Patients' Health Care Reform Act - Amends the Public Health Service Act to provide for the establishment and governance of : (1) HealthMarts, which are nonprofit organizations that offer health benefits coverage to employers, employees, and individuals through contracts with health insurance issuers; and (2) individual membership associations (IMAs), which are organizations that offer health benefits coverage to members through health insurance issuer contracts.
Requires the Secretary of Heath and Human Services to pay 50 percent of a state's costs to provide health benefits coverage under a high-risk pool, a reinsurance pool, or other risk-adjustment mechanisms used to subsidize the purchase of private health insurance.
Small Business Health Fairness Act of 2005 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to provide for establishment and governance of association health plans, which are group health plans whose sponsors are trade, industry, professional, chamber of commerce, or similar business associations and which meet certain ERISA certification requirements.
Amends the Internal Revenue Code to provide individuals with a tax credit for payments for qualified health insurance and allows the Secretary to make advance payments of the credit to providers. Excludes from gross income any compensating coverage payment made by an employer to an employee who elects not to participate in the employer's subsidized health plan.
Requires health insurance issuers offering coverage in connection with a group health plan to provide certain information to the administrator of the plan, including information regarding: (1) plan benefits and exclusions; (2) a participant's financial responsibilities; and (3) legal recourse options for participants and beneficiaries.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2203 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 2203
To amend the Internal Revenue Code of 1986 to allow individuals a
refundable and advancable credit against income tax for health
insurance costs, to allow employees who elect not to participate in
employer subsidized health plans an exclusion from gross income for
employer payments in lieu of such participation, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 5, 2005
Mr. Shadegg introduced the following bill; which was referred to the
Committee on Energy and Commerce, and in addition to the Committees on
Ways and Means and Education and the Workforce, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow individuals a
refundable and advancable credit against income tax for health
insurance costs, to allow employees who elect not to participate in
employer subsidized health plans an exclusion from gross income for
employer payments in lieu of such participation, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Patients' Health
Care Reform Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purposes.
TITLE I--HEALTHMARTS
Sec. 101. Expansion of consumer choice through Healthmarts.
TITLE II--HEALTH CARE ACCESS AND CHOICE THROUGH INDIVIDUAL MEMBERSHIP
ASSOCIATIONS (IMAS)
Sec. 201. Expansion of access and choice through individual membership
associations (IMAs).
TITLE III--FEDERAL MATCHING FUNDING FOR STATE INSURANCE EXPENDITURES
Sec. 301. Federal matching funding for State insurance expenditures.
TITLE IV--AFFORDABLE HEALTH COVERAGE FOR EMPLOYEES OF SMALL BUSINESSES
Sec. 401. Short title of title.
Sec. 402. Rules.
Sec. 403. Clarification of treatment of single employer arrangements.
Sec. 404. Clarification of treatment of certain collectively bargained
arrangements.
Sec. 405. Enforcement provisions.
Sec. 406. Cooperation between Federal and State authorities.
Sec. 407. Effective date and transitional and other rules.
TITLE V--IMPROVEMENT TO ACCESS AND CHOICE OF HEALTH CARE
Sec. 501. Refundable and advanceable credit for health insurance costs.
Sec. 502. Exclusion for employer payments made to compensate employees
who elect not to participate in employer-
subsidized health plans.
TITLE VI--PATIENT ACCESS TO INFORMATION
Sec. 601. Patient access to information regarding plan coverage,
managed care procedures, health care
providers, and quality of medical care.
Sec. 602. Effective date.
(c) Constitutional Authority to Enact This Legislation.--The
constitutional authority upon which this Act rests is the power of
Congress to regulate commerce with foreign nations and among the
several States, set forth in article I, section 8 of the United States
Constitution.
SEC. 2. FINDINGS.
(a) Need for Structural Reforms.--Congress finds that the majority
of Americans are receiving health care of a quality unmatched elsewhere
in the world but that the method by which health care currently is
financed and delivered is inflationary and does not distribute quality
care to all Americans. Congress further finds that the major structural
reforms must be implemented in order to institute a competitive system
based on individual choice, under which each American is permitted
individual choice to select the method of health care delivery which he
believes is most appropriate for himself and his family, with
appropriate assistance from the United States Government. Such a system
would introduce internal incentives for the cost-effective delivery of
quality health care to the American people.
(b) Specific Deficiencies.--Congress finds that the major
deficiencies of the present method of delivering and financing health
care as follows:
(1) Employer ownership of health benefits.--The biggest
problem with health care today is that the tax code has
encouraged employers, not individuals, to become the purchaser
of health insurance. Employers have a tax incentive to offer
health care benefits to their employees, which means that
employers are truly the owner of the plan, not individuals.
Therefore employees, who are the consumers of health care
services are unconcerned with and not involved with issues of
cost and overutilize health care services in the belief that
such services are ``free''.
(2) Insufficient access.--Numerous persons are not able to
obtain sufficient health care either because the necessary
personnel and facilities are not located in their communities
or because they do not have adequate financial resources to
obtain such services, or both.
(3) Excessive government regulation.--Continually
increasing and complex Government regulation of the economic
aspects of the health care delivery system has proven
ineffective in restraining costs and is itself expensive and
counterproductive in fulfilling its purposes and detrimental to
the care of patients.
(4) Third-party payment systems.--Payment by third-party
payers (including commercial insurance companies and various
levels of government) for the preponderance of the health care
delivered each year insulates patients, as well as physicians,
hospitals, and other deliverers of health care, from the need
to consider the cost of treatment in addition to the medical
benefit expected from it.
(5) Reasonable cost reimbursement.--Reimbursement of
hospitals and other health care institutions by third-party
payers on the basis of reasonable costs of operation provides
these institutions insufficient incentives to introduce more
efficient methods of delivering care and at the same time
diminishes the extent to which these institutions and their
patients are affected by the consequences of inefficiency and
overexpansion.
(6) Government and third-party payer.--The present role of
government as a third-party payer poses a conflict of interest
whereby the Government purchases or finances health care
services and unilaterally determines the amount the deliverer
will be paid for those services.
(7) Lack of competition.--The present system of financing
and regulation prevents health care deliverers from competing
with each other on the basis of efficiency and price as well as
quality.
SEC. 3. PURPOSES.
The purposes of Act are--
(1) to make it possible for individuals, employees, and the
self-employed to purchase and own their own health insurance
without suffering any negative tax consequences;
(2) to enable individuals to make their own informed choice
of the method by which their health care is provided, the
persons who deliver it, and the price they wish to pay for it;
(3) to assist individuals in obtaining and in paying for
basic health care services;
(4) to render patients and deliverers sensitive to the cost
of health care, giving them both the incentive and the ability
to restrain undesired increases in health care costs;
(5) to simplify and rationalize the payment mechanism for
health care services;
(6) to foster the development of numerous, varied, and
innovative systems of providing health care which will compete
against each other in terms of price, service, and quality, and
thus allow the American people to benefit from competitive
forces which will reward efficient and effective deliverers and
eliminate those which provide unsatisfactory quality of care or
are inefficient;
(7) to replace governmental regulation of the economic
aspects of health care delivery with individual choice, private
initiative, and marketplace incentives and disciplines;
(8) to encourage the development of systems of delivering
health care which are capable of supplying a broad range of
health care services in a comprehensive and systematic manner,
and
(9) to preserve the independence of health care deliverers
and encourage their close identification with and their
accountability to the individuals they serve.
TITLE I--HEALTHMARTS
SEC. 101. EXPANSION OF CONSUMER CHOICE THROUGH HEALTHMARTS.
The Public Health Service Act is amended by adding at the end the
following new title:
``TITLE XXIX--HEALTHMARTS
``SEC. 2901. DEFINITION OF HEALTHMART.
``(a) In General.--For purposes of this title, the term
`HealthMart' means a legal entity that meets the following
requirements:
``(1) Organization.--The HealthMart is an organization
operated under the direction of a board of directors which is
composed of representatives of not fewer than 2 from each of
the following:
``(A) Employers.
``(B) Employees.
``(C) Individuals (other than those described in
subparagraph (B)) who are eligible to participate in
the HealthMart.
``(D) Health care providers, which may be
physicians, other health care professionals, health
care facilities, or any combination thereof.
``(E) Entities, such as insurance companies, health
maintenance organizations, and licensed provider-
sponsored organizations, that underwrite or administer
health benefits coverage.
``(2) Offering health benefits coverage.--
``(A) Different groups.--The HealthMart, in
conjunction with those health insurance issuers that
offer health benefits coverage through the HealthMart,
makes available health benefits coverage in the manner
described in subsection (b) to all employers, eligible
employees, and individuals in the manner described in
subsection (c)(2) at rates (including employer's and
employee's share, if applicable) that are established
by the health insurance issuer on a policy or product
specific basis and that may vary only as permissible
under State law. A HealthMart is deemed to be a group
health plan for purposes of applying section 702 of the
Employee Retirement Income Security Act of 1974,
section 2702 of this Act, and section 9802(b) of the
Internal Revenue Code of 1986 (which limit variation
among similarly situated individuals of required
premiums for health benefits coverage on the basis of
health status-related factors).
``(B) Nondiscrimination in coverage offered.--
``(i) In general.--Subject to clause (ii),
the HealthMart may not offer health benefits
coverage to an eligible employee or individual
in a geographic area (as specified under
paragraph (3)(A)) unless the same coverage is
offered to all such employees or individuals in
the same geographic area. Section 2711(a)(1)(B)
of this Act limits denial of enrollment of
certain eligible individuals under health
benefits coverage in the small group market.
``(ii) Construction.--Nothing in this title
shall be construed as requiring or permitting a
health insurance issuer to provide coverage
outside the service area of the issuer, as
approved under State law.
``(C) No financial underwriting.--The HealthMart
provides health benefits coverage only through
contracts with health insurance issuers and does not
assume insurance risk with respect to such coverage.
``(D) Minimum coverage.--By the end of the first
year of its operation and thereafter, the HealthMart
maintains not fewer than 10 purchasers and 100 members.
``(3) Geographic areas.--
``(A) Specification of geographic areas.--The
HealthMart shall specify the geographic area (or areas)
in which it makes available health benefits coverage
offered by health insurance issuers to employers, or
individuals, as the case may be. Any such area shall
encompass at least one entire county or equivalent
area.
``(B) Multistate areas.--In the case of a
HealthMart that serves more than one State, such
geographic areas may be areas that include portions of
two or more contiguous States.
``(C) Multiple healthmarts permitted in single
geographic area.--Nothing in this title shall be
construed as preventing the establishment and operation
of more than one HealthMart in a geographic area or as
limiting the number of HealthMarts that may operate in
any area.
``(4) Provision of administrative services to purchasers.--
``(A) In general.--The HealthMart provides
administrative services for purchasers. Such services
may include accounting, billing, enrollment
information, and employee coverage status reports.
``(B) Construction.--Nothing in this subsection
shall be construed as preventing a HealthMart from
serving as an administrative service organization to
any entity.
``(5) Dissemination of information.--The HealthMart
collects and disseminates (or arranges for the collection and
dissemination of) consumer-oriented information on the scope,
cost, and enrollee satisfaction of all coverage options offered
through the HealthMart to its members and eligible individuals.
Such information shall be defined by the HealthMart and shall
be in a manner appropriate to the type of coverage offered. To
the extent practicable, such information shall include
information on provider performance, locations and hours of
operation of providers, outcomes, and similar matters. Nothing
in this section shall be construed as preventing the
dissemination of such information or other information by the
HealthMart or by health insurance issuers through electronic or
other means.
``(6) Filing information.--The HealthMart--
``(A) files with the applicable Federal authority
information that demonstrates the HealthMart's
compliance with the applicable requirements of this
title; or
``(B) in accordance with rules established under
section 2903(a), files with a State such information as
the State may require to demonstrate such compliance.
``(b) Health Benefits Coverage Requirements.--
``(1) Compliance with consumer protection requirements.--
Any health benefits coverage offered through a HealthMart
shall--
``(A) be underwritten by a health insurance issuer
that--
``(i) is licensed (or otherwise regulated)
under State law,
``(ii) meets all applicable State standards
relating to consumer protection, subject to
section 2902(b), and
``(iii) offers the coverage under a
contract with the HealthMart;
``(B) subject to paragraph (2), be approved or
otherwise permitted to be offered under State law; and
``(C) provide full portability of creditable
coverage for individuals who remain members of the same
HealthMart notwithstanding that they change the
employer through which they are members in accordance
with the provisions of the parts 6 and 7 of subtitle B
of title I of the Employee Retirement Income Security
Act of 1974 and titles XXII and XXVII of this Act, so
long as both employers are purchasers in the
HealthMart, and notwithstanding that they terminate
such employment, if the HealthMart permits enrollment
directly by eligible individuals.
``(2) Alternative process for approval of health benefits
coverage in case of discrimination or delay.--
``(A) In general.--The requirement of paragraph
(1)(B) shall not apply to a policy or product of health
benefits coverage offered in a State if the health
insurance issuer seeking to offer such policy or
product files an application to waive such requirement
with the applicable Federal authority, and the
authority determines, based on the application and
other evidence presented to the authority, that--
``(i) either (or both) of the grounds
described in subparagraph (B) for approval of
the application has been met; and
``(ii) the coverage meets the applicable
State standards (other than those that have
been preempted under section 2902).
``(B) Grounds.--The grounds described in this
subparagraph with respect to a policy or product of
health benefits coverage are as follows:
``(i) Failure to act on policy, product, or
rate application on a timely basis.--The State
has failed to complete action on the policy or
product (or rates for the policy or product)
within 90 days of the date of the State's
receipt of a substantially complete
application. No period before the date of the
enactment of this section shall be included in
determining such 90-day period.
``(ii) Denial of application based on
discriminatory treatment.--The State has denied
such an application and--
``(I) the standards or review
process imposed by the State as a
condition of approval of the policy or
product imposes either any material
requirements, procedures, or standards
to such policy or product that are not
generally applicable to other policies
and products offered or any
requirements that are preempted under
section 2902; or
``(II) the State requires the
issuer, as a condition of approval of
the policy or product, to offer any
policy or product other than such
policy or product.
``(C) Enforcement.--In the case of a waiver granted
under subparagraph (A) to an issuer with respect to a
State, the Secretary may enter into an agreement with
the State under which the State agrees to provide for
monitoring and enforcement activities with respect to
compliance of such an issuer and its health insurance
coverage with the applicable State standards described
in subparagraph (A)(ii). Such monitoring and
enforcement shall be conducted by the State in the same
manner as the State enforces such standards with
respect to other health insurance issuers and plans,
without discrimination based on the type of issuer to
which the standards apply. Such an agreement shall
specify or establish mechanisms by which compliance
activities are undertaken, while not lengthening the
time required to review and process applications for
waivers under subparagraph (A).
``(3) Examples of types of coverage.--The benefits coverage
made available through a HealthMart may include, but is not
limited to, any of the following if it meets the other
applicable requirements of this title:
``(A) Coverage through a health maintenance
organization.
``(B) Coverage in connection with a preferred
provider organization.
``(C) Coverage in connection with a licensed
provider-sponsored organization.
``(D) Indemnity coverage through an insurance
company.
``(E) Coverage offered in connection with a
contribution into a medical savings account or flexible
spending account.
``(F) Coverage that includes a point-of-service
option.
``(G) Any combination of such types of coverage.
``(4) Wellness bonuses for health promotion.--Nothing in
this title shall be construed as precluding a health insurance
issuer offering health benefits coverage through a HealthMart
from establishing premium discounts or rebates for members or
from modifying otherwise applicable copayments or deductibles
in return for adherence to programs of health promotion and
disease prevention so long as such programs are agreed to in
advance by the HealthMart and comply with all other provisions
of this title and do not discriminate among similarly situated
members.
``(c) Purchasers; Members; Health Insurance Issuers.--
``(1) Purchasers.--
``(A) In general.--Subject to the provisions of
this title, a HealthMart shall permit any employer or
any individual described in subsection (a)(1)(C) to
contract with the HealthMart for the purchase of health
benefits coverage for its employees and dependents of
those employees or for the individual (and the
individual's dependents), respectively, and may not
vary conditions of eligibility (including premium rates
and membership fees) of an employer or individual to be
a purchaser.
