II 

109TH CONGRESS 

1ST SESSION S. 1955 

To amend title I of the Employee Retirement Security Act of 1974 and 

the Public Health Service Act to expand health care access and reduce 

costs through the creation of small business health plans and through 

modernization of the health insurance marketplace. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 2, 2005 

Mr. ENZI (for himself, Mr. NELSON of Nebraska, and Mr. BURNS) introduced 

the following bill; which was read twice and referred to the Committee 

on Health, Education, Labor, and Pensions 

A BILL 

To amend title I of the Employee Retirement Security Act 

of 1974 and the Public Health Service Act to expand 

health care access and reduce costs through the creation 

of small business health plans and through modernization 

of the health insurance marketplace. 

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

3 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

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

5 ‘‘Health Insurance Marketplace Modernization and Af6 fordability Act of 2005’’. 
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1 (b) TABLE OF CONTENTS.—The table of contents is 

2 as follows: 

Sec. 1. Short title and table of contents. 

TITLE I—SMALL BUSINESS HEALTH PLANS 

Sec. 101. Rules governing small business health plans. 

Sec. 102. Cooperation between Federal and State authorities. 

Sec. 103. Effective date and transitional and other rules. 

TITLE II—NEAR-TERM MARKET RELIEF 

Sec. 201. Near-term market relief. 

TITLE III—HARMONIZATION OF HEALTH INSURANCE LAWS 

Sec. 301. Health Insurance Regulatory Harmonization. 

3 TITLE I—SMALL BUSINESS 

4 HEALTH PLANS 

5 SEC. 101. RULES GOVERNING SMALL BUSINESS HEALTH 

6 PLANS. 

7 (a) IN GENERAL.—Subtitle B of title I of the Em8 ployee Retirement Income Security Act of 1974 is amend9 ed by adding after part 7 the following new part: 

10 ‘‘PART 8—RULES GOVERNING SMALL BUSINESS 

11 HEALTH PLANS 

12 ‘‘SEC. 801. SMALL BUSINESS HEALTH PLANS. 

13 ‘‘(a) IN GENERAL.—For purposes of this part, the 

14 term ‘small business health plan’ means a fully insured 

15 group health plan whose sponsor is (or is deemed under 

16 this part to be) described in subsection (b). 

17 ‘‘(b) SPONSORSHIP.—The sponsor of a group health 

18 plan is described in this subsection if such sponsor— 
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1 ‘‘(1) is organized and maintained in good faith, 

2 with a constitution and bylaws specifically stating its 

3 purpose and providing for periodic meetings on at 

4 least an annual basis, as a bona fide trade associa5 tion, a bona fide industry association (including a 

6 rural electric cooperative association or a rural tele7 phone cooperative association), a bona fide profes8 sional association, or a bona fide chamber of com9 merce (or similar bona fide business association, in10 cluding a corporation or similar organization that 

11 operates on a cooperative basis (within the meaning 

12 of section 1381 of the Internal Revenue Code of 

13 1986)), for substantial purposes other than that of 

14 obtaining or providing medical care; 

15 ‘‘(2) is established as a permanent entity which 

16 receives the active support of its members and re17 quires for membership payment on a periodic basis 

18 of dues or payments necessary to maintain eligibility 

19 for membership in the sponsor; and 

20 ‘‘(3) does not condition membership, such dues 

21 or payments, or coverage under the plan on the 

22 basis of health status-related factors with respect to 

23 the employees of its members (or affiliated mem24 bers), or the dependents of such employees, and does 
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1 not condition such dues or payments on the basis of 

2 group health plan participation. 

3 Any sponsor consisting of an association of entities which 

4 meet the requirements of paragraphs (1), (2), and (3) 

5 shall be deemed to be a sponsor described in this sub6 section. 

7 ‘‘SEC. 802. CERTIFICATION OF SMALL BUSINESS HEALTH 

8 PLANS. 

9 ‘‘(a) IN GENERAL.—Not later than 6 months after 

10 the date of enactment of this part, the applicable authority 

11 shall prescribe by interim final rule a procedure under 

12 which the applicable authority shall certify small business 

13 health plans which apply for certification as meeting the 

14 requirements of this part. 

15 ‘‘(b) REQUIREMENTS APPLICABLE TO CERTIFIED

16 PLANS.—a small business health plan with respect to 

17 which certification under this part is in effect shall meet 

18 the applicable requirements of this part, effective on the 

19 date of certification (or, if later, on the date on which the 

20 plan is to commence operations). 

21 ‘‘(c) REQUIREMENTS FOR CONTINUED CERTIFI22 CATION.—The applicable authority may provide by regula23 tion for continued certification of small business health 

24 plans under this part. Such regulation shall provide for 

25 the revocation of a certification if the applicable authority 
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1 finds that the small employer health plan involved is fail2 ing to comply with the requirements of this part. 

3 ‘‘(d) CLASS CERTIFICATION FOR FULLY INSURED

4 PLANS.—The applicable authority shall establish a class 

5 certification procedure for small business health plans 

6 under which all benefits consist of health insurance cov7 erage. Under such procedure, the applicable authority 

8 shall provide for the granting of certification under this 

9 part to the plans in each class of such small business 

10 health plans upon appropriate filing under such procedure 

11 in connection with plans in such class and payment of the 

12 prescribed fee under section 806(a). 

13 ‘‘SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND 

14 BOARDS OF TRUSTEES. 

15 ‘‘(a) SPONSOR.—The requirements of this subsection 

16 are met with respect to a small business health plan if 

17 the sponsor has met (or is deemed under this part to have 

18 met) the requirements of section 801(b) for a continuous 

19 period of not less than 3 years ending with the date of 

20 the application for certification under this part. 

21 ‘‘(b) BOARD OF TRUSTEES.—The requirements of 

22 this subsection are met with respect to a small business 

23 health plan if the following requirements are met: 

24 ‘‘(1) FISCAL CONTROL.—The plan is operated, 

25 pursuant to a plan document, by a board of trustees 
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1 which pursuant to a trust agreement has complete 

2 fiscal control over the plan and which is responsible 

3 for all operations of the plan. 

4 ‘‘(2) RULES OF OPERATION AND FINANCIAL

5 CONTROLS.—The board of trustees has in effect 

6 rules of operation and financial controls, based on a 

7 3-year plan of operation, adequate to carry out the 

8 terms of the plan and to meet all requirements of 

9 this title applicable to the plan. 

10 ‘‘(3) RULES GOVERNING RELATIONSHIP TO

11 PARTICIPATING EMPLOYERS AND TO CONTRAC12 TORS.— 

13 ‘‘(A) BOARD MEMBERSHIP.— 

14 ‘‘(i) IN GENERAL.—Except as pro15 vided in clauses (ii) and (iii), the members 

16 of the board of trustees are individuals se17 lected from individuals who are the owners, 

18 officers, directors, or employees of the par19 ticipating employers or who are partners in 

20 the participating employers and actively 

21 participate in the business. 

22 ‘‘(ii) LIMITATION.— 

23 ‘‘(I) GENERAL RULE.—Except as 

24 provided in subclauses (II) and (III), 

25 no such member is an owner, officer, 
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1 director, or employee of, or partner in, 

2 a contract administrator or other 

3 service provider to the plan. 

4 ‘‘(II) LIMITED EXCEPTION FOR

5 PROVIDERS OF SERVICES SOLELY ON

6 BEHALF OF THE SPONSOR.—Officers 

7 or employees of a sponsor which is a 

8 service provider (other than a contract 

9 administrator) to the plan may be 

10 members of the board if they con11 stitute not more than 25 percent of 

12 the membership of the board and they 

13 do not provide services to the plan 

14 other than on behalf of the sponsor. 

15 ‘‘(III) TREATMENT OF PRO16 VIDERS OF MEDICAL CARE.—In the 

17 case of a sponsor which is an associa18 tion whose membership consists pri19 marily of providers of medical care, 

20 subclause (I) shall not apply in the 

21 case of any service provider described 

22 in subclause (I) who is a provider of 

23 medical care under the plan. 

24 ‘‘(iii) CERTAIN PLANS EXCLUDED.— 

25 Clause (i) shall not apply to a small busi-
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1 ness health plan which is in existence on 

2 the date of the enactment of the Health 

3 Insurance Marketplace Modernization and 

4 Affordability Act of 2005. 

5 ‘‘(B) SOLE AUTHORITY.—The board has 

6 sole authority under the plan to approve appli7 cations for participation in the plan and to con8 tract with insurers and service providers. 

9 ‘‘(c) TREATMENT OF FRANCHISE NETWORKS.—In 

10 the case of a group health plan which is established and 

11 maintained by a franchiser for a franchise network con12 sisting of its franchisees— 

13 ‘‘(1) the requirements of subsection (a) and sec14 tion 801(a) shall be deemed met if such require15 ments would otherwise be met if the franchiser were 

16 deemed to be the sponsor referred to in section 

17 801(b), such network were deemed to be an associa18 tion described in section 801(b), and each franchisee 

19 were deemed to be a member (of the association and 

20 the sponsor) referred to in section 801(b); and 

21 ‘‘(2) the requirements of section 804(a)(1) shall 

22 be deemed met. 

23 The Secretary may by regulation define for purposes of 

24 this subsection the terms ‘franchiser’, ‘franchise network’, 

25 and ‘franchisee’. 
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1 ‘‘SEC. 804. PARTICIPATION AND COVERAGE REQUIRE2 MENTS. 

