plan 
        maintained by an organization, whether a civil law 
        corporation or otherwise, the principal purpose or 
        function of which is the administration or funding of a 
        plan or program for the provision of retirement 
        benefits or welfare benefits, or both, for the 
        employees of a church or a convention or association of 
        churches, if such organization is controlled by or 
        associated with a church or a convention or association 
        of churches.
          (ii) The term employee of a church or a convention or 
        association of churches includes--
                  (I) a duly ordained, commissioned, or 
                licensed minister of a church in the exercise 
                of his ministry, regardless of the source of 
                his compensation;
                  (II) an employee of an organization, whether 
                a civil law corporation or otherwise, which is 
                exempt from tax under section 501 of the 
                Internal Revenue Code of 1986 and which is 
                controlled by or associated with a church or a 
                convention or association of churches; and
                  (III) an individual described in clause (v).
          (iii) A church or a convention or association of 
        churches which is exempt from tax under section 501 of 
        the Internal Revenue Code of 1986 shall be deemed the 
        employer of any individual included as an employee 
        under clause (ii).
          (iv) An organization, whether a civil law corporation 
        or otherwise, is associated with a church or a 
        convention or association of churches if it shares 
        common religious bonds and convictions with that church 
        or convention or association of churches.
          (v) If an employee who is included in a church plan 
        separates from the service of a church or a convention 
        or association of churches or an organization, whether 
        a civil law corporation or otherwise, which is exempt 
        from tax under section 501 of the Internal Revenue Code 
        of 1986 and which is controlled by or associated with a 
        church or a convention or association of churches, the 
        church plan shall not fail to meet the requirements of 
        this paragraph merely because the plan--
                  (I) retains the employee's accrued benefit or 
                account for the payment of benefits to the 
                employee or his beneficiaries pursuant to the 
                terms of the plan; or
                  (II) receives contributions on the employee's 
                behalf after the employee's separation from 
                such service, but only for a period of 5 years 
                after such separation, unless the employee is 
                disabled (within the meaning of the disability 
                provisions of the church plan or, if there are 
                no such provisions in the church plan, within 
                the meaning of section 72(m)(7) of the Internal 
                Revenue Code of 1986) at the time of such 
                separation from service.
  (D)(i) If a plan established and maintained for its employees 
(or their beneficiaries) by a church or by a convention or 
association of churches which is exempt from tax under section 
501 of the Internal Revenue Code of 1986 fails to meet one or 
more of the requirements of this paragraph and corrects its 
failure to meet such requirements within the correction period, 
the plan shall be deemed to meet the requirements of this 
paragraph for the year in which the correction was made and for 
all prior years.
  (ii) If a correction is not made within the correction 
period, the plan shall be deemed not to meet the requirements 
of this paragraph beginning with the date on which the earliest 
failure to meet one or more of such requirements occurred.
  (iii) For purposes of this subparagraph, the term 
``correction period'' means--
          (I) the period ending 270 days after the date of 
        mailing by the Secretary of the Treasury of a notice of 
        default with respect to the plan's failure to meet one 
        or more of the requirements of this paragraph; or
          (II) any period set by a court of competent 
        jurisdiction after a final determination that the plan 
        fails to meet such requirements, or, if the court does 
        not specify such period, any reasonable period 
        determined by the Secretary of the Treasury on the 
        basis of all the facts and circumstances, but in any 
        event not less than 270 days after the determination 
        has become final; or
          (III) any additional period which the Secretary of 
        the Treasury determines is reasonable or necessary for 
        the correction of the default,
whichever has the latest ending date.
  (34) The term ``individual account plan'' or ``defined 
contribution plan'' means a pension plan which provides for an 
individual account for each participant and for benefits based 
solely upon the amount contributed to the participant's 
account, and any income, expenses, gains and losses, and any 
forfeitures of accounts of other participants which may be 
allocated to such participant's account.
  (35) The term ``defined benefit plan'' means a pension plan 
other than an individual account plan; except that a pension 
plan which is not an individual account plan and which provides 
a benefit derived from employer contributions which is based 
partly on the balance of the separate account of a 
participant--
          (A) for the purposes of section 202, shall be treated 
        as an individual account plan, and
          (B) for the purposes of paragraph (23) of this 
        section and section 204, shall be treated as an 
        individual account plan to the extent benefits are 
        based upon the separate account of a participant and as 
        a defined benefit plan with respect to the remaining 
        portion of benefits under the plan.
  (36) The term ``excess benefit plan'' means a plan maintained 
by an employer solely for the purpose of providing benefits for 
certain employees in excess of the limitations on contributions 
and benefits imposed by section 415 of the Internal Revenue 
Code of 1986 on plans to which that section applies, without 
regard to whether the plan is funded. To the extent that a 
separable part of a plan (as determined by the Secretary of 
Labor) maintained by an employer is maintained for such 
purpose, that part shall be treated as a separate plan which is 
an excess benefit plan.
  (37)(A) The term ``multiemployer plan'' means a plan--
          (i) to which more than one employer is required to 
        contribute,
          (ii) which is maintained pursuant to one or more 
        collective bargaining agreements between one or more 
        employee organizations and more than one employer, and
          (iii) which satisfies such other requirements as the 
        Secretary may prescribe by regulation.
  (B) For purposes of this paragraph, all trades or businesses 
(whether or not incorporated) which are under common control 
within the meaning of section 4001(b)(1) are considered a 
single employer.
  (C) Notwithstanding subparagraph (A), a plan is a 
multiemployer plan on and after its termination date if the 
plan was a multiemployer plan under this paragraph for the plan 
year preceding its termination date.
  (D) For purposes of this title, notwithstanding the preceding 
provisions of this paragraph, for any plan year which began 
before the date of the enactment of the Multiemployer Pension 
Plan Amendments Act of 1980, the term ``multiemployer plan'' 
means a plan described in section 3(37) of this Act as in 
effect immediately before such date.
  (E) Within one year after the date of the enactment of the 
Multiemployer Pension Plan Amendments Act of 1980, a 
multiemployer plan may irrevocably elect, pursuant to 
procedures established by the corporation and subject to the 
provisions of sections 4403(b) and (c), that the plan shall not 
be treated as a multiemployer plan for all purposes under this 
Act or the Internal Revenue Code of 1954 if for each of the 
last 3 plan years ending prior to the effective date of the 
Multiemployer Pension Plan Amendments Act of 1980--
          (i) the plan was not a multiemployer plan because the 
        plan was not a plan described in section 3(37)(A)(iii) 
        of this Act and section 414(f)(1)(C) of the Internal 
        Revenue Code of 1954 (as such provisions were in effect 
        on the day before the date of the enactment of the 
        Multiemployer Pension Plan Amendments Act of 1980 ); 
        and
          (ii) the plan had been identified as a plan that was 
        not a multiemployer plan in substantially all its 
        filings with the corporation, the Secretary of Labor 
        and the Secretary of the Treasury.
  (F)(i) For purposes of this title a qualified football 
coaches plan--
          (I) shall be treated as a multiemployer plan to the 
        extent not inconsistent with the purposes of this 
        subparagraph; and
          (II) notwithstanding section 401(k)(4)(B) of the 
        Internal Revenue Code of 1986, may include a qualified 
        cash and deferred arrangement.
  (ii) For purposes of this subparagraph, the term ``qualified 
football coaches plan'' means any defined contribution plan 