``(B) Role of associations, brokers, and licensed
health insurance agents.--Nothing in this section shall
be construed as preventing an association, broker,
licensed health insurance agent, or other entity from
assisting or representing a HealthMart or employers or
individuals from entering into appropriate arrangements
to carry out this title.
``(C) Period of contract.--The HealthMart may not
require a contract under subparagraph (A) between a
HealthMart and a purchaser to be effective for a period
of longer than 24 months. The previous sentence shall
not be construed as preventing such a contract from
being extended for additional 24-month periods or
preventing the purchaser from voluntarily electing a
contract period of longer than 24 months.
``(D) Exclusive nature of contract.--
``(i) In general.--Subject to clause (ii),
such a contract shall provide that the
purchaser agrees not to obtain or sponsor
health benefits coverage, on behalf of any
eligible employees (and their dependents),
other than through the HealthMart.
``(ii) Exception if no coverage offered in
area of residences.--Clause (i) shall not apply
to an eligible individual who resides in an
area for which no coverage is offered by any
health insurance issuer through the HealthMart.
``(iii) Nothing precluding individual
employee opt-out.--Nothing in this subparagraph
shall be construed as requiring an eligible
employee of a large or small employer that is a
purchaser to obtain health benefits coverage
through the HealthMart.
``(2) Members.--
``(A) In general.--
``(i) Employment based membership.--Under
rules established to carry out this title, with
respect to an employer that has a purchaser
contract with a HealthMart, individuals who are
employees of the employer may enroll for health
benefits coverage (including coverage for
dependents of such enrolling employees) offered
by a health insurance issuer through the
HealthMart.
``(ii) Individuals.--Under rules
established to carry out this title, with
respect to an individual who has a purchaser
contract with a HealthMart for himself or
herself, the individual may enroll for health
benefits coverage (including coverage for
dependents of such individual) offered by a
health insurance issuer through the HealthMart.
``(B) Nondiscrimination in enrollment.--A
HealthMart may not deny enrollment as a member to an
individual who is an employee or individual (or
dependent of such an employee or individual) eligible
to be so enrolled based on health status-related
factors, except as may be permitted consistent with
section 2742(b).
``(C) Annual open enrollment period.--In the case
of members enrolled in health benefits coverage offered
by a health insurance issuer through a HealthMart,
subject to subparagraph (D), the HealthMart shall
provide for an annual open enrollment period of 30 days
during which such members may change the coverage
option in which the members are enrolled.
``(D) Rules of eligibility.--Nothing in this
paragraph shall preclude a HealthMart from establishing
rules of employee or individual eligibility for
enrollment and reenrollment of members during the
annual open enrollment period under subparagraph (C).
Such rules shall be applied consistently to all
purchasers and members within the HealthMart and shall
not be based in any manner on health status-related
factors and may not conflict with sections 2701 and
2702 of this Act.
``(3) Health insurance issuers.--
``(A) Premium collection.--The contract between a
HealthMart and a health insurance issuer shall provide,
with respect to a member enrolled with health benefits
coverage offered by the issuer through the HealthMart,
for the payment of the premiums collected by the
HealthMart (or the issuer) for such coverage (less a
pre-determined administrative charge negotiated by the
HealthMart and the issuer) to the issuer.
``(B) Scope of service area.--Nothing in this title
shall be construed as requiring the service area of a
health insurance issuer with respect to health
insurance coverage to cover the entire geographic area
served by a HealthMart.
``(C) Availability of coverage options.--
``(i) In general.--A HealthMart shall enter
into contracts with one or more health
insurance issuers in a manner that assures that
at least 2 health insurance coverage options
are made available.
``(ii) Requirement of non-network option.--
At least one of the health insurance coverage
options made available under clause (i) shall
be a non-network coverage option under which
enrollees may obtain benefits for health care
items and services that are not provided under
a contract between the provider of the service
and the issuer involved.
``(d) Prevention of Conflicts of Interest.--
``(1) For boards of directors.--A member of a board of
directors of a HealthMart may not serve as an employee or paid
consultant to the HealthMart, but may receive reasonable
reimbursement for travel expenses for purposes of attending
meetings of the board or committees thereof.
``(2) For boards of directors or employees.--An individual
is not eligible to serve in a paid or unpaid capacity on the
board of directors of a HealthMart or as an employee of the
HealthMart, if the individual is employed by, represents in any
capacity, owns, or controls any ownership interest in an
organization from whom the HealthMart receives contributions,
grants, or other funds not connected with a contract for
coverage through the HealthMart.
``(3) Employment and employee representatives.--
``(A) In general.--An individual who is serving on
a board of directors of a HealthMart as a
representative described in subparagraph (A) or (B) of
section 2901(a)(1) shall not be employed by or
affiliated with a health insurance issuer or be
licensed as or employed by or affiliated with a health
care provider.
``(B) Construction.--For purposes of subparagraph
(A), the term `affiliated' does not include membership
in a health benefits plan or the obtaining of health
benefits coverage offered by a health insurance issuer.
``(e) Construction.--
``(1) Network of affiliated healthmarts.--Nothing in this
section shall be construed as preventing one or more
HealthMarts serving different areas (whether or not contiguous)
from providing for some or all of the following (through a
single administrative organization or otherwise):
``(A) Coordinating the offering of the same or
similar health benefits coverage in different areas
served by the different HealthMarts.
``(B) Providing for crediting of deductibles and
other cost-sharing for individuals who are provided
health benefits coverage through the HealthMarts (or
affiliated HealthMarts) after--
``(i) a change of employers through which
the coverage is provided, or
``(ii) a change in place of employment to
an area not served by the previous HealthMart.
``(2) Permitting healthmarts to adjust distributions among
issuers to reflect relative risk of enrollees.--Nothing in this
section shall be construed as precluding a HealthMart from
providing for adjustments in amounts distributed among the
health insurance issuers offering health benefits coverage
through the HealthMart based on factors such as the relative
health care risk of members enrolled under the coverage offered
by the different issuers.
``SEC. 2902. APPLICATION OF CERTAIN LAWS AND REQUIREMENTS.
``(a) Authority of States.--Nothing in this section shall be
construed as preempting State laws relating to the following:
``(1) The regulation of underwriters of health coverage,
including licensure and solvency requirements.
``(2) The application of premium taxes and required
payments for guaranty funds or for contributions to high-risk
pools.
``(3) The application of fair marketing requirements and
other consumer protections (other than those specifically
relating to an item described in subsection (b)).
``(4) The application of requirements relating to the
adjustment of rates for health insurance coverage.
``(b) Treatment of Benefit and Grouping Requirements.--State laws
insofar as they relate to any of the following are superseded and shall
not apply to health benefits coverage made available through a
HealthMart:
``(1) Benefit requirements for health benefits coverage
offered through a HealthMart, including (but not limited to)
requirements relating to coverage of specific providers,
specific services or conditions, or the amount, duration, or
scope of benefits, but not including requirements to the extent
required to implement title XXVII or other Federal law and to
the extent the requirement prohibits an exclusion of a specific
disease from such coverage.
``(2) Requirements (commonly referred to as fictitious
group laws) relating to grouping and similar requirements for
such coverage to the extent such requirements impede the
establishment and operation of HealthMarts pursuant to this
title.
``(3) Any other requirements (including limitations on
compensation arrangements) that, directly or indirectly,
preclude (or have the effect of precluding) the offering of
such coverage through a HealthMart, if the HealthMart meets the
requirements of this title.
Any State law or regulation relating to the composition or organization
of a HealthMart is preempted to the extent the law or regulation is
inconsistent with the provisions of this title.
``(c) Application of Erisa Fiduciary and Disclosure Requirements.--
The board of directors of a HealthMart is deemed to be a plan
administrator of an employee welfare benefit plan which is a group
health plan for purposes of applying parts 1 and 4 of subtitle B of
title I of the Employee Retirement Income Security Act of 1974 and
those provisions of part 5 of such subtitle which are applicable to
enforcement of such parts 1 and 4, and the HealthMart shall be treated
as such a plan and the enrollees enrolled on the basis of employment
shall be treated as participants and beneficiaries for purposes of
applying such provisions pursuant to this subsection.
``(d) Application of Erisa Renewability Protection.--A HealthMart
is deemed to be group health plan that is a multiple employer welfare
arrangement for purposes of applying section 703 of the Employee
Retirement Income Security Act of 1974.
``(e) Application of Rules for Network Plans and Financial
Capacity.--The provisions of subsections (c) and (d) of section 2711
apply to health benefits coverage offered by a health insurance issuer
through a HealthMart.
``(f) Construction Relating to Offering Requirement.--Nothing in
section 2711(a) of this Act or 703 of the Employee Retirement Income
Security Act of 1974 shall be construed as permitting the offering
outside the HealthMart of health benefits coverage that is only made
available through a HealthMart under this section because of the
application of subsection (b).
``(g) Application to Guaranteed Renewability Requirements in Case
of Discontinuation of an Issuer.--For purposes of applying section 2712
in the case of health insurance coverage offered by a health insurance
issuer through a HealthMart, if the contract between the HealthMart and
the issuer is terminated and the HealthMart continues to make available
any health insurance coverage after the date of such termination, the
following rules apply:
``(1) Renewability.--The HealthMart shall fulfill the
obligation under such section of the issuer renewing and
continuing in force coverage by offering purchasers (and
members and their dependents) all available health benefits
coverage that would otherwise be available to similarly-
situated purchasers and members from the remaining
participating health insurance issuers in the same manner as
would be required of issuers under section 2712(c).
``(2) Application of association rules.--The HealthMart
shall be considered an association for purposes of applying
section 2712(e).
``(h) Construction in Relation to Certain Other Laws.--Nothing in
this title shall be construed as modifying or affecting the
applicability to HealthMarts or health benefits coverage offered by a
health insurance issuer through a HealthMart of parts 6 and 7 of
subtitle B of title I of the Employee Retirement Income Security Act of
1974 or titles XXII and XXVII of this Act.
``SEC. 2903. ADMINISTRATION.
``(a) In General.--The applicable Federal authority shall
administer this title and is authorized to issue such regulations as
may be required to carry out this title. Such regulations shall be
subject to Congressional review under the provisions of chapter 8 of
title 5, United States Code. The applicable Federal authority shall
incorporate the process of `deemed file and use' with respect to the
information filed under section 2901(a)(6)(A) and shall determine
whether information filed by a HealthMart demonstrates compliance with
the applicable requirements of this title. Such authority shall
exercise its authority under this title in a manner that fosters and
promotes the development of HealthMarts in order to improve access to
health care coverage and services.
``(b) Periodic Reports.--The applicable Federal authority shall
submit to Congress a report every 30 months, during the 10-year period
beginning on the effective date of the rules promulgated by the
applicable Federal authority to carry out this title, on the
effectiveness of this title in promoting coverage of uninsured
individuals. Such authority may provide for the production of such
reports through one or more contracts with appropriate private
entities.
``SEC. 2904. DEFINITIONS.
``For purposes of this title:
``(1) Applicable federal authority.--The term `applicable
Federal authority' means the Secretary of Health and Human
Services .
``(2) Eligible employee or individual.--The term `eligible'
means, with respect to an employee or other individual and a
HealthMart, an employee or individual who is eligible under
section 2901(c)(2) to enroll or be enrolled in health benefits
coverage offered through the HealthMart.
``(3) Employer; employee; dependent.--Except as the
applicable Federal authority may otherwise provide, the terms
`employer', `employee', and `dependent', as applied to health
insurance coverage offered by a health insurance issuer
licensed (or otherwise regulated) in a State, shall have the
meanings applied to such terms with respect to such coverage
under the laws of the State relating to such coverage and such
an issuer. The term `dependent' may include the spouse and
children of the individual involved.
``(4) Health benefits coverage.--The term `health benefits
coverage' has the meaning given the term group health insurance
coverage in section 2791(b)(4).
``(5) Health insurance issuer.--The term `health insurance
issuer' has the meaning given such term in section 2791(b)(2).
``(6) Health status-related factor.--The term `health
status-related factor' has the meaning given such term in
section 2791(d)(9).
``(7) Healthmart.--The term `HealthMart' is defined in
section 2901(a).
``(8) Member.--The term `member`` means, with respect to a
HealthMart, an individual enrolled for health benefits coverage
through the HealthMart under section 2901(c)(2).
``(9) Purchaser.--The term `purchaser' means, with respect
to a HealthMart, an employer or individual that has contracted
under section 2901(c)(1)(A) with the HealthMart for the
purchase of health benefits coverage.''.
TITLE II--HEALTH CARE ACCESS AND CHOICE THROUGH INDIVIDUAL MEMBERSHIP
ASSOCIATIONS (IMAS)
SEC. 201. EXPANSION OF ACCESS AND CHOICE THROUGH INDIVIDUAL MEMBERSHIP
ASSOCIATIONS (IMAS).
The Public Health Service Act, as amended by section 101, is
further amended by adding at the end the following new title:
``TITLE XXX--INDIVIDUAL MEMBERSHIP ASSOCIATIONS
``SEC. 3001. DEFINITION OF INDIVIDUAL MEMBERSHIP ASSOCIATION (IMA).
``(a) In General.--For purposes of this title, the terms
`individual membership association' and `IMA' mean a legal entity that
meets the following requirements:
``(1) Organization.--The IMA is an organization operated
under the direction of an association (as defined in section
3004(1)).
``(2) Offering health benefits coverage.--
``(A) Different groups.--The IMA, in conjunction
with those health insurance issuers that offer health
benefits coverage through the IMA, makes available
health benefits coverage in the manner described in
subsection (b) to all members of the IMA and the
dependents of such members in the manner described in
subsection (c)(2) at rates that are established by the
health insurance issuer on a policy or product specific
basis and that may vary only as permissible under State
law.
``(B) Nondiscrimination in coverage offered.--
``(i) In general.--Subject to clause (ii),
the IMA may not offer health benefits coverage
to a member of an IMA unless the same coverage
is offered to all such members of the IMA.
``(ii) Construction.--Nothing in this title
shall be construed as requiring or permitting a
health insurance issuer to provide coverage
outside the service area of the issuer, as
approved under State law, or requiring a health
insurance issuer from excluding or limiting the
coverage on any individual, subject to the
requirement of section 2741.
``(C) No financial underwriting.--The IMA provides
health benefits coverage only through contracts with
health insurance issuers and does not assume insurance
risk with respect to such coverage.
``(3) Geographic areas.--Nothing in this title shall be
construed as preventing the establishment and operation of more
than one IMA in a geographic area or as limiting the number of
IMAs that may operate in any area.
``(4) Provision of administrative services to purchasers.--
``(A) In general.--The IMA may provide
administrative services for members. Such services may
include accounting, billing, and enrollment
information.
``(B) Construction.--Nothing in this subsection
shall be construed as preventing an IMA from serving as
an administrative service organization to any entity.
``(5) Filing information.--The IMA files with the Secretary
information that demonstrates the IMA's compliance with the
applicable requirements of this title.
``(b) Health Benefits Coverage Requirements.--
``(1) Compliance with consumer protection requirements.--
Any health benefits coverage offered through an IMA shall--
``(A) be underwritten by a health insurance issuer
that--
``(i) is licensed (or otherwise regulated)
under State law,
``(ii) meets all applicable State standards
relating to consumer protection, subject to
section 3002(b), and
``(B) subject to paragraph (2), be approved or
otherwise permitted to be offered under State law.
``(2) Examples of types of coverage.--The benefits coverage
made available through an IMA may include, but is not limited
to, any of the following if it meets the other applicable
requirements of this title:
``(A) Coverage through a health maintenance
organization.
``(B) Coverage in connection with a preferred
provider organization.
``(C) Coverage in connection with a licensed
provider-sponsored organization.
``(D) Indemnity coverage through an insurance
company.
``(E) Coverage offered in connection with a
contribution into a medical savings account or flexible
spending account.
``(F) Coverage that includes a point-of-service
option.
``(G) Any combination of such types of coverage.
``(3) Wellness bonuses for health promotion.--Nothing in
this title shall be construed as precluding a health insurance
issuer offering health benefits coverage through an IMA from
establishing premium discounts or rebates for members or from
modifying otherwise applicable copayments or deductibles in
return for adherence to programs of health promotion and
disease prevention so long as such programs are agreed to in
advance by the IMA and comply with all other provisions of this
title and do not discriminate among similarly situated members.