3 ‘‘(a) COVERED EMPLOYERS AND INDIVIDUALS.—The 

4 requirements of this subsection are met with respect to 

5 a small business health plan if, under the terms of the 

6 plan— 

7 ‘‘(1) each participating employer must be— 

8 ‘‘(A) a member of the sponsor; 

9 ‘‘(B) the sponsor; or 

10 ‘‘(C) an affiliated member of the sponsor 

11 with respect to which the requirements of sub12 section (b) are met, except that, in the case of 

13 a sponsor which is a professional association or 

14 other individual-based association, if at least 

15 one of the officers, directors, or employees of an 

16 employer, or at least one of the individuals who 

17 are partners in an employer and who actively 

18 participates in the business, is a member or 

19 such an affiliated member of the sponsor, par20 ticipating employers may also include such em21 ployer; and 

22 ‘‘(2) all individuals commencing coverage under 

23 the plan after certification under this part must 

24 be— 

25 ‘‘(A) active or retired owners (including 

26 self-employed individuals), officers, directors, or 
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1 employees of, or partners in, participating em2 ployers; or 

3 ‘‘(B) the beneficiaries of individuals de4 scribed in subparagraph (A). 

5 ‘‘(b) COVERAGE OF PREVIOUSLY UNINSURED EM6 PLOYEES.—In the case of a small business health plan in 

7 existence on the date of the enactment of the Health In8 surance Marketplace Modernization and Affordability Act 

9 of 2005, an affiliated member of the sponsor of the plan 

10 may be offered coverage under the plan as a participating 

11 employer only if— 

12 ‘‘(1) the affiliated member was an affiliated 

13 member on the date of certification under this part; 

14 or 

15 ‘‘(2) during the 12-month period preceding the 

16 date of the offering of such coverage, the affiliated 

17 member has not maintained or contributed to a 

18 group health plan with respect to any of its employ19 ees who would otherwise be eligible to participate in 

20 such small business health plan. 

21 ‘‘(c) INDIVIDUAL MARKET UNAFFECTED.—The re22 quirements of this subsection are met with respect to a 

23 small business health plan if, under the terms of the plan, 

24 no participating employer may provide health insurance 

25 coverage in the individual market for any employee not 
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1 covered under the plan which is similar to the coverage 

2 contemporaneously provided to employees of the employer 

3 under the plan, if such exclusion of the employee from cov4 erage under the plan is based on a health status-related 

5 factor with respect to the employee and such employee 

6 would, but for such exclusion on such basis, be eligible 

7 for coverage under the plan. 

8 ‘‘(d) PROHIBITION OF DISCRIMINATION AGAINST

9 EMPLOYERS AND EMPLOYEES ELIGIBLE TO PARTICI10 PATE.—The requirements of this subsection are met with 

11 respect to a small business health plan if— 

12 ‘‘(1) under the terms of the plan, all employers 

13 meeting the preceding requirements of this section 

14 are eligible to qualify as participating employers for 

15 all geographically available coverage options, unless, 

16 in the case of any such employer, participation or 

17 contribution requirements of the type referred to in 

18 section 2711 of the Public Health Service Act are 

19 not met; 

20 ‘‘(2) upon request, any employer eligible to par21 ticipate is furnished information regarding all cov22 erage options available under the plan; and 

23 ‘‘(3) the applicable requirements of sections 

24 701, 702, and 703 are met with respect to the plan. 
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1 ‘‘SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN 

2 DOCUMENTS, CONTRIBUTION RATES, AND 

3 BENEFIT OPTIONS. 

4 ‘‘(a) IN GENERAL.—The requirements of this section 

5 are met with respect to a small business health plan if 

6 the following requirements are met: 

7 ‘‘(1) CONTENTS OF GOVERNING INSTRU8 MENTS.— 

9 ‘‘(A) IN GENERAL.—The instruments gov10 erning the plan include a written instrument, 

11 meeting the requirements of an instrument re12 quired under section 402(a)(1), which— 

13 ‘‘(i) provides that the board of direc14 tors serves as the named fiduciary required 

15 for plans under section 402(a)(1) and 

16 serves in the capacity of a plan adminis17 trator (referred to in section 3(16)(A)); 

18 and 

19 ‘‘(ii) provides that the sponsor of the 

20 plan is to serve as plan sponsor (referred 

21 to in section 3(16)(B)). 

22 ‘‘(B) DESCRIPTION OF MATERIAL PROVI23 SIONS.—The terms of the health insurance cov24 erage (including the terms of any individual 

25 certificates that may be offered to individuals in 

26 connection with such coverage) describe the ma-
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1 terial benefit and rating, and other provisions 

2 set forth in this section and such material pro3 visions are included in the summary plan de4 scription. 

5 ‘‘(2) CONTRIBUTION RATES MUST BE NON6 DISCRIMINATORY.— 

7 ‘‘(A) IN GENERAL.—The contribution rates 

8 for any participating small employer shall not 

9 vary on the basis of any health status-related 

10 factor in relation to employees of such employer 

11 or their beneficiaries and shall not vary on the 

12 basis of the type of business or industry in 

13 which such employer is engaged. 

14 ‘‘(B) EFFECT OF TITLE.—Nothing in this 

15 title or any other provision of law shall be con16 strued to preclude a health insurance issuer of17 fering health insurance coverage in connection 

18 with a small business health plan, and at the 

19 request of such small business health plan, 

20 from— 

21 ‘‘(i) setting contribution rates for the 

22 small business health plan based on the 

23 claims experience of the plan so long as 

24 any variation in such rates complies with 

25 the requirements of clause (ii); or 
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1 ‘‘(ii) varying contribution rates for 

2 participating employers in a small business 

3 health plan in a State to the extent that 

4 such rates could vary using the same 

5 methodology employed in such State for 

6 regulating premium rates, subject to the 

7 terms of part I of subtitle A of title XXIX 

8 of the Public Health Service Act (relating 

9 to rating requirements), as added by title 

10 II of the Health Insurance Marketplace 

11 Modernization and Affordability Act of 

12 2005. 

13 ‘‘(3) REGULATORY REQUIREMENTS.—Such 

14 other requirements as the applicable authority deter15 mines are necessary to carry out the purposes of this 

16 part, which shall be prescribed by the applicable au17 thority by regulation. 

18 ‘‘(b) ABILITY OF SMALL BUSINESS HEALTH PLANS

19 TO DESIGN BENEFIT OPTIONS.—Nothing in this part or 

20 any provision of State law (as defined in section 

21 514(c)(1)) shall be construed to preclude a small business 

22 health plan or a health insurance issuer offering health 

23 insurance coverage in connection with a small business 

24 health plan, from exercising its sole discretion in selecting 

25 the specific benefits and services consisting of medical care 
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1 to be included as benefits under such plan or coverage, 

2 except that such benefits and services must meet the terms 

3 and specifications of part II of subtitle A of title XXIX 

4 of the Public Health Service Act (relating to lower cost 

5 plans), as added by title II of the Health Insurance Mar6 ketplace Modernization and Affordability Act of 2005, 

7 provided that, upon issuance by the Secretary of Health 

8 and Human Services of the List of Required Benefits as 

9 provided for in section 2922(a) of the Public Health Serv10 ice Act, the required scope and application for each benefit 

11 or service listed in the List of Required Benefits shall be— 

12 ‘‘(1) if the domicile State mandates such ben13 efit or service, the scope and application required by 

14 the domicile State; or 

15 ‘‘(2) if the domicile State does not mandate 

16 such benefit or service, the scope and application re17 quired by the non-domicile State that does require 

18 such benefit or service in which the greatest number 

19 of the small business health plan’s participating em20 ployers are located. 

21 ‘‘(c) STATE LICENSURE AND INFORMATIONAL FIL22 ING.— 

23 ‘‘(1) DOMICILE STATE.—Coverage shall be 

24 issued to a small business health plan in the State 
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1 in which the sponsor’s principal place of business is 

2 located. 

3 ‘‘(2) NON-DOMICILE STATES.—With respect to 

4 a State (other than the domicile State) in which par5 ticipating employers of a small business health plan 

6 are located, an insurer issuing coverage to such 

7 small business health plan shall not be required to 

8 obtain full licensure in such State, except that the 

9 insurer shall provide each State insurance commis10 sioner (or applicable State authority) with an infor11 mational filing describing policies sold and other rel12 evant information as may be requested by the appli13 cable State authority. 

14 ‘‘SEC. 806. REQUIREMENTS FOR APPLICATION AND RE15 LATED REQUIREMENTS. 

16 ‘‘(a) FILING FEE.—Under the procedure prescribed 

17 pursuant to section 802(a), a small business health plan 

18 shall pay to the applicable authority at the time of filing 

19 an application for certification under this part a filing fee 

20 in the amount of $5,000, which shall be available in the 

21 case of the Secretary, to the extent provided in appropria22 tion Acts, for the sole purpose of administering the certifi23 cation procedures applicable with respect to small business 

24 health plans. 
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1 ‘‘(b) INFORMATION TO BE INCLUDED IN APPLICA2 TION FOR CERTIFICATION.—An application for certifi3 cation under this part meets the requirements of this sec4 tion only if it includes, in a manner and form which shall 

5 be prescribed by the applicable authority by regulation, at 

6 least the following information: 

7 ‘‘(1) IDENTIFYING INFORMATION.—The names 

8 and addresses of— 

9 ‘‘(A) the sponsor; and 

10 ‘‘(B) the members of the board of trustees 

11 of the plan. 

12 ‘‘(2) STATES IN WHICH PLAN INTENDS TO DO

13 BUSINESS.—The States in which participants and 

14 beneficiaries under the plan are to be located and 

15 the number of them expected to be located in each 

16 such State. 