which is established and maintained by an organization--
          (I) which is described in section 501(c) of such 
        Code;
          (II) the membership of which consists entirely of 
        individuals who primarily coach football as full-time 
        employees of 4-year colleges or universities described 
        in section 170(b)(1)(A)(ii) of such Code; and
          (III) which was in existence on September 18, 1986.
          (G)(i) Within 1 year after the enactment of the 
        Pension Protection Act of 2006--
                  (I) an election under subparagraph (E) may be 
                revoked, pursuant to procedures prescribed by 
                the Pension Benefit Guaranty Corporation, if, 
                for each of the 3 plan years prior to the date 
                of the enactment of that Act, the plan would 
                have been a multiemployer plan but for the 
                election under subparagraph (E), and
                  (II) a plan that meets the criteria in 
                clauses (i) and (ii) of subparagraph (A) of 
                this paragraph or that is described in clause 
                (vi) may, pursuant to procedures prescribed by 
                the Pension Benefit Guaranty Corporation, elect 
                to be a multiemployer plan, if--
                          (aa) for each of the 3 plan years 
                        immediately preceding the first plan 
                        year for which the election under this 
                        paragraph is effective with respect to 
                        the plan, the plan has met those 
                        criteria or is so described,
                          (bb) substantially all of the plan's 
                        employer contributions for each of 
                        those plan years were made or required 
                        to be made by organizations that were 
                        exempt from tax under section 501 of 
                        the Internal Revenue Code of 1986, and
                          (cc) the plan was established prior 
                        to September 2, 1974.
          (ii) An election under this subparagraph shall be 
        effective for all purposes under this Act and under the 
        Internal Revenue Code of 1986, starting with any plan 
        year beginning on or after January 1, 1999, and ending 
        before January 1, 2008, as designated by the plan in 
        the election made under clause (i)(II).
          (iii) Once made, an election under this subparagraph 
        shall be irrevocable, except that a plan described in 
        clause (i)(II) shall cease to be a multiemployer plan 
        as of the plan year beginning immediately after the 
        first plan year for which the majority of its employer 
        contributions were made or required to be made by 
        organizations that were not exempt from tax under 
        section 501 of the Internal Revenue Code of 1986.
          (iv) The fact that a plan makes an election under 
        clause (i)(II) does not imply that the plan was not a 
        multiemployer plan prior to the date of the election or 
        would not be a multiemployer plan without regard to the 
        election.
          (v)(I) No later than 30 days before an election is 
        made under this subparagraph, the plan administrator 
        shall provide notice of the pending election to each 
        plan participant and beneficiary, each labor 
        organization representing such participants or 
        beneficiaries, and each employer that has an obligation 
        to contribute to the plan, describing the principal 
        differences between the guarantee programs under title 
        IV and the benefit restrictions under this title for 
        single employer and multiemployer plans, along with 
        such other information as the plan administrator 
        chooses to include.
          (II) Within 180 days after the date of enactment of 
        the Pension Protection Act of 2006, the Secretary shall 
        prescribe a model notice under this clause.
          (III) A plan administrator's failure to provide the 
        notice required under this subparagraph shall be 
        treated for purposes of section 502(c)(2) as a failure 
        or refusal by the plan administrator to file the annual 
        report required to be filed with the Secretary under 
        section 101(b)(1).
          (vi) A plan is described in this clause if it is a 
        plan sponsored by an organization which is described in 
        section 501(c)(5) of the Internal Revenue Code of 1986 
        and exempt from tax under section 501(a) of such Code 
        and which was established in Chicago, Illinois, on 
        August 12, 1881.
  (vii) For purposes of this Act and the Internal Revenue Code 
of 1986, a plan making an election under this subparagraph 
shall be treated as maintained pursuant to a collective 
bargaining agreement if a collective bargaining agreement, 
expressly or otherwise, provides for or permits employer 
contributions to the plan by one or more employers that are 
signatory to such agreement, or participation in the plan by 
one or more employees of an employer that is signatory to such 
agreement, regardless of whether the plan was created, 
established, or maintained for such employees by virtue of 
another document that is not a collective bargaining agreement.
  (38) The term ``investment manager'' means any fiduciary 
(other than a trustee or named fiduciary, as defined in section 
402(a)(2))--
          (A) who has the power to manage, acquire, or dispose 
        of any asset of a plan;
          (B) who (i) is registered as an investment adviser 
        under the Investment Advisers Act of 1940; (ii) is not 
        registered as an investment adviser under such Act by 
        reason of paragraph (1) of section 203A(a) of such Act, 
        is registered as an investment adviser under the laws 
        of the State (referred to in such paragraph (1)) in 
        which it maintains its principal office and place of 
        business, and, at the time the fiduciary last filed the 
        registration form most recently filed by the fiduciary 
        with such State in order to maintain the fiduciary's 
        registration under the laws of such State, also filed a 
        copy of such form with the Secretary; (iii) is a bank, 
        as defined in that Act; or (iv) is an insurance company 
        qualified to perform services described in subparagraph 
        (A) under the laws of more than one State; and
          (C) has acknowledged in writing that he is a 
        fiduciary with respect to the plan.
  (39) The terms ``plan year'' and ``fiscal year of the plan'' 
mean, with respect to a plan, the calendar, policy, or fiscal 
year on which the records of the plan are kept.
  (40)(A) The term ``multiple employer welfare arrangement'' 
means an employee welfare benefit plan, or any other 
arrangement (other than an employee welfare benefit plan), 
which is established or maintained for the purpose of offering 
or providing any benefit described in paragraph (1) to the 
employees of two or more employers (including one or more self-
employed individuals), or to their beneficiaries, except that 
such term does not include any such plan or other arrangement 
which is established or maintained--
          (i) under or pursuant to one or more agreements which 
        the Secretary finds to be collective bargaining 
        agreements,
          (ii) by a rural electric cooperative, or
          (iii) by a rural telephone cooperative association.
  (B) For purposes of this paragraph--
          (i) two or more trades or businesses, whether or not 
        incorporated, shall be deemed a single employer if such 
        trades or businesses are within the same control group,
          (ii) the term ``control group'' means a group of 
        trades or businesses under common control,
          (iii) the determination of whether a trade or 
        business is under ``common control'' with another trade 
        or business shall be determined under regulations of 
        the Secretary applying principles similar to 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, common 
        control shall not be based on an interest of less than 
        25 percent,
          (iv) the term ``rural electric cooperative'' means--
                  (I) any organization which is exempt from tax 
                under section 501(a) of the Internal Revenue 
                Code of 1986 and which is engaged primarily in 
                providing electric service on a mutual or 
                cooperative basis, and
                  (II) any organization described in paragraph 
                (4) or (6) of section 501(c) of the Internal 
                Revenue Code of 1986 which is exempt from tax 
                under section 501(a) of such Code and at least 
                80 percent of the members of which are 
                organizations described in subclause (I), and
          (v) the term ``rural telephone cooperative 
        association'' means an organization described in 
        paragraph (4) or (6) of section 501(c) of the Internal 
        Revenue Code of 1986 which is exempt from tax under 
        section 501(a) of such Code and at least 80 percent of 
        the members of which are organizations engaged 
        primarily in providing telephone service to rural areas 