``(c) Members; Health Insurance Issuers.--
``(1) Members.--
``(A) In general.--Under rules established to carry
out this title, with respect to an individual who is a
member of an IMA, the individual may enroll for health
benefits coverage (including coverage for dependents of
such individual) offered by a health insurance issuer
through the IMA.
``(B) Rules for enrollment.--Nothing in this
paragraph shall preclude an IMA from establishing rules
of enrollment and reenrollment of members. Such rules
shall be applied consistently to all members within the
IMA and shall not be based in any manner on health
status-related factors.
``(2) Health insurance issuers.--The contract between an
IMA and a health insurance issuer shall provide, with respect
to a member enrolled with health benefits coverage offered by
the issuer through the IMA, for the payment of the premiums
collected by the issuer.
``SEC. 3002. APPLICATION OF CERTAIN LAWS AND REQUIREMENTS.
``State laws insofar as they relate to any of the following are
superseded and shall not apply to health benefits coverage made
available through an IMA:
``(1) Benefit requirements for health benefits coverage
offered through an IMA, including (but not limited to)
requirements relating to coverage of specific providers,
specific services or conditions, or the amount, duration, or
scope of benefits, but not including requirements to the extent
required to implement title XXVII or other Federal law and to
the extent the requirement prohibits an exclusion of a specific
disease from such coverage.
``(2) Any other requirements (including limitations on
compensation arrangements) that, directly or indirectly,
preclude (or have the effect of precluding) the offering of
such coverage through an IMA, if the IMA meets the requirements
of this title.
Any State law or regulation relating to the composition or organization
of an IMA is preempted to the extent the law or regulation is
inconsistent with the provisions of this title.
``SEC. 3003. ADMINISTRATION.
``(a) In General.--The Secretary shall administer this title and is
authorized to issue such regulations as may be required to carry out
this title. Such regulations shall be subject to Congressional review
under the provisions of chapter 8 of title 5, United States Code. The
Secretary shall incorporate the process of `deemed file and use' with
respect to the information filed under section 3001(a)(5)(A) and shall
determine whether information filed by an IMA demonstrates compliance
with the applicable requirements of this title. The Secretary shall
exercise authority under this title in a manner that fosters and
promotes the development of IMAs in order to improve access to health
care coverage and services.
``(b) Periodic Reports.--The Secretary shall submit to Congress a
report every 30 months, during the 10-year period beginning on the
effective date of the rules promulgated by the Secretary to carry out
this title, on the effectiveness of this title in promoting coverage of
uninsured individuals. The Secretary may provide for the production of
such reports through one or more contracts with appropriate private
entities.
``SEC. 3004. DEFINITIONS.
``For purposes of this title:
``(1) Association.--The term `association' means, with
respect to health insurance coverage offered in a State, an
association which--
``(A) has been actively in existence for at least 5
years;
``(B) has been formed and maintained in good faith
for purposes other than obtaining insurance;
``(C) does not condition membership in the
association on any health status-related factor
relating to an individual (including an employee of an
employer or a dependent of an employee); and
``(D) does not make health insurance coverage
offered through the association available other than in
connection with a member of the association.
``(2) Dependent.--The term `dependent', as applied to
health insurance coverage offered by a health insurance issuer
licensed (or otherwise regulated) in a State, shall have the
meaning applied to such term with respect to such coverage
under the laws of the State relating to such coverage and such
an issuer. Such term may include the spouse and children of the
individual involved.
``(3) Health benefits coverage.--The term `health benefits
coverage' has the meaning given the term health insurance
coverage in section 2791(b)(1).
``(4) Health insurance issuer.--The term `health insurance
issuer' has the meaning given such term in section 2791(b)(2).
``(5) Health status-related factor.--The term `health
status-related factor' has the meaning given such term in
section 2791(d)(9).
``(6) Ima; individual membership association.--The terms
`IMA' and `individual membership association' are defined in
section 3001(a).
``(7) Member.--The term `member' means, with respect to an
IMA, an individual who is a member of the association to which
the IMA is offering coverage.''.
TITLE III--FEDERAL MATCHING FUNDING FOR STATE INSURANCE EXPENDITURES
SEC. 301. FEDERAL MATCHING FUNDING FOR STATE INSURANCE EXPENDITURES.
(a) In General.--Subject to the succeeding provisions of this
section, each State shall receive from the Secretary of Health and
Human Services an amount equal to 50 percent of the funds expended by
the State in providing for the use, in connection with providing health
benefits coverage, of a high-risk pool, a reinsurance pool, or other
risk-adjustment mechanism used for the purpose of subsidizing the
purchase of private health insurance.
(b) Funding Limitation.--A State shall not receive under this
section for a fiscal year more than a total of 50 cents multiplied by
the average number of residents (as estimated by the Secretary) in the
State in the fiscal year.
(c) Administration.--The Secretary of Health and Human Services
shall provide for the administration of this section and may establish
such terms and conditions, including the requirement of an application,
as may be appropriate to carry out this section.
(d) Construction.--Nothing in this section shall be construed as
requiring a State to operate a reinsurance pool (or other risk-
adjustment mechanism) under this section or as preventing a State from
operating such a pool or mechanism through one or more private
entities.
(e) High-Risk Pool.--For purposes of this section, the term ``high-
risk pool'' means any qualified high risk pool (as defined in section
2744(c)(2) of the Public Health Service Act).
(f) Reinsurance Pool or Other Risk-Adjustment Mechanism Defined.--
For purposes of this section, the term ``reinsurance pool or other
risk-adjustment mechanism'' means any State-based risk spreading
mechanism to subsidize the purchase of private health insurance for the
high-risk population.
(g) High-Risk Population.--For purposes of this section, the term
``high-risk population'' means--
(1) individuals who, by reason of the existence or history
of a medical condition, are able to acquire health coverage
only at rates which are at least 150 percent of the standard
risk rates for such coverage, and
(2) individuals who are provided health coverage by a high-
risk pool.
(h) State Defined.--For purposes of this section, the term
``State'' includes the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the Northern Mariana Islands.
TITLE IV--AFFORDABLE HEALTH COVERAGE FOR EMPLOYEES OF SMALL BUSINESSES
SEC. 401. SHORT TITLE OF TITLE.
This title may be cited as the ``Small Business Access and Choice
for Entrepreneurs Act of 2005''.
SEC. 402. RULES.
(a) In General.--Subtitle B of title I of the Employee Retirement
Income Security Act of 1974 is amended by adding after part 7 the
following new part:
``PART 8--RULES GOVERNING ASSOCIATION HEALTH PLANS
``SEC. 801. ASSOCIATION HEALTH PLANS.
``(a) In General.--For purposes of this part, the term `association
health plan' means a group health plan--
``(1) whose sponsor is (or is deemed under this part to be)
described in subsection (b); and
``(2) under which at least one option of health insurance
coverage offered by a health insurance issuer (which may
include, among other options, managed care options, point of
service options, and preferred provider options) is provided to
participants and beneficiaries, unless, for any plan year, such
coverage remains unavailable to the plan despite good faith
efforts exercised by the plan to secure such coverage.
``(b) Sponsorship.--The sponsor of a group health plan is described
in this subsection if such sponsor--
``(1) is organized and maintained in good faith, with a
constitution and bylaws specifically stating its purpose and
providing for periodic meetings on at least an annual basis, as
a bona fide trade association, a bona fide industry association
(including a rural electric cooperative association or a rural
telephone cooperative association), a bona fide professional
association, or a bona fide chamber of commerce (or similar
bona fide business association, including a corporation or
similar organization that operates on a cooperative basis
(within the meaning of section 1381 of the Internal Revenue
Code of 1986)), for substantial purposes other than that of
obtaining or providing medical care;
``(2) is established as a permanent entity which receives
the active support of its members and collects from its members
on a periodic basis dues or payments necessary to maintain
eligibility for membership in the sponsor; and
``(3) does not condition membership, such dues or payments,
or coverage under the plan on the basis of health status-
related factors with respect to the employees of its members
(or affiliated members), or the dependents of such employees,
and does not condition such dues or payments on the basis of
group health plan participation.
Any sponsor consisting of an association of entities which meet the
requirements of paragraphs (1), (2), and (3) shall be deemed to be a
sponsor described in this subsection.
``SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.
``(a) In General.--The applicable authority shall prescribe by
regulation, through negotiated rulemaking, a procedure under which,
subject to subsection (b), the applicable authority shall certify
association health plans which apply for certification as meeting the
requirements of this part.
``(b) Standards.--Under the procedure prescribed pursuant to
subsection (a), in the case of an association health plan that provides
at least one benefit option which does not consist of health insurance
coverage, the applicable authority shall certify such plan as meeting
the requirements of this part only if the applicable authority is
satisfied that--
``(1) such certification--
``(A) is administratively feasible;
``(B) is not adverse to the interests of the
individuals covered under the plan; and
``(C) is protective of the rights and benefits of
the individuals covered under the plan; and
``(2) the applicable requirements of this part are met (or,
upon the date on which the plan is to commence operations, will
be met) with respect to the plan.
``(c) Requirements Applicable to Certified Plans.--An association
health plan with respect to which certification under this part is in
effect shall meet the applicable requirements of this part, effective
on the date of certification (or, if later, on the date on which the
plan is to commence operations).
``(d) Requirements for Continued Certification.--The applicable
authority may provide by regulation, through negotiated rulemaking, for
continued certification of association health plans under this part.
``(e) Class Certification for Fully Insured Plans.--The applicable
authority shall establish a class certification procedure for
association health plans under which all benefits consist of health
insurance coverage. Under such procedure, the applicable authority
shall provide for the granting of certification under this part to the
plans in each class of such association health plans upon appropriate
filing under such procedure in connection with plans in such class and
payment of the prescribed fee under section 807(a).
``(f) Certification of Self-Insured Association Health Plans.--An
association health plan which offers one or more benefit options which
do not consist of health insurance coverage may be certified under this
part only if such plan consists of any of the following:
``(1) a plan which offered such coverage on the date of the
enactment of the Small Business Access and Choice for
Entrepreneurs Act of 2005,
``(2) a plan under which the sponsor does not restrict
membership to one or more trades and businesses or industries
and whose eligible participating employers represent a broad
cross-section of trades and businesses or industries, or
``(3) a plan whose eligible participating employers
represent one or more trades or businesses, or one or more
industries, which have been indicated as having average or
above-average health insurance risk or health claims experience
by reason of State rate filings, denials of coverage, proposed
premium rate levels, and other means demonstrated by such plan
in accordance with regulations which the Secretary shall
prescribe through negotiated rulemaking, including (but not
limited to) the following: agriculture; automobile dealerships;
barbering and cosmetology; child care; construction; dance,
theatrical, and orchestra productions; disinfecting and pest
control; eating and drinking establishments; fishing;
hospitals; labor organizations; logging; manufacturing
(metals); mining; medical and dental practices; medical
laboratories; sanitary services; transportation (local and
freight); and warehousing.
``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF TRUSTEES.
``(a) Sponsor.--The requirements of this subsection are met with
respect to an association health plan if the sponsor has met (or is
deemed under this part to have met) the requirements of section 801(b)
for a continuous period of not less than 3 years ending with the date
of the application for certification under this part.
``(b) Board of Trustees.--The requirements of this subsection are
met with respect to an association health plan if the following
requirements are met:
``(1) Fiscal control.--The plan is operated, pursuant to a
trust agreement, by a board of trustees which has complete
fiscal control over the plan and which is responsible for all
operations of the plan.
``(2) Rules of operation and financial controls.--The board
of trustees has in effect rules of operation and financial
controls, based on a 3-year plan of operation, adequate to
carry out the terms of the plan and to meet all requirements of
this title applicable to the plan.
``(3) Rules governing relationship to participating
employers and to contractors.--
``(A) In general.--Except as provided in
subparagraphs (B) and (C), the members of the board of
trustees are individuals selected from individuals who
are the owners, officers, directors, or employees of
the participating employers or who are partners in the
participating employers and actively participate in the
business.
``(B) Limitation.--
``(i) General rule.--Except as provided in
clauses (ii) and (iii), no such member is an
owner, officer, director, or employee of, or
partner in, a contract administrator or other
service provider to the plan.
``(ii) Limited exception for providers of
services solely on behalf of the sponsor.--
Officers or employees of a sponsor which is a
service provider (other than a contract
administrator) to the plan may be members of
the board if they constitute not more than 25
percent of the membership of the board and they
do not provide services to the plan other than
on behalf of the sponsor.
``(iii) Treatment of providers of medical
care.--In the case of a sponsor which is an
association whose membership consists primarily
of providers of medical care, clause (i) shall
not apply in the case of any service provider
described in subparagraph (A) who is a provider
of medical care under the plan.
``(C) Certain plans excluded.--Subparagraph (A)
shall not apply to an association health plan which is
in existence on the date of the enactment of the Small
Business Access and Choice for Entrepreneurs Act of
2005.
``(D) Sole authority.--The board has sole authority
under the plan to approve applications for
participation in the plan and to contract with a
service provider to administer the day-to-day affairs
of the plan.
``(c) Treatment of Franchise Networks.--In the case of a group
health plan which is established and maintained by a franchiser for a
franchise network consisting of its franchisees--
``(1) the requirements of subsection (a) and section
801(a)(1) shall be deemed met if such requirements would
otherwise be met if the franchiser were deemed to be the
sponsor referred to in section 801(b), such network were deemed
to be an association described in section 801(b), and each
franchisee were deemed to be a member (of the association and
the sponsor) referred to in section 801(b); and
``(2) the requirements of section 804(a)(1) shall be deemed
met.
The Secretary may by regulation, through negotiated rulemaking, define
for purposes of this subsection the terms `franchiser', `franchise
network', and `franchisee'.
``(d) Certain Collectively Bargained Plans.--
``(1) In general.--In the case of a group health plan
described in paragraph (2)--
``(A) the requirements of subsection (a) and
section 801(a)(1) shall be deemed met;
``(B) the joint board of trustees shall be deemed a
board of trustees with respect to which the
requirements of subsection (b) are met; and
``(C) the requirements of section 804 shall be
deemed met.
``(2) Requirements.--A group health plan is described in
this paragraph if--
``(A) the plan is a multiemployer plan; or
``(B) the plan is in existence on April 1, 1997,
and would be described in section 3(40)(A)(i) but
solely for the failure to meet the requirements of
section 3(40)(C)(ii).
``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.
``(a) Covered Employers and Individuals.--The requirements of this
subsection are met with respect to an association health plan if, under
the terms of the plan--
``(1) each participating employer must be--
``(A) a member of the sponsor;
``(B) the sponsor; or
``(C) an affiliated member of the sponsor with
respect to which the requirements of subsection (b) are
met;
except that, in the case of a sponsor which is a professional
association or other individual-based association, if at least
one of the officers, directors, or employees of an employer, or
at least one of the individuals who are partners in an employer
and who actively participates in the business, is a member or
such an affiliated member of the sponsor, participating
employers may also include such employer; and
``(2) all individuals commencing coverage under the plan
after certification under this part must be--
``(A) active or retired owners (including self-
employed individuals), officers, directors, or
employees of, or partners in, participating employers;
or
``(B) the beneficiaries of individuals described in
subparagraph (A).
``(b) Coverage of Previously Uninsured Employees.--In the case of
an association health plan in existence on the date of the enactment of
the Small Business Access and Choice for Entrepreneurs Act of 2005, an
affiliated member of the sponsor of the plan may be offered coverage
under the plan as a participating employer only if--
``(1) the affiliated member was an affiliated member on the
date of certification under this part; or
``(2) during the 12-month period preceding the date of the
offering of such coverage, the affiliated member has not
maintained or contributed to a group health plan with respect
to any of its employees who would otherwise be eligible to
participate in such association health plan.
``(c) Individual Market Unaffected.--The requirements of this
subsection are met with respect to an association health plan if, under
the terms of the plan, no participating employer may provide health
insurance coverage in the individual market for any employee not
covered under the plan which is similar to the coverage
contemporaneously provided to employees of the employer under the plan,
if such exclusion of the employee from coverage under the plan is based
on a health status-related factor with respect to the employee and such
employee would, but for such exclusion on such basis, be eligible for
coverage under the plan.