17 ‘‘(3) BONDING REQUIREMENTS.—Evidence pro18 vided by the board of trustees that the bonding re19 quirements of section 412 will be met as of the date 

20 of the application or (if later) commencement of op21 erations. 

22 ‘‘(4) PLAN DOCUMENTS.—A copy of the docu23 ments governing the plan (including any bylaws and 

24 trust agreements), the summary plan description, 

25 and other material describing the benefits that will 
18 

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1 be provided to participants and beneficiaries under 

2 the plan. 

3 ‘‘(5) AGREEMENTS WITH SERVICE PRO4 VIDERS.—A copy of any agreements between the 

5 plan, health insurance issuer, and contract adminis6 trators and other service providers. 

7 ‘‘(c) FILING NOTICE OF CERTIFICATION WITH

8 STATES.—A certification granted under this part to a 

9 small business health plan shall not be effective unless 

10 written notice of such certification is filed with the appli11 cable State authority of each State in which at least 25 

12 percent of the participants and beneficiaries under the 

13 plan are located. For purposes of this subsection, an indi14 vidual shall be considered to be located in the State in 

15 which a known address of such individual is located or 

16 in which such individual is employed. 

17 ‘‘(d) NOTICE OF MATERIAL CHANGES.—In the case 

18 of any small business health plan certified under this part, 

19 descriptions of material changes in any information which 

20 was required to be submitted with the application for the 

21 certification under this part shall be filed in such form 

22 and manner as shall be prescribed by the applicable au23 thority by regulation. The applicable authority may re24 quire by regulation prior notice of material changes with 
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1 respect to specified matters which might serve as the basis 

2 for suspension or revocation of the certification. 

3 ‘‘SEC. 807. NOTICE REQUIREMENTS FOR VOLUNTARY TER4 MINATION. 

5 ‘‘A small business health plan which is or has been 

6 certified under this part may terminate (upon or at any 

7 time after cessation of accruals in benefit liabilities) only 

8 if the board of trustees, not less than 60 days before the 

9 proposed termination date— 

10 ‘‘(1) provides to the participants and bene11 ficiaries a written notice of intent to terminate stat12 ing that such termination is intended and the pro13 posed termination date; 

14 ‘‘(2) develops a plan for winding up the affairs 

15 of the plan in connection with such termination in 

16 a manner which will result in timely payment of all 

17 benefits for which the plan is obligated; and 

18 ‘‘(3) submits such plan in writing to the appli19 cable authority. 

20 Actions required under this section shall be taken in such 

21 form and manner as may be prescribed by the applicable 

22 authority by regulation. 

23 ‘‘SEC. 808. DEFINITIONS AND RULES OF CONSTRUCTION. 

24 ‘‘(a) DEFINITIONS.—For purposes of this part— 
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1 ‘‘(1) AFFILIATED MEMBER.—The term ‘affili2 ated member’ means, in connection with a sponsor— 

3 ‘‘(A) a person who is otherwise eligible to 

4 be a member of the sponsor but who elects an 

5 affiliated status with the sponsor, 

6 ‘‘(B) in the case of a sponsor with mem7 bers which consist of associations, a person who 

8 is a member of any such association and elects 

9 an affiliated status with the sponsor, or 

10 ‘‘(C) in the case of a small business health 

11 plan in existence on the date of the enactment 

12 of the Health Insurance Marketplace Mod13 ernization and Affordability Act of 2005, a per14 son eligible to be a member of the sponsor or 

15 one of its member associations. 

16 ‘‘(2) APPLICABLE AUTHORITY.—The term ‘ap17 plicable authority’ means the Secretary, except that, 

18 in connection with any exercise of the Secretary’s 

19 authority with respect to which the Secretary is re20 quired under section 506(d) to consult with a State, 

21 such term means the Secretary, in consultation with 

22 such State. 

23 ‘‘(3) APPLICABLE STATE AUTHORITY.—The 

24 term ‘applicable State authority’ means, with respect 

25 to a health insurance issuer in a State, the State in-
21 

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1 surance commissioner or official or officials des2 ignated by the State to enforce the requirements of 

3 title XXVII of the Public Health Service Act for the 

4 State involved with respect to such issuer. 

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

6 health plan’ has the meaning provided in section 

7 733(a)(1) (after applying subsection (b) of this sec8 tion). 

9 ‘‘(5) HEALTH INSURANCE COVERAGE.—The 

10 term ‘health insurance coverage’ has the meaning 

11 provided in section 733(b)(1). 

12 ‘‘(6) HEALTH INSURANCE ISSUER.—The term 

13 ‘health insurance issuer’ has the meaning provided 

14 in section 733(b)(2). 

15 ‘‘(7) INDIVIDUAL MARKET.— 

16 ‘‘(A) IN GENERAL.—The term ‘individual 

17 market’ means the market for health insurance 

18 coverage offered to individuals other than in 

19 connection with a group health plan. 

20 ‘‘(B) TREATMENT OF VERY SMALL

21 GROUPS.— 

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

23 (ii), such term includes coverage offered in 

24 connection with a group health plan that 

25 has fewer than 2 participants as current 
22 

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1 employees or participants described in sec2 tion 732(d)(3) on the first day of the plan 

3 year. 

4 ‘‘(ii) STATE EXCEPTION.—Clause (i) 

5 shall not apply in the case of health insur6 ance coverage offered in a State if such 

7 State regulates the coverage described in 

8 such clause in the same manner and to the 

9 same extent as coverage in the small group 

10 market (as defined in section 2791(e)(5) of 

11 the Public Health Service Act) is regulated 

12 by such State. 

13 ‘‘(8) MEDICAL CARE.—The term ‘medical care’ 

14 has the meaning provided in section 733(a)(2). 

15 ‘‘(9) PARTICIPATING EMPLOYER.—The term 

16 ‘participating employer’ means, in connection with a 

17 small business health plan, any employer, if any in18 dividual who is an employee of such employer, a 

19 partner in such employer, or a self-employed indi20 vidual who is such employer (or any dependent, as 

21 defined under the terms of the plan, of such indi22 vidual) is or was covered under such plan in connec23 tion with the status of such individual as such an 

24 employee, partner, or self-employed individual in re25 lation to the plan. 
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1 ‘‘(10) SMALL EMPLOYER.—The term ‘small em2 ployer’ means, in connection with a group health 

3 plan with respect to a plan year, a small employer 

4 as defined in section 2791(e)(4). 

5 ‘‘(b) RULE OF CONSTRUCTION.—For purposes of de6 termining whether a plan, fund, or program is an em7 ployee welfare benefit plan which is a small business 

8 health plan, and for purposes of applying this title in con9 nection with such plan, fund, or program so determined 

10 to be such an employee welfare benefit plan— 

11 ‘‘(1) in the case of a partnership, the term ‘em12 ployer’ (as defined in section 3(5)) includes the part13 nership in relation to the partners, and the term 

14 ‘employee’ (as defined in section 3(6)) includes any 

15 partner in relation to the partnership; and 

16 ‘‘(2) in the case of a self-employed individual, 

17 the term ‘employer’ (as defined in section 3(5)) and 

18 the term ‘employee’ (as defined in section 3(6)) shall 

19 include such individual.’’. 

20 (b) CONFORMING AMENDMENTS TO PREEMPTION

21 RULES.— 

22 (1) Section 514(b)(6) of such Act (29 U.S.C. 

23 1144(b)(6)) is amended by adding at the end the 

24 following new subparagraph: 
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1 ‘‘(E) The preceding subparagraphs of this paragraph 

2 do not apply with respect to any State law in the case 

3 of a small business health plan which is certified under 

4 part 8.’’. 

5 (2) Section 514 of such Act (29 U.S.C. 1144) 

6 is amended— 

7 (A) in subsection (b)(4), by striking ‘‘Sub8 section (a)’’ and inserting ‘‘Subsections (a) and 

9 (d)’’; 

10 (B) in subsection (b)(5), by striking ‘‘sub11 section (a)’’ in subparagraph (A) and inserting 

12 ‘‘subsection (a) of this section and subsections 

13 (a)(2)(B) and (b) of section 805’’, and by strik14 ing ‘‘subsection (a)’’ in subparagraph (B) and 

15 inserting ‘‘subsection (a) of this section or sub16 section (a)(2)(B) or (b) of section 805’’; 

17 (C) by redesignating subsection (d) as sub18 section (e); and 

19 (D) by inserting after subsection (c) the 

20 following new subsection: 

21 ‘‘(d)(1) Except as provided in subsection (b)(4), the 

22 provisions of this title shall supersede any and all State 

23 laws insofar as they may now or hereafter preclude a 

24 health insurance issuer from offering health insurance cov-
25 

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1 erage in connection with a small business health plan 

2 which is certified under part 8. 

3 ‘‘(2) In any case in which health insurance coverage 

4 of any policy type is offered under a small business health 

5 plan certified under part 8 to a participating employer op6 erating in such State, the provisions of this title shall su7 persede any and all laws of such State insofar as they may 

8 establish rating and benefit requirements that would oth9 erwise apply to such coverage, provided the requirements 

10 of section 805(a)(2)(B) and (b) (concerning small business 

11 health plan rating and benefits) are met.’’. 

12 (3) Section 514(b)(6)(A) of such Act (29 

13 U.S.C. 1144(b)(6)(A)) is amended— 

14 (A) in clause (i)(II), by striking ‘‘and’’ at 

15 the end; 

16 (B) in clause (ii), by inserting ‘‘and which 

17 does not provide medical care (within the mean18 ing of section 733(a)(2)),’’ after ‘‘arrange19 ment,’’, and by striking ‘‘title.’’ and inserting 

20 ‘‘title, and’’; and 

21 (C) by adding at the end the following new 

22 clause: 

23 ‘‘(iii) subject to subparagraph (E), in the case 

24 of any other employee welfare benefit plan which is 

25 a multiple employer welfare arrangement and which 
26 

•S 1955 IS

1 provides medical care (within the meaning of section 

2 733(a)(2)), any law of any State which regulates in3 surance may apply.’’. 

