I

104TH CONGRESS

2D SESSION H. R. 3130

To assure availability and continuity of health insurance and to simplify

the administration of health coverage.

IN THE HOUSE OF REPRESENTATIVES

MARCH 20, 1996

Mr. PETERSON of Florida (for himself, Mr. MORAN, Mr. DOOLEY of California, Mr. BAESLER, Mr. BERMAN, Ms. BROWN of Florida, Mr. CLEMENT,

Mr. COLEMAN, Mr. DELLUMS, Mr. DIXON, Mr. FATTAH, Mr. FAZIO of

California, Mr. FRAZER, Mr. HASTINGS of Florida, Mr. HEFNER, Mr.

HILLIARD, Mr. HINCHEY, Ms. KAPTUR, Mr. LAFALCE, Mrs. LINCOLN,

Mr. LEWIS of Georgia, Ms. LOFGREN, Ms. MCKINNEY, Mrs. MEEK of

Florida, Mr. MINGE, Mr. NADLER, Ms. NORTON, Mr. OBERSTAR, Ms.

PELOSI, Mr. POSHARD, Ms. ROYBAL-ALLARD, Mr. SABO, Mr. SANDERS,

Mrs. SCHROEDER, Mr. STENHOLM, Mr. STUPAK, Mr. TORRES, Ms.

VELA ́ZQUEZ, Mr. YATES, Mr. CLYBURN, Mr. JEFFERSON, Mr. PASTOR,

Mr. CRAMER, Mr. ROSE, Mrs. THURMAN, Mr. PAYNE of Virginia, Ms.

JACKSON-LEE of Texas, and Mr. PALLONE) introduced the following bill;

which was referred to the Committee on Commerce, and in addition to

the Committee on Ways and Means, the Judiciary, and Economic and

Educational Opportunities, for a period to be subsequently determined by

the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To assure availability and continuity of health insurance

and to simplify the administration of health coverage.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Health Insurance Affordability Act of 1996’’.

4 (b) TABLE OF CONTENTS.—The table of contents of

5 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—ASSURING AVAILABILITY AND CONTINUITY OF HEALTH

COVERAGE

Subtitle A—Guaranteed Access to Health Coverage

Sec. 101. Guaranteed offer by carriers.

Sec. 102. Guaranteed issue by carriers.

Sec. 103. Guaranteed renewal.

Sec. 104. Restricting preexisting condition exclusions.

Sec. 105. Enrollment periods.

Subtitle B—Provision of Benefits

Sec. 111. Standards for managed care arrangements.

Sec. 112. Report on utilization review standards.

Subtitle C—Fair Rating Practices

Sec. 121. Use of fair rating practices.

Sec. 122. Establishment of risk adjustment mechanisms.

Subtitle D—Consumer Protections

Sec. 131. Requirement for provision of information.

Sec. 132. Prohibition of improper incentives.

Sec. 133. Written policies and procedures respecting advance directives.

Subtitle E—Benefits

Sec. 141. Qualified health coverage.

Sec. 142. Standard coverage.

Sec. 143. High-deductible coverage.

Sec. 144. Actuarial valuation of benefits.

Sec. 145. Limitation on offering supplemental benefits.

Sec. 146. Family coverage option; supplemental coverage.

Sec. 147. Level playing field for providers.

Subtitle F—Standards and Certification; Enforcement; Preemption; General

Provisions

Sec. 151. Establishment of standards.

Sec. 152. Application of standards to carriers through States.

Sec. 153. Application to group health plans.

Sec. 154. Enforcement.

Sec. 155. Limitation on self insurance for small employers.
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Subtitle G—Definitions; General Provisions

Sec. 191. General definitions.

Sec. 192. Definitions relating to employment.

Sec. 193. Definitions relating to health coverage, plans, and carriers.

Sec. 194. Definitions relating to residence and immigration status.

Sec. 195. Effective dates.

TITLE II—ADMINISTRATIVE SIMPLIFICATION

Sec. 200. Purpose.

Sec. 201. Definitions.

Subtitle A—Standards for Data Elements and Transactions

Sec. 211. General requirements on Secretary.

Sec. 212. Standards for data elements of health information.

Sec. 213. Information transaction standards.

Sec. 214. Health information network privacy standards.

Sec. 215. Timetables for adoption of standards.

Subtitle B—Requirements with Respect to Certain Transactions and

Information

Sec. 221. Standard transactions and information.

Sec. 222. Accessing health information for authorized purposes.

Sec. 223. Ensuring availability of information.

Sec. 224. Timetables for compliance with requirements.

Subtitle C—Miscellaneous Provisions

Sec. 231. Standards and certification for health information network services.

Sec. 232. Imposition of additional requirements.

Sec. 233. Effect on State law.

TITLE III—ANTITRUST

Sec. 301. Publication of antitrust guidelines on activities of health plans.

1 TITLE I—ASSURING AVAILABIL2 ITY AND CONTINUITY OF

3 HEALTH COVERAGE

4 Subtitle A—Guaranteed Access to

5 Health Coverage

6 SEC. 101. GUARANTEED OFFER BY CARRIERS.

7 (a) IN GENERAL.—Each carrier that offers health in8 surance coverage in the individual/small group market in

9 a fair rating area (as defined in section 193) shall make
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1 available, to each qualifying individual (as defined in sec2 tion 194(3)) or small employer (covered in such market)

3 in such fair rating area—

4 (1) qualified standard coverage consistent with

5 section 142, and

6 (2) subject to subsection (b), qualified high-de7 ductible coverage consistent with section 143.

8 (b) HIGH-DEDUCTIBLE COVERAGE.—

9 (1) EXCEPTION FOR HEALTH MAINTENANCE

10 ORGANIZATIONS.—The requirement of subsection

11 (a)(2) shall not apply with respect to health insur12 ance coverage that—

13 (A) is provided by a Federally qualified

14 health maintenance organization (as defined in

15 section 1301(a) of the Public Health Service

16 Act), or

17 (B) is not provided by such an organiza18 tion but is provided by an organization recog19 nized under State law as a health maintenance

20 organization or managed care organization or a

21 similar organization regulated under State law

22 for solvency.

23 (2) LIMITATION ON OFFER OF HIGH-DEDUCT24 IBLE COVERAGE.—Qualified high-deductible coverage

25 may not be made available by a carrier to a qualify-
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1 ing individual (or to a small employer with respect

2 to an employee) unless the carrier also makes avail3 able qualified standard coverage that has identical

4 benefits (other than the amount of the deductible)

5 and the individual or employee demonstrates to the

6 carrier that the individual or employee has available

7 assets (as defined by the Secretary) equal to at least

8 the deductible amount established under section

9 144(b)(1) applicable to the high-deductible coverage.

10 A carrier may not make available to an individual

11 health coverage (other than coverage for supple12 mental benefits) the actuarial value of which is less

13 than the actuarial value of qualified high-deductible

14 coverage, unless the individual has available assets

15 (as defined by the Secretary) equal to at least the

16 deductible amount of the coverage offered.

17 (c) COVERAGE OF ENTIRE RATING AREA.—

18 (1) IN GENERAL.—With respect to each fair

19 rating area for which a carrier offers health insur20 ance coverage, the carrier shall provide for coverage

21 of benefits for items and services furnished through22 out the fair rating area.

23 (2) SPECIAL RULE FOR CARRIERS OFFERING

24 COVERAGE IN MULTI-STATE METROPOLITAN STATIS25 TICAL AREAS.—In the case of a carrier that offers
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1 qualified health insurance coverage in the individual/

2 small employer market in a portion of a State that

3 is located in an interstate metropolitan statistical

4 area, the carrier may not provide such coverage with

5 respect to an individual or employer in such metro6 politan statistical area unless the carrier also offers

7 such coverage in other portions of the area located

8 in other States.

9 (3) SPECIAL RULE FOR COVERAGE THROUGH

10 MANAGED CARE ARRANGEMENT.—In the case of cov11 erage offered by a carrier or under a group health

12 plan to the extent that it provides benefits through

13 a managed care arrangement in a fair rating area,

14 this subsection shall not be construed as requiring

15 the establishment of facilities throughout the area, if

16 the facilities are located consistent with section

17 102(b)(1).

18 (d) FAMILY COVERAGE OPTION.—The offer of cov19 erage under this section with respect to an individual shall

20 include the option of coverage of family members of the

21 individual.

22 (e) LIMITATION ON CARRIERS.—A carrier may not

23 require an employer under a group health plan to impose

24 through a waiting period for health coverage under a plan
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1 or similarly require a limitation or condition on health cov2 erage or benefits based on—

3 (1) the health status of an individual,

4 (2) claims experience of an individual,

5 (3) receipt of health care by an individual,

6 (4) medical history of an individual,

7 (5) receipt of public subsidies by an individual,

8 or

9 (6) lack of evidence of insurability of an individ10 ual.

11 (f) CONSTRUCTION FOR MEWAS.—Nothing in this

12 section shall be construed as requiring a multiple employer

13 welfare arrangement that provides health coverage other

14 than through a carrier to meet the requirements of this

15 section.

16 SEC. 102. GUARANTEED ISSUE BY CARRIERS.

17 (a) IN GENERAL.—Subject to subsections (b) and (c)

18 and section 103, each carrier that offers health insurance

19 coverage in the individual/small group market in a fair rat20 ing area—

21 (1) must accept every small employer in the

22 area that applies for such coverage during an enroll23 ment period provided under section 105; and

24 (2) must accept for enrollment under such cov25 erage every qualifying individual (and family mem-
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1 ber of such an individual) who applies for enrollment

2 during an enrollment period provided under section

3 105 and may not place any restriction on the eligi4 bility of an individual to enroll so long as such indi5 vidual is a qualifying individual.

6 (b) SPECIAL RULES FOR MANAGED CARE ARRANGE7 MENTS.—In the case of coverage offered by a carrier or

8 under a group health plan that provides benefits through

9 a managed care arrangement in a fair rating area, the

10 carrier or plan—

11 (1) need not establish facilities for the delivery

12 of health care services throughout the area so long

13 as such facilities are located in a manner that does

14 not discriminate on the basis of health status of in15 dividuals residing in proximity to such facilities, and

16 (2) may deny such coverage in a fair rating

17 area to employers or individuals if the organization

18 demonstrates to the applicable regulatory authority

19 that—

20 (A) it will not have the capacity to deliver

21 services adequately to enrollees of any addi22 tional groups or additional enrollees because of

23 its obligations to existing group contract hold24 ers and enrollees, and
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1 (B) it is applying this paragraph uniformly

2 to all employers and individuals without regard

3 to the health status, claims experience, or dura4 tion of coverage of those employers and their

5 employees.

6 Coverage may be denied under paragraph (2) only if the

7 denial is applied during a consecutive period of at least

8 180 days.

9 (c) SPECIAL RULE FOR FINANCIAL CAPACITY LIM10 ITS.—In addition to the authority provided under sub11 section (b)(2), in the case of coverage offered by any car12 rier, the carrier may deny coverage to a small employer

13 or individual if the carrier demonstrates to the applicable

14 regulatory authority that—

15 (1) it does not have the financial reserves nec16 essary to underwrite additional coverage, and

17 (2) it is applying this subsection uniformly to

18 all employers and individuals without regard to the

19 health status, claims experience, or duration of cov20 erage of those employers and their employees.

21 Coverage may be denied under this subsection only if the

22 denial is applied during a consecutive period of at least

23 180 days.

24 (d) TREATMENT OF CERTAIN MEWAS.—Subsection

25 (a) shall not apply to a carrier if the only coverage offered
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1 by the carrier in the individual/small group market is

2 through one or more multiple employer welfare arrange3 ments. In the case of coverage offered by a carrier in the

4 individual/small group market through a multiple em5 ployer welfare arrangement and to which the previous sen6 tence does not apply, the requirements of subsection (a)

7 shall apply to the carrier and not to the arrangement.

8 SEC. 103. GUARANTEED RENEWAL.

9 (a) LIMITATION ON TERMINATION BY CARRIERS.—

10 A carrier may not deny, cancel, or refuse to renew health

11 coverage of a qualifying individual or eligible employer

12 within a type of coverage option described in section

13 193(13) except—

14 (1) on the basis of nonpayment of premiums,

15 (2) on the basis of fraud or misrepresentation,

16 or

17 (3) subject to subsection (b), in a fair rating

18 area because the carrier is ceasing to provide any

19 health insurance coverage in the individual/small

20 group market within such type of coverage option in

21 the area.

22 (b) LIMITATIONS ON MARKET EXIT BY CARRIERS.—

23 (1) NOTICE, ETC.—Subsection (a)(3) shall not

24 apply to a carrier ceasing to provide health insur25 ance coverage unless—
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1 (A) such termination of coverage takes ef2 fect at the end of a contract year, and

3 (B) the carrier provides notice of such ter4 mination to employers and individuals covered

5 at least 30 days before the date of an annual

6 open enrollment period established with respect

7 to the employer or individual under section 105.