``(d) Prohibition of Discrimination Against Employers and Employees
Eligible to Participate.--The requirements of this subsection are met
with respect to an association health plan if--
``(1) under the terms of the plan, all employers meeting
the preceding requirements of this section are eligible to
qualify as participating employers for all geographically
available coverage options, unless, in the case of any such
employer, participation or contribution requirements of the
type referred to in section 2711 of the Public Health Service
Act are not met;
``(2) upon request, any employer eligible to participate is
furnished information regarding all coverage options available
under the plan; and
``(3) the applicable requirements of sections 701, 702, and
703 are met with respect to the plan.
``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, CONTRIBUTION
RATES, AND BENEFIT OPTIONS.
``(a) In General.--The requirements of this section are met with
respect to an association health plan if the following requirements are
met:
``(1) Contents of governing instruments.--The instruments
governing the plan include a written instrument, meeting the
requirements of an instrument required under section 402(a)(1),
which--
``(A) provides that the board of trustees serves as
the named fiduciary required for plans under section
402(a)(1) and serves in the capacity of a plan
administrator (referred to in section 3(16)(A));
``(B) provides that the sponsor of the plan is to
serve as plan sponsor (referred to in section
3(16)(B)); and
``(C) incorporates the requirements of section 806.
``(2) Contribution rates must be nondiscriminatory.--
``(A) The contribution rates for any participating
small employer do not vary on the basis of the claims
experience of such employer and do not vary on the
basis of the type of business or industry in which such
employer is engaged.
``(B) Nothing in this title or any other provision
of law shall be construed to preclude an association
health plan, or a health insurance issuer offering
health insurance coverage in connection with an
association health plan, from--
``(i) setting contribution rates based on
the claims experience of the plan; or
``(ii) varying contribution rates for small
employers in a State to the extent that such
rates could vary using the same methodology
employed in such State for regulating premium
rates in the small group market with respect to
health insurance coverage offered in connection
with bona fide associations (within the meaning
of section 2791(d)(3) of the Public Health
Service Act),
subject to the requirements of section 702(b) relating
to contribution rates.
``(3) Floor for number of covered individuals with respect
to certain plans.--If any benefit option under the plan does
not consist of health insurance coverage, the plan has as of
the beginning of the plan year not fewer than 1,000
participants and beneficiaries.
``(4) Marketing requirements.--
``(A) In general.--If a benefit option which
consists of health insurance coverage is offered under
the plan, State-licensed insurance agents shall be used
to distribute to small employers coverage which does
not consist of health insurance coverage in a manner
comparable to the manner in which such agents are used
to distribute health insurance coverage.
``(B) State-licensed insurance agents.--For
purposes of subparagraph (A), the term `State-licensed
insurance agents' means one or more agents who are
licensed in a State and are subject to the laws of such
State relating to licensure, qualification, testing,
examination, and continuing education of persons
authorized to offer, sell, or solicit health insurance
coverage in such State.
``(5) Regulatory requirements.--Such other requirements as
the applicable authority determines are necessary to carry out
the purposes of this part, which shall be prescribed by the
applicable authority by regulation through negotiated
rulemaking.
``(b) Health Benefit Options Under an Association Health Plan.--
``(1) Examples of types of coverage.--The health benefits
coverage made available through an association health plan may
include, but is not limited to, any of the following if it
meets the other applicable requirements of this title:
``(A) Coverage through a health maintenance
organization.
``(B) Coverage in connection with a preferred
provider organization.
``(C) Coverage in connection with a licensed
provider-sponsored organization.
``(D) Indemnity coverage through an insurance
company.
``(E) Coverage offered in connection with a
contribution into a medical savings account or flexible
spending account.
``(F) Coverage that includes a point-of-service
option.
``(G) Any combination of such types of coverage.
``(2) Health insurance coverage options.--
``(A) In general.--An association health plan shall
include a minimum of 4 health insurance coverage
options. At least 1 option shall be a non network
option. At least 2 options shall meet all applicable
State benefit mandates.
``(B) Model benefits package.--The Secretary in
consultation with the National Association of Insurance
Commissioners shall develop a model benefits package
for health insurance coverage not later than one year
after the date of the enactment of the Consensus Health
Care Access and Choice Act of 2003.
``(C) Exception to general rule.--An association
health plan may offer 2 options that meet the
requirements of the model benefits package in lieu of
the State benefit mandate offerings required under
subparagraph (A).
``(3) Permitting association health plans to adjust
distributions among issuers to reflect relative risk of
enrollees.--Nothing in this section shall be construed as
precluding an association health plan from providing for
adjustments in amounts distributed among the health insurance
issuers offering health benefits coverage through the
association health plan based on factors such as the relative
health care risk of members enrolled under the coverage offered
by the different issuers.
``(4) Construction.--Except as provided in subparagraph
(2), nothing in this part or any provision of State law (as
defined in section 514(c)(1)) shall be construed to preclude an
association health plan, or a health insurance issuer offering
health insurance coverage in connection with an association
health plan, from exercising its sole discretion in selecting
the specific items and services consisting of medical care to
be included as benefits under such plan or coverage, except
(subject to section 514) in the case of any law to the extent
that it (1) prohibits an exclusion of a specific disease from
such coverage, or (2) is not preempted under section 731(a)(1)
with respect to matters governed by section 711 or 712.
``SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR SOLVENCY FOR
PLANS PROVIDING HEALTH BENEFITS IN ADDITION TO HEALTH
INSURANCE COVERAGE.
``(a) In General.--The requirements of this section are met with
respect to an association health plan if--
``(1) the benefits under the plan consist solely of health
insurance coverage; or
``(2) if the plan provides any additional benefit options
which do not consist of health insurance coverage, the plan--
``(A) establishes and maintains reserves with
respect to such additional benefit options, in amounts
recommended by the qualified actuary, consisting of--
``(i) a reserve sufficient for unearned
contributions;
``(ii) a reserve sufficient for benefit
liabilities which have been incurred, which
have not been satisfied, and for which risk of
loss has not yet been transferred, and for
expected administrative costs with respect to
such benefit liabilities;
``(iii) a reserve sufficient for any other
obligations of the plan; and
``(iv) a reserve sufficient for a margin of
error and other fluctuations, taking into
account the specific circumstances of the plan;
and
``(B) establishes and maintains aggregate and
specific excess /stop loss insurance and solvency
indemnification, with respect to such additional
benefit options for which risk of loss has not yet been
transferred, as follows:
``(i) The plan shall secure aggregate
excess /stop loss insurance for the plan with
an attachment point which is not greater than
125 percent of expected gross annual claims.
The applicable authority may by regulation,
through negotiated rulemaking, provide for
upward adjustments in the amount of such
percentage in specified circumstances in which
the plan specifically provides for and
maintains reserves in excess of the amounts
required under subparagraph (A).
``(ii) The plan shall secure specific
excess /stop loss insurance for the plan with
an attachment point which is at least equal to
an amount recommended by the plan's qualified
actuary (but not more than $175,000). The
applicable authority may by regulation, through
negotiated rulemaking, provide for adjustments
in the amount of such insurance in specified
circumstances in which the plan specifically
provides for and maintains reserves in excess
of the amounts required under subparagraph (A).
``(iii) The plan shall secure
indemnification insurance for any claims which
the plan is unable to satisfy by reason of a
plan termination.
Any regulations prescribed by the applicable authority pursuant to
clause (i) or (ii) of subparagraph (B) may allow for such adjustments
in the required levels of excess /stop loss insurance as the qualified
actuary may recommend, taking into account the specific circumstances
of the plan.
``(b) Minimum Surplus in Addition to Claims Reserves.--In the case
of any association health plan described in subsection (a)(2), the
requirements of this subsection are met if the plan establishes and
maintains surplus in an amount at least equal to--
``(1) $500,000, or
``(2) such greater amount (but not greater than $2,000,000)
as may be set forth in regulations prescribed by the applicable
authority through negotiated rulemaking, based on the level of
aggregate and specific excess /stop loss insurance provided
with respect to such plan.
``(c) Additional Requirements.--In the case of any association
health plan described in subsection (a)(2), the applicable authority
may provide such additional requirements relating to reserves and
excess /stop loss insurance as the applicable authority considers
appropriate. Such requirements may be provided by regulation, through
negotiated rulemaking, with respect to any such plan or any class of
such plans.
``(d) Adjustments for Excess /stop Loss Insurance.--The applicable
authority may provide for adjustments to the levels of reserves
otherwise required under subsections (a) and (b) with respect to any
plan or class of plans to take into account excess /stop loss insurance
provided with respect to such plan or plans.
``(e) Alternative Means of Compliance.--The applicable authority
may permit an association health plan described in subsection (a)(2) to
substitute, for all or part of the requirements of this section (except
subsection (a)(2)(B)(iii)), such security, guarantee, hold-harmless
arrangement, or other financial arrangement as the applicable authority
determines to be adequate to enable the plan to fully meet all its
financial obligations on a timely basis and is otherwise no less
protective of the interests of participants and beneficiaries than the
requirements for which it is substituted. The applicable authority may
take into account, for purposes of this subsection, evidence provided
by the plan or sponsor which demonstrates an assumption of liability
with respect to the plan. Such evidence may be in the form of a
contract of indemnification, lien, bonding, insurance, letter of
credit, recourse under applicable terms of the plan in the form of
assessments of participating employers, security, or other financial
arrangement.
``(f) Measures to Ensure Continued Payment of Benefits by Certain
Plans in Distress.--
``(1) Payments by certain plans to association health plan
fund.--
``(A) In general.--In the case of an association
health plan described in subsection (a)(2), the
requirements of this subsection are met if the plan
makes payments into the Association Health Plan Fund
under this subparagraph when they are due. Such
payments shall consist of annual payments in the amount
of $5,000, and, in addition to such annual payments,
such supplemental payments as the Secretary may
determine to be necessary under paragraph (2). Payments
under this paragraph are payable to the Fund at the
time determined by the Secretary. Initial payments are
due in advance of certification under this part.
Payments shall continue to accrue until a plan's assets
are distributed pursuant to a termination procedure.
``(B) Penalties for failure to make payments.--If
any payment is not made by a plan when it is due, a
late payment charge of not more than 100 percent of the
payment which was not timely paid shall be payable by
the plan to the Fund.
``(C) Continued duty of the secretary.--The
Secretary shall not cease to carry out the provisions
of paragraph (2) on account of the failure of a plan to
pay any payment when due.
``(2) Payments by secretary to continue excess /stop loss
insurance coverage and indemnification insurance coverage for
certain plans.--In any case in which the applicable authority
determines that there is, or that there is reason to believe
that there will be: (A) a failure to take necessary corrective
actions under section 809(a) with respect to an association
health plan described in subsection (a)(2); or (B) a
termination of such a plan under section 809(b) or 810(b)(8)
(and, if the applicable authority is not the Secretary,
certifies such determination to the Secretary), the Secretary
shall determine the amounts necessary to make payments to an
insurer (designated by the Secretary) to maintain in force
excess /stop loss insurance coverage or indemnification
insurance coverage for such plan, if the Secretary determines
that there is a reasonable expectation that, without such
payments, claims would not be satisfied by reason of
termination of such coverage. The Secretary shall, to the
extent provided in advance in appropriation Acts, pay such
amounts so determined to the insurer designated by the
Secretary.
``(3) Association health plan fund.--
``(A) In general.--There is established on the
books of the Treasury a fund to be known as the
`Association Health Plan Fund'. The Fund shall be
available for making payments pursuant to paragraph
(2). The Fund shall be credited with payments received
pursuant to paragraph (1)(A), penalties received
pursuant to paragraph (1)(B); and earnings on
investments of amounts of the Fund under subparagraph
(B).
``(B) Investment.--Whenever the Secretary
determines that the moneys of the fund are in excess of
current needs, the Secretary may request the investment
of such amounts as the Secretary determines advisable
by the Secretary of the Treasury in obligations issued
or guaranteed by the United States.
``(g) Excess /stop Loss Insurance.--For purposes of this section--
``(1) Aggregate excess /stop loss insurance.--The term
`aggregate excess /stop loss insurance' means, in connection
with an association health plan, a contract--
``(A) under which an insurer (meeting such minimum
standards as the applicable authority may prescribe by
regulation through negotiated rulemaking) provides for
payment to the plan with respect to aggregate claims
under the plan in excess of an amount or amounts
specified in such contract;
``(B) which is guaranteed renewable; and
``(C) which allows for payment of premiums by any
third party on behalf of the insured plan.
``(2) Specific excess /stop loss insurance.--The term
`specific excess /stop loss insurance' means, in connection
with an association health plan, a contract--
``(A) under which an insurer (meeting such minimum
standards as the applicable authority may prescribe by
regulation through negotiated rulemaking) provides for
payment to the plan with respect to claims under the
plan in connection with a covered individual in excess
of an amount or amounts specified in such contract in
connection with such covered individual;
``(B) which is guaranteed renewable; and
``(C) which allows for payment of premiums by any
third party on behalf of the insured plan.
``(h) Indemnification Insurance.--For purposes of this section, the
term `indemnification insurance' means, in connection with an
association health plan, a contract--
``(1) under which an insurer (meeting such minimum
standards as the applicable authority may prescribe through
negotiated rulemaking) provides for payment to the plan with
respect to claims under the plan which the plan is unable to
satisfy by reason of a termination pursuant to section 809(b)
(relating to mandatory termination);
``(2) which is guaranteed renewable and noncancellable for
any reason (except as the applicable authority may prescribe by
regulation through negotiated rulemaking); and
``(3) which allows for payment of premiums by any third
party on behalf of the insured plan.
``(i) Reserves.--For purposes of this section, the term `reserves'
means, in connection with an association health plan, plan assets which
meet the fiduciary standards under part 4 and such additional
requirements regarding liquidity as the applicable authority may
prescribe through negotiated rulemaking.
``(j) Solvency Standards Working Group.--
``(1) In general.--Within 90 days after the date of the
enactment of the Small Business Access and Choice for
Entrepreneurs Act of 2005, the applicable authority shall
establish a Solvency Standards Working Group. In prescribing
the initial regulations under this section, the applicable
authority shall take into account the recommendations of such
Working Group.
``(2) Membership.--The Working Group shall consist of not
more than 15 members appointed by the applicable authority. The
applicable authority shall include among persons invited to
membership on the Working Group at least one of each of the
following:
``(A) a representative of the National Association
of Insurance Commissioners;
``(B) a representative of the American Academy of
Actuaries;
``(C) a representative of the State governments, or
their interests;
``(D) a representative of existing self-insured
arrangements, or their interests;
``(E) a representative of associations of the type
referred to in section 801(b)(1), or their interests;
and
``(F) a representative of multiemployer plans that
are group health plans, or their interests.
``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED REQUIREMENTS.
``(a) Filing Fee.--Under the procedure prescribed pursuant to
section 802(a), an association health plan shall pay to the applicable
authority at the time of filing an application for certification under
this part a filing fee in the amount of $5,000, which shall be
available in the case of the Secretary, to the extent provided in
appropriation Acts, for the sole purpose of administering the
certification procedures applicable with respect to association health
plans.
``(b) Information to Be Included in Application for
Certification.--An application for certification under this part meets
the requirements of this section only if it includes, in a manner and
form which shall be prescribed by the applicable authority through
negotiated rulemaking, at least the following information:
``(1) Identifying information.--The names and addresses
of--
``(A) the sponsor; and
``(B) the members of the board of trustees of the
plan.
``(2) States in which plan intends to do business.--The
States in which participants and beneficiaries under the plan
are to be located and the number of them expected to be located
in each such State.
``(3) Bonding requirements.--Evidence provided by the board
of trustees that the bonding requirements of section 412 will
be met as of the date of the application or (if later)
commencement of operations.
``(4) Plan documents.--A copy of the documents governing
the plan (including any bylaws and trust agreements), the
summary plan description, and other material describing the
benefits that will be provided to participants and
beneficiaries under the plan.
``(5) Agreements with service providers.--A copy of any
agreements between the plan and contract administrators and
other service providers.