4 (4) Section 514(e) of such Act (as redesignated 

5 by paragraph (2)(C)) is amended by striking ‘‘Noth6 ing’’ and inserting ‘‘(1) Except as provided in para7 graph (2), nothing’’. 

8 (c) PLAN SPONSOR.—Section 3(16)(B) of such Act 

9 (29 U.S.C. 102(16)(B)) is amended by adding at the end 

10 the following new sentence: ‘‘Such term also includes a 

11 person serving as the sponsor of a small business health 

12 plan under part 8.’’. 

13 (d) SAVINGS CLAUSE.—Section 731(c) of such Act 

14 is amended by inserting ‘‘or part 8’’ after ‘‘this part’’. 

15 (e) CLERICAL AMENDMENT.—The table of contents 

16 in section 1 of the Employee Retirement Income Security 

17 Act of 1974 is amended by inserting after the item relat18 ing to section 734 the following new items: 

‘‘PART 8—RULES GOVERNING SMALL BUSINESS HEALTH PLANS

‘‘801. Small business health plans. 

‘‘802. Certification of small business health plans. 

‘‘803. Requirements relating to sponsors and boards of trustees. 

‘‘804. Participation and coverage requirements. 

‘‘805. Other requirements relating to plan documents, contribution rates, and 

benefit options. 

‘‘806. Requirements for application and related requirements. 

‘‘807. Notice requirements for voluntary termination. 

‘‘808. Definitions and rules of construction.’’. 
27 

•S 1955 IS

1 SEC. 102. COOPERATION BETWEEN FEDERAL AND STATE 

2 AUTHORITIES. 

3 Section 506 of the Employee Retirement Income Se4 curity Act of 1974 (29 U.S.C. 1136) is amended by adding 

5 at the end the following new subsection: 

6 ‘‘(d) CONSULTATION WITH STATES WITH RESPECT

7 TO SMALL BUSINESS HEALTH PLANS.— 

8 ‘‘(1) AGREEMENTS WITH STATES.—The Sec9 retary shall consult with the State recognized under 

10 paragraph (2) with respect to a small business 

11 health plan regarding the exercise of— 

12 ‘‘(A) the Secretary’s authority under sec13 tions 502 and 504 to enforce the requirements 

14 for certification under part 8; and 

15 ‘‘(B) the Secretary’s authority to certify 

16 small business health plans under part 8 in ac17 cordance with regulations of the Secretary ap18 plicable to certification under part 8. 

19 ‘‘(2) RECOGNITION OF DOMICILE STATE.—In 

20 carrying out paragraph (1), the Secretary shall en21 sure that only one State will be recognized, with re22 spect to any particular small business health plan, 

23 as the State with which consultation is required. In 

24 carrying out this paragraph such State shall be the 

25 domicile State, as defined in section 805(c).’’. 
28 

•S 1955 IS

1 SEC. 103. EFFECTIVE DATE AND TRANSITIONAL AND 

2 OTHER RULES. 

3 (a) EFFECTIVE DATE.—The amendments made by 

4 this title shall take effect 1 year after the date of the en5 actment of this Act. The Secretary of Labor shall first 

6 issue all regulations necessary to carry out the amend7 ments made by this title within 1 year after the date of 

8 the enactment of this Act. 

9 (b) TREATMENT OF CERTAIN EXISTING HEALTH

10 BENEFITS PROGRAMS.— 

11 (1) IN GENERAL.—In any case in which, as of 

12 the date of the enactment of this Act, an arrange13 ment is maintained in a State for the purpose of 

14 providing benefits consisting of medical care for the 

15 employees and beneficiaries of its participating em16 ployers, at least 200 participating employers make 

17 contributions to such arrangement, such arrange18 ment has been in existence for at least 10 years, and 

19 such arrangement is licensed under the laws of one 

20 or more States to provide such benefits to its par21 ticipating employers, upon the filing with the appli22 cable authority (as defined in section 808(a)(2) of 

23 the Employee Retirement Income Security Act of 

24 1974 (as amended by this subtitle)) by the arrange25 ment of an application for certification of the ar-
29 

•S 1955 IS

1 rangement under part 8 of subtitle B of title I of 

2 such Act— 

3 (A) such arrangement shall be deemed to 

4 be a group health plan for purposes of title I 

5 of such Act; 

6 (B) the requirements of sections 801(a) 

7 and 803(a) of the Employee Retirement Income 

8 Security Act of 1974 shall be deemed met with 

9 respect to such arrangement; 

10 (C) the requirements of section 803(b) of 

11 such Act shall be deemed met, if the arrange12 ment is operated by a board of trustees which— 

13 (i) is elected by the participating em14 ployers, with each employer having one 

15 vote; and 

16 (ii) has complete fiscal control over 

17 the arrangement and which is responsible 

18 for all operations of the arrangement; 

19 (D) the requirements of section 804(a) of 

20 such Act shall be deemed met with respect to 

21 such arrangement; and 

22 (E) the arrangement may be certified by 

23 any applicable authority with respect to its op24 erations in any State only if it operates in such 

25 State on the date of certification. 
30 

•S 1955 IS

1 The provisions of this subsection shall cease to apply 

2 with respect to any such arrangement at such time 

3 after the date of the enactment of this Act as the 

4 applicable requirements of this subsection are not 

5 met with respect to such arrangement or at such 

6 time that the arrangement provides coverage to par7 ticipants and beneficiaries in any State other than 

8 the States in which coverage is provided on such 

9 date of enactment. 

10 (2) DEFINITIONS.—For purposes of this sub11 section, the terms ‘‘group health plan’’, ‘‘medical 

12 care’’, and ‘‘participating employer’’ shall have the 

13 meanings provided in section 808 of the Employee 

14 Retirement Income Security Act of 1974, except 

15 that the reference in paragraph (7) of such section 

16 to an ‘‘small business health plan’’ shall be deemed 

17 a reference to an arrangement referred to in this 

18 subsection. 

19 TITLE II—NEAR-TERM MARKET 

20 RELIEF 

21 SEC. 201. NEAR-TERM MARKET RELIEF. 

22 The Public Health Service Act (42 U.S.C. 201 et 

23 seq.) is amended by adding at the end the following: 
31 

•S 1955 IS

1 ‘‘TITLE XXIX—HEALTH CARE IN2 SURANCE MARKETPLACE RE3 FORM 

4 ‘‘SEC. 2901. GENERAL INSURANCE DEFINITIONS. 

5 ‘‘In this title, the terms ‘health insurance coverage’, 

6 ‘health insurance issuer’, ‘group health plan’, and ‘indi7 vidual health insurance’ shall have the meanings given 

8 such terms in section 2791. 

9 ‘‘Subtitle A—Near-Term Market 

10 Relief 

11 ‘‘PART I—RATING REQUIREMENTS 

12 ‘‘SEC. 2911. DEFINITIONS. 

13 ‘‘In this part: 

14 ‘‘(1) ADOPTING STATE.—The term ‘adopting 

15 State’ means a State that has enacted either the 

16 NAIC model rules or the National Interim Model 

17 Rating Rules in their entirety and as the exclusive 

18 laws of the State that relate to rating in the small 

19 group insurance market. 

20 ‘‘(2) COMMISSION.—The term ‘Commission’ 

21 means the Harmonized Standards Commission es22 tablished under section 2921. 

23 ‘‘(3) ELIGIBLE INSURER.—The term ‘eligible 

24 insurer’ means a health insurance issuer that is li25 censed in a nonadopting State and that— 
32 

•S 1955 IS

1 ‘‘(A) notifies the Secretary, not later than 

2 30 days prior to the offering of coverage de3 scribed in this subparagraph, that the issuer in4 tends to offer small group health insurance cov5 erage consistent with the National Interim 

6 Model Rating Rules in a nonadopting State; 

7 ‘‘(B) notifies the insurance department of 

8 a nonadopting State (or other State agency), 

9 not later than 30 days prior to the offering of 

10 coverage described in this subparagraph, that 

11 the issuer intends to offer small group health 

12 insurance coverage in that State consistent with 

13 the National Interim Model Rating Rules, and 

14 provides with such notice a copy of any insur15 ance policy that it intends to offer in the State, 

16 its most recent annual and quarterly financial 

17 reports, and any other information required to 

18 be filed with the insurance department of the 

19 State (or other State agency) by the Secretary 

20 in regulations; and 

21 ‘‘(C) includes in the terms of the health in22 surance coverage offered in nonadopting States 

23 (including in the terms of any individual certifi24 cates that may be offered to individuals in con25 nection with such group health coverage) and 
33 

•S 1955 IS

1 filed with the State pursuant to subparagraph 

2 (B), a description in the insurer’s contract of 

3 the National Interim Model Rating Rules and 

4 an affirmation that such Rules are included in 

5 the terms of such contract. 

6 ‘‘(4) HEALTH INSURANCE COVERAGE.—The 

7 term ‘health insurance coverage’ means any coverage 

8 issued in small group health insurance market. 

9 ‘‘(5) NAIC MODEL RULES.—The term ‘NAIC 

10 model rules’ means the rating rules provided for in 

11 the 1992 Adopted Small Employer Health Insurance 

12 Availability Model Act of the National Association of 

13 Insurance Commissioners. 

14 ‘‘(6) NATIONAL INTERIM MODEL RATING

15 RULES.—The term ‘National Interim Model Rating 

16 Rules’ means the rules promulgated under section 

17 2912(a). 