8 (2) LIMITATION ON REENTRY IN INDIVIDUAL/

9 SMALL GROUP MARKET.—If a carrier ceases to offer

10 or provide health insurance coverage in an area with

11 respect to the individual/small group market for a

12 type of coverage option, the insurer may not offer

13 health insurance coverage in the area in such market

14 within such type of coverage option until 5 years

15 after the date of the termination.

16 (c) RULE FOR MULTIEMPLOYER PLANS AND MUL17 TIPLE EMPLOYER HEALTH.—A multiemployer plan and

18 a multiple employer health plan may not cancel coverage

19 or deny renewal of coverage under such a plan with re20 spect to an employer other than—

21 (1) for nonpayment of contributions,

22 (2) for fraud or other misrepresentation by the

23 employer, or

24 (3) because the plan is ceasing to provide any

25 coverage in a geographic area.
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1 SEC. 104. RESTRICTING PREEXISTING CONDITION EXCLU2 SIONS.

3 (a) IN GENERAL.—Except as provided in this section,

4 a carrier or group health plan providing health coverage

5 may not exclude health coverage with respect to services

6 related to treatment of a condition based on the fact that

7 the condition of an individual existed before the effective

8 date of coverage of the individual.

9 (b) LIMITED 6-MONTH EXCLUSION PERMITTED.—

10 (1) IN GENERAL.—Subject to paragraph (2)

11 and subsections (c) through (e), a carrier or group

12 health plan providing health coverage may exclude

13 health coverage with respect to services related to

14 treatment of a condition of an individual based on

15 the fact that the condition existed before the effec16 tive date of coverage of the individual only if the pe17 riod of the exclusion does not exceed 6 months be18 ginning on the date of coverage.

19 (2) CREDITING OF PREVIOUS COVERAGE.—

20 (A) IN GENERAL.—A carrier or group

21 health plan providing health coverage shall pro22 vide that if a covered individual is in a period

23 of continuous coverage (as defined in subpara24 graph (C)) as of a date upon which coverage is

25 initiated or reinitiated, any period of exclusion

26 of coverage with respect to a preexisting condi-
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1 tion (as defined in subparagraph (B)) for such

2 services or type of services shall be reduced by

3 1 month for each month in the period of contin4 uous coverage.

5 (B) PREEXISTING CONDITION DEFINED.—

6 In this paragraph, the term ‘‘preexisting condi7 tion’’ means, with respect to health coverage, a

8 condition which has been diagnosed or treated

9 during the 6-month period ending on the day

10 before the first date of such coverage (without

11 regard to any waiting period).

12 (C) PERIOD OF CONTINUOUS COVERAGE.—

13 In this part, the term ‘‘period of continuous

14 coverage’’ means the period beginning on the

15 date an individual has health coverage (or cov16 erage under a public plan providing medical

17 benefits) and ends on the date the individual

18 does not have such coverage for a continuous

19 period of more than 3 months (or 6 months in

20 the case of an individual who loses coverage due

21 to involuntary termination of employment, other

22 than by reason of an employee’s gross mis23 conduct).
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1 (c) EXCLUSION NOT APPLICABLE TO PREGNANCY.—

2 Any exclusion of coverage under subsection (b)(1) shall

3 not apply if the exclusion relates to pregnancy.

4 (d) EXCLUSION NOT APPLICABLE TO NEWBORNS

5 AND ADOPTED CHILDREN.—

6 (1) NEWBORNS.—Any exclusion of coverage

7 under subsection (b)(1) shall not apply to a child

8 who is covered at the time of birth and remains in

9 a period of continuous coverage after such time.

10 (2) ADOPTED CHILDREN.—Any exclusion of

11 coverage under subsection (b)(1) shall not apply (be12 ginning on the date of adoption) to an adopted child

13 who is covered at the time of adoption and remains

14 in a period of continuous coverage after such time.

15 (e) EXCLUSION NOT APPLICABLE TO INDIVIDUALS

16 ENROLLED OR ENROLLING DURING CERTAIN OPEN EN17 ROLLMENT PERIODS.—

18 (1) INDIVIDUALS ENROLLING DURING PE19 RIOD.—In the case of an individual who enrolls and

20 obtains coverage during an open enrollment period

21 described in section 105(b), any exclusion of cov22 erage under subsection (b)(1) shall not apply so long

23 as the individual remains in a period of continuous

24 coverage.
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1 (2) INDIVIDUALS ENROLLED AT BEGINNING OF

2 PERIOD.—In the case of an individual who has

3 health coverage as of the first day of the initial open

4 enrollment period described in section 105(b)(1),

5 any exclusion of coverage under subsection (b)(1)

6 shall not apply as of such date and so long as the

7 individual is in a period of continuous coverage.

8 (f) APPLICATION OF RULES BY CERTAIN HEALTH

9 MAINTENANCE ORGANIZATIONS.—A health maintenance

10 organization that provides health insurance coverage shall

11 not be considered as failing to meet the requirements of

12 section 1301 of the Public Health Service Act notwith13 standing that it provides for an exclusion of the coverage

14 based on a preexisting condition consistent with the provi15 sions of this subtitle so long as such exclusion is applied

16 consistent with the provisions of this part.

17 SEC. 105. ENROLLMENT PERIODS.

18 (a) IN GENERAL.—Each carrier and each group

19 health plan providing health coverage in the individual/

20 small group market shall permit qualifying individuals and

21 eligible employers to obtain health coverage from the car22 rier or group health plan during each enrollment period

23 provided under this section.

24 (b) OPEN ENROLLMENT PERIODS FOR WHICH PRE25 EXISTING CONDITION EXCLUSIONS WAIVED.—
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1 (1) INITIAL PERIOD.—There shall be an initial

2 open enrollment period, with respect to individuals

3 and employees who are residents of a State, during

4 the 60-day period beginning on January 1, 1997.

5 (2) INDIVIDUALS ELIGIBLE FOR SUBSIDIES.—

6 There shall be an individual open enrollment period

7 with respect to an individual at the time the individ8 ual first becomes eligible for any premium assistance

9 under part A of title XXI of the Social Security Act,

10 during the 60-day period beginning on the first date

11 the individual meets eligibility criteria within any

12 12-month period.

13 (3) COURT ORDERS.—If a court has ordered

14 that coverage be provided for a spouse or child of an

15 employee or individual under health coverage of the

16 employee or individual, there shall be an open enroll17 ment period during the 30-day period beginning on

18 the date of issuance of the court order.

19 (4) ENROLLMENT OF NEWBORNS AND NEWLY

20 ADOPTED CHILDREN.—There shall be an open en21 rollment period with respect to a newborn child and

22 a newly adopted child during the 30-day period be23 ginning on the date of the birth or adoption of a

24 child, if family coverage is available as of such date.
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1 (c) ANNUAL OPEN ENROLLMENT PERIODS FOR

2 WHICH PREEXISTING CONDITION EXCLUSIONS MAY

3 APPLY.—

4 (1) IN GENERAL.—Each carrier and each group

5 health plan providing health coverage in the individ6 ual/small group market shall provide for at least one

7 annual open enrollment period (of not less than 30

8 days) each year. Such period shall be in addition to

9 the open enrollment periods described in subsection

10 (b).

11 (2) COORDINATION.—

12 (A) CARRIERS IN INDIVIDUAL/SMALL

13 GROUP MARKET.—Such annual open enrollment

14 periods with respect to carriers in the individ15 ual/small group market are subject to coordina16 tion by States.

17 (d) OTHER OPEN ENROLLMENT PERIODS FOR

18 WHICH PREEXISTING CONDITION EXCLUSIONS MAY

19 APPLY.—

20 (1) TERMINATION OF RESIDENCE AREA.—For

21 each qualifying individual, at the time the individual

22 terminates residence in the service area of coverage

23 provided by a carrier to the individual, there shall be

24 an open enrollment period (of not less than 30 days)
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1 during which the individual may enroll in health cov2 erage.

3 (2) FAMILY OR EMPLOYMENT CHANGES.—In

4 the case of a qualifying individual who—

5 (A) through divorce or death of a family

6 member experiences a change in family com7 position, or

8 (B) experiences a change in employment

9 status (including a significant change in the

10 terms and conditions of employment or the

11 terms and conditions of employment of a

12 spouse),

13 there shall be an open enrollment period (of at least

14 30 days) in which the individual is permitted to

15 change the individual or family basis of coverage or

16 the health coverage in which the individual is en17 rolled. The circumstances under which such enroll18 ment periods are required and the duration of such

19 periods shall be specified by the Secretary.

20 (3) ENROLLMENT DUE TO LOSS OF PREVIOUS

21 COVERAGE.—In the case of a qualifying individual

22 who—

23 (A) had health coverage at the time of an

24 individual’s enrollment period,
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1 (B) stated at the time of such period that

2 having other health coverage was the reason for

3 declining enrollment, and

4 (C) lost the other health coverage as a re5 sult of the termination of the coverage, termi6 nation or reduction of employment, or other

7 reason, except termination at the option of the

8 individual,

9 there shall be an open enrollment period during the

10 30-day period beginning on the date of termination

11 of the other coverage.

12 (4) ENROLLMENT AT TIME OF MARRIAGE.—

13 There shall be an open enrollment period with re14 spect to the spouse of an individual (including chil15 dren of the spouse) during the 30-day period begin16 ning on the date of the marriage, if family coverage

17 is available as of such date.

18 (5) NO EFFECT ON COBRA CONTINUATION BEN19 EFITS.—Nothing in this subsection shall be con20 strued as affecting rights of individuals to continu21 ation coverage under section 4980B of the Internal

22 Revenue Code of 1986, part 6 of subtitle B of title

23 I of the Employee Retirement Income Security Act

24 of 1974, or title XXII of the Public Health Service

25 Act.
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1 (e) PERIOD OF COVERAGE.—

2 (1) IN GENERAL.—In the case of a qualifying

3 individual who enrolls under health coverage during

4 an open enrollment period under this section, cov5 erage shall begin on such date (not later than the

6 first day of the first month that begins at least 15

7 days after the date of enrollment) as the Secretary

8 shall specify, consistent with this subsection.

9 (2) COVERAGE OF FAMILY MEMBERS.—In the

10 case of an open enrollment period described in sub11 section (b)(3), (b)(4), or (d)(4), the Secretary shall

12 provide for coverage of family members to begin as

13 soon as possible on or after the date of the event

14 that gives rise to the special enrollment period (or,

15 in the case of birth or adoption, as of the date of

16 birth or adoption).

17 Subtitle B—Provision of Benefits

18 SEC. 111. STANDARDS FOR MANAGED CARE ARRANGE19 MENTS.

20 (a) APPLICATION OF REQUIREMENTS.—Each group

21 health plan, and each carrier providing health insurance

22 coverage, that provides for health care through a managed

23 care arrangement (as defined in section 193(10)(A)) shall

24 comply with the applicable requirements of this section.

25 (b) CONSUMER DISCLOSURE.—
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1 (1) IN GENERAL.—The group health plan, or

2 carrier providing health insurance coverage, that

3 provides for health care shall assure that, before an

4 individual is enrolled with the plan or carrier, the in5 dividual is provided with information about the ar6 rangements between the entity providing for the

7 managed care arrangement and health care provid8 ers for the provision of covered benefits, including

9 the following:

10 (A) EMERGENCY SERVICES.—Arrange11 ments for access to emergency care services in12 side and outside the provider network (includ13 ing designated trauma centers), including any

14 requirements for prior authorization.

15 (B) SPECIALIZED TREATMENT.—Arrange16 ments for access to specialized treatment pro17 viders (such as centers of excellence).

18 (C) CHOICE OF PERSONAL PHYSICIAN.—

19 Ability of enrollees to choose (and change the

20 selection of) a personal physician from among

21 available participating physicians and change

22 that selection as appropriate.

23 (D) ESSENTIAL COMMUNITY PROVIDERS.—

24 Arrangements for access to essential community

25 providers, including disproportionate share hos-
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1 pitals, sole community hospitals, medicare-de2 pendent, small rural hospitals, Federally quali3 fied health centers, rural health clinics, local

4 health departments, and children’s hospitals.

5 (2) DESIGNATION OF CENTERS OF EXCEL6 LENCE.—The Secretary shall establish a process for

7 the designation of facilities, including children’s hos8 pitals and other pediatric facilities, as centers of ex9 cellence for purposes of this subsection. A facility

10 may not be designated unless the facility is deter11 mined—

12 (A) to provide specialty care,

13 (B) to deliver care for complex cases re14 quiring specialized treatment and for individ15 uals with chronic diseases, and

16 (C) to meet other requirements that may

17 be established by the Secretary relating to spe18 cialized education and training of health profes19 sionals, participation in peer-reviewed research,

20 or treatment of patients from outside the geo21 graphic area of the facility.

