Victims of Domestic Abuse Insurance Protection Act of 1996

Summary: Victims of Domestic Abuse Insurance Protection Act of 1996 - Prohibits insurers and group health plans from engaging, directly or indirectly, in specified discriminatory acts or practices on the basis that the applicant or insured, or any person employed by the applicant or insured or with whom the applicant or insured has a relationship or association, or a beneficiary or plan participant, is, has been, or may be the subject of domestic abuse.  Sets forth limitations upon the use or transfer of information among insurers or group health plans with respect to such subjects. 
Requires the insurer or group health plan to furnish a written explanation of any adverse action taken on a claim or medical condition that the insurer has reason to know is abuse-related. 
Prescribes parameters within which a life insurer may decline to issue a life insurance policy on the life of an individual if the applicant or prospective policy owner is or would be the designated beneficiary, and if such applicant or prospective policy owner:  (1) lacks an insurable interest in the insured; or (2) is known in police or court records to have committed an act of domestic abuse in relation to the individual. 
Prohibits subrogation of claims resulting from domestic abuse without the informed consent of the subject of domestic abuse. 
Mandates that:  (1) an insurer develop protocols specifying how employees, agents, and brokers will pursue an insurance action that may affect the safety of a subject of domestic abuse involved with that action; and (2) the Secretary of Health and Human Services promulgate standards for insurers to implement this Act if the National Association of Insurance Commissioners fails to adopt a Model Act that establishes standards to implement this Act. 
Prescribes guidelines for State and Federal enforcement of this Act, including a civil money penalty for violations.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Victims of Domestic Abuse Insurance 
Protection Act of 1996''.

SEC. 2. DEFINITIONS.

    As used in this Act:
            (1) The term ``domestic abuse'' means the occurrence of one 
        or more of the following acts between former or current 
        household or family members (including in-laws or extended 
        family), spouses or former spouses, individuals engaged in or 
        formerly engaged in a sexually intimate relationship, a 
        caretaker and the person taken care of, a perpetrator of sexual 
        assault and the victim of the assault, or a stalker or a sex 
        offender in relation to the person being stalked or person 
        against whom the offense was or is being committed:
                    (A) Attempting to cause or intentionally, 
                knowingly, or recklessly causing the other person 
                bodily injury, physical harm, severe emotional 
                distress, psychological trauma, rape, sexual assault, 
                or involuntary sexual intercourse.
                    (B) Engaging in a course of conduct or repeatedly 
                committing acts toward the other person, including 
                following the person without proper authority and under 
                circumstances that place the person in reasonable fear 
                of bodily injury or physical harm.
                    (C) Subjecting the other person to false 
                imprisonment or kidnapping.
                    (D) Attempting to cause or intentionally, 
                knowingly, or recklessly causing damage to property so 
                as to intimidate or attempt to control the behavior of 
                the other person.
            (2) The term ``domestic abuse-related medical condition'' 
        means a medical condition sustained by the subject of domestic 
        abuse which arises in whole or in part out of an action or 
        pattern of domestic abuse in relation to the subject of 
        domestic abuse.
            (3) The term ``domestic abuse status'' means the fact or 
        perception that a person is, has been, or may be a subject of 
        domestic abuse, irrespective of whether the person has 
        sustained domestic abuse-related medical conditions.
            (4) The term ``insurance policy'' means any policy, 
        contract, or certificate of insurance (whether for health 
        benefits, life insurance benefits, property and casualty 
        benefits, or otherwise) issued by an insurer and subject to the 
        insurance laws and regulations of a State, and includes an 
        endorsement or rider to such a policy, contract, or certificate 
        and includes a contract of health benefits issued by a health 
        maintenance organization.
            (5) The term ``insured'' means a party named on an 
        insurance policy as the person with legal rights to the 
        benefits provided by the policy. For group insurance, such term 
        includes a person who is a beneficiary covered by a group 
        policy or certificate.
            (6) The term ``insurer'' means any person or legal entity 
        (including a health carrier or life, disability, and property 
        and casualty insurer) engaged in the business of insurance and 
        subject to the insurance laws and regulations of a State, and 
        includes agents, brokers, adjusters, and third party 
        administrators and includes health maintenance organizations 
        and similar organizations subject to regulation by a State for 
        insolvency.
            (7) The term ``subject of domestic abuse'' means--
                    (A) a person to whom an act of domestic abuse is 
                directed,
                    (B) a person who has had prior or current injuries, 
                illnesses, or disorders that resulted from domestic 
                abuse, or
                    (C) a person who seeks, may have sought, or had 
                reason to seek--
                            (i) medical or psychological treatment for 
                        domestic abuse, or
                            (ii) protection (including court-order 
                        protection) or shelter from domestic abuse.
            (8) The term ``group health plan'' has the meaning given 
        such term in section 607(1) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1167(1)).
            (9) The terms ``beneficiary'' and ``participant'' have the 
        meanings given such terms in section 3 of the Employee 
        Retirement Income Security Act of 1974.