        of the United States on a mutual, cooperative, or other 
        basis.
  (41) Single-employer plan.--The term ``single-employer plan'' 
means an employee benefit plan other than a multiemployer plan.
  (42) the term ``plan assets'' means plan assets as defined by 
such regulations as the Secretary may prescribe, except that 
under such regulations the assets of any entity shall not be 
treated as plan assets if, immediately after the most recent 
acquisition of any equity interest in the entity, less than 25 
percent of the total value of each class of equity interest in 
the entity is held by benefit plan investors. For purposes of 
determinations pursuant to this paragraph, the value of any 
equity interest held by a person (other than such a benefit 
plan investor) who has discretionary authority or control with 
respect to the assets of the entity or any person who provides 
investment advice for a fee (direct or indirect) with respect 
to such assets, or any affiliate of such a person, shall be 
disregarded for purposes of calculating the 25 percent 
threshold. An entity shall be considered to hold plan assets 
only to the extent of the percentage of the equity interest 
held by benefit plan investors. For purposes of this paragraph, 
the term ``benefit plan investor'' means an employee benefit 
plan subject to part 4, any plan to which section 4975 of the 
Internal Revenue Code of 1986 applies, and any entity whose 
underlying assets include plan assets by reason of a plan's 
investment in such entity.
          (43) Pooled employer plan.--
                  (A) In general.--The term ``pooled employer 
                plan'' means a plan--
                          (i) which is an individual account 
                        plan established or maintained for the 
                        purpose of providing benefits to the 
                        employees of 2 or more employers;
                          (ii) which is a plan described in 
                        section 401(a) of the Internal Revenue 
                        Code of 1986 which includes a trust 
                        exempt from tax under section 501(a) of 
                        such Code, a plan that consists of 
                        annuity contracts described in section 
                        403(b) of such Code, or a plan that 
                        consists of individual retirement 
                        accounts described in section 408 of 
                        such Code (including by reason of 
                        subsection (c) thereof); and
                          (iii) the terms of which meet the 
                        requirements of subparagraph (B).
                Such term shall not include a plan maintained 
                by employers which have a common interest other 
                than having adopted the plan, but such term 
                shall include any plan (other than a plan 
                excepted from the application of this title by 
                section 4(b)(2)) maintained for the benefit of 
                the employees of more than 1 employer that 
                consists of annuity contracts described in 
                section 403(b) of such Code and that meets the 
                requirements of subparagraph (B) of section 
                413(e)(1) of such Code.
                  (B) Requirements for plan terms.--The 
                requirements of this subparagraph are met with 
                respect to any plan if the terms of the plan--
                          (i) designate a pooled plan provider 
                        and provide that the pooled plan 
                        provider is a named fiduciary of the 
                        plan;
                          (ii) designate a named fiduciary 
                        (other than an employer in the plan) to 
                        be responsible for collecting 
                        contributions to the plan and require 
                        such fiduciary to implement written 
                        contribution collection procedures that 
                        are reasonable, diligent, and 
                        systematic;
                          (iii) provide that each employer in 
                        the plan retains fiduciary 
                        responsibility for--
                                  (I) the selection and 
                                monitoring in accordance with 
                                section 404(a) of the person 
                                designated as the pooled plan 
                                provider and any other person 
                                who, in addition to the pooled 
                                plan provider, is designated as 
                                a named fiduciary of the plan; 
                                and
                                  (II) to the extent not 
                                otherwise delegated to another 
                                fiduciary by the pooled plan 
                                provider and subject to the 
                                provisions of section 404(c), 
                                the investment and management 
                                of the portion of the plan's 
                                assets attributable to the 
                                employees of the employer (or 
                                beneficiaries of such 
                                employees);
                          (iv) provide that employers in the 
                        plan, and participants and 
                        beneficiaries, are not subject to 
                        unreasonable restrictions, fees, or 
                        penalties with regard to ceasing 
                        participation, receipt of 
                        distributions, or otherwise 
                        transferring assets of the plan in 
                        accordance with section 208 or 
                        paragraph (44)(C)(i)(II);
                          (v) require--
                                  (I) the pooled plan provider 
                                to provide to employers in the 
                                plan any disclosures or other 
                                information which the Secretary 
                                may require, including any 
                                disclosures or other 
                                information to facilitate the 
                                selection or any monitoring of 
                                the pooled plan provider by 
                                employers in the plan; and
                                  (II) each employer in the 
                                plan to take such actions as 
                                the Secretary or the pooled 
                                plan provider determines are 
                                necessary to administer the 
                                plan or for the plan to meet 
                                any requirement applicable 
                                under this Act or the Internal 
                                Revenue Code of 1986 to a plan 
                                described in section 401(a) of 
                                such Code, a plan that consists 
                                of annuity contracts described 
                                in section 403(b) of such Code, 
                                or to a plan that consists of 
                                individual retirement accounts 
                                described in section 408 of 
                                such Code (including by reason 
                                of subsection (c) thereof), 
                                whichever is applicable, 
                                including providing any 
                                disclosures or other 
                                information which the Secretary 
                                may require or which the pooled 
                                plan provider otherwise 
                                determines are necessary to 
                                administer the plan or to allow 
                                the plan to meet such 
                                requirements; and
                          (vi) provide that any disclosure or 
                        other information required to be 
                        provided under clause (v) may be 
                        provided in electronic form and will be 
                        designed to ensure only reasonable 
                        costs are imposed on pooled plan 
                        providers and employers in the plan.
                  (C) Exceptions.--The term ``pooled employer 
                plan'' does not include--
                          (i) a multiemployer plan; or
                          (ii) a plan established before the 
                        date of the enactment of the Setting 
                        Every Community Up for Retirement 
                        Enhancement Act of 2019 unless the plan 
                        administrator elects that the plan will 
                        be treated as a pooled employer plan 
                        and the plan meets the requirements of 
                        this title applicable to a pooled 