``(6) Funding report.--In the case of association health
plans providing benefits options in addition to health
insurance coverage, a report setting forth information with
respect to such additional benefit options determined as of a
date within the 120-day period ending with the date of the
application, including the following:
``(A) Reserves.--A statement, certified by the
board of trustees of the plan, and a statement of
actuarial opinion, signed by a qualified actuary, that
all applicable requirements of section 806 are or will
be met in accordance with regulations which the
applicable authority shall prescribe through negotiated
rulemaking.
``(B) Adequacy of contribution rates.--A statement
of actuarial opinion, signed by a qualified actuary,
which sets forth a description of the extent to which
contribution rates are adequate to provide for the
payment of all obligations and the maintenance of
required reserves under the plan for the 12-month
period beginning with such date within such 120-day
period, taking into account the expected coverage and
experience of the plan. If the contribution rates are
not fully adequate, the statement of actuarial opinion
shall indicate the extent to which the rates are
inadequate and the changes needed to ensure adequacy.
``(C) Current and projected value of assets and
liabilities.--A statement of actuarial opinion signed
by a qualified actuary, which sets forth the current
value of the assets and liabilities accumulated under
the plan and a projection of the assets, liabilities,
income, and expenses of the plan for the 12-month
period referred to in subparagraph (B). The income
statement shall identify separately the plan's
administrative expenses and claims.
``(D) Costs of coverage to be charged and other
expenses.--A statement of the costs of coverage to be
charged, including an itemization of amounts for
administration, reserves, and other expenses associated
with the operation of the plan.
``(E) Other information.--Any other information as
may be determined by the applicable authority, by
regulation through negotiated rulemaking, as necessary
to carry out the purposes of this part.
``(c) Filing Notice of Certification With States.--A certification
granted under this part to an association health plan shall not be
effective unless written notice of such certification is filed with the
applicable State authority of each State in which at least 25 percent
of the participants and beneficiaries under the plan are located. For
purposes of this subsection, an individual shall be considered to be
located in the State in which a known address of such individual is
located or in which such individual is employed.
``(d) Notice of Material Changes.--In the case of any association
health plan certified under this part, descriptions of material changes
in any information which was required to be submitted with the
application for the certification under this part shall be filed in
such form and manner as shall be prescribed by the applicable authority
by regulation through negotiated rulemaking. The applicable authority
may require by regulation, through negotiated rulemaking, prior notice
of material changes with respect to specified matters which might serve
as the basis for suspension or revocation of the certification.
``(e) Reporting Requirements for Certain Association Health
Plans.--An association health plan certified under this part which
provides benefit options in addition to health insurance coverage for
such plan year shall meet the requirements of section 103 by filing an
annual report under such section which shall include information
described in subsection (b)(6) with respect to the plan year and,
notwithstanding section 104(a)(1)(A), shall be filed with the
applicable authority not later than 90 days after the close of the plan
year (or on such later date as may be prescribed by the applicable
authority). The applicable authority may require by regulation through
negotiated rulemaking such interim reports as it considers appropriate.
``(f) Engagement of Qualified Actuary.--The board of trustees of
each association health plan which provides benefits options in
addition to health insurance coverage and which is applying for
certification under this part or is certified under this part shall
engage, on behalf of all participants and beneficiaries, a qualified
actuary who shall be responsible for the preparation of the materials
comprising information necessary to be submitted by a qualified actuary
under this part. The qualified actuary shall utilize such assumptions
and techniques as are necessary to enable such actuary to form an
opinion as to whether the contents of the matters reported under this
part--
``(1) are in the aggregate reasonably related to the
experience of the plan and to reasonable expectations; and
``(2) represent such actuary's best estimate of anticipated
experience under the plan.
The opinion by the qualified actuary shall be made with respect to, and
shall be made a part of, the annual report.
``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.
``Except as provided in section 809(b), an association health plan
which is or has been certified under this part may terminate (upon or
at any time after cessation of accruals in benefit liabilities) only if
the board of trustees--
``(1) not less than 60 days before the proposed termination
date, provides to the participants and beneficiaries a written
notice of intent to terminate stating that such termination is
intended and the proposed termination date;
``(2) develops a plan for winding up the affairs of the
plan in connection with such termination in a manner which will
result in timely payment of all benefits for which the plan is
obligated; and
``(3) submits such plan in writing to the applicable
authority.
Actions required under this section shall be taken in such form and
manner as may be prescribed by the applicable authority by regulation
through negotiated rulemaking.
``SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.
``(a) Actions to Avoid Depletion of Reserves.--An association
health plan which is certified under this part and which provides
benefits other than health insurance coverage shall continue to meet
the requirements of section 806, irrespective of whether such
certification continues in effect. The board of trustees of such plan
shall determine quarterly whether the requirements of section 806 are
met. In any case in which the board determines that there is reason to
believe that there is or will be a failure to meet such requirements,
or the applicable authority makes such a determination and so notifies
the board, the board shall immediately notify the qualified actuary
engaged by the plan, and such actuary shall, not later than the end of
the next following month, make such recommendations to the board for
corrective action as the actuary determines necessary to ensure
compliance with section 806. Not later than 30 days after receiving
from the actuary recommendations for corrective actions, the board
shall notify the applicable authority (in such form and manner as the
applicable authority may prescribe by regulation through negotiated
rulemaking) of such recommendations of the actuary for corrective
action, together with a description of the actions (if any) that the
board has taken or plans to take in response to such recommendations.
The board shall thereafter report to the applicable authority, in such
form and frequency as the applicable authority may specify to the
board, regarding corrective action taken by the board until the
requirements of section 806 are met.
``(b) Mandatory Termination.--In any case in which--
``(1) the applicable authority has been notified under
subsection (a) of a failure of an association health plan which
is or has been certified under this part and is described in
section 806(a)(2) to meet the requirements of section 806 and
has not been notified by the board of trustees of the plan that
corrective action has restored compliance with such
requirements; and
``(2) the applicable authority determines that there is a
reasonable expectation that the plan will continue to fail to
meet the requirements of section 806,
the board of trustees of the plan shall, at the direction of the
applicable authority, terminate the plan and, in the course of the
termination, take such actions as the applicable authority may require,
including satisfying any claims referred to in section
806(a)(2)(B)(iii) and recovering for the plan any liability under
subsection (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure
that the affairs of the plan will be, to the maximum extent possible,
wound up in a manner which will result in timely provision of all
benefits for which the plan is obligated.
``SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT ASSOCIATION
HEALTH PLANS PROVIDING HEALTH BENEFITS IN ADDITION TO
HEALTH INSURANCE COVERAGE.
``(a) Appointment of Secretary as Trustee for Insolvent Plans.--
Whenever the Secretary determines that an association health plan which
is or has been certified under this part and which is described in
section 806(a)(2) will be unable to provide benefits when due or is
otherwise in a financially hazardous condition, as shall be defined by
the Secretary by regulation through negotiated rulemaking, the
Secretary shall, upon notice to the plan, apply to the appropriate
United States district court for appointment of the Secretary as
trustee to administer the plan for the duration of the insolvency. The
plan may appear as a party and other interested persons may intervene
in the proceedings at the discretion of the court. The court shall
appoint such Secretary trustee if the court determines that the
trusteeship is necessary to protect the interests of the participants
and beneficiaries or providers of medical care or to avoid any
unreasonable deterioration of the financial condition of the plan. The
trusteeship of such Secretary shall continue until the conditions
described in the first sentence of this subsection are remedied or the
plan is terminated.
``(b) Powers as Trustee.--The Secretary, upon appointment as
trustee under subsection (a), shall have the power--
``(1) to do any act authorized by the plan, this title, or
other applicable provisions of law to be done by the plan
administrator or any trustee of the plan;
``(2) to require the transfer of all (or any part) of the
assets and records of the plan to the Secretary as trustee;
``(3) to invest any assets of the plan which the Secretary
holds in accordance with the provisions of the plan,
regulations prescribed by the Secretary through negotiated
rulemaking, and applicable provisions of law;
``(4) to require the sponsor, the plan administrator, any
participating employer, and any employee organization
representing plan participants to furnish any information with
respect to the plan which the Secretary as trustee may
reasonably need in order to administer the plan;
``(5) to collect for the plan any amounts due the plan and
to recover reasonable expenses of the trusteeship;
``(6) to commence, prosecute, or defend on behalf of the
plan any suit or proceeding involving the plan;
``(7) to issue, publish, or file such notices, statements,
and reports as may be required by the Secretary by regulation
through negotiated rulemaking or required by any order of the
court;
``(8) to terminate the plan (or provide for its termination
accordance with section 809(b)) and liquidate the plan assets,
to restore the plan to the responsibility of the sponsor, or to
continue the trusteeship;
``(9) to provide for the enrollment of plan participants
and beneficiaries under appropriate coverage options; and
``(10) to do such other acts as may be necessary to comply
with this title or any order of the court and to protect the
interests of plan participants and beneficiaries and providers
of medical care.
``(c) Notice of Appointment.--As soon as practicable after the
Secretary's appointment as trustee, the Secretary shall give notice of
such appointment to--
``(1) the sponsor and plan administrator;
``(2) each participant;
``(3) each participating employer; and
``(4) if applicable, each employee organization which, for
purposes of collective bargaining, represents plan
participants.
``(d) Additional Duties.--Except to the extent inconsistent with
the provisions of this title, or as may be otherwise ordered by the
court, the Secretary, upon appointment as trustee under this section,
shall be subject to the same duties as those of a trustee under section
704 of title 11, United States Code, and shall have the duties of a
fiduciary for purposes of this title.
``(e) Other Proceedings.--An application by the Secretary under
this subsection may be filed notwithstanding the pendency in the same
or any other court of any bankruptcy, mortgage foreclosure, or equity
receivership proceeding, or any proceeding to reorganize, conserve, or
liquidate such plan or its property, or any proceeding to enforce a
lien against property of the plan.
``(f) Jurisdiction of Court.--
``(1) In general.--Upon the filing of an application for
the appointment as trustee or the issuance of a decree under
this section, the court to which the application is made shall
have exclusive jurisdiction of the plan involved and its
property wherever located with the powers, to the extent
consistent with the purposes of this section, of a court of the
United States having jurisdiction over cases under chapter 11
of title 11, United States Code. Pending an adjudication under
this section such court shall stay, and upon appointment by it
of the Secretary as trustee, such court shall continue the stay
of, any pending mortgage foreclosure, equity receivership, or
other proceeding to reorganize, conserve, or liquidate the
plan, the sponsor, or property of such plan or sponsor, and any
other suit against any receiver, conservator, or trustee of the
plan, the sponsor, or property of the plan or sponsor. Pending
such adjudication and upon the appointment by it of the
Secretary as trustee, the court may stay any proceeding to
enforce a lien against property of the plan or the sponsor or
any other suit against the plan or the sponsor.
``(2) Venue.--An action under this section may be brought
in the judicial district where the sponsor or the plan
administrator resides or does business or where any asset of
the plan is situated. A district court in which such action is
brought may issue process with respect to such action in any
other judicial district.
``(g) Personnel.--In accordance with regulations which shall be
prescribed by the Secretary through negotiated rulemaking, the
Secretary shall appoint, retain, and compensate accountants, actuaries,
and other professional service personnel as may be necessary in
connection with the Secretary's service as trustee under this section.
``SEC. 811. STATE ASSESSMENT AUTHORITY.
``(a) In General.--Notwithstanding section 514, a State may impose
by law a contribution tax on an association health plan described in
section 806(a)(2), if the plan commenced operations in such State after
the date of the enactment of the Small Business Access and Choice for
Entrepreneurs Act of 2005.
``(b) Contribution Tax.--For purposes of this section, the term
`contribution tax' imposed by a State on an association health plan
means any tax imposed by such State if--
``(1) such tax is computed by applying a rate to the amount
of premiums or contributions, with respect to individuals
covered under the plan who are residents of such State, which
are received by the plan from participating employers located
in such State or from such individuals;
``(2) the rate of such tax does not exceed the rate of any
tax imposed by such State on premiums or contributions received
by insurers or health maintenance organizations for health
insurance coverage offered in such State in connection with a
group health plan;
``(3) such tax is otherwise nondiscriminatory; and
``(4) the amount of any such tax assessed on the plan is
reduced by the amount of any tax or assessment otherwise
imposed by the State on premiums, contributions, or both
received by insurers or health maintenance organizations for
health insurance coverage, aggregate excess /stop loss
insurance (as defined in section 806(g)(1)), specific excess /
stop loss insurance (as defined in section 806(g)(2)), other
insurance related to the provision of medical care under the
plan, or any combination thereof provided by such insurers or
health maintenance organizations in such State in connection
with such plan.
``SEC. 812. SPECIAL RULES FOR CHURCH PLANS.
``(a) Election for Church Plans.--Notwithstanding section 4(b)(2),
if a church, a convention or association of churches, or an
organization described in section 3(33)(C)(i) maintains a church plan
which is a group health plan (as defined in section 733(a)(1)), and
such church, convention, association, or organization makes an election
with respect to such plan under this subsection (in such form and
manner as the Secretary may by regulation prescribe), then the
provisions of this section shall apply to such plan, with respect to
benefits provided under such plan consisting of medical care, as if
section 4(b)(2) did not contain an exclusion for church plans. Nothing
in this subsection shall be construed to render any other section of
this title applicable to church plans, except to the extent that such
other section is incorporated by reference in this section.
``(b) Effect of Election.--
``(1) Preemption of state insurance laws regulating covered
church plans.--Subject to paragraphs (2) and (3), this section
shall supersede any and all State laws which regulate insurance
insofar as they may now or hereafter regulate church plans to
which this section applies or trusts established under such
church plans.
``(2) General state insurance regulation unaffected.--
``(A) In general.--Except as provided in
subparagraph (B) and paragraph (3), nothing in this
section shall be construed to exempt or relieve any
person from any provision of State law which regulates
insurance.
``(B) Church plans not to be deemed insurance
companies or insurers.--Neither a church plan to which
this section applies, nor any trust established under
such a church plan, shall be deemed to be an insurance
company or other insurer or to be engaged in the
business of insurance for purposes of any State law
purporting to regulate insurance companies or insurance
contracts.
``(3) Preemption of certain state laws relating to premium
rate regulation and benefit mandates.--The provisions of
subsections (a)(2)(B) and (b) of section 805 shall apply with
respect to a church plan to which this section applies in the
same manner and to the same extent as such provisions apply
with respect to association health plans.
``(4) Definitions.--For purposes of this subsection--
``(A) State law.--The term `State law' includes all
laws, decisions, rules, regulations, or other State
action having the effect of law, of any State. A law of
the United States applicable only to the District of
Columbia shall be treated as a State law rather than a
law of the United States.
``(B) State.--The term `State' includes a State,
any political subdivision thereof, or any agency or
instrumentality of either, which purports to regulate,
directly or indirectly, the terms and conditions of
church plans covered by this section.
``(c) Requirements for Covered Church Plans.--
``(1) Fiduciary rules and exclusive purpose.--A fiduciary
shall discharge his duties with respect to a church plan to
which this section applies--
``(A) for the exclusive purpose of:
``(i) providing benefits to participants
and their beneficiaries; and
``(ii) defraying reasonable expenses of
administering the plan;
``(B) with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a
like character and with like aims; and
``(C) in accordance with the documents and
instruments governing the plan.
The requirements of this paragraph shall not be treated as not
satisfied solely because the plan assets are commingled with
other church assets, to the extent that such plan assets are
separately accounted for.
``(2) Claims procedure.--In accordance with regulations of
the Secretary, every church plan to which this section applies
shall--
``(A) provide adequate notice in writing to any
participant or beneficiary whose claim for benefits
under the plan has been denied, setting forth the
specific reasons for such denial, written in a manner
calculated to be understood by the participant;
``(B) afford a reasonable opportunity to any
participant whose claim for benefits has been denied
for a full and fair review by the appropriate fiduciary
of the decision denying the claim; and
``(C) provide a written statement to each
participant describing the procedures established
pursuant to this paragraph.