22 (c) PROVIDER DISCLOSURE AND DUE PROCESS RE23 LATING TO PROVIDER NETWORKS.—

24 (1) DISCLOSURE.—The entity providing for a

25 managed care arrangement under which health cov-
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1 erage shall provide that before entering into a con2 tract with health care providers with respect to the

3 entity’s provider network, the provider is given infor4 mation concerning the terms and conditions of the

5 provider’s involvement with the network, including

6 the following:

7 (A) STANDARDS FOR SELECTION OF PRO8 VIDERS FOR NETWORK.—Information concern9 ing the standards (including criteria for quality,

10 efficiency, credentialing, and services) to be

11 used by the entity for contracting with health

12 care providers with respect to the entity’s pro13 vider network.

14 (B) REVIEW PROCESS.—Information con15 cerning the process under which a provider may

16 request a review of the entity’s decision to ter17 minate or refuse to renew the provider’s partici18 pation agreement.

19 (2) WRITTEN NOTICE OF DENIALS.—The entity

20 providing for the managed care arrangement shall

21 provide written notice to the provider of any denial

22 of an application to participate in the provider net23 work.

24 (3) TERMINATION PROCESS.—
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1 (A) IN GENERAL.—The entity may not ter2 minate or refuse to renew a participation agree3 ment with a provider in the entity’s provider

4 network unless the entity provides written noti5 fication to the provider of the entity’s decision

6 to terminate or refuse to renew the agreement.

7 The notification shall include a statement of the

8 reasons for the entity’s decision, consistent with

9 any standards described in paragraph (1)(A).

10 (B) TIMING OF NOTIFICATION.—The en11 tity shall provide the notification required under

12 subparagraph (A) at least 30 days prior to the

13 effective date of the termination or expiration of

14 the agreement (whichever is applicable). The

15 previous sentence shall not apply if failure to

16 terminate the agreement prior to the deadline

17 would adversely affect the health or safety of a

18 covered individual.

19 (d) NO REFERRAL REQUIRED FOR OBSTETRICS AND

20 GYNECOLOGY.—A carrier or group health plan may not

21 require an individual to obtain a referral from a physician

22 in order to obtain covered items and services from a physi23 cian who specializes in obstetrics and gynecology.

24 (e) PREEMPTION OF STATE LAW RESTRICTIONS ON

25 MANAGED CARE ARRANGEMENTS.—
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1 (1) LIMITATION ON RESTRICTIONS ON NET2 WORK PLANS.—Effective as of January 1, 1997—

3 (A) a State may not prohibit or limit a

4 carrier or group health plan providing health

5 coverage from including incentives for enrollees

6 to use the services of participating providers;

7 (B) a State may not prohibit or limit such

8 a carrier or plan from limiting coverage of serv9 ices to those provided by a participating pro10 vider;

11 (C) a State may not prohibit or limit the

12 negotiation of rates and forms of payments for

13 providers by such a carrier or plan with respect

14 to health coverage;

15 (D) a State may not prohibit or limit such

16 a carrier or plan from limiting the number of

17 participating providers;

18 (E) a State may not prohibit or limit such

19 a carrier or plan from requiring that services be

20 provided (or authorized) by a practitioner se21 lected by the enrollee from a list of available

22 participating providers or, except as provided in

23 subsection 111(d), from requiring enrollees to

24 obtain referral in order to have coverage for
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1 treatment by a specialist or health institution;

2 and

3 (F) a State may not prohibit or limit the

4 corporate practice of medicine.

5 (2) DEFINITIONS.—In this subsection:

6 (A) MANAGED CARE COVERAGE.—The

7 term ‘‘manageds care coverage’’ means health

8 coverage to the extent the coverage is provided

9 through a managed care arrangement (as de10 fined in section 193(10)(A)) that meets the ap11 plicable requirements of this section.

12 (B) PARTICIPATING PROVIDER.—The term

13 ‘‘participating provider’’ means an entity or in14 dividual which provides, sells, or leases health

15 care services as part of a provider network (as

16 defined in section 193(10)(B)).

17 SEC. 112. REPORT ON UTILIZATION REVIEW STANDARDS.

18 (a) STUDY.—The Secretary shall provide for a study

19 on the feasibility and appropriateness of—

20 (1) establishing standards for utilization review

21 programs, and

22 (2) prohibiting group health plans and carriers

23 providing health insurance coverage from denying

24 coverage of or payment for items and services on the
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1 basis of a utilization review program unless the pro2 gram meets such standards.

3 (b) REPORT.—Not later than 18 months after the

4 date of the enactment of this Act, the Secretary shall sub5 mit to Congress a report on the study under subsection

6 (a). The Secretary shall include the report recommenda7 tions regarding the application of standards for utilization

8 review programs to group health plans and carriers pro9 viding health insurance coverage.

10 (c) PREEMPTION.—For provision preempting State

11 laws relating to utilization review, see section 6103.

12 Subtitle C—Fair Rating Practices

13 SEC. 121. USE OF FAIR RATING PRACTICES.

14 (a) USE OF FAIR RATING PRACTICES.—The pre15 mium rate established by a carrier for health insurance

16 coverage in the individual/small group market (including

17 the premium rate for coverage for a small employer

18 through a multiple employer welfare arrangement that is

19 fully-insured) may not vary except by the following:

20 (1) AGE.—By age, based on classes of age es21 tablished by the Secretary, in consultation with the

22 NAIC, consistent with subsection (b).

23 (2) GEOGRAPHIC AREA.—By geographic area,

24 as identified by a State consistent with subsection

25 (c).
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1 (3) FAMILY CLASS.—By family class, based on

2 the following 4 classes of family coverage: individual,

3 individual with one or more children, married couple

4 without a child, and married couple with one or

5 more children.

6 (4) BENEFIT DESIGN.—By benefit design of

7 coverage, including by type of coverage, such as

8 standard coverage and high-deductible coverage, and

9 by type of coverage option (described in section

10 193(13)) with respect to standard coverage.

11 (5) ADMINISTRATIVE CATEGORIES.—By per12 mitted expense category, based on differences in ex13 penses among such categories, consistent with sub14 section (d).

15 The premiums shall be established for the different benefit

16 designs (including standard coverage and high-deductible

17 coverage) based on the actuarial value of the coverage for

18 the population of the individual/small group market in the

19 fair rating area, without regard to the distribution of such

20 population among the types of coverage or type of cov21 erage options.

22 (b) LIMITATION ON VARIATION BY AGE.—

23 (1) IN GENERAL.—Any variation in premium

24 rates by age under subsection (a)(1) for age classes

25 of individuals under 65 years of age may not result
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1 in the ratio of the highest age rate to the lowest age

2 rate exceeding the limiting ratio described in para3 graph (2).

4 (2) LIMITING RATIO.—For purposes of para5 graph (1), the limiting ratio described in this para6 graph is—

7 (A) 4-to-1, for premiums for months in

8 1997,

9 (B) 3.67-to-1, for premiums for months in

10 1998,

11 (C) 3.33-to-1, for premiums for months in

12 1999, and

13 (D) 3-to-1, for premiums for months in

14 2000 and any succeeding year.

15 (3) SEPARATE AGE CLASSES FOR INDIVIDUALS

16 65 YEARS OF AGE OR OLDER.—The Secretary shall

17 establish one or more separate age classes for indi18 viduals 65 years of age or older.

19 (c) GEOGRAPHIC AREA VARIATIONS.—For purposes

20 of subsection (a)(2), a State—

21 (1) may not identify an area that divides a 3-

22 digit zip code, a county, or all portions of a metro23 politan statistical area,

24 (2) shall not permit premium rates for coverage

25 offered in a portion of an interstate metropolitan
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1 statistical area to vary based on the State in which

2 the coverage is offered, and

3 (3) may, upon agreement with one or more ad4 jacent States, identify multi-state geographic areas

5 consistent with paragraphs (1) and (2).

6 (d) ADMINISTRATIVE VARIATIONS.—

7 (1) EXPENSE CATEGORIES.—Expense cat8 egories shall be established under subsection (a)(5)

9 by a carrier in a manner that only reflects dif10 ferences based on marketing, commissions, and simi11 lar expenses. Such categories shall take into account

12 health plan purchasing organizations.

13 (2) LIMITATION ON VARIATIONS.—The vari14 ation provided among expense categories under sub15 section (a)(5) may not result in a premium for the

16 highest expense category exceeding 120 percent of

17 the premium for the lowest expense category.

18 (e) PREMIUM RATING IN GROUP HEALTH PLANS.—

19 The premium rate established under a group health plan

20 for health insurance coverage may not vary within a bene21 fit design except by the factors described in subsection (a)

22 and subject to the limitation specified in subsection (b).

23 (f) ACTUARIAL CERTIFICATION.—Each carrier that

24 offers health insurance coverage in a State shall file annu25 ally with the State commissioner of insurance a written
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1 statement by a member of the American Academy of Actu2 aries (or other individual acceptable to the commissioner)

3 that, based upon an examination by the individual which

4 includes a review of the appropriate records and of the

5 actuarial assumptions of the carrier and methods used by

6 the carrier in establishing premium rates for applicable

7 health insurance coverage—

8 (1) the carrier is in compliance with the appli9 cable provisions of this section, and

10 (2) the rating methods are actuarially sound.

11 Each such carrier shall retain a copy of such statement

12 for examination at its principal place of business.

13 (g) CONSTRUCTION.—The provisions of this section

14 shall apply to premium rates established by carriers for

15 multiple employer welfare arrangements that are fully in16 sured or for fully-insured coverage offered with respect to

17 individuals and small employers in the individual/small

18 group market. Such premium rates shall apply based on

19 the fair rating area in which the covered individual or em20 ployee resides to reflect the population in the individual/

21 small group market.

22 SEC. 122. ESTABLISHMENT OF RISK ADJUSTMENT MECHA23 NISMS.

24 (a) ESTABLISHMENT OF STANDARDS.—

25 (1) DEVELOPMENT OF MODELS.—
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1 (A) IN GENERAL.—The Secretary shall re2 quest the NAIC to develop, within 9 months

3 after the date of the enactment of this Act and

4 in consultation with the American Academy of

5 Actuaries, a model risk adjustment system com6 posed of one or more risk adjustment mecha7 nisms under which premiums applicable to

8 health insurance coverage in the individual/

9 small group market and coverage under mul10 tiple employer welfare arrangements that are

11 fully insured (without regard to whether such

12 an arrangement is offered through an associa13 tion) would be adjusted to take into account

14 such factors as may be appropriate to predict

15 the future need and the efficient use of services

16 by covered individuals in the market. Such fac17 tors may include the age, gender, geographic

18 residence, health status, or other demographic

19 characteristics of individuals enrolled in such

20 plans and shall include consideration of enroll21 ment of a disproportionate share of individuals

22 who enroll during the initial open enrollment

23 period under section 105(b)(1).

24 (B) PROMULGATION AS PROPOSED

25 RULE.—If the NAIC develops such model with-
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1 in such period, the Secretary shall publish the

2 model as a proposed rule under section 553 of

3 title 5, United States Code. If the NAIC has

4 not developed such model within such period,

5 the Secretary shall publish (not later than 60

6 days after the end of such period) a proposed

7 rule that specifies a proposed model that pro8 vides for effective risk adjustment mechanisms.

9 (2) RULE MAKING PROCESS.—The Secretary

10 shall provide for a period (described in section

11 553(c) of title 5, United States Code) of not less

12 than 30 days for public comment on a proposed rule

13 published under paragraph (1)(B). The Secretary

14 shall publish a final rule, by not later than January

15 1, 1996, that specifies risk adjustment mechanisms

16 that the Secretary finds are effective for purposes of

17 carrying out this section. Such rule shall include

18 models developed by the NAIC if the Secretary finds

19 that such models provide for effective risk adjust20 ment mechanisms.

21 (3) MODIFICATION.—The Secretary, at the re22 quest of the NAIC or otherwise, may by regulation

23 modify the model risk adjustment system established

24 under this subsection.
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1 (b) IMPLEMENTATION OF RISK ADJUSTMENT SYS2 TEM.—Each State shall establish and maintain a risk ad3 justment system that conforms with the model established

4 under this section by not later than January 1, 1997. A

5 State may establish and maintain such a system jointly

6 with one or more other States.