                        employer plan established on or after 
                        such date.
                  (D) Treatment of employers as plan 
                sponsors.--Except with respect to the 
                administrative duties of the pooled plan 
                provider described in paragraph (44)(A)(i), 
                each employer in a pooled employer plan shall 
                be treated as the plan sponsor with respect to 
                the portion of the plan attributable to 
                employees of such employer (or beneficiaries of 
                such employees).
          (44) Pooled plan provider.--
                  (A) In general.--The term ``pooled plan 
                provider'' means a person who--
                          (i) is designated by the terms of a 
                        pooled employer plan as a named 
                        fiduciary, as the plan administrator, 
                        and as the person responsible for the 
                        performance of all administrative 
                        duties (including conducting proper 
                        testing with respect to the plan and 
                        the employees of each employer in the 
                        plan) which are reasonably necessary to 
                        ensure that--
                                  (I) the plan meets any 
                                requirement applicable under 
                                this Act or the Internal 
                                Revenue Code of 1986 to a plan 
                                described in section 401(a) of 
                                such Code, a plan that consists 
                                of annuity contracts described 
                                in section 403(b) of such Code, 
                                or to a plan that consists of 
                                individual retirement accounts 
                                described in section 408 of 
                                such Code (including by reason 
                                of subsection (c) thereof), 
                                whichever is applicable; and
                                  (II) each employer in the 
                                plan takes such actions as the 
                                Secretary or pooled plan 
                                provider determines are 
                                necessary for the plan to meet 
                                the requirements described in 
                                subclause (I), including 
                                providing the disclosures and 
                                information described in 
                                paragraph (43)(B)(v)(II);
                          (ii) registers as a pooled plan 
                        provider with the Secretary, and 
                        provides to the Secretary such other 
                        information as the Secretary may 
                        require, before beginning operations as 
                        a pooled plan provider;
                          (iii) acknowledges in writing that 
                        such person is a named fiduciary, and 
                        the plan administrator, with respect to 
                        the pooled employer plan; and
                          (iv) is responsible for ensuring that 
                        all persons who handle assets of, or 
                        who are fiduciaries of, the pooled 
                        employer plan are bonded in accordance 
                        with section 412.
                  (B) Audits, examinations and 
                investigations.--The Secretary may perform 
                audits, examinations, and investigations of 
                pooled plan providers as may be necessary to 
                enforce and carry out the purposes of this 
                paragraph and paragraph (43).
                  (C) Guidance.--The Secretary shall issue such 
                guidance as the Secretary determines 
                appropriate to carry out this paragraph and 
                paragraph (43), including guidance--
                          (i) to identify the administrative 
                        duties and other actions required to be 
                        performed by a pooled plan provider 
                        under either such paragraph; and
                          (ii) which requires in appropriate 
                        cases that if an employer in the plan 
                        fails to take the actions required 
                        under subparagraph (A)(i)(II)--
                                  (I) the assets of the plan 
                                attributable to employees of 
                                such employer (or beneficiaries 
                                of such employees) are 
                                transferred to a plan 
                                maintained only by such 
                                employer (or its successor), to 
                                an eligible retirement plan as 
                                defined in section 402(c)(8)(B) 
                                of the Internal Revenue Code of 
                                1986 for each individual whose 
                                account is transferred, or to 
                                any other arrangement that the 
                                Secretary determines is 
                                appropriate in such guidance; 
                                and
                                  (II) such employer (and not 
                                the plan with respect to which 
                                the failure occurred or any 
                                other employer in such plan) 
                                shall, except to the extent 
                                provided in such guidance, be 
                                liable for any liabilities with 
                                respect to such plan 
                                attributable to employees of 
                                such employer (or beneficiaries 
                                of such employees).
                        The Secretary shall take into account 
                        under clause (ii) whether the failure 
                        of an employer or pooled plan provider 
                        to provide any disclosures or other 
                        information, or to take any other 
                        action, necessary to administer a plan 
                        or to allow a plan to meet requirements 
                        described in subparagraph (A)(i)(II) 
                        has continued over a period of time 
                        that demonstrates a lack of commitment 
                        to compliance. The Secretary may waive 
                        the requirements of subclause (ii)(I) 
                        in appropriate circumstances if the 
                        Secretary determines it is in the best 
                        interests of the employees of the 
                        employer referred to in such clause 
                        (and the beneficiaries of such 
                        employees) to retain the assets in the 
                        plan with respect to which the 
                        employer's failure occurred.
                  (D) Good faith compliance with law before 
                guidance.--An employer or pooled plan provider 
                shall not be treated as failing to meet a 
                requirement of guidance issued by the Secretary 
                under subparagraph (C) if, before the issuance 
                of such guidance, the employer or pooled plan 
                provider complies in good faith with a 
                reasonable interpretation of the provisions of 
                this paragraph, or paragraph (43), to which 
                such guidance relates.
                  (E) Aggregation rules.--For purposes of this 
                paragraph, in determining whether a person 
                meets the requirements of this paragraph to be 
                a pooled plan provider with respect to any 
                plan, all persons who perform services for the 
                plan and who are treated as a single employer 
                under subsection (b), (c), (m), or (o) of 
                section 414 of the Internal Revenue Code of 
                1986 shall be treated as one person.
          (45) Pension-linked emergency savings account.--The 
        term ``pension-linked emergency savings account'' means 
        a short-term savings account established and maintained 
        as part of an individual account plan, in accordance 
        with section 801, on behalf of an eligible participant 
        (as such term is defined in section 801(b)) that--
                  (A) is a designated Roth account (within the 
                meaning of section 402A of the Internal Revenue 
                Code of 1986) and accepts only participant 
                contributions, as described in section 
                801(d)(1)(A), which are designated Roth 
                contributions subject to the rules of section 
                402A(e) of such Code; and
                  (B) meets the requirements of part 8 of 
                subtitle B.