SEC. 3. PROHIBITION OF UNFAIR DISCRIMINATION AGAINST SUBJECTS OF 
              DOMESTIC ABUSE.

    (a) In General.--An insurer or group health plan may not, directly 
or indirectly, engage in any of the following acts or practices on the 
basis that the applicant or insured, or any person employed by the 
applicant or insured or with whom the applicant or insured is known to 
have a relationship or association, or a beneficiary or participant in 
the plan is, has been, or may be the subject of domestic abuse:
            (1) Denying, refusing to issue, renew or reissue, or 
        canceling or otherwise terminating an insurance policy or 
        coverage under the group health plan; or restricting or 
        excluding coverage under the policy or plan; or adding a 
        premium differential to any insurance policy or for coverage 
        under the plan on such basis.
            (2) Excluding or limiting coverage for losses or denying a 
        claim incurred by an insured or participant or beneficiary as a 
        result of domestic abuse on the basis of the insured's, 
        participant's, or beneficiary's abuse status, except (in the 
        case of an insurer) as otherwise permitted or required by State 
        laws relating to acts of abuse committed by life insurance 
        beneficiaries.
            (3)(A) Subject to subparagraph (B), terminating coverage 
        for a subject of domestic abuse because coverage was originally 
        issued or provided in the name of the abuser and the abuser has 
        divorced, separated from, or lost custody of the subject of 
        domestic abuse or the abuser's coverage has terminated 
        voluntarily or involuntarily and, with respect to health 
        insurance coverage or coverage under a group health plan, the 
        subject of domestic abuse does not qualify for extension of 
        coverage under part 6 of subtitle B of title I or the Employee 
        Retirement Income Security Act of 1974, section 4980B of the 
        Internal Revenue Code of 1986, or title XXII of the Public 
        Health Service Act.
            (B) Nothing in subparagraph (A) prohibits the insurer or 
        group health plan from requiring the subject of domestic abuse 
        to pay the full premium for the subject's coverage under the 
        policy or plan or from requiring, as a condition of health 
        insurance coverage or coverage under the plan, that the subject 
        of domestic abuse reside or work within its service area if 
        such requirements are applied to all insureds of the insurer 
        with respect to such coverage or to all participants and 
        beneficiaries.
            (C) The insurer may terminate group health insurance 
        coverage after the continuation coverage required by this 
        paragraph has been in force for 18 months if it offers 
        conversion to an equivalent individual plan.
            (D) The continuation of health coverage required by this 
        paragraph shall be satisfied by coverage under part 6 of 
        subtitle B of title I or the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1161 et seq.), section 4980B of 
        the Internal Revenue Code of 1986, or title XXII of the Public 
        Health Service Act provided to a subject of domestic abuse and 
        is not intended to be in addition to any extension of coverage 
        provided under such part, section, or title.
    (b) Limitation on Use or Transfer of Information.--
            (1) In general.--An insurer or group health plan (or a 
        contractor with an insurer or group health plan) may not use, 
        disclose, or transfer information relating to an individual's 
        abuse status, or medical condition which the insurer or plan 
        knows or has reason to know is abuse-related, or an 
        individual's family, household, social, or employment 
        relationship with a subject of domestic abuse except to the 
        extent necessary for the direct provision of health care 
        services, compliance with abuse reporting laws, or (in the case 
        of an insurer) compliance with an order of an entity with 
        authority to regulate insurance or an order of a court of 
        competent jurisdiction. Nothing in this paragraph shall be 
        construed as limiting or precluding a subject of domestic abuse 
        from obtaining the subject's own medical records from an 
        insurer or group health plan.
            (2) Access to information by subject of domestic abuse.--A 
        subject of domestic abuse may provide evidence of domestic 
        abuse to an insurer or group health plan for the limited 
        purpose of facilitating treatment of an domestic abuse-related 
        condition or demonstrating that a condition is domestic abuse-
        related. Nothing in this paragraph shall be construed as 
        authorizing an insurer or plan to disregard such provided 
        evidence.

SEC. 4. EXPLANATION OF REASONS FOR ADVERSE ACTIONS.

    An insurer or group health plan that takes any adverse action 
relating to any insurance policy or coverage under a group health plan 
of a subject of domestic abuse on the basis of a claim or medical 
condition that the insurer or plan knows or has reason to know is 
abuse-related, shall explain the reason for its action to the applicant 
or insured or individual in writing. Reference to general underwriting 
practices or guidelines does not constitute a specific reason.

SEC. 5. SPECIAL RULE FOR LIFE INSURANCE.

