S. 1309

One Hundred Sixth Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Monday,

the twenty-fourth day of January, two thousand

An Act

To amend title I of the Employee Retirement Income Security Act of 1974 to

provide for the preemption of State law in certain cases relating to certain

church plans.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. PURPOSE.

The purpose of this Act is only to clarify the application to

a church plan that is a welfare plan of State insurance laws that

require or solely relate to licensing, solvency, insolvency, or the

status of such plan as a single employer plan.

SEC. 2 CLARIFICATION OF CHURCH WELFARE PLAN STATUS UNDER

STATE INSURANCE LAW.

(a) IN GENERAL.—For purposes of determining the status of

a church plan that is a welfare plan under provisions of a State

insurance law described in subsection (b), such a church plan (and

any trust under such plan) shall be deemed to be a plan sponsored

by a single employer that reimburses costs from general church

assets, or purchases insurance coverage with general church assets,

or both.

(b) STATE INSURANCE LAW.—A State insurance law described

in this subsection is a law that—

(1) requires a church plan, or an organization described

in section 414(e)(3)(A) of the Internal Revenue Code of 1986

and section 3(33)(C)(i) of the Employee Retirement Income

Security Act of 1974 (29 U.S.C. 1002(33)(C)(i)) to the extent

that it is administering or funding such a plan, to be licensed;

or

(2) relates solely to the solvency or insolvency of a church

plan (including participation in State guaranty funds and

associations).

(c) DEFINITIONS.—For purposes of this section:

(1) CHURCH PLAN.—The term ‘‘church plan’’ has the

meaning given such term by section 414(e) of the Internal

Revenue Code of 1986 and section 3(33) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(33)).

(2) REIMBURSES COSTS FROM GENERAL CHURCH ASSETS.—

The term ‘‘reimburses costs from general church assets’’ means

engaging in an activity that is not the spreading of risk solely

for the purposes of the provisions of State insurance laws

described in subsection (b).

(3) WELFARE PLAN.—The term ‘‘welfare plan’’—
S. 1309—2

(A) means any church plan to the extent that such

plan provides medical, surgical, or hospital care or benefits,

or benefits in the event of sickness, accident, disability,

death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services; and

(B) does not include any entity, such as a health insurance issuer described in section 9832(b)(2) of the Internal

Revenue Code of 1986 or a health maintenance organization described in section 9832(b)(3) of such Code, or any

other organization that does business with the church plan

or organization sponsoring or maintaining such a plan.

(d) ENFORCEMENT AUTHORITY.—Notwithstanding any other

provision of this section, for purposes of enforcing provisions of

State insurance laws that apply to a church plan that is a welfare

plan, the church plan shall be subject to State enforcement as

if the church plan were an insurer licensed by the State.

(e) APPLICATION OF SECTION.—Except as provided in subsection

(d), the application of this section is limited to determining the

status of a church plan that is a welfare plan under the provisions

of State insurance laws described in subsection (b). This section

shall not otherwise be construed to recharacterize the status, or

modify or affect the rights, of any plan participant or beneficiary,

including participants or beneficiaries who make plan contributions.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.