18 ‘‘(7) NONADOPTING STATE.—The term ‘non19 adopting State’ means a State that is not an adopt20 ing State. 

21 ‘‘(8) SMALL GROUP INSURANCE MARKET.—The 

22 term ‘small group insurance market’ shall have the 

23 meaning given the term ‘small group market’ in sec24 tion 2791(e)(5). 
34 

•S 1955 IS

1 ‘‘(9) STATE LAW.—The term ‘State law’ means 

2 all laws, decisions, rules, regulations, or other State 

3 actions (including actions by a State agency) having 

4 the effect of law, of any State. 

5 ‘‘SEC. 2912. RATING RULES. 

6 ‘‘(a) NATIONAL INTERIM MODEL RATING RULES.— 

7 Not later than 6 months after the date of enactment of 

8 this title, the Secretary, in consultation with the National 

9 Association of Insurance Commissioners, shall, through 

10 expedited rulemaking procedures, promulgate National In11 terim Model Rating Rules that shall be applicable to the 

12 small group insurance market in certain States until such 

13 time as the provisions of subtitle B become effective. Such 

14 Model Rules shall apply in States as provided for in this 

15 section beginning with the first plan year after the such 

16 Rules are promulgated. 

17 ‘‘(b) UTILIZATION OF NAIC MODEL RULES.—In 

18 promulgating the National Interim Model Rating Rules 

19 under subsection (a), the Secretary, except as otherwise 

20 provided in this subtitle, shall utilize the NAIC model 

21 rules regarding premium rating and premium variation. 

22 ‘‘(c) TRANSITION IN CERTAIN STATES.— 

23 ‘‘(1) IN GENERAL.—In promulgating the Na24 tional Interim Model Rating Rules under subsection 

25 (a), the Secretary shall have discretion to modify the 
35 

•S 1955 IS

1 NAIC model rules in accordance with this subsection 

2 to the extent necessary to provide for a graduated 

3 transition, of not to exceed 3 years following the 

4 promulgation of such National Interim Rules, with 

5 respect to the application of such Rules to States. 

6 ‘‘(2) INITIAL PREMIUM VARIATION.— 

7 ‘‘(A) IN GENERAL.—Under the modified 

8 National Interim Model Rating Rules as pro9 vided for in paragraph (1), the premium vari10 ation provision of subparagraph (C) shall be ap11 plicable only with respect to small group poli12 cies issued in States which, on the date of en13 actment of this title, have in place premium rat14 ing band requirements that vary by less than 

15 50 percent from the premium variation stand16 ards contained in subparagraph (C) with re17 spect to the standards provided for under the 

18 NAIC model rules. 

19 ‘‘(B) OTHER STATES.—Health insurance 

20 coverage offered in a State that, on the date of 

21 enactment of this title, has in place premium 

22 rating band requirements that vary by more 

23 than 50 percent from the premium variation 

24 standards contained in subparagraph (C) shall 

25 be subject to such graduated transition sched-
36 

•S 1955 IS

1 ules as may be provided by the Secretary pursu2 ant to paragraph (1). 

3 ‘‘(C) AMOUNT OF VARIATION.—The 

4 amount of a premium rating variation from the 

5 base premium rate due to health conditions of 

6 covered individuals under this subparagraph 

7 shall not exceed a factor of— 

8 ‘‘(i) +/- 25 percent upon the issuance 

9 of the policy involved; and 

10 ‘‘(ii) +/- 15 percent upon the renewal 

11 of the policy. 

12 ‘‘(3) OTHER TRANSITIONAL AUTHORITY.—In 

13 developing the National Interim Model Rating Rules, 

14 the Secretary may also provide for the application of 

15 transitional standards in certain States with respect 

16 to the following: 

17 ‘‘(A) Independent rating classes for old 

18 and new business. 

19 ‘‘(B) Such additional transition standards 

20 as the Secretary may determine necessary for 

21 an effective transition. 

22 ‘‘SEC. 2913. APPLICATION AND PREEMPTION. 

23 ‘‘(a) SUPERCEDING OF STATE LAW.— 

24 ‘‘(1) IN GENERAL.—This part shall supersede 

25 any and all State laws insofar as such State laws 
37 

•S 1955 IS

1 (whether enacted prior to or after the date of enact2 ment of this subtitle) relate to rating in the small 

3 group insurance market as applied to an eligible in4 surer, or small group health insurance coverage 

5 issued by an eligible insurer, in a nonadopting State. 

6 ‘‘(2) NONADOPTING STATES.—This part shall 

7 supersede any and all State laws of a nonadopting 

8 State insofar as such State laws (whether enacted 

9 prior to or after the date of enactment of this sub10 title)— 

11 ‘‘(A) prohibit an eligible insurer from of12 fering coverage consistent with the National In13 terim Model Rating Rules in a nonadopting 

14 State; or 

15 ‘‘(B) discriminate against or among eligi16 ble insurers offering health insurance coverage 

17 consistent with the National Interim Model 

18 Rating Rules in a nonadopting state. 

19 ‘‘(b) SAVINGS CLAUSE AND CONSTRUCTION.— 

20 ‘‘(1) NONAPPLICATION TO ADOPTING STATES.— 

21 Subsection (a) shall not apply with respect to adopt22 ing states. 

23 ‘‘(2) NONAPPLICATION TO CERTAIN INSUR24 ERS.—Subsection (a) shall not apply with respect to 

25 insurers that do not qualify as eligible insurers that 
38 

•S 1955 IS

1 offer small group health insurance coverage in a 

2 nonadopting State. 

3 ‘‘(3) NONAPPLICATION WHERE OBTAINING RE4 LIEF UNDER STATE LAW.—Subsection (a)(1) shall 

5 not apply to any State law in a nonadopting State 

6 to the extent necessary to permit individuals or the 

7 insurance department of the State (or other State 

8 agency) to obtain relief under State law to require 

9 an eligible insurer to comply with the terms of the 

10 small group health insurance coverage issued in the 

11 nonadopting State. In no case shall this paragraph, 

12 or any other provision of this title, be construed to 

13 create a cause of action on behalf of an individual 

14 or any other person under State law in connection 

15 with a group health plan that is subject to the Em16 ployee Retirement Income Security Act of 1974 or 

17 health insurance coverage issued in connection with 

18 such a plan. 

19 ‘‘(4) NONAPPLICATION TO ENFORCE REQUIRE20 MENTS RELATING TO THE NATIONAL RULE.—Sub21 section (a)(1) shall not apply to any State law in a 

22 nonadopting State to the extent necessary to provide 

23 the insurance department of the State (or other 

24 State agency) with the authority to enforce State 

25 law requirements relating to the National Interim 
39 

•S 1955 IS

1 Model Rating Rules that are not set forth in the 

2 terms of the small group health insurance coverage 

3 issued in a nonadopting State, in a manner that is 

4 consistent with the National Interim Model Rating 

5 Rules and that imposes no greater duties or obliga6 tions on health insurance issuers than the National 

7 Interim Model Rating Rules. 

8 ‘‘(5) NONAPPLICATION TO SUBSECTION (A)(2).— 

9 Paragraphs (3) and (4) shall not apply with respect 

10 to subsection (a)(2). 

11 ‘‘(6) NO AFFECT ON PREEMPTION.—In no case 

12 shall this subsection be construed to affect the scope 

13 of the preemption provided for under the Employee 

14 Retirement Income Security Act of 1974. 

15 ‘‘(c) EFFECTIVE DATE.—This section shall apply be16 ginning in the first plan year following the issuance of the 

17 final rules by the Secretary under the National Interim 

18 Model Rating Rules. 

19 ‘‘SEC. 2914. CIVIL ACTIONS AND JURISDICTION. 

20 ‘‘(a) IN GENERAL.—The district courts of the United 

21 States shall have exclusive jurisdiction over civil actions 

22 involving the interpretation of this part. 

23 ‘‘(b) ACTIONS.—A health insurance issuer may bring 

24 an action in the district courts of the United States for 

25 injunctive or other equitable relief against a nonadopting 
40 

•S 1955 IS

1 State in connection with the application of a state law that 

2 violates this part. 

3 ‘‘(c) VIOLATIONS OF SECTION 2913.—In the case of 

4 a nonadopting State that is in violation of section 

5 2913(a)(2), a health insurance issuer may bring an action 

6 in the district courts of the United States for damages 

7 against the nonadopting State and, if the health insurance 

8 issuer prevails in such action, the district court shall 

9 award the health insurance issuer its reasonable attorneys 

10 fees and costs. 

11 ‘‘SEC. 2915. SUNSET. 

12 ‘‘The National Interim Model Rating Rules shall re13 main in effect in a non-adopting State until such time as 

14 the harmonized national rating rules are promulgated and 

15 effective pursuant to part II. Upon such effective date, 

16 such harmonized rules shall supersede the National Rules. 

17 ‘‘PART II—LOWER COST PLANS 

18 ‘‘SEC. 2921. DEFINITIONS. 

