Health Insurance Protection Act of 1993

Summary: Health Insurance Protection Act of 1993 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to provide that certain retroactive cancellations or reductions of benefits under group health plans constitute discrimination which interferes with rights protected under ERISA. 
Prohibits any group health plan from discriminating among diseases or medical conditions with respect to levels of lifetime benefit coverage provided to similarly situated participants and beneficiaries under the plan, with specified limitations relating to collective bargaining or special exemption procedures. 
Delays the adoption of any material change in a group health plan until 60 days after notification of each participant and spouse beneficiary.  Sets forth special requirements for such notices from self-insured group health plans. 
Revises civil enforcement provisions to make any person who violates prohibitions against interference with rights of any participant or beneficiary under a group health plan liable to such participant or beneficiary for actual and consequential damages.  Precludes punitive damages, except in certain circumstances. Provides for award of attorney's fees and other legal costs to plaintiffs who prevail or substantially prevail.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Insurance Protection Act of 
1993''.

SEC. 2. PROTECTION FROM INTERFERENCE WITH RIGHTS.

    Section 510 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1140) is amended--
            (1) by inserting ``(a) In General.--'' after ``Sec. 510.''; 
        and
            (2) by adding at the end the following new subsection:
    ``(b) Discrimination Based on Benefit Claims Under Group Health 
Plans.--
            ``(1) In general.--It shall be unlawful discrimination for 
        purposes of subsection (a) to take any action to cancel or 
        reduce a benefit of a participant or beneficiary under a group 
        health plan (by plan amendment or plan termination, change in 
        insured status of the plan, change of insurer under the plan, 
        or any other means), if--
                    ``(A) such action is specifically related to one or 
                more particular diseases or medical conditions,
                    ``(B) such participant or beneficiary is 
                undergoing, at the time such action is taken, a course 
                of treatment related to any such disease or medical 
                condition, and
                    ``(C) a valid claim under the plan reasonably 
                related to such course of treatment has been submitted 
                to the plan by or on behalf of such participant or 
                beneficiary prior to the taking of such action.
            ``(2) Special rule related to plan terminations.--Paragraph 
        (1) shall not apply to any cancellation or reduction of a 
        benefit by termination of a group health plan unless the 
        employer replaces the plan.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Group health plan.--The term `group health 
                plan' has the meaning provided in section 607(1).
                    ``(B) Change in insured status.--The term `change 
                in insured status' of a plan means a change to self-
                insured status or a change in the extent to which 
                benefits provided under the plan are provided under a 
                contract or policy of insurance issued by an insurer 
                under the plan.
                    ``(C) Insurer.--The term `insurer' under a plan 
                means a person licensed by a State to engage in the 
                business of insurance who provides benefits under the 
                plan under a contract or policy of insurance issued by 
                such person.
                    ``(D) Valid claim.--The term `valid claim' under a 
                group health plan means a claim which, at the time of 
                its submission by or on behalf of a participant or 
                beneficiary, would have entitled the participant or 
                beneficiary to benefits under the plan.''.

SEC. 3. NONDISCRIMINATION IN LIFETIME BENEFIT COVERAGE UNDER A GROUP 
              HEALTH PLAN.

    (a) In General.--Part 5 of title I of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1001 et seq.) is amended by 
adding at the end the following new section:

 ``nondiscrimination in lifetime benefit coverage under a group health 
                                  plan

    ``Sec. 516. (a) In General.--
            ``(1) Unlawful discrimination.--It shall be unlawful for a 
        group health plan to discriminate among diseases or medical 
        conditions with respect to levels of lifetime benefit coverage 
        provided to similarly situated participants and beneficiaries 
        under the plan.
            ``(2) Definition.--For purposes of this section, the term 
        `lifetime benefit coverage' provided to any participant or 
        beneficiary under a plan means the maximum benefit available 
        under the plan in the aggregate to such participant or 
        beneficiary.
    ``(b) Limitation.--Subsection (a) shall not apply with respect to 
participants and their beneficiaries under a group health plan if the 
requirements of paragraph (1) or (2) are met as follows:
            ``(1) Collective bargaining.--The requirements of this 
        paragraph are met if--
                    ``(A) the participants consist of employees covered 
                by a collective bargaining agreement between employee 
                representatives and one or more employers,
                    ``(B) there is evidence that benefits provided 
                under the group health plan established or maintained 
                pursuant to such collective bargaining agreement were 
                the subject of good faith bargaining between such 
                employee representatives and such employer or 
                employers, and
                    ``(C) the discrimination consists of a lack of 
                uniformity based solely on--
                            ``(i) variations in the required terms of 
                        the collective bargaining agreement as applied 
                        to separate geographically located facilities 
                        of the same employer, or
                            ``(ii) different levels of contributions to 
                        such plan negotiated between such employee 
                        representatives and more than 1 employer, as 
                        set forth in applicable collective bargaining 
                        agreements.
            ``(2) Exemption procedure.--The requirements of this 
        paragraph are met if the sponsor of such group health plan 
        demonstrates to the Secretary by a preponderance of the 
        evidence that such sponsor will be unable to continue such plan 
        unless granted relief from the applicable requirements of 
        subsection (a), pursuant to an exemption procedure which--
                    ``(A) shall be established by the Secretary by 
                regulation for purposes of this subsection, and
                    ``(B) shall be subject to standards and procedures 
                similar to those applicable under section 408(a) with 
                respect to exemptions granted under such section.''.
    (b) Clerical Amendment.--The table of contents in section 1 of such 
Act is amended by inserting after the item relating to section 514 the 
following new items:

``Sec. 515. Delinquent contributions.
``Sec. 516. Nondiscrimination in lifetime benefit coverage under a 
                            group health plan.''.

SEC. 4. REPORTING AND DISCLOSURE REQUIREMENTS.

    (a) Notice of Modifications and Changes.--Section 104(b)(1) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1024(b)(1)) 
is amended by adding at the end the following: ``In the case of a group 
health plan (as defined in section 607(1)), the adoption of any 
material coverage restriction which constitutes a modification 
described in section 102(a)(1) or which is represented by any change in 
the information required under section 102(b), may not take effect 
until 60 days after such a summary description of such modification or 
change is furnished to each participant and to each spouse of a 
participant who is a beneficiary under the plan in language calculated 
to be easily understood by the typical participant or beneficiary. For 
purposes of the preceding sentence, the term `material coverage 
restriction' means any change in the terms of a group health plan that 
results in elimination of, or increased restrictions on, any form of 
benefit coverage which was provided by the plan prior to the change, 
including the establishment of, or increases in the amount of, 
deductibles or coinsurance payments required of participants and 
beneficiaries under the plan, except that the Secretary may by 
regulation exclude from such term any such change of a type which the 
Secretary finds to be de minimis.''.
    (b) Special Requirements for Self-Insured Plans.--Section 102(b) of 
such Act (29 U.S.C. 1022(b)) is amended--
            (1) by inserting ``(1)'' after ``(b)''; and
            (2) by adding at the end the following new paragraph:
    ``(2)(A) In the case of a self-insured group health plan, in 
addition to the information required under paragraph (1), the plan 
description and summary plan description shall contain a statement--
            ``(i) indicating that the plan is a self-insured group 
        health plan and is not a policy of insurance,
            ``(ii) identifying the person who is responsible for claim 
        determinations and processing, and
            ``(iii) indicating that the plan is not subject to State 
        guarantee fund protection and that, if the plan does not pay 
        all benefits for which participants or beneficiaries are 
        eligible under the plan, responsibility for payment for medical 
        care may to some extent remain with the participant or 
        beneficiary.
    ``(B) For purposes of this paragraph--
            ``(i) the term `group health plan' has the meaning provided 
        in section 607(1); and
            ``(ii) a group health plan is `self-insured' unless all 
        benefits provided under the plan are provided under a contract 
        or policy of insurance issued by a person licensed by a State 
        to engage in the business of insurance.''.

SEC. 5. LEGAL RELIEF FROM DAMAGES FOR INTERFERENCE WITH RIGHTS UNDER 
              PLAN.

    (a) Damages.--Section 502(c) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1132(c)) is amended by adding at the 
end the following new paragraph:
    ``(4)(A) Any person who violates section 510 or 516 with respect to 
any participant or beneficiary under a group health plan shall be 
liable to such participant or beneficiary for actual and consequential 
damages. Subject to subparagraph (B), damages for such violation shall 
not include punitive damages.
    ``(B) In any case in which the violation constitutes willful, 
fraudulent, or malicious conduct, bad faith, or gross negligence, each 
person liable under subparagraph (A) may, in the court's discretion, be 
liable to such participant or beneficiary for punitive damages in an 
amount up to 200 percent of the amount of actual damages awarded, but 
not less than $50,000. Any such punitive damages shall be in addition 
to any actual damages under subparagraph (A).
    ``(C) For purposes of this paragraph, the term `group health plan' 
has the meaning provided in section 607(1).''.
    (b) Attorney's Fees.--Section 502(g) of such Act (29 U.S.C. 
1132(g)) is amended by adding at the end the following new paragraph:
    ``(3) In any action for damages under subsection (c)(4) in which 
the plaintiff prevails or substantially prevails, the court shall award 
the plaintiff reasonable attorney's fees and other costs of the action, 
including reasonable expert witness fees and costs, to be paid by the 
defendant. Fees awarded under this paragraph shall be at generally 
prevailing hourly rates.''.

SEC. 6. EFFECTIVE DATE.

    The amendments made by this Act shall apply with respect to changes 
in group health plan coverage adopted on or after the date of the 
enactment of this Act.