7 Subtitle D—Consumer Protections

8 SEC. 131. REQUIREMENT FOR PROVISION OF INFORMA9 TION.

10 (a) CARRIERS.—

11 (1) IN GENERAL.—Each carrier that offers

12 health insurance coverage to small employers (or eli13 gible employees of small employers) or qualifying in14 dividuals must disclose to such prospective enrollees,

15 to brokers, and to health plan purchasing organiza16 tions the information that the Secretary may specify

17 relating to the performance of the carrier in provid18 ing such coverage and relating to differences be19 tween the coverage provided and the most similar

20 model benefit package established under section

21 144(b)(2). If a carrier offers to individuals or em22 ployers coverage the actuarial value of which is more

23 than the actuarial value for high-deductible coverage

24 but less than such value for standard coverage, the

25 carrier must disclose to such employers or individ-
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1 uals detailed information on how the coverage of2 fered compares to any standard and high-deductible

3 coverage offered by the carrier to such individuals

4 and employers.

5 (2) MARKETING MATERIAL.—Each carrier that

6 provides any health insurance coverage in a State

7 shall file with the State those marketing materials

8 relating to the offer and sale of health insurance

9 coverage to be used for distribution before the mate10 rials are used. Such materials shall be in a uniform

11 format specified under the standards established

12 under section 1301.

13 (b) GROUP HEALTH PLANS.—Each group health

14 plan that provides health coverage must disclose to enroll15 ees and potential enrollees information, similar to the in16 formation described in subsection (a), relating to perform17 ance of the plan in providing such coverage and relating

18 to differences between the coverage provided and the most

19 similar model benefit package established under section

20 144(b)(2).

21 (c) INFORMATION RELATING TO RISK ADJUST22 MENT.—Each carrier or group health plan providing cov23 erage in the individual/small group market (including mul24 tiple employer health plans that are fully insured, without

25 regard to whether such an arrangement or plan is offered
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1 through an association) shall provide to the State such in2 formation as the State may require in order to carry out

3 section 122 (relating to risk adjustment mechanisms).

4 SEC. 132. PROHIBITION OF IMPROPER INCENTIVES.

5 (a) LIMITATION ON FINANCIAL INCENTIVES.—No

6 carrier that provides health insurance coverage may vary

7 the commission or financial or other remuneration to a

8 person based on the claims experience or health status of

9 individuals enrolled by or through the person.

10 (b) NONDISCRIMINATION IN AGENT COMPENSA11 TION.—A carrier—

12 (1) may not vary or condition the compensation

13 provided to an agent or broker related to the sale or

14 renewal of health insurance coverage because of the

15 health status or claims experience of any individuals

16 enrolled with the carrier through the agent or

17 broker; and

18 (2) may not terminate, fail to renew, or limit its

19 contract or agreement of representation with an

20 agent or broker for any reason related to the health

21 status or claims experience of any individuals en22 rolled with the carrier through the agent or broker.

23 (c) PROHIBITION OF TIE-IN ARRANGEMENTS.—No

24 carrier that offers health insurance coverage may require
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1 the purchase of any other insurance or product as a condi2 tion for the purchase of such coverage.

3 SEC. 133. WRITTEN POLICIES AND PROCEDURES RESPECT4 ING ADVANCE DIRECTIVES.

5 A carrier and a group health plan offering health cov6 erage shall meet the requirements of section 1866(f) of

7 the Social Security Act (relating to maintaining written

8 policies and procedures respecting advance directives), in9 sofar as such requirements would apply to the carrier or

10 plan if the carrier or plan were an eligible organization.

11 Subtitle E—Benefits

12 SEC. 141. QUALIFIED HEALTH COVERAGE.

13 In this Act, the term ‘‘qualified health coverage’’

14 means health coverage that—

15 (1) provides—

16 (A) standard coverage consistent with sec17 tion 142(a), or

18 (B) high-deductible coverage consistent

19 with section 143; and

20 (2) meets other requirements of subtitles A

21 through D applicable to the coverage and the carrier

22 or group health plan providing the coverage.

23 SEC. 142. STANDARD COVERAGE.

24 (a) IN GENERAL.—Health insurance coverage is con25 sidered to provide standard coverage consistent with this
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1 subsection and for preventive benefits under subsection

2 (b)(4) if—

3 (1) benefits under such coverage are provided

4 within at least each of the required categories of

5 benefits described in paragraph (1) of subsection (b)

6 and consistent with such subsection;

7 (2) the actuarial value of the benefits meets the

8 requirements of subsection (c), and

9 (3) the benefits comply with the minimum re10 quirements specified in subsection (d).

11 (b) REQUIRED CATEGORIES OF COVERED BENE12 FITS.—

13 (1) IN GENERAL.—The categories of covered

14 benefits described in this paragraph are the types of

15 benefits specified in each of subparagraphs (A), (B),

16 (C), (D), (E), and (F) of paragraph (1), and sub17 paragraphs (E) and (F) of paragraph (2), of section

18 8904(a) of title 5, United States Code (relating to

19 types of benefits required to be in health insurance

20 offered to Federal employees).

21 (2) COVERAGE OF TREATMENTS IN APPROVED

22 RESEARCH TRIALS.—

23 (A) IN GENERAL.—Coverage of the routine

24 medical costs (as defined in subparagraph (B))

25 associated with the delivery of treatments shall
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1 be considered to be medically appropriate if the

2 treatment is part of an approved research trial

3 (as defined in subparagraph (C)).

4 (B) ROUTINE MEDICAL COSTS DEFINED.—

5 In subparagraph (A), the term ‘‘routine medical

6 costs’’ means the cost of health services re7 quired to provide treatment according to the de8 sign of the trial, except those costs normally

9 paid for by other funding sources (as defined by

10 the Secretary). Such costs do not include the

11 cost of the investigational agent, devices or pro12 cedures themselves, the costs of any nonhealth

13 services that might be required for a person to

14 receive the treatment, or the costs of managing

15 the research.

16 (C) APPROVED RESEARCH TRIAL DE17 FINED.—In subparagraph (A), the term ‘‘ap18 proved research trial’’ means a trial—

19 (i) conducted for the primary purpose

20 of determining the safety, effectiveness, ef21 ficacy, or health outcomes of a treatment,

22 compared with the best available alter23 native treatment, and

24 (ii) approved by the Secretary.
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1 A trial is deemed to be approved under clause

2 (ii) if it is approved by the National Institutes

3 of Health, the Food and Drug Administration

4 (through an investigational new drug exemp5 tion), the Department of Veterans Affairs, or

6 by a qualified nongovernmental research entity

7 (as identified in guidelines issued by one or

8 more of the National Institutes of Health).

9 (3) COVERAGE OF OFF-LABEL USE.—An off10 label use for a drug that has been found to be safe

11 and effective under section 505 of the Federal Food,

12 Drug, and Cosmetic Act shall be covered if the medi13 cal indication for which it is used is listed in one of

14 the following 3 compendia: the American Hospital

15 Formulary Service-Drug Information, the American

16 Medical Association Drug Evaluations, and the

17 United States Pharmacopeia-Drug Information.

18 (4) PREVENTIVE BENEFITS.—The following are

19 preventive benefits that shall be covered without any

20 deductibles, copayment, coinsurance, or other cost21 sharing:

22 (A) NEWBORN, WELL-BABY AND WELL23 CHILD CARE.—Newborn care, well-baby care,

24 and well-child care for individuals under 19

25 years of age, including routine physical exami-
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1 nations, routine immunizations, and routine

2 tests, as specified by the Secretary based on the

3 schedule recommended by the American Acad4 emy of Pediatricians.

5 (B) MAMMOGRAMS.—Routine screening

6 mammograms (including their interpretation),

7 limited to 1 mammogram for a woman who is

8 at least 35 (but less than 40) years of age, 1

9 mammogram every 2 years for a woman who is

10 at least 40 (but less than 50) years of age, and

11 1 mammogram every year for a woman who is

12 at least 50 years of age.

13 (C) SCREENING PAP SMEARS AND PELVIC

14 EXAMS.—Screening pap smears and pelvic

15 exams for women over 17 years of age, limited

16 to 1 each year.

17 (D) COLORECTAL SCREENING.—Colorectal

18 screening for individuals over 18 years of age at

19 high risk, consisting of 1 fecal occult blood

20 screening test every year, 1 screening

21 sigmoidoscopy every 5 years, and 1 screening

22 colonoscopy every 4 years.

23 (E) SCREENING TUBERCULIN TESTS.—

24 Screening tuberculin tests annually for individ25 uals at risk of contracting tuberculosis.
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1 (F) PRENATAL CARE.—Prenatal care.

2 (G) ADULT IMMUNIZATIONS.—Routine im3 munizations for an individual over 17 years of

4 age (including booster immunizations against

5 tetanus and diphtheria, but limited to 1 such

6 immunization every 10 years).

7 (H) PROSTATE CANCER SCREENING.—

8 Routine cancer screening for a man who is at

9 least 40 years of age through a prostate specific

10 antigen test, limited to 1 test each year.

11 (c) STANDARD ACTUARIAL VALUE.—

12 (1) IN GENERAL.—The actuarial value of the

13 benefits under standard coverage in a fair rating

14 area meets the requirements of this subsection if

15 such value is equivalent to the standard actuarial

16 value described in paragraph (2) for the area. The

17 actuarial value of benefits under standard coverage

18 shall be determined using the adjustment under

19 paragraph (3) for a standardized population and set

20 of standardized utilization and cost factors.

21 (2) STANDARD ACTUARIAL VALUE DE22 SCRIBED.—The standard actuarial value described

23 in this paragraph for coverage in a geographic area

24 is the actuarial value of benchmark coverage during

25 1994 in such area. Such actuarial value shall be de-
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1 termined using the adjustment under paragraph (3)

2 for a standardized population and set of standard3 ized utilization and cost factors and updated annu4 ally in accordance with section 144(a).

5 (3) ADJUSTMENTS FOR STANDARDIZED POPU6 LATION, STANDARDIZED UTILIZATION AND COST

7 FACTORS, AND GEOGRAPHIC AREA.—The adjustment

8 under this paragraph—

9 (A) for a standardized population shall be

10 made by not taking into account individuals 65

11 years of age or older, employees of the United

12 States Postal Service, retirees, and annuitants;

13 and

14 (B)(i) except as provided in clause (ii), for

15 a geographic area shall be made in a manner

16 that reflects the ratio of the actuarial value of

17 benchmark coverage in such geographic area

18 (as adjusted under subparagraph (A)) to such

19 actuarial value for such benchmark coverage for

20 the United States as a whole, taking into ac21 count standardized actuarial utilization and

22 cost factors, and

23 (ii) in the case of a group health plan oper24 ating in more than one geographic area, the

25 ratio described in clause (i) shall be determined
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1 in accordance with regulations promulgated by

2 the Secretary.

3 At the election of a group health plan under sub4 paragraph (B)(ii), the ratio under such subpara5 graph shall be 1.

6 (d) MINIMUM REQUIREMENTS WITHIN A CAT7 EGORY.—Benefits offered in any standard coverage within

8 any category of benefits shall be not less than the narrow9 est scope and shortest duration of benefits within that cat10 egory in any of the approved health benefits plans offered

11 under chapter 89 of title 5, United States Code (relating

12 to the Federal Employees Health Benefits Program) in

13 1994. Benefits offered in the standard plan within the cat14 egory of preventive services shall not require payment of

15 cost-sharing for covered items and services.

16 (e) NO COVERAGE OF SPECIFIC TREATMENT, PRO17 CEDURES, OR CLASSES REQUIRED.—Nothing in this sec18 tion (or section 143) may be construed to require the cov19 erage of any specific procedure or treatment or class of

20 service in health coverage under this Act or through regu21 lation.

22 (f) CONSTRUCTION.—Nothing in this section (or sec23 tion 143) shall be construed as requiring coverage to in24 clude benefits for items and services that are not medically

25 necessary or appropriate.
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1 SEC. 143. HIGH-DEDUCTIBLE COVERAGE.

2 Health insurance coverage is considered to provide

3 high-deductible coverage consistent with this section if—

4 (1) benefits under such coverage comply with—

5 (A) the requirements described in section

6 142(b) (relating to required categories of cov7 ered benefits), and

8 (B) the requirements described in section

9 142(d) (relating to minimum requirements

10 within a category);

11 (2) the deductible amount is the amount estab12 lished under section 144(b)(1);

13 (3) benefits under the coverage in any year

14 (other than preventive benefits described in section

15 142(b)(4)) are covered only to the extent expenses

16 incurred for items and services included in the cov17 erage for the year exceed the deductible amount

18 specified in paragraph (2); and

19 (4) the actuarial value of the coverage (as de20 termined under rules consistent with section 142(c))

21 is equivalent to 80 percent of the actuarial value es22 tablished under such section for standard coverage.