           *       *       *       *       *       *       *


Subtitle B--Regulatory Provisions

           *       *       *       *       *       *       *


Part 7--Group Health Plan Requirements

           *       *       *       *       *       *       *


Subpart C--General Provisions

           *       *       *       *       *       *       *


SEC. 736. RULES APPLICABLE TO GROUP HEALTH PLANS ESTABLISHED AND 
                    MAINTAINED BY A GROUP OR ASSOCIATION OF EMPLOYERS.

  (a) Premium Rates for a Group or Association of Employers.--
          (1)(A) In the case of a group health plan established 
        and maintained by a group or association of employers 
        described in section 3(5)(B), such plan may--
                  (i) establish base premium rates formed on an 
                actuarially sound, modified community rating 
                methodology that considers the pooling of all 
                plan participant claims; and
                  (ii) utilize the specific risk profile of 
                each employer member of such group or 
                association to determine contribution rates for 
                each such employer member's share of a premium 
                by actuarially adjusting above or below the 
                established base premium rates.
          (B) For purposes of paragraph (1), the term 
        ``employer member'' means--
                  (i) an employer who is a member of such group 
                or association of employers and employs at 
                least 1 common law employee; or
                  (ii) a group made up solely of self-employed 
                individuals, within which all of the self-
                employed individual members of such group or 
                association are aggregated together as a single 
                employer member group, provided the group 
                includes at least 20 self-employed individual 
                members.
          (2) In the event a group or association is made up 
        solely of self-employed individuals (and no employers 
        with at least 1 common law employee are members of such 
        group or association), the group health plan 
        established by such group or association shall--
                  (A) treat all self-employed individuals who 
                are members of such group or association as a 
                single risk pool;
                  (B) pool all plan participant claims; and
                  (C) charge each plan participant the same 
                premium rate.
  (b) Discrimination and Pre-existing Condition Protections.--A 
group health plan established and maintained by a group or 
association of employers described in section 3(5)(B) shall be 
prohibited from--
          (1) establishing any rule for eligibility (including 
        continued eligibility) of any individual (including an 
        employee of an employer member or a self-employed 
        individual, or a dependent of such employee or self-
        employed individual) to enroll for benefits under the 
        terms of the plan that discriminates based on any 
        health status-related factor that relates to such 
        individual (consistent with the rules under section 
        702(a)(1));
          (2) requiring an individual (including an employee of 
        an employer member or a self-employed individual, or a 
        dependent of such employee or self-employed 
        individual), as a condition of enrollment or continued 
        enrollment under the plan, to pay a premium or 
        contribution that is greater than the premium or 
        contribution for a similarly situated individual 
        enrolled in the plan based on any health status-related 
        factor that relates to such individual (consistent with 
        the rules under section 702(b)(1)); and
          (3) denying coverage under such plan on the basis of 
        a pre-existing condition (consistent with the rules 
        under section 2704 of the Public Health Service Act).