``(3) Annual statements.--In accordance with regulations of
the Secretary, every church plan to which this section applies
shall file with the Secretary an annual statement--
``(A) stating the names and addresses of the plan
and of the church, convention, or association
maintaining the plan (and its principal place of
business);
``(B) certifying that it is a church plan to which
this section applies and that it complies with the
requirements of paragraphs (1) and (2);
``(C) identifying the States in which participants
and beneficiaries under the plan are or likely will be
located during the 1-year period covered by the
statement; and
``(D) containing a copy of a statement of actuarial
opinion signed by a qualified actuary that the plan
maintains capital, reserves, insurance, other financial
arrangements, or any combination thereof adequate to
enable the plan to fully meet all of its financial
obligations on a timely basis.
``(4) Disclosure.--At the time that the annual statement is
filed by a church plan with the Secretary pursuant to paragraph
(3), a copy of such statement shall be made available by the
Secretary to the State insurance commissioner (or similar
official) of any State. The name of each church plan and
sponsoring organization filing an annual statement in
compliance with paragraph (3) shall be published annually in
the Federal Register.
``(d) Enforcement.--The Secretary may enforce the provisions of
this section in a manner consistent with section 502, to the extent
applicable with respect to actions under section 502(a)(5), and with
section 3(33)(D), except that, other than for the purpose of seeking a
temporary restraining order, a civil action may be brought with respect
to the plan's failure to meet any requirement of this section only if
the plan fails to correct its failure within the correction period
described in section 3(33)(D). The other provisions of part 5 (except
sections 501(a), 503, 512, 514, and 515) shall apply with respect to
the enforcement and administration of this section.
``(e) Definitions and Other Rules.--For purposes of this section--
``(1) In general.--Except as otherwise provided in this
section, any term used in this section which is defined in any
provision of this title shall have the definition provided such
term by such provision.
``(2) Seminary students.--Seminary students who are
enrolled in an institution of higher learning described in
section 3(33)(C)(iv) and who are treated as participants under
the terms of a church plan to which this section applies shall
be deemed to be employees as defined in section 3(6) if the
number of such students constitutes an insignificant portion of
the total number of individuals who are treated as participants
under the terms of the plan.
``SEC. 813. DEFINITIONS AND RULES OF CONSTRUCTION.
``(a) Definitions.--For purposes of this part--
``(1) Group health plan.--The term `group health plan' has
the meaning provided in section 733(a)(1) (after applying
subsection (b) of this section).
``(2) Medical care.--The term `medical care' has the
meaning provided in section 733(a)(2).
``(3) Health insurance coverage.--The term `health
insurance coverage' has the meaning provided in section
733(b)(1).
``(4) Health insurance issuer.--The term `health insurance
issuer' has the meaning provided in section 733(b)(2).
``(5) Applicable authority.--
``(A) In general.--Except as provided in
subparagraph (B), the term `applicable authority'
means, in connection with an association health plan--
``(i) the State recognized pursuant to
subsection (c) of section 506 as the State to
which authority has been delegated in
connection with such plan; or
``(ii) if there is no State referred to in
clause (i), the Secretary.
``(B) Exceptions.--
``(i) Joint authorities.--Where such term
appears in section 808(3), section 807(e) (in
the first instance), section 809(a) (in the
second instance), section 809(a) (in the fourth
instance), and section 809(b)(1), such term
means, in connection with an association health
plan, the Secretary and the State referred to
in subparagraph (A)(i) (if any) in connection
with such plan.
``(ii) Regulatory authorities.--Where such
term appears in section 802(a) (in the first
instance), section 802(d), section 802(e),
section 803(d), section 805(a)(5), section
806(a)(2), section 806(b), section 806(c),
section 806(d), paragraphs (1)(A) and (2)(A) of
section 806(g), section 806(h), section 806(i),
section 806(j), section 807(a) (in the second
instance), section 807(b), section 807(d),
section 807(e) (in the second instance),
section 808 (in the matter after paragraph
(3)), and section 809(a) (in the third
instance), such term means, in connection with
an association health plan, the Secretary.
``(6) Health status-related factor.--The term `health
status-related factor' has the meaning provided in section
733(d)(2).
``(7) Individual market.--
``(A) In general.--The term `individual market'
means the market for health insurance coverage offered
to individuals other than in connection with a group
health plan.
``(B) Treatment of very small groups.--
``(i) In general.--Subject to clause (ii),
such term includes coverage offered in
connection with a group health plan that has
fewer than 2 participants as current employees
or participants described in section 732(d)(3)
on the first day of the plan year.
``(ii) State exception.--Clause (i) shall
not apply in the case of health insurance
coverage offered in a State if such State
regulates the coverage described in such clause
in the same manner and to the same extent as
coverage in the small group market (as defined
in section 2791(e)(5) of the Public Health
Service Act) is regulated by such State.
``(8) Participating employer.--The term `participating
employer' means, in connection with an association health plan,
any employer, if any individual who is an employee of such
employer, a partner in such employer, or a self-employed
individual who is such employer (or any dependent, as defined
under the terms of the plan, of such individual) is or was
covered under such plan in connection with the status of such
individual as such an employee, partner, or self-employed
individual in relation to the plan.
``(9) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or official
or officials designated by the State to enforce the
requirements of title XXVII of the Public Health Service Act
for the State involved with respect to such issuer.
``(10) Qualified actuary.--The term `qualified actuary'
means an individual who is a member of the American Academy of
Actuaries or meets such reasonable standards and qualifications
as the Secretary may provide by regulation through negotiated
rulemaking.
``(11) Affiliated member.--The term `affiliated member'
means, in connection with a sponsor--
``(A) a person who is otherwise eligible to be a
member of the sponsor but who elects an affiliated
status with the sponsor,
``(B) in the case of a sponsor with members which
consist of associations, a person who is a member of
any such association and elects an affiliated status
with the sponsor, or
``(C) in the case of an association health plan in
existence on the date of the enactment of the Small
Business Access and Choice for Entrepreneurs Act of
2005, a person eligible to be a member of the sponsor
or one of its member associations.
``(12) Large employer.--The term `large employer' means, in
connection with a group health plan with respect to a plan
year, an employer who employed an average of at least 51
employees on business days during the preceding calendar year
and who employs at least 2 employees on the first day of the
plan year.
``(13) Small employer.--The term `small employer' means, in
connection with a group health plan with respect to a plan
year, an employer who is not a large employer.
``(b) Rules of Construction.--
``(1) Employers and employees.--For purposes of determining
whether a plan, fund, or program is an employee welfare benefit
plan which is an association health plan, and for purposes of
applying this title in connection with such plan, fund, or
program so determined to be such an employee welfare benefit
plan--
``(A) in the case of a partnership, the term
`employer' (as defined in section (3)(5)) includes the
partnership in relation to the partners, and the term
`employee' (as defined in section (3)(6)) includes any
partner in relation to the partnership; and
``(B) in the case of a self-employed individual,
the term `employer' (as defined in section 3(5)) and
the term `employee' (as defined in section 3(6)) shall
include such individual.
``(2) Plans, funds, and programs treated as employee
welfare benefit plans.--In the case of any plan, fund, or
program which was established or is maintained for the purpose
of providing medical care (through the purchase of insurance or
otherwise) for employees (or their dependents) covered
thereunder and which demonstrates to the Secretary that all
requirements for certification under this part would be met
with respect to such plan, fund, or program if such plan, fund,
or program were a group health plan, such plan, fund, or
program shall be treated for purposes of this title as an
employee welfare benefit plan on and after the date of such
demonstration.''.
(b) Conforming Amendments to Preemption Rules.--
(1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is
amended by adding at the end the following new subparagraph:
``(E) The preceding subparagraphs of this paragraph do not apply
with respect to any State law in the case of an association health plan
which is certified under part 8.''.
(2) Section 514 of such Act (29 U.S.C. 1144) is amended--
(A) in subsection (b)(4), by striking ``Subsection
(a)'' and inserting ``Subsections (a) and (d)'';
(B) in subsection (b)(5), by striking ``subsection
(a)'' in subparagraph (A) and inserting ``subsection
(a) of this section and subsections (a)(2)(B) and (b)
of section 805'', and by striking ``subsection (a)'' in
subparagraph (B) and inserting ``subsection (a) of this
section or subsection (a)(2)(B) or (b) of section
805'';
(C) by redesignating subsection (d) as subsection
(e); and
(D) by inserting after subsection (c) the following
new subsection:
``(d)(1) Except as provided in subsection (b)(4), the provisions of
this title shall supersede any and all State laws insofar as they may
now or hereafter preclude, or have the effect of precluding, a health
insurance issuer from offering health insurance coverage in connection
with an association health plan which is certified under part 8.
``(2) Except as provided in paragraphs (4) and (5) of subsection
(b) of this section--
``(A) In any case in which health insurance coverage of any
policy type is offered under an association health plan
certified under part 8 to a participating employer operating in
such State, the provisions of this title shall supersede any
and all laws of such State insofar as they may preclude a
health insurance issuer from offering health insurance coverage
of the same policy type to other employers operating in the
State which are eligible for coverage under such association
health plan, whether or not such other employers are
participating employers in such plan.
``(B) In any case in which health insurance coverage of any
policy type is offered under an association health plan in a
State and the filing, with the applicable State authority, of
the policy form in connection with such policy type is approved
by such State authority, the provisions of this title shall
supersede any and all laws of any other State in which health
insurance coverage of such type is offered, insofar as they may
preclude, upon the filing in the same form and manner of such
policy form with the applicable State authority in such other
State, the approval of the filing in such other State.
``(3) For additional provisions relating to association health
plans, see subsections (a)(2)(B) and (b) of section 805.
``(4) For purposes of this subsection, the term `association health
plan' has the meaning provided in section 801(a), and the terms `health
insurance coverage', `participating employer', and `health insurance
issuer' have the meanings provided such terms in section 811,
respectively.''.
(3) Section 514(b)(6)(A) of such Act (29 U.S.C.
1144(b)(6)(A)) is amended--
(A) in clause (i)(II), by striking ``and'' at the
end;
(B) in clause (ii), by inserting ``and which does
not provide medical care (within the meaning of section
733(a)(2)),'' after ``arrangement,'', and by striking
``title.'' and inserting ``title, and''; and
(C) by adding at the end the following new clause:
``(iii) subject to subparagraph (E), in the case of any
other employee welfare benefit plan which is a multiple
employer welfare arrangement and which provides medical care
(within the meaning of section 733(a)(2)), any law of any State
which regulates insurance may apply.''.
(4) Section 514(e) of such Act (as redesignated by
paragraph (2)(C)) is amended--
(A) by striking ``Nothing'' and inserting ``(1)
Except as provided in paragraph (2), nothing''; and
(B) by adding at the end the following new
paragraph:
``(2) Nothing in any other provision of law enacted on or after the
date of the enactment of the Small Business Access and Choice for
Entrepreneurs Act of 2005 shall be construed to alter, amend, modify,
invalidate, impair, or supersede any provision of this title, except by
specific cross-reference to the affected section.''.
(c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C.
102(16)(B)) is amended by adding at the end the following new sentence:
``Such term also includes a person serving as the sponsor of an
association health plan under part 8.''.
(d) Disclosure of Solvency Protections Related to Self-Insured and
Fully Insured Options Under Association Health Plans.--Section 102(b)
of such Act (29 U.S.C. 102(b)) is amended by adding at the end the
following: ``An association health plan shall include in its summary
plan description, in connection with each benefit option, a description
of the form of solvency or guarantee fund protection secured pursuant
to this Act or applicable State law, if any.''.
(e) Savings Clause.--Section 731(c) of such Act is amended by
inserting ``or part 8'' after ``this part''.
(f) Report to the Congress Regarding Certification of Self-Insured
Association Health Plans.--Not later than January 1, 2010, the
Secretary of Labor shall report to the Committee on Education and the
Workforce of the House of Representatives and the Committee on Health,
Education, Labor, and Pensions of the Senate the effect association
health plans have had, if any, on reducing the number of uninsured
individuals.
(g) Clerical Amendment.--The table of contents in section 1 of the
Employee Retirement Income Security Act of 1974 is amended by inserting
after the item relating to section 734 the following new items:
``Part 8--Rules governing association health plans
``801. Association health plans.
``802. Certification of association health plans.
``803. Requirements relating to sponsors and boards of trustees.
``804. Participation and coverage requirements.
``805. Other requirements relating to plan documents, contribution
rates, and benefit options.
``806. Maintenance of reserves and provisions for solvency for plans
providing health benefits in addition to
health insurance coverage.
``807. Requirements for application and related requirements.
``808. Notice requirements for voluntary termination.
``809. Corrective actions and mandatory termination.
``810. Trusteeship by the Secretary of insolvent association health
plans providing health benefits in addition
to health insurance coverage.
``811. State assessment authority.
``812. Special rules for church plans.
``813. Definitions and rules of construction.''.
SEC. 403. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER ARRANGEMENTS.
Section 3(40)(B) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1002(40)(B)) is amended--
(1) in clause (i), by inserting ``for any plan year of any
such plan, or any fiscal year of any such other arrangement,''
after ``single employer'', and by inserting ``during such year
or at any time during the preceding 1-year period'' after
``control group'';
(2) in clause (iii)--
(A) by striking ``common control shall not be based
on an interest of less than 25 percent'' and inserting
``an interest of greater than 25 percent may not be
required as the minimum interest necessary for common
control''; and
(B) by striking ``similar to'' and inserting
``consistent and coextensive with'';
(3) by redesignating clauses (iv) and (v) as clauses (v)
and (vi), respectively; and
(4) by inserting after clause (iii) the following new
clause:
``(iv) in determining, after the application of clause (i),
whether benefits are provided to employees of two or more
employers, the arrangement shall be treated as having only one
participating employer if, after the application of clause (i),
the number of individuals who are employees and former
employees of any one participating employer and who are covered
under the arrangement is greater than 75 percent of the
aggregate number of all individuals who are employees or former
employees of participating employers and who are covered under
the arrangement;''.
SEC. 404. CLARIFICATION OF TREATMENT OF CERTAIN COLLECTIVELY BARGAINED
ARRANGEMENTS.
(a) In General.--Section 3(40)(A)(i) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(40)(A)(i)) is amended to
read as follows:
``(i)(I) under or pursuant to one or more collective
bargaining agreements which are reached pursuant to collective
bargaining described in section 8(d) of the National Labor
Relations Act (29 U.S.C. 158(d)) or paragraph Fourth of section
2 of the Railway Labor Act (45 U.S.C. 152, paragraph Fourth) or
which are reached pursuant to labor-management negotiations
under similar provisions of State public employee relations
laws, and (II) in accordance with subparagraphs (C), (D), and
(E);''.
(b) Limitations.--Section 3(40) of such Act (29 U.S.C. 1002(40)) is
amended by adding at the end the following new subparagraphs:
``(C) For purposes of subparagraph (A)(i)(II), a plan or other
arrangement shall be treated as established or maintained in accordance
with this subparagraph only if the following requirements are met:
``(i) The plan or other arrangement, and the employee
organization or any other entity sponsoring the plan or other
arrangement, do not--
``(I) utilize the services of any licensed
insurance agent or broker for soliciting or enrolling
employers or individuals as participating employers or
covered individuals under the plan or other
arrangement; or
``(II) pay any type of compensation to a person,
other than a full time employee of the employee
organization (or a member of the organization to the
extent provided in regulations prescribed by the
Secretary through negotiated rulemaking), that is
related either to the volume or number of employers or
individuals solicited or enrolled as participating
employers or covered individuals under the plan or
other arrangement, or to the dollar amount or size of
the contributions made by participating employers or
covered individuals to the plan or other arrangement;
except to the extent that the services used by the plan, arrangement,
organization, or other entity consist solely of preparation of
documents necessary for compliance with the reporting and disclosure
requirements of part 1 or administrative, investment, or consulting
services unrelated to solicitation or enrollment of covered
individuals.