23 SEC. 144. ACTUARIAL VALUATION OF BENEFITS.

24 (a) IN GENERAL.—The Secretary, in consultation

25 with the NAIC and the American Academy of Actuaries,

26 shall establish (and may from time to time modify) proce-
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1 dures by which health insurance benefits are valued for

2 purposes of this subtitle.

3 (b) DEDUCTIBLE; MODEL BENEFIT PACKAGES.—

4 The Secretary, in consultation with the NAIC and the

5 American Academy of Actuaries, shall establish—

6 (1) the deductible amount for high-deductible

7 coverage for the purposes of section 143(2) such

8 that the actuarial value of high-deductible coverage

9 described in section 143 is 20 percent less than the

10 actuarial value of standard coverage described in

11 section 142(a); and

12 (2) model benefit packages that may be treated,

13 for purposes of this title, as meeting the require14 ments for standard or high-deductible coverage

15 under sections 142(a) and 143, respectively, and

16 which shall include model cost sharing arrangements

17 for fee-for-service options, managed care options,

18 and point-of-service options.

19 SEC. 145. LIMITATION ON OFFERING SUPPLEMENTAL BEN20 EFITS.

21 A carrier or group health plan offering qualified

22 health coverage may offer coverage of items and services

23 only in addition to the qualified standard coverage offered

24 (whether in the form of coverage of additional items and

25 services or a reduction in cost sharing) and only if—
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1 (1) such supplemental coverage is offered and

2 priced separately from the standard coverage offered

3 and is only made available to individuals who obtain

4 qualified standard coverage through the carrier or

5 plan;

6 (2) the purchase of the qualified health cov7 erage is not conditioned upon the purchase of such

8 supplemental coverage; and

9 (3) in the case of supplemental coverage that

10 consists of a reduction in the cost-sharing otherwise

11 applicable, the premium for the supplemental cov12 erage takes into account any expected increase in

13 utilization of items and services included in the

14 qualified health coverage resulting from obtaining

15 the supplemental coverage.

16 SEC. 146. FAMILY COVERAGE OPTION; SUPPLEMENTAL

17 COVERAGE.

18 (a) FAMILY COVERAGE OPTION.—Each carrier and

19 group health plan that offers health insurance coverage

20 shall provide for an option under which children under 26

21 years of age (without regard to whether they are full-time

22 students or disabled) will be treated (with respect to fam23 ily coverage) as family members. The carrier or plan may

24 impose an additional premium for such option.
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1 (b) CONSTRUCTION.—Nothing in this title shall be

2 construed as limiting the benefits that may be offered as

3 part of a group health plan or health insurance coverage.

4 SEC. 147. LEVEL PLAYING FIELD FOR PROVIDERS.

5 Nothing in this subtitle may be construed to require

6 or prohibit the use of a particular class of provider, among

7 the providers that are legally authorized to provide such

8 treatment.

9 Subtitle F—Standards and Certifi10 cation; Enforcement; Preemp11 tion; General Provisions

12 SEC. 151. ESTABLISHMENT OF STANDARDS.

13 (a) ROLE OF NAIC.—

14 (1) IN GENERAL.—The Secretary shall request

15 the NAIC to develop, within 9 months after the date

16 of the enactment of this Act, model regulations that

17 specify standards with respect to the requirements of

18 this subtitle as applicable to carriers and health in19 surance coverage.

20 (2) REVIEW OF STANDARDS.—If the NAIC de21 velops recommended regulations specifying such

22 standards within such period, the Secretary shall re23 view the standards. Such review shall be completed

24 within 60 days after the date the regulations are de25 veloped. Unless the Secretary determines within
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1 such period that the standards do not meet the re2 quirements, such standards shall serve as the stand3 ards under this subtitle, with such amendments as

4 the Secretary deems necessary.

5 (b) CONTINGENCY.—If the NAIC does not develop

6 such model regulations within such period or the Secretary

7 determines that such regulations do not specify standards

8 that meet the requirements described in subsection (a),

9 the Secretary shall specify, within 15 months after the

10 date of the enactment of this Act, standards to carry out

11 those requirements.

12 SEC. 152. APPLICATION OF STANDARDS TO CARRIERS

13 THROUGH STATES.

14 (a) APPLICATION OF STANDARDS.—

15 (1) IN GENERAL.—Each State shall submit to

16 the Secretary, by the deadline specified in paragraph

17 (2), a report on steps the State is taking to imple18 ment and enforce the standards established under

19 section 151 with respect to carriers and health in20 surance coverage offered or renewed not later than

21 such deadline.

22 (2) DEADLINE FOR REPORT.—The deadline

23 under this paragraph is 1 year after the date the

24 standards are established under section 151.

25 (b) FEDERAL ROLE.—
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1 (1) NOTICE OF DEFICIENCY.—If the Secretary

2 determines that a State has failed to submit a report

3 by the deadline specified under subsection (a)(2) or

4 finds that the State has not implemented and pro5 vided adequate enforcement of the standards estab6 lished under section 151, the Secretary shall notify

7 the State and provide the State a period of 60 days

8 in which to submit such report or to implement and

9 enforce such standards.

10 (2) IMPLEMENTATION OF ALTERNATIVE.—

11 (A) IN GENERAL.—If, after such 60-day

12 period, the Secretary finds that such a failure

13 has not been corrected, the Secretary shall pro14 vide for such mechanism for the implementation

15 and enforcement of such standards in the State

16 as the Secretary determines to be appropriate.

17 (B) EFFECTIVE PERIOD.—Such implemen18 tation and enforcement shall take effect with

19 respect to carriers, and health insurance cov20 erage offered or renewed, on or after 3 months

21 after the date of the Secretary’s finding under

22 subparagraph (A), and until the date the Sec23 retary finds that such a failure has been cor24 rected.
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1 SEC. 153. APPLICATION TO GROUP HEALTH PLANS.

2 (a) IN GENERAL.—Subject to subsection (b), sections

3 151 and 152 shall apply to group health plans providing

4 health coverage in the same manner as they apply to car5 riers providing health insurance coverage.

6 (b) SUBSTITUTION OF REFERENCES.—For purposes

7 of subsection (a), any reference in section 151 or 152 to—

8 (1) a State or the Secretary of Health and

9 Human Services is deemed a reference to the Sec10 retary of Labor, and

11 (2) a carrier or health insurance coverage is

12 deemed a reference to a group health plan and

13 health coverage, respectively.

14 SEC. 154. ENFORCEMENT.

15 (a) ENFORCEMENT BY DEPARTMENT OF LABOR FOR

16 EMPLOYERS AND GROUP HEALTH PLANS.—

17 (1) IN GENERAL.—For purposes of part 5 of

18 subtitle B of title I of the Employee Retirement In19 come Security Act of 1974, the provisions of this

20 title insofar as they relate to group health plans or

21 employers shall be deemed to be provisions of title

22 I of such Act irrespective of exclusions under section

23 4(b) of such Act.

24 (2) REGULATORY AUTHORITY.—With respect to

25 the regulatory authority of the Secretary of Labor

26 under this subtitle pursuant to paragraph (1), sec-
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1 tion 505 of the Employee Retirement Income Secu2 rity Act of 1974 (29 U.S.C. 1135) shall apply.

3 (b) ENFORCEMENT BY EXCISE TAX FOR CAR4 RIERS.—

5 (1) IN GENERAL.—Chapter 43 of the Internal

6 Revenue Code of 1986 (relating to qualified pension

7 plans, etc.) is amended by adding at the end thereof

8 the following new section:

9 ‘‘SEC. 4980C. FAILURE OF CARRIER TO COMPLY WITH

10 HEALTH INSURANCE STANDARDS.

11 ‘‘(a) IMPOSITION OF TAX.—

12 ‘‘(1) IN GENERAL.—There is hereby imposed a

13 tax on the failure of a carrier to comply with the re14 quirements applicable to the carrier under parts 1

15 through 4 of subtitle A and subtitle B of title I of

16 the Health Insurance Affordability Act of 1996.

17 ‘‘(2) EXCEPTION.—Paragraph (1) shall not

18 apply to a failure by a carrier in a State if the Sec19 retary of Health and Human Services determines

20 that the State has in effect a regulatory enforcement

21 mechanism that provides adequate sanctions with re22 spect to such a failure by such a carrier.

23 ‘‘(b) AMOUNT OF TAX.—

24 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

25 the amount of the tax imposed by subsection (a)
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1 shall be $100 for each day during which such failure

2 persists for each individual to which such failure re3 lates. A rule similar to the rule of section

4 4980B(b)(3) shall apply for purposes of this section.

5 ‘‘(2) LIMITATION.—The amount of the tax im6 posed by subsection (a) for a carrier with respect to

7 health insurance coverage shall not exceed 25 per8 cent of the amounts received for such coverage dur9 ing the period such failure persists.

10 ‘‘(c) LIABILITY FOR TAX.—The tax imposed by this

11 section shall be paid by the carrier.

12 ‘‘(d) EXCEPTIONS.—

13 ‘‘(1) CORRECTIONS WITHIN 30 DAYS.—No tax

14 shall be imposed by subsection (a) by reason of any

15 failure if—

16 ‘‘(A) such failure was due to reasonable

17 cause and not to willful neglect, and

18 ‘‘(B) such failure is corrected within the

19 30-day period beginning on the earliest date the

20 carrier knew, or exercising reasonable diligence

21 would have known, that such failure existed.

22 ‘‘(2) WAIVER BY SECRETARY.—In the case of a

23 failure which is due to reasonable cause and not to

24 willful neglect, the Secretary may waive part or all

25 of the tax imposed by subsection (a) to the extent
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1 that payment of such tax would be excessive relative

2 to the failure involved.

3 ‘‘(e) DEFINITIONS.—For purposes of this section, the

4 terms ‘health insurance coverage’ and ‘carrier’ have the

5 respective meanings given such terms in section 193 of

6 the Health Insurance Affordability Act of 1996.’’

7 (2) CLERICAL AMENDMENT.—The table of sec8 tions for chapter 43 of such Code is amended by

9 adding at the end thereof the following new item:

‘‘Sec. 4980C. Failure of carrier to comply with health insurance

standards.’’

10 SEC. 155. LIMITATION ON SELF INSURANCE FOR SMALL EM11 PLOYERS.

12 A single employer plan (as defined in section

13 3(40)(B) of the Employee Retirement Income Security

14 Act of 1974) may not offer health coverage other than

15 through a carrier unless the plan has at least 100 eligible

16 employees.

17 Subtitle G—Definitions; General

18 Provisions

19 SEC. 191. GENERAL DEFINITIONS.

20 For purposes of this Act:

21 (1) APPLICABLE REGULATORY AUTHORITY.—

22 The term ‘‘applicable regulatory authority’’ means,

23 with respect to a carrier operating in a State—

24 (A) the State insurance commissioner, or
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1 (B) the Secretary, in the case described in

2 section 152(b)(2).

3 (2) FAMILY MEMBER.—

4 (A) IN GENERAL.—Individuals are consid5 ered to be members of a family if—

6 (i) they are married, or

7 (ii) they have a legal parent-to-child

8 relationship (whether by natural birth or

9 adoption), if the child is—

10 (I) under 19 years of age,

11 (II) is under 25 years of age and

12 a full-time student, or

13 (III) an unmarried dependent re14 gardless of age who is incapable of

15 self-support because of mental or

16 physical disability which existed before

17 age 22.

18 (B) SPECIAL RULES.—Family members—

19 (i) include an adopted child and a rec20 ognized natural child;

21 (ii) include a stepchild or foster child

22 with respect to an individual but only if

23 the child lives with the individual in a reg24 ular parent-child relationship; and
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1 (iii) include such other children as the

2 Secretary may specify, but shall not in3 clude an emancipated minor.

4 (3) PRISONER.—The term ‘‘prisoner’’ means,

5 as specified by the Secretary, an individual during a

6 period of imprisonment under Federal, State, or

7 local authority after conviction as an adult.

8 (4) SECRETARY.—The term ‘‘Secretary’’ means

9 the Secretary of Health and Human Services.

10 (5) STATE.—The term ‘‘State’’ means the 50

11 States, the District of Columbia, Puerto Rico, the

12 Virgin Islands, Guam, American Samoa, and the

13 Northern Mariana Islands.

14 SEC. 192. DEFINITIONS RELATING TO EMPLOYMENT.

15 (a) APPLICATION OF ERISA DEFINITIONS.—Except

16 as otherwise provided in this Act, terms used in this Act

17 shall have the meanings applicable to such terms under

18 section 3 of the Employee Retirement Income Security Act

19 of 1974 (29 U.S.C. 1002).