           *       *       *       *       *       *       *


                             MINORITY VIEWS

                              Introduction

    Committee Democrats oppose H.R. 2868, the Association 
Health Plans Act. This misguided legislation would put 
comprehensive and affordable coverage for small businesses and 
workers at risk, create loopholes that undermine critical 
consumer protections, and raise costs across the broader health 
insurance market.
    Before the Affordable Care Act (ACA),\1\ workers often had 
limited options for obtaining affordable health coverage.\2\ 
People with preexisting conditions were particularly 
disadvantaged, because they could be charged higher rates or 
denied coverage altogether in the individual market. Small 
businesses employing women or workers with chronic or high-cost 
illnesses could be charged higher premiums, often making 
coverage unaffordable. Those who could afford to buy coverage 
in the individual and small group market often found their 
insurance did not cover vital services, such as behavioral 
health or maternity care.\3\
---------------------------------------------------------------------------
    \1\Pub. L. No. 111-148 (2010).
    \2\Sara R. Collins et al., How the Affordable Care Act Has Improved 
Americans' Ability to Buy Health Insurance on Their Own, Commonwealth 
Fund (Feb. 1, 2017), https://www.commonwealthfund.org/publications/
issue-briefs/2017/feb/how-affordable-care-act-has-improved-americans-
ability-buy.
    \3\Center on Budget and Policy Priorities, Essential Health 
Benefits Under Threat, https://www.cbpp.org/essential-health-benefits-
under-threat (last visited June 8, 2023).
---------------------------------------------------------------------------
    The ACA took steps to level the playing field--establishing 
safeguards for workers and employers alike. The ACA created 
Marketplaces where individuals, self-employed people, and 
families can access affordable health coverage, and the law has 
also protected workers and businesses in the small group market 
from unfair practices.\4\ Consumers have benefited from these 
protections for over a decade despite dozens of attempts to 
undermine this progress through Republican votes to repeal the 
ACA in Congress\5\ and ideologically-driven litigation--most 
recently through a lawsuit attacking coverage for lifesaving 
preventive health services such as lung cancer screenings, 
preexposure prophylaxis for HIV prevention, and medications to 
lower the risk of breast cancer for high-risk women.\6\
---------------------------------------------------------------------------
    \4\Nicole Rapfogel et al., 10 Ways the ACA Has Improved Health Care 
in the Past Decade, Center for American Progress (Mar. 23, 2020), 
https://www.americanprogress.org/article/10-ways-aca-improved-health-
care-past-decade/.
    \5\Chris Riotta, GOP Aims To Kill Bazaar Yet Again After Failing 70 
Times, Newsweek (July 29, 2017), http://www/gop-health-care-bill-
repeal-and-replace-70-failed-attempts-643832.
    \6\Laurie Sob el et al., Explaining Litigation Challenging the 
ACA's Preventive Services Requirements: Braid wood Management Inc. v. 
Becker, Kaiser Family Foundation (May 15, 2023), http://www/omens-
health-policy/issue-brief/explaining-litigation-challenging-the-acas-
preventive-services-requirements-braidwood-management/.
---------------------------------------------------------------------------
    In addition to instituting crucial consumer protections, 
the ACA has led to historic improvements in the number of 
people with health coverage. In 2022, the uninsured rate fell 
to 8 percent--the lowest level in history.\7\ During the 117th 
Congress, Democrats took bold action to build upon this 
progress and further improve affordability. The American Rescue 
Plan Act (ARPA)\8\ and the Inflation Reduction Act (IRA)\9\ 
strengthened the advance premium tax credits and eliminated the 
subsidy ``cliff'' for individuals earning over 400 percent of 
the Federal Poverty Level through 2025. Thanks to these 
reforms, during the most recent Open Enrollment Period, a 
record 16.3 million people signed up for coverage through 
Healthcare and State-Based Marketplaces, and the average 
consumer saved $800 per year in premiums.\10\
---------------------------------------------------------------------------
    \7\Aiden Lee et al., National Uninsured Rate Reaches All-Time Low 
in Early 2022, Assistant Secretary for Planning and Evaluation, U.S. 
Dept. of Health and Human Services (Aug. 2022), http://ape/sites/
default/files/documents/15c1f9899b3f203887deba90e3005f5a/Uninsured-Q1-
2022-Data-Point-HP 2022 23 08.pdf.
    \8\Pub. L. No. 117-2 (2021).
    \9\Pub. L. No. 117-169 (2022).
    \10\Centers for Medicare & Medicaid Services, Biden-Harris 
Administration Announces Record-Breaking 16.3 Million People Signed Up 
for Health Care Coverage in ACA Marketplaces During 2022-2023 Open 
Enrollment Season (Jan. 25, 2023), http://www/about/news/2023/01/25/
maidenhair-breaking-16-3-million-people-signed-up-health-care-coverage-
aca-marketplaces-during-2022 2023-open-enrollment-season.html.
---------------------------------------------------------------------------
    While health care costs for many workers and businesses 
remain a challenge, association health plans (Apes) are not the 
answer. Apes are arrangements sponsored by small employer 
groups or individuals to provide health insurance to their 
members outside the traditional small group and individual 
market. Expanding these arrangements, as proposed under H.R. 
2868, threatens to harm workers and small businesses by making 
coverage more expensive for many and entirely out of reach for 
some. In the April 26, 2023, hearing held by the Subcommittee 
on Health, Employment, Labor, and Pensions titled Reducing 
Health Care Costs for Working Americans and Their Families, 
Sabrina Corvette, Research Professor and Co-Director of the 
Center on Health Insurance Reforms at Georgetown University's 
McCourt School of Public Policy, warned of the consequences of 
AHPs, stating that ``AHPs just create new winners and losers, 
with the losers being those who are older and sicker.''\11\ 
This is why more than 30 leading consumer and patient groups 
have expressed serious concerns with H.R. 2868\12\ and why 
Committee Democrats unanimously reject this harmful 
legislation.
---------------------------------------------------------------------------
    \11\Reducing Health Care Costs for Working Americans and Their 
Families: Hearing Before the Subcomm. on Health, Empl., Lab., and 
Pensions of the H. Comm. On Educ. & the Workforce, 118th Cong. 10 
(2023) (testimony of Sabrina Corlette, Research Professor and Co-
Director, Center on Health Insurance Reforms at the Georgetown 
University McCourt School of Public Policy).
    \12\Patient community concerns about the detrimental impact of 
policies included in HR 2868, the Association Health Plans Act; HR 824, 
the Telehealth Benefit Expansion for Workers Act; and HR 2813, the 
Self-Insurance Protection Act, Letter to Chair Virginia Foxx and 
Ranking Member Bobby Scott, H. Comm. on Educ. & the Workforce, Full 
Committee Markup (June 6, 2023) (on file with author).
---------------------------------------------------------------------------

             H.R. 2868 Recycles Failed Republican Policies

    Under current law, coverage offered through a group or 
association to individuals or small employers must generally 
comply with the patient protections of the ACA and state 
insurance law.\13\ However, Republicans have long sought 
legislative and regulatory changes that eliminate guardrails 
that protect consumers, portraying such proposals as extending 
affordable health insurance options to small businesses. By 
radically expanding the circumstances in which AHPs can provide 
coverage to small employers and individuals without complying 
with critical safeguards, H.R. 2868 recycles this harmful idea.
---------------------------------------------------------------------------
    \13\29 U.S.C. Sec. 1144(b)(6); Centers for Medicare and Medicaid 
Services, Application of Individual and Group Market Requirements under 
Title XXVII of the Public Health Service Act when Insurance Coverage Is 
Sold to, or through, Associations (Sept. 1, 2011), https://www.cms.gov/
CCIIO/Resources/Files/Downloads/association_9coverage_9_1_2011.pdf.
---------------------------------------------------------------------------
    Expansion of AHPs has been central to the Republican health 
care agenda for decades, most recently in Republican attempts 
to repeal the ACA.\14\ In 2017, the Committee marked up H.R. 
1101, the Small Business Health Fairness Act, which would have 
expanded AHPs in a manner that would undermine important 
consumer protections. At the time, Committee Republicans 
described this legislation as a key component of their plan for 
``repealing and replacing Obamacare in the 115th 
Congress.''\15\ These partisan repeal efforts were rejected in 
the Senate and the ACA remains the law of the land.
---------------------------------------------------------------------------
    \14\See, e.g., H.R. 1136, Affordable Health Care Act of 1999 (106th 
Congress); H.R. 1101, Small Business Health Fairness Act of 2017 (115th 
Congress).
    \15\H. Rep. 115-43 at 24 (2017).
---------------------------------------------------------------------------
    Since Republicans failed to enact their AHP proposals 
legislatively, in 2018, the Trump Administration attempted to 
do so through executive action by proposing and finalizing a 
rule\16\ to expand AHPs under the Employee Retirement Income 
Security Act of 1974 (ERISA).\17\ This rule would have 
dramatically expanded the circumstances under which AHPs could 
be offered as single-employer group health plans--even to self-
employed individuals without any common law employees. However, 
on March 28, 2019, in State of New York v. United States 
Department of Labor, Judge John D. Bates, an appointee of 
President George W. Bush, struck down the core provisions of 
the final rule, describing it as ``an end-run around the 
ACA''\18\ that ``does violence to ERISA.''\19\ Accordingly, the 
court vacated and remanded the remaining provisions of the 
final rule to the Department of Labor for reconsideration.\20\
---------------------------------------------------------------------------
    \16\U.S. Dep't of Lab., Final Rule: Definition of ``Employer'' 
Under Section 3(5) of ERISA Association Health Plans, 83 Fed. Reg. 
28912 (June 21, 2018), https://www.federalregister.gov/documents/2018/
06/21/2018-12992/definition-of-employer-under-section-35-of-erisa-
association-health
-plans.
    \17\Pub. L. No. 93-406 (1974).
    \18\New York v. United States Dep't of Lab., 363 F. Supp. 3d 109, 
117 (D.D.C. 2019).
    \19\Id.
    \20\Id. at 141. Note that the ruling was appealed to the United 
States Court of Appeals for the District of Columbia Circuit but has 
been on hold since February 8, 2021, while ``[t]he matter remains under 
consideration by the Department.'' Status Report at 1, New York v. 
United States Dep't of Lab., Case No. 19-5125 (D.C. Cir. Aug. 2022). 
Democrats have since encouraged the Department to act to protect 
consumers from harm. On Feb. 13, 2023, Ranking Member Scott and HELP 
Subcommittee Ranking Member DeSaulnier wrote to the Assistant Secretary 
for the Employee Benefits Security Administration to express support 
for the agency's proposed rulemaking to rescind the Trump 
Administration's AHP final rule. See Letter from Ranking Member Bobby 
Scott and Ranking Member Mark DeSaulnier to the Assistant Secretary of 
Labor Lisa M. Gomez (Feb. 13, 2023), https://democrats-
edworkforce.house.gov/imo/media/doc/rm_ scott_letter_ to_ebsa_ on_ 
trump-era_association_ health_ plan_rule.pdf.
---------------------------------------------------------------------------
    Having failed time and again in their efforts to expand 
AHPs, Committee Republicans have now put forward H.R. 2868 in 
yet another attempt to achieve this goal. Under this 
legislation, ERISA's standards would be eroded such that sole 
proprietors with no common law employees would be considered 
``employers,'' and AHP arrangements would be able to evade many 
of the consumer protections that would otherwise apply to the 
individual or small group market. In addition, the bill would 
treat AHPs as ERISA-covered group health plans exempt from 
state law, thereby circumventing the authority of state 
insurance regulators.