``(ii) As of the end of the preceding plan year, the number
of covered individuals under the plan or other arrangement who
are neither--
``(I) employed within a bargaining unit covered by
any of the collective bargaining agreements with a
participating employer (nor covered on the basis of an
individual's employment in such a bargaining unit); nor
``(II) present employees (or former employees who
were covered while employed) of the sponsoring employee
organization, of an employer who is or was a party to
any of the collective bargaining agreements, or of the
plan or other arrangement or a related plan or
arrangement (nor covered on the basis of such present
or former employment);
does not exceed 15 percent of the total number of individuals
who are covered under the plan or arrangement and who are
present or former employees who are or were covered under the
plan or arrangement pursuant to a collective bargaining
agreement with a participating employer. The requirements of
the preceding provisions of this clause shall be treated as
satisfied if, as of the end of the preceding plan year, such
covered individuals are comprised solely of individuals who
were covered individuals under the plan or other arrangement as
of the date of the enactment of the Small Business Access and
Choice for Entrepreneurs Act of 2003 and, as of the end of the
preceding plan year, the number of such covered individuals
does not exceed 25 percent of the total number of present and
former employees enrolled under the plan or other arrangement.
``(iii) The employee organization or other entity
sponsoring the plan or other arrangement certifies to the
Secretary each year, in a form and manner which shall be
prescribed by the Secretary through negotiated rulemaking that
the plan or other arrangement meets the requirements of clauses
(i) and (ii).
``(D) For purposes of subparagraph (A)(i)(II), a plan or
arrangement shall be treated as established or maintained in accordance
with this subparagraph only if--
``(i) all of the benefits provided under the plan or
arrangement consist of health insurance coverage; or
``(ii)(I) the plan or arrangement is a multiemployer plan;
and
``(II) the requirements of clause (B) of the proviso to
clause (5) of section 302(c) of the Labor Management Relations
Act, 1947 (29 U.S.C. 186(c)) are met with respect to such plan
or other arrangement.
``(E) For purposes of subparagraph (A)(i)(II), a plan or
arrangement shall be treated as established or maintained in accordance
with this subparagraph only if--
``(i) the plan or arrangement is in effect as of the date
of the enactment of the Small Business Access and Choice for
Entrepreneurs Act of 2005; or
``(ii) the employee organization or other entity sponsoring
the plan or arrangement--
``(I) has been in existence for at least 3 years;
or
``(II) demonstrates to the satisfaction of the
Secretary that the requirements of subparagraphs (C)
and (D) are met with respect to the plan or other
arrangement.''.
(c) Conforming Amendments to Definitions of Participant and
Beneficiary.--Section 3(7) of such Act (29 U.S.C. 1002(7)) is amended
by adding at the end the following new sentence: ``Such term includes
an individual who is a covered individual described in paragraph
(40)(C)(ii).''.
SEC. 405. ENFORCEMENT PROVISIONS.
(a) Criminal Penalties for Certain Willful Misrepresentations.--
Section 501 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1131) is amended--
(1) by inserting ``(a)'' after ``Sec. 501.''; and
(2) by adding at the end the following new subsection:
``(b) Any person who willfully falsely represents, to any employee,
any employee's beneficiary, any employer, the Secretary, or any State,
a plan or other arrangement established or maintained for the purpose
of offering or providing any benefit described in section 3(1) to
employees or their beneficiaries as--
``(1) being an association health plan which has been
certified under part 8;
``(2) having been established or maintained under or
pursuant to one or more collective bargaining agreements which
are reached pursuant to collective bargaining described in
section 8(d) of the National Labor Relations Act (29 U.S.C.
158(d)) or paragraph Fourth of section 2 of the Railway Labor
Act (45 U.S.C. 152, paragraph Fourth) or which are reached
pursuant to labor-management negotiations under similar
provisions of State public employee relations laws; or
``(3) being a plan or arrangement with respect to which the
requirements of subparagraph (C), (D), or (E) of section 3(40)
are met;
shall, upon conviction, be imprisoned not more than 5 years, be fined
under title 18, United States Code, or both.''.
(b) Cease Activities Orders.--Section 502 of such Act (29 U.S.C.
1132) is amended by adding at the end the following new subsection:
``(n)(1) Subject to paragraph (2), upon application by the
Secretary showing the operation, promotion, or marketing of an
association health plan (or similar arrangement providing benefits
consisting of medical care (as defined in section 733(a)(2))) that--
``(A) is not certified under part 8, is subject under
section 514(b)(6) to the insurance laws of any State in which
the plan or arrangement offers or provides benefits, and is not
licensed, registered, or otherwise approved under the insurance
laws of such State; or
``(B) is an association health plan certified under part 8
and is not operating in accordance with the requirements under
part 8 for such certification,
a district court of the United States shall enter an order requiring
that the plan or arrangement cease activities.
``(2) Paragraph (1) shall not apply in the case of an association
health plan or other arrangement if the plan or arrangement shows
that--
``(A) all benefits under it referred to in paragraph (1)
consist of health insurance coverage; and
``(B) with respect to each State in which the plan or
arrangement offers or provides benefits, the plan or
arrangement is operating in accordance with applicable State
laws that are not superseded under section 514.
``(3) The court may grant such additional equitable relief,
including any relief available under this title, as it deems necessary
to protect the interests of the public and of persons having claims for
benefits against the plan.''.
(c) Responsibility for Claims Procedure.--Section 503 of such Act
(29 U.S.C. 1133) is amended--
(1) by inserting ``(a) In General.--'' after ``Sec. 503.'';
and
(2) by adding at the end the following new subsection:
``(b) Association Health Plans.--The terms of each association
health plan which is or has been certified under part 8 shall require
the board of trustees or the named fiduciary (as applicable) to ensure
that the requirements of this section are met in connection with claims
filed under the plan.''.
SEC. 406. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Section 506 of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1136) is amended by adding at the end the following new
subsection:
``(d) Responsibility of States With Respect to Association Health
Plans.--
``(1) Agreements with states.--A State may enter into an
agreement with the Secretary for delegation to the State of
some or all of--
``(A) the Secretary's authority under sections 502
and 504 to enforce the requirements for certification
under part 8;
``(B) the Secretary's authority to certify
association health plans under part 8 in accordance
with regulations of the Secretary applicable to
certification under part 8; or
``(C) any combination of the Secretary's authority
authorized to be delegated under subparagraphs (A) and
(B).
``(2) Delegations.--Any department, agency, or
instrumentality of a State to which authority is delegated
pursuant to an agreement entered into under this paragraph may,
if authorized under State law and to the extent consistent with
such agreement, exercise the powers of the Secretary under this
title which relate to such authority.
``(3) Recognition of primary domicile state.--In entering
into any agreement with a State under subparagraph (A), the
Secretary shall ensure that, as a result of such agreement and
all other agreements entered into under subparagraph (A), only
one State will be recognized, with respect to any particular
association health plan, as the State to which all authority
has been delegated pursuant to such agreements in connection
with such plan. In carrying out this paragraph, the Secretary
shall take into account the places of residence of the
participants and beneficiaries under the plan and the State in
which the trust is maintained.''.
SEC. 407. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.
(a) Effective Date.--The amendments made by sections 101, 104, and
105 shall take effect on January 1, 2007. The amendments made by
sections 102 and 103 shall take effect on the date of the enactment of
this Act. The Secretary of Labor shall first issue all regulations
necessary to carry out the amendments made by this subtitle before
January 1, 2007. Such regulations shall be issued through negotiated
rulemaking.
(b) Exception.--Section 801(a)(2) of the Employee Retirement Income
Security Act of 1974 (added by section 101) does not apply in
connection with an association health plan (certified under part 8 of
subtitle B of title I of such Act) existing on the date of the
enactment of this Act, if no benefits provided thereunder as of the
date of the enactment of this Act consist of health insurance coverage
(as defined in section 733(b)(1) of such Act).
(c) Treatment of Certain Existing Health Benefits Programs.--
(1) In general.--In any case in which, as of the date of
the enactment of this Act, an arrangement is maintained in a
State for the purpose of providing benefits consisting of
medical care for the employees and beneficiaries of its
participating employers, at least 200 participating employers
make contributions to such arrangement, such arrangement has
been in existence for at least 10 years, and such arrangement
is licensed under the laws of one or more States to provide
such benefits to its participating employers, upon the filing
with the applicable authority (as defined in section 813(a)(5)
of the Employee Retirement Income Security Act of 1974 (as
amended by this Act)) by the arrangement of an application for
certification of the arrangement under part 8 of subtitle B of
title I of such Act--
(A) such arrangement shall be deemed to be a group
health plan for purposes of title I of such Act;
(B) the requirements of sections 801(a)(1) and
803(a)(1) of the Employee Retirement Income Security
Act of 1974 shall be deemed met with respect to such
arrangement;
(C) the requirements of section 803(b) of such Act
shall be deemed met, if the arrangement is operated by
a board of directors which--
(i) is elected by the participating
employers, with each employer having one vote;
and
(ii) has complete fiscal control over the
arrangement and which is responsible for all
operations of the arrangement;
(D) the requirements of section 804(a) of such Act
shall be deemed met with respect to such arrangement;
and
(E) the arrangement may be certified by any
applicable authority with respect to its operations in
any State only if it operates in such State on the date
of certification.
The provisions of this subsection shall cease to apply with
respect to any such arrangement at such time after the date of
the enactment of this Act as the applicable requirements of
this subsection are not met with respect to such arrangement.
(2) Definitions.--For purposes of this subsection, the
terms ``group health plan'', ``medical care'', and
``participating employer'' shall have the meanings provided in
section 813 of the Employee Retirement Income Security Act of
1974, except that the reference in paragraph (7) of such
section to an ``association health plan'' shall be deemed a
reference to an arrangement referred to in this subsection.
TITLE V--IMPROVEMENT TO ACCESS AND CHOICE OF HEALTH CARE
SEC. 501. REFUNDABLE AND ADVANCEABLE CREDIT FOR HEALTH INSURANCE COSTS.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to refundable credits)
is amended by redesignating section 36 as section 37 and by inserting
after section 35 the following new section:
``SEC. 36. HEALTH INSURANCE COSTS.
``(a) In General.--In the case of an individual, there shall be
allowed as a credit against the tax imposed by this subtitle an amount
equal to the amount paid during the taxable year for qualified health
insurance for coverage of the taxpayer, his spouse, and dependents.
``(b) Limitations.--
``(1) Maximum credit.--
``(A) In general.--The amount allowed as a credit
under subsection (a) to the taxpayer for the taxable
year shall not exceed the sum of the monthly
limitations for months during such taxable year.
``(B) Monthly limitation.--The monthly limitation
for any month is the amount equal to \1/12\ of the
lesser of--
``(i) the product of $1,000 multiplied by
the number of individuals taken into account
under subsection (a) who are covered under
qualified health insurance as of the first day
of such month, or
``(ii) $3,000.
``(2) Employer subsidized coverage.--Subsection (a) shall
not apply to amounts paid for coverage of any individual for
any month for which such individual participates in any
subsidized health plan maintained by any employer of the
taxpayer or of the spouse of the taxpayer. The rule of the last
sentence of section 162(l)(2)(B) shall apply for purposes of
the preceding sentence.
``(c) Qualified Health Insurance.--For purposes of this section--
``(1) In general.--The term `qualified health insurance'
means insurance which constitutes medical care if--
``(A) such insurance meets the requirements of
section 223(c)(2)(A)(ii),
``(B) there is no exclusion from, or limitation on,
coverage for any preexisting medical condition of any
applicant who, on the date the application is made, has
been continuously insured during the 1-year period
ending on the date of the application under--
``(i) qualified health insurance
(determined without regard to this
subparagraph), or
``(ii) a program described in--
``(I) title XVIII or XIX of the
Social Security Act,
``(II) chapter 55 of title 10,
United States Code,
``(III) chapter 17 of title 38,
United States Code,
``(IV) chapter 89 of title 5,
United States Code, or
``(V) the Indian Health Care
Improvement Act, and
``(C) in the case of each applicant who has not
been continuously so insured during the 1-year period
ending on the date the application is made, the
exclusion from, or limitation on, coverage for any
preexisting medical condition does not extend beyond
the period after such date equal to the lesser of--
``(i) the number of months immediately
prior to such date during which the individual
was not so insured since the illness or
condition in question was first diagnosed, or
``(ii) 1 year.
``(2) Exclusion of certain plans.--Such term does not
include--
``(A) insurance if substantially all of its
coverage is coverage described in section 223(c)(1)(B),
``(B) insurance under a program described in
paragraph (1)(B)(ii).
``(3) Transition rule for 2005.--In the case of
applications made during 2005, the requirements of
subparagraphs (C) and (D) of paragraph (1) are met only if the
insurance does not exclude from coverage, or limit coverage
for, any preexisting medical condition of any applicant.
``(d) Special Rules.--
``(1) Coordination with medical deduction, etc.--Any amount
paid by a taxpayer for insurance to which subsection (a)
applies shall not be taken into account in computing the amount
allowable to the taxpayer as a credit under section 35 or as a
deduction under section 162(l) or 213(a).
``(2) Denial of credit to dependents.--No credit shall be
allowed under this section to any individual with respect to
whom a deduction under section 151 is allowable to another
taxpayer for a taxable year beginning in the calendar year in
which such individual's taxable year begins.
``(3) Married couples must file joint return.--
``(A) In general.--If the taxpayer is married at
the close of the taxable year, the credit shall be
allowed under subsection (a) only if the taxpayer and
his spouse file a joint return for the taxable year.
``(B) Marital status; certain married individuals
living apart.--Rules similar to the rules of paragraphs
(3) and (4) of section 21(e) shall apply for purposes
of this paragraph.
``(4) Verification of coverage, etc.--No credit shall be
allowed under this section to any individual unless such
individual's coverage under qualified health insurance, and the
amount paid for such coverage, are verified in such manner as
the Secretary may prescribe.
``(5) Coordination with advance payments of credit.--With
respect to any taxable year, the amount which would (but for
this subsection) be allowed as a credit to the taxpayer under
subsection (a) shall be reduced (but not below zero) by the
aggregate amount paid on behalf of such taxpayer under section
7527A for months beginning in such taxable year.
``(6) Cost-of-living adjustment.--In the case of any
taxable year beginning in a calendar year after 2005, each
dollar amount contained in subsection (b)(1)(B) shall be
increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins by substituting `calendar year
2004' for `calendar year 1992' in subparagraph (B)
thereof.
Any increase determined under the preceding sentence shall be
rounded to the nearest multiple of $10.''.
(b) Advance Payment of Credit.--Chapter 77 of such Code (relating
to miscellaneous provisions) is amended by inserting after section 7527
the following new section:
``SEC. 7527A. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE COSTS.
``(a) General Rule.--The Secretary shall establish a program for
making payments on behalf of individuals to providers of qualified
health insurance (as defined in section 36(c)) for such individuals.
``(b) Limitation on Advance Payments During Any Taxable Year.--The
Secretary may make payments under subsection (a) only to the extent
that the total amount of such payments made on behalf of any individual
during the taxable year does not exceed the amount allowable as a
credit to such individual for such year under section 36 (determined
without regard to subsection (d)(5) thereof).''.
(c) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``or 36'' after ``section
35''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by striking the item relating to section 36 and
inserting the following new items:
``Sec. 36. Health insurance costs.
``Sec. 37. Overpayments of tax.''.
(3) The table of sections for chapter 77 of such Code is
amended by inserting after the item relating to section 7527
the following new item:
``Sec. 7527A. Advance payment of credit for health insurance costs.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2004.
SEC. 502. EXCLUSION FOR EMPLOYER PAYMENTS MADE TO COMPENSATE EMPLOYEES
WHO ELECT NOT TO PARTICIPATE IN EMPLOYER-SUBSIDIZED
HEALTH PLANS.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to items specifically excluded
from gross income) is amended by inserting after section 139A the
following new section:
``SEC. 139B. TREATMENT OF COMPENSATING PAYMENTS MADE FOR EMPLOYEES WHO
ELECT NOT TO PARTICIPATE IN EMPLOYER-SUBSIDIZED HEALTH
PLANS.
``(a) In General.--Gross income of an eligible employee shall not
include the amount of any compensating coverage payment made by an
employer of such employee for such employee's benefit.
``(b) Eligible Employee.--For purposes of this section, the term
`eligible employee' means any employee who is eligible to participate
in any subsidized health plan of an employer for any period and who
elects not to participate in any subsidized health plan of such
employer for such period.