20 (b) ADDITIONAL DEFINITIONS.—For purposes of this

21 title:

22 (1) COUNTABLE EMPLOYEE.—The term ‘‘count23 able employee’’ means, with respect to an employer

24 for a month, any employee other than an employee

25 whose normal work week is less than 10 hours.
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1 (2) LARGE EMPLOYER.—The term ‘‘large em2 ployer’’ means an employer that is not a small em3 ployer (as defined in paragraph (4)).

4 (3) QUALIFYING EMPLOYEE.—

5 (A) IN GENERAL.—The term ‘‘qualifying

6 employee’’ means, with respect to an employer

7 for a month, any employee other than—

8 (i) a part-time, seasonal, or temporary

9 employee (as defined in subparagraph

10 (B)); or

11 (ii) an employee who is a child de12 scribed in section 191(2)(A)(ii).

13 (B) PART-TIME, SEASONAL, OR TEM14 PORARY EMPLOYEE DEFINED.—For purposes of

15 subparagraph (A), the term ‘‘part-time, sea16 sonal, or temporary employee’’ means any of

17 the following employees with respect to a

18 month:

19 (i) CERTAIN PART-TIME EMPLOY20 EES.—Any employee whose normal work

21 week is reasonably expected as of the first

22 day of such month to be less than 20

23 hours.

24 (ii) SEASONAL OR TEMPORARY EM25 PLOYEES.—Any employee who is not rea-
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1 sonably expected as of the first day of such

2 month to be employed by the employer for

3 a period of 120 consecutive days during

4 any 365-day period that includes such first

5 day.

6 (iii) DELAY FOR CERTAIN PART-TIME

7 EMPLOYEES.—Any employee whose normal

8 work week is reasonably expected as of the

9 first day of such month to be at least 20

10 hours, but less than 35 hours, and the nor11 mal work week of the employee during the

12 preceding 3 months was less than 20

13 hours.

14 (4) SMALL EMPLOYER.—The term ‘‘small em15 ployer’’ means, with respect to a calendar year, an

16 employer that normally employs more than 1 but

17 less than 100 countable employees on a typical busi18 ness day. For the purposes of this paragraph, the

19 term ‘‘employee’’ includes a self-employed individual.

20 For purposes of determining if an employer is a

21 small employer, rules similar to the rules of sub22 section (b) and (c) of section 414 of the Internal

23 Revenue Code of 1986 shall apply.
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1 SEC. 193. DEFINITIONS RELATING TO HEALTH COVERAGE,

2 PLANS, AND CARRIERS.

3 Except as otherwise provided, for purposes of this

4 Act:

5 (1) BENCHMARK COVERAGE.—The term

6 ‘‘benchmark coverage’’ means the standard option of

7 the Blue Cross-Blue Shield plan offered under the

8 Federal Employees Health Benefits Program under

9 chapter 89 of title 5, United States Code, as in ef10 fect during 1994.

11 (2) CARRIER.—The term ‘‘carrier’’ means a li12 censed insurance company, an entity offering pre13 paid hospital or medical services, and a health main14 tenance organization, and includes a similar organi15 zation regulated under State law for solvency.

16 (3) CLASS OF FAMILY COVERAGE.—The term

17 ‘‘class of family coverage’’ means the 4 classes de18 scribed in section 121(a)(3).

19 (4) FAIR RATING AREA.—The term ‘‘fair rating

20 area’’ means a geographic area identified by a State

21 for purposes of section 121(a)(2).

22 (5) GROUP HEALTH PLAN.—The term ‘‘group

23 health plan’’ means an employee welfare benefit plan

24 providing medical care (as defined in section 213(d)

25 of the Internal Revenue Code of 1986) to partici26 pants or beneficiaries directly or through insurance,
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1 reimbursement, or otherwise, but does not include

2 any type of coverage excluded from the definition of

3 a health insurance coverage under paragraph (7)(B).

4 (6) HEALTH COVERAGE.—The term ‘‘health

5 coverage’’ means health insurance coverage provided

6 by a carrier or medical care provided under a group

7 health plan.

8 (7) HEALTH INSURANCE COVERAGE.—

9 (A) IN GENERAL.—Except as provided in

10 subparagraph (B), the term ‘‘health insurance

11 coverage’’ means any hospital or medical service

12 policy or certificate, hospital or medical service

13 plan contract, or health maintenance organiza14 tion group contract offered by a carrier.

15 (B) EXCEPTION.—Such term does not in16 clude any of the following (or any combination

17 of the following):

18 (i) Coverage only for accident, dental,

19 vision, disability income, or long-term care

20 insurance, or any combination thereof.

21 (ii) Medicare supplemental health in22 surance.

23 (iii) Coverage issued as a supplement

24 to liability insurance.
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1 (iv) Liability insurance, including gen2 eral liability insurance and automobile li3 ability insurance.

4 (v) Workers’ compensation or similar

5 insurance.

6 (vi) Automobile medical-payment in7 surance.

8 (vii) Coverage for a specified disease

9 or illness.

10 (viii) A hospital or fixed indemnity

11 policy.

12 (ix) Coverage provided exclusively to

13 individuals who are not eligible individuals.

14 (8) HEALTH MAINTENANCE ORGANIZATION.—

15 The term ‘‘health maintenance organization’’ in16 cludes, as defined in standards established under

17 section 143, an organization that provides health in18 surance coverage which meets specified standards

19 and under which health services are offered to be

20 provided on a prepaid, at-risk basis primarily

21 through a defined set of providers.

22 (9) INDIVIDUAL/SMALL GROUP MARKET.—The

23 term ‘‘individual/small group market’’ means the in24 surance market offered—
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1 (A) to individuals seeking health insurance

2 coverage on behalf of themselves (and their de3 pendents) insofar as no employer is seeking

4 such coverage on behalf of the individual, and

5 (B) to small employers seeking health in6 surance coverage on behalf of their employees

7 (and their dependents),

8 regardless of whether or not such coverage is made

9 available directly or through a multiple employer

10 welfare arrangement, association, or otherwise.

11 (10) MANAGED CARE ARRANGEMENTS.—

12 (A) MANAGED CARE ARRANGEMENT.—The

13 term ‘‘managed care arrangement’’ means, with

14 respect to a group health plan or under health

15 insurance coverage, an arrangement under such

16 plan or coverage under which providers agree to

17 provide items and services covered under the ar18 rangement to individuals covered under the

19 plan or who have such coverage.

20 (B) PROVIDER NETWORK.—The term

21 ‘‘provider network’’ means, with respect to a

22 group health plan or health insurance coverage,

23 providers who have entered into an agreement

24 described in subparagraph (A).
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1 (11) MULTIPLE EMPLOYER WELFARE AR2 RANGEMENT.—The term ‘‘multiple employer welfare

3 arrangement’’ shall have the meaning applicable

4 under section 3(40) of the Employee Retirement In5 come Security Act of 1974.

6 (12) NAIC.—The term ‘‘NAIC’’ means the Na7 tional Association of Insurance Commissioners.

8 (13) OPTIONS.—Each of the following is a

9 ‘‘type of coverage option’’ in relation to standard

10 coverage:

11 (A) FEE-FOR-SERVICE OPTION.—Standard

12 coverage is considered to provide a ‘‘fee-for13 service option’’ if, regardless of whether covered

14 individuals may receive benefits through a pro15 vider network, benefits with respect to the cov16 ered items and services in the coverage are

17 made available for such items and services pro18 vided through any lawful provider of such cov19 ered items and services and payment is made to

20 such a provider whether or not there is a con21 tractual arrangement between the provider and

22 the carrier or plan.

23 (B) MANAGED CARE OPTION.—Standard

24 coverage is considered to provide a ‘‘managed

25 care option’’ if benefits with respect to the cov-
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1 ered items and services in the coverage are

2 made available exclusively through a provider

3 network, except in the case of emergency serv4 ices and as otherwise required under law.

5 (C) POINT-OF-SERVICE OPTION.—Standard

6 coverage is considered to provide a ‘‘point-of7 service option’’ if the benefits with respect to

8 covered items and services in the coverage are

9 made available principally through a managed

10 care arrangement, with the choice of the en11 rollee to obtain such benefits for items and

12 services provided through any lawful provider of

13 such covered items and services. The coverage

14 may provide for different cost sharing schedules

15 based on whether the items and services are

16 provided through such an arrangement or out17 side such an arrangement.

18 (14) QUALIFIED HEALTH COVERAGE.—The

19 term ‘‘qualified health coverage’’ has the meaning

20 given such term in section 141.

21 (15) STANDARD COVERAGE.—The term ‘‘stand22 ard coverage’’ means coverage provided consistent

23 with section 142(a).
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1 (16) STATE COMMISSIONER OF INSURANCE.—

2 The term ‘‘State commissioner of insurance’’ in3 cludes a State superintendent of insurance.

4 SEC. 194. DEFINITIONS RELATING TO RESIDENCE AND IM5 MIGRATION STATUS.

6 Except as otherwise provided, for purposes of this

7 Act:

8 (1) ALIEN PERMANENTLY RESIDING IN THE

9 UNITED STATES UNDER COLOR OF LAW.—The term

10 ‘‘alien permanently residing in the United States

11 under color of law’’ means an alien lawfully admitted

12 for permanent residence (within the meaning of sec13 tion 101(a)(20) of the Immigration and Nationality

14 Act), and includes any of the following (such status

15 not having changed):

16 (A) An alien who is admitted as a refugee

17 under section 207 of the Immigration and Na18 tionality Act.

19 (B) An alien who is granted asylum under

20 section 208 of such Act.

21 (C) An alien whose deportation is withheld

22 under section 243(h) of such Act.

23 (D) An alien whose deportation is sus24 pended pursuant to section 244 of such Act.
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1 (E) An alien who is granted conditional

2 entry pursuant to section 203(a)(7) of such Act

3 as in effect before April 1, 1980.

4 (F) An alien who is admitted for tem5 porary residence under section 210, 210A, or

6 245A of such Act.

7 (G) An alien who is within a class of aliens

8 lawfully present in the United States pursuant

9 to any other provision of such Act, if (i) the At10 torney General determines that the continued

11 presence of such class of aliens serves a human12 itarian or other compelling public interest, and

13 (ii) the Secretary determines that such interest

14 would be further served by treating each such

15 alien within such class as a ‘‘legal permanent

16 resident’’ for purposes of this Act or who has

17 been granted extended voluntary departure as a

18 member of a nationality group.

19 (H) An alien who is the spouse or unmar20 ried child under 21 years of age of a citizen of

21 the United States, or the parent of such a citi22 zen if the citizen is over 21 years of age, and

23 with respect to whom an application for adjust24 ment to lawful permanent residence is pending.
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1 (I) An alien within such other classification

2 of permanent resident aliens as the Secretary

3 may establish by regulation.

4 (2) LONG-TERM NONIMMIGRANT.—The term

5 ‘‘long-term nonimmigrant’’ means a nonimmigrant

6 described in subparagraph (E), (H), (I), (K), (L),

7 (N), (O), (Q), or (R) of section 101(a)(15) of the

8 Immigration and Nationality Act.

9 (3) QUALIFYING INDIVIDUAL.—The term

10 ‘‘qualifying individual’’ means, an individual who is

11 a resident of the United States, who is not a pris12 oner, and is—

13 (A) a citizen or national of the United

14 States;

15 (B) an alien permanently residing in the

16 United States under color of law (as defined in

17 paragraph (1)); or

18 (C) a long-term nonimmigrant (as defined

19 in paragraph (2)).

20 SEC. 195. EFFECTIVE DATES.

21 The requirements of this title shall apply with respect

22 to—

23 (1) group health plans for plan years beginning

24 on or after January 1, 1997, and
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1 (2) carriers (with respect to coverage other than

2 under a group health plan) as of January 1, 1997.

3 TITLE II—ADMINISTRATIVE

4 SIMPLIFICATION

5 SEC. 200. PURPOSE.

6 It is the purpose of this title to improve the efficiency

7 and effectiveness of the health care system, including the

8 medicare program under title XVIII of the Social Security

9 Act and the medicaid program under title XIX of such

10 Act, by encouraging the development of a health informa11 tion network through the adoption of standards and the

12 establishment of requirements for the electronic trans13 mission of certain health information.

14 SEC. 201. DEFINITIONS.

15 For purposes of this title:

16 (1) CODE SET.—The term ‘‘code set’’ means

17 any set of codes used for encoding data elements,

18 such as tables of terms, medical concepts, medical

19 diagnostic codes, or medical procedure codes.

20 (2) COORDINATION OF BENEFITS.—The term

21 ‘‘coordination of benefits’’ means determining and

22 coordinating the financial obligations of plan spon23 sors when health care benefits are payable by more

24 than one such sponsor.
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1 (3) HEALTH INFORMATION.—The term ‘‘health

2 information’’ means any information that relates to

3 the past, present, or future physical or mental health

4 or condition or functional status of an individual,

5 the provision of health care to an individual, or pay6 ment for the provision of health care to an individ7 ual.