    Nothing in this Act shall be construed to prohibit a life insurer 
from declining to issue a life insurance policy on the life of an 
individual if the applicant or prospective owner of the policy is or 
would be designated as a beneficiary of the policy, and if--
            (1) the applicant or prospective owner of the policy lacks 
        an insurable interest in the insured; or
            (2) the applicant or prospective owner of the policy is 
        known, on the basis of police or court records, to have 
        committed an act of domestic abuse in relation to the 
        individual.

SEC. 6. SUBROGATION WITHOUT CONSENT PROHIBITED.

    Except where the subject of domestic abuse has already recovered 
damages, subrogation of claims resulting from domestic abuse is 
prohibited without the informed consent of the subject of domestic 
abuse.

SEC. 7. COMPLIANCE WITH INSURANCE PROTOCOLS FOR SUBJECTS OF DOMESTIC 
              ABUSE.

    An insurer shall develop, file with the applicable regulatory 
authority, and adhere to, protocols specifying how employees, 
contractors, agents, and broker of the insurer will pursue an insurance 
action (including claims investigation and subrogation) that may impact 
the safety of a subject of domestic abuse involved with that action.

SEC. 8. ESTABLISHMENT OF STANDARDS FOR INSURERS.

    (a) In General.--If, within the 90-day period beginning on the date 
of the enactment of this Act, the National Association of Insurance 
Commissioners adopts a Model Act and Regulations that establish 
standards for insurers with respect to the requirements under this Act, 
such standards shall apply to insurers in carrying out this Act.
    (b) Fallback Federal Standards.--If the NAIC does not adopt such an 
Act and Regulations within the period specified in subsection (a), the 
Secretary of Health and Human Services shall promulgate, not later than 
60 days after the end of such period, standards for insurers to carry 
out this Act.

SEC. 9. ENFORCEMENT FOR INSURERS.

    (a) State Enforcement.--
            (1) In general.--Each State may establish under State law a 
        regulatory program that provides for the application and 
        enforcement of standards for insurers equal to or more 
        stringent than the standards established under section 8 to 
        carry out this Act.
            (2) Review.--The Secretary periodically shall review State 
        regulatory programs to determine if they continue to 
        substantially meet the requirements specified in paragraph (1). 
        If the Secretary finds that a State regulatory program no 
        longer substantially meets the requirements, before making a 
        final determination, the Secretary shall provide the State an 
        opportunity to adopt such a plan of correction as would permit 
        the State regulatory program to continue to meet such 
        requirements. If the Secretary makes a final determination that 
        the State regulatory program, after such an opportunity, fails 
        to substantially meet such requirements, the provisions of 
        subsection (b) shall apply to insurers in that State.
    (b) Federal Fallback Enforcement.--In the case of an insurer, with 
respect to insurance policies issued in a State which does not have an 
approved regulatory program in effect under subsection (a)(1), that the 
Secretary of Health and Human Services determines fails to comply with 
an applicable standard established under section 8, the insurer is 
subject to a civil money penalty of not to exceed $25,000 for each such 
violation. The provisions of section 1128A of the Social Security Act 
(other than the first sentence of subsection (a) and other than 
subsection (b)) shall apply to a civil money penalty under the previous 
sentence in the same manner as such provisions apply to a penalty or 
proceeding under section 1128A(a) of such Act.

SEC. 10. ENFORCEMENT WITH RESPECT TO GROUP HEALTH PLANS.

    The provisions of this Act insofar as they relate to group health 
plans shall be deemed to be provisions of title I of the Employee 
Retirement Income Security Act of 1974 for purposes of applying such 
title. With respect to group health plans, the Secretary of Labor shall 
enforce the requirements of this Act in the same manner as provided for 
under sections 502, 504, 506, and 510 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1132, 1134, 1136, and 1140).

SEC. 11. EFFECTIVE DATE.

    (a) In General.--Subject to subsection (b), the requirements of 
this Act shall take effect on July 1, 1997, or, in the case of insurers 
and if later, the date specified in subsection (b), and shall apply to 
actions occurring on or after such date.
    (b) Special Rule.--In the case of a State which the Secretary of 
Health and Human Services identifies as--
            (1) requiring State legislation (other than legislation 
        appropriating funds) in order for insurance policies to meet 
        standards established under section 8 or for the State 
        insurance commissioner to perform the functions described in 
        section 9(a), but
            (2) having a legislature which is not scheduled to meet in 
        1997 in a legislative session in which such legislation may be 
        considered,
the date specified in this subsection is the first day of the first 
calendar quarter beginning after the close of the first legislative 
session of the State legislature that begins on or after the date of 
the enactment of this Act, and in which legislation described in 
paragraph (1) may be considered. For purposes of the previous sentence, 
in the case of a State that has a 2-year legislative session, each year 
of such session shall be deemed to be a separate regular session of the 
State legislature.