19 ‘‘In this part: 

20 ‘‘(1) ADOPTING STATE.—The term ‘adopting 

21 State’ means a State that has enacted the State 

22 Benefit Compendium in its entirety and as the ex23 clusive laws of the State that relate to benefit, serv24 ice, and provider mandates in the group and indi25 vidual insurance markets. 
41 

•S 1955 IS

1 ‘‘(2) ELIGIBLE INSURER.—The term ‘eligible 

2 insurer’ means a health insurance issuer that is li3 censed in a nonadopting State and that— 

4 ‘‘(A) notifies the Secretary, not later than 

5 30 days prior to the offering of coverage de6 scribed in this subparagraph, that the issuer in7 tends to offer group health insurance coverage 

8 consistent with the State Benefit Compendium 

9 in a nonadopting State; 

10 ‘‘(B) notifies the insurance department of 

11 a nonadopting State (or other State agency), 

12 not later than 30 days prior to the offering of 

13 coverage described in this subparagraph, that 

14 the issuer intends to offer group health insur15 ance coverage in that State consistent with the 

16 State Benefit Compendium, and provides with 

17 such notice a copy of any insurance policy that 

18 it intends to offer in the State, its most recent 

19 annual and quarterly financial reports, and any 

20 other information required to be filed with the 

21 insurance department of the State (or other 

22 State agency) by the Secretary in regulations; 

23 and 

24 ‘‘(C) includes in the terms of the health in25 surance coverage offered in nonadopting States 
42 

•S 1955 IS

1 (including in the terms of any individual certifi2 cates that may be offered to individuals in con3 nection with such group health coverage) and 

4 filed with the State pursuant to subparagraph 

5 (B), a description in the insurer’s contract of 

6 the State Benefit Compendium and that adher7 ence to the Compendium is included as a term 

8 of such contract. 

9 ‘‘(3) HEALTH INSURANCE COVERAGE.—The 

10 term ‘health insurance coverage’ means any coverage 

11 issued in the group or individual health insurance 

12 markets. 

13 ‘‘(4) NONADOPTING STATE.—The term ‘non14 adopting State’ means a State that is not an adopt15 ing State. 

16 ‘‘(5) STATE BENEFIT COMPENDIUM.—The term 

17 ‘State Benefit Compendium’ means the Compendium 

18 issued under section 2922. 

19 ‘‘(6) STATE LAW.—The term ‘State law’ means 

20 all laws, decisions, rules, regulations, or other State 

21 actions (including actions by a State agency) having 

22 the effect of law, of any State. 

23 ‘‘SEC. 2922. OFFERING LOWER COST PLANS. 

24 ‘‘(a) LIST OF REQUIRED BENEFITS.—Not later than 

25 3 months after the date of enactment of this title, the Sec-
43 

•S 1955 IS

1 retary shall issue by interim final rule a list (to be known 

2 as the ‘List of Required Benefits’) of the benefit, service, 

3 and provider mandates that are required to be provided 

4 by health insurance issuers in at least 45 States as a re5 sult of the application of State benefit, service, and pro6 vider mandate laws. 

7 ‘‘(b) STATE BENEFIT COMPENDIUM.— 

8 ‘‘(1) VARIANCE.—Not later than 12 months 

9 after the date of enactment of this title, the Sec10 retary shall issue by interim final rule a compen11 dium (to be known as the ‘State Benefit Compen12 dium’) of harmonized descriptions of the benefit, 

13 service, and provider mandates identified under sub14 section (a). In developing the Compendium, with re15 spect to differences in State mandate laws identified 

16 under subsection (a) relating to similar benefits, 

17 services, or providers, the Secretary shall review and 

18 define the scope and application of such State laws 

19 so that a common approach shall be applicable 

20 under such Compendium in a uniform manner. In 

21 making such determination, the Secretary shall 

22 adopt an approach reflective of the approach used by 

23 a plurality of the States requiring such benefit, serv24 ice, or provider mandate. 
44 

•S 1955 IS

1 ‘‘(2) EFFECT.—The State Benefit Compendium 

2 shall provide that any State benefit, service, and 

3 provider mandate law (enacted prior to or after the 

4 date of enactment of this title) other than those de5 scribed in the Compendium shall not be binding on 

6 health insurance issuers in an adopting State. 

7 ‘‘(3) IMPLEMENTATION.—The effective date of 

8 the State Benefit Compendium shall be the later 

9 of— 

10 ‘‘(A) the date that is 12 months from the 

11 date of enactment of this title; or 

12 ‘‘(B) such subsequent date on which the 

13 interim final rule for the State Benefit Compen14 dium shall be issued. 

15 ‘‘(c) NON-ASSOCIATION COVERAGE.—With respect to 

16 health insurers selling insurance to small employers (as 

17 defined in section 808(a)(10) of the Employee Retirement 

18 Income Security Act of 1974), in the event the Secretary 

19 fails to issue the State Benefit Compendium within 12 

20 months of the date of enactment of this title, the required 

21 scope and application for each benefit or service listed in 

22 the List of Required Benefits shall, other than with re23 spect to insurance issued to a Small Business Health 

24 Plan, be— 
45 

•S 1955 IS

1 ‘‘(1) if the State in which the insurer issues a 

2 policy mandates such benefit or service, the scope 

3 and application required by such State; or 

4 ‘‘(2) if the State in which the insurer issues a 

5 policy does not mandate such benefit or service, the 

6 scope and application required by such other State 

7 that does require such benefit or service in which the 

8 greatest number of the insurer’s small employer pol9 icyholders are located. 

10 ‘‘(d) UPDATING OF STATE BENEFIT COMPEN11 DIUM.—Not later than 2 years after the date on which 

12 the Compendium is issued under subsection (b)(1), and 

13 every 2 years thereafter, the Secretary, applying the same 

14 methodology provided for in subsections (a) and (b)(1), 

15 in consultation with the National Association of Insurance 

16 Commissioners, shall update the Compendium. The Sec17 retary shall issue the updated Compendium by regulation, 

18 and such updated Compendium shall be effective upon the 

19 first plan year following the issuance of such regulation. 

20 ‘‘SEC. 2923. APPLICATION AND PREEMPTION. 

21 ‘‘(a) SUPERCEDING OF STATE LAW.— 

22 ‘‘(1) IN GENERAL.—This part shall supersede 

23 any and all State laws (whether enacted prior to or 

24 after the date of enactment of this title) insofar as 

25 such laws relate to benefit, service, or provider man-
46 

•S 1955 IS

1 dates in the health insurance market as applied to 

2 an eligible insurer, or health insurance coverage 

3 issued by an eligible insurer, in a nonadopting State. 

4 ‘‘(2) NONADOPTING STATES.—This part shall 

5 supersede any and all State laws of a nonadopting 

6 State (whether enacted prior to or after the date of 

7 enactment of this title) insofar as such laws— 

8 ‘‘(A) prohibit an eligible insurer from of9 fering coverage consistent with the State Ben10 efit Compendium, as provided for in section 

11 2922(a), in a nonadopting State; or 

12 ‘‘(B) discriminate against or among eligi13 ble insurers offering or seeking to offer health 

14 insurance coverage consistent with the State 

15 Benefit Compendium in a nonadopting State. 

16 ‘‘(b) SAVINGS CLAUSE AND CONSTRUCTION.— 

17 ‘‘(1) NONAPPLICATION TO ADOPTING STATES.— 

18 Subsection (a) shall not apply with respect to adopt19 ing States. 

20 ‘‘(2) NONAPPLICATION TO CERTAIN INSUR21 ERS.—Subsection (a) shall not apply with respect to 

22 insurers that do not qualify as eligible insurers who 

23 offer health insurance coverage in a nonadopting 

24 State. 
47 

•S 1955 IS

1 ‘‘(3) NONAPPLICATION WHERE OBTAINING RE2 LIEF UNDER STATE LAW.—Subsection (a)(1) shall 

3 not apply to any State law of a nonadopting State 

4 to the extent necessary to permit individuals or the 

5 insurance department of the State (or other State 

6 agency) to obtain relief under State law to require 

7 an eligible insurer to comply with the terms of the 

8 group health insurance coverage issued in a non9 adopting State. In no case shall this paragraph, or 

10 any other provision of this title, be construed to cre11 ate a cause of action on behalf of an individual or 

12 any other person under State law in connection with 

13 a group health plan that is subject to the Employee 

14 Retirement Income Security Act of 1974 or health 

15 insurance coverage issued in connection with such 

16 plan. 

17 ‘‘(4) NONAPPLICATION TO ENFORCE REQUIRE18 MENTS RELATING TO THE COMPENDIUM.—Sub19 section (a)(1) shall not apply to any State law in a 

20 nonadopting State to the extent necessary to provide 

21 the insurance department of the State (or other 

22 state agency) authority to enforce State law require23 ments relating to the State Benefit Compendium 

24 that are not set forth in the terms of the group 

25 health insurance coverage issued in a nonadopting 
48 

•S 1955 IS

1 State, in a manner that is consistent with the State 

2 Benefit Compendium and imposes no greater duties 

3 or obligations on health insurance issuers than the 

4 State Benefit Compendium. 

5 ‘‘(5) NONAPPLICATION TO SUBSECTION (A)(2).— 

6 Paragraphs (3) and (4) shall not apply with respect 

7 to subsection (a)(2). 

8 ‘‘(6) NO AFFECT ON PREEMPTION.—In no case 

9 shall this subsection be construed to affect the scope 

10 of the preemption provided for under the Employee 

11 Retirement Income Security Act of 1974. 

12 ‘‘(c) EFFECTIVE DATE.—This section shall apply 

13 upon the first plan year following final issuance by the 

14 Secretary of the State Benefit Compendium. 

15 ‘‘SEC. 2924. CIVIL ACTIONS AND JURISDICTION. 

16 ‘‘(a) IN GENERAL.—The district courts of the United 

17 States shall have exclusive jurisdiction over civil actions 

18 involving the interpretation of this part. 

19 ‘‘(b) ACTIONS.—A health insurance issuer may bring 

20 an action in the district courts of the United States for 

21 injunctive or other equitable relief against a nonadopting 

22 State in connection with the application of a State law 

23 that violates this part. 