8 (4) HEALTH INFORMATION NETWORK.—The

9 term ‘‘health information network’’ means the health

10 information system that is formed through the appli11 cation of the requirements and standards established

12 under this title.

13 (5) HEALTH INFORMATION NETWORK SERV14 ICE.—The term ‘‘health information network serv15 ice’’—

16 (A) means a private entity or an entity op17 erated by a State that enters into contracts—

18 (i) to process or facilitate the process19 ing of nonstandard data elements of health

20 information into standard data elements;

21 (ii) to provide the means by which

22 persons are connected to the health infor23 mation network for purposes of meeting

24 the requirements of this title, including the
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1 holding of standard data elements of

2 health information;

3 (iii) to provide authorized access to

4 health information through the health in5 formation network; or

6 (iv) to provide specific information

7 processing services, such as automated co8 ordination of benefits and claims trans9 action routing; and

10 (B) includes a health information security

11 organization.

12 (6) HEALTH INFORMATION SECURITY ORGANI13 ZATION.—The term ‘‘health information security or14 ganization’’ means a private entity or an entity oper15 ated by a State that accesses standard data elements

16 of health information through the health information

17 network, processes such information into non-identi18 fiable health information, and may store such infor19 mation.

20 (7) HEALTH PROVIDER.—The term ‘‘health

21 provider’’ includes a provider of services (as defined

22 in section 1861(u) of the Social Security Act), a pro23 vider of medical or other health services (as defined

24 in section 1861(s) of such Act), and any other per-
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1 son (other than a plan sponsor) furnishing health

2 care items or services.

3 (8) INDIVIDUALLY IDENTIFIABLE HEALTH IN4 FORMATION.—The term ‘‘individually identifiable

5 health information’’ means health information in the

6 health information network—

7 (A) that identifies an individual who is the

8 subject of the information; or

9 (B) with respect to which there is a rea10 sonable basis to believe that the information

11 can be used to identify such an individual.

12 (9) NONIDENTIFIABLE HEALTH INFORMA13 TION.—The term ‘‘nonidentifiable health informa14 tion’’ means health information that is not individ15 ually identifiable health information.

16 (10) PLAN SPONSOR.—The term ‘‘plan spon17 sor’’ means—

18 (A) a carrier (as defined in section 193(2))

19 providing health insurance coverage (as defined

20 in section 193(7));

21 (B) a group health plan;

22 (C) an association or other entity which es23 tablishes or maintains a multiple employer wel24 fare arrangement (as defined in section

25 193(11)) providing benefits consisting of medi-
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1 cal care described in section 607(1) of the Em2 ployee Retirement Income Security Act of 1974;

3 and

4 (D) a State, or the Federal Government,

5 acting in a capacity as a provider of health ben6 efits to eligible individuals that is equivalent to

7 that of a carrier.

8 (11) STANDARD.—The term ‘‘standard’’, when

9 used with reference to a transaction or to data ele10 ments of health information, means that the trans11 action or data elements meet any standard adopted

12 by the Secretary under subtitle A that applies to the

13 transaction or data elements.

14 Subtitle A—Standards for Data

15 Elements and Transactions

16 SEC. 211. GENERAL REQUIREMENTS ON SECRETARY.

17 (a) IN GENERAL.—The Secretary shall adopt stand18 ards and modifications to standards under this subtitle

19 that are—

20 (1) consistent with the objective of reducing the

21 costs of providing and paying for health care; and

22 (2) in use and generally accepted, developed, or

23 modified by the standard-setting organizations ac24 credited by the American National Standard Insti25 tute.
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1 (b) INITIAL STANDARDS.—The Secretary may de2 velop an expedited process for the adoption of initial

3 standards under this part.

4 (c) PROTECTION OF COMMERCIAL INFORMATION.—

5 In adopting standards under this part, the Secretary may

6 not require disclosure of trade secrets or confidential com7 mercial information by any person.

8 SEC. 212. STANDARDS FOR DATA ELEMENTS OF HEALTH IN9 FORMATION.

10 (a) IN GENERAL.—The Secretary shall adopt stand11 ards necessary to make uniform and compatible for elec12 tronic transmission through the health information net13 work the data elements of any health information that the

14 Secretary determines is appropriate for transmission in

15 connection with a transaction described in section 221.

16 (b) ADDITIONS.—The Secretary may make additions

17 to any set of data elements adopted under subsection (a)

18 as the Secretary determines appropriate in a manner that

19 minimizes the disruption and cost of compliance with such

20 additions.

21 (c) CERTAIN DATA ELEMENTS.—

22 (1) UNIQUE HEALTH IDENTIFIERS.—The Sec23 retary shall establish a system to provide for a

24 standard unique health identifier for each individual,
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1 employer, plan sponsor, and health provider for use

2 in the health care system.

3 (2) CODE SETS.—

4 (A) IN GENERAL.—The Secretary, in con5 sultation with experts from the private sector

6 and Federal agencies, shall—

7 (i) select code sets for appropriate

8 data elements from among the code sets

9 that have been developed by private and

10 public entities; or

11 (ii) establish code sets for such data

12 elements if no code sets for the data ele13 ments have been developed.

14 (B) DISTRIBUTION.—The Secretary shall

15 establish efficient and low-cost procedures for

16 distribution of code sets and modifications to

17 code sets.

18 SEC. 213. INFORMATION TRANSACTION STANDARDS.

19 (a) IN GENERAL.—The Secretary shall adopt tech20 nical standards that are consistent with the health infor21 mation network privacy standards adopted under section

22 214 relating to the method by which standard data ele23 ments of health information may be transmitted electroni24 cally, including standards with respect to the format in

25 which such data elements may be transmitted.
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1 (b) SPECIAL RULE FOR COORDINATION OF BENE2 FITS.—Any standard adopted by the Secretary under

3 paragraph (1) that relates to coordination of benefits shall

4 provide that a claim for reimbursement for health services

5 furnished shall be tested, by an algorithm specified by the

6 Secretary, against all records of enrollment and eligibility

7 for the individual who received such services that are avail8 able to the recipient of the claim through the health infor9 mation network to determine any primary and secondary

10 obligors for payment.

11 (c) ELECTRONIC SIGNATURE.—The Secretary, in co12 ordination with the Secretary of Commerce, shall promul13 gate regulations specifying procedures for the electronic

14 transmission and authentication of signatures, compliance

15 with which shall be deemed to satisfy State and Federal

16 statutory requirements for written signatures with respect

17 to transactions described in section 221 and written signa18 tures on health records and prescriptions.

19 (d) STANDARDS FOR CLAIMS FOR CLINICAL LABORA20 TORY TESTS.—The standards under this section shall pro21 vide that claims for clinical laboratory tests for which ben22 efits are payable by a plan sponsor shall be submitted di23 rectly by the person or entity that performed (or super24 vised the performance of) the tests to the sponsor in a

25 manner consistent with (and subject to such exceptions
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1 as are provided under) the requirement for direct submis2 sion of such claims under the medicare program.

3 SEC. 214. HEALTH INFORMATION NETWORK PRIVACY

4 STANDARDS.

5 The Secretary shall adopt standards respecting the

6 privacy of individually identifiable health information that

7 is in the health information network. Such standards shall

8 include standards concerning at least the following:

9 (1) The rights of an individual who is the sub10 ject of such information.

11 (2) The procedures to be established for the ex12 ercise of such rights.

13 (3) The uses and disclosures of such informa14 tion that are authorized or required.

15 (4) Safeguards for the security of such informa16 tion and adequate security practices.

17 SEC. 215. TIMETABLES FOR ADOPTION OF STANDARDS.

18 (a) INITIAL STANDARDS FOR DATA ELEMENTS.—

19 The Secretary shall adopt standards relating to—

20 (1) the data elements for the information de21 scribed in section 212(a) not later than 9 months

22 after the date of the enactment of this Act (except

23 in the case of standards with respect to data ele24 ments for claims attachments, which shall be adopt-
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1 ed not later than 24 months after the date of the

2 enactment of this Act); and

3 (2) any addition to a set of data elements, in

4 conjunction with making such an addition.

5 (b) INITIAL PRIVACY STANDARDS.—The Secretary

6 shall adopt standards relating to the privacy of individ7 ually identifiable health information in the health informa8 tion network under section 214 not later than 12 months

9 after the date of the enactment of this Act.

10 (c) INITIAL STANDARDS FOR INFORMATION TRANS11 ACTIONS.—The Secretary shall adopt standards relating

12 to information transactions under section 213 not later

13 than 18 months after the date of the enactment of this

14 Act (except in the case of standards for claims attach15 ments, which shall be adopted not later than 24 months

16 after the date of the enactment of this Act).

17 (d) MODIFICATIONS TO STANDARDS.—

18 (1) IN GENERAL.—Except as provided in para19 graph (2), the Secretary shall review the standards

20 adopted under this subtitle and shall adopt modified

21 standards as determined appropriate, but not more

22 frequently than once every 6 months. Any modifica23 tion to standards shall be completed in a manner

24 which minimizes the disruption to, and costs of com25 pliance incurred by, a plan sponsor, health provider,
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1 or health plan purchasing organization that is re2 quired to comply with subtitle B.

3 (2) SPECIAL RULES.—

4 (A) MODIFICATIONS DURING FIRST 12-

5 MONTH PERIOD.—Except with respect to addi6 tions and modifications to code sets under sub7 paragraph (B), the Secretary may not adopt

8 any modification to a standard adopted under

9 this subtitle during the 12-month period begin10 ning on the date the standard is adopted, un11 less the Secretary determines that the modifica12 tion is necessary in order to permit a plan spon13 sor, a health provider, or a health plan purchas14 ing organization to comply with subtitle B.

15 (B) ADDITIONS AND MODIFICATIONS TO

16 CODE SETS.—

17 (i) IN GENERAL.—The Secretary shall

18 ensure that procedures exist for the rou19 tine maintenance, testing, enhancement,

20 and expansion of code sets.

21 (ii) ADDITIONAL RULES.—If a code

22 set is modified under this subsection, the

23 modified code set shall include instructions

24 on how data elements that were encoded

25 prior to the modification are to be con-
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1 verted or translated so as to preserve the

2 value of the data elements. Any modifica3 tion to a code set under this subsection

4 shall be implemented in a manner that

5 minimizes the disruption to, and costs of

6 compliance incurred by, a plan sponsor,

7 health provider, or health plan purchasing

8 organization that is required to comply

9 with subtitle B.

10 (e) EVALUATION OF STANDARDS.—The Secretary

11 may establish a process to measure or verify the consist12 ency of standards adopted or modified under this part.

13 Such process may include demonstration projects and

14 analyses of the cost of implementing such standards and

15 modifications.

16 Subtitle B—Requirements with Re17 spect to Certain Transactions

18 and Information

19 SEC. 221. STANDARD TRANSACTIONS AND INFORMATION.

20 (a) TRANSACTIONS BY SPONSORS.—

21 (1) TRANSACTIONS WITH PROVIDERS.—If a

22 plan sponsor conducts any of the transactions de23 scribed in paragraph (3) with a health provider—

24 (A) the transaction shall be a standard

25 transaction; and
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1 (B) the health information transmitted by

2 the sponsor to the provider or by the provider

3 to the sponsor in connection with the trans4 action shall be in the form of standard data ele5 ments.

6 (2) TRANSACTIONS WITH SPONSORS.—If a plan

7 sponsor conducts any of the transactions described

8 in paragraph (3) with another plan sponsor—

9 (A) the transaction shall be a standard

10 transaction; and

11 (B) the health information transmitted by

12 either sponsor in connection with the trans13 action shall be in the form of standard data ele14 ments.

15 (3) TRANSACTIONS.—The transactions referred

16 to in paragraphs (1) and (2) are the following:

17 (A) Verification of eligibility for benefits.

18 (B) Coordination of benefits.

19 (C) Claim submission.

20 (D) Claim attachment submission.

21 (E) Claim status notification.

22 (F) Claim status verification.

23 (G) Claim adjudication.

24 (H) Payment and remittance advice.
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1 (I) Certification or authorization of a re2 ferral to a health provider who is not part of a

3 provider network.

4 (b) USE OF HEALTH INFORMATION NETWORK SERV5 ICES.—A plan sponsor, a health provider, or a health plan

6 purchasing organization may comply with any provision

7 of this section by entering into an agreement or other ar8 rangement with a health information network service cer9 tified under section 231 pursuant to which the service un10 dertakes the duties applicable to the sponsor, provider, or

11 organization under the provision.

