I 

109TH CONGRESS 

1ST SESSION H. R. 2728 

To amend the Public Health Service Act to expand health care access and 

choice of coverage through Individual Membership Associations (IMAs). 

IN THE HOUSE OF REPRESENTATIVES 

MAY 26, 2005 

Mr. SHADEGG introduced the following bill; which was referred to the 

Committee on Energy and Commerce 

A BILL 

To amend the Public Health Service Act to expand health 

care access and choice of coverage through Individual 

Membership Associations (IMAs). 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Health Care Access 

5 and Availability Act of 2005’’. 

6 SEC. 2. CONSTITUTIONAL AUTHORITY. 

7 The constitutional authority upon which this Act 

8 rests is the power of Congress to regulate commerce with 

9 foreign nations and among the several States, set forth 

10 in article I, section 8 of the United States Constitution. 
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1 SEC. 3. EXPANSION OF ACCESS AND CHOICE THROUGH IN2 DIVIDUAL MEMBERSHIP ASSOCIATIONS 

3 (IMAS). 

4 The Public Health Service Act is amended by adding 

5 at the end the following new title: 

6 ‘‘TITLE XXIX—INDIVIDUAL 

7 MEMBERSHIP ASSOCIATIONS 

8 ‘‘SEC. 2901. DEFINITION OF INDIVIDUAL MEMBERSHIP AS9 SOCIATION (IMA). 

10 ‘‘(a) IN GENERAL.—For purposes of this title, the 

11 terms ‘individual membership association’ and ‘IMA’ 

12 mean a legal entity that meets the following requirements: 

13 ‘‘(1) ORGANIZATION.—The IMA is an organiza14 tion operated under the direction of an association 

15 (as defined in section 2904(1)). 

16 ‘‘(2) OFFERING HEALTH BENEFITS COV17 ERAGE.— 

18 ‘‘(A) DIFFERENT GROUPS.—The IMA, in 

19 conjunction with those health insurance issuers 

20 that offer health benefits coverage through the 

21 IMA, makes available health benefits coverage 

22 in the manner described in subsection (b) to all 

23 members of the IMA and the dependents of 

24 such members in the manner described in sub25 section (c)(2) at rates that are established by 

26 the health insurance issuer on a policy or prod-
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1 uct specific basis and that may vary only as 

2 permissible under State law. 

3 ‘‘(B) NONDISCRIMINATION IN COVERAGE

4 OFFERED.— 

5 ‘‘(i) IN GENERAL.—Subject to clause 

6 (ii), the IMA may not offer health benefits 

7 coverage to a member of an IMA unless 

8 the same coverage is offered to all such 

9 members of the IMA. 

10 ‘‘(ii) CONSTRUCTION.—Nothing in 

11 this title shall be construed as requiring or 

12 permitting a health insurance issuer to 

13 provide coverage outside the service area of 

14 the issuer, as approved under State law, or 

15 requiring a health insurance issuer from 

16 excluding or limiting the coverage on any 

17 individual, subject to the requirement of 

18 section 2741. 

19 ‘‘(C) NO FINANCIAL UNDERWRITING.—The 

20 IMA provides health benefits coverage only 

21 through contracts with health insurance issuers 

22 and does not assume insurance risk with re23 spect to such coverage. 

24 ‘‘(3) GEOGRAPHIC AREAS.—Nothing in this title 

25 shall be construed as preventing the establishment 
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1 and operation of more than one IMA in a geographic 

2 area or as limiting the number of IMAs that may 

3 operate in any area. 

4 ‘‘(4) PROVISION OF ADMINISTRATIVE SERVICES

5 TO PURCHASERS.— 

6 ‘‘(A) IN GENERAL.—The IMA may provide 

7 administrative services for members. Such serv8 ices may include accounting, billing, and enroll9 ment information. 

10 ‘‘(B) CONSTRUCTION.—Nothing in this 

11 subsection shall be construed as preventing an 

12 IMA from serving as an administrative service 

13 organization to any entity. 

14 ‘‘(5) FILING INFORMATION.—The IMA files 

15 with the Secretary information that demonstrates 

16 the IMA’s compliance with the applicable require17 ments of this title. 

18 ‘‘(b) HEALTH BENEFITS COVERAGE REQUIRE19 MENTS.— 

20 ‘‘(1) COMPLIANCE WITH CONSUMER PROTEC21 TION REQUIREMENTS.—Any health benefits coverage 

22 offered through an IMA shall— 

23 ‘‘(A) be underwritten by a health insurance 

24 issuer that— 
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1 ‘‘(i) is licensed (or otherwise regu2 lated) under State law, 

3 ‘‘(ii) meets all applicable State stand4 ards relating to consumer protection, sub5 ject to section 2902, and 

6 ‘‘(B) subject to paragraph (2), be approved 

7 or otherwise permitted to be offered under 

8 State law. 

9 ‘‘(2) EXAMPLES OF TYPES OF COVERAGE.—The 

10 benefits coverage made available through an IMA 

11 may include, but is not limited to, any of the fol12 lowing if it meets the other applicable requirements 

13 of this title: 

14 ‘‘(A) Coverage through a health mainte15 nance organization. 

16 ‘‘(B) Coverage in connection with a pre17 ferred provider organization. 

18 ‘‘(C) Coverage in connection with a li19 censed provider-sponsored organization. 

20 ‘‘(D) Indemnity coverage through an insur21 ance company. 

22 ‘‘(E) Coverage offered in connection with a 

23 contribution into a medical savings account or 

24 flexible spending account. 
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1 ‘‘(F) Coverage that includes a point-of2 service option. 

3 ‘‘(G) Any combination of such types of 

4 coverage. 

