Local and Municipal Health Care Choice Act of 2017

Summary: Local and Municipal Health Care Choice Act of 2017 This bill amends the Public Health Service Act to authorize a local government in a secondary state to provide group health coverage to its officers, employees, or retirees and their dependents through a local government employee health benefits pool or program authorized under the laws of a primary state unless the municipal league, municipal association, or county association in the secondary state objects. Such pools and programs must do business in the primary state. Such pools and programs are subject to the primary state's laws, rules, regulations, agreements, and orders pertaining to:  group health coverage issued by such a pool or program;  the offer, sale, rating, renewal, and issuance of group health coverage to local government officials, employees, or retirees and their dependents; the management, operations, and investment activities of such a pool or program;  loss control and claims administration for such a pool or program; or   payment of taxes levied on health insurance issuers, brokers, or policyholders.  Such pools and programs are exempt from these policies of the secondary state. These policies do not include policies governing the use of care or cost management techniques. The policies of the primary state must apply to such pools and programs in both the primary state and secondary state.  Secondary states may require such a pool or program to: (1) register with the state, (2) comply with certain court injunctions, or (3) comply with state laws regarding fraud and abuse or unfair claims settlement practices.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Local and Municipal Health Care 
Choice Act of 2017''.

SEC. 2. COOPERATIVE GOVERNING OF PUBLIC ENTITY GROUP HEALTH COVERAGE.

    Title XXVII of the Public Health Service Act (42 U.S.C. 300gg et 
seq.) is amended--
            (1) by redesignating the section 2794 (42 U.S.C. 300gg-95) 
        relating to uniform fraud and abuse referral format as section 
        2795; and
            (2) by adding at the end the following new section:

``SEC. 2796. AUTHORITY TO OFFER PUBLIC ENTITY GROUP HEALTH COVERAGE TO 
              LOCAL GOVERNMENTS IN A SECONDARY STATE.