12 SEC. 222. ACCESSING HEALTH INFORMATION FOR AUTHOR13 IZED PURPOSES.

14 (a) PROCUREMENT RULE FOR GOVERNMENT AGEN15 CIES.—

16 (1) IN GENERAL.—A health information secu17 rity organization that is certified under section 231

18 shall make available to a Federal or State agency,

19 pursuant to a cost-type contract (as defined under

20 the Federal Acquisition Regulation), any non-identi21 fiable health information, including non-identifiable

22 health information that is derived from individually

23 identifiable health information, that—
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1 (A) is held by the service or may be ob2 tained by the service under paragraph (2) or

3 subsection (b);

4 (B) consists of data elements that are sub5 ject to a standard under subtitle A; and

6 (C) is requested by the agency to fulfill a

7 requirement under this Act.

8 (2) CERTAIN INFORMATION AVAILABLE AT LOW

9 COST.—If a health information security organization

10 requires health information consisting of data ele11 ments that are subject to a standard under subtitle

12 A from a plan sponsor or a health provider in order

13 to comply with a request made by a Federal or State

14 agency under paragraph (1), the sponsor or provider

15 shall make such information available to such orga16 nization for a charge that does not exceed the rea17 sonable cost of transmitting the information.

18 (b) PROCUREMENT RULE FOR INFORMATION SECU19 RITY ORGANIZATIONS.—A health information security or20 ganization that makes non-identifiable health information

21 available to a Federal or State agency under subsection

22 (a) shall make such non-identifiable information available,

23 for a charge that does not exceed the reasonable cost of

24 transmitting the information, to any other health informa25 tion security organization that—
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1 (A) is certified under section 231; and

2 (B) requests the information.

3 SEC. 223. ENSURING AVAILABILITY OF INFORMATION.

4 The Secretary shall establish a procedure under

5 which a plan sponsor or health provider that does not have

6 the ability to transmit standard data elements directly,

7 and does not have access to a health information network

8 service certified under section 231, may comply with the

9 provisions of this part.

10 SEC. 224. TIMETABLES FOR COMPLIANCE WITH REQUIRE11 MENTS.

12 (a) INITIAL COMPLIANCE.—

13 (1) IN GENERAL.—Not later than 12 months

14 after the date on which standards are adopted under

15 subtitle A with respect to a type of transaction, or

16 data elements for a type of health information, a

17 plan sponsor, health provider, or health plan pur18 chasing organization shall comply with the require19 ments of this subtitle with respect to such trans20 action or information.

21 (2) ADDITIONAL DATA ELEMENTS.—Not later

22 than 12 months after the date on which the Sec23 retary adopts an addition to a set of data elements

24 for health information under section 212, a plan

25 sponsor, health provider, or health plan purchasing
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1 organization shall comply with the requirements of

2 this subtitle using such data elements.

3 (b) COMPLIANCE WITH MODIFIED STANDARDS.—

4 (1) IN GENERAL.—If the Secretary adopts a

5 modified standard under section 215(c), a plan

6 sponsor, health provider, or health plan purchasing

7 organization shall comply with the modified standard

8 at such time as the Secretary determines appro9 priate, taking into account the time needed to com10 ply due to the nature and extent of the modification.

11 (2) SPECIAL RULE.—In the case of a modifica12 tion to a standard that does not occur within the 12-

13 month period beginning on the date the standard is

14 adopted, the time determined appropriate by the

15 Secretary under paragraph (1) may not be—

16 (A) earlier than the last day of the 90-day

17 period beginning on the date the modified

18 standard is adopted; or

19 (B) later than the last day of the 12-

20 month period beginning on the date the modi21 fied standard is adopted.
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1 Subtitle C—Miscellaneous

2 Provisions

3 SEC. 231. STANDARDS AND CERTIFICATION FOR HEALTH

4 INFORMATION NETWORK SERVICES.

5 (a) STANDARDS FOR OPERATION.—The Secretary

6 shall establish standards with respect to the operation of

7 health information network services, including standards

8 ensuring that such services—

9 (1) develop, operate, and cooperate with one an10 other to form the health information network;

11 (2) meet all of the standards adopted under

12 subtitle A that are applicable to the services;

13 (3) make public information concerning their

14 performance, as measured by uniform indicators

15 such as accessibility, transaction responsiveness, ad16 ministrative efficiency, reliability, dependability, and

17 any other indicator determined appropriate by the

18 Secretary; and

19 (4) if they are part of a larger organization,

20 have policies and procedures in place which isolate

21 their activities with respect to processing informa22 tion in a manner that prevents access to such infor23 mation by such larger organization.

24 (b) CERTIFICATION BY THE SECRETARY.—
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1 (1) ESTABLISHMENT.—Not later than 18

2 months after the date of the enactment of this Act,

3 the Secretary shall establish a certification proce4 dure for health information network services which

5 ensures that certified services are qualified to meet

6 the requirements of this title and the standards es7 tablished by the Secretary under this section. Such

8 certification procedure shall be implemented in a

9 manner that minimizes the costs and delays of oper10 ations for such services.

11 (2) APPLICATION.—Each entity desiring to be

12 certified as a health information network service

13 shall apply to the Secretary for certification in a

14 form and manner determined appropriate by the

15 Secretary.

16 (3) AUDITS AND REPORTS.—The procedure es17 tablished under paragraph (1) shall provide for au18 dits by the Secretary and reports by an entity cer19 tified under this section as the Secretary determines

20 appropriate in order to monitor such entity’s compli21 ance with the requirements of this title and the

22 standards established by the Secretary under this

23 section.
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1 (4) RECERTIFICATION.—A health information

2 network service shall be recertified under this sub3 section at least every 3 years.

4 (c) LOSS OF CERTIFICATION.—

5 (1) MANDATORY TERMINATION.—Except as

6 provided in paragraph (2), if a health information

7 network service violates a health information net8 work privacy standard adopted under section 214

9 that is applicable to the service, its certification

10 under this section shall be terminated unless the

11 Secretary determines that appropriate corrective ac12 tion has been taken.

13 (2) CONDITIONAL CERTIFICATION—The Sec14 retary may establish a procedure under which a

15 health information network service may remain cer16 tified on a conditional basis if the service is operat17 ing consistently with a plan intended to correct any

18 violations described in paragraph (1). Such proce19 dure may provide for the appointment of a trustee

20 to continue operation of the service until the require21 ments for full certification are met.

22 (d) CERTIFICATION BY PRIVATE ENTITIES.—The

23 Secretary may designate private entities to conduct the

24 certification procedures established by the Secretary under

25 this section. A health information network service certified
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1 by such an entity in accordance with such designation

2 shall be considered to be certified by the Secretary.

3 (e) INFORMATION HELD BY HEALTH INFORMATION

4 NETWORK SERVICES.—If a health information network

5 service certified under this section loses its certified status

6 or takes any action that would threaten the continued

7 availability of the standard data elements of health infor8 mation held by such service, such data elements shall be

9 transferred to another health information network service

10 certified under this section that has been designated by

11 the Secretary.

12 SEC. 232. IMPOSITION OF ADDITIONAL REQUIREMENTS.

13 (a) IN GENERAL.—Except as provided in subsection

14 (c), after the Secretary has established standards under

15 section 212 that are necessary to make uniform and com16 patible for electronic transmission the data elements that

17 the Secretary determines are appropriate for transmission

18 in connection with a transaction described in subtitle B,

19 an individual or entity may not require an individual or

20 entity, to provide in any manner any additional data ele21 ment in connection with—

22 (1) the transaction; or

23 (2) an inquiry with respect to the transaction.

24 (b) TRANSMISSION METHOD.—Except as provided in

25 subsection (c), after the Secretary has established stand-
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1 ards under section 213 relating to the method by which

2 data elements that the Secretary determines are appro3 priate for transmission in connection with a transaction

4 described in subtitle B may be transmitted electronically,

5 an individual or entity may not require an individual or

6 entity to transmit any data element in a manner inconsist7 ent with the standards in connection with—

8 (1) the transaction; or

9 (2) an inquiry with respect to the transaction.

10 (c) EXCEPTION.—Subsections (a) and (b) do not

11 apply if—

12 (1) an individual or entity voluntarily agrees to

13 provide the additional data element; or

14 (2) a waiver is granted under subsection (d) to

15 permit the requirement to be imposed.

16 (d) CONDITIONS FOR WAIVERS.—

17 (1) IN GENERAL.—An individual or entity may

18 request a waiver from the Secretary in order to im19 pose on an individual or entity a requirement other20 wise prohibited under subsection (a) or (b). Subject

21 to paragraph (2), the Secretary may grant such a

22 waiver.

23 (2) CONSIDERATION OF WAIVER REQUESTS.—A

24 waiver may not be granted under this subsection to

25 impose an otherwise prohibited requirement unless
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1 the Secretary determines that the value of any addi2 tional information to be provided under the require3 ment for research or other purposes significantly

4 outweighs the administrative cost of the imposition

5 of the requirement, taking into account the burden

6 of the timing of the imposition of the requirement.

7 (e) ANONYMOUS REPORTING.—If an individual or en8 tity attempts to impose on an individual or entity a re9 quirement prohibited under subsection (a) or (b), the indi10 vidual or entity on whom the requirement is being imposed

11 may contact the Secretary. The Secretary shall develop a

12 procedure under which an individual or entity that con13 tacts the Secretary under the preceding sentence shall re14 main anonymous. The Secretary shall notify the individual

15 or entity imposing the requirement that the requirement

16 may not be imposed unless the other individual or entity

17 voluntarily agrees to such requirement or a waiver is ob18 tained under subsection (d).

19 SEC. 233. EFFECT ON STATE LAW.

20 (a) IN GENERAL.—Except as otherwise provided in

21 this section, a provision, requirement, or standard under

22 this title shall supersede any contrary provision of State

23 law.

24 (b) STATE ‘‘QUILL AND PEN’’ LAWS.—A State may

25 not establish, continue in effect, or enforce any provision
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1 of State law that requires medical or health plan records

2 (including billing information) to be maintained or trans3 mitted in written rather than electronic form, except

4 where the Secretary determines that the provision is nec5 essary to prevent fraud and abuse, with respect to con6 trolled substances, or for other purposes.

7 (c) PUBLIC HEALTH REPORTING.—Nothing in this

8 title shall be construed to invalidate or limit the authority,

9 power, or procedures established under any law providing

10 for the reporting of disease or injury, child abuse, birth,

11 or death, public health surveillance, or public health inves12 tigation or intervention.

13 (d) PUBLIC USE FUNCTIONS.—Nothing in this title

14 shall be construed to limit the authority of a Federal or

15 State agency to make non-identifiable health information

16 available for public use.

17 (e) PAYMENT FOR HEALTH CARE SERVICES OR PRE18 MIUMS.—Nothing in this title shall be construed to pro19 hibit a consumer from paying for health care items or

20 services, or plan or health insurance coverage premiums,

21 by debit, credit, or other payment cards or numbers or

22 other electronic payment means.
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1 TITLE III—ANTITRUST

2 SEC. 301. PUBLICATION OF ANTITRUST GUIDELINES ON AC3 TIVITIES OF HEALTH PLANS.

4 (a) IN GENERAL.—The Attorney General shall pro5 vide for the development and publication of explicit guide6 lines on the application of antitrust laws to the activities

7 of health plans. The guidelines shall be designed to facili8 tate development and operation of plans, consistent with

9 the antitrust laws.

10 (b) REVIEW PROCESS.—The Attorney General shall

11 establish a review process under which the administrator

12 or sponsor of a health plan (or organization that proposes

13 to administer or sponsor a health plan) may submit a re14 quest to the Attorney General to obtain a prompt opinion

15 (but in no event later than 90 days after the Attorney

16 General receives the request) from the Department of Jus17 tice on the plan’s conformity with the Federal antitrust

18 laws.

19 (c) DEFINITIONS.—In this section—

20 (1) the term ‘‘antitrust laws’’—

21 (A) has the meaning given it in subsection

22 (a) of the first section of the Clayton Act (15

23 U.S.C. 12(a)), except that such term includes

24 section 5 of the Federal Trade Commission Act
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1 (15 U.S.C. 45) to the extent such section ap2 plies to unfair methods of competition, and

3 (B) includes any State law similar to the

4 laws referred to in subparagraph (A); and

5 (2) the term ‘‘health plan’’ means any contract

6 or arrangement under which an entity bears all or

7 part of the cost of providing health care items and

8 services, including a hospital or medical expense in9 curred policy or certificate, hospital or medical serv10 ice plan contract, or health maintenance subscriber

11 contract, but does not include—

12 (A) coverage only for accident, dental, vi13 sion, disability, or long term care, medicare

14 supplemental health insurance, or any combina15 tion thereof,

16 (B) coverage issued as a supplement to li17 ability insurance,

18 (C) workers’ compensation or similar in19 surance, or

20 (D) automobile medical-payment insur21 ance.

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