  H.R. 2868 Creates Market Fragmentation and Raises Health Care Costs

    Under the ACA, health insurance sold through an association 
to individuals and small employers generally must meet the same 
standards that apply to coverage sold in the individual and 
small group market.\21\ However, by allowing small employers 
and individuals to instead be subject to requirements 
applicable to large employers, H.R. 2868 unravels these 
protections and allows association health plans to operate 
under different rules.
---------------------------------------------------------------------------
    \21\Centers for Medicare & Medicaid Services, supra note 13 (2011).
---------------------------------------------------------------------------
    Experts have consistently warned that this approach--which 
is antithetical to the foundational principles of the ACA that 
ensure no one gets left behind--would fragment the health 
insurance market. According to the American Academy of 
Actuaries, allowing AHPs to operate under different rules could 
result in adverse selection that raises costs throughout the 
insurance pool and creates a market in which higher-cost 
groups--namely, those that are generally sicker or older--
``could find it more difficult to obtain coverage.''\22\ 
Similarly, in its assessment of the Trump Administration's 
final rule on AHPs, the Congressional Budget Office determined 
that ``the primary factor driving lower premiums for AHPs is 
the ability to price premiums on the basis of each 
association's expected health care spending and thereby attract 
employers with relatively low-risk employees and avoid those 
with higher-risk employees.''\23\
---------------------------------------------------------------------------
    \22\American Academy of Actuaries, Issue Brief: Association Health 
Plans (Feb. 2017), http://www.actuary.org/content/association- health-
plans-0.
    \23\Cong. Budget Office, How CBO and JCT Analyzed Coverage Effects 
of New Rules for Association Health Plans and Short-Term Plans 5 (Jan. 
2019), https://www.cbo.gov/system/files/2019 01/54915-New_Rules_ 
for_AHPs_STPs.pdf.
---------------------------------------------------------------------------

         H.R. 2868 Threatens Comprehensive, Affordable Coverage

    Under H.R. 2868, AHPs could evade state and federal benefit 
standards and consumer protections, threatening the quality of 
coverage provided to their own enrollees. As a result, 
enrollees run the risk of--potentially unknowingly--losing out 
on comprehensive care that would otherwise be guaranteed under 
the ACA and state law. While the bill applies some superficial 
consumer protections to AHPs (e.g., nominal protections against 
discrimination based on preexisting conditions), it creates 
other large loopholes that leave consumers vulnerable.
    Disturbingly, this legislation explicitly authorizes AHPs 
to set premiums based on the ``specific risk profile'' of 
employer members, enabling AHPs to charge higher premiums to 
groups based on their age, gender, or other factors. Moreover, 
even if premiums are not set directly on health-related factors 
by an association, under this bill, premiums could take into 
account numerous other factors that raise costs for people who 
are older or have preexisting conditions.\24\ As a result, this 
bill would all but invite AHPs to charge workers with more 
expensive health needs far higher premiums--if those workers 
could even afford to participate in the associations at all.
---------------------------------------------------------------------------
    \24\See Sarah Lueck, Association Health Plan Expansion Likely to 
Hurt Consumers, State Insurance Markets, Cen. on Budg. & Poli. 
Priorities (Mar. 7, 2019), https://www.cbpp.org/research/health/
association-health-plan-expansion-likely-to-hurt-consumers-state-
insurance-markets.
---------------------------------------------------------------------------
    Allowing insurers and health plans to avoid covering needed 
benefits is a longstanding tenet of Republicans' approach to 
health care.\25\ H.R. 2868 is no different. Despite coverage of 
essential health benefits being both popular and necessary,\26\ 
under the legislation, AHPs would be exempt from this 
foundational protection of the ACA. As a result, AHPs could 
exclude certain categories of coverage, such as maternity care, 
mental health, or substance use disorder, to dissuade certain 
groups or individuals from enrolling. Reducing benefit levels 
or avoiding the costs of providing comprehensive benefits can 
reduce costs in the short-term but will ultimately negatively 
impact consumers and people who need coverage the most. 
Individuals enrolled in AHPs could be shocked to find they do 
not have access to the care they need or the financial security 
they expected.
---------------------------------------------------------------------------
    \25\See e.g., Lydia Mitts et al., House Republicans Gut Protections 
for Pre-Existing Conditions in Latest Proposal, Families USA (Mar. 26, 
2017), https://familiesusa.org/ resources/house-republicans-gut-
protections-for-pre-existing-conditions-in- latest-proposal/.
    \26\Dania Palanker, Eliminating Essential Health Benefits Will 
Shift Financial Risk Back to Consumers, The Commonwealth Fund (Mar. 24, 
2017), https://www.commonwealthfund.org/ 
blog/2017/eliminating-essential-health-benefits-will-shift-financial-
risk-back-consumers.
---------------------------------------------------------------------------

 H.R. 2868 Gambles With the Financial Security of Workers, Employers, 
                             and Providers

    H.R. 2868 allows AHPs to evade state regulations that 
prevent fraud and mismanagement. This is profoundly dangerous 
for consumers and employers who participate in these 
arrangements, as well as the doctors, health centers, and 
hospitals who may not receive reimbursement for the medical 
care they provide. Ms. Corlette explained the high stakes at 
the HELP Subcommittee hearing:

          [I]f history is any guide, many AHPs may seem strong 
        at first because they are able to attract healthy 
        groups and can offer low rates and generous benefits to 
        those groups. Over time, however, as workers get older 
        and sicker, the risk in the pool deteriorates. AHPs 
        then either must raise rates, reduce benefits, disband, 
        or, in the worst cases, become insolvent.\27\
---------------------------------------------------------------------------
    \27\Corlette, supra note 11 at 10.