5 ‘‘(3) WELLNESS BONUSES FOR HEALTH PRO6 MOTION.—Nothing in this title shall be construed as 

7 precluding a health insurance issuer offering health 

8 benefits coverage through an IMA from establishing 

9 premium discounts or rebates for members or from 

10 modifying otherwise applicable copayments or 

11 deductibles in return for adherence to programs of 

12 health promotion and disease prevention so long as 

13 such programs are agreed to in advance by the IMA 

14 and comply with all other provisions of this title and 

15 do not discriminate among similarly situated mem16 bers. 

17 ‘‘(c) MEMBERS; HEALTH INSURANCE ISSUERS.— 

18 ‘‘(1) MEMBERS.— 

19 ‘‘(A) IN GENERAL.—Under rules estab20 lished to carry out this title, with respect to an 

21 individual who is a member of an IMA, the in22 dividual may enroll for health benefits coverage 

23 (including coverage for dependents of such indi24 vidual) offered by a health insurance issuer 

25 through the IMA. 
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1 ‘‘(B) RULES FOR ENROLLMENT.—Nothing 

2 in this paragraph shall preclude an IMA from 

3 establishing rules of enrollment and reenroll4 ment of members. Such rules shall be applied 

5 consistently to all members within the IMA and 

6 shall not be based in any manner on health sta7 tus-related factors. 

8 ‘‘(2) HEALTH INSURANCE ISSUERS.—The con9 tract between an IMA and a health insurance issuer 

10 shall provide, with respect to a member enrolled with 

11 health benefits coverage offered by the issuer 

12 through the IMA, for the payment of the premiums 

13 collected by the issuer. 

14 ‘‘SEC. 2902. APPLICATION OF CERTAIN LAWS AND REQUIRE15 MENTS. 

16 ‘‘State laws insofar as they relate to any of the fol17 lowing are superseded and shall not apply to health bene18 fits coverage made available through an IMA: 

19 ‘‘(1) Benefit requirements for health benefits 

20 coverage offered through an IMA, including (but not 

21 limited to) requirements relating to coverage of spe22 cific providers, specific services or conditions, or the 

23 amount, duration, or scope of benefits, but not in24 cluding requirements to the extent required to imple25 ment title XXVII or other Federal law and to the 
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1 extent the requirement prohibits an exclusion of a 

2 specific disease from such coverage. 

3 ‘‘(2) Any other requirements (including limita4 tions on compensation arrangements) that, directly 

5 or indirectly, preclude (or have the effect of pre6 cluding) the offering of such coverage through an 

7 IMA, if the IMA meets the requirements of this 

8 title. 

9 ‘‘SEC. 2903. ADMINISTRATION. 

10 ‘‘(a) IN GENERAL.—The Secretary shall administer 

11 this title and is authorized to issue such regulations as 

12 may be required to carry out this title. Such regulations 

13 shall be subject to Congressional review under the provi14 sions of chapter 8 of title 5, United States Code. The Sec15 retary shall incorporate the process of ‘deemed file and 

16 use’ with respect to the information filed under section 

17 2901(a)(5) and shall determine whether information filed 

18 by an IMA demonstrates compliance with the applicable 

19 requirements of this title. The Secretary shall exercise au20 thority under this title in a manner that fosters and pro21 motes the development of IMAs in order to improve access 

22 to health care coverage and services. 

23 ‘‘(b) PERIODIC REPORTS.—The Secretary shall sub24 mit to Congress a report every 30 months, during the 10- 

25 year period beginning on the effective date of the rules 
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1 promulgated by the Secretary to carry out this title, on 

2 the effectiveness of this title in promoting coverage of un3 insured individuals. The Secretary may provide for the 

4 production of such reports through one or more contracts 

5 with appropriate private entities. 

6 ‘‘SEC. 2904. DEFINITIONS. 

7 ‘‘For purposes of this title: 

8 ‘‘(1) ASSOCIATION.—The term ‘association’ 

9 means, with respect to health insurance coverage of10 fered in a State, an association which— 

11 ‘‘(A) has been actively in existence for at 

12 least 5 years; 

13 ‘‘(B) has been formed and maintained in 

14 good faith for purposes other than obtaining in15 surance; 

16 ‘‘(C) does not condition membership in the 

17 association on any health status-related factor 

18 relating to an individual (including an employee 

19 of an employer or a dependent of an employee); 

20 and 

21 ‘‘(D) does not make health insurance cov22 erage offered through the association available 

23 other than in connection with a member of the 

24 association. 
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1 ‘‘(2) DEPENDENT.—The term ‘dependent’, as 

2 applied to health insurance coverage offered by a 

3 health insurance issuer licensed (or otherwise regu4 lated) in a State, shall have the meaning applied to 

5 such term with respect to such coverage under the 

6 laws of the State relating to such coverage and such 

7 an issuer. Such term may include the spouse and 

8 children of the individual involved. 

9 ‘‘(3) HEALTH BENEFITS COVERAGE.—The term 

10 ‘health benefits coverage’ has the meaning given the 

11 term health insurance coverage in section 

12 2791(b)(1). 

13 ‘‘(4) HEALTH INSURANCE ISSUER.—The term 

14 ‘health insurance issuer’ has the meaning given such 

15 term in section 2791(b)(2). 

16 ‘‘(5) HEALTH STATUS-RELATED FACTOR.—The 

17 term ‘health status-related factor’ has the meaning 

18 given such term in section 2791(d)(9). 

19 ‘‘(6) IMA; INDIVIDUAL MEMBERSHIP ASSOCIA20 TION.—The terms ‘IMA’ and ‘individual membership 

21 association’ are defined in section 2901(a). 

22 ‘‘(7) MEMBER.—The term ‘member’ means, 

23 with respect to an IMA, an individual who is a mem-
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1 ber of the association to which the IMA is offering 

2 coverage.’’. 

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