24 ‘‘(c) VIOLATIONS OF SECTION 2923.—In the case of 

25 a nonadopting State that is in violation of section 
49 

•S 1955 IS

1 2923(a)(2), a health insurance issuer may bring an action 

2 in the district courts of the United States for damages 

3 against the nonadopting State and, if the health insurance 

4 issuer prevails in such action, the district court shall 

5 award the health insurance issuer its reasonable attorneys 

6 fees and costs.’’. 

7 TITLE III—HARMONIZATION OF 

8 HEALTH INSURANCE LAWS 

9 SEC. 301. HEALTH INSURANCE REGULATORY HARMONI10 ZATION. 

11 Title XXIX of the Public Health Service Act (as 

12 added by section 201) is amended by adding at the end 

13 the following: 

14 ‘‘Subtitle B—Regulatory 

15 Harmonization 

16 ‘‘SEC. 2931. DEFINITIONS. 

17 ‘‘In this subtitle: 

18 ‘‘(1) ACCESS.—The term ‘access’ means any re19 quirements of State law that regulate the following 

20 elements of access: 

21 ‘‘(A) Renewability of coverage. 

22 ‘‘(B) Guaranteed issuance as provided for 

23 in title XXVII. 

24 ‘‘(C) Guaranteed issue for individuals not 

25 eligible under subparagraph (B). 
50 

•S 1955 IS

1 ‘‘(D) High risk pools. 

2 ‘‘(E) Pre-existing conditions limitations. 

3 ‘‘(2) ADOPTING STATE.—The term ‘adopting 

4 State’ means a State that has enacted the har5 monized standards adopted under this subtitle in 

6 their entirety and as the exclusive laws of the State 

7 that relate to the harmonized standards. 

8 ‘‘(3) ELIGIBLE INSURER.—The term ‘eligible 

9 insurer’ means a health insurance issuer that is li10 censed in a nonadopting State and that— 

11 ‘‘(A) notifies the Secretary, not later than 

12 30 days prior to the offering of coverage de13 scribed in this subparagraph, that the issuer in14 tends to offer health insurance coverage con15 sistent with the harmonized standards in a non16 adopting State; 

17 ‘‘(B) notifies the insurance department of 

18 a nonadopting State (or other State agency), 

19 not later than 30 days prior to the offering of 

20 coverage described in this subparagraph, that 

21 the issuer intends to offer group health insur22 ance coverage in that State consistent with the 

23 State Benefit Compendium, and provides with 

24 such notice a copy of any insurance policy that 

25 it intends to offer in the State, its most recent 
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1 annual and quarterly financial reports, and any 

2 other information required to be filed with the 

3 insurance department of the State (or other 

4 State agency) by the Secretary in regulations; 

5 and 

6 ‘‘(C) includes in the terms of the health in7 surance coverage offered in nonadopting States 

8 (including in the terms of any individual certifi9 cates that may be offered to individuals in con10 nection with such group health coverage) and 

11 filed with the State pursuant to subparagraph 

12 (B), a description of the harmonized standards 

13 published pursuant to section 2932(g)(2) and 

14 an affirmation that such standards are a term 

15 of the contract. 

16 ‘‘(4) HARMONIZED STANDARDS.—The term 

17 ‘harmonized standards’ means the standards adopt18 ed by the Secretary under section 2932(d). 

19 ‘‘(5) HEALTH INSURANCE COVERAGE.—The 

20 term ‘health insurance coverage’ means any coverage 

21 issued in the health insurance market. 

22 ‘‘(6) NONADOPTING STATE.—The term ‘non23 adopting State’ means a State that fails to enact, 

24 within 2 years of the date in which final regulations 

25 are issued by the Secretary adopting the harmonized 
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1 standards under this subtitle, the harmonized stand2 ards in their entirety and as the exclusive laws of 

3 the State that relate to the harmonized standards. 

4 ‘‘(7) PATIENT PROTECTIONS.—The term ‘pa5 tient protections’ means any requirement of State 

6 law that regulate the following elements of patient 

7 protections: 

8 ‘‘(A) Internal appeals. 

9 ‘‘(B) External appeals. 

10 ‘‘(C) Direct access to providers. 

11 ‘‘(D) Prompt payment of claims. 

12 ‘‘(E) Utilization review. 

13 ‘‘(F) Marketing standards. 

14 ‘‘(8) PLURALITY REQUIREMENT.—The term 

15 ‘plurality requirement’ means the most common sub16 stantially similar requirements for elements within 

17 each area described in section 2932(b)(1). 

18 ‘‘(9) RATING.—The term ‘rating’ means, at the 

19 time of issuance or renewal, requirements of State 

20 law the regulate the following elements of rating: 

21 ‘‘(A) Limits on the types of variations in 

22 rates based on health status. 

23 ‘‘(B) Limits on the types of variations in 

24 rates based on age and gender. 
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1 ‘‘(C) Limits on the types of variations in 

2 rates based on geography, industry and group 

3 size. 

4 ‘‘(D) Periods of time during which rates 

5 are guaranteed. 

6 ‘‘(E) The review and approval of rates. 

7 ‘‘(F) The establishment of classes or 

8 blocks of business. 

9 ‘‘(G) The use of actuarial justifications for 

10 rate variations. 

11 ‘‘(10) STATE LAW.—The term ‘State law’ 

12 means all laws, decisions, rules, regulations, or other 

13 State actions (including actions by a State agency) 

14 having the effect of law, of any State. 

15 ‘‘(11) SUBSTANTIALLY SIMILAR.—The term 

16 ‘substantially similar’ means a requirement of State 

17 law applicable to an element of an area identified in 

18 section 2932 that is similar in most material re19 spects. Where the most common State action with 

20 respect to an element is to adopt no requirement for 

21 an element of an area identified in such section 

22 2932, the plurality requirement shall be deemed to 

23 impose no requirements for such element. 

24 ‘‘SEC. 2932. HARMONIZED STANDARDS. 

25 ‘‘(a) COMMISSION.— 
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1 ‘‘(1) ESTABLISHMENT.—The Secretary, in con2 sultation with the NAIC, shall establish the Commis3 sion on Health Insurance Standards Harmonization 

4 (referred to in this subtitle as the ‘Commission’) to 

5 develop recommendations that harmonize incon6 sistent State health insurance laws in accordance 

7 with the laws adopted in a plurality of the States. 

8 ‘‘(2) COMPOSITION.—The Commission shall be 

9 composed of the following individuals to be ap10 pointed by the Secretary: 

11 ‘‘(A) Two State insurance commissioners, 

12 of which one shall be a Democrat and one shall 

13 be a Republican, and of which one shall be des14 ignated as the chairperson and one shall be des15 ignated as the vice chairperson. 

16 ‘‘(B) Two representatives of State govern17 ment, one of which shall be a governor of a 

18 State and one of which shall be a State legis19 lator, and one of which shall be a Democrat and 

20 one of which shall be a Republican. 

21 ‘‘(C) Two representatives of employers, of 

22 which one shall represent small employers and 

23 one shall represent large employers. 

24 ‘‘(D) Two representatives of health insur25 ers, of which one shall represent insurers that 
55 

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1 offer coverage in all markets (including indi2 vidual, small, and large markets), and one shall 

3 represent insurers that offer coverage in the 

4 small market. 

5 ‘‘(E) Two representatives of consumer or6 ganizations. 

7 ‘‘(F) Two representatives of insurance 

8 agents and brokers. 

9 ‘‘(G) Two representatives of healthcare 

10 providers. 

11 ‘‘(H) Two independent representatives of 

12 the American Academy of Actuaries who have 

13 familiarity with the actuarial methods applica14 ble to health insurance. 

15 ‘‘(I) One administrator of a qualified high 

16 risk pool. 

17 ‘‘(3) TERMS.—The members of the Commission 

18 shall serve for the duration of the Commission. The 

19 Secretary shall fill vacancies in the Commission as 

20 needed and in a manner consistent with the com21 position described in paragraph (2). 

22 ‘‘(b) DEVELOPMENT OF HARMONIZED STAND23 ARDS.— 

24 ‘‘(1) IN GENERAL.—In accordance with the 

25 process described in subsection (c), the Commission 
56 

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1 shall identify and recommend nationally harmonized 

2 standards for the small group health insurance mar3 ket, the individual health insurance market, and the 

4 large group health insurance market that relate to 

5 the following areas: 

6 ‘‘(A) Rating. 

7 ‘‘(B) Access to coverage. 

8 ‘‘(C) Patient protections. 

9 ‘‘(2) RECOMMENDATIONS.—The Commission 

10 shall recommend separate harmonized standards 

11 with respect to each of the three insurance markets 

12 described in paragraph (1) and separate standards 

13 for each element of the areas described in subpara14 graph (A) through (C) of such paragraph within 

15 each such market. Notwithstanding the previous sen16 tence, the Commission shall not recommend any har17 monized standards that disrupt, expand, or duplicate 

18 the benefit, service, or provider mandate standards 

19 provided in the State Benefit Compendium pursuant 

20 to section 2922(a). 

21 ‘‘(c) PROCESS FOR IDENTIFYING HARMONIZED

22 STANDARDS.— 

23 ‘‘(1) IN GENERAL.—The Commission shall de24 velop recommendations to harmonize inconsistent 

25 State insurance laws with the laws adopted in a plu-
57 

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1 rality of the States. In carrying out the previous 

2 sentence, the Commission shall review all State laws 

3 that regulate insurance in each of the insurance 

4 markets and areas described in subsection (b)(1) 

5 and identify the plurality requirement within each 

6 element of such areas. Such plurality requirement 

7 shall be the harmonized standard for such area in 

8 each such market. 