``(c) Compensating Coverage Payment.--For purposes of this section,
the term `compensating coverage payment' means--
``(1) any payment made by the employer for qualified health
insurance specified by the employee (for any period for which
the employee is described in subsection (b)) which covers all
of the individuals who, but for the election referred to in
subsection (b), would be covered under the subsidized health
plan of the employer, and
``(2) any payment made by the employer to any Archer MSA or
health savings account of such employee or spouse for a period
for which the employee is covered by qualified health
insurance.
``(d) Qualified Health Insurance.--For purposes of this section,
the term `qualified health insurance' has the meaning given such term
in section 36(c).
``(e) Employer Participation.--
``(1) In general.--This section shall apply to a
compensating coverage payment made by an employer for an
employee's benefit only if--
``(A) the employer, and all other employers which
are members of any controlled group which includes such
employer, agree to make such payments to all their
eligible employees,
``(B) the amount of such payment is not less than
the employer health plan contribution for such period
with respect to the employee, and
``(C) the employer permits the election referred to
in subsection (b) to be made by employees--
``(i) at the commencement of employment
with the employer, and
``(ii) during open enrollment periods (not
less frequently than annually) of at least 30
days.
``(2) Exception for certain employees.--Paragraph (1) shall
not apply to--
``(A) any employee who is covered under a
subsidized health plan of another employer of such
employee or of an employer of such employee's spouse,
``(B) any employee who normally works less than 25
hours per week,
``(C) any employee who normally works during not
more than 6 months during any year,
``(D) any employee who has not attained age 21, and
``(E) except to the extent provided in regulations,
any employee who is included in a unit of employees
covered by an agreement which the Secretary of Labor
finds to be a collective bargaining agreement between
employee representatives and the employer.
``(3) Controlled groups.--Rules similar to the rules of
subclauses (II) and (III) of paragraph (4)(D)(iii) shall apply
for purposes of paragraph (1)(A).
``(4) Employer health plan contribution.--For purposes of
this section--
``(A) In general.--The term `employer health plan
contribution' means the applicable premium for the
employee reduced by the employee's share of such
premium.
``(B) Applicable premium.--Except as provided in
subparagraph (D), the term `applicable premium' means
an amount which is not less than 98 percent of--
``(i) the applicable premium (as defined in
section 4980B(f)(4)) for the employee, or
``(ii) if an election under subparagraph
(D) is in effect with respect to an employee,
the applicable premium determined under
subparagraph (D).
``(C) Employee's share.--The term `employee's
share' means, with respect to the applicable premium
for any employee, the amount of the cost to the plan
which is paid by the similarly situated beneficiaries
who are taken into account in determining such premium
for such employee.
``(D) Authority to use age, sex, and geography in
determining contribution.--
``(i) In general.--An employer may elect to
determine the applicable premium for an
employee on an actuarial basis taking into
account age, sex, and geography of the employee
and similarly situated beneficiaries.
``(ii) Determination of employee's share.--
In the case of an employer who determines the
applicable premium under clause (i), the
employee's share of such premium shall be the
same percentage of such premium as the
employee's share of the applicable premium
determined without regard to clause (i).
``(iii) Consistency required.--
``(I) In general.--Except as
provided in subclause (III), an
employer may determine the applicable
premium under this subparagraph for any
employee only if such employer, and all
other employers which are members of
any controlled group which includes
such employer, elect to determine the
applicable premium under this
subparagraph for all their employees.
``(II) Controlled group.--All
persons treated as a single employer
under subsection (a) or (b) of section
52 or subsection (m) or (o) of section
414 shall be treated as members of a
controlled group for purposes of
subclause (I).
``(III) Treatment of separate lines
of business.--If an employer is treated
under section 414(r) as operating
separate lines of business during any
taxable year, subclause (I) shall not
apply to employees employed in such
separate lines of business.
``(f) Special Rule for Archer MSAs and Health Savings Account
Contributions.--Sections 220(b)(5) and 223(b)(4) shall not apply to an
employer contribution which is excludable from gross income under
subsection (a).
``(g) Exclusion Applicable in Determining Employment Tax
Liability.--The exclusion under this section shall be treated for
purposes of subtitle C in the same manner as the exclusion under
section 106.''
(b) Employer Health Plan Contribution to Be Reported on W-2.--
Subsection (a) of section 6051 of such Code (relating to receipts to
employees) is amended by striking ``and'' at the end of paragraph (12),
by striking the period at the end of paragraph (13) and inserting a
comma, and by inserting after paragraph (13) the following new
paragraphs:
``(14) the amount of the employer health plan contribution
(as defined in section 139(c)(3)), and
``(15) the amount of compensating coverage payment (as
defined in section 139(c)(1)).''
(c) Clerical Amendment.--The table of sections for such part III is
amended by inserting after the item relating to section 139A the
following new item:
``Sec. 139B. Treatment of compensating payments made for employees who
elect not to participate in employer-
subsidized health plans.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2005.
TITLE VI--PATIENT ACCESS TO INFORMATION
SEC. 601. PATIENT ACCESS TO INFORMATION REGARDING PLAN COVERAGE,
MANAGED CARE PROCEDURES, HEALTH CARE PROVIDERS, AND
QUALITY OF MEDICAL CARE.
(a) In General.--Subpart 2 of part A of title XXVII of the Public
Health Service Act is amended by adding at the end the following new
section:
``SEC. 2707. PATIENT ACCESS TO INFORMATION REGARDING PLAN COVERAGE,
MANAGED CARE PROCEDURES, HEALTH CARE PROVIDERS, AND
QUALITY OF MEDICAL CARE.
``(a) Disclosure Requirement.--Each health insurance issuer
offering health insurance coverage in connection with a group health
plan shall provide the administrator of such plan on a timely basis
with the information necessary to enable the administrator to include
in the summary plan description of the plan required under section 102
of the Employee Retirement Income Security Act of 1974 (or each summary
plan description in any case in which different summary plan
descriptions are appropriate under part 1 of subtitle B of title I of
such Act for different options of coverage) the information required
under subsections (b), (c), (d), and (e)(2)(A). To the extent that any
such issuer provides such information on a timely basis to plan
participants and beneficiaries, the requirements of this subsection
shall be deemed satisfied in the case of such plan with respect to such
information.
``(b) Plan Benefits.--The information required under subsection (a)
includes the following:
``(1) Covered items and services.--
``(A) Categorization of included benefits.--A
description of covered benefits, categorized by--
``(i) types of items and services
(including any special disease management
program); and
``(ii) types of health care professionals
providing such items and services.
``(B) Emergency medical care.--A description of the
extent to which the coverage includes emergency medical
care (including the extent to which the coverage
provides for access to urgent care centers), and any
definitions provided under in connection with such
coverage for the relevant coverage terminology
referring to such care.
``(C) Preventative services.--A description of the
extent to which the coverage includes benefits for
preventative services.
``(D) Drug formularies.--A description of the
extent to which covered benefits are determined by the
use or application of a drug formulary and a summary of
the process for determining what is included in such
formulary.
``(E) COBRA continuation coverage.--A description
of the benefits available under the coverage provided
pursuant to part 6 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974.
``(2) Limitations, exclusions, and restrictions on covered
benefits.--
``(A) Categorization of excluded benefits.--A
description of benefits specifically excluded from
coverage, categorized by types of items and services.
``(B) Utilization review and preauthorization
requirements.--Whether coverage for medical care is
limited or excluded on the basis of utilization review
or preauthorization requirements.
``(C) Lifetime, annual, or other period
limitations.--A description of the circumstances under
which, and the extent to which, coverage is subject to
lifetime, annual, or other period limitations,
categorized by types of benefits.
``(D) Custodial care.--A description of the
circumstances under which, and the extent to which, the
coverage of benefits for custodial care is limited or
excluded, and a statement of the definition used in
connection with such coverage for custodial care.
``(E) Experimental treatments.--Whether coverage
for any medical care is limited or excluded because it
constitutes experimental treatment or technology, and
any definitions provided in connection with such
coverage for the relevant plan terminology referring to
such limited or excluded care.
``(F) Medical appropriateness or necessity.--
Whether coverage for medical care may be limited or
excluded by reason of a failure to meet the plan's
requirements for medical appropriateness or necessity,
and any definitions provided in connection with such
coverage for the relevant coverage terminology
referring to such limited or excluded care.
``(G) Second or subsequent opinions.--A description
of the circumstances under which, and the extent to
which, coverage for second or subsequent opinions is
limited or excluded.
``(H) Specialty care.--A description of the
circumstances under which, and the extent to which,
coverage of benefits for specialty care is conditioned
on referral from a primary care provider.
``(I) Continuity of care.--A description of the
circumstances under which, and the extent to which,
coverage of items and services provided by any health
care professional is limited or excluded by reason of
the departure by the professional from any defined set
of providers.
``(J) Restrictions on coverage of emergency
services.--A description of the circumstances under
which, and the extent to which, the coverage, in
including emergency medical care furnished to a
participant or beneficiary of the plan imposes any
financial responsibility described in subsection (c) on
participants or beneficiaries or limits or conditions
benefits for such care subject to any other term or
condition of such coverage.
``(c) Participant's Financial Responsibilities.--The information
required under subsection (a) includes an explanation of--
``(1) a participant's financial responsibility for payment
of premiums, coinsurance, copayments, deductibles, and any
other charges; and
``(2) the circumstances under which, and the extent to
which, the participant's financial responsibility described in
paragraph (1) may vary, including any distinctions based on
whether a health care provider from whom covered benefits are
obtained is included in a defined set of providers.
``(d) Accountability.--The information required under subsection
(a) includes a description of the legal recourse options available for
participants and beneficiaries under the plan including--
``(1) the preemption that applies under section 514 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1144) to certain actions arising out of the provision of health
benefits;
``(2) the ability of a participant or beneficiary (or the
estate of the participant or beneficiary) under State law to
recover damages resulting from personal injury or for wrongful
death against any person in connection with the provision of
insurance, administrative services, or medical services by such
person to or for a group health plan; and
``(3) the extent to which coverage decisions made by the
plan are subject to internal review or any external review and
the proper time frames under which such reviews may be
requested and conducted.
``(e) Information Available on Request.--
``(1) Access to plan benefit information in electronic
form.--
``(A) In general.--A group health plan (and a
health insurance issuer offering health insurance
coverage in connection with a group health plan) shall,
upon written request (made not more frequently than
annually), make available to participants and
beneficiaries, in a generally recognized electronic
format, the following information:
``(i) the latest summary plan description,
including the latest summary of material
modifications; and
``(ii) the actual plan provisions setting
forth the benefits available under the plan,
to the extent such information relates to the coverage
options under the plan available to the participant or
beneficiary. A reasonable charge may be made to cover
the cost of providing such information in such
generally recognized electronic format. The Secretary
may by regulation prescribe a maximum amount which will
constitute a reasonable charge under the preceding
sentence.
``(B) Alternative access.--The requirements of this
paragraph may be met by making such information
generally available (rather than upon request) on the
Internet or on a proprietary computer network in a
format which is readily accessible to participants and
beneficiaries.
``(2) Additional information to be provided on request.--
``(A) Inclusion in summary plan description of
summary of additional information.--The information
required under subsection (a) includes a summary
description of the types of information required by
this subsection to be made available to participants
and beneficiaries on request.
``(B) Information required from plans and issuers
on request.--In addition to information required to be
included in summary plan descriptions under this
subsection, a group health plan (and a health insurance
issuer offering health insurance coverage in connection
with a group health plan) shall provide the following
information to a participant or beneficiary on request:
``(i) Network characteristics.--If the plan
(or issuer) utilizes a defined set of providers
under contract with the plan (or issuer), a
detailed list of the names of such providers
and their geographic location, set forth
separately with respect to primary care
providers and with respect to specialists.
``(ii) Care management information.--A
description of the circumstances under which,
and the extent to which, the plan has special
disease management programs or programs for
persons with disabilities, indicating whether
these programs are voluntary or mandatory and
whether a significant benefit differential
results from participation in such programs.
``(iii) Inclusion of drugs and biologicals
in formularies.--A statement of whether a
specific drug or biological is included in a
formulary used to determine benefits under the
plan and a description of the procedures for
considering requests for any patient-specific
waivers.
``(iv) Procedures for determining
exclusions based on medical necessity or
experimental treatments.--Upon receipt by the
participant or beneficiary of any notification
of an adverse coverage decision based on a
determination relating to medical necessity or
an experimental treatment or technology, a
description of the procedures and medically-
based criteria used in such decision.
``(v) Preauthorization and utilization
review procedures.--Upon receipt by the
participant or beneficiary of any notification
of an adverse coverage decision, a description
of the basis on which any preauthorization
requirement or any utilization review
requirement has resulted in such decision.
``(vi) Accreditation status of health
insurance issuers and service providers.--A
description of the accreditation and licensing
status (if any) of each health insurance issuer
offering health insurance coverage in
connection with the plan and of any utilization
review organization utilized by the issuer or
the plan, together with the name and address of
the accrediting or licensing authority.
``(vii) Measures of enrollee
satisfaction.--The latest information (if any)
maintained by the plan, or by any health
insurance issuer offering health insurance
coverage in connection with the plan, relating
to enrollee satisfaction.
``(viii) Quality performance measures.--The
latest information (if any) maintained by the
plan, or by any health insurance issuer
offering health insurance coverage in
connection with the plan, relating to quality
of performance of the delivery of medical care
with respect to coverage options offered under
the plan and of health care professionals and
facilities providing medical care under the
plan.
``(C) Information required from health care
professionals on request.--Any health care professional
treating a participant or beneficiary under a group
health plan shall provide to the participant or
beneficiary, on request, a description of his or her
professional qualifications (including board
certification status, licensing status, and
accreditation status, if any), privileges, and
experience and a general description by category
(including salary, fee-for-service, capitation, and
such other categories as may be specified in
regulations of the Secretary) of the applicable method
by which such professional is compensated in connection
with the provision of such medical care.
``(D) Information required from health care
facilities on request.--Any health care facility from
which a participant or beneficiary has sought treatment
under a group health plan shall provide to the
participant or beneficiary, on request, a description
of the facility's corporate form or other
organizational form and all forms of licensing and
accreditation status (if any) assigned to the facility
by standard-setting organizations.
``(f) Access to Information Relevant to the Coverage Options Under
Which the Participant or Beneficiary Is Eligible to Enroll.--In
addition to information otherwise required to be made available under
this section, a group health plan (and a health insurance issuer
offering health insurance coverage in connection with a group health
plan) shall, upon written request (made not more frequently than
annually), make available to a participant (and an employee who, under
the terms of the plan, is eligible for coverage but not enrolled) in
connection with a period of enrollment the summary plan description for
any coverage option under the plan under which the participant is
eligible to enroll and any information described in clauses (i), (ii),
(iii), (vi), (vii), and (viii) of subsection (e)(2)(B).
``(g) Advance Notice of Changes in Drug Formularies.--Not later
than 30 days before the effective date of any exclusion of a specific
drug or biological from any drug formulary under the plan that is used
in the treatment of a chronic illness or disease, the plan shall take
such actions as are necessary to reasonably ensure that plan
participants are informed of such exclusion. The requirements of this
subsection may be satisfied--
``(1) by inclusion of information in publications broadly
distributed by plan sponsors, employers, or employee
organizations;
``(2) by electronic means of communication (including the
Internet or proprietary computer networks in a format which is
readily accessible to participants);
``(3) by timely informing participants who, under an
ongoing program maintained under the plan, have submitted their
names for such notification; or
``(4) by any other reasonable means of timely informing
plan participants.''.
SEC. 602. EFFECTIVE DATE.
(a) In General.--The amendments made by section 601 shall apply
with respect to plan years beginning on or after January 1 of the
second calendar year following the date of the enactment of this Act.
The Secretary shall first issue all regulations necessary to carry out
the amendments made by section 601 before such date.
(b) Limitation on Enforcement Actions.--No enforcement action shall
be taken, pursuant to the amendments made by section 601, against a
group health plan or health insurance issuer with respect to a
violation of a requirement imposed by such amendments before the date
of issuance of final regulations issued in connection with such
requirement, if the plan or issuer has sought to comply in good faith
with such requirement.
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Introduced in House
Introduced in House
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, and Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, and Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, and Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, and Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Health.
Referred to the Subcommittee on Employer-Employee Relations.
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