    ``(a) In General.--A local government in a secondary State (as 
defined in subsection (h)(7)) may provide group health coverage to its 
officers, employees, or retirees (and their dependents) through a local 
government employee health benefits pool or program authorized under 
the laws of a primary State, subject to the provisions of this section.
    ``(b) Eligibility for Multistate Activity.--A local government 
employee health benefits pool or program shall be eligible to offer 
group health coverage to officials, employees, and retirees (and their 
dependents) of a local government located in a secondary State through 
an interlocal agreement with such local government, or as approved by 
an applicable State authority in such secondary State, unless--
            ``(1) in the case of a pool or program that primarily 
        serves municipal officers, employees, or retirees (and their 
        dependents), an objection is made to the offering of such 
        coverage by the municipal league or association located in the 
        secondary State within 90 days of the date on which the 
        authority is granted or an interlocal agreement is executed; or
            ``(2) in the case of a pool or program that primarily 
        serves county officers, employees, retirees (and their 
        dependents), an objection is made to the offering of such 
        coverage by the county association located in the secondary 
        State within 90 days of the date on which the authority is 
        granted or an interlocal agreement is executed.
    ``(c) Application of Covered Laws of Primary State.--The covered 
laws (as defined in subsection (h)(2)) of the primary State shall apply 
to group health coverage offered by a local government employee health 
benefits pool or program in the primary State and in any secondary 
State, but only if the coverage and the pool or program comply with the 
conditions of this section with respect to the offering of coverage in 
any secondary State.
    ``(d) Limited Application of Secondary State Laws.--
            ``(1) In general.--Except as provided in this section, a 
        local government employee health benefits pool or program that 
        offers group health coverage in a secondary State to the 
        officers, employees, or retirees (and their dependents) of a 
        local government located in such secondary State, is exempt 
        from any covered laws of the secondary State (and any rules, 
        regulations, agreements, or orders sought or issued by such 
        State under or related to such covered laws).
            ``(2) Secondary state authority.--A secondary State may 
        require a local government employee health benefits pool or 
        program to do any or all of the following:
                    ``(A) Registration.--To register with an applicable 
                State authority in such State with jurisdiction over 
                local government employee health benefits pools or 
                programs and designate such authority as its agent 
                solely for the purpose of receiving service of legal 
                documents or process.
                    ``(B) Documentation.--To file with an applicable 
                State authority in such State--
                            ``(i) a written intent to do business in 
                        that State;
                            ``(ii) copies of the membership or 
                        interlocal agreements entered into between the 
                        local government employee health benefits pool 
                        or program and a local government of that 
                        State; and
                            ``(iii) copies of annual audited financial 
                        statements of the local government employee 
                        health benefits pool or program filed with the 
                        primary State.
                    ``(C) Compliance with injunctions.--To comply with 
                an injunction issued by a court of competent 
                jurisdiction, upon a petition by an applicable State 
                authority in such State alleging that the pool or 
                program is in hazardous financial condition.
                    ``(D) Compliance with state fraud and abuse laws.--
                To comply with any State law regarding fraud and abuse, 
                except that if the State seeks an injunction regarding 
                the conduct described in this subparagraph, such 
                injunction must be obtained from a court of competent 
                jurisdiction.
                    ``(E) Compliance with state unfair claims 
                settlement practices laws.--To comply with any State 
                law regarding unfair claims settlement practices.
            ``(3) Limitations on secondary state authority.--If a local 
        government employee health benefits pool or program offers 
        group health insurance coverage to officials, employees, and 
        retirees (and their dependents) of a local government located 
        in a secondary State pursuant to subsection (b), such secondary 
        State may not do any of the following:
                    ``(A) Countersigned by local agent or broker.--
                Require any group health coverage issued by the pool or 
                program to be countersigned by an insurance agent or 
                broker residing in that secondary State.
                    ``(B) Submit to duplicative financial 
                examinations.--Require the pool or program to submit to 
                an examination of its financial condition by an 
                applicable State authority in such State, unless--
                            ``(i) an applicable State authority of the 
                        primary State has not done an examination 
                        within the period recommended by the National 
                        Association of Insurance Commissioners; and
                            ``(ii) any such examination by the 
                        secondary State is conducted in accordance with 
                        the examiners' handbook of the National 
                        Association of Insurance Commissioners and is 
                        coordinated to avoid unjustified duplication 
                        and unjustified repetition.
                    ``(C) Discriminate against pool or program.--
                Otherwise discriminate against the pool or program 
                issuing group health coverage in both the primary State 
                and in any secondary State.
    ``(e) Disclosure Requirement.--Prior to providing group health 
coverage to the officers, employees, or retirees (and their dependents) 
of a local government located in a secondary State, a local government 
employee health benefits pool or program shall provide notice to such 
individuals that the health coverage is governed by the covered laws 
and regulations of the primary State, as well as by any applicable 
Federal laws and regulations.
    ``(f) Status of Group Health Coverage in Secondary State.--A local 
government employee health benefits pool or program that is not 
regulated as an insurer in its primary State, and whose group health 
plans are not regulated as insurance in its primary State, shall not be 
subject to the jurisdiction of a State insurance regulatory agency in 
any secondary State.
    ``(g) Designation of Primary State.--
            ``(1) Designation of a single state.--A local government 
        employee health benefits pool or program may only designate one 
        State as its primary State with respect to all such coverage it 
        offers under this section.
            ``(2) Initial operations in primary state.--Such pool or 
        program may not offer group health coverage in a secondary 
        State until it is deemed to be doing business in the primary 
        State.
    ``(h) Definitions.--In this section:
            ``(1) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a local government 
        employee health benefits pool or program in a State, any 
        official or officials designated by the State to administer the 
        requirements of this section for the State with respect to such 
        pool or program, including the official or officials with 
        authority to approve interlocal agreements under applicable 
        State law, but shall not include any State insurance regulatory 
        agency.
            ``(2) Covered laws.--
                    ``(A) In general.--The term `covered laws' means 
                the laws, rules, regulations, agreements, and orders 
                pertaining to any of the following:
                            ``(i) Group health coverage issued by a 
                        local government employee health benefits pool 
                        or program.
                            ``(ii) The offer, sale, rating (including 
                        medical underwriting), renewal, and issuance of 
                        group health coverage to local government 
                        officials, employees, and retirees or their 
                        dependents.
                            ``(iii) The management, operations, and 
                        investment activities of a local government 
                        employee health benefits pool or program.
                            ``(iv) Loss control and claims 
                        administration for a local government employee 
                        health benefits pool or program with respect to 
                        liability for which the pool or program 
                        provides coverage.
                            ``(v) The payment, on a nondiscriminatory 
                        basis, of applicable premium and other taxes 
                        (including high risk pool assessments) which 
                        are levied on health insurance issuers, 
                        brokers, or policyholders under the laws of the 
                        State.
                    ``(B) Exception.--Such term does not include any 
                law, rule, regulation, agreement, or order governing 
                the use of care or cost management techniques, 
                including any requirement related to provider 
                contracting, network access or adequacy, health care 
                data collection, or quality assurance.
            ``(3) Group health coverage.--The term `group health 
        coverage' means medical care expense reimbursement provided 
        under a group health plan.
            ``(4) Local government.--The term `local government' means 
        a county, municipality, special district, school district, 
        junior college district, housing authority, or other political 
        subdivision or public entity defined under State law.
            ``(5) Local government employee health benefits pool or 
        program.--The term `local government employee health benefits 
        pool or program' means a risk pool authorized or permitted by 
        State statute or otherwise regulated by a State agency under 
        which--
                    ``(A) a local government or group of local 
                governments, directly or through a pool, provide health 
                care benefits primarily for local government officials, 
                employees, and retirees and their dependents; and
                    ``(B) such pool may provide health care benefits 
                from the assets of the pool or its member local 
                governments through any combination of self-funded 
                arrangements or fully insured products,
        and includes any other State authorized program designed to 
        provide health benefits to local government officials, 
        employees, and retirees and their dependents.
            ``(6) Primary state.--The term `primary State' means, with 
        respect to group health coverage offered by a local government 
        employee health benefits pool or program, the State designated 
        by the pool or program as the State whose covered laws shall 
        govern the pool or program in the issuance of such coverage 
        under this part.
            ``(7) Secondary state.--The term `secondary State' means, 
        with respect to group health coverage offered by a local 
        government employee health benefits pool or program, any State 
        that is not the primary State.''.