9 ‘‘(2) CONSULTATION.—The Commission shall 

10 consult with the National Association of Insurance 

11 Commissioners in identifying the plurality require12 ments for each element within the area and in rec13 ommending the harmonized standards. 

14 ‘‘(3) REVIEW OF FEDERAL LAWS.—The Com15 mission shall review whether any Federal law im16 poses a requirement relating to the markets and 

17 areas described in subsection (b)(1). In such case, 

18 such Federal requirement shall be deemed the plu19 rality requirement and the Commission shall rec20 ommend the Federal requirement as the harmonized 

21 standard for such elements. 

22 ‘‘(d) RECOMMENDATIONS AND ADOPTION BY SEC23 RETARY.— 

24 ‘‘(1) RECOMMENDATIONS.—Not later than 1 

25 year after the date of enactment of this title, the 
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1 Commission shall recommend to the Secretary the 

2 adoption of the harmonized standards identified pur3 suant to subsection (c). 

4 ‘‘(2) REGULATIONS.—Not later than 120 days 

5 after receipt of the Commission’s recommendations 

6 under paragraph (1), the Secretary shall issue final 

7 regulations adopting the recommended harmonized 

8 standards. If the Secretary finds the recommended 

9 standards for an element of an area to be arbitrary 

10 and inconsistent with the plurality requirements of 

11 this section, the Secretary may issue a unique har12 monized standard only for such element through the 

13 application of a process similar to the process set 

14 forth in subsection (c) and through the issuance of 

15 proposed and final regulations. 

16 ‘‘(3) EFFECTIVE DATE.—The regulations issued 

17 by the Secretary under paragraph (2) shall be effec18 tive on the date that is 2 years after the date on 

19 which such regulations were issued. 

20 ‘‘(e) TERMINATION.—The Commission shall termi21 nate and be dissolved after making the recommendations 

22 to the Secretary pursuant to subsection (d)(1). 

23 ‘‘(f) UPDATED HARMONIZED STANDARDS.— 

24 ‘‘(1) IN GENERAL.—Not later than 2 years 

25 after the termination of the Commission under sub-
59 

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1 section (e), and every 2 years thereafter, the Sec2 retary shall update the harmonized standards. Such 

3 updated standards shall be adopted in accordance 

4 with paragraph (2). 

5 ‘‘(2) UPDATING OF STANDARDS.— 

6 ‘‘(A) IN GENERAL.—The Secretary shall 

7 review all State laws that regulate insurance in 

8 each of the markets and elements of areas set 

9 forth in subsection (b)(1) and identify whether 

10 a plurality of States have adopted substantially 

11 similar requirements that differ from the har12 monized standards adopted by the Secretary 

13 pursuant to subsection (d). In such case, the 

14 Secretary shall consider State laws that have 

15 been enacted with effective dates that are con16 tingent upon adoption as a harmonized stand17 ard by the Secretary. Substantially similar re18 quirements for each element within such area 

19 shall be considered to be an updated har20 monized standard for such an area. 

21 ‘‘(B) REPORT.—The Secretary shall re22 quest the National Association of Insurance 

23 Commissioners to issue a report to the Sec24 retary every 2 years to assist the Secretary in 

25 identifying the updated harmonized standards 
60 

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1 under this paragraph. Nothing in this subpara2 graph shall be construed to prohibit the Sec3 retary from issuing updated harmonized stand4 ards in the absence of such a report. 

5 ‘‘(C) REGULATIONS.—The Secretary shall 

6 issue regulations adopting updated harmonized 

7 standards under this paragraph within 90 days 

8 of identifying such standards. Such regulations 

9 shall be effective beginning on the date that is 

10 2 years after the date on which such regula11 tions are issued. 

12 ‘‘(g) PUBLICATION.— 

13 ‘‘(1) LISTING.—The Secretary shall maintain 

14 an up to date listing of all harmonized standards 

15 adopted under this section on the Internet website of 

16 the Department of Health and Human Services. 

17 ‘‘(2) SAMPLE CONTRACT LANGUAGE.—The Sec18 retary shall publish on the Internet website of the 

19 Department of Health and Human Services sample 

20 contract language that incorporates the harmonized 

21 standards adopted under this section, which may be 

22 used by insurers seeking to qualify as an eligible in23 surer. The types of harmonized standards that shall 

24 be included in sample contract language are the 
61 

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1 standards that are relevant to the contractual bar2 gain between the insurer and insured. 

3 ‘‘(h) STATE ADOPTION AND ENFORCEMENT.—Not 

4 later than 2 years after the issuance by the Secretary of 

5 final regulations adopting harmonized standards under 

6 this section, the States may adopt such harmonized stand7 ards (and become an adopting State) and, in which case, 

8 shall enforce the harmonized standards pursuant to State 

9 law. 

10 ‘‘SEC. 2933. APPLICATION AND PREEMPTION. 

11 ‘‘(a) SUPERCEDING OF STATE LAW.— 

12 ‘‘(1) IN GENERAL.—The harmonized standards 

13 adopted under this subtitle shall supersede any and 

14 all State laws (whether enacted prior to or after the 

15 date of enactment of this title) insofar as such State 

16 laws relate to the areas of harmonized standards as 

17 applied to an eligible insurer, or health insurance 

18 coverage issued by a eligible insurer, in a non19 adopting State. 

20 ‘‘(2) NONADOPTING STATES.—This subtitle 

21 shall supersede any and all State laws of a non22 adopting State (whether enacted prior to or after the 

23 date of enactment of this title) insofar as they 

24 may— 
62 

•S 1955 IS

1 ‘‘(A) prohibit an eligible insurer from of2 fering coverage consistent with the harmonized 

3 standards in the nonadopting State; or 

4 ‘‘(B) discriminate against or among eligi5 ble insurers offering or seeking to offer health 

6 insurance coverage consistent with the har7 monized standards in the nonadopting State. 

8 ‘‘(b) SAVINGS CLAUSE AND CONSTRUCTION.— 

9 ‘‘(1) NONAPPLICATION TO ADOPTING STATES.— 

10 Subsection (a) shall not apply with respect to adopt11 ing States. 

12 ‘‘(2) NONAPPLICATION TO CERTAIN INSUR13 ERS.—Subsection (a) shall not apply with respect to 

14 insurers that do not qualify as eligible insurers who 

15 offer health insurance coverage in a nonadopting 

16 State. 

17 ‘‘(3) NONAPPLICATION WHERE OBTAINING RE18 LIEF UNDER STATE LAW.—Subsection (a)(1) shall 

19 not apply to any State law of a nonadopting State 

20 to the extent necessary to permit individuals or the 

21 insurance department of the State (or other State 

22 agency) to obtain relief under State law to require 

23 an eligible insurer to comply with the terms of the 

24 health insurance coverage issued in a nonadopting 

25 State. In no case shall this paragraph, or any other 
63 

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1 provision of this subtitle, be construed to permit a 

2 cause of action on behalf of an individual or any 

3 other person under State law in connection with a 

4 group health plan that is subject to the Employee 

5 Retirement Income Security Act of 1974 or health 

6 insurance coverage issued in connection with such 

7 plan. 

8 ‘‘(4) NONAPPLICATION TO ENFORCE REQUIRE9 MENTS RELATING TO THE COMPENDIUM.—Sub10 section (a)(1) shall not apply to any State law in a 

11 nonadopting State to the extent necessary to provide 

12 the insurance department of the State (or other 

13 state agency) authority to enforce State law require14 ments relating to the harmonized standards that are 

15 not set forth in the terms of the health insurance 

16 coverage issued in a nonadopting State, in a manner 

17 that is consistent with the harmonized standards 

18 and imposes no greater duties or obligations on 

19 health insurance issuers than the harmonized stand20 ards. 

21 ‘‘(5) NONAPPLICATION TO SUBSECTION

22 (a)(2).—Paragraphs (3) and (4) shall not apply with 

23 respect to subsection (a)(2). 

24 ‘‘(6) NO AFFECT ON PREEMPTION.—In no case 

25 shall this subsection be construed to affect the scope 
64 

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1 of the preemption provided for under the Employee 

2 Retirement Income Security Act of 1974. 

3 ‘‘(c) EFFECTIVE DATE.—This section shall apply be4 ginning on the date that is 2 years after the date on which 

5 final regulations are issued by the Secretary under this 

6 subtitle adopting the harmonized standards. 

7 ‘‘SEC. 2934. CIVIL ACTIONS AND JURISDICTION. 

8 ‘‘(a) IN GENERAL.—The district courts of the United 

9 States shall have exclusive jurisdiction over civil actions 

10 involving the interpretation of this subtitle. 

11 ‘‘(b) ACTIONS.—A health insurance issuer may bring 

12 an action in the district courts of the United States for 

13 injunctive or other equitable relief against a nonadopting 

14 State in connection with the application of a State law 

15 that violates this subtitle. 

16 ‘‘(c) VIOLATIONS OF SECTION 2933.—In the case of 

17 a nonadopting State that is in violation of section 

18 2933(a)(2), a health insurance issuer may bring an action 

19 in the district courts of the United States for damages 

20 against the nonadopting State and, if the health insurance 

21 issuer prevails in such action, the district court shall 

22 award the health insurance issuer its reasonable attorneys 

23 fees and costs. 
65 

•S 1955 IS

1 ‘‘SEC. 2935. AUTHORIZATION OF APPROPRIATIONS. 

2 ‘‘There are authorized to be appropriated such sums 

3 as may be necessary to carry out this subtitle.’’. 

Æ