    The history of multiple employer welfare arrangements 
(MEWAs) offers a sobering warning for the financial risks posed 
by the proliferation of AHPs. H.R. 2868 allows AHPs to form 
under limited regulation and oversight, hearkening back to the 
time when MEWAs also enjoyed limited regulation and gambled 
with the financial security of both workers and employers.\28\ 
In 2001, Sunkist Growers, Inc., a California-based MEWA that 
covered 23,000 people, became insolvent, leaving behind 
approximately $11 million in unpaid claims.\29\ Similarly, New 
Jersey's Coalition of Automotive Retailers became insolvent in 
2002, leaving 20,000 individuals without coverage and $15 
million in unpaid claims.\30\
---------------------------------------------------------------------------
    \28\ U.S. Dept. of Lab., MEWAs Multiple Employer Welfare 
Arrangements under the Employee Retirement Income Security Act (ERISA): 
A Guide to Federal and State Regulation at 3 (``Recognizing that it was 
both appropriate and necessary for States to be able to establish, 
apply and enforce State insurance laws with respect to MEWAs, the U.S. 
Congress amended ERISA in 1983, as part of Public Law 97-473, to 
provide an exception to ERISA's broad preemption provisions for the 
regulation of MEWAs under State insurance laws.'').
    \29\ Mila Kofman, et al., MEWAs: The Threat of Plan Insolvency and 
Other Challenges, Commonwealth Fund (Mar. 2004), https://
www.commonwealthfund.org/sites/default/files /documents/
_media_files_publications_issue_brief_2004_mar_mewas_the_threat_of_plan_
insolvency_and_ 
other_challenges_kofman_mewas_pdf.pdf.
    \30\Id.
---------------------------------------------------------------------------
    Unfortunately, MEWAs continue to face financial challenges 
and heightened risk of fraud to this day. The Department of 
Labor routinely documents investigations and enforcement 
actions against MEWAs that have committed violations of ERISA 
and failed to pay promised benefits.\31\ Just last month, it 
was announced that health plan participants, employers, and 
medical providers harmed by a MEWA operating in 36 states would 
begin to finally receive payments related to more than $54 
million in unpaid health claims.\32\ Unfortunately, despite 
these enforcement efforts, victims are often not made whole, 
leaving workers, employers, and health care providers to absorb 
financial losses caused by fraudulent and mismanaged MEWAs.\33\ 
By expanding AHPs and undermining states' ability to regulate 
these arrangements, H.R. 2868 would dramatically worsen this 
already serious problem.
---------------------------------------------------------------------------
    \31\Christine Monahan, Updates from the MEWA Files: The Good, the 
Bad, and the Ugly of Federal Enforcement Efforts, CHIRblog (Dec. 19, 
2019), https://chirblog.org/mewa-files-part-3-good-bad-ugly/.
    \32\Press Release, U.S. Dep't of Labor, Federal Court Approves Plan 
To Distribute Assets to Participants Harmed by Underfunded Group Health 
Plan Arrangement Operating in 36 States (May 1, 2023), https://
www.dol.gov/newsroom/releases/ ebsa/ebsa20230501.
    \33\Monahan, supra note 29.
---------------------------------------------------------------------------

        Democratic Amendments Offered During Markup of H.R. 2868

    Committee Democrats put forward four amendments to improve 
the bill. These amendments would have ensured that AHPs would 
have to cover benefits provided by plans in the ACA-compliant 
small group and individual market and would have protected 
consumers from other potential harms that could result from 
enactment of this legislation.
    Committee Republicans rejected all four of the Democratic 
amendments that were considered.

------------------------------------------------------------------------
  Amendment        Offered By          Description        Action Taken
------------------------------------------------------------------------
#2..........  Ms. Jayapal........  To require          Defeated
                                    association
                                    health plans to
                                    cover maternity
                                    and newborn care.
#3..........  Mr. Scott..........  To provide that     Defeated
                                    the bill will not
                                    take effect if it
                                    will raise
                                    premiums for
                                    people with
                                    preexisting
                                    conditions.
#4..........  Mr. Norcross.......  To require          Defeated
                                    association
                                    health plans to
                                    cover mental
                                    health and
                                    substance use
                                    disorder.
#5..........  Mrs. Hayes.........  To provide that     Defeated
                                    the bill will not
                                    take effect if it
                                    will raise
                                    premiums for
                                    older workers.
------------------------------------------------------------------------

                               Conclusion

    H.R. 2868, the Association Health Plans Act, would erode 
the protections in the ACA and leave small businesses and their 
workers vulnerable to unaffordable health coverage and fewer 
benefits. The expansion of AHPs will threaten affordable 
coverage for those outside of the associations while failing to 
provide comprehensive, reliable coverage to their own 
enrollees. This misguided legislation is simply a recycled 
attack on affordable health care and yet another effort to roll 
back the historic progress made under the ACA.
    For the reasons stated above, Committee Democrats 
unanimously opposed H.R. 2868 when the Committee on Education 
and the Workforce considered it on June 6, 2023. We urge the 
House of Representatives to do the same.

                                   Robert C. ``Bobby'' Scott,
                                           Ranking Member.
                                   Joe Courtney.
                                   Mark Takano.
                                   Mark DeSaulnier.
                                   Pramila Jayapal.
                                   Lucy McBath.
                                   Raul M. Grijalva.
                                   Gregorio Kilili Camacho Sablan.
                                   Suzanne Bonamici.
                                   Alma S. Adams.
                                   Susan Wild.
                                   Jahana Hayes.
                                   Teresa Leger Fernandez.
                                   Frank J. Mrvan.
                                   Haley M. Stevens.
                                   Jamaal Bowman.